[Federal Register: July 7, 2005 (Volume 70, Number 129)]
[Notices]
[Page 39343-39345]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07jy05-90]
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LIBRARY OF CONGRESS
Copyright Office
[Docket No. RM 2005-7]
Satellite Home Viewer Extension and Reauthorization Act of 2004
AGENCY: Copyright Office, Library of Congress.
ACTION: Notice of inquiry.
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SUMMARY: The Copyright Office of the Library of Congress is requesting
information for the preparation of the first report to the Congress
required by the Satellite Home Viewer Extension and Reauthorization Act
of 2004.
DATES: Comments are due no later than August 22, 2005. Reply comments
are due no later than September 12, 2005.
ADDRESSES: If hand delivered by a private party, an original and five
copies of a comment should be brought to Room LM-401 of the James
Madison Memorial Building between 8:30 a.m. and 5 p.m. and the envelope
should be addressed as follows: Office of the General Counsel, U.S.
Copyright Office, James Madison Memorial Building, Room LM-401, 101
Independence Avenue, SE, Washington, DC 20559-6000. If delivered by a
commercial courier, an original and five copies of a comment must be
delivered to the Congressional Courier Acceptance Site located at 2nd
and D Streets, NE, between 8:30 a.m. and 4 p.m. The envelope should be
addressed as follows: Office of the General Counsel, Room LM-403, James
Madison Memorial Building, 101 Independence Avenue, SE, Washington, DC.
If sent by mail (including overnight delivery using U.S. Postal Service
Express Mail), an original and five copies of a comment should be
addressed to U.S. Copyright Office, Copyright GC/I&R, P.O. Box 70400,
Southwest Station, Washington, DC 20024. Comments may not be delivered
by means of overnight delivery services such as Federal Express, United
Parcel Service, etc., due to delays in processing receipt of such
deliveries.
FOR FURTHER INFORMATION CONTACT: Tanya Sandros, Associate General
Counsel, Copyright GC/I&R, P.O. Box 70400, Southwest Station,
Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 707-
8366.
SUPPLEMENTARY INFORMATION: On December 8, 2004, the President signed
the Satellite Home Viewer Extension and Reauthorization Act of 2004
(``SHVERA''), a part of the Consolidated Appropriations Act of 2005.
Pub. L. No. 108-447. SHVERA extends for an additional five years the
statutory license for satellite carriers retransmitting over-the-air
television broadcast stations to their subscribers, as well as making a
number of amendments to the existing section 119 of the Copyright Act.
In addition to the extension and the amendments, SHVERA directs the
Copyright Office to conduct two studies and report its findings to the
Committee on the Judiciary of the House of Representatives and the
Committee on the Judiciary of the Senate. One study, due by June 30,
2008, requires the Copyright Office to examine and compare the
statutory licensing systems for the cable and satellite industries
under sections 111, 119 and 122 of the Copyright Act and recommend any
necessary legislative changes. The other study, due by December 31,
2005, requires the Office to examine select portions of the section 119
license and to determine what, if any, impact sections 119 and 122 have
had on copyright owners whose programming is retransmitted by satellite
carriers. That study is the subject of this Notice of Inquiry.
The SHVERA Study
Section 110 of SHVERA provides:
No later than December 31, 2005, the Register of Copyrights shall
report to the Committee on the Judiciary of the House of
Representatives and the Committee on the Judiciary of the Senate the
Register's findings and recommendations on the following:
(1) The extent to which the unserved household limitation for
network stations contained in section 119 of title 17, United States
Code, has operated efficiently and effectively and has forwarded the
goal of title 17, United States Code, to protect copyright owners of
over-the-air television programming, including what amendments, if
any, are necessary to effectively identify the application of the
limitation to individual households to receive secondary
transmissions of primary digital transmissions of network stations.
(2) The extent to which secondary transmissions of primary
transmissions of network stations and superstations under section
119 of title 17, United States Code, harm copyright owners of
broadcast programming throughout the United States and the effect,
if any, of the statutory license under section 122 of title 17,
United States Code, in reducing such harm.
Pub. L. No. 108-447, 118 Stat. 3394, 3408 (2004).
Part One: The Unserved Household Limitation
The statutory license set forth in section 119 of the Copyright Act
enables satellite carriers to retransmit distant over-the-air
television broadcast stations to their subscribers.\1\The license has a
significant restriction, however, with respect to the retransmission of
network television stations. Satellite carriers may only retransmit
distant network stations to subscribers who reside in ``unserved
households.'' An ``unserved household,'' with respect to a particular
television network, is defined in the law as:
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\1\ Section 122 of the Copyright Act permits satellite carriers
to retransmit local over-the-air television broadcast stations to
their subscribers. See 17 U.S.C. 122.
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[A] household that-
(A) cannot receive, through the use of a conventional, stationary,
outdoor rooftop receiving antenna, an over-the-air signal of a
primary network station affiliated with that network of Grade B
intensity as defined by the Federal Communications Commission under
section 73.683(a) of title 47 of the Code of Federal Regulations, as
in effect on January 1, 1999;
(B) is subject to a waiver that meets the standards of subsection
(a)(14) whether or not the waiver was granted before the date of the
enactment of the Satellite Home Viewer Extension and Reauthorization
Act of 2004;
(C) is a subscriber to whom subsection (e) applies;
(D) is a subscriber to whom subsection (a)(12) applies; or
(E) is a subscriber to whom the exemption under subsection
(a)(2)(B)(iii) applies.
17 U.S.C. 119(d)(10).
[[Page 39344]]
As can be seen from the above, the unserved household limitation
contains a number of involved and complex provisions. It was not always
so. In the original law that created section 119, the Satellite Home
Viewer Act of 1988, the unserved household limitation was relatively
straightforward. Because satellite carriers lacked the technological
capability at that time to deliver local signals to their subscribers,
the limitation was created to prevent satellite carriers from bringing
network stations from distant television markets to subscribers and
thereby decrease their incentive to watch the signals of the local
over-the-air network stations. H.R. Rep. No. 100-887, pt. 1, at 18
(August 18, 1988). If a satellite subscriber could receive the off-air
signal of the local network station using a conventional rooftop
antenna, the satellite carrier could not provide the subscriber with a
distant network station affiliated with the same network. If a
subscriber resided in a household outside the reach of the signal of
the local network station-a so-called ``white area''-then the
subscriber was eligible for satellite service of a distant station of
the same network. The unserved household limitation therefore operated
similarly to the network nonduplication rules of the Federal
Communications Commission (``FCC'') applicable to cable systems.\2\
Unfortunately, satellite carriers largely ignored the proscription of
the unserved household limitation in the years after 1988, resulting in
revisions to the definition in the 1994 and 1999 extensions of section
119 and a ``beefing up'' of the enforcement provisions related to the
limitation. As a result, the limitation was defined with greater
precision. The FCC was directed in the 1999 legislation to precisely
define what is meant by receiving a signal of Grade B intensity and to
develop a test for determining it. See 47 CFR 73.683(a). In addition to
lack of over-the-air receipt of a network signal, other categories were
added as demonstrating that a subscriber was unserved for purposes of
section 119. Subparagraph (B) was added to the unserved household
limitation to provide that even if a subscriber could receive an over-
the-air signal of Grade B intensity, if the subscriber obtained a
waiver from the local network affiliate then he/she was considered
unserved under section 119. Subparagraph (C) applies to subscribers
whose receipt of network signals was a violation of the limitation but
were grandfathered in by the 1999 legislation if they received the
network signals after July 11, 1998, but before October 31, 1999. 17
U.S.C. 119(e). Subparagraph (D), also added by the 1999 legislation,
provides that subscribers of satellite service for commercial trucks
and recreational vehicles, subject to certain requirements, are also
considered unserved. And subsection (e) defines C-band satellite
subscribers as unserved regardless of whether they can receive an over-
the-air signal from the local network stations.
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\2\ The FCC has never regulated the satellite industry in the
same fashion as the cable industry. Thus, there were no network
nonduplication rules applicable to satellite for many years.
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The world of the unserved household limitation in the Copyright Act
is about to be complicated further. All of the existing provisions and
definitions were crafted in the era of analog broadcast television.
Broadcasters are now switching their transmissions from analog to
digital, and it is anticipated that the ``digital transition'' will
soon be completed. The Grade B signal intensity standard, which has
been the centerpiece for defining when an individual household is
unserved under section 119, does not apply to digital transmissions.\3\
However, section 204(b) of SHVERA directs the FCC to complete a study
within one year from date of enactment to examine a number of factors
related to developing a digital signal intensity standard. The study is
expressly being done ``for purposes of identifying if a household is
unserved by an adequate digital signal under section 119(d)(10) of
title 17, United States Code.'' 37 U.S.C. 339(c)(1)(A) (2005).\4\
Included in that study is a consideration of the development of a
predictive model for digital broadcast stations to facilitate
application of the unserved household limitation in the Copyright Act.
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\3\ The FCC does set forth the signal propagation areas, similar
to Grade B contours, for digital television stations. See 47 CFR
73.622(e)(service areas for channels 2 through 69). These rules do
not, however, permit determination of whether a particular household
receives an adequate signal with respect to a particular digital
network station.
\4\ The FCC has commenced the study with the recent publication
of a Notice of Inquiry. See Technical Standards for Determining
Eligibility for Satellite-Delivered Network Signals Pursuant to the
Satellite Home Viewer Extension and Reauthorization Act, ET Docket
No. 05-182, Notice of Inquiry (Released May 3, 2005).
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Part One of the Copyright Office study requires consideration of
the unserved household limitation on two levels. First, we must
determine whether the limitation has operated ``efficiently and
effectively'' and whether it has promoted the goal of protecting
copyright owners of over-the-air television programming. To make these
determinations, the Office is soliciting public comment in this Notice
of Inquiry. With respect to whether the unserved household limitation
has operated efficiently and effectively, the Office is interested in
public comments directed to the following. Has the Grade B signal
intensity standard set forth in 47 CFR 73.683(a) permitted members of
the public to receive adequate over-the-air television signals and is
it the correct standard for determining when a subscriber resides in a
television ``white area''? Has the Grade B predictive model developed
by the FCC under section 339(c)(3) of the Communications Act, title 37
of the United States Code, permitted effective identification of white
areas and promoted the quick and efficient determination of whether
subscribers are eligible for receipt of distant network stations under
section 119? To what extent has the unserved household limitation been
violated by satellite carriers and what are the details of enforcement
actions taken against such violations? What improvements and/or
amendments could be implemented to improve the effectiveness and
efficiency of the unserved household limitation?
With respect to whether the unserved household limitation has
protected copyright owners of over-the-air television programming, the
Copyright Office is interested in data and information that
demonstrates what impact the limitation has on copyright owners'
ability to charge a fair market price from broadcasters that transmit
their programming. If the limitation were removed from the law, what
impact would that have on the price of programming? Does the limitation
promote the interests of copyright owners more, less, or the same as it
does the interests of broadcasters?
As to the second level of Part One of the study, we seek comment as
to the following. To what extent will the signal intensity standard for
households receiving over-the-air digital network stations likely
resemble the current standard for analog television? What are likely to
be the technical and practical differences between the two standards
and how are they likely to affect satellite subscribers' receipt of
over-the-air television stations? Are the coverage levels of a digital
standard likely to be sufficient to provide full-time receipt of
television signals? To prevent receipt of distant signals by
subscribers who can receive an adequate local signal, what, if any,
amendments will be necessary to the unserved household definition with
respect to satellite subscriber receipt of over-the-air digital
television stations?
The Copyright Office encourages comments directed to these
inquiries
[[Page 39345]]
and welcomes additional comments and information related to the
unserved household limitation.
Part Two: Harm to Copyright Owners
Part Two of the study is an inquiry as to the extent to which
satellite retransmissions of superstations and network stations under
the section 119 license harm copyright owners of broadcast programming
in the United States and the effect, if any, of the section 122
license, which permits royalty-free retransmission of local stations,
in ameliorating such harm. ``Harm'' is generally understood to mean the
difference in the price that copyright owners would have been able to
charge satellite carriers for their programming and the price they
actually receive under the fees established for section 119.\5\ At one
point in time, the Copyright Royalty Tribunal considered the extent to
which different categories of copyright owners (e.g. owners of movies
and syndicated television series, sports programmers, owners of
noncommercial broadcasting programming, etc.) were harmed by the
existence of the section 111 cable license in determining the share of
royalties each programming category should receive. That approach was
altered by a Copyright Arbitration Royalty Panel (``CARP'') in 1996 in
a cable royalty distribution proceeding, and it is established
precedent in the context of cable royalty distribution proceedings that
copyright owners of all programming categories are harmed equally by
the existence of the section 111 license. See Distribution of 1990-1992
Cable Royalties, Distribution Order, 61 FR 55653, 55658-59 (October 28,
1996). That precedent would presumably apply to a contested
distribution proceeding conducted under section 119 should one take
place. Nevertheless, the Copyright Office is interested in data,
information, and analysis that demonstrates whether and to what extent
particular program categories are harmed by the section 119 license.
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\5\It is possible for copyright owners to be harmed in other
ways by distant signal retransmissions. The Copyright Office is
interested in receiving comments and information regarding other
types of ``harm.''
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Because virtually all over-the-air television stations
retransmitted by satellite carriers are licensed through the section
119 license, it is difficult to speculate as to how the licensing of
broadcast programming would operate in the absence of the license. In
other words, what would be the fair market value of different types of
broadcast programming if there was no section 119 license, and how
would the licensing of that programming be handled (i.e. by the
broadcasters, by some type of collective rights organization, etc.)? In
the 1997 proceeding to adjust the section 119 royalty rates, the CARP
was required to determine the fair market value of superstations and
network stations retransmitted by satellite carriers. In making this
determination, the CARP examined data from parallel markets.
Specifically, the CARP considered the amounts received by programmers
of cable-originated networks (ESPN, A&E, and other cable channels that
are similar to broadcast channels) who operate in the free market
without a statutory license as a proxy for the fair market value of
broadcast programming. See 62 FR 55742 (October 28, 1997). The
Copyright Office seeks updated data similar to that submitted in the
1997 rate adjustment proceeding as a means of approximating what
copyright owners might have received in the absence of the section 119
license, along with analyses of that data that explain how copyright
owners have been harmed by being deprived of the ability to license
those works to satellite carriers in the open market. Data that
compares what satellite carriers would have paid under approximate fair
market value scenarios to what was actually paid under the section 119
license is helpful. In addition, the Office seeks information as to how
the licensing of broadcast retransmissions by satellite carriers might
be handled in the absence of section 119 and approximations as to the
costs associated with collecting and distributing royalties.
In assessing the fair market value of broadcast programming, the
Copyright Office recognizes that there may be factors beyond
consideration of parallel markets. For example, FCC regulations
governing satellite retransmissions can ultimately have an effect on
the price of programming protected by the copyright laws. The FCC's
syndicated exclusivity rules, sports blackout rules, and the network
nonduplication rules may play some role in reducing harm to copyright
owners from section 119 retransmissions. The Copyright Office requests
information and analysis on this possibility. In addition, the Office
notes that satellite broadcast retransmissions are exempt from the
retransmission consent provisions of the communications law. See 37
U.S.C. 325. What impact, if any, does the retransmission consent
exemption have on harm to copyright owners from broadcast
retransmissions under section 119?
Finally, Part Two of the study requires the Copyright Office to
consider the effect of the section 122 license on harm caused to
copyright owners by section 119 retransmissions. Section 122 is a
royalty-free statutory license created during the 1999 reauthorization
of section 119 that permits satellite carriers to retransmit
superstations and network stations to subscribers that reside within
the local markets of those stations. 17 U.S.C. 122. The Office is
interested in data, information, and analysis that demonstrates changes
in royalties paid under section 119 before and after the adoption of
section 122, and any other information demonstrating any impact section
122 may have had on the section 119 royalties or any other effect
section 122 has had on harm caused to copyright owners by section 119
retransmissions.
Commenters are encouraged to provide not only the data,
information, and analyses requested in this Notice of Inquiry but also
any other data, information, and/or analyses they deem relevant to the
issues presented in section 110 of SHVERA. The Copyright Office
welcomes the opportunity to meet with representatives of satellite
carriers, copyright owners, broadcasters, and other parties affected by
sections 119 and 122 of the Copyright Act in order to obtain additional
relevant information and to hear their concerns.
Dated: June 30, 2005.
Marybeth Peters,
Register of Copyrights.
[FR Doc. 05-13332 Filed 7-6-05; 8:45 am]
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