The Catholic University of America

Summary of Federal Laws

Compliance Partners

Program Coordinator, Student Programs and Events

Copyright Law

Small Webcaster Settlement Act of 2002

Public Law 107-321, 116 Stat. 2780; 68 Fed. Reg. 35008, June 11, 2003 and Webaster Settlement Act of 2009 (PL 111-36)

Summary of the Small Webcaster Settlement Act courtesy of Shelley Steinbach, American Council on Education and Ken Salomon, Dow, Lohnes & Albertson, PLLC.

The SWSA applies to "Noncommercial Webcasters" and to "Small Commercial Webcasters" and is intended to address Congressional concerns that Noncommercial and Small Commercial Webcasters were not adequately represented in the process that resulted in the Copyright Office's July 8, 2002 decision establishing royalty rates for webcasting digital sound recordings. (See the July 8, 2002 final rule and order (67 Fed. Reg. 45239) for the licensing fees adopted by the Librarian of Congress for the performance of sound recordings publicly by means of digital audio transmissions ("webcasting")). The Copyright Act provides statutory licenses to webcast sound recordings and to make ephemeral copies of sound recordings and pursuant to the Digital Millennium Copyright Act, the Copyright Office's July royalty rates are based on a set fee for each digital sound recording performance per listener. Payment of these fees, retroactive to October 28, 1998, was due on October 20, 2002. In the SWSA, Congress recognized that for Noncommercial and Small Commercial Webcasters, the Copyright Office's statutory license fees may be overly burdensome, and would inevitably force most of them to cease their operations.

A "Webcaster" under the SWSA is an on-line service that provides musical performances. A "Noncommercial Webcaster" is (i)a Webcaster that holds or has applied for Section 501(c)(3) recognition or (iii) "is operated by a State or other possession or any governmental entity or subordinate thereof, or by the United States or District of Columbia, for exclusively public purposes." Accordingly, a non-profit 501(c)(3) private college or university Webcaster, or other non-profit 501(c)(3) entity, would qualify as a Noncommercial Webcaster, as would a Webcaster that is operated by a state college or university. As a result, their college radio stations that stream their broadcasts are Webcasters under the SWSA, and would be eligible to take advantage of the SWSA's provisions. College stations that solely webcast, and do not stream over-the-air broadcasts over the Internet, are also Webcasters under the SWSA.

The SWSA allows for a delay of the due date for Noncommercial and Small Commercial Webcasters that have NOT YET made payments to make their past due and upcoming royalty payments. The extra time is to be used to allow Noncommercial and Small Commercial Webcasters to negotiate new royalty rate agreements with SoundExchange, the royalty receiving agent designated by the recording industry, for royalty fees based on a percentage of revenue rather than on a per performance basis.

The SWSA affects Noncommercial Webcasters in two important ways. First, it suspends all royalty payments until June 20, 2003. Second, it authorizes SoundExchange to enter into new privately-negotiated royalty rate agreements with Noncommercial Webcasters, notwithstanding the royalty rates already established by the Copyright Office. In suspending the royalty payment due date, the SWSA delays payments due for Noncommercial Webcasters for all of the digital performances webcast from October 28, 1998 through May 31, 2003.

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Intercollegiate Broadcasting System Inc. v. Copyright Royalty Board and LOC, (U.S. C.A. DC Cir.) Decided July 6, 2012

Court holds the position of the Copyright Royalty Judges [composing the Copyright Royalty Board] is in violation of the Appointments Clause of the U.S. Constitution because the Judges’ significant ratemaking authority without any effective means of control by a superior, such as unrestricted removability, renders them principal officers who must be appointed by the President with Senate confirmation.  To remedy the violation of the Appointments Clause, the court invalidates and severs the portion of the statute establishing the Copyright Royalty Board that restricts the authority of the Librarian of Congress to sanction or remove Copyright Royalty Judges.  However, because at the time it was issued the Board’s structure was unconstitutional, the court vacates and remands the final rule issued by the Copyright Royalty Board on March 9, 2011 establishing rates and terms, including requirements for royalty payments, recordkeeping and reports of use for the public performance of sound recordings in certain digital transmissions made by Noncommercial Educational Webcasters (as defined in §380.21) and the making of Ephemeral Recordings during the period January 1, 2011 – December 31, 2015. (The final rule adopted the agreement between SoundExchange and College Broadcasters, Inc. as the basis for rates and terms for non-commercial educational webcasters for the period 2011 – 2015.)

Note: Rule below was vacated and remanded. See case above.

Digital Performance Right in Sound Recordings and Ephemeral Recordings, 76 Fed. Reg. 13026, March 9, 2011. This applies to the period commencing January 1, 2011 and ending Dec. 31, 2015. Codified at 37 CFR 380, Rates and Terms for Certain Eligible NonSubscription  Transmissions, New Subcription Services and the Making of Ephemeral Reproductions. Subpart C applies to Noncommercial Educational Webcasters, and starts with section 380.20. This rate determination establishes rates and terms, including requirements for royalty payments, recordkeeping and reports of use for the public performance of sound recordings in certain digital transmissions. This proceeding adopts the agreement between Sounds Exchange and College Broadcasters Inc. set forth at 74 Fed. Reg. 40614, Aug. 12, 2009.


Notification of Agreements Under the Webcaster Settlement Act of 2009, 74 Fed. Reg. 40614 (August 12, 2009)
The Copyright Office is publishing four agreements which set rates and terms for the reproduction and performance of sound recordings made by college radio station webcasters under two statutory licenses (Section 112 and 114). This notice sets out the text of the agreements between Sound Exchange and the College Broadcasters Inc. CBI summarized the settlement (which runs through 2016) in their blog as follows:

August 1, 2009 · CBI has been working long and hard to address the most troublesome the legal issues concerning webcasting for student college radio stations. We have achieved results along the way (SWSA settlement of 2003, less stringent recordkeeping and reporting requirements than proposed, etc.) After years of filing comments, visiting with lawmakers, surveying members, etc., etc., etc., we are now able to report that we have achieved meaningful, long-term results through a settlement under the Webcaster Settlement Act of 2009 and potentially more! Some highlights…
  • Stations that average under 75 simultaneous users will have the option of submitting reports of use that do not require any audience data (ATH of ATP) or paying a $100 proxy fee in lieu of any reporting.
  • Stations with an average concurrent audience of over 75 will be required to submit reports of use, but they will not have to submit audience data.
  • The fee for these stations remains at $500 annually through 2016 unless the station has an ATH above 159, 140 (~208 average concurrent users in any month).

This is an excellent victory for college webcasting stations. For further details see the CBI webpage update and also the Settlement Agreement.

New Royalty Rates for Webcasting Sound Recordings

Retroactive to Jan. 1, 2006, the new rate for non-commercial, non-interactive webcasting is a flat fee of $500 per station or per channel for the first 159,140 aggregate tuning hours (ATH) per month. (ATH equals one hour of programming transmitted to one listener). For webcasting of performances beyond the 159,140 ATH per month, commercial usage rates will apply (0.11 cent per listener per song in 2007, gradually increasing to 0.19 cent per listener per song in 2010). Payments are made to SoundExchange.

Recordkeeping and Reporting: Non-Commerical webcasters electing these rates and terms shall not be required to provide reports of sound recordings played for 2003 and 2004. A task force is looking at future reporting.

History and Background

Background
In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act (``DPRA''), Public Law 104-39, which created an exclusive right for copyright owners of sound recordings, subject to certain limitations, to perform publicly their sound recordings by means of certain digital audio transmissions. Among the limitations on the performance right was the creation of a new compulsory license for nonexempt, noninteractive, digital subscription transmissions. 17 U.S.C. 114(f).
The scope of this license was expanded in 1998 upon passage of the Digital Millennium Copyright Act of 1998. The Small Webcaster Settlement Act further amended the law by addressing concerns that the licensing fees adopted by the Librarian of Congress did not adequately address the concerns of small and noncommerical webcasters.

Resources:

College Broadcasters, Inc.

Sound Exchange

Future of Music Coalition
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updated  7/26/12 to add Copyright Royalty Board Case