In early efforts (1993) to enact a performance right for sound recordings, after it became clear that the right would be digital only, a series of problems arose beginning with when is a performance a performance and a distribution a distribution, and can a single transmission be both a performance and a distribution? The answers to those questions had a number of implications, extending beyond rights in sound recordings and including the underlying musical composition, where the relative roles of the performing rights and music publishers were at issue. These interests ultimately came into play in the amendments to Section 115, which created a compulsory license for digital phonorecord deliveries ("DPD")
The DPD issue parallels in some ways the distribution right question for sound recordings. Sound recordings already had a distribution right in the 1976 Act: the addition of a digital performance right didn't change the distribution right; thus, both before and after the enactment of Section 106(6), if a distribution is involved, it is Section 106(3) that is implicated.
In the hard copy world, no real questions arose, but when digital dissemination takes place, one has to ask whether there has been a distribution, a transmission, or both. There is a significant difference between Section 106(3) and Sections 106(4) and (6): Sections 106(4) and (6) cover performance (including transmission) of the work, while Section 106(3) covers distribution of copies or phonorecords. Section 106(3) is, therefore, not violated when no distribution of a copy or phonorecord occurs. Copies and phonorecords are defined in Section 101 and involve "material objects."
Do transmissions involve distributions of "material objects?" In the DPD situation, the dividing line Congress drew essentially involved the difference between listening to something in real-time, versus sending a digital version for storage purposes, conduct that was believed to act as a displacement for a hard copy. The issue also arises in peer-to-peer file sharing, where uploads have been argued to be a distribution. That question has recently been briefed in a case in the SDNY, Elektra Entertainment Group Inc. v. Barker, 05 CV 7340 (KMK). The RIAA and the EFF take diametrically opposed views (surprise surprise Gomer). A very large amount of court documents may be found here, if you scroll down to Elektra v. Barker.