[Federal Register Volume 89, Number 53 (Monday, March 18, 2024)]
[Rules and Regulations]
[Pages 19274-19275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05704]



[[Page 19274]]

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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 385

[Docket No. 21-CRB-0001-PR (2023-2027)]


Determination of Royalty Rates and Terms for Making and 
Distributing Phonorecords (Phonorecords IV); Corrections

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Correcting amendment.

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SUMMARY: On December 30, 2022, the Copyright Royalty Judges revised 
regulations. This document corrects the final regulations to add 
capitalization to certain defined terms and to correct a term regarding 
late fees.

DATES: Effective date: March 18, 2024.
    Applicability Date: These terms are applicable during the period 
from January 1, 2023, through December 31, 2027.

ADDRESSES: For access to the docket to read submitted background 
documents go to eCRB at https://app.crb.gov/ and search for docket 
number 21-CRB-0001-PR (2023-2027).

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

SUPPLEMENTARY INFORMATION: This document corrects terms in the Final 
Regulations section of the final rule and order document published in 
the Federal Register on December 30, 2022 (87 FR 80448).
    On January 10, 2023, Spotify USA Inc., Amazon.com Services LLC, 
Google LLC, Pandora Media, LLC, and Apple Inc. (collectively, the 
``Movants'') filed a motion requesting that the Copyright Royalty 
Judges (Judges) issue amendments to their Determination of Royalty 
Rates and Terms for Making and Distributing Phonorecords, 87 FR 80448 
(Dec. 30, 2022) (Phonorecords IV Determination). Motion to Request 
Issuance of Amendment to Determination . . . (Motion). The relevant 
regulations for which amendments are sought are the result of a 
settlement in the Phonorecords IV proceeding. The Movants noted that 
National Music Publishers' Association, Inc., and the Nashville 
Songwriters Association International, who were participants in the 
Phonorecords IV proceeding, consent to the requested relief. Motion at 
1. No participant in the Phonorecords IV proceeding opposed the Motion.
    The Movants stated that 37 CFR 385.3 currently provides that late 
fees should accrue from the date payment is due until payment is 
received by the Copyright Owner. However, the Movants stated that the 
language thus does not acknowledge that the Mechanical Licensing 
Collective has responsibility for collecting payment under the blanket 
license for digital uses (though payment remains owed to Copyright 
Owners for non-blanket license uses). The Movants therefore proposed 
amendments to 37 CFR 385.3 (reflected below) that would clarify that, 
where payment is due to the Mechanical Licensing Collective under 17 
U.S.C. 115(d)(4)(A)(i), late fees shall accrue from the due date until 
the Mechanical Licensing Collective receives payment. Id. at 1-2.
    The Movants also requested that certain capitalization be employed 
where three defined terms are used in 37 CFR 385.2(d). Id. at 2.
    The Movants asserted that the amendments are proper because they 
correct technical errors or modify terms (not rates) of royalty 
payments that might otherwise frustrate the proper implementation of 
the Phonorecords IV Determination. Id. at 1, citing 17 U.S.C. 
803(c)(4).
    Section 803(c)(4) of the Copyright Act authorizes the Judges to 
issue amendments to a written determination to correct any technical or 
clerical errors in the determination or to modify the terms, but not 
the rates, of royalty payments in response to unforeseen circumstances 
that would frustrate the proper implementation of such determination. 
The Judges find good cause to adopt the modified language and find that 
the requested amendments are sufficiently technical in nature and 
therefore adopt the amendments pursuant to the Judges' authority under 
section 803(c)(4) of the Copyright Act.
    With regard to the requested amendments to 37 CFR 385.3, the Judges 
separately find that the requested modifications to the terms but not 
the rates of royalty payments are in response to unforeseen 
circumstances that would frustrate the proper implementation of the 
Phonorecords IV Determination. The passage of the Music Modernization 
Act and the resulting establishment of the Mechanical Licensing 
Collective is a relatively recent development. The Judges find that 
these developments, although in existence at the time of the 
Phonorecords IV Determination, were unforeseen by the Settling Parties 
as they arrived upon and submitted the settlement in Phonorecords 
IV.\1\ Furthermore, the Judges find that the amendments fulfill the 
intention of the Phonorecords IV Determination to fully recognize the 
role of the Mechanical Licensing Collective, and of the Settling 
Parties, to apply late fees where payment is due to the Mechanical 
Licensing Collective.
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    \1\ The Settling Parties who arrived upon the relevant portions 
of the regulations are comprised of the Movants on the one hand, and 
the National Music Publishers' Association, Inc., and the Nashville 
Songwriters Association International on the other hand, who consent 
to the requested relief. See 87 FR 80448 n.2.
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List of Subjects in 37 CFR Part 385

    Copyright, Phonorecords, Recordings.

    Accordingly, 37 CFR part 385 is corrected by making the following 
correcting amendments:

PART 385--RATES AND TERMS FOR USE OF NONDRAMATIC MUSICAL WORKS IN 
THE MAKING AND DISTRIBUTING OF PHYSICAL AND DIGITAL PHONORECORDS

0
1. The authority citation for part 385 continues to read as follows:

    Authority:  17 U.S.C. 115, 801(b)(1), 804(b)(4).


0
2. Revise Sec.  385.3 to read as follows:


Sec.  385.3  Late payments.

    A Licensee shall pay a late fee of 1.5% per month, or the highest 
lawful rate, whichever is lower, for any payment owed to a Copyright 
Owner and remaining unpaid after the due date established in 17 U.S.C. 
115(c)(2)(I) or 17 U.S.C. 115(d)(4)(A)(i), as applicable and detailed 
in part 210 of this title. Late fees shall accrue from the due date 
until the Copyright Owner receives payment, except that where payment 
is due to the mechanical licensing collective under 17 U.S.C. 
115(d)(4)(A)(i), late fees shall accrue from the due date until the 
mechanical licensing collective receives payment.

0
3. In Sec.  385.21, revise the headings of paragraphs (d)(1) through 
(d)(3) to read as follows:


Sec.  385.21  Royalty rates and calculations.

* * * * *
    (d) * * *
    (1) Standalone Non-Portable Subscription Offerings--Streaming Only. 
* * *
    (2) Standalone Non-Portable Subscription Offerings--Mixed. * * *
    (3) Standalone Portable Subscription Offerings. * * *
* * * * *


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    Dated: February 6, 2024.
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. 2024-05704 Filed 3-15-24; 8:45 am]
BILLING CODE 1410-72-P