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APPENDIX BMI



November 27, 2001

The Honorable John M. McHugh
2441 Rayburn House Office Building
Washington, D.C. 20515

Dear Congressman McHugh:

I am in receipt of your letter dated November 7, 2001, regarding the
concerns of your constituent, Richard Phillips, and am pleased to
respond on behalf of the Register of Copyrights, Marybeth Peters.
According to the information you have provided, Mr. Phillips'
situation is as follows.

Mr. Phillips is a composer and musician and is the sole performer at
Schemmy's Restaurant in Rhinebeck, NY.  According to Mr. Phillips,
he only performs his own compositions as well as traditional folk
music which he asserts is in the public domain.  Mr. Phillips
asserts that the owners of Schemmy's Restaurant have received a
series of threatening letters from Broadcast Music, Inc. ("BMI")
insisting that the owners purchase a performance license before
music can be publicly performed at the restaurant.  As a result of
these threats, Mr. Phillips states that the owners of the restaurant
have terminated his performances.  He asserts that BMI has no right
to insist that Schemmy's obtain a BMI license when none of BMI's
songs are performed there (Mr. Phillips is not a member of BMI).

Section 106 of the Copyright Act grants to the copyright owners of
musical works the exclusive right to publicly perform their works.
Rather than administer their performance right individually, most
songwriters and music publishers license the performance of their
works through one or more of the performance rights societies.  The
three principal performance rights societies in the United States
are the American Society of Composers, Authors and Publishers
("ASCAP"), BMI, and SESAC, Inc.  A performing rights society
administers the performance rights of its members by issuing
licenses to those who wish to publicly perform copyrighted songs
represented by the society.  A performing rights society has the
authority to issue a license only for those songs that are in its
catalogue of representation.

If Mr. Phillips is correct that he does not perform songs
represented by BMI, and he is correct that Schemmy's Restaurant does
not otherwise publicly perform songs represented by BMI, then
Schemmy's need not obtain a BMI license.  With respect to the
musical compositions that Mr. Phillips has authored, no performance
license is necessary since Mr. Phillips is the copyright owner of
those songs.  This assumes, of course, that Mr. Phillips is the sole
copyright owner of these songs, and has not licensed or otherwise
transferred the rights to the songs.  There is nothing in Mr.
Phillips' letter that suggests he is not the sole copyright owner.

Mr. Phillips asserts that the traditional folk songs he performs are
in the public domain and that he has documentation to prove his
conclusion.  Any such proof is not included in your letter.  However,
if Mr. Phillips is correct that the folk songs that he performs are in
the public domain, and he is not performing a copyrighted arrangement
of a public domain folk song, then a BMI license is not required.

Finally, while Mr. Phillips states that he is the only live
performer at Schemmy's, there is no discussion of whether Schemmy's
performs recorded music as well.  If Schemmy's does not perform
recorded music, then obviously no BMI license is required.  If
Schemmy's does perform recorded music, then a license may be
required if Schemmy's does not qualify for the copyright liability
exemption embodied in Section 111(5) of the Copyright Act.  This
section exempts restaurants from liability (and hence the need to
obtain a performance license) if the restaurant transmits the signal
of a radio station containing recorded music within the
establishment and the restaurant has less than 3,750 gross square
feet of space.  If the restaurant has more than 3,750 gross square
feet of space, then the radio signal cannot be transmitted on more
than six speakers throughout the restaurant, no more than four of
which can be in the same room.  If the restaurant performs taped
music on its own (such as playing CDís over a loudspeaker system),
then the exemption does not apply.

If you have any further questions, please do not hesitate to
contact me.

Sincerely,


Marilyn Kretsinger
Assistant General Counsel


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