I 
109TH CONGRESS 
2D SESSION 
H. R. 5553 
To amend section 115 of title 17, United States Code, to provide for licensing 
of digital delivery of musical works, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2006 
Mr. SMITH of Texas (for himself and Mr. BERMAN) introduced the following 
bill; which was referred to the Committee on the Judiciary 
A BILL 
To amend section 115 of title 17, United States Code, to 
provide for licensing of digital delivery of musical works, 
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 ‘‘Section 115 Reform 
Act of 2006’’. 
SEC. 2. STATUTORY LICENSES FOR DIGITAL DELIVERY OF 
MUSICAL WORKS. 
Section 115 of title 17, United States Code, is 
amended by adding at the end the following new sub-
section: 
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‘‘(e) LICENSES
FOR DIGITAL USES
OF MUSICAL 
WORKS.— 
‘‘(1) IN GENERAL.—The compulsory license for 
digital phonorecord deliveries and hybrid offerings 
shall be governed by this subsection, in addition to 
subsections (a), (c), and (d). The license under this 
subsection covers— 
‘‘(A) the making and distribution of gen-
eral and incidental digital phonorecord deliv-
eries in the form of full downloads, limited 
downloads, interactive streams, and any other 
form constituting a digital phonorecord delivery 
or hybrid offering; and 
‘‘(B) all reproduction and distribution 
rights necessary to engage in activities de-
scribed in subparagraph (A), solely for the pur-
pose of engaging in such activities under the li-
cense, including— 
‘‘(i) the making of reproductions by 
and for end users; 
‘‘(ii) reproductions made on servers 
under the authority of the licensee; and 
‘‘(iii) incidental reproductions made 
under the authority of the license in the 
normal course of engaging in activities de-
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scribed in subparagraph (A), including 
cached, network, and RAM buffer repro-
ductions. 
‘‘(2) BLANKET LICENSES.—A person may ob-
tain a compulsory license to engage in activities sub-
ject to this subsection only from a designated agent 
under paragraph (4) and only if the person is a dig-
ital music provider. A person may engage in activi-
ties subject to this subsection under authority of a 
compulsory license only— 
‘‘(A) if the license was obtained by a dig-
ital music provider; and 
‘‘(B) with respect to end users with which 
the digital music provider meets the require-
ments of paragraph (14)(C). 
‘‘(3) ROYALTY-FREE LICENSE.— 
‘‘(A) IN GENERAL.—A compulsory license 
shall be available for the making of server and 
incidental reproductions to facilitate noninter-
active streaming. 
‘‘(B) ACTIVITIES
COVERED.—Each des-
ignated agent shall grant a license under this 
subsection for the making of server and inci-
dental reproductions to facilitate noninteractive 
streaming at a royalty-free rate. The designated 
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agent may charge only a filing fee of not more 
than $30 to administer the issuance of the li-
cense. The license shall cover reproductions 
made on servers under authority of the licensee 
and incidental reproductions made under the 
authority of the licensee in the course of the 
noninteractive streaming, including cached, net-
work, and RAM buffer reproductions, to the ex-
tent reasonably necessary for, and solely for the 
purpose of, engaging in noninteractive stream-
ing under the license in a technologically rea-
sonable and efficient matter. 
‘‘(C) EXCLUDED ACTIVITIES.—The license 
under subparagraph (A) does not extend to any 
server or incidental reproductions used to en-
able a streaming service (or any other type of 
service) that takes affirmative steps to author-
ize, enable, cause, or induce the making of re-
productions of musical works by or for end 
users that are accessible by those end users for 
future listening, unless a valid license for repro-
duction and distribution rights has otherwise 
been obtained by the streaming or other type of 
service permitting the server or incidental re-
productions to be used for that activity. 
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‘‘(4) APPLICATIONS FOR LICENSES.—Any dig-
ital music provider seeking a license under this sub-
section may apply to a designated agent for the li-
cense, identifying in the application each type of 
qualifying activity for which the license is sought. 
Any digital music provider that has a license under 
this subsection and seeks to engage in any activity 
covered by this subsection that is not identified in 
the license may engage in that activity only upon fil-
ing a new application identifying the additional ac-
tivity. 
‘‘(5) LICENSES.—All activities specified in an 
application filed under paragraph (4) for which a li-
cense is available under this subsection shall be li-
censed by the designated agent. The license shall be 
effective, upon the filing of the application, for all 
copyrighted nondramatic musical works (or shares of 
such musical works) represented by the designated 
agent. 
‘‘(6) RETROACTIVE ROYALTY PAYMENTS.— 
‘‘(A) RETROACTIVE PAYMENTS.—A digital 
music provider that has obtained a license from 
a designated agent under this subsection for— 
‘‘(i) the making and distribution of 
limited downloads, or 
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‘‘(ii) the making or distribution of 
interactive streams, 
may report to the designated agent activity au-
thorized by the license that the digital music 
provider engaged in during the period beginning 
January 1, 2001, and ending on January 1, 
2008, and pay to the designated agent royalties 
applicable to that activity. Such reporting and 
payments shall be made not later than March 
1, 2008, in accordance with the regulations 
issued under paragraph (10) regarding report-
ing and payments. 
‘‘(B) LIMITATION ON LIABILITY.—A dig-
ital music provider that reports activity and 
makes payments under this paragraph for an 
activity under this paragraph shall not be sub-
ject to an action for copyright infringement al-
leging violation of reproduction or distribution 
rights to the extent such action is based on ac-
tivity so reported for which all payments due 
have been made. 
‘‘(C) EFFECT
ON
ROYALTY-FREE
LI-
CENSE.—A digital music provider that complies 
with the requirements of this paragraph is enti-
tled to a royalty-free license under paragraph 
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