Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations 34289

regulatory policies and procedures of

the Department of Transportation (DOT)

(44 FR 11040; February 26, 1979). Due

to the short duration and limited scope

of the implementation of the safety

zone, and because commercial traffic

will have an opportunity to request

authorization to transit, the Coast Guard

expects the economic impact of this rule

to be so minimal that full regulatory

evaluation under paragraph 10(e) of the

regulatory policies and procedures of

DOT is unnecessary.

Small Entities

Under the Regulatory Flexibility Act

(5 U.S.C. 601 et seq.), the Coast Guard

must consider whether this rule will

have a significant economic impact on

a substantial number of small entities.

‘‘Small entities’’ may include small

businesses and not-for-profit

organizations that are not dominant in

their respective fields, and

governmental jurisdictions with

populations less than 50,000. For the

same reasons set forth in the above

Regulatory Evaluation, the Coast Guard

certifies under 5 U.S.C. 605(b) that this

rule is not expected to have a significant

economic impact on any substantial

number of entities, regardless of their

size.

Assistance for Small Entities

In accordance with § 213(a) of the

Small Business Regulatory Enforcement

Fairness Act of 1996 (Pub. L. 104–121),

the Coast Guard wants to assist small

entities in understanding this rule so

that they can better evaluate its effects

on them and participate in the

rulemaking process. If your small

business or organization is affected by

this rule and you have questions

concerning its provisions or options for

compliance, please contact Lieutenant

Andrew B. Cheney, U.S. Coast Guard

Marine Office San Francisco Bay at

(510) 437–3073.

Collection of Information

This regulation contains no collection

of information requirements under the

Paperwork Reduction Act of 1995 (44

U.S.C. 3501 et seq.).

Federalism

The Coast Guard has analyzed this

temporary regulation under the

principles and criteria contained in

Executive Order 12612 and has

determined that this regulation does not

have sufficient federalism implications

to warrant the preparation of a

Federalism Assessment.

Environmental Assessment

The Coast Guard has considered the

environmental impact of this temporary

regulation and concluded that under

Chapter 2.B.2. of Commandant

Instruction M16475.1C, Figure 2–1,

paragraph (35), it will have no

significant environmental impact and it

is categorically excluded from further

environmental documentation.

Unfunded Mandates

Under the Unfunded Mandates

Reform Act of 1995 (Pub. L. 104–4), the

Coast Guard must consider whether this

rule will result in an annual

expenditure by state, local, and tribal

governments, in the aggregate of $100

million (adjusted annually for inflation).

If so, the Act requires that a reasonable

number of regulatory alternatives be

considered, and that from those

alternatives, the least costly, most costeffective, or least burdensome

alternative that achieves the objective of

the rule selected.

No state, local, or tribal government

entities will be effected by the rule, so

this rule will not result in annual or

aggregate costs of $100 million or more.

Therefore, the Coast Guard is exempt

from any further regulatory

requirements under the Unfunded

Mandates Act.

List of Subjects in 33 CFR Part 165

Harbors, Marine safety, Navigation

(water), Reporting and recordkeeping

requirements, Security measures,

Waterways.

Regulation

In consideration of the foregoing,

Subpart F of Part 165 of Title 33, Code

of Federal Regulations, is amended as

follows:

1. The authority citation for Part 165

continues to read as follows:

Authority: 33 U.S.C. 1231; 50 U.S.C. 191;

33 CFR 1.05–1(g), 6.04–1, 6.04–6 and 160.5;

49 CFR 1.46.

2. A new § 165.T11–079 is added to

read as follows:

§ 165.T11–079 Safety Zone: San Franciso

Bay, San Francisco, CA.

(a) Location. The area described as

follows, located within the navigable

waters of the Oakland Estuary,

constitutes a safety zone: a circular

radius of 350 yards surrounding the

barge used as a platform to launch

fireworks for Jack London Square’s 4th

of July Fireworks Celebration, the center

of which is approximately located at

37°47.6′ N, 122°16.4′ W. All coordinates

referred use Datum: NAD 83.

(b) Effective Dates. This safety zone

will be in effect on July 4, 1998 from 8

p.m. to 11:30 p.m., PDT. If the event

concludes prior to the scheduled

termination time, the Captain of the Port

will cease enforcement of this safety

zone and will announce that fact via

Broadcast Notice To Mariners.

(c) Regulations. In accordance with

the general regulations in § 165.23 of

this part, entry into, transit through, or

anchoring within this zone by all

vessels is prohibited, unless authorized

by the Captain of the Port, or a

designated representative thereof.

Commercial vessels may request

authorization to transmit the safety zone

by contacting Vessel Traffic Service on

Channel 14 VHF–FM.

Dated: June 3, 1998.

H. Henderson,

Captain, U.S. Coast Guard, Captain of the

Port, San Francisco Bay.

[FR Doc. 98–16781 Filed 6–23–98; 8:45 am]

BILLING CODE 4910–15–M

LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 96–3B]

Notice and Recordkeeping for Digital

Subscription Transmissions

AGENCY: Copyright Office, Library of

Congress.

ACTION: Interim regulations.

SUMMARY: The Copyright Office of the

Library of Congress is issuing interim

regulations on the requirements by

which copyright owners shall receive

reasonable notice of the use of their

works from digital subscription

transmission services, and how records

of such use shall be kept and made

available to copyright owners. The

Digital Performance Right in Sound

Recordings Act of 1995 requires the

Office to adopt the regulations.

EFFECTIVE DATE: The interim regulations

are effective July 20, 1998.

FOR FURTHER INFORMATION CONTACT:

David O. Carson, General Counsel, or

Jennifer L. Hall, Senior Attorney,

Copyright GC/I&R, P.O. Box 70400,

Southwest Station, Washington, D.C.

20024. Telephone: (202) 707–8380.

SUPPLEMENTARY INFORMATION: This is a

synopsis of the Interim Rule in Docket

No. RM 96–3B, adopted June 15, 1998.

The full text of the Interim Rule is

available for inspection and copying

during normal business hours in the

Public Information Office of the

Copyright Office, Room LM–401, and in

the Public Records Office of the
34290 Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations

1On November 28, 1997, the CARP convened by

the Librarian issued its report determining rates and

terms for the license for the period from the

effective date of the Act. Report of the Copyright

Arbitration Royalty Panel, In re: Determination of

Statutory License Terms and Rates for Certain

Digital Subscription Transmission of Sound

Recordings, No. 96–5 (Nov. 28, 1997). The Librarian

issued an order accepting in part the CARP Report,

and establishing additional terms. See discussion

infra, The 1997 CARP Proceeding Under Section

114.

Licensing Division of the Copyright

Office, Room LM–458, James Madison

Memorial Building, First and

Independence Avenue, S.E.,

Washington, D.C. 20559–6000. The full

Interim Rule is also available via the

Copyright Office homepage at http://

www.loc.gov/copyright.

The regulations are issued on an

interim basis due to the developing

nature of the digital transmission

service industry and of the technology

which will be employed in

accommodating the reporting

requirements. In two years, the Office

will provide another opportunity for

comment before issuing final

regulations.

Background

On November 1, 1995, Congress

enacted the Digital Performance Right in

Sound Recordings Act of 1995 (‘‘the

Act’’). Public Law No. 104–39, 109 Stat.

336 (1995). The Act gave to sound

recording copyright owners an exclusive

right to perform their works publicly by

means of a digital audio transmission.

17 U.S.C. 106(6). Certain digital

transmissions were exempted from the

scope of the right, 17 U.S.C. 114(d)(1),

while nonexempt digital subscription

services were given the opportunity to

qualify for a statutory license. 17 U.S.C.

114(d)(2). Congress directed the

Librarian of Congress to establish

regulations under which copyright

owners may receive reasonable notice of

the use of their sound recordings under

the statutory license, and under which

entities performing the sound

recordings shall keep and make

available records of such use. 17 U.S.C.

114(f)(2).

The Sec. 114 License for Nonexempt

Subscription Transmissions

A nonexempt digital subscription

service transmission is subject to

statutory licensing in accordance with

17 U.S.C. 114(f) if the transmission is

not part of an interactive service, does

not exceed the ‘‘sound recording

performance complement,’’ does not

give an advance program schedule or

prior announcement of titles to be

performed, does not automatically cause

the receiving device to switch from one

program channel to another, and

includes information encoded by

authority of the copyright owner

identifying the title, the featured artist,

and related information. 17 U.S.C.

114(d)(2). The ‘‘sound recording

performance complement’’ is a limit on

the number of selections that can be

played from one phonorecord, boxed

set, or featured artist within a three-hour

period. See 17 U.S.C. 114(j)(7).

Digital subscription transmission

services that qualify for the statutory

license may reach a voluntary

agreement as to rates and terms with

sound recording copyright owners, or

may petition the Librarian of Congress

to convene a copyright arbitration

royalty panel (CARP) to set rates and

terms for those entities that have not

reached voluntary agreement. 17 U.S.C.

114(f)(1)–(2), and (4). On June 4, 1996,

no voluntary agreement having been

reached, the parties petitioned the

Librarian to convene such a CARP.1

Rates and terms set by the CARP will

apply to all copyright owners and

subscription services not subject to

voluntary agreement. 17 U.S.C.

114(f)(2)–(3). However, Congress also

directed the Librarian of Congress to

establish regulations by which copyright

owners may receive reasonable notice of

the use of their sound recordings under

statutory license, and under which

records of such use shall be kept and

made available by the entities

performing the sound recordings. 17

U.S.C. 114(f)(2). Anyone performing a

sound recording publicly by means of a

nonexempt subscription transmission

under section 114(f) may do so without

infringing the exclusive right of the

sound recording copyright owner by

complying with the notice requirements

that the Librarian prescribes by

regulation and by paying royalty fees in

accordance with the law. 17 U.S.C.

114(f)(5).

Rulemaking on Notice and

Recordkeeping

On May 13, 1996, the Copyright

Office published a Notice of Proposed

Rulemaking in the Federal Register

requesting comments on the

requirements by which copyright

owners should receive reasonable notice

of the use of their works from

subscription digital transmission

services and how records of such use

should be kept and made available to

copyright owners. The Office asked

commentators to consider both the

adequacy of notice to sound recording

copyright owners and the administrative

burdens placed on digital transmission

services in providing notice and

maintaining records of use. 61 FR 22004

(May 13, 1996).

Initial Comments and Reply Comments

The Office received a total of four

comments and three reply comments, as

well as one surreply and one comment

to the surreply. Comments were

submitted by the Recording Industry

Association of America (RIAA)

(representing member companies who

manufacture or distribute more than 90

percent of legitimate sound recordings

sold in the United States), and three

digital music subscription services

operating in the United States: DMX,

Inc. (DMX); Muzak, Inc. (Muzak); and

Digital Cable Radio Associates/Music

Choice (DCR) (‘‘commenting parties’’).

The Initial and Reply Comments are

fully summarized in the text of this

Interim Rule and Order, and were also

discussed in a second Notice of

Proposed Rulemaking (NPRM),

published on June 24, 1997. See 62 FR

34035 (June 24, 1997). The comments

addressed a wide range of proposals for

notice and records of use, including: an

initial notice filed with the Copyright

Office to indicate commencement of

transmission under statutory license;

quarterly reports of use including data

to indicate which sound recordings

were performed and the number of

times (summary frequency data);

whether reports should be served on a

single collective rights organization

(‘‘Collective’’) such as RIAA’s, rather

than on individual copyright owners;

data fields to identify sound recordings;

and maintenance of records. The

comments also addressed matters not

prescribed in the Act, such as

confidentiality, auditing, and statements

of account.

Meetings To Facilitate Agreement on

Notice and Recordkeeping

Requirements; and Issues Identified in

Discussions Among the Parties

On November 14, 1996, the Copyright

Office met with the parties to facilitate

agreement on notice and recordkeeping

requirements under section 114, and to

discuss the proper regulatory and

recordkeeping role for the Office. In

attendance were 15 individuals

representing RIAA, DMX, Muzak, DCR,

and the Copyright Office. The Office

distributed at the meeting a list of

principles it accepted: for example,

Services would file with the Office an

initial notice indicating transmission of

sound recordings under statutory

license. Following the meeting, the

Office circulated a draft meeting

summary, and received additional

written comments in response. A
Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations 34291

2The comments, meeting summaries, and

meeting handouts are available in the Public

Information Office of the Copyright Office, Room

LM–401, James Madison Memorial Building,

Washington, D.C.

second meeting with the parties took

place on January 23, 1997.2

In the comments and meeting

discussions, the parties considered how

reports of use would be kept or made

available for sound recording copyright

owners who were not members of a

Collective, who could not be located, or

who refused delivery. While Services

believed the Office should designate a

Collective and not permit individual

copyright owners not to join, RIAA

expressed concern about its Collective

administering rights for non-member

copyright owners, due to contractual

and fiduciary duties to its members. The

commenting parties addressed whether

Services should provide playlist

samples or error logs to verify

compliance with the sound recording

performance complement, and whether

the Act requires Services to

affirmatively report compliance with the

complement. Following the meetings,

however, a Service proposal to produce

each quarter the entire intended

playlist, instead of summary frequency

data or error logs, was deemed generally

acceptable, provided an agreeable

definition for ‘‘intended playlist’’ were

reached. The commenting parties also

continued to discuss data fields to

identify sound recordings performed.

The Second NPRM and Request for

Further Comments

On June 24, 1997, the Copyright

Office published a second Notice of

Proposed Rulemaking (NPRM),

presenting certain preliminary decisions

and asking the parties for further

comments. See Notice of Proposed

Rulemaking, 62 FR 34035 (June 24,

1997). For example, the Office

announced that it would accept an

optional initial notice from Services;

concluded that Services should keep

and make available records to permit

monitoring of the performance

complement; asked how Services would

make records of use available to

unaffiliated sound recording copyright

owners; concluded that copyright

owners whose identity and location is

known should be served directly with

reports of use; inquired whether

Services planned to serve quarterly

intended playlists on small and

individual copyright owners, or if there

were an alternative reporting

mechanism; inquired whether copyright

owners should be permitted to waive

complement information in favor of

summary frequency data for their

recording only; sought comment on

estimated costs for providing intended

playlists to different parties; stated a

requirement that Services maintain

records of use for three years; and

announced that it would issue no

regulation on audits. The Office

provided a 60-day comment period.

The Further Comments

In response to the request for Further

Comments in the June 24, 1997, NPRM,

the Office received comments from:

RIAA; DMX; DCR; the National Music

Publishers’ Association, Inc. (NMPA);

and Creative Engineering Concepts, Inc.

(CECI). CECI is the developer of an

automated signal recognition technology

employed nationwide and

internationally by Broadcast Data

Systems, LP, to identify sound

recordings and advertisements using

features and characteristics of the audio

patterns.

1. Initial Notice

RIAA argued that the single-page

initial notice filed by Services with the

Copyright Office should be mandatory,

not optional, so that copyright owners

can identify prospectively entities that

will transmit under statutory license.

2. Reports of Use

The commenting parties agreed that

Services should provide quarterly

reports of use consisting of their

‘‘intended playlists’’ for the quarter.

a. Definition of intended playlist. All

commenting parties agreed that the

intended playlist should report every

sound recording ‘‘scheduled’’ to be

transmitted; in addition, RIAA

recommended that the intended playlist

report every sound recording ‘‘actually’’

transmitted. RIAA also recommended

that the intended playlist be defined to

include a detailed report of any Service

system failures resulting in transmission

of unscheduled sound recordings. DMX

suggested that the definition prescribe

data fields and sound recording

identifiers to be included in the playlist.

b. Reporting system failures resulting

in deviations from the intended playlist.

RIAA said Services should report

system failures, including time and

duration, and titles of substitute sound

recordings transmitted in place of those

scheduled. DMX said it does not

automatically generate error logs in

event of system failure, and that errors

causing deviations from intended

playlists are rare. DMX noted that logs

were proposed to evaluate summary

frequency data and playlist samples;

providing complete intended playlists

vitiates their necessity.

c. Certification of reports. RIAA said

reports of use should contain a

certification signed by a Service

representative attesting under notary or

penalty of perjury to accuracy. DMX

said at most the regulation should

require a statement that the report

reflects information believed to be

accurate and maintained in ordinary

course of business.

d. Reporting compliance with the

performance complement. DCR

reasserted that the Act does not impose

an obligation on Services affirmatively

to report compliance with the

performance complement.

e. Data fields and sound recording

identifiers. RIAA, DCR and DMX

generally agreed that the intended

playlist reports should include the

following eight data fields: channel,

sound recording title, featured artist,

album title, record label, catalog

number, transmission date, and

transmission time. In addition, RIAA

sought four other identifiers: the CD

track number, the Service name, the

International Sound Recording Code

(ISRC), and the ‘‘sound recording

identifier’’ used by Selector (the

software program Services employ to

generate their intended playlists).

However, CECI also described its

technology to automatically identify

sound recordings ‘‘using features and

characteristics of the audio patterns,’’

and to monitor sound recording usage.

CECI already administers a network of

remote monitoring systems collecting

channel number and other data; the

technology is used by record companies,

broadcasters and others, to verify

airplay, generate statistics, control

distribution and determine royalty

payments. This could be adapted within

about six months to automatically

document use of sound recordings and

other copyrighted works by Services,

verify compliance with the performance

complement, and generate reports of

use.

f. Compilation albums and non-music

and foreign programming. RIAA said

the standard reporting requirements

would clearly apply to retail

compilation albums, such as movie

soundtracks, and should also apply to

non-retail but commercial compilation

albums, such as disc jockey compilation

albums, because in such cases Services

possess and make available to their

subscribers information regarding the

retail album. RIAA said the regulations

should not distinguish between foreign

and domestic programming. In earlier

comments, Services sought to limit

regulation of non-stereo, retransmitted

foreign-originated programming, or

retransmitted programming consisting
34292 Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations

of less than one-half music, such as

sports or talk radio, but in their Further

Comments professed no plans for such

programming.

3. Central Collective

The Further Comments urged the

Office to designate a central Collective

and not impose a requirement of direct

service to small, independent copyright

owners. Services argued severe costs

and administrative burdens associated

with the reporting scheme in the NPRM

would cripple them, and that direct

service would force them to mainstream

programming. DMX said use of

collectives is common practice

internationally with respect to

collection and distribution of royalties

for performance of sound recordings.

a. Alternative reporting mechanism.

Services did not wish to identify

individual copyright owners and

provide separate reports that would also

permit complement monitoring. DCR

said no alternative to the intended

playlist would provide comparable

information, and the only alternative

was to designate an independent second

Collective for copyright owners not

wishing to join RIAA. CECI volunteered

to be an alternative Collective for small

independent copyright owners. DMX

urged the Office to mandate a single

Collective, but, recognizing burden and

expense of providing independent

copyright owners with either intended

playlists or individually tailored

summary reports, DMX suggested three

alternative reporting methods, and five

‘‘safeguards’’ it sought if direct service

were required. DMX said Services

should be able to choose among the

methods and vary them by agreement or

according to recipient, and that

unserved copyright owners should make

their identity and location known to

Services by registered letter.

b. RIAA Collective as central

repository. In Further Comments, RIAA

said it now agreed to become the central

repository for all copyright owners,

including non-RIAA members. RIAA

said it would now agree to receive all

reports of use and royalties from

Services. Because it now sought to be

the central Collective, it said many

questions in the second NPRM were

moot; for example, there is no need for

an alternative to the intended playlist,

and no need for separation of reports.

Because the Collective now planned to

identify and locate copyright owners of

all sound recordings performed under

the license and to distribute to all

entitled copyright owners, there was no

need to define copyright owners ‘‘whose

identity and location is known’’ to

trigger a direct service requirement.

RIAA said it required complete and

uniform data to operate a royalty

distribution system. It rejected summary

frequency data because it lacks

complement information and said all

copyright owners are entitled to the

same notice of use. RIAA said it would

deduct costs from royalties to cover

administrative expenses. Royalties that

could not be distributed for unlocated

copyright owners would, after three

years of escrow, be used to offset costs

of locating non-members.

4. Details Relating to Records of Use

The Further Comments addressed a

number of details relating to records of

use, including formats of reports, access

and confidentiality, audits, maintenance

of records, costs of maintaining and

providing records, and retroactivity of

recordkeeping requirements.

a. Reporting and maintaining records

of use; format. RIAA and DCR agreed

that reports of use should be provided

within 30 days of the close of each

quarter; DMX preferred no later than 45

days following the end of the quarter.

The commenting parties agreed that

Services should be required to retain

reports of use for three years, and that

reports should be provided on a

common machine-readable medium.

DMX generally accepted the file format

suggested by RIAA.

b. Confidentiality. The commenting

Services agreed that provision of

intended playlists may raise

confidentiality concerns. One said

Services should be able to elect to

provide intended playlists, summary

frequency data, or Internet-posted past

playlists (in either a password-protected

or publicly available area). RIAA said

playlists are available to anyone willing

to monitor programming, but suggested

that instead of requiring a

confidentiality agreement, the

regulation should limit the

information’s dissemination and

utilization.

c. Access and audits. While

announcing that it would not

promulgate audit regulations, the Office

in the June 24, 1997, NPRM inquired

whether some regulation on access were

needed and how Services would make

records available to copyright owners

who had not been served. DMX

suggested that audits of Services be

limited to once a year, and that

copyright owners be able to view

information held by a Collective, subject

to fees. NMPA urged the Office to

expressly establish audit requirements

in its forthcoming regulations on notice

and recordkeeping under section 115.

d. Costs. RIAA said it would deduct

costs from royalties to cover

administrative expenses, while royalties

that could not be distributed to

unlocated copyright owners would be

escrowed for three years before reverting

to the general royalty account for

distribution, or being used to offset costs

to Collective members of trying to locate

non-members. RIAA said costs of

serving the Collective or copyright

owners, and of retaining reports for

three years, should be borne by

Services. DMX said Services should

bear costs of maintaining intended

playlists, but the cost of preparing and

delivering reports of use to a Collective

or record company, including

reasonable labor and computer time,

should be deducted from royalty

payments.

e. Effective date and transition period.

DCR and DMX said reports of use

should not be required from the

license’s creation on February 1, 1996,

through adoption of regulations. DCR

said retroactive recordkeeping would

require millions of records. DCR and

DMX said the Office should recognize a

transition period of two years before full

compliance with notice and

recordkeeping rules is required. RIAA

sought use data for periods preceding

issuance of regulations, and said the

regulation should not recognize a formal

transition period.

The 1997 CARP Proceeding Under

Section 114

As noted, following a period of

voluntary negotiation concerning rates

and terms for the section 114 statutory

license, the parties petitioned the

Librarian of Congress on June 4, 1996,

to convene a copyright arbitration

royalty panel (CARP). See 17 U.S.C.

114(f)(1)–(2); Initiation of Voluntary

Negotiation Period, 60 FR 61655 (Dec, 1,

1995); Initiation of Arbitration, 62 FR

29742 (June 2, 1997). On November 28,

1997, the CARP convened by the

Librarian issued its report determining

rates and terms for the license for the

period from the effective date of the Act.

Report of the Copyright Arbitration

Royalty Panel, In re: Determination of

Statutory License Terms and Rates for

Certain Digital Subscription

Transmission of Sound Recordings, No.

96–5 (Nov. 28, 1997) (Report). The

Report established, inter alia, the

following terms:

(1) Collective: The CARP determined

that ‘‘any notices and payments

required by the CARP ‘should be

submitted to a single private entity or

government agency that will distribute

the funds to sound recording copyright

owners.’ ’’ Because RIAA requested that

it be designated as the single entity and

because Services did not object, the
Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations 34293

3While most copyright owners are likely to

utilize the designated Collective, a copyright owner

and Service may reach separate arrangements in

place of requirements imposed by the CARP or

Copyright Office for royalties and records of use.

Section 114(f)(3) provides:

License agreements voluntarily negotiated at any

time between one or more copyright owners of

sound recordings and one or more entities

performing sound recordings shall be given effect

in lieu of any determination by a copyright

arbitration royalty panel or decision by the

Librarian of Congress. 17 U.S.C 114(f)(3).

Panel determined ‘‘that the RIAA

Collective shall serve as that single

private entity.’’ Report ¶ 184. See also

¶ 205.

(2) Maintenance of certain records:

The CARP said Services shall maintain

accurate records on matters directly

related to the payment of license fees for

a period of three years. Report ¶¶ 192,

209.

(3) Audits: Interested parties may

conduct a single audit of a Service

during any given year. Report ¶¶ 193,

210.

(4) Confidentiality: RIAA must

establish safeguards to avoid disclosure

of confidential financial and business

information. ¶¶ 191, 208.

On January 27, 1998, the Librarian

concluded on the recommendation of

the Register that he could not adopt the

Report to the extent that certain of the

findings and conclusions were arbitrary

and contrary to law. Notice and Order,

Docket No. 96–5 CARP DSTRA (Jan. 27,

1998). See 17 U.S.C. 802(f). Setting aside

the Panel’s final determination in part,

to reject the Panel’s rate and certain of

the terms, the Librarian issued an Order

published in the Federal Register,

accepting each of the terms set forth

above. See Determination of Reasonable

Rates and Terms for the Digital

Performance of Sound Recordings, 63

FR 25394 (May 8, 1998). The Librarian’s

Order also established the following

additional terms.

(5) Audits: Interested parties may

conduct one audit of the RIAA

Collective during any given year. 37

CFR 260.6.

(6) Costs: The RIAA Collective may

deduct, from royalties it distributes,

reasonable costs incurred in

administration of the distribution of

royalties, so long as the reasonable costs

do not exceed actual costs incurred by

the collecting entity. 37 CFR 260.3(d).

The Collective also may use unclaimed

funds to offset the cost of administering

collection and distribution of royalties.

37 CFR 260.7.

The CARP proceeding and Librarian’s

final determination upon review of the

CARP Report therefore resolved until at

least the year 2001 some of the issues

that were the subject of comment in the

present rulemaking, including the

establishment of a single Collective,

auditing, confidentiality, and deduction

of costs.

Discussion and Conclusions

The Act directs the Librarian to

establish regulations under which

copyright owners may receive

reasonable notice of use of their sound

recordings under the license, and under

which entities performing sound

recordings shall keep and make

available records of use. 17 U.S.C.

114(d)(2). Congress meant to inhibit

neither the arrival of new technologies

nor the operation of existing digital

audio services. S. Rep. No. 128, 104th

Cong., 1st Sess. 15 (1995); Cong. Rec.

S950 (daily ed. Jan. 13, 1995) (statement

of Sen. Feinstein). The Office has

considered both adequacy of notice to

copyright owners and administrative

burden for Services providing notice

and records. See 61 FR 22004 (May 13,

1996).

1. Initial Notice

Digital subscription services

transmitting sound recordings under the

statutory license will file an initial

notice with the Copyright Office

consisting of Service name, address,

telephone number, and information on

how to gain access to the online website

or home page of the Service or entity,

where information may be posted under

these regulations concerning the use of

sound recordings under statutory

license. The notice will be placed in

Copyright Office records where

copyright owners may access the

information concerning use of sound

recordings under the license. The filing

will be required to assist copyright

owners and Collectives locate entities

transmitting under the license. Services

will file the initial notice any time prior

to commencement of transmission

under the license or within 45 days of

the regulation’s effective date, and

update the filing within 45 days of a

change in the information reported. The

notices shall be accompanied by a filing

fee.

2. Designation of a Single Collective

Digital subscription services will also

be required to provide detailed reports

of their use of sound recordings under

the license, but will not be required to

serve copyright owners individually.

Although the Office suggested in its

second NPRM that it did not have

authority to designate a single Collective

to serve as a central repository and

might have to require Services to serve

reports of use directly on copyright

owners or their agents, the Services

urged the Office to designate a single

Collective. Services argued that the

costs of direct service upon owners of

the 10 million songs performed by each

Service annually would cripple them

and cause them to eliminate all but

‘‘mainstream’’ programming in order to

limit the number of copyright owners

served. One Service observed that use of

collective administration for

performance of sound recordings is

common practice internationally.

The Office recognizes that collective

administration may be preferable where

a large number of works are used, no

single use is of great value, and owners

cannot be easily located. In such cases,

a central clearinghouse creates

efficiencies of scale. The Office

continues to question whether it would

be appropriate, as part of an isolated

rulemaking on notice and recordkeeping

pursuant to 17 U.S.C. 114(f)(2), to

require that notice of use of sound

recordings be served on a single

Collective rather than on all sound

recording copyright owners. However, a

single Collective (the RIAA Collective)

has now been designated by a CARP and

confirmed by an Order of the Librarian

for purposes of receiving royalty

payments and statements of account. In

this notice and recordkeeping

proceeding, RIAA said that its

Collective would serve as central

repository for reports for all sound

recording copyright owners, regardless

of membership in RIAA; commenting

Services accepted the RIAA Collective

as suitable for this role. The purpose of

the CARP proceeding was to determine

reasonable terms and rates under the

statutory license. See 17 U.S.C. 114(f).

The CARP’s designation of a single

Collective to receive royalty payments

and statements of account as a term of

the license simplifies the Office’s task in

this notice and recordkeeping

proceeding. Rates and terms determined

in the CARP proceeding are binding on

all Services and sound recording

copyright owners. 17 U.S.C. 114(f)(2).

Because Services will send royalty

payments and statements of account to

a single Collective rather than to

individual copyright owners, records of

use should be sent to the Collective,

which will distribute royalties to

copyright owners based on the

information in the records of use.3 As

one Service noted, reports of use

determine royalty payments and should

logically accompany them.

The Librarian’s Order of May 8, 1998,

establishes rates and terms for the

statutory license through December 31,

2000. See 17 U.S.C. 114(f)(1). The RIAA

Collective will serve as the collective

administration organization through
34294 Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations

4Because future negotiations or CARP

proceedings may result in designation of more than

one Collective, the regulations anticipate the

possibility that there may be multiple Collectives.

Of course, it is also possible that future negotiations

or CARP proceedings result in some payment

mechanism other than a Collective.

that date. Negotiations on rates and

terms for years 2001 through 2005 will

commence in January 2000. 17 U.S.C.

114(f)(4)(B).4

In summary, the regulation directs

Services to serve records of use upon

the Collective or Collectives identified

in Copyright Office records as having

been designated through the CARP

process or by settlement agreement.

Because Services will serve records of

use for all sound recording copyright

owners upon the designated

Collective[s], there is no need for a

definition of sound recording copyright

owners whose identity and location is

known, or other regulations concerning

a direct service requirement. As

discussed below, in the event that no

Collective is designated, or if all

designated Collectives terminate

collection and distribution operations,

Services will be required to post records

of use online, with appropriate

safeguards to protect confidentiality.

Interested parties will have an

opportunity to comment on these issues

before final regulations are issued in late

2000.

In order to effectuate the statutory

mandate that ‘‘copyright owners’’ may

receive reasonable notice of the use of

their sound recordings under this

section, 17 U.S.C. 114(f)(2), the

Collective should make certain

information publicly available. In order

to receive records of use, designated

collectives will file with the Copyright

Office and post and make available

online a notice containing the following

information: the Collective name,

address, and telephone number; a

statement that the Collective has been

designated for collection and

distribution of performance royalties

under statutory license for digital

transmission of sound recordings; and

information on how to gain access to the

Collective’s online website or home

page, where information may be posted

under these regulations concerning the

use of sound recordings under statutory

license. The address of the Collective

website will be made available on the

Copyright Office website. In addition,

the Collective will post and make

available online, for the duration of one

year, an annual report on how the

Collective operates, how royalties are

collected and distributed, and what the

Collective spent that fiscal year on

administrative expenses.

3. Reports of Use

Reports of use will be monthly, and

shall consist primarily of the Service’s

Intended Playlists for each channel and

each day of the month. Reports of use

shall be due on the twentieth day after

the end of each month, commencing

with the month succeeding the month

in which these regulations become

effective. The commenting parties

agreed that reports of use should consist

of the Intended Playlists. Not all

Services can produce an actual playlist

or error log, and the proposal to provide

samples to test playlist reports was not

found acceptable. The Intended

Playlists accomplish all of copyright

owners’ reporting objectives, including

provision of information with which

copyright owners can generally monitor

compliance with the sound recording

performance complement in section

114(j)(7).

The Office considered arguments of

DCR and other Services that the Act

imposes no obligation to affirmatively

report compliance with the

complement, but reaffirms its earlier

judgment. The Office notes that

conforming to the performance

complement is a condition of the

statutory license, and a Service that

complies with the regulatory notice

requirements and pays the statutory

royalties thereby avoids infringing the

copyright owners’ exclusive rights. 17

U.S.C. 114(d)(2), (f)(5). The Office

determines, therefore, that it is within

its rulemaking authority under section

114(f)(2) to require reporting of

complement information. See

Cablevision Sys. Dev. v. Motion Picture

Ass’n, 836 F.2d 599 (D.C. Cir.

1988)(Copyright Office had authority to

issue regulations interpreting statute).

The Office believes that the presence

and specificity of the performance

complement indicates Congress’ intent

that records of use include data to test

compliance. While section 114(j)(7)

provides that transmissions from

multiple phonorecords exceeding the

performance complement’s numerical

limitations will nonetheless conform to

the complement if the programming of

multiple phonorecords was not

‘‘wilfully intended’’ to avoid the

numerical limitations, a pattern of

regular conduct might provide evidence

of the requisite intent.

The Intended Playlists shall consist of

a consecutive listing of every sound

recording scheduled to be performed,

for each of the Service’s channels and

each day during the reported month.

This definition reflects the true nature

of the Intended Playlist, as a listing of

sound recordings scheduled to be

played. The regulation requires that the

Intended Playlist include every

recording scheduled to be transmitted,

rather than those scheduled and

actually transmitted, because the

comments and facilitated discussions

established that Services are not able to

provide an actual playlist, and that

Intended Playlists already include

overscheduled recordings (about an

extra song per hour) to assure

continuity, and are therefore highly

reflective of recordings actually

transmitted. Services shall report system

failures causing deviations from the

Intended Playlists, including the date,

time and duration of any such system

failure, but during the interim

regulatory period, will not be required

to also report the titles of sound

recordings transmitted in place of those

scheduled on the intended playlist. The

facilitated discussions indicated that not

all Services can provide an error log,

and that system failures causing

deviations from the playlist are rare

events occurring on a single channel for

limited periods. Efforts during such

events are likely focused more on

repairing the malfunction than on

recordkeeping of titles. However, if

system failures appear to increase in

frequency or duration, or become

opportunities for wholesale complement

violations, then the Office will

reconsider its position.

The Reports of Use shall include the

following data fields and sound

recording identifiers that all

commenting parties agreed to: channel,

sound recording title, featured artist,

album title, record label catalog number,

transmission date, and transmission

time. Although one Service argued that

the Act creates no duty to report date

and time, the Office believes that

Congress intended Services to report

complement information; moreover,

given that Service’s argument that only

‘‘willfully intended’’ transgressions will

violate the complement, the Intended

Playlists’ scheduled dates and times

would presumably help establish

Service’s intentions in this regard. In

addition to the eight data fields, the

Reports of Use will also include: Service

name, because the source of the report

should be clear independent of mailing

labels or informal labeling of computer

files; and, where feasible, the

International Sound Recording Code

(ISRC), because this identifier, when

embedded in sound recordings,

facilitates automatic identification and

royalty administration worldwide. The

required data fields will not include the

Selector sound recording identifier, or

any other identifiers relating to
Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations 34295

5Arguably, the RIAA Collective’s expenses would

be lower than typical collectives’ because it will not

be negotiating licenses but will simply collect and

distribute royalties.

particular private monitoring systems,

because the Office does not wish to

incorporate proprietary standards of a

particular company while the

transmission, reporting, and copyright

management technologies are rapidly

developing. There are no separate

requirements for compilation albums,

except that in the case of compilation

albums created for commercial

purposes, Services should report the

name of the retail album identified by

the Service for the sound recording.

During the interim period, there are no

separate requirements for non-music or

retransmitted, foreign-originated

programming, because the Services

reported no current plans to transmit

such programming. The Reports of Use

should be provided on a common

machine-readable medium, such as

diskette, optical disc, or magneto-optical

disc, in the ASCII delimited format set

forth in the regulation, with all data for

one record on a single line. Reports of

Use must be accompanied by a

statement by a Service representative,

signed under penalty of perjury, that the

Intended Playlist report reflects

information believed to be accurate and

maintained by the Service in its

ordinary course of business.

4. Availability of Records

If no Collective is designated, or all

designated Collectives have terminated

collection and distribution operations,

Services will be required to post their

reports of use online on the 20th day

after the end of each month and make

them available to all sound recording

copyright owners for a period of 90

days. The Office inquired whether

Services consider their playlists to be

confidential or trade secrets, and has

given the matter considerable thought.

The Office cannot state conclusively

that there is no confidential trade secret

interest in the programming details

incorporated in an Intended Playlist but

notes that past Intended Playlists are

publicly performed and are historical

fact. Realistically, the Office has had to

weigh any confidentiality interest

against the Services’ own competing

interests in minimizing administrative

burdens and costs, as well as copyright

owners’ interest in receiving

information concerning use of their

works. The regulation requires

Collectives and copyright owners not to

disseminate information in the reports

to persons not entitled to it, or to utilize

it for any purpose other than those the

Act permits, including royalty

collection, distribution, and

determining compliance with statutory

license requirements, without express

consent of the Service. Services may

require use of passwords for access to

electronically posted reports, and may

predicate provision of a password upon

information relating to identity, location

and status as a sound recording

copyright owner, and upon a ‘‘clickwrap’’ agreement not to use the reported

information without the Service’s

consent for any purpose other than

those contemplated under the Act;

however, Services must make

passwords available free of charge or of

other restrictions. In the event that no

Collective is designated, and in the

absence of direct service to notify them

of use of their copyrighted works, all

sound recording copyright owners

should be able to gain access online to

records of use of their sound recordings

under the statutory license. Services

will be required to provide the

Copyright Office with information on

how to gain access to Services’ online

reports of use. That information will be

made available on the Copyright Office

website.

Because section 114(f)(2) mandates

requirements by which ‘‘copyright

owners’’ may receive reasonable notice

of the use of their sound recordings,

provision must be made for individual

copyright owners to have access to the

Reports of Use, even where there are

designated Collectives. Accordingly,

Collectives receiving the Reports of Use

must make copies of the reports

available for inspection by any sound

recording copyright owner, without

charge, during normal office hours upon

reasonable notice. Any copyright owner

exercising the right to inspect the

Reports of Use must agree in writing to

certain confidentiality restrictions.

Because rates and terms of payment

are to be addressed through industrywide settlement or a CARP, this notice

and recordkeeping regulation will not

address how copyright owners will

contact Services to demand payment

based on records of use in the event that

all designated Collectives have

terminated operations or in the event

that, in a future settlement or CARP

proceeding, no Collective is designated.

Similarly, the regulation will not

include requirements for statements of

account, which are properly addressed

as a license term through negotiation or

a CARP. Services will be required to

maintain their reports of use for three

years, the statutory period of limitations

for copyright infringement actions. The

regulation will not address the proposal

for a yearly audit of records underlying

the Reports of Use, which the Office

generally sees as a matter of business

and legal practice to be addressed

through negotiation or a CARP.

The Office inquired about the costs of

providing copyright owners with

records of use. RIAA said that its

Collective would deduct reasonable

administrative costs as a percentage of

royalties. The matter of costs is a

question for resolution through

negotiation or a CARP. See

Determination of Reasonable Rates and

Terms for the Digital Performance of

Sound Recordings, 63 FR 25394 (May 8,

1998). However, collectives typically

deduct administrative expenses. See

Recommendations of the

Intergovernmental Committee of the

Rome Convention, 1979 Copyright 103,

109.5

5. Effective Dates

These regulations will be adopted on

an interim basis for a period of two

years, and will become effective on July

20, 1998. The regulations will recognize

a transition period through August 31,

1998, before Services are required to

comply fully with the recordkeeping

rules. For the period February 1, 1996,

through August 31, 1998, Services must

make available records of use, but will

have the option of producing either

summary frequency data or full

Intended Playlists.

6. Regulatory Flexibility Act

Although the Copyright Office, as a

department of the Library of Congress

and part of the legislative branch, is not

an ‘‘agency’’ subject to the Regulatory

Flexibility Act, 5 U.S.C. 601–612, the

Register of Copyrights has considered

the effect of these interim regulations on

small businesses. The Register has

determined that the interim regulations

would not have a significant economic

impact on a substantial number of small

entities that would require provision of

special relief for small entities in the

regulations, and that the interim

regulations are, to the extent consistent

with the stated objectives of applicable

statutes, designed to minimize any

significant economic impact on small

entities.

List of Subjects in 37 CFR Part 201

Copyright.

Interim Regulations

For the reasons set forth in the

preamble, Part 201 of Title 37 of the

Code of Federal Regulations is amended

as follows:
34296 Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations

PART 201—GENERAL PROVISIONS

1. The authority citation for Part 201

continues to read as follows:

Authority: 17 U.S.C. 702.

2. Sections 201.35 through 201.37 are

added to read as follows:

§ 201.35 Initial Notice of Digital

Transmission of Sound Recordings under

Statutory License.

(a) General. This section prescribes

rules under which copyright owners

shall receive initial notice of use of their

sound recordings under statutory

license under section 114(f) of title 17

of the United States Code, as amended

by Public Law 104–39, 109, Stat. 336.

(b) Definitions. (1) An Initial Notice of

Digital Transmission of Sound

Recordings under Statutory License is a

notice to sound recording copyright

owners of the use of their works under

section 114(f), and required under this

regulation to be filed by a Service in the

Copyright Office.

(2) A Service is an entity engaged in

the digital transmission of sound

recordings, pursuant to section 114(f) of

title 17 of the United States Code.

(c) Forms. The Copyright Office does

not provide printed forms for the filing

of Initial Notices.

(d) Content. An ‘‘Initial Notice of

Digital Transmission of Sound

Recordings under Statutory License’’

shall be identified as such by prominent

caption or heading, and shall include

the following:

(1) The full legal name of the Service

commencing digital transmission of

sound recordings under statutory

license;

(2) The full address, including a

specific number and street name or rural

route, of the place of business of the

Service. A post office box or similar

designation will not be sufficient except

where it is the only address that can be

used in that geographic location;

(3) The telephone number and

facsimile number of the Service; and

(4) Information on how to gain access

to the online website or home page of

the Service, or where information may

be posted under these regulations

concerning the use of sound recordings

under statutory license.

(e) Signature. The Initial Notice shall

include the signature of the appropriate

officer or representative of the Service

transmitting sound recordings under

statutory license. The signature shall be

accompanied by the printed or

typewritten name and title of the person

signing the Notice, and by the date of

signature.

(f) Filing. A Service shall file the

Initial Notice with the Licensing

Division of the Copyright Office prior to

the first transmission of sound

recordings under the license, or within

45 days of the effective date of this

regulation. Each Notice shall be

accompanied by a filing fee of $20.

Initial Notices and amendments will be

placed in the public records of the

Licensing Division of the Copyright

Office, and posted online where they

will be accessible through the Copyright

Office website. The address of the

Licensing Division is: Library of

Congress, Copyright Office, Licensing

Division, 101 Independence Avenue,

S.E., Washington, D.C. 20557–6400.

(g) Amendments. A Service shall file

with the Licensing Division of the

Copyright Office an amendment

reporting a change in the information

reported in the Initial Notice within 45

days of the change. An amendment shall

be accompanied by a fee of $20, and

shall:

(1) Be clearly and prominently

identified as ‘‘An Amendment to an

Initial Notice of Digital Transmission of

Sound Recordings under Statutory

License’’;

(2) Identify the specific Initial Notice

intended to be amended, by Service

name and filing date, so that it may be

readily located in the records of the

Copyright Office;

(3) Clearly specify the nature of the

amendment to be made; and

(4) Be signed and dated in accordance

with this section.

§ 201.36 Reports of Use of Sound

Recordings under Statutory License.

(a) General. This section prescribes

rules under which Services shall serve

copyright owners with notice of use of

their sound recordings, what the content

of that notice should be, and under

which records of such use shall be kept

and made available.

(b) Definitions. (1) A Collective is a

collection and distribution organization

that is designated under the statutory

license, either by settlement agreement

reached under section 114(f)(1) or

section 114(f)(4)(A) and adopted

pursuant to 37 CFR 251.63(b), or by

decision of a Copyright Arbitration

Royalty Panel (CARP) under section

114(f)(2) or section 114(f)(4)(B), or by an

order of the Librarian pursuant to 17

U.S.C. 802(f).

(2) A Report of Use of Sound

Recordings under Statutory License is a

report required under this regulation to

be provided by the Service transmitting

sound recordings under statutory

license.

(3) A Service is an entity engaged in

the digital transmission of sound

recordings pursuant to section 114(f) of

title 17 of the United States Code.

(c) Service. Reports of Use shall be

served upon Collectives that are

identified in the records of the

Licensing Division of the Copyright

Office as having been designated under

the statutory license, either by

settlement agreement reached under

section 114(f)(1) or section 114(f)(4)(A)

and adopted pursuant to 37 CFR

251.63(b), or by decision of a Copyright

Arbitration Royalty Panel (CARP) under

section 114(f)(2) or section 114(f)(4)(B),

or by an order of the Librarian pursuant

to 17 U.S.C. 802(f). Reports of use shall

be served, by certified or registered

mail, or by other means if agreed upon

by the respective Service and Collective,

on or before the twentieth day after the

close of each month, commencing with

the month succeeding the month in

which these regulations become

effective.

(d) Posting. In the event that no

Collective is designated under the

statutory license, or if all designated

Collectives have terminated collection

and distribution operations, a Service

transmitting sound recordings under

statutory license shall post and make

available online its Reports of Use.

Services shall post their Reports of Use

online on or before the 20th day after

the close of each month, and make them

available to all sound recording

copyright owners for a period of 90

days. Services may require use of

passwords for access to posted Reports

of Use, but must make passwords

available in a timely manner and free of

charge or other restrictions. Services

may predicate provision of a password

upon:

(1) Information relating to identity,

location and status as a sound recording

copyright owner; and

(2) A ‘‘click-wrap’’ agreement not to

use information in the Report of Use for

purposes other than royalty collection,

royalty distribution, and determining

compliance with statutory license

requirements, without the express

consent of the Service providing the

Report of Use.

(e) Content. A ‘‘Report of Use of

Sound Recordings under Statutory

License’’ shall be identified as such by

prominent caption or heading, and shall

include a Service’s ‘‘Intended Playlists’’

for each channel and each day of the

reported month.

(1) The ‘‘Intended Playlists’’ shall

include a consecutive listing of every

recording scheduled to be transmitted,

and shall contain the following

information in the following order:

(i) The name of the service or entity;

(ii) The channel;
Federal Register / Vol. 63, No. 121 /Wednesday, June 24, 1998 /Rules and Regulations 34297

(iii) The sound recording title;

(iv) The featured recording artist,

group, or orchestra;

(v) The retail album title (or, in the

case of compilation albums created for

commercial purposes, the name of the

retail album identified by the Service for

purchase of the sound recording);

(vi) The recording label;

(vii) The catalog number;

(viii) The International Standard

Recording Code (ISRC) embedded in the

sound recording, where available and

feasible;

(ix) The date of transmission; and

(x) The time of transmission.

(2) The Report of Use shall include a

report of any system failure resulting in

a deviation from the Intended Playlists

of scheduled sound recordings. Such

report shall include the date, time and

duration of any such system failure.

(f) Signature. Reports of use shall

include a signed statement by the

appropriate officer or representative of

the Service attesting, under penalty of

perjury, that the information contained

in the Report is believed to be accurate

and is maintained by the Service in its

ordinary course of business. The

signature shall be accompanied by the

printed or typewritten name and title of

the person signing the Report, and by

the date of signature.

(g) Format. Reports of use should be

provided on a standard machinereadable medium, such as diskette,

optical disc, or magneto-optical disc,

and should conform as closely as

possible to the following specifications:

(1) ASCII delimited format, using pipe

characters as delimiter, with no headers

or footers;

(2) Carats should surround strings;

(3) No carats should surround dates

and numbers;

(4) Dates should be indicated by: MM/

DD/YYYY;

(5) Times should be based on a 24-

hour clock: HH:MM:SS;

(6) A carriage return should be at the

end of each line; and

(7) All data for one record should be

on a single line.

(h) Confidentiality. Copyright owners,

their agents and Collectives shall not

disseminate information in the Reports

of Use to any persons not entitled to it,

nor utilize the information for purposes

other than royalty collection and

distribution, and determining

compliance with statutory license

requirements, without express consent

of the Service providing the Report of

Use.

(i) Documentation. All compulsory

licensees shall, for a period of at least

three years from the date of service or

posting of the Report of Use, keep and

retain a copy of the Report of Use. For

reporting periods from February 1, 1996,

through August 31, 1998, the Service

shall serve upon all designated

Collectives and retain for a period of

three years from the date of

transmission records of use indicating

which sound recordings were performed

and the number of times each recording

was performed, but is not required to

produce full Reports of Use or Intended

Playlists for those periods.

§ 201.37 Designated Collection and

Distribution Organizations for Records of

Use of Sound Recordings under Statutory

License.

(a) General. This section prescribes

rules under which records of use shall

be collected and distributed under

section 114(f) of title 17 of the United

States Code, as amended by Public Law

104–39, 109 Stat. 336, and under which

records of such use shall be kept and

made available.

(b) Definition. (1) A Collective is a

collection and distribution organization

that is designated under the statutory

license, either by settlement agreement

reached under section 114(f)(1) or

section 114(f)(4)(A) and adopted

pursuant to 37 CFR 251.63(b), or by

decision of a Copyright Arbitration

Royalty Panel (CARP) under section

114(f)(2) or section 114(f)(4)(B), or by an

order of the Librarian pursuant to 17

U.S.C. 802(f).

(2) A Service is an entity engaged in

the digital transmission of sound

recordings pursuant to section 114(f) of

title 17 of the United States Code.

(c) Notice of Designation as Collective

under Statutory License. A Collective

shall file with the Licensing Division of

the Copyright Office and post and make

available online a ‘‘Notice of

Designation as Collective under

Statutory License,’’ which shall be

identified as such by prominent caption

or heading, and shall contain the

following information:

(1) The Collective name, address,

telephone number and facsimile

number;

(2) A statement that the Collective has

been designated for collection and

distribution of performance royalties

under statutory license for digital

transmission of sound recordings; and

(3) Information on how to gain access

to the online website or home page of

the Collective, where information may

be posted under these regulations

concerning the use of sound recordings

under statutory license. The address of

the Licensing Division is: Library of

Congress, Copyright Office, Licensing

Division, 101 Independence Avenue,

S.E., Washington, D.C. 20557–6400.

(d) Annual Report. The Collective will

post and make available online, for the

duration of one year, an Annual Report

on how the Collective operates, how

royalties are collected and distributed,

and what the Collective spent that fiscal

year on administrative expenses.

(e) Inspection of Reports of Use by

Copyright Owners. The Collective shall

make copies of the Reports of Use for

the preceding three years available for

inspection by any sound recording

copyright owner, without charge, during

normal office hours upon reasonable

notice. The Collective shall predicate

inspection of Reports of Use upon

information relating to identity, location

and status as a sound recording

copyright owner, and the copyright

owner’s written agreement not to utilize

the information for purposes other than

royalty collection and distribution, and

determining compliance with statutory

license requirements, without express

consent of the Service providing the

Report of Use. The Collective shall

render its best efforts to locate copyright

owners in order to make available

records of use, and such efforts shall

include searches in Copyright Office

public records and published directories

of sound recording copyright owners.

(f) Confidentiality. Copyright owners,

their agents, and Collectives shall not

disseminate information in the Reports

of Use to any persons not entitled to it,

nor utilize the information for purposes

other than royalty collection and

distribution, and determining

compliance with statutory license

requirements, without express consent

of the Service providing the Report of

Use.

(g) Termination and dissolution. If a

Collective terminates its collection and

distribution operations prior to the close

of its term of designation, the Collective

shall notify the Copyright Office, and all

Services transmitting sound recordings

under statutory license, by certified or

registered mail. The dissolving

Collective shall provide each such

Service with information identifying the

copyright owners it has served.

Dated: June 15, 1998.

Marybeth Peters,

Register of Copyrights.

Approved:

James H. Billington,

The Librarian of Congress.

[FR Doc. 98–16779 Filed 6–22–98; 8:45 am]

BILLING CODE 1410–30–P