Reminder to NONCommercial Webcasters

Posted on January 13, 2010 by Kevin Goldberg

January 31 brings deadlines for payment of annual minimum fees and filing of election notices

Attention NONcommercial webcasters. January 31, 2010 brings deadlines for you just as it does for your commercial counterparts.  But the January 31, 2010 deadline – for making the annual payment and, if appropriate, filing a Notice of Election to participate in one of the available Noncommercial Webcasting Settlement Agreements – is perhaps more important to noncommercial webcasters. That’s because most noncommercial webcasters, whether or not they have elected to participate in a settlement agreement, will end up paying the $500 per channel annual minimum payment and nothing more (unless the webcaster exceeds the allowable 159,140 aggregate tuning hour monthly maximum triggering additional payments). So there’s no reason that you’d be late with this lone payment.

Timely filing of a Notice of Election to participate in either the General Noncommercial Webcasting Settlement Agreement or the Noncommercial Educational Webcasting Settlement Agreement is equally important, as it can alleviate some of the onerous playlist filing requirements the webcaster must make through the year. 

What follows is a summary of the immediate and ongoing filing and payment obligations applicable to noncommercial webcasters for 2010. Note that, for webcasting purposes, the commercial v. noncommercial distinction rests with the webcaster’s status under Section 501 of the Internal Revenue Code, not the webcaster’s FCC license (if there is one). 

If you are (a) a webcaster exempt from taxation under Section 501 of the Internal Revenue Code (or have applied for that status) or (b) a government organization operating your webcast consistent with your public purpose, read on. If none of these apply, you should go here for our similar summary applicable to commercial webcasters.

A.        Noncommercial Webcasters Who HAVE NOT Elected to Participate in any major Webcaster Settlement Agreement

If you are a noncommercial webcaster – and are not eligible for or have chosen not to participate in any of the settlement agreements applicable to noncommercial webcasters – then you are still governed by the March, 2007 decision of the Copyright Royalty Board. You must:

File your annual minimum fee of $500 per channel by January 31, 2010 using the 2010 Noncommercial Webcaster Annual Minimum Statement of Account form found here.

File any fees incurred for exceeding the 159,140 aggregate tuning hour maximum with the 2010 Noncommercial Webcaster Monthly Usage Statement of Account form found here. You must file this form even if no fees have been incurred, marking “zero” for the amount to be paid.

File playlist reports of use on a monthly basis.

B.        Noncommercial Webcasters Who HAVE Elected to Participate in the Webcaster Settlement Agreement between PUBLIC RADIO STATIONS and SoundExchange

Stations that are CPB-supported, NPR members, National Federation of Community Broadcasters members; or part of American Public Media, the Public Radio Exchange or Public Radio International do not have to file forms with SoundExchange. Under the terms of their settlement agreement, NPR’s Public Radio Interactive is making those payments. These stations will be contacted by Public Radio Interactive with regard to their obligations.

C.        Noncommercial Webcasters Who HAVE Elected to Participate in the GENERAL NONCOMMERCIAL WEBCASTER SETTLEMENT AGREEMENT and are not considered Microcasters because they have an average of at least 44,000 aggregate tuning hours per year

There are two settlement agreements that apply to noncommercial webcasters simulcasting an over-the-air broadcast station. The first applies to any noncommercial webcaster, whether affiliated with an educational institution or not. These noncommercial webcasters must re-elect this status every year, or be covered by the CRB decision of March, 2007 as described in Section A, above.   They must:

File an annual minimum fee of $500 per channel by January 31, 2010 using the 2010 Noncommercial Webcaster Annual Minimum Statement of Account form found here.

File a Notice of Election by January 31, 2010 on the 2010 Noncommercial Webcasters Statement of Election Form found here.

File any fees incurred for exceeding the 159,140 aggregate tuning hour maximum with the 2010 Noncommercial Webcaster Monthly Usage Statement of Account form found here. You must file this form even if no fees have been incurred, marking “zero” for the amount to be paid.

File playlist reports of use on a quarterly basis (monthly if the webcaster exceeded 159,140 aggregate tuning hours in any month in 2009 or in any month in 2010).

D.        Noncommercial Webcasters Who HAVE Elected to Participate in the GENERAL NONCOMMERCIAL WEBCASTER SETTLEMENT AGREEMENT and ARE considered Microcasters because they had fewer 44,000 aggregate tuning hours last year

These are extremely small noncommercial webcasters who can be exempted from the playlist reporting requirement and, by definition, will not be paying royalties because they will never exceed 159,140 aggregate tuning hours in any given month.  They must:

File an annual minimum fee of $500 per channel by January 31, 2010 using the 2010 Noncommercial Microcaster Annual Minimum Statement of Account form found here.

File an additional $100 “proxy fee” in exchange for the exemption from playlist reporting obligations, which occurs with the filing of the “Notice of Election” form found here. 

These webcasters do not have to file any Statement of Account forms for 2010 since, by definition, they will not be paying royalties. If, for some reason, they have miscalculated and exceed 159,140 aggregate tuning hours in a month, they will “true up” their payments for 2010 in January 2011.   

There is no requirement to file playlist reports of use.

E.        Noncommercial Educational Webcasters Who Have Elected to Participate in the NONCOMMERCIAL EDUCATIONAL WEBCASTER SETTLEMENT AGREEMENT [Blogmeister Note: This portion of this post was revised on January 19, 2010 in response to the reader comment found below. See our explanation and further clarification in our responsive comment, below.]

Noncommercial webcasters affiliated with an educational institution whose operations are substantially staffed by students are eligible for the Noncommercial Educational Webcaster Settlement Agreement. They must:

File a Notice of Election by January 31, 2010 on the 2010 Noncommercial Educational Webcaster Statement of Election Form found here. They must certify as to whether they have remained below an average of 55,000 aggregate tuning hours per month (and thus can pay a $100 proxy fee in exchange for the right to be exempted from playlist reporting or go ahead and engage in playlist reporting covering two seven day periods per quarter) or whether they have exceeded 159,140 aggregate tuning hours in any given month (and thus must engage in monthly reporting of all songs played). Stations that exceed 55,000 aggregate tuning hours in a given month but do not exceed 159,140 aggregate tuning hours in a given month will engage in playlist reporting covering two seven day periods per quarter. In any event, there does not have to be any reporting of aggregate tuning hour or actual total performance data, whereas stations that do not participate in this Noncommercial Educational Webcaster Statement must engage in full out, monthly “census” reporting of all songs played during the month that includes actual total performance data.

File a Notice of Election by January 31, 2010 on the 2010 Noncommercial Educational Webcaster Statement of Election Form found here. They must certify as to whether they have remained below an average of 55,000 aggregate tuning hours per month (and thus will pay a $100 proxy fee to be exempted from playlist reporting) or whether they have exceeded 159,140 aggregate tuning hours in any given month (and thus must engage in monthly reporting of all songs played).

File any fees incurred for exceeding the 159,140 aggregate tuning hour maximum with the 2010 Noncommercial Webcaster Monthly Usage Statement of Account form found here.   They must file this form even if no fees have been incurred, marking “zero” for the amount to be paid.

File playlist reports of use on a quarterly basis (monthly if the webcaster exceeded 159,140 aggregate tuning hours in any month in 2009 or in any month in 2010 or not at all if the webcaster stayed below an average of 55,000 aggregate tuning hours per month and chooses to pay a $100 proxy fee instead of filing these reports). 

Again, these forms and payments are due by January 31, 2010. Because that is a Sunday, SoundExchange will accept the forms on Monday, February 1, 2010. However, you cannot electronically file these forms and there is a penalty for late payment (or worse in terms of late-filing a Notice of Election), so we suggest you get started now. Please do not hesitate to contact a Fletcher, Heald & Hildreth, P.L.C. attorney if you have any questions.
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Dear CRB: Thanks for Nothing

Posted on October 14, 2009 by Kevin Goldberg

Final playlist reporting requirements for webcasters announced

After years of proposals and deliberations and interim policies, the Copyright Royalty Board (CRB) has at long last published “final rules” dictating the playlist reporting requirements for webcasters. But like so many things in this day and age of fast-paced technological and regulatory development, the “new” rules, which take effect on November 12, 2009, are likely to be of little more than academic interest to many. That’s because intervening events – including multiple separate agreements among various webcaster groups and SoundExchange – have largely marginalized the significance of the CRB’s role in this aspect of webcasting.

The rules won’t be of particular interest to

  • “smaller” Internet-streaming broadcasters, i.e., operators with such a small on-line listenership that they never exceed the $500 annual minimum payment in a given year, to whom the full-time “census” reporting of playlist information does not apply; or
  • broadcasters who have elected to participate in one or more of the agreements (general noncommercial and noncommercial educational or CPB or commercial broadcaster) to settle outstanding appeals of the March 2, 2007 decision of the CRB to institute rates and terms for the statutory license for the period 2006-2010. 

Still, if you are in the dwindling universe of webcasters who remain subject to the CRB’s reporting requirements, you should familiarize yourself with the “new” rules.

The reporting rules are part of the system established by the CRB for assuring collection and payment of appropriate royalties to copyright holders. Using webcaster-supplied playlists reflecting the frequency with which songs are played on the web, SoundExchange can fairly distribute the royalties it collects. When the CRB first finalized the playlist reporting requirements in 2006, all webcasters were required to file quarterly reports with SoundExchange listing every song played by the webcaster during two seven day periods in that quarter. In December 2008, the CRB proposed to change those quarterly filings to “census” filings – i.e., monthly filings containing information about every song played during the month. The recently-published rules formally adopt that census filing approach.

Under the “new” rules,  census reporting – that is, reporting within 45 days of the end of each month the required information about all songs played during that month – is required for all webcasters except

  • broadcasters simulcasting an over-the-air broadcast on the Internet which have such a small listenership that they do not exceed the $500 annual minimum payment per year (in other words, any very small commercial webcasters and noncommercial webcasters that do not exceed 159,140 aggregate tuning hours in any month); and
  • preexisting satellite digital audio radio services, new subscription services or business establishment services who cannot accurately measure listenership for technological reasons. (These folks must still report their playlists, but can do so on a modified “aggregate tuning hour” basis.)

Of course webcasters who elected to participate in one of the several settlement agreements reached in the past couple of years are bound by the playlist reporting requirements in the applicable agreement. These webcasters should review their particular settlement agreement, and let us know if you have any questions about your reporting requirements.

The song-related information which must be filed has not markedly changed, though there is one key exception applicable to broadcasters. The reportable information still consists of:

  • The name of the webcasting service
  • The category transmission code, although this has changed slightly, with broadcasters now using one of the following category codes:
    • Eligible nonsubscription transmissions of broadcast simulcast programming not reasonably classified as news, talk, sports or business programming (essentially, simulcast of a broadcast station’s music programming);
    • Eligible nonsubscription transmissions of non-music programming reasonably classified as news, talk, sports or business programming (essentially, a broadcast station’s news, talk, sports or business programming); and
    • Transmissions of broadcast simulcast programming not reasonably classified as news, talk, sports or business programming made by an eligible new subscription service (this category involves subscription-only simulcast of music programming by a broadcast station)
  • The featured artists
  • The sound recording title
  • The International Standard Recording Code, or a combination of (a) album title and (b) marketing label
  • Actual total performances of the song, or a combination of (a) aggregate tuning hours and (b) channel or program name and (c) number of times the song was played during the relevant period

For the last category (actual total performances of the song or the listed combination), the “combination” alternative is applicable only to a preexisting satellite digital audio radio service, a new subscription service, a business establishment service and broadcasters who do not exceed the annual minimum payment required for a given channel (currently $500). 

The new rules have been purged of unnecessary references to prior license terms, obsolete categories (e.g., “small webcaster”) and the like. And illustrating the March of Technology, the CRB has deleted the option of filing the reports on floppy diskettes.

Notably, the Copyright Royalty Board did not adopt the following proposed changes: 

  • Any form of “proxy fee” or other exemption from filing altogether, even for the smallest webcasters;
  • Imposition of a late fee for tardy or non-filed playlist reports; or
  • An exemption from playlist reporting of songs played during syndicated radio programming

While we have focused here on the applicability of these rules to broadcasters who are also webcasting, a section of the newly final rules applies slightly different standards to “preexisting subscription services”. Please contact us if you believe you qualify as a “preexisting subscription service” and require guidance as to how the new rules apply to you. 

Again, the CRB’s changes go into effect on November 12, 2009.
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