[Federal Register Volume 64, Number 149 (Wednesday, August 4, 1999)]
[Proposed Rules]
[Pages 42316-42317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19988]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 99-5]


Notice and Recordkeeping for Subscription Digital Transmissions

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Copyright Office of the Library of Congress is proposing 
to amend the regulation that requires the filing of an initial notice 
of digital transmissions of sound recordings under statutory license 
with the Copyright Office to adjust for changes brought about by the 
passage of the Digital Millennium Copyright Act of 1998.

DATES: Comments are due September 3, 1999.

ADDRESSES: An original and ten copies of the comments shall be 
delivered to: Office of General Counsel, Copyright Office, LM-403, 
James Madison Memorial Building, 101 Independence Avenue, S.E., 
Washington, D.C. 20559-6000, or mailed to: David O. Carson, General 
Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station, 
Washington, D.C. 20024.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
Tanya M. Sandros, Attorney Advisor, Copyright GC/I&R, P.O. Box 70400, 
Southwest Station, Washington, D.C. 20024. Telephone: (202) 707-8380. 
Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

Background

    On November 1, 1995, Congress enacted the Digital Performance Act 
in Sound Recordings Act of 1995 (``DPRA''), Public Law 104-39, 109 
Stat. 336 (1995). The DPRA gave to sound recording copyright owners an 
exclusive right to perform their works publicly by means of a digital 
audio transmission. 17 U.S.C. 106(6). The new right, however, was 
subject to certain limitations, including exemptions for certain 
digital transmissions, 17 U.S.C. 114(d)(1), and the creation of a 
statutory license for nonexempt digital subscription services. 17 
U.S.C. 114(d)(2).
    The statutory license requires adherence to regulations under which 
copyright owners may receive reasonable notice of use of their sound 
recordings under the statutory license, and under which entities 
performing the sound recordings shall keep and make available records 
of such use. 17 U.S.C. 114(f)(2). On May 13, 1996, the Copyright Office 
initiated a rulemaking proceeding to promulgate regulations to govern 
the notice and recordkeeping requirements. 61 FR 22004 (May 13, 1996). 
This rulemaking concluded with the issuance of interim rules to govern 
the filing of an initial notice of digital transmissions of sound 
recordings under statutory license, 37 CFR 201.35, and the filing of 
reports of use of sound recordings under statutory license, 37 CFR 
201.36. See 63 FR 34289 (June 24, 1998).
    At the time these regulations were announced, only three 
noninteractive, nonsubscription, digital transmissions services (DMX, 
Inc., Digital Cable Radio Associates/Music Choice, and Muzak, Inc.) 
were in operation and considered eligible for the license. 
Consequently, the Office prescribed a period for filing initial notices 
such that all existing services, which were already operating in 
accordance with the section 114 license, had to submit their notices 
within 45 days of the effective date of the regulation. Section 
201.35(f) reads, in part, as follows: ``A Service shall file the 
Initial Notice with the Licensing Division of the Copyright Office 
prior to the first transmission of sound

[[Page 42317]]

recordings under the license, or within 45 days of the effective date 
of this regulation.'' (Emphasis added).
    Subsequently, the President signed into law the Digital Millennium 
Copyright Act of 1998 (``DMCA''). Among other things, the DMCA expanded 
the section 114 compulsory license to allow a nonexempt, eligible 
nonsubscription transmission service and a pre-existing satellite 
digital audio radio service to perform publicly a sound recording by 
means of certain digital audio transmissions, subject to notice and 
recordkeeping requirements. 17 U.S.C. 114(f).
    The notice and recordkeeping requirements found in Secs. 201.35 and 
201.36 would appear to apply to any service eligible for the section 
114 license, including those newly eligible to use the license under 
the amended provisions of the license. However, these regulations 
provide no opportunity for a newly eligible nonsubscription 
transmission service which was in service prior to the passage of the 
DMCA to make a timely filing of its initial notice of transmission.
    Therefore, the Copyright Office is proposing an amendment to 
Sec. 201.35(f) which would extend the period for filing the initial 
notice to October 15, 1999, in order to allow the eligible 
nonsubscription services which were in operation prior to the passage 
of the DMCA an opportunity to file their initial notice timely. 
Comments on the extension of the filing period must be filed with the 
Copyright Office within September 3, 1999.
    The Office also recognizes that Sec. 201.36, which prescribes rules 
detailing how services shall notify copyright owners of the use of 
their sound recordings, what to include in that notice, and how to 
maintain and make available such records, does not apply to those 
services newly eligible for the section 114 license under the DMCA. 
Currently, Sec. 201.36(c) requires ``Reports of Use [to] be served upon 
Collectives that are identified in the records of the Licensing 
Division of the Copyright Office as having been designated under the 
statutory license, either by settlement agreement . . ., or by decision 
of a Copyright Arbitration Royalty Panel . . ., or by an order of the 
Librarian . . . .'' At this time, no collective has been designated in 
accordance with any of the methods enumerated in Sec. 201.36(c) for the 
purpose of collecting royalty fees from the newly eligible services, 
nor have any rates or terms been set for the use of the license by 
these services. See 63 FR 65555 (November 27, 1998). The newly eligible 
services and the interested copyright owners, however, continue 
negotiations to reach industry-wide agreement on rates and terms for 
the expanded section 114 license. In deference to these negotiations, 
the Office will refrain from initiating at this time a rulemaking 
proceeding to consider amendments to the recordkeeping regulations.

Regulatory Flexibility Act

    Although the Copyright Office, located in the Library of Congress 
which is part of the legislative branch, is not an ``agency'' subject 
to the Regulatory Flexibility Act, 5 U.S.C. 601-612, the Register of 
Copyrights has considered the effect of the proposed amendment on small 
businesses. The Register has determined that the amendment would not 
have a significant economic impact on a substantial number of small 
entities that would require provision of special relief for small 
entities. The proposed amendment is designed to minimize any 
significant economic impact on small entities.

List of Subjects in 37 CFR Part 201

    Copyright.

Proposed Regulations

    For the reasons set forth in the preamble, part 201 of title 37 of 
the Code of Federal Regulations is proposed to be amended as follows:

PART 201--GENERAL PROVISIONS

    1. The authority citation for part 201 continues to read as 
follows:

    Authority: 17 U.S.C. 702.

    2. Section 201.35(f) is amended by removing the phrase ``or within 
45 days of the effective date of this regulation.'' and adding in its 
place ``or by October 15, 1999.''

    Dated: July 30, 1999.
Marybeth Peters,
Register of Copyrights.
[FR Doc. 99-19988 Filed 8-3-99; 8:45 am]
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