I
104TH CONGRESS
1ST SESSION
H. R. 1506
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.
IN THE HOUSE OF REPRESENTATIVES
APRIL 7, 1995
Mr. MOORHEAD (for himself, Mr. HYDE, Mr. CONYERS, and Mr. GEKAS) in-
troduced the following bill; which was referred to the Committee on the
Judiciary
A BILL
To amend title 17, United States Code, to provide an exclu-
sive right to perform sound recordings publicly by means
of digital transmissions, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives 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
transmission.’’.
SEC. 3. SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORD-
INGS.
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 the first sentence of subsection (b) by
striking ‘‘phonorecords, or of copies of motion pic-
tures and other audiovisual works,’’ and inserting
‘‘phonorecords or copies’’; and
(3) by striking subsection (d) and inserting the
following:
‘‘(d) LIMITATIONS ON EXCLUSIVE RIGHT.—Notwith-
standing the provisions of section 106(6)—
‘‘(1) EXEMPT TRANSMISSIONS.—The perform-
ance of a sound recording publicly by means of a
digital transmission, other than as part of an inter-
active service, is not an infringement of section
106(6) if the performance is part of—
‘‘(A) a nonsubscription transmission, such
as a nonsubscription broadcast transmission;
‘‘(B) any of the following transmissions,
whether it is a subscription transmission or a
nonsubscription transmission:
‘‘(i) a prior or simultaneous trans-
mission incidental to a nonsubscription
transmission, such as a feed received by
and 
then 
retransmitted 
by 
the
nonsubscription transmitter, if such inci-
dental transmission does not include any
subscription transmission directly for re-
ception by members of the public;
‘‘(ii) 
a 
retransmission 
of 
a
nonsubscription broadcast transmission if,
in the case of a retransmission of a radio
station’s broadcast transmission, the trans-
mission is not willfully or repeatedly
retransmitted beyond a radius of 150 miles
from the site of the radio broadcast trans-
mitter;
‘‘(iii) a transmission to or within a
business establishment, that is confined to
the premises of that business establish-
ment, the premises of other business estab-
lishments under common ownership or con-
trol, and the vicinity immediately sur-
rounding such establishment and establish-
ments; or
‘‘(iv) a retransmission that is other-
wise an infringement of section 106(6), if
such transmission is simultaneous with the
primary transmission and is authorized by
the primary transmitter, and the primary
transmitter has been licensed to publicly
perform the sound recording.
‘‘(2) SUBSCRIPTION
TRANSMISSIONS.—In the
case of a subscription transmission other than a
transmission exempt under paragraph (1), the per-
formance of a sound recording publicly by means of
a digital transmission shall be subject to statutory li-
censing in accordance with subsection (f), if—
‘‘(A) at least—
‘‘(i) 3 months have expired since the
first public performance by means of a dig-
ital transmission of the sound recording
under the authority of the copyright owner
in a subscription transmission in the Unit-
ed States, or
‘‘(ii) 4 months have expired since the
first distribution for ultimate sale to con-
sumers in the United States of a phono-
record embodying the sound recording
under the authority of the copyright owner,
whichever period is shorter;
‘‘(B) the transmission is not made for the
purpose of enabling the recipient of the trans-
mission to reproduce the sound recording;
‘‘(C) the transmission does not exceed the
sound recording performance complement; and
‘‘(D) except as provided in section 1002(e),
the transmission of the sound recording is ac-
companied by the information encoded in that
sound recording, if any, by or under the author-
ity of the copyright owner of that sound record-
ing, that identifies the title of the sound record-
ing, the featured recording artist who performs
on the sound recording, and related informa-
tion, including information concerning the un-
derlying musical work and its writer.
‘‘(3) 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 transmission
under section 106(6).
‘‘(B) Nothing in this section annuls or lim-
its in any way—
‘‘(i) the exclusive right to publicly per-
form a musical work, including by means
of a digital transmission, under section
106(4);
‘‘(ii) the exclusive rights to reproduce
and distribute a sound recording or the
musical work embodied therein under para-
graphs (1) and (3) of section 106, includ-
ing by means of a digital phonorecord de-
livery as defined in section 115; or
‘‘(iii) any other rights under any other
provision of section 106, or remedies avail-
able under this title, as such rights or rem-
edies exist either before or after the enact-
ment of the Digital Performance in Sound
Recordings Act of 1995.
‘‘(e) AUTHORITY
FOR NEGOTIATIONS.—Any copy-
right owners of sound recordings and any entities perform-
ing sound recordings affected by this section may nego-
tiate and agree upon the terms and rates of royalty pay-
ments for the performance of such sound recordings 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.
‘‘(f) 
LICENSES
FOR
SUBSCRIPTION
TRANS-
MISSIONS.—
‘‘(1) 
VOLUNTARY
NEGOTIATION
PROCEED-
INGS.—Not later than 30 days after the date of the
enactment of the Digital Performance in Sound Re-
cordings Act of 1995, 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 reason-
able terms and rates of royalty payments for the ac-
tivities specified in subsection (d)(2) during the pe-
riod beginning on January 1, 1996, and ending on
December 31, 2000. Such terms and rates shall dis-
tinguish among the different types of digital trans-
mission services then in operation. Any copyright
owners of sound recordings or any entities perform-
ing sound recordings affected by this section may
submit to the Librarian of Congress licenses cover-
ing such activities with respect to such sound record-
ings. The parties to each such negotiation proceed-
ing shall bear the entire costs thereof.
‘‘(2) COPYRIGHT ARBITRATION ROYALTY PANEL
PROCEEDING.—In the absence of license agreements
negotiated under paragraph (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 estab-
lishing such rates and terms the copyright arbitra-
tion royalty panel may consider the rates for com-
parable types of digital transmission services and
comparable circumstances under voluntary license
agreements negotiated under paragraph (1). The
parties to the proceeding shall bear the entire cost
thereof in such manner and proportion as the arbi-
tration panel shall direct. 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 by entities
performing sound recordings.
‘‘(3) PRIORITY OF VOLUNTARY LICENSE AGREE-
MENTS.—License agreements voluntarily negotiated
at any time between one or more copyright owners
of sound recordings and one or more entities per-
forming sound recordings with respect to activities
specified in subsection (d)(2) shall be given effect in
lieu of any determination by the Librarian of Con-
gress under chapter 8 with respect to the same mat-
ter.
‘‘(4) 
PERIODIC
APPLICATION
OF
PROCE-
DURES.—The procedures set forth in paragraphs (1)
and (2) shall be repeated and concluded, in accord-
ance with regulations that the Librarian of Congress
shall prescribe—
‘‘(A) within the 6-month period beginning
on the date on which a petition is filed by any
copyright owners of sound recordings or any en-
tities performing sound recordings affected by
this section indicating that a new type of digital
transmission service on which sound recordings
are performed is or is about to become oper-
ational, and
‘‘(B) between June 30 and December 31 of
the year 2000 and every fifth year thereafter.
‘‘(5) NOTICE AND ROYALTIES REQUIREMENTS
FOR
SUBSCRIPTION
TRANSMISSIONS.—Any person
who wishes to perform a sound recording publicly by
means of a subscription transmission under this sub-
section may do so without infringing the exclusive
right of the copyright owner of the sound recording
by complying with such notice requirements as the
Register of Copyrights shall prescribe by regulation
and by paying royalty fees in accordance with this
subsection, or, if such royalty fees have not been set,
by agreeing to pay such royalty fees as shall be de-
termined in accordance with this subsection, and any
royalty payments in arrears shall be made on or be-
fore the twentieth day of the month after the month
in which the royalty fees are set.
‘‘(g) PROCEEDS FROM LICENSING OF SUBSCRIPTION
TRANSMISSIONS.—
‘‘(1) PAYMENTS TO RECORDING ARTISTS.—Ex-
cept in the case of a subscription transmission li-
censed in accordance with subsection (f)—
‘‘(A) a featured recording artist who per-
forms on a sound recording that has been li-
censed 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 li-
censed 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) ALLOCATION OF RECEIPTS TO RECORDING
ARTISTS.—The copyright owner of the exclusive
right under section 106(6) to publicly perform a
sound recording by means of a digital transmission
shall allocate to recording artists in the following
manner its receipts from the licensing of subscrip-
tion transmission performances of the sound record-
ing in accordance with subsection (f):
‘‘(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 suc-
cessor entity) to be distributed to nonfeatured
musicians (whether or not members of the
a digital transmission, the copyright owner shall make the
licensed sound recording available under section 106(6) on
similar terms and conditions to all other similarly-situated
entities offering similar types of digital transmission serv-
ices, except that the copyright owner may—
‘‘(1) impose reasonable requirements for credit
worthiness; and
‘‘(2) establish different prices, terms, and con-
ditions to take into account the types of services of-
fered, the duration of the license, the geographic re-
gion, the numbers of subscribers served, and any
other relevant factors.
‘‘(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 pay-
able to copyright owners of musical works for the public
performance of their works. 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 fol-
lowing terms have the following meanings:
‘‘(1) A ‘broadcast transmission’ is a trans-
mission made by a broadcast station licensed as such
by the Federal Communications Commission.
‘‘(2) 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 indi-
viduals to request that particular sound recordings
be performed for reception by the public at large
does not make a service interactive. If an entity of-
fers both interactive and non-interactive services (ei-
ther concurrently or at different times), the non-
interactive component shall not be treated as part of
an interactive service.
‘‘(3) A ‘nonsubscription transmission’ is any
transmission that is not a subscription transmission.
‘‘(4) The ‘sound recording performance com-
plement’ is—
‘‘(A) in the case of an interactive service,
the capability of a member of the public to re-
ceive transmissions, during a 1-week period, of
no more than the complement number; or
‘‘(B) in the case of a transmission other
than in the course of an interactive service, the
transmission consecutively of no more than the
complement number.
‘‘(5) The ‘complement number’ is—
‘‘(A) 2 selections of sound recordings em-
bodied in any one phonorecord distributed in
the United States for ultimate sale to consum-
ers; or
‘‘(B) 3 selections of sound recordings of
performances—
‘‘(i) by the same featured recording
artist, or
‘‘(ii) 
embodied 
in 
any 
set 
of
phonorecords or compilation of sound re-
cordings marketed together as a unit for
ultimate sale to consumers.
‘‘(6) A ‘subscription transmission’ is a trans-
mission 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 re-
cipient to receive the transmission or a package of
transmissions that includes the transmission.’’.
SEC. 4. SCOPE OF EXCLUSIVE RIGHTS IN NONDRAMATIC
MUSICAL 
WORKS: 
COMPULSORY 
LICENSE
FOR 
MAKING 
AND 
DISTRIBUTING
PHONORECORDS.
Section 115 of title 17, United State Code, is
amended—
(1) by striking ‘‘clause’’ each place it appears
and inserting ‘‘paragraph’’;
(2) in subsection (a)(1) by inserting before the
period at the end of the second sentence ‘‘, including
by means of a digital phonorecord delivery’’;
(3) in the second sentence of subsection (c)(2),
by inserting ‘‘and except as provided in paragraph
(3),’’ after ‘‘For this purpose,’’;
(4) in subsection (c) by redesignating para-
graphs (3), (4), and (5) as paragraphs (5), (6), and
(7), respectively, and by inserting after paragraph
(2) the following:
‘‘(3)(A) A compulsory license under this section
includes the right of the maker of a phonorecord of
a nondramatic musical work under subsection (a)(1)
to distribute or authorize distribution of the sound
recording embodied in such phonorecord by means of
a digital transmission which constitutes a digital
phonorecord delivery. Such transmission may also
constitute a public performance of a nondramatic
musical work under section 106(4) and of a sound
recording under section 106(6).
‘‘(B)(i) For every digital phonorecord delivery
by or under the authority of the compulsory licensee
which is identifiable, the royalty payable by the com-
pulsory licensee shall be the royalty prescribed under
paragraph (2) and chapter 8 of this title.
‘‘(ii) For every digital phonorecord delivery by
or under the authority of the compulsory licensee
which is not identifiable but which can be reasonably
expected to result from a digital transmission of a
sound recording, the royalty payable by the compul-
sory licensee shall be the royalty prescribed under
paragraph (4).
‘‘(iii) The Librarian of Congress shall prescribe
regulations describing the types of digital trans-
missions of a sound recording which are described in
clauses (i) and (ii). Such regulations—
‘‘(I) shall take into account any efforts by
transmitters to avoid or evade the reasonable
use of available techniques to identify deliveries
to transmission recipients of phonorecords of
sound recordings, and
‘‘(II) may consider the nature of the digi-
tal transmission service, its marketing practices,
technical characteristics, or other indicia to de-
termine whether it is described in clause (ii).
‘‘(C) Independent of any right of public per-
formance under section 106(4), the copyright owner
of a nondramatic musical work embodied in a sound
recording has the right to receive royalty payments
at the rates prescribed under this subsection when
the digital transmission of that sound recording con-
stitutes a digital phonorecord delivery. Unless au-
thorized by the copyright owner of the nondramatic
musical work or by any person who has obtained a
compulsory license under this section, such a digital
transmission, by whomever made, shall be actionable
by the copyright owner in the nondramatic musical
work as an act of infringement, except that no such
cause of action may be brought against a copyright
owner of a sound recording unless it authorized the
digital phonorecord delivery. Any such cause of ac-
tion shall be in addition to remedies available to the
copyright owner of the musical work under section
106(4) and the copyright owner of the sound record-
ing with respect to digital phonorecord deliveries
under section 106(6).
‘‘(D) Nothing in section 1008 shall be con-
strued to prevent the exercise of the rights and rem-
edies allowed by this paragraph, paragraph (7), and
chapter 5 in the event of a digital phonorecord deliv-
ery, 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 me-
dium, an analog recording device, or an analog re-
cording medium, or against a consumer, based on
the actions described in such section.
‘‘(E) Nothing in this section annuls or limits in
any way—
‘‘(i) the exclusive right to publicly perform
a sound recording or the musical work em-
bodied therein, including by means of a digital
transmission, 
under 
sections 
106(4) 
and
106(6),
‘‘(ii) except for the compulsory licensing
under the conditions specified by this section,
the exclusive rights to reproduce and distribute
the sound recording and the musical work em-
bodied therein under sections 106(1) and
106(3), including by means of a digital phono-
record delivery, or
‘‘(iii) any other rights under any other pro-
vision of section 106, or remedies available
under this title, as such rights or remedies exist
either before or after the enactment of the Digi-
tal Performance in Sound Recordings Act of
1995.
‘‘(4) LICENSES FOR CERTAIN DIGITAL PHONO-
RECORD DELIVERIES.—
‘‘(A) Notwithstanding any provision of the
antitrust laws, for the purposes of this para-
graph any copyright owners of nondramatic
musical works and any persons entitled to ob-
tain a compulsory license under subsection
(a)(1) may negotiate and agree upon the terms
and rates of royalty payments for any digital
phonorecord deliveries described in paragraph
(3)(B)(ii) and the proportionate division of fees
paid among copyright owners, and may des-
ignate common agents to negotiate, agree to,
pay, or receive such royalty payments.
‘‘(B) Not later than 30 days after the date
of the enactment of the Digital Performance
Right in Sound Recordings Act of 1995, the Li-
brarian of Congress shall cause notice to be
published in the Federal Register of the initi-
ation of voluntary negotiations for the purpose
of determining reasonable terms and rates of
royalty payments for the digital phonorecord
deliveries described in clause (3)(B)(ii) during
the period beginning on January 1, 1996, and
ending on December 31, 1999. Such terms and
rates shall distinguish among the different
types of digital phonorecord delivery services
then in operation. Any copyright owners of
nondramatic musical works and any persons en-
titled to obtain a compulsory license under sub-
section (a)(1) may submit to the Librarian of
Congress licenses covering activities with re-
spect to such works. The parties to each such
negotiation proceeding shall bear the entire
costs thereof.
‘‘(C) In the absence of license agreements
negotiated under subparagraph (B), the Librar-
ian 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 (D), shall be binding on all copy-
right owners of nondramatic musical works and
persons entitled to obtain a compulsory license
under subsection (a)(1). In establishing such
rates and terms the copyright arbitration roy-
alty panel may consider the rates for com-
parable types of digital phonorecord delivery
services and comparable circumstances under
voluntary license agreements negotiated under
subparagraph (B). The parties to the proceed-
ing shall bear the entire cost thereof in such
manner and proportion as the arbitration panel
shall direct. The Librarian of Congress shall
also establish requirements by which copyright
owners shall receive reasonable notice of the use
of their works under this subsection, and under
which records of such use shall be kept and
made available by persons entitled to obtain a
compulsory license under subsection (a)(1) and
authorized to make digital phonorecord deliv-
eries.
‘‘(D) License agreements voluntarily nego-
tiated at any time between one or more copy-
right owners of nondramatic musical works and
one or more persons entitled to obtain a com-
pulsory license under subsection (a)(1) shall be
given effect in lieu of any determination by the
Librarian of Congress under chapter 8 that
would otherwise apply.
‘‘(E) The procedures set forth in subpara-
graphs (B) and (C) shall be repeated and con-
cluded, in accordance with regulations that the
Librarian of Congress shall prescribe—
‘‘(i) within the 6-month period begin-
ning on the date on which a petition is
filed 
by 
any 
copyright 
owners 
of
nondramatic musical works or any person
entitled to obtain a compulsory license
under subsection (a)(1) affected by this
section indicating that a new type of digi-
tal phonorecord delivery service is or is
about to become operational, and
‘‘(ii) between June 30 and December
31 of the year 1999 and each fifth year
thereafter.’’;
(5) by inserting after the first sentence in sec-
tion (c)(6) (as so redesignated) the following: ‘‘In
the case of digital phonorecord deliveries described
in paragraph (3)(B)(ii) for which royalty fees have
not been set, the compulsory licensee shall pay, ef-
fective as of the initial delivery, such royalty fees as
shall later be determined in accordance with sub-
section (c)(4), and any royalty payments in arrears
shall be made on or before the twentieth day of the
month after the month in which the royalty fees are
set.’’; and
(6) by adding after subsection (c) the following:
‘‘(d) DEFINITION.—As used in this section, the term
‘digital phonorecord delivery’ means each individual deliv-
ery of a phonorecord by digital transmission of a sound
recording which—
‘‘(1) results in an identifiable reproduction by
or for any transmission recipient of such sound re-
cording, or
‘‘(2) can be reasonably expected to result in a re-
production by or for any transmission recipient of
such sound recording even though such delivery is
not identifiable,
regardless of whether the digital transmission is also a
public performance of the sound recording or any
nondramatic musical work embodied therein. None of the
exempt transmissions described in section 114(d)(1) shall
be considered a digital phonorecord delivery.’’.
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 a
digital format. A retransmission in a nondigital for-
mat of a digital transmission is not itself a digital
transmission.’’
(b) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND-
ARY TRANSMISSIONS.—Section 111(c)(1) of title 17,
United States Code, is amended in the first sentence by
striking ‘‘The’’ and inserting ‘‘Except in the case of a per-
formance of a sound recording in the course of a digital
transmission, the’’.
(c) LIMITATIONS ON EXCLUSIVE RIGHTS: SECOND-
ARY TRANSMISSIONS OF SUPERSTATIONS AND NETWORK
STATIONS
FOR
PRIVATE
HOME
VIEWING.—Section
119(a)(1) of title 17, United States Code, is amended by
striking ‘‘Subject to’’ and inserting ‘‘Except in the case
of a performance of a sound recording in the course of
a digital transmission, and subject to’’.
(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’’ and inserting ‘‘114, 115,’’.
(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 com-
pulsory license under section 114(d), any person en-
titled to a compulsory license under section 115,’’.
(3) Section 802(g) of title 17, United States
Code, is amended in the third sentence by striking
‘‘115, 116, 118, 119, or 1003’’ and inserting ‘‘114,
115, 116, 118, 119, and 1003’’.
(4) Section 802(h)(2) of title 17, United States
Code, is amended by inserting ‘‘114,’’ after ‘‘111,’’.
SEC. 6. EFFECTIVE DATE.
This Act, and the amendments made by this Act,
shall take effect January 1, 1996, except that the provi-
sions of sections 114(e) and 114(f) of title 17, United
States Code, as added by section 3 of this Act, shall take
effect on the date of the enactment of this Act.
Æ
HR 1506 IH——2