[Federal Register: December 13, 1996 (Volume 61, Number 241)]
[Page 65603-65604]


[Docket No. 96-2 CARP-CRA]

Copyright Office: Termination of Proceeding To Adjust Cable 
Compulsory License Rates

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice.


SUMMARY: The Copyright Office is announcing the termination of the 
proceeding to adjust the cable copyright royalty rates. The Office 
takes this action following the withdrawal of all pending petitions 
seeking a rate adjustment of the cable copyright royalty rates and 
gross receipts limitations. As the period for filing petitions to 
request a rate adjustment is over, no party may file a new petition to 
initiate a cable rate adjustment proceeding until 2000.

EFFECTIVE DATE: November 8, 1996.

FOR FURTHER INFORMATION CONTACT: Marilyn J. Kretsinger, Acting General 
Counsel, or Tanya Sandros, Attorney Advisor, at Copyright Arbitration 
Royalty Panel, P.O. Box 70977, Southwest Station, Washington, D.C. 
20024. Telephone: (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION: Section 111 of the Copyright Act, 17 U.S.C., 
grants a compulsory copyright license to cable television systems for 
the retransmission of over-the-air broadcast stations to their 
subscribers. In exchange for the license, cable operators submit 
royalty payments, along with statements of account detailing their 
retransmissions, to the Copyright Office on a semiannual basis.
    A cable system calculates its royalty payments in accordance with 
the statutory formula described in 17 U.S.C. 111(d). The cable system 
then makes a payment based upon its gross receipts from subscribers for 
the retransmission of broadcast signals. Section 111(d) subdivides 
cable systems, based on the amount of their gross receipts, into three 
categories: small, medium, and large. Small systems pay a fixed amount 
without regard to the number of broadcast signals they retransmit, 
while medium-sized systems pay a royalty, within a specific range, 
based on the number of signals they retransmit. Large cable systems 
calculate their royalties according to the number of distant broadcast 
signals which they retransmit to their subscribers.<SUP>1 Under this 
formula, a large cable system is required to pay a specified percentage 
of its gross receipts for each distant signal that it retransmits.

    \1\ For cable systems which retransmit only local broadcast 
signals, there is still a minimum royalty fee which must be paid. 
This minimum royalty fee is not applied, however, once the cable 
system carries one or more distant signals.

    Congress established the gross receipts limitations that determine 
a cable system's size, and provided the gross receipts percentages 
(rates) for distant signals. 17 U.S.C. 111(d)(1). Congress also 
provided for adjustment of both the gross receipts limitations and the 
distant signal rates. 17 U.S.C. 801(b)(2). The limitations and rates 
can be adjusted to reflect national monetary inflation, changes in the 
average rates charged by cable systems for retransmission of broadcast 
signals, or changes in certain cable rules of the Federal 
Communications Commission in effect on April 15, 1976. 17 U.S.C. 
801(b)(2) (A), (B), (C), and (D). The current gross receipts 
limitations and rates are set forth in 37 C.F.R. 256.2.
    Section 803 of the Copyright Act, 17 U.S.C., provides that the 
gross receipts limitations and the rates of the cable compulsory 
license may be adjusted in 1995, and every subsequent fifth calendar 
year, upon filing a petition with the Library of Congress requesting an 
adjustment during these window years. If the Library determines that 
the petitioner has a ``significant interest'' in the royalty rate or 
rates in which adjustment is requested, the Library must convene a CARP 
to determine the adjustment. 17 U.S.C. 803(a)(1).
    On December 29, 1995, the Library of Congress received two 
petitions requesting an adjustment to the cable compulsory license 
royalty rates. The ``Copyright Owners'' <SUP>2 and the National Cable 
Television Association, Inc. each filed a petition seeking an 
adjustment to the cable copyright royalty rates.

    \2\ ``Copyright Owners'' is a collective term for Program 
Suppliers, Joint Sports Claimants, the National Association of 
Broadcasters, Music Claimants (the American Society of Composers, 
Authors, and Publishers, Broadcast Music, Inc., and SESAC. Inc.), 
Canadian Claimants, Devotional Claimants, the Public Broadcasting 
Service, and National Public Radio.

    In response to the petitions, the Librarian established the 
schedule for the cable rate adjustment proceeding. See Recommendation 
and Order in Docket No. 96-2 CARP-CRA (July 22, 1996). This order 
announced the 45-day precontroversy schedule which required the parties 
to the proceeding to submit their direct cases on November 8, 1996.
    On November 8, 1996, the parties to the petitions, however, filed a 
Joint Withdrawal of Petitions for Rate Adjustment. The withdrawal 
notice states that the parties ``having agreed that they will not seek 
any adjustments to the cable copyright royalty rates and gross receipts 
limitations in effect as of December 31, 1995, hereby withdraw all of 
the pending petitions for rate adjustments filed by and on their 
behalf.'' Withdrawal Notice at 1.
    The Librarian of Congress accepts the parties' withdrawal of their 
petitions to adjust the cable royalty rates, and as no other petitions 
seeking adjustment of the cable royalty rates were filed during the 
1995 window period, the Librarian announces the termination of the CARP

[[Page 65604]]

proceeding to make these adjustments, effective as of November 8, 1996, 
the filing date of the notice withdrawing both petitions for rate 

    Dated: November 22, 1996.
Marybeth Peters,
Register of Copyrights.

James H. Billington,
The Librarian of Congress.
[FR Doc. 96-31670 Filed 12-12-96; 8:45 am]