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Expanding the Scope of the Public
Performance Right for Sound Recordings: A
Legal Analysis of the Performance Rights Act
(H.R. 848 and S. 379)
Brian T. Yeh
Legislative Attorney
May 20, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34411
CRS Report for Congress
P
repared for Members and Committees of Congress
c11173008

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Expanding the Scope of the Public Performance Right for Sound Recordings

Summary
The transmission of copyrighted sound recordings to the public by over-the-air AM/FM radio
stations is an activity that implicates the right of public performance under the Copyright Act.
However, under current law, terrestrial radio broadcasters who play copyrighted music need only
compensate songwriters for the performance of their musical compositions and not the holders of
the copyright in the sound recording (who may include the recording artist, musicians, and record
label). Yet if music is publicly performed by digital audio transmission, such as by Internet radio
stations (“webcasters”) or satellite radio companies, both the songwriter and the recording artist
are entitled by law to receive royalties from the transmitting entity.
Sound recording copyright holders assert that there is no justifiable reason for the copyright law
to treat sound recordings differently from other categories of performable copyrighted works.
They maintain that recording artists deserve to be fairly compensated by broadcast radio for
public performance of their works just as songwriters and music publishers are currently being
paid for such activity. They also believe that the copyright law should require the same royalty
obligations for terrestrial broadcasters and digital music services, so as not to advantage some of
these commercial competitors over others.
The broadcast radio industry, however, has defended its statutory exemption from paying
royalties to recording artists for non-digital public performances, by arguing that radio broadcasts
serve as free publicity and promotion of the sound recordings, and that performers and record
producers are compensated through sales of compact discs or MP3 music download files, concert
tickets, and merchandise. Furthermore, the broadcasters are concerned that any new royalty
obligation imposed on radio stations could result in less copyrighted music being performed
(either because stations may change their format to talk radio or they may need to broadcast an
increased number of advertisements), or that the additional royalties could adversely impact the
financial health and existence of smaller radio stations.
The Performance Rights Act, H.R. 848 and S. 379, introduced in the 111th Congress, would
expand the public performance right of sound recording copyright holders to include analog audio
transmissions—a change that allows performers to seek royalty payments from terrestrial radio
stations. Concurrent resolutions have been introduced in both houses, the Supporting the Local
Radio Freedom Act (H.Con.Res. 49, S.Con.Res. 14), expressing that Congress should not impose
any new performance fees or royalties for over-the-air broadcasts of sound recordings by local
radio stations. These opposing legislative measures reflect the contentious debate between the
recording industry that desires compensation from AM/FM radio stations for performers and
producers of sound recordings, and the broadcast industry that opposes changes to the status quo.

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Contents
Introduction ................................................................................................................................ 1
Background ................................................................................................................................ 1
History of the Sound Recording Performance Right .................................................................... 3
Licenses for Public Performance of Copyrighted Music .............................................................. 4
The Debate Over Altering the Existing Performance Royalty System ......................................... 5
Legislation in the 111th Congress ................................................................................................. 7
Performance Rights Act ........................................................................................................ 7
Identical Provisions......................................................................................................... 7
Differences Between H.R. 848 and S. 379 ....................................................................... 8
Supporting the Local Radio Freedom Act ............................................................................ 13

Tables
Table 1. Royalty Rates for Broadcasters Under S. 379, Performance Rights Act........................... 9
Table 2. Royalty Rates for Broadcasters Under H.R. 848, Performance Rights Act, as
Ordered to Be Reported Out of the House Judiciary Committee................................................ 9

Appendixes
Appendix. License Fees for Public Performance of Music ........................................................ 14

Contacts
Author Contact Information ...................................................................................................... 16

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Introduction
The scope of the public performance right granted by the Copyright Act is broader for musical
works than for sound recordings. This difference accounts for the current structure of the royalty
obligations of terrestrial radio stations that publicly perform copyrighted music: whereas the
musical work copyright holders (songwriters and music publishers) are entitled to receive royalty
fees from the radio broadcasters, the sound recording copyright holders (singers, musicians, and
record labels) lack any right to demand payment for over-the-air broadcasts of their work.
However, since 1995, sound recording copyright holders have possessed a limited public
performance right—the right to control public performance of their work by means of a digital
audio transmission. Thus, the royalty obligations for Internet radio broadcasters, satellite radio
broadcasters, and cable television operators that transmit copyrighted music to their audiences are
different than those of terrestrial AM/FM radio stations: entities that digitally transmit music to
their listeners must pay royalties not only to the songwriters, but also to the recording artists.
Several hearings were held in the 110th and 111th Congresses examining whether the performance
right should be expanded for sound recordings to encompass non-digital audio transmissions, in
order to allow performers and record companies to receive compensation when broadcast radio
stations play their sound recordings.1 This report offers information regarding this issue and a
legal analysis of two bills that have been introduced in the 111th Congress, H.R. 848 and S. 379
(the Performance Rights Act), that would amend the Copyright Act to provide sound recording
copyright holders with a right to receive royalties from terrestrial radio stations that publicly
perform their work.
Background
Copyright is a federal grant of legal protection for certain works of creative expression, including
books, movies, photographs, and music.2 A copyright holder possesses several exclusive legal
entitlements under the Copyright Act, which together provide the holder with the right to
determine whether and under what circumstances the protected work may be used by third
parties.3 Generally, a party desiring to reproduce, adapt, distribute, publicly display, or publicly
perform a copyrighted work must either (1) obtain the permission of the copyright holder (usually
granted in the form of a license agreement that establishes conditions of use and an amount of
monetary compensation known as a royalty fee), (2) comply with the terms of compulsory
licenses established by law,4 or (3) assert that such use falls within the scope of certain statutory
limitations on the exclusive rights such as the “fair use” doctrine—but the validity of such claim

1 Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century:
Hearings Before the House Subcomm. on Courts, the Internet, and Intellectual Property, 110th Cong., 1st sess. (2007);
Exploring the Scope of Public Performance Rights: Hearings Before the Senate Comm. on the Judiciary, 110th Cong.,
1st sess. (2007); H.R. 4789, the “Performance Rights Act:” Hearings Before the House Subcomm. on Courts, the
Internet, and Intellectual Property, 110th Cong., 2d sess. (2008); H.R. 848, the “Performance Rights Act:” Hearings
Before the House Comm. on the Judiciary, 111th Cong., 1st sess. (2009).
2 17 U.S.C. § 102(a).
3 17 U.S.C. §§ 106. For a detailed description of the major provisions of the Copyright Act, see CRS Report RS22801,
General Overview of U.S. Copyright Law, by Brian T. Yeh.
4 A detailed explanation of compulsory licenses is offered infra.
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may be subject to the judgment of a federal court.5 The unauthorized use of one of the exclusive
rights of the copyright holder constitutes infringement.6
Federal law recognizes copyright protection for two separate categories of works in the musical
realm: “musical works” and “sound recordings.”7 A musical work refers to the notes and lyrics of
a song, while a sound recording is a recorded version of a musician singing or playing a musical
work, as that rendition is captured in a tangible medium of expression such as a compact disc,
cassette tape, vinyl album, or MP3 file. Thus, there are potentially two different creative artists
(and two different copyrights) when it comes to a single piece of recorded music: the holder of
the copyright in the underlying musical work embodied in the sound recording, and the holder of
the copyright in the sound recording itself. The musical work copyright holder is typically the
individual who writes the notes and lyrics of a musical composition, or a music publisher who
purchases or licenses copyrights from song composers. The sound recording copyright holder
may include the recording artist, the background musicians, and the record label that helps with
the production of the sound recording. It is possible that one individual can be both the sound
recording copyright holder as well as the holder of the copyright in the musical work; for
example, someone who is both a singer and songwriter may hold two independent copyrights to a
piece of recorded music. However, many songwriters are not performers, and many performers
are not songwriters.
While both musical works and sound recordings are eligible for copyright protection, the
Copyright Act does not provide the same degree of public performance8 protection to sound
recordings that it grants to the underlying musical composition contained in the sound recording.
The holder of a copyright in the musical work has a more robust right to control public
performance in a wide variety of situations, while the sound recording copyright holder has a far
more limited right to control public performance of sound recordings—only when the sound
recording is transmitted to the public through digital means.9 The difference in the scope of the
public performance right under the Copyright Act for these two copyright holders, and its impact
on royalty obligations for third parties wishing to publicly perform sound recordings, may be
illustrated by the following scenarios:
• An entity that wants to broadcast a sound recording for the public through non-
digital transmissions, such as a terrestrial AM/FM broadcast radio station,10 must
pay royalties to the musical work copyright holder (e.g., the songwriter) for the
right to publicly perform the musical work, but the radio station does not have to
pay royalties or otherwise get permission from the sound recording copyright
holders (the recording artist, musicians, and record label).
• In contrast, if the music is transmitted to the public through digital means, the
two music copyright holders’ public performance rights (and the transmitting

5 17 U.S.C. § 107.
6 17 U.S.C. § 501.
7 17 U.S.C. §§ 102(a)(2), (7). For more information regarding copyright law and music, see CRS Report RL33631,
Copyright Licensing in Music Distribution, Reproduction, and Public Performance, by Brian T. Yeh.
8 According to the Copyright Act, to “perform” a work means to recite, render, play, dance, or act it, either directly or
by means of any device or process. 17 U.S.C. § 101.
9 17 U.S.C. § 106(6).
10 A “broadcast” transmission is defined as a transmission made by a terrestrial broadcast station licensed by the
Federal Communications Commission. 17 U.S.C. § 114(j)(3).
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entity’s royalty obligations) are different. If the public performance of the sound
recording involves a digital audio transmission—as used by an Internet radio
broadcaster (or “webcaster”), satellite digital radio company, or a traditional
AM/FM radio station offering a simultaneous Internet stream of its over-the-air
programming—then both the songwriters and recording artists have the legal
entitlement to be paid for that activity. Stated differently, the webcasters and
satellite radio companies, because they transmit audio using digital technologies,
are required to pay royalties to both the musical work copyright holder and the
sound recording copyright holder.
History of the Sound Recording Performance Right
A review of the history of the performance right in the Copyright Act is helpful in understanding
why the scope of public performance protection differs for sound recordings and musical works.
While musical works have enjoyed a full right of public performance for over 100 years, the
Copyright Act did not offer any legal protection to sound recordings until 1971, when Congress
enacted a law that granted exclusive rights to reproduction and distribution to sound recording
copyright holders as a response to the increased amount of unauthorized duplication of records
and tapes.11 However, at that time, Congress decided not to grant sound recording copyright
holders the right to control public performance, partly due to opposition by television and radio
broadcasters and jukebox operators who resisted any changes to the Copyright Act that would
require any additional royalty payments beyond those already mandated for songwriters and
music publishers, and also because Congress considered the rights to control reproduction and
distribution to be sufficient enough to address the immediate problem of record piracy.12 In the
most recent general revision of the Copyright Act in 1976, Congress directed the U.S. Copyright
Office to submit a report by January 8, 1978, that would recommend whether Congress should
grant a public performance right for sound recordings. In that report, the Register of Copyrights
believed that a public performance right for sound recordings was warranted:
Broadcasters and other users of recordings have performed them without permission or
payment for generations. Users today look upon any requirement that they pay royalties as
an unfair imposition in the nature of a “tax.” However, any economic burden on the users of
recordings for public performance is heavily outweighed ... by the commercial benefits
accruing directly from the use of copyrighted sound recordings.... To leave the creators of
sound recordings without any protection or compensation for their widespread commercial
use can no longer be justified.13
However, at the time, Congress took no action in response to the advice of the Register.
Technological advances in music transmission methods in the early 1990s helped persuade
Congress to reexamine the issue of public performance rights for sound recording copyright

11 Sound Recording Amendment, P.L. 92-140, 85 Stat. 391 (1971). By its terms, the law was effective on February 15,
1972, and applies to sound recordings made on or after that date.
12 Internet Streaming of Radio Broadcasts: Balancing the Interests of Sound Recording Copyright Owners with Those
of Broadcasters: Hearings Before the House Subcomm. on Courts, the Internet and Intellectual Property, 108th Cong.,
2d sess. (2004) (statement of David Carson, General Counsel, U.S. Copyright Office), at 3.
13 U.S. Register of Copyrights, Report on Performance Rights in Sound Recordings, H.R. Doc. No. 15, 95th Cong., 2d
sess. 1063 (1978).
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holders. Record companies were concerned that consumers would use certain new technologies
such as on-demand digital cable music services and other interactive services to listen to music
and potentially record the digital audio transmissions, thereby eliminating their need to purchase
physical sound recording media.14
In response, in 1995, Congress passed the Digital Performance Right in Sound Recordings Act,15
which for the first time ever granted copyright owners of sound recordings an exclusive right to
perform their works publicly—although the right was limited only to digital audio transmission of
their sound recordings. However, the law specifically exempted traditional over-the-air radio
broadcasts from the newly created right to control digital public performances of sound
recordings.16 The Senate report accompanying the Digital Performance Right in Sound
Recordings Act noted that
The Committee, in reviewing the record before it and the goals of this legislation, recognizes
that the sale of many sound recordings and the careers of many performers have benefitted
considerably from airplay and other promotional activities provided by both noncommercial
and advertiser-supported, free over-the-air broadcasting. The Committee also recognizes that
the radio industry has grown and prospered with the availability and use of prerecorded
music. This legislation should do nothing to change or jeopardize the mutually beneficial
economic relationship between the recording and traditional broadcasting industries.17
In 1998, with the passage of the Digital Millennium Copyright Act,18 Congress clarified that the
digital performance right also applied to sound recordings performed by noninteractive,
nonsubscription Internet radio broadcasters (webcasters).19 As a result of these two laws,
webcasters, satellite radio broadcasters, and cable broadcasters are now required to pay royalties
to sound recording copyright holders when they digitally transmit their recordings, in addition to
the royalties that are due to the musical work copyright holders. Terrestrial radio stations that
stream (simulcast) their programming on the Internet also are required to pay royalties to sound
recording copyright holders because that activity involves a digital audio transmission. Radio
stations that only broadcast copyrighted sound recordings over-the-air, however, are not subject to
the digital performance right for sound recordings and thus need only compensate the musical
work copyright holder for the public performance.
Licenses for Public Performance of Copyrighted
Music
A license is a form of legal permission in which the copyright owner authorizes third parties to
use the work, in exchange for a payment of royalty fees and compliance with certain conditions
specified in the license. Some licenses are negotiated voluntarily between a copyright owner and

14 William H. O’Dowd, The Need for a Public Performance Right in Sound Recordings, 31 HARV. J. LEGIS. 249, 254-59
(1993).
15 P.L. 104-39, 109 Stat. 336 (1995).
16 Section 3 of P.L. 104-39.
17 S.Rept. 104-128, at 4 (1995).
18 P.L. 105-304 (1998).
19 Section 405 of P.L. 105-304.
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the third party wishing to use the work. Other licenses are created by Congress and appear in the
Copyright Act. These “statutory” or “compulsory” licenses compel copyright owners to allow
third parties to use creative works under certain conditions and according to specific
requirements, in exchange for payment of royalty fees at a rate determined by a federal
government body known as the Copyright Royalty Board.20 Therefore, a user of a statutory
license need not obtain or negotiate permission for using a copyrighted work from the copyright
owner; that permission is “compulsory.”
When copyrighted sound recordings are transmitted through either analog or digital means, the
songwriter who composed the underlying musical composition contained in that sound recording
is compensated according to a voluntary license agreement that was the product of private
negotiations between the transmitting entities and the musical work copyright holders, who are
represented by performing rights organizations such as the American Society of Composers,
Authors, and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and the Society for European
Stage Authors and Composers (SESAC). A broadcast radio station, webcaster, or satellite radio
company must pay license fees to ASCAP, BMI, and/or SESAC for the right to publicly perform
the copyrighted musical works made by composers, songwriters, and music publishers who are
represented by those organizations.
However, public performance of sound recordings through digital transmission is subject to a
compulsory license created by Congress and found in Section 114 of the Copyright Act.
Webcasters and satellite radio companies need not negotiate with recording artists for permission
to digitally transmit their sound recordings; they only have to comply with the terms of the
Section 114 compulsory license and pay the royalty rate prescribed by the Copyright Royalty
Board.21 Collection of royalty payments under the compulsory license for digital transmissions of
sound recordings is handled on behalf of sound recording copyright holders by SoundExchange, a
nonprofit entity originally created by the Recording Industry Association of America.
The Debate Over Altering the Existing Performance
Royalty System
The broadcast radio industry has defended its statutory exemption from paying sound recording
copyright holders for non-digital public performances, by arguing that radio broadcasts serve as
free publicity and promotion of the music, and that performers and producers of sound recordings
are compensated through sales of compact discs or MP3 music download files, concert tickets,
and merchandise.22 Furthermore, radio broadcasters observe that the broadcaster exemption
reflects a balanced, symbiotic economic relationship between the broadcasting, music, and sound
recording industries, that Congress has chosen not to disturb for over 80 years despite repeated

20 For more background on the Copyright Royalty Board, see CRS Report RS21512, The Copyright Royalty and
Distribution Reform Act of 2004, by Robin Jeweler.
21 For Internet radio broadcasters, see Library of Congress, Copyright Royalty Board, Digital Performance Right in
Sound Recordings and Ephemeral Recordings, 72 Fed. Reg. 24084 (May 1, 2007); for satellite radio companies, see
Library of Congress, Copyright Royalty Board, Determination of Rates and Terms for Preexisting Subscription
Services and Satellite Digital Audio Radio Services, 73 Fed. Reg. 4080 (Jan. 24, 2008).
22 Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century:
Hearings Before the House Subcomm. on Courts, the Internet, and Intellectual Property, 110th Cong., 1st sess. (2007)
(statement of Charles M. Warfield, Jr., President, ICBC Broadcast Holdings, Inc.), at 2.
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appeals by the recording industry to alter the existing performance royalty system.23 The
broadcasters also predict that any new royalty obligations imposed on radio stations could result
in less copyrighted music being performed, either because stations may change their format to
talk radio or they may need to broadcast an increased number of advertisements to pay for the
additional royalty fees.24 They are also concerned that any new royalty fees will adversely impact
financially strapped radio stations’ ability to provide non-music services such as local news
reporting, weather information, and public service announcements, or even force them to cease
operations entirely.25 Finally, they object to comparisons between the United States and other
countries with respect to royalty obligations for public performance of sound recordings because
of important differences in the intellectual property law of all countries as well as the fact that
many foreign broadcasters are owned or heavily subsidized by their governments.26
Sound recording copyright holders have advanced several arguments in support of expanding
their performance right. First, they argue that recording artists deserve to be compensated for
public performance of their works by broadcast radio just as songwriters and music publishers are
currently being paid for such activity.27 They point out that “simple fairness” requires terrestrial
radio to pay them for performing their work, as the artists are the ones “who bring the music to
life, who attract listeners to a station, and who make it possible for radio to make money by
selling advertising.”28 Second, they claim that the promotional value offered by terrestrial radio
for the performance of their sound recordings has been diminished by listeners seeking out
alternative sources of music distribution such as satellite radio and Internet music services.29
Third, they observe that all developed countries in the world except the United States require their
radio broadcasters to compensate performers and record labels.30 However, because the United
States does not require U.S. radio broadcasters to compensate foreign performers when they play
their sound recordings, reciprocity allows foreign broadcasters to deny paying royalties to U.S.
performers when they play their works in their countries.31 Industry estimates suggest that the loss
to U.S. artists in potential foreign performance royalties is about $70 million.32

23 Id.
24 Exploring the Scope of Public Performance Rights: Hearings Before the Senate Comm. on the Judiciary, 110th
Cong., 1st sess. (2007)(statement of Steven W. Newberry, President, Commonwealth Broadcasting Corporation).
25 Free Radio Alliance, Frequently Asked Questions, at http://www.freeradioalliance.org/faq.html.
26 Exploring the Scope of Public Performance Rights: Hearings Before the Senate Comm. on the Judiciary, 110th
Cong., 1st sess. (2007)(statement of Steven W. Newberry, President, Commonwealth Broadcasting Corporation).
27 Exploring the Scope of Public Performance Rights: Hearings Before the Senate Comm. on the Judiciary, 110th
Cong., 1st sess. (2007)(statement of Lyle Lovett) (“[T]he songwriter who created the song deserves to be compensated
when that work generates value for another business, as it does for radio. I’m proud to be an ASCAP member, and
grateful for the performance royalties that have helped me to earn my living as a songwriter. But the musicians and
singers who perform the song are also creators and deserve to be compensated as well.”)
28 MusicFirst, Frequently Asked Questions About the Performance Right, at
http://musicfirstcoalition.org/faq/performance-right/doesnt-radio-play-compensate-artists-by-boosting-record-sale.html.
29 MusicFirst, Get Smart on the Performance Right, at http://musicfirstcoalition.org/getsmart/.
30 H.R. 848, the “Performance Rights Act:” Hearings Before the House Comm. on the Judiciary, 111th Cong., 1st sess.
(2009) (statement of Mitch Bainwol, Chairman and CEO of the Recording Industry Association of America), at 1.
31 Id.
32 Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century:
Hearings Before the House Subcomm. on Courts, the Internet, and Intellectual Property, 110th Cong., 1st sess. (2007)
(statement of Marybeth Peters, Register of Copyrights), at 14.
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The Register of Copyrights has also offered Congress her opinion on this issue, asserting that
there is no legal justification for why the copyright law should treat sound recordings differently
from other categories of performable copyrighted works, such as books, plays, and movies.33 She
also believes that the copyright law should require the same royalty obligations for both terrestrial
broadcasters and digital music services, to provide a more level playing field for these
commercial competitors.34
Legislation in the 111th Congress
Performance Rights Act
Legislation has been introduced in the 111th Congress that would expand the scope of the public
performance right for sound recording copyright holders.35 The changes proposed by the
Performance Rights Act, H.R. 848 (introduced by Representative John Conyers, Jr.) and S. 379
(introduced by Senator Patrick Leahy), would require terrestrial radio broadcasters to begin
paying a royalty to recording artists and record labels when they play sound recordings.36
Identical Provisions
Section 2 of the bills would amend sections of the Copyright Act that currently relate to digital
audio transmission of sound recordings by deleting the qualifying term “digital.”37 The bills also
would remove the express statutory exemption for nonsubscription broadcast transmissions
(which are the type made by traditional AM/FM radio stations) from the Section 114 compulsory
license for public performance of sound recordings.38 If this legislation is enacted, copyright
owners of sound recordings would enjoy a performance right for all types of audio transmissions,
both analog and digital. This right would be subject to a Section 114 compulsory license available
to entities that transmit sound recordings both digitally and over the air. The Copyright Royalty
Board would be responsible for determining the royalty rate that radio stations would have to pay
to sound recording copyright holders.39
H.R. 848 and S. 379 statutorily exempt from the Section 114 compulsory license a
nonsubscription radio broadcast of religious services at a place of worship or other religious
assembly, and any incidental uses of a musical sound recording (for example, talk radio,
including news and sports programming, that uses brief musical transitions in and out of

33 Id. at 2, 4.
34 Id. at 8-9.
35 The legislation as introduced is substantially similar to bills in the 110th Congress on this topic, H.R. 4789 and S.
2500.
36 The Copyright Act requires the following division and distribution of the royalty payments made pursuant to a
Section 114 compulsory license: 45% of the fee is to be paid to the recording artist, 5% to the background musicians,
and 50% to the record label. 17 U.S.C. § 114(g)(2).
37 17 U.S.C. §§ 106(6), 114(d)(1), 114(j)(6).
38 17 U.S.C. § 114(d)(1)(A).
39 The two bills differ, however, in the required standard to be used by the Copyright Royalty Board in determining this
rate. The rate-making standard is discussed infra.
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commercials or program segments would be exempt from paying a sound recording performance
royalty for such uses of sound recordings).40
Section 4 of the bills directs the Copyright Royalty Board to establish a “per program license
option for terrestrial broadcast stations that make limited feature uses of sound recordings.”41 This
provision may be most beneficial to stations that utilize primarily a talk-radio format, though they
may broadcast sound recordings on infrequent occasions.
Section 5 of the bills states that nothing in the Performance Rights Act shall adversely affect the
public performance rights or royalties payable to songwriters or copyright owners of musical
works. This provision is intended to preserve songwriters’ existing public performance rights and
clarify that the provisions of the Performance Rights Act shall not diminish them.42
Differences Between H.R. 848 and S. 379
H.R. 848 and S. 379 contain several provisions unique to each bill.
Blanket Licenses for Small or Noncommercial Radio Stations
Both bills provide special treatment for certain small or noncommercial radio stations by
excusing them from having to pay the royalty fee established by the Copyright Royalty Board;
rather, qualifying stations would only need to pay a flat annual rate for a blanket license.
Although the two bills were introduced in their respective houses containing the same fixed
royalty rate amounts, the House bill was ordered to be reported out of the House Judiciary
Committee with a manager’s amendment43 that offered a different rate structure than that of the
Senate bill and the House bill as introduced. Under the Senate bill, commercial radio stations that
have annual revenue of less than $1.25 million may elect to pay a fixed royalty amount of $5,000
per year, while public broadcasting entities (noncommercial educational broadcast stations,
including college radio stations)—regardless of their revenue or number of listeners—may elect
to pay a flat fee of $1,000 a year.44 The sponsor of the Senate bill claims that more than 75% of
existing commercial broadcasting stations in the country would be eligible for the flat fee, blanket
license option.45 However, the legislation dictates that these fixed-rate royalty fees are not to be
taken into account in any Copyright Royalty Board rate-setting proceeding, or in any other
administrative, judicial, or other federal government proceeding.46 The royalty fees under the
Senate bill may be summarized as follows:

40 153 CONG. REC. E2605 (extension of remarks, Dec. 19, 2007) (statement of Rep. Darrell E. Issa, in reference to H.R.
4789, 110th Cong., 1st Sess. (2007), which is substantially similar to the House-version of the Performance Rights Act
introduced in the 111th Congress).
41 Section 4 of H.R. 848 and S. 379, amending 17 U.S.C. § 114(f)(2)(B).
42 155 CONG. REC. S1545 (daily ed. Feb. 4, 2009) (statement of Sen. Leahy).
43 Manager’s amendment available at http://www.cq.com//displayamendment.do?docid=3116587&productId=1.
44 Section 3(a)(1) of H.R. 848 and S. 379.
45 155 CONG. REC. S1545 (daily ed., Feb. 4, 2009) (statement of Sen. Leahy).
46 Section 3(a) of S. 379.
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Table 1. Royalty Rates for Broadcasters Under S. 379, Performance Rights Act
Annual Revenue
Commercial Broadcaster
Public Broadcasting Entity
Greater than $1.25 million
Rate to be set by the Copyright
Flat fee of $1,000 per year
Royalty Board
Less than $1.25 million
Flat fee of $5,000 per year
Flat fee of $1,000 per year
Source: Congressional Research Service
In contrast, the House Judiciary Committee approved by voice vote on May 13, 2009, a
manager’s amendment that would further reduce the royalty rates for smaller commercial radio
stations and public broadcasting stations. The manager’s amendment contains the following tiered
royalty fee structure:
Table 2. Royalty Rates for Broadcasters Under H.R. 848, Performance Rights Act,
as Ordered to Be Reported Out of the House Judiciary Committee
Annual Revenue
Commercial Broadcaster
Public Broadcasting Entity
Greater than $1.25 million
Rate to be set by the Copyright
Flat fee of $1,000 per year
Royalty Board
$500,000 < $1.25 million
Flat fee of $5,000 per year
Flat fee of $1,000 per year
$100,000 < $500,000
Flat fee of $2,500 per year
Flat fee of $1,000 per year
Less than $100,000
Flat fee of $500 per year
Flat fee of $500 per year
Source: Congressional Research Service, based on information from the manager’s amendment available at
http://www.cq.com//displayamendment.do?docid=3116587&productId=1.
Standard Used by the Copyright Royalty Board in Setting Royalty Rates
While both H.R. 848 and S. 379 would require the Copyright Royalty Board (CRB) to determine
the royalty rate applicable to the performance of sound recordings by commercial radio stations
that have gross revenues of more than $1.25 million per year, the bills differ in the standard that
the CRB would use to set the rate. Under the Senate bill, the rate would be determined under a
“willing buyer, willing seller” standard,47 which is the same one currently being used by the CRB
in calculating the royalty rate applicable to Internet webcasters.48 The House bill as introduced
also followed this approach.

47 The standard is described in 17 U.S.C. § 114(f)(2)(B): “[T]he 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 shall base [their]
decision on economic, competitive and programming information presented 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 its sound recordings; and (ii) the relative
roles of the copyright owner and the transmitting entity in the copyrighted work and the service made available to the
public with respect to relative creative contribution, technological contribution, capital investment, cost, and risk.”
48 For more information on the use of this standard in setting royalty rates for webcasters, see CRS Report RL34020,
Statutory Royalty Rates for Digital Performance of Sound Recordings: Decision of the Copyright Royalty Board, by
Brian T. Yeh.
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However, the manager’s amendment to H.R. 848 would change the standard that would be
applied by the CRB in determining the Section 114 compulsory license for public performance of
sound recordings. Under H.R. 848 (as ordered to be reported out of the House Judiciary
Committee), the CRB would be directed to follow a modified “801(b) standard” in setting royalty
rates for not only terrestrial radio, but also for Internet webcasters, digital cable music channels,
and satellite radio companies. The so-called “801(b) standard” (referring to the section of the
Copyright Act, 17 U.S.C. § 801(b)(1), that currently governs the CRB determination of royalty
rates for digital cable radio and satellite radio companies) requires the CRB to develop a rate that
reflects consideration of several factors beyond strictly market-rate calculations. Such royalty rate
must be set to achieve the following statutory objectives:
(A) To maximize the availability of creative works to the public.
(B) To afford the copyright owner a fair return for his or her creative work and the copyright
user a fair income under existing economic conditions.
(C) To reflect the relative roles of the copyright owner and the copyright user in the product
made available to the public with respect to relative creative contribution, technological
contribution, capital investment, cost, risk, and contribution to the opening of new markets
for creative expression and media for their communication.
(D) To minimize any disruptive impact on the structure of the industries involved and on
generally prevailing industry practices.49
The manager’s amendment to H.R. 848 would require the CRB to consider the first three criteria
above, but the bill does not include the fourth objective. It has been asserted that the fourth factor
was decisive in the CRB calculation of royalty rates for satellite radio that are substantially lower
than what they might have been under a “willing buyer, willing seller” standard.50 However, it
remains to be seen whether the first three criteria, in the absence of the fourth consideration, will
guide the CRB in determining rates that are lower than those that are the product of the “willing
buyer, willing seller” standard.
In addition, the manager’s amendment would instruct the CRB, in determining the royalty rates
for Section 114 compulsory licenses, to consider evidence on the effect of such rates and terms on
the following entities:
• religious, minority-owned, female-owned, small, and noncommercial
broadcasters;
• non-music programming, including local news and information programming for
stations that are part of station groups in which all stations within the group are
located in one designated market area (as determined by Nielsen Media
Research); and

49 17 U.S.C. § 801(b)(1)(A)-(D).
50 David Oxenford, Broadcast Performance Royalty Passes House Judiciary Committee - A Work In Progress, May 13,
2009, available at http://www.broadcastlawblog.com/2009/05/articles/broadcast-performance-royalty/broadcast-
performance-royalty-passes-house-judiciary-committee-a-work-in-progress/ (“[T]he entire 801(b) set of criteria has not
been incorporated in the new bill. Specifically, the new criteria omit the one factor that was the most important in
cutting the satellite radio royalties from what probably would have been 14% of revenue had a ‘willing buyer, willing
seller’ analysis been used, down to 6-8% of revenues.”).
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• religious, minority or minority-owned, and female or female-owned royalty
recipients.
The section of the manager’s amendment that contains this instruction is titled “preservation of
diversity;” presumably, the CRB would be responsible for taking into account evidence of
significant negative economic impact on these entities in establishing or adjusting royalty rates
that would moderate such impact.
Delay in Effective Date of Legislation
Unique to the House bill (as ordered to be reported out of the House Judiciary Committee) is a
provision that would delay the effective date of the legislation for three years after the enactment
of the Performance Rights Act in the case of radio broadcasters with annual gross revenues of less
than $5 million, or one year immediately following enactment of the act in the case of a
broadcaster making more than $5 million a year. The precise language of the manager’s
amendment provides that radio broadcasters “shall not be required to pay a royalty” during those
time periods. However, as noted above, the royalty rate for commercial broadcasters with greater
than $1.25 million in annual revenue is to be determined by the Copyright Royalty Board. A CRB
rate-making proceeding often requires several years to conduct.51 Therefore, for commercial
broadcasters that make more than $5 million annually, the obligation to begin paying royalty rates
after the one year delay will likely come to fruition before the CRB issues a decision that
establishes the royalty rate. In such a situation, the commercial broadcaster would likely be
responsible for paying for royalties retroactively from the date when the CRB establishes the rate.
No Effect on Local Communities
The manager’s amendment to H.R. 848 that was adopted by the House Judiciary Committee
contains a provision that would amend Section 114 of the Copyright Act by adding the following:
Neither this subsection nor the payment of royalties by broadcasters hereunder shall affect in
any respect the public interest obligations of a broadcaster to its local community under part
73 of title 47 of the Code of Federal Regulations.
The Senate bill does not contain a similar provision. This provision emphasizes that the new
royalty payment requirements are not meant to diminish or otherwise alter any public interest
obligations of broadcasters under federal communications laws.
Sound Recording Performance Complement
H.R. 848 (as ordered to be reported out of the House Judiciary Committee) would require that
traditional radio stations adhere to the same performance limitations that are currently imposed on
webcasters and satellite radio (referred to as the “sound recording performance complement”) as
part of the conditions of using a Section 114 compulsory license, such as restrictions on their
ability to pre-announce the titles of songs that are to be played at a specific time, and limiting the

51 For example, the CRB announced on January 5, 2009, that it was initiating a rate-making proceeding to determine
the royalty rates for Internet radio webcasters that would be applicable for the royalty period that runs from January 1,
2011, through December 31, 2015. Copyright Royalty Board, Library of Congress, Digital Performance in Sound
Recordings and Ephemeral Recordings, 74 Fed. Reg. 318 (Jan. 5, 2009).
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transmission of songs from the same sound recording or by the same artist within a certain period
of time. The Senate bill, however, would expressly exempt traditional radio stations from these
conditions of the Section 114 license.52
Safeguards for Existing Royalties Paid to Musical Work Copyright Owners
Section 5 of H.R. 848 (as ordered to be reported out of the House Judiciary Committee) has
several more subsections than the Senate bill’s counterpart, in which the bill takes further steps to
emphasize that the royalties currently being paid to songwriters by terrestrial broadcasters are not
to be reduced or adversely affected in any way, as a result of the expanded performance right that
will be granted to recording artists, musicians, and performers. For example, the House bill
declares that license fees payable for the public performance of sound recordings are not to be
cited, taken into account, or otherwise used to adjust the license fees payable to musical work
copyright owners for public performance of their works; for the purpose of reducing or adversely
affecting such license fees; in any administrative, judicial, or other governmental forum or
proceeding; or otherwise.53 In addition, license fees paid by terrestrial broadcast stations for the
public performance of musical works “shall be independent of license fees paid for the public
performance of sound recordings.”54 Furthermore, H.R. 848 expressly spells out the music license
obligations of terrestrial radio stations under the Performance Rights Act—in addition to the new
requirement of paying for the performance of sound recordings, they must continue to obtain
licenses for the public performance of copyrighted musical works contained within sound
recordings.55
Requirements for Payment of Royalties
The House bill (as ordered to be reported out of the House Judiciary Committee) also contains a
sixth section (that the Senate bill lacks) that establishes the following requirements for the
payment of royalties:56
• A featured recording artist who performs on a sound recording that has been
licensed for public performance by means of a digital audio transmission is
entitled to receive payments from the copyright owner of the sound recording in
accordance with the terms of the artist’s contract.
• Sound recording copyright owners must deposit 1% of the receipts from their
licensing of public performance rights by means of a digital audio transmission,
into a fund established by the American Federation of Musicians and American
Federal of Television and Radio Artists, for the benefit of nonfeatured performers
who have performed on sound recordings.57

52 Section 2(d) of S. 379.
53 Section 5(a)(1) of H.R. 848, amending 17 U.S.C. § 114(i).
54 Section 5(c) of H.R. 848, amending 17 U.S.C. § 114(f).
55 Section 5(a)(1) of H.R. 848, amending 17 U.S.C. § 114(i).
56 Section 6 of H.R. 848, amending 17 U.S.C. § 114(g).
57 The House bill specifies that the fund shall be distributed 50% to nonfeatured musicians and 50% to nonfeatured
vocalists.
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• Radio broadcasters must pay 50% of the total royalties owed for the public
performance of sound recordings directly to featured and nonfeatured artists, in
the proportions called for under existing law.58
Supporting the Local Radio Freedom Act
Introduced by Representatives Gene Green and Michael Conaway on February 12, 2009, the
Supporting the Local Radio Freedom Act (H.Con.Res. 49) expresses that Congress should not
impose any new performance fees, royalties, or other charges relating to the over-the-air
broadcasts of sound recordings by local radio stations or by any business engaged in such activity.
Representative Green stated that “[r]adio has played a huge role in promoting new music and
artists at no cost to the record labels. The performance tax being pushed by the record labels is
projected to have a huge price tag costing local stations and the community millions of dollars.”59
More than 200 Members of the House have signed onto the non-binding resolution as co-sponsors
as of the date of this report.
A similar resolution, S.Con.Res. 14, was introduced on March 30, 2009, by Senator Blanche
Lincoln, along with Senator John Barrasso. Senator Lincoln commented that “[t]his resolution
will ensure that local radio stations across the country can continue to serve listeners without
being subjected to additional fees that could diminish the quality of radio programming, including
news, weather and AMBER Alert information that at times proves lifesaving.”60



58 Under the Copyright Act, the distribution of payments to all artists who performed on sound recordings are to be
made as follows: 2.5% to nonfeatured musicians, 2.5% to nonfeatured vocalists, and 45% to featured artists. 17 U.S.C.
§ 114(g)(2)(B)-(D).
59 Press Release, Rep. Gene Green Introduces Bipartisan Measure Against Radio Performance Taxes, available at
http://www.house.gov/list/press/tx29_green/LRFAREINTRO.html.
60 Press Release, Lincoln Reintroduces Resolution Recognizing Value of Radio Airplay, available at
http://lincoln.senate.gov/newsroom/2009-03-30-1.cfm.
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Appendix. License Fees for Public Performance
of Music

Publicly Performing a Work
Publicly Performing a Work Through
Through Analog Transmission
Digital Transmission
Royalties Due to
As an example, ASCAP offers two types
ASCAP offers several types of licensing
the Musical Work
of license agreements:a
agreements for Internet music uses, the fees for
Copyright
which vary depending on the size of the audience,
Holder—includes
(1) A “blanket license” is available for
revenue, whether the Internet service is
the songwriter and
radio stations that broadcast music
interactive or non-interactive, the number of
the music publisher
frequently. The annual fee is a
music performances, among other things.c The
percentage of the station’s annual
minimum fee for non-interactive Internet
revenues; the rate for 1996 through
websites is $288, while the minimum fee for
2000 was 1.615% for stations with
interactive sites is $340.
annual gross revenue over $150,000, or
a minimum of 1% of adjusted gross
income.b
For stations that have less than $150,000
in annual revenue, there is a flat fee
schedule that ranges from $450 to
$1,800.
(2) A “per program license” is available
for talk and news radio stations that use
less copyrighted music; the fee is 0.24%
of Adjusted Gross Revenue and covers
incidental uses of music.
Royalties Due to
None.
The Copyright Royalty Board has established the
the Sound
following rates:
Recording

Copyright
Commercial webcasters:d $.0008 per
However, the Performance Rights Act
Holder—includes
performancee for 2006, $.0011 per performance
(H.R. 848 and S. 379), introduced in
the performing artist,
for 2007, $.0014 per performance for 2008,
the111th Congress, would require
musicians, and
$.0018 per performance for 2009, and $.0019
terrestrial broadcasters to pay artists
record label
per performance for 2010.
and record labels for the right to play
sound recordings over the air. The
Noncommercial webcasters:
royalty rate would be determined by the
Copyright Royalty Board in a ratemaking (1) For Internet transmissions totaling less than
proceeding.
159,140 Aggregate Tuning Hours (ATH)f a
month, an annual per channel royalty of $500.
In lieu of this rate, S. 379 would permit
commercial broadcasters that have an
(2) For Internet transmissions totaling more than
annual revenue of less than $1.25 million 159,140 ATH a month, a royalty of $.0008 per
to elect to pay a fixed $5,000 royalty fee performance for 2006, $.0011 per performance
per year, and public broadcasting
for 2007, $.0014 per performance for 2008,
entities, including college radio stations,
$.0018 per performance for 2009, and $.0019
could choose to pay $1,000 a year,
per performance for 2010.
regardless of their annual revenue.
All webcasters must also pay an annual minimum fee
H.R. 848, as ordered to be reported out of $500 per channel.
of the House Judiciary Committee,
Satellite radio:g
would establish several alternative
royalty fees for broadcasters that satisfy
6 % of gross revenues for 2007 & 2008; 6.5% for
the following criteria:
2009; 7% for 2010; 7.5% for 2011; and 8% for
2012.
(1) If the commercial broadcaster has an
annual revenue that exceeds $1.25
million, the royalty rate would be set by
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Publicly Performing a Work
Publicly Performing a Work Through

Through Analog Transmission
Digital Transmission
the Copyright Royalty Board.
(2) A commercial broadcaster that has
an annual revenue of at least $500,000
but less than $1.25 million, may elect to
pay a fixed royalty fee of $5,000 per
year.
(3) A commercial broadcaster that has
an annual revenue of at least $100,000
but less than $500,000 may elect to pay
a fixed royalty fee of $2,500 per year.
(4) A commercial broadcaster that has
an annual revenue of less than $100,000
may elect to pay a fixed royalty fee of
$500 per year.
(5) A public broadcasting entity that has
an annual revenue of $100,000 or more
may elect to pay a fixed royalty fee of
$1,000 per year.
(6) A public broadcasting entity that has
an annual revenue of less than $100,000
may elect to pay a royalty fee of $500
per year.
Source: Congressional Research Service. Manager’s amendment to H.R. 848 available at
http://www.cq.com//displayamendment.do?docid=3116587&productId=1.
a. The fee examples on this page are the product of private, voluntary negotiations between ASCAP and the
radio broadcasters. No government entity is involved in setting these rates.
b. ASCAP, Customer Licensees, Radio Licensing FAQs, at http://www.ascap.com/licensing/radio/radiofaq.html.
These are the rates now shown on ASCAP’s website; more up-to-date rates are not available.
c. ASCAP, Customer Licensees, New Media & Internet Licenses, at http://www.ascap.com/weblicense/
feeCalc.aspx.
d. Copyright Royalty Board, Digital Performance Right in Sound Recordings and Ephemeral Recordings, 72 Fed. Reg.
24084 (May 1, 2007).
e. A performance is a single sound recording publicly performed by digital audio transmission, heard by a single
listener. For example, if a webcaster streams 30 songs to 100 listeners in the course of a day, the total
would be 3,000 performances for that day.
f.
ATH is the total hours of programming transmitted during a certain period of time to al listeners. For
example, if a webcaster streamed one hour of music to 1 listener, the ATH for that webcaster would be 1.
If 2 listeners each listened for half an hour, the ATH would also be 1. If 10 listeners listened to 1 hour, the
ATH would be 10, and so forth.
g. Copyright Royalty Board, Determination of Rates and Terms for Preexisting Subscription Services and Satellite
Digital Audio Radio Services, 73 Fed. Reg. 4080 (Jan. 24, 2008).

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Author Contact Information

Brian T. Yeh

Legislative Attorney
byeh@crs.loc.gov, 7-5182




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