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[Federal Register Volume 80, Number 10 (Thursday, January 15, 2015)]
[Proposed Rules]
[Pages 2065-2067]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-00203]

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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 383

[Docket No. 14-CRB-0002-NSR (2016-2020)]

Digital Performance Right in Sound Recordings and Ephemeral 
Recordings for a New Subscription Service

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Proposed rule.

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SUMMARY: The Copyright Royalty Judges are publishing for comment 
proposed regulations that would set the royalty rates and terms for the 
digital transmission of sound recordings by new subscription services 
and for the making of ephemeral recordings necessary to facilitate 
those transmissions for the period commencing January 1, 2016, and 
ending on December 31, 2020.

DATES: Comments and objections, if any, are due no later than February 
17, 2015.

ADDRESSES: The proposed rule is posted on the agency's Web site 
(www.loc.gov/crb). Submit electronic comments via email to crb@loc.gov 
or online at http://www.regulations.gov. Those who chose not to submit 
comments electronically should see How to Submit Comments in the 
SUPPLEMENTARY INFORMATION section below for further instructions.

FOR FURTHER INFORMATION CONTACT: Richard Strasser, Senior Attorney, or 
Kimberly Whittle, Attorney Advisor, by telephone at (202) 707-7658, or 
by email at crb@loc.gov.

SUPPLEMENTARY INFORMATION: The Copyright Royalty Judges (``Judges'') 
received a joint motion from SoundExchange, Inc. and Sirius XM Radio 
Inc. to adopt a settlement of their interests regarding royalty rates 
and terms for 2016-2020 applicable to music services available on cable 
and satellite television. Sirius XM Radio is a creator of music 
programming for DiSH satellite television. SoundExchange, Inc. 
represents the interests of sound recording copyright owners. 
SoundExchange and Sirius XM Radio propose regulatory language that, in 
part, simplifies the existing rate structure found in 37 CFR part 383. 
The Judges hereby publish the proposed revision to the regulation and 
request comments from the public.

Background

    Section 114(f)(2)(A) of the Copyright Act, title 17 of the United 
States Code, provides that, prior to the expiration of a rate term, the 
Judges shall commence a proceeding to determine reasonable royalty 
terms and rates for a new subscription service (i.e., a subscription 
service that was established after July 1, 1998, or is using a 
different transmission medium from what it used prior to July 1, 1998) 
on which sound recordings are performed. 17 U.S.C. 114(f)(2)(A). 
Section 112(e)(3) provides for proceedings to be commenced to determine 
rates and terms for licenses to make ephemeral reproductions to 
facilitate certain digital audio transmissions including those made by 
new subscription services. 17 U.S.C. 112(e)(3). The Judges have 
conducted two prior proceedings for five-year rate terms pursuant to 
these provisions. See 72 FR 72253 (December 20, 2007) and 75 FR 14074 
(March 24, 2010). The current rate term ends December 31, 2015.
    Pursuant to section 803(b)(1)(A)(i)(III) of the Copyright Act, the 
Judges published in the Federal Register a notice commencing the rate 
determination proceeding for the license period 2016-2020 for the new 
subscription services defined in 37 CFR 383.2(h) and requesting 
interested parties to submit petitions to participate. See 79 FR 410 
(January 3,

[[Page 2066]]

2014). Petitions to Participate in this proceeding were received from 
Music Reports, Inc., National Music Publishers Association, Sirius XM 
Radio Inc. (``Sirius XM''), Spotify USA Inc., and SoundExchange, Inc.
    The Judges announced the three-month negotiation period, see 17 
U.S.C. 803(b)(3), and directed the participants to submit their written 
direct statements no later than December 1, 2014. On December 1, 2014, 
the remaining participants \1\ filed a motion asking the Judges to stay 
the filing of written direct statements in light of the parties' 
impending settlement. The Judges granted the motion and extended the 
deadline for filing written direct statements to December 12, 2014. See 
Order Granting Extension of Time for Filing Written Direct Statements, 
Docket No. 14-CRB-0002-NSR (2016-2020). On December 12, 2014, 
SoundExchange and Sirius XM filed the settlement that is the subject of 
this notice.
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    \1\ The Judges struck the petitions of two of the other parties, 
and another party withdrew its petition. Joint Motion to Adopt 
Settlement at 2.
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    Section 801(b)(7)(A) authorizes the Judges to adopt rates and terms 
negotiated by ``some or all of the participants in a proceeding at any 
time during the proceeding'' provided the settling parties submit the 
negotiated rates and terms to the Judges for approval. This section 
provides that in such event:

    (i) The Copyright Royalty Judges shall provide to those that 
would be bound by the terms, rates, or other determination set by 
any agreement in a proceeding to determine royalty rates an 
opportunity to comment on the agreement and shall provide to 
participants in the proceeding under section 803(b)(2) that would be 
bound by the terms, rates, or other determination set by the 
agreement an opportunity to comment on the agreement and object to 
its adoption as a basis for statutory terms and rates; and
    (ii) the Copyright Royalty Judges may decline to adopt the 
agreement as a basis for statutory terms and rates for participants 
that are not parties to the agreement, if any participant described 
in clause (i) objects to the agreement and the Copyright Royalty 
Judges conclude, based on the record before them if one exists, that 
the agreement does not provide a reasonable basis for setting 
statutory terms or rates.

17 U.S.C. 801(b)(7)(A).

Rates and terms the Judges adopt pursuant to this provision are binding 
on all sound recording copyright owners and all new subscription 
services performing the licensed sound recordings on digital audio 
channels transmitted by a cable or satellite television distribution 
service to residential customers, bundled with television channels as 
part of a ``basic'' service subscription package and not available 
separately for a separate fee. See 37 CFR 383.2(h).

    The public may comment and object to any or all of the proposed 
regulations contained in this notice. Comments and objections must be 
submitted no later than February 17, 2015.

How To Submit Comments

    Interested members of the public must submit comments to only one 
of the following addresses. If not commenting by email or online, 
commenters must submit an original of their comments, five paper 
copies, and an electronic version on a CD.
    Email: crb@loc.gov; or
    Online: http://www.regulations.gov; or
    U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC 
20024-0977; or
    Overnight service (only USPS Express Mail is acceptable): Copyright 
Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
    Commercial courier: Address package to: Copyright Royalty Board, 
Library of Congress, James Madison Memorial Building, LM-403, 101 
Independence Avenue SE., Washington, DC 20559-6000. Deliver to: 
Congressional Courier Acceptance Site, 2nd Street NE. and D Street NE., 
Washington, DC; or
    Hand delivery: Library of Congress, James Madison Memorial 
Building, LM-401, 101 Independence Avenue SE., Washington, DC 20559-
6000.

List of Subjects in 37 CFR Part 383

    Copyright, Digital audio transmissions, Performance right, Sound 
recordings.

Proposed Regulation

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to amend 37 CFR part 383 as follows:

PART 383--RATES AND TERMS FOR SUBSCRIPTION TRANSMISSIONS AND THE 
REPRODUCTION OF EPHEMERAL RECORDINGS BY NEW SUBSCRIPTION SERVICES

0
1. The authority citation for part 383 continues to read as follows:

    Authority: 17 U.S.C. 112(e), 114, and 801(b)(1).

Title [Amended]

0
2. Amend the title as follows:
    Add the word ``CERTAIN'' before ``NEW SUBSCRIPTION SERVICES''.

Sec.  383.1  [Amended]

0
3. Amend Sec.  383.1 as follows:
0
a. In paragraph (a), remove ``from the inception of the Licensees' 
Services'' and add in its place ``January 1, 2016,'' and remove 
``2015'' and add in its place ``2020''; and
0
b. In paragraph (c), add ``voluntary'' before ``license agreements''.

Sec.  383.2  [Amended]

0
4. Amend Sec.  383.2 as follows:
0
a. Remove paragraph (a);
0
b. Redesignate paragraphs (b) through (f) as paragraphs (a) through 
(e);
0
c. In paragraph (b), add ``made under this part pursuant to the 
statutory licenses'' before ``under 17 U.S.C.''; remove ``or'' and add 
in its place ``and''; and remove ``(g)'';
0
d. In paragraph (c), remove ``from the inception of the Licensees' 
Services'' and add in its place ``January 1, 2016''; and remove 
``2015'' and add in its place ``2020'';
0
e. In paragraph (d), remove ``(h)'' and add in its place ``(f)'';
0
f. Remove paragraph (g);
0
g. Redesignate paragraphs (h) through (j) as paragraphs (f) through 
(h); and
0
h. In paragraph (f)(3), remove ``(h)'' and add in its place ``(f)''.

Sec.  383.3  [Amended]

0
5. Amend Sec.  383.3 as follows:
0
a. In paragraph (a), remove ``License'' and add in its place 
``statutory licenses'';
0
b. Revise paragraph (a)(1) to read as follows:
    (1) For Stand-Alone Contracts, the following monthly payment per 
Subscriber to the Service of such Licensee:
    (i) 2016: $0.0179;
    (ii) 2017: $0.0185;
    (iii) 2018: $0.0190;
    (iv) 2019: $0.0196;
    (v) 2020: $0.0202;
0
c. Revise paragraph (a)(2) to read as follows:
    (2) For Bundled Contracts, the following monthly payment per 
Subscriber to the Service of such Licensee:
    (i) 2016: $0.0299;
    (ii) 2017: $0.0308;
    (iii) 2018: $0.0317;
    (iv) 2019: $0.0326;
    (v) 2020: $0.0336; and
0
d. In paragraph (2)(b), Remove ``, but payable pursuant to the 
applicable regulations for all years 2007 and earlier'';

Sec.  383.4  [Amended]

0
6. Amend Sec.  383.4 as follows:
    In paragraph (a), Remove ``2007-2013'' and add in its place ``2013-
2017 and remove ``''2015'' and add in its place ``2020''.

[[Page 2067]]

    Dated: January 6, 2015.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
[FR Doc. 2015-00203 Filed 1-14-15; 8:45 am]
BILLING CODE 1410-72-P
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