[Federal Register: February 12, 2001 (Volume 66, Number 29)]
[Page 9881-9882]


Copyright Office

[Docket No. 2001-2 CARP DTNSRA]

New Subscription Services and the Digital Performance Right in 
Sound Recordings

AGENCY: Copyright Office, Library of Congress.

ACTION: Initiation of voluntary negotiation period.


SUMMARY: The Copyright Office is announcing the initiation of the six-
month voluntary negotiation period for determining reasonable rates and 
terms for the public performance of sound recordings by new 
subscription services. The Office is also requesting that parties 
participating in the negotiation process to so notify the Office.

EFFECTIVE DATE: The voluntary negotiation period begins on February 12, 
2001. Notification of participation in the negotiation period is due by 
March 1, 2001.

ADDRESSES: Copies of voluntary license agreements and petitions, if 
sent by mail, should be addressed to: Copyright Arbitration Royalty 
Panel (CARP), PO Box 70977, Southwest Station, Washington, DC 20024. If 
hand delivered, they should be brought to: Office of the General 
Counsel, James Madison Memorial Building, Room LM-403, First and 
Independence Avenue, SE., Washington, DC 20559-6000.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel, 
PO Box 70977, Southwest Station, Washington, DC 20024. Telephone: (202) 
707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: In 1995, Congress passed the Digital 
Performance Right in Sound Recording Act which gave copyright owners of 
sound recordings an exclusive right to perform publicly their 
copyrighted works by means of a digital audio transmission, subject to 
certain limitations and exemptions. 17 U.S.C. 106(6). Among the 
limitations placed on the performance of a sound recording was the 
creation of a statutory license for performances made by nonexempt, 
non-interactive digital subscription services. 17 U.S.C. 114. Initial 
rates and terms for transmissions made by these services have been set 
by order of the Librarian, following a Copyright Arbitration Royalty 
Panel (``CARP'') proceeding which had been convened for this purpose. 
See 63 FR 25394 (May 8, 1998).
    Section 114 was later amended with the passage of the Digital 
Millennium Copyright Act of 1998 (``DCA''), Public Law 105-304, to 
cover additional digital audio transmissions. These include ``eligible 
nonsubscription transmissions'' and those transmissions made by ``new 
subscription services'' and ``preexisting satellite digital audio radio 
services.'' Currently, the Library of Congress is conducting two 
separate rate adjustment proceedings which will set rates and terms for 
transmissions made by ``eligible nonsubscription services,'' see 63 FR 
65555 (November 27, 1998); 65 FR 2194 (January 13, 2000); and Order in 
Docket Nos. 99-6 CARP DTRA and 2000-3 CARP DTRA2 (December 4, 2000), 
and those transmissions made by ``pre-existing satellite digital audio 
radio services.'' 66 FR 1700 (January 9, 2001). The latter proceeding 
will also establish rates and terms for transmissions made during the 
period January 1, 2001, to December 31, 2002, by ``preexisting 
subscription services'' (the three subscription services in existence 
prior to the passage of the DMCA). Neither proceeding will consider 
rates and terms for transmissions made by ``new subscription 
    For purposes of the section 114 license, ``a `new subscription 
service' is a service that performs sound recordings by means of 
noninteractive subscription digital audio transmissions and that is not 
a preexisting subscription service or a preexisting satellite digital 
audio radio service.'' 17 U.S.C. 114(j)(8). To initiate a proceeding to 
establish rates and terms for those transmissions made by these 
services, either a copyright owner of sound recordings or a new 
subscription service must file a petition with the Library of Congress, 
requesting that the Copyright Office initiate the voluntary negotiation 
period for the purpose of setting these rates and terms. On January 24, 
2001, Music Choice filed such a petition with the Copyright Office 
pursuant to section 114(f)(2)(C)(i)(I).
    Section 114(f)(2)(C)(i)(I) requires the Library to publish a notice 
initiating the 6-month voluntary negotiation period no later than 30 
days after the date the petition is filed. Today's notice fulfills this 

Negotiation Period and Voluntary Agreements

    Pursuant to section 114(f)(2)(C)(i)(I), the Librarian of Congress 
is announcing a six-month negotiation period to give interested parties 
an opportunity to negotiate a voluntary agreement that will establish 
statutory rates and terms for the new subscription services. If the 
parties reach such an agreement and submit the proposal to the 
Librarian for approval, it will be published for public comment. 
Provided that no party with a significant interest and an intent to 
participate in an arbitration proceeding files a comment opposing the 
negotiated rates and terms, the Librarian may adopt the proposed rates 
and terms without convening a CARP. See 37 CFR 251.63(b).


    In the absence of a license agreement negotiated under 17 U.S.C. 
114(f)(2)(A), those copyright owners of sound recordings and entities 
availing themselves of the statutory licenses are subject to 
arbitration upon the filing of a petition by a party with a significant 
interest in establishing reasonable terms and rates for the statutory 
licenses. Petitions must be filed in accordance with 17 U.S.C. 
114(f)(2)(C)(ii)(I), and 803(a)(1) and may be filed anytime during the 
60-day period beginning on August 13, 2001. See also 37 CFR 251.61. 
Parties should submit petitions to the Copyright Office at the address 
listed in this notice. The petitioner must deliver an original and five 
copies to the Office.

Request for Notification

    In order to facilitate productive settlement discussions during the 
negotiation period and to facilitate complete settlement, it is useful 
to create a list of parties that wish to participate in the negotiation 
phase of the proceeding. The list should be in a centralized location 
and available to the public so that interested parties may identify 
each other and enter into the settlement discussions. Therefore, the 
Library is requesting that those parties wishing to participate in the 
six-month negotiation period file notification with the Copyright 
Office by March 1, 2001.
    The list is solely for informational purposes and notification is 
on a voluntary basis. In other words, parties that wish to participate 
in the negotiation period are not required to file notification with 
the Office, though we strongly encourage each party to make the filing, 
and will accept such filings at any time up until the end of the six-
month period. Furthermore, the notification to participate in the 
settlement discussion is not a Notice of Intent to Participate in a 
CARP proceeding, because as provided in 17 U.S.C. 114(f)(2)(B), the 
Library cannot begin a CARP proceeding until petitioned to do so after 
the end of the negotiation period. If the Library receives such a 
petition, it will call for

[[Page 9882]]

Notices of Intent to Participate at a later date.

    Dated: February 7, 2001.
David O. Carson,
General Counsel.
[FR Doc. 01-3516 Filed 2-9-01; 8:45 am]