Washington—Cable operators might have to pay more in copyright royalties to import out-of-market TV signals under a proposal released Monday by the U.S. Copyright Office.
Cable systems in general do not pay copyright royalties to provide local TV signals to customers located within the same market. But they do pay royalties for distributing TV signals brought in from distant markets.
Last year, cable paid $144 million in such royalties, which are deposited with the Copyright Office semi-annually and distributed mostly to Hollywood studios and sports leagues.
The Copyright Office would require cable to pay more in cases where the distant TV station is beaming not just a single digital programming service but also multiple services. Digital technology allows local TV stations to segment their spectrum to provide multicast services.
The Copyright Office tentatively rejected the National Cable & Telecommunications Association's argument that copyright loyalties should be assessed on per-station basis. Instead, the Copyright Office, a division of the Library of Congress, is supporting a royalty scheme on a per-program stream basis, provided the streams are not duplicative in terms of the content shown.
"We propose that a cable operator must pay royalties on each retransmitted distant digital multicast stream carrying different programming from the channel lineup on other streams," the Copyright Office said in a notice published in the Federal Register.
For now, how much cable's copyright royalties could rise is speculative because cable systems wouldn't be required to carry the multicast signals. Higher royalty payments would flow from a cable operator's decision to carry stations' multicast services.
The NCTA issued a statement Tuesday, saying "we disagree with many of the proposals and will be filing comment to outline our concerns."
Cable systems located on the outskirts of a single local TV market and systems with customers in multiple markets tend to rely on distant signals.
Cable operators have a compulsory license to import distant TV signals under section 111 under the Copyright Act of 1976. Satellite TV providers have a similar license under section 119, while section 122 authorizes satellite TV carriers to distribute local TV signals within their local markets.
By June 30, The Copyright Office is expected to release a comprehensive report to Congress on whether the compulsory licenses need to be overhauled.
The licenses do not establish parity between cable and satellite TV providers.
Cable operators need to obtain retransmission consent to import distant TV stations under the section 111 license, but DirectTV and Dish Network do not need retransmission consent under the section 119 license, which permits the distribution of ABC, NBC, CBS and Fox programming to satellite homes that are too far away to view their local stations with a conventional rooftop antenna.