The Department declines to adopt this comment. The requirement that
records maintained pursuant to section 2257 be segregated not only
streamlines the inspection process but protects producers from
unbridled fishing expeditions. Inspectors should not be faced with
situations in which they have to sift through myriad filing cabinets to
find the records they are seeking, and producers should not be faced
with the risks that such exploration might create. Hard copies,
electronic copies, or files consisting of both can be segregated in
separate storage containers or hard drives (or even in separate
directories or folders on a hard drive) in/on which no other records
are held. Two commenters commented that the implicit requirement that
records be kept at a place of business is unreasonable and argued that
the regulation should permit third-party custody of records. The
Department declines to adopt this comment. Permitting a third party to
possess the records would unnecessarily complicate the compliance and
inspection processes by removing the records from the physical location
where they were initially collected, sorted, indexed, and compiled. For
example, producers could provide false names and addresses to the third
party as a means to avoid scrutiny by law enforcement. Historically,
producers have used front corporations in order to evade both law
enforcement and tax authorities. Permitting third-party custodianship
would exacerbate this problem. Custodians could, for example, disclaim
any responsibility for the condition or completeness of the records or
be unable to provide additional information regarding the status of the
records. Permitting such third-party custodians in the final rule would
thus require additional regulations to ensure that the third-party
custodian could guarantee the accuracy
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of the records, would act as a legally liable agent of the producer,
and would raise other administrative issues as well.
Furthermore, permitting a third party to maintain the records
would, if anything, exacerbate the concerns of numerous commenters
regarding the privacy of information on performers and businesses by
placing that information in the hands of another party.
Three commenters commented that the record-shifting requirements
under Sec. Sec. 75.2(a) and (b) are impermissibly burdensome.
According to the commenters, primary producers would resist turning
over records that contain trade secrets, such as the identities of
performers. The Department declines to adopt these comments. The D.C.
Circuit Court clearly held in American Library Ass'n v. Reno that the
record-keeping requirements were not unconstitutionally burdensome. Any
primary producer who fails to release the records to a secondary
producer is simply in violation of the regulations and may not use the
excuse that the records contain alleged trade secrets to avoid
compliance.
Three commenters commented that the requirement that the statement
appear in font size equal in size to the names of the performers,
director, producer, or owner, whichever is larger, and no smaller in
size than the largest of those names, and in no case in less than 11-
point type, in black on a white, untinted background amounts to forced
speech, would ruin the aesthetic quality of web pages and other media,
and is impractical. Another commenter commented that the requirement
that the statement appear in a certain typeface cannot apply to web
sites, whose appearance depends on the viewer's computer. In response
to these comments, the Department has revised final rule to require
that the statement appear in typeface that is no less than 12-point
type or no smaller than the second-largest typeface on the website, and
in a color that contrasts with the background color. Regarding the
claim that such an administrative label constitutes forced speech, the
Department notes that the federal government imposes a range of such
requirements, such as nutritional labels on food products and safety
warnings on a myriad of products.
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