[Congressional Record Volume 153, Number 77 (Thursday, May 10, 2007)]
[Senate]
[Pages S5931-S5932]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself and Mr. Brownback):
  S. 1353. A bill to nullify the determinations of the Copyright 
Royalty Judges with respect to webcasting, to modify the basis for 
making such a determination, and for other purposes; to the Committee 
on the Judiciary.
  Mr. WYDEN. Mr. President, today, I come back to the floor to 
introduce legislation to keep the Internet free of discrimination. For 
over a decade, people have tried to get their grubby hands all over the 
Internet and I have sprung into action to stop them. I have fought hard 
to prevent discrimination in the taxation of Internet commerce. I have 
fought hard to prevent discrimination on the content and applications 
layer of the Internet. Now, I am back here one more time, to prevent 
discriminatory treatment against Internet radio companies and consumers 
of their product in how copyright royalties are collected.
  Make no bones about it, the recent decision on copyright royalty fees 
by the Copyright Royalty Board is discrimination. The fees that 
webcasters will have to pay will discriminate in favor of traditional 
radio broadcasting and satellite radio broadcasting, which pay a much 
lower percentage of their revenues in royalties.
  The decision of the Copyright Royalty Board would increase royalties 
on webcasters to levels between 300 and 1200 percent of their current 
royalty fees. For most webcasters, the royalties will exceed their 
gross revenues. There are not many people who are going to stay in 
business long when their costs exceed their revenues. This is certainly 
the case for webcasters. That is why I am introducing the Internet 
Radio Equality Act today.
  The Bipartisan Internet Radio Equality Act, that I am introducing 
today with my friend from Kansas, Senator Brownback, will prevent this 
discrimination. It does so by invalidating the decision of the 
Copyright Royalty Board and instead puts Internet radio on par with 
Satellite Radio, jukeboxes, and cable radio. Additionally, it has 
special protections in place for noncommercial webcasters, like 
National Public Radio and college radio, to ensure that they can take 
advantage of webcasting as well.
  Unfortunately, time is of the essence in saving Internet radio. On 
July 15, if Congress does not intervene, collection of these new 
royalty fees will begin. It is no coincidence that on the same day, if 
Congress does not intervene, that hundreds of thousands of Internet 
radio stations will be turned off for good. It is imperative that we 
act within the next 2 months to prevent this from happening.
  I want to thank my friend from Kansas, Senator Brownback, for joining 
me in introducing this important legislation. I look forward to working 
with him and Congressman Inslee, my friend from Washington, who has 
introduced companion legislation in the House, to get the job done.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1353

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Internet Radio Equality Act 
     of 2007''.

     SEC. 2. NULLIFICATION OF DECISION OF COPYRIGHT ROYALTY 
                   JUDGES.

       The March 2, 2007, Determination of Rates and Terms of the 
     United States Copyright Royalty Judges regarding rates and 
     terms for the digital performance of sound recordings and 
     ephemeral recordings, including that determination as 
     modified by the April 17, 2007, Order Denying Motions for 
     Rehearing and any subsequent modification to that 
     determination by the Copyright Royalty Judges that is 
     published in the Federal Register and the April 23, 2007, 
     Final Determination of Rates and Terms of the United States 
     Copyright Royalty Judges regarding rates and terms for the 
     digital performance of sound recordings and ephemeral 
     recordings and any subsequent modification to that 
     determination by the Copyright Royalty Judges that is 
     published in the Federal Register, are not effective, and 
     shall be deemed never to have been effective.

     SEC. 3. COMPUTATION OF ROYALTY FEES FOR COMMERCIAL INTERNET 
                   RADIO SERVICES OFFERING DIGITAL PERFORMANCES OF 
                   SOUND RECORDINGS.

       (a) Standard for Determining Rates and Terms.--Section 
     114(f)(2)(B) of title 17, United States Code, is amended by 
     striking ``Such rates and terms shall distinguish'' and all 
     that follows through the end of clause (ii) and inserting the 
     following: ``The Copyright Royalty Judges shall establish 
     rates and terms in accordance with the objectives set forth 
     in section 801(b)(1). Such rates and terms may include a 
     minimum annual royalty of not more than $500 for each 
     provider of services that are subject to such rates and 
     terms, which shall be the only minimum royalty fee and shall 
     be assessed only once annually to that provider.''.
       (b) Transition Rule.--Except for services covered by 
     section 118 of title 17, United States Code, each provider of 
     digital audio transmissions that otherwise would have been 
     subject to the rates and terms of the determination of the 
     Copyright Royalty Judges made ineffective by section 2 of 
     this Act shall instead pay royalties for each year of the 5-
     year period beginning on January 1, 2006, at 1 of the 
     following rates, as selected by the provider for that year:
       (1) 0.33 cents per hour of sound recordings transmitted to 
     a single listener.
       (2) 7.5 percent of the revenues received by the provider 
     during that year that are directly related to the provider's 
     digital transmissions of sound recordings.

     SEC. 4. COMPUTATION OF ROYALTY FEES FOR NONCOMMERCIAL 
                   STATIONS OFFERING DIGITAL PERFORMANCES OF SOUND 
                   RECORDINGS.

       (a) Amendments to Section 118 of Title 17, United States 
     Code.--Section 118 of title 17, United States Code, is 
     amended--
       (1) in subsection (b), in the matter preceding paragraph 
     (1), by striking ``and published pictorial'' and inserting 
     ``, sound recordings, and published pictorial'';
       (2) in subsection (c)--
       (A) in the matter preceding paragraph (1), by striking 
     ``and published pictorial'' and inserting ``, sound 
     recordings, and published pictorial''; and
       (B) in paragraph (1), by inserting ``or nonprofit 
     institution or organization'' after ``broadcast station''; 
     and
       (3) in subsection (f), by striking ``paragraph (2)'' and 
     inserting ``paragraph (1) or (2)''.
       (b) Transition Rules.--
       (1) In general.--Except as provided under paragraph (2), 
     for each calendar year (or portion thereof) beginning after 
     December 31, 2004, until an applicable voluntary license 
     agreement is filed with the Copyright Royalty Judges under 
     section 118 of title 17, United States Code (as amended by 
     subsection (a) of this section), or an applicable 
     determination is issued by the Copyright Royalty Judges under 
     section 118 of such title (as so amended) --
       (A) except as provided under subparagraphs (B) and (C), the 
     annual royalty that a public

[[Page S5932]]

     broadcast entity shall pay to owners of copyrights in sound 
     recordings for the uses provided under section 118(c) of such 
     title (as so amended) shall be an amount equal to 1.05 times 
     the amount paid by that entity (or in the case of a group of 
     related entities, the fees paid by such group) under section 
     114(f)(2) of title 17, United States Code, for such uses 
     during the calendar year ending December 31, 2004;
       (B) the annual royalty that a public broadcasting entity 
     that is a noncommercial webcaster and did not owe royalties 
     under section 114(f)(2) of title 17, United States Code, 
     during the calendar year ending December 31, 2004, shall pay 
     to owners of copyrights in sound recordings for the uses 
     provided under section 118(c) of such title (as so amended) 
     shall be the amount that would have been owed under the 
     agreement entered into under section 114(f)(5) of that title 
     for such uses applicable to noncommercial webcasters as in 
     effect during calendar year 2004; and
       (C) the annual royalty that public broadcasting entities 
     constituting National Public Radio, Inc., its member stations 
     and public radio stations qualified to receive funding from 
     the Corporation for Public Broadcasting, shall collectively 
     pay to owners of copyrights in sound recordings for the uses 
     provided under section 118(c) of such title (as so amended) 
     shall be an amount equal to 1.05 times the amount paid on the 
     behalf of these entities under section 114(f)(2) of title 17, 
     United States Code, for such uses during the calendar year 
     ending December 31, 2004.
       (2) Limitation.--No entity shall be required under 
     paragraph (1)(A) or (B) to pay more than $5,000 for any 
     calendar year.

     SEC. 5. CREDIT OF ROYALTY FEES.

       Any royalties received under the March 2, 2007, 
     Determination of Rates and Terms of the United States 
     Copyright Royalty Judges regarding rates and terms for the 
     digital performance of sound recordings and ephemeral 
     recordings, including that determination as modified by the 
     April 17, 2007, Order Denying Motions for Rehearing and any 
     subsequent modification to that determination by the 
     Copyright Royalty Judges that is published in the Federal 
     Register and the April 23, 2007, Final Determination of Rates 
     and Terms of the United States Copyright Royalty Judges 
     regarding rates and terms for the digital performance of 
     sound recordings and ephemeral recordings and any subsequent 
     modification to that determination by the Copyright Royalty 
     Judges that is published in the Federal Register shall be 
     credited against royalties required to be paid under section 
     3 or 4 of this Act.
                                 ______