According to the District Court ruling, the rules for streaming music over the Web, based on the 1995 Digital Performance Rights in Sound Recordings Act (DPRA), include the following:
- Rights holders (music companies and performing artists) are not required to license content to interactive streaming services, known as audio-on-demand or pay-per-listen services, in which users can individually select a particular song for immediate playback. Licensing is totally discretionary.
- Rights holders are compelled to grant a statutory license to providers of noninteractive subscription services, as long as the services meet multiple requirements. They include lack of interactivity, prohibition on pre-announcing the titles of streamed songs, and if feasible, the streaming of information about the song being transmitted. If the parties can't agree on terms by an unspecified time after streaming has begun, the U.S. Copyright Office would intervene to set terms.
The DPRA exempted nonsubscription services from getting a license and maintained the long-held license exemption for AM and FM broadcasters.
In 1998, the newly enacted Digital Millenium Copyright Act (DMCA) did a partial backtracking, eliminating the exemption for nonsubscription transmissions, but it didn't tamper with the broadcasters' exemptions.
At issue in the ruling was whether either act intended to extend broadcasters' over-air exemption to include the retransmission of over-air content over the Web. The Copyright Office contended that the practice in which AM/FM stations stream their over-air content "takes AM/FM broadcasters … out of the category of 'terrestrial broadcast station,' " the court ruling stated. In addition, the court said, "It is strange that Congress would choose not to exempt webcasting but choose to exempt AM/FM streaming, an activity that shares many characteristics with webcasting."