HRRC'S Summary of
THE AUDIO HOME RECORDING ACT

(Title 17, Chapter 10, of the U.S. Code)

On October 28, 1992, President Bush signed the Audio Home Recording Act into
law. The Act, an historic compromise between the consumer electronics and
music industries, became effective immediately.

After more than a decade of dispute and uncertainty about home audio taping
and the introduction of new digital audio recording technologies, the Audio
Home Recording Act paves the way for new music formats. Under the Act, we
can all share in the benefits of new recording technologies.

Most important, the Act confirms consumers' right to use--and retailers'
right to sell--all analog and digital audio recording formats. As part of
this compromise, digital audio recording devices must include a system that
prohibits serial copying, and manufacturers or importers must pay a modest
royalty on new digital audio recording devices and media.

Here's a brief summary of the law's key provisions:

Vindication of consumers' right to tape: (Section 1008)

No copyright infringement lawsuit may be brought based on consumers'
noncommercial use of digital or analog recording devices to copy prerecorded
music. No copyright lawsuit may be based on the manufacture, importation,
distribution, or sale of digital or analog recording devices or media. Amen.

Incorporation of serial copy controls: (Section 1002)

Digital audio recording devices must contain one of the following:

(1) The Serial Copy Management System (SCMS), which permits first-generation
digital-to-digital copies of prerecorded music and other audio works, but
prohibits multi-generation or "serial" copies of those copies (SCMS is
implemented in DAT, MD and DCC recorders already on the market);

(2) A system with the same functional characteristics as SCMS, and which
acts compatibly on the same copyright and generation status information as
used by SCMS; or

(3) Any other system certified by the U.S. Secretary of Commerce as
prohibiting unauthorized serial copying.

Devices or services to circumvent the SCMS or any other serial copy control
system may not be distributed.

Obligation to make royalty payments: (Sections 1003 to 1004)

U.S. manufacturers and importers must make payments as follows:

   * for digital audio recording devices, 2% of the wholesale price, with a
     floor of $1 royalty payment per device and a ceiling of $8 per device
     (except for functionally integrated units containing more than one
     digital audio recording device, which have a $12 cap).
   * for digital audio recording media, 3% of the wholesale price.

Only the first person to manufacture and distribute or to import and
distribute must pay the royalty. The law does not impose any royalty on
consumers or retailers.

What devices are subject to the SCMS and royalty requirements? (Section
1001)

The Act applies only to "digital audio recording devices," defined as
devices that are designed or marketed primarily for making digital audio
recordings for private use (whether or not incorporated in some other
device).

The following devices are not generally subject to SCMS or royalty
requirements:

-- professional model products;

-- dictation machines, answering machines, and other audio recording
equipment designed and marketed primarily for non-musical recording;

-- analog audio recording devices or media;

-- personal computers; and

-- VCRs and camcorders used primarily for video recording.

How the royalty program works: (Sections 1005 to 1007)

Royalty payments are administered by the Register of Copyrights and the
Librarian of Congress. Royalty payments from digital audio recording
technology are divided into two funds:

-- two-thirds into a Sound Recordings Fund, with small percentages of this
fund earmarked for nonfeatured artists and backup musicians, 40% of the
remainder for featured artists, and the rest to record companies;

- - one-third into a Musical Works Fund, to be split 50/50 between
songwriters and music publishers.

To receive royalty payments, interested copyright parties must file a claim
with the Librarian of Congress. Royalties will be distributed based on
record sales and airplay during the relevant period.

For more information, contact the Home Recording Rights Coalition at:
hrrc@access.digex.net, or 1-800-282- TAPE

See also the full text of the Audio Home Recording Act, or return to the
HRRC Home Page.