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Breaking News
Copyright Office Commences Inquiry on Copyright Issues Related to the Retransmission of Digital Broadcast Signals
September 22, 2006
Comments Due: November 6, 2006
Reply Comments Due: December 4, 2006
The Copyright Office has issued a Notice of Inquiry ("NOI") seeking public comment on various copyright issues related to the retransmission of digital broadcast signals by cable operators under the Copyright Act. The Copyright Office issued the NOI in response to a petition by the Motion Picture Association of America, Inc. and major sports leagues ("Petitioners"). The Petitioners request a review of a range of cable compulsory licensing rules and their application to the retransmission of digital signals. As a result of the inquiry, the Copyright Office may decide to propose changes to the rules governing the reporting of and payment for the retransmission of digital signals.
Background
When Congress enacted the cable compulsory license in 1976, broadcast stations were only capable of transmitting analog signals. Since then, broadcast stations have gained the ability to transmit signals in either a digital or analog format or simultaneously in both and many (if not most) cable operators have begun carrying digital broadcast signals. According to Petitioners, it is the increasing movement towards carriage of digital signals, often in conjunction with carriage of a station's analog signal, that has prompted their request for review of the reporting practices for compulsory license fees.
Issues Raised by NOI
• Applicability of the Compulsory License to Digital Signal Retransmissions
One significant aspect of the Copyright Office's NOI is that it concludes, with only minimal discussion, that the cable compulsory license applies to the retransmission of digital signals. While cable operators have assumed this to be the case, the Office had not previously expressed an opinion on the issue.
• Identifying Digital Signals on an Operator's Statement of Account
Cable operators report cable compulsory license fees on a semi-annual basis on Statements of Account ("SOAs") filed with the Copyright Office. These SOAs provide formulas for calculating compulsory license fees based on specific characteristics of the cable system.
The Copyright Office's rules require cable operators to list on their SOAs all of the broadcast signals that they carry and to indicate whether such signals are local or distant; network or independent; permitted or non-permitted, etc. Now that cable operators are carrying digital signals in addition to and, in some circumstances in place of, analog signals, the Copyright Office is requesting comments on how the transmission of the digital signal affects: (1) a determination of the television market or distant status of a digital signal; (2) the characterization of a digital signal as permitted or nonpermitted; (3) the determination of a digital signal's permitted basis; and (4) whether the signal should be treated as network or independent.
The Petitioners also requested that the Copyright Office review the manner in which cable operators report their carriage of broadcast stations when the operator is simultaneously retransmitting the station's analog and digital signals or a station's digital "multicasts." The Office in particular seeks comment on the Petitioners' contention that all such signals must be separately reported and accounted for in the royalty calculation. For example, the Nor asks whether the dual carriage of a station's analog and distant signals should be reported differently depending on whether the station is simulcasting the same content in analog and digital. The Copyright Office also seeks comment on whether and how an operator should report carriage of a digital signal that is downconverted to an analog signal at the cable operators' headend; datacast streams (i.e. program-related material); and digital audio broadcast signals.
• Reporting Gross Receipts for Digital Tiers and Equipment
Current Copyright Office regulations require a cable operator to report the gross receipts for any tier of service that must be purchased in order to access the tier that contains the broadcast signals. Petitioners claim that some cable operators carry digital broadcast signals on a digital service tier which consumers can access only by purchasing other tiers of service or by paying a "gateway" fee. The Petitioners, therefore, request that the Copyright Office require cable operators to include revenues from all levels of service that consumers are required to purchase in order to access digital broadcast channels and to update the SOA to require operators to report digital and HDTV tiers. The Copyright Office requests comment on the Petitioners' proposals as well as on issues relating to the reporting of fees charged for digital set top converters, CableCards, and digital second outlet charges.
The Copyright Office has established a comment deadline of November 6, 2006 and reply comment deadline of December 4, 2006. We would be happy to answer any questions you may have about this matter.