H. R. 1417

One Hundred Eighth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twentieth day of January, two thousand and four

An Act

To amend title 17, United States Code, to replace copyright arbitration royalty

panels with Copyright Royalty Judges, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Copyright Royalty and Distribution Reform Act of 2004’’.

SEC. 2. REFERENCE.

Except as otherwise expressly provided, whenever in this Act

an amendment or repeal is expressed in terms of an amendment

to, or repeal of, a section or other provision, the reference shall

be considered to be made to a section or other provision of title

17, United States Code.

SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.

(a) IN GENERAL.—Chapter 8 is amended to read as follows:

‘‘CHAPTER 8—PROCEEDINGS BY COPYRIGHT ROYALTY

JUDGES

‘‘Sec.

‘‘801. Copyright Royalty Judges; appointment and functions.

‘‘802. Copyright Royalty Judgeships; staff.

‘‘803. Proceedings of Copyright Royalty Judges.

‘‘804. Institution of proceedings.

‘‘805. General rule for voluntarily negotiated agreements.

‘‘§ 801. Copyright Royalty Judges; appointment and functions

‘‘(a) APPOINTMENT.—The Librarian of Congress shall appoint

3 full-time Copyright Royalty Judges, and shall appoint 1 of the

3 as the Chief Copyright Royalty Judge. The Librarian shall make

appointments to such positions after consultation with the Register

of Copyrights.

‘‘(b) FUNCTIONS.—Subject to the provisions of this chapter, the

functions of the Copyright Royalty Judges shall be as follows:

‘‘(1) To make determinations and adjustments of reasonable

terms and rates of royalty payments as provided in sections

112(e), 114, 115, 116, 118, 119 and 1004. The rates applicable

under sections 114(f)(1)(B), 115, and 116 shall be calculated

to achieve the following objectives:

‘‘(A) To maximize the availability of creative works

to the public.
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‘‘(B) To afford the copyright owner a fair return for

his or her creative work and the copyright user a fair

income under existing economic conditions.

‘‘(C) To reflect the relative roles of the copyright owner

and the copyright user in the product made available to

the public with respect to relative creative contribution,

technological contribution, capital investment, cost, risk,

and contribution to the opening of new markets for creative

expression and media for their communication.

‘‘(D) To minimize any disruptive impact on the structure of the industries involved and on generally prevailing

industry practices.

‘‘(2) To make determinations concerning the adjustment

of the copyright royalty rates under section 111 solely in accordance with the following provisions:

‘‘(A) The rates established by section 111(d)(1)(B) may

be adjusted to reflect—

‘‘(i) national monetary inflation or deflation; or

‘‘(ii) changes in the average rates charged cable

subscribers for the basic service of providing secondary

transmissions to maintain the real constant dollar level

of the royalty fee per subscriber which existed as of

the date of October 19, 1976,

except that—

‘‘(I) if the average rates charged cable system subscribers for the basic service of providing secondary

transmissions are changed so that the average rates

exceed national monetary inflation, no change in the

rates established by section 111(d)(1)(B) shall be permitted; and

‘‘(II) no increase in the royalty fee shall be permitted based on any reduction in the average number

of distant signal equivalents per subscriber.

The Copyright Royalty Judges may consider all factors

relating to the maintenance of such level of payments,

including, as an extenuating factor, whether the industry

has been restrained by subscriber rate regulating authorities from increasing the rates for the basic service of providing secondary transmissions.

‘‘(B) In the event that the rules and regulations of

the Federal Communications Commission are amended at

any time after April 15, 1976, to permit the carriage by

cable systems of additional television broadcast signals

beyond the local service area of the primary transmitters

of such signals, the royalty rates established by section

111(d)(1)(B) may be adjusted to ensure that the rates for

the additional distant signal equivalents resulting from

such carriage are reasonable in the light of the changes

effected by the amendment to such rules and regulations.

In determining the reasonableness of rates proposed following an amendment of Federal Communications Commission rules and regulations, the Copyright Royalty Judges

shall consider, among other factors, the economic impact

on copyright owners and users; except that no adjustment

in royalty rates shall be made under this subparagraph

with respect to any distant signal equivalent or fraction

thereof represented by—
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‘‘(i) carriage of any signal permitted under the

rules and regulations of the Federal Communications

Commission in effect on April 15, 1976, or the carriage

of a signal of the same type (that is, independent,

network, or noncommercial educational) substituted for

such permitted signal; or

‘‘(ii) a television broadcast signal first carried after

April 15, 1976, pursuant to an individual waiver of

the rules and regulations of the Federal Communications Commission, as such rules and regulations were

in effect on April 15, 1976.

‘‘(C) In the event of any change in the rules and regulations of the Federal Communications Commission with

respect to syndicated and sports program exclusivity after

April 15, 1976, the rates established by section 111(d)(1)(B)

may be adjusted to assure that such rates are reasonable

in light of the changes to such rules and regulations, but

any such adjustment shall apply only to the affected television broadcast signals carried on those systems affected

by the change.

‘‘(D) The gross receipts limitations established by section 111(d)(1) (C) and (D) shall be adjusted to reflect

national monetary inflation or deflation or changes in the

average rates charged cable system subscribers for the

basic service of providing secondary transmissions to maintain the real constant dollar value of the exemption provided by such section, and the royalty rate specified therein

shall not be subject to adjustment.

‘‘(3)(A) To authorize the distribution, under sections 111,

119, and 1007, of those royalty fees collected under sections

111, 119, and 1005, as the case may be, to the extent that

the Copyright Royalty Judges have found that the distribution

of such fees is not subject to controversy.

‘‘(B) In cases where the Copyright Royalty Judges determine that controversy exists, the Copyright Royalty Judges

shall determine the distribution of such fees, including partial

distributions, in accordance with section 111, 119, or 1007,

as the case may be.

‘‘(C) The Copyright Royalty Judges may make a partial

distribution of such fees during the pendency of the proceeding

under subparagraph (B) if all participants under section

803(b)(2) in the proceeding that are entitled to receive those

fees that are to be partially distributed—

‘‘(i) agree to such partial distribution;

‘‘(ii) sign an agreement obligating them to return any

excess amounts to the extent necessary to comply with

the final determination on the distribution of the fees made

under subparagraph (B);

‘‘(iii) file the agreement with the Copyright Royalty

Judges; and

‘‘(iv) agree that such funds are available for distribution.

‘‘(D) The Copyright Royalty Judges and any other officer

or employee acting in good faith in distributing funds under

subparagraph (C) shall not be held liable for the payment

of any excess fees under subparagraph (C). The Copyright
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Royalty Judges shall, at the time the final determination is

made, calculate any such excess amounts.

‘‘(4) To accept or reject royalty claims filed under sections

111, 119, and 1007, on the basis of timeliness or the failure

to establish the basis for a claim.

‘‘(5) To accept or reject rate adjustment petitions as provided in section 804 and petitions to participate as provided

in section 803(b) (1) and (2).

‘‘(6) To determine the status of a digital audio recording

device or a digital audio interface device under sections 1002

and 1003, as provided in section 1010.

‘‘(7)(A) To adopt as a basis for statutory terms and rates

or as a basis for the distribution of statutory royalty payments,

an agreement concerning such matters reached among some

or all of the participants in a proceeding at any time during

the proceeding, except that—

‘‘(i) the Copyright Royalty Judges shall provide to those

that would be bound by the terms, rates, or other determination set by any agreement in a proceeding to determine royalty rates an opportunity to comment on the agreement and shall provide to participants in the proceeding

under section 803(b)(2) that would be bound by the terms,

rates, or other determination set by the agreement an

opportunity to comment on the agreement and object to

its adoption as a basis for statutory terms and rates; and

‘‘(ii) the Copyright Royalty Judges may decline to adopt

the agreement as a basis for statutory terms and rates

for participants that are not parties to the agreement,

if any participant described in clause (i) objects to the

agreement and the Copyright Royalty Judges conclude,

based on the record before them if one exists, that the

agreement does not provide a reasonable basis for setting

statutory terms or rates.

‘‘(B) License agreements voluntarily negotiated pursuant

to section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or 118(b)(2)

that do not result in statutory terms and rates shall not be

subject to clauses (i) and (ii) of subparagraph (A).

‘‘(C) Interested parties may negotiate and agree to, and

the Copyright Royalty Judges may adopt, an agreement that

specifies as terms notice and recordkeeping requirements that

apply in lieu of those that would otherwise apply under regulations.

‘‘(8) To perform other duties, as assigned by the Register

of Copyrights within the Library of Congress, except as provided

in section 802(g), at times when Copyright Royalty Judges

are not engaged in performing the other duties set forth in

this section.

‘‘(c) RULINGS.—The Copyright Royalty Judges may make any

necessary procedural or evidentiary rulings in any proceeding under

this chapter and may, before commencing a proceeding under this

chapter, make any such rulings that would apply to the proceedings

conducted by the Copyright Royalty Judges.

‘‘(d) ADMINISTRATIVE SUPPORT.—The Librarian of Congress

shall provide the Copyright Royalty Judges with the necessary

administrative services related to proceedings under this chapter.
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‘‘(e) LOCATION IN LIBRARY OF CONGRESS.—The offices of the

Copyright Royalty Judges and staff shall be in the Library of

Congress.

‘‘§ 802. Copyright Royalty Judgeships; staff

‘‘(a) QUALIFICATIONS OF COPYRIGHT ROYALTY JUDGES.—

‘‘(1) IN GENERAL.—Each Copyright Royalty Judge shall be

an attorney who has at least 7 years of legal experience. The

Chief Copyright Royalty Judge shall have at least 5 years

of experience in adjudications, arbitrations, or court trials. Of

the other 2 Copyright Royalty Judges, 1 shall have significant

knowledge of copyright law, and the other shall have significant

knowledge of economics. An individual may serve as a Copyright Royalty Judge only if the individual is free of any financial

conflict of interest under subsection (h).

‘‘(2) DEFINITION.—In this subsection, the term ‘adjudication’

has the meaning given that term in section 551 of title 5,

but does not include mediation.

‘‘(b) STAFF.—The Chief Copyright Royalty Judge shall hire 3

full-time staff members to assist the Copyright Royalty Judges

in performing their functions.

‘‘(c) TERMS.—The individual first appointed as the Chief Copyright Royalty Judge shall be appointed to a term of 6 years, and

of the remaining individuals first appointed as Copyright Royalty

Judges, 1 shall be appointed to a term of 4 years, and the other

shall be appointed to a term of 2 years. Thereafter, the terms

of succeeding Copyright Royalty Judges shall each be 6 years.

An individual serving as a Copyright Royalty Judge may be reappointed to subsequent terms. The term of a Copyright Royalty

Judge shall begin when the term of the predecessor of that Copyright Royalty Judge ends. When the term of office of a Copyright

Royalty Judge ends, the individual serving that term may continue

to serve until a successor is selected.

‘‘(d) VACANCIES OR INCAPACITY.—

‘‘(1) VACANCIES.—If a vacancy should occur in the position

of Copyright Royalty Judge, the Librarian of Congress shall

act expeditiously to fill the vacancy, and may appoint an interim

Copyright Royalty Judge to serve until another Copyright Royalty Judge is appointed under this section. An individual

appointed to fill the vacancy occurring before the expiration

of the term for which the predecessor of that individual was

appointed shall be appointed for the remainder of that term.

‘‘(2) INCAPACITY.—In the case in which a Copyright Royalty

Judge is temporarily unable to perform his or her duties, the

Librarian of Congress may appoint an interim Copyright Royalty Judge to perform such duties during the period of such

incapacity.

‘‘(e) COMPENSATION.—

‘‘(1) JUDGES.—The Chief Copyright Royalty Judge shall

receive compensation at the rate of basic pay payable for level

AL–1 for administrative law judges pursuant to section 5372(b)

of title 5, and each of the other two Copyright Royalty Judges

shall receive compensation at the rate of basic pay payable

for level AL–2 for administrative law judges pursuant to such

section. The compensation of the Copyright Royalty Judges

shall not be subject to any regulations adopted by the Office
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of Personnel Management pursuant to its authority under section 5376(b)(1) of title 5.

‘‘(2) STAFF MEMBERS.—Of the staff members appointed

under subsection (b)—

‘‘(A) the rate of pay of 1 staff member shall be not

more than the basic rate of pay payable for level 10 of

GS–15 of the General Schedule;

‘‘(B) the rate of pay of 1 staff member shall be not

less than the basic rate of pay payable for GS–13 of the

General Schedule and not more than the basic rate of

pay payable for level 10 of GS–14 of such Schedule; and

‘‘(C) the rate of pay for the third staff member shall

be not less than the basic rate of pay payable for GS–

8 of the General Schedule and not more than the basic

rate of pay payable for level 10 of GS–11 of such Schedule.

‘‘(3) LOCALITY PAY.—All rates of pay referred to under

this subsection shall include locality pay.

‘‘(f) INDEPENDENCE OF COPYRIGHT ROYALTY JUDGE.— ‘‘(1) IN MAKING DETERMINATIONS.— ‘‘(A) IN GENERAL.—(i) Subject to clause (ii) of this

subparagraph and subparagraph (B), the Copyright Royalty

Judges shall have full independence in making determinations concerning adjustments and determinations of copyright royalty rates and terms, the distribution of copyright

royalties, the acceptance or rejection of royalty claims, rate

adjustment petitions, and petitions to participate, and in

issuing other rulings under this title, except that the Copyright Royalty Judges may consult with the Register of

Copyrights on any matter other than a question of fact.

‘‘(ii) A Copyright Royalty Judge or Judges, or, by

motion to the Copyright Royalty Judge or Judges, any

participant in a proceeding may request an interpretation

by the Register of Copyrights concerning any material question of substantive law (not including questions of procedure before the Copyright Royalty Judges, the ultimate

adjustments and determinations of copyright royalty rates

and terms, the ultimate distribution of copyright royalties,

or the acceptance or rejection of royalty claims, rate adjustment petitions, or petitions to participate) concerning an

interpretation or construction of those provisions of this

title that are the subject of the proceeding. Any such

request for a written interpretation by the Register of

Copyrights shall be on the record. Reasonable provision

shall be made for comment by the participants in the

proceeding on the material question of substantive law

in such a way as to minimize duplication and delay. Except

as provided in subparagraph (B), the Register of Copyrights

shall deliver to the Copyright Royalty Judges a response

within 14 days after the Register of Copyrigts receives

all of the briefs or comments of the participants. Such

decision shall be in writing and shall be included by the

Copyright Royalty Judges in the record that accompanies

their final determination. If such a decision is timely delivered to the Copyright Royalty Judges, the Copyright Royalty Judges shall apply the legal interpretation embodied

in the response of the Register of Copyrights in resolving

material questions of substantive law.
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‘‘(B) NOVEL QUESTIONS.—(i) In any case in which a

novel material question of substantive law concerning an

interpretation of those provisions of this title that are the

subject of the proceeding is presented, the Copyright Royalty Judges shall request a decision of the Register of

Copyrights, in writing, to resolve such novel question.

Reasonable provision shall be made for comment on such

request by the participants in the proceeding, in such a

way as to minimize duplication and delay. The Register

of Copyrights shall transmit his or her decision to the

Copyright Royalty Judges within 30 days after the Register

of Copyrights receives all of the briefs or comments of

the participants. Such decision shall be in writing and

included by the Copyright Royalty Judges in the record

that accompanies their final determination. If such a decision is timely delivered to the Copyright Royalty Judges,

the Copyright Royalty Judges shall apply the legal determinations embodied in the decision of the Register of Copyrights in resolving material questions of substantive law.

‘‘(ii) In clause (i), a ‘novel question of law’ is a question

of law that has not been determined in prior decisions,

determinations, and rulings described in section 803(a).

‘‘(C) CONSULTATION.—Notwithstanding the provisions

of subparagraph (A), the Copyright Royalty Judges shall

consult with the Register of Copyrights with respect to

any determination or ruling that would require that any

act be performed by the Copyright Office, and any such

determination or ruling shall not be binding upon the Register of Copyrights.

‘‘(D) REVIEW OF LEGAL CONCLUSIONS BY THE REGISTER

OF COPYRIGHTS.—The Register of Copyrights may review

for legal error the resolution by the Copyright Royalty

Judges of a material question of substantive law under

this title that underlies or is contained in a final determination of the Copyright Royalty Judges. If the Register of

Copyrights concludes, after taking into consideration the

views of the participants in the proceeding, that any resolution reached by the Copyright Royalty Judges was in material error, the Register of Copyrights shall issue a written

decision correcting such legal error, which shall be made

part of the record of the proceeding. The Register of Copyrights shall issue such written decision not later than 60

days after the date on which the final determination by

the Copyright Royalty Judges is issued. Additionally, the

Register of Copyrights shall cause to be published in the

Federal Register such written decision, together with a

specific identification of the legal conclusion of the Copyright Royalty Judges that is determined to be erroneous.

As to conclusions of substantive law involving an

interpretation of the statutory provisions of this title, the

decision of the Register of Copyrights shall be binding

as precedent upon the Copyright Royalty Judges in subsequent proceedings under this chapter. When a decision

has been rendered pursuant to this subparagraph, the Register of Copyrights may, on the basis of and in accordance

with such decision, intervene as of right in any appeal

of a final determination of the Copyright Royalty Judges
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pursuant to section 803(d) in the United States Court of

Appeals for the District of Columbia Circuit. If, prior to

intervening in such an appeal, the Register of Copyrights

gives notification to, and undertakes to consult with the

Attorney General with respect to such intervention, and

the Attorney General fails, within a reasonable period after

receiving such notification, to intervene in such appeal,

the Register of Copyrights may intervene in such appeal

in his or her own name by any attorney designated by

the Register of Copyrights for such purpose. Intervention

by the Register of Copyrights in his or her own name

shall not preclude the Attorney General from intervening

on behalf of the United States in such an appeal as may

be otherwise provided or required by law.

‘‘(E) EFFECT ON JUDICIAL REVIEW.—Nothing in this section shall be interpreted to alter the standard applied

by a court in reviewing legal determinations involving an

interpretation or construction of the provisions of this title

or to affect the extent to which any construction or

interpretation of the provisions of this title shall be

accorded deference by a reviewing court.

‘‘(2) PERFORMANCE APPRAISALS.—

‘‘(A) IN GENERAL.—Notwithstanding any other provision of law or any regulation of the Library of Congress,

and subject to subparagraph (B), the Copyright Royalty

Judges shall not receive performance appraisals.

‘‘(B) RELATING TO SANCTION OR REMOVAL.—To the

extent that the Librarian of Congress adopts regulations

under subsection (h) relating to the sanction or removal

of a Copyright Royalty Judge and such regulations require

documentation to establish the cause of such sanction or

removal, the Copyright Royalty Judge may receive an

appraisal related specifically to the cause of the sanction

or removal.

‘‘(g) INCONSISTENT DUTIES BARRED.—No Copyright Royalty

Judge may undertake duties that conflict with his or her duties

and responsibilities as a Copyright Royalty Judge. ‘‘(h) STANDARDS OF CONDUCT.—The Librarian of Congress shall

adopt regulations regarding the standards of conduct, including

financial conflict of interest and restrictions against ex parte

communications, which shall govern the Copyright Royalty Judges

and the proceedings under this chapter. ‘‘(i) REMOVAL OR SANCTION.—The Librarian of Congress may

sanction or remove a Copyright Royalty Judge for violation of

the standards of conduct adopted under subsection (h), misconduct,

neglect of duty, or any disqualifying physical or mental disability.

Any such sanction or removal may be made only after notice and

opportunity for a hearing, but the Librarian of Congress may suspend the Copyright Royalty Judge during the pendency of such

hearing. The Librarian shall appoint an interim Copyright Royalty

Judge during the period of any such suspension.

‘‘§ 803. Proceedings of Copyright Royalty Judges

‘‘(a) PROCEEDINGS.— ‘‘(1) IN GENERAL.—The Copyright Royalty Judges shall act

in accordance with regulations issued by the Copyright Royalty

Judges and the Librarian of Congress, and on the basis of
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a written record, prior determinations and interpretations of

the Copyright Royalty Tribunal, Librarian of Congress, the

Register of Copyrights, and the Copyright Royalty Judges (to

the extent those determinations are not inconsistent with a

decision of the Register of Copyrights that was timely delivered

to the Copyright Royalty Judges pursuant to section 802(f)(1)

(A) or (B), or with a decision of the Register of Copyrights

pursuant to section 802(f)(1)(D)), under this chapter, and

decisions of the court of appeals under this chapter before,

on, or after the effective date of the Copyright Royalty and

Distribution Reform Act of 2004.

‘‘(2) JUDGES ACTING AS PANEL AND INDIVIDUALLY.—The

Copyright Royalty Judges shall preside over hearings in proceedings under this chapter en banc. The Chief Copyright Royalty Judge may designate a Copyright Royalty Judge to preside

individually over such collateral and administrative proceedings, and over such proceedings under paragraphs (1)

through (5) of subsection (b), as the Chief Judge considers

appropriate.

‘‘(3) DETERMINATIONS.—Final determinations of the Copyright Royalty Judges in proceedings under this chapter shall

be made by majority vote. A Copyright Royalty Judge dissenting

from the majority on any determination under this chapter

may issue his or her dissenting opinion, which shall be included

with the determination.

‘‘(b) PROCEDURES.—

‘‘(1) INITIATION.—

‘‘(A) CALL FOR PETITIONS TO PARTICIPATE.—(i) The

Copyright Royalty Judges shall cause to be published in

the Federal Register notice of commencement of proceedings under this chapter, calling for the filing of petitions to participate in a proceeding under this chapter

for the purpose of making the relevant determination under

section 111, 112, 114, 115, 116, 118, 119, 1004, or 1007,

as the case may be—

‘‘(I) promptly upon a determination made under

section 804(a);

‘‘(II) by no later than January 5 of a year specified

in paragraph (2) of section 804(b) for the commencement of proceedings;

‘‘(III) by no later than January 5 of a year specified

in subparagraph (A) or (B) of paragraph (3) of section

804(b) for the commencement of proceedings, or as

otherwise provided in subparagraph (A) or (C) of such

paragraph for the commencement of proceedings;

‘‘(IV) as provided under section 804(b)(8); or

‘‘(V) by no later than January 5 of a year specified

in any other provision of section 804(b) for the filing

of petitions for the commencement of proceedings, if

a petition has not been filed by that date.

‘‘(ii) Petitions to participate shall be filed by no later

than 30 days after publication of notice of commencement

of a proceeding under clause (i), except that the Copyright

Royalty Judges may, for substantial good cause shown

and if there is no prejudice to the participants that have

already filed petitions, accept late petitions to participate

at any time up to the date that is 90 days before the
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date on which participants in the proceeding are to file

their written direct statements. Notwithstanding the preceding sentence, petitioners whose petitions are filed more

than 30 days after publication of notice of commencement

of a proceeding are not eligible to object to a settlement

reached during the voluntary negotiation period under

paragraph (3), and any objection filed by such a petitioner

shall not be taken into account by the Copyright Royalty

Judges.

‘‘(B) PETITIONS TO PARTICIPATE.—Each petition to

participate in a proceeding shall describe the petitioner’s

interest in the subject matter of the proceeding. Parties

with similar interests may file a single petition to participate.

‘‘(2) PARTICIPATION IN GENERAL.—Subject to paragraph (4),

a person may participate in a proceeding under this chapter,

including through the submission of briefs or other information,

only if—

‘‘(A) that person has filed a petition to participate

in accordance with paragraph (1) (either individually or

as a group under paragraph (1)(B)), together with a filing

fee of $150;

‘‘(B) the Copyright Royalty Judges have not determined

that the petition to participate is facially invalid; and

‘‘(C) the Copyright Royalty Judges have not determined, sua sponte or on the motion of another participant

in the proceeding, that the person lacks a significant

interest in the proceeding.

‘‘(3) VOLUNTARY NEGOTIATION PERIOD.—

‘‘(A) IN GENERAL.—Promptly after the date for filing

of petitions to participate in a proceeding, the Copyright

Royalty Judges shall make available to all participants

in the proceeding a list of such participants and shall

initiate a voluntary negotiation period among the participants.

‘‘(B) LENGTH OF PROCEEDINGS.—The voluntary negotiation period initiated under subparagraph (A) shall be 3

months. ‘‘(C) DETERMINATION OF SUBSEQUENT PROCEEDINGS.—

At the close of the voluntary negotiation proceedings, the

Copyright Royalty Judges shall, if further proceedings

under this chapter are necessary, determine whether and

to what extent paragraphs (4) and (5) will apply to the

parties.

‘‘(4) SMALL CLAIMS PROCEDURE IN DISTRIBUTION PROCEEDINGS.—

‘‘(A) IN GENERAL.—If, in a proceeding under this

chapter to determine the distribution of royalties, the contested amount of a claim is $10,000 or less, the Copyright

Royalty Judges shall decide the controversy on the basis

of the filing of the written direct statement by the participant, the response by any opposing participant, and 1

additional response by each such party. The participant

asserting the claim shall not be required to pay the filing

fee under paragraph (2).

‘‘(B) BAD FAITH INFLATION OF CLAIM.—If the Copyright

Royalty Judges determine that a participant asserts in
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bad faith an amount in controversy in excess of $10,000

for the purpose of avoiding a determination under the

procedure set forth in subparagraph (A), the Copyright

Royalty Judges shall impose a fine on that participant

in an amount not to exceed the difference between the

actual amount distributed and the amount asserted by

the participant.

‘‘(5) PAPER PROCEEDINGS.—The Copyright Royalty Judges

in proceedings under this chapter may decide, sua sponte or

upon motion of a participant, to determine issues on the basis

of the filing of the written direct statement by the participant,

the response by any opposing participant, and one additional

response by each such participant. Prior to making such decision to proceed on such a paper record only, the Copyright

Royalty Judges shall offer to all parties to the proceeding

the opportunity to comment on the decision. The procedure

under this paragraph—

‘‘(A) shall be applied in cases in which there is no

genuine issue of material fact, there is no need for evidentiary hearings, and all participants in the proceeding

agree in writing to the procedure; and

‘‘(B) may be applied under such other circumstances

as the Copyright Royalty Judges consider appropriate.

‘‘(6) REGULATIONS.—

‘‘(A) IN GENERAL.—The Copyright Royalty Judges may

issue regulations to carry out their functions under this

title. All regulations issued by the Copyright Royalty

Judges are subject to the approval of the Librarian of

Congress. Not later than 120 days after Copyright Royalty

Judges or interim Copyright Royalty Judges, as the case

may be, are first appointed after the enactment of the

Copyright Royalty and Distribution Reform Act of 2004,

such judges shall issue regulations to govern proceedings

under this chapter.

‘‘(B) INTERIM REGULATIONS.—Until regulations are

adopted under subparagraph (A), the Copyright Royalty

Judges shall apply the regulations in effect under this

chapter on the day before the effective date of the Copyright

Royalty and Distribution Reform Act of 2004, to the extent

such regulations are not inconsistent with this chapter,

except that functions carried out under such regulations

by the Librarian of Congress, the Register of Copyrights,

or copyright arbitration royalty panels that, as of such

date of enactment, are to be carried out by the Copyright

Royalty Judges under this chapter, shall be carried out

by the Copyright Royalty Judges under such regulations. ‘‘(C) REQUIREMENTS.—Regulations issued under

subparagraph (A) shall include the following: ‘‘(i) The written direct statements of all participants in a proceeding under paragraph (2) shall be

filed by a date specified by the Copyright Royalty

Judges, which may be not earlier than 4 months, and

not later than 5 months, after the end of the voluntary

negotiation period under paragraph (3). Notwithstanding the preceding sentence, the Copyright Royalty

Judges may allow a participant in a proceeding to

file an amended written direct statement based on
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new information received during the discovery process,

within 15 days after the end of the discovery period

specified in clause (iii).

‘‘(ii)(I) Following the submission to the Copyright

Royalty Judges of written direct statements by the

participants in a proceeding under paragraph (2), the

judges shall meet with the participants for the purpose

of setting a schedule for conducting and completing

discovery. Such schedule shall be determined by the

Copyright Royalty Judges.

‘‘(II) In this chapter, the term ‘written direct statements’ means witness statements, testimony, and

exhibits to be presented in the proceedings, and such

other information that is necessary to establish terms

and rates, or the distribution of royalty payments,

as the case may be, as set forth in regulations issued

by the Copyright Royalty Judges.

‘‘(iii) Hearsay may be admitted in proceedings

under this chapter to the extent deemed appropriate

by the Copyright Royalty Judges.

‘‘(iv) Discovery in such proceedings shall be permitted for a period of 60 days, except for discovery

ordered by the Copyright Royalty Judges in connection

with the resolution of motions, orders, and disputes

pending at the end of such period.

‘‘(v) Any participant under paragraph (2) in a proceeding under this chapter to determine royalty rates

may request of an opposing participant nonprivileged

documents directly related to the written direct statement or written rebuttal statement of that participant.

Any objection to such a request shall be resolved by

a motion or request to compel production made to

the Copyright Royalty Judges in accordance with regulations adopted by the Copyright Royalty Judges. Each

motion or request to compel discovery shall be determined by the Copyright Royalty Judges, or by a Copyright Royalty Judge when permitted under subsection

(a)(2). Upon such motion, the Copyright Royalty Judges

may order discovery pursuant to regulations established under this paragraph.

‘‘(vi)(I) Any participant under paragraph (2) in a

proceeding under this chapter to determine royalty

rates may, by means of written motion or on the record,

request of an opposing participant or witness other

relevant information and materials if, absent the discovery sought, the Copyright Royalty Judges’ resolution

of the proceeding would be substantially impaired. In

determining whether discovery will be granted under

this clause, the Copyright Royalty Judges may

consider—

‘‘(aa) whether the burden or expense of producing the requested information or materials outweighs the likely benefit, taking into account the

needs and resources of the participants, the importance of the issues at stake, and the probative

value of the requested information or materials

in resolving such issues;
H. R. 1417—13

‘‘(bb) whether the requested information or

materials would be unreasonably cumulative or

duplicative, or are obtainable from another source

that is more convenient, less burdensome, or less

expensive; and

‘‘(cc) whether the participant seeking discovery

has had ample opportunity by discovery in the

proceeding or by other means to obtain the

information sought.

‘‘(II) This clause shall not apply to any proceeding

scheduled to commence after December 31, 2010.

‘‘(vii) In a proceeding under this chapter to determine royalty rates, the participants entitled to receive

royalties shall collectively be permitted to take no more

than 10 depositions and secure responses to no more

than 25 interrogatories, and the participants obligated

to pay royalties shall collectively be permitted to take

no more than 10 depositions and secure responses to

no more than 25 interrogatories. The Copyright Royalty

Judges shall resolve any disputes among similarly

aligned participants to allocate the number of depositions or interrogatories permitted under this clause.

‘‘(viii) The rules and practices in effect on the

day before the effective date of the Copyright Royalty

and Distribution Reform Act of 2004, relating to discovery in proceedings under this chapter to determine

the distribution of royalty fees, shall continue to apply

to such proceedings on and after such effective date.

‘‘(ix) In proceedings to determine royalty rates,

the Copyright Royalty Judges may issue a subpoena

commanding a participant or witness to appear and

give testimony, or to produce and permit inspection

of documents or tangible things, if the Copyright Royalty Judges’ resolution of the proceeding would be

substantially impaired by the absence of such testimony or production of documents or tangible things.

Such subpoena shall specify with reasonable particularity the materials to be produced or the scope and

nature of the required testimony. Nothing in this

clause shall preclude the Copyright Royalty Judges

from requesting the production by a nonparticipant

of information or materials relevant to the resolution

by the Copyright Royalty Judges of a material issue

of fact.

‘‘(x) The Copyright Royalty Judges shall order a

settlement conference among the participants in the

proceeding to facilitate the presentation of offers of

settlement among the participants. The settlement conference shall be held during a 21-day period following

the end of the discovery period and shall take place

outside the presence of the Copyright Royalty Judges.

‘‘(xi) No evidence, including exhibits, may be submitted in the written direct statement or written

rebuttal statement of a participant without a sponsoring witness, except where the Copyright Royalty

Judges have taken official notice, or in the case of
H. R. 1417—14

incorporation by reference of past records, or for good

cause shown.

‘‘(c) DETERMINATION OF COPYRIGHT ROYALTY JUDGES.—

‘‘(1) TIMING.—The Copyright Royalty Judges shall issue

their determination in a proceeding not later than 11 months

after the conclusion of the 21-day settlement conference period

under subsection (b)(6)(C)(x), but, in the case of a proceeding

to determine successors to rates or terms that expire on a

specified date, in no event later than 15 days before the expiration of the then current statutory rates and terms.

‘‘(2) REHEARINGS.—

‘‘(A) IN GENERAL.—The Copyright Royalty Judges may,

in exceptional cases, upon motion of a participant in a

proceeding under subsection (b)(2), order a rehearing, after

the determination in the proceeding is issued under paragraph (1), on such matters as the Copyright Royalty Judges

determine to be appropriate.

‘‘(B) TIMING FOR FILING MOTION.—Any motion for a

rehearing under subparagraph (A) may only be filed within

15 days after the date on which the Copyright Royalty

Judges deliver to the participants in the proceeding their

initial determination concerning rates and terms.

‘‘(C) PARTICIPATION BY OPPOSING PARTY NOT

REQUIRED.—In any case in which a rehearing is ordered,

any opposing party shall not be required to participate

in the rehearing, except that nonparticipation may give

rise to the limitations with respect to judicial review provided for in subsection (d)(1).

‘‘(D) NO NEGATIVE INFERENCE.—No negative inference

shall be drawn from lack of participation in a rehearing.

‘‘(E) CONTINUITY OF RATES AND TERMS.—(i) If the decision of the Copyright Royalty Judges on any motion for

a rehearing is not rendered before the expiration of the

statutory rates and terms that were previously in effect,

in the case of a proceeding to determine successors to

rates and terms that expire on a specified date, then—

‘‘(I) the initial determination of the Copyright Royalty Judges that is the subject of the rehearing motion

shall be effective as of the day following the date

on which the rates and terms that were previously

in effect expire; and

‘‘(II) in the case of a proceeding under section

114(f)(1)(C) or 114(f)(2)(C), royalty rates and terms

shall, for purposes of section 114(f)(4)(B), be deemed

to have been set at those rates and terms contained

in the initial determination of the Copyright Royalty

Judges that is the subject of the rehearing motion,

as of the date of that determination.

‘‘(ii) The pendency of a motion for a rehearing under

this paragraph shall not relieve persons obligated to make

royalty payments who would be affected by the determination on that motion from providing the statements of

account and any reports of use, to the extent required,

and paying the royalties required under the relevant determination or regulations.

‘‘(iii) Notwithstanding clause (ii), whenever royalties

described in clause (ii) are paid to a person other than
H. R. 1417—15

the Copyright Office, the entity designated by the Copyright

Royalty Judges to which such royalties are paid by the

copyright user (and any successor thereto) shall, within

60 days after the motion for rehearing is resolved or, if

the motion is granted, within 60 days after the rehearing

is concluded, return any excess amounts previously paid

to the extent necessary to comply with the final determination of royalty rates by the Copyright Royalty Judges.

Any underpayment of royalties resulting from a rehearing

shall be paid within the same period.

‘‘(3) CONTENTS OF DETERMINATION.—A determination of the

Copyright Royalty Judges shall be supported by the written

record and shall set forth the findings of fact relied on by

the Copyright Royalty Judges. Among other terms adopted

in a determination, the Copyright Royalty Judges may specify

notice and recordkeeping requirements of users of the copyrights at issue that apply in lieu of those that would otherwise

apply under regulations.

‘‘(4) CONTINUING JURISDICTION.—The Copyright Royalty

Judges may, with the approval of the Register of Copyrights,

issue an amendment to a written determination to correct

any technical or clerical errors in the determination or to modify

the terms, but not the rates, of royalty payments in response

to unforeseen circumstances that would frustrate the proper

implementation of such determination. Such amendment shall

be set forth in a written addendum to the determination that

shall be distributed to the participants of the proceeding and

shall be published in the Federal Register.

‘‘(5) PROTECTIVE ORDER.—The Copyright Royalty Judges

may issue such orders as may be appropriate to protect confidential information, including orders excluding confidential

information from the record of the determination that is published or made available to the public, except that any terms

or rates of royalty payments or distributions may not be

excluded.

‘‘(6) PUBLICATION OF DETERMINATION.—By no later than

the end of the 60-day period provided in section 802(f)(1)(D),

the Librarian of Congress shall cause the determination, and

any corrections thereto, to be published in the Federal Register.

The Librarian of Congress shall also publicize the determination and corrections in such other manner as the Librarian

considers appropriate, including, but not limited to, publication

on the Internet. The Librarian of Congress shall also make

the determination, corrections, and the accompanying record

available for public inspection and copying.

‘‘(7) LATE PAYMENT.—A determination of Copyright Royalty

Judges may include terms with respect to late payment, but

in no way shall such terms prevent the copyright holder from

asserting other rights or remedies provided under this title.

‘‘(d) JUDICIAL REVIEW.— ‘‘(1) APPEAL.—Any determination of the Copyright Royalty

Judges under subsection (c) may, within 30 days after the

publication of the determination in the Federal Register, be

appealed, to the United States Court of Appeals for the District

of Columbia Circuit, by any aggrieved participant in the proceeding under subsection (b)(2) who fully participated in the

proceeding and who would be bound by the determination.
H. R. 1417—16

Any participant that did not participate in a rehearing may

not raise any issue that was the subject of that rehearing

at any stage of judicial review of the hearing determination.

If no appeal is brought within that 30-day period, the determination of the Copyright Royalty Judges shall be final, and

the royalty fee or determination with respect to the distribution

of fees, as the case may be, shall take effect as set forth

in paragraph (2).

‘‘(2) EFFECT OF RATES.—

‘‘(A) EXPIRATION ON SPECIFIED DATE.—When this title

provides that the royalty rates and terms that were previously in effect are to expire on a specified date, any

adjustment or determination by the Copyright Royalty

Judges of successor rates and terms for an ensuing statutory license period shall be effective as of the day following

the date of expiration of the rates and terms that were

previously in effect, even if the determination of the Copyright Royalty Judges is rendered on a later date. A licensee

shall be obligated to continue making payments under

the rates and terms previously in effect until such time

as rates and terms for the successor period are established.

Whenever royalties pursuant to this section are paid to

a person other than the Copyright Office, the entity designated by the Copyright Royalty Judges to which such

royalties are paid by the copyright user (and any successor

thereto) shall, within 60 days after the final determination

of the Copyright Royalty Judges establishing rates and

terms for a successor period or the exhaustion of all rehearings or appeals of such determination, if any, return

any excess amounts previously paid to the extent necessary

to comply with the final determination of royalty rates.

Any underpayment of royalties by a copyright user shall

be paid to the entity designated by the Copyright Royalty

Judges within the same period.

‘‘(B) OTHER CASES.—In cases where rates and terms

have not, prior to the inception of an activity, been established for that particular activity under the relevant

license, such rates and terms shall be retroactive to the

inception of activity under the relevant license covered

by such rates and terms. In other cases where rates and

terms do not expire on a specified date, successor rates

and terms shall take effect on the first day of the second

month that begins after the publication of the determination of the Copyright Royalty Judges in the Federal Register, except as otherwise provided in this title, or by the

Copyright Royalty Judges, or as agreed by the participants

in a proceeding that would be bound by the rates and

terms. Except as otherwise provided in this title, the rates

and terms, to the extent applicable, shall remain in effect

until such successor rates and terms become effective.

‘‘(C) OBLIGATION TO MAKE PAYMENTS.—

‘‘(i) The pendency of an appeal under this subsection shall not relieve persons obligated to make

royalty payments under section 111, 112, 114, 115,

116, 118, 119, or 1003, who would be affected by the

determination on appeal, from—
H. R. 1417—17

‘‘(I) providing the statements of account and

any report of use; and

‘‘(II) paying the royalties required under the

relevant determination or regulations.

‘‘(ii) Notwithstanding clause (i), whenever royalties

described in clause (i) are paid to a person other than

the Copyright Office, the entity designated by the Copyright

Royalty Judges to which such royalties are paid by the

copyright user (and any successor thereto) shall, within

60 days after the final resolution of the appeal, return

any excess amounts previously paid (and interest thereon,

if ordered pursuant to paragraph (3)) to the extent necessary to comply with the final determination of royalty

rates on appeal. Any underpayment of royalties resulting

from an appeal (and interest thereon, if ordered pursuant

to paragraph (3)) shall be paid within the same period.

‘‘(3) JURISDICTION OF COURT.—If the court, pursuant to

section 706 of title 5, modifies or vacates a determination

of the Copyright Royalty Judges, the court may enter its own

determination with respect to the amount or distribution of

royalty fees and costs, and order the repayment of any excess

fees, the payment of any underpaid fees, and the payment

of interest pertaining respectively thereto, in accordance with

its final judgment. The court may also vacate the determination

of the Copyright Royalty Judges and remand the case to the

Copyright Royalty Judges for further proceedings in accordance

with subsection (a).

‘‘(e) ADMINISTRATIVE MATTERS.—

‘‘(1) DEDUCTION OF COSTS OF LIBRARY OF CONGRESS AND

COPYRIGHT OFFICE FROM FILING FEES.—

‘‘(A) DEDUCTION FROM FILING FEES.—The Librarian of

Congress may, to the extent not otherwise provided under

this title, deduct from the filing fees collected under subsection (b) for a particular proceeding under this chapter

the reasonable costs incurred by the Librarian of Congress,

the Copyright Office, and the Copyright Royalty Judges

in conducting that proceeding, other than the salaries of

the Copyright Royalty Judges and the 3 staff members

appointed under section 802(b).

‘‘(B) AUTHORIZATION OF APPROPRIATIONS.—There are

authorized to be appropriated such sums as may be necessary to pay the costs incurred under this chapter not

covered by the filing fees collected under subsection (b).

All funds made available pursuant to this subparagraph

shall remain available until expended.

‘‘(2) POSITIONS REQUIRED FOR ADMINISTRATION OF COMPULSORY LICENSING.—Section 307 of the Legislative Branch Appropriations Act, 1994, shall not apply to employee positions in

the Library of Congress that are required to be filled in order

to carry out section 111, 112, 114, 115, 116, 118, or 119 or

chapter 10.

‘‘§ 804. Institution of proceedings

‘‘(a) FILING OF PETITION.—With respect to proceedings referred

to in paragraphs (1) and (2) of section 801(b) concerning the determination or adjustment of royalty rates as provided in sections

111, 112, 114, 115, 116, 118, 119, and 1004, during the calendar
H. R. 1417—18

years specified in the schedule set forth in subsection (b), any

owner or user of a copyrighted work whose royalty rates are specified by this title, or are established under this chapter before

or after the enactment of the Copyright Royalty and Distribution

Reform Act of 2004, may file a petition with the Copyright Royalty

Judges declaring that the petitioner requests a determination or

adjustment of the rate. The Copyright Royalty Judges shall make

a determination as to whether the petitioner has such a significant

interest in the royalty rate in which a determination or adjustment

is requested. If the Copyright Royalty Judges determine that the

petitioner has such a significant interest, the Copyright Royalty

Judges shall cause notice of this determination, with the reasons

for such determination, to be published in the Federal Register,

together with the notice of commencement of proceedings under

this chapter. With respect to proceedings under paragraph (1) of

section 801(b) concerning the determination or adjustment of royalty

rates as provided in sections 112 and 114, during the calendar

years specified in the schedule set forth in subsection (b), the

Copyright Royalty Judges shall cause notice of commencement of

proceedings under this chapter to be published in the Federal

Register as provided in section 803(b)(1)(A). ‘‘(b) TIMING OF PROCEEDINGS.—

‘‘(1) SECTION 111 PROCEEDINGS.—(A) A petition described

in subsection (a) to initiate proceedings under section 801(b)(2)

concerning the adjustment of royalty rates under section 111

to which subparagraph (A) or (D) of section 801(b)(2) applies

may be filed during the year 2005 and in each subsequent

fifth calendar year.

‘‘(B) In order to initiate proceedings under section 801(b)(2)

concerning the adjustment of royalty rates under section 111

to which subparagraph (B) or (C) of section 801(b)(2) applies,

within 12 months after an event described in either of those

subsections, any owner or user of a copyrighted work whose

royalty rates are specified by section 111, or by a rate established under this chapter before or after the enactment of

the Copyright Royalty and Distribution Reform Act of 2004,

may file a petition with the Copyright Royalty Judges declaring

that the petitioner requests an adjustment of the rate. The

Copyright Royalty Judges shall then proceed as set forth in

subsection (a) of this section. Any change in royalty rates

made under this chapter pursuant to this subparagraph may

be reconsidered in the year 2005, and each fifth calendar year

thereafter, in accordance with the provisions in section 801(b)(3)

(B) or (C), as the case may be. A petition for adjustment

of rates established by section 111(d)(1)(B) as a result of a

change is the rules and regulations of the Federal Communications Commission shall set forth the change on which the

petition is based.

‘‘(C) Any adjustment of royalty rates under section 111

shall take effect as of the first accounting period commencing

after the publication of the determination of the Copyright

Royalty Judges in the Federal Register, or on such other date

as is specified in that determination. ‘‘(2) CERTAIN SECTION 112 PROCEEDINGS.—Proceedings

under this chapter shall be commenced in the year 2007 to

determine reasonable terms and rates of royalty payments for

the activities described in section 112(e)(1) relating to the
H. R. 1417—19

limitation on exclusive rights specified by section

114(d)(1)(C)(iv), to become effective on January 1, 2009. Such

proceedings shall be repeated in each subsequent fifth calendar

year.

‘‘(3) SECTION 114 AND CORRESPONDING 112 PROCEEDINGS.—

‘‘(A) FOR ELIGIBLE NONSUBSCRIPTION SERVICES AND NEW

SUBSCRIPTION SERVICES.—Proceedings under this chapter

shall be commenced as soon as practicable after the effective date of the Copyright Royalty and Distribution Reform

Act of 2004 to determine reasonable terms and rates of

royalty payments under sections 114 and 112 for the activities of eligible nonsubscription transmission services and

new subscription services, to be effective for the period

beginning on January 1, 2006, and ending on December

31, 2010. Such proceedings shall next be commenced in

January 2009 to determine reasonable terms and rates

of royalty payments, to become effective on January 1,

2011. Thereafter, such proceedings shall be repeated in

each subsequent fifth calendar year.

‘‘(B) FOR PREEXISTING SUBSCRIPTION AND SATELLITE

DIGITAL AUDIO RADIO SERVICES.—Proceedings under this

chapter shall be commenced in January 2006 to determine

reasonable terms and rates of royalty payments under sections 114 and 112 for the activities of preexisting subscription services, to be effective during the period beginning

on January 1, 2008, and ending on December 31, 2012,

and preexisting satellite digital audio radio services, to

be effective during the period beginning on January 1,

2007, and ending on December 31, 2012. Such proceedings

shall next be commenced in 2011 to determine reasonable

terms and rates of royalty payments, to become effective

on January 1, 2013. Thereafter, such proceedings shall

be repeated in each subsequent fifth calendar year.

‘‘(C)(i) Notwithstanding any other provision of this

chapter, this subparagraph shall govern proceedings commenced pursuant to section 114(f)(1)(C) and 114(f)(2)(C)

concerning new types of services.

‘‘(ii) Not later than 30 days after a petition to determine

rates and terms for a new type of service that is filed

by any copyright owner of sound recordings, or such new

type of service, indicating that such new type of service

is or is about to become operational, the Copyright Royalty

Judges shall issue a notice for a proceeding to determine

rates and terms for such service.

‘‘(iii) The proceeding shall follow the schedule set forth

in such subsections (b), (c), and (d) of section 803, except

that—

‘‘(I) the determination shall be issued by not later

than 24 months after the publication of the notice

under clause (ii); and

‘‘(II) the decision shall take effect as provided in

subsections (c)(2) and (d)(2) of section 803 and section

114(f)(4)(B)(ii) and (C).

‘‘(iv) The rates and terms shall remain in effect for

the period set forth in section 114(f)(1)(C) or 114(f)(2)(C),

as the case may be.
H. R. 1417—20

‘‘(4) SECTION 115 PROCEEDINGS.—A petition described in

subsection (a) to initiate proceedings under section 801(b)(1)

concerning the adjustment or determination of royalty rates

as provided in section 115 may be filed in the year 2006

and in each subsequent fifth calendar year, or at such other

times as the parties have agreed under section 115(c)(3) (B)

and (C).

‘‘(5) SECTION 116 PROCEEDINGS.—(A) A petition described

in subsection (a) to initiate proceedings under section 801(b)

concerning the determination of royalty rates and terms as

provided in section 116 may be filed at any time within 1

year after negotiated licenses authorized by section 116 are

terminated or expire and are not replaced by subsequent agreements.

‘‘(B) If a negotiated license authorized by section 116 is

terminated or expires and is not replaced by another such

license agreement which provides permission to use a quantity

of musical works not substantially smaller than the quantity

of such works performed on coin-operated phonorecord players

during the 1-year period ending March 1, 1989, the Copyright

Royalty Judges shall, upon petition filed under paragraph (1)

within 1 year after such termination or expiration, commence

a proceeding to promptly establish an interim royalty rate

or rates for the public performance by means of a coin-operated

phonorecord player of nondramatic musical works embodied

in phonorecords which had been subject to the terminated

or expired negotiated license agreement. Such rate or rates

shall be the same as the last such rate or rates and shall

remain in force until the conclusion of proceedings by the

Copyright Royalty Judges, in accordance with section 803, to

adjust the royalty rates applicable to such works, or until

superseded by a new negotiated license agreement, as provided

in section 116(b).

‘‘(6) SECTION 118 PROCEEDINGS.—A petition described in

subsection (a) to initiate proceedings under section 801(b)(1)

concerning the determination of reasonable terms and rates

of royalty payments as provided in section 118 may be filed

in the year 2006 and in each subsequent fifth calendar year.

‘‘(7) SECTION 1004 PROCEEDINGS.—A petition described in

subsection (a) to initiate proceedings under section 801(b)(1)

concerning the adjustment of reasonable royalty rates under

section 1004 may be filed as provided in section 1004(a)(3).

‘‘(8) PROCEEDINGS CONCERNING DISTRIBUTION OF ROYALTY

FEES.—With respect to proceedings under section 801(b)(3) concerning the distribution of royalty fees in certain circumstances

under section 111, 119, or 1007, the Copyright Royalty Judges

shall, upon a determination that a controversy exists concerning

such distribution, cause to be published in the Federal Register

notice of commencement of proceedings under this chapter.

‘‘§ 805. General rule for voluntarily negotiated agreements

‘‘Any rates or terms under this title that—

‘‘(1) are agreed to by participants to a proceeding under

section 803(b)(3),

‘‘(2) are adopted by the Copyright Royalty Judges as part

of a determination under this chapter, and
H. R. 1417—21

‘‘(3) are in effect for a period shorter than would otherwise

apply under a determination pursuant to this chapter,

shall remain in effect for such period of time as would otherwise

apply under such determination, except that the Copyright Royalty

Judges shall adjust the rates pursuant to the voluntary negotiations

to reflect national monetary inflation during the additional period

the rates remain in effect.’’.

(b) CONFORMING AMENDMENT.—The table of chapters for title

17, United States Code, is amended by striking the item relating

to chapter 8 and inserting the following:

‘‘8. Proceedings by Copyright Royalty Judges ............................................ 801’’.

SEC. 4. DEFINITION.

Section 101 is amended by inserting after the definition of

‘‘copies’’ the following:

‘‘A ‘Copyright Royalty Judge’ is a Copyright Royalty Judge

appointed under section 802 of this title, and includes any

individual serving as an interim Copyright Royalty Judge under

such section.’’.

SEC. 5. TECHNICAL AMENDMENTS.

(a) CABLE RATES.—Section 111(d) is amended—

(1) in paragraph (2), in the second sentence, by striking

‘‘a copyright arbitration royalty panel’’ and inserting ‘‘the Copyright Royalty Judges.’’; and

(2) in paragraph (4)—

(A) in subparagraph (A), by striking ‘‘Librarian of Congress’’ each place it appears and inserting ‘‘Copyright Royalty Judges’’;

(B) in subparagraph (B)—

(i) in the first sentence, by striking ‘‘Librarian

of Congress shall, upon the recommendation of the

Register of Copyrights,’’ and inserting ‘‘Copyright Royalty Judges shall’’;

(ii) in the second sentence, by striking ‘‘Librarian

determines’’ and inserting ‘‘Copyright Royalty Judges

determine’’; and

(iii) in the third sentence—

(I) by striking ‘‘Librarian’’ each place it

appears and inserting ‘‘Copyright Royalty Judges’’;

and

(II) by striking ‘‘convene a copyright arbitration royalty panel’’ and inserting ‘‘conduct a proceeding’’; and

(C) in subparagraph (C), by striking ‘‘Librarian of Congress’’ and inserting ‘‘Copyright Royalty Judges’’.

(b) EPHEMERAL RECORDINGS.—Section 112(e) is amended—

(1) in paragraph (3)—

(A) by amending the first sentence to read as follows:

‘‘Proceedings under chapter 8 shall determine reasonable

rates and terms of royalty payments for the activities specified by paragraph (1) during the 5-year period beginning

on January 1 of the second year following the year in

which the proceedings are to be commenced, or such other

period as the parties may agree.’’;

(B) in the third sentence, by striking ‘‘Librarian of

Congress’’ and inserting ‘‘Copyright Royalty Judges’’; and
H. R. 1417—22

(C) in the fourth sentence, by striking ‘‘negotiation’’;

(2) in paragraph (4)—

(A) by amending the first sentence to read as follows:

‘‘The schedule of reasonable rates and terms determined

by the Copyright Royalty Judges shall, subject to paragraph

(5), be binding on all copyright owners of sound recordings

and transmitting organizations entitled to a statutory

license under this subsection during the 5-year period specified in paragraph (3), or such other period as the parties

may agree.’’;

(B) by striking ‘‘copyright arbitration royalty panel’’

each subsequent place it appears and inserting ‘‘Copyright

Royalty Judges’’;

(C) in the fourth sentence, by striking ‘‘its decision’’

and inserting ‘‘their decision’’;

(D) in the fifth sentence, by striking ‘‘negotiated as

provided’’ and inserting ‘‘described’’; and

(E) in the last sentence, by striking ‘‘Librarian of Congress’’ and inserting ‘‘Copyright Royalty Judges’’;

(3) in paragraph (5), by striking ‘‘determination by a copyright arbitration royalty panel or decision by the Librarian

of Congress’’ and inserting ‘‘decision by the Librarian of Congress or determination by the Copyright Royalty Judges’’;

(4) by striking paragraph (6) and redesignating paragraphs

(7), (8), and (9), as paragraphs (6), (7), and (8), respectively;

and

(5) in paragraph (6)(A), as so redesignated, by striking

‘‘Librarian of Congress’’ and inserting ‘‘Copyright Royalty

Judges’’.

(c) SCOPE OF EXCLUSIVE RIGHTS IN SOUND RECORDINGS.—Section 114(f) is amended—

(1) in paragraph (1)—

(A) in subparagraph (A)—

(i) by amending the first sentence to read as follows: ‘‘Proceedings under chapter 8 shall determine

reasonable rates and terms of royalty payments for

subscription transmissions by preexisting subscription

services and transmissions by preexisting satellite digital audio radio services specified by subsection (d)(2)

during the 5-year period beginning on January 1 of

the second year following the year in which the proceedings are to be commenced, except where a different

transitional period is provided under section 6(b)(3)

of the Copyright Royalty and Distribution Reform Act

of 2004 or such other period.’’;

(ii) in the third sentence, by striking ‘‘Librarian

of Congress’’ and inserting ‘‘Copyright Royalty Judges’’;

and

(iii) in the fourth sentence, by striking ‘‘negotiation’’;

(B) in subparagraph (B)—

(i) by amending the first sentence to read as follows: ‘‘The schedule of reasonable rates and terms

determined by the Copyright Royalty Judges shall,

subject to paragraph (3), be binding on all copyright

owners of sound recordings and entities performing

sound recordings affected by this paragraph during
H. R. 1417—23

the 5-year period specified in subparagraph (A), a

transitional period provided under section 6(b)(3) of

the Copyright Royalty and Distribution Reform Act

of 2004, or such other period as the parties may agree.’’;

(ii) in the second sentence, by striking ‘‘copyright

arbitration royalty panel’’ and inserting ‘‘Copyright

Royalty Judges’’; and

(iii) in the second sentence, by striking ‘‘negotiated

as provided’’ and inserting ‘‘described’’; and

(C) by amending subparagraph (C) to read as follows:

‘‘(C) The procedures under subparagraphs (A) and (B) also

shall be initiated pursuant to a petition filed by any copyright

owners of sound recordings, any preexisting subscription services, or any preexisting satellite digital audio radio services

indicating that a new type of subscription digital audio transmission service on which sound recordings are performed is

or is about to become operational, for the purpose of determining reasonable terms and rates of royalty payments with

respect to such new type of transmission service for the period

beginning with the inception of such new type of service and

ending on the date on which the royalty rates and terms for

subscription digital audio transmission services most recently

determined under subparagraph (A) or (B) and chapter 8 expire,

or such other period as the parties may agree.’’;

(2) in paragraph (2)—

(A) in subparagraph (A)—

(i) by amending the first paragraph to read as

follows: ‘‘Proceedings under chapter 8 shall determine

reasonable rates and terms of royalty payments for

subscription transmissions by eligible nonsubscription

transmission services and transmissions by new

subscription services specified by subsection (d)(2)

during the 5-year period beginning on January 1 of

the second year following the year in which the proceedings are to be commenced, except where a different

transitional period is provided under section 6(b)(3)

of the Copyright Royalty and Distribution Reform Act

of 2004, or such other period as the parties may agree.’’;

(ii) in the third sentence, by striking ‘‘Librarian

of Congress’’ and inserting ‘‘Copyright Royalty Judges’’;

and

(iii) in the fourth sentence, by striking ‘‘negotiation’’;

(B) in subparagraph (B)—

(i) by amending the first sentence to read as follows: ‘‘The schedule of reasonable rates and terms

determined by the Copyright Royalty Judges shall,

subject to paragraph (3), be binding on all copyright

owners of sound recordings and entities performing

sound recordings affected by this paragraph during

the 5-year period specified in subparagraph (A), a

transitional period provided under section 6(b)(3) of

the Copyright Royalty and Distribution Act of 2004,

or such other period as the parties may agree.’’;

(ii) by striking ‘‘copyright arbitration royalty panel’’

each subsequent place it appears and inserting ‘‘Copyright Royalty Judges’’; and
H. R. 1417—24

(iii) in the last sentence by striking ‘‘negotiated

as provided’’ and inserting ‘‘described in’’; and

(C) by amending subparagraph (C) to read as follows:

‘‘(C) The procedures under subparagraphs (A) and (B) shall

also be initiated pursuant to a petition filed by any copyright

owners of sound recordings or any eligible nonsubscription

service or new subscription service indicating that a new type

of eligible nonsubscription service or new subscription service

on which sound recordings are performed is or is about to

become operational, for the purpose of determining reasonable

terms and rates of royalty payments with respect to such new

type of service for the period beginning with the inception

of such new type of service and ending on the date on which

the royalty rates and terms for preexisting subscription digital

audio transmission services or preexisting satellite digital radio

audio services, as the case may be, most recently determined

under subparagraph (A) or (B) and chapter 8 expire, or such

other period as the parties may agree.’’;

(3) in paragraph (3), by striking ‘‘determination by a copyright arbitration royalty panel or decision by the Librarian

of Congress’’ and inserting ‘‘decision by the Librarian of Congress or determination by the Copyright Royalty Judges’’; and

(4) in paragraph (4)—

(A) by striking ‘‘Librarian of Congress’’ each place it

appears and inserting ‘‘Copyright Royalty Judges’’; and

(B) by adding after the first sentence of subparagraph

(A) the following: ‘‘The notice and recordkeeping rules in

effect on the day before the effective date of the Copyright

Royalty and Distribution Reform Act of 2004 shall remain

in effect unless and until new regulations are promulgated

by the Copyright Royalty Judges. If new regulations are

promulgated under this subparagraph, the Copyright Royalty Judges shall take into account the substance and

effect of the rules in effect on the day before the effective

date of the Copyright Royalty and Distribution Reform

Act of 2004 and shall, to the extent practicable, avoid

significant disruption of the functions of any designated

agent authorized to collect and distribute royalty fees.’’.

(d) PHONORECORDS OF NONDRAMATIC MUSICAL WORKS.—Section

115(c)(3) is amended—

(1) in subparagraph (A)(ii), by striking ‘‘(F)’’ and inserting

‘‘(E)’’;

(2) in subparagraph (B)—

(A) by striking ‘‘under this paragraph’’ and inserting

‘‘under this section’’;

(B) by inserting ‘‘on a nonexclusive basis’’ after ‘‘common agents’’; and

(C) by striking ‘‘subparagraphs (C) through (F)’’ and

inserting ‘‘this subparagraph and subparagraphs (C)

through (E)’’; and

(3) in subparagraph (C)— (A) by amending the first sentence to read as follows: ‘‘Proceedings under chapter 8 shall determine reasonable

rates and terms of royalty payments for the activities specified by this section during the period beginning with the

effective date of such rates and terms, but not earlier

than January 1 of the second year following the year in
H. R. 1417—25

which the petition requesting the proceeding is filed, and

ending on the effective date of successor rates and terms,

or such other period as the parties may agree.’’;

(B) in the third sentence, by striking ‘‘Librarian of

Congress’’ and inserting ‘‘Copyright Royalty Judges’’; and

(C) in the fourth sentence, by striking ‘‘negotiation’’;

(4) in subparagraph (D)—

(A) by amending the first sentence to read as follows:

‘‘The schedule of reasonable rates and terms determined

by the Copyright Royalty Judges shall, subject to subparagraph (E), be binding on all copyright owners of nondramatic musical works and persons entitled to obtain a

compulsory license under subsection (a)(1) during the

period specified in subparagraph (C), such other period

as may be determined pursuant to subparagraphs (B) and

(C), or such other period as the parties may agree.’’;

(B) in the third sentence, by striking ‘‘copyright arbitration royalty panel’’ and inserting ‘‘Copyright Royalty

Judges’’;

(C) in the third sentence, by striking ‘‘negotiated as

provided in subparagraphs (B) and (C)’’ and inserting ‘‘described’’; and

(D) in the last sentence, by striking ‘‘Librarian of Congress’’ and inserting ‘‘Copyright Royalty Judges’’.

(5) in subparagraph (E)—

(A) in clause (i)—

(i) in the first sentence, by striking ‘‘Librarian

of Congress’’ and inserting ‘‘Librarian of Congress and

Copyright Royalty Judges’’; and

(ii) in the second sentence, by striking ‘‘(C), (D)

or (F) shall be given effect’’ and inserting ‘‘(C) or (D)

shall be given effect as to digital phonorecord deliveries’’; and

(B) in clause (ii)(I), by striking ‘‘(C), (D) or (F)’’ each

place it appears and inserting ‘‘(C) or (D)’’; and

(6) by striking subparagraph (F) and redesignating subparagraphs (G) through (L) as subparagraphs (F) through (K),

respectively.

(e) COIN-OPERATED PHONORECORD PLAYERS.—Section 116 is

amended—

(1) in subsection (b), by amending paragraph (2) to read

as follows:

‘‘(2) CHAPTER 8 PROCEEDING.—Parties not subject to such

a negotiation may have the terms and rates and the division

of fees described in paragraph (1) determined in a proceeding

in accordance with the provisions of chapter 8.’’; and

(2) in subsection (c)— (A) in the subsection heading, by striking ‘‘COPYRIGHT

ARBITRATION ROYALTY PANEL DETERMINATIONS’’ and

inserting ‘‘DETERMINATIONS BY COPYRIGHT ROYALTY

JUDGES’’; and

(B) by striking ‘‘a copyright arbitration royalty panel’’ and inserting ‘‘the Copyright Royalty Judges’’. (f) USE OF CERTAIN WORKS IN CONNECTION WITH NONCOMMER- CIAL BROADCASTING.—Section 118 is amended— (1) in subsection (b)— (A) in paragraph (1)—
H. R. 1417—26

(i) in the first sentence, by striking ‘‘Librarian

of Congress’’ and inserting ‘‘Copyright Royalty Judges’’;

and

(ii) by striking the second and third sentences;

(B) in paragraph (2), by striking ‘‘Librarian of Congress:’’ and all that follows through the end of the sentence

and inserting ‘‘Librarian of Congress or the Copyright Royalty Judges, if copies of such agreements are filed with

the Copyright Royalty Judges within 30 days of execution

in accordance with regulations that the Copyright Royalty

Judges shall issue.’’; and

(C) in paragraph (3)—

(i) in the second sentence—

(I) by striking ‘‘copyright arbitration royalty

panel’’ and inserting ‘‘Copyright Royalty Judges’’;

and

(II) by striking ‘‘paragraph (2).’’ and inserting

‘‘paragraph (2) or (3).’’;

(ii) in the last sentence, by striking ‘‘‘Librarian

of Congress’’ and inserting ‘‘Copyright Royalty Judges’’;

and

(iii) by striking ‘‘(3) In’’ and all that follows through

the end of the first sentence and inserting the following:

‘‘(3) Voluntary negotiation proceedings initiated pursuant

to a petition filed under section 804(a) for the purpose of determining a schedule of terms and rates of royalty payments

by public broadcasting entities to copyright owners in works

specified by this subsection and the proportionate division of

fees paid among various copyright owners shall cover the 5-

year period beginning on January 1 of the second year following

the year in which the petition is filed. The parties to each

negotiation proceeding shall bear their own costs.

‘‘(4) In the absence of license agreements negotiated under

paragraph (2) or (3), the Copyright Royalty Judges shall, pursuant to chapter 8, conduct a proceeding to determine and publish

in the Federal Register a schedule of rates and terms which,

subject to paragraph (2), shall be binding on all owners of

copyright in works specified by this subsection and public broadcasting entities, regardless of whether such copyright owners

have submitted proposals to the Copyright Royalty Judges.’’;

(2) by striking subsection (c) and redesignating subsections

(d) through (g) as subsections (c) through (f), respectively;

(3) in subsection (c), as so redesignated, in the matter

preceding paragraph (1)—

(A) by striking ‘‘(b)(2)’’ and inserting ‘‘(b)(2) or (3)’’;

(B) by striking ‘‘(b)(3)’’ and inserting ‘‘(b)(4)’’; and

(C) by striking ‘‘a copyright arbitration royalty panel

under subsection (b)(3)’’ and inserting ‘‘the Copyright Royalty Judges under subsection (b)(3), to the extent that

they were accepted by the Librarian of Congress’’;

(4) in subsection (d), as so redesignated—

(A) by striking ‘‘in the Copyright Office’’ and inserting

‘‘with the Copyright Royalty Judges’’; and

(B) by striking ‘‘Register of Copyrights shall prescribe’’

and inserting ‘‘Copyright Royalty Judges shall prescribe

as provided in section 803(b)(6)’’; and
H. R. 1417—27

(5) in subsection (f), as so redesignated, by striking ‘‘(d)’’

and inserting ‘‘(c)’’.

(g) SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS.—Section 119(b) is amended—

(1) in paragraph (3), by striking ‘‘Librarian of Congress’’

and inserting ‘‘Copyright Royalty Judges’’; and

(2) in paragraph (4)—

(A) in subparagraph (A), by striking ‘‘Librarian of Congress’’ each place it appears and inserting ‘‘Copyright Royalty Judges’’; and

(B) by amending subparagraphs (B) and (C) to read

as follows:

‘‘(B) DETERMINATION OF CONTROVERSY; DISTRIBUTIONS.—After the first day of August of each year, the

Copyright Royalty Judges shall determine whether there

exists a controversy concerning the distribution of royalty

fees. If the Copyright Royalty Judges determine that no

such controversy exists, the Librarian of Congress shall,

after deducting reasonable administrative costs under this

paragraph, distribute such fees to the copyright owners

entitled to receive them, or to their designated agents.

If the Copyright Royalty Judges find the existence of a

controversy, the Copyright Royalty Judges shall, pursuant

to chapter 8 of this title, conduct a proceeding to determine

the distribution of royalty fees.

‘‘(C) WITHHOLDING OF FEES DURING CONTROVERSY.—

During the pendency of any proceeding under this subsection, the Copyright Royalty Judges shall withhold from

distribution an amount sufficient to satisfy all claims with

respect to which a controversy exists, but shall have the

discretion to proceed to distribute any amounts that are

not in controversy.’’.

(h) RATEMAKING FOR SATELLITE CARRIERS.—Section 119(c) of

title 17, United States Code, is amended—

(1) in paragraph (2)—

(A) in subparagraph (B), by striking ‘‘Librarian of Congress’’ and inserting ‘‘Copyright Royalty Judges’’; and

(B) in subparagraph (C), by striking ‘‘Register of Copyrights shall prescribe’’ and inserting ‘‘Copyright Royalty

Judges shall prescribe as provided in section 803(b)(6);

and

(2) in paragraph (3)—

(A) in subparagraph (A)—

(i) by striking ‘‘arbitration proceedings’’ and

inserting ‘‘proceedings’’; and

(ii) by striking ‘‘arbitration proceeding’’ and

inserting ‘‘proceedings’’;

(B) in subparagraph (B)—

(i) by striking ‘‘copyright arbitration royalty panel

appointed under chapter 8’’ and inserting ‘‘Copyright

Royalty Judges’’; and

(ii) by striking ‘‘panel shall base its decision’’ and

inserting ‘‘Copyright Royalty Judges shall base their

determination’’; and

(C) in subparagraph (C)—
H. R. 1417—28

(i) in the heading, by striking ‘‘DECISION OF

ARBITRATION PANEL OR ORDER OF LIBRARIAN’’ and

inserting ‘‘DETERMINATION UNDER CHAPTER 8’’; and

(ii) by striking clauses (i) and (ii) and inserting

the following:

‘‘(i) is made by the Copyright Royalty Judges

pursuant to this paragraph and becomes final, or

‘‘(ii) is made by the court on appeal under section

803(d)(3),’’.

(i) DIGITAL AUDIO RECORDING DEVICES.—

(1) ROYALTY PAYMENTS.—Section 1004(a)(3) is amended by

striking ‘‘Librarian of Congress’’ each place it appears and

inserting ‘‘Copyright Royalty Judges’’.

(2) ENTITLEMENT TO ROYALTY PAYMENTS.—Section 1006(c)

is amended by striking ‘‘Librarian of Congress shall convene

a copyright arbitration royalty panel which’’ and inserting

‘‘Copyright Royalty Judges’’.

(3) PROCEDURES FOR DISTRIBUTING ROYALTY PAYMENTS.—

Section 1007 is amended—

(A) in subsection (a), by amending paragraph (1) to

read as follows:

‘‘(1) FILING OF CLAIMS.—During the first 2 months of each

calendar year, every interested copyright party seeking to

receive royalty payments to which such party is entitled under

section 1006 shall file with the Copyright Royalty Judges a

claim for payments collected during the preceding year in such

form and manner as the Copyright Royalty Judges shall prescribe by regulation.’’; and

(B) by amending subsections (b) and (c) to read as

follows:

‘‘(b) DISTRIBUTION OF PAYMENTS IN THE ABSENCE OF A DISPUTE.—After the period established for the filing of claims under

subsection (a), in each year, the Copyright Royalty Judges shall

determine whether there exists a controversy concerning the distribution of royalty payments under section 1006(c). If the Copyright

Royalty Judges determine that no such controversy exists, the

Librarian of Congress shall, within 30 days after such determination, authorize the distribution of the royalty payments as set

forth in the agreements regarding the distribution of royalty payments entered into pursuant to subsection (a). The Librarian of

Congress shall, before such royalty payments are distributed, deduct

the reasonable administrative costs incurred by the Librarian under

this section.

‘‘(c) RESOLUTION OF DISPUTES.—If the Copyright Royalty Judges

find the existence of a controversy, the Copyright Royalty Judges

shall, pursuant to chapter 8 of this title, conduct a proceeding

to determine the distribution of royalty payments. During the pendency of such a proceeding, the Copyright Royalty Judges shall

withhold from distribution an amount sufficient to satisfy all claims

with respect to which a controversy exists, but shall, to the extent

feasible, authorize the distribution of any amounts that are not

in controversy. The Librarian of Congress shall, before such royalty

payments are distributed, deduct the reasonable administrative

costs incurred by the Librarian under this section.’’.

(4) DETERMINATION OF CERTAIN DISPUTES.—(A) Section

1010 is amended to read as follows:
H. R. 1417—29

‘‘§ 1010. Determination of certain disputes

‘‘(a) SCOPE OF DETERMINATION.—Before the date of first distribution in the United States of a digital audio recording device

or a digital audio interface device, any party manufacturing,

importing, or distributing such device, and any interested copyright

party may mutually agree to petition the Copyright Royalty Judges

to determine whether such device is subject to section 1002, or

the basis on which royalty payments for such device are to be

made under section 1003. ‘‘(b) INITIATION OF PROCEEDINGS.—The parties under subsection

(a) shall file the petition with the Copyright Royalty Judges

requesting the commencement of a proceeding. Within 2 weeks

after receiving such a petition, the Chief Copyright Royalty Judge

shall cause notice to be published in the Federal Register of the

initiation of the proceeding. ‘‘(c) STAY OF JUDICIAL PROCEEDINGS.—Any civil action brought

under section 1009 against a party to a proceeding under this

section shall, on application of one of the parties to the proceeding,

be stayed until completion of the proceeding. ‘‘(d) PROCEEDING.—The Copyright Royalty Judges shall conduct

a proceeding with respect to the matter concerned, in accordance

with such procedures as the Copyright Royalty Judges may adopt.

The Copyright Royalty Judges shall act on the basis of a fully

documented written record. Any party to the proceeding may submit

relevant information and proposals to the Copyright Royalty Judges.

The parties to the proceeding shall each bear their respective costs

of participation.

‘‘(e) JUDICIAL REVIEW.—Any determination of the Copyright

Royalty Judges under subsection (d) may be appealed, by a party

to the proceeding, in accordance with section 803(d) of this title.

The pendency of an appeal under this subsection shall not stay

the determination of the Copyright Royalty Judges. If the court

modifies the determination of the Copyright Royalty Judges, the

court shall have jurisdiction to enter its own decision in accordance

with its final judgment. The court may further vacate the determination of the Copyright Royalty Judges and remand the case

for proceedings as provided in this section.’’.

(B) The item relating to section 1010 in the table of sections

for chapter 10 is amended to read as follows:

‘‘1010. Determination of certain disputes.’’.

SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.

(a) EFFECTIVE DATE.—This Act and the amendments made

by this Act shall take effect 6 months after the date of enactment

of this Act, except that the Librarian of Congress shall appoint

1 or more interim Copyright Royalty Judges under section 802(d)

of title 17, United States Code, as amended by this Act, within

90 days after such date of enactment to carry out the functions

of the Copyright Royalty Judges under title 17, United States

Code, to the extent that Copyright Royalty Judges provided for

in section 801(a) of title 17, United States Code, as amended by

this Act, have not been appointed before the end of that 90-day

period.

(b) TRANSITION PROVISIONS.—

(1) IN GENERAL.—Subject to paragraphs (2) and (3), the

amendments made by this Act shall not affect any proceedings

commenced, petitions filed, or voluntary agreements entered
H. R. 1417—30

into before the effective date provided in subsection (a) under

the provisions of title 17, United States Code, as amended

by this Act, and pending on such effective date. Such proceedings shall continue, determinations made in such proceedings, and appeals taken therefrom, as if this Act had not

been enacted, and shall continue in effect until modified under

title 17, United States Code, as amended by this Act. Such

petitions filed and voluntary agreements entered into shall

remain in effect as if this Act had not been enacted. For

purposes of this paragraph, the Librarian of Congress may

determine whether a proceeding has commenced. The Librarian

of Congress may terminate any proceeding commenced before

the date of enactment of this Act pursuant to chapter 8 of

title 17, United States Code, and any proceeding so terminated

shall become null and void. In such cases, the Copyright Royalty

Judges may initiate a new proceeding in accordance with regulations adopted pursuant to section 803(b)(6) of title 17, United

States Code.

(2) CERTAIN ROYALTY RATE PROCEEDINGS.—Notwithstanding paragraph (1), the amendments made by this Act

shall not affect proceedings to determine royalty rates pursuant

to section 119(c) of title 17, United States Code, that are commenced before January 31, 2006.

(3) PENDING PROCEEDINGS.—Notwithstanding paragraph

(1), any proceedings to establish or adjust rates and terms

for the statutory licenses under section 114(f)(2) or 112(e) of

title 17, United States Code, for a statutory period commencing

on or after January 1, 2005, shall be terminated upon the

date of enactment of this Act and shall be null and void.

The rates and terms in effect under section 114(f)(2) or 112(e)

of title 17, United States Code, on December 31, 2004, for

new subscription services, eligible nonsubscription services, and

services exempt under section 114(d)(1)(C)(iv) of such title,

and the rates and terms published in the Federal Register

under the authority of the Small Webcaster Settlement Act

of 2002 (17 U.S.C. 114 note; Public Law 107–321) (including

the amendments made by that Act) for the years 2003 through

2004, as well as any notice and recordkeeping provisions

adopted pursuant thereto, shall remain in effect until the later

of the first applicable effective date for successor terms and

rates specified in section 804(b) (2) or (3)(A) of title 17, United

States Code, or such later date as the parties may agree or

the Copyright Royalty Judges may establish. For the period

commencing January 1, 2005, an eligible small webcaster or

a noncommercial webcaster, as defined in the regulations published by the Register of Copyrights pursuant to the Small

Webcaster Settlement Act of 2002 (17 U.S.C. 114 note; Public

Law 107–321) (including the amendments made by that Act),

may elect to be subject to the rates and terms published in

those regulations by complying with the procedures governing

the election process set forth in those regulations not later

than the first date on which the webcaster would be obligated

to make a royalty payment for such period. Until successor

terms and rates have been established for the period commencing January 1, 2006, licensees shall continue to make

royalty payments at the rates and on the terms previously
H. R. 1417—31

in effect, subject to retroactive adjustment when successor rates

and terms for such services are established.

(4) INTERIM PROCEEDINGS.—Notwithstanding subsection

(a), as soon as practicable after the date of enactment of this

Act, the Copyright Royalty Judges or interim Copyright Royalty

Judges shall publish the notice described in section 803(b)(1)(A)

of title 17, United States Code, as amended by this Act, to

initiate a proceeding to establish or adjust rates and terms

for the statutory licenses under section 114(f)(2) or 112(e) of

title 17, United States Code, for new subscription services and

eligible nonsubscription services for the period commencing

January 1, 2006. The Copyright Royalty Judges or Interim

Copyright Royalty Judges are authorized to cause that proceeding to take place as provided in subsection (b) of section

803 of that title within the time periods set forth in that

subsection. Notwithstanding section 803(c)(1) of that title, the

Copyright Royalty Judges shall not be required to issue their

determination in that proceeding before the expiration of the

statutory rates and terms in effect on December 31, 2004.

(c) EXISTING APPROPRIATIONS.—Any funds made available in

an appropriations Act to carry out chapter 8 of title 17, United

States Code, shall be available to the extent necessary to carry

out this section.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.