Notice and Recordkeeping for Subscription Digital Transmissions

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LIBRARY OF CONGRESS

37 CFR Chapter II

[Docket No. RM 96-3A]

Notice and Recordkeeping for Subscription Digital Transmissions

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Copyright Office of the Library of Congress is requesting

further comments on the requirements by which copyright owners shall

receive reasonable notice of the use of their works from subscription

digital transmission services, and how records of such use shall be

kept and made available to copyright owners. The Digital Performance

Right in Sound Recordings Act of 1995 requires the Office to adopt the

regulations. The Office is requesting this additional comment before

issuing interim regulations.

DATES: Comments must be submitted on or before August 25, 1997.

ADDRESSES: An original and fifteen copies of the comments shall be

delivered to: Office of the General Counsel, Copyright Office, LM-403,

James Madison Memorial Building, 101 Independence Avenue, S.E.,

Washington, D.C., or mailed to: Nanette Petruzzelli, Acting General

Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station,

Washington, D.C. 20024.

FOR FURTHER INFORMATION CONTACT: Nanette Petruzzelli, Acting General

Counsel, or Jennifer L. Hall, Senior Attorney, Copyright GC/I&R, P.O.

Box 70400, Southwest Station, Washington, D.C. 20024. Telephone: (202)

707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

Background

On November 1, 1995, Congress enacted the Digital Performance Right

in Sound Recordings Act of 1995. Public Law No. 104-39, 109 Stat. 336

CT: Nanette Petruzzelli, Acting General

Counsel, or Jennifer L. Hall, Senior Attorney, Copyright GC/I&R, P.O.

Box 70400, Southwest Station, Washington, D.C. 20024. Telephone: (202)

707-8380. Telefax: (202) 707-8366.

SUPPLEMENTARY INFORMATION:

Background

On November 1, 1995, Congress enacted the Digital Performance Right

in Sound Recordings Act of 1995. Public Law No. 104-39, 109 Stat. 336

(1995). The law gave to sound recording copyright owners an exclusive

right to perform their works publicly by means of a digital audio

transmission. 17 U.S.C. 106(6). Certain digital transmissions were

exempted from the scope of the right, 17 U.S.C. 114(d)(1), while

nonexempt digital subscription services were given the opportunity to

qualify for a statutory license. 17 U.S.C. 114(d)(2).

Congress directed the Librarian of Congress to establish

regulations under which copyright owners may receive reasonable notice

of the use of their sound recordings under the statutory license, and

under which entities performing the sound recordings shall keep and

make available records of such use. 17 U.S.C. 114(f)(2).

The Sec. 114 License for Nonexempt Subscription Transmissions

A nonexempt digital subscription service transmission is subject to

statutory licensing in accordance with 17 U.S.C. 114(f) if the

transmission is not part of an interactive service, does not exceed the

``sound recording performance complement,'' does not give an advance

program schedule or prior announcement of titles to be performed, does

not automatically cause the receiving device to switch from one program

channel to another, and includes information encoded by authority of

the copyright owner identifying the title, the featured artist, and

related information. 17 U.S.C. 114(d)(2). The ``sound recording

performance complement'' is defined as:

an advance

program schedule or prior announcement of titles to be performed, does

not automatically cause the receiving device to switch from one program

channel to another, and includes information encoded by authority of

the copyright owner identifying the title, the featured artist, and

related information. 17 U.S.C. 114(d)(2). The ``sound recording

performance complement'' is defined as:

the transmission during any 3-hour period, on a particular channel

used by a transmitting entity, of no more than--

(A) 3 different selections of sound recordings from any one

phonorecord lawfully distributed for public performance or sale in

the United States, if no more than 2 such selections are transmitted

consecutively; or

(B) 4 different selections of sound recordings--

(i) by the same featured recording artist; or

(ii) from any set or compilation of phonorecords lawfully

distributed together as a unit for public performance or sale in the

United States, if no more than three such selections are transmitted

consecutively: Provided, That the transmission of selections in

excess of the numerical limits provided for in clauses (A) and (B)

from multiple phonorecords shall nonetheless qualify as a sound

recording performance complement if the programming of the multiple

phonorecords was not willfully intended to avoid the numerical

limitations prescribed in such clauses.

17 U.S.C. 114(j)(7).

Digital subscription transmission services that qualify for the

statutory license may reach a voluntary agreement as to rates and terms

with sound recording copyright owners, or may petition the Librarian of

Congress to convene a copyright arbitration royalty panel (CARP) to set

rates and terms for those entities that have not reached voluntary

agreement. 17 U.S.C. 114(f). On June 4, 1996, no voluntary agreement

having been reached, the parties petitioned the Librarian to convene

such a CARP. Rates and terms set by the CARP will apply to all

subscription services not subject to voluntary agreement

ongress to convene a copyright arbitration royalty panel (CARP) to set

rates and terms for those entities that have not reached voluntary

agreement. 17 U.S.C. 114(f). On June 4, 1996, no voluntary agreement

having been reached, the parties petitioned the Librarian to convene

such a CARP. Rates and terms set by the CARP will apply to all

subscription services not subject to voluntary agreement. 17 U.S.C.

114(f)(2)-(3). However, Congress also directed the Librarian of

Congress to establish regulations by which copyright owners may receive

reasonable notice of the use of their sound recordings under statutory

license, and under which records of such use shall be kept and made

available by the entities performing the sound recordings. 17 U.S.C.

114(f)(2). Anyone performing a sound recording publicly by means of a

nonexempt subscription transmission under section 114(f) may do so

without infringing the exclusive right of the sound recording copyright

owner by complying with the notice requirements that the Librarian

prescribes by regulation and by paying royalty fees in accordance with

the law. 17 U.S.C. 114(f)(5).

Rulemaking on Notice and Recordkeeping

On May 13, 1996, the Copyright Office published a Notice of

Proposed Rulemaking in the Federal Register requesting comments on the

requirements by which copyright owners should receive reasonable notice

of the use of their works from subscription digital transmission

services and how records of such use should be kept and made available

to copyright owners. The Office asked commentators to consider both the

adequacy of the notice to sound recording copyright owners and the

administrative burdens placed on the digital transmission services in

providing notice and maintaining records of use. 61 FR 22004 (May 13,

1996).

The Office received a total of four comments and three reply

comments, as well as one surreply and one comment to the surreply.

Comments were submitted by the Recording Industry Association of

America (RIAA); DMX, Inc

ing copyright owners and the

administrative burdens placed on the digital transmission services in

providing notice and maintaining records of use. 61 FR 22004 (May 13,

1996).

The Office received a total of four comments and three reply

comments, as well as one surreply and one comment to the surreply.

Comments were submitted by the Recording Industry Association of

America (RIAA); DMX, Inc. (DMX); Muzak; and Digital Cable Radio

Associates/Music Choice (DCR) (``commenting parties''). The comments

set forth a wide range of proposals for notice and records of use, with

varying form and content requirements. The comments also included

proposals concerning matters not addressed in the

Act, such as confidentiality and auditing.

On Thursday, November 14, 1996, the Copyright Office met with the

parties to facilitate agreement on notice and recordkeeping

requirements for digital subscription services under 17 U.S.C. 114, and

to discuss the proper regulatory and recordkeeping role for the Office.

See Memorandum from Marilyn J. Kretsinger, Acting General Counsel, U.S.

were 15 individuals representing RIAA, DMX, Muzak, DCR, and the

to a draft meeting summary distributed to participants by the Copyright

Office. A second meeting took place on Thursday, January 23, 1997. See

Memorandum from Marilyn J. Kretsinger, Acting General Counsel, U.S.

the written comments and meeting discussions will be included with the

published interim regulations.1

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\1\ The comments and meeting summaries are available in the

Public Information Office of the Copyright Office, Room LM-401,

James Madison Memorial Building, Washington, D.C.

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discussions will be included with the

published interim regulations.1

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\1\ The comments and meeting summaries are available in the

Public Information Office of the Copyright Office, Room LM-401,

James Madison Memorial Building, Washington, D.C.

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In this Notice of Inquiry, the Copyright Office requests further

written comment from interested parties relating to quarterly reports

of use to be provided by digital subscription services, before

proceeding to issue interim regulations under section 114. The

regulations will be issued on an interim basis due to the developing

nature of the technology to be employed in accommodating the reporting

requirements.

Policy Issues Relating to Quarterly Reports of Use Identified in

Discussions Among the Commenting Parties

The comments and the discussions among the commenting parties

raised the following issues relating to the quarterly reports of use.

1. Reporting Compliance With the Sound Recording Performance Complement

In addition to an initial notice to be filed, with an accompanying

filing fee, with the U.S. Copyright Office, the commenting parties

proposed generally that subscription services file quarterly reports of

use including data to indicate which sound recordings were performed

and the number of times (summary frequency data). In addition to the

summary frequency data, sound recording copyright owners proposed that

each quarterly report include a sample of the service's playlist, to

permit copyright owners: (1) To verify the accuracy of the summary

frequency data; and (2) to monitor compliance with the sound recording

performance complement defined in 17 U.S.C. 114(j)(7)

he number of times (summary frequency data). In addition to the

summary frequency data, sound recording copyright owners proposed that

each quarterly report include a sample of the service's playlist, to

permit copyright owners: (1) To verify the accuracy of the summary

frequency data; and (2) to monitor compliance with the sound recording

performance complement defined in 17 U.S.C. 114(j)(7). Under one

proposal, the sample would have consisted of a 30-day report each

quarter of either: (1) The service's actual playlist; or (2) its

intended playlist with an error log and an accompanying certification

of the information's accuracy by a service official. See RIAA

Additional Reply (Dec. 19, 1996) at 7.

In response, representatives of subscription services raised two

issues: (1) Whether the Act requires them to affirmatively report

compliance with the performance complement at all; and (2) if so,

whether a sample size could be developed with a true mathematical or

statistical basis. See DCR Additional Comment (Dec. 12, 1996) at 4-6;

Letter from Jon L. Praed to Jean R. Milbauer (Jan. 16, 1997). At the

January 23 meeting, RIAA indicated that it would attempt to determine

an appropriate sample size if the services were to provide appropriate

data. On February 11, the Copyright Office encouraged the services to

address RIAA's request for such data. Memorandum from Nanette

Petruzzelli, Acting General Counsel, U.S. Copyright Office, to

Commenting Parties (Feb. 11, 1997).

On March 11, 1997, after consulting with the other commenting

services, a representative for DMX proposed that the services simply

produce their entire intended playlist for each quarter instead of

providing summary frequency data or error logs, to enable copyright

owners to determine allocation of royalties and compliance with the

performance complement. Letter from Seth D. Greenstein, Esq., to Jean

R. Milbauer, Esq. (Mar. 11, 1997)

e other commenting

services, a representative for DMX proposed that the services simply

produce their entire intended playlist for each quarter instead of

providing summary frequency data or error logs, to enable copyright

owners to determine allocation of royalties and compliance with the

performance complement. Letter from Seth D. Greenstein, Esq., to Jean

R. Milbauer, Esq. (Mar. 11, 1997). This proposal was deemed generally

acceptable to the commenting parties provided that an agreeable

definition for ``intended playlist'' were reached. See Letter from Jean

R. Milbauer to Commenting Services (Mar. 13, 1997); Letter from Seth D.

Greenstein to Jean Milbauer, Esq. (Mar. 18, 1997); Letter from Fernando

R. Laguarda, Esq., to Jean R. Milbauer, Esq. (Mar. 18, 1997) (``without

waiving any legal objections previously set forth'').

2. Data Fields

The commenting parties are also attempting to negotiate agreement

on data fields to be provided in the reports of use that will permit

identification of sound recordings performed and distribution of

royalties to individual copyright owners, without placing unreasonable

burden on subscription services. See, e.g., DCR Additional Comment

(Dec. 12, 1996) at 4 n.7; RIAA Additional Reply (Dec. 19, 1996) at 2

n.1; Letter from Seth D. Greenstein, Esq., to Jean Milbauer, Esq. (Mar.

18, 1997).

3. Non-Collective Member Copyright Owners

Finally, issues exist concerning how the reports of use will be

kept or made available for sound recording copyright owners who are not

members of a collective, who cannot be located, or who refuse delivery.

RIAA has created a collective to collect and distribute its members'

sound recording performance royalties

ean Milbauer, Esq. (Mar.

18, 1997).

3. Non-Collective Member Copyright Owners

Finally, issues exist concerning how the reports of use will be

kept or made available for sound recording copyright owners who are not

members of a collective, who cannot be located, or who refuse delivery.

RIAA has created a collective to collect and distribute its members'

sound recording performance royalties. Owners of copyright in an

estimated 90 percent of all sound recordings sold in the United States

are members of the RIAA trade association and will likely designate the

RIAA collective as their agent or representative; in those cases,

digital subscription services would file quarterly reports (and any

royalty payments and accounting information) with the RIAA collective.

Services, however, may not be able to employ the statutory license in

this manner for an estimated ten percent of all sound recordings sold

in the United States. Sound recording copyright owners that are not

members of the RIAA trade association may not be permitted by RIAA to

designate its collective as their agent to receive reports and

royalties. See RIAA Additional Reply (Dec. 19, 1996) at 9-10; DCR

Additional Comment (Dec. 12, 1996) at 7. Some copyright owners may

choose not to designate the RIAA collective. See 17 U.S.C. 114(e)(1)

(permitting designation of common agents on nonexclusive basis). The

location or identity of other sound recording copyright owners may be

unknown.

Questions

eply (Dec. 19, 1996) at 9-10; DCR

Additional Comment (Dec. 12, 1996) at 7. Some copyright owners may

choose not to designate the RIAA collective. See 17 U.S.C. 114(e)(1)

(permitting designation of common agents on nonexclusive basis). The

location or identity of other sound recording copyright owners may be

unknown.

Questions

Based on the comments and discussions among the parties, which will

be addressed more fully in the Office's interim regulations, the

identified certain additional policy questions.

The Office will accept an optional initial notice which may be

filed by digital transmission services indicating commencement of

transmission of sound recordings under the section 114 statutory

license. This initial notice, to consist simply of the service name,

address, and contact person, will be placed in Copyright Office

records, where copyright owners may obtain access to this information

concerning the use of sound recordings under

statutory license. Section 114(f)(2), however, requires that copyright

owners will receive notice of the use of their sound recordings; a

notice indicating commencement of transmission under statutory license

does not accomplish that objective, and therefore the regulation will

not require services to file such a notice. As discussed below,

of the use of their sound recordings, and records of such use, by

direct service. The contents of the initial notice, and the appropriate

filing fee, will be discussed more specifically in the Office's interim

regulations

ve, and therefore the regulation will

not require services to file such a notice. As discussed below,

of the use of their sound recordings, and records of such use, by

direct service. The contents of the initial notice, and the appropriate

filing fee, will be discussed more specifically in the Office's interim

regulations.

The Office has concluded that the Digital Performance Right in

Sound Recordings Act of 1995 contemplates that digital subscription

services will keep and make available, not simply summary frequency

data, but records of use that will enable sound recording copyright

owners to generally monitor the services' compliance with the sound

recording performance complement. See 17 U.S.C. 114(d)(2); 114(f)(5);

114(j)(7). The Office has determined that establishing such a

requirement is within its rulemaking authority under 17 U.S.C.

114(f)(2).

The Office has also determined that sound recording copyright

owners whose identity and location is known should be served directly,

or directly via their designated agent, with the quarterly reports of

use of their copyrighted works under the statutory license. The Office

will not accept for filing any quarterly reports of use. The Office

recognizes the potential burden for services of identifying and serving

individual copyright owners who are not members of a collective such as

RIAA's. See DMX Comment at 2, 8; Muzak Comment at 2; DCR Reply at 5-6.

The Office understands the possible disincentive that individual

reporting could create for performance of recordings owned by small or

independent record labels. See DMX Reply at 3. However, the regulations

must establish how records of use shall be kept and made available, and

the Office is unable to designate a particular entity as a central

records repository or as a collective agent. See 17 U.S.C. 114(e)(1)

ds the possible disincentive that individual

reporting could create for performance of recordings owned by small or

independent record labels. See DMX Reply at 3. However, the regulations

must establish how records of use shall be kept and made available, and

the Office is unable to designate a particular entity as a central

records repository or as a collective agent. See 17 U.S.C. 114(e)(1).

In order to determine the appropriate regulatory structure of any

reporting requirements, the Office has examined analogous statutory,

regulatory, and industry precedent involving collective or compulsory

licensing of performance and reproduction rights in musical works.

With their multiple channels and round-the-clock transmission,

digital services in some respects resemble traditional radio

broadcasters, who provide reports to three collective performing rights

societies (that, in turn, monitor hours of radio play). Practically

speaking, owners of copyright in musical works generally authorize one

of these collective rights societies to license public performances in

order to be compensated and receive records of use.

On the other hand, under the section 115 license and its

accompanying regulations, by which record companies and others make and

distribute phonorecords of nondramatic musical works, compulsory

licensees must serve the copyright owner or its agent directly with

notice, and with monthly and annual statements of account (which

include records of distribution). See 17 U.S.C. 115(b)(1); 17 U.S.C.

115(c) (4)-(5); 37 CFR 201.18(e)(2); 37 CFR 201.19 (e)(7)(i), (f)(7).

The requirement of actual notice, however, attaches only if the

registration or other public records of the Copyright Office identify

the copyright owner and include an address at which notice can be

served; otherwise, it is sufficient to file the notice in the Copyright

Office. 17 U.S.C

See 17 U.S.C. 115(b)(1); 17 U.S.C.

115(c) (4)-(5); 37 CFR 201.18(e)(2); 37 CFR 201.19 (e)(7)(i), (f)(7).

The requirement of actual notice, however, attaches only if the

registration or other public records of the Copyright Office identify

the copyright owner and include an address at which notice can be

served; otherwise, it is sufficient to file the notice in the Copyright

Office. 17 U.S.C. 115(b)(1); 37 CFR 201.18(e)(1).2 If the

notice is sent to the last address shown for the copyright owner in

is no longer there or has refused delivery, the licensee shall file the

notice with the Copyright Office, along with evidence that it was sent

by certified or registered mail to that address, and a brief statement

that the notice was sent to the last address shown in Copyright Office

records but was returned. 37 CFR 201.18(e)(3). Where an address for the

delivery, licensees may file their monthly and annual statements of

account with the Copyright Office Licensing Division, along with any

evidence of certified or registered mailing. 37 CFR 201.19

(e)(7)(ii)(A), (f)(7)(iii)(A).3 Any monthly or annual

statement of account so filed with the Office must be accompanied by a

brief statement of why the statement was not served on the copyright

owner. 37 CFR 201.19 (e)(7)(ii)(A), (f)(7)(iii)(A). As a matter of

business practice, some compulsory licensees may also create an escrow

account to set aside royalties at the statutory rate for a certain time

period.

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Office must be accompanied by a

brief statement of why the statement was not served on the copyright

owner. 37 CFR 201.19 (e)(7)(ii)(A), (f)(7)(iii)(A). As a matter of

business practice, some compulsory licensees may also create an escrow

account to set aside royalties at the statutory rate for a certain time

period.

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\2\ To be entitled to receive royalties under compulsory

license, the copyright owner must be identified in the registration

or other public records of the Copyright Office. 17 U.S.C.

115(c)(1).

\3\ The regulations specify that the filing, or failure to file,

a monthly or annual statement of account with the Office has no

effect ``other than that which may be attributed to it by a court.''

37 CFR 201.19 (e)(7)(ii)(C), (f)(7)(iii)(C).

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At the initial meeting of the commenting parties, there was some

discussion of an escrow account or trust fund for section 114 royalty

payments for copyright owners who are unknown or cannot be located. See

Summary of Nov. 14 Meeting 1 (Jan. 2, 1997). The Office has no

authority to require services to set aside section 114 royalties; just

as some record companies may escrow royalties for unknown publishers

under section 115, services may decide for business and legal reasons

to escrow section 114 royalties. Because, however, the Office has

concluded that it will not receive reports of use under the section 114

license and cannot designate a particular entity as a central

collective or records repository, the Office sees no alternative to

requiring subscription services that perform sound recordings under the

section 114 license to serve the sound recording copyright owner whose

identity and location is known, or its designated agent, directly with

reports of use

f business

practice, services are strongly urged to maintain any evidence of

mailing and a brief statement as to why the reports of use were not

served on the copyright owner. While recognizing burdens associated

with retention of such records, the Office believes it is in the

services' interests to do so. Services may wish to consider designating

a collective agent to maintain their reports

of use for the three year period, and in any event must establish

reasonable access procedures and conditions.

directly or through their designated representatives. The Office

envisions that owners of copyright in sound recordings performed under

the section 114 license who have not been directly served, but who make

their identity and location known at some point in time, should have

access to records of use of their works for the preceding three years,

and should thereafter be served directly with reports relating to

subsequent performances. The Office therefore inquires how services

propose to make records of use reasonably available and accessible, and

how copyright owners whose works are performed but who have not been

directly served should make their identity and location known.

Subscription services may want to comment on how such copyright owners

might identify their sound recordings, and how a regulation might

delineate boundaries within which such copyright owners may demand

access to records of use.

2. Audit of Records of Use

and

how copyright owners whose works are performed but who have not been

directly served should make their identity and location known.

Subscription services may want to comment on how such copyright owners

might identify their sound recordings, and how a regulation might

delineate boundaries within which such copyright owners may demand

access to records of use.

2. Audit of Records of Use

A related, although not identical, question concerns the auditing

of the digital services' records of use by copyright owners in general.

During discussions, the commenting parties agreed that any rules

governing audits of accounting records were best handled under section

114(f)(2) as a matter of rates and terms, to be addressed and resolved

through CARP or negotiation. However, in order to ensure access to

records of use and limit the potential for multiple audits, some

parties proposed a regulation that would permit audits of the

information underlying the reports of use, but would limit copyright

owners to a single such audit per year; such procedure would be

initiated by a notice of intent to audit, filed with the Copyright

Office and published in the Federal Register, with a comment period for

all interested parties to agree on choice of auditor. See DMX Comment

at 12-13; RIAA Reply at 14-16, 18. The Office is assuming that the

decision to provide the intended playlists in the quarterly reports

largely obviates the need for an audit regulation, and in any event is

inclined to see the practice of auditing as a business and legal

decision. The Office will issue no regulation, therefore, concerning

audit of the information underlying the reports of use.

3. Confidentiality of Records and Data Separation

suming that the

decision to provide the intended playlists in the quarterly reports

largely obviates the need for an audit regulation, and in any event is

inclined to see the practice of auditing as a business and legal

decision. The Office will issue no regulation, therefore, concerning

audit of the information underlying the reports of use.

3. Confidentiality of Records and Data Separation

Finally, the Office recognizes confidentiality concerns that

services have expressed in relation to serving playlist information and

programming details upon sound recording copyright owners. See Muzak

Comment at 2-3. Precautions that may be implemented at a large

collective to protect the information's confidentiality may be

difficult to duplicate by dozens of smaller recipients. Yet the Office

also recognizes that the commenting services' desire to avoid

burdensome data separation and the production of different data in

different formats for different copyright owner entities was a primary

motivator for the proposal ``simply to produce the entire intended

playlist for each quarter,'' subject to appropriate confidentiality

provisions. See Letter from Seth D. Greenstein, Esq., to Jean Milbauer,

Esq. (Mar. 11, 1997). Even if a software program can be developed to

separate and extract names of copyright owners who are, or are not,

members of a particular collective, there may eventually be multiple

collectives. On the other hand, because royalties must be paid to small

and individual copyright owners whose works are performed, the Office

recognizes that services will necessarily generate some data to

determine those royalties, and undertake some separation of copyright

owner names, sound recording identifiers, and frequency of

performances

r collective, there may eventually be multiple

collectives. On the other hand, because royalties must be paid to small

and individual copyright owners whose works are performed, the Office

recognizes that services will necessarily generate some data to

determine those royalties, and undertake some separation of copyright

owner names, sound recording identifiers, and frequency of

performances. The Office inquires whether services plan to provide

their intended playlists for each quarter to small and individual sound

recording copyright owners (as well as to a major collective such as

the RIAA's) and, if not, whether the services can propose an

alternative reporting mechanism that would indicate which sound

recordings were performed and the number of times (summary frequency

data), and permit sound recording copyright owners to monitor

compliance with the sound recording performance complement (perhaps

through date and time information). The Office requests comment as to

whether services will extract the names of individual copyright owners,

or members of various collectives, in order to provide such individuals

or entities with separate royalties or reports, and whether this would

provide a means for an alternative reporting mechanism. The Office

inquires whether copyright owners should be required to sign and return

a confidentiality agreement before receiving reports consisting of

playlist information, and whether the regulation should permit

complement information in order to receive simply the summary frequency

data pertaining to the use of their sound recordings only. We also seek

comment on the estimated costs for providing intended playlists to

different parties, and on who should bear the costs of serving,

maintaining, and accessing such records of use

ermit

complement information in order to receive simply the summary frequency

data pertaining to the use of their sound recordings only. We also seek

comment on the estimated costs for providing intended playlists to

different parties, and on who should bear the costs of serving,

maintaining, and accessing such records of use.

The Office is providing a 60-day comment period with this inquiry

to permit the parties to conduct any discussions and reach agreement on

any outstanding issues; there will be no reply period. We would

particularly appreciate comment from sound recording copyright owners

not represented by RIAA, and are aware of at least one such entity that

has requested records of use from DMX. See Letter from Seth D.

Greenstein, Esq., to Jean Milbauer, Esq. (Mar. 11, 1997).

Questions for Comment

The Office requests public comment on the following questions

relating to the quarterly reports of use to be provided by digital

subscription services:

(1) The Office has determined that digital subscription services

should provide records of use that will indicate which sound recordings

were performed and the number of times, and that will enable sound

recording copyright owners to monitor compliance with the sound

recording performance complement defined in 17 U.S.C. 114(j)(7). Should

a service provide its intended playlist as the vehicle for such

reporting? Is an alternative reporting mechanism available?

(2) What should be the definition of ``intended playlist''? Would a

service provide its intended playlist for each day, and each channel,

at the close of each quarter? How long after the close of each quarter

should the report be due? If the intended playlist is made available,

would error logs also be required in the event of a system malfunction?

(3) Should the reports of use bear a certification by a service

representative, and, if so, why? What would be the content of such a

certification?

t for each day, and each channel,

at the close of each quarter? How long after the close of each quarter

should the report be due? If the intended playlist is made available,

would error logs also be required in the event of a system malfunction?

(3) Should the reports of use bear a certification by a service

representative, and, if so, why? What would be the content of such a

certification?

(4) The Office has determined that sound recording copyright owners

whose identity and location is known should be served directly, or

directly via their designated agent, with quarterly reports of use of

their copyrighted works under the statutory license. In serving small

and individual sound recording copyright owners, who are not members of

a major collective such as RIAA's, will services provide their intended

playlists or can they propose an alternative reporting requirement that

would indicate which sound recordings were performed and the number of

times (summary frequency data) and permit monitoring of the performance

complement? What costs are involved in providing the intended playlist

to different parties? Who should bear the costs of serving,

maintaining, or accessing these records of use?

(5) Does provision of the intended playlist raise confidentiality

problems? If so, what measures can a service or copyright owner take to

protect its confidentiality? Should there be any express restrictions

on the use of this information and, if so, what restrictions? If in

fact the information is confidential or trade secret, and no

satisfactory alternative reporting requirement can be devised, should

the copyright owner be required to sign and return a confidentiality

agreement before receiving reports of use consisting of playlist

information? Should the regulation permit the copyright owner to waive

service of information relating to the performance complement in order

to receive simply the summary frequency data pertaining to the use of

their sound recordings only?

be devised, should

the copyright owner be required to sign and return a confidentiality

agreement before receiving reports of use consisting of playlist

information? Should the regulation permit the copyright owner to waive

service of information relating to the performance complement in order

to receive simply the summary frequency data pertaining to the use of

their sound recordings only?

(6) How do digital subscription services plan to identify and

locate copyright owners of sound recordings they perform under

statutory license? Beyond identification in the Copyright Office

registration records, how should the regulations define a sound

recording copyright owner ``whose identity and location is known'' for

the purpose of triggering the requirement of direct service? How will

services identify and locate foreign sound recording copyright owners?

(7) How do services anticipate that they will separate the names of

members of various collectives, or of independent copyright owners, in

order to provide such individuals or entities with separate reports?

Given that services must pay royalties to small and individual

generate to determine those royalties, and what separation of copyright

owner names, sound recording identifiers, and performance frequency

will they necessarily undertake? Could the data generated for royalty

calculation and distribution be made available in reports of use, as an

alternative to the intended playlists, in a way that would permit

(8) How should copyright owners who have not been directly served

make their identity and location known to digital services? How might

these copyright owners identify their sound recordings for digital

services?

bution be made available in reports of use, as an

alternative to the intended playlists, in a way that would permit

(8) How should copyright owners who have not been directly served

make their identity and location known to digital services? How might

these copyright owners identify their sound recordings for digital

services?

(9) Should services retain their reports of use for three years, or

is there information underlying the reports of use (such as summary

frequency data, and date and time information) that might be more

easily kept and made available? How do services plan to make records of

use for a three year period reasonably available and accessible for

concerning access for such individuals and entities needed?

(10) What data fields and sound recording identifiers are

available, and which of these should be included in the quarterly

reports of use? Will the date and time of the performance be identified

and, if so, how? With respect to compilation albums, what data fields

should be included in the reports of use? If there are any particular

sound recording identifiers or data fields that should not be required,

or that should not be required during the interim regulatory period,

state which fields, and why.

(11) Should the regulations address the reporting of non-music and

foreign programming? How would such programming be defined? What notice

and recordkeeping requirements would apply to such programming?

(12) Should the Office expressly recognize a transition period

before services must provide reports conforming completely to the

regulations? If so, what should be the transition period, and what is

the minimum information that should be required?

Dated: June 18, 1997.

Marybeth Peters,

[FR Doc. 97-16553 Filed 6-23-97; 8:45 am]

BILLING CODE 1410-31-P

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.