To nullify the March 2, 2007, determination of the Copyright Royalty Judges with respect to webcasting, to modify the basis for making such a determination, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Internet Radio Equality Act''.

SEC. 2. NULLIFICATION OF DECISION OF COPYRIGHT ROYALTY JUDGES.

    The March 2, 2007, Determination of Rates and Terms of the United 
States Copyright Royalty Judges regarding rates and terms for the 
digital performance of sound recordings and ephemeral recordings, 
including that determination as modified by the April 17, 2007, Order 
Denying Motions for Rehearing and any subsequent modification to that 
determination by the Copyright Royalty Judges that is published in the 
Federal Register, is not effective, and shall be deemed never to have 
been effective.

SEC. 3. COMPUTATION OF ROYALTY FEES FOR COMMERCIAL INTERNET RADIO 
              SERVICES OFFERING DIGITAL PERFORMANCES OF SOUND 
              RECORDINGS.

    (a) Standard for Determining Rates and Terms.--Section 114(f)(2)(B) 
of title 17, United States Code, is amended by striking ``Such rates 
and terms shall distinguish'' and all that follows through the end of 
clause (ii) and inserting the following: ``The Copyright Royalty Judges 
shall establish rates and terms in accordance with the objectives set 
forth in section 801(b)(1). Such rates and terms may include a minimum 
annual royalty of not more than $500 for each provider of services that 
are subject to such rates and terms, which shall be the only minimum 
royalty fee and shall be assessed only once annually to that 
provider.''.
    (b) Transition Rule.--Except for services covered by section 118 of 
title 17, United States Code, each provider of digital audio 
transmissions that otherwise would have been subject to the rates and 
terms of the determination of the Copyright Royalty Judges made 
ineffective by section 2 of this Act shall instead pay royalties for 
each year of the 5-year period beginning on January 1, 2006, at one of 
the following rates, as selected by the provider for that year:
            (1) 0.33 cents per hour of sound recordings transmitted to 
        a single listener.
            (2) 7.5 percent of the revenues received by the provider 
        during that year that are directly related to the provider's 
        digital transmissions of sound recordings.

SEC. 4. COMPUTATION OF ROYALTY FEES FOR NONCOMMERCIAL STATIONS OFFERING 
              DIGITAL PERFORMANCES OF SOUND RECORDINGS.

    (a) Amendments to Section 118 of Title 17, United States Code.--
Section 118 of title 17, United States Code, is amended--
            (1) in subsection (b), in the matter preceding paragraph 
        (1), by striking ``and published pictorial'' and inserting ``, 
        sound recordings, and published pictorial'';
            (2) in subsection (c)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``and published pictorial'' and inserting ``, 
                sound recordings, and published pictorial''; and
                    (B) in paragraph (1), by inserting ``or nonprofit 
                institution or organization'' after ``broadcast 
                station''; and
            (3) in subsection (f), by striking ``paragraph (2)'' and 
        inserting ``paragraph (1) or (2)''.
    (b) Transition Rule.--For each calendar year (or portion thereof) 
beginning after December 31, 2004, until an applicable voluntary 
license agreement is filed with the Copyright Royalty Judges pursuant 
to section 118 of title 17, United States Code (as amended by 
subsection (a) of this section) or an applicable determination is 
issued by the Copyright Royalty Judges pursuant to section 118 of such 
title (as so amended), the annual royalty that a public broadcasting 
entity shall pay to owners of copyrights in sound recordings for the 
uses provided under section 118(c) of such title (as so amended) shall 
be an amount equal to the 1.5 times the total fees paid by that entity 
(or in the case of a group of related entities, the fees paid by such 
group) pursuant to section 114(f)(2) of title 17, United States Code, 
for such uses during the calendar year ending December 31, 2004.

SEC. 5. REPORT BY THE NATIONAL TELECOMMUNICATIONS AND INFORMATION 
              ADMINISTRATION.

    Upon the publication in the Federal Register under section 
803(b)(1) of title 17, United States Code, of the commencement of 
proceedings of the Copyright Royalty Judges under section 114(f) or 118 
of title 17, United States Code, to determine rates and terms for 
Internet radio service providers under the statutory license provided 
under section 114(d)(2) or 118 (as the case may be), the Assistant 
Secretary of Commerce for Communications and Information, after 
consulting with representatives of copyright owners, nonprofit 
educational institutions, and commercial and noncommercial Internet 
radio providers, shall submit to the Copyright Royalty Judges a report 
on the competitiveness of the Internet radio marketplace and the effect 
on Internet radio providers of proposed rate determinations in the 
proceedings. The Assistant Secretary shall submit the report to the 
Copyright Royalty Judges in a timely manner before the conclusion of 
the proceedings.

SEC. 6. REPORT BY THE FEDERAL COMMUNICATIONS COMMISSION.

    Upon the publication in the Federal Register under section 
803(b)(1) of title 17, United States Code, of the commencement of 
proceedings of the Copyright Royalty Judges under section 114(f) or 118 
of title 17, United States Code, to determine rates and terms for 
Internet radio service providers under the statutory license provided 
under section 114(d)(2) or 118 (as the case may be), the Federal 
Communications Commission shall submit to the Copyright Royalty Judges 
a report on the effect of proposed rate determinations in the 
proceedings on localism, diversity, and competition in the Internet 
radio marketplace. The report shall include the Commission's views on 
the effects of the proposed rate determinations on--
            (1) localism, diversity, and competition in rural areas;
            (2) diversity of programming, including foreign language 
        programming; and
            (3) competitive barriers to entry into the Internet radio 
        market.
The Commission shall submit the report to the Copyright Royalty Judges 
in a timely manner before the conclusion of the proceedings.

SEC. 7. REPORT BY CORPORATION FOR PUBLIC BROADCASTING.

    Upon the publication in the Federal Register under section 
803(b)(1) of title 17, United States Code, of the commencement of 
proceedings of the Copyright Royalty Judges under section 114(f) or 118 
of title 17, United States Code, to determine rates and terms for 
Internet radio service providers under the statutory license provided 
under section 114(d)(2) or 118 (as the case may be), Corporation for 
Public Broadcasting, in consultation with public radio licensees or 
permittees, or their designated representatives, shall submit to the 
Congress a report on the effect of the proposed rate determinations on 
such licensees and permittees. The Corporation shall submit the report 
to the Copyright Royalty Judges in a timely manner before the 
conclusion of the proceedings.

Summary: Internet Radio Equality Act - Declares to be ineffective: (1) the March 2, 2007, Determination of Rates and Terms of the U.S. Copyright Royalty Judges regarding rates and terms for the digital performance of sound recordings and ephemeral recordings; (2) the April 17, 2007, modification of that determination by an order denying motions for rehearing; and (3) any subsequent modification by the Copyright Royalty Judges published in the Federal Register.

Replaces standards for determining reasonable rates and terms of royalty payments for public performances of sound recordings by means of eligible nonsubscription transmission services and new subscription services with a requirement that such rates and terms be established in accordance with stated objectives of the Copyright Royalty Judges. (Currently, rates and terms are required to distinguish among different types of eligible nonsubscription transmission services and include a minimum fee for each type.) Allows a minimum annual royalty for each provider subject to such rates and terms. Provides a transition rule for payment of royalties by providers of digital audio transmissions that would have been subject to the rates and terms nullified by this Act.

Revises royalty payment provisions concerning the use of certain works in noncommercial broadcasting to include: (1) sound recordings; and (2) performance or display by nonprofit organizations and public broadcasting entities. Provides a transition rule for the payment by a public broadcasting entity to owners of copyrights in sound recordings.

Requires a report to the Copyright Royalty Judges by the Assistant Secretary of Commerce for Communications and Information on the competitiveness of the Internet radio marketplace and the effect on Internet radio providers of proposed rate determinations in proceedings concerning: (1) public performances of sound recordings by means of the services described above; or (2) the use of certain works in noncommercial broadcasting.

Requires the Federal Communications Commission (FCC), upon publication of the commencement of proceedings of the Copyright Royalty Judges to determine rates and terms under the statutory license described in this Act, to report on the effect of such proposals on localism, diversity, and competition in the Internet radio marketplace (including in rural areas). Requires a report to Congress and the Copyright Royalty Judges by the Corporation for Public Broadcasting (CPB) on the effect of such proposals upon public broadcasting licensees and permittees.