SUPPLEMENTARY INFORMATION:

Background

Section 118 of the Copyright Act, title 17 of the United States Code, establishes a statutory license for the use of certain copyrighted works in connection with noncommercial television and radio broadcasting. Chapter 8 of the Copyright Act requires the Copyright Royalty Judges (“Judges”) to conduct proceedings every five years to determine the rates and terms for the section 118 license. 17 U.S.C. 801(b)(1), 804(b)(6). In accordance with section 804(b)(6), the Judges commenced the proceeding to set rates and terms for the period 2018-2022 on January 5, 2016. 77 FR 71104.

In the Federal Register notice, the Judges requested interested parties to submit petitions to participate. 81 FR 256 (January 5, 2016). Petitions to Participate (“PTP”s) were received from: The American Society of Authors, Composers and Publishers (“ASCAP”); SESAC, Inc.; Broadcast Music, Inc. (“BMI”); Educational Media Foundation (“EMF”); National Public Radio (“NPR”) and the Public Broadcasting Service (“PBS”), jointly; National Religious Broadcasters Noncommercial Music License Committee (“NRBNMLC”); the Church Music Publishers' Association (“CMPA”); ^[1] the National Music Publishers' Association (“NMPA”), The Harry Fox Agency (“HFA”), National Association of College and University Business Officers (“NACUBO”), and David Powell.^[2]

The Judges set the timetable for the three-month negotiation period, see17 U.S.C. 803(b)(3), and directed the participants to submit written direct statements no later than November 7, 2016. Notice of Participants, Commencement of Voluntary Negotiation Period, and Case Scheduling Order (Mar. 25, 2016). The Judges amended the case schedule twice to accommodate ongoing negotiations. See Order for Further Proceedings and Modified Case Schedule (Aug. 12, 2016). In July and September 2016, several participants filed notices of settlement and proposed rates and terms for adoption. No participant filed a written direct statement. See Order Requiring Submission of Proposed Regulations by National Public Radio and Public Broadcasting System at 1 (Oct. 19, 2017).

There are two ways copyright owners and public broadcasting entities ^[3] may negotiate rates and terms under the section 118 statutory license. First, copyright owners may negotiate rates and terms with specific public broadcasting entities for the use of all of the copyright owners' works covered by the license. Section 118(b)(2) provides that such license agreements “shall be given effect in lieu of any determination by the * * * Copyright Royalty Judges,” provided that copies of the agreement are submitted to the Judges “within 30 days of execution.” 17 U.S.C. 118(b)(2). The Judges received one agreement in this category for which no further action is required.^[4]

Second, copyright owners and public broadcasting entities may negotiate rates and terms for categories of copyrighted works and uses that would be binding on all owners and entities using the same license and submit them to the Judges for approval. Section 801(b)(7)(A) provides that the Copyright Royalty Judges shall provide to those that would be bound by the terms, rates, or other determination set by any agreement in a proceeding to determine royalty rates an opportunity to comment on the agreement and shall provide to participants in the proceeding under section 803(b)(2) that would be bound by the terms, rates, or other determination set by the agreement an opportunity to comment on the agreement and object to its adoption as a basis for statutory terms and rates; and that the Copyright Royalty Judges may decline to adopt the agreement as a basis for statutory terms and rates for participants that are not parties to the agreement, if any participant described in clause (i) objects to the agreement and the Copyright Royalty Judges conclude, based on the record before them if one exists, that the agreement does not provide a reasonable basis for setting statutory terms and rates.

17 U.S.C. 801(b)(7)(A).

On or about September 1, 2017, the Judges received a joint submission from ASCAP, BMI, HFA, NACUBO, NMPA, NRBNMLC, and SESAC containing proposed regulations that integrated the several separately filed proposals within this category. On October 25, 2017, the Judges received two more proposals within this category, one from NPR and PBS and a joint proposal from HFA, NMPA, PBS, NPR, and CPB.^[5]

NACUBO Joint Proposals

The joint proposals of NACUBO and each of ASCAP, BMI, and SESAC propose to modify the royalty rates set forth in § 381.5. The rates proposed in the NACUBO/BMI and NACUBO/ASCAP submissions reflect a modification of the fees in different rate tiers. NACUBO/BMI Joint Proposal at 5, App. A. NACUBO/ASCAP Joint Proposal at 5, App. A. The NACUBO/SESAC submission retains a flat rate which they propose adjusting, starting in 2018, by the change in the Consumer Price Index or one-and-a-half percent, whichever is greater. NACUBO/SESAC Joint Proposal App. A.

NRBNMLC Joint Proposals

The joint proposals entered into by NRBNMLC and each of HFA/NMPA, ASCAP, BMI, and SESAC propose carrying forward unchanged the current provisions set forth in §§ 381.1 (except to replace “January 1, 2013” with “January 1, 2018” and “December 31, 2017” with “December 31, 2022”), 381.2, 381.9, and 381.11.

The joint proposal between NMPA/HFA and NRBNMLC states that the rates in § 381.7(b)(4) should be modified. NMPA/HFA and NRBNMLC Joint Proposal at 2-3.

Each of the joint proposals between NRBNMLC and ASCAP, BMI and SESAC propose modifications to § 381.6. ASCAP and NRBNMLC Joint proposal at 3; BMI and NRBNMLC Joint proposal at 5; SESAC and NRBNMLC Joint proposal at 3.

NPR/PBS Joint Proposals

NPR and PBS filed a joint proposal with NMPA and HFA to modify fees in ( printed page 51591) § 381.7, a change that reflects the same percentage increase made in the prior rate period because such increase “is fair and reasonable.” HFA/NMPA and NPR/PBS Joint Proposal at 2.

NPR and PBS filed proposed changes to fees in § 381.4 pursuant to negotiated license agreements with ASCAP, BMI, and SESAC. The changes conform to analogous changes in §§ 381.5 and 381.6.

As noted above, the members of the public and participants in this rate proceeding may comment and object to any or all of the proposed regulations contained in this notice.

Proposed Regulations

For the reasons set forth in the preamble, the Copyright Royalty Judges propose to amend part 381 to chapter III of title 37 of the Code of Federal Regulations as set forth below:

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

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

2. In § 381.1 remove “2013” and, in its place, add “2018”, and remove “2017” and, in its place, add “2022”.

3. Amend § 381.4 as follows:

a. Revise paragraph (a);

b. In paragraph (c) remove “2013” and, in its place, add “2018”, and remove “2017” and, in its place, add “2022”; and

c. Remove paragraph (d).

The revision reads as follows:

4. Amend § 381.5 by revising paragraph (c) to read as follows:

5. Amend § 381.6 as follows:

a. Remove from the first sentence of paragraph (a) the words “which are”; and

b. Revise paragraph (d).

The revision reads as follows:

6. Amend § 381.7 as follows:

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

b. Revise paragraph (b)(2)(i) through (iv); and

c. Revise paragraph (b)(4)(i) through (iii).

The revisions read as follows:

7. Amend § 381.10 as follows:

a. In paragraph (a), remove “2013” and, in its place, add “2018”, and remove “2017” and, in its place, add “2022”;

b. Revise paragraph (b);

The revision reads as follows: