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66433Federal Register / Vol. 66, No. 247/ Wednesday, December 26, 2001 / Notices

Subject Firm Location

Date re-ceived at

GovernorsOffice

Petition No. Articles Produced

Midland Steel Products (Co.) .......... Janesville, WI ................................. 12/05/2001 NAFTA5,616 steel.Electronic Assembly Corp. (Wkrs) .. Neenak, WI .................................... 12/04/2001 NAFTA5,617 electronic products.Cherry Automative (Wkrs) ............... Pleasant Prairie, WI ....................... 11/13/2001 NAFTA5,618 electronic products.Graham Tech (Co.) ......................... Cochranton, PA .............................. 12/07/2001 NAFTA5,619 gaging.EM Solutions (Wkrs) ........................ Longmont, CO ................................ 12/06/2001 NAFTA5,620

Biltwell ClothingRector Sportwear(Co.).

Rector, AZ ...................................... 12/05/2001 NAFTA/05/2001 mens tailored pants and slacks.

Lexmark International (Co.) ............. Lexington, KY ................................. 12/05/2001 NAFT5,622 inkjet printers and cartr idges.Protel, Inc. (Wkrs) ............................ Lakeland, FL .................................. 12/03/2001 NAFTA5,623 pay phones.AVX Corporation (Wkrs) .................. Vancouver, WA .............................. 12/04/2001 NAFTA5,624 electronic capacitor.Alcatel USA Marketing .................... Andover, MA .................................. 11/30/3001 NAFTA5,625 router.Milmaukee Electric (Wkrs) ............... Blytterville, AR ................................ 12/05/2001 NAFTA5,626 electric power tools.Freightliner PMP (Wkrs) .................. Gastonia, NC ................................. 12/04/2001 NAFTA5,627 trucks and parts.Cooper Bussman (Wkrs) ................. Goldsboro, NC ............................... 12/05/2001 NAFTA5,628 fuses & fuseholders.ASARCO (Co.) ................................ Strawberry Plains, TN .................... 12/05/2001 NAFTA5,629 zinc.Meridian Automotive Systems

(UAW).Controlia, IL .................................... 11/30/2001 NAFTA5,630 fixtures, water jets, heat shield

molds.VF Jeanswear Limited Partnership

(Wkrs).Shenandoah, VA ............................ 12/05/2001 NAFTA5,631 mens and womens bluejeans &

casualwear.VF Jeanswear Limited Partnership

(Wkrs).El Paso, TX .................................... 12/07/2001 NAFTA5,632 mens and womens pants.

Evergreen Wholesale Florist (Wkrs) Seattle, WA .................................... 12/10/2001 NAFTA5,633 floristflower arrangement.

[FR Doc. 0131633 Filed 122601; 8:45 am]

BILLING CODE 451030M

DEPARTMENT OF LABOR

Employment and TrainingAdministration

[NAFTA5254]

Fashion Works, Inc. Dallas, TX; Noticeof Termination of Investigation

Pursuant to Title V of the NorthAmerican Free Trade AgreementImplementation Act (Pub. L. 103182)concerning transitional adjustmentassistance, hereinafter called NAFTATAA and in accordance with section250(a), Subchapter D, Chapter 2, Title II,of the Trade Act of 1974, as amended(19 U.S.C. 2331), an investigation wasinitiated on August 23, 2001, inresponse to a petition filed by thecompany on behalf of workers atFashion Works, Inc., Dallas, Texas.

The petitioner requests the petition bewithdrawn. Consequently, furtherinvestigation in this case would serveno purpose, and the investigation has

been terminated.

Signed in Washington, DC this 10th day ofDecember, 2001.

Edward A. Tomchick,

Director, Division of Trade AdjustmentAssistance.

[FR Doc. 0131630 Filed 122101; 8:45 am]


DEPARTMENT OF LABOR

Employment and TrainingAdministration

[NAFTA005302]

Tyco Electronics, TDI Division,Romeoville, Illinois; Notice ofTermination

Pursuant to Title V of the NorthAmerican Free Trade AgreementImplementation Act Pub. L. 1031concerning transitional adjustmentassistance, hereinafter called NAFTATAA and in accordance with section250(a), Subchapter D, Chapter 2, Title II,of the Trade Act of 1974, as amended(19 U.S.C. 2331), an investigation wasinitiated on September 4, 2001, inresponse to a petition filed on behalf ofworkers at Tyco Electronics, TDIDivision, Romeoville, Illinois. Workersproduced battery packs.

An active certification covering thepetitioning group of workers remains in

effect (NAFTA004168). Consequently,further investigation in this case wouldserve no purpose, and the investigationhas been terminated.

Signed in Washington, DC this 11th day ofDecember, 2001.

Linda G. Poole,

Certifying Officer, Division of TradeAdjustment Assistance.

[FR Doc. 0131627 Filed 122101; 8:45 am]


LIBRARY OF CONGRESS

Copyright Office

[Docket No. 20002 CARP CD 9397]

Distribution of 1993, 1994, 1995, 1996and 1997 Cable Royalty Funds

AGENCY: Copyright Office, Library ofCongress.ACTION: Order.

SUMMARY: The Librarian of Congress,upon the recommendation of theRegister of Copyrights, announces hisrejection of the initial and revisedreports of the Copyright ArbitrationRoyalty Panel (CARP) in the Phase IIproceeding in the syndicatedprogramming category for distributionof the 1997 cable royalty funds, andremands the case for a new proceeding

before a new CARP.EFFECTIVE DATE: December 26, 2001.ADDRESSES: The full text of the CARPsinitial report and revised report to theLibrarian of Congress are available forinspection and copying during normal

business hours in the Office of theCopyright General Counsel, JamesMadison Memorial Building, Room LM403, First and Independence Avenue,SE, Washington, DC 205596000.FOR FURTHER INFORMATION CONTACT:David O. Carson, General Counsel, orWilliam J. Roberts, Jr., Senior Attorneyfor Compulsory Licenses, CopyrightArbitration Royalty Panel (CARP),P.O. Box 70977, Southwest Station,Washington, DC 200240400.Telephone (202) 7078380. Telefax:(202) 2523423.

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66434 Federal Register / Vol. 66, No. 247/ Wednesday, December 26, 2001 / Notices

SUPPLEMENTARY INFORMATION:

Background

Each year, cable systems in the UnitedStates submit royalties to the CopyrightOffice under a statutory license whichallows cable systems to retransmit over-the-air television and radio broadcastsignals to their subscribers. 17 U.S.C.

111. These royalties are, in turn,distributed in one of two ways tocopyright owners whose works wereincluded in the cable retransmissions ofover-the-air television and radio

broadcast signals and who timely fileda claim for royalties with the CopyrightOffice. The copyright owners may eithernegotiate a settlement agreementamongst themselves as to thedistribution of the royalty fees or, if theycannot agree, the Librarian of Congressmay convene one or more CopyrightArbitration Royalty Panels (CARPs) todetermine the distribution of the royaltyfees which remain in controversy. See17 U.S.C. chapter 8.

Cable royalty distribution proceedingsare conducted by the Librarian underthe CARP system in two phases. In aPhase I proceeding, the total cableroyalty pool for a given year or years isdivided among different categories ofcopyrighted programming that typicallyappear on broadcast programming.These categories are movies andsyndicated programming, sportsprogramming, devotional or religiousprogramming, musical programming,commercial and noncommercial

broadcast programming, and Canadian

programming. Once the royalty pool isdivided into these categories, theLibrarian conducts one or moreproceedings at Phase II to resolvedisputes within a particular category asto the division of the royalties. Todaysroyalty distribution determination is aPhase II proceeding in the movie andsyndicated programming category (oftenreferred to collectively as the programsupplier category).

The litigants in this Phase IIproceeding in the program suppliercategory are the Motion PictureAssociation of America, Inc. (MPAA),

which represents the majority ofcopyright owners who filed claims for adistribution of 1997 cable royalties, andthe Independent Producers Group(IPG), which represents the remainingcopyright owners who filed claims for acable royalty distribution. The Librarianwas required to convene a CARP toresolve this Phase II proceeding becauseMPAA and IPG could not agree as to thedivision of royalties in the programsupplier category.

After a protracted discovery period,the Librarian convened the CARP in this

proceeding on October 17, 2000. Asprovided by section 802(e) of title 17,United States Code, the CARP had sixmonths to hear the evidentiarypresentations and arguments of MPAAand IPG and to render a decision. TheCARP delivered its initial report to theLibrarian on April 16, 2001, awardingIPG 0.5% of the royalty pool and the

remainder to MPAA. After review, theLibrarian returned the case to the CARP.By Order dated June 5, 2001, theLibrarian dismissed all of the claimantscomprising IPGs case except for LittonSyndications, Inc. and directed theCARP to adjust its award to IPG andMPAA to account for the dismissal. Inaddition, the Librarian directed theCARP to articulate the methodology itwas using to assign the new distributionpercentages and to detail the applicationof the methodology to the facts before it.See Order in Docket No. 20002 CARPCD 9397 (June 5, 2001). The Librarian

fully explains his reasoning for rejectingthe initial determination of the CARP inthis Order.

On June 20, 2001, the CARP returneda new determination. It awarded IPG0.212% of the royalty funds, with theremaining 99.788% to MPAA. TheLibrarian permitted IPG and MPAA anadditional round of petitions to modifythe CARPs determination and replies.The Register now makes herrecommendation to the Librarianfollowing her review of the CARPsdetermination.

Part OneDecisions of the CARP

The Initial CARP Report

The 108-page initial report of theCARP has three essential parts. The firstpart deals with the validity of theroyalty claim filed with the CopyrightOffice in July 1998 under 17 U.S.C.111(d)(4) that forms the basis for IPGsparticipation in this proceeding. Thesecond part addresses and ascribes theproper representation of specifictelevision programs as between MPAAand IPG. The third part of the reportresolves the division of the royalties inthe program supplier category between

MPAA and IPG. The Panel awardedMPAA 99.50% of the royalties and0.50% to IPG.

1. IPGs Claim

The validity of IPGs claim was hotlycontested in this proceeding. The firstchallenge was raised in theprecontroversy discovery period whenMPAA moved to dismiss IPGs Phase IIcase on the grounds that IPGs claim(marked as No. 176 by the CopyrightOffice) did not comply with the Officesrules and regulations. MPAA asserted

that none of the entities listed in exhibitD of IPGs written direct case, whichforms the basis of IPGs claim forroyalties, appeared on claim No. 176 asrequired by 252.2 of the rules. 37 CFR252.2. According to MPAA, IPG enteredinto representation agreements with theexhibit D parties after July 31, 1998 (theclosing date for filing cable royalty

claims with the Office for calendar year1997), thereby circumventing therequirement of252.2 that all claimantsto a joint claim be identified on theclaim as filed with the Office.

IPGs compliance with 252.2 wasquestionable. Stylized as a jointclaim, IPG identified only oneclaimantArtists Collection Group(ACG). After the Copyright Officequestioned the claim in July of 1998,IPG amended the claim to include ACGand Worldwide Subsidy Group(WSG). This amendment appeared, onits face, to satisfy the requirements of

252.2, and the Office did not pursuethe matter further. However, when IPGfiled a written direct case identifying 16other parties as claimants, the Libraryconsidered MPAAs motion for possibleviolation of the rule.

In an Order dated June 22, 2000, theLibrary determined that the prudentcourse of action was to designate thematter of MPAAs motion to the CARPfor further factual findings and finalresolution. The Library did this afterconsideration of IPGs objections toMPAAs motion to dismiss, the languageof252.2, and the provisions of theCopyright Act related to filing cableroyalty claims. The Library rejectedIPGs argument that it was acceptablefor ACG to file a single claim on behalfof 16 other parties and chastised IPG fornot listing the 16 in its joint claim asprovided in 252.2 . However, theLibrary declined to dismiss IPGs caseand designated the MPAA motion to theCARP because:

[T]he Library cannot say with certainty thatall previous claims filed in cable royaltyproceedings have listed all joint claimants. Itis sometimes the case that the CopyrightOffice will receive a single claim filed by aproduction company that does not identify

any joint claimants. Whether this productioncompany owns all or some of the copyrightsrepresented by the claim, or is just arepresentative of unidentified copyrightowners, is unknown to the Office. To theLibrarys knowledge, these claims have not

been challenged in the past, and this is a caseof first impression. Consequently, the Libraryis not inclined without prior warning tostrictly enforce the requirement that allowners and distributors be identified in ajoint claim. However, what is clear, and whatthe law requires, is a factual determination asto which of the owners and distributorsidentified by IPG in exhibit D of its written



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1 IPG by this time had informed the Library thatACG had withdrawn its claim and that WSG wasthe sole claimant remaining for claim No. 176

2The Library amended its regulations after theJune 22, 2000 Order to prevent future confusion asto the filing of single and joint claims. See 66 FR29700 (June 1, 2001).

3Because all remaining monies in the 1997program supplier category automatically belongedto MPAAs claimants once IPGs claim wasdetermined, the CARP focused its attention only onIPGs programs.

direct case were in fact represented byWorldwide Subsidy Group 1 at the close ofthe filing period for 1997 cable claims. Anyparty listed in exhibit D (with the exceptionof Lacey Entertainment, which filed its ownclaim) that was not represented byWorldwide Subsidy Group before August1998 cannot be said to have filed a timelyclaim, and therefore testimony contained inIPGs written direct case regarding such party

must be stricken.Order in Docket No. 20002 CARP CD9397 at 7 (June 22, 2000). The Librarydirected the CARP to make factualdeterminations as to whether thereexisted written agreements betweenWSG and each of the exhibit Dclaimants dated on or before July 31,1998, the close of the cable royaltyclaim filing period. IPG submitted, asdirected by the Library, copies of therepresentation agreements betweenWSG and the exhibit D claimants, alongwith additional corroboratingdocuments to prove the existence of arepresentation arrangement on or before

July 31, 1998.2

Upon its convocation, the CARPturned to the task of examining therepresentation agreements andsupporting documents to determinewhich, if any, of IPGs exhibit Dclaimants would be allowed to remainin the proceeding. The representationagreements are standard form contractsfor representation by WSG in collecting(among other things) cable compulsorylicense royalties. The contract iseffective upon the date identified in thelead paragraph of the contract, whichprovides that as of (date), WSG and

the identified party have entered intothe agreement. With only twoexceptions, none of the signature pagesin the representation agreements bore adate indicating when the agreement wassigned and executed. Some of theadditional documents provided by IPG(copies of letters and faxes) providedcontext to some of the representationagreements to indicate the time periodin which they were signed andexecuted.

In its report, the CARP examined thedocuments for each of the exhibit Dclaimants and decided which claimants

had a signed agreement with WSG on orbefore July 31, 1998, and which did not.The CARP determined that a validrepresentation agreement existed for thefollowing: Abrams/GentileEntertainment; Raycom Sports; FlyingTomato Films; Funimation Productions;

Golden Films Finance Corporation IVand American Film InvestmentCorporation II; Litton Syndications, Inc.;Sandra Carter Productions; and TheTide Group d/b/a Psychic ReadersNetwork. The CARP found that whilethere may have existed a validrepresentation agreement between WSGand Mendelson/PAWS, WSGs claim of

representation was trumped by GeneralMills, a claimant ascribed to MPAAsclaim. The CARP dismissed the UnitedNegro College Fund from IPGs case

because it determined that arepresentation agreement did not existuntil sometime in November of 1998,well after the July 31, 1998, deadline.

2. IPGs Programs

As provided in the section 111 cablelicense, copyrighted works that areretransmitted by cable systems on adistant basis are entitled to royaltiescollected from cable systems. In the

program supplier category, which is thesubject of this proceeding, these worksare movies and syndicated televisionprograms.

After resolving the matter of whichIPG claimants remained in theproceeding, the CARP turned to the taskof determining which of the programsclaimed by IPG claimants were entitledto a royalty distribution.3 Someprograms were claimed by both IPG andMPAA. The following is a summary ofthe programs that the CARP credited toIPGs claimants.

a. Abrams/Gentile Entertainment. TheCARP awarded all five programsclaimed by IPGDragon Flyz; HappyNess, Secret of the Loch; Jelly Bean

Jungle; Sky Dancers; and Van PirestoIPG. MPAA asserted thatJelly Bean

Junglebelonged to Audio VisualCopyright Society d/b/a Screenrights,rather than Abrams/Gentile, but theCARP determined that Audio VisualCopyright Societys own 1997 [program]Certification [did] not list such programin its claim. CARP Report at 53.

b. Raycom Sports. The CARP awardedall four programs claimed by IPGElvis,His Life and Times; Journey of theAfrican American Athlete; More Than a

Game; Our Holiday Memoriesto IPG,finding that the MPAA did not contestany of these titles. CARP Report at 5354.

c. Flying Tomato Films. The CARPdid not credit the one program,JustImagine, to Flying Tomato Films,

because it determined that Litton

Syndications held the syndication rightsto the program. CARP Report at 5455.

d. Funimation Productions. TheCARP identified only one program

belonging to Funimation Productions:Dragon Ball Z. The CARP determinedthat Fox Family Worldwide, notFunimation Productions, was the propersyndicator for Dragon Ball Z, and

therefore IPG was not entitled to adistribution for this program. CARPReport at 5556.

e. Golden Films Finance CorporationIV and American Film InvestmentCorporation II. Two programs wereclaimed by IPG for these companies:Enchanted Tales and Thumbelina. TheCARP determined that Enchanted Talesis a series of videos, one of which isThumbelina, and that the syndicationrights to these programs belong toEyemark Entertainment and SummitMedia, not Golden Films and AmericanFilms. CARP Report at 58. Further, the

CARP determined that both EnchantedTales and Thumbelina were notretransmitted by cable systems during1997. Id. Consequently, the CARP didnot give credit to IPG for theseprograms.

f. Litton Syndications, Inc. IPGidentified thirteen programs belongingto Litton in its written direct case:Algos Factory; Jack Hannas AnimalAdventures; Dramatic Moments in BlackSports History; Dream Big; HarveyPenicks Golf Lessons; Shaka Zulu;Story of a People; Mom USA; Nprint;Critter Gitters; Sophisticated Gents; The

Sports Bar; and Bloopys Buddies. TheCARP eliminated Shaka Zulu and Story

of a People from IPGs claim, findingthat syndication rights to Shaka Zuluwere properly held by Harmony GoldUSA, not Litton, and that the propersyndicator for Story of a People wasunknown. CARP Report at 6061. TheCARP also eliminated Dream Big,determining that Warner Brothers, notLitton, was the syndicator of thatprogram. Id. at 62. Although both IPGand MPAA claimed Dramatic Momentsin Black Sports History, the CARPdetermined that Litton was indeed thesyndicator and credited IPGs claimwith this program. Id. The remainingprograms were credited to IPG.

g. Mendelson/PAWS. The singleprogram claimed by Mendelson/PAWS,Garfield and Friends, was claimed by

both MPAA and IPG. MPAA supplieddocumentary evidence from GeneralMills indicating that it was thesyndicator ofGarfield and Friends, eventhough Mendelson/PAWS produced theprogram. The CARP did not credit IPGwith Garfield and Friends, determiningthat Mendelson/ PAWS resolved the



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dispute by removing its claim. CARPReport at 6465.

h. Sandra Carter Productions. IPGidentified five programs belonging toSandra Carter: Bottom Line; By River, ByRail; Flex; Parenting in the 90s; TilEarth and Heaven Ring. MPAA assertedthat Parenting in the 90sbelonged toAudio Visual Copyright Society d/b/a/

Screenrights, but the CARP determinedthat Screenrights did not list thatprogram in their certification to MPAAand credited it to IPG. CARP Report at66. The CARP determined that BottomLine; By River, By Rail; and Til Earthand Heaven Ringappeared on televisionstation WBAL-TV, Baltimore, Maryland,and was not subject to a distantretransmission by a cable system. Theseprograms were removed from IPGsclaim. Id. at 6667. Finally, the CARPcredited Flexto IPG.

i. The Tide Group d/b/a PsychicReaders Network. IPG claimed several

programs for the Tide Group that hadmultiple titles. The CARP credited IPGwith Alcatraz as one program, KennyKingston as one program, and PsychicReaders (with its alternate title PsychicReaders Network) as one program.CARP Report at 68.

j. United Negro College Fund. IPGclaimed one program for the UnitedNegro College Fund: Lou Rawls Paradeof Stars. However, the CARPdetermined that the United NegroCollege Fund did not have a validrepresentation agreement with WSG by

July 31, 1998. Consequently, IPG did notreceive credit for Lou Rawls Parade of

Stars. CARP Report at 6970.k. Lacey Entertainment. Both MPAA

and IPG claimed credit for LaceyEntertainments two programs:Americas Dumbest Criminals and MegaMan. The CARP found that Laceyconfirmed that MPAA was itsrepresentative for section 111 royaltiesfor Mega Man and that Lacey was notthe U.S. distributor for AmericasDumbest Criminals. Consequently, theCARP did not credit IPG with theseprograms. CARP Report at 7172.

3. The Distribution Percentages

The third part of the CARPs report,which awards IPG 0.5% of the royalties

and MPAA 99.5%, is the most troublingportion. After leveling a number ofcriticisms at both MPAAs and IPGsproposed distribution methodologies,the CARP failed to articulate the methodit settled upon in assigning the 0.5%and 99.5% awards.

Both MPAA and IPG proposeddetailed methodologies for determiningthe royalty awards in this proceeding.MPAAs methodology is based uponviewership analysis of movies and

syndicated television programsretransmitted by cable systems in 1997on a distant signal basis. The underlyingpremise of the MPAA formula is thatactual viewing of movies andsyndicated television programs by cablesubscribers is the best way to determinethe marketplace value of theprogramming. The source elements for

determining actual viewership are: (1)TVData station logs, which show theprograms broadcast by the stations andthe date and time of their broadcast, forthe 82 television stations used by MPAAin its sample survey; (2) a special studyof the same 82 stations for the sweepsperiod conducted by Nielsen MediaResearch; (3) program ownership data(i.e. which claimants to the 1997 cableroyalties own which programs) ascontained in the Cable Data Corporation(CDC) database; and (4) the weightingfactors used by CDC to interpolateviewing for non-sweeps months when

data from Nielsen is not available. CARPReport at 81.The CARP described the details of

MPAAs distribution methodology asfollows:

MPAA selects 82 of the most heavilycarried stations retransmitted as a distantsignal by Form 3 system operators. Form 3systems subscribers comprise the largestgroup of cable subscribers89% and theirgross receipts represent the largest portion96.5%of the 1997 cable royalty fund.

The program schedules of these stationsare acquired from TVData. The programinformation is matched to viewing dataprovided by Nielsen Media Research(Nielsen). In particular, Nielsen providesthe number of quarter hour segments (QH)each program aired on the station and theaverage number of cable subscribers whoviewed each program on that station on adistant basis.

For each station in the MPAA sample,Nielsen goes into the diary database ofapproximately 150,000 homes for eachsweep, eliminates diaries in local area of thestation (as supplied by MPAA), sums theweights by quarter hour for each diary andgenerates estimated projections on quarter-hour-by-quarter-hour basis.

MPAA then calculates the householdviewing hours (HHVH) for each series andmotion picture in the study. Householdviewing hours for every program (claimed

and unclaimed) is [sic] calculated for eachprogram using the Nielsen data andinterpolated audience data for non-sweepsperiods.

After reconciling programs with broadcasttimes, MPAA then calculates the householdviewing hours (HHVH) for each series andmotion picture in the study using the Nielsendata and interpolated audience data.

The HHVH formula is: (QH/4) x DCHH =HHVH. The formula may be stated as follows:Add the total number of QH segments aprogram is broadcast in a particular time sloton a particular station. The sum is divided

by four to get an hourly measure. The result

is multiplied by the average number ofdistant cable households (DCHH) thatactually watched the program on that stationduring the time period.

CARP Report at 8182 (footnotesomitted). Applying MPAAs formula tothe 1997 data yields, according toMPAA, a determination thatprogramming represented by MPAA

received 99.9292% of the total distantviewing3,474,810,364 viewing hoursout of 3,477,272,694 total viewinghours. MPAA therefore asked for99.9292% of the 1997 cable royalties.MPAA Findings of Fact at 20, 55.

IPG proposed a different distributionmethodology which yields a greaterdistribution percentage to IPG. Insteadof focusing on viewership as the mainvaluation method, IPGs methodologyoperates from the premise that it is bestto look at the availability ofprogramming offered to subscribers andthe benefits received by the cableoperators who retransmit thatprogramming. IPG submits that whilethe decision of a television station totransmit a particular program is driven

by a desire for viewership ratings, cablesystems are not concerned withviewership of a particular program, butrather are concerned with attracting andholding the greatest number ofsubscribers by offering multipleprogramming choices. IPG attempts toplace a value on each and every

broadcast using the following data: (1)The number of distant cable subscriberscapable of receiving the program

broadcast during 1997; (2) the distant

retransmission royalties generatedduring 1997 that are attributable tostations broadcasting a particularprogram; (3) the time placement of the

broadcast; and (4) the length of theparticular broadcast. CARP Report at 95.

The CARP described IPGsdistribution methodology as follows:

IPG expanded MPAAs station sample to99 television stations, including only thosewith a combined percentage of distant cablesubscribers and fees gen. (fees generated)significantly greater than the originalselection. The added stations were heavilyretransmitted according to distantsubscribership data for Form 1, Form 2, and

Form 3 cable systems.IPG secured data from TVData reflecting all

programs broadcast on the 99 SampleStations, 24 hours a day, for the entire yearof 1997 and segregated programmingcompensable in the syndicated programmingcategory.

IPG accorded a Station Weight Factor toeach and every compensable broadcast

blending of (i) the average percentage ofdistant cable subscribers capable of viewingthe station of broadcast and (ii) the averagepercentage offees gen. attributable to thestation of broadcast, as compared to the other99 Sample Stations.



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IPG then accorded a Time Period WeightFactor based on the time period or daypartof the program broadcast, weighted accordingto data derived from the 1998 Report onTelevision published by Nielsen MediaResearch, and factored in the length of eachsuch broadcast.

CARP Report at 96 (footnotes omitted;parenthetical not in original). Applying

IPGs methodology to its data yields,according to IPG, a determination that0.881% of the aggregate Sum WeightedValue of all programs claimed in thisproceeding belongs to IPG. IPG Findingsof Fact at 1617, 51.

Both MPAA and IPG leveledcriticisms at each others methodologies,and the CARP details those criticisms.See CARP Report at 8294 (IPG); 97102(MPAA). The CARP accepted thefollowing criticisms of MPAAsapproach:

MPAAs direct testimony did notsufficiently lay the foundation for the

survey or explain its results.The Panel was forced to call its ownwitnesses, Mr. Lindstrom fromNielsen, and Mr. Larson from CableData Corporation to explain theirmethods of data acquisition andreporting.

The number of sampled stations [inMPAAs station survey] has declinedwithout adequate explanation.

Station selection criteria wasexcluded Form 1 and Form 2 cablesystems.

The number ofzero viewing hoursshows the flaw in attempting to usethe Nielsen data as a proxy for theretransmission market especiallysince Nielsen had 24 hour samplingcapability in 1997.

There are unanswered technicalquestions regarding relative error ratesand mixing diary and meter data.

The method of interpolation of non-sweep month estimated viewingneeds statistical validation.

There is an overvaluation of WTBSand under-valuation of the otherSuperstations in the survey.

Id. at 102103.

The CARP found the followingcriticisms of IPGs methodology:

A mathematically sound basis for thecreation and application of the stationweight factor and time period weightfactor should have been presented bya statistician.

Daypart data was misapplied thusoverstating all other viewing.

It doesnt directly address themarketplace value of the workstransmitted, a primary criteria.

Id. at 103.

After stating that it was recogniz[ing]the strengths and weaknesses of

MPAAs and IPGs approaches, thePanel proceeded to summarily awardIPG 0.5% of the 1997 cable fund and theremaining 99.5% to MPAA. The CARPdid observe that certain claimantshad not satisfied the criteria forasserting their claims and certainprograms were not qualified. The Paneldid not award any royalty allocation for

such unqualified claimants nor did itaward any royalty allocation forunqualified programs.Id. at 106.

Standard of Review

Section 802(f) of the Copyright Actdirects that, upon the recommendationof the Register of Copyrights, theLibrarian shall adopt the report of theCARP unless the Librarian finds thatthe determination is arbitrary orcontrary to the applicable provisions ofthis title. The narrow scope of reviewhas been discussed in great detail inprior decisions which have concludedthat the use of the term arbitrary inthis provision is no different than thearbitrary standard described in theAdministrative Procedure Act, 5 U.S.C.706(2)(A). See 63 FR 49823 (September18, 1998); 63 FR 25394 (May 8, 1998);62 FR 55742 (October 28, 1997); 62 FR6558 (February 12, 1997); 61 FR 55653(October 28, 1996). Thus, the standardof review adopted by the Librarian isnarrow and provides that the Librarianwill not reject the determination of aCARP unless its decision falls outsidethe zone of reasonableness that had

been used by the courts to reviewdecisions of the Copyright Royalty

Tribunal (CRT). See National CableTelevision Assn. v. Copyright RoyaltyTribunal, 724 F.2d 176, 182 (D.C. Cir.1983). Moreover, based on adetermination by the Register and theLibrarian that the Panels decision isneither arbitrary nor contrary to law, theLibrarian will adopt the CARPsdetermination even if the Register andthe Librarian would have reachedconclusions different from theconclusions reached by the CARP.

The U.S. Court of Appeals for theDistrict of Columbia Circuit has stated,however, that the Librarian would act

arbitrarily ifwithout explanation oradjustment, he adopted an award

proposed by the Panel that was notsupported by any evidence or that was

based on evidence which could notreasonably be interpreted to support theaward.See National Assn ofBroadcasters v. Librarian of Congress,146 F.3d 907, 923 (D.C. Cir. 1998).

For this reason, the Panel mustprovide a detailed rational analysis ofits decision, setting forth specificfindings of fact and conclusions of law.See National Cable Television Assn. v.

Copyright Royalty Tribunal, 689 F.2d1077, 1091 (D.C. Cir. 1992) (requiringCRT to weigh all relevant considerationsand set out its conclusions in a formthat permits the court to determinewhether it has exercised itsresponsibilities lawfully).

It is then the task of the Register ofCopyrights to review the Panels report

and make her recommendation to theLibrarian as to whether it is arbitrary orcontrary to the provisions of theCopyright Act and, if so, whether and inwhat manner the Librarian shouldsubstitute his own determination.

Remand to the CARP

After receiving the CARPs initialdetermination, the Register ofCopyrights recommended, and theLibrarian accepted, that the Report berejected and remanded to the CARP forfurther consideration. It was apparentfrom reviewing the Report that the

CARP had acted arbitrarily in threeinstances: (1) The CARPmisapprehended the intent of the June22, 2000, Order designatingconsideration of the circumstances ofIPGs representation agreements with itsexhibit D claimants; (2) the CARPawarded programs to an IPG claimantwhen there was no introduction ofevidence as to the value of the programand assigned another program to IPGwithout adequate explanation of itsdecision; and (3) the CARP failed toarticulate the reasoning it used inarriving at a distribution percentage of

0.5% for IPG and 99.5% for MPAA. SeeOrder, Docket No. 20002 CARP CD 9397 (June 5, 2001).

1. Dismissal of Additional IPGClaimants

As discussed above, the status ofIPGs claim No. 176 has been a focalpoint of this proceeding. MPAA hasmoved to dismiss IPGs entire claim noless than three times, claiming thatclaim No. 176 flouts the CopyrightOffices rules and the statute, and is afraud on the Library. The CARP appearsto agree with MPAAs contentions, butstops short of dismissing most if not allof IPGs exhibit D claimants, noting thatit is attempting to accommodate theCopyright Offices previously created,one-time exception to the strictenforcement of the Copyright Officesclaim filing rules, while aspiring toachieve fairness for all affectedclaimants. CARP Report at 42.

The Register concludes that the CARPdid not follow the direction and intentof the June 22, 2000, Order directing itto consider the status of IPGsrepresentation of the exhibit D



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4See footnote 2, supra.

5The contract with Jay Ward Productions wasdated 11/02/99. IPG, however, voluntarilywithdrew Jay Ward Productions from its case.Likewise, Mainframe Entertainments contract wasdated October 8, 1998, and IPG also withdrewMainframe from its case.

claimants. The rule and intent of thatOrder are as follows.

Section 111(d)(3) of the Copyright Actstates that royalties collected from cablesystems under the cable statutorylicense may only be distributed tocopyright owners who claim that theirworks were the subject of secondarytransmissions by cable systems during

the relevant semiannual period. 17U.S.C. 111(d)(3). This means that it iscopyright ownersindividuals orentities that own one or more of theexclusive rights granted by section 106of the Copyright Actthat are entitledto royalty fees, not those who representthem in CARP proceedings. The statutealso provides that royalty fees may only

be distributed to claimants that file aclaim with the Copyright Office duringthe month of July for royalties collectedin the previous calendar year. 17 U.S.C.111(d)(4)(A). Further, the statute statesthat claims filed with the Copyright

Office shall be submittedinaccordance with requirements that the

Librarian of Congress shall prescribe byregulation.Id.

The Librarian adopted suchregulations, which are found at part 252of 37 CFR. Section 252.3 of the rulesprescribes the content of a cable claim,distinguishing between individualclaims and joint claims. Anindividual claim involves royaltiesthat are being sought by a singleclaimant, whereas a joint claiminvolves two or more claimants. Therequirements for an individual claimare a general statement of the nature of

the claimants copyrighted works andidentification of at least one secondarytransmission by a cable system of suchworks establishing a basis for theclaim. 37 CFR 252.3(a)(4). Jointclaims have an additional requirement.If the claim is a joint claim, theremust be a concise statement of theauthorization for the filing of the jointclaim, and the name of each claimant tothe joint claim. 37 CFR 252.3(a)(3).Additionally, the joint claim musthave a general statement of the natureof the joint claimants copyrightedworks and identification of at least one

secondary transmission of one of thejoint claimants copyrighted works by acable system establishing a basis for thejoint claim. 37 CFR 252.3(a)(4).4

The June 22, 2000, Order recounts thehistory of252.3, and it will not berepeated here. SeeJune 22 Order at 25. The importance about 252.3 in thecontext of this proceeding is that it usesthe word claimant in the text, asopposed to the terms copyright owneror holder of one or more of the

exclusive rights granted by section 106of the Copyright Act. IPG argued to theLibrary in response to MPAAs initialmotion to dismiss its claim that it wasacceptable for Artists Collection Group(ACG) to file an individual claim,even though it represented severalcopyright owners, because it was theonly claimant submitting a claim.

June 22 Order at 5. If252.3 had usedthe term copyright owner instead ofclaimant, then this clearly would not

be a permissible interpretation of therule. The Library disagreed with IPGsinterpretation of252.3, concludinginstead that what ACG had filed was inreality a joint claim, because it wasrepresenting only a group of copyrightowners who would ultimately beentitled, under 17 U.S.C. 111(d)(3), tothe royalties. Id. at 6. However, ACG didnot list the exhibit D claimants itrepresented on the claim, as required by252.3(a)(3) for joint claims, other than

to list Worldwide Subsidy Group(WSG) which, as was revealed in theproceedings before the CARP, wasnothing more than an unregistered,fictitious business name for ACG. CARPReport at 35. The Library did not takethe harsh step of dismissing IPGs claimfor ACGs failure to list the exhibit Dclaimants on claim No. 176. Instead, theLibrary made a one-time exception tothe requirement by affording IPG theopportunity to prove that ACG/WSGhad entered into valid writtenrepresentation agreements with each ofthe exhibit D claimants on or before July31, 1998, the last day for filing claimsto 1997 cable royalties. The Library didthis because it could not

say with certainty that all previous claimsfiled in cable royalty proceedings have listedall joint claimants. It is sometimes the casethat the Copyright Office will receive a singleclaim filed by a production company thatdoes not identify any joint claimants.Whether this production company owns allor some of the copyrights represented by theclaim, or is just a representative ofunidentified copyright owners, is unknownto the Office. To the Librarys knowledge,these claims have not been challenged in thepast, and this is a case of first impression.Consequently, the Library is not inclined

without prior warning to strictly enforce therequirement that all owners and distributorsbe identified in a joint claim.

June 22 Order at 7.In designating to the CARP for factual

determination the status of ACG/WSGas representatives of the exhibit Dclaimants, the Library offered somedecisional guidelines:

First, because Worldwide Subsidy Groupdid not list any joint claimants, IPG has the

burden of proving that it represented each ofthe exhibit D parties for distribution of 1997cable royalties on or before July 31, 1998.

Second, IPG must submit written proof ofrepresentation for each exhibit D party.Written proof is required because claim No.176 does not identify any of the exhibit Dparties, and because testimonial evidencealone will not preserve the integrity of thelaw and the regulations which prohibitadding parties to a joint claim after the fact.Proof must be in the form of writtenagreements of representation between IPG

and each of the exhibit D parties executed onor before July 31, 1998. Finally, if the CARPdetermines that one or more of the exhibit Dparties were not validly represented byWorldwide Subsidy Group for distribution of1997 cable royalties on or before July 31,1998, the CARP must strike that portion ofIPGs written direct case related to that partyor parties.

June 22 Order at 7After issuance of the June 22 Order,

IPG petitioned the Library forreconsideration, asserting that it hadwritten material in addition to thestandard form contract entered into

between WSG and the exhibit D

claimants that clarified that arepresentational arrangement existed onor before July 31, 1998. The Libraryclarified that the June 22 Ordersrequirement that proof of representationmust be in the form of writtenagreements does not mean that IPGsstandard representational agreementform is the only acceptable documentthat proves timely representation.Order in Docket No. 20022 CARP CD9397 at 4 (September 22, 2000). TheLibrary allowed IPG to submitadditional documentation, but did notpermit the introduction of testimonial

evidence. IPG submitted the additionaldocuments, which consisted of lettersand faxes discussing therepresentational contracts submittedearlier by IPG, on October 10, 2000(these documents are hereinafterreferred to as the October 10documents).

The Library has reviewed therepresentational contracts and theOctober 10 documents for all sixteen ofthe exhibit D claimants. Several thingsare evident from this examination. First,with the exception of two of thecontracts, they do not contain any dates

of execution of the signature page.5

Rather, the contract bears a provision, inthe lead paragraph, that it is effectiveas of a certain date. In all instancesthis date is on or before July 31, 1998.Second, it is apparent from the October10 documents that the as of date inthe contract is not the date of execution



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6The remainder of the exhibit D parties havebeen either withdrawn from the preceeding, or theirprograms have been credited to another. Theprograms of Beacon Communications Corp.,Cosgrove-Meurer Productions, Jay WardProductions, Mainframe Entertainment, andScholastic Entertainment were withdrawn by IPG.Flying Tomato Films program was credited toLitton. CARP Report at 55. Mendelson/PAWS, Inc.sprograms were credited to MPAA. Id. at 64. TheCARP determined that Golden Films FinanceCorporation IV and American Film Corporation IIwere not entitled to a distribution because theirprograms were not retransmitted by a cable systemon a distant basis. Id. at 58. Lacey Entertainmentsprograms were credited to MPAA. Id. at 7172.

of the contract. Rather, it was thepractice of WSG to send a copy of itscontract to a potential client duringnegotiations for representation and typein the as of date at that time. Thecontract may not have been signed andexecuted for weeks, or even months,after the as of date. Third, there arenot October 10 documents for all of the

exhibit D parties. For some, the onlydocument evidencing representation isthe contract itself bearing the as ofdate.

In each instance, with the exceptionof the United Negro College Fund, theCARP accepted the as of date on therepresentational contracts as evidencethat a representational agreementexisted on that date. The Registerdetermines that that decision is arbitrary

because it runs contrary to the evidencepresented to the CARP. The Registeralso determines that the Panelsdecision on this point countervails the

June 22 Order. Pursuant to the terms ofthat Order, the burden was squarely onIPG to demonstrate throughdocumentary evidence that a validrepresentational arrangement existed onor before July 31, 1998. The as of dateis not evidence of such an arrangement,

because it is clear from the October 10documents that the contracts weresigned sometime after the as of date.In those circumstances where there isdocumentary evidence that the contractwas signed on or before July 31, 1998,IPG has met its burden of proving arepresentational arrangement.

For Raycom Sports, Abrams/Gentile

Entertainment, Funimation Productions,and Sandra Carter Productions, the onlydocuments supplied by IPG are therepresentational contracts. Because theas of dates on these contracts do notprove the dates of their execution, itcannot be determined whether theywere signed, and a validrepresentational arrangement existed,on or before July 31, 1998.Consequently, these parties aredismissed from this proceeding.

There are October 10 documents forThe Tide Group d/b/a Psychic ReadersNetwork, but they do not prove that the

representational contract had beensigned or that a valid representationalarrangement had been reached on or

before July 31, 1998. Consequently, thisparty is dismissed.

The CARP dismissed the UnitedNegro College Fund because the October10 documents suggested that therepresentational contract was not signedon or before July 31, 1998. The contract

bears no date on the signature page, andan as of date of July 30, 1998, ishandwritten in the first paragraph.There are October 10 documents

discussing entering into arepresentational agreement in Novemberof 1998, which led the CARP toconclude that a representationalarrangement did not exist as of July 30,1998. IPG has not met its burden ofdemonstrating that a representationalarrangement existed on or before July31, 1998. Consequently, the Register

accepts the CARPs determination todismiss the United Negro College Fund.

The only exhibit D party for whichIPG has met its burden is LittonSyndications.6 While there is no date ofexecution on the Litton/WSG contract,there is a June 16, 1998, letter from PeterSniderman of Litton to Raul Galaz ofWSG stating that enclosed are fourcopies of the executed LittonSyndications, Inc.Worldwide SubsidyGroup agreement. In addition, there isa June 18, 1998, letter from Galaz toSniderman stating that enclosed hereinplease find two (2) fully executed

originals of the above-referencedagreement. It is clear from thesedocuments that a valid representationalarrangement existed between Litton andWSG prior to July 31, 1998. IPG hastherefore met its burden as provided inthe June 22 Order.

2. The Status of ACG, WSG and IPG

After the extended discussion andanalysis of claim No. 176 in the June 22Order and above, one might believe thatthe validity of claim No. 176 isdefinitively resolved. This is not so,

because of issues surrounding thenamesACG and WSGthat appeared

on the claim. The Library must thereforeresolve whether claim No. 176 was adeliberately perpetrated fraud on theCopyright Office and the section 111filing system.

The CARP Report devotes aconsiderable amount of discussion tothe identity and status of ACG, WSG,and IPG. It is a complicated discussion.When claim No. 176 was originally filedwith the Copyright Office on July 11,1998, it listed ACG as the sole claimant.ACG was incorporated in May of 1998in the state of California by Raul Galaz,its principal, for the apparent purpose of

representing claimants before theLibrary for cable and satellite televisionroyalties. Although ACG was the onlyclaimant on claim No. 176, the claimstated that it was a joint claim beingfiled on behalf of ACG and on behalfof others. Claim No. 176. Mr. Galazsigned the claim. When Mr. Galaz wasinformed by the Copyright Office that in

order for claim No. 176 to be a jointclaim it must identify at least one otherclaimant, he amended claim No. 176 toinclude WSG. At that time, WSG wasnothing more than an unregistered,fictitious business name for ACG. Thefollowing year, Mr. Galaz moved fromCalifornia to Texas, whereupon he filedarticles of incorporation for WSG inTexas. Before leaving California, Mr.Galaz also registered the name WSG inCalifornia as a fictitious business namefor WSG.

Once in Texas, Mr. Galaz took stepsin 2000 to dissolve ACG by filing

articles of dissolution in California forACG. This left WSG as a Texascorporation. Mr. Galaz then adopted anunregistered, fictitious business namefor WSG in Texas: IPG. When MPAAmoved to dismiss claim No. 176 in Juneof 2000, IPG informed the Library in afootnote of its opposition to the motionthat ACG had voluntarily withdrawn itsclaim from the proceeding, leaving WSGTexas/IPG as the sole claimant in thisproceeding.

The first question is whether thesevarious changes in identity were anattempt to perpetrate a fraud on theCopyright Office by hiding from the

Office the real claimants in thisproceeding. In other words, did IPGdeliberately refrain from listing itsexhibit D claimants in claim No. 176(Litton, Flying Tomato Films, et al.)

because it was hiding something fromthe Office? Assuming that listing onlyACG and WSG (California) on claim No.176 was not an honest mistake, as IPGvigorously claims that it was, the onlyreason the Library can divine for notlisting the exhibit D claimants was thatACG/WSG did not then represent someor all of those claimants or, in thealternative, ACG/WSG did not want to

preclude the possibility of signing upadditional claimants after the July 31,1998, deadline.

Whether or not this was ACG/WSGstrue motivation is unknown, althoughthe CARP at least suggests a sinisterelement in Mr. Galazs actions. CARPReport at 42. In any event, the Register

believes that the Library hassatisfactorily dealt with the status ofIPGs representation of the exhibit Dclaimants in the June 22, 2000, Orderand the above discussion. It is apparentthat WSGi.e., Mr. Galazhad a valid



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7See footnote 2, supra.

8The same cannot be said for Unsolved Mysteries.Unsolved Mysteries is a network program which cannever be eligible for section 111 royalties. See 17U.S.C. 111(d)(3)(A) (only nonnetwork programs areeligible for distributions). ACG should have knownthat Unsolved Mysteries failed to satisfy therequirements of 37 CFR 252.3(a)(4). If this had beenthe only program that ACG listed in claim No. 176,there would be solid grounds for dismissal of theclaim.

representation arrangement with LittonSyndications in July of 1998 before theclose of the cable claim filing period.The Library need not make anydetermination as to whether Littonsagreement was with ACG/WSGCalifornia, WSG Texas, or IPG. Anyattempt to do so would necessarilyinvolve questions of state law with

respect to the effect of incorporation ofa company and use of fictitious businessnames. Such determinations are beyondthe jurisdiction of the Library and areunnecessary in this proceeding. Mr.Galaz/WSG had a valid representationagreement with Litton in July of 1998,and Litton affirms this relationship byallowing IPG to represent it in thisproceeding. Because the Library hasagreedthis one time 7that it wasacceptable that Litton did not appear onclaim No. 176, supra, Litton has a validclaim in this proceeding.

The second question surrounds ACGs

voluntary withdrawal from thisproceeding. MPAA contends that whenACG withdrew its claim that left onlyWSG California on claim No. 176, andWSG California was nothing more thana fictitious business name for ACG.MPAA Petition to Modify CARP Reportat 33. Littons representation agreementis with WSG Texas, which is not aclaimant in this proceeding, andtherefore claim No. 176 must bedismissed. IPG responds that it wascounsels mistake to inform the Librarythat ACG had withdrawn its claim andthat such mistake should be discounted

because it appeared in a footnote to an

opposition to MPAAs motion todismiss. IPG Reply to MPAA Petition toModify CARP Report at 2729.

Once again, the legal status of ACG,WSG California, WSG Texas, and IPGinvolve questions of state law beyondthe jurisdiction of the Library. While itis true that IPG did state that the claimsof ACG were withdrawn, it is illogicalto assume that IPG was effectivelyending its case by rendering claim No.176 void. Rather, it is apparent that IPG

believed that it held all rights of ACGwhen it sought to dissolve ACG inCalifornia, particularly since Mr. Galaz

was the principal for both organizations.It would work a serious injustice todeny Litton royalties based upon adetermination that Mr. Galaz made atechnical error in assuming that allrights of ACG were held by IPG beforeACG withdrew from the proceeding.Indeed, while IPG stated that it waswithdrawing ACGs claim, the Librarydid not enter any order to that effect,leaving the status of ACG in thisproceeding unresolved. Certainly, the

actions of Mr. Galaz are not to becondoned and should serve as awarning to future claimants to makesure that proper transfers of rights

between corporations are effected priorto seeking dismissal or dissolution of aclaimant. However, the Library hasdetermined that a valid representationarrangement existed for Litton and that,

in this instance, it is appropriate thatLittons claim be allowed to go forward.

Finally, there is the question of theprograms listed on claim No. 176.Section 252.3(d)(4) requires that forjoint claims there must be anidentification of at least one secondarytransmission of one of the jointclaimants copyrighted works by a cablesystem establishing a basis for the jointclaim. 37 CFR 252.3(a)(4). ACG listedtwo programs on claim No. 176,Unsolved Mysteries and Garfield andFriends, neither of which was ultimatelycredited to IPG. Unsolved Mysteries wasdropped from IPGs case because it wasdetermined that it was a networkprogram not eligible for section 111cable royalties. Both IPG and MPAAclaimed Garfield and Friends, and theCARP ultimately determined that it wasproperly credited to MPAA. This meansthat ACG did not identify a secondarytransmission on claim No. 176 that

belonged to one or more of its jointclaimants.

The purpose of requiringidentification of at least one secondarytransmission by a cable system is to

permit the Copyright Office todetermine if the claim is facially valid.In other words, if a claimant lists anetwork program, or a program that wasnot retransmitted in the calendar yearfor which royalties are sought, theOffice can take immediate action eitherto request further information, or todismiss the claim. The Office hascontemplated amending its rules torequire claimants to identify all theprograms that comprise their claim, butis aware that there is considerableopposition among copyright claimantsto adopting such a requirement. If theprogram listed on a claim appearsfacially valid, the Office does notattempt to resolve its ownership statusand the claim is allowed to go forward.In this case, it is apparent that IPG hada colorable claim to Garfield andFriends, believing that it had a validrepresentation agreement withMendelson/PAWS, the producer of theGarfieldprograms. The CARPdetermined, however, that MPAA had astronger claim, ruling that General Millsheld the syndication rights to theprograms. Consequently, this is not a

case where IPG had no realistic claim toGarfield and Friends.8

Given the dispute over ownershiprights ofGarfield and Friends, theRegister determines that it would beunjust to invalidate all of the claimscovered by claim No. 176 because it wasultimately determined that MPAA heldthe superior claim to the program. Were

we to rule the other way, it would make252.3(a)(4) a trap for unwary jointclaimants. Since the rule requiresidentification of only one secondarytransmission, hundreds of joint claimscould potentially be invalidated if asingle program is identified that, afterlitigation before a CARP, is determinedto have a superior claimant. There isalso the question of what might happenif the joint claimant with the singleidentified program withdraws its claimor changes representation in theproceeding. Such gamesmanship couldpotentially wipe out many otherwise

valid claims from the proceeding.Because IPG had a colorable claim toGarfield and Friends at the start of thisproceeding, it would be unjust toinvalidate claim No. 176 because theprogram was ultimately awarded toMPAA.

In sum, the Register concludes thatclaim No. 176 is sufficiently valid toallow the claim of Litton, as described

below, to go forward in this proceedingand receive a distribution of royalties.

3. Programs Credited to Litton

During proceedings before the CARP,IPG claimed thirteen programs for

Litton: Algos Factory; Jack Hanna

s

Animal Adventures; Dramatic Momentsin Black Sports History; Dream Big;Harvey Penicks Private Golf Lessons;MomUSA; Nprint; Critter Gitters; ShakaZulu; Sophisticated Gents; The SportsBar, Bloopys Buddies and Story of aPeople. The CARP did not credit IPGwith Shaka Zulu, finding that theprogram properly belonged to HarmonyGold USA, and determined that Story ofa People was an unclaimed program.The CARP also did not credit IPG withDream Big, determining that it wasproperly claimed by Warner Bros. as thesyndicator of the program. Theremaining programs were credited toIPG.

In its petition to modify the initialdecision of the CARP, MPAA challenges



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9The CARP determined that Just Imagine wasproperly credited to Litton, and not to FlyingTomato Films. Both of these parties are representedby IPG. No challenge to the CARPs determinationon this matter was made.

10 In explaining their final numbers, CARPs haveflexibility in the methodologies or approaches they

Continued

the CARPs determination to creditLitton with Dramatic Moments in BlackSports History, Critter Gitters, andBloopys Buddies. The CARP creditedCritter Gitters and Bloopys Buddies toLitton because these programs appearedon Littons representation agreementwith WSG. CARP Report at 59. BothMPAA and IPG claimed Dramatic

Moments in Black Sports History. Afterallowing evidentiary supplements toIPGs and MPAAs claim on thisprogram, the CARP stated that [i]nview of the entire supplemented record,therefore, the CARP finds that DramaticMoments in Black Sports Historyisrepresented under the IPG rather thanthe MPAA claim.Id. at 6162.

With respect to Critter Gitters andBloopys Buddies, MPAA asserts thatIPG made no claim for either programand presented no evidence of theirvalue. MPAA Petition to Modify CARPReport at 44. Further, MPAA asserts that

the CARPcites no evidence that eitherprogram was broadcast in the United

States.Id. With respect to DramaticMoments in Black Sports History,MPAA argues that:

The program is listed in MPAAs list ofclaimed programs. The claimantNew LineCinema Corporationappears on MPAAslist of claimants. It appears on the alpha listas owned by New Line Cinema. New Linehas certified its entitlement to royalties forDramatic Moments in Black Sports History.The record, therefore, only will support aconclusion that MPAA represents New Line.

Id. at 4344 (footnotes omitted).In response to MPAAs challenge of

Critter Gitters and Bloopys Buddies, IPGacknowledges that it made no claim in

these programs and did not present anyevidence of their value because bothprograms appear to have been broadcastexclusively on non-commercialtelevision stations. IPG Reply to MPAAPetition to Modify CARP Report at 34.IPG does not challenge modification ofthe Panel Report to reflect that suchprograms were not claimed by IPG.Id.IPG does assert, however, that there wasevidence supporting its claim toDramatic Moments in Black SportsHistory, stating that the program isexpressly identified in the contractbetween Litton and WSG and was

therefore properly credited to IPG. Id.It is apparent that the CARP acted

arbitrarily in crediting IPG with CritterGitters and Bloopys Buddies, and theRegister recommends rejecting thisdetermination and removing theprograms from Littons list. With respectto Dramatic Moments in Black SportsHistory, the CARP offered no reasons orexplanation as to why it was awardingthe program to IPG rather than MPAA,other than to state that such result was

obtained [i]n view of the entiresupplemented record. CARP Report at6162. Unexplained decisionmaking isthe hallmark of arbitrary action. TheRegister therefore recommends rejectionof the CARPs award ofDramaticMoments in Black Sports Historyto IPG.The June 5, 2001, Order directed theCARP to explain its reasoning for

awarding Dramatic Moments in BlackSports Historyto IPG.

In sum, the June 5, 2001, Orderdirected the Panel to credit thefollowing programs to Litton: AlgosFactory; Jack Hannas AnimalAdventures; Harvey Penicks PrivateGolf Lessons; Mom USA; Nprint;Sophisticated Gents; The Sports Bar;andJust Imagine.9 The Order alsodirected the CARP to explain its reasonsfor crediting Dramatic Moments inBlack Sports Historyto IPG and, if itcontinued to believe that it made thecorrect determination, to credit IPG with

that program.4. The Royalty Awards

The CARP awarded IPG 0.5% of theprogram supplier category funds, andthe remaining 99.5% to MPAA. TheCARP, however, failed to explain itsreasoning or its methodology for

bestowing these awards. Becauseunexplained decisionmaking by a CARPis arbitrary, the CARPs awards must berejected. The June 5, 2001, Orderremanded the matter to the CARP todetermine new awards for IPG andMPAA, in light of the decisionannounced in that Order to dismiss

additional IPG claimants and programs,and to explain the reasoning for the newawards.

The CARPs failure to articulate anyreasons for the 0.5% and 99.5% awards,and the methodology it used to producethese numbers, is puzzling. The CARP

began its analysis in an appropriatefashion, fully detailing in its report thedistribution methodologies proposed byIPG and MPAA. As discussed above,IPGs and MPAAs methodologies werepremised on fundamentally differentprinciples. MPAA addressed themarketplace value of the programs itrepresented by attempting to evaluatethe amount of viewership they received,while IPG examined the value of theprograms to cable operators whoretransmitted them. IPGs methodologyaccorded the programs it represented ahigher award0.881%than if theMPAAs methodology were applied tothe same programs0.0708%. The

CARP then analyzed each sidescriticisms of the others methodologyand concluded that a number of thecriticisms were valid. It found thefollowing shortcomings for MPAAsmethodology:MPAAs direct testimony did not

sufficiently lay the foundation for thesurvey or explain its results.

The Panel was forced to call its ownwitnesses, Mr. Lindstrom fromNielsen, and Mr. Larson from CableData Corporation to explain theirmethods of data acquisition andreporting.

The number of sampled stations [inMPAAs station survey] has declinedwithout adequate explanation.

Station selection criteria excludedForm 1 and Form 2 cable systems.

The number ofzero viewing hoursshows the flaw in attempting to usethe Nielsen data as a proxy for theretransmission market especially

since Nielsen had 24 hour samplingcapability in 1997.The method of interpolation of non-

sweep month estimated viewingneeds statistical validation.

There is an overvaluation of WTBSand under-valuation of the otherSuperstations in the survey.CARP Report at 102103. For IPG, the

CARP found the following criticisms:A mathematically sound basis for the

creation and application of the stationweight factor and time period weightfactor should have been presented bya statistician.

Daypart data was misapplied thus

overstating all other viewing.It doesnt directly address the

marketplace value of the workstransmitted, a primary criteria.

Id. at 103. The Register has reviewed therecord evidence in this proceeding andfinds that there is ample support forthese criticisms. They are not arbitrary.What is arbitrary, however, is what theCARP did next. Rather than addressthese criticisms in the context of itsdecision making process, the CARPimmediately awarded the 0.5 and 99.5percentages without any explanation asto how they arrived at these numbers.

Since no reasoning was provided forthese numbers, they must be rejected.National Assn of Broadcasters v.Librarian of Congress, 146 F.3d 907, 923(D.C. Cir. 1998)(royalty distributionaward arbitrary if rendered withoutexplanation). The June 5, 2001, Orderdirected the CARP to provide a fullexplanation of the approach it was usingin adopting new distribution awards.10



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use. The courts have recognized that there is aconsiderable zone of reasonableness whenawarding a particular distribution percentage. See,e.g. National Cable Television Assn v. CopyrightRoyalty Tribunal, 724 F.2d 176, 182 (D.C. Cir.

1983). In other words, there are no magical formulasthat produce precise results. In this proceeding, theCARP could have chosen either IPG s or MPAAsformulas, adjusted the chosen formula to accountfor the CARPs criticisms of it, and used thatprocess to yield the final numbers. Or, the CARPcould have chosen a combination of both formulas,taking into account the criticisms of both, to arriveat the final numbers. Or, the CARP could haveadopted its own distribution methodology orformula, using the data in the record of theproceeding to achieve the final results. Each ofthese approaches is acceptableprovidedthat theCARP articulates the reasons for its choice, explainshow it applied its choice to produce its finaldetermination, and the determination itself isreasonable.

The Revised CARP Report

On June 20, 2001, the CARP deliveredits revised report. The revised reportassigns new distribution percentages toIPG and MPAA and explains the CARPsreasoning for both its initial awards andthe revised awards.

As directed by the June 5, 2001 Order,the CARP only credited IPG withprograms belonging to LittonSyndications. The programs are: AlgosFactory, Jack Hannas AnimalAdventures, Harvey Pennicks PrivateGolf Lessons, MomUSA, Nprint,Sophisticated Gents, The Sports Barand

Just Imagine. The CARP did not creditIPG with Dramatic Moments in BlackSports History, reversing its earlierdetermination that Litton was thesyndicator of the program. See Initialreport at 62; Revised report at 2. TheCARP determined that [a]lthough bothparties claim this program, New LineCinemas program certification with

MPAA indicates that it claims theprogram as syndicator. Revised reportat 2.

With respect to awards, the CARPmodified its initial determination byreducing IPGs award from 0.5% to0.212% , and increasing MPAAs awardfrom 99.5% to 99.788%. The CARP thenexplained how it determined the initial0.5% and 99.5% awards, and thenmodified them in light of the June 5,2001, Order to produce the newpercentages.

Although the CARP was presentedwith disparate methodologies forcalculating the royalty awards-MPAAsmethodology based on Nielsenhousehold viewing hours and IPGsmethodology based on value of theprogramming to cable operatorstheCARP did find two elements of thesecompeting methodologies in common.MPAA based its methodology upon adatabase obtained from CDC thatcontained 82 commercial television

broadcast stations that were

retransmitted by large (Form 3) cablesystems on a distant basis during 1997.IPG based its methodology upon a CDCdatabase that contained 99 commercialtelevision broadcast stations (whichincluded the same 82 stations used byMPAA) that were retransmitted bysmall, medium, and large (Form 1, 2,and 3) cable systems on a distant basis

during 1997. Both of these databaseshave two overlapping categories:Rebroadcasts, the number of times aparticular program was retransmitted;and Airtime, the length of theprogram multiplied by the number oftimes it was rebroadcast. The CARPstated that the purpose of examining thetwo databases was two-fold: First toverify the accuracy of the numberspresented in the testimony and exhibits;and secondly to give the CARP a senseof the relative positions of MPAA andIPG represented claimants in the 1997marketplace by comparing the only two

categories included in both databases,Rebroadcasts and Airtime. Revisedreport at 18.

Appendix A of the revised CARPreport compares the Rebroadcasts of theeight programs credited to Litton (asdirected by the June 5, 2001 Order) for

both the IPG and MPAA databases. Forthe IPG database, these programsaccounted for 0.4394782365% of thetotal number of program titlesRebroadcast in 1997. For the MPAAdatabase, the eight programs account for0.2811997603% of the total number ofprogram titles Rebroadcast in 1997.

Appendix B of the revised CARP

report compares the Airtime of the eightprograms credited to Litton for both theIPG and MPAA databases. For the IPGdatabase, these programs accounted for0.3494840195% of total Airtime of allprograms retransmitted in 1997. For theMPAA database, the programsaccounted for 0.2171099164% of thetotal Airtime of all programsretransmitted in 1997.

The numbers described inAppendices A and B provide a range ofcomparison as to the amount of timethat Littons eight programs wereavailable on distant broadcast signals

retransmitted by cable systems. But thisrange did not account for how muchthese programs were watched, or thevalue ascribed to these programs bycable operators. To account for this, theCARP turned to MPAAs and IPGsmethodologies and applied its criticismsof the evidence presented for eachmethodology, assessing penalties(percentage deductions from the totalaward yielded by the methodology) foreach criticism depending upon theseverity of the criticism. The eightcriticisms of MPAAs methodology and

the three criticisms of IPGsmethodology, and their accompanyingdeductions, are described in AppendixD of the CARPs revised report. As aresult of the eight criticisms, MPAAsuffered a 0.450% reduction in theawards yielded by its methodology, andIPG suffered a 0.375% reduction in theawards yielded by its methodology.

As with its comparison of IPG andMPAA databases, the revised IPG andMPAA methodologies (i.e. after thepenalty reductions) yielded yet anotherrange of numbers. For IPG, the revisedMPAA methodology gave it an award of0.462% of the 1997 royalty funds, whilerevision of its own methodology yieldedan award of 0.731%. See Appendix D.According to the CARP, it is this rangeof numbers that yielded the 0.5% awardto IPG in the initial report. Revisedreport at 18.

Because the June 5, 2001, Ordereliminated programs credited to IPGunder both MPAAs and IPGsmethodologies, the CARP needed a wayto adjust downward IPGs award, andincrease MPAAs award, to reflect theeliminated programs. It did this byexamining the reduction in thepercentages of Rebroadcasts and Airtimecredited to IPG for its original claim andderived a median change of minus57.673%. Appendix C. The minus57.673% figure represents the medianchange from the original amount ofRebroadcasts and Airtime credited toIPG. According to the CARP,[e]liminating all claimants exceptLitton, means that on average, IPG now

represents only 42.322% of theRebroadcasts and Airtime that they did

before. Revised report at 20. Thismeant that IPG is entitled to 42.322%of the Original Award of 0.5%. Id.Consequently, the CARP awarded IPG0.212% of the 1997 royalty funds in thesyndicated program category, and theremaining 99.788% to MPAA.

Petitions to Modify the CARPs RevisedReport

Both MPAA and IPG level a numberof criticisms at the conclusions reached

by the CARP in the revised report, all of

which they charge rise to the level ofarbitrary action as a matter of law.MPAA submits that the CARPs awardof 0.212 of one percent of the royaltyfunds to IPG is excessive and must bereduced. IPG counters that themethodology used by the CARP isfundamentally flawed and that its awardmust be increased.

MPAA charges that the CARP mademathematical, methodological, andevidentiary errors in both the initial andrevised reports. The principalmathematical error, according to MPAA,



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11 IPG counters this argument by noting thatMPAAs 82 station data includes all broadcasts,irrespective of whether the program falls in thesyndicated programming category or anothercategory (such as sports, local programming, etc.)and irrespective of whether the program is claimedby IPG, MPAA or no party. IPG s 99 station datamakes these distinctions, resulting in fewermeasured broadcasts and broadcast hours.

concerns the CARPs use of IPGsrequested royalty distributionpercentage of 0.881. In appendix D tothe revised report, the CARP used the0.881% distribution percentage offered

by IPG and adjusted it downward by0.375% to reflect its three criticisms ofIPGs evidentiary presentation. MPAAstates that 0.881% is the wrong starting

percentage because it reflects all theprograms originally claimed by IPG anddoes not take into account the programsthat the CARP eliminated from IPGsclaim. Using IPGs valuations for each ofits claimed programs, MPAA asserts thatthe CARP should have adjusted the0.881% claim of IPG downward to0.332%, since only 37.68% of theprograms originally claimed by IPGwere credited by the CARP in its initialreport. MPAA Petition to ModifyRevised Report at 5. Deducting 0.375%for the three criticisms of IPGsevidentiary presentation from 0.332%

yields a negative distribution percentagefor IPG.MPAA challenges the methodology

employed by the CARP; in particular theuse of Rebroadcasts and Airtime forIPGs and MPAAs representedprogramming. MPAA asserts that thisapproach unduly relies upon timeconsiderations (i.e. time on the air) andignores the marketplace value of theprogramming in contravention of priorCARP precedent. CARP Report inDocket No. 943 CARP CD 9092 at 1920 (June 3, 1996). These considerationsaside, MPAA also questions the

usefulness of comparing Rebroadcastsand Airtime from both MPAAs andIPGs sample surveys, since MPAAs 82station sample survey contains morerebroadcasts and more hours of airtimethan IPGs 99 station survey. Theinherent illogic of this result shouldhave, according to MPAA, indicated tothe CARP that reliance solely on thesenumbers is flawed.11

MPAA also makes numerouschallenges to the CARPs treatment ofthe evidence presented in thisproceeding. In particular, MPAA assertsthat the CARPs five criticisms ofvarious aspects of MPAAs evidentiary

presentation, that resulted in a 0.450%upward adjustment to IPGs share of theroyalties as identified by MPAA, are

baseless. First, MPAA argues that the 82station sample survey it put forth was

statistically sound since it very nearlyreflects the entire universe of distantsignal carriage, accounting for 92.5 percent of aggregate subscribers instances.Therefore, the possibility of a margin forerror that is in any way significant isnil. MPAA Petition to Modify RevisedReport at 12.

Second, MPAA argues that there is no

record evidence that demonstrates thatexclusion of Form 1 and Form 2 cablesystems from the total instances ofdistant cable carriage of syndicatedprogramming negatively impacts theresults of its 82 station sample survey,since the Form 3 cable systems used inthe survey account for 89% of all cablesubscribers to distant broadcast stations.Third, MPAA argues that the CARP hadno grounds to criticize the number ofzero viewing instances reported in theNielsen household viewing hours usedin the MPAA survey, especially sincePaul Lindstrom, the only qualified

expert in economics and statisticstestifying in the proceeding, assertedthat they did not have a significant

bearing on the statistical validity of thesurvey.

Fourth, MPAA charges that it wasinappropriate and unfair for the CARPto criticize MPAA for not presentingrelative error figures with respect to itsmethodology components and formixing Nielsen diary data with Nielsenmeter data. Finally, MPAA charges thatit was groundless for the CARP topenalize MPAA 0.10% for itsinterpolation of data for time periods

not measured by Nielsen (i.e. nonsweeps periods) and only accord IPG a0.075% penalty for a similar criticism.

IPG also asserts that the CARP madea series of errors in fashioning both theoriginal awards and the revised awards.IPG asserts that the CARP erroneouslyassigned two programsDream BigandDramatic Moments in Black SportsHistoryto MPAA. Dream Bigwascredited to MPAA in the CARPsoriginal report because it identifiedWarner Bros. as the syndicator of theprogram. With respect to DramaticMoments in Black Sports History, the

CARP originally assigned it to IPG (asclaimed by Litton) but was directed bythe Librarians June 5, 2001, Order toprovide an explanation for this decision.In the revised report, the CARP changedits mind and assigned DramaticMoments in Black Sports HistorytoMPAA because it concluded that NewLine Cinema was the syndicator of theprogram, not Litton. IPG submits that ifthe Librarian does not restore these twoprograms to Littons claim, then heshould place the funds for the[se]program[s] * * * in escrow until the

proper recipient is determined. IPGPetition to Modify Revised Report at 4.

Like MPAA, IPG criticizes the CARPsreliance upon the number ofRebroadcasts and Airtime in fashioningits awards, noting that undue relianceon time considerations is contrary toprecedent of the CRT and is notreflective of the value of the

programming. IPG states that it providedthe CARP with the unit value for eachof its claimed programs (utilizing IPGsmethodology), thereby giving the CARPthe opportunity to derive an award

based on the programs it credited toIPG. The eight programs credited toLitton amount to 79.074% of theoriginal award to IPG of 0.5%, meaningthat the CARP should have adjusted theoriginal 0.5% award downward to0.3958%. Such an award would,according to IPG, reflect the true valueof the Litton programs.

With respect to the CARPs criticismsof MPAAs methodology, IPG arguesthat the CARP did not go far enough.IPG asserts that the CARP never verifiedthe number of household viewing hoursattributed to MPAA in its study, notingthat MPAA received credit forappreciable numbers of programs notclaimed by MPAA or certified by itsmembers. Further, IPG asserts that theCARP should have penalized MPAA forhaving to call Paul Lindstrom andThomas Larson as witnesses to provideadditional support for MPAAsmethodology. And IPG submits that theCARP should have penalized MPAAmore than it did for reducing the

number of stations in its station samplesurvey and for the large amount of zeroviewing instances of programmingcontained in the Nielsen data presented

by MPAA.Finally, IPG asserts that certain of the

CARPs criticisms of IPGs methodologyare not valid. With respect to theCARPs critique that IPG misapplied itsdaypart data thereby overstating itsweighted viewing factor, IPG asserts thatno evidence was presented todemonstrate that such misapplicationprovided any benefit to IPG. And, withrespect to the CARPs criticism that

IPGs methodology attempted todemonstrate the overall appeal ofbroadcast stations to cable operators, asopposed to the overall appeal of theprogramming to cable operators, IPGargues that the CARP simplymischaracterized its summary referenceofoverall station appeal by ignoringthe elements that comprised this aspectof IPGs methodology.

Rejection of the Revised Report

The Register makes herrecommendation as to whether the



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revised royalty awards to IPG andMPAA should be adopted by theLibrarian of Congress, or whether theyare arbitrary or contrary to theprovisions of the Copyright Act, title 17,United States Code. In making thisrecommendation, the Register hasreviewed both the initial report of theCARP and the revised report, including

the petitions to modify both reportsfiled by the parties. For the reasonsstated below, the Register concludesthat both the initial report and therevised report are arbitrary and must berejected.

Review of the initial report and therevised report reveals a number ofarbitrary actions by the CARP. Theseinclude: (1) Failure to adequatelyexplain the evidence supporting theCARPs reversal of its award of DramaticMoments in Black Sports History fromIPG to MPAA; (2) failure of the CARPin its initial report to adjust downward

IPGs requested distribution percentageafter the CARP eliminated a number of

IPGs claimed programs; (3) failure ofthe CARP in its initial report to adjustupward MPAAs requested distributionfor IPG given the number of programswhich the CARP credited IPG; (4) failureof the CARP in the revised report toadjust both IPGs and MPAAs requesteddistributions in light of the finalprograms credited to IPG; (5) failure ofthe CARP to base any of its downwarddeductions to both IPGs and MPAAsmethodologies (based on the CARPscriticisms) on record evidence; and (6)adoption by the CARP of a distribution

methodology that arguably has littlerelationship to the marketplace value ofthe programs. In recommendingrejection of the CARPs determination,the Register focuses her discussion onthe second failure described above-thelack of downward adjustment to IPGsrequested distribution in light of theprograms credited-because it created afundamental flaw in the CARPsapproach that invalidates thedistribution awards granted IPG in boththe initial and the revised reports.

The CARPs distributionmethodology, articulated only in the

revised report, is fully discussed above.Briefly recapped, it is the product of tworanges. First, the CARP utilized theRebroadcast and Airtime data-the onlydata categories common to bothmethodologies-to give the CARP asense of the relative positions of MPAAand IPG represented claimants in the1997 marketplace. Revised Report at18. This produced the first range forlocating the CARPs final awards. Then,the CARP utilized the partiescompeting requests for allocations andthe formulas presented advocating their

averred distribution percentages,adjusting them by applying deductionsreflective of the CARPs criticisms of therespective methodologies. Thisproduced the second range for locatingthe CARPs final awards. The secondrange appears to be the one actuallyused by the CARP to settle upon itsoriginal award of 0.5% to IPG. Id.

A critical flaw occurs with the inputsfor the second prong of the CARPsmethodology. The CARP started withIPGs requested distribution percentageof 0.881%, drawn from IPGs proposedfindings of fact and conclusions of law.The 0.881% is an inflated percentage,however, because it was based uponinclusion of all programs originallyclaimed by IPG. Earlier in the CARPsinitial report, it spent considerable timediscussing the validity of IPGs claimedprograms and found a number of theclaims invalid. See, Initial Report at 7274 (royalty allocation for Dragon Ball Z

to MPAA; no royalty allocation forEnchanted Tales and Thumbelina;royalty allocation for Dream BigtoMPAA; no royalty allocation for BottomLine, By River By Rail, Til Earth andHeaven Ring; no royalty allocation forLou Rawls Parade of Stars; no royaltyallocation for Psychic Friends, PsychicFriends Network, Psychic RevivalNetwork, Psychic Solution, PsychicTalk, Psychic Talk 2, Psychic Talk USA,Psychic Talk Thirty). These programswere included in IPGs 0.881% request.It was therefore arbitrary for the CARPto accept the 0.881% figure as a starting

point because it had eliminated many ofthe programs that produced thisnumber.

Likewise, the CARP made the sameerror when it looked at the distributionpercentage for IPG yielded by MPAAsmethodology. MPAAs distributionpercentage of 0.012% was based on onlyseven programs credited to IPG.However, in its initial award, the CARPcredited IPG with far more than justseven programs. It was thereforearbitrary for the CARP to use the0.012% figure as a starting point for itsapplication of MPAAs methodology.

In sum, the faulty inputs to thesecond prong of the CARPsmethodology make the range generated

by that prong wholly inaccurate, therebyrendering the initial award erroneous.The revised report, since it merely takesthe original award to IPG and makes amedian change to it based upon thereduction in programs credited to IPG,is likewise erroneous. Although thereare other serious flaws in the CARPsapproach, as described above, theRegister need go no further. The CARPsdetermination must be rejected, and the

Librarian must substitute his owndetermination.

Part TwoRecommendation of theRegister

This is not the first time that theRegister of Copyrights hasrecommended, and the Librarian ofCongress has accepted, a rejection of a

decision of a CARP. In most of thosecases, the Register has recommendedthat only portions of a CARPs decision

be rejected, see, e.g., 61 FR 55653(October 28, 1996)(cable distribution);62 FR 55742 (October 28, 1997)(satelliterate adjustment). In one case, theRegister recommended that theLibrarian reject the royalty rateestablished by the CARP, and substitutehis own determination. 63 FR 25394(May 8, 1998)(digital performance right

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US Copyright Office: 66fr66433