Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Proposed Rules 20197

1For large cable systems which retransmit only

local broadcast signals, there is still a minimum

royalty fee which must be paid. This minimum fee

is not applied, however, once the cable system

carries one or more distant signals.

Authority: 33 U.S.C. 1233; 49 CFR 1.46 and

33 CFR 100.35.

2. A permanent section, 100.116, is

added to read as follows:

§ 100.116 Swim Buzzards Bay Day, New

Bedford, MA.

(a) Regulated area. All waters of the

Acushnet River within 200 feet of

participating swimmers.

(b) Special local regulations. (1) The

Coast Guard patrol commander may

delay, modify, or cancel the race as

conditions or circumstances require.

(2) No person or vessel may enter,

transit, or remain in the regulated area

unless participating in the event or

unless authorized by the Coast Guard

patrol commander.

(3) Vessels encountering emergencies

which require transit through the

regulated area should contact the coast

Guard patrol commander on VHF

Channel 16. In the event of an

emergency, the Coast Guard patrol

commander may authorize a vessel to

transit through the regulated area with

a Coast Guard designated escort.

(4) All persons and vessels shall

comply with the instructions of the

Coast Guard on-scene patrol

commander. On-scene patrol personnel

include commissioned, warrant, and

petty officers of the U.S. Coast Guard.

Upon hearing five or more short blasts

from a U.S. Coast Guard vessel, the

operator of a vessel shall proceed as

directed. Members of the Coast Guard

Auxiliary may also be present to inform

vessel operators of this regulation and

other applicable laws.

(c) Effective period. This section is in

effect from 10 a.m. to 12 p.m. on July

28, 1996, and each year thereafter on a

date and times published in the Federal

Register.

Dated: April 23, 1996.

J.L. Linnon,

Rear Admiral, U.S. Coast Guard Commander,

First Coast Guard District.

[FR Doc. 96–11237 Filed 5–3–96; 8:45 am]

BILLING CODE 4910–14–M

LIBRARY OF CONGRESS

Copyright Office

37 CFR Ch. II

[Docket No. 96–2]

Eligibility for the Cable Compulsory

License

AGENCY: Copyright Office, Library of

Congress.

ACTION: Notice of inquiry.

SUMMARY: The Copyright Office of the

Library of Congress is opening a

rulemaking proceeding to consider the

eligibility for the cable compulsory

license of open video systems of

telephone companies which retransmit

broadcast signals. The Office requests

interested parties to submit comments

as to whether, and what extent, open

video systems may make use of the

cable compulsory license.

DATES: Comments should be received on

or before July 5, 1996. Reply comments

are due on or before June 5, 1996.

ADDRESSES: If delivered BY MAIL,

fifteen copies of written comments

should be addressed to Office of the

General Counsel, Copyright GC/I&R, PO

Box 70400, Southwest Station,

Washington, DC 20024. If delivered BY

HAND, fifteen copies of written

comments should be brought to: Office

of the General Counsel, Copyright

Office, James Madison Memorial

Building, Room LM–407, First and

Independence Avenue, SE.,

Washington, DC 20540.

FOR FURTHER INFORMATION CONTACT:

Marilyn J. Kretsinger, Acting General

Counsel, or William Roberts, Senior

Attorney for Compulsory Licenses,

Telephone (202) 707–8380 or Telefax

(202) 707–8366.

SUPPLEMENTARY INFORMATION:

Background

Section 111 of the Copyright Act, 17

U.S.C., grants a compulsory copyright

license to cable television systems for

the retransmission of over-the-air

broadcast stations to their subscribers.

In exchange for the license, cable

operators submit royalty payments,

along with statements of account

detailing their retransmissions, to the

Copyright Office on a semi-annual basis,

which deposits the royalties with the

United States Treasury in interest

bearing accounts for later distribution to

copyright owners of non-network

broadcast programming.

Cable systems determine their royalty

payments according to a calculation

formula devised by Congress in 1976. 17

U.S.C. 111(d). Payments are made based

upon a cable system’s gross receipts

from subscribers for the retransmission

of broadcast signals. The statute

subdivides cable systems, based on their

gross receipts totals, into three

categories: Small, medium and large.

Small systems pay a fixed amount

without regard to the number of

broadcast signals they retransmit, while

medium-sized systems pay a royalty

within a specified range, with a

maximum amount, based on the number

of signals they retransmit.

Large cable systems, which pay over

ninety percent of royalties submitted by

cable systems, calculate their royalties

according to the number of distant

broadcast signals which they retransmit

to their subscribers.1 These cable

systems pay a percentage of their gross

receipts for each distant signal they

retransmit, and different royalty rates

apply to different signals, depending

upon the total number of distant signals

carried. Determining when a broadcast

signal is distant, what rate must be

applied to it, and the royalty due for the

signal is, for the most part, determined

by reference to the rules and regulations

of the Federal Communications

Commission governing cable systems

that were in effect on April 15, 1976.

Copyright payments under section 111

of the Copyright Act today are,

therefore, dependent upon the manner

in which the cable television industry

was regulated in 1976.

Section 111(f) defines a ‘‘cable

system’’ as follows:

A ‘‘cable system’’ is a facility, located in

any State, Territory, Trust Territory, or

Possession, that in whole or in part receives

signals transmitted or programs broadcast by

one or more television broadcast stations

licensed by the Federal Communications

Commission, and makes secondary

transmissions of such signals or programs by

wires, cables, microwave, or other

communications channels to subscribing

members of the public who pay for such

service. For purposes of determining the

royalty fee under subsection (d)(1), two or

more cable systems in contiguous

communities under common ownership or

control or operating from one head-end shall

be considered as one system.

17 U.S.C. 111(f).

At the time of passage of the

Copyright Act, the only type of

retransmission system serving

subscribers with broadcast programming

was traditional wired cable systems

regulated as such by the FCC.

Consequently, it was generally well

understood in 1976 what was meant by

‘‘cable system’’ for purposes of section

111. However, beginning in the early to

mid-1980’s, retransmission services

other than traditional wired cable

systems came into existence. Like

traditional wired cable systems, these

other services were capable of

delivering broadcast signals to their

subscribers, and they sought eligibility

for the section 111 license.

The addition of new retransmission

providers significantly altered the
20198 Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Proposed Rules

2The proceeding initially considered the

eligibility of only SMATVs and wireless cable. 51

FR 36706 (October 15, 1986). The comment period

was later reopened to consider satellite carriers. 52

FR 28731 (August 3, 1987).

3The Office has yet to issue final regulations for

SMATVs, but has made a preliminary finding that

they are eligible for 17 U.S.C. 111. See 56 FR 31593

(July 11, 1991).

4Examples are the sports exclusivity, network

non-duplication, and syndicated exclusivity rules.

5Section 653(c)(4) comes from the Senate bill,

which stated ‘‘ [n]othing in this Act precludes a

complexion of the video marketplace as

it existed at the time of passage of the

Copyright Act. Not only did new faces

appear, but the FCC of the late 70’s and

early 80’s took a decidedly deregulatory

stance with respect to the industry. The

Commission lifted its distant signal and

syndicated exclusivity restrictions, see

Malrite T.V. of New York, Inc. v. FCC,

652 F.2d 1140 (2d Cir. 1981), cert.

denied sub. nom., National Football

League, Inc. v. FCC, 454 U.S. 1143

(1982), which formed the bedrock of

determining section 111 copyright fees,

and the Commission’s must-carry rules

fell to court challenge. See Quincy Cable

T.V., Inc. v. FCC, 768 F.2d 1434 (D.C.

Cir. 1985), cert. denied, 476 U.S. 1169

(1986) and Century Communications v.

FCC, 835 F.2d 292 (D.C. Cir. 1987), cert.

denied, 486 U.S. 1032 (1988). Thus,

three sets of rules—distant signal

carriage, syndicated exclusivity and

must-carry—while still applicable by

statute to the compulsory license royalty

calculation, no longer had a life of their

own. The Copyright Office has been

attempting to deal with the

consequences of these eliminations ever

since.

With new retransmission providers

seeking to use 17 U.S.C. 111, the

Copyright Office opened a rulemaking

proceeding to consider the issue.

Specifically, the Office considered the

eligibility of wireless cable systems

(MMDS and MDS), satellite master

antenna television systems (SMATVs),

and satellite carriers.2 In a Notice of

Proposed Rulemaking, the Office

proposed new regulations that would

govern the conditions under which

SMATVs would qualify for compulsory

licensing under section 111, announced

a preliminary decision that wireless

cable was not eligible, and a policy

decision that satellite carriers were not

eligible. 56 FR 31580 (July 11, 1991).

The Office confirmed that wireless cable

and satellite carriers were not eligible in

final regulations. 57 FR 3284 (January

29, 1992).3 The decision, with respect to

satellite carriers, has withstood judicial

challenge. See Satellite Broadcasting

Communications Association v. Oman,

17 F.3d 344 (11th Cir.), cert. denied, 115

S.Ct. 88 (1994).

In late 1994, Congress passed

legislation to overturn the Office’s final

regulations with respect to wireless

cable. The Satellite Home Viewer Act of

1994, Pub.L.No. 103–369, amended the

section 111(f) definition of a ‘‘cable

system’’ to specifically include systems

which retransmit broadcast

programming via microwave. It is now

clear that wireless cable systems are

eligible for section 111. Satellite

carriers, however, still do not qualify,

and must use the license found in 17

U.S.C. 119.

Telecommunications Act

The Copyright Office’s SMATV,

wireless cable and satellite carrier

rulemaking proceeding was prompted

by a video marketplace in the 80’s that

differed significantly from that of the

70’s. It is readily apparent that the video

marketplace of the 90’s and the future

will be ever more different.

In February 1996, Congress enacted

the Telecommunications Act. Pub.L.No.

104–104, 110 Stat. 56 (1996). Among the

sweeping reforms and actions of this

legislation is recognition and

authorization of telephone company

entry into the video marketplace.

Section 653 of the Communications Act,

as amended, now provides that ‘‘[a]

local exchange carrier may provide

cable service to its cable service

subscribers in its telephone service area

through an open video system that

complies with this section.’’ 47 U.S.C.

653(a)(1).

Prior to passage of the

Telecommunications Act, the telephone

companies had been prohibited from

entering the cable television business

within their own service areas. The

Federal Communications Commission

was, however, considering the

possibility of authorizing telephone

companies to lease channel capacity

over its phone lines to third parties who

would provide video service to phone

company subscribers. See First Report &

Order in Docket No. 87–266, 56 FR

65464 (December 17, 1991). Known as

video dialtone, the FCC issued

experimental licenses to a handful of

video dialtone operators, several of

whom have already begun service to

subscribers. These operators provide

original and source licensed

programming, as well as retransmission

of over-the-air broadcast signals.

The Telecommunications Act has

terminated the FCC’s video dialtone

proceeding by expressly allowing

telephone entry into cable through

‘‘open video systems.’’ See section

302(b)(3); Report and Order in Docket

No. 96–46, 61 FR 10475 (March 14,

1996)(eliminating video dialtone

rulemaking proceeding). Under the

Telecommunications Act’s

authorization, telephone companies can

act not only as common carriers

providing the pipeline between third

party program providers and

subscribers, but can offer programming

services themselves. This creates a

possibility, with respect to broadcast

retransmission, of several program

providers using the same facility to

provide subscribers with broadcast

signals.

The structure and appearance of open

video systems remains largely

unresolved at this time. Private industry

is still very much in the planning stage,

while the FCC is conducting a

rulemaking proceeding to determine the

amount and extent of regulation that

open video systems will require. See

Notice of Proposed Rulemaking in

Docket No. 96–46, 61 FR 10496 (March

14, 1996). The Telecommunications Act

directs the Commission to apply much

of its cable regulations to open video

systems,4 but of course the FCC’s cable

rules in effect in 1976 will have no

application to such systems.

While Congress has cleared the path

for telephone entry into the broadcast

retransmission business for

communications law purposes, it has

not taken any action to resolve the

copyright licensing aspects. Section

653(c)(4) of the Communications Act, as

amended, provides that ‘‘[n]othing in

this Act precludes a video programming

provider making use of an open video

system from being treated as an operator

of a cable system for purposes of section

111 of title 17, United States Code.’’

Some have argued that this provision is

a congressional affirmation that open

video systems are eligible for section

111 licensing. The plain language of the

provision, however, belies that

argument. Section 653(c)(4) simply

states that nothing in the

Telecommunications Act, by itself, shall

be construed as preventing open video

systems from being considered as a

section 111 cable system; it says nothing

about whether such systems can be

considered cable systems under the

terms of section 111 of the Copyright

Act. It matters little to the copyright

inquiry that an open video system is a

cable system under the

Telecommunications Act if it is not a

cable system under the Copyright Act.

Further, there is not any legislative

history to the Telecommunications Act

that demonstrates congressional

intention to amend or otherwise clarify

the eligibility of open video systems for

section 111 under the Copyright Act.5
Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Proposed Rules 20199

video programming provider making use of a

common carrier video platform from being treated

as an operator of a cable system for purposes of

section 111 of title 17, United States Code.’’

6 During the legislative process of the

Telecommunications Act, proposals were

considered to specifically address telephone

company eligibility for 17 U.S.C. 111. Such

amendments, however, were not included in the

Telecommunications Act.

Recent Filings

Although telephone entry into the

cable business was under consideration

at the FCC for some time before

enactment of the Telecommunications

Act, the Copyright Office has not

considered such entry in terms of the

cable compulsory license.6 As noted

above, through agency interpretation

and legislative amendment, the section

111 license is available to traditional

wired cable systems, wireless cable

systems, and SMATV systems. The

Office now must consider the eligibility

of open video systems.

For the second accounting period of

1995, the Copyright Office has received

statements of account and royalty filings

from three systems identifying

themselves as video dialtone operators.

Interface Communications Group, Inc.

identifies itself as a ‘‘video dialtone

system being conducted by U.S. West

Communications, Inc. in Omaha,

Nebraska.’’ California Standard

Television Corp. identifies itself as a

video dialtone programmer whose

‘‘physical facilities’’ are owned by

Pacific Bell. And Anchor Pacific Corp.

also identifies itself as a video dialtone

programmer whose ‘‘physical facilities’’

are owned by Pacific Bell.

These three filings represent the first

claims of eligibility under 17 U.S.C. 111

by an open video system (formerly

known as video dialtone). The Office

expects that the number of filings for

future accounting periods will increase,

particularly in light of the

Telecommunications Act. We, therefore,

feel that now is an appropriate time to

open a rulemaking proceeding to

consider the eligibility issue.

Request for Comments

The threshold issue in this

rulemaking proceeding is whether open

video systems are cable systems within

the meaning of 17 U.S.C. 111. The

initial filings we have received appear

to be from independent program

providers leasing access on an open

video system created by a telephone

company. The Telecommunications Act

now allows telephone companies to act

as program providers as well. We solicit

comment on whether both independent

program providers and telephone

companies should be eligible for section

111 and, if so, under what

circumstances. We also seek comment

as to whether a telephone company

providing an open video system, and

not itself engaged in retransmitting

broadcast programming, is eligible for

the passive carrier exemption of section

111(a)(3), and under what

circumstances.

In addressing the threshold eligibility

issue, we request that the commentators

direct their responses to a consideration

of 17 U.S.C. 111 as a whole, as opposed

to solely the section 111(f) definition of

a ‘‘cable system.’’ In the wireless/

SMATV/satellite carrier rulemaking

proceeding some commentators focused

on the section 111(f) definition, and did

not discuss how the rest of section 111

might or might not apply to a particular

system. The Office stated in the 1992

final rules that section 111 must be

interpreted as a whole in determining

whether a particular retransmission

provider is eligible for compulsory

licensing. See 57 FR 3292 (1992)

(‘‘[E]ach part of a section should be

construed in connection with every

other part or section so as to produce a

harmonious whole. Thus, it is not

proper to confine interpretation to the

one section to be construed,’’ citing 2A

Sutherland, Stat. Const. 46.05 (5th ed.

1992)). Consequently, we direct the

commentators’ attention to the

particular applicability of all 17 U.S.C.

111 provisions, particularly the royalty

calculation scheme. In particular, we are

interested in how the 1976 distant

signal carriage and syndicated

exclusivity rules might or might not be

applicable to open video systems. We

are also interested in how an open video

system would apply the 1976 mustcarry rules, plus ADI, to determine

local/distant status, particularly where

there is not an established traditional

wired cable system operating in the

same service area as the open video

system. And, we are interested in

knowing how the ‘‘contiguous

communities’’ provision of the section

111(f) cable definition might or might

not apply to open video systems.

Aside from the threshold eligibility

question, the Office directs the

commentators to practical questions

arising from the filing of statements of

account and payment of royalty fees.

Thus, we request commentators favoring

17 U.S.C. 111 eligibility of open video

systems to detail what changes, if any,

are required in the Copyright Office

statement of account forms to

accommodate open video system filings.

We are especially interested in a

detailed analysis of how an open video

system would calculate its gross

receipts, and what fees and charges

would be included. We also seek

comment as to whether the statement of

account form should require all filers to

identify what type of cable system they

are (SMATV, wireless, traditional wired,

etc.). Finally, we seek comment as to

how current Office policies and

practices, such as application of the

3.75% rate, non-allocation among

subscriber groups, and the

grandfathering of broadcast signals

would apply.

In directing interested parties’

attention to the above-identified issues,

we do not wish to limit the scope or

focus of the comments in any way. We

therefore welcome all comments

regarding application of 17 U.S.C. 111 to

open video systems.

Dated: May 1, 1996.

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.

[FR Doc. 96–11226 Filed 5–3–96; 8:45 am]

BILLING CODE 1410–30–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[CA 162–2–0002b; FRL–5466–2]

Approval and Promulgation of State

Implementation Plans; California State

Implementation Plan Revision, San

Joaquin Valley Unified Air Pollution

Control District, Santa Barbara County

Air Pollution Control District, South

Coast Air Quality Management District

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: EPA is proposing to approve

revisions to the California State

Implementation Plan (SIP) which

concern the control of volatile organic

compound (VOC) emissions from

aerospace assembly and component

manufacturing operations, motor

vehicle and mobile equipment coating

operations, crude oil production and

separation, and storage of reactive

organic compound liquids (ROC).

The intended effect of proposing

approval of these rules is to regulate

emissions of VOCs in accordance with

the requirements of the Clean Air Act,

as amended in 1990 (CAA or the Act).

In the Final Rules Section of this

Federal Register, the EPA is approving

the state’s SIP revision as a direct final

rule without prior proposal because the

Agency views this as a noncontroversial