I

103D CONGRESS

1ST SESSION H. R. 2840

To amend title 17, United States Code, to establish copyright arbitration

royalty panels to replace the Copyright Royalty Tribunal, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 3, 1993

Mr. HUGHES (for himself and Mr. FRANK of Massachusetts) introduced the

following bill; which was referred to the Committee on the Judiciary

A BILL

To amend title 17, United States Code, to establish copyright

arbitration royalty panels to replace the Copyright Royalty Tribunal, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Copyright Royalty

5 Tribunal Reform Act of 1993’’.

6 SEC. 2. COPYRIGHT ARBITRATION ROYALTY PANELS.

7 (a) ESTABLISHMENT AND PURPOSE.—Section 801 of

8 title 17, United States Code, is amended as follows:
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1 (1) The section heading is amended to read as

2 follows:

3 ‘‘§ 801. Copyright arbitration royalty panels: estab4 lishment and purpose’’;

5 (2) Subsection (a) is amended to read as fol6 lows:

7 ‘‘(a) ESTABLISHMENT.—The Librarian of Congress,

8 upon the recommendation of the Register of Copyrights,

9 is authorized to appoint and convene copyright arbitration

10 royalty panels.’’;

11 (3) Subsection (b) is amended—

12 (A) by inserting ‘‘PURPOSES.—’’ after

13 ‘‘(b)’’;

14 (B) in the matter preceding paragraph (1),

15 by striking ‘‘Tribunal’’ and inserting ‘‘copyright

16 arbitration royalty panels’’;

17 (C) in paragraph (2)—

18 (i) in subparagraph (A), by striking

19 ‘‘Commission’’ and inserting ‘‘copyright ar20 bitration royalty panels’’; and

21 (ii) in subparagraph (B), by striking

22 ‘‘Copyright Royalty Tribunal’’ and insert23 ing ‘‘copyright arbitration royalty panels’’;
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1 (D) in paragraph (3), by striking ‘‘In de2 termining’’ and all that follows through the end

3 of the paragraph; and

4 (4) by amending subsection (c) to read as fol5 lows:

6 ‘‘(c) RULINGS.—The Librarian of Congress, upon the

7 recommendation of the Register of Copyrights, may, be8 fore a copyright arbitration royalty panel is convened,

9 make any necessary procedural or evidentiary rulings that

10 would apply to the proceedings conducted by such panel.’’.

11 (b) MEMBERSHIP AND PROCEEDINGS.—Section 802

12 of title 17, United States Code, is amended to read as

13 follows:

14 ‘‘§ 802. Membership and proceedings of copyright ar15 bitration royalty panels

16 ‘‘(a) COMPOSITION OF COPYRIGHT ARBITRATION

17 ROYALTY PANELS.—A copyright arbitration royalty panel

18 shall consist of 3 arbitrators selected by the Librarian of

19 Congress pursuant to subsection (b).

20 ‘‘(b) SELECTION OF ARBITRATION PANEL.—Not

21 later than 10 days after publication of a notice initiating

22 an arbitration proceeding under section 803 or 804, and

23 in accordance with procedures specified by the Register

24 of Copyrights, the Librarian of Congress shall, upon the

25 recommendation of the Register of Copyrights, select 2 ar-
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1 bitrators from lists of arbitrators provided to the Librar2 ian by parties participating in the arbitration. The 2 arbi3 trators so selected shall, within 10 days after their selec4 tion, choose a third arbitrator from the same lists, who

5 shall serve as the chairperson of the arbitrators. If such

6 2 arbitrators fail to agree upon the selection of a chair7 person, the Librarian of Congress shall promptly select the

8 chairperson.

9 ‘‘(c) ARBITRATION PROCEEDINGS.—Copyright arbi10 tration royalty panels shall conduct arbitration proceed11 ings, in accordance with such procedures as they may

12 adopt, for the purpose of making their determinations in

13 carrying out the purposes set forth in section 801. The

14 arbitration panels shall act on the basis of a fully docu15 mented written record, prior decisions of the Copyright

16 Royalty Tribunal, prior copyright arbitration panel deter17 minations, and rulings by the Librarian of Congress under

18 section 801(b). Any copyright owner who claims to be enti19 tled to royalties under section 111 or 119 or any inter20 ested copyright party who claims to be entitled to royalties

21 under section 1006 may submit relevant information and

22 proposals to the arbitration panels in proceedings applica23 ble to such copyright owner or interested copyright party.

24 The parties to the proceedings shall bear the entire cost
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1 thereof in such manner and proportion as the arbitration

2 panels shall direct.

3 ‘‘(d) REPORT TO THE LIBRARIAN OF CONGRESS.—

4 Not later than 180 days after publication of the notice

5 initiating an arbitration proceeding, the copyright arbitra6 tion royalty panel conducting the proceeding shall report

7 to the Librarian of Congress its determination concerning

8 the royalty fee or distribution of royalty fees, as the case

9 may be. Such report shall be accompanied by the written

10 record, and shall set forth the facts that the arbitration

11 panel found relevant to its determination.

12 ‘‘(e) ACTION BY LIBRARIAN OF CONGRESS.—Within

13 60 days after receiving the report of a copyright arbitra14 tion royalty panel under subsection (d), the Librarian of

15 Congress, upon the recommendation of the Register of

16 Copyrights, shall adopt or reject the determination of the

17 arbitration panel. The Librarian shall adopt the deter18 mination of the arbitration panel unless the Librarian

19 finds that the determination is arbitrary. If the Librarian

20 rejects the determination of the arbitration panel, the Li21 brarian shall, before the end of that 60-day period, and

22 after full examination of the record created in the arbitra23 tion proceeding, issue an order setting the royalty fee or

24 distribution of fees, as the case may be. The Librarian

25 shall cause to be published in the Federal Register the
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1 determination of the arbitration panel, and the decision

2 of the Librarian (including an order issued under the pre3 ceding sentence). The Librarian shall also publicize such

4 determination and decision in such other manner as the

5 Librarian considers appropriate. The Librarian shall also

6 make the report of the arbitration panel and the accom7 panying record available for public inspection and copying.

8 ‘‘(f) JUDICIAL REVIEW.—Any decision of the Librar9 ian of Congress under subsection (e) with respect to a de10 termination of an arbitration panel may be appealed, by

11 any aggrieved party who would be bound by the deter12 mination, to the United States Court of Appeals for the

13 District of Columbia Circuit, within 30 days after the pub14 lication of the decision in the Federal Register. The pend15 ency of an appeal under this paragraph shall not relieve

16 persons obligated to make royalty payments under sec17 tions 111, 119, or 1003 who would be affected by the de18 termination on appeal to deposit the statement of account

19 and royalty fees specified in those sections. The court shall

20 have jurisdiction to modify or vacate a decision of the Li21 brarian only if it finds, on the basis of the record before

22 the Librarian, that the Librarian acted in an arbitrary

23 manner. If the court modifies the decision of the Librar24 ian, the court shall have jurisdiction to enter its own deter25 mination with respect to the amount or distribution of roy-
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1 alty fees and costs, to order the repayment of any excess

2 fees, and to order the payment of any underpaid fees, and

3 the interest pertaining respectively thereto, in accordance

4 with its final judgment. The court may further vacate the

5 decision of the arbitration panel and remand the case for

6 arbitration proceedings in accordance with subsection

7 (c).’’.

8 (c) ADJUSTMENT OF COMPULSORY LICENSE

9 RATES.—Section 803 of title 17, United States Code, and

10 the item relating to such section in the table of sections

11 at the beginning of chapter 8 of such title, are repealed.

12 (d) INSTITUTION AND CONCLUSION OF PROCEED13 INGS.—Section 804 of title 17, United States Code, is

14 amended as follows:

15 (1) Subsection (a) is amended—

16 (A) by repealing paragraph (1); and

17 (B) in paragraph (2)—

18 (i) in the matter preceding subpara19 graph (A) by striking ‘‘Tribunal,’’ and all

20 that follows through ‘‘proceedings under

21 this chapter.’’ and inserting ‘‘Copyright

22 Royalty Tribunal before the date of the en23 actment of the Copyright Royalty Tribunal

24 Reform Act of 1993, or by a copyright ar25 bitration royalty panel after such date of
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1 enactment, may file a petition with the Li2 brarian of Congress declaring that the pe3 titioner requests an adjustment of the rate.

4 The Librarian of Congress shall, upon the

5 recommendation of the Register of Copy6 rights, make a determination as to whether

7 the petitioner has such a significant inter8 est in the royalty rate in which an adjust9 ment is requested. If the Librarian deter10 mines that the petitioner has such a sig11 nificant interest, the Librarian shall cause

12 notice of this determination, with the rea13 sons therefor, to be published in the Fed14 eral Register, together with the notice of

15 commencement of proceedings under this

16 chapter.’’;

17 (ii) in subparagraph (C)—

18 (I) in clause (i) by striking ‘‘in

19 1990 and in each subsequent tenth

20 calendar year, and’’, and by striking

21 ‘‘116A’’ and inserting ‘‘116’’; and

22 (II) by amending clause (ii) to

23 read as follows:

24 ‘‘(ii) If a negotiated license authorized by

25 section 116 is terminated or expires and is not
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1 replaced by another license agreement under

2 such section, providing permission to use a

3 quantity of musical works not substantially

4 smaller than the quantity of such works per5 formed on coin-operated phonorecord players

6 during the 1-year period ending March 1, 1989,

7 the Librarian of Congress shall, upon petition

8 filed under subsection (a) within 1 year after

9 such termination or expiration, convene a copy10 right arbitration royalty panel. The arbitration

11 panel shall promptly establish an interim roy12 alty rate or rates for the public performance by

13 means of a coin-operated phonorecord player of

14 nondramatic musical works embodied in

15 phonorecords which had been subject to the ter16 minated or expired negotiated license agree17 ment. Such rate or rates shall be the same as

18 the last such rate or rates and shall remain in

19 force until the conclusion of proceedings by the

20 arbitration panel, in accordance with section

21 802, to adjust the royalty rates applicable to

22 such works, or until superseded by a new nego23 tiated license agreement, as provided in section

24 116(c).’’.

25 (2) Subsection (b) is amended—
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1 (A) by striking ‘‘Tribunal’’ the first place

2 it appears and inserting ‘‘Copyright Royalty

3 Tribunal or the Librarian of Congress’’;

4 (B) by striking ‘‘Tribunal’’ the second and

5 third places it appears and inserting ‘‘Librar6 ian’’; and

7 (C) by striking ‘‘Tribunal’’ the last place it

8 appears and inserting ‘‘Copyright Royalty Tri9 bunal or the Librarian of Congress’’.

10 (3) Subsection (c) is amended by striking ‘‘Tri11 bunal’’ and inserting ‘‘Librarian of Congress’’.

12 (4) Subsection (d) is amended—

13 (A) by striking ‘‘Chairman of the Tribu14 nal’’ and inserting ‘‘Librarian of Congress’’;

15 and

16 (B) by striking ‘‘determination by the Tri17 bunal’’ and inserting ‘‘a determination’’.

18 (5) Subsection (e) is amended by striking ‘‘Tri19 bunal’’ and inserting ‘‘Librarian of Congress’’.

20 (e) REPEAL.—Sections 805 through 810 of title 17,

21 United States Code, and the items relating to such sec22 tions in the table of sections at the beginning of chapter

23 8 of such title, are repealed.

24 (f) CLERICAL AMENDMENT.—The table of sections at

25 the beginning of chapter 8 of title 17, United States Code,
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1 is amended by striking the items relating to sections 801

2 and 802 and inserting the following:

‘‘Sec. 801. Copyright arbitration royalty panels: establishment and purpose.

‘‘Sec. 802. Membership and proceedings of copyright arbitration royalty panels.’’.

3 SEC. 3. JUKEBOX LICENSES.

4 (a) REPEAL OF COMPULSORY LICENSE.—Section

5 116 of title 17, United States Code, and the item relating

6 to section 116 in the table of sections at the beginning

7 of chapter 1 of such title, are repealed.

8 (b) NEGOTIATED LICENSES.—(1) Section 116A of

9 title 17, United States Code, is amended—

10 (A) by redesignating such section as section

11 116;

12 (B) by striking subsection (b) and redesignating

13 subsections (c) and (d) as subsections (b) and (c),

14 respectively;

15 (C) in subsection (b)(2) (as so redesignated) by

16 striking ‘‘Copyright Royalty Tribunal’’ and inserting

17 ‘‘Librarian of Congress’’;

18 (D) in subsection (c) (as so redesignated)—

19 (i) in the subsection caption by striking

20 ‘‘ROYALTY TRIBUNAL’’ and inserting ‘‘ARBI21 TRATION ROYALTY PANEL’’; and

22 (ii) by striking ‘‘the Copyright Royalty Tri23 bunal’’ and inserting ‘‘a copyright arbitration

24 royalty panel’’; and
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1 (E) by striking subsections (e), (f), and (g).

2 (2) The table of sections at the beginning of chapter

3 1 of title 17, United States Code, is amended by striking

4 ‘‘116A’’ and inserting ‘‘116’’.

5 SEC. 4. PUBLIC BROADCASTING COMPULSORY LICENSE.

6 Section 118 of title 17, United States Code, is

7 amended—

8 (1) in subsection (b)—

9 (A) by striking the first 2 sentences;

10 (B) in the third sentence by striking

11 ‘‘works specified by this subsection’’ and insert12 ing ‘‘published nondramatic musical works and

13 published pictorial, graphic, and sculptural

14 works’’;

15 (C) in paragraph (1)—

16 (i) in the first sentence by striking ‘‘,

17 within one hundred and twenty days after

18 publication of the notice specified in this

19 subsection,’’; and

20 (ii) by striking ‘‘Copyright Royalty

21 Tribunal’’ each place it appears and insert22 ing ‘‘Librarian of Congress’’;

23 (D) in paragraph (2) by striking ‘‘Tribu24 nal’’ and inserting ‘‘Librarian of Congress’’;

25 (E) in paragraph (3)—
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1 (i) by striking the first sentence and

2 inserting the following: ‘‘In the absence of

3 license agreements negotiated under para4 graph (2), the Librarian of Congress shall,

5 pursuant to section 803, convene a copy6 right arbitration royalty panel to determine

7 and publish in the Federal Register a

8 schedule of rates and terms which, subject

9 to paragraph (2), shall be binding on all

10 owners of copyright in works specified by

11 this subsection and public broadcasting en12 tities, regardless of whether such copyright

13 owners have submitted proposals to the Li14 brarian of Congress.’’;

15 (ii) in the second sentence—

16 (I) by striking ‘‘Copyright Roy17 alty Tribunal’’ and inserting ‘‘copy18 right arbitration royalty panel’’; and

19 (II) by striking ‘‘clause (2) of

20 this subsection’’ and inserting ‘‘para21 graph (2)’’; and

22 (iii) in the last sentence by striking

23 ‘‘Copyright Royalty Tribunal’’ and insert24 ing ‘‘Librarian of Congress’’; and

25 (F) by striking paragraph (4);
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1 (2) by striking subsection (c); and

2 (3) in subsection (d)—

3 (A) by redesignating such subsection as

4 subsection (c);

5 (B) by striking ‘‘to the transitional provi6 sions of subsection (b)(4), and’’; and

7 (C) by striking ‘‘Copyright Royalty Tribu8 nal’’ and inserting ‘‘copyright arbitration roy9 alty panel’’.

10 SEC. 5. SECONDARY TRANSMISSIONS BY SUPERSTATIONS

11 AND NETWORK STATIONS FOR PRIVATE

12 VIEWING.

13 Section 119 of title 17, United States Code, is

14 amended—

15 (1) in subsection (b)—

16 (A) in paragraph (1) by striking ‘‘, after

17 consultation with the Copyright Royalty Tribu18 nal,’’ each place it appears;

19 (B) in paragraph (2) by striking ‘‘Copy20 right Royalty Tribunal’’ and inserting ‘‘Librar21 ian of Congress’’;

22 (C) in paragraph (3) by striking ‘‘Copy23 right Royalty Tribunal’’ and inserting ‘‘Librar24 ian of Congress’’; and

25 (D) in paragraph (4)—
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1 (i) by striking ‘‘Copyright Royalty

2 Tribunal’’ each place it appears and insert3 ing ‘‘Librarian of Congress’’;

4 (ii) by striking ‘‘Tribunal’’ each place

5 it appears and inserting ‘‘Librarian of

6 Congress’’; and

7 (iii) in subparagraph (C) by striking

8 ‘‘conduct a proceeding’’ in the last sen9 tence and inserting ‘‘convene a copyright

10 arbitration royalty panel’’; and

11 (2) by striking subsection (c) and inserting the

12 following:

13 ‘‘(c) DETERMINATION OF ROYALTIES.—The royalty

14 fee payable under subsection (b)(1)(B) shall be that estab15 lished by the Copyright Royalty Tribunal on May 1, 1992,

16 as corrected on May 18, 1992.’’.

17 SEC. 6. CONFORMING AMENDMENTS.

18 (a) CABLE COMPULSORY LICENSE.—Section 111(d)

19 of title 17, United States Code, is amended as follows:

20 (1) Paragraph (1) is amended by striking ‘‘,

21 after consultation with the Copyright Royalty Tribu22 nal (if and when the Tribunal has been con23 stituted),’’.

24 (2) Paragraph (1)(A) is amended by striking

25 ‘‘, after consultation with the Copyright Royalty Tri-
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1 bunal (if and when the Tribunal has been con2 stituted),’’.

3 (3) Paragraph (2) is amended by striking the

4 second and third sentences and by inserting the fol5 lowing: ‘‘All funds held by the Secretary of the

6 Treasury shall be invested in interest-bearing United

7 States securities for later distribution by the Librar8 ian of Congress in the event no controversy over dis9 tribution exists, or by a copyright arbitration royalty

10 panel in the event a controversy over such distribu11 tion exists. The Librarian shall compile and publish

12 on a semiannual basis, a compilation of all state13 ments of account covering the relevant 6-month pe14 riod provided by paragraph (1) of this subsection.’’.

15 (4) Paragraph (4)(A) is amended—

16 (A) by striking ‘‘Copyright Royalty Tribu17 nal’’ and inserting ‘‘Librarian of Congress’’;

18 and

19 (B) by striking ‘‘Tribunal’’ and inserting

20 ‘‘Librarian of Congress’’.

21 (5) Paragraph (4)(B) is amended to read as

22 follows:

23 ‘‘(B) After the first day of August of each

24 year, the Librarian of Congress shall, upon the

25 recommendation of the Register of Copyrights,
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1 determine whether there exists a controversy

2 concerning the distribution of royalty fees. If

3 the Librarian determines that no such con4 troversy exists, the Librarian shall, after de5 ducting reasonable administrative costs under

6 this section, distribute such fees to the copy7 right owners entitled, or to their designated

8 agents. If the Librarian finds the existence of

9 a controversy, the Librarian shall, pursuant to

10 chapter 8 of this title, convene a copyright arbi11 tration royalty panel to determine the distribu12 tion of royalty fees.’’.

13 (6) Paragraph (4)(C) is amended by striking

14 ‘‘Copyright Royalty Tribunal’’ and inserting ‘‘Li15 brarian of Congress’’.

16 (b) AUDIO HOME RECORDING ACT.—

17 (1) ROYALTY PAYMENTS.—Section 1004(a)(3)

18 of title 17, United States Code, is amended—

19 (A) by striking ‘‘Copyright Royalty Tribu20 nal’’ and inserting ‘‘Librarian of Congress’’;

21 and

22 (B) by striking ‘‘Tribunal’’ and inserting

23 ‘‘Librarian of Congress’’.
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1 (2) DEPOSIT OF ROYALTY PAYMENTS.—Section

2 1005 of title 17, United States Code, is amended by

3 striking the last sentence.

4 (3) ENTITLEMENT TO ROYALTY PAYMENTS.—

5 Section 1006(c) of title 17, United States Code, is

6 amended by striking ‘‘Copyright Royalty Tribunal’’

7 and inserting ‘‘Librarian of Congress shall convene

8 a copyright arbitration royalty panel which’’.

9 (4) PROCEDURES FOR DISTRIBUTING ROYALTY

10 PAYMENTS.—Section 1007 of title 17, United States

11 Code, is amended—

12 (A) in subsection (a)(1) by striking ‘‘Copy13 right Royalty Tribunal’’ and inserting ‘‘Librar14 ian of Congress’’;

15 (B) in subsection (b)—

16 (i) by striking ‘‘Copyright Royalty

17 Tribunal’’ and inserting ‘‘Librarian of

18 Congress’’; and

19 (ii) by striking ‘‘Tribunal’’ each place

20 it appears and inserting ‘‘Librarian of

21 Congress’’; and

22 (C) in subsection (c)—

23 (i) by striking the first sentence and

24 inserting ‘‘If the Librarian of Congress

25 finds the existence of a controversy, the Li-
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1 brarian shall, pursuant to chapter 8 of this

2 title, convene a copyright arbitration roy3 alty panel to determine the distribution of

4 royalty payments.’’; and

5 (ii) by striking ‘‘Tribunal’’ each place

6 it appears and inserting ‘‘Librarian of

7 Congress’’.

8 (5) ARBITRATION OF CERTAIN DISPUTES.—Sec9 tion 1010 of title 17, United States Code, is amend10 ed—

11 (A) in subsection (b)—

12 (i) by striking ‘‘Copyright Royalty

13 Tribunal’’ and inserting ‘‘Librarian of

14 Congress’’; and

15 (ii) by striking ‘‘Tribunal’’ each place

16 it appears and inserting ‘‘Librarian of

17 Congress’’;

18 (B) in subsection (e) by striking ‘‘Copy19 right Royalty Tribunal’’ each place it appears

20 and inserting ‘‘Librarian of Congress’’;

21 (C) in subsection (f)—

22 (i) by striking ‘‘Copyright Royalty

23 Tribunal’’ each place it appears and insert24 ing ‘‘Librarian of Congress’’;
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1 (ii) by striking ‘‘Tribunal’’ each place

2 it appears and inserting ‘‘Librarian of

3 Congress’’; and

4 (iii) in the third sentence by striking

5 ‘‘its’’ and inserting ‘‘the Librarian’s’’; and

6 (D) in subsection (g)—

7 (i) by striking ‘‘Copyright Royalty

8 Tribunal’’ and inserting ‘‘Librarian of

9 Congress’’; and

10 (ii) by striking ‘‘Tribunal’’ each place

11 it appears and inserting ‘‘Librarian of

12 Congress’’.

13 SEC. 7. EFFECTIVE DATE AND TERMINATION.

14 (a) IN GENERAL.—This Act and the amendments

15 made by this Act shall take effect on January 1, 1994.

16 (b) EFFECTIVENESS OF EXISTING RATES AND DIS17 TRIBUTIONS.—All royalty rates and all determinations

18 with respect to the proportionate division of compulsory

19 license fees among copyright claimants, whether made by

20 the Copyright Royalty Tribunal, or by voluntary agree21 ment, before the effective date set forth in subsection (a)

22 shall remain in effect until modified by voluntary agree23 ment or pursuant to the amendments made by this Act.

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