Determination of Reasonable Rates and Terms for Noncommercial Broadcasting

AGENCY:

Copyright Royalty Board, Library of Congress.

ACTION:

Final rule.

SUMMARY:

The Copyright Royalty Judges are publishing final regulations setting the rates and terms for use of certain works in connection with noncommercial broadcasting for the period commencing January 1, 2013, and ending on December 31, 2017.

DATES:

Effective Date: January 1, 2013.

Applicability Dates: The regulations apply to the license period January 1, 2013, through December 31, 2017.

FOR FURTHER INFORMATION CONTACT:

LaKeshia Keys, Program Specialist, by telephone at (202) 707-7658 or email at crb@loc.gov.

SUPPLEMENTARY INFORMATION:

Section 118 of the Copyright Act, title 17 of the United States Code, establishes a statutory license for the use of certain copyrighted works in connection with noncommercial television and radio broadcasting. Chapter 8 of the Copyright Act requires the Copyright Royalty Judges (“Judges”) to conduct proceedings every five years, beginning in 2006, to determine the rates and terms for the section 118 license. 17 U.S.C. 804(b)(6). Accordingly, the Judges conducted a proceeding to determine the rates and terms for the license period 2008-2012 and published final regulations on November 30, 2007. 72 FR 67646.

On January 5, 2011, the Judges published in the Federal Register a notice commencing the proceeding to determine the rates and terms for the 2013-2017 license period and requesting submission of petitions to participate from interested parties. 76 FR 591. Petitions to Participate were received from: The American Society of Authors, Composers and Publishers (“ASCAP”); SESAC, Inc.; Broadcast Music, Inc. (“BMI”); Educational Media Foundation (“EMF”); Music Reports, Inc. (“MRI”); National Public Radio, the Public Broadcasting Service, and noncommercial radio and television stations eligible to receive funding from the Corporation for Public Broadcasting jointly (“NPR/PBS/CPB”); National Religious Broadcasters Noncommercial Music License Committee (“NRBNMLC”); the Church Music Publishers' Association; the National Music Publishers' Association, Inc. and the Harry Fox Agency, jointly (“NMPA/HFA”); the Catholic Radio Association (“CRA”); and the American Council on Education (“ACE”). The Judges set the timetable for the three-month negotiation period, see 17 U.S.C. 803(b)(3), and directed the participants to submit their written direct statements no later than October 30, 2011. The Judges received written direct statements from CRA, BMI, ASCAP, and MRI, as well as several notifications of settlement and proposed rates and terms for the Judges to adopt.

There are two ways that copyright owners and public broadcasting entities may negotiate rates and terms under the section 118 statutory license. First, copyright owners may negotiate rates and terms with specific public broadcasting entities for the use of all of the copyright owners' works covered by the license. Section 118(b)(2) provides that such license agreements “shall be given effect in lieu of any determination by the * * * Copyright Royalty Judges,” provided that copies of the agreement are submitted to the Judges “within 30 days of execution.” 17 U.S.C. 118(b)(2). The Judges received several agreements in this category; no further action is required with respect to these agreements.

Second, copyright owners and public broadcasting entities may negotiate rates and terms for categories of copyrighted works and uses that would be binding on all owners and entities and submit them to the Judges for approval. Section 801(b)(7)(A) provides that in such event:

(i) The Copyright Royalty Judges shall provide those that would be bound by the terms, rates, or other determination set by any agreement in a proceeding to determine royalty rates an opportunity to comment on the agreement and shall provide to participants in the proceeding under section 803(b)(2) that would be bound by the terms, rates, or other determination set by the agreement to comment on the agreement and object to its adoption as a basis for statutory terms and rates; and

(ii) the Copyright Royalty Judges may decline to adopt the agreement as a basis for statutory terms and rates for participants that are not parties to the agreement, if any participant described in clause (i) objects to the agreement and the Copyright Royalty Judges conclude, based on the record before them if one exists, that the agreement does not provide a reasonable basis for setting statutory terms and rates.

17 U.S.C. 801(b)(7)(A). The Judges received seven such proposals and published a notice requesting comment on the proposed rates and terms contained in the proposals, with certain modifications, submitted by the following participants: (1) SESAC and ACE; (2) BMI and ACE; (3) ASCAP and ACE; (4) NMPA/HFA and NRBNMLC; (5) SESAC and NRBNMLC; (6) ASCAP and NRBNMLC; and (7) BMI and NRBNMLC. 77 FR 24662 (April 25, 2012). Comments were due by May 25, 2012.

The Judges received comments from Common Frequency; OpenSky Radio Corp.; The Prometheus Radio Project; Wimberley Valley Radio; WKNC-FM; and PBS and NPR, jointly. Each comment, except the PBS/NPR comment, opposed certain of the proposed rates as not reasonable as applied to them. The Judges' ability to reject an agreement on the reasonableness of the rates and terms proposed therein is constrained by statute. Specifically, section 801(b)(7)(A)(ii) precludes the Judges from declining to adopt proposed rates and terms on the grounds of reasonableness unless a participant to the proceeding objects. None of the entities objecting to the proposed rates and terms submitted a timely filed petition to participate in this proceeding, and therefore none qualifies as a participant to the proceeding. Therefore, having received no objections to the reasonableness of the proposed rates and terms from a participant to this proceeding, the Copyright Royalty Judges are adopting final regulations, as published on April 25, 2012, and June 26, 2012, which set the rates and terms for the section 118 statutory license for the period 2013-2017.

List of Subjects in 37 CFR Part 381

• Copyright
• Music
• Radio
• Television
• Rates

Final Regulations

For the reasons set forth in the preamble, the Copyright Royalty Judges amend Part 381 to Chapter III of title 37 of the Code of Federal Regulations as follows:

PART 381—USE OF CERTAIN COPYRIGHTED WORKS IN CONNECTION WITH NONCOMMERCIAL EDUCATIONAL BROADCASTING

1. The authority citation for part 381 continues to read as follows:

Authority: 17 U.S.C. 118, 801(b)(1) and 803.

2. Section 381.1 is amended by removing “2008” and adding “2013” in its place and by removing “2012” and adding “2017” in its place.

3. Section 381.4 is amended as follows:

a. By revising paragraphs (a)(1) through(8); and

b. In paragraph (c), by removing “2008” and adding “2013” in its place, and by removing “2012” and adding “2017” in its place.

The revisions read as follows:

4. Section 381.5 is amended by revising paragraphs (c) and (d) to read as follows:

5. Section 381.6 is amended as follows:

a. By removing paragraph (f).

b. By redesignating paragraphs (b) through (e) as paragraphs (c) through (f), respectively;

c. By adding a new paragraph (b);

d. By revising newly redesignated paragraphs (d) and (e).

The additions and revisions to § 381.6 read as follows:

6. Section 381.7 is amended as follows:

a. By revising paragraphs (b)(1)(i)(A) through (D) and (b)(1)(ii)(A) through (D);

b. By revising paragraphs (b)(2)(i) through (iv);

c. In paragraph (b)(4), by removing “2008-2012” and adding “2013-2017” in its place; and

d. In paragraph (b)(5), by removing “2012” and adding “2017” in its place.

The revisions read as follows:

7. Section 381.8 is amended as follows:

a. By revising paragraphs (b)(1)(i) through (ii); and

b. In paragraph (f), by removing “2012” and adding “2017” in its place.

The revisions read as follows:

8. Section 381.10 is amended as follows:

a. In paragraph (a), by removing “2007” and adding “2013” in its place in each place it appears and by removing “2006” and adding “2012” in its place, and by removing “On each December 1” and adding “On or before each December 1” in its place;

b. By revising paragraph (b);

c. In paragraph (c), by adding “the” before “rates”, by removing “381.5” and adding “381.5(c)(3)” in its place, and by adding “(30)” after “thirty”.

The revisions read as follows: