This week brings news that a Virginia broadcaster has brought suit to have a court declare that broadcasters who stream their signal on the Internet, but limit the reception of the signal to within 150 miles of their transmitter site, should not have to pay royalties to SoundExchange. As we have written before, when Congress adopted the digital performance royalty for sound recordings in the late 1990s, there was an absolute exemption from the sound recording performance royalty for broadcast transmissions, embodied in Section 114(d)(1)(A). That exemption is not limited by the 150 mile rule. However, there is another section of the law, Section 114(d)(1)(B), that also exempted from royalty payments retransmissions of broadcast transmissions. The law exempted from the 150 mile limit those retransmissions done by other broadcast stations. Thus, FM translators, for instance, can rebroadcast their primary station beyond the 150 mile rule without triggering a sound recording performance royalty. So what was the section on the 150 mile zone for retransmissions intended to cover?
This issue was raised back in the early days of webcasting, when questions were raised as to whether simulcasting of broadcast transmissions were covered by the 150 mile rule. There was some thought that it was in the early days of Internet radio. In the first webcasting decision (the one conducted by a Copyright Arbitration Panel – or CARP, before the Copyright Royalty Board came into existence), evidence was cited that Yahoo! Music, growing out of Mark Cuban’s Braodcast.com which built its business on the retransmission of broadcast station’s over-the-air signals, had set up its royalty structure negotiated with the record labels to take into account that broadcast simulcasts would be exempt. But the Librarian of Congress issued a ruling rejecting that premise for a number of reasons. See the decision here. These included that, because Internet retransmissions of broadcast signals could not be geographically limited, they could not be encompassed within the 150 mile exception of 114(d)(1)(B). The Librarian read the exception as encompassing only retransmissions that could be limited to being wholly within the 150 mile zone. The Librarian also looked at Section 112, and did not find a similar exception in that section which grants a statutory license for the ephemeral copies made in certain transmissions, and thought that such an exemption would be necessary for the retransmission of broadcast signals on the Internet. (We have discussed ephemeral rights before, see e.g. here and here). There the issue sat until the case filed last week.
Continue Reading Broadcaster Asks Court to Declare that Internet Simulcasts of Radio Station Exempt From SoundExchange Royalties If Geo-Limited to a 150 Mile Zone