to be exempt under Section 114(d)(1)(A) from the digital audio transmission performance
copyright, it must be 1) noninteractive, 2) nonsubscription and 3) broadcast. Because the parties
agreed that AM/FM webcasting was not part of an interactive service and was a nonsubscription
transmission, the issue was whether AM/FM webcasting is a “broadcast transmission.”^3118
The court concluded form the statutory language and the legislative history that AM/FM
webcasting is not a broadcast transmission. With respect to the statutory language, Section
114(j)(3) defines a broadcast transmission as “a transmission made by a terrestrial broadcast
station licensed as such by the Federal Communications Commission.” The court gave
“terrestrial” its “natural and logical meaning of earthbound.”^3119 The parties disputed, however,
whether a “broadcast station” should be read to refer to the broadcaster as a business entity that
operates broadcasting facilities, or to the broadcasting facilities themselves (and by extension the
mode of transmission). The court adopted the latter interpretation, noting that the former
interpretation would lead to anomalous consequences. One such consequence would be that any
entity that operated at least one FCC-licensed radio station would have carte blanche to digitally
perform recordings via any conceivable transmission medium (in a noninteractive,
nonsubscription manner) without limitation or copyright liability.^3120
Another anomalous consequence would be that the meaning of the modifier “terrestrial”
would become absurd. Specifically, under the interpretation in question, a terrestrial broadcast
station would mean a business entity that is earthbound, in contrast, presumably, to one that is
space-borne. The court noted that such an interpretation made no sense given that no space-
borne business entities exist. On the other hand, an interpretation limited to earthbound
broadcasting facilities, as opposed to broadcasting done through satellites, would be entirely
plausible.^3121 Accordingly, the court concluded that a
“broadcast station licensed as such by the [FCC],” as the term is used in Section
114(j)(3), refers to the physical radio station facility that broadcasts radio signals
over the air, and not to the business entity that operations the radio station. A
“broadcast transmission” under § 114(d)(1)(A) would therefore be a radio
transmission by a radio station facility operated subject to an FCC license and
would not include a webcast. AM/FM webcasting does not meet the definition of
a “nonsubscription broadcast transmission” and does not, therefore, qualify under
§ 114(d)(1)(A) for an exemption from the digital audio transmission performance
copyright of § 106(6).^3122The court noted that the legislative history was consistent with its interpretation. In the
1995 Senate Report, accompanying the legislation that first established a digital performance
(^3118) Id. at 1549.
(^3119) Id. at 1550.
(^3120) Id.
(^3121) Id.
(^3122) Id. at 1552.