Update – January 24, 2019 – the notice seeking petitions to participate has been published in the Federal Register, setting a filing deadline of February 4, 2019. See our article here for more details.
In our summary of January regulatory issues for broadcasters, we suggested that the Copyright Royalty Board this month might start WEB V, the next proceeding to determine the rates that Internet radio stations and other webcasters pay to SoundExchange for the noninteractive public performance of sound recordings. The current royalties (see our initial article on the decision setting current royalties here, and one that provided more details here) expire at the end of 2020. A proceeding to establish the rates for 2021-2025 is a two-year long process, and would normally begin with a request from the CRB for interested parties to file petitions to participate about now. But, even though the CRB itself is not closed because of the partial government shutdown, according to a notice on the CRB website, the Federal Register (in which the notice soliciting petitions to participate would be published) is only accepting notices relating to public safety and welfare – and the CRB proceeding apparently does not fit in those criteria. So the start of the case will be delayed by this government shutdown until the Federal Register publication can be accomplished.
As we have written before, this is likely to be an interesting case – just in determining who will participate. Broadcasters who stream their signals would likely participate, especially as their digital transmissions are becoming more important to some broadcast stations (see our article here on the fact that smart speakers increase digital listening to radio stations – listening on which the SoundExchange royalties must be paid). Some of the other services that have participated in the past proceedings (including Pandora and iHeart) now offer, in addition to their noninteractive services, interactive or on-demand music services for which royalties need to be directly negotiated with the record labels (see our post here for more details on royalties for interactive services). Will they participate in the upcoming case, or have they negotiated direct deals that cover their more traditional webcasting services along with their interactive services? That remains to be seen. Small commercial webcasters, who were left out of the last proceeding (see our article here), might also be interested in participating. Noncommercial webcasters usually participate in these cases as well. But all interested parties appear to be on hold right now – along with many other industries that rely on government actions – until this shutdown is resolved.