I just got an email from pandora
As you probably know, in July of 2007 we had to block usage of Pandora outside the U.S. because of the lack of a viable license structure for Internet radio streaming in other countries. It was a terrible day. We did however hold out some hope that a solution might exist for the UK, so we left it unblocked as we worked diligently with the rights organizations to negotiate an economically workable license fee. After over a year of trying, this has proved impossible. Both the PPL (which represents the record labels) and the MCPS/PRS Alliance (which represents music publishers) have demanded per track performance minima rates which are far too high to allow ad supported radio to operate and so, hugely disappointing and depressing to us as it is, we have to block the last territory outside of the US.
I would gladly pay a fee to have access to Pandora, it is a wonderful thing from wonderful people, and it is depressing that the organisations who think they are protecting the artists are doing so by fucking over their customers.
Yes, there are technological ways around the IP block, though I won’t discuss them here. This is a sad day for online music.