APP NO. _________
`
`---------------------------
`
`IN THE SUPREME COURT OF THE UNITED STATES
`
`---------------------------
`
`NATIONAL RELIGIOUS BROADCASTERS NONCOMMERCIAL MUSIC LICENSE COMMITTEE,
`Petitioner,
`
`v.
`
`COPYRIGHT ROYALTY BOARD AND LIBRARIAN OF CONGRESS,
`Respondents.
`
`
`On Application for an Extension of Time
`to File Petition for a Writ of Certiorari to the
`United States Court of Appeals for the District of Columbia Circuit
`
`
`PETITIONER’S APPLICATION TO EXTEND TIME
`TO FILE PETITION FOR WRIT OF CERTIORARI
`
`
`KARYN K. ABLIN
`FLETCHER, HEALD & HILDRETH, PLC
`1300 N. 17th Street
`11th Floor
`Arlington, VA 22209
`(703) 812-0443
`ablin@fhhlaw.com
`
`JOHN J. BURSCH
` Counsel of Record
`ALLIANCE DEFENDING FREEDOM
`440 First Street, N.W., Suite 600
`Washington, D.C. 20001
`(616) 450-4235
`jbursch@ADFlegal.org
`
`Counsel for Petitioner
`
`
`
`
`
`

`

`Corporate Disclosure Statement
`
`
`
`Pursuant to Supreme Court Rule 29.6, Petitioner National Religious
`
`Broadcasters Noncommercial Music License Committee (NRBNMLC) states that it
`
`is the noncommercial arm of the National Religious Broadcasters Music License
`
`Committee (NRBMLC). The NRBMLC is a standing committee of the National
`
`Religious Broadcasters (NRB), a trade association representing more than 1,300
`
`radio and television stations, program producers, multimedia developers, and related
`
`organizations around the world. The NRB is a non-profit corporation with no parent
`
`corporation, and no publicly held company has a 10% or greater ownership interest
`
`in the NRB.
`
`
`
`
`
`1
`
`

`

`To the Honorable John G. Roberts, Jr., as Circuit Justice for the United States Court
`
`of Appeals for the District of Columbia Circuit:
`
`
`
`Pursuant to this Court’s Rules 13.5, 22, 30.2, and 30.3, Petitioner NRBNMLC
`
`respectfully requests that the time to file its Petition for Writ of Certiorari in this
`
`matter be extended for 30 days up to and including January 25, 2024. The Court of
`
`Appeals issued its opinion on July 28, 2023. (Appendix (“App.”) A) and denied
`
`rehearing en banc on September 27, 2023 (App. B). Absent an extension of time, the
`
`Petition for Writ of Certiorari would be due on December 26, 2023. Petitioner is filing
`
`this Application more than ten days before that date. See S. Ct. R. 13.5. This Court
`
`would have jurisdiction over the judgment under 28 U.S.C. 1254(1). Respondents do
`
`not object to NRBNMLC’s request.
`
`
`
`Background
`
`Under limited statutory licenses, the Copyright Royalty Board establishes
`
`rates under which noninteractive webcasters—those whose listeners cannot select
`
`the content—pay royalties to sound recording copyright owners where parties cannot
`
`agree to rates. The Board must set rates that represent what “would have been
`
`negotiated in the marketplace between a willing buyer and a willing seller.” 17 U.S.C.
`
`§§112(e)(4), 114(f)(1)(B).
`
`Among large noncommercial webcasters, there are two relevant groups:
`
`webcasters who are affiliated with National Public Radio (NPR) and webcasters who
`
`are not, the latter of which are almost exclusively religious. For NPR, the Board
`
`adopted rates that NPR and SoundExchange, Inc.—representing record company
`
`
`
`2
`
`

`

`sellers—proposed as willing buyers and sellers, which are excellent evidence of large,
`
`noncommercial, willing-buyer-willing-seller rates. Yet instead of adopting those
`
`rates—or anything close—for religious webcasters, the Board forced them to pay a
`
`rate for webcasting to listeners above an audience of 218 average listeners (the size
`
`of a small college lecture hall) that is over 17 times the average NPR rate.
`
`That’s a violation of the Religious Freedom Restoration Act (RFRA), which
`
`prohibits federal agencies from substantially burdening religious exercise “even if the
`
`burden results from a rule of general applicability.” 42 U.S.C. §2000bb-1(a). If “a law
`
`that operates so as to make the practice of … religious beliefs more expensive in the
`
`context of business activities imposes a burden on the exercise of religion,” Burwell
`
`v. Hobby Lobby Stores, Inc., 573 U.S. 682, 710 (2014) (quotation omitted), that is
`
`doubly so when religious broadcasters are forced to pay 17 times more than the
`
`secular NPR rate to webcast to listeners above a minimal audience.
`
`A D.C. Circuit panel rejected the RFRA and First Amendment claims brought
`
`by Petitioner NRBNMLC because (1) there was “no record finding” of a disparity and
`
`(2) to the extent a disparity exists, it penalizes secular, non-NPR webcasters as much
`
`as religious, non-NPR webcasters. SlipOp.33-34 (Ex.A). But the Government’s
`
`briefing conceded a disparity, and this Court has held that it is no answer to a
`
`religious discrimination allegation that the Government “treats some comparable
`
`secular businesses or other activities as poorly as or even less favorably than the
`
`religious exercise at issue.” Tandon v. Newsom, 141 S. Ct. 1294, 1296 (2021) (per
`
`curiam) (citation omitted).
`
`
`
`3
`
`

`

`The end result is that noncommercial religious webcasters are greatly
`
`disincentivized from disseminating religious speech beyond a minimal audience,
`
`whereas Government-favored NPR webcasters face no such speech suppression. This
`
`disparity is even starker because NPR webcasters do not have to pay the fees; the
`
`Government pays them. This unlawful disparate burden placed on religious speech
`
`vis-a-vis secular speech is of exceptional importance. Further, no Circuit split need
`
`develop before this issue is ripe for determination by this Court, as appeals from these
`
`cases are heard exclusively by the U.S. Court of Appeals for the D.C. Circuit.
`
`Petitioner intends to ask the Court to review this error to correct the D. C. Circuit’s
`
`error, which affects noncommercial religious broadcasters nationwide.
`
`Reasons For Granting An Extension Of Time
`
`
`
`The time to file a Petition for a Writ of Certiorari should be extended for 30
`
`days for the following reasons:
`
`1. Petitioner’s Counsel of Record, John J. Bursch, was not actively involved in
`
`the litigation below until preparation of the petition for rehearing en banc. It will
`
`take time for Mr. Bursch to familiarize himself fully with the substantial record and
`
`prepare a concise petition of maximum helpfulness to the Court. In addition to the
`
`upcoming Christmas holiday and scheduled time away from the office, Mr. Bursch
`
`has numerous litigation deadlines in the weeks leading up to and immediately
`
`following the current deadline as follows:
`
`• Oral argument on December 8, 2023 before the U.S. Court of Appeals
`for the Fourth Circuit, Planned Parenthood South Atlantic v. Kerr, Case
`No. 21-1043.
`
`
`
`4
`
`

`

`• A reply brief on December 13, 2023 in the U.S. Court of Appeals for the
`First Circuit, L.M. v. Town of Middleborough, Case Nos. 23-1535, 23-
`1645.
`• An amicus brief on December 18, 2023 in the U.S. Court of Appeals for
`the Tenth Circuit, Poe v. Drummond, Case No. 23-5110.
`• A reply brief on December 26, 2023 in the U.S. Court of Appeals for the
`Ninth Circuit, Damiano v. Grants Pass School District No. 7, Case No.
`23-35288.
`• An amicus brief on December 27, 2023 in the U.S. Court of Appeals for
`the Sixth Circuit, Gore v. Lee, Case No. 23-5669.
`• A reply brief on December 29, 2023 in the U.S. Court of Appeals for the
`Sixth Circuit, Christian Healthcare Centers v. Nessel, Case No. 23-1769.
`2. A short extension of 30 days will not cause prejudice to Respondents.
`
`Conclusion
`
`
`
`For the foregoing reasons, Petitioner respectfully requests that the time to file
`
`the Petition for a Writ of Certiorari in this matter be extended 30 days, up to and
`
`including January 25, 2024.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`KARYN K. ABLIN
`FLETCHER, HEALD & HILDRETH, PLC
`1300 N. 17th Street
`11th Floor
`Arlington, VA 22209
`(703) 812-0443
`ablin@fhhlaw.com
`
`
`
`
`
`
`
`
`
`Respectfully submitted.
`
`
`
`s/ John J. Bursch
`JOHN J. BURSCH
` Counsel of Record
`ALLIANCE DEFENDING FREEDOM
`440 First Street, N.W.
`Suite 600
`Washington, D.C. 20001
`(616) 450-4235
`jbursch@ADFlegal.org
`
`
`
`
`
`
`
`
`
`
`
`5
`
`

`

`CERTIFICATE OF SERVICE
`
`
`
`A copy of this application was served by email and U.S. mail to the counsel
`
`listed below in accordance with Supreme Court Rule 22.2 and 29.3:
`
`Jennifer L. Utrecht
`Appellate Staff, Civil Division, Room 7710
`U.S. Department of Justice
`950 Pennsylvania Avenue NW
`Washington, DC 20530
`Jennifer.l.utrecht@usdoj.gov
`
`Malcolm L. Stewart
`Deputy Solicitor General
`U.S. Department of Justice
`950 Pennsylvania Avenue NW
`Washington, DC 20530
`Malcolm.L.Stewart@usdoj.gov
`
`Counsel for Copyright Royalty Board and Librarian of Congress
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`s/ John J. Bursch_____
`JOHN J. BURSCH
` Counsel of Record
`
`
`
`
`6
`
`

`

`
`
`
`
`
`
`
`
`
`APPENDIX A
`APPENDIX A
`
`
`
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 1 of 42
`
`
`United States Court of Appeals
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`
`
`Decided July 28, 2023
`
`Argued February 17, 2023
`
`
`No. 21-1243
`
`NATIONAL RELIGIOUS BROADCASTERS NONCOMMERCIAL
`MUSIC LICENSE COMMITTEE,
`APPELLANT
`
`v.
`
`COPYRIGHT ROYALTY BOARD AND LIBRARIAN OF CONGRESS,
`APPELLEES
`
`GOOGLE LLC, ET AL.,
`INTERVENORS
`
`
`
`Consolidated with 21-1244, 21-1245
`
`
`On Appeals from a Final Determination
`of the Copyright Royalty Board
`
`
`
`Samir Deger-Sen argued the cause for appellant National
`Association of Broadcasters. With him on the briefs were
`Joseph R. Wetzel, Andrew M. Gass, Sarang V. Damle, and
`Blake E. Stafford.
`
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 2 of 42
`
`2
`Karyn K. Ablin argued the cause and filed the briefs for
`appellant National Religious Broadcasters Noncommercial
`Music License Committee. John J. Bursch, Rory T. Gray, and
`Erin M. Hawley entered appearances.
`
`
`Matthew S. Hellman argued the cause and filed the briefs
`for appellant SoundExchange, Inc. Previn Warren entered an
`appearance.
`
`
`Jennifer L. Utrecht, Attorney, U.S. Department of Justice,
`argued the cause for appellees. With her on the brief were
`Michael D. Granston, Deputy Assistant Attorney General, and
`Daniel Tenny, Attorney.
`
`
`David P. Mattern argued the cause for intervenors Google
`LLC, et al. in support of appellees. With him on the brief were
`Sarang V. Damle, Blake E. Stafford, Kenneth L. Steinthal,
`Joseph R. Wetzel, Andrew M. Gass, Samir Deger-Sen, Joshua
`N. Mitchell, and Karyn K. Ablin. John J. Bursch, Jason B.
`Cunningham, Rory T. Gray, and Erin M. Hawley entered
`appearances.
`
`
`Matthew S. Hellman was on the brief for intervenor
`SoundExchange, Inc. in support of appellees. Previn Warren
`entered an appearance.
`
`
`Before: MILLETT, WILKINS, and PAN, Circuit Judges.
`
`Opinion for the Court filed PER CURIAM.
`
`Every five years, the Copyright Royalty Board (the
`“Board”) issues a statutory license that establishes the terms
`and rates under which certain entities that stream copyrighted
`songs over the internet make royalty payments to the songs’
`copyright owners. The “webcasters” that are subject to the
`
`
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 3 of 42
`
`3
`license are “noninteractive” — i.e., they stream music without
`letting their listeners choose songs on demand. This appeal
`challenges on various grounds the Board’s most recent
`noninteractive webcaster
`license Final Determination,
`covering calendar years 2021 through 2025. We sustain the
`Board’s Final Determination in all respects.
`
`
`I
`
`The Copyright Act, 17 U.S.C. § 101 et seq., provides the
`statutory framework for regulating copyrights. Under that
`framework, a recorded song has two components with distinct
`rights: (1) the “musical work,” which is the song’s underlying
`composition (i.e., the lyrics and melody); and (2) the “sound
`recording,” which is a recorded version of the song. See
`SoundExchange, Inc. v. Copyright Royalty Board, 904 F.3d 41,
`46 (D.C. Cir. 2018).
`
`Historically, the owner of a musical work had an exclusive
`right of public performance but the owner of a sound recording
`did not. SoundExchange, 904 F.3d at 46. Thus, an FM radio
`station could broadcast a sound recording without permission
`from its copyright owner. But in 1995, Congress amended the
`Copyright Act to grant sound-recording owners the exclusive
`right of public performance “by means of a digital audio
`transmission.”
` Digital Performance Right
`in Sound
`Recordings Act of 1995, Pub. L. No. 104-39, § 2, 109 Stat. 336,
`336 (codified at 17 U.S.C. § 106(6)). Under the amended
`statute, a webcaster cannot stream a sound recording without
`paying royalties to its copyright owner.
`
`In defining the scope of this new right, Congress
`distinguished between webcasters (also known as “digital
`audio services”) that are “interactive” and “noninteractive.”
`Interactive services let users choose the particular songs they
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 4 of 42
`
`4
`want to listen to on demand, e.g., Spotify, while noninteractive
`services do not, e.g., Pandora. See 17 U.S.C. § 114(j)(7).
`Interactive webcasters must contract directly with copyright
`owners to obtain public performance rights for their sound
`recordings. Id. § 114(d)(2)(A)(i). By contrast, Congress
`tasked
`the Copyright Royalty Board with creating a
`compulsory license covering the use of sound recordings by all
`noninteractive webcasters. Id. § 114(f)(1). The license is
`“compulsory” because copyright owners cannot opt out of it
`unless they negotiate individual settlement agreements with
`noninteractive webcasters. Id. §§ 114(f)(1)–(2). Royalties
`under the compulsory license are paid to a “nonprofit
`collective,” which distributes the funds to performing artists or
`other copyright owners.
` Id. § 114(g)(2).
` Meanwhile,
`traditional AM/FM radio, also known as terrestrial or over-the-
`air radio, still plays by the old rules: those radio stations pay
`no royalties to broadcast songs to listeners, and copyright
`owners
`instead
`treat AM/FM radio as a promotional
`opportunity.
`
`The Board must set the rates and terms of the compulsory
`license for noninteractive webcasters every five years.
`17 U.S.C. § 114(f)(1)(A). Interested parties may negotiate
`settlement agreements amongst themselves to opt out of the
`compulsory license. Id. § 114(f)(2). If a particular record label
`and a webcaster negotiate a settlement agreement that sets
`terms for the webcaster’s use of the record label’s copyrighted
`sound recordings, that agreement controls instead of the
`Board’s compulsory license. Non-settling parties are subject
`to the license, and the Board holds an evidentiary proceeding
`to determine the applicable terms and rates under that license.
`SoundExchange, 904 F.3d at 46–47.
` Noninteractive
`webcasting produces hundreds of billions of streams per year,
`the vast majority of which are covered by the compulsory
`license rather than by a settlement.
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 5 of 42
`
`5
`
`
`
`Congress set forth instructions for the Board’s compulsory
`license determinations in 17 U.S.C. § 114(f)(1)(B). The statute
`directs the Board to “distinguish among the different types of
`[webcasting] services then in operation” based on, among other
`factors, the “quantity and nature of the use of sound recordings
`and the degree to which use of the service may substitute for or
`may promote the purchase of phonorecords by consumers.” Id.
`Applying that standard, the Board has previously distinguished
`between commercial and noncommercial webcasting services
`and between subscription-based and nonsubscription-based
`commercial services. See Determination of Royalty Rates and
`Terms for Ephemeral Recording and Webcasting Digital
`Performance of Sound Recordings (Web IV), 81 Fed. Reg.
`26,316, 26,409 (May 2, 2016). For each different type of
`service, the Board must establish rates and terms that represent
`what “would have been negotiated in the marketplace between
`a willing buyer and a willing seller.” 17 U.S.C. § 114(f)(1)(B).
`This is called the “willing buyer/willing seller” standard.
`SoundExchange, 904 F.3d at 56. In so doing, the Board must
`consider factors including the effect of the license’s rates and
`terms on other sources of sound recording revenue, such as
`whether a service tends to boost or deflate interactive streaming
`royalties. 17 U.S.C. § 114(f)(1)(B)(i)(I). The Board may also
`consider voluntary
`license agreements negotiated
`for
`comparable services as “benchmarks” that provide reference
`points in its analysis. SoundExchange, 904 F.3d at 47; see
`17 U.S.C. § 114(f)(1)(B)(ii). And the Board’s rates and terms
`must “include a minimum fee” that each webcaster must pay to
`use the compulsory license. 17 U.S.C. § 114(f)(1)(B). As we
`have made clear, “the statute does not require that the
`[hypothetical] market assumed by the [Board] achieve
`metaphysical perfection.” Intercollegiate Broad. Sys., Inc. v.
`Copyright Royalty Board (Intercollegiate II), 796 F.3d 111
`(D.C. Cir. 2015).
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 6 of 42
`
`6
`
`
`
`This appeal concerns the Board’s fifth noninteractive
`webcaster rate Final Determination, which set the rates and
`terms of the statutory license for calendar years 2021 through
`2025. Determination of Rates and Terms for Digital
`Performance of Sound Recordings and Making of Ephemeral
`Copies To Facilitate Those Performances (Web V), 86 Fed.
`Reg. 59,452 (Oct. 27, 2021). The Board’s previous four
`noninteractive webcaster rate determinations were reviewed
`and largely upheld by this court. See SoundExchange, 904 F.3d
`41 (reviewing Web IV); Intercollegiate II, 796 F.3d 111
`(reviewing Web III); Intercollegiate Broad. Sys., Inc. v.
`Copyright Royalty Board (Intercollegiate I), 574 F.3d 748
`(D.C. Cir. 2009) (reviewing Web II); Beethoven.com LLC v.
`Librarian of Cong., 394 F.3d 939 (D.C. Cir. 2005) (reviewing
`Web I).1
`
`
`The Web V evidentiary hearing lasted from August 4,
`2020, to September 9, 2020. Ten parties participated,
`including the appellants and intervenors in this consolidated
`case: (1) the National Association of Broadcasters (the
`“NAB”), an association of radio and television stations; (2) the
`National Religious Broadcasters Noncommercial Music
`License Committee (the “Committee”), an arm of a trade
`association that represents religious radio and television
`stations; (3) SoundExchange, Inc., a collective management
`organization that represents sound-recording copyright holders
`
`1
`For the underlying Board determinations, see Web IV, 81 Fed.
`Reg. 26,316; Determination of Royalty Rates
`for Digital
`Performance Right in Sound Recordings and Ephemeral Recordings
`(Web III), 79 Fed. Reg. 23,102 (April 25, 2014); Digital Performance
`Right in Sound Recordings and Ephemeral Recordings (Web II), 72
`Fed. Reg. 24,084 (May 1, 2007); Determination of Reasonable Rates
`and Terms for the Digital Performance of Sound Recordings and
`Ephemeral Recordings (Web I), 67 Fed. Reg. 45,240 (July 8, 2002).
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 7 of 42
`
`7
`and artists; and (4) Google LLC, a technology company. The
`Board heard oral testimony from thirty-three witnesses and
`received written testimony from eight, which together included
`thirteen qualified experts. The Board admitted 748 exhibits
`into evidence, comprising more than 900,000 pages of
`documents. After the hearing, the parties submitted proposed
`findings and conclusions, and responses thereto, and made
`closing arguments on November 19, 2020. The Librarian of
`Congress published the Board’s Final Determination on
`October 27, 2021.
`
`
`In its Final Determination, the Board identified three
`relevant categories of webcasters: commercial subscription
`webcasters, commercial nonsubscription webcasters, and
`noncommercial webcasters. See Web V, 86 Fed. Reg. at
`59,589. Commercial subscription webcasters are services like
`Pandora Plus that collect payments from their listeners. See
`SoundExchange, 904 F.3d at 48. Commercial nonsubscription,
`i.e., “ad-supported,” webcasters are services like Free Pandora
`that collect payment from advertisers rather than listeners. See
`id. at 48, 58. Noncommercial webcasters are services owned
`by a government entity or a nonprofit, such as National Public
`Radio (“NPR”) and certain religious webcasters. See Web V,
`86 Fed. Reg. at 59,593; 17 U.S.C. § 114(f)(4)(E)(i). Besides
`noncommercial, educational, and public webcasters, all other
`webcasters are commercial. Web V, 86 Fed. Reg. at 59,592.
`
`
`For all webcasters, the Board set a minimum fee of $1,000
`per channel or station. Web V, 86 Fed. Reg. at 59,589.
`Commercial webcaster license fees were capped at $100,000.
`Id. at 59,589. Payment of the minimum fee grants a webcaster
`access
`to
`the compulsory
`license.
` See 17 U.S.C.
`§ 114(f)(1)(B). Each licensee can have multiple channels, but
`with the $100,000 cap, a large commercial webcaster licensee
`pays the minimum fee only for its first one hundred channels.
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 8 of 42
`
`8
`This provision doubled the prior minimum-fee payment—
`which was $500 per channel and capped at $50,000 per
`licensee. See Web IV, 81 Fed. Reg. at 26,409; Web III, 79 Fed.
`Reg. at 23,132.
`
`
`Beyond the minimum fee, when setting royalty rates for
`all webcasters, the Board puts forward an amount to be paid
`“per performance.” One copyrighted song heard by one
`listener is a performance. Web V, 86 Fed. Reg. at 59,593. So,
`for instance, if the Board set a royalty rate at $0.002 per
`performance, and if a webcaster subject to that rate streamed
`two copyrighted songs to one thousand listeners each, it would
`have to pay for two thousand performances, amounting to
`$4.00 total.
`
`For commercial subscription webcasters, the Board set a
`2021 royalty rate of $0.0026 per performance, adjusted
`annually for inflation. Web V, 86 Fed. Reg. at 59,589. For all
`commercial webcasters, the minimum fee of $1,000 covers a
`service’s first $1,000 in royalty payments, id., or about 385,000
`performances for commercial subscription webcasters in 2021.
`
`For commercial nonsubscription webcasters, the Board set
`a 2021 royalty rate of $0.0021 per performance, adjusted
`annually for inflation. Web V, 86 Fed. Reg. at 59,589. The
`minimum
`fee of $1,000 covered
`roughly 475,000
`performances for commercial nonsubscription webcasters
`in 2021.
`
`
`For noncommercial webcasters, the Board set a payment
`structure under which the webcaster receives a monthly
`allowance of 159,140 aggregate tuning hours (“ATH”) by
`paying the minimum fee; and pays a 2021 royalty rate of
`$0.0021 per performance above that threshold, adjusted
`annually for
`inflation—the same rate
`that applies
`to
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 9 of 42
`
`9
`commercial nonsubscription webcasters. Web V, 86 Fed. Reg.
`at 59,589. ATH is, essentially, the cumulative time spent
`listening to copyrighted songs. See id. at 59,592. For instance,
`if 1,000 individuals each listened to one hour of copyrighted
`songs, that would amount to 1,000 ATH. See id.
`
`Four aspects of the Board’s decision are challenged on
`appeal. First, the NAB argues that the Board should have
`adopted its proposal to distinguish simulcasters from other
`commercial nonsubscription webcasters. Simulcasters are
`traditional AM/FM stations that simultaneously stream their
`programming on the internet. The NAB sought a lower rate for
`those stations. Second, the NAB and the Committee
`(collectively, the “Services”) argue that the Board should have
`rejected SoundExchange’s proposal to double the minimum
`fee to $1,000 per channel and $100,000 per licensee. The
`Services proposed keeping the incumbent minimum fee
`structure instead. Third, the Committee argues that the Board
`should have set a lower rate for noncommercial webcasters,
`based on a settlement agreement between SoundExchange,
`NPR, and the Corporation for Public Broadcasting (“CPB”)
`that the Committee proffered as a benchmark. And fourth,
`SoundExchange argues that the Board should have set a higher
`commercial nonsubscription rate, contending that the Board’s
`rate is lower than copyright owners’ opportunity costs.
`
`The NAB, the Committee, and SoundExchange timely
`appealed the aforementioned aspects of the Board’s Final
`Determination under 17 U.S.C. § 803(d)(1). SoundExchange
`intervened on behalf of the government in the appeals brought
`by the Services, while the Services and Google intervened on
`behalf of the government in SoundExchange’s appeal.
`
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 10 of 42
`
`
`
`
`We review the Board’s rate determinations under Section
`706 of the Administrative Procedure Act. See 17 U.S.C.
`§ 803(d)(3). We uphold the results of the Board’s proceedings
`“unless they are arbitrary, capricious, contrary to law, or not
`supported by substantial evidence.” Intercollegiate I, 574 F.3d
`at 755. Our “[r]eview of administratively determined rates is
`‘particularly deferential’ because of their ‘highly technical’
`nature.” Id. (quoting East Ky. Power Coop. v. FERC, 489 F.3d
`1299, 1306 (D.C. Cir. 2007)). Applying that standard, we
`sustain the Board’s Final Determination against the appellants’
`challenges.
`
`
`10
`II
`
`III
`
`A
`
`
`
`
`
`
`
`As an association of radio and television stations, the NAB
`represents hundreds of simulcasters nationwide. Its members
`range in size from larger broadcasters, such as iHeartMedia—
`a company operating around 850 radio stations—to smaller
`broadcasters, such as individuals operating only a handful of
`stations. Focusing on the three identified categories of
`webcasters, the NAB contests the Board’s decision to place
`simulcasters
`in
`the broad commercial nonsubscription
`webcaster category, thus subjecting them to the same rate as
`what the NAB argues are fundamentally different custom radio
`services. Custom radio refers to services like Pandora, which
`allow users to skip songs and to “curate the listening
`experience.” Web V, 86 Fed. Reg. at 59,547. By contrast,
`simulcasters
`are
`traditional AM/FM
`stations
`that
`simultaneously stream their programming on the internet
`without allowing for customization.
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 11 of 42
`
`11
`During the Board’s proceedings, the NAB put forth a rate
`structure under which simulcasters would pay $0.0008 per
`play, and other eligible commercial nonsubscription
`webcasters would pay $0.0016 per play. If adopted, the Board
`would have distinguished simulcasters from other webcasters
`for the first time. Web V, 86 Fed. Reg. at 59,547. According
`to the NAB, the Board’s statutory obligation to distinguish
`between different services, see 17 U.S.C. § 114(f)(1)(B),
`required it to adopt this proposal because simulcasting is
`critically distinct from other types of commercial webcasting.
`As support, the NAB offered various voluntary agreements as
`benchmarks, including “[d]irect license agreements between
`sound recording rights owners and webcaster iHeart and
`license agreements
`for musical compositions between
`performing rights organizations and webcasters Pandora and
`iHeart.” Web V, 86 Fed. Reg. at 59,547. Ultimately, the Board
`found that a new distinction was unwarranted based on the
`record, and more specifically, that “significant evidence”
`showed “simulcasters and other commercial webcasters
`compete in the same submarket and therefore should be subject
`to the same rate.” Id. at 59,565.
`
`
`A second point of contention arose regarding the
`statutorily mandated minimum
`fee.
` See 17 U.S.C.
`§ 114(f)(1)(B). Having maintained the same $500 minimum
`fee since 2006, the Board considered SoundExchange’s
`proposal to double the fee to $1,000 in order “at least to cover
`[its] administrative cost.” Web V, 86 Fed. Reg. at 59,579
`(internal quotation marks omitted). The Services collectively
`challenged SoundExchange’s request, arguing that, because
`the fee is solely meant to cover “incremental administrative
`costs”—meaning fees associated with administering the
`webcasting license—SoundExchange’s average administrative
`cost was “irrelevant.” Id. at 59,580 (emphasis omitted). In the
`Services’ view, what the Board accepted as “average
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 12 of 42
`
`12
`administrative cost” in fact encompasses SoundExchange’s
`“total costs,” including fees unrelated to license administration.
`NAB Opening Br. 17–18 (emphasis omitted); see Committee
`Opening Br. 51–52. Thus, the Services asked the Board to
`adopt their narrower view of the minimum fee. But finding no
`statutory basis that supported it doing so, the Board rejected the
`Services’ proposal and explained why the record justified
`doubling the minimum fee.
`
`On appeal, the NAB advances a two-part theory, arguing
`the Board’s determination is arbitrary, capricious, or otherwise
`contrary to law. First, the NAB challenges the Board’s refusal
`to distinguish simulcasters from other nonsubscription
`commercial services as violating 17 U.S.C. § 114(f)(1)(B)’s
`plain language. It also argues that the Board’s analysis
`justifying its decision was arbitrary and capricious. Second,
`the Services challenge the Board’s decision to double the
`minimum fee in consideration of SoundExchange’s average
`administrative costs.
`
`Unpersuaded by either theory, we affirm both aspects of
`the Board’s determination.
`
`
`1
`
`the NAB’s categorization-related
`to
`first
`Looking
`arguments, we uphold the Board’s determination, finding this
`record failed to establish that simulcasters warrant a different
`royalty rate than other commercial nonsubscription services.
`According to the NAB, the Board violated its statutory
`obligation to distinguish services when it acknowledged that
`simulcasters differ from custom radio, yet still subjected both
`groups to the same rate. After reviewing this record, however,
`we confirm that the Board reasonably evaluated the NAB’s
`differentiation evidence and appropriately exercised
`its
`
`
`
`
`
`

`

`USCA Case #21-1243 Document #2009989 Filed: 07/28/2023 Page 13 of 42
`
`13
`discretion in declining to set a separate, lower rate for
`simulcasters.
`
`Recall that the Board “shall distinguish among the
`different
`types of services
`then
`in operation” when
`“establish[ing] rates and terms that most clearly represent”
`what “would have been negotiated in the marketplace between
`a willing buyer and a willing seller.” 17 U.S.C. § 114(f)(1)(B).
`The Copyright Act also instructs the Board to base its decision
`on criteria such as “the quantity and nature of the use of sound
`recordings and the degree to which use of the service may
`substitute for or may promote the purchase of phonorecords by
`consumers.” Id.
`
`Here, the Board satisfied 17 U.S.C. § 114(f)(1)(B) by
`maintaining the preexisting rate categories and distinguishing
`royalty rates for (1) commercial subscription services;
`(2) commercial
`nonsubscription
`services;
`and
`(3)
`noncommercial services. When setting rates, we have
`explained that the Board has discretion in determining what to
`use as a starting point, so long as it explains itself. Music
`Choice v. Copyright Royalty Board, 774 F.3d 1000, 1012 (D.C.
`Cir. 2014) (finding that the Board “did not err when [it] used
`the prevailing rate as the starting point of [its] analysis,” given
`“the lack of creditable benchmarks in the record” and the
`Board’s “reasoned explanation”).
` Furthermore, Section
`114(f)(1)(B) contemplates the Board will “make adjustments
`to the prevailing rate” and also “consider prior determinations”
`in its decisionmaking. Music Choice, 774 F.3d at 1012
`(internal quotation marks omitted).
`
`The Board has never set a lower rate for simulcasters. So
`its decision not to here is not an “unexplained presumption in
`favor of uniform rates.” NAB Opening Br. 29. Rather, the
`Board was justified in relying on its three preexisting rate
`
`
`
`

`

`USCA