[Federal Register Volume 63, Number 9 (Wednesday, January 14, 1998)]
[Rules and Regulations]
[Pages 2142-2146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-819]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 253

[Docket No. 96-6 CARP NCBRA]


Noncommercial Educational Broadcasting Compulsory License

AGENCY: Copyright Office, Library of Congress.


[[Page 2143]]


ACTION: Final rule.

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SUMMARY: The Copyright Office of the Library of Congress is announcing 
the adoption of final rules governing the terms and rates of copyright 
royalty payments with respect to certain uses by public broadcasting 
entities of published nondramatic musical works, and published 
pictorial, graphic, and sculptural works.

EFFECTIVE DATE: January 1, 1998.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
Tanya M. Sandros, Attorney Advisor, Copyright Arbitration Royalty Panel 
(CARP), P.O. Box 70977, Southwest Station, Washington, D.C. 20024. 
Telephone (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 118 of the Copyright Act, 17 U.S.C., creates a compulsory 
license for the use of published nondramatic musical works and 
published pictorial, graphic, and sculptural works in connection with 
noncommercial broadcasting. Terms and rates for this compulsory 
license, applicable to parties who are not subject to privately 
negotiated licenses, are published in 37 CFR part 253 and are subject 
to adjustment at five year intervals. 17 U.S.C. 118(c). The last 
adjustment of the terms and rates for the section 118 license occurred 
in 1992, making 1997 a window year for the adjustment of these terms 
and rates. 57 FR 60954 (December 22, 1992).
    Section 118(b) provides that any copyright owner and any public 
broadcasting entity may negotiate the rates and terms for the 
compulsory license, or in the absence of a negotiated license,

the Librarian of Congress shall, pursuant to Chapter 8, convene a 
copyright arbitration royalty panel 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 Librarian of Congress * * *

    Interested parties who submit proposals for adjusting the terms and 
rates for the section 118 license directly to the Librarian of Congress 
may petition the Librarian to submit these proposals to a public notice 
and comment proceeding, whereby copyright owners and users that would 
be affected by the proposals are given the opportunity to challenge 
them. 37 CFR 251.63. Any party who objects to the proposed terms and 
rates must submit, in turn, their challenges by a date certain, and 
must be willing to participate in the Copyright Arbitration Royalty 
Panel (CARP) proceeding adjusting the section 118 terms and rates. If 
no challenges are received, or if challenges are received by an 
interested party who will not participate in a CARP proceeding, the 
Librarian may adopt the terms and rates of the proposals.
    Accordingly, interested copyright owners and users of these works 
may file either a voluntary agreement or a joint proposal outlining the 
adjustments to the terms and rates for the section 118 license; or in 
the case of unaffiliated copyright owners,1 the users may 
submit their proposals for the adjustment of the terms and rates of the 
section 118 license directly to the Librarian of Congress. See 62 FR 
51619 (October 2, 1997) and 62 FR 63502 (December 1, 1997). A joint 
proposal differs significantly from a voluntary settlement. The parties 
to a voluntary agreement represent all persons who would be affected by 
the agreement and the parties have the authority to bind their members. 
In a joint proposal, the parties to the agreement do not represent all 
persons who would be affected by the agreement, or if they do, at least 
one of the parties does not have the authority to bind its members.
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    \1\  An unaffiliated copyright owner is one whose interests are 
not represented by a performing rights society, or by any other 
organization participating in the proceeding.
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II. This Proceeding

    The Office commenced the process for adjusting the section 118 
rates and terms with the publication of a Federal Register notice 
announcing a negotiation period during which interested parties could 
negotiate voluntary license agreements that are ``given effect in lieu 
of any determination by the Librarian of Congress: Provided, That 
copies of such agreements are filed in the Copyright Office within 
thirty days of execution.'' 17 U.S.C. 118(b)(2). The notice also 
requested comment on the need for a CARP to set the rates and terms, in 
addition to setting a precontroversy discovery schedule and an 
initiation date for the CARP. 61 FR 54459 (October 18, 1996).
    On November 11, 1996, the National Public Radio, the Public 
Broadcasting Service, the American Society of Composers, Authors and 
Publishers (ASCAP), Broadcast Music, Inc. (BMI), SESAC, Inc., the 
National Music Publishers Association, Inc. (NMPA), and the Harry Fox 
Agency, Inc. filed notices of intent to participate. On June 19, 1997, 
the National Religious Broadcasters Music License Committee requested 
leave to file its notice of intent to participate after the deadline 
for making this filing had passed. The Register granted its motion and 
accepted the filing. Order in Docket No. 96-6 CARP NCBRA (July 30, 
1997). Two additional parties, The American Council on Education and 
The National Federation of Community Broadcasters, did not file notices 
of intent to participate, although they participated in the 
negotiations of certain rates and terms of interest to their members.
    Upon the request of the parties, the Office vacated the schedule 
set in the October 18, 1996, order in order to allow the parties more 
time to negotiate the rates and terms for the section 118 compulsory 
license. In July 1997, however, the parties informed the Office that 
the negotiations had been unproductive and identified the need to 
convene a CARP to set reasonable terms and rates. At this time, the 
Office set a new schedule for the 45-day precontroversy discovery 
period, including a date for submitting proposals for the payment of 
royalties to unaffiliated copyright owners and a date for initiating 
the CARP. Order in Docket No. 96-6 CARP NCBRA (July 30, 1997).
    In accordance with the new schedule, the National Religious 
Broadcasters Music License Committee (NRBMLC), the Public Broadcasting 
Service, and the National Public Radio filed proposed rates and terms 
for the payment of royalty fees to unaffiliated copyright owners on 
September 2, 1997. Subsequently, on October 1, 1997, the parties filed 
additional joint proposals for further adjusting the rates and terms of 
the section 118 compulsory license and notices of settlement. The only 
terms and rates not addressed in proposed regulations or a joint 
settlement concern the terms and rates relating to the performance of 
musical compositions in the repertories of ASCAP and BMI by PBS and 
NPR. 2
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    \2\ The Office shall convene a CARP to determine the appropriate 
rates and terms in this instance. See Order in Docket No. 96-4 CARP 
NCBRA (July 30, 1997). Currently, these parties are engaged in 
precontroversy discovery.
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    The Office has published all the proposed rates and terms in the 
Federal Register for public review and comment, pursuant to 37 CFR 
251.63. 62 FR 51619 (October 2, 1997) and 62 FR 63502 (December 1, 
1997). The December 1, 1997, notice announced that the proposed 
regulations would become final on January 1, 1998, unless an interested 
party filed a challenge to

[[Page 2144]]

the proposed regulations and a Notice of Intent to Participate in a 
CARP proceeding, on or before December 29, 1997. 62 FR 63502 (December 
1, 1997). See also 62 FR 65777 (December 16, 1997) (correction notice 
clarifying the filing dates).
    The proposed regulations, however, did not include the 1998 rates 
for the use of published nondramatic musical compositions in the 
repertories of ASCAP and BMI by public broadcasting entities licensed 
to colleges, universities and other nonprofit educational institutions 
not affiliated with National Public Radio. In their direct cases, ASCAP 
and BMI proposed that the 1998 rate should be the current rate adjusted 
for a cost of living increase, according to the methodology adopted by 
the former Copyright Royalty Tribunal in the 1987 rate adjustment 
proceeding. 52 FR 49010 (December 29, 1987). The Office stated in the 
December 1, 1997, notice that it would publish these rates in the final 
regulations.
    The Copyright Office has received no comments or Notices of Intent 
to Participate in a CARP proceeding in response to its notices 
announcing the proposed regulations for adjusting certain rates and 
terms of the noncommercial educational broadcasting compulsory license. 
Therefore, the Office announces the adoption of the proposed 
regulations published on December 1, 1997, as final regulations, 
including the rate for the performance of musical compositions in the 
ASCAP and BMI repertories by public broadcasting entities licensed to 
colleges and universities.
    The Office has calculated these rates based on a 2.1% change in the 
Consumer Price Index (CPI), during the period between the first CPI 
subsequent to December 1, 1996, and the last CPI published prior to the 
December 1, 1997. (1996's figure was 158.3; 1997's figure was 161.6, 
based on 1982-1984 equaling 100). Rounding off to the nearest dollar, 
the adjustment in the royalty rate for the use of musical compositions 
in the repertory of ASCAP and BMI is $222. The rate for the use of 
musical works in the SESAC repertory, which in subsequent years will be 
adjusted in a like manner, was set at $60 in the joint proposal 
submitted by SESAC and the American Council on Education and included 
in the proposed regulations at 37 CFR 253.5(c)(3).

Regulatory Flexibility Act

    Consistent with the requirements of the Regulatory Flexibility Act, 
the Copyright Office has considered the effect of this final regulation 
on small businesses and has determined that it will have no significant 
impact. The Copyright Act creates a compulsory license for the use of 
published nondramatic musical works and published pictorial, graphic, 
and sculptural works in connection with noncommercial broadcasting. The 
purpose of such compulsory license is to allow any business small or 
large to make use of the compulsory license instead of privately 
negotiating rates and terms. Reliance on the compulsory license saves 
time, effort, and expense.
    The rates and terms of such compulsory license are subject to 
adjustment at five year intervals. The last setting of terms and rates 
was published in the Federal Register in 1992. The Office initiated the 
process for adjusting rates and terms on October 18, 1996, by 
announcing a negotiation period. The law requires the Office to convene 
a Copyright Arbitration Royalty Panel (CARP) if the parties do not 
agree upon the rates and terms. The Office vacated the original 
schedule in order to allow the parties more time to negotiate the rates 
and terms for the section 118 compulsory license. All announcements 
that affected the parties were published both in the Federal Register 
and online (http://lcwebs.loc.gov/copyright). At the conclusion of the 
negotiation period, the rates and terms were agreed upon by the parties 
except in one area which does not affect any small business. The 
businesses which did not reach agreement are all dominant in their 
field of operation.

List of Subjects in 37 CFR Part 253

    Copyright, Music, Radio, Television.

Final Regulations

    For the reasons set forth in the preamble, the Library amends 37 
CFR part 253 as follows:

PART 253--USE OF CERTAIN COPYRIGHTED WORKS IN CONNECTION WITH 
NONCOMMERCIAL EDUCATIONAL BROADCASTING

    1. The authority citation for part 253 continues to read as 
follows:

    Authority: 17 U.S.C. 118, 801(b)(1) and 803.


Sec. 253.1  [Amended]

    2. The first sentence of Sec. 253.1 is amended to remove the year 
dates ``1993'' and ``1997'' and to add in their place ``1998'' and 
``2002'', respectively.
    3. Section 253.4 is amended by revising the introductory text, 
paragraphs (a)(1) through (8), and the last sentence of paragraph (c) 
to read as follows:


Sec. 253.4  Performance of musical compositions by PBS, NPR and other 
public broadcasting entities engaged in the activities set forth in 17 
U.S.C. 118(d).

    The following schedule of rates and terms shall apply to the 
performance by PBS, NPR and other public broadcasting entities engaged 
in activities set forth in 17 U.S.C. 118(d) of copyrighted published 
nondramatic musical compositions, except for public broadcasting 
entities covered by Secs. 253.5 and 253.6, and except for compositions 
which are the subject of voluntary license agreements, or compositions 
in the repertories of ASCAP, BMI or SESAC which are licensed on terms 
and conditions established by a duly empowered Copyright Arbitration 
Royalty Panel pursuant to the procedures set forth in subchapter B of 
37 CFR, part 251.
    (a) Determination of royalty rates. (1) For the performance of such 
a work in a feature presentation of PBS:

1998-2002..................................................      $211.53
                                                                        

    (2) For the performance of such a work as background or theme music 
in a PBS program:

1998-2002..................................................       $53.59
                                                                        

    (3) For the performance of such a work in a feature presentation of 
a station of PBS:

1998-2002..................................................       $18.08
                                                                        

    (4) For the performance of such a work as background or theme music 
in a program of a station of PBS:

1998-2002..................................................        $3.81
                                                                        

    (5) For the performance of such a work in a feature presentation of 
NPR:

1998-2002..................................................       $21.44
                                                                        

    (6) For the performance of such a work as background or theme music 
in an NPR program:

1998-2002..................................................        $5.20
                                                                        

    (7) For the performance of such a work in a feature presentation of 
a station of NPR:

1998-2002..................................................        $1.52
                                                                        

    (8) For the performance of such work as background or theme music 
in a program of a station of NPR:

1998-2002..................................................         $.54
                                                                        

* * * * *
    (c) * * * Any local PBS and NPR station that shall be required by 
the provisions of any voluntary license agreement with ASCAP or BMI 
covering

[[Page 2145]]

the license period January 1, 1998, to December 31, 2002, to prepare a 
music use report shall, upon request of a copyright owner who believes 
a musical composition of such owner has been performed under the terms 
of this schedule, permit such copyright owner to examine the report.
* * * * *
    4. In Sec. 253.5, paragraphs (c) (1) through (3) are revised to 
read as follows:


Sec. 253.5  Performance of musical compositions by public broadcasting 
entities licensed to colleges and universities.

* * * * *
    (c) * * *
    (1) For all such compositions in the repertory of ASCAP, $222 
annually.
    (2) For all such compositions in the repertory of BMI, $222 
annually.
    (3) For all such compositions in the repertory of SESAC, $60 
annually.
* * * * *
    5. In Sec. 253.6, paragraph (c) is revised to read as follows:


Sec. 253.6  Performance of musical compositions by other public 
broadcasting entities.

* * * * *
    (c) Royalty rate. A public broadcasting entity within the scope of 
this section may perform published nondramatic musical compositions 
subject to the following schedule of royalty rates:
    (1) For all such compositions in the repertory of ASCAP, in 1998, 
$375; in 1999, $390; in 2000, $405; in 2001, $420; in 2002, $440.
    (2) For all such compositions in the repertory of BMI, in 1998, 
$375; in 1999, $390; in 2000, $405; in 2001, $420; in 2002, $440.
    (3) For all such compositions in the repertory of SESAC, in 1998, 
$78; in 1999, $82; in 2000, $86; in 2001, $89; in 2002, $92.
    (4) For the performance of any other such compositions, in 1998 
through 2002, $1.
* * * * *
    6. Section 253.7 is amended by revising paragraph (a); revising the 
schedules in paragraphs (b)(1) (i) and (ii), (b)(2) and (b)(4); and 
revising the last sentence of paragraph (b)(5) to read as follows:


Sec. 253.7  Recording Rights, Rates and Terms.

    (a) Scope. This section establishes rates and terms for the 
recording of nondramatic performances and displays of musical works, 
other than compositions subject to voluntary license agreements, or 
compositions represented by the Harry Fox Agency, Inc., SESAC, and/or 
the National Music Publishers Association and which are licensed on 
terms and conditions established by a duly empowered Copyright 
Arbitration Royalty Panel pursuant to the procedures set forth in this 
subchapter, on and for the radio and television programs of public 
broadcasting entities, whether or not in synchronization or timed 
relationship with the visual or aural content, and for the making, 
reproduction, and distribution of copies and phonorecords of public 
broadcasting programs containing such nondramatic performances and 
displays of musical works solely for the purpose of transmission by 
public broadcasting entities. The rates and terms established in this 
schedule include the making of the reproductions described in 17 U.S.C. 
118(d)(3).
    (b) * * *
    (1) * * *
    (i) * * *

                                                               1998-2002
Feature....................................................      $106.04
Concert feature (per minute)...............................        31.84
Background.................................................        53.59
Theme:                                                                  
  Single program or first series program...................        53.59
  Other series program.....................................        21.75
                                                                        

    (ii) * * *

                                                               1998-2002
Feature....................................................        $8.76
Concert feature (per minute)...............................         2.30
Background.................................................         3.81
Theme:                                                                  
  Single program or first series program...................         3.81
  Other series program.....................................         1.52
                                                                        

* * * * *
    (2) * * *

                                                               1998-2002
Feature....................................................       $11.48
Concert feature (per half hour)............................        16.85
Background.................................................         5.75
Theme:                                                                  
  Single program or first series program...................         5.75
  Other series program.....................................         2.29
                                                                        

* * * * *
    (4) * * *

                                                               1998-2002
Feature....................................................         $.74
Feature (concert)(per half hour)...........................         1.54
Background.................................................          .37
                                                                        

    (5) * * * Such succeeding uses which are subsequent to December 31, 
2002, shall be subject to the royalty rates established in this 
schedule.
* * * * *
    7. In Sec. 253.8, paragraph (b)(1) and the last sentence of 
paragraph (f)(1) are revised as follows ( the undesignated paragraph 
following paragraph (b)(1) is unchanged):


Sec. 253.8  Terms and rates of royalty payments for the use of 
published pictorial, graphic and sculptural works.

* * * * *
    (b) Royalty rate. (1) The following schedule of rates shall apply 
to the use of works within the scope of this section:
    (i) For such uses in a PBS-distributed program:
    (A) For a featured display of a work.

1998-2002..................................................      $64.78]
                                                                        

    (B) For background and montage display.

1998-2002..................................................       $31.59
                                                                        

    (C) For use of a work for program identification or for thematic 
use.

1998-2002..................................................      $127.71
                                                                        

    (D) For the display of an art reproduction copyrighted separately 
from the work of fine art from which the work was reproduced, 
irrespective of whether the reproduced work of fine art is copyrighted 
so as to be subject also to payment of a display fee under the terms of 
the schedule.

1998-2002..................................................       $41.95
                                                                        

    (ii) For such uses in other than PBS-distributed programs:
    (A) For featured display of a work.

1998-2002..................................................       $41.95
                                                                        

    (B) For background and montage display.

1998-2002..................................................       $21.51
                                                                        

    (C) For use of a work for program identification or for thematic 
use.

1998-2002..................................................       $85.76
                                                                        

    (D) For the display of an art reproduction copyrighted separately 
from the work of fine art from which the work was reproduced, 
irrespective of whether the semin reproduced work of fine art is 
copyrighted so as to be subject also to payment of a display fee under 
the terms of this schedule.

1998-2002..................................................       $21.51
                                                                        

* * * * *
    (f) Terms of use. (1) * * * Such succeeding uses which are 
subsequent to December 31, 2002, shall be subject to the rates 
established in this schedule.
* * * * *
    8. In Sec. 253.10, the first sentence of paragraph (a) is revised 
to read as follows:


Sec. 253.10  Cost of living adjustment.

    (a) On December 1, 1998, the Librarian of Congress shall publish in

[[Page 2146]]

the Federal Register a notice of the change in the cost of living as 
determined by the Consumer Price Index (all consumers, all items) 
during the period from the most recent Index published prior to 
December 1, 1997, to the most recent Index published prior to December 
1, 1998.
* * * * *
    Dated: January 6, 1998.
David O. Carson,
General Counsel.

    Approved by.
James H. Billington,
The Librarian of Congress.
[FR Doc. 98-819 Filed 1-13-98; 8:45 am]
BILLING CODE 1410-33-P