[Federal Register: February 12, 2001 (Volume 66, Number 29)]


[Page 9881-9882]



Copyright Office

[Docket No. 2001-2 CARP DTNSRA]


New Subscription Services and the Digital Performance Right in 

Sound Recordings

AGENCY: Copyright Office, Library of Congress.

ACTION: Initiation of voluntary negotiation period.


SUMMARY: The Copyright Office is announcing the initiation of the six-

month voluntary negotiation period for determining reasonable rates and 

terms for the public performance of sound recordings by new 

subscription services. The Office is also requesting that parties 

participating in the negotiation process to so notify the Office.

EFFECTIVE DATE: The voluntary negotiation period begins on February 12, 

2001. Notification of participation in the negotiation period is due by 

March 1, 2001.

ADDRESSES: Copies of voluntary license agreements and petitions, if 

sent by mail, should be addressed to: Copyright Arbitration Royalty 

Panel (CARP), PO Box 70977, Southwest Station, Washington, DC 20024. If 

hand delivered, they should be brought to: Office of the General 

Counsel, James Madison Memorial Building, Room LM-403, First and 

Independence Avenue, SE., Washington, DC 20559-6000.

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

Tanya M. Sandros, Senior Attorney, Copyright Arbitration Royalty Panel, 

PO Box 70977, Southwest Station, Washington, DC 20024. Telephone: (202) 

707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: In 1995, Congress passed the Digital 

Performance Right in Sound Recording Act which gave copyright owners of 

sound recordings an exclusive right to perform publicly their 

copyrighted works by means of a digital audio transmission, subject to 

certain limitations and exemptions. 17 U.S.C. 106(6). Among the 

limitations placed on the performance of a sound recording was the 

creation of a statutory license for performances made by nonexempt, 

non-interactive digital subscription services. 17 U.S.C. 114. Initial 

rates and terms for transmissions made by these services have been set 

by order of the Librarian, following a Copyright Arbitration Royalty 

Panel (``CARP'') proceeding which had been convened for this purpose. 

See 63 FR 25394 (May 8, 1998).

    Section 114 was later amended with the passage of the Digital 

Millennium Copyright Act of 1998 (``DCA''), Public Law 105-304, to 

cover additional digital audio transmissions. These include ``eligible 

nonsubscription transmissions'' and those transmissions made by ``new 

subscription services'' and ``preexisting satellite digital audio radio 

services.'' Currently, the Library of Congress is conducting two 

separate rate adjustment proceedings which will set rates and terms for 

transmissions made by ``eligible nonsubscription services,'' see 63 FR 

65555 (November 27, 1998); 65 FR 2194 (January 13, 2000); and Order in 

Docket Nos. 99-6 CARP DTRA and 2000-3 CARP DTRA2 (December 4, 2000), 

and those transmissions made by ``pre-existing satellite digital audio 

radio services.'' 66 FR 1700 (January 9, 2001). The latter proceeding 

will also establish rates and terms for transmissions made during the 

period January 1, 2001, to December 31, 2002, by ``preexisting 

subscription services'' (the three subscription services in existence 

prior to the passage of the DMCA). Neither proceeding will consider 

rates and terms for transmissions made by ``new subscription 


    For purposes of the section 114 license, ``a `new subscription 

service' is a service that performs sound recordings by means of 

noninteractive subscription digital audio transmissions and that is not 

a preexisting subscription service or a preexisting satellite digital 

audio radio service.'' 17 U.S.C. 114(j)(8). To initiate a proceeding to 

establish rates and terms for those transmissions made by these 

services, either a copyright owner of sound recordings or a new 

subscription service must file a petition with the Library of Congress, 

requesting that the Copyright Office initiate the voluntary negotiation 

period for the purpose of setting these rates and terms. On January 24, 

2001, Music Choice filed such a petition with the Copyright Office 

pursuant to section 114(f)(2)(C)(i)(I).

    Section 114(f)(2)(C)(i)(I) requires the Library to publish a notice 

initiating the 6-month voluntary negotiation period no later than 30 

days after the date the petition is filed. Today's notice fulfills this 


Negotiation Period and Voluntary Agreements

    Pursuant to section 114(f)(2)(C)(i)(I), the Librarian of Congress 

is announcing a six-month negotiation period to give interested parties 

an opportunity to negotiate a voluntary agreement that will establish 

statutory rates and terms for the new subscription services. If the 

parties reach such an agreement and submit the proposal to the 

Librarian for approval, it will be published for public comment. 

Provided that no party with a significant interest and an intent to 

participate in an arbitration proceeding files a comment opposing the 

negotiated rates and terms, the Librarian may adopt the proposed rates 

and terms without convening a CARP. See 37 CFR 251.63(b).


    In the absence of a license agreement negotiated under 17 U.S.C. 

114(f)(2)(A), those copyright owners of sound recordings and entities 

availing themselves of the statutory licenses are subject to 

arbitration upon the filing of a petition by a party with a significant 

interest in establishing reasonable terms and rates for the statutory 

licenses. Petitions must be filed in accordance with 17 U.S.C. 

114(f)(2)(C)(ii)(I), and 803(a)(1) and may be filed anytime during the 

60-day period beginning on August 13, 2001. See also 37 CFR 251.61. 

Parties should submit petitions to the Copyright Office at the address 

listed in this notice. The petitioner must deliver an original and five 

copies to the Office.

Request for Notification

    In order to facilitate productive settlement discussions during the 

negotiation period and to facilitate complete settlement, it is useful 

to create a list of parties that wish to participate in the negotiation 

phase of the proceeding. The list should be in a centralized location 

and available to the public so that interested parties may identify 

each other and enter into the settlement discussions. Therefore, the 

Library is requesting that those parties wishing to participate in the 

six-month negotiation period file notification with the Copyright 

Office by March 1, 2001.

    The list is solely for informational purposes and notification is 

on a voluntary basis. In other words, parties that wish to participate 

in the negotiation period are not required to file notification with 

the Office, though we strongly encourage each party to make the filing, 

and will accept such filings at any time up until the end of the six-

month period. Furthermore, the notification to participate in the 

settlement discussion is not a Notice of Intent to Participate in a 

CARP proceeding, because as provided in 17 U.S.C. 114(f)(2)(B), the 

Library cannot begin a CARP proceeding until petitioned to do so after 

the end of the negotiation period. If the Library receives such a 

petition, it will call for

[[Page 9882]]

Notices of Intent to Participate at a later date.

    Dated: February 7, 2001.

David O. Carson,

General Counsel.

[FR Doc. 01-3516 Filed 2-9-01; 8:45 am]