(d) The Interactive Streaming and Limited Download Agreement of
2008
On Jan. 7, 2008, DiMA requested pursuant to Section 802(f)(1)(B) that the CRB refer to
the Register of Copyrights the question of whether interactive streaming constituted a DPD.
Copyright Owners objected to the request, and after holding oral arguments on the question, the
CRB denied the request, stating that the question of what is “interactive streaming” is a question
of fact, not a question of law as required by Section 802(f)(1)(B).^3283
On September 22, 2008, a royalty agreement was announced between DiMA, the RIAA,
the national Music Publishers’ Association (NMPA), the Nashville Songwriters Association
International (NSAI), and the Songwriters Guild of America (SGA). The agreement proposed
mechanical royalty rates for interactive streaming and limited downloads, inclusive of
subscription and ad-supported services, and generally called for rates of 10.5% of revenue, minus
amounts owed for performance royalties. The parties also confirmed that reproduction or
distribution licenses are not required from copyright owners for non-interactive, audio-only
streaming services.^3284 The agreement was published on Oct. 1 with a request for comments.^3285
After releasing its Initial Determination on Oct. 2, the CRB issued its Final Determination of
Rates and Terms in the Matter of Mechanical and Digital Phonorecord Delivery Rate
Determination Proceeding on Nov. 24, and published it on Jan. 26, 2009.^3286
On Jan. 8, 2009 the Register solicited comments from the participants regarding potential
legal errors in the CRB’s Final Determination, and received responses from the RIAA, Copyright
Owners, and DiMA. Concurrent with the publication of the Final Determination on Jan. 26, the
Register issued a decision ruling that some elements of the Final Determination were in error,
and rejecting the CRB’s earlier conclusion that it lacked authority to review the legality of the
terms of the agreements.^3287 In particular, the Register identified four erroneous provisions: (1)
the definition of “interactive stream” was erroneous because it altered the provisions of the
Section 115 license regarding what constitutes a DPD; (2) the promotional royalty rate for
interactive streams and limited downloads constituted retroactive rulemaking; (3) the timing of
royalty payments provision violated 17 U.S.C. § 115(c)(5); and (4) the Register cannot prescribe
regulations on statements of account, as directed in the Final Determination.^3288 In response, the
CRB deleted from the Final Determination the four provisions that the Register identified, but
did not add any new provisions to correct the errors.^3289 In doing so, the CRB noted that
(^3283) See 74 Fed. Reg. 4537, 4538 (Jan. 26, 2009).
(^3284) Brendan Pierson, “Music Groups Strike Deal on Internet Royalties,” Law360 (Sept. 24, 2008), available as of
Aug. 1, 2012 at http://www.law360.com/ip/articles/70323; DiMA, “Major Music Industry Groups Announce
Breakthrough Agreement” (Sept. 23, 2008), available as of Aug. 1, 2012 at
http://www.digmedia.org/component/content/article/40-press-releases/128-press-releases-9-23-08.
(^3285) 73 Fed. Reg. 57033 (Oct. 1, 2008).
(^3286) 74 Fed. Reg. 4510 (Jan. 26, 2009).
(^3287) 74 Fed. Reg. 4537 (Jan. 26, 2009).
(^3288) Id.
(^3289) 74 Fed. Reg. 6832 (Feb. 11, 2009).