Update - July 2008

Copyright Royalty Board Mechanical Rate Hearing

On January 28, 2008, the Copyright Royalty Board (CRB) commenced hearings that will determine the mechanical rates for both physical and digital music under Section 115 of the Copyright Act.. The rates would cover limited downloads, Internet streaming, digital permanent downloads, physical product sales (i.e., CDs), and ringtones (rates for limited downloads and Internet streaming reportedly have already been agreed upon). Written direct cases were filed over a year ago, followed by months of discovery. The "Copyright Owners" are represented by members of the National Music Publishers Association, Inc., the Songwriters Guild of America and the Nashville Songwriters Association International; and the music users, record labels and digital service companies, are represented by the Recording Industry Association of America, DiMA (Digital Media Association) and DiMA member companies (AOL, Apple Computer, MusicNet, Napster, RealNetworks and Yahoo).

The proceedings commenced with the direct phase consisting of testimonies given by all parties, followed by the filing of rebuttal cases and subsequent rebuttal hearings (rebuttal phase), and concluding on July 24th with closing arguments. The CRB is expected to hand down a decision regarding rates for the next five years, on or before October 2, 2008.

Concurrently, the Copyright Office is conducting a rulemaking proceeding regarding the scope of Section 115 to digital uses.