[Federal Register Volume 83, Number 227 (Monday, November 26, 2018)]
[Rules and Regulations]
[Pages 60362-60363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25458]
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 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: Final rule.
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SUMMARY: The Copyright Royalty Judges (Judges) publish final
regulations setting 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: Effective date: January 1, 2019.
ADDRESSES: For access to the docket to read submitted background
documents 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 Right 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. The DMCA created, inter alia, 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 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
Corporation, Music Choice, David Powell, David Rahn,\1\ Rockbot,
Inc.,\2\ 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.
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\1\ In his Petition to Participate, Mr. Rahn identified himself
as a shareholder in SBR Creative Media, Inc. and its subsidiary
CustomerChannels.net, LLC.
\2\ Rockbot withdrew its Petition to Participate on January 11,
2018.
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On May 4, 2018, the Judges received a joint Motion to Adopt
Settlement from Mr. Rahn, Mood Media Corp., Music Choice, Sirius XM
Radio Inc., and SoundExchange, Inc., (Moving Parties) stating that they
had reached a settlement obviating the need for written evidentiary
statements or a hearing.\3\
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\3\ According to the Motion, David Powell, although having filed
a Petition to Participate, did not otherwise participate in the
proceeding. Motion at 2. The Moving Parties represent that counsel
for Mood Media attempted unsuccessfully to contact Mr. Powell to
discuss the filing of the Motion. Id. at 2-3. Mr. Powell also did
not respond to the request for comments on the proposed regulations.
On May 14, 2018, shortly before the proposed regulations were
published, however, Mr. Powell filed a ``Verified Motion for
Enlargement of Time, and Agreed with Settlement Parties to Adopt
Settlement Ex-Parte,'' which the Judges accept as a notice that Mr.
Powell does not object to the settlement. The Judges make no finding
with regard to Mr. Powell's eligibility to participate in this
proceeding. 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.
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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 participants
and non-participants in the rate proceeding who ``would be bound by the
terms, rates, or other determination set by any
[[Page 60363]]
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 [in 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). Accordingly, on May 17, 2018, the Judges published a
document requesting comment on the proposed rates and terms. 83 FR
22907. The Judges received no timely comments or objections in response
to the May 17 document.
Having received no opposition to the proposal and finding that the
agreement among the moving parties provides a reasonable basis for
setting statutory terms and rates, the Judges, by this notice, adopt as
final regulations the rates and terms for the making of an ephemeral
recording by a business establishment service for the period January 1,
2019, through December 31, 2023.
List of Subjects in 37 CFR Part 384
Copyright, Digital audio transmissions, Ephemeral recordings,
Performance right, Sound recordings.
Final Regulations
For the reasons set forth in the preamble, the Judges 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:
0
a. Revising paragraph (a); and
0
b. In paragraph (b), removing ``$10,000'' and adding ``$20,000'' in its
place.
The revision reads as follows:
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:
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Year Rate %
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2019......................................................... 12.5
2020......................................................... 12.75
2021......................................................... 13.0
2022......................................................... 13.25
2023......................................................... 13.5
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(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: September 17, 2018.
David R. Strickler,
Copyright Royalty Judge.
Jesse M. Feder,
Copyright Royalty Judge.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2018-25458 Filed 11-23-18; 8:45 am]
BILLING CODE 1410-72-P