House Panel OKs Copyright-Fee Freeze

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Washington -- A bill freezing copyright fees paid by
satellite carriers surged forward last week, but political infighting in the House of
Representatives and the Senate could doom the measure for the year.

Meanwhile, Motion Picture Association of America president
Jack Valenti, who represents the companies with the most to lose under the bill, told
reporters that he had not made up his mind whether he would attempt to kill the measure.

In a unanimous voice vote, the House Commerce Committee
agreed to stay until late 1999 an increase in copyright fees on satellite distributors of
superstations and distant-network signals.

The current rate is 27 cents per month, per signal for each
network and superstation. The fee is estimated to cost the typical direct-broadcast
satellite subscriber an additional $20 per year. The old rates, which the bill would keep
in place, were 6 cents for networks and either 14.5 cents or 17 cents for superstations.

Lawmakers stepped in after the satellite industry argued
that the jump to 27 cents was too steep -- especially when large cable operators pay 2.45
cents for networks and 9.8 cents for superstations.

The bill, sponsored by Rep. Billy Tauzin (R-La.), would be
retroactive to Jan. 1, 1998, and it would not expire until one year after the date of
enactment -- a period that would likely extend the stay into the third quarter of 1999 if
the bill (H.R. 2921) passed this year.

That expiration date would roughly coincide with the
expiration of the Satellite Home Viewer Act, which contains DBS companies' compulsory
license to retransmit superstations and distant-network signals to eligible home-dish
owners. Failure to pass Tauzin's bill this year would likely mean that it would be
debated next year, as reauthorization of the SHVA picked up steam.

Because DBS carriers have been collecting the 27-cent
monthly rate, Tauzin said he would work on language to ensure that DBS subscribers would
receive refunds if his bill became law. A DirecTv Inc. source said the company has already
pledged to credit its customers.

The bill, which was opposed by major copyright interests,
has a decidedly uncertain future.

Under House rules, the Judiciary Committee is entitled to
take control of the bill after the Commerce Committee files a report. House sources said
Judiciary's review could last up to 60 days, but a dispute over the duration would
ultimately have to be resolved by House Speaker Newt Gingrich (R-Ga.).

Judiciary is considered hostile terrain for Tauzin's
bill. Similar legislation (H.R. 3210) has languished since March, when an amendment
nullifying the 27-cent rate for one year passed over the objections of Rep. Howard Coble
(R-N.C.), chairman of the Judiciary Subcommittee on Courts and Intellectual Property.

Coble said last week that he still opposed the amendment
that banished the 27-cent rate. He shrugged when asked what would happen to Tauzin's
bill when it reached Judiciary.

House Commerce Committee chairman Rep. Tom Bliley (R-Va.)
wouldn't predict that he can reach a compromise with House Judiciary Committee
chairman Rep. Henry Hyde (R-Ill.).

"I hope that we can get that out. I haven't had
any discussions yet," Bliley said.

The outlook is equally uncertain in the Senate due to
several policy disputes between Senate Commerce Committee chairman John McCain (R-Ariz.)
and Senate Judiciary Committee chairman Orrin Hatch (R-Utah.).

McCain and Hatch have disagreed over tobacco legislation,
Baby Bell entry into long distance and the Justice Department's antitrust prosecution
of Microsoft Corp.

The question now is whether McCain can take to the Senate
floor his bill (S. 1422) -- which would bar the collection of the 27-cent rate from Jan.
1, 1998, to Jan. 1, 1999 -- without interference from Hatch.

"I haven't been in a Congress where that
hadn't been a problem," Tauzin said. "Senators have all of these
prerogatives, and they take a lot of things personally and do things like that."

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