[Federal Register: April 8, 2009 (Volume 74, Number 66)]
[Proposed Rules]
[Page 15901-15904]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08ap09-23]
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 370
[Docket No. RM 2008-7]
Notice and Recordkeeping for Use of Sound Recordings Under
Statutory License
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Notice of inquiry.
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SUMMARY: The Copyright Royalty Judges are seeking written comments from
interested parties to questions relating to the costs of census versus
sample reporting to assist the Judges in the revision of the interim
regulations for filing notices of use and the delivery of records of
use of sound recordings under two statutory licenses of the Copyright
Act.
DATES: Comments are due no later than May 26, 2009. Reply comments are
due no later than June 8, 2009.
ADDRESSES: Comments and reply comments may be sent electronically to
crb@loc.gov. In the alternative, send an original, five copies, and an
electronic copy on a CD either by mail or hand delivery. Please do not
use multiple means of transmission. Comments and reply comments may not
be delivered by an overnight delivery service other than the U.S.
Postal Service Express
[[Page 15902]]
Mail. If by mail (including overnight delivery), comments and reply
comments must be addressed to: Copyright Royalty Board, P.O. Box 70977,
Washington, DC 20024-0977. If hand delivered by a private party,
comments and reply comments must be brought to the Copyright Office
Public Information Office, Library of Congress, James Madison Memorial
Building, Room LM-401, 101 Independence Avenue, SE., Washington, DC
20559-6000. If delivered by commercial courier, comments and reply
comments must be delivered between 8:30 a.m. and 4 p.m. to the
Congressional Courier Acceptance Site located at 2nd and D Street, NE.,
Washington, DC, and the envelope must be addressed to: Copyright
Royalty Board, Library of Congress, James Madison Memorial Building,
LM-403, 101 Independence Avenue, SE., Washington, DC 20559-6000.
FOR FURTHER INFORMATION CONTACT: Richard Strasser, Senior Attorney, or
Gina Giuffreda, Attorney Advisor, by telephone at (202) 707-7658 or e-
mail at crb@loc.gov.
SUPPLEMENTARY INFORMATION:
Background
On December 30, 2008, the Copyright Royalty Judges (``Judges'')
published a notice of proposed rulemaking (``NPRM'') setting forth
proposed revisions to the interim regulations adopted in October 2006
for filing notice of use and the delivery of sound recordings under
sections 114 and 112 of the Copyright Act, title 17 of the United
States Code. 73 FR 79727. Specifically, the Judges proposed eliminating
obsolete provisions of the interim regulations and placing definitions
that were duplicated in various sections of the interim regulations
into a new single definition section applicable throughout Part 370
unless otherwise defined in a specific section. Id. The more
significant revision proposed by the Judges was to expand the reporting
period to implement year-round census reporting. Consequently, the
Judges proposed eliminating for nonsubscription services the aggregate
tuning hours (``ATH'') approach previously available and requiring that
such services now report actual total performances. Conversely, the
Judges proposed allowing preexisting satellite digital audio radio
services, new subscription services and business establishment services
to achieve census reporting by using the ATH option if technological
impediments existed which thwarted the measurement of actual
listenership. Finally, the Judges also solicited comments on
technological developments which may warrant additional revisions to
rules governing the method of reporting specific data elements and/or
the delivery mechanism employed for reporting.
Discussion of Comments Received
In response to the NPRM, the Judges received 43 comments from
various categories of interested parties: (1) Representatives of
copyright owners and performers, including SoundExchange, the
Collective charged with collecting and distributing royalties; (2)
copyright users and/or their representatives, educational radio
broadcasters, a noncommercial religious broadcaster, and an operator of
radio and Internet stations featuring Christian programming; (3) an
Internet service that simulcasts the over-the-air and Internet-only
broadcasts of primarily noncommercial terrestrial radio stations; and
(4) software providers of recordkeeping solutions to radio stations and
webcasters.
SoundExchange and Frederick Wilhelms III, who works for recording
artists and songwriters, support the Judges' proposal to require census
reporting. They contend that the current sample reporting results in
underpayments or non-payments to some copyright owners and performers.
Comments of SoundExchange at 4; Comments of Wilhelms at 1. According to
SoundExchange, requiring all services to provide census reporting would
eliminate this shortcoming and allow SoundExchange to ``distribute
funds on a fully accurate basis to all copyright owners and
performers.'' Comments of SoundExchange at 3 (footnote omitted).
SoundExchange notes that ``many services already provide SoundExchange
with year-round census reporting,'' Id. at 5, and estimates that ``over
75% of the royalties it receives from licensees are associated with
reports of use that are made using year-round census reporting.'' Id.
at 6.
Commenters representing certain educational and commercial radio
broadcasters opposed the proposed census reporting requirement. The
educational radio broadcasters who filed comments stated that they
currently do not pay more than the $500 minimum fee and do not exceed
the minimum ATH threshold. See, e.g., Comments of WONB Radio, Comments
of WESS Radio. See also Comments of College Broadcasters Inc. These
commenters argued that compliance with such requirements would be
unduly burdensome, if not impossible, for them because they lack the
finances, the staff, and the technology to do so. Consequently, they
conclude that application of the proposed revisions would force many of
them to cease their operations due to their inability to comply with
the revised regulations. See Comments of WPTS, KWSC-FM, and Blaze
Radio. Moreover, some commenters note that complying with the proposed
provision regarding census reporting would be difficult because many
educational radio broadcasters do not have automated playlists but
rather their playlists are created manually by disc jockeys as they
play the music. See, e.g., Comments of WSOU-FM at 1-2. Consequently,
they urge the Judges to exempt from more stringent reporting
requirements those educational radio broadcasters currently paying only
the $500 minimum fee and not exceeding the ATH threshold and allow them
to continue to report under the current interim regulations.
The National Association of Broadcasters' (``NAB'') comment echoes
the educational radio broadcasters' contention that the proposed move
to census reporting and the elimination of the ATH option would place
an undue burden on broadcasters that is not required by the statute.
Comments of NAB at 4. NAB argues that there has been no showing that
``the sampling methodology currently utilized by SoundExchange is
inefficient, or results in significant misallocation of royalty
payments.'' Id. at 3.
With respect to the elimination of the ATH option, NAB contends
that this option is ``critical'' for some broadcasters. Id. NAB asserts
that payment of royalties on the basis of actual performances is far
different from reporting performances of any given recording on an
actual performance basis. NAB states that the latter requires the
matching of the identity of the song with the number of listeners while
the former does not. According to NAB, to accomplish the reporting
proposed by the Judges, broadcasters would have to merge internal song
identification and automation software. NAB argues that often these
systems are incapable of communicating with each other and are not
operated by the same entities. Id.
Two recordkeeping and reporting vendors also opposed the proposed
census reporting requirement, citing concerns about costs and the
technological difficulties in calculating actual total performances
accurately. Comments of RadioActivity.Fm and Tom Worster/Spinitron.
Request for Additional Information
The current proposal is intended to fulfill the Judges' obligations
under the
[[Page 15903]]
Copyright Act to establish requirements by which copyright owners may
receive reasonable notice of the use of their sound recordings and
under which records of use shall be kept and made available by entities
performing sound recordings. See, e.g., 17 U.S.C. 114(f)(4)(A). The
Judges have determined preliminarily that such reasonable notice of use
requires the type of census reporting that this proposal mandates.
However, the Judges are mindful of the concerns expressed by some
commenters that any reporting requirements that the Judges adopt should
not unduly burden the services required to file reports of use.
Therefore, the Judges seek additional information to gain a fuller
understanding of the likely costs and benefits that will be derived if
the proposed census reporting provision is adopted and to consider any
alternatives to the proposal that might accomplish the same goals as
the proposal in a less burdensome way, particularly with respect to
small entities.
Consideration of Impact on Small Entities
Some commenters have stated that the proposed census reporting
requirement would adversely impact small entities. The Judges are
mindful of any impact that the current proposal may have on small
entities. Therefore, the Judges seek comment on the approximate number
of small entities that would be impacted by the proposed rulemaking,
and in particular, by the proposed census reporting requirement.
To help mitigate possible impact on small entities, the Judges also
seek possible alternatives to the proposed census provision. In
considering the proposed census reporting requirement, the Judges
considered, as possible alternatives, maintaining the current reporting
requirement, which requires services to provide the total number of
performances of each sound recording during the relevant reporting
period, which is currently limited to two periods of seven consecutive
days for each calendar quarter of the year. Moreover, with respect to
certain services, the proposal includes an ATH alternative to measuring
performances to the extent that technological impediments hamper such a
service's ability to measure actual listenership. The Judges also
considered exempting from the proposed census reporting requirements
certain categories of services that might lack the resources or the
technological sophistication to comply with the proposed census
reporting requirement. Preliminarily, the Judges believe that the
alternatives discussed above could result in an unfair allocation of
royalty fees by under-compensating certain copyright owners who were
not accurately represented through the current sample reporting and by
over-compensating copyright owners whose works are over-represented in
the sample period. Nevertheless, the Judges seek comment on the
alternatives discussed above, as well as others that the Judges should
consider and whether those alternatives would be preferable to the
current proposal in terms of accurately representing the actual
listenership information and any cost savings that might be realized
should the Judges adopt an alternative rather than the current proposed
census reporting provision.
In this regard, the Judges seek detailed information from
SoundExchange about the way in which the proposed census reporting
requirement would enhance its ability to more accurately and
efficiently distribute royalties to copyright owners. In particular,
the Judges seek information from SoundExchange that discusses the
current methodology SoundExchange uses to allocate royalties as well as
a discussion about how that methodology would change if the proposed
census provision is adopted. Currently, SoundExchange is receiving some
reports based on ATH rather than on the measurement of the actual total
performances of a sound recording during the reporting period. How is
SoundExchange currently allocating payments among the specific songs
performed in ATH-based reports? What proportion of the total number of
songs performed in the first quarter of 2008 was reported on an
``actual total performance basis'' as compared to an ATH basis? What
proportion of revenues received for songs performed in the first
quarter of 2008 have been distributed to date? For the same period,
what proportion of the revenues distributed were revenues attributed to
song performance as measured by actual total performance as compared to
by ATH? What metrics does SoundExchange currently employ to measure its
effectiveness in receiving and distributing performance revenues?
We seek estimates from SoundExchange (and others) detailing the
cost savings or additional burdens, if any, that copyright owners might
expect if the census reporting provision were adopted. As discussed
above, SoundExchange has stated that ``over 75% of the royalties it
receives from licensees are associated with reports of use that are
made using year-round census reporting.'' Comments of SoundExchange at
6. The Judges seek additional information on how SoundExchange derived
this estimate. For example, what percentage of reporting entities
currently uses year-round census reporting? What percentage of songs
for which SoundExchange is the Collective are reported based on year-
round census reporting? What is the nature of those entities that do
not currently use year-round census reporting? For example, what
percentage of entities that do not use year-round reporting are small
entities? \1\ What percentage are not-for-profit entities?
If the Judges were to exempt certain classes of entities from the
proposed year-round reporting provision, what would be appropriate
criteria for such an exemption? In providing your comment, please
consider which entities would be least likely to have the resources or
technological sophistication to comply with the proposed census
provision. For example, would a revenue-based cut-off be the most
appropriate method for developing an exemption? If so, what would be an
appropriate revenue level to qualify for an exemption? In the
alternative, would it be more appropriate to exempt from the proposed
census reporting provision those entities that qualify for the minimum
$500 per channel or per station performance royalty set forth in 37 CFR
380.3(a)(2)? If so, should the exemption be limited to noncommercial
entities or should commercial entities qualify for the exemption also?
Are there other criteria that would be preferable in formulating an
exemption (e.g., number of employees, profit versus not-for-profit
organizational structure)?
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\1\ Please consider an entity as small if it is independently
owned and operated and is not dominant in its field of operation.
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Has SoundExchange considered adding any additional open-source
licensed spreadsheet programs to the Microsoft Excel and Corel Quattro
Pro spreadsheet programs it currently supports to facilitate the
submission of Reports of Use? What are the potential benefits and
difficulties associated with adding such programs? (Any costs cited
should be specific dollar amounts). Which Services have examined the
use of such open source software? How many would adopt it if it were
available as an option? What is the specific dollar amount of any cost-
savings envisioned by Services specifically attributable to the use of
such open-source spreadsheet software?
As discussed above, some commenters state that complying with
[[Page 15904]]
the proposed provision regarding census reporting would be difficult
because many educational radio broadcasters do not have automated
playlists but rather their playlists are created manually by disc
jockeys as they play the music. See, e.g., Comments of WSOU-FM at 1-2.
The Judges seek comment on the percentage of broadcasters that do not
use automated playlists. Assuming playlists are completely automated,
is the cost of preparing a Report of Use likely to rise for a Service
which moves from the current 2-weeks per quarter sampling period to
full census? If so, by how much will such costs rise? What specifically
accounts for any such increase?
For those entities that do not use automated playlists, what means
do they use for complying with current reporting requirements? Is all
programming on college and other educational stations done manually? Do
such stations currently have automated playlist capabilities in place?
In other words, does manual programming occur simply as a matter of
creative choice? Where a college radio station does not currently have
an automated playlist capability, what is the cost of obtaining such a
capability? What technologies, if any, are currently employed in
complying with the current requirements? Which companies offer them and
at what cost? What changes, if any, would be required to comply with
the proposed census reporting requirement? What are the likely costs
that would be required to move from the current reporting methodology
to one that would be required under the proposal? Is technology
currently available that would permit entities that do not use
automated playlists to comply with the proposed census provision? If
so, what companies provide such capabilities and at what cost? If such
technology is not currently available, what would be the costs of
developing it?
Dated: April 3, 2009.
James Scott Sledge,
Chief, U.S. Copyright Royalty Judge.
[FR Doc. E9-7950 Filed 4-7-09; 8:45 am]
BILLING CODE 1410-72-P