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Copyright Office Seeks Comment on Issues Relating to the Operation of, and Continued Necessity for, the Cable and Satellite Compulsory Licenses

April 20, 2007

The Copyright Office has issued a Notice of Inquiry (“NOI”) as part of its examination of a wide variety of issues regarding the operation of, and continued necessity for, the cable and satellite compulsory licenses, as well as the appropriateness of compulsory licensing for other video platforms.  Under the current scheme, compulsory licensing for the retransmission and public performance of broadcast television (and radio in the case of cable) is currently available to cable under Section 111, and to satellite under Sections 119 and 122, of the Copyright Act.  Required by the Satellite Home Viewer Extension and Reauthorization Act of 2004, the Copyright Office’s examination will result in a report to Congress by June 30, 2008, recommending any legislative changes. 

  The Report must address, at a minimum, the following: (1) a comparison of the royalties paid under the compulsory licenses and the prices paid in the marketplace for comparable programming; (2) an analysis of the differences among the Sections 111, 119 and 122 licenses, whether such differences are justified and whether either industry is placed at a competitive disadvantage due to the operation of the respective licenses; (3) whether retention of the compulsory licenses remains justified; (4) an analysis of the correlation, if any, between royalties paid for the compulsory license and the fees charged subscribers; and (5) an analysis of issues that may arise with respect to the application of the licenses to digital signals.
 The NOI touches on a number of timely issues.  For example, the NOI makes clear that the Copyright Office intends to investigate the relationship between programming costs and copyright, looking at both broadcast television (i.e., rates and terms/conditions under retransmission consent agreements) and basic cable network programming.  The NOI also seeks comment on what, if any, modifications should be made to the Section 111 license, including conversion to a flat fee royalty system, elimination of reliance on the now-defunct FCC broadcast signal carriage rules, and subjecting the Section 111 license to periodic renewal.  In addition, the NOI inquires whether a uniform license that applies to both cable and satellite should be adopted instead.  The NOI further asks whether compulsory licensing (either through extension of existing licensing schemes or creation of a new statutory license) is appropriate for the delivery of broadcast programming over the Internet or through any video delivery system that uses Internet Protocol, or over wireless networks and to mobile reception devices, or should licensing of discrete broadcast programming be allowed to evolve in the marketplace. 

Comments are due July 2, 2007, and reply comments are due September 13, 2007.   The Copyright Office also plans to hold hearings later this year to further supplement the record.

We would be pleased to respond to any questions regarding this matter.

 

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