05-15731. Distribution of the 2001, 2002, and 2003 Satellite Royalty Funds

AGENCY:

Copyright Royalty Board, Library of Congress.

ACTION:

Request for comments.

SUMMARY:

The Interim Chief Copyright Royalty Judge, on behalf of the Copyright Royalty Board, is requesting comments on the existence of controversies to the distribution of the 2001, 2002, and 2003 satellite royalty funds.

DATES:

Written comments should be received no later than September 8, 2005.

ADDRESSES:

If hand delivered by a private party, an original and five copies of comments must be brought to Room LM-401 of the James Madison Memorial Building, Monday through Friday, between 8:30 a.m. and 5 p.m., and the envelope must be addressed as follows: Copyright Royalty Board, Library of Congress, James Madison Memorial Building, LM-401, 101 Independence Avenue, SE., Washington, DC 20559-6000. If delivered by a commercial courier (excluding overnight delivery services such as Federal Express, United Parcel Service and similar overnight delivery services), an original and five copies of comments must be delivered to the Congressional Courier Acceptance Site located at 2nd and D Street, NE., Monday through Friday, between 8:30 a.m. and 4 p.m., and the envelope must be addressed as follows: Copyright Royalty Board, Library of Congress, James Madison Memorial Building, LM-403, 101 Independence Avenue, SE., Washington, DC 20559-6000. If sent by mail (including overnight delivery using United States Postal Service Express Mail), an original and five copies of comments must be addressed to: Copyright Royalty Board, P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. Comments 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, CRB Program Specialist. Telephone [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

Each year satellite carriers submit royalties to the Copyright Office under the section 119 statutory license for the retransmission to their subscribers of distant over-the-air television broadcast signals. 17 U.S.C. 119. These royalties are, in turn, 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 negotiate the terms of a settlement as to the division of the royalty funds, or the Copyright Royalty Board may conduct a proceeding to determine the distribution of the royalties that remain in controversy. See 17 U.S.C. Chapter 8.

By Motion received on June 20, 2005, representatives of the Phase I claimant categories (the “Phase I Parties”) ^[1] have asked the Board to authorize a partial distribution of 50% of each of the 2001, 2002, and 2003 satellite royalty funds, asserting that 50% of those funds is not in controversy. As set forth in the Motion, the proposed partial distribution would be preceded by a notice in the Federal Register, seeking comments with respect to the premise of the Motion that 50% of the relevant royalty funds is not in controversy. The Phase I Parties also indicated that, “in the event that the final percentage shares to Phase I Parties differ from the distributions made pursuant to this Motion, any overpayment that results from the final distribution shall be repaid * * * with interest * * *.” Motion, at 4 (internal quotation and citation omitted).

In support of their Motion, the Phase I Parties invoked the Board's authority under Copyright Act sections 801(b)(3)(C) and 119(b)(4)(C). Because no distribution proceeding with respect to the 2001-2003 satellite funds was “pending,” the Board was concerned that it might lack authority to act favorably on the requested 50% partial distribution. Accordingly, on July 1, 2005, the Board invited supplemental briefing from the Phase I Parties on this issue. In their supplemental brief, filed July 26, 2005, the Phase I Parties rely heavily on section 801(b)(3)(A). 17 U.S.C. 801(b)(3)(A), which was enacted as part of the Copyright Royalty and Distribution Reform Act of 2004, Public Law 108-419, 118 Stat. 2341 (November 30, 2004), “authorize[s] the distribution” of satellite and other royalty funds “to the extent that the Copyright Royalty Judges have found that the distribution of such fees is not subject to controversy.” In arguing that section 801(b)(3)(A) should be construed to permit partial distributions prior to the formal initiation of distribution proceedings, the Phase I Parties point to the historic practices of the Copyright Royalty Tribunal and the Copyright Arbitration Royalty Panel system and demonstrate that Congress did not intend to alter that flexibility in adopting the current language of Copyright Act section 801(b)(3). After considering the arguments made by the Phase I Parties, the Board agrees with the Phase I Parties that section 801(b)(3)(A) should be construed to authorize the partial distribution of royalties not in controversy prior to the initiation of proceedings under sections 803(b)(1).

Accordingly, through this Federal Register notice, the Board is seeking comments on whether any controversy exists that would preclude the distribution of 50% of the satellite royalty funds to the Phase I Parties. If no controversy exists with respect to 50% of the funds, or no comments are received, the Board will grant the Phase I Parties' Motion for the partial distribution of the 2001-2003 satellite royalty funds, subject to the protective refund conditions required for partial distributions.

The Board also seeks comment on the existence and extent of any controversies to the 2001-2003 satellite royalty funds, either at Phase I or Phase II, with respect to the 50% of the 2001-2003 satellite royalty funds that would remain, if the partial distribution is granted. In Phase I of a satellite royalty distribution, royalties are distributed to certain categories of broadcast programming that have been retransmitted by satellite carriers. The categories have traditionally been movies and syndicated television series, sports programming, commercial and noncommercial broadcaster-owned programming, religious programming, music programming and Canadian programming. In Phase II of a satellite royalty distribution, royalties are distributed to claimants within each of the Phase I categories. Any party submitting comments on the existence of a Phase II controversy must identify the category or categories in which there is a dispute, and the extent of the controversy or controversies.

The Board must be advised of the existence and extent of all Phase I and Phase II controversies by the end of the comment period. It will not consider any controversies that come to its attention after the close of that period.

Dated: August 4, 2005.

Bruce G. Forrest,

Interim Chief Copyright Royalty Judge.

Footnotes

1.  The “Phase I Parties” are the Program Suppliers, the Joint Sports Claimants, the Public Television Claimants, the Broadcaster Claimants Group, the American Society of Composers, Authors and Publishers, Broadcast Music, Inc., SESAC, Inc., and the Devotional Claimants.