[Federal Register: October 18, 1996 (Volume 61, Number 203)]
[Page 54458-54461]


Copyright Office
[Docket No. 96-6 CARP NCBRA]

Noncommercial Educational Broadcasting Compulsory License

AGENCY: Copyright Office, Library of Congress.

ACTION: Voluntary negotiation period, precontroversy discovery
schedule, and request for notices of intent to participate.


[[Page 54459]]

SUMMARY: The Copyright Office of the Library of Congress is announcing
a voluntary negotiation period for the 17 U.S.C. 118 noncommercial
educational broadcasting compulsory license, along with a
precontroversy discovery schedule, a request for Notices of Intent to
Participate, and the initiation date should arbitration proceedings be

DATES: Notices of Intent to Participate are due on or before December
13, 1996.

ADDRESSES: If sent by mail, an original and five copies of Notices of
Intent to Participate should be addressed to: Copyright Arbitration
Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington,
D.C. 20024. If hand delivered, an original and five copies of Notices
of Intent to Participate should be brought to: Office of the Copyright
General Counsel, James Madison Memorial Building, Room LM-407, First
and Independence Avenue, S.E. Washington D.C. 20540.

FOR FURTHER INFORMATION CONTACT: William Roberts, Senior Attorney, or
Tanya Sandros, CARP Specialist, Copyright Arbitration Royalty Panel
(CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024.
Telephone (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION: Section 118 of the Copyright Act, 17 U.S.C.,
creates a compulsory license for the use of certain copyrighted works
in connection with noncommercial broadcasting. Terms and rates for this
compulsory license, applicable to parties who are not subject to
privately negotiated licenses, are published in 37 CFR part 253 and are
subject to adjustment at five year intervals. The last adjustment of
the terms and rates for the section 118 license occurred in 1992, thus,
making 1997 a window year for the adjustment of these terms and rates.
    Section 118(b) provides that copyright owners and public
broadcasting entities may voluntarily negotiate licensing agreements at
any time, and that such licensing agreements will be ``given effect in
lieu of any determination by the Librarian of Congress; Provided, That
copies of such agreements are filed in the Copyright Office within
thirty days of execution in accordance with regulations that the
Register of Copyrights shall prescribe.'' 17 U.S.C. 118(b)(2).
    Those parties not subject to a negotiated license must follow the
terms and rates adopted through arbitration proceedings conducted under
chapter 8 of the Copyright Act. Section 118(b)(3) provides:

    In the absence of license agreements negotiated under paragraph
(2), the Librarian of Congress shall, pursuant to chapter 8, convene
a copyright arbitration royalty panel to determine and publish in
the Federal Register a schedule of rates and terms which, subject to
paragraph (2), shall be binding on all owners of copyright in works
specified by this subsection and public broadcasting entities,
regardless of whether such copyright owners have submitted proposals
to the Librarian of Congress. * * *

Subsection (c) provides that these procedures are to ``be * * *
concluded between June 30 and December 31, 1997. * * *'' \1\

    \1\ Section 253.1 of the Copyright Office's rules, 37 CFR,
provides that the current statutory terms and rates for the section
118 license will expire on December 31, 1997.

    In order to commence the adjustment process described in section
118, the Copyright Office of the Library of Congress is publishing
today's notice. With respect to private licenses, we note that the
statute provides that they may be negotiated at any time and must be
submitted to the Copyright Office in order to be effective. However, in
keeping with Copyright Royalty Tribunal tradition, see e.g. 57 FR 29066
(June 30, 1992), we believe that it is appropriate and efficient to
designate a negotiation period, prior to copyright arbitration royalty
panel (CARP) proceedings, in order to encourage private agreements and,
possibly, avoid the need for a CARP. Consequently, we are announcing a
voluntary negotiation period commencing November 1, 1996, and running
to December 13, 1996. Any agreements entered into during this period
should be deposited with the Copyright Office in accordance with the
regulations established in 37 CFR 201.9. Of course, license agreements
may still be negotiated and deposited prior to, and after, the
designated negotiation period.
    The Library notes that while many of the terms and rates of the
section 118 license typically have been subject to private negotiation,
certain terms and rates have not. These terms and rates affect the
works of unknown copyright owners and owners not affiliated with one or
more of the performing rights societies and/or artists organizations.
See, e.g. 37 CFR 253.5(c)(4) and 253.6(c)(4). The Library recognizes
that it is difficult, if not impossible, for noncommercial educational
broadcasting entities to identify these copyright owners in order to
negotiate terms and rates of licenses. Consequently, in these limited
circumstances where negotiated licenses are not practicable, the
Library is willing to accept proposals for terms and rates from
noncommercial education broadcasting entities and subject them to the
public notice and comment provisions of Sec. 251.63(b) of the Library's
rules. The Librarian will adopt the proposed rates and terms, unless a
copyright owner, with a significant interest in the proposal and an
intent to participate fully in a CARP proceeding, files comment
opposing the proposed terms and rates.
    For all other terms and rates for the section 118 license, in the
absence of negotiated licenses, the Librarian of Congress will convene
a CARP. The proceeding will be conducted according to the following

Notices of Intent To Participate

    Any party wishing to appear before the CARP, and to present
evidence, in this proceeding must file a Notice of Intent to
Participate by December 13, 1996. Failure to file a timely Notice of
Intent to Participate will preclude a party from participating in this

Precontroversy Discovery Schedule

    The Library of Congress is announcing the scheduling of the
precontroversy discovery period, and other procedural matters, for the
establishment of rates and terms for the section 118 compulsory
license. In addition, the Library is announcing the date on which
arbitration proceedings will be initiated before a CARP, thereby
commencing the 180-day arbitration period. Once a CARP has been
convened, the scheduling of the arbitration period is within the
discretion of the CARP and will be announced at that time.

A. Commencement of the Proceeding

    A rate adjustment proceeding under part 251 of 37 CFR is divided
into two essential phases. The first is the 45-day precontroversy
discovery phase, during which the parties exchange their written direct
cases, exchange their documentation and evidence in support of their
written direct cases, and engage in the pre-CARP motions practice
described in Sec. 251.45. The other phase is the proceeding before the
CARP itself, including the presentation of evidence and the submission
of proposed findings by all of the participating parties. The
proceeding before the CARP may be in the form of hearings or, in
accordance with the requirements of Sec. 251.41(b) of the rules, the
proceeding may be conducted solely on the basis of written pleadings.
    Both of these phases to a rate adjustment proceeding require
significant amounts of work, not just for

[[Page 54460]]

the parties, but for the Librarian, the Copyright Office, and the
arbitrators as well. The rates and terms proceeding for section 118 is
not the only CARP proceeding likely to take place during 1997. Other
proceedings will include distribution of cable, satellite, and digital
audio royalties, as well as rate adjustment proceedings for satellite,
the digital performance license (section 114), and the mechanical
license (section 115). It would be extremely difficult for the Office
to conduct the precontroversy discovery phase of more than one of these
proceedings at the same time, and the Library must, therefore, conduct
them sequentially.
    Because of the number of CARP proceedings to be conducted in 1996
and 1997, and the attending workload, selection of a date to initiate a
section 118 rate setting proceeding is not dependent on the schedules
of one or more of the participating parties, but must be weighed
against the interests of all involved. The parties affected by section
118 are most likely aware that 1997 is a window year for the adjustment
of terms and rates, and, as described above, are being given a formal
negotiation period to reach agreements. Because of the other
proceedings which must be scheduled, the attending workload, and the
need to manage the interests of all involved, the Library is announcing
the precontroversy discovery schedule and arbitration period in this
proceeding without seeking further comment from the participating

B. Precontroversy Discovery Schedule and Procedures

    Any party that has filed a Notice of Intent to Participate in the
section 118 adjustment proceeding is entitled to participate in the
precontroversy discovery period. Each party may request of an opposing
party nonprivileged documents underlying facts asserted in the opposing
party's written direct case. The precontroversy discovery period is
limited to discovery of documents related to written direct cases and
any amendments made during the period.
    The rules of the Library of Congress do not specify any particular
steps or regimen to the precontroversy discovery period. We believe,
however, that it is necessary to establish procedural dates for
exchange of documents and filing of motions within the 45-day period to
provide order and allow discovery to proceed smoothly and efficiently.
The precontroversy discovery schedule set forth by the Library in the
recent cable distribution proceeding, see 60 FR 14975 (March 21, 1995),
proved to be successful in promoting an orderly and efficient discovery
period, and we have chosen to adopt the same format and structure for
the precontroversy discovery period in this proceeding.
    The following is the precontroversy discovery procedural schedule
with corresponding deadlines:

              Action                              Deadline
Filing of Written Direct Cases....  January 10, 1997
Requests for Underlying Documents   January 17, 1997
 Related to Written Direct Cases.
Responses to Requests for           January 24, 1997
 Underlying Documents.
Completion of Document Production.  January 31, 1997
Follow-up Requests for Underlying   February 5, 1997
Responses to Follow-up Requests...  February 10, 1997
Motions Related to Document         February 14, 1997
Production of Documents in          February 19, 1997
 Response to Follow-up Requests.
All Other Motions, Petitions, and   February 24, 1997

    The precontroversy discovery period, as specified by Sec. 251.45(b)
of the rules, begins on January 10, 1997, with the filing of written
direct cases by each party. Each party in this proceeding who has filed
a Notice of Intent to Participate must file a written direct case on
the date prescribed above. Failure to submit a timely filed written
direct case will result in dismissal of that party's case. Parties must
comply with the form and content of written direct cases as prescribed
in 37 CFR 251.43. Each party to the proceeding must deliver a complete
copy of its written direct case to each of the other parties to the
proceeding, as well as file a complete copy with the Copyright Office
by close of business on January 10, 1997, the first day of the 45-day
    After the filing of the written direct cases, document production
will proceed according to the above-described schedule. Each party may
request underlying documents related to each of the other parties'
written direct cases by January 17, 1997, and responses to those
requests are due by January 24, 1997. Documents which are produced as a
result of the requests must be exchanged by January 31, 1997. It is
important to note that all initial document requests must be made by
the January 17, 1997, deadline. Thus, for example, if one party asserts
facts that expressly rely on the results of a particular study that was
not included in the written direct case, another party desiring
production of that study must make its request by January 17, 1997;
otherwise, the party is not entitled to production of the study.
    The precontroversy discovery schedule also establishes deadlines
for follow-up discovery requests. Follow-up requests are due by
February 5, 1997, and responses to those requests are due by February
10, 1997. Any documentation produced as a result of a follow-up request
must be exchanged by February 19, 1997. An example of a follow-up
request would be as follows. In the above example, one party expressly
relies on the results of a particular study which is not included in
its written direct case. As noted above, a party desiring production of
that study or survey must make its request by January 17, 1997. If,
after receiving a copy of the study, the reviewing party determines
that the study heavily relies on the results of a statistical survey,
it would be appropriate for that party to make a follow-up request for
production of the statistical survey by the February 5, 1997, deadline.
Again, failure to make a timely follow-up request would waive that
party's right to request production of the survey.
    In addition to the deadlines for document requests and production,
there are two deadlines for the filing of precontroversy motions.
Motions related to document production must be filed by February 14,
1997. Typically, these motions are motions to compel production of
requested documents for failure to produce them, but they may also be
motions for protective orders. Finally, all other motions, petitions
and objections must be filed by February 24, 1997, the final day of the
45-day precontroversy discovery period. These motions, petitions, and
objections include, but are not limited to,

[[Page 54461]]

objections to arbitrators appearing on the arbitrator list under 37 CFR
251.4, and petitions to dispense with formal hearings under
Sec. 251.41(b).
    Due to the time limitations between the procedural steps of the
precontroversy discovery schedule, we are requiring that all discovery
requests and responses to such requests be served by hand or fax on the
party to whom such response or request is directed. Filing of requests
and responses with the Copyright Office is not required.
    Filing and service of all precontroversy motions, petitions,
objections, oppositions, and replies shall be as follows. In order to
be considered properly filed with the Librarian and/or Copyright
Office, all pleadings must be brought to the Copyright Office at the
following address no later than 5 p.m. of the filing deadline date:
Office of the Register of Copyrights, Room LM-403, James Madison
Memorial Building, 101 Independence Avenue, S.E., Washington, D.C.
20540. The form and content of all motions, petitions, objections,
oppositions, and replies filed with the Office 
must be in compliance
with Secs. 251.44 (b)-(e). As provided in Sec. 251.45(b), oppositions
to any motions or petitions must be filed with the Office no later than
seven business days from the date of filing of such motion or petition.
Replies are due five business days from the date of filing of such
oppositions. Service of all motions, petitions, objections,
oppositions, and replies must be made on counsel or the parties by
means no slower than overnight express mail on the same day the
pleading is filed.

C. Initiation of Arbitration

    Because there are two phases to a rate adjustment proceeding--
precontroversy discovery and arbitration--there are two time periods to
be scheduled. The regulations do not provide how much time must
separate precontroversy discovery from initiation of arbitration. There
is no reason to schedule an inordinate amount of time between the two;
however, there must be adequate time for the Librarian to rule upon all
motions filed within the 45-day precontroversy period. The Librarian is
also mindful that the arbitration phase must be concluded, and the
Librarian's review of the panel's decision must be completed, by
December 31, 1997. Consequently, the Library will initiate arbitration
on April 7, 1997. The schedule of the arbitration proceeding will be
established by the CARP after the three arbitrators have been selected.
Delivery of the written report of the arbitrators to the Librarian, in
accordance with 17 U.S.C. 802(e), must be no later than October 3,

    Dated: October 9, 1996.
Marybeth Peters,
Register of Copyrights.
James H. Billington,
The Librarian of Congress.
[FR Doc. 96-26754 Filed 10-17-96; 8:45 am]