[Federal Register Volume 65, Number 177 (Tuesday, September 12, 2000)]
[Proposed Rules]
[Pages 54984-54985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23388]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Parts 201 and 256

[Docket No. 2000-4 CARP CRA]


Adjustment of Cable Statutory License Royalty Rates

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 submitting 
for public comment a settlement proposal for the adjustment of the 
royalty rates for the cable statutory license.

DATES: Comments and Notices of Intent to Participate are due by October 
12, 2000.

ADDRESSES: If sent by mail, an original and five copies of comments and 
Notices 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, copies should be brought to: 
Office of the Copyright General Counsel, James Madison Memorial 
Building, Room LM-403, First and Independence Avenue, SE., Washington, 
DC 20540.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
William J. Roberts, Jr., Senior Attorney for Compulsory Licenses, 
Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest 
Station, Washington, DC 20024. Telephone: (202) 707-8380. Telefax (202) 
252-3423.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 111 of the Copyright Act, 17 U.S.C., creates a statutory 
license for cable systems that retransmit to their subscribers over-
the-air broadcast signals. Royalty fees for this license are calculated 
as percentages of a cable system's gross receipts received from 
subscribers for receipt of broadcast signals. A cable system's 
individual gross receipts determine the applicable percentages. These 
percentages, and the gross receipts limitations, are published in 37 
CFR part 256 and are subject to adjustment at five-year intervals. 17 
U.S.C. 801(b)(2)(A) & (D). This is a window year for such an 
adjustment.
    A cable rate adjustment is initiated by the filing of a petition 
from a party with a significant interest in the rates. The Library 
received two such petitions: One filed on behalf of the National 
Basketball Association, the National Hockey League, Major League 
Baseball, and the National Collegiate Athletic Association; the other 
filed on behalf of syndicated television programmers. The Library 
published a Federal Register notice seeking comment on these petitions 
and directed interested parties to file a Notice of Intent to 
Participate in a Copyright Arbitration Royalty Panel (``CARP'') 
proceeding. 65 FR 10564 (February 28, 2000). The Library also 
designated a 30-day period to negotiate a settlement as to adjustment 
of the rates. 37 CFR 251.63(a). The Library extended the negotiation 
period on two separate occasions in Orders dated May 15, 2000, and June 
5, 2000. The extensions proved to be successful, as the Library has now 
received a joint proposal to adjust the cable royalty fees and the 
gross receipts limitations.
    When a joint proposal is received in a rate adjustment proceeding,

the Librarian may, upon the request of the parties, submit the 
agreed upon rate to the public in a notice-and-comment proceeding. 
The Librarian may adopt the rate embodied in the proposed settlement 
without convening an arbitration panel, provided that no opposing 
comment is received by the Librarian from a party with an intent to 
participate in a CARP proceeding.

37 CFR 251.63(b). This Federal Register notice implements the 
requirements of Sec. 251.63(b).

II. Proposed Rates and Gross Receipts Limitations

    On June 30, 2000, the Library received a joint proposal from the 
National Cable Television Association; the Joint Sports Claimants; the 
Program Suppliers; the Canadian Claimants; the Public Television 
Claimants; the National Association of Broadcasters; Broadcast Music, 
Inc.; the American Society of Composers, Authors and Publishers; SESAC, 
Inc.; the Devotional Claimants; and National Public Radio, which 
represent all the parties that filed a Notice of Intent to Participate 
in this proceeding. The joint proposal puts forward adjustments to the 
cable license royalty rates, pursuant to 17 U.S.C. 801(b)(2)(A), and 
the gross receipts

[[Page 54985]]

limitations, pursuant to 17 U.S.C. 801(b)(2)(D). The details of the 
adjustments are as follows.
    With respect to rates, the joint proposal raises the basic (or 
minimum) fee for providing broadcast stations from .893 of 1 per centum 
to .956 of 1 per centum of gross receipts for the privilege of further 
transmitting any non-network programming of a primary transmitter in 
whole or in part beyond the local service area of such primary 
transmitter; the fee for the first distant signal equivalent from .893 
of 1 per centum to .956 of 1 per centum of gross receipts; the fee for 
the second, third, and fourth distant signal equivalent from .563 of 1 
per centum to .630 of 1 per centum of gross receipts; and the fee for 
the fifth distant signal equivalent and each distant signal equivalent 
thereafter, from .265 of 1 per centum to .296 of 1 per centum of gross 
receipts.
    With respect to the gross receipts limitations which determine the 
size of a cable system (small, medium or large) and the royalty fee 
percentages that apply to those characterizations, the joint proposal 
puts forward increases as well. The gross receipts threshold for 
determining when a cable system is a small system would be raised from 
$75,800 to $98,600. Medium-sized cable systems have two methods of 
calculating their royalties, depending upon which side of the 
limitation threshold their gross receipts result. That threshold would 
be raised from $146,000 to $189,800, with the minimum reportable gross 
receipts over $189,800 being raised from $5,600 to $7,400. Finally, the 
gross receipts limitation for determining a large cable system would be 
raised from $292,000 to $379,600.
    The joint proposal establishes July 1, 2000, as the effective date 
of these rates, meaning that they would apply to royalty calculations 
and payments made by cable systems beginning with the second accounting 
period of 2000.

III. Proposed Rulemaking

    As noted above, the Library is publishing the terms of the joint 
proposal as proposed amendments to parts 201 and 256 of its rules. Any 
party who wishes to challenge these proposed rules must submit its 
written comments to the Librarian of Congress no later than close of 
business on October 12, 2000. The content of the written challenge 
should describe the party's interest in this proceeding, the proposed 
rule or rules that the party finds objectionable, and the reasons for 
the challenge.
    In addition, any party submitting written challenges must also 
submit an accompanying Notice of Intent to Participate in a CARP 
proceeding to adjust the cable rates and gross receipts limitations. It 
should be understood that anyone who challenges the proposed rules must 
be willing to fully participate in a CARP proceeding and have a 
significant interest in the adjustment of the rates. Failure to submit 
a Notice of Intent to Participate will preclude an interested party 
from participating in this proceeding and will preclude consideration 
of his or her written challenge. Any interested party that does file a 
Notice of Intent to Participate will be notified as to when the CARP 
proceeding will commence and when written direct cases will be due.

List of Subjects

37 CFR Part 201

    Copyright, Procedures.

37 CFR Part 256

    Cable television, Royalties.

    For the reasons set forth in the preamble, the Library proposes to 
amend 37 CFR parts 201 and 256 as follows:

PART 201--GENERAL PROVISIONS

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

    Authority: 17 U.S.C. 702.


Sec. 201.17  Statements of Account covering compulsory licenses for 
secondary transmissions by cable systems.

    2. In Sec. 201.17(d)(2), remove ``$292,000'' each place it appears 
and add ``$379,600'' in its place.
    3. In Sec. 201.17(e)(12), remove ``$75,800'' and add ``$98,600'' in 
its place.
    4. In Sec. 201.17(g)(2)(ii), remove ``.893'' and add ``.956'' in 
its place.

PART 256--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE

    5. The authority citation for part 256 continues to read:

    Authority: 17 U.S.C. 702, 802.


Sec. 256.2  Royalty fee for compulsory license for secondary 
transmission by cable systems.

    6. In Sec. 256.2(a), introductory text, remove the phrase ``the 
first semiannual accounting period of 1985'' and add the phrase ``the 
second semiannual accounting period of 2000'' in its place.
    7. In Sec. 256.2(a)(1), remove ``.893'' and add ``.956'' in its 
place.
    8. In Sec. 256.2(a)(2), remove ``.893'' and add ``.956'' in its 
place.
    9. In Sec. 256.2(a)(3), remove ``.563'' and add ``.630'' in its 
place.
    10. In Sec. 256.2(a)(4), remove ``.265'' and add ``.296'' in its 
place.
    11. In Sec. 256.2(b), introductory text, remove the phrase ``the 
first semiannual accounting period of 1985'' and add the phrase ``the 
second semiannual accounting period of 2000'' in its place.
    12. In Sec. 256.2(b)(1), remove ``$146,000'' and add ``$189,800'' 
in its place, and remove ``$5,600'' and add ``$7,400'' in its place.
    13. In Sec. 256.2(b)(2), remove ``$146,000'' each place it appears, 
and add ``$189,800'' in its place, and remove ``$292,000'' each place 
it appears and add ``$379,600'' in its place.

    Dated: September 7, 2000.
David O. Carson,
General Counsel.
[FR Doc. 00-23388 Filed 9-11-00; 8:45 am]
BILLING CODE 1410-33-P