[Federal Register Volume 89, Number 198 (Friday, October 11, 2024)]
[Proposed Rules]
[Pages 82543-82546]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23426]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 380

[Docket No 23-CRB-0012-WR (2026-2030)]


Determination of Rates and Terms for Digital Performance of Sound 
Recordings and Making of Ephemeral Copies To Facilitate Those 
Performances (Web VI)

AGENCY: Copyright Royalty Board (CRB), Library of Congress.

ACTION: Proposed rule related to noncommercial educational webcasters.

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SUMMARY: The Copyright Royalty Judges are publishing for comment 
proposed regulations governing the rates and terms for the digital 
performance of sound recordings by noncommercial educational webcasters 
and for the making of ephemeral recordings necessary for the 
facilitation of such transmissions for the period commencing January 1, 
2026, and ending on December 31, 2030.

DATES: Comments and objections, if any, are due November 12, 2024.

ADDRESSES: You may submit comments using eCRB, the Copyright Royalty 
Board's online electronic filing application, at https://app.crb.gov/.
    Instructions: To send your comment through eCRB, if you don't have 
a user account, you will first need to register for an account and wait 
for your registration to be approved. Approval of user accounts is only 
available during business hours. Once you have an approved account, you 
can only sign in and file your comment after setting up multi-factor 
authentication, which can be done at any time of day. All comments must 
include the Copyright Royalty Board name and the docket number for this 
proposed rule. All properly filed comments will appear without change 
in eCRB at https://app.crb.gov, including any personal information 
provided.
    Docket: For access to the docket to read submitted background 
documents or comments, go to eCRB, the Copyright Royalty Board's 
electronic filing and case management system, at https://app.crb.gov/, 
and search for docket number 23-CRB-0012-WR (2026-2030).

FOR FURTHER INFORMATION CONTACT: Anita Brown, CRB Program Specialist, 
at (202) 707-7658 or <a href="/cdn-cgi/l/email-protection#bddecfdffdd1d2de93dad2cb"><span class="__cf_email__" data-cfemail="17746575577b787439707861">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Background

    Section 114 of the Copyright Act, title 17 of the United States 
Code, provides a statutory license that allows for the public 
performance of sound recordings by means of a digital audio 
transmission by, among others, eligible nonsubscription transmission 
services. 17 U.S.C. 114(f). For purposes of the section 114 license, an 
``eligible nonsubscription transmission'' is a noninteractive digital 
audio transmission that does not require a subscription for receiving 
the transmission. The transmission must also be made as part of a 
service that provides audio programming consisting in whole or in part 
of performances of sound recordings the purpose of which is to provide 
audio or other entertainment programming, but not to sell, advertise, 
or promote particular goods or services. See 17 U.S.C. 114(j)(6).
    Services using the section 114 license may need to make one or more 
temporary or ``ephemeral'' copies of a sound recording to facilitate 
the transmission of that recording. The section 112 statutory license 
allows for the making of these ephemeral reproductions. 17 U.S.C. 
112(e).
    Chapter 8 of the Copyright Act requires the Judges to conduct 
proceedings every five years to determine the rates and terms for the 
sections 114 and 112 statutory licenses. 17 U.S.C. 801(b)(1), 
804(b)(3)(A). The current proceeding commenced in January 2024 for 
rates and terms that will become effective on January 1, 2026, and end 
on December 31, 2030. Pursuant to section 804(b)(3)(A), the Judges 
published in the Federal Register a notice commencing the proceeding 
and requesting that interested parties submit their petitions to 
participate. 89 FR 812 (Jan. 5, 2024). SoundExchange, Inc. 
(``SoundExchange''), and College Broadcasters, Inc. (``CBI'') each 
filed Petitions to Participate, as did others.
    On September 13, 2024, the Copyright Royalty Judges (Judges) 
received a joint motion from SoundExchange and CBI to adopt a partial 
settlement of their interests regarding Web VI rates and terms for 
2026-2030 and seeking approval of that partial settlement. Joint Motion 
to Adopt Partial Settlement, Docket No. 23-CRB-0012-WR (2026-2030). 
Their interests concern the rule setting copyright royalty minimum fees 
and terms that the Judges will establish for compulsory copyright 
licenses for certain internet transmissions of sound recordings by 
college radio stations and other noncommercial educational webcasters 
for the period from January 1, 2026, through December 31, 2030. 
SoundExchange represents the interests of sound recording copyright 
owners and performers. CBI represents the interests of users of the 
copyrighted material which users include college, university, and high 
school radio and television stations and other electronic media 
organizations. The Judges hereby publish the proposal and request 
comments from the public.

Statutory Timing of Adoption of Rates and Terms

    Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to 
adopt royalty rates and terms negotiated by ``some or all of the 
participants in a proceeding at any time during the proceeding'' 
provided they are submitted to the Judges for approval. The Judges must 
provide ``an opportunity to comment on the agreement'' to participants 
and non-participants in the rate proceeding who ``would be bound by the 
terms, rates, or other determination set by any agreement. . . .'' 17 
U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may also 
``object to [the agreement's] adoption as a basis for statutory terms 
and rates.'' Id.
    The Judges ``may decline to adopt the agreement as a basis for 
statutory terms and rates for participants that are not parties to the 
agreement,'' only ``if any participant [in the proceeding] objects to 
the agreement and the [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)(ii), or where the negotiated agreement includes provisions 
that are contrary to the provisions of the applicable license(s) or 
otherwise contrary to statutory law. See Scope of the Copyright Royalty 
Judges Authority to Adopt Confidentiality Requirements upon Copyright 
Owners within a Voluntarily Negotiated License Agreement, 78 FR 47421, 
47422 (Aug. 5,

[[Page 82544]]

2013), citing 74 FR 4537, 4540 (Jan. 26, 2009).
    Any rates and terms adopted pursuant to this provision would be 
binding on all copyright owners of sound recordings, college radio 
stations, and other noncommercial educational webcasters performing the 
sound recordings for the license period 2026-2030.

Proposed Adjustments to Rates and Terms

    According to SoundExchange and CBI, the agreement generally 
continues in effect the current provisions of 37 CFR part 380, subpart 
C, which were themselves adopted pursuant to 17 U.S.C. 801(b)(7)(A) as 
part of the Web V proceeding, with four primary changes: (1) the 
minimum fee applicable to noncommercial educational webcasters will 
increase by $50 per year throughout the rate period; (2) the threshold 
for usage covered by the minimum fee is increased from 159,140 
Aggregate Tuning Hours (``ATH'') to 160,000 ATH; (3) the reporting and 
payment period applicable in the event a Noncommercial Educational 
Webcaster makes total transmissions in excess of 160,000 ATH in a given 
month is reduced from 45 days to 30 days; and (4) a clarification 
concerning the counting of channels and stations has been added. Joint 
Motion at 6.
    Those who would be bound by the terms, rates, or other 
determination set by the agreement may comment on, and proceeding 
participants may object to, any or all of the proposed regulations 
contained in this document. Such comments and objections must be 
submitted no later than November 12, 2024.

List of Subjects in 37 CFR Part 380

    Copyright, Sound recordings, Webcasters.

Proposed Regulations

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to amend 37 CFR part 380 as follows:

PART 380--RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE 
NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE 
MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS

0
1. The authority citation for part 380 continues to read as follows:

    Authority: 17 U.S.C. 112(e), 114(f), 804(b)(3).

0
2. Revise subpart C to read as follows:
Subpart C--Noncommercial Educational Webcasters
Sec.
380.20 Definitions.
380.21 Royalty fees for the public performance of sound recordings 
and for ephemeral recordings.
380.22 Terms for making payment of royalty fees and statements of 
account.


Sec.  380.20  Definitions.

    For purposes of this subpart, the following definitions apply, as 
well as those set forth in subpart A of this part:
    Educational Transmission means an eligible nonsubscription 
transmission (as defined in 17 U.S.C. 114(j)(6)) made by a 
Noncommercial Educational Webcaster over the internet.
    Noncommercial Educational Webcaster means a noncommercial webcaster 
(as defined in 17 U.S.C. 114(f)(4)(E)(i)) that:
    (1) Has obtained a compulsory license under 17 U.S.C. 112(e) and 
114 and the implementing regulations therefor to make Educational 
Transmissions and related Ephemeral Recordings;
    (2) Complies with all applicable provisions of Sections 112(e) and 
114 and applicable regulations in 37 CFR part 380;
    (3) Is directly operated by, or is affiliated with and officially 
sanctioned by, and the digital audio transmission operations of which 
are staffed substantially by students enrolled at, a domestically 
accredited primary or secondary school, college, university or other 
post-secondary degree-granting educational institution;
    (4) Is not a ``public broadcasting entity'' (as defined in 17 
U.S.C. 118(f)) qualified to receive funding from the Corporation for 
Public Broadcasting pursuant to its criteria; and
    (5) Takes affirmative steps not to make total transmissions in 
excess of 160,000 Aggregate Tuning Hours (ATH) on any individual 
channel or station in any month, if in any previous calendar year it 
has made total transmissions in excess of 160,000 ATH on any individual 
channel or station in any month.


Sec.  380.21  Royalty fees for the public performance of sound 
recordings and for ephemeral recordings.

    (a) Minimum fee for eligible Noncommercial Educational Webcasters. 
Each Noncommercial Educational Webcaster that did not exceed 160,000 
total ATH for any individual channel or station for more than one 
calendar month in the immediately preceding calendar year and does not 
expect to make total transmissions in excess of 160,000 ATH on any 
individual channel or station in any calendar month during the 
applicable calendar year shall pay an annual, nonrefundable minimum fee 
in the amount set forth in paragraphs (a)(1) through (5) of this 
section (the ``Minimum Fee'') for each of its individual channels, 
including each of its individual side channels, and each of its 
individual stations, through which (in each case) it makes Educational 
Transmissions, for each calendar year it makes Educational 
Transmissions subject to this subpart. For clarity, each individual 
stream (e.g., HD radio side channels, different stations owned by a 
single licensee) will be treated separately and be subject to a 
separate Minimum Fee. However, all of the streams of Digital Audio 
Transmissions of music programming by a Noncommercial Educational 
Webcaster, or by a group of affiliated Noncommercial Educational 
Webcasters, that are the same or have only immaterial variations (e.g., 
differences in station identification, acknowledgement of sponsors or 
occasional substitute programming) shall be treated as part of one 
channel or station for purposes of this section. For this purpose, two 
Noncommercial Educational Webcasters shall be considered affiliates if 
one is controlling, controlled by, or under common control with the 
other. This principle applies whether the streams are offered from only 
a single outlet or through multiple outlets (e.g., websites, broadcast 
radio station simulcasts, aggregators, mobile applications or other 
online locations where listeners can access music streaming). The 
Minimum Fee shall constitute the annual per channel or per station 
royalty for all Educational Transmissions totaling not more than 
160,000 ATH in a month on any individual channel or station, and for 
Ephemeral Recordings to enable such Educational Transmissions. In 
addition, a Noncommercial Educational Webcaster electing the reporting 
waiver described in Sec.  380.22(d)(1) shall pay a $100 annual fee (the 
``Proxy Fee'') to the Collective (for purposes of this subpart, the 
term ``Collective'' refers to SoundExchange, Inc.). The Minimum Fee for 
each year of the royalty period is:
    (1) 2026: $800;
    (2) 2027: $850;
    (3) 2028: $900;
    (4) 2029: $950; and
    (5) 2030: $1,000.
    (b) Consequences of unexpectedly exceeding the ATH cap. In the case 
of a Noncommercial Educational Webcaster eligible to pay royalties 
under paragraph (a) of this section that unexpectedly makes total 
transmissions

[[Page 82545]]

in excess of 160,000 ATH on any individual channel or station in any 
calendar month during the applicable calendar year:
    (1) The Noncommercial Educational Webcaster shall, for such month 
and the remainder of the calendar year in which such month occurs, pay 
royalties in accordance, and otherwise comply, with the provisions of 
subpart B of this part applicable to Noncommercial Webcasters;
    (2) The Minimum Fee paid by the Noncommercial Educational Webcaster 
for such calendar year will be credited to the amounts payable under 
the provisions of subpart B of this part applicable to Noncommercial 
Webcasters; and
    (3) The Noncommercial Educational Webcaster shall, within 30 days 
after the end of each month, notify the Collective if it has made total 
transmissions in excess of 160,000 ATH on a channel or station during 
that month; pay the Collective any amounts due under the provisions of 
subpart B of this part applicable to Noncommercial Webcasters; and 
provide the Collective a statement of account pursuant to subpart A of 
this part.
    (c) Royalties for other Noncommercial Educational Webcasters. A 
Noncommercial Educational Webcaster that is not eligible to pay 
royalties under paragraph (a) of this section shall pay royalties in 
accordance, and otherwise comply, with the provisions of subpart B of 
this part applicable to Noncommercial Webcasters.
    (d) Estimation of performances. In the case of a Noncommercial 
Educational Webcaster that is required to pay royalties under paragraph 
(b) or (c) of this section on a per-Performance basis, that is unable 
to calculate actual total Performances, and that is not required to 
report actual total performances under Sec.  380.22(d)(3), the 
Noncommercial Educational Webcaster may pay its applicable royalties on 
an ATH basis, provided that the Noncommercial Educational Webcaster 
shall calculate such royalties at the applicable per-Performance rates 
based on the assumption that the number of sound recordings performed 
is 12 per hour. The Collective may distribute royalties paid on the 
basis of ATH hereunder in accordance with its generally applicable 
methodology for distributing royalties paid on such basis. In addition, 
and for the avoidance of doubt, a Noncommercial Educational Webcaster 
offering more than one channel or station shall pay per-Performance 
royalties on a per-channel or -station basis.
    (e) Allocation between ephemeral recordings and performance royalty 
fees. The Collective must credit 5% of all royalty payments as payment 
for Ephemeral Recordings and credit the remaining 95% to section 114 
royalties. All Ephemeral Recordings that a Licensee makes which are 
necessary and commercially reasonable for making Educational 
Transmissions are included in the 5%.


Sec.  380.22  Terms for making payment of royalty fees and statements 
of account.

    (a) Payment to the Collective. A Noncommercial Educational 
Webcaster shall make the royalty payments due under Sec.  380.21 to the 
Collective.
    (b) Minimum fee. Noncommercial Educational Webcasters shall submit 
the Minimum Fee, and Proxy Fee if applicable (see paragraph (d) of this 
section), accompanied by a statement of account, by January 31st of 
each calendar year, except that payment of the Minimum Fee, and Proxy 
Fee if applicable, by a Noncommercial Educational Webcaster that was 
not making Educational Transmissions or Ephemeral Recordings pursuant 
to the licenses in 17 U.S.C. 114 and/or 17 U.S.C. 112(e) as of January 
31st of each calendar year but begins doing so thereafter shall be due 
by the 30th day after the end of the month in which the Noncommercial 
Educational Webcaster commences doing so. At the same time the 
Noncommercial Educational Webcaster must identify all its stations 
making Educational Transmissions and identify which of the reporting 
options set forth in paragraph (d) of this section it elects for the 
relevant year (provided that it must be eligible for the option it 
elects).
    (c) Statements of account. Any payment due under paragraph (a) of 
this section shall be accompanied by a corresponding statement of 
account on a form provided by the Collective. A statement of account 
shall contain the following information:
    (1) The name of the Noncommercial Educational Webcaster, exactly as 
it appears on the notice of use, and if the statement of account covers 
a single station only, the call letters or name of the station;
    (2) The name, address, business title, telephone number, facsimile 
number (if any), electronic mail address (if any) and other contact 
information of the person to be contacted for information or questions 
concerning the content of the statement of account;
    (3) The signature of a duly authorized representative of the 
applicable educational institution;
    (4) The printed or typewritten name of the person signing the 
statement of account;
    (5) The date of signature;
    (6) The title or official position held by the person signing the 
statement of account;
    (7) A certification of the capacity of the person signing; and
    (8) A statement to the following effect:
    ``I, the undersigned duly authorized representative of the 
applicable educational institution, have examined this statement of 
account; hereby state that it is true, accurate, and complete to my 
knowledge after reasonable due diligence; and further certify that the 
licensee entity named herein qualifies as a Noncommercial Educational 
Webcaster for the relevant year, and did not exceed 160,000 total ATH 
in any month of the prior year for which the Noncommercial Educational 
Webcaster did not submit a statement of account and pay any required 
additional royalties.''
    (d) Reporting by Noncommercial Educational Webcasters in general--
(1) Reporting waiver. In light of the unique business and operational 
circumstances with respect to Noncommercial Educational Webcasters, and 
for the purposes of this subpart only, a Noncommercial Educational 
Webcaster that did not exceed 80,000 total ATH for any individual 
channel or station for more than one calendar month in the immediately 
preceding calendar year and that does not expect to exceed 80,000 total 
ATH for any individual channel or station for any calendar month during 
the applicable calendar year may elect to pay to the Collective a 
nonrefundable, annual Proxy Fee of $100 in lieu of providing reports of 
use for the calendar year pursuant to the regulations at Sec.  370.4 of 
this chapter. In addition, a Noncommercial Educational Webcaster that 
unexpectedly exceeded 80,000 total ATH on one or more channels or 
stations for more than one month during the immediately preceding 
calendar year may elect to pay the Proxy Fee and receive the reporting 
waiver described in this paragraph (d)(1) during a calendar year, if it 
implements measures reasonably calculated to ensure that it will not 
make Educational Transmissions exceeding 80,000 total ATH during any 
month of that calendar year. The Proxy Fee is intended to defray the 
Collective's costs associated with the reporting waiver in this 
paragraph (d)(1), including development of proxy usage data. The Proxy 
Fee shall be paid by the date specified in paragraph (b) of this 
section for paying the Minimum Fee for the applicable calendar year and

[[Page 82546]]

shall be accompanied by a certification on a form provided by the 
Collective, signed by a duly authorized representative of the 
applicable educational institution, stating that the Noncommercial 
Educational Webcaster is eligible for the Proxy Fee option because of 
its past and expected future usage and, if applicable, has implemented 
measures to ensure that it will not make excess Educational 
Transmissions in the future.
    (2) Sample-basis reports. A Noncommercial Educational Webcaster 
that did not exceed 160,000 total ATH for any individual channel or 
station for more than one calendar month in the immediately preceding 
calendar year and that does not expect to exceed 160,000 total ATH for 
any individual channel or station for any calendar month during the 
applicable calendar year may elect to provide reports of use on a 
sample basis (two weeks per calendar quarter) in accordance with the 
regulations at Sec.  370.4 of this chapter, except that, 
notwithstanding Sec.  370.4(d)(2)(vi) of this chapter, such an electing 
Noncommercial Educational Webcaster shall not be required to include 
ATH or actual total performances and may in lieu thereof provide 
channel or station name and play frequency. Notwithstanding the 
preceding sentence, a Noncommercial Educational Webcaster that is able 
to report ATH or actual total performances is encouraged to do so. 
These reports of use shall be submitted to the Collective no later than 
January 31st of the year immediately following the year to which they 
pertain.
    (3) Census-basis reports. (i) If any of the conditions in 
paragraphs (d)(3)(i)(A) through (C) of this section is satisfied, a 
Noncommercial Educational Webcaster must report pursuant to paragraph 
(d)(3) of this section:
    (A) The Noncommercial Educational Webcaster exceeded 160,000 total 
ATH for any individual channel or station for more than one calendar 
month in the immediately preceding calendar year;
    (B) The Noncommercial Educational Webcaster expects to exceed 
160,000 total ATH for any individual channel or station for any 
calendar month in the applicable calendar year; or
    (C) The Noncommercial Educational Webcaster otherwise does not 
elect to be subject to paragraph (d)(1) or (2) of this section.
    (ii) A Noncommercial Educational Webcaster required to report 
pursuant to paragraph (d)(3)(i) of this section shall provide reports 
of use to the Collective quarterly on a census reporting basis in 
accordance with Sec.  370.4 of this chapter, except that, 
notwithstanding Sec.  370.4(d)(2), such a Noncommercial Educational 
Webcaster shall not be required to include ATH or actual total 
performances, and may in lieu thereof provide channel or station name 
and play frequency, during the first calendar year it reports in 
accordance with this paragraph (d)(3). For the avoidance of doubt, 
after a Noncommercial Educational Webcaster has been required to report 
in accordance with paragraph (d)(3)(i) of this section for a full 
calendar year, it must thereafter include ATH or actual total 
Performances in its reports of use. All reports of use under paragraph 
(d)(3)(i) of this section shall be submitted to the Collective no later 
than the 30th day after the end of each calendar quarter.
    (e) Server logs. Noncommercial Educational Webcasters shall retain 
for a period of no less than three full calendar years server logs 
sufficient to substantiate all information relevant to eligibility, 
rate calculation and reporting under this subpart. To the extent that a 
third-party Web hosting or service provider maintains equipment or 
software for a Noncommercial Educational Webcaster and/or such third 
party creates, maintains, or can reasonably create such server logs, 
the Noncommercial Educational Webcaster shall direct that such server 
logs be created and maintained by said third party for a period of no 
less than three full calendar years and/or that such server logs be 
provided to, and maintained by, the Noncommercial Educational 
Webcaster.
    (f) Terms in general. Subject to the provisions of this subpart, 
terms governing late fees, distribution of royalties by the Collective, 
unclaimed funds, record retention requirements, treatment of Licensees' 
confidential information, audit of royalty payments and distributions, 
and any definitions for applicable terms not defined in this subpart 
shall be those set forth in subpart A of this part.

    Dated October 4, 2024.
David P. Shaw,
Chief Copyright Royalty Judge.
[FR Doc. 2024-23426 Filed 10-10-24; 8:45 am]
BILLING CODE 1410-72-P


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