Summary: The Copyright Royalty Tribunal was created to oversee the compulsory licenses provided by the Copyright Act. These included the use of copyrighted materials in coin-operated machines, retransmissions by cable systems of distant broadcasting signals, the use of records in jukeboxes, and the use of music and other creations by noncommercial broadcasters. The Tribunal was to adjust and determine the compulsory license rates, determine the distribution of fees, and determine reasonable terms and rates to be paid to copyright owners by public broadcasting entities. The Tribunal has operated according to its legislative mandate and has held all proceedings required by statute on schedule. Four of the Tribunal's five key decisions have been appealed. The Tribunal's operational effectiveness could be improved by: (1) ensuring that future appointed commissioners possess experience and expertise in copyright issues, financial or economic interests, and rate setting; (2) removing limitations that result from the lack of legal counsel; (3) access to objective, expert opinion; (4) subpoena power; and (5) clear criteria on which to base its decisions. The Tribunal has organizational limitations which are not shared by other Federal commissions. Further, royalty funds held by the Government are not distributed promptly. This is largely due to a requirement in the Copyright Act that royalty funds be withheld pending appeals. If the organization is to be retained, GAO believes its organizational limitations should be removed. GAO recommended that Congress appropriate additional funds to improve the operations of the Tribunal, require full distribution of royalty payments within 30 days of a decision, provide the Tribunal with access to a general counsel, subpoena power, and expert opinion when needed, and require that future commissioners be knowledgeabe in matters related to copyright. Corrective action should be taken as to the underutilization of the Tribunal's high level officials by reducing the size of the Tribunal, restructuring the Tribunal, transferring the Tribunal to the Department of Commerce, eliminating the Tribunal, or restructuring the Tribunal as a part-time ad hoc body with presidentially appointed commissioners convened by the Register of Copyrights.
