ACA: Copyright Office Audit Cost-Shifting Would Be Unfair

The American Cable Association has told the Copyright Office
that cable operators should not have to pay for audits of alleged underpayment
of copyright license fees until all legal options to challenge that audit have
been exhausted.

In comments filed with the Copyright Office Wednesday, ACA
said it agreed with AT&T that "an audit process that requires a
statutory licensee to pay for an audit's costs after the auditor issues its
written report, but before a final determination is made, would...effectively
shift the enforcement obligation from the copyright owners to the statutory

ACA says that would be an undue burden, particularly for its
smaller cable operators members.

The Copyright Office proposed that if a sufficiently large
underpayment was identified in the order, the costs would be borne by the
distributor, and only shift back if a court rejects that finding.

"It is burdensome and unfair to put these operators,
who may wish to exercise their right to dispute the auditor's written report,
in the position of having to pay first and later expend additional resources to
get the copyright owners to return the money that copyright owners are
responsible to pay under the audit cost-shifting rules," ACA said.

In 2012, the office proposed authorizing those audits as
part of its ongoing implementation of the Satellite Television Extension and
Localism Act, which created the blanket license. STELA required the Copyright
Office to create regs allowing for the verification of cable account statements
(SOAs) of their copyright payments via an independent auditor.

According to NCTA, the cable industry files 3,800 of those
every six months, with some MSOs filing hundreds.

In a filing last year, NCTA pointed out that
STELA had directed the Office to "minimize the burden and cost" of
the audits. NCTA agrees that the Copyright Office's proposed cost-shifting to
cable operators is unfair.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.