Advanced Copyright Issues on the Internet - Fenwick & West LLP

(b) Eligible Nonsubscription Services (Webcasters)While the CARP proceedings for eligible nonsubscription services were pending, themajor record labels and representatives of various FCC-licensed broadcasters reached anagreement in Dec. 2001 on royalty rates to be paid by FCC-licensed broadcasters when theysimultaneously stream their AM/FM broadcasts during the period from Oct. 28, 1998 throughDec. 31, 2008. 2201 The settling parties submitted a request to the <strong>Copyright</strong> Office to withdrawfrom the CARP, further requesting that the <strong>Copyright</strong> Office withdraw the issue of AM/FMstreaming from the CARP and publish the settled rates in the Federal Register for publiccomment after the CARP had delivered its report on the remaining issues in the proceeding.They requested that, if there were no objections to the published settled rates, the Librarian ofCongress adopt those rates. The settling parties insisted, however, that the settled rates not berevealed to the CARP before the CARP’s determination of the royalty rates that should apply tononsubscription digital audio transmissions other than AM/FM streaming (i.e., webcasting). 2202The <strong>Copyright</strong> Office rejected the settling parties’ requests, noting that neither thecopyright statute nor existing regulations provided for negotiation and settlement of generallyapplicable royalty rates after a CARP has been empaneled. The <strong>Copyright</strong> Office therefore ruledthat the AM/FM streaming rate would have to be resolved in the CARP proceeding, and furthernoted that the parties were free to make a joint submission to the CARP urging that it adopt therates upon which they had agreed. 2203The CARP issued its ruling on Feb. 20, 2002, setting the recommended performance feesat 0.14 cents per performance for webcasting to Internet listeners for free and at 0.07 cents perperformance for simultaneous webcasting of AM/FM broadcasts by traditional FCC-licensedbroadcasters. 2204 The CARP’s recommendations were reviewed by the <strong>Copyright</strong> Office, whichrecommended to the Librarian of Congress that the Librarian reject the rates set forth in theCARP’s report. On June 20, 2002, the Librarian published his final decision on the matter, whichabandoned the CARP’s two-tiered rate structure of 0.14 cents per performance for Internet-onlytransmissions and 0.07 cents for each retransmission of a performance in an AM/FM radiobroadcast, deciding instead that the rate of 0.07 cents should apply to both types of transmission.The foregoing rates applied for the period from Oct. 28, 1998 through Dec. 31, 2002. 2205 TheRegister of <strong>Copyright</strong>’s rationale for rejection of the CARP rates, together with the Librarian’sorder adopting the Register’s recommendation, were published on July 8, 2003 at 67 Fed. Reg.2201 Order, Docket No. 2000-9 CARP DTRA 1&2 (Jan. 7, 2002), at 1.2202 Id.2203 Id. at 1-2.2204 The CARP Report was available online as of Feb. 20, 2002 atwww.loc.gov/copyright/carp/webcasting_rates.html.2205 Librarian of Congress, “Webcasting Determination,” available as of June 21, 2002 atwww.copyright.gov/carp/webcasting_rates_final.html.- 479 -