83 FR 36509 - Adjustment of Cable Statutory License Royalty Rates
LIBRARY OF CONGRESS
Copyright Royalty Board Federal Register Volume 83, Issue 146 (July 30, 2018)
Copyright Royalty Board
Federal Register Volume 83, Issue 146 (July 30, 2018)
| Page Range | 36509-36512 | |
| FR Document | 2018-16175 |
[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)] [Proposed Rules] [Pages 36509-36512] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-16175] ======================================================================= ----------------------------------------------------------------------- LIBRARY OF CONGRESS Copyright Royalty Board 37 CFR Part 387 [Docket No. 15-CRB-0010-CA-S] Adjustment of Cable Statutory License Royalty Rates AGENCY: Copyright Royalty Board, Library of Congress. ACTION: Proposed rule; modified. ----------------------------------------------------------------------- SUMMARY: The Copyright Royalty Judges (Judges) publish for comment modified proposed regulations to require affected cable systems to pay a separate per-telecast royalty (a Sports Surcharge) in addition to the other royalties that those cable systems must pay under Section 111 of the Copyright Act. DATES: Comments and objections are due no later than August 29, 2018. ADDRESSES: You may submit comments and objections, identified by docket number 17-CRB-0001-BER (2019-2023), by any of the following methods: CRB's electronic filing application: Submit comments online in eCRB at https://app.crb.gov/. U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or Overnight service (only USPS Express Mail is acceptable): Copyright Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or Commercial courier: Address package to: Copyright Royalty Board, Library of Congress, James Madison Memorial Building, LM-403, 101 Independence Avenue SE, Washington, DC 20559-6000. Deliver to: Congressional Courier Acceptance Site, 2nd Street NE and D Street NE, Washington, DC; or Hand delivery: Library of Congress, James Madison Memorial Building, LM-401, 101 Independence Avenue SE, Washington, DC 20559- 6000. Instructions: Unless submitting online, commenters must submit an original, two paper copies, and an electronic version on a CD. All submissions must include a reference to the CRB and this docket number. All submissions will be posted without change to eCRB at https://app.crb.gov/ including any personal information provided. Docket: For access to the docket to read submitted background documents or comments, go to eCRB, the Copyright Royalty Board's electronic filing and case management system, at https://app.crb.gov/ and search for docket number 15-CRB-0010-CA-S. FOR FURTHER INFORMATION CONTACT: Anita Blaine, CRB Program Specialist, by telephone at (202) 707-7658 or email at [email protected]. SUPPLEMENTARY INFORMATION: On July 2, 2018, the Copyright Royalty Judges (Judges) received a motion from the Joint Sports Claimants (JSC),\1\ the [[Page 36510]] NCTA--The internet and Television Association, and the American Cable Association, notifying the Judges that they reached agreement on a modified sports surcharge rule and requesting the Judges adopt the rule. Joint Motion of the Participating Parties to Suspend Procedural Schedule and to Adopt Modified Settlement at 1 (Jul. 2, 2018) (Joint Motion). The Judges had published an earlier version of the proposed rule in the Federal Register at 82 FR 24611 (May 30, 2017) and a request for reply and surreply comments regarding that version at 82 FR 44368 (Sept. 22, 2017). --------------------------------------------------------------------------- \1\ The Joint Sports Claimants are the Office of the Commissioner of Baseball, the National Football League, the National Basketball Association, the Women's National Basketball Association, the National Hockey League, and the National Collegiate Athletic Association. --------------------------------------------------------------------------- The moving parties also requested that the Judges suspend, pending resolution of the Joint Motion, the procedural schedule set forth in the Order Reinstating Case Schedule dated January 18, 2018, and that the Judges publish the modified proposed rule expeditiously. On July 20, 2018, the Judges issued an order suspending the proceeding schedule, pending their review of the moving parties' agreement and publication of the modified proposed rule for public comment. The Judges stated that they would defer decision on adoption of the settlement agreement and termination of the proceeding until after they consider comments, if any, filed in response to publication of the modified proposed rule. A. Background Section 111(d)(1)(B) of the Copyright Act (the Act), 17 U.S.C. 111(d)(1)(B), sets forth the royalty rates that ``Form 3'' cable systems must pay to retransmit broadcast signals pursuant to the Section 111(c) statutory license. Form 3 systems are those with semi- annual ``gross receipts'' greater than $527,600. See id. Sec. Sec. 111(d)(1)(B), (E) & (F); 37 CFR 201.17(d). Section 801(b)(2)(C) of the Act provides: In the event of any change in the rules and regulations of the Federal Communications Commission [``FCC''] with respect to syndicated and sports program exclusivity after April 15, 1976, the rates established by section 111(d)(1)(B) may be adjusted to assure that such rates are reasonable in light of the changes to such rules and regulations, but any such adjustment shall apply only to the affected television broadcast signals carried on those systems affected by the change. 17 U.S.C. 801(b)(2)(C). Section 804(b)(1)(B) of the Copyright Act states that, in ``order to initiate proceedings under section [801(b)(2)(C)],'' an interested party must file a petition with the Judges requesting a rate change within twelve months of the FCC's action. 17 U.S.C. 804(b)(1)(B); see H.R. Rep. No. 94-1476 at 178 (1976) (right to seek review ``exercisable for a 12 month period following the date such changes are finally effective''). The FCC adopted sports exclusivity rules for cable systems in 1975. See Report and Order in Doc. No. 19417, 54 F.C.C.2d 265 (1975) (``Sports Rules''). The FCC repealed the Sports Rules effective November 24, 2014. See Sports Blackout Rules, 79 FR 63547 (Oct. 24, 2014) (Sports Rule Repeal). At the time of the Sports Rule Repeal, the Sports Rules were codified at 47 CFR 76.111 (2014). On November 23, 2015, JSC filed a rate adjustment petition pursuant to Section 801(b)(2)(C) of the Copyright Act. In June 2016 the Judges established a procedural schedule for ruling on the JSC petition. Order of Bifurcation . . . and Scheduling Order (June 2016 Order). While the moving parties were unable to settle this matter during the voluntary negotiation period established by the June 2016 Order, they continued negotiations and agreed that this proceeding should be terminated with the adoption of a proposed rule. Upon motion of the Participants in January 2017, the Judges published the proposed rule and received comments. See 82 FR 24611 (May 30, 2017). The Judges then published, in September 2017, a request for further comments on the proposed rule. See 82 FR 44368. After reviewing reply and surreply comments, they declined to adopt the proposed rates and reinstated a case schedule. Order Reinstating Case Schedule (Jan. 12, 2018). In declining to adopt the proposed settlement the Judges noted that The applicable license in this proceeding is the license to retransmit by cable beyond the local service area the works of ``any . . . owner whose work was included in a secondary transmission made by a cable system . . . in whole or in part. . . .'' 17 U.S.C. 111 (d)(3). [Major League Soccer (MLS)] and potentially other professional sports leagues are owners of, or represent owners of, copyrights to televised professional team sports events. The regulations proposed by the JSC define an ``eligible professional sports event'' to include only professional baseball, basketball (men and women), football, and hockey. By definition, MLS and any other professional league scheduling team sports events for telecast (and retransmission by those affected cable systems) would be ineligible to receive any portion of the sports programming surcharge negotiated by the JSC and cable providers. This proposed regulatory configuration provides for licensing royalties from Form 3 cable systems for some sports leagues to the express exclusion of other leagues that own or represent owners of protected works. As proposed, the regulation for the exclusive benefit of Major League Baseball, the National Basketball Association, the National Football League, the National Hockey League, and the Women's National Basketball Association is contrary to the applicable section 111 license. The Judges decline to adopt the proposed settlement as a basis for regulations that would bind non- participants to a zero rate. Order Reinstating Case Schedule at 2. In April 2018, MLS filed a late Petition to Participate (PTP) and accompanying motion for the Judges to accept it. The Judges granted the motion and accepted the PTP on July 20, 2018. In July 2018, the participants filed a modified proposed rule that addressed the Judges' concerns regarding the proposed rule. Joint Motion at 4, 8. MLS does not object to the modified proposed rule. Id. at 2. The Judges hereby publish it for comment. B. Scope of the Modified Proposed Rule According to the moving parties, the modified proposed Sports Surcharge differs from the January 2017 proposal in two key respects: A cable operator's obligation to pay a Sports Surcharge royalty is not limited to retransmissions of sports events affiliated with specific JSC members; \2\ and the modified Sports Surcharge includes language expressly stating that no copyright owner of a retransmitted telecast of a sports event is precluded from seeking Sports Surcharge royalties if the retransmission would have been subject to deletion under the former FCC Sports Blackout Rule. Joint Motion at 2. --------------------------------------------------------------------------- \2\ Under the January 2017 proposal the cable operator's obligation to pay Sports Surcharge royalties was limited to retransmissions of telecasts of sports events affiliated with specific JSC members. Joint Motion at 5. --------------------------------------------------------------------------- The moving parties also state that ``nothing in the proposed rule would require the Judges to distribute the Sports Surcharge royalties'' only to sports organizations whose telecasts trigger the ``pay-in'' obligation. Rather, ``[t]he determination of the recipients of those royalties (and the amount of royalties those recipients should receive) would be addressed by the Judges in future allocation and distribution proceedings'' absent a settlement. Id. at 4. As modified, the rule draws a bright line between the ``pay-in'' methodology by which affected cable systems will compute their surcharge royalty payment obligations and the ``pay out'' process by which those royalty payments are distributed. Id. at 5. According to the moving parties, the modified Sports Surcharge does not [[Page 36511]] change the previously agreed upon per event royalty rate of 0.025 percent of an affected cable system's gross receipts. Moreover, the definition of which cable systems may have to pay the surcharge has not changed (i.e., systems that would have been subject to the FCC Sports Blackout Rule prior to its repeal). Under the modified rule, a cable system's retransmission of a sports event telecast that would have been subject to deletion under the FCC Sports Blackout Rule triggers a Sports Surcharge pay-in by the system's operator--as long as the holder of the broadcast rights in the event (or its agent) provides the affected system: (1) Written notice containing information comparable to that required to invoke the former FCC Sports Blackout Rule; and (2) documentary evidence that the sports entity giving the notice required to trigger the Sports Surcharge pay- in provision previously invoked the FCC Sports Blackout Rule between January 1, 2012 and November 23, 2014 (the day before the repeal of the rule took effect). Joint Motion at 6. With respect to certain collegiate events, the pay-in rule caps the maximum number of events involving a specific team that can trigger an affected cable system's surcharge payment obligation in a particular accounting period based on the largest number of events as to which the FCC Sports Blackout Rule was invoked by that specific sports entity during any of the accounting periods occurring during the January 1, 2012 through November 23, 2014 period. Id. at n.12. In addition, the Joint Motion proposes a new effective date in 2019 and points out that the rule proposal can be reconsidered in 2020 pursuant to statute. Id. at 2 n.6; see 17 U.S.C. 804(b)(1)(B). According to the moving parties, the royalty rate reflected in the modified proposed rule represents a negotiated compromise regarding adoption of a royalty surcharge and limiting when licensors must pay it, but not regulating the method of determining how the funds should be distributed. Id. at 6-7. The moving parties state that they do not intend for the agreed- upon methodology for calculating a cable system's pay-in obligation to be accorded any precedential effect or to be regarded as representing any agreement as to the fair market value, now or in the future, of the secondary transmission of any sports event or of the economic or other impact of the repeal of the FCC Sports Blackout Rule. Joint Motion at 6. The moving parties state that if the Judges do not adopt the proposed rule, each of the moving parties reserves the right to seek to demonstrate that the Sports Surcharge originally proposed is not contrary to law and/or that the Judges should adopt a different rate adjustment to account for the repeal of the FCC Sports Blackout Rule. Id. at 8 n.13. C. The Judges' Authority To Adopt the Proposed Rule According to the moving parties, ``a key Congressional objective underlying the Judges' rate-setting authority is the promotion of voluntary settlements rather than litigation.'' Id. at 7, citing H.R. Rep. No. 108-408 at 24 (2004) (referring to the legislative policy of ``facilitating and encouraging settlement agreements for determining royalty rates''). Consistent with that objective, the Judges may accept a settlement reached by ``some or all of the participants'' in a rate proceeding ``at any time during the proceeding.'' 17 U.S.C. 801(b)(7)(A). The Act requires that the Judges afford those who ``would be bound by the terms, rates or other determination'' in a settlement agreement ``an opportunity to comment on the agreement.'' 17 U.S.C. 801(b)(7)(A)(i). The Copyright Royalty Board rules also require that the Judges ``publish the settlement in the Federal Register for notice and comment from those bound by the terms, rates, or other determination set by the agreement.'' 37 CFR 351.2(b)(2). D. Solicitation of Comments The Judges seek comments on the moving parties' proposal. In particular, the Judges seek comment on whether the proposal is consistent with Section 111 of the Copyright Act which provides that the applicable license granted in that section is the license to retransmit by cable beyond the local service area the works of ``any . . . owner whose work was included in a secondary transmission made by a cable system . . . in whole or in part. . . .'' 17 U.S.C. 111(d)(3), and consistent with the Judges' interpretation of that section as elaborated in the Order Reinstating Case Schedule. In addition to general comments for or against the proposal, the Judges seek comment on whether the proposed provision in section 387.2(e)(9) (``Nothing herein shall preclude any copyright owner of a live television broadcast, the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule, from receiving a share of royalties paid pursuant to this paragraph.'') could apply to the secondary transmissions of the live television broadcasts of any entity other than a current member of the JSC.\3\ In other words, would the phrase ``the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule'' enable any entity beyond the current members of the JSC to qualify for a share of royalties from the Sports Surcharge? If the answer is yes, which entities' transmissions would qualify for a share? If the answer is no (i.e., only JSC members could qualify), then is the current proposal nevertheless still consistent with the Section 111 license? If so, why? --------------------------------------------------------------------------- \3\ See note 1, supra. --------------------------------------------------------------------------- Interested parties may comment and object to the modified proposed regulations contained in this notice. Such comments and objections must be submitted no later than August 29, 2018. List of Subjects in 37 CFR Part 387 Copyright, Cable television, Royalties. Modified Proposed Regulations For the reasons set forth in the preamble, and under the authority of chapter 8, title 17, United States Code, the Copyright Royalty Judges proposes to amend 37 CFR chapter III as follows: PART 387--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE 0 1. The authority citation for part 387 continues to read as follows: Authority: 17 U.S.C. 801(b)(2), 803(b)(6). 0 2. Amend Sec. 387.2 by: 0 a. Redesignating paragraph (e) as paragraph (f) and 0 b. Adding a new paragraph (e) to read as follows: Sec. 387.2 Royalty fee for compulsory license for secondary transmission by cable systems. * * * * * (e) Sports programming surcharge. Commencing with the first semiannual accounting period of 2019 and for each semiannual accounting period thereafter, in the case of an affected cable system filing Form SA3 as referenced in 37 CFR 201.17(d)(2)(ii) (2014), the royalty rate shall be, in addition to the amounts specified in paragraphs (a), (c) and (d) of this section, a surcharge of 0.025 percent of the affected cable system's gross receipts for the secondary transmission to subscribers of each live television broadcast of a sports event where the secondary transmission of such broadcast would have been subject to [[Page 36512]] deletion under the FCC Sports Blackout Rule. For purposes of this paragraph, (1) The term ``cable system'' shall have the same meaning as in 17 U.S.C. 111(f)(3); (2) An ``affected cable system'' (i) is a ``community unit,'' as the comparable term is defined or interpreted in accordance with Sec. 76.5(dd) of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.5(dd) (2014); (ii) that is located in whole or in part within the 35-mile specified zone of a television broadcast station licensed to a community in which a sports event is taking place, provided that if there is no television broadcast station licensed to the community in which a sports event is taking place, the applicable specified zone shall be that of the television broadcast station licensed to the community with which the sports event or team is identified, or, if the event or local team is not identified with any particular community, the nearest community to which a television station is licensed; and (iii) whose royalty fee is specified by 17 U.S.C. 111(d)(1)(B); (3) A ``television broadcast'' of a sports event must qualify as a ``non-network television program'' within the meaning of 17 U.S.C. 111(d)(3)(A); (4) The term ``specified zone'' shall be defined as the comparable term is defined or interpreted in accordance with Sec. 76.5(e) of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.5(e) (2014); (5) The term ``gross receipts'' shall have the same meaning as in 17 U.S.C. 111(d)(1)(B) and shall include all gross receipts of the affected cable system during the semiannual accounting period except those from the affected cable system's subscribers who reside in (i) the local service area of the primary transmitter, as defined in 17 U.S.C. 111(f)(4); (ii) any community where the cable system has fewer than 1,000 subscribers; (iii) any community located wholly outside the specified zone referenced in paragraph (e)(4) above; and (iv) any community where the primary transmitter was lawfully carried prior to March 31, 1972; (6) The term ``FCC Sports Blackout Rule'' refers to Sec. 76.111 of the rules and regulations of the Federal Communications Commission in effect as of November 23, 2014, 47 CFR 76.111 (2014); (7) Subject to paragraph (e)(8) of this section, the surcharge will apply to the secondary transmission of a primary transmission of a live television broadcast of a sports event only where the holder of the broadcast rights to the sports event or its agent has provided the affected cable system (i) Advance written notice regarding such secondary transmission as required by Sec. 76.111(b) and (c) of the FCC Sports Blackout Rule and (ii) documentary evidence that the specific team on whose behalf the notice is given had invoked the protection afforded by the FCC Sports Blackout Rule during the period from January 1, 2012, through November 23, 2014; (8) In the case of collegiate sports events, the number of events involving a specific team as to which an affected cable system must pay the surcharge will be no greater than the largest number of events as to which the FCC Sports Blackout Rule was invoked in a particular geographic area by such team during any one of the accounting periods occurring between January 1, 2012, and November 23, 2014; (9) Nothing herein shall preclude any copyright owner of a live television broadcast, the secondary transmission of which would have been subject to deletion under the FCC Sports Blackout Rule, from receiving a share of royalties paid pursuant to this paragraph. * * * * * Dated: July 24, 2018. Jesse M. Feder, Copyright Royalty Judge. [FR Doc. 2018-16175 Filed 7-27-18; 8:45 am] BILLING CODE 1410-72-P
![Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules 36509
Under the NPRM, not all operators Total Estimated Number of Annual ACTION: Proposed rule; modified.
exempted from certification Burden Hours: 4,773.
requirements would also be exempted Response Frequency: Various. SUMMARY: The Copyright Royalty Judges
from the evaluation requirements. Total Number of Annual Other Costs (Judges) publish for comment modified
Proposed § 1926.1427(a)(2) continues Burden: $71. proposed regulations to require affected
the existing exemption from the training cable systems to pay a separate per-
D. Public Participation—Submission of telecast royalty (a Sports Surcharge) in
and certification requirements in that Comments on This Document and
section for operators of three types of addition to the other royalties that those
Internet Access to Comments and cable systems must pay under Section
equipment: Derricks, sideboom cranes, Submissions
and equipment with a maximum 111 of the Copyright Act.
manufacturer-rated hoisting/lifting The agency encourages commenters to DATES: Comments and objections are
capacity of 2,000 pounds or less. In the submit their comments related to the due no later than August 29, 2018.
current crane standard, these three types agency’s clarification of the information ADDRESSES: You may submit comments
of equipment are exempt from all of the collection requirements to the docket for
and objections, identified by docket
this document (Docket Number OSHA–
requirements in § 1926.1427 as the number 17–CRB–0001–BER (2019–
2018–0009). For instructions on
result of language in § 1926.1427(a) and 2023), by any of the following methods:
submitting these comments to the CRB’s electronic filing application:
specific exemptions in §§ 1926.1436(q),
docket for this document, see the
1440(a), and 1441(a). The proposed rule Submit comments online in eCRB at
sections of this Federal Register
would not, however, exempt employers https://app.crb.gov/.
document titled DATES and ADDRESSES. U.S. mail: Copyright Royalty Board,
from the requirements in § 1926.1427(f)
Please note that comments on the P.O. Box 70977, Washington, DC 20024–
to evaluate the potential operators of
information collection requirements 0977; or
those types of equipment to ensure that
already submitted to the agency in Overnight service (only USPS Express
they have sufficient knowledge and
response to the NPRM will be Mail is acceptable): Copyright Royalty
skills to perform the assigned tasks with
considered; the public need not Board, P.O. Box 70977, Washington, DC
the assigned equipment. Accordingly, resubmit those comments in response to
OSHA proposes to preserve the 20024–0977; or
this solicitation. (See: https:// Commercial courier: Address package
evaluation requirements through the www.regulations.gov/document?D=
revision of the language in to: Copyright Royalty Board, Library of
OSHA-2007-0066-0679.) Please also Congress, James Madison Memorial
§ 1926.1427(a) and corresponding edits note that the docket for this document,
to narrow the exemptions in Building, LM–403, 101 Independence
Docket Number OSHA–2018–0009, Avenue SE, Washington, DC 20559–
§§ 1926.1436(q), 1440(a), and 1441(a). exists solely to collect comments on the 6000. Deliver to: Congressional Courier
Proposed Section 1926.1427(h)— information collection requirements in Acceptance Site, 2nd Street NE and D
Language and Literacy the NPRM. The NPRM and the other Street NE, Washington, DC; or
relevant documents for that rulemaking Hand delivery: Library of Congress,
Existing § 1926.1427(h) allows
are in Docket Number OSHA–2007– James Madison Memorial Building, LM–
operators to be certified in a language
0066, available on http:// 401, 101 Independence Avenue SE,
other than English, provided that the
www.regulations.gov. Washington, DC 20559–6000.
operator understands that language.
Proposed paragraph (h) is nearly E. Authority and Signature Instructions: Unless submitting
identical to existing paragraph (h) with Loren Sweatt, Deputy Assistant online, commenters must submit an
the exception that it removes the Secretary of Labor for Occupational original, two paper copies, and an
reference to the existing qualification Safety and Health, directed the electronic version on a CD. All
language in paragraph (b)(2), which has preparation of this document. The submissions must include a reference to
been replaced. authority for this document is the the CRB and this docket number. All
Paperwork Reduction Act of 1995 (44 submissions will be posted without
Proposed Sections 1926.1436(q)— change to eCRB at https://app.crb.gov/
Derricks, 1926.1440(a)—Sideboom U.S.C. 3506 et seq.) and Secretary of
Labor’s Order No. 1–2012 (77 FR 3912). including any personal information
Cranes, and 1926.1441(a)—Equipment provided.
With a Rated Hoisting/Lifting Capacity Signed at Washington, DC, on July 17, Docket: For access to the docket to
of 2,000 Pounds or Less 2018. read submitted background documents
Loren Sweatt, or comments, go to eCRB, the Copyright
As discussed earlier, OSHA proposed
to amend paragraphs §§ 1926.1436(q), Deputy Assistant Secretary of Labor for Royalty Board’s electronic filing and
Occupational Safety and Health. case management system, at https://
1926.1440(a), and 1926.1441(a) to
ensure that the evaluation requirements [FR Doc. 2018–15687 Filed 7–27–18; 8:45 am] app.crb.gov/ and search for docket
in § 1926.1427(f) apply to employers BILLING CODE 4510–26–P number 15–CRB–0010–CA–S.
using derricks, sideboom cranes, and FOR FURTHER INFORMATION CONTACT:
equipment with a rated capacity of Anita Blaine, CRB Program Specialist,
2,000 pounds or less. LIBRARY OF CONGRESS by telephone at (202) 707–7658 or email
Type of Review: New. at crb@loc.gov.
Copyright Royalty Board
Agency: DOL–OSHA. SUPPLEMENTARY INFORMATION: On July 2,
daltland on DSKBBV9HB2PROD with PROPOSALS
Title: Cranes and Derricks in 37 CFR Part 387 2018, the Copyright Royalty Judges
Construction: Operator Qualification. (Judges) received a motion from the
ICR Reference Number: 201710–1218– [Docket No. 15–CRB–0010–CA–S] Joint Sports Claimants (JSC),1 the
002.
Adjustment of Cable Statutory License 1 The Joint Sports Claimants are the Office of the
Total Estimated Number of
Royalty Rates Commissioner of Baseball, the National Football
Annualized Respondents: 117,130. League, the National Basketball Association, the
Total Estimated Number of AGENCY: Copyright Royalty Board, Women’s National Basketball Association, the
Annualized Responses: 75,591. Library of Congress. Continued
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![36510 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
NCTA—The internet and Television file a petition with the Judges requesting leagues that own or represent owners of
Association, and the American Cable a rate change within twelve months of protected works.
Association, notifying the Judges that the FCC’s action. 17 U.S.C. 804(b)(1)(B); As proposed, the regulation for the
exclusive benefit of Major League Baseball,
they reached agreement on a modified see H.R. Rep. No. 94–1476 at 178 (1976) the National Basketball Association, the
sports surcharge rule and requesting the (right to seek review ‘‘exercisable for a National Football League, the National
Judges adopt the rule. Joint Motion of 12 month period following the date Hockey League, and the Women’s National
the Participating Parties to Suspend such changes are finally effective’’). The Basketball Association is contrary to the
Procedural Schedule and to Adopt FCC adopted sports exclusivity rules for applicable section 111 license. The Judges
Modified Settlement at 1 (Jul. 2, 2018) cable systems in 1975. See Report and decline to adopt the proposed settlement as
(Joint Motion). The Judges had Order in Doc. No. 19417, 54 F.C.C.2d a basis for regulations that would bind non-
participants to a zero rate.
published an earlier version of the 265 (1975) (‘‘Sports Rules’’). The FCC
proposed rule in the Federal Register at repealed the Sports Rules effective Order Reinstating Case Schedule at 2.
82 FR 24611 (May 30, 2017) and a November 24, 2014. See Sports Blackout In April 2018, MLS filed a late
request for reply and surreply comments Rules, 79 FR 63547 (Oct. 24, 2014) Petition to Participate (PTP) and
regarding that version at 82 FR 44368 (Sports Rule Repeal). At the time of the accompanying motion for the Judges to
(Sept. 22, 2017). Sports Rule Repeal, the Sports Rules accept it. The Judges granted the motion
The moving parties also requested were codified at 47 CFR 76.111 (2014). and accepted the PTP on July 20, 2018.
that the Judges suspend, pending On November 23, 2015, JSC filed a In July 2018, the participants filed a
resolution of the Joint Motion, the rate adjustment petition pursuant to modified proposed rule that addressed
procedural schedule set forth in the Section 801(b)(2)(C) of the Copyright the Judges’ concerns regarding the
Order Reinstating Case Schedule dated Act. In June 2016 the Judges established proposed rule. Joint Motion at 4, 8. MLS
January 18, 2018, and that the Judges a procedural schedule for ruling on the does not object to the modified
publish the modified proposed rule JSC petition. Order of Bifurcation . . . proposed rule. Id. at 2. The Judges
expeditiously. On July 20, 2018, the hereby publish it for comment.
and Scheduling Order (June 2016
Judges issued an order suspending the Order). While the moving parties were B. Scope of the Modified Proposed Rule
proceeding schedule, pending their unable to settle this matter during the According to the moving parties, the
review of the moving parties’ agreement voluntary negotiation period established modified proposed Sports Surcharge
and publication of the modified by the June 2016 Order, they continued differs from the January 2017 proposal
proposed rule for public comment. The negotiations and agreed that this in two key respects: A cable operator’s
Judges stated that they would defer proceeding should be terminated with obligation to pay a Sports Surcharge
decision on adoption of the settlement the adoption of a proposed rule. royalty is not limited to retransmissions
agreement and termination of the Upon motion of the Participants in of sports events affiliated with specific
proceeding until after they consider January 2017, the Judges published the JSC members; 2 and the modified Sports
comments, if any, filed in response to proposed rule and received comments. Surcharge includes language expressly
publication of the modified proposed See 82 FR 24611 (May 30, 2017). The stating that no copyright owner of a
rule. Judges then published, in September retransmitted telecast of a sports event
A. Background 2017, a request for further comments on is precluded from seeking Sports
the proposed rule. See 82 FR 44368. Surcharge royalties if the retransmission
Section 111(d)(1)(B) of the Copyright After reviewing reply and surreply would have been subject to deletion
Act (the Act), 17 U.S.C. 111(d)(1)(B), comments, they declined to adopt the under the former FCC Sports Blackout
sets forth the royalty rates that ‘‘Form 3’’ proposed rates and reinstated a case Rule. Joint Motion at 2.
cable systems must pay to retransmit schedule. Order Reinstating Case The moving parties also state that
broadcast signals pursuant to the Schedule (Jan. 12, 2018). ‘‘nothing in the proposed rule would
Section 111(c) statutory license. Form 3 In declining to adopt the proposed require the Judges to distribute the
systems are those with semi-annual settlement the Judges noted that Sports Surcharge royalties’’ only to
‘‘gross receipts’’ greater than $527,600. sports organizations whose telecasts
See id. §§ 111(d)(1)(B), (E) & (F); 37 CFR The applicable license in this proceeding
is the license to retransmit by cable beyond trigger the ‘‘pay-in’’ obligation. Rather,
201.17(d). Section 801(b)(2)(C) of the ‘‘[t]he determination of the recipients of
the local service area the works of ‘‘any . . .
Act provides: owner whose work was included in a those royalties (and the amount of
In the event of any change in the rules and secondary transmission made by a cable royalties those recipients should
regulations of the Federal Communications system . . . in whole or in part. . . .’’ 17 receive) would be addressed by the
Commission [‘‘FCC’’] with respect to U.S.C. 111 (d)(3). [Major League Soccer Judges in future allocation and
syndicated and sports program exclusivity (MLS)] and potentially other professional distribution proceedings’’ absent a
after April 15, 1976, the rates established by sports leagues are owners of, or represent settlement. Id. at 4. As modified, the
section 111(d)(1)(B) may be adjusted to owners of, copyrights to televised
rule draws a bright line between the
assure that such rates are reasonable in light professional team sports events. The
of the changes to such rules and regulations, regulations proposed by the JSC define an ‘‘pay-in’’ methodology by which
but any such adjustment shall apply only to ‘‘eligible professional sports event’’ to affected cable systems will compute
the affected television broadcast signals include only professional baseball, basketball their surcharge royalty payment
carried on those systems affected by the (men and women), football, and hockey. By obligations and the ‘‘pay out’’ process
change. definition, MLS and any other professional by which those royalty payments are
daltland on DSKBBV9HB2PROD with PROPOSALS
league scheduling team sports events for distributed. Id. at 5.
17 U.S.C. 801(b)(2)(C). telecast (and retransmission by those affected According to the moving parties, the
Section 804(b)(1)(B) of the Copyright cable systems) would be ineligible to receive modified Sports Surcharge does not
Act states that, in ‘‘order to initiate any portion of the sports programming
proceedings under section surcharge negotiated by the JSC and cable 2 Under the January 2017 proposal the cable
[801(b)(2)(C)],’’ an interested party must providers. This proposed regulatory operator’s obligation to pay Sports Surcharge
configuration provides for licensing royalties royalties was limited to retransmissions of telecasts
National Hockey League, and the National from Form 3 cable systems for some sports of sports events affiliated with specific JSC
Collegiate Athletic Association. leagues to the express exclusion of other members. Joint Motion at 5.
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![36512 Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
deletion under the FCC Sports Blackout defined or interpreted in accordance sports event or its agent has provided
Rule. For purposes of this paragraph, with § 76.5(e) of the rules and the affected cable system
(1) The term ‘‘cable system’’ shall regulations of the Federal (i) Advance written notice regarding
have the same meaning as in 17 U.S.C. Communications Commission in effect such secondary transmission as required
111(f)(3); as of November 23, 2014, 47 CFR 76.5(e) by § 76.111(b) and (c) of the FCC Sports
(2) An ‘‘affected cable system’’ (i) is a (2014); Blackout Rule and
‘‘community unit,’’ as the comparable (5) The term ‘‘gross receipts’’ shall (ii) documentary evidence that the
term is defined or interpreted in have the same meaning as in 17 U.S.C. specific team on whose behalf the notice
accordance with § 76.5(dd) of the rules 111(d)(1)(B) and shall include all gross is given had invoked the protection
and regulations of the Federal receipts of the affected cable system afforded by the FCC Sports Blackout
Communications Commission in effect during the semiannual accounting Rule during the period from January 1,
as of November 23, 2014, 47 CFR period except those from the affected 2012, through November 23, 2014;
76.5(dd) (2014); cable system’s subscribers who reside in (8) In the case of collegiate sports
(ii) that is located in whole or in part (i) the local service area of the primary events, the number of events involving
within the 35-mile specified zone of a transmitter, as defined in 17 U.S.C. a specific team as to which an affected
television broadcast station licensed to 111(f)(4); cable system must pay the surcharge
a community in which a sports event is (ii) any community where the cable will be no greater than the largest
taking place, provided that if there is no system has fewer than 1,000 subscribers; number of events as to which the FCC
television broadcast station licensed to Sports Blackout Rule was invoked in a
(iii) any community located wholly
the community in which a sports event particular geographic area by such team
outside the specified zone referenced in
is taking place, the applicable specified during any one of the accounting
paragraph (e)(4) above; and
zone shall be that of the television periods occurring between January 1,
broadcast station licensed to the (iv) any community where the 2012, and November 23, 2014;
community with which the sports event primary transmitter was lawfully carried (9) Nothing herein shall preclude any
or team is identified, or, if the event or prior to March 31, 1972; copyright owner of a live television
local team is not identified with any (6) The term ‘‘FCC Sports Blackout broadcast, the secondary transmission of
particular community, the nearest Rule’’ refers to § 76.111 of the rules and which would have been subject to
community to which a television station regulations of the Federal deletion under the FCC Sports Blackout
is licensed; and Communications Commission in effect Rule, from receiving a share of royalties
(iii) whose royalty fee is specified by as of November 23, 2014, 47 CFR 76.111 paid pursuant to this paragraph.
17 U.S.C. 111(d)(1)(B); (2014);
* * * * *
(3) A ‘‘television broadcast’’ of a (7) Subject to paragraph (e)(8) of this
sports event must qualify as a ‘‘non- section, the surcharge will apply to the Dated: July 24, 2018.
network television program’’ within the secondary transmission of a primary Jesse M. Feder,
meaning of 17 U.S.C. 111(d)(3)(A); transmission of a live television Copyright Royalty Judge.
(4) The term ‘‘specified zone’’ shall be broadcast of a sports event only where [FR Doc. 2018–16175 Filed 7–27–18; 8:45 am]
defined as the comparable term is the holder of the broadcast rights to the BILLING CODE 1410–72–P
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Document Created: 2018-07-28 01:44:36
Document Modified: 2018-07-28 01:44:36
| 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 | Proposed rule; modified. | |
| Dates | Comments and objections are due no later than August 29, 2018. | |
| Contact | Anita Blaine, CRB Program Specialist, by telephone at (202) 707-7658 or email at [email protected] | |
| FR Citation | 83 FR 36509 | |
| CFR Associated | Copyright; Cable Television and Royalties |
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