[Federal Register: April 26, 2001 (Volume 66, Number 81)]
[Proposed Rules]
[Page 20958-20962]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ap01-25]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Parts 252 and 257
[Docket No. RM 2001-3 CARP]
Cable and Satellite Statutory Licenses
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Copyright Office of the Library of Congress is clarifying
the requirements for the submission of claims for royalties under the
cable statutory license, 17 U.S.C. 111, and the satellite statutory
license, 17 U.S.C. 119.
DATES: Comments are due no later than May 21, 2001.
ADDRESSES: If sent by mail, an original and ten copies of comments
should be addressed to: Office of the Copyright General Counsel, P.O.
Box 70977, Southwest Station, Washington, DC 20024. If hand delivered,
an original and ten copies should be brought to: Office of the
Copyright General Counsel, James Madison Memorial Building, Room LM-
403, First and Independence Avenues, SE., Washington, DC 20559-6000.
FOR FURTHER INFORMATION CONTACT: David O. Carson, General Counsel or
[[Page 20959]]
William J. Roberts, Jr., Senior Attorney for Compulsory Licenses,
Copyright Arbitration Royalty Panel, P.O. Box 70977, Southwest Station,
Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 252-
3423.
SUPPLEMENTARY INFORMATION:
Background
At issue in this rulemaking proceeding are the filing requirements
for claiming royalty fees under the cable statutory license, 17 U.S.C.
111, and the satellite statutory license, 17 U.S.C. 119. The cable
statutory license permits cable systems to retransmit to their
subscribers the signals of television and radio broadcast stations upon
semi-annual submission of royalty payments to the Copyright Office.
Similarly, the satellite statutory license permits satellite carriers
to retransmit to their subscribers the signals of distant television
stations upon semi-annual submission of royalty payments to the
Copyright Office. The Copyright Office deposits the received cable and
satellite royalty fees in interest-bearing accounts with the U.S.
Treasury for later distribution to owners of the copyrighted broadcast
programming retransmitted by both cable and satellite. It is the
process for filing claims to these royalty fees that the Copyright
Office is reexamining in this Notice of Proposed Rulemaking (``NPRM'').
Both section 111 and section 119 describe in general terms the
process for filing claims to royalty fees. Section 111(d)(3) provides
that cable royalty fees shall ``be distributed to those among the
following copyright owners who claim that their works were the subject
of secondary transmissions by cable systems during the relevant
semiannual accounting period:
(A) Any such owner whose work was included in a secondary
transmission made by a cable system of a nonnetwork television
program in whole or in part beyond the local service area of the
primary transmitter; and
(B) Any such owner whose work was included in a secondary
transmission identified in a special statement of account deposited
under clause (1)(A); and
(C) Any such owner whose work was included in nonnetwork
programming consisting exclusively of aural signals carried by a
cable system in whole or in part beyond the local service area of
the primary transmitter of such programs.
17 U.S.C. 111(d)(3). Section 111(d)(4)(A) prescribes the annual process
for filing claims to cable royalties:
During the month of July in each year, every person claiming to
be entitled to statutory license fees for secondary transmissions
shall file a claim with the Librarian of Congress, in accordance
with requirements that the Librarian of Congress shall prescribe by
regulation. Notwithstanding any provisions of the antitrust laws,
for purposes of this clause any claimants may agree among themselves
as to the proportionate division of statutory licensing fees among
them, may lump their claims together and file them jointly or as a
single claim, or may designate a common agent to receive payment on
their behalf.
17 U.S.C. 111(d)(4)(A).
Though different in certain limited respects, the language
regarding royalty claims appearing in the section 119 license is
modeled after the section 111 language. Section 119(b)(3) prescribes
that satellite license royalty fees shall ``be distributed to those
copyright owners whose works were included in a secondary transmission
for private home viewing made by a satellite carrier during the
applicable 6-month accounting period and who file a claim with the
Librarian of Congress under paragraph (4).'' Paragraph (4)(A) provides
that:
During the month of July in each year, each person claiming to
be entitled to statutory license fees for secondary transmissions
for private home viewing shall file a claim with the Librarian of
Congress, in accordance with requirements that the Librarian of
Congress shall prescribe by regulation. For purposes of this
paragraph, any claimants may agree among themselves as to the
proportionate division of statutory license fees among them, may
lump their claims together and file them jointly or as a single
claim, or may designate a common agent to receive payment on their
behalf.
17 U.S.C. 119(b)(4)(A).
These are the statutory provisions governing cable and satellite
royalty claims. The Librarian of Congress has prescribed the filing
requirements for the submission of cable and satellite royalty claims.
Part 252 of 37 CFR establishes the filing requirements for cable
claims, while part 257 establishes the filing requirements for
satellite claims. Of relevance to this NPRM are the sections of those
parts that deal with the content of the claims filed.
There are no forms for filing a cable or satellite royalty
claim.\1\ There are, however, formats for submitting cable and
satellite claims. Section 252.3, 37 CFR, puts forward the required
content of a cable claim:
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\1\ The Copyright Royalty Tribunal eschewed issuing forms to
complete a cable or satellite royalty claim. When the Tribunal was
abolished in 1993, the Library of Congress subsumed the Tribunal's
rules, and continued the practice of not printing or issuing forms.
(a) Claims filed by parties claiming to be entitled to cable
compulsory license royalty fees shall include the following
information:
(1) The full legal name of the person or entity claiming royalty
fees.
(2) The telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route,
of the place of business of the person or entity.
(3) If the claim is a joint claim, a concise statement of the
authorization for the filing of the joint claim, and the name of
each claimant to the joint claim. For this purpose, a performing
rights society shall not be required to obtain from its members or
affiliates separate authorizations, apart from their standard
membership affiliate agreements, or to list the name of each of its
members or affiliates in the joint claim.
(4) For individual claims, a general statement of the nature of
the claimant's copyrighted works and identification of at least one
secondary transmission by a cable system of such works establishing
a basis for the claim. For joint claims, a general statement of the
nature of the joint claimants' copyrighted works and identification
of at least one secondary transmission of one of the joint
claimants' copyrighted works by a cable system establishing a basis
for the joint claim.
(b) Claims shall bear the original signature of the claimant or
of a duly authorized representative of the claimant.
37 CFR 252.3. The language of Sec. 257.3, governing the content of
satellite claims, is the same as Sec. 252.3.
History of Claim Requirements
Submission and resolution of cable, and later satellite, claims
originally vested solely in the Copyright Royalty Tribunal. It was the
Tribunal that first imposed the filing requirements for both licenses
and decided against issuing standardized forms. The Library of Congress
inherited the Tribunal's regulation upon its dissolution in 1993. See
58 FR 67690 (December 22, 1993). As discussed below, the Librarian has
made some changes to the content requirements for both cable and
satellite claims.
From 1978 to the end of 1993, the Copyright Royalty Tribunal
received and processed cable claims. Section 302.7(a) of the Tribunal's
regulation prescribed the content requirements for those claims:
During the month of July of each year, every person claiming to
be entitled to compulsory license fees for secondary transmissions
during the preceding calendar year shall file a claim to such fees
in the office of the Copyright Royalty Tribunal. No royalty fees
shall be distributed to copyright owners for secondary transmissions
during the specified period unless such owner has filed a claim to
such fees during the following calendar month of July. For purposes
of this clause claimants may file claims jointly or as a single
claim. Such filing shall include such information as the Copyright
Royalty Tribunal may require. A joint claim shall include a concise
statement of the authorization for the filing of the joint claim. A
performing rights society shall not
[[Page 20960]]
be required to obtain from its members or affiliates separate
authorizations, apart from their standard agreements, for purposes
of this filing and fee distribution.
37 CFR 302.7(a) (1993). Subsection (b) of that regulation required the
full name and address of the ``person or entity claiming compulsory
license fees,'' along with identification of at least one secondary
transmission of that person's or entity's program by a cable system.
The purpose of the Tribunal's regulations governing the filing of
cable claims is evident: identify who the claimants are to the royalty
pool and assure that they have asserted a prima facie claim for section
111 royalties. While the regulation states that ``every person claiming
to be entitled to compulsory license fees'' may file a claim, the
regulation further states that ``[n]o royalty fees shall be distributed
to copyright owners for secondary transmissions during the specified
period unless such owner has filed a claim to such fees during the
following calendar month of July.'' 37 CFR 302.7(a) (1993).
The Tribunal's regulations for the filing of satellite claims were
adopted soon after the passage of the Satellite Home Viewer Act of
1988, which enacted the section 119 license. Not surprisingly, the
Tribunal copied the same language it used for the required content of
cable claims. However, with respect to the submission of a joint claim,
the Tribunal's regulation permitted the filing of a joint claim but did
not require a concise statement of the authorization for the filing of
the joint claim. 37 CFR 309.2 (1993).
When the Tribunal's responsibilities were assumed by the Library,
the Library proposed changes to the regulations for filing cable and
satellite claims.\2\ Proposed new Sec. 252.2 read:
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\2\ The Library used the same language for the satellite royalty
claim regulations, 37 CFR 257.
During the month of July each year, any party claiming to be
entitled to cable compulsory license royalty fees for secondary
transmissions of one or more of its works during the preceding
calendar year shall file a claim to such fees with the Copyright
Office. No royalty fees shall be distributed to a party for
secondary transmissions during the specified period unless such
party has timely filed a claim to such fees. Claimants may file
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claims jointly or as a single claim.
59 FR 2550, 2564 (January 18, 1994). The Library did not state why it
changed slightly the wording of the former Tribunal's regulation but
did propose a new Sec. 252.3 which incorporated some of the same
principles. Section 252.3(a)(3) stated that ``[i]f the claim is a joint
claim, a concise statement of the authorization for the filing of the
joint claim [is required]. For this purpose a performing rights society
shall not be required to obtain from its members or affiliates separate
authorizations, apart from their standard agreements.'' 59 FR at 2565.
The Library also proposed Sec. 252.3(e) which stated that ``[a]ll
claimants filing a joint claim shall make available to the Copyright
Office, other claimants, and, where applicable, a Copyright Arbitration
Royalty Panel, a list of all individual claimants covered by the joint
claim.'' 59 FR at 2565.
One commentator to the NPRM, the Public Broadcasting Service
(``PBS''), raised concerns about Sec. 252.3(e), wondering whether, in
the case of a joint claim, each claimant was required to identify at
least one secondary transmission. The Library responded:
We acknowledge that Sec. 252.3 as proposed in the NPRM muddies
the waters for the filing of cable royalty claims, and of satellite
royalty claims as well. We are troubled, however, by changing what
had been a longstanding requirement at the Tribunal for obliging all
claimants to identify at least one secondary transmission of their
copyrighted works. While such requirement does undoubtably add to
the time and expense burdens of joint claimants such as PBS, it is
not without purpose. The law states plainly that cable compulsory
license royalties are only to be distributed to ``copyright owners
who claim that their works were the subject of secondary
transmissions by cable systems during the relevant semiannual
period.'' 17 U.S.C. 111(d)(3). To support such a claim, each
claimant may reasonably be asked to identify at least one secondary
transmission of his or her work, thus permitting the Copyright
Office to screen the claims and dismiss any claimants who are
clearly not eligible for royalty fees. The requirement will also
help to reduce time spent by a CARP determining which claimants have
a valid claim: if only one secondary transmission is identified for
one of the joint claimants, then it could not readily be determined
if the other claimants were even eligible for cable royalties.
In an effort to end this confusion we are deleting subsection
(e) with its requirement that joint claimants submit a list
identifying all the claimants. Instead, we are amending subsection
(a)(4) to require that each claimant to a joint claim, other than a
joint claim filed by a performing rights society on behalf of its
members or affiliates, must identify at least one secondary
transmission of his or her works.
59 FR 23964, 23979 (May 9, 1994).
A hail of protest followed the Library's change of the joint claim
rule. Several copyright owner groups, including Program Suppliers,
argued that a requirement that each joint claimant submit evidence of a
secondary transmission was unnecessary and expensive and was not a
practice observed by the CRT. Program Suppliers went further and argued
that the Copyright Office should refrain from any examination or
screening of claims as a regular practice, and leave such activities
and eligibility issues to the claimants to raise through motions either
to the Librarian or the CARPs. 59 FR 63025, 63027 (December 7, 1994).
On reconsideration, the Library dropped the requirement that each
joint claimant identify a secondary transmission. The Library noted
that ``[t]he amended rule, however, does require each joint claim to
identify all claimants participating in the joint claim. Those who are
not identified in the joint claim may not be added to it after the
filing period.'' Id. at 63028. \3\ The amended Sec. 252.3(a)(3) of the
rules, which is the current rule, reads in pertinent part: ``If the
claim is a joint claim, a concise statement of the authorization for
the filing of the joint claim, and the name of each claimant to the
joint claim [is required].'' Id. at 63042. Once again, the same
language was used for satellite claims. See 37 CFR 257.3.
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\3\ An exception to this requirement was made for performing
rights societies, such as ASCAP and BMI. That exception, however,
has no application in this rulemaking proceeding.
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The Need for Change
All in all, the process for filing cable and satellite claims has
worked well through the years. However, a recent cable distribution
proceeding has revealed certain infirmities that require attention.
Specifically, we are reconsidering who may file a cable or satellite
claim, and under what circumstances a joint claim may be filed.
Who may file a cable or satellite royalty claim? In most instances,
the claims received by the Copyright Office for cable and satellite
fees are single claims filed by a copyright owner who owns one or more
of the exclusive rights to a program (or more than one program) that
has been retransmitted by a cable system or satellite carrier and who
is claiming statutory royalties for the retransmission of that program.
Both the cable and the satellite licenses plainly state that it is the
copyright owner, and only the copyright owner, whose work has been
retransmitted by a cable system or satellite carrier who is eligible to
receive a distribution of royalty fees. 17 U.S.C. 111(d)(3) &
119(b)(3). Consequently, there seems to be no question that it is
acceptable for a copyright owner of a retransmitted work to submit the
claim for cable or satellite fees.
[[Page 20961]]
Is it permissible for someone other than the copyright owner of the
work identified in the claim to submit the claim? The Copyright Royalty
Tribunal's old rules could be read as permitting only copyright owners
and performing rights societies to file royalty claims. See 37 CFR
302.7(a) (1993) (``No royalties shall be distributed to copyright
owners * * * unless such owner has filed a claim to such fees during
the following calendar month of July,'' but performing rights societies
are not required to obtain separate authorizations from members or
affiliates). The Library's rules, however, state that ``any party''
claiming to be entitled to cable or satellite royalty fees may file a
claim. 37 CFR 252.2 & 257.2. ``Any party'' is quite broad and can
include holders of one or more exclusive rights granted by copyright,
as well as agents and representatives of copyright owners.
It has come to the attention of the Library, as part of a recent
cable royalty distribution proceeding, that the current standard for
allowing any party claiming the cable or satellite fees to file a claim
can produce unintended and undesirable results. See Order in Docket No.
2000-2 CARP CD 93-97 (June 22, 2000). Specifically, this language could
be interpreted by the public as allowing the filing of ``placeholder''
claims. A ``placeholder'' claim is a claim filed by a person who is not
a copyright owner, but who files a cable or satellite claim in his or
her own name, and then later asserts claims to royalties on behalf of
copyright owners whose works were retransmitted by a cable system or
satellite carrier. Placeholder claims are typically filed with the
Copyright Office in the form of single claims, but in substance they
are joint claims. Because the Copyright Office does not inquire as to
the identity of the person or entity filing a cable or satellite claim
(i.e. whether that person or entity is a copyright owner or another
party), we cannot determine whether the claim is a properly filed
single claim, or should be a joint claim identifying the appropriate
represented copyright owners.
Placeholder claims run afoul of the distribution process for cable
and satellite royalties. The law states that cable and satellite
royalties may only be distributed to copyright owners whose works were
retransmitted by either cable systems or satellite carriers. \4\
Indeed, the purpose of filing claims is to permit identification of all
copyright owners who are entitled to a distribution. \5\ Placeholder
claims make it impossible to identify the copyright owners entitled to
distribution. Further, both section 111 and section 119 plainly state
that claims for royalty fees must be filed in the month of July to be
eligible for distribution. Placeholder claims can circumvent this
requirement by allowing the filer to enter into representation
agreements with copyright owners after the July deadline, and
effectively secure a distribution for those owners who had not filed
timely claims. The Office has stated previously that it will not allow
joint claims to be amended to add new parties after the July deadline,
because this would thwart the purpose of the July filing requirement.
59 FR 63025, 63028 (December 7, 1994). Placeholder claims produce this
result, because the identity of the copyright owners represented by the
party filing the placeholder claim will not be known until Notices of
Intent to Participate in a CARP proceeding are filed. Presumably, the
party filing the placeholder claim could then sign representation
agreements with copyright owners who had not filed their own claims up
until that date.
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\4\ Both section 111 and section 119 permit copyright owners to
designate a common agent for payment of royalty fees. 17 U.S.C.
111(d)(4)(A) & 119(b)(4)(A). We do not interpret this language as
authorizing the filing of placeholder claims. Rather, this language,
``[claimants] may designate a common agent to receive payment on
their behalf,'' allows the Library to distribute royalties to
someone other than the copyright owner, provided that the owner has
previously informed the Copyright Office of the identify of the
common agent.
\5\ The one exception to this is allowing performing rights
societies, who literally represent thousands of copyright owners, to
file one claim on behalf of all their members and affiliates. As
discussed above, the Copyright Royalty Tribunal created this
exception, and the Copyright Office has adopted this practice.
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Proposed Rule and Comments
We wish to put an end to placeholder claims. To this end, we are
proposing to amend parts 252 and 257 of the rules to clarify that any
single claim filed with the Copyright Office (meaning a claim
containing only one person's or entity's name and address) must be
filed in the name of the copyright owner whose work was retransmitted
by a cable system or a satellite carrier. The copyright owner
submitting the single claim must provide the name, address and
signature of the contact person for the claim, who can be the copyright
owner, an employee of the copyright owner, an agent, or a duly
authorized representative.
Any claim which is filed for cable or satellite royalties that
purports to cover more than one copyright owner must be filed as a
joint claim. The joint claim must identify all copyright owners who are
participating in the joint claim. If a joint claim omits the name of a
copyright owner, and the joint claim is not amended to include the name
of the copyright owner prior to the expiration of the July filing
deadline, that copyright owner will not be considered to have filed a
timely claim.
We note that the practice of filing placeholder claims, in the
context of joint claims, can also occur. The Copyright Office may
receive, for example, a joint claim identifying three entities, only
two of which are actually copyright owners of works retransmitted by
cable or satellite. The third party is not a copyright holder, but
instead represents current, and possibly future, copyright owners. The
third party has filed a placeholder claim, which is inappropriate for
the reasons described above. Consequently, the Library is proposing to
amend its rules to prohibit the submission of placeholder claims for
both single and joint claims.
All interested parties are requested to file comments with the
Copyright Office in accordance with the information set forth in this
document. Unless persuaded otherwise by the commenters, the Office
intends to issue final rules in time for the submission of cable and
satellite royalty claims in July of this year.
Statutory Authority
The Library of Congress initiates this rulemaking proceeding under
its authority to establish regulations for the submission of cable
statutory license claims and satellite statutory license claims. 17
U.S.C. 111(d)(4)(A) & 119(b)(4)(A).
List of Subjects
37 CFR Part 252
Copyright, Cable television, Claims.
37 CFR Part 257
Copyright, Satellite television, Claims.
In consideration of the foregoing, it is proposed that parts 252
and 257 of 37 CFR Chapter II be amended as follows:
PART 252--FILING OF CLAIMS TO CABLE ROYALTY FEES
1. The authority citation for part 252 continues to read as
follows:
Authority: 17 U.S.C. 111(d)(4), 801, 803.
2. Section 252.3 is revised to read as follows:
Sec. 252.3 Content of claims.
(a) Single claim. A claim filed on behalf of a single copyright
owner of a work or works secondarily transmitted by a cable system
shall include the following information:
[[Page 20962]]
(1) The full legal name and address of the copyright owner entitled
to claim the royalty fees.
(2) A general statement of the nature of the copyright owner's work
or works, and identification of at least one secondary transmission by
a cable system of such work or works establishing a basis for the
claim.
(3) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person or entity filing the single claim.
(4) An original signature of the copyright owner or of a duly
authorized representative of the copyright owner.
(b) Joint claim. A claim filed on behalf of more than one copyright
owner whose works have been secondarily transmitted by a cable system
shall include the following information:
(1) A list including the full legal name and address of each
copyright owner to the joint claim entitled to claim royalty fees.
(2) A concise statement of the authorization for the person or
entity filing the joint claim. For this purpose, a performing rights
society shall not be required to obtain from its members or affiliates
separate authorizations, apart from their standard membership affiliate
agreements, or to list the name of each of its members or affiliates in
the joint claim as required by paragraph (b)(1) of this section.
(3) A general statement of the nature of the copyright owners'
works and identification of at least one secondary transmission of one
of the copyright owners' work or works by a cable system establishing a
basis for the joint claim and the identification of the copyright owner
of each work so identified.
(4) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person filing the joint claim.
(5) Original signatures of the copyright owners to the joint claim
or of a duly authorized representative or representatives of the
copyright owners.
(c) In the event that the legal name and/or address of the
copyright owner entitled to royalties or the person or entity filing
the claim changes after the filing of the claim, the Copyright Office
shall be notified of the change. If the good faith efforts of the
Copyright Office to contact the copyright owner or person or entity
filing the claim are frustrated because of failure to notify the Office
of a name and/or address change, the claim may be subject to dismissal.
PART 257--FILING OF CLAIMS TO SATELLITE CARRIER ROYALTY FEES
3. The authority citation for part 257 continues to read as
follows:
Authority: 17 U.S.C. 119(b)(4).
2. Section 257.3 is revised to read as follows:
Sec. 257.3 Content of claims.
(a) Single claim. A claim filed on behalf of a single copyright
owner of a work or works secondarily transmitted by a satellite carrier
shall include the following information:
(1) The full legal name and address of the copyright owner entitled
to claim the royalty fees.
(2) A general statement of the nature of the copyright owner's work
or works, and identification of at least one secondary transmission by
a satellite carrier of such work or works establishing a basis for the
claim.
(3) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person or entity filing the single claim.
(4) An original signature of the copyright owner or of a duly
authorized representative of the copyright owner.
(b) Joint claim. A claim filed on behalf of more than one copyright
owner whose works have been secondarily transmitted by a satellite
carrier shall include the following information:
(1) A list including the full legal name and address of each
copyright owner to the joint claim entitled to claim royalty fees.
(2) A concise statement of the authorization for the person or
entity filing the joint claim. For this purpose, a performing rights
society shall not be required to obtain from its members or affiliates
separate authorizations, apart from their standard membership affiliate
agreements, or to list the name of each of its members or affiliates in
the joint claim as required by paragraph (b)(1) of this section.
(3) A general statement of the nature of the copyright owners'
works, identification of at least one secondary transmission of one of
the copyright owners' work or works by a satellite carrier establishing
a basis for the joint claim, and the identification of the copyright
owner of each work so identified.
(4) The name, telephone number, facsimile number, if any, and full
address, including a specific number and street name or rural route, of
the person filing the joint claim.
(5) Original signatures of the copyright owners to the joint claim
or of a duly authorized representative or representatives of the
copyright owners.
(c) In the event that the legal name and/or address of the
copyright owner entitled to royalties or the person or entity filing
the claim changes after the filing of the claim, the Copyright Office
shall be notified of the change. If the good faith efforts of the
Copyright Office to contact the copyright owner or person or entity
filing the claim are frustrated because of failure to notify the Office
of a name and/or address change, the claim may be subject to dismissal.
Dated: April 23, 2001.
David O. Carson,
General Counsel.
[FR Doc. 01-10424 Filed 4-25-01; 8:45 am]
BILLING CODE 1410-33-P