Before the ~ UNITED STATES COPYRIGHT OFFICE LIBRARY OF CONGRESS Washington, DC

) In the Matter of: ) ) Determination of Reasonable Rates ) Docket No. 2000-9 CARP DTRA and Terms For the Digital Performance ) DTRA 1&2 Of Sound Recordings and ) Creation of Ephemeral Phonorecords. ) )

COLLEGIATE BROADCASTERS'TATEMENT IN SUPPORT OF MOTION OF LIVE365 AND SEPARATE MOTION FOR STAY PENDING APPEAL

Elizabeth H. Rader, DC Bar No. 444851 CENTER FOR INTERNET & SOCIETY Stanford Law School Crown Quadrangle 559 Nathan Abbott Way Stanford, California 94305-8610 Telephone: (650) 724-0517 Facsimile: (650) 723-4426 TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES

I. INTRODUCTION.

II. THE LIBRARIAN CAN AND SHOULD GRANT A STAY FOR ALL PARTIES BOUND BY THE DETERMINATION, TO PRESERVE THE STATUS QUO PENDING APPEAL.

III. CBI MEMBERS HAVE STANDING TO SEEK A STAY FROM THE LIBRARIAN BECAUSE CBI MEMBERS, WHO ARE BOUND BY THE DETERMINATION, WILL DIRECTLY BENEFIT IF ANY OF THREE APPEALS PENDING IS SUCCESSFUL

A. CBI Members Webcasting on the Live365 Internet Radio Network Participated, Through Live365, In The CARP Proceeding and Their Interests Will Be Vindicated if Live365's Appeal is Successful ......

B. CBI Members Who Are FCC Licensed Terrestrial Broadcasters Will Have Their Interests Vindicated If The National Association Of Broadcasters'ppeal Is Successful

C. CBI Members Who Are Non-Profit Webcasters Affiliated With Educational Institutions Will Have Their Interests Vindicated if InterCollegiate Broadcasters'ppeal is Successful

IV. CBI MEMBER STATIONS OPERATED BY STATE COLLEGES AND UNIVERSITIES WILL PREVAIL ON ELEVENTH AMENDMENT GROUNDS BECAUSE COPYRIGHT ROYALTIES CANNOT CONSTITUTIONALLY BE COLLECTED FROM THE STATES

V. NO CBI MEMBER WILL BE REQUIRED TO PAY ROYALTIES IN THE AMOUNTS SPECIFIED IN THE FINAL RULE IF ANY OF THE PENDING APPEALS ARE SUCCESSFUL AND RESULT IN VACATUR OF THE FINAL RULE. 10

VI. THE LIBRARIAN'S FINAL RULE IS ARBITRARY BECAUSE BIFURCATING THE DETERMINATION OF RATES FROM RECORDKEEPING REQUIREMENTS WAS A FUNDAMENTAL ERROR ...... 12 TABLE OF CONTENTS, continued

VII. COLLEGIATE BROADCASTERS WILL BE IRREPARABLY HARMED ABSENT A STAY.

VIII. CONCLUSION. TABLE OF AUTHORITIES

Page

CASES

Bonneville et al v. Peters, Case No. 01-3720 (3d Cir.).

Brown v. Gardner, 513 U.S. 115 (1994).

BV Eng'g v. University of California, Los Angeles, 858 F.3d 1394 (9'" Cir. 1988) ...... 9, 10

Connecticut Nat'l. Bank v. Germain, 503 U,S. 249 (1992)

Cuomo v, U.S. Nuclear Reg, Comm "n„772 F,2d 972 (D.C. Cir, 1985).

Florida Prepaid v. College Savings Bank, 527 U,S. 627 (1999) .

Hans v. Louisiana, 134 U,S. 1 (1890).

Jackson v, Hayakawa, 682 F.2d 1344 (9'" Cir, 1982) .

Lane v. First Nat'l Bank ofBoston, 871 F.2d 166 (1" Cir. 1989) ..

Motor Vehicle Mfrs. Assn. v. State Farm Mutual Ins. Co., 463 U.S. 29 (1983) ...

Perrin v. United States, 444 U.S. 37 (1979)

Rodriguez v. Texas Commission on the Arts, 199 F.3d 279 (5'ir. 2000).

Russello v. United States, 464 U.S. 16 (1983) .

Salerno v. CUNY, 191 F.Supp. 352 (S.D.N.Y. 2001)

United States v. Goldenberg, 168 U.S. 95 (1897). 7,8

United States v. Gonzales, 520 U.S. 1 (1997) ...

United States v. LaBonte, 520 U.S. 751(1997) .

United States v. Ron Pair Enters., Inc., 489 U.S. 235 (1989)

Washington Metro Area Transit Comm'n. v. Holiday Tours, Inc. 559 F.2d 841 (D.C. Cir. 1977). TABLE OF AUTHORITIES, continued

STATUTES

United States Constitution

Amendment XI

17 U.S.C. 101, et seq., "The Copyright Act"

Section 112(e) . 6 Section 114(d)(1)(A) . 4 Section 114(f)(1)(A). 7 Section 114 (f)(2)(A). 7 Section 114(f)(2)(B) . 6 Section 802 (c) . 7 Section 802(g) .. 5, 6, 7, 8 Section 802(h)(1)...... 7

REGULATIONS

Librarian's Final Rule and Order, 67 Fed. Reg. 45240 (July 8, 2002) ...... passim

OTHER A UTHORITIES AND REFERENCES

Black's Law Dictionary 34 (5'" ed. 1983).

H.R. 5469, "Small Webcaster Amendments Act of 2002" (October 7, 2002)....

Websites:

KSBR FM Website, htt://www.ksbr.net ..

KTSW 89.9 Website, htt://www.ktsw.net.....

KXLU 88.9 FM Website, htt://www.kxlu.com. I. INTRODUCTION

Collegiate Broadcasters Inc. ("CBI") is a nonprofit organization of about 100 members who are college radio, television and Internet broadcasters. CBI submits this statement in support of the motion of Live365.corn for a stay of the Librarian's Final

Rule and Order ("Final Rule"), 67 Fed. Reg. 45240 (July 8, 2002), requiring statutory licensees to make royalty payments, based on stated rates and minimum fees, on October

20, 2002 and monthly thereafter. CBI additionally moves, on behalf of its members, for a stay of the Final Rule with respect to nonprofit webcasting done by colleges and universities, to preserve the status quo and the educational benefits of webcasting for students, pending appeal.

II. THE LIBRARIAN CAN AND SHOULD GRANT A STAY FOR ALL PARTIES BOUND BY THE DETERMINATION, TO PRESERVE THE STATUS QUO PENDING APPEAL

Four factors bear on whether the Librarian should grant a stay of the Order pending appeal: they are 1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; 2) the likelihood that the moving party will be irreparably harmed absent a stay; 3) the prospect that others will be harmed if the court grants the stay; and 4) the public interest in granting the stay. 'hile CBI's member stations have a high probability of prevailing on various pending appeals, CBI need only show that they have more than a mere possibility of success on the merits. Cuomo v. U.S. Nuclear

Reg. Conzm'n., 772 F.2d 972, 974 (D.C. Cir. 1985). A moving party need not show that

'ee Order, Adjustment of Rates for the Satellite Carrier Compulsory License, Docket No. 96-3 CARP SRA, (November 14, 1997); Order Docket No. 2000-9 CARP DTRA 1&2 (August 8, 2002) at 2. (Denying Motion of Intercollegiate Broadcasting System Inc. and Harvard Radio Broadcasting Company, Inc.)

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY it has a high probability of success, if the showing on other factors is strong. The overwhelming evidence that third parties and the public will suffer irreparable harm absent a stay also favors granting a stay. Copyright owners will suffer little, if any, harm from the stay. Artists, in particular, will not suffer harm from the stay because

SoundExchange has no plans to pay them immediately following October 20 anyway.

SoundExchange "is unlikely to attempt to distribute statutory royalties" until after the adoption of final record keeping regulations. See Comments of SoundExchange filed

September 30, 3002 in Docket No. RM 2002-1B.

The purpose of a stay is to preserve the status quo pending a final determination of the merits of an appeal. Washington Metro Area Transit Comm'n. v. Holiday Tours,

Inc. 559 F.2d 841 (D.C. Cir. 1977). While CBI itself has not appealed, its college station members are represented in multiple pending appeals, any one of which, if successful, will have the effect of relieving most CBI member stations of the obligation to pay royalties at the rates set in the Final Rule. As shown in Live365's motion, among the factors strongly favoring granting the stay are irreparable harm to webcasters that were unable to participate in the CARP, such as most educational webcasters, irreparable harm to other third parties that directly benefit from webcasting, and indeed harm to the public, if a stay is not granted. College webcasters are perhaps the webcasters most grievously harmed by the rates in the Final Rule, because they do not operate for profit and have extremely limited budgets and revenues, and because webcasting offers college stations the ability to do much more with these limited resources than they could otherwise do.

Accordingly, a stay, to preserve the status quo and avoid these harms, must apply to all entities subject to the Librarian's Final Rule, and certainly to college webcasters.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY III. CBI MEMBERS HAVE STANDING TO SEEK A STAY FROM THE LIBRARIAN BECAUSE CBI MEMBERS, WHO ARE BOUND BY THE DETERMINATION, WILL DIRECTLY BENEFIT IF ANY OF THREE APPEALS PENDING IS SUCCESSFUL

A. CBI Members Webcasting on the Live365 Internet Radio Network Participated, Through Live365, In The CARP Proceeding and Their Interests Will Be Vindicated if Live365's Appeal is Successful.

As explained in Live365's Motion, Live365 is a network that offers webcasting

services to thousands of individual broadcasters. See Live365 Motion at 5; Declaration

of John Jeffrey at g 3. These include, for example, CBI members KSBR, KTSW AND

KXLU, which are college FM stations webcasting their broadcast programming. KSBR is a community service broadcast and Internet radio station, run by broadcasting students

at Saddleback College in Mission Viejo, California. See htt://www.ksbr.net. KXLU

88.9 FM is a student-run station broadcasting from Loyola Marymount University in Los

Angeles, California since 1957. See htt://www.laclu.com. KTSW FM 89.9, "The

Other Side of Radio." is the student radio station of Southwest Texas University, in San

Marcos, Texas. See www.ktsw.net. Webcasting allows students at each of these educational stations to reach a worldwide audience. Live365 is, itself, a business member of CBI.

As discussed in Live365's brief, it is undisputed that Live365 has standing to

appeal, representing the interests of its Internet network members, such as KSBR, KTSW

and KXLU. These CBI members, accordingly, are likely to prevail on appeal to the same extent as Live365. Therefore, they, and by extension CBI, have standing to seek a stay from the Librarian.

CBPS STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY B. CBI Members Who Are FCC Licensed Terrestrial Broadcasters Will Have Their Interests Vindicated If The National Association Of Broadcasters'ppeal Is Successful.

As discussed in the National Association of Broadcasters ("NAB")'s Motion for a

Stay of the Register of Copyrights'ecision filed September 11, 2002, an appeal pending in the Third Circuit Court of Appeals will determine whether an FCC-licensed broadcaster's simultaneous, nonsubscription, digital transmission over the Internet of its

AlvUFM broadcast signal is exempt under Section 114(d)(1)(A) of the Copyright Act (17

U.S.C. 101 et seq., from the limited digital sound recording performance right provided by Section 106(6). See Bonneville et al v. Peters, Case o. 01-3720 (3d Cir. YEAR). If the

Bonneville appellants prevail on appeal, all the CBI members that are educational FCC- licensed broadcasters will be exempt from webcasting royalties entirely. The NAB is a party to the Bonneville appeal. Id.; see NAB's Motion at 3 n.1. Some of CBI's college station members are also members of NAB. No one has disputed that NAB has standing to appeal, representing the interests of its members. CBI members who are NAB members, accordingly, are likely to prevail on appeal to the same extent as the NAB.

Therefore, they, and by extension CBI, have standing to make this motion seeking a stay from the Copyright Office or Librarian.

C. CBI Members Who Are Non-Profit Webcasters Affiliated With Educational Institutions Will Have Their Interests Vindicated if InterCollegiate Broadcasters'ppeal is Successful.

CBI's membership overlaps or intersects with that of the National Association of

Broadcasters (NAB) and Intercollegiate Broadcast Systems, among other industry groups. On July 8, 2002, IBS filed a Petition for Review, along with Harvard Radio

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY Broadcasting Co., Inc., which is also a CBI member, in the D.C. Circuit. (Docket No.

02-1220).

Although the Librarian has ruled that IBS and Harvard lack standing for the appeal and therefore have no likelihood of success on the merits of their appeal, and the

Librarian has moved to dismiss the appeal, the Circuit Court has not yet ruled on that motion and, accordingly, the Petition for Review is still pending. For the following reasons, the D.C. Circuit should hold that IBS has standing and deny the motion to

Cllsllllss.

Section 802(g) of 17 U.S.C. provides that "any decision of the Librarian of

Congress under subsection (f) with respect to a determination of an arbitration 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. (emphasis supplied). Black's Law Dictionary defines "aggrieved party" as follows:

One whose legal right is invaded by an act complained of, or whose pecuniary interest is directly affected by a decree or judgment. One whose right of property may be established or divested. The word "aggrieved" refers to a substantial grievance, a denial of some personal or property right, or the imposition of a burden or obligation.

Black's Law Dictionary 34 (5 ed. 1983). Petitioners'ecuniary interests are directly affected by the Librarian's Final Rule, and their rights as compulsory licensees are contingent on their ability to pay the royalties set by the Final Rule. The Final Rule imposes a burden and obligation on Petitioners to pay fees assessed at the rates chosen by the Librarian. Accordingly, Petitioners (and all CBI's members) are aggrieved parties.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY Assuming, arguendo, that the Register of Copyright is correct that FCC licensed stations are not exempt from the webcasting royalties, all the IBS Petitioners, as webcasters that have made transmissions pursuant to the compulsory license granted by

17 U.S.C. g 112(e) and 17 U.S.C. g 114, are entities that are bound by the Librarian's determination. See 17 U.S.C. $ 114(f)(2)(B). Accordingly, they have standing to appeal the determination, under Section 802(g). The Court need not go beyond the plain language of the statute and, indeed, should not. Perrin v. United States, 444 U.S. 37, 42

(1979) ("A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning.");

United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241-242 (1989) (where statute's language is plain, the sole function of courts is to enforce it according to its terms).

The Librarian may argue that "aggrieved party" should be construed to mean that a person seeking judicial review of the Librarian's decision must have participated in the

CARP proceeding. But here, Congress used the phrase "aggrieved party" but added the modifying phrase "who would be bound by the determination" to clarify which aggrieved parties have standing to seek judicial review. A construction of "aggrieved party" to mean a party who participated in the CARP proceedings would render that phrase superfluous. Every entity that participates in the CARP is bound by it, because all CARP participants were either copyright owners or copyright users. "[C]ourts should disfavor interpretations of statutes that render language superfluous." Connecticut Nat'L Bank v.

Germain, 503 U.S. 249, 253 (1992) (appellate jurisdiction over certain district court orders should not be limited by negative implication). Not every party aggrieved by the

Librarian's Order, however, is "bound by the determination." Accordingly, the phrase

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY "bound by the determination" modifies and narrows the term "aggrieved party" and is not superfluous.

The phrase "who would be bound by the determination" is the only phrase in

Section 802(g) expressly modifying the phrase "aggrieved party." Every phrase in a statute must be given effect. Statutory construction does not start with the premise that statutory language is imprecise. Instead, the Court must "assume that in drafting legislation, Congress said what it meant." United States v. LaBonte, 520 U.S. 751, 757

(1997) ("maximum" in sentencing guideline means maximum sentence authorized for the offense of conviction.") See also Connecticut Nat'L Bank v. Germain, Ibid. at 253

("courts must presume that a legislature says in a statute what it means and means in a statute what it says there"); United States v. Goldenberg, 168 U.S. 95, 102-103 (1897)

(the lawmaker "is presumed to know the meaning of words and the rules of grammar").

If Congress had intended to limit the right to appeal to parties that participated in the CARP proceedings, it knew how to do so. For instance, in the provision immediately following that on judicial review, Congress provides that "In ratemaking proceedings, the reasonable costs of the Librarian of Congress and the Copyright Office shall be borne by the parties to the proceedings as directed by the arbitration panels under subsection (c)."

17 U.S.C. g 802(h)(1). See also 17 USC ) 802 (c) ("...parties to the proceeding shall bear the entire cost thereof..."); 17 USC g 114(f)(1)(A) ("The parties to each negotiation proceeding shall bear their own costs"); and ) 114 (f)(2)(A) (same). Congress could easily have added the same phrase "to the proceeding" to modify "aggrieved party" in

Section 802(g), but it did not do so. "Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY presumed that Congress acts intentionally and purposefully in the disparate inclusion or exclusion." Russello v. United States, 464 U.S. 16, 23 (1983) (quoting United States v.

Wong ICim Bo, 472 F.2d 720 (5'ir. 1972)); Brown v. Gardner, 513 U.S. 115, 120

(1994); United States v. Goldenberg, 168 U.S. at 103 (no necessity for applying the same limitation in one clause that is provided in the other). Instead, Congress used the modifying phrase "who would be bound by the determination."

It bears noting that Section 802(g) provides the right of appeal to any aggrieved party who would be bound by the determination. The Supreme Court has considered the term "any" in other statutes. "Read naturally, the word 'any'as an expansive meaning, that is, 'one or some indiscriminately of whatever kind." United States v. Gonzales, 520

U.S. 1, 5 (1997) (quoting Webster's Third New Int'l. Dictionary 97 (1976)). In the absence of any language limiting the breadth of that word," it must be read as referring to all of the subject that it is describing." Id,

At the time it mandates CARP proceedings to set webcasting royalty rates,

Congress realized that the webcasting field was in its infancy. Congress intended to provide a right of appellate review to parties, like noncommercial educational stations, that would be unable to participate in the expensive and time-consuming CARP proceedings but would be bound by the Librarian's determination. Congress likely predicted that stations might come into existence, or move from terrestrial radio into webcasting, after the CARP proceedings began. Congress knew that the class of entities bound by the determination would be broader than the class of webcasters who could participate in the CARP process. Congress may well have intended, by using the phrase

"bound by the determination" to provide an opportunity for these very parties to petition

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY the Court for redress of their grievances. In short, there is no reason to think that

Congress intended to limit the right to petition to entities that participated in the CARP proceeding. Accordingly, the D.C. Circuit is likely to conclude that the IBS petitioners have standing and deny the Librarian's motion to dismiss.

IV. CBI MEMBER STATIONS OPERATED BY STATE COLLEGES AND UNIVERSITIES WILL PREVAIL ON ELEVENTH AMENDMENT GROUNDS BECAUSE COPYRIGHT ROYALTIES CANNOT CONSTITUTIONALLY BE COLLECTED FROM THE STATES.

State colleges and universities are immune, under the Eleventh Amendment, from suits for money damages in federal court arising under the Copyright Act. See, e.g., BV

Eng'g v. University of California, Los Angeles, 858 F.3d 1394, 1395 (9'" Cir. 1988).

Citizens may not bring suit against a state or any instrumentality thereof without the state's consent. See U.S. Const. amend. XI; Hans v. Louisiana, 134 U.S. 1, 15 (1890)

(federal jurisdiction over suits against nonconsenting states was not contemplated by the

Constitution when establishing federal judicial power); Rodriguez v. Texas Commission on the Arts, 199 F.3d 279, 280 (5'" Cir. 2000) (state immune from suit for copyright infringement). See also Lane v. First Nat'l Bank ofBoston, 871 F2d. 166, 176 (1" Cir.

1989) (states continue to enjoy sovereign immunity in regard to damages for copyright infringement). Congress has no power under Article I to abrogate state sovereign immunity. Florida Prepaid v. College Savings Bank, 527 U.S. 627, 636 (1999);

Rodriguez v. Texas, 199 F.3d at 281. State universities and colleges are treated like states themselves for eleventh amendment purposes. See, e.g., Salerno v. CUNY, 191

F.Supp. 352, 355 (S.D.N.Y. 2001) (City University of New York treated as instrumentality of New York); Jackson v. Hayakawa, 682 F.2d 1344, 1350 (9'ir. 1982)

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY (University of California has same immunity as state of California); BV Eng 'g, 858 F.2d

1394) (same, in copyright context).

Because state institutions are immune from suit for money damages, in federal court for copyright infringement, and state courts lack jurisdiction in suits arising under the copyright act, the Librarian's Final Rule will be unenforceable as to state educational institutions that have availed themselves of the compulsory license for webcasting since

1998. Any suit to collect royalty fees from these schools will be barred by the eleventh amendment. Accordingly, the harm to copyright owners from granting a stay is illusory with respect to college webcasters that are operated by state institutions. This factor favors granting a stay the obligation of these schools to pay royalties under the

Librarian's Final Rule.

V. NO CBI MEMBER WILL BE REQUIRED TO PAY ROYALTIES IN THE AMOUNTS SPECIFIED IN THE FINAL RULE IF ANY OF THE PENDING APPEALS ARE SUCCESSFUL AND RESULT IN VACATUR OF THE FINAL RULE.

CBI agrees with, and incorporates by reference, the arguments in Live365's

Motion for Stay. The rates in the Final Rule violate the First Amendment because they burden webcasters'peech interest in creating radio programs and stations in a way that is not even rationally related to Congress's goals of fairly compensating copyright owners for the compulsory license for the use of the their works. See Live365's Motion at 4-9.

The rates in the Final Rule frustrate Congress's purpose, in providing for a compulsory license, of encouraging webcasting and other modern ways to bring the public access to a

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

10 wide variety of music. See id. at 9-12. The Librarian acted in an arbitrary manner by setting rates using the RIAA/Yahoo! Agreement as a benchmark. See id. at 12-17. The

Librarian's Final Rule also arbitrarily condoned the Panel's ignoring a genuine willing buyer/willing seller license, the NPR/RIAA agreement. See id. at 18-19. Similarly, it was arbitrary for the Librarian to condone the Panel's rejection of market rates for musical works copyright licenses as a benchmark. See id. at 20-21. Finally, the Final

Rule is arbitrary in setting a minimum fee that punishes small webcasters and is not supported by the evidence. See id. at 21-23.

CBI also agrees with, and incorporates by reference, the arguments in IBS's

Motion for Stay dated July 30, 2002. The Copyright Office's procedural rulings excluded participation by an entire class of non-profit webcasters affiliated with educational institutions. See IBS Motion at 4-5. The Panel even noted that although the

National Religious Broadcasters'usic License Committee represents some non-CPB broadcasters, "the record remains virtually barren respecting such broadcasters" presenting the CARP with "an extraordinary challenge." CARP Report at 89. The Panel could not meet this challenge. The failure of the Final Rule to take into account the small size of such webcasters violates the small business policies of the U.S. government and fails to differentiate the small entities from larger entities. See id. at 5. It is highly likely that at least one appellant will prevail on an argument that will result in the D.C. Circuit vacating the Final Order. Accordingly, to avoid irreparable harm in the interim, a stay should be granted.

Congress's dismay at the CARP's ruling is evident from the House's passage of H.R. 5469, the Small Webcaster Amendments Act of 2002 on October 7, 2002. CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

11 VI. THE LIBRARIAN'S PINAL RULE IS ARBITRARY BECAUSE BIFURCATING THE DETERlVHNATION OF RATES PROM RECORDKEEPING REQUIREMENTS WAS A FUNDAMENTAL ERROR.

A decision is arbitrary if it fails to consider entirely an important aspect of the problem that it was solving. Motor Vehicle Mfrs. Assn. v. State Farm Mutual Ins. Co.,

463 U.S. 29, 43 (1983). Here, because of an arbitrary decision to separately determine rates and record keeping requirements, the Panel failed to consider entirely the costs of complying with such requirements in determining the rate a willing buyer and willing seller would agree to. Under the sound recording performance rate determination adopted by the Librarian, the amount sound recording royalties will be based on the number of "performances," which the determination defines as, "each instance in which any portion of a sound recording is publicly performed to a listener via a Web Site transmission or retransmission." 67 Fed. Reg. at 45273. But the CARP report cites no evidence that accurately calculating such instances is feasible—let alone that a willing buyer would agree to the royalty rate chosen in light of the additional, and often higher, costs of the associated recordkeeping and reporting. It is common sense that a willing buyer would not agree to any royalty rate if the license came with recordkeeping terms that were unfeasible or prohibitively expensive.

In fact, webcasters like IGDJL can technologically only measure Internet streaming connections, not listeners. Wilier Decl. at g 23. For each and every month spanning the past two years OCUL has experienced one or more streaming sessions extending for at least 24 hours, and many of these lasted for days on end. Wilier Decl. at

'f24. The record generated by KXUL proves the flaw of any royalty rate tied to unverifiable "performances" in this new technological frontier. Other webcasters

CBPS STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

12 presumably suffer from the same phenomenon. Especially for low-volume streaming services like many college radio stations, though, just a few such marathon connections each month — these clearly are not ~listenin sessions — dramatically and unfairly skew the

"performance" statistics in favor of the copyright owners.

The royalty rates and minimum fees are especially prohibitive in light of the extra costs that stations also will have to incur to comply with the record keeping requirements.

The cost of complying with these requirements would far exceed the fees themselves at most college stations. Robedee Decl. at 'g'It 19-20 . Even if there were a technological solution, it would be prohibitively expensive for college stations to purchase it. Id. at 21.

Even the developing interim requirements are likely to preclude many educational institutions from webcasting. The Copyright Office has indicated that the final record keeping requirements will be more extensive- and therefore more burdensome- than the interim requirements.

Obviously, this information was not offered to the Panel because CBI and its members could not afford to participate directly in the CARP proceeding, the noncommercial broadcaster groups that did participate represent stations with resources and needs very different from those of most college stations, and the record keeping rulemaking was separate. Therein lies the problem. The Panel did not consider any evidence on the cost or feasibility of the record keeping in making its determination of royalty rates, nor did the Register or the Librarian recognize the error in failing to consider this important factor. The resulting inability of many stations to calculate their actual number of transmission under the compulsory licenses is another reason the

CBIsS STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

13 Librarian should issue a stay relieving webcasters of the obligation to pay fees on

October 20, 2002.

VII. COLLEGIATE BROADCASTERS WILL BE IRREPARABLY HARMED ABSENT A STAY

Webcasting has, up until now, been a boon for college broadcasters. KTRU, Rice

University's radio and Internet station, and KXUL, University of Louisiana's radio and

Internet station, are examples of college stations that have benefited enormously from webcasting and will be harmed by the Librarian's Order, In addition to giving students a forum in which to express themselves, as discussed above, they provide means for students to access a radio station in a traditional setting and to use the technologies available today in the industry. Students learn many skills by operating a radio station.

Webcasting offers students a whole new set of tools to use to reach an audience,

Learning to develop and implement those tools is a great educational experience for the students. Robedee Decl. at 'P. Students must have exposure to the use of new

technologies to gain a thorough understanding of mediated communication. gained as the result of KXUL radio's Internet presence and the station'sStudents'xperience streamed audio programming is therefore a vital part of the students'omplete education.

Wilier Decl. at jt9.

Webcasting allows KTRU to better pursue its mission and extend its reach beyond the local area, to further expose genres and artists to a wider audience. It allows students to reach many more listeners, and over a much wider geographic area than they can reach with KTRU's FM signal. Robedee Decl. at $9. Likewise, KXUL's Internet outreach makes the radio station's programming available to a worldwide audience that would not otherwise be able to experience the messages communicated by our students. KXUL has CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

14 received numerous communications from listeners throughout this country, and has logged listening sessions from 53 nations outside of the United States. Wilier Decl. at $9.

K3HJL views the use of digital technology to retransmit the programming of non- commercial radio stations as a natural extension of these stations'istorical service.

Noncommercial educational radio stations traditionally strive to program to otherwise underserved audiences with content not typically provided by their commercial counterparts. The further distribution of educational and cultural programming via the

Internet allows noncommercial radio stations to effectively extend their public service to a geographically diverse audience. The Internet removes the physical boundaries imposed by an educational radio station's terrestrial radio frequency transmission, allowing a greater audience to experience each noncommercial station's programming.

The Internet began, in part, to support education; the continuing use of the Internet by noncommercial educational radio stations respects that tradition. Wilier Decl. at 'It10.

For some schools, webcasting is the only viable way to reach an audience of any size, due to limited broadcast spectrum or fiscal constraints. For a new station, start-up

(non-royalty) costs for other means of transmitting are much higher than those for webcasting. Low power FM, cable FMKV, legal and unlicensed AM, and cafeteria public address broadcast systems all have extremely limited audience potential, a problem solved perfectly by webcasting. Robedee Decl. at $5. These schools are especially ill-served by the Final Rule because, as non FCC- licensed webcasters, they cannot meet the definition for noncommercial, non-CPB broadcasters and must pay the commercial rate! Webcasting also allows for a second station where, for example, a

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

15 college wants to have both an NPR station and a student station, or where a college lacks the resources or the spectrum for a second FM station. Robedee Decl. at jt6.

Most CBI member college radio stations, unlike many religious noncommercial stations and unlike public radio stations funded by CPB, have to pay their operating costs from student fees or from their meager academic budgets. Robedee Decl. at $13; Wilier

Decl. at 'g5. According to Intercollegiate Broadcast System ("IBS") surveys, the average college station budget is about $9,000. Id. Historically, noncommercial radio stations have always paid copyright royalties to the performing rights organizations in the form of a reasonable flat fee, while commercial stations have paid on a percentage of revenue basis. This has enabled college stations to operate on fixed budgets and avoided penalizing them if they succeed in reaching a wider audience. Robedee Decl. at '[[15.

KTRU can afford to pay the back royalties due October 20. But going forward, KTRU may not be able to pay both the royalties, especially as its audience increases. KTRU's audience has been doubling every ten months, as more people get high speed Internet connections and listeners discover KTRU through "surfing" and promotion. Robedee

Decl. at '[[18. The fees, combined with the reporting requirements, are also likely to force

KXUL to cease its Internet service. Wilier Decl. at $26.

As discussed above, college broadcasters are particularly harmed by the

Librarian's decision to set a minimum fee of $500 even for noncommercial webcasters.

As a result of the minimum fees, most low-volume college webcasters will be paying per- performance royalties much higher than commercial entities. Wilier Decl. at H20-22.

For example, the University of Louisiana at Monroe operates a radio station, KXUL.

KXUL's nominal royalty for the 2001 calendar year, the station's peak listening period,

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY totals $ 105.78. Because KXUL will be required to disburse the minimum fee, the station will pay an effective per-performance rate for 2001 of 0.09381&, or 469% of the nominal noncommercial rate and 134% of the nominal commercial rate.

Unless the copyright office grants necessary and justified relief, on October 20,

2002 college radio station KXUL will have to make payments for all past performances between October 28, 1998 and August 31, 2002. Wilier Decl. At $22. Because of the effect of the minimum fee, the amount of that payment will evidently have to be

$2,500.00, although KXUL's performance and ephemeral copy royalties for the period total only $214.86. Id.

William Robedee started the Save Our Streams grassroots campaign and set up a website at www.rice.edu/cb/sos in order to track the issue of the new webcasting regulations, royalties and fees being promulgated under the DMCA and also to track the resulting impact on college radio stations. He received about 1400 e-mails in support of

CBI's position paper, a small sample of which are provided for the Librarian's consideration. Robedee Decl. at g 26 and Exh. B. The impact of CARP report and the

Librarian's order has already been devastating. Robedee has personally confirmed that

70 stations have already stopped webcasting, and has heard from credible sources that many more have also stopped. Robedee Decl. at 'g 23-24 (listing casualties). Some of the most severely harmed college stations are those for which webcasting is the only means of "broadcasting" such as UCLA-Radio, which has stopped streaming as result of the Librarian's Order. Students at UCLA are losing their forum for free expression and the opportunities offered by an educational station each and every day. If UCLA-Radio is to explore other means of reaching an audience, it will expend considerable time, effort

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

17 and funds, and ultimately will reach a much smaller audience than it could through webcasting. Robedee Decl. at g 7. Radio enthusiasts at other colleges, such as the

University of Texas at Dallas, had plans to start webcasting, but reluctantly suspended these when they learned of the Panel's decision, because they cannot afford to webcast under the rates and fees in the Librarian's Order. Robedee Decl. at 'g 25.

RIAA will not even negotiate with college broadcasters about royalty rates or record keeping at this time. Wilier Decl. at '$30; Robedee Decl. at '$28. Even if college stations are ultimately able to reach an agreement with RIAA, time will have passed and the harm to current students and the public will be irreparable. Robedee Decl. at 'j[28. this time will be gone forever, so the harm to current students who want to participate in webcasting, at colleges whose stations have ceased webcasting, never started to webcast or have any kind of radio station at all, will be irreparable. Robedee Decl. at $27. The harm to college broadcasters and their listeners alone would justify granting a stay.

VIII. CONCLUSION

For the reasons set forth above, the Librarian should grant this motion and issue a stay of the Order, relieving all parties bound by the Librarian's determination of the obligation to make any payments under the compulsory license until the Court of Appeals has decided the various pending appeals that will affect such obligations.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

18 Dated: October 11, 2002 Respectfully Submitted,

COLLEGIATE BROADCASTERS, INC.

EliMeth H. Rader Stanford Law School Center for Internet 8z Society 559 Nathan Abbott Way Stanford, CA 94305-8610 (650) 724-0517

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY

19 PROOF OF SERVICE

I, Joanne Newman do hereby certify and declare as follows:

I am over the age of 18 years, and not a party to the instant proceedings. I

am employed in the county of Santa Clara, California. My business address is:

559 Nathan Abbott Way, Stanford, California.

On October 11, 2002 I caused to be served the following document:

COLLEGIATE BROADCASTERS'TATEMENT IN SUPPORT OF MOTION OF LIVE365 AND SEPARATE MOTION FOR STAY PENDING APPEAL

via Federal Express by placing one true copy of the above document in a

properly sealed and addressed envelope for overnight delivery, and deposited in a

station mailbox routinely maintained by Federal Express. Service is made on the

following interested parties:

Arthur Levine Robert Alan Garrett Finnegan, Henderson, Farabow Ronald A. Schechter Garrett 8z Dunner Arnold 8z Porter 1300 I Street, N.W. 555 Twelfth Street, N.W. Washington, DC 20005 Washington, DC 20004

Patricia Polach Cary H. Sherman Bredhoff & Kaiser Steven M. Marks 805 Fifteenth Street, N.W. Recording Industry Suite 1000 Association of America Washington, DC 20005 1330 Connecticut Ave., N.W. Suite 330 Washington, D.C. 20036

Bruce G. Joseph Barry I. Slotnick Wiley, Rein 8c Fielding Loeb k Loeb 1776 K Street, N.W. 345 Park Avenue Washington, D.C. 20006 New York, NY 10154 Adam I. Cohen Weil, Gotshal & Manges 767 Fifth Avenue New York, NY 10153

Sandra M. Aistars Cynthia Greer Weil, Gotshal & Manges Shaw Pittman 1501 K Street, N.W. 2300 N Street, N.W. Washington, DC 20005 Washington, D.C. 20037-1128

I declare under the penalty of perjury that the foregoing is true and correct,

Executed this 11th day of October 2002 at Stanford, California.

Joanne ewman 10/11/02 FRI 12:09 FAX 6503457494 LIUE365, INC @013 [atm(gg[1%'t3DD

'i q 2002

Before the '9ENERAL COUNSEL. UNITED STATKS COPYRIGHT OFFICE OP COPYRIGHT LIBRARV OF CONGRESS Washington„DC

) In the Matter of: ) 2000-9 CARP DTRA Determination of Reasonable Rates ) Docket No, and Terms For the Digital Performance ) DTRA M2 Of Sound Recordings and ) Creation of Ephemeral Phonorecords. )

COLLKGIATK BROADCASTERS'TATEMENT IN SUPPORT OF MOTION OF LIVK365 AND SKPARA.TE MOTION FOR STAY PKNBING APPKAL

Elizabeth H. Rader, DC Sar No. 444851 CEIMTl%. FOR INTERNET k, SOCIETY Stanford. Law School Crown Quadrangle 559 Nathan Abbott %ay Stanford, California 94305-8610 Telephone. (650) 724-0517 Facsimile: (650) 723-4426 10/11/02 FRI 12:09 FAX 6503457494 LIVES65, INC @014

I. INTRODUCTION organization of about 100 Collegiate Broadcasters Inc. ("CBl'*) is a nonprofit Internet broadcasters. CBI submits this members who are college radio, television and the Librarian's Final statement in support of the motion of Live365.corn for a stay of requiring statutory Rule and Order ("Final Rule"), 67 Fed. Reg. 45240 (July 8, 2002), minimum fees, on October licensees to make royalty payments, based on stated rates and on behalf of its members, for a 20, 2002 and monthly thereafter. CBI additionally moves, colleges and stay of the Final Rule with respect to nonprofit webcasting done by

unive sities, to preserve the status quo and the educational benefits of webcasting for

students, pending appeal.

II. THK LIBRARIAN CAN AND SHOULD GRANT A STAY FOR ALL PARTIES BOUND BY THK DKTK]~(ATION, TO PRESERVE TBK STATUS QUO PKNMNG APPKAL

Pour factors bear on whether the Librarian should grant a stay of the Order

pending appeal: they are 1) the likelihood that the party seeking the stay will prevail on

the merits of the appeal; 2) the likelihood, that the moving party will be irreparably

harmed absent a stay; 3) the prospect that others will be harmed if the court grants the

stay; and 4) the public interest in granting the stay. 'hile CBI's member stations have

a high probability of prevailing on various pending appeals, CBI need only show that

they have more than a mere possibility of success on the merits. Cuomo v. U.S. Nuclear

Reg. Comm'n., 772 F.2d 972, 974 (D.C. Cir. 1985). A moving party need not show that

'ee Order, Adjustment of Rates for the Satellite Carrier Compulsory License, Docket No. 96-3 CARP SRA, (November 14, 1997), Order Docket No. 2000-9 CARP DTRA M2 (August 8, 2002) at 2. (Denying Motion of Intercollegiate Broadcasting System Inc, and Harvard Radio Broadcasting Company, Inc.)

CSI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:09 FAX 6503457494 LIVE365, INC

on other factors is strong. The it has a high probability of success, if the showing will suffer irreparable harm overwhelming evidence that third parties and the public owners will suffer little, if any, harm absent a stay also favors granting a stay. Copyright from the stay because from the stay. Artists, in particular, will not suffer harm October 20 anyway. SoundExchange has no plans to pay them immediately following royalties" until after the SoundExchange "is unlikely to attempt to distribute statutory SoundExchangc filed adoption of final record keeping regulations, See Comments of

September 30, 3002 in Docket No. RM 2002-18. determination The purpose of a stay is to preserve the status quo pending a final

of the merits of an appeal. Washington Metro Area Transit Comm'n. v. Holiday Tours,

Inc. 559 P.2d 841 (D.C, Cir. 1977). While CBI itself has not appealed, its college station

members are represented in multiple pending appeals, any one of which, if successful,

will have the effect of relieving most CBI member stations of the obligation to pay

royalties at the rates set in the Final Rule. As shown in Live365's motion, among the

factors strongly favoring granting the stay are irreparable harm to wcbcasters that were

unable to participate m the CARP, such as most educational webcasters, irreparable harm

to other third parties that directly benefit from webcasting, and indeed harm to the public,

if a stay is not granted. College webcasters are perhaps the webcasters most grievously

harmed by the rates in the Final Rule, because they do not operate for profit and have

extrcinely limited budgets and revenues, and because wcbcasting offers college stations

the ability to do much more with these limited resources than they could otherwise do.

Accordingly, a stay, to preserve the status quo and avoid these harms, must apply to all

entities subject to the Librarian's Final Rule, and certainly to college webcasters.

CSI'S STATEMENT IN SVPPORT OF MOTION AND MOTION 'FOR STAY 10/11/02 FRI 12:10 FAX 6503457494 LIVES65, INC QJ 016

THE HAVE STAINING TO SEEK A STAV FROM CSI MEMBERS BY THE BECAUSE CBI MEMBERS, %HO ARE BOUND LIBRARIAN T1%REK nRTKRMtNATION,% ILL DIRECTLY BENEFIT IF ANT OF APPEALS PI~&BING IS SUCCESSFUL Webcasting on the Live365 Internet Radio Network A. CBI Members and Their Partiripated, Through Live365, In The CARP Proceeding Interests Vill Be Vindicated if Live365's Appeal is Successfub offers webcasting As explained in Live365's Motion, Live365 is a network that

at 5", Declaration services to thousands of individual broadcasters. See Live365 Motion

CBE members KSBR, KTSW AND of John Jeffrey at 'jf 3. These include, for example, KSBR KXLU, which are college FM stations webcasting their broadcast programming.

is a community service broadcast and Internet radio station, run by broadcasting students

' XXLII 8 lt Cll i i'. d'.S*l~li .lb.,

88.9 EM is a student-run station broadcasting fromLoyola Marymount University in Los

Angejes, California since 1957. See htt://www.kxlu.com. KTS% FM 89.9, 'The

Other Side of Radio." is the student radio station of Southwest Texas University, in San

Marcos, Texas. See www.ktsw.net. Webcasting allows students at each of these

educational stations to reach a worldwide audience. Live365 is, itself, a business member

of CBE.

As discussed in Live365's brief, it is undisputed that Live365 has standing to

appeal, representing the interests of its Internet network members, such as KSBR, KTS%

and KXLU. These CBI members, accordingly, are likely to prevail on appeal to the same

extent as Live365. Therefore, they, and by extension CBI, have standing to seek a stay

from the Librarian.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/ll/02 FRI 12:14 FAX S503457494 LIVE365, INC @017 J

Broadcasters Vill Members%ho Are FCC Licensed Terrestrial S. CSI ' Association Of Ha Th te ests Vindicated If The National Broadcasters'ppeal Is SuccessfuL Broadcasters {"NAB")'s Motion for a As discussed in the National Association of September 11, 2002, an appeal pending Stay of the Register of Copyrights'erision filed whether an FCC-licensed in the Third Circuit Court of Appeals will determine over the Internet of its broadcaster's simultaneous, nonsubscription, digital transmission Act (1'7 ~M broadcast signal is exempt under Section 114(d)(1)(A) of the Copyright provided U.S.C. 101 et seq., from the limited digital sound recording performance right 01-3720 Cir.). If the by Section 106(6). See Bonneville et al v. Peters, Case o. (3d PCC- Bonneville appellants prevail on appeal, all the CBI members that are educational

licensed broadcasters will be exempt from webcasting royalties entirely. The NAB is a CBI's party to the Bonneville appeal, Id.; see NAB's Motion at 3 n.l. Some of college

station members are also members of NAB. No one has disputed that NAB has standing

to appeal, representing the interests of its members, CBI members who are NAB

members, accordingly, are likely to prevail on appeal to the same extent as the NAB.

Therefore, they, and by extension CBI, have standing to make this motion seeking a stay

from the Copyright Office or Librarian.

C. CSI Members Who Are Non-Profit Webcasters AffHiated With Kdncational Institutions%ill Have Their Interests Vindicated if InterCollegiate Broadcasters'ppeal is SeccessfnL

CBI's membership overlaps or intersects with that of the National Association of

Broadcasters (NAB) and Intercollegiate Broadcast Systems, among other industry

groups. On July 8, 2002, IBS filed a Petition for Review, along with Harvard Radio

CBI'S STATEMKNT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:14 FAX 6505457494 LIVE$65, INC @018 J

in the D.C. Circuit. (Docket No. Broadcasting Co., lnc., which is also a CBI member,

02-1220), Harvard lack standing for the Although the Librarian has ruled that IBS and success on the merits of their appeal, and the appeal and therefore have no likelihood of Court has not yet ruled on that Librarian has moved to dismiss the appeal, the Circuit Por the following motion and, accordingly, the Petition for Review is still pending. the motion to reasor.s, the D.C. Circuit should hold that IBS has standing and deny

dismiss. Librarian of Section 802(g} of 17 U.S.C. provides that "any decision of the panel" Congress under subsection (f) with respect to a determination of an arbitration to "may be appealed, by any aggrieved party who would be bound by the determination,

the 'Lnited States Court of Appeals for the District of Columbia Circuit. (emphasis

supplied). Black's Law Dictionary defines "aggrieved party*'s follows;

One whose legal right is invaded by an act complained of, or whose pecuniary interest is directly affected by a decree or judgment. One whose right of property may be established or divested. The word "aggrieved" refers to a substantial grievance, a denial of some personal or property right, or the imposition of a burden or obligation.

Black's Law Dictionary 34 (S ed. 1983). Petitioners'ecuniary interests are directly

affected by the Librarian's Pinal Rule, and their rights as compulsory licensees are

contingent on their ability to pay the royalties set by the Pinal Rule. The Pinal Rule

imposes a burden and obligation on Petitioners to pay fees assessed at the rates chosen by

the Librarian. Accordingly, Petitioners (and all CBI's members) are aggrieved parties.

CSI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/ll/02 FRI 12:15 FAX 6508457494 LIVHS65, INC @019

is correct that FCC licensed Assuming arguendo that the Register of Copyright all the IBS Petitioners, as stations are not exempt from the webcasting royalties, the compulsory license granted by webcasters that have made transmissions pursuant to are entities that are bound by the Librarian's 17 U.S.C. g 112(e) and 17 U.S.C. g 114, they have standing to appeal determination. See 17 U.S.C. g 114(f)(2)(B). Accordingly, not beyond the plain the determination, under Section 802(g). The Court need go

v. United States, 444 U,S. 37 42 language of the statute and, indeed, should not. Perrin unless otherwise defined, (1979) ("A fundamental canon of statutory construction is that, meanixig. words will be interpreted as taking their ordinary, contemporary, common ); statute's United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241-242 (1989) (where

language is plain, the sole function of courts is to enforce it according to its terms).

The Librarian may argue that "aggrieved party" should be construed to mean that

a person seeking judicial review of the Librarian's decision must have participated in the

CARP proceeding. But here, Congress used the phrase "aggrieved paxty" but added the

modi:ying phrase "who would be bound by the determination*'o clarify which aggrieved

parties have standing to seek judicial review. A construction of "aggrieved party" to

mean a party who participated in the CARP proceedings would render that phrase

superfiuous. Every entity that participates in the CARP is bound by it, because all CARP

participants were either copyright owners or copyright users. *'fC]ourts should disfavor

interpretations of statutes that render language superfiuous." Connecticut Nat*I. Bank v.

Gemiain, 503 U.S. 249, 253 (1992) {appellate jurisdiction over certain district court

orders should not be limited by negative implication). Not every party aggrieved by the

Librarian" s Order, however, is "bound by the determination." Accordingly, the phrase

CSI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:15 FAX 6508457494 LIVE365, INC @020

the term aggri'eved part "andis not "bound by the determination" modifies and narrows

superfiuous. is the only phrase m The phrase "who would be bound by the determination" party." Every phrase in a Section 802(g) expressly modifying the phrase "aggrieved not start with the premise that statute must be given effect. Statutory construction does "assume that in drafting statutory language is imprecise. Instead, the Court must U.S. 751, 757 legislation, Congress said what it meant." United States v. LaBonte, 520 sentence authorized for the {1997) ("maximum" in sentencing guideline means maximum 253 offense of conviction.") See iso Connecticut Bat'/. Bank v. Germain, Ibid. at

{"courts must presume that a legislature says in a statute what it means and means in a

statute what it says there"); United States v. Goidenberg, 168 U.S. 95, 102-103 (1897)

{the lawmaker "is presumed to know the meaning of words and the rules of grammar").

If Congress had intended. to limit the right to appeal to parties that participated in

the CARP proceedings, it lmew how to do so. For instance, in the provision immediately

following that on judicial review, Congress provides that "In ratemaking proceedings, the

reasonable costs of the Librarian of Congress and the Copyright Office shall be borne by

the parties to the proceedings as directed by the arbitration panels under subsection (c)."

17 U.S.C. g 802(h)(1). See also 17 USC $ 802 {c) {"...parties to the proceeding shall

bear the entire cost thereof..."); 17 USC $ 114(f)(1){A) ("The parties to each negotiation

proceeding shall bear their own-costs"); and g 114 (f}(2)(A) (same). Congress could

easily have added the same phrase "to the proceeding*'o modify "aggrieved party" in

Section 802(g), but it did not do so. "%here Congress includes particular language in

one section of a statute but omits it in another section of the same Act, it is generally

CSFS STA~NT IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:18 FAX 6503457494 LIVE365, INC @021 J

inclusion or and purposefully in the disparate presumed. that Congress acts intentionally 23 (19S3} (quoting United States v. exclusion." Russello v. United States, 464 U.S. 16, Br+en v. Gardner, 513 U.S,., 115 120 Kong Xim Bo, 472 P.2d 720 (S Cir. 1972)); at 103 (no necessity foI'pplying the same (1994); United States v. Goidenberg, 168 U.S. Instead, Congress used the limitation in one clause that is provided in the other). determination." modifying phrase "who would be bound by the to aggrieved It bears noting that Section 802(g) provides the right of appeal any Court has considered the party who would. be bound by the detcrIninatlon. The Supreme 'any" expansive meaning, term 'any" in other statutes, "Read naturally, the word has an 520 that is, 'one or some indiscriminately of whatever kind." United States v. Gonzales, In the U.S. 1, 5 (1997) (quoting %webster's Third N~ Int'i. DictionarY 97 (1976)).

absence of any language liIniting the breadth of that word," it must be read as referring to

al'1 of the subject that it is describing." N.

At the time it mandates CARP proceedings to set webcasting royalty rates,

Congress realized that the webcasting field was in its infancy. Congress intended to

provide a rIght of appcllatc Icvlcw to partICS, llkc noncoIQIncrclal cducat1onal stat1ons,

that would be unable to paIticipate in the expensive and time-consuming CARP

proceedings but would be bound by the Librarian's determination. Congress likely

predicted that stations might come into existence, or move from terrestrial radio into

webcasting, after the CARP proceedings began. Congress knew that the class of entities

bound. by the determination would be broader than the class of webcasters who could

participate in the CARP process. Congress may well have mtended, by using the phrase

"bouIId by the dcterInination" to provide an opportunity for these very parties to petition

CNI'S STATEMENT IN SVPPORT OF MOTION AN9 MOTION FOR STAY 10/11/02 FRI 12:16 FAX 6503457494 LIVES65, INC

that short, therthere is no reason to think the Court for redress of their grievances. In to entities that participated in the CARP Congress intended to limit the right to petition likely to conclude that the IBS petitioners proceeding. Accordingly, the I3.C. Circuit is to dismiss. have standing and deny the Librarian's motion

COLLEGES AND CBI MKMSER STATIONS OPERATED SY STATE IV. AMENDMENT UNIVERSITIES %VILL PRKVAIL ON ELEVENTH GROUNDS BECAUSE COPYRIGHT ROYALTIES CANNOT CONSTITUTIONALLY SK COI LKCTKD FROM THE STATES. Amendment, from State colleges and universities are immune, under the Eleventh BV suits for money damages in federal court arising under the Copyright Act. See, e.g., Cir'. 1988), Zng'g v. University of California„Los Angeles, 858 F3d 1394, 1395 (9

Citizens may not bring suit against a state or any instrumentality thereof without the

state's consent. See U.S. Const. amend. XI; Hans v. Louisiana, 134 U,S. 1, 15 (1890)

(federal jurisdiction over suits against nonconsenting states was not contemplated by the

Constitution when establishing federal judicial power); Rodrigvez v. Texas Commission

on the Arts, 199 F.3d 279, 280 (5'ir. 2000) (state immune from suit for copyright

infringement). See also Lane v. First Hat'l Bank ofBoston, 871 P.2d 166, 176 (1" Cir.

1989) (states continue to enjoy sovereign immunity in regard to damages for copyright

infrmgement). Congress has no power under Article I to abrogate state sovereign

immunity. Florida Prepaid v. College Savings Bank, 527 U.S. 627, 636 {1999);

Rodriguez v. Texas, 199 F31 at 281. State universities and co1leges are treated like

states themselves for eleventh amendment purposes. See, e.g., Salerno v. CUFF, 191

P.Supp. 352, 355 {S.D.N.Y. 2001) {City University of New York treated as

instrumentality of New York); Jackson v. Hayakawa, 682 P.2d 1344, 1350 {9 Cir. 1982)

CSI'S STATEI~ IN SUPPORT OF MOTION AM) NOTION FOR STAY 10/11/02 FRI 12:16 FAX 6503457494 LIvE365, INc @025

as state of California);"BVEng'g,'58F,2d t University of California has same immunity

1394) (same, in copyright context). in federal Because state institutions are immune from suit for money damages, in suits arising under court for copyright infringement, and state courts lack jurisdiction as to state educational the copyright act, the Librarian's Final Rule will be unenforceable webcasting since institutions that have availed themselves of the compulsory license for the eleventh 1998. Any suit to collect royalty fees from. these schools will be barred by

amenclment. Accordingly, the harm to copyright owners from granting a stay is illusory

with respect to college webcasters that are operated by state institutions. This factor

favors granting a stay the obligation of these schools to pay royalties under the

Librarian's Fmal Rule.

V. NO CBI MEMBER %/ILL SE REQUIRED TQ PAY ROYALTIES IN THE AMOUNTS SPECIFIED IN THE FINAL RULE IF ANY OF THK PENDING APPEALS ARE SUCCESSFUL AND RESULT IN 'lt'ACATUR OF THE FINAL RULE.

CBI agrees with, and incorporates by reference, the arguments in Live365's

Motion for Stay. The rates in the Final Rule violate the First Amendment because they

burden webcasters'peech interest in creating radio programs and stations in a way that

is not even rationally related to Congress's goals of fairly compensating copyright owners

for the compulsory license for the use of the their works. See Live365's Motion at 4-9.

The rates in the Final Rule frustrate Congress's purpose, in providing for a compulsory

license, of encouraging webcasting and other modern ways to bring the pubhc access to a

CBI'8 STA~Nf IN SUPPORT OF MOTION AND MOTION FOR STAY 10 10/11/02 FRI 12:17 FAX 6503457494 LIVES65, INC @024

wide vtuiety of Inusic. See id. at 9-12. The Librarian acted in an arbitrary manner by

setting rates using the RIAA/Yahoo! Agreement as a benchmark, See id. at 12-17. The

Librarian's Pinal Rule also arbitrarily condoned the Panel's ignoring a genuine willing

buyer/wiHing seller license, the NPR/RIAA agreement. See id. at 18-19. Similarly, it

was arbitrary for the Librarian to condone the Pane1's rejection of market rates for

musical works copyright licenses as a benchmark. Seeid. at 20-21. PinaHy, the Final

Rule is arbitrary in setting a minimum fee that punishes small webcasters and is not

supported by the evidence. See id. at 21-23.

CBI also agrees with, and incorporates by reference, the arguments in IBS's

Motion for Stay dated July 30, 2002. The Copyright Office's procedural rulings

excluded participation by an entire class of non-profit webcasters affiHated with

educational institutions. See IBS Motion at 45. The Panel even noted that although the

National Religious Broadcasters'usic License Committee represents some non-CPS

broadcasters, "the record remains virtually barren respecting such broadcasters"

present ing tlm CARP with "an extraordinary challenge." CARP Report at 89. The Panel

could not meet this chaHenge. The failure of the I'ina1 Rule to take into account the smaH

size of such webcasters violates the small business policies of the U.S, government and

fails to differentiate the small entities from larger entities. See id. at S. It is highly likely

that at least one appellant wiH prevail on an argument that will result in the D.C. Circuit

vacating the Final Order. Accordingly, to avoid irreparab1e harm in the interim, a stay

should be granted.

Congress*s dismay at the CARP's ruling is evident from the House's passage of H.R. 5469, the Small Webcaster Arnendrnents Act of 2002 on October 7, 2002. CBI'S STATEMENT JN SUPPORT OF MOTION AND MOTION FOR STAY

11 10/11/02 FRI 12:17 FAX 6505457494 LIVES65, INC @025

VI. THK LIBRARIAN'8 FINAL RULK IS ARBITRARY BECAUSE BIFURCATING THE DKTERMNATIQN GP RATES PROM RKCORDKKKPING REQUIREMENTS WAS A FUNDAMENTAL ERROR.

A decision is arbitrary if it fails to consider entirely an important aspect of the

problem that it was solving. Motor Vehicle Mfrs. Assn. v. State Farm Mutual Ins. Co.,

463 U.S. 29, 43 (1983). Here, because of an arbitrary decision to separately determine

rates and record Keeping requirements, the Panel failed to consider entirely fhe costs of

complying with such requirements in determining the rate a willing buyer and willing

seller would agree to. Under the sound recording performance rate determination

adopted by the Librarian, the amount sound recording royalties will be based on the

number of "performances," which the determination defines as, "each instance in which

aily portion of a sound recording is publicly performed to a listcnci" via a%cb Si'tc

transmission or retransrnission." 67 Fed. Reg. at 45273. But the CARP report cites no

evidence that accurately calculating such instances is feasible—let alone that a willing

buyer would agree to the royalty rate chosen in light of the additional, and often higher,

costs oi'he associated recordkeeping and reporting. It is common sense that a willing

buyer would not agree to any royalty rate if the license came with recordkeeping terms

that were unfeasible or prohibitively expensive.

In fact, webcasters like KXUL can technologically only measure Internet

streaming connections, not listeners. %'ilier Decl. at g 23. For each and every month

spanning the past two years KXUL has experienced one or more streaming sessions

extending for at least 24 hours, andmany of these lasted for days on end. Wilier Decl. at

$24. The record generated by KXUL proves the flaw of any royalty rate tied to

unverifiable "performances" in this new technological frontier. Other webcasters

CBI'S STATIBII~2TT IN SUPPORT OF MOTION AM) MOTION FOR STAY

12 10/11/02 FRI 12:17 FAX 8503457494 LIVE365, INC

presumably suffer from the same phenomenon. Especially for low-volume streaming

services like many college radio stations„ though, just a few such marathon connections

each month — these ciearly are not ~listenin sessions — dramatically and unfairly skew the

"performancess statistics in favor of the copyright owners.

The royalty rates and minimum fees are especiaHy prohibitive in light of the extra

costs that stations also will have to incur to comply with the record keeping requirements.

The cost of complying with these requirements would far exceed the fees themselves at

most college stations. Robedee Decl. at'g 19-20 . Even if there were a technological

solutions it would be prohibitively expensive for college stations to purchase it. Id. at 21.

Even the developing interim requirements are likely to preclude many educational

institutIons from wehcasting. The Copyright Office has indicated that the final record

keeping requirements wiH be more extensive- and therefore more burdensome- than the

interim requirements.

Obviously, this information was not offered to the Panel because CBI and its

members could not afford to participate directly in the CARP proceeding, the

noncommercial broadcaster groups that did participate represent stations with resources

and needs very different from those of most college stations, and the record keeping

rulemaidng was separate. Therein lies the problem. The Panel did not consider any

evidence on the cost or feasibility of the record keeping in making its determination of

royalty rates, nor did the Register or the Librarian recognize the error in failing to

consider this important factor. The resulting inability of many stations to calcu/ate their

actual number of transmission under the compulsory licenses is another reason the

CSIsS STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY I3 10/11/02 FRI 12:18 FAX 6503457494 LIVE865, INC f1 027

Librarian should issue a stay relieving webcasters of the obligation to pay fees on

October 20, 2002.

VII. CGI LKGIATK BROADCASTERS VILL BE JKREPARABLY HARMED ABSENT A STAY

Webcasting has, up until now, been a boon for college broadcasters. KTRU, Rice

University's radio and Internet station, and K2HlL, University of Louisiana's radio and

Internet station, are examples of college stations that have benefited enormously from

webcasting and will be harmed by the Librarian's Order. In addition to giving students a

forum in which to express themselves, as discussed above, they provide means for

students to access a radio station in a traditional setting and to use the technologies

available today in the industry. Students learn many skills by operating a radio station.

%'ebcasting offers students a whole new set of tools to use to reach an audience,

Learning to develop and implement those tools is a great educational experience for the

students. Robedee Decl. at g5. Students must have exposure to the use of new

technologies to gain a thorough understanding of mediated communication. gained as the result of KXUI. radio's Internet presence and the station'sStudents'xperience

streamed audio programming is therefore a vital part of the students'omplete education.

Wilier Peel. at g9.

%ebcasting allows KTRU to better pursue its mission and extend its reach beyond

the local area, to further expose genres and artists to a wider audience. It allows students

to reach many more listeners, and over a much wider geographic area than they can reach

with KTRU's FM signal. Robedee Decl. at $9. Likewise, KXI.H.'s Internet outreach

mates the radio station's programming available to a worldwide audience that would not

otherwise be able to experience the messages communicated by our students. KXUI. has CBPS STATEMENT IN SUPPORT OFMOTION AND MOTION FOR STAY 10/11/02 FRI 12:18 FAX 6503457494 LIVES65, INC Ql 028

received numerous communications from listeners throughout this country„and has

logged listening sessions from 53 nations outside of the United States. Wilier Decl. at $9.

KXUL views the use of digital technology to retransmit the. programming of non-

commercial radio stations as a natural extension of these stations'istorical service.

Noncommercial educational radio stations traditionally strive to program to otherwise

underserved audiences with content not typically provided by their commercial

counterparts. The further distribution of educational and cultural programming via the

Internet allows noncommercial radio stations to effectively extend their public service to

a geographically diverse audience. The Internet removes the physical boundaries

imposed by an educational radio station's terrestrial radio frequency transmission,

allowing a greater audience to experience each noncommercial station's programming.

The Internet began, in part, to support education; the continuing use of the Internet by

noncommercial educational radio stations respects that tradition. %filler Decl. at $10.

For some schools, webcasting is the only viable way to reach an audience of any

size, due to limited broadcast spectrum or fiscal constraints. For a new station, start-up

(non-royalty) costs for other means of transmitting are much higher than those for

webcasting. Low power FM, cable ~V, legal and unlicensed AM, and cafeteria

public address broadcast systems all have extremely limited audience potential, a

problem solved perfectly by webcasting. Robedee Decl. at Q5. These schools are

especi:dly ill-served by the Final Rule because, as non FCC- licensed webcasters, they

cannot meet the definition for noncommercial, non-CPB broadcasters and must pay the

commercial rate! %'ebcasting also allows for a second station where, for example, a

CBI'S S'rATEMENT IN SUPPORT OI MOTION AND MOTION FOR STAY

15 10/11/02 FRI 12:19 FAX 8503457494 LIVE385, INC @029

college wants to have both an NPR station and a student station, or where a college lacks

the resources or the spectrum for a second FM station. Robedee Decl. at $6.

Most CBI member college radio stations, unlike many religious noncommercial

stations and unlike public radio stations funded. by CPB, have to pay their operating costs

from student fees or from their meager academic budgets. Robedee Decl. at Q3; Wilier

Decl. at /5. According to Intercollegiate Broadcast System {"IBS") surveys, the average

college station budget is about $9,000. Id. Historically, noncommercial radio stations

have always paid copyright royalties to the perfoamngrights organizations in the form of

a reasonable fiat fee, while commercial stations have paid on a percentage of revenue

basis. This has enabled college stations to operate on fixed budgets and avoided

penalizing them if they succeed in reaching a wider audience. Robedee Decl. at $15.

KTRU can afford to pay the back royalties due October 20. But going forward, KTRU

may not be able to pay both the royalties, especially as its audience increases. KTRU's

audience has been doubling every ten months, as more people get high speed Internet

connections and listeners discover KTRU through "surfing" and promotion. Robedee

Decl. at $18. The fees, combined with the reporthg requirements, are also likely to force

IUQ3L to cease its Internet service. Wilier Decl. at %26.

As discussed above, college broadcast are particularly harmed by the

Librarian's decision to set a mmimum fee of $500 even for noncommercial webcasters,

As a result of the minimum fees, most low-volume college webcasters will be paying per-

pcrfomance royalties much higher than commercial entities. Wilier Decl. at +[20-22.

For example, the University ofLouisiana at Monroe operates a radio station, KXUL

KXUL's nominal royalty for the 2001 calendar year, the station's peak listening period,

CSI'S STATEMENT IN SUPPORT OF MOTIONANDMOTION FOR STAY 10/11/02 FRI 12:19 FAX $503457494 LIVE3$5. INC @030

the minimum fee, the station totals $105.78. Because KXUL will be required to disburse 0.09381&, or 469% of the nominal will pay an effective per-performance rate for 2001 of

noncommercial rate and 134% of the nominal commercial rate. October 20, Unless the copyright office grants necessary and.justified belief, on performances 2002 college radio station KXUL will have to make payments for aO past the bebveen October 28, 1998 snd August 31, 2002. Vfiller Decl. At $22. Because of

effect of the minimum fee, the amount of that payment will evidently have to be the period $2,500.00, although KlG3L's performance and ephemeral copy royalties for

total only $214.86. Id.

William Robedee staxted the Save Our Streams grassroots campaign and set up a

website at wwwzice.edu/cb/sos in order to track the issue of the new webcasting

reguhitions, royalties and fees being promulgated under the DMCA and also to track the

resulting impact on college radio stations. He received about 1400 e-mails in support of

CBI's position payer, a small sample of which are provided for the Librarian's

consideration. Robedee Decl. at $ 26 and Exh. B. The impact of CARP report and the

Librarian's order has already been devastating. Robedee has personally confirmed that

70 stations have already stopped webcasting, and has heard from credible sources that

many more have also stopped, Robedee Decl. at @[23-24 existing casualties). Some of

the most severely harmed college stations are those for which webcasting is the only

means of broadcasting" such as UCLA-Radio, which has stopped streaming as result of

the Librarian's Order. Students at UCLA are losing their forum for iree expression and

the opportunities offered by an educational station each snd every day. IfUCLA-Radio

is to explore other means of reaching an audience, it will expend considerable time, effort

CBI'S STATJ@tmm'N SUPPORT OP MOTION AND MOTION FOR STAY 10/11/02 FRI 12:20 FAX 6503457494 LIVE865, INC IIO. P. 3 OCT, 11. 2002 30:42III4 8TANFOROLAISGIIOOL 064

Dated: October 11, 2002 RespmtfMy Submitted, COLLEGIATE BROADCASTERS„ INC.

By: Rl'th H. Rader Stanford La% School Center for Internet k Society 559 Nake AbbottWay Stanford, CA 94305-8610 (650) 724-0517

CBPS STATEMENT IN 5UPPQRT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:20 FAX 6503457494 LIVES65, INC

TABLE OI'ONTENTS'age

TABLE OF AUTHORITIES .

I. INTRODUCTION.

H. THE LIBRAI IMt CAN AND SHOULD GRANT A STAY FOR ALL PARTIES BOUND BY THE DETEPJvtlNATION, TO PRESERVE THE STATUS QUO PENDING APPEAL.

III. CBI MEMBERS HAVE STANDING TO SEEK A STAY FROM THE LIBRARIAN BECAUSE CBI MEMBERS, WHO ARE BOUND BY 17K DETERMINATION, ~ DIRECTLY 8~IT IF ANY OF TI-:IREE APPEALS PENDING IS SUCCESSFUL .

A. CBI Members Webcasting on the Live365 Internet Radio Network Participated, Through Live365, In The CARP Proceeding and Their Interests Will Be Vindicated if Live365's Appeal is Successful ......

8, CBI Members%ho Are FCC Licensed Tenestriai Broadcasters Will Have Their Interests Vindicated If The National Association Of Broadcasters'ppeal Is Successful

C. CBI Members Who Are Non-Pro6t Webcasters Affiliated With Educational Institutions Will Have Their Interests Vindicated if InterCollegiate Broadcasters'ppeal is Successful......

IV. CBI MEMBER STATIONS OPERATED BY STATE COLLEGES AND UNIVERSITIES WILL PREVAIL ON ELEVENTH AMENDMENT GROUNDS BECAUSE COPYRIGHT ROYALTIES CANNOT CONSTITUTIONALLY BE COLLECTED FROM THE STATES...., ...., ....

V. NO CBI MEMBER WILL BE REQUIRED TO PAY ROYALTIES IN THE AMOUNTS SPECIFIED IN THE FINAL RULE IF ANY OF THE PEM3ING APPEALS ARE SUCCESSFUL AND RESULT IN VACATUR OF THE FINAL RULE.

VI. THE LlBIVQGAN'S FINAL RULE IS ARBITRARY BECAUSE BIFURCATING THE DETERMINATION OF RATES PROM RECORD~ING REQUIREMENTS WAS A FUNDAMENTAL ERROR,...... 12 10/11/02 FRI 12:20 FAX 6503457404 LIV8365, INC Ql 034

TABLE GP COXIXNTS, comtiaued

COLLEGIATE BROADCASTERS WILL BE IRREPARABLY VH. 14 HAlVMED ABSENT A STAY

VIII. CONCLUSION. 10/11/02 FRI 12:21 FAX 6503457494 LIVE365, INC

TABLE OP AUTHORITIES

Page

CASKS'onne»ille et al'. Peters, Case No. 01-3720 (3d Cir,).

Brown v. Gardner, 513 U.S. 115 (1994). CiL 1988) ... BV Zng'g v. University ofCalifornia, Los Angeles, 858 F,3d 1394 (9 .6 Connecticut Nat'l, Bank v. Germain, 503 U.S. 249 (1992)

Cuomo v. U.S. Nuclear Reg. Comm'n., 772 F.2d 972 (D.C. Cir. 1985) .

Florida Prepaid v. College Savings Bank, 527 U.S. 627 (1999).

Hans v. Louisiana, 134 U.S. 1 {1890) ..

Jackson v. Hayakawa, 682 F.21 1344 (9 Cir. 1982)

Lane». First ¹t'l Bank ofBoston, 871 F.2d 166 (1 Cir. 1989)...... 12 Motor Vehicle MPs. Assn. v. State Farm Mutual Ins. Co., 463 U.S. 29 (1983) ....

Perrin v. United States, 444 U,S, 37 (1979)

Rodriguez v. Texas Commission, on the Arts, 199 F.3d 279 (5 Cir. 2000).

Russetlo v. United States, 464 U.S. 16 (1983) ...... ,.

Sale+to v, CUM'., 191 F.supp. 352, {S.D.N.Y. 2001}

United States v. Goldenberg, 168 U.S. 95 (1897). 7,8

United States v. Gonzales, 520 U.S. 1 (1997)

United States v. LaBonte, 520 U.S. 751{1997) .

United States v. Ron Pair Enters., Inc., 489 U.S. 235 {1989).

Washington Metro Area Transit Comm'n. v. Holiday Tours, Inc. 559 F.2d 841 (D.C. Cir. 1977).. 10/11/02 FRI 12:21 FAX 6503457494 LII365, INC @)036

TABLE OP AUTHOITIES, conSmueti

STATOI8

VnI'ted States Constitution 9 Amendment XI......

17 V.XC. 101, et seq., "The Copynght Act" 6 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ .. ~ ...... Section 112(e) .... ~ . ~ .. ~ ...... ~ ...... ,.

~ ~ eases ~ ~ ~ ~ ~ ~ Section I 14(d){1){A) o ~ ~ ~ ~ ~ o oe ~ ~ ~ ooo ~ aoaooooao ~ oo ~ ~ ossa ~ oaososoo ~ ~ ossa ~ ~ ~ oooooa asses* Section 14(f)(1)(A) ~ ~ ~ asosoooo

~ ~ ~ 7 Section 114 (f){2)(A). ~ ~ ~ .6 ~ ~ oso ~ oo ~ o ~ o eo Section 1 14(f){2)(B) o ~ ~ ~ ~ soaoo ~ sos ~ $ $$ oooo ~ oe ~ o ~ oa ~ sosss ~ ~ ~ 0$0 7 Section &02(c) ... ~ oe ~ Section 802(g) ..... 5,6,7,8 Section 802(h)(1). ~, 7

JKGULkTIOM

Librarian's Hnal Rule and Order, 67 PecL Reg. 45240 (July 8, 2002) ...... passim

OTHELLO A.VTHOMTIESAND JfEPSRENCES

Black.'s Law Dictionary 34 (5 ed. 1983). ~ aoo ~ 0$$ ~ ~ a ~ a ~ s ~ oo ~ ss ~ o ~ 5

H.R. 5469, "Small%ebcaster Amendments Act of 2002" (October 7, 2002)...... ,... 11

lFebsites:

KSBR PM Website, http://wvnv3csbr.net ~ ~ $ $$ ~ s ~ ~ o ~ s ~ ~ 3

KTSVf 89.9 Website, http:/twvnv.idee.net. ~ ~ $ $$ $$ $$ $$$ ~ oooo ~ o ~ $ $ $ assess ~ sssasso 3

KXLU 88.9 FM Vfebsite, http://www.kxlu.comas 3 10/11/02 FRI 12:21 FAX 6503457494 LIVE565, INC

PROOF OF SERVICE

I, Joanne Newman do hereby certify and declare as follows:

I am over the age of 18 years, and not a party to the instant proceedings. I

am employed in the county of Santa Clara, California. My business address is:

559 Nathan Abbott Way, Stanford, California.

On October 11, 2002 I caused to be served the following document:

COLLKGIATK SRQADCASTKRS'TATEMENT IN SUPPORT OF MOTION OF LIVK365 AND SEPARATE MOTION FOR STAY PKNDING APPEAL

via Federal Express by placing one true copy of the above document in a

properly sealed and addressed envelope for overnight delivery, and deposited in a

station mailbox routinely maintained by Federal Express. Service is made on the

fol lowing interested parties:

Arthur Levine Robert Alan Garrett Finnegan, Henderson, Farabow Ronald A. Schechter Garrett k. Dunner Arnold. & Porter 1300 I Street, N.W. 555 Twelfth Street, N.W. Washington, DC 20005 Washington, DC 20004

Patricia Polach Cary H. Sherman Bredhoff & Kaiser Steven M. Marks 805 Fifteenth Street„N.W.. Recording Industry Suite 1000 Association of America Washington, DC 20005 1330 Connecticut Ave., N.W. Suite 330 Washington, D.C. 20036

Bruce G. Joseph Barry I. Slotnick Wiley, Rein & Fielding Loeb & Loeb 1776 K Street, N.W. 345 Park Avenue W mhington, D.C. 20906 New York, NY 10154 10/11/02 FRI 12:22 FAX 65034574S4 LIV8865, INC U~i. ii. zvuz it.vuzw SIRNFOROLANSGHOOL NO.065 P. 2

Adam I. Cohen W'eiJ, Gotskai 6, Mantes 767 Fifth Avenue New VorL, NY $ 0153

Sandra M. Aistars Cynthia Gteer Weil, Gotsha1 N Mangos Shaw Htkman 1501 K Stteet.N.Vf. 23GO N Street, N.%'. %'ashington, DC 20Q05 %'asbington, D.C. 20937-I 128

I decIBxe Qndcr the peNQty p@QQr'JJ of that ke foregoing 38 trne encl correct, Executed this 11th day of October 2002 at Stanford Ca1ifcgzd 12:09 FAX 6503457494 LIVE365, INC 10/11/02r FRI

Rt=CK'PRtoO Before the OFFICE OCT 1 I 2002 UNITED STATES COPYRIGHT LIBRARY OF CONGRESS DC GENERAl COUNSEL Washington, QF CQPYRlGHT

) In the Matter of: ) 2000-9 CARP DTRA Reasonable Rates ) Docket No, Determination of DTRA 1k2 and Terms 'For the Digital Performance ) Of Sound Recordings and ) Creation of Ephemeral Phonorecords. )

COLLEGIATE BROADCASTERS'TATEMENT IN SUPPORT OF MOTION OF LIVK365 AND SEPARATE MGTION FOR STAY PENDING APPKAL

Elizabeth H. Rader, DC Bar No. 444851 CENTER FOR INTERNET Ec SOCIETY Stanford. Law School Crown Quadrangle 559 Nathan Abbott %'ay Stanford, California 94305-8610 Telephone: (650) 724-0517 Facsimile: (650) 723-4426 QJ 014 10/11/02 FRI 12:09 FAX 6503457494 LIVE365, INC

I. INTRODUCTION of abbout 100 ("CBI"} is a nonprofit organization Collegiate Broadcasters Inc.. CBI submits this television and Internet broadcasters. members who are collegeradio, Librarian's Final Live365.cornom for a stay of the statement in support of the motion of statutory 45240 (July 8, 2002), requiring Rulc and Order ("Final Rule"}, 67 Fed. Reg. on October on stated rates and minimnimum fees, licensees to make royalty payments, based moves, on behalf of its members, for a. monthly thereafter. CBI additionally 20 1 2002 and and nonprofit webcasting done by colleges stay of the Pinal Rule with respect to educational benefits of webcasting for univet sities, to preserve the status quo and the

students, pending appeal.

FOR ALL LlBRARIAN CAN AND SHOULD GRANT A STAY ..II. THE PRESERVE THE PARTIES SOUND SV THE DETERMINATION, TO STATUS QUO PENOING APPEAL a stay of the Order Pour factors bear on whether the Librarian should grant seeking the stay will prevail on pending appeal: they are 1) the likelihood that the party will be irreparably the merits of the appeal; 2) the likelihood that the moving party harmed if the court pants the harmed abserit a stay; 3) the prospect that others will be %hile CBI's member stations have stay; and 4) the public interest in granting the stay. CBI need only show that a high probability of prevailing on various pending appeals, merits. Cuomo v. U.S. Nuclear they have more than a mere possibility of success on the A moving party need not show that Reg. Comm'rt., 772 P.2d 972, 974 (D.C. Cix. 1985).

License, Docket No. 96-3 CARP Order, Adjustment of Rates for the Satellite Carrier Compulsory 'ee M2 (August 8, 2002) at 2. (Denying (November 14, 1997), Order Docket No. 2000-9 CARP DTRA SRA, Radio Broadcasting Company, Inc.) Motion of Intercollegiate Broadcasting System Inc. and Harvard

CSI'S STATENEW IN SUPPORT OF MOTION LWD MOTION FOR STAY 10/11/02 FRI 12:09 FAX 6508457494 LIVE365, INC

strong. The the showing on otherther ffactors is it has a high probability of success, if harm and the public will suffer irreparable overwhelming evidence that third parties owners will s ~er~ little', if an, harm a stay. Copyright ', absent a stay also favors granting not suffer harm from the stay because from the stay. Artists, in particular, will immediately following October 20 anyway. SoundExchange has no plans to pay them the distribute statutory royalties" until after SoundExchange "is unlikely to attempt to See Comments of Soun~&x~&xchange filed adoption of final record keeping regulations,

September 30, 3002 in Docket No. RM 2002-18. pending a final determination The purpose of a stay is to preserve the status quo Transit Comm'n. v. Holiday Tours, of the merits of an appeal. Washington j/Ietro Area has not appealed, its college station Inc. 559 E2d 841 (D.C, Cir. 1977). While CBI itself which, if successful, members are represented m multiple pending appeals, any one of the obligation to pay will have the effect of relieving most CBI member stations of Live365's motion„among the royalties at the rates set in the Final Rule. As shown m webcasters that were factors strongly favoring granting the stay are irreparable harm to irreparable harm unable to participate in the CARP, such as most educational webcasters, harm to the public, to other third parties that directly benefit from webcasting, and indeed most grievously if a stay is not granted. College webcasters are perhaps the webcasters for profit and have harmed by the rates in the Final Rule, because they do not operate stations extremely limited budgets and revenues, and because webcasting offers college otherwise do. the ability to do much more with these limited resources than they could to all Accordingly, a stay, to preserve the status quo and avoid these harms, must apply

entities subject to the Librarian's Final Rule, and certainly to college webcasters.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY @016 10/11/02 FRI 12:10 FAX 6503457494 LIVE365, INC

STAY FROM THE HAVE STAÃDING TO SEEK A IIL CSI MEMBERS ARE BOUND BV THE BECAUSE CBI MEMBERS,%HO LIBRARIAN SENEFIT IF ANY OF TmSSE OETrmmjINATION, emu. DIRECTLY APPEALS PIQ&lING IS SUCCESSFUL Network on the Live365 Internet Radio A. CBI Members Webcasting anil Their Through Live365, In The CARP Proceeding Participated, is SncccssfuL Interests%in Be Vindicated à Live365's Appeal Live365 is a network that offers webcasting As explained in Live365's Motion, Declaration broadcasters. See Live365 Motion at 5; services to thousands of individual CBI members KSBR, KTS% AND of John Jeffrey at $ 3. These include, for example, their broadcast programming. KSBR KXLU, which are college FM stations webcasting station, run by broadcasting students is a connnnnity service broadcast and Internet radio See htto//www.ksbr.net. KXLU at Saddleback College in Mssion Viejo, California. Marymount University in Los 88.9 FM is a student-run station broadcasting fromLoyola KTSW FM 89.9, 'The Angeles, California since 1957. See httol/www.kxlu.corn. Texas University, in San Other Side of Radio." is the student radio station of Southwest each of these Marcos, Texas. See www.ktsw.net. Vfebcastmg allows students at business member educational stations to reach a worldwide audience. Live365 is, itself, a

of CBI. has standing to As discussed in Live365's brief, it is undisputed that Live365 members, such as KSBR, KTSW appeal, representing the mterests of its Internet network on to the same and KXLU. These CBI members, accordingly, are likely to prevail appeal to seek a stay extent as Live365. Therefore, they, and by extension CBI, have standing

fmm the Librarian.

CBI'S STATEMENT IN SUPPORT OF MOTION ANO MOTION FOR STAY 10/ll/'02 FRI 12:14 FAX 6503457494 LIVE365, INC J

Terrestrial Broadcasters Will Members%ho Are FCC Licensed B. CBI If The National Association Of Have Their Interests Vindicated Broadcasters'ppeal Is SuccessfuL ("NAB")'s Motion for a Association of Broadcasters As discussed in the National pending filed September 11, 2002, an appeal Stay of the Register of Copyrights'ecision PCC-licensed will determine whether an in the Third Circuit Court of Appeals of its digital transmission over the Internet broadcaster's simultaneous, nonsubscription, of the Copyright Act (17 ~M broadcast signal is exempt under Section 114(d)(1)(A) sound. recording performance right provided U.S.C. 101 et seq., from the limited digital the v. Peters, Case o. 01-3720 {3d. Cir.). If by Section 106(6). See Bonnevi He et a3 members that are educational FCC- Bonneville appellants prevail on appeal, all the CBI royalties entirely. The NAB is a licensed broadcasters will be exempt from webcasting NAB's Motion at 3 n.l. Some of CBI's college party to the Bonneville appeal, Id.; see disputed that NAB has standing station members are also members of NAB. No one has CBI members who are NAB to appeal, representing the interests of its members, the same extent as the NAB. members, accordingly, are likely to prevail on appeal to this motion scelang a stay Therefore, they, and by extension CBI, have standing to make

from the Copyright Of6ce or Librarian,

AfNiated %1th C. CSI Members Who Are Non-Profit %ebcasters Kducatioual Iastitutions %ill Have Their Interests Vindicated if InterCollegiate Broadcasters'ppeal is Successful. Association of CBI's membership overlaps or intersects with that of the National other industry Broadcasters (NAB) and Intercollegiate Broadcast Systems, among with Harvard Radio groups. On 3uly 8, 2002, IBS filed a Petition for Review, along

STAY CBI'S STATEIVIENT IN SUPPORT OF MOTION AMP MOTION FOR 10/11/02 FRI 12:14 FAX 6503457494 LIVH365, INC

No. member, in the D.C. Circuit. (Docket Broadcasting Co., Inc., which is also a CBI

02-1220), and. Harvard lack standing for the Although the Librarian has ruled that IBS and the of success on the merits of their'pea al, appeal and therefore have no likelihood Circuit Court has not yet ruled on that Librarian has moved to dismiss the appeal, the still pending. For the following motion and, accordingly, the Petition for Review is and deny the motion to reasons, the D.C. Circuit should hold that IBS has standing

dismiss. decision of the Librarian of Section 802(g) of 17 U.S.C. provides that "any

5S an arbitration panel Congj.ess under subsection (f) with respect to a determination of the determination, to "may be appealed, by any aggrieved party who would be bound by (emphasis the United States Court of Appeals for the District of Columbia Circuit.

supplied). Blacks Law Dictionary defines "aggrieved party" as follows;

One whose legal right is invaded by an act complained of, or whose pecuniary interest is directly affected by a decree or judgment. One whose right of property may be established or divested. The word "aggrieved" refers to a substantial grievance, a denial of some personal or property right, or the imposition of a burden or obligation.

Black's Law Dictionary 34 (5 ed. 1983). Petitioners'ecuniary interests are directly

affected by the Librarian's Hnal Rule, and their rights as compulsory licensees are

contingent on their ability to pay the royalties set by the I'inal Rule. The Final Rule

imposes a burden and obLigation on Petitioners to pay fees assessed at the rates chosen by

the Librarian. Accordingly, Petitioners (and all CBI's m.embers) are aggrieved parties.

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY @019 10/11/02 FRI 12:15 FAX 6503457494 LIVE365, INC

licensed, of Copyright is correct that FCC Assuming, argaendo, that the Register Petitioners, as webcasting royalties, all the IBS stations sre not exempt from the granted by pursuant to the compulsory license webcasters that have made transmissions the Librarian's 114, are entities that are bound by 17 U.S.C. $ 112(e) aud 17 U.S.C. g Accordingly, they have standing to appeal determination. See 17 U.S.C. g 114(f)(2)(B). The Court need not go beyond the plain the detenniiudiou, under Section 802(g). 42 not. Perrin v. United States, 444 U.S. 37, language of the statute and, indeed, should construction is that, unless otherwise defined, (1979} ("A fundamental canon of statutory contemporary, common meaning."); words will be interpreted as taking their ordinary, 241-242 (1989) (where statute's United States v, Ron Pair Enters., Inc., 489 U.S. 235, enforce it according to its terms). language is plain, the sole function of courts is to construed to mean that The Librarian may argue that "aggneved party" should. be must have participated in the a person seeking judicial review of the Librarian's decision party" but added the CARP proceeding. But here, Congress used the phrase "aggrieved to clarify which aggrieved modifying phrase "who would be bound by the determination" "aggrieved party" to parties have standing to seekjudicial review. A constxuction of that phrase mean a party who participated in the CARP proceedings would render because all CARP superfluous. Every entity that participates in the CARP is bound by it, should disfavor participants were either copyright owners or copyright users. "tC]ouxts Bunk v. interpretations of statutes that render language superfiuous." Connecticut¹t'I. district court Germain, 503 U.S. 249, 253 (1992) (appellate jurisdiction over certain the orders should not be limited by negative implication). Not every party aggrieved by

ubrarian's Order, however, is "boundby the deterinination." Accordingly, the phrase

CIPS STATIC!Ãf IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:15 FAX 6503457494 LIVE385, INC g 020

and is liot narrows the term aggrieved party" "bound by the determination" modifies and

superfluous. determination" is the only phrase in The phrase "who would. be bound by the "aggrieved party." Every phrase in a Section 802{g) expressly modifying the phrase does not start with the premise that statute must be given effect. Statutory construction must "assume that in drafting statutory language is imprecise. Instead, the Court

7V LaBonte, 5202 US. 751 757 legislation, Congress said what it meant. United States v. maximum sentence aufhorizefhorized for the (1997) {"maximum" in sentencing gnidelme means Gerlnain,.rl'Mn rI'k at 253 offense of conviction.") See also Connecticut Sat L Bank v. and means in a ("couTts must presume that a legislature says in a statute what it means 102-103 (1897) statute what it says there"); United States v. Goldenberg, 168 U.S. 95, rules of grammar"). {the lawmaker "is presumed to know the meaning of words and the in If Congress had intended to limit the right to appeal to parties that participated

the CARP proceedings, it knew how to do so. For instance, in the provision immediately the following that on judicial review, Congress provides that "In ratemaking proceedings,

reasonab]e costs of the Librarian of Congress and the Copyright Office shall be borne by (c)." the parties to the proceedings as directed by the arbitration panels under subsection shall 17 U.S.C. g 802(h)(1) See also 17 USC g 802 (c) ("...parties to the proceeding (" negotiation bear the entire cost thereof..."); 17 USC $ 114(f)(1)(A) The parties to each

proceeding shall bear their own.costs"); and g 114 (f)(2){A) (same). Congress could

easily have added the same phrase "to the proceeding" to modify '"aggrieved party" in

Section 802{g), but it did not do so. "%bere Congress includes particular language in

one section of a statute but omits it in another section of the same Act, it is generally

CSI'S STAIMENI'N SUPPORT OF MOTION AND MOTION FOR STAY g 021 10/11/02 FRI 12;16 FAx 6503457494 LIVES65, INC J

the disparate inclusion or intentionally and purposesefully iin presumed that Congress acts United States v. 464 U.S. 16, 23 (1983) {quoting exclusion." RusseOo v. United States, 51351 U.S, 115, 120 Cir. 3.972))', Bremen v. Gardner,dner Kong Xim Bo, 472 P.2d 720 (5 for applying the same 168 U.S. at 103 (no necessity (1994); United States v. Goldenberg, used the in the other),), Instead, Congress limitation in one clause that is provided the determination." modifying phrase "who would be bound by the right of appeal to any aggrieved It bears noting that Section 802(g) provides consideredered the determination. The Suyreme Court has patty who would be bound by the the word 'any'as an expansive meamng, term 'any"'n other statutes "Read naturally 520 whatever kind." United States v. Gonzales, that is 'one or some indiscriminately of

"s lnt'i 8'ictionary 97 (1976)). In the U.S. 1, 5 (1997) (quoting l4'ebster Third Nqe to word," &t must be read as refemng absence of any language linnttng the breadth of that

all of the subject that it is describing." M royalty rates, At the time it mandates CARP proceedings to set webcasting infancy, Congress intended to Congress realized that the webcasting field was in its noncommercial educational stations, provide a right of appellate review to parties, like time-consuming CARP that would be unable to participate in the exyensive and determination. Congress likely proceedings but wouM be boundby the Librarian's from terrestrial radio into predicted that stations might come into existence, or move knew that the class of entities webcasting, after the CARP proceedings began. Congress the class of webcasters who could bound by the determination would be broader than intended, using the phrase participate in the CARP process. Congress may well have by these very yarlies to petition "bound by the determination" to provide an opportumty for

FOR STAY CSI'S STATEMENT IN SUPPORT OP MOTION A%9 MOTION @1022 I,O/11/02 FRI 12:18 FAX 8505457494 LIVHS65, INC

reason to think that grievances. In short, there is no the Court for redress oftheir participated in the CARP to petition to entities that Congress intended. to limit the right the IBS petitioners Circuit is likely to conclude that proceeding. Accordingly, the D.C. Librarian's motion to dismiss. have standing and, deny the

AND OPRRATED SV STATE COLLEGES IV. CSI MEMBER STATIONS PREVAIL ON ELEVENTH AMENDMENT UNAVRSITm8%1LL CANNOT BECAUSE COPVRIGHT ROVALTIRS GROUNDS FROM THE STATES. CONSTITUTIONALLV BE COI LECTKD under the Eleventh Amendment, from State colleges and universities are immune, under the Copyright Act. See, e.g., BV suits for money damages in federal court arising 858 F.3d 1394, 1395 (9 Cir. 1988). Eng'g v. University of California, Los Angeles, instrumentality thereof without the Citizens may not bring suit against a state or any 134 U.S. 1, 15 (1890) state's consent. See U.S. Const. amend. XI; Hans v. Louisiana, states was not contemplated by the {federal jurisdiction over suits against nonconsenting v. Texas Conut&sion Constitution when estiblishing f~ judicial yower); Rodriguez immune from suit for copyright on the Arts, 199 F.3d 279, 280 (5 Cir. 2000) (state 871 F.2d 166, 176 (1" Cir. infringement). See also Lane v. FirstHat'l Bank ofBoston, regard to damages for copyright 1989) (states continue to enjoy sovereign immunity in abrogate state sovereign infringement). Congress has no power under Article I to U.S. 627, 636 (1999); imnnmity. Florida Prepmd v. College Savings Bank, 527 snd colleges are treated like Rodriguez v. Texas, 199 F,3d at 281. State universities Salerno v. CUFF, 191 states themselves for eleventh amendment yurposes. See, e.g., York treated as F.Supp. 352, 355 (833.N.Y. 2001) (City University of New 1350 Cir. 1982) instrumentality of New York); Jackson v. Hayakawa, 682 F.2d 1344, (9

FOR STAY CBPS STATFMF2IT IN SUPPORT OF MOTION%M) MOTION j.0/11/02 FRI 12:16 FAX 6503457494 LIYH365, INC @023

858 E2d (University of California has saxne immunity as state of California); BVEng'g,

1394} (same, in copyright context).

Because state institutions are immune from suit for money damages, in federal under court f or copyright infringement, and state courts lack jurisdiction in suits arising

the copyright act, the Librarian's Final Rule will be unenforceable as to state educational

institutions that have availed themselves of the compulsory license for webcasting since

1998. Any suit to collect royalty fees from these schools will be barred by the eleventh

amenchnent. Accordingly, the harm to copyright owners from granting a stay is illusory

with respect to college webcasters that are operated by state institutions. This factor

favors granting a stay the obligation of these schools to pay royalties under the

Librarian's Final Rule.

V. NO CBI MEMBER%ILL BE REQUIRED TO PAY ROYALTIES IN THK AMOUNTS SPECIFIED IN THE FINAL RULE IF ANT OF THK PKNDIWG APPEALS ARE SUCCESSFUL AND RESULT IN VACATUR OF THE FINAL RULE.

CBI agrees with, and incorporates by reference, the arguments in Live365's

Motion for Stay. The rates in the Final Rule violate the First Amendment because they

burden webcasters'peech interest in creating radio programs and stations in a way that

is not even rationally related to Congress's goals of fairly compensating copyright owners

for the compulsory license for the use of the their works. See Live365's Motion at 4-9.

The rates in the Final Rule frustrate Congress's purpose, in providing for a compulsory

license, of encouraging webcasting and other modern ways to bring the public access to a

CBI'S STATRMEWT IN SUPPORT OF MOTION AND MOTION FOR STAY

10 10/11/02 FRI 12:17 FAX 6503457494 LIVE365, INC

wide variety of music. See id. at 9-12.. The Librarian actedin an arbitrary manner by

setting rates using the RIAA/Yahoo! Agreement as a benchmark, See id. at 12-17. The

Librarian's 'Final Rule also arbitrarily condoned the Panel's ignoring a genuine willing

buyer/willing sellei'icense, thc NPR/RIAA agreement. See id. at 18-19. Similarly, it

was arbitrary for the Librarian to condone the Panel's rejection of market rates for

musical works copyright licenses as a benchmark. Seeid. at 20-21. Hnally, the Final

Rule is arbitrary in setting a minimum fee that punishes small webcasters and is not

supported by the evidence. See td. at 21-23.

CBI also agrees with, and incorporates by reference, the arguments in IBS's

Motion for Stay dated July 30, 2002. The Copyright Office's procedural rulings

excluded participation by an entire class of non-profit webcasters affiliated with

educational institutions. See IBS Motion at 45. The Panel even noted that although the

Nation ti Religious Broadcasters'usic License Comnnttee represents some non-CPS

broadcasters, "the record remains virtually barren respecting such broadcasters"

presenting the CARP with "an extraordinary challenge.*'ARP Report at 89. The Panel

could rtot meet this challenge. The failure of the Final Rule to take into account the small

size of such webcasters violates the small business policies of the U.S, government and

fails to differentiate the small entities from larger entities. See id. at 5. It is highly likely

that at least one appellant will prevail on an argument that will result in the D.C. Circuit

vacating the Final Order. Accordingly, to avoid. irreparable harm in the interim, a stay

should be granted.

Congress's dismay at the CARP's ruling is evident from the House's passage of H.R. 5469, the Small Webcaster Amendments Act of 2002 on October 7, 2002. CBI'8 STATEMBÃl'N SUPPORT OF MOTION AND MOTION FOR STAY

11 025 10/11/02 FRI 12:17 FAX 6503457494 LIVH365, INC QJ

BECAUSE VI. THE LIBRARIAN'S FINAL RULE IS ARBITRARY SIFURCATINC THK DETERMINATION OF RATES FROM RKCORDKEKPING REQUIREMENTS %AS A FUNDAMENTAL ERROR. of the A decision is arbitrary if it fails to consider entirely an important aspect Mutual Ins. Co., problem that it was solving. Motor Vehicle Mfrs. Assn. v, State Farm determine 463 U.S. 29, 43 (1983). Here, because of an arbitrary decision to separately costs of rates and record. keeping requirements, the Panel failed to consider entirely the willing complying with such requirements in determining the rate a willing buyer and

seller would agree to. Under the sound recording performance rate determination based on the adopted by the Librarian, the amount sound recording royalties will be

number of "performances," which the determination defines as, "each instance in which Site any pmtion of a sound recording is publicly performed to a hstener via a%eh

transmission or retransrnission." 67 Fed. Reg. at 45273. But the CARP report cites no

evidence that accurately calculating such instances is feasible—let alone that a willing

buyer would agree to the royalty rate chosen in light of the additional, and often higher,

costs oi'he associated recordkeeping and reporting. It is common sense that a willing

buyer would not agree to any royalty rate if the license came with recordkeeping terms

that were unfeasible or prohibitively ex~ensjve,

In fact, webcasters like KXUL can technologically only measure Internet

streaming connections, not listeners. %'ilier Decl. at $ 23. For each and every month

spanning the past two years KXUL has experienced one or more streaming sessions %'ilier extench ng for at least 24 hours, and many of these lasted. for days on end. Decl. at

$24. The record generated by KXUL proves the flaw of any royalty rate tied to

unverifiable "performances" in this new technological frontier. Other webcasters

CSI'8 STATFMRl%T IN SUPPORT OF MOTION AM) MOTION FOR STAY . 026 10/11/02 FRI 12:17 FAX 6503457494 LIVE365, INC

low-volume strearmng presumably suffer from the same phenomenon. Especially for connections services like many college radio stations, though, just a few such marathon

— unfairly skew the each month — these ciesriy are not I~istenin sessions dramaticaiiy and

"performance" statistics in favor of the copyright owners. the extra The royalty rates and minimum fees are especially prohibitive in light of

costs that stations also will have to incur to comply with the record keeping requirements.

The cost of complying with these requirements wouM far exceed the fees themselves at

most college stations. Robedee Decl, at$$ 19-20 . Hvea ifthere were a technological 21. solution, it would be prohibitively expensive for college stations to purchase it. Id. at

Even the developing interim requirements are likely to preclude many educational

institutions from webcasting. The Copyright Office has indicated that the final record

keeping requirements wiH be more extensive- and therefore more burdensome- than the

interira requirements.

Obviously, this information was not offered to the Panel because CBI and its

members could not afford to participate directly in the CARP proceeding, the

noncommercial broadcaster groups that did participate represent stations with resources

and needs very different from those of most college stations„and the record keeping

ndemaldag was separate. Therein lies the problem. The Panel did not consider any

evidence on the cost or feasibility of the record keeping in making its determination of

royalty rates, nor did the Register or the Librarian recognize the error in failing to

consider this important factor, The resulting inability of many stations to calculate their

actual number of transmission under the compulsory licenses is another reason the

CBI'S STATEMENT IN SUPPORT OF MOTION AND MOTION FOR STAY 13 10/11/02 FRI 12:18 FAX 6503457494 LIVE365, INC

to fees on Librarian should issue a stay relieving webcasters of the obligation pay

October 20, 2002.

HARME9 VIL COLLKGIATK BROADCASTERS %ILL BE IRREPARABLY ABSENT A STAY KTRU, Rice Webcasting has, up until now, been a boon for college broadcasters. radio and University's radio and Internet station, and KXTJL, University of Louisiana's from Internet station, are examples of college stations that have benefited enormously students a webcasting and will be harmed by the Librarian's Order. In addition to giving for forum in which to express themselves, as discussed above, they provide means

students to access a radio station in a traditional setting and to use the technologies

available today in the industry. Students learn many skills by operating a radio station.

%'ebcasting offers students a whole new set of tools to use to reach an audience. the Learning to develop and implement those tools is a great educational experience for

students. Robedee Decl. at $5. Students must have exposure to the use of new

thorough understanding of mediated communication. techno.logies to gain a Students'xperience

gained as the result of KXUL radio's Internet presence and the station's

streamed audio progranuning is therefore a vital part of the students'omplete education.

Wilier Decl. at $9.

%ebcasting allows KTRU to better pursue its mission and extend its reach beyond

the local area, to further expose genres and artists to a wider audience. It allows students

to reach many more listeners, and over a much wider geographic area than they can reach

with KTRU's PM signal. Robedee Decl. at $9. Likewise, K3KJL's Internet outreach

makes the radio station's programming available to a worldwide audience that would not

otherwise be able to experience the messages communicated by our students. KXUI. has CSPS STATEMENT IN SUPPORT OFMOTION AND MOTION FOR STAY g 028 10/11/02 FRI 12:18 FAX 6503457494 LIVHS65, INC

this country, and has received numerous communications from listeners throughout the United States. Wilier Decl. at $9. logged listening sessions from 53 nations outside of programming of non- ICG3L views the use of digital technology to retransmit the stations'istorical service. commercial radio stations as a natural extension of these to otherwise NoncoTnmercial educational radio stations traditionally strive to program commercial underserved audiences with content not typically provided by their via the countetyarts. The further distribution of educad,onal and cultural programming their public service to Internet allows noncommercial radio stations to effectively extend boundaries a geographically diverse audience. The Internet removes the physical transmission, imposed by an educational radio station's terrestrial radio frequency station's programming. allowing a greater audience to experience each noncommercial Internet The Internet began, in part, to support education; the continuing use of the by

noncommercial educational radio stations respects that tradition. %'ilier Decl. at %10,

For some schools, webcasting is the only viable way to reach an audience of any start-up size, due to limited broadcast spectrum or fiscal constraints. For a new station,

(non-royalty) costs for other means of transmitting are much higher than those for

webcasting. Low power FM, cable FMTV, legal and unlicensed AM, and cafeteria

public address broadcast systems all have extremely limited audience potential, a

problem solved perfectly by webcasting. Robedee Decl. at 'P. These schools are

especially ill-served by the Final Rule because, as non FCC- licensed webcasters, they

cannot meet the definition for noncommercial, non-CPB broadcasters and must pay the

commercial rate! %'ebcasting also allows for a second station where, for example, a,

CBPS S'rATEMENT IN SUPPORT OF MOTIONED MOTION FOR STAY

15 @029 10/11/02 FRI 12:19 FAX 6503457494 LIVE365, INC

student station, or where a college lacks college wants to have both an NPR station and a Robedee Decl. at It'6. the resources or the spectitun for a second PM station. noncommercial Most CBI member college radio stations, unlike many religious have to their operating costs stations and unlike public radio stations funded. by CPB, pay Decl. at 13; %ilier hem student fees or from their meager academic budgets. Robedee $ {"IBS") surveys, the average Decl. at $5. According to Intercollegiate Broadcast System noncommercial radio stations college station budget is about $9,000. Q. Historically, organizations in the form of have always paid.copyright royalties to the performngrights of revenue a reasonable flat fee, while commercial stations have paid on a percentage and avoided basis. This has enabled college stations to operate on fixed budgets Decl. at 15. penahzing them if they succeed in reaching a wider audience. Robedee $ forward, KTRU KTRU can afford to pay the back royalties due October 20. But going increases. KIRU's may notbe able to pay both the royalties, especially as its audience Internet audience has been doubling every ten months, as more people get high speed Robedee connections and listeners discover KIRU through "surfing" and promotion. to force Decl. at $18. The fees, combined with the reporting requirements, are also likely

IGG3L to cease its Internet service. Vfiller Decl. at $26.

As discussed above, college broadcasters are particularly harmed by the

Librarian's decision to set a mininnnn fee of $500 even for noncommercial webcasters. per- As a result of the»i»»um fees, most low-volume college webcasters will be paying

perfommnce royalties much higher than commerciil entities. KillerDecl. at +[20-22.

For example, the University of Louisiana at Monroe operates a radio station, KXUL

KXUL"s nominal royalty for the 2001 calendar year, the station's peak listening period,

CBI'8 S'fATF24I~22T IN SUPPORT OF MOTION AND MOTIONFOR STAY 10/11/02 FRI 12:19 FAX 6503457494 LIVES65, INC

disburse the minimum fee, the station totals $105.78. Because KXUL.will be required to

0.09381$ , or 469% of the nominal will pay an effective per-performance rate for 2001 of

noncommercial rate and 134% of the nominal commercial rate. October 20, Unless the copyright office grants necessary andjustified rehef, on performances 2002 college radio station KXIJL will have to make payments for all past the between October 28, 1998 and August 31, 2002. Killer Decl. At $22. Because of

effect of the minimum fee, the amount of that payment will evidently have to be for the period $2,500.00, although ICOJL's performance and. ephemeral copy royalties

total only $214 86. Id.

William Robedee started the Save Our Streams grassroots campaign and set up a

website at www.rice.edu/cb/sos in order to track the issue of the new webcasting

regulations, royalties and fees being promulgated under the DMCA and also to track the

resulting impact on college radio stations. He received. about 1400 e-mails in support of

CBI's position paper, a small sample of which are provided for the Librarian's

consideration. Robedee Decl. at f 26 and Exh. B. The impact of CARP report and the

Libraiian's order has already been devastating. Robedee has personally confirmed that

70 stations have already stopped webcasting, and has heard from credible sources that

many more have also stopped, Robedee Decl. at Q 23-24 (listing casualties). Some of

the most severely harmed college stations are those for which webcasting is the only

means of "broadcasting" such as UCLA-Radio, which has stopped streaming as result of

the Librarian's Order. Students at UCLA are losing their forum for free expression and

the opportunities offered by an educational station each and every day. If UCLA-Radio

is to explore other means of reaching an audience, it will expend considerable time, effort

CBI'S STATEMENT IN SUPPORT OP MOTION AND MOTION FOR STAY 10/11/02 FRI 12:19 FAX 6503457494 LIVES65, INC

smaller audience than it could through and funds, and ultimately will reach a much enthusiasts at other colleges, such as the webcasting, Robedee Decl. at jt 7, Radio vrebcasting, but reluctantly suspended University of Texas at Dallas, had plans to start because they cannot afford to webcast these when they learned of the Panel's derision, Robedee Decl. at $ 25. under the rates and fees in the Librarian's Order. about royalty rates or RIAA will not even negotiate with college broadcasters Decl. at 28. Even if college record keeping at tbis time. %ilier Decl. at $30; Robedee $ time wi11 have passeded andan stations are ultimately able to reach an agreement with RIAA, Robedee Decl. at 'II28. the harm to current students and the public will be irreparable. who want to participate in this time will be gone forever, so the harm to current students started to webcast wcbcasting, at colleges whose stations have ceased webcasting, never Decl. at 'g7. The or have any kind of radio station at all, will be irreparable. Robedee granting a stay. harm l.o college broadcasters and their listeners alone would justify

VIlI. CONCLUSION a For the reasons set forth above, the Librarian should grant this motion and issue the stay of the Order, relieving all parties bound by the Librarian*s determination of

obligation to make any payments under the compulsory license until the Court of Appeals

has decided the various pending appeals that will affect such obligations.

CBFS STATj~M1~22T IN SUPPORT OF MOTION AND MOTION FOR STAY 10/11/02 FRI 12:20 FAX 8503457494 LIVE365, INC @ 032 P. 3 STANFORDLAISCHOGL IIO,rj64 OCT. 1i. %DOER 10:42AM

Dated: October 11, 200Z RespectfuHy Sahgnittmd, COLLHGXATE BROADCASTRRS, ZNC.

Stanford Law School Ceuter far Internet k Society 559 Nathan Abbott%ay Stanford, CA 94905-8610 (690) 724-0517

CBPS STATEMENT IN8UPPORT OI'CXXONAND MOTION FOR STkV 10/11/02 FRI 12:20 FAX 6503457494 LIVE365, INC

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. INTRODUCTION. STAY FOR H. THE LIBRARY CAN AND SHOULD GRANT A PRESERVE ALL PARTIES BOUND BY THE DETERMINATION, TO THE STATUS QUO PENDING APPEAL. FROM THE IIL CBI MEMBERS HAVE STANDING TO SEEK A STAY LIBRARIAN BECAUSE CBI MEMBERS, WHO ARE BOUND BY THE DETERMINATION, %ILL DIRECTLY BENEFIT IF ANY OF THREE APPEALS PENDING IS SUCCESSFUL . Network A. CBI Members %'ebcasting on the Live365 Internet Radio Participated, Through Live365, In The CARP Proceeding and Their Interests Will Be Vindicated if Live365's Appeal is Successful ...... ,...... 3

B. CBI Members Who Are FCC Licensed Terrestrial Broadcasters %ill Have Their Interests Vindicated If The National Association Of Broadcasters'ppeal Is Successful %'ith C. CBI Members Who Are Non-Profit Webcasters Affiliated Educational Institutions Will Have Their Interests Vindicated if InterColiegiate Broadcasters'ppeal is Successful.

IV. CBI MEMBER STATIONS OPERATED BY STATE COLLEGES AND UMVERSITIES %ILL PREVAIL ON KXVEiVM AMENDMENT GROUNDS BECAUSE COPYRIGHT ROYALTKS CANNOT CONSTlTUTIONALLY BE COLLECTED FROM THE STATES

V. NO CBI 1VCEMBER WILL BE REQUIRED TO PAY ROYALTIES lN THE AMOUNTS SPECIFIED IN THE FINAL RULE IF ANY OP THE PENDING APPEALS ARE SUCCESSFUL AND RESULT IN VACATUR OF THE PINAL RULE.

VI. THE LIBRAjRIAN'S FINAL RULE IS ARBOR'RARY BECAUSE BIFURCATING THE DETEIVAINATION OF RATES FROM RECORDKEEPING REQUIREMENTS WAS A FUNDAMENTAL ERROR ...... 12 10/ll/02 FRI 12:20 FAX 6503457494 LIVE365, INC

TABLE OP COXIKNTS, continued

BE IRREPARABLY VII. COLLEGIATE BROADCASTERS %EL HARMED ABSENT A STAY

VHL CONCLUSION... 10/11/02 FRI 12:21 FAX 6503457494 LIVE365, INC

TASLK OP AUTHORITIES

Page

CASK.'i Cir,). Bonneville et al v. Peters, Case No. 01-3720 (3d

Bro~ v. Gardner, 513 U.S. 115 (1994) ... 858 F.3d 1394 (9 Cir, 1988) ... BV Zng'g v. University ofCalifornia, Los Angeles,

Connecticut Nat'l. Bank v. Germain, 503 U.S. 249 (1992) 972 {D.C. Cir. 1985}. Cuomo v, U.S. Nuclear Beg. Comm'n., 772 F.2d

. Florida Prepaid v. College Savings Bank, 527 U.S. 627 (1999)

Hans v. Louisiana, 134 U.S. 1 (1890).

Jackson v. Hayakawa, 682 F.21 1344 (9 Cir. 1982} Cir. 1989'). Lane i~. First Mat'l Bank ofBoston, 871 P.21 166 (1 29 (1983) .... hector Vehicle Mfrs. Assn. v. State Farm Mutual Ins. Co., 463 U.S,

Perrin v. United States, 444 U.S, 37 (1979) Cir. 2000). Rodriguez v. Texas Commission on the Arts, 199 F.3d 279 (5

Russello v. United States, 464 U.S. 16 (1983) .

Salenm v. CUM", 191 P,Supp. 352, {S.D.N.Y. 2001)

United States v. Goldenberg, 168 U.S. 95 (1897)......

United States v. Gonzales, 520 U.S. 1 (1997} .

United States v. LaBont, 520 U.S, 751{1997) .

United States v, Ron Pair Enters., Inc., 489 U.S 235 (1989).

Washington Metro Area Transit Comm'n. v. Holiday Tours, Inc. 559 P.2d 841 (D.C. Cir. 1977). @036 10/ll/02 FRI 12:21 FAX 6503457494 LIVE365, INC

TABLE DF AUTjIOMTIES, centianed

STATUTES

United States Constttution

Amendment XI. Act" 17 U.XC. 101, et seq., "The Copyright

Section 112(e} ...... ,.„. Section 114{d)(1)(A)., .....7 Section 114(f)(1)(A).. 7 Section 114 (f)(2)(A}. .6 Section 114(f}(2)(S). 7 Section 802 (c), 5, 6, 7, 8 Section 802(g}, 7 Section 802(h){1).

...passlPt Librarian's Final Rule and Order, 67 Fed. Rem. 45240 (July 8, 2002)

OTHER A.UTHORITlES AND REFERENCES

Black's Law Dictionary 34 (5'" ed. 19833 2002)...... 11 H.R. 5469, "Small %ebcaster Amendments Act of 2002" (October 7,

%ebs''tes:

ii PMW i i .hali

KTS% 89.9 Website, h:/hvvnv.ktsw.net..

KXLU 88.9 FM%'ebsite, h://www.kxlu.com. 10/11/02 FRI 12:21 FAX 6503457494 LIVE365, INC

PROOF OF SERVICE

I, Joanne Newman do hereby certify and declare as follows:

I am over the age of 18 years, and not a party to the instant proceedings. I

am employed in the county of Santa Clara, California. My business address is:

559 Nathan Abbott Way, Stanford, California.

Qn October 11, 2002 I caused to be served the following document:

COLLKCIATK 8ROADCASTKRS'TATEMENT IN SUPPORT OF MOTION OF LIVK365 AND SKPARA,TK MOTION FOR STAV PENMNG A.PPKAL

via Federal Express by placing one true copy of the above document in a

properly sealed and addressed envelope for overnight delivery, and deposited in a

station mailbox routinely maintained by Federal Express. Service is made on the

fol lowing interested parties:

Arthur Levine Robert Alan Garrett Hnnegan, Henderson, Farabow Ronald A. Schechter Garrett k Dunner Arnold k. Porter 1300 I Sheet, ¹W. 555 Twelfth Street, N.W. Washington, DC 20005 Washington, DC 20004

Patricia Polach Cary H. Sherman Bredhoff 4 Kaiser Steven M. Marks 805 Fifteenth Street, N.W.. Recording Industry Suite 1000 Association of America Washington, DC 20005 1330 Connecticut Ave., N.W. Suite 330 Washington, D.C. 20036

Bruce G. Joseph Barry I. Slotnick Wiley, Rein 8t: Fielding Loeb 8|; Loch 1776 K Street, N.W. 345 Park Avenue Washington, D.C. 20006 New York, NY 10154 10!'ll/02 FRI 12:22 FAX 6503457494 LIVE365, INC QJ 038 U~i. il. lvUz Jl:UNARM biA5(GtI0LABCHOOL

Adam I. Cohen Wei J, Gots1xal 8: Manges 76'7 Fifth AvexIU,e New 'York„XY 10193

Sandra M. Aistars 'Kejl„Qotshal CynQua Gteex 4 Mangos Sha'vv Pittmat1 150I K Stteet, X,Vf. 2300 N 8treet, N.W %'ashingtoa, DC 20005 %'ashington, D.C, 20037-1 1.28

I dec1aze Qfidex the pe58lty of patIQxp that Qle foxegoixlg is txui Ind correct. Executed this 11th day of October 2002 at Stamford, Califezda.

oanne emma' Center for Internet and Society STANFORD LAW S CHOOL Law and Technology Clinic Crow n Quadrangle Tel: 650.723.5674 559 Nathan Abbott %'ay Fax: 650.723.4i26 Stanford, CA 94305-8610

Via Federal Express

October 16, 2002

Library of Congress U.S. Copyright Office Copyright Arbitration Royalty Panels Attention: Gina Giuffreda Washington, D.C. 20003

Re: In the Matter of: Digital Performance Right in Sound Recordings and Ephemeral Recordings 2000-9 CARP DTRA (DTRA 1 &, 2)

Dear Ms. Giuffreda:

On Friday, October 11, 2002, the Center for Internet and Society, through a local messenger service, filed an "original" (faxed signature copy) plus five copies of: Collegiate Broadcasters'tatement in Support of Motion of Live365 and Separate Motion for Stay Pending Appeal. That pleading was accepted for filing by the General Counsel of Copyright on October 11, 2002.

Due to the brevity of time on Friday, we were not able to furnish the actual ~ori inal signed document with the Copyright Office. Therefore, we now are sending the ~ori inal pleading, with proof of service, for proper filing and recording. Please note that we are not sendingfive additional copies, as those were already delivered to the Copyright Office on Friday. Please let me know if there is any question or problem with this filing, and call me at: (650) 723-4336.

Thank you very much for your assistance in this matter.

~mcer ly,

Joanne Newman Legal Assistant

Enclosures