BY:Neil J. Rosini
The license is available for subscription transmissions and eligible nonsubscription transmissions that are not interactive. The distinction between “subscription” and “nonsubscription” currently has limited significance insofar as availability of the license is concerned, because the same rules regarding availability generally apply to both. (Some older subscription services — transmitting on July 31, 1998– have been grandfathered into somewhat more lenient availability rules.) (§114 (d)(2)(A),(B),(C)). The distinction may assume greater significance; however, at the end of the fee determination process (not yet complete) if the fee computation turns out to be different for each type of transmission.
By “subscription transmission” is meant “a transmission that is controlled and limited to particular recipients, and for which consideration is required to be paid or otherwise given by or on behalf of the recipient to receive the transmission or a package of transmissions including the transmission” (§114(j)(14)).
By “nonsubscription transmission” is meant any transmission that is not a subscription transmission, including all that are free of charge (§114(j)(9)); and “eligible nonsubscription transmission” is a “noninteractive nonsubscription digital audio transmission … that is made as part of a service that provides audio programming consisting, in whole or in part, of performances of sound recordings … if the primary purpose of the service is to provide to the public such audio or other entertainment programming, and the primary purpose of the service is not to sell, advertise or promote particular products or services other than sound recordings, live concerts, or other music-related events.” (§114(j)(6)). The Joint Explanatory Statement of the Committee of Conference, by way of explanation, notes: “an ordinary commercial Web site that was primarily oriented to the promotion of a particular company or to goods or services that are unrelated to the sound recordings or entertainment programming, but that provides background music would not qualify as a service that makes eligible nonsubscription transmissions.” (At H10071).1
The statutory license is not available if the transmission is part of an “interactive service.” By “interactive service” is meant: “one that enables a member of the public to receive a transmission of a program specially created for the recipient, or on request, a transmission of a particular sound recording, whether or not as part of a program, which is selected by or on behalf of the recipient. The ability of individuals to request that particular sound recordings be performed for reception by the public at large, or in the case of a subscription service, by all subscribers of the service, does not make a service interactive, if the programming on each channel of the service does not substantially consist of sound recordings that are performed within one hour of the request or at a time designated by either the transmitting entity or the individual making such request.2 If an entity offers both interactive and noninteractive services (either concurrently or at different times), the noninteractive component shall not be treated as part of an interactive service” (§114(j)(7)).
The Joint Explanatory Statement of the Committee of Conference suggested that “the phrase ‘program specially created for the recipient’ be interpreted reasonably in light of the remainder of the definition of ‘interactive service,’” and offered examples of transmissions that would be deemed parts of interactive services (at H10071):
1. Those that are specially created for a particular individual.
2. Transmissions for which the recipient “might identify certain artists that become the basis of the personal program.” The recipient “need not select the particular recordings in the program for it to be considered personalized.”
3. A transmission that is part of a service that allowed “a small number of individuals to request that sound recordings be performed in a program specially created for that group and not available to any individuals outside of that group.”
In contrast, the statement gives the following example of a service that is not interactive: One that “merely transmitted to a large number of recipients of the service’s transmissions a program consisting of sound recordings requested by a small number of those listeners.” (Id.)
Furthermore, a transmission becomes ineligible for a statutory license if it exceeds the “sound recording performance complement” (with an exception related to retransmissions of broadcast transmissions) (§114(d)(2)(C)(i)). By “sound recording performance complement” is meant: “the transmission during any 3-hour period, on a particular channel used by a transmitting entity, of no more than – (A) 3 different selections of sound recordings from any one phonorecord lawfully distributed for public performance or sale in the United States, if no more than 2 such selections are transmitted consecutively; or (B) 4 different selections of sound recordings – (i) by the same featured recording artist; or (ii) from any set or compilation of phonorecords lawfully distributed together as a unit for public performance or sale in the United States, if no more than three such selections are transmitted consecutively; Provided, That the transmissions of selections in excess of the numerical limits provided for in clauses (A) and (B) from multiple phonorecords shall nonetheless qualify as a sound recording performance complement if the programming of the multiple phonorecords was not willfully intended to avoid the numerical limitations prescribed in such clauses” (§114(j)(13)).
A transmission may also become ineligible for statutory licensing if any of the following conditions are not satisfied:
1. The transmitting entity cannot “automatically and intentionally cause any device receiving the transmission to switch from one program channel to another” (§114(d)(2)(A)(ii)) [subject to an exception for transmissions to a business establishment].
2. Subject to a minor exception (relating to communication of the copyright status of a sound recording) the transmission of the sound recording should be accompanied “if technically feasible, by the information encoded in that sound recording, if any, by or under the authority of the copyright owner of that sound recording, that identifies the title of the sound recording, the featured recording artist who performs on the sound recording, and related information, including information concerning the underlying musical work and its writer” (§114(d)(2)(A)(iii)).
3. The transmitting entity may not “cause to be published, or induce or facilitate the publication, by means of an advance program schedule or prior announcement, the titles of the specific sound recordings to be transmitted, the phonorecords embodying such sound recordings, or, other than for illustrative purposes, the names of the featured recording artists, except that this clause does not disqualify a transmitting entity that makes a prior announcement that a particular artist will be featured within an unspecified future time period …” and subject to an exception for retransmission of a terrestrial broadcast transmission (§114(d)(2)(C)(ii)).
4. The transmission may not be part of an “archived program” of less than five hours’ duration and no archived program can be made available for a period exceeding two weeks (§114(d)(2)(C)(iii)(I), (II)). (An “archived program” is a “predetermined program available repeatedly on the demand of the transmission recipient and that is performed in the same order from the beginning,” except for a recorded event or broadcast transmission that makes no more than an incidental use of sound recordings and does not contain an entire sound recording or feature a particular sound recording (§114(j)(2)). The Joint Explanatory Statement of the Committee of Conference addresses how the two-week limit should be applied: “Transmissions that are part of archived programs more than five hours long are eligible only if the archived program is available on the webcaster’s site or a related site for two weeks or less. The two-week limitation is to be applied in reasonable manner to achieve the objectives of this subparagraph, so that, for example, archived programs that have been made available for two weeks are not removed from a site for a short period of time and then made available again. Furthermore, altering an archived program only in insignificant respects, such as by replacing or reordering only a small number of the songs comprising the program, does not render the program eligible for statutory licensing.” (at H10070).
5. The transmission may not be part of a “continuous program” of less than three hours’ duration (§114(d)(2)(C)(iii)(III)). A “continuous program” is a “predetermined program that is continuously performed in the same order and that is accessed at a point in the program that is beyond the control of the transmission recipient” (§114(j)(4)). Hence, looped programs that are always performed in the same order and are accessed in a continuous stream should be at least three hours long. Apparently referring to the phrase, “in the same order,” the Joint Explanatory Statement of the Committee of Conference notes that “[m]inor alterations in the program should not render a program outside the definition of ‘continuous program.’” (at H10071).
6. The transmission cannot be part of “an identifiable program in which performances of sound recordings are rendered in a predetermined order, other than an archived or continuous program,” that is transmitted more than 3 times in any two week period, which times have been publicly announced in advance – for programs of less than 1 hour – or more than 4 times in any two week period, which times have been publicly announced in advance – for longer programs –subject to exceptions for certain retransmissions of terrestrial broadcasts (§114(d)(2)(C)(iii)(IV)). Again, the Joint Explanatory Statement of the Committee of Conference addresses how the two-week period should be interpreted: “the two-week limitation … [should] be applied in a reasonable manner consistent with its purpose so that, for example, a transmitting entity does not regularly make all of the permitted repeat performances within several days.” (at H10070).
7. The transmitting entity cannot “knowingly perform the sound recording, as part of a service that offers transmissions of visual images contemporaneously with transmissions of sound recordings, in a manner that is likely to cause confusion, to cause mistake, or to deceive, as to the affiliation, connection, or association of the copyright owner or featured recording artist with the transmitting entity or a particular product or service advertised by the transmitting entity, or as to the origin, sponsorship or approval by the copyright owner or featured recording artist of the activities of the transmitting entity other than the performance of the sound recording itself “(§114(d)(2)(C)(iv)). This forbids, for example, “transmitting an advertisement for a particular product or service every time a particular sound recording or artist is transmitted…” (Joint Explanatory Statement of the Committee of Conference) (at H10070).
8. The transmitting entity must cooperate “to prevent, to the extent feasible without imposing substantial costs or burdens, a transmission recipient or any other person or entity from automatically scanning the transmitting entity’s transmissions alone or together with transmissions by other transmitting entities in order to select a particular sound recording to be transmitted to the transmission recipient” subject to an exception for certain satellite digital audio services existing on or before July 31, 1998 (§114(d)(2)(C)(v)).
9. The transmitting entity can take “no affirmative steps to cause or induce the making of a phonorecord by the transmission recipient, and if the technology used by the transmitting entity enables the transmitting entity to limit the making by the transmission recipient of phonorecords of the transmission directly in a digital format, the transmitting entity sets such technology to limit such making of phonorecords to the extent permitted by such technology” (§114(d)(2)(C)(vi)).
10. Phonorecords of the sound recording in question must have been “distributed to the public under the authority of the copyright owner or the copyright owner authorizes the transmitting entity to transmit the sound recording, and the transmitting entity makes the transmission from a phonorecord lawfully made under the authority of the copyright owner,” with an exception for retransmission of certain terrestrial broadcasts (§114(d)(2)(C)(vii)). This excludes copies of phonorecords obtained surreptitiously prior to release, bootleg recordings of a live musical performance without the authority of the performer, and pirated recordings. (See Joint Explanatory Statement of the Committee of Conference). (at H10070).
11. The transmitting entity must accommodate and not interfere with “the transmission of technical measures that are widely used by sound recording copyright owners to identify or protect copyrighted works, and that are technically feasible of being transmitted by the transmitting entity without imposing substantial costs on the transmitting entity or resulting in perceptible aural or visual degradation of the digital signal” with an exception for certain satellite digital audio services existing on or before July 31, 1998 (§114(d)(C)(viii)).
12. The transmitting entity must also identify “in textual data the sound recording during, but not before, the time it is performed, including the title of the sound recording, the title of the phonorecord embodying such sound recording, if any, and the featured recording artist, in a manner to permit it to be displayed to the transmission recipient by the device or technology intended for receiving the service provided by the transmitting entity,” except this obligation does not apply in the case of certain retransmissions of terrestrial broadcasts (§114(d)(2)(C)(ix)).
1 Congressional Record: October 8, 1998 (House) pages H10048-H10074.
Parenthetical references in this memorandum consisting of an H followed by a five digit numeral, refer to page numbers of this report.
2 Logically, in the case of the transmitting entity, “designated” means “publicly announced in advance.”