S. 227

One Hundred Fourth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Wednesday,

the fourth day of January, one thousand nine hundred and ninety-five

An Act

To amend title 17, United States Code, to provide an exclusive right to perform

sound recordings publicly by means of digital transmissions, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Digital Performance Right in

Sound Recordings Act of 1995’’.

SEC. 2. EXCLUSIVE RIGHTS IN COPYRIGHTED WORKS.

Section 106 of title 17, United States Code, is amended—

(1) in paragraph (4) by striking ‘‘and’’ after the semicolon;

(2) in paragraph (5) by striking the period and inserting

‘‘; and’’; and

(3) by adding at the end the following:

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

SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.

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

(1) in subsection (a) by striking ‘‘and (3)’’ and inserting

‘‘(3) and (6)’’;

(2) in subsection (b) in the first sentence by striking

‘‘phonorecords, or of copies of motion pictures and other audiovisual works,’’ and inserting ‘‘phonorecords or copies’’;

(3) by striking subsection (d) and inserting:

‘‘(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 a digital

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—

‘‘(A)(i) a nonsubscription transmission other than a

retransmission;

‘‘(ii) an initial nonsubscription retransmission made

for direct reception by members of the public of a prior

or simultaneous incidental transmission that is not made

for direct reception by members of the public; or

‘‘(iii) a nonsubscription broadcast transmission;

‘‘(B) a retransmission of a nonsubscription broadcast

transmission: Provided, That, in the case of a retransmission of a radio station’s broadcast transmission—
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‘‘(i) the radio station’s broadcast transmission is

not willfully or repeatedly retransmitted more than

a radius of 150 miles from the site of the radio broadcast transmitter, however—

‘‘(I) the 150 mile limitation under this clause

shall not apply when a nonsubscription broadcast

transmission by a radio station licensed by the

Federal Communications Commission is retransmitted on a nonsubscription basis by a terrestrial

broadcast station, terrestrial translator, or terrestrial repeater licensed by the Federal Communications Commission; and

‘‘(II) in the case of a subscription retransmission of a nonsubscription broadcast retransmission covered by subclause (I), the 150 mile

radius shall be measured from the transmitter

site of such broadcast retransmitter;

‘‘(ii) the retransmission is of radio station broadcast

transmissions that are—

‘‘(I) obtained by the retransmitter over the

air;

‘‘(II) not electronically processed by the retransmitter to deliver separate and discrete signals; and

‘‘(III) retransmitted only within the local

communities served by the retransmitter;

‘‘(iii) the radio station’s broadcast transmission was

being retransmitted to cable systems (as defined in

section 111(f)) by a satellite carrier on January 1,

1995, and that retransmission was being retransmitted

by cable systems as a separate and discrete signal,

and the satellite carrier obtains the radio station’s

broadcast transmission in an analog format: Provided, That the broadcast transmission being retransmitted

may embody the programming of no more than one

radio station; or

‘‘(iv) the radio station’s broadcast transmission is

made by a noncommercial educational broadcast station funded on or after January 1, 1995, under section

396(k) of the Communications Act of 1934 (47 U.S.C.

396(k)), consists solely of noncommercial educational

and cultural radio programs, and the retransmission,

whether or not simultaneous, is a nonsubscription

terrestrial broadcast retransmission; or

‘‘(C) a transmission that comes within any of the following categories—

‘‘(i) a prior or simultaneous transmission incidental

to an exempt transmission, such as a feed received

by and then retransmitted by an exempt transmitter:

Provided, That such incidental transmissions do not

include any subscription transmission directly for

reception by members of the public;

‘‘(ii) a transmission within a business establishment, confined to its premises or the immediately

surrounding vicinity;

‘‘(iii) a retransmission by any retransmitter, including a multichannel video programming distributor as
S. 227—3

defined in section 602(12) of the Communications Act

of 1934 (47 U.S.C. 522(12)), of a transmission by a

transmitter licensed to publicly perform the sound

recording as a part of that transmission, if the

retransmission is simultaneous with the licensed transmission and authorized by the transmitter; or

‘‘(iv) a transmission to a business establishment

for use in the ordinary course of its business: Provided,

That the business recipient does not retransmit the

transmission outside of its premises or the immediately

surrounding vicinity, and that the transmission does

not exceed the sound recording performance complement. Nothing in this clause shall limit the scope

of the exemption in clause (ii).

‘‘(2) SUBSCRIPTION TRANSMISSIONS.—In the case of a

subscription transmission not exempt under subsection (d)(1),

the performance of a sound recording publicly by means of

a digital audio transmission shall be subject to statutory licensing, in accordance with subsection (f) of this section, if—

‘‘(A) the transmission is not part of an interactive

service;

‘‘(B) the transmission does not exceed the sound recording performance complement;

‘‘(C) the transmitting entity does not cause to be published by means of an advance program schedule or prior

announcement the titles of the specific sound recordings

or phonorecords embodying such sound recordings to be

transmitted;

‘‘(D) except in the case of transmission to a business

establishment, the transmitting entity does not automatically and intentionally cause any device receiving the transmission to switch from one program channel to another;

and

‘‘(E) except as provided in section 1002(e) of this title,

the transmission of the sound recording is accompanied

by the information encoded in that sound recording, if

any, by or under the authority of the copyright owner

of that sound recording, that identifies the title of the

sound recording, the featured recording artist who performs

on the sound recording, and related information, including

information concerning the underlying musical work and

its writer.

‘‘(3) LICENSES FOR TRANSMISSIONS BY INTERACTIVE SERVICES.—

‘‘(A) No interactive service shall be granted an exclusive license under section 106(6) for the performance of

a sound recording publicly by means of digital audio transmission for a period in excess of 12 months, except that

with respect to an exclusive license granted to an interactive service by a licensor that holds the copyright to

1,000 or fewer sound recordings, the period of such license

shall not exceed 24 months: Provided, however, That the

grantee of such exclusive license shall be ineligible to

receive another exclusive license for the performance of

that sound recording for a period of 13 months from the

expiration of the prior exclusive license.
S. 227—4

‘‘(B) The limitation set forth in subparagraph (A) of

this paragraph shall not apply if—

‘‘(i) the licensor has granted and there remain

in effect licenses under section 106(6) for the public

performance of sound recordings by means of digital

audio transmission by at least 5 different interactive

services: Provided, however, That each such license

must be for a minimum of 10 percent of the copyrighted

sound recordings owned by the licensor that have been

licensed to interactive services, but in no event less

than 50 sound recordings; or

‘‘(ii) the exclusive license is granted to perform

publicly up to 45 seconds of a sound recording and

the sole purpose of the performance is to promote

the distribution or performance of that sound recording.

‘‘(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.

‘‘(D) The performance of a sound recording by means

of a retransmission of a digital audio transmission is not

an infringement of section 106(6) if—

‘‘(i) the retransmission is of a transmission by an

interactive service licensed to publicly perform the

sound recording to a particular member of the public

as part of that transmission; and

‘‘(ii) the retransmission is simultaneous with the

licensed transmission, authorized by the transmitter,

and limited to that particular member of the public

intended by the interactive service to be the recipient

of the transmission.

‘‘(E) For the purposes of this paragraph—

‘‘(i) a ‘licensor’ shall include the licensing entity

and any other entity under any material degree of

common ownership, management, or control that owns

copyrights in sound recordings; and

‘‘(ii) a ‘performing rights society’ is an association

or corporation that licenses the public performance

of nondramatic musical works on behalf of the copyright owner, such as the American Society of Composers, Authors and Publishers, Broadcast Music, Inc.,

and SESAC, Inc.

‘‘(4) RIGHTS NOT OTHERWISE LIMITED.—

‘‘(A) Except as expressly provided in this section, this

section does not limit or impair the exclusive right to

perform a sound recording publicly by means of a digital

audio transmission under section 106(6).

‘‘(B) Nothing in this section annuls or limits in any

way—
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‘‘(i) the exclusive right to publicly perform a musical work, including by means of a digital audio transmission, under section 106(4);

‘‘(ii) the exclusive rights in a sound recording or

the musical work embodied therein under sections

106(1), 106(2) and 106(3); or

‘‘(iii) any other rights under any other clause of

section 106, or remedies available under this title,

as such rights or remedies exist either before or after

the date of enactment of the Digital Performance Right

in Sound Recordings Act of 1995.

‘‘(C) Any limitations in this section on the exclusive

right under section 106(6) apply only to the exclusive right

under section 106(6) and not to any other exclusive rights

under section 106. Nothing in this section shall be construed to annul, limit, impair or otherwise affect in any

way the ability of the owner of a copyright in a sound

recording to exercise the rights under sections 106(1),

106(2) and 106(3), or to obtain the remedies available under

this title pursuant to such rights, as such rights and remedies exist either before or after the date of enactment

of the Digital Performance Right in Sound Recordings Act

of 1995.’’; and

(4) by adding after subsection (d) the following:

‘‘(e) AUTHORITY FOR NEGOTIATIONS.—

‘‘(1) Notwithstanding any provision of the antitrust laws,

in negotiating statutory licenses in accordance with subsection

(f), any copyright owners of sound recordings and any entities

performing sound recordings affected by this section may negotiate and agree upon the royalty rates and license terms and

conditions for the performance of such sound recordings and

the proportionate division of fees paid among copyright owners,

and may designate common agents on a nonexclusive basis

to negotiate, agree to, pay, or receive payments. ‘‘(2) For licenses granted under section 106(6), other than

statutory licenses, such as for performances by interactive services or performances that exceed the sound recording performance complement—

‘‘(A) copyright owners of sound recordings affected by

this section may designate common agents to act on their

behalf to grant licenses and receive and remit royalty payments: Provided, That each copyright owner shall establish

the royalty rates and material license terms and conditions

unilaterally, that is, not in agreement, combination, or

concert with other copyright owners of sound recordings;

and

‘‘(B) entities performing sound recordings affected by

this section may designate common agents to act on their

behalf to obtain licenses and collect and pay royalty fees:

Provided, That each entity performing sound recordings

shall determine the royalty rates and material license

terms and conditions unilaterally, that is, not in agreement,

combination, or concert with other entities performing

sound recordings.

‘‘(f) LICENSES FOR NONEXEMPT SUBSCRIPTION TRANSMISSIONS.—

‘‘(1) No later than 30 days after the enactment of the

Digital Performance Right in Sound Recordings Act of 1995,
S. 227—6

the Librarian of Congress shall cause notice to be published

in the Federal Register of the initiation of voluntary negotiation

proceedings for the purpose of determining reasonable terms

and rates of royalty payments for the activities specified by

subsection (d)(2) of this section during the period beginning

on the effective date of such Act and ending on December

31, 2000. Such terms and rates shall distinguish among the

different types of digital audio transmission services then in

operation. Any copyright owners of sound recordings or any

entities performing sound recordings affected by this section

may submit to the Librarian of Congress licenses covering

such activities with respect to such sound recordings. The parties to each negotiation proceeding shall bear their own costs.

‘‘(2) In the absence of license agreements negotiated under

paragraph (1), during the 60-day period commencing 6 months

after publication of the notice specified in paragraph (1), and

upon the filing of a petition in accordance with section 803(a)(1),

the Librarian of Congress shall, pursuant to chapter 8, convene

a copyright arbitration royalty panel to determine and publish

in the Federal Register a schedule of rates and terms which,

subject to paragraph (3), shall be binding on all copyright

owners of sound recordings and entities performing sound

recordings. In addition to the objectives set forth in section

801(b)(1), in establishing such rates and terms, the copyright

arbitration royalty panel may consider the rates and terms

for comparable types of digital audio transmission services and

comparable circumstances under voluntary license agreements

negotiated as provided in paragraph (1). The Librarian of Congress shall also establish requirements by which copyright owners may receive reasonable notice of the use of their sound

recordings under this section, and under which records of such

use shall be kept and made available by entities performing

sound recordings.

‘‘(3) License agreements voluntarily negotiated at any time

between one or more copyright owners of sound recordings

and one or more entities performing sound recordings shall

be given effect in lieu of any determination by a copyright

arbitration royalty panel or decision by the Librarian of Congress.

‘‘(4)(A) Publication of a notice of the initiation of voluntary

negotiation proceedings as specified in paragraph (1) shall be

repeated, in accordance with regulations that the Librarian

of Congress shall prescribe—

‘‘(i) no later than 30 days after a petition is filed

by any copyright owners of sound recordings or any entities

performing sound recordings affected by this section

indicating that a new type of digital audio transmission

service on which sound recordings are performed is or

is about to become operational; and

‘‘(ii) in the first week of January, 2000 and at 5-

year intervals thereafter.

‘‘(B)(i) The procedures specified in paragraph (2) shall be

repeated, in accordance with regulations that the Librarian

of Congress shall prescribe, upon the filing of a petition in

accordance with section 803(a)(1) during a 60-day period

commencing—
S. 227—7

‘‘(I) six months after publication of a notice of the

initiation of voluntary negotiation proceedings under paragraph (1) pursuant to a petition under paragraph (4)(A)(i);

or

‘‘(II) on July 1, 2000 and at 5-year intervals thereafter.

‘‘(ii) The procedures specified in paragraph (2) shall be

concluded in accordance with section 802.

‘‘(5)(A) Any person who wishes to perform a sound recording

publicly by means of a nonexempt subscription transmission

under this subsection may do so without infringing the exclusive

right of the copyright owner of the sound recording—

‘‘(i) by complying with such notice requirements as

the Librarian of Congress shall prescribe by regulation

and by paying royalty fees in accordance with this subsection; or

‘‘(ii) if such royalty fees have not been set, by agreeing

to pay such royalty fees as shall be determined in accordance with this subsection.

‘‘(B) Any royalty payments in arrears shall be made on

or before the twentieth day of the month next succeeding the

month in which the royalty fees are set.

‘‘(g) PROCEEDS FROM LICENSING OF SUBSCRIPTION TRANSMISSIONS.—

‘‘(1) Except in the case of a subscription transmission

licensed in accordance with subsection (f) of this section—

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

sound recording that has been licensed for a subscription

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

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

a sound recording that has been licensed for a subscription

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.

‘‘(2) The copyright owner of the exclusive right under section 106(6) of this title to publicly perform a sound recording

by means of a digital audio transmission shall allocate to recording artists in the following manner its receipts from the statutory licensing of subscription transmission performances of the

sound recording in accordance with subsection (f) of this section:

‘‘(A) 21⁄2 percent of the receipts shall be deposited in

an escrow account managed by an independent administrator jointly appointed by copyright owners of sound

recordings and the American Federation of Musicians (or

any successor entity) to be distributed to nonfeatured

musicians (whether or not members of the American Federation of Musicians) who have performed on sound recordings.

‘‘(B) 21⁄2 percent of the receipts shall be deposited in

an escrow account managed by an independent administrator jointly appointed by copyright owners of sound

recordings and the American Federation of Television and

Radio Artists (or any successor entity) to be distributed

to nonfeatured vocalists (whether or not members of the
S. 227—8

American Federation of Television and Radio Artists) who

have performed on sound recordings.

‘‘(C) 45 percent of the receipts shall be allocated, on

a per sound recording basis, to the recording artist or

artists featured on such sound recording (or the persons

conveying rights in the artists’ performance in the sound

recordings).

‘‘(h) LICENSING TO AFFILIATES.—

‘‘(1) If the copyright owner of a sound recording licenses

an affiliated entity the right to publicly perform a sound recording by means of a digital audio transmission under section

106(6), the copyright owner shall make the licensed sound

recording available under section 106(6) on no less favorable

terms and conditions to all bona fide entities that offer similar

services, except that, if there are material differences in the

scope of the requested license with respect to the type of service,

the particular sound recordings licensed, the frequency of use,

the number of subscribers served, or the duration, then the

copyright owner may establish different terms and conditions

for such other services.

‘‘(2) The limitation set forth in paragraph (1) of this subsection shall not apply in the case where the copyright owner

of a sound recording licenses—

‘‘(A) an interactive service; or

‘‘(B) an entity to perform publicly up to 45 seconds

of the sound recording and the sole purpose of the performance is to promote the distribution or performance of that

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

have the following meanings: ‘‘(1) An ‘affiliated entity’ is an entity engaging in digital audio transmissions covered by section 106(6), other than an

interactive service, in which the licensor has any direct or

indirect partnership or any ownership interest amounting to

5 percent or more of the outstanding voting or non-voting

stock.

‘‘(2) A ‘broadcast’ transmission is a transmission made by

a terrestrial broadcast station licensed as such by the Federal

Communications Commission.

‘‘(3) A ‘digital audio transmission’ is a digital transmission

as defined in section 101, that embodies the transmission of

a sound recording. This term does not include the transmission

of any audiovisual work.

‘‘(4) An ‘interactive service’ is one that enables a member

of the public to receive, on request, a transmission of a particular sound recording chosen by or on behalf of the recipient.

The ability of individuals to request that particular sound

recordings be performed for reception by the public at large
S. 227—9

does not make a service interactive. If an entity offers both

interactive and non-interactive services (either concurrently or

at different times), the non-interactive component shall not

be treated as part of an interactive service.

‘‘(5) A ‘nonsubscription’ transmission is any transmission

that is not a subscription transmission.

‘‘(6) A ‘retransmission’ is a further transmission of an initial

transmission, and includes any further retransmission of the

same transmission. Except as provided in this section, a transmission qualifies as a ‘retransmission’ only if it is simultaneous

with the initial transmission. Nothing in this definition shall

be construed to exempt a transmission that fails to satisfy

a separate element required to qualify for an exemption under

section 114(d)(1).

‘‘(7) The ‘sound recording performance complement’ is the

transmission during any 3-hour period, on a particular channel

used by a transmitting entity, of no more than—

‘‘(A) 3 different selections of sound recordings from

any one phonorecord lawfully distributed for public

performance or sale in the United States, if no more than

2 such selections are transmitted consecutively; or

‘‘(B) 4 different selections of sound recordings—

‘‘(i) by the same featured recording artist; or

‘‘(ii) from any set or compilation of phonorecords

lawfully distributed together as a unit for public

performance or sale in the United States,

if no more than three such selections are transmitted

consecutively:

Provided, That the transmission of selections in excess of the

numerical limits provided for in clauses (A) and (B) from multiple phonorecords shall nonetheless qualify as a sound recording performance complement if the programming of the multiple

phonorecords was not willfully intended to avoid the numerical

limitations prescribed in such clauses.

‘‘(8) A ‘subscription’ transmission is a transmission that

is controlled and limited to particular recipients, and for which

consideration is required to be paid or otherwise given by

or on behalf of the recipient to receive the transmission or

a package of transmissions including the transmission.

‘‘(9) A ‘transmission’ includes both an initial transmission

and a retransmission.’’.

SEC. 4. MECHANICAL ROYALTIES IN DIGITAL PHONORECORD DELIVERIES.

Section 115 of title 17, United States Code, is amended—

(1) in subsection (a)(1)—

(A) in the first sentence by striking out ‘‘any other

person’’ and inserting in lieu thereof ‘‘any other person,

including those who make phonorecords or digital phonorecord deliveries,’’; and

(B) in the second sentence by inserting before the

period ‘‘, including by means of a digital phonorecord delivery’’;

(2) in subsection (c)(2) in the second sentence by inserting

‘‘and other than as provided in paragraph (3),’’ after ‘‘For this

purpose,’’;
S. 227—10

(3) by redesignating paragraphs (3), (4), and (5) of subsection (c) as paragraphs (4), (5), and (6), respectively, and

by inserting after paragraph (2) the following new paragraph:

‘‘(3)(A) A compulsory license under this section includes

the right of the compulsory licensee to distribute or authorize

the distribution of a phonorecord of a nondramatic musical

work by means of a digital transmission which constitutes

a digital phonorecord delivery, regardless of whether the digital

transmission is also a public performance of the sound recording

under section 106(6) of this title or of any nondramatic musical

work embodied therein under section 106(4) of this title. For

every digital phonorecord delivery by or under the authority

of the compulsory licensee—

‘‘(i) on or before December 31, 1997, the royalty payable

by the compulsory licensee shall be the royalty prescribed

under paragraph (2) and chapter 8 of this title; and

‘‘(ii) on or after January 1, 1998, the royalty payable

by the compulsory licensee shall be the royalty prescribed

under subparagraphs (B) through (F) and chapter 8 of

this title.

‘‘(B) Notwithstanding any provision of the antitrust laws,

any copyright owners of nondramatic musical works and any

persons entitled to obtain a compulsory license under subsection

(a)(1) may negotiate and agree upon the terms and rates of

royalty payments under this paragraph and the proportionate

division of fees paid among copyright owners, and may designate common agents to negotiate, agree to, pay or receive

such royalty payments. Such authority to negotiate the terms

and rates of royalty payments includes, but is not limited

to, the authority to negotiate the year during which the royalty

rates prescribed under subparagraphs (B) through (F) and chapter 8 of this title shall next be determined.

‘‘(C) During the period of June 30, 1996, through December

31, 1996, the Librarian of Congress shall cause notice to be

published in the Federal Register of the initiation of voluntary

negotiation proceedings for the purpose of determining reasonable terms and rates of royalty payments for the activities

specified by subparagraph (A) during the period beginning

January 1, 1998, and ending on the effective date of any new

terms and rates established pursuant to subparagraph (C),

(D) or (F), or such other date (regarding digital phonorecord

deliveries) as the parties may agree. Such terms and rates

shall distinguish between (i) digital phonorecord deliveries

where the reproduction or distribution of a phonorecord is

incidental to the transmission which constitutes the digital

phonorecord delivery, and (ii) digital phonorecord deliveries

in general. Any copyright owners of nondramatic musical works

and any persons entitled to obtain a compulsory license under

subsection (a)(1) may submit to the Librarian of Congress

licenses covering such activities. The parties to each negotiation

proceeding shall bear their own costs.

‘‘(D) In the absence of license agreements negotiated under

subparagraphs (B) and (C), upon the filing of a petition in

accordance with section 803(a)(1), the Librarian of Congress

shall, pursuant to chapter 8, convene a copyright arbitration

royalty panel to determine and publish in the Federal Register

a schedule of rates and terms which, subject to subparagraph
S. 227—11

(E), shall be binding on all copyright owners of nondramatic

musical works and persons entitled to obtain a compulsory

license under subsection (a)(1) during the period beginning

January 1, 1998, and ending on the effective date of any new

terms and rates established pursuant to subparagraph (C),

(D) or (F), or such other date (regarding digital phonorecord

deliveries) as may be determined pursuant to subparagraphs

(B) and (C). Such terms and rates shall distinguish between

(i) digital phonorecord deliveries where the reproduction or

distribution of a phonorecord is incidental to the transmission

which constitutes the digital phonorecord delivery, and (ii) digital phonorecord deliveries in general. In addition to the objectives set forth in section 801(b)(1), in establishing such rates

and terms, the copyright arbitration royalty panel may consider

rates and terms under voluntary license agreements negotiated

as provided in subparagraphs (B) and (C). The royalty rates

payable for a compulsory license for a digital phonorecord delivery under this section shall be established de novo and no

precedential effect shall be given to the amount of the royalty

payable by a compulsory licensee for digital phonorecord deliveries on or before December 31, 1997. The Librarian of Congress

shall also establish requirements by which copyright owners

may receive reasonable notice of the use of their works under

this section, and under which records of such use shall be

kept and made available by persons making digital phonorecord

deliveries.

‘‘(E)(i) License agreements voluntarily negotiated at any

time between one or more copyright owners of nondramatic

musical works and one or more persons entitled to obtain

a compulsory license under subsection (a)(1) shall be given

effect in lieu of any determination by the Librarian of Congress.

Subject to clause (ii), the royalty rates determined pursuant

to subparagraph (C), (D) or (F) shall be given effect in lieu

of any contrary royalty rates specified in a contract pursuant

to which a recording artist who is the author of a nondramatic

musical work grants a license under that person’s exclusive

rights in the musical work under sections 106 (1) and (3)

or commits another person to grant a license in that musical

work under sections 106 (1) and (3), to a person desiring to

fix in a tangible medium of expression a sound recording

embodying the musical work. ‘‘(ii) The second sentence of clause (i) shall not apply to— ‘‘(I) a contract entered into on or before June 22, 1995,

and not modified thereafter for the purpose of reducing

the royalty rates determined pursuant to subparagraph

(C), (D) or (F) or of increasing the number of musical

works within the scope of the contract covered by the

reduced rates, except if a contract entered into on or before

June 22, 1995, is modified thereafter for the purpose of

increasing the number of musical works within the scope

of the contract, any contrary royalty rates specified in

the contract shall be given effect in lieu of royalty rates

determined pursuant to subparagraph (C), (D) or (F) for

the number of musical works within the scope of the contract as of June 22, 1995; and

‘‘(II) a contract entered into after the date that the

sound recording is fixed in a tangible medium of expression
S. 227—12

substantially in a form intended for commercial release,

if at the time the contract is entered into, the recording

artist retains the right to grant licenses as to the musical

work under sections 106(1) and 106(3).

‘‘(F) The procedures specified in subparagraphs (C) and

(D) shall be repeated and concluded, in accordance with regulations that the Librarian of Congress shall prescribe, in each

fifth calendar year after 1997, except to the extent that different

years for the repeating and concluding of such proceedings

may be determined in accordance with subparagraphs (B) and

(C).

‘‘(G) Except as provided in section 1002(e) of this title,

a digital phonorecord delivery licensed under this paragraph

shall be accompanied by the information encoded in the sound

recording, if any, by or under the authority of the copyright

owner of that sound recording, that identifies the title of the

sound recording, the featured recording artist who performs

on the sound recording, and related information, including

information concerning the underlying musical work and its

writer.

‘‘(H)(i) A digital phonorecord delivery of a sound recording

is actionable as an act of infringement under section 501,

and is fully subject to the remedies provided by sections 502

through 506 and section 509, unless—

‘‘(I) the digital phonorecord delivery has been authorized by the copyright owner of the sound recording; and

‘‘(II) the owner of the copyright in the sound recording

or the entity making the digital phonorecord delivery has

obtained a compulsory license under this section or has

otherwise been authorized by the copyright owner of the

musical work to distribute or authorize the distribution,

by means of a digital phonorecord delivery, of each musical

work embodied in the sound recording.

‘‘(ii) Any cause of action under this subparagraph shall

be in addition to those available to the owner of the copyright

in the nondramatic musical work under subsection (c)(6) and

section 106(4) and the owner of the copyright in the sound

recording under section 106(6). ‘‘(I) The liability of the copyright owner of a sound recording

for infringement of the copyright in a nondramatic musical

work embodied in the sound recording shall be determined

in accordance with applicable law, except that the owner of

a copyright in a sound recording shall not be liable for a

digital phonorecord delivery by a third party if the owner

of the copyright in the sound recording does not license the

distribution of a phonorecord of the nondramatic musical work.

‘‘(J) Nothing in section 1008 shall be construed to prevent

the exercise of the rights and remedies allowed by this paragraph, paragraph (6), and chapter 5 in the event of a digital

phonorecord delivery, except that no action alleging infringement of copyright may be brought under this title against

a manufacturer, importer or distributor of a digital audio

recording device, a digital audio recording medium, an analog

recording device, or an analog recording medium, or against

a consumer, based on the actions described in such section.

‘‘(K) Nothing in this section annuls or limits (i) the exclusive

right to publicly perform a sound recording or the musical
S. 227—13

work embodied therein, including by means of a digital transmission, under sections 106(4) and 106(6), (ii) except for compulsory licensing under the conditions specified by this section,

the exclusive rights to reproduce and distribute the sound

recording and the musical work embodied therein under sections 106(1) and 106(3), including by means of a digital phonorecord delivery, or (iii) any other rights under any other provision of section 106, or remedies available under this title,

as such rights or remedies exist either before or after the

date of enactment of the Digital Performance Right in Sound

Recordings Act of 1995.

‘‘(L) The provisions of this section concerning digital phonorecord deliveries shall not apply to any exempt transmissions

or retransmissions under section 114(d)(1). The exemptions created in section 114(d)(1) do not expand or reduce the rights

of copyright owners under section 106 (1) through (5) with

respect to such transmissions and retransmissions.’’; and

(5) by adding after subsection (c) the following:

‘‘(d) DEFINITION.—As used in this section, the following term

has the following meaning: A ‘digital phonorecord delivery’ is each

individual delivery of a phonorecord by digital transmission of a

sound recording which results in a specifically identifiable reproduction by or for any transmission recipient of a phonorecord of that

sound recording, regardless of whether the digital transmission

is also a public performance of the sound recording or any

nondramatic musical work embodied therein. A digital phonorecord

delivery does not result from a real-time, non-interactive subscription transmission of a sound recording where no reproduction of

the sound recording or the musical work embodied therein is made

from the inception of the transmission through to its receipt by

the transmission recipient in order to make the sound recording

audible.’’.

SEC. 5. CONFORMING AMENDMENTS.

(a) DEFINITIONS.—Section 101 of title 17, United States Code,

is amended by inserting after the definition of ‘‘device’’, ‘‘machine’’,

or ‘‘process’’ the following:

‘‘A ‘digital transmission’ is a transmission in whole or in

part in a digital or other non-analog format.’’.

(b) LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY TRANSMISSIONS.—Section 111(c)(1) of title 17, United States Code, is

amended in the first sentence by inserting ‘‘and section 114(d)’’

after ‘‘of this subsection’’.

(c) LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY TRANSMISSIONS OF SUPERSTATIONS AND NETWORK STATIONS FOR PRIVATE

HOME VIEWING.—

(1) Section 119(a)(1) of title 17, United States Code, is

amended in the first sentence by inserting ‘‘and section 114(d)’’

after ‘‘of this subsection’’.

(2) Section 119(a)(2)(A) of title 17, United States Code,

is amended in the first sentence by inserting ‘‘and section

114(d)’’ after ‘‘of this subsection’’.

(d) COPYRIGHT ARBITRATION ROYALTY PANELS.—

(1) Section 801(b)(1) of title 17, United States Code, is

amended in the first and second sentences by striking ‘‘115’’

each place it appears and inserting ‘‘114, 115,’’.
S. 227—14

(2) Section 802(c) of title 17, United States Code, is amended in the third sentence by striking ‘‘section 111, 116, or 119,’’

and inserting ‘‘section 111, 114, 116, or 119, any person entitled

to a compulsory license under section 114(d), any person entitled to a compulsory license under section 115,’’.

(3) Section 802(g) of title 17, United States Code, is amended in the third sentence by inserting ‘‘114,’’ after ‘‘111,’’.

(4) Section 802(h)(2) of title 17, United States Code, is

amended by inserting ‘‘114,’’ after ‘‘111,’’.

(5) Section 803(a)(1) of title 17, United States Code, is

amended in the first sentence by striking ‘‘115’’ and inserting

‘‘114, 115’’ and by striking ‘‘and (4)’’ and inserting ‘‘(4) and

(5)’’.

(6) Section 803(a)(3) of title 17, United States Code, is

amended by inserting before the period ‘‘or as prescribed in

section 115(c)(3)(D)’’.

(7) Section 803(a) of title 17, United States Code, is amended by inserting after paragraph (4) the following new paragraph:

‘‘(5) With respect to proceedings under section 801(b)(1)

concerning the determination of reasonable terms and rates

of royalty payments as provided in section 114, the Librarian

of Congress shall proceed when and as provided by that section.’’.

SEC. 6. EFFECTIVE DATE.

This Act and the amendments made by this Act shall take

effect 3 months after the date of enactment of this Act, except

that the provisions of sections 114(e) and 114(f) of title 17, United

States Code (as added by section 3 of this Act) shall take effect

immediately upon the date of enactment of this Act.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.