The Copyright Office rejected the settling parties’ requests, noting that neither the
copyright statute nor existing regulations provided for negotiation and settlement of generally
applicable royalty rates after a CARP has been empaneled. The Copyright Office therefore ruled
that the AM/FM streaming rate would have to be resolved in the CARP proceeding, and further
noted that the parties were free to make a joint submission to the CARP urging that it adopt the
rates upon which they had agreed.^3166
The CARP issued its ruling on Feb. 20, 2002, setting the recommended performance fees
at 0.14 cents per performance for webcasting to Internet listeners for free and at 0.07 cents per
performance for simultaneous webcasting of AM/FM broadcasts by traditional FCC-licensed
broadcasters.^3167 The CARP’s recommendations were reviewed by the Copyright Office, which
recommended to the Librarian of Congress that the Librarian reject the rates set forth in the
CARP’s report. On June 20, 2002, the Librarian published his final decision on the matter, which
abandoned the CARP’s two-tiered rate structure of 0.14 cents per performance for Internet-only
transmissions and 0.07 cents for each retransmission of a performance in an AM/FM radio
broadcast, deciding instead that the rate of 0.07 cents should apply to both types of transmission.
The foregoing rates applied for the period from Oct. 28, 1998 through Dec. 31, 2002.^3168 The
Register of Copyright’s rationale for rejection of the CARP rates, together with the Librarian’s
order adopting the Register’s recommendation, were published on July 8, 2003 at 67 Fed. Reg.
- The D.C. Circuit rejected various challenges to the Librarian’s decision, allowing it to
stand.^3169
On Jan. 30, 2002, the Copyright Office announced the initiation of the next voluntary six-
month negotiation period for determining reasonable rates and terms for eligible nonsubscription
services for the 2003-2004 period.^3170 No settlements were reached and the Copyright Office on
Nov. 20, 2002 requested interested parties to file notices of intent to participate in, and written
comments and proposals for the scheduling of, a CARP proceeding.^3171
On Dec. 4, 2002, President Bush signed into law the Small Webcaster Settlement Act of
2002 (“SWSA”), Pub. L. 107-321, 116 Stat. 2780, which amended the royalty rates to be paid for
the Section 112 and Section 114 statutory licenses by an “eligible small webcaster” and by
noncommercial webcasters. The SWSA is the legislative embodiment of an agreement
negotiated between small webcasters and the RIAA.^3172 Among other things, the SWSA allows
SoundExchange, the Receiving Agent designated by the Librarian of Congress in his June 20,
(^3166) Id. at 1-2.
(^3167) The CARP Report was available online as of Feb. 20, 2002 at
http://www.loc.gov/copyright/carp/webcasting_rates.html.
(^3168) Librarian of Congress, “Webcasting Determination,” available as of June 21, 2002 at
http://www.copyright.gov/carp/webcasting_rates_final.html.
(^3169) Beethoven.com LLC v. Librarian of Congress, 394 F.3d 939 (D.C. Cir. 2005).
(^3170) 67 Fed. Reg. 4472 (Jan. 30, 2002).
(^3171) 67 Fed. Reg. 70093 (Nov. 20, 2002).
(^3172) The agreement is published at 67 Fed. Reg. 78510 (Dec. 24, 2002).