[Federal Register: September 12, 2000 (Volume 65, Number 177)]
[Proposed Rules]
[Page 54984-54985]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 201 and 256
[Docket No. 2000-4 CARP CRA]
Adjustment of Cable Statutory License Royalty Rates
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Copyright Office of the Library of Congress is submitting
for public comment a settlement proposal for the adjustment of the
royalty rates for the cable statutory license.
DATES: Comments and Notices of Intent to Participate are due by October
12, 2000.
ADDRESSES: If sent by mail, an original and five copies of comments and
Notices of Intent to Participate should be addressed to: Copyright
Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station,
Washington, DC 20024. If hand delivered, copies should be brought to:
Office of the Copyright General Counsel, James Madison Memorial
Building, Room LM-403, First and Independence Avenue, SE., Washington,
DC 20540.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or
William J. Roberts, Jr., Senior Attorney for Compulsory Licenses,
Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest
Station, Washington, DC 20024. Telephone: (202) 707-8380. Telefax (202)
252-3423.
SUPPLEMENTARY INFORMATION:
I. Background
Section 111 of the Copyright Act, 17 U.S.C., creates a statutory
license for cable systems that retransmit to their subscribers over-
the-air broadcast signals. Royalty fees for this license are calculated
as percentages of a cable system's gross receipts received from
subscribers for receipt of broadcast signals. A cable system's
individual gross receipts determine the applicable percentages. These
percentages, and the gross receipts limitations, are published in 37
CFR part 256 and are subject to adjustment at five-year intervals. 17
U.S.C. 801(b)(2)(A) & (D). This is a window year for such an
adjustment.
A cable rate adjustment is initiated by the filing of a petition
from a party with a significant interest in the rates. The Library
received two such petitions: One filed on behalf of the National
Basketball Association, the National Hockey League, Major League
Baseball, and the National Collegiate Athletic Association; the other
filed on behalf of syndicated television programmers. The Library
published a Federal Register notice seeking comment on these petitions
and directed interested parties to file a Notice of Intent to
Participate in a Copyright Arbitration Royalty Panel (``CARP'')
proceeding. 65 FR 10564 (February 28, 2000). The Library also
designated a 30-day period to negotiate a settlement as to adjustment
of the rates. 37 CFR 251.63(a). The Library extended the negotiation
period on two separate occasions in Orders dated May 15, 2000, and June
5, 2000. The extensions proved to be successful, as the Library has now
received a joint proposal to adjust the cable royalty fees and the
gross receipts limitations.
When a joint proposal is received in a rate adjustment proceeding,
the Librarian may, upon the request of the parties, submit the
agreed upon rate to the public in a notice-and-comment proceeding.
The Librarian may adopt the rate embodied in the proposed settlement
without convening an arbitration panel, provided that no opposing
comment is received by the Librarian from a party with an intent to
participate in a CARP proceeding.
37 CFR 251.63(b). This Federal Register notice implements the
requirements of Sec. 251.63(b).
II. Proposed Rates and Gross Receipts Limitations
On June 30, 2000, the Library received a joint proposal from the
National Cable Television Association; the Joint Sports Claimants; the
Program Suppliers; the Canadian Claimants; the Public Television
Claimants; the National Association of Broadcasters; Broadcast Music,
Inc.; the American Society of Composers, Authors and Publishers; SESAC,
Inc.; the Devotional Claimants; and National Public Radio, which
represent all the parties that filed a Notice of Intent to Participate
in this proceeding. The joint proposal puts forward adjustments to the
cable license royalty rates, pursuant to 17 U.S.C. 801(b)(2)(A), and
the gross receipts
[[Page 54985]]
limitations, pursuant to 17 U.S.C. 801(b)(2)(D). The details of the
adjustments are as follows.
With respect to rates, the joint proposal raises the basic (or
minimum) fee for providing broadcast stations from .893 of 1 per centum
to .956 of 1 per centum of gross receipts for the privilege of further
transmitting any non-network programming of a primary transmitter in
whole or in part beyond the local service area of such primary
transmitter; the fee for the first distant signal equivalent from .893
of 1 per centum to .956 of 1 per centum of gross receipts; the fee for
the second, third, and fourth distant signal equivalent from .563 of 1
per centum to .630 of 1 per centum of gross receipts; and the fee for
the fifth distant signal equivalent and each distant signal equivalent
thereafter, from .265 of 1 per centum to .296 of 1 per centum of gross
receipts.
With respect to the gross receipts limitations which determine the
size of a cable system (small, medium or large) and the royalty fee
percentages that apply to those characterizations, the joint proposal
puts forward increases as well. The gross receipts threshold for
determining when a cable system is a small system would be raised from
$75,800 to $98,600. Medium-sized cable systems have two methods of
calculating their royalties, depending upon which side of the
limitation threshold their gross receipts result. That threshold would
be raised from $146,000 to $189,800, with the minimum reportable gross
receipts over $189,800 being raised from $5,600 to $7,400. Finally, the
gross receipts limitation for determining a large cable system would be
raised from $292,000 to $379,600.
The joint proposal establishes July 1, 2000, as the effective date
of these rates, meaning that they would apply to royalty calculations
and payments made by cable systems beginning with the second accounting
period of 2000.
III. Proposed Rulemaking
As noted above, the Library is publishing the terms of the joint
proposal as proposed amendments to parts 201 and 256 of its rules. Any
party who wishes to challenge these proposed rules must submit its
written comments to the Librarian of Congress no later than close of
business on October 12, 2000. The content of the written challenge
should describe the party's interest in this proceeding, the proposed
rule or rules that the party finds objectionable, and the reasons for
the challenge.
In addition, any party submitting written challenges must also
submit an accompanying Notice of Intent to Participate in a CARP
proceeding to adjust the cable rates and gross receipts limitations. It
should be understood that anyone who challenges the proposed rules must
be willing to fully participate in a CARP proceeding and have a
significant interest in the adjustment of the rates. Failure to submit
a Notice of Intent to Participate will preclude an interested party
from participating in this proceeding and will preclude consideration
of his or her written challenge. Any interested party that does file a
Notice of Intent to Participate will be notified as to when the CARP
proceeding will commence and when written direct cases will be due.
List of Subjects
37 CFR Part 201
Copyright, Procedures.
37 CFR Part 256
Cable television, Royalties.
For the reasons set forth in the preamble, the Library proposes to
amend 37 CFR parts 201 and 256 as follows:
PART 201--GENERAL PROVISIONS
1. The authority citation for part 201 continues to read as
follows:
Authority: 17 U.S.C. 702.
Sec. 201.17 Statements of Account covering compulsory licenses for
secondary transmissions by cable systems.
2. In Sec. 201.17(d)(2), remove ``$292,000'' each place it appears
and add ``$379,600'' in its place.
3. In Sec. 201.17(e)(12), remove ``$75,800'' and add ``$98,600'' in
its place.
4. In Sec. 201.17(g)(2)(ii), remove ``.893'' and add ``.956'' in
its place.
PART 256--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE
5. The authority citation for part 256 continues to read:
Authority: 17 U.S.C. 702, 802.
Sec. 256.2 Royalty fee for compulsory license for secondary
transmission by cable systems.
6. In Sec. 256.2(a), introductory text, remove the phrase ``the
first semiannual accounting period of 1985'' and add the phrase ``the
second semiannual accounting period of 2000'' in its place.
7. In Sec. 256.2(a)(1), remove ``.893'' and add ``.956'' in its
place.
8. In Sec. 256.2(a)(2), remove ``.893'' and add ``.956'' in its
place.
9. In Sec. 256.2(a)(3), remove ``.563'' and add ``.630'' in its
place.
10. In Sec. 256.2(a)(4), remove ``.265'' and add ``.296'' in its
place.
11. In Sec. 256.2(b), introductory text, remove the phrase ``the
first semiannual accounting period of 1985'' and add the phrase ``the
second semiannual accounting period of 2000'' in its place.
12. In Sec. 256.2(b)(1), remove ``$146,000'' and add ``$189,800''
in its place, and remove ``$5,600'' and add ``$7,400'' in its place.
13. In Sec. 256.2(b)(2), remove ``$146,000'' each place it appears,
and add ``$189,800'' in its place, and remove ``$292,000'' each place
it appears and add ``$379,600'' in its place.
Dated: September 7, 2000.
David O. Carson,
General Counsel.
[FR Doc. 00-23388 Filed 9-11-00; 8:45 am]
BILLING CODE 1410-33-P