Streaming Right Into Trouble - Part I

This is the first in a two-part series on internet streaming and the copyright issues that go with it. This part will discuss the history behind the new streaming rules. The second part will discuss their application.

Part One

Twenty years ago, it was unthinkable that most people would have a personal computer let alone that they could listen to their favorite radio station - from anywhere in the world - live on their computer. The ability to do this is solely the gift of (or fault of) the Internet. The Internet is also what allows those stations to stream their feeds live to millions of new listeners who would never have heard the station unless they were driving through the area.
image: davidking
As with most things involving technological advances, though, the technology got far ahead of the law, in particular, the Copyright law. Broadcasters began streaming their feeds on-line well before Congress got around to trying to regulate it. But, regulate it did, mostly at the behest of the recording industry.

With the rise of the Internet as the premiere way to obtain new music or share music, the recording industry saw its CD sales decline. Prior to this era, the recording industry and the broadcasters had a mutually beneficial détente of sorts: the recording industry did not collect royalties from the broadcasters for the play of their songs (known as sound recordings in the Copyright Act) but reaped the benefits of increased record sales based upon radio play. When the Internet came along and people were able to download their favorite music or just listen to it on their computer, CD sales began to slide. So, one avenue the recording industry pursued to staunch the tide of lost profits was to turn to Congress .

The industry's concerns were partly addressed with the Digital Millennium Copyright Act which added the right to perform a sound recording via a digital audio transmission to the list of exclusive rights that are given to the owners of copyrights. What this meant is that someone, other than the owner of the rights in the sound recording - which is usually the record company - could not legally play a sound recording via a digital audio transmission unless they had a license to do so from the owner. The DMCA does provide a statutory license that automatically covers the broadcaster, but only when they can meet certain statutory requirements.

Congress gave the final authority to promulgate the regulations to implement this legislation to the Copyright Office. The Copyright Office, in turn, decided that on-line streams of broadcasts were digital audio transmissions under the DMCA and that the DMCA required these broadcasters to pay royalties to the copyright owners of the sound recordings that they play. Not surprisingly, this was an unpopular decision with broadcasters who sued the Copyright Office to obtain a different result. The courts sided with the Copyright Office, though, and the regulations remain today.

Next week: how the regulations work and the landscape for the future.