[Federal Register: March 11, 2005 (Volume 70, Number 47)]
[Page 12242-12243]

Copyright Office

[Docket No. 2005-3 CARP]

Notice of Intent to Audit

AGENCY: Copyright Office, Library of Congress

ACTION: Public notice


The Copyright Office of the Library of Congress is announcingreceipt of a notice of intent to audit DMX Music, Inc., for its transmissions of sound recordings to business establishments made under an exemption to the digital performance right. This audit intends to review transmissions to business establishments made by DMX Music, Inc., for the years 2002, 2003, and 2004.


Tanya M. Sandros, Associate General Counsel, or Abioye E. Oyewole, CARP Specialist, Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024-0977. Telephone: (202) 707-8380. Telefax: (202) 707-3423.


Section 106(6) of the Copyright Act, title 17 of the United States Code, gives the copyright owner of a sound recording the right to perform the sound recording publicly by means of a digital audio transmission, subject to certain limitations. Among these limitations is an exemption from the digital performance right for services making digital transmissions of sound recordings to a business establishment for use in the ordinary course of its business (henceforth, “Business Establishment Services”), provided that two conditions are met: 1) the business recipient does not retransmit the transmissions outside of its premises or the immediate surrounding vicinity and, 2) the transmissions do not exceed the sound recording performance complement. While Business Establishment Services do not pay royalty fees for the right to transmit the sound recording, they do make ephemeral phonorecords under a statutory license, see 17 U.S.C. 112(e), to facilitate the transmission of the sound recordings. Use of this license requires the Business Establishment Service to make payments of royalty fees to and file reports of sound recording performances with SoundExchange, a collecting rights entity that was designated by the Librarian of Congress to collect and distribute royalty fee payments made under section 112(e). See 69 FR 5693 (February 6, 2004) and 69 FR 11515 (March 11, 2004).

Pursuant to Sec. 262.6 of title 37 of the Code of Federal Regulations, as the Designated Agent, SoundExchange may conduct a single audit of a Licensee, such as DMX Music, Inc., for the purpose of verifying their royalty payments. As a preliminary matter, the Designated Agent is required to submit a notice of its intent to audit a Licensee with the Copyright Office and to serve this notice on the service to be audited. 37 CFR 262.6(c).

On February 16, 2005, SoundExchange filed with the Copyright Office a notice of intent to audit DMX Music, Inc.,\1\ for the years 2002, 2003, and 2004. As stated in section 262.6(c), the Copyright Office then is required to publish a notice in

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the Federal Register within thirty days of receipt of the filing announcing the Designated Agent's intent to conduct an audit.


\1\ A copy of the Notice of Intent to Audit DMX Music, Inc., will be posted on the Office website at http://www.copyright.gov/carp/dmx_notice262.pdf.


In accordance with this regulation, the Office is publishing today's notice to fulfill this requirement with respect to SoundExchange's notice of intent to audit.


Dated: March 8, 2005.
Tanya M. Sandros,
Associate General Counsel.