August 11, 1997
Contact:
Craig D'Ooge (202) 707-9189
Copyright Office Issues Report on the Cable and Satellite Compulsory Licenses
Register of Copyrights Marybeth Peters acknowledges a
continued need for the compulsory licensing scheme governing
the retransmission of broadcast signals, at least for the
immediate future, in a report delivered to Congress on
August 1, 1997.
A compulsory license is a statutory copyright licensing
scheme whereby copyright owners are required to license
their works to users at a fixed price under terms and
conditions set by the government. The cable and satellite
compulsory licenses allow cable systems and satellite
carriers to retransmit broadcast signals to their
subscribers without incurring the costs associated with the
negotiations to clear the rights to retransmit the
copyrighted programming carried on the signals.
The Copyright Office submitted its report in response
to a February 6, 1997, letter from Senator Orrin Hatch,
chairman of the Senate Judiciary Committee, who requested a
thorough review of the copyright licensing regimes governing
the retransmission of over-the-air radio and television
broadcast signals. The request targeted key issues for
study, starting with whether the licensing scheme should
continue to exist, or in the case of the satellite
compulsory license created by the Satellite Home Viewer Acts
of 1988 and 1994, whether it should be extended beyond its
December 31, 1999, sunset date. In addition, the Copyright
Office considered the possible extension of the current
cable compulsory license to new technologies, such as open
video systems and the Internet, the advisability of allowing
satellite carriers to retransmit local signals, and the
creation of new markets for public television.
Although the Copyright Office recommends the
continuation of a compulsory licensing scheme, this
recommendation rests upon a determination that the rate
structure for the cable compulsory license needs adjustment.
Specifically, the Office recommends that the current complex
mechanism for determining a cable system's royalty payment,
which is tied to certain 1976 FCC rules no longer in
existence, be replaced with a flat per subscriber, per
signal fee based on fair market value. The Office makes
this recommendation because it would more closely align the
rates paid by the cable systems with those paid by the
satellite carriers and it would simplify the filing process
for the filer and the Copyright Office.
The study also proposes a new approach to the problems
encountered by subscribers to a satellite service who sign
up thinking that they will receive the network signals from
the satellite carrier, when in fact they are not eligible to
receive these signals under the current law because they
purportedly can receive the local network affiliate over-
the-air. To ameliorate this problem, the Office recommends
that satellite carriers, and their distributors, inform a
potential subscriber as to whether he or she is eligible to
receive the network signals. Those who live in a certain
geographical area would be eligible to receive the signal
(the green zone), and those who live outside the area would
not (the red zone). This approach would replace the current
reliance on the Grade B signal intensity test, which
purportedly is too expensive to administer. The Office also
supports a temporary surcharge to subscribers located in a
"red zone," who nonetheless wish to receive the network
service.
The Office also carefully considered the emerging
technologies in the field of telecommunication and their
place, if any, in the compulsory licensing scheme.
Satellite carriers had reported that the industry was
capable of retransmitting local broadcast signals within a
defined geographic area and had requested a clarification of
the satellite compulsory license so that it would be clear
that such retransmissions fall within the scope of the
license; a suggestion that the Office endorses in its
report. The Office, however, did not accept the arguments
put forth by the Internet service providers and rejected
their request to extend the cable compulsory license to
their operations or recommend a new compulsory license for
their industry.
As part of the study, the Copyright Office convened
three days of public meetings to listen to the concerns of
the industries and the copyright owners. Twenty-four
witnesses, representing the motion picture industry, cable
television, the broadcasting industry, local television,
sports associations, Internet audio services, performing
rights societies, satellite carriers, small-business
interests, and the telephone industry, presented testimony
to the Register of Copyrights and her staff. The Office
also solicited written comments and reply comments from all
interested parties. Forty-three parties filed comments in
response to a Notice of Inquiry from the Office, and 35
parties filed reply comments. The commenters' views and
suggestions are discussed at length in the final report.
Copies of the executive summary are available from the
Office of the Copyright General Counsel, Library of
Congress, James Madison Building, Room 403, 101 Independence
Avenue S.E., Washington, DC 20540; and copies of the full
report are posted on the Internet site for the Library of
Congress at http://www.loc.gov/copyright/ under the heading "What's
New."
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PR 97-129
8/11/97
ISSN 0731-3527