2010-2219. Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services

AGENCY:

Copyright Royalty Board, Library of Congress.

ACTION:

Final rule.

SUMMARY:

The Copyright Royalty Judges are publishing final regulations governing the rates for the preexisting satellite digital audio radio services' use of the ephemeral recordings statutory license under the Copyright Act for the period 2007 through 2012.

DATES:

Effective Date: March 5, 2010.

Applicability Dates: The regulations apply to the license period January 1, 2007, through December 31, 2012.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

On January 24, 2008, the Copyright Royalty Judges (“Judges”) published in the Federal Register their determination of royalty rates and terms under the statutory license under Sections 112(e) and 114 of the Copyright Act, title 17 of the United States Code, for the period 2007 through 2012 for preexisting satellite digital audio radio services (“SDARS”). 73 FR 4080. In SoundExchange, Inc. v. Librarian of Congress, 571 F.3d 1220, 1226 (D.C. Cir. 2009), the U.S. Court of Appeals for the District of Columbia Circuit affirmed the Judges' determination in all but one respect, remanding to the Judges the single matter of specifying a royalty for the use of the ephemeral recordings statutory license under Section 112(e) of the Copyright Act. By order dated October 22, 2009, the Judges established a period from November 2, 2009, through December 2, 2009, for SoundExchange, Inc. and Sirius XM Radio Inc. (collectively, the “Parties”) to negotiate and submit a settlement of the ephemeral royalty rate issue that was the subject of the remand.

On November 24, 2009, the Parties submitted their settlement of the remanded issue. Subsequently, the Judges published for comment the proposed change in the rule necessary to implement that settlement pursuant to the order of remand from the U.S. Court of Appeals for the District of Columbia Circuit. 74 FR 66601 (December 16, 2009). Comments were due to be filed by no later than January 15, 2010. Having received no comments or objections to the proposed change, the Judges are now adopting as final the proposed change as published on December 16, 2009. See 74 FR 66601.

As noted in the December 16 publication, pursuant to the Parties' settlement, the change to the regulations at 37 CFR 382.12 adopted today do not disturb the combined Section 112(e)/114 royalty previously set by the Judges but do specify that five percent of the combined royalty will be considered the Section 112(e) royalty, while the balance of the royalty is attributable to the Section 114 license.

List of Subjects in 37 CFR Part 382

• Copyright
• Digital audio transmissions
• Performance right
• Sound recordings

Final Regulations

For the reasons set forth in the preamble, the Copyright Royalty Judges amend part 382 of title 37 of the Code of Federal Regulations as follows:

PART 382—RATES AND TERMS FOR DIGITAL TRANSMISSIONS OF SOUND RECORDINGS AND THE REPRODUCTION OF EPHEMERAL RECORDINGS BY PREEXISTING SUBSCRIPTION SERVICES AND PREEXISTING SATELLITE DIGITAL AUDIO RADIO SERVICES

1. The authority citation for part 382 continues to read as follows:

Authority: 17 U.S.C. 112(e), 114, and 801(b)(1).

2. Section 382.12 is revised to read as follows:

§ 382.12

Royalty fees for the public performance of sound recordings and the making of ephemeral recordings.

(a) In general. The monthly royalty fee to be paid by a Licensee for the public performance of sound recordings pursuant to 17 U.S.C. 114(d)(2) and the making of any number of ephemeral phonorecords to facilitate such performances pursuant to 17 U.S.C. 112(e) shall be the percentage of monthly Gross Revenues resulting from Residential services in the United States as follows: for 2007 and 2008, 6.0%; for 2009, 6.5%; for 2010, 7.0%; for 2011, 7.5%; and for 2012, 8.0%.

(b) Ephemeral recordings. The royalty payable under 17 U.S.C. 112(e) for the making of phonorecords used by the Licensee solely to facilitate transmissions during the Term for which it pays royalties as and when provided in this subpart shall be included within, and constitute 5% of, such royalty payments.

Dated: January 28, 2010.

James Scott Sledge,

Chief U.S. Copyright Royalty Judge.