[Federal Register Volume 61, Number 57 (Friday, March 22, 1996)]
[Notices]
[Pages 11896-11897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7027]



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LIBRARY OF CONGRESS

Copyright Office
[Docket No. 96-2 CARP-CRA]


Adjustment of Cable Compulsory License Royalty Rates

AGENCY: Copyright Office, Library of Congress.

ACTION: Announcement of negotiation period; filing Notice of Intent to 
Participate.

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SUMMARY: The Copyright Office of the Library of Congress is announcing 
the 30-day negotiation period to allow interested parties to the cable 
rate adjustment proceeding to settle their differences. The Office is 
also announcing, in the event that settlement negotiations are 
unsuccessful, the date by which parties wishing to participate in the 
rate adjustment proceeding before a Copyright Arbitration Royalty Panel 
(CARP) must file their Notice of Intent to Participate.

EFFECTIVE DATES: The 30-day negotiation period begins on April 15, 
1996, and ends on May 15, 1996. Notices of Intent to Participate are 
due no later than May 20, 1996.

ADDRESSES: If sent by mail, an original and five copies of the Notice 
of Intent to Participate should be addressed to: Copyright Arbitration 
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 
20024. If hand delivered, an original and five copies of the Notice of 
Intent to Participate should be brought to: Office of the Copyright 
General Counsel, James Madison Memorial Building, Room 407, First and 
Independence Avenue, S.E., Washington, DC 20540.

FOR FURTHER INFORMATION CONTACT: Marilyn Kretsinger, Acting General 
Counsel, or William Roberts, Senior Attorney, Copyright Arbitration 
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 
20024. Telephone (202) 707-8380. Telefax (202) 707-8366.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 111 of the Copyright Act, 17 U.S.C., grants a compulsory 
copyright license to cable television systems for the retransmission of 
over-the-air broadcast stations to their subscribers. In exchange for 
the license, cable operators submit royalty payments, along with 
statements of account detailing their retransmissions, to the Copyright 
Office on a semi-annual basis. The Office then deposits the royalties 
with the United States Treasury for later distribution to copyright 
owners of broadcast programming. Royalties collected by the Office in 
recent years for the cable compulsory license have amounted to 
approximately $175 million annually.
    A cable system calculates its royalty payments in accordance with 
the statutory formula described in 17 U.S.C 111(d). The cable system 
then makes a payment based upon its gross receipts from subscribers for 
the retransmission of broadcast signals. Section 111(d) subdivides 
cable systems, based on the amount of their gross receipts, into three 
categories: small, medium and large. Small systems pay a fixed amount 
without regard to the number of broadcast signals they retransmit, 
while medium-sized systems pay a royalty within a specified range, with 
a maximum amount, based on the number of signals they retransmit. Large 
cable systems calculate their royalties according to the number of 
distant broadcast signals which they retransmit to their 
subscribers.1 Under this formula, a large cable system is required 
to pay a specified percentage of its gross receipts for each distant 
signal that it retransmits.

    \1\ For cable systems which retransmit only local broadcast 
signals, there is still a minimum royalty fee which must be paid. 
This minimum fee is not applied, however, once the cable system 
carries one or more distant signals.
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    Congress established the gross receipts limitations that determine 
a cable system's size, and provided the gross receipts percentages 
(rates) for distant signals. 17 U.S.C. 111(d)(1). It also provided for 
adjustment of both the gross receipts limitations and the distant 
signal rates. 17 U.S.C 801(b)(2). The limitations and rates can be 
adjusted to reflect national monetary inflation, changes in the average 
rates charged by cable systems for retransmission of broadcast signals, 
or changes in certain cable rules of the Federal Communications 
Commission in effect on April 15, 1976. 17 U.S.C. 801(b)(2) (A), (B), 
(C) and (D). Prior rate adjustments of the Copyright Royalty Tribunal 
(CRT) made under section 801(b)(2) (B) and (C) may also be reconsidered 
at five year intervals. 17 U.S.C. 803(b). The current gross receipts 
limitations and rates are set forth in 37 CFR 256.2. Originally, the 
CRT performed the rate adjustment, but in 1993, Congress abolished the 
CRT and vested the rate adjustment authority in the Copyright 
Arbitration Royalty Panels (CARPs) as administered by the Library of 
Congress and the Copyright Office.
    Section 803 of the Copyright Act, 17 U.S.C., provides that the 
gross receipts limitations and rates of the cable compulsory license 
may be adjusted in 1995, and every subsequent fifth calendar year, upon 
filing a petition with the Library of Congress requesting an adjustment 
during these window years. If the Library determines that the 
petitioner has a ``significant interest'' in the royalty rate or rates 
in which adjustment is requested, the Library must convene a CARP to 
determine the adjustment. 17 U.S.C. 803(a)(1). Section 251.63 of the 
Library's rules provides that ``[t]o allow time for the parties to 
settle their differences regarding rate adjustments, the Librarian of 
Congress shall * * * designate a 30-day period for consideration of 
their settlement. The Librarian shall cause notice of the dates for 
that period to be published in the Federal Register.'' 37 CFR 251.63.

II. Petitions

    Last year was a window year for filing cable rate adjustment 
petitions and the Copyright Office received two such petitions on 
December 29, 1995. The first, filed by the National Cable

[[Page 11897]]
Television Association, Inc. (``NCTA'') on behalf of its member cable 
companies, requests an upward adjustment of the gross receipts 
limitations to reflect national monetary inflation, and a downward 
adjustment of ``the rates currently specified in 37 CFR 256.2 (c) and 
(d)(the ``3.75 percent'' rate and the ``syndex surcharge'').'' NCTA 
petition at 1. NCTA asserts that it has a ``significant interest'' in 
the proposed adjustments as the trade association of cable systems 
serving over 80 percent of all cable subscribers. Id. at 1-2.
    The second petition was filed by Program Suppliers, Joint Sports 
Claimants, the National Association of Broadcasters, Music Claimants 
(the American Society of Composers, Authors and Publishers, Broadcast 
Music, Inc., and SESAC, Inc.), Canadian Claimants, Devotional 
Claimants, the Public Broadcasting Service and National Public Radio 
(collectively, the ``Copyright Owners''). The Copyright Owners request 
an upward adjustment of the rates specified in 37 C.F.R. 256.2, and 
claim that they have a ``significant interest'' in such adjustment as 
representatives of the major claimant categories entitled to 
distribution of cable royalty funds. Copyright Owners' petition at 1.

III. Negotiation Period and Notices of Intent to Participate

    As discussed above, the Library of Congress rules provide a 30-day 
negotiation period prior to the filing of rate adjustment petitions to 
enable the parties to settle their differences. 37 C.F.R. 251.63(a). In 
accordance with this rule, the Library is designating the thirty day 
period to commence on April 15, 1996, and close on May 15, 1996. If 
settlement is not reached during this time period, those parties 
wishing to participate in a rate adjustment proceeding before a CARP 
must file a Notice of Intent to Participate no later than close of 
business on May 20, 1996. Failure to file a timely Notice of Intent to 
Participate will preclude a party from participating in the proceeding.

    Dated: March 18, 1996.
Marybeth Peters,
Register of Copyrights.
    Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 96-7027 Filed 3-21-96; 8:45 am]
BILLING CODE 1410-33-P