[Congressional Record Volume 150, Number 132 (Wednesday, November 17, 2004)]
[House]
[Pages H9848-H9857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COPYRIGHT ROYALTY AND DISTRIBUTION REFORM ACT OF 2004
Mr. SENSENBRENNER. Mr. Speaker, I move to suspend the rules and
concur in the Senate amendment to the bill (H.R. 1417) to amend title
17, United States Code, to replace copyright arbitration royalty panels
with Copyright Royalty Judges, and for other purposes.
The Clerk read as follows:
Senate amendment:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Copyright Royalty and
Distribution Reform Act of 2004''.
SEC. 2. REFERENCE.
Except as otherwise expressly provided, whenever in this
Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of title 17, United States Code.
SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.
(a) In General.--Chapter 8 is amended to read as follows:
``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES
``Sec.
``801. Copyright Royalty Judges; appointment and functions.
``802. Copyright Royalty Judgeships; staff.
``803. Proceedings of Copyright Royalty Judges.
``804. Institution of proceedings.
``805. General rule for voluntarily negotiated agreements.
``Sec. 801. Copyright Royalty Judges; appointment and
functions
``(a) Appointment.--The Librarian of Congress shall appoint
3 full-time Copyright Royalty Judges, and shall appoint 1 of
the 3 as the Chief Copyright Royalty Judge. The Librarian
shall make appointments to such positions after consultation
with the Register of Copyrights.
``(b) Functions.--Subject to the provisions of this
chapter, the functions of the Copyright Royalty Judges shall
be as follows:
``(1) To make determinations and adjustments of reasonable
terms and rates of royalty payments as provided in sections
112(e), 114, 115, 116, 118, 119 and 1004. The rates
applicable under sections 114(f)(1)(B), 115, and 116 shall be
calculated to achieve the following objectives:
``(A) To maximize the availability of creative works to the
public.
``(B) To afford the copyright owner a fair return for his
or her creative work and the copyright user a fair income
under existing economic conditions.
``(C) To reflect the relative roles of the copyright owner
and the copyright user in the product made available to the
public with respect to relative creative contribution,
technological contribution, capital investment, cost, risk,
and contribution to the opening of new markets for creative
expression and media for their communication.
``(D) To minimize any disruptive impact on the structure of
the industries involved and on generally prevailing industry
practices.
``(2) To make determinations concerning the adjustment of
the copyright royalty rates under section 111 solely in
accordance with the following provisions:
``(A) The rates established by section 111(d)(1)(B) may be
adjusted to reflect--
``(i) national monetary inflation or deflation; or
``(ii) changes in the average rates charged cable
subscribers for the basic service of providing secondary
transmissions to maintain the real constant dollar level of
the royalty fee per subscriber which existed as of the date
of October 19, 1976,
except that--
``(I) if the average rates charged cable system subscribers
for the basic service of providing secondary transmissions
are changed so that the average rates exceed national
monetary inflation, no change in the rates established by
section 111(d)(1)(B) shall be permitted; and
``(II) no increase in the royalty fee shall be permitted
based on any reduction in the average number of distant
signal equivalents per subscriber.
The Copyright Royalty Judges may consider all factors
relating to the maintenance of such level of payments,
including, as an extenuating factor, whether the industry has
been restrained by subscriber rate regulating authorities
from increasing the rates for the basic service of providing
secondary transmissions.
``(B) In the event that the rules and regulations of the
Federal Communications Commission are amended at any time
after April 15, 1976, to permit the carriage by cable systems
of additional television broadcast signals beyond the local
service area of the primary transmitters of such signals, the
royalty rates established by section 111(d)(1)(B) may be
adjusted to ensure that the rates for the additional distant
signal equivalents resulting from such carriage are
reasonable in the light of the changes effected by the
amendment to such rules and regulations. In determining the
reasonableness of rates proposed following an amendment of
Federal Communications Commission rules and regulations, the
Copyright Royalty Judges shall consider, among other factors,
the economic impact on copyright owners and users; except
that no adjustment in royalty rates shall be made under this
subparagraph with respect to any distant signal equivalent or
fraction thereof represented by--
``(i) carriage of any signal permitted under the rules and
regulations of the Federal Communications Commission in
effect on April 15, 1976, or the carriage of a signal of the
same type (that is, independent, network, or noncommercial
educational) substituted for such permitted signal; or
[[Page H9849]]
``(ii) a television broadcast signal first carried after
April 15, 1976, pursuant to an individual waiver of the rules
and regulations of the Federal Communications Commission, as
such rules and regulations were in effect on April 15, 1976.
``(C) In the event of any change in the rules and
regulations of the Federal Communications Commission with
respect to syndicated and sports program exclusivity after
April 15, 1976, the rates established by section 111(d)(1)(B)
may be adjusted to assure that such rates are reasonable in
light of the changes to such rules and regulations, but any
such adjustment shall apply only to the affected television
broadcast signals carried on those systems affected by the
change.
``(D) The gross receipts limitations established by section
111(d)(1) (C) and (D) shall be adjusted to reflect national
monetary inflation or deflation or changes in the average
rates charged cable system subscribers for the basic service
of providing secondary transmissions to maintain the real
constant dollar value of the exemption provided by such
section, and the royalty rate specified therein shall not be
subject to adjustment.
``(3)(A) To authorize the distribution, under sections 111,
119, and 1007, of those royalty fees collected under sections
111, 119, and 1005, as the case may be, to the extent that
the Copyright Royalty Judges have found that the distribution
of such fees is not subject to controversy.
``(B) In cases where the Copyright Royalty Judges determine
that controversy exists, the Copyright Royalty Judges shall
determine the distribution of such fees, including partial
distributions, in accordance with section 111, 119, or 1007,
as the case may be.
``(C) The Copyright Royalty Judges may make a partial
distribution of such fees during the pendency of the
proceeding under subparagraph (B) if all participants under
section 803(b)(2) in the proceeding that are entitled to
receive those fees that are to be partially distributed--
``(i) agree to such partial distribution;
``(ii) sign an agreement obligating them to return any
excess amounts to the extent necessary to comply with the
final determination on the distribution of the fees made
under subparagraph (B);
``(iii) file the agreement with the Copyright Royalty
Judges; and
``(iv) agree that such funds are available for
distribution.
``(D) The Copyright Royalty Judges and any other officer or
employee acting in good faith in distributing funds under
subparagraph (C) shall not be held liable for the payment of
any excess fees under subparagraph (C). The Copyright Royalty
Judges shall, at the time the final determination is made,
calculate any such excess amounts.
``(4) To accept or reject royalty claims filed under
sections 111, 119, and 1007, on the basis of timeliness or
the failure to establish the basis for a claim.
``(5) To accept or reject rate adjustment petitions as
provided in section 804 and petitions to participate as
provided in section 803(b) (1) and (2).
``(6) To determine the status of a digital audio recording
device or a digital audio interface device under sections
1002 and 1003, as provided in section 1010.
``(7)(A) To adopt as a basis for statutory terms and rates
or as a basis for the distribution of statutory royalty
payments, an agreement concerning such matters reached among
some or all of the participants in a proceeding at any time
during the proceeding, except that--
``(i) the Copyright Royalty Judges shall provide to those
that would be bound by the terms, rates, or other
determination set by any agreement in a proceeding to
determine royalty rates an opportunity to comment on the
agreement and shall provide to the other participants in the
proceeding under section 803(b)(2) that would be bound by the
terms, rates, or other determination set by the agreement an
opportunity to comment on the agreement and object to its
adoption as a basis for statutory terms and rates; and
``(ii) the Copyright Royalty Judges may decline to adopt
the agreement as a basis for statutory terms and rates for
participants that are not parties to the agreement, if any
other participant described in subparagraph (A) objects to
the agreement and the Copyright Royalty 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.
``(B) License agreements voluntarily negotiated pursuant to
section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or
118(b) (2) or (3) that do not result in statutory terms and
rates shall not be subject to clauses (i) and (ii) of
subparagraph (A).
``(C) Interested parties may negotiate and agree to, and
the Copyright Royalty Judges may adopt, an agreement that
specifies as terms notice and recordkeeping requirements that
apply in lieu of those that would otherwise apply under
regulations.
``(8) To perform other duties, as assigned by the Register
of Copyrights within the Library of Congress, except as
provided in section 802(g) at times when Copyright Royalty
Judges are not engaged in performing the other duties set
forth in this section.
``(c) Rulings.--As provided in section 802(f)(1), the
Copyright Royalty Judges may make any necessary procedural or
evidentiary rulings in any proceeding under this chapter and
may, before commencing a proceeding under this chapter, make
any such rulings that would apply to the proceedings
conducted by the Copyright Royalty Judges.
``(d) Administrative Support.--The Librarian of Congress
shall provide the Copyright Royalty Judges with the necessary
administrative services related to proceedings under this
chapter.
``(e) Location in Library of Congress.--The offices of the
Copyright Royalty Judges and staff shall be in the Library of
Congress.
``Sec. 802. Copyright Royalty Judgeships; staff
``(a) Qualifications of Copyright Royalty Judges.--
``(1) In general.--Each Copyright Royalty Judge shall be an
attorney who has at least 7 years of legal experience. The
Chief Copyright Royalty Judge shall have at least 5 years of
experience in adjudications, arbitrations, or court trials.
Of the other two Copyright Royalty Judges, one shall have
significant knowledge of copyright law, and the other shall
have significant knowledge of economics. An individual may
serve as a Copyright Royalty Judge only if the individual is
free of any financial conflict of interest under subsection
(h).
``(2) Definition.--In this subsection, the term
`adjudication' has the meaning given that term in section 551
of title 5, but does not include mediation.
``(b) Staff.--The Chief Copyright Royalty Judge shall hire
3 full-time staff members to assist the Copyright Royalty
Judges in performing their functions.
``(c) Terms.--The individual first appointed the Chief
Copyright Royalty Judge shall be appointed to a term of 6
years, and of the remaining individuals first appointed
Copyright Royalty Judges, 1 shall be appointed to a term of 4
years, and the other shall be appointed to a term of 2 years.
Thereafter, the terms of succeeding Copyright Royalty Judges
shall each be 6 years. An individual serving as a Copyright
Royalty Judge may be reappointed to subsequent terms. The
term of a Copyright Royalty Judge shall begin when the term
of the predecessor of that Copyright Royalty Judge ends. When
the term of office of a Copyright Royalty Judge ends, the
individual serving that term may continue to serve until a
successor is selected.
``(d) Vacancies or Incapacity.--
``(1) Vacancies.--If a vacancy should occur in the position
of Copyright Royalty Judge, the Librarian of Congress shall
act expeditiously to fill the vacancy, and may appoint an
interim Copyright Royalty Judge to serve until another
Copyright Royalty Judge is appointed under this section. An
individual appointed to fill the vacancy occurring before the
expiration of the term for which the predecessor of that
individual was appointed shall be appointed for the remainder
of that term.
``(2) Incapacity.--In the case in which a Copyright Royalty
Judge is temporarily unable to perform his or her duties, the
Librarian of Congress may appoint an interim Copyright
Royalty Judge to perform such duties during the period of
such incapacity.
``(e) Compensation.--
``(1) Judges.--The Chief Copyright Royalty Judge shall
receive compensation at the rate of basic pay payable for
level AL-1 for administrative law judges pursuant to section
5372(b) of title 5, and each of the other two Copyright
Royalty Judges shall receive compensation at the rate of
basic pay payable for level AL-2 for administrative law
judges pursuant to such section. The compensation of the
Copyright Royalty Judges shall not be subject to any
regulations adopted by the Office of Personnel Management
pursuant to its authority under section 5376(b)(1) of title
5.
``(2) Staff members.--Of the staff members appointed under
subsection (b)--
``(A) the rate of pay of 1 staff member shall be not more
than the basic rate of pay payable for level 10 of GS-15 of
the General Schedule;
``(B) the rate of pay of 1 staff member shall be not less
than the basic rate of pay payable for GS-13 of the General
Schedule and not more than the basic rate of pay payable for
level 10 of GS-14 of such Schedule; and
``(C) the rate of pay for the third staff member shall be
not less than the basic rate of pay payable for GS-8 of the
General Schedule and not more than the basic rate of pay
payable for level 10 of GS-11 of such Schedule.
``(3) Locality pay.--All rates of pay referred to under
this subsection shall include locality pay.
``(f) Independence of Copyright Royalty Judge.--
``(1) In making determinations.--
``(A) In general.--(i) Subject to clause (ii) of this
subparagraph and subparagraph (B), the Copyright Royalty
Judges shall have full independence in making determinations
concerning adjustments and determinations of copyright
royalty rates and terms, the distribution of copyright
royalties, the acceptance or rejection of royalty claims,
rate adjustment petitions, and petitions to participate, and
in issuing other rulings under this title, except that the
Copyright Royalty Judges may consult with the Register of
Copyrights on any matter other than a question of fact.
``(ii) A Copyright Royalty Judge or Judges, or, by motion
to the Copyright Royalty Judge or Judges, any participant in
a proceeding may request an interpretation by the Register of
Copyrights concerning any material question of substantive
law (not including questions of procedure before the
Copyright Royalty Judges, the ultimate adjustments and
determinations of copyright royalty rates and terms, the
ultimate distribution of copyright royalties, or the
acceptance or rejection of royalty claims, rate adjustment
petitions, or petitions to participate) concerning an
interpretation or construction of those provisions of this
title that are the subject of the proceeding. Any such
request for a written interpretation by the Register of
Copyrights shall be on the record. Reasonable provision shall
be made for comment by the participants in the proceeding on
the material question of substantive law in such a way as to
minimize
[[Page H9850]]
duplication and delay. Except as provided in subparagraph
(B), the Register of Copyrights shall deliver to the
Copyright Royalty Judges a response within 14 days of receipt
by the Register of Copyrights of all of the briefs or
comments of the participants. Such decision shall be in
writing and shall be included by the Copyright Royalty Judges
in the record that accompanies their final determination. If
such a decision is timely delivered to the Copyright Royalty
Judges, the Copyright Royalty Judges shall apply the legal
interpretation embodied in the response of the Register of
Copyrights in resolving material questions of substantive
law.
``(B) Novel questions.--(i) In any case in which a novel
material question of substantive law concerning an
interpretation of those provisions of this title that are the
subject of the proceeding is presented, the Copyright Royalty
Judges shall request a decision of the Register of
Copyrights, in writing, to resolve such novel question.
Reasonable provision shall be made for comment on such
request by the participants in the proceeding, in such a way
as to minimize duplication and delay. The Register shall
transmit his or her decision to the Copyright Royalty Judges
within 30 days of receipt by the Register of Copyrights of
all of the briefs or comments of the participants. Such
decision shall be in writing and included by the Copyright
Royalty Judges in the record that accompanies their final
determination. If such a decision is timely delivered, the
Copyright Royalty Judges shall apply the legal determinations
embodied in the decision of the Register of Copyrights in
resolving material questions of substantive law.
``(ii) In clause (i), a `novel question of law' is a
question of law that has not been determined in prior
decisions, determinations, and rulings described in section
803(a).
``(C) Consultation.--Notwithstanding the provisions of
subparagraph (A), the Copyright Royalty Judges shall consult
with the Register of Copyrights with respect to any
determination or ruling that would require that any act be
performed by the Copyright Office, and any such determination
or ruling shall not be binding upon the Register of
Copyrights.
``(D) Review of legal conclusions by the register of
copyrights.--The Register of Copyrights may review for legal
error the resolution by the Copyright Royalty Judges of a
material question of substantive law under this title that
underlies or is contained in a final determination of the
Copyright Royalty Judges. If the Register of Copyrights
concludes, after taking into consideration the views of the
participants in the proceeding, that any resolution reached
by the Copyright Royalty Judges was in material error, the
Register of Copyrights shall issue a written decision
correcting such legal error, which shall be made part of the
record of the proceeding. Additionally, the Register of
Copyrights shall cause to be published in the Federal
Register such written decision together with a specific
identification of the legal conclusion of the Copyright
Royalty Judges that is determined to be erroneous. As to
conclusions of substantive law involving an interpretation of
the statutory provisions of this title, the decision of the
Register of Copyrights shall be binding as precedent upon the
Copyright Royalty Judges in subsequent proceedings under this
chapter. When a decision has been rendered pursuant to
section 802(f)(1)(D), the Register of Copyrights may, on the
basis of and in accordance with such decision, intervene as
of right in any appeal of a final determination of the
Copyright Royalty Judges pursuant to section 803(d) in the
United States Court of Appeals for the District of Columbia
Circuit. If, prior to intervening in such an appeal, the
Register of Copyrights gives notification and undertakes to
consult with the Attorney General with respect to such
intervention, and the Attorney General fails within
reasonable period after receipt of such notification to
intervene in such appeal, the Register of Copyrights may
intervene in such appeal in his or her own name by any
attorney designated by the Register of Copyrights for such
purpose. Intervention by the Register of Copyrights in his or
her own name shall not preclude the Attorney General from
intervening on behalf of the United States in such an appeal
as may be otherwise provided or required by law.
``(E) Effect on judicial review.--Nothing in this section
shall be interpreted to alter the standard applied by a court
in reviewing legal determinations involving an interpretation
or construction of the provisions of this title or to affect
the extent to which any construction or interpretation of the
provisions of this title shall be accorded deference by a
reviewing court.
``(2) Performance appraisals.--
``(A) In general.--Notwithstanding any other provision of
law or any regulation of the Library of Congress, and subject
to subparagraph (B), the Copyright Royalty Judges shall not
receive performance appraisals.
``(B) Relating to sanction or removal.--To the extent that
the Librarian of Congress adopts regulations under subsection
(h) relating to the sanction or removal of a Copyright
Royalty Judge and such regulations require documentation to
establish the cause of such sanction or removal, the
Copyright Royalty Judge may receive an appraisal related
specifically to the cause of the sanction or removal.
``(g) Inconsistent Duties Barred.--No Copyright Royalty
Judge may undertake duties that conflict with his or her
duties and responsibilities as a Copyright Royalty Judge.
``(h) Standards of Conduct.--The Librarian of Congress
shall adopt regulations regarding the standards of conduct,
including financial conflict of interest and restrictions
against ex parte communications, which shall govern the
Copyright Royalty Judges and the proceedings under this
chapter.
``(i) Removal or Sanction.--The Librarian of Congress may
sanction or remove a Copyright Royalty Judge for violation of
the standards of conduct adopted under subsection (h),
misconduct, neglect of duty, or any disqualifying physical or
mental disability. Any such sanction or removal may be made
only after notice and opportunity for a hearing, but the
Librarian of Congress may suspend the Copyright Royalty Judge
during the pendency of such hearing. The Librarian shall
appoint an interim Copyright Royalty Judge during the period
of any such suspension.
``Sec. 803. Proceedings of Copyright Royalty Judges
``(a) Proceedings.--
``(1) In general.--The Copyright Royalty Judges shall act
in accordance with regulations issued by the Copyright
Royalty Judges and the Librarian of Congress, and on the
basis of a written record, prior determinations and
interpretations of the Copyright Royalty Tribunal, Librarian
of Congress, copyright arbitration royalty panels, the
Register of Copyrights, and the Copyright Royalty Judges (to
the extent those determinations are not inconsistent with a
decision of the Register of Copyrights that was timely
delivered to the Copyright Royalty Judges pursuant to section
802(f)(1) (A) or (B), or with a decision of the Register of
Copyrights pursuant to section 802(f)(1)(D)), under this
chapter, and decisions of the court of appeals under this
chapter before, on, or after the effective date of the
Copyright Royalty and Distribution Reform Act of 2004.
``(2) Judges acting as panel and individually.--The
Copyright Royalty Judges shall preside over hearings in
proceedings under this chapter en banc. The Chief Copyright
Royalty Judge may designate a Copyright Royalty Judge to
preside individually over such collateral and administrative
proceedings, and over such proceedings under paragraphs (1)
through (5) of subsection (b), as the Chief Judge considers
appropriate.
``(3) Determinations.--Final determinations of the
Copyright Royalty Judges in proceedings under this chapter
shall be made by majority vote. A Copyright Royalty Judge
dissenting from the majority on any determination under this
chapter may issue his or her dissenting opinion, which shall
be included with the determination.
``(b) Procedures.--
``(1) Initiation.--
``(A) Call for petitions to participate.--(i) Promptly upon
a determination made under section 804(a), or no later than
January 5 of a year specified in section 804(b) (2) or (3),
or as provided under section 804(b)(8), or by no later than
January 5 of a year specified in section 804 for the
commencement of a proceeding if a petition has not been filed
by that date, the Copyright Royalty Judges shall cause to be
published in the Federal Register notice of commencement of
proceedings under this chapter calling for the filing of
petitions to participate in a proceeding under this chapter
for the purpose of making the relevant determination under
section 111, 112, 114, 115, 116, 118, 119, 1004, or 1007, as
the case may be.
``(ii) Petitions to participate shall be filed by no later
than 30 days after publication of notice of commencement of a
proceeding, under clause (i), except that the Copyright
Royalty Judges may, for substantial good cause shown and if
there is no prejudice to the participants that have already
filed petitions, accept late petitions to participate at any
time up to the date that is 90 days before the date on which
participants in the proceeding are to file their written
direct statements. Notwithstanding the preceding sentence,
petitioners whose petitions are filed more than 30 days after
publication of notice of commencement of a proceeding are not
eligible to object to a settlement reached during the
voluntary negotiation period under section 803(b)(3), and any
objection filed by such a petitioner shall not be taken into
account by the Copyright Royalty Judges.
``(B) Petitions to participate.--Each petition to
participate in a proceeding shall describe the petitioner's
interest in the subject matter of the proceeding. Parties
with similar interests may file a single petition to
participate.
``(2) Participation in general.--Subject to paragraph (4),
a person may participate in a proceeding under this chapter,
including through the submission of briefs or other
information, only if--
``(A) that person has filed a petition to participate in
accordance with paragraph (1) (either individually or as a
group under paragraph (1)(B)), together with a filing fee of
$150;
``(B) the Copyright Royalty Judges have not determined that
the petition to participate is facially invalid; and
``(C) the Copyright Royalty Judges have not determined, sua
sponte or on the motion of another participant in the
proceeding, that the person lacks a significant interest in
the proceeding.
``(3) Voluntary negotiation period.--
``(A) In general.--Promptly after the date for filing of
petitions to participate in a proceeding, the Copyright
Royalty Judges shall make available to all participants in
the proceeding a list of such participants and shall initiate
a voluntary negotiation period among the participants.
``(B) Length of proceedings.--The voluntary negotiation
period initiated under subparagraph (A) shall be 3 months.
``(C) Determination of subsequent proceedings.--At the
close of the voluntary negotiation proceedings, the Copyright
Royalty Judges shall, if further proceedings under this
chapter are necessary, determine whether and to what extent
paragraphs (4) and (5) will apply to the parties.
``(4) Small claims procedure in distribution proceedings.--
``(A) In general.--If, in a proceeding under this chapter
to determine the distribution of royalties, a participant in
the proceeding asserts a
[[Page H9851]]
claim in the amount of $10,000 or less, the Copyright Royalty
Judges shall decide the controversy on the basis of the
filing of the written direct statement by the participant,
the response by any opposing participant, and 1 additional
response by each such party. The participant asserting the
claim shall not be required to pay the filing fee under
paragraph (2).
``(B) Bad faith inflation of claim.--If the Copyright
Royalty Judges determine that a participant asserts in bad
faith an amount in controversy in excess of $10,000 for the
purpose of avoiding a determination under the procedure set
forth in subparagraph (A), the Copyright Royalty Judges shall
impose a fine on that participant in an amount not to exceed
the difference between the actual amount distributed and the
amount asserted by the participant.
``(5) Paper proceedings.--The Copyright Royalty Judges in
proceedings under this chapter may decide, sua sponte or upon
motion of a participant, to determine issues on the basis of
the filing of the written direct statement by the
participant, the response by any opposing participant, and
one additional response by each such participant. Prior to
making such decision to proceed on such a paper record only,
the Copyright Royalty Judges shall offer to all parties to
the proceeding the opportunity to comment on the decision.
The procedure under this paragraph--
``(A) shall be applied in cases in which there is no
genuine issue of material fact, there is no need for
evidentiary hearings, and all participants in the proceeding
agree in writing to the procedure; and
``(B) may be applied under such other circumstances as the
Copyright Royalty Judges consider appropriate.
``(6) Regulations.--
``(A) In general.--The Copyright Royalty Judges may issue
regulations to carry out their functions under this title.
All regulations issued by the Copyright Royalty Judges are
subject to the approval of the Librarian of Congress. Not
later than 120 days after Copyright Royalty Judges or interim
Copyright Royalty Judges, as the case may be, are first
appointed after the enactment of the Copyright Royalty and
Distribution Reform Act of 2004, such judges shall issue
regulations to govern proceedings under this chapter.
``(B) Interim regulations.--Until regulations are adopted
under subparagraph (A), the Copyright Royalty Judges shall
apply the regulations in effect under this chapter on the day
before the effective date of the Copyright Royalty and
Distribution Reform Act of 2004, to the extent such
regulations are not inconsistent with this chapter, except
that functions carried out under such regulations by the
Librarian of Congress, the Register of Copyrights, or
copyright arbitration royalty panels that, as of such date of
enactment, are to be carried out by the Copyright Royalty
Judges under this chapter, shall be carried out by the
Copyright Royalty Judges under such regulations.
``(C) Requirements.--Regulations issued under subparagraph
(A) shall include the following:
``(i) The written direct statements of all participants in
a proceeding under paragraph (2) shall be filed by a date
specified by the Copyright Royalty Judges, which may be not
earlier than 4 months, and not later than 5 months, after the
end of the voluntary negotiation period under paragraph (3).
Notwithstanding the preceding sentence, the Copyright Royalty
Judges may allow a participant in a proceeding to file an
amended written direct statement based on new information
received during the discovery process, within 15 days after
the end of the discovery period specified in clause (iii).
``(ii)(I) Following the submission to the Copyright Royalty
Judges of written direct statements by the participants in a
proceeding under paragraph (2), the judges shall meet with
the participants for the purpose of setting a schedule for
conducting and completing discovery. Such schedule shall be
determined by the Copyright Royalty Judges.
``(II) In this chapter, the term `written direct
statements' means witness statements, testimony, and exhibits
to be presented in the proceedings, and such other
information that is necessary to establish terms and rates,
or the distribution of royalty payments, as the case may be,
as set forth in regulations issued by the Copyright Royalty
Judges.
``(iii) Hearsay may be admitted in proceedings under this
chapter to the extent deemed appropriate by the Copyright
Royalty Judges.
``(iv) Discovery in such proceedings shall be permitted for
a period of 60 days, except for discovery ordered by the
Copyright Royalty Judges in connection with the resolution of
motions, orders and disputes pending at the end of such
period.
``(v) Any participant under paragraph (2) in a proceeding
under this chapter to determine royalty rates may request of
an opposing participant nonprivileged documents directly
related to the written direct statement or written rebuttal
statement of that participant. Any objection to such a
request shall be resolved by a motion or request to compel
production made to the Copyright Royalty Judges according to
regulations adopted by the Copyright Royalty Judges. Each
motion or request to compel discovery shall be determined by
the Copyright Royalty Judges, or by a Copyright Royalty Judge
when permitted under subsection (a)(2). Upon such motion, the
Copyright Royalty Judges may order discovery pursuant to
regulations established under this paragraph.
``(vi)(I) Any participant under paragraph (2) in a
proceeding under this chapter to determine royalty rates may,
by means of written motion or on the record, request of an
opposing participant or witness other relevant information
and materials if absent the discovery sought the Copyright
Royalty Judges' resolution of the proceeding would be
substantially impaired. In determining whether discovery will
be granted under this clause, the Copyright Royalty Judges
may consider--
``(aa) whether the burden or expense of producing the
requested information or materials outweighs the likely
benefit, taking into account the needs and resources of the
participants, the importance of the issues at stake, and the
probative value of the requested information or materials in
resolving such issues;
``(bb) whether the requested information or materials would
be unreasonably cumulative or duplicative, or are obtainable
from another source that is more convenient, less burdensome,
or less expensive; and
``(cc) whether the participant seeking discovery has had
ample opportunity by discovery in the proceeding or by other
means to obtain the information sought.
``(II) This clause shall not apply to any proceeding
scheduled to commence after December 31, 2010.
``(vii) In a proceeding under this chapter to determine
royalty rates, the participants entitled to receive royalties
shall collectively be permitted to take no more than 10
depositions and secure responses to no more than 25
interrogatories and the participants obligated to pay
royalties shall collectively be permitted to take no more
than 10 depositions and secure responses to no more than 25
interrogatories. The Copyright Royalty Judges shall resolve
any disputes among similarly aligned participants to allocate
the number of depositions or interrogatories permitted under
this clause.
``(viii) The rules and practices in effect on the day
before the effective date of the Copyright Royalty and
Distribution Reform Act of 2004, relating to discovery in
proceedings under this chapter to determine the distribution
of royalty fees, shall continue to apply to such proceedings
on and after such effective date.
``(ix) In proceedings to determine royalty rates, the
Copyright Royalty Judges may issue a subpoena commanding a
participant or witness to appear and give testimony or to
produce and permit inspection of documents or tangible things
if the Copyright Royalty Judges' resolution of the proceeding
would be substantially impaired by the absence of such
testimony or production of documents or tangible things. Such
subpoena shall specify with reasonable particularity the
materials to be produced or the scope and nature of the
required testimony. Nothing in this subparagraph shall
preclude the Copyright Royalty Judges from requesting the
production by a nonparticipant of information or materials
relevant to the resolution by the Copyright Royalty Judges of
a material issue of fact.
``(x) The Copyright Royalty Judges shall order a settlement
conference among the participants in the proceeding to
facilitate the presentation of offers of settlement among the
participants. The settlement conference shall be held during
a 21-day period following the end of the discovery period and
shall take place outside the presence of the Copyright
Royalty Judges.
``(xi) No evidence, including exhibits, may be submitted in
the written direct statement or written rebuttal statement of
a participant without a sponsoring witness, except where the
Copyright Royalty Judges have taken official notice, or in
the case of incorporation by reference of past records, or
for good cause shown.
``(c) Determination of Copyright Royalty Judges.--
``(1) Timing.--The Copyright Royalty Judges shall issue
their determination in a proceeding not later than 11 months
after the conclusion of the 21-day settlement conference
period under subsection (b)(3)(C)(x), but, in the case of a
proceeding to determine successors to rates or terms that
expire on a specified date, in no event later than 15 days
before the expiration of the then current statutory rates and
terms.
``(2) Rehearings.--
``(A) In general.--The Copyright Royalty Judges may, in
exceptional cases, upon motion of a participant under
subsection (b)(2), order a rehearing, after the determination
in a proceeding is issued under paragraph (1), on such
matters as the Copyright Royalty Judges determine to be
appropriate.
``(B) Timing for filing motion.--Any motion for a rehearing
under subparagraph (A) may only be filed within 15 days after
the date on which the Copyright Royalty Judges deliver their
initial determination concerning rates and terms to the
participants in the proceeding.
``(C) Participation by opposing party not required.--In any
case in which a rehearing is ordered, any opposing party
shall not be required to participate in the rehearing, except
as provided under subsection (d)(1).
``(D) No negative inference.--No negative inference shall
be drawn from lack of participation in a rehearing.
``(E) Continuity of rates and terms.--(i) If the decision
of the Copyright Royalty Judges on any motion for a rehearing
is not rendered before the expiration of the statutory rates
and terms that were previously in effect, in the case of a
proceeding to determine successors to rates and terms that
expire on a specified date, then--
``(I) the initial determination of the Copyright Royalty
Judges that is the subject of the rehearing motion shall be
effective as of the day following the date on which the rates
and terms that were previously in effect expire; and
``(II) in the case of a proceeding under section
114(f)(1)(C) or 114(f)(2)(C), royalty rates and terms shall,
for purposes of section 114(f)(4)(B), be deemed to have been
set at those rates and terms contained in the initial
determination of the Copyright Royalty Judges that is the
subject of the rehearing motion, as of the date of that
determination.
``(ii) The pendency of a motion for a rehearing under this
paragraph shall not relieve persons obligated to make royalty
payments who would be affected by the determination on that
[[Page H9852]]
motion from providing the statements of account and any
reports of use, to the extent required, and paying the
royalties required under the relevant determination or
regulations.
``(iii) Notwithstanding clause (ii), whenever royalties
described in clause (ii) are paid to a person other than the
Copyright Office, the entity designated by the Copyright
Royalty Judges to which such royalties are paid by the
copyright user (and any successor thereto) shall, within 60
days after the motion for rehearing is resolved or, if the
motion is granted, within 60 days after the rehearing is
concluded, return any excess amounts previously paid to the
extent necessary to comply with the final determination of
royalty rates by the Copyright Royalty Judges. Any
underpayment of royalties resulting from a rehearing shall be
paid within the same period.
``(3) Contents of determination.--A determination of the
Copyright Royalty Judges shall be supported by the written
record and shall set forth the findings of fact relied on by
the Copyright Royalty Judges. Among other terms adopted in a
determination, the Copyright Royalty Judges may specify
notice and recordkeeping requirements of users of the
copyrights at issue that apply in lieu of those that would
otherwise apply under regulations.
``(4) Continuing jurisdiction.--The Copyright Royalty
Judges may, with the approval of the Register of Copyrights,
issue an amendment to a written determination to correct any
technical or clerical errors in the determination or to
modify the terms, but not the rates, of royalty payments in
response to unforeseen circumstances that would frustrate the
proper implementation of such determination. Such amendment
shall be set forth in a written addendum to the determination
that shall be distributed to the participants of the
proceeding and shall be published in the Federal Register.
``(5) Protective order.--The Copyright Royalty Judges may
issue such orders as may be appropriate to protect
confidential information, including orders excluding
confidential information from the record of the determination
that is published or made available to the public, except
that any terms or rates of royalty payments or distributions
may not be excluded.
``(6) Publication of determination.--Following review of
the determination by the Register of Copyrights under section
802(f)(1)(D), the Librarian of Congress shall cause the
determination, and any corrections thereto, to be published
in the Federal Register. The Librarian of Congress shall also
publicize the determination and corrections in such other
manner as the Librarian considers appropriate, including, but
not limited to, publication on the Internet. The Librarian of
Congress shall also make the determination, corrections, and
the accompanying record available for public inspection and
copying.
``(7) Late payment.--A determination of Copyright Royalty
Judges may include terms with respect to late payment, but in
no way shall such terms prevent the copyright holder from
asserting other rights or remedies provided under this title.
``(d) Judicial Review.--
``(1) Appeal.--Any determination of the Copyright Royalty
Judges under subsection (c) may, within 30 days after the
publication of the determination in the Federal Register, be
appealed, to the United States Court of Appeals for the
District of Columbia Circuit, by any aggrieved participant in
the proceeding under subsection (b)(2) who fully participated
in the proceeding and who would be bound by the
determination. Any participant that did not participate in a
rehearing may not raise any issue that was the subject of
that rehearing at any stage of judicial review of the hearing
determination. If no appeal is brought within that 30-day
period, the determination of the Copyright Royalty Judges
shall be final, and the royalty fee or determination with
respect to the distribution of fees, as the case may be,
shall take effect as set forth in paragraph (2).
``(2) Effect of rates.--
``(A) Expiration on specified date.--When this title
provides that the royalty rates and terms that were
previously in effect are to expire on a specified date, any
adjustment or determination by the Copyright Royalty Judges
of successor rates and terms for an ensuing statutory license
period shall be effective as of the day following the date of
expiration of the rates and terms that were previously in
effect, even if the determination of the Copyright Royalty
Judges is rendered on a later date. A transmission service
shall be obligated to continue making payments under the
rates and terms previously in effect until such time as rates
and terms for the successor period are established. Whenever
royalties pursuant to this section are paid to a person other
than the Copyright Office, the entity designated by the
Copyright Royalty Judges to which such royalties are paid by
the copyright user (and any successor thereto) shall, within
60 days after the final determination of the Copyright
Royalty Judges establishing rates and terms for a successor
period or the exhaustion of all rehearings or appeals of such
determination, if any, return any excess amounts previously
paid to the extent necessary to comply with the final
determination of royalty rates. Any underpayment of royalties
by a copyright user shall be paid to the entity designated by
the Copyright Royalty Judges within the same period.
``(B) Other cases.--In cases where rates and terms have
not, prior to the inception of an activity, been established
for that particular activity under the relevant license, such
rates and terms shall be retroactive to the inception of
activity under the relevant license covered by such rates and
terms. In other cases where rates and terms do not expire on
a specified date, successor rates and terms shall take effect
on the first day of the second month that begins after the
publication of the determination of the Copyright Royalty
Judges in the Federal Register, except as otherwise provided
in this title, or by the Copyright Royalty Judges, or as
agreed by the participants in a proceeding that would be
bound by the rates and terms. Except as otherwise provided in
this title, the rates and terms, to the extent applicable,
shall remain in effect until such successor rates and terms
become effective.
``(C) Obligation to make payments.--
``(i) The pendency of an appeal under this subsection shall
not relieve persons obligated to make royalty payments under
section 111, 112, 114, 115, 116, 118, 119, or 1003, who would
be affected by the determination on appeal, from--
``(I) providing the statements of account and any report of
use; and
``(II) paying the royalties required under the relevant
determination or regulations.
``(ii) Notwithstanding clause (i), whenever royalties
described in clause (i) are paid to a person other than the
Copyright Office, the entity designated by the Copyright
Royalty Judges to which such royalties are paid by the
copyright user (and any successor thereto) shall, within 60
days after the final resolution of the appeal, return any
excess amounts previously paid (and interest thereon, if
ordered pursuant to paragraph (3)) to the extent necessary to
comply with the final determination of royalty rates on
appeal. Any underpayment of royalties resulting from an
appeal (and interest thereon, if ordered pursuant to
paragraph (3)) shall be paid within the same period.
``(3) Jurisdiction of court.--If the court, pursuant to
section 706 of title 5, modifies or vacates a determination
of the Copyright Royalty Judges, the court may enter its own
determination with respect to the amount or distribution of
royalty fees and costs, and order the repayment of any excess
fees, the payment of any underpaid fees, and the payment of
interest pertaining respectively thereto, in accordance with
its final judgment. The court may also vacate the
determination of the Copyright Royalty Judges and remand the
case to the Copyright Royalty Judges for further proceedings
in accordance with subsection (a).
``(e) Administrative Matters.--
``(1) Deduction of costs of library of congress and
copyright office from filing fees.--
``(A) Deduction from filing fees.--The Librarian of
Congress may, to the extent not otherwise provided under this
title, deduct from the filing fees collected under subsection
(b) for a particular proceeding under this chapter the
reasonable costs incurred by the Librarian of Congress, the
Copyright Office, and the Copyright Royalty Judges in
conducting that proceeding, other than the salaries of the
Copyright Royalty Judges and the 3 staff members appointed
under section 802(b).
``(B) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be necessary
to pay the costs incurred under this chapter not covered by
the filing fees collected under subsection (b). All funds
made available pursuant to this subparagraph shall remain
available until expended.
``(2) Positions required for administration of compulsory
licensing.--Section 307 of the Legislative Branch
Appropriations Act, 1994, shall not apply to employee
positions in the Library of Congress that are required to be
filled in order to carry out section 111, 112, 114, 115, 116,
118, or 119 or chapter 10.
``Sec. 804. Institution of proceedings
``(a) Filing of Petition.--With respect to proceedings
referred to in paragraphs (1) and (2) of section 801(b)
concerning the determination or adjustment of royalty rates
as provided in sections 111, 112, 114, 115, 116, 118, 119,
and 1004, during the calendar years specified in the schedule
set forth in subsection (b), any owner or user of a
copyrighted work whose royalty rates are specified by this
title, or are established under this chapter before or after
the enactment of the Copyright Royalty and Distribution
Reform Act of 2004, may file a petition with the Copyright
Royalty Judges declaring that the petitioner requests a
determination or adjustment of the rate. The Copyright
Royalty Judges shall make a determination as to whether the
petitioner has such a significant interest in the royalty
rate in which a determination or adjustment is requested. If
the Copyright Royalty Judges determine that the petitioner
has such a significant interest, the Copyright Royalty Judges
shall cause notice of this determination, with the reasons
for such determination, to be published in the Federal
Register, together with the notice of commencement of
proceedings under this chapter. With respect to proceedings
under paragraph (1) of section 801(b) concerning the
determination or adjustment of royalty rates as provided in
sections 112 and 114, during the calendar years specified in
the schedule set forth in subsection (b), the Copyright
Royalty Judges shall cause notice of commencement of
proceedings under this chapter to be published in the Federal
Register as provided in section 803(b)(1)(A).
``(b) Timing of Proceedings.--
``(1) Section 111 proceedings.--(A) A petition described in
subsection (a) to initiate proceedings under section
801(b)(2) concerning the adjustment of royalty rates under
section 111 to which subparagraph (A) or (D) of section
801(b)(2) applies may be filed during the year 2005 and in
each subsequent fifth calendar year.
``(B) In order to initiate proceedings under section
801(b)(2) concerning the adjustment of royalty rates under
section 111 to which subparagraph (B) or (C) of section
801(b)(2) applies, within 12 months after an event described
in either of those subsections, any owner or user of a
copyrighted work whose royalty rates are specified by section
111, or by a rate established under this chapter before or
after the enactment
[[Page H9853]]
of the Copyright Royalty and Distribution Reform Act of 2004,
may file a petition with the Copyright Royalty Judges
declaring that the petitioner requests an adjustment of the
rate. The Copyright Royalty Judges shall then proceed as set
forth in subsection (a) of this section. Any change in
royalty rates made under this chapter pursuant to this
subparagraph may be reconsidered in the year 2005, and each
fifth calendar year thereafter, in accordance with the
provisions in section 801(b)(3) (B) or (C), as the case may
be. A petition for adjustment of rates established by section
111(d)(1)(B) as a result of a change is the rules and
regulations of the Federal Communications Commission shall
set forth the change on which the petition is based.
``(C) Any adjustment of royalty rates under section 111
shall take effect as of the first accounting period
commencing after the publication of the determination of the
Copyright Royalty Judges in the Federal Register, or on such
other date as is specified in that determination.
``(2) Certain section 112 proceedings.--Proceedings under
this chapter shall be commenced in the year 2007 to determine
reasonable terms and rates of royalty payments for the
activities described in section 112(e)(1) relating to the
limitation on exclusive rights specified by section
114(d)(1)(C)(iv), to become effective on January 1, 2009.
Such proceedings shall be repeated in each subsequent fifth
calendar year.
``(3) Section 114 and corresponding 112 proceedings.--
``(A) For eligible nonsubscription services and new
subscription services.--Proceedings under this chapter shall
be commenced as soon as practicable after the effective date
of the Copyright Royalty and Distribution Reform Act of 2004
to determine reasonable terms and rates of royalty payments
under sections 114 and 112 for the activities of eligible
nonsubscription transmission services and new subscription
services, to be effective for the period beginning on January
1, 2006, and ending on December 31, 2010. Such proceedings
shall next be commenced in January 2009 to determine
reasonable terms and rates of royalty payments, to become
effective on January 1, 2011. Thereafter, such proceedings
shall be repeated in each subsequent fifth calendar year.
``(B) For preexisting subscription and satellite digital
audio radio services.--Proceedings under this chapter shall
be commenced in January 2006 to determine reasonable terms
and rates of royalty payments under sections 114 and 112 for
the activities of preexisting subscription services, to be
effective during the period beginning on January 1, 2008, and
ending on December 31, 2012, and preexisting satellite
digital audio radio services, to be effective during the
period beginning on January 1, 2007, and ending on December
31, 2012. Such proceedings shall next be commenced in 2011 to
determine reasonable terms and rates of royalty payments, to
become effective on January 1, 2013. Thereafter, such
proceedings shall be repeated in each subsequent fifth
calendar year.
``(C)(i) Notwithstanding any other provision of this
chapter, this subparagraph shall govern proceedings commenced
pursuant to section 114(f)(1)(C) and 114(f)(2)(C) concerning
new types of services.
``(ii) Not later than 30 days after a petition to determine
rates and terms for a new type of service that is filed by
any copyright owner of sound recordings, or such new type of
service, indicating that such new type of service is or is
about to become operational, the Copyright Royalty Judges
shall issue a notice for a proceeding to determine rates and
terms for such service.
``(iii) The proceeding shall follow the schedule set forth
in such subsections (b), (c), and (d) of section 803, except
that--
``(I) the determination shall be issued by not later than
24 months after the publication of the notice under clause
(ii); and
``(II) the decision shall take effect as provided in
subsections (c)(2) and (d)(2) of section 803 and section
114(f)(4)(B)(ii) and (C).
``(iv) The rates and terms shall remain in effect for the
period set forth in section 114(f)(1)(C) or 114(f)(2)(C), as
the case may be.
``(4) Section 115 proceedings.--A petition described in
subsection (a) to initiate proceedings under section
801(b)(1) concerning the adjustment or determination of
royalty rates as provided in section 115 may be filed in the
year 2006 and in each subsequent fifth calendar year, or at
such other times as the parties have agreed under section
115(c)(3) (B) and (C).
``(5) Section 116 proceedings.--(A) A petition described in
subsection (a) to initiate proceedings under section 801(b)
concerning the determination of royalty rates and terms as
provided in section 116 may be filed at any time within 1
year after negotiated licenses authorized by section 116 are
terminated or expire and are not replaced by subsequent
agreements.
``(B) If a negotiated license authorized by section 116 is
terminated or expires and is not replaced by another such
license agreement which provides permission to use a quantity
of musical works not substantially smaller than the quantity
of such works performed on coin-operated phonorecord players
during the 1-year period ending March 1, 1989, the Copyright
Royalty Judges shall, upon petition filed under paragraph (1)
within 1 year after such termination or expiration, commence
a proceeding to promptly establish an interim royalty rate or
rates for the public performance by means of a coin-operated
phonorecord player of nondramatic musical works embodied in
phonorecords which had been subject to the terminated or
expired negotiated license agreement. Such rate or rates
shall be the same as the last such rate or rates and shall
remain in force until the conclusion of proceedings by the
Copyright Royalty Judges, in accordance with section 803, to
adjust the royalty rates applicable to such works, or until
superseded by a new negotiated license agreement, as provided
in section 116(b).
``(6) Section 118 proceedings.--A petition described in
subsection (a) to initiate proceedings under section
801(b)(1) concerning the determination of reasonable terms
and rates of royalty payments as provided in section 118 may
be filed in the year 2006 and in each subsequent fifth
calendar year.
``(7) Section 1004 proceedings.--A petition described in
subsection (a) to initiate proceedings under section
801(b)(1) concerning the adjustment of reasonable royalty
rates under section 1004 may be filed as provided in section
1004(a)(3).
``(8) Proceedings concerning distribution of royalty
fees.--With respect to proceedings under section 801(b)(3)
concerning the distribution of royalty fees in certain
circumstances under section 111, 119, or 1007, the Copyright
Royalty Judges shall, upon a determination that a controversy
exists concerning such distribution, cause to be published in
the Federal Register notice of commencement of proceedings
under this chapter.
``Sec. 805. General rule for voluntarily negotiated
agreements
``Any rates or terms under this title that--
``(1) are agreed to by participants to a proceeding under
section 803(b)(3),
``(2) are adopted by the Copyright Royalty Judges as part
of a determination under this chapter, and
``(3) are in effect for a period shorter than would
otherwise apply under a determination pursuant to this
chapter,
shall remain in effect for such period of time as would
otherwise apply under such determination, except that the
Copyright Royalty Judges shall adjust the rates pursuant to
the voluntary negotiations to reflect national monetary
inflation during the additional period the rates remain in
effect.''.
(b) Conforming Amendment.--The table of chapters for title
17, United States Code, is amended by striking the item
relating to chapter 8 and inserting the following:
``8. Proceedings by Copyright Royalty Judges.................801''.....
SEC. 4. DEFINITION.
Section 101 is amended by inserting after the definition of
``copies'' the following:
``A `Copyright Royalty Judge' is a Copyright Royalty Judge
appointed under section 802 of this title, and includes any
individual serving as an interim Copyright Royalty Judge
under such section.''.
SEC. 5. TECHNICAL AMENDMENTS.
(a) Cable Rates.--Section 111(d) is amended--
(1) in paragraph (2), in the second sentence, by striking
``a copyright arbitration royalty panel'' and inserting ``the
Copyright Royalty Judges.''; and
(2) in paragraph (4)--
(A) in subparagraph (A), by striking ``Librarian of
Congress'' each place it appears and inserting ``Copyright
Royalty Judges'';
(B) in subparagraph (B)--
(i) in the first sentence, by striking ``Librarian of
Congress shall, upon the recommendation of the Register of
Copyrights,'' and inserting ``Copyright Royalty Judges
shall'';
(ii) in the second sentence, by striking ``Librarian
determines'' and inserting ``Copyright Royalty Judges
determine''; and
(iii) in the third sentence--
(I) by striking ``Librarian'' each place it appears and
inserting ``Copyright Royalty Judges''; and
(II) by striking ``convene a copyright arbitration royalty
panel'' and inserting ``conduct a proceeding''; and
(C) in subparagraph (C), by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''.
(b) Ephemeral Recordings.--Section 112(e) is amended--
(1) in paragraph (3)--
(A) by amending the first sentence to read as follows:
``Proceedings under chapter 8 shall determine reasonable
rates and terms of royalty payments for the activities
specified by paragraph (1) during the 5-year periods
beginning on January 1 of the second year following the year
in which the proceedings are to be commenced, or such other
periods as the parties may agree.''; and
(B) by striking the second sentence;
(C) in the third sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(D) in the fourth sentence, by striking ``negotiation'';
(2) in paragraph (4)--
(A) by amending the first sentence to read as follows:
``The schedule of reasonable rates and terms determined by
the Copyright Royalty Judges shall, subject to paragraph (5),
be binding on all copyright owners of sound recordings and
transmitting organizations entitled to a statutory license
under this subsection during the 5-year period specified in
paragraph (3), or such other period as the parties may
agree.'';
(B) by striking ``copyright arbitration royalty panel''
each subsequent place it appears and inserting ``Copyright
Royalty Judges'';
(C) in the fourth sentence, by striking ``its decision''
and inserting ``their decision'';
(D) in the fifth sentence, by striking ``negotiated as
provided'' and inserting ``described''; and
(E) in the last sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges'';
(3) in paragraph (5), by striking ``or decision by the
Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges'';
(4) by striking paragraph (6) and redesignating paragraphs
(7), (8), and (9), as paragraphs (6), (7), and (8),
respectively; and
[[Page H9854]]
(5) in paragraph (6)(A), as so redesignated, by striking
``Librarian of Congress'' and inserting ``Copyright Royalty
Judges''.
(c) Scope of Exclusive Rights in Sound Recordings.--Section
114(f) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A)--
(i) by amending the first sentence to read as follows:
``Proceedings under chapter 8 shall determine reasonable
rates and terms of royalty payments for subscription
transmissions by preexisting subscription services and
transmissions by preexisting satellite digital audio radio
services specified by subsection (d)(2) during 5-year periods
beginning on January 1 of the second year following the year
in which the proceedings are to be commenced, except where
different transitional periods are provided in section
804(b), or such periods as the parties may agree.'';
(ii) in the third sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(iii) in the fourth sentence, by striking ``negotiation'';
(B) in subparagraph (B)--
(i) by amending the first sentence to read as follows:
``The schedule of reasonable rates and terms determined by
the Copyright Royalty Judges shall, subject to paragraph (3),
be binding on all copyright owners of sound recordings and
entities performing sound recordings affected by this
paragraph during the 5-year period specified in subparagraph
(A), a transitional period provided in section 804(b), or
such other period as the parties may agree.'';
(ii) in the second sentence, by striking ``copyright
arbitration royalty panel'' and inserting ``Copyright Royalty
Judges''; and
(iii) in the second sentence, by striking ``negotiated as
provided'' and inserting ``described''; and
(C) by amending subparagraph (C) to read as follows:
``(C) The procedures under subparagraphs (A) and (B) also
shall be initiated pursuant to a petition filed by any
copyright owners of sound recordings, any preexisting
subscription services, or any preexisting satellite digital
audio radio services indicating that a new type of
subscription digital audio transmission service on which
sound recordings are performed is or is about to become
operational, for the purpose of determining reasonable terms
and rates of royalty payments with respect to such new type
of transmission service for the period beginning with the
inception of such new type of service and ending on the date
on which the royalty rates and terms for subscription digital
audio transmission services most recently determined under
subparagraph (A) or (B) and chapter 8 expire, or such other
period as the parties may agree.'';
(2) in paragraph (2)--
(A) in subparagraph (A)--
(i) by amending the first paragraph to read as follows:
``Proceedings under chapter 8 shall determine reasonable
rates and terms of royalty payments for subscription
transmissions by eligible nonsubscription transmission
services and transmissions by new subscription services
specified by subsection (d)(2) during 5-year periods
beginning on January 1 of the second year following the year
in which the proceedings are to be commenced, except where
different transitional periods are provided in section
804(b), or such periods as the parties may agree.'';
(ii) in the third sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(iii) in the fourth sentence, by striking ``negotiation'';
(B) in subparagraph (B)--
(i) by amending the first sentence to read as follows:
``The schedule of reasonable rates and terms determined by
the Copyright Royalty Judges shall, subject to paragraph (3),
be binding on all copyright owners of sound recordings and
entities performing sound recordings affected by this
paragraph during the 5-year period specified in subparagraph
(A), a transitional period provided in section 804(b), or
such other period as the parties may agree.'';
(ii) by striking ``copyright arbitration royalty panel''
each subsequent place it appears and inserting ``Copyright
Royalty Judges''; and
(iii) in the last sentence by striking ``negotiated as
provided'' and inserting ``described in''; and
(C) by amending subparagraph (C) to read as follows:
``(C) The procedures under subparagraphs (A) and (B) shall
also be initiated pursuant to a petition filed by any
copyright owners of sound recordings or any eligible
nonsubscription service or new subscription service
indicating that a new type of eligible nonsubscription
service or new subscription service on which sound recordings
are performed is or is about to become operational, for the
purpose of determining reasonable terms and rates of royalty
payments with respect to such new type of service for the
period beginning with the inception of such new type of
service and ending on the date on which the royalty rates and
terms for preexisting subscription digital audio transmission
services or preexisting satellite digital radio audio
services, as the case may be, most recently determined under
subparagraph (A) or (B) and chapter 8 expire, or such other
period as the parties may agree.'';
(3) in paragraph (3), by striking ``or decision by the
Librarian of Congress'' and inserting ``, decision by the
Librarian of Congress, or determination by the Copyright
Royalty Judges''; and
(4) in paragraph (4)--
(A) by striking ``Librarian of Congress'' each place it
appears and inserting ``Copyright Royalty Judges''; and
(B) by adding after the first sentence ``The notice and
recordkeeping rules in effect on the day before the effective
date of the Copyright Royalty and Distribution Reform Act of
2004 shall remain in effect unless and until new regulations
are promulgated by the Copyright Royalty Judges. If new
regulations are promulgated under this subparagraph, the
Copyright Royalty Judges shall take into account the
substance and effect of the rules in effect on the day before
the effective date of the Copyright Royalty and Distribution
Reform Act of 2004 and shall, to the extent practicable,
avoid significant disruption of the functions of any
designated agent authorized to collect and distribute royalty
fees.''.
(d) Phonorecords of Nondramatic Musical Works.--Section
115(c)(3) is amended--
(1) in subparagraph (A)(ii), by striking ``(F)'' and
inserting ``(E)'';
(2) in subparagraph (B)--
(A) by striking ``under this paragraph'' and inserting
``under this section'';
(B) by inserting ``on a nonexclusive basis'' after ``common
agents''; and
(C) by striking ``subparagraphs (C) through (F)'' and
inserting ``this subparagraph and subparagraphs (C) through
(E)''; and
(3) in subparagraph (C)--
(A) by amending the first sentence to read as follows:
``Proceedings under chapter 8 shall determine reasonable
rates and terms of royalty payments for the activities
specified by this section during periods beginning with the
effective date of such rates and terms, but not earlier than
January 1 of the second year following the year in which the
petition requesting the proceeding is filed, and ending on
the effective date of successor rates and terms, or such
other period as the parties may agree.'';
(B) in the third sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(C) in the fourth sentence, by striking ``negotiation'';
(4) in subparagraph (D)--
(A) by amending the first sentence to read as follows:
``The schedule of reasonable rates and terms determined by
the Copyright Royalty Judges shall, subject to subparagraph
(E), be binding on all copyright owners of nondramatic
musical works and persons entitled to obtain a compulsory
license under subsection (a)(1) during the period specified
in subparagraph (C), such other period as may be determined
pursuant to subparagraphs (B) and (C), or such other period
as the parties may agree.'';
(B) in the third sentence, by striking ``copyright
arbitration royalty panel'' and inserting ``Copyright Royalty
Judges''; and
(C) in the third sentence, by striking ``negotiated as
provided in subparagraphs (B) and (C)'' and inserting
``described'';
(5) in subparagraph (E)--
(A) in clause (i)--
(i) in the first sentence, by striking ``Librarian of
Congress'' and inserting ``Librarian of Congress, Copyright
Royalty Judges, or a copyright arbitration royalty panel to
the extent those determinations were accepted by the
Librarian of Congress''; and
(ii) in the second sentence, by striking ``(C), (D) or (F)
shall be given effect'' and inserting ``(C) or (D) shall be
given effect as to digital phonorecord deliveries''; and
(B) in clause (ii)(I), by striking ``(C), (D) or (F)'' each
place it appears and inserting ``(C) or (D)''; and
(6) by striking subparagraph (F) and redesignating
subparagraphs (G) through (L) as subparagraphs (F) through
(K), respectively.
(e) Coin-Operated Phonorecord Players.--Section 116 is
amended--
(1) in subsection (b), by amending paragraph (2) to read as
follows:
``(2) Chapter 8 proceeding.--Parties not subject to such a
negotiation may have the terms and rates and the division of
fees described in paragraph (1) determined in a proceeding in
accordance with the provisions of chapter 8.''; and
(2) in subsection (c)--
(A) in the subsection heading, by striking ``Copyright
Arbitration Royalty Panel Determinations'' and inserting
``Determinations by Copyright Royalty Judges''; and
(B) by striking ``a copyright arbitration royalty panel''
and inserting ``the Copyright Royalty Judges''.
(f) Use of Certain Works in Connection With Noncommercial
Broadcasting.--Section 118 is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in the first sentence, by striking ``Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(ii) by striking the second and third sentences;
(B) in paragraph (2), by striking ``Librarian of
Congress:'' and all that follows through the end of the
sentence and inserting ``Librarian of Congress, a copyright
arbitration royalty panel, or the Copyright Royalty Judges,
to the extent that they were accepted by the Librarian of
Congress, if copies of such agreements are filed with the
Copyright Royalty Judges within 30 days of execution in
accordance with regulations that the Copyright Royalty Judges
shall issue.''; and
(C) in paragraph (3)--
(i) in the second sentence--
(I) by striking ``copyright arbitration royalty panel'' and
inserting ``Copyright Royalty Judges''; and
(II) by striking ``paragraph (2).'' and inserting
``paragraph (2) or (3).'';
(ii) in the last sentence, by striking ```Librarian of
Congress'' and inserting ``Copyright Royalty Judges''; and
(iii) by striking ``(3) In'' and all that follows through
the end of the first sentence and inserting the following:
``(3) Voluntary negotiation proceedings initiated pursuant
to a petition filed under section 804(a) for the purpose of
determining a schedule
[[Page H9855]]
of terms and rates of royalty payments by public broadcasting
entities to copyright owners in works specified by this
subsection and the proportionate division of fees paid among
various copyright owners shall cover the 5-year period
beginning on January 1 of the second year following the year
in which the petition is filed. The parties to each
negotiation proceeding shall bear their own costs.
``(4) In the absence of license agreements negotiated under
paragraph (2) or (3), the Copyright Royalty Judges shall,
pursuant to chapter 8, conduct a proceeding to determine and
publish in the Federal Register a schedule of rates and terms
which, subject to paragraph (2), shall be binding on all
owners of copyright in works specified by this subsection and
public broadcasting entities, regardless of whether such
copyright owners have submitted proposals to the Copyright
Royalty Judges.'';
(2) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively;
(3) in subsection (c), as so redesignated, in the matter
preceding paragraph (1)--
(A) by striking ``(b)(2)'' and inserting ``(b)(2) or (3)'';
(B) by striking ``(b)(3)'' and inserting ``(b)(4)''; and
(C) by striking ``a copyright arbitration royalty panel
under subsection (b)(3)'' and inserting ``the Copyright
Royalty Judges under subsection (b)(3), to the extent that
they were accepted by the Librarian of Congress'';
(4) in subsection (d), as so redesignated--
(A) by striking ``in the Copyright Office'' and inserting
``with the Copyright Royalty Judges''; and
(B) by striking ``Register of Copyrights shall prescribe''
and inserting ``Copyright Royalty Judges shall prescribe as
provided in section 803(b)(6)''; and
(5) in subsection (f), as so redesignated, by striking
``(d)'' and inserting ``(c)''.
(g) Secondary Transmissions by Satellite Carriers.--Section
119(b) is amended--
(1) in paragraph (3), by striking ``Librarian of Congress''
and inserting ``Copyright Royalty Judges''; and
(2) in paragraph (4)--
(A) in subparagraph (A), by striking ``Librarian of
Congress'' each place it appears and inserting ``Copyright
Royalty Judges''; and
(B) by amending subparagraphs (B) and (C) to read as
follows:
``(B) Determination of controversy; distributions.--After
the first day of August of each year, the Copyright Royalty
Judges shall determine whether there exists a controversy
concerning the distribution of royalty fees. If the Copyright
Royalty Judges determine that no such controversy exists, the
Librarian of Congress shall, after deducting reasonable
administrative costs under this paragraph, distribute such
fees to the copyright owners entitled to receive them, or to
their designated agents. If the Copyright Royalty Judges find
the existence of a controversy, the Copyright Royalty Judges
shall, pursuant to chapter 8 of this title, conduct a
proceeding to determine the distribution of royalty fees.
``(C) Withholding of fees during controversy.--During the
pendency of any proceeding under this subsection, the
Copyright Royalty Judges shall withhold from distribution an
amount sufficient to satisfy all claims with respect to which
a controversy exists, but shall have the discretion to
proceed to distribute any amounts that are not in
controversy.''.
(h) Digital Audio Recording Devices.--
(1) Royalty payments.--Section 1004(a)(3) is amended by
striking ``Librarian of Congress'' each place it appears and
inserting ``Copyright Royalty Judges''.
(2) Entitlement to royalty payments.--Section 1006(c) is
amended by striking ``Librarian of Congress shall convene a
copyright arbitration royalty panel which'' and inserting
``Copyright Royalty Judges''.
(3) Procedures for distributing royalty payments.--Section
1007 is amended--
(A) in subsection (a), by amending paragraph (1) to read as
follows:
``(1) Filing of claims.--During the first 2 months of each
calendar year, every interested copyright party seeking to
receive royalty payments to which such party is entitled
under section 1006 shall file with the Copyright Royalty
Judges a claim for payments collected during the preceding
year in such form and manner as the Copyright Royalty Judges
shall prescribe by regulation.''; and
(B) by amending subsections (b) and (c) to read as follows:
``(b) Distribution of Payments in the Absence of a
Dispute.--After the period established for the filing of
claims under subsection (a), in each year, the Copyright
Royalty Judges shall determine whether there exists a
controversy concerning the distribution of royalty payments
under section 1006(c). If the Copyright Royalty Judges
determine that no such controversy exists, the Librarian of
Congress shall, within 30 days after such determination,
authorize the distribution of the royalty payments as set
forth in the agreements regarding the distribution of royalty
payments entered into pursuant to subsection (a). The
Librarian of Congress shall, before such royalty payments are
distributed, deduct the reasonable administrative costs
incurred by the Librarian under this section.
``(c) Resolution of Disputes.--If the Copyright Royalty
Judges find the existence of a controversy, the Copyright
Royalty Judges shall, pursuant to chapter 8 of this title,
conduct a proceeding to determine the distribution of royalty
payments. During the pendency of such a proceeding, the
Copyright Royalty Judges shall withhold from distribution an
amount sufficient to satisfy all claims with respect to which
a controversy exists, but shall, to the extent feasible,
authorize the distribution of any amounts that are not in
controversy. The Librarian of Congress shall, before such
royalty payments are distributed, deduct the reasonable
administrative costs incurred by the Librarian under this
section.''.
(4) Determination of certain disputes.--(A) Section 1010 is
amended to read as follows:
``Sec. 1010. Determination of certain disputes
``(a) Scope of Determination.--Before the date of first
distribution in the United States of a digital audio
recording device or a digital audio interface device, any
party manufacturing, importing, or distributing such device,
and any interested copyright party may mutually agree to
petition the Copyright Royalty Judges to determine whether
such device is subject to section 1002, or the basis on which
royalty payments for such device are to be made under section
1003.
``(b) Initiation of Proceedings.--The parties under
subsection (a) shall file the petition with the Copyright
Royalty Judges requesting the commencement of a proceeding.
Within 2 weeks after receiving such a petition, the Chief
Copyright Royalty Judge shall cause notice to be published in
the Federal Register of the initiation of the proceeding.
``(c) Stay of Judicial Proceedings.--Any civil action
brought under section 1009 against a party to a proceeding
under this section shall, on application of one of the
parties to the proceeding, be stayed until completion of the
proceeding.
``(d) Proceeding.--The Copyright Royalty Judges shall
conduct a proceeding with respect to the matter concerned, in
accordance with such procedures as the Copyright Royalty
Judges may adopt. The Copyright Royalty Judges shall act on
the basis of a fully documented written record. Any party to
the proceeding may submit relevant information and proposals
to the Copyright Royalty Judges. The parties to the
proceeding shall each bear their respective costs of
participation.
``(e) Judicial Review.--Any determination of the Copyright
Royalty Judges under subsection (d) may be appealed, by a
party to the proceeding, in accordance with section 803(d) of
this title. The pendency of an appeal under this subsection
shall not stay the determination of the Copyright Royalty
Judges. If the court modifies the determination of the
Copyright Royalty Judges, the court shall have jurisdiction
to enter its own decision in accordance with its final
judgment. The court may further vacate the determination of
the Copyright Royalty Judges and remand the case for
proceedings as provided in this section.''.
(B) The item relating to section 1010 in the table of
sections for chapter 10 is amended to read as follows:
``1010. Determination of certain disputes.''.
SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS.
(a) Effective Date.--This Act and the amendments made by
this Act shall take effect 6 months after the date of
enactment of this Act, except that the Librarian of Congress
shall appoint 1 or more interim Copyright Royalty Judges
under section 802(d) of title 17, United States Code, as
amended by this Act, within 90 days after such date of
enactment to carry out the functions of the Copyright Royalty
Judges under title 17, United States Code, to the extent that
Copyright Royalty Judges provided for in section 801(a) of
title 17, United States Code, as amended by this Act, have
not been appointed before the end of that 90-day period.
(b) Transition Provisions.--
(1) In general.--Subject to paragraphs (2) and (3), the
amendments made by this Act shall not affect any proceedings
commenced, petitions filed, or voluntary agreements entered
into before the date of enactment of this Act under the
provisions of title 17, United States Code, as amended by
this Act, and pending on such date of enactment. Such
proceedings shall continue, determinations made in such
proceedings, and appeals taken therefrom, as if this Act had
not been enacted, and shall continue in effect until modified
under title 17, United States Code, as amended by this Act.
Such petitions filed and voluntary agreements entered into
shall remain in effect as if this Act had not been enacted.
For purposes of this paragraph, the Librarian of Congress may
determine whether a proceeding has commenced. The Librarian
of Congress may terminate any proceeding commenced before the
date of enactment of this Act pursuant to chapter 8 of title
17, United States Code, 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.
(2) Certain royalty rates proceedings.--Notwithstanding any
other provision of law, proceedings to determine royalty
rates pursuant to section 119(c) of title 17, United States
Code, shall be conducted pursuant to the provisions of title
17, United States Code, and the rules and practices in effect
under that chapter on the day before any provision of this
Act takes effect.
(3) Pending proceedings.--Notwithstanding paragraph (1),
any proceedings to establish or adjust rates and terms for
the statutory licenses under section 114(f)(2) or 112(e) of
title 17, United States Code, for a statutory period
commencing on or after January 1, 2005, shall be terminated
upon the date of enactment of this Act and shall be null and
void. The rates and terms in effect under section 114(f)(2)
or 112(e) of title 17, United States Code, on December 31,
2004, for new subscription services, eligible nonsubscription
services, and services exempt under section 114(d)(1)(C)(iv)
of such title, and the rates and terms published in the
Federal Register under the authority of the Small Webcaster
Settlement Act of 2002 (17 U.S.C. 114 note; Public Law 107-
321) (including the amendments made by that Act) for the
years 2003 through
[[Page H9856]]
2004, as well as any notice and recordkeeping provisions
adopted pursuant thereto, shall remain in effect until the
later of the first applicable effective date for successor
terms and rates specified in section 804(b) (2) or (3)(A) of
title 17, United States Code, or such later date as the
parties may agree or the Copyright Royalty Judges may
establish. For the period commencing January 1, 2005, an
eligible small webcaster or a noncommercial webcaster, as
defined in the regulations published by the Register of
Copyrights pursuant to the Small Webcaster Settlement Act of
2002 (17 U.S.C. 114 note; Public Law 107-321) (including the
amendments made by that Act), may elect to be subject to the
rates and terms published in those regulations by complying
with the procedures governing the election process set forth
in those regulations not later than the first date on which
the webcaster would be obligated to make a royalty payment
for such period. Until successor terms and rates have been
established for the period commencing January 1, 2006,
licensees shall continue to make royalty payments at the
rates and on the terms previously in effect, subject to
retroactive adjustment when successor rates and terms for
such services are established.
(4) Interim proceedings.--Notwithstanding subsection (a),
as soon as practicable after the date of enactment of this
Act, the Copyright Royalty Judges or interim Copyright
Royalty Judges shall publish the notice described in section
803(b)(1)(A) of title 17, United States Code, as amended by
this Act, to initiate a proceeding to establish or adjust
rates and terms for the statutory licenses under section
114(f)(2) or 112(e) of title 17, United States Code, for new
subscription services and eligible nonsubscription services
for the period commencing January 1, 2006. The Copyright
Royalty Judges or Interim Copyright Royalty Judges are
authorized to cause that proceeding to take place as provided
in subsection (b) of section 803 of that title within the
time periods set forth in that subsection. Notwithstanding
section 803(c)(1) of that title, the Copyright Royalty Judges
shall not be required to issue their determination in that
proceeding before the expiration of the statutory rates and
terms in effect on December 31, 2004.
(c) Existing Appropriations.--Any funds made available in
an appropriations Act to carry out chapter 8 of title 17,
United States Code, shall be available to the extent
necessary to carry out this section.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from California (Mr.
Berman) each will control 20 minutes.
The Chair recognizes the gentleman from Wisconsin (Mr.
Sensenbrenner).
General Leave
Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on the bill, H.R. 1417,
currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in strong support of H.R. 1417, legislation to
reform the rate-making and royalty distribution system for compulsory
and statutory licenses. The House passed its version of the bill on
March 3 of this year by a vote of 406 to nothing. The other body
subsequently passed H.R. 1417 on October 6 with certain amendments
incorporated into a committee substitute. These changes are acceptable
to both the majority and minority members of our committee with the
adoption of the enrolling resolution just considered.
Mr. Speaker, with the adoption of the three copyright compulsory
licenses in 1976, Congress contemplated the need for an administrative
body charged with periodically adjusting the rates as well as
distributing royalties under the respective licenses. The resulting
entity was the Copyright Royalty Tribunal or CRT.
Over the next 17 years, however, CRTs were roundly criticized,
prompting Congress to reassess the rate-making and royalty distribution
construct. This deliberation produced the current system in 1993 that
features copyright royalty arbitration panels or CARPs. Eleven years
later we are seeking further improvements in response to existing
deficiencies in the CARP system.
Among other things, H.R. 1417 addresses the uniform complaint that
CARP decisions are unpredictable and inconsistent. This is generally
accomplished by changing the structure from one featuring ad hoc
arbitration panels to one comprised of three permanent copyright
royalty judges or CRJs. To justify the need for these full-time judges
and to alleviate overwhelming workloads associated with multiple
proceedings that occur simultaneously, the bill staggers the timing
during which individual proceedings can be adjudicated.
The bill also addresses the complaint that the process is
unnecessarily expensive by eliminating the costs of the arbitrators
upon private parties and by creating a specific process to give small
claimants a more balanced ability to participate. The bill discourages
persons or entities from disrupting the process at the 11th hour by
requiring potential participants to show that they have a significant
interest in the proceedings. In furtherance of marketplace
negotiations, the measure establishes a cooling-off period during which
time parties are to focus on reaching their own agreements.
Mr. Speaker, the amendments adopted by the other body that require
our further consideration of the bill today concern the scope of
discovery in the role of the copyright office under the new construct.
Briefly, the original House version created greater open-ended
discovery of relevant material information over a 60-day period. The
changes adopted by the other body make it more difficult for a
participant to acquire documents and materials other than statements
made by stakeholders and witnesses. In addition, another revision
specifically limits the number of interrogatories and depositions that
each participant may seek. Both of these changes are consistent with
the current trend in administrative law that pares the discovery
process. This will save participants time and money.
In addition, the other body strengthened the role of the copyright
offices relative to the CRJs. This represents a policy preference that
deviates somewhat from the House bill which conferred greater autonomy
upon the CRJs to make independent decisions.
{time} 1715
I am nonetheless satisfied that the changes adopted were born of a
legitimate concern that the proceedings would be fairer and more
predictable if the Copyright Office retained plenary authority to offer
guidance regarding copyright law. This is especially important when
novel questions of law arise.
Mr. Speaker, H.R. 1417 was painstakingly negotiated amongst the
various congressional, executive, and industry stakeholders. We have
worked in a bipartisan manner and developed a consensus product over a
3-year period that will effectively address an arcane, but important,
matter. I urge the adoption of the bill.
Mr. Speaker, I reserve the balance of my time.
Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H.R. 1417. The House passed
a substantially identical version of this bill by a vote of 406 to zero
on March 3. After making a number of amendments, the Senate passed H.R.
1417 on October 6 by unanimous consent. I think it is safe to say this
bill is noncontroversial, and I ask all of my colleagues to once again
support it.
Certainly, my colleagues should be aware that the Senate amendments
do make some significant changes to the bill as passed by the House.
However, I believe those changes are noncontroversial. Further, our
passage of Senate Concurrent Resolution 145 just minutes ago ensures
that H.R. 1417 will now work as intended.
Since H.R. 1417 already passed the House unanimously, I will spare my
colleagues a detailed explanation of the provisions with which they are
already familiar. In summary, H.R. 1417 significantly reforms the
Copyright Arbitration Royalty Panel, or CARP, system. CARPs establish
the rates, terms, and distribution of royalties generated by the half
dozen statutory licenses that require copyright owners to make their
works available to certain users under government-set rates and terms.
There is widespread agreement that the CARP process is broken, and H.R.
1417 is designed to remedy its defects.
After House passage in March, the Senate gave full consideration to
H.R. 1417. Following a September markup before the Senate Committee on
the Judiciary, the Senate passed its own amendments to H.R. 1417. These
amendments largely leave intact the substance and structure of H.R.
1417. Rather than make wholesale changes, the Senate has made a number
of focused amendments to several provisions of the House-passed bill.
Many of
[[Page H9857]]
these changes are distinctive improvements to which I can give my
wholehearted support. Others may not reflect the exact policy choices I
would prefer, but are still acceptable in the context of this bill.
Perhaps the most significant changes made by the Senate amendments
involve the interplay between the new Copyright Royalty Judges and the
Copyright Office. The Senate opted to give the CRJs less autonomy and
independence from the Copyright Office. For instance, the Senate
amendments give the Copyright Office the right to review for legal
errors CRJ interpretations of the Copyright Act. Further, the Senate
amendments require the CRJs to obtain Copyright Office approval before
correcting clerical technical errors in their issued determinations.
While I reserve the right to revisit some of these changes in future
legislation, I do not think they should prove fatal to the bill before
us today.
Another major change implemented by the Senate amendments to H.R.
1417 involves the discovery process that will be utilized in rate-
making proceedings. In essence, the Senate amendments more severely
limit the discovery that will be available to participants in rate-
making proceedings. To my mind, these amendments represent a
significant improvement over the analogous provisions in the House-
passed version of H.R. 1417. These changes will further reduce the cost
of participation in rate-making proceedings and thus advance one of the
fundamental goals of H.R. 1417. I commend the Senate for making these
improvements.
In addition, the Senate amendments altered to a certain degree the
ability of affected parties to object to negotiated settlements of
royalty rates. In essence, the Senate amendments give all parties bound
by proposed rates the ability to comment, but only allows participants
in a proceeding to actually object to the proposed rates.
The Senate amendments also make a number of other changes; but as
they are primarily technical, they do not merit discussion in the full
House.
In conclusion, Mr. Speaker, I think H.R. 1417, as corrected by Senate
Concurrent Resolution 145, will substantially improve the CARP process,
and I ask my colleagues to support it.
Mr. Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield such time as he may consume
to the gentleman from Texas (Mr. Smith), the chairman of the
subcommittee.
Mr. SMITH of Texas. Mr. Speaker, I thank the chairman of the
Committee on the Judiciary, the gentleman from Wisconsin (Mr.
Sensenbrenner), for yielding me this time.
Mr. Speaker, H.R. 1417 passed the House unanimously in March. The
bill before us today reflects noncontroversial amendments added by the
Senate.
As the gentleman from Wisconsin (Chairman Sensenbrenner) indicated,
the Senate included some inadvertent, but serious, drafting errors when
it passed the bill with these amendments in October. It is now
necessary to adopt a concurrent resolution that reflects the fixes to
those errors.
The Senate passed this resolution yesterday.
H.R. 1417 is a bipartisan effort to reform the process of copyright
royalty rate-making and distribution in a way that is fair to all
participants. It is important to the artists, songwriters, music
publishers, and webcasters caught in a long, laborious, and costly
royalty system. It will provide an incentive for the creation and
distribution of content.
The copyright royalty rate-making and distribution process is one of
the most complicated and arcane areas of our legal system, but it
affects an expansive universe of people and industries.
This bill addresses two complaints about the current system: cost and
lack of stability and accountability.
Work on reforms to this system has been a long and tough process over
the past 3 years. I would like to thank the gentleman from Wisconsin
(Chairman Sensenbrenner) and the gentleman from Michigan (Ranking
Member Conyers) and the gentleman from California (Ranking Member
Berman) for their commitment to the process.
This legislation is necessary to ensure an efficient and effective
system for copyright royalties.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. BERMAN. Mr. Speaker, I yield such time as he may consume to the
gentleman from Michigan (Mr. Conyers), the ranking member of the
Committee on the Judiciary.
Mr. CONYERS. Mr. Speaker, I rise only to congratulate the House
leadership of the Committee on the Judiciary for the really tireless
efforts that they brought to the negotiation process to get us to where
we are. We have come a considerable way, and I want to start out by
thanking our ranking member on the subcommittee, who has been
absolutely brilliant in negotiating with the other side, and our
chairman and subcommittee chairman as well.
Mr. BERMAN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I thank the gentleman from Michigan (Ranking Member
Conyers) for those comments. But in all fairness, I have to thank the
staff of the committee on both sides of the aisle here who deserve
great appreciation because this may not be interesting, but it is
complicated, and they spent dozens and perhaps hundreds of hours
working through the details of what I think is actually a very
significant reform of a process that is very important for a select
group of people.
Mr. Speaker, I yield back the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Stearns). The question is on the motion
offered by the gentleman from Wisconsin (Mr. Sensenbrenner) that the
House suspend the rules and concur in the Senate amendment to the bill,
H.R. 1417.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. SENSENBRENNER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
____________________