56868 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 

1There is no legislative history accompanying 

STELA. However, an earlier iteration of the 

legislation in 2009 contained the same statutory 

language with respect to phantom signals and did 

have accompanying legislative history.See Satellite 

Home Viewer Update and Reauthorization Act of 

2009, H. Rep. No. 111-319, 111th Cong., 1st Sess. 

(Oct. 28, 2009) at 12 (‘‘[T]he cable television and 

content industries have taken different views on 

whether cable providers should include certain 

signals that are not received by every customer in 

the calculation of Section 111 royalty obligations. 

Members of the cable industry argue that providers 

should not have to pay for such signals because 

some consumers do not receive them. Members of 

the content industry assert that, under the law, all 

signals should be taken into account in the royalty 

rate calculation. The Committee understands that 

there are two different readings of the statute and 

that the issue should be resolved to provide 

certainty to both industries.’’) 

2See id. at 23-24. (‘‘Subsection (c) resolves the 

phantom signal ambiguity that required cable 

systems to pay royalty fees for carriage to all 

subscribers within the system. It allows a cable 

system that provides transmissions of distant 

signals to some but not all communities to calculate 

royalty fees on the basis of the actual carriage of 

specific signals and the gross receipts derived from 

the subscribers in the community.’’) 

3 See id. at 12. (‘‘The legislation revises and 

updates subparagraphs (C) and (D) of Section 

111(d)(1) to resolve the so–called ‘‘phantom 

signal’’issue. Just as the current law allows 

PART 100—SAFETY OF LIFE ON 

NAVIGABLE WATERS 

■ 1. The authority citation for part 100 

continues to read as follows: 

Authority: 33 U.S.C. 1233. 

■ 2. Add § 100.T08–0534 to read as 

follows: 

§ 100.T08–0534 Pittsburgh Dragon Boat 

Festival, Monongahela River, Pittsburgh, 

PA. 

(a) Location. The following area is a 

regulated area: All waters of the 

Monongahela River, from mile marker 

2.2 (Southside Riverfront Park Boat 

Ramp) on the Monongahela River to 

mile marker 2.7 (27th Street), extending 

100 feet out from the left descending 

bank. 

(b) Effective date. This section is 

effective from 11:30 a.m. through 4:30 

p.m. on September 18, 2010, and each 

year thereafter on a date and time 

published in a Federal Register 

document. 

(c) Periods of enforcement. This 

section is effective from 11:30 a.m. 

through 4:30 p.m. on September 18, 

2010. The Captain of the Port Pittsburgh 

or a designated representative will 

inform the public through broadcast 

notices to mariners of the enforcement 

period for the special local regulation as 

well as any changes in the planned 

schedule. 

(d) Regulations. 

(1) In accordance with the general 

regulations in § 100.35 of this part, entry 

into this area is prohibited unless 

authorized by the Captain of the Port 

Pittsburgh. 

(2) Persons or vessels requiring entry 

into, departure from, or passage through 

a regulated area must request 

permission from the Captain of the Port 

Pittsburgh or a designated 

representative. They may be contacted 

on VHF–FM Channel 13 or 16, or 

through Coast Guard Sector Ohio Valley 

at 1–800–253–7465. 

(3) All persons and vessels shall 

comply with the instructions of the 

Captain of the Port Pittsburgh and 

designated on-scene U.S. Coast Guard 

patrol personnel. On-scene U.S. Coast 

Guard patrol personnel includes 

Commissioned, Warrant, and Petty 

Officers of the U.S. Coast Guard. 

Dated: August 13, 2010. 

S.T. Higman, 

Lieutenant Commander, U.S. Coast Guard, 

Acting Captain of the Port Pittsburgh. 

[FR Doc. 2010–23279 Filed 9–16–10; 8:45 am] 

BILLING CODE 9110–04–P 

LIBRARY OF CONGRESS 

Copyright Office 

37 CFR Part 201 

[Docket No. RM 2010–2] 

Implementation of the Satellite 

Television Extension and Localism Act 

of 2010 

ACTION: Interim Rule. 

SUMMARY: The Copyright Office amends 

its rules governing statements of 

account for cable systems and satellite 

carriers to reflect changes resulting from 

the recent enactment of the Satellite 

Television Extension and Localism Act 

of 2010. 

FOR FURTHER INFORMATION CONTACT: Ben 

E. Golant, Assistant General Counsel or 

Tanya M. Sandros, Deputy General 

Counsel, Copyright GC/I&R, P.O. Box 

70400, Washington, DC 20024. 

Telephone: (202) 707–8380. Telefax: 

(202)–707–8366. 

EFFECTIVE DATES: September 17, 2010. 

SUPPLEMENTARY INFORMATION: Congress 

recently passed the Satellite Television 

Extension and Localism Act of 2010 

(‘‘STELA’’) which was signed by the 

President on May 27, 2010. See Pub. L. 

No. 111–175. This legislation updated 

and reauthorized the distant signal 

license for satellite carriers under 

Section 119 of title 17. It also amended 

the local–into–local satellite license and 

the cable statutory license in several 

respects. The purpose of this Interim 

Rule is to account for the new statutory 

provisions under Sections 111, 119, and 

122, as discussed below. 

I. SECTION 111 AMENDMENTS 

A. Phantom Signals and Subscriber 

Groups 

For the past 30 years, cable operators 

have paid royalties for the 

retransmission of non–network 

programming carried by distant 

broadcast television signals under the 

Section 111 statutory license. The 

royalties have been based on a 

percentage of gross receipts generated 

by a cable system. Under the licensing 

framework established by Congress in 

1976, cable operators had to pay for the 

number of distant signals carried, even 

though some such signals were not 

received or made available to every 

subscriber of a particular cable system. 

Distant broadcast signals that were not 

made available on a system–wide basis, 

but on which operators were required to 

pay royalties, have been called 

‘‘phantom signals.’’ The Copyright Office 

has long recognized the phantom signal 

situation, but the matter has only 

recently received legislative attention.1

Section 104 of STELA, entitled 

‘‘Modifications to Cable System 

Secondary Transmission Rights Under 

Section 111,’’ directly addresses 

phantom signals. Specifically, it 

amended Section 111(d)(1) of the 

Copyright Act which sets forth the 

methodology for cable operators to 

calculate royalties. Cable operators now 

pay royalties only where the distant 

broadcast signal is actually received by 

subscribers rather than on a broader 

cable system basis as had been the case 

since 1978. The amendments finally 

resolve this enduring dispute.2

Specifically, the legislation amends 

subparagraph (C) of Section 111(d)(1) to 

state that if a cable system provides 

secondary transmissions of primary 

transmitters to some, but not all, 

communities served by the cable 

system, the gross receipts and distant 

signal equivalent values for each 

secondary transmission may be derived 

on the basis of the subscribers in those 

communities where the cable system 

actually provides such secondary 

transmission. Where a cable system 

calculates its royalties on a community– 

specific (‘‘subscriber group’’) basis, the 

operator applies the methodology in 

Section 111(d)(1)(B)(ii)–(iv) to calculate 

a separate royalty for each subscriber 

group. However, the operator will still 

compute the minimum fee calculation 

under Section 111(d)(1)(B)(i) on a cable 

system basis and is required to pay no 

less than the minimum fee. 3


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subscriber group calculations for ‘‘partially local/ 

partially distant’’ situations, so too may cable 

systems use the subscriber group methodology 

when calculating royalties for phantom signal 

situations. . . . This change shall not affect a cable 

system’s obligation to pay the minimum fee as 

appropriate.’’) 

4See id. at 12 (noting the same). 

5 See id. at 13. (‘‘Finally, as a result of discussions 

among the parties affected by the phantom signal 

issue that helped lead to broad industry support for 

these amendments, certain cable operators agreed to 

the payment of additional royalty amounts directly 

to the Copyright Office for a 5-year period. . . . For 

example, if the first such additional royalty 

payments are submitted on the filing deadline for 

the first accounting period of 2010 (i.e., August 29, 

2010), the Office shall treat such amounts as part 

of the base rate royalty pool for the first accounting 

period of 2010 for deposit and distribution to 

claimants using the existing procedures.’’) 

6On January 5, 2010, the Copyright Royalty 

Judges issued a Federal Register Notice 

commencing the 2010 Cable Rate Proceeding to 

adjust the gross receipt limitations and royalty rates 

applicable under Section 111. See 75 FR 455 (Jan. 

5, 2010). Soon after STELA was enacted, cable 

operators and copyright owners filed a Joint Motion 

to Terminate the proceeding. The Judges have not 

yet issued an Order terminating the proceeding. 

7Two years ago, the Office issued a Notice of 

Proposed Rulemaking to address the legal concerns 

raised by the retransmission of digital television 

signals by cable operators under the Section 111 

license. See 73 F.R. 31399 (June 2, 2008). 

Multicasting was one of the prominent matters 

raised for comment. Now that STELA has been 

enacted, we will be re–examining the issues that 

remain in that rulemaking. 

The legislation also amends 

subparagraph (D) of Section 111(d)(1) to 

state that for any accounting period 

prior to the enactment of the 

amendments in subparagraph (C), a 

cable system’s computation of its 

royalty fee consistent with the 

methodology described in subparagraph 

(C)(iii), or a cable system’s use of such 

methodology on an amendment of a 

statement originally filed before the date 

of enactment, will not be deemed 

actionable as an act of infringement 

within the meaning of Section 

111(c)(2)(B). In other words, operators 

who have heretofore based royalty 

payments on subscriber group 

calculations will not face liability for 

having done so. Moreover, the 

amendments also make clear that cable 

operators who paid for phantom signals 

in the past are not entitled to now seek 

refunds or offsets for those payments.4

As part of the legislative compromise 

on the phantom signal matter, certain 

cable operators agreed to the payment of 

additional royalty amounts directly to 

the Copyright Office for a five year 

period. These additional royalty 

payments are addressed in new 

paragraph (7) of subsection (d), which 

directs the Copyright Office to treat 

them as part of the Section 111 royalty 

pool attributable to the period for which 

they are submitted.5

The changes to Section 111(d) 

necessitate an amendment to Section 

201.17 as well as a revision to the Form 

3 Statement of Account. The interim 

rule adds a new subsection ‘‘g’’ to the 

rules to implement the statutory 

language regarding subscriber groups 

and reflect the new royalty rates (noted 

below). The Office has also revised SOA 

Form 3 to better accommodate 

subscriber group reporting and to 

recognize the additional royalties that 

will be submitted by certain cable 

operators. 

B. Rate Adjustments 

Section 104 of STELA also revises and 

updates Section 111(d)(1) to adjust the 

royalty percentages payable by cable 

systems that must compute their royalty 

payments in accordance with 

subparagraph (B) of that provision. The 

adjusted royalty percentages were made 

effective as of January 1, 2010, in lieu 

of any adjustments in royalty 

percentages or gross receipts thresholds 

that might have been made this year in 

a cable royalty rate inflation adjustment 

proceeding pursuant to Sections 

801(b)(2) and 804(b)(1).6 The new law 

adjusts the existing ‘‘base’’ royalty rates 

for Form 3 systems upwards by 

approximately 5 percent starting with 

the first accounting period of 2010. 

Under STELA, the fee for the first 

distant signal equivalent increases from 

1.013 percent to 1.064 percent; the fee 

for the second through fourth distant 

signal equivalent increases from 0.668 

percent to 0.701 percent; and the fee for 

the fifth distant signal equivalent, and 

each additional distant signal equivalent 

increases from 0.314 percent to 0.330 

percent. STELA does not change the 

rates for smaller cable systems that use 

the SOA Form 1–2 nor does it disturb 

the gross receipts thresholds for 

determining whether an operator should 

file SOA Form 3 or SOA Form 1–2. 

STELA also clarifies that the base rate 

fees, the 3.75 fee, and the syndicated 

exclusivity surcharge will not be subject 

to an adjustment again before 2015. The 

Office has updated Section 201.17 to 

reflect the rate adjustment provisions of 

STELA, but it does not believe any 

further regulatory amendments are 

required. 

C. DTV Signals 

1. Multicasting 

Section 104 of STELA modifies 

particular provisions in Section 111 to 

accommodate the 2009 digital broadcast 

television transition. Digital television 

signals are different from analog signals 

in that a digital television broadcaster 

has the ability to air several sub– 

channels, or multicasts, from its single 

broadcast transmitter. Cable operators 

have retransmitted distant multicasts for 

a number of years under the Section 111 

license. STELA clarifies that a royalty 

payment should be made for the 

retransmission of non–network 

television programming carried on each 

unique digital multicast stream of a 

distant digital television signal. 

Specifically, the definition of distant 

signal equivalent (‘‘DSE’’) in Section 111 

was changed to account for the 

retransmission of multicast streams. A 

DSE, as modified by STELA, is : 

(i) the value assigned to the secondary 

transmission of any non–network 

television programming carried by a 

cable system in whole or in part beyond 

the local service area of the primary 

transmitter of such programming; and 

(ii) computed by assigning a value of 

one to each primary stream and to each 

multicast stream (other than a 

simulcast) that is an independent 

station, and by assigning a value of one– 

quarter to each primary stream and to 

each multicast stream (other than a 

simulcast) that is a network station or a 

noncommercial educational station. 

At the same time, however, STELA 

carves out special exceptions regarding 

the royalty treatment of multicast 

streams under Section 111. Specifically, 

‘‘the royalty rates specified in Sections 

256.2(c) and 256.2(d) of title 37, Code of 

Federal Regulations (commonly referred 

to as the ‘‘3.75 percent rate’’ and the 

‘‘syndicated exclusivity surcharge’’ 

respectively), as in effect on the date of 

enactment of the Satellite Television 

Extension and Localism Act, as such 

rates may be adjusted, or such sections 

redesignated, thereafter by the 

Copyright Royalty Judges, shall not 

apply to the secondary transmission of 

a multicast stream.’’ This provision, in 

effect, would permit a cable operator to 

carry multiple multicast streams 

without concern about exceeding its 

market quota of distant signals and 

being required to pay the 3.75% fee. In 

addition, no royalties are due for 

carrying a distant multicast stream that 

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

stream or another multicast stream of 

the same station that the system is 

carrying. The amendments to Section 

201.17 incorporate the relevant statutory 

language on multicast streams into new 

subpart (j) of the Copyright Office’s 

rules.7

2. Effective Dates 

Section 104 of STELA specifically 

delineates the effective dates with 

respect to the treatment of multicast 


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56870 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 

8The date of enactment is usually the date the 

President signs the bill whereas the effective date 

may be either earlier or later. However, STELA 

includes a provision that clarifies that in most 

instances references to ‘‘date of enactment’’ shall be 

deemed to refer to February 27, 2010, unless 

otherwise specified. See Section 307of STELA 

9June 30, 2010, is the last day of the first 

accounting period for 2010 (i.e., 2010/1). 

10A cable operator that did not want to pay 

royalties for a multicast for the second accounting 

period of 2010 had to drop the signal prior to July 

1, 2010 (the first day of the second accounting 

period), the date when a royalty obligation would 

commence. 

11A simulcast is defined as ‘‘[A] multicast stream 

of a television broadcast station that duplicates the 

programming transmitted by the primary stream or 

another multicast stream of such station.’’ 

streams under the cable statutory 

license. First, STELA states that the 

Section 111 amendments, with regard to 

the distant signal equivalent value of the 

secondary transmission of the multicast 

stream of a primary transmitter, takes 

effect on the date of the enactment of 

the Act [i.e., February 27, 2010].8 That 

is, any distant multicasts first 

retransmitted by a cable operator on or 

after February 27, 2010, is subject to 

royalties. Second, STELA delays the 

implementation of the requirement to 

pay for carriage of a multicast stream ‘‘in 

any case in which a cable system was 

making secondary transmissions of a 

multicast stream beyond the local 

service area of its primary transmitter 

before the date of enactment of this Act 

[i.e., February 27, 2010] and states that 

‘‘a distant signal equivalent value shall 

not be assigned to secondary 

transmissions of such multicast stream 

that are made on or before June 30, 

2010.’’9 [emphasis added]. Clearly, cable 

operators will not have to pay royalties 

for any multicasts carried prior to 

STELA’s effective date. Further, 

Congress has built a grace period into 

the statute so that those cable operators 

that have carried distant multicasts 

prior to the effective date through to 

June 30, 2010, do not have to pay 

royalties for the first accounting period 

of this year.10 Finally, STELA states that 

‘‘in any case in which the secondary 

transmission of a multicast stream of a 

primary transmitter is the subject of a 

written agreement entered into on or 

before June 30, 2009, between a cable 

system or an association representing 

the cable system and a primary 

transmitter or an association 

representing the primary transmitter, a 

distant signal equivalent value shall not 

be assigned to secondary transmissions 

of such multicast stream beyond the 

local service area of its primary 

transmitter that are made on or before 

the date on which such written 

agreement expires.’’ This could be 

characterized as the ‘‘Grandfathered 

Agreement Exception.’’ Here, no 

royalties are due for the retransmission 

of a distant multicast that is subject to 

an ongoing agreement. However, once 

the agreement expires, then royalties 

would have to be paid for such distant 

multicasts if they continue to be carried. 

It is important to mention that a cable 

system that has reported secondary 

transmissions of a multicast stream 

beyond the local service area of its 

primary transmitter on a statement of 

account deposited under Section 111 

before the date of the enactment of 

STELA is not entitled to any refund, or 

offset, of royalty fees paid on account of 

such secondary transmissions of such 

multicast stream. 

3. Statement of Account Forms 

Section 201.17(e), the rule dictating 

the fields and parameters of the cable 

statement of account forms, has to be 

revised to account for the changes in 

Section 111 due to STELA. We have 

identified at least two separate 

subsections that need to be amended to 

conform with the new multicast 

provisions of the new law. The first is 

the designation of ‘‘channels’’ under 

Section 201.17(e)(5). Here, we amend 

the regulation to recognize that a 

multicast stream would be considered a 

‘‘channel’’ for Statement of Account 

purposes. Similarly, we amend Section 

201.17(e)(9) to account for multicast 

streams in the ‘‘Primary Transmitters’’ 

designation in the rules. Specifically, 

we find it necessary to explain how to 

label and account for the retransmission 

of multicast signals on the SOA. The 

revised SOAs the Office has released for 

the 2010/1 period reflect this change 

and request that each multicast stream 

be identified by its over–the–air call 

sign followed by the sub–channel 

number assigned to it by the television 

broadcast licensee. It is important to 

note that a simulcast stream11 is a 

multicast stream, and even though no 

royalties must be paid for its 

retransmission, the carriage of such still 

must be reported on the Statement of 

Account form. A simulcast stream 

should be properly labeled on the form 

(e.g., WETA–simulcast) so that 

Licensing Division examiners are able to 

differentiate this type of stream from 

other multicast streams that may require 

a royalty payment. 

4. Definitions 

STELA amended Section 111(f) of the 

Copyright Act in many respects to 

include new definitions that relate to 

digital broadcast television and for other 

purposes. The new or modified 

definitions in Section 111, like the 

revised definition of ‘‘DSE’’ discussed 

above, focus on the technical aspects of 

digital signals and the ability of 

television stations to multicast or split 

its one digital signal into many sub– 

channels. Under STELA, the terms 

‘‘primary stream,’’ ‘‘multicast stream,’’ 

and ‘‘simulcast’’were added to Section 

111 because of the digital television 

transition. The terms ‘‘independent 

station,’’ ‘‘noncommercial educational 

station,’’ and ‘‘network station’’ which 

have been part of Section 111 for over 

33 years, were modified for the same 

reason. The same can be said with 

regard to the revised definitions of the 

terms ‘‘primary transmission’’ and ‘‘local 

service area of a primary transmitter,’’ 

which is discussed in greater detail, 

below. 

The definitions of ‘‘secondary 

transmission,’’ and ‘‘cable system’’ were 

modified slightly and new terms 

‘‘Subscribe,’’ ‘‘Subscriber’’ and ‘‘Primary 

Transmitter’’ were added to Section 

111(f). These new or revised definitions 

are simple clarifications with no direct 

association with the digital transition. 

Consequently, the Office amends 

Section 201.17(b)(5) to account for these 

new definitions and has revised the 

SOA forms to reflect the statutory 

language. Network Stations. There is a 

newly expanded definition of ‘‘network 

station’’in STELA. It reflects the 

inclusion of digital television signals in 

the Section 111 rubric. For a digital 

television station’s primary stream, the 

term ‘‘network station’’ means a 

‘‘television broadcast station that is 

owned or operated by, or affiliated with, 

one or more of the television networks 

in the United States providing 

nationwide transmissions, and that 

transmits a substantial part of the 

programming supplied by such 

networks for a substantial part of the 

primary stream’s typical broadcast day.’’ 

This is the same definition that has been 

in Section 111(f) since 1976. However, 

the term ‘‘network station’’ is different 

for multicast streams, where Congress 

has adopted the Section 119 definition 

of the term. So, the second half of the 

new network station definition now 

reads as follows: 

The term ‘‘network station’’ shall be 

applied to a multicast stream on which 

a television broadcast station transmits 

all or substantially all of the 

programming of an interconnected 

program service that is owned or 

operated by, or affiliated with, one or 

more of the television networks 

described in subparagraph (A); and 

offers programming on a regular basis 

for 15 or more hours per week to at least 

25 of the affiliated television licensees 


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Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 56871 

12STELA amended Section 119(f) to add the terms 

‘‘Subscribe,’’ ‘‘Multicast Stream,’’ and ‘‘Primary 

Stream.’’ It also amended the terms, ‘‘Local Market’’ 

and ‘‘Subscriber’’ and moved the definition of ‘‘Low 

Power Television Station’’ to Section 122. 

13See amended Section 119(d)(10)(A)(ii). 

14See amended Section 119(d)(14). 

15See amended Section 119(b)(1)(B). 

16See amended Section 119(d)(10)(A). 

17See amended Section 122(a)(4)(E). 

18See amended Section 122(a)(5). 

19See amended Sections 122(a)(2) and (3), 

respectively. 

20See amended Section 122(a)(3). 

21See amended Sections 122(a)(4) and (5), 

respectively. 

of the interconnected program service in 

10 or more States. 

We propose to incorporate this 

definition by reference into Section 

201.17 of the Office’s rules. 

Local Service Area of a Primary 

Transmitter. Before STELA, Section 

111(f) defined ‘‘local service area of a 

primary transmitter,’’ as ‘‘comprising the 

area in which such station is entitled to 

insist upon its signal being 

retransmitted by a cable system 

pursuant to the rules, regulations, and 

authorizations of the Federal 

Communications Commission (FCC) in 

effect on April 15, 1976, or such 

station’s television market as defined in 

Section 76.55(e) of title 47, Code of 

Federal Regulations (as in effect on 

September 18, 1993), or any 

modifications to such television market 

made, on or after September 18, 1993, 

pursuant to Section 76.55(e) or 76.59 of 

title 47 of the Code of Federal 

Regulations.’’ For cable statutory 

licensing purposes, a television 

broadcast station’s local–distant status 

may be determined by the television 

station’s 35–mile zone (a market 

definition concept arising under the 

FCC’s old rules), its Area of Dominant 

Influence (‘‘ADI’’) (under Arbitron’s 

defunct television market system), or 

Designated Market Area (‘‘DMA’’) (under 

Nielsen’s current television market 

system). Grade B contour coverage has 

also been used in determining the scope 

of a noncommercial television station’s 

local service area. However, Grade B 

contours apply only to analog signals, 

not digital signals whose service area is 

now defined by the FCC’s ‘‘noise– 

limited service contour.’’ STELA 

amended Section 111(f) to include a 

television station’s noise limited service 

contour as one of the local service area 

parameters in Section 111(f). This 

amendment directly addresses the local/ 

distant status of full power 

noncommercial educational television 

stations under Section 111 of the Act. 

II. AMENDMENTS TO THE SECTION 

119 AND 122 LICENSES 

A. Definitions 

Section 102 of STELA amended 

Section 119 in several respects to 

account for the digital television 

transition and for other purposes. 

However, the new law does not require 

the Office to implement significant rule 

changes. Instead, the task here is to 

implement minor modifications to 

Section 201.11, the regulatory 

provisions centered on the satellite SOA 

forms, to account for new and modified 

nomenclature. For example, Section 

201.11(b)(1) needs to be updated to 

include new definitions.12 Moreover, 

the rules need to be amended to account 

for the change in nomenclature from 

‘‘Superstations’’ to ‘‘Non–network 

stations.’’ It is also important to note that 

STELA moved certain provisions of 

Section 119, such as the provisions 

governing low power television stations 

and special market exceptions, to 

Section 122. Moreover, Section 103 of 

STELA added a new provision 

governing the retransmission of state 

public television networks. While the 

majority of the statutory changes to 

Sections 119 and 122 are self–executing, 

it is worth highlighting these and other 

changes that relate to the retransmission 

of distant television signals by satellite 

carriers. 

Unserved Household Definition. 

STELA updates the definition of 

‘‘unserved household’’ to include a 

standard for determining when a 

household is served by a digital signal 

for Section 119 purposes. Specifically, 

the definition now includes a provision 

pertaining to the digital noise–limited 

service contour in addition to the 

existing analog Grade B contour 

reference.13 A household falling within 

the noise–limited contour of the 

primary stream of a digital network 

station signal will now be considered 

‘‘served’’ under Section 119. 

STELA also amends the unserved 

household definition to take into 

account the ability of a television 

broadcast station to transmit multicast 

streams. Specifically, a subscriber who 

can receive an in–market, over–the–air 

signal of a multicast stream affiliated 

with a particular television broadcast 

network will be considered ‘‘served’’ 

starting in October 2010 or January 

2011, depending on when the multicast 

stream first came into existence.14 For 

example, a household will be 

considered served on October 1, 2010, if 

the multicast stream existed on March 

31, 2010. For all other in–market 

multicast streams, a household will not 

be considered served until January 1, 

2011. STELA specifically states that 

satellite carriers must pay royalties, on 

a per–subscriber basis, for both distant 

primary streams and distant multicast 

streams.15

Unrelated to the digital television 

transition, but nonetheless important to 

the unserved household definition, 

STELA clarifies that a particular 

household’s ‘‘unserved’’ status is 

determined by the reach of a network 

station signal in its local television 

market and is unaffected by the 

availability of an over–the–air signal 

from a network station licensed to a 

community located in an adjacent non– 

local market.16

B. State Public Television Networks 

STELA also added a new provision 

for the retransmission of certain distant 

noncommercial educational stations to 

the Section 122 license. Many state 

public television networks, which by 

statute or charter have a mandate to 

serve their states’ citizens, have been 

unable to reach substantial portions of 

their intended audience by satellite 

television. In response, STELA 

explicitly permits the retransmission of 

‘‘out–of–market’’ noncommercial 

educational television station signals 

that are part of a statewide system of 

three or more such signals to satellite 

subscribers located in a county in the 

state where subscribers would otherwise 

not be eligible to receive an in–state 

noncommercial educational station.17

Even though STELA adds this provision 

to Section 122 (the local–into–local 

royalty–free license), satellite carriers 

must still pay royalties to retransmit 

such signals.18 Satellite carriers are 

expected to list such signals in Spaces 

C and D of the satellite Statement of 

Account form. 

C. Section 119 Deletions and Section 

122 Additions 

STELA reorganized Sections 119 and 

122 to better reflect the royalty/royalty– 

free dichotomy of the licenses. For 

example, the provisions regarding the 

royalty–free retransmission of 

significantly viewed signals and low– 

power television stations have been 

moved from Section 119 to Section 122 

of the Copyright Act.19 With regard to 

low–power television stations, STELA 

changed the local service area of such 

stations so that a signal can be carried 

on throughout a designated market 

area.20 The special market exceptions, 

which were added to Section 119 in 

2004, were also moved to Section 122, 

although satellite carriers are still 

obligated to pay royalties for the stations 

subject to such exceptions under the 

statute.21 Satellite carriers should 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1
56872 Federal Register / Vol. 75, No. 180 / Friday, September 17, 2010 / Rules and Regulations 

continue to list the special exception 

stations in Spaces C and D of their 

Statement of Account forms. 

III. CONCLUSION 

We hereby issue interim regulations 

and will seek comment in the future 

from the public on the subjects 

discussed above related to the 

implementation of Sections 102 through 

104 of the Satellite Television Extension 

and Localism Act of 2010. 

List of Subjects in 37 CFR 201 

Cable, Copyright, Satellite 

Interim Regulation 

For the reasons set forth in the 

preamble, Part 201 of Title 37 of the 

Code of Federal Regulations is amended 

as follows: 

PART 201 – GENERAL PROVISIONS 

■ 1. The authority citation for part 201 

continues to read as follows: 

Authority: 17 U.S.C. 702 

■ 2. Amend § 201.11 as follows: 

a. By removing ‘‘superstation’’ each 

place it appears and adding in its place 

‘‘non–network station’’; 

b. In paragraph (a) by adding ‘‘and 

Section 122(a)’’ after ‘‘section 119(b)(1)’’; 

c. In paragraphs (a) and (b) by 

removing ‘‘Pub. L. 103–369’’ each place 

it appears and adding in its place ‘‘Pub. 

L. No. 111–175’’ and 

d. By revising paragraph (b)(1). 

The revision reads as follows: 

§ 201.11 Satellite carrier statements of 

account covering statutory licenses for 

secondary transmissions. 

* * * * * 

(b) Definitions. (1) The terms 

distributor, network station, private 

home viewing, satellite carrier, 

subscribe, subscriber, non–network 

station, unserved household, primary 

stream, and multicast stream, have the 

meanings set forth in Section 119(d) of 

title 17 of the United States Code, as 

amended by Pub. L. No. 111–175. 

* * * * * 

■ 3. Amend § 201.17 as follows: 

a. By revising paragraph (b)(5); 

b. In paragraph (e)(5)(i) by adding ‘‘, 

including multicast streams’’ after ‘‘The 

number of channels’’; 

c. By adding paragraph (e)(5)(iii); 

d. By redesignating paragraphs 

(e)(9)(vii) and (viii) as paragraphs 

(e)(9)(ix) and (x)and adding new 

paragraphs (e)(9)(vii) and (viii); 

e. In newly redesignated paragraph 

(e)(9)(ix) by removing ‘‘subclauses (v) 

and (vi)’’ and add in its place 

‘‘paragraphs (v) through (viii)’’; 

f. By redesignating paragraphs (g) 

through (l) as paragraphs (h) through 

(m) and adding a new paragraph (g); 

g. In newly redesignated paragraph 

(i), by adding paragraph (10); and 

h. By redesignating newly 

redesignated paragraphs (j) through (m) 

as paragraphs (k) through (n) and adding 

a new paragraph (j). 

i. In newly redesignated paragraph 

(m), by removing ‘‘(k)’’ each place it 

appears and adding ‘‘(m)’’ in its place; 

and 

j. In newly redesignated paragraph 

(m)(3)(v) by removing ‘‘(j)’’ and adding 

‘‘(m)’’ in its place. 

The revisions and additions read as 

follows: 

§ 201.17 Statements of Account 

covering compulsory licenses for 

secondary transmissions by cable 

systems. 

* * * * * 

(b) * * * 

(5) The terms primary transmission, 

secondary transmission, local service 

area of a primary transmitter, distant 

signal equivalent, network station, 

independent station, noncommercial 

educational station, primary stream, 

multicast stream, simulcast, primary 

transmitter, subscriber, and subscribe 

have the meanings set forth in Section 

111(f) of title 17 of the United States 

Code, as amended by Pub. L. No. 94– 

553, Pub. L. No. 103–369, and Pub. L. 

No. 111–175. 

* * * * * 

(e) * * * 

(5) * * * 

(iii) A multicast stream is considered 

a channel for purposes of this section 

(9) * * * 

(vii) A designation as to whether the 

channel carried is a multicast stream, 

and if so, the sub–channel number 

assigned to that stream by the television 

broadcast licensee. 

(viii)Simulcasts must be reported and 

labeled on the Statement of Accounts 

form in an easily identifiable manner 

(e.g., WETA–simulcast). 

* * * * * 

(g) Computation of copyright royalty 

fee: subscriber groups. (1) If a cable 

system provides a secondary 

transmission of a primary transmitter to 

some, but not all, communities served 

by that cable system— 

(i) The gross receipts and the distant 

signal equivalent values for such 

secondary transmission shall be derived 

solely on the basis of the subscribers in 

those communities where the cable 

system provides such secondary 

transmission; and 

(ii) The total royalty fee for the period 

paid by such system shall not be less 

than the minimum fee multiplied by the 

gross receipts from all subscribers to the 

system. 

(2) A cable system that, on a 

statement submitted before the date of 

the enactment of the Satellite Television 

Extension and Localism Act of 2010, 

computed its royalty fee consistent with 

the methodology under paragraph (i)(1) 

of this section or that amends a 

statement filed before such date of 

enactment to compute the royalty fee 

due using such methodology, shall not 

be subject to an action for infringement, 

or eligible for any royalty refund or 

offset, arising out of the use of such 

methodology on such statement. 

(3) Any royalty fee payments 

received by the Copyright Office from 

cable systems for the secondary 

transmission of primary transmissions 

that are in addition to the payments 

calculated and deposited in accordance 

with this subsection shall be deemed to 

have been deposited for the particular 

accounting period for which they are 

received and shall be distributed as 

specified under subsection 111(d) of 

title 17, United States Code. Such 

payments shall be considered as part of 

the base rate royalty fund. 

(4) The royalty fee rates established 

by the Satellite Television Extension 

and Localism Act shall take effect 

commencing with the first accounting 

period occurring in 2010. 

* * * * * 

(i) * * * 

(10) The 3.75% rate does not apply to 

distant multicast streams retransmitted 

by cable systems. 

(j) Multicasting. (1) A royalty 

payment shall be made for the 

retransmission of non–network 

television programming carried on each 

multicast stream of a distant digital 

television signal under the following 

circumstances: 

(i) If the distant multicast stream was 

first retransmitted by a cable system on 

or after February 27, 2010, or 

(ii) If the distant multicast stream is 

retransmitted by a cable operator on or 

after July 1, 2010. 

(2) In any case in which a distant 

multicast stream is the subject of a 

written agreement entered into on or 

before June 30, 2009, between a cable 

system or an association representing 

the cable system and a primary 

transmitter or an association 

representing the primary transmitter, a 

distant signal equivalent value shall not 

be assigned to a distant multicast stream 

that is made on or before the date on 

which such written agreement expires. 

(3) No royalties are due for carrying 

a distant multicast stream that 


wwoods2 on DSK1DXX6B1PROD with RULES_PART 1
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