The federal panel charged with setting music royalty rates and terms handed down its final determination Monday on fees pertaining to the reproduction and distribution of phonorecords (compact discs), including digital downloads under Section 115 of the Copyright Act. Under the proceeding, the rate to be paid to songwriters and music publishers for their works in physical recordings and permanent digital downloads is the larger of 9.1 cents or 1.75 cents per minute of playing time with a late payment fee of 1.5 percent. The rate to be paid for ringtones is 24 cents.
A deal struck by the National Music Publishers Association and the Recording Industry Association of America in 1997 set the per-song fee for physical recordings like compact discs at 9.1 cents but did not address digital delivery, which has been popularized in recent years by services like Apple's iTunes music store. Under the decision, the rate for CDs and digital downloads will be frozen for five years. The board rejected an appeal that publishers be moved to a percentage rate rather than a penny rate. The 109th Congress considered legislation to set royalty rates but the bill fizzled and did not reappear this session.
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