hot off the copyright office presses

Ringtones are likely subject to statutory license for making and distributing
phonorecords under the Copyright Act. Here's the copyright office's announcement w/ link to more info:

COPYRIGHT OFFICE RESPONDS TO NOVEL QUESTIONS OF LAW FROM
COPYRIGHT ROYALTY BOARD (71 FR 64303)

The Copyright Royalty Board, acting pursuant to statute,
referred two novel questions of law to the Register of
Copyrights. Specifically, the Copyright Royalty Board
requested a decision by the Register regarding whether
ringtones (monophonic, polyphonic, or mastertone) are
subject to the statutory license for making and distributing
phonorecords under the Copyright Act, and if so, what legal
conditions and/or limitations would apply. The Register
transmitted a Memorandum Opinion to the Copyright Royalty
Board stating that, in general, a ringtone will fall within
the scope of the statutory license unless it has so altered
the musical composition as to constitute a derivative work.
Simply excerpting a single portion of a licensed sound
recording of a musical composition will not constitute the
making of a derivative work. The Register states that it is
clear that many, but not all, ringtones will fall within the
scope of the section 115 license. Therefore, it is
appropriate for the Copyright Royalty Judges to determine
royalties to be payable for the making and distribution of
ringtones under the compulsory license. For further
information, go to
http://www.copyright.gov/fedreg/2006/71fr64303.html. (emphasis added.)

I, for one, am not surprised, and how this will effect ring-tone licenses, and prices will be interesting. I'm not sure off hand if there's anything to appeal from the Register's decision, but once the CRB issues a ruling on the new licenses, I suspect it is all open for appeal.