[Federal Register Volume 74, Number 196 (Tuesday, October 13, 2009)]
[Rules and Regulations]
[Pages 52418-52427]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24556]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 370

[Docket No. RM 2008-7]


Notice and Recordkeeping for Use of Sound Recordings Under 
Statutory License

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Royalty Judges are issuing final regulations for 
the delivery and format of reports of use of sound recordings for the 
statutory licenses set forth in sections 112 and 114 of the Copyright 
Act.

DATES: Effective Date: November 12, 2009.

FOR FURTHER INFORMATION CONTACT: Richard Strasser, Senior Attorney, or 
Gina Giuffreda, Attorney Advisor, by telephone at (202) 707-7658 or e-
mail at <a href="/cdn-cgi/l/email-protection#4a2938280a262529642d253c"><span class="__cf_email__" data-cfemail="fe9d8c9cbe92919dd0999188">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. Background

    On October 6, 2006, the Copyright Royalty Judges (``Judges'') 
issued interim regulations published in the Federal Register for the 
delivery and format of reports of use of sound recordings for the 
statutory licenses set forth in sections 112 and 114 of the Copyright 
Act. 71 FR 59010. The goal of those interim regulations was to 
establish format and delivery requirements for reports of use so that 
royalty payments to copyright owners pursuant to section 112 and 114 
licenses could be made from April 1, 2004,

[[Page 52419]]

forward based upon actual data on the sound recordings transmitted by 
digital audio services. During the interval since the Judges issued the 
interim regulations, the Judges have monitored the operation of these 
regulations as well as developments in recordkeeping requirements 
agreed upon by parties to various settlements relating to the use of 
section 112 and 114 licenses. Subsequently, on December 30, 2008, the 
Judges published a notice of proposed rulemaking (``NPRM'') setting 
forth proposed revisions to the interim regulations adopted in October 
2006. 73 FR 79727. The most significant revision proposed by the Judges 
was to expand the reporting period to implement year-round census 
reporting. Further, on April 8, 2009, the Judges published a notice of 
inquiry (``NOI'') to obtain additional information concerning the 
likely costs and benefits stemming from the adoption of the proposed 
census reporting provision as well as information on any alternatives 
to the proposal that might accomplish the same goals as the proposal in 
a less burdensome way, particularly with respect to small entities. 74 
FR 15901. With the issuance of today's regulations, the Judges 
establish requirements for census reporting for all but those 
broadcasters who pay no more than the minimum fee for their use of the 
license. The Judges are adopting these regulations substantially as 
proposed in the NPRM with minor modifications in response to comments 
received. These final regulations establish requirements by which 
copyright owners may receive reasonable notice of the use of their 
sound recordings and under which records of use shall be kept and made 
available by entities of all sizes performing sound recordings. See, 
e.g., 17 U.S.C. 114(f)(4)(A). As with the interim regulations adopted 
in 2006, today's final regulations represent baseline requirements. In 
other words, digital audio services are free to negotiate other formats 
and technical standards for data maintenance and delivery and may use 
those in lieu of regulations adopted by the Judges, upon agreement with 
the Collective. We have no intention of codifying these negotiated 
variances in the future unless and until they come into such 
standardized use as to effectively supersede the existing regulations.

II. This Proceeding

    The Judges' December 30, 2008, NPRM set forth proposed revisions to 
the regulations governing the format and delivery requirements for 
reports of use of sound recordings that provided for three potential 
categories of change. First, the Judges proposed eliminating obsolete 
provisions of the interim regulations. Second, the Judges proposed 
placing definitions that were duplicated in various sections of the 
interim regulations into a new single definition section applicable 
throughout Part 370 unless otherwise defined in a specific section. 
Third, the Judges proposed expanded reporting to implement year-round 
census reporting. In connection with this expanded census reporting, 
the Judges proposed eliminating the aggregate tuning hours (``ATH'') 
approach previously available for nonsubscription services and 
requiring that such services now report actual total performances 
(``ATP''). However, the Judges proposed allowing pre-existing satellite 
digital audio radio services, new subscription services and business 
establishment services to achieve census reporting by continuing their 
use of the ATH option if technological impediments existed which 
thwarted the measurement of actual listenership. 73 FR 79727. In 
addition to these specific proposals, the Judges also solicited 
comments on technological developments which might warrant additional 
revisions to rules governing the method of reporting specific data 
elements and/or the delivery mechanism employed for reporting.
    In response to the NPRM, the Judges received 43 comments from 
various categories of interested parties: (1) Representatives of 
copyright owners and performers, including SoundExchange, the 
Collective charged with collecting and distributing royalties; (2) 
copyright users and/or their representatives, including the National 
Association of Broadcasters (``NAB''), College Broadcasters Inc. 
(``CBI''), Intercollegiate Broadcasting System (``IBS''), various radio 
broadcasters affiliated with educational institutions, a noncommercial 
religious broadcaster, and an operator of radio and Internet stations 
featuring Christian programming; an Internet service that simulcasts 
the over-the-air and Internet-only broadcasts of primarily 
noncommercial terrestrial radio stations; and (3) several software 
providers of recordkeeping solutions to radio stations and Webcasters.
    Most of the comments received from interested parties centered on 
the proposed move to full census ATP reporting. Comments focused on the 
technological reporting capabilities of small entities or less 
intensive users (particularly, users associated with educational 
institutions), as well as on various assertions about the costs and 
benefits of moving to full census ATP reporting for such users. 
Consequently, the Judges' April 8, 2009, NOI sought to obtain 
additional, more concrete information concerning the likely costs and 
benefits stemming from the adoption of the proposed census reporting 
provision as well as information on any alternatives to the proposal 
that might accomplish the same goals as the proposal in a less 
burdensome way, particularly with respect to small entities. 74 FR 
15901.
    In response to the NOI, the Judges received 14 comments and 6 reply 
comments from the following categories of interested parties: (1) 
Representatives of copyright owners and performers, including 
SoundExchange; (2) copyright users and/or their representatives and 
allied interested parties, including the NAB, CBI, IBS, the National 
Federation of Community Broadcasters (``NFCB''), various radio 
broadcasters affiliated with educational institutions, the American 
Council on Education (``ACE''); and (3) a software provider of 
recordkeeping solutions to radio stations and Webcasters.

III. Obsolete Provisions and General Definitions

    Obsolete provisions proposed for deletion by the Judges in their 
December 30th NPRM raised no concerns for commenting parties. 
Similarly, the deletion of duplicative definitions for nine common 
terms that appeared in various sections of the interim regulation and 
their replacement by a single definition for each of the nine terms in 
a new General Definitions section at the head of the proposed 
regulation \1\ proved noncontroversial. Therefore, given the efficiency 
gains these changes will bring users, the Judges adopt the changes as 
proposed in the December 30, 2008, NPRM at 73 FR 79728.
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    \1\ These terms include: (1) Notice of Use, (2) Service, (3) 
Preexisting Subscription Service, (4) New Subscription Service, (5) 
Nonsubscription Transmission Service, (6) Preexisting Satellite 
Digital Audio Radio Service, (7) Business Establishment Service, (8) 
Collective and (9) Report of Use. In the interest of administrative 
efficiency, the Judges proposed a new Sec.  370.1, General 
Definitions, to provide definitions for these nine terms that would 
apply generally throughout Part 370, unless otherwise specifically 
indicated.
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IV. Reports of Use Content and Reporting Period; Census Reporting

    Current requirements for the data to be included in reports of use 
and the frequency of reporting still largely reflect interim 
regulations adopted on March 11, 2004 (69 FR 11515) by the Copyright 
Office during an earlier phase of the recordkeeping rulemaking process 
that predated the transfer of rulemaking

[[Page 52420]]

authority to the Judges pursuant to the Copyright Royalty and 
Distribution Reform Act of 2004. The Copyright Office in its interim 
regulations determined to phase in the new reporting process by 
requiring periodic reporting of sound recording performances, although 
the Copyright Office noted that: ``[O]nce final regulations are 
implemented, year-round census reporting is likely to be the standard 
measure rather than the periodic reporting that will now be permitted 
on an interim basis.'' 69 FR 11526. Such census reporting provides a 
more complete record on which to base payments for the use of sound 
recordings compared to periodic reporting.\2\ After providing users 
with ample time--some five years--to familiarize themselves with the 
methods of acquiring and keeping the necessary data for compliance, the 
Judges now adopt a final regulation adopting census reporting for all 
but the lowest intensity users of sound recordings in a single category 
of users--broadcasters typically engaged in simulcasting their over-
the-air broadcasts on the Web. All other nonsubscription services, such 
as pure play Webcasters, are required to provide full reporting of the 
actual total performances of the sound recording for each reporting 
period during the year.\3\ To the extent that technological impediments 
to measuring actual listenership continue to hamper actual listenership 
measurement with respect to each sound recording for preexisting 
satellite digital audio radio services, new subscription services or 
business establishment services, the alternative of census reporting by 
means of a construct utilizing aggregate tuning hours \4\ is maintained 
for such services.\5\
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    \2\ Currently, services must provide the total number of 
performances of each sound recording during the relevant reporting 
period. However, the relevant reporting period is limited to two 
periods of seven consecutive days for each calendar quarter of the 
year. This results in an estimate of the use of a sound recording 
rather than a report of actual use.
    \3\ The final rule eliminates the aggregate tuning hours 
approach to reporting previously available to nonsubscription 
services. It should be noted that the aggregate tuning hours payment 
alternative to the per performance rate available to certain 
Webcasters was phased out at the end of the 2007 calendar year. 
Digital Performance Right in Sound Recordings and Ephemeral 
Recordings Final Rule, 72 FR 24096 n.33.
    \4\ This alternative requires an estimate of census reporting by 
means of reporting the following data for each reporting period: 
Aggregate tuning hours, channel or program name and play frequency.
    \5\ It should be noted that in the recent preexisting satellite 
digital audio radio service (``SDARS'') ratemaking proceeding, the 
collective (SoundExchange) requested that the recordkeeping 
regulations be amended to require census reporting and the services 
did not object to census reporting in general so long as the 
reporting exceptions currently found in Sec.  370.3(b)(8)(i)-(iii) 
were retained. Determination of Rates and Terms for Preexisting 
Subscription Services and Satellite Digital Audio Radio Services 
Final Rule and Order, 73 FR 4101 (January 24, 2008). The Judges' 
final recordkeeping rule retains those exceptions in the new Sec.  
370.4(b)(3)(i)-(iii) adopted today.
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    A number of the most intensive users of the 114 and 112 licenses 
are already reporting on a census basis according to SoundExchange. See 
Comments of SoundExchange, Docket No. RM 2008-7 at 5-6 (January 29, 
2009); Comments of SoundExchange, Docket No. RM 2008-7 at 15-20 (May 
26, 2009). Further, the fact that many of the largest commercial 
Webcasters and other intensive users such as satellite radio have not 
filed comments in this proceeding clearly indicates an absence of 
controversy among more intensive users concerning the Judges' proposed 
census reporting regulations. Rather, many of the comments focused on 
the impact of the NPRM on less-intensive users such as a number of 
noncommercial broadcasters affiliated with educational institutions.
    Both commercial and noncommercial broadcasters that are low-
intensity users who typically simulcast over the Web appear to share a 
common technological characteristic-anachronistic systems or procedures 
that are not designed for easily reporting data on sound recordings 
simultaneously played as a Webcast. See, e.g., Comments of the National 
Association of Broadcasters, Docket No. RM 2008-7 at 8-9 (January 29, 
2009); Comments of the National Association of Broadcasters, Docket No. 
RM 2008-7 at 5 (May 26, 2009). For example, in some cases, the manual 
play of music without the aid of a computer hampers the effective 
collection of information on the usage of sound recordings. See, e.g., 
Comments of the National Association of Broadcasters, Docket No. RM 
2008-7 at 9 (January 29, 2009); Comments from Tom Worster and 
Spinitron, Docket No. RM 2008-7 at 3-4 (January 29, 2009); Reply 
Comments of the American Council on Education, Docket No. RM 2008-7 at 
2 (June 8, 2009).
    While the absence of automated playlists represents one particular 
approach followed by some broadcasters for a variety of reasons-
sometimes creative, sometimes pedagogical, and sometimes financially 
driven (See, e.g., Comments of the National Association of 
Broadcasters, Docket No. RM 2008-7 at 8-9 (January 29, 2009); Comments 
of the National Association of Broadcasters, Docket No. RM 2008-7 at 4-
5 (May 26, 2009); Comments of University of California NCE Broadcast 
Radio Stations and Associated College and University Broadcasters Who 
Simulcast, Docket No. RM 2008-7 at 3 (May 26, 2009); Comments of WSOU-
FM, Docket No. RM 2008-7 at 3-4 (May 26, 2009))--these reasons do not 
necessarily overlap. For example, some low-intensity simulcasters who 
maintain partial or fully manual playlists may well be affiliated with 
large, financially well-endowed educational institutions and those 
institutions may claim to be training future broadcasters irrespective 
of the broadcast industry trend toward the adoption of automated 
programming; yet, they may choose to continue manual programming to 
allow their students more room to pursue a more creative approach to 
playing music either as part of a structured learning experience or as 
part of a less structured extracurricular experience. Thus, even in 
those instances where an educational institution's financial resources 
appear fully capable of providing for more investment in newer 
technology for proper recordkeeping and reporting under the Copyright 
Act, the educational institution may have little incentive to make such 
investments given the relatively unimportant stature of the activity in 
its overall mission. As a result, from the user's standpoint in such 
situations, there may appear to be a reasonable relationship between 
the low intensity use of Webcasting and the amount of resources the 
noncommercial broadcasting entity is willing to invest in the effort.
    Some parallel exists in a commercial setting where small 
broadcasters with limited resources may engage small numbers of 
listeners through simulcasts on the Web of their over-the-air 
programming, but may not find such listenership sufficiently rewarding 
to make an immediate investment in adapting their old technology to 
permit easier recordkeeping. Here again, from the user's standpoint, 
there may be a reasonable relationship between the very low intensity 
use of Webcasting and the amount of resources the broadcasting entity 
is willing to invest in the effort. However, in the commercial case, 
broadcasters who do not adapt in the long run will fail as commercial 
entities to achieve the critical mass necessary to justify their 
presence on the Web. Therefore, they ultimately have a strong financial 
incentive to become more than very low intensity users, adapt their 
technology, ultimately achieve the same capabilities as their 
competitors on the Web and, in the process, attain comparable 
capabilities for full census reporting. Indeed, this process has been

[[Page 52421]]

recognized by the NAB and SoundExchange in their recent settlement 
pursuant to the Webcaster Settlement Act of 2008 (Pub. L. 110-435, 122 
Stat. 4974), where they agreed to reporting requirements applicable to 
commercial broadcasters \6\ that require census reporting for all but a 
small group of low-intensity users that qualify for a ``small 
broadcaster'' status.\7\ See 74 FR 9301 (March 3, 2009). Such ``small 
broadcasters'' are not subject to the full census reporting applicable 
to other broadcasters in recognition of the ``unique business and 
operational circumstances currently existing with respect to these 
entities'' and are granted this exception to the general rule ``on a 
transitional basis for a limited time.'' 74 FR 9301. Some of the 
operating circumstances that differentiate low-intensity commercial 
broadcasters from other low-intensity commercial Webcasters include the 
former's continued use of disparate systems not designed in the first 
instance to provide sound recording performance data and their 
inability as small entities to quickly pay for the costs of renovating 
such systems.\8\ See Comments of the National Association of 
Broadcasters, Docket No. RM 2008-7 at 4-5 (May 26, 2009).
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    \6\ Broadcasters, as used in the NAB-SoundExchange settlement, 
do not include noncommercial Webcasters as they are defined in 17 
U.S.C. 114(f)(5)(E)(i).
    \7\ ``Small Webcasters'' in the NAB-SoundExchange settlement 
generally refers to those broadcasters who make eligible 
transmissions of less than 27,777 aggregate tuning hours in a given 
year. This level of actual transmissions in a given year, under the 
rate provisions of the settlement, appears likely to be largely 
covered by the credit obtained by the broadcaster towards usage upon 
payment of the $500 per channel minimum fee under the settlement. In 
other words, where usage clearly exceeds the minimum fee credit, 
census reporting typically applies.
    \8\ No comments were received from any pure commercial Webcaster 
claiming to be similarly situated.
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    By contrast, many low-intensity noncommercial broadcasters do not 
have similarly pressing financial incentives or, indeed, may only be 
secondarily motivated by financial considerations as noted above. 
Therefore, for low-intensity noncommercial broadcasters, the transition 
from old technological equipment and approaches may well proceed at a 
slower pace until such time as the activity in question generates more 
support in terms of its relative position in the overall mission of the 
affiliated institution. This is not to say that a permanent exception 
to the census reporting rule for low-intensity noncommercial 
broadcasters is in order. Clearly, the failure to report the full 
actual number of performances of a sound recording is at odds with the 
purpose of the recordkeeping requirement to the extent that, as a 
result, many sound recordings are under-compensated or not compensated 
at all from the section 114 and 112 royalties. Yet, at the same time, 
the low-intensity noncommercial broadcaster, by definition, does not 
enjoy the same pecuniary benefit from the use of the sound recordings 
at issue in this proceeding as does the low-intensity commercial 
broadcaster. Aggregate payments owed by low-intensity noncommercial 
broadcasters are dwarfed by payments by other users. Therefore, the 
tension between the relative cost of potential undercompensation to 
copyright owners and the relative cost of replacing outmoded systems 
employed by the low-intensity noncommercial broadcaster appears best 
resolved by allowing low-intensity noncommercial broadcasters to 
continue to report estimated usage on a quarterly basis in the same 
manner as under previous requirements until such time as either a 
reasonably priced technological solution is developed to facilitate 
census reporting under their current operational configurations and 
practices \9\ or where such noncommercial broadcasters finally move to 
more state-of-the art technology and practices.
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    \9\ The Corporation for Public Broadcasting (``CPB'') in its 
recent settlement with SoundExchange, pursuant to the Webcaster 
Settlement Act of 2008, has agreed on behalf of its covered entities 
to ``cooperate in good faith with efforts by SoundExchange to 
develop and test a technological solution that facilitates 
reporting.'' See 74 FR 9298 (March 3, 2009).
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    Despite recognizing that there may be situations in which some low-
intensity noncommercial broadcasters are not in a position to provide 
census reporting, SoundExchange nonetheless urges the adoption of 
census reporting as the default rule in this proceeding. The Judges 
decline to do so for this narrow class of users. While the rate of 
progress toward achieving census reporting capabilities among low-
intensity noncommercial broadcasters is frustratingly slow, it would be 
unreasonable to adopt a regulation that may well reduce the ability of 
such users to submit reports beyond even their current level of effort. 
Such an action may also raise the transactions costs for both users and 
the Collective. Neither of these two results would inure to the benefit 
of copyright owners.
    Most educationally affiliated noncommercial broadcasters and/or 
their representatives initially urged the Judges to allow them to 
continue to report two weeks out of every quarter and to continue to 
use ATH as a reporting alternative to ATP. See, e.g., Comments of 
University of California NCE Broadcast Radio Stations and Associated 
College and University Broadcasters Who Simulcast, Docket No. RM 2008-7 
at 3 (January 28, 2009); Supplemental Comments of Harvard Radio 
Broadcasting Company, Docket No. RM 2008-7 at 22 (May 26, 2009). In 
particular, many of these comments urged the continuation of the two-
week sampling approach with ATH reporting ``for educational stations 
paying only the minimum fee''--i.e., for the lowest intensity users. 
See, e.g., Comments of Collegiate Broadcasters, Inc., Docket No. RM 
2008-7 at 29 (May 26, 2009). However, some subsequent comments urged 
the Judges to consider, at least in the alternative, rolling back even 
the current two-week sampling requirement in favor of a complete 
reporting exemption for minimum fee users willing to pay an additional 
$100 ``data proxy fee'' annually. See, e.g., Reply Comments of 
Collegiate Broadcasters, Inc., Docket No. RM 2008-7 at 11, 16 (June 8, 
2009). Supplemental Reply Comments of Harvard Radio Broadcasting 
Company, Docket No. RM 2008-7 at 20 (June 8, 2009).
    We do not agree that an additional data proxy fee in lieu of any 
reporting obligation represents a reasonable alternative to the 
continuation of the two-week sampling approach with ATH reporting for 
educational stations paying only the minimum fee. The data proxy fee 
alternative as proposed here represents a step backward in achieving 
better accuracy in reporting. As a result, it makes undercompensation 
stemming from inaccurate reporting even more problematic, inasmuch as 
it is the low-intensity educational station user that both such users 
and the Collective agree plays more diverse sound recordings. See, 
e.g., Supplemental Reply Comments of Harvard Radio Broadcasting 
Company, Docket No. RM 2008-7 at 20 (June 8, 2009). Because of such 
greater diversity, many more sound recording copyright owners may well 
forfeit a distribution of earned royalties when their use is not 
reported at all. See, e.g., Reply Comments of SoundExchange, Inc., 
Docket No. RM 2008-7 at 2 (June 8, 2009) (``These services do not pay 
very much in royalties, but what they pay may be the only statutory 
royalties earned by the copyright owners and performers of many obscure 
recordings.''). In short, it is hardly reasonable to propose a complete 
exemption from even the

[[Page 52422]]

existing sample-based recordkeeping requirements, for even if the 
current requirements produce results that are less than perfectly 
accurate as collected, observed and administered, they at least provide 
some rational basis for royalty distribution to owners and performers 
who would otherwise be completely shut out of the royalty distribution 
process notwithstanding the use of their works.
    The expanded scope of census reporting adopted in the final 
regulation also gave rise to two ancillary changes. One is a minor, 
noncontroversial change to harmonize references to the frequency of 
report delivery with the reporting period. That is, in those instances 
where monthly reports of use are required, the corresponding reporting 
period is defined as one month; and, in those cases where quarterly 
reports of use are maintained as the requirement, the corresponding 
reporting period is defined as one quarter. Second, a change to the 
previously existing rate category codes was required in the new Sec.  
370.4(d)(2)(ii) adopted today so as to prevent inconsistencies with 
different categories used during prior reporting periods. SoundExchange 
proposed the use of a new list of category codes with the addition of 
language indicating that the Collective ``may from time to time publish 
an updated list of categories then applicable under the Webcaster 
Settlement Act or regulations, and Services shall identify the most 
specific category then applicable to them.'' See Comments of 
SoundExchange, Docket No. RM 2008-7, Proposed Regulations Exhibit A at 
6 (January 29, 2009). On the other hand, another proposal instead 
recommends obsoleting and reserving the 2006 codes which would be no 
longer used going forward, while maintaining the same 2006 codes for 
categories which have not changed. See Comments from Tom Worster and 
Spinitron, Docket No. RM 2008-7 at 7 (January 29, 2009). The Spinitron 
proposal is supported by the NAB as promoting more clarity for users. 
See Comments of the National Association of Broadcasters, Docket No. RM 
2008-7 at 6, (May 26, 2009). Because the Judges agree that this latter 
approach makes clear that anyone previously reporting under one of the 
obsolete codes must choose another one, we adopt the proposal put 
forward by Tom Worster on behalf of Spinitron as part of this final 
regulation.

V. Additional Revisions Proposed by the Parties

    In addition to the specific recordkeeping regulatory changes 
proposed by the Judges in the December 2008 NPRM, the Judges solicited 
comments on any technological developments that pointed to the need for 
further adjustment of the rules either in terms of the method of 
reporting specific data elements or with respect to the delivery 
mechanism employed for reporting. For example, the Judges specifically 
inquired as to what further improvements to the reporting regulations 
could be made in light of recent technological developments since the 
promulgation of the interim regulation, the new availability of 
reporting software or the advent of substantially reduced costs for 
certain delivery mechanism alternatives.
    While approximately 18 proposals for additional regulatory changes 
beyond those proposed in the December 30, 2008 NPRM were submitted by 
SoundExchange, users and other interested parties, a number of the 
additional proposals went beyond the scope of the Judges' specific 
inquiry. That is, such proposals did not reflect technological 
developments which might warrant additional revisions to rules 
governing the method of reporting specific data elements and/or the 
delivery mechanism being employed for reporting. For example, 
SoundExchange proposed the addition of late fees for incomplete or 
tardy reports of use; or, as another example, Frederick Wilhelms III 
proposed the addition of various detail to the Collective's annual 
report requirements. See Comments of SoundExchange, Docket No. RM 2008-
7 at 30-32 (January 29, 2009); Comments of Frederick Wilhelms III, 
Docket No. RM 2008-7 at 8-9 (January 27, 2009).
    Other proposals, such as SoundExchange's request for the 
delineation of a separate certification form provided by SoundExchange 
to accompany the report of use (See Comments of SoundExchange, Docket 
No. RM 2008-7 at 30-32 (January 29, 2009)) generated significant 
controversy concerning the design process and/or contents of the 
proposed new form, indicating that such proposals not only were likely 
beyond the scope of the Judges' specific technological change inquiry, 
but also not yet likely ripe for determination. See, e.g., Comments of 
National Association of Broadcasters, Docket No. RM 2008-7 at 5-6 (May 
26, 2009); Reply Comments of SoundExchange, Docket No. RM 2008-7 at 13 
(June 8, 2009). Similarly, SoundExchange's proposal to require 
nonsubscription services to provide copyright owner information in 
exactly the same form as it appears in the commercially released 
product met with objections as to practicality for some users that 
merit more detailed consideration than the focus of this proceeding 
permits. See, e.g., Comments of National Association of Broadcasters, 
Docket No. RM 2008-7 at 6-7 (May 26, 2009).
    A proposal that syndicated programming that is simulcast by 
broadcasters should be exempted from recordkeeping requirements (See 
Comments of the National Association of Broadcasters, Docket No. RM 
2008-7 at 8 (May 26, 2009)) raises serious issues concerning the 
recordkeeping obligations of users and, at the same time, offers no 
solution for improving reports of actual use to facilitate owners 
receiving more accurate payment distributions. Moreover, inasmuch as 
the interim reporting regulation in place has functioned for some time 
without such an exemption, albeit with less frequent quarterly 
reporting requirements, it is not at all clear that the adoption of the 
final regulation proposed in the NPRM merits rethinking at this 
juncture.\10\ Indeed, the Collective suggests that any reporting 
problems for broadcasters associated with syndicated programming have 
been adequately addressed going forward in their recently completed 
NAB-SoundExchange Webcaster settlement agreement. See Reply Comments of 
SoundExchange, Docket No. RM 2008-7 at 14 (June 8, 2009). In short, the 
syndication exemption proposal has not been sufficiently developed for 
the Judges' consideration in this proceeding.
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    \10\ For example, there will be no differential impact on low-
intensity, minimum fee broadcasters since the interim reporting 
regulation remains unchanged in the final regulation for such users.
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    Similarly, SoundExchange's proposal to authorize the Collective to 
distribute royalties based on a reasonable proxy when sufficient 
reports of use have not been filed within one year after receiving 
payment has been insufficiently developed in this proceeding. See 
Comments of SoundExchange, Docket No. RM 2008-7 at 4-5 (May 26, 2009). 
It was raised for the first time in this proceeding in response to the 
April 8, 2009 NOI and even SoundExchange admits to originally 
contemplating making this request in a subsequent petition. Id. at 4 
n.7.
    Still other proposals, such as the proposal that the Collective be 
required to provide confirmation of the receipt of reports of use 
within a time certain (See, e.g., Comments of Tom Worster and 
Spinitron, Docket No. RM 2008-7 at 7 (January 29, 2009)), might 
arguably fit

[[Page 52423]]

within a very broad view of the Judges' specific technological change 
inquiry, but were not addressed by the Collective in terms of either 
technological feasibility or costs of adoption (if any).
    In short, some of the proposals included in comments received by 
the Judges in this proceeding may merit further examination in a future 
rulemaking. However, they are not ripe for either adoption or rejection 
at the present time.
    As a result, only a small number of proposals put forward in the 
parties' comments have been adopted in the final regulations. Some of 
these proposals relate to clarifying the final regulations as a result 
of changes made to the frequency reporting rule and are described 
herein above in connection with that rule. Of the remaining three party 
proposals adopted by the Judges, one adopted proposal reflects recent 
technological developments, another adopted proposal reflects a 
physical change of address for the Collective, and the remaining 
adopted proposal corrects an inconsistency in the delineation of the 
use of report dates in the NPRM. No controversy was raised by any of 
the commenting parties concerning these three proposals.
    The change in the final regulation adopted from comments received 
by the Judges that is directly related to technological developments is 
the elimination of the delivery of reports of use by means of floppy 
diskette.\11\ See Comments of SoundExchange, Docket No. RM 2008-7 at 25 
(January 29, 2009). We agree with SoundExchange that the use of floppy 
diskettes has been rendered obsolete by recent technological 
developments and that it is not technologically efficient for the 
Collective to maintain old disk drives and equipment applicable only to 
such physical media. Moreover, delivery by means of CD-ROM is readily 
available and maintained in the final regulation for any license user 
needing a physical media delivery alternative.
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    \11\ Under the interim regulation, SoundExchange supported four 
methods of delivery for electronic data files: File Transfer 
Protocol (``FTP''); electronic mail attachment; CD-ROM delivery; and 
floppy diskette delivery. The final regulation eliminates floppy 
diskette delivery.
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    The remaining two changes adopted by the Judges from comments 
submitted by the parties are: (1) a correction in the e-mail address 
for the Collective to <a href="/cdn-cgi/l/email-protection#087a6d78677a7c7b487b677d666c6d706b6069666f6d266b6765"><span class="__cf_email__" data-cfemail="3c4e594c534e484f7c4f5349525859445f545d525b59125f5351">[email protected]</span></a> and (2) the consistent 
reference to dates of a reporting period throughout the final 
regulation in the format ``year, month and day.'' See Comments of 
SoundExchange, Docket No. RM 2008-7 at 29-30 (January 29, 2009). These 
changes adopted by the Judges will add clarity and consistency to the 
final regulation for reporting and delivery.

List of Subjects in 37 CFR Part 370

    Copyright, Sound recordings.

Final Regulation

0
For the reasons set forth in the preamble, the Copyright Royalty Judges 
revise 37 CFR part 370 to read as follows:

PART 370--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY 
LICENSES

Sec.
370.1 General definitions.
370.2 Notice of use of sound recordings under statutory license.
370.3 Reports of use of sound recordings under statutory license for 
preexisting subscription services.
370.4 Reports of use of sound recordings under statutory license for 
nonsubscription transmission services, preexisting satellite digital 
audio radio services, new subscription services and business 
establishment services.
370.5 Designated collection and distribution organizations for 
reports of use of sound recordings under statutory license.

    Authority: 17 U.S.C. 112(e)(4), 114(f)(4)(A).


Sec.  370.1  General definitions.

    For purposes of this part, the following definitions apply:
    (a) A Notice of Use of Sound Recordings Under Statutory License is 
a written notice to sound recording copyright owners of the use of 
their works under section 112(e) or 114(d)(2) of title 17, United 
States Code, or both, and is required under this part to be filed by a 
Service in the Copyright Office.
    (b) A Service is an entity engaged in either the digital 
transmission of sound recordings pursuant to section 114(d)(2) of title 
17 of the United States Code or making ephemeral phonorecords of sound 
recordings pursuant to section 112(e) of title 17 of the United States 
Code or both. The definition of a Service includes an entity that 
transmits an AM/FM broadcast signal over a digital communications 
network such as the Internet, regardless of whether the transmission is 
made by the broadcaster that originates the AM/FM signal or by a third 
party, provided that such transmission meets the applicable 
requirements of the statutory license set forth in 17 U.S.C. 114(d)(2). 
A Service may be further characterized as either a preexisting 
subscription service, preexisting satellite digital audio radio 
service, nonsubscription transmission service, new subscription 
service, business establishment service or a combination of those.
    (c) A Preexisting Subscription Service is defined in 17 U.S.C. 
114(j)(11).
    (d) A New Subscription Service is defined in 17 U.S.C. 114(j)(8).
    (e) A Nonsubscription Transmission Service is a service that makes 
noninteractive nonsubscription digital audio transmissions that are not 
exempt under section 114(d)(1) of title 17 of the United States Code 
and are made as part of a service that provides audio programming 
consisting, in whole or in part, of performances of sound recordings, 
including transmissions of broadcast transmissions, if the primary 
purpose of the service is to provide to the public such audio or other 
entertainment programming, and the primary purpose of the service is 
not to sell, advertise, or promote particular products or services 
other than sound recordings, live concerts, or other music-related 
events.
    (f) A Preexisting Satellite Digital Audio Radio Service is defined 
in 17 U.S.C. 114(j)(10).
    (g) A Business Establishment Service is a service that makes 
ephemeral phonorecords of sound recordings pursuant to section 112(e) 
of title 17 of the United States Code and is exempt under section 
114(d)(1)(C)(iv) of title 17 of the United States Code.
    (h) A Collective is a collection and distribution organization that 
is designated under one or both of the statutory licenses by 
determination of the Copyright Royalty Judges.
    (i) A Report of Use is a report required to be provided by a 
Service that is transmitting sound recordings pursuant to the statutory 
license set forth in section 114(d)(2) of title 17 of the United States 
Code or making ephemeral phonorecords of sound recordings pursuant to 
the statutory license set forth in section 112(e) of title 17 of the 
United States Code, or both.


Sec.  370.2  Notice of use of sound recordings under statutory license.

    (a) General. This section prescribes rules under which copyright 
owners shall receive notice of use of their sound recordings when used 
under either section 112(e) or 114(d)(2) of title 17, United States 
Code, or both.
    (b) Forms and content. A Notice of Use of Sound Recordings Under 
Statutory License shall be prepared on a form that may be obtained from 
the Copyright Office Web site or from the Licensing Division, and shall 
include the following information:
    (1) The full legal name of the Service that is either commencing 
digital transmissions of sound recordings or

[[Page 52424]]

making ephemeral phonorecords of sound recordings under statutory 
license or doing both.
    (2) The full address, including a specific number and street name 
or rural route, of the place of business of the Service. A post office 
box or similar designation will not be sufficient except where it is 
the only address that can be used in that geographic location.
    (3) The telephone number and facsimile number of the Service.
    (4) Information on how to gain access to the online Web site or 
homepage of the Service, or where information may be posted under this 
section concerning the use of sound recordings under statutory license.
    (5) Identification of each license under which the Service intends 
to operate, including identification of each of the following 
categories under which the Service will be making digital transmissions 
of sound recordings: Preexisting subscription service, preexisting 
satellite digital audio radio service, nonsubscription transmission 
service, new subscription service or business establishment service.
    (6) The date or expected date of the initial digital transmission 
of a sound recording to be made under the section 114 statutory license 
and/or the date or the expected date of the initial use of the section 
112(e) license for the purpose of making ephemeral phonorecords of the 
sound recordings.
    (7) Identification of any amendments required by paragraph (e) of 
this section.
    (c) Signature. The Notice shall include the signature of the 
appropriate officer or representative of the Service that is either 
transmitting the sound recordings or making ephemeral phonorecords of 
sound recordings under statutory license or doing both. The signature 
shall be accompanied by the printed or typewritten name and the title 
of the person signing the Notice and by the date of the signature.
    (d) Filing notices; fees. The original and three copies shall be 
filed with the Licensing Division of the Copyright Office and shall be 
accompanied by the filing fee set forth in Sec.  201.3(e) of this 
title. Notices shall be placed in the public records of the Licensing 
Division. The Notice and filing fee shall be sent to the Licensing 
Division at either the address listed on the form obtained from the 
Copyright Office or to: Library of Congress, Copyright Office, 
Licensing Division, 101 Independence Avenue, SE., Washington, DC 20557-
6400. A Service that, on or after July 1, 2004, shall make digital 
transmissions and/or ephemeral phonorecords of sound recordings under 
statutory license shall file a Notice of Use of Sound Recordings under 
Statutory License with the Licensing Division of the Copyright Office 
prior to the making of the first ephemeral phonorecord of the sound 
recording and prior to the first digital transmission of the sound 
recording.
    (e) Amendment. A Service shall file a new Notice of Use of Sound 
Recordings under Statutory License within 45 days after any of the 
information contained in the Notice on file has changed, and shall 
indicate in the space provided by the Copyright Office that the Notice 
is an amended filing. The Licensing Division shall retain copies of all 
prior Notices filed by the Service.


Sec.  370.3  Reports of use of sound recordings under statutory license 
for preexisting subscription services.

    (a) General. This section prescribes the rules for the maintenance 
and delivery of reports of use for sound recordings under section 
112(e) or section 114(d)(2) of title 17 of the United States Code, or 
both, by preexisting subscription services.
    (b) Delivery. Reports of Use shall be delivered to Collectives that 
are identified in the records of the Licensing Division of the 
Copyright Office as having been designated by determination of the 
Copyright Royalty Judges. Reports of Use shall be delivered on or 
before the forty-fifth day after the close of each month.
    (c) Posting. In the event that no Collective is designated under 
the statutory license, or if all designated Collectives have terminated 
collection and distribution operations, a preexisting subscription 
service transmitting sound recordings under statutory license shall 
post and make available online its Reports of Use. Preexisting 
subscription services shall post their Reports of Use online on or 
before the forty-fifth day after the close of each month, and continue 
to make them available thereafter to all sound recording copyright 
owners for a period of 90 days. Preexisting subscription services may 
require use of passwords for access to posted Reports of Use, but must 
make passwords available in a timely manner and free of charge or other 
restrictions. Preexisting subscription services may predicate provision 
of a password upon:
    (1) Information relating to identity, location and status as a 
sound recording copyright owner; and
    (2) A ``click-wrap'' agreement not to use information in the Report 
of Use for purposes other than royalty collection, royalty 
distribution, and determining compliance with statutory license 
requirements, without the express consent of the preexisting 
subscription service providing the Report of Use.
    (d) Content. A ``Report of Use of Sound Recordings under Statutory 
License'' shall be identified as such by prominent caption or heading, 
and shall include a preexisting subscription service's ``Intended 
Playlists'' for each channel and each day of the reported month. The 
``Intended Playlists'' shall include a consecutive listing of every 
recording scheduled to be transmitted, and shall contain the following 
information in the following order:
    (1) The name of the preexisting subscription service or entity;
    (2) The channel;
    (3) The sound recording title;
    (4) The featured recording artist, group, or orchestra;
    (5) The retail album title (or, in the case of compilation albums 
created for commercial purposes, the name of the retail album 
identified by the preexisting subscription service for purchase of the 
sound recording);
    (6) The marketing label of the commercially available album or 
other product on which the sound recording is found;
    (7) The catalog number;
    (8) The International Standard Recording Code (ISRC) embedded in 
the sound recording, where available and feasible;
    (9) Where available, the copyright owner information provided in 
the copyright notice on the retail album or other product (e.g., 
following the symbol (P), that is the letter P in a circle) or, in the 
case of compilation albums created for commercial purposes, in the 
copyright notice for the individual sound recording;
    (10) The date of transmission; and
    (11) The time of transmission.
    (e) Signature. Reports of Use shall include a signed statement by 
the appropriate officer or representative of the preexisting 
subscription service attesting, under penalty of perjury, that the 
information contained in the Report is believed to be accurate and is 
maintained by the preexisting subscription service in its ordinary 
course of business. The signature shall be accompanied by the printed 
or typewritten name and title of the person signing the Report, and by 
the date of signature.
    (f) Format. Reports of Use should be provided on a standard 
machine-readable medium, such as diskette, optical disc, or magneto-
optical disc, and should conform as closely as possible to the 
following specifications:
    (1) ASCII delimited format, using pipe characters as delimiter, 
with no headers or footers;

[[Page 52425]]

    (2) Carats should surround strings;
    (3) No carats should surround dates and numbers;
    (4) Dates should be indicated by: YYYY/MM/DD;
    (5) Times should be based on a 24-hour clock: HH:MM:SS;
    (6) A carriage return should be at the end of each line; and
    (7) All data for one record should be on a single line.
    (g) Confidentiality. Copyright owners, their agents and Collectives 
shall not disseminate information in the Reports of Use to any persons 
not entitled to it, nor utilize the information for purposes other than 
royalty collection and distribution, and determining compliance with 
statutory license requirements, without express consent of the 
preexisting subscription service providing the Report of Use.
    (h) Documentation. All compulsory licensees shall, for a period of 
at least three years from the date of service or posting of the Report 
of Use, keep and retain a copy of the Report of Use.


Sec.  370.4  Reports of use of sound recordings under statutory license 
for nonsubscription transmission services, preexisting satellite 
digital audio radio services, new subscription services and business 
establishment services.

    (a) General. This section prescribes rules for the maintenance and 
delivery of reports of use of sound recordings under section 112(e) or 
section 114(d)(2) of title 17 of the United States Code, or both, by 
nonsubscription transmission services, preexisting satellite digital 
audio radio services, new subscription services, and business 
establishment services.
    (b) Definitions. (1) Aggregate Tuning Hours are the total hours of 
programming that a nonsubscription transmission service, preexisting 
satellite digital audio radio service, new subscription service or 
business establishment service has transmitted during the reporting 
period identified in paragraph (d)(3) of this section to all listeners 
within the United States over the relevant channels or stations, and 
from any archived programs, that provide audio programming consisting, 
in whole or in part, of eligible nonsubscription service, preexisting 
satellite digital audio radio service, new subscription service or 
business establishment service transmissions, less the actual running 
time of any sound recordings for which the service has obtained direct 
licenses apart from 17 U.S.C. 114(d)(2) or which do not require a 
license under United States copyright law. For example, if a 
nonsubscription transmission service transmitted one hour of 
programming to 10 simultaneous listeners, the nonsubscription 
transmission service's Aggregate Tuning Hours would equal 10. If 3 
minutes of that hour consisted of transmission of a directly licensed 
recording, the nonsubscription transmission service's Aggregate Tuning 
Hours would equal 9 hours and 30 minutes. If one listener listened to 
the transmission of a nonsubscription transmission service for 10 hours 
(and none of the recordings transmitted during that time was directly 
licensed), the nonsubscription transmission service's Aggregate Tuning 
Hours would equal 10.
    (2) An AM/FM Webcast is a transmission made by an entity that 
transmits an AM/FM broadcast signal over a digital communications 
network such as the Internet, regardless of whether the transmission is 
made by the broadcaster that originates the AM/FM signal or by a third 
party, provided that such transmission meets the applicable 
requirements of the statutory license set forth in 17 U.S.C. 114(d)(2).
    (3) A minimum fee broadcaster is a nonsubscription service that 
meets the definition of a broadcaster pursuant to Sec.  380.2(b) of 
this chapter and the service's payments for eligible transmissions do 
not exceed the annual minimum fee established for licensees relying 
upon the statutory licenses set forth in 17 U.S.C. 112 and 114.
    (4) A performance is each instance in which any portion of a sound 
recording is publicly performed to a Listener by means of a digital 
audio transmission or retransmission (e.g., the delivery of any portion 
of a single track from a compact disc to one Listener) but excluding 
the following:
    (i) A performance of a sound recording that does not require a 
license (e.g., the sound recording is not copyrighted);
    (ii) A performance of a sound recording for which the service has 
previously obtained a license from the Copyright Owner of such sound 
recording; and
    (iii) An incidental performance that both:
    (A) Makes no more than incidental use of sound recordings 
including, but not limited to, brief musical transitions in and out of 
commercials or program segments, brief performances during news, talk 
and sports programming, brief background performances during disk 
jockey announcements, brief performances during commercials of sixty 
seconds or less in duration, or brief performances during sporting or 
other public events; and
    (B) Other than ambient music that is background at a public event, 
does not contain an entire sound recording and does not feature a 
particular sound recording of more than thirty seconds (as in the case 
of a sound recording used as a theme song).
    (5) Play frequency is the number of times a sound recording is 
publicly performed by a Service during the relevant period, without 
respect to the number of listeners receiving the sound recording. If a 
particular sound recording is transmitted to listeners on a particular 
channel or program only once during the reporting period, then the play 
frequency is one. If the sound recording is transmitted 10 times during 
the reporting period, then the play frequency is 10.
    (c) Delivery. Reports of Use shall be delivered to Collectives that 
are identified in the records of the Licensing Division of the 
Copyright Office as having been designated by determination of the 
Copyright Royalty Judges. Reports of Use shall be delivered on or 
before the forty-fifth day after the close of each reporting period 
identified in paragraph (d)(3) of this section.
    (d) Report of Use. (1) Separate reports not required. A 
nonsubscription transmission service, preexisting satellite digital 
audio radio service or a new subscription service that transmits sound 
recordings pursuant to the statutory license set forth in section 
114(d)(2) of title 17 of the United States Code and makes ephemeral 
phonorecords of sound recordings pursuant to the statutory license set 
forth in section 112(e) of title 17 of the United States Code need not 
maintain a separate Report of Use for each statutory license during the 
relevant reporting periods.
    (2) Content. For a nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service that transmits sound 
recordings pursuant to the statutory license set forth in section 
114(d)(2) of title 17 of the United States Code, or the statutory 
license set forth in section 112(e) of title 17 of the United States 
Code, or both, each Report of Use shall contain the following 
information, in the following order, for each sound recording 
transmitted during the reporting periods identified in paragraph (d)(3) 
of this section:
    (i) The name of the nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service making the transmissions, 
including the name of

[[Page 52426]]

the entity filing the Report of Use, if different;
    (ii) The category transmission code for the category of 
transmission operated by the nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service:
    (A) For eligible nonsubscription transmissions other than broadcast 
simulcasts and transmissions of non-music programming;
    (B) For eligible nonsubscription transmissions of broadcast 
simulcast programming not reasonably classified as news, talk, sports 
or business programming;
    (C) For eligible nonsubscription transmissions of non-music 
programming reasonably classified as news, talk, sports or business 
programming;
    (D) [Reserved].
    (E) [Reserved].
    (F) [Reserved].
    (G) [Reserved].
    (H) For transmissions other than broadcast simulcasts and 
transmissions of non-music programming made by an eligible new 
subscription service;
    (I) For transmissions of broadcast simulcast programming not 
reasonably classified as news, talk, sports or business programming 
made by an eligible new subscription service;
    (J) For transmissions of non-music programming reasonably 
classified as news, talk, sports or business programming made by an 
eligible new subscription service; and
    (K) For eligible transmissions by a business establishment service 
making ephemeral recordings;
    (iii) The featured artist;
    (iv) The sound recording title;
    (v) The International Standard Recording Code (ISRC) or, 
alternatively to the ISRC, the:
    (A) Album title; and
    (B) Marketing label;
    (vi) For a nonsubscription transmission service except those 
qualifying as minimum fee broadcasters: The actual total performances 
of the sound recording during the reporting period.
    (vii) For a preexisting satellite digital audio radio service, a 
new subscription service, a business establishment service or a 
nonsubscription service qualifying as a minimum fee broadcaster: The 
actual total performances of the sound recording during the reporting 
period or, alternatively, the
    (A) Aggregate Tuning Hours;
    (B) Channel or program name; and
    (C) Play frequency.
    (3) Reporting period. A Report of Use shall be prepared:
    (i) For each calendar month of the year by all services other than 
a nonsubscription service qualifying as a minimum fee broadcaster; or
    (ii) For a two-week period (two periods of 7 consecutive days) for 
each calendar quarter of the year by a nonsubscription service 
qualifying as a minimum fee broadcaster and the two-week period need 
not consist of consecutive weeks, but both weeks must be completely 
within the calendar quarter.
    (4) Signature. Reports of Use shall include a signed statement by 
the appropriate officer or representative of the service attesting, 
under penalty of perjury, that the information contained in the Report 
is believed to be accurate and is maintained by the service in its 
ordinary course of business. The signature shall be accompanied by the 
printed or typewritten name and the title of the person signing the 
Report, and by the date of the signature.
    (5) Confidentiality. Copyright owners, their agents and Collectives 
shall not disseminate information in the Reports of Use to any persons 
not entitled to it, nor utilize the information for purposes other than 
royalty collection and distribution, without consent of the service 
providing the Report of Use.
    (6) Documentation. A Service shall, for a period of at least three 
years from the date of service or posting of a Report of Use, keep and 
retain a copy of the Report of Use.
    (e) Format and delivery. (1) Electronic format only. Reports of use 
must be maintained and delivered in electronic format only, as 
prescribed in paragraphs (e)(2) through (8) of this section. A hard 
copy report of use is not permissible.
    (2) ASCII text file delivery; facilitation by provision of 
spreadsheet templates. All report of use data files must be delivered 
in ASCII format. However, to facilitate such delivery, SoundExchange 
shall post and maintain on its Internet Web site a template for 
creating a report of use using Microsoft's Excel spreadsheet and 
Corel's Quattro Pro spreadsheet and instruction on how to convert such 
spreadsheets to ASCII text files that conform to the format 
specifications set forth below. Further, technical support and cost 
associated with the use of spreadsheets is the responsibility of the 
service submitting the report of use.
    (3) Delivery mechanism. The data contained in a report of use may 
be delivered by File Transfer Protocol (FTP), e-mail, or CD-ROM 
according to the following specifications:
    (i) A service delivering a report of use via FTP must obtain a 
username, password and delivery instructions from SoundExchange. 
SoundExchange shall maintain on a publicly available portion of its Web 
site instructions for applying for a username, password and delivery 
instructions. SoundExchange shall have 15 days from date of request to 
respond with a username, password and delivery instructions.
    (ii) A service delivering a report of use via e-mail shall append 
the report as an attachment to the e-mail. The main body of the e-mail 
shall identify:
    (A) The full name and address of the service;
    (B) The contact person's name, telephone number and e-mail address;
    (C) The start and end date of the reporting period;
    (D) The number of rows in the data file. If the report of use is a 
file using headers, counting of the rows should begin with row 15. If 
the report of use is a file without headers, counting of the rows 
should begin with row 1; and
    (E) The name of the file attached.
    (iii) A service delivering a report of use via CD-ROM must compress 
the reporting data to fit onto a single CD-ROM per reporting period. 
Each CD-ROM shall be submitted with a cover letter identifying:
    (A) The full name and address of the service;
    (B) The contact person's name, telephone number and e-mail address;
    (C) The start and end date of the reporting period;
    (D) The number of rows in the data file. If the report of use is a 
file using headers, counting of the rows should begin with row 15. If 
the report of use is a file without headers, counting of the rows 
should begin with row 1; and
    (E) The name of the file attached.
    (4) Delivery address. Reports of use shall be delivered to 
SoundExchange at the following address: SoundExchange, Inc., 1121 14th 
Street, NW., Suite 700, Washington, DC 20005; (Phone) (202) 640-5858; 
(Facsimile) (202) 640-5859; (E-mail) <a href="/cdn-cgi/l/email-protection#780a1d08170a0c0b380b170d161c1d001b1019161f1d561b1715"><span class="__cf_email__" data-cfemail="aedccbdec1dcdaddeeddc1dbc0cacbd6cdc6cfc0c9cb80cdc1c3">[email protected]</span></a>. 
SoundExchange shall forward electronic copies of these reports of use 
to all other collectives defined in this section.
    (5) File naming. Each data file contained in a report of use must 
be given a name by the service followed by the start and end date of 
the reporting period. The start and end date must be separated by a 
dash and in the format of year, month, and day (YYYYMMDD). Each file 
name must end with the file type extension of ``.txt''. (Example: 
AcmeMusicCo20050101-20050331.txt).
    (6) File type and compression. (i) All data files must be in ASCII 
format.
    (ii) A report of use must be compressed in one of the following 
zipped formats:

[[Page 52427]]

    (A) .zip--generated using utilities such as WinZip and/or UNIX zip 
command;
    (B) .Z--generated using UNIX compress command; or
    (C) .gz--generated using UNIX gzip command.
    (iii) Zipped files shall be named in the same fashion as described 
in paragraph (e)(5) of this section, except that such zipped files 
shall use the applicable file extension compression name described in 
this paragraph (e)(6).
    (7) Files with headers. (i) If a service elects to submit files 
with headers, the following elements, in order, must occupy the first 
14 rows of a report of use:
    (A) Name of service;
    (B) Name of contact person;
    (C) Street address of the service;
    (D) City, state and zip code of the service;
    (E) Telephone number of the contact person;
    (F) E-mail address of the contact person;
    (G) Start of the reporting period (YYYYMMDD);
    (H) End of the reporting period (YYYYMMDD);
    (I) Report generation date (YYYYMMDD);
    (J) Number of rows in data file, beginning with 15th row;
    (K) Text indicator character;
    (L) Field delimiter character;
    (M) Blank line; and
    (N) Report headers (Featured Artist, Sound Recording Title, etc.).
    (ii) Each of the rows described in paragraphs (e)(7)(i)(A) through 
(F) of this section must not exceed 255 alphanumeric characters. Each 
of the rows described in paragraphs (e)(7)(i)(G) through (I) of this 
section should not exceed eight alphanumeric characters.
    (iii) Data text fields, as required by paragraph (d) of this 
section, begin on row 15 of a report of use with headers. A carriage 
return must be at the end of each row thereafter. Abbreviations within 
data fields are not permitted.
    (iv) The text indicator character must be unique and must never be 
found in the report's data content.
    (v) The field delimiter character must be unique and must never be 
found in the report's data content. Delimiters must be used even when 
certain elements are not being reported; in such case, the service must 
denote the blank data field with a delimiter in the order in which it 
would have appeared.
    (8) Files without headers. If a service elects to submit files 
without headers, the following format requirements must be met:
    (i) ASCII delimited format, using pipe ([bond]) characters as 
delimiters, with no headers or footers;
    (ii) Carats ([supcaret]) should surround strings;
    (iii) No carats ([supcaret]) should surround dates and numbers;
    (iv) A carriage return must be at the end of each line;
    (v) All data for one record must be on a single line; and
    (vi) Abbreviations within data fields are not permitted.


Sec.  370.5  Designated collection and distribution organizations for 
reports of use of sound recordings under statutory license.

    (a) General. This section prescribes rules under which reports of 
use shall be collected and distributed under section 114(f) of title 17 
of the United States Code, and under which reports of such use shall be 
kept and made available.
    (b) Notice of Designation as Collective under Statutory License. A 
Collective shall file with the Licensing Division of the Copyright 
Office and post and make available online a ``Notice of Designation as 
Collective under Statutory License,'' which shall be identified as such 
by prominent caption or heading, and shall contain the following 
information:
    (1) The Collective name, address, telephone number and facsimile 
number;
    (2) A statement that the Collective has been designated for 
collection and distribution of performance royalties under statutory 
license for digital transmission of sound recordings; and
    (3) Information on how to gain access to the online Web site or 
home page of the Collective, where information may be posted under this 
part concerning the use of sound recordings under statutory license. 
The address of the Licensing Division is: Library of Congress, 
Copyright Office, Licensing Division, 101 Independence Avenue, SE., 
Washington, DC 20557-6400.
    (c) Annual Report. The Collective will post and make available 
online, for the duration of one year, an Annual Report on how the 
Collective operates, how royalties are collected and distributed, and 
what the Collective spent that fiscal year on administrative expenses.
    (d) Inspection of Reports of Use by copyright owners. The 
Collective shall make copies of the Reports of Use for the preceding 
three years available for inspection by any sound recording copyright 
owner, without charge, during normal office hours upon reasonable 
notice. The Collective shall predicate inspection of Reports of Use 
upon information relating to identity, location and status as a sound 
recording copyright owner, and the copyright owner's written agreement 
not to utilize the information for purposes other than royalty 
collection and distribution, and determining compliance with statutory 
license requirements, without express consent of the Service providing 
the Report of Use. The Collective shall render its best efforts to 
locate copyright owners in order to make available reports of use, and 
such efforts shall include searches in Copyright Office public records 
and published directories of sound recording copyright owners.
    (e) Confidentiality. Copyright owners, their agents, and 
Collectives shall not disseminate information in the Reports of Use to 
any persons not entitled to it, nor utilize the information for 
purposes other than royalty collection and distribution, and 
determining compliance with statutory license requirements, without 
express consent of the Service providing the Report of Use.
    (f) Termination and dissolution. If a Collective terminates its 
collection and distribution operations prior to the close of its term 
of designation, the Collective shall notify the Licensing Division of 
the Copyright Office, the Copyright Royalty Board and all Services 
transmitting sound recordings under statutory license, by certified or 
registered mail. The dissolving Collective shall provide each such 
Service with information identifying the copyright owners it has 
served.

    Dated: October 7, 2009.
James Scott Sledge,
Chief U.S. Copyright Royalty Judge.
[FR Doc. E9-24556 Filed 10-9-09; 8:45 am]
BILLING CODE 1410-72-P


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