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Copyright Office: Distant-Signal Licenses Need End Date

Washington — The U.S. Copyright Office has recommended
phasing out the distant-signal compulsory
license, and exploring phasing out the compulsory
license for local signals as well. That would require
cable and satellite operators to negotiate individually
with copyright owners or TV stations for carriage of programming
they deliver to their customers.

The recommendation came in a report released Aug. 29
and mandated by Congress in its May 2010 passage of the
Satellite Television Extension and Localism Act, which
extended the distant-signal license for another five years.


It was not a big surprise, as the office recommended phasing
out the distant-signal license in its 2008 report related to the
licenses’ previous extension by Congress in 2004. At that time,
the office concluded that “the current distant-signal licenses
have served their purpose, but are no longer necessary.”

The blanket license allows cable and satellite operators
to pay into a pool to compensate copyright holders for
distant and local TV-station programming, rather than
negotiating for those rights individually.

As part of a contentious STELA renewal process, and
to assuage opponents of the compulsory license regime,
the legislation charged the Copyright Office with coming
up with suggestions on phasing out the blanket license.

Calling it a “construct of an earlier era,” the Copyright
Office report concluded that Congress should provide a
“date-specific trigger” for the end of the distant signal license,
but hold off on phasing out the local signal license
“to a later time.”

The phase-out is only a recommendation, but one the
cable industry opposed in its comments on the report.
Cable operators, not looking to have to conduct individual
negotiations for programs, suggested the license was
hardly an anachronism, but instead a balance of the competing
interests of operators and programmers.

The National Cable & Telecommunications Association,
in comments last April, insisted that “the compulsory
copyright license, for its part, still works as Congress
intended. Indeed, some 35 years after its enactment, Section
111 remains far superior to any of the proposed alternatives
as a means for cable operators of varying sizes
and circumstances to obtain the myriad copyright clearances
needed to retransmit broadcast stations to more
than 60 million cable-subscribing households.”

The NCTA had also said that if the Copyright Office
makes changes, it should take into account other related
rules, like must-carry and retransmission consent — a
stance opposed by broadcasters, who have said that is the
purview of the Federal Communications Commission.

The Copyright Office added plenty of caveats. While
it offered up three options to the blanket license: sublicensing,
direct licensing and collective licensing, it said
those are not the only options, or mutually exclusive and
that the marketplace should help decide how payments
will evolve.


The American Cable Association, representing smaller,
independent cable operators, said it was “troubled that
the Copyright Office would target the ‘distant’ TV license
for elimination in its new report. As ACA and others have
made clear, abolishing this license would harm consumers,
particularly those who reside in rural areas and value
receipt of out-of-market TV signals.”

The National Association of Broadcasters said it backed
the date-certain elimination of distant-signal compulsory
licenses. It favors retention of local-signal compulsory
licenses, but acknowledged “the Office’s sensitivity to
the importance of these licenses for local viewers as expressed
in the Office’s recommendation to defer consideration
of elimination of those licenses.”