CRB takes path of least resistance, bases proposal on privately-negotiated settlements

When it comes to setting the royalty rates and related terms governing webcasting, the Copyright Royalty Board (CRB) rules.   It does so through formal proceedings which result in rates/terms applicable for five-year periods. This time around, the CRB appears to be acknowledging that the private sector might have a better handle on things than does the CRB. Rather than propose a new, CRB-developed structure for 2011-2015, the CRB is looking to impose overall terms and conditions identical to those reached in privately-negotiated settlement agreements developed in 2009.

The CRB’s approach is a concession to the shortness of life and the difficulties of the rulemaking process. Last time around, the CRB’s proceedings dragged on so much that its ultimate decision didn’t make it into the Federal Register until May, 2007, almost a year and a half after the term to which that decision applied (i.e., 2006-2010) applied. When it finally was issued, the decision was almost immediately panned by just about all concerned.  It was appealed (without much success). Legislation aimed at deep-sixing it was introduced (also without much success).

And eventually, the parties to whom the CRB’s ruling was meant to apply took matters into their own hands. In 2009 they negotiated alternative royalty rates and playlist reporting requirements which allowed them to effectively side-step the ruling.

This time around it looks like the CRB has learned from its last experience. The first step of the 2011-2015 ratemaking process required a three-month negotiation period between all parties. The idea, presumably, was that the CRB will encounter far less resistance if it adopts an approach to which those subject to the approach have already agreed. They appear to have hit the nail on the head, as these initial negotiations have borne fruit for some webcasters.

The CRB is now effectively proposing to adopt the terms of two of the 2009 agreements as the official rules governing the 2011-2015 term after parties to those agreements suggested that their agreed-to terms might usefully be applied them to all similarly-situated webcasters.  The main difference: where the 2009 settlement agreements were elective (i.e., parties could choose to be subject to the agreements or not), the agreed-to terms will now govern all webcasters in the relevant category.  

The particular agreements relate to (a) participating commercial broadcasters and (b) noncommercial educational broadcasters streaming on the web. (Commercial broadcasters and noncommercial webcasters remain free to enter into their own individual, private, and voluntary agreements in lieu of the regulations but, of course, the entire purpose of a statutory licensing scheme is to relieve copyright users of that burdensome task.) 

The full terms proposed by the CRB may be found in the notice of proposed rulemaking published in the Federal Register. You can also find summaries of the agreements on which those terms appear to be based here (i.e., the settlement between SoundExchange and the NAB regard commercial broadcasters) and here (i.e., the settlement between SoundExchange and noncommercial educational webcasters). 

Note that these are still just proposed rules. The CRB will take comments on the proposals until April 22, 2010. It will then review any comments it receives and will decide whether to make these proposed rules final and official.

While we do not expect many individual broadcasters to file comments on these rates and terms – after all, the rates and terms have already been negotiated out and agreed to by many, if not most, of the affected parties – we are available to discuss this in more detail and assist you in filing comments if you desire.

We will also notify you with regard to any further developments with regard to the 2011-2015 terms and conditions for these commercial broadcasters, noncommercial educational webcasters, as well as any developments in the other proceedings of interest to the webcasting community (primarily the noncommercial, but not educational, webcasters).