Determination of Rates and Terms for Digital Performance of Sound Recordings and Making of Ephemeral Copies To Facilitate Those Performances (Web V)

Published date30 October 2019
Record Number2019-23485
SectionProposed rules
CourtCopyright Royalty Board
Federal Register, Volume 84 Issue 210 (Wednesday, October 30, 2019)
[Federal Register Volume 84, Number 210 (Wednesday, October 30, 2019)]
                [Proposed Rules]
                [Pages 58095-58098]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2019-23485]
                =======================================================================
                -----------------------------------------------------------------------
                LIBRARY OF CONGRESS
                Copyright Royalty Board
                37 CFR Part 380
                [Docket No. 19-CRB-0005-WR (2021-2025)]
                Determination of Rates and Terms for Digital Performance of Sound
                Recordings and Making of Ephemeral Copies To Facilitate Those
                Performances (Web V)
                AGENCY: Copyright Royalty Board (CRB), Library of Congress.
                ACTION: Proposed rule related to noncommercial educational webcasters.
                -----------------------------------------------------------------------
                SUMMARY: The Copyright Royalty Judges are publishing for comment
                proposed regulations governing the rates and terms for the digital
                performance of sound recordings by noncommercial educational webcasters
                and for the making of ephemeral recordings necessary for the
                facilitation of such transmissions for the period commencing January 1,
                2021, and ending on December 31, 2025.
                DATES: Comments and objections, if any, are due no later than November
                20, 2019.
                ADDRESSES: You may submit comments and proposals, identified by docket
                number 19-CRB-0005-WR (2021-2025), by any of the following methods:
                 CRB's electronic filing application: Submit comments and proposals
                online in eCRB at https://app.crb.gov/.
                 U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC
                20024-0977; or
                 Overnight service (only USPS Express Mail is acceptable): Copyright
                Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
                 Commercial courier: Address package to: Copyright Royalty Board,
                Library of Congress, James Madison Memorial Building, LM-403, 101
                Independence Avenue SE, Washington, DC 20559-6000. Deliver to:
                Congressional Courier Acceptance Site, 2nd Street NE and D Street NE,
                Washington, DC; or
                 Hand delivery: Library of Congress, James Madison Memorial
                Building, LM-401, 101 Independence Avenue SE, Washington, DC 20559-
                6000.
                 Instructions: Parties unable to use eCRB must submit an original,
                two paper copies, and an electronic version on a CD. All submissions
                must include the Copyright Royalty Board name and docket number (19-
                CRB-0005-WR (2021-2025)), as well as the Federal Register citation for
                this proposed rule. All submissions received will be posted without
                change on eCRB at https://app.crb.gov/ including any personal
                information provided.
                 Docket: For access to the docket to read submitted background
                documents or comments, go to eCRB, the Copyright Royalty Board's
                electronic filing and case management system, at https://app.crb.gov/
                and search for docket number 19-CRB-0005-WR (2021-2025).
                FOR FURTHER INFORMATION CONTACT: Anita Blaine, CRB Program Specialist,
                by telephone at (202) 707-7658 or email at [email protected].
                SUPPLEMENTARY INFORMATION: On September 23, 2019, the Copyright Royalty
                Judges (Judges) received a joint motion from SoundExchange, Inc.,
                (``SoundExchange'') and College Broadcasters, Inc., (``CBI'') to adopt
                a partial settlement of their interests regarding Web V rates and terms
                for 2021-2025.\1\ Joint Motion to Adopt Partial Settlement, Docket No.
                19-CRB-0005-WR (2021-2025). Their interests concern the rule setting
                copyright royalty minimum fees and terms that the Judges will establish
                for compulsory copyright licenses for certain internet transmissions of
                sound recordings by college radio stations and other noncommercial
                educational webcasters for the period from January 1, 2021,
                [[Page 58096]]
                through December 31, 2025. SoundExchange represents the interests of
                sound recording copyright owners and performers. CBI represents the
                interests of users of the copyrighted material which users include
                college, university, and high school radio and television stations and
                other electronic media organizations. The Judges hereby publish the
                proposal and request comments from the public.
                ---------------------------------------------------------------------------
                 \1\ Web V is short for Webcasting V. This proceeding is the
                fifth since the compulsory license for webcasting was established.
                ---------------------------------------------------------------------------
                 Section 114 of the Copyright Act, title 17 of the United States
                Code, provides a statutory license that allows for the public
                performance of sound recordings by means of a digital audio
                transmission by, among others, eligible nonsubscription transmission
                services and new subscription services. 17 U.S.C. 114(f). For purposes
                of the section 114 license, an ``eligible nonsubscription
                transmission'' is a noninteractive digital audio transmission that does
                not require a subscription for receiving the transmission. The
                transmission must also be made as part of a service that provides audio
                programming consisting in whole or in part of performances of sound
                recordings the purpose of which is to provide audio or other
                entertainment programming, but not to sell, advertise, or promote
                particular goods or services. See 17 U.S.C. 114(j)(6). A ``new
                subscription service'' is a ``service that performs sound recordings by
                means of noninteractive subscription digital audio transmissions and
                that is not a preexisting subscription or preexisting satellite digital
                audio radio service.'' 17 U.S.C. 114(j)(8).
                 Services using the section 114 license may need to make one or more
                temporary or ``ephemeral'' copies of a sound recording to facilitate
                the transmission of that recording. The section 112 statutory license
                allows for the making of these ephemeral reproductions. 17 U.S.C.
                112(e).
                 Chapter 8 of the Copyright Act requires the Judges to conduct
                proceedings every five years to determine the rates and terms for the
                sections 114 and 112 statutory licenses. 17 U.S.C. 801(b)(1),
                804(b)(3)(A). The current proceeding commenced in January 2019 for
                rates and terms that will become effective on January 1, 2021, and end
                on December 31, 2025. Pursuant to section 804(b)(3)(A), the Judges
                published in the Federal Register a notice commencing the proceeding
                and requesting that interested parties submit their petitions to
                participate. 84 FR 359 (Jan. 24, 2019). CBI and SoundExchange each
                filed Petitions to Participate, as did others.
                 On September 23, 2019, SoundExchange and CBI submitted to the
                Judges a joint motion to adopt a partial settlement of their interests
                in the proceeding. SoundExchange and CBI requested that the Judges
                ``endeavor to determine before the deadline for the filing of written
                rebuttal statements in this Proceeding (January 10, 2020) whether or
                not they will adopt the Settlement.'' Joint Motion at 1.
                Statutory Timing of Adoption of Rates and Terms
                 Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to
                adopt royalty rates and terms negotiated by ``some or all of the
                participants in a proceeding at any time during the proceeding''
                provided they are submitted to the Judges for approval. The Judges must
                provide ``an opportunity to comment on the agreement'' to participants
                and non-participants in the rate proceeding who ``would be bound by the
                terms, rates, or other determination set by any agreement. . . .'' 17
                U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may also
                ``object to [the agreement's] adoption as a basis for statutory terms
                and rates.'' Id.
                 The Judges ``may decline to adopt the agreement as a basis for
                statutory terms and rates for participants that are not parties to the
                agreement,'' only ``if any participant [in the proceeding] objects to
                the agreement and the [Judges] conclude, based on the record before
                them if one exists, that the agreement does not provide a reasonable
                basis for setting statutory terms or rates.'' 17 U.S.C.
                801(b)(7)(A)(ii).
                 Any rates and terms adopted pursuant to this provision would be
                binding on all copyright owners of sound recordings, college radio
                stations, and other noncommercial educational webcasters performing the
                sound recordings for the license period 2021-2025.
                Proposed Adjustments to Rates and Terms
                 According to SoundExchange and CBI, the agreement generally
                continues in effect the current provisions of 37 CFR part 380, subpart
                C, which were themselves adopted pursuant to 17 U.S.C. 801(b)(7)(A) as
                part of the Webcasting IV proceeding, with two primary changes: (1) The
                minimum fee applicable to noncommercial educational webcasters will
                increase by $50 per year throughout the rate period; and (2) consistent
                with the preferences previously expressed by the Judges, the generally
                applicable provisions in subpart A will apply to noncommercial
                educational webcasters to the extent consistent with subpart C, and the
                corresponding provisions have been removed from subpart C. Joint Motion
                at 2.
                 The public may comment and object to any or all of the proposed
                regulations contained in this document. Such comments and objections
                must be submitted no later than November 20, 2019.
                List of Subjects in 37 CFR Part 380
                 Copyright, Sound recordings, Webcasters.
                 For the reasons set forth in the preamble, the Copyright Royalty
                Judges propose to amend 37 CFR part 380 as follows:
                PART 380--RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE
                NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE
                MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS
                0
                1. The authority citation for part 380 continues to read as follows:
                 Authority: 17 U.S.C. 112(e), 114(f), 804(b)(3).
                0
                 2. Revise subpart C to read as follows:
                Subpart C--Noncommercial Educational Webcasters
                Sec.
                380.20 Definitions.
                380.21 Royalty fees for the public performance of sound recordings
                and for ephemeral recordings.
                380.22 Terms for making payment of royalty fees and statements of
                account.
                Sec. 380.20 Definitions.
                 For purposes of this subpart, the following definitions apply:
                 Educational Transmission means an eligible nonsubscription
                transmission (as defined in 17 U.S.C. 114(j)(6)) made by a
                Noncommercial Educational Webcaster over the internet.
                 Noncommercial Educational Webcaster means a noncommercial webcaster
                (as defined in 17 U.S.C. 114(f)(4)(E)(i)) that:
                 (1) Has obtained a compulsory license under 17 U.S.C. 112(e) and
                114 and the implementing regulations therefor to make Educational
                Transmissions and related Ephemeral Recordings;
                 (2) Complies with all applicable provisions of Sections 112(e) and
                114 and applicable regulations in this part;
                 (3) Is directly operated by, or is affiliated with and officially
                sanctioned by, and the digital audio transmission operations of which
                are staffed substantially by students enrolled at, a
                [[Page 58097]]
                domestically accredited primary or secondary school, college,
                university or other post-secondary degree-granting educational
                institution;
                 (4) Is not a ``public broadcasting entity'' (as defined in 17
                U.S.C. 118(f)) qualified to receive funding from the Corporation for
                Public Broadcasting pursuant to its criteria; and
                 (5) Takes affirmative steps not to make total transmissions in
                excess of 159,140 Aggregate Tuning Hours (ATH) on any individual
                channel or station in any month, if in any previous calendar year it
                has made total transmissions in excess of 159,140 ATH on any individual
                channel or station in any month.
                Sec. 380.21 Royalty fees for the public performance of sound
                recordings and for ephemeral recordings.
                 (a) Minimum fee for eligible Noncommercial Educational Webcasters.
                Each Noncommercial Educational Webcaster that did not exceed 159,140
                total ATH for any individual channel or station for more than one
                calendar month in the immediately preceding calendar year and does not
                expect to make total transmissions in excess of 159,140 ATH on any
                individual channel or station in any calendar month during the
                applicable calendar year shall pay an annual, nonrefundable minimum fee
                in the amount set forth in paragraphs (a)(1) through (5) of this
                section (the ``Minimum Fee'') for each of its individual channels,
                including each of its individual side channels, and each of its
                individual stations, through which (in each case) it makes Educational
                Transmissions, for each calendar year it makes Educational
                Transmissions subject to this subpart. For clarity, each individual
                stream (e.g., HD radio side channels, different stations owned by a
                single licensee) will be treated separately and be subject to a
                separate Minimum Fee. The Minimum Fee shall constitute the annual per
                channel or per station royalty for all Educational Transmissions
                totaling not more than 159,140 ATH in a month on any individual channel
                or station, and for Ephemeral Recordings to enable such Educational
                Transmissions. In addition, a Noncommercial Educational Webcaster
                electing the reporting waiver described in Sec. 380.22(d)(1) shall pay
                a $100 annual fee (the ``Proxy Fee'') to the Collective (for purposes
                of this subpart, the term ``Collective'' refers to SoundExchange,
                Inc.). The Minimum Fee for each year of the royalty period is:
                 (1) 2021: $550;
                 (2) 2022: $600;
                 (3) 2023: $650;
                 (4) 2024: $700; and
                 (5) 2025: $750.
                 (b) Consequences of unexpectedly exceeding ATH cap. In the case of
                a Noncommercial Educational Webcaster eligible to pay royalties under
                paragraph (a) of this section that unexpectedly makes total
                transmissions in excess of 159,140 ATH on any individual channel or
                station in any calendar month during the applicable calendar year:
                 (1) The Noncommercial Educational Webcaster shall, for such month
                and the remainder of the calendar year in which such month occurs, pay
                royalties in accordance, and otherwise comply, with the provisions of
                subpart B of this part applicable to Noncommercial Webcasters;
                 (2) The Minimum Fee paid by the Noncommercial Educational Webcaster
                for such calendar year will be credited to the amounts payable under
                the provisions of subpart B of this part applicable to Noncommercial
                Webcasters; and
                 (3) The Noncommercial Educational Webcaster shall, within 45 days
                after the end of each month, notify the Collective if it has made total
                transmissions in excess of 159,140 ATH on a channel or station during
                that month; pay the Collective any amounts due under the provisions of
                subpart B of this part applicable to Noncommercial Webcasters; and
                provide the Collective a statement of account pursuant to subpart A of
                this part.
                 (c) Royalties for other Noncommercial Educational Webcasters. A
                Noncommercial Educational Webcaster that is not eligible to pay
                royalties under paragraph (a) of this section shall pay royalties in
                accordance, and otherwise comply, with the provisions of subpart B of
                this part applicable to Noncommercial Webcasters.
                 (d) Estimation of performances. In the case of a Noncommercial
                Educational Webcaster that is required to pay royalties under paragraph
                (b) or (c) of this section on a per-Performance basis, that is unable
                to calculate actual total performances, and that is not required to
                report actual total performances under Sec. 380.22(d)(3), the
                Noncommercial Educational Webcaster may pay its applicable royalties on
                an ATH basis, provided that the Noncommercial Educational Webcaster
                shall calculate such royalties at the applicable per-Performance rates
                based on the assumption that the number of sound recordings performed
                is 12 per hour. The Collective may distribute royalties paid on the
                basis of ATH hereunder in accordance with its generally applicable
                methodology for distributing royalties paid on such basis. In addition,
                and for the avoidance of doubt, a Noncommercial Educational Webcaster
                offering more than one channel or station shall pay per-Performance
                royalties on a per-channel or -station basis.
                 (e) Allocation between ephemeral recordings and performance royalty
                fees. The Collective must credit 5% of all royalty payments as payment
                for Ephemeral Recordings and credit the remaining 95% to section 114
                royalties. All Ephemeral Recordings that a Licensee makes which are
                necessary and commercially reasonable for making Educational
                Transmissions are included in the 5%.
                Sec. 380.22 Terms for making payment of royalty fees and statements
                of account.
                 (a) Payment to the Collective. A Noncommercial Educational
                Webcaster shall make the royalty payments due under Sec. 380.21 to the
                Collective.
                 (b) Minimum fee. Noncommercial Educational Webcasters shall submit
                the Minimum Fee, and Proxy Fee if applicable (see paragraph (d) of this
                section), accompanied by a statement of account, by January 31st of
                each calendar year, except that payment of the Minimum Fee, and Proxy
                Fee if applicable, by a Noncommercial Educational Webcaster that was
                not making Educational Transmissions or Ephemeral Recordings pursuant
                to the licenses in 17 U.S.C. 114 and/or 17 U.S.C. 112(e) as of January
                31st of each calendar year but begins doing so thereafter shall be due
                by the 45th day after the end of the month in which the Noncommercial
                Educational Webcaster commences doing so. At the same time the
                Noncommercial Educational Webcaster must identify all its stations
                making Educational Transmissions and identify which of the reporting
                options set forth in paragraph (d) of this section it elects for the
                relevant year (provided that it must be eligible for the option it
                elects).
                 (c) Statements of account. Any payment due under paragraph (a) of
                this section shall be accompanied by a corresponding statement of
                account on a form provided by the Collective. A statement of account
                shall contain the following information:
                 (1) The name of the Noncommercial Educational Webcaster, exactly as
                it appears on the notice of use, and if the statement of account covers
                a single station only, the call letters or name of the station;
                 (2) The name, address, business title, telephone number, facsimile
                number (if any), electronic mail address (if any) and other contact
                information of the
                [[Page 58098]]
                person to be contacted for information or questions concerning the
                content of the statement of account;
                 (3) The signature of a duly authorized representative of the
                applicable educational institution;
                 (4) The printed or typewritten name of the person signing the
                statement of account;
                 (5) The date of signature;
                 (6) The title or official position held by the person signing the
                statement of account;
                 (7) A certification of the capacity of the person signing; and
                 (8) A statement to the following effect:
                 I, the undersigned duly authorized representative of the applicable
                educational institution, have examined this statement of account;
                hereby state that it is true, accurate, and complete to my knowledge
                after reasonable due diligence; and further certify that the licensee
                entity named herein qualifies as a Noncommercial Educational Webcaster
                for the relevant year, and did not exceed 159,140 total ATH in any
                month of the prior year for which the Noncommercial Educational
                Webcaster did not submit a statement of account and pay any required
                additional royalties.
                 (d) Reporting by Noncommercial Educational Webcasters in general--
                (1) Reporting waiver. In light of the unique business and operational
                circumstances with respect to Noncommercial Educational Webcasters, and
                for the purposes of this subpart only, a Noncommercial Educational
                Webcaster that did not exceed 80,000 total ATH for any individual
                channel or station for more than one calendar month in the immediately
                preceding calendar year and that does not expect to exceed 80,000 total
                ATH for any individual channel or station for any calendar month during
                the applicable calendar year may elect to pay to the Collective a
                nonrefundable, annual Proxy Fee of $100 in lieu of providing reports of
                use for the calendar year pursuant to the regulations at Sec. 370.4 of
                this chapter. In addition, a Noncommercial Educational Webcaster that
                unexpectedly exceeded 80,000 total ATH on one or more channels or
                stations for more than one month during the immediately preceding
                calendar year may elect to pay the Proxy Fee and receive the reporting
                waiver described in this paragraph (d)(1) during a calendar year, if it
                implements measures reasonably calculated to ensure that it will not
                make Educational Transmissions exceeding 80,000 total ATH during any
                month of that calendar year. The Proxy Fee is intended to defray the
                Collective's costs associated with the reporting waiver in this
                paragraph (d)(1), including development of proxy usage data. The Proxy
                Fee shall be paid by the date specified in paragraph (b) of this
                section for paying the Minimum Fee for the applicable calendar year and
                shall be accompanied by a certification on a form provided by the
                Collective, signed by a duly authorized representative of the
                applicable educational institution, stating that the Noncommercial
                Educational Webcaster is eligible for the Proxy Fee option because of
                its past and expected future usage and, if applicable, has implemented
                measures to ensure that it will not make excess Educational
                Transmissions in the future.
                 (2) Sample-basis reports. A Noncommercial Educational Webcaster
                that did not exceed 159,140 total ATH for any individual channel or
                station for more than one calendar month in the immediately preceding
                calendar year and that does not expect to exceed 159,140 total ATH for
                any individual channel or station for any calendar month during the
                applicable calendar year may elect to provide reports of use on a
                sample basis (two weeks per calendar quarter) in accordance with the
                regulations at Sec. 370.4 of this chapter, except that,
                notwithstanding Sec. 370.4(d)(2)(vi), such an electing Noncommercial
                Educational Webcaster shall not be required to include ATH or actual
                total performances and may in lieu thereof provide channel or station
                name and play frequency. Notwithstanding the preceding sentence, a
                Noncommercial Educational Webcaster that is able to report ATH or
                actual total performances is encouraged to do so. These reports of use
                shall be submitted to the Collective no later than January 31st of the
                year immediately following the year to which they pertain.
                 (3) Census-basis reports. (i) If any of the conditions in
                paragraphs (d)(3)(i)(A) through (C) of this section is satisfied, a
                Noncommercial Educational Webcaster must report pursuant to paragraph
                (d)(3) of this section:
                 (A) The Noncommercial Educational Webcaster exceeded 159,140 total
                ATH for any individual channel or station for more than one calendar
                month in the immediately preceding calendar year;
                 (B) The Noncommercial Educational Webcaster expects to exceed
                159,140 total ATH for any individual channel or station for any
                calendar month in the applicable calendar year; or
                 (C) The Noncommercial Educational Webcaster otherwise does not
                elect to be subject to paragraph (d)(1) or (2) of this section.
                 (ii) A Noncommercial Educational Webcaster required to report
                pursuant to paragraph (d)(3)(i) of this section shall provide reports
                of use to the Collective quarterly on a census reporting basis in
                accordance with Sec. 370.4 of this chapter, except that,
                notwithstanding Sec. 370.4(d)(2), such a Noncommercial Educational
                Webcaster shall not be required to include ATH or actual total
                performances, and may in lieu thereof provide channel or station name
                and play frequency, during the first calendar year it reports in
                accordance with paragraph (d)(3) of this section. For the avoidance of
                doubt, after a Noncommercial Educational Webcaster has been required to
                report in accordance with paragraph (d)(3)(i) of this section for a
                full calendar year, it must thereafter include ATH or actual total
                performances in its reports of use. All reports of use under paragraph
                (d)(3)(i) of this section shall be submitted to the Collective no later
                than the 45th day after the end of each calendar quarter.
                 (e) Server logs. Noncommercial Educational Webcasters shall retain
                for a period of no less than three full calendar years server logs
                sufficient to substantiate all information relevant to eligibility,
                rate calculation and reporting under this subpart. To the extent that a
                third-party Web hosting or service provider maintains equipment or
                software for a Noncommercial Educational Webcaster and/or such third
                party creates, maintains, or can reasonably create such server logs,
                the Noncommercial Educational Webcaster shall direct that such server
                logs be created and maintained by said third party for a period of no
                less than three full calendar years and/or that such server logs be
                provided to, and maintained by, the Noncommercial Educational
                Webcaster.
                 (f) Terms in general. Subject to the provisions of this subpart,
                terms governing late fees, distribution of royalties by the Collective,
                unclaimed funds, record retention requirements, treatment of Licensees'
                confidential information, audit of royalty payments and distributions,
                and any definitions for applicable terms not defined in this subpart
                shall be those set forth in subpart A of this part.
                 Dated: October 23, 2019.
                Jesse M. Feder,
                Chief Copyright Royalty Judge.
                [FR Doc. 2019-23485 Filed 10-29-19; 8:45 am]
                 BILLING CODE 1410-72-P
                

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT