The Copyright Royalty Judges final determination of rates and terms for mechanical and digital phonorecord delivery (DPD) was published yesterday (Jan. 26) in the Federal Register, which means that interested parties now have only 30 days from that date to appeal the ruling before it becomes set in stone.

At the same time, the Copyright Office Register also issued, and published in the Federal Register, its review of the CRB's final determination, raising questions on whether the CRB ruling is final.

According to the Copyright Office Register, the CRB judges did not refer two novel questions of law to the Register as they were required to do. They were also in error in their conclusion regarding both their and the Register's authority to review and accept all aspects of the settlement between the record labels, the music publishers and the digital music service providers.

In each instance, the Register suggested wording that should be added to the final determination, which would correct or clarify the issues in question. But unless the CRB judges incorporate the suggested wording, industry executives are worried that the Register's review could leave the final determination prone to litigation challenges in the areas specifically labeled by the Register as errors on the part of the CRB.

The Register's Review says that the CRB judges failure to refer DiMA's question of what constitutes a DPD to the Register was an error the led to the adoption of a regulation that overstates the scope of Section 115 license of the U.S. Copyright Law. The Register suggests that the wording of the regulation in the CRB determinations should be redrafted to clarify that an interactive stream is an incidental DPD, otherwise the regulation's wording is too broad.

The Register also appear to question whether the CRB Judges have the right to set royalty payments to start in 180 days of the publication of the determination, and instead suggests that it should start within the "20th day of each month and shall include all royalties" for the next preceding month.

The Register, however, states that the CRB Judges have the authority to determine the date the adopted rates and terms take effect, if the purpose of the regulation on timing and payment is to provide relief to the licensees.

Finally, according to one knowledgeable executive's interpretation of the Review, the register seems to be questioning whether the 24 cents ringtone royalty warrants the 9.1 cents rate set by individual track downloads.

That source says he expects that all parties will abide by the settlement and the CRB judges determination, instead of looking to exploit those elements from the Register's Review that are favorable to each participant.

But apart from the questions raised by the Register's Review, the publishers and digital service providers are still waiting to see if the labels appeal the CRB determination because of their opposition to the late fee imposed on royalty payments from labels to publishers.

The RIAA already asked the CRB to review that component of its rulings, and the CRB affirmed it. The now ongoing 30-day window for appeals represents the labels' last chance to avert a late fee payment, which has been set at 1.5% fine.

Questions? Comments? Let us know: @billboardbiz

Print