[Federal Register: September 30, 2004 (Volume 69, Number 189)]
[Rules and Regulations]
[Page 58261-58262]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30se04-7]
[[Page 58261]]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 270
[Docket No. RM 2002-1G]
Notice and Recordkeeping for Use of Sound Recordings Under
Statutory License
AGENCY: Copyright Office, Library of Congress.
ACTION: Final rule.
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SUMMARY: The Copyright Office of the Library of Congress is announcing
a final regulation specifying notice and recordkeeping requirements
governing the reporting of certain uses of sound recordings performed
by means of digital audio transmissions pursuant to statutory license
for the period October 28, 1998, through March 31, 2004.
EFFECTTIVE DATE: November 1, 2004.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or
Gina Giuffreda, Attorney-Advisor, P.O. Box 70977, Southwest Station,
Washington, DC 20024. Telephone: (202) 707-8380; Telefax: (202) 252-
3423.
SUPPLEMENTARY INFORMATION:
Background
The Copyright Act grants copyright owners of sound recordings the
exclusive right to perform their works publicly by means of digital
audio transmissions subject to certain limitations and exceptions.
Among the limitations placed on the performance right for sound
recordings are certain exemptions and a statutory license that permits
certain eligible subscription, nonsubscription, and satellite digital
audio radio to perform those sound recordings publicly by means of
digital audio transmissions. 17 U.S.C. 114.
Similarly, copyright owners of sound recordings are granted the
exclusive right to make copies of their works subject to certain
limitations and exceptions. Among the limitations placed on the
reproduction right for sound recordings is a statutory license that
permits certain eligible subscription, nonsubscription, satellite
digital audio, and business establishment services to make ephemeral
copies of those sound recordings to facilitate their digital
transmission. 17 U.S.C. 112(e).
Both the section 114 and 112 licenses require services to, among
other things, report to copyright owners of sound recordings on the use
of their works. Both licenses direct the Librarian of Congress to
establish regulations to give copyright owners reasonable notice of the
use of their works and create and maintain records of use for delivery
to copyright owners. 17 U.S.C. 114(f)(4)(A) and 17 U.S.C. 112(e)(4).
The purpose of this notice and recordkeeping requirement is to ensure
that the royalties collected under the statutory licenses are
distributed to the correct recipients.
The Copyright Office announced interim regulations on March 11,
2004, specifying notice and recordkeeping requirements for use of sound
recordings under the section 112 and 114 licenses. \1\ See 69 FR 11515
(March 11, 2004). However, those interim regulations are prospective
and do not address the notice and recordkeeping requirements for the
period from October 28, 1998 (the date the statutory licenses other
than the license for preexisting subscription services first became
available) through March 31, 2004 (the ``historic period'').
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\1\ Those regulations did not apply to preexisting subscription
services, which are defined in section 114 as services that perform
sound recordings by means of noninteractive audio-only subscription
digital audio transmissions which were in existence and were making
such transmissions to the public for a fee on or before July 31,
1998. 17 U.S.C. 114(j)(11). Requirements for preexisting
subscription services were announced in 1998, see 64 FR 34289 (June
24, 1998), and will not be affected by the rules adopted today.
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Proposed Rulemaking
Previously, the Office had published a notice of inquiry seeking
comment on what records of use are to be prescribed for uses of sound
recordings during the historic period, a period during which many
services had maintained few or, in many instances, no records of such
use. 68 FR 58054 (October 8, 2003). The Office received a number of
comments and, on July 13, 2004, the Office published a notice of
proposed rulemaking proposing rules to address the historic period that
were based upon the comments it had received in response to the notice
of inquiry. 69 FR 42007 (July13, 2004). Because few, if any, records of
prior use had been maintained to date and those that do exist would be
of little or no use in forming the basis for distribution of royalties
for the historic period, the Office concluded that there was little
likelihood of obtaining any useful and meaningful data by requiring
services to report information from the historic period. Instead of
requiring such retroactive reports, the Office followed the suggestion
of several commenters and proposed to adopt rules providing that a
proxy be used in lieu of reporting requirements for the historic
period. The proxy that emerged as the one most favored by the
commenters was the data already provided by the preexisting
subscription services to SoundExchange, Inc.\2\ under the regulations
announced in 1998 and now codified at 37 CFR 270.2 for transmissions
made under section 114(f).
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\2\ SoundExchange has been designated as the agent to receive
royalty payments and statements of account from the preexisting
subscription services. 37 CFR 260.3(f). SoundExchange was also
designated as the ``Receiving Agent'' to receive royalty payments
from eligible nonsubscription transmission services for the period
from October 28, 1998, through December 31, 2002. SoundExchange and
Royalty Logic, Inc. (``RLI'') were designated for the same period as
``designated agents'' to distribute those royalty payments to
copyright owners and performers. However, the regulations governing
that time period provided that with respect to any royalty payment,
RLI could act as designated agent only for copyright owners and
performers who notified SoundExchange that they had elected to use
RLI at least 30 days prior to SoundExchange's receipt of the royalty
payment. 37 CFR 261.4(b), (c). Our July 13 notice of proposed
rulemaking stated that it was the Office's understanding that no
copyright owners or performers had elected RLI as their designated
agent in accordance with Sec. 261.4(c), and that if that was the
case, the proposed regulation would not need to require
SoundExchange to provide to RLI any data from the preexisting
subscription services.
For the period after December 31, 2002, SoundExchange has been
the sole designated agent. 37 CFR 262.4(b).
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The Office proposed to adopt regulations specifying that the
records of use submitted by the preexisting subscription services
during the period between October 28, 1998, and March 31, 2004, shall
be considered the records of use for all services operating under the
section 112(e) and section 114 licenses and that no additional records
need be filed by the nonsubscription services, the satellite digital
radio audio services, business establishment services or new subscription
services.
Comments
Three comments were submitted to the Office in response to the
notice of proposed rulemaking. SoundExchange, Inc., a nonprofit
organization jointly controlled by representatives of copyright owners
and performers on whose behalf it receives and disburses section 114
statutory royalties, expressed its support for the proposed rule as
``the best solution for a bad situation''-i.e., a situation in which
services using the statutory license had not been required to retain
data on use of sound recordings. The National Association of
Broadcasters, many of whose members operate under the statutory
license, also expressed its support for the proposed rule.
RLI submitted a comment in which it took no position on the use of
data from
[[Page 58262]]
the preexisting subscription services as a proxy. However, RLI asserted
that contrary to the Office's understanding, a number of copyright
owners and performers had designated RLI as their designated agent to
distribute statutory royalties. RLI therefore urged that the records of
use submitted by the preexisting subscription services to SoundExchange
be provided to RLI as well so that RLI could use those records in its
distribution of royalties to copyright owners and performers who have
designated it as their designated agent. RLI further requested that the
regulations provide that RLI receive such records directly from the
preexisting subscription services rather than from SoundExchange.
The Final Rule
In light of the support in the comments for adoption of the reports
already submitted by the preexisting subscription services as a proxy
for reports from nonsubscription services, the satellite digital radio
audio services, business establishment services or new subscription
services, the Office has decided to adopt the proposed rule as a
final rule.
However, RLI's assertion that it is entitled to receive the
preexisting subscription services' reports requires a modification of
the proposed rule. Whether RLI has or has not properly been designated
by any copyright owners or performers is not an issue that can be
resolved in this rulemaking proceeding; nor is there any need to
resolve that issue. It will suffice to provide in the regulation that
if RLI has been properly designated by any copyright owners or
performers,\3\ SoundExchange must provide copies of the preexisting
subscription services' reports to that designated agent. The Office
rejects as impractical RLI's request that the preexisting subscription
services be required to send those reports directly to RLI. The reports
in question, which cover the period from October 28, 1998, through
March 31, 2004, have already been submitted to SoundExchange (or its
predecessor, the Recording Industry Association of America) over a
period of several years under the existing notice and recordkeeping
regulations for preexisting subscription services. It would be an
unfair burden on the preexisting subscription services to require them
now to serve additional copies of those reports (copies of which they
have not necessarily retained) on RLI, especially when all the reports
are now in the possession of SoundExchange, which necessarily will have
retained those reports to assist in distribution of royalties.
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\3\ And RLI is the only other entity eligible to be so
designated.
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List of Subjects in 37 CFR Part 270
Copyright, Sound recordings.
Final Regulation
0
In consideration of the foregoing, the Copyright Office amends part 270
of 37 CFR to read as follows:
0
1. The authority citation for part 270 continues to read as follows:
Authority: 17 U.S.C. 702.
PART 270--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY
LICENSES
0
2. Part 270 is amended as follows:
0
a. By redesignating Sec. 270.4 as Sec. 270.5; and
0
b. By adding a new Sec. 270.4 to read as follows:
Sec. 270.4 Reports of use of sound recordings under statutory license
prior to April 1, 2004.
(a) General. This section prescribes the rules which govern reports
of use of sound recordings by nonsubscription transmission services,
preexisting satellite digital audio radio services, new subscription
services, and business establishment services under section 112(e) or
section 114(d)(2) of title 17 of the United States Code, or both, for
the period from October 28, 1998, through March 31, 2004.
(b) Reports of use. Reports of use filed by preexisting
subscription services for transmissions made under 17 U.S.C. 114(f)
pursuant to Sec. 270.2 for use of sound recordings under section 112(e)
or section 114(d)(2) of title 17 of the United States Code, or both,
for the period October 28, 1998, through March 31, 2004, shall serve as
the reports of use for nonsubscription transmission services,
preexisting satellite digital audio radio services, new subscription
services, and business establishment services for their use of sound
recordings under section 112(e) or section 114(d)(2) of title 17 of the
United States Code, or both, for the period from October 28, 1998,
through March 31, 2004.
(c) Royalty Logic Inc. If, in accordance with Sec. 261.4(c), any
Copyright Owners or Performers have provided timely notice to
SoundExchange of an election to receive royalties from Royalty Logic,
Inc. as a Designated Agent for the period October 28, 1998, through
December 31, 2002, or any portion thereof, SoundExchange shall provide
to RLI copies of the Reports of Use described in paragraph (b) of this
section for that period or the applicable portion thereof.
Dated: September 21, 2004
Marybeth Peters,
Register of Copyrights.
Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 04-22002 Filed 9-29-04; 8:45 am]
BILLING CODE 1410-33-S