Washington — The
U.S. Copyright Office has
launched its Notice of Inquiry
on phasing out the
compulsory licenses for
MVPDs to carry local
and distant broadcast TV-station signals. It is seeking
comment on a variety of possible marketplace mechanisms
to replace the blanket license.
If the license were phased out, cable operators
might have to hunt down copyright owners to negotiate
individual rights for the TV station programming
they retransmit via must-carry or retransmissionconsent
The report is one of the mandates from Congress’
long and tortured reauthorization of that license in
the Satellite Television Extension and Localism Act
(STELA), which passed last May.
To get the bill passed, a number of different legislators’
concerns were addressed, including the promise
that the Copyright Office would study the phase-out.
Comments will be due 45 days after the notice is
published in the Federal Register, which usually happens
within a week. Reply comments will be due 30
days after that.
Satellite and cable operators can deliver TV-station
signals via their respective statutory licenses that require
a royalty payment but that “operate in place of
transactions that would otherwise be left to the open
marketplace,” the Copyright Office pointed out in the
notice. The alternative would be individual negotiations.
Cable operators pay a biannual royalty based on
gross receipts, while satellite operators pay based on
a per-subscriber, per-month formula. That payment
is collected by the Copyright Office and disbursed to
copyright owners (in contrast to the FCC’s retransmission-
consent regime, under which cable operators
negotiate payments to broadcasters for carriage
of their signals).
The Copyright Office plans to offer several options
to the compulsory license: sublicensing, private licensing
and collective licensing. Under sublicensing,
broadcasters, as part of their negotiation to carry
programming from a network or syndicator, would
receive permission to sublicense all of their programming
to cable or satellite. The Copyright Office suggested
that as a possibility in a 1997 report, but did not
make any recommendation, though it has said it was
a “possible and reasonable” alternative.
The National Association of Broadcasters has opposed
the idea of TV stations becoming the clearinghouse
for distant-signal carriage rights. Private
licensing would require cable operators to negotiate
individually with each copyright owner, which
would include TV stations for local news and other
local content. The Copyright Office recognizes that
finding all those copyright owners would be tough.
There is also the issue of hold-ups, in which the last
copyright owner in a negotiation has more leverage.
Under a collective licensing regime, copyright
owners would empower a third party to negotiate for
them collectively, in effect creating an ASCAP or BMI
for video rather than audio.
The report, due by year-end, also seeks input on possible
licensing models for VOD and online video.