[Congressional Record (Bound Edition), Volume 150 (2004), Part 17]
[Senate]
[Pages 23832-23842]
[From the U.S. 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

[[Page 23833]]

     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
       ``(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

[[Page 23834]]

     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 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.

[[Page 23835]]

       ``(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 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

[[Page 23836]]

     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 
     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.

[[Page 23837]]

       ``(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 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

[[Page 23838]]

     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
       (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

[[Page 23839]]

     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 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.

[[Page 23840]]

       ``(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 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

[[Page 23841]]

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 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,

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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.

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