32068

Proposed Rules Federal Register Vol. 83, No. 133

Wednesday, July 11, 2018

This section of the FEDERAL REGISTER jmang@copyright.gov. Each can be annual statements of account with contains notices to the public of the proposed contacted by telephone by calling (202) respect to distribution, accompanied by issuance of rules and regulations. The 707–8350. royalty payments.8 The Register receives purpose of these notices is to give interested SUPPLEMENTARY INFORMATION: all royalty payments and, after persons an opportunity to participate in the deducting the reasonable costs incurred rule making prior to the adoption of the final I. Background rules. for administering this license, deposits A. The Audio Home Recording Act of the balance with the Treasury of the 1992 and DART Royalty Funds United States.9 These royalty payments LIBRARY OF CONGRESS The Audio Home Recording Act of are divided between a sound recording fund and a musical works fund, which 1992 (AHRA) 1 amended title 17 to are in turn subdivided into various Copyright Office ‘‘provide a legal and administrative subfunds, referred to collectively as the framework within which digital audio DART subfunds.10 The royalty 37 CFR Part 201 recording technology may be made payments attributed to these subfunds available to consumers,’’ 2 including to [Docket No. 2018–6] are allocated to copyright owners implement a royalty payment system pursuant to distribution orders issued in Streamlining the Administration of regarding the importation, manufacture, proceedings before the CRJs, as DART Royalty Accounts and Electronic and distribution of digital audio described in section 1007 and in various Royalty Payment Processes recording devices or media. Digital provisions of chapter 8 of title 17. The audio recording devices are defined as AGENCY: U.S. Copyright Office, Library Licensing Division of the Copyright ‘‘any machine or device of a type of Congress. Office administers the DART subfunds commonly distributed to individuals for and distributes them pursuant to the ACTION: Notice of proposed rulemaking. use by individuals . . . that is capable CRJs’ distribution orders.11 of[] making a digital audio copied SUMMARY: The Copyright Office is After the CRJs have issued a final recording for private use.’’ 3 Congress proposing to establish a regulation distribution order with respect to a intended ‘‘importers and regarding its procedures for closing out DART subfund, and the Licensing manufacturers’’ to ‘‘bear the cost of royalty payments accounts under Division has distributed the royalty royalty fees,’’ which would then be section 1005, and updating its funds pursuant to that order, small distributed to owners of the rights to regulations governing online payment royalty balances can still be attributed to musical works and sound recordings.4 procedures for cable, satellite, and these subfunds unless they have been The AHRA also requires digital audio digital audio recording technology formally closed out by the Copyright recording devices to incorporate (‘‘DART’’) statements of account to no Office. These attributions can occur as copying controls to prevent piracy of longer require that payments be made in a result of subsequent deposits made by digital audio recordings.5 a single lump sum. These amendments payees, or, more often, in the course of Manufacturers, importers, and are intended to improve the efficiency routine review and adjustments made in distributors of devices with proper of the Copyright Office’s Licensing the years following each appropriation, copying controls and who pay royalties Division operations. for example, when anticipated contract are not liable for copyright infringement expenditures or other overhead DATES: Written comments must be to the extent their products are used to received no later than 11:59 p.m. 6 expenses come in slightly under budget. make copies of sound recordings. Maintaining these small amounts in Eastern Time on August 10, 2018. Congress delegated to the Copyright separate funds creates administrative ADDRESSES: For reasons of government Office and the Copyright Royalty expenses for the Licensing Division, and efficiency, the Copyright Office is using Tribunal (‘‘CRT’’)—a predecessor to the the transaction costs associated with the regulations.gov system for the system administered by the Copyright distributing such small amounts of submission and posting of public Royalty Judges (‘‘CRJs’’)—authority to money can exceed the amount of money comments in this proceeding. All administer the royalty system under remaining in these accounts. Under comments are therefore to be submitted chapter 10.7 Under section 1003, the section 1005, the Copyright Office may, electronically through regulations.gov. importer or manufacturer of a digital ‘‘in the Register’s discretion,’’ close out Specific instructions for submitting audio recording device or media must the royalty payments account for a comments are available on the file a notice with the Register of calendar year four years after the close Copyright Office website at https:// Copyrights, as well as quarterly and of that year, and attribute ‘‘any funds www.copyright.gov/rulemaking/ remaining in [the] account and any dartfunds. If electronic submission of 1 See Public Law 102–563, 106 Stat. 4237 (1992). subsequent deposits that would comments is not feasible due to lack of 2 H.R. Rep. No. 102–873(I), at 9 (1992). 3 otherwise be attributable to that access to a computer and/or the 17 U.S.C. 1001(3). internet, please contact the Office using 4 S. Rep. No. 102–294, at 39 (1992); see also 17 U.S.C. 1006(a)(1). 8 17 U.S.C. 1003(b), (c)(1), (c)(3). the contact information below for 5 17 U.S.C. 1002(a). 9 Id. at 1005. special instructions. 6 See Alliance of Artists and Recording Cos. v. 10 Id. at 1006(b). FOR FURTHER INFORMATION CONTACT: Gen. Motors Co., 162 F. Supp. 3d 8, 10 (D.D.C. 11 See, e.g., Order Granting Claimants’ Request for Regan A. Smith, General Counsel and 2016). Partial Distribution of 2005 Through 2008 DART 7 See 17 U.S.C. 1003; see also S. Rep. No. 102– Music Funds Royalties, Docket No. 2010–8 CRB DD Associate Register of Copyrights, by 294, at 39 (‘‘Administration of the royalty system 2005–2008 (MW), available at https://www.crb.gov/ email at [email protected], or Jalyce is the dual responsibility of the Copyright Office orders/2011/04411-order-granting-claimants- Mangum, Attorney-Advisor, by email at and the CRT’’). partial-distribution.pdf (last visited May 16, 2018).

VerDate Sep<11>2014 15:54 Jul 10, 2018 Jkt 244001 PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 E:\FR\FM\11JYP1.SGM 11JYP1 daltland on DSKBBV9HB2PROD with PROPOSALS Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Proposed Rules 32069

calendar year as attributable to the noticed in December 2017, that Dated: July 2, 2018. succeeding calendar year.’’ 12 In proposes to address a wider and more Regan A. Smith, practice, the Register has not previously complex set of issues related to General Counsel and Associate Register of established a procedure to exercise this statement of account reporting practices, Copyrights. discretion. The Copyright Office now particularly the section 111 license for [FR Doc. 2018–14543 Filed 7–10–18; 8:45 am] 17 proposes to close out funds or subfunds cable systems. The Office has BILLING CODE 1410–30–P at any time four years after the close of extended the public comment period for the calendar year for a given fund, if that December 2017 NPRM to October 4, that fund is subject to a final 2018.18 Meanwhile, while the change POSTAL REGULATORY COMMISSION distribution order. In accordance with removing the requirement that royalty section 1005, the Register will treat any fees must be paid in ‘‘a single’’ payment 39 CFR Part 3050 funds remaining in such account or is intended to be technical, the Office [Docket No. RM2018–10; Order No. 4696] subsequent deposits as attributable to solicits public comment on this discrete the closest succeeding calendar year. issue as part of this current rulemaking. Periodic Reporting The Office proposes to codify this practice in its proposed rule, and seeks List of Subjects in 37 CFR Part 201 AGENCY: Postal Regulatory Commission. comment on this proposal. Copyright, General provisions. ACTION: Notice of proposed rulemaking. Proposed Regulations B. Payment of Royalty Fees by SUMMARY: The Commission is Electronic Funds Transfer For the reasons set forth in the acknowledging a recent filing requesting The Licensing Division administers preamble, the Copyright Office proposes the Commission initiate an informal various statutory licensing schemes, amending 37 CFR part 201 as follows: rulemaking proceeding to consider including those requiring the changes to an analytical method for use submission of statements of account by PART 201—GENERAL PROVISIONS in periodic reporting (Proposal Seven). cable systems, satellite carriers, and ■ This document informs the public of the manufacturers or importers of digital 1. The authority citation for part 201 continues to read as follows: filing, invites public comment, and audio recording devices and media.13 takes other administrative steps. Authority: 17 U.S.C. 702. Pursuant to its statutory authority, the DATES: Comments are due: September 5, Copyright Office has set out the § 201.11 [Amended] 2018. requirements for payment of royalty fees ■ ADDRESSES: Submit comments under each of these statutory licenses by 2. Amend § 201.11 by removing ‘‘a electronically via the Commission’s regulation.14 One such requirement for single’’ from paragraph (f)(1). Filing Online system at http:// all of these statutory licenses is that § 201.17 [Amended] www.prc.gov. Those who cannot submit ‘‘[a]ll royalty fees shall be paid by a ■ 3. Amend § 201.17 by removing ‘‘a comments electronically should contact single electronic funds transfer.’’ 15 This single’’ from paragraph (k)(1) the person identified in the FOR FURTHER language became effective in 2006, as introductory text. INFORMATION CONTACT section by part of the final rule requiring remitters telephone for advice on filing to pay royalty payments by electronic § 201.28 [Amended] alternatives. funds transfer (‘‘EFT’’).16 ■ 4. Amend § 201.28 by removing ‘‘a In practice, however, the Office has single’’ from paragraph (h)(1) FOR FURTHER INFORMATION CONTACT: found that the requirement that introductory text. David A. Trissell, General Counsel, at remitters make royalty payments for ■ 5. Add § 201.31 to read as follows: 202–789–6820. multiple statements of account in a SUPPLEMENTARY INFORMATION: single, lump sum payment is § 201.31 Procedures for closing out unnecessarily restrictive and has royalty payments accounts in accordance Table of Contents with the Audio Home Recording Act. hampered ongoing modernization I. Introduction efforts. Accordingly, the Office proposes (a) General. This section prescribes II. Proposal Seven to remove the requirement that filers rules pertaining to the close out of III. Notice and Comment submit multiple SOAs in a single EFT royalty payments accounts in IV. Ordering Paragraphs accordance with 17 U.S.C. 1005. payment for the relevant statutory I. Introduction licenses, specifically, by amending 37 (b) In the Register’s discretion, four CFR 201.11(f)(1), 201.17(k)(1), and years after the close of any calendar On June 29, 2018, the Postal Service 201.28(h)(1) to remove the requirement year, the Register of Copyrights may filed a petition pursuant to 39 CFR that royalty fees must be paid in ‘‘a close out the royalty payments account 3050.11 requesting that the Commission single’’ payment. The current regulatory for that calendar year, including any initiate a rulemaking proceeding to requirement that funds be submitted sub-accounts, that are subject to a final consider changes to analytical through EFT will remain in place. distribution order under which royalty principles relating to periodic reports.1 Because the Office seeks to implement payments have been disbursed. The Petition identifies the proposed this reform expeditiously for reasons of Following closure of an account, the analytical changes filed in this docket as administrative efficiency, it is Register will treat any funds remaining Proposal Seven. in that account, or subsequent deposits separating this minor proposed change II. Proposal Seven from a larger ongoing rulemaking, that would otherwise be attributable to that calendar year, as attributable to the Background. The Proposal Seven 12 17 U.S.C. 1005. succeeding calendar year. objective is to ‘‘reorganize Cost Segment 13 See 17 U.S.C. 111(d)(1), 119(b)(1), 122(a)(5), 3 and certain mail processing cost pools 1003(c). 17 Statutory Cable, Satellite, and DART License 14 37 CFR 201.11(f)(1), 201.17(k)(1), 201.28(h)(1). Reporting Practices, 82 FR 56926, 56935–36 (Dec. 1 Petition of the United States Postal Service for 15 Id. 1, 2017). the Initiation of a Proceeding to Consider Proposed 16 Electronic Payment of Royalties, 71 FR 45739 18 Statutory Cable, Satellite, and DART License Changes in Analytical Principles (Proposal Seven), (Aug. 10, 2006). Reporting Practices, 83 FR 26229 (Jun. 6, 2018). June 29, 2018 (Petition).

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