Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Rules and Regulations 58261

1Those regulations did not apply to preexisting 

subscription services, which are defined in section 

114 as services that perform sound recordings by 

means of noninteractive audio–only subscription 

digital audio transmissions which were in existence 

and were making such transmissions to the public 

for a fee on or before July 31, 1998. 17 U.S.C. 

114(j)(11). Requirements for preexisting 

subscription services were announced in 1998, see

64 FR 34289 (June 24, 1998), and will not be 

affected by the rules adopted today.

2SoundExchange has been designated as the 

agent to receive royalty payments and statements of 

account from the preexisting subscription services. 

37 CFR 260.3(f). SoundExchange was also 

designated as the ‘‘Receiving Agent’’ to receive 

royalty payments from eligible nonsubscription 

transmission services for the period from October 

28, 1998, through December 31, 2002. 

SoundExchange and Royalty Logic, Inc. (‘‘RLI’’) 

were designated for the same period as ‘‘designated 

agents’’ to distribute those royalty payments to 

copyright owners and performers. However, the 

regulations governing that time period provided 

that with respect to any royalty payment, RLI could 

act as designated agent only for copyright owners 

and performers who notified SoundExchange that 

they had elected to use RLI at least 30 days prior 

to SoundExchange’s receipt of the royalty payment. 

37 CFR 261.4(b), (c). Our July 13 notice of proposed 

rulemaking stated that it was the Office’s 

understanding that no copyright owners or 

performers had elected RLI as their designated 

agent in accordance with §261.4(c), and that if that 

was the case, the proposed regulation would not 

need to require SoundExchange to provide to RLI 

any data from the preexisting subscription services.

For the period after December 31, 2002, 

SoundExchange has been the sole designated agent. 

37 CFR 262.4(b).

LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 270

[Docket No. RM 2002–1G]

Notice and Recordkeeping for Use of 

Sound Recordings Under Statutory 

License

AGENCY: Copyright Office, Library of 

Congress.

ACTION: Final rule.

SUMMARY: The Copyright Office of the 

Library of Congress is announcing a 

final regulation specifying notice and 

recordkeeping requirements governing 

the reporting of certain uses of sound 

recordings performed by means of 

digital audio transmissions pursuant to 

statutory license for the period October 

28, 1998, through March 31, 2004.

EFFECTTIVE DATE: November 1, 2004.

FOR FURTHER INFORMATION CONTACT:

David O. Carson, General Counsel, or 

Gina Giuffreda, Attorney–Advisor, P.O. 

Box 70977, Southwest Station, 

Washington, DC 20024. Telephone: 

(202) 707–8380; Telefax: (202) 252–

3423.

SUPPLEMENTARY INFORMATION:

Background

The Copyright Act grants copyright 

owners of sound recordings the 

exclusive right to perform their works 

publicly by means of digital audio 

transmissions subject to certain 

limitations and exceptions. Among the 

limitations placed on the performance 

right for sound recordings are certain 

exemptions and a statutory license that 

permits certain eligible subscription, 

nonsubscription, and satellite digital 

audio radio to perform those sound 

recordings publicly by means of digital 

audio transmissions. 17 U.S.C. 114.

Similarly, copyright owners of sound 

recordings are granted the exclusive 

right to make copies of their works 

subject to certain limitations and 

exceptions. Among the limitations 

placed on the reproduction right for 

sound recordings is a statutory license 

that permits certain eligible 

subscription, nonsubscription, satellite 

digital audio, and business 

establishment services to make 

ephemeral copies of those sound 

recordings to facilitate their digital 

transmission. 17 U.S.C. 112(e).

Both the section 114 and 112 licenses 

require services to, among other things, 

report to copyright owners of sound 

recordings on the use of their works. 

Both licenses direct the Librarian of 

Congress to establish regulations to give 

copyright owners reasonable notice of 

the use of their works and create and 

maintain records of use for delivery to 

copyright owners. 17 U.S.C. 114(f)(4)(A) 

and 17 U.S.C. 112(e)(4). The purpose of 

this notice and recordkeeping 

requirement is to ensure that the 

royalties collected under the statutory 

licenses are distributed to the correct 

recipients.

The Copyright Office announced 

interim regulations on March 11, 2004, 

specifying notice and recordkeeping 

requirements for use of sound 

recordings under the section 112 and 

114 licenses. 1 See 69 FR 

11515 (March 11, 2004). However, those 

interim regulations are prospective and 

do not address the notice and 

recordkeeping requirements for the 

period from October 28, 1998 (the date 

the statutory licenses other than the 

license for preexisting subscription 

services first became available) through 

March 31, 2004 (the ‘‘historic period’’).

Proposed Rulemaking

Previously, the Office had published 

a notice of inquiry seeking comment on 

what records of use are to be prescribed 

for uses of sound recordings during the 

historic period, a period during which 

many services had maintained few or, in 

many instances, no records of such use. 

68 FR 58054 (October 8, 2003). The 

Office received a number of comments 

and, on July 13, 2004, the Office 

published a notice of proposed 

rulemaking proposing rules to address 

the historic period that were based upon 

the comments it had received in 

response to the notice of inquiry. 69 FR 

42007 (July13, 2004). Because few, if 

any, records of prior use had been 

maintained to date and those that do 

exist would be of little or no use in 

forming the basis for distribution of 

royalties for the historic period, the 

Office concluded that there was little 

likelihood of obtaining any useful and 

meaningful data by requiring services to 

report information from the historic 

period. Instead of requiring such 

retroactive reports, the Office followed 

the suggestion of several commenters 

and proposed to adopt rules providing 

that a proxy be used in lieu of reporting 

requirements for the historic period. 

The proxy that emerged as the one most 

favored by the commenters was the data 

already provided by the preexisting 

subscription services to 

SoundExchange, Inc.2 under the 

regulations announced in 1998 and now 

codified at 37 CFR 270.2 for 

transmissions made under section 

114(f).

The Office proposed to adopt 

regulations specifying that the records 

of use submitted by the preexisting 

subscription services during the period 

between October 28, 1998, and March 

31, 2004, shall be considered the 

records of use for all services operating 

under the section 112(e) and section 114 

licenses and that no additional records 

need be filed by the nonsubscription 

services, the satellite digital radio audio 

services, business establishment 

services or new types of subscription 

services.

Comments

Three comments were submitted to 

the Office in response to the notice of 

proposed rulemaking. SoundExchange, 

Inc., a nonprofit organization jointly 

controlled by representatives of 

copyright owners and performers on 

whose behalf it receives and disburses 

section 114 statutory royalties, 

expressed its support for the proposed 

rule as ‘‘the best solution for a bad 

situation’’–i.e., a situation in which 

services using the statutory license had 

not been required to retain data on use 

of sound recordings. The National 

Association of Broadcasters, many of 

whose members operate under the 

statutory license, also expressed its 

support for the proposed rule.

RLI submitted a comment in which it 

took no position on the use of data from 

58262 Federal Register / Vol. 69, No. 189 / Thursday, September 30, 2004 / Rules and Regulations 

3And RLI is the only other entity eligible to be 

so designated.

the preexisting subscription services as 

a proxy. However, RLI asserted that 

contrary to the Office’s understanding, a 

number of copyright owners and 

performers had designated RLI as their 

designated agent to distribute statutory 

royalties. RLI therefore urged that the 

records of use submitted by the 

preexisting subscription services to 

SoundExchange be provided to RLI as 

well so that RLI could use those records 

in its distribution of royalties to 

copyright owners and performers who 

have designated it as their designated 

agent. RLI further requested that the 

regulations provide that RLI receive 

such records directly from the 

preexisting subscription services rather 

than from SoundExchange.

The Final Rule

In light of the support in the 

comments for adoption of the reports 

already submitted by the preexisting 

subscription services as a proxy for 

reports from nonsubscription services, 

the satellite digital radio audio services, 

business establishment services or new 

types of subscription services, the Office 

has decided to adopt the proposed rule 

as a final rule.

However, RLI’s assertion that it is 

entitled to receive the preexisting 

subscription services’ reports requires a 

modification of the proposed rule. 

Whether RLI has or has not properly 

been designated by any copyright 

owners or performers is not an issue 

that can be resolved in this rulemaking 

proceeding; nor is there any need to 

resolve that issue. It will suffice to 

provide in the regulation that if RLI has 

been properly designated by any 

copyright owners or performers,3

SoundExchange must provide copies of 

the preexisting subscription services’

reports to that designated agent. The 

Office rejects as impractical RLI’s 

request that the preexisting subscription 

services be required to send those 

reports directly to RLI. The reports in 

question, which cover the period from 

October 28, 1998, through March 31, 

2004, have already been submitted to 

SoundExchange (or its predecessor, the 

Recording Industry Association of 

America) over a period of several years 

under the existing notice and 

recordkeeping regulations for 

preexisting subscription services. It 

would be an unfair burden on the 

preexisting subscription services to 

require them now to serve additional 

copies of those reports (copies of which 

they have not necessarily retained) on 

RLI, especially when all the reports are 

now in the possession of 

SoundExchange, which necessarily will 

have retained those reports to assist in 

distribution of royalties.

List of Subjects in 37 CFR Part 270

Copyright, Sound recordings.

Final Regulation

■ In consideration of the foregoing, the 

Copyright Office amends part 270 of 37 

CFR to read as follows:

■ 1. The authority citation for part 270 

continues to read as follows:

Authority: 17 U.S.C. 702.

PART 270—NOTICE AND 

RECORDKEEPING REQUIREMENTS 

FOR STATUTORY LICENSES

■ 2. Part 270 is amended as follows:

■ a. By redesignating § 270.4 as § 270.5; 

and

■ b. By adding a new § 270.4 to read as 

follows:

§ 270.4 Reports of use of sound 

recordings under statutory license prior to 

April 1, 2004. 

(a) General. This section prescribes 

the rules which govern reports of use of 

sound recordings by nonsubscription 

transmission services, preexisting 

satellite digital audio radio services, 

new subscription services, and business 

establishment services under section 

112(e) or section 114(d)(2) of title 17 of 

the United States Code, or both, for the 

period from October 28, 1998, through 

March 31, 2004.

(b) Reports of use. Reports of use filed 

by preexisting subscription services for 

transmissions made under 17 U.S.C. 

114(f) pursuant to §270.2 for use of 

sound recordings under section 112(e) 

or section 114(d)(2) of title 17 of the 

United States Code, or both, for the 

period October 28, 1998, through March 

31, 2004, shall serve as the reports of 

use for nonsubscription transmission 

services, preexisting satellite digital 

audio radio services, new subscription 

services, and business establishment 

services for their use of sound 

recordings under section 112(e) or 

section 114(d)(2) of title 17 of the 

United States Code, or both, for the 

period from October 28, 1998, through 

March 31, 2004.

(c) Royalty Logic Inc. If, in accordance 

with §261.4(c), any Copyright Owners 

or Performers have provided timely 

notice to SoundExchange of an election 

to receive royalties from Royalty Logic, 

Inc. as a Designated Agent for the period 

October 28, 1998, through December 31, 

2002, or any portion thereof, 

SoundExchange shall provide to RLI 

copies of the Reports of Use described 

in paragraph (b) of this section for that 

period or the applicable portion thereof.

Dated: September 21, 2004

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.

[FR Doc. 04–22002 Filed 9–29–04; 8:45 am]

BILLING CODE 1410–33–S

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[AZ 134–082; FRL–7820–1] 

Interim Final Determination To Stay 

and/or Defer Sanctions, Maricopa 

County Environmental Services 

Department

AGENCY: Environmental Protection 

Agency (EPA).

ACTION: Interim final rule.

SUMMARY: EPA is making an interim 

final determination to stay and/or defer 

imposition of sanctions based on a 

proposed approval of revisions to the 

Maricopa County Environmental 

Services Department (MCESD) portion 

of the Arizona State Implementation 

Plan (SIP) published elsewhere in 

today’s Federal Register. The revisions 

concern MCESD Rule 331.

DATES: This interim final determination 

is effective on September 30, 2004. 

However, comments will be accepted 

until November 1, 2004.

ADDRESSES: Send comments to Andy 

Steckel, Rulemaking Office Chief (AIR–

4), U.S. Environmental Protection 

Agency, Region IX, 75 Hawthorne 

Street, San Francisco, CA 94105 or email to steckel.andrew@epa.gov, or 

submit comments at http://

www.regulations.gov.

You can inspect copies of the 

submitted rule revisions, EPA’s 

technical support document (TSD), and 

public comments at our Region IX office 

during normal business hours by 

appointment. You may also see copies 

of the submitted rule revisions by 

appointment at the following locations:

Rulemaking Office (AIR–4), Air Division, 

U.S. Environmental Protection Agency, 

Region IX, 75 Hawthorne Street, San 

Francisco, CA 94105. 

Air and Radiation Docket and Information 

Center, U.S. Environmental Protection 

Agency, Room B–102, 1301 Constitution 

Avenue, NW., (Mail Code 6102T), 

Washington, DC 20460. 

Arizona Department of Environmental 

Quality, 1110 W. Washington Street, 

Phoenix, AZ 85007.