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When you're operating networks and businesses in the 21st century, but you rely on a copyright system that's a direct descendant of piano roll cases (yes, piano rolls, as in parts of those self-playing pianos that can be found in dusty corners of black and white Western movies), there's bound to be a little confusion. On Friday, the Copyright Office held a roundtable meeting in an attempt to clarify some of the issues surrounding digital transmissions. (See the notice for the meeting here). While the Copyright Office can't make new laws or amend statutes, it can interpret them. Specifically, the Copyright Office is in the process of interpreting portions of the Copyright Act that refer to digital phonorecord deliveries (DPDs).
In 1995, Congress enacted the Digital Performance Royalty for Sound Recordings Act (DPRSR), which amended, among other things, Section 115 of the Copyright Act. The DPRSR recognized that a royalty rate should be set for DPDs, and stated that the Royalty Board should "distinguish between" general DPDs and "incidental" DPDs. General DPDs were defined as reproductions or transmissions where the work was "specifically identifiable"--like a downloaded song. However, the Act's circular definition of "incidental" DPDs stated that such DPDs were "incidental to transmission."
While the 1995 Act shows that Congress took the future of digital music seriously, the ambiguities of the Act have left businesses frustrated and confused. Limited downloads, on-demand services, buffer copies and server copies were left out of the equation, and the legislative history does not provide much guidance as to how to define those downloads in terms of licensing standards.
In many ways (for better or worse), the music industry revolves around licensing, and Section 115 of the Copyright Act gives distributors a way to obtain a license to reproduce or distribute a work. The questions surrounding digital transmissions leave distributors unsure of what their compulsory licenses cover, while copyright owners want to make sure they are paid for all of the reproductions and distributions of their works. To make things even more complicated, the distributors and copyright holders aren't the only ones in business-- there are the songwriters, the recording companies (who often end up being the copyright holders), collecting societies like ASCAP, webcasters and broadcasters. Ultimately, the hazy definitions in Section 115 leave a lot of people with a lot of questions.
Finding a way to address this issue and define varieties of downloads might amount to sticking a band-aid on a system of copyright that's still embedded in the 20th century, it would certainly be a good start, and it would allow legal downloading services to stand on more solid ground.