99–006 

111TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 111–680 

PERFORMANCE RIGHTS ACT 

DECEMBER 14, 2010.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 848] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 848) to provide parity in radio performance rights under title 

17, United States Code, and for other purposes, having considered 

the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 6 

Background and Need for the Legislation ............................................................. 6 

Hearings ................................................................................................................... 9 

Committee Consideration ........................................................................................ 9 

Committee Votes ...................................................................................................... 9 

Committee Oversight Findings ............................................................................... 11 

New Budget Authority and Tax Expenditures ...................................................... 11 

Congressional Budget Office Cost Estimate .......................................................... 11 

Performance Goals and Objectives ......................................................................... 14 

Constitutional Authority Statement ...................................................................... 14 

Advisory on Earmarks ............................................................................................. 14 

Section-by-Section Analysis .................................................................................... 14 

Changes in Existing Law Made by the Bill, as Reported ..................................... 16 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 


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SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Performance Rights Act’’. 

SEC. 2. ESTABLISHING EQUITABLE TREATMENT FOR TERRESTRIAL, CABLE, SATELLITE, AND 

INTERNET SERVICES. 

(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) ENSURING PLATFORM PARITY.—Section 114(f) of title 17, United States Code, 

is amended— 

(1) by striking paragraph (1); 

(2) by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), 

(3), and (4), respectively; and 

(3) in paragraph (1), as redesignated— 

(A) in subparagraph (A), by striking ‘‘under chapter 8’’ and all that follows through the end of the third sentence and inserting ‘‘under chapter 8 

shall determine reasonable rates and terms of royalty payments for transmissions subject to statutory licensing under subsection (d)(2) during 5-year 

periods beginning on January 1 of the second year following the year in 

which the proceedings are to be commenced, except in the case of a different transitional period provided under section 6(b)(3) of the Copyright 

Royalty and Distribution Reform Act of 2004, or such other period as the 

parties may agree.’’; 

(B) in subparagraph (B)— 

(i) in the second sentence, by striking ‘‘eligible nonsubscription 

transmission’’; and 

(ii) in the third sentence, by striking ‘‘eligible nonsubscription services and new subscription’’ and all that follows through ‘‘subparagraph 

(A)’’ and inserting ‘‘services, in addition to the objectives set forth in 

subparagraphs (A), (B), and (C) of section 801(b)(1), the Copyright Royalty Judges may consider the rates and terms for comparable types of 

services and comparable circumstances under voluntary license agreements. Notwithstanding section 801(b)(1), the provisions of section 

801(b)(1)(D) shall not be taken into account by the Copyright Royalty 

Judges in any proceeding under this section’’; 

(C) by striking subparagraph (C) and inserting the following: 

‘‘(C) The procedures under subparagraphs (A) and (B) shall also be initiated pursuant to a petition filed by any copyright owner of sound recordings or any transmitting entity indicating that a new type of service on 

which sound recordings are performed is or is about to become operational, 

for the purpose of determining reasonable terms and rates of royalty payments with respect to such new type of service for the period beginning 

with the inception of such new type of service and ending on the date on 

which the royalty rates and terms for preexisting services most recently determined under subparagraph (A) or (B) and chapter 8 expire, or such other 

period as the parties may agree.’’. 

(e) TECHNICAL AND CONFORMING AMENDMENTS.— (1) SECTION 114(F).—Section 114(f) of title 17, United States Code (as 

amended by subsection (d)), is further amended— 

(A) in paragraph (1)(B), in the first sentence, by striking ‘‘paragraph 

(3)’’ and inserting ‘‘paragraph (2)’’; and 

(B) in paragraph (4)(C), by striking ‘‘under paragraph (4)’’ and inserting 

‘‘under paragraph (3)’’. 

(2) SECTION 114(J).—Section 114(j)(6) of title 17, United States Code, is 

amended by striking ‘‘retransmissions of broadcast transmissions’’ and inserting 

‘‘broadcast transmissions and retransmissions of broadcast transmissions’’. 

(3) SECTION 804.—Section 804(b)(3)(C) of title 17, United States Code, is 

amended— 

(A) in clause (i), by striking ‘‘and 114(f)(2)(C)’’; 

(B) in clause (iii)(II), by striking ‘‘114(f)(4)(B)(ii)’’ and inserting 

‘‘114(f)(3)(B)(ii)’’; and 


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(C) in clause (iv), by striking ‘‘or 114(f)(2)(C), as the case may be’’. 

SEC. 3. TREATMENT FOR MINORITY, FEMALE, RELIGIOUS, RURAL, SMALL, NONCOMMERCIAL, 

PUBLIC, EDUCATIONAL, AND COMMUNITY STATIONS AND CERTAIN USES. 

(a) MINORITY, FEMALE, RELIGIOUS, RURAL, SMALL, NONCOMMERCIAL, PUBLIC, 

EDUCATIONAL, AND COMMUNITY RADIO STATIONS.— 

(1) IN GENERAL.—Section 114(f)(1) of title 17, United States Code, as redesignated by section 2(d), is amended by adding at the end the following: 

‘‘(D)(i) Notwithstanding the provisions of subparagraphs (A) through 

(C), each individual terrestrial broadcast station that has gross revenues 

within a range specified in clause (ii) may elect to pay for its over-the-air 

nonsubscription broadcast transmissions a royalty fee as provided in clause 

(ii), 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. 

‘‘(ii) As provided in clause (i), each individual terrestrial broadcast station that has gross revenues in any calendar year of— 

‘‘(I) less than $100,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $500 per year; 

‘‘(II) at least $100,000 but less than $500,000 may elect to pay for 

its over-the-air nonsubscription broadcast transmissions a royalty fee of 

$2,500 per year; and 

‘‘(III) at least $500,000 but 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. 

‘‘(E)(i) 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) and that has gross revenues within a range specified in clause (ii) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee as provided in clause (ii), 

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. 

‘‘(ii) As provided in clause (i), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) and has 

gross receipts in any calendar year of— 

‘‘(I) less than $100,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $500 per year; and 

‘‘(II) $100,000 or more may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year. 

‘‘(F) Notwithstanding the provisions of subparagraphs (A) through (E), 

each individual terrestrial broadcast station that had total gross revenues 

during the 4 full calendar quarters immediately preceding the date of enactment of the Performance Rights Act of— 

‘‘(i) less than $5,000,000 shall not be required to pay a royalty 

under this paragraph during the 3 years immediately following the 

date of enactment of the Performance Rights Act; and 

‘‘(ii) $5,000,000 or more shall not be required to pay a royalty 

under this paragraph during the 1 year immediately following the date 

of enactment of the Performance Rights Act. 

The provisions of this subparagraph 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)(1) 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;’’. 


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SEC. 4. AVAILABILITY OF PER PROGRAM LICENSE. 

Section 114(f)(1)(B) of title 17, United States Code, as redesignated by section 

2(d), 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) NO ADVERSE AFFECT ON LICENSE FEES FOR UNDERLYING MUSICAL WORKS; 

NECESSITY FOR OTHER LICENSES.— (1) IN GENERAL.—Section 114(i) of title 17, United States Code, is amended 

to read as follows: 

‘‘(i) NO ADVERSE AFFECT ON LICENSE FEES FOR UNDERLYING MUSICAL WORKS; 

NECESSITY FOR OTHER LICENSES.— ‘‘(1) NO ADVERSE AFFECT ON LICENSE FEES FOR UNDERLYING MUSICAL

WORKS.—License fees payable for the public performance of sound recordings 

under section 106(6) shall not be cited, taken into account, or otherwise used 

in any administrative, judicial, or other governmental forum or proceeding, or 

otherwise, to set or adjust the license fees payable to copyright owners of musical works or their representatives for the public performance of their works, for 

the purpose of reducing or adversely affecting such license fees. License fees 

payable to copyright owners for the public performance of their musical works 

shall not be reduced or adversely affected in any respect as a result of the rights 

granted by section 106(6). 

‘‘(2) NECESSITY FOR OTHER LICENSES.—Notwithstanding the grant by an 

owner of copyright in a sound recording of an exclusive or nonexclusive license 

of the right under section 106(6) to perform the work publicly, a licensee of that 

sound recording may not publicly perform such sound recording unless a license 

has been granted for the public performance of any copyrighted musical work 

contained in the sound recording. 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.’’. 

(2) CONFORMING AMENDMENT.—Section 114(d)(3)(C) of title 17, United 

States Code, is hereby repealed. 

(b) PUBLIC PERFORMANCE RIGHTS AND ROYALTIES.—Nothing in this Act or the 

amendments made by this Act shall adversely affect in any respect the public performance rights of or royalties payable to songwriters or copyright owners of musical 

works. 

(c) PRESERVATION OF ROYALTIES ON UNDERLYING WORKS PUBLICLY PERFORMED

BY TERRESTRIAL BROADCAST STATIONS.—Section 114(f) of title 17, United States 

Code, (as amended by section 2(d)) is further amended by adding at the end the following new paragraph: 

‘‘(5) Notwithstanding any other provision of this section, under no circumstances shall the rates established by the Copyright Royalty Judges for the 

public performance of sound recordings be cited, taken into account, or otherwise used in any administrative, judicial, or other governmental forum or proceeding, or otherwise, to reduce or adversely affect the license fees payable to 

copyright owners of musical works or their representatives for the public performance of their works by terrestrial broadcast stations, and such license fees 

for the public performance of musical works shall be independent of license fees 

paid for the public performance of sound recordings.’’. 

SEC. 6. PAYMENT OF CERTAIN ROYALTIES. 

Section 114(g) of title 17, United States Code, is amended— 

(1) by amending paragraph (1) to read as follows: 

‘‘(1) Except in the case of a transmission to which paragraph (5) applies or 

a transmission licensed under a statutory license in accordance with subsection 

(f) of this section, the following shall apply: 

‘‘(A) A featured recording artist who performs on a sound recording that 

has been licensed for public performance by means of an audio 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. 

‘‘(B)(i) In a case in which the copyright owner of a sound recording has 

licensed the sound recording for the public performance of the sound recording by means of an audio transmission, the copyright owner shall deposit 

1 percent of the receipts from the license with the American Federation of 

Musicians and American Federation of Television and Radio Artists Intellectual Property Rights Distribution Fund (or any successor entity) (in this 

subparagraph referred to as the ‘Fund’) to be distributed to nonfeatured 

performers who have performed on sound recordings. The sound recording 

copyright owner shall make such deposits for receipts received during the 


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first half of a calendar year by August 15 and for receipts received during 

the second half of a calendar year by February 15 of the following calendar 

year. 

‘‘(ii) A sound recording copyright owner shall include with deposits 

under clause (i) information regarding the amount of such deposits attributable to each licensee and, subject to obtaining consent, if necessary, from 

such licensee, for each sound recording performed by means of an audio 

transmission by such licensee during the applicable time period, and to the 

extent included in the accounting reports provided by the licensee to the 

sound recording copyright owner— 

‘‘(I) the identity of the artist; 

‘‘(II) the International Standard Recording Code of the sound recording; 

‘‘(III) the title of the sound recording; 

‘‘(IV) the number of times the sound recording was transmitted; 

and 

‘‘(V) the total amount of receipts collected from that licensee. 

‘‘(iii) The Fund shall make the distributions described in clause (i) as 

follows: 50 percent shall be paid to nonfeatured musicians (whether or not 

members of the American Federation of Musicians) and 50 percent shall be 

paid to nonfeatured vocalists (whether or not members of the American 

Federation of Television and Radio Artists). The Fund may, prior to making 

such distributions, deduct the reasonable costs related to making such distributions. 

‘‘(iv) The sound recording copyright owner shall not be required to provide any additional information to the Fund other than what is required 

under this subparagraph. Sound recording copyright owners shall use reasonable good faith efforts to include in all relevant licenses a requirement 

to report the information identified in subclauses (I) through (V) of clause 

(ii). Amounts required under clause (i) that are not paid by the date specified in such clause shall be subject to interest at the rate of 6 percent per 

annum for each day of nonpayment after the date the payment was due.’’; 

(2) in paragraph (2)(A), by striking ‘‘digital’’; and 

(3) by adding at the end the following new paragraph: 

‘‘(5) Notwithstanding paragraph (1), to the extent that a license granted by 

the copyright owner of a sound recording to a terrestrial broadcast station extends to such station’s nonsubscription broadcast transmissions otherwise licensable under a statutory license in accordance with subsection (f), the station 

shall pay to the agent designated to distribute statutory licensing receipts from 

the licensing of transmissions in accordance with subsection (f), 50 percent of 

the total royalties that the station is required to pay for such transmissions 

under the applicable license agreement. That agent shall distribute such payments in proportion to the distributions provided in subparagraphs (B) through 

(D) of paragraph (2), and such payments shall be the sole payments to which 

featured and nonfeatured artists are entitled by virtue of such transmissions 

under the direct license with that station.’’. 

SEC. 7. NO EFFECT ON LOCAL COMMUNITIES. 

Section 114(f) of title 17, United States Code, (as amended by section 5(c)) is 

further amended by adding at the end the following new paragraph: 

‘‘(6) Neither this subsection nor the payment of royalties by broadcasters 

hereunder shall affect in any respect the public interest obligations of a broadcaster to its local community under part 73 of title 47 of the Code of Federal 

Regulations.’’. 

SEC. 8. PRESERVATION OF DIVERSITY. 

Section 114(f) of title 17, United States Code, (as amended by section 7) is further amended by adding at the end the following new paragraph: 

‘‘(7) PRESERVATION OF DIVERSITY.—The Copyright Royalty Judges shall, in 

making determinations or adjustments of rates and terms of copyright royalty 

payments for public performances of sound recordings, consider evidence on the 

effect of such rates and terms on— 

‘‘(A) religious, minority-owned, female-owned, small, and noncommercial broadcasters; 

‘‘(B) non-music programming, including local news and information programming for stations that are part of station groups in which all stations 

within the group are located in one designated market area (as such term 

is defined in section 122(j)(2)(C)); and 

‘‘(C) religious, minority or minority-owned, and female or female-owned 

royalty recipients.’’. 


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1 ‘‘Sound recordings’’ are works that result from the fixation of a series of musical, spoken, 

or other sounds, but not including the sounds accompanying a motion picture or other audiovisual work, regardless of the nature of the material objects, such as disks, tapes, or other 

phonorecords, in which they are embodied. 17 U.S.C. § 101. 2 U.S. Const. art I, § 8, cl. 8. 

3 17 U.S.C. § 101. 

4 ‘‘To perform or display a work ‘publicly’ means—(1) to perform or display it at a place open 

to the public or at any place where a substantial number of persons outside of a normal circle 

of a family and its social acquaintances is gathered; or (2) to transmit or otherwise communicate 

a performance or display of the work to a place specified by clause (1) or to the public, by means 

of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at 

different times.’’ 17 U.S.C. § 101. 

PURPOSE AND SUMMARY

H.R. 848, the ‘‘Performance Rights Act,’’ extends the scope of 

public performance rights to terrestrial broadcast performances. 

Under current law, owners of underlying ‘‘musical works’’ (i.e., the 

lyrics and musical notations), who in most cases include the songwriter or music publisher, are entitled to receive royalties from 

statutory licenses for the public performance of their works in terrestrial radio broadcasts. However, the copyright owners of sound 

recordings 1 and the artists featured in sound recordings do not 

have a comparable right to royalties for the public performance of 

their works in terrestrial radio broadcasts. This is in contrast to 

certain digital broadcast performances of songs, including cable, 

satellite, or webcasts—where the songwriters, performing artists, 

and copyright holders of sound recordings are all typically entitled 

to public performance royalties. H.R. 848 grants performers the 

right to receive compensation from terrestrial radio, and contains 

significant protections for the broadcast radio industry, including a 

scale-based fee system for radio stations with gross annual revenues of less than $1.25 million, a one-to-three-year-delay of the 

bill’s implementation as to smaller and noncommercial broadcasters, and a requirement that, in making any royalty determinations, the Copyright Royalty Judges consider the effect on minority 

and religious broadcasters and religious and minority royalty recipients. 

BACKGROUND AND NEED FOR THE LEGISLATION

I. BACKGROUND

A. History of Public Performance Rights 

Article I, section 8, clause 8 of the Constitution grants Congress 

the power ‘‘[t]o promote the progress of science and useful arts, by 

securing for limited times to authors and inventors the exclusive 

right to their respective writings and discoveries.’’ 2 Congress first 

established copyright protection in sound recordings in 1971, when 

it granted the holders of such copyrights the right to control the 

reproduction, distribution, and adaptation of their works. The 

Copyright Act defines ‘‘sound recordings’’ as ‘‘works that result 

from the fixation of a series of musical, spoken, or other sounds 

. . . regardless of the nature of the material objects . . . in which 

they are embodied.’’ 3 Congress did not grant copyright holders the 

right to control the public performance of their sound recordings, 

since it believed that possession of the three aforementioned rights 

would adequately compensate sound recording copyright holders.4


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5 Register of Copyrights, Report on Performance Right in Sound Recordings, H.R. Doc. No. 15, 

95th Cong. (2d Sess. 1978). 6S. Rep. No. 104–128 (1995). 

7S. Rep. No. 104–128 (1995). 

8 109 Stat. 336, Pub. L. No. 104–39 (Nov. 1, 1995). 

9 A digital audio transmission is a ‘‘transmission in whole or in part in a digital or other nonanalog format.’’ 17 U.S.C. § 101. 10 17 U.S.C. § 114(d)(1). 

Controversy has always existed over whether the ‘‘bundle of 

rights’’ to a sound recording should include the right to control its 

public performance. In a 1978 report mandated by the 1976 amendments to the Copyright Act, the Register of Copyrights recommended that Congress add a sound recording performance right. 

The Register predicted that new ‘‘technological developments could 

well cause substantial changes in existing systems for public delivery of sound recordings . . . [and] [i]n that event, it [would be] . . . 

possible that a performance right would become the major source 

of income from, and incentive to, the creation of such works.’’ 5

B. Internet Developments and the 1995 Solution 

As the Register predicted, with the advent of significant technological advancements, including ‘‘[s]atellite and digital technologies 

[that made] possible the celestial jukebox, music on demand, and 

pay-per-listen services’’ 6 on the Internet, came a potentially substantial new revenue stream. In particular, the growing popularity 

of Internet broadcasting (or ‘‘webcasting’’) created an environment 

where the public performance of copyrighted sound recordings became an important new source of both revenue and piracy. 

Congress was concerned that ‘‘in the absence of appropriate copyright protection in the digital environment . . . the creation of new 

sound recordings and musical works would be discouraged . . .’’ 7

In 1995, Congress responded by enacting the Digital Performance 

Right in Sound Recordings Act (DPRA),8 amending section 106 of 

the Copyright Act to provide an exclusive performance right for 

digital audio transmissions.9

SoundExchange was created to administer the digital performance right and revenue stream created by the DPRA. 

SoundExchange is a non-profit organization that collects and distributes performance royalties for musicians, record labels, and 

other copyright holders of sound recordings. SoundExchange is the 

sole administrative entity for subscription services’ statutory license fees. The Copyright Royalty Board, comprising three Copyright Royalty Judges, governs the setting of fair market rates for 

recordings. The Copyright Royalty Judges are responsible for determining and adjusting the rates and terms of statutory copyright licenses and determining the distribution of royalties. 

Significantly, the Digital Performance Right in Sound Recordings 

Act (DPRA) exempted ‘‘nonsubscription’’ transmissions and retransmissions of sound recordings such as television, radio, and business 

establishment broadcasts. The exemption was premised on the rationale that the public performance of sound recordings on television and radio benefits the owners of the sound recording by increasing record sales, and thus should not be compensable.10

For ‘‘subscription transmissions,’’ the DPRA created a statutory 

licensing scheme that mandated that the transmitter pay a royalty 


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11 ‘‘A ‘new subscription service’ is a service that performs sound recordings by means of noninteractive subscription digital audio transmissions and that is not a preexisting subscription 

service or a preexisting satellite digital audio radio service.’’ Subscribers pay for subscription 

services. 17 U.S.C. § 114(j)(8). 12 ‘‘An ‘interactive service’ is one that enables a member of the public to receive a transmission 

of a program specially created for the recipient, or on request, a transmission of a particular 

sound recording, whether or not as part of a program, which is selected by or on behalf of the 

recipient.’’ 17 U.S.C. § 114(j)(7). 13On October 31, 2007, a non-binding resolution, H. Con. Res. 244, was introduced opposing 

any legislation to repeal the terrestrial radio broadcast exemption. The resolution attracted 226 

cosponsors during the course of the 110th Congress. A similar resolution H. Con. Res 49, was 

introduced on February 12, 2009, during the 111th Congress. The resolution had attracted 143 

cosponsors as of March 10, 2009, the date of the Committee’s hearing in the current Congress. 

and comply with ‘‘other requirements.’’ 11 These ‘‘other requirements’’ include refraining from 1) playing too many songs by one 

artist in close proximity, 2) publishing a program schedule in advance, or 3) causing a listener’s receiver equipment to switch from 

one channel to another in order to listen to more than one song of 

a single artist in a row, and 4) providing copyright management information for the songs broadcast. 

For ‘‘interactive’’ transmissions, however, the Act did not include 

a statutory licensing mechanism, but instead required ‘‘interactive’’ 

transmission services to contract directly with the sound recording 

copyright owners, thus making licensing more difficult for these 

transmissions.12

C. Discussion Over the Intervening Years 

Over the intervening years, commentators have debated the benefits and drawbacks of extending the public performance right to 

all sound recordings. The primary beneficiaries of the absence of a 

full public performance right in sound recordings are terrestrial 

radio stations. These broadcasters strongly oppose the recognition 

of a public performance right for sound recordings on a number of 

grounds, which include the expense involved in directly compensating copyright owners of such works, as well as the perception 

that recording artists are adequately compensated indirectly 

through the ‘‘free’’ promotional value that airplay provides. Others 

maintain that a general public performance right will encourage 

those who make sound recordings to increase their production and 

justly benefit the artists and musicians featured on sound recordings. 

During the 109th Congress, Representatives Howard Berman 

and Mary Bono introduced H.R. 5361, the Platform Equality and 

Remedies for Rights Holders in Music Act of 2006, otherwise referred to as the PERFORM Act of 2006. The PERFORM Act sought 

to establish parity in the obligation to pay public performance royalties among all digital broadcasters, and required transmitting entities to employ reasonably available, technologically feasible, and 

economically reasonable measures to prevent the recording of such 

broadcasts. During the 110th Congress, the Subcommittee on 

Courts, the Internet and Intellectual Property continued to explore 

performance rights platform parity. On July 31, 2007, the Subcommittee held an oversight hearing entitled, ‘‘Ensuring Artists 

Fair Compensation: Updating the Performance Right and Platform 

Parity for the 21st Century.’’ 13

On December 18, 2007, H.R. 4789, the Performance Rights Act, 

was introduced by Representatives Berman, Darrell Issa, John 

Shadegg, Jane Harman, Marsha Blackburn, and Chairman John 


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Conyers. The Subcommittee on Courts, the Internet and Intellectual Property held a legislative hearing on the bill on June 11, 

2008, and reported the bill favorably by a voice vote at a markup 

on June 26, 2008. 

On February 4, 2009, H.R., 848, the ‘‘Performance Rights Act,’’ 

was introduced by Chairman Conyers and eighteen Members of 

Congress including the following members of the Judiciary Committee: Representatives Issa, Berman, Debbie Wasserman Schultz, 

Anthony Weiner, Steve Cohen, Jerrold Nadler, Robert Wexler, 

Hank Johnson of Georgia, Adam Schiff, Brad Sherman, Sheila 

Jackson Lee of Texas, and Linda Sa ́nchez. H.R. 848 is identical to 

the bill that the Courts Subcommittee had amended and reported 

favorably by voice vote to the full Judiciary Committee in 2008. 

The Judiciary Committee held a legislative hearing on H.R. 848 on 

March 10, 2009. 

The Committee’s hearings and discussions have highlighted the 

need for Congress to correct a glaring omission within the copyright law and establish a performance right for sound recordings 

for terrestrial broadcasts. In an effort to ensure that royalties established take into account possible effects on minority and religious broadcasters, a provision was added to H.R. 848 at markup 

to require that the Copyright Royalty Judges consider the effect 

that determinations and adjustments of copyright royalty payments 

rates for sound recordings would have on religious, minority-owned, 

female-owned, small, and noncommercial broadcasters. 

HEARINGS

The full Committee on the Judiciary held a hearing on March 10, 

2009, to examine the merits of the Performance Rights Act. Testimony was received from Billy Corgan, Vocalist and Lead Guitarist, 

The Smashing Pumpkins; Mitch Bainwol, Chairman and Chief Executive Officer, Recording Industry Artist Association (RIAA); Paul 

Almeida, President, Department for Professional Employees, AFLCIO; W. Lawrence Patrick, President, Patrick Communications; 

Stan Liebowitz, Ph.D., Ashbel Smith Distinguished Professor of 

Managerial Economics, University of Texas at Dallas; and Steve 

Newberry, Chairman of the Radio Board, National Association of 

Broadcasters (NAB). 

COMMITTEE CONSIDERATION

On May 13, 2009, the Committee met in open session to mark 

up H.R. 848, and ordered the bill, as amended, favorably reported 

by a rollcall vote of 21 to 9, a quorum being present. 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of 

H.R. 848. 

1. An amendment offered by Mr. Lungren to instruct the Government Accountability Office (GAO) to conduct a study within 6 

months to determine the impact of the proposed legislation on local 

communities, on radio broadcasters and their stations, and on artists in the recording industry. Defeated 10 to 20. 


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10 

ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman ....................................................................................................... X 

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Delahunt ..................................................................................................... X 

Mr. Wexler ......................................................................................................... X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson .......................................................................................................

Mr. Pierluisi .......................................................................................................

Mr. Quigley ........................................................................................................ X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ......................................................................................................

Mr. Gonzalez ......................................................................................................

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Maffei ......................................................................................................... X 

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ...................................................................................... X 

Mr. Coble ........................................................................................................... X 

Mr. Gallegly .......................................................................................................

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Issa ............................................................................................................. X 

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ...................................................................................................... X 

Mr. Jordan ......................................................................................................... X 

Mr. Poe .............................................................................................................. X 

Mr. Chaffetz ...................................................................................................... X 

Mr. Rooney ........................................................................................................ X 

Mr. Harper ......................................................................................................... X 

Total ................................................................................................ 10 20 

2. Motion to order the bill favorably reported, as amended. Approved 21 to 9. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman ....................................................................................................... X 

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Delahunt ..................................................................................................... X 

Mr. Wexler ......................................................................................................... X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Mr. Pierluisi .......................................................................................................


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11 

ROLLCALL NO. 2—Continued 

Ayes Nays Present 

Mr. Quigley ........................................................................................................ X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ......................................................................................................

Mr. Gonzalez ......................................................................................................

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Ms. Sa ́nchez ......................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Maffei .........................................................................................................

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ...................................................................................... X 

Mr. Coble ........................................................................................................... X 

Mr. Gallegly .......................................................................................................

Mr. Goodlatte .................................................................................................... X 

Mr. Lungren ....................................................................................................... X 

Mr. Issa ............................................................................................................. X 

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................

Mr. Franks .........................................................................................................

Mr. Gohmert ...................................................................................................... X 

Mr. Jordan ......................................................................................................... X 

Mr. Poe .............................................................................................................. X 

Mr. Chaffetz ...................................................................................................... X 

Mr. Rooney ........................................................................................................ X 

Mr. Harper ......................................................................................................... X 

Total ................................................................................................ 21 9 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill H.R. 848, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 7, 2009. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 848, the ‘‘Performance 

Rights Act.’’ 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susan Willie, who can 

be reached at 226–2860. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

H.R. 848—Performance Rights Act. 

SUMMARY

H.R. 848 would expand the protections of certain copyright holders with respect to sound recordings broadcast by analog radio stations. Under current law, those copyright protections are extended 

to digital transmissions only. This expansion of copyright protections would allow performers to seek and collect royalties from 

radio stations that broadcast their work. H.R. 848 would require 

the Copyright Office to set rates and terms for royalty payments, 

with specific limits set for certain types of radio stations. 

Based on information from the Copyright Office, CBO expects 

that the new requirement for Copyright Royalty Judges to set royalty rates and terms would be accomplished through its regular 

rate-setting procedures. Therefore, CBO estimates that implementing H.R. 848 would not have a significant effect on spending 

subject to appropriation. 

Royalties for sound recordings are administered by 

SoundExchange, the private entity designated by the Copyright Office to perform the service. Because the amounts collected and 

spent by SoundExchange are not recorded on the Federal budget, 

CBO estimates that enacting H.R. 848 would have no effect on Federal revenues or direct spending. (Under current law, royalties for 

cable and satellite broadcast transmissions are administered by the 

Copyright Office and are recorded on the budget as Federal revenues and direct spending.) 

H.R. 848 would impose an intergovernmental and private-sector 

mandate, as defined in the Unfunded Mandates Reform Act 

(UMRA), on over-the-air radio broadcasters by requiring them to 

pay new royalty fees to copyright holders of sound recordings. 

Based on information from industry sources, CBO estimates that 

the cost of complying with the mandate for public entities would 

be small and would fall well below the annual threshold for intergovernmental mandates ($69 million in 2009, adjusted annually for 

inflation). Because the royalty rates for some broadcasters would 


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be established after enactment, CBO cannot determine whether the 

aggregate cost of complying with the mandate would exceed the annual threshold for private-sector mandates ($139 million in 2009, 

adjusted annually for inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

CBO estimates that enacting H.R. 848 would have no significant 

impact on the Federal budget. 

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

H.R. 848 would impose an intergovernmental and private-sector 

mandate, as defined in UMRA, on over-the-air radio broadcasters 

by requiring them to pay royalty fees to holders of copyrights on 

sound recordings. Based on information from industry sources, 

CBO estimates that the cost of complying with the mandate would 

be small and would fall well below the annual threshold for intergovernmental mandates ($69 million in 2009, adjusted annually for 

inflation). However, because the rate of royalty fees for some broadcasters would have to be established by the Copyright Royalty 

Judges, CBO cannot determine whether the aggregate cost of complying with the mandate would exceed the annual threshold for private-sector mandates ($139 million in 2009, adjusted annually for 

inflation). 

Under current law, over-the-air radio broadcasters only pay royalties to songwriters for the performance of their musical compositions. The bill would require those radio broadcasters to also pay 

royalties to holders of the copyrights on recordings (which may include performers and record companies). Under the bill, small, publicly owned, and religious stations would pay lower royalty fees 

than large and commercial stations. Those broadcasters could elect 

to pay a flat annual rate set by the bill and based on their annual 

revenues. However, royalty rates for stations that have gross revenues of $1.25 million per year or more would be established by the 

Copyright Royalty Judges if broadcasters and performers are unable to negotiate rates on their own. 

Based on data from industry sources regarding the number of 

over-the-air radio broadcasters, CBO estimates that the cost of 

complying with the mandate for publicly owned stations would be 

about $500,000 a year. Also, based on those data, CBO estimates 

that commercial broadcasters that have gross revenues of less than 

$1.25 million in any calendar year would pay a total of about $16 

million annually in royalty fees. 

Data on the amount of royalty fees currently paid by cable stations, satellite operators, Internet broadcasters, and other digital 

media suggest that the total cost of new performance royalties for 

commercial radio broadcasters affected by the bill could be substantial. Information from industry sources indicates that about 1,800 

over-the-air radio broadcasters currently have gross revenues in 

any year of $1.25 million or more. However, because royalty fees 

have not been established for such broadcasters and because such 

fees could cause some broadcasters to shift their programming from 

music to other formats, CBO cannot determine whether the aggregate cost of complying with the mandate would exceed the annual 

threshold for private-sector mandates. 


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ESTIMATE PREPARED BY: 

Federal Costs: Susan Willie 

Impact on State, Local, and Tribal Governments: Elizabeth Cove 

Delisle 

Impact on the Private Sector: Paige Piper/Bach 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 848 amends 

Title 17 of the U.S. Code to provide parity in radio performance 

rights, to afford the performers of a musical work the right to receive compensation when their work is broadcast over terrestrial 

radio, while providing significant safeguards for all non-commercial 

stations and commercial stations with gross annual revenues totaling less than $1.25 million, principally through a fee scale and 

delays in implementation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds authority for this legislation in article I, section 8, clause 8 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R.848 does not contain any congressional earmarks, limited tax benefits, or limited tariff benefits as defined in 

such clause 9. 

SECTION-BY-SECTION ANALYSIS

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short Title. Section 1 sets forth the short title of the bill 

as the ‘‘Performance Rights Act.’’ 

Sec. 2. Equitable Treatment for Terrestrial Broadcasts. Section 2 

repeals the exemption for terrestrial broadcasters, and makes conforming changes by deleting references to the word ‘‘digital’’ from 

the types of audio transmissions that are subject to a performance 

right. With these changes, all terrestrial (over-the-air) broadcast 

transmissions, including analog audio transmissions, would be subject to sound recording performance rights, thereby providing parity for the technologies currently covered under the section 114 license. 

The section further establishes rate standard parity among terrestrial broadcasters, cable, satellite, and Internet services, by creating one rate standard for Copyright Royalty Judges (CRJs) to 

consider, regardless of the platform involved. The new standard 

will be the old 801(b) standard minus subpart (D), which directed 

the CRJs to ‘‘minimize any disruptive impact on the structure of 


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the industries involved and on generally prevailing industry practices.’’ The CRJs will consider only 801(b)(1)(A)-(C). 

Sec. 3. Treatment for Minority, Female, Religious, Rural, Small, 

Noncommercial, Public, Educational, and Community Stations and 

Certain Uses. Section 3 would create an accommodation for certain 

qualifying broadcasters from the negotiation and arbitrated ratesetting. Instead, such broadcasters would pay a prescribed flat fee. 

The section provides for a fee scale for commercial radio stations 

with gross annual revenues of less than $1.25 million and all noncommercial stations, under which: 

1. Commercial and non-commercial stations that have gross 

annual revenues of less than $100,000 per year pay $500 

per year for the unlimited use of music. 

2. Commercial stations with gross annual revenues of less 

than $500,000 but more than $100,000 per year pay $2,500 

per year for the unlimited use of music. 

3. Commercial stations with gross annual revenues of less 

than $1,250,000 but more than $500,000 per year pay 

$5,000 per year for the unlimited use of music. 

4. Non-commercial radio stations with gross annual revenues 

of more than $100,000 per year pay $1,000 per year for the 

unlimited use of music. 

Finally, the section provides a complete exemption for those stations that broadcast religious services or make ‘‘incidental use of 

musical sound recordings,’’ such as brief musical transitions in and 

out of commercials or program segments, or brief performances 

during news, talk, and sports programming. 

The section delays the effect of royalty payments for 3 years for 

those broadcasters whose total gross revenue during the four full 

calendar quarters immediately preceding the date of enactment is 

less than $5,000,000. For those with revenue over $5,000,000, the 

bill delays any royalty payments for 1 year. 

Sec. 4. Availability of Per Program License. Section 4 allows terrestrial radio stations to obtain program licenses for sound recordings (at separately set rates), in lieu of blanket licenses. In some 

cases, as with mixed-format stations, a radio station may not 

broadcast many featured uses of music. In such cases, rather than 

requiring a station to pay a general blanket license fee in the same 

amount paid by a station that primarily makes featured uses of 

music, this section requires the CRJs to establish a ‘‘per program 

license’’ so that such stations can choose only to pay for the music 

they use, which may be less costly than the general blanket license. 

This parallels the licenses offered by the performance rights organizations for performing the underlying musical copyright. 

Sec. 5. No Harmful Effects on Songwriters. Section 5 protects 

songwriters from possible unintended consequences of providing 

this new performance right in sound recordings. It expressly provides that nothing in the Act shall adversely affect the royalties to 

songwriters, and ensures that license fees for the public performance of sound recordings will not be taken into account or cited to 

set or adjust the license fees payable to copyright owners of musical works. This section also makes clear that any licensing of the 

right under section 106(6) by an owner of a sound recording copyVerDate Mar 15 2010 01:43 Dec 15, 2010 Jkt 099006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6601 E:\HR\OC\HR680.XXX HR680

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right does not allow the licensee to publicly perform the sound recording unless the licensee has obtained a license from the copyright owner of the underlying musical work. 

Sec. 6. Payment of Certain Royalties. Section 6 codifies an agreement from 1994 among the major record companies, the American 

Federation of Television and Radio Artists (AFTRA), and the American Federation of Musicians (AFM). It requires payment by the labels to the unions equal to 1% of royalties from uses outside this 

statutory license for distribution to non-featured performers. This 

section also provides for direct payment to SoundExchange of 50% 

of any monies due pursuant to an agreement between the label and 

broadcaster for over-the-air performances that fall outside the statutory license. This portion will be distributed by SoundExchange to 

the performers independently, rather than via the labels. 

Sec. 7. No Effect on Local Communities. Section 7 provides that 

the payment of royalties by a broadcaster shall not affect in any 

respect the public interest obligations for a broadcaster to its local 

community under part 73 of title 47 of the Code of Federal Regulations. 

Sec. 8. Preservation of Diversity. Section 8 directs the CRJs to 

consider how their performance royalty determinations will affect: 

religious, small, non-commercial, minority-owned and religiousowned broadcasters; religious, minority or minority-owned, and female or female-owned royalty recipients; and non-music programming (such as news and informational programming) for stations 

part of a group located in a single designated market area. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

TITLE 17, UNITED STATES CODE 

* * * * * * * 

CHAPTER 1—SUBJECT MATTER AND SCOPE OF 

COPYRIGHT 

* * * * * * * 

§ 106. Exclusive rights in copyrighted works 

Subject to sections 107 through 122, the owner of copyright 

under this title has the exclusive rights to do and to authorize any 

of the following: 

(1) * * * 

* * * * * * * 

ø(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.¿ 


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(6) in the case of sound recordings, to perform the copyrighted work publicly by means of an audio transmission. 

* * * * * * * 

§ 114. Scope of exclusive rights in sound recordings 

(a) * * * 

* * * * * * * 

(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 øa digital¿ an audio transmission, other than as a part of an interactive service, is not an infringement of section 106(6) if the 

performance is part of— 

ø(A) a nonsubscription broadcast transmission;¿ 

(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; 

* * * * * * * 

(3) LICENSES FOR TRANSMISSIONS BY INTERACTIVE SERVICES.— 

(A) * * * 

* * * * * * * 

ø(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.¿ 

* * * * * * * 

(f) LICENSES FOR CERTAIN NONEXEMPT TRANSMISSIONS.— 

ø(1)(A) Proceedings under chapter 8 shall determine reasonable rates and terms of royalty payments for subscription 

transmissions by preexisting subscription services and transmissions by preexisting satellite digital audio radio services 

specified by subsection (d)(2) during the 5-year period beginning on January 1 of the second year following the year in 

which the proceedings are to be commenced, except in the case 

of a different transitional period provided under section 6(b)(3) 

of the Copyright Royalty and Distribution Reform Act of 2004, 

or such other period as the parties may agree. Such terms and 

rates shall distinguish among the different types of digital 

audio transmission services then in operation. Any copyright 

owners of sound recordings, preexisting subscription services, 

or preexisting satellite digital audio radio services may submit 

to the Copyright Royalty Judges licenses covering such subVerDate Mar 15 2010 01:43 Dec 15, 2010 Jkt 099006 PO 00000 Frm 00017 Fmt 6659 Sfmt 6601 E:\HR\OC\HR680.XXX HR680

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scription transmissions with respect to such sound recordings. 

The parties to each proceeding shall bear their own costs. 

ø(B) The schedule of reasonable rates and terms determined by the Copyright Royalty Judges shall, subject to paragraph (2), be binding on all copyright owners of sound recordings and entities performing sound recordings affected by this 

paragraph during the 5-year period specified in subparagraph 

(A), a transitional period provided under section 6(b)(3) of the 

Copyright Royalty and Distribution Reform Act of 2004, or 

such other period as the parties may agree. In establishing 

rates and terms for preexisting subscription services and preexisting satellite digital audio radio services, in addition to the 

objectives set forth in section 801(b)(1), the Copyright Royalty 

Judges may consider the rates and terms for comparable types 

of subscription digital audio transmission services and comparable circumstances under voluntary license agreements described in subparagraph (A). 

ø(C) The procedures under subparagraphs (A) and (B) also 

shall be initiated pursuant to a petition filed by any copyright 

owners of sound recordings, any preexisting subscription services, or any preexisting satellite digital audio radio services indicating that a new type of subscription digital audio transmission service on which sound recordings are performed is or 

is about to become operational, for the purpose of determining 

reasonable terms and rates of royalty payments with respect to 

such new type of transmission service for the period beginning 

with the inception of such new type of service and ending on 

the date on which the royalty rates and terms for subscription 

digital audio transmission services most recently determined 

under subparagraph (A) or (B) and chapter 8 expire, or such 

other period as the parties may agree.¿ 

ø(2)¿ (1)(A) Proceedings øunder chapter 8 shall determine 

reasonable rates and terms of royalty payments for public performances of sound recordings by means of eligible nonsubscription transmission services and new subscription services specified by subsection (d)(2) during the 5-year period beginning on January 1 of the second year following the year in 

which the proceedings are to be commenced, except in the case 

of a different transitional period provided under section 6(b)(3) 

of the Copyright Royalty and Distribution Reform Act of 2004, 

or such other period as the parties may agree. Such rates and 

terms shall distinguish among the different types of eligible 

nonsubscription transmission services and new subscription 

services then in operation and shall include a minimum fee for 

each such type of service. Any copyright owners of sound recordings or any entities performing sound recordings affected 

by this paragraph may submit to the Copyright Royalty Judges 

licenses covering such eligible nonsubscription transmissions 

and new subscription services with respect to such sound recordings.¿ under chapter 8 shall determine reasonable rates 

and terms of royalty payments for transmissions subject to statutory licensing under subsection (d)(2) during 5-year periods beginning on January 1 of the second year following the year in 

which the proceedings are to be commenced, except in the case 

of a different transitional period provided under section 6(b)(3) 


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of the Copyright Royalty and Distribution Reform Act of 2004, 

or such other period as the parties may agree. The parties to 

each proceeding shall bear their own costs. 

(B) The schedule of reasonable rates and terms determined 

by the Copyright Royalty Judges shall, subject to øparagraph 

(3)¿ paragraph (2), be binding on all copyright owners of sound 

recordings and entities performing sound recordings affected 

by this paragraph during the 5-year period specified in subparagraph (A), a transitional period provided under section 

6(b)(3) of the Copyright Royalty and Distribution Act of 2004, 

or such other period as the parties may agree. Such rates and 

terms shall distinguish among the different types of øeligible 

nonsubscription transmission¿ services then in operation and 

shall include a minimum fee for each such type of service, such 

differences to be based on criteria including, but not limited to, 

the quantity and nature of the use of sound recordings and the 

degree to which use of the service may substitute for or may 

promote the purchase of phonorecords by consumers. Such 

rates and terms shall include a per program license option for 

terrestrial broadcast stations that make limited feature uses of 

sound recordings. In establishing rates and terms for transmissions by øeligible nonsubscription services and new subscription services, the Copyright Royalty Judges shall establish 

rates and terms that most clearly represent the rates and 

terms that would have been negotiated in the marketplace between a willing buyer and a willing seller. In determining such 

rates and terms, the Copyright Royalty Judges shall base its 

decision on economic, competitive and programming information presented by the parties, including— 

ø(i) whether use of the service may substitute for or 

may promote the sales of phonorecords or otherwise may 

interfere with or may enhance the sound recording copyright owner’s other streams of revenue from its sound recordings; and 

ø(ii) the relative roles of the copyright owner and the 

transmitting entity in the copyrighted work and the service made available to the public with respect to relative 

creative contribution, technological contribution, capital investment, cost, and risk. 

In establishing such rates and terms, the Copyright Royalty 

Judges may consider the rates and terms for comparable types 

of digital audio transmission services and comparable circumstances under voluntary license agreements described in 

subparagraph (A)¿ services, in addition to the objectives set 

forth in subparagraphs (A), (B), and (C) of section 801(b)(1), the 

Copyright Royalty Judges may consider the rates and terms for 

comparable types of services and comparable circumstances 

under voluntary license agreements. Notwithstanding section 

801(b)(1), the provisions of section 801(b)(1)(D) shall not be 

taken into account by the Copyright Royalty Judges in any proceeding under this section. 

ø(C) The procedures under subparagraphs (A) and (B) 

shall also be initiated pursuant to a petition filed by any copyright owners of sound recordings or any eligible nonsubscription service or new subscription service indicating that a new 


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type of eligible nonsubscription service or new subscription 

service on which sound recordings are performed is or is about 

to become operational, for the purpose of determining reasonable terms and rates of royalty payments with respect to such 

new type of service for the period beginning with the inception 

of such new type of service and ending on the date on which 

the royalty rates and terms for preexisting subscription digital 

audio transmission services or preexisting satellite digital 

radio audio services, as the case may be, most recently determined under subparagraph (A) or (B) and chapter 8 expire, or 

such other period as the parties may agree.¿ 

(C) The procedures under subparagraphs (A) and (B) shall 

also be initiated pursuant to a petition filed by any copyright 

owner of sound recordings or any transmitting entity indicating 

that a new type of service on which sound recordings are performed is or is about to become operational, for the purpose of 

determining reasonable terms and rates of royalty payments 

with respect to such new type of service for the period beginning 

with the inception of such new type of service and ending on the 

date on which the royalty rates and terms for preexisting services most recently determined under subparagraph (A) or (B) 

and chapter 8 expire, or such other period as the parties may 

agree. 

(D)(i) Notwithstanding the provisions of subparagraphs (A) 

through (C), each individual terrestrial broadcast station that 

has gross revenues within a range specified in clause (ii) may 

elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee as provided in clause (ii), 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. 

(ii) As provided in clause (i), each individual terrestrial 

broadcast station that has gross revenues in any calendar year 

of— 

(I) less than $100,000 may elect to pay for its over-theair nonsubscription broadcast transmissions a royalty fee of 

$500 per year; 

(II) at least $100,000 but less than $500,000 may elect 

to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $2,500 per year; and 

(III) at least $500,000 but 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. 

(E)(i) 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) and 

that has gross revenues within a range specified in clause (ii) 

may elect to pay for its over-the-air nonsubscription broadcast 

transmissions a royalty fee as provided in clause (ii), 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 


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21 

chapter 8, or in any other administrative, judicial, or other Federal Government proceeding. 

(ii) As provided in clause (i), each individual terrestrial 

broadcast station that is a public broadcasting entity as defined 

in section 118(f) and has gross receipts in any calendar year 

of— (I) less than $100,000 may elect to pay for its over-theair nonsubscription broadcast transmissions a royalty fee of 

$500 per year; and (II) $100,000 or more may elect to pay for its over-theair nonsubscription broadcast transmissions a royalty fee of 

$1,000 per year. 

(F) Notwithstanding the provisions of subparagraphs (A) 

through (E), each individual terrestrial broadcast station that 

had total gross revenues during the 4 full calendar quarters immediately preceding the date of enactment of the Performance 

Rights Act of— (i) less than $5,000,000 shall not be required to pay a 

royalty under this paragraph during the 3 years immediately following the date of enactment of the Performance 

Rights Act; and (ii) $5,000,000 or more shall not be required to pay a 

royalty under this paragraph during the 1 year immediately following the date of enactment of the Performance 

Rights Act. 

The provisions of this subparagraph 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. 

ø(3)¿ (2) License agreements voluntarily negotiated at any 

time between 1 or more copyright owners of sound recordings 

and 1 or more entities performing sound recordings shall be 

given effect in lieu of any decision by the Librarian of Congress 

or determination by the Copyright Royalty Judges. 

ø(4)¿ (3)(A) * * * 

* * * * * * * 

ø(5)¿ (4)(A) * * * 

* * * * * * * 

(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 Copyright Royalty Judges 

øunder paragraph (4)¿ under paragraph (3) 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, 


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22 

economic and political circumstances of 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). This subparagraph shall not apply to 

the extent that the receiving agent and a webcaster that is 

party to an agreement entered into pursuant to subparagraph 

(A) expressly authorize the submission of the agreement in a 

proceeding under this subsection. 

* * * * * * * 

(5) Notwithstanding any other provision of this section, 

under no circumstances shall the rates established by the Copyright Royalty Judges for the public performance of sound recordings be cited, taken into account, or otherwise used in any 

administrative, judicial, or other governmental forum or proceeding, or otherwise, to reduce or adversely affect the license 

fees payable to copyright owners of musical works or their representatives for the public performance of their works by terrestrial broadcast stations, and such license fees for the public performance of musical works shall be independent of license fees 

paid for the public performance of sound recordings. 

(6) Neither this subsection nor the payment of royalties by 

broadcasters hereunder shall affect in any respect the public interest obligations of a broadcaster to its local community under 

part 73 of title 47 of the Code of Federal Regulations. 

(7) PRESERVATION OF DIVERSITY.—The Copyright Royalty 

Judges shall, in making determinations or adjustments of rates 

and terms of copyright royalty payments for public performances of sound recordings, consider evidence on the effect of 

such rates and terms on— 

(A) religious, minority-owned, female-owned, small, 

and noncommercial broadcasters; 

(B) non-music programming, including local news and 

information programming for stations that are part of station groups in which all stations within the group are located in one designated market area (as such term is defined in section 122(j)(2)(C)); and 

(C) religious, minority or minority-owned, and female 

or female-owned royalty recipients. 

(g) PROCEEDS FROM LICENSING OF TRANSMISSIONS.— ø(1) Except in the case of a transmission licensed under a 

statutory license in accordance with subsection (f) of this section— 

ø(A) a featured recording artist who performs on a 

sound recording that has been licensed for a 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 

ø(B) a nonfeatured recording artist who performs on a 

sound recording that has been licensed for a 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.¿ 


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(1) Except in the case of a transmission to which paragraph 

(5) applies or a transmission licensed under a statutory license 

in accordance with subsection (f) of this section, the following 

shall apply: 

(A) A featured recording artist who performs on a 

sound recording that has been licensed for public performance by means of an audio 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. 

(B)(i) In a case in which the copyright owner of a 

sound recording has licensed the sound recording for the 

public performance of the sound recording by means of an 

audio transmission, the copyright owner shall deposit 1 

percent of the receipts from the license with the American 

Federation of Musicians and American Federation of Television and Radio Artists Intellectual Property Rights Distribution Fund (or any successor entity) (in this subparagraph referred to as the ‘‘Fund’’) to be distributed to nonfeatured performers who have performed on sound recordings. 

The sound recording copyright owner shall make such deposits for receipts received during the first half of a calendar year by August 15 and for receipts received during 

the second half of a calendar year by February 15 of the 

following calendar year. 

(ii) A sound recording copyright owner shall include 

with deposits under clause (i) information regarding the 

amount of such deposits attributable to each licensee and, 

subject to obtaining consent, if necessary, from such licensee, for each sound recording performed by means of an 

audio transmission by such licensee during the applicable 

time period, and to the extent included in the accounting 

reports provided by the licensee to the sound recording 

copyright owner— 

(I) the identity of the artist; 

(II) the International Standard Recording Code of 

the sound recording; 

(III) the title of the sound recording; 

(IV) the number of times the sound recording was 

transmitted; and 

(V) the total amount of receipts collected from that 

licensee. 

(iii) The Fund shall make the distributions described 

in clause (i) as follows: 50 percent shall be paid to nonfeatured musicians (whether or not members of the American 

Federation of Musicians) and 50 percent shall be paid to 

nonfeatured vocalists (whether or not members of the American Federation of Television and Radio Artists). The Fund 

may, prior to making such distributions, deduct the reasonable costs related to making such distributions. 

(iv) The sound recording copyright owner shall not be 

required to provide any additional information to the Fund 

other than what is required under this subparagraph. 

Sound recording copyright owners shall use reasonable 

good faith efforts to include in all relevant licenses a reVerDate Mar 15 2010 01:43 Dec 15, 2010 Jkt 099006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6603 E:\HR\OC\HR680.XXX HR680

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quirement to report the information identified in subclauses 

(I) through (V) of clause (ii). Amounts required under 

clause (i) that are not paid by the date specified in such 

clause shall be subject to interest at the rate of 6 percent 

per annum for each day of nonpayment after the date the 

payment was due. 

(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 ødigital¿ audio transmission. 

* * * * * * * 

(5) Notwithstanding paragraph (1), to the extent that a license granted by the copyright owner of a sound recording to 

a terrestrial broadcast station extends to such station’s nonsubscription broadcast transmissions otherwise licensable 

under a statutory license in accordance with subsection (f), the 

station shall pay to the agent designated to distribute statutory 

licensing receipts from the licensing of transmissions in accordance with subsection (f), 50 percent of the total royalties that the 

station is required to pay for such transmissions under the applicable license agreement. That agent shall distribute such 

payments in proportion to the distributions provided in subparagraphs (B) through (D) of paragraph (2), and such payments shall be the sole payments to which featured and nonfeatured artists are entitled by virtue of such transmissions under 

the direct license with that station. 

* * * * * * * 

ø(i) NO EFFECT ON ROYALTIES FOR UNDERLYING WORKS.—License fees payable for the public performance of sound recordings 

under section 106(6) 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).¿ 

(i) NO ADVERSE AFFECT ON LICENSE FEES FOR UNDERLYING

MUSICAL WORKS; NECESSITY FOR OTHER LICENSES.— (1) NO ADVERSE AFFECT ON LICENSE FEES FOR UNDERLYING

MUSICAL WORKS.—License fees payable for the public performance of sound recordings under section 106(6) shall not be cited, 

taken into account, or otherwise used in any administrative, judicial, or other governmental forum or proceeding, or otherwise, 

to set or adjust the license fees payable to copyright owners of 

musical works or their representatives for the public performance of their works, for the purpose of reducing or adversely affecting such license fees. License fees payable to copyright owners for the public performance of their musical works shall not 

be reduced or adversely affected in any respect as a result of the 

rights granted by section 106(6). 


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(2) NECESSITY FOR OTHER LICENSES.—Notwithstanding the 

grant by an owner of copyright in a sound recording of an exclusive or nonexclusive license of the right under section 106(6) 

to perform the work publicly, a licensee of that sound recording 

may not publicly perform such sound recording unless a license 

has been granted for the public performance of any copyrighted 

musical work contained in the sound recording. 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. 

(j) DEFINITIONS.—As used in this section, the following terms 

have the following meanings: 

(1) * * * 

* * * * * * * 

(6) An ‘‘eligible nonsubscription transmission’’ is a noninteractive nonsubscription ødigital¿ audio transmission not 

exempt under subsection (d)(1) that is made as part of a service that provides audio programming consisting, in whole or in 

part, of performances of sound recordings, including øretransmissions of broadcast transmissions¿ broadcast transmissions 

and retransmissions of broadcast transmissions, if the primary 

purpose of the service is to provide to the public such audio or 

other entertainment programming, and the primary purpose of 

the service is not to sell, advertise, or promote particular products or services other than sound recordings, live concerts, or 

other music-related events. 

* * * * * * * 

CHAPTER 8—PROCEEDINGS BY COPYRIGHT ROYALTY 

JUDGES 

* * * * * * * 

§ 804. Institution of proceedings 

(a) * * * 

(b) TIMING OF PROCEEDINGS.— 

(1) * * * 

* * * * * * * 

(3) SECTION 114 AND CORRESPONDING 112 PROCEEDINGS.— 

(A) * * * 

* * * * * * * 

(C)(i) Notwithstanding any other provision of this 

chapter, this subparagraph shall govern proceedings commenced pursuant to section 114(f)(1)(C) øand 114(f)(2)(C)¿ 

concerning new types of services. 

* * * * * * * 

(iii) The proceeding shall follow the schedule set forth 

in subsections (b), (c), and (d) of section 803, except that— 

(I) * * * 

(II) the decision shall take effect as provided in 

subsections (c)(2) and (d)(2) of section 803 and section 

ø114(f)(4)(B)(ii)¿ 114(f)(3)(B)(ii) and (C). 


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(iv) The rates and terms shall remain in effect for the 

period set forth in section 114(f)(1)(C) øor 114(f)(2)(C), as 

the case may be¿. 

* * * * * * * 

Æ 


smartinez on DSKB9S0YB1PROD with REPORTS