[Federal Register Volume 73, Number 135 (Monday, July 14, 2008)]
[Page 40392]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15952]



Copyright Office

[Docket No. 2008-6]

Notice of Intent to Audit

AGENCY: Copyright Office, Library of Congress.

ACTION: Public notice.


SUMMARY: The Copyright Office of the Library of Congress is announcing 
receipt of six notices of intent to audit various eligible 
nonsubscription and new subscription services that transmit sound 
recordings under statutory licenses. The audits intend to verify 
statements of account for the year 2005.

FOR FURTHER INFORMATION CONTACT: Tanya M. Sandros, General Counsel, 
P.O. Box 70400, 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.'' \1\ 17 U.S.C. 114. Moreover, these services 
may make any necessary ephemeral reproductions to facilitate the 
digital transmission of a 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'') that set rates for the year 2005. 69 FR 5693 
(Feb. 6, 2004). CARP was 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 

    \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. 

    The CRDRA, 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 are now responsible for 
carrying 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, verification of 
statements of account for 2005 are still governed by Sec.  262.6 of 
title 37 of the Code of Federal Regulations, which 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 June 27, 2008, the Copyright Office received six notices of 
intent to audit, which were submitted by SoundExchange. The notices 
announced an intent to audit the following eligible new subscription 
services for the year 2005: Yahoo!, Inc.; Real Networks, Inc.; and 
Last.fm, Ltd. The notices also announced an intent to audit the 
following eligible nonsubscription transmission services for the year 
2005: Yahoo!, Inc.; Real Networks, Inc.; AOL LLC; MTV Networks; 
Susquehanna Radio Corp.; and Last.fm, Ltd.\2\

    \2\ A copy of the Notices of Intent to Audit is posted on the 
Copyright Office Web site at http://www.copyright.gov/carp/AuditNotices2005.pdf SoundExchange also stated in the notice its 
intent to audit Last.fm Ltd. for the calendar years 2006 and 2007. 
Verification of statements of account for 2006 and 2007 are governed 
by 37 CFR 380.6 of the CRJs' regulations. See 73 FR 15778 (Mar. 25, 

    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. In 
accordance with this regulation, the Office is publishing today's 
notice to fulfill this requirement with respect to the notices of 
intent to audit as received from SoundExchange on June 27, 2008.

    Dated: July 8, 2008
Tanya M. Sandros,
General Counsel.
[FR Doc. E8-15952 Filed 7-11-08; 8:45 am]