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(As posted on www.billboard.biz)
July 06, 2012 | By Ed Christman, New York
The U.S. Court of Appeals in the District of Columbia ruled on Friday that the Copyright Royalty Board (CRB) was unconstitutional when it passed rates for non-commercial web broadcasts, like college and high school radio stations, leaving in question whether those royalty rates and others set by the board still stand.
The U.S. Court of Appeals made its decision in a lawsuit against the CRB and SoundExchange brought by the Intercollegiate Broadcasting System (IBS), a Rhode Island non-profit corporation representing colleges and high school radio stations engaged in webcasting.
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Although the U.S. Court of Appeals mandated a solution in case No. 11-1083 so that the CRB can meet constitutionality requirements going forward, the decision has some wondering if any of the licensees will now challenge the rates set by the CRB previously.
The Appeals Court agreed with IBS that the position of the CRB Judges as currently constituted violated the Appointments Clause of the U.S. Constitution. To remedy the violation it struck down provisions that restricted the Librarian from Congress' ability to remove the CRB Judges. By giving the Librarian that power, it made the CRB Judges inferior rather than principal officers, and thus no constitutional problem remains, according to the ruling. But then the Court of Appeals vacated and remanded the CRB determination without addressing any of Intercollegiate's argument regarding the merits of the rates.
Consequently, some wonder if the rates determination set by CRB will be challenged in instances where the CRB set rates where there wasn't any settlement or any subsequent free market negotiated agreements between rights holders and digital service providers.
For example, will IBS now demand a new rate setting hearing from the CRB. Since the CRB made its rate determination in March 2011, Suzanne M. Barnett was appointed a CRB Judge by the Librarian of Congress James H. Billington to replace Chief Copyright Royalty Judge James Sledge, who retired in May.
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However, others argue that a challenge to the CRB rates determination will be unlikely since the Appeals Court mandated a solution to the constitutionality problem and did not address any of IBS arguments regarding the merits of the rates.