(2) Except as provided by clause (1), the royalty under a
compulsory license shall be payable for every phonorecord made
and distributed in accordance with the license. For this purpose, a
phonorecord is considered "distributed" if the person exercising the
compulsory license has voluntarily and permanently parted with
its possession. With respect to each work embodied in the
phonorecord, the royalty shall be either two and three-fourths
cents, or one-half of one cent per minute of playing time or fraction
thereof, which amount is larger.

(3) A compulsory license under this section includes the right
of the maker of a phonorecord of a nondramatic musical work under
subsection (a)(1) to distribute or authorize distribution of such
phonorecord by rental, lease, or lending (or by acts or practices in
the nature of rental, lease, or lending). In addition to any royalty
payable under clause (2) and chapter 8 of this title, a royalty shall
be payable by the compulsory licensee for every act of distribution
of a phonorecord by or in the nature of rental, lease, or lending, by
or under the authority of the compulsory licensee. With respect to
each nondramatic musical work embodied in the phonorecord, the
royalty shall be a proportion of the revenue received by the
compulsory licensee from every such act of distribution of the
phonorecord under this clause equal to the proportion of the
revenue received by the compulsory licensee from distribution of
the phonorecord under clause (2) that is payable by a compulsory
licensee under that clause and under chapter 8. The Register of
Copyrights shall issue regulations to carry out the purpose of this
clause.

(4) Royalty payments shall be made on or before the twentieth