Adjustment of Cable Statutory License Royalty Rates, 24523-24525 [2016-09626]
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Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Proposed Rules
Dated: April 7, 2016.
J.S. Dufresne,
Captain, U.S. Coast Guard, Captain of the
Port North Carolina.
[FR Doc. 2016–09677 Filed 4–25–16; 8:45 am]
BILLING CODE 9110–04–P
LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Chapter III
[Docket No. 15–CRB–0010–CA]
Adjustment of Cable Statutory License
Royalty Rates
Copyright Royalty Board,
Library of Congress.
ACTION: Proposed rule.
AGENCY:
The Copyright Royalty Judges
(Judges) publish for comment proposed
regulations governing royalty rates and
terms for the distant retransmission of
over-the-air television and radio
broadcast stations by cable television
systems to their subscribers.
DATES: Comments are due no later than
May 17, 2016.
ADDRESSES: Submit electronic
comments via email to crb@loc.gov or
online at https://www.regulations.gov.
Those who choose not to submit
comments electronically should see
How to Submit Comments in the
SUPPLEMENTARY INFORMATION section
below for physical addresses and further
instructions. The proposed rule is also
posted on the agency’s Web site
(www.loc.gov/crb).
FOR FURTHER INFORMATION CONTACT:
Kimberly Whittle, Attorney Advisor, by
telephone at (202) 707–7658, or by
email at crb@loc.gov.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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Background
On January 15, 2016, the Copyright
Royalty Judges (Judges) received a
motion from the National Cable &
Telecommunications Association, the
American Cable Association, and a
group referring to itself as the ‘‘Phase I
Parties’’ requesting that the Judges adopt
a partial settlement of the movants’
interests regarding royalty rates and
terms for the statutory copyright license
for eligible cable retransmissions for the
period 2015–2019. The settlement
proposes that the rates, terms, and gross
receipts limitations remain the same as
those currently in effect. See 17 U.S.C.
111(d)(1)(B) and 37 CFR 256.2(c)–(d).
Motion of the Participating Parties to
Adopt Partial Settlement, Docket No.
15–CRB–0010–CA (2015–2019)
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(Motion). The Judges hereby publish
proposed regulations reflecting the
proposed settlement and request
comments from interested parties as
required by 17 U.S.C. 801(b)(7)(A).
Section 111 of the Copyright Act
grants a statutory copyright license to
cable television systems for the distant
retransmission of over-the-air television
and radio broadcast stations to their
subscribers. 17 U.S.C. 111(c). In
exchange for the license, cable operators
submit to the Copyright Office
semiannually royalty payments and
statements of account detailing their
retransmissions. 17 U.S.C. 111(d)(1).
The Copyright Office deposits the
royalties into the United States Treasury
for later distribution to copyright
owners of the broadcast programming
that the cable systems retransmit. 17
U.S.C. 111(d)(2).
A cable system calculates its royalty
payments in accordance with the
statutory formula described in 17 U.S.C.
111(d)(1). Royalty rates are based upon
a cable system’s gross receipts from
subscribers who receive retransmitted
broadcast signals. For rate calculation
purposes, cable systems are divided into
three tiers based on their gross receipts
(small, medium, and large). 17 U.S.C.
111(d)(1)(B) through (F). Both the
applicable rates and the tiers are subject
to adjustment. 17 U.S.C. 801(b)(2).
Every five years persons with a
significant interest in the royalty rates
may file petitions to initiate a
proceeding to adjust the rates. 17 U.S.C.
804(a) and (b). No person with a
significant interest filed a petition to
initiate a proceeding in 2015.1
Therefore, the Judges initiated this rate
adjustment proceeding by notice
published in the Federal Register in
June 2015. See 17 U.S.C. 801(b)(2),
803(b)(1), 804(a) and (b); 80 FR 35403
(Jun. 19, 2015).
The Judges received two joint
Petitions to Participate, one from the
1 The cable rates were last adjusted in 2005, at a
time when the Copyright Office was transferring
responsibility for royalty rate proceedings from
Copyright Arbitration Royalty Panels (CARP) to the
newly authorized Copyright Royalty Judges.
Although the Judges commenced a rate proceeding
relating to the 2010 rate adjustment, the Judges
terminated it when passage of the Satellite
Television Extension and Localism Act of 2010,
Public Law 111–151, 124 Stat. 1027 (‘‘2010
STELA’’), rendered the proceeding unnecessary.
See Order Granting Request to Terminate
Proceeding, Docket No. 2010–1 CRB Cable Rate
(July 13, 2010). At that time, although the act
changed the relevant rates, neither the Register of
Copyrights nor the Judges updated the statement of
the prior rates in subsections (a) and (b) of section
256 of 37 CFR, the chapter of the Regulations
applying to CARP. The STELA Reauthorization Act
of 2014 did not change the cable royalty rates in
§ 111. See Public Law 113–200, 28 Stat. 2059 (Dec.
4, 2014).
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National Cable & Telecommunications
Association and the American Cable
Association and another from a group
referring to itself as the ‘‘Phase I
Parties’’.2 The Judges accepted these
petitions and commenced a Voluntary
Negotiation Period (VNP).
On December 15, 2015, at the
conclusion of the VNP, all participants
notified the Judges that they had settled
and asked that cable retransmission
rates remain unchanged for the rate
period 2015 to 2019, inclusive. On
November 23, 2015, however, one of the
participants, the Joint Sports Claimants
(JSC),3 had filed a ‘‘Petition . . . to
Initiate Cable Royalty Rate Adjustment
Proceedings’’ with a self-styled caption
indicating a proceeding for cable rate
adjustments ‘‘for Retransmission of
Certain Sports Telecasts.’’ Given the
seemingly conflicting positions of the
JSC, the Judges rejected the settlement,
without prejudice.
The settling participants have now
asked that the Judges adopt the
settlement and permit continuing
proceedings to determine whether and
to what degree to make a rate
adjustment under section 801(b)(2)(C).
Motion at 1, 6–7. Section 801(b)(2)(C)
provides for adjustment proceedings 4 in
the event the Federal Communications
Commission (FCC) changes its rule
‘‘with respect to . . . sports program
exclusivity. . . .’’ The JSC base their
November 23, 2015 petition on an FCC
rule change, viz., repeal of the sports
exclusivity rules, effective November
24, 2014.5 The Judges announce
2 The Phase I Parties consist of Program
Suppliers, Joint Sports Claimants, Public Television
Claimants, Commercial Television Claimants,
Music Claimants, Canadian Claimants Group,
National Public Radio, and Devotional Claimants.
3 Joint Sports Claimants are: The National
Basketball Association, the National Collegiate
Athletic Association, the National Football League,
the National Hockey League, the Office of the
Commissioner of Baseball, and the Women’s
National Basketball Association.
4 Apart from the quinquennial proceedings
required by § 804 of the Act.
5 Petition of the Joint Sports Claimants to Initiate
Cable Royalty Rate Adjustment Proceedings (Nov.
23, 2015). In its petition, JSC requests that the
Judges ‘‘initiate proceedings to adjust the cable
statutory license royalty rates ‘to assure that such
rates are reasonable in light of’ the repeal of the
Sports Blackout Rules.’’ Petition at 1. In its Motion
to Adopt Partial Settlement, the self-styled
‘‘Participating Parties,’’ which includes JSC, states
that ‘‘[t]he Joint Sports Rule Petition requests a new
Section 111 royalty rate pursuant to 17 U.S.C.
801(b)(2)(C) to account for the November 2014
elimination of the [FCC’s] Sports Rule (a ‘‘Sports
Rule Surcharge’’). Motion at 1–2. According to the
Motion, ‘‘[n]either the Judges nor their predecessors
have previously conducted any proceeding under
Section 801(b)(2)(C) to consider the adoption of a
cable rate to account for changes in the FCC Sports
Rule,’’ although Section 801(b)(2)(C) has been
invoked twice since its enactment with respect to
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commencement of further proceedings
on the issue raised by that petition in a
separate notice in the Federal Register.
The Participating Parties state that they do
not believe that the JSC Sports Rule Petition
precludes adoption of their agreement as set
forth in the Dec. 15 Settlement Notice. That
agreement concerns only the Quinquennial
Cable Rate Adjustments. It resolves all issues
concerning those quinquennial adjustments
by agreeing to retain without change the
existing cable royalty rates (the base rates,
3.75 percent rate and the Syndicated
Exclusivity Surcharge) and existing gross
receipts limitations during the years 2015–
19. It simply does not address the issue of
whether the Judges should make any changes
in cable rates pursuant to 17 U.S.C.
801(b)(2)(B) & (C) to account for changes in
FCC cable rules.
Motion at 5–6 (emphasis original).
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Statutory Timing of Adoption of Rates
and Terms
Section 801(b)(7)(A) allows for the
adoption of rates and terms negotiated
by ‘‘some or all of the participants in a
proceeding at any time during the
proceeding’’ provided the parties submit
the negotiated rates and terms to the
Judges for approval. That provision
directs the Judges to provide those who
would be bound by the negotiated rates
and terms an opportunity to comment
on the agreement. Unless a participant
in a proceeding objects and the Judges
conclude that the agreement does not
provide a reasonable basis for setting
statutory rates or terms, the Judges
adopt the negotiated rates and terms. 17
U.S.C. 801(b)(7)(A).
If the Judges adopt the proposed rates
and terms pursuant to this provision for
the 2015–2019 rate period, the adopted
(and thus, existing) rates and terms and
gross receipts limitations will continue
to be binding on all cable systems that
retransmit distantly over-the-air
television and radio broadcast stations
to their subscribers and on all copyright
owners of the broadcast programming
that the cable systems retransmit during
the license period 2015–2019, except to
the extent those rates and terms may be
adjusted for sports programming in the
portion of the proceeding focused on the
effect, if any, of the FCC Sports
Exclusivity Rule change.
Proposed Adjustments to Rates and
Terms
If the Judges adopt the proposed rules
that include the terms of the settlement,
these rules shall take effect upon final
adoption. The Judges have statutory
authority to promulgate their own rules
which, when adopted, shall render
the syndicated exclusivity provision of the section.
Motion at 2, n.2.
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inapplicable the prior rules that
pertained to the rates and terms as
established by the now defunct CARP,
in part 256 of the existing regulation (37
CFR, part 256).
The Judges will update the terms,
eliminate surplus verbiage, make the
rules easier to read, and codify them in
Chapter 3 of Title 37 of the CFR.
Chapter 3 is the chapter that governs
Copyright Royalty Board proceedings. If
adopted, the proposed rules shall be
designated ‘‘part 387.’’
Interested parties may comment and
object to any or all of the proposed
regulations contained in this notice.
Such comments and objections must be
submitted no later than May 17, 2016.
How To Submit Comments
Interested members of the public must
submit comments to only one of the
following addresses. If not commenting
by email or online, commenters must
submit an original of their comments,
five paper copies, and an electronic
version on a CD.
Email: crb@loc.gov; or
Online: https://www.regulations.gov; or
U.S. mail: Copyright Royalty Board,
P.O. Box 70977, Washington, DC 20024–
0977; or
Overnight service (only USPS Express
Mail is acceptable): Copyright Royalty
Board, P.O. Box 70977, Washington, DC
20024–0977; or
Commercial courier: Address package
to: Copyright Royalty Board, Library of
Congress, James Madison Memorial
Building, LM–403, 101 Independence
Avenue SE., Washington, DC 20559–
6000. Deliver to: Congressional Courier
Acceptance Site, 2nd Street NE., and D
Street NE., Washington, DC; or
Hand delivery: Library of Congress,
James Madison Memorial Building, LM–
401, 101 Independence Avenue SE.,
Washington, DC 20559–6000.
List of Subjects in 37 CFR Part 387
Copyright, Cable Television,
Royalties.
Proposed Regulations
For the reasons set forth in the
preamble, and under the authority of
chapter 8, title 17, United States Code,
the Copyright Royalty Judges propose to
amend 37 CFR Chapter III as follows:
Add a new Part 387.
PART 387—ADJUSTMENT OF
ROYALTY FEE FOR CABLE
COMPULSORY LICENSE
Sec.
387.1 General
387.2 Royalty fee for compulsory license for
secondary transmission by cable
systems.
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Authority: 17 U.S.C. 801(b)(2), 803(b)(6).
§ 387.1
General.
This part establishes adjusted terms
and rates for royalty payments in
accordance with the provisions of 17
U.S.C. 111 and 801(b)(2)(A), (B), (C),
and (D). Upon compliance with 17
U.S.C. 111 and the terms and rates of
this part, a cable system entity may
engage in the activities set forth in 17
U.S.C. 111.
§ 387.2 Royalty fee for compulsory license
for secondary transmission by cable
systems.
(a) Royalty fee rates. Commencing
with the first semiannual accounting
period of 2015 and for each semiannual
accounting period thereafter, the royalty
fee rates for secondary transmission by
cable systems are those established by
17 U.S.C. 111(d)(1)(B)(i)–(iv), as
amended.
(b) Alternate tiered rates.
Commencing with the first semiannual
accounting period of 2015 and for each
semiannual accounting period
thereafter, the alternate tiered royalty
fee rates for cable systems with certain
levels of gross receipts as described in
17 U.S.C. 111(d)(1) (E) and (F), are those
described therein.
(c) 3.75 percent rate. Commencing
with the first semiannual accounting
period of 2015, and for each semiannual
accounting period thereafter, and
notwithstanding paragraphs (a) and (d)
of this section, for each distant signal
equivalent or fraction thereof not
represented by the carriage of:
(1) Any signal that was permitted (or,
in the case of cable systems
commencing operations after June 24,
1981, that would have been permitted)
under the rules and regulations of the
Federal Communications Commission
in effect on June 24, 1981, or
(2) A signal of the same type (that is,
independent, network, or noncommercial educational) substituted for
such permitted signal, or
(3) A signal that was carried pursuant
to an individual waiver of the rules and
regulations of the Federal
Communications Commissioning effect
on June 24, 1981; in lieu of the royalty
rates specified in paragraphs (a) and (d)
of this section, the royalty rate shall be
3.75 percent of the gross receipts of the
cable system for each distant signal
equivalent. Any fraction of a distant
signal equivalent shall be computed at
its fractional value.
(d) Syndicated exclusivity surcharge.
Commencing with the first semiannual
accounting period of 2015 and for each
semiannual accounting period
thereafter, in the case of a cable system
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Federal Register / Vol. 81, No. 80 / Tuesday, April 26, 2016 / Proposed Rules
located outside the 35-mile specified
zone of a commercial VHF station that
places a predicted Grade B contour, in
whole or in part, over the cable system,
and that is not significantly viewed or
otherwise exempt from the FCC’s
syndicated exclusivity rules in effect on
June 24, 1981, for each distant signal
equivalent or fraction thereof
represented by the carriage of such
commercial VHF station, the royalty rate
shall be, in addition to the amount
specified in paragraph (a) of this
section,
(1) For cable systems located wholly
or in part within a top 50 television
market,
(i) 0.599 percent of such gross receipts
for the first distant signal equivalent;
(ii) 0.377 percent of such gross
receipts for each of the second, third,
and fourth distant signal equivalents;
and
(iii) 0.178 percent of such gross
receipts for the fifth distant signal
equivalent and each additional distant
signal equivalent thereafter;
(2) For cable systems located wholly
or in part within a second 50 television
market,
(i) 0.300 percent of such gross receipts
for the first distant signal equivalent;
(ii) 0.189 percent of such gross
receipts for each of the second, third,
and fourth distant signal equivalents;
and
(iii) 0.089 percent of such gross
receipts for the fifth distant signal
equivalent and each additional distant
signal equivalent thereafter;
(3) For purposes of this section ‘‘top
50 television markets’’ and ‘‘second 50
television markets’’ shall be defined as
the comparable terms are defined or
interpreted in accordance with 47 CFR
76.51, as effective June 24, 1981.
(e) Computation of rates. Computation
of royalty fees shall be governed by 17
U.S.C. 111(d)(1)(C).
Dated: April 20, 2016.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
[FR Doc. 2016–09626 Filed 4–25–16; 8:45 am]
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BILLING CODE 1410–72–P
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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R08–OAR–2013–0561, FRL–9945–57–
Region 8]
Promulgation of State Implementation
Plan Revisions; Infrastructure
Requirements for the 2008 Lead, 2008
Ozone, 2010 NO2, 2010 SO2, and 2012
PM2.5 National Ambient Air Quality
Standards; Utah
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
elements of State Implementation Plan
(SIP) revisions from the State of Utah to
demonstrate the State meets
infrastructure requirements of the Clean
Air Act (Act or CAA) for the National
Ambient Air Quality Standards
(NAAQS) promulgated for ozone on
March 12, 2008, lead (Pb) on October
15, 2008, nitrogen dioxide (NO2) on
January 22, 2010, sulfur dioxide (SO2)
on June 2, 2010 and fine particulate
matter (PM2.5) on December 14, 2012.
The EPA is also proposing to approve
SIP revisions the State submitted
regarding state boards. Section 110(a) of
the CAA requires that each state submit
a SIP for the implementation,
maintenance, and enforcement of each
NAAQS promulgated by the EPA.
DATES: Written comments must be
received on or before May 26, 2016.
ADDRESSES: Submit your comments,
identified by Docket ID No. EPA–R08–
OAR–2013–0561 at https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
The EPA may publish any comment
received to its public docket. Do not
submit electronically any information
you consider to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Multimedia
submissions (audio, video, etc.) must be
accompanied by a written comment.
The written comment is considered the
official comment and should include
discussion of all points you wish to
make. The EPA will generally not
consider comments or comment
contents located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
information about CBI or multimedia
submissions, and general guidance on
SUMMARY:
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24525
making effective comments, please visit
https://www2.epa.gov/dockets/
commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT:
Abby Fulton, Air Program, U.S.
Environmental Protection Agency
(EPA), Region 8, Mail Code 8P–AR,
1595 Wynkoop Street, Denver, Colorado
80202–1129, (303) 312–6563,
fulton.abby@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
What should I consider as I prepare my
comments for the EPA?
1. Submitting Confidential Business
Information (CBI). Do not submit CBI to
the EPA through https://
www.regulations.gov or email. Clearly
mark the part or all of the information
that you claim to be CBI. For CBI
information on a disk or CD ROM that
you mail to the EPA, mark the outside
of the disk or CD ROM as CBI and then
identify electronically within the disk or
CD ROM the specific information that is
claimed as CBI. In addition to one
complete version of the comment that
includes information claimed as CBI, a
copy of the comment that does not
contain the information claimed as CBI
must be submitted for inclusion in the
public docket. Information so marked
will not be disclosed except in
accordance with procedures set forth in
40 CFR part 2.
2. Tips for preparing your comments.
When submitting comments, remember
to:
• Identify the rulemaking by docket
number and other identifying
information (subject heading, Federal
Register volume, date, and page
number);
• Follow directions and organize your
comments;
• Explain why you agree or disagree;
• Suggest alternatives and substitute
language for your requested changes;
• Describe any assumptions and
provide any technical information and/
or data that you used;
• If you estimate potential costs or
burdens, explain how you arrived at
your estimate in sufficient detail to
allow for it to be reproduced;
• Provide specific examples to
illustrate your concerns, and suggest
alternatives;
• Explain your views as clearly as
possible, avoiding the use of profanity
or personal threats; and,
• Make sure to submit your
comments by the comment period
deadline identified.
II. Background
On March 12, 2008, the EPA
promulgated a new NAAQS for ozone,
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]]>Agencies
[Federal Register Volume 81, Number 80 (Tuesday, April 26, 2016)]
[Proposed Rules]
[Pages 24523-24525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09626]
=======================================================================
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Chapter III
[Docket No. 15-CRB-0010-CA]
Adjustment of Cable Statutory License Royalty Rates
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Copyright Royalty Judges (Judges) publish for comment
proposed regulations governing royalty rates and terms for the distant
retransmission of over-the-air television and radio broadcast stations
by cable television systems to their subscribers.
DATES: Comments are due no later than May 17, 2016.
ADDRESSES: Submit electronic comments via email to crb@loc.gov or
online at https://www.regulations.gov. Those who choose not to submit
comments electronically should see How to Submit Comments in the
SUPPLEMENTARY INFORMATION section below for physical addresses and
further instructions. The proposed rule is also posted on the agency's
Web site (www.loc.gov/crb).
FOR FURTHER INFORMATION CONTACT: Kimberly Whittle, Attorney Advisor, by
telephone at (202) 707-7658, or by email at crb@loc.gov.
SUPPLEMENTARY INFORMATION:
Background
On January 15, 2016, the Copyright Royalty Judges (Judges) received
a motion from the National Cable & Telecommunications Association, the
American Cable Association, and a group referring to itself as the
``Phase I Parties'' requesting that the Judges adopt a partial
settlement of the movants' interests regarding royalty rates and terms
for the statutory copyright license for eligible cable retransmissions
for the period 2015-2019. The settlement proposes that the rates,
terms, and gross receipts limitations remain the same as those
currently in effect. See 17 U.S.C. 111(d)(1)(B) and 37 CFR 256.2(c)-
(d). Motion of the Participating Parties to Adopt Partial Settlement,
Docket No. 15-CRB-0010-CA (2015-2019) (Motion). The Judges hereby
publish proposed regulations reflecting the proposed settlement and
request comments from interested parties as required by 17 U.S.C.
801(b)(7)(A).
Section 111 of the Copyright Act grants a statutory copyright
license to cable television systems for the distant retransmission of
over-the-air television and radio broadcast stations to their
subscribers. 17 U.S.C. 111(c). In exchange for the license, cable
operators submit to the Copyright Office semiannually royalty payments
and statements of account detailing their retransmissions. 17 U.S.C.
111(d)(1). The Copyright Office deposits the royalties into the United
States Treasury for later distribution to copyright owners of the
broadcast programming that the cable systems retransmit. 17 U.S.C.
111(d)(2).
A cable system calculates its royalty payments in accordance with
the statutory formula described in 17 U.S.C. 111(d)(1). Royalty rates
are based upon a cable system's gross receipts from subscribers who
receive retransmitted broadcast signals. For rate calculation purposes,
cable systems are divided into three tiers based on their gross
receipts (small, medium, and large). 17 U.S.C. 111(d)(1)(B) through
(F). Both the applicable rates and the tiers are subject to adjustment.
17 U.S.C. 801(b)(2).
Every five years persons with a significant interest in the royalty
rates may file petitions to initiate a proceeding to adjust the rates.
17 U.S.C. 804(a) and (b). No person with a significant interest filed a
petition to initiate a proceeding in 2015.\1\ Therefore, the Judges
initiated this rate adjustment proceeding by notice published in the
Federal Register in June 2015. See 17 U.S.C. 801(b)(2), 803(b)(1),
804(a) and (b); 80 FR 35403 (Jun. 19, 2015).
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\1\ The cable rates were last adjusted in 2005, at a time when
the Copyright Office was transferring responsibility for royalty
rate proceedings from Copyright Arbitration Royalty Panels (CARP) to
the newly authorized Copyright Royalty Judges. Although the Judges
commenced a rate proceeding relating to the 2010 rate adjustment,
the Judges terminated it when passage of the Satellite Television
Extension and Localism Act of 2010, Public Law 111-151, 124 Stat.
1027 (``2010 STELA''), rendered the proceeding unnecessary. See
Order Granting Request to Terminate Proceeding, Docket No. 2010-1
CRB Cable Rate (July 13, 2010). At that time, although the act
changed the relevant rates, neither the Register of Copyrights nor
the Judges updated the statement of the prior rates in subsections
(a) and (b) of section 256 of 37 CFR, the chapter of the Regulations
applying to CARP. The STELA Reauthorization Act of 2014 did not
change the cable royalty rates in Sec. 111. See Public Law 113-200,
28 Stat. 2059 (Dec. 4, 2014).
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The Judges received two joint Petitions to Participate, one from
the National Cable & Telecommunications Association and the American
Cable Association and another from a group referring to itself as the
``Phase I Parties''.\2\ The Judges accepted these petitions and
commenced a Voluntary Negotiation Period (VNP).
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\2\ The Phase I Parties consist of Program Suppliers, Joint
Sports Claimants, Public Television Claimants, Commercial Television
Claimants, Music Claimants, Canadian Claimants Group, National
Public Radio, and Devotional Claimants.
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On December 15, 2015, at the conclusion of the VNP, all
participants notified the Judges that they had settled and asked that
cable retransmission rates remain unchanged for the rate period 2015 to
2019, inclusive. On November 23, 2015, however, one of the
participants, the Joint Sports Claimants (JSC),\3\ had filed a
``Petition . . . to Initiate Cable Royalty Rate Adjustment
Proceedings'' with a self-styled caption indicating a proceeding for
cable rate adjustments ``for Retransmission of Certain Sports
Telecasts.'' Given the seemingly conflicting positions of the JSC, the
Judges rejected the settlement, without prejudice.
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\3\ Joint Sports Claimants are: The National Basketball
Association, the National Collegiate Athletic Association, the
National Football League, the National Hockey League, the Office of
the Commissioner of Baseball, and the Women's National Basketball
Association.
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The settling participants have now asked that the Judges adopt the
settlement and permit continuing proceedings to determine whether and
to what degree to make a rate adjustment under section 801(b)(2)(C).
Motion at 1, 6-7. Section 801(b)(2)(C) provides for adjustment
proceedings \4\ in the event the Federal Communications Commission
(FCC) changes its rule ``with respect to . . . sports program
exclusivity. . . .'' The JSC base their November 23, 2015 petition on
an FCC rule change, viz., repeal of the sports exclusivity rules,
effective November 24, 2014.\5\ The Judges announce
[[Page 24524]]
commencement of further proceedings on the issue raised by that
petition in a separate notice in the Federal Register.
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\4\ Apart from the quinquennial proceedings required by Sec.
804 of the Act.
\5\ Petition of the Joint Sports Claimants to Initiate Cable
Royalty Rate Adjustment Proceedings (Nov. 23, 2015). In its
petition, JSC requests that the Judges ``initiate proceedings to
adjust the cable statutory license royalty rates `to assure that
such rates are reasonable in light of' the repeal of the Sports
Blackout Rules.'' Petition at 1. In its Motion to Adopt Partial
Settlement, the self-styled ``Participating Parties,'' which
includes JSC, states that ``[t]he Joint Sports Rule Petition
requests a new Section 111 royalty rate pursuant to 17 U.S.C.
801(b)(2)(C) to account for the November 2014 elimination of the
[FCC's] Sports Rule (a ``Sports Rule Surcharge''). Motion at 1-2.
According to the Motion, ``[n]either the Judges nor their
predecessors have previously conducted any proceeding under Section
801(b)(2)(C) to consider the adoption of a cable rate to account for
changes in the FCC Sports Rule,'' although Section 801(b)(2)(C) has
been invoked twice since its enactment with respect to the
syndicated exclusivity provision of the section. Motion at 2, n.2.
The Participating Parties state that they do not believe that
the JSC Sports Rule Petition precludes adoption of their agreement
as set forth in the Dec. 15 Settlement Notice. That agreement
concerns only the Quinquennial Cable Rate Adjustments. It resolves
all issues concerning those quinquennial adjustments by agreeing to
retain without change the existing cable royalty rates (the base
rates, 3.75 percent rate and the Syndicated Exclusivity Surcharge)
and existing gross receipts limitations during the years 2015-19. It
simply does not address the issue of whether the Judges should make
any changes in cable rates pursuant to 17 U.S.C. 801(b)(2)(B) & (C)
to account for changes in FCC cable rules.
Motion at 5-6 (emphasis original).
Statutory Timing of Adoption of Rates and Terms
Section 801(b)(7)(A) allows for the adoption of rates and terms
negotiated by ``some or all of the participants in a proceeding at any
time during the proceeding'' provided the parties submit the negotiated
rates and terms to the Judges for approval. That provision directs the
Judges to provide those who would be bound by the negotiated rates and
terms an opportunity to comment on the agreement. Unless a participant
in a proceeding objects and the Judges conclude that the agreement does
not provide a reasonable basis for setting statutory rates or terms,
the Judges adopt the negotiated rates and terms. 17 U.S.C.
801(b)(7)(A).
If the Judges adopt the proposed rates and terms pursuant to this
provision for the 2015-2019 rate period, the adopted (and thus,
existing) rates and terms and gross receipts limitations will continue
to be binding on all cable systems that retransmit distantly over-the-
air television and radio broadcast stations to their subscribers and on
all copyright owners of the broadcast programming that the cable
systems retransmit during the license period 2015-2019, except to the
extent those rates and terms may be adjusted for sports programming in
the portion of the proceeding focused on the effect, if any, of the FCC
Sports Exclusivity Rule change.
Proposed Adjustments to Rates and Terms
If the Judges adopt the proposed rules that include the terms of
the settlement, these rules shall take effect upon final adoption. The
Judges have statutory authority to promulgate their own rules which,
when adopted, shall render inapplicable the prior rules that pertained
to the rates and terms as established by the now defunct CARP, in part
256 of the existing regulation (37 CFR, part 256).
The Judges will update the terms, eliminate surplus verbiage, make
the rules easier to read, and codify them in Chapter 3 of Title 37 of
the CFR. Chapter 3 is the chapter that governs Copyright Royalty Board
proceedings. If adopted, the proposed rules shall be designated ``part
387.''
Interested parties may comment and object to any or all of the
proposed regulations contained in this notice. Such comments and
objections must be submitted no later than May 17, 2016.
How To Submit Comments
Interested members of the public must submit comments to only one
of the following addresses. If not commenting by email or online,
commenters must submit an original of their comments, five paper
copies, and an electronic version on a CD.
Email: crb@loc.gov; or
Online: https://www.regulations.gov; or
U.S. mail: Copyright Royalty Board, P.O. Box 70977, Washington, DC
20024-0977; or
Overnight service (only USPS Express Mail is acceptable): Copyright
Royalty Board, P.O. Box 70977, Washington, DC 20024-0977; or
Commercial courier: Address package to: Copyright Royalty Board,
Library of Congress, James Madison Memorial Building, LM-403, 101
Independence Avenue SE., Washington, DC 20559-6000. Deliver to:
Congressional Courier Acceptance Site, 2nd Street NE., and D Street
NE., Washington, DC; or
Hand delivery: Library of Congress, James Madison Memorial
Building, LM-401, 101 Independence Avenue SE., Washington, DC 20559-
6000.
List of Subjects in 37 CFR Part 387
Copyright, Cable Television, Royalties.
Proposed Regulations
For the reasons set forth in the preamble, and under the authority
of chapter 8, title 17, United States Code, the Copyright Royalty
Judges propose to amend 37 CFR Chapter III as follows:
Add a new Part 387.
PART 387--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE
Sec.
387.1 General
387.2 Royalty fee for compulsory license for secondary transmission
by cable systems.
Authority: 17 U.S.C. 801(b)(2), 803(b)(6).
Sec. 387.1 General.
This part establishes adjusted terms and rates for royalty payments
in accordance with the provisions of 17 U.S.C. 111 and 801(b)(2)(A),
(B), (C), and (D). Upon compliance with 17 U.S.C. 111 and the terms and
rates of this part, a cable system entity may engage in the activities
set forth in 17 U.S.C. 111.
Sec. 387.2 Royalty fee for compulsory license for secondary
transmission by cable systems.
(a) Royalty fee rates. Commencing with the first semiannual
accounting period of 2015 and for each semiannual accounting period
thereafter, the royalty fee rates for secondary transmission by cable
systems are those established by 17 U.S.C. 111(d)(1)(B)(i)-(iv), as
amended.
(b) Alternate tiered rates. Commencing with the first semiannual
accounting period of 2015 and for each semiannual accounting period
thereafter, the alternate tiered royalty fee rates for cable systems
with certain levels of gross receipts as described in 17 U.S.C.
111(d)(1) (E) and (F), are those described therein.
(c) 3.75 percent rate. Commencing with the first semiannual
accounting period of 2015, and for each semiannual accounting period
thereafter, and notwithstanding paragraphs (a) and (d) of this section,
for each distant signal equivalent or fraction thereof not represented
by the carriage of:
(1) Any signal that was permitted (or, in the case of cable systems
commencing operations after June 24, 1981, that would have been
permitted) under the rules and regulations of the Federal
Communications Commission in effect on June 24, 1981, or
(2) A signal of the same type (that is, independent, network, or
non-commercial educational) substituted for such permitted signal, or
(3) A signal that was carried pursuant to an individual waiver of
the rules and regulations of the Federal Communications Commissioning
effect on June 24, 1981; in lieu of the royalty rates specified in
paragraphs (a) and (d) of this section, the royalty rate shall be 3.75
percent of the gross receipts of the cable system for each distant
signal equivalent. Any fraction of a distant signal equivalent shall be
computed at its fractional value.
(d) Syndicated exclusivity surcharge. Commencing with the first
semiannual accounting period of 2015 and for each semiannual accounting
period thereafter, in the case of a cable system
[[Page 24525]]
located outside the 35-mile specified zone of a commercial VHF station
that places a predicted Grade B contour, in whole or in part, over the
cable system, and that is not significantly viewed or otherwise exempt
from the FCC's syndicated exclusivity rules in effect on June 24, 1981,
for each distant signal equivalent or fraction thereof represented by
the carriage of such commercial VHF station, the royalty rate shall be,
in addition to the amount specified in paragraph (a) of this section,
(1) For cable systems located wholly or in part within a top 50
television market,
(i) 0.599 percent of such gross receipts for the first distant
signal equivalent;
(ii) 0.377 percent of such gross receipts for each of the second,
third, and fourth distant signal equivalents; and
(iii) 0.178 percent of such gross receipts for the fifth distant
signal equivalent and each additional distant signal equivalent
thereafter;
(2) For cable systems located wholly or in part within a second 50
television market,
(i) 0.300 percent of such gross receipts for the first distant
signal equivalent;
(ii) 0.189 percent of such gross receipts for each of the second,
third, and fourth distant signal equivalents; and
(iii) 0.089 percent of such gross receipts for the fifth distant
signal equivalent and each additional distant signal equivalent
thereafter;
(3) For purposes of this section ``top 50 television markets'' and
``second 50 television markets'' shall be defined as the comparable
terms are defined or interpreted in accordance with 47 CFR 76.51, as
effective June 24, 1981.
(e) Computation of rates. Computation of royalty fees shall be
governed by 17 U.S.C. 111(d)(1)(C).
Dated: April 20, 2016.
Suzanne M. Barnett,
Chief Copyright Royalty Judge.
[FR Doc. 2016-09626 Filed 4-25-16; 8:45 am]
BILLING CODE 1410-72-P
