Proposed change would include noncommercial broadcasters among “Eligible Minimum Fee Webcasters.”

It looks like noncommercial broadcasters who stream may be in for a little more clarity in their reporting responsibilities. The Copyright Royalty Judges (we’ll call them “Judges” here) have proposed to modify the rules governing how those broadcasters are supposed to report the sound recordings that they stream to SoundExchange. The goal: to correct an anomaly introduced into the reporting rules earlier this year that appeared to give commercial broadcasters paying no more than the minimum $500 annual fee in royalties more favorable treatment than noncommercial broadcasters paying no more than that amount.

In a notice published in the Federal Register, the Judges have asked for comments on their proposal to reinstate certain reporting relief for noncommercial broadcasters that, until very recently, had long been available to those broadcasters.

You may recall that, under the statutory licenses provided by sections 112 and 114 of the Copyright Act, webcasters are required to report to SoundExchange certain information about the sound recordings they play. That information includes a recording’s title and featured artist as well as either the album title and record label or a special identifier for that recording known as the International Standard Recording Code (a/k/a “ISRC”). Webcasters also must report information regarding the number of listeners to those recordings – more on that below.

These requirements have long given preferential treatment to “minimum fee broadcasters.” That universe included licensees that (a) own or operate one or more FCC-licensed terrestrial AM or FM radio stations (check out the definition of “broadcaster”) and (b) pay no more than the $500 annual minimum fee in streaming royalties. Because both noncommercial and commercial entities may own or operate a licensed radio station, both noncommercial and commercial broadcasters historically have been eligible for the reporting benefits available to “minimum fee broadcasters.” Those benefits have included the ability to:

  1. report eight weeks of sound recording usage per year (two weeks per calendar quarter) instead of the 24/7 reports generally required of others; and
  2. report a playlist of sound recordings streamed along with aggregate tuning hours in a particular reporting period without having to link audience levels with specific sound recordings, as others must do.

But a wrinkle cropped up earlier this year. In a pair of publications (the first here, with a technical amendment here), the Judges expanded the availability of these reporting benefits described above to an additional class of licensees – “noncommercial educational webcasters.” The new class includes noncommercial webcasters that are affiliated with an accredited educational institution (think schools, colleges, and universities) and whose operations are staffed substantially by enrolled students. The Judges have said that their goal behind this change was “to expand relaxed reporting requirements th[e]n available to Minimum Fee Broadcasters to certain nonprofit educational webcasters that had previously been denied those expanded relaxed reporting requirements.”

The complication: in implementing this change, the Judges substituted a new term – “Eligible Minimum Fee Webcaster” – for “minimum fee broadcaster.” And in defining that new term, they did so (as they acknowledged in their proposed rule) “too narrowly.” “Too narrowly” in that it “arguably exclude[s] noncommercial minimum fee broadcasters, a category that the Judges had intended to include.” This arguable exclusion occurred because the Judges swapped out the prior definition of “broadcaster” used to define the types of “minimum fee broadcasters” eligible for reporting relief – i.e., a licensee that owns or operates one or more FCC-licensed terrestrial AM or FM radio stations – with a new definition that expressly excluded noncommercial entities.  As a result, under the new rule, commercial minimum fee broadcasters would continue to be eligible for reporting relief, but noncommercial minimum fee broadcasters no longer would be.

The Judges have now proposed to correct this apparently inadvertent oversight. Comments on the proposed change must be filed by September 9, 2016.

It’s hard to argue that noncommercial broadcasters should be treated more harshly under the reporting rules than commercial broadcasters. In fact, both types of radio broadcasters face unique reporting challenges that merit special consideration because broadcasters’ main business is over-the-air radio, not streaming, and their systems were designed with over-the-air radio, not streaming, in mind. (Interested in more detail? NAB and the Radio Music License Committee submitted extensive comments in a different reporting rulemaking that described some of these challenges.)

In any event, we’re not expecting any fierce or widespread opposition to the Judges’ proposed amendment, which would restore the prior status quo for noncommercial broadcasters. One never knows for sure, though, so we’ll continue to follow developments on the reporting side and will keep you posted.

**Side note: Another rulemaking proceeding proposing to overhaul the reporting rules much more comprehensively is still open. We’ll keep an eye out for developments on that front.

[Blogmeister’s Note: Our blogger, Karyn Ablin, proposed the change to the Judges on behalf of NAB and the National Religious Broadcasters Noncommercial Music License Committee.]