[Federal Register Volume 71, Number 3 (Thursday, January 5, 2006)]
[Notices]
[Pages 624-625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-8309]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2005-5 CARP]


Notice of Intent To Audit

AGENCY: Copyright Office, Library of Congress.

ACTION: Public notice.

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SUMMARY: The Copyright Office of the Library of Congress is announcing 
receipt of eleven notices of intent to audit eligible nonsubscription 
and new subscription services that transmit sound recordings under 
statutory licenses. The audits intend to verify statements of account 
for the years 2002, 2003, and 2004.

FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, Associate General 
Counsel, or Gina Giuffreda, Attorney-Advisor, Copyright Arbitration 
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 
20024-0977. Telephone: (202) 707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: Section 106(6) of the Copyright Act, title 
17 of the United States Code, gives the copyright owner of a sound 
recording the right to perform the sound recording publicly by means of 
a digital audio transmission, subject to certain limitations. Among 
these limitations are certain exemptions and a statutory license which 
allows for the public performance of sound recordings as part of 
``eligible nonsubscription transmissions'' and digital transmissions 
made by ``new subscription services.'' \1\ 17 U.S.C. 114. Moreover, 
these services may make any necessary ephemeral reproductions to 
facilitate the digital transmission of the sound recording under a 
second license set forth in section 112(e) of the Copyright Act. Use of 
these licenses requires that services make payments of royalty fees to 
and file reports of sound recording performances with SoundExchange. 
SoundExchange is a collecting rights entity that was designated by the 
Librarian of Congress to collect statements of account and royalty fee 
payments from services and distribute the royalty fees to copyright 
owners and performers entitled to receive such royalties under sections 
112(e) and 114(g) following a proceeding \2\ before a Copyright 
Arbitration Royalty Panel (``CARP'')--the entity responsible for 
setting rates and terms for use of the section 112 and section 114 
licenses prior to the passage of the Copyright Royalty and Distribution 
Reform Act of 2004

[[Page 625]]

(``CRDRA''), Public Law No. 108-419, 118 Stat. 2341.
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    \1\ 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 a part of a 
service that provides audio programming consisting in whole or in 
part of performances of sound recordings the primary purpose of 
which is to provide audio or entertainment programming, but not to 
sell, advertise, or promote particular goods or services. See 17 
U.S.C. 114(j)(6).
    A ``new subscription service'' is ``a service that performs 
sound recordings by means of noninteractive subscription digital 
audio transmissions and that is not a preexisting subscription or a 
preexisting satellite digital audio radio service.'' 17 U.S.C. 
114(j)(8).
    \2\ See 69 FR 5693 (February 6, 2004).
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    This Act, which the President signed into law on November 30, 2004, 
and which became effective on May 31, 2005, amends the Copyright Act, 
title 17 of the United States Code, by phasing out the CARP system and 
replacing it with three permanent Copyright Royalty Judges (``CRJs''). 
Consequently, the CRJs will carry out the functions heretofore 
performed by the CARPs, including the adjustment of rates and terms for 
certain statutory licenses such as the section 114 and 112 licenses. 
However, section 6(b)(3) of the Act states in pertinent part:

    [t]he rates and terms in effect under section 114(f)(2) or 
112(e) * * * on December 30, 2004, for new subscription services 
[and] eligible nonsubscription services * * * shall remain in effect 
until the later of the first applicable effective date for successor 
terms and rates * * * or such later date as the parties may agree or 
the Copyright Royalty Judges may establish.

Successor rates and terms for these licenses have not yet been 
established. Accordingly, the terms of the section 114 and 112 
licenses, as currently constituted, are still in effect.

    One of the current terms, set forth in Sec.  262.6 of title 37 of 
the Code of Federal Regulations, states that SoundExchange, as the 
Designated Agent, may conduct a single audit of a Licensee for the 
purpose of verifying their royalty payments. As a preliminary matter, 
the Designated Agent is required to submit a notice of its intent to 
audit a Licensee with the Copyright Office and serve this notice on the 
service to be audited. 37 CFR 262.6(c).
    On December 23, 2005, SoundExchange filed with the Copyright Office 
eleven notices of intent to audit the following eligible 
nonsubscription and new subscription services for the years 2002, 2003, 
and 2004: Bonneville International Corporation; \3\ Susquehanna Radio 
Corp.; \4\ RealNetworks, Inc.; \5\ Clear Channel Communications, Inc.; 
\6\ America Online, Inc.; \7\ Beethoven Radio; \8\ MTV Networks; \9\ 
Microsoft Corporation; \10\ Live365, Inc.; \11\ Cox Radio Interactive; 
\12\ and Yahoo!, Inc. \13\ As stated in Sec.  262.6(c), the Copyright 
Office then is required to publish a notice in the Federal Register 
within thirty days of receipt of the filing announcing the Designated 
Agent's intent to conduct an audit.
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    \3\ A copy of the Notice of Intent to Audit Bonneville 
International Corporation is posted on the Copyright Office website 
at http://www.copyright.gov/carp/bonneville-notice.pdf.
    \4\ A copy of the Notice of Intent to Audit Susquehanna Radio 
Corp. is posted on the Copyright Office website at http://www.copyright.gov/carp/susquehanna-notice.pdf.
    \5\ A copy of the Notice of Intent to Audit RealNetworks, Inc. 
is posted on the Copyright Office website at http://www.copyright.gov/carp/realnetworks-notice.pdf.
    \6\ A copy of the Notice of Intent to Audit Clear Channel 
Communications, Inc. is posted on the Copyright Office website at 
http://www.copyright.gov/carp/clearchannel-notice.pdf.
    \7\ A copy of the Notice of Intent to Audit America Online, Inc. 
is posted on the Copyright Office website at http://www.copyright.gov/carp/aol-notice.pdf.
    \8\ A copy of the Notice of Intent to Audit Beethoven Radio is 
posted on the Copyright Office website at http://www.copyright.gov/carp/beethoven-notice.pdf.
    \9\ A copy of the Notice of Intent to Audit MTV Networks is 
posted on the Copyright Office website at http://www.copyright.gov/carp/mtv-notice.pdf.
    \10\ A copy of the Notice of Intent to Audit Microsoft 
Corporation is posted on the Copyright Office website at http://www.copyright.gov/carp/microsoft-notice.pdf.
    \11\ A copy of the Notice of Intent to Audit Live365, Inc. is 
posted on the Copyright Office website at http://www.copyright.gov/carp/live365-notice.pdf.
    \12\ A copy of the Notice of Intent to Audit Cox Radio 
Interactive is posted on the Copyright Office website at http://www.copyright.gov/carp/coxradio-notice.pdf.
    \13\ A copy of the Notice of Intent to Audit Yahoo!, Inc. is 
posted on the Copyright Office website at http://www.copyright.gov/carp/yahoo-notice.pdf.
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    In accordance with this regulation, the Office is publishing 
today's notice to fulfill this requirement with respect to 
SoundExchange's eleven notices of intent to audit identified herein.

    Dated: December 30, 2005.
Tanya M. Sandros,
Associate General Counsel.
 [FR Doc. E5-8309 Filed 1-4-06; 8:45 am]
BILLING CODE 1410-33-P