[Federal Register Volume 70, Number 94 (Tuesday, May 17, 2005)]
[Proposed Rules]
[Pages 28231-28233]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-9804]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 258

[Docket No. 2005-4 CARP SRA-Digital]


Rate Adjustment for the Satellite Carrier Compulsory License

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 proposed settlement of royalty rates for the 
retransmission of digital over-the-air television broadcast signals by 
satellite carriers under the statutory license.

DATES: Comments and Notices of Intent to Participate must be submitted 
no later than June 16, 2005.

ADDRESSES: If hand delivered by a private party, an original and five 
copies of a comment and a Notice of Intent to Participate should be 
brought to Room LM-401 of the James Madison Memorial Building between 
8:30 a.m. and 5 p.m. and the envelope should be addressed as follows: 
Office of the General Counsel/CARP, U.S. Copyright Office, James 
Madison Memorial Building, Room LM-401, 101 Independence Avenue, S.E., 
Washington, DC 20559-6000. If delivered by a commercial courier, an 
original and five copies of a comment and a Notice of Intent to 
Participate must be delivered to the Congressional Courier Acceptance 
Site located at 2nd and D Streets, N.E., between 8:30 a.m. and 4 p.m. 
The envelope should be addressed as follows: Office of the General 
Counsel/CARP, Room LM-403, James Madison Memorial Building, 101 
Independence Avenue, S.E., Washington, DC. If sent by mail (including 
overnight delivery using U.S. Postal Service Express Mail), an original 
and five copies of a comment and a Notice of Intent to Participate 
should be addressed to: Copyright Arbitration Royalty Panel (CARP), 
P.O. Box 70977, Southwest Station, Washington, DC 20024. Comments and 
Notices of Intent to Participate may not be delivered by means of 
overnight delivery services such as Federal Express, United Parcel 
Service, etc., due to delays in processing receipt of such deliveries.

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

SUPPLEMENTARY INFORMATION: On December 8, 2004, the President signed 
the Satellite Home Viewer Extension and Reauthorization Act 
(``SHVERA''), a part of the Consolidated Appropriations Act of 2005. 
Pub.L. 108-447. SHVERA extends for an additional five years the 
statutory license for satellite carriers retransmitting over-the-air 
television broadcast stations to their subscribers, 17 U.S.C. 119, as 
well as making a number of amendments to the license. One of the 
amendments to section 119 sets forth a process, for the first time, for 
adjusting the royalty fees paid by

[[Page 28232]]

satellite carriers for the retransmission of digital broadcast signals. 
17 U.S.C. 119(c)(2). The law set the initial rates as the rates set by 
the Librarian in 1997 for the retransmission of analog broadcast 
signals, 37 CFR 258.3(b)(1)&(2), reduced by 22.5 percent. 17 U.S.C. 
119(c)(2)(A). These rates are to be adjusted in accordance with the 
procedures set forth in section 119(c)(1) of the Copyright Act.
    On March 8, 2005, the Copyright Office received a letter from 
EchoStar Satellite L.L.C., DirecTV, Inc., Program Suppliers, and the 
Joint Sports Claimants requesting that the Office begin the process of 
setting the rates for the retransmission of digital broadcast signals 
by initiating a voluntary negotiation period so that rates for both 
digital and analog signals ``will be in place before the July 31, 2005 
deadline for satellite carriers to pay royalties for the first 
accounting period of 2005.'' Letter at 2. The Office granted the 
request and, pursuant to section 119(c)(1), published in the Federal 
Register a notice initiating a voluntary negotiation period during 
which parties could negotiate in an effort to reach a voluntary 
agreement regarding the rates. See 70 FR 15368 (March 25, 2005).
    In accordance with the March 25 notice, the Office has received one 
agreement, submitted jointly by the satellite carriers EchoStar 
Satellite L.L.C. and DirecTV, Inc., the copyright owners of motion 
pictures and syndicated television series represented by the Motion 
Picture Association of America, and the copyright owners of sports 
programming represented by the Office of the Commissioner of Baseball. 
The agreement proposes rates for the private home viewing of distant 
superstations and distant network stations for the 2005-2009 period, as 
well as the viewing of those signals in commercial establishments. The 
agreement specifies that distant superstations and network stations 
that are significantly viewed do not require a royalty payment, which 
is consistent with 17 U.S.C. 119(a)(3), as amended. In addition, the 
agreement proposes that, in the case of multicasting of digital 
superstations and network stations, each digital stream that is 
retransmitted by a satellite carrier must be paid for at the prescribed 
rate but no royalty payment is due for any program-related material 
contained on the stream within the meaning of WGN v. United Video, 
Inc., 693 F.2d 622, 626 (7th Cir. 1982) and Second Report and Order and 
First Order On Reconsideration in CS Doc. No. 98-120, FCC 05-27 at ] 44 
& n.158 (Feb. 23, 2005).
    The statute requires the Library to ``provide public notice of the 
royalty fees from the voluntary agreement and afford parties an 
opportunity to state that they object to those fees.'' 17 U.S.C. 
119(c)(1)(D)(ii)(II). This Notice of Proposed Rulemaking (``NPRM'') 
fulfills the requirement.
    The law further provides that the Librarian shall adopt the rates 
contained in the voluntary agreement as applicable to all satellite 
carriers, distributors and copyright owners ``unless a party with an 
intent to participate'' in a royalty rate adjustment proceeding before 
a Copyright Arbitration Royalty Panel (``CARP'') and a ``significant 
interest in the outcome'' of the CARP proceeding files an objection. 
Consequently, any party that objects to the rates opposed in this NPRM 
must submit the following on or before June 16, 2005:
    1. A notice of objection to the rates identifying the rate or rates 
to which the objection applies and the reasons for the objection;
    2. A statement setting forth in detail why the objector has a 
significant interest in the royalty rates to be adopted; and
    3. A separate Notice of Intention to Participate in the CARP 
proceeding to adjust the rates. The CARP proceeding will commence on or 
before December 31, 2005. See 17 U.S.C. 119(c)(2).
    Only parties objecting to the royalty rates should submit the 
above-described documents.
    A copy of the voluntary agreement can be viewed at 
www.copyright.gov/carp/sat_rate_agreement_amend.pdf. The Library is 
not proposing for adoption the additional terms set forth in the 
agreement as the statute only provides for adoption of royalty rates. 
See 17 U.S.C. 119(c)(1)(D)(ii)(III).

List of Subjects in 37 CFR Part 258

    Copyright, Satellite, Television.

Proposed Regulations

    For the reasons set forth above, the Copyright Office proposes to 
amend 37 CFR chapter II as follows:

PART 258--ADJUSTMENT OF ROYALTY FEE FOR SECONDARY TRANSMISSIONS BY 
SATELLITE CARRIERS

    1. The authority citation for part 258 is revised to read as 
follows:

    Authority: 17 U.S.C. 119, 702, 802.
    2. In Sec.  258.2, paragraph (b) is amended by removing ``Sec.  
258.3(b)'' and adding ``Sec.  258.3(a)'' in its place.
    3. Section 258.3 is amended by revising the section heading and in 
paragraphs (a) through (h), by adding ``analog signals of'' before 
``broadcast stations'' each place it appears.
    The revisions to Sec.  258.3 read as follows:

Sec.  258.3 Royalty fee for secondary transmission of analog signals of 
broadcast stations by satellite carriers.

    * * * * *
    4. Add a new Sec.  258.4 to read as follows:

Sec.  258.4 Royalty fee for secondary transmission of digital signals 
of broadcast stations by satellite carriers.

    (a) Commencing January 1, 2005, the royalty rate for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers shall be as follows:
    (1) For private home viewing-
    (i) 20 cents per subscriber per month for distant superstations.
    (ii) 17 cents per subscriber per month for distant network 
stations.
    (2) For viewing in commercial establishments, 40 cents per 
subscriber per month for distant superstations.
    (b) Commencing January 1, 2006, the royalty rate for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers shall be as follows:
    (1) For private home viewing-
    (i) 21.5 cents per subscriber per month for distant superstations.
    (ii) 20 cents per subscriber per month for distant network 
stations.
    (2) For viewing in commercial establishments, 43 cents per 
subscriber per month for distant superstations.
    (c) Commencing January 1, 2007, the royalty rate for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers shall be as follows:
    (1) For private home viewing-
    (i) 23 cents per subscriber per month for distant superstations.
    (ii) 23 cents per subscriber per month for distant network 
stations.
    (2) For viewing in commercial establishments, 46 cents per 
subscriber per month for distant superstations.
    (d) Commencing January 1, 2008, the royalty rate for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers shall be as follows:
    (1) For private home viewing-
    (i) The 2007 rate per subscriber per month for distant 
superstations adjusted for the amount of inflation as measured by the 
change in the Consumer Price Index for all Urban Consumers from January 
2007 to January 2008.
    (ii) The 2007 rate per subscriber per month for distant network 
stations adjusted for the amount of inflation as measured by the change 
in the Consumer Price Index for all Urban Consumers from January 2007 
to January 2008.

[[Page 28233]]

    (2) For viewing in commercial establishments, the 2007 rate per 
subscriber per month for viewing distant superstations in commercial 
establishments adjusted for the amount of inflation as measured by the 
change in the Consumer Price Index for all Urban Consumers from January 
2007 to January 2008.
    (e) Commencing January 1, 2009, the royalty rate for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers shall be as follows:
    (1) For private home viewing-
    (i) The 2008 rate per subscriber per month for distant 
superstations adjusted for the amount of inflation as measured by the 
change in the Consumer Price Index for all Urban Consumers from January 
2008 to January 2009.
    (ii) The 2008 rate per subscriber per month for distant network 
stations adjusted for the amount of inflation as measured by the change 
in the Consumer Price Index for all Urban Consumers from January 2008 
to January 2009.
    (2) For viewing in commercial establishments, the 2008 rate per 
subscriber per month for viewing distant superstations in commercial 
establishments adjusted for the amount of inflation as measured by the 
change in the Consumer Price Index for all Urban Consumers from January 
2008 to January 2009.
    (f) For purposes of calculating the royalty rates for secondary 
transmission of digital signals of broadcast stations by satellite 
carriers-
    (1) In the case of digital multicasting, the rates in paragraphs 
(a) through (e) of this section apply to each digital stream that a 
satellite carrier or distributor retransmits pursuant to section 119; 
provided, however that no additional royalty shall be paid for the 
carriage of any material related to the programming on such stream; and
    (2) Satellite carriers and distributors are not required to pay a 
section 119 royalty for the retransmission of a digital signal to a 
subscriber who resides in a community where that signal is 
``significantly viewed,'' within the meaning of 17 U.S.C. 119(a)(3) and 
(b)(1), as amended.

    Dated: May 12, 2005
Tanya Sandros,
Associate General Counsel.
[FR Doc. 05-9804 Filed 5-16-05; 8:45 am]
BILLING CODE 1410-33-S