Senate Committee Passes CARP Reform Bill

WASHINGTON, D.C. -- The Senate Judiciary Committee on Sept. 21 passed the House-approved Copyright Royalty and Distribution Reform Act, H.R. 1417.

The bill, authored by Rep. Lamar Smith, R-Texas, would replace the panel of part-time arbitrators (Copyright Arbitration Royalty Panel) who settle disputes over compulsory royalties with three full-time administrative law judges, one of whom will be designated as chief. The panel would adjudicate whenever private negotiations fail over the establishment of rates or distribution of royalties governing the commercial use of copyrighted works, such as movies and music. This would include digital rates affecting Webcasters.

Also, the bill would ensure that old rates for compulsory licenses will apply and be payable until new rates are set. This would replace the current situation, in which there is a gap in the revenue stream until new rates are set, at which point royalties are paid retroactively.

After the 2001 Webcaster royalty proceeding, the CARP was criticized for being too expensive, biased and lacking appropriate expertise in copyright law and commerce to render decisions.

The bill now goes to the Senate floor for passage.