[Federal Register: May 9, 1994]
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Part III
Library of Congress
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Copyright Office
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37 CFR Parts 251, 252, etc.
Copyright Arbitration Royalty Panels; Rules and Regulations; Interim
Rule
LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 251, 252, 253, 254, 255, 256, 257, 258, 259, 301, 302,
303, 304, 305, 306, 307, 308, 309, 310 and 311
[Docket No. RM 94-1A]
Copyright Arbitration Royalty Panels; Rules and Regulations
AGENCY: Copyright Office, Library of Congress.
ACTION: Interim regulations.
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SUMMARY: The Copyright Office of the Library of Congress is issuing
interim regulations to revise the rules and regulations of the former
Copyright Royalty Tribunal adopted by the Office on December 22, 1993.
The Office is seeking comments on these interim rules, which will
govern the conduct of royalty distribution and rate adjustment
proceedings prescribed by the Copyright Royalty Tribunal Reform Act of
1993 until final regulations are adopted.
DATES: Effective May 9, 1994.
Written comments should be received by June 15, 1994. Reply
comments should be received by July 15, 1994.
ADDRESSES: Fifteen copies of written comments should be addressed, if
sent by mail, to: Copyright Arbitration Royalty Panel (CARP), P.O. Box
70977, Southwest Station, Washington, DC 20024. If delivered by hand,
copies should be brought to: Office of the General Counsel, Copyright
Office, room LM-407, James Madison Memorial Building, 101 Independence
Avenue, SE., Washington, DC 20540.
FOR FURTHER INFORMATION CONTACT: William Roberts, Senior Attorney, U.S.
Copyright Office, Library of Congress, Washington, DC 20540, (202) 707-
8380.
SUPPLEMENTARY INFORMATION: The Copyright Royalty Tribunal Reform Act of
1993, Public Law 103-198, eliminated the Copyright Royalty Tribunal
(CRT) and replaced it with a system of ad hoc Copyright Arbitration
Royalty Panels (CARPs), administered by the Librarian of Congress and
the Copyright Office, for purposes of distributing royalties and
adjusting royalty rates for the various compulsory licenses and
statutory obligations of the Copyright Code. The CRT Reform Act, which
was effective immediately upon its enactment, directed the Librarian
and the Office to adopt the rules and regulations of the CRT found in
chapter 3 of 37 CFR, 17 U.S.C. 802(d), and provided that the CRT's
regulations were to remain in effect until the Librarian adopts
``supplemental or superseding regulations.'' The Office adopted the
CRT's rules and regulations on an interim basis on December 22, 1993,
and notified the public that it intended to begin a rulemaking
proceeding to revise and update those rules. 58 FR 67690 (1993).
Today's interim regulations are the latest result of that rulemaking
proceeding.
I. Notice of Proposed Rulemaking
On January 18, 1994, the Copyright Office of the Library of
Congress published a Notice of Proposed Rulemaking (NPRM) establishing
a new set of rules and regulations intended to revise those of the
former CRT. The NPRM contained long and substantial revisions required
by the dual structure of the royalty rate adjustment and distribution
system created by the CRT Reform Act. Instead of a single
administrative body (the CRT), the new system features a division of
authority. The Librarian and the Copyright Office are responsible for
doing the preliminary work necessary for the operation of both the
distribution and the rate adjustment proceedings, including the
organization and selection of the CARPs. The CARPs are given sole
authority to determine the appropriate distribution of royalties and
the royalty rates. Their determinations are later reviewed by the
Librarian of Congress. Since the CRT's rules were not designed to
implement a system such as this, we were obliged to institute this
rulemaking proceeding.
The NPRM proposed removal of parts 301 through 311 of chapter III
of 37 CFR and creation of subchapters A and B of chapter II. Subchapter
A comprises the Copyright Office's rules and procedures, consisting of
parts 201-211, which remain unchanged. New subchapter B, which is the
subject of this rulemaking, comprises parts 251-259, and is devoted
entirely to the rules and procedures of the CARPs. In the NPRM, part
251, the Copyright Arbitration Royalty Panel Rules of Procedure,
consisted of proposed regulations to govern the organization of the
CARPs, access to CARP meetings and records, rules governing the conduct
and course of proceedings, and procedures applicable to rate
adjustments and distributions. The NPRM also reserved a subsection for
standards of conduct for arbitrators, and sought comment as to what the
appropriate ethical and financial standards should be.
New part 252 proposed revised rules for the filing of claims to
cable copyright royalties, modeled after the system used by the CRT for
the filing of digital audio (DART) royalty claims. Parts 253 to 256--
Use of Certain Copyrighted Works in Connection With Noncommercial
Educational Broadcasting; Adjustment of Royalty Rate for Coin-Operated
Phonorecord Players; and Adjustment of Royalty Payable Under Compulsory
License for Making and Distributing Phonorecords--proposed only
technical changes to the former CRT's rules. Like part 252, part 257--
Filing of Claims to Satellite Carrier Royalty Fees--was modeled after
the royalty claim procedures used by the CRT for DART. Finally, parts
258 and 259--Adjustment of Royalty Fee for Secondary Transmissions by
Satellite Carriers and Filing of Claims to Digital Audio Recording
Devices and Media Royalty Payments--contained only minor technical
amendments. Since the CRT Reform Act eliminated the jukebox compulsory
license, 17 U.S.C. 116, and replaced it with a provision for negotiated
licenses, the NPRM proposed elimination of the CRT's rules governing
the filing of jukebox claims (formerly part 305 of 37 CFR).
Following issuance in the Federal Register of the NPRM, the
Copyright Office invited the interested parties to a public meeting to
discuss the proposed regulations concerning rules and procedures for
Copyright Arbitration Royalty Panels. The public meeting was held on
February 1, 1994, at Hearing room 921 of the Office of the former
Copyright Royalty Tribunal. More than 50 individuals attended; comments
were noted in an unofficial transcript and became part of the
Administrative Record.<SUP>1 Written comments on the proposed
rulemaking were due on or before February 15, 1994. Both oral and
written comments are reflected in our current proceeding.
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\1\Individuals wishing to inspect the unofficial transcript of
this meeting may contact the Copyright General Counsel's Office at
(202) 707-8380.
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The Office received a total of 11 comments.<SUP>2 Many parties
filed joint comments, and some of the joint commentators also filed
separate comments. The commentator groups for each of the 11 comments
were as follows:
\2\The first ten comments were filed on time. The 11th comment,
from the Public Broadcasting Service, was filed April 21, 1994, more
than two months late, and included a motion for leave to file the
comment. The Copyright Office sees no reason why consideration of
the comment should be denied, and we are therefore granting PBS'
motion and considering the views expressed in the comment for this
rulemaking.
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Recording Industry Association of America, Inc and the Alliance of
Artists and Recording Companies, Inc. (referred to collectively as
``RIAA/AARC'');
National Music Publishers Association and the Harry Fox Agency
(collectively ``Music Publishers'');
Electronic Industries Association (``EIA'');
American Society of Composers, Authors and Publishers, Broadcast Music,
Inc., and SESAC, Inc. (collectively ``Performing Rights Societies'');
United Video Division of United Video Satellite Group, Inc. (``United
Video'');
National Cable Television Association (``NCTA'');
Program Suppliers, Joint Sports Claimants, the National Association of
Broadcasters, Public Broadcasting Service, American Society of
Composers, Authors and Publishers, Broadcast Music, Inc., SESAC, Inc.,
the Devotional Claimants, the Canadian Claimants, and National Public
Radio (collectively ``Copyright Owners'');<SUP>3
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\3\ The parties comprising the Copyright Owners derive their
names from their ``Phase I'' categories in the former Tribunal's
cable royalty distribution proceedings. The Program Suppliers are
more than 100 producers and distributors of syndicated series,
movies, and television specials represented by the Motion Picture
Association of America. The Joint Sports Claimants consist of Major
League Baseball, the National Basketball Association, the National
Hockey League and the National Collegiate Athletic Association. NAB
represents claiming television and radio stations. PBS represents
claiming member television stations and producers of public
television programs. ASCAP, BMI and SESAC are three performing
rights societies, also known as the Music Claimants, representing
their members and affiliates. The Devotional Claimants consist of
several producers and syndicators of religious programming. The
Canadian Claimants represent Canadian programs broadcast by Canadian
television stations. NPR represents its claiming member radio
stations.
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Program Suppliers (``Program Suppliers'');
Joint Sports Claimants, the National Association of Broadcasters,
Public Broadcasting Service, the Devotional Claimants, the Canadian
Claimants, and National Public Radio (collectively ``Certain Copyright
Owners'').
Gospel Music Coalition and Copyright Management, Inc. (collectively
``Gospel Music'');
Public Broadcasting Service (``PBS'').
II. CRT Precedent and Pending Matters
The NPRM addressed a significant preliminary issue: How the
Copyright Office should deal with matters that were pending before the
CRT at the time of its elimination. The Office stated that it was ``of
the firm opinion that it is not the successor agency or office to the
Copyright Royalty Tribunal'' and that it was therefore making a
``preliminary finding that all proceedings pending before the Tribunal
at the time of its elimination were terminated at that time.'' 59 FR
2551 (1994). Parties wishing to have pending matters considered by
either the Office, or the CARPs, or both, would have to resubmit the
matters to the Office. Id.
The Office went on to discuss the precedential effect, if any, of
orders and rulings of the Tribunal issued in proceedings that were
pending before the Tribunal at the time of its termination. We
concluded:
The Office has no intention of questioning or reopening matters
decided by the former Tribunal with respect to ongoing proceedings.
However, we understand that the termination of pending Tribunal
proceedings and the requirement of new filings will likely raise
again some of the issues previously decided by the Tribunal. The
Copyright Office of the Library of Congress makes a preliminary
finding that, while we will look to the Tribunal's decisions and
orders for guidance, neither the Office nor the Copyright
Arbitration Royalty Panels are legally bound by those decisions. All
legal issues related to proceedings pending before the Tribunal at
the time of its elimination may therefore be resubmitted to the
Copyright Office and, where appropriate, to the Arbitration Panels
for consideration. Id.
We also noted in a footnote to this paragraph:
The Copyright Office acknowledges that it is of course bound by
rate adjustments and distributions that the Tribunal had conducted
and concluded before its elimination. Thus, for example, the Office
will not entertain any petitions to reexamine cable distributions
for years earlier than 1990.
Id. at fn. 1.
These statements concerning the refiling of pending matters, and
the possible effect as legal precedent of CRT rulings in pending
proceedings, drew comments from two parties. The Copyright Owners
favored the Office's position that all pending CRT matters terminated
with enactment of the CRT Reform Act and would have to be refiled with
the Office, the CARPs, or both. Copyright Owners, comment at 2. They
noted that the largest single matter to be affected by this policy
decision is the 1990 cable distribution, and asked that the parties to
that proceeding be allowed to resubmit their cases with the Copyright
Office, but with two qualifications. First, according to the Copyright
Owners, the ``parties should be permitted to comment on the appropriate
dates for submittal of the 1990 cases and the start of the 1990 hearing
before a panel.'' Id. at 3. Second, they asked that the parties in the
1990 distribution not be restricted to evidence submitted to the CRT:
in other words, that they be allowed to update their cases in their
filings with the Office rather than being bound by what they previously
submitted to the Tribunal. Id. at 3-4.
On the issue of rulings by the CRT in pending proceedings, the
Copyright Owners agreed in principle with the Office's preliminary
finding that these CRT rulings are not binding, but suggested ``slight
changes to the phrasing of the discussion.'' Id. at 4. According to the
Copyright Owners, the NPRM was unclear as to whether the Office's
statement--that neither it nor the CARPs are bound by CRT rulings--
applied only to matters pending at the time of the CRT's termination,
or whether it was intended to apply to all CRT decisions. If the
language in the NPRM was intended to refer to all CRT rulings, then the
Copyright Owners argued that it is contrary to the intent and language
of 17 U.S.C. 802(c). Id. at 4-5.
RIAA/AARC also questioned the NPRM's statement regarding treatment
of CRT precedent. Their comments suggest that they interpret the NPRM
as asserting that the Office and the CARPs are free to ignore CRT
precedent in all cases. RIAA/AARC, comment at 1. RIAA/AARC appears to
be arguing that any and all decisions of the CRT--not only those in
concluded matters but also those in matters pending on or before
December 17, 1993--represent legal precedent that is binding on the
Office and the CARPs. Id. at 2.
On reexamination of the NPRM, and especially in light of these
comments, we have to admit that our discussions both of the refiling of
pending matters and the legal effect of CRT decisions were unclear.
These are extremely important issues, and we will try to clear up the
confusion here.
First of all, the Office restates its ``firm opinion that it is not
the successor agency or office to the Copyright Royalty Tribunal.'' 59
FR 2551 (1994). Second, we adhere to the policy determination that any
proceeding still pending before the CRT on the date of its elimination,
December 17, 1993--whether it involved rate adjustment, distribution,
rulemaking, or administration--terminated as of that date. The legal
effect of that termination is that the proceeding has ceased to exist,
and that any rulings or decisions made by the Tribunal during the
proceeding are null and void and without any binding effect, as
precedent or otherwise, on the Copyright Office, the CARPs, or the
parties.
In cases where a proceeding was terminated by operation of the CRT
Reform Act on December 17, 1993, the parties will be obliged to refile
in the Copyright Office in accordance with these new CARP regulations,
and present their arguments and, as a general rule, their
evidence,<SUP>4 as if there had never been a proceeding before the CRT.
Parties to the 1990 cable distribution are not bound by their earlier
filing with the CRT, and may refile their cases and evidence as they
see fit.<SUP>5
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\4\A question was raised in the February 1, 1994, meeting as to
the possibility, when the 1990 cable distribution proceedings are
initiated by a CARP, of incorporating by reference, rather than
completely refiling, one or more long documents already filed by a
party in the suspended CRT proceedings. We agree that, to avoid
wasteful and needless duplication, the CARP should have the
prerogative to permit incorporation by reference.
\5\As recommended in the comments of the Copyright Owners, we
will at a later date invite the parties to the 1990 cable
distribution to comment on when the proceeding should commence
before the CARP.
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Section 802(c) of the Copyright Code requires the CARPs to ``act on
the basis of * * * prior decisions of the Copyright Royalty Tribunal.''
We emphasize, however, that this requirement applies only to
proceedings that were concluded by the Tribunal. For example, CRT
rulings from the 1989 cable distribution have precedential effect
because the 1989 distribution is a concluded proceeding, but rulings
made during the 1990 cable distribution are without precedential
effect.
We should add that, although rulings and orders from proceedings
that were pending before the CRT at the time of its elimination do not
constitute binding precedent, the Copyright Office will review those
rulings and orders for information and guidance if the same issues
arise during the course of a refiled proceeding, and will call them to
the attention of the CARP.
There is an important distinction to be made here. What we have
said so far applies to cases where a proceeding was underway at the CRT
before December 17, 1993, except for claims to royalties filed with the
CRT before its elimination. Royalty claims are required to be filed
during specific time periods set by the Copyright Code, and any valid
claims filed with the CRT before the statutory deadlines, and still
pending on December 17, 1993, are unaffected by the new law. For
example, the Code requires claims for DART royalties to be filed in
January and February of each year with respect to royalties from the
preceding calendar year. 17 U.S.C. 1007(a)(1). Claims to 1992 royalties
had to be filed with the CRT by February 28, 1993. It is not now
necessary to refile those claims with the Copyright Office, even though
1992 DART royalties have yet to be distributed. The Copyright Office
has received from the CRT all claims to 1992 DART royalties that had
been filed with the Tribunal, and it is therefore unnecessary, and
without legal effect, to refile those claims with the Office.
Finally, in connection with DART filings, an issue raised by one of
the commentators brings up questions related to those we have been
discussing. The comment of the Performing Rights Societies contests the
validity of the rule proposed in Sec. 259.2 of the NPRM, which would
require a performing rights society ``* * * to obtain from its members
or affiliates separate specific and written authorization signed by
members, affiliates or their representatives to file claims to the
Musical Works Fund * * *''. Performing Rights Societies, comment at 1.
This rule was promulgated by the CRT on October 18, 1993, and, as
directed by the CRT Reform Act, the Office adopted it in its December
22, 1993, regulation. 58 FR 67690 (1993). Our NPRM did not propose to
amend the regulation beyond renaming it and assigning it a new section
number (Sec. 259.2). The Performing Rights Societies filed a petition
for reconsideration of the rule with the CRT on November 3, 1993,
before the Tribunal was terminated, and are now asking for Copyright
Office consideration of the question in the context of this rulemaking.
Gospel Music has filed an opposition. Gospel Music, comment at 1-3.
Although referred to as a ``comment,'' the letter from the
Performing Rights Societies is more in the nature of a petition to
address the issue anew. They say that they wish ``to petition to reopen
the Tribunal's former rulemaking proceeding,'' and to have the matter
addressed by the Copyright Office. The CRT had adopted a rule contrary
to the Performing Rights Societies' petition; if the Societies had not
petitioned the CRT for reconsideration, or if the CRT had acted one way
or the other on the reconsideration request before it expired, we would
consider the matter of the petition settled. As things stand, however,
the petition for reconsideration was a pending CRT matter, and the
Copyright Office will consider the Performing Rights Societies'
``comment'' as a separate petition for rulemaking, not as part of this
rulemaking proceeding. The ``comment'' of Gospel Music will be treated
as an opposition to that petition. At a later date we will publish
notice of a separate rulemaking in response to the Performing Rights
Societies' petition, and will invite interested parties to comment at
that time. Section 259.2, as adopted in 58 FR 67690 (1993) and renamed
and renumbered in this rulemaking, remains in effect until the
conclusion of the separate proceeding.
III. Interim Regulations
Today's interim regulations reflect a comprehensive review of the
entire body of the former Tribunal's rules and regulations, and a
thorough analysis of the new procedures needed to implement the
bifurcated system of ad hoc arbitration panels administered by the
Librarian of Congress. The comments included a number of suggestions
and proposed amendments, most of which were constructive and many of
which we have adopted. In general the commentators were supportive of
the Office's overall approach and most of the language in the NPRM.
It was the consensus of the parties at the February 1, 1994, public
meeting that a reply period for comments on the proposed rules would be
desirable. At the time of the public meeting we thought it would be
impossible to provide periods for reply comments addressed either to
the responses to the NPRM or to these interim regulations; this was
because the CARP infrastructure must be in place before proceedings can
begin, and one of the deadlines for starting DART distribution
proceedings was supposed to fall on March 30, 1994.<SUP>6 On further
consideration, however, the Office concluded that it would be virtually
impossible to carry out the necessary procedures for appointing
arbitrators before that date, and we issued a notice postponing the
deadline, see 59 FR 9773 (1994) (postponing time period for declaration
of controversy with respect to 1993 DART royalties to June 30, 1994).
Even so, there is still the need to implement the CARP rules
immediately, and to begin the screening and selection of potential
arbitrators.
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\6\Sec. 1007(b) of the Copyright Code states that, ``Within 30
days after the period established for the filing of claims [January-
February] * * *, the Librarian of Congress shall determine whether
there exists a controversy concerning the distribution of royalties
* * *'', and sec. 1007(c) states that, if a controversy exists,
``the Librarian shall * * * convene a copyright arbitration royalty
panel to determine the distribution of royalty payments.''
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In order to get revised regulations into effect immediately and, at
the same time, to offer an opportunity to see how they work in practice
and to elicit meaningful comments and suggestions, the Office is
adopting today's regulations on an interim basis.<SUP>7 All proceedings
before the Office and the CARPs will be governed by the December 22,
1993, interim rules as amended by these interim rules, unless and until
they are further amended or superseded. Comments are due on June 15,
1994, and reply comments on July 15, 1994, whereupon the Office plans
to make another comprehensive review and analysis before adopting final
regulations.
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\7\These interim regulations consist of the earlier ``interim
regulations'' adopted by the Copyright Office on December 22, 1993,
58 FR 67690 (1993), as amended by today's changes.
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The Librarian and the Office are committed to creating the fairest,
most efficient possible system for adjusting royalty rates and
distributing royalties. We believe that the rules and procedures
adopted today will work, but during the coming months we will continue
to monitor the CARP experience very closely and to identify any
problems that need solving and any improvements that can be made.
The following is a section-by-section summary of the amended
regulations, together with a discussion of the applicable comments on
the corresponding provisions of the NPRM.
(a) Part 251--Copyright Arbitration Royalty Panels Rules of Procedure
Part 251 contains most of the rules and procedures governing the
operation of the CARPs, and therefore received the greatest number of
observations and suggestions from the commentators.
(1) Status of certain DART proceedings. As a preliminary matter, it
is important to consider the scope of part 251 with respect to digital
audio proceedings under chapter 10 of the Copyright Code. It is the
Office's reading of the CRT Reform Act that neither of the following is
to be a CARP proceeding:
(i) the proceeding raising the maximum rate for digital audio tape
royalties which, under 17 U.S.C 1004(a)(3), is to be handled solely by
the Librarian;
(ii) the arbitration proceeding under 17 U.S.C. 1010 to determine
if a digital audio recording or interface device is subject to royalty
payments. We reach this conclusion based on the 1993 amendments to
section 801 of the Copyright Code. Former section 801(b)(4), which
assigned to the Tribunal the authority to distribute DART royalties,
and ``to carry out its other responsibilities under chapter 10,'' was
deleted; except for DART royalty distribution, which reappears in the
new section 801(b)(3), that former authority was not reassigned to the
Copyright Arbitration Royalty Panels. For these reasons the Office has
not proposed any regulations in this rulemaking as to the raising of
the DART maximum royalty payment or the status of a DART device. These
are matters that will be covered later in separate DART regulations.
We invite comments from the parties on the following:
Is our interpretation concerning the status of DART proceedings
under the CARP legislation correct?
If it is correct, to what extent does the Office have authority to
adopt regulations governing standards of conduct in DART proceedings?
(2) Organization of Part 251. Part 251, which tracks the original
format of the former Tribunal's regulations, is divided into seven
subparts, identified as subparts A through F.
Subpart A, entitled ``Organization,'' describes the composition and
selection process for the CARPs. Subparts B and C--``Public Access to
Copyright Arbitration Royalty Panel Meetings'' and ``Public Access to
and Inspection of Records''--remain virtually the same as the former
Tribunal's rules, with only a few minor technical amendments. Subpart
D, ``Standards of Conduct,'' consists of a completely new set of rules
prescribing the financial and ethical requirements for arbitrators, and
governs ex parte communications, billing, sanctions for misconduct, and
other matters involving ethical standards. Subpart E, ``Procedures of
Copyright Arbitration Royalty Panels,'' prescribes the procedures to be
followed by the CARPs in conducting proceedings, including those
governing submission of evidence, conduct of hearings, reports of the
CARPs, and orders of the Librarian. Subparts F and G--``Rate Adjustment
Proceedings'' and ``Royalty Fee Distribution Proceedings''--provide
certain additional requirements inherent in rate adjustment and
distribution proceedings, and contain only a few changes of the former
Tribunal's rules.
The following summarizes the additions and changes in the various
subparts of part 251.
(b) Subpart A--Organization
As the NPRM explained, subpart A was in need of complete revision
because of the differences between the statutory organization of the
CRT and that of the CARPs. In addition to the changes proposed in the
NPRM, these interim regulations incorporate additional revisions based
on the comments and our own further review.
(1) Official address. The Copyright Office has secured a special
Post Office box for receiving mail relating to the CARPs and any other
matters arising under subchapter B of chapter II of this title (37
CFR). As the NPRM said, establishment of a single official address is
important, since arbitration proceedings will not necessarily take
place at a single location, within the Library of Congress or
elsewhere. There may sometimes be an incentive for parties to deliver
filings directly to the actual location where a CARP is meeting, but,
for the reasons summarized in the NPRM, we believe it would be a
mistake to allow official filings to go to locations different from the
mailing address specified in these regulations.
Therefore, all filings required by this subchapter, if sent by
mail, should be marked for delivery to the official address contained
in Sec. 251.1. The same address should be used for all correspondence
or inquiries concerning the CARPs, distributions of royalties, rate
adjustments, and other matters arising under this subchapter B. Note
that, under Sec. 251.44, the CARPs are required to establish procedures
under which filings may be delivered directly to them, as long as a
copy is also delivered to the official address.
(2) Purpose of the CARPs. Section 251.2 describes the royalty
distribution and rate adjustment responsibilities of the CARPs with
respect to the various compulsory licenses and statutory obligations
established under the Copyright Code.<SUP>8 The Copyright Owners
requested deletion of the word ``television'' from the phrase ``cable
television'' in subsection (e), pointing out that fee distributions for
cable retransmissions under sections 111 of the statute cover radio as
well as television distant signal carriage. We have corrected
subsection (e) and have amended later references to ``cable
television'' to read simply ``cable.''
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\8\It is significant that, while adjustment of royalty rates for
the cable compulsory license is one of the duties of the CARPs
listed in Sec. 251.2, there is no similar provision for the
satellite carrier compulsory license. This is because the current
satellite rates were adjusted in 1992, before enactment of the CRT
Reform Act, and the satellite carrier license is due to expire on
December 31, 1994. Congress is currently moving legislation to
extend the duration of the license and provide for another
arbitrated adjustment of the royalty rates. The Office anticipates
that, when and if the pending satellite bill is enacted, it will
include a provision making the satellite arbitration a CARP
proceeding. In that event we will amend these rules to reflect the
legislative changes.
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(3) List of arbitrators--(i) The NPRM proposals. To facilitate the
process for selecting arbitrators, the NPRM proposed creation of a
yearly list of qualified arbitrators obtained from professional
arbitration associations or organizations. The association or
organization would supply the names of arbitrators meeting the
qualifications set out in Sec. 251.5, together with a brief summary of
each person's educational and employment history, qualifications, and
``any other information which the professional arbitration association
or organization may consider relevant.'' The Librarian would then
publish the list of qualified candidates in the Federal Register, and
this would constitute the master list from which all selections for
CARPs would be drawn for the calendar year.
(ii) Comments of copyright owners. The Copyright Owners recommended
several changes to Sec. 251.3 as proposed in the NPRM. Copyright
Owners, comment at 16-19.
First, they suggested that the Copyright Office solicit names of
qualified arbitrators from at least five professional arbitration
associations or organizations, including organizations that list former
judges. Although, according to their predictions, the cost of an
arbitration organization's list will be approximately $1,000, they
``think that it is appropriate for a reasonable amount of money to be
spent compiling these lists.'' Id. at 16. They also recommended
consultation with not-for-profit arbitration associations that make no
charge for their services.
Second, the Copyright Owners suggested that the master list be
confined to 50 names. This, they said, ``should provide a large enough
group from diverse sources to avoid repeating the solicitation process
in any one year.'' Id. at 17.
Third, to assist in the control of costs of the arbitration
process--a concern voiced by most of the commentators--the Copyright
Owners suggested that Sec. 251.3(a) be amended to expand the required
information provided to the Librarian by professional arbitration
organizations; they recommended that this information include a
description of the potential arbitrators' anticipated hourly, daily, or
annual fees, including per diem expense requirements. Id. at 18.
Fourth and finally, the Copyright Owners sought amendment of
Sec. 251.3(a)(2), which would require arbitration associations and
organizations to provide ``a brief summary of the member's employment
history.'' They took the position that a brief summary would not
provide adequate information upon which to formulate objections, and
asked for an amendment requiring information on the potential
arbitrators' ``areas of expertise, general nature of clients
represented and types of proceedings in which the member represented
clients.'' Id. at 19.
(iii) Changes in Sec. 251.3. On the whole we think the comments and
suggestions on lists of arbitrators make good sense, and we have
adopted most of them with modifications and additions of our own.
(A) Change in date for first lists provided by arbitration
associations. Subsection (a) is amended by deleting ``March 1, 1994''
and replacing it with ``on or before May 6, 1994'' as the date the
Office is to receive from arbitration associations the lists of
qualified arbitrators in accordance with Sec. 251.3. We are providing a
longer period in which to compile this year's lists since we could not
complete the process of selection by March 1, 1994, and since the
beginning of DART royalty distribution has been postponed from March 30
to June 30, 1994. See 59 FR 9773 (1994).
(B) References to ``member'' stricken. In the NPRM, Sec. 251.3
referred throughout to the persons to be included in the list as
``members'' of the associations and organizations submitting their
names. It now seems clear that this term would be questionable or
inaccurate in some cases. We have therefore substituted the phrase
``persons qualified to serve as arbitrators'' and the term ``person''
in the subsection.
(C) Public availability of information. The NPRM left open the
question of whether the information provided by the arbitration
associations or organizations under subsection (a) would be available
to the public. This interim regulation has been amended to make clear
that this information will be available to the public for inspection
and copying, but only with respect to those potential arbitrators whose
names are published in the Librarian's list.
(D) Employment or professional affiliation history. As suggested in
the comments, we have amended subsection (a)(2) to call for more
detailed information about the person's professional career and
expertise. The interim regulation also calls for information about
clients represented and types of proceedings in which the person has
been involved, but only if that information is available to the
association or organization submitting the name. We recognize that a
potential arbitrator's client base is not always the type of
information available to a professional arbitration association or
organization, and that potential arbitrators may be reluctant to
disclose that kind of information publicly. Arbitrators will be
required to disclose this and other information to the Librarian as
part of their confidential financial disclosure statements, see
Sec. 251.32.
(E) Disclosures of fees to be charged. We agree with the points
made in the comments: That the costs of the arbitration process should
be kept as low as possible, that arbitrators' fees will comprise a
major part of the costs, and that the rates a particular arbitrator
will charge are an important element in the selection process. We have
therefore added a new subsection (a)(5) calling for detailed
information about the arbitrator's rates for fees. This information
should include the basis on which the fee is to be computed (hourly,
daily, etc.), any variation on that basis (overtime, etc.), and the
amount of the basic rate. (As further discussed in the preamble to
Sec. 251.38, recovery of expenses will be available only to the
arbitrators coming from outside the Washington, DC area, and then will
be limited to the Government per diem rate.)
(F) Date of publication of arbitrator list. For the reasons
mentioned above in connection with subsection (a), subsection (b) now
calls upon the Librarian to publish the arbitrator list after May 6,
1994, rather than after March 1. In future years the lists will be
published after January 1.
(G) Number of names on arbitration list. The Copyright Office
agrees with the comments of the Copyright Owners that the number of
names on an arbitrator list should not be left completely open, but we
do not agree that the regulations should set an exact number. We
believe that the interests of diversity will be served by publishing a
list of at least 30 arbitrators, as opposed to an exact number; this
should provide the flexibility necessary to the publication of a
balanced list, which in some years might require more than 30. As a
practical matter, the Office will try to produce a list that generally
contains about 50 names. However, since we do not anticipate
circumstances that would require a list with more than 75 names, we are
adopting that number as the upper limit.
(H) Number of arbitration associations or organizations. The
Copyright Owners also asked that the regulations quantify the number of
associations or organizations from which the Librarian will obtain
lists of potential arbitrators, and recommended that the number be set
at five. We agree that the number should be quantified and that under
the statute it must be more than one, but we think five is too many.
Several of the arbitration associations listed by the Copyright Owners
in an appendix to their comment each represent several thousand
arbitrators. The Office believes that three associations or
organizations are likely to provide more than enough eligible
candidates in most cases. The rule as now written, we think, is
flexible enough to provide diversity, including the presence of former
judges, on the arbitrator list.
(4) Arbitrator list: Objections. Under Sec. 251.4, objections to
individuals on an arbitration list published in the Federal Register in
accordance with Sec. 251.3 may be lodged with the Librarian, but only
by parties to a particular proceeding and only during a designated 30-
day time period that will begin and end before the proceeding starts.
In the case of rate adjustment proceedings the objection period
coincides with the pre-proceeding period for consideration of possible
settlements provided by Sec. 251.63. For royalty distribution
proceedings the period for objections is the same as the period for
precontroversy motions and objections prescribed by Sec. 251.45. In
both cases the Librarian's notice in the Federal Register will set out
the inclusive dates of the objection period. A party to the proceeding
may lodge objections to one or more of the potential arbitrators on the
Librarian's list; the grounds for each objection must be stated plainly
and in detail.
(i) Comments on objection procedures--(A) RIAA/AARC. In their
comments RIAA/AARC urged that, instead of tying the objection procedure
to specific proceedings, the regulations provide for an objection
period to come before publication of the annual list of arbitrators.
RIAA/AARC, comment at 2-3. In their view, the proposed system of
confirming objections to a period before the proceedings begin would
expose the objecting party to--
* * * the risk of having arbitrators against whom they had just
filed objections selected for the proceeding. This would inevitably
have a chilling effect on the parties, thereby negating the purpose
of the proceeding.
According to RIAA/AARC, a procedure under which potential parties to
any proceedings could lodge objections to names proposed for the master
list before it is published in final form would have the advantage of
expanding overall participation by the parties in the process of
choosing arbitrators. Id. at 3.
(B) Music publishers. The Music Publishers had an alternative
objection process to propose. They took the view that the NPRM's
disclosure requirements for arbitrators were insufficient, and for this
reason they recommended that the Librarian publish a ``select list'' of
10 to 15 names before proceedings begin, with the requirement that
those potential arbitrators file a financial disclosure statement.
Under this plan, parties to the proceeding would be allowed to review
the statements and then file their objections, if any. Music
Publishers, comment at 5.
(ii) Changes in Sec. 251.4. The Office is adopting amendments to
Sec. 251.4 resulting from our decision not to provide any pre-
proceeding period for discovery (discussed below in connection with
Secs. 251.45 and 251.63). Under the changes, the time period for filing
objections to arbitrators has been reduced to 30 days. After
consideration, however, we are unable to agree with the recommendations
of either the RIAA/AARC or the Music Publishers. The RIAA/AARC proposal
would require publication of a preliminary list that would be open to
objections, followed by publication of a ``clean'' list of arbitrators
whose names provoked no objections or who were found by the Librarian
to be acceptable despite the objection. This would require substantial
added administrative burdens, costs, and delays, and the
``preliminary'' lists would have to be long enough to insure a final
list of at least 30 names.
We are not convinced that the procedure we are adopting will
produce any chilling effect on participation by the parties. As we
stated in the NPRM, 59 FR 2552 (1994), no peremptory challenges will be
allowed, and all objections must be fully substantiated. Serious, well-
grounded objections will certainly disqualify an arbitrator from
selection to a CARP. Where the objections are not sufficient to prevent
an arbitrator from being selected, the ethics rules of subpart D should
be adequate to prevent biased decisions resulting from an objection.
Again, publication of ``select'' lists as proposed by the Music
Publishers would be an additional and costly administrative burden, and
would essentially eliminate the need for a master list. The conduct
rules of subpart D of this interim regulation will require individuals
appearing on the arbitrator list to file financial disclosure
statements with the Librarian, and this requirement should satisfy the
Music Publishers' primary concern.
(5) Qualifications of Arbitrators. Under Sec. 251.5, as proposed in
the NPRM, an individual must possess three basic qualifications to
serve as a CARP arbitrator: Admission to the practice of law; 10 or
more years of legal practice; and experience in conducting arbitration
proceedings or facilitating the resolution and settlement of disputes.
This proposal drew considerable comment from the parties, and there was
substantial disagreement among them as to whether the arbitrators
should all be lawyers.
(i) Comments on requirement for legal qualifications--(A) Certain
copyright owners. A group identified as ``Certain Copyright
Owners''<SUP>9 favored adoption of the lawyer requirement because, they
said, lawyers and judges have experience in operating under procedural
and evidentiary rules and applying precedent. Certain Copyright Owners,
comment at 3. They argued that there is ``no need for panel members to
possess any substantive expertise beyond knowledge and experience in
the adjudication and resolution of disputes.'' Id. at 4. If non-lawyers
were allowed to serve as arbitrators there might be some encouragement
for the selection of experts such as economists; this, according to the
comment, could ``distort the process'' by permitting the expert to
``dominate the panel's consideration of any disputed questions within
his or her area of expertise,'' and could create the potential for
``unilateral decisionmaking.'' Id. at 4-5.
---------------------------------------------------------------------------
\9\This group was comprised of Sports Claimants, the NAB, PBS,
NPR, Devotional Claimants, and Canadian Claimants.
---------------------------------------------------------------------------
(B) Program suppliers. Program Suppliers believed that non-lawyers
should be allowed to serve as arbitrators, although they proposed that
each CARP include at least one lawyer. Program Suppliers, comment at 2.
They welcomed the expertise a non-lawyer might bring to the arbitration
process. In their view the participation of a non-lawyer could promote
collegiality in the decision-making process, and they noted that the
CRT Reform Act contains no provision forbidding consideration of non-
lawyers. Id. at 6-7.
(ii) Comments on selection of former judges. The comments of
Certain Copyright Owners, Program Suppliers, and Copyright Owners
generally are agreed that the Librarian should give strong
consideration to the selection of former judges as arbitrators. They
proposed that Sec. 251.5(c) be amended to read that a potential
arbitrator must have ``[e]xperience in conducting arbitration
proceedings, or facilitating or presiding over the resolution and
settlement of disputes.'' (emphasis added). Certain Copyright Owners,
comment at 5; Program Suppliers, comment at 8; Copyright Owners,
comment at 21. This amendment, they said, would make clear that
individuals with judicial experience are qualified to serve on CARPs.
(iii) Comments on continuity of membership. There was considerable
disagreement on the issue of continuity of membership from one CARP to
another.
(A) Copyright owners. Noting Chairman Hughes' floor statement on
the desirability of continuity, the Copyright Owners argued that having
the same arbitrators on multiple CARPs is ``essential'' to the
efficient operation of the royalty rate adjustment and distribution
process. Copyright Owners, comment at 20. In their view, continuity
would ``ensure consistency in the decisionmaking process,'' thereby
fostering the likelihood of settlement among the parties to a
proceeding. Id. To encourage continuity, the Copyright Owners proposed
that Sec. 251.5 be amended by adding a new subsection (d) to include an
additional factor in the selection process, giving preference to any
arbitrator who had previously served on a panel:
(d) In addition, arbitrators who have previously served on a
CARP should be given a preference for selection to a subsequent
CARP; provided, however, that no arbitrator shall be selected as a
member of a CARP following the sixth anniversary of the date of his
or her first selection as a member of a CARP.
Id. at 20-21.
(B) Certain copyright users. Commentators representing two groups
of copyright users opposed the principle of continuity on the CARPs.
NCTA argued that creating a preference based on service on an earlier
CARP ``could favor those, such as copyright owners, who regularly
participate before the panels.'' NCTA, comment at 2. United Video
echoed NCTA's concern, stating its belief that the creation of ad hoc
arbitration panels was intended as Congress' remedy to the insular
nature of the CRT:
As a practical matter, the licensees have no desire to see the
CRT recreated in the guise of ``stable'' CARPs. Such ``stability''
would mean that copyright owners can yet again develop a body of
mystical, impenetrable, unreasoned standards into which compulsory
licensees are plunged every five years. . .''.
United Video, comment at 2. Both NCTA and United Video argued that, at
the very least, the Copyright Office should ensure that arbitrators who
have served on CARPs in distribution proceedings are not also chosen to
serve on CARPs in ratemaking proceedings. NCTA comment at 2; United
Video, comment at 2.
(iv) Amendment of Sec. 251.5. The Copyright Office has considered
the varying viewpoints of the parties on qualifications of arbitrators,
but we have decided to adopt Sec. 251.5 as proposed with only one
technical amendment to subsection (a). That subsection is intended to
require arbitrators to be admitted to the practice of law. Since
membership in a bar association is not synonomous with admission to the
practice of law, we are broadening the requirement accordingly.
(A) Legal qualifications. On the issue of whether arbitrators
should be lawyers, we continue to believe that the adjudicatory nature
of CARPs requires arbitrators to have experience in operating under
procedural and evidentiary rules, applying precedent, and evaluating
the legal significance of conflicting evidence. The importance of legal
training is underscored by the relatively short period (180 days)
allowed for conducting proceedings which are often long and
complicated. Arbitrators will be called upon to decide substantive and
procedural matters arising both during the hearings and in motions and
pleadings, and there would be little or no time to train non-lawyers in
how to handle them.
(B) Former judges. The Copyright Office believes that Sec. 251.5 as
drafted is certainly broad enough to allow appointment of former
judges. Subsection (c), which is taken directly from section 802(b) of
the Copyright Code, requires an arbitrator to have experience either in
conducting arbitration proceedings or in facilitating the resolution
and settlement of disputes. Unlike the Copyright Owners, we believe
that experience in ``facilitating the resolution and settlement of
disputes'' includes judges as well as mediators, and that the proposed
``presiding over'' language is unnecessary. The Office is therefore
adopting subsection (c) as proposed.
(C) The question of continuity. Neither the Copyright Office nor
the Library has had experience in selecting arbitrators under
circumstances such as these, and for the present we think it is
important to maintain flexibility in the selection process. The CRT
Reform Act grants the Librarian considerable discretion in selecting
arbitrators, and he intends to exercise that discretion to guard
against any possibility of bias or undue influence. We therefore
believe it would be a mistake to be bound to any system of preferences
or exclusions in the selection process at this time. The Congress
expressly chose not to make continuity among panel members a
requirement. See 139 Cong. Rec. H10973 (daily ed. November 22, 1993)
(floor statement of Rep. Hughes) (``The Librarian certainly has
discretion to chose [sic] individuals willing to serve for 6 years. The
Senate decided not to make this a requirement, however, and I agree
with that decision.''). At the same time, we understand that under
certain circumstances, especially in the case of distribution
proceedings, continuity could have important advantages.
Without expressing it as a binding policy or writing it into the
regulations as a requirement, we agree with Chairman Hughes that, in
choosing arbitrators for future proceedings, the Librarian should look
to the quality of service and soundness of decision-making an
individual has displayed as a member of an earlier CARP. We also agree
that, in the selection process for a rate-adjustment CARP, the
familiarity a former arbitrator in a distribution proceeding has
demonstrated with respect to particular parties and their arguments
should be taken into account in weighing the possibility of bias.
Experience with the CARPs will help to determine, later on, whether
some system of preferences or exclusions should be written into these
regulations.
(6) Composition and selection of CARPs: Quorum requirements.
Section 251.6 of the NPRM described the procedure for selecting the
members and chairperson of a CARP, and dealt with quorum requirements
under various circumstances. Subsection (e) of the NPRM provided:
If for any reason one or more of the arbitrators selected by the
Librarian is unable to serve during the course of the proceedings,
the Librarian shall promptly appoint a replacement: Provided, that
once hearings have commenced, no such appointment shall be made and
the remaining arbitrators shall constitute a quorum necessary to the
determination of the proceeding.
This provision would leave the possibility of a single arbitrator
deciding an entire proceeding.
(i) Comments of copyright owners. To avoid the dangers inherent in
a rule that would allow a quorum of one, the Copyright Owners proposed
that subsection (e) be revised to read:
(e) If for any reason two of the arbitrators selected by the
Librarian are unable to serve during the course of the proceedings,
the Librarian will suspend the proceedings until at least one new
arbitrator is selected. Two arbitrators shall constitute a quorum
necessary to the determination of any proceeding.
Copyright Owners, comment at 22.
(ii) Amendment of Sec. 251.6.--(A) Quorum requirement. The
Copyright Office shares the Copyright Owners' concern, and is therefore
adopting the requirement that two arbitrators constitute a quorum
necessary to the determination of a proceeding. Should a CARP panel be
reduced to one serving arbitrator for any reason, it would be necessary
either to replace one or both of the other arbitrators or terminate the
proceeding. However, there are inherent problems in adopting a process
of replacing arbitrators, especially after hearings have begun.
(B) Problems presented by replacement of arbitrators. Our concerns
go to the heart of the fairness of the proceedings and compliance with
the requirements of the Administrative Procedure Act. If a new
arbitrator is selected midway through hearings in a proceeding, he or
she will lose the benefit of earlier live testimony, and rights of
parties to the proceeding under the APA could be compromised. We also
recognize that proceedings cost a great deal of money, and that the
parties may be reluctant or financially unable to repeat the hearing
process in its entirety for the benefit of a new arbitrator. One
partial solution to the fairness problem might be to require all CARP
hearings to be recorded on videotape. As an alternative to terminating
the proceedings completely and starting the whole process anew,
videotaping might provide substantial monetary savings in the long run.
(C) Compromise solution. In an effort to ensure that a quorum of
two will exist, and to provide rational, fair, and economical
procedures for replacing arbitrators, including chairpersons, in
various situations, the Copyright Office is adopting a compromise
provision. Where one or two of the arbitrators has left a CARP panel,
the Librarian of Congress may be called upon to suspend the proceedings
(thus tolling the running of the statutory periods).\10\ If the hearing
has not yet begun, the Librarian is obliged to bring a CARP back up to
its full complement of three members; but, if the hearing is underway,
no replacement will be made unless necessary to provide the required
quorum of two members.
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\10\The Copyright Office has added a new Sec. 251.8 to Subpart A
dealing with suspension of proceedings and tolling of the running of
statutory periods, including the 180-day hearing period. This new
section is discussed below.
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(a) Hearings Not Yet Begun. If hearings in the proceeding have not
yet begun and the CARP has fallen below its statutory three-person
complement (two arbitrators selected by the Librarian and a third
chosen--as member and chairperson--by the other two), the Librarian
will suspend the proceeding and inaugurate a procedure to bring the
CARP back up to three members. Where one or two vacancies are to be
filled, and either or both of the vacant seats were previously occupied
by arbitrators chosen by the Librarian, the Librarian will select the
necessary replacement or replacements. If there is one vacancy, and it
was previously occupied by the chairperson, the two remaining
arbitrators will select the replacement. If there are two vacancies,
and one was previously occupied by the chairperson, the Librarian will
select one replacement, and that person will join with the remaining
arbitrator to choose the replacement.
(b) Hearings begun. If hearings have begun, the Librarian will not
suspend the proceedings and select replacements unless it is necessary
to do so to achieve a quorum. In other words, if the hearing is
underway with the full complement of arbitrators and one drops out,
nothing need be done. However, if two of the three arbitrators drop out
at once, or if the hearing is going forward with two arbitrators and
one drops out, the Librarian will need to suspend the proceedings and
select one new arbitrator (not two) to provide the necessary quorum.
Where the hearing has started and the CARP loses its chairperson, a
problem arises since the Librarian has no authority under the statute
to fill the chair of a CARP. The solution in this situation is to ask
the two remaining arbitrators, or the one remaining arbitrator and the
newly-selected arbitrator, to decide between themselves which of the
two of them will serve as chairperson.
A more serious problem arises from the fact that a new arbitrator
in an ongoing hearing will not have had the benefit of hearing and
seeing the earlier testimony and arguments. In an effort to accommodate
the rights of the parties under the APA and, at the same time to save
time and money, the interim regulation requires that the Librarian's
selection of a replacement arbitrator in an ongoing hearing receive the
unanimous written agreement of all parties to the proceeding. If the
parties agree, the hearings will continue from the point of suspension;
if not, the Librarian will terminate the proceeding and start the whole
process anew.
(7) Suspension of proceedings. Several provisions of these interim
regulations, including those on the replacement of arbitrators under
Sec. 251.6 and the removal and replacement of an arbitrator for
misconduct under Subpart D, require the Librarian to suspend any
ongoing proceedings long enough to make the necessary replacement or
replacements. Upon considering the problem the Copyright Office has
concluded that these regulations should also contain a section
governing the conditions and procedures for suspensions, making clear
in particular that suspension tolls the running of the 180-day hearing
period or any other time period in effect. We have added this provision
as Sec. 251.8, at the end of subpart A.
Under subsection (a) of the new Sec. 251.8, whenever an arbitrator
must be replaced for any reason, the Librarian is obliged to order a
suspension of the proceeding by notice to all parties in writing, to
make the replacement expeditiously, and to give written notice to the
parties of the resumption of the proceeding ``from the time and point
at which it was suspended.'' Subsection (b) is intended to deal with
cases in which the Librarian is convinced that, because of temporary
situations such as serious illness or personal tragedy affecting an
arbitrator, it would be extremely difficult or impossible to continue
the proceeding for the time being. In these situations, not involving
replacement of an arbitrator, the proceeding may be suspended only with
the written consent of all parties, and for a stated period of one
month or less.
Section 251.8(c), which applies to all suspensions, provides that
the suspension ``shall result in a complete cessation of all aspects of
the proceeding, including the running of any statutory period provided
for completion of the proceeding.'' We believe it is necessary and
important during the time of suspension to toll the periods provided
for proceedings in the statute, particularly the 180-day period
prescribed by 17 U.S.C. 802(e). The tolling provision is intended to
allow sufficient time for selection of replacements without cutting
into and reducing the full period the arbitrators will need for hearing
the case and rendering a decision.
(c) Subpart B--Public Access to Copyright Arbitration Royalty Panel
Meetings
Subpart C--Public Access to and Inspection of Records
The Copyright Office is adopting all of subparts B and C, as
proposed in the NPRM, with changes regarding recordings and photographs
at open meetings. The Copyright Owners requested a minor change in
Sec. 251.12, which governs the conduct of open meetings held by a CARP,
to say that the right of a witness to withhold authorization of a
recording of his or her testimony does not apply to the official
transcript. We agree, but on further consideration we think Sec. 251.12
could have been too strict in operation. We see no reason why the CARP
proceedings should not be conducted with the greatest possible
openness.
Section 251.12 now reads that the public and the news media will be
able to take photographs and to make audio or video records of the
proceedings, so long as the CARP is informed in advance and nothing is
done to disrupt the proceedings. The permission of the participants in
the proceedings would not be required.
(d) Subpart D--Standards of Conduct
The CRT Reform Act amended section 802(b) of the Copyright Code to
provide that the ``Librarian of Congress, upon recommendation of the
Register of Copyrights, shall adopt regulations regarding standards of
conduct which shall govern arbitrators and the proceedings under this
chapter.'' The need to provide standards of conduct for arbitrators in
these regulations is particularly important because the CARP
arbitrators are not employees of the Federal Government. They are
private individuals to whom controversies are being referred under this
particular form of alternative dispute resolution. Since the
established standards of conduct for government employees are not
applicable to the CARP arbitrators, these regulations must adopt those
and other standards in the specific provisions of part 251.
Instead of proposing specific regulations in our NPRM, we asked for
recommendations as to what standards of conduct should apply to the
CARP arbitrators.
(1) Comments and recommendations. Three of the written comments
addressed standards of conduct.
(i) RIAA/AARC. The RIAA/AARC strongly supported a code of conduct.
On the ground that the characteristics of CARP arbitrators are closest
to those of administrative law judges, they recommended that the Office
base its regulations on the ``Model Code of Judicial Conduct for
Federal Administrative Law Judges,'' and attached to their comment
pertinent provisions of the Code. RIAA, comments at 3-4, and Appendix.
(ii) Music publishers. The Music Publishers also suggested that the
Office adopt rules based on the ``Model Code of Judicial Conduct,'' and
emphasized that the rule should prohibit all ex parte communications
with the CARPs. Music Publishers, comments at 10.
(iii) Copyright owners. The Copyright Owners advocated strict
standards, noting that royalty distributions can involve hundreds of
millions of dollars. They specifically recommended that the Librarian
investigate persons under consideration as arbitrators for conflicts of
interest, and that, if any conflicts are found to exist before or
during the proceeding, the particular individual be disqualified. With
respect to employment of a potential or actual arbitrator by any
interested party, they recommended a pre-employment ban of five years
and a post-employment ban of three years. In their view, however,
current conflicts of interest or recent past employment with an
interested party need not be disqualifying if the parties to the
proceeding unanimously waive the disqualification. The Copyright Owners
also recommended that strict regulations be adopted to prohibit ex
parte communications, or any other appearances of impropriety, and to
rule out unreasonable billing by the arbitrators. Copyright Owners,
comments at 25-29.
(2) Meeting with endispute representatives. As the result of
questions raised during an informal meeting of Copyright Office
officials with two representatives from Endispute, an arbitration
association, we have made some modifications to our sections on billing
(Secs. 251.3, 251.38, 251.54) and our definition of employment
(Sec. 251.36). Those modifications are explained below in our
discussion of each applicable section. A summary of our meeting with
Endispute has been placed in the comment file of this docket and is
available for public inspection.
(3) Basic conclusions. In formulating our interim rules for
standards of conduct, the Copyright Office has considered the
recommendations of the parties, and has incorporated some of them, as
explained below. On the fundamental question of the model to follow,
however, we have decided to base the rules on those promulgated by the
Office of Government Ethics (OGE), rather than the codes of judicial
conduct or codes governing administrative law judges. OGE's rules are
more detailed and rely less on self-reporting or recusal. We believe it
is important that the standards be clearly expressed so that the public
is assured of fairness and the arbitrators know precisely what is
expected of them. It is also important that, rather than merely
expressing good intentions, the rules be enforceable and enforced.
(4) Interim regulations on standards of conduct. Part D of these
interim regulations (Secs. 251.30-39) reflects the Copyright Office's
conclusions as to the general and specific standards to govern the
conduct of CARP arbitrators. The following is a summary of these
interim rules, and we solicit detailed comments on any or all of them.
(i) Basic obligations of arbitrators. Section 251.30 provides the
basic obligations of the arbitrators in general terms. It is derived
from Title 5, Sec. 2635.101 of the rules of the Office of Government
Ethics, as modified to meet circumstances applicable to the CARP
arbitrators.
The general obligations set out in Sec. 251.30 apply both to the
arbitrators selected to preside in a particular proceeding and to the
arbitrators who are listed as available but who have not yet been
selected. They specify that arbitrators: Shall not use their position
for private gain; shall not hold any conflicts of interest; shall not
solicit or accept gifts from interested parties; shall not reveal
nonpublic information; shall not give preferential treatment to any
party, shall not engage in outside activities that conflict with their
duties; shall not seek employment with any interested party; and shall
endeavor to avoid all appearances of impropriety.
In establishing these general obligations, the Copyright Office has
also incorporated provisions from the Model Code for Administrative Law
Judges recommended by the RIAA/AARC. These provisions address the
behavior of arbitrators at hearing: To maintain order and decorum, to
be patient, dignified, and courteous to the parties and witnesses, and
to dispose of business promptly. RIAA, comment at Appendix.
These general obligations are to be considered just as binding as
the specific obligations that follow in Secs. 251.31-38. They are meant
to cover situations not anticipated by the specific sections, but which
nonetheless would constitute a violation of ethical standards.
Complaints based on these general provisions are as valid, and must be
taken as seriously, as those based on specific obligations. While most
of the general obligations have more specific counterparts in the
obligations spelled out in Secs. 251.31-38, some do not. One example is
Sec. 251.30(f), which prohibits bias on the part of an arbitrator. A
specific rule on bias would probably be futile because it could not
envision all possible situations; but, if supported, a charge of bias
could be grounds for disqualification.
(ii) Financial interests. Section 251.31 specifies what constitutes
a financial conflict of interest that would result in an automatic
disqualification to serve. This section does not cover all areas of
potential bias; it applies only to those that involve a current
financial conflict and would result in automatic disqualification.
Other areas of potential bias would be covered by the objection
procedure in Sec. 251.4, as discussed above in connection with that
section and below in connection with these Standards of Conduct
regulations.
(A) Distribution proceedings. Section 251.31 states that, in a
distribution proceeding, the arbitrator may not have a financial
interest in any claimant to that proceeding, or in any copyright owner
that ultimately receives royalties from a claimant to the proceeding,
whether or not the claimant is party to a voluntary settlement. The
reason for disqualifying anyone with a financial interest in a party
that has already settled its dispute is that, since distributions are
annual proceedings, the arbitrator might otherwise be tempted to insert
precedent that could help that party in the following year's
controversy.
As noted, the prohibition against financial conflicts applies more
widely than merely to interests in claimants to the proceeding. It also
covers interests in copyright owners who receive royalties from a
claimant to the proceeding, such as a television producer who does not
file a claim herself but receives royalties from a syndicator who does.
(B) Rate adjustment proceedings. In a rate adjustment proceeding
the arbitrator may not have a financial interest in any copyright owner
or user entity that would be affected by the outcome of the proceeding.
(C) Definition of financial interest. For purposes of both
distribution and rate adjustment proceedings, Sec. 251.31(b) defines
``direct or indirect financial interest'' to include employment and
other affiliations, ownerships of securities, and deriving any income,
however small, from an interested party. Section 251.31(c) makes two
specific exceptions to the definition of ``financial interest'': (1)
Where the individual's money is invested in a mutual fund or blind
trust and he or she cannot control the investment decisions; and (2)
where the individual is receiving fixed post-employment benefits that
would not be affected by the outcome of the proceeding, such as
benefits from health insurance or a pension.
(D) Curing a conflict of interest. Section 251.32(b) provides two
ways to cure a conflict of interest: (1) The potential arbitrator may
divest himself or herself of the interest that caused the
disqualification; or (2) the parties may be asked to consider the
nature and degree of the conflict and, if all parties agree that the
conflict is not sufficient to result in disqualification, the
individual may serve.
(E) Objection procedure. Even if the arbitrator does not have a
financial conflict of interest, parties who nonetheless believe a
potential for bias exists for any other reason may petition the
Librarian under the objection procedure described in Sec. 251.4.
Parties will have available to them the employment history,
affiliations, and the general nature of the clients represented by the
potential arbitrators upon which to base their objections. The
Librarian will rule on objections on a case-by-case basis.
(F) Interests of relatives and associates. Section 251.31(d)
specifies that the financial interests of the arbitrator's spouse,
minor child, and business associates are to be imputed to the
arbitrator. This paragraph is derived directly from Sec. 2635.402(b)(2)
of the OGE's regulations.
(iii) Financial disclosure statement. Section 251.32 requires all
listed arbitrators to file confidential financial disclosure statements
with the Librarian, within one month following publication in the
Federal Register of the annual list of arbitrators containing their
names. To maintain the confidentiality of the statements, only the
Librarian and designated Library staff will be permitted to review
them. The Librarian will not select any arbitrator who has a conflict
of interest as defined in Sec. 251.31. When the two selected
arbitrators pick their chairperson, they will have to consult first
with the Librarian to see that the person they nominate has no conflict
of interest. If the Librarian finds that a conflict does exist, the two
selected arbitrators will be asked to choose another arbitrator who has
no conflict of interest.
After the panel is selected, the arbitrators will have one week to
file updated financial disclosure forms with the Librarian: This
requirement is intended to ensure that no conflicts had developed
between the time the arbitrators were listed and the time they were
selected. If any conflicts arise during the later course of the
proceeding, or if any change in an arbitrator's financial interests
presenting a disqualifying conflict of interest is found during the
hearing to have gone unreported, the Librarian will suspend the
proceeding in accordance with Sec. 251.8 of these interim regulations
and replace the arbitrator with another arbitrator from the arbitrator
list.
(iv) Ex Parte communications. Section 251.33 sets out the varying
circumstances under which a ban is imposed on ex parte communications
with: (1) The Librarian of Congress or the Register of Copyrights; (2)
staff of the Library or the Copyright Office; (3) persons selected as
arbitrators in a proceeding; and (4) persons named in the current list
of qualified arbitrators. The section also describes what anyone
receiving a prohibited communication must do, and the possible
consequences of a violation of the rule.
(A) Prohibited communications--(aa) Communications with librarian
or register. (1) Who is banned from communicating: Anyone outside the
Library of Congress or Copyright Office;
(2) What communications are banned: The merits or status of any
matter, procedural or substantive, relating to royalty distribution or
rate adjustment;
(3) When communications are banned: Any time.
(4) Exceptions: Statements on public policies involved in CARP
operations where the discussion is unrelated to specific proceedings;
for example, a discussion on the advisability of amending the copyright
statute.
(bb) Communications with Library of Congress or Copyright Office
staff. (1) Who is banned from communicating: anyone outside the Library
or the Office;
(2) What communications are banned: The substantive merits of any
past, pending, or future royalty distribution or rate adjustment
proceeding;
(3) When communications are banned: Any time.
(4) Exceptions: procedural inquiries. If the employee does not know
the answer, he or she will relay the question to the CARP and pass the
answer back to the inquirer.
(cc) Arbitrators selected by the librarian. (1) Who is banned from
communicating: Interested parties or anyone acting at their instance;
(2) What communications are banned: Total ban on all communications
for any reason.
(3) When communications are banned: A period beginning with the
arbitrator's selection and ending with the filing of the CARP's report,
and, if the matter is remanded, the period starting with the
reconvening of the CARP, and ending with the filing of the final
report.
(4) Exceptions: None
(dd) Arbitrators listed as qualified in current list. (1) Who is
banned from communicating: Interested parties or anyone acting at their
instance;
(2) What communications are banned: The merits of any past,
pending, or future royalty distribution or rate adjustment proceeding;
(3) When communications are banned: The period when the
individual's name appears on the Librarian's current list of qualified
arbitrators;
(4) Exceptions: None.
(B) Action required by recipients of banned communication. Anyone
who receives a prohibited communication is required immediately to end
the communication and place on the public record of the proceeding the
actual communication, if written or recorded, or a description of the
communication, if oral, together with a memorandum describing any
further responses. The communication may not be considered by the CARP
unless and until it is properly submitted into evidence by one of the
parties.
(iii) Action taken by librarian or CARP. Either the Librarian or
the CARP may require the party responsible for the prohibited
communication to show cause why that party's interest in the proceeding
should not be dismissed or otherwise adversely affected. This provision
is derived from section 557 of the Administrative Procedure Act.
(v) Gifts and other things of monetary value. Section 351.34 deals
with the ethical question of when, if ever, an arbitrator may accept
gifts or other things of monetary value ``from a person or organization
having an interest that would be affected by the outcome of the
proceeding,'' whether or not there was any intent to influence the
outcome. The ban would be total for arbitrators actually selected for a
CARP, and somewhat less stringent for individuals named as qualified on
the Librarian's current list. The prohibition covers both direct and
indirect solicitation and acceptance of gifts or things of value; it
extends to gifts or other monetary benefits to the individual's family,
or to a charity, if provided with the knowledge of or at the instance
of the selected or listed arbitrator.
(A) Selected arbitrators. For arbitrators who have been selected to
serve on a CARP, Sec. 251.34 establishes a total ban on the
solicitation or acceptance of any gifts or other monetary benefits, no
matter how small in value. The prohibition would be in effect from the
time of the arbitrator's selection through the submission of the CARP
report, and during any court-ordered remand.
(B) Listed arbitrators. The ban also applies to arbitrators named
on the Librarian's current list, but with two exceptions: (1)
Acceptance of gifts or other things, including meals, where their value
is less than $20 per occasion and less than $50 in a calendar year; and
(2) acceptance of gifts or other things when the circumstances make it
clear that the action was motivated purely by family and personal
relationships. These two exceptions are derived from the OGE's
regulations, and are intended to make plain that nominal, unsolicited
benefits cannot be used to disqualify a potential arbitrator. They are
not intended to encourage gift-giving under any circumstances,
especially where, as here, arms-length relationships should be the rule
rather than the exception.
(vi) Outside employment and other activities. Section 251.35
specifies that, once an arbitrator has been selected for a CARP and
until all possibility of a court-ordered remand is ended, the
arbitrator is required to refrain from any outside activity that would
raise a question about the individual's ability to render an impartial
decision. This ban extends beyond matters that could be considered a
financial conflict of interest, and beyond receipt of gifts or other
things of value. The following are examples of prohibited activities:
giving free legal advice; attending a gathering sponsored by an
interested party; giving a speech related to the proceedings; or
accepting direct or indirect payment of honoraria. The ban on honoraria
covers appearances, speeches, and articles that are related to the
proceeding or, if the offer is from an interested party, that are
related to any matter.
(vii) Pre-arbitration and post-arbitration employment restrictions.
Section 251.36 provides that no arbitrator will be selected for a CARP
if he or she had been employed within the previous five years by a
party financially interested in the proceeding, although this rule may
be waived under certain circumstances with the unanimous consent of the
parties. The section also prohibits arbitrators from arranging future
employment with any party to the proceeding, and from entering into
employment with any party for three years after the date of the CARP
report. ``Employment'' for these purposes is given its most expansive
meaning to include any business relationship that involves the
providing of personal services, but not including service as an
arbitrator, mediator, or neutral. The five-year rule for pre-
arbitration employment, and the three-year rule for post-arbitration
employment, is based on the comments of the Copyright Owners. Copyright
Owners, comment at 26-27. The definition of ``employment'' comes from
Sec. 2635.603(a) of the OGE's regulations. The exception for employment
as an arbitrator, mediator, or neutral was adopted following our
discussion with Endispute.
(viii) Use of nonpublic information. As noted earlier, it is our
intention that CARP proceedings be conducted as openly as possible. In
proceedings such as these, however, there will necessarily be
information that must be kept confidential, and Sec. 251.37 deals with
these situations. Arbitrators are not to reveal any information from
filings, pleadings, or evidence that the CARP has ruled to be
confidential. Nor, unless required by law, are arbitrators to disclose
any of the following: Intra-panel communications, or communications
between the Library and the panel, intended to be confidential; draft
rulings or decisions; and the final CARP report before it is submitted
to the Librarian. Section 251.37(c) also prohibits an arbitrator from
using nonpublic information for personal profit or for the profit of
anyone else. This provision was derived from Sec. 2635.703 of the OGE's
regulations.
(ix) Billing and commitment to standards. In response to requests
from the parties that these regulations seek to ensure that
arbitrators' charges are reasonable, we have adopted the following
provisions on billing:
(A) Bound by initial proposal. Arbitrators will be bound by the
hourly or daily charge they proposed when their names were first
submitted for listing by the Librarian. See Sec. 251.3. They will not
be allowed to charge in excess of those rates. We think this
requirement will induce arbitrators to quote reasonable rates, since
they know that their selection by the Librarian will be based in part
on this factor.
In our discussions with Endispute a suggestion was made to allow
arbitrators to charge a reasonable cancellation fee if a proceeding is
settled early, to compensate them for having cleared their schedules.
We have not adopted the proposal in these interim regulations, but we
solicit comments on whether a cancellation fee is justifiable and, if
so, how it might be worked into the overall CARP scheme for paying
arbitrators.
(B) Incidental expenses. Arbitrators residing within the
Washington, DC metropolitan area<SUP>11 will not be allowed to bill for
incidental expenses such as local travel, meals, telephone calls,
postage, and the like. All their incidental expenses will have to be
absorbed entirely in the hourly or daily rate the arbitrator proposes.
Arbitrators can, and doubtless will, take their incidental expenses
into account when proposing their rate. In addition, as required by
section 801(d) of the Copyright Code, the Library and the Copyright
Office will provide the CARPs with necessary administrative services,
and this will sharply reduce some of the arbitrators' incidental
expenses. Arbitrators who reside outside the Washington, DC
metropolitan area will be allowed to add their expenses for travel,
lodging, and meals to their bills so long as these expenses do not
exceed the applicable government rate.<SUP>12
---------------------------------------------------------------------------
\1\1The Washington, DC metropolitan area is comprised of the
District of Columbia, the independent cities of Alexandria, Fairfax,
and Falls Church, the Virginia counties of Arlington, Fairfax, and
Loudoun, and the Maryland counties of Montgomery and Prince Georges.
\1\2As of January 1, 1994, the government rate for the
Washington, DC metropolitan area is lodging not to exceed $113 a
day, and $36 for meals ($8 breakfast, $8 lunch, $20 dinner).
---------------------------------------------------------------------------
(C) Detailed accounting. Arbitrators are required to submit a
detailed account of the work they performed during their billed time.
This should give the parties a means of reviewing the reasonableness of
the charges.
(D) No billing for support services. Except for support services
provided by the Library of Congress and the Copyright Office, the
arbitrators will be required and expected to perform their own work,
including research, analysis of the record, and decision-writing.
Although it might be argued that delegating some more routine work to
others could lower the bill, this practice would undermine the full use
of the arbitrators' experience and expertise, which were the reasons
for their selection.
(E) Signed agreement. Finally, the Library will require all
arbitrators to sign an agreement at the time of their selection,
stating that they will abide by all of the standards of conduct and
billing restrictions specified in this subpart. Failure to sign the
agreement will preclude selection of the individual for a CARP.
(x) Sanctions and remedies. Section 251.39 specifies some of the
sanctions and remedies for the violation of the standards of conduct
provided by this subpart. The listings, which are not exhaustive, are
divided into subsections laying out the sanctions and remedies
applicable to: (1) Selected arbitrators; (2) listed arbitrators; and
(3) interested parties who engaged in ethical violations. A final
subsection, applicable to any and all violations of the standards of
conduct under these regulations, authorizes the Librarian of Congress
to refer the matter to the Department of Justice or other law
enforcement authority for criminal prosecution. The following is a
summary of Sec. 251.39:
(A) Selected arbitrators. Sanctions and remedies applicable only
against arbitrators selected to serve on a CARP: Removal from the
proceeding;
(B) Selected and listed arbitrators. Sanctions and remedies
applicable against both arbitrators selected to serve on a CARP and
persons listed as qualified in the Librarian's current list:
(aa) Permanent removal of the person's name from the current and
any future list of available arbitrators published by the Librarian;
(bb) Referral of the matter to the organized bar of which the
person is a member for possible disciplinary action; and
(cc) Referral of the matter to competent law enforcement authority
for possible criminal prosecution.
(C) Interested parties or individuals. Sanctions and remedies
applicable against interested parties or individuals who violate the
ethical standards established by this regulation:
(aa) Referral of the matter to the organized bar or professional
association of which the offending individual is a member for possible
disciplinary action;
(bb) Barring the offending individual from current appearances
before the CARP, from future appearances, or both;
(cc) Designation of an issue in the current or in a future
proceeding, requiring the party to show cause why its interest should
not be dismissed, denied, or otherwise adversely affected; and
(dd) Referral of the matter to competent law enforcement authority
for possible criminal prosecution.
On the question of referral of cases for criminal prosecution we
note that, although arbitrators are not Federal Government employees,
we are firmly of the opinion that U.S. criminal provisions do apply to
attempts to influence them. Title 18 U.S.C. 201, which prohibits the
influencing of public officials, defines public officials as
* * * an officer or employee or person acting for or on behalf of
the United States, or any department, agency or branch of Government
thereof, including the District of Columbia, in any official
function, under or by authority of any such department, agency, or
branch of Government, or a juror. [emphasis supplied]
We believe that arbitrators are persons acting for or on behalf of the
Library of Congress by the authority of the Librarian. Therefore,
although we certainly hope the situation never arises, we will not
hesitate to refer for criminal prosecution attempts to influence the
arbitrators.
Questions may well be asked as to how the Library of Congress would
go about removing a selected arbitrator from a proceeding under this
subpart, and the legal basis for such an action. We believe that the
appropriate procedure for the Librarian would involve suspension of the
proceeding under Sec. 251.8, issuance of an order declaring the
arbitrator's seat vacant and the reasons for that action, and
appointment of a replacement under Sec. 251.6. The legal basis for the
action would be the arbitrator's violation of these regulations, and
the breach of his or her contract with the Librarian of Congress under
which the individual was committed to observe these regulations. We
invite comments on these conclusions, and on other possible sanctions
and remedies for violations of these rules.
(xi) Appendix to this preamble: Examples of typical fact
situations. In setting these standards of conduct, the Office is aware
that the interests that could be affected by rate adjustment and
royalty distribution proceedings are quite extensive. We therefore wish
to make sure, especially in the area of financial conflicts of
interest, that we have set the standard at an appropriate point. Should
we cast the net wider in our efforts to anticipate bias, or, on the
contrary, have we gone too far? As an appendix to this preamble, we
have set out ten examples (with their related section numbers) of
situations that seem likely to occur in the next few years. We solicit
comments as to whether or not these situations should be grounds for
eliminating an arbitrator from consideration by the Librarian to serve
on a panel. Please note that these examples are intended solely to
focus thought and elicit opinions; they are in no way intended to
suggest our opinions on how they should be answered.
(e) Subpart E--Procedures of Copyright Arbitration Royalty Panels
(1) Formal hearings--(i) Phase I and Phase II proceedings. In cable
royalty distribution proceedings, the former Tribunal traditionally
divided the proceeding into two phases. In Phase I, the Tribunal
determined the percentage allocation of the royalty pool among nine
categories of claimants.<SUP>13 Then, if there were any disputes within
a claimant category, the Tribunal would move to Phase II and make a
suballocation. However, this procedure was ``common law'' at the
Tribunal and was not embodied in Sec. 251.41, which states only that
formal hearings will be conducted for royalty distribution. It was not
adopted, even as ``common law,'' for satellite royalty distribution
proceedings because the first three yearly funds were completely
settled.
---------------------------------------------------------------------------
\1\3The nine Phase I categories were: Program Suppliers, Sports,
Commercial Television, Music, Noncommercial Educational Television,
Devotional Claimants, Canadian Claimants, Noncommercial Educational
Radio, and Commercial Radio. The claimant categories resulted mostly
from the way the claimants themselves coalesced before the Tribunal,
as they were entitled to do under section 111.
---------------------------------------------------------------------------
We solicit comments on the following:
Is the procedure of dividing a cable distribution proceeding into
Phases I and II a precedent that is binding on the Copyright Office?
If not, should it nonetheless be followed?
If it should be followed, should we adopt rules governing the
procedure?
Should those rules include a definition of each of the Phase I
categories?
(ii) ``Paper'' proceedings. As proposed, Sec. 251.41(b) of the NPRM
permitted the parties to petition the Librarian to have their
controversy decided solely on the submission of written pleadings.
However, the section did not identify the basis on which the Librarian
would rule in favor of the petition. The Music Publishers urged that
the basis should be the same as that for summary judgment set forth in
Rule 56 of the Federal Rules of Civil Procedure: ``that there is no
genuine issue as to any material fact.'' Music Publishers, comment at
9-10.
The Copyright Owners proposed a procedure called ``summary
decision,'' which would use the same standard: ``no genuine issue for a
hearing.'' They also proposed including a procedure for ``motions to
dismiss'' for disposing of claims or petitions, which would be handled
within the same framework. Motions for ``summary decision'' and
``motion to dismiss'' could be filed with the CARP panel or, if no
panel had been constituted, with the Librarian. Copyright Owners,
comment at 24.
The Office agrees with Music Publishers and Copyright Owners: the
grounds for granting a petition for a ``paper hearing'' should be that
no genuine issue exists as to any material fact. We have added a second
ground supporting petitions for ``paper hearings'': if all parties to
the proceeding agree to the petition.
As under the NPRM, petitions asking that a controversy be decided
on the basis of written pleadings may be filed with the Librarian
during the 30-day pre-hearing periods provided in Secs. 251.45 and
251.63. If the Librarian finds that there is no factual issue requiring
a formal hearing, or that all parties agree that the petition should be
granted, he or she may decide in favor of ``paper proceedings.'' Unlike
the NPRM, however, Sec. 252.41 now gives the Librarian alternative
discretion to designate the request for a paper proceeding as an issue
for the CARP. Similarly, the procedure for a motion to dismiss, to be
found in Sec. 251.45(b), is to file it with the Librarian who may, in
his or her discretion, decide the motion to dismiss or designate it an
issue for the panel.
(2) Suspension or waiver of rules. Section 251.42 provides that a
CARP, for purposes of that panel's individual proceeding only, may
waive the procedural provisions of the rules upon a showing of good
cause. Copyright Owners have asked that any waiver of the procedural
rules by the panel be allowed only if all the parties to the proceeding
agree. Copyright Owners, comment at 23.
The Copyright Owners may be concerned that the discretion of the
panel to waive rules could lead to a denial of due process, but the
proposal to allow waivers only with the unanimous consent of the
parties may go too far in the opposite direction. It might hinder a
CARP's efforts to do justice in an individual instance, and it might
give the party opposing the waiver unfair leverage. For example, the
panel might want to waive the rules that allow only direct and rebuttal
testimony, thus permitting surrebuttal testimony in the interest of
getting more information. If unanimous consent were needed for the
waiver, however, the party that might be disadvantaged by the
additional information would have a veto.
The Office has decided to retain this provision as written, but we
will closely monitor the circumstances under which future CARPs find
good cause to suspend or waive the rules. Should any patterns of
unfairness or denial of due process begin to emerge, we will revisit
this provision.
(3) Filing and service of written cases and pleadings--(i)
Attestation of Written Testimony. Section 251.44(d) requires that the
written testimony of each witness be accompanied by an affidavit or
declaration. Copyright Owners asked that this requirement be deleted
and be made optional because witnesses testify orally under oath, and,
in essence, swear twice. Copyright Owners, comment at 23. However,
because some testimony is stipulated and is entered into the record
without oral testimony, we have decided to retain the provision.
(ii) Typographical error. With regard to subsection (e)(1) of
Sec. 251.44, the Copyright Owners noted a typographical error: The word
``not'' was inadvertently left out when the subparagraph was carried
over from the former Tribunal's rules. Copyright Owners, comment at 23.
The correction has been made.
(iii) Service list. Subsection (f) requires the parties to a
proceeding to serve everyone on the service list when making a filing
with the CARP or the Librarian. The Copyright Owners asked that the
section be amended to require the Librarian to develop a service list
for each proceeding and distribute it to the parties so that they can
comply with the requirements of service. The Copyright Owners also
asked for the rule to specify that each party to a proceeding has an
obligation to inform the Librarian of changes in its name or address
affecting the service list. Copyright Owners, comment at 23. These are
both good suggestions with which we agree, and we have amended the
subsection accordingly.
(iv) Oppositions and replies. Copyright Owners requested that one
or more new paragraphs be added to Sec. 251.44 to provide for automatic
pleading cycles whenever motions are filed in a proceeding. They
recommended that oppositions to motions be filed within ten days and
replies to oppositions be filed within five days of the date of
service. Copyright Owners, comment at 23-24. The former Tribunal's
rules did not contain provisions on these points, which we agree will
be useful. Accordingly we have added a new subsection (g) to
Sec. 251.44.
(4) Precontroversy motions and discovery. Section 251.45, as
proposed in the NPRM, provided a period for precontroversy exchange of
documents and discovery, and the filing of precontroversy motions and
objections. The resolution of these precontroversy actions would have
been made by the Librarian.
(i) Comments of copyright owners. The Copyright Owners supported,
in principle, the concept of a period of discovery to take place before
the 180-day arbitration period, as a means of reducing hearing costs
and focusing the issues to be decided. However, they argued that
precontroversy discovery would be a ``wasted effort'' if it were to
occur before the filing of the written direct cases, and that discovery
requests should be focused on actual written cases rather than general
information. They also urged that resolution of precontroversy matters
should be made by the CARP, not by the Librarian, because the panel
would ultimately be the body to determine the relevance of the
proffered facts. Copyright Owners, comment at 6-9. To achieve what the
Copyright Owners want--precontroversy discovery handled by the CARP and
based on written direct cases--it would be necessary to have the
written direct cases filed, and the CARP empaneled, before the
beginning of the 180-day arbitration period.
To accomplish this goal in accordance with the provisions of the
Copyright Code, the Copyright Owners recommended that a distinction be
made between ``the commencement of proceedings,'' 17 U.S.C. 803(d), and
the ``notice initiating an arbitration proceeding,'' 17 U.S.C. 802 (b)
and (e). Under this theory the Office would first declare the
``commencement of proceedings'' and thereupon require the filing of
written direct cases and empanel the CARP; discovery motions and
objections would be ruled on by the CARP. After discovery is complete
the Office would then ``initiate an arbitration proceeding,'' and at
that point the 180-day arbitration period would begin to run. Copyright
Owners, comment at 9-12.
(ii) Amendment of Sec. 251.45. We agree with the Copyright Owners
that precontroversy discovery before the filing of written direct cases
would not be productive. At worst it could raise the costs of
litigation and become a fishing expedition to harass an opposing
claimant. However, as a matter of statutory construction, the Office
cannot agree that the ``commencement of proceedings'' can be
conceptually separated from ``initiating an arbitration proceeding'' so
as to permit the CARP to sit earlier than the 180-day arbitration
period. Section 802(b), which first uses the phrase ``initiating an
arbitration proceeding,'' employs it in the context of ``a notice in
the Federal Register initiating an arbitration proceeding under section
803 * * *'' In Sec. 803, the notice to which Sec. 802(b) refers is the
``notice of commencement of proceedings.'' Therefore, the phrases refer
to each other and must be considered synonymous. Although, as noted in
the NPRM, Chairman Hughes in his statement accompanying the CRT Reform
Act recommended that our regulations provide for precontroversy
discovery ``to the extent practicable,'' we have come to the conclusion
that there is no way to accomplish this goal under the statutory
scheme.
We have therefore amended Sec. 251.45 to eliminate the proposal for
precontroversy discovery, and we have not adopted the Copyright Owners'
recommendation to have discovery of written direct cases ruled on by
the Panel before the 180-day period, because we do not believe that the
statute allows for it.
(5) Transcript and record. We have reviewed Sec. 251.49 on our own
motion. The former Tribunal's rules required persons wishing a copy of
the hearing transcript to purchase it from the official reporter, but
we think the public should not only be able to inspect the transcript
but also to make their own copies. We have therefore amended the
section to provide that, during the proceeding, the public will have
the opportunity to copy the transcript at a location specified by the
CARP chairperson. After the proceeding, the transcript and the rest of
the written record will be available at the Copyright Office for
copying.
In addition, partly for reasons discussed above in connection with
Sec. 251.6, we solicit comments on whether the hearing sessions should
be recorded on video as well as audio tape. Videotaping would add to
the costs of the proceeding, but it would have several advantages: (1)
Ensuring the accuracy of the official transcript, (2) allowing the
arbitrators to reach a better decision by helping them to review the
case more accurately, and (3) affording arbitrators who missed any
portion of the proceeding, because of illness or because they were
appointed after the proceeding had begun, an opportunity to make up for
their absences.
(6) Assessment of costs of arbitration panels. Section 251.54
provides for the assessment of the costs of the Arbitration Panels.
(i) Comments on assessments in distribution proceedings. The
Copyright Owners and RIAA/AARC have asked that the section be amended
to provide that, in distribution proceedings, the costs of the CARPs be
deducted from the relevant royalty fund. Copyright Owners, comment at
24. RIAA/AARC, comment at 4. The Office finds that it does not
currently have authority to adopt this proposal. Section 802(h)(1) of
the Copyright Code states: ``The Librarian of Congress and the Register
of Copyrights may * * * deduct from royalty fees * * * the reasonable
costs incurred by the Library of Congress and the Copyright Office
under this chapter.'' It does not provide that the Office can deduct
the costs incurred by the CARP.
We agree that this is an unsatisfactory result. The Librarian of
Congress, with input from the Copyright Office, is in the process of
drafting ``financial reform'' legislation that would deal with this
problem among other fiscal matters affecting the Library; we hope that
the legislation will be introduced and enacted in the 103rd Congress.
As currently drafted, title V of the proposed bill would add the
following provision dealing with the point at issue here:
In distribution proceedings, the Librarian of Congress and the
Register of Copyrights may deduct from royalty fees deposited or
collected under this title the reasonable costs incurred by the
copyright royalty panels, and pay the arbitrators from such
deductions at such intervals and in such manner as the Librarian of
Congress shall by regulation provide. Such deduction shall be made
before the fees are distributed to any copyright claimants.
Claimants shall bear the costs of the copyright arbitration royalty
panels in direct proportion to their share in the distribution.
We invite further comments on this problem. Should the proposed
legislation be enacted we would, of course, go forward with additional
regulatory proceedings aimed at implementing it.
(ii) Comments and assessments in ratemaking proceedings. NCTAs
expressed concern about the assessment of costs in a ratemaking
proceeding. Section 251.54(a)(1) repeats the statutory language from
Sec. 802(c): ``In the case of a rate adjustment proceeding, the parties
to the proceeding shall bear the entire cost thereof in such manner and
proportion as the panel shall direct.'' NCTA believes that it would be
unfair for it to be assessed part of the costs of a rate adjustment
proceeding it did not initiate; speculating that it could find itself
defending an existing rate only because some other party petitioned to
have it reconsidered. NCTA asked that the arbitrators be instructed to
proceed on the presumption that the party seeking the rate adjustment
should bear the costs of the proceeding. NCTA, comment at 3.
When the Tribunal was in existence, the costs of a rate adjustment
proceeding were borne by the taxpayers, because the only authority the
Tribunal had to assess its costs to the parties was for distribution
proceedings. See, former 17 U.S.C. 807. Therefore, neither the
petitioners nor the nonpetitioners paid any of the costs of a rate
adjustment proceeding. With the adoption of the CRT Reform Act,
Congress made a policy decision that taxpayers no longer would pay for
the rate adjustment proceedings, and that the costs would be entirely
borne by the parties. However, we cannot find any suggestion, nor is
there any reason to believe, that Congress wanted to put the costs of
the proceeding on the petitioner alone. On the contrary, Congress
expressly stated that all the parties to a ratemaking proceeding shall
pay, and left it to the panel to decide only the manner and proportion
of their payments. The effect of putting the costs on the petitioner
would be to make petitioners pay a high price for the periodic rate
reviews that are already scheduled and contemplated by Congress.
NCTA's concern about a frivolous petitioner for rate adjustment may
be justified. However, Sec. 803 of the Copyright Code provides that
only petitioners with a significant interest in the rate can initiate a
rate adjustment proceeding. Therefore, frivolous petitions or petitions
from noninterested persons will be dismissed. However, once a
petitioner with a significant interest petitions, the rate review
becomes a matter of the public interest, because any member of the
public may potentially pay, be a recipient of, or be affected by the
rate. Therefore, since the burden should be shared by both the owners
and users in an inquiry as to which rate would best serve the public
interest, we cannot agree with NCTA's request.
(iii) Comments on billing cycle. Endispute expressed concern with
the NPRM's proposal to have the arbitrators bill the parties only after
the submission of the panel's report to the Librarian. In a 180-day
proceeding, the arbitrators might have to wait seven to eight months
before receiving any compensation. Endispute urged that the arbitrators
be able to bill the parties monthly, but this would raise difficulties
in a distribution proceeding. There, the parties, by law, are to pay
the arbitrators in proportion to their share of the fund, but their
share will not be known until the end of the proceeding.
Because of this problem we have not included a provision for
monthly billing in this interim regulation. At the same time we are
soliciting comments on the advisability of monthly billing and how it
might be accomplished, given the statutory requirement that parties pay
in proportion to their share of the fund. We are also interested in
comments on the feasibility of alternatives to monthly billing, such as
requiring the parties to make advance partial payments until a final
bill can be prepared.
(4) Amendment of Sec. 251.54. After reviewing the question of
assessments, we have decided to modify the rule to take account of the
possibility that, after the CARP has made its report, the Librarian may
change the final distribution percentages or the percentages may be
changed because of a court-ordered remand. As amended, the section
requires the parties who have paid the arbitrators according to earlier
percentages to reimburse each other to reflect the final percentages.
(f) Subpart F--Rate Adjustment Proceedings
(1) Scope and commencement of adjustment proceedings. In its
comments EIA challenged the Office's characterization in Secs. 251.60
and 251.61 of the authority to raise the DART royalty maximum as a
``rate'' adjustment proceeding. They argued that the charge--2% of the
transfer price--cannot be changed by the Librarian, and that only the
maximum of $8/$12 per device can. EIA, comment at 3-4. Whether the word
``rate'' encompasses only the applicable percentage, or whether it also
includes the floors and ceilings on that percentage, does not have to
be addressed here because, as noted above, the review of the DART
royalty maximum by the Librarian is not a CARP proceeding. Therefore,
the Office has deleted the references to it in Secs. 251.60 and 251.61.
(2) Period for consideration. Section 251.63 provides a 30-day
period before a rate adjustment proceeding to give the parties an
opportunity to settle their differences.
(i) Comments of copyright owners. The Copyright Owners have asked
that the first sentence be amended to clarify that the period is for
consideration ``of settlement.'' Copyright Owners, comment at 25. The
Office concurs, but has further modified the phrase to read
``consideration of their settlement.'' This is because it cannot be
known officially who all the parties to a rate adjustment proceeding
will be until the proceeding is initiated and everyone has had an
opportunity to file notices of intent to participate. Therefore, pre-
proceeding settlements can be reached only by those parties who make
themselves known to each other, and the most that can be achieved is a
settlement of their differences.
(ii) Comments of music publishers. The Music Publishers asked how a
rate settlement reached during the period before convening of the CARP
could be approved by the Librarian. Music Publishers, comment at 7-8.
If there is a settlement among the known parties, no approval by the
Librarian is necessary. Either it will result in a withdrawal of the
rate petition, or it will become the jointly-held position of the
parties to the settlement as to what the new rate should be. Once their
jointly-held position becomes known, it cannot be considered a full
settlement until the rate is proposed to the United States public,
either in a notice-and-comment proceeding or in a CARP
proceeding.<SUP>14
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\1\4The settlement that was reached in the 1987 mechanical
license rate adjustment among Music Publishers, RIAA and the
Songwriters Guild of America (SGA) was not approved as a final
disposition of the rate adjustment by the Tribunal. It was proposed
to the public in a notice-and-comment proceeding to see if the
jointly-held position of these three organizations should become the
basis of the Tribunal's rate adjustment. The comments agreed with
Music Publishers/RIAA/SGA's proposal, and only then did the Tribunal
adopt it. 1987 Adjustment of the Mechanical Royalty Rate, 52 FR
22637 (1987).
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(iii) Request for comments. The Office has made no changes in the
interim rule. However, we are interested in comments concerning the 30-
day settlement period in rate adjustment proceedings. We have two
specific questions:
If a settlement is reached, would it be a useful alternative to the
convening of a CARP for the Library/Office to propose the agreed-upon
rate to the public in a notice-and-comment proceeding?
Does the Librarian have authority to adopt such a procedure, or
would the convening of a CARP be required?
(3) Assessment of costs. Section 251.65 is based on Sec. 802(h)(1)
of the statute as amended by the CRT Reform Act, which allows the
Librarian of Congress and the Copyright Office to assess their
reasonable costs to the parties ``to the most recent relevant
arbitration proceeding.'' EIA commented that this assessment is only
permitted, according to Sec. 802(h)(1), ``if no royalty pool exists
from which their costs can be deducted.'' EIA, comment at 4. EIA's
point is well-taken, and the Office has modified the section
accordingly.
EIA requested further that the costs of the proceeding to raise the
DART royalty maximum by the Librarian be assessed to the DART royalty
pool. EIA, comment at 5. However, as noted above, this proceeding is
not a CARP proceeding and is therefore not germane to this rulemaking.
(g) Subpart G--Royalty Fee Distribution Proceedings
The Copyright Office is adopting subpart G as proposed in the NPRM
with one technical amendment. The reference to ``cable television'' in
Sec. 251.72(a) and Sec. 251.73 is being changed to read ``cable,'' as
noted in the preamble discussion to Sec. 251.2.
(h) Part 252--Filing of Claims to Cable Royalty Fees
Part 252 prescribes the filing requirements for claims to cable
royalties. As noted in the NPRM, the procedural system for filing cable
claims borrows heavily from the one adopted by the former Tribunal for
the filing of digital audio claims. See 58 FR 53822 (1993).
(1) Content of claims. Section 252.3 prescribes the general
requirements for the submission and content of cable royalty claims.
(i) Joint claimants. The CRT's requirements for filing DART claims
included provisions dealing with joint claims. In setting out the
required content of claims, subsection (a)(3) provides:
If the claim is a joint claim, a concise statement of the
authorization for the filing of the joint claim. For this purpose a
performing rights society shall not be required to obtain from its
members or affiliates separate authorizations, apart from their
standard agreements.
Subsection (e), as adopted from the CRT's regulations and proposed in
the NPRM, provided:
All claimants filing a joint claim shall make available to the
Copyright Office, other claimants, and, where applicable, a
Copyright Arbitration Royalty Panel, a list of all individual
claimants covered by the joint claim.
(A) Comments of PBS. According to PBS, when it comes to joint
claims it is unclear, under subsections (a)(3) and (e) of Sec. 252.3,
how to satisfy the requirement in subsection (a)(4) for identifying a
secondary transmission that ``establish[es] the basis for the claim.''
Would the requirement be satisfied by identifying at least one
secondary transmission for at least one of the claimants included
within a joint claim? Or is it necessary to identify at least one such
transmission for each individual claimant included within the joint
claim? PBS, comment at 2.
PBS argues that the former interpretation is the correct one, since
the requirement in subsection (e) for filing a list identifying all
joint claimants would not be necessary if each joint claimant had to
identify a secondary transmission. Further support for this
interpretation is drawn from the fact that Sec. 252.3 is adopted from
the filing requirements for DART, which clearly do not require each
joint claimant to identify one or more of his or her songs that were
the subject of a digital transmission. PBS, comment at 2-3.
PBS asks us to clarify this matter and amend Sec. 251.3 so as not
to require identification of a secondary transmission for each joint
claimant. They note that they currently spend upwards of 300 hours a
year on this requirement,<SUP>15 which they argue serves no substantive
purpose beyond providing a jurisdictional basis for a party to
participate.
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\1\5It is clear that under Sec. 302.7 of the former Tribunal's
rules each joint claimant was required to identify at least one
secondary transmission of its copyrighted works.
---------------------------------------------------------------------------
(B) Amendment of Sec. 252.3(e). We acknowledge that Sec. 252.3 as
proposed in the NPRM muddies the waters for the filing of cable royalty
claims, and of satellite royalty claims as well. We are troubled,
however, by changing what had been a longstanding requirement at the
Tribunal for obliging all claimants to identify at least one secondary
transmission of their copyrighted works. While such requirement does
undoubtably add to the time and expense burdens of joint claimants such
as PBS, it is not without purpose. The law states plainly that cable
compulsory license royalties are only to be distributed to ``copyright
owners who claim that their works were the subject of secondary
transmissions by cable systems during the relevant semiannual period.''
17 U.S.C. 111(d)(3). To support such a claim, each claimant may
reasonably be asked to identify at least one secondary transmission of
his or her work, thus permitting the Copyright Office to screen the
claims and dismiss any claimants who are clearly not eligible for
royalty fees. The requirement will also help to reduce time spent by a
CARP determining which claimants have a valid claim: If only one
secondary transmission is identified for one of the joint claimants,
then it could not readily be determined if the other claimants were
even eligible for cable royalties.
In an effort to end this confusion we are deleting subsection (e)
with its requirement that joint claimants submit a list identifying all
the claimants. Instead, we are amending subsection (a)(4) to require
that each claimant to a joint claim, other than a joint claim filed by
a performing rights society on behalf of its members or affiliates,
must identify at least one secondary transmission of his or her works.
(ii) Address and name change. Subsection (c) of Sec. 253.3 provides
that ``[i]n the event that the legal name and/or address of the
claimant changes after the filing of a claim, the claimant shall notify
the Copyright Office of such change within 30 days of the change.''
Failure to provide this notification could, under certain
circumstances, make the claim subject to dismissal. Copyright Owners
request that subsection (c) be deleted in its entirety because ``it
could be an unnecessary draconian trap for the unwary (or wary)
claimant.'' Copyright Owners, comment at 25.
It is not the intention of the Copyright Office that subsection (c)
should be used to dismiss otherwise valid claims. The concern is that
the Office must be able to communicate with the claimants, especially
if an action requires prompt disposition. To take one example, suppose
one party files a motion to dismiss another party's claim, and the
Copyright Office asks the claimant to respond to the motion; the
claimant has moved and there is no response. There would be no means to
find out whether the first party's motion is valid in that situation.
Subsection (c) is intended to give the Office authority to dismiss for
failure to prosecute a claim in cases where the Office was not given
timely notice of the change of address or name.
At the same time, we acknowledge the possibility that the 30-day
deadline for notifying the Office of an address or name change could
work hardships. We have therefore amended subsection (c) to provide
that dismissal may only occur after the Office has made a good faith
attempt to communicate with the claimant, and the effort failed because
the claimant did not inform the Office of a change in legal name or
address.
(2) Compliance with statutory dates. Section 252.4 implements the
statutory requirement that cable claims must be made in the month of
July for royalties from the preceding calendar year. Subsection (b)
provides that a cable claim is timely filed if it is mailed with the
U.S. Postal Service and bears a U.S. postmark during the month of July.
(i) Comments of copyright owners: Canadian and Mexican mailings.
The Copyright Owners have asked that the provision for a July U.S.
postmark be expanded to include mailings from Canadian and Mexican post
offices. Copyright Owners, comment at 25. The Copyright Owners did not
document their request, and the Office is uncertain about the authority
or feasibility of acceding to it. We have therefore decided not to
accept the Copyright Owners' proposed amendment at this time, but we
invite them, and any other interested parties, to provide further
information and comments on the question.
(ii) Amendments of Sec. 252.4. After reviewing the timeliness
requirement, we have decided to add a new subsection (b) to Sec. 252.4,
in recognition of Sec. 703 of the Copyright Code.<SUP>16 The new
subsection provides that, when the last day of July falls on a
Saturday, Sunday, holiday, or other nonbusiness day in the District of
Columbia or the Federal Government, the Copyright Office will accept
claims received in the Office on the first business day in August, and
will also accept claims bearing a U.S. postmark dated on the first
August business day.
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\1\6Section 703 of the Copyright Code states, ``In any case in
which time limits are prescribed under this title for the
performance of an action in the Copyright Office, and in which the
last day of the prescribed period falls on a Saturday, Sunday,
holiday, or other nonbusiness day within the District of Columbia or
the Federal Government, the action may be taken on the next
succeeding business day, and is effective as of the date when the
period expired.''
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The Copyright Office is also amending Sec. 252.4 by making a
consequential change in subsection (c), and by adding new subsections
(d) and (e). Subsection (d) provides that no claim may be filed by
facsimile transmission. Under new subsection (e), parties whose claims
were not timely received by the Office will be given an opportunity to
offer proof of delivery. A claimant who sent a claim which was properly
addressed<SUP>17 and properly mailed, but which was nonetheless
received late by the Copyright Office or was not received at all, may
still be able to prove the validity of his or her filing. If the claim
was sent by certified mail, return receipt requested, we will accept
the claim if the claimant can produce the receipt showing that it was
properly mailed. We will not accept as evidence either the affidavit of
an officer or employee of the claimant, or the affidavit of a U.S.
postal worker.
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\1\7A claim addressed to the former Tribunal will not be
considered properly addressed.
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(3) Proof of fixation of works. Section 252.5 of our earlier
interim regulation, which was imported from the CRT rules, provided a
detailed procedure for proving fixation of a work for which a cable
claim had been filed. The Copyright Owners have asked that the section
be deleted in its entirety because it is no longer necessary. Copyright
Owners, comment at 25. The Copyright Office agrees. If there are any
future controversies involving whether a work was fixed in a tangible
medium, they can be resolved under the general authority of the Library
and the CARPs to issue dispositive determinations during the course of
a proceeding.
(4) Copies of claims. In place of ``Proof of fixation of works,''
the Copyright Office is adopting a new text in Sec. 252.5. The new
section provides that all claimants must submit an original and two
copies of their claims to cable royalty fees.
(i) Part 257--Filing of Claims to Satellite Carrier Royalty Fees
Although none of the commentators requested any changes in part
257, the Copyright Office is making several amendments modeled after,
and for the same reasons as, the changes made in part 252. Subsection
257.3(a)(4) is amended, and subsection (e) is deleted, to clarify that
each claimant in a joint claim must identify at least one secondary
transmission of his or her works. (See the discussion of filing of
cable claims under Sec. 252.3 above.) Subsection (c) is amended to
allow the Copyright Office to dismiss a claim if it has made a good
faith effort to contact a claimant, but has failed because the claimant
has not informed the Office of a change in name or address. Section
251.4--Compliance with Statutory Dates--is amended by allowing
claimants to file on the first business day in August whenever July 31
falls on a non-business day, adding a prohibition of submission of
claims by facsimile transmission, and allowing claimants to offer proof
of mailing for claims properly mailed but not received by the Copyright
Office. Finally, Sec. 251.5--Proof of Fixation of Works--is eliminated
and replaced with a provision requiring claimants to submit an original
and two copies of each claim to satellite carrier royalty fees.
(j) Part 259--Filing of Claims to Digital Audio Recording Devices and
Media Royalty Payments
Corresponding to our amendments to the rules for filing cable and
satellite claims, we are making the same changes with regard to filing
a DART claim. Section 259.3(c) removes the provision for requiring name
and address changes to be filed within 30 days, and replaces it with a
general obligation to report changes. Section 259.4 is amended by
adding a new subsection (e) which prohibits the filing by facsimile
transmission of the notice of appointment of an independent
administrator. Section 259.5 is changed to allow claimants to file on
the first business day in March whenever the last day in February falls
on a Federal Government nonbusiness day, to prohibit the filing of
claims by facsimile transmission, and to allow claimants who send their
claims by certified mail, return receipt requested, to offer proof of
mailing if the Copyright Office has not timely received the claim. A
new section Sec. 259.6, modeled after Sec. 252.6 and Sec. 257.5, is
added to part 259 requiring the filing of an original and two copies of
claims to DART royalties.
Appendix A to Subpart D--Standards of Conduct
Note: The following Appendix will not appear in the Code of
Federal Regulations.
We use this Appendix to offer ten examples of hypothetical
situations that are intended to probe the proper extent of the
restrictions on financial interests. Many of them refer to Phase I or
Phase II of the former Tribunal's cable proceedings. This is not
intended to presume the actual structure of the CARP proceedings, but
rather to improve the quality of the comments by providing concrete
situations.
Sec. 251.31(a)(1)
Example 1: An arbitrator is being considered for a cable
controversy among five Phase I categories. He has a financial
interest in a claimant that is in one of the other Phase I
categories which has settled its interest in the proceeding. Does he
have a financial conflict of interest?
Example 2: An arbitrator is being considered for a Phase I cable
controversy that includes the Commercial Television Station
category. She has a financial interest in a commercial broadcast
station. However, the station is not a claimant in the proceeding
because it is not carried as a distant signal by any cable system.
Does she have a financial conflict of interest?
Example 3: An arbitrator is being considered for a cable
controversy in which there is a complete Phase I settlement, but
there is one Phase II controversy. He has a financial interest in a
claimant outside of the Phase II category that has the controversy.
Does he have a financial conflict of interest?
Example 4: An arbitrator has a financial interest in a motion
picture production company which does not file a claim for cable
royalties. However, the distributor who syndicates the company's
movies to television does file claims for royalties, and remits to
the film producer a percentage of all his syndication revenues. Does
the arbitrator have a financial conflict of interest?
Sec. 251.31(a)(2)
Example 5: An arbitrator is being considered for a cable rate
adjustment proceeding that would review the 3.75% rate. She has a
financial interest in a cable system that grosses less than $292,000
per half year. The 3.75% rate only applies to cable systems that
gross more than $292,000 per half year. Does she have a financial
conflict of interest?
Example 6: An arbitrator is being considered for a cable rate
adjustment proceeding that would review the 3.75%. He has a
financial interest in a cable network which negotiates carriage on
cable systems in the private marketplace. Does he have a financial
conflict of interest?
Sec. 251.31(b)
Example 7: An arbitrator is being considered for a satellite
carrier distribution proceeding. He is an affiliate of a performing
rights society, and receives, on average, $100 a year for a song he
wrote 30 years ago. Does he have a financial conflict of interest?
Sec. 251.31(c)(1)
Example 8: An arbitrator is being considered for a mechanical
rate adjustment hearing. He has a stock mutual fund which is
currently invested in several recording companies. Does he have a
financial conflict of interest?
Sec. 251.31(c)(2)
Example 9: An arbitrator is being considered for a Phase I cable
distribution proceeding. From 1960 to 1970, she worked for a program
syndicator. She is now receiving a fixed pension from the syndicator
for her ten years' work. Does she have a financial conflict of
interest?
Sec. 251.36(c)
Example 10: An arbitrator has presided over a cable rate
adjustment proceeding which reviewed the 3.75% rate. The time for
all appeals has passed, and no one has appealed. The arbitrator
returns to private practice and a cable system wants to hire the
arbitrator to be its attorney on matters before the FCC. During the
proceeding, the cable industry was represented by NCTA and CATA. The
cable system that wants to hire the arbitrator was not a party to
the proceeding, nor did it authorize NCTA or CATA to represent it in
the proceeding; however, the cable system was affected by the change
in the 3.75% rate. Can the arbitrator take the cable system on as a
client?
List of Subjects
37 CFR Parts 251 and 301
Administrative practice and procedure, Hearing and appeal
procedures.
37 CFR Parts 252 and 302
Cable television, Claims, Copyright.
37 CFR Parts 253 and 304
Copyright, Music, Radio, Rates, Television.
37 CFR Parts 254 and 306
Copyright, Jukeboxes, Rates.
37 CFR Parts 255 and 307
Copyright, Music, Recordings.
37 CFR Parts 256 and 308
Cable television, Rates.
37 CFR Parts 257 and 309
Cable television, Claims.
37 CFR Parts 258 and 310
Copyright, Satellite.
37 CFR Parts 259 and 311
Claims, Copyright, Digital audio recording devices, and Media.
37 CFR Parts 303
Copyright, Jukeboxes.
37 CFR Parts 305
Claims, Jukeboxes.
Interim Rules
For the reasons set out in the preamble, 37 CFR chapters II and III
are amended under authority of 17 U.S.C. 802(d) as follows:
1. Part 301 of chapter III is removed.
1a. Existing parts 201 through 211 are designated as subchapter A,
and a new heading for subchapter A is added to read as follows:
Subchapter A--Copyright Office and Procedures.
1b. New subchapter B--Copyright Arbitration Royalty Panel Rules and
Procedures--is added to chapter II consisting of parts 251-259.
2. A new part 251 is added to subchapter B of chapter II to read as
follows:
PART 251--COPYRIGHT ARBITRATION ROYALTY PANEL RULES OF PROCEDURE
Subpart A--Organization
Sec.
251.1 Official address.
251.2 Purpose of Copyright Arbitration Royalty Panels.
251.3 Arbitrator lists.
251.4 Arbitrator lists: Objections.
251.5 Qualifications of the arbitrators.
251.6 Composition and selection of Copyright Arbitration Royalty
Panels.
251.7 Actions of Copyright Arbitration Royalty Panels.
251.8 Suspension of Proceedings.
Subpart B--Public Access to Copyright Arbitration Royalty Panel
Meetings
251.11 Open meetings.
251.12 Conduct of open meetings.
251.13 Closed meetings.
251.14 Procedure for closed meetings.
251.15 Transcripts of closed meetings.
251.16 Requests to open or closed meetings.
Subpart C--Public Access to and Inspection of Records
251.21 Public records.
251.22 Public access.
251.23 FOIA and Privacy Act.
Subpart D--Standards of Conduct
251.30 Basic obligations of arbitrators.
251.31 Financial interests.
251.32 Financial disclosure statement.
251.33 Ex parte communications.
251.34 Gifts and other things of monetary value.
251.35 Outside employment and other activities.
251.36 Pre-arbitration and post-arbitration employment
restrictions.
251.37 Use of nonpublic information.
251.38 Billing and commitment to standards.
251.39 Remedies.
Subpart E--Procedures of Copyright Arbitration Royalty Panels
251.40 Scope.
251.41 Formal hearings.
251.42 Suspension or waiver of rules.
251.43 Written cases.
251.44 Filing and service of written cases and pleadings.
251.45 Precontroversy motions, and discovery.
251.46 Conduct of hearings: Role of arbitrators.
251.47 Conduct of hearings: Witnesses and counsel.
251.48 Rules of evidence.
251.49 Transcript and record.
251.50 Rulings and orders.
251.51 Closing the hearing.
251.52 Proposed findings and conclusions.
251.53 Report to the Librarian of Congress.
251.54 Assessment of costs of arbitration panels.
251.55 Post-panel motions.
251.56 Order of the Librarian of Congress.
251.57 Effective date of order.
251.58 Judicial review.
Subpart F--Rate Adjustment Proceedings
251.60 Scope.
251.61 Commencement of adjustment proceedings.
251.62 Content of petition.
251.63 Period for consideration.
251.64 Disposition of petition: Initiation of arbitration
proceeding.
251.65 Deduction of costs of rate adjustment proceedings.
Subpart G--Royalty Fee Distribution Proceedings
251.70 Scope.
251.71 Commencement of proceedings.
251.72 Determination of controversy.
251.73 Declaration of controversy: Initiation of arbitration
proceeding.
251.74 Deduction of costs of distribution proceedings.
Authority: 17 U.S.C. 801-803.
Subpart A--Organization
Sec. 251.1 Official address.
Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest
Station, Washington, DC 20024.
Sec. 251.2 Purpose of Copyright Arbitration Royalty Panels.
The Librarian of Congress, upon the recommendation of the Register
of Copyrights, may appoint and convene a Copyright Arbitration Royalty
Panel (CARP) for the following purposes:
(a) To make determinations concerning copyright royalty rates for
the cable compulsory license, 17 U.S.C. 111.
(b) To make determinations concerning copyright royalty rates for
making and distributing phonorecords, 17 U.S.C. 115.
(c) To make determinations concerning copyright royalty rates for
coin-operated phonorecord players (jukeboxes) whenever a negotiated
license authorized by 17 U.S.C. 116 expires or is terminated and is not
replaced by another such license agreement.
(d) To make determinations concerning royalty rates and terms for
the use by noncommercial educational broadcast stations of certain
copyrighted works, 17 U.S.C. 118.
(e) To distribute cable and satellite carrier royalty fees and
digital audio recording devices and media payments under 17 U.S.C. 111,
119, and chapter 10, respectively, deposited with the Register of
Copyrights.
Sec. 251.3 Arbitrator lists.
(a) Any professional arbitration association or organization may
submit, on or before May 6, 1994, and before January 1 of each year
thereafter, a list of persons qualified to serve as arbitrators on a
Copyright Arbitration Royalty Panel. The list shall contain the
following for each person:
(1) The full name, address, and telephone number of the person.
(2) The current position and name of the person's employer, if any,
along with a brief summary of the person's employment history,
including areas of expertise, and, if available, a description of the
general nature of clients represented and the types of proceedings in
which the person represented clients.
(3) A brief description of the educational background of the
person, including teaching positions and membership in professional
associations, if any.
(4) A statement of the facts and information which qualify the
person to serve as an arbitrator under Sec. 251.5.
(5) A description or schedule detailing fees proposed to be charged
by the person for service on a CARP.
(6) Any other information which the professional arbitration
association or organization may consider relevant.
(b) After May 6, 1994, and after January 1 of each year thereafter,
the Librarian of Congress shall publish in the Federal Register a list
of at least 30, but not more than 75 persons, submitted to the
Librarian from at least three professional arbitration associations or
organizations. The persons so listed must satisfy the qualifications
and requirements of this subchapter and can reasonably be expected to
be available to serve as arbitrators on a Copyright Arbitration Royalty
Panel during that calendar year. This list will constitute the
``arbitrator list'' referred to in this subchapter. With respect to
persons on the arbitrator list, the Librarian will make available for
copying and inspection the information provided under paragraph (a) of
this section.
Sec. 251.4 Arbitrator lists: Objections.
(a) In the case of a rate adjustment proceeding, any party to a
proceeding may, during the 30-day period specified in Sec. 251.63, file
an objection with the Librarian of Congress to one or more of the
persons contained on the arbitrator list for that proceeding. Such
objection shall plainly state the grounds and reasons for each person
claimed to be objectionable.
(b) In the case of a royalty distribution proceeding, any party to
the proceeding may, during the 30-day time period specified in
Sec. 251.45(a), file an objection with the Librarian of Congress to one
or more of the persons contained on the arbitrator list for the
proceeding. Such objection shall plainly state the grounds and reasons
for each person claimed to be objectionable.
Sec. 251.5 Qualifications of the arbitrators.
In order to serve as an arbitrator to a Copyright Arbitration
Royalty Panel, a person must, at a minimum, have the following
qualifications:
(a) Admitted to the practice of law in any state, territory, trust
territory, or possession of the United States.
(b) Ten or more years of legal practice.
(c) Experience in conducting arbitration proceedings or
facilitating the resolution and settlement of disputes.
Sec. 251.6 Composition and selection of Copyright Arbitration Royalty
Panels.
(a) Within ten days after publication of a notice in the Federal
Register initiating arbitration proceedings under this subchapter, the
Librarian of Congress will, upon recommendation of the Register of
Copyrights, select two arbitrators from the arbitrator list for that
calendar year.
(b) The two arbitrators so selected shall, within 10 days of their
selection, choose a third arbitrator from the same arbitrator list. The
third arbitrator shall serve as the chairperson of the panel during the
course of the proceedings.
(c) If the two arbitrators fail to agree upon the selection of the
third, the Librarian will promptly select the third arbitrator from the
same arbitrator list.
(d) The third arbitrator so chosen shall serve as the chairperson
of the panel during the course of the proceeding. In all matters,
procedural or substantive, the chairperson shall act according to the
majority wishes of the panel.
(e) Two arbitrators shall constitute a quorum necessary to the
determination of any proceeding.
(f) If, before the commencement of hearings in a proceeding, one or
more of the arbitrators is unable to continue service on the CARP, the
Librarian will suspend the proceeding as provided by Sec. 251.8, and
will inaugurate a procedure to bring the CARP up to the full complement
of three arbitrators. Where one or two vacancies exist, and either or
both of the vacant seats were previously occupied by arbitrators
selected by the Librarian, the Librarian will select the necessary
replacements from the current arbitrator list. If there is one vacancy,
and it was previously occupied by the chairperson, the two remaining
arbitrators shall select the replacement from the arbitrator list, and
the person chosen shall serve as chairperson. If there are two vacant
seats, and one of them was previously occupied by the chairperson, the
Librarian will select one replacement from the arbitrator list, and
that person shall join with the remaining arbitrator to choose the
replacement, who shall serve as chairperson.
(g) After hearings have commenced, the Librarian will not suspend
the proceedings or inaugurate a replacement procedure unless it is
necessary in order for the CARP to have a quorum. If the hearing is
underway and two arbitrators are unable to continue service, or if the
hearing had been proceeding with two arbitrators and one of them is no
longer able to serve, the Librarian will suspend the proceedings under
Sec. 251.8 and seek the unanimous written agreement of the parties to
the proceeding for the Librarian to select a replacement. In the
absence of such an agreement, the Librarian will terminate the
proceeding. If such agreement is obtained, the Librarian will select
one arbitrator from the arbitrator list.
(h) If, after hearings have commenced, the chairperson of the CARP
is no longer able to serve, the Librarian will ask the two remaining
arbitrators, or the one remaining arbitrator and the newly-selected
arbitrator, to agree between themselves which of them will serve as
chairperson. In the absence of such an agreement, the Librarian will
terminate the proceeding.
Sec. 251.7 Actions of Copyright Arbitration Royalty Panels.
Any action of a Copyright Arbitration Royalty Panel requiring
publication in the Federal Register according to 17 U.S.C. or the rules
and regulations of this subchapter shall be published under the
authority of the Librarian of Congress and the Register of Copyrights.
Under no circumstances shall a CARP engage in rulemaking designed to
amend, supplement, or supersede any of the rules and regulations of
this subchapter, or seek to have any such action published in the
Federal Register.
Sec. 251.8 Suspension of proceedings.
(a) Where it becomes necessary to replace a selected arbitrator
under Sec. 251.6 or to remove and replace a selected arbitrator under
subpart D of this part, the Librarian will order a suspension of any
ongoing hearing or other proceeding by notice in writing to all
parties. Immediately after issuing the order of suspension, and without
delay, the Librarian will take the necessary steps to replace the
arbitrator or arbitrators, and upon such replacement will issue an
order, by notice in writing to all parties, resuming the proceeding
from the time and point at which it was suspended.
(b) Where, for any other reason, such as a serious medical or
family emergency affecting an arbitrator, the Librarian considers a
suspension of a proceeding necessary and fully justified, he may, with
the unanimous written consent of all parties to the proceeding, order a
suspension of the proceeding for a stated period not to exceed one
month.
(c) Any suspension under this section shall result in a complete
cessation of all aspects of the proceeding, including the running of
any period provided by statute for the completion of the proceeding.
Subpart B--Public Access to Copyright Arbitration Royalty Panel
Meetings
Sec. 251.11 Open meetings.
(a) All meetings of a Copyright Arbitration Royalty Panel shall be
open to the public, with the exception of meetings that are listed in
Sec. 251.13.
(b) At the beginning of each proceeding, the CARP shall develop the
original schedule of the proceeding which shall be published in the
Federal Register at least seven calendar days in advance of the first
meeting. Such announcement shall state the times, dates, and place of
the meetings, the testimony to be heard, whether any of the meetings
are to be closed, and, if so, which ones, and the name and telephone
number of the person to contact for further information.
(c) If changes are made to the original schedule, they will be
announced in open meeting and issued as orders to the parties
participating in the proceeding, and the changes will be noted in the
docket file of the proceeding.
In addition, the contact person for the proceeding shall make any
additional efforts to publicize the change as are practicable.
(d) If it is decided that the publication of the original schedule
must be made on shorter notice than seven days, that decision must be
made by a recorded vote of the panel and included in the announcement.
Sec. 251.12 Conduct of open meetings.
Meetings of a Copyright Arbitration Royalty Panel will be conducted
in a manner to ensure the greatest degree of openness possible.
Reasonable access for the public will be provided at all public
sessions. Any person may take photographs, and make audio or video
recordings of the proceedings, so long as the panel is informed in
advance. The chairperson has the discretion to regulate the time,
place, and manner of the taking of photographs or the audio or video
recording of the proceedings to ensure the order and decorum of the
proceedings. The right of the public to be present does not include the
right to participate or make comments.
Sec. 251.13 Closed meetings.
In the following circumstances, a Copyright Arbitration Royalty
Panel may close its meetings or withhold information from the public:
(a) If the matter to be discussed has been specifically authorized
to be kept secret by Executive Order, in the interests of national
defense or foreign policy; or
(b) If the matter relates solely to the internal practices of a
Copyright Arbitration Royalty Panel; or
(c) If the matter has been specifically exempted from disclosure by
statute (other than 5 U.S.C. 552) and there is no discretion on the
issue; or
(d) If the matter involves privileged or confidential trade secrets
or financial information; or
(e) If the result might be to accuse any person of a crime or
formally censure him or her; or
(f) If there would be clearly unwarranted invasion of personal
privacy; or
(g) If there would be disclosure of investigatory records compiled
for law enforcement, or information that if written would be contained
in such records, and to the extent disclosure would:
(1) Interfere with enforcement proceedings; or
(2) Deprive a person of the right to a fair trial or impartial
adjudication; or
(3) Constitute an unwarranted invasion of personal privacy; or
(4) Disclose the identity of a confidential source or, in the case
of a criminal investigation or a national security intelligence
investigation, disclose confidential information furnished only by a
confidential source; or
(5) Disclose investigative techniques and procedures; or
(6) Endanger the life or safety of law enforcement personnel.
(h) If premature disclosure of the information would frustrate a
Copyright Arbitration Royalty Panel's action, unless the panel has
already disclosed the concept or nature of the proposed action, or is
required by law to make disclosure before taking final action; or
(i) If the matter concerns a CARP's participation in a civil action
or proceeding or in an action in a foreign court or international
tribunal, or an arbitration, or a particular case of formal agency
adjudication pursuant to 5 U.S.C. 554, or otherwise involving a
determination on the record after opportunity for a hearing; or
(j) If a motion or objection has been raised in an open meeting and
the panel determines that it is in the best interests of the proceeding
to deliberate on such motion or objection in closed session.
Sec. 251.14 Procedure for closed meetings.
(a) Meetings may be closed, or information withheld from the
public, only by a recorded vote of a majority of arbitrators of a
Copyright Arbitration Royalty Panel. Each question, either to close a
meeting or to withhold information, must be voted on separately, unless
a series of meetings is involved, in which case the CARP may vote to
keep the discussions closed for 30 days, starting from the first
meetings. If the CARP feels that information about a closed meeting
must be withheld, the decision to do so must also be the subject of a
recorded vote.
(b) Before a discussion to close a meeting or withhold information,
the chairperson of a CARP must certify that such an action is
permissible, and the chairperson shall cite the appropriate exemption
under Sec. 251.13. This certification shall be included in the
announcement of the meeting and be maintained as part of the record of
proceedings of that CARP.
(c) Following such a vote, the following information shall be
published in the Federal Register as soon as possible:
(1) The vote of each arbitrator; and
(2) The appropriate exemption under Sec. 251.13; and
(3) A list of all persons expected to attend the meeting and their
affiliation.
Sec. 251.15 Transcripts of closed meetings.
(a) All meetings closed to the public shall be subject either to a
complete transcript or, in the case of Sec. 251.13(h) and at the
discretion of the Copyright Arbitration Royalty Panel, detailed
minutes. Detailed minutes shall describe all matters discussed,
identify all documents considered, summarize action taken as well as
the reasons for it, and record all roll call votes as well as any views
expressed.
(b) Such transcripts or minutes shall be kept by the Copyright
Office for at least two years, or for at least one year after the
conclusion of the proceedings, whichever is later. Any portion of
transcripts of meetings which the chairperson of a CARP does not feel
is exempt from disclosure under Sec. 251.13 will ordinarily be
available to the public within 20 working days of the meeting.
Transcripts or minutes of closed meetings will be reviewed by the
chairperson at the end of the proceedings of the panel and, if at that
time the chairperson determines that they should be disclosed, he or
she will resubmit the question to the CARP to gain authorization for
their disclosure.
Sec. 251.16 Requests to open or close meetings.
(a) Any person may request a Copyright Arbitration Royalty Panel to
open or close a meeting or disclose or withhold information. Such
request must be captioned ``Request to Open'' or ``Request to Close'' a
meeting on a specified date concerning a specific subject. The person
making the request must state his or her reasons, and include his or
her name, address, and telephone number.
(b) In the case of a request to open a meeting that a CARP has
previously voted closed, the panel must receive the request within 3
working days of the meeting's announcement. Otherwise the request will
not be heeded, and the person making the request will be so notified.
An original and three copies of the request must be submitted.
(c) For a CARP to act on a request to open or close a meeting, the
question must be brought to a vote before the panel. If the request is
granted, an amended meeting announcement will be issued and the person
making the request notified. If a vote is not taken, or if after a vote
the request is denied, said person will also be notified promptly.
Subpart C--Public Access to and Inspection of Records
Sec. 251.21 Public records.
(a) All official determinations of a Copyright Arbitration Royalty
Panel will be published in the Federal Register in accordance with
Sec. 251.7 and include the relevant facts and reasons for those
determinations.
(b) All records of a CARP, and all records of the Librarian of
Congress assembled and/or created under 17 U.S.C. 801 and 802, are
available for inspection and copying at the address provided in
Sec. 251.1 with the exception of:
(1) Records that relate solely to the internal personnel rules and
practices of the Copyright Office or the Library of Congress;
(2) Records exempted by statute from disclosure;
(3) Interoffice memoranda or correspondence not available by law
except to a party in litigation with a CARP, the Copyright Office, or
the Library of Congress;
(4) Personnel, medical, or similar files whose disclosure would be
an invasion of personal privacy;
(5) Communications among arbitrators of a CARP concerning the
drafting of decisions, opinions, reports, and findings on any CARP
matter or proceeding;
(6) Communications among the Librarian of Congress and staff of the
Copyright Office or Library of Congress concerning decisions, opinions,
reports, selection of arbitrators, or findings on any matter or
proceeding conducted under 17 U.S.C. chapter 8;
(7) Offers of settlement that have not been accepted, unless they
have been made public by the offeror;
(8) Records not herein listed but which may be withheld as
``exempted'' if a CARP or the Librarian of Congress finds compelling
reasons for such action.
Sec. 251.22 Public access.
(a) Location of Records. All of the following records relating to
rate adjustment and distribution proceedings under this subchapter
shall be maintained at the Copyright Office:
(1) Records required to be filed with the Copyright Office; or
(2) Records submitted to or produced by the Copyright Office or
Library of Congress under 17 U.S.C. 801 and 802, or
(3) Records submitted to or produced by a Copyright Arbitration
Royalty Panel during the course of a concluded proceeding. In the case
of records submitted to or produced by a CARP that is currently
conducting a proceeding, such records shall be maintained by the
chairperson of that panel at the location of the hearing or at a
location specified by the panel. Upon conclusion of the proceeding, all
records shall be delivered by the chairperson to the Copyright Office.
(b) Requesting information. Requests for information or access to
records described in Sec. 251.21 shall be directed to the Copyright
Office at the address listed in Sec. 251.1. No requests shall be
directed to or accepted by a Copyright Arbitration Royalty Panel. In
the case of records in the possession of a CARP, the Copyright Office
shall make arrangements with the panel for access and copying by the
person making the request.
(c) Fees. Fees for photocopies of CARP or Copyright Office records
are $0.40 per page. Fees for searching for records, certification of
documents, and other costs incurred are as provided in 17 U.S.C. 705,
708.
Sec. 251.23 FOIA and Privacy Act.
Freedom of Information Act and Privacy Act provisions applicable to
CARP proceedings can be found in parts 203 and 204 of subchapter A of
this chapter.
Subpart D--Standards of Conduct
Sec. 251.30 Basic obligations of arbitrators.
(a) Definitions. For purposes of these regulations, the following
terms shall have the meanings given in this subsection:
(1) A ``selected arbitrator'' is a person named by the Librarian of
Congress, or by other selected arbitrators, for service on a particular
CARP panel, in accordance with Sec. 251.6 of these regulations;
(2) A ``listed arbitrator'' is a person named in the ``arbitration
list'' published in accordance with Sec. 251.3 of these regulations.
(b) General principles applicable to arbitrators. Selected
arbitrators are persons acting on behalf of the United States, and the
following general principles apply to them. Where a situation is not
covered by standards set forth specifically in this subpart, selected
arbitrators shall apply these general principles in all cases in
determining whether their conduct is proper. Listed arbitrators shall
apply these principles where applicable.
(1) Arbitrators are engaged in a matter of trust that requires them
to place ethical and legal principles above private gain.
(2) Arbitrators shall not hold financial interests that conflict
with the conscientious performance of their service.
(3) Arbitrators shall not engage in financial transactions using
nonpublic information or allow the improper use of such information to
further any private interest.
(4) Selected arbitrators shall not solicit or accept any gift or
other item of monetary value from any person or entity whose interests
may be affected by the arbitrators' decisions. Listed arbitrators may
accept gifts of nominal value or gifts from friends and family as
specified in Sec. 251.34(b).
(5) Arbitrators shall put forth their honest efforts in the
performance of their service.
(6) Arbitrators shall act impartially and not give preferential
treatment to any individual, organization, or entity whose interests
may be affected by the arbitrators' decisions.
(7) Arbitrators shall not engage in outside employment or
activities, including seeking or negotiating for employment, that
conflicts with the performance of their service.
(8) Arbitrators shall endeavor to avoid any actions creating the
appearance that they are violating the law or the ethical standards set
forth in this subpart.
(9) Arbitrators shall maintain order and decorum in the
proceedings, be patient, dignified, and courteous to the parties,
witnesses, and their representatives, and dispose promptly the business
before them.
Sec. 251.31 Financial interests.
(a) No selected arbitrator shall have a direct or indirect
financial interest--
(1) in the case of a distribution proceeding, in any claimant to
the proceeding whether or not in a voluntary settlement agreement, or
any copyright owner who receives royalties from such claimants because
of their representation;
(2) in the case of a rate adjustment proceeding, in any individual,
organization or entity that would be affected by the outcome of the
proceeding.
(b) ``Direct or indirect financial interest'' shall include: being
employed by, being a consultant to, being a representative or agent
for, being a member or affiliate of, being a partner of, holding any
office in, owning any stocks, bonds, or other securities, or deriving
any income from the prohibited entity.
(c) ``Direct or indirect financial interest'' shall not include--
(1) owning shares in any stock or bond mutual fund or blind trust
which might have an interest in a prohibited entity but whose decisions
to invest or sell is not under the control of the selected arbitrator,
or
(2) receiving any post-employment benefit such as health insurance
or a pension so long as the benefit would not be affected by the
outcome of the proceeding.
(d) For the purposes of this section, the financial interest of the
following persons will serve to disqualify the selected arbitrator to
the same extent as if they were the arbitrator's own interests:
(1) the arbitrator's spouse;
(2) the arbitrator's minor child;
(3) the arbitrator's general partner; or
(4) an organization or entity which the arbitrator serves as
officer, director, trustee, general partner or employee.
Sec. 251.32 Financial disclosure statement.
(a) Each year, within one month of publication in the Federal
Register of the list of available arbitrators, each listed arbitrator
shall file with the Librarian of Congress a confidential financial
disclosure statement as provided by the Library of Congress, which
statement shall be reviewed by the Librarian and designated Library
staff to determine what conflicts of interest, if any, exist according
to Sec. 251.30.
(b) If any conflicts of interest do exist, the Librarian shall not
choose that person for the proceeding for which he or she has the
financial conflict, except--
(1) the listed arbitrator may divest himself or herself of the
interest that caused the disqualification, and become qualified to
serve, or
(2) the listed arbitrator may disclose on the record the conflict
of interest causing disqualification and may ask the parties to
consider whether to allow him or her to serve in the proceeding. Any
agreement by the parties to allow the listed arbitrator to serve shall
be unanimous and shall be incorporated into the record of the
proceeding.
(c) At such time as the two selected arbitrators choose a third
arbitrator, they shall consult with the Librarian to determine if any
conflicts of interest exist for the third arbitrator. If, in the
opinion of the Librarian of Congress, any conflicts of interest do
exist, the two selected arbitrators shall be asked to choose another
arbitrator who has no conflict of interest.
(d) Within one week of the selection of the CARP panel, the three
selected arbitrators shall file with the Librarian an updated
confidential financial disclosure form or, if there are any changes in
the arbitrator's financial interests, a statement to that effect. If
any conflicts of interest are revealed on the updated form, the
Librarian will suspend the proceeding and replace the selected
arbitrator with another arbitrator from the arbitrator list in
accordance with the provision of Sec. 251.6.
(e) During the following periods of time, the selected arbitrators
shall be obliged to inform the Librarian immediately of any change in
their financial interests that would reasonably raise a conflict of
interest--
(1) during the period beginning with the filing of the updated
disclosure form or statement required by paragraph (d) of this section
and ending with the submission of the panel's report to the Librarian,
and
(2) if the same arbitrator or arbitrators are recalled to serve
following a court-ordered remand, during the time the panel is
reconvened.
(f) If the Librarian determines that an arbitrator has failed to
give timely notice of a financial interest constituting a conflict of
interest, or that the arbitrator in fact has a conflict of interest,
the Librarian shall remove that arbitrator from the proceeding.
Sec. 251.33. Ex parte communications.
(a) Communications with Librarian or Register. No person outside
the Library of Congress shall engage in ex parte communication with the
Librarian of Congress or the Register of Copyrights on the merit or
status of any matter, procedural or substantive, relating to the
distribution of royalty fees, the adjustment of royalty rates or the
status of digital audio recording devices, at any time whatsoever. This
prohibition shall not apply to statements concerning public policies
related to royalty fee distribution and rate adjustment so long as they
are unrelated to the merits of any particular proceeding.
(b) Selected arbitrators. No interested party shall engage in, or
cause someone else to engage in, ex parte communications with the
selected arbitrators in a proceeding for any reason whatsoever from the
time of their selection to the time of the submission of their report
to the Librarian, and, in the case of a remand, from the time of their
reconvening to the time of their submission of their report to the
Librarian.
(c) Listed arbitrators. No interested party shall engage in, or
cause someone else to engage in, ex parte communications with any
person listed by the Librarian of Congress as qualified to serve as a
arbitrator about the merits of any past, pending, or future proceeding
relating to the distribution of royalty fees or the adjustment of
royalty rates. This prohibition applies during any period when the
individual appears on a current arbitrator list.
(d) Library and Copyright Office personnel. No person outside the
Library of Congress (including the Copyright Office staff) shall engage
in ex parte communications with any employee of the Library of Congress
about the substantive merits of any past, pending, or future proceeding
relating to the distribution of royalty fees or the adjustment of
royalty rates. This prohibition does not apply to procedural inquiries
such as scheduling, filing requirements, status requests, or requests
for public information.
(e) Outside contacts. The Librarian of Congress, the Register of
Copyrights, the selected arbitrators, the listed arbitrators, and the
employees of the Library of Congress described in paragraphs (a)
through (d) of this section, shall not initiate or continue the
prohibited communications that apply to them.
(f) Responsibilities of recipients of communication. (1) Whoever
receives a prohibited communication shall immediately end it and place
on the public record of the applicable proceeding: (i) all such written
or recorded communications;
(ii) memoranda stating the substance of all such oral
communications; and
(iii) all written responses, and memoranda stating the substance of
all oral responses, to the materials described in paragraphs (f)(1) (i)
and (ii) of this section.
(2) The materials described in this paragraph (f) shall not be
considered part of the record for the purposes of decision unless
introduced into evidence by one of the parties.
(g) Action by Librarian. When notice of a prohibited communication
described in paragraphs (a) through (d) of this section has been placed
in the record of a proceeding, either the Librarian of Congress or the
CARP may require the party causing the prohibited communication to show
cause why his or her claim or interest in the proceeding should not be
dismissed, denied, or otherwise adversely affected.
Sec. 251.34 Gifts and other things of monetary value.
(a) Selected arbitrators. From the time of selection to the time of
the submission of the arbitration panel's report, whether during the
initial proceeding or during a court-ordered remand, no selected
arbitrator shall solicit or accept, directly or indirectly, any gift,
gratuity, favor, travel, entertainment, service, loan, or any other
thing of monetary value from a person or organization that has an
interest that would be affected by the outcome of the proceeding,
regardless of whether the offer was intended to affect the outcome of
the proceeding.
(b) Listed arbitrators. No listed arbitrator shall solicit or
accept, directly or indirectly, any gift, gratuity, favor, travel,
entertainment, service, loan, or any other thing of monetary value from
a person or organization that has an interest in any proceeding for
which the arbitrator might be selected, regardless of whether the offer
was intended to affect the outcome of the proceeding, except--
(1) a listed arbitrator may accept unsolicited gifts having an
aggregate market value of $20 or less per occasion, as long as the
aggregate market value of individual gifts received from any one source
does not exceed $50 in a calendar year, or
(2) a listed arbitrator may accept a gift given under circumstances
in which it is clear that the gift is motivated by a family
relationship or personal friendship rather than the potential of the
listed arbitrator to decide a future proceeding.
(c) A gift that is solicited or accepted indirectly includes a
gift--
(1) given with the arbitrator's knowledge and acquiescence to the
arbitrator's parent, sibling, spouse, child, or dependent relative
because of that person's relationship to the arbitrator, or
(2) given to any other person, including any charitable
organization, on the basis of designation, recommendation, or other
specification by the arbitrator.
Sec. 251.35 Outside employment and other activities.
(a) From the time of selection to the time when all possibility of
being selected to serve on a court-ordered remand is ended, no
arbitrator shall--
(1) engage in any outside business or other activity that would
cause a reasonable person to question the arbitrator's ability to
render an impartial decision;
(2) accept any speaking engagement, whether paid or unpaid, related
to the proceeding or sponsored by a party that would be affected by the
outcome of the proceeding; or
(3) accept any honorarium, whether directly or indirectly paid, for
any appearance, speech, or article related to the proceeding or offered
by a party who would be affected by the outcome of the proceeding.
(b) Honoraria indirectly paid include payments--
(1) given with the arbitrator's knowledge and acquiescence to the
arbitrator's parent, sibling, spouse, child, or dependent relative
because of that person's relationship to the arbitrator, or
(2) given to any other person, including any charitable
organization, on the basis of designation, recommendation, or other
specification by the arbitrator.
Sec. 251.36 Pre-arbitration and post-arbitration employment
restrictions.
(a) The Librarian of Congress will not select any arbitrator who
was employed at any time during the period of five years immediately
preceding the date of that arbitrator's selection by any party to, or
any person, organization or entity with a financial interest in, the
proceeding for which he or she is being considered. However, a listed
arbitrator may disclose on the record the past employment causing
disqualification and may ask the parties to consider whether to allow
him or her to serve in the proceeding, in which case any agreement by
the parties to allow the listed arbitrator to serve shall be unanimous
and shall be incorporated into the record of the proceeding.
(b) No arbitrator may arrange for future employment with any party
to, or any person, organization, or entity with a financial interest
in, the proceeding in which he or she is serving.
(c) For a period of three years from the date of submission of the
arbitration panel's report to the Librarian, no arbitrator may enter
into employment with any party to, or any person, organization, or
entity with a financial interest in, the particular proceeding in which
he or she served.
(d) For purposes of this section, ``employed'' or ``employment''
means any business relationship involving the provision of personal
services including, but not limited to, personal services as an
officer, director, employee, agent, attorney, consultant, contractor,
general partner or trustee, but does not include serving as an
arbitrator, mediator, or neutral engaged in alternative dispute
resolution.
Sec. 251.37 Use of nonpublic information.
(a) Unless required by law, no arbitrator shall disclose in any
manner any information contained in filings, pleadings, or evidence
that the arbitration panel has ruled to be confidential in nature.
(b) Unless required by law, no arbitrator shall disclose in any
manner--
(1) intra-panel communications or communications between the
Library of Congress and the panel intended to be confidential;
(2) draft interlocutory rulings or draft decisions; or
(3) the CARP report before its submission to the Librarian of
Congress.
(c) No arbitrator shall engage in a financial transaction using
nonpublic information, or allow the improper use of nonpublic
information, to further his or her private interest or that of another,
whether through advice or recommendation, or by knowing unauthorized
disclosure.
Sec. 251.38 Billing and commitment to standards.
(a) Arbitrators are bound by the hourly or daily fee they proposed
to the Librarian of Congress when their names were submitted to be
listed under Sec. 251.3, and shall not bill in excess of their proposed
charges.
(b) Arbitrators shall not charge the parties any expense in
addition to their hourly or daily charge, except, in the case of an
arbitrator who resides outside the Washington, DC metropolitan area,
travel, lodging, and meals not to exceed the government rate.
(c) When submitting their statement of costs to the parties under
Sec. 251.54, arbitrators shall include a detailed account of their
charges, including the work performed during each hour or day charged.
(d) Except for support services provided by the Library of
Congress, arbitrators shall perform their own work, including research,
analysis of the record, and decision-writing.
(e) At the time of selection, arbitrators shall sign an agreement
stating that they will abide by all the terms therein, including all of
the standards of conduct and billing restrictions specified in this
subpart. Any arbitrator who does not sign the agreement will not be
selected to serve.
Sec. 251.39 Remedies.
In addition to those provided above, remedies for the violation of
the standards of conduct of this section may include, but are not
limited to, the following--
(a) in the case of a selected arbitrator,
(1) removal of the arbitrator from the proceeding;
(2) permanent removal of the arbitrator's name from the current and
any future list of available arbitrators published by the Librarian;
(3) referral of the matter to the bar of which the arbitrator is a
member.
(b) in the case of a listed but not selected arbitrator--
(1) permanent removal of the arbitrator's name from the current and
any future list of available arbitrators published by the Librarian;
(2) referral of the matter to the bar of which the listed
arbitrator is a member.
(c) in the case of an interested party or individual who engaged in
the ethical violation--
(1) referral of the matter to the bar or professional association
of which the interested individual is a member;
(2) barring the offending individual from current and/or future
appearances before the CARP;
(3) designation of an issue in the current or in a future
proceeding as to whether the party's interest should not be dismissed,
denied, or otherwise adversely affected.
(d) In all applicable matters of violations of standards of
conduct, the Librarian may refer the matter to the Department of
Justice, or other legal authority of competent jurisdiction, for
criminal prosecution.
Subpart E--Procedures of Copyright Arbitration Royalty Panels
Sec. 251.40 Scope.
This subpart governs the proceedings of Copyright Arbitration
Royalty Panels convened under 17 U.S.C. 803 for the adjustment of
royalty rates and distribution of royalty fees. This subpart does not
apply to other arbitration proceedings specified by 17 U.S.C., or to
actions or rulemakings of the Librarian of Congress or the Register of
Copyrights, except where expressly provided in the provisions of this
subpart.
Sec. 251.41 Formal hearings.
(a) The formal hearings that will be conducted under the rules of
this subpart are rate adjustment hearings and royalty fee distribution
hearings. All parties intending to participate in a hearing of a
Copyright Arbitration Royalty Panel must file a notice of their
intention. A CARP may also, on its own motion or on the petition of an
interested party, hold other proceedings it considers necessary to the
exercise of its functions, subject to the provisions of Sec. 251.7. All
such proceedings will be governed by the rules of this subpart.
(b) During the 30-day period specified in Sec. 251.45(a) for filing
motions in a distribution proceeding, or during the 30-day period
described in Sec. 251.63 for settling rate differences, as appropriate,
any party may petition the Librarian of Congress to dispense with
formal hearings, and have the CARP panel decide the controversy or rate
adjustment on the basis of written pleadings. The Librarian, upon
recommendation of the Register of Copyrights, may rule on the petition
or designate it as an issue to be ruled upon by the CARP. The petition
may be granted if--
(1) there is no genuine issue as to any material fact, or
(2) all parties to the controversy agree with the petition.
Sec. 251.42 Suspension or waiver of rules.
For purposes of an individual proceeding, the provisions of this
subpart may be suspended or waived, in whole or in part, by a Copyright
Arbitration Royalty Panel upon a showing of good cause, subject to the
provisions of Sec. 251.7. Such suspension or waiver shall apply only to
the proceeding of the CARP taking that action, and shall not be binding
on any other panel or proceeding. Where procedures have not been
specifically prescribed in this subpart, and subject to Sec. 251.7, the
panel shall follow procedures consistent with 5 U.S.C. chapter 5,
subchapter II.
Sec. 251.43 Written cases.
(a) The proceedings of a Copyright Arbitration Royalty Panel for
rate adjustment or royalty fee distribution shall begin with the filing
of written direct cases of the parties who have filed a notice of
intent to participate in the hearing.
(b) The written direct case shall include all testimony, including
each witness's background and qualifications, along with all the
exhibits to be presented in the direct case.
(c) Each party may designate a portion of past records, including
records of the Copyright Royalty Tribunal, that it wants included in
its direct case. Complete testimony of each witness whose testimony is
designated (i.e., direct, cross and redirect) must be referenced.
(d) In the case of a royalty fee distribution proceeding, each
party must state in the written direct case its percentage or dollar
claim to the fund. In the case of a rate adjustment proceeding, each
party must state its requested rate. No party will be precluded from
revising its claim or its requested rate at any time during the
proceeding up to the filing of the proposed findings of fact and
conclusions of law.
(e) No evidence, including exhibits, may be submitted in the
written direct case without a sponsoring witness, except where the CARP
panel has taken official notice, or in the case of incorporation by
reference of past records, or for good cause shown.
(f) Written rebuttal cases of the parties shall be filed at a time
designated by a CARP upon conclusion of the hearing of the direct case,
in the same form and manner as the direct case, except that the claim
or the requested rate shall not have to be included if it has not
changed from the direct case.
Sec. 251.44 Filing and service of written cases and pleadings.
(a) Copies filed with a Copyright Arbitration Royalty Panel. In all
filings with a Copyright Arbitration Royalty Panel, the submitting
party shall deliver, in such a fashion as the panel shall direct, an
original and three copies to the panel. The submitting party shall also
deliver one copy to the Copyright Office at the address listed in
Sec. 251.1. In the case of exhibits whose bulk or whose cost of
reproduction would unnecessarily encumber the record or burden the
party, a CARP may reduce the number of copies required by the panel,
but a complete copy must still be submitted to the Copyright Office. In
no case shall a party tender any written case or pleading by facsimile
transmission.
(b) Copies filed with the Librarian of Congress. In all pleadings
filed with the Librarian of Congress, the submitting party shall
deliver an original and five copies to the Copyright Office. In no case
shall a party tender any pleading by facsimile transmission.
(c) English language translations. In all filings with a CARP or
the Librarian of Congress, each submission that is in a language other
than English shall be accompanied by an English-language translation,
duly verified under oath to be a true translation. Any other party to
the proceeding may, in response, submit its own English-language
translation, similarly verified.
(d) Affidavits. The testimony of each witness in a party's written
case, direct or rebuttal, shall be accompanied by an affidavit or a
declaration made pursuant to 28 U.S.C. 1746 supporting the testimony.
(e) Subscription and verification. (1) The original of all
documents filed by any party represented by counsel shall be signed by
at least one attorney of record and shall list the attorney's address
and telephone number. All copies shall be conformed. Except for
English-language translations, written cases, or when otherwise
required, documents signed by the attorney for a party need not be
verified or accompanied by an affidavit. The signature of an attorney
constitutes certification that to the best of his or her knowledge and
belief there is good ground to support it, and that it has not been
interposed for purposes of delay.
(2) The original of all documents filed by a party not represented
by counsel shall be both signed and verified by that party and list
that party's address and telephone number.
(3) The original of a document that is not signed, or is signed
with the intent to defeat the purpose of this section, may be stricken
as sham and false, and the matter shall proceed as though the document
had not been filed.
(f) Service. The Librarian of Congress shall compile and distribute
to those parties who have filed a notice of intent to participate, the
official service list of the proceeding, which shall be composed of the
names and addresses of the representatives of all the parties to the
proceeding. In all filings with a CARP or the Librarian of Congress, a
copy shall be served upon counsel of all other parties identified in
the service list, or, if the party is unrepresented by counsel, upon
the party itself. Proof of service shall accompany the filing with the
CARP panel or the Copyright Office. If a party files a pleading that
requests or would require action by the panel or the Librarian within
10 or fewer days after the filing, it must serve the pleading upon all
other counsel or parties by means no slower than overnight express mail
on the same day the pleading is filed. Parties shall notify the
Librarian of any change in the name or address to which service shall
be made, and shall serve a copy of such notification on all parties and
the CARP panel.
(g) Oppositions and replies. Except as otherwise provided in these
rules or by the Librarian of Congress or a CARP, oppositions to motions
shall be filed within ten business days of the date of service of the
motion, and replies to oppositions shall be filed within five business
days of the date of service of the opposition. The date of service
shall be deemed to be the third business day following service by mail
or the next business day following service by overnight delivery, by
hand, or by telefacsimile.
Sec. 251.45 Precontroversy motions, and discovery.
(a) Precontroversy motions and objections. In the case of a royalty
fee distribution proceeding, the Librarian of Congress shall, in the
notice asking the claimants whether any controversies exist concerning
distribution of the royalty funds, designate a 30-day period in which
any party to the proceeding may file with the Librarian of Congress
objections to, or motions to dismiss, any party's royalty claim, or
motions for declaratory rulings, or for procedural or evidentiary
rulings, on any proper ground. In the case of a rate adjustment
proceeding, the 30-day period shall correspond with the 30-day period
specified in Sec. 251.63 for settling rate differences.
(b) Any party to the proceeding wishing to file a response to such
motion or objection may do so within two weeks. The Librarian, upon
recommendation of the Register of Copyrights, shall rule on the motion
or objection prior to the initiation of an arbitration proceeding, or
may designate the motion or objection as an issue for the panel to rule
on.
(c) Discovery and motions filed with a Copyright Arbitration
Royalty Panel. (1) A Copyright Arbitration Royalty Panel shall
designate a period following the filing of the written direct and
rebuttal cases in which parties may request of an opposing party
nonprivileged underlying documents related to the written exhibits and
testimony.
(2) After the filing of the written cases, any party may file with
a CARP objections to any portion of another party's written case on any
proper ground including, without limitation, relevance, competency, and
failure to provide underlying documents. If an objection is apparent
from the face of a written case, that objection must be raised or the
party may thereafter be precluded from raising such an objection.
(d) Amended filings and discovery. In the case of objections filed
with either the Librarian of Congress or a CARP, each party may amend
its claim, petition, written case, or direct evidence to respond to the
objections raised by other parties, or to the requests of either the
Librarian or a panel. Such amendments must be properly filed with the
Librarian or the CARP, wherever appropriate, and exchanged with all
parties. All parties shall be given a reasonable opportunity to conduct
discovery on the amended filings.
Sec. 251.46 Conduct of hearings: Role of arbitrators.
(a) At the opening of a hearing conducted by a Copyright
Arbitration Royalty Panel, the chairperson shall announce the subject
under consideration.
(b) Only the arbitrators of a CARP, or counsel as provided in this
chapter, shall question witnesses.
(c) Subject to the vote of the CARP, the chairperson shall have
responsibility for:
(1) Setting the order of presentation of evidence and appearance of
witnesses; 6I11(2) Administering oaths and affirmations to all
witnesses;
(3) Announcing the CARP panel's ruling on objections and motions
and all rulings with respect to introducing or excluding documentary or
other evidence. In all cases, whether there are an even or odd number
of arbitrators sitting at the hearing, it takes a majority vote to
grant a motion or sustain an objection. A split vote will result in the
denial of the motion or the overruling of the objection;
(4) Regulating the course of the proceedings and the decorum of the
parties and their counsel, and insuring that the proceedings are fair
and impartial; and
(5) Announcing the schedule of subsequent hearings.
(d) Each arbitrator may examine any witness or call upon any party
for the production of additional evidence at any time. Further
examination, cross-examination, or redirect examination by counsel
relevant to the inquiry initiated by an arbitrator may be allowed by a
CARP panel, but only to the limited extent that it is directly
responsive to the inquiry of the arbitrator.
Sec. 251.47 Conduct of hearings: Witnesses and counsel.
(a) With all due regard for the convenience of the witnesses,
proceedings shall be conducted as expeditiously as possible.
(b) In each distribution or rate adjustment proceeding, each party
may present its opening statement with the presentation of its direct
case.
(c) All witnesses shall be required to take an oath or affirmation
before testifying; however, attorneys who do not appear as witnesses
shall not be required to do so.
(d) Witnesses shall first be examined by their attorney and by
opposing attorneys for their competency to support their written
testimony and exhibits (voir dire).
(e) Witnesses may then summarize, highlight or read their
testimony. However, witnesses may not materially supplement or alter
their written testimony except to correct it, unless the CARP panel
expands the witness's testimony to complete the record.
(f) Parties are entitled to raise objections to evidence on any
proper ground during the course of the hearing, including an objection
that an opposing party has not furnished nonprivileged underlying
documents. However, they may not raise objections that were apparent
from the face of a written case and could have been raised before the
hearing without leave from the CARP panel. See Sec. 251.45(c).
(g) All written testimony and exhibits will be received into the
record, except any to which the panel sustains an objection; no
separate motion will be required.
(h) If the panel rejects or excludes testimony and an offer of
proof is made, the offer of proof shall consist of a statement of the
substance of the evidence which it is contended would have been
adduced. In the case of documentary or written evidence, a copy of such
evidence shall be marked for identification and shall constitute the
offer of proof.
(i) The CARP panel shall discourage the presentation of cumulative
evidence, and may limit the number of witnesses that may be heard on
behalf of any one party on any one issue.
(j) Parties are entitled to conduct cross-examination and redirect
examination. Cross-examination is limited to matters raised on direct
examination. Redirect examination is limited to matters raised on
cross-examination. The panel, however, may limit cross-examination and
redirect examination if in its judgment this evidence or examination
would be cumulative or cause undue delay. Conversely, this subsection
does not restrict the discretion of the panel to expand the scope of
cross-examination or redirect examination.
(k) Documents that have not been exchanged in advance may be shown
to a witness on cross-examination. However, copies of such documents
must be distributed to the CARP panel and to other participants or
their counsel at hearing before being shown to the witness at the time
of cross-examination, unless the panel directs otherwise. If the
document is not, or will not be, supported by a witness for the cross-
examining party, that document can be used solely to impeach the
witness's direct testimony and cannot itself be relied upon in findings
of fact as rebutting the witness's direct testimony. However, upon
leave from the panel, the document may be admitted as evidence without
a sponsoring witness if official notice is proper, or if, in the
panel's view, the cross-examined witness is the proper sponsoring
witness.
(l) A CARP will encourage individuals or groups with the same or
similar interests in a proceeding to select a single representative to
conduct their examination and cross-examination for them. However, if
there is no agreement on the selection of a representative, each
individual or group will be allowed to conduct its own examination and
cross-examination, but only on issues affecting its particular
interests, provided that the questioning is not repetitious or
cumulative of the questioning of other parties within the group.
Sec. 251.48 Rules of evidence.
(a) Admissibility. In any public hearing before a Copyright
Arbitration Royalty Panel, evidence that is not unduly repetitious or
cumulative and is relevant and material shall be admissible. The
testimony of any witness will not be considered evidence in a
proceeding unless the witness has been sworn.
(b) Documentary evidence. Evidence that is submitted in the form of
documents or detailed data and information shall be presented as
exhibits. Relevant and material matter embraced in a document
containing other matter not material or relevant or not intended as
evidence must be plainly designated as the matter offered in evidence,
and the immaterial or irrelevant parts shall be marked clearly so as to
show they are not intended as evidence. In cases where a document in
which material and relevant matter occurs is of such bulk that it would
unnecessarily encumber the record, it may be marked for identification
and the relevant and material parts, once properly authenticated, may
be read into the record. If the CARP panel desires, a true copy of the
material and relevant matter may be presented in extract form, and
submitted as evidence. Anyone presenting documents as evidence must
present copies to all other participants at the hearing or their
attorneys, and afford them an opportunity to examine the documents in
their entirety and offer into evidence any other portion that may be
considered material and relevant.
(c) Documents filed with a Copyright Arbitration Royalty Panel or
Copyright Office. If the matter offered in evidence is contained in
documents already on file with a Copyright Arbitration Royalty Panel or
the Copyright Office, the documents themselves need not be produced,
but may instead be referred to according to how they have been filed.
(d) Public documents. If a public document such as an official
report, decision, opinion, or published scientific or economic data, is
offered in evidence either in whole or in part, and if the document has
been issued by an Executive Department, a legislative agency or
committee, or a Federal administrative agency (Government-owned
corporations included), and is proved by the party offering it to be
reasonably available to the public, the document need not be produced
physically, but may be offered instead by identifying the document and
signaling the relevant parts.
(e) Introduction of studies and analyses. If studies or analyses
are offered in evidence, they shall state clearly the study plan, all
relevant assumptions, the techniques of data collection, and the
techniques of estimation and testing. The facts and judgments upon
which conclusions are based shall be stated clearly, together with any
alternative courses of action considered. If requested, tabulations of
input data shall be made available to the Copyright Arbitration Royalty
Panel.
(f) Statistical studies. Statistical studies offered in evidence
shall be accompanied by a summary of their assumptions, their study
plans, and their procedures. Supplementary details shall be included in
appendices. For each of the following types of statistical studies the
following should be furnished:
(1) Sample surveys. (i) A clear description of the survey design,
the definition of the universe under consideration, the sampling frame
and units, the validity and confidence limits on major estimates; and
(ii) An explanation of the method of selecting the sample and of
which characteristics were measured or counted.
(2) Econometric investigations. (i) A complete description of the
econometric model, the reasons for each assumption, and the reasons for
the statistical specification;
(ii) A clear statement of how any changes in the assumptions might
affect the final result; and
(iii) Any available alternative studies that employ alternative
models and variables, if requested.
(3) Experimental analysis. (i) A complete description of the
design, the controlled conditions, and the implementation of controls;
and
(ii) A complete description of the methods of observation and
adjustment of observation.
(4) Studies involving statistical methodology. (i) The formula used
for statistical estimates;
(ii) The standard error for each component;
(iii) The test statistics, the description of how the tests were
conducted, related computations, computer programs, and all final
results; and
(iv) Summarized descriptions of input data and, if requested, the
input data themselves.
Sec. 251.49 Transcript and record.
(a) An official reporter for the recording and transcribing of
hearings shall be designated by the Librarian of Congress. Anyone
wishing to inspect or copy the transcript of a hearing may do so at a
location specified by the chairperson of the Copyright Arbitration
Royalty Panel conducting the hearing.
(b) The transcript of testimony and all exhibits, papers, and
requests filed in the proceeding, shall constitute the official written
record. Such record shall accompany the report of the determination of
the CARP to the Librarian of Congress required by 17 U.S.C. 802(e).
(c) The record, including the report of the determination of a
CARP, shall be available at the Copyright Office for public inspection
and copying in accordance with Sec. 251.22.
Sec. 251.50 Rulings and orders.
In accordance with 5 U.S.C., subchapter II, a Copyright Arbitration
Royalty Panel may issue rulings or orders, either on its own motion or
that of an interested party, necessary to the resolution of issues
contained in the proceeding before it; Provided, That no such rules or
orders shall amend, supplement or supersede the rules and regulations
contained in this subchapter. See Sec. 251.7.
Sec. 251.51 Closing the hearing.
To close the record of hearing, the chairperson of a Copyright
Arbitration Royalty Panel shall make an announcement that the taking of
testimony has concluded. In its discretion the panel may close the
record as of a future specified date, and allow time for exhibits yet
to be prepared to be admitted, provided that the parties to the
proceeding stipulate on the record that they waive the opportunity to
cross-examine or present evidence with respect to such exhibits. The
record in any hearing that has been recessed may not be closed by the
chairperson before the day on which the hearing is to resume, except
upon ten days' notice to all parties.
Sec. 251.52 Proposed findings and conclusions.
(a) Any party to the proceeding may file proposed findings of fact
and conclusions, briefs, or memoranda of law, or may be directed by the
chairperson to do so. Such filings, and any replies to them, shall take
place at such time after the record has been closed as the chairperson
directs.
(b) Failure to file when directed to do so shall be considered a
waiver of the right to participate further in the proceeding, unless
good cause for the failure is shown.
(c) Proposed findings of fact shall be numbered by paragraph and
include all basic evidentiary facts developed on the record used to
support proposed conclusions, and shall contain appropriate citations
to the record for each evidentiary fact. Proposed conclusions shall be
stated separately. Proposed findings submitted by someone other than an
applicant in a proceeding shall be restricted to those issues
specifically affecting that person.
Sec. 251.53 Report to the Librarian of Congress.
(a) At any time after the filing of proposed findings of fact and
conclusions of law specified in Sec. 251.52, and not later than 180
days from publication in the Federal Register of notification of
commencement of the proceeding, a Copyright Arbitration Royalty Panel
shall deliver to the Librarian of Congress a report incorporating its
written determination. Such determination shall be accompanied by the
written record, and shall set forth the facts that the panel found
relevant to its determination.
(b) The determination of the panel shall be certified by the
chairperson and signed by all of the arbitrators. Any dissenting
opinion shall be certified and signed by the arbitrator so dissenting.
(c) At the same time as the submission to the Librarian of
Congress, the chairperson of the panel shall cause a copy of the
determination to be delivered to all parties participating in the
proceeding.
(d) The Librarian of Congress shall make the report of the CARP and
the accompanying record available for public inspection and copying.
Sec. 251.54 Assessment of costs of arbitration panels.
(a) After the submission of the panel's report to the Librarian of
Congress, the panel may assess its ordinary and necessary costs,
according to Sec. 251.38, to the participants to the proceeding as
follows:
(1) In the case of a rate adjustment proceeding, the parties to the
proceeding shall bear the entire cost thereof in such manner and
proportion as the panel shall direct.
(2) In the case of a royalty distribution proceeding, the parties
to the proceeding shall bear the total cost of the proceeding in direct
proportion to their share of the distribution.
(3) In the case of a change in the share of distribution because of
the Librarian's substitution of a new determination, or a determination
reached as a result of a court-ordered remand, the parties shall make
restitution to each other for the difference in payments that resulted
from the change.
(b) The chairperson of the panel shall cause to be delivered to
each participating party a statement of the total costs of the
proceeding, the party's share of the total cost, and the amount owed by
the party to each arbitrator.
(c) All parties to a proceeding shall have 30 days from receipt of
the statement of costs and bill for payment in which to tender payment
to the arbitrators. Payment should be in the form of a money order,
check, or bank draft. Failure to submit timely payment may submit the
nonpaying party to the provisions of the Debt Collection Act of 1982,
including disclosure to consumer credit reporting agencies and referral
to collection agencies.
Sec. 251.55 Post-panel motions.
(a) Any party to the proceeding may file with the Librarian of
Congress a petition to modify or set aside the determination of a
Copyright Arbitration Royalty Panel within 14 days of the Librarian's
receipt of the panel's report of its determination. Such petition shall
state the reasons for modification or reversal of the panel's
determination, and shall include applicable sections of the party's
proposed findings of fact and conclusions of law.
(b) Replies to petitions to modify or set aside shall be filed
within 14 days of the filing of such petitions.
Sec. 251.56 Order of the Librarian of Congress.
(a) After the filing of post-panel motions, see Sec. 251.55, but
within 60 days from receipt of the report of the determination of a
panel, the Librarian of Congress shall issue an order accepting the
panel's determination or substituting the Librarian's own
determination. The Librarian shall adopt the determination of the panel
unless he or she finds that the determination is arbitrary or contrary
to the applicable provisions of 17 U.S.C.
(b) If the Librarian substitutes his or her own determination, the
order shall set forth the reasons for not accepting the panel's
determination, and shall set forth the facts which the Librarian found
relevant to his or her determination.
(c) The Librarian shall cause a copy of the order to be delivered
to all parties participating in the proceeding. The Librarian shall
also publish the order, and the determination of the panel, in the
Federal Register.
Sec. 251.57 Effective date of order.
An order of determination issued by the Librarian under Sec. 251.56
shall become effective 30 days following its publication in the Federal
Register, unless an appeal has been filed pursuant to Sec. 251.58 and
notice of the appeal has been served on all parties to the proceeding.
Sec. 251.58 Judicial review.
(a) Any order of determination issued by the Librarian of Congress
under Sec. 251.55 may be appealed, by any aggrieved party who would be
bound by the determination, to the United States Court of Appeals for
the District of Columbia Circuit, within 30 days after publication of
the order in the Federal Register.
(b) If no appeal is brought within the 30 day period, the order of
determination of the Librarian is final, and shall take effect as set
forth in the order.
(c) The pendency of any appeal shall not relieve persons obligated
to make royalty payments under 17 U.S.C. 111, 115, 116, 118, 119, or
1003, and who would be affected by the determination on appeal, from
depositing statements of account and royalty fees specified by those
sections.
Subpart F--Rate Adjustment Proceedings
Sec. 251.60 Scope.
This subpart governs only those proceedings dealing with royalty
rate adjustments affecting cable (17 U.S.C. 111), the production of
phonorecords (17 U.S.C. 115), performances on coin-operated phonorecord
players (jukeboxes) (17 U.S.C. 116), and noncommercial educational
broadcasting (17 U.S.C. 118). Those provisions of subpart E of this
part generally regulating the conduct of proceedings shall apply to
rate adjustment proceedings, unless they are inconsistent with the
specific provisions of this subpart.
Sec. 251.61 Commencement of adjustment proceedings.
(a) In the case of cable, phonorecords, and coin-operated
phonorecord players (jukeboxes), rate adjustment proceedings shall
commence with the filing of a petition by an interested party according
to the following schedule:
(1) Cable: During 1995, and each subsequent fifth calendar year.
(2) Phonorecords: During 1997 and each subsequent tenth calendar
year.
(3) Coin-operated phonorecord players (jukeboxes): Within one year
of the expiration or termination of a negotiated license authorized by
17 U.S.C. 116.
(b) Cable rate adjustment proceedings may also be commenced by the
filing of a petition, according to 17 U.S.C. 801(b)(2)(B) and (C), if
the Federal Communications Commission amends certain of its rules with
respect to the carriage by cable systems of broadcast signals, or with
respect to syndicated and sports programming exclusivity.
(c) In the case of noncommercial educational broadcasting, a
petition is not necessary for the commencement of proceedings.
Proceedings commence with the publication of a notice of the initiation
of arbitration proceedings in the Federal Register on June 30, 1997,
and at five year intervals thereafter.
Sec. 251.62 Content of petition.
(a) In the case of a petition for rate adjustment proceedings for
cable television, phonorecords, and coin-operated phonorecord players
(jukeboxes), the petition shall detail the petitioner's interest in the
royalty rate sufficiently to permit the Librarian of Congress to
determine whether the petitioner has a ``significant interest'' in the
matter. The petition must also identify the extent to which the
petitioner's interest is shared by other owners or users; owners or
users with similar interests may file a petition jointly.
(b) In the case of a petition for rate adjustment proceedings as
the result of a Federal Communications Commission rule change, the
petition shall also set forth the actions of the Federal Communications
Commission on which the petition for a rate adjustment is based.
Sec. 251.63 Period for consideration.
To allow time for parties to settle their differences regarding
rate adjustments, the Librarian of Congress shall, after the filing of
a petition, or prior to the commencement of proceedings made under 17
U.S.C. 118(b), designate a 30-day period for consideration of their
settlement. The Librarian shall cause notice of the consideration
period to be published in the Federal Register, and such notice shall
include the effective dates of that period.
Sec. 251.64 Disposition of petition; initiation of arbitration
proceeding.
At the end of the 30-day period for settling rate differences, and
after the Librarian has ruled on all motions filed during that period
under Sec. 251.45(b), the Librarian will determine the sufficiency of
the petition, including, where appropriate, whether one or more of the
petitioners' interests are ``significant.'' If the Librarian determines
that a petition is significant, he or she will cause to be published in
the Federal Register a declaration of a controversy accompanied by a
notice of initiation of an arbitration proceeding. The same declaration
and notice of initiation shall be made for noncommercial educational
broadcasting in accordance with 17 U.S.C. 118. Such notice shall, to
the extent feasible, describe the nature, general structure, and
schedule of the proceeding.
Sec. 251.65 Deduction of costs of rate adjustment proceedings.
The Librarian of Congress and the Register of Copyrights may deduct
the reasonable costs the Library of Congress and the Copyright Office
incurred as a result of a rate adjustment proceeding from the relevant
royalty pool. If no royalty pool exists, the Librarian of Congress and
the Register of Copyrights may assess their reasonable costs directly
to the parties participating in the most recent relevant proceedings.
Subpart G--Royalty Fee Distribution Proceedings
Sec. 251.70 Scope.
This subpart governs only those proceedings dealing with
distribution of royalty payments deposited with the Register of
Copyrights for cable (17 U.S.C. 111), satellite carrier (17 U.S.C.
119), and digital audio recording devices and media (17 U.S.C. chapter
10). Those provisions of subpart E generally regulating the conduct of
proceedings shall apply to royalty fee distribution proceedings, unless
they are inconsistent with the specific provisions of this subpart.
Sec. 251.71 Commencement of proceedings.
(a) Cable. In the case of royalty fees collected under the cable
compulsory license (17 U.S.C. 111), any person claiming to be entitled
to such fees must file a claim with the Copyright Office during the
month of July each year in accordance with the requirements of this
subchapter.
(b) Satellite carriers. In the case of royalty fees collected under
the satellite carrier compulsory license (17 U.S.C. 119), any person
claiming to be entitled to such fees must file a claim with the
Copyright Office during the month of July each year in accordance with
the requirements of this subchapter.
(c) Digital audio recording devices and media. In the case of
royalty payments for the importation and distribution in the United
States, or the manufacture and distribution in the United States, of
any digital recording device or medium, any person claiming to be
entitled to such payments must file a claim with the Copyright Office
during the month of January or February each year in accordance with
the requirements of this subchapter.
Sec. 251.72 Determination of controversy.
(a) Cable. After the first day of August each year, the Librarian
of Congress shall determine whether a controversy exists among the
claimants of cable compulsory license royalty fees. In order to
determine whether a controversy exists, and to facilitate agreement
among the claimants as to the proper distribution, the Librarian may
request public comment or conduct public hearings, whichever he or she
deems necessary. All requests for information and notices of public
hearings shall be published in the Federal Register, along with a
description of the general structure and schedule of the proceeding.
(b) Satellite carriers. After the first day of August of each year,
the Librarian shall determine whether a controversy exists among the
claimants of the satellite carrier compulsory license royalty fees. In
order to determine whether a controversy exists, and to facilitate
agreement among the claimants as to the proper distribution, the
Librarian may request public comment or conduct public hearings,
whichever he or she deems necessary. All requests for information and
notices of public hearings shall be published in the Federal Register,
along with a description of the general structure and schedule of the
proceeding.
(c) Digital audio recording devices and media. Within 30 days after
the last day of February each year, the Librarian of Congress shall
determine whether a controversy exists among the claimants of digital
audio recording devices and media royalty payments as to any Subfund of
the Sound Recording Fund or the Musical Works Fund as set forth in 17
U.S.C. 1006(b) (1) and (2). In order to determine whether a controversy
exists, and to facilitate agreement among the claimants as to the
proper distribution, the Librarian may request public comment or
conduct public hearings, whichever he or she deems necessary. All
requests for information and notices of public hearings shall be
published in the Federal Register, along with a description of the
general structure and schedule of the proceeding.
Sec. 251.73 Declaration of controversy: Initiation of arbitration
proceeding.
If the Librarian determines that a controversy exists among the
claimants to either cable, satellite carrier, or digital audio
recording devices and media royalties, the Librarian shall publish in
the Federal Register a declaration of controversy along with a notice
of initiation of an arbitration proceeding. Such notice shall, to the
extent feasible, describe the nature, general structure and schedule of
the proceeding.
Sec. 251.74 Deduction of costs of distribution proceedings.
The Librarian of Congress and the Register of Copyrights may,
before any distributions of royalty fees are made, deduct the
reasonable costs incurred by the Library of Congress and the Copyright
Office as a result of the distribution proceeding, from the relevant
royalty pool.
3. Part 302 of chapter III is removed.
3a. A new part 252 is added to subchapter B of chapter II to read
as follows:
PART 252--FILING OF CLAIMS TO CABLE ROYALTY FEES
Sec.
252.1 Scope.
252.2 Time of filing.
252.3 Content of claims.
252.4 Compliance with statutory dates.
252.5 Copies of claims.
Authority: 17 U.S.C. 111(d)(4), 801, 803.
Sec. 252.1 Scope.
This part prescribes procedures under to 17 U.S.C. 111(d)(4)(A),
whereby parties claiming to be entitled to cable compulsory license
royalty fees shall file claims with the Copyright Office.
Sec. 252.2 Time of filing.
During the month of July each year, any party claiming to be
entitled to cable compulsory license royalty fees for secondary
transmissions of one or more of its works during the preceding calendar
year shall file a claim to such fees with the Copyright Office. No
royalty fees shall be distributed to a party for secondary
transmissions during the specified period unless such party has timely
filed a claim to such fees. Claimants may file claims jointly or as a
single claim.
Sec. 252.3 Content of claims.
(a) Claims filed by parties claiming to be entitled to cable
compulsory license royalty fees shall include the following
information:
(1) The full legal name of the person or entity claiming royalty
fees.
(2) The telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the place of business of the person or entity.
(3) If the claim is a joint claim, a concise statement of the
authorization for the filing of the joint claim. For this purpose a
performing rights society shall not be required to obtain from its
members or affiliates separate authorizations, apart from their
standard membership affiliate agreements.
(4) For both individual claims and joint claims, other than a joint
claim filed by a performing rights society on behalf of its members or
affiliates, a general statement of the nature of each claimant's
copyrighted works and identification of at least one secondary
transmission by a cable system of each claimant's copyrighted works
establishing a basis for the claim.
(b) Claims shall bear the original signature of the claimant or of
a duly authorized representative of the claimant.
(c) In the event that the legal name and/or address of the claimant
changes after the filing of the claim, the claimant shall notify the
Copyright Office of such change. If the good faith efforts of the
Copyright Office to contact the claimant are frustrated because of
failure to notify the Office of a name and/or address change, the claim
may be subject to dismissal.
(d) In the event that, after filing an individual claim, a claimant
chooses to negotiate a joint claim, either the particular joint
claimant or the individual claimant shall notify the Copyright Office
of such change within 14 days from the making of the agreement.
Sec. 252.4 Compliance with statutory dates.
(a) Claims filed with the Copyright Office shall be considered
timely filed only if:
(1) They are received in the offices of the Copyright Office during
normal business hours during the month of July, or
(2) They are properly addressed to the Copyright Office in
accordance with Sec. 251.1, and they are deposited with sufficient
postage with the United States Postal Service and bear a July U.S.
postmark.
(b) Notwithstanding subsection (a), in any year in which July 31
falls on a Saturday, Sunday, holiday, or other nonbusiness day within
the District of Columbia or the Federal Government, claims received by
the Copyright Office by the first business day in August, or properly
addressed and deposited with sufficient postage with the United States
Postal Service and postmarked by the first business day in August,
shall be considered timely filed.
(c) Claims dated only with a business meter that are received after
July 31, will not be accepted as having been timely filed.
(d) No claim may be filed by facsimile transmission.
(e) In the event that a properly addressed and mailed claim is not
timely received by the Copyright Office, a claimant may nonetheless
prove that the claim was properly mailed if it was sent by certified
mail return receipt requested, and the claimant can provide the
receipt. No affidavit of an officer or employee of the claimant, or of
a U.S. postal worker will be accepted as proof in lieu of the receipt.
Sec. 252.5 Copies of claims.
A claimant shall, for each claim submitted to the Copyright Office,
file an original and two copies of the claim to cable royalty fees.
PART 303--[REMOVED]
4. Part 303--Access to Phonorecord Players (Jukeboxes) of chapter
III is removed.
PART 304--[REDESIGNATED AS PART 253]
5. Part 304 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 253.
6. The heading for part 253 is revised to read as follows:
PART 253--USE OF CERTAIN COPYRIGHTED WORKS IN CONNECTION WITH
NONCOMMERCIAL EDUCATIONAL BROADCASTING
7. The authority citation to part 253 is revised to read as
follows:
Authority: 17 U.S.C. 118, 801(b)(1) and 803.
Sec. 253.4 [Amended]
8. Section 253.4 is amended in the introductory text of the section
by removing ``Secs. 304.5 and 304.6'' and adding ``Secs. 253.5 and
253.6''.
Sec. 253.8 [Amended]
9. Section 253.8(e) is amended by removing ``CRT'' each place it
appears and adding ``Copyright Office''.
Sec. 253.9 [Amended]
10. Section 253.9 is amended by removing ``CRT'' and adding
``Copyright Office''.
Sec. 253.10 [Amended]
11. Section 253.10 is amended by removing ``CRT'' each place it
appears and adding ``Copyright Office''.
Sec. 253.10b [Amended]
11a. Section 253.10(b) is amended by removing ``Sec. 304.5'' and
adding ``Sec. 253.5''.
Sec. 253.10c [Amended]
11b. Section 253.10(c) is amended by removing ``Sec. 304.5'' and
adding ``Sec. 253.5''.
Sec. 253.12 [Amended]
12. Section 253.12 ``Amendment of certain regulations'' and 253.13
``Issuance of interpretative regulations'' are removed.
PART 305--[REMOVED]
13. Part 305 Claims to Phonorecord Player (Jukebox) Royalty Fees of
chapter III is removed.
PART 306--[REDESIGNATED AS PART 254]
14. Part 306 is transferred to chapter II, subchapter B and is
redesignated as part 254.
15. The heading for part 254 is revised to read as follows:
PART 254--ADJUSTMENT OF ROYALTY RATE FOR COIN-OPERATED PHONORECORD
PLAYERS
16. The authority citation for part 254 is revised to read as
follows:
Authority: 17 U.S.C. 116, 801(b)(1).
Sec. 254.1 [Amended]
17. Section 254.1 is amended by removing ``306'' and adding ``254''
and by removing ``and 804(a)''.
PART 307--[REDESIGNATED AS PART 255]
18. Part 307 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 255.
19. The heading for part 255 is revised to read as follows:
PART 255--ADJUSTMENT OF ROYALTY PAYABLE UNDER COMPULSORY LICENSE
FOR MAKING AND DISTRIBUTING PHONORECORDS
20. The authority citation for part 255 is revised to read as
follows:
Authority: 17 U.S.C. 801(b)(1) and 803.
Sec. 255.1 [Amended]
21. Section 255.1 is amended by removing ``307'' and adding
``255''.
Sec. 255.2 [Amended]
22. Section 255.2 is amended by removing ``Sec. 307.3'' and adding
``Sec. 255.3''.
Sec. 255.3 [Amended]
23. Section 255.3 is amended in paragraph (g)(1) by removing
``Copyright Royalty Tribunal'' and in (g)(1) and (g)(2) by removing
``CRT'' each place it appears and adding ``Librarian of Congress'' in
each place, respectively.
PART 308--[REDESIGNATED AS PART 256]
24. Part 308 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 256.
25. The heading for part 256 is revised to read as follows:
PART 256--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE
PART 309--[REDESIGNATED AS PART 257]
26. Part 309 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 257.
27. Part 257 is revised to read as follows:
PART 257--FILING OF CLAIMS TO SATELLITE CARRIER ROYALTY FEES
Sec.
257.1 General.
257.2 Time of filing.
257.3 Content of claims.
257.4 Compliance with statutory dates.
257.5 Copies of claims.
257.6 Separate claims required.
Authority: 17 U.S.C. 119(b)(4).
Sec. 257.1 General.
This part prescribes the procedures under 17 U.S.C. 119(b)(4)
whereby parties claiming to be entitled to compulsory license royalty
fees for secondary transmissions by satellite carriers of television
broadcast signals to the public for private home viewing shall file
claims with the Copyright Office.
Sec. 257.2 Time of filing.
During the month of July each year, any party claiming to be
entitled to compulsory license royalty fees for secondary transmissions
by satellite carriers during the previous calendar year of television
broadcast signals to the public for private home viewing shall file a
claim to such fees with the Copyright Office. No royalty fees shall be
distributed to any party during the specified period unless such party
has timely filed a claim to such fees. Claimants may file claims
jointly or as a single claim.
Sec. 257.3 Content of claims.
(a) Claims filed by parties claiming to be entitled to satellite
carrier compulsory license royalty fees shall include the following
information:
(1) The full legal name of the person or entity claiming royalty
fees.
(2) The telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the place of business of the person or entity.
(3) If the claim is a joint claim, a concise statement of the
authorization for the filing of the joint claim. For this purpose, a
performing rights society shall not be required to obtain from its
members or affiliates separate authorizations, apart from their
standard membership or affiliate agreements.
(4) For both individual claims and joint claims, other than a joint
claim filed by a performing rights society on behalf of its members or
affiliates, a general statement of the nature of each claimant's
copyrighted works and identification of at least one secondary
transmission by a satellite carrier of each claimant's copyrighted
works establishing a basis for the claim.
(b) Claims shall bear the original signature of the claimant or of
a duly authorized representative of the claimant.
(c) In the event that the legal name and/or full address of the
claimant changes after the filing of the claim, the claimant shall
notify the Copyright Office of such change. If the good faith efforts
of the Copyright Office to contact the claimant are frustrated because
of failure to notify the Office of a name and/or address change, the
claim may be subject to dismissal.
(d) In the event that, after filing an individual claim, an
interested copyright party chooses to negotiate a joint claim, either
the particular joint claimants or individual claimant shall notify the
Copyright Office of such change within 14 days from the making of the
agreement.
Sec. 257.4 Compliance with statutory dates.
(a) Claims filed with the Copyright Office shall be considered
timely filed only if: (1) They are received in the offices of the
Copyright Office during normal business hours during the month of July,
or
(2) They are properly addressed to the Copyright Office in
accordance with Sec. 251.1, and they are deposited with sufficient
postage with the United States Postal Service and bear a July U.S.
postmark.
(b) Notwithstanding subsection (a), in any year in which July 31
falls on a Saturday, Sunday, holiday, or other nonbusiness day within
the District of Columbia or the Federal Government, claims received by
the Copyright Office by the first business day in August, or properly
addressed and deposited with sufficient postage with the United States
Postal Service and postmarked by the first business day in August,
shall be considered timely filed.
(c) Claims dated only with a business meter that are received after
July 31, will not be accepted as having been timely filed.
(d) No claim may be filed by facsimile transmission.
(e) In the event that a properly addressed and mailed claim is not
timely received by the Copyright Office, a claimant may nonetheless
prove the claim was properly mailed if it was sent by certified mail
return receipt requested, and the claimant can provide the receipt. No
affidavit of an officer or employee of the claimant, or of a U.S.
postal worker will be accepted as proof in lieu of the receipt.
Sec. 257.5 Copies of claims.
A claimant shall, for each claim submitted to the Copyright Office,
file an original and two copies of the claim to satellite carrier
royalty fees.
Sec. 257.6 Separate claims required.
If a party intends to file claims for both cable compulsory license
and satellite carrier compulsory license royalty fees during the same
month of July, that party must file separate claims with the Copyright
Office. Any single claim which purports to file for both cable and
satellite carrier royalty fees will be dismissed.
PART 310-[REDESIGNATED AS PART 258]
28. Part 310 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 258.
29. The heading for part 258 is revised to read as follows:
PART 258--ADJUSTMENT OF ROYALTY FEE FOR SECONDARY TRANSMISSIONS BY
SATELLITE CARRIERS
29a. The authority citation for part 258 continues to read as
follows:
Authority: 17 U.S.C. 119(c)(3)(F).
Sec. 258.1 [Amended]
30. Section 258.1 is amended by removing ``310'' and adding
``258''.
Sec. 258.2 [Amended]
31. Section 258.2 is amended by removing ``Sec. 310(3)(b)'' and
adding ``Sec. 258(3)(b)''.
PART 311--REDESIGNATED AS PART 259]
32. Part 311 of chapter III is transferred to subchapter B of
chapter II and is redesignated as part 259.
33. The heading for part 259 is revised to read as follows:
PART 259--FILING OF CLAIMS TO DIGITAL AUDIO RECORDING DEVICES AND
MEDIA ROYALTY PAYMENTS
33a. The authority citation for part 259 is amended to read as
follows:
Authority: 17 U.S.C. 1007(a)(1).
Sec. 259.1 [Amended]
34. Section 259.1 is amended by removing ``Copyright Royalty
Tribunal'' and adding ``Copyright Office''.
Sec. 259.2 [Amended]
35. Section 259.2 is amended by removing ``Copyright Royalty
Tribunal'' each place it appears and adding ``Copyright Office''.
Sec. 259.3 [Amended]
36. Section 259.3 is amended by removing ``Copyright Royalty
Tribunal'' each place it appears and adding ``Copyright Office''.
36a. Section 259.3 is amended by revising paragraph (c) to read as
follows:
Sec. 259.3 Content of claims.
* * * * *
(c) In the event that the legal name and/or address of the claimant
changes after the filing of the claim, the claimant shall notify the
Copyright Office of such change. If the good faith efforts of the
Copyright Office to contact the claimant are frustrated because of
failure to notify the Office of a name and/or address change, the claim
may be subject to dismissal.
* * * * *
Sec. 259.4 [Amended]
37. Section 259.4 is amended by removing ``Copyright Royalty
Tribunal'' each place it appears and adding ``Copyright Office''.
37a. A new paragraph (e) is added to Sec. 259.4 to read as follows:
Sec. 259.4 Content of notices regarding independent administrators.
* * * * *
(e) No notice may be filed by facsimile transmission.
Sec. 259.5 [Amended]
38. Section 259.5 is revised to read as follows:
Sec. 259.5 Compliance with statutory dates.
(a) Claims filed with the Copyright Office shall be considered
timely filed only if: (1) They are received in the offices of the
Copyright Office during normal business hours during the months of
January or February, or
(2) They are properly addressed to the Copyright Office in
accordance with Sec. 251.1, and they are deposited with sufficient
postage with the United States Postal Service and bear a January or
February U.S. postmark.
(b) Notwithstanding subsection (a), in any year in which the last
day of February falls on Saturday, Sunday, a holiday, or other
nonbusiness day within the District of Columbia or the Federal
Government, claims received by the Copyright Office by the first
business day in March, or properly addressed and deposited with
sufficient postage with the United States Postal Service and postmarked
by the first business day in March, shall be considered timely filed.
(c) Claims dated only with a business meter that are received after
the last day of February, will not be accepted as having been timely
filed.
(d) No claim may be filed by facsimile transmission.
(e) In the event that a properly addressed and mailed claim is not
received by the Copyright Office, a claimant may nonetheless prove that
the claim was properly mailed if it was sent by certified mail return
receipt requested, and the claimant can provide the receipt. No
affidavit of an officer or employee of the claimant, or of a postal
worker will be accepted as proof in lieu of the receipt.
39. Section 259.6 is revised to read as follows:
Sec. 259.6 Copies of claims.
A claimant shall, for each claim submitted to the Copyright Office,
file an original and two copies of the claim to digital audio recording
devices and media royalty payments.
CHAPTER III--[REMOVED]
41. Chapter III is removed.
Dated: May 3, 1994.
Barbara Ringer,
Acting Register of Copyrights.
Approved by:
James H. Billington,
The Librarian of Congress.
[FR Doc. 94-10985 Filed 5-6-94; 8:45 am]
BILLING CODE 1410-09-P