[Federal Register Volume 71, Number 211 (Wednesday, November 1, 2006)]
[Notices]
[Pages 64317-64318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-18422]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2006-6]


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 a notice of intent to audit 2005 statements of account 
concerning the eligible nonsubscription and subscription transmissions 
of sound recordings made by Live365, Inc. (``Live365'') under statutory 
licenses.

FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, Associate General 
Counsel, Copyright GC/I&R, P.O. Box 70400, 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 a 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.'' 17 U.S.C. 114. The Copyright Act, title 17 of 
the United States Code, defines these terms as follows:

     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).

    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 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 (``CRDRA''), Pub. L. No. 
108-419, 118 Stat. 2341 (2004). See 69 FR 5695 (February 6, 2004).
    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 
a notice of intent to audit Live365 for the years 2002, 2003, and 2004. 
See 72 FR 624 (January 5, 2006). Subsequently, on October 5, 2006, 
SoundExchange filed a second notice of intent to audit Live365,\1\ 
pursuant to Sec.  262.6(c), notifying the Copyright Office of its 
intent to expand its current audit to cover 2005. Section 262.6(c) 
requires the Copyright Office 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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    \1\ A copy of the new Notice of Intent to Audit Live365, Inc. is 
posted on the Copyright Office Web site at http://www.copyright.gov/carp/live365-notice.2005.pdf.
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    In accordance with this regulation, the Office is publishing 
today's notice to fulfill this requirement with respect to

[[Page 64318]]

the notice of intent to audit filed by SoundExchange on October 5, 
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2006.

    Dated: October 26, 2006
Tanya M. Sandros,
Associate General Counsel.
[FR Doc. E6-18422 Filed 10-31-06; 8:45 am]
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