Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 56873 

‘‘simulcasts’’ (i.e., duplicates) a primary 

stream or another multicast stream of 

the same station that the cable system is 

carrying. However, simulcast streams 

must be reported on the Statement of 

Accounts. 

(4) Multicast streams of digital 

broadcast programming shall not be 

subject to the 3.75% fee or the 

syndicated exclusivity surcharge. 

* * * * * 

Dated: August 10,2010 

Marybeth Peters, 

Register of Copyrights. 

Dated: August 10, 2010 

James H. Billington, 

The Librarian of Congress. 

[FR Doc. 2010–22814 Filed 9–16–10; 8:45 am] 

BILLING CODE 1410–30–S 

LIBRARY OF CONGRESS 

Copyright Royalty Board 

37 CFR Part 380 

[Docket No. 2005–1 CRB DTRA] 

Digital Performance Right in Sound 

Recordings and Ephemeral 

Recordings 

AGENCY: Copyright Royalty Board, 

Library of Congress. 

ACTION: Remand order. 

SUMMARY: The Copyright Royalty Judges 

are announcing their determination 

regarding the minimum fee to be paid 

by Noncommercial Webcasters under 

two statutory licenses, permitting 

certain digital performances of sound 

recordings and the making of ephemeral 

recordings, in response to an order of 

remand by the United States Court of 

Appeals for the District of Columbia 

Circuit. 

DATES: Effective September 17, 2010. 

ADDRESSES: The remand order also is 

published on the Copyright Royalty 

Board Web site at http://www.loc.gov/ 

crb/orders/2010/amendment-remandorder-6–30–10.pdf. 

FOR FURTHER INFORMATION CONTACT: 

Richard Strasser, Senior Attorney, or 

Gina Giuffreda, Attorney Advisor, by 

telephone at (202) 707–7658 or by 

e-mail at crb@loc.gov. 

SUPPLEMENTARY INFORMATION: On May 1, 

2007, the Copyright Royalty Judges 

(‘‘Judges’’) published in the Federal 

Register their determination of royalty 

rates and terms under the statutory 

licenses under Sections 112(e) and 114 

of the Copyright Act, title 17 of the 

United States Code, for the period 2006 

through 2010 for the digital public 

performance of sound recordings by 

means of eligible nonsubscription 

transmission or a transmission by a new 

subscription service. 72 FR 24084. In 

Intercollegiate Broadcast System, Inc. v. 

Copyright Royalty Board, 574 F.3d 748 

(DC Cir. 2009), the United States Court 

of Appeals for the District of Columbia 

Circuit (‘‘DC Circuit’’) affirmed the 

Judges’ determination in the main but 

remanded to the Judges the matter of 

setting the minimum fee to be paid by 

both Commercial Webcasters and 

Noncommercial Webcasters under 

Sections 112(e) and 114 of the Copyright 

Act. Id. at 762, 767. No rules or 

procedures applied to a proceeding that 

is remanded, and the Judges adopted an 

Interim Final Rule to govern. 37 CFR 

351.15. Pursuant to this Rule, 

Intercollegiate Broadcasting System, Inc. 

(‘‘IBS’’) and SoundExchange, Inc. 

(‘‘SoundExchange’’) presented proposals 

for the conduct and schedule of the 

remand proceeding, including 

settlement negotiations, written direct 

statements with proposed rates, 

discovery and an evidentiary hearing. 

By order dated October 23, 2009, the 

Judges established a period commencing 

November 2, 2009, and concluding on 

December 2, 2009, for the parties to 

negotiate and submit a settlement of the 

minimum fee issue that is the subject of 

the remand. Absent settlement, the 

parties were directed to file written 

direct statements by January 11, 2010. 

On December 2, 2009, 

SoundExchange, Inc. and the Digital 

Media Association (‘‘DiMA’’) submitted 

a settlement regarding the statutory 

minimum fee to be paid by Commercial 

Webcasters. Subsequently, the Judges 

published for comment the proposed 

change in the rule necessary to 

implement that settlement pursuant to 

the order of remand from the DC Circuit. 

74 FR 68214 (December 23, 2009). The 

Judges received one comment from IBS. 

The Final Rule for the minimum fee to 

be paid by Commercial Webcasters was 

published. 75 FR 6097 (February 8, 

2010). 

Following the filing of Written Direct 

Statements by IBS and SoundExchange, 

on January 20, 2010, the Judges 

established the discovery schedule on 

the remaining issue of the minimum fee 

for Noncommercial Webcasters. 

Following discovery, the hearing was 

held May 18, 2010. SoundExchange 

presented the testimony of W. Tucker 

McCrady, associate counsel, digital legal 

affairs, Warner Music Group (‘‘WMG’’), 

and Barrie Kessler, chief operating 

officer, SoundExchange. It also offered 

Webcaster Settlement Acts of 2008 and 

2009 agreements between 

SoundExchange and College 

Broadcasters, Inc. (‘‘CBI’’) for 

noncommercial educational webcasters, 

National Association of Broadcasters 

(‘‘NAB’’) for broadcasters, Sirius XM 

Radio, Inc. (‘‘Sirius XM’’) for satellite 

services and DiMA for commercial 

webcasters. 5/18/10 Tr. at 13 (McCrady). 

IBS presented the testimony of 

Frederick J. Kass, Jr., John E. Murphy 

and Benjamin Shaiken. 5/18/10 Tr. at 62 

and 67 (Kass). The testimony of Mr. 

Kass was that IBS supported a different 

rate proposal than the one filed. When 

this different rate proposal was not 

timely filed, the Judges ordered that it 

be filed by June 1, 2010. 5/18/10 Tr. at 

98 (Kass). The IBS’ Restated Rate 

Proposal was filed June 1, 2010. 

Mr. McCrady testified that WMG 

enters voluntary licenses for commercial 

webcasters. A negotiated license for the 

full catalogue must generate at least 

payments of $25,000. 5/18/10 Tr. at 25 

(McCrady). The lowest commercial 

minimum fee is 20% of revenue. A 

smaller revenue stream would not 

justify the time and resources WMG 

would need to devote to evaluating, 

negotiating, implementing and 

monitoring an agreement. 5/18/10 Tr. at 

20 (McCrady). Noncommercial 

Webcasters use the statutory license, 

because they do not generate enough 

revenue to WMG to support negotiating 

a license. SX Remand Trial Ex. 1 at 6 

(McCrady). 

The CBI agreement has the rates and 

terms for noncommercial educational 

webcasters, the same group that IBS 

represents in this proceeding. 5/18/10 

Tr. at 71 (Kass). It has a minimum fee 

of $500 per year per station or channel 

and a usage rate of $500 per channel for 

streaming a noncommercial educational 

service up to 159,400 aggregate tuning 

hours (‘‘ATH’’). 5/18/10 Tr. at 14 

(McCrady). The SoundExchange 

proposed minimum fee is $500 per 

station or channel. 5/18/10 Tr. at 14 

(McCrady). The proposed minimum fee 

is fully recoupable against royalty fees 

owed and this feature reduces 

transaction costs for both parties. 5/18/ 

10 Tr. at 21, 22 (McCrady). IBS says the 

average annual revenue of its member 

stations is $9,000. 5/18/10 Tr. at 20 

(McCrady) and 5/18/10 Tr. at 71 (Kass). 

So, the proposed fee is 6% of revenue, 

a large discount for Noncommercial 

Webcasters off the negotiated license 

agreements for commercial webcasters. 

5/18/10 Tr. at 20 (McCrady). All users 

of sound recordings should be licensed 

and pay something. It is an important 

educational message for students to 

learn the value of recorded music and 

to pay for it. 5/18/10 Tr. at 23 

(McCrady). From the first webcasting 

proceeding, the standard minimum fee 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1
56874 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 

for statutory licenses has been $500, on 

the theory that the minimum fee should 

be sufficient to cover at least the costs 

of administering the license. SX 

Remand Trial Ex. 1 at 7 (McCrady). 

Ms. Kessler testified about 

administering the royalties paid under 

the statutory license. Of the 

approximately 730 webcasting services 

paying royalties in 2009, 363 are 

noncommercial. The noncommercial 

royalties are less than 1% of the total 

webcasting royalties paid for 2009. 5/ 

18/10 Tr. at 34 (Kessler). Of the 

noncommercial services, 305 paid only 

the minimum fee of $500, and the 

remaining 58 paid more for exceeding 

the ATH cap or streaming multiple 

channels or stations. These payments 

are pursuant to the royalty minimum fee 

that is the subject of this remand 

proceeding, 5/18/10 Tr. at 42 (Kessler), 

and they demonstrate that 

noncommercial services are able and 

willing to pay the minimum fee. 5/18/ 

10 Tr. at 33 (Kessler). SoundExchange 

does not regularly track the 

administrative costs on a licensee, 

station or channel basis. Such costs vary 

widely based on the quality of the data 

provided by the service. For this 

proceeding, SoundExchange estimated 

its administrative costs. The average per 

channel or station cost for webcasters 

for 2008 is $803. 5/18/10 Tr. at 36 

(Kessler). The cost of administering the 

statutory license is greater than the 

revenue from noncommercial 

webcasters. 5/18/10 Tr. at 34 (Kessler). 

The CBI agreement for noncommercial 

educational webcasters, together with 

the NAB agreement, the Sirius XM 

agreement and the DiMA agreement all 

provide a similar minimum fee of $500, 

as SoundExchange proposes in this 

proceeding. All of these agreements 

were filed under the Webcaster 

Settlement Acts of 2008 and 2009, 

which permit agreements on the royalty 

rates under the statutory licenses. 5/18/ 

10 Tr. at 13 (McCrady). 

On June 1, 2010, IBS filed the restated 

rate proposal that Mr. Kass had 

supported in his testimony. The general 

principle of the proposal is that small 

noncommercial webcasters should pay 

only for the performances of music 

subject to the statutory license that they 

actually webcast. This principle is the 

same as the Judges used in the Final 

Determination to support the per 

performance metric for royalty rates, 

being more directly tied to the nature of 

the right being licensed. See 

Intercollegiate Broadcast System, Inc. v. 

Copyright Royalty Board, 574 F.3d 748, 

760–61 (DC Cir. 2009). But contrary to 

this principle, the proposal then 

provides for a flat royalty rate and an 

exemption from recordkeeping and 

reporting requirements. Both the flat 

rate and the exemptions are inconsistent 

with a per performance royalty, which 

is based on the number of performances 

times the rate for each performance. The 

proposal was for the royalty rates to be 

paid by Noncommercial Webcasters (set 

by 37 CFR 380.3(a)(2)(i)) and not for the 

minimum fee, which is the subject of 

this remand proceeding. The proposed 

rate is $20 to $50 per annum, based on 

the number of aggregate tuning hours. 

The proposal did not include a 

minimum fee. 5/18/10 Tr. at 76, 83–85 

(Kass). Mr. Kass said no minimum fee 

should be paid. He said this discount is 

justified, because the small 

noncommercial educational webcasters 

are teaching students. IBS Remand Trial 

Ex. 1 at 2. The CBI agreement is 

available for use by IBS members and 

some of those members have joined the 

CBI agreement. 5/18/10 Tr. at 104, 105 

(Kass). It proposes the $500 minimum 

fee per channel or station. 5/18/10 Tr. 

at 14 (McCrady). 

Noncommercial Minimum Fee 

The Final Determination discussed in 

Section IV.C.2 that most 

Noncommercial Webcasters qualified 

for a distinct segment of the marketplace 

that justified royalties lower than those 

paid by Commercial Webcasters. 

However, the Judges found that: 

the bare minimum that such services should 

have to pay is the administrative cost of 

administering the license. There is no 

evidence in the record to suggest that the 

submarket in which a Noncommercial 

Webcaster may reside would yield a different 

administrative cost for SoundExchange as 

compared to the administrative costs 

associated with Commercial Webcasters and 

SoundExchange, notably, makes no 

distinction between webcasters with respect 

to the $500 minimum fee. Webcaster I 

affirmed the notion that all webcasters–all 

Noncommercial Webcasters as well as all 

Commercial Webcasters–should pay the same 

minimum fee for the same license. 67 FR 

45259 (July 8, 2002). We also find no basis 

in the record for distinguishing between 

Commercial Webcasters and Noncommercial 

Webcasters with respect to the administrative 

cost of administering the license. Therefore, 

we determine that a minimum fee of an 

annual non-refundable, but recoupable $500 

minimum per channel or station payable in 

advance is reasonable over the term of this 

license. 

72 FR 24084, 24099 (May 1, 2007) 

(footnotes omitted). 

Ms. Kessler testified that the rough 

estimate of the average administrative 

cost for 2008 to SoundExchange per 

station or channel for webcasters is 

$803. All of the agreements filed 

pursuant to the Webcaster Settlement 

Acts of 2008 and 2009 have similar 

minimum fees as the proposed rate of 

$500 per station or channel. One 

includes the agreement for 

noncommercial educational webcasters 

(the CBI agreement), the same type of 

services as IBS, which seeks to pay no 

minimum fee. As found in the above 

quote from the Final Determination, a 

zero minimum fee is not supported by 

the evidence. IBS also asserts that 

administrative costs should be 

proportionately tied to the number of 

performances on a channel in a given 

year, but fails to establish any credible 

nexus. On the contrary, there are certain 

basic processes that must be utilized in 

administering the use of sound 

recordings by any Commercial or 

Noncommercial Webcaster of any size. 

Not surprisingly, at lesser levels of 

sound recording usage, the 

establishment and conduct of such 

administrative processes cannot simply 

be dispensed with. Indeed, smaller 

users may even result in larger 

proportionate administrative processing 

time than larger users. SoundExchange 

Remand Trial Ex. 1 at 3–4 (Kessler). See 

also Order, 72 FR 24084, 24096 n.37 

(May 1, 2007). 

The evidence presented in the remand 

proceeding supports a minimum fee of 

at least the same fee as adopted in the 

Final Determination. SoundExchange 

has now presented evidence on 

administrative costs that exceed this 

minimum. The agreements entered 

pursuant to the Webcaster Settlement 

Acts of 2008 and 2009 support that the 

industry accepts this minimum fee, 

which has substantially been in place 

since the first webcasting proceeding. 

IBS’ position seeks to pay no minimum 

fee and indeed seeks to pay no or an 

extremely small royalty for use of 

copyrighted content. The Judges adopt 

the same minimum fee for 

Noncommercial Webcasters as stated in 

the Final Determination of an annual 

non-refundable, but recoupable $500 

minimum per annum per channel or 

station payable in advance. 37 CFR 

380.3(b)(2). 

June 30, 2010. 

So ordered. 

James Scott Sledge, 

Chief United States Copyright Royalty 

Judge. 

William J. Roberts, Jr., 

United States Copyright Royalty Judge. 

Stanley C. Wisniewski, 

United States Copyright Royalty Judge. 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1
Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 56875 

Dated: July 21, 2010. 

James Scott Sledge, 

Chief, U.S. Copyright Royalty Judge. 

James H. Billington, 

Librarian of Congress. 

[FR Doc. 2010–23264 Filed 9–16–10; 8:45 am] 

BILLING CODE 1410–72–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR part 36 

RIN 2900–AM87 

Loan Guaranty: Assistance to Eligible 

Individuals in Acquiring Specially 

Adapted Housing 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule. 

SUMMARY: This document amends the 

Department of Veterans Affairs’ (VA’s) 

Loan Guaranty regulations concerning 

assistance to eligible individuals in 

acquiring specially adapted housing. 

These changes improve the readability 

of the regulations; provide further detail 

about longstanding program policies; 

and address legislation, policy changes, 

and a VA Office of the General Counsel 

legal opinion. 

DATES: Effective Date: October 18, 2010. 

FOR FURTHER INFORMATION CONTACT: 

William White, Acting Assistant 

Director for Loan Policy and Valuation, 

Loan Guaranty Service (262), Veterans 

Benefits Administration, Department of 

Veterans Affairs, 810 Vermont Avenue, 

NW., Washington, DC 20420, (202) 461– 

9543. (This is not a toll-free telephone 

number.) 

SUPPLEMENTARY INFORMATION: Veterans 

and servicemembers with severe 

disabilities may be eligible under 38 

U.S.C. chapter 21 for specially adapted 

housing (SAH) grants. In administering 

the SAH program, VA helps these 

eligible individuals to purchase, 

construct, or adapt a home that suits the 

individual’s living needs. In a document 

published in the Federal Register on 

October 5, 2009 (74 FR 51103), VA 

proposed to amend regulations in 38 

CFR part 36, subpart C, regarding 

assistance to certain disabled veterans 

in acquiring SAH, specifically 

§§ 36.4400 through 36.4410, which 

implement the SAH grant program. 

As explained in the proposed rule, 

VA is amending these regulations for 

three reasons. First, VA believes the 

regulations should be written in a 

reader-focused style. Second, detailed 

guidance about program policies and a 

regulation written with an easy-tofollow organizational structure will help 

applicants and eligible individuals (and 

those acting on their behalf) understand 

program requirements. Third, 

substantive changes are necessary to 

implement recent legislation, policy 

decisions, and a VA General Counsel 

legal opinion. Pursuant to 38 U.S.C. 

2101(d), the Secretary may prescribe 

regulations applicable to the SAH 

program. In revising these regulations, 

VA intends that applicants, eligible 

individuals, program participants, and 

other interested parties will be better 

informed about the legal requirements 

and Department policies that guide the 

administration of SAH grants. 

The comment period for the proposed 

rule ended on December 4, 2009, and 

VA received two comments. The 

commenters expressed concern 

regarding VA’s proposed use of the 

terminology ‘‘paraplegic housing grant 

or PH grant’’ for the grant authorized 

under 38 U.S.C. 2101(a). The 

commenters pointed out that the term is 

reflective of only one of the types of 

disabilities that make an individual 

eligible for this grant. Additionally, the 

commenters suggested that the use of 

the term ‘‘paraplegic’’ might result in an 

improper restriction on eligibility for 

SAH grants. The concern was that the 

term ‘‘paraplegia’’ or ‘‘paraplegic’’ might 

not be interpreted to include the 

functional loss of use of the lower limbs 

due to psychological disorders or other 

non-organic impairments. One 

commenter, citing General Counsel 

Precedent Opinion 60–90, asserted that 

such a restriction on eligibility for SAH 

grants is improper, and both 

commenters wanted to ensure that the 

definition for ‘‘paraplegic grant’’ would 

not exclude individuals who otherwise 

would have been eligible for assistance 

under 38 U.S.C. 2101(a). 

The General Counsel opinion held 

that the determination of ‘‘loss of use’’ is 

made ‘‘irrespective of whether such loss 

is functional or organic in origin.’’ VA 

did not propose to diverge from this 

holding. VA agrees with the 

commenters’ concerns and, therefore, 

has decided to use the applicable 

statutory citations when referring to the 

grants authorized under 38 U.S.C. 

2101(a) as well as 2101(b), rather than 

the terms ‘‘paraplegic housing grant’’ or 

‘‘adaptive housing grant’’ as proposed. 

No other substantive changes are 

made to the proposed rule. However, 

VA has made a few technical revisions. 

First, VA has revised the heading of 

subpart C to refer to ‘‘Eligible 

Individuals’’ rather than ‘‘Certain 

Disabled Veterans.’’ Second, VA is 

amending the language in 

§ 36.4404(a)(1), (2), and (3) to clarify 

that assistance is based on an 

individual’s rating for entitlement to 

compensation under 38 U.S.C. chapter 

11. These changes are intended to 

clarify that assistance under 38 U.S.C. 

chapter 21 is available to veterans and 

active duty servicemembers. Third, on 

September 24, 2009, VA published a 

final rule establishing 38 CFR 36.4412, 

which implemented provisions of the 

Housing and Economic Recovery Act of 

2008, Public Law 110–289. Those 

provisions authorize VA to provide 

automatic annual increases to certain 

SAH grant recipients. VA sought 

comments on proposed § 36.4412 in a 

document published in the Federal 

Register on May 12, 2009 (74 FR 22145). 

VA inadvertently omitted § 36.4412 in 

the proposed rule that preceded this 

final rule. See 74 FR 51103. VA is reinserting this provision, without further 

change, as § 36.4411. No substantive 

changes were made to the regulation. 

Finally, VA has revised 

§§ 36.4405(a)(iii), 36.4405(b), and 

36.4406(b) for grammatical reasons. 

Unfunded Mandates 

The Unfunded Mandates Reform Act 

of 1995 requires, at 2 U.S.C. 1532, that 

agencies prepare an assessment of 

anticipated costs and benefits before 

issuing any rule that may result in 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

(adjusted annually for inflation) in any 

given year. This final rule will have no 

such effect on State, local, and tribal 

governments, or on the private sector. 

Paperwork Reduction Act of 1995 

Although this document contains 

provisions constituting collections of 

information, under the provisions of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501–3521), no new or proposed 

revised collections of information are 

associated with this final rule. The 

information collection provisions for 

subpart C of 38 CFR part 36 are 

currently approved by the Office of 

Management and Budget (OMB) and 

have been assigned OMB control 

numbers 2900–0031, 2900–0047, 2900– 

0132, and 2900–0300. 

Executive Order 12866 

Executive Order 12866 directs 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

when regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety, and other advantages; 

distributive impacts; and equity). The 

Executive Order classifies a regulatory 

action as a ‘‘significant regulatory 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1