The Copyright Royalty Board today rejected a request by the Digital Media Assn. to have the Register of Copyrights decide whether interactive streams should fall under a compulsory license, Billboard.biz has learned.

The order came during the initial trial phase of the hearing process, which began in 2006, to set rates for mechanical and digital deliveries of compositions that fall under section 115 of the Copyright Act, known as the compulsory mechanical license provision. Parties to the proceeding include DiMA, the National Music Publishers' Assn. and the RIAA.

Among rates expected to be set by the three Copyright Royalty Judges in Washington, D.C., are mechanical royalties for physical units (such as CDs and enhanced CD singles that include more than an audio-only version of a recorded song) as well as digital phonorecord delivery (DPD) royalties for permanent downloads, limited downloads and streams that may involve reproduction and performance rights.

It's this latter form of distribution -- streams -- that prompted DiMA to request the CRB last month to refer a "novel question of law" to Register Marybeth Peters to decide whether or not they should be part of a compulsory license. Specifically, DiMA asked whether an interactive stream is a DPD under section 115.

In rejecting the request today, the judges wrote that there is no definition of "interactive" in the Copyright Act, and the parties did not all agree to its meaning. As a result, whether a transmission is interactive is a factual question to be decided by judges rather than a legal question to be decided by the Register.

This decision is a victory for publishers, many of whom believed that DiMA-member companies were, by this request, trying to renege on old contractual commitments to pay publishers a royalty for the right to reproduce compositions via streams.

The trial is expected to continue through May. A final decision is unlikely to come before October.

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