[Federal Register: December 11, 1996 (Volume 61, Number 239)]
[Notices]
[Page 65243-65245]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. 96-4 CARP DPRA]
Digital Phonorecord Delivery Rate Adjustment Proceeding
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of precontroversy discovery schedule.
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SUMMARY: The Library of Congress is announcing a new precontroversy
discovery period for determining reasonable rates and terms for digital
transmissions that constitute a digital phonorecord delivery. The
Library is also establishing new dates for the filing of petitions to
convene a Copyright Arbitration Royalty Panel (CARP) and Notices of
Intent to Participate. This action is intended to give all interested
parties additional time to negotiate voluntary agreements.
DATES: Petitions to convene a CARP to determine the terms and rates for
digital phonorecord deliveries must be filed by March 3, 1997. Notices
of Intent to Participate must be filed by March 17, 1997.
ADDRESSES: Petitions to convene a CARP and Notices of Intent to
Participate, when sent by mail, should be addressed to: Copyright
Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station,
Washington, DC 20024. If hand delivered, they should be brought to:
Office of the General Counsel, Copyright Office, James Madison Memorial
Building, Room LM-407, First and Independence Avenues, SE, Washington,
DC.
FOR FURTHER INFORMATION CONTACT: William Roberts, Senior Attorney for
Compulsory Licenses, or Tanya Sandros, Attorney Advisor, Copyright
Arbitration Royalty Panels, P.O. Box 70977, Southwest Station,
Washington, DC 20024. Telephone: (202) 707-8380.
SUPPLEMENTARY INFORMATION:
Background
On November 1, 1995, Congress passed the Digital Performance Right
in Sound Recordings Act of 1995 (``Digital Performance Act''). Public
Law No. 104-39, 109 Stat. 336. Among other things, it confirms and
clarifies that the scope of the compulsory license to make and
distribute phonorecords of nondramatic musical compositions includes
the right to distribute or authorize distribution by means of a digital
transmission which constitutes a ``digital phonorecord delivery.'' 17
U.S.C. 115(c)(3)(A). A ``digital phonorecord delivery'' is defined as
each individual delivery of a phonorecord by digital transmission of a
sound recording which results in a specifically identifiable
reproduction by or for any transmission recipient * * *.'' 17 U.S.C.
115(d).
The Digital Performance Act established that the rate for all
digital phonorecord deliveries made or authorized under a compulsory
license on or before December 31, 1997, is the same rate in effect for
the making and distribution of physical phonorecords. 17 U.S.C.
115(c)(3)(A)(i). For digital phonorecord deliveries made or authorized
after December 31, 1997, the Digital Performance Act established a
process that may take two-steps for determining the terms and rates. 17
U.S.C. 115(c)(3)(A)(ii). The first step in the process is a voluntary
negotiation period initiated by the Librarian of Congress to enable
copyright owners and users of the section 115 digital phonorecord
delivery license to negotiate the terms and rates of the license. The
Librarian initiated this period on July 17, 1996, and directed it to
end on December 31, 1996. 61 FR 37213 (July 17, 1996).
The second step of the process is the convening of a CARP to
determine reasonable terms and rates for digital phonorecord deliveries
for parties not subject to a negotiated agreement. In the July 17,
1996, Federal Register notice, the Library stated that CARP proceedings
would begin, in accordance with the rules of 37 CFR part 251, on
January 31, 1997. 61 FR 37214. The Library also directed those parties
not subject to a negotiated agreement to file their petitions to
convene a CARP, as required by 17 U.S.C. 115(c)(3)(D), by January 10,
1997, and their Notices of Intent to Participate in CARP proceedings by
January 17, 1997. Id. In addition, the Library directed interested
parties to comment by November 8, 1996, on the possibility of
consolidating the CARP proceeding to determine terms and rates for
digital phonorecord deliveries with the proceeding to adjust the
mechanical royalty rate for the making and distributing of physical
phonorecords. 61 FR 37215.
Petition To Vacate
On November 8, 1996, the Library received a joint motion from the
Recording Industry Association of America, the National Music
Publishers' Association, Inc., and The Harry Fox Agency, Inc.
(collectively, ``the Parties'') to vacate the scheduled dates appearing
in the July 17, 1996, Federal Register notice for convening a CARP. The
Parties submit that they are in continuous negotiations to reach a
private agreement as to the terms and rates for digital phonorecord
deliveries, and that the Library's announced schedule for CARP
proceedings will prematurely terminate these negotiations and eliminate
the likelihood that a private agreement will be reached. The Parties
request an extension of the negotiation period until April 1, 1997, at
which point they will inform the Library if they need additional time.
In support of their request, the Parties submit that a CARP
proceeding to set terms and rates for digital phonorecord deliveries,
if required, need not be completed in calendar year 1997. Despite the
fact that the current rates for digital phonorecord deliveries expire
on December 31, 1997, the Parties submit that any rates and terms
established through a CARP proceeding, no matter when it is completed,
will be effective beginning January 1, 1998. 17 U.S.C. 115(c)(3)(D). As
a result, the Parties assert that no party will be prejudiced by
vacating the current schedule and allowing the current negotiations to
continue until completed.
In addition to their request to vacate the CARP schedule, the
Parties oppose at this time the consolidation of the digital
phonorecord delivery CARP proceeding with the CARP proceeding for
adjusting the mechanical royalty rate for physical phonorecords. Should
negotiations for a digital phonorecord delivery agreement fail, the
Parties will notify the Library at that time as to their views on
consolidation.
New Precontroversy Discovery Schedule
The Library is announcing a new and complete precontroversy
discovery schedule for a CARP proceeding to establish the terms and
rates for the section 115 license for digital phonorecord deliveries
for parties not
[[Page 65244]]
subject to a negotiated agreement. The Library is creating a new
schedule to provide all interested parties with additional time to
negotiate, subject to the following comments.
As the Parties correctly observed in their joint motion, the
Library set the original schedule for CARP proceedings based on the
termination of the current rates for digital phonorecord deliveries on
December 31, 1997. 61 FR 37214 (``Should negotiations fail and the
Librarian be petitioned to convene a CARP, written direct cases would
have to be filed by January 31, 1997, if the precontroversy period
(three months), the arbitration proceeding (six months) and the
Librarian's review of the CARP's decision (two months) is to conclude
by December 31, 1997. Otherwise, there will be a lapse in time when no
rates apply to digital phonorecord deliveries.''). The Parties submit
that there will not be any lapse because 17 U.S.C. 115(c)(3)(D)
provides that terms and rates determined through a CARP proceeding are
effective on January 1, 1998, no matter when adopted. As a result, the
Parties view a CARP proceeding as an open-ended process, in that it
could take place in 1998, 1999, or any subsequent year with a
retroactive application to January 1, 1998.
The Library does not share the Parties' view that the first CARP
proceeding to set terms and rates for digital phonorecord deliveries is
so open-ended. Congress did intend that the parties have a sufficient
period of time to negotiate voluntary agreements, 141 Cong. Rec.
S11,945, S11,958 (daily ed. August 8, 1995), but there is no indication
that the period was to be indefinite. The statute is clear that
subsequent CARP proceedings to adjust terms and rates for digital
phonorecord deliveries must be ``repeated and concluded * * * in each
fifth calendar year after 1997''. 17 U.S.C. 115(c)(3)(F). The statute
is silent as to how long the 1997 CARP proceeding is to take, but it is
reasonable to conclude from the language of section 115(c)(3)(F) that
Congress did not intend the initiation and conclusion of the CARP
proceeding to take place much after the current rates expire on
December 31, 1997, notwithstanding that new terms and rates are
effective on January 1, 1998.
The Library has balanced its interpretation of what Congress
desired for the first CARP proceeding for digital phonorecord
deliveries with the interest of promoting voluntary agreements and, is
therefore, announcing a new schedule. The Library is doing this in no
small part because of the representation of the Parties that a
voluntary agreement is in the offing. However, the Parties, and any
others who file a Notice of Intent to Participate in the CARP
proceeding, are put on notice that this is the last time the Library
will be able to alter the schedule for this proceeding. The schedule
described below gives all parties almost one year to negotiate
voluntary agreements, a decidedly longer period of time than Congress
has established for future digital phonorecord delivery proceedings.
The following is the procedural schedule for the digital
phonorecord delivery CARP proceeding, including the filing deadlines
for Notices of Intent to Participate, additional comments on the
advisability of consolidating the digital phonorecord delivery
proceeding with the proceeding for adjustment of the mechanical royalty
rate for physical phonorecords, and the deadline for filing petitions
to initiate a CARP proceeding for digital phonorecord delivery
transmissions.
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Action Deadline
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Petitions to Initiate CARP Proceeding March 3, 1997.
to Establish Terms and Rates for
Digital Phonorecord Deliveries.
Notices of Intent to Participate..... March 17, 1997.
Comments on Consolidation of Digital March 17, 1997.
Phonorecord Delivery CARP Proceeding
With CARP Proceeding for Physical
Phonorecords.
Filing of Written Direct Cases....... April 1, 1997.
Requests for Underlying Documents to April 8, 1997.
Written Direct Cases.
Responses to Requests for Underlying April 14, 1997.
Documents.
Completion of Document Production.... April 18, 1997.
Follow-Up Request for Underlying April 23, 1997.
Documents.
Responses to Follow-up Requests...... April 30, 1997.
Motions Related to Document May 5, 1997.
Production.
Production of Documents in Response May 12, 1997.
to Follow-Up Requests.
All Other Motions, Petitions and May 15, 1997.
Objections.
Initiate CARP........................ June 23, 1997.
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The precontroversy discovery period, as specified by 37 CFR
251.45(b), begins on April 1, 1997, with the filing of written direct
cases by each party. Each party in this proceeding who has filed a
Notice of Intent to Participate must file a written direct case on the
date prescribed above. Failure to submit a timely filed written direct
case will result in dismissal of that party's case. Parties must comply
with the form and content of written direct cases as prescribed in
Sec. 251.43. Each party to the proceeding must deliver a complete copy
of its written direct case to each of the other parties to the
proceeding, as well as file a complete copy with the Copyright Office
by close of business on April 1, 1997, the first day of the 45-day
period.
After the filing of the written direct cases, document production
will proceed according to the above-described schedule. Each party may
request underlying documents related to each of the other parties'
written direct cases by April 8, 1997, and responses to those requests
are due by April 14, 1997. Documents which are produced as a result of
the requests must be exchanged by April 18, 1996. It is important to
note that all initial document requests must be made by the April 8,
1997, deadline. Thus, for example, if one party asserts facts that
expressly rely on the results of a particular study that was not
included in the written direct case, another party desiring production
of that study must make its request by April 8; otherwise, the party is
not entitled to production of the study.
The precontroversy discovery schedule also establishes deadlines
for follow-up discovery requests. Follow-up requests are due by April
23, 1997, and responses to those requests are due by April 30, 1997.
Any documentation produced as a result of a follow-up request must be
exchanged by May 12, 1997. An example of a follow-up request would be
as follows. In the above example, one party expressly relies on the
results of a particular study which is not included in its written
direct case. As noted above, a party desiring production of that study
or survey must make its request by April 8, 1997. If, after receiving a
copy of the study, the reviewing party determines that the study
heavily relies on the results of a statistical survey, it would be
appropriate for that party to make a follow-up request for production
of the statistical survey by the April 23, 1997, deadline. Again,
failure to make a timely follow-up request would waive that party's
right to request production of the survey.
In addition to the deadlines for document requests and production,
there are two deadlines for the filing of precontroversy motions.
Motions related to document production must be filed
[[Page 65245]]
by May 5, 1997. Typically, these motions are motions to compel
production of requested documents for failure to produce them, but they
may also be motions for protective orders. Finally, all other motions,
petitions and objections must be filed by May 15, 1997, the final day
of the 45-day precontroversy discovery period. These motions,
petitions, and objections include, but are not limited to, objections
to arbitrators appearing on the arbitrator list under 37 CFR 251.4, and
petit
ions to dispense with formal hearings under Sec. 251.41(b).
Due to the strict time limitations between the procedural steps of
the precontroversy discovery schedule, we are requiring that all
discovery requests and responses to such requests be served by hand or
fax on the party to whom such response or request is directed. Filing
of requests and responses with the Copyright Office is not required.
Filing and service of all precontroversy motions, petitions,
objections, oppositions and replies shall be as follows. In order to be
considered properly filed with the Librarian and/or Copyright Office,
all pleadings must be brought to the Copyright Office at the following
address no later than 5 p.m. of the filing deadline date: Office of the
Register of Copyrights, Room LM-403, James Madison Memorial Building,
101 Independence Avenue, S.E., Washington, DC 20540. The form and
content of all motions, petitions, objections, oppositions and replies
filed with the Office must be in compliance with Secs. 251.44(b)-(e).
As provided in Sec. 251.45(b), oppositions to any motions or petitions
must be filed with the Office no later than seven business days from
the date of filing of such motion or petition. Replies are due five
business days from the date of filing of such oppositions. Service of
all motions, petitions, objections, oppositions and replies must be
made on counsel or the parties by means no slower than overnight
express mail on the same day the pleading is filed.
Dated: December 6, 1996.
Marilyn J. Kretsinger,
Acting General Counsel.
[FR Doc. 96-31425 Filed 12-10-96; 8:45 am]
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