[Federal Register Volume 83, Number 96 (Thursday, May 17, 2018)]
[Proposed Rules]
[Pages 22907-22908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10509]


-----------------------------------------------------------------------

LIBRARY OF CONGRESS

Copyright Royalty Board

17 CFR Part 384

[Docket No. 17-CRB-0001-BER (2019-2023)]


Determination of Royalty Rates and Terms for Making Ephemeral 
Copies of Sound Recordings for Transmission to Business Establishments 
(Business Establishments III)

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Copyright Royalty Judges (Judges) publish for comment 
proposed regulations that set rates and terms for the making of an 
ephemeral recording of a sound recording by a business establishment 
service for the period January 1, 2019, through December 31, 2023.

DATES: Comments and objections are due no later than June 18, 2018.

ADDRESSES: You may submit comments and objections, identified by docket 
number 17-CRB-0001-BER (2019-2023), 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, two paper copies, and an electronic version on a CD. All 
submissions must include a reference to the CRB and this docket number. 
All submissions will be posted without change to eCRB at https://app.crb.gov/ including any personal information provided.
    Docket: For access to the docket to read submitted background 
documents or comments, go to eCRB, the Copyright Royalty Board's 
electronic filing and case management system, at https://app.crb.gov/ 
and search for docket number 17-CRB-0001-BER (2019-2023).

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

SUPPLEMENTARY INFORMATION: In 1995, Congress enacted the Digital 
Performance in Sound Recordings Act, Public Law 104-39, which created 
an exclusive right, subject to certain limitations, for copyright 
owners of sound recordings to perform publicly those sound recordings 
by means of certain digital audio transmissions. Among the limitations 
on the performance right was the creation of a statutory license for 
nonexempt, noninteractive digital subscription transmissions. 17 U.S.C. 
114(d).
    The scope of the section 114 statutory license was expanded in 1998 
upon the passage of the Digital Millennium Copyright Act of 1998 
(DMCA), Public Law 105-34, which allows public performance of a sound 
recording when made in accordance with the terms and rates of the 
statutory license, by a preexisting satellite digital audio radio 
service or as part of an eligible nonsubscription transmission. 17 
U.S.C. 114(d).
    The DMCA also created a statutory license for the making of an 
``ephemeral recording'' of a sound recording by certain transmitting 
organizations. 17 U.S.C. 112(e). This license, among other things, 
allows entities that transmit performances of sound recordings to 
business establishments to make an ephemeral recording of a sound 
recording for later transmission, pursuant to the limitations set forth 
in section 114(d)(1)(C)(iv).
    Chapter 8 of the Copyright Act requires the Copyright Royalty 
Judges (Judges) to conduct proceedings every five years to determine 
the royalty rates and terms for ``the activities described in section 
112(e)(1) relating to the limitation on exclusive rights specified by 
section 114(d)(1)(C)(iv).'' 17 U.S.C. 801(b)(1), 804(b)(2). 
Accordingly, the Judges published a notice commencing the current 
proceeding and requesting that interested parties submit petitions to 
participate. 82 FR 143 (Jan. 3, 2017).
    The Judges received Petitions to Participate from Mood Media

[[Page 22908]]

Corporation, Music Choice, David Powell, David Rahn, Rockbot, Inc., 
Sirius XM Radio Inc., and SoundExchange, Inc. The Judges initiated the 
three-month negotiation period and directed the participants to submit 
written direct statements no later than May 14, 2018. See 17 U.S.C. 
803(b)(3).
    On May 4, 2018, the Judges received a Motion to Adopt Settlement 
stating that all participants \1\ had reached a settlement obviating 
the need for written direct statements or a hearing.
---------------------------------------------------------------------------

    \1\ Despite filing a Petition to Participate, David Powell did 
not participate in the negotiations and did not join in the agreed 
settlement. The Judges make no finding with regard to Mr. Powell's 
eligibility to participate in this proceeding. Mr. Powell may, of 
course, respond to this notice. To the extent Mr. Powell has an 
interest in the business establishment services license, he will be 
bound by the royalty rates and terms the Judges adopt ultimately.
---------------------------------------------------------------------------

    Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to 
adopt royalty rates and terms negotiated by ``some or all of the 
participants in a proceeding at any time during the proceeding'' 
provided they are submitted to the Judges for approval. The Judges must 
provide ``an opportunity to comment on the agreement'' to both 
participants and non-participants in the rate proceeding who ``would be 
bound by the terms, rates, or other determination set by any agreement 
. . .'' 17 U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may 
also ``object to [the agreement's] adoption as a basis for statutory 
terms and rates.'' Id.
    The Judges ``may decline to adopt the agreement as a basis for 
statutory terms and rates for participants that are not parties to the 
agreement,'' only `` if any participant [to the proceeding] objects to 
the agreement and the [Judges] conclude, based on the record before 
them if one exists, that the agreement does not provide a reasonable 
basis for setting statutory terms or rates.'' 17 U.S.C. 
801(b)(7)(A)(ii).
    Royalty rates and terms adopted pursuant to section 801(b)(7)(A) 
are binding on all copyright owners of sound recordings and all 
business establishment services making an ephemeral recording of a 
sound recording for the period January 1, 2019, through December 31, 
2023.
    The public may comment and object to any or all of the proposed 
regulations contained in this notice. Comments and objections must be 
submitted no later than June 18, 2018.

List of Subjects in 37 CFR Part 384

    Copyright, Digital audio transmissions, Ephemeral recordings, 
Performance right, Sound recordings.

Proposed Regulations

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to amend part 384 of chapter III of title 37 of the Code 
of Federal Regulations as follows:

PART 384--RATES AND TERMS FOR THE MAKING OF EPHEMERAL RECORDINGS BY 
BUSINESS ESTABLISHMENT SERVICES

0
1. The authority citation for part 384 continues to read as follows:

    Authority:  17 U.S.C. 112(e), 801(b)(1).


Sec.  384.1   [Amended]

0
2. In Sec.  384.1 amend paragraph (a) by removing ``January 1, 2014, 
through December 31, 2018'' and adding ``January 1, 2019, through 
December 31, 2023'' in its place.
0
3. Amend Sec.  384.3 by revising paragraph (a) to read as follows and 
in paragraph (b), removing ``$10,000'' and adding ``$20,000.''


Sec.  384.3   Royalty fees for ephemeral recordings.

    (a) Basic royalty rate. (1) For the making of any number of 
Ephemeral Recordings in the operation of a Business Establishment 
Service, a Licensee shall pay a royalty equal to the following 
percentages of such Licensee's ``Gross Proceeds'' derived from the use 
in such service of musical programs that are attributable to 
copyrighted recordings:

------------------------------------------------------------------------
                          Year                               Rate (%)
------------------------------------------------------------------------
2019....................................................            12.5
2020....................................................           12.75
2021....................................................            13.0
2022....................................................           13.25
2023....................................................            13.5
------------------------------------------------------------------------

    (2) ``Gross Proceeds'' as used in this section means all fees and 
payments, including those made in kind, received from any source 
before, during or after the License Period that are derived from the 
use of copyrighted sound recordings during the License Period pursuant 
to 17 U.S.C. 112(e) for the sole purpose of facilitating a transmission 
to the public of a performance of a sound recording under the 
limitation on exclusive rights specified in 17 U.S.C. 114(d)(1)(C)(iv). 
The attribution of Gross Proceeds to copyrighted recordings may be made 
on the basis of:
    (i) For classical programs, the proportion that the playing time of 
copyrighted classical recordings bears to the total playing time of all 
classical recordings in the program; and
    (ii) For all other programs, the proportion that the number of 
copyrighted recordings bears to the total number of all recordings in 
the program.
* * * * *


Sec.  384.5   [Amended]

0
4. In Sec.  384.5 amend paragraph (d)(4) by removing the second comma 
before the word ``subject''.

    Dated: May 11, 2018.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
[FR Doc. 2018-10509 Filed 5-16-18; 8:45 am]
 BILLING CODE 1410-72-P