[Federal Register: March 11, 2004 (Volume 69, Number 48)]
[Rules and Regulations]
[Page 11515-11531]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11mr04-6]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 201 and 270
[Docket No. RM 2002-1E]
Notice and Recordkeeping for Use of Sound Recordings Under
Statutory License
AGENCY: Copyright Office, Library of Congress.
ACTION: Interim regulations.
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SUMMARY: The Copyright Office of the Library of Congress is announcing
interim regulations specifying notice and recordkeeping requirements
for use of sound recordings under two statutory licenses under the
Copyright Act. Electronic data format and delivery requirements for
records of use as well as regulations governing prior records of use
shall be announced in future Federal Register documents.
EFFECTIVE DATE: The interim notice and recordkeeping regulations shall
be effective beginning April 12, 2004. Updated notices of intent to use
the statutory licenses under sections 112 and 114 are due July 1, 2004.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel, or
William J. Roberts, Jr., Senior Attorney, Copyright Arbitration Royalty
Panel, P.O. Box 70977, Southwest Station, Washington, DC 20024-0977.
Telephone: (202) 707-8380. Telefax: (202) 252-3423.
SUPPLEMENTARY INFORMATION:
I. Overview
Digital audio services provide copyrighted sound recordings of
music for the listening enjoyment of the users of those services. In
order to provide these sound recordings, however, a digital audio
service must license the copyrights to each musical work, as well
[[Page 11516]]
as the sound recording of the musical work.\1\ With respect to the
copyright in the sound recording, the digital audio service may seek to
obtain a licensing agreement directly with the copyright owner, or, if
it is an eligible service,\2\ may choose to license the sound recording
through statutory licenses set forth in the Copyright Act, title 17 of
the United States Code. There are two such licenses that enable an
eligible digital audio service to transmit performances of copyrighted
sound recordings to its listeners: section 114 and section 112 of the
Copyright Act. Section 114 permits an eligible digital audio service to
perform copyrighted sound recordings publicly by means of digital audio
transmissions to its listeners, provided that the terms and conditions
set forth in section 114 are met including the payment of a royalty
fee. Section 112 permits an eligible digital audio service to make the
digital copies of a sound recording that are necessary to transmit a
performance of a sound recording to listeners,\3\ provided again that
the terms and conditions set forth in section 112 are met including the
payment of a royalty fee.
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\1\ Recorded music typically involves two separate copyrights.
There is a copyright for the song itself--the music and the lyrics,
if any--and there is a separate copyright for the sound recording of
that music. The copyright to the musical work often belongs to the
songwriter and/or his or her music publisher, and the copyright to
the sound recording is generally owned by a record company that
released the recording.
\2\ These services are defined as preexisting subscription
services, preexisting satellite digital audio radio services,
business establishment services, nonsubscription services and new
subscription services. These services are further discussed, infra.
\3\ These copies are referred to as ``ephemeral copies,''
although they sometimes exist for a period of time that is far from
the ordinary meaning of ``ephemeral.''
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The royalty fees collected under the two statutory licenses are
paid to a central source known as a Receiving Agent.\4\ See 37 CFR
261.2. Before the Receiving Agent, or any other agent designated to
receive royalties from the Receiving Agent, can make a royalty payment
to an individual copyright owner, they must know how many times the
eligible digital audio service made use of the sound recording and how
many listeners received it. To obtain this information, both section
112 and section 114 direct the Librarian of Congress to prescribe
regulations that identify the use of copyrighted sound recordings (the
``recordkeeping'' provisions), as well as provide copyright owners with
notice that a particular eligible digital audio service is making use
of the section 112 and/or 114 license (the ``notice'' provisions). See
17 U.S.C. 112(e)(4) and 114(f)(4)(A). Today's interim regulations are
the first step in complying with these requirements.
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\4\ Currently, the Receiving Agent is SoundExchange, Inc. See 37
CFR 261.4(c).
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As discussed more fully infra, today's interim regulations set
forth the requirements for an eligible digital audio service to file
notification that it is using one or both of the statutory licenses, as
well as the types and details of information that an eligible digital
audio service must maintain in creating a record of use for each
copyrighted sound recording it provides its listeners. There are two
remaining issues. First, today's interim regulations only apply to the
use of sound recordings from the effective date of the interim
regulations and prospectively. There remains the issue of what types of
information must be reported for uses of sound recordings prior to the
effective date of this regulation and back to October 28, 1998. Second,
there remains the issue of the character of the format in which records
of use must be maintained, and what are the acceptable means of
delivering the information contained in records of use to copyright
owners of sound recordings.
II. Background
On February 7, 2002, the Copyright Office of the Library of
Congress issued a Notice of Proposed Rulemaking (``NPRM'') on the
requirements for giving copyright owners reasonable notice of the use
of their sound recordings under the section 114 and 112 statutory
licenses and for how records of such use shall be kept and made
available to copyright owners. 67 FR 5761 (February 7, 2002). The
proposed regulations set forth in the NPRM were taken, with some
modifications, from the notice and recordkeeping regulations the Office
had previously adopted for eligible preexisting subscription services
making use of the section 114(f)(1)(A) statutory license. See 63 FR
34289 (June 24, 1998); 37 CFR 201.35-201.37.\5\ The Office stated that
although the existing regulations only applied to preexisting
subscription services, it was the desire of the Office to adopt a
single set of notice and recordkeeping regulations that would apply to
any service claiming use of any of the statutory licenses set forth in
section 114, as well as the section 112 statutory license for ephemeral
recordings. 67 FR at 5762.
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\5\ These interim regulations place all notice and recordkeeping
regulations pertaining to the statutory licenses under sections 112
and 114 into a new part 270. Accordingly, the notice and
recordkeeping regulations currently located in Sec. Sec. 201.35-
201.37 have been moved to part 270.
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With respect to the notice provisions proposed in the NPRM,
copyright owners and users voiced little disagreement. The details of
the notice requirements being adopted by the Library are discussed
below. With respect to what records of use of sound recordings should
be kept, how they should be kept and in what manner they should be
delivered to copyright owners, there was virtually no agreement between
copyright owners and users. On May 10, 2002, the Office held a public
meeting to facilitate discussion as to the required records of use, the
frequency of the recordkeeping, and the manner and format for delivery
to copyright owners. Persons representing copyright owners, users, and
performers appeared and offered their opinions and criticisms of the
NPRM and offered suggestions as to the amount of information necessary
to distribute royalties collected under the section 112 and 114
licenses. The May 10 meeting revealed persistent differences as to the
scope of the regulations, as well as the details for creating and
delivering databases of records of use.
Subsequent to the May 10 meeting, the Office posted a notice on its
website announcing the impending release of these interim regulations
and describing in general the categories of information that will be
required to be reported for performances of sound recordings governed
by the section 112 and 114 licenses. These transitional requirements
were memorialized in a September 23, 2002, Federal Register document.
See 67 FR 59573 (September 23, 2002).
The need for announcing these transitional requirements was made
evident during the course of discussions at the May 10 roundtable
meeting. Although services making use of the statutory licenses in
section 114 (other than the preexisting subscription service license)
and section 112 have been doing so since the passage of the Digital
Millennium Copyright Act in 1998, it became clear that many have not
kept any records of the sound recordings which they have performed or
the ephemeral copies they have made. This is unacceptable. The law
requires a reporting of use of sound recordings sufficient to permit
payment of royalties, and each day that passes results in the loss of
records of performances that may never be accurately identified and
reported. Furthermore, eligible nonsubscription digital transmission
services have been required to make royalty payments
[[Page 11517]]
under the section 112 and 114 licenses for eligible nonsubscription
digital transmission services since October 20, 2002, meaning that a
considerable amount of royalties (over five years' worth) should now be
ready for distribution. Royalties cannot be allocated to owners,
artists and performers until meaningful information regarding the
instances of performances of specific sound recordings of musical works
is provided by the services making use of the works. Publication of
these interim regulations \6\ will preserve the identification and
reporting of as many performances under the section 112 and 114
licenses as possible.\7\
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\6\ As discussed below, these interim regulations make some
modifications to the requirements announced in the September 23,
2002, Federal Register document.
\7\ The Office has also had discussions with copyright owners
and users regarding the format in which records of use should be
preserved, including a public meeting on October 8, 2002. See 67 FR
59547 (September 23, 2002). These discussions further underscored
the difficulty of prescribing detailed electronic format and
delivery requirements and have prevented including them in today's
interim regulations. These requirements will be announced in a
future Federal Register document.
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III. Prior Records of Use
The interim regulations announced today apply on a prospective
basis, meaning that they apply to uses of sound recordings under the
section 112 and 114 licenses occurring on and after the effective date
announced above. There remains, however, the question of what records
of use must be reported for uses of sound recordings from October 28,
1998, until the present. It was apparent from the discussions of the
May 10, 2002, roundtable and subsequent filings that many services have
maintained few or, in many instances, no records of prior uses.
Incomplete and nonexistent records create serious difficulties for the
fashioning of regulations that apply to prior uses of sound recordings.
The Copyright Office has sought comment on the matter of prior records,
see 68 FR 58054 (October 8, 2003), and will publish regulations in the
future. In the meantime, both copyright owners of sound recordings and
users of the section 112 and 114 licenses are strongly encouraged to
resolve the matter in a way that will permit SoundExchange to
distribute royalties for uses of sound recordings that took place prior
to the effective date of these regulations. The Office would be pleased
to consider any negotiated resolution as it determines the terms of the
regulations to govern reporting on past uses of sound recordings.
IV. Format Requirements
Due to the highly technical nature of delivery of data in an
electronic format and the widespread disagreement among SoundExchange
and the users of the statutory licenses over formatting, the Copyright
Office is unable to adopt data format and delivery regulations at this
time. However, we will be publishing soon a Notice of Proposed
Rulemaking in the Federal Register proposing electronic data format and
delivery rules and will be seeking public comment. In the meantime, we
strongly urge SoundExchange and services that will be making reports of
use to negotiate acceptable means of data formatting and delivery. The
negotiation process is better suited to targeting and resolving
technical difficulties than an agency rulemaking process. Also, the
more agreements that are reached, the greater the body of industry
experience and practice that the Office can draw from in shaping final
regulations.
V. The Small Webcaster Settlement Act of 2002
On December 4, 2002, the President signed into law the Small
Webcaster Settlement Act of 2002, Public Law 107-321, 116 Stat. 2780,
which permitted SoundExchange to enter into agreements on behalf of all
copyright owners and performers to set rates, terms, and conditions for
noncommercial and small commercial webcasters operating under the
section 112 and 114 statutory licenses. The Act directs the Copyright
Office to publish such agreements in the Federal Register and specifies
that they may not be taken into account by the Office in formulating
notice and recordkeeping provisions under the statutory licenses.
On December 24, 2002, the Copyright Office published the agreement
for small commercial webcasters. 67 FR 78510 (December 24, 2002). That
agreement specifies the types of data that must be reported by small
commercial webcasters for the years 2003 and 2004. The agreement
further provides, however, that
[f]or calendar years 2003 and 2004, details of the means by which
copyright owners may receive notice of the use of their sound
recordings, and details of the requirements under which reports of
use concerning the matters identified in Section 6(a) \8\ shall be
made available, shall be as provided in regulations issued by the
Librarian of Congress under 17 U.S.C. 114(f)(4)(A).
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\8\ Section 6(a) of the agreement contains the details of the
records of use that must be kept.
Id. at 78512. Consequently, entities which are signatories to the
agreement published on December 24, 2002, while not bound by the
records of use provisions of these interim regulations, are bound by
the interim notice regulations adopted herein.
On June 11, 2003, the Office published the agreement for
noncommercial webcasters. 68 FR 35008 (June 11, 2003). That agreement
provides that for 2003 and 2004, noncommercial webcasters are not
required to provide any reports of use of sound recordings ``even if
the Librarian of Congress issues regulations otherwise requiring such
reports by Noncommercial Webcasters.'' Id. at 35011. Consequently,
those entities that are signatories to the agreement published on June
11 are not bound by the records of use regulations announced in this
notice for the years 2003-2004. These entities are still bound,
however, by the notice provisions adopted today.
VI. Parties Affected
The Copyright Office announced in the NPRM that it intended to
adopt a single set of notice and recordkeeping regulations for all four
categories of services: Preexisting subscription services, preexisting
satellite digital audio radio services, nonsubscription services, and
new subscription services. 67 FR 5761, 5762 (February 7, 2002). The
Office has been requested, however, to exclude preexisting subscription
services and preexisting satellite digital audio radio services from
this proceeding.
With respect to preexisting subscription services, the Recording
Industry Association of America (``RIAA'') recommended in its petition
that opened this rulemaking that preexisting subscription services be
allowed to continue to operate under the rules set forth in former 37
CFR 201.36. RIAA petition at 1-2. Support for the proposal was echoed
by the preexisting subscription services. Comments of Music Choice at 6
(submitted April 5, 2002); Comments of Music Choice at 1-2 (submitted
September 30, 2002). Because copyright owners and preexisting
subscription services appear content to operate under the existing
recordkeeping provisions contained in former Sec. 201.36 at this
time,\9\ the recordkeeping interim
[[Page 11518]]
regulations announced today will not apply to preexisting subscription
services. Likewise, the notice provisions of Sec. 270.1 (former Sec.
201.35) announced today do not apply to preexisting subscription
services.
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\9\ On March 14, 2003, the Copyright Office received a joint
petition from copyright owners and performers and preexisting
subscription services to conduct an expedited rulemaking to modify
the provisions of former Sec. 201.36. The sought-after
modifications, negotiated during the statutorily prescribed
negotiation period for adjustment of rates and terms, would
supercede the existing recordkeeping provisions in former Sec.
201.36. The petition will be addressed in a separate Federal
Register document.
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On April 11, 2003, the Office received a petition from
SoundExchange, XM Satellite Radio, Inc., Sirius Satellite Radio Inc.,
the American Federation of Radio and Television Artists, and the
American Federation of Musicians stating that these entities had
reached an agreement regarding notice and recordkeeping requirements
for the period through December 31, 2006, and requesting that the
Office defer adopting notice and recordkeeping regulations for
preexisting satellite digital audio radio services at this time. The
Office responded by letter dated May 8, 2003, denying the petition
because ``it is the Library's responsibility, and the Library's
responsibility alone, to promulgate rules establishing notice and
record-keeping requirements.'' Copyright Office letter at 1 (May 8,
2003). We concluded that it is ``our duty to include provisions
governing preexisting satellite digital audio radio services in the
section 114 and section 112 notice and recordkeeping regulations that
we are preparing for publication.'' Id. at 2. Although the parties to
the agreement relating to preexisting satellite digital audio radio
services could have requested that the Office adopt the notice and
recordkeeping requirements they had negotiated, they did not do so.
Indeed, the Office has no knowledge of the details of those negotiated
requirements. Consequently, the interim regulations announced today
apply to preexisting satellite digital audio radio services, as well as
nonsubscription services, business establishment services and new
subscription services. Presumably, however, no copyright owner who is a
party to the negotiated agreement would be in a position to complain of
the failure, by a service that is also a party to the agreement, to
comply with the regulations announced today.
VII. Scope of the Reporting Requirements
In announcing today's required records of use on a prospective
basis, it must be emphasized that they represent the minimum
requirements. The Office recognizes that adopting detailed,
comprehensive reporting requirements at this time could place a
considerable burden on those services which have not yet developed
methods for maintaining records of sound recording use. The prudent
course therefore is to set forth minimum requirements for records that
must be maintained, as well as the frequency with which they must be
kept. It is highly likely that additional requirements will be set
forth after the Office has determined the effectiveness of these
interim rules.
VIII. The Proposals of the Commenters
A. Proposal of the Recording Industry Association of America
The Recording Industry Association of America (``RIAA'') \10\
recommended that the Copyright Office require that services report to
SoundExchange a comprehensive amount of data which it asserted was
necessary for proper distribution of royalties under the section 112
and 114 statutory licenses. These requirements were set forth in the
NPRM and are discussed there. See 67 FR 5761 (February 7, 2002).
Subsequent to the NPRM, and due at least in part to concerns expressed
by users of the statutory licenses regarding the privacy of user
information in a listener log, RIAA revised its proposal and dropped
its request that the requirements include a separate play list and
listener log. Comments of RIAA at 33 (submitted April 5, 2002). RIAA
submits that all the data elements it has requested for records of use
are essential to the accurate and prompt identification of the
ownership of each sound recording performed and to the efficient
distribution of royalties. The more data that services using the
statutory licenses submit, the more ``pieces to the puzzle'' there are
for a correct royalty distribution. Id. at 39.
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\10\ RIAA's comments also include the views of SoundExchange
which, at the time of submission of the initial comments, was an
unincorporated division of RIAA. Comments of RIAA at 1 (submitted
April 5, 2002).
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RIAA's proposed records of use are divided into three principal
parts: (1) Information identifying the licensee as well as the type of
service and programming offered by the licensee; (2) information
regarding the digital audio transmissions of sound recordings; and (3)
information regarding the specific sound recordings transmitted to the
public.
1. Data Identifying Service, Type of Service and Programming
Offered. RIAA proposes adoption of six different data fields for this
category: (1) Service Name; (2) Transmission Category; (3) Channel or
Program Name; (4) Type of Program; (5) Influence Indicator; and (6)
Genre.
a. Service Name. The Service Name identifies the service reporting
the use of a particular sound recording.
b. Transmission Category. The Transmission Category identifies the
royalty structure for sections 112 and 114 that a service uses to
calculate its royalty obligation. Because there are essentially many
licenses within section 112 and section 114 (e.g., a section 114
license for preexisting subscription services with one royalty rate, a
section 114 license for nonsubscription services with different royalty
rates), the Transmission Category is necessary to determine the royalty
fee that is being paid for the particular use of a sound recording.
RIAA offers ten category codes that identify each type of service using
the section 112 and 114 licenses. Id. at 48-49.
c. Channel or Program Name. RIAA asserts that the Channel or
Program Name is necessary to verify compliance with the sound recording
performance complement set forth in 17 U.S.C. 114(j)(13). Id. at 49.
SoundExchange also requests identification of the Channel or Program
Name, but for purposes of royalty distribution. SoundExchange
acknowledges that certain services lack the capacity to identify the
number of performances (i.e., the number of listeners) of a particular
sound recording and recommends that those services report the number of
Aggregate Tuning Hours (``ATH'') to a particular channel. However, in
order for ATH to provide SoundExchange with meaningful distribution
data, the service must report the Channel or Program Name to avoid
under-valuing or over-valuing specific sound recordings. For example,
if a service has two channels of programming that perform two different
genres of music (one that has many listeners and one that does not),
yet reports the same ATH for the two channels, the sound recordings on
both channels will be valued equally even though the one channel
received more listenership. However, if separate ATH are reported for
each channel, the higher ATH for the more popular channel will be
reflected and the sound recordings on that channel will receive a more
accurate royalty distribution. Comments of SoundExchange at 17 n.6
(submitted September 30, 2002); Letter from SoundExchange to Copyright
Office explaining footnote 6 (submitted October 28, 2002).
RIAA asserts that the Channel Name for an AM or FM radio station
should be the Federal Communications Commission (``FCC'') facility
identification number of the broadcast
[[Page 11519]]
station that is transmitted and the frequency band designation (ex.
WABC-AM). The Channel Name for all other transmissions should be the
service's name for such channel (ex. ``American Top 40,'' ``80's
Rock'') ``provided that if a program is generated as a random list of
sound recordings from a predetermined list, the channel or program must
be a unique identifier differentiating each user's randomized playlist
from all other users' randomized playlists.'' Comments of RIAA at 49-50
(submitted April 5, 2002) quoting the NPRM, 67 FR at 5766.
d. Type of Program. Identification of the Program Type ``is needed
to ensure compliance with certain statutory provisions that establish
duration requirements for particular programming.'' Id. at 50. RIAA
proposes four categories for Type of Program: archived programs, looped
programs, prescheduled programs and a category for all other programs.
Id.
e. Influence Indicator. RIAA asserts that:
The Influence Indicator field is needed because certain services
provide the user with an ability to skip forward through a play list
at the user's sole discretion. Although RIAA believes that the use
of a ``skip'' feature may render certain services interactive and,
therefore, ineligible for the statutory license, a limited skip
feature may eventually be determined to be eligible for the
statutory license. If such services are determined to be eligible
for the statutory license subject to certain conditions, then
copyright owners will need to know which services offer a skip
feature and whether those required conditions are satisfied.
Id. at 51. RIAA proposes two categories for the Influence Indicator:
non-user influenced and user influenced.
f. Genre. The Genre field provides assistance in distinguishing
among sound recording copyright owners with the same name that own
different repertoire. The Genre field would apply to the designation
that a service gives to a particular channel (ex. Rock, Classical) not
to a particular sound recording. Id. at 51-52.
2. Data Regarding the Transmissions of Sound Recordings. RIAA
proposes two categories of information regarding the transmissions of
sound recordings: (1) Start Date and Time of the Sound Recording's
Transmission; and (2) Total Number of Performances.
a. Start Date and Time of the Sound Recording's Transmission. RIAA
asserts that this information is necessary to assure that services are
complying with the sound recording performance complement. It also
asserts that the information is necessary because members of
SoundExchange may ``decide to weight performances based upon the time
of day that the transmission is made, with performances during the day
being weighted more heavily than overnight performances.'' Id. at 52.
b. Total Number of Performances. RIAA asserts that Total Number of
Performances is critical to distributing royalties collected under the
section 114 license. Since the royalties paid by services under the
license are on a per performance basis, see 67 FR 45240, 45272 (July 8,
2002), the services already have this information; and it is essential
to the distribution mechanism mandated by the Librarian for non-
SoundExchange members. See 37 CFR 261.4.
3. Data for Identifying Each Sound Recording. RIAA proposes ten
categories of information for the identification of each sound
recording: (1) Artist Name; (2) Sound Recording Title; (3) Album Title;
(4) International Standard Recording Code (``ISRC''); (5) Track Label
(P) Line; (6) Duration of Sound Recording; (7) Marketing Label; (8)
Catalog Number; (9) Universal Product Code; and (10) Release Year.
a. Artist Name and b. Sound Recording Title
RIAA asserts that these two elements are the most basic information
necessary to identify a sound recording and must be reported in all
instances. Comments of RIAA at 55 (submitted April 5, 2002).
c. Album Title. RIAA asserts that Album Title is necessary to
assist in differentiating a song by a particular artist that appears on
more than one record album where the copyright owners of the album are
different. For example, the Alice Cooper sound recording ``I'm 18''
appears on both the ``Classicks'' and ``Love it to Death'' record
albums. Epic Records is the owner of the ``Classicks'' album, while
Warner Bros. is the owner of the ``Love it to Death'' album. If the
Designated Agents distributing royalties do not know from which album
the service performed ``I'm 18,'' they cannot properly distribute
royalties. Reply comments of RIAA at 57-58 (submitted April 26, 2002).
d. International Standard Recording Code (``ISRC''). The
International Standard Recording Code (``ISRC'') is a unique code that
is embedded in many sound recordings released in recent years and is
capable of being read with the proper computer software. Because ISRC
is unique to each sound recording that possesses it, it is extremely
useful in specifically identifying a particular sound recording.
Comments of RIAA at 56-57.
e. Track Label (P) Line. The Track Label (P) Line is the copyright
owner information for an individual sound recording. According to RIAA,
a Track Label (P) Line can be found on the backside of the label
packaging after the (P) Line symbol. If the album is a compilation, the
Track Label (P) Line information can be found inside the label package
insert following the listing of each sound recording. Id. at 57. The
copyright owner listed in the Track Label (P) Line is generally the
entity entitled to royalties for the public performance of the sound
recording, but is not the complete information necessary to distribute
royalties under the section 112 and 114 licenses. Id.; Reply comments
of RIAA at 63-64.
f. Duration of Sound Recording. Duration of the Sound Recording is
the total recorded time of that sound recording as identified on the
label packaging for that version of the musical work, regardless of the
time that it takes the service to transmit the sound recording. RIAA
asserts that this information is necessary to help distinguish among
remixes of the same sound recording by the same artist. Comments of
RIAA at 57-58 (submitted April 5, 2002).
g. Marketing Label. The Marketing Label is the name of the company
that markets the album on which a particular sound recording may be
found. RIAA states that often, but not always, the company name on the
Track Label (P) Line will be the same as the Marketing Label; hence
both data fields must be provided. Id. at 58.
h. Catalog Number. The Catalog Number is the unique number assigned
by a particular record label to an album, as opposed to the particular
sound recording on the album, for purposes of ordering and inventory
management. RIAA asserts that services should provide this information
because it is required in the Copyright Office regulations for
preexisting subscription services. See 63 FR 34289, 34297 (June 24,
1998).
i. Universal Product Code (``UPC''). The Universal Product Code
(``UPC'') is a 12-digit numeric identification code that is placed on
products intended for retail sale and is read by automated scanning
devices (i.e. the ``bar code'' number). Unlike an ISRC, which is unique
to a sound recording, a UPC is unique to a particular product (i.e. CD,
cassette, LP). RIAA asserts that the UPC is necessary to assist in
correctly identifying the origin of a sound recording. Comments of RIAA
at 58-59 (submitted April 5, 2002).
j. Release Year. The Release Year is the year the album was first
released
[[Page 11520]]
commercially for public distribution as identified on the backside of
the label packaging after the (P) Line symbol. Again, RIAA asserts that
Release Year is necessary to correctly identify the origin of a sound
recording. Id. at 59.
B. Proposal of the American Federation of Musicians and the American
Federation of Televison and Radio Artists
The American Federation of Musicians (``AFM'') and the American
Federation of Television and Radio Artists (``AFTRA'') endorse the
proposal of RIAA for records of use data
because those rules appear to require records of use that are
adequate to fulfill the important Congressional objective of
compensating each featured recording artist for use of his or her
unique sound recordings, and * * * will further assist in fulfilling
the equally important Congressional purpose of also compensating
non-featured recording artists who have performed on sound
recordings used by the services.
Joint comments of AFM/AFTRA at 2 (submitted April 5, 2002). However,
AFM/AFTRA urge that the Copyright Office require an additional data
field that requires services to enter the names of all non-featured
singers and musicians on each sound recording when the services are in
possession of that information. They assert that this information is
essential to distribute the modest amount of royalties allocated to
non-featured singers and musicians under the section 114 license. If
the burden to obtain this information is placed upon the administrator
of these royalties, the costs associated with obtaining it will exceed
the royalties. Id. at 16-20.
C. The Services' Proposals
Not surprisingly, the services using the section 112 and 114
statutory licenses vehemently object to the amount and character of
information sought by RIAA and SoundExchange. Some assert that much of
the information sought is not generally available and that the cost of
providing it will drive certain services out of business. There is no
unanimity among the services as to what information can be provided,
although they certainly all prefer to provide less rather than more.
1. Proposals of Broadcasters. Bonneville International Corporation,
Clear Channel Communications, Cox Radio, Inc., National Association of
Broadcasters, Susquehanna Radio Corporation, National Religious
Broadcasters Music License Committee and Salem Communications
Corporation (collectively ``Radio Broadcasters'') argue that RIAA and
SoundExchange have the burden of proving why each element of requested
data is necessary for the collection and distribution of royalties, a
burden which they assert that RIAA and SoundExchange have failed to
meet. Comments of Radio Broadcasters at 2 (submitted April 5, 2002).
They also submit that the Copyright Office should only require
information necessary to identify a sound recording for purposes of
royalty distribution and should not require information that enables
RIAA to monitor the sound recording complement requirements of section
114. Id. at 17-21. Smaller broadcasters charge that RIAA and
SoundExchange are seeking data that they know smaller broadcasters
cannot possibly supply. Comments of Collegiate Broadcasters at 2-3
(submitted April 5, 2002); Comments of National Federation of Community
Broadcasters at 3 (submitted April 5, 2002); Comments of Harvard Radio
Broadcasting Company at 8 (submitted April 5, 2002).
Indeed, smaller broadcasters--in particular noncommercial
broadcasters--request that the Copyright Office exempt them from any
record of use reporting requirements. Comments of College Broadcasters
at 1-2 (submitted April 5, 2002); Comments of Collegiate Broadcasters
at 3-4 (submitted April 5, 2002); Comments of Harvard Radio
Broadcasting Company at 2 (submitted April 5, 2002); Comments of
Intercollegiate Broadcasting System at 1 (submitted April 5, 2002);
Comments of Mayflower Hill Broadcasting Company at 2 (submitted April
5, 2002); Comments of National Federation of Community Broadcasters at
3 (submitted April 5, 2002); Comments of WOBC at 2 (submitted April 5,
2002); Comments of Adventist Radio Broadcasters Association at 4
(submitted April 5, 2002). These commenters note that they possess
neither the manpower nor the financial resources to assemble and enter
the data requested by RIAA. Many of these stations depend upon
volunteer help that cannot be required to undertake the task of
preparing such detailed reports of use. Their general recommendation is
that radio stations with ten or fewer paid employees be fully exempted
from reporting records of use. See, e.g. Comments of National
Federation of Community Broadcasters at 5 (submitted April 5, 2002);
Reply Comments of Radio Broadcasters at 35 (submitted April 26, 2002);
Comments of College Broadcasters at 22 (submitted April 5, 2002).
Radio Broadcasters submit that only five data fields should be
required for records of use: (1) Name of the service; (2) sound
recording title; (3) name of artist; (4) call sign of the station or
channel; and (5) date of transmission. Comments of Radio Broadcasters
at 41 (submitted April 5, 2002). They contend that while this
information may not enable SoundExchange to identify every entity
entitled to a distribution royalty every time, such perfection is not
required because the law requires only ``reasonable'' notification of
use. Id. Radio Broadcasters, as well as other services, contend that
they cannot supply the additional fields of data requested by RIAA
because, in many instances, they are not supplied with the information
from the record label. This is particularly the case with new releases
where the service receives a promotional sound recording which has yet
to be placed on an album, receive an ISRC, UPC, catalog number, Track
Label (P) Line, etc. Even if this information is received at a later
date or can be later determined, it is unreasonably burdensome to
require services to seek it out and report it. Comments of Radio
Broadcasters at 44-54 (submitted April 5, 2002); Comments of
beethoven.com at passim (submitted April 5, 2002).
Radio Broadcasters also indicate that there are special reporting
difficulties associated with musical programming obtained from third-
party syndicators. These syndicators provide little if any information
regarding the sound recordings that they perform. Requiring the
broadcaster of this programming to track down the information would be
unduly burdensome. Comments of Radio Broadcasters at 31-33 (submitted
April 5, 2002). A similar problem also exists for programming which is
broadcast live or in a ``free flow'' fashion. Comments of Harvard Radio
Broadcasting Company at 7 (submitted April 5, 2002).
2. Proposals of Non-broadcaster Services. Non-broadcaster services
(i.e., webcasters) are generally prepared to provide more data than
broadcasters although certainly well short of RIAA's requests. For
example, David Landis, founder of Ultimate 80's, states that he has
``spoken with many of my fellow webcasters'' and can provide the
following data: (1) The name of the service; (2) the channel of the
program; (3) the type of the program (archived, looped or live); (4)
the date of the transmission; (5) the time of the transmission; (6) the
time zone of the origination of the transmission; (7) the duration of
the transmission (to the nearest second); (8) the sound recording
title; (9) the featured recording artist; and (10) the musical genre of
the channel or program (i.e. the station format). Comments of Ultimate
80's at 4 (submitted April 5, 2002).
[[Page 11521]]
Beethoven.com proposes the same requirements, with the exception of
providing data on the duration of the transmission of a sound
recording. Comments of Beethoven.com at 5 (submitted April 5, 2002).
Websound, Inc. recommends an even more extensive list of
requirements. It states that it can supply: (1) The name of the
service; (2) the channel or program, or in the case of transmission of
an AM or FM signal, the station identifier including the band
designation and the FCC facility identification number; (3) the type of
program (archived, looped or live); (4) the date of transmission
(except for archived programs); (5) the time of transmission (except
for archived programs); (6) the time zone from which the transmission
originated; (7) for archived programs, the numeric designation of the
pace of the sound recording within the order of the program; (8) the
duration of the transmission (to the nearest second); (9) the sound
recording title; (10) the ISRC, where available; (11) the release year
identified in the copyright notice on the album and, in the case of
compilation albums created for commercial purposes, the release year
identified in the copyright notice for the individual track; (12) the
featured recording artist; (13) the album title or, in the case of
compilation albums created for commercial purposes, the name of the
retail album identified by the service for purchase of the sound
recording; (14) the marketing label; (15) the UPC; (16) the catalog
number; (17) the Track Label (P) Line; (18) the musical genre of the
channel or program, or in the case of the transmission of an AM or FM
station, the broadcast station format. Comments of Websound, Inc. at 1-
2 (submitted April 5, 2002).
Yahoo, Inc. submits that the Copyright Office should adopt only
minimal reporting requirements for webcasting and broadcast
retransmissions that would include the call letters of the AM or FM
station, the format of the station or program (music or talk), the
genre of the station or program and the cumulative number of listening
hours to each station during the reporting period. Reply comments of
Yahoo at 4, 10 (submitted April 26, 2002).
The Digital Media Association (``DiMA'') argues that much of the
information sought by RIAA and SoundExchange is redundant and should
not be required. It suggests that services should be able to choose the
data fields that they supply provided that the information is
sufficient to identify the sound recording used. For example, DiMA
asserts that any one of the following groups of information is, by
itself, sufficient to identify a sound recording:
(1) Sound recording title, featured recording artist, group, or
orchestra, the retail album title, and the Track Label (P) Line;
(2) Sound recording title, UPC and the Track Label (P) Line;
(3) ISRC and the Track Label (P) Line.
Comments of DiMA at 4 (submitted April 5, 2002).
Like Radio Broadcasters, DiMA argues that information sought by
RIAA to monitor the sound recording complement of section 114 should be
outside the scope of records of use requirements. Id. at 5; see, also
Reply comments of Yahoo, Inc. at 2 (submitted April 26, 2002). And with
regards to reporting requirements for programming provided by third
parties, DiMA submits that existing third-party contracts should be
grandfathered from reporting. Id. at 7.
IX. Required Records of Use
A. Consideration of the Comments
Deciding which data fields should be required for a record of use
under the section 114 license presents a difficult challenge for the
Copyright Office. There are many interests which must be considered and
balanced. On the one hand, there must be sufficient information
reported so as to accurately identify the sound recordings performed.
This is necessary so that royalties may be paid to the proper parties
and to avoid not compensating a large number of performances simply
because there was insufficient information. On the other hand, the
burdens associated with reporting information cannot be so high as to
be unreasonable or to create a situation where many services cannot
comply.
It has been asserted by some services throughout this docket that
for some services any reporting of information regarding performances
will be too great a burden. While this assertion, if true, might result
in certain services ceasing operation under the statutory licenses, it
is not a valid reason to eliminate reporting altogether. The law states
that the Librarian of Congress must adopt regulations under the section
114 license to provide copyright owners of sound recordings with
``reasonable notice'' of the use of their sound recordings. 17 U.S.C.
114(f)(4)(A).\11\ No provision is made for not adopting regulations in
certain circumstances, or for exempting certain services from any
reporting information. As discussed above, certain services--in
particular noncommercial broadcasters--seek a complete exemption from
reporting any data. Others are willing to report data for the sound
recordings they perform themselves, but seek an exemption for sound
recordings they receive from third-party syndicators. We find no
authority in the statute to create such exemptions, nor do we find such
exemptions as constituting ``reasonable notice'' of the performance of
sound recordings.\12\ In order to avail oneself of the statutory
licenses, one must report some information. The question is how
extensive that information should be.
---------------------------------------------------------------------------
\11\ A similar provision exists for use of the section 112
license. See 17 U.S.C. 112(e)(4).
\12\ One could argue that reporting the use of sound recordings
is not ``reasonable'' if a service cannot under any circumstances
provide information about the sound recordings. Even if the Office
were persuaded that some services cannot report any data--which we
are not--the argument would be unpersuasive. Transmitting a sound
recording to the public is not something that accidentally or
unknowingly happens. It takes a significant amount of decision
making and action to select and compile sound recordings, and a
significant amount of technical expertise to make the transmissions.
It is not unreasonable to require those engaged in such a
sophisticated activity to collect and report a limited amount of
data regarding others' property which they are using for their
benefit. While making and reporting a record of use is undoubtedly
an additional cost of transmitting sound recordings to the public,
it is not an unreasonable one.
---------------------------------------------------------------------------
In principle, one might imagine that recordkeeping for many
webcasters could be a simple matter. Webcasting necessarily requires
use of computers for storage and transmission of the performances of
sound recordings. Thus, webcasters might be expected to have the
requisite resources and sophistication to maintain and transmit
detailed reports identifying each and every sound recording they
transmit, as well as the number of performances transmitted.
If webcasters have the sophistication and equipment to facilitate
the recordation and reporting of information, the webcasting statutory
license could offer an opportunity to ensure that each copyright owner
of each sound recording performed by webcasters will be compensated for
exactly his or her share of the royalties generated by the statutory
license. Because SoundExchange could, in theory, obtain perfect
information about the number of performances of each sound recording,
it could divide the total royalty pool by the total number of
performances of all sound recordings, and then allocate to each sound
recording the corresponding share based on the number of times it is
performed.
However, many webcasters assert that the burden of keeping
comprehensive
[[Page 11522]]
records would drive them out of business. See, e.g., Reply Comments of
a United Group of Webcasters at 3; Comments of Mayflower Hill
Broadcasting Corp. at 1-2; Comments of Collegiate Broadcasters, Inc. at
2-3; Reply Comment of Harvard Radio Broadcasting Company at 6-7. We
recognize that there will be some burden involved in reporting
information on each sound recording performed, and as more information
is required for each sound recording, the burden becomes greater.
Although the ultimate goal is to require comprehensive reporting on
each performance a webcaster makes, that goal is not achievable at this
time. Therefore, the regulations announced today will not require year-
round reporting, but only reporting for certain periods during the
year, and the information that webcasters must provide will be less
comprehensive than copyright owners desire.
In selecting the data fields described below, the Copyright Office
was guided by several principles. First, we have not adopted any data
fields proposed by RIAA which are not for the purpose of making royalty
distributions under the section 112 and 114 licenses. RIAA has
requested data for purposes of monitoring the sound recording
performance complement in 17 U.S.C. 114(j)(13) (Start Date and Time of
the Sound Recording's Transmission),\13\ for monitoring requirements
regarding the duration of programming 17 U.S.C. 114(d)(2)(C)(iii) (Type
of Program), and to assist in determining whether a service is
interactive (Influence Indicator). RIAA points to the Copyright
Office's decision in the preexisting subscription service rulemaking to
adopt reporting requirements designed to permit monitoring of the sound
recording performance complement, 63 FR 34289 (June 24, 1998), and
argues that the decision must be applied in this docket. Reply Comments
of RIAA at 15 (submitted April 26, 2002). In that rulemaking proceeding
we said:
---------------------------------------------------------------------------
\13\ RIAA also states that it may use data regarding the Start
Date and Time of the Sound Recording's Transmission for distribution
purposes when audience size is not reported. Comments of RIAA at 52
(submitted April 5, 2002). Reporting of the number of performances
of a sound recording is discussed infra, and data regarding the
Start Date and Time of the Sound Recording's Transmission is not
necessary.
The Office considered arguments of DCR and other Services that
the Act imposes no obligation to affirmatively report compliance
with the complement, but reaffirms its earlier judgment. The Office
notes that conforming to the performance complement is a condition
of the statutory license, and a Service that complies with the
regulatory notice requirements and pays the statutory royalties
thereby avoids infringing the copyright owners' exclusive rights. 17
U.S.C. 114(d)(2), (f)(5). The Office determines, therefore, that it
is within its rulemaking authority under section 114(f)(2) to
require reporting of complement information. See Cablevision Sys.
Devel. Corp. v. Motion Picture Ass'n, 836 F.2d 599 (D.C. Cir. 1988)
(Copyright Office had authority to issue regulations interpreting
statute). The Office believes that the presence and specificity of
the performance complement indicates Congress' intent that records
of use include data to test compliance. While section 114(j)(7)
provides that transmissions from multiple phonorecords exceeding the
performance complement's numerical limitations will nonetheless
conform to the complement if the programming of multiple
phonorecords was not ``willfully intended'' to avoid the numerical
limitations, a pattern of conduct might provide evidence of the
---------------------------------------------------------------------------
requisite intent.
63 FR at 34294.
The reasoning for requiring performance complement data in the
preexisting subscription service rulemaking does not necessarily apply
with the same force to these interim regulations. While there is
evidence of legislative intent for services to report performance
complement data, as well as other data related to compliance with the
terms of the license, such data is not useful when it is limited to
only two weeks per calendar quarter. See discussion of reporting
periods, infra. Given that reporting of such limited data will not
serve the purpose of monitoring statutory compliance and given the
burden upon services for reporting the data, we are not requiring it at
this time. The matter may be further addressed in the final regulations
in this docket.
The second principle guiding our selection of data fields is a
cost/benefit analysis. The Office has chosen to adopt interim
regulations at this time to afford services an ample period of time to
adjust to the process of reporting. It is evident from the statements
made by certain services at the meetings held by the Office in this
docket that in many cases up to now little or no gathering of data has
taken place. Given this notable lack of activity, imposition of
extensive and detailed reporting requirements at this time could
increase the instances of noncompliance by services unprepared to
report data and could substantially raise the reporting error rates for
services that do fully comply. Consequently, the Office has chosen to
require a minimal level of reporting at this time that will permit the
distribution of royalties (albeit imperfectly). These baseline
requirements will be revisited in the final regulations after the
Copyright Office has had sufficient time to assess their effectiveness
and consider ways in which data reporting may be improved.\14\
---------------------------------------------------------------------------
\14\ While the data fields required by these interim regulations
are the baseline requirements, there is no prohibition on services
reporting additional data. As discussed above, webcaster services
appear capable of providing more data than broadcaster services.
Delivery of additional data is encouraged, and services wishing to
do so should contact SoundExchange to make arrangements for
providing the additional information.
---------------------------------------------------------------------------
By applying these principles to the 18 data fields requested by
RIAA and the fields requested by AFM and AFTRA, the Copyright Office
has settled upon the fields which must be reported by services using
the section 112 and 114 statutory licenses. With respect to RIAA's
requests, we are not requiring Start Date and Time of the Sound
Recording's Transmission, Type of Program and Influence Indicator
because these data fields are for purposes of monitoring compliance
with the limitations of the section 114 license. As discussed above,
requiring these fields would be unnecessarily burdensome especially in
light of the fact that the two-week-per-calendar-quarter reporting
requirement renders the information collected from these fields of
little or no value in enforcing the requirements of the section 114
license.
The Office also has not chosen to require reporting of the Track
Label (P) Line, the Duration of the Sound Recording, the Catalog
Number, the UPC and the Release Year, the reporting of which would be
unduly burdensome at this time. As Radio Broadcasters stated in their
comments, these pieces of information are frequently not provided to
services until well after the initial transmissions of the sound
recordings. While the information is discoverable at a later date,
researching it and revising prior records of use would involve
significant costs.
Finally, we are not adopting the proposal of AFM and AFTRA to
report data regarding nonfeatured vocalists and musicians. Many sound
recordings have numerous nonfeatured musicians and vocalists which
would require large amounts of data entry into a report of use.
Entering lists of names of performers into a report of use would be a
prohibitively costly undertaking for services that would raise the
likelihood of noncompliance and error rates in reporting. Furthermore,
we are focused upon identifying and reporting the use of sound
recordings, not performers associated with the sound recordings. AFM
and AFTRA's proposal is not consistent with the goal of this interim
[[Page 11523]]
regulation to establish merely baseline reporting requirements and
cannot be adopted at this time.
B. The Record of Use Reporting Regime
In this section the Copyright Office sets forth the reporting
regime for the use of sound recordings under the section 112 and 114
statutory licenses.\15\ In the interest of regulatory flexibility and
providing services with the opportunity to reduce their reporting
burden, we are prescribing a reporting regime that, in two instances,
permits the entry of a single amount of data in lieu of additional
separate categories of data identifying the sound recording and its
use. The reporting regime is as follows:
\15\ As discussed, infra, the required data fields for a record
of use under the section 114 license are the same for a record of
use under the section 112 license. Services using both licenses only
need report the required data fields once for each sound recording.
---------------------------------------------------------------------------
1. Name of Service
2. Transmission Category
3. Featured Artist
4. Sound Recording Title
5. Sound Recording Identification
Album Title
Marketing Label
OR
International Standard Recording Code (ISRC)
6. Total Performances
Aggregate Tuning Hours
Channel or Program Name
Play Frequency
OR
Actual Total Performances
Under this reporting regime, a service may report as few as six
items of data per sound recording or as many as eight depending upon
the amount of reporting data available to each service. A service that
has ISRC data and Actual Total Performances data for a sound recording
need only report its Name, the Transmission Category, the Featured
Artist, the Sound Recording Title, ISRC, and Actual Total Performances
for the sound recording.\16\ A service which has the ISRC but not the
Actual Total Performances data, may report the ISRC and in addition
must report its Name, Transmission Category, Featured Artist, Sound
Recording Title, Aggregate Tuning Hours, Channel or Program Name, and
Play Frequency. Likewise, a service which has Actual Total Performances
data but not ISRC may report Actual Total Performances and then must
report its Name, Transmission Category, Featured Artist, Sound
Recording Title, Album Title, and Marketing Label. And a service which
has neither ISRC nor Actual Total Performances data for a sound
recording must report its Name, Transmission Category, the Featured
Artist, Sound Recording Title, Album Title, Marketing Label, Aggregate
Tuning Hours, Channel or Program Name, and Play Frequency.
---------------------------------------------------------------------------
\16\ Simply because a service has the ISRC and/or Actual Total
Performances for a sound recording does not mean the service must
report this data in lieu of the alternative categories. The purpose
of reporting ISRC and/or Actual Total Performances is to reduce the
categories of data that a service must report for each sound
recording. If, for example, a service possesses the ISRC for a sound
recording but prefers instead to report the Sound Recording Title,
Album Title and Marketing Label instead, it is free to do so.
---------------------------------------------------------------------------
C. Details of the Data Fields for a Record of Use
1. Name of Service. The Name of Service is a mandatory reporting
category. The Name of Service is the full legal name of the service
making the transmissions.
2. Transmission Category. The Transmission Category is a mandatory
reporting category. Because the various statutory licenses contained in
section 114 have differing royalty structures, and because many
services frequently operate under more than one license, it is
necessary to identify the category under which the performance of a
sound recording is made. Services shall use the following category
codes to identify each sound recording performed:
---------------------------------------------------------------------------
\17\ Transmissions covered by these provisions include
simultaneous Internet retransmissions by non-Corporation for Public
Broadcasting noncommercial broadcasters of over-the-air AM or FM
broadcasts by the same radio station and other Internet
transmissions of non-Corporation for Public Broadcasting
noncommercial broadcasters, including up to two side channels of
programming consistent with the mission of the station, and are
subject to a section 114 royalty of 0.02 cents per performance.
\18\ Transmissions covered by this provision include Internet
transmissions on other side channels of programming by non-
Corporation for Public Broadcasting noncommercial broadcasters and
are subject to a section 114 royalty of 0.07 cents per performance.
------------------------------------------------------------------------
Category code Description
------------------------------------------------------------------------
A.................................... Eligible nonsubscription
transmission other than
broadcast simulcasts and
transmissions of non-music
programming.
B.................................... Eligible nonsubscription
transmission of broadcast
simulcast programming not
reasonably classified as news,
talk, sports or business
programming.
C.................................... Eligible nonsubscription
transmission of non-music
programming reasonably
classified as news, talk, sports
or business programming.
D.................................... Eligible nonsubscription
transmission by a non-
Corporation for Public
Broadcasting noncommercial
broadcaster making transmissions
covered by 37 CFR 261.3(a)(2)(i)
and (ii).\17\
E.................................... Eligible nonsubscription
transmission by a non-
Corporation for Public
Broadcasting noncommercial
broadcaster making transmissions
covered by 37 CFR
261.3(a)(2)(iii).\18\
F.................................... Eligible nonsubscription
transmission by a small
webcaster operating under an
agreement published in the
Federal Register pursuant to the
Small Webcaster Settlement Act.
G.................................... Eligible nonsubscription
transmission by a noncommercial
broadcaster operating under an
agreement published in the
Federal Register pursuant to the
Small Webcaster Settlement Act.
H.................................... Transmission other than broadcast
simulcasts and transmissions of
non-music programming made by an
eligible new subscription
service.
I.................................... Transmission of broadcast
simulcast programming not
reasonably classified as news,
talk, sports or business
programming made by an eligible
new subscription service.
J.................................... Transmission of non-music
programming reasonably
classified as news, talk, sports
or business programming made by
an eligible new subscription
service.
K.................................... Eligible transmission by a
business establishment service
making ephemeral recordings.
------------------------------------------------------------------------
3. Featured Artist. The Featured Artist category is a mandatory
reporting category for each sound recording. Each service must provide
the name of the featured artist for each sound recording it transmits
during the relevant reporting period. If the featured artist is an
individual or an entity such as a band, the full name must be reported.
In those instances where the songwriter and the featured artist are
different, care must be taken in reporting only the featured artist.
For example, if the sound recording is a performance of the Boston
Philharmonic Orchestra of a
[[Page 11524]]
work by Mozart, the featured artist should be reported as the Boston
Philharmonic Orchestra, not Mozart. Likewise, where the sound recording
performed is taken from an album that contains various featured artists
(i.e., a compilation), it is not acceptable to report the artist as
``Various.'' The featured artist of the particular sound recording
track performed must be reported.
4. Sound Recording Title. As with the featured artist, care must be
taken in accurately reporting the title of the sound recording (i.e.,
the song title). It is not acceptable to report the name of the album
from which the sound recording is taken.
5. Sound Recording Identification:
a. International Standard Recording Code (ISRC). The International
Standard Recording Code (``ISRC'') is the unique identifier that
identifies each version of a sound recording. It is imbedded in
promotional and commercially released sound recordings and can be read
by currently available software. A service may report the ISRC of a
sound recording in lieu of the Sound Recording Title, Album Title and
Marketing Label. However, identification of the Featured Artist is
still required. The purpose of this requirement is to permit
verification of the correct ISRC by allowing SoundExchange to identify
and correct reports where the Featured Artist does not match the
information associated with the ISRC.
b. For those services that do not report the ISRC for a sound
recording, the Album Title and Marketing Label must be reported.
(i) Album Title. According to the comments and the May 10, 2002,
public meeting, the title of an album on which a particular sound
recording appears may not be determined at the time the sound recording
is released to broadcasters and webcasters for performance; or the
album title information may not be supplied by the recording label.
Consequently, services need only report the album title for a
particular sound recording when they have that information in their
possession, or it has been supplied by the recording label, at or
before the time of performance of the sound recording.
Those services which copy sound recordings into databases for
subsequent transmission to their users and do not enter the album title
into that database are nonetheless responsible for providing the album
title if that information was in their possession, or been supplied to
them, at or before the time the sound recording was performed.
(ii) Marketing Label. The Marketing Label is the name of the
company that markets the album which contains the sound recording. As
with album titles, it is sometimes the case that services do not
possess, or are not supplied with, the name of the marketing label for
the sound recording. Services need only report the marketing label if
that information was in their possession, or was supplied to them by
the marketing label, at or before the time the performance of the sound
recording is made. Discarding marketing label information, or not
including it in the database into which the sound recording is copied,
does not relieve the service of the obligation to report the
information.
6. Total Performances. Services must provide the total number of
performances of each sound recording during the relevant reporting
period. Section 261.2, 37 CFR, defines a ``performance'' as:
[E]ach instance in which any portion of a sound recording is
publicly performed to a Listener by means of a digital audio
transmission or retransmission (e.g. the delivery of any portion of
a single track from a compact disc to one Listener) but excluding
the following:
(1) A performance of a sound recording that does not require a
license (e.g. the sound recording is not copyrighted);
(2) A performance of a sound recording for which the service has
previously obtained a license from the Copyright Owner of such sound
recording; and
(3) An incidental performance that both: (i) Makes no more than
incidental use of sound recordings, including, but not limited to,
brief musical transitions in and out of commercials or program
segments, brief performances during news, talk and sports
programming, brief background performances during disk jockey
announcements, brief performances during commercials of sixty
seconds or less in duration, or brief performances during sporting
or other public events; and
(ii) Other than ambient music that is background at a public
event, does not contain an entire sound recording and does not
feature a particular sound recording of more than thirty seconds (as
in the case of a sound recording used as a theme song).
See, 69 FR 5693 (February 6, 2004).
Certain services argue that it is not possible, in many
circumstances, to keep track of the number of performances of a sound
recording. See, e.g. Comments of Harvard Broadcasting Radio Company at
2 (submitted September 30, 2002); Comments of NRBMLC and Salem
Communications Corp. at 4 (submitted September 30, 2002); Comments of
Collegiate Broadcasters, Inc. at 6-7 (submitted September 30, 2002).
Obviously, repeated failures by multiple services to report the number
of performances of a sound recording will subvert the purpose of the
recordkeeping requirement in that many sound recordings will be under-
compensated or not compensated at all from the section 114 and 112
royalties. The Copyright Office is therefore permitting services to
identify the total number of performances of a sound recording during
the reporting period in one of two ways: Actual Total Performances or
Aggregate Tuning Hours, Channel or Program Name, and Play Frequency.
a. Actual Total Performances. For those services that possess the
technological ability to identify accurately the number of times that a
sound recording is performed (such as those that generate intended play
lists), the number of performances must be reported in the performance
data field. The data reported in this field may be for each time the
sound recording is transmitted or ``played'' during the reporting
period, or for all Actual Total Performances of the sound recording
during the relevant reporting period.\19\
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\19\ If a service chooses to enter the Actual Total Performance
data for each time the sound recording is transmitted or ``played,''
it will be required to repeat the full data for the sound recording
to account for all transmissions or ``playings'' of the sound
recording during the relevant accounting period.
---------------------------------------------------------------------------
b. For those services that lack the technological ability to report
the actual number of performances, or choose not to report such
information, the Aggregate Tuning Hours, Channel or Program Name, and
Play Frequency information must be reported for each sound recording.
(i) Aggregate Tuning Hours. Aggregate Tuning Hours (``ATH'') are a
standard measure of listenership that can be used to estimate the
Actual Total Performances of sound recordings. Aggregate Tuning Hours
measure the total number of listener hours by all who have accessed the
service during a given period of time. According to certain
broadcasters, ATH for AM/FM radio stations are readily calculable by a
service. See Joint Reply Comments of Radio Broadcasters at 26
(submitted April 26, 2002).
Aggregate Tuning Hours do not, by themselves, provide sufficient
information on which to estimate the Total Performances of a sound
recording. However, when combined with information regarding the
Channel or Program Name on which the sound recording appeared and the
Play Frequency, Aggregate Tuning Hours will permit SoundExchange to
estimate the Total Performances for a sound recording during the
reporting period.
[[Page 11525]]
See Comments of SoundExchange, Inc. at 17 n.6 (submitted September 30,
2002). Services electing to report Aggregate Tuning Hours for a sound
recording in lieu of the Actual Total Performances must report the
Aggregate Tuning Hours for the two-week reporting period selected by
the service for the channel or program on which the sound recording was
performed. If the same sound recording was performed on more than one
channel or program, a complete separate record of use must be reported
for each channel or program. Under no circumstances may a service fail
to report any data in the performance data field when submitting a
record of use of a sound recording.
(ii) Channel or Program Name. The Channel Name for an AM or FM
radio station should be the FCC facility identification number (e.g.,
WABC-FM). For all other transmissions, the Channel or Program Name
should be the name assigned by the service (e.g., ``Oldies Hits,''
``70's Rock''), ``provided that if a program is generated as a random
list of sound recordings from a predetermined list, the channel or
program must be a unique identifier differentiating each user's
randomized playlist from all other users' randomized playlists.'' 67 FR
5761, 5766 (February 7, 2002).
(iii) Play Frequency. Aggregate Tuning Hours and Channel or Program
Name are not sufficient, by themselves, to permit an equitable
distribution of royalties collected under the section 112 and 114
licenses. A sound recording which is played 100 times during the two-
week reporting period is of greater value and should receive a larger
distribution of royalties than a sound recording played only once
during that same period. Consequently, it is necessary for services
that elect not to report Actual Total Performances to report the number
of times each sound recording is played during the two week reporting
period.
Play Frequency is different than performance data. According to the
definition of ``performance'' in 37 CFR 262.2, a sound recording is
performed each time a listener receives at least some portion of the
sound recording. A sound recording that is received in some part by 10
listeners constitutes 10 performances of that sound recording. In
contrast, ``played'' simply means the overall number of times a sound
recording is offered, regardless of the number of listeners receiving
the sound recording. If a particular sound recording is offered to
listeners on a particular channel or program only once during the two-
week reporting period, then it is only ``played'' once and the Play
Frequency is one. Likewise, if the sound recording is offered 10 times
during the two-week reporting period, then it is ``played'' ten times
and the Play Frequency is 10.
D. Required Data Fields for a Record of Use Under the Section 112
License
Section 112 of the Copyright Act contains a statutory license that
permits services making digital audio transmissions to make ephemeral
copies of sound recordings necessary to the transmission process. Some
services operate under both section 114 and section 112 in transmitting
sound recordings, while some do not make use of the section 114
licenses because their performances of sound recordings are exempted by
the Copyright Act. See 17 U.S.C. 114(1)(C)(iv). These business
establishment services, however, make ephemeral copies under the
section 112 statutory license.
Section 112(e)(4) requires the Copyright Office to establish
requirements by which copyright owners receive notice and records of
use of the ephemeral copies of their sound recordings. The RIAA and
SoundExchange, Inc. have requested that the Office require detailed
records of each ephemeral copy of a sound recording made during the
transmission of the performance. Comments of RIAA at 61-62 (submitted
April 5, 2002); Comments of SoundExchange at Tab A, p. 11 (submitted
September 30, 2002). Broadcasters counter that detailed reporting of
the number of ephemeral copies made is unnecessary because of the
direct link between the royalty fees paid by nonsubscription services
for the section 114 license and the section 112 license; the ephemeral
royalty rate for nonsubscription services is a percentage of the
section 114 fee for performances. The number of ephemeral copies made
is irrelevant because the value of those copies is tied to the value of
the performance of the sound recording. Joint comments of Radio
Broadcasters at 57-58 (submitted April 5, 2002). Furthermore,
broadcasters assert that tracking the number of ephemeral copies made
of a sound recording to facilitate its performance is a virtually
impossible task and will result in a high error rate if reporting is
required. Id. at 58.
It is reasonable to conclude that the value of a license to make
ephemeral copies of a sound recording for the purpose of facilitating a
transmission that results in a performance will depend upon the value
of the performances of that sound recording. The Copyright Office is
persuaded that records of performances of sound recordings are a sound
proxy for the value of ephemeral copies made under the section 112
license. Our decision is bolstered by two factors. First, in the recent
nonsubscription service CARP proceeding, RIAA advocated that the
royalty fee for section 112 be a percentage of the section 114 fee,
apparently recognizing the difficulty of assessing the independent
value of ephemeral copies. RIAA's Proposed Findings of Fact and
Conclusions of Law at ]244 (submitted December 3, 2001). Second, while
RIAA submits that SoundExchange may choose to distribute section 112
royalties on the basis of the number of copies, it may not do so. See
37 CFR 261.4(a) and (h).
For services that make transmissions under one or more of the
section 114 licenses, there is no need to keep separate records for
ephemeral copies made under section 112. Those services are required to
submit only the single data file for performances of sound recordings
and need not submit a second data file for ephemeral copies. However,
even though the service is not required to report a separate data file,
it must identify to the receiving and designated agents during each
reporting period that it has made use of the section 112 license and
that the data file it is submitting applies to both licenses.
For business establishment services that do not make use of the
section 114 license but do make use of the section 112 license,
performance data shall serve as the records of use for section 112. All
the requirements prescribed by this regulation for the section 114
license records of use (data fields, formatting, delivery, etc.) apply
to submission of section 112 records of use. Such services must
identify to the receiving and designated agents for each reporting
period that the data they are submitting is for the use of the section
112 license and not the section 114 license.
E. Sound Recordings Not Licensed Under Section 112/114
Many services, particularly those performing older works, transmit
sound recordings that are not under federal copyright protection or
whose term has expired. Also, many services may perform works that are
in the public domain, or for which no copyright is claimed, or may
directly license certain sound recordings from their owners. Services
performing these works may report records of their usage but are not
required to do so. Services are cautioned, however, that failure to
report a sound recording which is under copyright protection may
preclude reliance upon the section 114 and section 112 statutory
licenses for the
[[Page 11526]]
performance and/or making of ephemeral copies of the work.
X. The Reporting Periods
As discussed above, the reporting requirements announced today are
adopted on an interim basis while the Copyright Office continues the
rulemaking process to produce final regulations. The interim
regulations apply to performances on a prospective basis. It is
anticipated that the Office will address the status of performances
made prior to the effective date of these interim regulations at a
later time. In the meantime, services should preserve those records of
performances in their possession dating back to the effective date of
the section 112 and 114 statutory licenses.
For the same reasons that the Office considers it advisable to
phase in the reporting process, we have determined that, at this stage,
it is best to require periodic reporting of sound recording
performances rather than year-round census reporting. Once final
regulations are implemented, year-round census reporting is likely to
be the standard measure rather than the periodic reporting that will
now be permitted on an interim basis.
For the period beginning with the effective date of this interim
regulation until superseded by further regulations, services making use
of the section 114 license (other than preexisting subscription
services governed by 37 CFR 270.1, 270.2, and 270.4) and the section
112 license shall maintain records, as provided above, for each sound
recording performed for a period of no less than two weeks (two periods
of seven consecutive days) for each quarter of the calendar year.
The two weeks reported need not be consecutive, although a service
may choose that option. Likewise, each week period need not begin on a
Sunday, but may begin on any day of the week and then run for a total
of seven consecutive days. The two weeks chosen for reporting should
reflect as much as possible the programming typically offered by the
service during the calendar quarter. Services that wish to report
records of use for periods beyond the two weeks of each calendar
quarter are encouraged to consult with SoundExchange on the feasibility
of doing so and, if SoundExchange concurs, to report for longer periods
of time.
The first reporting period shall begin on April 1, 2004,\20\ which
will mark the first period under these regulations that reports of use
must be made. Reports of use thereafter will be due for each calendar
quarter as described above until this interim regulation is superceded
by final regulations.
---------------------------------------------------------------------------
\20\ This does not mean that services will be required to keep
records commencing April 1. Rather, April 1 is the beginning of the
first three-month calendar quarter during which services must keep
records for two weeks.
---------------------------------------------------------------------------
A separate report of use is required for each calendar quarter for
each statutory license used by the service.
XI. Notification of Use of the Statutory Licenses
The Copyright Office proposed in the NPRM certain amendments to the
regulations contained in former 37 CFR 201.35 governing notice of use
of statutory licenses. Unlike records of use, there is agreement on
some of the proposed changes offered in the NPRM. Commenters agree that
the Office should prescribe a single standard form for both the section
112 and 114 licenses and generally agree to the prototype form
currently posted on the Copyright Office Web site at: http://www.loc.gov/copyright/forms/form112-114nou.pdf.
See, e.g. Comments RIAA
at 17-19 (submitted April 5, 2002); Joint Reply of Radio Broadcasters
at 32-34 (submitted April 26, 2002). With respect to the form, RIAA
requests that the services be identified in the exact manner in which
they appear in the statute (e.g. ``Eligible non-subscription
transmission service'' as opposed to ``Non-subscription transmission
service''), whereas broadcasters request ``plain English'' descriptions
of the various services identified in the form. Joint Reply of Radio
Broadcasters at 33 (submitted April 26, 2002); Comments of Collegiate
Broadcasters at 5-6 (submitted April 5, 2002). We are accepting RIAA's
suggestion to conform the definitions. While broadcasters' suggestion
for ``plain English'' sounds reasonable in theory, it is a considerable
challenge to craft definitions that are sufficiently colloquial to
satisfy the goal of ``plain English,'' yet remain technically accurate.
Unfortunately, broadcasters did not provide any language for the Office
to consider, and we therefore are not adopting their suggestion.
Commenters also agree that new notices of intent to use the
licenses should be filed to update information from previously
submitted notices and that notices should be maintained in a public
file at the Copyright Office. Broadcasters, however, request that if
new notices are required to be filed, the $20 filing fee be waived for
those who have previously submitted notices and paid the fee. Joint
Reply of Radio Broadcasters at 32 (submitted April 26, 2002); Comments
of Collegiate Broadcasters at 7 (submitted April 5, 2002). The
Copyright Office must recoup its costs for administering the section
112 and 114 statutory licenses; therefore it cannot waive the fee.
Moreover, the $20 fee is not unreasonable or unduly burdensome. Part of
the cost associated with the licenses is maintaining the public files
for the notices and the Office shall continue that practice.
Unfortunately, the Office is not prepared at this time to accept the
submission of notices and fees electronically, and for the time being
we will continue our practice of accepting only hard copies of notices
and payment. It is anticipated that this may change in the future, and
services using the section 112 and 114 licenses are encouraged to check
the Office Web site for updates on this matter.
The Office stated in the NPRM that it was considering discontinuing
its practice of posting copies of all notices on its Web site and
requiring that notices be filed jointly with, or in the alternative
only with, the collectives designated through the CARP process to
receive and distribute royalties under the section 112 and 114
licenses. RIAA opposes elimination of the practice of posting notices
on the Office Web site, arguing that the notices should be available to
all copyright owners and not just those in the Washington, DC, area.
Comments of RIAA at 20-21 (submitted April 5, 2002). The Office will
post a list of names of those persons and entities that have filed a
notice, but we will not continue to post the notices themselves.
Scanning and posting the full notices is extremely costly and
burdensome. When we institute our electronic filing system, we will
revisit the issue. In the meantime, persons interested in viewing the
notices must contact the Copyright Office.
None of the commenters favor submission of notices to the royalty
collectives designated by the CARP process, either solely or jointly.
See, e.g. Comments of the RIAA at 22-23 (submitted April 5, 2002);
Joint Reply of Radio Broadcasters at 33 (submitted April 26, 2002).
Consequently, the Office will not adopt such a requirement.
Updated notices, along with the $20 filing fee specified in Sec.
201.3(e) of title 37 of the Code of Federal Regulations, shall be filed
with the Licensing Division of the Copyright Office no later than July
1, 2004. The Office stated in the NPRM that it was considering
requiring periodic updating of notices, perhaps on an annual basis. We
are declining at this time to adopt a regular
[[Page 11527]]
specified time period, preferring to gain experience in determining
whether mandatory periodic updates by all services are necessary. The
matter will be further addressed in the final regulations.
Notices of intent to use the section 112 and/or 114 licenses by new
subscription services will still be required to be filed prior to the
date of first transmission or the making of an ephemeral recording, and
services will continue to be required to update the notice within 45
days of change in the information reported. Notices for new
subscription services must be submitted to the Licensing Division of
the Copyright Office accompanied by the filing fee specified in 37 CFR
201.3(e).
List of Subjects in 37 CFR Parts 201 and 270
Copyright, Sound recordings.
Interim Regulation
0
In consideration of the foregoing, the Copyright Office amends part 201
of 37 CFR and adds part 270 to 37 CFR to read as follows:
0
1. The authority citation for part 201 continues to read as follows:
Authority: 17 U.S.C. 702.
PART 201--GENERAL PROVISIONS
Sec. Sec. 201.35 through 201.37 [Removed and Reserved]
0
2. Remove and reserve Sec. Sec. 201.35 through 201.37.
0
3. Add part 270 to 37 CFR Chapter II, subchapter B, to read as follows:
PART 270--NOTICE AND RECORDKEEPING REQUIREMENTS FOR STATUTORY
LICENSES
Sec.
270.1 Notice of use of sound recordings under statutory license.
270.2 Reports of use of sound recordings under statutory license for
preexisting subscription services.
270.3 Reports of use of sound recordings under statutory license for
nonsubscription transmission services, preexisting satellite digital
audio radio services, new subscription services and business
establishment services.
270.4 Designated collection and distribution organizations for
records of use of sound recordings under statutory license.
Authority: 17 U.S.C. 702.
Sec. 270.1 Notice of use of sound recordings under statutory license.
(a) General. This section prescribes rules under which copyright
owners shall receive notice of use of their sound recordings when used
under either section 112(e) or 114(d)(2) of title 17, United States
Code, or both.
(b) Definitions. (1) A Notice of Use of Sound Recordings under
Statutory License is a written notice to sound recording copyright
owners of the use of their works under section 112(e) or 114(d)(2) of
title 17, United States Code, or both, and is required under this
section to be filed by a Service in the Copyright Office.
(2) A Service is an entity engaged in either the digital
transmission of sound recordings pursuant to section 114(d)(2) of title
17 of the United States Code or making ephemeral phonorecords of sound
recordings pursuant to section 112(e) of title 17 of the United States
Code or both. For purposes of this section, the definition of a Service
includes an entity that transmits an AM/FM broadcast signal over a
digital communications network such as the Internet, regardless of
whether the transmission is made by the broadcaster that originates the
AM/FM signal or by a third party, provided that such transmission meets
the applicable requirements of the statutory license set forth in 17
U.S.C. 114(d)(2). A Service may be further characterized as either a
preexisting subscription service, preexisting satellite digital audio
radio service, nonsubscription transmission service, new subscription
service, business establishment service or a combination of those:
(i) A preexisting subscription service is a service that performs
sound recordings by means of noninteractive audio-only subscription
digital audio transmissions, and was in existence and making such
transmissions to the public for a fee on or before July 31, 1998, and
may include a limited number of sample channels representative of the
subscription service that are made available on a nonsubscription basis
in order to promote the subscription service.
(ii) A preexisting satellite digital audio radio service is a
subscription satellite digital audio radio service provided pursuant to
a satellite digital audio radio service license issued by the Federal
Communications Commission on or before July 31, 1998, and any renewal
of such license to the extent of the scope of the original license, and
may include a limited number of sample channels representative of the
subscription service that are made available on a nonsubscription basis
in order to promote the subscription service.
(iii) A nonsubscription transmission service is a service that
makes noninteractive nonsubscription digital audio transmissions that
are not exempt under section 114(d)(1) of title 17 of the United States
Code and are made as part of a service that provides audio programming
consisting, in whole or in part, of performances of sound recordings,
including transmissions of broadcast transmissions, if the primary
purpose of the service is to provide to the public such audio or other
entertainment programming, and the primary purpose of the service is
not to sell, advertise, or promote particular products or services
other than sound recordings, live concerts, or other music-related
events.
(iv) 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.
(v) A business establishment service is a service that makes
ephemeral phonorecords of sound recordings pursuant to section 112(e)
of title 17 of the United States Code and is exempt under section
114(d)(1)(C)(iv) of title 17 of the United States Code.
(c) Forms and content. A Notice of Use of Sound Recordings Under
Statutory License shall be prepared on a form that may be obtained from
the Copyright Office website or from the Licensing Division, and shall
include the following information:
(1) The full legal name of the Service that is either commencing
digital transmissions of sound recordings or making ephemeral
phonorecords of sound recordings under statutory license or doing both.
(2) The full address, including a specific number and street name
or rural route, of the place of business of the Service. A post office
box or similar designation will not be sufficient except where it is
the only address that can be used in that geographic location.
(3) The telephone number and facsimile number of the Service.
(4) Information on how to gain access to the online website or
homepage of the Service, or where information may be posted under this
section concerning the use of sound recordings under statutory license.
(5) Identification of each license under which the Service intends
to operate, including identification of each of the following
categories under which the Service will be making digital transmissions
of sound recordings: preexisting subscription service, preexisting
satellite digital audio radio service, nonsubscription transmission
service, new subscription service or business establishment service.
[[Page 11528]]
(6) The date or expected date of the initial digital transmission
of a sound recording to be made under the section 114 statutory license
and/or the date or the expected date of the initial use of the section
112(e) license for the purpose of making ephemeral phonorecords of the
sound recordings.
(7) Identification of any amendments required by paragraph (f) of
this section.
(d) Signature. The Notice shall include the signature of the
appropriate officer or representative of the Service that is either
transmitting the sound recordings or making ephemeral phonorecords of
sound recordings under statutory license or doing both. The signature
shall be accompanied by the printed or typewritten name and the title
of the person signing the Notice and by the date of the signature.
(e) Filing notices; fees. The original and three copies shall be
filed with the Licensing Division of the Copyright Office and shall be
accompanied by the filing fee set forth in Sec. 201.3(c) of this
chapter. Notices shall be placed in the public records of the Licensing
Division. The address of the Licensing Division is: Library of
Congress, Copyright Office, Licensing Division, 101 Independence
Avenue, SE, Washington, DC 20557-6400.
(1) A Service that, prior to April 12, 2004, has already commenced
making digital transmissions of sound recordings pursuant to section
114(d)(2) of title 17 of the United States Code or making ephemeral
phonorecords of sound recordings pursuant to section 112(e) of title 17
of the United States Code, or both, and that has already filed an
Initial Notice of Digital Transmission of Sound Recordings Under
Statutory License, and that intends to continue to make digital
transmissions or ephemeral phonorecords following July 1, 2004, shall
file a Notice of Use of Sound Recordings under Statutory License with
the Licensing Division of the Copyright Office no later than July 1,
2004.
(2) A Service that, on or after July 1, 2004, commences making
digital transmissions and ephemeral phonorecords of sound recordings
under statutory license shall file a Notice of Use of Sound Recordings
under Statutory License with the Licensing Division of the Copyright
Office prior to the making of the first ephemeral phonorecord of the
sound recording and prior to the first igital transmission of the sound
recording.
(3) A Service that, on or after July 1, 2004, commences making only
ephemeral phonorecords of sound recordings, shall file a Notice of Use
of Sound Recordings under Statutory License with the Licensing Division
of the Copyright Office prior to the making of the first ephemeral
phonorecord of a sound recording under the statutory license.
(f) Amendment. A Service shall file a new Notice of Use of Sound
Recordings under Statutory License within 45 days after any of the
information contained in the Notice on file has changed, and shall
indicate in the space provided by the Copyright Office that the Notice
is an amended filing. The Licensing Division shall retain copies of all
prior Notices filed by the Service.
Sec. 270.2 Reports of use of sound recordings under statutory license
for preexisting subscription services.
(a) General. This section prescribes rules under which preexisting
subscription services shall serve copyright owners with notice of use
of their sound recordings, what the content of that notice should be,
and under which records of such use shall be kept and made available.
(b) Definitions. (1) A Collective is a collection and distribution
organization that is designated under the statutory license, either by
settlement agreement reached under section 114(f)(1)(A) or section
114(f)(1)(C)(i) of title 17 of the United States Code and adopted
pursuant to 37 CFR 251.63(b), or by decision of a Copyright Arbitration
Royalty Panel (CARP) under section 114(f)(1)(B) or section
114(f)(1)(C)(ii), or by an order of the Librarian pursuant to 17 U.S.C.
802(f).
(2) A Report of Use of Sound Recordings under Statutory License is
a report required under this part to be provided by the preexisting
subscription service transmitting sound recordings under statutory
license.
(3) A Preexisting Subscription Service is an entity engaged in the
digital transmission of sound recordings pursuant to section 114(f) of
title 17 of the United States Code.
(c) Service. Reports of Use shall 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 reached under section 114(f)(1)(A) or
section 114(f)(1)(C)(i) and adopted pursuant to 37 CFR 251.63(b), or by
decision of a Copyright Arbitration Royalty Panel (CARP) under section
114(f)(1)(B) or section 114(f)(1)(C)(ii), or by an order of the
Librarian pursuant to 17 U.S.C. 802(f). Reports of Use shall be served,
by certified or registered mail, or by other means if agreed upon by
the respective preexisting subscription service and Collective, on or
before the twentieth day after the close of each month.
(d) Posting. In the event that no Collective is designated under
the statutory license, or if all designated Collectives have terminated
collection and distribution operations, a preexisting subscription
service transmitting sound recordings under statutory license shall
post and make available online its Reports of Use. Preexisting
subscription services shall post their Reports of Use online on or
before the 20th day after the close of each month, and make them
available to all sound recording copyright owners for a period of 90
days. Preexisting subscription services may require use of passwords
for access to posted Reports of Use, but must make passwords available
in a timely manner and free of charge or other restrictions.
Preexisting subscription services may predicate provision of a password
upon:
(1) Information relating to identity, location and status as a
sound recording copyright owner; and
(2) A ``click-wrap'' agreement not to use information in the Report
of Use for purposes other than royalty collection, royalty
distribution, and determining compliance with statutory license
requirements, without the express consent of the preexisting
subscription service providing the Report of Use.
(e) Content. A ``Report of Use of Sound Recordings under Statutory
License'' shall be identified as such by prominent caption or heading,
and shall include a preexisting subscription service's ``Intended
Playlists'' for each channel and each day of the reported month.
(1) The ``Intended Playlists'' shall include a consecutive listing
of every recording scheduled to be transmitted, and shall contain the
following information in the following order:
(i) The name of the preexisting subscription service or entity;
(ii) The channel;
(iii) The sound recording title;
(iv) The featured recording artist, group, or orchestra;
(v) The retail album title (or, in the case of compilation albums
created for commercial purposes, the name of the retail album
identified by the preexisting subscription service for purchase of the
sound recording);
(vi) The recording label;
(vii) The catalog number;
(viii) The International Standard Recording Code (ISRC) embedded in
the sound recording, where available and feasible;
(ix) The date of transmission; and
(x) The time of transmission.
(2) The Report of Use shall include a report of any system failure
resulting in
[[Page 11529]]
a deviation from the Intended Playlists of scheduled sound recordings.
Such report shall include the date, time and duration of any such
system failure.
(f) Signature. Reports of Use shall include a signed statement by
the appropriate officer or representative of the preexisting
subscription service attesting, under penalty of perjury, that the
information contained in the Report is believed to be accurate and is
maintained by the preexisting subscription service in its ordinary
course of business. The signature shall be accompanied by the printed
or typewritten name and title of the person signing the Report, and by
the date of signature.
(g) Format. Reports of Use should be provided on a standard
machine-readable medium, such as diskette, optical disc, or magneto-
optical disc, and should conform as closely as possible to the
following specifications:
(1) ASCII delimited format, using pipe characters as delimiter,
with no headers or footers;
(2) Carats should surround strings;
(3) No carats should surround dates and numbers;
(4) Dates should be indicated by: MM/DD/YYYY;
(5) Times should be based on a 24-hour clock: HH:MM:SS;
(6) A carriage return should be at the end of each line; and
(7) All data for one record should be on a single line.
(h) Confidentiality. Copyright owners, their agents and Collectives
shall not disseminate information in the Reports of Use to any persons
not entitled to it, nor utilize the information for purposes other than
royalty collection and distribution, and determining compliance with
statutory license requirements, without express consent of the
preexisting subscription service providing the Report of Use.
(i) Documentation. All compulsory licensees shall, for a period of
at least three years from the date of service or posting of the Report
of Use, keep and retain a copy of the Report of Use. For reporting
periods from February 1, 1996, through August 31, 1998, the preexisting
subscription service shall serve upon all designated Collectives and
retain for a period of three years from the date of transmission
records of use indicating which sound recordings were performed and the
number of times each recording was performed, but is not required to
produce full Reports of Use or Intended Playlists for those periods.
Sec. 270.3 Reports of use of sound recordings under statutory license
for nonsubscription transmission services, preexisting satellite
digital audio radio services, new subscription services and business
establishment services.
(a) General. This section prescribes rules under which
nonsubscription transmission services, preexisting satellite digital
audio radio services, new subscription services, and business
establishment services shall maintain reports of use of their sound
recordings under section 112(e) or section 114(d)(2) of title 17 of the
United States Code, or both.
(b) Definitions. (1) Aggregate Tuning Hours are the total hours of
programming that a nonsubscription transmission service, preexisting
satellite digital audio radio service, new subscription service or
business establishment service has transmitted during the reporting
period identified in paragraph (c)(3) of this section to all listeners
within the United States over the relevant channels or stations, and
from any archived programs, that provide audio programming consisting,
in whole or in part, of eligible nonsubscription service, preexisting
satellite digital audio radio service, new subscription service or
business establishment service transmissions, less the actual running
time of any sound recordings for which the service has obtained direct
licenses apart from 17 U.S.C. 114(d)(2) or which do not require a
license under United States copyright law. For example, if a
nonsubscription transmission service transmitted one hour of
programming to 10 simultaneous listeners, the nonsubscription
transmission service's Aggregate Tuning Hours would equal 10. If 3
minutes of that hour consisted of transmission of a directly licensed
recording, the nonsubscription transmission service's Aggregate Tuning
Hours would equal 9 hours and 30 minutes. If one listener listened to
the transmission of a nonsubscription transmission service for 10 hours
(and none of the recordings transmitted during that time was directly
licensed), the nonsubscription transmission service's Aggregate Tuning
Hours would equal 10.
(2) An AM/FM Webcast is a transmission made by an entity that
transmits an AM/FM broadcast signal over a digital communications
network such as the Internet, regardless of whether the transmission is
made by the broadcaster that originates the AM/FM signal or by a third
party, provided that such transmission meets the applicable
requirements of the statutory license set forth in 17 U.S.C. 114(d)(2).
(3) A Collective is a collection and distribution organization that
is designated under one or both of the statutory licenses, either by
settlement agreement reached under section 112(e)(3), section
112(e)(6), section 114(f)(1)(A), section 114(f)(1)(C)(i), section
114(f)(2)(A), or section 114(f)(2)(C)(i) and adopted pursuant to Sec.
251.63(b) of this chapter, or by a decision of a Copyright Arbitration
Royalty Panel under section 112(e)(4), section 112(e)(6), section
114(f)(1)(B), section (f)(1)(C)(ii), section 114(f)(2)(B), or section
114(f)(2)(C)(ii) or by order of the Librarian of Congress pursuant to
17 U.S.C. 802(f).
(4) A new subscription service is defined in Sec. 270.1(b)(2)(iv).
(5) A nonsubscription transmission service is defined in Sec.
270.1(b)(2)(iii).
(6) A preexisting satellite digital audio radio service is defined
in Sec. 270.1(b)(2)(ii).
(7) A business establishment service is defined in Sec.
270.1(b)(2)(v).
(8) A performance is each instance in which any portion of a sound
recording is publicly performed to a Listener by means of a digital
audio transmission or retransmission (e.g., the delivery of any portion
of a single track from a compact disc to one Listener) but excluding
the following:
(i) A performance of a sound recording that does not require a
license (e.g., the sound recording is not copyrighted);
(ii) A performance of a sound recording for which the service has
previously obtained a license from the Copyright Owner of such sound
recording; and
(iii) An incidental performance that both:
(A) Makes no more than incidental use of sound recordings
including, but not limited to, brief musical transitions in and out of
commercials or program segments, brief performances during news, talk
and sports programming, brief background performances during disk
jockey announcements, brief performances during commercials of sixty
seconds or less in duration, or brief performances during sporting or
other public events and
(B) Other than ambient music that is background at a public event,
does not contain an entire sound recording and does not feature a
particular sound recording of more than thirty seconds (as in the case
of a sound recording used as a theme song).
(9) Play frequency is the number of times a sound recording is
publicly performed by a Service during the relevant period, without
respect to the number of listeners receiving the sound
[[Page 11530]]
recording. If a particular sound recording is transmitted to listeners
on a particular channel or program only once during the two-week
reporting period, then the play frequency is one. If the sound
recording is transmitted 10 times during the two-week reporting period,
then the play frequency is 10.
(10) A Report of Use is a report required under this section to be
provided by a nonsubscription transmission service and new subscription
service that is transmitting sound recordings pursuant to the statutory
license set forth in section 114(d)(2) of title 17 of the United States
Code or making ephemeral phonorecords of sound recordings pursuant to
the statutory license set forth in section 112(e) of title 17 of the
United States Code, or both.
(c) Report of Use. (1) Separate reports not required. A
nonsubscription transmission service, preexisting satellite digital
audio radio service or a new subscription service that transmits sound
recordings pursuant to the statutory license set forth in section
114(d)(2) of title 17 of the United States Code and makes ephemeral
phonorecords of sound recordings pursuant to the statutory license set
forth in section 112(e) of title 17 of the United States Code need not
maintain a separate Report of Use for each statutory license during the
relevant reporting periods.
(2) Content. For a nonsubscription transmission service,
preexisting satellite digital audio radio service, new subscription
service or business establishment service that transmits sound
recordings pursuant to the statutory license set forth in section
114(d)(2) of title 17 of the United States Code, or the statutory
license set forth in section 112(e) of title 17 of the United States
Code, or both, each Report of Use shall contain the following
information, in the following order, for each sound recording
transmitted during the reporting periods identified in paragraph (c)(3)
of this section:
(i) The name of the nonsubscription transmission service,
preexisting satellite digital audio radio service, new subscription
service or business establishment service making the transmissions,
including the name of the entity filing the Report of Use, if
different;
(ii) The category transmission code for the category of
transmission operated by the nonsubscription transmission service,
preexisting satellite digital audio radio service, new subscription
service or business establishment service:
(A) For eligible nonsubscription transmissions other than broadcast
simulcasts and transmissions of non-music programming;
(B) For eligible nonsubscription transmissions of broadcast
simulcast programming not reasonably classified as news, talk, sports
or business programming;
(C) For eligible nonsubscription transmissions of non-music
programming reasonably classified as news, talk, sports or business
programming;
(D) For eligible nonsubscription transmissions by a non-Corporation
for Public Broadcasting noncommercial broadcaster making transmissions
covered by Sec. Sec. 261.3(a)(2)(i) and (ii) of this chapter;
(E) For eligible nonsubscription transmissions by a non-Corporation
for Public Broadcasting noncommercial broadcaster making transmissions
covered by Sec. 261.3(a)(2)(iii) of this chapter;
(F) For eligible nonsubscription transmissions by a small webcaster
operating under an agreement published in the Federal Register pursuant
to the Small Webcaster Settlement Act;
(G) For eligible nonsubscription transmissions by a noncommercial
broadcaster operating under an agreement published in the Federal
Register pursuant to the Small Webcaster Settlement Act;
(H) For transmissions other than broadcast simulcasts and
transmissions of non-music programming made by an eligible new
subscription service;
(I) For transmissions of broadcast simulcast programming not
reasonably classified as news, talk, sports or business programming
made by an eligible new subscription service;
(J) For transmissions of non-music programming reasonably
classified as news, talk, sports or business programming made by an
eligible new subscription service; and
(K) For eligible transmissions by a business establishment service
making ephemeral recordings;
(iii) The featured artist;
(iv) The sound recording title;
(v) The International Standard Recording Code (ISRC) or,
alternatively to the ISRC, the
(A) Album title; and
(B) Marketing label;
(vi) The actual total performances of the sound recording during
the reporting period or, alternatively, the
(A) Aggregate Tuning Hours;
(B) Channel or program name; and
(C) Play frequency.
(3) Reporting period. A Report of Use shall be prepared for a two-
week period (two periods of 7 consecutive days) for each calendar
quarter of the year. The two weeks need not be consecutive, but both
weeks must be completely within the calendar quarter.
(4) Signature. Reports of Use shall include a signed statement by
the appropriate officer or representative of the service attesting,
under penalty of perjury, that the information contained in the Report
is believed to be accurate and is maintained by the service in its
ordinary course of business. The signature shall be accompanied by the
printed or typewritten name and the title of the person signing the
Report, and by the date of the signature.
(5) Confidentiality. Copyright owners, their agents and Collectives
shall not disseminate information in the Reports of Use to any persons
not entitled to it, nor utilize the information for purposes other than
royalty collection and distribution, without consent of the service
providing the Report of Use.
(6) Documentation. A Service shall, for a period of at least three
years from the date of service or posting of a Report of Use, keep and
retain a copy of the Report of Use.
Sec. 270.4 Designated collection and distribution organizations for
records of use of sound recordings under statutory license.
(a) General. This section prescribes rules under which records of
use shall be collected and distributed under section 114(f) of title 17
of the United States Code, and under which records of such use shall be
kept and made available.
(b) Definitions. (1) A Collective is a collection and distribution
organization that is designated under the statutory license, either by
settlement agreement reached under section 114(f)(1)(A) or section
114(f)(1)(C)(i) and adopted pursuant to 37 CFR 251.63(b), or by
decision of a Copyright Arbitration Royalty Panel (CARP) under section
114(f)(1)(B) or section 114(f)(1)(C)(ii), or by an order of the
Librarian pursuant to 17 U.S.C. 802(f).
(2) A Service is an entity engaged in the digital transmission of
sound recordings pursuant to section 114(f) of title 17 of the United
States Code.
(c) Notice of Designation as Collective under Statutory License. A
Collective shall file with the Licensing Division of the Copyright
Office and post and make available online a ``Notice of Designation as
Collective under Statutory License,'' which shall be identified as such
by prominent caption or heading, and shall contain the following
information:
[[Page 11531]]
(1) The Collective name, address, telephone number and facsimile
number;
(2) A statement that the Collective has been designated for
collection and distribution of performance royalties under statutory
license for digital transmission of sound recordings; and
(3) Information on how to gain access to the online website or home
page of the Collective, where information may be posted under this part
concerning the use of sound recordings under statutory license. The
address of the Licensing Division is: Library of Congress, Copyright
Office, Licensing Division, 101 Independence Avenue, SE., Washington,
DC 20557-6400.
(d) Annual Report. The Collective will post and make available
online, for the duration of one year, an Annual Report on how the
Collective operates, how royalties are collected and distributed, and
what the Collective spent that fiscal year on administrative expenses.
(e) Inspection of Reports of Use by copyright owners. The
Collective shall make copies of the Reports of Use for the preceding
three years available for inspection by any sound recording copyright
owner, without charge, during normal office hours upon reasonable
notice. The Collective shall predicate inspection of Reports of Use
upon information relating to identity, location and status as a sound
recording copyright owner, and the copyright owner's written agreement
not to utilize the information for purposes other than royalty
collection and distribution, and determining compliance with statutory
license requirements, without express consent of the Service providing
the Report of Use. The Collective shall render its best efforts to
locate copyright owners in order to make available records of use, and
such efforts shall include searches in Copyright Office public records
and published directories of sound recording copyright owners.
(f) Confidentiality. Copyright owners, their agents, and
Collectives shall not disseminate information in the Reports of Use to
any persons not entitled to it, nor utilize the information for
purposes other than royalty collection and distribution, and
determining compliance with statutory license requirements, without
express consent of the Service providing the Report of Use.
(g) Termination and dissolution. If a Collective terminates its
collection and distribution operations prior to the close of its term
of designation, the Collective shall notify the Copyright Office, and
all Services transmitting sound recordings under statutory license, by
certified or registered mail. The dissolving Collective shall provide
each such Service with information identifying the copyright owners it
has served.
Dated: February 26, 2004.
Marybeth Peters,
Register of Copyrights.
James H. Billington,
The Librarian of Congress.
[FR Doc. 04-5404 Filed 3-10-04; 8:45 am]
BILLING CODE 1410-33-U