Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Proposed Rules 57033 

1The parties were unable to reach agreement 

regarding the rates and terms for the use of musical 

works in the making and distributing of physical 

phonorecords, permanent digital downloads, and 

ringtones. Consequently, the rates and terms for 

these products were the subject of a full hearing 

before the Judges. The Judges will determine these 

rates and terms, and those rates and terms also will 

be contained in proposed Part 385 of title 37 of the 

Code of Federal Regulations. Today’s notice of 

proposed rulemaking discusses only the proposed 

regulations regarding limited downloads, 

interactive streaming and incidental digital 

phonorecord deliveries. 

disputes between the decedent’s family 

and the videographer or videography 

company. 

§ 553.46 Penalties. 

Any person or entity that violates the 

provisions of this regulation may be 

barred from entering the cemetery, 

including participating in memorial 

services and ceremonies within the 

cemetery, for two (2) years from the date 

of such violation. Individuals may also 

be subject to the penalties set out in 

Title 36 Code of Federal Regulations, 

Chapter 1, Section 1.5(f). 

[FR Doc. E8–22925 Filed 9–30–08; 8:45 am] 

BILLING CODE 3710–08–P 

LIBRARY OF CONGRESS 

Copyright Royalty Board 

37 CFR Part 385 

[Docket No. 2006–3 CRB DPRA] 

Mechanical and Digital Phonorecord 

Delivery Rate Determination 

Proceeding 

AGENCY: Copyright Royalty Board, 

Library of Congress. 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The Copyright Royalty Judges 

are publishing for comment proposed 

regulations that set the rates and terms 

for the use of musical works in limited 

downloads, interactive streaming and 

incidental digital phonorecord 

deliveries. 

DATES: Comments and objections, if any, 

are due no later than October 31, 2008. 

ADDRESSES: Comments and objections 

may be sent electronically to 

crb@loc.gov. In the alternative, send an 

original, five copies, and an electronic 

copy on a CD either by mail or hand 

delivery. Please do not use multiple 

means of transmission. Comments and 

objections may not be delivered by an 

overnight delivery service other than the 

U.S. Postal Service Express Mail. If by 

mail (including overnight delivery), 

comments and objections must be 

addressed to: Copyright Royalty Board, 

P.O. Box 70977, Washington, DC 20024– 

0977. If hand delivered by a private 

party, comments and objections must be 

brought to the Copyright Office Public 

Information Office, Library of Congress, 

James Madison Memorial Building, 

Room LM–401, 101 Independence 

Avenue, SE., Washington, DC 20559– 

6000. If delivered by a commercial 

courier, comments and objections must 

be delivered between 8:30 a.m. and 4 

p.m. to the Congressional Courier 

Acceptance Site located at 2nd and D 

Street, NE., Washington, DC, and the 

envelope must be addressed to: 

Copyright Royalty Board, Library of 

Congress, James Madison Memorial 

Building, LM–403, 101 Independence 

Avenue, SE., Washington, DC 20559– 

6000. 

FOR FURTHER INFORMATION CONTACT: 

Richard Strasser, Senior Attorney, or 

Gina Giuffreda, Attorney-Advisor, by 

telephone at (202) 707–7658 or e-mail at 

crb@loc.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Section 115 of the Copyright Act, title 

17 of the United States Code, also 

known as the mechanical compulsory 

license, requires a copyright owner of a 

nondramatic musical work to grant a 

license to any person who wants to 

make and distribute phonorecords of 

that work, provided that the copyright 

owner has allowed phonorecords of the 

work to be produced and distributed, 

and that the licensee complies with the 

statute and regulations. 

On November 1, 1995, Congress 

passed the Digital Performance Right in 

Sound Recordings Act of 1995 

(‘‘DPRSRA’’), Public Law No. 104–39, 

109 Stat. 336, which extended the 

mechanical license to digital 

phonorecord deliveries. 17 U.S.C. 

115(c)(3). Consequently, the license now 

covers digital transmissions of 

phonorecords in addition to the 

physical copies such as compact discs, 

vinyl and cassette tapes. 

Until it was abolished in 1993, the 

Copyright Royalty Tribunal (‘‘CRT’’) had 

authority to adjust the statutory rates for 

the making and distributing of physical 

phonorecords and did so in 1987. See 

1987 Adjustment of the Mechanical 

Royalty Rate, Docket No. CRT 87–3–87 

MRA, 52 FR 22637 (June 15, 1987). In 

1993, Congress replaced the CRT with a 

system under which the mechanical 

royalty rate was determined by 

Copyright Arbitration Royalty Panels 

(‘‘CARP’’) under the supervision of the 

Librarian of Congress. See Copyright 

Royalty Tribunal Reform Act of 1993, 

Public Law No. 103–198, 107 Stat. 2304. 

Unlike the CRT, the CARPs were 

authorized to adopt terms, in addition to 

setting the rates, for the mechanical 

license. The rates and terms for the 

mechanical license were adjusted 

periodically under the CARP system 

and appear in 37 CFR Part 255. 

However, in the Copyright Royalty and 

Distribution Reform Act of 2004, Public 

Law No. 108–419, Congress transferred 

jurisdiction over these rates and terms 

to the Copyright Royalty Judges 

(‘‘Judges’’). 17 U.S.C. 801(b)(1). 

On January 9, 2006, pursuant to 17 

U.S.C. 803(b)(1)(A)(i)(V), the Judges 

published a notice in the Federal 

Register announcing the 

commencement of the proceeding to 

determine rates and terms for the 

compulsory license under section 115 

and requesting interested parties to 

submit their petitions to participate. 

Adjustment or Determination of 

Compulsory License Rates for Making 

and Distributing Phonorecords, Docket 

No. 2006–3 CRB DPRA, 71 FR 1454 

(January 9, 2006). Petitions to 

participate were received from the 

following entities: Royalty Logic, Inc; 

the Songwriters Guild of America; the 

National Music Publishers’ Association, 

Inc., the Songwriters Guild of America, 

and the Nashville Songwriters 

Association International, jointly 

(collectively, ‘‘Copyright Owners’’); 

Apple Computer, Inc.; America Online, 

Inc.; RealNetworks, Inc.; Napster, LLC; 

Sony Connect, Inc.; Digital Media 

Association (‘‘DiMA’’); Yahoo! Inc.; 

MusicNet, Inc.; MTV Networks, Inc.; 

and Recording Industry Association of 

America (‘‘RIAA’’). 

The Judges set the schedule for the 

proceeding for both the direct and 

rebuttal phases of the proceeding, 

including the dates for the filing of 

written statements and the dates for oral 

testimony for each phase. During the 

oral presentation of the rebuttal phase, 

the parties informed the Judges that they 

had reached a settlement regarding the 

rates and terms for ‘‘limited downloads 

and interactive streaming, including all 

known incidental digital phonorecord 

deliveries.’’ See Joint Motion to Adopt 

Procedures for Submission of Partial 

Settlement at 1 (filed May 15, 2008). 

The proposed rates and terms codifying 

the settlement agreement were filed on 

September 22, 2008.1

Section 801(b)(7) of the Copyright Act 

authorizes the Judges to adopt rates and 

terms negotiated by ‘‘some or all of the 

participants in a proceeding at any time 

during the proceeding’’ provided they 

are submitted to the Judges for approval. 

This section provides that in such event: 


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57034 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Proposed Rules 

(i) The Copyright Royalty Judges shall 

provide to those that would be bound by the 

terms, rates, or other determination set by 

any agreement in a proceeding to determine 

royalty rates an opportunity to comment on 

the agreement and shall provide to 

participants in the proceeding under section 

803(b)(2) that would be bound by the terms, 

rates, or other determination set by the 

agreement an opportunity to comment on the 

agreement and object to its adoption as a 

basis for statutory terms and rates; and 

(ii) The Copyright Royalty Judges may 

decline to adopt the agreement as a basis for 

statutory terms and rates for participants that 

are not parties to the agreement, if any 

participant described in clause (i) objects to 

the agreement and the Copyright Royalty 

Judges conclude, based on the record before 

them if one exists, that the agreement does 

not provide a reasonable basis for setting 

statutory terms or rates. 

17 U.S.C. 801(b)(7)(A). Rates and terms 

adopted pursuant to this provision are 

binding on all copyright owners of 

musical works and those using such 

musical works in limited downloads, 

interactive streaming and incidental 

digital phonorecord deliveries. 

As part of this notice of proposed 

rulemaking, the Judges are modifying 

one aspect of the proposed rates and 

terms. The parties have included 

language in their proposal that states 

that such rates have no precedential 

effect and may not be introduced or 

relied upon in any governmental or 

judicial proceeding. The Judges decline 

to include such language within our 

regulations. Our task, as set forth in 

section 115 and chapter 8 of the 

Copyright Act, is to adopt rates and 

terms for the compulsory license for the 

making and distributing of physical and 

digital phonorecords. It is not our task 

to offer evaluations, limitations or 

characterizations of the rates and terms, 

or make statements about their use or 

value in proceedings other than this 

one. See Noncommercial Educational 

Broadcasting Statutory License, Docket 

No. 2006–2 CRB NCBRA, 72 FR 19138, 

19139 (April 17, 2007). 

List of Subjects in 37 CFR Part 385 

Copyright, Phonorecords, Recordings. 

Proposed Regulations 

For the reasons set forth in the 

preamble, the Copyright Royalty Judges 

propose to add Part 385 to Chapter III 

of title 37 of the Code of Federal 

Regulations to read as follows: 

PART 385—RATES AND TERMS FOR 

USE OF MUSICAL WORKS UNDER 

COMPULSORY LICENSE FOR MAKING 

AND DISTRIBUTING PHYSICAL AND 

DIGITAL PHONORECORDS 

Subpart A—[Reserved] 

Subpart B—Interactive Streaming, 

Other Incidental Digital Phonorecord 

Deliveries and Limited Downloads 

Sec. 

385.10 General. 

385.11 Definitions. 

385.12 Calculation of royalty payments in 

general. 

385.13 Minimum royalty rates and 

subscriber-based royalty floors for 

specific types of services. 

385.14 Promotional royalty rate. 

385.15 Timing of payments. 

385.16 Reproduction and distribution rights 

covered. 

385.17 Effect of rates. 

Authority: 17 U.S.C. 115, 801(b)(1), 

804(b)(4). 

§ 385.10 General. 

(a) This subpart establishes rates and 

terms of royalty payments for interactive 

streams and limited downloads of 

musical works by subscription and 

nonsubscription digital music services 

in accordance with the provisions of 17 

U.S.C. 115. 

(b) Legal compliance. A licensee that 

makes or authorizes interactive streams 

or limited downloads of musical works 

through subscription or nonsubscription 

digital music services pursuant to 17 

U.S.C. 115 shall comply with the 

requirements of that section, the rates 

and terms of this subpart, and any other 

applicable regulations. 

§ 385.11 Definitions. 

For purposes of this subpart, the 

following definitions shall apply: 

Interactive stream means a stream of 

a sound recording of a musical work, 

where the performance of the sound 

recording by means of the stream is not 

exempt under 17 U.S.C. 114(d)(1) and 

does not in itself or as a result of a 

program in which it is included qualify 

for statutory licensing under 17 U.S.C. 

114(d)(2). An interactive stream is an 

incidental digital phonorecord delivery 

under 17 U.S.C. 115(c)(3)(C) and (D). 

Licensee means a person that has 

obtained a compulsory license under 17 

U.S.C. 115 and its implementing 

regulations. 

Licensed activity means interactive 

streams or limited downloads of 

musical works, as applicable. 

Limited download means a digital 

transmission of a sound recording of a 

musical work to an end user, other than 

a stream, that results in a specifically 

identifiable reproduction of that sound 

recording that is only accessible for 

listening for— 

(1) An amount of time not to exceed 

1 month from the time of the 

transmission (unless the service, in lieu 

of retransmitting the same sound 

recording as another limited download, 

separately and upon specific request of 

the end user made through a live 

network connection, reauthorizes use 

for another time period not to exceed 1 

month), or in the case of a subscription 

transmission, a period of time following 

the end of the applicable subscription 

no longer than a subscription renewal 

period or 3 months, whichever is 

shorter; or 

(2) A specified number of times not to 

exceed 12 (unless the service, in lieu of 

retransmitting the same sound recording 

as another limited download, separately 

and upon specific request of the end 

user made through a live network 

connection, reauthorizes use of another 

series of 12 or fewer plays), or in the 

case of a subscription transmission, 12 

times after the end of the applicable 

subscription. 

(3) A limited download is a general 

digital phonorecord delivery under 17 

U.S.C. 115(c)(3)(C) and (D). 

Offering means a service’s offering of 

licensed activity that is subject to a 

particular rate set forth in § 385.13(a) 

(e.g., a particular subscription plan 

available through the service). 

Promotional royalty rate means the 

statutory royalty rate of zero in the case 

of certain promotional interactive 

streams and certain promotional limited 

downloads, as provided in § 385.14. 

Publication date means [date 

regulations adopted as final]. 

Record company means a person or 

entity that 

(1) Is a copyright owner of a sound 

recording of a musical work; 

(2) In the case of a sound recording of 

a musical work fixed before February 

15, 1972, has rights to the sound 

recording, under the common law or 

statutes of any State, that are equivalent 

to the rights of a copyright owner of a 

sound recording of a musical work 

under title 17, United States Code; 

(3) Is an exclusive licensee of the 

rights to reproduce and distribute a 

sound recording of a musical work; or 

(4) Performs the functions of 

marketing and authorizing the 

distribution of a sound recording of a 

musical work under its own label, under 

the authority of the copyright owner of 

the sound recording. 

Relevant page means a page 

(including a web page, screen or 

display) from which licensed activity 

offered by a service is directly available 


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to end users, but only where the offering 

of licensed activity and content that 

directly relates to the offering of 

licensed activity (e.g., an image of the 

artist or artwork closely associated with 

such offering, artist or album 

information, reviews of such offering, 

credits and music player controls) 

comprises 75% or more of the space on 

that page, excluding any space occupied 

by advertising. A licensed activity is 

directly available to end users from a 

page if sound recordings of musical 

works can be accessed by end users for 

limited downloads or interactive 

streams from such page (in most cases 

this will be the page where the limited 

download or interactive stream takes 

place). 

Service means that entity (which may 

or may not be the licensee) that, with 

respect to the licensed activity, 

(1) Contracts with or has a direct 

relationship with end users in a case 

where a contract or relationship exists, 

or otherwise controls the content made 

available to end users; 

(2) Is able to report fully on service 

revenue from the provision of the 

licensed activity to the public, and to 

the extent applicable, verify service 

revenue through an audit; and 

(3) Is able to report fully on usage of 

musical works by the service, or procure 

such reporting, and to the extent 

applicable, verify usage through an 

audit. 

Service revenue. (1) Subject to 

paragraphs (2) through (5) of the 

definition of ‘‘Service revenue,’’ and 

subject to U.S. Generally Accepted 

Accounting Principles, service revenue 

shall mean the following: 

(i) All revenue recognized by the 

service from end users from the 

provision of licensed activity; 

(ii) All revenue recognized by the 

service by way of sponsorship and 

commissions as a result of the inclusion 

of third-party ‘‘in-stream’’ or ‘‘indownload’’ advertising as part of 

licensed activity (i.e., advertising placed 

immediately at the start, end or during 

the actual delivery, by way of 

interactive streaming or limited 

downloads, as applicable, of a musical 

work); and 

(iii) All revenue recognized by the 

service, including by way of 

sponsorship and commissions, as a 

result of the placement of third-party 

advertising on a relevant page of the 

service or on any page that directly 

follows such relevant page leading up to 

and including the limited download or 

interactive streaming, as applicable, of a 

musical work; provided that, in the case 

where more than one service is actually 

available to end users from a relevant 

page, any advertising revenue shall be 

allocated between such services on the 

basis of the relative amounts of the page 

they occupy. 

(2) In each of the cases identified in 

paragraph (1) of the definition of 

‘‘Service revenue,’’ such revenue shall, 

for the avoidance of doubt, 

(i) Include any such revenue 

recognized by the service, or if not 

recognized by the service, by any 

associate, affiliate, agent or 

representative of such service in lieu of 

its being recognized by the service; 

(ii) Include the value of any barter or 

other nonmonetary consideration; 

(iii) Not be reduced by credit card 

commissions or similar payment 

process charges; and 

(iv) Except as expressly set forth in 

this subpart, not be subject to any other 

deduction or set-off other than refunds 

to end users for licensed activity that 

they were unable to use due to technical 

faults in the licensed activity or other 

bona fide refunds or credits issued to 

end users in the ordinary course of 

business. 

(3) In each of the cases identified in 

paragraph (1) of the definition of 

‘‘Service revenue,’’ such revenue shall, 

for the avoidance of doubt, exclude 

revenue derived solely in connection 

with services and activities other than 

licensed activity, provided that 

advertising or sponsorship revenue shall 

be treated as provided in paragraphs (2) 

and (4) of the definition of ‘‘Service 

revenue.’’ By way of example, the 

following kinds of revenue shall be 

excluded: 

(i) Revenue derived from non-music 

voice, content and text services; 

(ii) Revenue derived from other nonmusic products and services (including 

search services, sponsored searches and 

click-through commissions); and 

(iii) Revenue derived from music or 

music-related products and services that 

are not or do not include licensed 

activity. 

(4) For purposes of paragraph (1) of 

the definition of ‘‘Service revenue,’’ 

advertising or sponsorship revenue shall 

be reduced by the actual cost of 

obtaining such revenue, not to exceed 

15%. 

(5) Where the licensed activity is 

provided to end users as part of the 

same transaction with one or more other 

products or services that are not a music 

service engaged in licensed activity, 

then the revenue deemed to be 

recognized from end users for the 

service for the purpose of the definition 

in paragraph (1) of the definition of 

‘‘Service revenue’’ shall be the revenue 

recognized from end users for the 

bundle less the standalone published 

price for end users for each of the other 

component(s) of the bundle; provided 

that, if there is no such standalone 

published price for a component of the 

bundle, then the average standalone 

published price for end users for the 

most closely comparable product or 

service in the U.S. shall be used or, if 

more than one such comparable exists, 

the average of such standalone prices for 

such comparables shall be used. In 

connection with such a bundle, if a 

record company providing sound 

recording rights to the service 

(i) Recognizes revenue (in accordance 

with U.S. Generally Accepted 

Accounting Principles, and including 

for the avoidance of doubt barter or 

nonmonetary consideration) from a 

person or entity other than the service 

providing the licensed activity and; 

(ii) Such revenue is received, in the 

context of the transactions involved, as 

consideration for the ability to make 

interactive streams or limited 

downloads of sound recordings, then 

such revenue shall be added to the 

amounts expensed by the service for 

purposes of § 385.13(b). Where the 

service is the licensee, if the service 

provides the record company all 

information necessary for the record 

company to determine whether 

additional royalties are payable by the 

service hereunder as a result of revenue 

recognized from a person or entity other 

than the service as described in the 

immediately preceding sentence, then 

the record company shall provide such 

further information as necessary for the 

service to calculate the additional 

royalties and indemnify the service for 

such additional royalties. The sole 

obligation of the record company shall 

be to pay the licensee such additional 

royalties if actually payable as royalties 

hereunder; provided, however, that this 

shall not affect any otherwise existing 

right or remedy of the copyright owner 

nor diminish the licensee’s obligations 

to the copyright owner. 

Stream means the digital transmission 

of a sound recording of a musical work 

to an end user— 

(1) To allow the end user to listen to 

the sound recording, while maintaining 

a live network connection to the 

transmitting service, substantially at the 

time of transmission, except to the 

extent that the sound recording remains 

accessible for future listening from a 

streaming cache reproduction; 

(2) Using technology that is designed 

such that the sound recording does not 

remain accessible for future listening, 

except to the extent that the sound 

recording remains accessible for future 

listening from a streaming cache 

reproduction; and 


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(3) That is also subject to licensing as 

a public performance of the musical 

work. 

Streaming cache reproduction means 

a reproduction of a sound recording of 

a musical work made on a computer or 

other receiving device by a service 

solely for the purpose of permitting an 

end user who has previously received a 

stream of such sound recording to play 

such sound recording again from local 

storage on such computer or other 

device rather than by means of a 

transmission; provided that the user is 

only able to do so while maintaining a 

live network connection to the service, 

and such reproduction is encrypted or 

otherwise protected consistent with 

prevailing industry standards to prevent 

it from being played in any other 

manner or on any device other than the 

computer or other device on which it 

was originally made. 

Subscription service means a digital 

music service for which end users are 

required to pay a fee to access the 

service for defined subscription periods 

of 3 years or less (in contrast to, for 

example, a service where the basic 

charge to users is a payment per 

download or per play), whether such 

payment is made for access to the 

service on a standalone basis or as part 

of a bundle with one or more other 

products or services, and including any 

use of such a service on a trial basis 

without charge as described in 

§ 385.14(b). 

§ 385.12 Calculation of royalty payments 

in general. 

(a) Applicable royalty. Licensees that 

make or authorize licensed activity 

pursuant to 17 U.S.C. 115 shall pay 

royalties therefor that are calculated as 

provided in this section, subject to the 

minimum royalties and subscriberbased royalty floors for specific types of 

services provided in § 385.13, except as 

provided for certain promotional uses in 

§ 385.14. 

(b) Rate calculation methodology. 

Royalty payments for licensed activity 

shall be calculated as provided in 

paragraph (b) of this section. If a service 

includes different offerings, royalties 

must be separately calculated with 

respect to each such offering. Uses 

subject to the promotional royalty rate 

shall be excluded from the calculation 

of royalties due, as further described in 

this section and the following § 385.13. 

(1) Step 1: Calculate the All-In 

Royalty for the Service. For each 

accounting period, the all-in royalty for 

each offering of the service is the greater 

of 

(i) The applicable percentage of 

service revenue as set forth in paragraph 

(c) of this section (excluding any service 

revenue derived solely from licensed 

activity uses subject to the promotional 

royalty rate), and 

(ii) The minimum specified in 

§ 385.13 of the offering involved. 

(2) Step 2: Subtract Applicable 

Performance Royalties. From the 

amount determined in step 1 in 

paragraph (b)(1) of this section, for each 

offering of the service, subtract the total 

amount of royalties for public 

performance of musical works that has 

been or will be expensed by the service 

pursuant to public performance licenses 

in connection with uses of musical 

works through such offering during the 

accounting period that constitute 

licensed activity (other than licensed 

activity subject to the promotional 

royalty rate). While this amount may be 

the total of the service’s payments for 

that offering for the accounting period 

under its agreements with performing 

rights societies as defined in 17 U.S.C. 

101, it will be less than the total of such 

public performance payments if the 

service is also engaging in public 

performance of musical works that does 

not constitute licensed activity. In the 

latter case, the amount to be subtracted 

for public performance payments shall 

be the amount of such payments 

allocable to licensed activity uses (other 

than promotional royalty rate uses) 

through the relevant offering, as 

determined in relation to all uses of 

musical works for which the public 

performance payments are made for the 

accounting period. Such allocation shall 

be made on the basis of plays of musical 

works or, where per-play information is 

unavailable due to bona fide technical 

limitations as described in step 4 in 

paragraph (b)(4) of this section, using 

the same alternative methodology as 

provided in step 4. 

(3) Step 3: Determine the Payable 

Royalty Pool. This is the amount 

payable for the reproduction and 

distribution of all musical works used 

by the service by virtue of its licensed 

activity for a particular offering during 

the accounting period. This amount is 

the greater of 

(i) The result determined in step 2 in 

paragraph (b)(2) of this section, and 

(ii) The subscriber-based royalty floor 

resulting from the calculations 

described in § 385.13. 

(4) Step 4: Calculate the Per-Work 

Royalty Allocation for Each Relevant 

Work. This is the amount payable for 

the reproduction and distribution of 

each musical work used by the service 

by virtue of its licensed activity through 

a particular offering during the 

accounting period. To determine this 

amount, the result determined in step 3 

in paragraph (b)(3) of this section must 

be allocated to each musical work used 

through the offering. The allocation 

shall be accomplished by dividing the 

payable royalty pool determined in step 

3 for such offering by the total number 

of plays of all musical works through 

such offering during the accounting 

period (other than promotional royalty 

rate plays) to yield a per-play allocation, 

and multiplying that result by the 

number of plays of each musical work 

(other than promotional royalty rate 

plays) through the offering during the 

accounting period. For purposes of 

determining the per-work royalty 

allocation in all calculations under this 

step 4 only (i.e., after the payable 

royalty pool has been determined), for 

sound recordings of musical works with 

a playing time of over 5 minutes, each 

play on or after October 1, 2010 shall be 

counted as provided in paragraph (d) of 

this section. Notwithstanding the 

foregoing, if the service is not capable of 

tracking play information due to bona 

fide limitations of the available 

technology for services of that nature or 

of devices useable with the service, the 

per-work royalty allocation may instead 

be accomplished in a manner consistent 

with the methodology used by the 

service for making royalty payment 

allocations for the use of individual 

sound recordings. 

(c) Percentage of service revenue. The 

percentage of service revenue applicable 

under paragraph (b) of this section is 

10.5%, except that such percentage 

shall be discounted by 2% (i.e., to 8.5%) 

in the case of licensed activity occurring 

on or before December 31, 2007. 

(d) Overtime adjustment. For licensed 

activity on or after October 1, 2010, for 

purposes of the calculations in step 4 in 

paragraph (b)(4) of this section only, for 

sound recordings of musical works with 

a playing time of over 5 minutes, adjust 

the number of plays as follows: 

(1) 5:01 to 6:00 minutes—Each play = 

1.2 plays 

(2) 6:01 to 7:00 minutes—Each play = 

1.4 plays 

(3) 7:01 to 8:00 minutes—Each play = 

1.6 plays 

(4) 8:01 to 9:00 minutes—Each play = 

1.8 plays 

(5) 9:01 to 10:00 minutes—Each play 

= 2.0 plays 

(6) For playing times of greater than 

10 minutes, continue to add .2 for each 

additional minute or fraction thereof. 

(e) Accounting. The calculations 

required by paragraph (b) of this section 

shall be made in good faith and on the 

basis of the best knowledge, information 

and belief of the licensee at the time 

payment is due, and subject to the 

additional accounting and certification 


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requirements of 17 U.S.C. 115(c)(5) and 

§ 201.19 of this title. Without limitation, 

a licensee’s statements of account shall 

set forth each step of its calculations 

with sufficient information to allow the 

copyright owner to assess the accuracy 

and manner in which the licensee 

determined the payable royalty pool and 

per-play allocations (including 

information sufficient to demonstrate 

whether and how a minimum royalty or 

subscriber-based royalty floor pursuant 

to § 385.13 does or does not apply) and, 

for each offering reported, also indicate 

the type of licensed activity involved 

and the number of plays of each musical 

work (including an indication of any 

overtime adjustment applied) that is the 

basis of the per-work royalty allocation 

being paid. 

§ 385.13 Minimum royalty rates and 

subscriber-based royalty floors for specific 

types of services. 

(a) In general. The following 

minimum royalty rates and subscriberbased royalty floors shall apply to the 

following types of licensed activity: 

(1) Standalone non-portable 

subscription—streaming only. Except as 

provided in paragraph (a)(4) of this 

section, in the case of a subscription 

service through which an end user can 

listen to sound recordings only in the 

form of interactive streams and only 

from a non-portable device to which 

such streams are originally transmitted 

while the device has a live network 

connection, the minimum for use in 

step 1 of § 385.12(b)(1) is the lesser of 

subminimum II as described in 

paragraph (c) of this section for the 

accounting period and the aggregate 

amount of 50 cents per subscriber per 

month. The subscriber-based royalty 

floor for use in step 3 of § 385.12(b)(1) 

is the aggregate amount of 15 cents per 

subscriber per month. 

(2) Standalone non-portable 

subscription—mixed. Except as 

provided in paragraph (a)(4) of this 

section, in the case of a subscription 

service through which an end user can 

listen to sound recordings either in the 

form of interactive streams or limited 

downloads but only from a non-portable 

device to which such streams or 

downloads are originally transmitted, 

the minimum for use in step 1 of 

§ 385.12(b)(3) is the lesser of the 

subminimum I as described in 

paragraph (b) of this section for the 

accounting period and the aggregate 

amount of 50 cents per subscriber per 

month. The subscriber-based royalty 

floor for use in step 3 of § 385.12(b)(3) 

is the aggregate amount of 30 cents per 

subscriber per month. 

(3) Standalone portable subscription 

service. Except as provided in paragraph 

(a)(4) of this section, in the case of a 

subscription service through which an 

end user can listen to sound recordings 

in the form of interactive streams or 

limited downloads from a portable 

device, the minimum for use in step 1 

of § 385.12(b)(1) is the lesser of 

subminimum I as described in 

paragraph (b) of this section for the 

accounting period and the aggregate 

amount of 80 cents per subscriber per 

month. The subscriber-based royalty 

floor for use in step 3 of § 385.12(b)(3) 

is the aggregate amount of 50 cents per 

subscriber per month. 

(4) Bundled subscription services. In 

the case of a subscription service made 

available to end users with one or more 

other products or services as part of a 

single transaction without pricing for 

the subscription service separate from 

the product(s) or service(s) with which 

it is made available (e.g., a case in 

which a user can buy a portable device 

and one-year access to a subscription 

service for a single price), the minimum 

for use in step 1 of § 385.12(b)(1) is 

subminimum I as described in 

paragraph (b) of this section for the 

accounting period. The subscriber-based 

royalty floor for use in step 3 of 

§ 385.12(b)(3) is the aggregate amount of 

25 cents per month for each end user 

who has made at least one play of a 

licensed work during such month (each 

such end user to be considered an 

‘‘active subscriber’’). 

(5) Free nonsubscription/adsupported services. In the case of a 

service offering licensed activity free of 

any charge to the end user, the 

minimum for use in step 1 of 

§ 385.12(b)(1) is subminimum II 

described in paragraph (c) of this 

section for the accounting period. There 

is no subscriber-based royalty floor for 

use in step 3 of § 385.12(b)(3). 

(b) Computation of subminimum I. 

For purposes of paragraphs (a)(2), (3) 

and (4) of this section, and with 

reference to paragraph (5) of the 

definition of ‘‘service revenue’’ in 

§ 385.11 if applicable, subminimum I for 

an accounting period means the 

aggregate of the following with respect 

to all sound recordings of musical works 

used in the relevant offering of the 

service during the accounting period— 

(1) In cases in which a record 

company is the licensee under 17 U.S.C. 

115 and a third-party service has 

obtained from the record company the 

rights to make interactive streams or 

limited downloads of a sound recording 

together with the right to reproduce and 

distribute the musical work embodied 

therein, 17.36% of the total amount 

expensed by the service in accordance 

with U.S. Generally Accepted 

Accounting Principles, which for the 

avoidance of doubt shall include the 

value of any barter or other 

nonmonetary consideration provided by 

the service, for such rights for the 

accounting period, except that for 

licensed activity occurring on or before 

December 31, 2007, subminimum I for 

an accounting period shall be 14.53% of 

the amount expensed by the service for 

such rights for the accounting period. 

(2) In cases in which the relevant 

service is the licensee under 17 U.S.C. 

115 and the relevant service has 

obtained from a third-party record 

company the rights to make interactive 

streams or limited downloads of a 

sound recording without the right to 

reproduce and distribute the musical 

work embodied therein, 21% of the total 

amount expensed by the service in 

accordance with U.S. Generally 

Accepted Accounting Principles, which 

for the avoidance of doubt shall include 

the value of any barter or other 

nonmonetary consideration provided by 

the service, for such sound recording 

rights for the accounting period, except 

that for licensed activity occurring on or 

before December 31, 2007, subminimum 

I for an accounting period shall be 17% 

of the amount expensed by the service 

for such sound recording rights for the 

accounting period. 

(c) Computation of subminimum II. 

For purposes of paragraphs (a)(1) and (5) 

of this section, subminimum II for an 

accounting period means the aggregate 

of the following with respect to all 

sound recordings of musical works used 

by the relevant service during the 

accounting period— 

(1) In cases in which a record 

company is the licensee under 17 U.S.C. 

115 and a third-party service has 

obtained from the record company the 

rights to make interactive streams and 

limited downloads of a sound recording 

together with the right to reproduce and 

distribute the musical work embodied 

therein, 18% of the total amount 

expensed by the service in accordance 

with U.S. Generally Accepted 

Accounting Principles, which for the 

avoidance of doubt shall include the 

value of any barter or other 

nonmonetary consideration provided by 

the service, for such rights for the 

accounting period, except that for 

licensed activity occurring on or before 

December 31, 2007, subminimum II for 

an accounting period shall be 14.53% of 

the amount expensed by the service for 

such rights for the accounting period. 

(2) In cases in which the relevant 

service is the licensee under 17 U.S.C. 

115 and the relevant service has 


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57038 Federal Register / Vol. 73, No. 191 / Wednesday, October 1, 2008 / Proposed Rules 

obtained from a third-party record 

company the rights to make interactive 

streams or limited downloads of a 

sound recording without the right to 

reproduce and distribute the musical 

work embodied therein, 22% of the total 

amount expensed by the service in 

accordance with U.S. Generally 

Accepted Accounting Principles, which 

for the avoidance of doubt shall include 

the value of any barter or other 

nonmonetary consideration provided by 

the service, for such sound recording 

rights for the accounting period, except 

that for licensed activity occurring on or 

before December 31, 2007, subminimum 

II for an accounting period shall be 17% 

of the amount expensed by the service 

for such sound recording rights for the 

accounting period. 

(d) Computation of subscriber-based 

royalty rates. For purposes of paragraph 

(a) of this section, to determine the 

minimum or subscriber-based royalty 

floor, as applicable to any particular 

offering, the service shall for the 

relevant offering calculate its total 

number of subscriber-months for the 

accounting period, taking into account 

all end users who were subscribers for 

complete calendar months, prorating in 

the case of end users who were 

subscribers for only part of a calendar 

month, and deducting on a prorated 

basis for end users covered by a free 

trial period subject to the promotional 

royalty rate as described in 

§ 385.14(b)(2), except that in the case of 

a bundled subscription service, 

subscriber-months shall instead be 

determined with respect to active 

subscribers as defined in paragraph 

(a)(4) of this section. The product of the 

total number of subscriber-months for 

the accounting period and the specified 

number of cents per subscriber (or 

active subscriber, as the case may be) 

shall be used as the subscriber-based 

component of the minimum or 

subscriber-based royalty floor, as 

applicable, for the accounting period. 

§ 385.14 Promotional royalty rate. 

(a) General provisions. (1) This 

section establishes a royalty rate of zero 

in the case of certain promotional 

interactive streaming activities, and of 

certain promotional limited downloads 

offered in the context of a free trial 

period for a digital music subscription 

service under a license pursuant to 17 

U.S.C. 115. Subject to the requirements 

of 17 U.S.C. 115 and the additional 

provisions of paragraphs (b) through (e) 

of this section, the promotional royalty 

rate shall apply to a musical work when 

a record company transmits or 

authorizes the transmission of 

interactive streams or limited 

downloads of a sound recording that 

embodies such musical work, only if— 

(i) The primary purpose of the record 

company in making or authorizing the 

interactive streams or limited 

downloads is to promote the sale or 

other paid use of sound recordings by 

the relevant artists, including such 

sound recording, through established 

retail channels or the paid use of one or 

more established retail music services 

through which the sound recording is 

available, and not to promote any other 

good or service; 

(ii) Either— 

(A) The sound recording (or a 

different version of the sound recording 

embodying the same musical work) is 

being lawfully distributed and offered to 

consumers through the established retail 

channels or services described in 

paragraph (a)(1)(i) of this section; or 

(B) In the case of a sound recording 

of a musical work being prepared for 

commercial release but not yet released, 

the record company has a good faith 

intention of lawfully distributing and 

offering to consumers the sound 

recording (or a different version of the 

sound recording embodying the same 

musical work) through the established 

retail channels or services described in 

paragraph (a)(1)(i) of this section within 

90 days after the commencement of the 

first promotional use authorized under 

this section (and in fact does so, unless 

it can demonstrate that notwithstanding 

its bona fide intention, it unexpectedly 

did not meet the scheduled release 

date); 

(iii) In connection with authorizing 

the promotional interactive streams or 

limited downloads, the record company 

has obtained from the service it 

authorizes a written representation 

that— 

(A) In the case of a promotional use 

commencing on or after October 1, 2010, 

except interactive streaming subject to 

paragraph (d) of this section, the service 

agrees to maintain for a period of no less 

than 5 years from the conclusion of the 

promotional activity complete and 

accurate records of the relevant 

authorization and dates on which the 

promotion was conducted, and 

identifying each sound recording of a 

musical work made available through 

the promotion, the licensed activity 

involved, and the number of plays of 

such recording; 

(B) The service is in all material 

respects operating with appropriate 

license authority with respect to the 

musical works it is using for 

promotional and other purposes; and 

(C) The representation is signed by a 

person authorized to make the 

representation on behalf of the service; 

(iv) Upon receipt by the record 

company of written notice from the 

copyright owner of a musical work or 

agent of the copyright owner stating in 

good faith that a particular service is in 

a material manner operating without 

appropriate license authority from such 

copyright owner, the record company 

shall within 5 business days withdraw 

by written notice its authorization of 

such uses of such copyright owner’s 

musical works under the promotional 

royalty rate by that service; 

(v) The interactive streams or limited 

downloads are offered free of any charge 

to the end user and, except in the case 

of interactive streaming subject to 

paragraph (d) of this section or in the 

case of a free trial period for a digital 

music subscription service, no more 

than 5 sound recordings at a time are 

streamed in response to any individual 

request of an end user; 

(vi) The interactive streams and 

limited downloads are offered in a 

manner such that the user is at the same 

time (e.g., on the same web page) 

presented with a purchase opportunity 

for the relevant sound recording or an 

opportunity to subscribe to a paid 

service offering the sound recording, or 

a link to such a purchase or subscription 

opportunity, except— 

(A) In the case of interactive 

streaming of a sound recording being 

prepared for commercial release but not 

yet released, certain mobile applications 

or other circumstances in which the 

foregoing is impracticable in view of the 

current state of the relevant technology; 

and 

(B) In the case of a free trial period for 

a digital music subscription service, if 

end users are periodically offered an 

opportunity to subscribe to the service 

during such free trial period; and 

(vii) The interactive streams and 

limited downloads are not provided in 

a manner that is likely to cause mistake, 

to confuse or to deceive, reasonable end 

users as to the endorsement or 

association of the author of the musical 

work with any product, service or 

activity other than the sale or paid use 

of sound recordings or paid use of a 

music service through which sound 

recordings are available. Without 

limiting the foregoing, upon receipt of 

written notice from the copyright owner 

of a musical work or agent of the 

copyright owner stating in good faith 

that a particular use of such work under 

this section violates the limitation set 

forth in this paragraph (a)(1)(vii), the 

record company shall promptly cease 

such use of that work, and within 5 

business days withdraw by written 

notice its authorization of such use by 


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all relevant third parties it has 

authorized under this section. 

(2) To rely upon the promotional 

royalty rate, a record company making 

or authorizing interactive streams or 

limited downloads shall keep complete 

and accurate contemporaneous written 

records of such uses, including the 

sound recordings and musical works 

involved, the artists, the release dates of 

the sound recordings, a brief statement 

of the promotional activities authorized, 

the identity of the service or services 

where each promotion is authorized 

(including the internet address if 

applicable), the beginning and end date 

of each period of promotional activity 

authorized, and the representation 

required by paragraph (a)(1)(iii) of this 

section; provided that, in the case of 

trial subscription uses, such records 

shall instead consist of the contractual 

terms that bear upon promotional uses 

by the particular digital music 

subscription services it authorizes; and 

further provided that, if the record 

company itself is conducting the 

promotion, it shall also maintain any 

additional records described in 

paragraph (a)(1)(iii)(A) of this section. 

The records required by this paragraph 

(a)(2) shall be maintained for no less 

time than the record company maintains 

records of usage of royalty-bearing uses 

involving the same type of licensed 

activity in the ordinary course of 

business, but in no event for less than 

5 years from the conclusion of the 

promotional activity to which they 

pertain. If the copyright owner of a 

musical work or its agent requests a 

copy of the information to be 

maintained under this paragraph (a)(2) 

with respect to a specific promotion or 

relating to a particular sound recording 

of a musical work, the record company 

shall provide complete and accurate 

documentation within 10 business days, 

except for any information required 

under paragraph (a)(1)(iii)(A) of this 

section, which shall be provided within 

20 business days, and provided that if 

the copyright owner or agent requests 

information concerning a large volume 

of promotions or sound recordings, the 

record company shall have a reasonable 

time, in view of the amount of 

information requested, to respond to 

any request of such copyright owner or 

agent. If the record company does not 

provide required information within the 

required time, and upon receipt of 

written notice citing such failure does 

not provide such information within a 

further 10 business days, the uses will 

be considered not to be subject to the 

promotional royalty rate and the record 

company (but not any third-party 

service it has authorized) shall be liable 

for any payment due for such uses; 

provided, however, that all rights and 

remedies of the copyright owner with 

respect to unauthorized uses shall be 

preserved. 

(3) If the copyright owner of a musical 

work or its agent requests a copy of the 

information to be maintained under 

paragraph (a)(1)(iii)(A) of this section by 

a service authorized by a record 

company with respect to a specific 

promotion, the service shall provide 

complete and accurate documentation 

within 20 business days, provided that 

if the copyright owner or agent requests 

information concerning a large volume 

of promotions or sound recordings, the 

service shall have a reasonable time, in 

view of the amount of information 

requested, to respond to any request of 

such copyright owner or agent. If the 

service does not provide required 

information within the required time, 

and upon receipt of written notice citing 

such failure does not provide such 

information within a further 10 business 

days, the uses will be considered not to 

be subject to the promotional royalty 

rate and the service (but not the record 

company) will be liable for any payment 

due for such uses; provided, however, 

that all rights and remedies of the 

copyright owner with respect to 

unauthorized uses shall be preserved. 

(4) The promotional royalty rate is 

exclusively for audio-only interactive 

streaming and limited downloads of 

musical works subject to licensing 

under 17 U.S.C. 115. The promotional 

royalty rate does not apply to any other 

use under 17 U.S.C. 115; nor does it 

apply to public performances, 

audiovisual works, lyrics or other uses 

outside the scope of 17 U.S.C. 115. 

Without limitation, uses subject to 

licensing under 17 U.S.C. 115 that do 

not qualify for the promotional royalty 

rate (including without limitation 

interactive streaming or limited 

downloads of a musical work beyond 

the time limitations applicable to the 

promotional royalty rate) require 

payment of applicable royalties. This 

section is based on an understanding of 

industry practices and market 

conditions at the time of its 

development, among other things. The 

terms of this section shall be subject to 

de novo review and consideration (or 

elimination altogether) in future 

proceedings before the Copyright 

Royalty Judges. Nothing in this section 

shall be interpreted or construed in such 

a manner as to nullify or diminish any 

limitation, requirement or obligation of 

17 U.S.C. 115 or other protection for 

musical works afforded by the 

Copyright Act, 17 U.S.C. 101 et seq. For 

the avoidance of doubt, however, except 

as provided in paragraph (a) of this 

section, statements of account under 

17 U.S.C. 115 need not reflect 

interactive streams or limited 

downloads subject to the promotional 

royalty rate. 

(b) Interactive streaming and limited 

downloads of full-length musical works 

through third-party services. In addition 

to those of paragraph (a) of this section, 

the provisions of this paragraph (b) 

apply to interactive streaming, and 

limited downloads (in the context of a 

free trial period for a digital music 

subscription service), authorized by 

record companies under the 

promotional royalty rate through thirdparty services (including Web sites) that 

is not subject to paragraphs (c) or (d) of 

this section. Such interactive streams 

and limited downloads may be made or 

authorized by a record company under 

the promotional royalty rate only if— 

(1) No cash, other monetary payment, 

barter or other consideration for making 

or authorizing the relevant interactive 

streams or limited downloads is 

received by the record company, its 

parent company, any entity owned in 

whole or in part by or under common 

ownership with the record company, or 

any other person or entity acting on 

behalf of or in lieu of the record 

company, except for in-kind 

promotional consideration used to 

promote the sale or paid use of sound 

recordings or the paid use of music 

services through which sound 

recordings are available; 

(2) In the case of interactive streaming 

and limited downloads offered in the 

context of a free trial period for a digital 

music subscription service, the free trial 

period does not exceed 30 consecutive 

days per subscriber per two-year period; 

and 

(3) In contexts other than a free trial 

period for a digital music subscription 

service, interactive streaming subject to 

paragraph (b) of this section of a 

particular sound recording is authorized 

by the record company on no more than 

60 days total for all services (i.e., 

interactive streaming under paragraph 

(b) of this section of a particular sound 

recording may be authorized on no more 

than a total of 60 days, which need not 

be consecutive, and on any one such 

day, interactive streams may be offered 

on one or more services); provided, 

however, that an additional 60 days 

shall be available each time the sound 

recording is re-released by the record 

company in a remastered form or as a 

part of a compilation with a different set 

of sound recordings than the original 

release or any prior compilation 

including such sound recording. 


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(4) In the event that a record company 

authorizes promotional uses in excess of 

the time limitations of paragraph (b) of 

this section, the record company, and 

not the third-party service it has 

authorized, shall be liable for any 

payment due for such uses; provided, 

however, that all rights and remedies of 

the copyright owner with respect to 

unauthorized uses shall be preserved. In 

the event that a third-party service 

exceeds the scope of any authorization 

by a record company, the service, and 

not the record company, shall be liable 

for any payment due for such uses; 

provided, however, that all rights and 

remedies of the copyright owner with 

respect to unauthorized uses shall be 

preserved. 

(c) Interactive streaming of full-length 

musical works through record company 

and artist services. In addition to those 

of paragraph (a) of this section, the 

provisions of this paragraph (c) apply to 

interactive streaming conducted or 

authorized by record companies under 

the promotional royalty rate through a 

service (e.g., a Web site) directly owned 

or operated by the record company, or 

directly owned or operated by a 

recording artist under the authorization 

of the record company, and that is not 

subject to paragraph (d) of this section. 

For the avoidance of doubt and without 

limitation, an artist page or site on a 

third-party service (e.g., a social 

networking service) shall not be 

considered a service operated by the 

record company or artist. Such 

interactive streams may be made or 

authorized by a record company under 

the promotional royalty rate only if— 

(1) The interactive streaming subject 

to this paragraph (c) of a particular 

sound recording is offered or authorized 

by the record company on no more than 

90 days total for all services (i.e., 

interactive streaming under this 

paragraph (c) of a particular sound 

recording may be authorized on no more 

than a total of 90 days, which need not 

be consecutive, and on any such day, 

interactive streams may be offered on 

one or more services operated by the 

record company or artist, subject to the 

provisions of paragraph (b)(2) of this 

section); provided, however, that an 

additional 90 days shall be available 

each time the sound recording is rereleased by the record company in a 

remastered form or as part of a 

compilation with a different set of 

sound recordings than prior 

compilations that include that sound 

recording; 

(2) In the case of interactive streaming 

through a service devoted to one 

featured artist, the interactive streams 

subject to this paragraph (c) of this 

section of a particular sound recording 

are made or authorized by the record 

company on no more than one official 

artist site per artist and are recordings 

of that artist; and 

(3) In the case of interactive streaming 

through a service that is not limited to 

a single featured artist, all interactive 

streaming on such service (whether 

eligible for the promotional royalty rate 

or not) is limited to sound recordings of 

a single record company and its 

affiliates and the service would not 

reasonably be considered to be a 

meaningful substitute for a paid music 

service. 

(d) Interactive streaming of clips. In 

addition to those in paragraph (a) of this 

section, the provisions of this paragraph 

(d) apply to interactive streaming 

conducted or authorized by record 

companies under the promotional 

royalty rate of segments of sound 

recordings of musical works with a 

playing time that does not exceed the 

greater of 

(1) 30 seconds, or 

(2) 10% of the playing time of the 

complete sound recording, but in no 

event in excess of 60 seconds. Such 

interactive streams may be made or 

authorized by a record company under 

the promotional royalty rate without 

any of the temporal limitations set forth 

in paragraphs (b) and (c) of this section 

(but subject to the other conditions of 

paragraphs (b) and (c) of this section, as 

applicable). For clarity, this paragraph 

(d) is strictly limited to the uses 

described herein and shall not be 

construed as permitting the creation or 

use of an excerpt of a musical work in 

violation of 17 U.S.C. 106(2) or 115(a)(2) 

or any other right of a musical work 

owner. 

(e) Activities prior to the publication 

date. Notwithstanding paragraphs (a) 

through (d) of this section, in the case 

of licensed activity prior to the 

publication date, the promotional 

royalty rate shall apply to promotional 

interactive streams, and to limited 

downloads offered in the context of a 

free trial period for a digital music 

subscription service, that in either case 

are authorized by the relevant record 

company, if the condition set forth in 

paragraph (a)(1)(i) of this section is 

satisfied, subject only to the additional 

condition in paragraph (b)(1) of this 

section, and provided that a free trial 

period for a digital music subscription 

service authorized by the relevant 

record company shall be considered to 

be of 30 days’ duration. In the event of 

a dispute concerning the eligibility of 

licensed activity prior to the publication 

date for the promotional royalty rate, a 

service asserting that its licensed 

activity is eligible for the promotional 

royalty rate shall bear the burden of 

proving that its licensed activity was 

authorized by the relevant record 

company and shall certify that the 

condition in paragraph (b)(1) of this 

section was satisfied. 

§ 385.15 Timing of payments. 

Payment for any accounting period for 

which payment otherwise would be due 

more than 180 days after the publication 

date shall be due as otherwise provided 

under 17 U.S.C. 115 and its 

implementing regulations. Payment for 

any prior accounting period shall be due 

180 days after the publication date. 

§ 385.16 Reproduction and distribution 

rights covered. 

A compulsory license under 17 U.S.C. 

115 extends to all reproduction and 

distribution rights that may be necessary 

for the provision of the licensed activity, 

solely for the purpose of providing such 

licensed activity (and no other purpose). 

§ 385.17 Effect of rates. 

In any future proceedings under 17 

U.S.C. 115(c)(3)(C) and (D), the royalty 

rates payable for a compulsory license 

shall be established de novo. 

Dated: September 25, 2008. 

James Scott Sledge, 

Chief Copyright Royalty Judge. 

[FR Doc. E8–23184 Filed 9–30–08; 8:45 am] 

BILLING CODE 1410–72–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 180 

[EPA–HQ–OPP–2008–0647; FRL–8382–4] 

Chlorantraniliprole; Proposed TimeLimited Pesticide Tolerance 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: This document proposes to 

establish time-limited tolerances for 

residues of chlorantraniliprole in or on 

cowpeas, forage and hay; field peas, 

vines and hay; forage, fodder and straw 

of cereal grains, crop group 16; grass 

forage, fodder and hay, crop group 17; 

leaves of root and tuber vegetables, crop 

group 2, leeks, nongrass animal feeds 

(forage, fodder, straw and hay), crop 

group 18; okra; onions, green; onions, 

Welsh; peanuts, hay; shallots; soybeans, 

forage and hay; strawberries and 

sugarcane, sugar under the Federal 

Food, Drug, and Cosmetic Act (FFDCA). 

The tolerances expire on April 25, 2010. 


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