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[Federal Register: March 24, 2010 (Volume 75, Number 56)]
[Rules and Regulations]               
[Page 14074-14076]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24mr10-4]                         

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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 383

[Docket No. 2009-2 CRB New Subscription II]

 
Digital Performance Right in Sound Recordings and Ephemeral 
Recordings for a New Subscription Service

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Royalty Judges are publishing final regulations 
setting the rates and terms for the use of sound recordings in 
transmissions made by new subscription services and for the making of 
ephemeral recordings necessary for the facilitation of such 
transmissions for the period commencing January 1, 2011, and ending on 
December 31, 2015.

DATES: These regulations become effective on January 1, 2011.

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: Section 114(f)(2)(C) of the Copyright Act, 
title 17 of the United States Code, allows a new type of eligible 
nonsubscription service or a new subscription service on which sound 
recordings are performed that is or is about to become operational to 
file a petition with the Copyright Royalty Judges (``Judges'') for the 
purpose of determining reasonable terms and rates. 17 U.S.C. 
114(f)(2)(C). Section 112(e) allows the making of ephemeral 
reproductions for the purpose of facilitating certain digital audio 
transmissions, including those made by new subscription services. 17 
U.S.C. 112(e). Upon receipt of a petition filed pursuant to section 
114(f)(2)(C), the Judges are required to commence a proceeding to 
determine said reasonable terms and rates. 17 U.S.C. 804(b)(3)(C)(ii). 
The Judges have conducted one proceeding pursuant to these provisions. 
See 70 FR 72471, 72472 (December 5, 2005) (after receipt of petition, 
commencing proceeding to determine rates and terms for a new type of 
subscription service that ``performs sound recordings on digital audio 
channels programmed by the licensee for transmission by a satellite 
television distribution service to its residential customers, where the 
audio channels are bundled with television

[[Page 14075]]

channels as part of a `basic' package of service and not for a separate 
fee''). The parties to that proceeding ultimately reached an agreement 
on the rates and terms for the new subscription service at issue; and 
the Judges, after public comment, adopted the settlement as final 
regulations.\1\ See 72 FR 72253 (December 20, 2007). The current rates 
expire on December 31, 2010.
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    \1\ The new subscription service is defined at 37 CFR 383.2(h).
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    Pursuant to section 803(b)(1)(A)(i)(III) of the Copyright Act, the 
Judges published in the Federal Register a notice commencing the rate 
determination proceeding for the license period 2011-2015 for the new 
subscription service defined in 37 CFR 383.2(h) and requesting 
interested parties to submit their petitions to participate. See 74 FR 
319 (January 5, 2009). Petitions to Participate in this proceeding were 
received from SoundExchange, Inc.; Royalty Logic, LLC (``RLI''); and 
Sirius XM Radio, Inc. (Sirius XM'').
    The Judges set the timetable for the three-month negotiation 
period, see 17 U.S.C. 803(b)(3), and directed the participants to 
submit their written direct statements no later than September 29, 
2009. On September 22, 2009, the Judges received a joint motion from 
all parties to stay the filing of the written direct statements in 
light of the parties reaching a settlement which they intended to 
submit to the Judges for adoption. On September 23, 2009, the Judges 
issued an order extending the deadline for the filing of written direct 
statements to October 29, 2009.\2\
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    \2\ SoundExchange and Sirius XM also moved that the Judges stay 
further proceedings until the settlement process under 17 U.S.C. 
801(b)(7)(A) has been completed. They noted that RLI, the only other 
participant to the proceeding but not a signatory to the settlement, 
joined the request for stay. The Judges granted the motion. See 
Order on Joint Motion to Stay, Docket No. 2009-2 CRB New 
Subscription II (October 28, 2009).
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    Section 801(b)(7)(A) allows for the adoption of rates and terms 
negotiated by ``some or all of the participants in a proceeding at any 
time during the proceeding'' provided they are submitted to the 
Copyright Royalty Judges for approval. This section provides that in 
such event:

    (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.

17 U.S.C. 801(b)(7)(A). Accordingly, on January 22, 2010, the Judges 
published a notice seeking comment on the proposed rates and terms 
submitted to the Judges. 75 FR 3666. Comments were due by February 22, 
2010. Having received no comments or objections to the proposed rates 
and terms, the Judges, by this notice, are adopting as final 
regulations the rates and terms for the use of sound recordings in 
transmissions made by new subscription services as defined in 37 CFR 
383.2(h) and the making of ephemeral recordings necessary for the 
facilitation of such transmissions for the license period of 2011-2015 
as published on January 22, 2010.

List of Subjects in 37 CFR 383

    Copyright, Digital audio transmissions, Performance right, Sound 
recordings.

Final Regulation

0
For the reasons set forth in the preamble, the Copyright Royalty Judges 
are amending 37 CFR part 383 as follows:

PART 383--RATES AND TERMS FOR SUBSCRIPTION TRANSMISSIONS AND THE 
REPRODUCTION OF EPHEMERAL RECORDINGS BY NEW SUBSCRIPTION SERVICES

0
1. The authority citation for part 383 continues to read as follows:

    Authority: 17 U.S.C. 112(e), 114, and 801(b)(1).


Sec.  383.1  [Amended]

0
2. Amend Sec.  383.1 as follows:
0
a. In paragraph (a), by removing ``2010'' and adding in its place 
``2015''; and
0
b. In paragraph (b), by removing ``112'' and adding in its place 
``112(e)''.


Sec.  383.2  [Amended]

0
3. Amend Sec.  383.2 as follows:
0
a. In paragraph (d), by removing ``2010'' and adding in its place 
``2015''; and
0
b. In paragraph (e), by removing ``112'' and adding in its place 
``112(e)''.

0
4. Amend Sec.  383.3 as follows:
0
a. In paragraph (a) introductory text, by removing ``112'' and adding 
in its place ``112(e)'' and by adding ``during the License Period,'' 
after ``such transmissions,'';
0
b. In paragraph (a)(1)(ii)(E), by removing ``and'';
0
c. By adding new paragraphs (a)(1)(ii)(F) through (J);
0
d. By adding new paragraphs (a)(2)(ii)(F) through (J);
0
e. In paragraph (b), by removing ``112'' and adding in its place 
``112(e)''; and
0
f. By adding a new paragraph (c).
    The additions to Sec.  383.3 read as follows:


Sec.  383.3  Royalty fees for public performances of sound recordings 
and the making of ephemeral recordings.

    (a) * * *
    (1) * * *
    (ii) * * *
    (F) 2011: $0.0155
    (G) 2012: $0.0159
    (H) 2013: $0.0164
    (I) 2014: $0.0169
    (J) 2015: $0.0174 and
    (2) * * *
    (ii) * * *
    (F) 2011: $0.0258
    (G) 2012: $0.0265
    (H) 2013: $0.0273
    (I) 2014: $0.0281
    (J) 2015: $0.0290
* * * * *
    (c) Ephemeral recordings. The royalty payable under 17 U.S.C. 
112(e) for the making of phonorecords used by the Licensee solely to 
facilitate transmissions during the License Period for which it pays 
royalties as and when provided in this part shall be included within, 
and constitute 5% of, such royalty payments.

0
5. Revise Sec.  383.4 to read as follows:


Sec.  383.4  Terms for making payment of royalty fees.

    (a) Terms in general. Subject to the provisions of this section, 
terms governing timing and due dates of royalty payments to the 
Collective, late fees, statements of account, audit and verification of 
royalty payments and distributions, cost of audit and verification, 
record retention requirements, treatment of Licensees' confidential 
information, distribution of royalties by the Collective, unclaimed 
funds, designation of the Collective, and any definitions for 
applicable terms not defined herein and not otherwise inapplicable 
shall be those adopted by the Copyright Royalty Judges for subscription 
transmissions and the reproduction of ephemeral recordings by 
preexisting satellite digital audio radio services in 37 CFR part 382, 
subpart B of this chapter, for the license period 2007-2012. For 
purposes of this

[[Page 14076]]

section, the term ``Collective'' refers to the collection and 
distribution organization that is designated by the Copyright Royalty 
Judges. For the License Period through 2015, the sole Collective is 
SoundExchange, Inc.
    (b) Reporting of performances. Without prejudice to any applicable 
notice and recordkeeping provisions, statements of account shall not 
require reports of performances.
    (c) Applicable regulations. To the extent not inconsistent with 
this part, all applicable regulations, including part 370 of this 
chapter, shall apply to activities subject to this part.

    Dated: March 19, 2010.
James Scott Sledge,
Chief U.S. Copyright Royalty Judge.
[FR Doc. 2010-6451 Filed 3-23-10; 8:45 am]
BILLING CODE 1410-72-P
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