[Federal Register: September 27, 1999 (Volume 64, Number 186)]
[Notices]
[Page 52107-52109]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. 99-6 CARP DTRA]
Digital Performance Right in Sound Recordings and Ephemeral
Recordings
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice with a request for comments.
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SUMMARY: The Copyright Office is announcing the schedule for the
Copyright Arbitration Royalty Panel which shall set rates and terms for
two compulsory licenses. One license allows certain eligible
nonsubscription services to perform sound recordings publicly by means
of digital audio transmissions and the other allows a transmitting
organization to make an ephemeral recording of a sound recording for
the purpose of making a permitted public performance. The Office is
also announcing the date by which a party who wishes to participate in
the rate adjustment proceeding must file its Notice of Intention to
Participate.
DATES: Comments and Notices of Intention to Participate are due no
later than November 1, 1999.
ADDRESSES: An original and five copies of a Notice of Intention to
Participate and an original and five copies of any comment shall be
delivered to: Office of the General Counsel, Copyright Office, James
Madison Building, Room LM-403, First and Independence Avenue, S.E.
Washington, D.C. 20559-6000; or mailed to: Copyright Arbitration
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington,
D.C. 20024.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or
Tanya M. Sandros, Attorney Advisor, Copyright Arbitration Royalty
Panel, P.O. Box 70977, Southwest Station, Washington, D.C. 20024.
Telephone: (202) 707-8380. Telefax: (202) 252-3423.
SUPPLEMENTARY INFORMATION:
Background
In 1995, Congress passed the Digital Performance Right in Sound
Recordings Act (``DPRA''), Public Law 104-39, 109 Stat. 336 (1995),
which created for copyright owners of sound recordings an exclusive
right, subject to certain limitations, to perform publicly the
copyrighted work by means of a digital audio transmission. 17 U.S.C.
106(6). Among the limitations placed on the performance of the sound
recording was the creation of a new compulsory license for nonexempt,
noninteractive, digital subscription services. 17 U.S.C. 114. The scope
of this license was expanded in 1998 with the passage of the Digital
Millennium Copyright Act (``DMCA'') to cover the public performance of
sound recordings by means of eligible nonsubscription transmissions and
transmissions by any preexisting satellite digital audio radio service
which performs a sound recording by means of a digital audio
transmission.
An ``eligible nonsubscription transmission'' is a noninteractive
digital audio transmission which, as the name implies, 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 entertainment programming, but
not to sell, advertise, or promote particular goods or services. A
``preexisting satellite digital audio radio service'' is a subscription
digital audio radio service that received a satellite digital audio
radio service license issued by the Federal Communications Commission
on or before July 31, 1998. See 17 U.S.C. 114(j)(6) and (10). Only two
known entities, CD Radio and XM Satellite Radio (formerly known as
American Mobile Radio Corporation), qualify under the statutory
definition as preexisting satellite digital audio radio services.
In addition to expanding the current section 114 license, the DMCA
creates a new statutory license for the making of an ``ephemeral
recording'' of a sound recording by certain transmitting organizations.
The new statutory license allows entities that transmit performances of
sound recordings to business establishments, pursuant to the
limitations set forth in section 114(d)(1)(C)(iv), to make an ephemeral
recording of a sound recording for purposes of a later transmission.
The new license also provides a means by which a transmitting entity
with a statutory license under section 114(f) can make more than the
one phonorecord specified in section 112(a). 17 U.S.C. 112(e).
Determination of Reasonable Terms and Rates
The statutory scheme for establishing reasonable terms and rates is
the same for both licenses. The terms and rates for the two new
statutory licenses may be determined through a voluntary negotiation
process, or if necessary, through compulsory arbitration conducted
pursuant to Chapter 8 of the Copyright Act. Because the DMCA does not
establish reasonable rates and terms for either the new section 112 or
the expanded section 114 license, the statute requires the Librarian of
Congress to initiate a voluntary negotiation period, the first phase in
the rate setting process, within 30 days of enactment for the purpose
of determining reasonable terms and rates for each license. See 17
U.S.C. 112(e)(4) and 114(f)(2)(A).
Accordingly, the Office announced the dates for the six-month
negotiation period in the Federal Register on November 27, 1998. 63 FR
65555
[[Page 52108]]
(November 27, 1998).\1\ The designated six-month negotiation period
began on November 27, 1998, and concluded on May 27, 1999.
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\1\ The docket number for this proceeding has been changed from
RM 98-4 CARP, as indicated in the November 27 notice, to 99-6 CARP
DTRA. All future filings shall reference this proceeding
accordingly.
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At this time, the parties continue to negotiate. If the affected
parties are able to negotiate an industry-wide agreement, then it will
not be necessary for the parties to participate in an arbitration
proceeding. In such a case, the Librarian of Congress will follow
current rate regulation procedures and notify the public of the
proposed agreement in a notice and comment proceeding. If no party with
a substantial interest and an intent to participate in an arbitration
proceeding files a comment opposing the negotiated rates and terms, the
Librarian will adopt the proposed terms and rates without convening a
copyright arbitration royalty panel. 37 CFR 251.63(b). If, however, no
industry-wide agreement is reached or only certain parties negotiate
license agreements, then those copyright owners and users relying upon
one or both of the statutory licenses shall be bound by the terms and
rates established through the arbitration process.
Arbitration proceedings are initiated upon the filing of a petition
for ratemaking with the Librarian of Congress during the 60 days
immediately following the six-month negotiation period. Arbitration
cannot take place, however, unless a party files a petition. 17 U.S.C.
112(e)(5) and 114(f)(2)(B).
On July 23, 1999, the Recording Industry of America, Inc.
(``RIAA'') filed a petition in accordance with 17 U.S.C. 112(e)(5) and
114(f)(2)(B) requesting that the Office convene a Copyright Arbitration
Royalty Panel for the purpose of setting rates and terms for the
expanded section 114 license and the newly created section 112 license.
In addition, RIAA asks that the Office not require the filing of a
Notice of Intention to Participate before October 1, 1999, nor set the
commencement of the 45-day precontroversy period to begin before
January 15, 2000. RIAA makes these requests based upon its belief
``that more time for voluntary negotiation is likely to result in
additional agreements that may avoid a CARP proceeding altogether.''
RIAA petition at 2.
Comments and Notices of Intention to Participate
The regulations governing rate adjustment proceedings require that,
upon the filing of a petition for rate adjustment, the Office establish
a date certain by which parties wishing to participate in the
proceeding must file with the Librarian a Notice of Intention to
Participate. 37 CFR 251.45(a). In consideration of the ongoing
negotiations, the Office is setting November 1, 1999, as the date by
which an interested party must file its Notice of Intention to
Participate. Failure to submit a timely notice will preclude the
interested party from participating in the CARP proceeding whose
purpose will be to set rates and terms for: (1) certain digital audio
transmissions by a service eligible to make use of the expanded section
114 license, and (2) for ephemeral recordings made in accordance with
the section 112 license.
In addition, any party who wishes to comment on the RIAA petition
may file a comment with the Copyright Office no later than close of
business on November 1, 1999. The Librarian will consider these
comments when evaluating the sufficiency of the petition. See 37 CFR
251.64.
Precontroversy Discovery Schedule
The Copyright Office is announcing the schedule for the 45-day
precontroversy discovery period. Any party that files a Notice of
Intention to Participate in this proceeding may participate in the
precontroversy discovery period, provided that the party has submitted
a written direct case with the Copyright Office and with all other
parties who have filed a Notice of Intention to Participate. Each party
may request of an opposing party nonprivileged documents underlying
facts asserted in another party's written direct case. The
precontroversy discovery period is limited to discovery of documents
related to a party's written direct case and any amendment made to it
during the 45-day period.
The precontroversy discovery schedule will be as follows:
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Action Deadline
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Filing of written direct cases....... January 18, 2000.
Requests for underlying documents January 26, 2000.
related to written direct cases.
Responses to request for underlying February 1, 2000.
documents.
Completion of document production.... February 7, 2000.
Follow-up requests for underlying February 11, 2000.
documents.
Responses to follow-up requests...... February 16, 2000.
Motions related to document February 22, 2000.
production.
Production of documents in response February 28, 2000.
to follow-up requests.
All other motions, petitions, and March 2, 2000.
objections.
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The precontroversy discovery period, as specified by Sec. 251.45(b)
of the rules, will begin on January 18, 2000, with the filing of
written direct cases by each party. Each party in this proceeding who
has filed a Notice of Intention to Participate must file a written
direct case on the date prescribed above. Failure to submit a timely
filed written direct case will result in dismissal of that party's
claim. Parties must comply with the form and content of written direct
cases as prescribed in 37 CFR 251.43. Each party to the proceeding must
deliver a complete copy of its written direct case to each of the other
parties to the proceeding, as well as file a complete copy with the
Copyright Office by close of business on January 18, 2000, the first
day of the 45-day period.
After the filing of the written direct cases, document production
will proceed according to the above-described schedule. Each party may
request underlying documents related to each of the other parties'
written direct cases by January 26, 2000, and responses to those
requests by February 1, 2000. Documents which are produced as a result
of the requests must be exchanged by February 7, 2000. It is important
to note that all initial document requests must be made by the January
26, 2000, deadline. Thus, for example, if one party asserts facts that
expressly rely on the results of a particular study that was not
included in the written direct case, another party desiring production
of that study must make its request by January 26, 2000; otherwise, the
requesting party is not entitled to production of the study.
The precontroversy discovery schedule also establishes deadlines
for follow-up discovery requests. Follow-up requests are due by
February 11, 2000, and responses to those requests are due by February
16, 2000. Any documentation produced as a result of a follow-up request
must be exchanged by February 28, 2000. An example of a follow-up
request would be as follows. In the above example, one party expressly
relies on the results of a particular study which is not included in
its written direct case. As noted above, a party desiring production of
that study or survey must make its
[[Page 52109]]
request by January 26, 2000. If, after receiving a copy of the study,
the reviewing party determines that the study heavily relies on the
results of a statistical survey, it would be appropriate for that party
to make a follow-up request for production of the statistical survey by
the February 11, 2000, deadline. Again, failure to make a timely
follow-up request would waive the requesting party's right to request
production of the survey.
In addition to the deadlines for document requests and production,
there are two deadlines for the filing of precontroversy motions.
Motions related to document production must be filed by February 22,
2000. Typically, these motions are motions to compel production of
requested documents for failure to produce them, but they may also be
motions for protective orders. Finally, all other motions, petitions
and objections must be filed by March 2, 2000, the final day of the 45-
day precontroversy discovery period. These motions, petitions, and
objections include, for example, petitions to dispense with formal
hearings under Sec. 251.41(b).
Due to the time limitations between the procedural steps of the
precontroversy discovery schedule, we are requiring that all discovery
requests and responses to such requests be served by hand or fax on the
party to whom such response or request is directed. Filing of requests
and responses with the Copyright Office is neither encouraged nor
required.
Filing and service of all precontroversy motions, petitions,
objections, oppositions, and replies shall be as follows. In order to
be considered properly filed with the Librarian and/or Copyright
Office, all pleadings must be delivered to the Copyright Office no
later than 5 p.m. of the filing deadline date. Parties may deliver the
pleadings to: Office of the Register of Copyrights, Room LM-403, James
Madison Memorial Building, 101 Independence Avenue, S.E., Washington,
D.C. 20540; or alternatively, parties may send their pleadings by
Federal Express to: Copyright Arbitration Royalty Panel (CARP), Attn:
Gina Giuffreda (Tel. 202-707-8380), Federal Express, 208 Second Street,
S.E., Washington, D.C. 20003, provided that the filing reaches the
Copyright Office by the deadline. The Office cautions parties to use
only the Federal Express address listed in this Notice, to include the
telephone number of the Office, and to direct the package to the
attention of the CARP Specialist, Ms. Gina Giuffreda. The Federal
Express office will notify the Copyright Office upon receipt of a
properly addressed package, and the Copyright Office will make
arrangements to pick up the package the same day. Under no
circumstances will the Office make arrangements to retrieve a package
from any other Federal Express location or track a misdirected package.
Each party bears the responsibility for insuring that the filings are
in the Copyright Office by the deadline.
The form and content of all motions, petitions, objections,
oppositions, and replies filed with the Office must be in compliance
with Secs. 251.44(b)-(e). As provided in Sec. 251.45(b), oppositions to
any motions or petitions must be filed with the Office no later than
seven business days from the date of filing of such motion or petition.
Replies are due five business days from the date of filing of such
oppositions. Service of all motions, petitions, objections,
oppositions, and replies must be made on counsel or the parties by
means no slower than overnight express mail on the same day the
pleading is filed.
Initiation of Arbitration
The 180-day arbitration period will be initiated on May 1, 2000.
The schedule of the arbitration proceeding will be established by the
CARP after the three arbitrators have been selected.
Future Proceedings
Sections 114(f)(2)(C) and 112(e)(7) of the Copyright Act, title 17,
require the publication of a notice of the initiation of voluntary
negotiation proceedings during the first week of January 2000. The
purpose of these negotiations would be to set rates and terms for the
public performance of sound recordings by means of eligible
nonsubscription transmission services and for the making of ephemeral
recordings for the period January 1, 2001, to December 31, 2003.
Parties to a voluntary agreement, however, may designate an alternative
schedule for setting rates and terms for the section 114 license as a
provision of the settlement agreement. 17 U.S.C. 114(f)(2)(A) and
(2)(C)(i)(II); 17 U.S.C. 112(e) (4) and (7).
In the event the parties to the current proceeding do not reach a
settlement agreement prior to the first week of January, 2000, which
includes an alternative schedule for setting rates and terms to cover
the period January 1, 2001, to December 31, 2003, the Office will
adhere to the statutory time frame and announce the initiation of the
voluntary negotiation period for this next two-year cycle.
Dated: September 21, 1999.
David O. Carson,
General Counsel.
[FR Doc. 99-25040 Filed 9-24-99; 8:45 am]
BILLING CODE 1410-33-P