[Congressional Record Volume 155, Number 22 (Wednesday, February 4, 2009)]
[Senate]
[Pages S1544-S1546]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself, Mr. Hatch, Mrs. Feinstein, Mr. Corker, 
        and Mrs. Boxer):
  S. 379. A bill to provide fair compensation to artists for use of 
their sound recordings; to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, today, Senator Hatch and I renew our 
bipartisan effort to improve and modernize our intellectual property 
laws. We are reintroducing the Performance Rights Act to ensure artists 
are compensated fairly when their works are used. I am pleased that 
performance rights legislation will be introduced in the House today, 
as well.
  When radio stations broadcast music, listeners are enjoying the 
intellectual property of two creative artists--the songwriter and the 
performer. The success, and the artistic quality, of any recorded song 
depends on both. Radio stations pay songwriters for a license to 
broadcast the music they have composed. The songwriters' work is 
promoted by the air play, but no one seriously questions that the 
songwriter

[[Page S1545]]

should be paid for the use of his or her work. The performing artist, 
however, is not paid by the radio station.
  The time has come to end this inequity. Its historical justification 
has been overtaken by technological change. In the digital world, we 
enjoy music transmitted over a variety of platforms. When webcasters, 
satellite radio companies, or cable companies play music, and profit 
from its use, they compensate the performing artists. Terrestrial 
broadcast radio is the only platform that still does not pay for the 
use of sound recordings.
  Radio play surely has promotional value to the artists, but there is 
a property right in the sound recording, and those that create the 
content should be compensated for their work. The United States is 
behind the times in this regard. Ours is the only Nation that is a 
member of the Organization for Economic Cooperation and Development but 
still does not compensate artists. An unfortunate result of the lack of 
a performance rights in the United States is that American artists are 
not compensated when their recordings are played abroad.
  Artists should have the same rights regardless of the platform over 
which their work is used. All platforms promote artists and all 
platforms profit off the artists' work. Today, different rate standards 
and restrictions are applied to different music delivery platforms, 
with broadcast radio stations being uniquely and completely exempt. In 
the last Congress, Senator Feinstein chaired a hearing in the Judiciary 
Committee that addressed whether the time has come to achieve platform 
parity by harmonizing the terms and conditions for use of the statutory 
copyright license. Senator Feinstein has been a leader on this issue, 
and I am pleased to accept her offer to lead negotiations this year to 
develop a new standard that can be applied across platforms.
  We also need to make certain that songwriters are protected in this 
process. Songwriters currently do receive compensation from radio 
stations. The changes made by this legislation, which will ensure 
performing artists are compensated, should not have any negative effect 
on songwriters. I will work closely with the songwriters and we will 
make sure that is the case.
  In introducing the Performance Rights Act today, we are sensitive to 
the needs of broadcast radio stations; we are sensitive to the 
regulatory regime under which they operate; and we are particularly 
sensitive to the fact that it is not just artists, but also 
broadcasters that are facing a difficult economic climate. Rather than 
require all radio stations to pay fair market value to artists for the 
songs they play, the legislation includes special provisions for 
noncommercial and all but the largest commercial stations. In addition, 
every radio station can use a statutory copyright license to transmit 
sound recordings, instead of negotiating licenses separately in the 
marketplace.
  Noncommercial stations have a different mission than do commercial 
stations and they require a different status. Our legislation, 
appropriately, permits noncommercial stations to take advantage of the 
statutory copyright license subject only to a nominal annual payment to 
the artists.
  Similarly, we intend to nurture, not threaten, small commercial 
broadcasters. Smaller music stations are working hard to serve their 
local communities while finding the right formula to increase their 
audience size. We intend to foster the growth of these stations--nearly 
85 percent of the radio stations in Vermont--and the legislation does 
that by also providing a flat fee option for use of the statutory 
license to the more than 75 percent of commercial music stations 
earning less than $1.25 million a year. This payment may only provide 
minimal compensation to the artists whose music is used by the vast 
majority of commercial music stations, particularly when viewed against 
the fair market value of the music, but by helping radio stations grow, 
artists, the stations, and the public will all benefit.
  I am an avid music fan and much of the music I enjoy I first heard on 
the radio. There is no question that radio play promotes artists and 
their sound recordings; there is also no doubt that radio stations 
profit directly from playing the artists' recordings.
  Traditional, over-the-air radio remains vital to the vibrancy of our 
music culture, and I want to continue to see it prosper as it 
transitions to digital. But I also want to ensure that the performing 
artist, the one whose sound recordings drive the success of broadcast 
radio, is compensated fairly. I will continue to work with the 
broadcasters--large and small, commercial and noncommercial--to strike 
the right balance.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bil was ordered to be 
printed in the Record, as follows:

                                 S. 379

       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 ``Performance Rights Act''.

     SEC. 2. EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS.

       (a) Performance Right Applicable to Radio Transmissions 
     Generally.--Section 106(6) of title 17, United States Code, 
     is amended to read as follows:
       ``(6) in the case of sound recordings, to perform the 
     copyrighted work publicly by means of an audio 
     transmission.''.
       (b) Inclusion of Terrestrial Broadcasts in Existing 
     Performance Right.--Section 114(d)(1) of title 17, United 
     States Code, is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``a digital'' and inserting ``an''; and
       (2) by striking subparagraph (A).
       (c) Inclusion of Terrestrial Broadcasts in Existing 
     Statutory License System.--Section 114(j)(6) of title 17, 
     United States Code, is amended by striking ``digital''.
       (d) Eliminating Regulatory Burdens for Terrestrial 
     Broadcast Stations.--Section 114(d)(2) of title 17, United 
     States Code, is amended in the matter preceding subparagraph 
     (A) by striking ``subsection (f) if'' and inserting 
     ``subsection (f) if, other than for a nonsubscription and 
     noninteractive broadcast transmission,''.

     SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, 
                   EDUCATIONAL, AND RELIGIOUS STATIONS AND CERTAIN 
                   USES.

       (a) Small, Noncommercial, Educational, and Religious Radio 
     Stations.--
       (1) In general.--Section 114(f)(2) of title 17, United 
     States Code, is amended by adding at the end the following:
       ``(D) Notwithstanding the provisions of subparagraphs (A) 
     through (C), each individual terrestrial broadcast station 
     that has gross revenues in any calendar year of less than 
     $1,250,000 may elect to pay for its over-the-air 
     nonsubscription broadcast transmissions a royalty fee of 
     $5,000 per year, in lieu of the amount such station would 
     otherwise be required to pay under this paragraph. Such 
     royalty fee shall not be taken into account in determining 
     royalty rates in a proceeding under chapter 8, or in any 
     other administrative, judicial, or other Federal Government 
     proceeding.
       ``(E) Notwithstanding the provisions of subparagraphs (A) 
     through (C), each individual terrestrial broadcast station 
     that is a public broadcasting entity as defined in section 
     118(f) may elect to pay for its over-the-air nonsubscription 
     broadcast transmissions a royalty fee of $1,000 per year, in 
     lieu of the amount such station would otherwise be required 
     to pay under this paragraph. Such royalty fee shall not be 
     taken into account in determining royalty rates in a 
     proceeding under chapter 8, or in any other administrative, 
     judicial, or other Federal Government proceeding.''.
       (2) Payment date.--A payment under subparagraph (D) or (E) 
     of section 114(f)(2) of title 17, United States Code, as 
     added by paragraph (1), shall not be due until the due date 
     of the first royalty payments for nonsubscription broadcast 
     transmissions that are determined, after the date of the 
     enactment of this Act, under such section 114(f)(2) by reason 
     of the amendment made by section 2(b)(2) of this Act.
       (b) Transmission of Religious Services; Incidental Uses of 
     Music.--Section 114(d)(1) of title 17, United States Code, as 
     amended by section 2(b), is further amended by inserting the 
     following before subparagraph (B):
       ``(A) an eligible nonsubscription transmission of--
       ``(i) services at a place of worship or other religious 
     assembly; and
       ``(ii) an incidental use of a musical sound recording;''.

     SEC. 4. AVAILABILITY OF PER PROGRAM LICENSE.

       Section 114(f)(2)(B) of title 17, United States Code, is 
     amended by inserting after the second sentence the following 
     new sentence: ``Such rates and terms shall include a per 
     program license option for terrestrial broadcast stations 
     that make limited feature uses of sound recordings.''.

     SEC. 5. NO HARMFUL EFFECTS ON SONGWRITERS.

       (a) Preservation of Royalties on Underlying Works.--Section 
     114(i) of title 17, United States Code, is amended in the 
     second sentence by striking ``It is the intent of Congress 
     that royalties'' and inserting ``Royalties''.

[[Page S1546]]

       (b) Public Performance Rights and Royalties.--Nothing in 
     this Act shall adversely affect in any respect the public 
     performance rights of or royalties payable to songwriters or 
     copyright owners of musical works.

  Mr. HATCH. Mr. President, I rise today to express my support for the 
Performance Rights Act, S. 379, introduced today by Senate Judiciary 
Committee chairman, Patrick Leahy, and myself. It is time to amend 
copyright law to establish performance rights on sound recordings. I 
believe that artists should be compensated for their work. This is an 
issue of fairness and equity.
  I agree with the position of the Department of Commerce Working Group 
on Intellectual Property Rights: the lack of a performance right in 
sound recordings is ``an historical anomaly that does not have a strong 
policy justification--and certainly not a legal one.''
  This legislation would ensure that musical performers and songwriters 
receive fair compensation from all companies across the broadcast 
spectrum, not just from Web casters, satellite radio providers, and 
cable companies. The proposed legislation attempts to strike a 
harmonious balance between fair compensation for artists and a vibrant 
radio industry in the U.S.
  By amending sections 106 and 114 of the Copyright Act, the 
Performance Rights Act would apply the performance right in a sound 
recording to all audio transmissions thereby removing the exemption on 
paying performance royalties currently in place for over-the-air 
broadcasters.
  The legislation also provides for a blanket license of $5,000 for 
small commercial broadcasters whose gross revenues do not exceed $1.25 
million a year. In addition, noncommercial broadcasters as defined by 
section 118 of the Copyright Act, such as public, educational and 
religious stations, would have a blanket license of $1,000 per year. No 
payment would be due until the Copyright Royalty Board determines the 
rates for large commercial broadcasters. The proposed language provides 
that sound recordings used only incidentally by a broadcaster and sound 
recordings used in the transmission of a religious service are exempt.
  Finally, the legislation strengthens the provision in section 114 
that preserves the rights of songwriters and clarifies that nothing in 
the Performance Rights Act shall adversely affect the public 
performance rights of songwriters or copyright owners of musical works.
  Let me repeat, this provision is to ensure that songwriters are not 
adversely affected by enactment of this bill. I understand the concerns 
of the songwriting community and the difficultly some have in recouping 
royalties on infringed works. We must ensure that our songwriters are 
not placed in situations where their property rights are ignored by 
infringers. Chairman Leahy agrees that additional work to address the 
issue of willful infringement is necessary before enactment, and I look 
forward to working with him.
  I want the broadcasting community to know that I am committed to 
working with them throughout the legislative process. I continue to 
have an open-door policy and welcome a productive dialogue on this 
issue. There is no question that radio play promotes artists and their 
sound recordings. There is also no question that radio stations profit 
directly from playing the artists' recordings. Indeed, we must strike a 
fair balance, one that fosters a vibrant broadcast radio community and 
compensates artists for their work.
                                 ______