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‘‘(B) the settlement of disputes relating to
the collection and calculation of the royalties;
and
‘‘(C) the licensing and enforcement of rights
with respect to the making of ephemeral record-
ings and performances subject to licensing under
section 112 and this section, including those in-
curred in participating in negotiations or arbi-
tration proceedings under section 112 and this
section, except that all costs incurred relating to
the section 112 ephemeral recordings right may
only be deducted from the royalties received pur-
suant to section 112.
‘‘(4) Notwithstanding paragraph (3), any des-
ignated agent designated to distribute receipts from
the licensing of transmissions in accordance with sub-
section (f) may deduct from any of its receipts, prior
to the distribution of such receipts, the reasonable
costs identified in paragraph (3) of such agent in-
curred after November 1, 1995, with respect to such
copyright owners and performers who have entered
with such agent a contractual relationship that speci-
fies that such costs may be deducted from such royalty
receipts.’’.
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(c) DIRECT PAYMENT TO ARTISTS.—Section 114(g)(2)
of title 17, United States Code, is amended to read as fol-
lows:
‘‘(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 per-
form a sound recording by means of a digital
audio transmission.
‘‘(B) 21⁄2 percent of the receipts shall be de-
posited 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 Amer-
ican Federation of Musicians) who have per-
formed on sound recordings.
‘‘(C) 21⁄2 percent of the receipts shall be de-
posited in an escrow account managed by an
independent administrator jointly appointed by
copyright owners of sound recordings and the
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American Federation of Television and Radio
Artists (or any successor entity) to be distributed
to nonfeatured vocalists (whether or not members
of the American Federation of Television and
Radio Artists) who have performed on sound re-
cordings.
‘‘(D) 45 percent of the receipts shall be
paid, on a per sound recording basis, to the re-
cording artist or artists featured on such sound
recording (or the persons conveying rights in the
artists’ performance in the sound recordings).’’.
SEC. 6. REPORT TO CONGRESS.
By not later than June 1, 2004, the Comptroller Gen-
eral of the United States, in consultation with the Register
of Copyrights, shall conduct and submit to the Committee
on the Judiciary of the House of Representatives and the
Committee on the Judiciary of the Senate a study con-
cerning the economic arrangements among small commer-
cial webcasters covered by agreements entered into pursuant
to section 114(f)(5)(A) of title 17, United States Code, as
added by section 4 of this Act, and third parties, and the
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effect of those arrangements on royalty fees payable on a
percentage of revenue or expense basis.
Attest:
Secretary.