[Federal Register Volume 73, Number 250 (Tuesday, December 30, 2008)]
[Proposed Rules]
[Pages 79727-79734]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-30976]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 370

[Docket No. RM 2008-7]


Notice and Recordkeeping for Use of Sound Recordings Under 
Statutory License

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Copyright Royalty Judges, on behalf of the Copyright 
Royalty Board, are proposing to revise its interim regulations for 
filing notice of use and the delivery of records of use of sound 
recordings under two statutory licenses of the Copyright Act.

DATES: Comments are due no later than January 29, 2009.

ADDRESSES: Comments may be sent electronically to [email protected]. In the 
alternative, send an original, five copies, and an electronic copy on a 
CD either by mail or hand delivery. Please do not use multiple means of 
transmission. Comments may not be delivered by an overnight delivery 
service other than the U.S. Postal Service Express Mail. If by mail 
(including overnight delivery), comments must be addressed to: 
Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977. If 
hand delivered by a private party, comments must be brought to the 
Copyright Office Public Information Office, Library of Congress, James 
Madison Memorial Building, Room LM-401, 101 Independence Avenue, SE., 
Washington, DC 20559-6000. If delivered by a commercial courier, 
comments must be delivered between 8:30 a.m. and 4 p.m. to the 
Congressional Courier Acceptance Site located at 2nd and D Street, NE., 
Washington, DC, and the envelope must be addressed to: Copyright 
Royalty Board, Library of Congress, James Madison Memorial Building, 
LM-403, 101 Independence Avenue, SE., Washington, DC 20559-6000.

FOR FURTHER INFORMATION CONTACT: Richard Strasser, Senior Attorney, or 
Gina Giuffreda, Attorney Advisor, by telephone at (202) 707-7658 or e-
mail at [email protected].

SUPPLEMENTARY INFORMATION: On October 6, 2006, the Copyright Royalty 
Judges (``Judges''), on behalf of the Copyright Royalty Board 
(``Board''), issued interim regulations published in the Federal 
Register for the delivery and format of reports of use of sound 
recordings for the statutory licenses set forth in sections 112 and 114 
of the Copyright Act, title 17 of the United States Code. 71 FR 59010. 
As part of the Judges' continuing oversight of regulations governing 
notice of use and the delivery of records of use of sound recordings 
under these two statutory licenses, we herewith propose such final 
regulations.

I. Overview

    Digital audio services transmit performances of copyrighted sound 
recordings of music to the users of those services. In order to 
transmit these performances, however, a digital audio service must 
license the copyrights to each musical work, as well as the sound 
recording of the musical work.\1\ With respect to the copyright in the 
sound recording, the digital audio service may seek to obtain a 
licensing agreement directly with the copyright owner or, if it is an 
eligible service,\2\ may choose to license use of the sound recording 
through statutory licenses set forth in the Copyright Act. There are 
two such licenses that enable an eligible digital audio service to 
perform a copyrighted sound recording for its listeners: section 114 
and section 112 of the Copyright Act. Section 114 permits an eligible 
digital audio service to perform copyrighted sound recordings to its 
listeners, provided that the terms and conditions set forth in section 
114, including the payment of a royalty fee, are met. Section 112 
permits an eligible digital audio service to make the digital copies of 
a sound recording that are necessary to transmit a sound recording to 
listeners, provided again that the terms and conditions set forth in 
section 112, including the payment of a royalty fee, are met.
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    \1\ Recorded music typically involves two separate copyrights. 
There is a copyright for the song itself--the lyrics and the music--
and there is a separate copyright for the sound recording of the 
music. The copyright to the musical work typically belongs to the 
songwriter and/or his or her music publisher, and the copyright to 
the sound recording is typically owned by the record company that 
recorded it.
    \2\ These services include preexisting subscription services, 
preexisting satellite digital audio radio services, business 
establishment services, nonsubscription services and new 
subscription services.
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    The royalty fees collected under the two statutory licenses are 
paid to a central source known as a Collective. See 37 CFR 370. Before 
the Collective,\3\ or other agents designated to receive royalties from 
the Collective, can make a royalty payment to an individual

[[Page 79728]]

copyright owner, they must know the use the eligible digital audio 
service has made of the sound recording. To obtain this information, 
both section 112 and section 114 direct the Judges to prescribe 
regulations that identify the use of copyrighted sound recordings, as 
well as provide copyright owners with notice that a particular eligible 
digital audio service is making use of the section 112 and/or 114 
license. See 17 U.S.C. 112(e)(4) and 114(f)(4)(A).
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    \3\ SoundExchange, Inc., originally created by the Recording 
Industry Association of America, Inc. on behalf of its member 
companies, is currently the Collective for receiving both section 
112 and 114 royalties.
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    Interim regulations setting forth the filing requirements for 
notice of use, the types of information that constitute a record of use 
of a particular sound recording, the format of the record of use data 
and the acceptable means of delivering such use data to the Collective, 
have already been adopted. 71 FR 59010 (October 6, 2006). However, the 
Judges, as part of their continuing oversight of these regulations, 
have identified certain portions of the regulations that are obsolete 
as well as other portions that are duplicative. Obsolete provisions are 
proposed to be eliminated. Definitions previously duplicated in the 
various sections of these regulations are proposed to be gathered into 
a new single definition section applicable throughout this Part unless 
otherwise indicated within a specific section.
    Effectively, the Judges propose only one substantial change--to 
expand the reporting period to implement census reporting. In addition, 
as indicated herein below, the Judges also welcome comments on 
technological developments that may imply the need for further 
adjustment of the rules either in terms of the method of reporting 
specific data elements or with respect to the delivery mechanism 
employed for reporting.
    As with the interim regulations adopted in 2006, the final 
regulations proposed in this document represent baseline requirements. 
In other words, digital audio services are free to negotiate other 
formats and technical standards for data maintenance and delivery and 
may use those in lieu of regulations adopted by the Judges, upon 
agreement with the Collective. We have no intention of codifying these 
negotiated variances in the future unless and until they come into such 
standardized use as to supersede the existing regulations.

II. General Definitions

    As the regulations governing reports of use covering different 
services have evolved over time and resulted in somewhat different 
reporting requirements for the different services, several separate 
sections of the interim regulations are devoted to one or more of the 
various services. Yet at the same time, certain basic definitions share 
a common meaning across these various sections. The Judges have 
identified nine common terms that are currently defined in different 
definition subsections within the current interim regulations. These 
terms include: (1) Notice of Use, (2) Service, (3) Preexisting 
Subscription Service, (4) New Subscription Service, (5) Nonsubscription 
Transmission Service, (6) Preexisting Satellite Digital Audio Radio 
Service, (7) Business Establishment Service, (8) Collective and (9) 
Report of Use. In the interest of administrative efficiency, the Judges 
propose a new Sec.  370.1, General Definitions, to provide definitions 
for these nine terms that will apply generally throughout Part 370, 
unless otherwise specifically indicated. To that end, duplicative 
definitions of these nine common terms that currently appear in other 
sections of this Part are proposed to be removed. In addition to the 
efficiency gains this proposed change would bring for users of these 
regulations, it is anticipated that the identification of such common 
terminology will also encourage their usage among services and 
collectives in their negotiations and, thus, facilitate the negotiation 
process over rates and terms.

III. Obsolete Provisions

    On November 30, 2004, the President signed into law the Copyright 
Royalty and Distribution Reform Act of 2004 (``Reform Act''), Public 
Law 108-419, 118 Stat. 2341. The Reform Act, among other things, 
transferred the authority for prescribing notice and recordkeeping 
regulations for sections 112 and 114 from the Librarian of Congress 
(``Librarian'') and the Copyright Office to the Judges. The Reform Act 
went into effect on May 31, 2005, just after the Copyright Office 
published a Notice of Proposed Rulemaking on April 27, 2005 proposing 
regulations for the format and delivery of reports of use. 70 FR 21704. 
As notice and recordkeeping rulemaking authority passed to the Judges 
under the Reform Act, the subsequent interim regulation was issued 
under their authority. However, the interim regulation on notice of use 
and recordkeeping retained a rule identical to the one adopted by the 
Copyright Office addressing reports of use under the section 112 and 
114 licenses for the period October 28, 1998 through March 31, 2004. 
Similarly, the interim regulation retained requirements for reporting 
certain category transmission codes for certain services relevant to 
noncommercial and small commercial webcasters reporting for 2003 and 
2004 pursuant to the Small Webcaster Settlement Act of 2002, Public Law 
107-321, 116 Stat. 2780.
    In adopting the current interim regulation on October 6, 2006, the 
Judges indicated that even though jurisdiction for adopting notice and 
recordkeeping rules as of that date lay solely with the Judges, it was 
not their intention in the interim regulation to revisit the rules the 
Librarian and Copyright Office adopted, and further, that the Judges 
would replicate the notice and recordkeeping provisions then located in 
Part 270 of the Copyright Office's regulations in the interest of 
placing all regulations related to notice and recordkeeping under the 
section 112 and 114 licenses within the same part number in the CFR.\4\ 
However, the Judges indicated they would monitor the operation of those 
regulations and request public comment in the future as to the need for 
amendment or improvement prior to adopting final regulations.
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    \4\ It should be noted, however, that the Copyright Office has 
not repealed its similar Part 270 regulations.
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    Because the prior Copyright Office final rule addressing reports of 
use under the section 112 and 114 licenses for the period October 28, 
1998 through March 31, 2004 has been superseded for subsequent periods 
by the current interim regulation, the Judges propose the deletion of 
all references to this prior period reporting requirement. Similarly, 
inasmuch as the requirements for reporting certain category 
transmission codes for certain services (i.e., noncommercial and small 
commercial webcasters reporting for 2003 and 2004 pursuant to the 
provisions of the Small Webcaster Settlement Act of 2002) have expired 
by their terms, the Judges propose the deletion of the requirement for 
reporting such category transmission codes information.

IV. Reports of Use Content and Reporting Period; Census Reporting

    Currently, services must provide the total number of performances 
of each sound recording during the relevant reporting period. However, 
the relevant reporting period is limited to two periods of seven 
consecutive days for each calendar quarter of the year. This results in 
an estimate of the use of a sound recording rather than a report of 
actual use. The failure to report the full actual number of 
performances of a sound recording is at odds with the purpose of the 
recordkeeping

[[Page 79729]]

requirement to the extent that, as a result, many sound recordings are 
under-compensated or not compensated at all from the section 114 and 
112 royalties. On the other hand, where it is not possible to 
technologically obtain the necessary listenership data, some reasonable 
alternative means of estimating total actual performances should be 
available to the reporting services.
    When the Copyright Office adopted interim regulations in 2004 
during an earlier phase of the recordkeeping rulemaking process (prior 
to transfer of recordkeeping rulemaking authority to the Judges), the 
Copyright Office determined it was advisable to phase in the new 
reporting process by requiring periodic reporting of sound recording 
performances rather than year-round census reporting. However, in doing 
so, the Copyright Office announced that: ``Once final regulations are 
implemented, year-round census reporting is likely to be the standard 
measure rather than the periodic reporting that will now be permitted 
on an interim basis.'' 69 FR 11526 (March 11, 2004). Given that ample 
time has passed since the adoption of the new reporting requirements to 
facilitate familiarity with the methods of acquiring and keeping the 
necessary data for compliance, the Judges propose to adopt year-round 
census reporting at this time. For nonsubscription services, such 
census reporting requires full reporting of the actual total 
performances of the sound recording for each calendar quarter of the 
year.\5\ To the extent that technological impediments to measuring 
actual listenership continue to hamper actual listenership measurement 
with respect to each sound recording for preexisting satellite digital 
audio radio services, new subscription services or business 
establishment services, the alternative of census reporting by means of 
a construct utilizing aggregate tuning hours \6\ is maintained for such 
services.\7\
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    \5\ In other words, the proposed rule eliminates the aggregate 
tuning hours approach to reporting previously available to 
nonsubscription services. It should be noted that the aggregate 
tuning hours payment alternative to the per performance rate 
available to certain webcasters was phased out as of the end of the 
2007 calendar year. Digital Performance Right in Sound Recordings 
and Ephemeral Recordings, Final rule, 72 FR 24096 n.33 (May 1, 
2007).
    \6\ This alternative requires an estimate of census reporting by 
means of reporting the following data for each calendar quarter: 
Aggregate tuning hours, channel or program name and play frequency.
    \7\ It should be noted that in the recent preexisting satellite 
digital audio radio service (``SDARS'') ratemaking proceeding, the 
collective (SoundExchange) requested that the recordkeeping 
regulations be amended to require census reporting and the services 
did not object to census reporting in general so long as the current 
reporting exceptions in Sec.  370.3(b)(8)(i)-(iii) were retained. 
Determination of Rates and Terms for Preexisting Subscription 
Services and Satellite Digital Audio Radio Services, Final rule and 
Order, 73 FR 4101 (January 24, 2008). The Judges' proposed 
recordkeeping rule retains those exceptions. See proposed Sec.  
370.4(b)(3)(i)-(iii).
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V. Requests for Further Information

    The organization and format in which recordkeeping data is to be 
maintained for delivery to collectives has been the subject of 
considerable disagreement between copyright owners and users over the 
years. While we have no desire to revisit the same disagreements that 
the parties have previously commented on at length, we are interested 
in determining if further improvements to the reporting regulations can 
be made in light of recent technological developments, newly available 
software or substantially reduced costs for certain delivery mechanism 
alternatives. In particular, we are interested in answers to several 
specific factual questions.

A. Spreadsheets and Other Commercially Available Software for 
Completing Reports of Use

    Although the NPRM only addresses commercially available 
spreadsheets as a means of creating records of use, the Board is 
interested in knowing what, if any, software has become commercially 
available since the promulgation of the interim regulation that could 
be used to compile records of use.

Questions:

    What, if any, commercially available software has become available 
since the promulgation of the interim regulation in 2006 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?

B. 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: CD-ROM delivery must 
compress the reporting data to fit onto a single CD-ROM per reporting 
period; FTP delivery requires securing username and password; floppy 
diskettes must measure 3.5 inches in diameter). SoundExchange has 
previously 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:

    Have technological developments or software improvements reduced 
the average estimated costs of creating and maintaining a Web site for 
receipt of records of use since the interim regulation was promulgated 
in 2006? Have data security methods improved since the promulgation of 
the interim regulation such that maintaining a Web site for receipt of 
records of use is now subject only to the same general level of risks 
as other methods of electronic delivery? What are the current security 
concerns and how may they be addressed? Is there now commercially 
available software that could facilitate the electronic delivery of 
reports of use to a Web site and, if so, would the benefits of such 
software justify its costs? Is it more efficient for the Collective to 
develop a system to report and deliver the records of use and make that 
system available to the Services?
    In addition to the particular technical questions presented above, 
interested persons are also encouraged to supply their views on the 
following questions of a more general nature.

Questions:

    What further improvements to the reporting regulations can be made 
in light of recent technological developments, newly available software 
or substantially reduced costs for certain delivery mechanism 
alternatives since the promulgation of the interim regulation? To what 
extent are such improvements currently being utilized in negotiated 
agreements between services and SoundExchange?

List of Subjects in 37 CFR Part 370

    Copyright, Sound recordings.

Proposed Regulations

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to revise 37 CFR Part 370 to read as follows:

PART 370--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY 
LICENSES

Sec.
370.1 General definitions.
370.2 Notice of use of sound recordings under statutory license.
370.3 Reports of use of sound recordings under statutory license for 
preexisting subscription services.
370.4 Reports of use of sound recordings under statutory license for 
nonsubscription transmission services, preexisting satellite digital 
audio radio

[[Page 79730]]

services, new subscription services and business establishment 
services.
370.5 Designated collection and distribution organizations for 
reports of use of sound recordings under statutory license.

    Authority: 17 U.S.C. 112(e)(4), 114(f)(4)(A).


Sec.  370.1  General definitions.

    For purposes of this part, the following definitions apply:
    (a) A Notice of Use of Sound Recordings Under Statutory License is 
a written notice to sound recording copyright owners of the use of 
their works under section 112(e) or 114(d)(2) of title 17, United 
States Code, or both, and is required under this part to be filed by a 
Service in the Copyright Office.
    (b) A Service is an entity engaged in either the digital 
transmission of sound recordings pursuant to section 114(d)(2) of title 
17 of the United States Code or making ephemeral phonorecords of sound 
recordings pursuant to section 112(e) of title 17 of the United States 
Code or both. The definition of a Service includes an entity that 
transmits an AM/FM broadcast signal over a digital communications 
network such as the Internet, regardless of whether the transmission is 
made by the broadcaster that originates the AM/FM signal or by a third 
party, provided that such transmission meets the applicable 
requirements of the statutory license set forth in 17 U.S.C. 114(d)(2). 
A Service may be further characterized as either a preexisting 
subscription service, preexisting satellite digital audio radio 
service, nonsubscription transmission service, new subscription 
service, business establishment service or a combination of those.
    (c) A Preexisting Subscription Service is defined in 17 U.S.C. 
114(j)(11).
    (d) A New Subscription Service is defined in 17 U.S.C. 114(j)(8).
    (e) A Nonsubscription Transmission Service is a service that makes 
noninteractive nonsubscription digital audio transmissions that are not 
exempt under section 114(d)(1) of title 17 of the United States Code 
and are made as part of a service that provides audio programming 
consisting, in whole or in part, of performances of sound recordings, 
including transmissions of broadcast transmissions, if the primary 
purpose of the service is to provide to the public such audio or other 
entertainment programming, and the primary purpose of the service is 
not to sell, advertise, or promote particular products or services 
other than sound recordings, live concerts, or other music-related 
events.
    (f) A Preexisting Satellite Digital Audio Radio Service is defined 
in 17 U.S.C. 114(j)(10).
    (g) A Business Establishment Service is a service that makes 
ephemeral phonorecords of sound recordings pursuant to section 112(e) 
of title 17 of the United States Code and is exempt under section 
114(d)(1)(C)(iv) of title 17 of the United States Code.
    (h) A Collective is a collection and distribution organization that 
is designated under one or both of the statutory licenses by 
determination of the Copyright Royalty Judges.
    (i) A Report of Use is a report required to be provided by a 
Service that is transmitting sound recordings pursuant to the statutory 
license set forth in section 114(d)(2) of title 17 of the United States 
Code or making ephemeral phonorecords of sound recordings pursuant to 
the statutory license set forth in section 112(e) of title 17 of the 
United States Code, or both.


Sec.  370.2  Notice of use of sound recordings under statutory license.

    (a) General. This section prescribes rules under which copyright 
owners shall receive notice of use of their sound recordings when used 
under either section 112(e) or 114(d)(2) of title 17, United States 
Code, or both.
    (b) Forms and content. A Notice of Use of Sound Recordings Under 
Statutory License shall be prepared on a form that may be obtained from 
the Copyright Office Web site or from the Licensing Division, and shall 
include the following information:
    (1) The full legal name of the Service that is either commencing 
digital transmissions of sound recordings or making ephemeral 
phonorecords of sound recordings under statutory license or doing both.
    (2) The full address, including a specific number and street name 
or rural route, of the place of business of the Service. A post office 
box or similar designation will not be sufficient except where it is 
the only address that can be used in that geographic location.
    (3) The telephone number and facsimile number of the Service.
    (4) Information on how to gain access to the online Web site or 
homepage of the Service, or where information may be posted under this 
section concerning the use of sound recordings under statutory license.
    (5) Identification of each license under which the Service intends 
to operate, including identification of each of the following 
categories under which the Service will be making digital transmissions 
of sound recordings: preexisting subscription service, preexisting 
satellite digital audio radio service, nonsubscription transmission 
service, new subscription service or business establishment service.
    (6) The date or expected date of the initial digital transmission 
of a sound recording to be made under the section 114 statutory license 
and/or the date or the expected date of the initial use of the section 
112(e) license for the purpose of making ephemeral phonorecords of the 
sound recordings.
    (7) Identification of any amendments required by paragraph (e) of 
this section.
    (c) Signature. The Notice shall include the signature of the 
appropriate officer or representative of the Service that is either 
transmitting the sound recordings or making ephemeral phonorecords of 
sound recordings under statutory license or doing both. The signature 
shall be accompanied by the printed or typewritten name and the title 
of the person signing the Notice and by the date of the signature.
    (d) Filing notices; fees. The original and three copies shall be 
filed with the Licensing Division of the Copyright Office and shall be 
accompanied by the filing fee set forth in Sec.  201.3(c) of this 
title. Notices shall be placed in the public records of the Licensing 
Division. The Notice and filing fee shall be sent to the Licensing 
Division at either the address listed on the form obtained from the 
Copyright Office or to: Library of Congress, Copyright Office, 
Licensing Division, 101 Independence Avenue, SE., Washington, DC 20557-
6400. A Service that, on or after July 1, 2004, shall make digital 
transmissions and/or ephemeral phonorecords of sound recordings under 
statutory license shall file a Notice of Use of Sound Recordings under 
Statutory License with the Licensing Division of the Copyright Office 
prior to the making of the first ephemeral phonorecord of the sound 
recording and prior to the first digital transmission of the sound 
recording.
    (e) Amendment. A Service shall file a new Notice of Use of Sound 
Recordings under Statutory License within 45 days after any of the 
information contained in the Notice on file has changed, and shall 
indicate in the space provided by the Copyright Office that the Notice 
is an amended filing. The Licensing Division shall retain copies of all 
prior Notices filed by the Service.


Sec.  370.3  Reports of use of sound recordings under statutory license 
for preexisting subscription services.

    (a) General. This section prescribes the rules for the maintenance 
and delivery of reports of use for sound recordings under section 
112(e) or section 114(d)(2) of title 17 of the

[[Page 79731]]

United States Code, or both, by preexisting subscription services.
    (b) Delivery. Reports of Use shall be delivered to Collectives that 
are identified in the records of the Licensing Division of the 
Copyright Office as having been designated by determination of the 
Copyright Royalty Judges. Reports of Use shall be delivered on or 
before the forty-fifth day after the close of each month.
    (c) Posting. In the event that no Collective is designated under 
the statutory license, or if all designated Collectives have terminated 
collection and distribution operations, a preexisting subscription 
service transmitting sound recordings under statutory license shall 
post and make available online its Reports of Use. Preexisting 
subscription services shall post their Reports of Use online on or 
before the forty-fifth day after the close of each month, and continue 
to make them available thereafter to all sound recording copyright 
owners for a period of 90 days. Preexisting subscription services may 
require use of passwords for access to posted Reports of Use, but must 
make passwords available in a timely manner and free of charge or other 
restrictions. Preexisting subscription services may predicate provision 
of a password upon:
    (1) Information relating to identity, location and status as a 
sound recording copyright owner; and
    (2) A ``click-wrap'' agreement not to use information in the Report 
of Use for purposes other than royalty collection, royalty 
distribution, and determining compliance with statutory license 
requirements, without the express consent of the preexisting 
subscription service providing the Report of Use.
    (d) Content. A ``Report of Use of Sound Recordings under Statutory 
License'' shall be identified as such by prominent caption or heading, 
and shall include a preexisting subscription service's ``Intended 
Playlists'' for each channel and each day of the reported month. The 
``Intended Playlists'' shall include a consecutive listing of every 
recording scheduled to be transmitted, and shall contain the following 
information in the following order:
    (1) The name of the preexisting subscription service or entity;
    (2) The channel;
    (3) The sound recording title;
    (4) The featured recording artist, group, or orchestra;
    (5) The retail album title (or, in the case of compilation albums 
created for commercial purposes, the name of the retail album 
identified by the preexisting subscription service for purchase of the 
sound recording);
    (6) The marketing label of the commercially available album or 
other product on which the sound recording is found;
    (7) The catalog number;
    (8) The International Standard Recording Code (ISRC) embedded in 
the sound recording, where available and feasible;
    (9) Where available, the copyright owner information provided in 
the copyright notice on the retail album or other product (e.g., 
following the symbol (P), that is the letter P in a circle) or, in the 
case of compilation albums created for commercial purposes, in the 
copyright notice for the individual sound recording;
    (10) The date of transmission; and
    (11) The time of transmission.
    (e) Signature. Reports of Use shall include a signed statement by 
the appropriate officer or representative of the preexisting 
subscription service attesting, under penalty of perjury, that the 
information contained in the Report is believed to be accurate and is 
maintained by the preexisting subscription service in its ordinary 
course of business. The signature shall be accompanied by the printed 
or typewritten name and title of the person signing the Report, and by 
the date of signature.
    (f) Format. Reports of Use should be provided on a standard 
machine-readable medium, such as diskette, optical disc, or magneto-
optical disc, and should conform as closely as possible to the 
following specifications:
    (1) ASCII delimited format, using pipe characters as delimiter, 
with no headers or footers;
    (2) Carats should surround strings;
    (3) No carats should surround dates and numbers;
    (4) Dates should be indicated by: MM/DD/YYYY;
    (5) Times should be based on a 24-hour clock: HH:MM:SS;
    (6) A carriage return should be at the end of each line; and
    (7) All data for one record should be on a single line.
    (g) Confidentiality. Copyright owners, their agents and Collectives 
shall not disseminate information in the Reports of Use to any persons 
not entitled to it, nor utilize the information for purposes other than 
royalty collection and distribution, and determining compliance with 
statutory license requirements, without express consent of the 
preexisting subscription service providing the Report of Use.
    (h) Documentation. All compulsory licensees shall, for a period of 
at least three years from the date of service or posting of the Report 
of Use, keep and retain a copy of the Report of Use.


Sec.  370.4  Reports of use of sound recordings under statutory license 
for nonsubscription transmission services, preexisting satellite 
digital audio radio services, new subscription services and business 
establishment services.

    (a) General. This section prescribes rules for the maintenance and 
delivery of reports of use of sound recordings under section 112(e) or 
section 114(d)(2) of title 17 of the United States Code, or both, by 
nonsubscription transmission services, preexisting satellite digital 
audio radio services, new subscription services, and business 
establishment services.
    (b) Definitions. (1) Aggregate Tuning Hours are the total hours of 
programming that a nonsubscription transmission service, preexisting 
satellite digital audio radio service, new subscription service or 
business establishment service has transmitted during the reporting 
period identified in paragraph (d)(3) of this section to all listeners 
within the United States over the relevant channels or stations, and 
from any archived programs, that provide audio programming consisting, 
in whole or in part, of eligible nonsubscription service, preexisting 
satellite digital audio radio service, new subscription service or 
business establishment service transmissions, less the actual running 
time of any sound recordings for which the service has obtained direct 
licenses apart from 17 U.S.C. 114(d)(2) or which do not require a 
license under United States copyright law. For example, if a 
nonsubscription transmission service transmitted one hour of 
programming to 10 simultaneous listeners, the nonsubscription 
transmission service's Aggregate Tuning Hours would equal 10. If 3 
minutes of that hour consisted of transmission of a directly licensed 
recording, the nonsubscription transmission service's Aggregate Tuning 
Hours would equal 9 hours and 30 minutes. If one listener listened to 
the transmission of a nonsubscription transmission service for 10 hours 
(and none of the recordings transmitted during that time was directly 
licensed), the nonsubscription transmission service's Aggregate Tuning 
Hours would equal 10.
    (2) An AM/FM Webcast is a transmission made by an entity that 
transmits an AM/FM broadcast signal over a digital communications 
network such as the Internet, regardless of whether the transmission is 
made by the broadcaster that originates the AM/FM signal or by a third 
party, provided that such transmission meets the applicable 
requirements of the statutory license set forth in 17 U.S.C. 114(d)(2).

[[Page 79732]]

    (3) A performance is each instance in which any portion of a sound 
recording is publicly performed to a Listener by means of a digital 
audio transmission or retransmission (e.g., the delivery of any portion 
of a single track from a compact disc to one Listener) but excluding 
the following:
    (i) A performance of a sound recording that does not require a 
license (e.g., the sound recording is not copyrighted);
    (ii) A performance of a sound recording for which the service has 
previously obtained a license from the Copyright Owner of such sound 
recording; and
    (iii) An incidental performance that both:
    (A) Makes no more than incidental use of sound recordings 
including, but not limited to, brief musical transitions in and out of 
commercials or program segments, brief performances during news, talk 
and sports programming, brief background performances during disk 
jockey announcements, brief performances during commercials of sixty 
seconds or less in duration, or brief performances during sporting or 
other public events and
    (B) Other than ambient music that is background at a public event, 
does not contain an entire sound recording and does not feature a 
particular sound recording of more than thirty seconds (as in the case 
of a sound recording used as a theme song).
    (4) Play frequency is the number of times a sound recording is 
publicly performed by a Service during the relevant period, without 
respect to the number of listeners receiving the sound recording. If a 
particular sound recording is transmitted to listeners on a particular 
channel or program only once during the reporting period, then the play 
frequency is one. If the sound recording is transmitted 10 times during 
the reporting period, then the play frequency is 10.
    (c) Delivery. Reports of Use shall be delivered to Collectives that 
are identified in the records of the Licensing Division of the 
Copyright Office as having been designated by determination of the 
Copyright Royalty Judges. Reports of Use shall be delivered on or 
before the forty-fifth day after the close of each month.
    (d) Report of Use. (1) Separate reports not required. A 
nonsubscription transmission service, preexisting satellite digital 
audio radio service or a new subscription service that transmits sound 
recordings pursuant to the statutory license set forth in section 
114(d)(2) of title 17 of the United States Code and makes ephemeral 
phonorecords of sound recordings pursuant to the statutory license set 
forth in section 112(e) of title 17 of the United States Code need not 
maintain a separate Report of Use for each statutory license during the 
relevant reporting periods.
    (2) Content. For a nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service that transmits sound 
recordings pursuant to the statutory license set forth in section 
114(d)(2) of title 17 of the United States Code, or the statutory 
license set forth in section 112(e) of title 17 of the United States 
Code, or both, each Report of Use shall contain the following 
information, in the following order, for each sound recording 
transmitted during the reporting periods identified in paragraph (d)(3) 
of this section:
    (i) The name of the nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service making the transmissions, 
including the name of the entity filing the Report of Use, if 
different;
    (ii) The category transmission code for the category of 
transmission operated by the nonsubscription transmission service, 
preexisting satellite digital audio radio service, new subscription 
service or business establishment service:
    (A) For eligible nonsubscription transmissions other than broadcast 
simulcasts and transmissions of non-music programming;
    (B) For eligible nonsubscription transmissions of broadcast 
simulcast programming not reasonably classified as news, talk, sports 
or business programming;
    (C) For eligible nonsubscription transmissions of non-music 
programming reasonably classified as news, talk, sports or business 
programming;
    (D) For transmissions other than broadcast simulcasts and 
transmissions of non-music programming made by an eligible new 
subscription service;
    (E) For transmissions of broadcast simulcast programming not 
reasonably classified as news, talk, sports or business programming 
made by an eligible new subscription service;
    (F) For transmissions of non-music programming reasonably 
classified as news, talk, sports or business programming made by an 
eligible new subscription service; and
    (G) For eligible transmissions by a business establishment service 
making ephemeral recordings;
    (iii) The featured artist;
    (iv) The sound recording title;
    (v) The International Standard Recording Code (ISRC) or, 
alternatively to the ISRC, the:
    (A) Album title; and
    (B) Marketing label;
    (vi) For a nonsubcription transmission service: the actual total 
performances of the sound recording during the reporting period.
    (vii) For a preexisting satellite digital audio radio service, a 
new subscription service or a business establishment service: the 
actual total performances of the sound recording during the reporting 
period or, alternatively, the:
    (A) Aggregate Tuning Hours;
    (B) Channel or program name; and
    (C) Play frequency.
    (3) Reporting period. A Report of Use shall be prepared for each 
calendar quarter of the year.
    (4) Signature. Reports of Use shall include a signed statement by 
the appropriate officer or representative of the service attesting, 
under penalty of perjury, that the information contained in the Report 
is believed to be accurate and is maintained by the service in its 
ordinary course of business. The signature shall be accompanied by the 
printed or typewritten name and the title of the person signing the 
Report, and by the date of the signature.
    (5) Confidentiality. Copyright owners, their agents and Collectives 
shall not disseminate information in the Reports of Use to any persons 
not entitled to it, nor utilize the information for purposes other than 
royalty collection and distribution, without consent of the service 
providing the Report of Use.
    (6) Documentation. A Service shall, for a period of at least three 
years from the date of service or posting of a Report of Use, keep and 
retain a copy of the Report of Use.
    (e) Format and delivery. (1) Electronic format only. Reports of use 
must be maintained and delivered in electronic format only, as 
prescribed in paragraphs (e)(2) through (8) of this section. A hard 
copy report of use is not permissible.
    (2) ASCII text file delivery; facilitation by provision of 
spreadsheet templates. All report of use data files must be delivered 
in ASCII format. However, to facilitate such delivery, SoundExchange 
shall post and maintain on its Internet Web site a template for 
creating a report of use using Microsoft's Excel spreadsheet and 
Corel's Quattro Pro spreadsheet and instruction on how to convert such 
spreadsheets to ASCII text files that conform to the format 
specifications set forth below. Further, technical support and cost 
associated with the use of spreadsheets is the

[[Page 79733]]

responsibility of the service submitting the report of use.
    (3) Delivery mechanism. The data contained in a report of use may 
be delivered by File Transfer Protocol (FTP), e-mail, CD-ROM, or floppy 
diskette according to the following specifications:
    (i) A service delivering a report of use via FTP must obtain a 
username, password and delivery instructions from SoundExchange. 
SoundExchange shall maintain on a publicly available portion of its Web 
site instructions for applying for a username, password and delivery 
instructions. SoundExchange shall have 15 days from date of request to 
respond with a username, password and delivery instructions.
    (ii) A service delivering a report of use via e-mail shall append 
the report as an attachment to the e-mail. The main body of the e-mail 
shall identify:
    (A) The full name and address of the service;
    (B) The contact person's name, telephone number and e-mail address;
    (C) The start and end date of the reporting period;
    (D) The number of rows in the data file. If the report of use is a 
file using headers, counting of the rows should begin with row 15. If 
the report of use is a file without headers, counting of the rows 
should begin with row 1; and
    (E) The name of the file attached.
    (iii) A service delivering a report of use via CD-ROM must compress 
the reporting data to fit onto a single CD-ROM per reporting period. 
Each CD-ROM shall be submitted with a cover letter identifying:
    (A) The full name and address of the service;
    (B) The contact person's name, telephone number and e-mail address;
    (C) The start and end date of the reporting period;
    (D) The number of rows in the data file. If the report of use is a 
file using headers, counting of the rows should begin with row 15. If 
the report of use is a file without headers, counting of the rows 
should begin with row 1; and
    (E) The name of the file attached.
    (iv) A service delivering a report of use via floppy diskette must 
compress the reporting data to fit onto a single floppy diskette per 
reporting period. Each floppy diskette must measure 3.5 inches in 
diameter and be formatted using MS/DOS. Each floppy diskette shall be 
submitted with a cover letter identifying:
    (A) The full name and address of the service;
    (B) The contact person's name, telephone number and e-mail address;
    (C) The start and end date of the reporting period;
    (D) The number of rows in the data file. If the report of use is a 
file using headers, counting of the rows should begin with row 15. If 
the report of use is a file without headers, the counting of the rows 
should begin with row 1; and
    (E) The name of the file attached.
    (4) Delivery address. Reports of use shall be delivered to 
SoundExchange at the following address: SoundExchange, Inc., 1121 14th 
Street, NW., Suite 700, Washington, DC 20005; (Phone) (202) 640-5858; 
(Facsimile) (202) 640-5859; (E-mail) [email protected]. 
SoundExchange shall forward electronic copies of these reports of use 
to all other collectives defined in this section.
    (5) File naming. Each data file contained in a report of use must 
be given a name by the service followed by the start and end date of 
the reporting period. The start and end date must be separated by a 
dash and in the format of day, month and year (YYYYMMDD). Each file 
name must end with the file type extension of ``.txt''. (Example: 
AcmeMusicCo20050101-20050331.txt).
    (6) File type and compression. (i) All data files must be in ASCII 
format.
    (ii) A report of use must be compressed in one of the following 
zipped formats:
    (A) .zip--generated using utilities such as WinZip and/or UNIX zip 
command;
    (B) .Z--generated using UNIX compress command; or
    (C) .gz--generated using UNIX gzip command.
    (iii) Zipped files shall be named in the same fashion as described 
in paragraph (e)(5) of this section, except that such zipped files 
shall use the applicable file extension compression name described in 
this paragraph (e)(6).
    (7) Files with headers. (i) If a service elects to submit files 
with headers, the following elements, in order, must occupy the first 
14 rows of a report of use:
    (A) Name of service;
    (B) Name of contact person;
    (C) Street address of the service;
    (D) City, state and zip code of the service;
    (E) Telephone number of the contact person;
    (F) E-mail address of the contact person;
    (G) Start of the reporting period (YYYYMMDD);
    (H) End of the reporting period (YYYYMMDD);
    (I) Report generation date (YYYYMMDD);
    (J) Number of rows in data file, beginning with 15th row;
    (K) Text indicator character;
    (L) Field delimiter character;
    (M) Blank line; and
    (N) Report headers (Featured Artist, Sound Recording Title, etc.).
    (ii) Each of the rows described in paragraphs (e)(7)(i)(A) through 
(F) of this section must not exceed 255 alphanumeric characters. Each 
of the rows described in paragraphs (e)(7)(i)(G) through (I) of this 
section should not exceed eight alphanumeric characters.
    (iii) Data text fields, as required by paragraph (d) of this 
section, begin on row 15 of a report of use with headers. A carriage 
return must be at the end of each row thereafter. Abbreviations within 
data fields are not permitted.
    (iv) The text indicator character must be unique and must never be 
found in the report's data content.
    (v) The field delimiter character must be unique and must never be 
found in the report's data content. Delimiters must be used even when 
certain elements are not being reported; in such case, the service must 
denote the blank data field with a delimiter in the order in which it 
would have appeared.
    (8) Files without headers. If a service elects to submit files 
without headers, the following format requirements must be met:
    (i) ASCII delimited format, using pipe ([verbar]) characters as 
delimiters, with no headers or footers;
    (ii) Carats ([caret]) should surround strings;
    (iii) No carats ([caret]) should surround dates and numbers;
    (iv) A carriage return must be at the end of each line;
    (v) All data for one record must be on a single line; and
    (vi) Abbreviations within data fields are not permitted.


Sec.  370.5  Designated collection and distribution organizations for 
reports of use of sound recordings under statutory license.

    (a) General. This section prescribes rules under which reports of 
use shall be collected and distributed under section 114(f) of title 17 
of the United States Code, and under which reports of such use shall be 
kept and made available.
    (b) Notice of Designation as Collective under Statutory License. A 
Collective shall file with the Licensing Division of the Copyright 
Office and post and make available online a ``Notice of Designation as 
Collective under Statutory License,'' which shall be identified as such 
by prominent caption or heading, and shall contain the following 
information:
    (1) The Collective name, address, telephone number and facsimile 
number;

[[Page 79734]]

    (2) A statement that the Collective has been designated for 
collection and distribution of performance royalties under statutory 
license for digital transmission of sound recordings; and
    (3) Information on how to gain access to the online Web site or 
home page of the Collective, where information may be posted under this 
part concerning the use of sound recordings under statutory license. 
The address of the Licensing Division is: Library of Congress, 
Copyright Office, Licensing Division, 101 Independence Avenue, SE., 
Washington, DC 20557-6400.
    (c) Annual Report. The Collective will post and make available 
online, for the duration of one year, an Annual Report on how the 
Collective operates, how royalties are collected and distributed, and 
what the Collective spent that fiscal year on administrative expenses.
    (d) Inspection of Reports of Use by copyright owners. The 
Collective shall make copies of the Reports of Use for the preceding 
three years available for inspection by any sound recording copyright 
owner, without charge, during normal office hours upon reasonable 
notice. The Collective shall predicate inspection of Reports of Use 
upon information relating to identity, location and status as a sound 
recording copyright owner, and the copyright owner's written agreement 
not to utilize the information for purposes other than royalty 
collection and distribution, and determining compliance with statutory 
license requirements, without express consent of the Service providing 
the Report of Use. The Collective shall render its best efforts to 
locate copyright owners in order to make available reports of use, and 
such efforts shall include searches in Copyright Office public records 
and published directories of sound recording copyright owners.
    (e) Confidentiality. Copyright owners, their agents, and 
Collectives shall not disseminate information in the Reports of Use to 
any persons not entitled to it, nor utilize the information for 
purposes other than royalty collection and distribution, and 
determining compliance with statutory license requirements, without 
express consent of the Service providing the Report of Use.
    (f) Termination and dissolution. If a Collective terminates its 
collection and distribution operations prior to the close of its term 
of designation, the Collective shall notify the Licensing Division of 
the Copyright Office, the Copyright Royalty Board and all Services 
transmitting sound recordings under statutory license, by certified or 
registered mail. The dissolving Collective shall provide each such 
Service with information identifying the copyright owners it has 
served.

    Dated: December 23, 2008.
Stanley C. Wisniewski,
Copyright Royalty Judge.
 [FR Doc. E8-30976 Filed 12-29-08; 8:45 am]
BILLING CODE 1410-72-P