The Other Internet radio appeal

On Friday, the Third Circuit issued its opinion in Bonneville Int'l. Corp. v. Peters, which is the broadcasters' appeal of the determination of the Copyright Office (affirmed by the district court) that broadcasters are not exempt from paying webcasting royalties when they simultaneously webcast their over-the-air programming. The Circuit Court agreed with the Copyright Office (and intervenor RIAA).
This appeal is not directly related to the consolidated appeals from the Librarian of Congress's order setting the rates and terms for webcasting royalties following the DTRA CARP proceeding.
At issue in Bonneville was the meaning of 17 U.S.C. section 114(d)(1)(A), exempting nonsubscription broadcast transmissions. The terrestrial radio industry pays copyright royalties to songwriters for public performances via over-the-air broadcast of their musical compositions but does not pay copyright royalties to the record companies for public performances over the air of the recordings themselves. These have traditionally been exempt in recognition that playing recordings on the radio promotes sales and helps artists reach an audience. The terrestrial radio stations argued that the same reasoning supports reading the exemption to apply to streaming music over the Internet- why should the promotional value of streaming be any less than that of broadcast radio just because the audience is listening to a computer speaker instead of a radio? The Court concluded, however, that Congress did intend to treat them differently. So terrestrial radio stations are back in the same boat as Internet-only webcasters.
Of interest perhaps only to lawyers... because it agreed with the Copyright Office's statutory interpretation, the Court avoided the need to decide whether decisions of the Copyright Office are entitled to Chevron deference.