Opinion ID: 187426
Heading Depth: 4
Heading Rank: 2

Heading: Rejection of the Musical Works Benchmark

Text: In rejecting the rates paid by noncommericial radio stations for over-the-air musical works performances under Section 118 of the Copyright Act as a benchmark, the Judges explained that the musical works benchmark proposed by [noncommercials] is based on a very different marketplace characterized by different sellers who are selling different rights. Order, 72 Fed.Reg. at 24,098. Further, the Judges found ample evidence in the record... to controvert the underlying premise of this proposed benchmark that the market for sound recordings and the market for musical works are necessarily equivalent. Id. ; see SoundExchange Proposed Findings of Fact ¶¶ 486-495 (discussing evidence that in comparable markets musical works publishers receive lower royalty rates than do owners of sound recording rights). Noncommercials do not dispute the Judges' rationale for rejecting this benchmark, but instead insist it was arbitrary for the Judges not to justify rejecting reliance on the fee structure of these agreements as evidence that a flat-fee structure, regardless of usage, was appropriate for noncommercials. However, because the Judges noted that these agreements were so different from the rights at issue, representing different sellers who are selling different rights of different value, the Judges did not act arbitrarily by rejecting these agreements even for this limited purpose. Moreover, the rates set by the Judges did establish a flat-fee structure for the vast majority of noncommercial broadcasters then before them. Order, 72 Fed.Reg. at 24,099-100. The Judges estimated that the monthly 159,140 ATH allowance would create, effectively, a flat-fee structure covering approximately 80% of the NPR stations that streamed over the web. Id. at 24,099-100. While this appeal was pending, NPR was dismissed voluntarily from the case. Order No. 07-1123 (D.C.Cir. Mar. 18, 2009). Because NPR appears to have represented the largest of the noncommercial broadcasters, see Order, 72 Fed. Reg. at 24,099, the allowance may cover all the broadcasting needs of the remaining noncommercials. For instance, the National Religious Broadcasters Noncommercial Music License Committee (Noncommercial Religious Broadcaster Committee), the only noncommercial party other than NPR to file proposed findings of fact and conclusions of law with the Judges, stated that listenership on [Committee-represented stations] is typically small. CDR, [a Committee-represented station], is representative of other [Committee-represented] stations and averages a concurrent online audience of just under 14 listeners. Noncommercial Religious Broadcasters Committee Proposed Findings of Fact ¶ 6. Assuming thirty-one days in a month, this listenership level would result in 10,416 ATH of streaming content, or only 6.5% of the monthly ATH allowance.