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Sirius XM says CRB sets royalty rate at 9.0% of gross revenue for 2013

Sirius XM (SIRI) disclosed in regulatory filing that the Copyright Royalty Board, or CRB, of the Library of Congress issued its determination regarding the royalty rate payable by the company under the statutory license covering the performance of sound recordings over its satellite digital audio radio service, and the making of ephemeral, or server, copies in support of such performances, for the five-year period starting January 1, 2013 and ending on December 31, 2017. Under the terms of the CRB’s decision, the company will pay a royalty of 9.0% of gross revenues, subject to certain exclusions, for 2013, 9.5% for 2014, 10.0% for 2015, 10.5% for 2016, and 11% for 2017. The rate for 2012 is 8.0%, the company said. The revenue subject to royalty includes subscription revenue from its U.S. satellite digital audio radio subscribers, and advertising revenue from channels other than those channels that make only incidental performances of sound recordings. Exclusions from revenue subject to the statutory license fee include, among other things, revenue from channels, programming and products or other services offered for a separate charge where such channels make only incidental performances of sound recordings; revenue from equipment sales; revenue from current and future data services including video services offered for a separate charge; intellectual property royalties; credit card, invoice and fulfillment service fees; and bad debt expense. The regulations also allow the company to further reduce monthly royalty fee in proportion to the percentage of our performances that feature pre-1972 recordings which are not subject to federal copyright protection as well as those that are licensed directly from the copyright holder, rather than through the statutory license. The company said the parties have fifteen days from the December 14, 2012 determination to move for rehearing and once the CRB has considered any rehearing motions and responses to such motions, the Librarian of Congress will publish the final determination in the Federal Register. Affected parties will have thirty days from that publication to appeal the decision to the U.S. Court of Appeals for the District of Columbia Circuit.