83 FR 62714 - Adjustment of Cable Statutory License Royalty Rates

LIBRARY OF CONGRESS
Copyright Royalty Board

Federal Register Volume 83, Issue 234 (December 6, 2018)

The Copyright Royalty Judges (Judges) publish a final rule requiring 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.

[Federal Register Volume 83, Number 234 (Thursday, December 6, 2018)]
[Rules and Regulations]
[Pages 62714-62716]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26275]


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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: Final rule.

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SUMMARY: The Copyright Royalty Judges (Judges) publish a final rule 
requiring 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: 
    Effective date: December 6, 2018.
    Applicability date: January 1, 2019.

ADDRESSES: 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 30, 2018, the Copyright Royalty 
Judges

[[Page 62715]]

(Judges) published a modified proposed rule that establishes affected 
cable operators' obligation to pay a Sports Surcharge royalty. 83 FR 
36509.
    The Judges solicited general comments for or against the proposal 
and specific comments on the following questions: Could 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.'') apply to the secondary transmissions of the live 
television broadcasts of any entity other than a current member of the 
Joint Sports Claimants (JSC)? \1\ 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 consistent with the section 111 license? If so, why? Id. 
at 36511.
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    \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.
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    The Judges received joint comments from the JSC, NCTA-The Internet 
& Television Association, and American Cable Association stating 
support for the modified proposed rule as consistent with the section 
111 license, answering the question in the affirmative, and specifying 
that ``non-JSC members (e.g., MLS)'' \2\ might qualify for a share of 
the royalties. Joint Comments of the Moving Parties at 5. The Judges 
received no other comments.
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    \2\ Major League Soccer.
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    The joint commenters point out that the focus of the proposed rule 
is to specify the circumstances in which cable systems will owe and 
make Sports Surcharge royalty payments, i.e., a ``pay-in'' methodology. 
Id. at 4. The modified proposed language applies to Surcharge payments 
for events of JSC members and other entities, if any, who sought 
protection under the Sports Blackout Rule in the two years prior to its 
repeal. The joint commenters are not aware of any other protected 
entities, but they proposed removing the reference to the JSC in the 
rule to address the Judges' concern that the language in the rule as 
originally proposed appeared limiting and exclusionary. Although JSC 
members may be the only entities that invoked the protection, even 
entities who did not invoke the protection may be entitled to receive a 
share of the Surcharge funds in the future. Id. at 5-6. The modified 
proposed rule also eliminates the reference to ``eligible'' sports 
events as it only included by definition JSC-member events. Id. at 3-4.
    The joint commenters believe the original proposed rule did not 
implicate any of the concerns the Judges expressed because distribution 
of shares is not a subject of this rule. Distribution of royalty fees 
will be determined by the Judges or by agreement of interested parties. 
The modified proposed rule nonetheless states expressly that copyright 
owners are not precluded from sharing in future payments for the 
regulated secondary transmissions. Id. at 4, 6.
    The removal of the references to JSC-member events in the proposed 
rule and the addition of the section clarifying that no entity will be 
precluded from receiving shares based on this rule allay the concerns 
of the Judges.

List of Subjects in 37 CFR Part 387

    Copyright, Cable television, Royalties.

    For the reasons set forth in the preamble, and under the authority 
of chapter 8, title 17, United States Code, the Copyright Royalty 
Judges 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 redesignating paragraph (e) as paragraph (f) 
and 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 that broadcast would have been subject to 
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 1000 
subscribers;
    (iii) Any community located wholly outside the specified zone 
referenced in paragraph (e)(4) of this section; 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

[[Page 62716]]

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 the 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 that 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 (e).
* * * * *

    Dated: October 1, 2018.
David R. Strickler,
Copyright Royalty Judge.
Jesse M. Feder,
Copyright Royalty Judge.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.

    Approved by:
 Carla D. Hayden,
Librarian of Congress.
[FR Doc. 2018-26275 Filed 12-4-18; 8:45 am]
 BILLING CODE 1410-72-P