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H.L.C.
107TH CONGRESS
2D SESSION
H. R. 


IN THE HOUSE OF REPRESENTATIVES
Mr. INSLEE introduced the following bill; which was referred to the Committee
on 















A BILL
To amend title 17, United States Code, with respect to
royalty fees for webcasting, and for other purposes.
Be it enacted by the Senate and House of Representa- 1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ŒŒInternet Radio Fair- 4
ness Actıı. 5
SEC. 2. APPLICABILITY OF ROYALTY RATES TO SMALL 6
BUSINESS CONCERNS. 7
(a) INAPPLICABILITY OF DETERMINATION OF JULY 8
8, 2002.‹The determination by the Librarian of Congress 9
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H.L.C.
of rates and terms for the digital performance of sound 1
recordings and ephemeral recordings of July 8, 2002, pur- 2
suant to section 112(e) and section 114(f)(2)(B) of title 3
17, United States Code, shall not apply to transmissions 4
and ephemeral recordings by small entities. 5
(b) FUTURE PROCEEDINGS.‹The first determination 6
of terms and rates of royalty payments that is made pur- 7
suant to section 114(f)(2)(B) of title 17, United States 8
Code, after the enactment of this Act shall apply to trans- 9
missions (to which such section applies) that are made by 10
small business concerns during the period beginning on 11
the date of the enactment of the Digital Millennium Copy- 12
right Act and ending on the date provided for in that de- 13
termination. 14
(c) VOLUNTARY NEGOTIATIONS.‹Nothing in this 15
section shall affect the participation of small entities in 16
voluntary negotiation proceedings under section 17
114(f)(2)(A) and (C)(i) of title 17, United States Code. 18
SEC. 3. STANDARD FOR DETERMINING RATES. 19
Section 114(f)(2)(B) of title 17, United States Code, 20
is amended‹ 21
(1) by striking ŒŒSuch rates and terms shall dis- 22
tinguishıı and all that follows through ŒŒcapital in- 23
vestment, cost, and risk.ıı; and 24
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H.L.C.
(2) by inserting after ŒŒas the parties may 1
agree.ıı the following: ŒŒThe copyright arbitration 2
royalty panel shall establish rates and terms in ac- 3
cordance with the objectives set forth in section 4
801(b)(1).ıı. 5
SEC. 4. COSTS OF PROCEEDINGS; REGULATING FLEXI- 6
BILITY. 7
(a) COSTS OF PROCEEDINGS.‹Section 802(c) of title 8
17, United States Code, is amended‹ 9
(1) by inserting after ŒŒIn ratemaking pro- 10
ceedings, the parties to the proceedingsıı the fol- 11
lowing: ŒŒ, except for small entities that are parties 12
to ratemaking proceedings under section 13
114(f)(2)(B),ıı; and 14
(2) by adding at the end the following: ŒŒIn this 15
subsection, the term Œsmall entityı means a small 16
business, small organization, or small governmental 17
jurisdiction, as those terms are defined in section 18
601 of title 5.ıı. 19
(b) REGULATING FLEXIBILITY.‹Section 701(e) of 20
title 17, United States Code, is amended by inserting be- 21
fore the period ŒŒand to the provisions of chapter 6 of title 22
5ıı. 23
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H.L.C.
SEC. 5. ELIMINATION OF CERTAIN STATUTORY LICENSES 1
FOR EPHEMERAL RECORDINGS. 2
(a) ELIMINATION OF STATUTORY LICENSE.‹Section 3
112(a) of title 17, United States Code, is amended by add- 4
ing at the end the following: 5
ŒŒ(3) Notwithstanding the provisions of section 106 6
and paragraph (1) of this subsection, and except in the 7
case of a motion picture or other audiovisual work, it is 8
not an infringement of copyright for a transmitting orga- 9
nization entitled to transmit to the public a performance 10
or display of a work, under a license, including a statutory 11
license under section 114(f), or transfer of the copyright 12
or for a transmitting organization that is a broadcast 13
radio station licensed as such by the Federal Communica- 14
tions Commission and that makes a broadcast trans- 15
mission of a sound recording in a digital format on a non- 16
subscription basis, to make one or more copies or 17
phonorecords of that work, if‹ 18
ŒŒ(A) each copy or phonorecord is retained and 19
used solely by the transmitting organization that 20
made it; and 21
ŒŒ(B) each copy or phonorecord is used solely 22
for the purpose of making the transmitting organi- 23
zationıs own transmissions or for purposes of archi- 24
val preservation or security.ıı. 25
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(b) CONFORMING AMENDMENTS.‹Section 112(e) of 1
title 17, United States Code, is amended‹ 2
(1) by striking in paragraph (1) ŒŒor under a 3
statutory license in accordance with section 114(f)ıı; 4
and 5
(2) by striking in paragraph (1)(B) ŒŒa statu- 6
tory license in accordance with section 114(f) orıı. 7
(c) EFFECTIVE DATE.‹The amendments made by 8
subsection (a) take effect on January 1, 2003. 9
SEC. 6. DEFINITION. 10
In this Act, the term ŒŒsmall entityıı means a small 11
business, small organization, or small governmental juris- 12
diction, as those terms are defined in section 601 of title 13
5, United States Code. 14
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