Natl Assn Bcaster v. Librarian Cong

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 29, 1998 Decided June 26, 1998

No. 96-1449

National Association of Broadcasters,

Petitioner

v.

Librarian of Congress and

Register of Copyrights,

Respondents

Canadian

Claimants, et al.,

Intervenors

No. 96-1450

Program Supplies,

Petitioner

v.

Librarian of Congress and

Register of Copyrights,

Respondents

National Association of Broadcasters,

Intervenor

No. 96-1451

Devotional

Claimants,

Petitioner

v.

Librarian of Congress and

Register of Copyrights,

Respondents

On Petitions for Review of an Order of the

United States Department of Justice

Dennis Lane argued the cause for petitioner Program

Suppliers.

John I. Stewart, Jr. argued the cause for petitioner Nation-

al Association of Broadcasters. Jacqueline E. Davis, Jessica

R. Herrera and Henry L. Baumann were on brief.

Barry H. Gottfried argued the cause for petitioner Devo-

tional Claimants. Clifford M. Harrington, John H. Midlen,

Jr., George R. Grange, II, Richard M. Campanelli and W.

Thad Adams, III, were on brief.

Bruce G. Forrest, Attorney, United States Department of

Justice, argued the cause for the respondents. Frank W.

Hunger, Assistant Attorney General, and William G. Kanter,

Attorney, United States Department of Justice, were on the

brief.

Timothy C. Hester argued the cause for intervenors Cana-

dian Claimants, et al. Michele J. Woods, L. Kendall Satter-

field and Victor J. Cosentino were on brief.

Ronald A. Schechter argued the cause for amicus curiae

Joint Sports Claimants. Robert Alan Garrett, Philip R.

Hochberg and Judith Jurin Semo were on brief.

Before: Ginsburg, Henderson and Randolph, Circuit

Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: A cable televi-

sion system must pay royalty fees to the Register of Copy-

rights (Register) in exchange for the privilege of retransmit-

ting to its subscribers certain copyrighted programming. See

17 U.S.C. s 111(d). The Librarian of Congress (Librarian)

then distributes the collected royalties to the copyright own-

ers. Id. s 111(d)(4). In Phase I of the distribution process,

royalties are apportioned among eight classes of claimants.

See Distribution of 1990, 1991 and 1992 Cable Royalties, 61

Fed. Reg. 55,653, 55,655 (1996) (hereinafter Librarian Deci-

sion). In Phase II awards are made to individual copyright

owners within each of the classes. Id. If at either stage a

controversy arises regarding the appropriate disposition of all

or a portion of the royalties, the Librarian convenes a Copy-

right Arbitration Royalty Panel to propose a settlement. See

17 U.S.C. s 111(d)(4)(B); Majority Report of the Copyright

Arbitration Royalty Panel (5/31/96) (hereinafter Panel Re-

port). The panel's proposal is then forwarded to the Librari-

an, who, on the recommendation of the Register, adopts it or

rejects it (in whole or in part) and distributes the disputed

royalties accordingly. 17 U.S.C. s 802(f).

Each of the petitioners here is a disappointed class claim-

ant challenging the Librarian's Phase I distribution of royal-

ties collected for the years 1990, 1991 and 1992. Because our

review of the Librarian's decision is limited, and because on

our limited review none of the petitioners has established a

basis to alter or modify its royalty award, we reject their

challenges and affirm the Librarian.

I. BACKGROUND

In 1974 the Supreme Court ruled that a cable television

system's retransmission of non-network copyrighted pro-

graming to markets distant from those to which it was

originally broadcast was not a "performance" under the Copy-

right Act of 1909, 17 U.S.C. ss 1 et seq., (hereinafter 1909

Act) and therefore an action for copyright infringement did

not lie against the cable system. See Teleprompter Corp. v.

CBS, 415 U.S. 394 (1974); cf. Fortnightly Corp. v. United

Artists Television, Inc., 392 U.S. 390 (1968) (retransmission of

non-network copyrighted programming to local markets did

not give rise to infringement liability under 1909 Act). While

it recognized the adverse effect the retransmissions could

have on copyright owners, the Supreme Court concluded that

"[d]etailed regulation of these relationships [between cable

operators and copyright owners], and any ultimate resolution

of the many sensitive and important problems in this field,

must be left to Congress." Teleprompter, 415 U.S. at 414;

accord Fortnightly, 390 U.S. at 401 ("We have been invited

... to render a compromise decision in this case that would,

it is said, accommodate the various competing considerations

of copyright, communications, and antitrust policy. We de-

cline the invitation. That job is for Congress.").

A. The Evolving Statutory Framework

In response to the Fortnightly and Teleprompter decisions,

and having struggled with the matter since 1965, the Ninety-

Fourth Congress enacted legislation to address the retrans-

mission royalty problem. See The Copyright Act of 1976,

Pub. L. No. 94-553 (codified as amended at 17 U.S.C. ss 101

et seq.) (hereinafter 1976 Act); see also H.R. Rep. No.

94-1476, at 89 (1976) ("The difficult problem of determining

the copyright liability of cable television systems has been

before the Congress since 1965.") (hereinafter 1976 House

Report). The 1976 Act permitted recovery of royalties for

non-network programming retransmitted to distant markets

but not for other types of retransmitted programming:

The Committee determined ... that there was no evi-

dence that the retransmission of "local" broadcast signals

[to the same markets served by the local broadcasters]

threatens the existing market for copyright program

owners. Similarly, the retransmission of network pro-

gramming, including network programming which is

broadcast in "distant" markets, does not injure the copy-

right owner. The copyright owner contracts with the

network on the basis of his programming reaching all

markets served by the network and is compensated

accordingly.

By contrast, their [sic] transmission of distant non-

network programming by cable systems causes damage

to the copyright owner by distributing the program in an

area beyond which it has been licensed. Such retrans-

mission adversely affects the ability of the copyright

owner to exploit the work in the distant market. It is

also of direct benefit to the cable system by enhancing its

ability to attract subscribers and increase revenues. For

these reasons, the Committee has concluded that the

copyright liability of cable television systems under the

compulsory license should be limited to the retransmis-

sion of distant non-network programming.

1976 House Report at 90; accord National Ass'n of Broad-

casters v. Copyright Royalty Tribunal, 675 F.2d 367, 373

(D.C. Cir. 1982) ("The Act therefore was not intended to

compensate network broadcasts or even local broadcasters

whose programs are retransmitted locally by a cable system

in the same area.") (hereinafter NAB I); Christian Broad-

casting Network, Inc. v. Copyright Royalty Tribunal, 720

F.2d 1295, 1303 (D.C. Cir. 1983) (similar) (hereinafter CBN).

Because the Congress believed "that it would be impracti-

cal and unduly burdensome to require every cable system to

negotiate with every copyright owner whose work was trans-

mitted by a cable system," 1976 House Report at 89, it

established a centralized process for the collection and pay-

ment of royalties. See National Broadcasting Co. v. Copy-

right Royalty Tribunal, 848 F.2d 1289, 1291 (D.C. Cir. 1988)

("The purpose of this regulatory structure is to facilitate the

exploitation of copyrighted materials by removing the prohibi-

tive transaction costs that would attend direct negotiations

between cable operators and copyright holders, while at the

same time assuring copyright holders compensation for the

use of their property.") (hereinafter NBC). To administer

the process, the Congress established the Copyright Royalty

Tribunal (Tribunal) and authorized it to periodically adjust

royalty rates and distribute collected royalties. See 17 U.S.C.

ss 111(d), 801-810 (1976).

Under the 1976 Act, if claimants could not agree on the

proper distribution of collected royalties, the Tribunal de-

clared a controversy as to the portion of royalties in dispute

and conducted hearings to determine the appropriate appor-

tionment of the funds. Id. s 804(d)-(e). The Tribunal had

one year to complete its proceedings, id. s 804(e), and in its

final determination it was to "state in detail the criteria that

the Tribunal determined to be applicable to the particular

proceeding, the various facts that it found relevant to its

determination in that proceeding, and the specific reasons for

its determination," id. s 803(b).

The Congress did not, however, prescribe the criteria or

procedures according to which the Tribunal should assess a

claim for royalties:

The Committee recognizes that the bill does not in-

clude specific provisions to guide the Copyright Royalty

[Tribunal] in determining the appropriate division among

competing copyright owners of the royalty fees collected

from cable systems under Section 111. The Committee

concluded that it would not be appropriate to specify

particular, limiting standards for distribution. Rather,

the Committee believes that the Copyright Royalty [Tri-

bunal] should consider all pertinent data and consider-

ations presented by the claimants.

1976 House Report at 97. Accordingly, the Tribunal devel-

oped three primary criteria--"[1] the harm caused to copy-

right owners by secondary transmissions of copyrighted

works by cable systems, [2] the benefit derived by cable

systems from the secondary transmissions of certain copy-

righted works, and [3] the marketplace value of the works

transmitted," NAB I, 675 F.2d at 373--and two secondary

criteria--"[4][the] quality of copyrighted program material,

and [5] time-related considerations," id.--to assess each par-

ty's claims.

The 1976 Act also provided for judicial review of the

Tribunal's distribution decisions:

Any final decision of the Tribunal in a proceeding

under section 801(b) may be appealed to the United

States Court of Appeals, within thirty days after its

publication in the Federal Register, by an aggrieved

party. The judicial review of the decision shall be had, in

accordance with chapter 7 of title 5, on the basis of the

record before the Tribunal. No court shall have jurisdic-

tion to review a final decision of the Tribunal except as

provided in this section.

17 U.S.C. s 810 (1976). Pursuant to this provision, this Court

was called on to review the Tribunal's distribution of retrans-

mission royalties for four of the first five years they were

collected. See NAB I, 675 F.2d at 377-85 (challenges to

Tribunal's distribution of 1978 royalties); CBN, 720 F.2d at

1305-19 (challenges to Tribunal's distribution of 1979 royal-

ties); National Ass'n of Broadcasters v. Copyright Royalty

Tribunal, 772 F.2d 922 (D.C. Cir. 1985) (challenges to Tribu-

nal's distribution of 1979, 1980 and 1982 royalties) (hereinaf-

ter NAB II).

As time passed, however, there was insufficient work to

justify the existence of a permanent body and therefore, some

seventeen years after its creation, the Congress abolished the

Tribunal and transferred most of its functions to an ad hoc

Copyright Arbitration Royalty Panel. See The Copyright

Royalty Tribunal Reform Act of 1993, Pub. L. No. 103-198

(codified in relevant part, as amended, at 17 U.S.C. ss 801-

803) (hereinafter 1993 Act). In so doing, the House Commit-

tee responsible for the legislation reasoned that

ad hoc arbitration panels are better suited to handle the

functions currently handled by the Tribunal. The expe-

rience with arbitration under the Section 119 satellite

compulsory license was positive, and indicates that this

approach can work for the other royalty schemes in title

17. Testimony of witnesses before both Houses on the

proposal supports this conclusion.

H.R. Rep. No. 103-286, at 11 (1993) (hereinafter 1993 House

Report).

The 1993 Act also transferred certain of the Tribunal's

functions to the Librarian of Congress and the Register of

Copyrights:

The Register of Copyrights and the Librarian of

Congress will play important roles in convening and re-

viewing the decisions of the arbitration panels. The

Copyright Office is currently the "front end" of the

compulsory license system. Statements of Account [of

royalties owed] for the section 111, 119, and 1005 licens-

es are filed with the Office. The royalties paid in un-

der these licenses are then deposited by the Copyright

Office into the United States Treasury. ... The Copy-

right Office also has authority to promulgate regula-

tions for the administration of these functions. Section

806 of the Copyright Act requires the Library of Con-

gress to provide the Copyright Royalty Tribunal with

necessary administrative services, including those relat-

ed to budgeting, accounting, financial reporting, travel,

personnel, and procurement.

In short, the Copyright Office and the Library of

Congress already have considerable involvement in the

administration of compulsory licenses and in the work of

the Tribunal. When combined with the Copyright Of-

fice's almost 100 year experience in copyright issues,

assigning some of the duties formally carried out by the

Tribunal to the Office and the Library makes good sense.

Id. (footnote omitted).

Accordingly, under the new distribution scheme established

by the 1993 Act, an arbitration panel is now entrusted with

initial responsibility for formulating a proposed distribution of

disputed royalties. See 17 U.S.C. ss 801-802. The arbitra-

tion panel has 180 days to hear evidence and develop the

proposed settlement of outstanding claims. Id. s 802(e). It

must "act on the basis of a fully documented written record,

prior decisions of the Copyright Royalty Tribunal, prior copy-

right arbitration panel determinations, and rulings by the

Librarian of Congress under section 801(c)." Id. s 802(c).

Within the same 180-day period the panel must include its

proposed settlement in a report, setting "forth the facts that

the arbitration panel found relevant to its determination," and

it must forward the report and accompanying written record

to the Librarian:

Within 60 days after receiving the report of a copy-

right arbitration royalty panel under subsection (e), the

Librarian of Congress, upon the recommendation of the

Register of Copyrights, shall adopt or reject the determi-

nation of the arbitration panel. The Librarian shall

adopt the determination of the arbitration panel unless

the Librarian finds that the determination is arbitrary or

contrary to the applicable provisions of this title. If the

Librarian rejects the determination of the arbitration

panel, the Librarian shall, before the end of that 60-day

period, and after full examination of the record created in

the arbitration proceeding, issue an order setting the

royalty fee or distribution of fees, as the case may be.

The Librarian shall cause to be published in the Federal

Register the determination of the arbitration panel and

the decision of the Librarian (including an order issued

under the preceding sentence). The Librarian shall also

publicize such determination and decision in such other

manner as the Librarian considers appropriate. The

Librarian shall also make the report of the arbitration

panel and the accompanying record available for public

inspection and copying.

Id. s 802(f).

The Librarian's decision can then be reviewed by this

Court:

Any decision of the Librarian of Congress under sub-

section (f) with respect to a determination of an arbitra-

tion panel may be appealed, by any aggrieved party who

would be bound by the determination, to the United

States Court of Appeals for the District of Columbia

Circuit, within 30 days after the publication of the deci-

sion in the Federal Register. If no appeal is brought

within such 30-day period, the decision of the Librarian

is final, and the royalty fee or determination with respect

to the distribution of fees, as the case may be, shall take

effect as set forth in the decision. ... The court shall

have jurisdiction to modify or vacate a decision of the

Librarian only if it finds, on the basis of the record

before the Librarian, that the Librarian acted in an

arbitrary manner. If the court modifies the decision of

the Librarian, the court shall have jurisdiction to enter

its own determination with respect to the amount or

distribution of royalty fees and costs, to order the repay-

ment of any excess fees, and to order the payment of any

underpaid fees, and the interest pertaining respectively

thereto, in accordance with its final judgment. The court

may further vacate the decision of the arbitration panel

and remand the case to the Librarian for arbitration

proceedings in accordance with subsection (c).

Id. s 802(g).

B. The Petitioners' Challenges

The petitioners are the first to challenge a decision of the

Librarian under the new royalty distribution process estab-

lished by the 1993 Act. Each represents a distinct class of

claimants: Program Suppliers (Programmer) represents the

copyright owners of syndicated television series, movies and

television specials; 1 National Association of Broadcasters

(NAB) represents the copyright owners of programs, like

news and local interest material, that are produced and

broadcast by only a single television station; 2 and Devotional

Claimants (Devotional) represents the copyright owners of

"[s]yndicated programs of a primarily religious theme, not

limited to those produced by or for religious institutions,"

Panel Report at 13, that do not fall within another category of

programming.3

__________

1 Syndicated series and specials consist of the following:

(1) programs licensed to and broadcast by at least one U.S.

commercial television station during the calendar year in ques-

tion; (2) programs produced by or for broadcast by two or

more U.S. television stations during the calendar year in

question; and (3) programs produced by or for a U.S. commer-

cial television station that are comprised predominantly of

syndicated elements, such as music video shows, cartoon shows,

"PM Magazine," and locally hosted movie shows. Syndication

refers to selling programming on a market-by-market basis to

broadcast television stations in the United States. "Off-

network" syndication refers to programming syndicated after

having first appeared on a network. "Cheers" and "Roseanne"

are examples. "First run" syndication refers to programs first

appearing in syndication, such as talk and game shows.

Panel Report at 11-12.

2 The Panel Report describes NAB's programming as follows:

"[p]rograms produced by or for a U.S. commercial television station

and broadcast only by that one station during the calendar year in

question and not coming within the exception described in subpart

(3) of the 'Program Suppliers' definition." Panel Report at 12-13

(referring to subpart (3) quoted supra at note 1).

3 The Librarian also awarded a share of the royalties to five other

classes of copyright owners--i.e., Joint Sports Claimants (JSC),

Music Claimants (MC), National Public Radio (NPR), Public Broad-

casters (PBS) and Canadian Claimants (CC). PBS and CC have

intervened in this litigation, filing a joint brief in support of the

At issue is more than $500 million in royalties--the total

amount collected for non-network programming retransmit-

ted to distant markets in calendar years 1990, 1991 and 1992.4

The disputed royalties consist of "Basic Funds," "3.75%

Funds" and "Syndex Funds," which in turn are subdivided

into 1990 collections and 1991-1992 collections. The Basic

Funds include all of the royalties collected from small- and

medium-sized cable systems as well as the royalties collected

from large cable systems for retransmissions that were per-

mitted under the now defunct, distant signal carriage rules of

the Federal Communication Commission (FCC). See Librari-

an Decision, 61 Fed. Reg. at 55,654. The 3.75% Funds and

Syndex Funds consist of royalties collected exclusively from

large cable systems for retransmissions that are now permit-

ted as a result of the FCC's repeal of its distant signal

carriage and syndication exclusivity rules, respectively.5 Id.

The Librarian declared a Phase I distribution controversy

and convened a copyright arbitration royalty panel (Panel) on

December 4, 1995. Id. at 55,655. The Panel conducted

approximately 50 days of evidentiary hearings during which it

heard the testimony of more than 50 witnesses and it re-

viewed over 200 exhibits and hundreds of pages of written

testimony submitted by the class claimants. See Panel Re-

__________

Librarian's distribution decision. Each of the petitioners has also

joined in the portions of the intervenors' brief that are not adverse

to its claims. JSC has filed an amicus curiae brief, supporting the

Librarian's decision and opposing certain of the arguments ad-

vanced by the petitioners.

4 The Tribunal, it appears, was in the midst of a distribution

proceeding to determine the proper Phase I apportionment of 1990

royalties just before the Congress enacted the 1993 Act. See

Librarian Decision at 55,655. When it became clear that the

Tribunal would be abolished by the 1993 Act, the 1990 proceedings

were suspended and, at the urging of the parties, the Librarian

convened a panel to develop a proposed settlement for not only the

1990 royalties but also the 1991 and 1992 funds. Id.

5 The 3.75% Fund is named for the formula by which the royalties

are calculated--i.e., 3.75% of gross receipts. See Librarian Deci-

sion, 61 Fed. Reg. at 55,654.

port at 25. The record was closed on March 29, 1996, after

which the claimants submitted over one thousand pages of

post-hearing briefs. Id. at 17. The three-member Panel,

with one dissent, reported its proposed distribution to the

Librarian on May 31, 1996. See Letter from Panel Chair to

Librarian of 5/31/96. In its report, the Panel proposed the

following Phase I apportionment for the non-settling class

claimants:

Table 1: Panel's Proposed Phase I

Apportionment of Royalties

_____________________________________________________________________________

ClaimantsBasic FundBasic Fund3.75 FundSyndex Fund

(1990) (1991-1992)(1990-1992)(1990-1992)

______________________________________________________________________________

Programmer55.55%55.00%58.60%100.00%

_______________________________________________________________________________

NAB 7.58% 7.50% 7.50%None

_______________________________________________________________________________

Devotional 1.26% 1.25% 0.95%None

_______________________________________________________________________________

PBS 5.81% 5.75%NoneNone

_______________________________________________________________________________

JSC29.80%29.50%32.60%None

_______________________________________________________________________________

CCNone 1.00% 0.35%None

_______________________________________________________________________________

Source: Panel Report at 143.

The proposed awards differed significantly from those the

Tribunal had last approved before its abolition:

Table 2: Tribunal's Phase I Apportionment

of 1989 Royalty Funds

_________________________________________________________________________

ClaimantsBasic Fund3.75 FundSyndex Fund

(1989) (1989) (1989)

__________________________________________________________________________

Programmer 60.00% 62.60% 95.50%

__________________________________________________________________________

NAB 5.70% 5.70% None

__________________________________________________________________________

Devotional 1.25% 0.95% None

__________________________________________________________________________

PBS 4.00% None None

__________________________________________________________________________

MC 4.50% 4.50% 4.50%

__________________________________________________________________________

JSC 23.80% 26.00% None

__________________________________________________________________________

CC 0.75% 0.25% None

__________________________________________________________________________

Source: Certified Questions from the Register of Copyrigh Copyrights to

the Copyright Arbitration Royalty Panel of 7/16/96, at 2 (hereinafter

Certified Questions to Panel).

After reviewing the Panel's findings, the Register notified

the class representatives of a meeting to discuss certain

perceived shortcomings in the Panel's report:

We have reviewed the Panel's report, the petitions to

modify and the replies filed by the parties to this pro-

ceeding. It is evident that the report cannot be adopted

by the Librarian in its present form, and would not be

sustainable on appeal. Despite the report's length, there

is a significant absence of findings of fact and conclusions

of law supporting the Panel's specific determinations.

The report consequently lacks adequate explanation jus-

tifying the Panel's awards. Without such explanation,

the Librarian cannot evaluate the Panel's reasoning to

determine if it acted in an arbitrary manner.

We have also examined the record in this proceeding

and have determined that the Librarian cannot engage in

a de novo review of the merits of this case. First, as the

Canadian Claimants aptly point out in their reply, de

novo review cannot be completed in the 60-day time

period. Second, and more importantly, the record is not

complete with respect to some issues. Without further

development, there is no evidence upon which the Librar-

ian can reach a conclusion, preventing him from making

his own determination as to the royalty distribution.

The Copyright Act is silent as to the Librarian's

authority to remand the [Panel] report for further devel-

opment and explanation. We have determined, however,

that a remand is the appropriate solution in this proceed-

ing and will most likely produce an ultimate determina-

tion that will withstand judicial review.

Letter from Register of Copyrights to Phase I Cable Parties

of 7/3/96.

At the meeting, the claimants generally expressed their

reservations about the legality and wisdom of a remand to the

Panel. See Meeting of 7/11/96 Tr. 6-58. The Register none-

theless determined that the best way to proceed was to

submit a series of "certified questions" to the Panel so that it

could elaborate on its reasons for specific percentage awards.

See Certified Questions to Panel at 1 ("The questions are

intended to probe the original intent of the Panel only. They

are not intended to reopen any issues or invite any reconsid-

eration."). The Panel responded to the questions on August

29, 1996, emphasizing that royalty shares could not be deter-

mined with mathematical precision and were inescapably

dependent on the Panel's exercise of its informed judgment

as to the relative merits of each class's claims:

The point is, after reviewing and weighing the surveys

and all other relevant information, it is the Panel's

function to make a final judgment as to the award of each

party. There was a considerable difference of opinion in

weighing all the evidence as is partly evident by the fact

that the Panel was not unanimous in its judgment. To

reach the judgment as it exists there had to be, and

there was, a significant compromise. The above com-

ments emanate from discussions with the Copyright Of-

fice and the tenor of certain questions which suggests

that there is a precision [sic] or mathematical way to

calculate these awards by placing weights on all the

categories. The Panel can somewhat confine the awards

by making observations on the surveys and observations

on the other evidence presented. However, in its final

aspect the Panel has to use its judgment.

... A great deal of pressure was placed on the Panel

members, not only to analyze and consider [the evi-

dence], but also to debate and agree on a judgment--one

that by its very nature required a relatively precise

quantification of the final results. Clearly, the most

important element of the decision was the "judgment" of

the Panel. The Panel assimilated this information and

feels comfortable that it understood the evidence and

arguments as presented. In writing the report itself, the

Panel simply ran out of time. In the experience of at

least one member of the Panel, the report, when issued,

was about midway from where it would be if it were an

opinion published in an appellate report. It needed

considerable editing and tightening. The Panel wishes

to emphasize, however, that it abides by its essential

judgments in this proceeding.

Copyright Arbitration Royalty Panel Responses of 8/29/96 to

Certified Questions from the Register of Copyrights, at 2-3

(hereinafter Panel Responses to Certified Questions).

After reviewing the Panel's substantive responses to each

of the certified questions, the Register recommended adop-

tion of the Panel's findings with adjustments to account for

(1) the Music Claimants' and National Public Radio's settle-

ment of their claims to the Basic and Syndex Funds and (2)

the Panel's other errors, admitted and otherwise, in appor-

tioning the 3.75 Funds. See Librarian Decision, 61 Fed. Reg.

at 55,660-64. The Librarian adopted the Register's recom-

mendation without modification: "Having duly considered the

recommendation of the Register of Copyrights regarding the

report of the Copyright Arbitration Royalty Panel in the

distribution of the 1990-1992 cable funds, the Librarian of

Congress fully endorses and adopts her recommendation to

accept the Panel's decision in part and reject it in part." Id.

at 55,669. Accordingly, a summary of the final apportion-

ment of royalties approved by the Librarian is as follows:

Table 3: Librarian's Phase I Apportionment of Royalties

__________________________________________________________________________

Class ClaimantsBasic Funds3.75 FundsSyndex Funds

& Collection

Years

__________________________________________________________________________

Programmer

-199052.6336250%56.0125439%95.5000000%

-1991-199252.5250000%56.0131375%95.5000000%

__________________________________________________________________________

JSC

-199028.2355000%31.1605620%None

-1991-199228.1725000%31.2299325%None

__________________________________________________________________________

NAB

-19907.1820500%7.1688409%None

-1991-19927.1625000%7.1625000%None

__________________________________________________________________________

MC

-19904.5000000%4.5000000%4.5000000%

-1991-19924.5000000%4.5000000%4.5000000%

__________________________________________________________________________

PBS

-19905.5049750%NoneNone

-1991-19925.4912500%NoneNone

__________________________________________________________________________

Devotional

-19901.1938500%0.9080532%None

-1991-19921.1937500%0.9072500%None

__________________________________________________________________________

5CC

-19900.7500000%0.2500000%None

-1991-19920.9550000%0.1871800%None

__________________________________________________________________________

Source: Librarian Decision, 61 Fed.Reg. at 55,669.

The petitioners timely appealed the Librarian's decision.

NAB contends that it should have been awarded an

8.897025% share of the 1990 Basic and 3.75 Funds and an

8.815% share of the 1991-1992 Basic and 3.75 Funds, both of

which increases should be effected by corresponding reduc-

tions in Programmer's award. Devotional claims that it

should have been awarded a three per cent share of the Basic

and 3.75 Funds, or at the very least, its awards should have

been no lower than those proposed by the Panel; it does not

indicate, however, from whose award or awards such increas-

es should come. Finally, Programmer argues that it deserves

a larger award, the amount and source of which can be

determined only on remand to the Librarian.

II. STANDARD OF REVIEW

As provided by subsection 802(g) of the 1993 Act, we may

"modify or vacate a decision of the Librarian only if [we]

find[ ], on the basis of the record before the Librarian, that

the Librarian acted in an arbitrary manner." See 17 U.S.C.

s 802(g). The corresponding provision of the 1976 Act, sec-

tion 810, permitted review of a Tribunal decision "in accor-

dance with chapter 7 of title 5, on the basis of the record

before the Tribunal." 17 U.S.C. s 810 (1976). Notwithstand-

ing the difference in language between the 1993 Act and the

1976 Act, Devotional contends that our review of the Librari-

an's decision should be no different from our review of a

Tribunal decision; in both instances, the Administrative Pro-

cedure Act (APA)--i.e., 5 U.S.C. s 706(2)--supplies the ap-

propriate standard of review. Similarly, Programmer argues

that the APA's arbitrary and capricious test, 5 U.S.C.

s 706(2)(A), as interpreted in Motor Vehicle Manufacturers

Association v. State Farm Mutual Automobile Insurance

Co., 463 U.S. 20, 43 (1983), should control. Finally, NAB also

claims that we should continue to review the Librarian's

royalty distribution decision under a variant of the APA's

arbitrary and capricious test, see Motor Vehicle Mfrs., 463

U.S. at 43 ("In reviewing [an agency's] explanation, we must

consider whether the decision was based on a consideration of

the relevant factors and whether there has been a clear error

in judgment") (quotations omitted), although it concedes that

APA review may now be more limited than in the past and

that the "substantial evidence" test, 5 U.S.C. s 706(2)(E), no

longer applies.

Conversely, the intervenors argue that the APA's arbitrary

and capricious standard no longer applies: pursuant to sub-

section 802(f), the Librarian is obliged to adopt the Panel's

proposed settlement unless he finds it "arbitrary or contrary

to the applicable provisions of" Title 17; in turn, under

subsection 802(g), we may modify or remand the Librarian's

decision only if we conclude that he "acted in an arbitrary

manner" in applying the section 802(f) standard; this "double

arbitrary" standard is therefore narrower than APA review.6

The Librarian goes even further, arguing that our "judicial

review role in this case is at the outer edge of cases barely

reviewable under a criterion of substantive correctness." 7

Librarian Br. 14.

We conclude that our review of the Librarian's distribution

decision under subsection 802(g) is significantly more circum-

scribed than the review we made of Tribunal decisions under

section 810. As a result, in applying the "arbitrary manner"

standard set forth in subsection 802(g), we will set aside a

__________

6 Any difference between a "double-arbitrary" standard and a

"single-arbitrary" standard may well be illusory for if the Panel's

proposed award is patently arbitrary or plainly contravenes another

provision of Title 17, the Librarian's decision to approve the award

without modification would constitute "act[ing] in an arbitrary man-

ner" as well.

7 The Register's recommendation to the Librarian (which was

apparently adopted by the Librarian without alteration) suggests

that the Librarian's review of the Panel's proposed settlement is

indistinguishable from this Court's review of Tribunal royalty distri-

bution decisions. See Librarian Decision, 61 Fed. Reg. at 55,656

("Neither the [1993] Act nor its legislative history indicates what is

meant specifically by 'arbitrary,' but there is no reason to conclude

that the use of the term is any different than the 'arbitrary'

standard described in the [APA]."). Contrary to Programmer's

contention, however, the Register did not assert that our review of

the Librarian's decision had not changed. See id. at 55,656-57.

royalty award only if we determine that the evidence before

the Librarian compels a substantially different award. We

will uphold a royalty award if the Librarian has offered a

facially plausible explanation for it in terms of the record

evidence. While the standard is an exceptionally deferential

one, we think it is most consistent with the intent of the

Congress as reflected in the language, structure and history

of the 1993 Act.8

A. The Congress's Intent

Under the APA standards incorporated by section 810,

judicial review of the Tribunal's royalty distribution decisions

was already quite deferential. See NAB II, 772 F.2d at 926

n.3 (noting that standard of review applied to Tribunal royal-

ty apportionments is same standard "employed in ratemaking

cases coming from the Federal Energy Regulatory Commis-

sion[ ], an area in which a highly deferential standard of

review has traditionally been applied"). As we observed,

the judicial task is not to weigh the evidence and fix what

in our view would constitute appropriate percentages, for

that would be to intrude into the function entrusted to

the Tribunal. Our job, rather, is to determine whether

the royalty awards are within a "zone of reasonable-

ness"--not unreasonably high or unreasonably low--and

that the CRT's decision is neither arbitrary nor capri-

cious, and is supported by substantial evidence.

NAB II, 772 F.2d at 926; accord CBN, 720 F.2d at 1304 ("In

acknowledging the need for substantial evidence, however, we

emphasize that the Tribunal's choice of a particular percent-

__________

8 Even had the standard of review remained the same, we are

doubtful that any of the petitioners' arguments would lead us to

disturb the Librarian's Phase I apportionment. Nonetheless, given

our past experience with the "highly litigious copyright-owner sub-

culture," NAB II, 772 F.2d at 940, we think it useful to decide the

standard of review question now. But cf. Natural Resources

Defense Council, Inc. v. EPA, 725 F.2d 761, 767-68 (D.C. Cir. 1984)

(declining to select standard of review because regardless of stan-

dard applied result would be same).

age allocation is not reviewable for exact precision, but simply

for rationality; we are without power to set aside a particular

percentage allocation provided that it is within a 'zone of

reasonableness.' "); NAB I, 675 F.2d at 374 ("Claims of this

sort are generally well beyond the expertise or authority of

courts, however, and Congress made clear its awareness of

our limitations by making the Tribunal the primary arbiter of

these claims."); cf. Montana-Dakota Utils. Co. v. Northwest-

ern Pub. Serv. Co., 341 U.S. 246, 251 (1951) ("Statutory

reasonableness is an abstract quality represented by an area

rather than a pinpoint. It allows a substantial spread be-

tween what is unreasonable because too low and what is

unreasonable because too high. To reduce the abstract con-

cept of reasonableness to concrete expression in dollars and

cents is the function of the Commission.").

While the section 810 standard was "highly deferential," in

enacting the 1993 Act the Congress apparently concluded that

the standard was not deferential enough, as evidenced by the

repeal of section 810 and the enactment of subsection

802(g)--a provision that contains no reference to the APA.

We therefore reject Devotional's assertion that the Congress

did not intend to change the standard of review applicable to

royalty distribution decisions as to so hold would ignore plain

evidence of the Congress's intent to the contrary, a disfavored

construction. See Brewster v. Gage, 280 U.S. 327, 337 (1930)

("The deliberate selection of language so differing from that

used in earlier Acts indicates that a change of law was

intended."); In re Request for Assistance, 848 F.2d 1151, 1154

(11th Cir. 1988) ("When the legislature deletes certain lan-

guage as it amends a statute, it generally indicates an intent

to change the meaning of the statute."), cert. denied, 488 U.S.

1005 (1989). In light of the Congress's decision to remove

from the judicial review provision of the 1993 Act any refer-

ence to the APA, we also conclude that Programmer and

NAB err in suggesting that the arbitrary and capricious

standard continues to control our subsection 802(g) review.9

__________

9 The 1993 Act also repealed subsection 803(a) of the 1976 Act,

which provided that, "[e]xcept as otherwise provided in this chapter,

Moreover, subsection 802(g) plainly does not evince a con-

gressional intent to subject the Librarian's decision to more

searching review than we have in the past applied to a

Tribunal decision. Further, we cannot ignore the simplifica-

tion of review language the 1993 Act achieved: we now ask

__________

the Tribunal shall be subject to the provisions of the Administrative

Procedure Act [ ] ( ... title 5, United States Code, chapter 5,

subchapter II and chapter 7)." 17 U.S.C. s 803(a) (1976). The

1993 Act's sole reference to the APA is found in subsection 802(c),

which requires the Panel to conduct its proceedings "subject to

subchapter II of chapter 5 of title 5"--the notice and comment

provisions of the APA. See 17 U.S.C. s 802(c).

We find these changes, together with the significant structural

changes effected by the 1993 Act, to be compelling evidence of the

Congress's intent to limit the applicability of the APA. Thus, to the

extent the petitioners argue that the strong presumption in favor of

applying the APA requires us to adhere to the review standards set

forth in 5 U.S.C. s 706(2), we think this is one of those unusual

circumstances in which the Congress's intent is sufficiently clear to

overcome the presumption. Indeed, the Supreme Court reached a

similar conclusion in somewhat analogous circumstances:

Exemptions from the terms of the Administrative Procedure

Act are not lightly to be presumed in view of the statement in

s 12 of the Act that modifications must be express. ... But

we cannot ignore the background of the 1952 immigration

legislation, its laborious adaptation of the Administrative Proce-

dure Act to the deportation process, the specific points at which

deviations from the Administrative Procedure Act were made,

the recognition in the legislative history of this adaptive tech-

nique and of the particular deviations, and the direction in the

statute that the methods therein prescribed shall be the sole

and exclusive procedure for deportation proceedings. Unless

we are to require the Congress to employ magical passwords in

order to effectuate an exemption from the Administrative

Procedure Act, we must hold that the present statute expressly

supersedes the hearing provisions of that Act.

Marcello v. Bonds, 349 U.S. 302, 310 (1955); accord Asiana Air-

lines, Inc. v. FAA, 134 F.3d 393, 396-99 (D.C. Cir. 1998) (finding

APA notice and comment requirements inapplicable because their

simply whether "on the basis of the record before the Librari-

an, ... the Librarian acted in an arbitrary manner," 17

U.S.C. s 802(g), whereas formerly we asked whether the

Tribunal's decision was

(A) arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege,

or immunity;

(C) in excess of statutory jurisdiction, authority, or

limitations, or short of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case

subject to sections 556 and 557 of [Title 5] or otherwise

reviewed on the record of an agency hearing provided by

statute; or

(F) unwarranted by the facts to the extent that the

facts are subject to trial de novo by the reviewing court.

5 U.S.C. s 706(2). Thus, for us to conclude that acting in an

"arbitrary manner" is synonymous with the list of administra-

tive transgressions set forth in the APA would be absurd. Cf.

Steadman v. SEC, 450 U.S. 91, 98-99 (1981) (finding signifi-

cant difference between APA's "substantial evidence" test

and statutory language requiring that agency's order be

"supported by and in accordance with ... substantial evi-

dence").

The 1993 Act also establishes a royalty distribution struc-

ture that differs from its predecessor in important respects.

First, the 1993 Act inserts an additional layer of administra-

tive review by the Register and the Librarian between the

factfinder's conclusions and our review. See 17 U.S.C.

s 802(e)-(f). The Tribunal, however, had both the first and

last administrative word under the procedure established by

the 1976 Act. See 17 U.S.C. ss 801-810 (1976). Second, the

two-stage decisionmaking process established by the 1993 Act

must now be completed in 240 days whereas the Tribunal had

__________

application would render superfluous statutory language specifying

rulemaking procedures agency was to follow).

365 days to conclude its single-stage process under the 1976

Act. Compare 17 U.S.C. s 802(e)-(f), with 17 U.S.C. s 804(e)

(1976). Third, the Panel's report must be accompanied by

the written record and need set forth only "the facts that the

arbitration panel found relevant to its determination," id.

s 802(e), whereas the Tribunal was obliged to "state in detail

the criteria that [it] determined to be applicable to the

particular proceeding, the various facts that it found relevant

to its determination in that proceeding, and the specific

reasons for its decisions," 17 U.S.C. s 803(b) (1976).10

Fourth, and perhaps most significantly, the 1993 Act changes

the paradigm for administrative decisionmaking: it replaces

the Tribunal's quasi-adjudication with an arbitration under-

taken by an ad hoc panel whose proposed settlement is then

reviewed by final decisonmakers, the Register and the Li-

brarian. See 1993 House Report at 11 ("The experience with

arbitration under the Section 119 [of Title 17] satellite com-

pulsory license was positive, and indicates that this approach

can work for the other royalty schemes in title 17").

The foregoing structural changes are also perfectly consis-

tent with the Congress's evident intent to facilitate expedi-

tious and informal settlement of claims at the administrative

level and to discourage resort to formal, protracted and costly

judicial processes of resolving disputes.11 See id. at 13

("[T]he panels, with the assistance of the Copyright Office,

must promulgate and be governed by clear procedural and

evidentiary guidelines designed to ensure fundamental fair-

ness. Rules of discovery that can expedite the parties' pre-

sentation of their cases are particularly important in this

__________

10 While the legislative history of the 1993 Act states that "[a]

clear report setting forth the panel's reasoning and findings will

greatly assist the Librarian of Congress" in conducting his review

of the report, a "clear report" is not required under subsection

802(e). 1993 House Report at 13.

11 Indeed, almost two years will have elapsed from the date of the

Librarian's final decision to judicial resolution of the parties' claims

for royalties that were collected, in some instances, more than eight

years ago.

respect, since early discovery and clear evidentiary rulings

can go far in facilitating settlements and a more streamlined

arbitration process."); cf. Devine v. White, 697 F.2d 421, 436

(D.C. Cir. 1983) ("Such a shift from the arbitral model, in

which decision makers are free to focus solely on the case

before them rather than on the case as it might appear to an

appellate court, to the administrative model, in which decision

makers are often concerned primarily with building a record

for review, would substantially undercut the ability of arbitra-

tors successfully to resolve disputes...."); Office & Profes-

sional Employees Union, Local 2 v. Washington Metro. Area

Transp. Auth., 724 F.2d 133, 137 (D.C. Cir. 1983) ("If parties

to arbitration could freely relitigate their complaints in the

courts, arbitration would cease to be a method to achieve

prompt resolution of conflict, but would instead become a new

layer of review, and a new cause for delay.").

We find additional evidence of a legislative intent to narrow

the scope of judicial review in the history of the 1993 and the

1976 Acts. The Senate bill that originally gave rise to the

1976 Act would have limited judicial review of a Tribunal

decision to three circumstances: "(1) The determination was

procured by corruption, fraud, or undue means; (2) there was

evident partiality or corruption in any of the members of the

Tribunal, or (3) any member of the Tribunal was guilty of any

misconduct by which the rights of any party were preju-

diced." 1976 House Report at 179. This standard is materi-

ally indistinguishable from the one set forth in the Arbitration

Act. See infra note 12. The House, however, concluded that

the Senate's judicial review provision was "far too restrictive,"

1976 House Report at 179, and thus it reported an amend-

ment to the bill, providing "for the full scope of review

provided by Chapter 7 of the Administrative Procedure Act,"

id. The House prevailed and section 810, providing for full

APA review, became law. See H.R. Conf. Rep. No. 94-1733,

at 81-82 (1976).

In enacting the 1993 Act, however, the House appears to

have come around to something closer to the Senate's original

proposal to limit judicial review of royalty distribution deci-

sions to claims cognizable under the Arbitration Act. Com-

pare infra note 12 (setting forth Arbitration Act review

provision that authorizes court to set aside award where there

is "evident partiality or corruption" by arbitrator), with 1993

House Report at 12-13 (1993) ("Given that many arbitrations

will involve multiple parties, the Librarian of Congress and

the Register of Copyrights must be scrupulous to avoid even

the appearance of selecting arbitrators that may be believed,

incorrectly or not, to favor one party.").

We agree nonetheless with the Librarian that there is

insufficient evidence to conclude that the Congress, in enact-

ing subsection 802(g), intended to adopt the extremely cir-

cumscribed review standard set forth in the Arbitration Act, 9

U.S.C. s 10.12 The 1993 Act does not expressly refer to the

Arbitration Act and the "arbitrary manner" language of

subsection 802(g) is far from synonymous with the limited

procedural and ethical infirmities supporting vacatur of an

arbitration award pursuant to the Arbitration Act. Cf. Office

& Professional Employees, 724 F.2d at 139 ("Because the

statutory framework of the [Railway Labor Act (RLA)] and

of the Compact [interstate agreement authorized by the

Congress] are substantially dissimilar, we cannot assume,

without any supporting evidence of legislative intent, that the

mere presence in both statutes of the words 'final and

__________

12 Under the Arbitration Act, a district court is authorized to set

aside an arbitrator's award only in the following circumstances:

(1) Where the award was procured by corruption, fraud, or

undue means.

(2) Where there was evident partiality or corruption in the

arbitrators, or either of them.

(3) Where the arbitrators were guilty of misconduct in refus-

ing to postpone the hearing, upon sufficient cause shown, or in

refusing to hear evidence pertinent and material to the contro-

versy; or of any other misbehavior by which the rights of any

party have been prejudiced.

(4) Where the arbitrators exceeded their powers, or so im-

perfectly executed them that a mutual, final, and definite award

upon the subject matter submitted was not made.

9 U.S.C. s 10(a).

binding' permits a court to superimpose the RLA's congres-

sionally-enacted standard of review [for arbitration awards]

onto the Compact."). Further, the structure of the royalty

distribution system, interposing a layer of administrative

review between the "arbitrators' " decision and our review of

that decision, further distinguishes the system established by

the 1993 Act from arbitrations covered by the Arbitration

Act. See Librarian Decision, 61 Fed. Reg. at 55,656 ("Typical-

ly, an arbitrator's decision is not reviewable, but the [1993]

act created two layers of review: the Librarian and the Court

of Appeals for the District of Columbia."). Finally, review of

the merits of an arbitrator's decision is generally proscribed

by the Arbitration Act, cf. Timken Co. v. Local Union No.

1123, United Steelworkers of Am., AFL-CIO, 482 F.2d 1012,

1014 (6th Cir. 1973) ("[W]hile a court is empowered to deter-

mine whether an arbitrator's award exceeded the limits of his

contractual authority ... it may not review the merits of an

arbitration award."), whereas subsection 802(g) appears to

permit some (albeit quite limited) review of the merits of the

Librarian's assessment of the settlement.

B. Applicable Standard of Review

Having sketched the general limits of our review, we must

now give content to the "arbitrary manner" standard of

subsection 802(g) and in so doing define more clearly the path

we follow in reviewing decisions of the Librarian. Cf. Stead-

man v. SEC, 450 U.S. 91, 95 (1981) ("Where Congress has not

prescribed the degree of proof which must be adduced by the

proponent of a rule or order to carry its burden of persuasion

in an administrative proceeding, this Court has felt at liberty

to prescribe the standard, for it is the kind of question which

has traditionally been left to the judiciary to resolve.") (inter-

nal quotations, brackets and citations omitted). As we have

repeatedly emphasized in earlier royalty distribution deci-

sions, any standard of review must be adapted to fit the

administrative decisionmaking process to which it is to be

applied. See NAB I, 675 F.2d at 375 ("Our assessment of the

Tribunal's procedures must consider the difficulties facing the

agency and the mandate given it by Congress."); Recording

Indus. Ass'n v. Copyright Royalty Tribunal, 662 F.2d 1, 8

(D.C. Cir. 1981) ("[W]e must bear in mind that the thorough-

ness of the factual support an agency can supply for its

decision will vary with the nature of the decision being

made.") (hereinafter RIA); National Cable Television v.

Copyright Royalty Tribunal, 724 F.2d 176, 181 (D.C. Cir.

1983) ("The tautness of court surveillance of the rationality of

agency decisionmaking, however, depends on the nature of

the task assigned to the agency. ... [I]f Congress entrusts a

novel mission to an agency and specifies only grandly general

guides for the agency's implementation of legislative policy,

judicial review must be correspondingly relaxed.") (hereinaf-

ter NCT). Further, the standard to which we hold an

administrative decisionmaker may become more rigorous over

time as the decisionmaker acquires greater experience with a

particular administrative scheme. See CBN, 720 F.2d at 1319

("As the Tribunal continues to accumulate experience with

royalty fee distributions, we continue to hope that the clarity

of its decisionmaking will improve."); cf. Permian Basin

Area Rate Cases, 390 U.S. 747, 792 (1968) ("We are, in

addition, obliged at this juncture to give weight to the unusual

difficulties of the first area proceeding; we must, however,

emphasize that this weight must significantly lessen as the

Commission's experience with area regulation lengthens.").

More fundamentally, in framing the standard of review, we

must respect the Congress's delegation of exceedingly broad

authority to the Librarian, as advised by the Register and the

Panel, to apportion royalties appropriately among the claim-

ants, just as we earlier honored the expansive authority

entrusted to the Tribunal to do the same:

We emerge from our analysis of these inherently subjec-

tive judgment calls and rough balancing of hotly compet-

ing claims with one overriding conclusion: it is the

Tribunal [now Librarian] which Congress, for better or

worse, has entrusted with an unenviable mission of divid-

ing up the booty among copyright holders. ... [T]he

broad discretion necessarily conferred on the Copyright

Royalty Tribunal [now Librarian] in making its distribu-

tions is emphatically clear.

NAB II, 772 F.2d at 940; accord NCT, 724 F.2d at 182 ("In

sum, Congress vested in the Tribunal legislative discretion

greater than that committed to regulatory agencies engaged

in cost of service rate making. ... We must recognize the

judgmental expertise of the Tribunal's members regarding

copyright policy, ... and demand only an accounting ade-

quate to assure us that the rates we review are not lacking in

rationality.").13

__________

13 To the extent the petitioners claim that the Librarian's decision

is not entitled to deference because ad hoc arbitration members do

not possess expertise in the area of cable royalties, we think their

claim misapprehends the source of our solicitude towards the

administrative decisionmaker's expertise. The Panel, as the initial

factfinder, is in the best position to weigh evidence and gauge

credibility. See Concrete Pipe, infra; cf. Asociacion de Composi-

tores y Editores de Musica Latinoamericana v. Copyright Royalty

Tribunal, 854 F.2d 10, 13 (2d Cir. 1988) ("[W]e must review a

challenge to the Tribunal's evidentiary rulings with some deference,

for the type of proof that will be acceptable and the weight it should

receive lie largely in the discretion of the [Tribunal].") (internal

quotations omitted). Moreover, by design, the expertise of both the

Register and the Librarian are applied to the royalty distribution

question through their review and approval or rejection of the

Panel's proposed settlement of claims and thus the decision that is

ultimately before us for review may fairly be said to be the product

of specialized administrative expertise. Cf. Federal Radio Comm'n

v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266, 276 (1933)

("Dealing with activities admittedly within its regulatory power, the

Congress established the commission as its instrumentality to pro-

vide continuous and expert supervision and to exercise the adminis-

trative judgment essential in applying legislative standards to a

host of instances. These standards the Congress prescribed. The

powers of the commission were defined, and definition is limitation.

Whether the commission applies the legislative standards validly set

up, whether it acts within the authority conferred or goes beyond it,

whether its proceedings satisfy the pertinent demands of due

process, whether, in short, there is compliance with, the legal

With respect to the particular administrative scheme estab-

lished by the 1993 Act, we note that although the word

"arbitrary" appears in both subsections 802(g) and 802(f), our

"arbitrary manner" review of the Librarian's decision is not

coextensive with the Librarian's "arbitrary and legal" review

of the Panel's proposed settlement. Compare 17 U.S.C.

s 802(g) (authorizing court to vacate or modify decision if

"the Librarian acted in an arbitrary manner ") (emphasis

added), with id. s 802(f) (requiring Librarian to adopt Panel's

proposed settlement unless it "is arbitrary or contrary to the

applicable provisions of this title") (emphasis added). This is

not a surprising administrative arrangement given the bifur-

cated review of royalty awards (first by the Librarian and

then by this Court) and the deference to be accorded the

Register's and the Librarian's expertise in royalty distribu-

tion. Cf. Concrete Pipe & Prods. of California, Inc. v.

Construction Laborers Pension Trust for S. California, 508

U.S. 602, 623 (1993) ("[A] reviewing body characteristically

examines prior findings in such a way as to give the original

factfinder's conclusions of fact some degree of deference.

This makes sense because in many circumstances the costs of

providing for duplicative proceedings are thought to outweigh

the benefits (the second would render the first ultimately

useless), and because, in the usual case, the factfinder is in a

better position to make judgments about the reliability of

some forms of evidence than a reviewing body acting solely

on the basis of a written record of that evidence."); United

States v. Morgan, 313 U.S. 409, 416-17 (1941) ("Another

attack upon the Secretary's order is the conventional objec-

tion that the findings were not rooted in proof. To reexamine

here with particularity the extensive findings made by the

Secretary and to test them by a record of 1340 printed pages

and thousands of pages of additional exhibits would itself go a

long way to convert a contest before the Secretary into one

before the courts.").

__________

requirements which fix the province of the commission and govern

its actions, are appropriate questions for judicial decision.").

Moreover, subsection 802(g) plainly limits our review to the

Librarian's decision. That the Panel may have acted arbi-

trarily affords no basis for this Court to set aside a royalty

award unless the Librarian "acted in an arbitrary manner" in

ratifying the Panel's action. For example, we think the

Librarian would plainly act in an arbitrary manner if, without

explanation or adjustment, he adopted an award proposed by

the Panel that was not supported by any evidence or that was

based on evidence which could not reasonably be interpreted

to support the award. Cf. Northern Pac. Ry. v. Department

of Pub. Works, 268 U.S. 39, 44-45 (1925) ("An order based

upon a finding made without evidence, ... or upon a finding

made upon evidence which clearly does not support it, ... is

an arbitrary act against which courts afford relief.") (internal

citations omitted); ICC v. Louisville & Nashville R.R., 227

U.S. 88, 91 (1913) ("A finding without evidence is arbitrary

and baseless.... In the comparatively few cases in which

such questions have arisen it has been distinctly recognized

that administrative orders, quasi judicial in character, are

void if ... the finding was contrary to the indisputable

character of the evidence ... or if the facts found do not, as a

matter of law, support the order made ....") (internal quota-

tions and citations omitted); Concrete Pipe, 508 U.S. at 623

("And application of a reasonableness standard is even more

deferential than [clear error review], requiring the reviewer

to sustain a finding of fact unless it is so unlikely that no

reasonable person would find it to be true, whatever the

required degree of proof."); INS v. Elias-Zacarias, 502 U.S.

478, 481 n.1 (1992) ("To reverse the [Board of Immigration

Appeals] finding we must find that the evidence not only

supports [a contrary] conclusion, but compels it.").

In addition, in reviewing the Panel's proposed settlement

according to the "legal" half of the "arbitrary and legal"

standard of subsection 802(f), we think the Librarian would

act in an arbitrary manner if he approved an award proposed

by the Panel that unmistakably contravened applicable provi-

sions of Title 17 or if he himself transgressed unequivocal

statutory commands. Cf. Stark v. Wickard, 321 U.S. 288,

309-10 (1944) ("When Congress passes an Act empowering

administrative agencies to carry on governmental activities,

the power of those agencies is circumscribed by the authority

granted. This permits courts to participate in law enforce-

ment entrusted to administrative bodies only to the extent

necessary to protect justiciable individual rights against ad-

ministrative action fairly beyond the granted powers. The

responsibility of determining the limits of statutory grants of

authority in such instances is a judicial function entrusted to

the courts."); Chamber of Commerce of United States v.

Reich, 74 F.3d 1322, 1327 (D.C. Cir. 1996) (" '[A]cts of all [a

government department's] officers must be justified by some

law, and in case an official violates the law to the injury of an

individual the courts generally grant relief. ... Otherwise

the individual is left to the absolutely uncontrolled and arbi-

trary action of a public and administrative officer, whose

action is unauthorized by any law, and is in violation of the

rights of the individual.' ") (quoting American School of Mag-

netic Healing v. McAnnulty, 187 U.S. 94, 108, 110 (1902)).

Of course, in assessing whether a particular award contra-

venes provisions of the 1993 Act, the Librarian's interpreta-

tion of ambiguous provisions that he is charged with adminis-

tering is due deference. See Chevron USA, Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 844 (1984)

("We have long recognized that considerable weight should be

accorded to an executive department's construction of a statu-

tory scheme it is entrusted to administer."); NBC, 848 F.2d

at 1296 (finding Tribunal's adoption of presumption, "in the

face of congressional silence, ... a permissible interpretation

of the statute, to which we defer" under Chevron, 467 U.S. at

842-43).

Accordingly, if the Librarian's final award to a class claim-

ant bears a rational relationship to the record evidence, is

plausibly explained and is otherwise developed in a manner

that does not plainly contravene applicable statutory provi-

sions, our task is at an end and we must uphold the award.

While we acknowledge the deference that this approach ac-

cords to the Librarian's decision is unusually wide, it com-

ports with the unusual character of the cable royalty distribu-

tion system that the Congress has devised. See American

Pub. Gas Ass'n v. Federal Power Comm'n, 567 F.2d 1016,

1031 (D.C. Cir. 1977) ("When regulation features novelty, in

subject, technique, or both, the narrow scope of review estab-

lished by conventional doctrine is further circumscribed.").

III. THE PETITIONERS' CHALLENGES

Applying the arbitrary manner standard of review to the

individual claims raised by the petitioners, we conclude that

none of them affords a basis for vacating or remanding the

Librarian's decision.

A. Programmer's Claims

Programmer advances three reasons to remand the Librar-

ian's decision: (1) his order did not catenate each award to

substantial record evidence and he did not himself explain

and assess the basis for each award; (2) he acceded to the

Panel's illegal elimination of the "harm" criterion from the

royalty apportionment calculus; (3) his order, adopting the

Panel's proposed settlement as modified by the Register's

recommendation, was arbitrary because it (a) endorsed the

Panel's differential treatment of identically situated claim-

ants, (b) did not remedy the Panel's improper reliance on

certain evidence to determine JSC's award and (c) ratified the

Panel's unduly large award to PBS, failing to take proper

account of evidence suggesting a different result. None of

these arguments is persuasive.

(1) Adequacy of Librarian's Order

Programmer's first argument is that the Librarian's order

should have discussed the evidence before the Panel and the

way in which that evidence ultimately led the Panel, and

subsequently the Register and the Librarian, to conclude that

each award was appropriate. In other words, it was incum-

bent on the Librarian to duplicate the work of the Panel and

the Register in a final order so that the reasoning underlying

a particular award would be less caliginous. See Programmer

Br. 6 ("The Librarian's failure to create a complete picture

reflects a lack of reasoned decisionmaking."). Although Pro-

grammer has not cast its argument in these terms, its claim is

essentially twofold: (1) subsection 802(f) required the Librari-

an to issue an order that fully discussed each stage of the

decisionmaking process as well as the evidentiary bases for

each of the awards; (2) even if subsection 802(f) did not

require this of the Librarian, it was nonetheless arbitrary for

him not to issue such an order on his own. We do not agree.

First, section 802 of Title 17 cannot fairly be understood to

oblige the Librarian or the Register to duplicate the work of

the Panel. The two-step Chevron framework guides our

assessment of the Librarian's interpretation:

Under this analysis, the court must first exhaust the

traditional tools of statutory construction to determine

whether the Congress has spoken to the precise question

at issue.... If the court can determine congressional

intent, then that interpretation must be given effect....

If, on the other hand, the statute is silent or ambiguous

with respect to the specific issue, then the court will

defer to a permissible agency construction of the statute.

Natural Resources Defense Council, Inc. v. Browner, 57 F.3d

1122, 1125 (D.C. Cir. 1995) (internal citations and quotations

omitted).

Under step one of the Chevron analysis, we look to the

statutory language and structure to determine the Librarian's

obligations. Cf. Steadman, 450 U.S. at 97 ("The search for

congressional intent begins with the language of the stat-

ute."). According to subsection 802(e), the Panel is to pre-

pare and forward to the Librarian a "report" that is "accom-

panied by the written record" and that "sets forth the facts

that the arbitration panel found relevant to its determina-

tion." Subsection 802(f) does not similarly oblige the Librari-

an to make a report of his findings. See 17 U.S.C. s 802(f),

quoted supra. Indeed, the statute gives the Librarian only

60 days to review the Panel's report and within that time

period he must adopt the proposed settlement unless he finds

it arbitrary or illegal. Id. If he rejects the Panel's proposal,

then, without any enlargement of the review period, the

Librarian must "issue an order setting the ... distribution of

fees." Id. (emphasis added). In either instance, the Librari-

an must arrange for Federal Register publication of his

decision and "the determination of the arbitration panel" and

he must also make available for public inspection and duplica-

tion the Panel's report and the record accompanying it. Id.

In view of these statutory requirements, we cannot con-

clude that the Librarian is required by subsection 802(f) to

issue an order fully recapitulating the work of the Register

and the Panel. Had this been the Congress's intent, there

would have been no need to require the Librarian to make

available the Panel's report and accompanying record, and

according to well-established principles of statutory construc-

tion, we do not read subsection 802(f) in a manner that

renders superfluous the final sentence of that provision. See

Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) ("In

construing a statute we are obliged to give effect, if possible,

to every word Congress used.").

Moreover, we find nothing unreasonable or impermissible

about the Librarian's understanding of his obligations under

subsection 802(f). Cf. NAB I, 675 F.2d at 376 ("The Tribunal

was free to structure its proceedings in a reasonable fashion,

... and deference is particularly due where courts review

statutory interpretations by the agency charged with the

responsibility of setting [the] machinery in motion, of making

the parts work efficiently and smoothly while they are yet

untried and new."). Indeed, the virtues of the Librarian's

interpretation are obvious: it avoids duplication of effort and

better enables him to conclude his responsibilities within the

60 days subsection 802(g) allots for his review and (if neces-

sary) modification of the Panel's proposed settlement. See

Puerto Rico Maritime Shipping Auth. v. Federal Maritime

Comm'n, 678 F.2d 327, 352 (D.C. Cir. 1982) ("The Commis-

sion's Order, coupled with the ALJ's opinion, adequately

informs us of its findings and its reasoning. In the context of

these expedited proceedings, we ask no more.").

Second, under the standard of review articulated in Part II,

supra, we find nothing in the Librarian's decision to adopt the

Panel's proposed settlement, as modified in certain particu-

lars by the Register's recommendation, that suggests he

discharged his review obligations in an arbitrary manner.

See CBN, 720 F.2d at 1304 ("Accordingly, as we stated in

[NAB I], the Tribunal's findings will be upheld, though of less

than ideal clarity, if the path which the agency follows can

reasonably be discerned.") (internal citations and quotations

omitted); id. at 1306 ("It is well established that an agency

may explain itself by incorporating by reference parts of the

record....").14

(2) Elimination of Harm Criterion

Programmer next argues that the Librarian acted in an

arbitrary manner in approving the Panel's conclusion that the

harm criterion is not a useful means by which to assess the

merits of a class claim.15 This argument, like the preceding

__________

14 Contrary to Programmer's suggestion, we find nothing improp-

er in the Register's submission of questions to the Panel to clarify

its reasons for proposing a particular award. As with the Librari-

an's decision, subsection 802(f) does not elaborate on the content of

the Register's recommendation to the Librarian. In the face of

such legislative silence, Chevron deference is due the Register's

interpretation, which is plainly not unreasonable. Further, to the

extent Programmer suggests that the Register's "remand" to the

Panel impermissibly lengthened the Librarian's review period and

that the Librarian's decision should be set aside on this basis, we

disagree. Even if correct, a missed deadline in a case such as this

cannot justify invalidation of the Librarian's decision. See NCT,

724 F.2d at 189 n.23 ("It would be irrational and wholly unprece-

dented for a court to direct an agency to scrap a year's hearings

and decisionmaking effort and start over because its proceeding did

not conclude precisely on time.").

15 The Register's recommendation, adopted by the Librarian,

described the Panel's rejection of the harm criterion as follows:

It is clear from the Panel's answer [to certified questions about

the harm criterion] that, rather than treating all parties as

equally harmed and awarding equal shares of harm credit, the

Panel effectively determined that the harm criterion was a

complete nonfactor. The panel did not consider harm to be of

any value in determining the distribution percentages, instead

one, has two parts: (1) the Panel violated subsection 802(c)

and the Librarian did not take appropriate corrective action;

(2) the Panel did not sufficiently explain or support by

reference to the record evidence its decision to eliminate the

harm criterion and the Librarian did not remedy the deficien-

cy. The argument is meritless.

Contrary to Programmer's contentions, our past decisions

make clear that the Congress delegated to the Tribunal (and

now to the Librarian, the Register and the Panel) responsibil-

ity for developing the criteria by which claims are to be

assessed. See NAB I, 675 F.2d at 376 ("The Act explicitly

contemplates that the Tribunal will announce its decisional

criteria in the 'final determination.' ") (emphasis added);

CBN, 720 F.2d at 1313 ("In light of Congress' evident intent

to leave the development of 'particular, limiting standards for

distribution' to the Tribunal, ... we have affirmed the Tribu-

nal's five allocative factors as a reasonable interpretation of

legislation by the agency charged by Congress with its en-

forcement.") (emphasis added); 1976 House Report at 97.

Moreover, we can find nothing in the language, structure or

history of subsection 802(c) that evinces any intent to rescind

the former delegation of authority to determine the appropri-

ate criteria by which to gauge distribution claims. Subsection

802(c) merely states that "arbitration panels shall act on the

basis of a fully documented written record, prior decisions of

the Copyright Tribunal, prior copyright arbitration panel

determinations, and rulings by the Librarian of Congress

under subsection 801(c)." 16 17 U.S.C. s 802(c) (emphasis

__________

it emphasized the marketplace value criteria. As a result, all

parties received a zero credit for harm, and the evidence

presented by the parties regarding this factor was given no

weight.

Librarian Decision, 61 Fed. Reg. at 55,658.

16 Subsection 801(c) provides:

The Librarian of Congress, upon the recommendation of the

Register of Copyrights, may, before a copyright arbitration

royalty panel is convened, make any necessary procedural or

added). Similarly, while the ad hoc panel is now the initial

factfinder, its decision is subject to scrutiny by both the

Register and the Librarian and, if the latter do not concur in

the panel's rejection of prior Tribunal practice, they may

force compliance with that practice. See, e.g., Librarian

Decision, 61 Fed. Reg. at 55,661 (concluding that Panel should

have adhered to Tribunal practice of setting final percentage

awards on basis of awards to all classes, regardless whether

class settled its claims or litigated them before Panel). This

arrangement also dovetails with the Librarian's obligations

under the arbitrary and legal review standard of subsection

802(f) as well as his authority, pursuant to subsection 801(c),

to issue orders establishing the procedures the Panel and

claimants are to follow. Accordingly, we defer to the Librari-

an's reasonable and permissible interpretation of the require-

ments of subsection 802(c) under the second step of the

Chevron analysis.17

Nor has Programmer given us any basis to conclude that

the Librarian "acted in an arbitrary manner" in finding that

the Panel's elimination of the harm criterion was neither

arbitrary nor contrary to applicable law. The policy reasons

Programmer advances to support retaining the harm criterion

are misdirected; those are matters for the Librarian and his

agents, not this Court. Cf. NAB II, 772 F.2d at 940. Simi-

larly, the Panel's explanation for jettisoning the harm criteri-

on, as refined by the Register's recommendation and the

Librarian's decision, is more than adequate to survive scruti-

ny under the arbitrary manner standard; the Panel explained

that the harm criterion was in fact simply a different expres-

sion of diminution in market value and that the evidence did

not provide for any meaningful way to distinguish among the

__________

evidentiary rulings that would apply to the proceedings con-

ducted by such panel.

17 U.S.C. s 801(c).

17 Accordingly, we also defer to the Librarian's and the Panel's

reasonable interpretation of the "harm" criterion as applied by the

Tribunal in the past.

parties.18 No more was required of the Panel or of the

Librarian in adopting the Panel's conclusion. Thus, having

properly rejected the utility of such evidence, neither the

Panel nor the Librarian was obliged to go further.

(3) Panel's Evidentiary Findings

Finally, Programmer claims that the Librarian acted in an

arbitrary manner by approving the Panel's proposed awards

as adjusted by the Register's recommendation even though

the Panel (1) did not evaluate market value according to a

uniform set of criteria with respect to the Devotional and

NAB awards, (2) did not accord similar weight to comparable

evidence with respect to the JSC award and (3) did not

consider some evidence that plainly detracted from its conclu-

sions with respect to the PBS award.19 However, none of the

__________

18 The Panel responded to the Register's certified questions re-

garding the harm criterion as follows:

[T]he panel found that evidence of harm was not quantifiable

and did not establish that any one party was entitled to a harm

credit more than any other party. Other than identifying that

a claimant whose program was transmitted without compensa-

tion has been harmed, it did not lend any appreciable informa-

tion on relative market value. At least two expert witnesses

testified that "harm" is merely another way of describing, or an

aspect of, the supply side of the market, just as "benefit" is

another way of describing, or an aspect of, the buyer's side of

the market.

Panel Responses to Certified Questions at 4; accord Panel Report

at 20-25 (concluding that " 'market value' is the only logical and

legal touchstone" by which to assess the merits of various class

claims).

19 To the extent Programmer claims that subsection 802(f) allows

the Librarian only two choices--adoption or rejection of the Panel's

report in toto--we find nothing in the language of the provision that

requires that interpretation and thus we accord the Librarian's

reasonable interpretation deference under Chevron. Cf. NBC, 848

F.2d at 1296 ("This presumption by the [Tribunal], in the face of

congressional silence, is a permissible interpretation of the statute,

to which we defer."). Further, we think it plain from the Librari-

an's order that the Register (and thus the Librarian) adopted the

asserted errors provides a basis for adjusting Programmer's

award. Even if the awards to Devotional, NAB, JSC and

PBS were arbitrary, Programmer does not explain how cor-

recting the errors would benefit it. Indeed, to the extent

Programmer's first claim suggests that Devotional's claim

was undervalued, success on the claim could threaten only to

reduce the Programmer award. Accordingly, because sub-

section 802(g) grants an appeal only to an "aggrieved party,"

and because Programmer has failed to show how it has been

aggrieved by the Panel's allegedly arbitrary evidentiary find-

ings regarding other classes' awards, we cannot hear the

claims. See Asociacion de Compositores y Editores de Musi-

ca Latinoamericana v. Copyright Royalty Tribunal, 809 F.2d

926, 928 (D.C. Cir. 1987) ("ACEMLA, however, is not ag-

grieved by the award to LAMCO. The two are, for our

purposes, separate entities; ACEMLA thus has no statutory

basis to challenge that portion of the [Tribunal's] decision that

affects LAMCO.").

B. Devotional's Claims

Devotional requests that we adjust its award upward to

correct for four errors that the Librarian allegedly made in

approving Devotional's award, as it was adjusted by the

Register's recommendation: (1) the Librarian failed to inde-

pendently examine the record and make his own determina-

tion as to the appropriate share of the royalty funds to which

each class was entitled; (2) the Panel awarded Devotional a

__________

Panel's proposed settlement, except for the technical adjustments

the Register recommended. See Librarian Decision, 61 Fed. Reg.

at 55,653 ("The Librarian is adopting in part and rejecting in part

the decision of the Copyright Arbitration Royalty Panel (CARP).

The rejection takes the form of making some adjustments to the

distribution percentages."); id. at 55,669 ("[T]he Librarian of Con-

gress fully endorses and adopts her [the Register's] recommenda-

tion to accept the Panel's decision in part and reject it in part. For

the reasons stated in the Register's recommendation, the Librarian

is exercising his authority under 17 U.S.C. s 802(f) and is issuing an

order setting the distribution of cable royalty fees.").

share of the royalties that was nominally the same as its

share of the 1989 funds, but the Librarian, without any

evidentiary basis for his decision, adjusted downward the

Panel's proposed award to account for certain settlements the

Panel overlooked in its calculations; (3) the Librarian ratified

the Panel's arbitrary failure to increase the Devotional's

share as a result of the elimination of the harm criterion; (4)

the Librarian acceded to the Panel's arbitrary failure to

accord Devotional's viewership surveys and testimonial evi-

dence the same weight as it gave other claimants' evidence of

this kind. None of these claims warrants vacating or re-

manding Devotional's award.

(1) Librarian's Order

Devotional's first argument fails for the same reasons

Programmer's similar argument failed. As discussed above,

subsection 802(f) cannot reasonably be construed to require

the Librarian to duplicate the efforts of the Panel and the

Register; here the path of decisionmaking is reasonably

transparent and there is nothing unreasonable in the Librari-

an's decision to issue an order that addresses only the specific

problems the Register (and thus the Librarian) identified in

the original Panel report. See supra Part III.A.(1).20

__________

20 Nor is the mere fact that Devotional's award represented a

compromise between differing expert views of the value of its

programming a sufficient basis for finding the compromise figure

arbitrary. See NAB II, 772 F.2d at 940 (observing that percentage

awards are "inherently subjective judgment calls" and require

"rough balancing of hotly competing claims"); NCT, 724 F.2d at 187

("In essence, it appears that the [Tribunal] attempted to 'split the

difference.' We have upheld similar exercises of the [Tribunal's]

expert judgment before."). Moreover, the suggestion that the

Panel's process fell below the minimum constitutional requirements

of the Due Process Clause is specious. Cf. NAB I, 675 F.2d at 376

("Neither the Act nor the requirements of the due process were

violated by the Tribunal conducting that apportionment with the

open-mindedness that should accompany the performance of any

task for the first time.").

(2) Librarian's Explanation of Adjustment

The contention that neither the Librarian nor the Panel

articulated a rational reason for reducing Devotional's award

is also without merit. The Panel erroneously predicated its

proposed settlement on the assumption that 100% of the

royalty funds collected for 1990-1992 were in dispute. See

Panel Responses to Certified Questions at 3-5 (acknowl-

edging that Panel did not adjust proposed awards for NPR

settlement and that award to Devotional was "based on a

100% scale"). Consistent with the Register's recommenda-

tion, the Librarian corrected this mistaken assumption by

adjusting all of the class awards by an appropriate percentage

to account for the settlement of certain claims. See Librarian

Decision, 61 Fed. Reg. at 55,661. As a result, Devotional's

final share of the royalty funds was slightly lower than its

share of the 1989 funds. Compare Table 2 with Table 3.

Specifically, the relative difference between the Panel's pro-

posed award and the Librarian's final award was on the order

of 5.62% for the Basic Funds and 4.275% for the 3.75 Fund,

corresponding to an absolute difference of 0.06 and 0.04

percentage points, respectively.

Devotional argues that because the Panel found that its

circumstances had not changed, the Panel intended to award

Devotional the same amount that it received in the earlier

distribution (after the settlements). Because the earlier

amount was a post-adjustment figure, it seems to be arguing

that the Librarian should not have reduced its award in

adjusting for the Panel's omission of the settlement. In

Devotional's view, the reduction gave it a post-adjustment

award lower than its earlier award and this lower award does

not make sense in light of its unchanged circumstances. (Its

argument implies that it would be happy if the Librarian had

acknowledged the settlement by adjusting every other party's

award, but not its.)

Even if Devotional were correct that the Panel intended to

award it the same percentage it received in the earlier

distribution, we are reviewing the Librarian's decision, not

the Panel's. The Librarian's method of correcting the Panel's

mistake was neither arbitrary nor irrational. The Librarian

understood the arguments made by each party and explained

why he did not accept the Panel's original judgment. In

making his ultimate decision, he made a reasonable judgment

that it was not necessary to reconsider the relative entitle-

ments of each party in order to correct the Panel's mistake.

We need not decide whether the Panel had intended to give

Devotional a post-adjustment award equal to its earlier award

because the Librarian's final figure is only slightly changed

from the earlier one and remains within the zone of reason-

ableness. See NCT, 724 F.2d at 182 ("There has never been

any pretense that the [Tribunal's] rulings rest on precise

mathematical calculations; it suffices that they lie within a

zone of reasonableness."); NAB I, 675 F.2d at 379 (rejecting

arguments regarding quantitatively de minimis interests).

(3) Elimination of Harm Criterion

Devotional next argues that elimination of the harm criteri-

on should have resulted in an enlargement of its award. This

argument is also meritless. The harm criterion was but one

factor in the Tribunal's five-factor distribution calculus. See

supra Part I.A. Thus, the Panel's elimination of a single

factor hardly compels a particular adjustment to a class's

award based on the benefit or detriment the class may have

derived from the factor in the past. Indeed, while the Panel

eliminated the harm criterion, it also increased the weight

given to the marketplace value criterion, see Panel Report at

23. The effect of eliminating the harm factor is therefore

indeterminate; without knowing the relative magnitude of the

change according to each factor and whether any of the

assessments of other factors changed, it is well nigh impossi-

ble to predict what effect the elimination of the harm factor

might have on a final award. Cf. NAB II, 772 F.2d at 935

("Thus the issue is not whether the Canadians objectively

improved the quality of their evidentiary submissions, but

rather whether any such improvement was sufficient to war-

rant an award from the 1980 fund greater than the 1979

award, in light of the submissions made by other claimants.")

(emphasis added). Accordingly, the fact that Devotional's

award did not increase as a result of the elimination of the

harm criterion does not suggest arbitrary action by either the

Panel or the Librarian.

Moreover, the fact that the Panel found that Devotional's

circumstances had not changed since the distribution of 1989

funds does not require a different conclusion. As in past

distribution proceedings, the "changed circumstances" inquiry

was only one factor influencing the amount of royalties to

which a class of claimants was deemed entitled and therefore

the fact that this variable remained constant is no reason to

presume that all other variables did, that other classes'

relative shares remained the same or that this factor alone

should control a class's award. Indeed, in the past we have

explained the significance of the changed circumstances factor

in the following manner:

We agree that, as the parties themselves recognize, it

would be improper, as a matter of law, for the Tribunal

to rely solely upon a standard of "changed circum-

stances." The invalidity of this rigid approach is strong-

ly suggested by our two prior opinions, which expressly

contemplated that in the annual determination process

the claimants would improve upon the quality and so-

phistication of their evidentiary submissions. At the

same time, it is entirely appropriate for the Tribunal to

employ, as one of its analytical factors, the determination

whether circumstances have changed in the course of the

ensuing twelve months, inasmuch as that conclusion will

obviously be relevant to the question whether an award

should differ from the prior year's award. But if a

claimant presents evidence tending to show that past

conclusions were incorrect, the Tribunal should either

conclude, after evaluation, that the new evidence is un-

persuasive or, if the evidence is persuasive and stands

unrebutted, adjust the award in accordance with that

evidence.

NAB II, 772 F.2d at 932 (emphasis added); accord id. at 938

(rejecting similar argument that no change in circumstances

should have resulted in no change in percentage awarded).

We therefore find no reason to set aside the Devotional

award.

(4) Weighing of Evidence

Finally, Devotional suggests that the Panel arbitrarily ac-

corded less weight to some of Devotional's evidence than it

accorded to similar evidence introduced by other class claim-

ants. We do not agree. To begin, it is emphatically not our

role to independently weigh the evidence or determine the

credibility of witnesses--two duties entrusted solely to the

Panel and, before it, the Tribunal. See NAB II, 772 F.2d at

926 ("[T]he judicial task is not to weigh the evidence and fix

what in our view would constitute appropriate percentages.").

Further, in view of the exceptionally deferential review we

give the Librarian's awards, we can find nothing arbitrary in

the Panel's treatment of the evidence to which Devotional

refers. The fact that the Panel found that the Nielsen and

Bortz survey results reinforced one another with respect to

PBS's award but did not increase Devotional's award as a

result of increased viewership of Devotional programming

does not demonstrate that the Panel (and subsequently the

Librarian) arbitrarily discredited Devotional's evidence.21 Cf.

__________

21 The Nielsen and Bortz surveys were the principal and most

important statistical evidence before the Panel. See Panel Report

at 27-66. The Nielsen survey assesses the percentage of viewers

each type of programming attracts whereas the Bortz survey

calculates the value of the types of programming to cable transmit-

ters--which does not correlate perfectly to shares of viewers be-

cause cable companies may be more interested in acquiring certain

kinds of programming to diversify their offerings even though the

programming may have a narrower following. Id.

In Devotional's case, the uncorrected Bortz numbers show no

clear trend: for 1989 cable operators were willing to pay 4.3% of

specified funds for the Devotional programming; for 1990 they paid

3.8%; for 1991 they paid 4.3% and for 1992 they paid 3.9%.

Similarly, the Nielsen numbers for the same period do not reflect

any meaningful trend: for 1989, the Nielsen number was 0.22% of

viewers according to the survey methodology then in use; for 1990

the number, using a different methodology, was 1.0%; for 1991, the

NAB I, 675 F.2d at 381 ("The argument once again comes

down to methodology, and the Tribunal's refusal to rely

blindly on the data put forward by [a claimant] was not

unreasonable. The two approaches lead to a difference of

only three percentage points of the Fund, and we cannot say

that the Tribunal's choice falls outside a zone of reasonable-

ness."). Moreover, both the cable operator testimony and the

survey evidence to which Devotional refers fail to demon-

strate that the award the Panel ultimately arrived at in each

case was arbitrary. Simply because a claimant presented

strong evidence of one type does not compel the conclusion

that an award based on all of the evidence should have been

different: the Panel's ultimate decision necessarily rested

upon composite judgments as to the overall strength of the

evidentiary case submitted in support of and against a class

claim. Additionally, with respect to the cable operator testi-

mony Devotional introduced, the Panel found the testimony

less compelling than other operator testimony--which was

well within its prerogative. Compare Panel Report at 130

("The cable operator's assessment is not supported by any

new, persuasive evidence of avidity"), with id. at 87-88 (de-

scribing JSC's operator testimony, in context of strong statis-

tical and other evidence cumulatively corroborating operator

testimony); accord Librarian Decision, 61 Fed. Reg. at 55,666

("When a decision-making body weighs evidence, it may often

decide to accept one piece of evidence but reject another,

even though they appear similar. Anderson v. Bessemer

City, 470 U.S. 564, 574 (1985)."). Accordingly, we find noth-

ing compelling in the evidentiary record nor in the Panel's

and the Librarian's assessment of that record that would

enable us to conclude that the Librarian acted in an arbitrary

manner in fixing Devotional's award. See Librarian Decision,

61 Fed. Reg. at 55,666 ("While the Panel's explanation was

less than compelling, ... enough can be gleaned from it to

support the conclusion that the Panel rationally weighed the

differences in seemingly similar evidence.").

__________

number was less than 1.0%; for 1992, the number was once again

1.00%.

C. NAB's Claims

NAB argues that the Librarian acted in an arbitrary

manner by failing to adjust its award upward (and Program-

mer's award downward) for certain categorization errors that

were made in compiling the Nielsen results for NAB pro-

gramming. The argument proceeds from the premise that

the Panel, and subsequently the Register and the Librarian,

intended to award NAB a percentage of royalties within the

range described by the lower bound of its Nielsen survey

results. The Panel and the Librarian failed to effect this

intent, however, because they relied on incorrect Nielsen

numbers in fixing the amount of NAB's award at 7.5% of both

the Basic Fund and the 3.75 Fund--the midpoint of the lower

range described by NAB's Nielsen numbers, i.e., 7.0% to

8.0%. Instead, NAB contends that the Panel, and subse-

quently the Librarian, should have adjusted the Nielsen

results for certain alleged miscategorization errors involving

two programs--"National Geographic Explorer," a NAB pro-

gram, and "National Geographic on Assignment," a Program-

mer program--resulting in a larger award to NAB. We can

find nothing in these claims to suggest that the Librarian

"acted in an arbitrary manner" in declining to adjust the

NAB award.

To begin, because it is the Librarian's decision which is

directly before us on review, not the Panel's, the Librarian's

understanding of the Panel's intent with respect to a particu-

lar award is controlling unless patently implausible on the

record before him. Here, it is plain that neither the Librari-

an nor the Panel intended to make the Nielsen results the

sole determinant of NAB's share of the royalty funds. See

Librarian Decision, 61 Fed. Reg. at 55,665 ("The Panel has

clarified that it did not intend to award NAB its Nielsen

viewing share, but was only using those numbers as a refer-

ence point for determining the award."). As a result, even if

NAB is correct on its miscategorization claim, the claim fails

to provide a basis for setting aside the award; the adjusted

Nielsen figures were but one item of evidence that supported

the Panel's calculation of fair market value of the program-

ming, the "only logical and legal touchstone" for apportioning

royalties. Panel Report at 23; accord Panel Responses to

Certified Questions at 4 ("It was the Panel's assessment that

7.5% was the fair market value of [NAB] programming.");

Panel Report at 44 ("We cannot quantify the Nielsen statis-

tics as evidence of market value other than to say that actual

viewing is very significant when weighed with all other fac-

tors.") (emphasis added).

Moreover, even if the Panel and the Librarian had intended

to tie the NAB award to the lower limits of its Nielsen

viewing share, we find nothing arbitrary in the Panel's and

the Librarian's successive refusals to correct the Nielsen

numbers.22 It was well within the Panel's prerogative to

weigh the miscategorization evidence and other testimony and

conclude that, given the fact the Nielsen results were at best

an imperfect proxy for market value, it did not make sense to

attempt to refine the figures:

Dr. Peter Miller, in testifying for the JSC, says the

Nielsen figures should be looked at with some degree of

caution. He says the numbers could be biased in one

direction or another but that this cannot be quantified

and that we should take those numbers with "a grain of

salt." We do accept those numbers in that vein. We see

no need to engage in a lengthy discussion about the

Nielsen methodology in light of the fact that we accept

these numbers merely as a reference point and not as an

absolute value. Also, in addition to being unable to

quantify their various criticisms, the claimants who dis-

pute the Nielsen survey's accuracy present no alternative

evidence as to viewing.

The next question is, what do these numbers reveal

about market value? Program Suppliers acknowledge

__________

22 We reject any suggestion by NAB that the Panel was obligated

to correct the Nielsen figures simply because the Tribunal had

undertaken such a task in the past. Just as the Panel was

authorized to dispense with the harm criterion because it found the

criterion unhelpful, it was not required to follow the Tribunal's lead

on the miscategorization errors given its assessment of the impreci-

sion of the evidence. See supra discussion, Part III.A(2).

that the Nielsen study does not measure value; rather, it

measures tuning. Program Suppliers point out they did

not ask Nielsen to interpret what the results meant, but

left that to the other witnesses and the evidence. Pro-

gram Suppliers agree that the Nielsen figures are not

the sole determinant of market value.

Panel Report at 43; cf. NCT, 724 F.2d at 187 ("In sum, the

Tribunal sought to estimate a market price in the absence of

a functioning market. It used the best, indeed, the only,

analogies available to it. It could not mathematically derive

its ultimate decision. Inevitably, it used its expert judgment

to make a 'best guess'; we are not positioned to offer a better

one."). We believe this judgment to be an eminently reason-

able one and it is far from the type of disconnect between the

evidence and the award that could warrant our intervention

under the "arbitrary manner" standard of subsection 802(g).

Cf. Association of Am. Publishers, Inc. v. Governors of

United States Postal Serv., 485 F.2d 768, 773 (D.C. Cir. 1973)

("It would, of course, be the summum bonum if we had

accurate figures as to recent costs of carrying special fourth

class mail. The only available figures were inaccurate, but

were susceptible of rough adjustment. The Postal Service

proposed one method of adjustment; the Chief Examiner,

another. So the Commission more or less split the differ-

ence. No doubt it would have been possible to straighten out

some of the errors or supposed errors of adjustment in either

the Postal Service's or the Chief Examiner's calculations.

And if rate-making [or royalty distribution] were an exact

science such a counsel of perfection would be mandatory.

But, though courts hesitate to so admit, they know that in the

rate-making area, John Selden was prophetic in declaring

that in governing it is not juggling, but too much juggling

that is to be blamed.").

IV. CONCLUSION

In summary, we conclude that the Copyright Tribunal

Reform Act of 1993 significantly narrowed the standard of

review applicable to the Librarian's apportionment of cable

royalties. Under the applicable standard, we find nothing in

any of the petitioners' claims that warrants modification or

remand of the Librarian's Phase I awards. Accordingly, the

petitions for review of the decision of the Librarian, as

reported in Distribution of 1990, 1991 and 1992 Cable Royal-

ties, 61 Fed. Reg. 55,653 (1996), are

Denied.