[Federal Register Volume 70, Number 143 (Wednesday, July 27, 2005)]
[Proposed Rules]
[Pages 43364-43368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14872]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 270

[Docket No. RM 2005-2]


Notice and Recordkeeping for Use of Sound Recordings Under 
Statutory License

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Supplemental request for comments.

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SUMMARY: The Interim Chief Copyright Royalty Judge, on behalf of the 
Copyright Royalty Board of the Library of Congress, is issuing a 
supplemental request for comments regarding rules for the delivery and 
format of records of use of sound recordings for statutory licenses 
under sections 112 and 114 of the Copyright Act.

DATES: Written comments should be received no later than August 26, 
2005. Reply comments should be received no later than September 16, 
2005.

ADDRESSES: If hand delivered by a private party, an original and five 
copies of comments and reply comments must be brought to Room LM-401 of 
the James Madison Memorial Building, Monday through Friday, between 
8:30 a.m. and 5 p.m., and the envelope must be addressed as follows: 
Copyright Royalty Board, Library of Congress, James Madison Memorial 
Building, LM-401, 101 Independence Avenue, SE., Washington, DC 20559-
6000. If delivered by a commercial courier (excluding overnight 
delivery services such as Federal Express, United Parcel Service and 
other similar overnight delivery services), an original and five copies 
of comments and reply comments must be delivered to the Congressional 
Courier Acceptance Site located at 2nd and D Street, NE., Monday 
through Friday, between 8:30 a.m. and 4 p.m., and the envelope must be 
addressed as follows: Copyright Royalty Board, Library of Congress, 
James Madison Memorial Building, LM-403, 101 Independence Avenue, SE., 
Washington, DC 20559-6000. If sent by mail (including overnight 
delivery using United States Postal Service Express Mail), an original 
and five copies of comments and reply comments must be addressed to: 
Copyright Royalty Board, P.O. Box 70977, Southwest Station, Washington, 
DC 20024-0977. Comments and reply comments 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: William J. Roberts, Jr., Senior 
Attorney, or Abioye E. Oyewole, CRB Program Specialist. Telephone (202) 
707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION:

I. Overview

    The Copyright Act, as amended by the Digital Millennium Copyright 
Act (Pub. L. 105-304, 112 Stat. 2860 (1998)), provides a statutory 
license for digital audio transmissions by certain eligible 
subscription, nonsubscription, satellite digital audio radio, business 
establishment and new subscription services (17 U.S.C. 114(f)(4)(A)) 
and a related ``ephemeral'' statutory license for the temporary 
recordings used in those transmissions (17 U.S.C. 112(e)(4)). The 
statute directs the Librarian of Congress to ``establish requirements 
by which copyright owners may receive reasonable notice of the use of 
their sound recordings under this section, and under which records of 
use shall be kept and made available by entities performing sound 
recordings[]'' by digitial audio transmission. 17 U.S.C. 114(f)(4)(A); 
see, also 17 U.S.C. 112(e)(4). Avoidance of infringement liability is 
contingent upon ``complying with such notice requirements * * *.'' 17 
U.S.C. 114(f)(4)(B)(i).
    Through extensive prior proceedings, the Librarian has partially 
``establish[ed] requirements by which copyright owners may receive 
reasonable notice of the use of their sound recordings,'' adopting 
interim regulations on the types of information that must be kept by 
digital audio services under 17 U.S.C. 114(f)(4)(A) and 112(e)(4). See, 
69 FR 11515 (March 11, 2004). A notice of proposed rulemaking on the 
issues of delivery and formatting was published on April 27, 2005, by 
the Copyright Office. 70 FR 21704. Responsibility for the notice and 
recordkeeping regulations was transferred by Congress to the Copyright 
Royalty Judges (``CRJs'') by amended sections 114(f)(4)(A) and 
112(e)(4) in the Copyright Royalty and Distribution Reform Act of 2004, 
Pub. L. 108-419, 118 Stat. 2341 (November 30, 2004), which became 
effective on May 31, 2005. As anticipated in the April 27, 2005, notice 
of proposed rulemaking, the rulemaking record, including the comments 
received on the proposed

[[Page 43365]]

delivery and formatting rules, has been transferred to the Copyright 
Royalty Board (``the Board''), which was created by the Librarian to 
house the functions of the CRJs.
    By this notice, the Copyright Royalty Board is seeking further 
comments on the rules proposed by the Copyright Office in the April 27, 
2005, notice of proposed rulemaking (``NPRM''). These additional 
comments are sought in an effort to improve the quality of the Board's 
consideration of these important matters.

II. The Need for Supplemental Rulemaking Comments

    This rulemaking task has proved nettlesome and frustrating. The 
written comments received from copyright owners \1\ and licensees, \2\ 
pursuant to the April 27, 2005, notice of proposed rulemaking, 
underscores the continued sharp divisions among the parties on the 
highly technical formatting and delivery issues. Resolution of these 
issues does not draw upon a reservoir of traditional agency expertise. 
The written comments seem frequently characterized by conclusory 
assertions and the issuance of a final rule on this record would be 
extremely difficult.
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    \1\ SoundExchange,Inc. (``SoundExchange''), which has been 
designated as the Receiving Agent for royalties paid pursuant to the 
section 112 and 114 statutory licenses, has filed extensive comments 
in these rulemaking proceedings. The Board has also received 
comments of a limited nature from Royalty Logic, Inc. (``RLI'').
    \2\ Comments reflecting the views of the digital audio service 
providers have been received from Collegiate Broadcasters, Inc. 
(``CBI''); Harvard Radio Broadcasting Company, Inc. (``WHRB''); the 
Intercollegiate Broadcasting System, Inc. (``IBS''); and the 
National Religious Broadcasters Music License Committee and Salem 
Communications Corp. (``NRBMLC/Salem'').
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    The Board's goal here is to obtain a fair and practical allocation 
of the burdens of data delivery for those who are unable to negotiate 
their own data delivery solutions with SoundExchange. The resulting 
system should not impose an unnecessary burden on copyright owners; at 
this time, the system cannot allow copyright owners to throw up burdens 
that would defeat or unnecessarily discourage use of the statutory 
licenses. The Board is earnestly asking for more specific, additional 
information that will reduce the speculative nature of its rulemaking 
decision to the degree possible. The information should be detailed 
enough to provide support for, and rebuttal to, assertions regarding 
the burdens imposed by the proposed rules or by the logical 
alternatives to those rules. Citations to supporting references should 
be provided wherever possible. Reports from expert consultants are 
encouraged.
    In issuing this supplemental notice, the Board stresses that it has 
not made a decision on the merits of any of the formatting and delivery 
issues presented in this rulemaking proceeding and will consider any 
further comments on any matter interested persons might wish to offer. 
The Board is, however, urging commenters to zero in on the following 
specific technical issues.

III. Specific Factual Questions

A. Spreadsheets

    SoundExchange has agreed to allow webcasters to use two 
commercially available spreadsheets in creating and formatting records 
of use for each sound recording used under sections 112 and 114 of the 
Copyright Act. SoundExchange has already posted on its Web site a 
template for Microsoft Excel and asserts that a version for Correl's 
Quattro Pro will soon be posted. It submits that ``due to the 
significant limitations of spreadsheets, SoundExchange shall not be 
required to provide technical support for the use of spreadsheets for 
recordkeeping purposes.'' SoundExchange comments at Exhibit B at 3 (May 
27, 2005). All spreadsheet data must be converted into an American 
Standard Code for Information Interchange (``ASCII'') format prior to 
delivery to SoundExchange.
    CBI and WHRB offer the following objections. CBI objects that 
SoundExchange will not provide technical assistance to services seeking 
to complete spreadsheets and that such a provision ``absolves 
SoundExchange of any responsibility to provide a template and 
instructions that are free from errors, no matter how egregious.'' CBI 
comments at 8 (May 27, 2005). CBI and WHRB assert that converting 
spreadsheet data to ASCII is expensive, impractical, and ``eliminates 
the only reasonable, financially accessible, and widely available 
tool.'' Id.; WHRB comments at 6 (May 27, 2005) (``The process of using 
a spreadsheet program to export an ASCII file is difficult and will be 
prone to errors, particularly in the hands of unpaid volunteers with 
relatively high rates of turnover.'')
    Questions:
    1. How expensive and time-consuming would it be for a typical 
noncommercial webcaster on the Internet to compile spreadsheets using 
Microsoft Excel? Using Corel Quattro Pro?
    2. What are the practical difficulties in converting a Microsoft 
Excel or Corel Quattro Pro spreadsheet into ASCII? How costly is it?
    3. What are the kinds of technical support that are typically 
needed in preparing Microsoft Excel and Corel Quattro Pro spreadsheets 
and converting them to ASCII? How would that technical support be 
available to a webcaster and what costs would be involved?

B. Commercially Available Software

    Although the Copyright Office NPRM only addressed commercially 
available spreadsheets as a means of creating records of use, the Board 
is interested in knowing what, if any, software is commercially 
available that could be used to compile records of use.
    Questions:
    What, if any, commercially available software is available that 
could be used to compile records of use? Would such software produce 
records of use that are format compatible with SoundExchange's data 
processing system? What are the costs associated with such software?

C. Report Delivery

    SoundExchange supports four methods of delivery for electronic data 
files: File Transfer Protocol (``FTP''); electronic mail attachment; 
CD-ROM delivery and; floppy diskette delivery. Each of these delivery 
methods has specific requirements (examples: e-mail attachments may not 
exceed ten megabytes; FTP delivery requires securing username and 
password; floppy diskettes must measure 3.5 inches in diameter). 
Webcasters do not object to the proposed delivery methods.
    However, WHRB recommends that records of use should be accepted by 
SoundExchange via its Web site. Once logged in, services would have the 
ability to upload new reports to the SoundExchange site, ``with 
SoundExchange automatically handling the naming and tagging of the 
reports.'' The Web site could also allow the webcasters to view their 
history of submitted reports. WHRB comments at 6-7 (May 27, 2005). 
SoundExchange has opposed allowing delivery of records of use to a Web 
site, citing unspecified cost and security concerns. See 70 FR 21704, 
21707 (April 27, 2005).
    Questions:
    1. What are the average estimated costs of creating and maintaining 
a Web site for receipt of records of use? What are the security 
concerns and how may they be addressed? Is there a commercially 
available Web site software that could perform this task? Is Web site 
software available that could

[[Page 43366]]

be adopted from other SoundExchange uses?
    2. To what extent can a SoundExchange-hosted Web site reduce costs 
associated with records of use? Can it assist in organizing and 
cataloging delivered data and, if so, in what fashion and to what 
extent?
    3. Could a SoundExchange-hosted Web site be required to provide 
services with access to prior submitted records of use? For how long?

D. File Naming

    Every record of use must be named and must contain the dates of the 
reporting period. SoundExchange insists that the ``[s]tart and end 
dates should be in the format of day, month, and year (DDMMYYYY) where 
DD is the two-digit day of the log period (beginning or end); MM is the 
two-digit month of the log period; and YYYY is the four-digit year of 
the log period (beginning or end).'' SoundExchange comments, Exhibit B 
at 4 (May 27, 2005). NRBMLC/Salem urge that the reporting dates for 
data files should be in the format of YYYYMMDD, which they state is 
``the official format adopted by the ASCII standard.'' NRBMLC/Salem 
comments at 1 (May 27, 2005); See, also NRBMLC/Salem comments at 5 
(September 30, 2002) and NRBMLC/Salem reply comments at 8 (October 10, 
2002).
    In addition, NRBMLC/Salem submit that ``we are concerned about 
radio stations that may not have the technological capability of 
assigning file names the length that SoundExchange's proposal 
envisions.'' Id.
    Questions:
    1. What is the ASCII standard for reporting days, months and years? 
Is one way more cumbersome or expensive than the other?
    2. What is required to be technologically capable of assigning file 
names of the length proposed in the NPRM?

E. File Extension

    SoundExchange requests that the service name, start and end date of 
the reporting period and the transmission category be followed by the 
file extension ``.txt.''. An example of a file identifier is as 
follows: ex. AcmeMusicCo15012005-21012005--H.txt. NRBMLC/Salem objects 
to the sole use of ``.txt'' as a file extension and asserts that 
``[t]here is no need for the Office to regulate at this level of 
detail, and alternate file type extensions should be allowed so long as 
the data contained in the file is in the appropriate format.'' NRBMLC/
Salem reply comments at 9 (October 10, 2002).
    Questions:
    1. What difficulties would it create for SoundExchange if reports 
without .txt file extensions and/or with different file extensions were 
submitted?
    2. What difficulties would it create for digital audio services if 
they were required to use .txt file extensions on their reports?

F. Delivery Address

    RLI requests that it receive all records of use. RLI comments at 1 
(May 27, 2005).
    Questions:
    1. What standing does RLI have to request copies of the reports of 
use?
    2. How expensive and burdensome would it be, on average, for 
services to provide RLI with records of use in addition to 
SoundExchange?
    3. Must all the format requirements be the same?

G. Files With Headers

    SoundExchange requests that the following header appear, in order, 
on each data file of a record of use:

------------------------------------------------------------------------
             Row No.                          Field definition
------------------------------------------------------------------------
1................................  Name of Serivice.
2................................  Name of Contact Person.
3................................  Street Address.
4................................  City, State, Zip, Country.
5................................  Phone.
6................................  E-mail.
7................................  Start of the Reporting Period.
8................................  End of the Reporting Period.
9................................  Report Generation Date.
10...............................  Number of Rows.
11...............................  Text Indicators.
12...............................  Field Delimiters.
13...............................  Blank Line.
14...............................
------------------------------------------------------------------------

SoundExchange comments Exhibit B at 8 (May 27, 2005).

    NRBMLC/Salem object to SoundExchange's requested format for a file 
with headers on multiple grounds. First, they assert that the contact 
information on the first six lines should not be required since 
preexisting subscription services are not required to report such 
information in a file with headers. See 37 CFR 270.2. Second they 
assert that there is no reason to require lines 7 and 8 because the 
information contained therein already appears in the file name. Third, 
they assert that line 9 is completely unnecessary because the report 
generation date has nothing to do with the distribution of royalties. 
And fourth, NRBMLC/Salem submit that row 10 is unnecessary because the 
information has nothing to do with a station's music use.
    NRBMLC/Salem comments Exhibit 2 at 7-8.
    NRBMLC/Salem assert that files with headers should resemble the 
format followed by the webcasters that generate playlists. They propose 
the following requirements for files with headers:
    i. A file identifying the data fields conforming to the following 
specifications with accompanying header information:
    1. The file may identify the sound recordings performed on a 
particular day or during a particular multiple-day reporting period.
    2. The file must contain at least the fields required to be 
reported * * * but may contain additional fields. If the file contains 
data concerning sound recording transmissions spanning more than one 
day, the date of transmission of each sound recording shall also be 
specified in each data record.
    3. The Service shall provide header information that identifies the 
required fields of information and the order in which they appear in 
the file. The header information shall include field identifiers from 
the following list:
    a. DATE, to identify the date on which a sound recording was 
performed;
    b. TITLE, to identify the title of the sound recording;
    c. ARTIST, to identify the featured performing artist;
    d. ALBUM, to identify the album from which the sound recording was 
played, if, in fact, the sound recording was played from an album and 
if that information is in the source file that was used to create the 
playlist;
    e. LABEL, to identify the record label that distributes the sound 
recording, if that information is in the source file that was used to 
create the playlist;
    f. LISTENER, to identify the estimated number of listeners who 
heard the particular sound recording performed; and
    g. IRREL, to identify irrelevant fields not required to be 
reported.
    4. At the Service's option, header information may be embedded in 
the file as the first line of data, or it may be provided to the 
Collective \3\ separately. The Service shall notify the Collective of 
the means of transmitting such header information.
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    \3\ The ``Collective'' in this instance is SoundExchange, and 
possibly Royalty Logic if its proposal for inclusion is adopted.
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    5. At the Service's option, information concerning the estimated 
number of listeners to particular sound recordings may be submitted in 
a separate file with accompanying header information including, without 
limitation, the DATE and LISTENER field identifiers set forth above * * 
*
    6. Notwithstanding the above requirements, output files generated 
by

[[Page 43367]]

a Broadcaster's music scheduling or digital automation software shall 
be deemed to be in an acceptable format provided that they are 
accompanied by header information described above to identify the data 
fields contained therein.

NRBMLC/Salem reply comments Tab A at 2-4 (September 30, 2002) (footnote 
added).

    Questions:
    1. How are files with headers typically organized? Are there any 
generally recognized standards for music reporting? What are the 
software requirements and costs associated with creating data files 
with headers?
    2. Given that preexisting subscription services are not required by 
Copyright Office regulations to report the data contained in the first 
six lines of SoundExchange's proposal, what are the costs/benefits to 
requiring this information in each data file?
    3. Given that lines 7 and 8 of the header information contained in 
SoundExchange's proposal are already reported in the file name, what 
are the costs/benefits of requiring them to be repeated in each data 
file?
    4. To what extent must the header information in SoundExchange's 
proposal be provided in the requested order? Is any variance possible? 
What are the costs/benefits associated with variances?
    5. What are the problems, if any, associated with the NRBMLC/Salem 
proposal for files with headers? Do they present compatibility issues 
with the SoundExchange data processing system and, if so, what are 
those issues?
    6. Can there be flexibility in the regulations for the creation of 
files with headers or must the regulations be rigid?

H. Field Delimiters and Text Indicators

    SoundExchange proposes the field delimiter for a data string be a 
pipe (`` [bond] '') and that the text indicator be a carat 
(``[caret]'') and that in no instance may a field delimiter or text 
indicator appear in a data string. SoundExchange comments Exhibit B at 
8 (May 27, 2005). Harvard and NRBMLC/Salem propose the use of commas 
for field delimiters and quotes as text delimiters, arguing that these 
are the industry standards. NRBMLC/Salem comments at 1-2 (May 27, 
2005).
    Questions:
    1. What are the industry standards for use of field delimiters and 
text delimiters? Should particular ones be specified in the 
regulations? To what extent is flexibility acceptable in their 
selection?
    2. What problems will be created by allowing the use of commas and 
quotes as field delimiters and text indicators, respectively? How can 
such problems, if any, be avoided?

I. Data Fields

    SoundExchange requests that all data appearing in data fields be in 
upper case characters (ex. THE ROLLING STONES). SoundExchange comments 
Exhibit B at 11 (May 27, 2005). CBI submits that while the:
    [U]se [of] all capital letters in the data fields might be 
convenient for SoundExchange, [it] is a substantial problem for 
stations in numerous ways. Stations that have existing databases would 
have to go back and change every record in their database, not an 
insignificant prospect. This would be a time consuming task that would 
also likely induce additional errors in the database. Stations that 
manually enter the data by hand at the time of use will likely 
encounter many unintentional cases of the data being entered 
improperly. Further, those that utilize this data for other uses will 
likely not want the data to be in all capital letters, which would 
require such stations to maintain two separate databases.

CBI comments at 10 (May 27, 2005).

    Questions:
    1. What are the costs/benefits of requiring all data fields to be 
in upper case characters? Will the SoundExchange data processing system 
accept lower case characters in a data field and combinations thereof?
    2. What is the industry standard for data fields?

J. Abbreviations

    SoundExchange requests that there not be any abbreviations 
permitted in the data fields. SoundExchange comments Exhibit B at 11 
(May 27, 2005). CBI, NRBMLC/Salem and WHRB object. CBI submits that 
disallowing abbreviations will increase the likelihood of data entry 
errors due to the voluntary nature of staff and/or the requirement 
would ``cause a major expense and/or disruption'' to their existing 
practices. CBI comments at 11 (May 27, 2005). NRBMLC/Salem states that 
``[t]he very concept that there is a ``standard'' manner of inputting 
title and artist information in light of the many ways in which 
stations receive music and the varying practices amongst broadcasters 
defies common sense.'' NRBMLC/Salem reply comments at 7 (October 10, 
2002). WHRB argues that SoundExchange should be required to ``compile 
and make publicly available a comprehensive, universal database to 
identify sound recordings.''

WHRB comments at 8 (May 27, 2005).

    Questions:
    1. What problems, if any, does allowing abbreviations within data 
fields present to SoundExchange's data processing system? How can these 
be addressed?
    2. Can a set of rules be developed that permit abbreviations within 
data fields and, if so, what should these rules be?
    3. What are the burdens and costs associated with the creation and 
maintenance of a data-base of sound recording titles, album titles, 
artists' names, etc. by SoundExchange? What should be the functionality 
of such a database? How could such a database be utilized to reduce the 
overall costs of reporting records of use?

K. Files Without Headers

    SoundExchange requests the following format requirements for data 
files without headers:
    (1) ASCII delimited format, using pipe ( [bond] ) characters as 
delimiters, with no headers or footers;
    (2) Carets ([caret]) should be used as the text indicator, 
surrounding alphanumeric data elements such as name of Service, 
transmission category, channel name, artist, song title, album;
    (3) No carets ([caret]) should surround dates and numbers;
    (4) A carriage return must be at the end of each line; [and]
    (5) All data for one record should be on a single line.

SoundExchange comments Exhibit B at 11 (May 27, 2005)(sixth format 
requirement omitted).

    NRBMLC/Salem proposes different requirements for files without 
headers:
    A file containing data records only, with no header information, 
and conforming to the following specifications.
    1. The file may identify the sound recordings performed on a 
particular day or during a particular multiple-day reporting period.
    2. The file must contain only the fields required to be reported * 
* *, in a particular order reasonably agreed upon by the Service and 
the Collective.
    3. At the Service's option, information concerning the estimated 
number of listeners to particular sound recordings may be submitted in 
a separate file containing date and listener information in an order 
reasonably agreed upon by the Service and the Collective.

NRBMLC/Salem reply comments Tab A at 4 (September 30, 2002).

    Questions:
    1. Are there industry standards for compiling data files without 
headers and, if so, what are they? What are the

[[Page 43368]]

costs/benefits of compiling data files without headers versus those 
with headers?
    2. How flexible can the format requirements be for files without 
headers? What are the options?
    3. Can categories of data be submitted in separate files or must it 
all be submitted in a single file? What is the capability of 
SoundExchange's data processing system to handle more than one file of 
data per Service?
    4. To what extent could it be permissible to allow automated 
services to report playlist data in native form to SoundExchange?

IV. Legal and Policy Questions

    In addition to the specific technical questions presented above, 
interested persons are also encouraged to supply their views on the 
following questions of a more general nature.
    Questions:
    1. Did Congress, in 17 U.S.C. 114(f)(4)(A) and 112(e)(4), require 
the Copyright Royalty Judges to prescribe particular formatting and 
delivery requirements at the level of detail described in the April 27, 
2005, notice of proposed rulemaking? Is there some relevant set of 
Internet conventions or practices that could guide the Board in setting 
data submission standards here?
    2. Could a system of webcast sampling, analogous to the sampling 
performed by performing rights societies in the context of 
broadcasting, meet the record-of-use requirements of 17 U.S.C. 
114(f)(4)(A) and 112(e)(4)?
    3. Under the provisions of any final rule adopted to implement the 
notice and record of use requirements of 17 U.S.C. 114(f)(4)(A) and 
112(e)(4), either copyright owners (in the form of their agent, 
SoundExchange) or licensees will be burdened with having to change 
their existing data systems. From a legal and a policy perspective, on 
whom is it most appropriate to place these burdens? Is the court's 
discussion in Amusement and Music Operators Association v. Copyright 
Royalty Tribunal, 676 F.2d 1144, 1154-55 (7th Cir. 1982), cert. denied, 
459 U.S. 907 (1982) (``depriv[ing] copyright owners of increased 
remuneration for the exploitation of their works by showing that some * 
* * operations will become unprofitable is * * * unsound and unjust'') 
pertinent to this inquiry?

V. Encouragement of Settlement

    As the Copyright Office has repeatedly stated, it would be far 
preferable for the parties to reach their own agreement on these 
formatting and delivery issues. Government regulation, especially at 
this level of detail, is an undesirable substitute for industry 
agreement. The parties who will be affected by the format and delivery 
regulations should confer and advise the Board if some or all of them 
can jointly propose solutions with respect to any of the issues raised 
in these proceedings.

    Dated: July 21, 2005.
Bruce G. Forrest,
Interim Chief Copyright Royalty Judge.
[FR Doc. 05-14872 Filed 7-26-05; 8:45 am]
BILLING CODE 1410-72-P