The Copyright Office ruled yesterday that ringtones are “digital phonorecord deliveries” subject to Section 115 of the Copyright Act [large pdf], that is, ringtones are subject to mechanical licensing, under Section 115(c)(3)(A).
Interestingly, as part of its decision, the Office concuded that ringtones are ordinarily not considered derivative works. If ringtones were derivative works, the Office noted, then they would fall outside the reproduction/distribution rules of Section 115.