[RFU] Re: [Rfu-barnraising] Re: {leti} Re: the automation question

[Norman Stockwell]

Doug Hoepker wrote:

>By the way, are there different rules for LPFM and FM
>stations regarding webcasting? Because I listen to
>several streaming stations (KEXP in Seattle or WFMU in
>Jersey) and they both announce ahead of time what
>they're going to play, and in the case of KEXP they
>most definitely exceed the number of spins per disc
>rule in any given week.
>
>What gives?
>
>  
>

I am pasting below the most thorough treatment of the rules that I am 
aware of. It is a pdf converted to text, so I apologize for the 
formatting. On request I could send the pdf version, along with the 
Copyright Office's own 18 page summary of the DMCA. But I didn't think 
the whole list would want the attachments. Norm.

=====
Reference Memo
September 2005
Media Memo is published by Garvey Schubert Barer. It contains 
information necessarily of a general nature that
cannot be regarded as legal advice. The firm will be pleased to provide 
additional details and to discuss matters
contained in Media Memo as they may apply in specific situations.
Voice 202/965-7880 © garvey schubert barer Fax 202/965-1729
1000 Potomac Street, NW, Washington, DC 20007
Streaming
Copyright Basics
How do you meet the demand to “give the consumer what they want when
they want it?” Streaming your station on the Internet is one way to advance
that objective. With the uncertainty having been largely resolved over what
it will cost in copyright royalties, now may be the time to stream your
station’s programs.
Background
Broadcasters are familiar with paying royalties to ASCAP, BMI and SESAC
for playing songs over-the-air. Those fees are paid to the performing 
rights
societies to compensate songwriters and music composers. Those societies
also charge to stream your signal over the Internet.1
What confused many broadcasters was the new requirement that royalties
also be paid to the copyright owner of the sound recording and to the
performers of that music, in addition to the songwriters and composers.
Traditionally, broadcasters have been exempt from making payments to
record companies and performers for playing sound recordings over-the-air,
because of the notion that if radio stations did not play the songs, no one
would hear them and buy their records. Not so for use of music on the
Internet.2
In 1995, driven by the fact that digital technology allows flawless 
copying,
sound recording copyright owners obtained from Congress the exclusive
right in the performance of their music by digital audio transmission in 
the
Digital Performance Right in Sound Recordings Act. The exemption for
broadcasters’ over-the-air transmission of digital sound recordings was
preserved in that Act. That exemption, however, does not apply to the
simultaneous transmission of the over-the-air broadcast via the Internet.
With no mechanism for payment of royalties to record companies and
performers, Congress enacted the Digital Millennium Copyright Act of 1998
(the “DMCA”). That Act created a statutory license for performances of
sound recordings over the Internet, provided certain conditions were met.
Eligibility for the statutory license requires adherence to defined
programming restrictions and other technical conditions, payment of
royalties, recordkeeping, and making certain filings, which are 
discussed in
greater detail below. If you are not eligible for the statutory license, 
or if
you want to provide an interactive music service, you will need to 
obtain the
consent of each individual copyright owner to use the music or else risk a
claim of copyright infringement.
Following conclusion of proceedings to adopt regulations implementing the
Acts, SoundExchange became the entity charged with collecting the
royalties and distributing the royalties to the sound recording copyright

Reference Memo – 2 – September 2005
owners and performers. Now an independent organization, SoundExchange
was initially a creation of the Recording Industry Association of America
(“RIAA”), which represents the record companies. Currently,
SoundExchange is set up to handle only streaming royalties, and is not able
to administer podcasting licenses even if the podcast otherwise met the
eligibility requirements discussed in the next section.
Eligibility for
Statutory
License
Programming Restrictions. As a condition for using the statutory license
(and in the absence of having a direct license from the copyright owners),
any webcaster, including radio stations simultaneously streaming their 
overthe-
air signal, must meet the “sound recording performance complement” on
each channel streamed. What does that mean?
• During a three hour period:
.. Play no more than three songs from a particular album;
.. Play no more than two songs consecutively from a
particular album;
.. Play no more than four songs by a particular artist;
.. Play no more than four songs from a boxed set; and
.. Play no more than three songs consecutively from a
boxed set.
If you want to stream additional channels, not just the over-the-air 
broadcast
transmission, those additional channels must comply with the sound
recording performance complement. The sound recording performance
complement also applies to archived and looped programs, defined below.
Archived Programming. Archived programs – those that are posted on a
website for listeners to hear repeatedly on-demand in the same order – may
not be less than five hours in duration. Permitted archived programs may
reside on the website for no more than a total of two weeks. Merely
changing one or two songs does not meet this condition, nor can programs
be taken off for a short period of time and then made available again.
The limitations on archived programs do not apply to recorded events or
broadcast transmissions that make no more than an incidental use of sound
recordings, as long as such transmissions do not contain an entire sound
recording or feature performances of a particular sound recording.
Looped programming. Looped or continuous programs – those that are
performed continuously so that the program automatically starts over when
it is finished – may not be less than three hours in duration. Archived
programs, on the other hand, always start at the beginning of the program.
Again, merely changing one or two songs does not meet this condition.

Reference Memo – 3 – September 2005
Repeat of other programs limited. Programs that are retransmitted at
publicly-announced times in advance can be repeated only as follows:
• Repeats of a program are limited to three times in a twoweek
period for programs under one hour in duration.
• Repeats of a program are limited to four times in a twoweek
period for programs over one hour.
Limitations on prior announcements. Advance program schedule or prior
announcement of song titles may not be transmitted by text, video or audio.
Webcasters may name one or two artists or a particular genre of music to
illustrate the type of music on a particular channel. It is permissible to
announce the name of a song immediately before it is performed or to
announce that a particular artist will be featured at an unspecified future
time. It is the prior announcement of the song that is a problem, because
such an announcement facilitates the copying of a particular musical work.
Identify song, artist and album. When performing a sound recording (i.e.,
during, not before), a webcaster must identify, in textual data, the sound
recording, the album and the featured artist, if receivers are capable of
displaying the information.
Do not falsely suggest a link between recordings and advertisements. A
webcaster may not perform a sound recording in a way that falsely suggests
a connection between the copyright owner or recording artist and a
particular product or service.
Take steps to disable copying by recipient. A webcaster must disable
copying by a transmission recipient if the technology used by the webcaster
enables the webcaster to do so, and must also take care not to induce or
encourage copying by transmission recipients.
Accommodate technical protection measures. A webcaster must
accommodate the transmission of measures widely-used by sound recording
copyright owners to identify or protect copyrighted works, if they are
technically feasible of being transmitted without imposing substantial
burdens on the transmitting entity.
Cooperate to defeat scanning. A webcaster must cooperate with copyright
owners to prevent recipients from automatically scanning transmissions in
order to select particular recordings, if it will not impose substantial 
costs or
burdens on the transmitting entity.
Transmission of bootlegs not covered. The statutory license is limited to
transmissions made from lawful copies of sound recordings. Transmissions
made from bootlegs or pre-released recordings (unless the performance of a
pre-released recording is otherwise authorized by the copyright owner) are
not covered by the statutory license.

Reference Memo – 4 – September 2005
Automatic switching of channels prohibited. Webcasters must not
automatically and intentionally cause a device receiving the 
transmission to
switch from one program channel to another. The statutory license does not
cover interactive services where the consumer selects the songs.
Transmission of copyright management information required. If technically
feasible, transmissions by a webcaster must be accompanied by the
information encoded in the sound recording by the copyright owner that
identifies the title of the song, the featured artist and any other related
information.
Digital Sound
Recording
Royalty Rates
Payable to
SoundExchange
Commercial Webcasters (including Broadcast Simulcasters). Prior to
commencing streaming, webcasters need to elect with SoundExchange one
of two methods for calculating royalties: Per Performance or Per Aggregate
Tuning Hour. The statutory license rates effective through 2005 are as
follows:
(1) Per Performance Option $0.000762 per performance, except
that 4% of performances shall bear
no royalty.
(2) Aggregate Tuning Hour Option
Non-Music Programming $0.000762 per aggregate tuning
hour for programming reasonably
classified as news, talk, sports or
business programming.
Broadcast Simulcasts $0.0088 per aggregate tuning hour
for broadcast simulcast
programming not reasonably
classified as news, talk, sports or
business programming.
Other Programming (including music programming) $0.0117 for
programming other than broadcast
simulcast programming and
programming reasonably classified
as news, talk, sports or business
programming.
“Aggregate Tuning Hours” are the total hours of programming the Statutory
Licensee transmitted to all “Listeners,” defined as a player, receiving 
device
or other point capable of receiving the digital sound recording (read 
that to
mean computer terminal). For example, if the station or webcaster streamed
on the Internet for one hour to 10 simultaneous Listeners, the ATH would be
10. This rate works out to less than one penny per Listener per hour for

Reference Memo – 5 – September 2005
music formatted broadcast simulcasters. Licensees may deduct from the
ATH the time during which it transmitted a song for which it obtained a
direct license from the copyright owner.
If no election for the ATH payment method is made, the default rate is
calculated on a per Performance basis (option 1 above).
“Performance” under the Copyright Office regulations means “each instance
in which any portion of a sound recording is publicly performed to a
Listener” but excludes:
1. a sound recording that is not copyrighted (i.e., because of its
age, it is in the public domain3);
2. a sound recording for which the licensee had a direct license
from the copyright owner; and
3. an incidental performance that both:
a. makes no more than incidental use of the music (e.g.,
“brief musical transitions in or out of commercials or
program segments, brief performances during news, talk
or sports programming, brief background performances
during disk jockey announcements, brief performances
during commercials of sixty seconds or less in duration,
or brief performances during sporting or other public
events”), and
b. “other than ambient music that is background at a public
event, does not contain an entire sound recording and
does not feature a particular sound recording of more
than thirty seconds” (e.g., theme song).
The minimum annual payment is $500 per channel. If the Statutory Licensee
streamed more than 5 channels, however, the minimum annual payment
would be no more than $2,500.
Small Commercial
Webcasters
Small Commercial Webcasters (including Broadcast Simulcasters). Pursuant
to an agreement reached under the Small Webcasters Settlement Act
(“SWSA”), small commercial webcasters can elect to pay the rates set forth
below, or those set forth above for commercial webcasters. Services that
meet the definition of an “eligible small webcaster” and file a timely 
notice
of election, pay the following rates through 2005: The greater of 10 
percent
of the first $250,000 in gross revenues and 12 percent of any gross 
revenues
in excess of $250,000 during the applicable year, or 7 percent of the
webcaster’s expenses during the applicable year.
Small webcasters/broadcast simulcasters are required to pay an annual
minimum fee of either $2,000 if the webcaster has gross revenues of not

Reference Memo – 6 – September 2005
more than $50,000 in 2004, or $5,000 if the webcaster has gross revenues of
more than $50,000 in 2004.
Generally, a “small webcaster” is an entity with not more than 
$1,250,000 in
gross annual revenues (including from its affiliates, subscriptions 
services,
and third-party participation revenues – e.g., sale of advertising or 
sale of
sound recordings) in 2004 and reasonably expects to have the same in 2005.
Gross revenues include all revenues from media and entertainment related
businesses, not just web generated revenues. The full definition of gross
revenues contained in the Small Webcasters Agreement should be reviewed
to determine how to calculate gross revenues for a specific webcaster’s
business, as certain variations may apply.
Noncommerical
Webcasters
Noncommercial Webcasters (including Broadcast Simulcasters that are non-
Corporation for Public Broadcasting members). Noncommercial
webcasters can choose to pay in accordance with the rates set by the
Librarian of Congress or in accordance with the rates reached in a 
negotiated
settlement under the Small Webcasters Settlement Act (“SWSA”) of 2002.
Noncommercial Webcaster/Broadcast Simulcaster- Rates set by the
Librarian of Congress. The rate for non-CPB, noncommercial
broadcasters is $0.0002 ($0.02 cents) per performance plus an
additional 8.8% for ephemeral recordings, with an annual minimum
fee of $500. Those rates include the simulcast of the station's overthe-
air signal plus up to two Internet-only channels. Additional side
channel transmissions must pay a per performance rate of $0.0007
($0.07 cents) plus an additional 8.8% for any ephemeral recordings.
The rates set by the Librarian for non-broadcast webcasters are as
set forth for the commercial webcasters, above, or, if a timely
election is made, the non-broadcast webcaster may pay the rates
under the SWSA Agreement described below.
SWSA Agreement. Services that meet the definition of a
“noncommercial webcaster” and file a timely notice of election may
pay the rates under the SWSA Agreement. For 2005, the minimum
fee is $500 per channel, or $250 if the program format is
news/talk/sports. These licensees must also pay a $25 contribution
to a data fund to avoid having to file Records of Use described
below. Any month in which programming streamed per channel is
in excess of 146,000 ATH (about 200 listeners per hour averaged
over the month), an additional usage fee of $0.0002176 per
performance or $0.00251 per ATH (or $0.0002 per ATH for
news/talk/sports) is due. Noncommercial webcasters must qualify as
a tax exempt organization or a governmental entity using the
webcast for exclusively public purposes.
Noncommercial broadcaster groups that stream more than three
stations must pay $500 per year plus any applicable usage fees for
each subgroup of up to three stations and two associated side

Reference Memo – 7 – September 2005
channels. Noncommercial services other than broadcasters that
transmit more than three channels must pay $500 per channel as
well as usage fees at the commercial webcaster rates described
above for channels in excess of three.
Noncommercial
Educational Entities
Noncommercial Educational Entities. Noncommercial Educational Entities
((NEE’s) can choose to pay in accordance with the rates set by the 
Librarian
of Congress or by the rates reached in a negotiated settlement under the
SWSA.
Rates set by Librarian of Congress. These are the same rate set forth
above for Noncommercial Webcasters.
SWSA Agreement. Services that meet the definition of a
“noncommercial educational entity” and file a timely notice of
election may pay the rates established in the SWSA Agreement. For
2005, the minimum fee is $500, or $250 at schools with fewer than
10,000 students. These entities must pay a $25 contribution to a data
fund to avoid having to file Records of Use described below. Any
month in which programming streamed per channel is in excess of
146,000 ATH, an additional usage fee of $0.0002176 per
performance or $0.00251 per ATH (or $0.0002 per ATH for
news/talk/sports) is due. NEE webcasters are operated by, or
primarily staffed by students from, accredited schools, but are not
qualified to receive CPB funding.
NEE broadcaster groups that transmit more than three stations must
pay $500 per year plus any applicable usage fees for each subgroup
of up to three stations and two associated side channels. NEE
services other than broadcasters that transmit more than three
channels must pay usage fees at the commercial webcaster rates
described above for channels in excess of three.
CPB Stations CPB Stations. National Public Radio (“NPR”) member stations 
and public
stations that are qualified to receive funding from the Corporation for 
Public
Broadcasting (“CPB”) were covered, provided they registered, by a license
agreement entered into between NPR/CPB and RIAA that expired
December 31, 2004. No private license agreement has yet been entered into
between NPR/CPB and SoundExchange for the 2005 license period.
Timing of Payments Timing of Payments. All payments must be submitted 
monthly with a
Statement of Account available at http://www.soundexchange.com.
Payments are made monthly within 45 days after the end of each month. The
minimum annual fee is paid at the beginning of the year, or upon initiation
of service, which fee is credited toward the royalties owed each month 
until
depleted. A new minimum annual fee is paid at the beginning of each year.

Reference Memo – 8 – September 2005
The rates listed above are effective through December 31, 2005. A
proceeding before a panel of Copyright Royalty Judges will set the rates 
for
the period between January 1, 2006 and December 31, 2010, unless rates are
negotiated privately between copyright owners and separate industry groups.
Recordkeeping Records to be Maintained. The Copyright Office adopted 
interim
recordkeeping requirements.4 For each song that is streamed, the following
records must be kept:
1. Name of Service (e.g., XYZ Broadcasting, Inc.).
2. Transmission Category (e.g., “Eligible nonsubscription transmission
of broadcast simulcast programming not reasonably classified as
news, talk, sports or business programming” defined in the rule as
category code “B”).
3. Featured Artist (the full name of the individual or band).
4. Sound Recording Title (the song title).
5. Sound Recording Identification – either:
a. Album Title and Marketing Label (if a particular sound
recording has been released for promotional purposes before
the album title is available, the information must be kept
only if it is available before or at the time of the
performance, but must be supplied if it is available for
subsequent performances), or
b. International Standard Recording Code (ISRC) (imbedded
in promotional and commercially released sound recordings
which can be read by software).
6. Total Performances – either:
a. Aggregate Tuning Hours (measures the total number of
listener hours by all who have accessed a service during a
give time period), Channel (for broadcasters, call sign or
facility ID number) or Program Name, and Play Frequency
(the total times a sound recording is “played” – i.e., offered
or transmitted by the service – regardless of the number of
listeners, during the reporting period), or
b. Actual Total Performances (for those with the technological
ability to identify accurately the number of times a sound
recording is “performed” – i.e., listened to or accessed – and
a separate record is required for each “play”.).

Reference Memo – 9 – September 2005
Filing
Requirements
Notice of Use of Sound Recordings under Statutory License. Before you
start streaming, a Notice of Use must be filed with the Copyright Office in
Washington, DC. The current filing fee is $20.
Notice of Election. Prior to commencing streaming, a Notice of Election
must be submitted to SoundExchange. The notice indicates under which
payment scheme you qualify, such as an eligible small commercial
webcaster, noncommercial webcaster, noncommercial educational entity, or
non-subscription transmission service (which includes most commercial
broadcast simulcasters). The latter election notice also allows you to make
the payment election for calculating royalties under the ATH method, which
usually works out cheaper than paying per performance royalties, depending
on how many songs per hour are streamed. The default if no election is
made at the start of streaming is to pay on a per performance basis.
Statements of Account. Monthly Statements of Account must be filed with
SoundExchange forty-five days after the close of each month, even if you
have not incurred royalties that exceed the minimum annual fee. Once the
minimum annual payment has been depleted, royalty payments must be
submitted with the Statement of Account.
Reports of Use. The records described above must be maintained by the
music streamer, which identify the featured artist, the song title, 
album title,
marketing label, and number of performances (i.e., number of listeners per
song). Reports of Use must be submitted to SoundExchange quarterly based
on two weeks per quarter. The two weeks can be consecutive or two
separate 7-day periods within the quarter. The 7-day consecutive period can
start on any day of the week.
While the interim recordkeeping rules are based on a two-week survey
during the quarter, the Copyright Office anticipates its future rules will
require periodic reporting of sound recording performances on a year-round
census so that all transmitted sound recordings are counted and their
listeners measured. The records are needed so that royalties can be
distributed to copyright owners based on actual use of their music. In
addition, the Copyright Royalty Judges are currently considering the 
type of
format in which the records must be submitted to SoundExchange.
Conclusion While anything new can seem complicated, streaming is now 
established
and should be ignored only at your peril as on-line music providers nibble
away at your audience. With the future of the Internet going mobile, it
makes even more sense to stream. The SoundExchange website provides
more details regarding royalty rates, and offers easy access to its 
forms online.
Please note, however, that this article is only an overview of the
requirements. Specific questions and situations unique to your business
should be directed to counsel.
Streaming without following the rules is perilous. Failing to take 
advantage
of the statutory license means copyright infringement. When statutory
damages can exceed $150,000 per song per play, figuring out how to play by

Reference Memo – 10 – September 2005
the rules seems a small price to pay. Do not think the record companies 
will
not go after you. After all, they are suing college students for illegal 
music
downloads – there is no reason to think they won’t also come after you.
________________________
1 Under the new industry-wide blanket licenses negotiated between the 
Radio Music License Committee (“RMLC”)
and ASCAP and between RMLC and BMI, royalties applicable to streaming 
the station’s over-the air signal have
been folded into the blanket over-the-air license.
SESAC requires a separate Internet license, which can be obtained 
through its website at
http://www.sesac.com/licensing/internetLicensing.asp (minimum fee is $84 
per six months per web page).
Webcasters, and broadcasters who transmit streams in addition to the 
stream of their over-the-air signals, need to
obtain Internet licenses from ASCAP (http://www.ascap.com/weblicense/ - 
minimum annual fee in 2005 is $288),
BMI (http://www.bmi.com/licensing/webcaster/ - minimum annual fee in 
2005 is $283), and SESAC (see web site
address above).
2 As with any industry, copyright has its own terminology. “Use” in its 
simplest terms for broadcasters means
playing the song. A “performance” also means playing the song. When it 
comes to royalty calculations for Internet
transmissions, however, playing one song heard by one listener is a 
single performance. If one song is heard by
multiple listeners, the number of performances is multiplied by the 
number of listeners. Digital “listeners” are the
receiving devices (e.g., computers), not how many people may be nearby 
who hear the stream.
3 Determining which recordings are in the public domain can be a complex 
task which should be undertaken only
with the assistance of counsel. For example, a recent ruling out of the 
New York Court of Appeals held that
recording artists’ recordings are protected in perpetuity under that 
state's common law standards.
4 Similar types of records needed to be provided under the confidential 
CPB agreement with RIAA that has yet to be
extended to 2005. Recordkeeping requirements, however, do not apply to 
Noncommercial Webcasters and NEE
entities who elected to pay royalties under the SWSA Agreement and pay a 
data fund fee to avoid having to file
Records of Use. The recordkeeping requirements for entities electing to 
pay royalties as Small Commercial
Webcasters, nevertheless, have slightly more onerous recordkeeping 
requirements, including not only the types of
records mentioned in this section but also additional requirements set 
forth at pages 5 and 6 of the document
available at this link: 
http://www.soundexchange.com/licensee/documents/Rates_Terms.pdf.
This Reference Memo has been provided to the NAB Radio Show 2005 courtesy
of Garvey Schubert Barer. For further information, contact Melodie 
Virtue at 202-
968-7880 or at mvirtue at gsblaw.com. You may also contact any of the 
attorneys
in the Communications and Information Technology Group listed below.
Washington, DC Communications and Information Technology Group
John Crigler......................... 202-298-2521 Erwin G. 
Krasnow…….202-298-2161
Deborah Salons………… ... 202-965-7370 John M. Pelkey………..202-298-2528
James E. Dunstan………….202-298-2534 Henry A. Solomon…….202-298-2529
John Wells King...... ………202-298-2520 Melodie A. Virtue……..202-298-2527