[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5469 Engrossed Amendment Senate (EAS)]
In the Senate of the United States,
November 14, 2002.
Resolved, That the bill from the House of Representatives (H.R.
5469) entitled ``An Act to amend title 17, United States Code, with
respect to the statutory license for webcasting, and for other
purposes.'', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Webcaster Settlement Act of
2002''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Some small webcasters who did not participate in the
copyright arbitration royalty panel proceeding leading to the
July 8, 2002 order of the Librarian of Congress establishing
rates and terms for certain digital performances and ephemeral
reproductions of sound recordings, as provided in part 261 of
the Code of Federal Regulations (published in the Federal
Register on July 8, 2002) (referred to in this section as
``small webcasters''), have expressed reservations about the
fee structure set forth in such order, and have expressed their
desire for a fee based on a percentage of revenue.
(2) Congress has strongly encouraged representatives of
copyright owners of sound recordings and representatives of the
small webcasters to engage in negotiations to arrive at an
agreement that would include a fee based on a percentage of
revenue.
(3) The representatives have arrived at an agreement that
they can accept in the extraordinary and unique circumstances
here presented, specifically as to the small webcasters, their
belief in their inability to pay the fees due pursuant to the
July 8 order, and as to the copyright owners of sound
recordings and performers, the strong encouragement of Congress
to reach an accommodation with the small webcasters on an
expedited basis.
(4) The representatives have indicated that they do not
believe the agreement provides for or in any way approximates
fair or reasonable royalty rates and terms, or rates and terms
that would have been negotiated in the marketplace between a
willing buyer and a willing seller.
(5) Congress has made no determination as to whether the
agreement provides for or in any way approximates fair or
reasonable fees and terms, or rates and terms that would have
been negotiated in the marketplace between a willing buyer and
a willing seller.
(6) Congress likewise has made no determination as to
whether the July 8 order is reasonable or arbitrary, and
nothing in this Act shall be taken into account by the United
States Court of Appeals for the District of Columbia Circuit in
its review of such order.
(7) It is, nevertheless, in the public interest for the
parties to be able to enter into such an agreement without fear
of liability for deviating from the fees and terms of the July
8 order, if it is clear that the agreement will not be
admissible as evidence or otherwise taken into account in any
government proceeding involving the setting or adjustment of
the royalties payable to copyright owners of sound recordings
for the public performance or reproduction in ephemeral
phonorecords or copies of such works, the determination of
terms or conditions related thereto, or the establishment of
notice or recordkeeping requirements.
SEC. 3. SUSPENSION OF CERTAIN PAYMENTS.
(a) Noncommercial Webcasters.--
(1) In general.--The payments to be made by noncommercial
webcasters for the digital performance of sound recordings
under section 114 of title 17, United States Code, and the
making of ephemeral phonorecords under section 112 of title 17,
United States Code, during the period beginning on October 28,
1998, and ending on May 31, 2003, which have not already been
paid, shall not be due until June 20, 2003.
(2) Definition.--In this subsection, the term
``noncommercial webcaster'' has the meaning given that term in
section 114(f)(5)(E)(i) of title 17, United States Code, as
added by section 4 of this Act.
(b) Small Commercial Webcasters.--
(1) In general.--The receiving agent may, in a writing
signed by an authorized representative thereof, delay the
obligation of any 1 or more small commercial webcasters to make
payments pursuant to sections 112 and 114 of title 17, United
States Code, for a period determined by such entity to allow
negotiations as permitted in section 4 of this Act, except that
any such period shall end no later than December 15, 2002. The
duration and terms of any such delay shall be as set forth in
such writing.
(2) Definitions.--In this subsection--
(A) the term ``webcaster'' has the meaning given
that term in section 114(f)(5)(E)(iii) of title 17,
United States Code, as added by section 4 of this Act;
and
(B) the term ``receiving agent'' shall have the
meaning given that term in section 261.2 of title 37,
Code of Federal Regulations, as published in the
Federal Register on July 8, 2002.
SEC. 4. AUTHORIZATION FOR SETTLEMENTS.
Section 114(f) of title 17, United States Code, is amended by
adding after paragraph (4) the following:
``(5)(A) Notwithstanding section 112(e) and the other
provisions of this subsection, the receiving agent may enter
into agreements for the reproduction and performance of sound
recordings under section 112(e) and this section by any 1 or
more small commercial webcasters or noncommercial webcasters
during the period beginning on October 28, 1998, and ending on
December 31, 2004, that, once published in the Federal Register
pursuant to subparagraph (B), shall be binding on all copyright
owners of sound recordings and other persons entitled to
payment under this section, in lieu of any determination by a
copyright arbitration royalty panel or decision by the
Librarian of Congress. Any such agreement for small commercial
webcasters shall include provisions for payment of royalties on
the basis of a percentage of revenue or expenses, or both, and
include a minimum fee. Any such agreement may include other
terms and conditions, including requirements by which copyright
owners may receive notice of the use of their sound recordings
and under which records of such use shall be kept and made
available by small commercial webcasters or noncommercial
webcasters. The receiving agent shall be under no obligation to
negotiate any such agreement. The receiving agent shall have no
obligation to any copyright owner of sound recordings or any
other person entitled to payment under this section in
negotiating any such agreement, and no liability to any
copyright owner of sound recordings or any other person
entitled to payment under this section for having entered into
such agreement.
``(B) The Copyright Office shall cause to be published in
the Federal Register any agreement entered into pursuant to
subparagraph (A). Such publication shall include a statement
containing the substance of subparagraph (C). Such agreements
shall not be included in the Code of Federal Regulations.
Thereafter, the terms of such agreement shall be available, as
an option, to any small commercial webcaster or noncommercial
webcaster meeting the eligibility conditions of such agreement.
``(C) Neither subparagraph (A) nor any provisions of any
agreement entered into pursuant to subparagraph (A), including
any rate structure, fees, terms, conditions, or notice and
recordkeeping requirements set forth therein, shall be
admissible as evidence or otherwise taken into account in any
administrative, judicial, or other government proceeding
involving the setting or adjustment of the royalties payable
for the public performance or reproduction in ephemeral
phonorecords or copies of sound recordings, the determination
of terms or conditions related thereto, or the establishment of
notice or recordkeeping requirements by the Librarian of
Congress under paragraph (4) or section 112(e)(4). It is the
intent of Congress that any royalty rates, rate structure,
definitions, terms, conditions, or notice and recordkeeping
requirements, included in such agreements shall be considered
as a compromise motivated by the unique business, economic and
political circumstances of small webcasters, copyright owners,
and performers rather than as matters that would have been
negotiated in the marketplace between a willing buyer and a
willing seller, or otherwise meet the objectives set forth in
section 801(b).
``(D) Nothing in the Small Webcaster Settlement Act of 2002
or any agreement entered into pursuant to subparagraph (A)
shall be taken into account by the United States Court of
Appeals for the District of Columbia Circuit in its review of
the determination by the Librarian of Congress of July 8, 2002,
of rates and terms for the digital performance of sound
recordings and ephemeral recordings, pursuant to sections 112
and 114.
``(E) As used in this paragraph--
``(i) the term `noncommercial webcaster' means a
webcaster that--
``(I) is exempt from taxation under section
501 of the Internal Revenue Code of 1986 (26
U.S.C. 501);
``(II) has applied in good faith to the
Internal Revenue Service for exemption from
taxation under section 501 of the Internal
Revenue Code and has a commercially reasonable
expectation that such exemption shall be
granted; or
``(III) is operated by a State or
possession or any governmental entity or
subordinate thereof, or by the United States or
District of Columbia, for exclusively public
purposes;
``(ii) the term `receiving agent' shall have the
meaning given that term in section 261.2 of title 37,
Code of Federal Regulations, as published in the
Federal Register on July 8, 2002; and
``(iii) the term `webcaster' means a person or
entity that has obtained a compulsory license under
section 112 or 114 and the implementing regulations
therefor to make eligible nonsubscription transmissions
and ephemeral recordings.
``(F) The authority to make settlements pursuant to
subparagraph (A) shall expire December 15, 2002, except with
respect to noncommercial webcasters for whom the authority
shall expire May 31, 2003.''.
SEC. 5. DEDUCTIBILITY OF COSTS AND EXPENSES OF AGENTS AND DIRECT
PAYMENT TO ARTISTS OF ROYALTIES FOR DIGITAL PERFORMANCES
OF SOUND RECORDINGS.
(a) Findings.--Congress finds that--
(1) in the case of royalty payments from the licensing of
digital transmissions of sound recordings under subsection (f)
of section 114 of title 17, United States Code, the parties
have voluntarily negotiated arrangements under which payments
shall be made directly to featured recording artists and the
administrators of the accounts provided in subsection (g)(2) of
that section;
(2) such voluntarily negotiated payment arrangements have
been codified in regulations issued by the Librarian of
Congress, currently found in section 261.4 of title 37, Code of
Federal Regulations, as published in the Federal Register on
July 8, 2002;
(3) other regulations issued by the Librarian of Congress
were inconsistent with the voluntarily negotiated arrangements
by such parties concerning the deductibility of certain costs
incurred for licensing and arbitration, and Congress is
therefore restoring those terms as originally negotiated among
the parties; and
(4) in light of the special circumstances described in this
subsection, the uncertainty created by the regulations issued
by the Librarian of Congress, and the fact that all of the
interested parties have reached agreement, the voluntarily
negotiated arrangements agreed to among the parties are being
codified.
(b) Deductibility.--Section 114(g) of title 17, United States Code,
is amended by adding after paragraph (2) the following:
``(3) A nonprofit agent designated to distribute receipts
from the licensing of transmissions in accordance with
subsection (f) may deduct from any of its receipts, prior to
the distribution of such receipts to any person or entity
entitled thereto other than copyright owners and performers who
have elected to receive royalties from another designated agent
and have notified such nonprofit agent in writing of such
election, the reasonable costs of such agent incurred after
November 1, 1995, in--
``(A) the administration of the collection,
distribution, and calculation of the royalties;
``(B) the settlement of disputes relating to the
collection and calculation of the royalties; and
``(C) the licensing and enforcement of rights with
respect to the making of ephemeral recordings and
performances subject to licensing under section 112 and
this section, including those incurred in participating
in negotiations or arbitration proceedings under
section 112 and this section, except that all costs
incurred relating to the section 112 ephemeral
recordings right may only be deducted from the
royalties received pursuant to section 112.
``(4) Notwithstanding paragraph (3), any designated agent
designated to distribute receipts from the licensing of
transmissions in accordance with subsection (f) may deduct from
any of its receipts, prior to the distribution of such
receipts, the reasonable costs identified in paragraph (3) of
such agent incurred after November 1, 1995, with respect to
such copyright owners and performers who have entered with such
agent a contractual relationship that specifies that such costs
may be deducted from such royalty receipts.''.
(c) Direct Payment to Artists.--Section 114(g)(2) of title 17,
United States Code, is amended to read as follows:
``(2) An agent designated to distribute receipts from the
licensing of transmissions in accordance with subsection (f)
shall distribute such receipts as follows:
``(A) 50 percent of the receipts shall be paid to
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.
``(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 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.
``(C) 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.
``(D) 45 percent of the receipts shall be paid, 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).''.
SEC. 6. REPORT TO CONGRESS.
By not later than June 1, 2004, the Comptroller General of the
United States, in consultation with the Register of Copyrights, shall
conduct and submit to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the Senate a
study concerning the economic arrangements among small commercial
webcasters covered by agreements entered into pursuant to section
114(f)(5)(A) of title 17, United States Code, as added by section 4 of
this Act, and third parties, and the effect of those arrangements on
royalty fees payable on a percentage of revenue or expense basis.
Attest:
Secretary.
107th CONGRESS
2d Session
H. R. 5469
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AMENDMENT