[Federal Register Volume 85, Number 40 (Friday, February 28, 2020)]
[Rules and Regulations]
[Pages 11857-11859]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03305]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 380

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


Determination of Royalty Rates and Terms for Ephemeral Recording 
and Digital Performance of Sound Recordings (Web V)

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Royalty Judges publish a final rule governing 
the rates and terms for the digital performances of sound recordings by 
certain public radio stations 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: Effective January 1, 2021.

ADDRESSES: Docket: 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 19-CRB-0005-WR (2021-2025).

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

SUPPLEMENTARY INFORMATION: On October 29, 2019, the Copyright Royalty 
Judges (Judges) published a proposed rule governing the rates and terms 
for the digital performances of sound recordings by certain public 
radio stations 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. 84 FR 57833. The rates and terms 
in the proposed rule were the subject of a settlement among 
SoundExchange, Inc. (``SoundExchange''), National Public Radio, Inc. 
(``NPR''), and the Corporation for Public Broadcasting (``CPB'') 
(together, the ``Settling Parties'') of their interests related to Web 
V \1\ royalty rates and terms for certain internet transmissions by 
public broadcasters, NPR, American Public Media, Public Radio 
International, Public Radio Exchange, and certain other unnamed public 
radio stations for the period from January 1, 2021, through December 
31, 2025. Joint Motion to Adopt Partial Settlement, Docket No. 19-CRB-
0005-WR (2021-2025) (``Web V''). The Judges received no comments on the 
proposed rule.
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    \1\ Web V is short for Webcasting V. This proceeding is the 
fifth since Congress enacted the compulsory sound recording 
performance license for webcasting.
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    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). Because no Web V participant has objected to the 
settlement, and the Judges find no basis in the record to conclude that 
the settlement does not provide a reasonable basis for setting 
statutory terms and rates, the Judges adopt the terms and rates as 
proposed.

List of Subjects in 37 CFR Part 380

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

Final Regulations

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges 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 D to read as follows:
Subpart D--Public Broadcasters
Sec.
380.30 Definitions.
380.31 Royalty fees for the public performance of sound recordings 
and for ephemeral recordings.
380.32 Terms for making payment of royalty fees and statements of 
account.

Subpart D--Public Broadcasters


Sec.  380.30   Definitions.

    For purposes of this subpart, the following definitions apply:
    Authorized website is any website operated by or on behalf of any 
Public Broadcaster that is accessed by website Users through a Uniform 
Resource Locator (``URL'') owned by such Public Broadcaster and through 
which website Performances are made by such Public Broadcaster.
    CPB is the Corporation for Public Broadcasting.
    Music ATH is aggregate tuning hours of website Performances of 
sound recordings of musical works.
    NPR is National Public Radio, Inc.
    Originating Public Radio Station is a noncommercial terrestrial 
radio broadcast station that--
    (1) Is licensed as such by the Federal Communications Commission;
    (2) Originates programming and is not solely a repeater station;
    (3) Is a member or affiliate of NPR, American Public Media, Public 
Radio International, or Public Radio Exchange, a member of the National 
Federation of Community Broadcasters, or another public radio station 
that is qualified to receive funding from CPB pursuant to its criteria;
    (4) Qualifies as a ``noncommercial webcaster'' under 17 U.S.C. 
114(f)(4)(E)(i); and
    (5) Either--
    (i) Offers website Performances only as part of the mission that 
entitles it to be exempt from taxation under section 501 of the 
Internal Revenue Code of 1986 (26 U.S.C. 501); or
    (ii) In the case of a governmental entity (including a Native 
American Tribal governmental entity), is operated exclusively for 
public purposes.
    Person is a natural person, a corporation, a limited liability 
company, a partnership, a trust, a joint venture, any governmental 
authority or any other entity or organization.
    Public Broadcasters are NPR, American Public Media, Public Radio 
International, and Public Radio Exchange, and up to 530 Originating 
Public Radio Stations as named by CPB. CPB shall notify SoundExchange 
annually of the eligible Originating Public Radio Stations to be 
considered Public Broadcasters per this definition (subject to the 
numerical limitations set forth in this definition). The number of

[[Page 11858]]

Originating Public Radio Stations treated per this definition as Public 
Broadcasters shall not exceed 530 for a given year without 
SoundExchange's express written approval, except that CPB shall have 
the option to increase the number of Originating Public Radio Stations 
that may be considered Public Broadcasters as provided in Sec.  
380.31(c).
    Side Channel is any internet-only program available on an 
Authorized website or an archived program on such Authorized website 
that, in either case, conforms to all applicable requirements under 17 
U.S.C. 114.
    Term is the period January 1, 2021, through December 31, 2025.
    Website is a site located on the World Wide Web that can be located 
by a website User through a principal URL.
    Website Performances are all public performances by means of 
digital audio transmissions of sound recordings, including the 
transmission of any portion of any sound recording, made through an 
Authorized website in accordance with all requirements of 17 U.S.C. 
114, from servers used by a Public Broadcaster (provided that the 
Public Broadcaster controls the content of all materials transmitted by 
the server), or by a contractor authorized pursuant to Sec.  380.31(f), 
that consist of either the retransmission of a Public Broadcaster's 
over-the-air terrestrial radio programming or the digital transmission 
of nonsubscription Side Channels that are programmed and controlled by 
the Public Broadcaster; provided, however, that a Public Broadcaster 
may limit access to an Authorized website, or a portion thereof, or any 
content made available thereon or functionality thereof, solely to 
website Users who are contributing members of a Public Broadcaster. 
This term does not include digital audio transmissions made by any 
other means.
    Website Users are all those who access or receive website 
Performances or who access any Authorized website.


Sec.  380.31   Royalty fees for the public performance of sound 
recordings and for ephemeral recordings.

    (a) Royalty rates. The total license fee for all website 
Performances by Public Broadcasters during each year of the Term, up to 
the total Music ATH set forth in paragraphs (a)(1) through (5) of this 
section for the relevant calendar year, and Ephemeral Recordings made 
by Public Broadcasters solely to facilitate such website Performances, 
shall be $800,000 (the ``License Fee''), unless additional payments are 
required as described in paragraph (c) of this section. The total Music 
ATH limits are:
    (1) 2021: 360,000,000;
    (2) 2022: 370,000,000;
    (3) 2023: 380,000,000;
    (4) 2024: 390,000,000; and
    (5) 2025: 400,000,000.
    (b) Calculation of License Fee. It is understood that the License 
Fee includes:
    (1) An annual minimum fee for each Public Broadcaster for each year 
during the Term;
    (2) Additional usage fees for certain Public Broadcasters; and
    (3) A discount that reflects the administrative convenience to the 
Collective (for purposes of this subpart, the term ``Collective'' 
refers to SoundExchange, Inc.) of receiving annual lump sum payments 
that cover a large number of separate entities, as well as the 
protection from bad debt that arises from being paid in advance.
    (c) Increase in Public Broadcasters. If the total number of 
Originating Public Radio Stations that wish to make website 
Performances in any calendar year exceeds the number of such 
Originating Public Radio Stations considered Public Broadcasters in the 
relevant year, and the excess Originating Public Radio Stations do not 
wish to pay royalties for such website Performances apart from this 
subpart, CPB may elect by written notice to the Collective to increase 
the number of Originating Public Radio Stations considered Public 
Broadcasters in the relevant year effective as of the date of the 
notice. To the extent of any such elections, CPB shall make an 
additional payment to the Collective for each calendar year or part 
thereof it elects to have an additional Originating Public Radio 
Station considered a Public Broadcaster, in the amount of the annual 
minimum fee applicable to Noncommercial Webcasters under subpart B of 
this part for each additional Originating Public Radio Station per 
year. Such payment shall accompany the notice electing to have an 
additional Originating Public Radio Station considered a Public 
Broadcaster.
    (d) 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 noninteractive digital 
transmissions are included in the 5%.
    (e) Effect of non-performance by any Public Broadcaster. In the 
event that any Public Broadcaster violates any of the material 
provisions of 17 U.S.C. 112(e) or 114 or this subpart that it is 
required to perform, the remedies of the Collective shall be specific 
to that Public Broadcaster only, and shall include, without limitation, 
termination of that Public Broadcaster's right to be treated as a 
Public Broadcaster per this paragraph (e) upon written notice to CPB. 
The Collective and Copyright Owners also shall have whatever rights may 
be available to them against that Public Broadcaster under applicable 
law. The Collective's remedies for such a breach or failure by an 
individual Public Broadcaster shall not include termination of the 
rights of other Public Broadcasters to be treated as Public 
Broadcasters per this paragraph (e), except that if CPB fails to pay 
the License Fee or otherwise fails to perform any of the material 
provisions of this subpart, or such a breach or failure by a Public 
Broadcaster results from CPB's inducement, and CPB does not cure such 
breach or failure within 30 days after receiving notice thereof from 
the Collective, then the Collective may terminate the right of all 
Public Broadcasters to be treated as Public Broadcasters per this 
paragraph (e) upon written notice to CPB. In such a case, a prorated 
portion of the License Fee for the remainder of the Term (to the extent 
paid by CPB) shall, after deduction of any damages payable to the 
Collective by virtue of the breach or failure, be credited to statutory 
royalty obligations of Public Broadcasters to the Collective for the 
Term as specified by CPB.
    (f) Use of contractors. The right to rely on this subpart is 
limited to Public Broadcasters, except that a Public Broadcaster may 
employ the services of a third Person to provide the technical services 
and equipment necessary to deliver website Performances on behalf of 
such Public Broadcaster, but only through an Authorized website. Any 
agreement between a Public Broadcaster and any third Person for such 
services shall:
    (1) Obligate such third Person to provide all such services in 
accordance with all applicable provisions of the statutory licenses and 
this subpart;
    (2) Specify that such third Person shall have no right to make 
website Performances or any other performances or Ephemeral Recordings 
on its own behalf or on behalf of any Person or entity other than a 
Public Broadcaster through the Public Broadcaster's Authorized website 
by virtue of its services for the Public Broadcaster, including in the 
case of Ephemeral Recordings, pre-encoding or otherwise establishing a 
library of sound recordings that it offers to a Public Broadcaster or 
others for purposes of making performances, but instead must obtain all 
necessary licenses from the

[[Page 11859]]

Collective, the copyright owner or another duly authorized Person, as 
the case may be;
    (3) Specify that such third Person shall have no right to grant any 
sublicenses under the statutory licenses; and
    (4) Provide that the Collective is an intended third-party 
beneficiary of all such obligations with the right to enforce a breach 
thereof against such third Person.


Sec.  380.32   Terms for making payment of royalty fees and statements 
of account.

    (a) Payment to the Collective. CPB shall pay the License Fee to the 
Collective in five equal installments of $800,000 each, which shall be 
due December 31, 2020, and annually thereafter through December 31, 
2024.
    (b) Reporting. CPB and Public Broadcasters shall submit reports of 
use and other information concerning website Performances as agreed 
upon with the Collective.
    (c) 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: February 10, 2020.
Jesse M. Feder,
Chief Copyright Royalty Judge.

    Approved by:
Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2020-03305 Filed 2-27-20; 8:45 am]
 BILLING CODE 1410-72-P