Adjustment of Cable Statutory License Royalty Rates, 36509-36512 [2018-16175]
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Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
Under the NPRM, not all operators
exempted from certification
requirements would also be exempted
from the evaluation requirements.
Proposed § 1926.1427(a)(2) continues
the existing exemption from the training
and certification requirements in that
section for operators of three types of
equipment: Derricks, sideboom cranes,
and equipment with a maximum
manufacturer-rated hoisting/lifting
capacity of 2,000 pounds or less. In the
current crane standard, these three types
of equipment are exempt from all of the
requirements in § 1926.1427 as the
result of language in § 1926.1427(a) and
specific exemptions in §§ 1926.1436(q),
1440(a), and 1441(a). The proposed rule
would not, however, exempt employers
from the requirements in § 1926.1427(f)
to evaluate the potential operators of
those types of equipment to ensure that
they have sufficient knowledge and
skills to perform the assigned tasks with
the assigned equipment. Accordingly,
OSHA proposes to preserve the
evaluation requirements through the
revision of the language in
§ 1926.1427(a) and corresponding edits
to narrow the exemptions in
§§ 1926.1436(q), 1440(a), and 1441(a).
Proposed Section 1926.1427(h)—
Language and Literacy
Existing § 1926.1427(h) allows
operators to be certified in a language
other than English, provided that the
operator understands that language.
Proposed paragraph (h) is nearly
identical to existing paragraph (h) with
the exception that it removes the
reference to the existing qualification
language in paragraph (b)(2), which has
been replaced.
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Proposed Sections 1926.1436(q)—
Derricks, 1926.1440(a)—Sideboom
Cranes, and 1926.1441(a)—Equipment
With a Rated Hoisting/Lifting Capacity
of 2,000 Pounds or Less
As discussed earlier, OSHA proposed
to amend paragraphs §§ 1926.1436(q),
1926.1440(a), and 1926.1441(a) to
ensure that the evaluation requirements
in § 1926.1427(f) apply to employers
using derricks, sideboom cranes, and
equipment with a rated capacity of
2,000 pounds or less.
Type of Review: New.
Agency: DOL–OSHA.
Title: Cranes and Derricks in
Construction: Operator Qualification.
ICR Reference Number: 201710–1218–
002.
Total Estimated Number of
Annualized Respondents: 117,130.
Total Estimated Number of
Annualized Responses: 75,591.
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Total Estimated Number of Annual
Burden Hours: 4,773.
Response Frequency: Various.
Total Number of Annual Other Costs
Burden: $71.
D. Public Participation—Submission of
Comments on This Document and
Internet Access to Comments and
Submissions
The agency encourages commenters to
submit their comments related to the
agency’s clarification of the information
collection requirements to the docket for
this document (Docket Number OSHA–
2018–0009). For instructions on
submitting these comments to the
docket for this document, see the
sections of this Federal Register
document titled DATES and ADDRESSES.
Please note that comments on the
information collection requirements
already submitted to the agency in
response to the NPRM will be
considered; the public need not
resubmit those comments in response to
this solicitation. (See: https://
www.regulations.gov/document?D=
OSHA-2007-0066-0679.) Please also
note that the docket for this document,
Docket Number OSHA–2018–0009,
exists solely to collect comments on the
information collection requirements in
the NPRM. The NPRM and the other
relevant documents for that rulemaking
are in Docket Number OSHA–2007–
0066, available on https://
www.regulations.gov.
E. Authority and Signature
Loren Sweatt, Deputy Assistant
Secretary of Labor for Occupational
Safety and Health, directed the
preparation of this document. The
authority for this document is the
Paperwork Reduction Act of 1995 (44
U.S.C. 3506 et seq.) and Secretary of
Labor’s Order No. 1–2012 (77 FR 3912).
Signed at Washington, DC, on July 17,
2018.
Loren Sweatt,
Deputy Assistant Secretary of Labor for
Occupational Safety and Health.
[FR Doc. 2018–15687 Filed 7–27–18; 8:45 am]
BILLING CODE 4510–26–P
LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 387
[Docket No. 15–CRB–0010–CA–S]
Adjustment of Cable Statutory License
Royalty Rates
Copyright Royalty Board,
Library of Congress.
AGENCY:
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ACTION:
36509
Proposed rule; modified.
The Copyright Royalty Judges
(Judges) publish for comment modified
proposed regulations to require affected
cable systems to pay a separate pertelecast royalty (a Sports Surcharge) in
addition to the other royalties that those
cable systems must pay under Section
111 of the Copyright Act.
DATES: Comments and objections are
due no later than August 29, 2018.
ADDRESSES: You may submit comments
and objections, identified by docket
number 17–CRB–0001–BER (2019–
2023), by any of the following methods:
CRB’s electronic filing application:
Submit comments online in eCRB at
https://app.crb.gov/.
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.
Instructions: Unless submitting
online, commenters must submit an
original, two paper copies, and an
electronic version on a CD. All
submissions must include a reference to
the CRB and this docket number. All
submissions will be posted without
change to eCRB at https://app.crb.gov/
including any personal information
provided.
Docket: For access to the docket to
read submitted background documents
or comments, go to eCRB, the Copyright
Royalty Board’s electronic filing and
case management system, at https://
app.crb.gov/ and search for docket
number 15–CRB–0010–CA–S.
FOR FURTHER INFORMATION CONTACT:
Anita Blaine, CRB Program Specialist,
by telephone at (202) 707–7658 or email
at crb@loc.gov.
SUPPLEMENTARY INFORMATION: On July 2,
2018, the Copyright Royalty Judges
(Judges) received a motion from the
Joint Sports Claimants (JSC),1 the
SUMMARY:
1 The Joint Sports Claimants are the Office of the
Commissioner of Baseball, the National Football
League, the National Basketball Association, the
Women’s National Basketball Association, the
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Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
NCTA—The internet and Television
Association, and the American Cable
Association, notifying the Judges that
they reached agreement on a modified
sports surcharge rule and requesting the
Judges adopt the rule. Joint Motion of
the Participating Parties to Suspend
Procedural Schedule and to Adopt
Modified Settlement at 1 (Jul. 2, 2018)
(Joint Motion). The Judges had
published an earlier version of the
proposed rule in the Federal Register at
82 FR 24611 (May 30, 2017) and a
request for reply and surreply comments
regarding that version at 82 FR 44368
(Sept. 22, 2017).
The moving parties also requested
that the Judges suspend, pending
resolution of the Joint Motion, the
procedural schedule set forth in the
Order Reinstating Case Schedule dated
January 18, 2018, and that the Judges
publish the modified proposed rule
expeditiously. On July 20, 2018, the
Judges issued an order suspending the
proceeding schedule, pending their
review of the moving parties’ agreement
and publication of the modified
proposed rule for public comment. The
Judges stated that they would defer
decision on adoption of the settlement
agreement and termination of the
proceeding until after they consider
comments, if any, filed in response to
publication of the modified proposed
rule.
A. Background
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Section 111(d)(1)(B) of the Copyright
Act (the Act), 17 U.S.C. 111(d)(1)(B),
sets forth the royalty rates that ‘‘Form 3’’
cable systems must pay to retransmit
broadcast signals pursuant to the
Section 111(c) statutory license. Form 3
systems are those with semi-annual
‘‘gross receipts’’ greater than $527,600.
See id. §§ 111(d)(1)(B), (E) & (F); 37 CFR
201.17(d). Section 801(b)(2)(C) of the
Act provides:
In the event of any change in the rules and
regulations of the Federal Communications
Commission [‘‘FCC’’] with respect to
syndicated and sports program exclusivity
after April 15, 1976, the rates established by
section 111(d)(1)(B) may be adjusted to
assure that such rates are reasonable in light
of the changes to such rules and regulations,
but any such adjustment shall apply only to
the affected television broadcast signals
carried on those systems affected by the
change.
17 U.S.C. 801(b)(2)(C).
Section 804(b)(1)(B) of the Copyright
Act states that, in ‘‘order to initiate
proceedings under section
[801(b)(2)(C)],’’ an interested party must
National Hockey League, and the National
Collegiate Athletic Association.
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file a petition with the Judges requesting
a rate change within twelve months of
the FCC’s action. 17 U.S.C. 804(b)(1)(B);
see H.R. Rep. No. 94–1476 at 178 (1976)
(right to seek review ‘‘exercisable for a
12 month period following the date
such changes are finally effective’’). The
FCC adopted sports exclusivity rules for
cable systems in 1975. See Report and
Order in Doc. No. 19417, 54 F.C.C.2d
265 (1975) (‘‘Sports Rules’’). The FCC
repealed the Sports Rules effective
November 24, 2014. See Sports Blackout
Rules, 79 FR 63547 (Oct. 24, 2014)
(Sports Rule Repeal). At the time of the
Sports Rule Repeal, the Sports Rules
were codified at 47 CFR 76.111 (2014).
On November 23, 2015, JSC filed a
rate adjustment petition pursuant to
Section 801(b)(2)(C) of the Copyright
Act. In June 2016 the Judges established
a procedural schedule for ruling on the
JSC petition. Order of Bifurcation . . .
and Scheduling Order (June 2016
Order). While the moving parties were
unable to settle this matter during the
voluntary negotiation period established
by the June 2016 Order, they continued
negotiations and agreed that this
proceeding should be terminated with
the adoption of a proposed rule.
Upon motion of the Participants in
January 2017, the Judges published the
proposed rule and received comments.
See 82 FR 24611 (May 30, 2017). The
Judges then published, in September
2017, a request for further comments on
the proposed rule. See 82 FR 44368.
After reviewing reply and surreply
comments, they declined to adopt the
proposed rates and reinstated a case
schedule. Order Reinstating Case
Schedule (Jan. 12, 2018).
In declining to adopt the proposed
settlement the Judges noted that
The applicable license in this proceeding
is the license to retransmit by cable beyond
the local service area the works of ‘‘any . . .
owner whose work was included in a
secondary transmission made by a cable
system . . . in whole or in part. . . .’’ 17
U.S.C. 111 (d)(3). [Major League Soccer
(MLS)] and potentially other professional
sports leagues are owners of, or represent
owners of, copyrights to televised
professional team sports events. The
regulations proposed by the JSC define an
‘‘eligible professional sports event’’ to
include only professional baseball, basketball
(men and women), football, and hockey. By
definition, MLS and any other professional
league scheduling team sports events for
telecast (and retransmission by those affected
cable systems) would be ineligible to receive
any portion of the sports programming
surcharge negotiated by the JSC and cable
providers. This proposed regulatory
configuration provides for licensing royalties
from Form 3 cable systems for some sports
leagues to the express exclusion of other
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leagues that own or represent owners of
protected works.
As proposed, the regulation for the
exclusive benefit of Major League Baseball,
the National Basketball Association, the
National Football League, the National
Hockey League, and the Women’s National
Basketball Association is contrary to the
applicable section 111 license. The Judges
decline to adopt the proposed settlement as
a basis for regulations that would bind nonparticipants to a zero rate.
Order Reinstating Case Schedule at 2.
In April 2018, MLS filed a late
Petition to Participate (PTP) and
accompanying motion for the Judges to
accept it. The Judges granted the motion
and accepted the PTP on July 20, 2018.
In July 2018, the participants filed a
modified proposed rule that addressed
the Judges’ concerns regarding the
proposed rule. Joint Motion at 4, 8. MLS
does not object to the modified
proposed rule. Id. at 2. The Judges
hereby publish it for comment.
B. Scope of the Modified Proposed Rule
According to the moving parties, the
modified proposed Sports Surcharge
differs from the January 2017 proposal
in two key respects: A cable operator’s
obligation to pay a Sports Surcharge
royalty is not limited to retransmissions
of sports events affiliated with specific
JSC members; 2 and the modified Sports
Surcharge includes language expressly
stating that no copyright owner of a
retransmitted telecast of a sports event
is precluded from seeking Sports
Surcharge royalties if the retransmission
would have been subject to deletion
under the former FCC Sports Blackout
Rule. Joint Motion at 2.
The moving parties also state that
‘‘nothing in the proposed rule would
require the Judges to distribute the
Sports Surcharge royalties’’ only to
sports organizations whose telecasts
trigger the ‘‘pay-in’’ obligation. Rather,
‘‘[t]he determination of the recipients of
those royalties (and the amount of
royalties those recipients should
receive) would be addressed by the
Judges in future allocation and
distribution proceedings’’ absent a
settlement. Id. at 4. As modified, the
rule draws a bright line between the
‘‘pay-in’’ methodology by which
affected cable systems will compute
their surcharge royalty payment
obligations and the ‘‘pay out’’ process
by which those royalty payments are
distributed. Id. at 5.
According to the moving parties, the
modified Sports Surcharge does not
2 Under the January 2017 proposal the cable
operator’s obligation to pay Sports Surcharge
royalties was limited to retransmissions of telecasts
of sports events affiliated with specific JSC
members. Joint Motion at 5.
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Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
change the previously agreed upon per
event royalty rate of 0.025 percent of an
affected cable system’s gross receipts.
Moreover, the definition of which cable
systems may have to pay the surcharge
has not changed (i.e., systems that
would have been subject to the FCC
Sports Blackout Rule prior to its repeal).
Under the modified rule, a cable
system’s retransmission of a sports
event telecast that would have been
subject to deletion under the FCC Sports
Blackout Rule triggers a Sports
Surcharge pay-in by the system’s
operator—as long as the holder of the
broadcast rights in the event (or its
agent) provides the affected system: (1)
Written notice containing information
comparable to that required to invoke
the former FCC Sports Blackout Rule;
and (2) documentary evidence that the
sports entity giving the notice required
to trigger the Sports Surcharge pay-in
provision previously invoked the FCC
Sports Blackout Rule between January 1,
2012 and November 23, 2014 (the day
before the repeal of the rule took effect).
Joint Motion at 6.
With respect to certain collegiate
events, the pay-in rule caps the
maximum number of events involving a
specific team that can trigger an affected
cable system’s surcharge payment
obligation in a particular accounting
period based on the largest number of
events as to which the FCC Sports
Blackout Rule was invoked by that
specific sports entity during any of the
accounting periods occurring during the
January 1, 2012 through November 23,
2014 period. Id. at n.12.
In addition, the Joint Motion proposes
a new effective date in 2019 and points
out that the rule proposal can be
reconsidered in 2020 pursuant to
statute. Id. at 2 n.6; see 17 U.S.C.
804(b)(1)(B).
According to the moving parties, the
royalty rate reflected in the modified
proposed rule represents a negotiated
compromise regarding adoption of a
royalty surcharge and limiting when
licensors must pay it, but not regulating
the method of determining how the
funds should be distributed. Id. at 6–7.
The moving parties state that they do
not intend for the agreed-upon
methodology for calculating a cable
system’s pay-in obligation to be
accorded any precedential effect or to be
regarded as representing any agreement
as to the fair market value, now or in the
future, of the secondary transmission of
any sports event or of the economic or
other impact of the repeal of the FCC
Sports Blackout Rule. Joint Motion at 6.
The moving parties state that if the
Judges do not adopt the proposed rule,
each of the moving parties reserves the
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right to seek to demonstrate that the
Sports Surcharge originally proposed is
not contrary to law and/or that the
Judges should adopt a different rate
adjustment to account for the repeal of
the FCC Sports Blackout Rule. Id. at 8
n.13.
C. The Judges’ Authority To Adopt the
Proposed Rule
According to the moving parties, ‘‘a
key Congressional objective underlying
the Judges’ rate-setting authority is the
promotion of voluntary settlements
rather than litigation.’’ Id. at 7, citing
H.R. Rep. No. 108–408 at 24 (2004)
(referring to the legislative policy of
‘‘facilitating and encouraging settlement
agreements for determining royalty
rates’’). Consistent with that objective,
the Judges may accept a settlement
reached by ‘‘some or all of the
participants’’ in a rate proceeding ‘‘at
any time during the proceeding.’’ 17
U.S.C. 801(b)(7)(A).
The Act requires that the Judges
afford those who ‘‘would be bound by
the terms, rates or other determination’’
in a settlement agreement ‘‘an
opportunity to comment on the
agreement.’’ 17 U.S.C. 801(b)(7)(A)(i).
The Copyright Royalty Board rules also
require that the Judges ‘‘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.’’ 37
CFR 351.2(b)(2).
D. Solicitation of Comments
The Judges seek comments on the
moving parties’ proposal. In particular,
the Judges seek comment on whether
the proposal is consistent with Section
111 of the Copyright Act which
provides that the applicable license
granted in that section is the license to
retransmit by cable beyond the local
service area the works of ‘‘any . . .
owner whose work was included in a
secondary transmission made by a cable
system . . . in whole or in part. . . .’’
17 U.S.C. 111(d)(3), and consistent with
the Judges’ interpretation of that section
as elaborated in the Order Reinstating
Case Schedule.
In addition to general comments for or
against the proposal, the Judges seek
comment on whether the proposed
provision in section 387.2(e)(9)
(‘‘Nothing herein shall preclude any
copyright owner of a live television
broadcast, the secondary transmission of
which would have been subject to
deletion under the FCC Sports Blackout
Rule, from receiving a share of royalties
paid pursuant to this paragraph.’’) could
apply to the secondary transmissions of
the live television broadcasts of any
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36511
entity other than a current member of
the JSC.3 In other words, would the
phrase ‘‘the secondary transmission of
which would have been subject to
deletion under the FCC Sports Blackout
Rule’’ enable any entity beyond the
current members of the JSC to qualify
for a share of royalties from the Sports
Surcharge? If the answer is yes, which
entities’ transmissions would qualify for
a share? If the answer is no (i.e., only
JSC members could qualify), then is the
current proposal nevertheless still
consistent with the Section 111 license?
If so, why?
Interested parties may comment and
object to the modified proposed
regulations contained in this notice.
Such comments and objections must be
submitted no later than August 29,
2018.
List of Subjects in 37 CFR Part 387
Copyright, Cable television, Royalties.
Modified 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 proposes
to amend 37 CFR chapter III as follows:
PART 387—ADJUSTMENT OF
ROYALTY FEE FOR CABLE
COMPULSORY LICENSE
1. The authority citation for part 387
continues to read as follows:
■
Authority: 17 U.S.C. 801(b)(2), 803(b)(6).
2. Amend § 387.2 by:
a. Redesignating paragraph (e) as
paragraph (f) and
■ b. Adding a new paragraph (e) to read
as follows:
■
■
§ 387.2 Royalty fee for compulsory license
for secondary transmission by cable
systems.
*
*
*
*
*
(e) Sports programming surcharge.
Commencing with the first semiannual
accounting period of 2019 and for each
semiannual accounting period
thereafter, in the case of an affected
cable system filing Form SA3 as
referenced in 37 CFR 201.17(d)(2)(ii)
(2014), the royalty rate shall be, in
addition to the amounts specified in
paragraphs (a), (c) and (d) of this
section, a surcharge of 0.025 percent of
the affected cable system’s gross receipts
for the secondary transmission to
subscribers of each live television
broadcast of a sports event where the
secondary transmission of such
broadcast would have been subject to
3 See
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note 1, supra.
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Federal Register / Vol. 83, No. 146 / Monday, July 30, 2018 / Proposed Rules
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deletion under the FCC Sports Blackout
Rule. For purposes of this paragraph,
(1) The term ‘‘cable system’’ shall
have the same meaning as in 17 U.S.C.
111(f)(3);
(2) An ‘‘affected cable system’’ (i) is a
‘‘community unit,’’ as the comparable
term is defined or interpreted in
accordance with § 76.5(dd) of the rules
and regulations of the Federal
Communications Commission in effect
as of November 23, 2014, 47 CFR
76.5(dd) (2014);
(ii) that is located in whole or in part
within the 35-mile specified zone of a
television broadcast station licensed to
a community in which a sports event is
taking place, provided that if there is no
television broadcast station licensed to
the community in which a sports event
is taking place, the applicable specified
zone shall be that of the television
broadcast station licensed to the
community with which the sports event
or team is identified, or, if the event or
local team is not identified with any
particular community, the nearest
community to which a television station
is licensed; and
(iii) whose royalty fee is specified by
17 U.S.C. 111(d)(1)(B);
(3) A ‘‘television broadcast’’ of a
sports event must qualify as a ‘‘nonnetwork television program’’ within the
meaning of 17 U.S.C. 111(d)(3)(A);
(4) The term ‘‘specified zone’’ shall be
defined as the comparable term is
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defined or interpreted in accordance
with § 76.5(e) of the rules and
regulations of the Federal
Communications Commission in effect
as of November 23, 2014, 47 CFR 76.5(e)
(2014);
(5) The term ‘‘gross receipts’’ shall
have the same meaning as in 17 U.S.C.
111(d)(1)(B) and shall include all gross
receipts of the affected cable system
during the semiannual accounting
period except those from the affected
cable system’s subscribers who reside in
(i) the local service area of the primary
transmitter, as defined in 17 U.S.C.
111(f)(4);
(ii) any community where the cable
system has fewer than 1,000 subscribers;
(iii) any community located wholly
outside the specified zone referenced in
paragraph (e)(4) above; and
(iv) any community where the
primary transmitter was lawfully carried
prior to March 31, 1972;
(6) The term ‘‘FCC Sports Blackout
Rule’’ refers to § 76.111 of the rules and
regulations of the Federal
Communications Commission in effect
as of November 23, 2014, 47 CFR 76.111
(2014);
(7) Subject to paragraph (e)(8) of this
section, the surcharge will apply to the
secondary transmission of a primary
transmission of a live television
broadcast of a sports event only where
the holder of the broadcast rights to the
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sports event or its agent has provided
the affected cable system
(i) Advance written notice regarding
such secondary transmission as required
by § 76.111(b) and (c) of the FCC Sports
Blackout Rule and
(ii) documentary evidence that the
specific team on whose behalf the notice
is given had invoked the protection
afforded by the FCC Sports Blackout
Rule during the period from January 1,
2012, through November 23, 2014;
(8) In the case of collegiate sports
events, the number of events involving
a specific team as to which an affected
cable system must pay the surcharge
will be no greater than the largest
number of events as to which the FCC
Sports Blackout Rule was invoked in a
particular geographic area by such team
during any one of the accounting
periods occurring between January 1,
2012, and November 23, 2014;
(9) Nothing herein shall preclude any
copyright owner of a live television
broadcast, the secondary transmission of
which would have been subject to
deletion under the FCC Sports Blackout
Rule, from receiving a share of royalties
paid pursuant to this paragraph.
*
*
*
*
*
Dated: July 24, 2018.
Jesse M. Feder,
Copyright Royalty Judge.
[FR Doc. 2018–16175 Filed 7–27–18; 8:45 am]
BILLING CODE 1410–72–P
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]]>Agencies
[Federal Register Volume 83, Number 146 (Monday, July 30, 2018)]
[Proposed Rules]
[Pages 36509-36512]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16175]
=======================================================================
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LIBRARY OF CONGRESS
Copyright Royalty Board
37 CFR Part 387
[Docket No. 15-CRB-0010-CA-S]
Adjustment of Cable Statutory License Royalty Rates
AGENCY: Copyright Royalty Board, Library of Congress.
ACTION: Proposed rule; modified.
-----------------------------------------------------------------------
SUMMARY: The Copyright Royalty Judges (Judges) publish for comment
modified proposed regulations to require affected cable systems to pay
a separate per-telecast royalty (a Sports Surcharge) in addition to the
other royalties that those cable systems must pay under Section 111 of
the Copyright Act.
DATES: Comments and objections are due no later than August 29, 2018.
ADDRESSES: You may submit comments and objections, identified by docket
number 17-CRB-0001-BER (2019-2023), by any of the following methods:
CRB's electronic filing application: Submit comments online in eCRB
at https://app.crb.gov/.
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.
Instructions: Unless submitting online, commenters must submit an
original, two paper copies, and an electronic version on a CD. All
submissions must include a reference to the CRB and this docket number.
All submissions will be posted without change to eCRB at https://app.crb.gov/ including any personal information provided.
Docket: For access to the docket to read submitted background
documents or comments, go to eCRB, the Copyright Royalty Board's
electronic filing and case management system, at https://app.crb.gov/
and search for docket number 15-CRB-0010-CA-S.
FOR FURTHER INFORMATION CONTACT: Anita Blaine, CRB Program Specialist,
by telephone at (202) 707-7658 or email at [email protected].
SUPPLEMENTARY INFORMATION: On July 2, 2018, the Copyright Royalty
Judges (Judges) received a motion from the Joint Sports Claimants
(JSC),\1\ the
[[Page 36510]]
NCTA--The internet and Television Association, and the American Cable
Association, notifying the Judges that they reached agreement on a
modified sports surcharge rule and requesting the Judges adopt the
rule. Joint Motion of the Participating Parties to Suspend Procedural
Schedule and to Adopt Modified Settlement at 1 (Jul. 2, 2018) (Joint
Motion). The Judges had published an earlier version of the proposed
rule in the Federal Register at 82 FR 24611 (May 30, 2017) and a
request for reply and surreply comments regarding that version at 82 FR
44368 (Sept. 22, 2017).
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\1\ The Joint Sports Claimants are the Office of the
Commissioner of Baseball, the National Football League, the National
Basketball Association, the Women's National Basketball Association,
the National Hockey League, and the National Collegiate Athletic
Association.
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The moving parties also requested that the Judges suspend, pending
resolution of the Joint Motion, the procedural schedule set forth in
the Order Reinstating Case Schedule dated January 18, 2018, and that
the Judges publish the modified proposed rule expeditiously. On July
20, 2018, the Judges issued an order suspending the proceeding
schedule, pending their review of the moving parties' agreement and
publication of the modified proposed rule for public comment. The
Judges stated that they would defer decision on adoption of the
settlement agreement and termination of the proceeding until after they
consider comments, if any, filed in response to publication of the
modified proposed rule.
A. Background
Section 111(d)(1)(B) of the Copyright Act (the Act), 17 U.S.C.
111(d)(1)(B), sets forth the royalty rates that ``Form 3'' cable
systems must pay to retransmit broadcast signals pursuant to the
Section 111(c) statutory license. Form 3 systems are those with semi-
annual ``gross receipts'' greater than $527,600. See id. Sec. Sec.
111(d)(1)(B), (E) & (F); 37 CFR 201.17(d). Section 801(b)(2)(C) of the
Act provides:
In the event of any change in the rules and regulations of the
Federal Communications Commission [``FCC''] with respect to
syndicated and sports program exclusivity after April 15, 1976, the
rates established by section 111(d)(1)(B) may be adjusted to assure
that such rates are reasonable in light of the changes to such rules
and regulations, but any such adjustment shall apply only to the
affected television broadcast signals carried on those systems
affected by the change.
17 U.S.C. 801(b)(2)(C).
Section 804(b)(1)(B) of the Copyright Act states that, in ``order
to initiate proceedings under section [801(b)(2)(C)],'' an interested
party must file a petition with the Judges requesting a rate change
within twelve months of the FCC's action. 17 U.S.C. 804(b)(1)(B); see
H.R. Rep. No. 94-1476 at 178 (1976) (right to seek review ``exercisable
for a 12 month period following the date such changes are finally
effective''). The FCC adopted sports exclusivity rules for cable
systems in 1975. See Report and Order in Doc. No. 19417, 54 F.C.C.2d
265 (1975) (``Sports Rules''). The FCC repealed the Sports Rules
effective November 24, 2014. See Sports Blackout Rules, 79 FR 63547
(Oct. 24, 2014) (Sports Rule Repeal). At the time of the Sports Rule
Repeal, the Sports Rules were codified at 47 CFR 76.111 (2014).
On November 23, 2015, JSC filed a rate adjustment petition pursuant
to Section 801(b)(2)(C) of the Copyright Act. In June 2016 the Judges
established a procedural schedule for ruling on the JSC petition. Order
of Bifurcation . . . and Scheduling Order (June 2016 Order). While the
moving parties were unable to settle this matter during the voluntary
negotiation period established by the June 2016 Order, they continued
negotiations and agreed that this proceeding should be terminated with
the adoption of a proposed rule.
Upon motion of the Participants in January 2017, the Judges
published the proposed rule and received comments. See 82 FR 24611 (May
30, 2017). The Judges then published, in September 2017, a request for
further comments on the proposed rule. See 82 FR 44368. After reviewing
reply and surreply comments, they declined to adopt the proposed rates
and reinstated a case schedule. Order Reinstating Case Schedule (Jan.
12, 2018).
In declining to adopt the proposed settlement the Judges noted that
The applicable license in this proceeding is the license to
retransmit by cable beyond the local service area the works of ``any
. . . owner whose work was included in a secondary transmission made
by a cable system . . . in whole or in part. . . .'' 17 U.S.C. 111
(d)(3). [Major League Soccer (MLS)] and potentially other
professional sports leagues are owners of, or represent owners of,
copyrights to televised professional team sports events. The
regulations proposed by the JSC define an ``eligible professional
sports event'' to include only professional baseball, basketball
(men and women), football, and hockey. By definition, MLS and any
other professional league scheduling team sports events for telecast
(and retransmission by those affected cable systems) would be
ineligible to receive any portion of the sports programming
surcharge negotiated by the JSC and cable providers. This proposed
regulatory configuration provides for licensing royalties from Form
3 cable systems for some sports leagues to the express exclusion of
other leagues that own or represent owners of protected works.
As proposed, the regulation for the exclusive benefit of Major
League Baseball, the National Basketball Association, the National
Football League, the National Hockey League, and the Women's
National Basketball Association is contrary to the applicable
section 111 license. The Judges decline to adopt the proposed
settlement as a basis for regulations that would bind non-
participants to a zero rate.
Order Reinstating Case Schedule at 2.
In April 2018, MLS filed a late Petition to Participate (PTP) and
accompanying motion for the Judges to accept it. The Judges granted the
motion and accepted the PTP on July 20, 2018.
In July 2018, the participants filed a modified proposed rule that
addressed the Judges' concerns regarding the proposed rule. Joint
Motion at 4, 8. MLS does not object to the modified proposed rule. Id.
at 2. The Judges hereby publish it for comment.
B. Scope of the Modified Proposed Rule
According to the moving parties, the modified proposed Sports
Surcharge differs from the January 2017 proposal in two key respects: A
cable operator's obligation to pay a Sports Surcharge royalty is not
limited to retransmissions of sports events affiliated with specific
JSC members; \2\ and the modified Sports Surcharge includes language
expressly stating that no copyright owner of a retransmitted telecast
of a sports event is precluded from seeking Sports Surcharge royalties
if the retransmission would have been subject to deletion under the
former FCC Sports Blackout Rule. Joint Motion at 2.
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\2\ Under the January 2017 proposal the cable operator's
obligation to pay Sports Surcharge royalties was limited to
retransmissions of telecasts of sports events affiliated with
specific JSC members. Joint Motion at 5.
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The moving parties also state that ``nothing in the proposed rule
would require the Judges to distribute the Sports Surcharge royalties''
only to sports organizations whose telecasts trigger the ``pay-in''
obligation. Rather, ``[t]he determination of the recipients of those
royalties (and the amount of royalties those recipients should receive)
would be addressed by the Judges in future allocation and distribution
proceedings'' absent a settlement. Id. at 4. As modified, the rule
draws a bright line between the ``pay-in'' methodology by which
affected cable systems will compute their surcharge royalty payment
obligations and the ``pay out'' process by which those royalty payments
are distributed. Id. at 5.
According to the moving parties, the modified Sports Surcharge does
not
[[Page 36511]]
change the previously agreed upon per event royalty rate of 0.025
percent of an affected cable system's gross receipts. Moreover, the
definition of which cable systems may have to pay the surcharge has not
changed (i.e., systems that would have been subject to the FCC Sports
Blackout Rule prior to its repeal).
Under the modified rule, a cable system's retransmission of a
sports event telecast that would have been subject to deletion under
the FCC Sports Blackout Rule triggers a Sports Surcharge pay-in by the
system's operator--as long as the holder of the broadcast rights in the
event (or its agent) provides the affected system: (1) Written notice
containing information comparable to that required to invoke the former
FCC Sports Blackout Rule; and (2) documentary evidence that the sports
entity giving the notice required to trigger the Sports Surcharge pay-
in provision previously invoked the FCC Sports Blackout Rule between
January 1, 2012 and November 23, 2014 (the day before the repeal of the
rule took effect). Joint Motion at 6.
With respect to certain collegiate events, the pay-in rule caps the
maximum number of events involving a specific team that can trigger an
affected cable system's surcharge payment obligation in a particular
accounting period based on the largest number of events as to which the
FCC Sports Blackout Rule was invoked by that specific sports entity
during any of the accounting periods occurring during the January 1,
2012 through November 23, 2014 period. Id. at n.12.
In addition, the Joint Motion proposes a new effective date in 2019
and points out that the rule proposal can be reconsidered in 2020
pursuant to statute. Id. at 2 n.6; see 17 U.S.C. 804(b)(1)(B).
According to the moving parties, the royalty rate reflected in the
modified proposed rule represents a negotiated compromise regarding
adoption of a royalty surcharge and limiting when licensors must pay
it, but not regulating the method of determining how the funds should
be distributed. Id. at 6-7.
The moving parties state that they do not intend for the agreed-
upon methodology for calculating a cable system's pay-in obligation to
be accorded any precedential effect or to be regarded as representing
any agreement as to the fair market value, now or in the future, of the
secondary transmission of any sports event or of the economic or other
impact of the repeal of the FCC Sports Blackout Rule. Joint Motion at
6. The moving parties state that if the Judges do not adopt the
proposed rule, each of the moving parties reserves the right to seek to
demonstrate that the Sports Surcharge originally proposed is not
contrary to law and/or that the Judges should adopt a different rate
adjustment to account for the repeal of the FCC Sports Blackout Rule.
Id. at 8 n.13.
C. The Judges' Authority To Adopt the Proposed Rule
According to the moving parties, ``a key Congressional objective
underlying the Judges' rate-setting authority is the promotion of
voluntary settlements rather than litigation.'' Id. at 7, citing H.R.
Rep. No. 108-408 at 24 (2004) (referring to the legislative policy of
``facilitating and encouraging settlement agreements for determining
royalty rates''). Consistent with that objective, the Judges may accept
a settlement reached by ``some or all of the participants'' in a rate
proceeding ``at any time during the proceeding.'' 17 U.S.C.
801(b)(7)(A).
The Act requires that the Judges afford those who ``would be bound
by the terms, rates or other determination'' in a settlement agreement
``an opportunity to comment on the agreement.'' 17 U.S.C.
801(b)(7)(A)(i). The Copyright Royalty Board rules also require that
the Judges ``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.'' 37 CFR 351.2(b)(2).
D. Solicitation of Comments
The Judges seek comments on the moving parties' proposal. In
particular, the Judges seek comment on whether the proposal is
consistent with Section 111 of the Copyright Act which provides that
the applicable license granted in that section is the license to
retransmit by cable beyond the local service area the works of ``any .
. . owner whose work was included in a secondary transmission made by a
cable system . . . in whole or in part. . . .'' 17 U.S.C. 111(d)(3),
and consistent with the Judges' interpretation of that section as
elaborated in the Order Reinstating Case Schedule.
In addition to general comments for or against the proposal, the
Judges seek comment on whether the proposed provision in section
387.2(e)(9) (``Nothing herein shall preclude any copyright owner of a
live television broadcast, the secondary transmission of which would
have been subject to deletion under the FCC Sports Blackout Rule, from
receiving a share of royalties paid pursuant to this paragraph.'')
could apply to the secondary transmissions of the live television
broadcasts of any entity other than a current member of the JSC.\3\ In
other words, would the phrase ``the secondary transmission of which
would have been subject to deletion under the FCC Sports Blackout
Rule'' enable any entity beyond the current members of the JSC to
qualify for a share of royalties from the Sports Surcharge? If the
answer is yes, which entities' transmissions would qualify for a share?
If the answer is no (i.e., only JSC members could qualify), then is the
current proposal nevertheless still consistent with the Section 111
license? If so, why?
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\3\ See note 1, supra.
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Interested parties may comment and object to the modified proposed
regulations contained in this notice. Such comments and objections must
be submitted no later than August 29, 2018.
List of Subjects in 37 CFR Part 387
Copyright, Cable television, Royalties.
Modified 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 proposes to amend 37 CFR chapter III as follows:
PART 387--ADJUSTMENT OF ROYALTY FEE FOR CABLE COMPULSORY LICENSE
0
1. The authority citation for part 387 continues to read as follows:
Authority: 17 U.S.C. 801(b)(2), 803(b)(6).
0
2. Amend Sec. 387.2 by:
0
a. Redesignating paragraph (e) as paragraph (f) and
0
b. Adding a new paragraph (e) to read as follows:
Sec. 387.2 Royalty fee for compulsory license for secondary
transmission by cable systems.
* * * * *
(e) Sports programming surcharge. Commencing with the first
semiannual accounting period of 2019 and for each semiannual accounting
period thereafter, in the case of an affected cable system filing Form
SA3 as referenced in 37 CFR 201.17(d)(2)(ii) (2014), the royalty rate
shall be, in addition to the amounts specified in paragraphs (a), (c)
and (d) of this section, a surcharge of 0.025 percent of the affected
cable system's gross receipts for the secondary transmission to
subscribers of each live television broadcast of a sports event where
the secondary transmission of such broadcast would have been subject to
[[Page 36512]]
deletion under the FCC Sports Blackout Rule. For purposes of this
paragraph,
(1) The term ``cable system'' shall have the same meaning as in 17
U.S.C. 111(f)(3);
(2) An ``affected cable system'' (i) is a ``community unit,'' as
the comparable term is defined or interpreted in accordance with Sec.
76.5(dd) of the rules and regulations of the Federal Communications
Commission in effect as of November 23, 2014, 47 CFR 76.5(dd) (2014);
(ii) that is located in whole or in part within the 35-mile
specified zone of a television broadcast station licensed to a
community in which a sports event is taking place, provided that if
there is no television broadcast station licensed to the community in
which a sports event is taking place, the applicable specified zone
shall be that of the television broadcast station licensed to the
community with which the sports event or team is identified, or, if the
event or local team is not identified with any particular community,
the nearest community to which a television station is licensed; and
(iii) whose royalty fee is specified by 17 U.S.C. 111(d)(1)(B);
(3) A ``television broadcast'' of a sports event must qualify as a
``non-network television program'' within the meaning of 17 U.S.C.
111(d)(3)(A);
(4) The term ``specified zone'' shall be defined as the comparable
term is defined or interpreted in accordance with Sec. 76.5(e) of the
rules and regulations of the Federal Communications Commission in
effect as of November 23, 2014, 47 CFR 76.5(e) (2014);
(5) The term ``gross receipts'' shall have the same meaning as in
17 U.S.C. 111(d)(1)(B) and shall include all gross receipts of the
affected cable system during the semiannual accounting period except
those from the affected cable system's subscribers who reside in (i)
the local service area of the primary transmitter, as defined in 17
U.S.C. 111(f)(4);
(ii) any community where the cable system has fewer than 1,000
subscribers;
(iii) any community located wholly outside the specified zone
referenced in paragraph (e)(4) above; and
(iv) any community where the primary transmitter was lawfully
carried prior to March 31, 1972;
(6) The term ``FCC Sports Blackout Rule'' refers to Sec. 76.111 of
the rules and regulations of the Federal Communications Commission in
effect as of November 23, 2014, 47 CFR 76.111 (2014);
(7) Subject to paragraph (e)(8) of this section, the surcharge will
apply to the secondary transmission of a primary transmission of a live
television broadcast of a sports event only where the holder of the
broadcast rights to the sports event or its agent has provided the
affected cable system
(i) Advance written notice regarding such secondary transmission as
required by Sec. 76.111(b) and (c) of the FCC Sports Blackout Rule and
(ii) documentary evidence that the specific team on whose behalf
the notice is given had invoked the protection afforded by the FCC
Sports Blackout Rule during the period from January 1, 2012, through
November 23, 2014;
(8) In the case of collegiate sports events, the number of events
involving a specific team as to which an affected cable system must pay
the surcharge will be no greater than the largest number of events as
to which the FCC Sports Blackout Rule was invoked in a particular
geographic area by such team during any one of the accounting periods
occurring between January 1, 2012, and November 23, 2014;
(9) Nothing herein shall preclude any copyright owner of a live
television broadcast, the secondary transmission of which would have
been subject to deletion under the FCC Sports Blackout Rule, from
receiving a share of royalties paid pursuant to this paragraph.
* * * * *
Dated: July 24, 2018.
Jesse M. Feder,
Copyright Royalty Judge.
[FR Doc. 2018-16175 Filed 7-27-18; 8:45 am]
BILLING CODE 1410-72-P
