Rule2026-04632
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
March 10, 2026
Effective
March 10, 2026
Issuing agencies
Library of CongressCopyright Royalty Board
Abstract
The Copyright Royalty Judges publish a final rule governing the rates and terms for the nonsubscription digital performance of sound recordings by commercial broadcasters 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 91 Issue 46 (Tuesday, March 10, 2026)</title>
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[Federal Register Volume 91, Number 46 (Tuesday, March 10, 2026)]
[Rules and Regulations]
[Pages 11458-11462]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04632]
[[Page 11458]]
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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: Final rule.
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SUMMARY: The Copyright Royalty Judges publish a final rule governing
the rates and terms for the nonsubscription digital performance of
sound recordings by commercial broadcasters 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: Effective March 10, 2026.
Applicability date: The regulations apply to the license period
beginning January 1, 2026, and ending December 31, 2030.
ADDRESSES: Docket: For access to the docket, 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#21425343614d4e420f464e57"><span class="__cf_email__" data-cfemail="3f5c4d5d7f53505c11585049">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
On May 16, 2025, the Copyright Royalty Judges (``Judges'')
published a proposed rule governing the rates and terms for the digital
performance of sound recordings by commercial broadcasters 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. 90 FR 20977. The rates and terms in the proposed
rule were the subject of a settlement between SoundExchange, Inc.
(``SoundExchange''), and National Association of Broadcasters
(``NAB''). Joint Motion to Adopt Partial Settlement, Docket No. 23-CRB-
0012-WR (2026-2030). Those who would be bound by the terms, rates, or
other determination set by the agreement were given the opportunity to
comment and participants in the Web VI proceeding were given the
opportunity to object to any or all of the proposed regulations.
The Judges received one comment from David Powell, who is not a
participant in the proceeding. While Mr. Powell's comment is largely
incomprehensible, he appears to take issue with the fact that he was
not provided leave to file an untimely petition to participate in the
proceeding. He also appears to take issue with royalty distribution
practices of SoundExchange.
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 licenses or
otherwise contrary to statutory law. No Web VI participant has objected
to the settlement. The Register of Copyrights has completed her review
of the CRB's Final Rule for legal error, under 17 U.S.C. 803(f)(1)(D),
and will not be issuing any corrections. In the absence of any
objection from a participant, and in the absence of any cognizable
indication that the Final Rule includes provisions that are contrary to
the applicable licenses or otherwise contrary to statutory law, the
provisions of 17 U.S.C. 801(b)(7)(A) direct the Judges to adopt the
Final Rule. Therefore, the Judges adopt the terms and rates as
proposed. The Judges find that under the circumstances of this
proceeding and this settlement, adoption of the Final Rule is directed
by the statute, and that such directed adoption is principally a
ministerial function by the Judges.
List of Subjects in 37 CFR Part 380
Copyright, Sound recordings, Webcasters.
Final Regulations
For the reasons set forth in the preamble, the Copyright Royalty
Judges 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. Add subpart E to read as follows:
Subpart E--Nonsubscription Transmissions by Commercial Broadcasters
Sec.
380.40 Definitions.
380.41 Royalty fees for the public performance of sound recordings
by Commercial Broadcasters making Nonsubscription Transmissions and
for Ephemeral Recordings.
380.42 Making payment of royalty fees.
380.43 Delivering statements of account.
380.44 Distributing royalty fees.
380.45 Handling Confidential Information.
380.46 Auditing payments and distributions.
Sec. 380.40 Definitions.
In addition to the definitions in Sec. 380.7, the following
definitions apply for purposes of this subpart:
Collective means the collection and distribution organization that
is designated by the Copyright Royalty Judges, which, for the current
rate period, is SoundExchange, Inc.
Commercial Broadcaster is a Commercial Webcaster, a material part
of the business of which consists of owning and operating one or more
terrestrial AM or FM broadcast radio stations licensed as such by the
Federal Communications Commission.
Commercial Webcaster means a Licensee, other than a Noncommercial
Webcaster, Noncommercial Educational Webcaster, or Public Broadcaster,
that makes Ephemeral Recordings and eligible Digital Audio
Transmissions of sound recordings pursuant to the statutory licenses
under 17 U.S.C. 112(e) and 114(d)(2).
Copyright Owners means sound recording copyright owners, and rights
owners under 17 U.S.C. 1401(l)(2), who are entitled to royalty payments
made under this part pursuant to the statutory licenses under 17 U.S.C.
112(e) and 114.
Digital Audio Transmission has the same meaning as in 17 U.S.C.
114(j)(5).
Eligible Transmission means a Nonsubscription Transmission made by
a Licensee that is subject to licensing under 17 U.S.C. 114(d)(2) and
the payment of royalties under this part.
Ephemeral Recording has the same meaning as in 17 U.S.C. 112.
[[Page 11459]]
Licensee means a Commercial Webcaster, a Noncommercial Webcaster, a
Noncommercial Educational Webcaster, a Public Broadcaster, or any
entity operating a noninteractive internet streaming service that has
obtained a license under 17 U.S.C. 114 to make Eligible Transmissions
and a license under 17 U.S.C. 112(e) to make Ephemeral Recordings to
facilitate those Eligible Transmissions.
Noncommercial Educational Webcaster means a Noncommercial
Educational Webcaster under subpart C of this part.
Noncommercial Webcaster has the same meaning as in 17 U.S.C.
114(f)(4)(E), but excludes a Noncommercial Educational Webcaster or
Public Broadcaster.
Nonsubscription has the same meaning as in 17 U.S.C. 114(j)(9).
Payor means the entity required to make royalty payments to the
Collective or the entity required to distribute royalty fees collected,
depending on context. The Payor is:
(1) A Licensee, in relation to the Collective; and
(2) The Collective in relation to a Copyright Owner or Performer.
Performance means each instance in which any portion of a sound
recording is publicly performed to a listener by means of a Digital
Audio Transmission (e.g., the delivery of any portion of a single track
from a compact disc or server copy to one listener), but excludes the
following:
(1) A performance of a sound recording that does not require a
license (e.g., a sound recording that is not subject to protection
under title 17, United States Code);
(2) A performance of a sound recording for which the service has
previously obtained a license from the Copyright Owner of such sound
recording; and
(3) An incidental performance that both:
(i) Makes no more than incidental use of sound recordings
including, but not limited to, brief musical transitions in and out of
commercials or program segments, brief performances during news, talk
and sports programming, brief background performances during disk
jockey announcements, brief performances during commercials of sixty
seconds or less in duration, or brief performances during sporting or
other public events; and
(ii) Does not contain an entire sound recording, other than ambient
music that is background at a public event, and does not feature a
particular sound recording of more than thirty seconds (as in the case
of a sound recording used as a theme song).
Performers means the independent administrators identified in 17
U.S.C. 114(g)(2)(B) and (C) and the parties identified in 17 U.S.C.
114(g)(2)(D).
Public Broadcaster means a Public Broadcaster under subpart D of
this part.
Qualified Auditor means an independent Certified Public Accountant.
Transmission has the same meaning as in 17 U.S.C. 114(j)(15).
Sec. 380.41 Royalty fees for the public performance of sound
recordings by Commercial Broadcasters making Nonsubscription
Transmissions and for Ephemeral Recordings.
(a) Royalty fees. During the period 2026-2030, royalty rates for
Commercial Broadcasters making Nonsubscription Digital Audio
Transmissions of sound recordings pursuant to 17 U.S.C. 114, and for
Ephemeral Recordings of sound recordings made pursuant to 17 U.S.C.
112(e) to facilitate such transmissions, are as follows:
(1) 2026: $0.0028 per Performance;
(2) 2027: $0.0029 per Performance;
(3) 2028: $0.0030 per Performance;
(4) 2029: $0.0031 per Performance; and
(5) 2030: $0.0032 per Performance.
(b) Minimum fee. (1) Subject to paragraph (b)(2) of this section,
Commercial Broadcasters making Nonsubscription Digital Audio
Transmissions of sound recordings pursuant to 17 U.S.C. 114 must pay
the Collective a minimum fee as follows each year for each channel or
station:
(i) 2026: $1,100;
(ii) 2027: $1,150;
(iii) 2028: $1,200;
(iv) 2029: $1,250; and
(v) 2030: $1,250.
(2) The Collective must apply the fee to the Commercial
Broadcaster's account as credit towards any additional royalty fees
that the Commercial Broadcaster may incur under this subpart in the
same year. The fee is payable for each individual channel and each
individual station maintained or operated by the Commercial Broadcaster
and making Nonsubscription Digital Audio Transmissions of sound
recordings pursuant to 17 U.S.C. 114 during each calendar year or part
of a calendar year during which it is a Licensee. The maximum aggregate
minimum fee that a Commercial Broadcaster making Nonsubscription
Digital Audio Transmissions of sound recordings pursuant to 17
U.S.C.114 must pay under this subpart in any calendar year is 100
multiplied by the applicable amount specified in paragraph (b)(1) of
this section. The minimum fee is nonrefundable.
(c) Ephemeral Recordings royalty fees; allocation between Ephemeral
Recordings and performance royalty fees. The Collective must credit 5%
of all royalty payments under this subpart as payment for Ephemeral
Recordings and credit the remaining 95% to section 114 royalties. All
Ephemeral Recordings that a Commercial Broadcaster makes which are
necessary and commercially reasonable for making noninteractive
Nonsubscription Digital Audio Transmissions are included in the 5%.
Sec. 380.42 Making payment of royalty fees.
(a) Payment to the Collective. A Commercial Broadcaster must make
the royalty payments due under this subpart to SoundExchange, Inc.,
which is the Collective designated by the Copyright Royalty Board to
collect and distribute royalties under this subpart.
(b) Monthly payments. A Commercial Broadcaster must make royalty
payments on a monthly basis. Payments, Statements of Account and
Reports of Use are due on or before the 30th day after the end of the
month in which the Commercial Broadcaster made Nonsubscription Digital
Audio Transmissions of sound recordings pursuant to 17 U.S.C. 114.
(c) Minimum payments. A Commercial Broadcaster must make any
minimum annual payments due under this subpart by January 31 of the
applicable license year. A Commercial Broadcaster that as of January 31
of any year has not made any Nonsubscription Digital Audio
Transmissions or Ephemeral Recordings pursuant to the licenses in 17
U.S.C. 114 and/or 17 U.S.C. 112(e), but that begins making such
transmissions after that date must make any payment due by the 30th day
after the end of the month in which the Commercial Broadcaster
commences making such transmissions.
(d) Late fees. (1) A Commercial Broadcaster must pay a late fee for
each payment and each Statement of Account that the Collective receives
after the due date. The late fee is 1.5% (or the highest lawful rate,
whichever is lower) of the late payment amount per month, except as
specified in paragraph (d)(2) of this section. The late fee for a late
Statement of Account is 1.5% of the payment amount associated with the
Statement of Account. Late fees accrue from the due date until the date
that the Collective receives the late payment or late Statement of
Account.
(2) In a case in which, pursuant to Sec. 380.46(g), an auditor
determines that a Commercial Broadcaster underpaid royalties pursuant
to this subpart:
[[Page 11460]]
(i) The late fee applicable to the underpayment so discovered shall
accrue at the rate of 1% (or the highest lawful rate, whichever is
lower) of the underpayment amount per month during the period starting
on the date that the relevant notice of intent to audit is filed with
the Copyright Royalty Judges pursuant to Sec. 380.46(c), and ending on
the date that the auditor provides its written report pursuant to Sec.
380.46(f);
(ii) The late fee applicable to the underpayment so discovered
shall accrue at the rate provided in paragraph (d)(1) of this section
at all other times between the due date and the date that the
Collective receives the underpayment so discovered; and
(iii) The total amount of late fees applicable to the underpayment
so discovered shall in no event exceed 75% of the principal amount of
the underpayment so discovered.
(e) Waiver of late fees. The Collective may waive or lower late
fees for immaterial or inadvertent failures of a Commercial Broadcaster
to make a timely payment or submit a timely Statement of Account.
(f) Notice regarding noncompliant Statements of Account. If it is
reasonably evident to the Collective that a timely-provided Statement
of Account is materially noncompliant, the Collective must notify the
Commercial Broadcaster within 90 days of discovery of the
noncompliance.
(g) Use of account numbers. If the Collective notifies a Commercial
Broadcaster of an account number to be used to identify its royalty
payments for a particular service offering, the Commercial Broadcaster
must include that account number on its check or check stub for any
payment for that service offering made by check, in the identifying
information for any payment for that service offering made by
electronic transfer, in its statements of account for that service
offering under Sec. 380.43, and in the transmittal of its Reports of
Use for that service offering under Sec. 370.4 of this chapter.
Sec. 380.43 Delivering statements of account.
(a) Statements of Account. Any payment due under this part must be
accompanied by a corresponding Statement of Account that must contain
the following information:
(1) Such information as is necessary to calculate the accompanying
royalty payment;
(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 account number assigned to the Licensee by the Collective
for the relevant service offering (if the Licensee has been notified of
such account number by the Collective);
(4) The signature of:
(i) The Licensee or a duly authorized agent of the Licensee;
(ii) A partner or delegate if the Licensee is a partnership; or
(iii) An officer of the corporation if the Licensee is a
corporation.
(5) The printed or typewritten name of the person signing the
Statement of Account;
(6) If the Licensee is a partnership or corporation, the title or
official position held in the partnership or corporation by the person
signing the Statement of Account;
(7) A certification of the capacity of the person signing;
(8) The date of signature; and
(9) An attestation to the following effect: I, the undersigned
owner/officer/partner/agent of the Licensee have examined this
Statement of Account and hereby state that it is true, accurate, and
complete to my knowledge after reasonable due diligence and that it
fairly presents, in all material respects, the liabilities of the
Licensee pursuant to 17 U.S.C. 112(e) and 114 and applicable
regulations adopted under those sections.
(b) Certification. Licensee's Chief Financial Officer or, if
Licensee does not have a Chief Financial Officer, a person authorized
to sign Statements of Account for the Licensee, must submit a signed
certification on an annual basis attesting that the Licensee's royalty
statements for the prior year represent a true and accurate
determination of the royalties due and that any method of allocation
employed by Licensee was applied in good faith and in accordance with
U.S. GAAP.
Sec. 380.44 Distributing royalty fees.
(a) Distribution of royalties. (1) The Collective must promptly
distribute royalties received from Commercial Broadcasters to Copyright
Owners and Performers that are entitled thereto, or to their designated
agents. The Collective shall only be responsible for making
distributions to those who provide the Collective with information as
is necessary to identify and pay the correct recipient. The Collective
must distribute royalties on a basis that values all Performances by a
Commercial Broadcaster equally based upon the information provided
under the Reports of Use requirements for Commercial Broadcasters
pursuant to Sec. 370.4 of this chapter and this subpart. In any case
in which a Commercial Broadcaster has not provided a compliant Report
of Use, whether for the current license period or otherwise, and the
board of directors of the Collective determines that further efforts to
seek the missing Report of Use from the Commercial Broadcaster would
not be warranted, the Collective may distribute the royalties
associated with the Commercial Broadcaster's missing Report of Use on
the basis of Reports of Use for the corresponding calendar year filed
by other Licensees.
(2) The Collective must use its best efforts to identify and locate
Copyright Owners and featured artists in order to distribute royalties
payable to them under 17 U.S.C. 112(e) and 114. Such efforts must
include, but not be limited to, searches in Copyright Office public
records and published directories of sound recording Copyright Owners.
(b) Unclaimed funds. If the Collective is unable to identify or
locate a Copyright Owner or Performer who is entitled to receive a
royalty distribution under this part, the Collective must retain the
required payment in a segregated trust account for a period of three
years from the date of the first distribution of royalties from the
relevant payment by a Commercial Broadcaster. No claim to distribution
shall be valid after the expiration of the three-year period. After
expiration of this period, the Collective may apply the unclaimed funds
to offset any costs deductible under 17 U.S.C. 114(g)(3).
(c) Retention of records. Commercial Broadcasters shall keep and
securely store complete and accurate books and records relating to
payments of royalties under this subpart for a period of not less than
the prior three calendar years, including all supporting documentation
necessary to permit verification of the accuracy of their payments
pursuant to Sec. 380.46. On and after January 1, 2027, a Commercial
Broadcaster using a third-party vendor for transmission of Performances
licensed as Nonsubscription Digital Audio Transmissions pursuant to 17
U.S.C. 114 or reporting due pursuant to this subpart must comply with
this requirement by either obtaining necessary data from its vendor on
an ongoing basis or contractually requiring delivery of necessary data
by its vendor in the event of verification pursuant to Sec. 380.46.
The Collective shall keep books and records relating to distributions
of royalties for a period of not less than the prior three calendar
years.
(d) Designation of the Collective. (1) The Judges designate
SoundExchange,
[[Page 11461]]
Inc., as the Collective to receive Statements of Account and royalty
payments from Commercial Broadcasters and to distribute royalty
payments to each Copyright Owner and Performer (or their respective
designated agents) entitled to receive royalties under 17 U.S.C. 112(e)
or 114(g).
(2) If SoundExchange, Inc. should dissolve or cease to be governed
by a board consisting of equal numbers of representatives of Copyright
Owners and Performers, then it shall be replaced for the applicable
royalty period by a successor Collective according to the following
procedure:
(i) The nine Copyright Owner representatives and the nine Performer
representatives on the SoundExchange board as of the last day preceding
SoundExchange's cessation or dissolution shall vote by a majority to
recommend that the Copyright Royalty Judges designate a successor and
must file a petition with the Copyright Royalty Judges requesting that
the Judges designate the named successor and setting forth the reasons
therefor.
(ii) Within 30 days of receiving the petition, the Copyright
Royalty Judges must issue an order designating the recommended
Collective, unless the Judges find good cause not to make and publish
the designation in the Federal Register.
Sec. 380.45 Handling Confidential Information.
(a) Definition. For purposes of this part, ``Confidential
Information'' means the Statements of Account and any information
contained therein, including the amount of royalty payments and the
number of Performances, and any information pertaining to the
Statements of Account reasonably designated as confidential by the
party submitting the statement. Confidential Information does not
include documents or information that at the time of delivery to the
Collective is public knowledge. The party seeking information from the
Collective based on a claim that the information sought is a matter of
public knowledge shall have the burden of proving to the Collective
that the requested information is in the public domain.
(b) Use of Confidential Information. The Collective may not use any
Confidential Information for any purpose other than royalty collection
and distribution and activities related directly thereto.
(c) Disclosure of Confidential Information. The Collective shall
limit access to Confidential Information to:
(1) Those employees, agents, consultants, and independent
contractors of the Collective, subject to an appropriate written
confidentiality agreement, who are engaged in the collection and
distribution of royalty payments hereunder and activities related
directly thereto who require access to the Confidential Information for
the purpose of performing their duties during the ordinary course of
their work;
(2) A Qualified Auditor or outside counsel who is authorized to act
on behalf of:
(i) The Collective with respect to verification of a Licensee's
statement of account pursuant to this part; or
(ii) A Copyright Owner or Performer with respect to the
verification of royalty distributions pursuant to this part;
(3) Copyright Owners and Performers, including their designated
agents, whose works a Licensee used under the statutory licenses set
forth in 17 U.S.C. 112(e) and 114 by the Licensee whose Confidential
Information is being supplied, subject to an appropriate written
confidentiality agreement, and including those employees, agents,
consultants, and independent contractors of such Copyright Owners and
Performers and their designated agents, subject to an appropriate
written confidentiality agreement, who require access to the
Confidential Information to perform their duties during the ordinary
course of their work;
(4) Attorneys and other authorized agents of parties to proceedings
under 17 U.S.C. 112 and 114, acting under an appropriate protective
order.
(d) Safeguarding Confidential Information. The Collective and any
person authorized to receive Confidential Information from the
Collective must implement procedures to safeguard against unauthorized
access to or dissemination of Confidential Information using a
reasonable standard of care, but no less than the same degree of
security that the recipient uses to protect its own Confidential
Information or similarly sensitive information.
Sec. 380.46 Auditing payments and distributions.
(a) General. This section prescribes procedures by which any entity
entitled to receive payment or distribution of royalties may verify
payments or distributions by auditing the Payor. The Collective may
audit a Commercial Broadcaster's payments of royalties to the
Collective, and a Copyright Owner or Performer may audit the
Collective's distributions of royalties to the Copyright Owner or
Performer. Nothing in this section shall preclude a verifying entity
and the Payor from agreeing to verification methods in addition to or
different from those set forth in this section.
(b) Frequency of auditing. The verifying entity may conduct an
audit of each Payor only once a year for any or all of the prior three
calendar years. A verifying entity may not audit records for any
calendar year more than once.
(c) Notice of intent to audit. The verifying entity must file with
the Copyright Royalty Judges a notice of intent to audit the Payor,
which notice the Judges must publish in the Federal Register within 30
days of the filing of the notice. Simultaneously with the filing of the
notice, the verifying entity must deliver a copy to the Payor.
(d) The audit. The audit must be conducted during regular business
hours by a Qualified Auditor who is not retained on a contingency fee
basis and is identified in the notice. The auditor shall determine the
accuracy of royalty payments or distributions, including whether an
underpayment or overpayment of royalties was made. An audit of books
and records, including underlying paperwork, performed in the ordinary
course of business according to generally accepted auditing standards
by a Qualified Auditor, shall serve as an acceptable verification
procedure for all parties with respect to the information that is
within the scope of the audit.
(e) Access to third-party records for audit purposes. The Payor
must use commercially reasonable efforts to obtain or to provide access
to any relevant books and records maintained by third parties for the
purpose of the audit.
(f) Duty of auditor to consult. The auditor must produce a written
report to the verifying entity. Before rendering the report, unless the
auditor has a reasonable basis to suspect fraud on the part of the
Payor, the disclosure of which would, in the reasonable opinion of the
auditor, prejudice any investigation of the suspected fraud, the
auditor must review tentative written findings of the audit with the
appropriate agent or employee of the Payor in order to remedy any
factual errors and clarify any issues relating to the audit; Provided
that an appropriate agent or employee of the Payor reasonably
cooperates with the auditor to remedy promptly any factual errors or
clarify any issues raised by the audit. The auditor must include in the
written report information concerning the cooperation or the lack
thereof of the employee or agent.
(g) Audit results; underpayment or overpayment of royalties. If the
auditor
[[Page 11462]]
determines the Payor underpaid royalties, the Payor shall remit the
amount of any underpayment determined by the auditor to the verifying
entity, together with interest as specified in Sec. 380.42(d). In the
absence of mutually-agreed payment terms, which may, but need not,
include installment payments, the Payor shall remit promptly to the
verifying entity the entire amount of the underpayment determined by
the auditor and the applicable late fees. If the auditor determines the
Payor overpaid royalties, however, the verifying entity shall not be
required to remit the amount of any overpayment to the Payor, and the
Payor shall not seek by any means to recoup, offset, or take a credit
for the overpayment, unless the Payor and the verifying entity have
agreed otherwise.
(h) Paying the costs of the audit. The verifying entity must pay
the cost of the verification procedure, unless the auditor determines
that there was a net underpayment (i.e., underpayments less any
overpayments) of 10% or more, in which case the Payor must bear the
reasonable, documented costs of the verification procedure, in addition
to paying or distributing the amount of any underpayment.
(i) Retention of audit report. The verifying entity must retain the
report of the audit for a period of not less than three years from the
date of issuance.
Dated: February 26, 2026.
Trevor Jefferson,
Interim Chief Copyright Royalty Judge.
David R. Strickler,
Copyright Royalty Judge.
Steve Ruwe,
Copyright Royalty Judge.
Approved by:
Robert R. Newlen,
Acting Librarian of Congress.
[FR Doc. 2026-04632 Filed 3-9-26; 8:45 am]
BILLING CODE 1410-72-P
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