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coin-operated machines) a comma and the following:

"except that the provisions of this sentence shall not

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apply to the public performance of a sound recording under subsection (f) of this section".

5 SEC. 3. (a) Chapter 1 of title 17, United States Code,

6 is amended by adding at the end thereof the following new 7 section:

8 "§ 33. Compulsory licensing; royalties

9 “(a) The annual royalty fees for the compulsory li

10

cense provided for in section 1 (f) (2) of this title may, 11 at the user's option, be computed on either a blanket or a 12 prorated basis. Although a negotiated license may be substi13 tuted for the compulsory license prescribed by this subsec14 tion, in no case shall the negotiated rate amount to less than 15 the following applicable rate or payment:

"(1) For a radio broadcast station licensed by the Federal Communications Commission, the royalty rate or payment shall be as follows:

"(A) in the case of a broadcast station with gross receipts from its advertising sponsors of more than $25,000 but less than $100,000 a year, the yearly performance royalty payment shall be $250;

or

"(B) in the case of a broadcast station with

gross receipts from its advertising sponsors of more

4

than $100,000 but less than $200,000 a year, the

yearly performance royalty payment shall be $750;

or

"(C) in the case of a broadcast station with gross receipts from its advertising sponsors of more than $200,000 a year, the yearly blanket rate shall be 1 per centum of the net receipts from the advertising sponsors during the applicable period, and the alternative prorated rate is a fraction of 1 per centum of such net receipts, taking into account the amount of the station's commercial time devoted to play

ing copyrighted sound recordings.

"(2) For a television broadcast station licensed by the Federal Communications Commission, the royalty rate or payment shall be as follows:

"(A) in the case of a broadcast station with gross receipts from its advertising sponsors of more than $1,000,000 but less than $4,000,000 a year,

the yearly performance royalty payment shall be $750; or

"(B) in the case of a broadcast station with gross receipts from its advertising sponsors of more

than $4,000,000 a year, the yearly performance royalty payment shall be $1,500.

"(3) For background music services and other

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transmitters of performances of sound recordings, the yearly blanket rate is 2 per centum of the gross receipts

from subscribers or others who pay to receive the trans

mission during the applicable period, and the alternative prorated rate is a fraction of 2 per centum of such gross

receipts, taking into account the proportion of time devoted to musical performances by the transmitter during the applicable period.

"(4) For an operator of coin-operated phonorecord players, the yearly performance royalty payment shall be $1 for each phonorecord player.

"(5) For all other users not otherwise exempted, the blanket rate is $25 per year for each location at which copyrighted sound recordings are performed,

and the alternative prorated rate shall be based on the

number of separate performances of such works during

the

year and shall not exceed $5 per day of use.

"(6) No royalty fees need be paid for a compulsory license for the public performance of copyrighted sound recordings by a radio broadcast station where its annual gross receipts from advertising sponsors were less than $25,000, by a television broadcast station where its an

nual gross receipts from advertising sponsors were less than $1,000,000, or by a background music service or other transmitter of performances of sound recordings

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where its annual gross receipts from subscribers or others

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who pay to receive the transmission were less than $10,000.

"(b) The annual royalty fees provided in subsection (a) 5 shall be applicable until such time as the royalty rate is 6 agreed upon by negotiation between the copyright owner and 7 the licensee, or their designated representatives: Provided, 8 That the annual royalty fees provided for in subsection (a) 9 shall be applicable for a period of not less than two years 10 following the date of enactment of the Performance Rights 11 Amendment of 1975. In the event that the parties or their 12 representatives are unable to agree upon a royalty rate pur13 suant to negotiation, the public performance of the sound 14 recording shall be subject to compulsory licensing at a royalty 15 rate and under terms which shall be set by an arbitration 16 panel composed of three members of the American Arbitra17 tion Association, of which one member of the panel shall be 18 selected separately by each of the parties in disagreement, 19 and one member shall be selected jointly by the parties in 20 disagreement.

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222

"(c) The royalty fees collected pursuant to this section

shall be divided equally between the performers of the

23 sound recording and the copyright owners of the sound 24 recording. Neither a performer nor a copyright owner may 25 assign his right to the royalties provided for in this section

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to the copyright owner or performer of the sound recording,

2 respectively.

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"(d) As used in this section, the term―

"(1) 'performers' means musicians, singers, conductors, actors, narrators, and others whose performance of a literary, musical, or dramatic work is embodied in a sound recording; and

"(2) 'net receipts from advertising sponsors' means gross receipts from advertising sponsors less any commissions paid by a broadcast station to advertising agencies.".

(b) The analysis of such chapter is amended by add

13 ing at the end thereof the following new item:

"33. Compulsory licensing; royalties.".