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Federal Register / Vol. 78, No. 51 / Monday, March 17, 2014 / Notices
television, film, and videos; advertising
and other types of commercial uses; and
derivative uses such as ‘‘sampling’’—are
licensed directly from the copyright
owner according to negotiated rates and
terms.
Musical Works—Public Performance.
The method for licensing public
performances of musical works differs
significantly from the statutory
mechanical license provided under
Section 115. Licensing fees for such
performances are generally collected on
behalf of music publishers, songwriters,
and composers by the three major PROs:
the American Society of Composers,
Authors and Publishers (‘‘ASCAP’’),
Broadcast Music, Inc. (‘‘BMI’’), and
SESAC. Songwriters and composers, as
well as their publishers, commonly
affiliate with one of the three for
purposes of receiving public
performance income. Rather than song-
by-song licenses, the PROs typically
offer ‘‘blanket’’ licenses for the full
range of music in their repertories.
These licenses are available for a wide
variety of uses, including terrestrial,
satellite, and internet radio, on-demand
music streaming services, Web site and
television uses, and performance of
music in bars, restaurants, and other
commercial establishments. The PROs
monitor the use of musical works by
these various entities and apportion and
distribute collected royalties to their
publisher, songwriter, and composer
members.
Unlike the mechanical right, the
public performance of musical works is
not subject to compulsory licensing
under the Copyright Act. Since 1941,
however, ASCAP and BMI’s licensing
practices have been subject to antitrust
consent decrees overseen by the
Department of Justice.
5
These consent
decrees were designed to protect
licensees from price discrimination or
other anti-competitive behavior by the
two PROs. Under the decrees, ASCAP
and BMI administer the public
performance right for their members’
musical works on a non-exclusive basis.
They are required to provide a license
to any person who seeks to perform
copyrighted musical works publicly,
and must offer the same terms to
similarly situated licensees. In addition,
ASCAP’s consent decree expressly bars
5
See generally United States v. Broadcast Music,
Inc., 275 F.3d 168, 171–72 (2d Cir. 2001)
(describing the history). SESAC, a smaller
performing rights organization created in 1930 to
serve European publishers, is not subject to a
similar consent decree, although it has been
involved recently in private antitrust litigation. See
Meredith Corp. v. SESAC LLC, No. 09–cv–9177,
2014 WL 812795 (S.D.N.Y. Mar. 3, 2014).
it from offering mechanical licenses.
6
Since 1950, prospective licensees that
are unable to agree to a royalty rate with
ASCAP or BMI have been able to seek
a determination of a reasonable license
fee in the federal district court for the
Southern District of New York.
7
The two PRO consent decrees were
last amended well before the
proliferation of digital music: The BMI
decree in 1994,
8
and the ASCAP decree
in 2001.
9
The consent decrees have been
the subject of much litigation over the
years, including, most recently, suits
over whether music publishers can
withdraw digital licensing rights from
the PROs and negotiate public
performance licenses directly with
digital music services.
10
Sound Recordings—Reproduction
and Distribution. Congress extended
federal copyright protection to sound
recordings in 1972. That law, however,
did not provide retroactive protection
for sound recordings fixed prior to
February 15, 1972, and such works
therefore have no federal copyright
status.
11
They are, however, subject to
the protection of applicable state laws
until 2067. See 17 U.S.C. 301(c).
12
6
United States v. ASCAP, No. 41–cv–1395, 2001–
2 Trade Cas. (CCH) ¶ 73,474, 2001 WL 1589999, *3
(S.D.N.Y. June 11, 2001). Although BMI has taken
the position that a strict reading of its consent
decree does not bar it from offering mechanical
licenses, it generally has not done so. See Broadcast
Music, Inc., Comments on Department of Commerce
Green Paper 4–5 (Nov. 13, 2013), available at http://
www.ntia.doc.gov/files/ntia/bmi_comments.pdf.
7
Significantly, musical work owners are
precluded from offering evidence concerning the
licensing fees paid for digital performances of
sound recordings as a point of comparison in the
district court ratesetting proceedings. Section 114 of
the Copyright Act provides that license fees payable
for the public performance of sound recordings may
not be taken into account ‘‘in any administrative,
judicial, or other governmental proceeding to set or
adjust the rates payable to’’ musical work copyright
owners. 17 U.S.C. 114(i).
8
United States v. Broadcast Music, Inc., No. 64–
cv–3787, 1966 Trade Cas. (CCH) ¶ 71,941 (S.D.N.Y.
1966), as amended, 1996 Trade Cases (CCH) ¶
71,378, 1994 WL 901652 (S.D.N.Y. Nov. 18, 1994).
9
United States v. ASCAP, No. 41–cv–1395, 2001–
2 Trade Cas. (CCH) ¶ 73,474, 2001 WL 1589999
(S.D.N.Y. June 11, 2001).
10
See In re Pandora Media, Inc., Nos. 12–cv–
8035, 41–cv–1395, 2013 WL 5211927 (S.D.N.Y.
Sept. 17, 2013); Broadcast Music, Inc. v. Pandora
Media, Inc., Nos. 13–cv–4037, 64–cv–3787, 2013
WL 6697788 (S.D.N.Y. Dec. 19, 2013).
11
In 2009, Congress asked the Copyright Office to
study the ‘‘desirability and means’’ of extending
federal copyright protection to pre-February 15,
1972 sound recordings. Public Law 111–8, 123 Stat.
524 (2010) (explanatory statement). In 2011, the
Office completed that study, issuing a report
recommending that federal copyright protection be
so extended. United States Copyright Office,
Federal Copyright Protection for Pre-1972 Sound
Recordings (2011), available at http://
www.copyright.gov/docs/sound/pre-72-report.pdf.
12
Thus, a person wishing to digitally perform a
pre-1972 sound recording cannot rely on the
Section 112 and 114 statutory licenses and must
The owner of a copyright in a sound
recording fixed on or after February 15,
1972, like the owner of a musical work
copyright, enjoys the exclusive right to
reproduce and distribute phonorecords
embodying the sound recording,
including by means of digital
transmission, and to authorize others to
do the same. 17 U.S.C. 106(1), (3),
301(c). Except in the limited
circumstances where statutory licensing
applies, as described below, licenses to
reproduce and distribute sound
recordings—such as those necessary to
make and distribute CDs, transmit
DPDs, and operate online music
services, as well as to use sound
recordings in a television shows, films,
video games, etc.—are negotiated
directly between the licensee and sound
recording owner (typically a record
label). Thus, while in the case of
musical works, the royalty rates and
terms applicable to the making and
distribution of CDs, DPDs, and the
operation of interactive music services
are subject to government oversight,
with respect to sound recordings,
licensing for those same uses takes place
without government supervision.
Sound Recordings—Public
Performance. Unlike musical works, a
sound recording owner’s public
performance right does not extend to all
manner of public performances.
Traditionally, the public performance of
sound recordings was not subject to
protection at all under the Copyright
Act. In 1995, however, Congress enacted
the DPRSRA, which provided for a
limited right when sound recordings are
publicly performed ‘‘by means of a
digital audio transmission.’’ Public Law
104–39, 109 Stat. 336; 17 U.S.C. 106(6),
114(a). This right extends, for example,
to satellite radio and internet-based
music services.
13
Significantly,
however, the public performance of
sound recordings by broadcast radio
stations remains exempt under the Act.
17 U.S.C. 114(d)(1).
14
instead obtain a license directly from the owner of
the sound recording copyright. See Determination
of Rates and Terms for Preexisting Subscription
Services and Satellite Digital Audio Radio Services,
78 FR 23054, 23073 (Apr. 17, 2013) (determination
of the CRB finding that ‘‘[t]he performance right
granted by the copyright laws for sound recordings
applies only to those recordings created on or after
February 15, 1972’’ and adopting provisions
allowing exclusion of performances of pre-1972
sound recordings from certain statutory royalties).
13
In 1998, as part of the DMCA, Congress
amended Sections 112 and 114 of the Copyright Act
to clarify that the digital sound recording
performance right applies to services like
webcasting. See Public Law 105–304, secs. 402,
405, 112 Stat. 2860, 2888, 2890.
14
The Copyright Office has long supported the
extension of the public performance right in sound
Continued