Policy

NCTA, NAB: Change Not 'Compulsory’

2/28/2009 7:10 AM Eastern

The bright lines among TV providers — and some intersecting ones — continued to be drawn this week as Congress held a trio of hearings on changes to the law circumscribing cable and satellite-TV licenses to carry TV-station signals.

At a House Judiciary Committee hearing last Wednesday, National Cable & Telecommunications Association president Kyle McSlarrow and National Association of Broadcasters president David Rehr weighed in, joined by representatives from the direct-broadcast satellite, programmer and consumer sides.

The U.S. Copyright Office told Congress last year it was time to make changes to the regime that licenses cable and satellite multichannel video-programming distributors to carry broadcast-TV signals.

It suggested the possibility of a single, unitary license covering all MVPDs. Currently, cable’s license is based on gross receipts, while satellite providers pay a flat fee.

The Satellite Home Viewer Extension and Reauthorization Act, which gives satellite-TV providers a compulsory license to import distant over-air signals to unserved customers and, expires this year and Congress is weighing a reauthorization.

Congress is doing so with an eye toward dealing with the Copyright Office’s suggestions for reforming or harmonizing related permanent compulsory licenses for cable and satellite distant and local signals, as well.

McSlarrow said different compulsory licenses for cable and satellite make sense, with some small modifications. Copyright holders are fairly compensated, distributors are helped and consumers are well-served, he argued.

McSlarrow conceded that compulsory copyright license is “horrifyingly complex” and understood the natural reaction to want to “harmonize” it.

But if major reform is on the table, McSlarrow said, retransmission-consent reform (a strong concern of cable operators) should be factored into the equation, too.

Rehr also said the compulsory license has generally worked, saying he disagreed with the Copyright Office’s recommendation to harmonize regimes governing cable and satellite providers.

“They have different business models, different technologies and different evolutions,” Rehr said, adding, “we are unsure of all the unintended consequences, particularly in this difficult economic climate.”

Rehr agreed with the Copyright Office that the distant-signal license should be phased out for satellite carriers.

He suggested replacing it with an affirmative obligation to carry local signals in all 210 markets.

[At a Senate Judiciary Committee Hearing on the same subject — and at exactly the same time last Wednesday — Comcast executive vice president David Cohen and Jim Yager, head of the NAB TV board, made similar cases.]

DirecTV Group senior vice president Bob Gabrielli said at the House hearing that his company can already serve every local-market customer with a device that integrates the satellite channels with an over-the-air tuner.

If viewers still couldn’t get signals, he argued, it was because broadcasters weren’t delivering their signal to all the viewers in their markets.

Arguing for doing away with the compulsory distant-signal licenses altogether was register of copyrights Marybeth Peters. She said cable and satellite operators no longer need the protection and could negotiate independently, as is the case with Internet-delivered video content.

Motion Picture Association of America executive vice president Fritz Attaway said the current regime underpaid content creators, whose interests the committee should focus on. It isn’t the fiber or the headend that consumers want, but the high-value content, Attaway said.

McSlarrow begged to differ with the suggestion that the compulsory license underpaid programmers, saying a collective yearly payment of a quarter of $1 billion didn’t sound like undercompensation.

Also defending the compulsory license was a representative from Consumers Union, who said pay TV prices would skyrocket if content producers were allowed to have greater leverage over negotiations.

Rep. John Conyers (D-Mich.), the Judiciary Committee chairman, called the hearing a first salvo and said he expected the debate to continue into the spring.

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