[Federal Register: August 4, 1999 (Volume 64, Number 149)]

[Proposed Rules]               

[Page 42316-42317]




Copyright Office

37 CFR Part 201

[Docket No. RM 99-5]


Notice and Recordkeeping for Subscription Digital Transmissions

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.


SUMMARY: The Copyright Office of the Library of Congress is proposing 

to amend the regulation that requires the filing of an initial notice 

of digital transmissions of sound recordings under statutory license 

with the Copyright Office to adjust for changes brought about by the 

passage of the Digital Millennium Copyright Act of 1998.

DATES: Comments are due September 3, 1999.

ADDRESSES: An original and ten copies of the comments shall be 

delivered to: Office of General Counsel, Copyright Office, LM-403, 

James Madison Memorial Building, 101 Independence Avenue, S.E., 

Washington, D.C. 20559-6000, or mailed to: David O. Carson, General 

Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station, 

Washington, D.C. 20024.

FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or 

Tanya M. Sandros, Attorney Advisor, Copyright GC/I&R, P.O. Box 70400, 

Southwest Station, Washington, D.C. 20024. Telephone: (202) 707-8380. 

Telefax: (202) 707-8366.



    On November 1, 1995, Congress enacted the Digital Performance Act 

in Sound Recordings Act of 1995 (``DPRA''), Public Law 104-39, 109 

Stat. 336 (1995). The DPRA gave to sound recording copyright owners an 

exclusive right to perform their works publicly by means of a digital 

audio transmission. 17 U.S.C. 106(6). The new right, however, was 

subject to certain limitations, including exemptions for certain 

digital transmissions, 17 U.S.C. 114(d)(1), and the creation of a 

statutory license for nonexempt digital subscription services. 17 

U.S.C. 114(d)(2).

    The statutory license requires adherence to regulations under which 

copyright owners may receive reasonable notice of use of their sound 

recordings under the statutory license, and under which entities 

performing the sound recordings shall keep and make available records 

of such use. 17 U.S.C. 114(f)(2). On May 13, 1996, the Copyright Office 

initiated a rulemaking proceeding to promulgate regulations to govern 

the notice and recordkeeping requirements. 61 FR 22004 (May 13, 1996). 

This rulemaking concluded with the issuance of interim rules to govern 

the filing of an initial notice of digital transmissions of sound 

recordings under statutory license, 37 CFR 201.35, and the filing of 

reports of use of sound recordings under statutory license, 37 CFR 

201.36. See 63 FR 34289 (June 24, 1998).

    At the time these regulations were announced, only three 

noninteractive, nonsubscription, digital transmissions services (DMX, 

Inc., Digital Cable Radio Associates/Music Choice, and Muzak, Inc.) 

were in operation and considered eligible for the license. 

Consequently, the Office prescribed a period for filing initial notices 

such that all existing services, which were already operating in 

accordance with the section 114 license, had to submit their notices 

within 45 days of the effective date of the regulation. Section 

201.35(f) reads, in part, as follows: ``A Service shall file the 

Initial Notice with the Licensing Division of the Copyright Office 

prior to the first transmission of sound

[[Page 42317]]

recordings under the license, or within 45 days of the effective date 

of this regulation.'' (Emphasis added).

    Subsequently, the President signed into law the Digital Millennium 

Copyright Act of 1998 (``DMCA''). Among other things, the DMCA expanded 

the section 114 compulsory license to allow a nonexempt, eligible 

nonsubscription transmission service and a pre-existing satellite 

digital audio radio service to perform publicly a sound recording by 

means of certain digital audio transmissions, subject to notice and 

recordkeeping requirements. 17 U.S.C. 114(f).

    The notice and recordkeeping requirements found in Secs. 201.35 and 

201.36 would appear to apply to any service eligible for the section 

114 license, including those newly eligible to use the license under 

the amended provisions of the license. However, these regulations 

provide no opportunity for a newly eligible nonsubscription 

transmission service which was in service prior to the passage of the 

DMCA to make a timely filing of its initial notice of transmission.

    Therefore, the Copyright Office is proposing an amendment to 

Sec. 201.35(f) which would extend the period for filing the initial 

notice to October 15, 1999, in order to allow the eligible 

nonsubscription services which were in operation prior to the passage 

of the DMCA an opportunity to file their initial notice timely. 

Comments on the extension of the filing period must be filed with the 

Copyright Office within September 3, 1999.

    The Office also recognizes that Sec. 201.36, which prescribes rules 

detailing how services shall notify copyright owners of the use of 

their sound recordings, what to include in that notice, and how to 

maintain and make available such records, does not apply to those 

services newly eligible for the section 114 license under the DMCA. 

Currently, Sec. 201.36(c) requires ``Reports of Use [to] be served upon 

Collectives that are identified in the records of the Licensing 

Division of the Copyright Office as having been designated under the 

statutory license, either by settlement agreement . . ., or by decision 

of a Copyright Arbitration Royalty Panel . . ., or by an order of the 

Librarian . . . .'' At this time, no collective has been designated in 

accordance with any of the methods enumerated in Sec. 201.36(c) for the 

purpose of collecting royalty fees from the newly eligible services, 

nor have any rates or terms been set for the use of the license by 

these services. See 63 FR 65555 (November 27, 1998). The newly eligible 

services and the interested copyright owners, however, continue 

negotiations to reach industry-wide agreement on rates and terms for 

the expanded section 114 license. In deference to these negotiations, 

the Office will refrain from initiating at this time a rulemaking 

proceeding to consider amendments to the recordkeeping regulations.

Regulatory Flexibility Act

    Although the Copyright Office, located in the Library of Congress 

which is part of the legislative branch, is not an ``agency'' subject 

to the Regulatory Flexibility Act, 5 U.S.C. 601-612, the Register of 

Copyrights has considered the effect of the proposed amendment on small 

businesses. The Register has determined that the amendment would not 

have a significant economic impact on a substantial number of small 

entities that would require provision of special relief for small 

entities. The proposed amendment is designed to minimize any 

significant economic impact on small entities.

List of Subjects in 37 CFR Part 201


Proposed Regulations

    For the reasons set forth in the preamble, part 201 of title 37 of 

the Code of Federal Regulations is proposed to be amended as follows:


    1. The authority citation for part 201 continues to read as 


    Authority: 17 U.S.C. 702.

    2. Section 201.35(f) is amended by removing the phrase ``or within 

45 days of the effective date of this regulation.'' and adding in its 

place ``or by October 15, 1999.''

    Dated: July 30, 1999.

Marybeth Peters,

Register of Copyrights.

[FR Doc. 99-19988 Filed 8-3-99; 8:45 am]