20428 Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices

Good cause is hereby found for not

utilizing notice and public comment

procedure thereon prior to the issuance

of these determinations as prescribed in

5 U.S.C. 553 and not providing for delay

in the effective date as prescribed in that

section, because the necessity to issue

current construction industry wage

determinations frequently and in large

volume causes procedures to be

impractical and contrary to the public

interest.

General wage determination

decisions, and modifications and

supersedeas decisions thereto, contain

no expiration dates and are effective

from their date of notice in the Federal

Register, or on the date written notice

is received by the agency, whichever is

earlier. These decisions are to be used

in accordance with the provisions of 29

CFR parts 1 and 5. Accordingly, the

applicable decision, together with any

modifications issued, must be made a

part of every contract for performance of

the described work within the

geographic area indicated as required by

an applicable Federal prevailing wage

law and 29 CFR part 5. The wage rates

and fringe benefits, notice of which is

published herein, and which are

contained in the Government Printing

Office (GPO) document entitled

‘‘General Wage Determinations Issued

Under the Davis-Bacon and Related

Acts,’’ shall be the minimum paid by

contractors and subcontractors to

laborers and mechanics.

Any person, organization, or

governmental agency having an interest

in the rates determined as prevailing is

encouraged to submit wage rate and

fringe benefit information for

consideration by the Department.

Further information and selfexplanatory forms for the purpose of

submitting this data may be obtained by

writing to the U.S. Department of Labor,

Employment Standards Administration,

Wage and Hour Division, Division of

Wage Determinations, 200 Constitution

Avenue, N.W., Room S–3014,

Washington, D.C. 20210.

Modifications to General Wage

Determination Decisions

The number of decisions listed in the

Government Printing Office document

entitled ‘‘General Wage Determinations

Issued Under the Davis-Bacon and

Related Acts’’ being modified are listed

by Volume and State. Dates of

publication in the Federal Register are

in parentheses following the decisions

being modified.

Volume I

None.

Volume II

None.

Volume III

None.

Volume IV

None.

Volume V

None.

Volume VI

None.

Volume VII

None.

General Wage Determination

Publication

General wage determinations issued

under the Davis-Bacon and Related

Acts, including those noted above, may

be found in the Government Printing

Office (GPO) document entitled

‘‘General Wage Determinations Issued

Under the Davis-Bacon and Related

Acts.’’ This publication is available at

each of the 50 Regional Government

Depository Libraries and many of the

1,400 Government Depository Libraries

across the country.

The general wage determinations

issued under the Davis-Bacon and

Related Acts are available electronically

by subscription to the FedWorld

Bulletin Board System of the National

Technical Information Service (NTIS) of

the U.S. Department of Commerce at

(703) 487–4630.

Hard-copy subscriptions may be

purchased from: Superintendent of

Documents, U.S. Government Printing

Office, Washington, D.C. 20402, (202)

512–1800.

When ordering hard-copy

subscription(s), be sure to specify the

State(s) of interest, since subscriptions

may be ordered for any or all of the

seven separate volumes, arranged by

State. Subscriptions include an annual

edition (issued in January or February)

which includes all current general wage

determinations for the States covered by

each volume. Throughout the remainder

of the year, regular weekly updates are

distributed to subscribers.

Signed at Washington, D.C. this 16th day

of April 1998.

Carl J. Poleskey,

Chief, Branch of Construction Wage

Determinations.

[FR Doc. 98–10634 Filed 4–23–98; 8:45 am]

BILLING CODE 4510–27–M

LIBRARY OF CONGRESS

Copyright Office

[Docket No. 94–3 CARP CD 90–92]

Determination of the Distribution of the

1991 Cable Royalties in the Music

Category

AGENCY: Copyright Office, Library of

Congress.

ACTION: Order.

SUMMARY: The Librarian of Congress,

upon recommendation of the Register of

Copyrights, is announcing resolution of

a Phase II controversy and distribution

of 1991 cable royalty funds in the music

category. The Librarian is adopting the

determination of the Copyright

Arbitration Royalty Panel (CARP).

EFFECTIVE DATE: April 24, 1998.

ADDRESSES: The full text of the CARP’s

report to the Librarian of Congress is

available for inspection and copying

during normal business hours in the

Office of General Counsel, James

Madison Memorial Building, Room LM–

403, First and Independence Avenue,

S.E., Washington, D.C. 20540.

FOR FURTHER INFORMATION CONTACT:

David O. Carson, General Counsel, or

William Roberts, Senior Attorney, P.O.

Box 70977, Southwest Station,

Washington, D.C. 20024. Telephone

(202) 707–8380.

SUPPLEMENTARY INFORMATION:

Recommendation of the Register of

Copyrights

I. Background

Section 111 of the Copyright Act, 17

U.S.C., grants a compulsory copyright

license to cable systems to retransmit

the over-the-air signals of broadcast

stations licensed by the Federal

Communications Commission. Cable

systems submit statements of account

and royalty payments to the Copyright

Office on a semi-annual basis. The

royalties are deposited with the United

States Treasury for subsequent

distribution to owners of copyrighted

works retransmitted by the cable

systems.

Distribution of cable royalty fees is

conducted in two phases. In Phase I, the

fees are divided among categories of

copyright owners. There are currently

eight copyright owner claimant groups

represented in Phase I proceedings:

Program Suppliers (movies and

syndicated television programs); Joint

Sports Claimants (sports programs of the

National Basketball Association, Major

League Baseball, the National Hockey

League, and the National Collegiate

Athletic Association); the National
Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices 20429

1The 4.5% figure was achieved through

settlement negotiations between the Music

Claimants and the other seven claimant groups.

2The remainder of the fees is 4.5% of the total

cable fees collected for 1991 minus, of course,

Cannings’ award.

Association of Broadcasters (broadcast

stations); the Devotional Claimants

(religious programming); the Public

Broadcasting Service (public television);

National Public Radio (public radio); the

Canadian Claimants (Canadian program

owners); and the Music Claimants

(songwriters and music publishers).

Phase II involves distribution of

royalty fees to individual copyright

owners within a category. This

proceeding involves distribution to

claimants within the music category.

On October 28, 1996, the Librarian

announced the final Phase I distribution

of cable royalties collected for 1990,

1991 and 1992. Of the total royalties

collected (more than $500 million),

4.5% of the fees for each year was

distributed to the music category.1 61

FR 55653 (October 28, 1996). Music

Claimants, consisting of the American

Society of Composers, Authors, and

Publishers (ASCAP), Broadcast Music,

Inc. (BMI) and SESAC, Inc. (SESAC),

represented the music category and

received the Phase I royalty distribution

award. Order in Docket No. 93–3 CARP

CD 90–92 (August 3, 1995).

On February 15, 1996, the Library of

Congress published a notice requesting

interested parties to comment on the

existence of Phase II controversies for

distribution of the 1990–1992 cable

royalty funds. 61 FR 6040 (February 15,

1996). The parties who filed comments

and Notices of Intent to Participate

identified two unsettled categories that

would require resolution before a CARP.

The first controversy involved

distribution of the 1991 cable royalty

fees between James Cannings and Can

Can Music (Cannings) and the Music

Claimants. Music Claimants represent

all songwriters and music publishers in

the music category for distribution of

the 1991 cable fees, with the exception

of Cannings. The second controversy

involved distribution of the 1990–1992

cable fees between the National

Association of Broadcasters (NAB) and

the Public Broadcasting Service (PBS).

On June 3, 1997, NAB and PBS notified

the Copyright Office that they had

reached settlement concerning all

matters related to their Phase II dispute

over distribution of the 1990–1992

royalty funds, thus leaving a single

dispute for resolution by a CARP.

On August 28, 1997, the Library

convened a CARP to resolve the dispute

between Cannings and the Music

Claimants for distribution of the 1991

cable fees. 62 FR 45687 (August 28,

1997). After considering the evidence

presented by the parties, the CARP

delivered its written decision to the

Librarian, as required by 17 U.S.C.

802(e), on February 26, 1998. The Panel

awarded Cannings $63.74 and awarded

the remainder of the 1991 fees 2 to the

Music Claimants.

Cannings filed a petition to modify

the decision of the CARP, as permitted

by 37 CFR 251.55(a). The Music

Claimants and Broadcast Music, Inc.

(BMI) filed replies, as permitted by 37

CFR 251.55(b).

Section 802(f) of the Copyright Act

provides that ‘‘[w]ithin 60 days after

receiving the report of a copyright

arbitration royalty panel * * *, the

Librarian of Congress, upon the

recommendation of the Register of

Copyrights, shall adopt or reject the

determination of the arbitration panel.’’

17 U.S.C. 802(f). Today’s order of the

Librarian fulfills this statutory

obligation.

II. The Librarian’s Scope of Review

The Librarian of Congress has, in

previous proceedings, discussed his

narrow scope of review of CARP

determinations. See 62 FR 55742

(October 28, 1997) (satellite rate

adjustment); 52 FR 6558 (February 12,

1997) (DART distribution order); 61 FR

55653 (October 28, 1996) (cable

distribution order). The salient points

regarding the scope of review, however,

merit repeating.

The Copyright Royalty Tribunal

Reform Act of 1993 created a unique

system of review of a CARP’s

determination. Typically, an arbitrator’s

decision is not reviewable, but the

Reform Act created two layers of review

that result in final orders: the Librarian

and the Court of Appeals for the District

of Columbia Circuit. Section 802(f)

directs the Librarian to either accept the

decision of the CARP or reject it. If the

Librarian rejects it, he must substitute

his own determination ‘‘after full

examination of the record created in the

arbitration proceeding.’’ Id. If the

Librarian accepts it, then the

determination of the CARP has become

the determination of the Librarian. In

either case, through issuance of the

Librarian’s Order, it is his decision that

will be subject to review by the Court

of Appeals.

Section 802(f) of the Copyright Act

directs that the Librarian shall adopt the

report of the CARP ‘‘unless the Librarian

finds that the determination is arbitrary

or contrary to the applicable provisions

of this title.’’ Neither the Reform Act nor

its legislative history indicates what is

meant specifically by ‘‘arbitrary,’’ but

there is no reason to conclude that the

use of the term is different from the

‘‘arbitrary’’ standard described in the

Administrative Procedure Act, 5 U.S.C.

706(2)(A).

Review of the case law applying the

APA ‘‘arbitrary’’ standard reveals six

factors or circumstances under which a

court is likely to find that an agency

acted arbitrarily. An agency is generally

considered to be arbitrary when it:

(1) Relies on factors that Congress did

not intend it to consider;

(2) Fails to consider entirely an

important aspect of the problem that it

was solving;

(3) Offers an explanation for its

decision that runs counter to the

evidence presented before it;

(4) Issues a decision that is so

implausible that it cannot be explained

as a product of agency expertise or a

difference of viewpoint;

(5) Fails to examine the data and

articulate a satisfactory explanation for

its action including a rational

connection between the facts found and

the choice made; and

(6) When the agency’s action entails

the unexplained discrimination or

disparate treatment of similarly situated

parties.

Motor Vehicle Mfrs. Ass’n v. State Farm

Mutual Auto Insurance Co., 463 U.S. 29

(1983); Celcom Communications Corp.

v. FCC, 789 F.2d 67 (D.C. Cir. 1986);

Airmark Corp. v. FAA, 758 F.2d 685

(D.C. Cir. 1985).

Given these guidelines for

determining when a determination is

‘‘arbitrary,’’ prior decisions of the Court

of Appeals for the District of Columbia

Circuit reviewing the determinations of

the former Copyright Royalty Tribunal

have been consulted. The decisions of

the Tribunal were reviewed under the

‘‘arbitrary and capricious’’ standard of 5

U.S.C. 706(2)(A) which, as noted above,

appears to be applicable to the

Librarian’s review of the CARP’s

decision.

Review of judicial decisions regarding

Tribunal actions reveals a consistent

theme: while the Tribunal was granted

a relatively wide ‘‘zone of

reasonableness,’’ it was required to

articulate clearly the rationale for its

award of royalties to each claimant. See

Recording Industry Ass’n of America v.

CRT, 662 F.2d 1 (D.C. Cir. 1981);

National Cable Television Ass’n v. CRT,

689 F.2d 1077 (D.C. Cir. 1982); Christian

Broad. Network v. CRT, 720 F.2d 1295

(D.C. Cir. 1983); National Ass’n of

Broadcasters v. CRT, 772 F.2d 922 (D.C.

Cir. 1985). As one panel of the D.C.

Circuit succinctly noted:
20430 Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices

We wish to emphasize * * * that precisely

because of the technical and discretionary

nature of the Tribunal’s work, we must

especially insist that it weigh all the relevant

considerations and that it set out its

conclusions in a form that permits us to

determine whether it has exercised its

responsibilities lawfully * * *

Christian Broad. Network, Inc. v. CRT,

720 F.2d 1295, 1319 (D.C. Cir. 1983),

quoting National Cable Television Ass’n

v. CRT, 689 F.2d 1077, 1091 (D.C. Cir.

1982).

Because the Librarian is reviewing the

CARP decision under the same

‘‘arbitrary’’ standard used by the courts

to review the Tribunal, he must be

presented with a rational analysis of the

CARP’s decision, setting forth specific

findings of fact and conclusions of law.

This requirement of every CARP report

is confirmed by the legislative history to

the Reform Act which notes that a

‘‘clear report setting forth the panel’s

reasoning and findings will greatly

assist the Librarian of Congress.’’ H.R.

Rep. No. 286, at 13 (1993). Thus, to

engage in reasoned decision-making, the

CARP must ‘‘weigh all the relevant

considerations and * * * set out its

conclusions in a form that permits [a

determination of] whether it has

exercised its responsibilities lawfully.’’

National Cable Television Ass’n v. CRT,

689 F.2d 1077, 1091 (D.C. Cir. 1982).

This goal cannot be reached by

‘‘attempt[ing] to distinguish apparently

inconsistent awards with simple,

undifferentiated allusions to a 10,000

page record.’’ Christian Broad. Network,

Inc. v. CRT, 720 F.2d 1295, 1319 (D.C.

Cir. 1983).

It is the task of the Register to review

the report and make her

recommendation to the Librarian as to

whether it is arbitrary or contrary to the

provisions of the Copyright Act and, if

so, whether, and in what manner, the

Librarian should substitute his own

determination.

III. Review of the CARP Report

Section 251.55(a) of the rules provides

that ‘‘[a]ny party to the proceeding may

file with the Librarian of Congress a

petition to modify or set aside the

determination of a Copyright Arbitration

Royalty Panel within 14 days of the

Librarian’s receipt of the panel’s report

of its determination.’’ 37 CFR 251.55(a).

Replies to petitions to modify are due 14

days after the filing of petitions. 37 CFR

251.55(b).

Cannings, who appeared pro se in this

proceeding on behalf of himself and Can

Can Music, filed a petition to modify

requesting that he be awarded his

original claim of $2,400, plus interest.

Music Claimants opposed Cannings’

petition, and requested the Librarian

affirm the decision of the Panel. BMI

also filed a ‘‘supplemental reply,’’

asking the Librarian to clarify a

statement made by the Panel in its

report.

Section 251.55 of the rules assists the

Register of Copyrights in making her

recommendation to the Librarian, and

the Librarian in conducting his review

of the CARP’s decision by allowing the

parties to the proceeding to raise

specific objections to a CARP’s

determination. As required by section

802(f) of the Copyright Act, if the

Librarian determines that the Panel in

this proceeding has acted arbitrarily or

contrary to the provisions of the

Copyright Act, he must ‘‘after full

examination of the record created in the

arbitration proceeding, issue an order

setting the * * * distribution of fees.’’

17 U.S.C. 802(f).

IV. Review and Recommendation of the

Register of Copyrights

A. Determination of the Panel

The Panel’s report articulates both the

legal and factual basis for resolving this

Phase II proceeding. The Copyright Act

does not provide standards for

determining how cable royalty fees are

to be divided among various claimants,

leaving that task instead to individual

CARPs acting ‘‘on the basis of a fully

documented written record, prior

decisions of the Copyright Royalty

Tribunal, prior copyright arbitration

panel determinations, and rulings by the

Librarian of Congress under section

801(c).’’ 17 U.S.C. 802(c). After

examining the ‘‘simulated market’’

approach utilized by the Phase I CARP

to divide the cable royalties among the

various copyright owner categories, the

Panel determined that a similar

approach was warranted in this

proceeding. The Panel stated:

The evidence and arguments presented

here focus essentially on market value.

However, the opportunity for negotiations

concerning what cable systems [sic] operators

would have to pay for those segments of

programs during which the works of each

individual music claimant was performed

has been superseded by the compulsory

licensing system. Therefore it will be our task

to hypothesize as realistic a simulated market

for the works of individual music claimants

as is consistent with the evidence presented.

Panel Report at 7.

After establishing a ‘‘simulated

market’’ approach as its legal basis for

determining the distribution, the Panel

examined the factual basis for Cannings’

and the Music Claimants’ claims to the

1991 cable royalty fees. The Panel

determined Cannings’ claim to rest

upon a single musical composition,

‘‘Misery,’’ that was transmitted on two

occasions in 1991 as part of the ‘‘Joe

Franklin Show’’ on broadcast station

WWOR–TV. With respect to the Music

Claimants, the Panel determined that

they represented all other claimants in

the music category and that, after

determining Cannings’ share of the

royalties, all remaining monies belonged

to the Music Claimants. Id. at 8.

After adopting this approach to the

distribution, the Panel sought a means

for determining Cannings’ share of the

1991 cable royalties. The Panel rejected

Cannings’ claim of $2,400, which was

based upon an independent arbitrator’s

award of $4,800 to Cannings for four

performances of his musical work

‘‘Reggae Christmas’’ on WWOR–TV

during the 1980’s. This private

arbitration award was the result of a

dispute between Cannings and BMI

when Cannings was a member of that

performing rights organization. In

making the award, the independent

arbitrator did not issue a written

statement of his findings of facts or

conclusions, as is required in a CARP

proceeding. The Panel stated:

As a basis for Cannings’ claim in this

proceeding, the arbitration award, confirmed

by the court or not, can carry no weight.

Cannings expressly disavows any claim of

collateral estoppel, but presents the award

‘‘as precedent to support how to calculate his

royalty distribution.’’ However, we cannot

defer to the award. To do so would mean

abdicating our duty under § 802(c) of the

copyright law to act ‘‘on the basis of a fully

documented written record * * *.’’ We

understand this duty to require our own

examination and analysis of the evidence

presented. While Cannings has made certain

representations as to what evidence he

presented to the arbitrator, we have no way

of knowing how the arbitrator evaluated any

of the evidence or what factors he considered

in arriving at his award. We note, however,

that the award was based on performances of

a different song from the one the performance

of which is the basis for the claim involved

here. Were we privy to the arbitrator’s

analysis, we might legitimately assess its

persuasiveness for purposes of this

proceeding. Absent that, deference to his

award would require us simply to adopt the

arbitrator’s ultimate valuation of four

performances of a Cannings’ song. This we

cannot do.

Id. at 10.

The Panel also rejected Cannings’

own analysis of the distribution formula

used by BMI to pay its members for

performances on network television

broadcast stations. Cannings presented a

distribution proposal that purported to

adjust for the difference between the

number of commercial television

stations in the country and the number

of cable systems that carry WWOR-TV.

The Panel concluded that Cannings’
Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices 20431

3The appropriate manner to request modification

of a CARP’s decision or, as in this case, a statement

made by the Panel, is to file a petition to modify

in accordance with § 251.55(a). The purpose of

replies is to allow parties to respond to assertions

and arguments made by those submitting petitions

to modify. BMI’s ‘‘supplemental reply’’ does not

challenge an assertion or argument raised by

Cannings’ petition, but rather challenges a

statement made by the Panel. BMI should,

therefore, have filed a petition to modify. Because

it did not, its ‘‘supplemental reply’’ is improperly

filed.

methodology did not shed light on the

market value of musical performances

on WWOR–TV as retransmitted by cable

systems, because WWOR–TV is not a

network and Cannings did not offer

persuasive evidence that

retransmissions of WWOR–TV are of

equal value to retransmissions of

network stations. Id. at 11.

The Panel also rejected Cannings’

references to his prominence in the

music industry as evidence of market

value, noting that Music Claimants

presented considerable evidence to

rebut such prominence. The Panel

stated that prominence in the music

industry, if any, would only have a

bearing on market value if such

prominence affected a cable system’s

decision to carry WWOR–TV. It

concluded that ‘‘Cannings’’ pre-1991

history of four performances on WWOR

in six years does not suggest that such

a consideration played a meaningful

part here.’’ Id. at 12.

Finally, the Panel asserted that all of

Cannings’ approaches are flawed

because they do not evidence a

consideration of the constraints

imposed on each copyright owner’s

share by the fixed and finite nature of

the fund being shared. Rather, Cannings’

approach is geared toward hypothetical

open market negotiations, and thus is

not reflective of a compulsory license

royalty pool. Id. at 12–13.

The Panel assessed Music Claimants’

assertion that Cannings is entitled to no

more than $9.99 for each of his two

performances on WWOR–TV. Music

Claimants derived this value from a

durational analysis that extrapolated the

value of all musical works aired on

WWOR–TV during 1991 on a per

minute basis. After calculating that each

minute of music on WWOR–TV was

worth $7.49, Music Claimants asserted

that each performance of ‘‘Misery’’ was

worth $9.99, because it lasted one

minute and twenty seconds. The Panel,

however, rejected Music Claimants’

approach:

The durational analysis is neither one that

has been shown to have been used for

distributions nor is there applicable

precedent in contested proceedings for

adopting such an approach. In fact, [Music

Claimants] does not endorse this analysis as

appropriate for resolving any allocation

dispute not arising out of the specific

circumstances of this case, stating rather

faintly that where, as here, only two

performances and a small amount in

controversy are involved, ‘‘the Panel may use

the durational analysis as the basis for

resolving [the] dispute.’’

Id. at 15–16. The Panel also rejected

Music Claimants’ assertion that the

1992–1994 DART distribution

proceeding, Docket No. 95–1 CARP DD

92–94, is precedent for using a

durational analysis, noting that the

mathematical distribution formula used

in that proceeding was consistent with

the Copyright Act’s direction to base

DART distributions upon transmissions

and distributions of sound recordings.

Id. at 17.

The Panel determined that the best

‘‘simulated market’’ for determining

Cannings’ share of the royalties in this

proceeding is ‘‘a market within which

we have evidence that real-life

transactions occur.’’ Id. at 17. The Panel

asserted that the only evidence in the

record of a ‘‘real-life’’ market transaction

for musical works is the methodology

used by BMI for paying its affiliated

songwriters and publishers. BMI paid a

distant signal rate of $14.36 to the

songwriter and to the publisher for a

featured performance on WWOR–TV in

1991. The Panel determined the two

performances of ‘‘Misery’’ to be featured

performances. BMI increased its

standard base rate in the third quarter of

1991, resulting in additional combined

songwriter/publisher rate of $3.15. The

Panel concluded that Cannings was

entitled to $14.36 as a songwriter,

$14.36 as a music publisher, and the

additional combined songwriter/

publisher rate of $3.15, for each of the

performances of ‘‘Misery’’ in 1991. The

total of these two performances

amounted to $63.74, which is what

Cannings would have received from

BMI had he remained a member. Id. at

19. The Panel determined that BMI’s

own distribution methodology was

superior to Music Claimants’ durational

analysis, and rejected Music Claimants’

contention that Cannings should not

have his award calculated in accordance

with BMI’s methodology because he

rejected it while a member of BMI. Id.

at 20.

In awarding Cannings $63.74, the

Panel determined that he was not

entitled to interest because interest ‘‘has

not been awarded in previous Phase II

proceedings,’’ and because the Panel

‘‘found no supportable method to award

or compute interest, nor has Cannings

presented adequate grounds for such an

award.’’ Id. at 21.

B. Petitions To Modify

1. Cannings

Cannings filed a petition to modify

the determination of the CARP. The

Music Claimants did not file a petition

to modify, but did file a reply to

Cannings’ petition. In addition, BMI

filed what it styled as a ‘‘supplemental

reply’’ requesting that the Librarian

modify a certain statement of the Panel

concerning the music durational

analysis that BMI prepared. The Register

recommends that BMI’s ‘‘supplemental

reply’’ be stricken as improperly filed.3

Cannings requests that the Panel’s

award of $63.74 be overturned and that

he be awarded his original claim of

$2,400, plus interest. The principal

basis for his request is the

circumstances surrounding the

independent arbitrator’s award he

received in 1993 from a dispute with

BMI over four performances of another

Cannings’ song, ‘‘Reggae Christmas,’’ on

WWOR–TV during the 1980’s while he

was still a member of BMI. Cannings

received $4,800 in that arbitration

proceeding which, according to his

calculation, means that a single

performance of a Cannings work on

WWOR–TV is worth a minimum of

$1,200. Although Cannings cannot point

to any written determination of his BMI

award that explains the arbitrator’s

reasoning, he argues that the arbitrator

must have accepted in its entirety as

true his evidence and methodology for

calculating the value of his

performances. Cannings’ methodology

consisted of multiplying $1.50, the rate

he submitted that BMI assigns to

featured performances of musical works

on network television, times 3000, the

number of cable systems that Cannings

alleged to be carrying WWOR–TV. He

apparently submitted this methodology

to the independent arbitrator in a June

3, 1993, letter. Cannings asserts that the

Panel in this proceeding ‘‘suppressed’’

the June 3, 1993, letter, even though the

Panel expressly admitted it into

evidence, along with his other

submissions to the independent

arbitrator.

Cannings challenges the Panel’s

assertion that it must formulate a

‘‘simulated market’’ in order to calculate

the value of his Phase II claim. Cannings

asserts that the ‘‘simulated market’’

approach is contrary to CARP

precedent, in contravention of 17 U.S.C.

802(c), though he offers no explanation

as to how or why it is contrary, except

to note that the Phase I CARP in the

1990–1992 cable distribution

proceeding used the same approach in

determining values for programming
20432 Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices

4Cannings’ assertion in his petition to modify

that the evidence he submitted to the independent

arbitrator was ‘‘suppressed’’ in this proceeding is

belied by the fact that the Panel did accept

Cannings’ evidentiary submissions on the BMI

arbitration and addressed them in its decision. See

Panel Report at 9–10.

categories. Cannings also challenges the

Panel’s statement that BMI’s

distribution methodology is a potential

model for determining the simulated

market. Cannings argues that in making

this statement, the Panel acknowledged

that BMI’s methodology did not provide

the complete picture of a simulated

market, and therefore should not be

used at all.

Cannings submits that the Panel

should not have used BMI’s distribution

methodology because the independent

arbitrator did not use it in the 1993

distribution proceeding. He states that

the $4,800 he received from the

arbitrator is the only credible evidence

of market value in this proceeding. In

addition, Cannings asserts that $1.50

was not BMI’s rate for a feature

performance on a commercial station in

1991, though he does not state what he

believes the rate to have been. Cannings

does state that the $1.50 rate includes

BMI’s administrative costs and that,

because he no longer is a BMI member,

the rate should be adjusted upwards.

Cannings, however, does not state what

the proper rate should be.

With respect to the Panel’s

determination not to award Cannings

interest on his claim, Cannings asserts

that 17 U.S.C. 111(d)(2) provides that he

is entitled to interest. Cannings also

cites the provision of the Copyright

Office distribution order (which

distributed the Phase I monies to the

Music Claimants after they notified the

Office that they had reached settlement

with the other Phase I parties) that states

that as a condition of the distribution,

Music Claimants agree to return any

overpaid amounts with interest.

Regarding calculation of the proper

amount of interest owed, Cannings

submits that he asked the Panel to

award him interest from the date of

initial investment with the U.S.

Treasury of the 1991 cable funds by the

Copyright Office, and that he provided

the Panel with an ‘‘Interest Rate Table’’

obtained from the Copyright Office for

each deposit of 1991 cable royalties

made with the Treasury.

Finally, Cannings alleges that he was

a victim of racial bias and

discrimination in this proceeding

because he is black and is a pro se

litigant. He describes the chairperson of

the Panel as acting ‘‘impetuously’’

toward him in the prehearing

conference. No other facts or

circumstances are offered as evidence of

discrimination or bias.

2. Music Claimants Reply

Music Claimants assert that the award

to Cannings is proper and clearly fits

within the ‘‘zone of reasonableness’’

afforded CARP decisions.

Music Claimants state that the Panel

properly rejected reliance upon the

independent arbitration award because

that private arbitration did not set a rate

for distant signal performances on

WWOR, but rather was a private

contractual proceeding between BMI

and Mr. Cannings brought pursuant to

Mr. Cannings’ BMI affiliation

agreement. Music Claimants assert that

the BMI arbitration is not recognized

precedent in CARP proceedings and that

to have blindly followed it would

amount to an abdication of the Panel’s

responsibility to determine the correct

distribution in this proceeding.

Music Claimants assert that Cannings’

methodology for calculating the value of

his two performances on WWOR–TV is

fatally flawed and discriminatory,

because it would result in the value of

a Cannings performance being nearly

forty times the value of an identically

situated BMI affiliate whose work was

performed on WWOR–TV. Music

Claimants also state that the BMI

distribution methodology used by the

Panel in this proceeding is an accurate

representation of market rate, and that it

was correct for the Panel to use the

distribution formula in determining the

‘‘simulated market’’ for works in this

proceeding.

With respect to interest, Music

Claimants argue that the Panel correctly

refused him an interest award because

Cannings failed to present credible

evidence of entitlement. The Copyright

Office ‘‘Interest Rate Table’’ submitted

by Cannings is interest charged to cable

operators for late compulsory license

payments, not interest paid to

individual copyright claimants in Phase

II proceedings.

Finally, Music Claimants state that

Cannings’ charges of bias and

discrimination are outrageous and

unsupportable.

C. Review of the Panel’s Determination

After reviewing the Panel’s report and

record in this proceeding, the Register

concludes that the Panel did not act

arbitrarily or contrary to the provisions

of the Copyright Act in determining the

value of Cannings’ Phase II cable royalty

claim as $63.74. Consequently, the

Register recommends that the Librarian

affirm the $63.74 award to Cannings,

and directs the Music Claimants to pay

him that amount.

1. The Value of Cannings’ Claim

As summarized above, the centerpiece

of Cannings’ claim for $2,400 in Phase

II cable royalties is the BMI arbitration

proceeding involving a total of four

performances of ‘‘Reggae Christmas’’ on

WWOR–TV during the 1980’s. The

Panel rejected the BMI arbitration award

as evidence of the value of a Cannings

performance under the section 111

compulsory license because the BMI

award was issued without explanation,

was not a CARP or Copyright Royalty

Tribunal proceeding, and involved a

different musical work. The Register

finds this determination of the Panel to

be neither arbitrary nor contrary to the

provisions of the Copyright Act. Private

arbitration awards have no precedential

weight in CARP proceedings. See 17

U.S.C. 802(c) (only prior CARP and

Copyright Royalty Tribunal decisions,

and rulings of the Librarian, have

precedential value). The BMI arbitration

award, and the circumstances

surrounding it, are therefore probative

in this proceeding only to the extent

that the award sheds light on the value

of two performances of ‘‘Misery’’ in

1991 on WWOR–TV. The Panel was

well within its discretion to reject the

BMI arbitration award as evidence,

particularly where it involved a

different work, performed in different

years, and was made without any

written explanation.4

The Panel did not act arbitrarily or

contrary to the Copyright Act by

adopting the approach of a ‘‘simulated

market’’ in valuating Cannings’’ claim.

The Copyright Act does not offer

guidance as to how cable compulsory

license revenues are to be divided

among copyright owners. The Phase I

CARP for the distribution of 1991 cable

royalties used a ‘‘simulated market’’

approach in dividing the royalties

among Phase I claimants and, contrary

to Cannings’ assertion, there is no

prohibition on the use of that approach

in Phase II proceedings. In fact, while

not describing it as such, the Copyright

Royalty Tribunal took a decidedly

marketplace value approach in making

its cable Phase II awards. See e.g., 53 FR

7132 (March 4, 1988) (1985 cable Phase

II).

The Panel selected BMI’s internal

distribution methodology as the best

evidence of a simulated market in

valuing the retransmission of musical

works by cable systems. Cannings

contends that the only evidence in the

record of an actual marketplace

transaction involving his works is the

BMI arbitration award. Arbitration

awards are not direct evidence of
Federal Register / Vol. 63, No. 79 / Friday, April 24, 1998 / Notices 20433

marketplace value. If arbitrations are

surrogates for marketplace value at all,

it is only because they become

necessary where the market has failed—

i.e. the buyer and seller are unable to

negotiate the compensation paid. BMI’s

distribution methodology represents a

consensus approach endorsed by

thousands of BMI’s songwriter and

music publisher members. While there

are undoubtably disgruntled BMI

members who feel, like Cannings, that

the compensation paid is too low, this

is not conclusive evidence that BMI’s

distribution methodology is not

probative evidence of the market value

of cable retransmissions of musical

works. The Panel was well within its

discretion to credit BMI’s distribution

methodology and adopt its approach.

With respect to Cannings’ allegations

of racial bias and discrimination,

Cannings has offered no evidence in

support of these contentions, and the

Register cannot find any evidence in the

record suggesting bias or discriminatory

action. Cannings’ charge of ‘‘impetuous’’

behavior on the part of the Chairman of

the Panel towards him during the prehearing conference neither proves nor

suggests improper behavior, and there is

no supportable reason for overturning

the decision of the Panel on these

grounds. If anything, the Panel was

exceedingly flexible and

accommodating in allowing Cannings to

make his case in this proceeding.

In summary, the Register determines

that the Panel did not act arbitrarily or

contrary to the Copyright Act in valuing

Cannings’ Phase II claim at $63.74, and

recommends that the Librarian adopt

this determination.

2. Interest on Cannings’ Award

Cannings requested that he be

awarded interest on his claim,

calculated from deposit of the 1991

cable royalties. Music Claimants assert

that Cannings is not entitled to interest.

The Panel did not award interest

because it could not find any Copyright

Royalty Tribunal precedent for doing so,

and it could not find any ‘‘supportable

method to award or compute interest.’’

Panel Report at 21.

The Register determines that it was

reasonable for the Panel not to award

Cannings interest on his claim. Under

Tribunal precedent, copyright owners

were not entitled to a distribution of

royalties, or any interest that had

accrued on those royalties, until the

Tribunal affirmatively determined their

entitlement. See 50 FR 6028 (February

13, 1985) (1979–82 cable distribution)

(Tribunal not ‘‘responsible for time

value lost on an allocation which had

not yet been determined’’); 53 FR 7132

(March 4, 1988) (1985 Phase II cable

distribution) (no interest given on dollar

award to Asociacion de Compositores y

Editores de Musica Latinoamericana).

Consequently, there are no established

grounds or methodology for awarding

interest. Because there is no

requirement that the Panel assess

interest in this proceeding, the Register

cannot conclude that the Panel acted

arbitrarily or contrary to the Copyright

Act by not awarding Cannings interest

on his claim.

3. Award to Cannings

By Order dated August 3, 1995, the

Copyright Office distributed the full

amount of the music category’s Phase I

entitlement (4.5% of the total 1991 cable

royalties) to the Music Claimants. Order

in Docket No. 94–3 CARP CD 90–92). As

a result, there were no funds retained to

satisfy any Phase II award against the

Music Claimants’ royalties. However,

the Order required reimbursement

should an overpayment of royalties

occur. The Music Claimants were

overpaid $63.74, the amount of

Cannings’ award. The Register

recommends that, in affirming the

Panel’s award, the Librarian order

Music Claimants to pay Cannings

$63.74 in satisfaction of his claim.

V. Order of the Librarian

Having duly considered the

recommendation of the Register of

Copyrights regarding the Report of the

Copyright Arbitration Royalty Panel in

the matter of the Phase II controversy for

the distribution of 1991 cable royalty

fees, 17 U.S.C. 111, the Librarian of

Congress fully endorses and adopts her

recommendation to accept the Panel’s

determination. The Librarian also

dismisses the ‘‘supplemental reply’’ of

BMI as untimely.

The Librarian orders that Music

Claimants submit payment to James

Cannings in the amount of $63.74, no

later than May 15, 1998.

Dated: April 20, 1998.

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.

[FR Doc. 98–10923 Filed 4–23–98; 8:45 am]

BILLING CODE 1410–33–P

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

[Notice: (98–057]

Proposed Information Collection

AGENCY: National Aeronautics and

Space Administration (NASA).

ACTION: Notice of agency report forms

under OMB review.

SUMMARY: The National Aeronautics and

Space Administration, as part of its

continuing effort to reduce paperwork

and respondent burden, invites the

general public and other Federal

agencies to take this opportunity to

comment on proposed and/or

continuing information collections, as

required by the Paperwork Reduction

Act of 1995 (Pub. L. 104–13, 44 U.S.C.

3506(c)(2)(A)). The reports will be

utilized by the Office of Small and

Disadvantaged Business Utilization as a

method for determining if

developmental assistance provided to

small disadvantaged businesses by

prime contractor’s performance meets

the standards established in NASA

policy. The Agency’s ability to manage

the program effectively would be greatly

diminished without receiving the

described reports, which are part of the

ongoing performance fee evaluation

process.

DATES: All comments should be

submitted on or before June 23, 1998.

ADDRESSES: All comments should be

addressed to Mr. Richard Kall, Code HK,

National Aeronautics and Space

Administration, Washington, DC 20546–

0001.

FOR FURTHER INFORMATION CONTACT: Ms.

Carmela Simonson, NASA Reports

Officer, (202) 358–1223.

Title: Small Business and Small

Disadvantaged Business Concerns and

Related Contract Provisions NASA FAR

Supplement Part 18–19, SF 295.

OMB Number: 2700–0073.

Type of review: Extension.

Need and Uses: NASA requires

reporting of small disadvantaged

business subcontract awards in order to

meet its Congressionally mandated

goals.

Affected Public: Not-for-profit

institutions.

Number of Respondents: 225.

Responses Per Respondents: 2.

Annual Responses: 450.

Hours Per Request: 13.

Annual Burden Hours: 5,850.

Frequency of Report: Biannually.

Eva L. Layne,

Office of the Chief Information Officer.

[FR Doc. 98–10949 Filed 4–23–98; 8:45 am]

BILLING CODE 7510–01–M