This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

32068 

Vol. 83, No. 133 

Wednesday, July 11, 2018 

1See Public Law 102–563, 106 Stat. 4237 (1992). 

2H.R. Rep. No. 102–873(I), at 9 (1992). 

3 17 U.S.C. 1001(3). 

4S. Rep. No. 102–294, at 39 (1992); see also 17 

U.S.C. 1006(a)(1). 

5 17 U.S.C. 1002(a). 

6See Alliance of Artists and Recording Cos. v. 

Gen. Motors Co., 162 F. Supp. 3d 8, 10 (D.D.C. 

2016). 

7See 17 U.S.C. 1003; see also S. Rep. No. 102– 

294, at 39 (‘‘Administration of the royalty system 

is the dual responsibility of the Copyright Office 

and the CRT’’). 

8 17 U.S.C. 1003(b), (c)(1), (c)(3). 

9 Id. at 1005. 

10 Id. at 1006(b). 

11See, e.g., Order Granting Claimants’ Request for 

Partial Distribution of 2005 Through 2008 DART 

Music Funds Royalties, Docket No. 2010–8 CRB DD 

2005–2008 (MW), available at https://www.crb.gov/ 

orders/2011/04411-order-granting-claimantspartial-distribution.pdf (last visited May 16, 2018). 

LIBRARY OF CONGRESS 

Copyright Office 

37 CFR Part 201 

[Docket No. 2018–6] 

Streamlining the Administration of 

DART Royalty Accounts and Electronic 

Royalty Payment Processes 

AGENCY: U.S. Copyright Office, Library 

of Congress. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Copyright Office is 

proposing to establish a regulation 

regarding its procedures for closing out 

royalty payments accounts under 

section 1005, and updating its 

regulations governing online payment 

procedures for cable, satellite, and 

digital audio recording technology 

(‘‘DART’’) statements of account to no 

longer require that payments be made in 

a single lump sum. These amendments 

are intended to improve the efficiency 

of the Copyright Office’s Licensing 

Division operations. 

DATES: Written comments must be 

received no later than 11:59 p.m. 

Eastern Time on August 10, 2018. 

ADDRESSES: For reasons of government 

efficiency, the Copyright Office is using 

the regulations.gov system for the 

submission and posting of public 

comments in this proceeding. All 

comments are therefore to be submitted 

electronically through regulations.gov. 

Specific instructions for submitting 

comments are available on the 

Copyright Office website at https://

www.copyright.gov/rulemaking/ 

dartfunds. If electronic submission of 

comments is not feasible due to lack of 

access to a computer and/or the 

internet, please contact the Office using 

the contact information below for 

special instructions. 

FOR FURTHER INFORMATION CONTACT: 

Regan A. Smith, General Counsel and 

Associate Register of Copyrights, by 

email at regans@copyright.gov, or Jalyce 

Mangum, Attorney-Advisor, by email at 

jmang@copyright.gov. Each can be 

contacted by telephone by calling (202) 

707–8350. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. The Audio Home Recording Act of 

1992 and DART Royalty Funds 

The Audio Home Recording Act of 

1992 (AHRA) 1 amended title 17 to 

‘‘provide a legal and administrative 

framework within which digital audio 

recording technology may be made 

available to consumers,’’ 2 including to 

implement a royalty payment system 

regarding the importation, manufacture, 

and distribution of digital audio 

recording devices or media. Digital 

audio recording devices are defined as 

‘‘any machine or device of a type 

commonly distributed to individuals for 

use by individuals . . . that is capable 

of[] making a digital audio copied 

recording for private use.’’ 3 Congress 

intended ‘‘importers and 

manufacturers’’ to ‘‘bear the cost of 

royalty fees,’’ which would then be 

distributed to owners of the rights to 

musical works and sound recordings.4

The AHRA also requires digital audio 

recording devices to incorporate 

copying controls to prevent piracy of 

digital audio recordings.5

Manufacturers, importers, and 

distributors of devices with proper 

copying controls and who pay royalties 

are not liable for copyright infringement 

to the extent their products are used to 

make copies of sound recordings.6

Congress delegated to the Copyright 

Office and the Copyright Royalty 

Tribunal (‘‘CRT’’)—a predecessor to the 

system administered by the Copyright 

Royalty Judges (‘‘CRJs’’)—authority to 

administer the royalty system under 

chapter 10.7 Under section 1003, the 

importer or manufacturer of a digital 

audio recording device or media must 

file a notice with the Register of 

Copyrights, as well as quarterly and 

annual statements of account with 

respect to distribution, accompanied by 

royalty payments.8 The Register receives 

all royalty payments and, after 

deducting the reasonable costs incurred 

for administering this license, deposits 

the balance with the Treasury of the 

United States.9 These royalty payments 

are divided between a sound recording 

fund and a musical works fund, which 

are in turn subdivided into various 

subfunds, referred to collectively as the 

DART subfunds.10 The royalty 

payments attributed to these subfunds 

are allocated to copyright owners 

pursuant to distribution orders issued in 

proceedings before the CRJs, as 

described in section 1007 and in various 

provisions of chapter 8 of title 17. The 

Licensing Division of the Copyright 

Office administers the DART subfunds 

and distributes them pursuant to the 

CRJs’ distribution orders.11

After the CRJs have issued a final 

distribution order with respect to a 

DART subfund, and the Licensing 

Division has distributed the royalty 

funds pursuant to that order, small 

royalty balances can still be attributed to 

these subfunds unless they have been 

formally closed out by the Copyright 

Office. These attributions can occur as 

a result of subsequent deposits made by 

payees, or, more often, in the course of 

routine review and adjustments made in 

the years following each appropriation, 

for example, when anticipated contract 

expenditures or other overhead 

expenses come in slightly under budget. 

Maintaining these small amounts in 

separate funds creates administrative 

expenses for the Licensing Division, and 

the transaction costs associated with 

distributing such small amounts of 

money can exceed the amount of money 

remaining in these accounts. Under 

section 1005, the Copyright Office may, 

‘‘in the Register’s discretion,’’ close out 

the royalty payments account for a 

calendar year four years after the close 

of that year, and attribute ‘‘any funds 

remaining in [the] account and any 

subsequent deposits that would 

otherwise be attributable to that 


daltland on DSKBBV9HB2PROD with PROPOSALS
Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Proposed Rules 32069 

12 17 U.S.C. 1005. 

13See 17 U.S.C. 111(d)(1), 119(b)(1), 122(a)(5), 

1003(c). 

14 37 CFR 201.11(f)(1), 201.17(k)(1), 201.28(h)(1). 

15 Id. 

16Electronic Payment of Royalties, 71 FR 45739 

(Aug. 10, 2006). 

17Statutory Cable, Satellite, and DART License 

Reporting Practices, 82 FR 56926, 56935–36 (Dec. 

1, 2017). 

18Statutory Cable, Satellite, and DART License 

Reporting Practices, 83 FR 26229 (Jun. 6, 2018). 

1Petition of the United States Postal Service for 

the Initiation of a Proceeding to Consider Proposed 

Changes in Analytical Principles (Proposal Seven), 

June 29, 2018 (Petition). 

calendar year as attributable to the 

succeeding calendar year.’’ 12 In 

practice, the Register has not previously 

established a procedure to exercise this 

discretion. The Copyright Office now 

proposes to close out funds or subfunds 

at any time four years after the close of 

the calendar year for a given fund, if 

that fund is subject to a final 

distribution order. In accordance with 

section 1005, the Register will treat any 

funds remaining in such account or 

subsequent deposits as attributable to 

the closest succeeding calendar year. 

The Office proposes to codify this 

practice in its proposed rule, and seeks 

comment on this proposal. 

B. Payment of Royalty Fees by 

Electronic Funds Transfer 

The Licensing Division administers 

various statutory licensing schemes, 

including those requiring the 

submission of statements of account by 

cable systems, satellite carriers, and 

manufacturers or importers of digital 

audio recording devices and media.13

Pursuant to its statutory authority, the 

Copyright Office has set out the 

requirements for payment of royalty fees 

under each of these statutory licenses by 

regulation.14 One such requirement for 

all of these statutory licenses is that 

‘‘[a]ll royalty fees shall be paid by a 

single electronic funds transfer.’’ 15 This 

language became effective in 2006, as 

part of the final rule requiring remitters 

to pay royalty payments by electronic 

funds transfer (‘‘EFT’’).16

In practice, however, the Office has 

found that the requirement that 

remitters make royalty payments for 

multiple statements of account in a 

single, lump sum payment is 

unnecessarily restrictive and has 

hampered ongoing modernization 

efforts. Accordingly, the Office proposes 

to remove the requirement that filers 

submit multiple SOAs in a single EFT 

payment for the relevant statutory 

licenses, specifically, by amending 37 

CFR 201.11(f)(1), 201.17(k)(1), and 

201.28(h)(1) to remove the requirement 

that royalty fees must be paid in ‘‘a 

single’’ payment. The current regulatory 

requirement that funds be submitted 

through EFT will remain in place. 

Because the Office seeks to implement 

this reform expeditiously for reasons of 

administrative efficiency, it is 

separating this minor proposed change 

from a larger ongoing rulemaking, 

noticed in December 2017, that 

proposes to address a wider and more 

complex set of issues related to 

statement of account reporting practices, 

particularly the section 111 license for 

cable systems.17 The Office has 

extended the public comment period for 

that December 2017 NPRM to October 4, 

2018.18 Meanwhile, while the change 

removing the requirement that royalty 

fees must be paid in ‘‘a single’’ payment 

is intended to be technical, the Office 

solicits public comment on this discrete 

issue as part of this current rulemaking. 

List of Subjects in 37 CFR Part 201 

Copyright, General provisions. 

Proposed Regulations 

For the reasons set forth in the 

preamble, the Copyright Office proposes 

amending 37 CFR part 201 as follows: 

PART 201—GENERAL PROVISIONS 

■ 1. The authority citation for part 201 

continues to read as follows: 

Authority: 17 U.S.C. 702. 

§ 201.11 [Amended] 

■ 2. Amend § 201.11 by removing ‘‘a 

single’’ from paragraph (f)(1). 

§ 201.17 [Amended] 

■ 3. Amend § 201.17 by removing ‘‘a 

single’’ from paragraph (k)(1) 

introductory text. 

§ 201.28 [Amended] 

■ 4. Amend § 201.28 by removing ‘‘a 

single’’ from paragraph (h)(1) 

introductory text. 

■ 5. Add § 201.31 to read as follows: 

§ 201.31 Procedures for closing out 

royalty payments accounts in accordance 

with the Audio Home Recording Act. 

(a) General. This section prescribes 

rules pertaining to the close out of 

royalty payments accounts in 

accordance with 17 U.S.C. 1005. 

(b) In the Register’s discretion, four 

years after the close of any calendar 

year, the Register of Copyrights may 

close out the royalty payments account 

for that calendar year, including any 

sub-accounts, that are subject to a final 

distribution order under which royalty 

payments have been disbursed. 

Following closure of an account, the 

Register will treat any funds remaining 

in that account, or subsequent deposits 

that would otherwise be attributable to 

that calendar year, as attributable to the 

succeeding calendar year. 

Dated: July 2, 2018. 

Regan A. Smith, 

General Counsel and Associate Register of 

Copyrights. 

[FR Doc. 2018–14543 Filed 7–10–18; 8:45 am] 

BILLING CODE 1410–30–P 

POSTAL REGULATORY COMMISSION 

39 CFR Part 3050 

[Docket No. RM2018–10; Order No. 4696] 

Periodic Reporting 

AGENCY: Postal Regulatory Commission. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Commission is 

acknowledging a recent filing requesting 

the Commission initiate an informal 

rulemaking proceeding to consider 

changes to an analytical method for use 

in periodic reporting (Proposal Seven). 

This document informs the public of the 

filing, invites public comment, and 

takes other administrative steps. 

DATES: Comments are due: September 5, 

2018. 

ADDRESSES: Submit comments 

electronically via the Commission’s 

Filing Online system at http://

www.prc.gov. Those who cannot submit 

comments electronically should contact 

the person identified in the FOR FURTHER

INFORMATION CONTACT section by 

telephone for advice on filing 

alternatives. 

FOR FURTHER INFORMATION CONTACT: 

David A. Trissell, General Counsel, at 

202–789–6820. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Introduction 

II. Proposal Seven 

III. Notice and Comment 

IV. Ordering Paragraphs 

I. Introduction 

On June 29, 2018, the Postal Service 

filed a petition pursuant to 39 CFR 

3050.11 requesting that the Commission 

initiate a rulemaking proceeding to 

consider changes to analytical 

principles relating to periodic reports.1

The Petition identifies the proposed 

analytical changes filed in this docket as 

Proposal Seven. 

II. Proposal Seven 

Background. The Proposal Seven 

objective is to ‘‘reorganize Cost Segment 

3 and certain mail processing cost pools 


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