E7-15680. Notice of Terminations

AGENCY:

Copyright Office, Library of Congress.

ACTION:

Notice of termination of proceedings.

SUMMARY:

The Copyright Office of the Library of Congress is announcing the termination of the proceedings in the above-captioned dockets conducted under the former Copyright Arbitration Royalty Panel system. The Office is also providing notice that the authority to set rates or to make determinations regarding the future distribution of royalty funds associated with these proceedings will be transferred to the Copyright Royalty Board.

DATES:

Effective August 10, 2007.

FOR FURTHER INFORMATION CONTACT:

Tanya M. Sandros, Acting General Counsel, or Ben Golant, Principal Legal Advisor. Telephone: [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

On November 30, 2004, the President signed into law the Copyright Royalty and Distribution Reform Act of 2004 (the “CRDRA”), Pub. L. 108-419, No. 118 Stat. 2341. This Act, which became effective on May 31, 2005, phases out the Copyright Arbitration Royalty Panel (“CARP”) system and replaces it with three permanent Copyright Royalty Judges (“CRJs”). Additionally, CRDRA allows for the termination of “any [CARP] proceeding commenced by the date of the enactment of this Act...and any proceeding so terminated shall become null and void. In such cases, the Copyright Royalty Judges may initiate a new proceeding in accordance with regulations adopted pursuant to section 803(b)(6) of title 17, United States Code.” Section 6(b)(1) of the Copyright Royalty and Distribution Reform Act of 2004, Pub. L. No. 108-419. The Copyright Office is announcing the termination of all open proceedings under this provision.

Cable Royalties. The cable statutory license, first enacted through the Copyright Act of 1976, and codified at Section 111 of the Act, provides cable systems with a statutory license to retransmit a performance or display of a work embodied in a primary transmission made by a television or radio station licensed by the Federal Communications Commission (“FCC”). Cable systems that retransmit broadcast signals in accordance with the provisions governing the statutory license set forth in Section 111 are required to pay royalty fees to the Copyright Office. Payments made under the cable statutory license are remitted semi-annually to the Copyright Office which invests the royalties in United States Treasury securities pending distribution of these funds to those copyright owners who are entitled to receive a share of the fees. We terminate Docket Nos. 2001-8 CARP CD 98-99, 2002-8 CARP CD 2000, 2003-2 CARP CD 2001, and 2004-5 CARP CD-2002, the four Section 111 CARP proceedings that have remained open.

We note that there has been a controversy regarding the participation of the Independent Producers Group (“IPG”) in the distribution of the 1998-2002 cable royalty funds. In past Orders, the Office has found that IPG has repeatedly failed to comply with the rules governing the CARP process, especially with regard to service of filings on other parties. Consequently, the Office did not accept its responses to its September 2005 Orders when making its determination with respect to a further partial distribution. See, e.g., Distribution of the 1998-2002 Cable Royalty Funds, Order (rel. Apr. 3, 2007). In response to this order, IPG asked the Office to clarify that it remains a party to the proceedings in which it has an interest. (Letter from James Sun, Pick & Boydston, LLP, dated April 11, 2007.) The question, however, is moot. Termination of these proceedings brings an end to all outstanding controversies before the Office and vests authority in the CRJs to initiate a new proceeding in accordance with their rules to consider the disposition of the remaining royalty fees that have not yet been distributed.

Satellite Royalties. The satellite carrier statutory license, first enacted through the Satellite Home Viewer Act (“SHVA”) of 1988, and codified in Section 119 of the Act, establishes a statutory copyright licensing scheme for satellite carriers that retransmit the signals of distant television network stations and superstations to satellite dish owners for their private home viewing and for viewing in commercial establishments. Satellite carriers may use the Section 119 license to retransmit the signals of superstations to subscribers located anywhere in the United States. However, the Section 119 statutory license limits the secondary transmissions of network station signals to no more than two such stations in a single day to persons who reside in unserved households. Each year satellite carriers submit royalties to the Copyright Office under the section 119 statutory license for the retransmission to their subscribers of superstations and network stations to unserved households. 17 U.S.C. 119. These royalties, in turn, have been distributed in one of two ways to copyright owners whose works were included in a retransmission of an over-the-air television broadcast signal and who timely filed a claim for royalties with the Copyright Office. The copyright owners may either have negotiated the terms of a settlement as to the division of the royalty funds, or a CARP was convened to conduct a proceeding to determine the distribution of the royalties that remain in controversy. We terminate Docket Nos. 2001-5 CARP SD 99 and 2001-7 CARP SD 2000, the two Section 119 CARP proceedings that have remained open. Henceforth, resolution of the controversies concerning the distribution of the remaining funds shall be considered by the CRJs.

Section 115 Royalties. The Digital Performance Right In Sound Recording Act of 1995 (“DPRA”), Pub. L. No. 104-39, 109 Stat. 336, clarified the scope of the compulsory license to make and distribute phonorecords of nondramatic musical compositions, including the right to distribute or authorize distribution by means of a digital transmission which constitutes a “digital phonorecord delivery.’” 17 U.S.C. 115(c)(3)(A). The DPRA established that the rate for all DPDs made or authorized under a compulsory license on or before December 31, 1997, was the same as the rate in effect for the making and distribution of physical phonorecords for that period. 17 U.S.C. 115(c)(3)(A)(i). For DPDs made or authorized after December 31, 1997, the DPRA established a two-tier process for determining the terms and rates: either the copyright owners of nondramatic musical works and those persons entitled to obtain a license may have negotiated the rates and terms for the statutory license, or they may have participated in a CARP proceeding. 17 U.S.C. 115(c)(3)(A)-(D). Such rates and terms, whether negotiated by the parties or determined by a CARP, were to distinguish between “digital phonorecord deliveries where the reproduction or distribution of a phonorecord is incidental to the transmission which constitutes the digital phonorecord delivery, and (ii) digital phonorecord deliveries in general.” 17 U.S.C. 115(c)(2)(C)-(D). We terminate Docket No. 99-4 CARP DPRA, the one CARP proceeding that has remained open under Section 115.

Disposition. We hereby terminate the above-captioned proceedings immediately pursuant to Section 6(b)(1) of the CRDRA. As a result, subsequent proceedings regarding the rates for Section 115 and the distribution of royalties that were the subject of the identified proceedings shall be initiated under the new Copyright Royalty Board system.

Dated: August 6, 2007.

Marybeth Peters,

Register of Copyrights.