[Federal Register Volume 88, Number 192 (Thursday, October 5, 2023)]
[Rules and Regulations]
[Pages 69038-69039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22179]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 390

[Docket No. 23-CRB-0007-AA]


Determination of Adjustment to Administrative Assessment to Fund 
Mechanical Licensing Collective

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Final rule; adoption of voluntary agreement.

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SUMMARY: The Copyright Royalty Judges publish final regulations that 
adjust the amounts and terms of the Administrative Assessment To fund 
the Mechanical Licensing Collective.

DATES: 
    Effective date: October 5, 2023.
    Applicability date: These rates and terms are applicable starting 
January 1, 2023.

ADDRESSES: Docket: For access to the docket to read 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 23-CRB-0007-AA.

FOR FURTHER INFORMATION CONTACT: Anita Brown, (202) 707-7658, 
[email protected].

SUPPLEMENTARY INFORMATION: On May 31, 2023, the Mechanical Licensing 
Collective (MLC) and the Digital Licensee Coordinator (DLC) filed a 
Joint Petition to Commence Proceeding to Adjust Administrative 
Assessment by Adoption of a Voluntary Agreement (Petition) and a Joint 
Motion to Adopt Voluntary Agreement and Proposed Regulations (Voluntary 
Agreement). By notice published in the Federal Register the Copyright 
Royalty Judges (Judges) commenced the captioned proceeding to determine 
an adjustment to the administrative assessment that digital music 
providers and any significant nonblanket licensees must pay to fund the 
operations of the Mechanical Licensing Collective. 88 FR 42396 (June 
30, 2023) (Notice of Commencement). The Notice of Commencement included 
a request for petitions to participate and a schedule for submissions 
and proceedings.
    Only two parties filed Petitions to Participate: the Mechanical 
Licensing Collective and the Digital Licensee Coordinator; 
participation in this proceeding was required by the two Petitioners. 
The Judges gave notice of the identity of petitioners as required by 37 
CFR 355.2(f) and, in light of the

[[Page 69039]]

Voluntary Agreement, suspended the case schedule. See Notice of 
Identity of Petitioners and Case Scheduling Order (July 18, 2023).
    Section 115(d)(7)(D)(v) of the Copyright Act authorizes the Judges 
to approve and adopt a negotiated agreement that has been agreed to by 
the Mechanical Licensing Collective and the Digital Licensee 
Coordinator in lieu of a determination of the administrative 
assessment. An administrative assessment adopted under sec. 
115(d)(7)(D)(v) ``shall apply to all digital music providers and 
significant nonblanket licensees engaged in covered activities during 
the period the administrative assessment is in effect.'' Id.
    However, the Judges, in their discretion, may reject a proposed 
settlement for good cause shown. 17 U.S.C. 115(d)(7)(D)(v) and 37 CFR 
355.6(d). Section 355.4(c)(4) of 37 CFR establishes a process for non-
settling participants to comment on a proposed settlement and for the 
settling participants to respond. Because there were no non-settling 
participants in the instant proceeding, the proposed settlement was 
unopposed. Moreover, the participants explained to the Judges' 
satisfaction how the Proposed Regulations comply with the provisions of 
the Copyright Act. See generally Voluntary Agreement. The Judges, 
finding no cause to reject the proposed settlement embodied in the 
Voluntary Agreement, hereby adopt it, and publish these final 
regulations implementing the settlement.

List of Subjects in 37 CFR Part 390

    Copyright, Licensing and registration, Music, Phonorecords, 
Recordings, Royalties.

Final Regulations

    For the reasons set forth in the preamble, the Copyright Royalty 
Judges amend 37 CFR part 390 as follows:

PART 390--AMOUNTS AND TERMS FOR ADMINISTRATIVE ASSESSMENTS TO FUND 
MECHANICAL LICENSING COLLECTIVE

0
1. The authority citation for part 390 continues to read as follows:

    Authority:  17 U.S.C. 115, 801(b).


Sec.  390.1  [Amended]

0
2. Amend Sec.  390.1 as follows:
0
a. In the definition of ``Annual Assessment'' remove ``2021'' and add 
in its place ``2023''.
0
b. Remove the definition of ``Certified Minimum Fee Disclosure''.

0
3. Amend Sec.  390.2 by revising paragraphs (a), (b), and (c)(1) 
introductory text to read as follows:


Sec.  390.2  Amount of assessments.

    (a) 2023 Annual Assessment. The Annual Assessment for the calendar 
year 2023 shall be in the amount of $32,900,000.
    (b) 2024 Annual Assessment. The Annual Assessment for the calendar 
year 2024 shall be in the amount of $39,050,000.
    (c) * * * (1) For the calendar year 2025 and all subsequent years, 
the amount of the Annual Assessment will be automatically adjusted by 
increasing the amount of the Annual Assessment of the preceding 
calendar year by the lesser of:
* * * * *

0
4. Amend Sec.  390.3 by:
0
a. In paragraph (b);
0
i. Removing ``2021'' and adding in its place ``2024'';
0
ii. Removing ``2019'' and adding in its place ``2022''; and
0
iii. Removing ``2020'' and adding in its place ``2023''.
0
b. Remove paragraph (c) and redesignate paragraphs (d) and (e) as 
paragraphs (c) and (d).
0
c. Revise newly redesignated paragraph (c) introductory text.
    The revision reads as follows:


Sec.  390.3  Annual minimum fees.

* * * * *
    (c) Calculation by the MLC. The MLC will calculate each Licensee's 
annual minimum fee based on usage reporting received from Licensees 
pursuant to 17 U.S.C. 115(d)(4). The MLC shall send invoices for the 
appropriate annual minimum fee to each Licensee. Licensees shall pay 
the annual minimum fee invoices from the MLC by the later of:
* * * * *

0
5. Amend Sec.  390.4 as follows:
0
a. In paragraph (b) remove the words ``, except that the calculation 
period for the Quarterly Allocation for the first and second quarters 
of 2021 shall be the same as for the annual minimum fee for the 2021 
Annual Assessment, and shall be calculated based upon the information 
provided in the Certified Minimum Fee Disclosures, as required by this 
part.''
0
b. Remove paragraph (c)(2)(i)(D) and redesignate paragraphs 
(c)(2)(i)(E) and (F) as (c)(2)(i)(D) and (E).
0
c. Revise paragraph (h).
    The revision reads as follows:


Sec.  390.4  Annual Assessment allocation and payment.

* * * * *
    (h) 2023 Annual Assessment allocation and payment. The 2023 Annual 
Assessment shall be paid in two separate processes:
    (1) The MLC will collect from Licensees the amount of $30,235,650 
pursuant to the standard procedures outlined in the other provisions of 
this part for collection of the 2023 Annual Assessment, including the 
collection of Annual Minimum Fees and Quarterly Allocations.
    (2) The MLC will collect from Allocated Licensees the amount of 
$2,664,350 through a separately invoiced, one-time collection, with no 
minimum fees applied. The amount shall be divided into two equal parts 
and allocated among Licensees using the formulas set forth in 
paragraphs (a)(1) and (a)(2) of this section. The calculation period 
shall be the first three months of 2023. The MLC may invoice for this 
collection at any time, with payment to be due no later than 45 days 
after receipt of the invoice from the MLC.

    Dated: September 25, 2023.
David P. Shaw,
Chief Copyright Royalty Judge.
David R. Strickler,
Copyright Royalty Judge.
Steve Ruwe,
Copyright Royalty Judge.

    Approved by:
Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2023-22179 Filed 10-4-23; 8:45 am]
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