# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 12, 2010 Decided June 22, 2010

No. 09-1075

R ECORDING I NDUSTRY A SSOCIATION OF A MERICA

, I NC

., A PPELLANT

v.

L IBRARIAN OF C ONGRESS

, A PPELLEE

N ATIONAL M USIC P UBLISHERS ’ A SSOCIATION

, I NC

., S ONGWRITERS G UILD OF A MERICA

, AND N ASHVILLE
S ONGWRITERS A SSOCIATION I NTERNATIONAL

, I NTERVENORS

Consolidated with 09-1205

On Appeal of an Order of the Copyright Royalty Board

Paul M. Smith argued the cause for appellant. With him

on the briefs were Steven R. Englund

, Jared O. Freedman

, Lindsay C. Harrison

, Steven M. Marks

, Susan B. Chertkof

, and Scott A. Zebrak

. David A. Handzo entered an appearance.

Kelsi Brown Corkran , U.S. Department of Justice, argued the cause for appellee. With her on the brief were Tony West

,2

Assistant Attorney General, and Scott R. McIntosh , Attorney. Sarang V. Damle , Attorney, entered an appearance.

Jay Cohen argued the cause for intervenors National Music Publishers’ Association, In c., et al. With him on the

brief were Lynn B. Bayard

, David W. Brown

, Jay Rosenthal

, Senior Vice-President & Ge neral Counsel, National Music Publishers’ Association, Inc., Kathryn E. Wagner , Vice President & Counsel, National Mu sic Publishers’ Association,
Inc., Charles J. Sanders , Special Counsel, Songwriters Guild of America, and Carl W. Hampe.

Before: G ARLAND and K AVANAUGH

, Circuit Judges , and

R ANDOLPH

, Senior Circuit Judge

.

Opinion for the Court filed by Circuit Judge

K AVANAUGH

.

K AVANAUGH

, Circuit Judge : By law, the Copyright Royalty Board sets the terms and rates for copyright royalties when copyright owners and licen sees fail to negotiate terms and rates themselves. As part of its statutory mandate, the Board sets royalty terms and rates for what is known as the § 115 statutory license. That license allows individuals to make their own recordings of c opyrighted musical works for distribution to the public without the consent of the copyright

owner.

In carrying out its statut ory responsibilities under 17 U.S.C. § 115, the Board institut ed a 1.5 percent per month late fee for late royalty payments. It also implemented a pennyrate royalty structur e for cell phone ringtones, under which copyright owners receive 24 cen ts for every ringtone sold using their copyrighted work.3

The Recording Industry A ssociation of America challenges those two aspects of the Board’s decision, arguing that they were arbitrary and capricious for purposes of the

Administrative Procedure Act. We conclude that the Board’s

decision was reasonable and reasonably explained. We

therefore affirm the Bo ard’s determination.

I

A

Most songs played on the radio, sold on CDs in music stores, or digitally available on the Internet through services like iTunes embody two distinct copyrights – a copyright in the “musical work” and a copyri ght in the “soun d recording.”

See 17 U.S.C. § 102. The musical work is the musical composition – the notes and lyrics of the song as they appear

on sheet music. The sound record ing is the recorded musical work performed by a specific artist.

Although almost always intermingled in a single song, those two copyrights are legally distinct and may be owned and licensed separately. One party might own the copyright in the words and musical arrangement of a song, and another party might own the copyright in a particular artist’s recording of those words and musical notes.

This case involves licenses in a limited category of copyrighted musical works – as opposed to sound recordings. Section 115 of the Copyright Ac t allows an individual to make and distribute phonorecord s (that is, sound recordings) of a copyrighted musical work without reaching any kind of agreement with the copyright owner. That right does not include authorization to make exact copies of an existing4

sound recording and distribute it ; if a musical work has been recorded and copyrighted by anot her artist, a licensee “may exercise his rights under the [§ 115] license only by assembling his own musicians, singers, recording engineers and equipment, etc. for the purpose of recording anew the musical work that is the subj ect of the [§ 115] license.” 2

M ELVILLE B. N IMMER & D AVID N IMMER

, N IMMER ON
C OPYRIGHT § 8.04[A], at 8-58.5 (2009). For example, a § 115 licensee could pull together a group of musicians to record

and sell a cover version of Bruce Springsteen’s 1975 hit Born

to Run , but that licensee could not make copies of Springsteen’s recording of th at song and sell them.

The § 115 licensing regime operates in a fairly straightforward manner. When a copyright owner distributes work “to the public,” § 115’s prov isions are triggered. 17 U.S.C. § 115(a)(1). Once that occurs, anyone may “obtain a compulsory license to make and distribute phonorecords of the work” under § 115 so long as the “primary purpose in making [the] phonorecords is to di stribute them to the public for private use.” Id. Assuming the copyright has been registered with the Copyright Office, the licensee owes the copyright owner a royalty for every phonorecord “made and distributed in accordance with the [§ 115] license.” Id. § 115(c)(2). For purposes of th e Copyright Act, a phonorecord

is “distributed” – and an ob ligation to pay the copyright owner a royalty created – when “t he person exercising the [§ 115] license has voluntarily and permanently parted with” the phonorecord. Id. In other words, the licensee’s sale of its recording of the copyright owner’s work triggers the royalty payment obligation. See N IMMER § 8.04[H][1], at 8-77.

Because the § 115 license issues without any agreement between the copyright owner and the licensee, the system5

needs a mechanism to figure out how much the licensee owes the copyright owner and what th e terms for paying that rate should be. Although that mechanism has changed over time, the Copyright Royalty Board currently serves as the rulemaking body for this system. See generally Procedural Regulations for the Copyright Royalty Board, 70 Fed. Reg. 30,901 (May 31, 2005) (discussing the history of royalty ratemaking). The Board is a th ree-person panel appointed by the Librarian of Congress and removable only for cause by

the Librarian. 1 The Board sets the terms and rates for copyright royalties when copyri ght owners and licensees fail to negotiate terms and rates themselves. See N IMMER § 7.27[C], at 7-243.

As relevant here, the Copyri ght Act requires the Board to set “reasonable terms and rates” for royalty payments made under the § 115 license when the pa rties to the license fail to do so. 17 U.S.C. § 801(b)(1). When establishing terms and rates under that license, the C opyright Act requires the Board to balance four general and sometimes conflicting policy objectives: (1) maximizing the availability of creative works to the public; (2) providing copyrig ht owners a fair return for their creative works and copyright users a fair income; (3) recognizing the relative roles of the copyright owners and users; and (4) minimizing any disruptive impact on the

industries involved. Id. § 801(b)(1)(A)-(D).

1 RIAA has not raised a constitutional challenge to the method of appointment of the members of the Copyright Royalty Board. Cf. Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd. , 574 F.3d 748, 755-56 (D.C. Cir. 2009); SoundExchange, Inc. v. Librarian of Congress , 571 F.3d 1220, 1226-27 (D.C. Cir. 2009) (Kavanaugh, J., concurring).6

At specified intervals, the Board holds ratemaking proceedings for licenses issued under the Copyright Act. Section 115 ratemaking proceedings can occur every five years “or at such other times as the parties have agreed.” Id. § 804(b)(4).

B

In 1996, the parties with an interest in the § 115 license (such as the Recording Industry Association of America, the Songwriter’s Guild of America, and the National Music Publishers’ Association) agreed on various terms and rates for the compulsory license. They al so agreed that the settlement with respect to those terms a nd rates would expire 10 years later. In 2006, afte r the parties found th ey could not reach a new compromise, the Board inst ituted proceedings to set certain terms and rates governi ng the operation of the § 115 license. The process was long and complicated, involving 28 days of live testimony, more than 140 exhibits, and more than 340 pleadings, motions, and orders. See Mechanical and Digital Phonorecord Delivery Rate Determination Proceeding, 74 Fed. Reg. 4510, 4511 (Jan. 26, 2009).

When the Board published its final determination from those proceedings in 2009, it announced one new § 115 licensing term and two new § 115 royalty rates. First, the Board instituted a late paymen t of 1.5 percent per month for overdue royalties, measured from the date payment is due. Second, it established a roya lty rate for cellular phone ringtones – a sound cell phones ca n make when they ring that often samples a popular song. It set the rate at 24 cents per7

ringtone sold. 2 Third, with respect to physical phonorecords (like CDs) and permanent di gital downloads (like those purchased from iTunes), the Board set the § 115 royalty rate at the greater of 9.1 cents per song or 1.75 cents per minute of playing time.

The Recording Industry Asso ciation of America, known as RIAA, is a trade association representing companies that create, manufacture, and dist ribute sound recordings. It participated as a party in the § 115 licensing proceedings.

After the Board issued its de termination, RIAA filed a motion for rehearing. The Board denied the motion.

RIAA now appeals two aspects of the Board’s ruling: (1) the imposition of a 1.5 percent pe r month late fee and (2) the imposition of a penny-rate royalty structure for ringtones at 24 cents per ringtone sold.

RIAA does not contend that the Board contravened any specific statutory limit. In other words, this is a State Farm

case, not a Chevron case. The Board’s rulings are subject to

review in this Court under the arbitrary and capricious

standard of the Administrative Procedure Act. 17 U.S.C. § 803(d)(3); see 5 U.S.C. § 706(2)(A). As a general matter, our

review under that standard is deferential. See FCC v. Fox

Television Stations , 129 S. Ct. 1800, 1810 (2009); Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43 (1983). And we gi ve “substantial deference” to the ratemaking decisions of the Board because Congress

2 In 2006, the Register of Copyrights ruled that ringtones are phonorecords that fall within th e scope of the § 115 license. Mechanical and Digital Phonoreco rd Delivery Rate Adjustment Proceedings, 71 Fed. Reg. 64,303 (Nov. 1, 2006).8

expressly tasked it with balancing the conflicting statutory objectives enumerated in the Copyright Act. SoundExchange, Inc. v. Librarian of Congress , 571 F.3d 1220, 1225 (D.C. Cir. 2009). “To the extent that the statutory objectives determine a range of reasonable royalty ra tes that would serve all [the] objectives adequately but to di ffering degrees, the [Board] is free to choose among those rate s, and courts are without authority to set aside the particul ar rate chosen by the [Board]

if it lies within a zone of reasonableness.” Recording Indus. Ass’n of America v. Copyright Royalty Tribunal

, 662 F.2d 1, 9 (D.C. Cir. 1981) (internal quotation marks omitted).

II

We first consider RIAA’s challenge to the 1.5 percent

late fee.

The Copyright Act authorizes the Board to impose a late fee for § 115 royalty payments: “A determination of the Copyright Royalty [Board] may include terms with respect to late payment, but in no way shall such terms prevent the copyright holder from asser ting other rights or remedies provided under this title.” 17 U.S.C. § 803(c)(7).

The factors listed in § 801(b )(1) of the Copyright Act govern the Board’s decision to impose a late fee, as well as its

determination of the amount of that fee. Recall that those factors include: (1) maximizing the availability of creative works to the public; (2) providing copyright owners a fair

return for their creative work s and copyright users a fair income; (3) recognizing the relative roles of the copyright owners and users; and (4) mi nimizing any disruptive impact on the industries involved. Appl ying those broad and rather amorphous factors, the Board c oncluded that the 1.5 percent9

late fee comports with the statutory objectives because it strikes a balance “between providing an effective incentive to the licensee to make payments timely on the one hand and not making the fee so high that it is punitive on the other hand.” Mechanical and Digital Phonorecord Delivery Rate Determination Proceeding, 74 Fed. Reg. 4510, 4528 (Jan. 26, 2009) (internal quotation marks omitted).

RIAA levies several challenges to the late fee. First, RIAA argues that the Board must set royalty terms and rates that track those found in the marketplace and that the Board failed to do so here. Second, RIAA asserts that the late fee is unnecessary in the § 115 licensi ng context because copyright owners possess a termination ri ght that can be invoked when payments are late. Third, RIAA contends that a late fee is inappropriate because the lateness of payments results in large part from uncertainty about the appropriate division of royalties among joint copyright owners. RIAA suggests that this problem is the fault of the copyright owners themselves. Fourth, RIAA relatedly submits that the Board failed to adequately address its argument about the problems presented by co-copyright owners. We w ill consider each of those objections in turn.

A

RIAA argues that the late fee must be tethered to late fees that can be found in the existing market for voluntary licenses. By RIAA’s account, th ere are no late fees in the voluntary market for the copyri ghts that § 115 covers. As a result, RIAA contends the Board should not be able to impose a late fee in this compulsory license setting.10

The Copyright Act provides that the Board “may consider rates and terms under voluntary license agreements” in addition to the mandatory “o bjectives set forth in section 801(b)(1)” when setting the terms of the § 115 license. 17 U.S.C. § 115(c)(3)(D). As this Court explained in Recording Industry Association of Americ a v. Librarian of Congress , the Librarian has interpreted a Se venth Circuit “precedent to mean that marketplace analogi es, along with other evidence, must be considered,” which we held to be “a reasonable interpretation of the precedent. ” 176 F.3d 528, 534 (D.C. Cir. 1999). At most, then, the Board must “consider[]” the existing market for voluntary licenses.

The Board did so here, explai ning that a late fee would correspond with the practices in other similar markets – in particular, the closely related webcasting and satellite digital radio industries. 74 Fed. Reg. at 4527; see Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radi o Services, 73 Fed. Reg. 4080, 4099 (Jan. 24, 2008); Digital Perf ormance Right in Sound Recordings and Ephemeral Recordings, 72 Fed. Reg. 24,084, 24,107 (May 1, 2007). The copyright owners presented evidence during the proceedings – considered by the Board – that the major record labels have late fee clauses in their royalty contracts with digital mu sic services like iTunes. J.A. 523-24. And RIAA acknowledged that at least a handful of royalty agreements provide c opyright owners with late-fee protection. J.A. 618-19.

The Board also considered othe r relevant market metrics. Copyright owners presente d evidence indicating that payments were frequently made to copyright owners after they were due. Some of the evidence in the record suggested that from January 2000 to September 2007, over 41,00011

payments totaling more than $2.1 billion arrived after their due dates. J.A. 433. Though RIAA disputed the magnitude of the problem, none of the part ies to the proceeding claimed the problem was non-existent. 74 Fed. Reg. at 4527 n.50.

And although the Board considers market conditions when setting terms and rates, th ey are not required to choose a late fee that exactly matches a market rate. Such a rule would, in effect, nullify the c ongressional authorization for

late fees.

In short, the Board appropr iately took market evidence into account when imposing the late fee.

B

The Copyright Act authorizes copyright owners to terminate § 115 licenses for nonpayment. 17 U.S.C. § 115(c)(6). RIAA argues that the presence of that provision renders a late fee unnecessary.

But the Copyright Act itself refutes this either-or argument. The statute both grants the copyright owners a termination right and authorizes the Boar d to impose a late fee. Moreover, by the terms of th e statute, that late fee “in no way shall . . . prevent the c opyright holder from asserting other rights or remedies provi ded” by the Copyright Act. Id. § 803(c)(7). The congressional scheme clearly contemplates both a termination right and a late fee.

The congressional framework makes good sense because the incentive to make timely paym ents in order to avoid § 115

license termination is rather wea k, if any such incentive exists

at all. Under the te rms of the statute, a copyright owner must12

give a licensee 30 days to cure any nonpayment before terminating the license. Id. § 115(c)(6). As the Government persuasively points out, the termination provision “cannot possibly serve as an incentive to make timely royalty payments, because the licensee can avoid any consequences of withholding payment by simply waiting until the copyright

owner initiates termination and then making the payment before the 30-day notice period has expired.” Government’s

Br. at 40.

In short, a copyright owner’s ability to terminate a § 115 license in no ways bars the imposition of a late fee.

C

RIAA also asserts that it was unreasonable for the Board to impose a late fee benefiting copyright owners because, it says, copyright owners are of ten the source of the problems that cause late payment. By RIAA’s account, when more than one party owns a copyright in a work, those joint copyright

owners often fail to decide who is entitled to what share of the royalties. RIAA contends that uncertainty about what amount is owed to individual copyright owners when a copyright is jointly held is often the underl ying reason that payments are

late.

That argument is unpersuasive. Even if it were true that divided interests in a copyri ght made it difficult to make timely payments to each copyright owner, that fact would in no way counsel against the impos ition of a late fee. The regulations governing the ope ration of the § 115 license contemplate that scenario and set forth a solution. A licensee can satisfy its obligation to pay a royalty by paying any one copyright owner – even when ma ny individuals have a stake13

in a copyright. See 37 C.F.R. § 201.18(a)(5) (“For the purposes of this section, the term copyright owner, in the case of any work having more than one copyright owner, means any one of the co-owners.”) (emphasis omitted); id. § 201.18(a)(6) (“In the case where th e work has more than one copyright owner, the service of the Notice on any one of theco-owners . . . shall be sufficient with respect to all coowners.”); id. § 201.19(a)(5) (“In the case where the work has more than one copyright owner, the service of the Statement

of Account on one co-owner . . . shall be sufficient with respect to all co-owners.”).

We therefore reject this argum ent as a basis for upsetting the Board’s imposition of a late fee.

D

RIAA relatedly argues that the Board failed to adequately

consider RIAA’s assertion that a late fee was unreasonable because of the uncertainties caused by split payments. But both the Board’s final determination and the order denying RIAA’s motion for a rehearing specifically addressed that argument. And as we have al ready discussed, the problem presented by jointly held copyrights is really no problem at all; a licensee can meet its § 115 licensing obligation by paying any one owner of a jointly owned copyright.

In sum, RIAA has failed to raise any argument that would justify our overturning the Boar d’s 1.5 percent per month late

fee.14

III

We next consider RIAA’s challenge to the royalty rates for cell phone ringtones. 3

As part of the § 115 licensing proceedings, the Board

established what is known as a penny-rate royalty structure for ringtones. Under that rate , copyright owners receive 24 cents for every ringtone sold using their copy righted work.

In the proceeding before the Board, RIAA argued for a percentage-of-revenue roya lty structure under which copyright owners would receive 15 percent of the wholesale

revenue derived from the sale of a ringtone. As a less preferred alternative, RIAA sought a penny-rate royalty structure in which copyright owners would receive 18 cents per ringtone sold. 4

3 The Government and intervenors argue that waiver, estoppel, or a lack of standing bars RIAA from challenging the Board’s imposition of a penny-rate royalty structure for ringtones. Though varying in flavor, these arguments all follow the same essential form: Because RIAA endorsed a penny-rate structure as a less preferred alternative to a percenta ge-of-revenue structure before the Board, it waived its right to challenge (or is estopped from challenging, or lacks standing to challenge) the imposition of the penny-rate royalty in this Court. Not so. This Court’s case law indicates that a party can appeal an agency’s adoption of a rate proposed by that party when it was proffered as a second-best option. Cf. Southern Natural Gas Co. v. FERC , 877 F.2d 1066, 1070-71 (D.C. Cir. 1989).

4 Other parties to the proceeding offered competing rates. For example, the copyright owners endorsed a rate structure in which they would receive the greater of (1) 15 percent of all revenue associated with the ringtone, (2) 33. 3 percent of the cost that would have been paid for the mechanical rights to the equivalent musical15

Applying the § 801(b)(1) criteria, the Board settled on a penny-rate royalty structure of 24 cents per ringtone sold. With respect to the first statutor y criterion it had to consider – maximizing the availability of creative work – the Board

concluded that a “nominal rate [] for ringtones” supports that objective. Mechanical and Di gital Phonorecord Delivery Rate Determination Proceeding, 74 Fed. Reg. 4510, 4524 (Jan. 26, 2009). As to the second crite rion – affording the copyright

owner a fair return – the Boar d found that the new rates did not deprive copyright owners of a fair return on their creative

works. Id . The Board also found that the penny rate met the third statutory criterion – respect ing the relative roles of the copyright owner and user. Id. at 4525. And under the fourth criterion – minimizing disruptiv e impact on the industry – the

Board found that the rate structure it chose was reasonable and already in place in many pa rts of the market, minimizing any disruptive impact. Id

.

On two separate grounds, RIAA now challenges the structure of the ringtone royalty rate imposed by the Board – specifically, the fact that it is a penny rate rather than a percentage-of-revenue rate. Firs t, using an argument similar to the one it lodged against th e 1.5 percent late fee, RIAA alleges that the penny-rate roya lty structure inappropriately departs from market analogies for voluntary licenses. Second, RIAA contends that a penny rate is unreasonable in light of falling ringtone prices.

composition and sound recordings, and (3) 15 cents per ringtone, subject to periodic inflation adjustments. Mechanical and Digital Phonorecord Delivery Rate Determ ination Proceeding, 74 Fed. Reg. 4510, 4515 (Jan. 26, 2009).16

A

As previously discussed, a lthough existing market rates for voluntary licenses do not bind the Board when making its determinations, the Board c onsidered those rates when selecting the penny-rate royalty structure.

The Board expressly recognized that marketplace ringtone contracts typically prov ide for royalty payments at the greater of (1) a penny rate ranging from 10 to 25 cents; (2) a percentage of retail revenue ranging from 10 to 15 percent; and (3) a percentage of gross revenue ranging from 9 to 20 percent. 74 Fed. Reg. at 4518.

After weighing the costs and benefits of the parties’ proposals and taking into account relevant market practices, the Board concluded that a pe nny rate was superior to a percentage-of-revenue rate for several reasons.

First, the Board determined that a penny rate was more in line with reimbursing copyright owners for the use of their

works. Under the Board’s de termination, every copyright

owner will receive 24 cents ever y time a ringtone using their work is sold. By contrast , under a percentage-of-revenue system, the royalty paid to copyright owners would vary based on factors in addition to the number of ringtones sold, such as the price charged to the end consumer. This Court has validated the Board’s preference for a royalty system based on the number of copyrighted works sold – like the penny rate – as being more directly tied to the nature of the right being licensed than a pe rcentage-of-revenue rate. See Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd. , 574 F.3d 748, 760-61 (D.C. Cir. 2009).17

Second, when looking to market analogies, the Board determined that many of the c oncerns driving the adoption of a percentage-of-revenue royalty structure in other instances were absent here. For exampl e, the Board had previously concluded that a percentage-o f-revenue royalty structure

made sense in the satellite di gital radio context because it would be difficult to measure how much a given work was actually used. See Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services, 73 Fed. Reg. 4080, 4086 (Jan. 24, 2008). In the case of ringtones, “m easuring the quantity of reproductions presents no such problems.” 74 Fed. Reg. at

4516. In a market based on the sa le of individual copyrighted works (like the ringtone market) as opposed to a market where copyrighted works are bundle d and sold as a service to consumers (like satellite radio) figuring out how many times a copyrighted work is used (i.e ., sold) is much easier.

Third, the Board found that the simplicity of using a penny-rate royalty structure s upported its adoption: “No proxies need be formulated to establish the number of such reproductions,” which are “readily calculable as the number

of units in transactions between the parties.” 74 Fed. Reg. at

4516. That simplicity contrasts sharply with the “salientdifficulties” presented by RIAA’s proposed percentage-ofrevenue royalty structure. Id . As the Board recognized, not least among these difficulties we re definitional problems such as disagreements about what constituted “revenues.” Id.

Tying all of those strands together, the Board ultimately concluded “that a single penny-rate structure is be st applied to ringtones as well as physic al phonorecords and digital permanent downloads” because of “the efficiency of administration gained from a single structure when spread18

over the much larger number of musical works reproduced” under the § 115 licensing regime. 74 Fed. Reg. at 4517 n.21. In the Board’s view, the pe nny rate provided “the most efficient mechanism for capturing the value of the reproduction and distribution right s at issue.” 74 Fed. Reg. at

4515.

We find nothing unreasona ble about the Board’s preference for a penny-rate royalty structure.

B

RIAA also argues that plumme ting ringtone prices render the penny rate inherently unreasonable. The Board considered and rejected this ar gument, stating: “RIAA’s shrill contention that a penny-rate structure ‘would be disruptive as consumer prices continue to dec line’ and should, therefore, be replaced by a percentage rate system in order to satisfy 801(b) policy considerations . . . is not supported by the record of evidence in this proceeding. . . . RIAA [does not] offer any persuasive evidence that w ould in any way quantify any claimed adverse impact on projected future revenues stemming from the continued ap plication of a penny-rate structure . . . .” 74 Fed. Reg. at 4516.

Although the Board concluded that falling ringtone prices

were not relevant to the choi ce of a penny-rate royalty as opposed to a percentage-of-revenue royalty, it did find information about declining pri ces useful in structuring the terms of the penny rate it chose. See 74 Fed. Reg. at 4523. For example, the Board referenced concerns about reduced revenues when rejecting the c opyright owners’ request that selected rates be adjusted annually for inflation. Id.19

The Board examined the relevant data and determined that there was no meaningful li nk between the selection of a penny-rate royalty structure for ringtones and future ringtone

revenues. RIAA has failed to present any basis for us to

overturn that conclusion.

* * *

We affirm the Copyright R oyalty Board’s de termination.

So ordered.