decision by a US District Court in New York was just released, setting the rates to be paid to ASCAP for the use of their composers’ music by Yahoo!, AOL and Real Networks.  The decision set the ASCAP rates at 2.5% of the revenues that were received by these services in connection with the music portions of their websites.  These rates were set by the Court, acting as a rate court under the antitrust consent decree that was originally imposed on ASCAP in 1941.  Under the Consent Decree, if a new service and ASCAP cannot voluntarily agree to a rate for the use of the compositions represented by ASCAP, the rates will be set by the rate court.  The Court explained that they used a "willing buyer, willing seller" model to determine the rates that parties would have negotiated in a marketplace transaction  – essentially the same standard used by the Copyright Royalty Board in setting the rates to be paid to SoundExchange for the use of sound recordings by non-interactive webcasters (see our post here for details of the CRB decision).  The ASCAP decision, if nothing else, is interesting for the contrasts between many of the underlying assumptions of the Court in this rate-setting proceeding and the assumptions used by the Copyright Royalty Board in setting sound recording royalty rates.

First, some basics on this decision.  ASCAP represents the composers of music (as do BMI and SESAC) in connection with the public performance of any composition.  This decision covered all performances of music by these services – not just Internet radio type services.  Thus, on-demand streams (where a listener can pick the music that he or she wants to hear), music videos, music in user-generated content, karaoke type uses, and music in the background of news or other video programming, are all covered by the rate set in this decision.  Note that the decision does not cover downloads, presumably based on a prior court decision that concluded that downloads do not involve a public performance (see our post here).  In contrast, the CRB decision covered the use of the "sound recording" – the song as actually recorded by a particular artist – and covers only "non-interactive services," essentially Internet radio services where users cannot pick the music that they will be hearing.


Continue Reading Rate Court Determines ASCAP Fees for Large Webcasters – Some Interesting Contrasts with The Copyright Royalty Board Decision

In April, the FCC agreed to Consent Decrees calling for fines totaling $12.5 million from four of the country’s largest radio broadcasters in order to settle allegations that these companies had engaged in violations of the FCC’s payola rules. Recently, another public radio company stated in one of its SEC filings that it had received an inquiry

The Copyright Office last week released a wide-ranging Notice of Inquiry, asking many questions about the statutory licenses that allow cable and satellite companies to retransmit broadcast television signals without getting the specific approval of all the copyright holders who provide programming to the television stations. The notice was released so that the Copyright Office can prepare a report to Congress, due June of 2008, in which it will present its views as to whether the various statutory licenses still perform a necessary function, and whether any reforms of the current licenses are necessary. To complete its report, the Notice asks many questions about how these licenses currently work, whether the licenses function efficiently, and whether they should be retained, modified or abolished in favor of marketplace negotiations. The Notice even asks whether the existing statutory licenses should be expanded to take into account the different ways video programming is now delivered to the consumer, including various Internet and mobile delivery systems. Thus, virtually anyone involved in the video programming world may want to be part of this proceeding. Comments are due July 2 and reply comments are due September 13.

The cable and satellite statutory licenses were adopted by Congress to allow these multi-channel video systems to retransmit broadcast  signals. Without these licenses, the individual owners of copyrighted material – including syndicated,  network, sports, and music programming — would have to be consulted to secure necessary copyright approval before the television signal could be retransmitted. As the multi-channel video providers would, in many cases, not even know who held all these rights, they instead pay a statutory license which is collected, pooled, and then distributed to the various rights holders in proportions agreed to by those copyright holders or, in the absence of agreement, set by the Copyright Royalty Board.


Continue Reading Copyright Office Begins Inquiry to Reexamine Cable and Satellite Statutory Licenses – and Asks if Statutory Licenses are Appropriate for Internet Video