05-2973. Digital Performance Right in Sound Recordings and Ephemeral Recordings

AGENCY:

Copyright Royalty Judges, Library of Congress.

ACTION:

Notice announcing commencement of proceeding with request for Petitions to Participate.

SUMMARY:

The Interim Chief Copyright Royalty Judge of the Library of Congress is announcing the commencement of the proceeding to determine the reasonable rates and terms for two statutory licenses for the period beginning January 1, 2006, and ending on December 31, 2010. One license allows public performances of sound recordings by means of an eligible nonsubscription transmission and transmissions made by a new subscription service; the other permits the making of an ephemeral phonorecord of a sound recording in furtherance of making a permitted public performance of the sound recording. The Interim Chief Copyright Royalty Judge is also announcing the date by which a party who wishes to participate in the rate adjustment proceeding must file its Petition to Participate and the accompanying $150 filing fee.

DATES:

Petitions to Participate and the filing fee are due no later than March 18, 2005.

ADDRESSES:

If hand delivered by a private party, an original and five copies of a Petition to Participate along with the $150 filing fee 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/CRJ, U.S. Copyright Office, James Madison Memorial Building, Room LM-401, 101 Independence Avenue, SE., Washington, DC 20559-6000. If delivered by a commercial carrier, an original and five copies of a Petition to Participate along with the $150 filing fee must be delivered to the Congressional Courier Acceptance Site located at 2nd and D Street, NE., between 8:30 a.m. and 4 p.m. The envelope should be addressed as follows: Copyright Office General Counsel/CRJ, Room 403, James Madison Memorial Building, 101 Independence Avenue, SE., Washington, DC. If sent by mail (including overnight delivery using U.S. Postal Service Express Mail), an original and five copies of a Petition to Participate along with the $150 filing fee should be addressed to: Copyright Royalty Judges (CRJ)/CARP, P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. Petitions to Participate and the $150 filing fee 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:

William J. Roberts, Jr., Senior Attorney, or Abioye E. Oyewole, CARP Specialist. Telephone: [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

Background

On November 30, 2004, the President signed into law the Copyright Royalty and Distribution Reform Act of 2004 (the “Act”), Public Law 108-419, 118 Stat. 2341. This Act, which becomes effective on May 31, 2005, amends the Copyright Act, title 17 of the United States Code, by phasing out the Copyright Arbitration Royalty Panel (“CARP”) system and replacing it with three permanent Copyright Royalty Judges (“CRJs”). As such, the CRJs will conduct proceedings to adjust the royalty rates paid under certain statutory licenses and to determine the distribution of royalties collected under sections 111, 119, and chapter 10. See 17 U.S.C. 801 (effective May 31, 2005).^[1]

The Act directs that “as soon as practicable after the date of enactment of this Act,” the CRJs or interim CRJs shall publish a notice initiating “a proceeding to establish or adjust rates and terms for the statutory licenses under section 114(f)(2) and 112(e) . . . for new subscription services and eligible nonsubscription services for the period commencing on January 1, 2006.” ^[2] Section 6(b)(4) of the Copyright Royalty and Distribution Reform Act of 2004, Public Law 108-419. This notice initiates the rate adjustment proceeding.

Petitions To Participate

Any party who wishes to participate in the proceeding to adjust the rates and terms for the digital public performance of sound recordings by means of an eligible nonsubscription transmission ^[3] or a transmission made by a new subscription service ^[4] under section 114(f)(2) and for the making of ephemeral copies in furtherance of these digital public performances under section 112(e) must submit to the CRJs a Petition to Participate by no later than March 18, 2005. 17 U.S.C. 803(b)(1)(B). The Petition must describe the party's interest in the proceeding and be accompanied by a $150 filing fee. Parties with similar interests may join in the filing of a single Petition, accompanied by a single fee. Id. Cash will not be accepted; therefore, parties must pay the filing fee with a check or money order made payable to “Copyright Royalty Judge Program.” If a check received in payment of the filing fee is returned for lack of sufficient funds, the corresponding Petition to Participate will be dismissed.

Once Petitions to Participate are filed, the CRJs will provide to the parties a list of participants and will initiate a three-month voluntary negotiation period to afford the parties an opportunity to reach a settlement. 17 U.S.C. 803(b)(3). A party who fails to submit a timely Petition to Participate will be precluded from objecting to a settlement reached during the voluntary negotiation period, even if the CRJs ultimately accept such late-filed Petition. 17 U.S.C. 803(b)(1)(A)(ii).

Structure of Proceeding

If no settlement is reached during the voluntary negotiation period, the CRJs will specify a date falling within four to five months after the closure of the voluntary negotiation period for the filing of written direct statements. 17 U.S.C. 803(b)(6)(C)(i). Such statements will be comprised of witness statements, testimony and exhibits to be presented in the proceeding as well as “such other information that is necessary to establish terms and rates.” 17 U.S.C. 803(b)(6)(C)(ii)(II).

Once written direct statements are filed, the CRJs will meet with the parties to schedule the 60-day discovery period. 17 U.S.C. 803(b)(6)(C)(ii)(I), (iv). After closure of the discovery period, the CRJs will schedule a settlement conference among the parties to take place outside the presence of the CRJs “to facilitate the presentation of offers of settlement among” the parties. 17 U.S.C. 803(b)(6)(C)(x). The 21-day settlement conference will follow the discovery period. Id. If no full settlement of all disputes result, the CRJs will conduct hearings and will issue their determination “not later than 11 months after the conclusion of the 21-day settlement conference period.” 17 U.S.C. 803(c)(1).

Applicable Regulations

The CRJs must apply the regulations governing the CARP system, to the extent that they are not inconsistent with the Act, until such time as they adopt regulations under section 803(b)(6)(A). 17 U.S.C. 803(b)(6)(B). Therefore, in accordance with 37 CFR 251.44(a), parties must submit an original and five copies of their Petitions to Participate.

Dated: February 10, 2005.

Bruce G. Forrest,

Interim Chief Copyright Royalty Judge.

Footnotes

1.  Unless otherwise noted, all references to Chapter 8 of title 17 of the United States Code become effective May 31, 2005.

2.  In 2004, a proceeding to adjust the rates and terms for these services for the license period 2005-2006 was initiated by the Copyright Office under the CARP system. See 69 FR 689 (January 6, 2004) and 69 FR 5196 (February 3, 2004). However, the Act terminated this proceeding and directed that the rates and terms in effect on December 31, 2004, shall remain in effect at least for 2005. Section 6(b)(3) of the Copyright Royalty and Distribution Reform Act of 2004, Public Law 108-419; see also 70 FR 6736 (February 8, 2005).

3.  An “eligible nonsubscription transmission” is a noninteractive digital audio transmission which, as the name implies, does not require a subscription for receiving the transmission. The transmission must also be made as part of a service that provides audio programming consisting in whole or in part of performances of sound recordings the purpose of which is to provide audio or entertainment programming, but not to sell, advertise, or promote particular goods or services. See 17 U.S.C. 114(j)(6).

4.  A “new subscription service” is “a service that performs sound recordings by means of noninteractive subscription digital audio transmissions and that is not a preexisting subscription or a preexisting satellite digital audio radio service.” 17 U.S.C. 114(j)(8).