American Music Fairness Act
Bill: S.4932 | Sponsor: Sen. Padilla, Alex (D-CA)
Policy area: Commerce

Summary:
American Music Fairness Act
This bill establishes that the copyright holder of a sound recording shall have the exclusive right to perform the sound recording through an audio transmission and addresses other related issues. (Currently, the public performance right only covers performances through a digital audio transmission in certain instances, which means that nonsubscription terrestrial radio stations generally do not have to secure a license to publicly perform a copyright-protected sound recording.)
Under the bill, a nonsubscription broadcast transmission must have a license to publicly perform such sound recordings. The Copyright Royalty Board must periodically determine the royalty rates for such a license. When determining the rates, the board must base its decision on certain information presented by the parties, including the radio stations' effect on other streams of revenue related to the sound recordings.
Terrestrial broadcast stations (and the owners of such stations) that fall below certain revenue thresholds may pay certain flat fees, instead of the board-established rate, for a license to publicly perform copyright-protected sound recordings.

To amend title 17, United States Code, to provide fair treatment of 
  radio stations and artists for the use of sound recordings, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``American Music 
Fairness Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Equitable treatment for terrestrial broadcasts and internet 
                            services.
Sec. 3. Timing of proceedings under sections 112(e) and 114(f).
Sec. 4. Special protection for small broadcasters.
Sec. 5. Distribution of certain royalties.
Sec. 6. No harmful effects on songwriters.
Sec. 7. Value of promotion taken into account.

SEC. 2. EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS AND INTERNET 
              SERVICES.

    (a) Performance Right Applicable to Audio Transmissions 
Generally.--Paragraph (6) of section 106 of title 17, United States 
Code, is amended to read as follows:
            ``(6) in the case of sound recordings, to perform the 
        copyrighted work publicly by means of an audio transmission.''.
    (b) Inclusion of Terrestrial Broadcasts in Existing Performance 
Right and Statutory License.--Section 114(d)(1) of title 17, United 
States Code, is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``a digital'' and inserting ``an'';
            (2) by striking subparagraph (A);
            (3) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (A) and (B), respectively; and
            (4) in subparagraph (A), as redesignated by paragraph (3), 
        by striking ``nonsubscription'' and inserting ``licensed 
        nonsubscription''.
    (c) Technical and Conforming Amendments.--
            (1) Definition.--Section 101 of title 17, United States 
        Code, is amended by inserting after the definition of 
        ``architectural work'' the following:
    ``An `audio transmission' is a transmission of a sound recording, 
whether in a digital, analog, or other format. This term does not 
include the transmission of any audiovisual work.''.
            (2) Conforming removal of digital.--Title 17, United States 
        Code, is amended--
                    (A) in section 112(e)(8), by striking ``a digital 
                audio transmission'' and inserting ``an audio 
                transmission'';
                    (B) in section 114--
                            (i) in subsection (d)--
                                    (I) in paragraph (2)--
                                            (aa) in the matter 
                                        preceding subparagraph (A), by 
                                        striking ``subscription 
                                        digital'' and inserting 
                                        ``subscription''; and
                                            (bb) in subparagraph 
                                        (C)(viii), by striking 
                                        ``digital signal'' and 
                                        inserting ``signal''; and
                                    (II) in paragraph (4)--
                                            (aa) in subparagraph (A), 
                                        by striking ``a digital audio 
                                        transmission'' and inserting 
                                        ``an audio transmission''; and
                                            (bb) in subparagraph 
                                        (B)(i), by striking ``a digital 
                                        audio transmission'' and 
                                        inserting ``an audio 
                                        transmission'';
                            (ii) in subsection (g)(2)(A), by striking 
                        ``a digital'' and inserting ``an''; and
                            (iii) in subsection (j)--
                                    (I) in paragraph (6)--
                                            (aa) by striking 
                                        ``digital''; and
                                            (bb) by striking 
                                        ``retransmissions of broadcast 
                                        transmissions'' and inserting 
                                        ``broadcast transmissions and 
                                        retransmissions of broadcast 
                                        transmissions''; and
                                    (II) in paragraph (8), by striking 
                                ``subscription digital'' and inserting 
                                ``subscription''; and
                    (C) in section 1401--
                            (i) in subsection (b), by striking ``a 
                        digital audio'' and inserting ``an audio''; and
                            (ii) in subsection (d)--
                                    (I) in paragraph (1), by striking 
                                ``a digital audio'' and inserting ``an 
                                audio'';
                                    (II) in paragraph (2)(A), by 
                                striking ``a digital audio'' and 
                                inserting ``an audio''; and
                                    (III) in paragraph (4)(A), by 
                                striking ``a digital audio'' and 
                                inserting ``an audio''.

SEC. 3. TIMING OF PROCEEDINGS UNDER SECTIONS 112(E) AND 114(F).

    Paragraph (3) of section 804(b) of title 17, United States Code, is 
amended by adding at the end the following new subparagraph:
                    ``(D) A proceeding under this chapter shall be 
                commenced as soon as practicable after the date of the 
                enactment of this subparagraph to determine royalty 
                rates and terms for nonsubscription broadcast 
                transmissions, to be effective for the period beginning 
                on such date of enactment, and ending on December 31, 
                2028. Any payment due under section 114(f)(1)(D) shall 
                not be due until the due date of the first royalty 
                payments for nonsubscription broadcast transmissions 
                that are determined, after the date of the enactment of 
                this subparagraph, by the Copyright Royalty Judges. 
                Thereafter, such proceeding shall be repeated in each 
                subsequent fifth calendar year.''.

SEC. 4. SPECIAL PROTECTION FOR SMALL BROADCASTERS.

    (a) Specified Royalty Fees.--Section 114(f)(1) of title 17, United 
States Code, is amended by inserting at the end the following new 
subparagraph:
            ``(D)(i) Notwithstanding the provisions of subparagraphs 
        (A) through (C), the royalty rate shall be as follows for 
        nonsubscription broadcast transmissions by each individual 
        terrestrial broadcast station licensed as such by the Federal 
        Communications Commission that satisfies the conditions in 
        clause (ii)--
                    ``(I) $10 per calendar year, in the case of 
                nonsubscription broadcast transmissions by a broadcast 
                station that generated revenue in the immediately 
                preceding calendar year of less than $100,000;
                    ``(II) $100 per calendar year, in the case of 
                nonsubscription broadcast transmissions by a broadcast 
                station that is a public broadcasting entity as defined 
                in section 118(f) and generated revenue in the 
                immediately preceding calendar year of $100,000 or 
                more, but less than $1,500,000; and
                    ``(III) $500 per calendar year, in the case of 
                nonsubscription broadcast transmissions by a broadcast 
                station that is not a public broadcasting entity as 
                defined in section 118(f) and generated revenue in the 
                immediately preceding calendar year of $100,000 or 
                more, but less than $1,500,000.
            ``(ii) An individual terrestrial broadcast station licensed 
        as such by the Federal Communications Commission is eligible 
        for a royalty rate set forth in clause (i) if--
                    ``(I) the revenue from the operation of that 
                individual station was less than $1,500,000 during the 
                immediately preceding calendar year;
                    ``(II) the aggregate revenue of the owner and 
                operator of the broadcast station and any person 
                directly or indirectly controlling, controlled by, or 
                under common control with such owner or operator, from 
                any source, was less than $10,000,000 during the 
                immediately preceding calendar year; and
                    ``(III) the owner or operator of the broadcast 
                station provides to the nonprofit collective designated 
                by the Copyright Royalty Judges to distribute receipts 
                from the licensing of transmissions in accordance with 
                subsection (f), by no later than January 31 of the 
                relevant calendar year, a written and signed 
                certification of the station's eligibility under this 
                clause and the applicable subclause of clause (i), in 
                accordance with requirements the Copyright Royalty 
                Judges shall prescribe by regulation.
            ``(iii) For purposes of clauses (i) and (ii)--
                    ``(I) revenue shall be calculated in accordance 
                with generally accepted accounting principles;
                    ``(II) revenue generated by a terrestrial broadcast 
                station shall include all revenue from the operation of 
                the station, from any source; and
                    ``(III) in the case of affiliated broadcast 
                stations, revenue shall be allocated reasonably to 
                individual stations associated with the revenue.
            ``(iv) The royalty rates specified in clause (i) shall not 
        be admissible as evidence or otherwise taken into account in 
        determining royalty rates in a proceeding under chapter 8, or 
        in any other administrative, judicial, or other Federal 
        Government proceeding involving the setting or adjustment of 
        the royalties payable for the public performance or 
        reproduction in ephemeral phonorecords or copies of sound 
        recordings, the determination of terms or conditions related 
        thereto, or the establishment of notice or recordkeeping 
        requirements.''.
    (b) Technical Correction.--Section 118(f) of title 17, United 
States Code, is amended by striking ``section 397 of title 47'' and 
inserting ``section 397 of the Communications Act of 1934 (47 U.S.C. 
397)''.

SEC. 5. DISTRIBUTION OF CERTAIN ROYALTIES.

     Section 114(g) of title 17, United States Code, is amended--
            (1) in paragraph (1), by inserting ``or in the case of a 
        transmission to which paragraph (5) applies'' after ``this 
        section'';
            (2) by redesignating paragraphs (5), (6), and (7) as 
        paragraphs (6), (7), and (8), respectively; and
            (3) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Notwithstanding paragraph (1), to the extent that a 
        license granted by the copyright owner of a sound recording to 
        a transmitting entity eligible for a statutory license under 
        subsection (d)(2) extends to such entity's transmissions 
        otherwise licensable under a statutory license in accordance 
        with subsection (f), such entity shall pay to the collective 
        designated to distribute statutory licensing receipts from the 
        licensing of transmissions in accordance with subsection (f), 
        50 percent of the total royalties that such entity is required, 
        pursuant to the applicable license agreement, to pay for such 
        transmissions otherwise licensable under a statutory license in 
        accordance with subsection (f). That collective shall 
        distribute such payments in proportion to the distributions 
        provided in subparagraphs (B) through (D) of paragraph (2), and 
        such payments shall be the only payments to which featured and 
        nonfeatured artists are entitled by virtue of such 
        transmissions under the direct license with such entity.''.

SEC. 6. NO HARMFUL EFFECTS ON SONGWRITERS.

    Nothing in this Act, or the amendments made by this Act, shall 
adversely affect in any respect the public performance rights of or 
royalties payable to songwriters or copyright owners of musical works.

SEC. 7. VALUE OF PROMOTION TAKEN INTO ACCOUNT.

    Pursuant to section 114(f)(1)(B) of title 17, United States Code, 
in determining rates and terms for terrestrial broadcast radio stations 
under this Act, and the amendments made by this Act, the Copyright 
Royalty Judges shall base their decision on economic, competitive, and 
programming information presented by the parties, including whether use 
of the station's 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 recordings.
                                 <all>