[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 227 Reported in Senate (RS)]
Calendar No. 165
104th CONGRESS
1st Session
S. 227
[Report No. 104-128]
_______________________________________________________________________
A BILL
To amend title 17, United States Code, to provide an exclusive right to
perform sound recordings publicly by means of digital transmissions,
and for other purposes.
_______________________________________________________________________
August 4 (legislative day, July 10), 1995
Reported with an amendment
Calendar No. 165
104th CONGRESS
1st Session
S. 227
[Report No. 104-128]
To amend title 17, United States Code, to provide an exclusive right to
perform sound recordings publicly by means of digital transmissions,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 13 (legislative day, January 10), 1995
Mr. Hatch (for himself, Mrs. Feinstein, Mr. Simpson, Mr. DeWine, Mr.
Lott, and Mr. Baucus) introduced the following bill; which was read
twice and referred to the Committee on the Judiciary
August 4 (legislative day, July 10), 1995
Reported by Mr. Hatch, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To amend title 17, United States Code, to provide an exclusive right to
perform sound recordings publicly by means of digital transmissions,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Digital Performance Right
in Sound Recordings Act of 1995''.</DELETED>
<DELETED>SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.</DELETED>
<DELETED> Section 106 of title 17, United States Code, is amended--
</DELETED>
<DELETED> (1) in paragraph (4) by striking ``and'' after the
semicolon;</DELETED>
<DELETED> (2) in paragraph (5) by striking the period and
inserting ``; and''; and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>
<DELETED> ``(6) in the case of sound recordings, to perform
the copyrighted work publicly by means of a digital
transmission.''.</DELETED>
<DELETED>SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND
RECORDINGS.</DELETED>
<DELETED> Section 114 of title 17, United States Code, is amended--
</DELETED>
<DELETED> (1) in subsection (a) by striking ``and (3)'' and
replacing it with ``(3) and (6)'';</DELETED>
<DELETED> (2) in subsection (b) by deleting from the first
sentence ``phonorecords, or of copies of motion pictures and
other audiovisual works,'' and inserting ``phonorecords or
copies'';</DELETED>
<DELETED> (3) by striking subsection (d) and replacing it
with the following new subsection (d):</DELETED>
<DELETED> ``(d) Limitations on Exclusive Right.--Notwithstanding the
provisions of section 106(6)--</DELETED>
<DELETED> ``(1) Exempt transmissions.--The performance of a
sound recording publicly by means of a digital transmission,
other than as part of an interactive service, is not an
infringement of section 106(6) if the performance is part of--
</DELETED>
<DELETED> ``(A) a nonsubscription transmission, such
as a nonsubscription broadcast transmission;</DELETED>
<DELETED> ``(B) a prior or simultaneous transmission
incidental to a nonsubscription transmission, such as a
feed received by and then retransmitted by the
nonsubscription transmitter: Provided, That such
incidental transmissions do not include any
subscription transmission directly for reception by
members of the public;</DELETED>
<DELETED> ``(C) a retransmission of a
nonsubscription broadcast transmission: Provided, That,
in the case of a retransmission of a radio station's
broadcast transmission, the transmission is not
willfully or repeatedly retransmitted more than a
radius of one hundred and fifty miles from the site of
the radio broadcast transmitter;</DELETED>
<DELETED> ``(D) a further transmission by a
business, confined to its premises or the immediately
surrounding vicinity, of a transmission described in
paragraphs (A) or (B) of this subsection (d)(1);
or</DELETED>
<DELETED> ``(E) a retransmission otherwise subject
to liability, if such transmission is simultaneous with
the primary transmission and authorized by the primary
transmitter, and the primary transmitter has been
licensed to publicly perform the sound
recording.</DELETED>
<DELETED> ``(2) Subscription transmissions.--In the case of
a subscription transmission, the performance of a sound
recording publicly by means of a digital transmission shall be
subject to statutory licensing, in accordance with subsection
(f) of this section, if--</DELETED>
<DELETED> ``(A) the transmission is not part of an
interactive service; and</DELETED>
<DELETED> ``(B) the transmission does not exceed the
sound recording performance complement.</DELETED>
<DELETED> ``(3) Rights not otherwise limited.--</DELETED>
<DELETED> ``(A) Except as expressly provided herein,
this section does not limit or impair the exclusive
right to perform a sound recording publicly by means of
a digital transmission under section 106(6).</DELETED>
<DELETED> ``(B) Nothing in this section annuls or
limits in any way--</DELETED>
<DELETED> ``(i) the exclusive right to
publicly perform a musical work, including by
means of a digital transmission, under section
106(4),</DELETED>
<DELETED> ``(ii) the exclusive rights to
reproduce and distribute a sound recording or
the musical work embodied therein under
sections 106(1) and 106(3), including by means
of a digital phonorecord delivery as defined in
section 115, or</DELETED>
<DELETED> ``(iii) any other rights under any
other clause of section 106, or remedies
available under this title, as such rights or
remedies exist either before or after the date
of enactment of this Act.''; and</DELETED>
<DELETED> ``(4) by adding after subsection (d) the
following:</DELETED>
<DELETED> ``(e) Authority for Negotiations.--Any copyright owners of
sound recordings and any entities performing sound recordings affected
by this section may negotiate and agree upon the terms and rates of
royalty payments for the performance of such sound recordings and the
proportionate division of fees paid among copyright owners, and may
designate common agents to negotiate, agree to, pay, or receive such
royalty payments.</DELETED>
<DELETED> ``(f) Licenses for Subscription Transmissions.--</DELETED>
<DELETED> ``(1) No later than thirty days after the
enactment of this legislation, the Librarian of Congress shall
cause notice to be published in the Federal Register of the
initiation of voluntary negotiation proceedings for the purpose
of determining reasonable terms and rates of royalty payments
for the activities specified by subsection (d)(2) of this
section during the period beginning on the effective date of
this legislation and ending on December 31, 2000. Such terms
and rates shall distinguish among the different types of
digital transmission services then in operation. Any copyright
owners of sound recordings or any entities performing sound
recordings affected by this section may submit to the Librarian
of Congress licenses covering such activities with respect to
such sound recordings. The parties to each negotiation
proceeding shall bear their own costs.</DELETED>
<DELETED> ``(2) In the absence of license agreements
negotiated under paragraph (1), the Librarian of Congress
shall, pursuant to chapter 8, convene a copyright arbitration
royalty panel to determine and publish in the Federal Register
a schedule of rates and terms which, subject to paragraph (3),
shall be binding on all copyright owners of sound recordings
and entities performing sound recordings. In establishing such
rates and terms the copyright arbitration royalty panel may
consider the rates for comparable types of digital transmission
services and comparable circumstances under voluntary license
agreements negotiated as provided in paragraph (1). The parties
to the proceeding shall bear the entire cost thereof in such
manner and proportion as the arbitration panels shall direct.
The Librarian of Congress shall also establish requirements by
which copyright owners may receive reasonable notice of the use
of their sound recordings under this section, and under which
records of such use shall be kept by entities performing sound
recordings.</DELETED>
<DELETED> ``(3) License agreements voluntarily negotiated at
any time between one or more copyright owners of sound
recordings and one or more entities performing sound recordings
shall be given effect in lieu of any determination by the
Librarian of Congress.</DELETED>
<DELETED> ``(4) the procedures specified in paragraphs (1)
and (2) shall be repeated and concluded, in accordance with
regulations that the Librarian of Congress shall prescribe--
</DELETED>
<DELETED> ``(A) within a six-month period each time
that a petition is filed by any copyright owners of
sound recordings or any entities performing sound
recordings affected by this section indicating that a
new type of digital transmission service on which sound
recordings are performed is or is about to become
operational, and</DELETED>
<DELETED> ``(B) between June 30 and December 31,
2000 and at five-year intervals thereafter.</DELETED>
<DELETED> ``(5) Any person who wishes to perform a sound
recording publicly by means of a subscription transmission
under this subsection (f) may do so without infringing the
exclusive right of the copyright owner of the sound recording
by complying with such notice requirements as the Register of
Copyrights shall prescribe by regulation and by paying royalty
fees in accordance with this subsection, or, if such royalty
fees have not been set, by agreeing to pay such royalty fees as
shall be determined in accordance with this subsection, and any
royalty payments in arrears shall be made on or before the
twentieth day of the month next succeeding the month in which
the royalty fees are set.</DELETED>
<DELETED> ``(g) Proceeds From Licensing of Subscription
Transmissions.--In the case of a subscription transmission performance
of a sound recording licensed under subsection (f) of this section, the
copyright owner of the exclusive right under section 106(6) of this
title to publicly perform a sound recording by means of a digital
transmission shall allocate to recording artists in the following
manner its receipts from the licensing of subscription transmission
performances of the sound recording in accordance with subsection (f)
of this section:</DELETED>
<DELETED> ``(1) 2</DELETED>\<DELETED>1/2</DELETED>\
<DELETED>percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Musicians (or any successor entity) to
be distributed to nonfeatured musicians (whether or not members
of the American Federation of Musicians) who have performed on
sound recordings.</DELETED>
<DELETED> ``(2) 2</DELETED>\<DELETED>1/2</DELETED>\
<DELETED>percent of the receipts shall be deposited in an
escrow account managed by an independent administrator jointly
appointed by copyright owners of sound recordings and the
American Federation of Television and Radio Artists (or any
successor entity) to be distributed to nonfeatured vocalists
(whether or not members of the American Federation of
Television and Radio Artists) who have performed on sound
recordings.</DELETED>
<DELETED> ``(3) 45 percent of the receipts shall be
allocated, on a per sound recording basis, to the recording
artist or artists featured on such sound recording (or the
persons conveying rights in the artists' performance in the
sound recordings).</DELETED>
<DELETED> ``(h) Licensing to Affiliates.--Where the copyright owner
of a sound recording owns a controlling interest in, or otherwise
possesses the power directly or indirectly to exercise a controlling
influence over the management or policies of, an entity engaging in
digital transmissions covered by section 106(6) and licenses to such
entity the right to publicly perform a sound recording by means of a
digital transmission, the copyright owner shall make the licensed sound
recording available under section 106(6) on similar terms and
conditions to all other similarly-situated entities offering similar
types of digital transmission services, except that such copyright
owner may--</DELETED>
<DELETED> ``(1) impose reasonable requirements for
creditworthiness; and</DELETED>
<DELETED> ``(2) establish different prices, terms, and
conditions to take into account the types of services offered,
the duration of the license, the geographic region, the numbers
of subscribers served, and any other relevant
factors.</DELETED>
<DELETED> ``(i) No Effect on Royalties for Underlying Works.--
License fees payable for the public performance of sound recordings
under clause (6) of section 106 shall not be taken into account in any
administrative, judicial or other governmental proceeding to set or
adjust the royalties payable to copyright owners of musical works for
the public performance of their works.</DELETED>
<DELETED> ``(j) Definitions.--As used in this section, the following
terms have the following meanings:</DELETED>
<DELETED> ``(1) A `broadcast transmission' is a transmission
made by a broadcast station licensed as such by the Federal
Communications Commission.</DELETED>
<DELETED> ``(2) An `interactive service' is one that enables
a member of the public to receive, on request, a transmission
of a particular sound recording chosen by or on behalf of the
recipient. The ability of individuals to request that
particular sound recordings be performed for reception by the
public at large does not make a service interactive. If an
entity offers both interactive and non-interactive services
(either concurrently or at different times), the non-
interactive component shall not be treated as part of an
interactive service.</DELETED>
<DELETED> ``(3) A `nonsubscription transmission' is any
transmission that is not a subscription transmission.</DELETED>
<DELETED> ``(4) The `sound recording performance complement'
is the transmission of no more than--</DELETED>
<DELETED> ``(A) two selections each day of sound
recordings embodied in any one phonorecord distributed
in the United States for ultimate sale to consumers;
or</DELETED>
<DELETED> ``(B) three selections each day of sound
recordings of performances--</DELETED>
<DELETED> ``(i) by the same featured
recording artist, or</DELETED>
<DELETED> ``(ii) embodied in any set of
phonorecords or compilation of sound recordings
marketed together as a unit for ultimate sale
to consumers.</DELETED>
<DELETED> ``(5) A `subscription transmission' is a
transmission that is controlled and limited to particular
recipients, and for which consideration is required to be paid
or otherwise given by or on behalf of the recipient to receive
the transmission or a package of transmissions including the
transmission.''.</DELETED>
<DELETED>SEC. 4. SCOPE OF EXCLUSIVE RIGHTS IN NONDRAMATIC MUSICAL
WORKS: COMPULSORY LICENSE FOR MAKING AND DISTRIBUTING
PHONORECORDS.</DELETED>
<DELETED> Section 115 of title 17, United State Code, is amended--
</DELETED>
<DELETED> (1) by inserting before the period at the end of
the second sentence in subsection (a)(1) the words ``including
by means of a digital phonorecord delivery'';</DELETED>
<DELETED> (2) by inserting in the second sentence of
subsection (c)(2), after the words ``For this purpose,'' the
words ``and other than as provided in clause (3),'';</DELETED>
<DELETED> (3) by redesignating clauses (3), (4) and (5) of
subsection (c) as clauses (4), (5) and (6), respectively, and
by inserting the following new clause:</DELETED>
<DELETED> ``(3)(A) A compulsory license under this section
includes the right of the maker of a phonorecord of a
nondramatic musical work under subsection (a)(1) to distribute
or authorize distribution of the sound recording of such
phonorecord by means of a digital transmission which
constitutes a digital phonorecord delivery, regardless of
whether the digital transmission is also a public performance
of the sound recording under section 106(6) of this title or of
any nondramatic musical work embodied therein under section
106(4) of this title. For every digital phonorecord delivery by
or under the authority of the compulsory licensee, the royalty
payable by the compulsory licensee shall be the royalty
prescribed under clause (2) and chapter 8 of this
title.</DELETED>
<DELETED> ``(B) Independent of any right of public
performance under section 106(4), the copyright owner of a
nondramatic musical work embodied in a sound recording has the
right to receive royalty payments at the rates prescribed under
this subsection when the digital transmission of that sound
recording constitutes a digital phonorecord delivery. Unless
authorized by said copyright owner of the nondramatic musical
work or by any person who has obtained a compulsory license
under this section, such a digital transmission, by whomever
made, shall be actionable by the copyright owner in the
nondramatic musical work as an act of infringement: Provided,
however, That no such cause of action may be brought against a
copyright owner of a sound recording unless it authorized the
digital phonorecord delivery. Any such cause of action shall be
in addition to those available to the copyright owner of the
musical work under section 106(4) and the copyright owner of
the sound recording with respect to digital phonorecord
deliveries and under section 106(6).</DELETED>
<DELETED> ``(C) Nothing in section 1008 shall be construed
to prevent the exercise of the rights and remedies allowed by
clauses (3) and (7) and chapter 5 in the event of a digital
phonorecord delivery, except that no action alleging
infringement of copyright may be brought under this title
against a manufacturer, importer or distributor of a digital
audio recording device, a digital audio recording medium, an
analog recording device, or an analog recording medium, or
against a consumer, based on the actions described in such
section.</DELETED>
<DELETED> ``(D) Nothing in this section annuls or limits in
any way (i) the exclusive right to publicly perform a sound
recording or the musical work embodied therein, including by
means of a digital transmission, under sections 106(4) and
106(6), (ii) except for the compulsory licensing under the
conditions specified by this section, the exclusive rights to
reproduce and distribute the sound recording and the musical
work embodied therein under sections 106(1) and 106(3),
including by means of a digital phonorecord delivery, or (iii)
any other rights under any other clause of section 106, or
remedies available under this title, as such rights or remedies
exist either before or after the date of enactment of this
Act.''; and</DELETED>
<DELETED> (4) by adding after subsection (c) the
following:</DELETED>
<DELETED> ``(d) Definitions.--As used in this section, the following
term has the following meaning: A `digital phonorecord delivery' is
each individual digital transmission of a sound recording which results
in a specifically identified reproduction by or for any transmission
recipient of a phonorecord of that sound recording, regardless of
whether the digital transmission is also a public performance of the
sound recording or any nondramatic musical work embodied
therein.''.</DELETED>
<DELETED>SEC. 5. CONFORMING AMENDMENTS.</DELETED>
<DELETED> (a) Definitions.--Section 101 of title 17, United States
Code, is amended by inserting after the definition of ``device'',
``machine'', or ``process'' the following:</DELETED>
<DELETED> ``A `digital transmission' is a transmission in
whole or in part in a digital or other non-analog
format.''.</DELETED>
<DELETED> (b) Limitations on Exclusive Rights: Secondary
Transmissions.--Section 111(c)(1) of title 17, United States Code, is
amended in the first sentence by striking ``The'' and inserting
``Except in the case of a performance of a sound recording in the
course of a digital transmission, the''.</DELETED>
<DELETED> (c) Limitations on Exclusive Rights: Secondary
Transmissions of Superstations and Network Stations for Private Home
Viewing.--Section 119(a)(1) of title 17, United States Code, is amended
by striking ``Subject to'' and inserting ``Except in the case of a
performance of a sound recording in the course of a digital
transmission, and subject to''.</DELETED>
<DELETED> (d) Copyright Arbitration Royalty Panels.--</DELETED>
<DELETED> (1) Section 801(b)(1) of title 17, United States
Code, is amended in the first and second sentences by inserting
``114'' before ``115''.</DELETED>
<DELETED> (2) Section 802(c) of title 17, United States
Code, is amended in the third sentence by deleting ``section
111, 116, or 119,'' and inserting ``section 111, 114, 116, or
119, any person entitled to a compulsory license under section
114(d), any person entitled to a compulsory license under
section 115,''.</DELETED>
<DELETED> (3) Section 802(g) of title 17, United States
Code, is amended in the third sentence by inserting after
``111'' ``, 114''.</DELETED>
<DELETED> (4) Section 802(h)(2) of title 17, United States
Code, is amended by inserting after ``111'' ``,
114''.</DELETED>
<DELETED>SEC. 6. EFFECTIVE DATE.</DELETED>
<DELETED> This Act shall become effective three months after the
date of enactment, except that the provisions of sections 114(e) and
114(f) shall take effect immediately upon enactment.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Digital Performance Right in Sound
Recordings Act of 1995''.
SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.
Section 106 of title 17, United States Code, is amended--
(1) in paragraph (4) by striking ``and'' after the
semicolon;
(2) in paragraph (5) by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(6) in the case of sound recordings, to perform the
copyrighted work publicly by means of a digital audio
transmission.''.
SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.
Section 114 of title 17, United States Code, is amended--
(1) in subsection (a) by striking ``and (3)'' and inserting
``(3) and (6)'';
(2) in subsection (b) in the first sentence by striking
``phonorecords, or of copies of motion pictures and other
audiovisual works,'' and inserting ``phonorecords or copies'';
(3) by striking subsection (d) and inserting:
``(d) Limitations on Exclusive Right.--Notwithstanding the
provisions of section 106(6)--
``(1) Exempt transmissions and retransmissions.--The
performance of a sound recording publicly by means of a digital
audio transmission or retransmission, other than as a part of
an interactive service, is not an infringement of section
106(6) if the performance is part of--
``(A) a nonsubscription transmission, such as a
nonsubscription broadcast transmission;
``(B) a retransmission of a nonsubscription
broadcast transmission: Provided, That, in the case of
a retransmission of a radio station's broadcast
transmission--
``(i) the radio station's broadcast
transmission is not willfully or repeatedly
retransmitted more than a radius of 150 miles
from the site of the radio broadcast
transmitter, however--
``(I) the 150 mile limitation under
this clause shall not apply when a
nonsubscription broadcast transmission
by a radio station licensed by the
Federal Communications Commission is
retransmitted on a nonsubscription
basis by a terrestrial broadcast
station, terrestrial translator, or
terrestrial repeater licensed by the
Federal Communications Commission; and
``(II) in the case of a
subscription retransmission of a
nonsubscription broadcast
retransmission covered by subclause
(I), the 150 mile radius shall be
measured from the transmitter site of
such broadcast retransmitter;
``(ii) the retransmission is of radio
station broadcast transmissions that are--
``(I) obtained by the retransmitter
over the air;
``(II) not electronically processed
by the retransmitter to deliver
separate and discrete signals; and
``(III) retransmitted only within
the local communities served by the
retransmitter;
``(iii) the radio station's broadcast
transmission was being retransmitted to cable
systems (as defined in section 111(f)) by a
satellite carrier on January 1, 1995, and that
retransmission was being retransmitted by cable
systems as a separate and discrete signal, and
the satellite carrier obtains the radio
station's broadcast transmission in an analog
format: Provided, That the broadcast
transmission being retransmitted may embody the
programming of no more than one radio station;
or
``(iv) the radio station's broadcast
transmission is made by a noncommercial
educational broadcast station funded on or
after January 1, 1995, under section 396(k) of
the Communications Act of 1934 (47 U.S.C.
396(k)), consists solely of noncommercial
educational and cultural radio programs, and
the retransmission, whether or not
simultaneous, is a nonsubscription terrestrial
broadcast retransmission; or
``(C) a transmission or retransmission that comes
within any of the following categories:
``(i) a prior or simultaneous transmission
or retransmission incidental to an exempt
transmission or retransmission, such as a feed
received by and then retransmitted by an exempt
transmitter: Provided, That such incidental
transmissions or retransmissions do not include
any subscription transmission or
retransmission directly for reception by
members of the public;
``(ii) a transmission or retransmission
within a business establishment, confined to
its premises or the immediately surrounding
vicinity;
``(iii) a retransmission by any
retransmitter, including a multichannel video
programming distributor as defined in section
522(12) of the Communications Act of 1934 (47
U.S.C. 522(12)), of a transmission by a
transmitter licensed to publicly perform the
sound recording as a part of that transmission,
if the retransmission is simultaneous with the
licensed transmission and authorized by the
transmitter; or
``(iv) a transmission or retransmission to
a business establishment for use in the
ordinary course of its business: Provided, That
the business recipient does not retransmit the
transmission outside of its premises or the
immediately surrounding vicinity, and that the
transmission does not exceed the sound
recording performance complement. Nothing in
this clause shall limit the scope of the
exemption in clause (ii).
``(2) Subscription transmissions.--In the case of a
subscription transmission not exempt under subsection (d)(1),
the performance of a sound recording publicly by means of a
digital audio transmission shall be subject to statutory
licensing, in accordance with subsection (f) of this section,
if--
``(A) the transmission is not part of an
interactive service;
``(B) the transmission does not exceed the sound
recording performance complement;
``(C) the transmitting entity does not cause to be
published by means of an advance program schedule or
prior announcement the titles of the specific sound
recordings or phonorecords embodying such sound
recordings to be transmitted;
``(D) except in the case of transmission to a
business establishment, the transmitting entity does
not automatically and intentionally cause any device
receiving the transmission to switch from one program
channel to another; and
``(E) except as provided in section 1002(e) of this
title, the transmission of the sound recording is
accompanied by the information encoded in that sound
recording, if any, by or under the authority of the
copyright owner of that sound recording, that
identifies the title of the sound recording, the
featured recording artist who performs on the sound
recording, and related information, including
information concerning the underlying musical work and
its writer.
``(3) Licenses for transmissions by interactive services.--
``(A) No interactive service shall be granted an
exclusive license under section 106(6) for the
performance of a sound recording publicly by means of
digital audio transmission for a period in excess of 12
months, except that with respect to an exclusive
license granted to an interactive service by a licensor
that holds the copyright to 1,000 or fewer sound
recordings, the period of such license shall not exceed
24 months: Provided, however, That the grantee of such
exclusive license shall be ineligible to receive
another exclusive license for the performance of that
sound recording for a period of 13 months from the
expiration of the prior exclusive license.
``(B) The limitation set forth in subparagraph (A)
of this paragraph shall not apply if--
``(i) the licensor has granted and there
remain in effect licenses under section 106(6)
for the public performance of sound recordings
by means of digital audio transmission by at
least 5 different interactive services:
Provided, however, That each such license must
be for a minimum of 10 percent of the
copyrighted sound recordings owned by the
licensor that have been licensed on an
exclusive basis to interactive services, but in
no event less than 50 sound recordings; or
``(ii) the exclusive license is granted to
perform publicly up to 45 seconds of a sound
recording and the sole purpose of the
performance is to promote the distribution or
performance of that sound recording.
``(C) Notwithstanding the grant of an exclusive or
nonexclusive license of the right of public performance
under section 106(6), an interactive service may not
publicly perform a sound recording unless a license has
been granted for the public performance of any
copyrighted musical work contained in the sound
recording, Provided, That such license to publicly
perform the copyrighted musical work may be granted
either by a performing rights society representing the
copyright owner or by the copyright owner.
``(D) The performance of a sound recording by means
of a digital audio retransmission is not an
infringement of section 106(6) if--
``(i) the retransmission is of a
transmission by an interactive service licensed
to publicly perform the sound recording to a
particular member of the public as part of that
transmission; and
``(ii) the retransmission is simultaneous
with the licensed transmission, authorized by
the transmitter, and limited to that particular
member of the public intended by the
interactive service to be the recipient of the
transmission.
``(E) For the purposes of this paragraph--
``(i) a `licensor' shall include the
licensing entity and any other entity under any
material degree of common ownership,
management, or control that owns copyrights in
sound recordings; and
``(ii) a `performing rights society' is an
association or corporation that licenses the
public performance of nondramatic musical works
on behalf of the copyright owner, such as the
American Society of Composers, Authors and
Publishers, Broadcast Music, Inc., and SESAC,
Inc.
``(4) Rights not otherwise limited.--
``(A) Except as expressly provided in this section,
this section does not limit or impair the exclusive
right to perform a sound recording publicly by means of
a digital audio transmission under section 106(6).
``(B) Nothing in this section annuls or limits in
any way--
``(i) the exclusive right to publicly
perform a musical work, including by means of a
digital audio transmission, under section
106(4);
``(ii) the exclusive rights to reproduce
and distribute a sound recording or the musical
work embodied therein under sections 106(1) and
106(3); or
``(iii) any other rights under any other
clause of section 106, or remedies available
under this title, as such rights or remedies
exist either before or after the date of
enactment of the Digital Performance Right in
Sound Recordings Act of 1995.
``(C) Any limitations in this section on the
exclusive right under section 106(6) apply only to the
exclusive right under section 106(6) and not to any
other exclusive rights under section 106. Nothing in
this section shall be construed to annul, limit, impair
or otherwise affect in any way the ability of the owner
of a copyright in a sound recording to exercise the
rights under sections 106(1), 106(2) and 106(3), or to
obtain the remedies available under this title pursuant
to such rights, as such rights and remedies exist
either before or after the date of enactment of the
Digital Performance Right in Sound Recordings Act of
1995.''; and
(4) by adding after subsection (d) the following:
``(e) Authority for Negotiations.--
``(1) Notwithstanding any provision of the antitrust laws,
in negotiating statutory licenses in accordance with subsection
(f), any copyright owners of sound recordings and any entities
performing sound recordings affected by this section may
negotiate and agree upon the royalty rates and license terms
and conditions for the performance of such sound recordings and
the proportionate division of fees paid among copyright owners,
and may designate common agents on a nonexclusive basis to
negotiate, agree to, pay, or receive payments.
``(2) For licenses granted under section 106(6), other than
statutory licenses, such as for performances by interactive
services or performances that exceed the sound recording
performance complement--
``(A) copyright owners of sound recordings affected
by this section may designate common agents to act on
their behalf to grant licenses and receive and remit
royalty payments, Provided, That each copyright owner
shall establish the royalty rates and material license
terms and conditions unilaterally, that is, not in
agreement, combination, or concert with other copyright
owners of sound recordings; and
``(B) entities performing sound recordings affected
by this section may designate common agents to act on
their behalf to obtain licenses and collect and pay
royalty fees, Provided, That each entity performing
sound recordings shall determine the royalty rates and
material license terms and conditions unilaterally,
that is, not in agreement, combination, or concert with
other entities performing sound recordings.
``(f) Licenses for Nonexempt Subscription Transmissions.--
``(1) No later than 30 days after the enactment of the
Digital Performance Right in Sound Recordings Act of 1995, the
Librarian of Congress shall cause notice to be published in the
Federal Register of the initiation of voluntary negotiation
proceedings for the purpose of determining reasonable terms and
rates of royalty payments for the activities specified by
subsection (d)(2) of this section during the period beginning
on the effective date of such Act and ending on December 31,
2000. Such terms and rates shall distinguish among the
different types of digital audio transmission services then in
operation. Any copyright owners of sound recordings or any
entities performing sound recordings affected by this section
may submit to the Librarian of Congress licenses covering such
activities with respect to such sound recordings. The parties
to each negotiation proceeding shall bear their own costs.
``(2) In the absence of license agreements negotiated under
paragraph (1), the Librarian of Congress shall, pursuant to
chapter 8, convene a copyright arbitration royalty panel to
determine and publish in the Federal Register a schedule of
rates and terms which, subject to paragraph (3), shall be
binding on all copyright owners of sound recordings and
entities performing sound recordings. In establishing such
rates and terms the copyright arbitration royalty panel may
consider the rates for comparable types of digital audio
transmission services and comparable circumstances under
voluntary license agreements negotiated as provided in
paragraph (1). The parties to the proceeding shall bear the
entire cost of the proceeding in such manner and proportion as
the arbitration panels shall direct. The Librarian of Congress
shall also establish requirements by which copyright owners may
receive reasonable notice of the use of their sound recordings
under this section, and under which records of such use shall
be kept by entities performing sound recordings.
``(3) License agreements voluntarily negotiated at any time
between one or more copyright owners of sound recordings and
one or more entities performing sound recordings shall be given
effect in lieu of any determination by a copyright arbitration
royalty panel or decision by the Librarian of Congress.
``(4) The procedures specified in paragraphs (1) and (2)
shall be repeated and concluded, in accordance with regulations
that the Librarian of Congress shall prescribe--
``(A) within a 6-month period each time that a
petition is filed by any copyright owners of sound
recordings or any entities performing sound recordings
affected by this section indicating that a new type of
digital audio transmission service on which sound
recordings are performed is or is about to become
operational, and
``(B) between June 30 and December 31, 2000 and at
5-year intervals thereafter.
``(5)(A) Any person who wishes to perform a sound recording
publicly by means of a nonexempt subscription transmission
under this subsection may do so without infringing the
exclusive right of the copyright owner of the sound recording--
``(i) by complying with such notice requirements as
the Register of Copyrights shall prescribe by
regulation and by paying royalty fees in accordance
with this subsection; or
``(ii) if such royalty fees have not been set, by
agreeing to pay such royalty fees as shall be
determined in accordance with this subsection.
``(B) Any royalty payments in arrears shall be made on or
before the twentieth day of the month next succeeding the month
in which the royalty fees are set.
``(g) Proceeds From Licensing of Subscription Transmissions.--
``(1) Except in the case of a subscription transmission
licensed in accordance with subsection (f) of this section--
``(A) a featured recording artist who performs on a
sound recording that has been licensed for a
subscription transmission shall be entitled to receive
payments from the copyright owner of the sound
recording in accordance with the terms of the artist's
contract; and
``(B) a nonfeatured recording artist who performs
on a sound recording that has been licensed for a
subscription transmission shall be entitled to receive
payments from the copyright owner of the sound
recording in accordance with the terms of the
nonfeatured recording artist's applicable contract or
other applicable agreement.
``(2) The copyright owner of the exclusive right under
section 106(6) of this title to publicly perform a sound
recording by means of a digital audio transmission shall
allocate to recording artists in the following manner its
receipts from the statutory licensing of subscription
transmission performances of the sound recording in accordance
with subsection (f) of this section:
``(A) 2\1/2\ percent of the receipts shall be
deposited in an escrow account managed by an
independent administrator jointly appointed by
copyright owners of sound recordings and the American
Federation of Musicians (or any successor entity) to be
distributed to nonfeatured musicians (whether or not
members of the American Federation of Musicians) who
have performed on sound recordings.
``(B) 2\1/2\ percent of the receipts shall be
deposited in an escrow account managed by an
independent administrator jointly appointed by
copyright owners of sound recordings and the American
Federation of Television and Radio Artists (or any
successor entity) to be distributed to nonfeatured
vocalists (whether or not members of the American
Federation of Television and Radio Artists) who have
performed on sound recordings.
``(C) 45 percent of the receipts shall be
allocated, on a per sound recording basis, to the
recording artist or artists featured on such sound
recording (or the persons conveying rights in the
artists' performance in the sound recordings).
``(h) Licensing to Affiliates.--
``(1) If the copyright owner of a sound recording licenses
an affiliated entity the right to publicly perform a sound
recording by means of a digital audio transmission under
section 106(6), the copyright owner shall make the licensed
sound recording available under section 106(6) on no less
favorable terms and conditions to all bona fide entities that
offer similar services, except that, if there are material
differences in the scope of the requested license with respect
to the type of service, the particular sound recordings
licensed, the frequency of use, the number of subscribers
served, or the duration, then the copyright owner may establish
different terms and conditions for such other services.
``(2) The limitation set forth in paragraph (1) of this
subsection shall not apply in the case where the copyright
owner of a sound recording licenses--
``(A) an interactive service; or
``(B) an entity to perform publicly up to 45
seconds of the sound recording and the sole purpose of
the performance is to promote the distribution or
performance of that sound recording.
``(i) No Effect on Royalties for Underlying Works.--License fees
payable for the public performance of sound recordings under clause (6)
of section 106 shall not be taken into account in any administrative,
judicial, or other governmental proceeding to set or adjust the
royalties payable to copyright owners of musical works for the public
performance of their works. It is the intent of Congress that royalties
payable to copyright owners of musical works for the public performance
of their works shall
not be diminished in any respect as a result of the rights granted by
section 106(6).
``(j) Definitions.--As used in this section, the following terms
have the following meanings:
``(1) An `affiliated entity' is an entity engaging in
digital audio transmissions covered by section 106(6), other
than an interactive service, in which the licensor has any
direct or indirect partnership or any ownership interest
amounting to 5 percent or more of the outstanding voting or
non-voting stock.
``(2) A `broadcast transmission' is a transmission made by
a broadcast station licensed as such by the Federal
Communications Commission.
``(3) A `digital audio transmission' is a digital
transmission as defined in section 101, that embodies the
transmission of a sound recording. This term does not include
the transmission of any audiovisual work.
``(4) An `interactive service' is one that enables a member
of the public to receive, on request, a transmission of a
particular sound recording chosen by or on behalf of the
recipient. The ability of individuals to request that
particular sound recordings be performed for reception by the
public at large does not make a service interactive. If an
entity offers both interactive and non-interactive services
(either concurrently or at different times), the non-
interactive component shall not be treated as part of an
interactive service.
``(5) A `nonsubscription transmission', `nonsubscription
retransmission', or a `nonsubscription broadcast transmission'
is any transmission or retransmission that is not a
subscription transmission or retransmission.
``(6) A `retransmission' includes any further simultaneous
retransmission of the same transmission. Nothing in this
definition shall be construed to exempt a transmission that
fails to satisfy a separate element required to qualify for an
exemption under section 114(d)(1).
``(7) The `sound recording performance complement' is the
transmission during any 3-hour period, on a particular channel
used by a transmitting entity, of no more than--
``(A) 3 different selections of sound recordings
from any one phonorecord lawfully distributed for
public performance or sale in the United States, if no
more than 2 such selections are transmitted
consecutively; or
``(B) 4 different selections of sound recordings
``(i) by the same featured recording
artist; or
``(ii) from any set or compilation of
phonorecords lawfully distributed together as a
unit for public performance or sale in the
United States,
if no more than three such selections are transmitted
consecutively:
Provided, That the transmission of selections in excess of the
numerical limits provided for in clauses (A) and (B) from
multiple phonorecords shall nonetheless qualify as a sound
recording performance complement if the programming of the
multiple phonorecords was not willfully intended to avoid the
numerical limitations prescribed in such clauses.
``(8) A `subscription transmission' is a transmission that
is controlled and limited to particular recipients, and for
which consideration is required to be paid or otherwise given
by or on behalf of the recipient to receive the transmission or
a package of transmissions including the transmission.''.
SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.
Section 115 of title 17, United States Code, is amended--
(1) in subsection (a)(1)--
(A) in the first sentence by striking out ``any
other person'' and inserting in lieu thereof ``any
other person, including those who make phonorecords or
digital phonorecord deliveries by means of a digital
audio transmission,''; and
(B) in the second sentence by inserting before the
period ``, including by means of a digital phonorecord
delivery'';
(2) in subsection (c)(2) in the second sentence by
inserting ``and other than as provided in paragraph (3),''
after ``For this purpose,'';
(3) by redesignating paragraphs (3), (4), and (5) of
subsection (c) as paragraphs (4), (5), and (6), respectively,
and by inserting after paragraph (2) the following new
paragraph:
``(3)(A) A compulsory license under this section includes
the right of the compulsory licensee to distribute or authorize
the distribution of a phonorecord of a nondramatic musical work
by means of a digital transmission which constitutes a digital
phonorecord delivery, regardless of whether the digital
transmission is also a public performance of the sound
recording under section 106(6) of this title or of any
nondramatic musical work embodied therein under section 106(4)
of this title. For every digital phonorecord delivery by or
under the authority of the compulsory licensee--
``(i) on or before December 31, 1997, the royalty
payable by the compulsory licensee shall be the royalty
prescribed under paragraph (2) and chapter 8 of this
title; and
``(ii) on or after January 1, 1998, the royalty
payable by the compulsory licensee shall be the royalty
prescribed under subparagraphs (B) through (F) and
chapter 8 of this title.
``(B) Notwithstanding any provision of the antitrust laws,
for the purpose of this subparagraph, any copyright owners of
nondramatic musical works and any persons entitled to obtain a
compulsory license under subsection (a)(1) may negotiate and
agree upon the terms and rates of royalty payments under this
paragraph and the proportionate division of fees paid among
copyright owners, and may designate common agents to negotiate,
agree to, pay or receive such royalty payments. Such authority
to negotiate the terms and rates of royalty payments includes,
but is not limited to, the authority to negotiate the year
during which the royalty rates prescribed under subparagraphs (B)
through (F) and chapter 8 of this title shall next be determined.
``(C) During the period of June 30, 1996, through December
31, 1996, Librarian of Congress shall cause notice to be
published in the Federal Register of the initiation of
voluntary negotiation proceedings for the purpose of
determining reasonable terms and rates of royalty payments for
the activities specified by subparagraph (A) during the period
beginning January 1, 1998, and ending on December 31, 2007, or
such earlier date (regarding digital transmissions) as the
parties may agree. Such terms and rates shall distinguish
between (i) digital phonorecord deliveries where the
reproduction or distribution of a phonorecord is incidental to
the transmission which constitutes the digital phonorecord
delivery, and (ii) digital phonorecord deliveries in general.
Any copyright owners of nondramatic musical works and any
persons entitled to obtain a compulsory license under
subsection (a)(1) may submit to the Librarian of Congress
licenses covering such activities. The parties to each
negotiation proceeding shall bear their own costs.
``(D) In the absence of license agreements negotiated under
subparagraph (C), the Librarian of Congress shall, pursuant to
chapter 8, convene a copyright arbitration royalty panel to
determine and publish in the Federal Register a schedule of
rates and terms which, subject to subparagraph (E), shall be
binding on all copyright owners of nondramatic musical works
and persons entitled to obtain a compulsory license under
subsection (a)(1) during the period beginning January 1, 1998,
and ending on December 31, 2007, or such earlier date
(regarding digital transmissions) as may be determined pursuant
to subparagraph (C) or chapter 8. Such terms and rates shall
distinguish between (i) digital phonorecord deliveries where
the reproduction or distribution of a phonorecord is incidental
to the transmission which constitutes the digital phonorecord
delivery, and (ii) digital phonorecord deliveries in general.
In addition to the objectives set forth in section 801(b)(1),
in establishing such rates and terms, the copyright arbitration
royalty panel may consider rates under voluntary license
agreements negotiated as provided in subparagraph (C). The
royalty rates payable for a compulsory license for a digital
phonorecord delivery under this section shall be established de
novo and no precedential effect shall be given to the amount of
the royalty payable by a compulsory licensee for digital
phonorecord deliveries on or before December 31, 1997. The
parties to the proceeding shall bear the entire cost thereof in
such manner and proportion as the arbitration panels shall
direct. The Librarian of Congress shall also establish
requirements by which copyright owners may receive reasonable
notice of the use of their works under this section, and under
which records of such use shall be kept and made available by
persons making digital phonorecord deliveries.
``(E)(i) License agreements voluntarily negotiated at any
time between one or more copyright owners of nondramatic
musical works and one or more persons entitled to obtain a
compulsory license under subsection (a)(1) shall be given
effect in lieu of any determination by the Librarian of
Congress. Subject to clause (ii), the royalty rates determined
pursuant to subparagraph (C) or (D) shall be given effect in
lieu of any contrary royalty rates specified in a contract
pursuant to which a recording artist who is the author of a
nondramatic musical work grants a license under that person's
exclusive rights in the musical work under section 106(1) or
(3) to a person desiring to fix in a tangible medium of
expression a sound recording embodying the musical work.
``(ii) Clause (i) shall not apply to--
``(I) a contract entered into on or before June 22,
1995, and not modified thereafter for the purpose of
reducing such rates or of increasing the number of
musical works within the scope of the contract covered
by the reduced rates, except if a contract entered into
on or before June 22, 1995, is modified thereafter for
the purpose of increasing the number of musical works
within the scope of the contract, any contrary royalty
rates specified in the contract shall be given effect
in lieu of royalty rates determined pursuant to
subparagraph (C) or (D) for the number of musical works
within the scope of the contract as of June 22, 1995;
and
``(II) a contract entered into after the date that
the sound recording is fixed in a tangible medium of
expression substantially in a form intended for
commercial release, if at the time the contract is
entered into, the recording artist retains the right to
grant licenses under sections 106(1) and 106(3).
``(F) The procedures specified in subparagraphs (C) and (D)
shall be repeated and concluded, in accordance with regulations
that the Librarian of Congress shall prescribe, as provided in
section 803(a)(3), except to the extent that different times
for the repeating and concluding of such proceedings may be
determined in accordance with subparagraph (C) or (D).
``(G) Except as provided in section 1002(e) of this title,
a digital phonorecord delivery licensed under this paragraph
shall be accompanied by the information encoded in the sound
recording, if any, by or under the authority of the copyright
owner of that sound recording, that identifies the title of the
sound recording, the featured recording artist who performs on
the sound recording, and related information, including
information concerning the underlying musical work and its
writer.
``(H)(i) A digital phonorecord delivery of a sound
recording is actionable as an act of infringement under section
501, and is fully subject to the remedies provided by sections
502 through 506 and sections 509 and 510, unless--
``(I) the digital phonorecord delivery has been
authorized by the copyright owner of the sound
recording; and
``(II) the owner of the copyright in the sound
recording or the entity making the digital phonorecord
delivery has obtained a compulsory license under this
section or has otherwise been authorized to distribute
or authorize the distribution, by means of a digital
phonorecord delivery, of each nondramatic musical work
embodied in the sound recording.
``(ii) Any cause of action under this subparagraph shall be
in addition to those available to the owner of the copyright in
the nondramatic musical work under subsection (c)(5) and
section 106(4) and the owner of the copyright in the sound
recording under section 106(6).
``(I) The liability of the copyright owner of a sound
recording for infringement of the copyright in a musical work
embodied in the sound recording shall be determined in
accordance with applicable law, except that the owner of a
copyright in a sound recording shall not be liable for a
digital phonorecord delivery by a third party if the owner of
the copyright in the sound recording does not license the
distribution of a phonorecord of the musical work.
``(J) Nothing in section 1008 shall be construed to prevent
the exercise of the rights and remedies allowed by this
paragraph, paragraph (7), and chapter 5 in the event of a
digital phonorecord delivery, except that no action alleging
infringement of copyright may be brought under this title
against a manufacturer, importer or distributor of a digital
audio recording device, a digital audio recording medium, an
analog recording device, or an analog recording medium, or
against a consumer, based on the actions described in such
section.
``(K) Nothing in this section annuls or limits (i) the
exclusive right to publicly perform a sound recording or the
musical work embodied therein, including by means of a digital
transmission, under sections 106(4) and 106(6), (ii) except for
compulsory licensing under the conditions specified by this
section, the exclusive rights to reproduce and distribute the
sound recording and the musical work embodied therein under
sections 106(1) and 106(3), including by means of a digital
phonorecord delivery, or (iii) any other rights under any other
provision of section 106, or remedies available under this
title, as such rights or remedies exist either before or after
the date of enactment of the Digital Performance Right in Sound
Recordings Act of 1995.
``(L) The provisions of this section concerning digital
phonorecord deliveries shall not apply to any exempt
transmissions or retransmissions under section 114(d)(1). The
exemptions created in section 114(d)(1) do not expand or reduce
the rights of copyright owners under section 106 (1) through
(5) with respect to such transmissions and retransmissions.'';
and
(5) by adding after subsection (c) the following:
``(d) Definition.--As used in this section, the following term has
the following meaning: A `digital phonorecord delivery' is each
individual delivery of a phonorecord by digital transmission of a sound
recording which results in a specifically identifiable reproduction by
or for any transmission recipient of a phonorecord of that sound
recording, regardless of whether the digital transmission is also a
public performance of the sound recording or any nondramatic musical
work embodied therein. A digital phonorecord delivery does not result
from a real-time, noninteractive subscription transmission of a sound
recording where no reproduction of the sound recording or the musical
work embodied therein is made from the inception of the transmission
through to its receipt by the transmission recipient in order to make
the sound recording audible.''.
SEC. 5. CONFORMING AMENDMENTS.
(a) Definitions.--Section 101 of title 17, United States Code, is
amended by inserting after the definition of ``device'', ``machine'',
or ``process'' the following:
``A `digital transmission' is a transmission in whole or in
part in a digital or other non-analog format.''.
(b) Limitations on Exclusive Rights: Secondary Transmissions.--
Section 111(c)(1) of title 17, United States Code, is amended in the
first sentence by inserting ``and section 114(d)'' after ``of this
subsection''.
(c) Limitations on Exclusive Rights: Secondary Transmissions of
Superstations and Network Stations for Private Home Viewing.--
(1) Section 119(a)(1) of title 17, United States Code, is
amended in the first sentence by inserting ``and section
114(d)'' after ``of this subsection''.
(2) Section 119(a)(2)(A) of title 17, United States Code,
is amended in the first sentence by inserting ``and section
114(d)'' after ``of this subsection''.
(d) Copyright Arbitration Royalty Panels.--
(1) Section 801(b)(1) of title 17, United States Code, is
amended in the first and second sentences by striking ``115''
each place it appears and inserting ``114, 115,''.
(2) Section 802(c) of title 17, United States Code, is
amended in the third sentence by striking ``section 111, 116,
or 119,'' and inserting ``section 111, 114, 116, or 119, any
person entitled to a compulsory license under section 114(d),
any person entitled to a compulsory license under section
115,''.
(3) Section 802(g) of title 17, United States Code, is
amended in the third sentence by inserting ``114,'' after
``111,''.
(4) Section 802(h)(2) of title 17, United States Code, is
amended by inserting ``114,'' after ``111,''.
SEC. 6. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect 3
months after the date of enactment of this Act, except that the
provisions of sections 114(e) and 114(f) of title 17, United States
Code (as added by section 3 of this Act) shall take effect immediately
upon the date of enactment of this Act.
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S 227 RS----3