120 
amount of time or number of times it may be 
accessed. 
‘‘(25) QUALIFIED AUDITOR.—The term ‘quali-
fied auditor’ means an independent, certified public 
accountant with experience performing music royalty 
audits. 
‘‘(26) RECORD
COMPANY.—The term ‘record 
company’ means an entity that invests in, produces, 
and markets sound recordings of musical works, and 
distributes such sound recordings for remuneration 
through multiple sales channels, including a cor-
porate affiliate of such an entity engaged in distribu-
tion of sound recordings. 
‘‘(27) REPORT OF USAGE.—The term ‘report of 
usage’ means a report reflecting an entity’s usage of 
musical works in covered activities described in sub-
section (d)(4)(A). 
‘‘(28) REQUIRED
MATCHING
EFFORTS.—The 
term ‘required matching efforts’ means efforts to 
identify and locate copyright owners of musical 
works as described in subsection (d)(10)(B)(i). 
‘‘(29) SERVICE.—The term ‘service’, as used in 
relation to covered activities, means any site, facility, 
or offering by or through which sound recordings of 
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musical works are digitally transmitted to members 
of the public. 
‘‘(30) SHARE.—The term ‘share’, as applied to 
a musical work, means a fractional ownership inter-
est in such work. 
‘‘(31) SIGNIFICANT NONBLANKET LICENSEE.— 
The term ‘significant nonblanket licensee’— 
‘‘(A) means an entity, including a group of 
entities under common ownership or control 
that, acting under the authority of one or more 
voluntary licenses or individual download li-
censes, offers a service engaged in covered ac-
tivities, and such entity or group of entities— 
‘‘(i) is not currently operating under a 
blanket license and is not obligated to pro-
vide reports of usage reflecting covered ac-
tivities under subsection (d)(4)(A); 
‘‘(ii) has a direct contractual, sub-
scription, or other economic relationship 
with end users of the service or, if no such 
relationship with end users exists, exercises 
direct control over the provision of the 
service to end users; and 
‘‘(iii) either— 
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122 
‘‘(I) on any day in a calendar 
month, makes more than 5,000 dif-
ferent sound recordings of musical 
works available through such service; 
or 
‘‘(II) derives revenue or other 
consideration in connection with such 
covered 
activities 
greater 
than 
$50,000 in a calendar month, or total 
revenue or other consideration greater 
than $500,000 during the preceding 
12 calendar months; and 
‘‘(B) does not include— 
‘‘(i) an entity whose covered activity 
consists solely of free-to-the-user streams 
of segments of sound recordings of musical 
works that do not exceed 90 seconds in 
length, are offered only to facilitate a li-
censed use of musical works that is not a 
covered activity, and have no revenue di-
rectly attributable to such streams consti-
tuting the covered activity; or 
‘‘(ii) a ‘public broadcasting entity’ as 
defined in section 118(f). 
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123 
‘‘(32) SONGWRITER.—The term ‘songwriter’ 
means the author of all or part of a musical work, 
including a composer or lyricist. 
‘‘(33) STATE.—The term ‘State’ means each 
State of the United States, the District of Columbia, 
and each territory or possession of the United 
States. 
‘‘(34) UNCLAIMED ACCRUED ROYALTIES.—The 
term ‘unclaimed accrued royalties’ means accrued 
royalties eligible for distribution under subsection 
(d)(3)(J). 
‘‘(35) UNMATCHED.—The term ‘unmatched’, as 
applied to a musical work (or share thereof), means 
that the copyright owner of such work (or share 
thereof) has not been identified or located. 
‘‘(36) VOLUNTARY
LICENSE.—The term ‘vol-
untary license’ means a license for use of a musical 
work (or share thereof) other than a compulsory li-
cense obtained under this section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS TO 
SECTION 801.—Section 801(b) of title 17, United States 
Code, is amended— 
(1) by redesignating paragraph (8) as para-
graph (9); and 
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124 
(2) by inserting after paragraph (7) the fol-
lowing new paragraph: 
‘‘(8) To determine the administrative assess-
ment to be paid by digital music providers under 
section 115(d). The provisions of section 115(d) 
shall apply to the conduct of proceedings by the 
Copyright Royalty Judges under section 115(d) and 
not the procedures described in this section, or sec-
tion 803, 804, or 805.’’. 
(c) EFFECTIVE DATE OF AMENDED RATE SETTING 
STANDARD.—The amendments made by subsections 
(a)(3)(D) and (b)(1) shall apply to any proceeding before 
the Copyright Royalty Judges that is pending on, or com-
menced on or after, the date of the enactment of this Act. 
(d) TECHNICAL AND CONFORMING AMENDMENTS TO 
TITLE 37, PART 385 OF THE CODE OF FEDERAL REGU-
LATIONS.—Within 9 months after the date of the enact-
ment of this Act, the Copyright Royalty Judges shall 
amend the regulations for section 115 in part 385 of title 
37, Code of Federal Regulations to conform the definitions 
used in such part to the definitions of the same terms de-
scribed in section 115(e) of title 17, United States Code, 
as amended by subsection (a). In so doing, the Copyright 
Royalty Judges shall make adjustments to the language 
of the regulations as necessary to achieve the same pur-
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125 
pose and effect as the original regulations with respect to 
the rates and terms previously adopted by the Copyright 
Royalty Judges. 
SEC. 103. AMENDMENTS TO SECTION 114. 
(a) UNIFORM RATE STANDARD.—Section 114(f) of 
title 17, United States Code, is amended— 
(1) by striking paragraphs (1) and (2) and in-
serting the following: 
‘‘(1)(A) Proceedings under chapter 8 shall de-
termine reasonable rates and terms of royalty pay-
ments for transmissions subject to statutory licens-
ing under 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 com-
menced pursuant to subparagraph (A) or (B) of sec-
tion 804(b)(3), as the case may be, or such other pe-
riod 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 paragraph (2), be binding on all 
copyright owners of sound recordings and entities 
performing sound recordings affected by this para-
graph during the 5-year period specified in subpara-
graph (A), or such other period as the parties may 
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agree. Such rates and terms shall distinguish among 
the different types of services then in operation and 
shall include a minimum fee for each such type of 
service, such differences to be based on criteria in-
cluding 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. 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— 
‘‘(i) shall base their decision on economic, 
competitive, and programming information pre-
sented by the parties, including— 
‘‘(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 the copyright owner’s sound record-
ings; and 
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‘‘(II) the relative roles of the copy-
right owner and the transmitting entity in 
the copyrighted work and the service made 
available to the public with respect to rel-
ative creative contribution, technological 
contribution, capital investment, cost, and 
risk; and 
‘‘(ii) may consider the rates and terms for 
comparable types of audio transmission services 
and comparable circumstances under voluntary 
license agreements. 
‘‘(C) The procedures under subparagraphs (A) 
and (B) shall also be initiated pursuant to a petition 
filed by any sound recording copyright owner 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 eligible nonsubscrip-
tion services and new subscription services, or pre-
existing services, as the case may be, most recently 
determined under subparagraph (A) or (B) and 
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128 
chapter 8 expire, or such other period as the parties 
may agree.’’; and 
(2) by redesignating paragraphs (3), (4), and 
(5) as paragraphs (2), (3), and (4), respectively. 
(b) REPEAL.—Subsection (i) of section 114 of title 
17, United States Code, is repealed. 
(c) USE IN MUSICAL WORK PROCEEDINGS.— 
(1) IN GENERAL.—License fees payable for the 
public performance of sound recordings under sec-
tion 106(6) of title 17, United States Code, shall not 
be taken into account in any administrative, judicial, 
or other governmental proceeding to set or adjust 
the royalties payable to musical work copyright own-
ers for the public performance of their works except 
in such a proceeding to set or adjust royalties for 
the public performance of musical works by means 
of a digital audio transmission other than a trans-
mission by a broadcaster, and may be taken into ac-
count only with respect to such digital audio trans-
mission. 
(2) DEFINITIONS.—In this subsection: 
(A) TRANSMISSION BY A BROADCASTER.— 
A ‘‘transmission by a broadcaster’’ means a 
nonsubscription digital transmission made by a 
terrestrial broadcast station on its own behalf, 
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or on the behalf of a terrestrial broadcast sta-
tion under common ownership or control, that 
is not part of an interactive service or a music- 
intensive service comprising the transmission of 
sound recordings customized for or customiz-
able by recipients or service users. 
(B) TERRESTRIAL BROADCAST STATION.— 
A ‘‘terrestrial broadcast station’’ means a ter-
restrial, over-the-air radio or television broad-
cast station, licensed as such by the Federal 
Communications Commission, including an FM 
Translator as defined in section 74.1231 of title 
47, Code of Federal Regulations, and whose 
primary business activities are comprised of, 
and revenues are generated through, terrestrial, 
over-the-air broadcast transmissions, or the si-
multaneous or substantially-simultaneous digital 
retransmission by the terrestrial, over-the-air 
broadcast station of its over-the-air broadcast 
transmissions. 
(d) RULE
OF CONSTRUCTION.—Subsection (c)(2) 
shall not be given effect in interpreting provisions of title 
17, United States Code. 
(e) USE IN SOUND RECORDING PROCEEDINGS.—The 
repeal of section 114(i) of title 17, United States Code, 
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by subsection (b) shall not be taken into account in any 
proceeding to set or adjust the rates and fees payable for 
the use of sound recordings under section 112(e) or sec-
tion 114(f) of such title that is pending on, or commenced 
on or after, the date of the enactment of this Act. 
(f) DECISIONS AND PRECEDENTS NOT AFFECTED.— 
The repeal of section 114(i) of title 17, United States 
Code, by subsection (b) shall not have any effect upon the 
decisions, or the precedents established or relied upon, in 
any proceeding to set or adjust the rates and fees payable 
for the use of sound recordings under section 112(e) or 
section 114(f) of such title before the date of the enact-
ment of this Act. 
(g) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) SECTION 114.—Section 114(f) of title 17, 
United States Code, as amended by subsection (a), 
is further amended in paragraph (4)(C), as so redes-
ignated, by striking ‘‘under paragraph (4)’’ and in-
serting ‘‘under paragraph (3)’’. 
(2) SECTION
801.—Section 801(b)(1) of title 
17, United States Code, is amended by striking 
‘‘The rates applicable’’ and all that follows though 
‘‘prevailing industry practices’’. 
(3) SECTION 804.—Section 804(b)(3)(C) of title 
17, United States Code, is amended— 
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