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.

Summary: Internet Radio Equality Act of 2007 - Declares to be ineffective: (1) the March 2, 2007, Determination of Rates and Terms of the U.S. Copyright Royalty Judges regarding rates and terms for the digital performance of sound recordings and ephemeral recordings; (2) the April 17, 2007, modification of that determination by an order denying motions for rehearing; and (3) the April 23, 2007, Final Determination of Rates and Terms and any subsequent modification by the Copyright Royalty Judges published in the Federal Register.

Replaces standards for determining reasonable rates and terms of royalty payments for public performances of sound recordings by means of eligible nonsubscription transmission services and new subscription services with a requirement that such rates and terms be established in accordance with stated objectives of the Copyright Royalty Judges. (Currently, rates and terms are required to distinguish among different types of eligible nonsubscription transmission services and include a minimum fee for each type.) Allows a minimum annual royalty for each provider subject to such rates and terms. Provides a transition rule for payment of royalties by providers of digital audio transmissions that would have been subject to the rates and terms nullified by this Act.

Revises royalty payment provisions concerning the use of certain works in noncommercial broadcasting to include: (1) sound recordings; and (2) performance or display by nonprofit organizations and public broadcasting entities. Provides a transition rule for the payment by a public broadcasting entity to owners of copyrights in sound recordings.

Allows a credit of any royalties received under the Determination of Rates and Terms deemed ineffective by this Act against other royalties required to be paid under this Act.

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 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.