Policy

NCTA, Comcast To Argue Against Major Compulsory License Revamp

2/24/2009 6:01 PM Eastern

National Cable & Telecommunications Association President Kyle McSlarrow wants Congress to tweak cable's compulsory license, but doesn't want legislators to rewrite what he calls a "great public policy success story."
That from McSlarrow's prepared testimony Wednesday slated for the House Judiciary Committee hearing on "Competition, Compensation and the Need to Update the Cable and Satellite TV Licenses " -- not to be confused with a Senate Judiciary Committee hearing on a similar subject Wednesday, or the House Communications, Technology & Internet Subcommittee hearing that was held Tuesday
No matter which chamber, the House and Senate hearings will get the same message about no major changes to cable's compulsory license. The Senate case will be made by David Cohen, executive vice president of NCTA member Comcast, the nation's largest cable operator, also according to prepared testimony.
McSlarrow will tell the House panel that Congress should undertake some pro-consumer (and pro-cable) reforms of how the Copyright Office implements the compulsory license statute, rather than tackle a wholesale revamp of the regime. But if it does want to make wholesale changes, it needs to take into account the the retransmission-consent regime that McSlarrow says "is at odds with the intent of the compulsory license regime,: which is to facilitate the availability of broadcast signals to consumers."
Cohen will read out of the same playbook, literally. Both he and McSlarrow planned to tell their respective legislative audiences that the compulsory license is still necessary; that no major changes are needed; that the license should be tweaked to prevent payment for so-called phantom signals; and that the retrans regime is problematic and needs to be addressed.
The Copyright Office suggested in a report to Congress last year that the compulsory license could be repealed and that a new marketplace method of payment would evolve. Both McSlarrow and Cohen, usually marketplace fans, argue that, as cohen put it, "this is one of those circumstances where a workable system that meets the needs of consumers, copyright owners, and cable operators - and which has stood the test of time -- is best allowed to keep working."

McSlarrow will point out that license has resulted in payments over the last 30 years of almost $4 billion in royalties, and says that replacing it with a flat fee model similar to that of DBS operator's compoulsory license would create "unnecessary confusion and uncertainty."

DBS operators argued the opposite at the Tuesday House hearing, saying a unitary license applicable to all pay video providers, as the Copyright Office suggested, made sense.

"The Office's "repeal it and hope for the best" approach poses too great a risk to your constituents' established viewing patterns and to existing marketplace relationships to leave the matter to chance," McSlarrow planned to tell his audience.

Satellite operators are all for "harmonizing" the cable and DBS licenses, but Cohen suggested the result would instead be discord. "Any effort to harmonize the licenses will tie both industries in knots, with no net consumer benefit," he said. "We strongly recommend against any such plan."

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