right for sound recordings, Congress stated that the “classic example of [an exempt transmission
under section 114(d)(1)(A)] is a transmission to the general public by a free over-the-air
broadcast station, such as a traditional radio or television station, and the Committee intends that
such transmissions be exempt regardless of whether they are in a digital or nondigital format, in
whole or in part.”^3123 Thus, the court found it clear that the original 1995 exemption for
broadcast transmissions was limited to over-the-air transmissions, and Congress did not
contemplate protecting AM/FM webcasting, which did not exist at the time. Because the DMCA
amendments in 1998 to the broadcast transmission exemptions were silent on AM/FM
webcasting, the court found no affirmative grounds to believe that Congress intended to expand
the protections contemplated by the original 1995 legislation.^3124
Accordingly, the Third Circuit concluded that Section 114(d)(1)(A)’s nonsubscription
broadcast transmission exemption implicates only over-the-air radio broadcast transmissions, and
does not cover the Internet streaming of AM/FM broadcast signals.^3125
As discussed in detail in Section III.E.2(a) below, in May of 2003, the Digital Media
Association, the American Federation of Television and Radio Artists, the American Federation
of Musicians of the United States and Canada, and the RIAA agreed on a proposal for royalty
rates to be paid for Internet streaming of AM/FM broadcasts for the period from 1998 through
Dec. 31, 2004, and submitted the proposal to the Copyright Office for possible adoption without
a CARP. On May 20, 2003, the Copyright Office published the proposal for comment.^3126
With respect to the related issue of royalties to owners of the copyrights in underlying
musical works that are streamed online, in Nov. 2001, a federal district court in New York
approved an interim agreement reached between radio stations and music-licensing agency
Broadcast Music Inc. (BMI). Under that agreement, radio stations agreed to pay 1.065% of
revenues generated by online music streaming, the same rate that radio stations pay for rights to
broadcast the musical compositions over the airwaves.^3127
Similarly, in Oct. 2004, a federal district court in New York approved a license
agreement negotiated between the American Society of Composers, Authors and Publishers
(ASCAP) and the Radio Music License Committee (RMLC), representing most of the nearly
12,000 U.S. commercial radio stations, for rights to perform ASCAP music over the air and via
simultaneous streaming. The agreement governed the period Jan. 1, 2001 through Dec. 31,
2009.^3128
(^3123) S. Rep. No. 104-128, at 19 (1995).
(^3124) Id. at 1555.
(^3125) Id.
(^3126) 68 Fed. Reg. 27506 (May 20, 2003).
(^3127) Kevin Featherly, “Judge OKs Interim Online-Radio Music Royalty Rate” (Nov. 28, 2001), available as of Feb.
2, 2002 at http://www.newsbytes.com/news/01/172509.html.
(^3128) “Music Publishers Sign Deal on Web Radio” (Oct. 18, 2004), available as of Oct. 19, 2004 at
http://www.washingtonpost.com/wp-dyn/articles/A41418-2004Oct.18.html. The court’s order approving the license