[Federal Register Volume 84, Number 217 (Friday, November 8, 2019)]
[Proposed Rules]
[Pages 60356-60357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24271]



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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 383

[Docket No. 19-CRB-0006-NSR (2021-2025) (NSS IV)]


Digital Performance Right in Sound Recordings and Ephemeral 
Recordings

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Proposed rule.

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SUMMARY: The Copyright Royalty Judges are publishing for comment 
proposed regulations governing the rates and terms for the digital 
performances of sound recordings by new subscription services and for 
the making of ephemeral recordings necessary to facilitate those 
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 December 
9, 2019.

ADDRESSES: You may submit comments and objections, identified by docket 
number 19-CRB-0006-NSR (2021-2025), by any of the following methods:
    CRB's electronic filing application: Submit comments and objections 
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 a reference to the Copyright Royalty Board and docket 
number (19-CRB-0006-NSR (2021-2025)), as well as the Federal Register 
citation for this proposed rule. 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 19-CRB-000-NSR (2021-2025).

FOR FURTHER INFORMATION CONTACT: Anita Blaine, Program Specialist, by 
telephone at (202) 707-0078, or by email at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    On October 21, 2019, the Copyright Royalty Judges (Judges) received 
a joint motion from SoundExchange, Inc., and Sirius XM Inc. to adopt a 
settlement of their interests regarding the rates and terms for 2021-
2025 for certain new subscription services (NSS).\1\ Joint Motion to 
Adopt Settlement, Docket No. 19-CRB-0006-NSR (2021-2025). The parties 
request that the Judges adopt the settlement in its entirety as a 
settlement of rates and terms under Sections 112(e) and 114 of the 
Copyright Act for new subscription services of the type at issue in the 
captioned proceeding, i.e., music services provided to residential 
subscribers as part of a cable or satellite television bundle subject 
to royalty rates and terms in 37 CFR part 383. Joint Motion at 1. 
SoundExchange represents sound recording copyright owners and 
performers. Sirius XM relies on the royalty rates and terms in 37 CFR 
part 383 for music programming it provides through the DiSH satellite 
television service. The parties believe that Sirius XM is the only 
provider of a Part 383 service participating in this proceeding. Joint 
Motion at 2. The Judges hereby publish the settlement and request 
comments from the public.
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    \1\ ``David Powell d/b/a Circle of God Network Inc. [sic] has 
also requested to join the Joint Motion.'' Joint Motion at 1 n.1.
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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, new subscription services. 17 U.S.C. 
114(f)(1)(A). For purposes of the section 114 license, 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 service or a 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 the necessary 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 February 2019 for 
rates and terms that will become effective on January 1, 2021, and end 
on December 31, 2025. 84 FR 6021 (Feb. 25, 2019). SoundExchange and 
Sirius XM each submitted petitions to participate.

Statutory Timing of Adoption of Rates and Terms

    Section 801(b)(7)(A) allows for the adoption of rates and terms 
negotiated by ``some or all of the participants in a proceeding at any 
time during the proceeding'' provided the parties submit the negotiated 
rates and terms 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), or where the negotiated agreement includes provisions 
that are contrary to the provisions of the applicable license(s) or 
otherwise contrary to statutory law. See Scope of the Copyright Royalty 
Judges Authority to Adopt Confidentiality Requirements upon Copyright 
Owners within a Voluntarily Negotiated License Agreement, 78 FR 47421, 
47422 (Aug. 5, 2013), citing 74 FR 4537, 4540 (Jan. 26, 2009).

Proposed Adjustments to Rates and Terms

    The settlement incorporates the same royalty rate structure 
presently set forth in 37 CFR part 383, with annual 3% increases in the 
per-subscriber fee during the coming rate period. The parties have also 
agreed that certain terms in Part 383 should be those finally 
determined in the Web V proceeding (Docket No. 19-CRB-0005-WR (2021-
2025)), rather than those determined in

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an SDARS (satellite radio and ``preexisting'' subscription services) 
proceeding because the parties will have an opportunity to litigate 
terms issues in Web V, and the Web V terms will be in effect for the 
same period as covered by this proceeding. In other respects, the 
settlement preserves the existing provisions of Part 383 with only 
minor updating. Joint Motion at 2.
    The fact that the Settlement includes proposed terms that have not 
yet been established in the Web V proceeding may raise concern as to 
whether participants and non-participants in the rate proceeding who 
would be bound by the terms, rates, or other determination set by any 
agreement are properly afforded the aforementioned statutory 
opportunities to object or comment on the agreement. However, the 
Judges take notice that it is not inappropriate for agreements to 
incorporate and/or rely in part on events, facts or determinations that 
have not yet been established, e.g., references to adjustments based on 
yet to be determined consumer price index measurements. The Judges are 
also mindful that Congress intended to facilitate and encourage 
settlement agreements. See, H.R. Rep. No. 108-408, at 24 and 30 (2002). 
Accordingly, objectors and commenters may knowingly and willingly 
choose to accept some uncertainty as to future settlement terms and a 
reference to an outside method for resolving the uncertain issues.
    Therefore, the Judges publish the Settlement with the current 
understanding that doing so is in compliance with the statutory 
opportunities to object or comment on the agreement.
    The public may comment and object to any or all of the proposed 
regulations contained in this notice.\2\ Such comments and objections 
must be submitted no later than December 9, 2019.
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    \2\ The parties represent that SoundExchange, Sirius XM, and Mr. 
Powell, all of which have joined the Joint Motion, are the only 
parties that have filed petitions to participate in this proceeding 
and, therefore, ``there is no basis for the Judges not to adopt the 
Settlement as the statutory terms and rates under Section 112(e) and 
114 for services relying on the royalty rates and terms in 37 CFR 
part 383.'' Joint Motion at 3.
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List of Subjects in 37 CFR Part 383

    Copyright, Sound recordings, Webcasters.

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges propose to amend 37 CFR part 383 as follows:

PART 383--RATES AND TERMS FOR SUBSCRIPTION TRANSMISSIONS AND THE 
REPRODUCTION OF EMPHEMERAL RECORDINGS BY CERTAIN NEW SUBSCRIPTION 
SERVICES

0
1. The authority citation for part 383 continues to read as follows:

    Authority: 17 U.S.C. 112(e), 114, and 801(b)(1).


Sec.  383.1  [Amended]

0
2. Amend Sec.  383.1 paragraphs (a) and (c) by removing ``2016'' 
wherever it appears and adding in its place, ``2021'', and by removing 
``2020'' wherever it appears and adding in its place, ``2025''.;


Sec.  383.3  [Amended]

0
3. In Sec.  383.3 amend by:
0
a. Revising paragraph (a) by removing the words ``statutory licenses'' 
and adding, in their place, the word ``License'';
0
b. Revising paragraphs (a)(1)(i) through (v);
0
c. Revising paragraph (a)(2)(i) through (v); and
0
d. Revising paragraph (c).
    The revisions read as follows:
    (a) * * *
    (1) * * *
    (i) 2021: $0.0208
    (ii) 2022: $0.0214
    (iii) 2023: $0.0221
    (iv) 2024: $0.0227
    (v) 2025: $0.0234
* * * * *
    (2) * * *
    (1) * * *
    (i) 2021: $0.0346
    (ii) 2022: $0.0356
    (iii) 2023: $0.0367
    (iv) 2024: $0.0378
    (v) 2025: $0.0390
* * * * *
    (c) Allocation between ephemeral recordings fees and performance 
royalty fees. The Collective must credit 5% of all royalty payments as 
royalty 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 
noninteractive digital transmissions through a Service are included in 
the 5%.


Sec.  383.4  [Amended]

0
4. In Sec.  383.4 amend paragraph (a) by:
0
a. Removing the words ``subscription transmissions'' and adding, in 
their place, the words ``Digital audio transmission'';
0
b. Removing the words ``preexisting satellite digital audio radio 
services'' and adding, in their place, the words ``Commercial 
Webcasters'';
0
c. Removing the words ``part 382, subpart B'' and adding, in their 
place, the words ``part 380, subpart A'';
0
d. Removing the years ``2013-2017'' and adding, in their place, the 
years ``2021-2025'';
0
e. Removing the words ``For purposes of this section'' and adding, in 
their place, the words ``For purposes of this part''.

    Dated: November 1, 2019.
Jesse M. Feder,
Chief Copyright Royalty Judge.
[FR Doc. 2019-24271 Filed 11-7-19; 8:45 am]
BILLING CODE 1410-72-P