Procedural Regulations for the Copyright Royalty Board, 30901-30916 [05-10553]

Agencies

• Copyright Royalty Board, Library of Congress
• Library of Congress
• Copyright Royalty Board

[Federal Register Volume 70, Number 103 (Tuesday, May 31, 2005)]
[Rules and Regulations]
[Pages 30901-30916]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-10553]


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LIBRARY OF CONGRESS

Copyright Royalty Board

37 CFR Chapter III

[Docket No. RM 2005-1]


Procedural Regulations for the Copyright Royalty Board

AGENCY: Copyright Royalty Board, Library of Congress.

ACTION: Procedural regulations with request for comments.

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SUMMARY: The Interim Chief Copyright Royalty Judge, on behalf of the 
Copyright Royalty Board of the Library of Congress, is issuing these 
regulations, governing the organization, administration, and procedures 
of the Board, for immediate use in proceedings that are subject to the 
jurisdiction of Copyright Royalty Judges. Public comments are sought on 
these regulations.

DATES: These regulations are effective on May 31, 2005.
    Written comments should be received no later than June 30, 2005. 
Reply comments should be received no later than July 21, 2005.

ADDRESSES: If hand delivered by a private party, an original and five 
copies of comments and reply comments must be brought to Room LM-401 of 
the James Madison Memorial Building, Monday through Friday, between 
8:30 a.m. and 5 p.m., and the envelope must be addressed as follows: 
Copyright Royalty Board, Library of Congress, James Madison Memorial 
Building, LM-401, 101 Independence Avenue, SE., Washington, DC 20559-
6000. If delivered by a commercial courier (excluding overnight 
delivery services such as Federal Express, United Parcel Service and 
similar overnight delivery services), an original and five copies of 
comments and reply comments must be delivered to the Congressional 
Courier Acceptance Site located at 2nd and D Street, NE., Monday 
through Friday, between 8:30 a.m. and 4 p.m., and the envelope must be 
addressed as follows: Copyright Royalty Board, Library of Congress, 
James Madison Memorial Building, LM-403, 101 Independence Avenue, SE., 
Washington, DC 20559-6000. If sent by mail (including overnight 
delivery using United States Postal Service Express Mail), an original 
and five copies of comments and reply comments must be addressed to: 
Copyright Royalty Board, P.O. Box 70977, Southwest Station, Washington, 
DC 20024-0977. Comments and reply comments may not be delivered by 
means of overnight delivery services such as Federal Express, United 
Parcel Service, etc., due to delays in processing receipt of such 
deliveries.

FOR FURTHER INFORMATION CONTACT: William J. Roberts, Jr., Senior 
Attorney, or Abioye E. Oyewole, CRB Program Specialist. Telephone (202) 
707-8380. Telefax: (202) 252-3423.

SUPPLEMENTARY INFORMATION: On November 30, 2004, the President signed 
into law the Copyright Royalty and Distribution Reform Act of 2004 (the 
``Reform Act''), Public Law 108-419, 118 Stat. 2341. This Act, which 
becomes effective on May 31, 2005, amends the Copyright Act, title 17 
of the United States Code with respect to the administration of the 
various statutory copyright licenses, phasing out the Copyright 
Arbitration Royalty Panel (``CARP'') system and replacing the 
arbitrators with three permanent Copyright Royalty Judges.\1\
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    \1\ Under the Act, the Copyright Royalty Judges will conduct 
proceedings to ``* * * make determinations and adjustments of 
reasonable terms and rates of royalty payments as provided in 
[Copyright Act] sections 112(e), 114, 115, 116, 118, 119 and 1004,'' 
``to make determinations concerning the adjustment of the copyright 
royalty rates under [Copyright Act] section 111,'' to authorize 
distributions under sections 111, 119, and 1007 of the Act, and 
``[t]o determine the status of a digital audio recording device or a 
digital audio interface device under sections 1002 and 1003, as 
provided in section 1010.'' See 17 U.S.C. 801(b).
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    Statutory licenses, sometimes referred to as ``compulsory'' 
licenses, enable a person to use copyrighted materials unilaterally, 
without contractual permission of the owners of the materials; so long 
as the user complies with applicable reporting and royalty payment 
obligations, such uses are not infringements of the owners' copyright. 
The first statutory license, created in 1909, allowed manufacturers of 
piano rolls to use copyrighted nondramatic musical works; the license 
fee was set by Congress in the statute. See, Recording Industry Ass'n 
v. Copyright Royalty Tribunal, 662 F.2d. 1 (D.C. Cir. 1981). In 1976, 
as part of major revisions to the Copyright Act, Congress greatly 
enlarged the regime for statutory licenses, reflecting the development 
of new communications industries and media. Henceforth, the rates for 
the statutory licenses would be adjusted by administrative decision. 
And, in those instances where the statutory license fees would be paid 
into royalty pools (as opposed to payments made directly to copyright 
owners), the 1976 amendments to the Copyright Act set up administrative 
proceedings to adjudicate distribution disputes. See, Christian 
Broadcasting Network, Inc. v. Copyright Royalty Tribunal, 720 F.2d 
1295, 1300 (D.C. Cir. 1983).
    Finding the right administrative structure to set rates and make 
distributions for the expanded array of statutory licenses has proven 
problematic. Initially, Congress established a stand-alone 
administrative agency--the former Copyright Royalty Tribunal--to 
perform these tasks. However, ``there was insufficient work to justify 
the existence of a permanent body * * * '' National Ass'n of 
Broadcasters v. Librarian of Congress, 146 F.3d 907, 912 (D.C. Cir. 
1998). Next, in 1993, Congress transferred the ratemaking and 
distribution functions to the Library of Congress. In cases where the 
parties could not reach agreement, the controversies would be referred 
to an ad hoc CARP. The CARP decisions were then reviewed by the 
Librarian for possible arbitrariness. Id. at 912-13. But the CARP 
system presented perceived problems of continuity, consistency, and 
expense.
    Under the Reform Act, three permanent Copyright Royalty Judges will 
be appointed by the Librarian of Congress to encourage settlements and, 
when necessary, resolve statutory license disputes. The expectation is 
that the Copyright Royalty Judges, appointed to staggered, six-year 
terms, will provide greater decisional stability, yielding the 
advantages of the former Copyright Royalty Tribunal, but with greater 
efficiency and expertise. On February 7, 2005, the Librarian of 
Congress appointed an interim Chief Copyright Royalty Judge and the 
Copyright Royalty Board (``CRB'' or ``Board'') was subsequently 
established within the Library of Congress to house the Copyright 
Royalty Judges.
    These regulations implement the requirement of section 803(b)(6)(A) 
of the Copyright Act \2\ that directs the Copyright Royalty Judges to 
``issue regulations to govern [their] proceedings'' within 120 days of 
their

[[Page 30902]]

appointment.\3\ Congress did not intend for these regulations to be 
issued as ``proposed rules'' or ``interim regulations.'' \4\ Hence, 
unless amended, these regulations will be used in the copyright 
statutory license proceedings conducted by the Copyright Royalty Judges 
under the Reform Act.\5\ Nevertheless, comments are sought at this time 
to identify the need for prompt correction of any errors and to inform 
the incoming, permanent Copyright Royalty Judges as to any need for 
further rulemaking proceedings.
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    \2\ Unless otherwise noted, all references are to Chapter 8 of 
title 17 of the United States Code as in effect on May 31, 2005.
    \3\ Subsection (a) of section 6 of the Reform Act, the 
``effective date and transition provisions,'' required the 
appointment of one or more interim Copyright Royalty Judges, within 
90 days of enactment, to perform the functions of the permanent 
Copyright Royalty Judges until they are appointed.
    \4\ See Copyright Act section 803(b)(6)(B), directing that the 
CARP regulations will serve as the ``interim regulations'' for the 
Copyright Royalty Judges until the regulations under subparagraph 
(A) are adopted.
    \5\ Ongoing proceedings that are being conducted under the CARP 
system regulations, 37 CFR Part 251, will continue to use those 
regulations. Similarly, the existing substantive provisions for 
compulsory license rates and distributions, 37 CFR Parts 253-256, 
258, and 260-262, will remain in effect, as codified in Chapter II, 
until superceded by the decisions and regulations of the Copyright 
Royalty Judges pursuant to the Reform Act.
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    The Reform Act prescribes, to an exceptionally detailed degree, the 
procedures that must be adopted for use in proceedings before the 
Copyright Royalty Judges. These regulations track those statutory 
requirements. Also, these regulations are often drawn from the 
procedural regulations used by the Copyright Office for the conduct of 
CARP proceedings. However, interested persons are encouraged to 
carefully scrutinize these regulations, as these CRB regulations do 
depart from the CARP procedural regulations in a number of instances. 
Comments are sought especially to identify any possible, inadvertent 
inconsistencies between these regulations and the requirements of the 
Copyright Act. Any comments that would bring to the Board's attention 
areas where further procedural guidance would be helpful, or where 
these regulations have created unnecessary burdens, would be most 
welcome.
    The following items may be of particular interest:
    Reservation of Copyright Act Legal Issues to the Register of 
Copyrights. A distinctive feature of the adjudicative regime set up by 
the Reform Act is its formal division of fact and copyright law 
determinations.
    Under the Reform Act, Copyright Royalty Judges are guaranteed 
``full independence in making determinations concerning adjustments and 
determinations of copyright royalty rates and terms, the distribution 
of copyright royalties, the acceptance or rejection of royalty claims, 
rate adjustment petitions, and petitions to participate, and in issuing 
other rulings under this title * * * '' 17 U.S.C. 802(f)(1)(A)(i). 
These findings, determinations, and rulings of the Copyright Royalty 
Judges are not reviewable, at the administrative level, by any other 
official. The final determinations of the Copyright Royalty Judges will 
go directly to the court for judicial review, when sought. 17 U.S.C. 
803(d).\6\
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    \6\ This ``full[y] independen[t]'' role is very different from 
that of a typical, federal administrative law judge (ALJ) rendering 
recommended decisions for an agency. Compare, e.g., 46 CFR 
502.227(a)(6) (Federal Maritime Commission retains plenary authority 
to override decision of the ALJ); 30 U.S.C. 823(d)(2)(A)(ii)((I) 
(ALJ's unsupported factual decision is reversible by Federal Mine 
Safety and Health Review Commission); 5 CFR 2423.41(b) (Federal 
Labor Relations Authority has unrestricted authority to reject ALJ's 
decision ``[w]henever exceptions are filed''; 10 CFR 2.341 (Nuclear 
Regulatory Commission retains discretion to review ALJ decisions for 
clear error); Model Adjudication Rules, Administrative Conference of 
the U.S., Rule 410, 11 T.M. Cooley L. Rev. 75 (1994) (recommending 
retention of plenary authority to review factual findings).
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    At the same time, the Reform Act reserves to the Register of 
Copyrights control over Copyright Act interpretive policy. The Register 
``may review for legal error the resolution by the Copyright Royalty 
Judges of a material question of substantive law under this title that 
underlies or is contained in a final determination of the Copyright 
Royalty Judges.'' 17 U.S.C. 802(f)(1)(D). The statute also provides for 
referrals of significant Copyright Act interpretive issues to the 
Register, prior to a final determination, during the course of ongoing 
Copyright Royalty Judge proceedings. Referral of a ``material question 
of substantive law * * * '' is discretionary, something one or more of 
the presiding Copyright Royalty Judges ``may request * * * '' 17 U.S.C. 
802(f)(1)(A) (emphasis added), on their motion or on the motion of a 
participant in a proceeding. But, if the material question of 
substantive law is a ``novel'' one, ``the Copyright Royalty Judges 
shall request a decision of the Register of Copyrights.'' 17 U.S.C. 
802(f)(1)(B) (emphasis added). These regulations provide procedures for 
the discretionary and mandatory interlocutory referrals.
    The Reform Act anticipates possible instances where a determination 
of the Copyright Royalty Judges is perceived by the Register of 
Copyrights to be inconsistent with the Register's interpretation of the 
Copyright Act, but their decision has become final and is judicially 
reviewable. 17 U.S.C. 802(f)(1)(D). This would be a most undesirable 
situation for all concerned. These procedural regulations seek to 
minimize the likelihood of such an event by attempting to identify 
referable ``material questions'' at the earliest possible stage of the 
proceedings and by encouraging orderly interlocutory referrals. Public 
comments suggesting how these regulations might further reduce the 
likelihood of post-decision disputes are particularly invited.
    More generally, the regulations implementing section 802(f) are 
intended to insure that the manifest, plenary authority of the Register 
of Copyrights to control interpretations of the Copyright Act is fully 
honored, while averting avoidable interruptions and delays in ongoing 
proceedings. Comments are sought on any possible refinements to these 
regulations that would better meet these goals.
    Petitions to Participate.
    Content. The Copyright Arbitration Royalty Panel regulations do not 
specify the content of a notice of intent to participate. It has been 
the practice of the Copyright Office to require, in the request for 
notices of intent to participate, the claimant's full name, address, 
telephone number, facsimile number (if any), and e-mail address (if 
any); the phase or phases of the proceeding that were involved, if 
applicable; \7\ and a statement of intent to fully participate. See, 
Ascertainment of Controversy for the 2002 Cable Royalty Funds, 69 FR 
44548, 44549 (July 26, 2004). The Board is codifying this de minimis 
information requirement in its regulations.
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    \7\ For an explanation of the two phases in cable and satellite 
royalty pool distribution proceedings, see, e.g., Distribution of 
1998 and 1999 Cable Royalty Funds, 69 FR 3606, 3607 (January 26, 
2004).
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    In addition, the Copyright Act now stipulates that a person must 
have a ``significant interest'' in order to participate ``in the 
proceeding.'' 17 U.S.C. 803(b)(2)(C). The Act does not define a 
``significant interest''; it is a term of art that had been used in the 
CARP program to screen petitions. See, 37 CFR 251.62. In past practice, 
the Copyright Office has required a putative participant to show some 
financial stake in the outcome of the proceeding in order to present a 
``significant interest.'' The regulations adopted herewith, Sec.  
351.1(b)(1), simply carry forward the statutory language, without 
further elaboration. Comments are invited on whether the Board's 
regulations should be amended to include more specific guidelines on 
``significant interest.''

[[Page 30903]]

    Late Petitions. Section 351.1(d) of the regulations indicates that 
the Copyright Royalty Judges may accept late-filed petitions to 
participate in a proceeding, ``for substantial good cause shown, and if 
there is no prejudice to the participants that have already filed 
petitions * * *.'' This language is essentially lifted from the Reform 
Act, 17 U.S.C. 803(b)(1)(A)(ii). It is acknowledged that this statutory 
language poses some ambiguities. Presumably, ``substantial good cause'' 
requires a stronger showing than mere ``good cause'' and, in context, 
``prejudice'' probably relates to some impairment of a party's ability 
to proceed, not merely the diminution of that party's potential 
recovery.
    The regulations, however, do not further flesh out these terms, 
leaving resolution of the potential issues they raise to be resolved by 
the Copyright Royalty Board in future proceedings. Comments are invited 
as to whether some further guidance could or should be placed into the 
regulatory language.
    Filing Fees. Under section 803(b)(2)(A) of the Copyright Act, a 
party seeking to participate in a royalty fund distribution proceeding 
must pay a filing fee of $150. That filing fee requirement is waived, 
however, if ``the contested amount of the claim is $10,000 or less * * 
*.'' Id., section 803(b)(4)(A). While the intent of this provision is 
quite clear, how it would be implemented is not. A claimant to a 
royalty pool does not necessarily know the value of the claim when it 
is submitted and cannot know the ``contested amount'' until competing 
claims are weighed, after discovery and voluntary negotiations. 
Accordingly, the regulations will ask the claimants to withhold their 
fee payments if they believe the ``contested amount'' of their claim 
will be $10,000 or less. Under the regulations, Sec.  351.1(b)(4), the 
Copyright Royalty Board will require payment of the filing fee at such 
time it appears that the ``contested amount of the claim'' will exceed 
$10,000. Persons who believe that they are possibly going to be 
entitled to a filing fee waiver should therefore delay submission of 
the $150 filing fees. It is not practicable for the Board to refund an 
erroneously paid fee.
    Paper Proceedings. A problem of copyright statutory license program 
administration has been to provide access to the adjudicative process 
to persons with relatively small copyright royalty claims while, at the 
same time, not allowing small claimants to unfairly exploit settlement 
leverage by unreasonably prolonging proceedings. An important provision 
of the Reform Act, addressing this problem, is section 803(b)(5), 
directing the Copyright Royalty Judges to resolve some controversies 
solely on a written record, without live testimony, in cases where 
there ``is no genuine issue of material fact, there is no need for 
evidentiary hearings, and all participants in the proceeding agree in 
writing to the procedure * * *.'' 17 U.S.C. 803(b)(5)(A).
    The statute also gives the Copyright Royalty Judges broad 
discretion to impose paper proceedings ``under such other circumstances 
as the Copyright Royalty Judges consider appropriate.'' 17 U.S.C. 
803(b)(5)(B). This provision would apply in situations where not all of 
the parties accede to paper proceedings, but where live hearings would 
not aid the Judges in their deliberations and any legal requirements 
could be met with paper proceedings. Cf., Mathews v. Eldridge, 424 U.S. 
319 (1976); United States v. Florida E. Coast Ry. Co., 410 U.S. 224, 
239 (1973); U.S. ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 
645, 652 (D.C. Cir. 1994). It is difficult to predict, in the abstract, 
exactly what sort of controversies will be amenable to involuntary 
paper proceedings. These regulations, at Sec.  351.3(c)(1), require a 
party seeking an unconsented paper proceeding to show that such 
proceedings would be legally permissible. Comments are sought as to 
whether the regulations might go further in specifying the situations 
where paper proceedings may be imposed upon an unwilling participant.
    Discovery in Distribution Proceedings. Section 803(b)(6)(C)(viii) 
of the Copyright Act requires the Board to apply ``[t]he rules and 
practices'' used by the Copyright Office for CARP proceedings 
``relating to discovery in proceedings * * * to determine the 
distribution of royalty fees * * *.'' In the context of other Reform 
Act procedural requirements, ``rules and practices'' appears to be a 
reference to the limited discovery in distribution cases set forth at 
37 CFR 251.45(c). Accordingly, in contrast to the depositions and 
interrogatories permitted in rate disputes (Sec.  351.5(c)), discovery 
in distribution cases (Sec.  351.6) will allow only for production of 
documents underlying written direct and rebuttal statements. The 45-day 
period for discovery set forth in 37 CFR 251.45(b) will also apply in 
these cases.
    Additional Discovery During Hearings. Section 351.12, infra, is 
intended to implement section 803(b)(6)(C)(vi) of the Copyright Act, 
based on the assumption that this provision is designed to allow 
certain requests for supplementary reports or analyses during the 
course of an evidentiary hearing. Comments are sought on the validity 
of that assumption.
    It should be noted that the regulations include, in Sec.  
351.12(a), a heightened threshold for invocation of this type of 
discovery, calling for a showing ``that, absent the discovery sought, 
[the Board's] ability to achieve a just resolution of the proceeding 
would be substantially impaired.'' This standard reflects the concern 
that motions for additional discovery during the proceedings can be 
costly and disruptive, if misused as a litigation tactic. Comments on 
this concern are solicited.
    Extension Policy; Date Computation. Board proceedings will be 
conducted with limited staff resources, under schedules that are driven 
by statutory deadlines. These proceedings will often involve multiple 
parties that will be laboring under the assumption that other parties 
will comply with procedural timeliness requirements. Accordingly, the 
new Board regulations include a provision, Sec.  350.5(a), that 
specifies the required content of an extension motion. It is not 
intended to create an unnecessarily restrictive or harsh extension 
policy. But extensions must be justified and should not be taken for 
granted.
    Section 350.5(b) explains how due dates should be computed. The 
methodology is adopted from Rule 26, Federal Rules of Appellate 
Procedure.
    Claims to Funds in Royalty Pools. Eligibility to receive copyright 
royalties paid by cable systems, satellite carriers, and manufacturers 
and importers of digital audio recording devices and media (``DART'') 
is contingent upon the submission of a timely filed claim. See, 17 
U.S.C. 111, 119, and 1007. Cable and satellite claims must be filed 
during the month of July; DART claims must be filed during the months 
of January and February. Under the Reform Act, the next claims filings 
will be made under the authority of the Copyright Royalty Judges ``[t]o 
accept or reject royalty claims * * * on the basis of timeliness.'' 17 
U.S.C. 801(b)(4).
    Under Copyright Office regulations in effect prior to 2002, claims 
to these royalty pools were timely filed if they were physically 
delivered to the Copyright Office or mailed (as proven by a United 
States Postal Service postmark) within the applicable month. The 
regulations adopted for the Copyright Royalty Board contain this 
standard, too. However, the Board is discontinuing an uncodified 
practice of the Copyright Office. It has been the Copyright Office 
policy to consider a

[[Page 30904]]

claim that was deposited with the United States Postal Service to be 
timely filed, in July, if it was physically received in the agency's 
mailroom on August 1.\8\ This practice has created additional, 
unnecessary administrative burdens. Future claimants are advised that 
the Board will not continue this ``August-1-receipt'' practice, but 
will adhere to the strict terms of the regulations regarding filing by 
United States mail.
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    \8\ It was concluded that physical receipt of mail on August 1 
provided an ``absolute assurance'' that the claim had been mailed in 
the United States (and therefore filed) in July. See, MGM Studios, 
Inc. v. Peters, 309 F. Supp. 2d 48 (D.D.C., 2004), and Universal 
City Studios, LLLP v. Peters, 308 F. Supp. 2d 1, affirmed sub nom. 
Universal City Studios, LLLP v. Peters, D.C. Cir. Nos. 04-5138 & 04-
5142 (April 8, 2005).
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    The Board is also codifying herewith provisions allowing for the 
filing of claims electronically. In response to disruptions and delays 
in mail service, triggered by the anthrax episodes in late 2001 and the 
subsequent relocation of mail deliveries to a remote site for 
screening, the Copyright Office has allowed additional methods for 
filing, accepting claims by e-mail submission or online submission and, 
in the case of DART claims, filing by facsimile. The history of these 
adjustments is detailed in the Notice of Proposed Rulemaking published 
on October 18, 2004, 69 FR 61325, where the Copyright Office proposed 
permanent changes to the CARP claims filing rules and invited public 
comments. As proposed by the Copyright Office, the amended filing 
regulations would provide, in addition to hand delivery and mail 
filing, a permanent electronic filing system. This electronic filing 
system would be similar to the system used since 2003.
    The Copyright Office's proposed regulations also included a 
requirement that each claim would utilize a personal identification 
number (``PIN'') as a proxy for the original signature requirement for 
a hand-delivered or mailed claim. 69 FR 61326-27. Comments on the 
proposed filing rules, submitted jointly by representatives of all of 
the Phase I copyright owner claimant groups that had been previously 
allocated royalties in cable and satellite proceedings (``Claimant 
Groups''),\9\ were largely directed against the adoption of this 
proposed PIN requirement. The Claimant Groups averred that the use of a 
PIN would not prevent fraud. Their comments noted that, in the single 
criminal proceeding arising from the submission of fraudulent royalty 
claims (U.S. v. Galaz, D.D.C. Crim. No. 02-230), the crime would not 
necessarily have been prevented by the proposed PIN requirement. The 
Claimant Groups also expressed concerns that the proposed PIN 
requirement would add burdens and cause logistical problems, especially 
for corporate claimants where ``the individuals filing for particular 
copyright owners may change over time'' and their PINs, personal to 
those individuals, frequently would not correspond to the actual 
copyright owners. Claimant Groups joint comments, at 5. The Claimant 
Groups proposed, as an alternative to the PIN proposal, use of an 
affirmation or certification at the end of the online form that would 
serve as a ratification of the claim. Id., at 7-9 (discussing the 
Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 
7001, et seq.). The Claimant Groups pointed out that their alternative 
proposal would be similar to the verifications used for trademark 
registrations at the U.S. Patent and Trademark Office, while the 
Copyright Office's PIN proposal was similar to a proposal that was 
rejected by the Federal Communications Commission. Id., at 9-12 (citing 
In the Matter of Electronic Filing of Documents in Rulemaking 
Proceedings, Report and Order, 13 FCCRvd 11322 (1998)).
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    \9\ The Claimant Groups' joint comments were signed by 
representatives of the National Association of Broadcasters and the 
Broadcaster Claimant Group; the Program Suppliers; the Joint Sports 
Claimants; the Public Television Claimants; Broadcast Music Inc. 
(BMI); the American Society of Composers, Authors and Publishers 
(ASCAP); SESAC, Inc.; the Devotional Claimants; National Public 
Radio; and the Canadian Claimants.
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    In view of the arguments set forth in the Claimant Groups comments, 
and in the absence of any support for the PIN proposal, that proposal 
will not be adopted in the Board's regulations promulgated with this 
notice. The Board will rely upon the verification that accompanies each 
claim and the potential of criminal sanctions for false claims.
    In making this decision, it should be emphasized that, while the 
copyright owners represented stand to lose the most from any claims 
fraud that may occur, the officials charged with administering the 
statutory license royalty pools have a profound sense of responsibility 
to do whatever reasonably might be done by the government to avoid 
fraud in the distribution of the royalty pools. Comment is sought as to 
any further steps that might be taken to discourage fraud or other 
mischief in the claims submission process.\10\
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    \10\ It should be noted that any suggestions made regarding the 
filing of claims will not be implemented for the filing of cable and 
satellite claims in July 2005. Such comments will be considered, and 
if accepted, will be implemented at a later date.
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    The Claimant Groups also asked (comments at 16-17) the Copyright 
Office to regard claims postmarked in July in foreign countries as 
timely, regardless of the date received. This proposition has 
previously been rejected by the Copyright Office, in its rulemaking 
proceedings for the adoption of CARP procedures, for cogent reasons. 
See, 59 FR 63025, 63039 (December 7, 1994). If a claim is not received 
in July, the Board will accept only a United States Postal Service 
postmark with a July date for the same reasons as those expressed by 
the Copyright Office in that decision. To avoid difficulties, claimants 
ought to submit their claims as early in July as possible.
    The forms to be used by the parties in making claims to the royalty 
pools will reflect several other suggestions presented in the comments: 
The forms will not have a ``filing status'' line. Cf., Claimant Groups 
comments, at 15-16. Paragraph 3 of the forms for claims to share in 
cable and satellite royalty pools will state that music performing 
rights organizations do not have to list the names of their members and 
affiliates and paragraph 5 will include a line for listing (a) the name 
of a copyrighted musical work performed on the identified television 
program, (b) the name of the writer, and (c) the name of the publisher. 
Cf., separate ASCAP/BMI comments.
    Finally, the Copyright Office's proposed rules included a couple of 
technical items on which no comments were received: a requirement that, 
with respect to electronic claims filings, the filled-in forms must be 
received at the government's server by 5 p.m. on the last day of the 
applicable statutory filing period and the elimination of filing by 
facsimile for DART claims. The Board is adopting those two proposals.

List of Subjects

37 CFR Part 301

    Copyright, Organization and functions (government agencies).

37 CFR Part 302

    Copyright, Freedom of information, Reporting and recordkeeping 
requirements.

37 CFR Part 350

    Administrative practice and procedure, Copyright, Lawyers.

37 CFR Part 351

    Administrative practice and procedure, Copyright.

[[Page 30905]]

37 CFR Part 352

    Administrative practice and procedure, Copyright.

37 CFR Part 353

    Administrative practice and procedure, Copyright.

37 CFR Part 354

    Administrative practice and procedure, Copyright.

37 CFR Part 360

    Cable television, Claims, Copyright, Recordings, Satellites, 
Television.

Authority and Issuance

0
For the reasons set forth in the preamble, the Library of Congress 
establishes a new Chapter III in Title 37 of the Code of Federal 
Regulations to read as follows:

CHAPTER III--COPYRIGHT ROYALTY BOARD, LIBRARY OF CONGRESS

SUBCHAPTER A--GENERAL PROVISIONS

Part

301--Organization
302--Public access to records

SUBCHAPTER B--COPYRIGHT ROYALTY BOARD RULES AND PROCEDURES

350--General administrative provisions
351--Proceedings
352--Determinations
353--Rehearing
354--Submissions to the Register of Copyrights
360--Filing of claims to royalty fees collected under compulsory 
license

SUBCHAPTER A--GENERAL PROVISIONS

PART 301--ORGANIZATION

Sec.
301.1 Copyright Royalty Board.
301.2 Official addresses.
301.3 Office location.

    Authority: 17 U.S.C. 801.


Sec.  301.1  Copyright Royalty Board.

    The Copyright Royalty Board is the institutional entity in the 
Library of Congress that will house the Copyright Royalty Judges, 
appointed pursuant to 17 U.S.C. 801(a), and their staff.


Sec.  301.2  Official addresses.

    All claims, pleadings, and general correspondence intended for the 
Copyright Royalty Board must be addressed as follows:
    (a) If sent by mail (including overnight delivery using United 
States Postal Service Express Mail), the envelope should be addressed 
to: Copyright Royalty Board, P.O. Box 70977, Southwest Station, 
Washington, DC 20024-0977.
    (b) If hand delivered by a private party, the envelope must be 
brought to Room LM-401 of the James Madison Memorial Building, Monday 
through Friday, between 8:30 a.m. and 5 p.m., and be addressed as 
follows: Copyright Royalty Board, Library of Congress, James Madison 
Memorial Building, LM-401, 101 Independence Avenue, SE., Washington, DC 
20559-6000.
    (c) If hand delivered by a commercial courier (excluding Federal 
Express, United Parcel Service and similar courier services), the 
envelope must be delivered to the Congressional Courier Acceptance Site 
(CCAS) located at Second and D Street, NE., Washington, DC, Monday 
through Friday, between 8:30 a.m. and 4 p.m., and be addressed as 
follows: Copyright Royalty Board, Library of Congress, James Madison 
Memorial Building, LM-403, 101 Independence Avenue, SE., Washington, 
DC.
    (d) Correspondence and filings for the Copyright Royalty Board may 
not be delivered by means of overnight delivery services such as 
Federal Express, United Parcel Service, etc., due to delays in 
processing receipt of such deliveries.


Sec.  301.3  Office location.

    The offices of the Copyright Royalty Board are located in the 
Library of Congress, James Madison Memorial Building, Room LM-403, 101 
Independence Avenue, S.E., Washington, D.C. 20559-6000.

PART 302--PUBLIC ACCESS TO RECORDS

Sec.
302.1 Public records.
302.2 Public access.

    Authority: 5 U.S.C. 552.


Sec.  302.1  Public records.

    (a) All final determinations of the Copyright Royalty Board, and 
the relevant facts and reasons for those determinations, will be 
published in the Federal Register.
    (b) Records of proceedings before the Board will be available for 
public inspection at the Copyright Royalty Board offices, to the extent 
that disclosure is required under the Freedom of Information Act, 5 
U.S.C. 552.


Sec.  302.2  Public access.

    (a) Location. The records of the Copyright Royalty Board will be 
located at the address provided in Sec.  301.3 of this chapter.
    (b) Requests. Requests for information or access to records must be 
directed to the Copyright Royalty Board. No requests for information or 
access to records shall be directed to or accepted by a Copyright 
Royalty Judge.
    (c) Fees. For services rendered in connection with document 
location and reproduction, the following fees shall apply:
    (1) For photocopies made by Copyright Royalty Board staff, the 
charge will be 40 cents per page copied.
    (2) For the time Copyright Royalty Board staff spends in fulfilling 
a search request or providing other services, the charge will be $65 
per hour or fraction thereof.

SUBCHAPTER B--COPYRIGHT ROYALTY BOARD RULES AND PROCEDURES

PART 350--GENERAL ADMINISTRATIVE PROVISIONS

Sec.
350.1 Scope.
350.2 Representation.
350.3 Caption required.
350.4 Filing and service.
350.5 Time.
350.6 Construction and waiver.

    Authority: 17 U.S.C. 803.


Sec.  350.1  Scope.

    This subchapter governs procedures generally applicable to 
proceedings before the Copyright Royalty Board in making determinations 
and adjustments pursuant to the Copyright Act, 17 U.S.C. 801(b).


Sec.  350.2  Representation.

    Parties in proceedings before the Board may represent themselves or 
be represented by an attorney. The appearance of an attorney on behalf 
of any party constitutes a representation that the attorney is a member 
of the bar, in one or more states, in good standing.


Sec.  350.3  Caption required.

    All pleadings and documents filed in a proceeding before the 
Copyright Royalty Board must be identified in a caption that identifies 
the proceeding by caption and docket number.


Sec.  350.4  Filing and service.

    (a) Filing of pleadings. The submitting party shall deliver an 
original and five copies of all filings to the Copyright Royalty Board 
in accordance with the provisions set forth in Sec.  301.2 of this 
chapter. In no case shall a party tender any document by facsimile 
transmission.
    (b) Exhibits. All exhibits must be included with the pleadings they 
support. In the case of exhibits whose bulk or whose cost of 
reproduction would unnecessarily encumber the record or burden the 
party, the Board may reduce the number of required copies.

[[Page 30906]]

    (c) English language translations. Each submission that is in a 
language other than English shall be accompanied by an English-language 
translation, duly verified under oath to be a true translation. Any 
other party to the proceeding may, in response, submit its own English-
language translation, similarly verified.
    (d) Affidavits. The testimony of each witness shall be accompanied 
by an affidavit or a declaration made pursuant to 28 U.S.C. 1746 
supporting the testimony.
    (e) Subscription and verification. (1) Parties represented by 
counsel. The original of all documents filed by any party represented 
by counsel shall be signed by at least one attorney of record and shall 
list the attorney's address and telephone number. Submissions signed by 
an attorney for a party need not be verified or accompanied by an 
affidavit. The signature of an attorney constitutes certification that, 
to the best of his or her knowledge and belief, there is good ground to 
support the document, and that it has not been interposed for purposes 
of delay.
    (2) Parties representing themselves. The original of all documents 
filed by a party not represented by counsel shall be signed by that 
party and list that party's address and telephone number. The signature 
will constitute the party's certification that, to the best of his or 
her knowledge and belief, there is good ground to support the document, 
and that it has not been interposed for purposes of delay.
    (3) Verification. The original of a document that is not signed, or 
is signed with the intent to defeat the purpose of this section, may be 
stricken as sham and false, and the matter shall proceed as though the 
document had not been filed.
    (f) Oppositions and replies. Oppositions to motions shall be filed 
within seven business days of the filing of the motion, and replies to 
oppositions shall be filed within five business days of the filing of 
the opposition.
    (g) Service list. The Copyright Royalty Board will compile and 
distribute, to those parties who have filed a petition to participate 
that has been accepted by the Board, the official service list of the 
proceeding. In all filings, a copy shall be served upon counsel of all 
other parties identified in the service list, or, if the party is 
unrepresented by counsel, upon the party itself. Proof of service shall 
accompany the filing. Parties shall notify the Board and all parties of 
any change in the name or address to which service shall be made.
    (h) Service method. During the course of a proceeding, each party 
must serve all motions, objections, oppositions, and replies on the 
other parties or their counsel by means no slower than overnight 
express mail on the same day the pleading is filed. If a party is 
willing to accept service of a document electronically (i.e., by e-
mail), followed by a hard copy, first-class mail of the hard copy may 
be used in lieu of express mail or other expedited delivery.


Sec.  350.5  Time.

    (a) Computation. To compute the due date for filing and serving any 
document or performing any other act directed by an order of the 
Copyright Royalty Board or the Board's rules:
    (1) Exclude the day of the act, event, or default that begins the 
period.
    (2) Exclude intermediate Saturdays, Sundays, and legal holidays 
when the period is less than 11 days, unless stated in calendar days.
    (3) Include the last day of the period unless it is a Saturday, 
Sunday, legal holiday, or a day on which the weather or other 
conditions render the Board's office inaccessible.
    (4) As used in this rule, ``legal holiday'' means New Year's Day, 
Martin Luther King, Jr.'s Birthday, Presidents' Day, Memorial Day, 
Independence Day, Labor Day, Columbus Day, Veterans' Day, Thanksgiving 
Day, Christmas Day, and any other day declared a holiday by the 
President or the Congress.
    (b) Extensions. A party seeking an extension may do so by written 
motion. An extension motion must state:
    (1) The date on which the action or submission is due;
    (2) The length of the extension sought;
    (3) The date on which the action or submission would be due if the 
extension were allowed;
    (4) The reason or reasons why the delay is unavoidable; and
    (5) The justification for the amount of additional time being 
sought.


Sec.  350.6  Construction and waiver.

    The regulations of the Copyright Royalty Board are intended to 
provide efficient and just administrative proceedings and will be 
construed to advance these purposes. For purposes of an individual 
proceeding, the provisions of this subchapter may be suspended or 
waived, in whole or in part, upon a showing of good cause, to the 
extent allowable by law.

PART 351--PROCEEDINGS

Sec.
351.1 Initiation of proceedings.
351.2 Voluntary negotiation period; settlement.
351.3 Controversy and further proceedings.
351.4 Written direct statements.
351.5 Discovery in royalty rate proceedings.
351.6 Discovery in distribution proceedings.
351.7 Settlement conference.
351.8 Pre-hearing conference.
351.9 Conduct of hearings.
351.10 Evidence.
351.11 Rebuttal proceedings.
351.12 Requests for additional discovery during the hearing in 
royalty rate proceedings.
351.13 Closing the record.
351.14 Transcript and record.
351.15 Proposed findings of fact and conclusion of law.

    Authority: 17 U.S.C. 803, 805.


Sec.  351.1  Initiation of proceedings.

    (a) Notice of commencement; solicitation of petitions to 
participate. All proceedings before the Copyright Royalty Board to make 
determinations and adjustments of reasonable terms and rates of royalty 
payments, and to authorize the distribution of royalty fees, shall be 
initiated by publication in the Federal Register of a notice of the 
initiation of proceedings calling for the filing of petitions to 
participate in the proceeding.
    (b) Petitions to participate. (1) Royalty rate proceedings. (i) 
Single petition. Each petition to participate filed in a royalty rate 
proceeding must include:
    (A) The petitioner's full name, address, telephone number, 
facsimile number (if any), and e-mail address (if any);
    (B) A description of the petitioner's significant interest in the 
subject matter of the proceeding; and
    (C) A statement of the petitioner's intention to fully participate 
in the royalty rate proceeding;
    (ii) Joint petition. Petitioners with similar interests may, in 
lieu of filing individual petitions, file a single petition. Each joint 
petition must include:
    (A) The full name, address, telephone number, facsimile number (if 
any), and e-mail address (if any) of the person filing the petition;
    (B) A list identifying all participants to the joint petition;
    (C) A description of the participants' significant interest in the 
subject matter of the proceeding;
    (D) A statement of the participants' intention to fully participate 
in the royalty rate proceeding; and
    (E) If the joint petition is filed by counsel or a representative 
of one or more of the participants that are named in the joint 
petition, a statement from such counsel or representative certifying 
that, as of the date of submission of the joint petition, such counsel 
or representative has the authority and

[[Page 30907]]

consent of the participants to represent them in the royalty rate 
proceeding.
    (2) Distribution proceedings. (i) Single petition. Each petition to 
participate filed in a royalty distribution proceeding must include:
    (A) The petitioner's full name, address, telephone number, 
facsimile number (if any), and e-mail address (if any);
    (B) In a cable or satellite royalty distribution proceeding, 
identification of whether the petition covers a Phase I proceeding (the 
initial part of a distribution proceeding where royalties are divided 
among the categories or groups of copyright owners), a Phase II 
proceeding (where the money allotted to each category is subdivided 
among the various copyright owners within that category), or both;
    (C) A description of the petitioner's significant interest in the 
subject matter of the proceeding; and
    (D) A statement of the petitioner's intention to fully participate 
in the royalty distribution proceeding;
    (ii) Joint petition. Petitioners with similar interests may, in 
lieu of filing individual petitions, file a single petition. Each joint 
petition must include:
    (A) The full name, address, telephone number, facsimile number (if 
any), and e-mail address (if any) of the person filing the petition;
    (B) A list identifying all participants to the joint petition;
    (C) In a cable or satellite royalty distribution proceeding, 
identification of whether the petition covers a Phase I proceeding (the 
initial part of a distribution proceeding where royalties are divided 
among the categories or groups of copyright owners), a Phase II 
proceeding (where the money allotted to each category is subdivided 
among the various copyright owners within that category), or both;
    (D) A description of the participants' significant interest in the 
subject matter of the proceeding;
    (E) A statement of the participants' intention to fully participate 
in the royalty distribution proceeding; and
    (F) If the joint petition is filed by counsel or a representative 
of one or more of the participants that are named in the joint 
petition, a statement from such counsel or representative certifying 
that, as of the date of submission of the joint petition, such counsel 
or representative has the authority and consent of the participants to 
represent them in the royalty distribution proceeding.
    (3) Filing deadline. A petition to participate shall be filed by no 
later than 30 days after the publication of the notice of commencement 
of a proceeding, subject to the qualified exception set forth in 
paragraph (d) of this section.
    (4) Filing fee. A petition to participate must be accompanied with 
a filing fee of $150 or the petition will be rejected. Payment shall be 
made to the Copyright Royalty Board. If a check is subsequently 
dishonored, the petition will be rejected. If the petitioner believes 
that the contested amount of that petitioner's claim will be less than 
$10,000, petitioner shall so state in the petition to participate and 
should not include payment of the $150 filing fee. If it becomes 
apparent during the course of the proceedings that the contested amount 
of the claim is more than $10,000, the Board will require payment of 
the filing fee at such time.
    (c) Acceptance and rejection of petitions to participate. A 
petition to participate will be deemed to have been allowed by the 
Copyright Royalty Board unless the Board has determined that the 
petitioner lacks a significant interest in the proceeding or that the 
petition is otherwise invalid.
    (d) Late petitions to participate. The Copyright Royalty Board may, 
for substantial good cause shown, and if there is no prejudice to the 
participants that have already filed petitions, accept late petitions 
to participate at any time up to the date that is 90 days before the 
date on which participants in the proceeding are to file their written 
direct statements. However, petitioners whose petitions are filed more 
than 30 days after publication of notice of commencement of a 
proceeding are not eligible to object to a settlement reached during 
the voluntary negotiation period.


Sec.  351.2  Voluntary negotiation period; settlement.

    (a) Commencement; duration. Within thirty-five business days from 
the date a proceeding is initiated by notice in the Federal Register 
pursuant to Sec.  351.1(a), the Copyright Royalty Board will announce 
the beginning of a voluntary negotiation period and will make a list of 
the participants available to the participants in the particular 
proceeding. The voluntary negotiation period shall last three months, 
after which the parties shall notify the Board in writing as to whether 
a settlement has been reached.
    (b) Settlement. (1) Distribution proceedings. To the extent that a 
settlement or partial settlement has been reached in a distribution 
proceeding, that agreement will provide the basis for a full or partial 
distribution.
    (2) Royalty rate proceedings. If, in a proceeding to determine 
statutory terms and rates, the participating parties report that a 
settlement has been reached by some or all of the parties, the 
Copyright Royalty Board will publish the settlement in the Federal 
Register for notice and comment from those bound by the terms, rates, 
or other determination set by the agreement. The Board may decline to 
adopt the agreement as a basis for statutory terms and rates for 
participants that are not parties to the agreement if the Board 
concludes that the agreement does not provide a reasonable basis for 
setting statutory terms or rates.


Sec.  351.3  Controversy and further proceedings.

    (a) Declaration of controversy. If a settlement has not been 
reached within the voluntary negotiation period, the Copyright Royalty 
Board will issue an order declaring that further proceedings are 
necessary. The procedures set forth at Sec. Sec.  351.4, et seq., for 
formal hearings will apply, unless the abbreviated procedures set forth 
in paragraphs (b) and (c) of this section are invoked by the Copyright 
Royalty Board.
    (b) Small claims in distribution proceedings. (1) General. If, in a 
distribution proceeding, the contested amount of a claim is $10,000 or 
less, the Copyright Royalty Board shall decide the controversy on the 
basis of the filing of the written direct statement by each participant 
(or participant group filing a joint petition), the response by any 
opposing participant, and one optional reply by a participant who has 
filed a written direct statement.
    (2) Bad faith inflation of claim. If the Copyright Royalty Board 
determines that a participant asserts in bad faith an amount in 
controversy in excess of $10,000 for the purpose of avoiding a 
determination under the procedure set forth in paragraph (b)(1) of this 
section, the Copyright Royalty Board shall impose a fine on that 
participant in an amount not to exceed the difference between the 
actual amount distributed and the amount asserted by the participant.
    (c) Paper proceedings. (1) Where used. The procedure under this 
paragraph (c) will be applied in cases in which there is no genuine 
issue of material fact, there is no need for evidentiary hearings, and 
all participants in the proceeding agree in writing to the procedure. 
In the absence of an agreement in writing among all participants, this 
procedure may be applied by the Board, in its discretion, either on the 
motion of a party or by the Copyright Royalty Board sua sponte. A party 
requesting use of paper proceedings, in the absence of

[[Page 30908]]

agreement among the other participants, should include in the motion a 
showing that the use of paper proceedings in the particular case would 
meet any due process or other legal requirements.
    (2) Course of procedure. Paper proceedings will be decided on the 
basis of the filing of the written direct statement by the participant 
(or participant group filing a joint petition), the response by any 
opposing participant, and one optional reply by a participant who has 
filed a written direct statement. Before a decision becomes final in a 
case utilizing paper proceedings, the Copyright Royalty Board will 
offer the participants the opportunity to comment on the decision.


Sec.  351.4  Written direct statements.

    (a) Required filing; deadline. All parties who have filed a 
petition to participate in the hearing must file a written direct 
statement. The deadline for the filing of the written direct statement 
will be specified by the Copyright Royalty Board, not earlier than 4 
months, nor later than 5 months, after the end of the voluntary 
negotiation period set forth in Sec.  351.2.
    (b) Content required. (1) Testimony. The written direct statement 
shall include all testimony, including each witness's background and 
qualifications, along with all the exhibits to be presented in the 
direct statement.
    (2) Designated testimony. Each participating party may designate a 
portion of past records, including records of the Copyright Royalty 
Tribunal or Copyright Arbitration Royalty Panels, that it wants 
included in its direct statement. If a party intends to rely on any 
part of the testimony of a witness in a prior proceeding, the complete 
testimony of that witness (i.e., direct, cross and redirect 
examination) must be designated. The party submitting such designated 
testimony shall include a copy of that testimony with the written 
direct statement.
    (3) Claim. In the case of a royalty distribution proceeding, each 
party must state in the written direct statement its percentage or 
dollar claim to the fund. In the case of a rate (or rates) proceeding, 
each party must state its requested rate. No party will be precluded 
from revising its claim or its requested rate at any time during the 
proceeding up to, and including, the filing of the proposed findings of 
fact and conclusions of law.
    (4) Material questions. Under a separate heading, the written 
direct statement shall set forth any ``material question of substantive 
law'' that is expected to arise in the course of the proceeding and 
might warrant certification to the Register of Copyrights under 17 
U.S.C. 802(f). Cf., 37 CFR Part 354.
    (c) Amended written direct statements. A participant in a 
proceeding may amend a written direct statement based on new 
information received during the discovery process, within 15 days after 
the end of the discovery period. An amended written direct statement 
must explain how it differs from the written direct statement it will 
amend and must demonstrate that the amendment is based on new 
information received during the discovery process. The participant 
amending its written direct statement may file either the amended 
portions of the written direct statement or submit complete new copies 
at its option.


Sec.  351.5  Discovery in royalty rate proceedings.

    (a) Schedule. Following the submission to the Copyright Royalty 
Board of written direct statements by the participants in a royalty 
rate proceeding, and after conferring with the participants, the 
Copyright Royalty Board will issue a discovery schedule. Discovery 
shall be permitted for a period of 60 days, except for discovery 
ordered by the Copyright Royalty Board in connection with the 
resolution of motions, orders, and disputes pending at the end of such 
period. The discovery schedule will include a date for the post-
discovery settlement conference addressed in Sec.  351.7.
    (b) Document production. A participant in a royalty rate proceeding 
may request of an opposing participant nonprivileged documents that are 
directly related to the written direct statement or written rebuttal 
statement of that participant. Any objection to such a request shall be 
resolved by a motion or request to compel production. The motion must 
show how the disputed document or documents would actually be relevant 
to the moving party's case and that the information sought is not 
readily available to the moving participant in a form or format that 
would be substantially less burdensome to produce. The motion must also 
include a statement that the parties had conferred and were unable to 
resolve the matter.
    (c) Depositions and interrogatories. In a proceeding to determine 
royalty rates, the participants entitled to receive royalties shall 
collectively be permitted to take no more than 10 depositions and 
secure responses to no more than 25 interrogatories. Similarly, the 
participants obligated to pay royalties shall collectively be permitted 
to take no more than 10 depositions and secure responses to no more 
than 25 interrogatories.


Sec.  351.6  Discovery in distribution proceedings.

    In distribution proceedings, the Board shall designate a 45-day 
period following the filing of written direct and rebuttal statements 
within which parties may request of an opposing party nonprivileged 
underlying documents related to the written exhibits and testimony.


Sec.  351.7  Settlement conference.

    A post-discovery settlement conference will be held among the 
participants, within 21-days after the close of discovery, outside of 
the presence of the Copyright Royalty Board. Immediately after this 
conference the participants shall file with the Copyright Royalty Board 
a Joint Settlement Conference Report indicating the extent to which the 
participants have reached a settlement.


Sec.  351.8  Pre-hearing conference.

    In the absence of a complete settlement in a proceeding not subject 
to the abbreviated procedures set forth in Sec. Sec.  351.3(b) and (c), 
a hearing will be scheduled expeditiously so as to allow the Board to 
conduct hearings and issue its final determination in the proceeding 
within the time allowed by the Copyright Act. Prior to the hearing, the 
Board may conduct a prehearing conference to assist in setting the 
order of presentation of evidence and the appearance of witnesses at 
the hearing.


Sec.  351.9  Conduct of hearings.

    (a) By panels. Hearings will be conducted by all Copyright Royalty 
Judges sitting as a panel.
    (b) Role of Chief Judge. The Chief Copyright Royalty Judge may 
preside over such collateral and administrative proceedings, and over 
proceedings under section 803(b)(1) through (5) of the Copyright Act, 
as the Chief Judge considers appropriate. Subject to the vote of the 
Copyright Royalty Judges, the Chief Judge shall have the responsibility 
for:
    (1) Setting the order of presentation of evidence and appearance of 
witnesses;
    (2) Administering oaths and affirmations to all witnesses;
    (3) Announcing the Board's ruling on objections and motions and all 
rulings with respect to introducing or excluding documentary or other 
evidence. In all cases, whether there are an even number of Judges 
sitting at the hearing, with the exception of a hearing pursuant to 17

[[Page 30909]]

U.S.C. 803(a)(2), it takes a majority vote to grant a motion or sustain 
an objection. A tie vote will result in the denial of a motion or the 
overruling of the objection;
    (4) Regulating the course of the proceedings and the decorum of the 
parties and their counsel, and insuring that the proceedings are fair 
and impartial; and
    (5) Announcing the schedule of subsequent proceedings.
    (c) Opening statements. In each distribution or rate proceeding, 
each party may present its opening statement summarizing its written 
direct statement.


Sec.  351.10  Evidence.

    (a) Admissibility. All evidence that is relevant and not unduly 
repetitious or privileged, shall be admissible. Written testimony and 
exhibits will be received into the record, except where the Board 
sustains an objection. No evidence, including exhibits, may be 
submitted without a sponsoring witness, except matters of which the 
Board may take official notice.
    (b) Examination of witnesses. All witnesses shall be required to 
take an oath or affirmation before testifying. Parties are entitled to 
conduct direct examination (consisting of the testimony of the witness 
in the written direct statement and an oral summary of that testimony); 
cross-examination (limited to matters raised on direct examination); 
and redirect examination (limited to matters raised on cross-
examination). The Board may limit the number of witnesses or limit 
questioning to avoid cumulative testimony.
    (c) Documentary evidence. (1) Submission as exhibits. Evidence that 
is submitted in the form of documents or detailed data and information 
shall be presented as exhibits.
    (2) Separation of irrelevant portions. Relevant and material matter 
embraced in a document containing other matter not material or relevant 
or not intended as evidence must be plainly designated as the matter 
offered in evidence, and the immaterial or irrelevant parts shall be 
marked clearly so as to show they are not intended as evidence.
    (3) Bulky exhibits. In cases where a document in which material and 
relevant matter occurs is of such bulk that it would unnecessarily 
encumber the record, it may be marked for identification and the 
relevant and material parts, once properly authenticated, may be read 
into the record. In such instances, a true copy of the material and 
relevant matter may be presented in extract form, and submitted as 
evidence.
    (d) Copies. Anyone presenting documents as evidence must present 
copies to all other participants in the proceedings, or their 
attorneys, and afford them an opportunity to examine the documents in 
their entirety and offer into evidence any other portion that may be 
considered material and relevant. However, if a publicly available 
document issued by a governmental entity (such as an official report, 
decision, opinion, or published scientific or economic data) is offered 
in evidence, it may be offered instead by identifying the document and 
signaling the relevant parts.
    (e) Introduction of studies and analyses. If studies or analyses 
are offered in evidence, they shall state clearly the study plan, all 
relevant assumptions, the techniques of data collection, and the 
techniques of estimation and testing. The facts and judgments upon 
which conclusions are based shall be stated clearly, together with any 
alternative courses of action considered. If requested, tabulations of 
input data shall be made available to the Board.
    (1) Statistical studies. Statistical studies offered in evidence 
shall be accompanied by a summary of their assumptions, their study 
plans, and their procedures. Supplementary details shall be included in 
appendices. For each of the following types of statistical studies the 
following should be furnished:
    (i) Sample surveys.
    (A) A clear description of the survey design, the definition of the 
universe under consideration, the sampling frame and units, the 
validity and confidence limits on major estimates; and
    (B) An explanation of the method of selecting the sample and of the 
characteristics which were measured and counted.
    (ii) Econometric investigations.
    (A) A complete description of the econometric model, the reasons 
for each assumption, and the reasons for the statistical specification;
    (B) A clear statement of how any changes in the assumptions might 
affect the final result; and
    (C) Any available alternative studies that employ alternative 
models and variables, if requested.
    (iii) Experimental analysis.
    (A) A complete description of the design, the controlled 
conditions, and the implementation of controls; and
    (B) A complete description of the methods of observation and 
adjustment of observation.
    (iv) Studies involving statistical methodology.
    (A) The formula used for statistical estimates;
    (B) The standard error for each