E9-29904. Determination of Rates and Terms for Preexisting Subscription Services and Satellite Digital Audio Radio Services

AGENCY:

Copyright Royalty Board, Library of Congress.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

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

DATES:

Comments and objections, if any, are due no later than January 15, 2010.

ADDRESSES:

Comments and objections may be sent electronically to [e-mail]. In the alternative, send an original, five copies and an electronic copy on a CD either by mail or hand delivery. Please do not use multiple means of transmission. Comments and objections may not be delivered by an overnight delivery service other than U.S. Postal Service Express Mail. If by mail (including overnight delivery), comments and objections must be addressed to: Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977. If hand delivered by a private party, comments and objections must be brought to the Copyright Office Public Information Office, Library of Congress, James Madison Memorial Building, Room LM-401, 101 Independence Avenue, SE., Washington, DC 20559-0600, between 8:30 a.m. and 5 p.m. If delivered by a commercial courier, comments and objections must be delivered between 8:30 a.m. and 4 p.m. to the Congressional Courier Acceptance Site located at 2nd and D Street, NE., Washington, DC, and the envelope must be addressed as follows: Copyright Royalty Board, Library of Congress, James Madison Memorial Building, Room LM-403, 101 Independence Avenue, SE., Washington, DC 20559-0600.

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:

Background

On January 24, 2008, the Copyright Royalty Judges published in the Federal Register their determination of royalty rates and terms under the statutory licenses under Sections 112(e) and 114 of the Copyright Act for the period 2007 through 2012 for satellite digital audio radio services (“SDARS”). 73 FR 4080. In SoundExchange, Inc. v. Librarian of Congress, 571 F.3d 1220, 1226 (DC Cir. 2009), the U.S. Court of Appeals for the DC Circuit affirmed the Judges' determination in all but one respect, remanding to the Copyright Royalty 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 Copyright Royalty Judges established a period commencing on November 2, 2009, and concluding on December 2, 2009, for Sound Exchange, 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. With the Parties having reached such a settlement, the Copyright Royalty Judges now publish for comment the proposed change in the rule that is necessary to implement that settlement pursuant to order of remand from the U.S. Court of Appeals for the DC Circuit.

In the Settlement, the Parties have agreed to proposed changes in the regulations at 37 CFR 382.12 that do not disturb the combined Section 112(e)/114 royalty previously set by the Copyright Royalty 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

Proposed Regulations

For the reasons set forth in the preamble, the Copyright Royalty Judges propose to 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: December 11, 2009.

James Scott Sledge,

Chief U.S. Copyright Royalty Judge.