05-1435. Rate Adjustment for the Satellite Carrier Compulsory License

AGENCY:

Copyright Office, Library of Congress.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The Copyright Office of the Library of Congress is submitting for public comment a proposed settlement of royalty rates for analog television broadcast stations retransmitted by satellite carriers under statutory license.

DATES:

Comments and Notices of Intent to Participate must be submitted no later than February 25, 2005.

ADDRESSES:

If hand delivered by a private party, an original and five copies of a comment and a Notice of Intent to Participate should be brought to Room LM-401 of the James Madison Memorial Building between 8:30 a.m. and 5 p.m. and the envelope should be addressed as follows: Copyright Office General Counsel/CARP, U.S. Copyright Office, James Madison Memorial Building, Room LM-401, 101 Independence Avenue, S.E., Washington, DC 20559-6000. If delivered by a commercial courier, an original and five copies of a comment and a Notice of Intent to Participate must be delivered to the Congressional Courier Acceptance Site located at 2nd and D Streets, N.E., between 8:30 a.m. and 4 p.m. The envelope should be addressed as follows: Copyright Office General Counsel/CARP, Room LM-403, James Madison Memorial Building, 101 Independence Avenue, S.E., Washington, DC. If sent by mail (including overnight delivery using U.S. Postal Service Express Mail), an original and five copies of a comment and a Notice of Intent to Participate should be addressed to: Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. Comments and Notices of Intent to Participate may not be delivered by means of overnight delivery services such as Federal Express, United Parcel Service, etc., due to delays in processing receipt of such deliveries.

FOR FURTHER INFORMATION CONTACT:

David O. Carson, General Counsel, or William J. Roberts, Jr., Senior Attorney, Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. Telephone: [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

On December 8, 2004, the President signed the Satellite Home Viewer Extension and Reauthorization Act (“SHVERA”), a part of the Consolidated Appropriations Act of 2005, Pub. L. 108-447. SHVERA extends for an additional five years the statutory license for satellite carriers retransmitting over-the-air television broadcast stations to their subscribers, 17 U.S.C. 119, as well as makes a number of amendments to the license. One of the amendments to section 119 sets forth a process for adjusting the royalty fees paid by satellite carriers for retransmitting analog television network and superstations. 17 U.S.C. 119(c)(1). The law directs the Librarian of Congress to publish notice in the Federal Register requesting satellite carriers, distributors and copyright owners to submit to the Copyright Office any voluntary agreements they have negotiated as to the adjustment of the rates for analog stations. The Library published such a notice on December 30, 2004, and, pursuant to the statute, requested that any agreements be submitted no later than January 10, 2005. 69 FR 78482 (December 30, 2004).

The Office has received one agreement, submitted jointly by the satellite carriers DirecTV, Inc. and EchoStar Satellite L.L.C., the copyright owners of motion pictures and syndicated television series represented by the Motion Picture Association of America, and the copyright owners of sports programming represented by the Office of the Commissioner of Baseball. Section 119(c)(1)(D)(ii)(II) requires the Library to “provide public notice of the royalty fees from the voluntary agreement and afford parties an opportunity to state that they object to those fees.” 17 U.S.C. 119(c)(1)(D)(ii)(II). This Notice of Proposed Rulemaking (“NPRM”) fulfills the requirement.

The law further provides that the Librarian shall adopt the rates contained in the voluntary agreement as applicable to all satellite carriers, distributors and copyright owners “unless a party with an intent to participate” in a royalty rate adjustment proceeding before a Copyright Arbitration Royalty Panel (“CARP”) and a “significant interest in the outcome” of the CARP proceeding files an objection. Consequently, any party that objects to the rates proposed in this NPRM must submit the following on or before February 25, 2005:

1. A notice of objection to the rates identifying the rate or rates to which the objection applies and the reasons for the objection;

2. A statement setting forth in detail why the objector has a significant interest in the royalty rates to be adopted; and

3. A separate Notice of Intent to Participate in the CARP proceeding to adjust the rates. The CARP proceeding will commence on May 1, 2005. See 17 U.S.C. 119(c)(1)(F).

Only parties objecting to the royalty rates should submit the above-described documents.

A copy of the voluntary agreement can be viewed at http://www.copyright.gov/​carp/​sat_​rate_​agreement.pdf. The Library is not proposing for adoption the additional terms set forth in the agreement as the statute only provides for adoption of royalty rates. See 17 U.S.C. 119(c)(1)(D)(ii)(III).

Proposed Regulations

For the reasons set forth above, the Copyright Office proposes to amend 37 CFR chapter II as follows:

PART 258—ADJUSTMENT OF ROYALTY FEE FOR SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS

1. The authority citation for part 258 is amended to read as follows:

Authority: 17 U.S.C. 119, 702, 802.

2. Section 258.2 is revised to read as follows:

§ 258.2

Definitions.

(a) Commercial establishment. The term “commercial establishment” means an establishment used for commercial purposes, such as bars, restaurants, private offices, fitness clubs, oil rigs, retail stores, banks and financial institutions, supermarkets, auto and boat dealerships, and other establishments with common business areas; provided that the term “commercial establishment” shall not include a multi-unit permanent or temporary dwelling where private home viewing occurs, such as hotels, dormitories, hospitals, apartments, condominiums and prisons, all of which shall be subject to the rates applicable to private home viewing.

(b) Syndex-proof signal. A satellite retransmission of a broadcast signal shall be deemed “syndex proof” for purposes of § 258.3(b) if, during any semi-annual reporting period, the retransmission does not include any program which, if delivered by any cable system in the United States, would be subject to the syndicated exclusivity rules of the Federal Communications Commission.

(c) Per subscriber per month. The term “per subscriber per month” means each subscriber subscribing to the station in question, or to a package including such station, on the last day of a given month.

3. Section 258.3 is amended by adding new paragraphs (d) through (h) to read as follows:

§ 258.3

Royalty fee for secondary transmission of broadcast stations by satellite carriers.

* * * * *

(d) Commencing January 1, 2005, the royalty rate for secondary transmission of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 20 cents per subscriber per month for distant superstations.

(ii) 17 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 40 cents per subscriber per month for distant superstations.

(e) Commencing January 1, 2006, the royalty rate for secondary transmission of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 21.5 cents per subscriber per month for distant superstations.

(ii) 20 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 43 cents per subscriber per month for distant superstations.

(f) Commencing January 1, 2007, the royalty rate for secondary transmission of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 23 cents per subscriber per month for distant superstations.

(ii) 23 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 46 cents per subscriber per month for distant superstations.

(g) Commencing January 1, 2008, the royalty rate for secondary transmission of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) The 2007 rate per subscriber per month for distant superstations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(ii) The 2007 rate per subscriber per month for distant network stations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(2) For viewing in commercial establishments, the 2007 rate per subscriber per month for viewing distant superstations in commercial establishments adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(h) Commencing January 1, 2009, the royalty rate for secondary transmission of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) The 2008 rate per subscriber per month for distant superstations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

(ii) The 2008 rate per subscriber per month for distant network stations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

(2) For viewing in commercial establishments, the 2008 rate per subscriber per month for viewing distant superstations in commercial establishments adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

Dated: January 21, 2005

Marybeth Peters,

Register of Copyrights.