E8-6068. Notice of Intent To Audit

AGENCY:

Copyright Royalty Board, Library of Congress.

ACTION:

Public notice.

SUMMARY:

The Copyright Royalty Judges are announcing receipt of a notice of intent to audit the 2006 and 2007 statements of account submitted by Last.fm, Ltd. concerning the royalty payments made under two statutory licenses.

FOR FURTHER INFORMATION CONTACT:

Richard Strasser, Senior Attorney, or Gina Giuffreda, Attorney Advisor, by telephone at [phone] or e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act of 1995 (“DPRA”), Public Law No. 104-39, which created an exclusive right for copyright owners of sound recordings subject to certain limitations, to perform publicly sound recordings by means of certain digital audio transmissions. Among the limitations on the performance right was the creation of a compulsory license for nonexempt noninteractive digital subscription transmissions. 17 U.S.C. 114(f).

Section 114 was later amended with the passage of the Digital Millennium Copyright Act of 1998 (“DMCA” or “the Act”), Public Law No. 105-304, to cover additional digital audio transmissions, including eligible nonsubscription transmissions.^[1] In addition to expanding the section 114 license, the DMCA also created a statutory license to allow a service to make any necessary ephemeral reproductions to facilitate the digital transmission of the sound recording. 17 U.S.C. 112(e).

Licensees may operate under these licenses provided they pay the royalty fees and comply with the terms set by the Copyright Royalty Judges (the “Judges”). On May 1, 2007, the Copyright Royalty Judges issued their final determination setting rates and terms for the section 112 and 114 licenses for the period 2006-2010. 72 FR 24084. As part of the terms set for these licenses, the Judges designated SoundExchange, Inc. as the organization charged with collecting the royalty payments and statements of account and distributing the royalties to the copyright owners and performers entitled to receive such royalties under the section 112 and 114 licenses. 37 CFR 380.4(b)(1). As the designated Collective, SoundExchange may conduct a single audit of a licensee for any calendar year for the purpose of verifying their royalty payments. SoundExchange must first file with the Judges a notice of intent to audit a licensee and serve the notice on the licensee to be audited. 37 CFR 380.6(b), (c).

On March 3, 2008, pursuant to 37 CFR 380.6(c), SoundExchange filed with the Judges a notice of intent to audit Last.fm, Ltd. for the years 2006 and 2007.^[2] Section 380.6(c) requires the Judges to publish a notice in the Federal Register within 30 days of receipt of the notice announcing the Collective's intent to conduct an audit.

In accordance with 37 CFR 380.6(c), the Copyright Royalty Judges are publishing today's notice to fulfill this requirement with respect to SoundExchange's notice of intent to audit Last.fm, Ltd. filed on March 3, 2008.

Dated: March 19, 2008.

James Scott Sledge,

Chief Copyright Royalty Judge.

Footnotes

1.  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 a part of a service that provides audio programming consisting in whole or in part of performances of sound recordings the primary purpose of which is to provide audio or entertainment programming, but not to sell, advertise, or promote particular goods or services other than sound recordings, live concerts, or other music-related events. 17 U.S.C. 114(j)(6).

2.  SoundExchange also stated in the notice its intent to audit Last.fm Ltd. for the calendar year 2005. Verification of statements of account for 2005 are governed by 37 CFR 262.6(c) of the Copyright Office's regulations.