    <DOC>
    [DOCID: f:publ419.108]

    [[Page 118 STAT. 2341]]

    Public Law 108-419
    108th Congress

                                     An Act

    To amend title 17, United States Code, to replace copyright arbitration
          royalty panels with Copyright Royalty Judges, and for other
                purposes. <<NOTE: Nov. 30, 2004 -  [H.R. 1417]>>

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled, <<NOTE: Copyright
    Royalty and Distribution Reform Act of 2004.>>

    SECTION 1. SHORT TITLE. <<NOTE: 17 USC 101 note.>>

        This Act may be cited as the ``Copyright Royalty and Distribution
    Reform Act of 2004''.

    SEC. 2. REFERENCE.

        Except as otherwise expressly provided, whenever in this Act an
    amendment or repeal is expressed in terms of an amendment to, or repeal
    of, a section or other provision, the reference shall be considered to
    be made to a section or other provision of title 17, United States Code.

    SEC. 3. COPYRIGHT ROYALTY JUDGE AND STAFF.

        (a) In General.--Chapter 8 is amended to read as follows:

              ``CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES

    ``Sec.
    ``801. Copyright Royalty Judges; appointment and functions.
    ``802. Copyright Royalty Judgeships; staff.
    ``803. Proceedings of Copyright Royalty Judges.
    ``804. Institution of proceedings.
    ``805. General rule for voluntarily negotiated agreements.

    ``Sec. 801. Copyright Royalty Judges; appointment and functions

        ``(a) Appointment.--The Librarian of Congress shall appoint 3 full-
    time Copyright Royalty Judges, and shall appoint 1 of the 3 as the Chief
    Copyright Royalty Judge. The Librarian shall make appointments to such
    positions after consultation with the Register of Copyrights.
        ``(b) Functions.--Subject to the provisions of this chapter, the
    functions of the Copyright Royalty Judges shall be as follows:
                ``(1) To make determinations and adjustments of reasonable
            terms and rates of royalty payments as provided in sections
            112(e), 114, 115, 116, 118, 119 and 1004. The rates applicable
            under sections 114(f)(1)(B), 115, and 116 shall be calculated to
            achieve the following objectives:
                        ``(A) To maximize the availability of creative works
                    to the public.

    [[Page 118 STAT. 2342]]

                        ``(B) To afford the copyright owner a fair return
                    for his or her creative work and the copyright user a
                    fair income under existing economic conditions.
                        ``(C) To reflect the relative roles of the copyright
                    owner and the copyright user in the product made
                    available to the public with respect to relative
                    creative contribution, technological contribution,
                    capital investment, cost, risk, and contribution to the
                    opening of new markets for creative expression and media
                    for their communication.
                        ``(D) To minimize any disruptive impact on the
                    structure of the industries involved and on generally
                    prevailing industry practices.
                ``(2) To make determinations concerning the adjustment of
            the copyright royalty rates under section 111 solely in
            accordance with the following provisions:
                        ``(A) The rates established by section 111(d)(1)(B)
                    may be adjusted to reflect--
                              ``(i) national monetary inflation or
                          deflation; or
                              ``(ii) changes in the average rates charged
                          cable subscribers for the basic service of
                          providing secondary transmissions to maintain the
                          real constant dollar level of the royalty fee per
                          subscriber which existed as of the date of October
                          19, 1976,
                    except that--
                              ``(I) if the average rates charged cable
                          system subscribers for the basic service of
                          providing secondary transmissions are changed so
                          that the average rates exceed national monetary
                          inflation, no change in the rates established by
                          section 111(d)(1)(B) shall be permitted; and
                              ``(II) no increase in the royalty fee shall be
                          permitted based on any reduction in the average
                          number of distant signal equivalents per
                          subscriber.
                    The Copyright Royalty Judges may consider all factors
                    relating to the maintenance of such level of payments,
                    including, as an extenuating factor, whether the
                    industry has been restrained by subscriber rate
                    regulating authorities from increasing the rates for the
                    basic service of providing secondary transmissions.
                        ``(B) In the event that the rules and regulations of
                    the Federal Communications Commission are amended at any
                    time after April 15, 1976, to permit the carriage by
                    cable systems of additional television broadcast signals
                    beyond the local service area of the primary
                    transmitters of such signals, the royalty rates
                    established by section 111(d)(1)(B) may be adjusted to
                    ensure that the rates for the additional distant signal
                    equivalents resulting from such carriage are reasonable
                    in the light of the changes effected by the amendment to
                    such rules and regulations. In determining the
                    reasonableness of rates proposed following an amendment
                    of Federal Communications Commission rules and
                    regulations, the Copyright Royalty Judges shall
                    consider, among other factors, the economic impact on
                    copyright owners and users; except that no adjustment in
                    royalty rates shall be made under this subparagraph with
                    respect to any distant signal equivalent or fraction
                    thereof represented by--

    [[Page 118 STAT. 2343]]

                              ``(i) carriage of any signal permitted under
                          the rules and regulations of the Federal
                          Communications Commission in effect on April 15,
                          1976, or the carriage of a signal of the same type
                          (that is, independent, network, or noncommercial
                          educational) substituted for such permitted
                          signal; or
                              ``(ii) a television broadcast signal first
                          carried after April 15, 1976, pursuant to an
                          individual waiver of the rules and regulations of
                          the Federal Communications Commission, as such
                          rules and regulations were in effect on April 15,
                          1976.
                        ``(C) In the event of any change in the rules and
                    regulations of the Federal Communications Commission
                    with respect to syndicated and sports program
                    exclusivity after April 15, 1976, the rates established
                    by section 111(d)(1)(B) may be adjusted to assure that
                    such rates are reasonable in light of the changes to
                    such rules and regulations, but any such adjustment
                    shall apply only to the affected television broadcast
                    signals carried on those systems affected by the change.
                        ``(D) The gross receipts limitations established by
                    section 111(d)(1) (C) and (D) shall be adjusted to
                    reflect national monetary inflation or deflation or
                    changes in the average rates charged cable system
                    subscribers for the basic service of providing secondary
                    transmissions to maintain the real constant dollar value
                    of the exemption provided by such section, and the
                    royalty rate specified therein shall not be subject to
                    adjustment.
                ``(3)(A) To authorize the distribution, under sections 111,
            119, and 1007, of those royalty fees collected under sections
            111, 119, and 1005, as the case may be, to the extent that the
            Copyright Royalty Judges have found that the distribution of
            such fees is not subject to controversy.
                ``(B) In cases where the Copyright Royalty Judges determine
            that controversy exists, the Copyright Royalty Judges shall
            determine the distribution of such fees, including partial
            distributions, in accordance with section 111, 119, or 1007, as
            the case may be.
                ``(C) The Copyright Royalty Judges may make a partial
            distribution of such fees during the pendency of the proceeding
            under subparagraph (B) if all participants under section
            803(b)(2) in the proceeding that are entitled to receive those
            fees that are to be partially distributed--
                        ``(i) agree to such partial distribution;
                        ``(ii) sign an agreement obligating them to return
                    any excess amounts to the extent necessary to comply
                    with the final determination on the distribution of the
                    fees made under subparagraph (B);
                        ``(iii) file the agreement with the Copyright
                    Royalty Judges; and
                        ``(iv) agree that such funds are available for
                    distribution.
                ``(D) The Copyright Royalty Judges and any other officer or
            employee acting in good faith in distributing funds under
            subparagraph (C) shall not be held liable for the payment of any
            excess fees under subparagraph (C). The Copyright

    [[Page 118 STAT. 2344]]

            Royalty Judges shall, at the time the final determination is
            made, calculate any such excess amounts.
                ``(4) To accept or reject royalty claims filed under
            sections 111, 119, and 1007, on the basis of timeliness or the
            failure to establish the basis for a claim.
                ``(5) To accept or reject rate adjustment petitions as
            provided in section 804 and petitions to participate as provided
            in section 803(b) (1) and (2).
                ``(6) To determine the status of a digital audio recording
            device or a digital audio interface device under sections 1002
            and 1003, as provided in section 1010.
                ``(7)(A) To adopt as a basis for statutory terms and rates
            or as a basis for the distribution of statutory royalty
            payments, an agreement concerning such matters reached among
            some or all of the participants in a proceeding at any time
            during the proceeding, except that--
                        ``(i) the Copyright Royalty Judges shall provide to
                    those that would be bound by the terms, rates, or other
                    determination set by any agreement in a proceeding to
                    determine royalty rates an opportunity to comment on the
                    agreement and shall provide to participants in the
                    proceeding under section 803(b)(2) that would be bound
                    by the terms, rates, or other determination set by the
                    agreement an opportunity to comment on the agreement and
                    object to its adoption as a basis for statutory terms
                    and rates; and
                        ``(ii) the Copyright Royalty Judges may decline to
                    adopt the agreement as a basis for statutory terms and
                    rates for participants that are not parties to the
                    agreement, if any participant described in clause (i)
                    objects to the agreement and the Copyright Royalty
                    Judges conclude, based on the record before them if one
                    exists, that the agreement does not provide a reasonable
                    basis for setting statutory terms or rates.
                ``(B) License agreements voluntarily negotiated pursuant to
            section 112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or
            118(b)(2) that do not result in statutory terms and rates shall
            not be subject to clauses (i) and (ii) of subparagraph (A).
                ``(C) Interested parties may negotiate and agree to, and the
            Copyright Royalty Judges may adopt, an agreement that specifies
            as terms notice and recordkeeping requirements that apply in
            lieu of those that would otherwise apply under regulations.
                ``(8) To perform other duties, as assigned by the Register
            of Copyrights within the Library of Congress, except as provided
            in section 802(g), at times when Copyright Royalty Judges are
            not engaged in performing the other duties set forth in this
            section.

        ``(c) Rulings.--The Copyright Royalty Judges may make any necessary
    procedural or evidentiary rulings in any proceeding under this chapter
    and may, before commencing a proceeding under this chapter, make any
    such rulings that would apply to the proceedings conducted by the
    Copyright Royalty Judges.
        ``(d) Administrative Support.--The Librarian of Congress shall
    provide the Copyright Royalty Judges with the necessary administrative
    services related to proceedings under this chapter.

    [[Page 118 STAT. 2345]]

        ``(e) Location in Library of Congress.--The offices of the Copyright
    Royalty Judges and staff shall be in the Library of Congress.

    ``Sec. 802. Copyright Royalty Judgeships; staff

        ``(a) Qualifications of Copyright Royalty Judges.--
                ``(1) In general.--Each Copyright Royalty Judge shall be an
            attorney who has at least 7 years of legal experience. The Chief
            Copyright Royalty Judge shall have at least 5 years of
            experience in adjudications, arbitrations, or court trials. Of
            the other 2 Copyright Royalty Judges, 1 shall have significant
            knowledge of copyright law, and the other shall have significant
            knowledge of economics. An individual may serve as a Copyright
            Royalty Judge only if the individual is free of any financial
            conflict of interest under subsection (h).
                ``(2) Definition.--In this subsection, the term
            `adjudication' has the meaning given that term in section 551 of
            title 5, but does not include mediation.

        ``(b) Staff.--The Chief Copyright Royalty Judge shall hire 3 full-
    time staff members to assist the Copyright Royalty Judges in performing
    their functions.
        ``(c) Terms.--The individual first appointed as the Chief Copyright
    Royalty Judge shall be appointed to a term of 6 years, and of the
    remaining individuals first appointed as Copyright Royalty Judges, 1
    shall be appointed to a term of 4 years, and the other shall be
    appointed to a term of 2 years. Thereafter, the terms of succeeding
    Copyright Royalty Judges shall each be 6 years. An individual serving as
    a Copyright Royalty Judge may be reappointed to subsequent terms. The
    term of a Copyright Royalty Judge shall begin when the term of the
    predecessor of that Copyright Royalty Judge ends. When the term of
    office of a Copyright Royalty Judge ends, the individual serving that
    term may continue to serve until a successor is selected.
        ``(d) Vacancies or Incapacity.--
                ``(1) Vacancies.--If a vacancy should occur in the position
            of Copyright Royalty Judge, the Librarian of Congress shall act
            expeditiously to fill the vacancy, and may appoint an interim
            Copyright Royalty Judge to serve until another Copyright Royalty
            Judge is appointed under this section. An individual appointed
            to fill the vacancy occurring before the expiration of the term
            for which the predecessor of that individual was appointed shall
            be appointed for the remainder of that term.
                ``(2) Incapacity.--In the case in which a Copyright Royalty
            Judge is temporarily unable to perform his or her duties, the
            Librarian of Congress may appoint an interim Copyright Royalty
            Judge to perform such duties during the period of such
            incapacity.

        ``(e) Compensation.--
                ``(1) Judges.--The Chief Copyright Royalty Judge shall
            receive compensation at the rate of basic pay payable for level
            AL-1 for administrative law judges pursuant to section 5372(b)
            of title 5, and each of the other two Copyright Royalty Judges
            shall receive compensation at the rate of basic pay payable for
            level AL-2 for administrative law judges pursuant to such
            section. The compensation of the Copyright Royalty Judges shall
            not be subject to any regulations adopted by the Office

    [[Page 118 STAT. 2346]]

            of Personnel Management pursuant to its authority under section
            5376(b)(1) of title 5.
                ``(2) Staff members.--Of the staff members appointed under
            subsection (b)--
                        ``(A) the rate of pay of 1 staff member shall be not
                    more than the basic rate of pay payable for level 10 of
                    GS-15 of the General Schedule;
                        ``(B) the rate of pay of 1 staff member shall be not
                    less than the basic rate of pay payable for GS-13 of the
                    General Schedule and not more than the basic rate of pay
                    payable for level 10 of GS-14 of such Schedule; and
                        ``(C) the rate of pay for the third staff member
                    shall be not less than the basic rate of pay payable for
                    GS-8 of the General Schedule and not more than the basic
                    rate of pay payable for level 10 of GS-11 of such
                    Schedule.
                ``(3) Locality pay.--All rates of pay referred to under this
            subsection shall include locality pay.

        ``(f) Independence of Copyright Royalty Judge.--
                ``(1) In making determinations.--
                        ``(A) In general.--(i) Subject to clause (ii) of
                    this subparagraph and subparagraph (B), the Copyright
                    Royalty Judges shall have full independence in making
                    determinations concerning adjustments and determinations
                    of copyright royalty rates and terms, the distribution
                    of copyright royalties, the acceptance or rejection of
                    royalty claims, rate adjustment petitions, and petitions
                    to participate, and in issuing other rulings under this
                    title, except that the Copyright Royalty Judges may
                    consult with the Register of Copyrights on any matter
                    other than a question of fact.
                        ``(ii) A Copyright Royalty Judge or Judges, or, by
                    motion to the Copyright Royalty Judge or Judges, any
                    participant in a proceeding may request an
                    interpretation by the Register of Copyrights concerning
                    any material question of substantive law (not including
                    questions of procedure before the Copyright Royalty
                    Judges, the ultimate adjustments and determinations of
                    copyright royalty rates and terms, the ultimate
                    distribution of copyright royalties, or the acceptance
                    or rejection of royalty claims, rate adjustment
                    petitions, or petitions to participate) concerning an
                    interpretation or construction of those provisions of
                    this title that are the subject of the proceeding. Any
                    such request for a written interpretation by the
                    Register of Copyrights shall be on the record.
                    Reasonable provision shall be made for comment by the
                    participants in the proceeding on the material question
                    of substantive law in such a way as to minimize
                    duplication and delay. <<NOTE: Deadline.>> Except as
                    provided in subparagraph (B), the Register of Copyrights
                    shall deliver to the Copyright Royalty Judges a response
                    within 14 days after the Register of Copyrigts receives
                    all of the briefs or comments of the
                    participants. <<NOTE: Records.>> Such decision shall be
                    in writing and shall be included by the Copyright
                    Royalty Judges in the record that accompanies their
                    final determination. If such a decision is timely
                    delivered to the Copyright Royalty Judges, the Copyright
                    Royalty Judges shall apply the legal interpretation
                    embodied in the response of the Register of Copyrights
                    in resolving material questions of substantive law.

    [[Page 118 STAT. 2347]]

                        ``(B) Novel questions.--(i) In any case in which a
                    novel material question of substantive law concerning an
                    interpretation of those provisions of this title that
                    are the subject of the proceeding is presented, the
                    Copyright Royalty Judges shall request a decision of the
                    Register of Copyrights, in writing, to resolve such
                    novel question. Reasonable provision shall be made for
                    comment on such request by the participants in the
                    proceeding, in such a way as to minimize duplication and
                    delay. <<NOTE: Deadline.>> The Register of Copyrights
                    shall transmit his or her decision to the Copyright
                    Royalty Judges within 30 days after the Register of
                    Copyrights receives all of the briefs or comments of the
                    participants. <<NOTE: Records.>> Such decision shall be
                    in writing and included by the Copyright Royalty Judges
                    in the record that accompanies their final
                    determination. If such a decision is timely delivered to
                    the Copyright Royalty Judges, the Copyright Royalty
                    Judges shall apply the legal determinations embodied in
                    the decision of the Register of Copyrights in resolving
                    material questions of substantive law.
                        ``(ii) In clause (i), a `novel question of law' is a
                    question of law that has not been determined in prior
                    decisions, determinations, and rulings described in
                    section 803(a).
                        ``(C) Consultation.--Notwithstanding the provisions
                    of subparagraph (A), the Copyright Royalty Judges shall
                    consult with the Register of Copyrights with respect to
                    any determination or ruling that would require that any
                    act be performed by the Copyright Office, and any such
                    determination or ruling shall not be binding upon the
                    Register of Copyrights.
                        ``(D) Review of legal conclusions by the register of
                    copyrights.--The Register of Copyrights may review for
                    legal error the resolution by the Copyright Royalty
                    Judges of a material question of substantive law under
                    this title that underlies or is contained in a final
                    determination of the Copyright Royalty
                    Judges. <<NOTE: Records.>> If the Register of Copyrights
                    concludes, after taking into consideration the views of
                    the participants in the proceeding, that any resolution
                    reached by the Copyright Royalty Judges was in material
                    error, the Register of Copyrights shall issue a written
                    decision correcting such legal error, which shall be
                    made part of the record of the
                    proceeding. <<NOTE: Deadline.>> The Register of
                    Copyrights shall issue such written decision not later
                    than 60 days after the date on which the final
                    determination by the Copyright Royalty Judges is
                    issued. <<NOTE: Federal
                    Register, publication.>> Additionally, the Register of
                    Copyrights shall cause to be published in the Federal
                    Register such written decision, together with a specific
                    identification of the legal conclusion of the Copyright
                    Royalty Judges that is determined to be erroneous. As to
                    conclusions of substantive law involving an
                    interpretation of the statutory provisions of this
                    title, the decision of the Register of Copyrights shall
                    be binding as precedent upon the Copyright Royalty
                    Judges in subsequent proceedings under this chapter.
                    When a decision has been rendered pursuant to this
                    subparagraph, the Register of Copyrights may, on the
                    basis of and in accordance with such decision, intervene
                    as of right in any appeal of a final determination of
                    the Copyright Royalty Judges

    [[Page 118 STAT. 2348]]

                    pursuant to section 803(d) in the United States Court of
                    Appeals for the District of Columbia Circuit. If, prior
                    to intervening in such an appeal, the Register of
                    Copyrights gives notification to, and undertakes to
                    consult with the Attorney General with respect to such
                    intervention, and the Attorney General fails, within a
                    reasonable period after receiving such notification, to
                    intervene in such appeal, the Register of Copyrights may
                    intervene in such appeal in his or her own name by any
                    attorney designated by the Register of Copyrights for
                    such purpose. Intervention by the Register of Copyrights
                    in his or her own name shall not preclude the Attorney
                    General from intervening on behalf of the United States
                    in such an appeal as may be otherwise provided or
                    required by law.
                        ``(E) Effect on judicial review.--Nothing in this
                    section shall be interpreted to alter the standard
                    applied by a court in reviewing legal determinations
                    involving an interpretation or construction of the
                    provisions of this title or to affect the extent to
                    which any construction or interpretation of the
                    provisions of this title shall be accorded deference by
                    a reviewing court.
                ``(2) Performance appraisals.--
                        ``(A) In general.--Notwithstanding any other
                    provision of law or any regulation of the Library of
                    Congress, and subject to subparagraph (B), the Copyright
                    Royalty Judges shall not receive performance appraisals.
                        ``(B) Relating to sanction or removal.--To the
                    extent that the Librarian of Congress adopts regulations
                    under subsection (h) relating to the sanction or removal
                    of a Copyright Royalty Judge and such regulations
                    require documentation to establish the cause of such
                    sanction or removal, the Copyright Royalty Judge may
                    receive an appraisal related specifically to the cause
                    of the sanction or removal.

        ``(g) Inconsistent Duties Barred.--No Copyright Royalty Judge may
    undertake duties that conflict with his or her duties and
    responsibilities as a Copyright Royalty Judge.
        ``(h) <<NOTE: Regulations.>> Standards of Conduct.--The Librarian of
    Congress shall adopt regulations regarding the standards of conduct,
    including financial conflict of interest and restrictions against ex
    parte communications, which shall govern the Copyright Royalty Judges
    and the proceedings under this chapter.

        ``(i) Removal or Sanction.--The Librarian of Congress may sanction
    or remove a Copyright Royalty Judge for violation of the standards of
    conduct adopted under subsection (h), misconduct, neglect of duty, or
    any disqualifying physical or mental disability.
    Any <<NOTE: Notice.>> such sanction or removal may be made only after
    notice and opportunity for a hearing, but the Librarian of Congress may
    suspend the Copyright Royalty Judge during the pendency of such hearing.
    The Librarian shall appoint an interim Copyright Royalty Judge during
    the period of any such suspension.

    ``Sec. 803. Proceedings of Copyright Royalty Judges

        ``(a) Proceedings.--
                ``(1) <<NOTE: Regulations. Records.>> In general.--The
            Copyright Royalty Judges shall act in accordance with
            regulations issued by the Copyright Royalty Judges and the
            Librarian of Congress, and on the basis of

    [[Page 118 STAT. 2349]]

            a written record, prior determinations and interpretations of
            the Copyright Royalty Tribunal, Librarian of Congress, the
            Register of Copyrights, and the Copyright Royalty Judges (to the
            extent those determinations are not inconsistent with a decision
            of the Register of Copyrights that was timely delivered to the
            Copyright Royalty Judges pursuant to section 802(f)(1) (A) or
            (B), or with a decision of the Register of Copyrights pursuant
            to section 802(f)(1)(D)), under this chapter, and decisions of
            the court of appeals under this chapter before, on, or after the
            effective date of the Copyright Royalty and Distribution Reform
            Act of 2004.
                ``(2) Judges acting as panel and individually.--The
            Copyright Royalty Judges shall preside over hearings in
            proceedings under this chapter en banc. The Chief Copyright
            Royalty Judge may designate a Copyright Royalty Judge to preside
            individually over such collateral and administrative
            proceedings, and over such proceedings under paragraphs (1)
            through (5) of subsection (b), as the Chief Judge considers
            appropriate.
                ``(3) Determinations.--Final determinations of the Copyright
            Royalty Judges in proceedings under this chapter shall be made
            by majority vote. A Copyright Royalty Judge dissenting from the
            majority on any determination under this chapter may issue his
            or her dissenting opinion, which shall be included with the
            determination.

        ``(b) Procedures.--
                ``(1) Initiation.--
                        ``(A) <<NOTE: Federal
                    Register, publication. Notices. Deadlines.>> Call for
                    petitions to participate.--(i) The Copyright Royalty
                    Judges shall cause to be published in the Federal
                    Register notice of commencement of proceedings under
                    this chapter, calling for the filing of petitions to
                    participate in a proceeding under this chapter for the
                    purpose of making the relevant determination under
                    section 111, 112, 114, 115, 116, 118, 119, 1004, or
                    1007, as the case may be--
                              ``(I) promptly upon a determination made under
                          section 804(a);
                              ``(II) by no later than January 5 of a year
                          specified in paragraph (2) of section 804(b) for
                          the commencement of proceedings;
                              ``(III) by no later than January 5 of a year
                          specified in subparagraph (A) or (B) of paragraph
                          (3) of section 804(b) for the commencement of
                          proceedings, or as otherwise provided in
                          subparagraph (A) or (C) of such paragraph for the
                          commencement of proceedings;
                              ``(IV) as provided under section 804(b)(8); or
                              ``(V) by no later than January 5 of a year
                          specified in any other provision of section 804(b)
                          for the filing of petitions for the commencement
                          of proceedings, if a petition has not been filed
                          by that date.
                        ``(ii) Petitions to participate shall be filed by no
                    later than 30 days after publication of notice of
                    commencement of a proceeding under clause (i), except
                    that the Copyright Royalty Judges may, for substantial
                    good cause shown and if there is no prejudice to the
                    participants that have already filed petitions, accept
                    late petitions to participate at any time up to the date
                    that is 90 days before the

    [[Page 118 STAT. 2350]]

                    date on which participants in the proceeding are to file
                    their written direct statements. Notwithstanding the
                    preceding sentence, petitioners whose petitions are
                    filed more than 30 days after publication of notice of
                    commencement of a proceeding are not eligible to object
                    to a settlement reached during the voluntary negotiation
                    period under paragraph (3), and any objection filed by
                    such a petitioner shall not be taken into account by the
                    Copyright Royalty Judges.
                        ``(B) Petitions to participate.--Each petition to
                    participate in a proceeding shall describe the
                    petitioner's interest in the subject matter of the
                    proceeding. Parties with similar interests may file a
                    single petition to participate.
                ``(2) Participation in general.--Subject to paragraph (4), a
            person may participate in a proceeding under this chapter,
            including through the submission of briefs or other information,
            only if--
                        ``(A) that person has filed a petition to
                    participate in accordance with paragraph (1) (either
                    individually or as a group under paragraph (1)(B)),
                    together with a filing fee of $150;
                        ``(B) the Copyright Royalty Judges have not
                    determined that the petition to participate is facially
                    invalid; and
                        ``(C) the Copyright Royalty Judges have not
                    determined, sua sponte or on the motion of another
                    participant in the proceeding, that the person lacks a
                    significant interest in the proceeding.
                ``(3) Voluntary negotiation period.--
                        ``(A) <<NOTE: Records.>> In general.--Promptly after
                    the date for filing of petitions to participate in a
                    proceeding, the Copyright Royalty Judges shall make
                    available to all participants in the proceeding a list
                    of such participants and shall initiate a voluntary
                    negotiation period among the participants.
                        ``(B) Length of proceedings.--The voluntary
                    negotiation period initiated under subparagraph (A)
                    shall be 3 months.
                        ``(C) Determination of subsequent proceedings.--At
                    the close of the voluntary negotiation proceedings, the
                    Copyright Royalty Judges shall, if further proceedings
                    under this chapter are necessary, determine whether and
                    to what extent paragraphs (4) and (5) will apply to the
                    parties.
                ``(4) Small claims procedure in distribution proceedings.--
                        ``(A) In general.--If, in a proceeding under this
                    chapter to determine the distribution of royalties, the
                    contested amount of a claim is $10,000 or less, the
                    Copyright Royalty Judges shall decide the controversy on
                    the basis of the filing of the written direct statement
                    by the participant, the response by any opposing
                    participant, and 1 additional response by each such
                    party. The participant asserting the claim shall not be
                    required to pay the filing fee under paragraph (2).
                        ``(B) Bad faith inflation of claim.--If the
                    Copyright Royalty Judges determine that a participant
                    asserts in

    [[Page 118 STAT. 2351]]

                    bad faith an amount in controversy in excess of $10,000
                    for the purpose of avoiding a determination under the
                    procedure set forth in subparagraph (A), the Copyright
                    Royalty Judges shall impose a fine on that participant
                    in an amount not to exceed the difference between the
                    actual amount distributed and the amount asserted by the
                    participant.
                ``(5) Paper proceedings.--The Copyright Royalty Judges in
            proceedings under this chapter may decide, sua sponte or upon
            motion of a participant, to determine issues on the basis of the
            filing of the written direct statement by the participant, the
            response by any opposing participant, and one additional
            response by each such participant. Prior to making such decision
            to proceed on such a paper record only, the Copyright Royalty
            Judges shall offer to all parties to the proceeding the
            opportunity to comment on the decision. The procedure under this
            paragraph--
                        ``(A) <<NOTE: Applicability.>> shall be applied in
                    cases in which there is no genuine issue of material
                    fact, there is no need for evidentiary hearings, and all
                    participants in the proceeding agree in writing to the
                    procedure; and
                        ``(B) may be applied under such other circumstances
                    as the Copyright Royalty Judges consider appropriate.
                ``(6) Regulations.--
                        ``(A) In general.--The Copyright Royalty Judges may
                    issue regulations to carry out their functions under
                    this title. All regulations issued by the Copyright
                    Royalty Judges are subject to the approval of the
                    Librarian of Congress. <<NOTE: Deadline.>> Not later
                    than 120 days after Copyright Royalty Judges or interim
                    Copyright Royalty Judges, as the case may be, are first
                    appointed after the enactment of the Copyright Royalty
                    and Distribution Reform Act of 2004, such judges shall
                    issue regulations to govern proceedings under this
                    chapter.
                        ``(B) <<NOTE: Applicability.>> Interim
                    regulations.--Until regulations are adopted under
                    subparagraph (A), the Copyright Royalty Judges shall
                    apply the regulations in effect under this chapter on
                    the day before the effective date of the Copyright
                    Royalty and Distribution Reform Act of 2004, to the
                    extent such regulations are not inconsistent with this
                    chapter, except that functions carried out under such
                    regulations by the Librarian of Congress, the Register
                    of Copyrights, or copyright arbitration royalty panels
                    that, as of such date of enactment, are to be carried
                    out by the Copyright Royalty Judges under this chapter,
                    shall be carried out by the Copyright Royalty Judges
                    under such regulations.
                        ``(C) Requirements.--Regulations issued under
                    subparagraph (A) shall include the following:
                              ``(i) <<NOTE: Deadlines. Records.>> The
                          written direct statements of all participants in a
                          proceeding under paragraph (2) shall be filed by a
                          date specified by the Copyright Royalty Judges,
                          which may be not earlier than 4 months, and not
                          later than 5 months, after the end of the
                          voluntary negotiation period under paragraph (3).
                          Notwithstanding the preceding sentence, the
                          Copyright Royalty Judges may allow a participant
                          in a proceeding to file an amended written direct
                          statement based on

    [[Page 118 STAT. 2352]]

                          new information received during the discovery
                          process, within 15 days after the end of the
                          discovery period specified in clause (iii).
                              ``(ii)(I) Following the submission to the
                          Copyright Royalty Judges of written direct
                          statements by the participants in a proceeding
                          under paragraph (2), the judges shall meet with
                          the participants for the purpose of setting a
                          schedule for conducting and completing discovery.
                          Such schedule shall be determined by the Copyright
                          Royalty Judges.
                              ``(II) In this chapter, the term `written
                          direct statements' means witness statements,
                          testimony, and exhibits to be presented in the
                          proceedings, and such other information that is
                          necessary to establish terms and rates, or the
                          distribution of royalty payments, as the case may
                          be, as set forth in regulations issued by the
                          Copyright Royalty Judges.
                              ``(iii) Hearsay may be admitted in proceedings
                          under this chapter to the extent deemed
                          appropriate by the Copyright Royalty Judges.
                              ``(iv) <<NOTE: Deadline.>> Discovery in such
                          proceedings shall be permitted for a period of 60
                          days, except for discovery ordered by the
                          Copyright Royalty Judges in connection with the
                          resolution of motions, orders, and disputes
                          pending at the end of such period.
                              ``(v) Any participant under paragraph (2) in a
                          proceeding under this chapter to determine royalty
                          rates may request of an opposing participant
                          nonprivileged documents directly related to the
                          written direct statement or written rebuttal
                          statement of that participant. Any objection to
                          such a request shall be resolved by a motion or
                          request to compel production made to the Copyright
                          Royalty Judges in accordance with regulations
                          adopted by the Copyright Royalty Judges. Each
                          motion or request to compel discovery shall be
                          determined by the Copyright Royalty Judges, or by
                          a Copyright Royalty Judge when permitted under
                          subsection (a)(2). Upon such motion, the Copyright
                          Royalty Judges may order discovery pursuant to
                          regulations established under this paragraph.
                              ``(vi)(I) Any participant under paragraph (2)
                          in a proceeding under this chapter to determine
                          royalty rates may, by means of written motion or
                          on the record, request of an opposing participant
                          or witness other relevant information and
                          materials if, absent the discovery sought, the
                          Copyright Royalty Judges' resolution of the
                          proceeding would be substantially impaired. In
                          determining whether discovery will be granted
                          under this clause, the Copyright Royalty Judges
                          may consider--
                                        ``(aa) whether the burden or expense
                                    of producing the requested information
                                    or materials outweighs the likely
                                    benefit, taking into account the needs
                                    and resources of the participants, the
                                    importance of the issues at stake, and
                                    the probative value of the requested
                                    information or materials in resolving
                                    such issues;

    [[Page 118 STAT. 2353]]

                                        ``(bb) whether the requested
                                    information or materials would be
                                    unreasonably cumulative or duplicative,
                                    or are obtainable from another source
                                    that is more convenient, less
                                    burdensome, or less expensive; and
                                        ``(cc) whether the participant
                                    seeking discovery has had ample
                                    opportunity by discovery in the
                                    proceeding or by other means to obtain
                                    the information sought.
                              ``(II) This clause shall not apply to any
                          proceeding scheduled to commence after December
                          31, 2010.
                              ``(vii) In a proceeding under this chapter to
                          determine royalty rates, the participants entitled
                          to receive royalties shall collectively be
                          permitted to take no more than 10 depositions and
                          secure responses to no more than 25
                          interrogatories, and the participants obligated to
                          pay royalties shall collectively be permitted to
                          take no more than 10 depositions and secure
                          responses to no more than 25 interrogatories. The
                          Copyright Royalty Judges shall resolve any
                          disputes among similarly aligned participants to
                          allocate the number of depositions or
                          interrogatories permitted under this clause.
                              ``(viii) <<NOTE: Applicability.>> The rules
                          and practices in effect on the day before the
                          effective date of the Copyright Royalty and
                          Distribution Reform Act of 2004, relating to
                          discovery in proceedings under this chapter to
                          determine the distribution of royalty fees, shall
                          continue to apply to such proceedings on and after
                          such effective date.
                              ``(ix) In proceedings to determine royalty
                          rates, the Copyright Royalty Judges may issue a
                          subpoena commanding a participant or witness to
                          appear and give testimony, or to produce and
                          permit inspection of documents or tangible things,
                          if the Copyright Royalty Judges' resolution of the
                          proceeding would be substantially impaired by the
                          absence of such testimony or production of
                          documents or tangible things. Such subpoena shall
                          specify with reasonable particularity the
                          materials to be produced or the scope and nature
                          of the required testimony. Nothing in this clause
                          shall preclude the Copyright Royalty Judges from
                          requesting the production by a nonparticipant of
                          information or materials relevant to the
                          resolution by the Copyright Royalty Judges of a
                          material issue of fact.
                              ``(x) The Copyright Royalty Judges shall order
                          a settlement conference among the participants in
                          the proceeding to facilitate the presentation of
                          offers of settlement among the participants. The
                          settlement conference shall be held during a 21-
                          day period following the end of the discovery
                          period and shall take place outside the presence
                          of the Copyright Royalty Judges.
                              ``(xi) No evidence, including exhibits, may be
                          submitted in the written direct statement or
                          written rebuttal statement of a participant
                          without a sponsoring witness, except where the
                          Copyright Royalty Judges have taken official
                          notice, or in the case of

    [[Page 118 STAT. 2354]]

                          incorporation by reference of past records, or for
                          good cause shown.

        ``(c) Determination of Copyright Royalty Judges.--
                ``(1) <<NOTE: Deadlines.>> Timing.--The Copyright Royalty
            Judges shall issue their determination in a proceeding not later
            than 11 months after the conclusion of the 21-day settlement
            conference period under subsection (b)(6)(C)(x), but, in the
            case of a proceeding to determine successors to rates or terms
            that expire on a specified date, in no event later than 15 days
            before the expiration of the then current statutory rates and
            terms.
                ``(2) Rehearings.--
                        ``(A) In general.--The Copyright Royalty Judges may,
                    in exceptional cases, upon motion of a participant in a
                    proceeding under subsection (b)(2), order a rehearing,
                    after the determination in the proceeding is issued
                    under paragraph (1), on such matters as the Copyright
                    Royalty Judges determine to be appropriate.
                        ``(B) <<NOTE: Deadline.>> Timing for filing
                    motion.--Any motion for a rehearing under subparagraph
                    (A) may only be filed within 15 days after the date on
                    which the Copyright Royalty Judges deliver to the
                    participants in the proceeding their initial
                    determination concerning rates and terms.
                        ``(C) Participation by opposing party not
                    required.--In any case in which a rehearing is ordered,
                    any opposing party shall not be required to participate
                    in the rehearing, except that nonparticipation may give
                    rise to the limitations with respect to judicial review
                    provided for in subsection (d)(1).
                        ``(D) No negative inference.--No negative inference
                    shall be drawn from lack of participation in a
                    rehearing.
                        ``(E) Continuity of rates and terms.--(i) If the
                    decision of the Copyright Royalty Judges on any motion
                    for a rehearing is not rendered before the expiration of
                    the statutory rates and terms that were previously in
                    effect, in the case of a proceeding to determine
                    successors to rates and terms that expire on a specified
                    date, then--
                              ``(I) <<NOTE: Effective date.>> the initial
                          determination of the Copyright Royalty Judges that
                          is the subject of the rehearing motion shall be
                          effective as of the day following the date on
                          which the rates and terms that were previously in
                          effect expire; and
                              ``(II) in the case of a proceeding under
                          section 114(f)(1)(C) or 114(f)(2)(C), royalty
                          rates and terms shall, for purposes of section
                          114(f)(4)(B), be deemed to have been set at those
                          rates and terms contained in the initial
                          determination of the Copyright Royalty Judges that
                          is the subject of the rehearing motion, as of the
                          date of that determination.
                        ``(ii) The pendency of a motion for a rehearing
                    under this paragraph shall not relieve persons obligated
                    to make royalty payments who would be affected by the
                    determination on that motion from providing the
                    statements of account and any reports of use, to the
                    extent required, and paying the royalties required under
                    the relevant determination or regulations.
                        ``(iii) <<NOTE: Deadlines.>> Notwithstanding clause
                    (ii), whenever royalties described in clause (ii) are
                    paid to a person other than

    [[Page 118 STAT. 2355]]

                    the Copyright Office, the entity designated by the
                    Copyright Royalty Judges to which such royalties are
                    paid by the copyright user (and any successor thereto)
                    shall, within 60 days after the motion for rehearing is
                    resolved or, if the motion is granted, within 60 days
                    after the rehearing is concluded, return any excess
                    amounts previously paid to the extent necessary to
                    comply with the final determination of royalty rates by
                    the Copyright Royalty Judges. Any underpayment of
                    royalties resulting from a rehearing shall be paid
                    within the same period.
                ``(3) <<NOTE: Records.>> Contents of determination.--A
            determination of the Copyright Royalty Judges shall be supported
            by the written record and shall set forth the findings of fact
            relied on by the Copyright Royalty Judges. Among other terms
            adopted in a determination, the Copyright Royalty Judges may
            specify notice and recordkeeping requirements of users of the
            copyrights at issue that apply in lieu of those that would
            otherwise apply under regulations.
                ``(4) Continuing jurisdiction.--The Copyright Royalty Judges
            may, with the approval of the Register of Copyrights, issue an
            amendment 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. <<NOTE: Federal
            Register, publication.>> Such amendment shall be set forth in a
            written addendum to the determination that shall be distributed
            to the participants of the proceeding and shall be published in
            the Federal Register.
                ``(5) Protective order.--The Copyright Royalty Judges may
            issue such orders as may be appropriate to protect confidential
            information, including orders excluding confidential information
            from the record of the determination that is published or made
            available to the public, except that any terms or rates of
            royalty payments or distributions may not be excluded.
                ``(6) <<NOTE: Deadline. Federal
            Register, publication.>> Publication of determination.--By no
            later than the end of the 60-day period provided in section
            802(f)(1)(D), the Librarian of Congress shall cause the
            determination, and any corrections thereto, to be published in
            the Federal Register. The Librarian of Congress shall also
            publicize the determination and corrections in such other manner
            as the Librarian considers appropriate, including, but not
            limited to, publication on the Internet. <<NOTE: Records.>> The
            Librarian of Congress shall also make the determination,
            corrections, and the accompanying record available for public
            inspection and copying.
                ``(7) Late payment.--A determination of Copyright Royalty
            Judges may include terms with respect to late payment, but in no
            way shall such terms prevent the copyright holder from asserting
            other rights or remedies provided under this title.

        ``(d) Judicial Review.--
                ``(1) <<NOTE: Deadlines.>> Appeal.--Any determination of the
            Copyright Royalty Judges under subsection (c) may, within 30
            days after the publication of the determination in the Federal
            Register, be appealed, to the United States Court of Appeals for
            the District of Columbia Circuit, by any aggrieved participant
            in the proceeding under subsection (b)(2) who fully participated
            in the proceeding and who would be bound by the determination.

    [[Page 118 STAT. 2356]]

            Any participant that did not participate in a rehearing may not
            raise any issue that was the subject of that rehearing at any
            stage of judicial review of the hearing determination. If no
            appeal is brought within that 30-day period, the determination
            of the Copyright Royalty Judges shall be final, and the royalty
            fee or determination with respect to the distribution of fees,
            as the case may be, shall take effect as set forth in paragraph
            (2).
                ``(2) <<NOTE: Effective dates.>> Effect of rates.--
                        ``(A) Expiration on specified date.--When this title
                    provides that the royalty rates and terms that were
                    previously in effect are to expire on a specified date,
                    any adjustment or determination by the Copyright Royalty
                    Judges of successor rates and terms for an ensuing
                    statutory license period shall be effective as of the
                    day following the date of expiration of the rates and
                    terms that were previously in effect, even if the
                    determination of the Copyright Royalty Judges is
                    rendered on a later date. A licensee shall be obligated
                    to continue making payments under the rates and terms
                    previously in effect until such time as rates and terms
                    for the successor period are established.
                    Whenever <<NOTE: Deadline.>> royalties pursuant to this
                    section are paid to a person other than the Copyright
                    Office, the entity designated by the Copyright Royalty
                    Judges to which such royalties are paid by the copyright
                    user (and any successor thereto) shall, within 60 days
                    after the final determination of the Copyright Royalty
                    Judges establishing rates and terms for a successor
                    period or the exhaustion of all rehearings or appeals of
                    such determination, if any, return any excess amounts
                    previously paid to the extent necessary to comply with
                    the final determination of royalty rates. Any
                    underpayment of royalties by a copyright user shall be
                    paid to the entity designated by the Copyright Royalty
                    Judges within the same period.
                        ``(B) Other cases.--In cases where rates and terms
                    have not, prior to the inception of an activity, been
                    established for that particular activity under the
                    relevant license, such rates and terms shall be
                    retroactive to the inception of activity under the
                    relevant license covered by such rates and terms. In
                    other cases where rates and terms do not expire on a
                    specified date, successor rates and terms shall take
                    effect on the first day of the second month that begins
                    after the publication of the determination of the
                    Copyright Royalty Judges in the Federal Register, except
                    as otherwise provided in this title, or by the Copyright
                    Royalty Judges, or as agreed by the participants in a
                    proceeding that would be bound by the rates and terms.
                    Except as otherwise provided in this title, the rates
                    and terms, to the extent applicable, shall remain in
                    effect until such successor rates and terms become
                    effective.
                        ``(C) Obligation to make payments.--
                              ``(i) The pendency of an appeal under this
                          subsection shall not relieve persons obligated to
                          make royalty payments under section 111, 112, 114,
                          115, 116, 118, 119, or 1003, who would be affected
                          by the determination on appeal, from--

    [[Page 118 STAT. 2357]]

                                        ``(I) providing the statements of
                                    account and any report of use; and
                                        ``(II) paying the royalties required
                                    under the relevant determination or
                                    regulations.
                        ``(ii) <<NOTE: Deadline.>> Notwithstanding clause
                    (i), whenever royalties described in clause (i) are paid
                    to a person other than the Copyright Office, the entity
                    designated by the Copyright Royalty Judges to which such
                    royalties are paid by the copyright user (and any
                    successor thereto) shall, within 60 days after the final
                    resolution of the appeal, return any excess amounts
                    previously paid (and interest thereon, if ordered
                    pursuant to paragraph (3)) to the extent necessary to
                    comply with the final determination of royalty rates on
                    appeal. Any underpayment of royalties resulting from an
                    appeal (and interest thereon, if ordered pursuant to
                    paragraph (3)) shall be paid within the same period.
                ``(3) Jurisdiction of court.--If the court, pursuant to
            section 706 of title 5, modifies or vacates a determination of
            the Copyright Royalty Judges, the court may enter its own
            determination with respect to the amount or distribution of
            royalty fees and costs, and order the repayment of any excess
            fees, the payment of any underpaid fees, and the payment of
            interest pertaining respectively thereto, in accordance with its
            final judgment. The court may also vacate the determination of
            the Copyright Royalty Judges and remand the case to the
            Copyright Royalty Judges for further proceedings in accordance
            with subsection (a).

        ``(e) Administrative Matters.--
                ``(1) Deduction of costs of library of congress and
            copyright office from filing fees.--
                        ``(A) Deduction from filing fees.--The Librarian of
                    Congress may, to the extent not otherwise provided under
                    this title, deduct from the filing fees collected under
                    subsection (b) for a particular proceeding under this
                    chapter the reasonable costs incurred by the Librarian
                    of Congress, the Copyright Office, and the Copyright
                    Royalty Judges in conducting that proceeding, other than
                    the salaries of the Copyright Royalty Judges and the 3
                    staff members appointed under section 802(b).
                        ``(B) Authorization of appropriations.--There are
                    authorized to be appropriated such sums as may be
                    necessary to pay the costs incurred under this chapter
                    not covered by the filing fees collected under
                    subsection (b). All funds made available pursuant to
                    this subparagraph shall remain available until expended.
                ``(2) Positions required for administration of compulsory
            licensing.--Section 307 of the Legislative Branch Appropriations
            Act, 1994, shall not apply to employee positions in the Library
            of Congress that are required to be filled in order to carry out
            section 111, 112, 114, 115, 116, 118, or 119 or chapter 10.

    ``Sec. 804. Institution of proceedings

        ``(a) <<NOTE: Notices. Federal Register, publication.>> Filing of
    Petition.--With respect to proceedings referred to in paragraphs (1) and
    (2) of section 801(b) concerning the determination or adjustment of
    royalty rates as provided in sections 111, 112, 114, 115, 116, 118, 119,
    and 1004, during the calendar

    [[Page 118 STAT. 2358]]

    years specified in the schedule set forth in subsection (b), any owner
    or user of a copyrighted work whose royalty rates are specified by this
    title, or are established under this chapter before or after the
    enactment of the Copyright Royalty and Distribution Reform Act of 2004,
    may file a petition with the Copyright Royalty Judges declaring that the
    petitioner requests a determination or adjustment of the rate. The
    Copyright Royalty Judges shall make a determination as to whether the
    petitioner has such a significant interest in the royalty rate in which
    a determination or adjustment is requested. If the Copyright Royalty
    Judges determine that the petitioner has such a significant interest,
    the Copyright Royalty Judges shall cause notice of this determination,
    with the reasons for such determination, to be published in the Federal
    Register, together with the notice of commencement of proceedings under
    this chapter. With respect to proceedings under paragraph (1) of section
    801(b) concerning the determination or adjustment of royalty rates as
    provided in sections 112 and 114, during the calendar years specified in
    the schedule set forth in subsection (b), the Copyright Royalty Judges
    shall cause notice of commencement of proceedings under this chapter to
    be published in the Federal Register as provided in section
    803(b)(1)(A).

        ``(b) Timing of Proceedings.--
                ``(1) Section 111 proceedings.--(A) A petition described in
            subsection (a) to initiate proceedings under section 801(b)(2)
            concerning the adjustment of royalty rates under section 111 to
            which subparagraph (A) or (D) of section 801(b)(2) applies may
            be filed during the year 2005 and in each subsequent fifth
            calendar year.
                ``(B) In order to initiate proceedings under section
            801(b)(2) concerning the adjustment of royalty rates under
            section 111 to which subparagraph (B) or (C) of section
            801(b)(2) applies, within 12 months after an event described in
            either of those subsections, any owner or user of a copyrighted
            work whose royalty rates are specified by section 111, or by a
            rate established under this chapter before or after the
            enactment of the Copyright Royalty and Distribution Reform Act
            of 2004, may file a petition with the Copyright Royalty Judges
            declaring that the petitioner requests an adjustment of the
            rate. The Copyright Royalty Judges shall then proceed as set
            forth in subsection (a) of this section. Any change in royalty
            rates made under this chapter pursuant to this subparagraph may
            be reconsidered in the year 2005, and each fifth calendar year
            thereafter, in accordance with the provisions in section
            801(b)(3) (B) or (C), as the case may be. A petition for
            adjustment of rates established by section 111(d)(1)(B) as a
            result of a change is the rules and regulations of the Federal
            Communications Commission shall set forth the change on which
            the petition is based.
                ``(C) <<NOTE: Effective date.>> Any adjustment of royalty
            rates under section 111 shall take effect as of the first
            accounting period commencing after the publication of the
            determination of the Copyright Royalty Judges in the Federal
            Register, or on such other date as is specified in that
            determination.
                ``(2) <<NOTE: Effective date.>> Certain section 112
            proceedings.--Proceedings under this chapter shall be commenced
            in the year 2007 to determine reasonable terms and rates of
            royalty payments for the activities described in section
            112(e)(1) relating to the

    [[Page 118 STAT. 2359]]

            limitation on exclusive rights specified by section
            114(d)(1)(C)(iv), to become effective on January 1, 2009. Such
            proceedings shall be repeated in each subsequent fifth calendar
            year.
                ``(3) <<NOTE: Effective dates. Termination date.>> Section
            114 and corresponding 112 proceedings.--
                        ``(A) For eligible nonsubscription services and new
                    subscription services.--Proceedings under this chapter
                    shall be commenced as soon as practicable after the
                    effective date of the Copyright Royalty and Distribution
                    Reform Act of 2004 to determine reasonable terms and
                    rates of royalty payments under sections 114 and 112 for
                    the activities of eligible nonsubscription transmission
                    services and new subscription services, to be effective
                    for the period beginning on January 1, 2006, and ending
                    on December 31, 2010. Such proceedings shall next be
                    commenced in January 2009 to determine reasonable terms
                    and rates of royalty payments, to become effective on
                    January 1, 2011. Thereafter, such proceedings shall be
                    repeated in each subsequent fifth calendar year.
                        ``(B) <<NOTE: Effective dates. Termination
                    dates.>> For preexisting subscription and satellite
                    digital audio radio services.--Proceedings under this
                    chapter shall be commenced in January 2006 to determine
                    reasonable terms and rates of royalty payments under
                    sections 114 and 112 for the activities of preexisting
                    subscription services, to be effective during the period
                    beginning on January 1, 2008, and ending on December 31,
                    2012, and preexisting satellite digital audio radio
                    services, to be effective during the period beginning on
                    January 1, 2007, and ending on December 31, 2012. Such
                    proceedings shall next be commenced in 2011 to determine
                    reasonable terms and rates of royalty payments, to
                    become effective on January 1, 2013. Thereafter, such
                    proceedings shall be repeated in each subsequent fifth
                    calendar year.
                        ``(C)(i) Notwithstanding any other provision of this
                    chapter, this subparagraph shall govern proceedings
                    commenced pursuant to section 114(f)(1)(C) and
                    114(f)(2)(C) concerning new types of services.
                        ``(ii) <<NOTE: Deadline. Notice.>> Not later than 30
                    days after a petition to determine rates and terms for a
                    new type of service that is filed by any copyright owner
                    of sound recordings, or such new type of service,
                    indicating that such new type of service is or is about
                    to become operational, the Copyright Royalty Judges
                    shall issue a notice for a proceeding to determine rates
                    and terms for such service.
                        ``(iii) The proceeding shall follow the schedule set
                    forth in such subsections (b), (c), and (d) of section
                    803, except that--
                              ``(I) <<NOTE: Deadline.>> the determination
                          shall be issued by not later than 24 months after
                          the publication of the notice under clause (ii);
                          and
                              ``(II) <<NOTE: Effective date.>> the decision
                          shall take effect as provided in subsections
                          (c)(2) and (d)(2) of section 803 and section
                          114(f)(4)(B)(ii) and (C).
                        ``(iv) The rates and terms shall remain in effect
                    for the period set forth in section 114(f)(1)(C) or
                    114(f)(2)(C), as the case may be.

    [[Page 118 STAT. 2360]]

                ``(4) Section 115 proceedings.--A petition described in
            subsection (a) to initiate proceedings under section 801(b)(1)
            concerning the adjustment or determination of royalty rates as
            provided in section 115 may be filed in the year 2006 and in
            each subsequent fifth calendar year, or at such other times as
            the parties have agreed under section 115(c)(3) (B) and (C).
                ``(5) <<NOTE: Deadline.>> Section 116 proceedings.--(A) A
            petition described in subsection (a) to initiate proceedings
            under section 801(b) concerning the determination of royalty
            rates and terms as provided in section 116 may be filed at any
            time within 1 year after negotiated licenses authorized by
            section 116 are terminated or expire and are not replaced by
            subsequent agreements.
                ``(B) <<NOTE: Deadline.>> If a negotiated license authorized
            by section 116 is terminated or expires and is not replaced by
            another such license agreement which provides permission to use
            a quantity of musical works not substantially smaller than the
            quantity of such works performed on coin-operated phonorecord
            players during the 1-year period ending March 1, 1989, the
            Copyright Royalty Judges shall, upon petition filed under
            paragraph (1) within 1 year after such termination or
            expiration, commence a proceeding to promptly establish an
            interim royalty rate or rates for the public performance by
            means of a coin-operated phonorecord player of nondramatic
            musical works embodied in phonorecords which had been subject to
            the terminated or expired negotiated license agreement. Such
            rate or rates shall be the same as the last such rate or rates
            and shall remain in force until the conclusion of proceedings by
            the Copyright Royalty Judges, in accordance with section 803, to
            adjust the royalty rates applicable to such works, or until
            superseded by a new negotiated license agreement, as provided in
            section 116(b).
                ``(6) Section 118 proceedings.--A petition described in
            subsection (a) to initiate proceedings under section 801(b)(1)
            concerning the determination of reasonable terms and rates of
            royalty payments as provided in section 118 may be filed in the
            year 2006 and in each subsequent fifth calendar year.
                ``(7) Section 1004 proceedings.--A petition described in
            subsection (a) to initiate proceedings under section 801(b)(1)
            concerning the adjustment of reasonable royalty rates under
            section 1004 may be filed as provided in section 1004(a)(3).
                ``(8) <<NOTE: Federal
            Register, publication. Notice.>> Proceedings concerning
            distribution of royalty fees.--With respect to proceedings under
            section 801(b)(3) concerning the distribution of royalty fees in
            certain circumstances under section 111, 119, or 1007, the
            Copyright Royalty Judges shall, upon a determination that a
            controversy exists concerning such distribution, cause to be
            published in the Federal Register notice of commencement of
            proceedings under this chapter.

    ``Sec. 805. General rule for voluntarily negotiated agreements

        ``Any rates or terms under this title that--
                ``(1) are agreed to by participants to a proceeding under
            section 803(b)(3),
                ``(2) are adopted by the Copyright Royalty Judges as part of
            a determination under this chapter, and

    [[Page 118 STAT. 2361]]

                ``(3) are in effect for a period shorter than would
            otherwise apply under a determination pursuant to this chapter,

    shall remain in effect for such period of time as would otherwise apply
    under such determination, except that the Copyright Royalty Judges shall
    adjust the rates pursuant to the voluntary negotiations to reflect
    national monetary inflation during the additional period the rates
    remain in effect.''.
        (b) Conforming Amendment.--The table of chapters for title 17,
    United States Code, is amended by striking the item relating to chapter
    8 and inserting the following:

    ``8. Proceedings by Copyright Royalty Judges......................801''.

    SEC. 4. DEFINITION.

        Section 101 is amended by inserting after the definition of
    ``copies'' the following:
                ``A `Copyright Royalty Judge' is a Copyright Royalty Judge
            appointed under section 802 of this title, and includes any
            individual serving as an interim Copyright Royalty Judge under
            such section.''.

    SEC. 5. TECHNICAL AMENDMENTS.

        (a) Cable Rates.--Section 111(d) is amended--
                (1) in paragraph (2), in the second sentence, by striking
            ``a copyright arbitration royalty panel'' and inserting ``the
            Copyright Royalty Judges.''; and
                (2) in paragraph (4)--
                        (A) in subparagraph (A), by striking ``Librarian of
                    Congress'' each place it appears and inserting
                    ``Copyright Royalty Judges'';
                        (B) in subparagraph (B)--
                              (i) in the first sentence, by striking
                          ``Librarian of Congress shall, upon the
                          recommendation of the Register of Copyrights,''
                          and inserting ``Copyright Royalty Judges shall'';
                              (ii) in the second sentence, by striking
                          ``Librarian determines'' and inserting ``Copyright
                          Royalty Judges determine''; and
                              (iii) in the third sentence--
                                        (I) by striking ``Librarian'' each
                                    place it appears and inserting
                                    ``Copyright Royalty Judges''; and
                                        (II) by striking ``convene a
                                    copyright arbitration royalty panel''
                                    and inserting ``conduct a proceeding'';
                                    and
                        (C) in subparagraph (C), by striking ``Librarian of
                    Congress'' and inserting ``Copyright Royalty Judges''.

        (b) Ephemeral Recordings.--Section 112(e) is amended--
                (1) in paragraph (3)--
                        (A) by amending the first sentence to read as
                    follows: ``Proceedings under chapter 8 shall determine
                    reasonable rates and terms of royalty payments for the
                    activities specified by paragraph (1) during the 5-year
                    period beginning on January 1 of the second year
                    following the year in which the proceedings are to be
                    commenced, or such other period as the parties may
                    agree.'';
                        (B) in the third sentence, by striking ``Librarian
                    of Congress'' and inserting ``Copyright Royalty
                    Judges''; and

    [[Page 118 STAT. 2362]]

                        (C) in the fourth sentence, by striking
                    ``negotiation'';
                (2) in paragraph (4)--
                        (A) by amending the first sentence to read as
                    follows: ``The schedule of reasonable rates and terms
                    determined by the Copyright Royalty Judges shall,
                    subject to paragraph (5), be binding on all copyright
                    owners of sound recordings and transmitting
                    organizations entitled to a statutory license under this
                    subsection during the 5-year period specified in
                    paragraph (3), or such other period as the parties may
                    agree.'';
                        (B) by striking ``copyright arbitration royalty
                    panel'' each subsequent place it appears and inserting
                    ``Copyright Royalty Judges'';
                        (C) in the fourth sentence, by striking ``its
                    decision'' and inserting ``their decision'';
                        (D) in the fifth sentence, by striking ``negotiated
                    as provided'' and inserting ``described''; and
                        (E) in the last sentence, by striking ``Librarian of
                    Congress'' and inserting ``Copyright Royalty Judges'';
                (3) in paragraph (5), by striking ``determination by a
            copyright arbitration royalty panel or decision by the Librarian
            of Congress'' and inserting ``decision by the Librarian of
            Congress or determination by the Copyright Royalty Judges'';
                (4) by striking paragraph (6) and redesignating paragraphs
            (7), (8), and (9), as paragraphs (6), (7), and (8),
            respectively; and
                (5) in paragraph (6)(A), as so redesignated, by striking
            ``Librarian of Congress'' and inserting ``Copyright Royalty
            Judges''.

        (c) Scope of Exclusive Rights in Sound Recordings.--Section 114(f)
    is amended--
                (1) in paragraph (1)--
                        (A) in subparagraph (A)--
                              (i) by amending the first sentence to read as
                          follows: ``Proceedings under chapter 8 shall
                          determine reasonable rates and terms of royalty
                          payments for subscription transmissions by
                          preexisting subscription services and
                          transmissions by preexisting satellite digital
                          audio radio services specified by subsection
                          (d)(2) during the 5-year period beginning on
                          January 1 of the second year following the year in
                          which the proceedings are to be commenced, except
                          where a different transitional period is provided
                          under section 6(b)(3) of the Copyright Royalty and
                          Distribution Reform Act of 2004 or such other
                          period.'';
                              (ii) in the third sentence, by striking
                          ``Librarian of Congress'' and inserting
                          ``Copyright Royalty Judges''; and
                              (iii) in the fourth sentence, by striking
                          ``negotiation'';
                        (B) in subparagraph (B)--
                              (i) by amending the first sentence to read as
                          follows: ``The schedule of reasonable rates and
                          terms determined by the Copyright Royalty Judges
                          shall, subject to paragraph (3), be binding on all
                          copyright owners of sound recordings and entities
                          performing sound recordings affected by this
                          paragraph during

    [[Page 118 STAT. 2363]]

                          the 5-year period specified in subparagraph (A), a
                          transitional period provided under section 6(b)(3)
                          of the Copyright Royalty and Distribution Reform
                          Act of 2004, or such other period as the parties
                          may agree.'';
                              (ii) in the second sentence, by striking
                          ``copyright arbitration royalty panel'' and
                          inserting ``Copyright Royalty Judges''; and
                              (iii) in the second sentence, by striking
                          ``negotiated as provided'' and inserting
                          ``described''; and
                        (C) by amending subparagraph (C) to read as follows:
                ``(C) The procedures under subparagraphs (A) and (B) also
            shall be initiated pursuant to a petition filed by any copyright
            owners of sound recordings, any preexisting subscription
            services, or any preexisting satellite digital audio radio
            services indicating that a new type of subscription digital
            audio transmission service on which sound recordings are
            performed is or is about to become operational, for the purpose
            of determining reasonable terms and rates of royalty payments
            with respect to such new type of transmission service for the
            period beginning with the inception of such new type of service
            and ending on the date on which the royalty rates and terms for
            subscription digital audio transmission services most recently
            determined under subparagraph (A) or (B) and chapter 8 expire,
            or such other period as the parties may agree.'';
                (2) in paragraph (2)--
                        (A) in subparagraph (A)--
                              (i) by amending the first paragraph to read as
                          follows: ``Proceedings under chapter 8 shall
                          determine reasonable rates and terms of royalty
                          payments for subscription transmissions by
                          eligible nonsubscription transmission services and
                          transmissions by new subscription services
                          specified by subsection (d)(2) during the 5-year
                          period beginning on January 1 of the second year
                          following the year in which the proceedings are to
                          be commenced, except where a different
                          transitional period is provided under section
                          6(b)(3) of the Copyright Royalty and Distribution
                          Reform Act of 2004, or such other period as the
                          parties may agree.'';
                              (ii) in the third sentence, by striking
                          ``Librarian of Congress'' and inserting
                          ``Copyright Royalty Judges''; and
                              (iii) in the fourth sentence, by striking
                          ``negotiation'';
                        (B) in subparagraph (B)--
                              (i) by amending the first sentence to read as
                          follows: ``The schedule of reasonable rates and
                          terms determined by the Copyright Royalty Judges
                          shall, subject to paragraph (3), be binding on all
                          copyright owners of sound recordings and entities
                          performing sound recordings affected by this
                          paragraph during the 5-year period specified in
                          subparagraph (A), a transitional period provided
                          under section 6(b)(3) of the Copyright Royalty and
                          Distribution Act of 2004, or such other period as
                          the parties may agree.'';
                              (ii) by striking ``copyright arbitration
                          royalty panel'' each subsequent place it appears
                          and inserting ``Copyright Royalty Judges''; and

    [[Page 118 STAT. 2364]]

                              (iii) in the last sentence by striking
                          ``negotiated as provided'' and inserting
                          ``described in''; and
                        (C) by amending subparagraph (C) to read as follows:
                ``(C) The procedures under subparagraphs (A) and (B) shall
            also be initiated pursuant to a petition filed by any copyright
            owners of sound recordings or any eligible nonsubscription
            service or new subscription service indicating that a new type
            of eligible nonsubscription service or new subscription service
            on which sound recordings are performed is or is about to become
            operational, for the purpose of determining reasonable terms and
            rates of royalty payments with respect to such new type of
            service for the period beginning with the inception of such new
            type of service and ending on the date on which the royalty
            rates and terms for preexisting subscription digital audio
            transmission services or preexisting satellite digital radio
            audio services, as the case may be, most recently determined
            under subparagraph (A) or (B) and chapter 8 expire, or such
            other period as the parties may agree.'';
                (3) in paragraph (3), by striking ``determination by a
            copyright arbitration royalty panel or decision by the Librarian
            of Congress'' and inserting ``decision by the Librarian of
            Congress or determination by the Copyright Royalty Judges''; and
                (4) in paragraph (4)--
                        (A) by striking ``Librarian of Congress'' each place
                    it appears and inserting ``Copyright Royalty Judges'';
                    and
                        (B) by adding after the first sentence of
                    subparagraph (A) the following: ``The notice and
                    recordkeeping rules in effect on the day before the
                    effective date of the Copyright Royalty and Distribution
                    Reform Act of 2004 shall remain in effect unless and
                    until new regulations are promulgated by the Copyright
                    Royalty Judges. If new regulations are promulgated under
                    this subparagraph, the Copyright Royalty Judges shall
                    take into account the substance and effect of the rules
                    in effect on the day before the effective date of the
                    Copyright Royalty and Distribution Reform Act of 2004
                    and shall, to the extent practicable, avoid significant
                    disruption of the functions of any designated agent
                    authorized to collect and distribute royalty fees.''.

        (d) Phonorecords of Nondramatic Musical Works.--Section 115(c)(3) is
    amended--
                (1) in subparagraph (A)(ii), by striking ``(F)'' and
            inserting ``(E)'';
                (2) in subparagraph (B)--
                        (A) by striking ``under this paragraph'' and
                    inserting ``under this section'';
                        (B) by inserting ``on a nonexclusive basis'' after
                    ``common agents''; and
                        (C) by striking ``subparagraphs (C) through (F)''
                    and inserting ``this subparagraph and subparagraphs (C)
                    through (E)''; and
                (3) in subparagraph (C)--
                        (A) by amending the first sentence to read as
                    follows: ``Proceedings under chapter 8 shall determine
                    reasonable rates and terms of royalty payments for the
                    activities specified by this section during the period
                    beginning with the effective date of such rates and
                    terms, but not earlier than January 1 of the second year
                    following the year in

    [[Page 118 STAT. 2365]]

                    which the petition requesting the proceeding is filed,
                    and ending on the effective date of successor rates and
                    terms, or such other period as the parties may agree.'';
                        (B) in the third sentence, by striking ``Librarian
                    of Congress'' and inserting ``Copyright Royalty
                    Judges''; and
                        (C) in the fourth sentence, by striking
                    ``negotiation'';
                (4) in subparagraph (D)--
                        (A) by amending the first sentence to read as
                    follows: ``The schedule of reasonable rates and terms
                    determined by the Copyright Royalty Judges shall,
                    subject to subparagraph (E), be binding on all copyright
                    owners of nondramatic musical works and persons entitled
                    to obtain a compulsory license under subsection (a)(1)
                    during the period specified in subparagraph (C), such
                    other period as may be determined pursuant to
                    subparagraphs (B) and (C), or such other period as the
                    parties may agree.'';
                        (B) in the third sentence, by striking ``copyright
                    arbitration royalty panel'' and inserting ``Copyright
                    Royalty Judges'';
                        (C) in the third sentence, by striking ``negotiated
                    as provided in subparagraphs (B) and (C)'' and inserting
                    ``described''; and
                        (D) in the last sentence, by striking ``Librarian of
                    Congress'' and inserting ``Copyright Royalty Judges''.
                (5) in subparagraph (E)--
                        (A) in clause (i)--
                              (i) in the first sentence, by striking
                          ``Librarian of Congress'' and inserting
                          ``Librarian of Congress and Copyright Royalty
                          Judges''; and
                              (ii) in the second sentence, by striking
                          ``(C), (D) or (F) shall be given effect'' and
                          inserting ``(C) or (D) shall be given effect as to
                          digital phonorecord deliveries''; and
                        (B) in clause (ii)(I), by striking ``(C), (D) or
                    (F)'' each place it appears and inserting ``(C) or
                    (D)''; and
                (6) by striking subparagraph (F) and redesignating
            subparagraphs (G) through (L) as subparagraphs (F) through (K),
            respectively.

        (e) Coin-Operated Phonorecord Players.--Section 116 is amended--
                (1) in subsection (b), by amending paragraph (2) to read as
            follows:
                ``(2) Chapter 8 proceeding.--Parties not subject to such a
            negotiation may have the terms and rates and the division of
            fees described in paragraph (1) determined in a proceeding in
            accordance with the provisions of chapter 8.''; and
                (2) in subsection (c)--
                        (A) in the subsection heading, by striking
                    ``Copyright Arbitration Royalty Panel Determinations''
                    and inserting ``Determinations by Copyright Royalty
                    Judges''; and
                        (B) by striking ``a copyright arbitration royalty
                    panel'' and inserting ``the Copyright Royalty Judges''.

        (f) Use of Certain Works in Connection With Noncommercial
    Broadcasting.--Section 118 is amended--
                (1) in subsection (b)--
                        (A) in paragraph (1)--

    [[Page 118 STAT. 2366]]

                              (i) in the first sentence, by striking
                          ``Librarian of Congress'' and inserting
                          ``Copyright Royalty Judges''; and
                              (ii) by striking the second and third
                          sentences;
                        (B) <<NOTE: Deadline.>> in paragraph (2), by
                    striking ``Librarian of Congress:'' and all that follows
                    through the end of the sentence and inserting
                    ``Librarian of Congress or the Copyright Royalty Judges,
                    if copies of such agreements are filed with the
                    Copyright Royalty Judges within 30 days of execution in
                    accordance with regulations that the Copyright Royalty
                    Judges shall issue.''; and
                        (C) in paragraph (3)--
                              (i) in the second sentence--
                                        (I) by striking ``copyright
                                    arbitration royalty panel'' and
                                    inserting ``Copyright Royalty Judges'';
                                    and
                                        (II) by striking ``paragraph (2).''
                                    and inserting ``paragraph (2) or (3).'';
                              (ii) in the last sentence, by striking
                          ```Librarian of Congress'' and inserting
                          ``Copyright Royalty Judges''; and
                              (iii) by striking ``(3) In'' and all that
                          follows through the end of the first sentence and
                          inserting the following:
                ``(3) Voluntary negotiation proceedings initiated pursuant
            to a petition filed under section 804(a) for the purpose of
            determining a schedule of terms and rates of royalty payments by
            public broadcasting entities to copyright owners in works
            specified by this subsection and the proportionate division of
            fees paid among various copyright owners shall cover the 5-year
            period beginning on January 1 of the second year following the
            year in which the petition is filed. The parties to each
            negotiation proceeding shall bear their own costs.
                ``(4) <<NOTE: Federal Register, publication.>> In the
            absence of license agreements negotiated under paragraph (2) or
            (3), the Copyright Royalty Judges shall, pursuant to chapter 8,
            conduct a proceeding to determine and publish in the Federal
            Register a schedule of rates and terms which, subject to
            paragraph (2), shall be binding on all owners of copyright in
            works specified by this subsection and public broadcasting
            entities, regardless of whether such copyright owners have
            submitted proposals to the Copyright Royalty Judges.'';
                (2) by striking subsection (c) and redesignating subsections
            (d) through (g) as subsections (c) through (f), respectively;
                (3) in subsection (c), as so redesignated, in the matter
            preceding paragraph (1)--
                        (A) by striking ``(b)(2)'' and inserting ``(b)(2) or
                    (3)'';
                        (B) by striking ``(b)(3)'' and inserting ``(b)(4)'';
                    and
                        (C) by striking ``a copyright arbitration royalty
                    panel under subsection (b)(3)'' and inserting ``the
                    Copyright Royalty Judges under subsection (b)(3), to the
                    extent that they were accepted by the Librarian of
                    Congress'';
                (4) in subsection (d), as so redesignated--
                        (A) by striking ``in the Copyright Office'' and
                    inserting ``with the Copyright Royalty Judges''; and
                        (B) by striking ``Register of Copyrights shall
                    prescribe'' and inserting ``Copyright Royalty Judges
                    shall prescribe as provided in section 803(b)(6)''; and

    [[Page 118 STAT. 2367]]

                (5) in subsection (f), as so redesignated, by striking
            ``(d)'' and inserting ``(c)''.

        (g) Secondary Transmissions by Satellite Carriers.--Section 119(b)
    is amended--
                (1) in paragraph (3), by striking ``Librarian of Congress''
            and inserting ``Copyright Royalty Judges''; and
                (2) in paragraph (4)--
                        (A) in subparagraph (A), by striking ``Librarian of
                    Congress'' each place it appears and inserting
                    ``Copyright Royalty Judges''; and
                        (B) by amending subparagraphs (B) and (C) to read as
                    follows:
                        ``(B) Determination of controversy; distributions.--
                    After the first day of August of each year, the
                    Copyright Royalty Judges shall determine whether there
                    exists a controversy concerning the distribution of
                    royalty fees. If the Copyright Royalty Judges determine
                    that no such controversy exists, the Librarian of
                    Congress shall, after deducting reasonable
                    administrative costs under this paragraph, distribute
                    such fees to the copyright owners entitled to receive
                    them, or to their designated agents. If the Copyright
                    Royalty Judges find the existence of a controversy, the
                    Copyright Royalty Judges shall, pursuant to chapter 8 of
                    this title, conduct a proceeding to determine the
                    distribution of royalty fees.
                        ``(C) Withholding of fees during controversy.--
                    During the pendency of any proceeding under this
                    subsection, the Copyright Royalty Judges shall withhold
                    from distribution an amount sufficient to satisfy all
                    claims with respect to which a controversy exists, but
                    shall have the discretion to proceed to distribute any
                    amounts that are not in controversy.''.

        (h) Ratemaking for Satellite Carriers.--Section 119(c) of title 17,
    United States Code, is amended--
                (1) in paragraph (2)--
                        (A) in subparagraph (B), by striking ``Librarian of
                    Congress'' and inserting ``Copyright Royalty Judges'';
                    and
                        (B) in subparagraph (C), by striking ``Register of
                    Copyrights shall prescribe'' and inserting ``Copyright
                    Royalty Judges shall prescribe as provided in section
                    803(b)(6); and
                (2) in paragraph (3)--
                        (A) in subparagraph (A)--
                              (i) by striking ``arbitration proceedings''
                          and inserting ``proceedings''; and
                              (ii) by striking ``arbitration proceeding''
                          and inserting ``proceedings'';
                        (B) in subparagraph (B)--
                              (i) by striking ``copyright arbitration
                          royalty panel appointed under chapter 8'' and
                          inserting ``Copyright Royalty Judges''; and
                              (ii) by striking ``panel shall base its
                          decision'' and inserting ``Copyright Royalty
                          Judges shall base their determination''; and
                        (C) in subparagraph (C)--

    [[Page 118 STAT. 2368]]

                              (i) in the heading, by striking ``decision of
                          arbitration panel or order of librarian'' and
                          inserting ``determination under chapter 8''; and
                              (ii) by striking clauses (i) and (ii) and
                          inserting the following:
                              ``(i) is made by the Copyright Royalty Judges
                          pursuant to this paragraph and becomes final, or
                              ``(ii) is made by the court on appeal under
                          section 803(d)(3),''.

        (i) Digital Audio Recording Devices.--
                (1) Royalty payments.--Section 1004(a)(3) is amended by
            striking ``Librarian of Congress'' each place it appears and
            inserting ``Copyright Royalty Judges''.
                (2) Entitlement to royalty payments.--Section 1006(c) is
            amended by striking ``Librarian of Congress shall convene a
            copyright arbitration royalty panel which'' and inserting
            ``Copyright Royalty Judges''.
                (3) Procedures for distributing royalty payments.--Section
            1007 is amended--
                        (A) in subsection (a), by amending paragraph (1) to
                    read as follows:
                ``(1) <<NOTE: Regulations.>> Filing of claims.--During the
            first 2 months of each calendar year, every interested copyright
            party seeking to receive royalty payments to which such party is
            entitled under section 1006 shall file with the Copyright
            Royalty Judges a claim for payments collected during the
            preceding year in such form and manner as the Copyright Royalty
            Judges shall prescribe by regulation.''; and
                        (B) by amending subsections (b) and (c) to read as
                    follows:

        ``(b) Distribution of Payments in the Absence of a Dispute.--After
    the period established for the filing of claims under subsection (a), in
    each year, the Copyright Royalty Judges shall determine whether there
    exists a controversy concerning the distribution of royalty payments
    under section 1006(c). <<NOTE: Deadline.>> If the Copyright Royalty
    Judges determine that no such controversy exists, the Librarian of
    Congress shall, within 30 days after such determination, authorize the
    distribution of the royalty payments as set forth in the agreements
    regarding the distribution of royalty payments entered into pursuant to
    subsection (a). The Librarian of Congress shall, before such royalty
    payments are distributed, deduct the reasonable administrative costs
    incurred by the Librarian under this section.

        ``(c) Resolution of Disputes.--If the Copyright Royalty Judges find
    the existence of a controversy, the Copyright Royalty Judges shall,
    pursuant to chapter 8 of this title, conduct a proceeding to determine
    the distribution of royalty payments. During the pendency of such a
    proceeding, the Copyright Royalty Judges shall withhold from
    distribution an amount sufficient to satisfy all claims with respect to
    which a controversy exists, but shall, to the extent feasible, authorize
    the distribution of any amounts that are not in controversy. The
    Librarian of Congress shall, before such royalty payments are
    distributed, deduct the reasonable administrative costs incurred by the
    Librarian under this section.''.
                (4) Determination of certain disputes.--(A) Section 1010 is
            amended to read as follows:

    [[Page 118 STAT. 2369]]

    ``Sec. 1010. Determination of certain disputes

        ``(a) Scope of Determination.--Before the date of first distribution
    in the United States of a digital audio recording device or a digital
    audio interface device, any party manufacturing, importing, or
    distributing such device, and any interested copyright party may
    mutually agree to petition the Copyright Royalty Judges to determine
    whether such device is subject to section 1002, or the basis on which
    royalty payments for such device are to be made under section 1003.
        ``(b) Initiation of Proceedings.--The parties under subsection (a)
    shall file the petition with the Copyright Royalty Judges requesting the
    commencement of a proceeding. <<NOTE: Deadline. Notice. Federal
    Register, publication.>> Within 2 weeks after receiving such a petition,
    the Chief Copyright Royalty Judge shall cause notice to be published in
    the Federal Register of the initiation of the proceeding.

        ``(c) Stay of Judicial Proceedings.--Any civil action brought under
    section 1009 against a party to a proceeding under this section shall,
    on application of one of the parties to the proceeding, be stayed until
    completion of the proceeding.
        ``(d) Proceeding.--The Copyright Royalty Judges shall conduct a
    proceeding with respect to the matter concerned, in accordance with such
    procedures as the Copyright Royalty Judges may adopt. The Copyright
    Royalty Judges shall act on the basis of a fully documented written
    record. Any party to the proceeding may submit relevant information and
    proposals to the Copyright Royalty Judges. The parties to the proceeding
    shall each bear their respective costs of participation.
        ``(e) Judicial Review.--Any determination of the Copyright Royalty
    Judges under subsection (d) may be appealed, by a party to the
    proceeding, in accordance with section 803(d) of this title. The
    pendency of an appeal under this subsection shall not stay the
    determination of the Copyright Royalty Judges. If the court modifies the
    determination of the Copyright Royalty Judges, the court shall have
    jurisdiction to enter its own decision in accordance with its final
    judgment. The court may further vacate the determination of the
    Copyright Royalty Judges and remand the case for proceedings as provided
    in this section.''.
                (B) The item relating to section 1010 in the table of
            sections for chapter 10 is amended to read as follows:

    ``1010. Determination of certain disputes.''.

    SEC. 6. EFFECTIVE DATE AND TRANSITION PROVISIONS. <<NOTE: 17 USC 801
                note.>>

        (a) Effective Date.--This Act and the amendments made by this Act
    shall take effect 6 months after the date of enactment of this Act,
    except that the Librarian of Congress shall appoint 1 or more interim
    Copyright Royalty Judges under section 802(d) of title 17, United States
    Code, as amended by this Act, within 90 days after such date of
    enactment to carry out the functions of the Copyright Royalty Judges
    under title 17, United States Code, to the extent that Copyright Royalty
    Judges provided for in section 801(a) of title 17, United States Code,
    as amended by this Act, have not been appointed before the end of that
    90-day period.
        (b) Transition Provisions.--
                (1) In general.--Subject to paragraphs (2) and (3), the
            amendments made by this Act shall not affect any proceedings
            commenced, petitions filed, or voluntary agreements entered

    [[Page 118 STAT. 2370]]

            into before the effective date provided in subsection (a) under
            the provisions of title 17, United States Code, as amended by
            this Act, and pending on such effective date. Such proceedings
            shall continue, determinations made in such proceedings, and
            appeals taken therefrom, as if this Act had not been enacted,
            and shall continue in effect until modified under title 17,
            United States Code, as amended by this Act. Such petitions filed
            and voluntary agreements entered into shall remain in effect as
            if this Act had not been enacted. For purposes of this
            paragraph, the Librarian of Congress may determine whether a
            proceeding has commenced. The Librarian of Congress may
            terminate any proceeding commenced before the date of enactment
            of this Act pursuant to chapter 8 of title 17, United States
            Code, and any proceeding so terminated shall become null and
            void. In such cases, the Copyright Royalty Judges may initiate a
            new proceeding in accordance with regulations adopted pursuant
            to section 803(b)(6) of title 17, United States Code.
                (2) Certain royalty rate proceedings.--Notwithstanding
            paragraph (1), the amendments made by this Act shall not affect
            proceedings to determine royalty rates pursuant to section
            119(c) of title 17, United States Code, that are commenced
            before January 31, 2006.
                (3) <<NOTE: Termination date.>> Pending proceedings.--
            Notwithstanding paragraph (1), any proceedings to establish or
            adjust rates and terms for the statutory licenses under section
            114(f)(2) or 112(e) of title 17, United States Code, for a
            statutory period commencing on or after January 1, 2005, shall
            be terminated upon the date of enactment of this Act and shall
            be null and void. The rates and terms in effect under section
            114(f)(2) or 112(e) of title 17, United States Code, on December
            31, 2004, for new subscription services, eligible
            nonsubscription services, and services exempt under section
            114(d)(1)(C)(iv) of such title, and the rates and terms
            published in the Federal Register under the authority of the
            Small Webcaster Settlement Act of 2002 (17 U.S.C. 114 note;
            Public Law 107-321) (including the amendments made by that Act)
            for the years 2003 through 2004, as well as any notice and
            recordkeeping provisions adopted pursuant thereto, shall remain
            in effect until the later of the first applicable effective date
            for successor terms and rates specified in section 804(b) (2) or
            (3)(A) of title 17, United States Code, or such later date as
            the parties may agree or the Copyright Royalty Judges may
            establish. For the period commencing January 1, 2005, an
            eligible small webcaster or a noncommercial webcaster, as
            defined in the regulations published by the Register of
            Copyrights pursuant to the Small Webcaster Settlement Act of
            2002 (17 U.S.C. 114 note; Public Law 107-321) (including the
            amendments made by that Act), may elect to be subject to the
            rates and terms published in those regulations by complying with
            the procedures governing the election process set forth in those
            regulations not later than the first date on which the webcaster
            would be obligated to make a royalty payment for such period.
            Until successor terms and rates have been established for the
            period commencing January 1, 2006, licensees shall continue to
            make royalty payments at the rates and on the terms previously

    [[Page 118 STAT. 2371]]

            in effect, subject to retroactive adjustment when successor
            rates and terms for such services are established.
                (4) <<NOTE: Publication. Notice.>> Interim proceedings.--
            Notwithstanding subsection (a), as soon as practicable after the
            date of enactment of this Act, the Copyright Royalty Judges or
            interim Copyright Royalty Judges shall publish the notice
            described in section 803(b)(1)(A) of title 17, United States
            Code, as amended by this Act, to initiate a proceeding to
            establish or adjust rates and terms for the statutory licenses
            under section 114(f)(2) or 112(e) of title 17, United States
            Code, for new subscription services and eligible nonsubscription
            services for the period commencing January 1, 2006. The
            Copyright Royalty Judges or Interim Copyright Royalty Judges are
            authorized to cause that proceeding to take place as provided in
            subsection (b) of section 803 of that title within the time
            periods set forth in that subsection. Notwithstanding section
            803(c)(1) of that title, the Copyright Royalty Judges shall not
            be required to issue their determination in that proceeding
            before the expiration of the statutory rates and terms in effect
            on December 31, 2004.

        (c) Existing Appropriations.--Any funds made available in an
    appropriations Act to carry out chapter 8 of title 17, United States
    Code, shall be available to the extent necessary to carry out this
    section.

        Approved November 30, 2004.

    LEGISLATIVE HISTORY--H.R. 1417:
    ---------------------------------------------------------------------------

    HOUSE REPORTS: No. 108-408 (Comm. on the Judiciary).
    CONGRESSIONAL RECORD, Vol. 150 (2004):
                Mar. 3, considered and passed House.
                Oct. 6, considered and passed Senate, ameneded.
                Nov. 17, House concurred in Senate amendment.

                                      <all>