Proposed Rule2024-23426
Determination of Rates and Terms for Digital Performance of Sound Recordings and Making of Ephemeral Copies To Facilitate Those Performances (Web VI)
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Published
October 11, 2024
Issuing agencies
Library of CongressCopyright Royalty Board
Abstract
The Copyright Royalty Judges are publishing for comment proposed regulations governing the rates and terms for the digital performance of sound recordings by noncommercial educational webcasters and for the making of ephemeral recordings necessary for the facilitation of such transmissions for the period commencing January 1, 2026, and ending on December 31, 2030.
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<title>Federal Register, Volume 89 Issue 198 (Friday, October 11, 2024)</title>
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[Federal Register Volume 89, Number 198 (Friday, October 11, 2024)]
[Proposed Rules]
[Pages 82543-82546]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23426]
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 380
[Docket No 23-CRB-0012-WR (2026-2030)]
Determination of Rates and Terms for Digital Performance of Sound
Recordings and Making of Ephemeral Copies To Facilitate Those
Performances (Web VI)
AGENCY: Copyright Royalty Board (CRB), Library of Congress.
ACTION: Proposed rule related to noncommercial educational webcasters.
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SUMMARY: The Copyright Royalty Judges are publishing for comment
proposed regulations governing the rates and terms for the digital
performance of sound recordings by noncommercial educational webcasters
and for the making of ephemeral recordings necessary for the
facilitation of such transmissions for the period commencing January 1,
2026, and ending on December 31, 2030.
DATES: Comments and objections, if any, are due November 12, 2024.
ADDRESSES: You may submit comments using eCRB, the Copyright Royalty
Board's online electronic filing application, at <a href="https://app.crb.gov/">https://app.crb.gov/</a>.
Instructions: To send your comment through eCRB, if you don't have
a user account, you will first need to register for an account and wait
for your registration to be approved. Approval of user accounts is only
available during business hours. Once you have an approved account, you
can only sign in and file your comment after setting up multi-factor
authentication, which can be done at any time of day. All comments must
include the Copyright Royalty Board name and the docket number for this
proposed rule. All properly filed comments will appear without change
in eCRB at <a href="https://app.crb.gov">https://app.crb.gov</a>, 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 <a href="https://app.crb.gov/">https://app.crb.gov/</a>,
and search for docket number 23-CRB-0012-WR (2026-2030).
FOR FURTHER INFORMATION CONTACT: Anita Brown, CRB Program Specialist,
at (202) 707-7658 or <a href="/cdn-cgi/l/email-protection#bddecfdffdd1d2de93dad2cb"><span class="__cf_email__" data-cfemail="17746575577b787439707861">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
Section 114 of the Copyright Act, title 17 of the United States
Code, provides a statutory license that allows for the public
performance of sound recordings by means of a digital audio
transmission by, among others, eligible nonsubscription transmission
services. 17 U.S.C. 114(f). For purposes of the section 114 license, an
``eligible nonsubscription transmission'' is a noninteractive digital
audio transmission that does not require a subscription for receiving
the transmission. The transmission must also be made as part of a
service that provides audio programming consisting in whole or in part
of performances of sound recordings the purpose of which is to provide
audio or other entertainment programming, but not to sell, advertise,
or promote particular goods or services. See 17 U.S.C. 114(j)(6).
Services using the section 114 license may need to make one or more
temporary or ``ephemeral'' copies of a sound recording to facilitate
the transmission of that recording. The section 112 statutory license
allows for the making of these ephemeral reproductions. 17 U.S.C.
112(e).
Chapter 8 of the Copyright Act requires the Judges to conduct
proceedings every five years to determine the rates and terms for the
sections 114 and 112 statutory licenses. 17 U.S.C. 801(b)(1),
804(b)(3)(A). The current proceeding commenced in January 2024 for
rates and terms that will become effective on January 1, 2026, and end
on December 31, 2030. Pursuant to section 804(b)(3)(A), the Judges
published in the Federal Register a notice commencing the proceeding
and requesting that interested parties submit their petitions to
participate. 89 FR 812 (Jan. 5, 2024). SoundExchange, Inc.
(``SoundExchange''), and College Broadcasters, Inc. (``CBI'') each
filed Petitions to Participate, as did others.
On September 13, 2024, the Copyright Royalty Judges (Judges)
received a joint motion from SoundExchange and CBI to adopt a partial
settlement of their interests regarding Web VI rates and terms for
2026-2030 and seeking approval of that partial settlement. Joint Motion
to Adopt Partial Settlement, Docket No. 23-CRB-0012-WR (2026-2030).
Their interests concern the rule setting copyright royalty minimum fees
and terms that the Judges will establish for compulsory copyright
licenses for certain internet transmissions of sound recordings by
college radio stations and other noncommercial educational webcasters
for the period from January 1, 2026, through December 31, 2030.
SoundExchange represents the interests of sound recording copyright
owners and performers. CBI represents the interests of users of the
copyrighted material which users include college, university, and high
school radio and television stations and other electronic media
organizations. The Judges hereby publish the proposal and request
comments from the public.
Statutory Timing of Adoption of Rates and Terms
Section 801(b)(7)(A) of the Copyright Act authorizes the Judges to
adopt royalty rates and terms negotiated by ``some or all of the
participants in a proceeding at any time during the proceeding''
provided they are submitted to the Judges for approval. The Judges must
provide ``an opportunity to comment on the agreement'' to participants
and non-participants in the rate proceeding who ``would be bound by the
terms, rates, or other determination set by any agreement. . . .'' 17
U.S.C. 801(b)(7)(A)(i). Participants in the proceeding may also
``object to [the agreement's] adoption as a basis for statutory terms
and rates.'' Id.
The Judges ``may decline to adopt the agreement as a basis for
statutory terms and rates for participants that are not parties to the
agreement,'' only ``if any participant [in the proceeding] objects to
the agreement and the [Judges] conclude, based on the record before
them if one exists, that the agreement does not provide a reasonable
basis for setting statutory terms or rates.'' 17 U.S.C.
801(b)(7)(A)(ii), or where the negotiated agreement includes provisions
that are contrary to the provisions of the applicable license(s) or
otherwise contrary to statutory law. See Scope of the Copyright Royalty
Judges Authority to Adopt Confidentiality Requirements upon Copyright
Owners within a Voluntarily Negotiated License Agreement, 78 FR 47421,
47422 (Aug. 5,
[[Page 82544]]
2013), citing 74 FR 4537, 4540 (Jan. 26, 2009).
Any rates and terms adopted pursuant to this provision would be
binding on all copyright owners of sound recordings, college radio
stations, and other noncommercial educational webcasters performing the
sound recordings for the license period 2026-2030.
Proposed Adjustments to Rates and Terms
According to SoundExchange and CBI, the agreement generally
continues in effect the current provisions of 37 CFR part 380, subpart
C, which were themselves adopted pursuant to 17 U.S.C. 801(b)(7)(A) as
part of the Web V proceeding, with four primary changes: (1) the
minimum fee applicable to noncommercial educational webcasters will
increase by $50 per year throughout the rate period; (2) the threshold
for usage covered by the minimum fee is increased from 159,140
Aggregate Tuning Hours (``ATH'') to 160,000 ATH; (3) the reporting and
payment period applicable in the event a Noncommercial Educational
Webcaster makes total transmissions in excess of 160,000 ATH in a given
month is reduced from 45 days to 30 days; and (4) a clarification
concerning the counting of channels and stations has been added. Joint
Motion at 6.
Those who would be bound by the terms, rates, or other
determination set by the agreement may comment on, and proceeding
participants may object to, any or all of the proposed regulations
contained in this document. Such comments and objections must be
submitted no later than November 12, 2024.
List of Subjects in 37 CFR Part 380
Copyright, Sound recordings, Webcasters.
Proposed Regulations
For the reasons set forth in the preamble, the Copyright Royalty
Judges propose to amend 37 CFR part 380 as follows:
PART 380--RATES AND TERMS FOR TRANSMISSIONS BY ELIGIBLE
NONSUBSCRIPTION SERVICES AND NEW SUBSCRIPTION SERVICES AND FOR THE
MAKING OF EPHEMERAL REPRODUCTIONS TO FACILITATE THOSE TRANSMISSIONS
0
1. The authority citation for part 380 continues to read as follows:
Authority: 17 U.S.C. 112(e), 114(f), 804(b)(3).
0
2. Revise subpart C to read as follows:
Subpart C--Noncommercial Educational Webcasters
Sec.
380.20 Definitions.
380.21 Royalty fees for the public performance of sound recordings
and for ephemeral recordings.
380.22 Terms for making payment of royalty fees and statements of
account.
Sec. 380.20 Definitions.
For purposes of this subpart, the following definitions apply, as
well as those set forth in subpart A of this part:
Educational Transmission means an eligible nonsubscription
transmission (as defined in 17 U.S.C. 114(j)(6)) made by a
Noncommercial Educational Webcaster over the internet.
Noncommercial Educational Webcaster means a noncommercial webcaster
(as defined in 17 U.S.C. 114(f)(4)(E)(i)) that:
(1) Has obtained a compulsory license under 17 U.S.C. 112(e) and
114 and the implementing regulations therefor to make Educational
Transmissions and related Ephemeral Recordings;
(2) Complies with all applicable provisions of Sections 112(e) and
114 and applicable regulations in 37 CFR part 380;
(3) Is directly operated by, or is affiliated with and officially
sanctioned by, and the digital audio transmission operations of which
are staffed substantially by students enrolled at, a domestically
accredited primary or secondary school, college, university or other
post-secondary degree-granting educational institution;
(4) Is not a ``public broadcasting entity'' (as defined in 17
U.S.C. 118(f)) qualified to receive funding from the Corporation for
Public Broadcasting pursuant to its criteria; and
(5) Takes affirmative steps not to make total transmissions in
excess of 160,000 Aggregate Tuning Hours (ATH) on any individual
channel or station in any month, if in any previous calendar year it
has made total transmissions in excess of 160,000 ATH on any individual
channel or station in any month.
Sec. 380.21 Royalty fees for the public performance of sound
recordings and for ephemeral recordings.
(a) Minimum fee for eligible Noncommercial Educational Webcasters.
Each Noncommercial Educational Webcaster that did not exceed 160,000
total ATH for any individual channel or station for more than one
calendar month in the immediately preceding calendar year and does not
expect to make total transmissions in excess of 160,000 ATH on any
individual channel or station in any calendar month during the
applicable calendar year shall pay an annual, nonrefundable minimum fee
in the amount set forth in paragraphs (a)(1) through (5) of this
section (the ``Minimum Fee'') for each of its individual channels,
including each of its individual side channels, and each of its
individual stations, through which (in each case) it makes Educational
Transmissions, for each calendar year it makes Educational
Transmissions subject to this subpart. For clarity, each individual
stream (e.g., HD radio side channels, different stations owned by a
single licensee) will be treated separately and be subject to a
separate Minimum Fee. However, all of the streams of Digital Audio
Transmissions of music programming by a Noncommercial Educational
Webcaster, or by a group of affiliated Noncommercial Educational
Webcasters, that are the same or have only immaterial variations (e.g.,
differences in station identification, acknowledgement of sponsors or
occasional substitute programming) shall be treated as part of one
channel or station for purposes of this section. For this purpose, two
Noncommercial Educational Webcasters shall be considered affiliates if
one is controlling, controlled by, or under common control with the
other. This principle applies whether the streams are offered from only
a single outlet or through multiple outlets (e.g., websites, broadcast
radio station simulcasts, aggregators, mobile applications or other
online locations where listeners can access music streaming). The
Minimum Fee shall constitute the annual per channel or per station
royalty for all Educational Transmissions totaling not more than
160,000 ATH in a month on any individual channel or station, and for
Ephemeral Recordings to enable such Educational Transmissions. In
addition, a Noncommercial Educational Webcaster electing the reporting
waiver described in Sec. 380.22(d)(1) shall pay a $100 annual fee (the
``Proxy Fee'') to the Collective (for purposes of this subpart, the
term ``Collective'' refers to SoundExchange, Inc.). The Minimum Fee for
each year of the royalty period is:
(1) 2026: $800;
(2) 2027: $850;
(3) 2028: $900;
(4) 2029: $950; and
(5) 2030: $1,000.
(b) Consequences of unexpectedly exceeding the ATH cap. In the case
of a Noncommercial Educational Webcaster eligible to pay royalties
under paragraph (a) of this section that unexpectedly makes total
transmissions
[[Page 82545]]
in excess of 160,000 ATH on any individual channel or station in any
calendar month during the applicable calendar year:
(1) The Noncommercial Educational Webcaster shall, for such month
and the remainder of the calendar year in which such month occurs, pay
royalties in accordance, and otherwise comply, with the provisions of
subpart B of this part applicable to Noncommercial Webcasters;
(2) The Minimum Fee paid by the Noncommercial Educational Webcaster
for such calendar year will be credited to the amounts payable under
the provisions of subpart B of this part applicable to Noncommercial
Webcasters; and
(3) The Noncommercial Educational Webcaster shall, within 30 days
after the end of each month, notify the Collective if it has made total
transmissions in excess of 160,000 ATH on a channel or station during
that month; pay the Collective any amounts due under the provisions of
subpart B of this part applicable to Noncommercial Webcasters; and
provide the Collective a statement of account pursuant to subpart A of
this part.
(c) Royalties for other Noncommercial Educational Webcasters. A
Noncommercial Educational Webcaster that is not eligible to pay
royalties under paragraph (a) of this section shall pay royalties in
accordance, and otherwise comply, with the provisions of subpart B of
this part applicable to Noncommercial Webcasters.
(d) Estimation of performances. In the case of a Noncommercial
Educational Webcaster that is required to pay royalties under paragraph
(b) or (c) of this section on a per-Performance basis, that is unable
to calculate actual total Performances, and that is not required to
report actual total performances under Sec. 380.22(d)(3), the
Noncommercial Educational Webcaster may pay its applicable royalties on
an ATH basis, provided that the Noncommercial Educational Webcaster
shall calculate such royalties at the applicable per-Performance rates
based on the assumption that the number of sound recordings performed
is 12 per hour. The Collective may distribute royalties paid on the
basis of ATH hereunder in accordance with its generally applicable
methodology for distributing royalties paid on such basis. In addition,
and for the avoidance of doubt, a Noncommercial Educational Webcaster
offering more than one channel or station shall pay per-Performance
royalties on a per-channel or -station basis.
(e) Allocation between ephemeral recordings and performance royalty
fees. The Collective must credit 5% of all royalty payments as payment
for Ephemeral Recordings and credit the remaining 95% to section 114
royalties. All Ephemeral Recordings that a Licensee makes which are
necessary and commercially reasonable for making Educational
Transmissions are included in the 5%.
Sec. 380.22 Terms for making payment of royalty fees and statements
of account.
(a) Payment to the Collective. A Noncommercial Educational
Webcaster shall make the royalty payments due under Sec. 380.21 to the
Collective.
(b) Minimum fee. Noncommercial Educational Webcasters shall submit
the Minimum Fee, and Proxy Fee if applicable (see paragraph (d) of this
section), accompanied by a statement of account, by January 31st of
each calendar year, except that payment of the Minimum Fee, and Proxy
Fee if applicable, by a Noncommercial Educational Webcaster that was
not making Educational Transmissions or Ephemeral Recordings pursuant
to the licenses in 17 U.S.C. 114 and/or 17 U.S.C. 112(e) as of January
31st of each calendar year but begins doing so thereafter shall be due
by the 30th day after the end of the month in which the Noncommercial
Educational Webcaster commences doing so. At the same time the
Noncommercial Educational Webcaster must identify all its stations
making Educational Transmissions and identify which of the reporting
options set forth in paragraph (d) of this section it elects for the
relevant year (provided that it must be eligible for the option it
elects).
(c) Statements of account. Any payment due under paragraph (a) of
this section shall be accompanied by a corresponding statement of
account on a form provided by the Collective. A statement of account
shall contain the following information:
(1) The name of the Noncommercial Educational Webcaster, exactly as
it appears on the notice of use, and if the statement of account covers
a single station only, the call letters or name of the station;
(2) The name, address, business title, telephone number, facsimile
number (if any), electronic mail address (if any) and other contact
information of the person to be contacted for information or questions
concerning the content of the statement of account;
(3) The signature of a duly authorized representative of the
applicable educational institution;
(4) The printed or typewritten name of the person signing the
statement of account;
(5) The date of signature;
(6) The title or official position held by the person signing the
statement of account;
(7) A certification of the capacity of the person signing; and
(8) A statement to the following effect:
``I, the undersigned duly authorized representative of the
applicable educational institution, have examined this statement of
account; hereby state that it is true, accurate, and complete to my
knowledge after reasonable due diligence; and further certify that the
licensee entity named herein qualifies as a Noncommercial Educational
Webcaster for the relevant year, and did not exceed 160,000 total ATH
in any month of the prior year for which the Noncommercial Educational
Webcaster did not submit a statement of account and pay any required
additional royalties.''
(d) Reporting by Noncommercial Educational Webcasters in general--
(1) Reporting waiver. In light of the unique business and operational
circumstances with respect to Noncommercial Educational Webcasters, and
for the purposes of this subpart only, a Noncommercial Educational
Webcaster that did not exceed 80,000 total ATH for any individual
channel or station for more than one calendar month in the immediately
preceding calendar year and that does not expect to exceed 80,000 total
ATH for any individual channel or station for any calendar month during
the applicable calendar year may elect to pay to the Collective a
nonrefundable, annual Proxy Fee of $100 in lieu of providing reports of
use for the calendar year pursuant to the regulations at Sec. 370.4 of
this chapter. In addition, a Noncommercial Educational Webcaster that
unexpectedly exceeded 80,000 total ATH on one or more channels or
stations for more than one month during the immediately preceding
calendar year may elect to pay the Proxy Fee and receive the reporting
waiver described in this paragraph (d)(1) during a calendar year, if it
implements measures reasonably calculated to ensure that it will not
make Educational Transmissions exceeding 80,000 total ATH during any
month of that calendar year. The Proxy Fee is intended to defray the
Collective's costs associated with the reporting waiver in this
paragraph (d)(1), including development of proxy usage data. The Proxy
Fee shall be paid by the date specified in paragraph (b) of this
section for paying the Minimum Fee for the applicable calendar year and
[[Page 82546]]
shall be accompanied by a certification on a form provided by the
Collective, signed by a duly authorized representative of the
applicable educational institution, stating that the Noncommercial
Educational Webcaster is eligible for the Proxy Fee option because of
its past and expected future usage and, if applicable, has implemented
measures to ensure that it will not make excess Educational
Transmissions in the future.
(2) Sample-basis reports. A Noncommercial Educational Webcaster
that did not exceed 160,000 total ATH for any individual channel or
station for more than one calendar month in the immediately preceding
calendar year and that does not expect to exceed 160,000 total ATH for
any individual channel or station for any calendar month during the
applicable calendar year may elect to provide reports of use on a
sample basis (two weeks per calendar quarter) in accordance with the
regulations at Sec. 370.4 of this chapter, except that,
notwithstanding Sec. 370.4(d)(2)(vi) of this chapter, such an electing
Noncommercial Educational Webcaster shall not be required to include
ATH or actual total performances and may in lieu thereof provide
channel or station name and play frequency. Notwithstanding the
preceding sentence, a Noncommercial Educational Webcaster that is able
to report ATH or actual total performances is encouraged to do so.
These reports of use shall be submitted to the Collective no later than
January 31st of the year immediately following the year to which they
pertain.
(3) Census-basis reports. (i) If any of the conditions in
paragraphs (d)(3)(i)(A) through (C) of this section is satisfied, a
Noncommercial Educational Webcaster must report pursuant to paragraph
(d)(3) of this section:
(A) The Noncommercial Educational Webcaster exceeded 160,000 total
ATH for any individual channel or station for more than one calendar
month in the immediately preceding calendar year;
(B) The Noncommercial Educational Webcaster expects to exceed
160,000 total ATH for any individual channel or station for any
calendar month in the applicable calendar year; or
(C) The Noncommercial Educational Webcaster otherwise does not
elect to be subject to paragraph (d)(1) or (2) of this section.
(ii) A Noncommercial Educational Webcaster required to report
pursuant to paragraph (d)(3)(i) of this section shall provide reports
of use to the Collective quarterly on a census reporting basis in
accordance with Sec. 370.4 of this chapter, except that,
notwithstanding Sec. 370.4(d)(2), such a Noncommercial Educational
Webcaster shall not be required to include ATH or actual total
performances, and may in lieu thereof provide channel or station name
and play frequency, during the first calendar year it reports in
accordance with this paragraph (d)(3). For the avoidance of doubt,
after a Noncommercial Educational Webcaster has been required to report
in accordance with paragraph (d)(3)(i) of this section for a full
calendar year, it must thereafter include ATH or actual total
Performances in its reports of use. All reports of use under paragraph
(d)(3)(i) of this section shall be submitted to the Collective no later
than the 30th day after the end of each calendar quarter.
(e) Server logs. Noncommercial Educational Webcasters shall retain
for a period of no less than three full calendar years server logs
sufficient to substantiate all information relevant to eligibility,
rate calculation and reporting under this subpart. To the extent that a
third-party Web hosting or service provider maintains equipment or
software for a Noncommercial Educational Webcaster and/or such third
party creates, maintains, or can reasonably create such server logs,
the Noncommercial Educational Webcaster shall direct that such server
logs be created and maintained by said third party for a period of no
less than three full calendar years and/or that such server logs be
provided to, and maintained by, the Noncommercial Educational
Webcaster.
(f) Terms in general. Subject to the provisions of this subpart,
terms governing late fees, distribution of royalties by the Collective,
unclaimed funds, record retention requirements, treatment of Licensees'
confidential information, audit of royalty payments and distributions,
and any definitions for applicable terms not defined in this subpart
shall be those set forth in subpart A of this part.
Dated October 4, 2024.
David P. Shaw,
Chief Copyright Royalty Judge.
[FR Doc. 2024-23426 Filed 10-10-24; 8:45 am]
BILLING CODE 1410-72-P
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