[Federal Register Volume 69, Number 3 (Tuesday, January 6, 2004)]
[Notices]
[Pages 689-690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-183]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2004-1 CARP DTRA4]


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 for the period 
beginning January 1, 2005 and ending on December 31, 2006.

EFFECTIVE DATE: The voluntary negotiation period begins on January 6, 
2004.

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 by a commercial, non-government courier or messenger, 
they must be delivered to: The Congressional Courier Acceptance Site, 
located at 2nd and D Streets, NE., between 8:30 a.m. and 4 p.m. If hand 
delivered by a party, copies of voluntary license agreements and 
petitions should be brought to: Office of the Copyright General 
Counsel, James Madison Memorial Building, Room 403, First and 
Independence Avenue, SE., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, Senior Attorney, 
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''), Public 
Law 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''), Public 
Law 105-304, in order to allow for the public performance of a sound 
recording when made in accordance with the terms and rates of the 
statutory license, 17 U.S.C. 114(a), by a preexisting satellite digital 
audio radio service or as part of an eligible nonsubscription 
transmission.
    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 Sec.  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 Sec.  114(f) can 
make more than the one phonorecord permitted by the exemption specified 
in Sec.  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. Terms and rates may

[[Page 690]]

be determined by voluntary agreement among the affected parties, or if 
necessary, through compulsory arbitration conducted pursuant to Chapter 
8 of the Copyright Act. Rates and terms are set for a two-year period 
through this process, unless a different period is otherwise agreed 
upon by the parties as part of a negotiated agreement.
    Parties may submit such an agreement to the Copyright Office and 
request that the Office publish the proposed rates and terms in the 
Federal Register for comment from the public. 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 may adopt the proposed terms and rates without convening a 
copyright arbitration royalty panel. 37 CFR 251.63(b). On the other 
hand, if the affected parties are unable to reach an industry-wide 
agreement, or only certain parties negotiate private license 
agreements, then rates and terms for the statutory licenses are 
established through the arbitration process.
    The arbitration process begins when an interested party files a 
petition with the Librarian of Congress during the 60-day period 
specified by the statute and requests that the rates be set through the 
CARP process. The petition must be filed by a party with a significant 
interest in the outcome of the proceeding and it must identify ``the 
extent to which the petitioner's interest is shared by other owners or 
users.'' 17 CFR 251.62(a). For both the section 112 and section 114 
licenses, the period for filing a petition to set rates and terms for 
the 2005 and 2006 license period shall begin on July 1, 2004. 17 U.S.C. 
112(e)(6) and 114(f)(2)(C)(ii)(II).

Initiation of Voluntary Negotiations

    Unless the schedule for setting terms and rates has been readjusted 
by the parties in a previous rate adjustment proceeding, Sec. Sec.  
112(e)(6) and 114(f)(2)(C)(i)(II) of the Copyright Act require the 
publication of a notice in January 2000, 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 Sec.  112(e). See 65 FR 2194 (January 13, 2000) and 
67 FR 4472 (January 30, 2002). The publication of today's notice 
fulfills this requirement.
    The negotiation period shall begin on January 6, 2004 and end on 
June 30, 2004. 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 appropriate address listed above within 
30 days of its execution.

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 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, 2004. See 
also, 37 CFR 251.61. Parties should submit petitions to the Copyright 
Office at the appropriate address given in this notice. The petitioner 
must deliver an original and five copies to the Office.

    Dated: December 30, 2003.
Marilyn J. Kretsinger,
Associate General Counsel.
[FR Doc. 04-183 Filed 1-5-04; 8:45 am]
BILLING CODE 1410-33-P