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###### Library of Congress

###### Copyright Office

          - 37 CFR Parts 201 and 256
          - [Docket No. 2005-2 CARP CRA]

# AGENCY:

Copyright Office, Library of Congress.

# ACTION:

Final rule.

# SUMMARY:

The Copyright Office of the Library of Congress is publishing final regulations governing the adjustment of the royalty rates for the cable statutory license.

# DATES:

These regulations are effective as of July 1, 2005.

# FOR FURTHER INFORMATION CONTACT:

Tanya M. Sandros, Associate General Counsel, or Gina Giuffreda, Attorney-Advisor, Copyright Arbitration Royalty Panel (CARP), P.O. Box 90779, Southwest Station, Washington, D.C. 20024. Telephone: (202) 707-8380. Telefax: (202) 252-3423.

# SUPPLEMENTARY INFORMATION:

                    Section 111 of the Copyright Act, 17 U.S.C., creates a statutory license for cable systems that retransmit to their subscribers over-the-air broadcast signals. Royalty fees for this license are calculated as percentages of a cable system's gross receipts received from subscribers for receipt of broadcast signals. A cable system's individual gross receipts determine the applicable percentages. These percentages, and the gross receipts limitations, are published in 37 CFR part 256 and are subject to adjustment at five-year intervals. 17 U.S.C. 801(b)(2)(A) & (D).[1]                                          This was a window year for such an adjustment.                

                    Such rate adjustment proceedings may be commenced upon receipt of a petition from a party with a significant interest in the royalty rates. The Library received two such petitions-one on behalf of the Office of the Commissioner of Baseball, the National Football League, the National Basketball Association, the Women's National Basketball Association, the National Hockey League, and the National Collegiate Athletic Association (collectively, the “Joint Sports Claimants”) and the Motion Picture Association of America, Inc., its member companies and other producers and/or distributors of syndicated television programs (collectively, the “Program Suppliers”) and the other from National Cable & Telecommunications Association (hereinafter “NCTA”). In response to the Joint Sports Claimants/Program Suppliers' petition and before receipt of the NCTA petition, the Library published a                     **Federal Register**                     notice seeking comment on the former petition and directing interested parties to file a Notice of Intent to Participate in a Copyright Arbitration Royalty Panel (“CARP”) rate adjustment proceeding. 70 FR 16306 (March 30, 2005). The notice also designated a 30-day period to enable the parties to negotiate a new rate schedule. 37 CFR 251.63(a).                

In accordance with the March 30 notice, the Office received one agreement submitted jointly by representatives of all of the parties who filed notices of intent to participate in this proceeding. The agreement proposed amending the basic royalty rates and the gross receipts limitations, the regulations governing the filing of the statements of account to reflect these changes, and proposed that the changes become effective beginning with the second semiannual accounting period of 2005. The agreement also noted that the syndex rates were not being adjusted for the new license period. In addition, the parties stated that they were unable to agree on whether or how to adjust the 3.75% rate set forth in § 256.2(c) but would continue their discussions and notify the Office, on or before August 10, 2005, as to whether they would seek such an adjustment.

                    Pursuant to § 251.63(b) of the CARP rules, the Library published in the                     **Federal Register**                     the proposed adjustments to the percentages of gross receipts paid by cable systems and the gross receipts limitations. 70 FR 41650 (July 20, 2005). Section 251.63(b) provides that the Library “may adopt the rate embodied in the proposed settlement without convening an arbitration panel, provided that no opposing comment is received by the Librarian [of Congress] from a party with an intent to participate in a CARP proceeding.” 37 CFR 251.63(b). No comments or Notices of Intent to Participate were received, enabling publication of today's final regulations adopting the proposed agreement.                

These regulations are effective as of July 1, 2005, which means that the new cable rates and the gross receipts limitations are applicable to the second accounting period of 2005 and thereafter. Payment of royalties calculated on the basis of the new rates shall be due no later than March 1, 2006, for the accounting period beginning on July 1, 2005, and ending on December 31, 2005.

                    The parties to this proceeding have also notified the Copyright Office that they will not seek an adjustment of the 3.75% rate set forth in § 256.2(c). NCTA filed its notice with the Copyright Office on August 2, 2005, and a joint notice of intent not to seek adjustment of the 3.75% rate was filed on August 10, 2005, on behalf of the remaining parties. As no further adjustments of the cable rates are to be considered, the Library is terminating this proceeding, effective as of October 6, 2005. In future years, proceedings to adjust the section 111 cable royalty rates shall be considered by the Copyright Royalty Judges under a new program established by Congress with the passage of the Copyright Royalty and Distribution Reform Act of                           ( print page 58311)                        2004, Public Law 108-419, 118 Stat. 2341.                

# List of Subjects

## *37 CFR Part 201*

Copyright, Procedures.

## *37 CFR Part 256*

Cable television, Royalties.

## Final Regulations

For the reasons set forth in the preamble, the Library amends 37 CFR parts 201 and 256 as follows:

# PART 201—GENERAL PROVISIONS

1. The authority citation for part 201 continues to read as follows: 

Authority:17 U.S.C. 702

§ 201.17 

2. Section 201.17 is amended as follows: 

a. In paragraph (d)(2), by removing “$379,600” each place it appears and adding “$527,600” in its place; 

b. In paragraph (e)(12), by removing “$98,600” and adding “$137,100” in its place; and 

c. In paragraph (g)(2)(ii), by removing “0.956” and adding “1.013” in its place. 

# PART 256—ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE

3. The authority citation for part 256 continues to read as follows: 

Authority:17 U.S.C. 702, 802

§ 256.2 

4. Section 256.2 is amended as follows: 

a. In paragraph (a) introductory text, by removing the phrase “the second semiannual accounting period of 2000” and adding the phrase “the second semiannual accounting period of 2005” in its place; 

b. In paragraph (a)(1), by removing “.956” and adding “1.013” in its place; 

c. In paragraph (a)(2), by removing “.956” and adding “1.013” in its place; 

d. In paragraph (a)(3), by removing “.630” and adding “.668” in its place; 

e. In paragraph (a)(4), by removing “.296” and adding “.314” in its place; 

f. In paragraph (b) introductory text, by removing the phrase “the second semiannual accounting period of 2000” and adding the phrase “the second semiannual accounting period of 2005” in its place; 

g. In paragraph (b)(1), by removing “$189,800” each place it appears and adding “$263,800” in its place, and by removing $7,400” and adding “$10,400” in its place; and 

h. In paragraph (b)(2), by removing “$189,800” each place it appears, and adding “$263,800” in its place, and by removing “$379,600” each place it appears and adding “$527,600” in its place. 

Dated: September 13, 2005

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.

# Footnotes

1.                             Unless otherwise noted, all references are to chapter 8 of title 17 of the United States Code as in effect prior to May 31, 2005, the effective date of the Copyright Royalty and Distribution Reform Act of 2004.                    
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[FR Doc. 05-20096 Filed 10-5-05; 8:45 am]

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