[Federal Register: September 13, 2000 (Volume 65, Number 178)]
[Notices]
[Page 55302-55303]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. 2000-3 CARP DTRA2]
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 receipt of a petition to
convene a Copyright Arbitration Royalty Panel (``CARP'') to set rates
and terms for the period beginning January 1, 2001, for two statutory
licenses which, in one case, allows certain eligible nonsubscription
services to perform sound recordings publicly by means of digital audio
transmissions and, in the second case, 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 October 13, 2000.
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, SE.,
Washington, DC 20559-6000; or mailed to: Copyright Arbitration Royalty
Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or
Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel,
P.O. Box 70977, Southwest Station, Washington, DC 20024. Telephone:
(202) 707-8380. Telefax: (202) 252-3423.
SUPPLEMENTARY INFORMATION:
Background
Since 1995 copyright owners of sound recordings have enjoyed an
exclusive right to perform publicly their copyrighted work by means of
a digital audio transmission, subject to certain limitations. 17 U.S.C.
106(6). Among the initial limitations placed on the performance of the
sound recording was the creation of a statutory license to cover
performances made by nonexempt, noninteractive, digital subscription
services. 17 U.S.C. 114 (1995).
However, it soon became apparent that with the increased use of
digital communications networks, like the Internet, further legislation
was needed to clarify how the law applied to nonsubscription digital
audio services. Congress responded by passing the Digital Millennium
Copyright Act of 1998 (``DMCA''), Public Law 105-304, which amended
section 114 to expand the scope of the statutory license to include a
public performance of a sound recording by means of ``an eligible
nonsubscription transmission'' \1\ and a transmission by ``a
preexisting satellite digital audio radio service'' which performs a
sound recording by means of a digital audio transmission.\2\
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\1\ 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. 17 U.S.C.
114(j)(6)(1998).
\2\ 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. 17 U.S.C.
114(j)(10)(1998). Only two entities, CD Radio and XM Satellite Radio
(formerly known as American Mobile Radio Corporation), are known to
qualify under the statutory definition as preexisting satellite
digital audio radio services.
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The DMCA also created a second statutory license to cover the
making of an ``ephemeral recording'' of a sound recording--a necessary
adjunct to the making of a digital transmission. 17 U.S.C. 112(e). 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 procedure set forth in the statute for establishing reasonable
terms and rates is the same for both licenses. See 17 U.S.C. 112(e),
114(f), 801(b)(1) and 803(a). The terms and rates for the two new
statutory licenses may be determined through a voluntary
[[Page 55303]]
negotiation process, or if necessary, through compulsory arbitration
conducted pursuant to Chapter 8 of the Copyright Act. If interested
parties are able to negotiate an industry-wide agreement during the
negotiation phase of the proceeding, they may submit the proposal to
the Copyright Office for publication in the Federal Register. The
Librarian can adopt the proposed terms and rates without convening a
copyright arbitration royalty panel (``CARP''), provided that no party
with a substantial interest and a desire to participate in an
arbitration proceeding files a comment opposing the negotiated rates
and terms. 37 CFR 251.63(b). If, however, no industry-wide agreement is
reached, or only certain parties negotiate license agreements, then a
user relying upon one or both of the statutory licenses shall be bound
by the terms and rates established through the arbitration process.
To initiate the arbitration phase of the proceeding, an interested
party must file a petition with the Copyright Office, requesting that a
CARP be convened for the purpose of determining the rates and terms for
the statutory licenses. See 17 U.S.C. 112(e)(6), 114(f)(2)(C),
801(b)(1) and 803(a)(1).
Initial Rate Adjustment Proceeding
When Congress passed the DMCA in 1998, it chose not to set rates
and terms for either the new section 112 or the expanded section 114
license. Instead, the statute directed the Librarian of Congress to
initiate a voluntary negotiation period within 30 days of enactment of
the act for the purpose of determining reasonable terms and rates for
each license for the period beginning on the date of enactment of the
DMCA and ending on December 31, 2000. 17 U.S.C. 112(e)(4) and
114(f)(2)(A); see also, 63 FR 65555 (November 27, 1998).
In response to the November 27 notice, interested parties engaged
in extensive negotiations but were unable to reach a settlement
agreeable to all parties. Consequently, the Recording Industry
Association of America, Inc. (``RIAA'') filed a petition on July 23,
1999, with the Copyright Office in accordance with 17 U.S.C. 112(e)(4)
and 114(f)(2)(B), requesting that the Office convene a CARP for the
purpose of setting rates and terms for the public performance of sound
recordings by means of eligible nonsubscription transmissions and the
making of the necessary ephemeral recordings to facilitate the
transmissions during the period beginning on October 28, 1998, and
ending on December 31, 2000.
Accordingly, the Office announced a schedule, setting the dates for
the 45-day precontroversy discovery period and the initiation of the
date of the 180-day arbitration period for the initial rate adjustment
proceeding. See 64 FR 52107 (September 27, 1999). This schedule was
later suspended, pending completion of a rulemaking proceeding the
purpose of which was to determine whether a broadcaster could stream an
AM/FM radio signal via the Internet under a statutory provision that
exempted a broadcast transmission from the digital performance right.
See Order, Docket No. 99-6 CARP DTRA (March 21, 2000); 65 FR 14227
(March 16, 2000).
Petition to Convene a Second Copyright Arbitration Royalty Panel
In the interim, the Copyright Office announced a new negotiation
period, in accordance with section 112(e)(6) and 114(f)(2)(C)(i)(II) of
the Copyright Act. See 65 FR 2194 (January 13, 2000). The purpose of
the second round of negotiations was to set the rates and terms for the
section 112 and section 114 statutory licenses for the next period
beginning on January 1, 2001. Absent an industry-wide, negotiated
license agreement for the new period, copyright owners of sound
recordings and entities availing themselves of the statutory licenses
from January 1, 2001, onward, are subject to the final determination of
an arbitration proceeding that will set the rates and terms for the new
period. To date, no settlement agreement has been filed with the
Office. To convene a CARP for this purpose, however, a party with a
significant interest in establishing reasonable terms and rates for the
statutory licenses must file a petition with the Copyright Office,
requesting that a CARP adjust the rates and terms. 17 U.S.C. 112(e)(6),
114(f)(2)(C), 801(b)(1) and 803(a)(1). Petitions had to be filed with
the Office during a 60-day period beginning on July 1, 2000.
On August 28, 2000, RIAA filed a petition in accordance with 17
U.S.C. 112(e)(6) and 114(f)(2)(C) requesting that the Office convene a
CARP for the purpose of setting rates and terms in accordance with
these provisions for the two-year period beginning January 1, 2001. In
the petition, RIAA also states that it ``reserves the right to request
that the Librarian adopt terms and rates under sections 112 and 114 for
the 2001-2002 license period without convening a CARP, depending on the
outcome of the pending negotiations and the 1998-2000 CARP proceeding .
. . [and] the right to seek separate proceedings to establish terms and
rates as appropriate even though [it] is submitting a single petition
under both Section 112 and Section 114 statutory licenses and for all
eligible services.'' Petition at 2-3.
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
October 13, 2000. The Librarian will consider these comments when
evaluating the sufficiency of the petition. See 37 CFR 251.64.
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 October 13, 2000 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 the purpose
of which 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.
Precontroversy Discovery Periods and Initiation of Arbitrations
Schedules for the 45-day precontroversy discovery period will be
announced for the rate adjustment proceedings, Docket Nos. 99-6 CARP
DTRA and 2000-3 CARP DTRA2, once the Office concludes the rulemaking
proceeding concerning the streaming of an AM/FM radio signal over the
Internet by an FCC-licensed broadcaster and issues its ruling on a
pending motion to consolidate the initial rate adjustment proceeding
with the second proceeding the purpose of which is to consider rates
and terms for the sections 112 and 114 statutory licenses for the
period beginning on January 1, 2001.
Dated: September 8, 2000.
David O. Carson,
General Counsel.
[FR Doc. 00-23538 Filed 9-12-00; 8:45 am]
BILLING CODE 1410-33-P