reproduction of the sound recording or the musical work embodied therein is made from
the inception of the transmission through to its receipt by the transmission recipient in
order to make the sound recording audible.The last sentence of this definition might be read to exclude streaming from the definition of
DPDs, an issue which has been the subject of considerable controversy, as discussed further
below.
Section 115(c)(3)(A) provides that the compulsory license includes the right to distribute
“a phonorecord of a nondramatic musical work by means of a digital transmission which
constitutes a digital phonorecord delivery, regardless of whether the digital transmission is also a
public performance of the sound recording under section 106(6) ... or of any nondramatic
musical work embodied therein under section 106(4).”
As in the case of the digital performance right with respect to sound recordings, the
copyright statute provides for royalty rates for the compulsory mechanical license to be set
through voluntary negotiation proceedings noticed by the Copyright Office and, if such
proceedings fail to reach agreements, through CARP proceedings.^3253 The copyright statute
provides that, in setting the terms and rates for the compulsory license, the CARP “shall
distinguish between (i) digital phonorecord deliveries where the reproduction or distribution of a
phonorecord is incidental to the transmission which constitutes the digital phonorecord delivery
[usually referred to as “incidental DPDs”], and (ii) digital phonorecord deliveries in general
[usually referred to as “general DPDs”].”^3254 Voluntary negotiation and/or CARP proceedings
are generally to be repeated in each fifth calendar year after 1997.^3255 A CARP proceeding,
Docket No. 99-4 CARP DPRA, relating to DPDs was initiated and remained open for many
years, but was terminated by the Copyright Office on Aug. 6, 2007 pursuant to the Royalty and
Distribution Reform Act of 2004, which eliminated the CARP system and replaced it with the
CRB. The Copyright Office noted that subsequent proceedings regarding the rates for Section
115 must be initiated under the new CRB system.^3256
Because Congress did not define what constitutes an incidental DPD, much controversy
has arisen with respect to them:
- Whether streaming constitutes a DPD at all;
- If so, whether streaming involves incidental DPDs or general DPDs;
- Whether limited downloads should be classified as incidental DPDs or general DPDs;
(^3253) 17 U.S.C. § 115(c)(3)(C) & (D).
(^3254) Id. § 115(c)(3)(D).
(^3255) Id. § 115(c)(3)(F).
(^3256) 72 Fed. Reg. 45071, 45072 (Aug. 10, 2007).