[Federal Register: November 3, 2006 (Volume 71, Number 213)]
[Notices]
[Page 64639-64647]

LIBRARY OF CONGRESS
Copyright Office

[Docket Nos. RF 2006-2 and RF 2006-3]

Designation as a Preexisting Subscription Service

AGENCY: Copyright Office, Library of Congress

ACTION: Final order

SUMMARY:

The Copyright Royalty Board, acting pursuant to statute, referred a novel question of law to the Register of Copyrights concerning the designation of certain digital subscription music services as preexisting subscription services. Specifically, the Copyright Royalty Board requested a decision by the Register of Copyrights regarding whether the universe of preexisting subscription services was limited to three specific services. The Register of Copyrights, in a timely fashion, transmitted a Memorandum Opinion to the Copyright Royalty Board confirming that only three music services qualify as a preexisting subscription service for purposes of performing a sound recording publicly by means of a subscription digital audio transmission pursuant to a statutory license.

DATES:

Effective Date: October 20, 2006.

FOR FURTHER INFORMATION CONTACT:

Renee Coe, Attorney Advisor, and Tanya M. Sandros, Associate General Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station, Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

In the Copyright Royalty and Distribution Reform Act of 2004, Congress amended Title 17 to replace the copyright arbitration royalty panel with the Copyright Royalty Board (“Board”). One of the functions of the new Board is to make determinations and adjustments of reasonable terms and rates of royalty payments as provided in sections 112(e), 114, 115, 116, 118, 119 and 1004 of the Copyright Act. In any case in which a novel question of law concerning an interpretation of a provision of the Copyright Act is presented in a ratesetting proceeding, the Board has the authority to request a decision of the Register of Copyrights (“Register”), in writing, to resolve such questions. See 17 U.S.C. 802(f)(1)(B)(i). For this purpose, a “novel question of law” is a question of law that has not been determined in prior decisions, determinations, and rulings described in Section 803(a) of the Copyright Act.

On January 4, 2006, SoundExchange, Inc. (“SoundExchange”) filed a motion requesting that the Board refer to the Register of Copyrights a novel question of law, concerning, inter alia, the status of ancillary music services offered by Sirius Satellite Radio, Inc. (“Sirius”) and XM Satellite Radio (“XM”) for purposes of utilizing the statutory license set forth in Section 114 of the Copyright Act, title 17 of the United States Code. On May 4, 2006, SoundExchange filed a second motion, again requesting a referral of a novel question of substantive law, this time concerning the status of THP Capstar (“Capstar”), a company which, according to the SoundExchange motion, had purchased some of the assets of DMX, Inc. (“DMX”) — a company which had been operating under the Section 114 statutory license as a preexisting service.

After considering the arguments presented by SoundExchange and the replies filed by Sirius, XM, and Capstar, the Board agreed that the matters raised by SoundExhange’s motions did present a novel question of law and agreed to submit the question to the Register. Accordingly, on September 20, 2006, the Board transmitted to the Register: (1) two Orders, dated August 21, 2006, referring a novel question of law; and (2) the Initial and Reply Briefs filed with the Board by SoundExchange, Sirius and DMX. The Board’s transmittal triggered the 30–day decision period prescribed in Section 802 of the Copyright Act. This statutory provision states that the Register “shall transmit his or her decision to the Copyright Royalty Judges within 30 days after the Register of Copyrights receives all of the briefs or comments of the participants.” See17 U.S.C. 802(f)(1)(B)(i). On October 20, 2006, the Register transmitted a Memorandum Opinion to the Board that addressed the novel question of law. To provide the public with notice of the decision rendered by the Register, the Memorandum Opinion is reproduced in its entirety, below.