[DOCID: f:sr042.106]
From the Senate Reports Online via GPO Access
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Calendar No. 24
106th Congress Report
1st Session SENATE 106-42
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SATELLITE HOME VIEWERS IMPROVEMENTS ACT
_______
April 13, 1999.--Ordered to be printed
_______
Mr. Hatch, from the Committee on the Judiciary, submitted the following
R E P O R T
[To accompany S. 247]
The Committee on the Judiciary, to which was referred the
bill (S. 247) to amend title 17, United States Code, to reform
the copyright law with respect to satellite retransmissions of
broadcast signals, and for other purposes, having considered
the same, reports favorably thereon, with an amendment, and
recommends that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose..................................................... 4
II. Legislative history......................................... 5
III. Discussion.................................................. 9
IV. Vote of the Committee....................................... 11
V. Section-by-section analysis................................. 11
VI. Cost estimate............................................... 15
VII. Regulatory impact statement................................. 18
VIII. Changes in existing law..................................... 18
The bill, as amended, is as follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Satellite Home Viewers Improvements
Act''.
SEC. 2. LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY TRANSMISSIONS BY
SATELLITE CARRIERS WITHIN LOCAL MARKETS.
(a) In General.--Chapter 1 of title 17, United States Code, is
amended by adding after section 121 the following new section:
``Sec. 122. Limitations on exclusive rights; secondary transmissions by
satellite carriers within local markets
``(a) Secondary Transmissions of Television Broadcast Stations by
Satellite Carriers.--A secondary transmission of a primary transmission
of a television broadcast station into the station's local market shall
be subject to statutory licensing under this section if--
``(1) the secondary transmission is made by a satellite
carrier to the public;
``(2) the secondary transmission is permissible under the
rules, regulations, or authorizations of the Federal
Communications Commission; and
``(3) the satellite carrier makes a direct or indirect charge
for the secondary transmission to--
``(A) each subscriber receiving the secondary
transmission; or
``(B) a distributor that has contracted with the
satellite carrier for direct or indirect delivery of
the secondary transmission to the public.
``(b) Reporting Requirements.--
``(1) Initial lists.--A satellite carrier that makes
secondary transmissions of a primary transmission made by a
network station under subsection (a) shall, within 90 days
after commencing such secondary transmissions, submit to that
station a list identifying (by name and street address,
including county and zip code) all subscribers to which the
satellite carrier currently makes secondary transmissions of
that primary transmission.
``(2) Subsequent lists.--After the list is submitted under
paragraph (1), the satellite carrier shall, on the 15th of each
month, submit to the station a list identifying (by name and
street address, including county and zip code) any subscribers
who have been added or dropped as subscribers since the last
submission under this subsection.
``(3) Use of subscriber information.--Subscriber information
submitted by a satellite carrier under this subsection may be
used only for the purposes of monitoring compliance by the
satellite carrier with this section.
``(4) Requirements of stations.--The submission requirements
of this subsection shall apply to a satellite carrier only if
the station to whom the submissions are to be made places on
file with the Register of Copyrights a document identifying the
name and address of the person to whom such submissions are to
be made. The Register shall maintain for public inspection a
file of all such documents.
``(c) No Royalty Fee Required.--A satellite carrier whose secondary
transmissions are subject to statutory licensing under subsection (a)
shall have no royalty obligation for such secondary transmissions.
``(d) Noncompliance With Reporting Requirements.--Notwithstanding
subsection (a), the willful or repeated secondary transmission to the
public by a satellite carrier into the local market of a television
broadcast station of a primary transmission made by that television
broadcast station and embodying a performance or display of a work is
actionable as an act of infringement under section 501, and is fully
subject to the remedies provided under sections 502 through 506 and
509, if the satellite carrier has not complied with the reporting
requirements of subsection (b).
``(e) Willful Alterations.--Notwithstanding subsection (a), the
secondary transmission to the public by a satellite carrier into the
local market of a television broadcast station of a primary
transmission made by that television broadcast station and embodying a
performance or display of a work is actionable as an act of
infringement under section 501, and is fully subject to the remedies
provided by sections 502 through 506 and sections 509 and 510, if the
content of the particular program in which the performance or display
is embodied, or any commercial advertising or station announcement
transmitted by the primary transmitter during, or immediately before or
after, the transmission of such program, is in any way willfully
altered by the satellite carrier through changes, deletions, or
additions, or is combined with programming from any other broadcast
signal.
``(f) Violation of Territorial Restrictions on Statutory License
for Television Broadcast Stations.--
``(1) Individual violations.--The willful or repeated
secondary transmission to the public by a satellite carrier of
a primary transmission made by a television broadcast station
and embodying a performance or display of a work to a
subscriber who does not reside in that station's local market,
and is not subject to statutory licensing under section 119, is
actionable as an act of infringement under section 501 and is
fully subject to the remedies provided by sections 502 through
506 and 509, except that--
``(A) no damages shall be awarded for such act of
infringement if the satellite carrier took corrective
action by promptly withdrawing service from the
ineligible subscriber; and
``(B) any statutory damages shall not exceed $5 for
such subscriber for each month during which the
violation occurred.
``(2) Pattern of violations.--If a satellite carrier engages
in a willful or repeated pattern or practice of secondarily
transmitting to the public a primary transmission made by a
television broadcast station and embodying a performance or
display of a work to subscribers who do not reside in that
station's local market, and are not subject to statutory
licensing under section 119, then in addition to the remedies
under paragraph (1)--
``(A) if the pattern or practice has been carried out
on a substantially nationwide basis, the court shall
order a permanent injunction barring the secondary
transmission by the satellite carrier of the primary
transmissions of that television broadcast station (and
if such television broadcast station is a network
station, all other television broadcast stations
affiliated with such network), and the court may order
statutory damages not exceeding $250,000 for each 6-
month period during which the pattern or practice was
carried out; and
``(B) if the pattern or practice has been carried out
on a local or regional basis with respect to more than
one television broadcast station (and if such
television broadcast station is a network station, all
other television broadcast stations affiliated with
such network), the court shall order a permanent
injunction barring the secondary transmission in that
locality or region by the satellite carrier of the
primary transmissions of any television broadcast
station, and the court may order statutory damages not
exceeding $250,000 for each 6-month period during which
the pattern or practice was carried out.
``(g) Burden of Proof.--In any action brought under subsection (d),
(e), or (f), the satellite carrier shall have the burden of proving
that its secondary transmission of a primary transmission by a
television broadcast station is made only to subscribers located within
that station's local market.
``(h) Geographic Limitations on Secondary Transmissions.--The
statutory license created by this section shall apply to secondary
transmissions to locations in the United States, and any commonwealth,
territory, or possession of the United States.
``(i) Exclusivity With Respect to Secondary Transmissions of
Broadcast Stations by Satellite to Members of the Public.--No provision
of section 111 or any other law (other than this section and section
119) shall be construed to contain any authorization, exemption, or
license through which secondary transmissions by satellite carriers of
programming contained in a primary transmission made by a television
broadcast station may be made without obtaining the consent of the
copyright owner.
``(j) Definitions.--In this section--
``(1) The term `distributor' means an entity which contracts
to distribute secondary transmissions from a satellite carrier
and, either as a single channel or in a package with other
programming, provides the secondary transmission either
directly to individual subscribers or indirectly through other
program distribution entities.
``(2) The term `local market' for a television broadcast
station has the meaning given that term under rules,
regulations, and authorizations of the Federal Communications
Commission relating to carriage of television broadcast signals
by satellite carriers.
``(3) The terms `network station', `satellite carrier' and
`secondary transmission' have the meaning given such terms
under section 119(d).
``(4) The term `subscriber' means an entity that receives a
secondary transmission service by means of a secondary
transmission from a satellite and pays a fee for the service,
directly or indirectly, to the satellite carrier or to a
distributor.
``(5) The term `television broadcast station' means an over-
the-air, commercial or noncommercial television broadcast
station licensed by the Federal Communications Commission under
subpart E of part 73 of title 47, Code of Federal
Regulations.''.
(b) Technical and Conforming Amendments.--The table of sections for
chapter 1 of title 17, United States Code, is amended by adding after
the term relating to section 121 the following:
``122. Limitations on exclusive rights; secondary transmissions by
satellite carriers within local market.''.
SEC. 3. EXTENSION OF EFFECT OF AMENDMENTS TO SECTION 119 OF TITLE 117,
UNITED STATES CODE.
Section 4(a) of the Satellite Home Viewer Act of 1994 (17 U.S.C.
119 note; Public Law 103-369; 108 Stat. 3481) is amended by striking
``December 31, 1999'' and inserting ``December 31, 2004''.
SEC. 4. COMPUTATION OF ROYALTY FEES FOR SATELLITE CARRIERS.
Section 119(c) of title 17, United States Code, is amended by
adding at the end the following new paragraph:
``(4) Reduction.--
``(A) Superstation.--The rate of the royalty fee in
effect on January 1, 1998, payable in each case under
subsection (b)(1)(B)(i) shall be reduced by 30 percent.
``(B) Network.--The rate of the royalty fee in effect
on January 1, 1998, payable under subsection
(b)(1)(B)(ii) shall be reduced by 45 percent.
``(5) Public broadcasting service as agent.--For purposes of
section 802, with respect to royalty fees paid by satellite
carriers for retransmitting the Public Broadcasting Service
satellite feed, the Public Broadcasting Service shall be the
agent for all public television copyright claimants and all
Public Broadcasting Service member stations.''.
SEC. 5. DEFINITIONS.
Section 119(d) of title 47, United States Code, is amended by
striking paragraph (10) and inserting the following:
``(10) Unserved household.--The term `unserved household',
with respect to a particular television network, means a
household that cannot receive, through the use of a
conventional outdoorrooftop receiving antenna, an over-the-air
signal of grade B intensity (as defined by the Federal Communications
Commission of primary network station affiliated with that network.''.
SEC. 6. PUBLIC BROADCASTING SERVICE SATELLITE FEED.
(a) Secondary Transmissions.--Section 119(a)(1) of title 17, United
States Code, is amended--
(1) by striking the paragraph heading and inserting ``(1)
Superstations and pbs satellite feed.--'';
(2) by inserting ``or by the Public Broadcasting Service
satellite feed'' after ``superstation''; and
(3) by adding at the end the following: ``In the case of the
Public Broadcasting Service satellite feed, subsequent to
January 1, 2001, or the date on which local retransmissions of
broadcast signals are offered to the public, whichever is
earlier, the statutory license created by this section shall be
conditioned on the Public Broadcasting Service certifying to
the Copyright Office on an annual basis that its membership
supports the secondary transmission of the Public Broadcasting
Service satellite feed, and providing notice to the satellite
carrier of such certification.''.
(b) Definition.--Section 119(d) of title 17, United States Code, is
amended by adding at the end the following:
``(12) Public Broadcasting Service Satellite Feed.--The term
Public Broadcasting Service satellite feed' means the national
satellite feed distributed by the Public Broadcasting Service
consisting of educational and informational programming
intended for private home viewing, to which the Public
Broadcasting Service holds national terrestrial broadcast
rights.''.
SEC. 7. APPLICATION OF FEDERAL COMMUNICATIONS COMMISSION REGULATIONS.
Section 119(A) of title 17 United States Code, is amended
(1) in paragraph (1), by inserting ``is permissible under the
rules, regulations, and authorizations of the Federal
Communications Commission,'' after ``satellite carrier to the
public for private home viewing''; and
(2) in paragraph (2), by inserting ``is permissible under the
rules, regulations, and authorizations of the Federal
Communications Commission,'' after ``satellite carrier to the
public for private home viewing,''.
SEC. 8. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect on
January 1, 1999, except the amendments made by section 4 shall take
effect on July 1, 1999.
I. Purpose
The satellite compulsory license found at section 119 of
the Copyright Act is scheduled to expire on December 31, 1999.
This legislation is necessary to extend the expiration of that
license to enable satellite carriers to continue to retransmit
over-the-air television broadcast stations, to provide more
competition in the market for multichannel video delivery
services, to reduce the royalty fees payable under that license
to make them more competitive with cable television services,
which enjoy their own compulsory license, and to provide
satellite with a permanent, royalty-free compulsory license to
provide retransmissions of local television stations.
II. Legislative History
The Satellite Home Viewer Act (SHVA) was enacted in 1988
<SUP>1</SUP> to expand access to high quality and affordable
television programming for rural and other households that were
unserved by over-the-air or cable television and to provide a
clear cut statutory framework for the delivery of broadcast
programming to home satellite dish owners. It did so by
creating a 6-year statutory compulsory license, embodied in
section 119 of the Copyright Act, that provided satellite
carriers similar copyright status with cable operators by
enabling them, upon payment of a predetermined fee, to
retransmit broadcast signals to home satellite dish owners for
their private home viewing.
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\1\ Act of Nov. 16, 1988, Public Law No. 100-667, 102 Stat. 3935
(1988).
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The 1988 Act was designed as a transitional measure to
facilitate competition and the marketplace's ability to meet
the needs and demands of home satellite dish
owners.<SUP>2</SUP> In 1991, Senators DeConcini and Hatch, then
the Chairman and Ranking Member of the Subcommittee on Patents,
Copyrights, and Trademarks, asked the Register of Copyrights to
conduct a review of the Copyright Act's cable and satellite
compulsory licenses.<SUP>3</SUP> In his 1992 report responding
to that request, the Register concluded that the satellite
compulsory license had functioned well.<SUP>4</SUP> In its
first 2 years of the license's operation, the number of home
satellite dish owners nearly doubled, and satellite carriers'
deposits with the Copyright Office for distribution to
copyright owners exceeded $6 million. <SUP>5</SUP> Moreover,
according to the Register, the objectives of the satellite
license were being achieved without the administrative
difficulties of its sister cable compulsory
license.<SUP>6</SUP>
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\2\ See H.R. Rep. No. 887 (Part II), 100th Cong., 2d sess. 15
(1988), reprinted in 1988 U.S.C.C.A.N. 5638, 5644.
\3\ See Letter from the Honorable Dennis DeConcini, Chairman, and
the Honorable Orrin G. Hatch, Ranking Member, Judiciary Subcommittee on
Patents, Copyright and Trademarks, U.S. Senate, to Ralph Oman, Register
of Copyrights (Oct. 22, 1991) (available in Register of Copyrights,
``The Cable and Satellite Carrier Compulsory Licenses: An Overview and
Analysis'', 1 app. (1992) (letter of request)).
\4\ Register of Copyrights, ``The Cable and Satellite Carrier
Compulsory Licenses: An Overview and Analysis'', 157 (1992).
\5\ Id. at 111.
\6\ Id. at 157.
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In response to both the Copyright Office report and cable
television legislation then being considered in the Senate, the
Subcommittee on Patents, Copyrights, and Trademarks held 2 days
of oversight hearings on the cable compulsory license on April
6 and 29, 1992. Although the focus of the hearings was on the
cable license, a general consensus emerged that the satellite
license was functioning well, and several witnesses called for
its extension. Based upon the success of the satellite license,
its continued importance to rural and other consumers, the lack
of a marketplace solution to the uncertainties of full
copyright liability for satellite carriers, and the continued
availability of a permanent license for cable operators,
legislation to extend the satellite license for an additional 5
years was subsequently introduced in both the House and Senate
in the 104th Congress.<SUP>7</SUP> Similar legislation to
extend the satellite license for an additional 5 years was
enacted as the Satellite Home Viewer Act of 1994 on October 18,
1994.<SUP>8</SUP>
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\7\ See H.R. 1103, 104th Cong., 1st sess. (1993); S. 1485, 104th
Cong., 1st sess. (1993).
\8\ Public Law 103-369, 108 Stat. 3477 (1994).
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Since the enactment of the Satellite Home Viewer Act of
1994, the satellite home viewer market has continued to expand.
As technology has progressed and the satellite industry has
moved from a predominately need-based rural niche service to a
full service video delivery competitor in both rural and urban
markets, a number of difficulties have arisen. For example, the
inability of satellite providers to deliver local network
signals to many of their subscribers has created a significant
impediment to the satellite industry's ability to serve as a
full-fledged competitor to cable. Other difficulties, such as
the implementation of the 1994 Act's ``unserved household''
restriction based on the FCC's traditional Grade B signal rules
and related rules regarding satellite subscribers' eligibility
to receive distant network signals, in particular, have led to
a great deal of consumer confusion and even litigation. By
1996, it had become clear to Chairman Hatch, the Ranking
Member, Senator Leahy, and others, that a reform of the act, as
well as renewal would be necessary.
As a result, on February 6, 1997, Chairman Hatch requested
the Copyright Office to conduct a global review of the
Copyright Act's compulsory licensing provisions governing the
retransmission of over-the-air broadcast signals. Specifically,
the Copyright Office was asked to review whether the satellite
compulsory license should be extended, the difficulties
stemming from the implementation of the license and the distant
signal eligibility rules, the relationship and possible
harmonization of the cable and satellite licenses, and whether
those licenses should be extended to new technologies, such as
to allow the satellite retransmission of local signals,
Internet retransmission of broadcast signals, and
retransmission of broadcast signals by local telephone
companies. The Copyright Office was asked to respond with its
findings, policy options, and legislative recommendations by
May 1, 1997, which deadline was subsequently extended to August
1, 1997.
In May 1997, the Copyright Office conducted 3 days of
public hearings at which it heard testimony from
representatives of the motion picture, satellite, cable, and
broadcasting industries.<SUP>9</SUP> On August 1, 1997, the
Copyright Office submitted its findings and recommendations in
response to Chairman Hatch's request.<SUP>10</SUP> Among other
things, the Copyright Office recommended that the cable and
satellite compulsory licenses be retained, that the satellite
license be extended so long as the cable license remains in
effect, that differences between the two licenses be minimized
where possible to promote a competitive balance between the
satellite and cable industries, and that the satellite license
be amended to permit the satellite retransmission of local
network signals to local subscribers.<SUP>11</SUP> The
Copyright Office supplemented its report by submitting proposed
legislation to the Judiciary Committee in September 1997.
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\9\ See Notice of Public Meetings and Request for Comments, 62 Fed.
Reg. 13,396 (1997).
\10\ Register of Copyrights, ``A Review of the Copyright Licensing
Regimes Covering Retransmission of Broadcast Signals'' (1997).
\11\ Id. at 135-37.
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In a parallel proceeding beginning in March 1997, the
Librarian of Congress convened a Copyright Arbitration Royalty
Panel (CARP) pursuant to the 1994 Satellite Home Viewer Act to
adjust the copyright royalty rates that had been in effect
since 1992 for the satellite retransmission of network
broadcast and superstation signals.<SUP>12</SUP> The CARP
submitted its recommendations to the Copyright Office in August
1997, which included a significant increase in the per
subscriber per month royalty rates for satellite retransmission
of both network signals and superstations.<SUP>13</SUP> The
Librarian of Congress adopted the CARP recommendation on
October 28, 1997,<SUP>14</SUP> sparking a series of
unsuccessful efforts in Congress and in the courts to reverse
or delay implementation of the CARP determination.<SUP>15</SUP>
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\12\ See Initiation of Arbitration, 62 Fed. Reg. 9,212 (1997).
\13\ The CARP recommended an upward adjustment of copyright rates
for retransmissions of both network and superstation signals to a
uniform fee of 27 cents per subscriber, per month. Under the rates in
effect since the 1992 rate adjustment, satellite carriers paid
royalties equal to six cents per subscriber, per month for network
signals and a two-tiered 14/17.5 cents per subscriber, per month for
superstation signals.
\14\ See Final Rule and Order, 62 Fed. Reg. 55,742 (1997) (to be
codified at 37 C.F.R. pt. 258).
\15\ See Satellite Broadcasting & Comm. Ass'n. v. Librarian of
Congress, 1999 U.S. App. LEXIS 2411 (DC Cir. 1999) (denying petition
for review); S. 1422, 105th Cong., 1st sess., Sec. 5 (1997); H.R. 2921,
105th Cong., 1st sess., Sec. 3 (1997).
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On November 12, 1997, the Judiciary Committee conducted a
hearing to review the findings and recommendations of the
Copyright Office's report.<SUP>16</SUP> The Register of
Copyrights, Ms. Marybeth Peters, testified on behalf of the
Copyright Office. The Committee also heard testimony from Mr.
Fritz Attaway, senior vice president and Washington general
counsel of the Motion Picture Association of America, Mr.
William F. Sullivan, vice president of Cordillera
Communications, Inc., Mr. Charles C. Hewitt, president of the
Satellite Broadcasting and Communications Association of
America, and Mr. Decker Anstrom, president and chief executive
officer of the National Cable Television Association. At that
hearing, Chairman Hatch and the Ranking Member, Senator Leahy,
agreed to work together to resolve these matters.
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\16\ ``The Copyright Office Report on Compulsory Licensing of
Broadcast Signals: Hearings before the Senate Judiciary Committee,''
105th Cong., 1st sess. (1997).
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Discussions continued in the months that followed the
hearing, including discussions of the draft legislation
submitted by the Copyright Office. On March 5, 1998, Chairman
Hatch, joined by the Ranking Member, Senator Leahy, and the
Ranking Member of the Subcommittee on Antitrust, Business
Rights, and Competition, Senator Kohl, introduced S. 1720, the
``Copyright Compulsory License Improvement Act of 1998.''
<SUP>17</SUP> The bill sought to implement many of the
Copyright Office's recommendations, including putting satellite
carriers on a more equal footing with cable operators by
extending the satellite license without a sunset provision, by
allowing satellite carriers to deliver local network signals
within the local market at a zero copyright rate, by
eliminating the 90-day waiting period for cable subscribers to
become eligible to receive network programming by satellite,
and by creating substantial regulatory parity between the
satellite and cable industries. The bill also proposed reforms
to the CARP system to make rate determinations and
distributions more efficient and less expensive.
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\17\ S. 1720, 105th Cong., 2d sess. (1998). See 144 Cong. Rec.
S1449 (daily ed. Mar. 5, 1998) (introductory remarks of Senators Hatch,
Leahy, and Kohl).
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Following the introduction of S. 1720, Chairman Hatch and
the Chairman of the Senate Commerce Committee, Senator McCain,
engaged in a series of discussions facilitated by the Majority
Leader, Senator Lott, regarding issues of overlapping
jurisdiction. As a result of these discussions Chairman Hatch
and Chairman McCain, along with the Ranking Members, Senator
Leahy and Senator Hollings, agreed that the Committees would
work together on a comprehensive and cooperative reform
package, with the Judiciary Committee retaining jurisdiction
over copyright issues relating to the licensing of satellite
retransmissions of broadcast signals and the Commerce Committee
overseeing the revision of the related communications law
provisions. Shortly thereafter, on September 17, 1998, Chairman
McCain, together with Senators Hatch, Leahy, DeWine, and Kohl,
introduced S. 2494, the ``Multichannel Video Competition Act of
1998,'' which sought to address satellite-related
communications law issues as anticipated in the discussions
between the Judiciary and Commerce Committees.<SUP>18</SUP> S.
2494 was referred to the Commerce Committee, which held
hearings on the bill on October 1, 1998.
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\18\ S. 2494, 105th Cong., 2d sess. (1998). See 144 Cong. Rec.
S10524 (daily ed. Sept. 17, 1998) (introductory remarks of Senators
McCain and Kohl).
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On October 1, 1998, the Judiciary Committee met in
executive session to consider S. 1720. An amendment in the
nature of a substitute was offered by Chairman Hatch, together
with the Ranking Member, Senator Leahy, and Senators DeWine,
Kohl, and Durbin, to refine the underlying bill's copyright
provisions and delete the communications law related reforms,
which had become the focus of S. 2494 in the Commerce
Committee. The substitute amendment was adopted by unanimous
consent and the bill, as amended, was then ordered favorably
reported to the full Senate by unanimous consent. No further
action was taken on the bill, however, prior to the adjournment
of the 105th Congress on October 21, 1998.
In the 106th Congress, Chairman Hatch, joined again by the
Ranking Member, Senator Leahy, the Chairman of the Commerce
Committee, Senator McCain, the Chairman and Ranking Member of
the Judiciary Committee's Subcommittee on Antitrust, Business
Rights, and Competition, Senators DeWine and Kohl, and the
Majority Leader, Senator Lott, introduced S. 247, the
``Satellite Home Viewers Improvements Act'' on January 19,
1999.<SUP>19</SUP> Senators Jeffords, Cochran, Feinstein,
Feingold, and Collins were later added as additional cosponsors
of S. 247. As was the case with the bill reported by the
Judiciary Committee in the 105th Congress, S. 247 addresses the
copyright issues relating to the satellite retransmission of
broadcast signals, including granting satellite carriers a
permanent copyright license to deliver local network signals
within the local market at a zero copyright rate, extending the
current satellite distant signal license for 5 years,
eliminating the 90-day waiting period for cable subscribers to
become eligible to receive network programming by satellite,
cutting the copyright rate set by the 1997 CARP proceeding, and
providing for a national PBS satellite feed. The bill again
presumes a complementary communications law package to be
produced by the Commerce Committee, as agreed by Chairman Hatch
and Commerce Committee Chairman McCain. Chairman McCain
introduced his companion bill, the ``Satellite Television Act
of 1999,'' on January 25, 1999.<SUP>20</SUP>
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\19\ S. 247, 106th Cong., 1st sess. (1999). See 145 Cong. Rec. S698
(daily ed. Jan. 19, 1999) (introductory statement of Senators Hatch and
Leahy).
\20\ S. 303, 106th Cong., 1st sess. (1999). See 145 Cong. Rec. S976
(daily ed. Jan. 25, 1999) (introductory statement of Senator McCain).
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A hearing on S. 247 was held in the Judiciary Committee on
January 28, 1999. The Committee heard testimony from Bruce T.
Reese, president and chief executive officer of Bonneville
International Corporation in Salt Lake City, UT, Charles E.
Meinkey, owner of the Satellite TV Warehouse in St. George, UT,
Michael Peterson, executive director of the Utah Rural Electric
Association, and PeterMartin, general manager of WCAX-TV in
Burlington, VT. Each of the witnesses voiced their strong support for
the bill and encouraged the Committee to move quickly to enact the
reforms contained therein.
On February 25, 1999, the Judiciary Committee met in
executive session to consider the bill. The Committee
considered and accepted by unanimous consent a technical
amendment offered by Chairman Hatch, together with the Ranking
Member, Senator Leahy. The bill, as amended, was then ordered
favorably reported to the full Senate by unanimous consent.
III. Discussion
When Congress passed the Satellite Home Viewer Act in 1988,
few Americans were familiar with satellite television. Those
who were typically resided in rural areas of the country where
the only means of receiving television programming was through
use of a large, backyard C-band satellite dish. Congress
recognized the importance of providing these people with access
to broadcast programming, and created a compulsory copyright
license in the Satellite Home Viewer Act that enabled satellite
carriers to easily license the copyrights to the broadcast
programming that they retransmitted to their subscribers.
The 1988 act fostered a boom in the satellite television
industry. Coupled with the development of high-powered
satellite service, or DSS, which delivers programming to a
satellite dish as small as 18 inches in diameter, the satellite
industry now serves homes nationwide with a wide range of high
quality programming. Satellite is no longer a rural service,
for it offers an attractive alternative to other providers of
multichannel video programming; in particular, cable
television. Because satellite can provide direct competition
with the cable industry, it is in the interest of Congress to
ensure that satellite operates under a copyright framework that
permits it to be an effective competitor.
The compulsory copyright license created by the 1988 act
was limited to a 5-year period to enable Congress to consider
its effectiveness and renew it where necessary. The license was
renewed in 1994 for an additional 5 years, and amendments made
that were intended to increase the enforcement of the network
territorial restrictions of the compulsory license. Two-year
transitional provisions were created to enable local network
broadcasters to challenge satellite subscribers' receipt of
satellite network service where the local network broadcaster
had reason to believe that these subscribers received an
adequate off-the-air signal from the broadcaster. The
transitional provisions were minimally effective and caused
much consumer confusion and anger regarding receipt of
television network stations.
The satellite license is slated to expire at the end of
this year, requiring Congress to again consider the copyright
licensing regime for satellite retransmissions of over-the-air
television broadcast stations. In passing this legislation, the
Committee was guided by several principles. First, the
Committee believes that promotion of competition in the
marketplace for delivery of multichannel video programming is
an effective policy to reduce costs to consumers. To that end,
it is important that the satellite industry be afforded a
statutory scheme for licensing television broadcast programming
similar to that of the cable industry. At the same time, the
practical differences between the two industries must be
recognized and accounted for.
Second, the Committee reasserts the importance of
protecting and fostering the system of television networks as
they relate to the concept of localism. It is well recognized
that television broadcast stations provide valuable programming
tailored to local needs, such as news, weather, special
announcements and information related to local activities. To
that end, the Committee has structured the copyright licensing
regime for satellite to encourage and promote retransmissions
by satellite of local television broadcast stations to
subscribers who reside in the local markets of those stations.
Third, perhaps most importantly, the Committee is aware
that in creating compulsory licenses, it is acting in
derogation of the exclusive property rights granted by the
Copyright Act to copyright holders, and that it therefore needs
to act as narrowly as possible to minimize the effects of the
Government's intrusion on the broader market in which the
affected property rights and industries operate. In this
context, the broadcast television market has developed in such
a way that copyright licensing practices in this area take into
account the national network structure, which grants exclusive
territorial rights to programming in a local market to local
stations either directly or through affiliation agreements. The
licenses granted in this legislation attempt to hew as closely
to those arrangements as possible. For example, these
arrangements are mirrored in the section 122 ``local-to-local''
license, which grants satellite carriers the right to
retransmit local stations within the station's local market,
and does not require a separate copyright payment because the
works have already been licensed and paid for with respect to
viewers in those local markets. By contrast, allowing the
importation of distant or out-of-market network stations in
derogation of the local stations' exclusive right--bought and
paid for in market-negotiated arrangements--to show the works
in question undermines those market arrangements. Therefore,
the specific goal of the 119 license, which is to allow for a
life-line network television service to those homes beyond the
reach of their local television stations, must be met by only
allowing distant network service to those homes which cannot
receive the local network television stations. Hence, the
``unserved household'' limitation that has been in the license
since its inception. While the Committee is also mindful and
respectful of the communications policy of ``localism''
outlined above, primary emphasis falls necessarily on property
rights considerations in copyright law.
Finally, although the legislation promotes satellite
retransmissions of local stations, the Committee recognizes the
continued need to monitor the effects of distant signal
importation by satellite. To that end, the compulsory license
for retransmission of distant signals is extended for a period
of 5 years, to afford Congress the opportunity to evaluate the
effectiveness and continuing need for that license at the end
of the 5-year period.
IV. Vote of the Committee
The Senate Committee on the Judiciary, with a quorum
present, met on Thursday, February 26, 1999, at 10 a.m., to
consider the Satellite Home Viewers Improvements Act. The
Committee considered and accepted by unanimous consent an
amendment offered by the Chairman (for himself and Mr. Leahy)
to make technical corrections to the bill. The Committee then
ordered the Satellite Home Viewer Improvements Act reported
favorably to the Senate, as amended, by unanimous consent, with
a recommendation that the bill do pass.
V. Section-by-Section Analysis
Section 1.--Short title
The title of the bill is the ``Satellite Home Viewers
Improvements Act.''
Section 2.--Limitations on exclusive rights; secondary transmissions by
satellite carriers within local markets
Section 2 of the bill creates a new, permanent compulsory
license, found at section 122 of the Copyright Act of 1976, for
the retransmission of television broadcast stations by
satellite carriers to subscribers located within the local
markets of those stations.
Creation of a new compulsory license for retransmission of
local signals is necessary because the current section 119
license is limited to the retransmission of distant signals by
satellite. The section 122 license allows satellite carriers
for the first time to provide their subscribers with the TV
signals they want most: their local stations. A carrier may
retransmit the signal of a network station (or superstation) to
all subscribers who reside within the local market of that
station, without the burden of determining whether the
subscriber resides in an unserved household. The local market
for a television station will be determined by the Federal
Communications Commission, and it is anticipated the market
will correspond to the zone established by the Commission for
mandatory carriage by satellite of local signals.
Because the section 122 license is permanent, subscribers
may obtain their local networks and superstations without fear
that their broadcast service may be turned off at a future
date. In addition, satellite carriers may deliver local
stations to commercial establishments as well as homes, as the
cable industry does under its license. These amendments create
parity between the satellite and cable industries in the
provision of local television broadcast stations.
In order for a satellite carrier to be eligible for this
license, the carrier must be in full compliance with all
applicable rules and regulations of the Federal Communications
Commission, including any must-carry or programming exclusivity
requirements that the Commission may adopt by regulation or
law. Failure to fully comply with Commission rules with respect
to retransmission of one or more stations in the local market
precludes the carrier from making use of the section 122
license for all local retransmissions in that market. Thus, for
example, if a satellite carrier fails to carry a local station
as required by Commission rule or regulation, then the carrier
loses the section 122 license for the stations that it is
retransmitting in the local market of those stations.
Because the copyrighted programming contained on local
broadcast programming is already licensed with the expectation
that all viewers in the local market will be able to view the
programming, the section 122 license is a royalty-free license.
Satellite carriers must, however, provide local broadcasters
with lists of their subscribers receiving local stations so
that broadcasters may verify that satellite carriers are making
proper use of the license. The subscriber information supplied
to broadcasters is for verification purposes only, and may not
be used by broadcasters for other reasons.
Satellite carriers are liable for copyright infringement,
and subject to the full remedies of the Copyright Act, if they
violate one or more of the following requirements of the
section 122 license. First, satellite carriers may not in any
way willfully alter the programming contained on a local
broadcast station.
Second, satellite carriers may not use the section 122
license to retransmit a television broadcast station to a
subscriber located outside the local market of the station.
Retransmission of a station to a subscriber located outside the
station's local market is covered by section 119, provided that
all conditions of that license are satisfied. If a carrier
willfully or repeatedly violates this limitation on a
nationwide basis, then the carrier may be enjoined from
retransmitting that signal. If the broadcast station involved
is a network station, then the carrier could lose the right to
retransmit any network stations affiliated with that same
network. If the willful or repeated violation of the
restriction is performed on a local or regional basis, then the
right to retransmit the station (or, if a network station, then
all other stations affiliated with that network) can be
enjoined on a local or regional basis, depending upon the
circumstances. In addition to termination of service on a
nationwide or local or regional basis, statutory damages are
available up to $250,000 for each 6-month period during which
the pattern or practice of violations was carried out.
Satellite carriers have the burden of proving that they are not
improperly making use of the section 122 license to serve
subscribers outside the local markets of the television
broadcast stations they are providing.
The section 122 license is limited in geographic scope to
locations in the United States, including any commonwealth,
territory, or possession of the United States. In addition, the
bill makes it clear that local retransmissions of television
broadcast stations to subscribers for viewing is governed
solely by the section 122 license, and that no provision of the
section 111 cable compulsory license should be interpreted to
allow satellite carriers to make local retransmissions of
television broadcast stations under that license. Likewise, no
provision of the section 119 license (or any other law) should
be interpreted as authorizing local-into-local retransmissions
by satellite, since the section 119 license is limited to
retransmission by satellite of distant television broadcast
signals. As with all compulsory licenses, these explicit
limitations are consistent with the general rule that, because
compulsory licenses are in derogation of the exclusive rights
granted under the Copyright Act, they should be interpreted
narrowly.
The Committee acknowledges that authorization and
encouragement of local signals on satellite will result in a
proliferation of the number of television stations that will be
uplinked and available on satellites that serve the United
States. The Committee does not intend, however, that the
section 122 license be construed in such a way as to prevent
stations that are uplinked principally for delivery as local
signals under section 122 be prohibited from also being
delivered as distant signals under section 119, provided that
all the requirements of section 119 are met. If a satellite
carrier uplinks a station and delivers it to a subscriber
located in that station's local market, then the carrier may
make use of the section 122 license. The carrier may also
retransmit that same station to subscribers in distant markets
under the section 119 license, provided that all the
requirements of section 119 are met.
Section 3.--Extension of effect of amendments to section 119 of title
17, United States Code
The section 119 satellite compulsory license is extended
for a period of 5 years by changing the expiration date of the
legislation from December 31, 1999, to December 31, 2004. It is
understood that should the section 119 license be allowed to
expire in 2004, it shall do so at midnight on December 31,
2004, so that the license will cover the entire period of the
second accounting period of 2004.
The Committee also believes that the advent of digital
terrestrial broadcasting will necessitate additional review and
reform of the distant signal license. And responsibility to
oversee the development of the nascent local station satellite
service may also militate for review of the status of the
distant signal in the future. For all of these reasons, it
seems prudent for the Committee to establish a period for
review in 5 years.
Section 4.--Computation of royalty fees for satellite carriers
S. 247 reduces the royalty fees currently paid by satellite
carriers for the retransmission of network and superstations by
45 percent and 30 percent, respectively. These are reductions
of the 27-cent royaltyfees made effective by the Librarian of
Congress on January 1, 1998. The reductions take effect on July 1,
1999, which is the beginning of the second accounting period for 1999,
and apply to all accounting periods for the 5-year extension of the
section 119 license. The Committee has drafted this provision such
that, if the section 119 license is renewed after 2004, the 45-percent
and 30-percent reductions of the 27-cent fee will remain in effect,
unless altered by legislative amendment.
In addition, section 119(c) of title 17 is amended to
clarify that in royalty distribution proceedings conducted
under section 802 of the Copyright Act, the Public Broadcasting
Service may act as agent for all public television copyright
claimants and all Public Broadcasting Service member stations.
Section 5.--Definition
The ``unserved household'' definition of section 119 of
title 17 is amended to eliminate the 90-day waiting period for
satellite subscribers to wait after termination of their cable
service until they are eligible for satellite service of
network signals (provided that they do not receive over-the-air
network signals of Grade B intensity).
Section 6.--Public broadcasting service satellite feed
S. 247 extends the section 119 license to cover the
copyrighted programming carried on the Public Broadcasting
Service's national satellite feed. The national satellite feed
is treated as a superstation for compulsory license purposes,
thereby avoiding the unserved household restriction applicable
to network signals. Also, the bill requires that PBS must
certify to the Copyright Office on an annual basis that the PBS
membership continues to support retransmission of the national
satellite feed under the section 119 compulsory license.
Section 7.--Application of Federal Communications Commission
regulations
The section 119 license is amended to clarify that
satellite carriers must comply with all rules, regulations, and
authorizations of the Federal Communications Commission in
order to obtain the benefits of the section 119 license. This
would include any programming exclusivity provisions that the
Commission may adopt by law or regulation. Thus, for example,
if a satellite carrier retransmitted a network station to a
subscriber or subscribers in violation of FCC network
nonduplication rules, then the carrier could not claim that it
had a copyright compulsory license to make such
retransmissions.
Section 8.--Effective date
The amendments made by S. 247 become effective on January
1, 1999, with the exception of the provisions of section 4 of
the bill which become effective on July 1, 1999.
VI. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 8, 1999.
Hon. Orrin G. Hatch,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 247, the Satellite
Home Viewers Improvements Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Mark Hadley
(for federal costs), and Hester Grippando (for revenues).
Sincerely,
Dan L. Crippen, Director.
Enclosure.
S. 247--Satellite Home Viewers Improvements Act
Summary: Pursuant to the Satellite Home Viewer Act of 1988,
satellite carriers (companies that use satellite transmissions
to provide television signals directly to consumers) pay a
monthly royalty fee for each subscriber to the U.S. Copyright
Office for the right to retransmit network and superstation
signals by satellite to subscribers for private home viewing.
The Copyright Office later distributes these fees to those who
own copyrights on the material retransmitted by satellite.
S. 247 would allow satellilte carriers to retransmit the
signals of local television broadcast stations into the local
markets of those stations. The bill would eliminate a 90-day
waiting period for households that switch from cable to
satellite service. The bill also would extend the requirement
that satellite carriers pay royalty fees to the federal
government until December 31, 2004. Finally, the bill would
reduce the current fees charged to superstations by 30 percent,
to $0.19 per subscriber per channel per month, and the fees
paid by network stations by 45 percent to $0.15, beginning July
1, 1999.
CBO estimates that enacting S. 247 would result in a net
increase in revenues of $477 million over the 2000-2004 period
and of $76 million in fiscal year 2005. After review by an
arbitration panel, royalty fees are paid to copyright owners,
along with accrued interest earnings. With higher royalty
collections, the payments to copyright holders would also be
higher under S. 247, by an estimated $152 million over the
2000-2004 period, and by another $432 million over the
following five years. Because S. 247 would affect both revenues
and direct spending, it would be subject to pay-as-you-
procedures. Assuming appropriation of the necessary amounts,
CBO also estimates that issuing conforming regulations would
cost the Copyright Office about $500,000 in 2000.
The bill would impose no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA).
Estimated cost to the federal government: The estimated
budgetary impact of S. 247 is shown in the following table. For
purposes of this estimate, CBO assumes the bill will be enacted
before the end of fiscal year 1999. CBO also assumes that
payments from the federal government to copyright holders for
satellite transmissions would follow historical patterns. The
costs of this legislation fall within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2000 2001 2002 2003 2004
----------------------------------------------------------------------------------------------------------------
Receipts and spending under current law:
Estimated revenues \1\......................................... 185 118 112 107 101
Estimated budget authority \2\................................. 281 219 142 131 121
Estimated outlays.............................................. 207 259 264 220 182
Proposed changes:
Estimated revenues............................................. 17 92 107 122 139
Estimated budget authority..................................... 18 97 116 136 155
Estimated outlays.............................................. 0 4 19 35 94
Net increase or decrease (-) in surplus........................ 17 88 88 87 45
Receipts and spending under S. 247:
Estimated revenues \1\......................................... 202 210 219 229 240
Estimated budget authority \2\................................. 299 316 258 267 276
Estimated outlays.............................................. 207 263 283 255 276
----------------------------------------------------------------------------------------------------------------
\1\ Includes royalty fee collections from cable television stations, satellite carriers, and digital audio
devices.
\2\ Payments to copyright owners include interest earnings on securities held by the Copyright Office.
Note: In addition to the effects shown above, S. 247 would increase spending subject to appropriation by about
$500,000 in fiscal year 2000.
Basis of estimate: S. 247 would allow a satellite carrier
to make secondary transmissions of local television broadcasts,
eliminate the waiting period for switching from cable to
satellite service, reduce the rates of copyright royalty fees,
and extend those fees through 2004. All of these provisions
would affect payments by satellite carriers to the federal
government and payments by the federal government to copyright
holders. Assuming enactment of the bill before the end of
fiscal year 1999, CBO estimates that S. 247 would increase
revenues by $477 million and increase spending by $152 million
over the 2000-2004 period.
Secondary transmission.--Section 2 of S. 247 would allow
satellite carriers to retransmit the signals of local
television broadcast stations into the local markets of those
stations. Section 5 would eliminate a provision of current law
that requires households to wait 90 days between ending cable
service and beginning satellite service. These provisions would
make the services provided by satellite carriers more
attractive. As a result, CBO expects that the number of
subscribers to satellite services would increase more rapidly
than under current law. Based on information from the Copyright
Office, CBO estimates that under S. 247 the annual change in
the volume of satellite services would increase from a
projected rate of 10 percent a year to an average of about 15
percent a year. Because these provisions could increase the
incentives for choosing satellite service over cable service,
they might lead to a loss in revenues from cable fees. However,
based on information from the Copyright Office and the cable
and satellite industries, CBO estimates that any such reduction
in revenues would not be significant.
S. 247 would result in a small discretionary cost for the
Copyright Office to issue conforming regulations. CBO estimates
that the cost of issuing those regulations would be about
$500,000, subject to the availability of appropriated funds.
Reduction in the copyright royalty fee.--A rule issued on
October 28, 1997, by the Librarian of Congress, increased the
royalty fee to $0.27 per subscriber per month. S. 247 would
reduce the royalty fee on superstations by 30 percent to $0.19
per subscriber per channel per month and the rates on network
stations by 45 percent to $0.15, effective July 1, 1999. Based
on information from the Copyright Office, CBO estimates that
this provision would reduce revenues by $26 million in fiscal
year 2000, when the fees would expire under current law. But
this deduction would be more than offset by extending the
copyright royalty fees from January 1, 2000, to December 31,
2004.
Extension of copyright royalty fees.--Under current law,
the royalty fees for satellite carriers expire on December 31,
1999. S. 247 would extend royalty fees through December 31,
2004, increasing both revenue from satellite carriers and
payments to copyright holders (including interest) during the
2000-2004 period. In fiscal year 2000, the net change in
estimated revenues would be relatively small--$17 million--
because the additional revenue from extending the fees ($43
million) would be partially offset by a reduction in fee
payments due early in the year under current law. By 2004, CBO
expects additional revenues to total $139 million because of
the fee extension.
Payments to copyright holders.--S. 247 would result in
additional spending because all revenues are eventually paid to
copyright holders with interest. Historical spending patterns
indicate that copyright holders may receive the fees and
interest up to 10 years after the Copyright Office has
collected the revenues. Thus, CBO estimates a significant lag
between changes in revenues and the eventual changes in outlays
that stem from copyright fees.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays and governmental receipts that are subject
to pay-as-you-go procedures are shown in the following table.
For the purposes of enforcing pay-as-you-go procedures, only
the effects in the current year, the budget year, and the
succeeding four years are counted.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
----------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
Changes in outlays................. 0 0 4 19 35 94 108 108 117 75 24
Changes in receipts................ 0 17 92 107 122 139 76 0 0 0 0
----------------------------------------------------------------------------------------------------------------
Intergovernmental and private-sector impact: S. 247 would
impose no intergovernmental or private-sector mandates as
defined in UMRA. However, the bill would have two effects on
the future royalty fees paid by satellite carriers and later
distributed to copyright holders, which include some state and
local government entities. First, the bill would reduce the
rates that satellite carriers must pay to retransmit the
signals of local television broadcast stations. Second, the
bill would extend the fees (at the lower rate) from the end of
calendar year 1999 to the end of calendar year 2004. The
increase in payments to copyright holders would be $152 million
over the 2001-2004 period.
Estimate prepared by: Federal costs: Mark Hadley; Revenues:
Hester Grippando; Impact on State, local, and tribal
governments: Theresa Gullo; Impact on the private sector: Jean
Wooster.
Estimated approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.
VII. Regulatory Impact Statement
In compliance with paragraph 11(b)(1), rule XXVI of the
Standing Rules of the Senate, the Committee, after due
consideration, concludes that S. 247 will not have significant
regulatory impact.
VIII. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 247, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 17--COPYRIGHTS
* * * * * * *
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT
Sec.
101. Definitions.
* * * * * * *
122. Limitations on exclusive rights; secondary transmissions by
satellite carriers within local market.
* * * * * * *
Sec. 119. Limitations on exclusive rights: Secondary transmissions of
superstations and network stations for private home
viewing
(a) Secondary Transmissions by Satellite Carriers.--
[(1) Superstations.--] (1) Superstations and PBS
Satellite Feed._Subject to the provisions of paragraphs
(3), (4), and (6) of this subsection and section
114(d), secondary transmissions of a primary
transmission made by a superstation or by the Public
Broadcasting Service satellite feed and embodying a
performance or display of a work shall be subject to
statutory licensing under this section if the secondary
transmission is made by a satellite carrier to the
public for private home viewing, is permissible under
the rules, regulations, and authorizations of the
Federal Communications Commission, and the carrier
makes a direct or indirect charge for each
retransmission service to each household receiving the
secondary transmission or to a distributor that has
contracted with the carrier for direct or indirect
delivery of the secondary transmission to the public
for private home viewing. In the case of the Public
Broadcasting Service satellite feed, subsequent to
January 1, 2001, or the date on which local
retransmissions of broadcast signals are offered to the
public, whichever is earlier, the statutory license
created by this section shall be conditioned on the
Public Broadcasting Service certifying to the Copyright
Office on an annual basis that its membership supports
the secondary transmission of the Public Broadcasting
Service satellite feed, and providing notice to the
satellite carrier of such certification.
(2) Network Stations.--
(A) In general.--Subject to the provisions of
subparagraphs (B) and (C) of this paragraph and
paragraphs (3), (4), (5), and (6) of this
subsection and section 114(d), secondary
transmissions of programming contained in a
primary transmission made by a network station
and embodying a performance or display of a
work shall be subject to statutory licensing
under this section if the secondary
transmission is made by a satellite carrier to
the public for private home viewing, is
permissible under the rules, regulations, and
authorizations of the Federal Communications
Commission, and the carrier makes a direct or
indirect charge for such retransmission service
to each subscriber receiving the secondary
transmission.
* * * * * * *
(c) Adjustment of Royalty Fees.--
(1) Applicability and determination of royalty
fees.--The rate of the royalty fee payable under
subsection (b)(1)(B) shall be effective unless a
royalty fee is established under paragraph (2) or (3)
of this subsection.
* * * * * * *
(4) Reduction.--
(A) Superstation.--The rate of the royalty
fee in effect on January 1, 1998, payable in
each case under subsection (b)(1)(B)(i) shall
be reduced by 30 percent.
(b) Network.--The rate of the royalty fee in
effect on January 1, 1998, payable under
subsection (b)(1)(B)(ii) shall be reduced by 45
percent.
(5) Public broadcasting service as agent.--For
purposes of section 802, with respect to royalty fees
paid by satellite carriers for retransmitting the
Public Broadcasting Service satellite feed, the Public
Broadcasting Service shall be the agent for all public
television copyright claimants and all Public
Broadcasting Service member stations.
* * * * * * *
(d) Definitions.--As used in this section--
(1) Distributor.--The term ``distributor'' means an
entity which contracts to distribute secondary
transmissions from a satellite carrier and, either as a
single channel or in a package with other programming,
provides the secondary transmission either directly to
individual subscribers for private home viewing or
indirectly through other program distribution entities.
* * * * * * *
[(10) Unserved household.--The term ``unserved
household'', with respect to a particular television
network, means a household that--
[(A) cannot receive, through the use of a
conventional outdoor rooftop receiving antenna,
an over-the-air signal of grade B intensity (as
defined by the Federal Communications
Commission) of a primary network station
affiliated with that network, and
[(B) has not, within 90 days before the date
on which that household subscribes, either
initially or on renewal, to receive secondary
transmissions by a satellite carrier of a
network station affiliated with that network,
subscribed to a cable system that provides the
signal of a primary network station affiliated
with that network.]
(10) Unserved household.--The term ``unserved
household'', with respect to a particular television
network, means a household that cannot receive, through
the use of a conventional outdoor rooftop receiving
antenna, an over-the-air signal of grade B intensity
(as defined by the Federal Communications Commission)
of a primary network station affiliated with that
network.
* * * * * * *
(12) Public broadcasting service satellite feed.--The
term ``Public Broadcasting Service satellite feed''
means the national satellite feed distributed by the
Public Broadcasting Service consisting of educational
and informational programming intended for private home
viewing, to which the Public Broadcasting Service holds
national terrestrial broadcast rights.
* * * * * * *
HISTORICAL AND STATUTORY NOTES
termination of section
Section 4(a) of Pub. L. 103-369 provided that: ``Section
119 of title 17, United States Code [this section], as amended
by section 2 of this Act, ceases to be effective on [December
31, 1999] December 31, 2004.''
* * * * * * *
Sec. 122. Limitations on exclusive rights; secondary transmissions by
satellite carriers within local markets
(a) Secondary Transmissions of Television Broadcast
Stations by Satellite Carriers.--A secondary transmission of a
primary transmission of a television broadcast station into the
station's local market shall be subject to statutory licensing
under this section if--
(1) the secondary transmission is made by a satellite
carrier to the public;
(2) the secondary transmission is permissible under
the rules, regulations, or authorizations of the
Federal Communications Commission; and
(3) the satellite carrier makes a direct or indirect
charge for the secondary transmission to--
(A) each subscriber receiving the secondary
transmission; or
(B) a distributor that has contracted with
the satellite carrier for direct or indirect
delivery of the secondary transmission to the
public.
(b) Reporting Requirements.--
(1) Initial lists.--A satellite carrier that makes
secondary transmissions of a primary transmission made
by a network station under subsection (a) shall, within
90 days after commencing such secondary transmissions,
submit to that station a list identifying (by name and
street address, including county and zip code) all
subscribers to which the satellite carrier currently
makes secondary transmissions of that primary
transmission.
(2) Subsequent lists.--After the list is submitted
under subparagraph (1), the satellite carrier shall, on
the 15th of each month, submit to the station a list
identifying (by name and street address, including
county and zip code) any subscribers who have been
added or dropped as subscribers since the last
submission under this subsection.
(3) Use of subscriber information.--Subscriber
information submitted by a satellite carrier under this
subsection may be used only for the purposes of
monitoring compliance by the satellite carrier with
this section.
(4) Requirements of stations.--The submission
requirements of this subsection shall apply to a
satellite carrier only if the station to whom the
submissions are to be made places on file with the
Register of Copyrights a document identifying the name
and address of the person to whom such submissions are
to be made. The Register shall maintain for public
inspection a file of all such documents.
(c) Royalty Fee Required.--A satellite carrier whose
secondary transmissions are subject to statutory licensing
under subsection (a) shall have no royalty obligation for such
secondary transmissions.
(d) Noncompliance With Reporting Requirements.--
Notwithstanding subsection (a), the willful or repeated
secondary transmission to the public by a satellite carrier
into the local market of a television broadcast station of a
primary transmission made by that television broadcast station
and embodying a performance or display of a work is actionable
as an act of infringement under section 501, and is fully
subject to the remedies provided under sections 502 through 506
and 509, if the satellite carrier has not complied with the
reporting requirements of subsection (b).
(e) Willful Alterations.--Notwithstanding subsection (a),
the secondary transmission to the public by a satellite carrier
into the local market of a television broadcast station of a
primary transmission made by that television broadcast station
and embodying a performance or display of a work is actionable
as an act of infringement under section 501, and is fully
subject to the remedies provided by sections 502 through 506
and sections 509 and 510, if the content of the particular
program in which the performance or display is embodied, or any
commercial advertising or station announcement transmitted by
the primary transmitter during, or immediately before or after,
the transmission of such program, is in any way willfully
altered by the satellite carrier through changes, deletions or
additions, or is combined with programming from any other
broadcast signal.
(f) Violation of Territorial Restrictions on Statutory
License for Television Broadcast Stations.--
(1) Individual violations.--The willful or repeated
secondary transmission to the public by a satellite
carrier of a primary transmission made by a television
broadcast station and embodying a performance or
display of a work to a subscriber who does not reside
in that station's local market, and is not subject to
statutory licensing under section 119, is actionable as
an act of infringement under section 501 and is fully
subject to the remedies provided by sections 502
through 506 and 509, except that--
(A) no damages shall be awarded for such act
of infringement if the satellite carrier took
corrective action by promptly withdrawing
service from the ineligible subscriber; and
(B) any statutory damages shall not exceed $5
for such subscriber for each month during which
the violation occurred.
(2) Pattern of violations.--If a satellite carrier
engages in a willful or repeated pattern or practice of
secondarily transmitting to the public a primary
transmission made by a television broadcast station and
embodying a performance or display of a work to
subscribers who do not reside in that station's local
market, and are not subject to statutory licensing
under section 119, then in addition to the remedies
under paragraph (1)--
(A) if the pattern or practice has been
carried out on a substantially nationwide
basis, the court shall order a permanent
injunction barring the secondary transmission
by the satellite carrier of the primary
transmissions ofthat television broadcast
station (and if such television broadcast station is a network station,
all other television broadcast stations affiliated with such network),
and the court may order statutory damages not exceeding $250,000 for
each 6-month period during which the pattern or practice was carried
out; and
(B) if the pattern or practice has been
carried out on a local or regional basis with
respect to more than one television broadcast
station (and if such television broadcast
station is a network station, all other
television broadcast stations affiliated with
such network), the court shall order a
permanent injunction barring the secondary
transmission in that locality or region by the
satellite carrier of the primary transmissions
of any television broadcast station, and the
court may order statutory damages not exceeding
$250,000 for each 6-month period during which
the pattern or practice was carried out.
(g) Burden of Proof.--In any action brought under
subsection (d), (e), or (f), the satellite carrier shall have
the burden of proving that its secondary transmission of a
primary transmission but a television broadcast station is made
only to subscribers located within that station's local market.
(h) Geographic Limitations on Secondary Transmissions.--The
statutory license created by this section shall apply to
secondary transmissions to locations in the United States, and
any commonwealth, territory, or possession of the United
States.
(i) Exclusivity With Respect to Secondary Transmissions of
Broadcast Stations by Satellite to Members of the Public.--No
provision of section 111 or any other law (other than this
section and section 119) shall be construed to contain any
authorization, exemption, or license through which secondary
transmissions by satellite carriers of programming contained in
a primary transmission made by a television broadcast station
may be made without obtaining the consent of the copyright
owner.
(j) Definitions.--In this section--
(1) The term ``distributor'' means an entity which
contracts to distribute secondary transmissions from a
satellite carrier and, either as a single channel or in
a package with other programming, provides the
secondary transmission either directly to individual
subscribers or indirectly through other program
distribution entities.
(2) The term ``local market'' for a television
broadcast station has the meaning given that term under
rules, regulations, and authorizations of the Federal
Communications Commission relating to carriage of
television broadcast signals by satellite carriers.
(3) The terms ``network station'', ``satellite
carrier'', and ``secondary transmission'' have the
meaning given such terms under section 119(d).
(4) The term ``subscriber'' means an entity that
receives a secondary transmission service by means of a
secondary transmission from a satellite and pays a fee
for the service, directly or indirectly, to the
satellite carrier or to a distributor.
(5) The term ``television broadcast station'' means
an over-the-air, commercial or noncommercial television
broadcast station licensed by the Federal
Communications Commission under subpart E of part 73 of
title 47, Code of Federal Regulations.
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