[Federal Register Volume 75, Number 164 (Wednesday, August 25, 2010)]
[Rules and Regulations]
[Pages 52267-52269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20956]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. 2005-5]
Waiver of Statement of Account Filing Deadline for the 2010/1
Period
AGENCY: Copyright Office, Library of Congress.
ACTION: Extension of Cable Statement of Account Filing Deadline
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SUMMARY: The Copyright Office extends the deadline for the filing of
the 2010/1 cable statements of account to September 29, 2010. In
granting the extension, the Office waives the filing requirements under
Section 201.17(c)(1) of its rules. The passage of the Satellite
Television Extension and Localism Act of 2010 (STELA) and the
subsequent work by the Office to revise the cable statements of
account, in light of STELA(s amendments to the Copyright Act, have
impaired the timely availability of the on-line forms cable operators
use to pay their royalty fees. These circumstances will make it
extremely difficult for many cable operators to comply with the current
deadline. For these reasons, therefore, the Office deems the extension
necessary and in the public interest.
EFFECTIVE DATES: August 25, 2010.
FOR FURTHER INFORMATION CONTACT: Ben Golant, Assistant General Counsel,
and Tanya M. Sandros, Deputy General Counsel, Copyright GC/I&R, P.O.
Box 70400, Washington, DC 20024. Telephone: (202) 707-8380. Telefax:
(202) 707-8366.
SUPPLEMENTARY INFORMATION: Section 111 of the Copyright Act (``Act''),
title 17 of the United States Code (``Section 111''), provides cable
operators with a statutory license to retransmit a performance or
display a work embodied in a primary transmission made by a television
station licensed by the Federal Communications Commission (``FCC'').
Cable systems that retransmit broadcast signals in accordance with the
provisions governing the statutory license set forth in Section 111 are
required to pay royalty fees to the Copyright Office (``Office'').
Payments made under the cable statutory license are remitted semi-
annually to the Office which invests the royalties in United States
Treasury securities pending distribution of these funds to those
copyright owners who are entitled to receive a share of the fees.
Congress recently passed the Satellite Television Extension and
Localism Act
[[Page 52268]]
of 2010 (``STELA``), Pub. L. No. 111-175 (2010). STELA amended the
cable statutory license found in Section 111 of the Copyright Act as
well as the distant and local satellite licenses found in Sections 119
and 122, respectively.\1\ Among other updates, the new law revised the
rates for the cable retransmission of distant broadcast signals and
changed the method for calculating royalty fees. Cable operators now
pay royalties on a ``community-by-community`` basis (that is, according
to ``subscriber groups'') rather than on a system-wide basis as had
been the case before STELA amended Section 111(d) of the Act. In
addition, STELA now requires cable operators to pay for the
retransmission of distant multicast streams in certain instances. STELA
also broadened the definition of ``local service area'' found in
Section 111(f) of the Act to accommodate a digital television station`s
technical service area. The President signed STELA on May 27, 2010,
with a retroactive effective date of February 27, 2010.
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\1\One of STELA`s principal purposes was to reauthorize the
satellite carrier distant broadcast signal license for another five
years. Congress also amended the licenses to take into account the
recent digital broadcast television transition and the ability of
digital television stations to split their signal into several sub-
channels (i.e., ``multicasting'').
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Cable operators must pay royalties under the Section 111 license on
a semi-annual basis using a Statement of Account (``SOA'') form\2\
developed by the Office.\3\ Section 111 does not establish a specific
deadline upon which a cable operator must file its SOA with the Office.
Instead, Congress had left it to the Office to implement a filing
schedule to fulfill the mandates found in the statute. See 37 CFR
201.17(c)(1). Cable operators that file their statement of accounts
late must add interest to their royalty payment. See 37 CFR
201.17(i)(4).
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\2\There are two types of Statement of Account forms. The Form
SA1-2 is for smaller cable operators (cable television systems whose
semiannual gross receipts are less than $527,600). The Form SA3 is
for larger cable operators (cable television systems whose
semiannual gross receipts are $527,600 or more).
\3\The Office receives about 4,800 statement of account forms
from cable operators each accounting period.
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The SOAs are available in a print format, a PDF format, and a
software ``fill-in'' format created by Gralin Associates, Inc.\4\ The
first two forms are freely available from the Office either by mail or
by accessing them via the web at copyright.gov. Cable operators have to
pay Gralin for the right to use its specialized software. It is
estimated that about 40%-45% of all cable statement of account forms
filed with the Office have been prepared using the Gralin form since
the software was first made available in1985.
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\4\Gralin is a specialty software company, unaffiliated with the
government, that custom designs ``filler'' forms for cable operators
and other businesses. Gralin touts the following benefits of using
its SOA software: (1) generates a single database containing
information for all cable system`s Statement of Account information;
(2) allows editing of data for subsequent filings; (3) performs the
necessary royalty fee calculations for short and long forms; (4)
available for use on an unlimited number of computers in a single
location; (5) database may be located on a server accessible by all
system users at a single location; and (6) prints the cable system`s
Statement of Account on images of the Copyright Office prescribed
forms. See http://www.gralin.net (Last accessed on August 13, 2010).
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The Office recently revised the cable statement of account forms in
light of the recent STELA amendments to Section 111. The new SA3 form
now reflects the royalty rate adjustments found in STELA and includes,
inter alia, modifications to accommodate the reporting of subscriber
groups and multiple channel line-ups and the retransmission of
multicast streams. The paper and PDF versions of the form have been
available to cable operators since the second week in July. However,
the Gralin SOA ``fill-in'' form, which is usually released at or about
the same time as the paper version in years past, was not made publicly
available until August 6, 2010. This form was delayed because it had to
undergo performance tests over a period spanning several days. As such,
cable operators who have relied on the Gralin form have been unable to
access it or use it until very recently.
NCTA request. On August 12, 2010, the National Cable and
Telecommunications Association (``NCTA'') filed a letter with the
Office seeking an extension, for 30 days, of the filing deadline for
cable copyright Statements of Account covering the first accounting
period of 2010.\5\
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\5\Letter from Diane Burstein, Deputy General Counsel, NCTA, to
Marybeth Peters, Register of Copyrights, dated August 12, 2010.
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NCTA explains that Section 111(d)(2) of the Act requires cable
operators to file semi-annual Statements of Account. It then states
that Section 201.17(c)(1) of the Office`s regulations provide that
those filings ``shall be deposited in the Copyright Office, together
with the total royalty fee for such accounting periods as prescribed by
Section 111(d)(1) (B), (C), or (D) of title 17, by not later than the
immediately following August 29, if the SOA covers the January 1
through June 30 accounting period....'' It also notes that Section
201.17(i)(4) of the Office`s regulations state that royalty fee
payments ``submitted as a result of late or amended filings'' must
include interest. NCTA requests that the Office issue a waiver so that
SOAs currently due August 30, 2010, instead would be due September 29,
2010. NCTA adds that pursuant to its waiver request, SOA filings made
by that date would be considered timely and no interest would be
assessed, but that SOA filings made after September 29, 2010, would be
assessed interest from September 30, 2010, until the filing date.
NCTA comments that this one-time waiver is warranted in light of
the changes to the Statement of Account forms and associated
calculations resulting from Congress's adoption of STELA leaving little
time for making the necessary changes to the SOA forms that must be
used for the first accounting period of 2010. It adds that many cable
operators that file SOAs for multiple cable systems use commercial
software to facilitate those filings. It remarks that this software was
not approved by the Office for use until August 6, 2010. According to
NCTA, even after the software`s release, cable operators using the
software have discovered problems that have delayed their ability to
input necessary data.\6\
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\6\Id. It appears that NCTA is referring to Gralin without
stating so directly.
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NCTA asserts that granting the waiver will be in the public
interest. It states that additional time will help operators accurately
complete their SOA filings, thus reducing the need to file supplemental
or amended SOAs. It adds that providing sufficient time so operators
can make that single filing will also alleviate burdens on the Office.
NCTA asserts that it is authorized to represent that Program Suppliers,
Joint Sports Claimants, Commercial Television Claimants, Public
Television Claimants, Music Claimants, Devotional Claimants, National
Public Radio and Canadian Claimants (collectively, the ``Phase I
Claimants'') do not oppose the granting by the Copyright Office of this
one-time waiver.\7\
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\7\Id.
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Discussion. We grant NCTA's request to waive the filing requirement
under Section 201.17(c)(1) of the Office's rules and extend the filing
deadline to Septemeber 29, 2010. We recognize that the passage of STELA
in the late Spring of this year, and the subsequent work by the Office
to revise the cable statements of account, have impaired the timely
availability of the forms cable operators use to pay their royalty
fees, especially the revised Gralin form. While we recognize that the
paper and PDF versions of the SOA have been available since July, many
large and small cable
[[Page 52269]]
operators have continued to rely on the Gralin form to fulfill their
SOA reporting and filing requirement under Section 111. Given that the
Gralin form had been made available well in advance of the first day of
the 60-day filing period in years past, operators had reasonably
expected that it would be ready to use at or about the same time this
year. However, through no fault of their own, the cable operators
relying on Gralin did not have access to the revised Gralin form until
August 6 this year, reducing to about three weeks the time they would
have had to process and file their forms in the absence of a waiver. We
recognize that complying with the existing deadline would be an
arduous, and perhaps insurmountable task, for many cable operators
particularly those who would have to file hundreds of forms during
these last three weeks.
Further, as NCTA indicates, there are still minor problems with the
Gralin software that have been discovered after its official release on
August 6th. Cable operators should not be held accountable for matters
beyond their control. The grant of the requested waiver will permit
Gralin an additional amount of time to fix the problems with its
software so that the SOA filings will be both accurate and complete.\8\
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\8\Gralin has reported that the glitches in its software have
led, in limited instances, to difficulties in reporting certain data
points and printing of the SA3 form. The Office is currently working
with Gralin to resolve these glitches.
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We also agree with NCTA when it states that additional time will
help operators accurately complete their SOA filings, thus reducing the
need to file supplemental or amended SOAs. It is evident that providing
sufficient time so operators can make that single filing will alleviate
burdens on the cable industry as well as the Copyright Office and
produce more accurate filings. In this context, a waiver will serve the
interest of the public because it will reduce unnecessary paperwork and
further the efficient administration and processing of the incoming
SOAs.
NCTA has also indicated that copyright owner groups would not
oppose a thirty day extension of the filing deadline, and the Office
has received confirmation from representatives of the copyright owner
groups that this is the case. On this point, we note that the Office is
waiving a procedural deadline and not a substantive royalty
requirement. Cable operators will still be paying the royalties that
are due under the Section 111 framework, albeit under a modified
timeline. Thus, in light of the problems associated with providing
forms and the lack of any opposition from those who have a direct stake
in the filing of the statements of account and the timely receipt of
royalty payments, the Office perceives no reason to deny the request.
Finally, we note that waivers are rarely granted by the Office.
However, the action taken today is necessary because of unique,
extenuating circumstances.\9\
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\9\See Filing of Claims for DART Royalty Funds, 68 FR 74481
(Dec. 24, 2003), citing Northeast Cellular Telephone Company v. FCC,
897 F.2d 1164, 1166 (D.C. Cir. 1990) (holding that a waiver of an
agency`s rules is ``appropriate only if special circumstances
warrant a deviation from the general rule and such deviation will
serve the public interest.'').
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We hereby waive Section 201.17(c)(1) and extend the date for filing
cable statements of account to September 29, 2010. Accordingly,
interest will be assessed pursuant to Section 201.17(i)(4) for late
payments made after September 29, 2010.
Dated: August 18,2010
Marybeth Peters,
Register of Copyrights,
U.S. Copyright Office.
[FR Doc. 2010-20956 Filed 8-24-10; 8:45 am]
BILLING CODE 1410-30-S