[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Notices]
[Pages 80969-80970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33037]



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LIBRARY OF CONGRESS

Copyright Royalty Board

[Docket Nos. 2007-3 CRB CD 2004-2005, 2008-4 CRB CD 2006, 2009-6 CRB CD 
2007, 2010-6 CRB CD 2008, 2011-7 CRB 2009; 2010-2 CRB SD 2004-2007, 
2010-7 CRB 2008, 2011-8 CRB SD 2009]


Distribution of the 2004-2009 Cable and Satellite Royalty Funds

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Notice requesting comments on Phase I and II controversies and 
soliciting objections on motions for further distribution.

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SUMMARY: The Copyright Royalty Judges are soliciting objections on 
motions of the Phase I claimants for further distributions in 
connection with the 2004-2009 cable and satellite royalty funds as well 
as requesting comments as to the existence of Phase I and Phase II 
controversies with respect to the distribution of these royalty funds.

DATES: Comments and objections are due on or before January 26, 2012.

ADDRESSES: Comments and objections 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 and objections 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 and objections must be addressed to: Copyright Royalty Board, 
P.O. Box 70977, Washington, DC 20024-0977. If hand delivered by a 
private party, comments and objections must be brought to the Library 
of Congress, James Madison Memorial Building, LM-401, 101 Independence 
Avenue SE., Washington, DC 20559-6000. If delivered by a commercial 
courier, comments and objections must be delivered to the Congressional 
Courier Acceptance Site located at 2nd and D Street, NE., Washington, 
DC. 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: LaKeshia Keys, Program Specialist, by 
telephone at (202) 707-7658 or by email at [email protected].

SUPPLEMENTARY INFORMATION: 

Background

    Each year cable systems and satellite carriers must submit royalty 
payments to the Copyright Office as required by the statutory licenses 
set forth in sections 111 and 119, respectively, of the Copyright Act, 
title 17 of the United States Code, for the retransmission to cable and 
satellite subscribers of over-the-air television broadcast stations 
(cable subscribers also receive radio broadcast signals). These 
royalties are then distributed to copyright owners whose works were 
included in such a qualifying transmission and who timely filed a claim 
for royalties. Distribution of the royalties for each calendar year is 
conducted by the Copyright Royalty Judges in two phases. At Phase I, 
the royalties are divided among the representatives of the major 
categories of copyrightable content (movies, sports programming, music, 
etc.) requesting the distribution. At Phase II, the royalties are 
divided among the various copyright owners within each category.
    Distribution of royalties in any given royalty year may be made 
through a negotiated settlement among the parties. 17 U.S.C. 
111(d)(4)(A), 119(b)(4)(A). If, however, the claimants do not reach an 
agreement with respect to the proper distribution of the royalties, 
either at Phase I or Phase II, the Copyright Royalty Judges are 
required to conduct a proceeding to determine the distribution of any 
royalties that remain in controversy. 17 U.S.C. 111(d)(4)(B), 
119(b)(4)(B).

Notices of Phase I Settlement and Motions for Further Distribution

    On November 4, 2011, representatives of the Phase I claimant 
categories (the ``Phase I Parties'') \1\ filed with the Judges separate 
``Phase I Parties' Notice of Phase I Settlement and Motion for Further 
Distribution'' \2\ with respect to the 2004-2009 cable and satellite 
royalty funds. Specifically, the Phase I Parties stated that they had 
reached a global ``settlement of all outstanding Phase I controversies 
regarding distribution of the 2004-2009'' cable and satellite royalty 
funds. Motions at 2. Consequently, they requested that the Judges: (1) 
Reserve specified amounts ($20 million of the cable royalties and $13 
million of the satellite royalties)--to be divided equally among each 
of the six years--to satisfy previously identified Phase II 
controversies and (2) authorize the lump-sum distribution of all 
remaining 2004-2009 cable and satellite royalties to the Phase I 
Parties through a common agent. Id. The reserve amounts \3\ would be 
allocated among three categories in which Phase II controversies have 
been identified previously. With regard to the cable royalties, the 
reserve amounts would be: $3 million for the Program Suppliers 
category; $1 million for the Joint Sports category; and $16 million for 
the Devotional category. Cable Motion at 4. Similarly, the reserve 
amounts for the satellite royalties would be: $3 million for the 
Program Suppliers category; $1 million for the Joint Sports category; 
and $9 million for the Devotional category. Satellite Motion at 4.
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    \1\ The ``Phase I Parties'' with regard to the motion for cable 
royalties are the Program Suppliers, Joint Sports Claimants, Public 
Television Claimants, Commercial Television Claimants, Canadian 
Claimants Group, Music Claimants (American Society of Composers, 
Authors and Publishers; Broadcast Music, Inc.; and SESAC, Inc.), 
Devotional Claimants, and National Public Radio.
     Public Television Claimants, Canadian Claimants Group, and 
National Public Radio are not signatories to the motion for 
distribution of satellite royalties as they are not eligible to 
receive these royalties.
    \2\ The further distributions are requested pursuant to section 
801(b)(3)(A) of the Copyright Act, which allows the Judges to 
authorize the distribution of cable and satellite royalties ``to the 
extent that the Copyright Royalty Judges have found that the 
distribution of such fees is not subject to controversy.'' 17 U.S.C. 
801(b)(3)(A). Prior partial distributions of 50% of the cable and 
satellite royalties have been made for each of the years 2004-2009 
pursuant to section 801(b)(3)(C). See Distribution Orders cited 
infra.
    \3\ As of October 27, 2011, the remaining 50% for the 2004-2009 
cable royalties amounted to approximately $462 million and the 
remaining 50% for the 2004-2009 satellite royalties amounted to 
approximately $270 million.
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    The Independent Producers Group (``IPG'') opposes both of the Phase 
I Parties' motions. IPG, which has asserted Phase II claims in each of 
the categories for which reserve amounts are proposed, bases its 
opposition, in part, on its concerns that the proposed reserve amounts 
are inadequate to resolve outstanding Phase II claims. See IPG 
Opposition at 4-5.
    On December 14, 2011, the Judges held a hearing on the Phase I 
Parties' motions, where the Phase I Parties and IPG reiterated their 
respective positions. In light of IPG's continued opposition to the 
Phase I Parties' motions and to determine whether any other 
controversies with respect to the 2004 through 2009 cable and satellite 
royalty funds may be outstanding, the Judges are directing publication 
of this notice. In particular, the Judges solicit comments to determine 
whether there are any controversies, either at Phase I or Phase II, 
with respect to each of the royalty funds that are the subject of the 
motions (i.e., cable or satellite 2004 through 2009).

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Request Regarding Reasonable Objections to the Proposed Settlements

    The Judges also seek to determine whether any interested claimant 
has a reasonable objection that would preclude the requested 
distributions of the 2004-2009 cable and satellite royalty funds to the 
Phase I Parties. Such objections should address whether the reserve 
amounts proposed by the Phase I Parties are adequate by year. If not, 
then what would be an adequate reserve amount to settle all outstanding 
claims for each of the years covered by the proposed settlement? The 
Judges must be advised of the existence and extent of all such 
objections by the end of the comment period. The Judges will not 
consider any objections with respect to the requested distributions 
that come to their attention after the close of that period.
    Finally, the Judges have authorized prior partial distributions of 
50% of each of the 2004-2009 cable and satellite royalties pursuant to 
their authority under section 801(b)(3)(C). See, Distribution Orders, 
Docket No. 2007-3 CRB CD 2004-2005 (April 10, 2008, and April 16, 
2008); Distribution Order, Docket No. 2008-4 CRB CD 2006 (December 2, 
2008); Distribution Order, Docket No. 2009-6 CRB CD 2007 (October 22, 
2009); Distribution Order, Docket No. 2010-6 CRB CD 2008 (January 11, 
2011); Distribution Order, Docket No. 2011-7 CRB CD 2009 (October 13, 
2011); Distribution Order, Docket No. 2010-2 CRB SD 2004-2007 (March 
23, 2010); Distribution Order, Docket No. 2010-7 CRB SD 2008 (January 
11, 2011); and Distribution Order, Docket No. 2011-8 CRB SD 2009 
(October 13, 2011). As a condition of receiving a partial distribution 
under that provision of the Copyright Act, the parties must ``sign an 
agreement obligating them to return any excess amounts to the extent 
necessary to comply with the final determination on the distribution of 
the fees made under [section 801(b)(3)(B)].'' 17 U.S.C. 
801(b)(3)(C)(ii). The Judges seek comment on what conditions, if any, 
should be imposed on the Phase I Parties to ensure that they are 
obligated to repay any amounts with interest that they received in the 
proposed settlement if such amount is later determined to be in excess 
of what a particular Phase I Party is due. For example, should each 
Phase I Party be required to represent that it will repay any 
overpayment or is such obligation already covered by the 
representations that each Phase I Party signed as a condition to 
receiving its respective shares of the earlier partial distributions 
for 2004 through 2009?
    Each Phase I Parties' Notice of Phase I Settlement and Motion for 
Further Distribution is posted on the Copyright Royalty Board (``CRB'') 
Web site at http://www.loc.gov/crb. Comments received in response to 
this Notice also may be posted on the Web site.

    Dated: December 20, 2011.
William J. Roberts, Jr.,
U.S. Copyright Royalty Judge.
[FR Doc. 2011-33037 Filed 12-23-11; 8:45 am]
BILLING CODE 1410-72-P