[Federal Register Volume 84, Number 210 (Wednesday, October 30, 2019)]
[Proposed Rules]
[Pages 58095-58098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23485]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 380

[Docket No. 19-CRB-0005-WR (2021-2025)]


Determination of Rates and Terms for Digital Performance of Sound 
Recordings and Making of Ephemeral Copies To Facilitate Those 
Performances (Web V)

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

ACTION: Proposed rule related to noncommercial educational webcasters.

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SUMMARY: The Copyright Royalty Judges are publishing for comment 
proposed regulations governing the rates and terms for the digital 
performance of sound recordings by noncommercial educational webcasters 
and for the making of ephemeral recordings necessary for the 
facilitation of such transmissions for the period commencing January 1, 
2021, and ending on December 31, 2025.

DATES: Comments and objections, if any, are due no later than November 
20, 2019.

ADDRESSES: You may submit comments and proposals, identified by docket 
number 19-CRB-0005-WR (2021-2025), by any of the following methods:
    CRB's electronic filing application: Submit comments and proposals 
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: Parties unable to use eCRB must submit an original, 
two paper copies, and an electronic version on a CD. All submissions 
must include the Copyright Royalty Board name and docket number (19-
CRB-0005-WR (2021-2025)), as well as the Federal Register citation for 
this proposed rule. All submissions received will be posted without 
change on 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 19-CRB-0005-WR (2021-2025).

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

SUPPLEMENTARY INFORMATION: On September 23, 2019, the Copyright Royalty 
Judges (Judges) received a joint motion from SoundExchange, Inc., 
(``SoundExchange'') and College Broadcasters, Inc., (``CBI'') to adopt 
a partial settlement of their interests regarding Web V rates and terms 
for 2021-2025.\1\ Joint Motion to Adopt Partial Settlement, Docket No. 
19-CRB-0005-WR (2021-2025). Their interests concern the rule setting 
copyright royalty minimum fees and terms that the Judges will establish 
for compulsory copyright licenses for certain internet transmissions of 
sound recordings by college radio stations and other noncommercial 
educational webcasters for the period from January 1, 2021,

[[Page 58096]]

through December 31, 2025. SoundExchange represents the interests of 
sound recording copyright owners and performers. CBI represents the 
interests of users of the copyrighted material which users include 
college, university, and high school radio and television stations and 
other electronic media organizations. The Judges hereby publish the 
proposal and request comments from the public.
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    \1\ Web V is short for Webcasting V. This proceeding is the 
fifth since the compulsory license for webcasting was established.
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    Section 114 of the Copyright Act, title 17 of the United States 
Code, provides a statutory license that allows for the public 
performance of sound recordings by means of a digital audio 
transmission by, among others, eligible nonsubscription transmission 
services and new subscription services. 17 U.S.C. 114(f). For purposes 
of the section 114 license, an ``eligible nonsubscription 
transmission'' is a noninteractive digital audio transmission that does 
not require a subscription for receiving the transmission. The 
transmission must also be made as part of a service that provides audio 
programming consisting in whole or in part of performances of sound 
recordings the purpose of which is to provide audio or other 
entertainment programming, but not to sell, advertise, or promote 
particular goods or services. See 17 U.S.C. 114(j)(6). A ``new 
subscription service'' is a ``service that performs sound recordings by 
means of noninteractive subscription digital audio transmissions and 
that is not a preexisting subscription or preexisting satellite digital 
audio radio service.'' 17 U.S.C. 114(j)(8).
    Services using the section 114 license may need to make one or more 
temporary or ``ephemeral'' copies of a sound recording to facilitate 
the transmission of that recording. The section 112 statutory license 
allows for the making of these ephemeral reproductions. 17 U.S.C. 
112(e).
    Chapter 8 of the Copyright Act requires the Judges to conduct 
proceedings every five years to determine the rates and terms for the 
sections 114 and 112 statutory licenses. 17 U.S.C. 801(b)(1), 
804(b)(3)(A). The current proceeding commenced in January 2019 for 
rates and terms that will become effective on January 1, 2021, and end 
on December 31, 2025. Pursuant to section 804(b)(3)(A), the Judges 
published in the Federal Register a notice commencing the proceeding 
and requesting that interested parties submit their petitions to 
participate. 84 FR 359 (Jan. 24, 2019). CBI and SoundExchange each 
filed Petitions to Participate, as did others.
    On September 23, 2019, SoundExchange and CBI submitted to the 
Judges a joint motion to adopt a partial settlement of their interests 
in the proceeding. SoundExchange and CBI requested that the Judges 
``endeavor to determine before the deadline for the filing of written 
rebuttal statements in this Proceeding (January 10, 2020) whether or 
not they will adopt the Settlement.'' Joint Motion at 1.

Statutory Timing of Adoption of Rates and Terms

    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 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).
    Any rates and terms adopted pursuant to this provision would be 
binding on all copyright owners of sound recordings, college radio 
stations, and other noncommercial educational webcasters performing the 
sound recordings for the license period 2021-2025.

Proposed Adjustments to Rates and Terms

    According to SoundExchange and CBI, the agreement generally 
continues in effect the current provisions of 37 CFR part 380, subpart 
C, which were themselves adopted pursuant to 17 U.S.C. 801(b)(7)(A) as 
part of the Webcasting IV proceeding, with two primary changes: (1) The 
minimum fee applicable to noncommercial educational webcasters will 
increase by $50 per year throughout the rate period; and (2) consistent 
with the preferences previously expressed by the Judges, the generally 
applicable provisions in subpart A will apply to noncommercial 
educational webcasters to the extent consistent with subpart C, and the 
corresponding provisions have been removed from subpart C. Joint Motion 
at 2.
    The public may comment and object to any or all of the proposed 
regulations contained in this document. Such comments and objections 
must be submitted no later than November 20, 2019.

List of Subjects in 37 CFR Part 380

    Copyright, Sound recordings, Webcasters.
    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to amend 37 CFR part 380 as follows:

PART 380--RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE 
NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE 
MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS

0
1. The authority citation for part 380 continues to read as follows:

    Authority:  17 U.S.C. 112(e), 114(f), 804(b)(3).

0
 2. Revise subpart C to read as follows:

Subpart C--Noncommercial Educational Webcasters

Sec.
380.20 Definitions.
380.21 Royalty fees for the public performance of sound recordings 
and for ephemeral recordings.
380.22 Terms for making payment of royalty fees and statements of 
account.


Sec.  380.20  Definitions.

    For purposes of this subpart, the following definitions apply:
    Educational Transmission means an eligible nonsubscription 
transmission (as defined in 17 U.S.C. 114(j)(6)) made by a 
Noncommercial Educational Webcaster over the internet.
    Noncommercial Educational Webcaster means a noncommercial webcaster 
(as defined in 17 U.S.C. 114(f)(4)(E)(i)) that:
    (1) Has obtained a compulsory license under 17 U.S.C. 112(e) and 
114 and the implementing regulations therefor to make Educational 
Transmissions and related Ephemeral Recordings;
    (2) Complies with all applicable provisions of Sections 112(e) and 
114 and applicable regulations in this part;
    (3) Is directly operated by, or is affiliated with and officially 
sanctioned by, and the digital audio transmission operations of which 
are staffed substantially by students enrolled at, a

[[Page 58097]]

domestically accredited primary or secondary school, college, 
university or other post-secondary degree-granting educational 
institution;
    (4) Is not a ``public broadcasting entity'' (as defined in 17 
U.S.C. 118(f)) qualified to receive funding from the Corporation for 
Public Broadcasting pursuant to its criteria; and
    (5) Takes affirmative steps not to make total transmissions in 
excess of 159,140 Aggregate Tuning Hours (ATH) on any individual 
channel or station in any month, if in any previous calendar year it 
has made total transmissions in excess of 159,140 ATH on any individual 
channel or station in any month.


Sec.  380.21  Royalty fees for the public performance of sound 
recordings and for ephemeral recordings.

    (a) Minimum fee for eligible Noncommercial Educational Webcasters. 
Each Noncommercial Educational Webcaster that did not exceed 159,140 
total ATH for any individual channel or station for more than one 
calendar month in the immediately preceding calendar year and does not 
expect to make total transmissions in excess of 159,140 ATH on any 
individual channel or station in any calendar month during the 
applicable calendar year shall pay an annual, nonrefundable minimum fee 
in the amount set forth in paragraphs (a)(1) through (5) of this 
section (the ``Minimum Fee'') for each of its individual channels, 
including each of its individual side channels, and each of its 
individual stations, through which (in each case) it makes Educational 
Transmissions, for each calendar year it makes Educational 
Transmissions subject to this subpart. For clarity, each individual 
stream (e.g., HD radio side channels, different stations owned by a 
single licensee) will be treated separately and be subject to a 
separate Minimum Fee. The Minimum Fee shall constitute the annual per 
channel or per station royalty for all Educational Transmissions 
totaling not more than 159,140 ATH in a month on any individual channel 
or station, and for Ephemeral Recordings to enable such Educational 
Transmissions. In addition, a Noncommercial Educational Webcaster 
electing the reporting waiver described in Sec.  380.22(d)(1) shall pay 
a $100 annual fee (the ``Proxy Fee'') to the Collective (for purposes 
of this subpart, the term ``Collective'' refers to SoundExchange, 
Inc.). The Minimum Fee for each year of the royalty period is:
    (1) 2021: $550;
    (2) 2022: $600;
    (3) 2023: $650;
    (4) 2024: $700; and
    (5) 2025: $750.
    (b) Consequences of unexpectedly exceeding ATH cap. In the case of 
a Noncommercial Educational Webcaster eligible to pay royalties under 
paragraph (a) of this section that unexpectedly makes total 
transmissions in excess of 159,140 ATH on any individual channel or 
station in any calendar month during the applicable calendar year:
    (1) The Noncommercial Educational Webcaster shall, for such month 
and the remainder of the calendar year in which such month occurs, pay 
royalties in accordance, and otherwise comply, with the provisions of 
subpart B of this part applicable to Noncommercial Webcasters;
    (2) The Minimum Fee paid by the Noncommercial Educational Webcaster 
for such calendar year will be credited to the amounts payable under 
the provisions of subpart B of this part applicable to Noncommercial 
Webcasters; and
    (3) The Noncommercial Educational Webcaster shall, within 45 days 
after the end of each month, notify the Collective if it has made total 
transmissions in excess of 159,140 ATH on a channel or station during 
that month; pay the Collective any amounts due under the provisions of 
subpart B of this part applicable to Noncommercial Webcasters; and 
provide the Collective a statement of account pursuant to subpart A of 
this part.
    (c) Royalties for other Noncommercial Educational Webcasters. A 
Noncommercial Educational Webcaster that is not eligible to pay 
royalties under paragraph (a) of this section shall pay royalties in 
accordance, and otherwise comply, with the provisions of subpart B of 
this part applicable to Noncommercial Webcasters.
    (d) Estimation of performances. In the case of a Noncommercial 
Educational Webcaster that is required to pay royalties under paragraph 
(b) or (c) of this section on a per-Performance basis, that is unable 
to calculate actual total performances, and that is not required to 
report actual total performances under Sec.  380.22(d)(3), the 
Noncommercial Educational Webcaster may pay its applicable royalties on 
an ATH basis, provided that the Noncommercial Educational Webcaster 
shall calculate such royalties at the applicable per-Performance rates 
based on the assumption that the number of sound recordings performed 
is 12 per hour. The Collective may distribute royalties paid on the 
basis of ATH hereunder in accordance with its generally applicable 
methodology for distributing royalties paid on such basis. In addition, 
and for the avoidance of doubt, a Noncommercial Educational Webcaster 
offering more than one channel or station shall pay per-Performance 
royalties on a per-channel or -station basis.
    (e) Allocation between ephemeral recordings and performance royalty 
fees. The Collective must credit 5% of all royalty payments as payment 
for Ephemeral Recordings and credit the remaining 95% to section 114 
royalties. All Ephemeral Recordings that a Licensee makes which are 
necessary and commercially reasonable for making Educational 
Transmissions are included in the 5%.


Sec.  380.22  Terms for making payment of royalty fees and statements 
of account.

    (a) Payment to the Collective. A Noncommercial Educational 
Webcaster shall make the royalty payments due under Sec.  380.21 to the 
Collective.
    (b) Minimum fee. Noncommercial Educational Webcasters shall submit 
the Minimum Fee, and Proxy Fee if applicable (see paragraph (d) of this 
section), accompanied by a statement of account, by January 31st of 
each calendar year, except that payment of the Minimum Fee, and Proxy 
Fee if applicable, by a Noncommercial Educational Webcaster that was 
not making Educational Transmissions or Ephemeral Recordings pursuant 
to the licenses in 17 U.S.C. 114 and/or 17 U.S.C. 112(e) as of January 
31st of each calendar year but begins doing so thereafter shall be due 
by the 45th day after the end of the month in which the Noncommercial 
Educational Webcaster commences doing so. At the same time the 
Noncommercial Educational Webcaster must identify all its stations 
making Educational Transmissions and identify which of the reporting 
options set forth in paragraph (d) of this section it elects for the 
relevant year (provided that it must be eligible for the option it 
elects).
    (c) Statements of account. Any payment due under paragraph (a) of 
this section shall be accompanied by a corresponding statement of 
account on a form provided by the Collective. A statement of account 
shall contain the following information:
    (1) The name of the Noncommercial Educational Webcaster, exactly as 
it appears on the notice of use, and if the statement of account covers 
a single station only, the call letters or name of the station;
    (2) The name, address, business title, telephone number, facsimile 
number (if any), electronic mail address (if any) and other contact 
information of the

[[Page 58098]]

person to be contacted for information or questions concerning the 
content of the statement of account;
    (3) The signature of a duly authorized representative of the 
applicable educational institution;
    (4) The printed or typewritten name of the person signing the 
statement of account;
    (5) The date of signature;
    (6) The title or official position held by the person signing the 
statement of account;
    (7) A certification of the capacity of the person signing; and
    (8) A statement to the following effect:
    I, the undersigned duly authorized representative of the applicable 
educational institution, have examined this statement of account; 
hereby state that it is true, accurate, and complete to my knowledge 
after reasonable due diligence; and further certify that the licensee 
entity named herein qualifies as a Noncommercial Educational Webcaster 
for the relevant year, and did not exceed 159,140 total ATH in any 
month of the prior year for which the Noncommercial Educational 
Webcaster did not submit a statement of account and pay any required 
additional royalties.
    (d) Reporting by Noncommercial Educational Webcasters in general--
(1) Reporting waiver. In light of the unique business and operational 
circumstances with respect to Noncommercial Educational Webcasters, and 
for the purposes of this subpart only, a Noncommercial Educational 
Webcaster that did not exceed 80,000 total ATH for any individual 
channel or station for more than one calendar month in the immediately 
preceding calendar year and that does not expect to exceed 80,000 total 
ATH for any individual channel or station for any calendar month during 
the applicable calendar year may elect to pay to the Collective a 
nonrefundable, annual Proxy Fee of $100 in lieu of providing reports of 
use for the calendar year pursuant to the regulations at Sec.  370.4 of 
this chapter. In addition, a Noncommercial Educational Webcaster that 
unexpectedly exceeded 80,000 total ATH on one or more channels or 
stations for more than one month during the immediately preceding 
calendar year may elect to pay the Proxy Fee and receive the reporting 
waiver described in this paragraph (d)(1) during a calendar year, if it 
implements measures reasonably calculated to ensure that it will not 
make Educational Transmissions exceeding 80,000 total ATH during any 
month of that calendar year. The Proxy Fee is intended to defray the 
Collective's costs associated with the reporting waiver in this 
paragraph (d)(1), including development of proxy usage data. The Proxy 
Fee shall be paid by the date specified in paragraph (b) of this 
section for paying the Minimum Fee for the applicable calendar year and 
shall be accompanied by a certification on a form provided by the 
Collective, signed by a duly authorized representative of the 
applicable educational institution, stating that the Noncommercial 
Educational Webcaster is eligible for the Proxy Fee option because of 
its past and expected future usage and, if applicable, has implemented 
measures to ensure that it will not make excess Educational 
Transmissions in the future.
    (2) Sample-basis reports. A Noncommercial Educational Webcaster 
that did not exceed 159,140 total ATH for any individual channel or 
station for more than one calendar month in the immediately preceding 
calendar year and that does not expect to exceed 159,140 total ATH for 
any individual channel or station for any calendar month during the 
applicable calendar year may elect to provide reports of use on a 
sample basis (two weeks per calendar quarter) in accordance with the 
regulations at Sec.  370.4 of this chapter, except that, 
notwithstanding Sec.  370.4(d)(2)(vi), such an electing Noncommercial 
Educational Webcaster shall not be required to include ATH or actual 
total performances and may in lieu thereof provide channel or station 
name and play frequency. Notwithstanding the preceding sentence, a 
Noncommercial Educational Webcaster that is able to report ATH or 
actual total performances is encouraged to do so. These reports of use 
shall be submitted to the Collective no later than January 31st of the 
year immediately following the year to which they pertain.
    (3) Census-basis reports. (i) If any of the conditions in 
paragraphs (d)(3)(i)(A) through (C) of this section is satisfied, a 
Noncommercial Educational Webcaster must report pursuant to paragraph 
(d)(3) of this section:
    (A) The Noncommercial Educational Webcaster exceeded 159,140 total 
ATH for any individual channel or station for more than one calendar 
month in the immediately preceding calendar year;
    (B) The Noncommercial Educational Webcaster expects to exceed 
159,140 total ATH for any individual channel or station for any 
calendar month in the applicable calendar year; or
    (C) The Noncommercial Educational Webcaster otherwise does not 
elect to be subject to paragraph (d)(1) or (2) of this section.
    (ii) A Noncommercial Educational Webcaster required to report 
pursuant to paragraph (d)(3)(i) of this section shall provide reports 
of use to the Collective quarterly on a census reporting basis in 
accordance with Sec.  370.4 of this chapter, except that, 
notwithstanding Sec.  370.4(d)(2), such a Noncommercial Educational 
Webcaster shall not be required to include ATH or actual total 
performances, and may in lieu thereof provide channel or station name 
and play frequency, during the first calendar year it reports in 
accordance with paragraph (d)(3) of this section. For the avoidance of 
doubt, after a Noncommercial Educational Webcaster has been required to 
report in accordance with paragraph (d)(3)(i) of this section for a 
full calendar year, it must thereafter include ATH or actual total 
performances in its reports of use. All reports of use under paragraph 
(d)(3)(i) of this section shall be submitted to the Collective no later 
than the 45th day after the end of each calendar quarter.
    (e) Server logs. Noncommercial Educational Webcasters shall retain 
for a period of no less than three full calendar years server logs 
sufficient to substantiate all information relevant to eligibility, 
rate calculation and reporting under this subpart. To the extent that a 
third-party Web hosting or service provider maintains equipment or 
software for a Noncommercial Educational Webcaster and/or such third 
party creates, maintains, or can reasonably create such server logs, 
the Noncommercial Educational Webcaster shall direct that such server 
logs be created and maintained by said third party for a period of no 
less than three full calendar years and/or that such server logs be 
provided to, and maintained by, the Noncommercial Educational 
Webcaster.
    (f) Terms in general. Subject to the provisions of this subpart, 
terms governing late fees, distribution of royalties by the Collective, 
unclaimed funds, record retention requirements, treatment of Licensees' 
confidential information, audit of royalty payments and distributions, 
and any definitions for applicable terms not defined in this subpart 
shall be those set forth in subpart A of this part.

    Dated: October 23, 2019.
Jesse M. Feder,
Chief Copyright Royalty Judge.
[FR Doc. 2019-23485 Filed 10-29-19; 8:45 am]
 BILLING CODE 1410-72-P