and the value is allocated 5% to the Section 112 license and 95% to the Section 114 license,
consistent with the current regulations applicable to webcasters, broadcasters, SDARS, and new
subscription services.^3160
In a decision also published on April 17, 2013, the Register of Copyrights determined
that it was legal error for the CRB to apply the four factors set forth in Section 801(b)(1) to
establish 7.5% as a benchmark royalty rate upon which to base escalating royalty rates for future
years, but then not to apply (or reapply) the Section 801(b)(1) factors to each of the escalated
royalty rates.^3161 In response to the Register’s determination, the CRB on May 28, 2013
published a modification to its April 17, 2013 determination.^3162 Section 803(c)(4) authorizes
the CRB to issue amendments to a written determination to correct any technical or clerical
errors in the determination or to modify the terms, but not the rates, of royalty payments in
response to unforeseen circumstances that would frustrate the proper implementation of such
determination. The CRB determined that a supplemental review of the application of the Section
801(b)(1) factors was technical in nature and was therefore amenable to correction pursuant to
Section 803(c)(4). Accordingly, in its modified determination, the CRB applied the Section
801(b)(1) factors specifically to the prospective escalated royalty rates, concluding that the
escalated rates were appropriate under the factors and should therefore be left unchanged.^3163
(b) Eligible Nonsubscription Services (Webcasters)While the CARP proceedings for eligible nonsubscription services were pending, the
major record labels and representatives of various FCC-licensed broadcasters reached an
agreement in Dec. 2001 on royalty rates to be paid by FCC-licensed broadcasters when they
simultaneously stream their AM/FM broadcasts during the period from Oct. 28, 1998 through
Dec. 31, 2008.^3164 The settling parties submitted a request to the Copyright Office to withdraw
from the CARP, further requesting that the Copyright Office withdraw the issue of AM/FM
streaming from the CARP and publish the settled rates in the Federal Register for public
comment after the CARP had delivered its report on the remaining issues in the proceeding.
They requested that, if there were no objections to the published settled rates, the Librarian of
Congress adopt those rates. The settling parties insisted, however, that the settled rates not be
revealed to the CARP before the CARP’s determination of the royalty rates that should apply to
nonsubscription digital audio transmissions other than AM/FM streaming (i.e., webcasting).^3165
(^3160) Id. at 23056.
(^3161) 78 Fed. Reg. 22913 (Apr. 17, 2013).
(^3162) 78 Fed. Reg. 31842 (May 28, 2013). In its modification, the CRB noted, “Although the Register’s decision
does not changes the rates and terms set in the [April 17, 2013 determination], her opinion is binding on the
Judges prospectively.” Id. at 31843.
(^3163) Id. at 31843-46.
(^3164) Order, Docket No. 2000-9 CARP DTRA 1&2 (Jan. 7, 2002), at 1.
(^3165) Id.