Eliminating the retransmission-consent exemption currently enjoyed by direct-broadcast satellite providers could harm consumers because DBS companies would likely drop distant signals, EchoStar Communications Corp. argued in a Sept. 1 to the federal Copyright Office.
The Copyright Office was charged by Congress, under the Satellite Home Viewer Extension and Reauthorization Act of 2004, to study whether content licensing policies in the act treats copyright holders fairly.
EchoStar argues that current policies actually help copyright holders, because DBS payments on statutory licenses for delivery of distant signals helps copyright holders lower the cost of distributing those signals. The company added that copyright holders also get greater ad revenue from broader distribution of broadcast signals.
Without the statutory license, there is a “significant risk” that DBS wouldn't carry distant signals at all, due to the high cost of having to seek out and compensate each of the copyright holders in an individual broadcast program, EchoStar said.
The satellite company commissioned a study from Competition Policy Associates. Citing that study, the company said copyright holders might be overpaid, because the compensation formula was set based on comparable cable network payments. EchoStar argues the comparison is unfair, because those networks and their affiliates have a very different business model.
Copyright holders have disagreed with EchoStar's conclusions. EchoStar was sued in Florida federal court by broadcasters seeking royalty payments for satellite customers improperly viewing distant signals. The DBS provider has settled with most networks, paying back royalties.
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