[Federal Register: April 1, 2002 (Volume 67, Number 62)]
[Page 15414-15416]


Copyright Office

[Docket No. 2002-4 CARP NCBRA]

Noncommercial Educational Broadcasting Compulsory License

AGENCY: Copyright Office, Library of Congress.

ACTION: Announcement of voluntary negotiation period, precontroversy 
discovery schedule, and request for Notices of Intent to Participate.


SUMMARY: The Copyright Office of the Library of Congress is announcing 
a voluntary negotiation period for the 17 U.S.C. 118 noncommercial 
educational broadcasting compulsory license, along with a 
precontroversy discovery schedule, a request for Notices of Intent to 
Participate, and the initiation date should arbitration proceedings be 

DATES: Notices of Intent to Participate are due on or before April 25, 

ADDRESSES: If sent by mail, an original and five copies of Notices of 
Intent to Participate should be addressed to: Copyright Arbitration 
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 
20024. If hand delivered, an original and five copies of Notices of 
Intent to Participate should be brought to: Office of the Copyright 
General Counsel, James Madison Memorial Building, Room LM-403, First 
and Independence Avenue, SE., Washington, DC 20540.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 
William J. Roberts, Jr., Senior Attorney for Compulsory Licenses, 
Copyright Arbitration Royalty Panel (CARP), P.O.

[[Page 15415]]

Box 70977, Southwest Station, Washington, DC 20024. Telephone (202) 
707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: Section 118 of the Copyright Act, 17 U.S.C., 
creates a compulsory license for the use of certain copyrighted works 
in connection with noncommercial broadcasting. Terms and rates for this 
compulsory license applicable to parties who are not subject to 
privately negotiated licenses are published in 37 CFR part 253 and are 
subject to adjustment at five year intervals. The last adjustment of 
the terms and rates for the section 118 license occurred in 1997, thus, 
making 2002 a window year for the adjustment of these terms and rates.
    Section 118(b) provides that copyright owners and public 
broadcasting entities may voluntarily negotiate licensing agreements at 
any time, and that such licensing agreements will be ``given effect in 
lieu of any determination by the Librarian of Congress; Provided, That 
copies of such agreements are filed in the Copyright Office within 
thirty days of execution in accordance with regulations that the 
Register of Copyrights shall prescribe.'' 17 U.S.C. 118(b)(2).
    Those parties not subject to a negotiated license must follow the 
terms and rates adopted through arbitration proceedings conducted under 
chapter 8 of the Copyright Act. Section 118(b)(3) provides:

    In the absence of license agreements negotiated under paragraph 
(2), the Librarian of Congress shall, pursuant to chapter 8, convene 
a copyright arbitration royalty panel to determine and publish in 
the Federal Register a schedule of rates and terms which, subject to 
paragraph (2), shall be binding on all owners of copyright in works 
specified by this subsection and public broadcasting entities, 
regardless of whether such copyright owners have submitted proposals 
to the Librarian of Congress. . . .

    In order to commence the adjustment process described in section 
118, the Copyright Office of the Library of Congress is publishing 
today's notice. With respect to private licenses, we note that the 
statute provides that they may be negotiated at any time and must be 
submitted to the Copyright Office in order to be effective. However, in 
keeping with tradition, we believe that it is appropriate and efficient 
to designate a negotiation period, prior to copyright arbitration 
royalty panel (CARP) proceedings, in order to encourage private 
agreements and, possibly, avoid the need for a CARP. Consequently, we 
are announcing a voluntary negotiation period commencing today and 
running to May 15, 2002. Any agreements entered into during this period 
should be deposited with the Copyright Office in accordance with the 
regulations established in 37 CFR 201.9. Of course, license agreements 
may still be negotiated and deposited prior to, and after, the 
designated negotiation period.
    The Library notes that while many of the terms and rates of the 
section 118 license typically have been subject to private negotiation, 
certain terms and rates have not. These terms and rates affect the 
works of unknown copyright owners and owners not affiliated with one or 
more of the performing rights societies and/or artists organizations. 
See, e.g. 37 CFR 253.5(c)(4) and 253.6(c)(4). The Library recognizes 
that it is difficult, if not impossible, for noncommercial educational 
broadcasting entities to identify these copyright owners in order to 
negotiate terms and rates of licenses. Consequently, in these limited 
circumstances where negotiated licenses are not practicable, the 
Library is willing to accept proposals for terms and rates from 
noncommercial educational broadcasting entities and subject them to the 
public notice and comment provisions of Sec. 251.63(b) of the Library's 
rules. The Librarian will adopt the proposed rates and terms, unless a 
copyright owner, with a significant interest in the proposal and an 
intent to participate fully in a CARP proceeding, files comment 
opposing the proposed terms and rates.
    For all other terms and rates for the section 118 license, in the 
absence of negotiated licenses, the Librarian of Congress will convene 
a CARP. The proceeding will be conducted according to the following 

Notices of Intent to Participate

    Any party wishing to appear before the CARP, and to present 
evidence, in this proceeding must file a Notice of Intent to 
Participate by April 25, 2002. Failure to file a timely Notice of 
Intent to Participate will preclude a party from participating in this 

Precontroversy Discovery Schedule

    The Library of Congress is announcing the scheduling of the 
precontroversy discovery period, and other procedural matters, for the 
establishment of rates and terms for the section 118 compulsory 
license. In addition, the Library is announcing the date on which 
arbitration proceedings will be initiated before a CARP, thereby 
commencing the 180-day arbitration period. Once a CARP has been 
convened, the scheduling of the arbitration period is within the 
discretion of the CARP and will be announced at that time.

A. Commencement of the Proceeding

    A rate adjustment proceeding under part 251 of 37 CFR is divided 
into two essential phases. The first is the 45-day precontroversy 
discovery phase, during which the parties exchange their written direct 
cases, exchange their documentation and evidence in support of their 
written direct cases, and engage in the pre-CARP motions practice 
described in Sec. 251.45. The other phase is the proceeding before the 
CARP itself, including the presentation of evidence and the submission 
of proposed findings by all of the participating parties. The 
proceeding before the CARP may be in the form of hearings or, in 
accordance with the requirements of Sec. 251.41(b) of the rules, the 
proceeding may be conducted solely on the basis of written pleadings.
    Both of these phases to a rate adjustment proceeding require 
significant amounts of work, not just for the parties, but for the 
Librarian, the Copyright Office, and the arbitrators as well. The rates 
and terms proceeding for section 118 is not the only CARP proceeding 
likely to take place during 2002. Other proceedings will include 
distribution of cable, satellite, and digital audio royalties, as well 
as rate adjustment proceedings for the digital performance license 
(section 114) and the mechanical license (section 115). It would be 
extremely difficult for the Office to conduct the precontroversy 
discovery phase of more than one of these proceedings simultaneously, 
therefore, the Library must conduct them sequentially.
    Because of the number of CARP proceedings to be conducted in 2002, 
and the attending workload, selection of a date to initiate a section 
118 rate setting proceeding is not dependent on the schedules of one or 
more of the participating parties, but must be weighed against the 
interests of all involved. The parties affected by section 118 are most 
likely aware that 2002 is a window year for the adjustment of terms and 
rates, and as described above, are being given a formal negotiation 
period to reach agreements. Because of the other proceedings which must 
be scheduled, the attending workload, and the need to manage the 
interests of all involved, the Library is announcing the precontroversy 
discovery schedule and arbitration period in this proceeding without 
seeking further comment from the participating parties.

[[Page 15416]]

B. Precontroversy Discovery Schedule and Procedures

    Any party that has filed a Notice of Intent to Participate in the 
section 118 adjustment proceeding is entitled to participate in the 
precontroversy discovery period. Each party may request of an opposing 
party non-privileged documents underlying facts asserted in the 
opposing party's written direct case. The precontroversy discovery 
period is limited to discovery of documents related to written direct 
cases and any amendments made during the period.
    The following is the precontroversy discovery procedural schedule 
with corresponding deadlines:

                  Action                              Deadline
Filing of Written Direct Cases............  July 1, 2002.
Requests for Underlying Documents Related   July 11, 2002.
 to Written Direct Cases.
Responses to Requests for Underlying        July 17, 2002.
Completion of Document Production.........  July 22, 2002.
Follow-up Requests for Underlying           July 29, 2002.
Responses to Follow-up Requests...........  August 5, 2002.
Motions Related to Document Production....  August 8, 2002.
Production of Documents in Response to      August 12, 2002.
 Follow-up Requests.
All Other Motions, Petitions, and           August 14, 2002.

    The precontroversy discovery period, as specified by Sec. 251.45(b) 
of the rules, begins on July 1, 2002, with the filing of written direct 
cases by each party. Each party in this proceeding who has filed a 
Notice of Intent to Participate must file a written direct case on the 
date prescribed above. Failure to submit a timely filed written direct 
case will result in dismissal of that party's case. Parties must comply 
with the form and content of written direct cases as prescribed in 37 
CFR 251.43. Each party to the proceeding must deliver a complete copy 
of its written direct case to each of the other parties to the 
proceeding, as well as file a complete copy with the Copyright Office 
by close of business on July 1, 2002, the first day of the 45-day 
    After the filing of the written direct cases, document production 
will proceed according to the above-described schedule. Each party may 
request underlying documents related to each of the other parties' 
written direct cases by July 11, 2002, and responses to those requests 
are due by July 17, 2002. Documents which are produced as a result of 
the requests must be exchanged by July 22, 2002. It is important to 
note that all initial document requests must be made by the July 11, 
2002 deadline. Thus, for example, if one party asserts facts that 
expressly rely on the results of a particular study that was not 
included in the written direct case, another party desiring production 
of that study must make its request by July 11, 2002; otherwise, the 
party is not entitled to production of the study.
    The precontroversy discovery schedule also establishes deadlines 
for follow-up discovery requests. Follow-up requests are due by July 
29, 2002, and responses to those requests are due by August 5, 2002. 
Any documentation produced as a result of a follow-up request must be 
exchanged by August 12, 2002. An example of a follow-up request would 
be as follows. In the above example, one party expressly relies on the 
results of a particular study which is not included in its written 
direct case. As noted above, a party desiring production of that study 
or survey must make its request by July 11, 2002. If, after receiving a 
copy of the study the reviewing party determines that the study heavily 
relies on the results of a statistical survey, it would be appropriate 
for that party to make a follow-up request for production of the 
statistical survey by the July 29, 2002, deadline. Again, failure to 
make a timely follow-up request would waive that party's right to 
request production of the survey.
    In addition to the deadlines for document requests and production, 
there are two deadlines for the filing of precontroversy motions. 
Motions related to document production must be filed by August 8, 2002. 
Typically, these motions are motions to compel production of requested 
documents for failure to produce them, but they may also be motions for 
protective orders. Finally, all other motions, petitions and objections 
must be filed by August 14, 2002, the final day of the 45-day 
precontroversy discovery period. These motions, petitions, and 
objections include, but are not limited to, objections to arbitrators 
appearing on the arbitrator list under 37 CFR 251.4, and petitions to 
dispense with formal hearings under Sec. 251.41(b).
    Due to the time limitations between the procedural steps of the 
precontroversy discovery schedule, we are requiring that all discovery 
requests and responses to such requests be served by hand or fax on the 
party to whom such response or request is directed. Filing of requests 
and responses with the Copyright Office is not required.
    Filing and service of all precontroversy motions, petitions, 
objections, oppositions, and replies shall be as follows. In order to 
be considered properly filed with the Librarian and/or Copyright 
Office, all pleadings must be brought to the Copyright Office at the 
following address no later than 5 p.m. of the filing deadline date: 
Office of the Register of Copyrights, Room LM-403, James Madison 
Memorial Building, 101 Independence Avenue, SE., Washington, DC 20540. 
The form and content of all motions, petitions, objections, 
oppositions, and replies filed with the Office must be in compliance 
with Secs. 251.44(b)-(e). As provided in Sec. 251.45(b), oppositions to 
any motions or petitions must be filed with the Office no later than 
seven business days from the date of filing of such motion or petition. 
Replies are due five business days from the date of filing of such 
oppositions. Service of all motions, petitions, objections, 
oppositions, and replies must be made on counsel or the parties by 
means no slower than overnight express mail on the same day the 
pleading is filed.

C. Initiation of Arbitration

    Initiation of the proceedings before the CARP will commence on 
October 7, 2002, the first day of the 180-day arbitration specified in 
Chapter 8 of the Copyright Act. The schedule of the arbitration 
proceeding will be established by the CARP after the three arbitrators 
have been selected.

    Dated: March 27, 2002.
David O. Carson,
General Counsel.
[FR Doc. 02-7809 Filed 3-29-02; 8:45 am]