H.R. 861 — American Music Fairness Act of 2025

This section designates the Act as the “American Music Fairness Act of 2025” and sets forth the table of contents.

This section revises the exclusive right under 17 U.S.C. §106(6) for copyright owners of sound recordings to perform publicly by means of an audio transmission (from a digital audio transmission). It amends §114(d)(1) to extend the existing performance right exemptions and statutory license to terrestrial broadcasts and other audio transmissions by striking the "digital" limitation, deleting subparagraph (A), redesignating subparagraphs (B) and (C) as (A) and (B), and replacing "nonsubscription" with "licensed nonsubscription" (thus subjecting over-the-air radio stations, previously exempt, to the same licensing requirements as digital audio services). Section 101 is amended to insert a definition of "audio transmission" as a transmission of a sound recording, whether in digital, analog, or other format (excluding transmissions of audiovisual works). Conforming amendments are made throughout title 17 (i.e., §§112, 114, and 1401) to replace "digital audio transmission" with "audio transmission," strike various "digital" qualifiers, and make related terminology updates.

This section directs the Copyright Royalty Judges to commence a proceeding as soon as practicable after enactment to determine royalty rates and terms for nonsubscription broadcast transmissions (i.e., noninteractive digital performances of sound recordings by webcasters such as terrestrial radio stations simulcasting online, under the statutory licenses in 17 U.S.C. §§ 112(e) and 114(f)), effective from the date of enactment through December 31, 2028, with subsequent proceedings every fifth calendar year thereafter. It defers any payments due under section 114(f)(1)(D) until the due date of the first royalty payments for such transmissions as determined post-enactment.

This section establishes flat annual royalty rates under the statutory license for nonsubscription broadcast transmissions of sound recordings (17 U.S.C. 114(f)(1)) for eligible small terrestrial broadcast stations licensed by the Federal Communications Commission as follows: (1) $10 per calendar year for stations with less than $100,000 in preceding-year revenue; (2) $100 per calendar year for public broadcasting entities (as defined in 17 U.S.C. 118(f)) with $100,000 to less than $1.5 million in preceding-year revenue; and (3) $500 per calendar year for other stations with $100,000 to less than $1.5 million in preceding-year revenue. Eligibility further requires aggregate preceding-year revenue of less than $10 million for the station owner, operator, and affiliates (calculated per generally accepted accounting principles and reasonably allocated among affiliated stations), plus written certification to the designated collective by January 31 (with rates inadmissible in future rate proceedings). The section also makes a technical correction to the cross-reference to 47 U.S.C. 397 in the definition of public broadcasting entity (17 U.S.C. 118(f)).

This section requires a transmitting entity eligible for the statutory license under 17 U.S.C. § 114(d)(2) (i.e., certain noninteractive webcasting services) that obtains a direct license covering transmissions otherwise subject to the statutory license to pay 50% of required royalties under the direct license to the collective designated to distribute statutory licensing receipts under § 114(f). That collective distributes the payment proportionally to the shares for featured artists (45%) and nonfeatured artists (5%) under current law § 114(g)(2)(B)-(D), which constitute the sole payments due those artists from such direct licenses. (Thus, the sound recording copyright owner receives the remaining 50% directly under the license agreement.)

This section provides that nothing in this Act or its amendments adversely affects public performance rights or royalties payable to songwriters or copyright owners of musical works.

This section directs the Copyright Royalty Judges, pursuant to 17 U.S.C. 114(f)(1)(B), to base rates and terms for terrestrial broadcast radio stations on economic, competitive, and programming information presented by the parties, including whether a station's service substitutes for or promotes phonorecord sales or otherwise interferes with or enhances sound recording copyright owners' other revenue streams.