[Federal Register Volume 82, Number 183 (Friday, September 22, 2017)]
[Proposed Rules]
[Pages 44368-44369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20190]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 387

[Docket No. 15-CRB-0010-CA-S (Sports Rule Proceeding)]


Adjustment of Royalty Rates for Statutory Cable Retransmission 
License

AGENCY: Copyright Royalty Board (CRB), Library of Congress.

ACTION: Request for comments.

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SUMMARY: The Copyright Royalty Judges solicit reply comments on the 
legal issue of the purported reach of the proposed rules relating to a 
cable system license royalty surcharge for retransmission of broadcasts 
of certain professional sports events.

DATES: Reply comments are due on or before October 23, 2017. Surreplies 
from original commenters are due on or before November 1, 2017.

ADDRESSES: You may make replies and surreplies, identified by docket 
number 15-CRB-0010-CA-S (Sports Rule Proceeding), by any of the 
following methods:
    CRB's electronic filing application: Submit comments online in eCRB 
at https://app.crb.gov/.
    U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC 
20024-0977; or
    Overnight service (only USPS Express Mail is acceptable): Copyright 
Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
    Commercial courier: Address package to: Copyright Royalty Board, 
Library of Congress, James Madison Memorial Building, LM-403, 101 
Independence Avenue SE., Washington, DC 20559-6000. Deliver to: 
Congressional Courier Acceptance Site, 2nd Street NE and D Street NE., 
Washington, DC; or
    Hand delivery: Library of Congress, James Madison Memorial 
Building, LM-401, 101 Independence Avenue SE., Washington, DC 20559-
6000.
    Instructions: Unless submitting online, commenters must submit an 
original, five paper copies, and an electronic version on a CD. All 
submissions must include the CRB's name and docket number. All 
submissions received will be posted without change to eCRB on https://app.crb.gov including any personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to eCRB, the Copyright Royalty Board's electronic 
filing and case management system, at https://app.crb.gov/ and search 
for docket number 15-CRB-0010-CA-S (Sports Rule Proceeding). For 
documents not yet uploaded to eCRB (because it is a new system), go to 
the agency Web site at http://www.crb.gov/ or contact the CRB Program 
Specialist.

FOR FURTHER INFORMATION CONTACT: Anita Blaine, CRB Program Specialist, 
by telephone at (202) 707-7658 or email at [email protected].

SUPPLEMENTARY INFORMATION: In May 2017, the Copyright Royalty Judges 
(Judges) published notice of an agreed settlement and proposed rules to 
adjust royalties payable by certain cable system operators for a 
license to retransmit broadcast sports programming (the Sports 
Surcharge Rules). See 82 FR 24611 (May 30, 2017). Specifically, the 
rules as proposed would be applicable to ``Form 3'' cable systems \1\ 
retransmitting ``eligible professional sports events.'' The proposed 
rules define ``eligible professional sports event'' as a game involving 
member teams of Major League Baseball, the National Basketball 
Association, the National Football League, the National Hockey League, 
and the Women's National Basketball Association.\2\
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    \1\ ``Form 3'' cable systems are those with semi-annual gross 
receipts, as defined by statute, greater than $527,600. See 17 
U.S.C. 111(d)(1)(B), (E), & (F).
    \2\ The proposed sports programming surcharge would also apply 
to an ``eligible collegiate sports event'' as that term is defined 
in the proposed regulations. Eligible collegiate sports events are 
limited to games that involve certain Division I football or men's 
basketball teams. Proposed Rule 387.2(e)(5).
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    The Copyright Act (Act) directs that the Judges provide (1) an 
opportunity to comment to nonparticipants who would be bound and (2) an 
opportunity to comment and object to participants who would be bound. 
See 11 U.S.C. 801(b)(7)(A)(i). The Judges may decline to adopt an 
agreement as a basis for statutory terms and rates for ``participants 
that are not parties to the [settlement] agreement,'' if a participant 
objects to the agreement and the Judges conclude that the settlement 
``does not provide a reasonable basis for setting'' rates or terms. Id. 
at Sec.  801(b)(7)(A)(ii).
    The statutory language does not prohibit the Judges from 
considering whether the proposed provisions are contrary to statutory 
law. See [Register of Copyrights] Review of Copyright Royalty Judges 
Determination, Docket no. 2009-1, 74 FR 4537, 4540 (Jan. 26, 2009) 
(Register's Opinion).\3\ In the cited

[[Page 44369]]

opinion, the Register concluded that ``nothing in the statute limits 
the [Judges] from considering comments filed by non-participants if 
those nonparticipant commenters argue that the proposed provisions are 
contrary to statutory law.'' Id. According to the Register's Opinion, 
which is binding precedent for the Judges, the Judges may decline to 
adopt portions of the agreed regulations that would be ``contrary to 
the provisions of the applicable license(s) or otherwise contrary to 
statutory law.'' Id.
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    \3\ The Act permits the Register of Copyrights (Register) to 
review for legal error the Judges' resolution of a material question 
of substantive law under the Act ``that underlies or is contained in 
a final determination'' by the Judges. See 17 U.S.C. 802(f)(1)(D). 
Decisions of the Register are binding as precedent upon the Judges 
in proceedings subsequent to the Register's opinion. Id.
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    The Judges received two comments on the proposed rules before the 
June deadline. Joint Sports Claimants (JSC),\4\ participants and the 
proponents of the settlement, supported adoption of the final rule and 
offered a correction of a misstated cross reference within the rule.
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    \4\ The Joint Sports Claimants (JSC) consists of Major League 
Baseball, the National Basketball Association, the National Football 
League, the National Hockey League, and the Women's National 
Basketball Association.
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    Major League Soccer, L.L.C. (MLS) also commented. In the present 
proceeding, MLS did not file a Petition to Participate; thus MLS is a 
not a participant.\5\ Nonetheless, MLS states that it would be 
``[a]ffected by these proposed rules and their terms.'' MLS Comment at 
2. MLS contends that, even though it is not a participant in this 
proceeding, it clearly meets the [Judges'] description of `Joint Sports 
Claimants' \6\ in that MLS owns copyrights in ``live telecasts of 
professional teams' sports broadcasts by U.S. and Canadian television 
stations. . . .'' Id. As MLS asserted in its comment, the definition of 
``eligible professional sports event'' ``unfairly excludes MLS, and any 
other [unnamed] eligible, professional league that broadcasts live team 
sports.'' Id. at 3. In its comment, MLS contends that its omission 
results in unfair treatment. Id. at 2, 4.
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    \5\ MLS asserted without evidence that it made ``attempts to 
join the JSC ``on a formal basis,'' but that it had ``not yet been 
recognized as a JSC member.'' MLS Comment at 2.
    \6\ See Notice of Participant Groups . . . and Scheduling Order, 
Consolidated Proceeding No. 14-CRB-0010-CD (2010-13) (Nov. 25, 
2015), Ex. A. By its terms, this order limited application of the 
agreed participant groups to the proceeding in which it was adopted. 
The Judges nonetheless consider the categories informative for 
purposes of determining distribution in the present proceeding.
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    According to MLS, ``[s]ince JSC are representatives for, and 
custodians of the funds of, all programs falling within that agreed 
[Joint Sports Claimants] category, [JSC] should represent the interests 
of the entire category, not only those it deems members. The benefits 
of the regulation should apply to a [sic] who fall into the Joint 
Sports Claimants category.'' Id. at 3.
    Although MLS generally states that adoption of the proposal would 
be unfair or inequitable to MLS and certain other omitted professional 
leagues that broadcast live team sports, MLS does not expressly contend 
that the proposal is ``contrary to the provisions of the applicable 
license(s) or otherwise contrary to statutory law,'' which, under the 
Register's Opinion, would permit the Judges to decline to adopt 
portions of the agreed regulations. In the interests of developing a 
more complete record to support the Judges' decision, however, the 
Judges seek further comment specifically addressing the issue of 
whether they must adopt the rules as contained in the settlement 
agreement and published for comment in May 2017, consistent with 
Section 801(b)(7)(A) of the Copyright Act, or whether any provision in 
the proposed rules is contrary to the provisions of the applicable 
license(s) or otherwise contrary to statutory law.
    The Judges hereby solicit Reply Comments limited to legal analysis 
of the issue as the Judges express it. Any party in interest may file 
Reply Comments addressing the issue the Judges present in this Notice. 
Commenters that believe any provision of the proposed rules is contrary 
to the provisions of the applicable license(s) or otherwise contrary to 
statutory law should specify the provision or provisions in question, 
explain why the provision(s) is contrary to the applicable license or 
applicable statutory law, and provide supporting legal analysis. Reply 
commenters should focus particular attention on whether any entities 
not expressly addressed in the proposal would nonetheless be bound by 
the rates and terms of the proposal or otherwise affected by the 
proposed rules and how, if at all, the affect should dictate action by 
the Judges. If any entities other than those expressly included in the 
proposed provisions are bound by the proposal, are the Judges 
effectively adopting a zero sports surcharge rate with respect to those 
entities? If so, what factors justify the different rates for the 
entities that would have a zero rate from those that would receive the 
proposed sports surcharge rate?
    Any commenter may thereafter file Surreply Comments addressing 
specifically the legal analysis of a party or parties filing Reply 
Comments.

    Dated: September 18, 2017.
Suzanne M. Barnett,
Chief U.S. Copyright Royalty Judge.
[FR Doc. 2017-20190 Filed 9-21-17; 8:45 am]
 BILLING CODE 1410-72-P