80 FR 36927 - Determination of Terms and Royalty Rates for Ephemeral Reproductions and Public Performance of Sound Recordings by a New Subscription Service

LIBRARY OF CONGRESS
Copyright Royalty Board

Federal Register Volume 80, Issue 124 (June 29, 2015)

The Copyright Royalty Judges publish final regulations that set the rates and terms for the use of sound recordings via digital transmissions made by new subscription services and for the making of ephemeral recordings to facilitate those transmissions during the period commencing January 1, 2016, and ending on December 31, 2020.

[Federal Register Volume 80, Number 124 (Monday, June 29, 2015)]
[Rules and Regulations]
[Pages 36927-36928]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-12668]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Part 383

[Docket No. 14-CRB-0002-NSR (2016-2020)]


Determination of Terms and Royalty Rates for Ephemeral 
Reproductions and Public Performance of Sound Recordings by a New 
Subscription Service

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Final rule.

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SUMMARY: The Copyright Royalty Judges publish final regulations that 
set the rates and terms for the use of sound recordings via digital 
transmissions made by new subscription services and for the making of 
ephemeral recordings to facilitate those transmissions during the 
period commencing January 1, 2016, and ending on December 31, 2020.

DATES: Effective: January 1, 2016.

FOR FURTHER INFORMATION CONTACT: Kimberly Whittle, Attorney Advisor, by 
telephone at (202) 707-7658, or by email at [email protected].

SUPPLEMENTARY INFORMATION: On December 12, 2014, the Copyright Royalty 
Judges (Judges) received a joint motion from SoundExchange, Inc. 
(``SoundExchange'') and Sirius XM Radio, Inc. (``Sirius XM'') to adopt 
a settlement of royalty rates and terms under Sections 112(e) and 114 
of the Copyright Act (``the Act'') for 2016-2020 for new subscription 
services of the type at issue in the captioned proceeding (i.e., music 
services provided to residential subscribers as part of a cable or 
satellite television bundle). See Joint Motion to Adopt Settlement at 1 
and 37 CFR 383.2(h). Sirius XM creates music and nonmusic programming 
and transmits it through its satellite digital audio radio service and 
other outlets. According to Sirius XM, it relies on the royalty rates 
and terms in 37 CFR part 383 for music programming it provides through 
the DiSH satellite television service. Joint Motion at 2. SoundExchange 
is a nonprofit organization that is jointly controlled by 
representatives of sound recording copyright owners and performers. Id. 
The Judges published the proposed settlement and requested comments 
from the public. See 80 Federal Register 2065 (January 15, 2015).

Background

    Section 801(b)(1) of the Act, among other things, authorizes the 
Judges to make determinations and adjustments of reasonable terms and 
rates of royalty payments as provided in Section 112(e) and 114 of the 
Act. Section 114(f)(2)(A) of the Act provides, among other things, 
that, proceedings under chapter 8 of the Act shall determine reasonable 
rates and terms of royalty payments for public performances of sound 
recordings by means of new subscription services. Section 112(e)(3) of 
the Act provides that proceedings under chapter 8 of the Act shall 
determine reasonable rates and terms of royalty payments for activities 
specified in Section 112(e)(1) of the Act (i.e., the making of no more 
than one phonorecord of a sound recording by a transmitting 
organization entitled to transmit to the public a performance of a 
sound recording under a statutory license in accordance with Section 
114(f) of the Act). The Judges have commenced two prior proceedings for 
five-year rate periods pursuant to these two provisions, both of which 
ended when the participants reached an agreement of the applicable 
rates and terms. See 72 FR 72253 (December 20, 2007) and 75 FR 14074 
(March 24, 2010). The current rate period expires December 31, 2015.
    Pursuant to section 803(b)(1)(A)(i)(III) of the Copyright Act, the 
Judges published in the Federal Register a notice commencing a rate 
determination proceeding for the 2016-2020 rate period and requesting 
interested parties to submit Petitions to Participate. See 79 FR 410 
(January 3, 2014). The Judges received Petitions to Participate from 
Music Reports, Inc. (``Music Reports''), National Music Publishers 
Association (``NMPA''), Sirius XM, Spotify USA, Inc., and 
SoundExchange. The Judges subsequently dismissed the petitions to 
participate of NMPA and Music Reports. See Order Dismissing Petition to 
Participate (Music Reports) (May 30, 2014) and Order Granting 
SoundExchange Motion to Deny the Petition to Participate of National 
Music Publishers' Association (April 30, 2014). On September 26, 2014, 
Spotify withdrew from the proceeding. See Notice of Withdrawal of 
Petition to Participate. As a result, Sirius XM and SoundExchange are 
the only remaining participants in this proceeding. Joint Motion at 2.
    Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to 
adopt rates and terms negotiated by ``some or all of the participants 
in a proceeding at any time during the proceeding'' provided the 
settling parties submit the negotiated rates and terms to the Judges 
for approval. That provision directs the Judges to provide those who 
would be bound by the negotiated rates and terms an opportunity to 
comment on the agreement. The Judges will adopt the negotiated rates 
and terms unless a participant in a proceeding objects and the Judges 
conclude that the agreement does not provide a reasonable basis for 
setting statutory rates or terms, the Judges adopt the negotiated rates 
and terms. 17 U.S.C. 801(b)(7)(A).
    Rates and terms the Judges adopt pursuant to this provision are 
binding on all owners of copyright in sound recordings and on all new 
subscription services performing the copyrighted sound recordings on 
digital audio channels transmitted by a cable or satellite television 
distribution service to residential customers, bundled with television 
channels as part of a ``basic'' service subscription package, and not 
available separately for a separate fee. See 37 CFR 383.2(h).
    The Judges ``may decline to adopt the agreement as a basis for 
statutory terms and rates for participants that are not parties to the 
agreement,'' only ``if any participant [to the proceeding] objects to 
the agreement and the [Judges] conclude, based on the record before 
them if one exists, that the agreement does not provide a reasonable 
basis for setting statutory terms or rates.'' 17 U.S.C. 
801(b)(7)(A)(ii). The Judges received no comments or objections in 
response to their request for comments published in the Federal 
Register.
    The Judges, therefore, by this notice, adopt as final regulations 
for the period commencing January 1, 2016, and ending on December 31, 
2020, the rates and terms agreed to by Sirius XM and SoundExchange for 
digital transmission of sound recordings by new subscription services 
and the making of ephemeral reproductions necessary to facilitate those 
transmissions.

List of Subjects in 37 CFR Part 383

    Copyright, Digital audio transmissions, Performance right, Sound 
recordings.

Final Regulation

    For the reasons set forth in the preamble, the Copyright Royalty 
Board amends 37 CFR part 383 as follows:

[[Page 36928]]

PART 383--RATES AND TERMS FOR SUBSCRIPTION TRANSMISSIONS AND THE 
REPRODUCTION OF EPHEMERAL RECORDINGS BY CERTAIN NEW SUBSCRIPTION 
SERVICES

0
1. The authority citation for part 383 continues to read as follows:

    Authority:  17 U.S.C. 112(e), 114, and 801(b)(1).


0
2. The heading for part 383 is revised to read as set forth above.


Sec.  383.1  [Amended]

0
3. Amend Sec.  383.1 as follows:
0
a. In paragraph (a), by removing ``from the inception of the Licensees' 
Services'' and adding in its place ``January 1, 2016,'' and by removing 
``2015'' and adding in its place ``2020''; and
0
b. In paragraph (c), by adding ``voluntary'' before ``license 
agreements''.


Sec.  383.2  [Amended]

0
4. Amend Sec.  383.2 as follows:
0
a. By removing paragraph (a);
0
b. By redesignating paragraphs (b) through (f) as paragraphs (a) 
through (e);
0
c. In newly redesignated paragraph (b), by adding ``made under this 
part pursuant to the statutory licenses'' before ``under 17 U.S.C.'', 
by removing ``or'' and adding in its place ``and'', and by removing 
``(g)'';
0
d. In newly redesignated paragraph (c), by removing ``from the 
inception of the Licensees' Services'' and adding in its place 
``January 1, 2016,'' and by removing ``2015'' and adding in its place 
``2020'';
0
e. In newly redesignated paragraph (d), by removing ``(h)'' and adding 
in its place ``(f)'';
0
f. By removing paragraph (g);
0
g. By redesignating paragraphs (h) through (j) as paragraphs (f) 
through (h); and
0
h. In newly redesignated paragraph (f)(3), by removing ``(h)'' and 
adding in its place ``(f)''.

0
5. Amend Sec.  383.3 as follows:
0
a. In paragraph (a) introductory text, by removing ``License'' and 
adding in its place ``statutory licenses'';
0
b. By revising paragraphs (a)(1) and (2); and
0
c. In paragraph (b), by removing ``, but payable pursuant to the 
applicable regulations for all years 2007 and earlier''.
    The revisions read as follows:


Sec.  383.3  Royalty fees for public performances of sound recordings 
and the making of ephemeral recordings.

    (a) * * *
    (1) For Stand-Alone Contracts, the following monthly payment per 
Subscriber to the Service of such Licensee:
    (i) 2016: $0.0179;
    (ii) 2017: $0.0185;
    (iii) 2018: $0.0190;
    (iv) 2019: $0.0196;
    (v) 2020: $0.0202;
    (2) For Bundled Contracts, the following monthly payment per 
Subscriber to the Service of such Licensee:
    (i) 2016: $0.0299;
    (ii) 2017: $0.0308;
    (iii) 2018: $0.0317;
    (iv) 2019: $0.0326;
    (v) 2020: $0.0336;
* * * * *


Sec.  383.4  [Amended]

0
6. Amend Sec.  383.4 in paragraph (a), by removing ``2007-2013'' and 
adding in its place ``2013-2017'' and by removing ``2015'' and adding 
in its place ``2020''.

    Dated: March 24, 2015.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.

    Approved by:
James H. Billington,
Librarian of Congress.
[FR Doc. 2015-12668 Filed 6-26-15; 8:45 am]
 BILLING CODE 1410-72-P