[Federal Register Volume 70, Number 60 (Wednesday, March 30, 2005)]
[Notices]
[Pages 16306-16308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-6311]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2005-2 CARP CRA]


Adjustment of Cable Statutory License Royalty Rates

AGENCY: Copyright Office, Library of Congress.

[[Page 16307]]


ACTION: Request for notices of intention to participate, and 
announcement of negotiation period.

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SUMMARY: The Copyright Office of the Library of Congress announces the 
deadline for filing Notices of Intent to Participate in a CARP 
proceeding to adjust the rates for the cable statutory license and 
announces the dates of the 30-day negotiation period.

DATES: Comments on the petition and Notices of Intent to Participate 
are due no later than April 29, 2005. The 30-day negotiation period 
begins May 4, 2005 and ends on June 3, 2005. Written notification of 
the status of settlement negotiations due no later than June 6, 2005.

ADDRESSES: If hand delivered by a private party, an original and five 
copies of the comments on the petition, Notices of Intent to 
Participate, and/or written notification of status of settlement 
negotiations should be addressed to: Copyright Office General Counsel/
CARP, U.S. Copyright Office, James Madison Memorial Building, Room LM-
401, 101 Independence Avenue, SE., Washington, DC 20059-6000; then 
delivered Monday through Friday, between 8:30 a.m. and 5 p.m., to the 
Public Information Office located at the same address. If hand 
delivered by a commercial courier (excluding Federal Express, United 
Parcel Service and similar corporate courier services), an original and 
five copies of the comments on the petition, Notices of Intent to 
Participate, and/or written notification of status of settlement 
negotiations should be addressed to: Copyright Office General Counsel/
CARP, Room 403, James Madison Memorial Building, 101 Independence 
Avenue, SE., Washington, DC.; then delivered by a courier showing 
proper identification, e.g., a valid driver's license, Monday through 
Friday between 8:30 a.m. and 4 p.m. to the Congressional Courier 
Acceptance Site (CCAS) located at Second and D Street, NE., Washington, 
DC. If sent through the U.S. Postal Service, an original and five 
copies of the comments on the petition, Notices of Intent to 
Participate, and/or written notification of status of settlement 
negotiations should be addressed to: Copyright Arbitration Royalty 
Panel, P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. 
Comments may not be delivered by means of overnight delivery services 
such as Federal Express, United Parcel Services, etc., due to delays in 
processing receipt of such deliveries.

FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, Associate General 
Counsel, or Abioye E. Oyewole, CARP Specialist. Telephone: (202) 707-
8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION:

I. Background

    Section 111 of the Copyright Act, title 17 of the United States 
Code, grants a statutory copyright license to cable television systems 
for the retransmission of over-the-air broadcast stations to their 
subscribers. In exchange for the license, cable operators submit 
royalties, along with statements of account detailing their 
retransmissions, to the Copyright Office on a semi-annual basis. The 
Office then deposits the royalties with the United States Treasury for 
later distribution to copyright owners of the broadcast programming 
retransmitted by cable systems.
    A cable system calculates its royalty payments in accordance with 
the statutory formula described in 17 U.S.C. 111(d). Royalty fees are 
based upon the gross receipts received by a cable system from 
subscribers receiving retransmitted broadcast signals. Section 111(d) 
subdivides cable systems into three categories based on their gross 
receipts: small, medium, and large. Small systems pay a fixed amount 
without regard to the number of broadcast signals they retransmit, 
while medium-sized systems pay a royalty within a specified range, with 
a maximum amount, based on the number of signals they retransmit. Large 
cable systems calculate their royalties according to the number of 
distant broadcast signals which they retransmit to their 
subscribers.\1\ Under this formula, a large cable system is required to 
pay a specified percentage of its gross receipts for each distant 
signal that it retransmits.
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    \1\ For large cable systems which retransmit only local 
broadcast stations, there is still a minimum royalty fee which must 
be paid. This minimum fee is not applied, however, once the cable 
system carries one or more distant signals.
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    Congress established the gross receipts limitations that determine 
a cable system's size and provided the gross receipts percentages 
(i.e., the royalty rates) for distant signals. 17 U.S.C. 111(d)(1). It 
also provided for adjustment of both the gross receipts limitations and 
the distant signal rates. 17 U.S.C. 801(b)(2). The limitations and 
rates can be adjusted to reflect national monetary inflation, changes 
in the average rates charged by cable systems for the retransmissions 
of broadcast signals, or changes in certain cable rules of the Federal 
Communications Commission in effect on April 15, 1976. 17 U.S.C. 
801(b)(2)(A),(B),(C) and (D). Prior rate adjustments of the Copyright 
Royalty Tribunal made under section 801(b)(2)(B) and (C) may also be 
reconsidered at five-year intervals. 17 U.S.C. 803(b). The current 
gross receipts limitations and rates are set forth in 37 CFR 256.2. 
Rate adjustments are now made by a Copyright Arbitration Royalty Panel 
(``CARP''), subject to review by the Librarian of Congress.\2\
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    \2\ The Library is conducting this rate adjustment proceeding 
under the CARP system as opposed to the new Copyright Royalty Judges 
system adopted by Congress at the end of last year. See, infra.
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    Section 803 of the Copyright Act provides that the gross receipts 
limitations and royalty rates may be adjusted every five years, making 
2005 a royalty adjustment year, upon the filing of a petition from a 
party with a ``significant interest'' in the proceeding. If the 
Librarian determines that a petitioner has a ``significant interest'' 
in the royalty rate or rates in which adjustment is requested, the 
Librarian must convene a CARP to determine the adjustment. 17 U.S.C. 
803(a)(1). Section 37 CFR 251.63 of the CARP rules provides that the 
Librarian shall designate a 30-day negotiation period to allow 
interested parties to settle differences regarding the adjustment of 
cable rates before commencement of a formal CARP proceeding.

II. Petitions

    This is a window year for filing. On January 10, 2005, the Library 
received a petition to adjust the cable rates and gross receipts 
limitations from Joint Sports Claimants and Program Suppliers seeking 
commencement of the 30-day voluntary negotiation period under Sec.  
251.63. See http://www.copyright.gov/carp/cable-rate-petition.pdf. On 
January 26, 2005, the Office published a Federal Register notice 
requesting public comments as to whether or not it was appropriate and/
or required that the 2005 cable rate adjustment be resolved through the 
CARP process set forward under chapter 8 of the Copyright Act prior to 
the passage of the Copyright Royalty Distribution and Reform Act 
(``CRDRA''), or whether the petition filed by the Joint Sports 
Claimants and the Program Suppliers should be terminated and 
transferred to the Copyright Royalty Judges under the CRDRA. 70 FR 3738 
(January 26, 2005). In response, on February 16, 2005, the Library 
received one comment from the Copyright Owners requesting a CARP for 
the resolution of the 2005 cable rate adjustment. Having received no 
comments in opposition and persuaded that it is appropriate to conduct 
a CARP

[[Page 16308]]

Proceeding, the Library now seeks comment consistent with 17 U.S.C. 
803(a)(1) as to whether Joint Sports Claimants and Program Suppliers 
have a significant interest in the adjustment of the cable rates. 
Comments are due no later than April 29, 2005.

III. Negotiation Period and Notices of Intent To Participate

    As discussed above, the Library's rules require that a 30-day 
negotiation period be prescribed by the Librarian to enable the parties 
to a rate adjustment proceeding to settle their differences. 37 CFR 
251.63(a). The rules also require interested parties to file Notices of 
Intent to Participate with the Library. 37 CFR 251.45(a). Consequently, 
in addition to requiring parties to file comments on the Joint Sports 
Claimants' and Program Suppliers' petition, the Library is directing 
parties to file their Notices of Intent to Participate on the same day, 
April 29, 2005. Failure to file a timely Notice of Intent to 
Participate will preclude a party from further participation in this 
proceeding.
    The 30-day negotiation period shall begin on May 4, 2005, and 
conclude on June 3, 2005. Those parties that have filed Notices of 
Intent to Participate are directed to submit to the Library a written 
notification of the status of their settlement negotiations no later 
than June 6, 2005. If, after the submission of these notifications it 
is clear that no settlement has been reached, the Library will issue a 
scheduling order for a CARP proceeding to resolve this rate adjustment 
proceeding.

    Dated: March 25, 2005.
David O. Carson,
General Counsel.
[FR Doc. 05-6311 Filed 3-29-05; 8:45 am]
BILLING CODE 1410-33-P