Opinion ID: 187426
Heading Depth: 3
Heading Rank: 1

Heading: Competitive Market Requirement

Text: The Judges are required to determine royalty rates that most clearly represent the rates and terms that would have been negotiated in the marketplace between a willing buyer and a willing seller. 17 U.S.C. § 114(f)(2)(B). The commercial webcasters argue that an earlier decision by the Librarian, affirmed by this court, requires the Judges to base rates on a perfectly competitive market. See Determination of Reasonable Rates and Terms for the Digital Performance of Sound Recordings and Ephemeral Recordings (Webcaster I), 67 Fed.Reg. 45,240, 45,244-45 (July 8, 2002) (Because of the diversity among the buyers and the sellers, the [Copyright Arbitration Royalty Panel] noted that one would expect `a range of negotiated rates,' and so interpreted the statutory standard as `the rates to which, absent special circumstances, most willing buyers and willing sellers would agree' in a competitive marketplace.). This claim fails for two reasons. First, the dictum from the prior decision calling for a competitive benchmark does not require rates to be based on a perfectly competitive market. Second, our having affirmed Webcaster I in Beethoven.com lends no additional weight to the commercial webcasters' argument. Far from endorsing a competitive (or perfectly competitive) standard, we specifically refused to  examine the correctness of the Librarian's decision regarding competitiveness. Beethoven.com, 394 F.3d at 952 (emphasis added). Because of the exceptionally deferential review undertaken in that case, our having affirmed the decision of the Librarian cannot be taken to bind the Judges today. Id. The statute speaks only of a willing buyer and a willing seller. This is the standard the Judges were to apply in evaluating whether a market benchmark was an appropriate model on which to base their own rate determinations. The statute does not require that the market assumed by the Judges achieve metaphysical perfection in competitiveness. The Judges, not this court, bear the initial responsibility for interpreting the statute. Applying the lessons of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we can only assess the reasonableness of the Judges' interpretation of the inherent ambiguity in the statute's mandate. Appellants have pointed to nothing in the Judges' interpretation to establish unreasonableness.