Copyright Office Announces Royalty Rates

Washington, D.C. (February 17, 2004)--On Friday, February 6, 2004, the Copyright Office published long-awaited final regulations establishing royalty rates for commercial webcasters/broadcast simulcasters, noncommercial webcasters/broadcast simulcasters and business establishment services for the period January 1, 2003 through December 31, 2004. The rates also apply to "new subscription services" for the period October 28, 1998 through December 31, 2004 and cover all associated ephemeral recordings.
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Washington, D.C. (February 17, 2004)--On Friday, February 6, 2004, the Copyright Office published long-awaited final regulations establishing royalty rates for commercial webcasters/broadcast simulcasters, noncommercial webcasters/broadcast simulcasters and business establishment services for the period January 1, 2003 through December 31, 2004. The rates also apply to "new subscription services" for the period October 28, 1998 through December 31, 2004 and cover all associated ephemeral recordings.

In addition to establishing the rates for the 2003-2004 license period, the Copyright Office announcement named SoundExchange the sole designated agent to collect royalties from services operating under the statutory license and distribute those royalties to copyright owners and artists.

The rates are the product of an historic, industry-wide voluntary settlement that was reached in 2003 and first submitted to the Copyright Office for adoption on April 14, 2003. Official adoption of the negotiated rates was delayed until this time due to an objection to one of the terms that required the Copyright Office to submit the disputed term to a Copyright Arbitration Royalty Panel ("CARP"). That proceeding, which had not yet reached the live hearings stage, was cancelled in early January 2004 when the objection was withdrawn.

Pursuant to Friday's announcement, all covered services are required to submit a lump sum payment to SoundExchange covering the period through February 29, 2004 on or before April 14, 2004. Beginning with the month of March, services are required to make royalty payments 45 days after the end of each month. In addition, commercial webcasters/broadcast simulcasters and new subscription services are required to elect their preferred rate structure (i.e., aggregate tuning hours, per performance or, in the case of new subscription services, percentage of subscription revenues) no later than March 8, 2004.

For the full announcement, rate details, and definitions, visit
www.copyright.gov/fedreg/2004/69fr5693.pdf