83 FR 24054 - Copyright Office Fees
LIBRARY OF CONGRESS
Copyright Office Federal Register Volume 83, Issue 101 (May 24, 2018)
Copyright Office
Federal Register Volume 83, Issue 101 (May 24, 2018)
| Page Range | 24054-24064 | |
| FR Document | 2018-11095 |
[Federal Register Volume 83, Number 101 (Thursday, May 24, 2018)] [Proposed Rules] [Pages 24054-24064] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-11095] ======================================================================= ----------------------------------------------------------------------- LIBRARY OF CONGRESS Copyright Office 37 CFR Part 201 [Docket No. 2018-4] Copyright Office Fees AGENCY: U.S. Copyright Office, Library of Congress. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Copyright Office is proposing the adoption of a new fee schedule. The proposed fees would help the Office recover a significant part, though not the whole, of its costs. The Office is providing an opportunity to the public to comment on the proposed changes before it submits the fee schedule to Congress. DATES: Written comments must be received no later than 11:59 p.m. Eastern Time on July 23, 2018. ADDRESSES: For reasons of government efficiency, the Copyright Office is using the regulations.gov system for the submission and posting of public comments in this proceeding. All comments are therefore to be submitted electronically through regulations.gov. Specific instructions for submitting comments are available on the Copyright Office website at https://www.copyright.gov/policy/feestudy2018. If electronic submission of comments is not feasible due to lack of access to a computer and/or the internet, please contact the Office using the contact information below for special instructions. FOR FURTHER INFORMATION CONTACT: Regan A. Smith, Deputy General Counsel, by email at resm@loc.gov, or Julie Saltman, Assistant General Counsel, by email at jusa@loc.gov, or either by telephone at 202-707- 8350. SUPPLEMENTARY INFORMATION: The Copyright Office is proposing the establishment of a new fee schedule for Copyright Office services. Below, the Office describes the legal authority for establishment and adjustment of its fees, describes the overarching methodology employed by the Office in studying its costs and establishing a new fee schedule, and describes and provides justification for each of the Office's proposed fee adjustments. I. Statutory Framework The Copyright Act provides for the funding of Copyright Office operations through user fees to cover its reasonable costs. The main provision authorizing the establishment and collection of such fees is 17 U.S.C. 708. Section 708(a) specifies that ``[f]ees shall be paid to the Register of Copyrights'' for the following services: (1) On filing an application under section 408 for registration of a copyright claim or for a supplementary registration, including the issuance of a certificate of registration if registration is made; (2) on filing each application for registration of a claim for renewal of a subsisting copyright under section 304(a), including the issuance of a certificate of registration if registration is made; (3) for the issuance of a receipt for a deposit under section 407; (4) for the recordation, as provided by section 205, of a transfer of copyright ownership or other document; (5) for the filing, under section 115(b), of a notice of intention to obtain a compulsory license; (6) for the recordation, under section 302(c), of a statement revealing the identity of an author of an anonymous or pseudonymous work, or for the recordation, under section 302(d), of a statement relating to the death of an author; (7) for the issuance, under section 706, of an additional certificate of registration; (8) for the issuance of any other certification; (9) for the making and reporting of a search as provided by section 705, and for any related services; (10) on filing a statement of account based on secondary transmissions of primary transmissions pursuant to section 119 or 122; and (11) on filing a statement of account based on secondary transmissions of primary transmissions pursuant to section 111. Fees for the services described in paragraphs (1) through (9) above are established in accordance with the following process. The Register must first ``conduct a study of the costs incurred by the Copyright Office for the registration of claims, the recordation of documents, and the provision of services.'' 17 U.S.C. 708(b)(1). The study must ``consider the timing of any adjustment in fees and the authority to use such fees consistent with the budget.'' Id. On the basis of that study, the Register may ``adjust fees'' by regulation ``to not more than that necessary to cover the reasonable costs incurred by the Copyright Office for'' its services ``plus a reasonable inflation adjustment to account for any estimated increase in costs.'' 17 U.S.C. 708(b)(2). The Register must then prepare a proposed fee schedule and submit it with the accompanying economic analysis to Congress. Id. 708(b)(5). The proposed schedule may go into effect after the end of 120 days after submitting it to Congress unless, within that 120 day period, Congress enacts a law stating in substance that Congress does not approve the schedule. Id. Importantly, section 708 also requires that fees under section 708(a)(1)-(9) ``be fair and equitable and give due consideration to the objectives of the copyright system.'' Id. 708(b)(4). This mandate makes clear that the Copyright Office must review more than the reasonable costs of services provided; instead, the Office must take into account the public interest in the nation's copyright scheme. In assessing these fees, the Register thus has ``wide discretion to adjust Copyright Office fees by regulation.'' Melville B. Nimmer & David Nimmer, Nimmer on Copyright, secs. 7.24, 7-232 (2013). The Copyright Act also authorizes the Register of Copyrights to establish fees for services other than those listed in paragraphs (1) through (9) of section 708(a). Though not subject to the procedural requirements of section 708(b), these fees are often evaluated and adjusted as part of the fee study mandated by section 708(b)--as is the case here. First, paragraphs (10) and (11) of section 708 provide that the Copyright Office's Licensing Division may charge filing fees for the statements of account that cable and satellite companies must submit under the statutory licenses in sections 111, 119, and 122 for the secondary transmissions of primary broadcast television transmissions. 17 U.S.C. 708(a)(10), (11). [[Page 24055]] These statement of account filing fees must ``be reasonable and may not exceed one-half of the cost necessary to cover reasonable expenses incurred by the Copyright Office for the collection and administration of the statements of account and any royalty fees deposited with such statements.'' Id. 708(a). Second, section 708 authorizes the Register to set fees for any ``other services,'' such as ``preparing copies of Copyright Office records,'' but these fees must be ``based on the cost of providing the service.'' Id. 708(a). Finally, various other provisions of the Copyright Act outside section 708 authorize the establishment of fees for specific services; all require fees to be set based on costs.\1\ --------------------------------------------------------------------------- \1\ See, e.g., 17 U.S.C. 104A(e)(1)(C) (``The Register of Copyrights is authorized to fix reasonable fees based on the costs of receipt, processing, recording, and publication of notices of intent to enforce a restored copyright and corrections thereto.''); id. 512(c)(2) (requiring the Register to ``maintain a current directory of agents'' designated to receive notifications of claimed infringement, and authorizing the ``payment of a fee by service providers to cover the costs of maintaining the directory''). --------------------------------------------------------------------------- In 1997, Congress amended section 708 specifically to grant the Register both wide discretion and permanent authority to set fees for the Office. See Public Law 105-80, 111 Stat. 1529, 1532 (1997); H. Rep. No. 105-25, at 16 (Mar. 17, 1997). Accordingly, the fee statute generally instructs the Register to set fees at a level that covers the Copyright Office's overall costs.\2\ In fulfilling that direction, the Office may set fees that account for indirect costs of providing services, and to use fee revenue from some services to offset losses from others for which the fees are kept low to encourage the public to take advantage of the service. --------------------------------------------------------------------------- \2\ See 17 U.S.C. 708(b)(1), (2) (providing that the Register ``may . . . adjust fees to not more than that necessary to cover the reasonable costs incurred by the Copyright Office'' for ``the registration of claims, the recordation of documents, and the provision of services''). In only limited circumstances does the statute specify that the fees for a specific service may not exceed the cost of providing that service. For instance, the statute specifies that the statement of account filing fees under paragraphs (10) and (11) of section 708(a) ``may not exceed one-half of the cost necessary to cover reasonable expenses incurred by the Copyright Office for the collection and administration of the statements of account.'' --------------------------------------------------------------------------- II. Cost Study Congress first gave the Register of Copyrights the authority to set and adjust Copyright Office fees in 1997. 17 U.S.C. 708(b) (1997). Since then, the Office has adjusted its fees every three to five years. The last such adjustment went into effect in May 2014.\3\ --------------------------------------------------------------------------- \3\ See 79 FR 15910 (Mar. 24, 2014). --------------------------------------------------------------------------- The Office initiated a new cost study in June 2017, contracting with a private accounting and consulting firm, Booz Allen Hamilton (``Booz Allen''), to analyze the Office's current as well as any expected future costs.\4\ In addition to studying the Office's costs, Booz Allen examined the Office's current fee structure, and provided an initial proposed fee schedule aimed to meet the Office's cost-recovery goals, as well as a fee modeling tool that the Office could use to adjust Booz Allen's initial proposed fee schedule to account for other policy goals.\5\ Booz Allen's fee model takes into account price elasticity of demand. The elasticity estimates are based on an analysis of the Office's data on price elasticity as well as an independent elasticity analysis based on raw data from the Office. Booz Allen's study is provided on the rulemaking web page, and describes in detail the methodology employed to assess the Office's costs and formulate the initial proposed fee schedule.\6\ --------------------------------------------------------------------------- \4\ See 17 U.S.C. 708(b)(2) (permitting fees to ``account for any estimated increase in costs''). \5\ See 17 U.S.C. 708(b)(4) (``Fees established under this subsection shall be fair and equitable and give due consideration to the objectives of the copyright system''). \6\ See Booz Allen Hamilton, 2017 Fee Study Report (Dec. 2017), available at https://www.copyright.gov/policy/feestudy2018 (``Booz Allen Study''). --------------------------------------------------------------------------- 1. Copyright Office Costs In assessing the costs of the Office's various functions, Booz Allen used an industry-standard, activity-based costing (ABC) model, using overhead, compensation, and volume as primary cost drivers; the particulars of that model are detailed in the Booz Allen Study.\7\ --------------------------------------------------------------------------- \7\ Booz Allen Study at 7-8. --------------------------------------------------------------------------- Some of the key data Booz Allen used in its study was from Fiscal Year 2016, although more current data was available for certain other variables, like salaries and employee estimates of time spent performing fee-related tasks. As the Booz Allen Study acknowledged, however, after Fiscal Year 2016 the Office ``engaged in a variety of regulatory reforms that are projected to increase the efficiency of various registration, recordation, or licensing activities,'' and that ``[b]ecause the ABC model is necessarily based on retrospective data, Booz Allen understands that the Office may choose to make adjustments to the cost-based fee recommendations to account for predicted changes in activity efficiency.'' \8\ --------------------------------------------------------------------------- \8\ Booz Allen Study at 5. --------------------------------------------------------------------------- Booz Allen's cost assessment also included anticipated expenses associated with the Office's ongoing information technology and business process modernization efforts. These efforts are generally described in two documents. In February 2016, the Copyright Office released its Provisional Information Technology Modernization Plan and Cost Analysis (``Provisional IT Plan'').\9\ Then, in September 2017, the Library of Congress and Copyright Office jointly issued a Modified U.S. Copyright Office Provisional IT Modernization Plan (``Modified IT Plan'') describing a centralized model for updating the Office's IT systems.\10\ Based on data compiled by the Library of Congress for the modified provisional IT plan, the Library's Office of the Chief Information Officer and the Copyright Office have assessed the costs of modernization over the next five years to be approximately $12-$15 million per year. --------------------------------------------------------------------------- \9\ U.S. Copyright Office, Provisional Information Technology Modernization Plan and Cost Analysis (Feb. 29, 2016), available at http://www.copyright.gov/reports/itplan/technology-report.pdf. \10\ Library of Congress & U.S. Copyright Office, Modified U.S. Copyright Office Provisional IT Modernization Plan (Sept. 1, 2017), available at http://www.copyright.gov/reports/itplan/modified-modernization-plan.pdf. --------------------------------------------------------------------------- In total, the Booz Allen study projected the Office's base year costs to be approximately $67.7 million, and estimated that costs will increase by approximately 1.8% in each subsequent year for the next five years, assuming no staffing changes. A detailed list of the five- year costs is found at Appendix A of the Booz Allen Study.\11\ --------------------------------------------------------------------------- \11\ Booz Allen Study at 23. --------------------------------------------------------------------------- 2. Booz Allen's Initial Proposed Fee Schedule In establishing a fee schedule, Booz Allen began with the Office's cost-recovery goals. Importantly, the Office has never recovered its full costs from user fees. Instead, the Office has traditionally recovered approximately 60% of its costs through fees; the remainder is provided through appropriated dollars from the U.S. treasury. Consistent with the Office's historical practice, the targeted cost recovery rate in the Booz Allen study was 60% for all costs, except those associated with IT modernization efforts. With respect to modernization costs, the Modified IT Plan noted that ``[p]ublic comments to the original Provisional IT Plan were generally supportive of increased fees for enhanced technological services.'' \12\ At the same time, ``public comments did not support Copyright IT modernization being fully fee-funded; in fact, many noted that it was premature to determine a fees/appropriated dollar [[Page 24056]] ratio and endorsed the notion that taxpayer support has an important role in modernizing Office IT systems.'' \13\ Anticipating that Congress will continue to support modernization efforts through increased appropriations, the Office's targeted cost recovery for modernization costs is 50%. (The costs associated with modernizing the Licensing Division's systems, however, were not considered when calculating the Licensing Division's fees.) --------------------------------------------------------------------------- \12\ Modified IT Plan at 31. \13\ Id. --------------------------------------------------------------------------- The Office is often asked why it does not set a goal of full-cost recovery from fees. The answer is that the Office's primary services-- including copyright registration and recordation--are mostly voluntary, and the significantly higher fees needed for total cost recovery would result in less use of those services to the detriment of the public interest in a robust registration system. In economics terms, demand for these services is elastic. Simply put, when fees are set too high, potential users--including non-profit or non-commercial users--will be unable or unwilling to pay and simply will stop participating at all and the public record will suffer. Booz Allen's fee model accounted for the price elasticity of demand for the Office's services. As Booz Allen noted, ``[t]he vast majority of the Office's revenue, 86.6%, is generated from fees deemed elastic.'' \14\ Booz Allen performed its own elasticity analysis using data on copyright registration volume, fee revenue, and fee changes from 1986 to 2018, and validated the resulting figures by referencing economic literature, econometric studies of European trademarks, and the fee setting report of the U.S. Patent and Trademark Office.\15\ That analysis found an elasticity measure of -0.32 for the Office's primary services, including registration and recordation. The analysis predicts, for instance, that ``raising the fee for recordation of a document from $105 to $125 would lead to a projected decrease of 662 documents recorded, a decline of 6%.'' \16\ --------------------------------------------------------------------------- \14\ Booz Allen Study at 8. \15\ Id. at 9. \16\ Id. at 8. --------------------------------------------------------------------------- Significantly, using this validated measure of elasticity, Booz Allen concluded that the goal of full-cost recovery was ``impossible to achieve.'' \17\ Booz Allen instead calculated that the maximum obtainable cost recovery for all of the Office services was 70.4%, with annual revenue of $47,735,256.\18\ At this level of revenue, the Office would not be able to recover its full costs even if the whole cost of IT modernization were funded through taxpayer dollars. Moreover, achieving this rate of cost recovery would be significantly detrimental to the public interest--it would cause a 25% drop in use of Office services, including registration and recordation.\19\ Thus, raising the fees to maximize revenue (even short of full cost recovery) would result in a far less robust public record of copyrighted works, and would undermine ``the objectives of the copyright system.'' 17 U.S.C. 708(b)(4). --------------------------------------------------------------------------- \17\ Booz Allen Hamilton, U.S. Copyright Office, Fee Study, Questions and Answers (Dec. 2017), available at https://www.copyright.gov/policy/fees2018 (``Booz Allen Q&A''). \18\ Booz Allen Q&A at 3. \19\ Id. --------------------------------------------------------------------------- At the same time, maintaining fees at a flat level is not an option either, given the increase in Office costs, including the cost of IT modernization. As a result, to maintain a steady level of cost recovery, Booz Allen recommended a weighted average increase of 38% to existing fees across all service categories.\20\ --------------------------------------------------------------------------- \20\ Booz Allen Study at 2-3. --------------------------------------------------------------------------- In recommending individual fees, Booz Allen reviewed the cost per transaction calculated in the ABC model, and then ``adjusted [it] to account for external considerations,'' including the Office's guidance regarding the relative demand for Office services.\21\ To optimize fee recovery, Booz Allen's schedule recommended below-cost fees for services with relatively elastic demand, and above-cost fees for certain services with relatively inelastic demand. This approach to cross-subsidizing fees is consistent with the authorizing statutes and Congress's intent in granting the Copyright Office broad fee-setting authority.\22\ Booz Allen's initial proposed fee schedule can be found in the Booz Allen Study.\23\ --------------------------------------------------------------------------- \21\ Id. at 7. \22\ See 17 U.S.C. 708(a), (b) (permitting establishment of fees ``to cover the reasonable costs incurred by the Copyright Office'' for ``the registration of claims, the recordation of documents, and the provision of services''). \23\ Booz Allen Study at 23-28. --------------------------------------------------------------------------- III. The Office's Schedule of Proposed Fees The Office has independently evaluated and adjusted the Booz Allen schedule, which focused principally on the economic analysis, based on our assessment of fairness, equity, the objectives of the Copyright Act \24\ and the Office's policy goals, as well as general guidance from the Office of Management and Budget,\25\ and the Government Accountability Office.\26\ --------------------------------------------------------------------------- \24\ See 17 U.S.C. 708(b)(4) (requiring that fees for services specified in paragraphs (1)-(9) of subsection (a) ``be fair and equitable and give due consideration to the objectives of the copyright system''). \25\ Office of Mgmt. and Budget, Circular No. A-25 (2017), available at https://www.whitehouse.gov/wp-content/uploads/2017/11/Circular-025.pdf. \26\ U.S. Gov't Accountability Office, Federal User Fees: A Design Guide (May 2008), available at http://www.gao.gov/assets/210/203357.pdf. --------------------------------------------------------------------------- Critically, the Office analyzed potential changes to fees under 708(a)(1)-(9) to ensure that they are ``fair and equitable and give due consideration to the objectives of the copyright system,'' as required by the statute. The voluntary registration and recordation system is vital to a number of national objectives. They facilitate the marketplace for licensing and other valuable uses of works, as well as business transactions that rely on protection of copyrighted works. Additionally, while the system is voluntary in that copyright protection exists independent of registration, registration provides crucial benefits for copyright owners. Before bringing a lawsuit for infringement of a U.S. work, for example, a copyright owner is required to receive either a registration or refusal from the Office. And copyright owners must obtain a timely registration to qualify for certain legal presumptions and to seek statutory damages and attorney's fees in litigation. Ensuring that most copyright owners can register their works thus is very important to providing access to judicial remedies. Due to the public interest inherent in the copyright system, the Office struck a balance between being a prudent fiduciary of public funds and creating a fee schedule that supports the Office's policy goal of promoting creativity and protecting creators' rights. The following sections set forth the Office's proposed fees, and explain any changes from current fees. In addition, the Office has provided its revised fee model summary on the rulemaking page, which was developed using Booz Allen's fee modeling tool, and provides additional detail regarding the bases for the proposed fee schedule. Although the Office has not set forth specific proposed rule language, the proposed changes would be made to the fee tables that currently appear in 37 CFR 201.3. When it promulgates the final rule, the Office will reorganize the fee tables in that provision to make them easier to read, including by deleting the unnecessary definitions that appear in section 201.3(b). Overall, the Office has determined that fees should increase an average of 41% to account for inflationary [[Page 24057]] increases and the expected cost of information technology modernization over the next several years. The Office anticipates the higher fees will decrease overall fee processing by approximately 14% at least temporarily, but that this decrease will be offset by a more appropriate level of cost recovery. In total, the Office estimates that revenues generated by these proposed fees will be roughly $41 million per year. A. Registration, Recordation and Related Services 1. Basic Registrations Section 708(a)(1) requires the payment of fees ``on filing each application under section 408 for registration of a copyright claim or for a supplementary registration, including the issuance of a certificate of registration if registration is made.'' 17 U.S.C. 708(a)(1). The Office proposes the following increases to the fees for basic registration applications, to be codified in 37 CFR 201.3(a). ---------------------------------------------------------------------------------------------------------------- Calculated Basic registrations Current fees Proposed fees cost of ($) ($) service ($) ---------------------------------------------------------------------------------------------------------------- (1) Registration of a claim in an original work of authorship: Standard Application (electronic only)...................... 55 75 90 Single Application (electronic only)........................ 35 55 86 Paper Application........................................... 85 125 118 ---------------------------------------------------------------------------------------------------------------- As the Booz Allen study noted, basic registration applications produce the highest volume of all the Office's fee generating services; at the same time, examination of those applications is, in aggregate, the costliest activity the Office performs.\27\ Currently, cost recovery for single and standard applications stands at 51%,\28\ and has fallen well below the target established during the prior fee study of 71% for electronic claims and 66% for paper applications.\29\ As explained, however, the Office cannot establish fees at a level that recovers full costs, because demand for these registration services is elastic. --------------------------------------------------------------------------- \27\ Booz Allen Study at 13. \28\ Id. \29\ U.S. Copyright Office, Proposed Schedule and Analysis of Copyright Fees to Go Into Effect on or About April 1, 2014, at 15-16 (Nov. 13, 2013), available at https://www.copyright.gov/docs/newfees/USCOFeeStudy-Nov13.pdf (``2014 Fee Study''). --------------------------------------------------------------------------- While in the past, the fee for electronic applications was kept artificially low to incentivize electronic filings,\30\ today the vast majority of registration applications are now filed electronically.\31\ The current cost of processing and examining a Standard Application ($91) far outstrips the current fee ($55). The same is true of the Single Application, which has a cost ($86) not significantly different from the Standard Application. In this context, the Office believes it is appropriate to return the fees for electronic filing to a level more commensurate with the Office's costs, while not unduly disincentivizing the registration of copyrights. --------------------------------------------------------------------------- \30\ 2014 Fee Study at 16 (noting that ``after the launch of the eCO system, the current fee of $35 was lowered from the then- existing fee of $45 to incentivize electronic filings''). \31\ See U.S. Copyright Office, Registration Processing Times, https://www.copyright.gov/registration/docs/processing-times-faqs.pdf (last visited Apr. 5, 2018). --------------------------------------------------------------------------- To begin to close the shortfall, the Office is proposing to increase fees to $75 for Standard Applications to achieve an 83% cost recovery based on current costs. In addition, the Office proposes raising the fee for the electronic Single Application, a special application intended for individual creators who file the simplest types of claims, to $55, which achieves a 52% cost recovery based on current costs. The latter fee thus represents a significant subsidy intended for smaller creators. Turning to the paper application, the Office believes it continues to be appropriate to differentiate between paper and electronic applications, given the substantially higher costs of processing paper applications, and as a means of incentivizing use of the electronic system. The Office accordingly proposes a fee of $125 for paper applications. The Office has concluded that these proposed fees are ``fair and equitable, and give due consideration to the objectives of the copyright system.'' 17 U.S.C. 708(b)(4). 2. Group Registrations In general, each registration application should be limited to a unitary ``work of authorship.'' Under the Copyright Act, however, the Register of Copyrights may allow groups of related works to be registered with one application and one filing fee--a procedure known as ``group registration.'' See 17 U.S.C. 408(c)(1). These fees are also authorized by 17 U.S.C. 708(a)(1). The Office proposes the following schedule of fees, to be codified in 37 CFR 201.3(b). ---------------------------------------------------------------------------------------------------------------- Calculated Group registrations Current fees ($) Proposed fees cost of ($) service ($) ---------------------------------------------------------------------------------------------------------------- (2) Group registration of contributions to 85.............................. 85 71 periodicals. (3) Group registration of serials, per issue, with a minimum of 2 issues: (i) Electronic filing..................... New Fee......................... 35 76 (ii) Paper filing (Form SE/Group)......... 25.............................. 70 101 (4) Group registration of newspapers/ newsletters: (i) Electronic filing for group newspapers 80 (group newspapers)........... 95 64 and group newsletters. New Fee (group newsletters). (ii) Paper filing for group newsletters 80.............................. 125 88 (Form G/DN). (3) Group registration of unpublished New Fee......................... 100 284 photographs (GRUPH) (up to 750 published photographs). (4) Group registration of published \32\ 65 (paper)................. 100 284 photographs (GRPPH) (up to 750 published 55 (electronic)................. photographs). [[Page 24058]] (5) Group registration of updates and 65 (paper)...................... 250 \33\ N/A revisions to photographic databases. 55 (electronic)................. (6) Group registration of updates and 85.............................. 500 694 revisions to non-photographic databases. (7) Group registration of unpublished works... New Fee......................... 85 \34\ N/A (8) Group registration of secure test items... New Fee......................... 75 883 ---------------------------------------------------------------------------------------------------------------- \32\ The paper option for group registration of published photographs was eliminated effective February 20, 2018. See 83 FR 2542 (Jan. 18, 2018). \33\ Insufficient volume to calculate cost. \34\ As discussed below, processing costs for this option are predicted to be equivalent to the processing cost of group registration of contributions to periodicals. As the data above suggests, processing group registrations can be costly and time-consuming. Indeed, the Office's cost recovery for several categories of group registrations has been quite low. For example, based on the data above, the Office currently recovers only 12% of the cost of group registration of updates and revisions to non- photographic databases through fees for that service. The high cost of processing group registrations is compounded by the fact that group registrations are the second highest volume service the Copyright Office provides according to the Booz Allen Study. Thus, the Office proposes increasing many of the group registration fees to achieve a higher rate of cost recovery. The Office understands the demand for many of these services to be relatively inelastic, especially because, on a per-work basis, the fees are relatively low. Accordingly, achieving a higher rate of recovery should not result in a significant decrease in registrations. The Office has proposed fees that are fair and equitable, and give due consideration to the objectives of the copyright system. The Office recommends keeping the current fee for group registration of contributions to periodicals the same ($85). The Office estimates that this service costs $71, but maintaining the fee at $85 allows the Office to achieve less than full cost recovery in other categories of fees. The Office proposes adopting two fees for group registration of serials: A new fee of $35 per issue for electronic applications and a fee of $70 per issue for paper applications (which is an increase from the current $25 fee for all applications). The calculated cost for electronic applications is $76, and the cost for paper applications is $101. The two-tiered fee structure reflects the fact that paper applications are more costly to process than electronic applications. The slightly higher fees should recover more of the costs of providing this service without greatly decreasing demand. Charging a higher amount for paper applications will also encourage the use of the electronic application, which is more efficiently processed.\35\ --------------------------------------------------------------------------- \35\ The Office has recently published a notice of proposed rulemaking to update the regulations governing group registration of serials; among other things, the rule would eliminate the paper registration option. 83 FR 22896 (May 17, 2018). Accordingly, if that rule is finalized prior to the adoption of a new fee schedule, the separate paper application fee would not be adopted. --------------------------------------------------------------------------- The Office also proposes somewhat higher fees for group registration of newspapers and group registration of newsletters. Currently the filing fee is $80. The estimated cost of processing the paper applications for group registration of newsletters is $88,\36\ while the Office estimates that electronic applications for this service cost $64 to process.\37\ The Office proposes raising the fee for electronic applications for group registration of newspapers and newsletters to $95. The $95 fee provides sufficient cost recovery and should not result in a significant decrease in registrations. The Office proposes raising the fee for paper applications for group registration of newsletters to $125.\38\ This increase achieves full cost recovery and should not significantly decrease registrations. Due to the relative inelasticity of the demand for these services, the Office anticipates that the excess revenue from these fees can subsidize some of the more costly group registrations for which full cost recovery is impracticable. Indeed, the group registration option for newspapers and newsletters provides significant cost savings for publishers, who can pay one fee for group registrations rather than file multiple separate registrations per month. --------------------------------------------------------------------------- \36\ The paper application for group registration of newspapers was eliminated in a rule that became effective on March 1, 2018. See 83 FR 4144 (Jan. 30, 2018). Though the Office has insufficient data to calculate the costs of applications for group registration of newspapers, the Office estimates that the costs for this category of group registrations would be similar to those associated with group registrations of newsletters. \37\ The fee for electronic forms is lower because it does not include the per-transaction cost incurred by the Receipt Analysis and Control (RAC) department that is included in the paper application fee. This is because RAC's involvement in processing electronic forms is minimal. RAC is responsible for scanning and ingesting the information in paper applications. \38\ The Office has recently published a notice of proposed rulemaking to update the regulations governing group registration of newsletters; among other things, the rule would eliminate the paper registration option. 83 FR 22902 (May 17, 2018). Accordingly, if that rule is finalized before the adoption of a new fee schedule, the separate paper application fee would not be adopted. --------------------------------------------------------------------------- The Office also proposes increased filing fees for group registration of published photographs (``GRPPH'') and group registration of unpublished photographs (``GRUPH''), both of which use the Office's electronic registration system. These services currently are provided for a $55 fee. The Office estimates, however, that the cost for providing each of these services is $284. The Office accordingly proposes offering both services for $100. The Office believes these new fees will achieve greater cost recovery while maintaining a relatively low fee on a per-work basis for photographers. Specifically, the per-photograph cost is currently $0.07 if the applicant registers the maximum number of photographs (i.e., 750). The proposed new fee raises that cost only slightly to $0.12 per photograph if the maximum number of works are registered. The Office is proposing significant fee increases for the group registration options that apply to databases. The Office currently charges $85 per application for group registration of updates and revisions to non-photographic databases, and $65 (paper application) or $55 (electronic application) per application for group registration of updates and revisions to photographic databases. These applications are quite costly to process, in part because there is no limit on the number of works that may be included in each submission. The Office calculates that applications for group [[Page 24059]] registration of updates and revisions to non-photographic databases cost $694 to process. Although there was not sufficient volume to calculate the exact cost of processing applications for group registration of updates and revisions to photographic databases, the Office estimates that the cost is equivalent to that for non- photographic databases, because both permit an unlimited number of works to be registered in a single application. For example, the Office noted in its final rule for Group Registration of Photographs, 83 FR 2542 (Jan. 18, 2018), that ``at least one database provider registered 57,040 photographs between 2012 and 2016.'' Id. at 2544 n.15 (explaining that this provider filed 29 applications during this period with each containing an average of 1966 photographs). Accordingly, the Office proposes increasing the fees for both services to achieve better cost recovery. Specifically, the Office proposes a $500 fee for group registration of updates and revisions to non-photographic databases. This registration option can be used to register up to three months' worth of content, which means that the per-day cost over the course of three months is only $5.55. The Office proposes increasing the fee for group registration of updates and revisions to photographic databases to $250. The Office also proposes several fees for new group registration options that have recently been or will soon be established through rulemakings. The Office proposes a fee of $75 for group registration of secure test items. This service is estimated to cost $883; however, the Office set this fee to be the same as the Standard Application, and anticipates that the cost will be covered to some degree by the secure test examination fee, discussed below. The Office has also recently proposed a new group registration option for unpublished works,\39\ and expects to finalize that rulemaking before the new fee schedule is finalized. The Office also is considering expanding the categories of works eligible for group registration through rulemaking in the near future. The Office expects to propose that the fee for these services be $85, which is derived from the analogous fee for group registration of contributions to periodicals, which is expected to impose approximately similar costs. --------------------------------------------------------------------------- \39\ See 82 FR 47415 (Oct. 12, 2017). --------------------------------------------------------------------------- 3. Other Registration Services The Office provides other, less commonly used registration services, as authorized by various provisions of the Copyright Act. The Office proposes the following schedule of fees for such services, to be codified in 37 CFR 201.3(b). ---------------------------------------------------------------------------------------------------------------- Calculated Other registration service Current fees ($) Proposed fees cost of ($) service ($) ---------------------------------------------------------------------------------------------------------------- (8) Supplementary registration: (i) Electronic filing................... New fee........................... 100 365 (ii) Paper filing (Form CA)............. 130............................... 150 413 (9) Renewal registrations: (i) Form RE............................. 100............................... 125 148 (ii) Addendum to Form RE................ 100............................... 100 67 (10) Preregistration of certain unpublished 140............................... 200 71 works. (11) Registration of vessel designs/ Correction of an existing registration for a vessel design: (i) Form D-VH........................... 400............................... 500 6,528 (ii) Form DC............................ 100............................... 100 71 (12) Registration of mask work (Form MW).... 120............................... 150 2,176 (13) Registration of a claim in a restored 85................................ 100 380 copyright (Form GATT). (14) Secure test examination fee (per staff 250............................... 250 900 member, per hour). (15) Request for reconsideration (per claim): (i) First appeal........................ 250............................... 350 729 (ii) Second appeal...................... 500............................... 700 4,470 (16) Special handling surcharge for registration: (i) Expedited processing of application. 800............................... 1000 67 (ii) Fee for each non-expedited claim 50................................ 50 \40\ N/A using the same deposit. (17) Full term retention of published registration deposit: (i) Physical deposit.................... 540............................... 540 360 (ii) Electronic deposit................. New Fee........................... 220 220 (18) Request for special relief from deposit New Fee........................... 85 78 requirements. (19) Voluntary cancellation of registration. New Fee........................... 150 370 (20) Matching unidentified deposit to New Fee........................... 40 389 deposit ticket claim. ---------------------------------------------------------------------------------------------------------------- Several of these registration services are low volume services with a high cost per transaction, reflecting their time-consuming nature. The Office generally proposes raising such fees to achieve higher cost recovery. For example, the fee for both paper and electronic supplementary registration is currently $130, though the cost per transaction is $413 for the paper form and $365 for the electronic form.\41\ The Office accordingly proposes setting the fee for the paper supplementary registration application (Form CA) at $150, and the fee for electronic supplementary registration at $100 to achieve somewhat better cost recovery.\42\ --------------------------------------------------------------------------- \40\ Insufficient volume to calculate costs. \41\ As of July 2017, supplementary registration generally must be effectuated through the electronic application, although for some works the paper form (Form CA) must still be filed. See 37 CFR 202.6(e)(1)-(3). \42\ The fee for electronic forms is lower because it does not include per-transaction cost incurred by the RAC department that is included in the Form CA fee, given that RAC's involvement in processing electronic forms is minimal. RAC is responsible for scanning and ingesting the information in paper applications. --------------------------------------------------------------------------- There were approximately 500 renewal registrations filed in FY 2016, each of which cost the Office $148 to process. The Office accordingly proposes raising the current fee for Form RE from $100 to $125. The Office proposes keeping the fee for the addendum to the renewal application at $100. Although processing an [[Page 24060]] addendum costs the Office $67, this is a relatively low volume service and the excess funds allow for greater overall cost recovery. Although it costs the Office $71 to process applications for preregistration of unpublished works, the Office proposes raising the fee for this service from $140 to $200 to offset the losses associated with some of the Office's other services. The likely stakeholder group affected by this increase is less price sensitive, and the works at issue are largely commercially viable. This is consistent with the Register's discretionary authority to use fee revenue to offset losses to further ``the objectives of the copyright system,'' 17 U.S.C. 708(b)(4), as discussed above. Registrations of vessel hull designs (Form D-VH) are relatively low volume, and cost the Office $6,528 to process, so the Office proposes raising the fee for such a registration from $400 to $500, although this only achieves an 7% cost recovery. The Office proposes keeping the fee for correcting a vessel design registration (Form DC) at $100-- although it costs the Office $71 to process--to offset some of the lost revenue. The Office spends $2,176 to process a registration of a mask work (Form MW), so the Office proposes raising the fee from $120 to $150 to achieve slightly higher cost recovery. The Office will examine its processes to determine how to more efficiently process vessel hull design and mask work registrations. For a registration of a claim in a restored copyright (Form GATT), the Office proposes raising the fee from $85 to $100 to better cover the $380 cost of this service. For the time being, the Office will maintain the secure test examination fee (per staff member per hour) at $250, although it costs the Office $900 per staff member per hour. The Office recently adopted an interim rule establishing a group registration option that lets applicants submit an unlimited number of secure test items,\43\ and the Office is assessing the burdens this new procedure is having on the operations of the Registration Program. The Office may adjust this fee in a later rulemaking based on this assessment. --------------------------------------------------------------------------- \43\ 82 FR 52224, 52226-27 (Nov. 13, 2017). --------------------------------------------------------------------------- The Office provides an opportunity for a user to appeal a denied registration, which is called a request for reconsideration. Because the work necessary to process these requests is more time consuming than current pricing reflects, the Office proposes raising the fee for the first request for an appeal from $250 to $350 per claim, to offset some of the $729 cost associated with this service, which requires work by attorney-advisors. The second request for an appeal involves extensive work by senior attorneys at the agency, resulting in a cost to the Office of $4,470 per appeal. Accordingly the Office proposes raising the fee for a second appeal from $500 to $700 per claim. The Office set several new fees as part of this fee study. The Office is authorized to grant special relief from the registration deposit requirements in certain circumstances,\44\ and the fee for such requests is set at $85. Because this is a new fee, Booz Allen assessed the time spent on this activity per employee \45\ and the number of requests per year; analyzing that data under the ABC model, Booz Allen estimated that this service costs the Office $78. The fee therefore seeks to achieve full cost recovery. Booz Allen used this same method to calculate the cost per transaction for voluntary cancellation of registration--a process by which the Office may cancel the registration of invalid claims \46\--at $370, largely because of the involvement of senior attorneys within the Registration Program in this process. The Office proposes setting this new fee at $150 to achieve a reasonable cost recovery for this service. --------------------------------------------------------------------------- \44\ See U.S. COPYRIGHT OFFICE, COMPENDIUM OF U.S. COPYRIGHT OFFICE PRACTICES, sec. 1508.8 (3d ed. 2017). \45\ These requests are reviewed by attorney advisors. \46\ COMPENDIUM (THIRD) 1807.1. --------------------------------------------------------------------------- The Office also proposes a fee of $40 per half-hour for the service of matching ``deposit ticket'' claims with unidentified deposits. A ``deposit ticket'' claim is one where the applicant submits an online application and filing fee, but is separately required to submit a physical deposit copy of the work to the Office. When sending the physical deposit copy, applicants are required to attach a system- generated shipping slip to the copy, so that the Office can quickly match the deposit copy to the application.\47\ Often, however, applicants either submit deposit copies without the shipping slip, or include multiple deposits and multiple slips in one package without attaching each slip to its respective deposit. In such cases, Copyright Office personnel expend time manually matching the unidentified deposits to the applications. Although the Office has not previously charged a fee for this service, we intend to do so with the adoption of this new fee schedule. The estimated cost for this service is $38 per half hour, so this fee seeks to achieve full cost recovery. --------------------------------------------------------------------------- \47\ Id. 1508.2. --------------------------------------------------------------------------- The Office proposes to raise the special handling surcharge for expedited processing of a registration application from $800 to $1,000 per claim. The description of the fee as a ``surcharge'' is to make clear that it applies in addition to any other applicable fee. The actual cost to the Office for this service is estimated to be $67, which reflects the fact that payment of the special handling surcharge simply moves the requester towards the front of the processing queue. But demand for this service is highly inelastic, so the fees collected help offset the cost of other registration services. The Office proposes keeping the fee for full-term retention of physical published copyright deposits at $540. This accounts for projected storage costs for the full span of the full term retention period, which is currently 75 years, but which the Office has indicated it will extend to 95 years to conform with the Copyright Term Extension Act.\48\ The Office proposes establishing a new fee of $220 for full- term retention of electronic copyright deposits, which seeks to recover the full estimated cost of such a service, $221. --------------------------------------------------------------------------- \48\ 82 FR 38859, 38863 n.22 (Aug. 16, 2017). --------------------------------------------------------------------------- 4. Recordation The Office's other major service is recordation, which allows individuals to record various documents pertinent to ownership of copyrights. Recordation is important to the Office's mission, because it creates a public record of copyright ownership. Various provisions of the Copyright Act authorize the establishment of recordation fees. See, e.g., 17 U.S.C. 708(a)(4), (6). The Office proposes the following fee schedule, to be codified at 37 CFR 201.3(c). [[Page 24061]] ---------------------------------------------------------------------------------------------------------------- Calculated Recordation and related services Current fees ($) Proposed fees cost of ($) service ($) ---------------------------------------------------------------------------------------------------------------- (1) Recordation of a document, including a notice of intention to enforce a restored copyright: (i) Base fee (includes 1 title): Paper............................... 105............................... 125 155 Electronic.......................... New fee........................... 95 131 (ii) Additional transfer (per transfer). 105............................... 95 \49\ N/A (iii) Additional titles, paper (per 35................................ 60 105 group of 10 or fewer titles). (iv) Additional titles, electronic: \50\ 1 to 50 additional titles........... 60................................ 60 51 to 500 additional titles......... 225............................... 225 501 to 1,000 additional titles...... 390............................... 390 1,001 to 10,000 additional titles... 555............................... 555 10,001 or more additional titles.... 5,500............................. 5,500 .............. (2) Recordation of notice of termination: (i) Base fee (includes 1 title)......... 105............................... 125 552 (ii) Additional titles (per group of 10 35................................ 60 105 or fewer titles). (3) Special handling surcharge for 550............................... 700 92 recordation of documents. ---------------------------------------------------------------------------------------------------------------- The Office recorded 10,865 documents in Fiscal Year 2016, at an estimated cost of $155 per document. The Office recommends raising the base recordation fee, which includes the cost of indexing one title, to $125 to recover a projected 80% of the cost of this service. --------------------------------------------------------------------------- \49\ Insufficient volume to calculate costs. \50\ These fees were explained and established as part of a separate fee study submitted to Congress in August 2017, and became effective in December 2017. See U.S. Copyright Office, Proposed Schedule and Analysis of Copyright Recordation Fee to Go into Effect on or About December 18, 2017 (Aug. 18, 2017), available at https://www.copyright.gov/policy/feestudy2017/fee-study-2017.pdf. --------------------------------------------------------------------------- The Office is also proposing a new fee for electronic submissions to record documents, in anticipation of the development of a new electronic recordation system at some point during the period that the new fee schedule is in place. The fee for such submissions is set at $95, based on our current estimate of processing costs ($131). This will achieve a 73% cost recovery. This electronic filing fee is set lower than the paper filing fee to discount the RAC costs associated with paper filings (i.e., handling and transporting, scanning, data entry) that do not accrue for electronic filings. The Office may, however, reassess its costs once the system is developed and adjust the fee accordingly.\51\ --------------------------------------------------------------------------- \51\ Because this fee is for a system that is not yet in place, and for which the Office has no volume data, the Office's current fee model, as provided on the website, does not attempt to model the effects of this fee on the Office's overall fee receipts. --------------------------------------------------------------------------- The Office proposes reducing the per-transfer fee for additional transfers to $95. This fee is charged when a single document involves multiple transfers or other transactions among more than two parties. Each transaction has to be separately indexed by the recordation specialist, and so the Office charges an additional fee for each additional transaction in the document. That fee has traditionally been the same as the base fee for recordation of a document. But that base fee accounts for the costs incurred by RAC upon intake of the paper document. Because those costs are incurred only once per document, a lower fee is appropriate for additional transfers in that document. When recording a document, the Office must index information about each of the copyrighted works to which the document pertains.\52\ This indexing is, to a large degree, a manual process, and the Office charges fees beyond the base fee for works in a document beyond the first one (referred to as ``additional titles'') to cover these processing costs. The Office proposes increasing the fees for additional titles submitted by paper. When the works associated with the document are submitted only on paper form, they must be manually typed into the Office's database to be indexed. This, obviously, involves significant processing costs, but the Office has traditionally kept the fee low so as to avoid discouraging use of the recordation system. In recent years, however, the Office began accepting electronic title lists that are submitted with paper documents. These are much easier for the Office to process. Although initially the Office's fee schedule did not distinguish between titles submitted electronically and on paper, in December 2017, the Office adopted a much lower fee structure for electronic title list, which it does not propose adjusting further here.\53\ Accordingly the Office is comfortable increasing the fee for additional titles submitted solely on paper, to better account for the manual processing costs and as a further inducement to submitting electronic title lists. (To be clear, when a remitter submits a paper document and an electronic title list, they will pay the paper fee for the first title ($105) and the electronic fee for the additional titles (starting at $60 for up to the first 50 additional titles)). --------------------------------------------------------------------------- \52\ See, e.g., 17 U.S.C. 205. \53\ See 82 FR 52221 (Nov. 13, 2017). --------------------------------------------------------------------------- The Office proposes an increase for the fee for recordation of notices of termination to $125 (from $105), which achieves only 23% cost recovery. This accounts for the fact that the Office charges a flat fee for this service, though some terminations require additional indexing work, such as when the notice terminates multiple transfers of ownership of the same work. The Office also engages in a more robust examination of terminations, to ensure that authors are complying with the relevant time limits set forth in the statute, and can cure any defects in a timely manner. The special handling surcharge for recordation of documents has been raised from $550 to $700, which will be charged in addition to the otherwise applicable processing fee. This is consistent with special handling surcharges the Office charges for other services. [[Page 24062]] 5. Record Retrieval, Search, and Certification Services Record Retrieval, Search, and Certification Services (RRC) provides copies of completed and in-process registration and recordation records, search reports, and registration deposit materials. By the time this fee schedule goes into effect, RRC will also have taken on responsibility for providing retrieval, search, and certification services for Licensing Division records. RRC also administers the Office's Records Reading Room and the Historic Public Records Program. The Office proposes the following fee schedule for records retrieval, search, and certification services, to be codified at 37 CFR 201.3(c). ---------------------------------------------------------------------------------------------------------------- Record retrieval, search, and Proposed fees Calculated cost of service certification services Current fees ($) ($) ($) ---------------------------------------------------------------------------------------------------------------- (1) Provision of an additional 40......................... 55 285. certificate of registration. (2) Estimate of retrieval or search 200........................ 200 \54\ Varied. fee (flat fee; credited to retrieval or search fee). (3) Retrieval and processing of 200........................ 200 276. Copyright Office records (per hour) (1 hour minimum for paper records; half hour minimum for electronic records, with quarter hour increments). (4) Copying fee (all media)........... Varied..................... 12 ........................... (5) Search report prepared from 200........................ 200 661. official records, including Licensing Division records (per hour, 2 hour minimum). (6) Certification of copyright office 200........................ 200 314. records, including search reports (per hour, 1 hour minimum). (7) Litigation statement (Form LS).... New Fee.................... 100 102. (8) Special handling fee for records Varied..................... 500 ........................... retrieval, search, and certification services (per hour, 1 hour minimum, applies in lieu of hourly fees above). ---------------------------------------------------------------------------------------------------------------- Location and retrieval of records can be time-consuming, and requires specialized knowledge. In addition, as the table above indicates, the costs of the RRC's services vary greatly, largely because the complexity of each service varies. At the same time, requesters often are seeking multiple services (e.g., location and retrieval of records, creation of a search report, and certification of that report). --------------------------------------------------------------------------- \54\ The cost of creating an estimate per hour is roughly equivalent to the hourly cost for retrieval ($318) and/or search ($661), as applicable. --------------------------------------------------------------------------- In general, the proposed fee schedule above is intended to be simpler and easier for the public to understand and for the Office to apply. For instance, currently the fee charged for copying of Copyright Office records varies widely based on the type of media involved (paper, audiocassette, videocassette, CD etc.). The Office above proposes simplifying the copying fee to $12 regardless of media. Similarly, rather than try to distinguish among these various services, the Office proposes maintaining a simpler fee structure by maintaining a $200-per-hour fee in place for most RRC services. The creation of an estimate itself can be costly, as it requires Office personnel to conduct a preliminary search of the Office's records. The Office proposes maintaining that fee at a flat $200 level, which can be credited against the final search and retrieval fee. The Office proposes raising the fee for an additional certificate of registration from $40 to $55 to achieve greater cost recovery; this service costs $285 to provide. The Office also proposes setting a new fee of $100 for litigation statements,\55\ to achieve almost full cost recovery. --------------------------------------------------------------------------- \55\ See 37 CFR 201.2; COMPENDIUM (THIRD) 2400. --------------------------------------------------------------------------- In addition, the Office currently charges three different special handling fees for the different kinds of services RRC provides. The Office instead proposes adopting a standard $500 hourly fee for special handling of records retrieval, search, and certification services, which would apply in lieu of the $200-per-hour fees that are otherwise charged for such services. Because payment of the special handling fee simply moves the requester towards the front of the queue, the revenues from this service exceed the costs. Those excess revenues, however, help offset the cost of other services. B. Miscellaneous Fees The Office proposes the following miscellaneous fees, as authorized by 17 U.S.C. 708 and other provisions of the Copyright Act, to be codified at 37 CFR 201.3(e). --------------------------------------------------------------------------- \56\ Insufficient volume to calculate costs. ---------------------------------------------------------------------------------------------------------------- Calculated Miscellaneous fees Current fees Proposed fees cost of ($) ($) service ($) ---------------------------------------------------------------------------------------------------------------- (1) Receipt for mandatory deposit without registration (17 30 30 \56\ N/A U.S.C. 407).................................................... (2) Notice to libraries and archives (17 U.S.C. 108(h))......... 50 50 \57\ N/A Each additional title....................................... 20 20 \58\ N/A (3) Designation of agent (17 U.S.C. 512(c)(2)).................. 6 6 52 (4) Request to remove PII from online catalog: Initial request............................................. 130 100 \59\ N/A Reconsideration of denied request........................... 60 60 \60\ N/A (5) Service charge for Federal Express mailing.................. 45 45 35 (6) Service charge for delivery of documents via fax............ 1 1 35 (7) Overdraft of deposit account................................ 250 285 280 (8) Dishonored replenishment check for deposit account.......... 100 500 513 (9) Uncollectable or nonnegotiable payment...................... 30 115 110 ---------------------------------------------------------------------------------------------------------------- [[Page 24063]] The Office had insufficient volume to compute a transaction cost for the following fees, and therefore recommends keeping the cost of these services at their current levels or reduce them: Receipt for mandatory deposit without registration; notice to libraries and archives under 17 U.S.C. 108(h); initial request to remove requested personally identifiable information (PII) from an online catalogue; and reconsideration of a denied request to remove PII. --------------------------------------------------------------------------- \57\ Insufficient volume to calculate costs. \58\ Insufficient volume to calculate costs. \59\ Insufficient volume to calculate costs. \60\ Insufficient volume to calculate costs. --------------------------------------------------------------------------- Taking into account labor and costs, the Office estimates that it costs $35 to deliver documents by fax and by Federal Express mailing. The Office proposes that the $1 and $45 fees for such services, respectively, remain unchanged. The Office proposes raising the payment processing service charges to account for a near complete cost recovery for those types of charges. Thus, the Office proposes raising the fee for overdraft of a deposit account from $250 to $285 to account for the estimated cost of $280. The Office proposes raising the fee for dishonored replenishment checks for deposit accounts from $100 to $500 to account for the $513 cost of such service. And the Office proposes raising the fee for uncollectable or nonnegotiable payments from $30 to $115 to recover the $110 it costs the Office to address such a situation. Finally, the Office proposes keeping the fee for designation of an agent under 17 U.S.C. 512(c)(2) at $6, despite its $52 cost. That higher cost figure largely reflects the cost of staff time during initial development of a new electronic designation of agent system, and the Office anticipates that the ongoing costs will be lower now that system development is largely complete. C. Licensing Division Fees The Licensing Division administers the various statutory licenses and related provisions, and also provides services to the Copyright Royalty Board, which oversees rate determinations and disbursements for certain statutory and compulsory licenses. Specifically, the Licensing Division administers statutory licenses for secondary transmissions by cable systems (section 111), statutory licenses for ephemeral recordings (section 112); statutory licenses for the public perforce of sound recordings by means of a digital audio transmission (section 114), compulsory licenses for making and distributing phonorecords (section 115), statutory licenses for secondary transmissions for satellite carriers (section 119), statutory licenses for secondary transmissions by satellite carriers for local retransmissions (section 122), and statutory obligation for distribution of digital audio recording devices and media (section 1003). The Licensing Division collects fees for the filing of cable and satellite statements of account, to reimburse some of the costs of administering the cable and satellite licenses. It deducts its operating costs from the royalty fees it collects, and invests any remaining balance in interest-bearing securities with the U.S. Treasury for later distribution to copyright owners. Unlike other fees collected by the Copyright Office, the revenue from filing fees under sections 111, 119, and 122 may not exceed 50% of certain costs associated with the Licensing Division's administration of the statutory licenses under those provisions. See 17 U.S.C. 708(a). The Office proposes the following Licensing Division fees to be codified at 37 CFR 201.3(f). ---------------------------------------------------------------------------------------------------------------- Calculated Licensing division fees Current fees Proposed fees cost of ($) ($) service ($) ---------------------------------------------------------------------------------------------------------------- (1) Statement of account for cable systems (17 U.S.C. 111): (i) Form SA1................................................ 15 20 369 (ii) Form SA2............................................... 20 30 369 (iii) Form SA3.............................................. 725 1,000 612 (2) Statement of account for satellite systems (17 U.S.C. 119 or 725 1,000 3,186 122)........................................................... (3) Statement of account amendment for cable systems, satellite 150 50 428 systems, and digital audio recording device distributors....... (4) Recordation of a notice of intention to make and distribute 75 75 291 phonorecords (17 U.S.C. 115)................................... Additional titles (per group of 1 to 10 titles) (paper 20 20 .............. filing).................................................... Additional titles (per group of 1 to 100 titles) (electronic 10 10 .............. filing).................................................... (5) Initial or amended notice of use of sound recordings (17 40 50 \61\ 300 U.S.C. 112 and 114)............................................ (6) Recordation of certain contracts by cable television 50 50 \62\ N/A stations located outside the 48 contiguous states.............. ---------------------------------------------------------------------------------------------------------------- For the filing of statements of account for cable systems under the section 111 statutory license, the Office has attempted to streamline the fees and improve cost recovery. The Office proposes a flat fee for paper and electric versions of Forms SA 1, 2, and 3. The fees for SA1 and SA2 recover a negligible amount of the costs associated with those forms, but the Office is proposing only modest increases because the companies that file those statements are relatively less able to bear increases in costs. At the same time, the Office proposes that the fee for Form SA3, which tends to be filed by companies with a greater ability to bear a higher filing fee, be set above the cost associated with that Form to subsidize the other fees in this category. The Office proposes a fee increase for statements of account for satellite systems achieve a somewhat greater cost recovery. --------------------------------------------------------------------------- \61\ This amount reflects the calculated cost for processing an initial notice of use of sound recordings. There is insufficient data to calculate the cost of an amended notice. \62\ Insufficient volume to calculate costs. --------------------------------------------------------------------------- The fee for an amended statement of account filed by cable systems, satellite systems, and digital audio recording device distributors will be reduced to $50. The Office notes, however, that it intends to charge that amendment fee in a wider range of circumstances. In particular, the Office does not always charge the amendment fee when Office examination uncovers an error that requires the filing of an amended statement of account; the Office plans to regularly charge that fee in the future. The Office has proposed fees associated with section 111, 119, and [[Page 24064]] 122 licenses to remain, in the aggregate over the next five year period, below 50% of the Office's reasonable expenses to administer the cable and satellite licensing programs. Because the costs of administering these licenses are evaluated based on when the fees are identified, not when the statements of account are submitted, the estimates for these costs are to some degree uncertain. However, the Office has taken into account that the volume of cable statements of account projected to continue to decrease, as they have done for a number of years. In particular, based on the current trend line, the Office estimates that cable system filings will decrease from just over 5,000 in the most recent fiscal year to approximately 3,765 by fiscal year 2023. (Satellite filings are already fairly low, with only 9 in fiscal year 2017.) Moreover, future volume of filings may decrease more rapidly than the Office has estimated, especially if the cable industry undergoes significant consolidation. Because of this uncertainty, the Office has proposed fees for cable and satellite statements of account in a conservative manner, to ensure that, over the five-year period, revenues do not breach the 50% threshold established by statute. In particular, based on current estimates, fee recovery is estimated to be 44% in fiscal year 2019, and will decrease to 39% in fiscal year 2023. The Office will continue to monitor costs and filing volume to ensure that it complies with the statutory limit. The Office proposes keeping the fee for section 115 notices at their current levels. As the Booz Allen Study notes, ``subsequent to FY2016, the Office received a significant increase in electronic Section 115 notices with large numbers of titles, and has devoted resources to developing a new system to ingest and process these large filings.'' \63\ Though the model references projections for FY 2016, the Office notes that it has received a significant increase in the numbers of additional titles in subsequent years. To be sure, the Office acknowledges that the amount of fees received from such filings significantly exceeds the costs of processing them.\64\ But, as the Booz Allen Study notes, ``there is significant additional added convenience that the electronic filing option provides to filers.'' \65\ Indeed, the legal benefits obtained by licensees with the filing of section 115 notices with the Office are noteworthy--namely, the ability to obtain a statutory license to make and reproduce musical works, without knowing the identify of any of the copyright owners of those works and without paying those copyright owners the otherwise- required royalty.\66\ As a result, demand for this service appears to be relatively inelastic, and maintaining fees at the current level helps the keep registration and recordation fees relatively low. This in turn benefits copyright owners and users alike, by making it more likely that ownership of musical works (and other works) can be identified. Finally, the fee may largely be obviated by pending legislation.\67\ --------------------------------------------------------------------------- \63\ Booz Allen Study at 18. \64\ Id. \65\ Id. \66\ 17 U.S.C. 115(b)(1); see also id. 115(c)(1) (``To be entitled to receive royalties under a compulsory license, the copyright owner must be identified in the registration or other public records of the Copyright Office. The owner is entitled to royalties for phonorecords made and distributed after being so identified, but is not entitled to recover for any phonorecords previously made and distributed.''). \67\ See Music Modernization Act, H.R. 5447, 115th Cong. (2018); see also Music Modernization Act, S.2334, 115th Cong. (2018). --------------------------------------------------------------------------- The Office proposes raising the fee for notices under sections 112 and 114 from $40 to $50 to achieve greater recovery of the $300 cost associated with such notices. The Office did not have sufficient data to evaluate the fee for recordation of certain contracts by cable television stations located outside the 48 contiguous states, so the Office proposes keeping it at $50. IV. Technical Amendments The Office will adopt technical amendments as needed to conform existing regulations to the changes proposed in this notice. Dated: May 18, 2018. Sarang Vijay Damle, General Counsel and Associate Register of Copyrights. [FR Doc. 2018-11095 Filed 5-23-18; 8:45 am] BILLING CODE 1410-30-P
![24054 Federal Register / Vol. 83, No. 101 / Thursday, May 24, 2018 / Proposed Rules
radio, flashing light, or other means, the FOR FURTHER INFORMATION CONTACT: (11) on filing a statement of account
operator of a vessel must proceed as Regan A. Smith, Deputy General based on secondary transmissions of
directed. If permission is granted to Counsel, by email at resm@loc.gov, or primary transmissions pursuant to
enter the safety zone, all persons and Julie Saltman, Assistant General section 111.
vessels must comply with the Counsel, by email at jusa@loc.gov, or Fees for the services described in
instructions of the Captain of the Port either by telephone at 202–707–8350. paragraphs (1) through (9) above are
Maryland-National Capital Region or SUPPLEMENTARY INFORMATION: The established in accordance with the
designated representative and proceed Copyright Office is proposing the following process. The Register must
as directed while within the zone. establishment of a new fee schedule for first ‘‘conduct a study of the costs
(4) Enforcement officials. The Coast Copyright Office services. Below, the incurred by the Copyright Office for the
Guard may be assisted in the patrol and Office describes the legal authority for registration of claims, the recordation of
enforcement of the zone by Federal, establishment and adjustment of its fees, documents, and the provision of
State, and local agencies. describes the overarching methodology services.’’ 17 U.S.C. 708(b)(1). The study
(d) Enforcement periods. This section employed by the Office in studying its must ‘‘consider the timing of any
will be enforced from 8 p.m. to 10:30 costs and establishing a new fee adjustment in fees and the authority to
p.m. on June 30, 2018, and if necessary schedule, and describes and provides use such fees consistent with the
due to inclement weather, from 8 p.m. justification for each of the Office’s budget.’’ Id. On the basis of that study,
to 10:30 p.m. on July 1, 2018. the Register may ‘‘adjust fees’’ by
proposed fee adjustments.
Dated: May 2, 2018.
regulation ‘‘to not more than that
I. Statutory Framework necessary to cover the reasonable costs
Joseph B. Loring,
The Copyright Act provides for the incurred by the Copyright Office for’’ its
Captain, U.S. Coast Guard, Captain of the services ‘‘plus a reasonable inflation
Port Maryland-National Capital Region. funding of Copyright Office operations
through user fees to cover its reasonable adjustment to account for any estimated
[FR Doc. 2018–10900 Filed 5–23–18; 8:45 am] increase in costs.’’ 17 U.S.C. 708(b)(2).
costs. The main provision authorizing
BILLING CODE 9110–04–P
the establishment and collection of such The Register must then prepare a
fees is 17 U.S.C. 708. Section 708(a) proposed fee schedule and submit it
with the accompanying economic
LIBRARY OF CONGRESS specifies that ‘‘[f]ees shall be paid to the
analysis to Congress. Id. 708(b)(5). The
Register of Copyrights’’ for the following
proposed schedule may go into effect
Copyright Office services:
after the end of 120 days after
(1) On filing an application under
submitting it to Congress unless, within
37 CFR Part 201 section 408 for registration of a
that 120 day period, Congress enacts a
copyright claim or for a supplementary
[Docket No. 2018–4] law stating in substance that Congress
registration, including the issuance of a
does not approve the schedule. Id.
certificate of registration if registration Importantly, section 708 also requires
Copyright Office Fees
is made; that fees under section 708(a)(1)–(9) ‘‘be
AGENCY: U.S. Copyright Office, Library (2) on filing each application for fair and equitable and give due
of Congress. registration of a claim for renewal of a consideration to the objectives of the
ACTION: Notice of proposed rulemaking. subsisting copyright under section copyright system.’’ Id. 708(b)(4). This
304(a), including the issuance of a mandate makes clear that the Copyright
SUMMARY: The Copyright Office is certificate of registration if registration Office must review more than the
proposing the adoption of a new fee is made; reasonable costs of services provided;
schedule. The proposed fees would help (3) for the issuance of a receipt for a instead, the Office must take into
the Office recover a significant part, deposit under section 407; account the public interest in the
though not the whole, of its costs. The (4) for the recordation, as provided by nation’s copyright scheme. In assessing
Office is providing an opportunity to the section 205, of a transfer of copyright these fees, the Register thus has ‘‘wide
public to comment on the proposed ownership or other document; discretion to adjust Copyright Office
changes before it submits the fee (5) for the filing, under section 115(b), fees by regulation.’’ Melville B. Nimmer
schedule to Congress. of a notice of intention to obtain a & David Nimmer, Nimmer on Copyright,
DATES: Written comments must be compulsory license; secs. 7.24, 7–232 (2013).
received no later than 11:59 p.m. (6) for the recordation, under section The Copyright Act also authorizes the
Eastern Time on July 23, 2018. 302(c), of a statement revealing the Register of Copyrights to establish fees
ADDRESSES: For reasons of government identity of an author of an anonymous for services other than those listed in
efficiency, the Copyright Office is using or pseudonymous work, or for the paragraphs (1) through (9) of section
the regulations.gov system for the recordation, under section 302(d), of a 708(a). Though not subject to the
submission and posting of public statement relating to the death of an procedural requirements of section
comments in this proceeding. All author; 708(b), these fees are often evaluated
comments are therefore to be submitted (7) for the issuance, under section and adjusted as part of the fee study
electronically through regulations.gov. 706, of an additional certificate of mandated by section 708(b)—as is the
Specific instructions for submitting registration; case here. First, paragraphs (10) and (11)
comments are available on the (8) for the issuance of any other of section 708 provide that the
sradovich on DSK3GMQ082PROD with PROPOSALS
Copyright Office website at https:// certification; Copyright Office’s Licensing Division
www.copyright.gov/policy/ (9) for the making and reporting of a may charge filing fees for the statements
feestudy2018. If electronic submission search as provided by section 705, and of account that cable and satellite
of comments is not feasible due to lack for any related services; companies must submit under the
of access to a computer and/or the (10) on filing a statement of account statutory licenses in sections 111, 119,
internet, please contact the Office using based on secondary transmissions of and 122 for the secondary transmissions
the contact information below for primary transmissions pursuant to of primary broadcast television
special instructions. section 119 or 122; and transmissions. 17 U.S.C. 708(a)(10), (11).
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![Federal Register / Vol. 83, No. 101 / Thursday, May 24, 2018 / Proposed Rules 24055
These statement of account filing fees accounting and consulting firm, Booz process modernization efforts. These
must ‘‘be reasonable and may not Allen Hamilton (‘‘Booz Allen’’), to efforts are generally described in two
exceed one-half of the cost necessary to analyze the Office’s current as well as documents. In February 2016, the
cover reasonable expenses incurred by any expected future costs.4 In addition Copyright Office released its Provisional
the Copyright Office for the collection to studying the Office’s costs, Booz Information Technology Modernization
and administration of the statements of Allen examined the Office’s current fee Plan and Cost Analysis (‘‘Provisional IT
account and any royalty fees deposited structure, and provided an initial Plan’’).9 Then, in September 2017, the
with such statements.’’ Id. 708(a). proposed fee schedule aimed to meet Library of Congress and Copyright
Second, section 708 authorizes the the Office’s cost-recovery goals, as well Office jointly issued a Modified U.S.
Register to set fees for any ‘‘other as a fee modeling tool that the Office Copyright Office Provisional IT
services,’’ such as ‘‘preparing copies of could use to adjust Booz Allen’s initial Modernization Plan (‘‘Modified IT
Copyright Office records,’’ but these fees proposed fee schedule to account for Plan’’) describing a centralized model
must be ‘‘based on the cost of providing other policy goals.5 Booz Allen’s fee for updating the Office’s IT systems.10
the service.’’ Id. 708(a). Finally, various model takes into account price elasticity Based on data compiled by the Library
other provisions of the Copyright Act of demand. The elasticity estimates are of Congress for the modified provisional
outside section 708 authorize the based on an analysis of the Office’s data IT plan, the Library’s Office of the Chief
establishment of fees for specific on price elasticity as well as an Information Officer and the Copyright
services; all require fees to be set based independent elasticity analysis based on Office have assessed the costs of
on costs.1 raw data from the Office. Booz Allen’s modernization over the next five years
In 1997, Congress amended section study is provided on the rulemaking to be approximately $12–$15 million
708 specifically to grant the Register web page, and describes in detail the per year.
both wide discretion and permanent methodology employed to assess the In total, the Booz Allen study
authority to set fees for the Office. See Office’s costs and formulate the initial projected the Office’s base year costs to
Public Law 105–80, 111 Stat. 1529, 1532 proposed fee schedule.6 be approximately $67.7 million, and
(1997); H. Rep. No. 105–25, at 16 (Mar. estimated that costs will increase by
17, 1997). Accordingly, the fee statute 1. Copyright Office Costs approximately 1.8% in each subsequent
generally instructs the Register to set In assessing the costs of the Office’s year for the next five years, assuming no
fees at a level that covers the Copyright various functions, Booz Allen used an staffing changes. A detailed list of the
Office’s overall costs.2 In fulfilling that industry-standard, activity-based five-year costs is found at Appendix A
direction, the Office may set fees that costing (ABC) model, using overhead, of the Booz Allen Study.11
account for indirect costs of providing compensation, and volume as primary
cost drivers; the particulars of that 2. Booz Allen’s Initial Proposed Fee
services, and to use fee revenue from
model are detailed in the Booz Allen Schedule
some services to offset losses from
others for which the fees are kept low Study.7 In establishing a fee schedule, Booz
to encourage the public to take Some of the key data Booz Allen used Allen began with the Office’s cost-
advantage of the service. in its study was from Fiscal Year 2016, recovery goals. Importantly, the Office
although more current data was has never recovered its full costs from
II. Cost Study available for certain other variables, like user fees. Instead, the Office has
Congress first gave the Register of salaries and employee estimates of time traditionally recovered approximately
Copyrights the authority to set and spent performing fee-related tasks. As 60% of its costs through fees; the
adjust Copyright Office fees in 1997. 17 the Booz Allen Study acknowledged, remainder is provided through
U.S.C. 708(b) (1997). Since then, the however, after Fiscal Year 2016 the appropriated dollars from the U.S.
Office has adjusted its fees every three Office ‘‘engaged in a variety of treasury. Consistent with the Office’s
to five years. The last such adjustment regulatory reforms that are projected to historical practice, the targeted cost
went into effect in May 2014.3 increase the efficiency of various recovery rate in the Booz Allen study
The Office initiated a new cost study registration, recordation, or licensing was 60% for all costs, except those
in June 2017, contracting with a private activities,’’ and that ‘‘[b]ecause the ABC associated with IT modernization
model is necessarily based on efforts. With respect to modernization
1 See, e.g., 17 U.S.C. 104A(e)(1)(C) (‘‘The Register
retrospective data, Booz Allen costs, the Modified IT Plan noted that
of Copyrights is authorized to fix reasonable fees understands that the Office may choose ‘‘[p]ublic comments to the original
based on the costs of receipt, processing, recording,
and publication of notices of intent to enforce a to make adjustments to the cost-based Provisional IT Plan were generally
restored copyright and corrections thereto.’’); id. fee recommendations to account for supportive of increased fees for
512(c)(2) (requiring the Register to ‘‘maintain a predicted changes in activity enhanced technological services.’’ 12 At
current directory of agents’’ designated to receive efficiency.’’ 8 the same time, ‘‘public comments did
notifications of claimed infringement, and
authorizing the ‘‘payment of a fee by service Booz Allen’s cost assessment also not support Copyright IT modernization
providers to cover the costs of maintaining the included anticipated expenses being fully fee-funded; in fact, many
directory’’). associated with the Office’s ongoing noted that it was premature to
2 See 17 U.S.C. 708(b)(1), (2) (providing that the
information technology and business determine a fees/appropriated dollar
Register ‘‘may . . . adjust fees to not more than that
necessary to cover the reasonable costs incurred by 4 See 17 U.S.C. 708(b)(2) (permitting fees to 9 U.S. Copyright Office, Provisional Information
the Copyright Office’’ for ‘‘the registration of claims,
the recordation of documents, and the provision of ‘‘account for any estimated increase in costs’’). Technology Modernization Plan and Cost Analysis
sradovich on DSK3GMQ082PROD with PROPOSALS
services’’). In only limited circumstances does the
5 See 17 U.S.C. 708(b)(4) (‘‘Fees established under (Feb. 29, 2016), available at http://
statute specify that the fees for a specific service this subsection shall be fair and equitable and give www.copyright.gov/reports/itplan/technology-
may not exceed the cost of providing that service. due consideration to the objectives of the copyright report.pdf.
For instance, the statute specifies that the statement system’’). 10 Library of Congress & U.S. Copyright Office,
of account filing fees under paragraphs (10) and (11) 6 See Booz Allen Hamilton, 2017 Fee Study Modified U.S. Copyright Office Provisional IT
of section 708(a) ‘‘may not exceed one-half of the Report (Dec. 2017), available at https:// Modernization Plan (Sept. 1, 2017), available at
cost necessary to cover reasonable expenses www.copyright.gov/policy/feestudy2018 (‘‘Booz http://www.copyright.gov/reports/itplan/modified-
incurred by the Copyright Office for the collection Allen Study’’). modernization-plan.pdf.
and administration of the statements of account.’’ 7 Booz Allen Study at 7–8. 11 Booz Allen Study at 23.
3 See 79 FR 15910 (Mar. 24, 2014). 8 Booz Allen Study at 5. 12 Modified IT Plan at 31.
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![24056 Federal Register / Vol. 83, No. 101 / Thursday, May 24, 2018 / Proposed Rules
ratio and endorsed the notion that with annual revenue of $47,735,256.18 the Office’s policy goals, as well as
taxpayer support has an important role At this level of revenue, the Office general guidance from the Office of
in modernizing Office IT systems.’’ 13 would not be able to recover its full Management and Budget,25 and the
Anticipating that Congress will continue costs even if the whole cost of IT Government Accountability Office.26
to support modernization efforts modernization were funded through Critically, the Office analyzed
through increased appropriations, the taxpayer dollars. Moreover, achieving potential changes to fees under
Office’s targeted cost recovery for this rate of cost recovery would be 708(a)(1)–(9) to ensure that they are
modernization costs is 50%. (The costs significantly detrimental to the public ‘‘fair and equitable and give due
associated with modernizing the interest—it would cause a 25% drop in consideration to the objectives of the
Licensing Division’s systems, however, use of Office services, including copyright system,’’ as required by the
were not considered when calculating registration and recordation.19 Thus, statute. The voluntary registration and
the Licensing Division’s fees.) raising the fees to maximize revenue recordation system is vital to a number
The Office is often asked why it does (even short of full cost recovery) would of national objectives. They facilitate the
not set a goal of full-cost recovery from result in a far less robust public record marketplace for licensing and other
fees. The answer is that the Office’s of copyrighted works, and would valuable uses of works, as well as
primary services—including copyright undermine ‘‘the objectives of the business transactions that rely on
registration and recordation—are mostly copyright system.’’ 17 U.S.C. 708(b)(4). protection of copyrighted works.
voluntary, and the significantly higher At the same time, maintaining fees at Additionally, while the system is
fees needed for total cost recovery a flat level is not an option either, given voluntary in that copyright protection
would result in less use of those the increase in Office costs, including exists independent of registration,
services to the detriment of the public the cost of IT modernization. As a registration provides crucial benefits for
interest in a robust registration system. result, to maintain a steady level of cost copyright owners. Before bringing a
In economics terms, demand for these recovery, Booz Allen recommended a lawsuit for infringement of a U.S. work,
services is elastic. Simply put, when weighted average increase of 38% to for example, a copyright owner is
fees are set too high, potential users— existing fees across all service required to receive either a registration
including non-profit or non-commercial categories.20 or refusal from the Office. And
users—will be unable or unwilling to In recommending individual fees, copyright owners must obtain a timely
pay and simply will stop participating Booz Allen reviewed the cost per registration to qualify for certain legal
at all and the public record will suffer. transaction calculated in the ABC presumptions and to seek statutory
Booz Allen’s fee model accounted for model, and then ‘‘adjusted [it] to damages and attorney’s fees in
the price elasticity of demand for the account for external considerations,’’ litigation. Ensuring that most copyright
Office’s services. As Booz Allen noted, including the Office’s guidance owners can register their works thus is
regarding the relative demand for Office very important to providing access to
‘‘[t]he vast majority of the Office’s
services.21 To optimize fee recovery, judicial remedies. Due to the public
revenue, 86.6%, is generated from fees
Booz Allen’s schedule recommended interest inherent in the copyright
deemed elastic.’’ 14 Booz Allen
below-cost fees for services with system, the Office struck a balance
performed its own elasticity analysis
relatively elastic demand, and above- between being a prudent fiduciary of
using data on copyright registration
cost fees for certain services with public funds and creating a fee schedule
volume, fee revenue, and fee changes
relatively inelastic demand. This that supports the Office’s policy goal of
from 1986 to 2018, and validated the
approach to cross-subsidizing fees is promoting creativity and protecting
resulting figures by referencing
consistent with the authorizing statutes creators’ rights.
economic literature, econometric The following sections set forth the
studies of European trademarks, and the and Congress’s intent in granting the
Copyright Office broad fee-setting Office’s proposed fees, and explain any
fee setting report of the U.S. Patent and changes from current fees. In addition,
Trademark Office.15 That analysis found authority.22 Booz Allen’s initial
proposed fee schedule can be found in the Office has provided its revised fee
an elasticity measure of ¥0.32 for the model summary on the rulemaking
Office’s primary services, including the Booz Allen Study.23
page, which was developed using Booz
registration and recordation. The III. The Office’s Schedule of Proposed Allen’s fee modeling tool, and provides
analysis predicts, for instance, that Fees additional detail regarding the bases for
‘‘raising the fee for recordation of a The Office has independently the proposed fee schedule. Although the
document from $105 to $125 would lead evaluated and adjusted the Booz Allen Office has not set forth specific
to a projected decrease of 662 schedule, which focused principally on proposed rule language, the proposed
documents recorded, a decline of the economic analysis, based on our changes would be made to the fee tables
6%.’’ 16 assessment of fairness, equity, the that currently appear in 37 CFR 201.3.
Significantly, using this validated objectives of the Copyright Act 24 and When it promulgates the final rule, the
measure of elasticity, Booz Allen Office will reorganize the fee tables in
concluded that the goal of full-cost 18 Booz Allen Q&A at 3. that provision to make them easier to
recovery was ‘‘impossible to achieve.’’ 17 19 Id. read, including by deleting the
Booz Allen instead calculated that the 20 Booz Allen Study at 2–3. unnecessary definitions that appear in
maximum obtainable cost recovery for 21 Id.at 7. section 201.3(b).
all of the Office services was 70.4%, 22 See 17 U.S.C. 708(a), (b) (permitting
Overall, the Office has determined
sradovich on DSK3GMQ082PROD with PROPOSALS
establishment of fees ‘‘to cover the reasonable costs
incurred by the Copyright Office’’ for ‘‘the
that fees should increase an average of
13 Id.
registration of claims, the recordation of documents, 41% to account for inflationary
14 Booz Allen Study at 8. and the provision of services’’).
15 Id. at 9. 23 Booz Allen Study at 23–28. 25 Office of Mgmt. and Budget, Circular No. A–25
16 Id. at 8. 24 See 17 U.S.C. 708(b)(4) (requiring that fees for (2017), available at https://www.whitehouse.gov/
17 Booz Allen Hamilton, U.S. Copyright Office, services specified in paragraphs (1)–(9) of wp-content/uploads/2017/11/Circular-025.pdf.
Fee Study, Questions and Answers (Dec. 2017), subsection (a) ‘‘be fair and equitable and give due 26 U.S. Gov’t Accountability Office, Federal User
available at https://www.copyright.gov/policy/ consideration to the objectives of the copyright Fees: A Design Guide (May 2008), available at
fees2018 (‘‘Booz Allen Q&A’’). system’’). http://www.gao.gov/assets/210/203357.pdf.
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![24064 Federal Register / Vol. 83, No. 101 / Thursday, May 24, 2018 / Proposed Rules
122 licenses to remain, in the aggregate without knowing the identify of any of DATES: Comments are due on or before
over the next five year period, below the copyright owners of those works and July 9, 2018. Reply comments are due
50% of the Office’s reasonable expenses without paying those copyright owners on or before August 7, 2018.
to administer the cable and satellite the otherwise-required royalty.66 As a ADDRESSES: You may submit comments,
licensing programs. Because the costs of result, demand for this service appears identified by IB Docket No. 18–86, by
administering these licenses are to be relatively inelastic, and any of the following methods:
evaluated based on when the fees are maintaining fees at the current level • Federal Communications
identified, not when the statements of helps the keep registration and Commission’s website: http://
account are submitted, the estimates for recordation fees relatively low. This in apps.fcc.gov/ecfs/. Follow the
these costs are to some degree uncertain. turn benefits copyright owners and instructions for submitting comments.
However, the Office has taken into users alike, by making it more likely • People with Disabilities: Contact the
account that the volume of cable that ownership of musical works (and FCC to request reasonable
statements of account projected to other works) can be identified. Finally, accommodations (accessible format
continue to decrease, as they have done the fee may largely be obviated by documents, sign language interpreters,
for a number of years. In particular, pending legislation.67 CART, etc.) by email: FCC504@fcc.gov
based on the current trend line, the The Office proposes raising the fee for or phone: 202–418–0530 or TTY: 202–
Office estimates that cable system filings notices under sections 112 and 114 from 418–0432.
will decrease from just over 5,000 in the $40 to $50 to achieve greater recovery of For detailed instructions for
most recent fiscal year to approximately the $300 cost associated with such submitting comments and additional
3,765 by fiscal year 2023. (Satellite notices. The Office did not have information on the rulemaking process,
filings are already fairly low, with only sufficient data to evaluate the fee for see the SUPPLEMENTARY INFORMATION
9 in fiscal year 2017.) Moreover, future recordation of certain contracts by cable section of this document.
volume of filings may decrease more television stations located outside the FOR FURTHER INFORMATION CONTACT:
rapidly than the Office has estimated, 48 contiguous states, so the Office Merissa Velez, 202–418–0751.
especially if the cable industry proposes keeping it at $50.
undergoes significant consolidation. SUPPLEMENTARY INFORMATION: This is a
Because of this uncertainty, the Office IV. Technical Amendments summary of the Commission’s Notice of
has proposed fees for cable and satellite Proposed Rulemaking (NPRM), IB
The Office will adopt technical
statements of account in a conservative Docket No. 18–86; FCC 18–44, adopted
amendments as needed to conform
manner, to ensure that, over the five- and released on April 17, 2018. The full
existing regulations to the changes
year period, revenues do not breach the text of this document is available at
proposed in this notice.
50% threshold established by statute. In https://transition.fcc.gov/Daily_
Dated: May 18, 2018. Releases/Daily_Business/2018/db0417/
particular, based on current estimates,
fee recovery is estimated to be 44% in Sarang Vijay Damle, FCC-18-44A1.pdf. The full text of this
fiscal year 2019, and will decrease to General Counsel and Associate Register of document is also available for
39% in fiscal year 2023. The Office will Copyrights. inspection and copying during business
continue to monitor costs and filing [FR Doc. 2018–11095 Filed 5–23–18; 8:45 am] hours in the FCC Reference Information
volume to ensure that it complies with BILLING CODE 1410–30–P Center, Portals II, 445 12th Street SW,
the statutory limit. Room CY–A257, Washington, DC 20554.
The Office proposes keeping the fee To request materials in accessible
for section 115 notices at their current FEDERAL COMMUNICATIONS formats for people with disabilities,
levels. As the Booz Allen Study notes, COMMISSION send an email to FCC504@fcc.gov or call
‘‘subsequent to FY2016, the Office the Consumer & Governmental Affairs
received a significant increase in 47 CFR Parts 2 and 25 Bureau at 202–418–0530 (voice), 202–
electronic Section 115 notices with large [IB Docket No. 18–86; FCC 18–44]
418–0432 (TTY).
numbers of titles, and has devoted Comment Filing Requirements
resources to developing a new system to Streamlining Licensing Procedures for
ingest and process these large filings.’’ 63 Small Satellites Pursuant to §§ 1.415 and 1.419 of the
Though the model references Commission’s rules, 47 CFR 1.415,
projections for FY 2016, the Office notes AGENCY: Federal Communications 1.419, interested parties may file
that it has received a significant increase Commission. comments and reply comments on or
in the numbers of additional titles in ACTION: Proposed rule. before the dates indicated on the first
subsequent years. To be sure, the Office page of this document. Comments may
acknowledges that the amount of fees SUMMARY: In this document, the Federal be filed using the Commission’s
received from such filings significantly Communications Commission proposes Electronic Comment Filing System
exceeds the costs of processing them.64 to streamline its rules to facilitate the (ECFS). See Electronic Filing of
But, as the Booz Allen Study notes, deployment of a class of satellites Documents in Rulemaking Proceedings,
‘‘there is significant additional added known as small satellites, which have 63 FR 24121 (1998).
convenience that the electronic filing relatively short duration missions. • Electronic Filers. Comments may be
option provides to filers.’’ 65 Indeed, the filed electronically using the internet by
66 17 U.S.C. 115(b)(1); see also id. 115(c)(1) (‘‘To
accessing the ECFS, http://apps.fcc.gov/
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legal benefits obtained by licensees with be entitled to receive royalties under a compulsory
the filing of section 115 notices with the ecfs.
license, the copyright owner must be identified in
Office are noteworthy—namely, the the registration or other public records of the • Paper Filers. Parties who choose to
ability to obtain a statutory license to Copyright Office. The owner is entitled to royalties file by paper must file an original and
make and reproduce musical works, for phonorecords made and distributed after being one copy of each filing. If more than one
so identified, but is not entitled to recover for any docket or rulemaking number appears in
phonorecords previously made and distributed.’’).
63 Booz Allen Study at 18. 67 See Music Modernization Act, H.R. 5447, 115th the caption of this proceeding, filers
64 Id.
Cong. (2018); see also Music Modernization Act, must submit two additional copies for
65 Id. S.2334, 115th Cong. (2018). each additional docket or rulemaking
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Document Created: 2018-05-24 00:05:06
Document Modified: 2018-05-24 00:05:06
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking. | |
| Dates | Written comments must be received no later than 11:59 p.m. Eastern Time on July 23, 2018. | |
| Contact | Regan A. Smith, Deputy General Counsel, by email at [email protected], or Julie Saltman, Assistant General Counsel, by email at [email protected], or either by telephone at 202-707- 8350. | |
| FR Citation | 83 FR 24054 |
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