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.