[Federal Register Volume 67, Number 20 (Wednesday, January 30, 2002)]
[Notices]
[Pages 4472-4474]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-2242]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2002-1 CARP DTRA3]


Digital Performance Right in Sound Recordings and Ephemeral 
Recordings

AGENCY: Copyright Office, Library of Congress.

ACTION: Initiation of voluntary negotiation period.

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SUMMARY: The Copyright Office is announcing the initiation of the 
voluntary negotiation period for determining reasonable rates and terms 
for two compulsory licenses, which in one case, allows public 
performances of sound recordings by means of eligible nonsubscription 
transmissions, and in the second instance, allows the making of an 
ephemeral phonorecord of a sound recording in furtherance of making a 
permitted public performance of the sound recording.

EFFECTIVE DATE: The voluntary negotiation period begins on January 30, 
2002.

[[Page 4473]]


ADDRESSES: Copies of voluntary license agreements and petitions, if 
sent by mail, should be addressed to: Copyright Arbitration Royalty 
Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024. 
If hand delivered, they should be brought to: Office of the General 
Counsel, James Madison Memorial Building, Room LM-403, First and 
Independence Avenue, SE, Washington, DC 20559-6000.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel, 
P.O. Box 70977, Southwest Station, Washington, DC 20024. Telephone: 
(202) 707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: In 1995, Congress enacted the Digital 
Performance Right in Sound Recordings Act of 1995 (``DPRA''), Pub. L. 
104-39, which created an exclusive right for copyright owners of sound 
recordings, subject to certain limitations, to perform publicly the 
sound recordings by means of certain digital audio transmissions. Among 
the limitations on the performance right was the creation of a new 
compulsory license for nonexempt, noninteractive, digital subscription 
transmissions. 17 U.S.C. 114(f).
    The scope of this license was expanded in 1998 upon passage of the 
Digital Millennium Copyright Act of 1998 (``DMCA'' or ``Act''), Pub. L. 
105-304, in order to allow a nonexempt eligible nonsubscription 
transmission and a nonexempt transmission by a preexisting satellite 
digital audio radio service to perform publicly a sound recording in 
accordance with the terms and rates of the statutory license. 17 U.S.C. 
114(a).
    An ``eligible nonsubscription transmission'' is a noninteractive, 
digital audio transmission which, as the name implies, does not require 
a subscription for receiving the transmission. The transmission must 
also be made as part of a service that provides audio programming 
consisting in whole or in part of performances of sound recordings the 
purpose of which is to provide audio or entertainment programming, but 
not to sell, advertise, or promote particular goods or services. A 
``preexisting satellite digital audio radio service'' is a subscription 
digital audio radio service that received a satellite digital audio 
radio service license issued by the Federal Communications Commission 
on or before July 31, 1998. See 17 U.S.C. 114(j)(6) and (10).
    In addition to expanding the current Sec. 114 license, the DMCA 
also created a new statutory license for the making of an ``ephemeral 
recording'' of a sound recording by certain transmitting organizations. 
17 U.S.C. 112(e). The new statutory license allows entities that 
transmit performances of sound recordings to business establishments, 
pursuant to the limitations set forth in Section 114(d)(1)(C)(iv), to 
make an ephemeral recording of a sound recording for purposes of a 
later transmission. The new license also provides a means by which a 
transmitting entity with a statutory license under Section 114(f) can 
make more than the one phonorecord permitted by the exemption specified 
in Section 112(a). 17 U.S.C. 112(e).

Determination of Reasonable Terms and Rates

    The statutory scheme for establishing reasonable terms and rates is 
the same for both licenses. The terms and rates for the two new 
statutory licenses may be determined by voluntary agreement among the 
affected parties, or if necessary, through compulsory arbitration 
conducted pursuant to Chapter 8 of the Copyright Act.
    If the affected parties are able to negotiate voluntary agreements, 
then it may not be necessary for these parties to participate in an 
arbitration proceeding. See 17 U.S.C. 112(e)(5) and 114(f)(3). 
Similarly, if the parties negotiate an industry-wide agreement, an 
arbitration may not be needed. In the latter case, the Librarian of 
Congress will follow current rate regulation procedures and notify the 
public of the proposed agreement in a notice and comment proceeding. If 
no party with a substantial interest and an intent to participate in an 
arbitration proceeding files a comment opposing the negotiated rates 
and terms, the Librarian will adopt the proposed terms and rates 
without convening a copyright arbitration royalty panel. 37 CFR 
251.63(b). If, however, no industry-wide agreement is reached, or only 
certain parties negotiate license agreements, then those copyright 
owners and users relying upon one or both of the statutory licenses 
shall be bound by the terms and rates established through the 
arbitration process.
    Arbitration proceedings cannot be initiated unless a party files a 
petition for ratemaking with the Librarian of Congress during the 60-
day period, beginning July 1, 2002. 17 U.S.C. 112(e)(6) and 
114(f)(2)(C)(ii)(II).
    On November 27, 1998, the Copyright Office initiated a six-month 
voluntary negotiation period in accordance with Section 112(e)(3) and 
114(f)(2)(A) for the purpose of establishing rates and terms for these 
licenses for the period beginning on the effective date of the DMCA and 
ending on December 31, 2000. 63 FR 65555 (November 27, 1998). Parties 
to these negotiations however, were unable to reach agreement on the 
rates and terms and, in accordance with Sections 112(e)(4) and 
114(f)(1)(B), the Copyright Office initiated arbitration proceedings to 
determine the rates and terms for use of these licenses through 
December 31, 2000. 64 FR 52107 (September 27, 1999).
    Subsequently, the Copyright Office initiated another voluntary 
negotiation period in January 2000 for the purpose of setting rates and 
terms for use of these licenses by services for the period between 
January 1, 2001, and December 31, 2002. 66 FR 2194 (January 13, 2000). 
Because the panel in both proceedings was to set rates and terms for 
the same licenses, albeit for different time periods, the Office 
consolidated the 1998-2000 proceeding with the 2001-2002 proceeding. 
See Order, Docket Nos.99-6 CARP DTRA and 2000-3 CARP DTRA2 (December 4, 
2000). This consolidated proceeding is still ongoing and the CARP is 
scheduled to submit its report on February 20, 2002. See Order, Docket 
No. 2000-9 CARP DTRA1&2 (November 9, 2001).

Initiation of the Next Round of Voluntary Negotiations

    Unless the schedule has been readjusted by the parties in a 
previous rate adjustment proceeding, Sections 112(e)(7) and 
114(f)(2)(C)(i)(II) of the Copyright Act require the publication of a 
notice in January 2002, and at 2-year intervals thereafter, initiating 
the voluntary negotiation periods for determining reasonable rates and 
terms for the statutory licenses permitting the public performance of a 
sound recording by means of certain digital transmissions and the 
making of an ephemeral recording in accordance with Section 112(e). 
Parties who negotiate a voluntary license agreement during this period 
are encouraged to submit two copies of the agreement to the Copyright 
Office at the above-listed address within 30 days of its execution.
    The publication of this notice fulfills the requirement. The 
negotiation period shall begin on January 30, 2002, and end on June 30, 
2002.

Petitions

    In the absence of a license agreement negotiated under 17 U.S.C. 
112(e)(4) or 114(f)(2)(A), those copyright owners of sound recordings 
and entities availing themselves of the statutory licenses are subject 
to arbitration upon the filing of a petition by a party with a 
significant

[[Page 4474]]

interest in establishing reasonable terms and rates for the statutory 
licenses. Petitions must be filed in accordance with 17 U.S.C. 
112(e)(7), 114(f)(2)(C)(ii)(II), and 803(a)(1) and may be filed any 
time during the sixty-day period beginning on July 1, 2002. See also, 
37 CFR 251.61. Parties should submit petitions to the Copyright Office 
at the address listed in this notice. The petitioner must deliver an 
original and five copies to the Office.

    Dated: January 24, 2002.
David O. Carson,
General Counsel.
[FR Doc. 02-2242 Filed 1-29-02; 8:45 am]
BILLING CODE 1410-33-P