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111th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 111-319
======================================================================
SATELLITE HOME VIEWER UPDATE AND REAUTHORIZATION ACT OF 2009
_______
October 28, 2009.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Conyers, from the Committee on the Judiciary, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 3570]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the bill
(H.R. 3570) to amend title 17, United States Code, to
reauthorize the satellite statutory license, to conform the
satellite and cable statutory licenses to all-digital
transmissions, and for other purposes, having considered the
same, report favorably thereon with amendments and recommend
that the bill as amended do pass.
CONTENTS
Page
The Amendments................................................... 2
Purpose and Summary.............................................. 4
Background and Need for the Legislation.......................... 4
Hearings......................................................... 14
Committee Consideration.......................................... 14
Committee Votes.................................................. 14
Committee Oversight Findings..................................... 15
New Budget Authority and Tax Expenditures........................ 15
Congressional Budget Office Cost Estimate........................ 15
Performance Goals and Objectives................................. 21
Constitutional Authority Statement............................... 21
Advisory on Earmarks............................................. 21
Section-by-Section Analysis...................................... 21
Changes in Existing Law Made by the Bill, as Reported............ 25
Committee Jurisdictional Letters................................. 68
Additional Views................................................. 70
The Amendments
The amendments (stated in terms of the page and line
numbers of the introduced bill) are as follows:
Page 2, line 12, strike ``chapter I'' and insert ``chapter
1''.
Page 6, line 4, strike ``catastrophe'' and insert
``catastrophic incident''.
Page 6, line 19, insert ``and the Committee on Homeland
Security'' after ``Judiciary''.
Page 7, insert the following after line 12:
``(iii) Catastrophic incident.--The
term `catastrophic incident' means any
natural disaster, act of terrorism, or
other man-made disaster that results in
extraordinary levels of casualties or
damage or disruption severely affecting
the population (including mass
evacuations), infrastructure, the
environment, the economy, national
morale, or government functions in a
geographic area.
Page 8, line 3, strike ``by a'' and insert ``to a''.
Page 9, strike lines 7 and 8 and insert the following:
(4) in paragraph (3), as redesignated--
(A) by inserting ``(including the filing
fee specified in paragraph (1)(C))'' after
``shall receive all fees''; and
(B) by striking ``paragraph (4)'' and
inserting ``paragraph (5)'';
Page 12, line 21, strike ``Copyright'' and insert
``copyright''.
Page 19, lines 2 and 3, strike ``associated data'' and
insert ``program-related material''.
Page 19, line 4, insert ``(as determined by Nielsen Media
Research)'' after ``viewership ratings''.
Page 19, line 10, insert a space after ``(1),''.
Page 21, line 11, insert ``, as amended by subsections (d)
and (j),'' after ``119(a)''.
Page 23, line 6, strike ``paragraph (3)(E)'' and insert
``subparagraph (E) of paragraph (3)''.
Page 27, line 9, strike ``chapter I'' and insert ``chapter
1''.
Page 34, move lines 5 through 7 two ems to the right.
Page 35, move line 21 through page 36, line 3, two ems to
the right.
Page 36, move line 9 two ems to the right.
Page 36, line 11, strike ``low power television station''
and insert ```low power television station'''.
Page 36, line 15, strike ``low power television station''
and insert ```low power television station'''.
Page 37, line 2, strike ``chapter I'' and insert ``chapter
1''.
Page 38, line 21, strike ``catastrophe'' and insert
``catastrophic incident''.
Page 39, line 9, insert ``and the Committee on Homeland
Security'' after ``Judiciary''.
Page 39, add the following after line 24:
``(C) Catastrophic incident.--The term
`catastrophic incident' means any natural
disaster, act of terrorism, or other man-made
disaster that results in extraordinary levels
of casualties or damage or disruption severely
affecting the population (including mass
evacuations), infrastructure, the environment,
the economy, national morale, or government
functions in a geographic area.
Page 40, line 24, insert a space after the semicolon.
Page 41, line 3, strike ``A total'' and insert ``Except in
the case of a cable system whose royalty is specified in
subparagraph (E) or (F), a total''.
Page 41, line 10, insert ``of such gross receipts'' after
``1.064 percent''.
Page 43, lines 11 and 12, strike ``this paragraph'' and
insert ``subparagraph (C)(iii)''.
Page 43, line 16, insert ``or offset'' after ``refund''.
Page 45, strike lines 4 through 6 and insert the following:
(2) in paragraph (2)--
(A) by striking ``The Register of
Copyrights'' and inserting the following
``Handling of fees.--The Register of
Copyrights''; and
(B) by inserting ``(including the filing
fee specified in paragraph (1)(G))'' after
``shall receive'';
Page 45, line 20, strike ```; and''' and insert ``the
semicolon''.
Page 47, line 3, strike ``during'' and insert ``for''.
Page 47, insert the following after line 4 and redesignate
succeeding subsections accordingly:
(d) Effective Date of New Royalty Fee Rates.--The royalty
fee rates established in section 111(d)(1)(B) of title 17,
United States Code, as amended by subsection (c)(1)(C) of this
section, shall take effect commencing with the first accounting
period occurring in 2010.
Page 49, line 8, strike ``steam'' and insert ``stream''.
Page 54, line 21, strike ``subsection (c)'' and insert
``subsection (c)(1)''.
Page 54, line 24, strike ``each place it appears''.
Purpose and Summary
The purpose of the Satellite Home Viewer Update and
Reauthorization Act of 2009 is to modernize, improve and
simplify the compulsory copyright licenses governing the
retransmission of distant and local television signals by cable
and satellite television operators, under Sections 111, 119 and
122 of Chapter 17 of the United States Code. Both the cable and
satellite industries rely on these licenses to provide
television programming to their customers.
The legislation reauthorizes the Section 119 license, which
would otherwise expire on December 31, 2009. The bill also
amends the licenses to reflect the transition to digital
television, resolves the so-called ``phantom signal'' ambiguity
and slightly increases the royalties paid under the cable
license (Section 111), provides content owners with an audit
right that increases fairness in the Sections 111 and 119
licenses, dramatically increases the penalties for copyright
infringement under the satellite licenses (Sections 119 and
122), incentivizes the satellite industry to correct a gap in
the current television market that disadvantages rural
consumers, and provides a framework for cable and satellite
providers to offer multicast signals to their customers. The
bill corrects technical errors and inconsistencies in the
licenses.
Background and Need for the Legislation
These compulsory copyright licenses were designed to
facilitate investment in new creative works by the satellite
and cable industries by eliminating direct negotiation with the
copyright owners for the use of certain kinds of distant\1\ and
local signal programming. Section 119 of the Copyright Act
allows satellite carriers to retransmit ``distant'' broadcast
signals without incurring the transaction costs associated with
individual marketplace negotiations. The license in Section 122
governs the rebroadcast of certain kinds of local signals by
satellite providers, and Section 111 of the Copyright Act
governs the retransmission of distant and local signals by
cable operators.
---------------------------------------------------------------------------
\1\A distant signal contains the programming of a television
network affiliate that comes from outside the receiving household's
local market area (known as ``Designated Market Areas'' or DMAs). For
example, if a household in Zanesville, Ohio receives the programming on
an ABC station based in Chicago, the Chicago ABC station signal is a
``distant signal'' for the Ohio household. The country is divided into
210 DMAs. The boundaries of each DMA are defined by Nielsen Media
Research and are periodically updated. Broadcasters generally negotiate
affiliation agreements and advertising contracts concerning particular
DMAs. Additionally, the FCC's carriage requirements refer to DMAs.
---------------------------------------------------------------------------
The purpose of this legislation is to make the licenses
more fair for content owners, increase competition and service
to satellite and cable consumers, and update the licenses to
reflect new technological advances such as multicasting and the
transition to digital television.
A. THE HISTORICAL CONTEXT OF THE LICENSES
Over 30 years ago, Congress first recognized the challenges
that made it difficult for the nascent cable industry to clear
the numerous copyrights contained in a broadcast television
signal before retransmitting the programming to its customers.
Specifically, Congress wanted to decrease the high transaction
costs associated with the private negotiation with each content
creator for the performance rights in copyrighted work.
In 1976, Congress enacted Section 111 of the Copyright Act,
which allows cable operators to provide distant and local
signals to customers. Unlike Section 119, which must be
reauthorized every 5 years, Section 111 is permanent and has
rarely been amended by Congress since its inception.
Beginning in 1988, Congress passed a series of laws
governing the retransmission of broadcast television signals by
satellite carriers, in order to foster growth in the nascent
satellite industry, advance multichannel video competition, and
increase consumer choice. The Section 119 license was intended
to provide a lifeline service to households that could not
receive certain signals over the air and to help the satellite
industry develop into a viable competitor to the entrenched
cable industry. The 1988 Satellite Home Viewer Act
(``SHVA''),\2\ the Satellite Home Viewer Act of 1994,\3\ the
1999 Satellite Home Viewer Improvement Act (``SHVIA''),\4\ and
the 2004 Satellite Home Viewer Extension and Reauthorization
Act (``SHVERA'')\5\ established and modified the Section 119
and Section 122 licenses. Section 119 permits satellite
carriers to offer distant signals to subscribers who are not
otherwise served by local network television signals. Section
122 permits satellite carriers to retransmit the subscriber's
local television signals to the subscriber via satellite.
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\2\P.L. 100-667.
\3\P.L. 103-369.
\4\P.L. 106-113.
\5\P.L. 108-447, passed as Division J of Title IV of the FY 2005
Consolidated Appropriations Act.
---------------------------------------------------------------------------
B. HOW THE LICENSES WORK
In exchange for the license to publicly perform the
copyrighted works contained in distant signals, cable and
satellite providers pay royalties at pre-determined rates to
the Copyright Office, which then distributes those royalties in
accordance with an order issued by the Copyright Royalty Judges
to the pool of copyright owners whose works have been used. The
rates can be set by voluntary agreement, or, in the case of
Section 119, the rate can also be set by a compulsory
proceeding before the Copyright Royalty Judges. The calculation
of royalties that cable providers must pay under Section 111 is
based on a percentage of the gross receipts generated by each
cable system. The royalties that satellite carriers must pay
under Section 119 are calculated on a per subscriber, per
signal basis. Section 122 is a royalty-free license.
Under Section 111, cable operators may offer any number of
distant broadcast signals to subscribers, as long as the
operators pay the royalties required by the license and abide
by rules and regulations established by the Federal
Communications Commission regarding the carriage of broadcast
signals.\6\ In contrast, under the Section 119 license, a
satellite carrier may only provide the distant signal of a
network\7\ station to a household that is ``unserved'' with
respect to that particular network. A household is unserved if
the household does not receive the primary video of a network
affiliate that is located within the household's DMA.\8\
---------------------------------------------------------------------------
\6\See, e.g., 47 U.S.C. Sec. 339(b).
\7\Under the Section 119 license, the word ``network'' means both
traditional networks, such as ABC or CBS, and noncommercial educational
stations.
\8\The ``primary video'' is the programming stream that had the
highest viewership on the date of this statute's enactment. Viewership
is measured by the Neilson Media Research company. In rare cases, a
local broadcaster may offer--in addition to its primary signal--a
different network affiliate on a multicast video stream. Multicasting,
and its effect on the ``unserved household'' analysis, is addressed
more comprehensively in Section (C)(2) of this Report.
---------------------------------------------------------------------------
Section 122 governs the satellite retransmission of signals
from the subscriber's own local market (so-called ``local into
local'' service). This license does not require the payment of
royalties because it simply results in consumers receiving the
same programming they could receive without a satellite (e.g.,
by using an antenna).
This license permits, but does not require, satellite
carriers to retransmit a local network signal to the households
in the DMA where the signal originated. If a satellite carrier
chooses to provide the signal of a local broadcast station in a
DMA, it must offer the signal of all network channels in that
DMA.\9\ Local broadcasters do not want their programming to be
ignored by consumers simply because it is not integrated into
satellite service, so this requirement ensures that consumers
who choose to receive satellite service receive their local
broadcast as easily as they receive the other channels offered
via their satellite service. Satellite companies now offer
local-into-local service to 97 percent of the households in the
country. The areas that do not receive this service tend to be
rural and sparsely populated markets. These are the regions
that would particularly benefit from satellite service, but
have thus far been insufficiently profitable to induce
satellite carriers to enter the market.
---------------------------------------------------------------------------
\9\This rule is known as ``carry one, carry all'' and is related to
requirements set forth in the Section 338 of the Communications Act, as
implemented by the Federal Communications Commission.
---------------------------------------------------------------------------
C. THE ISSUES CONTEMPLATED BY SHVURA
(1) Reauthorization of Section 119 License for Five Years
This legislation extends Section 119 for 5 years. The
Committee carefully considered proposals to eliminate the
Sections 111, 119 and 122 licenses. Content owners assert that
the compulsory licenses are an abrogation of their exclusive
rights, that the below-market rates they receive are an
unjustifiable subsidy to a profitable industry, and that the
declining number of distant signal subscribers (approximately 1
percent of U.S. TV households) serviced by satellite providers
prove the licenses are an anachronism.\10\ The Copyright Office
shares this perspective but has noted that as long as the cable
industry benefits from the continued existence of the 111
compulsory license, it would be inequitable for Congress to
eliminate the 119 license.\11\ Satellite providers assert that
nearly a million satellite subscribers still rely on the
distant signal license today.\12\
---------------------------------------------------------------------------
\10\Hearing testimony of Fritz Attaway, Executive Vice President,
Motion Picture Association of America, ``Copyright Licensing in a
Digital Age: Competition and the Need to Update the Cable and Satellite
TV Licenses,'' February 25, 2009, Committee on the Judiciary, House of
Representatives.
\11\Hearing testimony of Marybeth Peters, Register of Copyrights,
``Cable and Satellite Carrier Statutory License,'' February 24, 2004,
Subcommittee on Courts, The Internet and Intellectual Property, House
of Representatives.
\12\Hearing testimony of Bob Gabrielli, Senior Vice President,
DirecTV, Inc., ``Copyright Licensing in a Digital Age: Competition and
the need to Update the Cable and Satellite TV Licenses,'' February 25,
2009, House of Representatives, Committee on the Judiciary.
---------------------------------------------------------------------------
The Committee supports a transition to open market and
direct negotiations between content owners and cable and
satellite providers, but has determined that the marketplace is
not yet equipped to function without the licenses.
(2) Revisions Required by the Digital Transition
In June 2009, all full power television broadcast stations
ceased broadcasting analog signals and exclusively broadcast
digital signals. This legislation updates the statutory
licenses in several respects to accommodate the significant
changes the digital transition has caused in television
broadcasting.
Prior to this legislation, a household was considered
``served'' if it received a stray signal from a station outside
of its DMA.\13\ This legislation clarifies that only signals
that originate from the DMA where the household is located are
considered when determining if a household is served. The bill
also updates the definition of ``unserved household'' to
provide for a more accurate predictive method of determining
whether satellite carriers may presume a household will be
``unserved'' by a particular network signal.
---------------------------------------------------------------------------
\13\This phenomenon has previously been called ``Grade B Bleed.''
After the digital transition, the situation would occur when a
broadcast signal is received outside of its ``noise-limited contour,''
which is the area that the FCC estimates a digital signal will cover.
---------------------------------------------------------------------------
The legislation also addresses the growing practice of
``multicasting''--when a broadcaster subdivides its digital
stream, allowing the broadcaster to provide multiple streams of
distinct programming to a single household.\14\ At the time the
statutory licenses were designed, this proliferation of
programming options by a single broadcaster was not
contemplated. This has caused uncertainty about whether
multicast streams should be considered when determining if a
household is served, as well as how multicast streams should be
valued for the purposes of royalty collection.
---------------------------------------------------------------------------
\14\For example, in a market that does not contain a local
affiliate for a particular network, a local broadcaster could negotiate
with that missing network to provide the network programming on one of
its subchannels. The broadcaster would add syndicated programming and
its own local programming to provide consumers with a full television
programming day.
---------------------------------------------------------------------------
This legislation updates the Section 119 license to address
when a multicast stream of a network station will render a
household ``served'' for the purpose of distant signal
eligibility. At this point in time while multicasting is in its
infancy, it is impossible to predict how many such multicast
network channels will arise. To accommodate the current
limitations on satellite capacity,\15\ this legislation
provides for a 3-year multicasting transition period. Any local
broadcaster's multicast of a network station that a satellite
carrier offers on July 1, 2009 will render a household
``served'' for the purpose of determining distant signal
eligibility for that network. After the statute is enacted,
satellite carriers have 3 years to build out satellite capacity
to accommodate new network channels transmitted by multicast,
and broadcasters have 3 years to establish new network
affiliates they intend to transmit by multicast. A household
that receives a transmission of these additional network
channels as a multicast stream during this transition period is
not considered ``served,'' and a satellite carrier is allowed
to provide that station to the subscriber under Section 119. On
January 1, 2013, any household that receives local network
programming via multicast will be considered ``served'' with
respect to that station. Satellite carriers will not be
permitted to import distant signals if these multicasts exist
in the local market.
---------------------------------------------------------------------------
\15\Satellite carriers design their satellite spot beams to
maximize the number of local markets they can serve under the ``carry
one, carry all'' rules. If they design a particular beam with too
little capacity, they cannot serve the market at all. If they design
the beam with more capacity than necessary, however, they can fit fewer
beams on the satellite (and can thus serve fewer markets). So they have
designed their beams to exactly match the number of full power stations
in a given market, which is why at the current time most of those beams
lack room for additional local multicast signals.
---------------------------------------------------------------------------
The Committee intends this change to affect only the
definition of ``unserved household,'' which in turn concerns
only eligibility for distant signals under the statutory
license contained in Section 119. The Committee does not intend
this language to affect the definition of ``primary video'' or
``program related'' under any other provision of law.
In the Section 111 license, which has no ``unserved
household'' standard, this legislation clarifies that multicast
streams have some value with respect to royalty calculations.
The Committee does not intend for the digital transition to
upset settled expectations with regard to the application of
Section 111 to broadcast signals whose status for purposes of
the compulsory license has historically been determined by
reference to the analog ``Grade B contour.'' Thus for example,
Section 5(d)(4) of the Act updates the definition of the
``local service area of a primary transmitter'' to add a
reference to the ``noise-limited contour,'' which is the
comparable signal strength measurement for digital television
broadcast signals as the analog Grade B contour. The Copyright
Office will adopt a common sense approach with respect to other
situations in which the Grade B contour is a factor in the
application of the compulsory license.
(3) Filing Fee
The administration of the statutory license is expensive.
The Committee believes that the entire cost of administering
the licensing system and adjudicating disputes should not be
deducted from the royalties copyright owners are due to receive
for the compelled use of their works.\16\
---------------------------------------------------------------------------
\16\In its Section 110 Report, the Copyright Office concluded that
``the section 119 license does harm copyright owners because the
current statutory rates do not reflect fair market value and . . . the
law requires a segment of copyright owners to bear the costs associated
with administration of the new Copyright Royalty Board without any
requirement that the users of the license pay any share of the
Copyright Royalty Board's administrative costs.'' Satellite Home Viewer
Extension and Reauthorization Report, Report of the Register of
Copyrights, February 2006, at p. vi.
---------------------------------------------------------------------------
The legislation adds a new subparagraph (c) to 119 (b)(1),
directing the Register of Copyrights to determine an
appropriate filing fee to be paid in connection with the
deposit of semiannual statements of account and royalty
payments by satellite carriers.
The legislation also adds a new subparagraph G to Section
111(d)(1), directing the Register of Copyrights to determine an
appropriate filing fee to be paid in connection with the
deposit of semi-annual statements of account and royalty
payments by cable systems. In establishing such a fee, the
Register should seek to minimize the burden such fees may
impose on individual cable systems that calculate their
royalties based on subparagraphs (E) and (F) of Section
111(d)(1).
(4) Emergency Response
At present, the statutory licenses preclude cable and
satellite companies from retransmitting broadcast television
programming to government organizations, even in times of
national emergency. The bill gives satellite carriers and cable
operators the flexibility they need to assist the U.S.
government during specific national emergencies. It permits
either provider to retransmit distant signal programming of
television broadcast stations as the relevant Federal agencies
may require in order to carry out their mission.
(5) Audit Right
The bill gives copyright owners a mechanism by which they
can verify that they are being accurately compensated for the
use of their intellectual property under both the Section 111
and Section 119 licenses.
The legislation directs the Register of Copyrights to adopt
regulations establishing a process by which copyright owners,
through a qualified independent auditor, may verify the gross
receipts and royalty fee computations reported on statements of
account submitted by cable operators under Section 111. By
specifying that a system's semi-annual statements of account
may be subject to a ``single verification procedure,'' the
Committee intends only to ensure that no individual statement
of account may be audited more than once. In implementing the
verification process, the Register may consider the procedures
adopted under other audit provisions in its rules as well as
audit provisions in private agreements to which cable operators
or content owners may be parties. The Register should seek to
tailor audit procedures to the specific needs and circumstances
of the reporting and payment of royalty fees under Section 111.
In particular, the Register should adopt a verification
procedure that protects sensitive business information from
unnecessary disclosure and minimizes the burden and costs
imposed by the audit process. For example, the Register should
establish limits on the frequency with which audits can be
conducted on an individual cable system and on the number of
audits that a multiple system operator can be required to
undergo in a single year. The Copyright Office will establish a
procedure under which all copyright owners whose works were the
subject of secondary transmissions during the relevant
accounting period and desire to audit a cable system shall
designate a single qualified independent auditor to verify on
their behalf a cable system's reported gross receipts and
royalty fee calculations for the period.
Finally, in establishing verification procedures, the
Register should provide cable operators the opportunity to
review the auditor's report before it is disseminated to the
copyright owners and should establish a reasonable period
following such review before the auditor's report is
disseminated to the owners. The regulations should permit a
cable operator during the pre-dissemination period to amend its
statement of account and to supplement its royalty payments
(subject to the filing fee and interest requirements generally
applicable to late, corrected, or supplemental statements of
account and royalty fees) to conform with the auditor's
findings. In the absence of a showing of bad faith, a cable
operator that files such amendment and supplemental payment
within the prescribed period will not be subject to copyright
infringement liability under Section 111(c)(2)(B) based on the
deficiencies found by the auditor. Failure to amend and to pay
within the prescribed period would mean that an infringement
action could be brought against a cable operator based on the
deficiencies identified by the auditor and, to the extent that
such deficiencies are determined by a court of competent
jurisdiction to constitute copyright infringement, the operator
would be fully subject to all infringement remedies, provided,
however, that a finding of the auditor shall be given no
special deference in any such infringement action. The rules
adopted by the Office shall include procedures allocating
responsibility for the cost of audits consistent with such
procedures in other audit provisions in its rules.
(6) ``Significantly Viewed'' and Low Power Stations
The 2004 SHVERA legislation provided satellite carriers
with a limited right to retransmit significantly viewed
signals,\17\ on a royalty-free basis, to those subscribers who
already receive local signals. This change was made to achieve
greater parity between cable and satellite providers (because
cable operators can provide subscribers with significantly
viewed channels) and to provide an additional incentive for
subscribers to sign up for the delivery of local signals where
available. Since significantly viewed signals are by definition
a subset of distant signals, SHVERA included this provision in
Section 119, the distant signal license. However, since
significantly viewed signals do not incur royalties, the
Committee believes it should be moved to Section 122, which
governs all other royalty-free satellite transmissions under
the compulsory license. The bill accordingly incorporates the
significantly viewed provision, previously in Section
119(a)(3), into Section 122(a).
---------------------------------------------------------------------------
\17\Significantly viewed signals are broadcast stations that
originate in a neighboring DMA but have historically been significantly
received and viewed by a wider audience.
---------------------------------------------------------------------------
This legislation also amends the law with respect to low
power television stations to clarify that the Section 119
license requires payment for the use of low power signals when
they are transmitted beyond the limited area that the broadcast
equipment of the low power station was designed to reach over
the air.\18\ The bill moves the low power provision that
relates to rebroadcasts within the geographic limitation, which
are royalty-free, to Section 122, but preserves the ability of
satellite carriers to retransmit low power stations throughout
the DMA, so long as royalties are paid for transmissions that
go beyond the local service area.
---------------------------------------------------------------------------
\18\This geographic limitation is referred to as the low power
station's local service area.
---------------------------------------------------------------------------
(7) Permanent Injunction
In 2006, DISH Network (DISH) was enjoined from using the
Section 119 license. A Florida district court found that DISH
Network, then known as Echostar Communications Corporation, had
a national pattern of significant violations of the
license.\19\ Although that court found DISH liable for massive
copyright infringement and imposed heavy remedial obligations
on the company, it did not enjoin DISH from using the Section
119 license. However, on appeal, the United States Court of
Appeals for the 11th Circuit ruled that as a matter of law, the
district court did not have the equitable jurisdiction to avoid
imposing the permanent injunction under 17 U.S.C.
119(a)(7)(B)(i).\20\ The appellate court directed the district
court to impose the injunction.
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\19\CBS Broad., Inc. v. EchoStar Communs. Corp., 276 F. Supp. 2d
1237 (2003).
\20\CBS Broad., Inc. v. Echostar Communs. Corp, 450 F.3d 505, 512
(11th Cir. 2006).
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This legislation restores DISH's ability to provide
subscribers distant signals if, and only if, DISH provides
local-into-local service to all 210 DMAs in the country.
Currently, DISH provides local service in 182 DMAs.\21\ To
regain access to its 119 license, DISH would have to provide
local-into-local service under the Section 122 license to the
additional 28 markets. Once the injunction has been lifted, if
DISH stops serving all 210 DMAs, it loses the right to use the
Section 119 license.
---------------------------------------------------------------------------
\21\DirecTV offers local television stations by satellite in 150
out of 210 DMAs.
---------------------------------------------------------------------------
This legislation does not lift or alter the penalties for
abusing the license that exist elsewhere in the statute, for
DISH or for any other carrier. It places the burden of proof on
DISH if its compliance with the terms of the waiver is
challenged. If DISH abuses the license, the injunction will be
reimposed and DISH will face additional, substantial penalties.
The Committee believes that this is an important policy
initiative because it will induce DISH to fill a gap in the
current television market that primarily disadvantages rural
consumers who live in markets that are often not served by
cable television and not deemed sufficiently lucrative by
satellite companies to justify the expense of launching local-
into-local service. Consequently, about 3 percent of all U.S.
households do not receive local broadcast signals through their
satellite service. Because there are constitutional obstacles
to requiring a satellite carrier to provide local-into-local
service in all 210 markets, an incentive-based system is the
most effective method available to guarantee that all
television markets receive local-into-local service.
The actual impact of permitting DISH to once again use the
Section 119 license is fairly limited. Due to the ``if local,
no distant'' requirements in the law, DISH would only be able
to use the Section 119 license in a few circumstances, such as
for short markets (markets that are missing an affiliate), for
recreational vehicles, and for the special exceptions for
Vermont, New Hampshire, Oregon and Mississippi.\22\
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\22\Section 119(a)(2)(C). In these states, satellite carriers are
permitted to provide in-state signals to subscribers who neither reside
in the originating DMA nor qualify to receive the programming on the
basis of the signal being deemed ``significantly viewed.''
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(8) The ``Phantom Signals'' Dispute
For the past several years, the cable television and
content industries have taken different views on whether cable
providers should include certain signals that are not received
by every customer in the calculation of Section 111 royalty
obligations. Members of the cable industry argue that providers
should not have to pay for such signals because some consumers
do not receive them. Members of the content industry assert
that, under the law, all signals should be taken into account
in the royalty rate calculation. The Committee understands that
there are two different readings of the statute and that the
issue should be resolved to provide certainty to both
industries.
The legislation revises and updates subparagraphs (C) and
(D) of Section 111(d)(1) to resolve the so-called ``phantom
signal'' issue. Just as the current law allows subscriber group
calculations for ``partially local/partially distant''
situations, so too may cable systems use the subscriber group
methodology when calculating royalties for phantom signal
situations. Specifically, subparagraph (C) as amended states
that if a cable system provides secondary transmissions of
primary transmitters to some, but not all, communities served
by the cable system, the gross receipts and distant signal
equivalent values for each secondary transmission may be
derived on the basis of the subscribers in those communities
where the cable system actually provides such secondary
transmission. Where a cable system calculates its royalties on
such a community-specific (or ``subscriber group'') basis, the
system will apply the methodology in Section 111(d)(1)(B)(ii)-
(iv) to calculate a separate royalty for each subscriber group,
but will compute the minimum fee calculation called for by
Section 111(d)(1)(B)(i) on a system-wide basis (just as it
currently is calculated for purposes of Section
111(d)(1)(C)(ii)). For each accounting period in which such a
community-specific calculation is used, a system's total
royalty fee payment will be either the amount of the sum of the
subscriber-group-by-subscriber group royalty calculations or of
the system-wide minimum fee royalty calculation, whichever is
greater. This change shall not affect a cable system's
obligation to pay the minimum fee as appropriate.
Subparagraph (D) as amended provides that for any
accounting period prior to the enactment of the amendments in
subparagraph (C), a cable system's computation of its royalty
fee consistent with the methodology described in subparagraph
(C)(iii), or a cable system's use of such methodology on an
amendment of a statement originally filed before the date of
enactment will not be deemed actionable as an act of
infringement within the meaning of section 111(c)(2)(B)
provided, however, that the cable system shall not be entitled
to a refund or to an offset to any current or future royalty
payments in connection with the re-calculation of royalty fees
using such methodology contained in such amendment.
Finally, as a result of discussions among the parties
affected by the phantom signal issue that helped lead to broad
industry support for these amendments, certain cable operators
agreed to the payment of additional royalty amounts directly to
the Copyright Office for a 5-year period. These additional
royalty payments are addressed in new paragraph (6) of
subsection (d), which directs the Copyright Office to treat
them as part of the Section 111 base rate royalty pool
attributable to the period for which they are submitted. For
example, if the first such additional royalty payments are
submitted on the filing deadline for the first accounting
period of 2010 (i.e., August 29, 2010), the Office shall treat
such amounts as part of the base rate royalty pool for the
first accounting period of 2010 for deposit and distribution to
claimants using the existing procedures.
The legislation also revises and updates subparagraph (B)
of Section 111(d)(1) to adjust the royalty percentages payable
by cable systems that must compute their royalty payments in
accordance with subparagraph (B). The adjusted royalty
percentages become effective January 1, 2010 in lieu of any
adjustments in royalty percentages or gross receipts thresholds
that might have been made in 2010 pursuant to Sections
801(b)(2) and 804(b)(1). The schedule for future proceedings to
adjust the royalty percentages and gross receipt thresholds has
been revised so that the proceedings to determine the next such
adjustments are moved to 2015, with subsequent determinations
to be made every 5 years thereafter.
The Register of Copyrights will work closely with the
interested parties to minimize the administrative burden of
implementing the Act's provisions.
(9) Public Television
Currently, Section 119 does not permit satellite carriers
to retransmit state or public television network programming
throughout the state if some DMAs straddle state lines
(generally such DMAs may receive programming from one state or
the other depending on where the DMA is located, but not both).
State and public television network programming is often
intended for a statewide audience. The Committee believes that
given the public value of this type of programming, the
statutory license should not preclude satellite companies from
using distant signals to provide such state-specific
programming to the entire state audience. Consequently, the
legislation permits, but does not require, satellite carriers
to import state public television network signals into in-state
counties that are located in an out-of-state DMA, provided they
pay the associated royalty fees.
(10) Grandfathering
Some customers receive signals to which they would not be
entitled under the current law. This legislation continues the
practice of ``grandfathering'' these subscribers so that they
are not abruptly deprived of programming and services to which
they have become accustomed. The total number of so-called
``grandfathered'' households remains small.
Hearings
The Committee on the Judiciary held an oversight hearing
titled, ``Copyright Licensing in a Digital Age: Competition and
the Need to Update the Cable and Satellite TV Licenses,'' on
February 25, 2009. The purpose of the hearing was to assess the
Satellite Home Viewer Extension and Reauthorization Act of 2004
and begin formal consideration of what changes, if any, the
Committee should make to the law. Witnesses at the hearing
included the following: Marybeth Peters, United States Register
of Copyrights; Fritz Attaway, Executive Vice President, Motion
Picture Association of America; Bob Gabrielli, Senior Vice
President, DirecTV, Inc.; Chris Murray, Senior Counsel,
Consumer's Union; Kyle McSlarrow, President and CEO, National
Cable & Telecommunications Association; and David Rehr,
President and CEO, National Association of Broadcasters.
Charles W. Ergen, Chairman and CEO, DISH Network Corporation,
and Mike Mountford, CEO, National Programming Service,
submitted additional written testimony.
Committee Consideration
On September 16, 2009, the Committee met in open session
and ordered the bill H.R. 3570 favorably reported, without
amendment, by a rollcall vote of 34 to 0, a quorum being
present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.R. 3570:
1. Reporting the bill favorably. Approved 34-0.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman...................................... X
Mr. Berman...................................................... X
Mr. Boucher..................................................... X
Mr. Nadler......................................................
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Delahunt.................................................... X
Mr. Wexler......................................................
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Mr. Gutierrez................................................... X
Mr. Sherman.....................................................
Ms. Baldwin..................................................... X
Mr. Gonzalez....................................................
Mr. Weiner...................................................... X
Mr. Schiff...................................................... X
Ms. Sanchez..................................................... X
Ms. Wasserman Schultz........................................... X
Mr. Maffei...................................................... X
Mr. Smith, Ranking Member....................................... X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Issa........................................................
Mr. Forbes...................................................... X
Mr. King........................................................ X
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Rooney...................................................... X
Mr. Harper...................................................... X
-----------------------------------------------
Total....................................................... 34 0
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 3570, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 16, 2009.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3570, the
``Satellite Home Viewer Update and Reauthorization Act of
2009.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie,
who can be reached at 226-2860.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable Lamar S. Smith.
Ranking Member
H.R. 3570--Satellite Home Viewer Update and Reauthorization Act of
2009.
SUMMARY
Under current law, satellite and cable television carriers
pay royalty fees to the Copyright Office for the right to
transmit certain television signals to their subscribers. The
Copyright Office later distributes those fees to the owners of
copyrights on the transmitted material.
H.R. 3570 would amend and extend through December 31, 2014,
the requirement that satellite carriers pay royalty fees to the
Copyright Office for transmission of certain copyrighted
broadcasts. The bill also would change the calculation of
royalties that cable companies pay for the right to transmit
copyrighted material to their subscribers. (The requirement to
pay royalties for satellite transmissions is set to expire on
December 31, 2009; royalty fees for cable transmissions do not
expire). The bill also would authorize the Copyright Office to
charge filing fees to satellite and cable operators to offset
part of its cost to operate the royalty program.
CBO estimates that enacting the bill would increase
revenues by $633 million over the 2010-2019 period. With higher
royalty collections, the payments to copyright owners
(including interest earnings) also would increase, resulting in
an estimated increase in direct spending of $725 million over
the 2010-2019 period. Thus, the net impact on the Federal
budget would be an increase in the deficit of $92 million over
the over the same period. That net increase over the 10-year
period reflects the payment of interest, which accrues during
the period the royalties are held by the Copyright Office, in
addition to amounts collected in royalties.
H.R. 3570 would impose intergovernmental and private-sector
mandates, as defined in the Unfunded Mandates Reform Act
(UMRA), on satellite carriers, cable carriers, broadcasters,
and copyright holders. Based on information from industry
sources and the Copyright Office, CBO estimates that the
aggregate cost of complying with the mandates would not exceed
the annual thresholds established in UMRA for intergovernmental
or private-sector mandates ($69 million and $139 million in
2009, respectively, adjusted annually for inflation).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 3570 is shown in the
following table. The costs of this legislation fall within
budget function 370 (commerce and housing credit).
By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010-2014 2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Satellite Copyright Royalty
Fees 20 97 101 104 106 79 0 0 0 0 428 507
Cable Copyright Royalty
Fees 7 11 12 12 12 13 13 13 13 13 54 119
Copyright Office Filing Fees 0 0 0 1 1 1 1 1 1 1 2 7
Total Changes in
Revenues 27 108 113 117 119 93 14 14 14 14 484 633
CHANGES IN DIRECT SPENDING
Estimated Budget Authority 27 110 121 132 140 111 29 28 24 19 530 741
Estimated Outlays 1 16 14 39 72 108 132 132 112 99 142 725
NET EFFECT ON THE DEFICIT\1\
Estimated Impact on the
Deficit -26 -92 -99 -78 -47 15 118 118 98 85 -342 92
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Positive numbers represent an increase in the deficit; negative numbers represent a reduction in the deficit.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted before the end of December 2009 and that spending will
follow historical patterns for the program. The bill would
increase the collection of copyright royalty fees, which are
recorded in the budget as revenues. Those fees, plus interest
accrued between the time of collection and payment, would later
be paid to copyright owners.
Revenues
H.R. 3570 contains provisions that would increase Federal
revenues by increasing royalty collections and assessing new
fees on certain cable and satellite providers. Taken together,
CBO estimates that enacting H.R. 3570 would increase revenues
by $633 million over the 2010-2019 period.
Satellite Copyright Royalty Fees. H.R. 3570 would extend
through December 31, 2014, the requirement that satellite
carriers pay royalty fees to owners of copyrighted material to
retransmit that material to some of their subscribers. The
royalty is based on a flat fee charged for each subscriber that
receives the copyrighted transmissions. The bill would require
the Copyright Royalty Judges (CRJs) to set a new rate if the
affected parties cannot come to an agreement voluntarily; the
rate would be adjusted annually thereafter for increases in the
cost of living. The bill also would make a number of changes to
current law that would affect the number of households eligible
to receive transmissions for which royalty payments would be
due.
In fiscal year 2008, the Copyright Office collected about
$90 million in royalties from seven satellite carriers. Based
on information from the satellite industry and groups
representing copyright holders, CBO expects that the parties
would reach an agreement on new rates that would not result in
a significant increase in royalty collections. H.R. 3570 could
also affect royalty collections by increasing the number of
households that would be eligible to receive copyrighted
transmissions. Based on information from satellite providers,
CBO expects that royalty collections could increase by about 5
percent per year once the infrastructure is in place to
transmit the broadcasts to more households. We estimate that,
taken together, those changes would increase revenues by $507
million over the 2010-2019 period.
Cable Copyright Royalty Fees. Under current law, cable
companies pay a royalty fee to use copyrighted material based
on revenues collected from subscribers that are entitled to
receive the copyrighted material whether or not they receive
those broadcasts. H.R. 3570 would increase royalty rates set in
law and eliminate the requirement that copyright fees be paid
on revenue from subscribers that do not receive the copyrighted
material. The bill also would authorize the Copyright Office to
distribute any royalty payments received as the result of
private agreements reached between cable systems and copyright
holders.
In fiscal year 2008, the Copyright Office collected about
$150 million in royalties from cable television carriers on
revenues reported by approximately 5,000 cable systems. H.R.
3570 would increase the rate charged on those revenues by 5
percent. CBO estimates the higher royalty rate would increase
revenues by $119 million over the 2010-2019 period.
Copyright Office Filing Fees. H.R. 3570 would authorize the
Copyright Office to establish a new fee to be paid by satellite
and cable providers that report subscriber or revenue data
twice yearly with their royalty payments. The fees would be set
at a rate sufficient to cover a portion of the costs to
administer the licensing program; copyright holders pay the
full cost of the program under current law. Based on
information from the Copyright Office, CBO estimates that those
new filing fees would ultimately generate about $1 million per
year for a total of $7 million over the 2010-2019 period and
would increase direct spending by the same amount.
Penalties. H.R. 3570 would significantly increase the size
of the penalties that could be assessed for violations of rules
that restrict satellite transmissions to households that cannot
receive over-the-air network broadcasts that originate in their
local market. This increase could result in additional Federal
revenues when penalties are assessed for violations of the
territorial restrictions. Civil penalties are recorded as
revenues, however, CBO estimates that such revenue collections
would not be significant due to the small number of cases
expected to be involved.
Direct Spending
Royalty Payments with Interest. With higher satellite and
cable royalty collections under H.R. 3570, payments to
copyright holders also would increase. Under current law, CRJs
are responsible for determining the distribution of royalties
collected and for settling disputes over royalty claims.
Because the process relies on the copyright holders' agreement
on the allocation of the amount due, royalty collections can be
held by the Copyright Office for a number of years. Historical
spending patterns indicate that copyright holders generally
begin to receive payments several years after the revenues have
been collected. Thus, we estimate a significant lag between
increases in revenue collections and payments to copyright
holders.
Under current law, interest, which accrues on the
collections during the time they are held by the Copyright
Office, is paid to the copyright holders at the time the
royalties are distributed. Based on historical spending
patterns, CBO assumes that the royalties would be held for four
years, on average, before being distributed.
CBO estimates that increases in direct spending resulting
from increases in royalty collections would total $718 million
over the 2010-2019 period. Of that amount, approximately $90
million represents payments of accrued interest.
Filing Fees. Under current law, the full cost to administer
the royalty program is deducted from payments due to copyright
owners. As noted above, H.R. 3570 would authorize the Copyright
Office to charge cable and satellite carriers filing fees to
offset a portion of those administrative costs, in effect,
distributing the program costs between those paying the royalty
fees and those receiving the royalty distributions. This would
result in an increase in the amount of royalties paid to the
copyright holders because they would be covering a smaller
portion of the administrative costs. CBO estimates that this
provision would increase direct spending by $7 million over the
2010-2019 period.
Spending Subject to Appropriation
H.R. 3570 would require the Copyright Office to develop new
regulations to allow reports submitted to the Office to be
audited and to establish the new filing fees. In addition, the
Federal Communications Commission would be required to develop
a new model to determine the eligibility of households to
receive copyright-protected satellite signals in light of the
switch to digital broadcasting. Finally, the Department of
Homeland Security would be required to develop regulations that
would allow cable and satellite carriers to broadcast certain
material to Federal agencies in the event of an emergency.
Based on information from each agency, CBO estimates that
implementing those requirements would not have a significant
effect on spending subject to appropriation.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 3570 would impose intergovernmental and private-sector
mandates, as defined in UMRA, on satellite and cable carriers,
broadcasters, and copyright holders. Based on information from
industry sources and the Copyright Office, CBO estimates that
the aggregate cost of complying with the mandates would not
exceed the annual thresholds established in UMRA for
intergovernmental or private-sector mandates ($69 million and
$139 million in 2009, respectively, adjusted annually for
inflation).
Mandates that Apply to both Public and Private Entities
Secondary Transmission of Network Signals. The bill would
extend an existing mandate on satellite carriers and copyright
holders that requires them to participate in a process to set
royalty rates for certain types of transmissions. The bill also
would adjust some of the methods for determining subscribers'
eligibility for those transmissions. The requirement to
participate in the process is set to expire on December 31,
2009.
In the absence of the bill, royalty rates would be set in
the private market. Under the bill, satellite carriers, as
users of copyrighted materials, would not need specific
permission from copyright owners to retransmit those materials
to their eligible subscribers but would be required to pay
royalties and abide by certain conditions when using the
material. The bill would require satellite carriers and
copyright holders to negotiate in good faith to set royalty
rates. If a party objects to the rates set during the
negotiations, the bill would require CRJs to establish rates
that represent the fair market value. The cost of the mandate
to satellite carriers and copyright holders would be equal to
the difference between the royalties that would be set in the
absence of the bill and the royalties set during the process
required by the bill. Based on information from industry
sources and the Copyright Office, CBO expects that the parties
would reach an agreement on new rates that would not differ
significantly from the rates that would be set in the market.
Consequently, we estimate that the costs of complying with this
mandate would be small.
H.R. 3570 also would extend an existing mandate on
broadcasters and copyright holders to allow satellite providers
to retransmit network signals of certain stations without
paying royalties. Based on information from the Federal
Communications Commission and industry sources, CBO expects
that few subscribers would be eligible for such transmissions.
Therefore, CBO estimates that the cost to comply with the
mandate would be minimal.
Cable Royalty Rates. The bill would increase the royalties
that cable carriers pay for retransmitting the signals of
distant network stations by $54 million over the 2010-2014
period. Based on information from industry sources about the
number of cable carriers involved, CBO estimates that the cost
to public cable carriers of the royalties set in the bill would
total less than $3 million per year and that the cost to
private cable carriers would total no more than $12 million per
year.
Filing Fees. The bill would require satellite and cable
carriers to pay filing fees to the Copyright Office for any
royalty payments incurred from retransmitting distant network
signals. Based on information from the Copyright Office, CBO
estimates that the cost to satellite and cable carriers would
be $1 million per year beginning in 2013. At the same time, the
bill would direct the Copyright Office to reduce fees that
copyright holders pay under current law to register, renew, or
change a copyright in an amount equal to the fees to be paid by
satellite and cable carriers.
Broadcaster Audits. The bill would require satellite and
cable carriers to allow copyright holders to audit their
subscriber lists. Because such subscriber information is
already collected and maintained by satellite and cable
carriers, CBO estimates that the cost of complying with this
mandate would be minimal.
Retransmission to Certain Government Organizations During
Emergencies. The bill would limit the ability of copyright
owners to collect compensation when secondary transmissions of
copyrighted works are made for emergency purposes. CBO expects
that few such emergencies would occur and estimates that the
loss of compensation to copyright holders would be small.
Mandate that Applies to Private Entities Only
Satellite Reporting Requirements. The bill would require
satellite carriers to submit additional information about
subscribers that receive local retransmission of network
stations. Based on information from industry sources regarding
current industry practice and the availability of such
information, CBO estimates that the costs to comply would be
minimal.
ESTIMATE PREPARED BY
Federal Costs: Susan Willie
Impact on State, Local, and Tribal Governments: Elizabeth
Cove Delisle
Impact on the Private Sector: Sam Wice and Paige Piper/Bach
ESTIMATE APPROVED BY
Theresa Gullo: Deputy Assistant Director for Budget
Analysis
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
3570 amends and modernizes the compulsory copyright licenses
governing the retransmission of broadcast television signals
set forth in Sections 111, 119 and 122 of Chapter 17 of the
United States Code and reauthorizes the satellite license in
Section 119 for 5 more years.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in article I, section 8, clauses 3 and 8 of
the Constitution.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R.3570 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Short Title. Sets forth the short title of the bill
as SHVURA.
Sec. 2. Reference.
Sec. 3. Modifications to Statutory License for Satellite
Carriers.
Subsection (a) removes ``for private home viewing'' from
the heading to reflect the fact that the Act is no longer
limited to private homes and now extends to commercial
establishments, recreational vehicles, and other places. It
updates the table of contents.
Subsection (b) amends the definition of ``unserved
household'' in Section 119(d)(10)(A). It clarifies that a
household that does not receive a primary video signal from a
network within its local market is unserved for the purposes of
that network. The amended definition also provides that a
household receiving a qualified multicast from a network within
its local market will be considered served for the purpose of
that network. ``Qualified multicast'' is defined in subsection
(h). This subsection also grandfathers subscribers who were
lawfully receiving distant signals when this law is enacted.
Subsection (c) provides for a filing fee to help recoup
administrative costs of distributing royalty fees. The fee will
be set by the Copyright Office.
Subsection (d) permits satellite carriers to retransmit
programming that would otherwise be unavailable under the
license at the request of the Secretary of Homeland Security,
when necessary to help monitor and respond to a national
emergency. This new subsection also requires the Secretary of
Homeland Security to issue regulations governing these requests
and to annually report such use to Congress.
Subsection (e) will permit, but not require, satellite
carriers to import state public television network signals into
in-state counties that are located in an out-of-state DMA.
Without this provision, satellite carriers cannot transmit the
state or regional public television networks that are intended
to serve the entire state to markets that are in a different
DMA.
Subsection (f) grants an audit right to copyright owners so
they can verify the statements of account and royalty fees
submitted by satellite providers.
Subsection (g) amends Section 119(c), which sets forth the
procedure for determining royalty rates. Royalty rates can
either be set by voluntary agreement or by proceedings before
the Copyright Royalty Judges. The new rates will not be
automatically reduced as they were under the previous statute.
The provision now clarifies that fees should be established for
each digital stream of programming included in a multicast
transmission. The subsection also provides for a more efficient
annual cost of living adjustment by the Copyright Royalty
Judges. Technical changes in this section include the
elimination of the word analog, grammatical corrections, and
deletion of references to arbitration proceedings and the
Librarian of Congress.
Subsection (h) adds or clarifies the definition of the
following terms: ``subscriber,'' ``low power television
station,'' ``local market,'' ``noncommercial educational
broadcast station,'' ``multicast transmission,'' ``qualified
multicast video,'' and ``nonnetwork station.'' A ``multicast
transmission'' is a transmission by a television station that
contains more than one channel or digital stream, each
containing its own distinct programming. A ``qualified
multicast video'' is a multicast video that can render a
household served for the purpose of that network. A multicast
that a satellite carrier offers to its subscribers on July 1,
2009, and remains affiliated with the same network, will be
counted for purposes of determining if a household is served.
Any subsequent multicast streams will not render a household
served until January 1, 2013. After that date, no new
multicasts will be taken into account in the analysis of
whether a household is served.
Subsection (i) replaces the word ``superstation'' with the
word ``nonnetwork station'' throughout the statute because
``superstation'' has a different meaning in the licenses than
it has in communications law.
Subsection (j) amends the ``low power'' provision to
clarify that the Section 119 license requires payment for the
use of low-power signals when they are transmitted beyond the
area they would otherwise reach over the air (the so-called
``geographic restriction'').
Subsection (k) removes the ``significantly viewed''
provision from Section 119 (so it can be inserted into Section
122, as described below) and makes conforming amendments.
Subsection (l) includes a predictive model to be used for
digital signals, which shall be established by the FCC. This
subsection also makes changes to 119(a)(3) [formerly (a)(4)],
which grandfathers certain subscribers for distant signals. The
subsection removes the word ``analog'' from each place it
occurs and preserves the status quo so that subscribers who are
grandfathered before the act continue to be grandfathered after
the act. This subsection also increases the penalty for
violations of territorial restrictions by increasing the
maximum statutory damages from $5 to $250 per subscriber per
month during which the violation occurred, and changes the
maximum statutory damages for a regional or large-scale
violation (that does not trigger a permanent injunction or
``death penalty'') from $250,000 to $2.5M. This subsection also
removes all references to Section 509 of Title 17, because that
section was repealed last year.
Sec. 4. Modifications to Statutory License For Satellite
Carriers in Local Markets.
Subsection (a) changes the heading of Section 122 to
``Secondary Transmissions of Local Television Programming by
Satellite.''
Subsection (b) amends Section 122 to add the
``significantly viewed'' provision that this bill removes from
Section 119. The substance of the provision is essentially the
same, except the significantly viewed waiver does not have the
same sunset procedure. Low power stations are covered by the
122 license where they are rebroadcast within their geographic
limitations.
Subsection (c) adds the requirement to report all
subscribers receiving significantly viewed stations to the
networks. (The legislation moves these requirements from
Section 119 to Section 122).
Subsection (d) increases the statutory penalty for
individual violations of the Section 122 license from $5 to
$250 for each subscriber for each month during which the
violation occurred; it increases the statutory penalty for
regional or national violations of the license from $250,000 to
$2.5M.
Subsection (e) makes minor changes to the definitions
section, including adding the definition of ``low power
television station'' to Section 122.
Sec. 5. Modifications to Cable System Secondary
Transmission Rights Under Section 111.
Subsection (a) changes the title of Section 111 to reflect
the fact that the license concerns secondary transmissions used
in cable television.
Subsection (b) permits cable operators to retransmit
programming that would otherwise be unavailable under the
license at the request of the Secretary of Homeland Security,
when necessary to help monitor and respond to a national
emergency. This new subsection also requires the Secretary of
Homeland Security to issue regulations governing these requests
and to annually report such use to Congress. This language
parallels the language in Section 119.
Subsection (c) resolves the phantom signal ambiguity that
required cable systems to pay royalty fees for carriage to all
subscribers within the system. It allows a cable system that
provides transmissions of distant signals to some but not all
communities to calculate royalty fees on the basis of the
actual carriage of specific signals and the gross receipts
derived from the subscribers in the community. It slightly
raises the royalty rate that cable operators must pay to
content owners.
This subsection also provides for a filing fee to help
recoup administrative costs of distributing royalty fees. It
grants an audit right to copyright owners so they can verify
the statements of account and royalty fees submitted by the
cable operators. The Register of Copyrights will issue
regulations that structure the process to reflect the
particular requirements of auditing cable systems.
Subsection (d) amends and supplements the terms defined in
the statute to correct errors, describe new technologies and
reflect alterations to the royalty structure. The term
``distant signal equivalent'' is updated to reflect the digital
transition and emergence of multicasting.
Subsection (e) changes the date of the next inflation
adjustment (which would have occurred in 2010), because the
rates have already been increased in subsection (c).
Subsection (f) makes technical and conforming amendments,
including providing numbers for paragraphs that had been left
undesignated in the previous statute and making grammatical
corrections.
Sec. 6. Certain Waivers Granted to Providers of Local-Into-
Local Service for All DMAs.
This section waives the injunction precluding a previously-
enjoined satellite carrier (DISH Network) from using the
Section 119 license, on the condition that the carrier provides
local-into-local service in all 210 designated market areas or
DMAs (defined as 90 percent of all households in each DMA).
This subsection does not lift or alter the penalties for
abusing the license that exist elsewhere in the statute. The
waiver lasts only as long as the carrier continues to provide
service in all 210 markets and abide by all other requirements
of the license.
It outlines the procedure by which the carrier must obtain
permission to use the license on a temporary basis to enter all
210 television markets. During this preliminary period, the
carrier will have limited access to the license for the
exclusive purpose of providing a full complement of programming
to any `short market'' to which the carrier is providing local-
into-local service for the first time. A ``short market'' lacks
one or more necessary affiliates. This limited temporary waiver
can only be issued once and will expire within 120 days of its
issuance unless the court finds good cause to extend the
temporary waiver.
Once the carrier is providing local-into-local service in
all 210 DMAs, it will file a statement of eligibility with the
court that imposed the injunction. This statement shall include
a certification issued by the Federal Communications Commission
stating that the carrier is providing a good quality signal to
90 percent of the households in each DMA.
The subsection also outlines the mechanism by which the
carrier's establishment of service to all 210 markets can be
challenged. It sets out the penalties that the court will
impose for willful noncompliance, including the revocation of
the license and substantial monetary penalties. It sets forth
the burden of proof for initial and subsequent compliance
proceedings.
Sec. 7. Sunset of the Section 119 License.
This section provides for the expiration of the Section 119
license on December 31, 2014.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 17, UNITED STATES CODE
* * * * * * *
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT
Sec.
101. Definitions.
* * * * * * *
[111. Limitations on exclusive rights: Secondary transmissions.]
111. Limitations on exclusive rights: Secondary transmissions of
television programming by cable.
* * * * * * *
[119. Limitations on exclusive rights: Secondary transmissions of
superstations and network stations for private home viewing.]
119. Limitations on exclusive rights: Secondary transmissions of distant
television programming by satellite.
* * * * * * *
[122. Limitations on exclusive rights: Secondary transmissions by
satellite carriers within local markets.]
122. Limitations on exclusive rights: Secondary transmissions of local
television programming by satellite.
* * * * * * *
Sec. 111. Limitations on exclusive rights: Secondary transmissions of
television programming by cable
(a) Certain Secondary Transmissions Exempted.--The
secondary transmission of a performance or display of a work
embodied in a primary transmission is not an infringement of
copyright if--
(1) * * *
(2) the secondary transmission is made solely for
the purpose and under the conditions specified by
[clause] paragraph (2) of section 110; or
(3) the secondary transmission is made by any
carrier who has no direct or indirect control over the
content or selection of the primary transmission or
over the particular recipients of the secondary
transmission, and whose activities with respect to the
secondary transmission consist solely of providing
wires, cables, or other communications channels for the
use of others: Provided, That the provisions of this
[clause] paragraph extend only to the activities of
said carrier with respect to secondary transmissions
and do not exempt from liability the activities of
others with respect to their own primary or secondary
transmissions;
(4) the secondary transmission is made by a
satellite carrier pursuant to a statutory license under
section 119[; or] or section 122;
(5) the secondary transmission is not made by a
cable system but is made by a governmental body, or
other nonprofit organization, without any purpose of
direct or indirect commercial advantage, and without
charge to the recipients of the secondary transmission
other than assessments necessary to defray the actual
and reasonable costs of maintaining and operating the
secondary transmission service[.]; or
(6) the secondary transmission is made by a cable
system for emergency preparation, response, or recovery
as described under subsection (g).
* * * * * * *
(c) Secondary Transmissions by Cable Systems.--
(1) Subject to the provisions of [clauses]
paragraphs (2), (3), and (4) of this subsection and
section 114(d), secondary transmissions to the public
by a cable system of a performance or display of a work
embodied in a primary transmission made by a broadcast
station licensed by the Federal Communications
Commission or by an appropriate governmental authority
of Canada or Mexico shall be subject to statutory
licensing upon compliance with the requirements of
subsection (d) where the carriage of the signals
comprising the secondary transmission is permissible
under the rules, regulations, or authorizations of the
Federal Communications Commission.
(2) Notwithstanding the provisions of [clause]
paragraph (1) of this subsection, the willful or
repeated secondary transmission to the public by a
cable system of a primary transmission made by a
broadcast station licensed by the Federal
Communications Commission or by an appropriate
governmental authority of Canada or Mexico and
embodying a performance or display of a work is
actionable as an act of infringement under section 501,
and is fully subject to the remedies provided by
sections 502 through 506, in the following cases:
(A) * * *
* * * * * * *
(3) Notwithstanding the provisions of [clause]
paragraph (1) of this subsection and subject to the
provisions of subsection (e) of this section, the
secondary transmission to the public by a cable system
of a performance or display of a work embodied in a
primary transmission made by a broadcast station
licensed by the Federal Communications Commission or by
an appropriate governmental authority of Canada or
Mexico is actionable as an act of infringement under
section 501, and is fully subject to the remedies
provided by sections 502 through 506 and section 510,
if the content of the particular program in which the
performance or display is embodied, or any commercial
advertising or station announcements transmitted by the
primary transmitter during, or immediately before or
after, the transmission of such program, is in any way
willfully altered by the cable system through changes,
deletions, or additions, except for the alteration,
deletion, or substitution of commercial advertisements
performed by those engaged in television commercial
advertising market research: Provided, That the
research company has obtained the prior consent of the
advertiser who has purchased the original commercial
advertisement, the television station broadcasting that
commercial advertisement, and the cable system
performing the secondary transmission: And provided
further, That such commercial alteration, deletion, or
substitution is not performed for the purpose of
deriving income from the sale of that commercial time.
(4) Notwithstanding the provisions of [clause]
paragraph (1) of this subsection, the secondary
transmission to the public by a cable system of a
performance or display of a work embodied in a primary
transmission made by a broadcast station licensed by an
appropriate governmental authority of Canada or Mexico
is actionable as an act of infringement under section
501, and is fully subject to the remedies provided by
sections 502 through 506, if (A) with respect to
Canadian signals, the community of the cable system is
located more than 150 miles from the United States-
Canadian border and is also located south of the forty-
second parallel of latitude, or (B) with respect to
Mexican signals, the secondary transmission is made by
a cable system which received the primary transmission
by means other than direct interception of a free space
radio wave emitted by such broadcast television
station, unless prior to April 15, 1976, such cable
system was actually carrying, or was specifically
authorized to carry, the signal of such foreign station
on the system pursuant to the rules, regulations, or
authorizations of the Federal Communications
Commission.
(d) Statutory License for Secondary Transmissions by Cable
Systems.--
(1) [A cable system whose secondary] Statement of
account and royalty fees.--A cable system whose
secondary transmissions have been subject to statutory
licensing under subsection (c) shall, on a semiannual
basis, deposit with the Register of Copyrights, in
accordance with requirements that the Register shall
prescribe [by regulation--] by regulation the
following:
(A) [a statement of account] A statement of
account, covering the six months next
preceding, specifying the number of channels on
which the cable system made secondary
transmissions to its subscribers, the names and
locations of all primary transmitters whose
transmissions were further transmitted by the
cable system, the total number of subscribers,
the gross amounts paid to the cable system for
the basic service of providing secondary
transmissions of primary broadcast
transmitters, and such other data as the
Register of Copyrights may from time to time
prescribe by regulation. In determining the
total number of subscribers and the gross
amounts paid to the cable system for the basic
service of providing secondary transmissions of
primary broadcast transmitters, the system
shall not include subscribers and amounts
collected from subscribers receiving secondary
transmissions pursuant to section 119. Such
statement shall also include a special
statement of account covering any [nonnetwork]
non-network television programming that was
carried by the cable system in whole or in part
beyond the local service area of the primary
transmitter, under rules, regulations, or
authorizations of the Federal Communications
Commission permitting the substitution or
addition of signals under certain
circumstances, together with logs showing the
times, dates, stations, and programs involved
in such substituted or added carriage[; and].
[(B) except in the case of a cable system
whose royalty is specified in subclause (C) or
(D), a total royalty fee for the period covered
by the statement, computed on the basis of
specified percentages of the gross receipts
from subscribers to the cable service during
said period for the basic service of providing
secondary transmissions of primary broadcast
transmitters, as follows:
[(i) 0.675 of 1 per centum of such
gross receipts for the privilege of
further transmitting any non-network
programming of a primary transmitter in
whole or in part beyond the local
service area of such primary
transmitter, such amount to be applied
against the fee, if any, payable
pursuant to paragraphs (ii) through
(iv);
[(ii) 0.675 of 1 per centum of such
gross receipts for the first distant
signal equivalent;
[(iii) 0.425 of 1 per centum of
such gross receipts for each of the
second, third, and fourth distant
signal equivalents;
[(iv) 0.2 of 1 per centum of such
gross receipts for the fifth distant
signal equivalent and each additional
distant signal equivalent thereafter;
and
in computing the amounts payable under
paragraphs (ii) through (iv), above, any
fraction of a distant signal equivalent shall
be computed at its fractional value and, in the
case of any cable system located partly within
and partly without the local service area of a
primary transmitter, gross receipts shall be
limited to those gross receipts derived from
subscribers located without the local service
area of such primary transmitter; and
[(C) if the actual gross receipts paid by
subscribers to a cable system for the period
covered by the statement for the basic service
of providing secondary transmissions of primary
broadcast transmitters total $80,000 or less,
gross receipts of the cable system for the
purpose of this subclause shall be computed by
subtracting from such actual gross receipts the
amount by which $80,000 exceeds such actual
gross receipts, except that in no case shall a
cable system's gross receipts be reduced to
less than $3,000. The royalty fee payable under
this subclause shall be 0.5 of 1 per centum,
regardless of the number of distant signal
equivalents, if any; and
[(D) if the actual gross receipts paid by
subscribers to a cable system for the period
covered by the statement, for the basic service
of providing secondary transmissions of primary
broadcast transmitters, are more than $80,000
but less than $160,000, the royalty fee payable
under this subclause shall be (i) 0.5 of 1 per
centum of any gross receipts up to $80,000; and
(ii) 1 per centum of any gross receipts in
excess of $80,000 but less than $160,000,
regardless of the number of distant signal
equivalents, if any.]
(B) Except in the case of a cable system
whose royalty is specified in subparagraph (E)
or (F), a total royalty fee for the period
covered by the statement, computed on the basis
of specified percentages of the gross receipts
from subscribers to the cable service during
such period for the basic service of providing
secondary transmissions of primary broadcast
transmitters, as follows:
(i) 1.064 percent of such gross
receipts for the privilege of further
transmitting, beyond the local service
area of such primary transmitter, any
non-network programming of a primary
transmitter in whole or in part, such
amount to be applied against the fee,
if any, payable pursuant to clauses
(ii) through (iv);
(ii) 1.064 percent of such gross
receipts for the first distant signal
equivalent;
(iii) 0.701 percent of such gross
receipts for each of the second, third,
and fourth distant signal equivalents;
and
(iv) 0.330 percent of such gross
receipts for the fifth distant signal
equivalent and each distant signal
equivalent thereafter.
(C) In computing amounts under clauses (ii)
through (iv) of subparagraph (B)--
(i) any fraction of a distant
signal equivalent shall be computed at
its fractional value;
(ii) in the case of any cable
system located partly within and partly
outside of the local service area of a
primary transmitter, gross receipts
shall be limited to those gross
receipts derived from subscribers
located outside of the local service
area of such primary transmitter; and
(iii) if a cable system provides a
secondary transmission of a primary
transmitter to some but not all
communities served by that cable
system--
(I) the gross receipts and
the distant signal equivalent
values for such secondary
transmission shall be derived
solely on the basis of the
subscribers in those
communities where the cable
system provides such secondary
transmission; and
(II) the total royalty fee
for the period paid by such
system shall not be less than
the royalty fee calculated
under subparagraph (B)(i)
multiplied by the gross
receipts from all subscribers
to the system.
(D) A cable system that, on a statement
submitted before the date of the enactment of
the Satellite Home Viewer Update and
Reauthorization Act of 2009, computed its
royalty fee consistent with the methodology
under subparagraph (C)(iii) or that amends a
statement filed before such date of enactment
to compute the royalty fee due using such
methodology shall not be subject to an action
for infringement, or eligible for any royalty
refund or offset, arising out of its use of
such methodology on such statement.
(E) If the actual gross receipts paid by
subscribers to a cable system for the period
covered by the statement for the basic service
of providing secondary transmissions of primary
broadcast transmitters total $263,800 or less--
(i) gross receipts of the cable
system for the purpose of this
paragraph shall be computed by
subtracting from such actual gross
receipts the amount by which $263,800
exceeds such actual gross receipts,
except that in no case shall a cable
system's gross receipts be reduced to
less than $10,400; and
(ii) the royalty fee payable under
this paragraph shall be 0.5 percent,
regardless of the number of distant
signal equivalents, if any.
(F) If the actual gross receipts paid by
subscribers to a cable system for the period
covered by the statement for the basic service
of providing secondary transmissions of primary
broadcast transmitters are more than $263,800
but less than $527,600, the royalty fee payable
under this paragraph shall be--
(i) 0.5 percent of any gross
receipts up to $263,800, regardless of
the number of distant signal
equivalents, if any; and
(ii) 1 percent of any gross
receipts in excess of $263,800, but
less than $527,600, regardless of the
number of distant signal equivalents,
if any.
(G) A filing fee, as determined by the
Register of Copyrights pursuant to section
708(a).
(2) [The Register of Copyrights] Handling of
fees.--The Register of Copyrights shall receive
(including the filing fee specified in paragraph
(1)(G)) all fees deposited under this section and,
after deducting the reasonable costs incurred by the
Copyright Office under this section, shall deposit the
balance in the Treasury of the United States, in such
manner as the Secretary of the Treasury directs. All
funds held by the Secretary of the Treasury shall be
invested in interest-bearing United States securities
for later distribution with interest by the Librarian
of Congress upon authorization by the Copyright Royalty
Judges.
(3) [The royalty fees] Distribution of royalty fees
to copyright owners.--The royalty fees thus deposited
shall, in accordance with the procedures provided by
clause (4), be distributed to those among the following
copyright owners who claim that their works were the
subject of secondary transmissions by cable systems
during the relevant semiannual period:
(A) [any such] Any such owner whose work
was included in a secondary transmission made
by a cable system of a [nonnetwork] non-network
television program in whole or in part beyond
the local service area of the primary
transmitter[; and].
(B) [any such] Any such owner whose work
was included in a secondary transmission
identified in a special statement of account
deposited under clause (1)(A)[;].
(C) [any such] Any such owner whose work
was included in [nonnetwork] non-network
programming consisting exclusively of aural
signals carried by a cable system in whole or
in part beyond the local service area of the
primary transmitter of such programs.
(4) [The royalty fees] Procedures for royalty fee
distribution.--The royalty fees thus deposited shall be
distributed in accordance with the following
procedures:
(A) * * *
* * * * * * *
(5) Verification of accounts and fee payments.--The
Register of Copyrights shall issue regulations to
provide for the confidential verification and audit of
the information reported on the semi-annual statement
of account filed after the date of the enactment of the
Satellite Home Viewer Update and Reauthorization Act of
2009. The regulations shall provide for a single
verification procedure, with respect to the semi-annual
statements of account filed by a cable system, to be
conducted by a qualified independent auditor on behalf
of all copyright owners whose works were the subject of
a secondary transmission to the public by a cable
system of a performance or display of a work embodied
in a primary transmission and for a mechanism to review
and cure defects identified by any such audit.
(6) Acceptance of additional deposits.--Any royalty
fee payments received by the Copyright Office from
cable systems for the secondary transmission of primary
transmissions that are in addition to the payments
calculated and deposited in accordance with this
subsection shall be deemed to have been deposited for
the particular accounting period for which they are
received and shall be distributed as specified under
this subsection.
(e) Nonsimultaneous Secondary Transmissions by Cable
Systems.--
(1) Notwithstanding those provisions of the [second
paragraph of subsection (f)] subsection (f)(2) relating
to nonsimultaneous secondary transmissions by a cable
system, any such transmissions are actionable as an act
of infringement under section 501, and are fully
subject to the remedies provided by sections 502
through 506 and section 510, unless--
(A) the program on the videotape is
transmitted no more than one time to the cable
system's subscribers; [and]
(B) the copyrighted program, episode, or
motion picture videotape, including the
commercials contained within such program,
episode, or picture, is transmitted without
deletion or editing; [and]
(C) an owner or officer of the cable system
(i) prevents the duplication of the videotape
while in the possession of the system, (ii)
prevents unauthorized duplication while in the
possession of the facility making the videotape
for the system if the system owns or controls
the facility, or takes reasonable precautions
to prevent such duplication if it does not own
or control the facility, (iii) takes adequate
precautions to prevent duplication while the
tape is being transported, and (iv) subject to
[clause] paragraph (2), erases or destroys, or
causes the erasure or destruction of, the
videotape; [and]
(D) within forty-five days after the end of
each calendar quarter, an owner or officer of
the cable system executes an affidavit
attesting (i) to the steps and precautions
taken to prevent duplication of the videotape,
and (ii) subject to [clause] paragraph (2), to
the erasure or destruction of all videotapes
made or used during such quarter; [and]
(E) such owner or officer places or causes
each such affidavit, and affidavits received
pursuant to [clause] paragraph (2)(C), to be
placed in a file, open to public inspection, at
such system's main office in the community
where the transmission is made or in the
nearest community where such system maintains
an office; and
(F) the nonsimultaneous transmission is one
that the cable system would be authorized to
transmit under the rules, regulations, and
authorizations of the Federal Communications
Commission in effect at the time of the
nonsimultaneous transmission if the
transmission had been made simultaneously,
except that this [subclause] subparagraph shall
not apply to inadvertent or accidental
transmissions.
(2) If a cable system transfers to any person a
videotape of a program nonsimultaneously transmitted by
it, such transfer is actionable as an act of
infringement under section 501, and is fully subject to
the remedies provided by sections 502 through 506,
except that, pursuant to a written, nonprofit contract
providing for the equitable sharing of the costs of
such videotape and its transfer, a videotape
nonsimultaneously transmitted by it, in accordance with
[clause] paragraph (1), may be transferred by one cable
system in Alaska to another system in Alaska, by one
cable system in Hawaii permitted to make such
nonsimultaneous transmissions to another such cable
system in Hawaii, or by one cable system in Guam, the
Northern Mariana Islands, the Federated States of
Micronesia, the Republic of Palau, or the Republic of
the Marshall Islands, to another cable system in any of
those [three territories] five entities, if--
(A) each such contract is available for
public inspection in the offices of the cable
systems involved, and a copy of such contract
is filed, within thirty days after such
contract is entered into, with the Copyright
Office (which Office shall make each such
contract available for public inspection);
[and]
(B) the cable system to which the videotape
is transferred complies with [clause] paragraph
(1)(A), (B), (C)(i), (iii), and (iv), and (D)
through (F); and
(C) such system provides a copy of the
affidavit required to be made in accordance
with [clause] paragraph (1)(D) to each cable
system making a previous nonsimultaneous
transmission of the same videotape.
* * * * * * *
(4) As used in this subsection, the term
``videotape'' [, and each of its variant forms,] means
the reproduction of the images and sounds of a program
or programs broadcast by a television broadcast station
licensed by the Federal Communications Commission,
regardless of the nature of the material objects, such
as tapes or films, in which the reproduction is
embodied.
(f) Definitions.--As used in this section, the following
terms [and their variant forms] mean the following:
[A ``primary transmission'' is a transmission]
(1) Primary transmission.--A ``primary
transmission'' is a transmission, including a multicast
transmission, made to the public by the transmitting
facility whose signals are being received and further
transmitted by the secondary transmission service,
regardless of where or when the performance or display
was first transmitted.
[A ``secondary transmission'']
(2) Secondary transmission.--A ``secondary
transmission'' is the further transmitting of a primary
transmission simultaneously with the primary
transmission, or nonsimultaneously with the primary
transmission if by a [``cable system''] cable system
not located in whole or in part within the boundary of
the forty-eight contiguous States, Hawaii, or Puerto
Rico: Provided, however, That a nonsimultaneous further
transmission by a cable system located in Hawaii of a
primary transmission shall be deemed to be a secondary
transmission if the carriage of the television
broadcast signal comprising such further transmission
is permissible under the rules, regulations, or
authorizations of the Federal Communications
Commission.
[A ``cable system'']
(3) Cable system.--A ``cable system'' is a
facility, located in any State, [Territory, Trust
Territory, or Possession] territory, trust territory,
or possession of the United States, that in whole or in
part receives signals transmitted or programs broadcast
by one or more television broadcast stations licensed
by the Federal Communications Commission, and makes
secondary transmissions of such signals or programs by
wires, cables, microwave, or other communications
channels to subscribing members of the public who pay
for such service. For purposes of determining the
royalty fee under subsection (d)(1), two or more cable
systems in contiguous communities under common
ownership or control or operating from one headend
shall be considered as one system.
[The ``local service area of a primary
transmitter'']
(4) Local service area of a primary transmitter.--
The ``local service area of a primary transmitter'', in
the case of a television broadcast station, comprises
the area in which such station is entitled to insist
upon its signal being retransmitted by a cable system
pursuant to the rules, regulations, and authorizations
of the Federal Communications Commission in effect on
April 15, 1976, or such station's television market as
defined in section 76.55 (e) of title 47, Code of
Federal Regulations (as in effect on September 18,
1993), or any modifications to such television market
made, on or after September 18, 1993, pursuant to
section 76.55(e) or [76.59 of title 47 of the Code of
Federal Regulations] 76.59 of title 47, Code of Federal
Regulations, or within the noise-limited contour as
defined in 73.622(e)(1) of title 47, Code of Federal
Regulations, or in the case of a television broadcast
station licensed by an appropriate governmental
authority of Canada or Mexico, the area in which it
would be entitled to insist upon its signal being
retransmitted if it were a television broadcast station
subject to such rules, regulations, and authorizations.
In the case of a low power television station, [as
defined by the rules and regulations of the Federal
Communications Commission,] the ``local service area of
a primary transmitter'' comprises the area within 35
miles of the transmitter site, except that in the case
of such a station located in a standard metropolitan
statistical area which has one of the 50 largest
populations of all standard metropolitan statistical
areas (based on the 1980 decennial census of population
taken by the Secretary of Commerce), the number of
miles shall be 20 miles. The ``local service area of a
primary transmitter'', in the case of a radio broadcast
station, comprises the primary service area of such
station, pursuant to the rules and regulations of the
Federal Communications Commission.
[A ``distant signal equivalent'' is the value
assigned to the secondary transmission of any
nonnetwork television programming carried by a cable
system in whole or in part beyond the local service
area of the primary transmitter of such programming. It
is computed by assigning a value of one to each
independent station and a value of one-quarter to each
network station and noncommercial educational station
for the nonnetwork programming so carried pursuant to
the rules, regulations, and authorizations of the
Federal Communications Commission. The foregoing values
for independent, network, and noncommercial educational
stations are subject, however, to the following
exceptions and limitations. Where the rules and
regulations of the Federal Communications Commission
require a cable system to omit the further transmission
of a particular program and such rules and regulations
also permit the substitution of another program
embodying a performance or display of a work in place
of the omitted transmission, or where such rules and
regulations in effect on the date of enactment of this
Act permit a cable system, at its election, to effect
such deletion and substitution of a nonlive program or
to carry additional programs not transmitted by primary
transmitters within whose local service area the cable
system is located, no value shall be assigned for the
substituted or additional program; where the rules,
regulations, or authorizations of the Federal
Communications Commission in effect on the date of
enactment of this Act permit a cable system, at its
election, to omit the further transmission of a
particular program and such rules, regulations, or
authorizations also permit the substitution of another
program embodying a performance or display of a work in
place of the omitted transmission, the value assigned
for the substituted or additional program shall be, in
the case of a live program, the value of one full
distant signal equivalent multiplied by a fraction that
has as its numerator the number of days in the year in
which such substitution occurs and as its denominator
the number of days in the year. In the case of a
station carried pursuant to the late-night or specialty
programming rules of the Federal Communications
Commission, or a station carried on a part-time basis
where full-time carriage is not possible because the
cable system lacks the activated channel capacity to
retransmit on a full-time basis all signals which it is
authorized to carry, the values for independent,
network, and noncommercial educational stations set
forth above, as the case may be, shall be multiplied by
a fraction which is equal to the ratio of the broadcast
hours of such station carried by the cable system to
the total broadcast hours of the station.]
(5) Distant signal equivalent.--
(A) In general.--Except as provided under
subparagraph (B), a ``distant signal
equivalent''--
(i) is the value assigned to the
secondary transmission of any non-
network television programming carried
by a cable system in whole or in part
beyond the local service area of the
primary transmitter of such
programming; and
(ii) is computed by assigning a
value of one to each channel or digital
stream carrying independent television
programming, and a value of one-quarter
to each channel or digital stream
carrying network television programming
or noncommercial educational television
programming transmitted by a television
broadcast station pursuant to the
rules, regulations, and authorizations
of the Federal Communications
Commission.
(B) Exceptions.--The values for
independent, network, and noncommercial
educational programming specified in
subparagraph (A) are subject to the following:
(i) Where the rules and regulations
of the Federal Communications
Commission require a cable system to
omit the further transmission of a
particular program and such rules and
regulations also permit the
substitution of another program
embodying a performance or display of a
work in place of the omitted
transmission, or where such rules and
regulations in effect on the date of
enactment of the Copyright Act of 1976
permit a cable system, at its election,
to effect such omission and
substitution of a nonlive program or to
carry additional programs not
transmitted by primary transmitters
within whose local service area the
cable system is located, no value shall
be assigned for the substituted or
additional program.
(ii) Where the rules, regulations,
or authorizations of the Federal
Communications Commission in effect on
the date of enactment of the Copyright
Act of 1976 permit a cable system, at
its election, to omit the further
transmission of a particular program
and such rules, regulations, or
authorizations also permit the
substitution of another program
embodying a performance or display of a
work in place of the omitted
transmission, the value assigned for
the substituted or additional program
shall be, in the case of a live
program, the value of one full distant
signal equivalent multiplied by a
fraction that has as its numerator the
number of days in the year in which
such substitution occurs and as its
denominator the number of days in the
year.
(iii) In the case of a channel or
digital stream carried pursuant to the
late-night or specialty programming
rules of the Federal Communications
Commission, or a channel or digital
stream carried on a part-time basis
where full-time carriage is not
possible because the cable system lacks
the activated channel capacity to
retransmit on a full-time basis all
signals that it is authorized to carry,
the values for independent, network,
and noncommercial educational
programming set forth in subparagraph
(A), as the case may be, shall be
multiplied by a fraction that is equal
to the ratio of the broadcast hours of
such channel or digital stream carried
by the cable system to the total
broadcast hours of the channel or
digital stream.
[A ``network station'']
(6) Network station.--
(A) In general.--A ``network station'' is a
television broadcast station that is owned or
operated by, or affiliated with, one or more of
the television networks in the United States
providing nationwide transmissions, and that
transmits a substantial part of the programming
supplied by such networks for a substantial
part of that station's typical broadcast day.
(B) Network programming.--The term
``network television programming'' means
programming that is transmitted by a network
station.
[An ``independent station'' is a commercial
television broadcast station other than a network
station.
[A ``noncommercial educational station'' is a
television station that is a noncommercial educational
broadcast station as defined in section 397 of title
47.]
(7) Independent station.--
(A) In general.--An ``independent station''
is a commercial television broadcast station
other than a network station.
(B) Independent programming.--The term
``independent television programming'' means
all programming other than ``network television
programming'' or ``noncommercial educational
television programming''.
(8) Noncommercial educational station.--
(A) In general.--A ``noncommercial
educational station'' is a television or radio
broadcast station that--
(i) under the rules and regulations
of the Federal Communications
Commission in effect on November 2,
1978, is eligible to be licensed by the
Federal Communications Commission as a
noncommercial educational radio or
television broadcast station and that
is owned and operated by a public
agency or nonprofit private foundation,
corporation, or association; or
(ii) is owned and operated by a
municipality and that transmits only
noncommercial programs for education
purposes.
(B) Noncommercial educational
programming.--The term ``noncommercial
educational television programming'' means
programming that is transmitted by a
noncommercial educational station.
(9) Multicast transmission.--A ``multicast
transmission'' is a transmission by a television
station that contains more than one channel or digital
stream, each containing its own distinct programming.
(10) Subscriber.--The term ``subscriber'' means a
person or entity that receives a secondary transmission
service from a cable system and pays a fee for the
service, directly or indirectly, to the cable system.
(g) Retransmission for Emergency Preparation, Response, or
Recovery.--
(1) Authority.--For purposes of subsection (a)(6),
a secondary transmission by a cable system of a
performance or display of a work embodied in a primary
transmission by a television broadcast station is made
for emergency preparation, response, or recovery if
such transmission is made--
(A) by a cable system to a Federal
governmental body designated by the Secretary
of Homeland Security or an organization
established with the purpose of carrying out a
system of national and international relief
efforts and chartered under section 300101 of
title 36;
(B) to officers or employees of such body
or such organization as a part of the official
duties or employment of such officers or
employees;
(C) at the request of the Secretary of
Homeland Security; and
(D) for the sole purpose of preparing for,
responding to, or recovering from an emergency
described under paragraph (2).
(2) Emergencies.--An emergency is described under
this paragraph if the Secretary of Homeland Security
identifies such emergency as a major disaster, a
catastrophic incident, an act of terrorism, or a
transportation security incident.
(3) Regulations.--Not later than 6 months after the
date of the enactment of this subsection, the Secretary
of Homeland Security shall issue regulations to protect
copyright owners by preventing the unauthorized access
to the secondary transmissions described in paragraph
(1).
(4) Reports to congressional committees.--Not later
than one year after the date of the enactment of this
subsection and by September 30 of each year thereafter,
the Secretary of Homeland Security shall submit a
report to the Committee on the Judiciary and the
Committee on Homeland Security of the House of
Representatives and the Committee on the Judiciary of
the Senate describing--
(A) the manner in which the authority
granted under paragraph (1) is being used; and
(B) any additional legislative
recommendations the Secretary may have.
(5) Definitions.--As used in this subsection:
(A) Terrorism.--The term ``terrorism'' has
the meaning given that term in section 2(16) of
the Homeland Security Act of 2002 (6 U.S.C.
101(16)).
(B) Transportation security incident.--The
term ``transportation security incident'' has
the meaning given that term in section 70101 of
title 46.
(C) Catastrophic incident.--The term
``catastrophic incident'' means any natural
disaster, act of terrorism, or other man-made
disaster that results in extraordinary levels
of casualties or damage or disruption severely
affecting the population (including mass
evacuations), infrastructure, the environment,
the economy, national morale, or government
functions in a geographic area.
(6) Effective date.--This subsection shall take
effect with respect to a secondary transmission
described under paragraph (1) that is made after the
end of the 30-day period beginning on the effective
date of the regulations issued by the Secretary of
Homeland Security under paragraph (3).
* * * * * * *
Sec. 119. Limitations on exclusive rights: Secondary transmissions of
[Superstations and network stations for private
home viewing] distant television programming by
satellite
(a) Secondary Transmissions by Satellite Carriers.--
(1) [Superstations] Non-network stations.--Subject
to the provisions of paragraphs [(5), (6), and (8)]
(4), (5), and (7) of this subsection and section
114(d), secondary transmissions of a performance or
display of a work embodied in a primary transmission
made by a [superstation] non-network station shall be
subject to statutory licensing under this section if
the secondary transmission is made by a satellite
carrier to the public for private home viewing or for
viewing in a commercial establishment, with regard to
secondary transmissions the satellite carrier is in
compliance with the rules, regulations, or
authorizations of the Federal Communications Commission
governing the carriage of television broadcast station
signals, and the carrier makes a direct or indirect
charge for each retransmission service to each
subscriber receiving the secondary transmission or to a
distributor that has contracted with the carrier for
direct or indirect delivery of the secondary
transmission to the public for private home viewing or
for viewing in a commercial establishment.
(2) Network stations.--
(A) In general.--Subject to the provisions
of subparagraphs (B) and (C) of this paragraph
and [paragraphs (5), (6), (7), and (8)]
paragraphs (4), (5), (6), and (7) of this
subsection and section 114(d), secondary
transmissions of a performance or display of a
work embodied in a primary transmission made by
a network station shall be subject to statutory
licensing under this section if the secondary
transmission is made by a satellite carrier to
the public for private home viewing, with
regard to secondary transmissions the satellite
carrier is in compliance with the rules,
regulations, or authorizations of the Federal
Communications Commission governing the
carriage of television broadcast station
signals, and the carrier makes a direct or
indirect charge for such retransmission service
to each subscriber receiving the secondary
transmission.
(B) Secondary transmissions to unserved
households.--
(i) In general.--The statutory
license provided for in subparagraph
(A) shall be limited to secondary
transmissions of the signals of no more
than two network stations in a single
day for each television network to
persons who reside in unserved
households. [The limitation in this
clause shall not apply to secondary
transmissions under paragraph (3).]
(ii) Accurate determinations of
eligibility.--
(I) * * *
* * * * * * *
(III) Accurate predictive
model with respect to digital
signals.--Notwithstanding
subclause (I), in determining
presumptively whether a person
resides in an unserved
household under subsection
(d)(10)(A) with respect to
digital signals, a court shall
rely on a predictive model set
forth by the Federal
Communications Commission
pursuant to a rulemaking as
provided in section 339(c)(3)
of the Communications Act of
1934 (47 U.S.C. 339(c)(3)), as
that model may be amended by
the Commission over time under
such section to increase the
accuracy of that model. Until
such time as the Commission
sets forth such model, a court
shall rely on the predictive
model endorsed by the
Commission in FCC 05-199,
released December 9, 2005.
(iii) C-band exemption to unserved
households.--
(I) * * *
(II) Definition.--[In this
clause] In this clause, the
term ``C-band service'' means a
service that is licensed by the
Federal Communications
Commission and operates in the
Fixed Satellite Service under
part 25 of title 47 [of the
Code of Federal Regulations],
Code of Federal Regulations.
(C) Exceptions.--
(i) * * *
(ii) States with all network
stations and [Superstations] non-
network stations in same local
market.--In a State in which all
network stations and [superstations]
non-network stations licensed by the
Federal Communications Commission
within that State as of January 1,
1995, are assigned to the same local
market and that local market does not
encompass all counties of that State,
the statutory license provided under
subparagraph (A) shall apply to the
secondary transmission by a satellite
carrier of the primary transmissions of
such station to all subscribers in the
State who reside in a local market that
is within the first 50 major television
markets as listed in the regulations of
the Commission as in effect on such
date (section 76.51 of title 47 [of the
Code of Federal Regulations], Code of
Federal Regulations).
* * * * * * *
(vi) Networks of noncommercial
educational broadcast stations.--In the
case of a system of three or more
noncommercial educational broadcast
stations licensed to a single State,
public agency, or political,
educational, or special purpose
subdivision of a State, the statutory
license provided for in subparagraph
(A) shall apply to the secondary
transmission of the primary
transmission of such system to any
subscriber in any county within such
State, if such subscriber is located in
a designated market area that is not
otherwise eligible to receive the
secondary transmission of the primary
transmission of such system pursuant to
section 122(a).
(D) Submission of subscriber lists to
networks.--
[(i) Initial lists.--A satellite
carrier that makes secondary
transmissions of a primary transmission
made by a network station pursuant to
subparagraph (A) shall, 90 days after
commencing such secondary
transmissions, submit to the network
that owns or is affiliated with the
network station--
[(I) a list identifying (by
name and address, including
street or rural route number,
city, State, and zip code) all
subscribers to which the
satellite carrier makes
secondary transmissions of that
primary transmission to
subscribers in unserved
households; and
[(II) a separate list,
aggregated by designated market
area (as defined in section
122(j)) (by name and address,
including street or rural route
number, city, State, and zip
code), which shall indicate
those subscribers being served
pursuant to paragraph (3),
relating to significantly
viewed stations.
[(ii) Monthly lists.--After the
submission of the initial lists under
clause (i), on the 15th of each month,
the satellite carrier shall submit to
the network--
[(I) a list identifying (by
name and address, including
street or rural route number,
city, State, and zip code) any
persons who have been added or
dropped as subscribers under
clause (i)(I) since the last
submission under clause (i);
and
[(II) a separate list,
aggregated by designated market
area (by name and street
address, including street or
rural route number, city,
State, and zip code),
identifying those subscribers
whose service pursuant to
paragraph (3), relating to
significantly viewed stations,
has been added or dropped.]
(i) Initial lists.--A satellite
carrier that makes secondary
transmissions of a primary transmission
made by a network station pursuant to
subparagraph (A) shall, not later than
90 days after commencing such secondary
transmissions, submit to the network
that owns or is affiliated with the
network station a list identifying (by
name and address, including street or
rural route number, city, State, and 9-
digit zip code) all subscribers to
which the satellite carrier makes
secondary transmissions of that primary
transmission to subscribers in unserved
households.
(ii) Monthly lists.--After the
submission of the initial lists under
clause (i), the satellite carrier
shall, not later than the 15th of each
month, submit to the network a list
identifying (by name and address,
including street or rural route number,
city, State, and 9-digit zip code) any
persons who have been added or dropped
as subscribers under clause (i) since
the last submission under clause (i).
* * * * * * *
[(3) Secondary transmissions of significantly
viewed signals.--
[(A) In general.--Notwithstanding the
provisions of paragraph (2)(B), and subject to
subparagraph (B) of this paragraph, the
statutory license provided for in paragraphs
(1) and (2) shall apply to the secondary
transmission of the primary transmission of a
network station or a non-network station to a
subscriber who resides outside the station's
local market (as defined in section 122(j)) but
within a community in which the signal has been
determined by the Federal Communications
Commission, to be significantly viewed in such
community, pursuant to the rules, regulations,
and authorizations of the Federal
Communications Commission in effect on April
15, 1976, applicable to determining with
respect to a cable system whether signals are
significantly viewed in a community.
[(B) Limitation.--Subparagraph (A) shall
apply only to secondary transmissions of the
primary transmissions of network stations and
non-network stations to subscribers who receive
secondary transmissions from a satellite
carrier pursuant to the statutory license under
section 122.
[(C) Waiver.--
[(i) In general.--A subscriber who
is denied the secondary transmission of
the primary transmission of a network
station under subparagraph (B) may
request a waiver from such denial by
submitting a request, through the
subscriber's satellite carrier, to the
network station in the local market
affiliated with the same network where
the subscriber is located. The network
station shall accept or reject the
subscriber's request for a waiver
within 30 days after receipt of the
request. If the network station fails
to accept or reject the subscriber's
request for a waiver within that 30-day
period, that network station shall be
deemed to agree to the waiver request.
Unless specifically stated by the
network station, a waiver that was
granted before the date of the
enactment of the Satellite Home Viewer
Extension and Reauthorization Act of
2004 under section 339(c)(2) of the
Communications Act of 1934 shall not
constitute a waiver for purposes of
this subparagraph.
[(ii) Sunset.--The authority under
clause (i) to grant waivers shall
terminate on December 31, 2008, and any
such waiver in effect shall terminate
on that date.]
[(4)] (3) Statutory license where retransmissions
into local market available.--
(A) Rules for subscribers to [analog]
signals under subsection (e).--
(i) For those receiving distant
[analog] signals.--In the case of a
subscriber of a satellite carrier who
is eligible to receive the secondary
transmission of the primary [analog]
transmission of a network station
solely by reason of subsection (e) (in
this subparagraph referred to as a
``distant [analog] signal''), and who,
as of October 1, 2004, is receiving the
distant [analog] signal of that network
station, the following shall apply:
(I) In a case in which the
satellite carrier makes
available to the subscriber the
secondary transmission of the
primary [analog] transmission
of a local network station
affiliated with the same
television network pursuant to
the statutory license under
section 122, the statutory
license under paragraph (2)
shall apply only to secondary
transmissions by that satellite
carrier to that subscriber of
the distant [analog] signal of
a station affiliated with the
same television network--
(aa) if, within 60
days after receiving
the notice of the
satellite carrier under
section 338(h)(1) of
the Communications Act
of 1934, the subscriber
elects to retain the
distant [analog]
signal; but
(bb) only until
such time as the
subscriber elects to
receive such local
[analog] signal.
(II) Notwithstanding
subclause (I), the statutory
license under paragraph (2)
shall not apply with respect to
any subscriber who is eligible
to receive the distant [analog]
signal of a television network
station solely by reason of
subsection (e), unless the
satellite carrier, within 60
days after the date of the
enactment of the Satellite Home
Viewer Extension and
Reauthorization Act of 2004,
submits to that television
network a list, aggregated by
designated market area (as
defined in section
122(j)(2)(C)), that--
(aa) identifies
that subscriber by name
and address (street or
rural route number,
city, State, and zip
code) and specifies the
distant [analog]
signals received by the
subscriber; and
(bb) states, to the
best of the satellite
carrier's knowledge and
belief, after having
made diligent and good
faith inquiries, that
the subscriber is
eligible under
subsection (e) to
receive the distant
[analog] signals.
(ii) For those not receiving
distant [analog] signals.--In the case
of any subscriber of a satellite
carrier who is eligible to receive the
distant [analog] signal of a network
station solely by reason of subsection
(e) and who did not receive a distant
[analog] signal of a station affiliated
with the same network on October 1,
2004, the statutory license under
paragraph (2) shall not apply to
secondary transmissions by that
satellite carrier to that subscriber of
the distant [analog] signal of a
station affiliated with the same
network.
[(B) Rules for other subscribers.--In the
case of a subscriber of a satellite carrier who
is eligible to receive the secondary
transmission of the primary transmission of a
network station under the statutory license
under paragraph (2) (in this subparagraph
referred to as a ``distant signal''), other
than subscribers to whom subparagraph (A)
applies, the following shall apply:
[(i) In a case in which the
satellite carrier makes available to
that subscriber, on January 1, 2005,
the secondary transmission of the
primary transmission of a local network
station affiliated with the same
television network pursuant to the
statutory license under section 122,
the statutory license under paragraph
(2) shall apply only to secondary
transmissions by that satellite carrier
to that subscriber of the distant
signal of a station affiliated with the
same television network if the
subscriber's satellite carrier, not
later than March 1, 2005, submits to
that television network a list,
aggregated by designated market area
(as defined in section 122(j)(2)(C)),
that identifies that subscriber by name
and address (street or rural route
number, city, State, and zip code) and
specifies the distant signals received
by the subscriber.
[(ii) In a case in which the
satellite carrier does not make
available to that subscriber, on
January 1, 2005, the secondary
transmission of the primary
transmission of a local network station
affiliated with the same television
network pursuant to the statutory
license under section 122, the
statutory license under paragraph (2)
shall apply only to secondary
transmissions by that satellite carrier
of the distant signal of a station
affiliated with the same network to
that subscriber if--
[(I) that subscriber seeks
to subscribe to such distant
signal before the date on which
such carrier commences to
provide pursuant to the
statutory license under section
122 the secondary transmissions
of the primary transmission of
stations from the local market
of such local network station;
and
[(II) the satellite
carrier, within 60 days after
such date, submits to each
television network a list that
identifies each subscriber in
that local market provided such
an signal by name and address
(street or rural route number,
city, State, and zip code) and
specifies the distant signals
received by the subscriber.
[(C) Future applicability.--The statutory
license under paragraph (2) shall not apply to
the secondary transmission by a satellite
carrier of a primary transmission of a network
station to a person who--
[(i) is not a subscriber lawfully
receiving such secondary transmission
as of the date of the enactment of the
Satellite Home Viewer Extension and
Reauthorization Act of 2004; and
[(ii) at the time such person seeks
to subscribe to receive such secondary
transmission, resides in a local market
where the satellite carrier makes
available to that person the secondary
transmission of the primary
transmission of a local network station
affiliated with the same television
network pursuant to the statutory
license under section 122, and such
secondary transmission of such primary
transmission can reach such person.
[(D) Special rules for distant digital
signals.--The statutory license under paragraph
(2) shall apply to secondary transmissions by a
satellite carrier to a subscriber of primary
digital transmissions of network stations if
such secondary transmissions to such subscriber
are permitted under section 339(a)(2)(D) of the
Communications Act of 1934, as in effect on the
day after the date of the enactment of the
Satellite Home Viewer Extension and
Reauthorization Act of 2004, except that the
reference to section 73.683(a) of title 47,
Code of Federal Regulations, referred to in
section 339(a)(2)(D)(i)(I) shall refer to such
section as in effect on the date of the
enactment of the Satellite Home Viewer
Extension and Reauthorization Act of 2004.]
(B) Rules for other subscribers.--The
statutory license under paragraph (2) shall not
apply to the secondary transmission by a
satellite carrier of a primary transmission of
a network station to a person who--
(i) is not a subscriber lawfully
receiving such secondary transmission
as of the date of the enactment of the
Satellite Home Viewer Update and
Reauthorization Act of 2009; or
(ii) at the time such person seeks
to subscribe to receive such secondary
transmission, resides in a local market
where the satellite carrier makes
available to that person the secondary
transmission of the primary
transmission of a local network station
affiliated with the same television
network pursuant to the statutory
license under section 122, and such
secondary transmission of such primary
transmission can reach such person.
[(E)] (C) Other provisions not affected.--
This paragraph shall not affect the
applicability of the statutory license to
secondary transmissions [under paragraph (3)
or] to unserved households included under
[paragraph (12)] paragraph (11).
[(F)] (D) Waiver.--A subscriber who is
denied the secondary transmission of a network
station under subparagraph [(C) or (D)] (B) may
request a waiver from such denial by submitting
a request, through the subscriber's satellite
carrier, to the network station in the local
market affiliated with the same network where
the subscriber is located. The network station
shall accept or reject the subscriber's request
for a waiver within 30 days after receipt of
the request. If the network station fails to
accept or reject the subscriber's request for a
waiver within that 30-day period, that network
station shall be deemed to agree to the waiver
request. Unless specifically stated by the
network station, a waiver that was granted
before the date of the enactment of the
Satellite Home Viewer Extension and
Reauthorization Act of 2004 under section
339(c)(2) of the Communications Act of 1934
shall not constitute a waiver for purposes of
this subparagraph.
[(G)] (E) Available defined.--For purposes
of this paragraph, a satellite carrier makes
available a secondary transmission of the
primary transmission of a local station to a
subscriber or person if the satellite carrier
offers that secondary transmission to other
subscribers who reside in the same 9-digit zip
code as that subscriber or person.
[(5)] (4) Noncompliance with reporting and payment
requirements.--Notwithstanding the provisions of
paragraphs (1) and (2), the willful or repeated
secondary transmission to the public by a satellite
carrier of a primary transmission made by a
[superstation] non-network station or a network station
and embodying a performance or display of a work is
actionable as an act of infringement under section 501,
and is fully subject to the remedies provided by
sections 502 through 506 and 509, where the satellite
carrier has not deposited the statement of account and
royalty fee required by subsection (b), or has failed
to make the submissions to networks required by
paragraph (2)(C).
[(6)] (5) Willful alterations.--Notwithstanding the
provisions of paragraphs (1) and (2), the secondary
transmission to the public by a satellite carrier of a
performance or display of a work embodied in a primary
transmission made by a [superstation] non-network
station or a network station is actionable as an act of
infringement under section 501, and is fully subject to
the remedies provided by sections 502 through 506 and
section 510, if the content of the particular program
in which the performance or display is embodied, or any
commercial advertising or station announcement
transmitted by the primary transmitter during, or
immediately before or after, the transmission of such
program, is in any way willfully altered by the
satellite carrier through changes, deletions, or
additions, or is combined with programming from any
other broadcast signal.
[(7)] (6) Violation of territorial restrictions on
statutory license for network stations.--
(A) Individual violations.--The willful or
repeated secondary transmission by a satellite
carrier of a primary transmission made by a
network station and embodying a performance or
display of a work to a subscriber who is not
eligible to receive the transmission under this
section is actionable as an act of infringement
under section 501 and is fully subject to the
remedies provided by sections 502 through 506,
except that--
(i) * * *
(ii) any statutory damages shall
not exceed [$5] $250 for such
subscriber for each month during which
the violation occurred.
(B) Pattern of violations.--If a satellite
carrier engages in a willful or repeated
pattern or practice of delivering a primary
transmission made by a network station and
embodying a performance or display of a work to
subscribers who are not eligible to receive the
transmission under this section, then in
addition to the remedies set forth in
subparagraph (A)--
(i) if the pattern or practice has
been carried out on a substantially
nationwide basis, the court shall order
a permanent injunction barring the
secondary transmission by the satellite
carrier, for private home viewing, of
the primary transmissions of any
primary network station affiliated with
the same network, and the court may
order statutory damages of not to
exceed [$250,000] $2,500,000 for each
6-month period during which the pattern
or practice was carried out; and
(ii) if the pattern or practice has
been carried out on a local or regional
basis, the court shall order a
permanent injunction barring the
secondary transmission, for private
home viewing in that locality or
region, by the satellite carrier of the
primary transmissions of any primary
network station affiliated with the
same network, and the court may order
statutory damages of not to exceed
[$250,000] $2,500,000 for each 6-month
period during which the pattern or
practice was carried out.
* * * * * * *
[(8)] (7) Discrimination by a satellite carrier.--
Notwithstanding the provisions of paragraph (1), the
willful or repeated secondary transmission to the
public by a satellite carrier of a performance or
display of a work embodied in a primary transmission
made by a [superstation] non-network station or a
network station is actionable as an act of infringement
under section 501, and is fully subject to the remedies
provided by sections 502 through 506, if the satellite
carrier unlawfully discriminates against a distributor.
[(9)] (8) Geographic limitation on secondary
transmissions.--The statutory license created by this
section shall apply only to secondary transmissions to
households located in the United States.
[(10)] (9) Loser pays for signal intensity
measurement; recovery of measurement costs in a civil
action.--In any civil action filed relating to the
eligibility of subscribing households as unserved
households--
(A) * * *
* * * * * * *
[(11)] (10) Inability to conduct measurement.--If a
network station makes a reasonable attempt to conduct a
site measurement of its signal at a subscriber's
household and is denied access for the purpose of
conducting the measurement, and is otherwise unable to
conduct a measurement, the satellite carrier shall
within 60 days notice thereof, terminate service of the
station's network to that household.
[(12)] (11) Service to recreational vehicles and
commercial trucks.--
(A) Exemption.--
(i) In general.--For purposes of
this subsection, and subject to clauses
(ii) and (iii), the term ``unserved
household'' shall include--
(I) recreational vehicles
as defined in regulations of
the Secretary of Housing and
Urban Development under section
3282.8 of title 24 [of the Code
of Federal Regulations], Code
of Federal Regulations; and
(II) commercial trucks that
qualify as commercial motor
vehicles under regulations of
the Secretary of Transportation
under section 383.5 of title 49
[of the Code of Federal
Regulations], Code of Federal
Regulations.
* * * * * * *
(B) Documentation requirements.--A
recreational vehicle or commercial truck shall
be deemed to be an unserved household beginning
10 days after the relevant satellite carrier
provides to the network that owns or is
affiliated with the network station that will
be secondarily transmitted to the recreational
vehicle or commercial truck the following
documents:
(i) * * *
* * * * * * *
(iii) Registration and license.--In
the case of a commercial truck, a copy
of--
(I) * * *
(II) a copy of a valid,
current commercial driver's
license, as defined in
regulations of the Secretary of
Transportation under section
383 of title 49 [of the Code of
Federal Regulations], Code of
Federal Regulations, issued to
the operator.
* * * * * * *
[(13)] (12) Statutory license contingent on
compliance with fcc rules and remedial steps.--
Notwithstanding any other provision of this section,
the willful or repeated secondary transmission to the
public by a satellite carrier of a primary transmission
embodying a performance or display of a work made by a
broadcast station licensed by the Federal
Communications Commission is actionable as an act of
infringement under section 501, and is fully subject to
the remedies provided by sections 502 through 506, if,
at the time of such transmission, the satellite carrier
is not in compliance with the rules, regulations, and
authorizations of the Federal Communications Commission
concerning the carriage of television broadcast station
signals.
[(14)] (13) Waivers.--A subscriber who is denied
the secondary transmission of a signal of a network
station under subsection (a)(2)(B) may request a waiver
from such denial by submitting a request, through the
subscriber's satellite carrier, to the network station
asserting that the secondary transmission is
prohibited. The network station shall accept or reject
a subscriber's request for a waiver within 30 days
after receipt of the request. If a television network
station fails to accept or reject a subscriber's
request for a waiver within the 30-day period after
receipt of the request, that station shall be deemed to
agree to the waiver request and have filed such written
waiver. Unless specifically stated by the network
station, a waiver that was granted before the date of
the enactment of the Satellite Home Viewer Extension
and Reauthorization Act of 2004 under section 339(c)(2)
of the Communications Act of 1934, and that was in
effect on such date of enactment, shall constitute a
waiver for purposes of this paragraph.
[(15) Carriage of low power television stations.--
[(A) In general.--Notwithstanding paragraph
(2)(B), and subject to subparagraphs (B)
through (F) of this paragraph, the statutory
license provided for in paragraphs (1) and (2)
shall apply to the secondary transmission of
the primary transmission of a network station
or a superstation that is licensed as a low
power television station, to a subscriber who
resides within the same local market.
[(B) Geographic limitation.--
[(i) Network stations.--With
respect to network stations, secondary
transmissions provided for in
subparagraph (A) shall be limited to
secondary transmissions to subscribers
who--
[(I) reside in the same
local market as the station
originating the signal; and
[(II) reside within 35
miles of the transmitter site
of such station, except that in
the case of such a station
located in a standard
metropolitan statistical area
which has 1 of the 50 largest
populations of all standard
metropolitan statistical areas
(based on the 1980 decennial
census of population taken by
the Secretary of Commerce), the
number of miles shall be 20.
[(ii) Superstations.--With respect
to superstations, secondary
transmissions provided for in
subparagraph (A) shall be limited to
secondary transmissions to subscribers
who reside in the same local market as
the station originating the signal.
[(C) No applicability to repeaters and
translators.--Secondary transmissions provided
for in subparagraph (A) shall not apply to any
low power television station that retransmits
the programs and signals of another television
station for more than 2 hours each day.
[(D) Royalty fees.--Notwithstanding
subsection (b)(1)(B), a satellite carrier whose
secondary transmissions of the primary
transmissions of a low power television station
are subject to statutory licensing under this
section shall have no royalty obligation for
secondary transmissions to a subscriber who
resides within 35 miles of the transmitter site
of such station, except that in the case of
such a station located in a standard
metropolitan statistical area which has 1 of
the 50 largest populations of all standard
metropolitan statistical areas (based on the
1980 decennial census of population taken by
the Secretary of Commerce), the number of miles
shall be 20. Carriage of a superstation that is
a low power television station within the
station's local market, but outside of the 35-
mile or 20-mile radius described in the
preceding sentence, shall be subject to royalty
payments under subsection (b)(1)(B).
[(E) Limitation to subscribers taking
local-into-local service.--Secondary
transmissions provided for in subparagraph (A)
may be made only to subscribers who receive
secondary transmissions of primary
transmissions from that satellite carrier
pursuant to the statutory license under section
122, and only in conformity with the
requirements under 340(b) of the Communications
Act of 1934, as in effect on the date of the
enactment of the Satellite Home Viewer
Extension and Reauthorization Act of 2004.]
(14) Secondary transmissions of low power
television programming.--
(A) In general.--Notwithstanding paragraph
(2)(B), and subject to subparagraphs (B)
through (D) of this paragraph, the statutory
license provided for in paragraph (1) shall
apply to the secondary transmission by a
satellite carrier of the primary transmission
of the programming of a non-network station
that is licensed as a low power television
station, to a subscriber who resides within the
same designated market area as the station that
originates the programming signal.
(B) No applicability to repeaters and
translators.--Secondary transmissions provided
for in subparagraph (A) shall not apply to any
low power television station that retransmits
the programs and signals of another television
station for more than 2 hours each day.
(C) Royalty fees.--A satellite carrier
whose secondary transmission of the primary
transmission of the programming of a low power
television station is subject to statutory
licensing under this section shall be subject
to royalty payments under subsection (b)(1)(B)
for any transmission to a subscriber outside of
the local market of the low power television
station.
(D) Limitation to subscribers taking local-
into-local service.--Secondary transmissions
provided for in subparagraph (A) may be made by
a satellite carrier only to subscribers who
receive secondary transmissions of primary
transmissions from that satellite carrier
pursuant to the statutory license under section
122.
[(16)] (15) Restricted transmission of out-of-state
distant network signals into certain markets.--
(A) * * *
* * * * * * *
(16) Retransmission for emergency preparation,
response, or recovery.--
(A) Authority.--The secondary transmission
by a satellite carrier of a performance or
display of a work embodied in a primary
transmission of a television broadcast station
is not an infringement of copyright if such
secondary transmission is made--
(i) to a Federal governmental body
designated by the Secretary of Homeland
Security or an organization established
with the purpose of carrying out a
system of national and international
relief efforts and chartered under
section 300101 of title 36;
(ii) to officers or employees of
such body or such organization as a
part of the official duties or
employment of such officers or
employees;
(iii) at the request of the
Secretary of Homeland Security; and
(iv) for the sole purpose of
preparing for, responding to, or
recovering from an emergency described
under subparagraph (B).
(B) Emergencies.--An emergency is described
under this subparagraph if the Secretary of
Homeland Security identifies such emergency as
a major disaster, a catastrophic incident, an
act of terrorism, or a transportation security
incident.
(C) Regulations.--Not later than 6 months
after the date of the enactment of this
paragraph, the Secretary of Homeland Security
shall issue regulations to protect copyright
owners by preventing the unauthorized access to
the secondary transmissions described in
subparagraph (A).
(D) Reports to congressional committees.--
Not later than one year after the date of the
enactment of this paragraph and by September 30
of each year thereafter, the Secretary of
Homeland Security shall submit a report to the
Committee on the Judiciary and the Committee on
Homeland Security of the House of
Representatives and the Committee on the
Judiciary of the Senate describing--
(i) the manner in which the
authority granted under subparagraph
(A) is being used; and
(ii) any additional legislative
recommendations the Secretary may have.
(E) Definitions.--As used in this
paragraph:
(i) Terrorism.--The term
``terrorism'' has the meaning given
that term in section 2(16) of the
Homeland Security Act of 2002 (6 U.S.C.
101(16)).
(ii) Transportation security
incident.--The term ``transportation
security incident'' has the meaning
given that term in section 70101 of
title 46.
(iii) Catastrophic incident.--The
term ``catastrophic incident'' means
any natural disaster, act of terrorism,
or other man-made disaster that results
in extraordinary levels of casualties
or damage or disruption severely
affecting the population (including
mass evacuations), infrastructure, the
environment, the economy, national
morale, or government functions in a
geographic area.
(F) Effective date.--This paragraph shall
take effect with respect to a secondary
transmission described under subparagraph (A)
that is made after the end of the 30-day period
beginning on the effective date of the
regulations issued by the Secretary of Homeland
Security under subparagraph (C).
* * * * * * *
[(b) Statutory License for Secondary Transmissions for
Private Home Viewing.--]
(b) Deposit of Statements and Fees; Verification
Procedures.--
(1) Deposits with the register of copyrights.--A
satellite carrier whose secondary transmissions are
subject to statutory licensing under subsection (a)
shall, on a semiannual basis, deposit with the Register
of Copyrights, in accordance with requirements that the
Register shall prescribe by regulation--
(A) a statement of account, covering the
preceding 6-month period, specifying the names
and locations of all non-network stations and
network stations whose signals were
retransmitted, at any time during that period,
to subscribers as described in subsections
(a)(1) and (a)(2), the total number of
subscribers that received such retransmissions,
and such other data as the Register of
Copyrights may from time to time prescribe by
regulation; [and]
(B) a royalty fee for that 6-month period,
computed by multiplying the total number of
subscribers receiving each secondary
transmission of each non-network station or
network station during each calendar month by
the appropriate rate in effect under this
section[.]; and
(C) a filing fee, as determined by the
Register of Copyrights pursuant to section
708(a).
[Notwithstanding the provisions of subparagraph (B), a
satellite carrier whose secondary transmissions are
subject to statutory licensing under paragraph (1) or
(2) of subsection (a) shall have no royalty obligation
for secondary transmissions to a subscriber under
paragraph (3) of such subsection.]
(2) Verification of accounts and fee payments.--The
Register of Copyrights shall issue regulations to
permit interested parties to verify and audit the
statements of account and royalty fees submitted by
satellite carriers under this subsection.
[(2)] (3) Investment of fees.--The Register of
Copyrights shall receive all fees (including the filing
fee specified in paragraph (1)(C)) deposited under this
section and, after deducting the reasonable costs
incurred by the Copyright Office under this section
(other than the costs deducted under [paragraph (4)]
paragraph (5)), shall deposit the balance in the
Treasury of the United States, in such manner as the
Secretary of the Treasury directs. All funds held by
the Secretary of the Treasury shall be invested in
interest-bearing securities of the United States for
later distribution with interest by the Librarian of
Congress as provided by this title.
[(3)] (4) Persons to whom fees are distributed.--
The royalty fees deposited under [paragraph (2)]
paragraph (3) shall, in accordance with the procedures
provided by [paragraph (4)] paragraph (5), be
distributed to those copyright owners whose works were
included in a secondary transmission made by a
satellite carrier during the applicable 6-month
accounting period and who file a claim with the
Copyright Royalty Judges under [paragraph (4)]
paragraph (5).
[(4)] (5) Procedures for distribution.--The royalty
fees deposited under [paragraph (2)] paragraph (3)
shall be distributed in accordance with the following
procedures:
(A) * * *
* * * * * * *
(c) Adjustment of Royalty Fees.--
(1) Applicability and determination of royalty fees
for [analog] signals.--
(A) Initial fee.--The appropriate fee for
purposes of determining the royalty fee under
subsection (b)(1)(B) for the secondary
transmission of the [primary analog
transmissions] primary transmissions of network
stations and [superstations] non-network
stations shall be the appropriate fee set forth
in part 258 of title 37, Code of Federal
Regulations, as in effect on [July 1, 2004]
July 1, 2009, as modified under this paragraph.
(B) Fee set by voluntary negotiation.--On
or before [January 2, 2005, the Librarian of
Congress] January 4, 2010, the Copyright
Royalty Judges shall cause to be published in
the Federal Register of the initiation of
voluntary negotiation proceedings for the
purpose of determining the royalty fee to be
paid by satellite carriers for the secondary
transmission of the [primary analog
transmission] primary transmissions of network
stations and [superstations] non-network
stations under subsection (b)(1)(B). A separate
fee shall be established for each stream of a
multicast transmission included in the
secondary transmission to the subscriber.
(C) Negotiations.--Satellite carriers,
distributors, and copyright owners entitled to
royalty fees under this section shall negotiate
in good faith in an effort to reach a voluntary
agreement or agreements for the payment of
royalty fees. Any such satellite carriers,
distributors and copyright owners may at any
time negotiate and agree to the royalty fee,
and may designate common agents to negotiate,
agree to, or pay such fees. If the parties fail
to identify common agents, the [Librarian of
Congress] Copyright Royalty Judges shall do so,
after requesting recommendations from the
parties to the negotiation proceeding. The
parties to each negotiation proceeding shall
bear the cost thereof.
(D) Agreements binding on parties; filing
of agreements; public notice.--[(i) Voluntary
agreements]
(i) Voluntary agreements; filing.--
Voluntary agreements negotiated at any
time in accordance with this paragraph
shall be binding upon all satellite
carriers, distributors, and copyright
owners [that a parties] that are
parties thereto. Copies of such
agreements shall be filed with the
Copyright Office within 30 days after
execution in accordance with
regulations that the Register of
Copyrights shall prescribe.
[(ii)(I) Within]
(ii) Procedure for adoption of
fees.--
(I) Publication of
notice.--Within 10 days after
publication in the Federal
Register of a notice of the
initiation of voluntary
negotiation proceedings,
parties who have reached a
voluntary agreement may request
that the royalty fees in that
agreement be applied to all
satellite carriers,
distributors, and copyright
owners without convening [an
arbitration proceeding pursuant
to subparagraph (E)] a
proceeding under subparagraph
(F).
[(II) Upon receiving a request under
subclause (I), the Librarian of Congress]
(II) Public notice of
fees.--Upon receiving a request
under subclause (I), the
Copyright Royalty Judges shall
immediately provide public
notice of the royalty fees from
the voluntary agreement and
afford parties an opportunity
to state that they object to
those fees.
[(III) The Librarian]
(III) Adoption of fees.--
The Copyright Royalty Judges
shall adopt the royalty fees
from the voluntary agreement
for all satellite carriers,
distributors, and copyright
owners without convening [an
arbitration proceeding] the
proceeding under subparagraph
(F) unless a party with an
intent to participate in [the
arbitration proceeding] that
proceeding and a significant
interest in the outcome of that
proceeding objects under
subclause (II).
(E) Period agreement is in effect.--The
obligation to pay the royalty fees established
under a voluntary agreement which has been
filed with the [Copyright Office] Copyright
Royalty Judges in accordance with this
paragraph shall become effective on the date
specified in the agreement, and shall remain in
effect until [December 31, 2009] December 31,
2014, or in accordance with the terms of the
agreement, whichever is later.
(F) Fee set by [compulsory arbitration]
copyright royalty judges proceeding.--
(i) Notice of initiation of
[proceedings] the proceeding.--On or
before [May 1, 2005, the Librarian of
Congress] May 3, 2010, the Copyright
Royalty Judges shall cause notice to be
published in the Federal Register of
the initiation of [arbitration
proceedings] a proceeding for the
purpose of determining the royalty [fee
to be paid] fees to be paid for the
secondary transmission of [primary
analog transmission] the primary
transmissions of network stations and
[superstations] non-network stations
under subsection (b)(1)(B) by satellite
carriers and [distributors]
distributors--
(I) * * *
(II) if an objection to the
fees from a voluntary agreement
submitted for adoption by the
[Librarian of Congress]
Copyright Royalty Judges to
apply to all satellite
carriers, distributors, and
copyright owners is received
under subparagraph (D) from a
party with an intent to
participate in the
[arbitration] proceeding and a
significant interest in the
outcome of that proceeding.
[Such arbitration proceeding shall be
conducted under chapter 8 as in effect
on the day before the date of the
enactment of the Copyright Royalty and
Distribution Act of 2004.] Such
proceeding shall be conducted under
chapter 8.
[(ii) Establishment of royalty
fees.--In determining royalty fees
under this subparagraph, the copyright
arbitration royalty panel appointed
under chapter 8, as in effect on the
day before the date of the enactment of
the Copyright Royalty and Distribution
Act of 2004 shall establish fees for
the secondary transmissions of the
primary analog transmission of network
stations and non-network stations that
most clearly represent the fair market
value of secondary transmissions,
except that the Librarian of Congress
and any copyright arbitration royalty
panel shall adjust those fees to
account for the obligations of the
parties under any applicable voluntary
agreement filed with the Copyright
Office pursuant to subparagraph (D). In
determining the fair market value, the
panel shall base its decision on
economic, competitive, and programming
information presented by the parties,
including--]
(ii) Establishment of royalty
fees.--In determining royalty fees
under this subparagraph, the Copyright
Royalty Judges shall establish fees for
the secondary transmissions of the
primary transmissions of network
stations and non-network stations that
most clearly represent the fair market
value of secondary transmissions,
except that the Copyright Royalty
Judges shall adjust royalty fees to
account for the obligations of the
parties under any applicable voluntary
agreement filed with the Copyright
Royalty Judges in accordance with
subparagraph (D). In determining the
fair market value, the Judges shall
base their decision on economic,
competitive, and programming
information presented by the parties,
including--
(I) * * *
* * * * * * *
[(iii) Period during which decision
of arbitration panel or order of
librarian effective.--The obligation to
pay the royalty fee established under a
determination which--
[(I) is made by a copyright
arbitration royalty panel in an
arbitration proceeding under
this paragraph and is adopted
by the Librarian of Congress
under section 802(f), as in
effect on the day before the
date of the enactment of the
Copyright Royalty and
Distribution Act of 2004; or
[(II) is established by the
Librarian under section 802(f)
as in effect on the day before
such date of enactment shall be
effective as of January 1,
2005.]
(iii) Effective date for decision
of copyright royalty judges.--The
obligation to pay the royalty fees
established under a determination that
is made by the Copyright Royalty Judges
in a proceeding under this paragraph
shall be effective as of January 1,
2010.
(iv) Persons subject to royalty
[fee] fees.--The royalty [fee] fees
referred to in (iii) shall be binding
on all satellite carriers, distributors
and copyright owners, who are not party
to a voluntary agreement filed with the
Copyright Office under subparagraph
(D).
[(2) Applicability and determination of royalty
fees for digital signals.--The process and requirements
for establishing the royalty fee payable under
subsection (b)(1)(B) for the secondary transmission of
the primary digital transmissions of network stations
and non-network stations shall be the same as that set
forth in paragraph (1) for the secondary transmission
of the primary analog transmission of network stations
and non-network stations, except that--
[(A) the initial fee under paragraph (1)(A)
shall be the rates set forth in section
298.3(b)(1) and (2) of title 37, Code of
Federal Regulations, as in effect on the date
of the enactment of the Satellite Home Viewer
Extension and Reauthorization Act of 2004,
reduced by 22.5 percent;
[(B) the notice of initiation of
arbitration proceedings required in paragraph
(1)(F)(i) shall be published on or before
December 31, 2005; and
[(C) the royalty fees that are established
for the secondary transmission of the primary
digital transmission of network stations and
non-network stations in accordance with to the
procedures set forth in paragraph (1)(F)(iii)
and are payable under subsection (b)(1)(B)--
[(i) shall be reduced by 22.5
percent; and
[(ii) shall be adjusted by the
Librarian of Congress on January 1,
2007, and on January 1 of each year
thereafter, to reflect any changes
occurring during the preceding 12
months in the cost of living as
determined by the most recent Consumer
Price Index (for all consumers and
items) published by the Secretary of
Labor.]
(2) Annual royalty fee adjustment.--Effective
January 1 of each year, the royalty fee payable under
subsection (b)(1)(B) for the secondary transmission of
the primary transmissions of network stations and non-
network stations shall be adjusted by the Copyright
Royalty Judges to reflect any changes occurring in the
cost of living as determined by the most recent
Consumer Price Index (for all consumers and for all
items) published by the Secretary of Labor before
December 1 of the preceding year. Notification of the
adjusted fees shall be published in the Federal
Register at least 25 days before January 1.
(d) Definitions.--As used in this section--
(1) Distributor.--The term ``distributor'' means an
entity [which] that contracts to distribute secondary
transmissions from a satellite carrier and, either as a
single channel or in a package with other programming,
provides the secondary transmission either directly to
individual subscribers or indirectly through other
program distribution entities in accordance with the
provisions of this section.
(2) Network station.--The term ``network station''
means--
(A) a television station licensed by the
Federal Communications Commission, including
any translator station or terrestrial satellite
station that rebroadcasts all or substantially
all of the programming broadcast by a network
station, that is owned or operated by, or
affiliated with, one or more of the television
networks in the United States [which] that
offer an interconnected program service on a
regular basis for 15 or more hours per week to
at least 25 of its affiliated television
licensees in 10 or more States; or
(B) a noncommercial educational broadcast
station [(as defined in section 397 of the
Communications Act of 1934)];
except that the term does not include the signal of the
Alaska Rural Communications Service, or any successor
entity to that service.
* * * * * * *
(5) Private home viewing.--The term ``private home
viewing'' means the viewing, for private use in a
household by means of satellite reception equipment
[which] that is operated by an individual in that
household and [which] that serves only such household,
of a secondary transmission delivered by a satellite
carrier of a primary transmission of a television
station licensed by the Federal Communications
Commission.
(6) Satellite carrier.--The term ``satellite
carrier'' means an entity that uses the facilities of a
satellite or satellite service licensed by the Federal
Communications Commission and operates in the Fixed-
Satellite Service under part 25 of title 47 [of the
Code of Federal Regulations], Code of Federal
Regulations [or the Direct], or the Direct Broadcast
Satellite Service under part 100 of title 47 [of the
Code of Federal Regulations], Code of Federal
Regulations, to establish and operate a channel of
communications for point-to-multipoint distribution of
television station signals, and that owns or leases a
capacity or service on a satellite in order to provide
such point-to-multipoint distribution, except to the
extent that such entity provides such distribution
pursuant to tariff under the Communications Act of
1934, other than for private home viewing pursuant to
this section.
* * * * * * *
[(8) Subscriber.--The term ``subscriber'' means an
individual or entity that receives a secondary
transmission service by means of a secondary
transmission from a satellite carrier and pays a fee
for the service, directly or indirectly, to the
satellite carrier or to a distributor in accordance
with the provisions of this section.]
(8) Subscriber.--The term ``subscriber'' means a
person or entity that receives a secondary transmission
service from a satellite carrier and pays a fee for the
service, directly or indirectly, to the satellite
carrier or to a distributor.
(9) [Superstation] Non-network station.--The term
``[superstation] non-network station'' means a
television station, other than a network station,
licensed by the Federal Communications Commission, that
is secondarily transmitted by a satellite carrier.
(10) Unserved household.--The term ``unserved
household'', with respect to a particular television
network, means 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 , Code of Federal
Regulations, as in effect on January 1, 1999;]
(A) cannot receive, through the use of a
conventional, stationary, outdoor rooftop
receiving antenna, an over-the-air signal
containing the primary video or qualified
multicast video of a primary network station
located in that household's local market and
affiliated with that network of--
(i) if the signal originates as an
analog signal, Grade B intensity as
defined by the Federal Communications
Commission under section 73.683(a) of
title 47, Code of Federal Regulations,
as in effect on January 1, 1999; or
(ii) if the signal originates as a
digital signal, intensity defined in
the values for digital television
noise-limited service contour, as
defined in regulations issued by the
Federal Communications Commission under
section 73.622(e) of title 47, Code of
Federal Regulations, as such
regulations may be amended from time to
time;
(B) is subject to a waiver that meets the
standards of [subsection (a)(14)] subsection
(a)(13), whether or not the waiver was granted
before the date of the enactment of the
[Satellite Home Viewer Extension and
Reauthorization Act of 2004] Satellite Home
Viewer Update and Reauthorization Act of 2009;
* * * * * * *
(D) is a subscriber to whom subsection
[(a)(12)] (a)(11) applies; [or]
(E) is a subscriber to whom the exemption
under subsection (a)(2)(B)(iii) applies[.]; or
(F) is a subscriber who was lawfully
receiving, by reason of subparagraph (A) of
this paragraph, as in effect on the day before
the date of the enactment of the Satellite Home
Viewer Update and Reauthorization Act of 2009,
secondary transmissions of the primary
transmission of a network station affiliated
with that network.
[(11) Local market.--The term ``local market'' has
the meaning given such term under section 122(j),
except that with respect to a low power television
station, the term ``local market'' means the designated
market area in which the station is located.]
(11) Local market.--The term ``local market'' has
the meaning given such term under section 122(j).
(12) Low power television station.--The term ``low
power television station'' means a [low power
television as] low power TV station as defined under
section 74.701(f) of title 47, Code of Federal
Regulations, as in effect on June 1, 2004. For purposes
of this paragraph, the term ``low power television
station'' includes a low power television station that
has been accorded primary status as a Class A
television licensee under section 73.6001(a) of title
47, Code of Federal Regulations.
* * * * * * *
(14) Noncommercial educational broadcast station.--
The term ``noncommercial educational broadcast
station'' means a television broadcast station that--
(A) under the rules and regulations of the
Federal Communications Commission in effect on
November 2, 1978, is eligible to be licensed by
the Federal Communications Commission as a
noncommercial educational television broadcast
station and is owned and operated by a public
agency or nonprofit private foundation,
corporation, or association; or
(B) is owned and operated by a municipality
and transmits only noncommercial programs for
education purposes.
(15) Multicast transmission.--A ``multicast
transmission'' is a transmission by a television
station that contains more than one channel or digital
stream, each containing its own distinct programming.
(16) Qualified multicast video.--A ``qualified
multicast video'' is a video stream other than the
primary video that, with respect to a particular
satellite carrier either--
(A) was carried by that satellite carrier
on July 1, 2009, and remains affiliated with
the same network; or
(B) exists on January 1, 2013, and remains
affiliated with the same network.
(17) Primary video.--The term ``primary video''
means the single programming stream and program-related
material that received the highest aggregate viewership
ratings (as determined by Nielsen Media Research) of
all programming streams offered by that station as of
the date of enactment of the Satellite Home Viewer
Update and Reauthorization Act of 2009, offered by a
television broadcast station.
(e) Moratorium on Copyright Liability.--Until December 31,
[2009] 2014, a subscriber who does not receive a signal of
Grade A intensity (as defined in the regulations of the Federal
Communications Commission under section 73.683(a) of title 47
[of the Code of Federal Regulations], Code of Federal
Regulations, as in effect on January 1, 1999, or predicted by
the Federal Communications Commission using the Individual
Location Longley-Rice methodology described by the Federal
Communications Commission in Docket No. 98-201) of a local
network television broadcast station shall remain eligible to
receive signals of network stations affiliated with the same
network, if that subscriber had satellite service of such
network signal terminated after July 11, 1998, and before
October 31, 1999, as required by this section, or received such
service on October 31, 1999.
* * * * * * *
(g) Certain Waivers Granted to Providers of Local-Into-
Local Service to All Dmas.--
(1) Injunction waiver.--A court that issued an
injunction pursuant to subsection (a)(7)(B) before the
date of the enactment of this subsection shall waive
such injunction if the court recognizes the entity
against which the injunction was issued as a qualified
carrier.
(2) Limited temporary waiver.--
(A) In general.--Upon a request made by a
satellite carrier, a court that issued an
injunction against such carrier under
subsection (a)(7)(B) before the date of the
enactment of this subsection shall waive such
injunction with respect to the statutory
license provided under subsection (a)(2) to the
extent necessary to allow such carrier to
retransmit distant network signals to unserved
households located in short markets in which
such carrier was not providing local service
pursuant to the license under section 122 as of
December 31, 2009.
(B) Expiration of temporary waiver.--A
temporary waiver of an injunction under
subparagraph (A) shall expire after the end of
the 120-day period beginning on the date such
temporary waiver is made unless extended for
good cause by the court making the temporary
waiver.
(C) Failure to make good faith effort to
provide local-into-local service to all dmas.--
(i) Willful failure.--If the court
making a temporary waiver under
subparagraph (A) determines that the
satellite carrier that made the request
for such waiver has failed to make a
good faith effort to provide local-
into-local service to all DMAs and
determines that such failure was
willful, such failure--
(I) is actionable as an act
of infringement under section
501 and the court may in its
discretion impose the remedies
provided for in section 502
through 506 and subsection
(a)(6)(B) of this section; and
(II) shall result in the
termination of the waiver
provided under subparagraph
(A).
(ii) Nonwillful failure.--If the
court making a temporary waiver under
subparagraph (A) determines that the
satellite carrier that made the request
for such waiver has failed to make a
good faith effort to provide local-
into-local service to all DMAs and
determines that such failure was
nonwillful, the court may in its
discretion impose financial penalties
that reflect--
(I) the degree of control
the carrier had over the
circumstances that resulted in
the failure;
(II) the quality of the
carrier's efforts to remedy the
failure; and
(III) the severity and
duration of the service
interruption.
(D) Single temporary waiver available.--An
entity may only receive one temporary waiver
under this paragraph.
(E) Short market defined.--For purposes of
this paragraph, the term ``short market'' means
a local market in which programming of one or
more of the four most widely viewed television
networks nationwide as measured on the date of
enactment of this subsection is not offered on
the primary signal of any local television
broadcast station.
(3) Establishment of qualified carrier
recognition.--
(A) Statement of eligibility.--An entity
seeking to be recognized as a qualified carrier
under this subsection shall file a statement of
eligibility with the court that imposed the
injunction. A statement of eligibility must
include--
(i) an affidavit that the entity is
providing local-into-local service to
all DMAs;
(ii) a request for a waiver of the
injunction; and
(iii) a certification issued
pursuant to section [X] of [E&C Act].
(B) Grant of recognition as a qualified
carrier.--Upon receipt of a statement of
eligibility, the court shall recognize the
entity as a qualified carrier and issue the
waiver under paragraph (1).
(C) Voluntary termination.--At any time, an
entity recognized as a qualified carrier may
file a statement of voluntary termination with
the court certifying that it no longer wishes
to be recognized as a qualified carrier. Upon
receipt of such statement, the court shall
reinstate the injunction waived under paragraph
(1).
(D) Loss of recognition prevents future
recognition.--No entity may be recognized as a
qualified carrier if such entity had previously
been recognized as a qualified carrier and
subsequently lost such recognition or
voluntarily terminated such recognition under
subparagraph (C).
(4) Qualified carrier obligations and compliance.--
(A) In general.--An entity recognized as a
qualified carrier shall continue to provide
local-into-local service to all DMAs.
(B) Compliance determination.--Upon the
motion of an aggrieved television broadcast
station, the court recognizing an entity as a
qualified carrier may make a determination of
whether the entity is providing local-into-
local service to all DMAs.
(C) Pleading requirement.--In any motion
brought under subparagraph (B), the party
making such motion shall specify one or more
designated market areas (as such term is
defined in section 122(j)(2)(C)) for which the
failure to provide service is being alleged,
and, for each such designated market area,
shall plead with particularity the
circumstances of the alleged failure.
(D) Burden of proof.--In any proceeding to
make a determination under subparagraph (B),
and with respect to a designated market area
for which failure to provide service is
alleged, the entity recognized as a qualified
carrier shall have the burden of proving that
the entity provided local-into-local service
with a good quality satellite signal to 90
percent of the households in such designated
market area at the time and place alleged.
(5) Failure to provide service.--
(A) Penalties.--If the court recognizing an
entity as a qualified carrier finds that such
entity has willfully failed to provide local-
into-local service to all DMAs, such finding
shall result in the loss of recognition of the
entity as a qualified carrier and the
termination of the waiver provided under
paragraph (1), and the court may, in its
discretion--
(i) treat such failure as an act of
infringement under section 501, and
subject such infringement to the
remedies provided for in sections 502
through 506 and subsection (a)(6)(B) of
this section; and
(ii) impose a fine of no greater
than $250,000.
(B) Exception for nonwillful violation.--If
the court determines that the failure to
provide local-into-local service to all DMAs is
nonwillful, the court may in its discretion
impose financial penalties for noncompliance
that reflect--
(i) the degree of control the
entity had over the circumstances that
resulted in the failure;
(ii) the quality of the entity's
efforts to remedy the failure and
restore service; and
(iii) the severity and duration of
the service interruption.
(6) Penalties for violations of license.--A court
that finds, under subsection (a)(6)(A), that an entity
recognized as a qualified carrier has willfully made a
secondary transmission of a primary transmission made
by a network station and embodying a performance or
display of a work to a subscriber who is not eligible
to receive the transmission under this section shall
reinstate the injunction waived under paragraph (1),
and the court may order statutory damages of not to
exceed $2,500,000.
(7) Local-into-local service to all dmas defined.--
For purposes of this subsection:
(A) In general.--An entity provides
``local-into-local service to all DMAs'' if the
entity provides local service in all designated
market areas (as such term is defined in
section 122(j)(2)(C)) pursuant to the license
under section 122.
(B) Household coverage.--For purposes of
subparagraph (A), an entity that makes
available local-into-local service with a good
quality satellite signal to 90 percent of the
households in a designated market area based on
the most recent census data shall be considered
to be providing local service to such
designated market area.
(C) Good quality satellite signal
defined.--The term ``good quality signal'' has
the meaning given such term under section [X]
of [E&C Act].
* * * * * * *
Sec. 122. Limitations on exclusive rights: Secondary transmissions [by
satellite carriers within local markets] of local
television programming by satellite
[(a) Secondary Transmissions of Television Broadcast
Stations by Satellite Carriers.--A secondary transmission of a
performance or display of a work embodied in a primary
transmission of a television broadcast station into the
station's local market shall be subject to statutory licensing
under this section if--
[(1) the secondary transmission is made by a
satellite carrier to the public;
[(2) with regard to secondary transmissions, the
satellite carrier is in compliance with the rules,
regulations, or authorizations of the Federal
Communications Commission governing the carriage of
television broadcast station signals; and
[(3) the satellite carrier makes a direct or
indirect charge for the secondary transmission to--
[(A) each subscriber receiving the
secondary transmission; or
[(B) a distributor that has contracted with
the satellite carrier for direct or indirect
delivery of the secondary transmission to the
public.]
(a) Secondary Transmissions Into Local Markets.--
(1) Secondary transmissions of television broadcast
stations within a local market.--A secondary
transmission of a performance or display of a work
embodied in a primary transmission of a television
broadcast station into the station's local market shall
be subject to statutory licensing under this section
if--
(A) the secondary transmission is made by a
satellite carrier to the public;
(B) with regard to secondary transmissions,
the satellite carrier is in compliance with the
rules, regulations, or authorizations of the
Federal Communications Commission governing the
carriage of television broadcast station
signals; and
(C) the satellite carrier makes a direct or
indirect charge for the secondary transmission
to--
(i) each subscriber receiving the
secondary transmission; or
(ii) a distributor that has
contracted with the satellite carrier
for direct or indirect delivery of the
secondary transmission to the public.
(2) Significantly viewed stations.--
(A) In general.--The statutory license
under paragraph (1) shall apply to the
secondary transmission of the primary
transmission of a network station or a non-
network station to a subscriber who resides
outside the station's local market but within a
community in which the signal has been
determined by the Federal Communications
Commission to be significantly viewed in such
community, pursuant to the rules, regulations,
and authorizations of the Federal
Communications Commission in effect on April
15, 1976, applicable to determining with
respect to a cable system whether signals are
significantly viewed in a community.
(B) Limitation.--Subparagraph (A) shall
apply only to secondary transmissions of the
primary transmissions of network stations or
non-network stations to subscribers who receive
secondary transmissions from a satellite
carrier pursuant to the statutory license under
paragraph (1).
(C) Waiver.--A subscriber who is denied the
secondary transmission of the primary
transmission of a network station or a non-
network station under subparagraph (B) may
request a waiver from such denial by submitting
a request, through the subscriber's satellite
carrier, to the network station or non-network
station in the local market affiliated with the
same network or non-network where the
subscriber is located. The network station or
non-network station shall accept or reject the
subscriber's request for a waiver within 30
days after receipt of the request. If the
network station or non-network station fails to
accept or reject the subscriber's request for a
waiver within that 30-day period, that network
station or non-network station shall be deemed
to agree to the waiver request.
(3) Secondary transmission of low power
programming.--
(A) In general.--Subject to subparagraphs
(B) through (D) of this paragraph, the
statutory license provided under paragraph (1)
shall apply to the secondary transmission by a
satellite carrier of the primary transmission
of a network station or a non-network station
that is licensed as a low power television
station, to a subscriber who resides within the
same local market as the station that
originates the transmission.
(B) No applicability to repeaters and
translators.--Secondary transmissions by a
satellite carrier provided for in subparagraph
(A) shall not apply to any low power television
station that retransmits the programs and
signals of another television station for more
than 2 hours each day.
(C) Limitation to subscribers taking local-
into-local service.--Secondary transmissions by
a satellite carrier provided for in
subparagraph (A) may be made only to
subscribers who receive secondary transmissions
of primary transmissions from that satellite
carrier pursuant to the statutory license in
paragraph (1), and only in conformity with the
requirements under section 340(b) of the
Communications Act of 1934, as in effect on the
date of the enactment of the Satellite Home
Viewer Update and Reauthorization Act of 2009.
(D) No impact on other secondary
transmissions obligations.--A satellite carrier
that makes secondary transmissions of a primary
transmission of a low power television station
under a statutory license provided under this
section is not required, by reason of such
secondary transmissions, to make any other
secondary transmissions.
(b) Reporting Requirements.--
(1) Initial lists.--A satellite carrier that makes
secondary transmissions of a primary transmission made
by a network station under subsection (a) shall, within
90 days after commencing such secondary transmissions,
submit to the network that owns or is affiliated with
the network [station a list identifying (by name in
alphabetical order and street address, including county
and zip code) all subscribers to which the satellite
carrier makes secondary transmissions of that primary
transmission under subsection (a).] station--
(A) a list identifying (by name in
alphabetical order and street address,
including county and 9-digit zip code) all
subscribers to which the satellite carrier
makes secondary transmissions of that primary
transmission under subsection (a); and
(B) a separate list, aggregated by
designated market area (by name and address,
including street or rural route number, city,
State, and 9-digit zip code), which shall
indicate those subscribers being served
pursuant to subsection (a)(2), relating to
significantly viewed stations.
(2) Subsequent lists.--After the list is submitted
under paragraph (1), the satellite carrier shall, on
the 15th of each month, submit to the [network a list
identifying (by name in alphabetical order and street
address, including county and zip code) any subscribers
who have been added or dropped as subscribers since the
last submission under this subsection.] network--
(A) a list identifying (by name in
alphabetical order and street address,
including county and 9-digit zip code) any
subscribers who have been added or dropped as
subscribers since the last submission under
this subsection; and
(B) a separate list, aggregated by
designated market area (by name and street
address, including street or rural route
number, city, State, and 9-digit zip code),
identifying those subscribers whose service
pursuant to subsection (a)(2), relating to
significantly viewed stations, has been added
or dropped since the last submission under this
subsection.
* * * * * * *
(f) Violation of Territorial Restrictions on Statutory
License for Television Broadcast Stations.--
(1) Individual violations.--The willful or repeated
secondary transmission to the public by a satellite
carrier of a primary transmission embodying a
performance or display of a work made by a television
broadcast station to a subscriber who does not reside
in that station's local market, and is not subject to
statutory licensing under [section 119 or] section 119,
subject to statutory licensing by reason of subsection
(a)(2)(A), or subject to a private licensing agreement,
is actionable as an act of infringement under section
501 and is fully subject to the remedies provided by
sections 502 through 506, except that--
(A) * * *
(B) any statutory damages shall not exceed
[$5] $250 for such subscriber for each month
during which the violation occurred.
(2) Pattern of violations.--If a satellite carrier
engages in a willful or repeated pattern or practice of
secondarily transmitting to the public a primary
transmission embodying a performance or display of a
work made by a television broadcast station to
subscribers who do not reside in that station's local
market, and are not subject to statutory licensing
under [section 119 or] section 119, subject to
statutory licensing by reason of subsection (a)(2)(A),
or subject to a private licensing agreement, then in
addition to the remedies under paragraph (1)--
(A) if the pattern or practice has been
carried out on a substantially nationwide
basis, the court--
(i) * * *
(ii) may order statutory damages
not exceeding [$250,000] $2,500,000 for
each 6-month period during which the
pattern or practice was carried out;
and
(B) if the pattern or practice has been
carried out on a local or regional basis with
respect to more than one television broadcast
station, the court--
(i) * * *
(ii) may order statutory damages
not exceeding [$250,000] $2,500,000 for
each 6-month period during which the
pattern or practice was carried out.
(g) Burden of Proof.--In any action brought under
subsection (f), the satellite carrier shall have the burden of
proving that its secondary transmission of a primary
transmission by a television broadcast station is made only to
subscribers located within that station's local market or
subscribers being served in compliance with [section 119 or]
section 119, subsection (a)(2)(A), or a private licensing
agreement.
* * * * * * *
(j) Definitions.--In this section--
(1) Distributor.--The term ``distributor'' means an
entity [which contracts] that contracts to distribute
secondary transmissions from a satellite carrier and,
either as a single channel or in a package with other
programming, provides the secondary transmission either
directly to individual subscribers or indirectly
through other program distribution entities.
(2) Local market.--
[(A) In general.--The term ``local
market'', in the case of both commercial and
noncommercial television broadcast stations,
means the designated market area in which a
station is located, and--
[(i) in the case of a commercial
television broadcast station, all
commercial television broadcast
stations licensed to a community within
the same designated market area are
within the same local market; and
[(ii) in the case of a
noncommercial educational television
broadcast station, the market includes
any station that is licensed to a
community within the same designated
market area as the noncommercial
educational television broadcast
station.]
(A) In general.--The term ``local market''
means--
(i) in the case of a television
broadcast station that is not a low
power television station, the
designated market area in which such
station is located, and--
(I) in the case of a
commercial television broadcast
station, all commercial
television broadcast stations
licensed to a community within
the same designated market area
are within the same local
market; and
(II) in the case of a
noncommercial educational
television broadcast station,
any station that is licensed to
a community within the same
designated market area as the
noncommercial educational
television broadcast station;
and
(ii) in the case of a low power
television broadcast station, the area
that is both--
(I) within the designated
market area in which such
station is located; and
(II) within the area within
35 miles of the transmitter
site of such station, except
that in the case of such a
station located in a standard
metropolitan statistical area
that has 1 of the 50 largest
populations of all standard
metropolitan statistical areas
(based on the 1980 decennial
census of population taken by
the Secretary of Commerce), the
area within 20 miles of the
transmitter site of such
station.
* * * * * * *
(3) Network station; Non-network station; satellite
carrier; secondary transmission.--The terms ``network
station'', ``non-network station'', ``satellite
carrier'', and ``secondary transmission'' have the
meanings given such terms under section 119(d).
[(4) Subscriber.--The term ``subscriber'' means a
person who receives a secondary transmission service
from a satellite carrier and pays a fee for the
service, directly or indirectly, to the satellite
carrier or to a distributor.]
(4) Subscriber.--The term ``subscriber'' means a
person or entity that receives a secondary transmission
service from a satellite carrier and pays a fee for the
service, directly or indirectly, to the satellite
carrier or to a distributor.
* * * * * * *
(6) Low power television station.--The term ``low
power television station'' means a low power TV station
as defined under section 74.701(f) of title 47, Code of
Federal Regulations, as in effect on June 1, 2004. For
purposes of this paragraph, the term ``low power
television station'' includes a low power television
station that has been accorded primary status as a
Class A television licensee under section 73.6001(a) of
title 47, Code of Federal Regulations.
* * * * * * *
CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES
* * * * * * *
Sec. 804. Institution of proceedings
(a) * * *
(b) Timing of Proceedings.--
(1) Section 111 proceedings.--(A) A petition
described in subsection (a) to initiate proceedings
under section 801(b)(2) concerning the adjustment of
royalty rates under section 111 to which subparagraph
(A) or (D) of section 801(b)(2) applies may be filed
during the year [2005] 2015 and in each subsequent
fifth calendar year.
(B) In order to initiate proceedings under section
801(b)(2) concerning the adjustment of royalty rates
under section 111 to which subparagraph (B) or (C) of
section 801(b)(2) applies, within 12 months after an
event described in either of those subsections, any
owner or user of a copyrighted work whose royalty rates
are specified by section 111, or by a rate established
under this chapter before or after the enactment of the
Copyright Royalty and Distribution Reform Act of 2004,
may file a petition with the Copyright Royalty Judges
declaring that the petitioner requests an adjustment of
the rate. The Copyright Royalty Judges shall then
proceed as set forth in subsection (a) of this section.
Any change in royalty rates made under this chapter
pursuant to this subparagraph may be reconsidered in
the year [2005] 2015, and each fifth calendar year
thereafter, in accordance with the provisions in
section 801(b)(2)(B) or (C), as the case may be. A
petition for adjustment of rates established by section
111(d)(1)(B) as a result of a change in the rules and
regulations of the Federal Communications Commission
shall set forth the change on which the petition is
based.
* * * * * * *
Committee Jurisdictional Letters
Additional Views
The principal purpose of H.R. 3570 is to extend for an
additional five years the copyright compulsory license, which
is codified in Sec. 119 of title 17, United States Code, for
the satellite retransmission of distant over-the-air television
broadcast stations. The bill also contains amendments to the
local satellite retransmission license, which is codified in
Sec. 122 of title 17, and the cable license, which is codified
in Sec. 111 of title 17. Together, these licenses provide
statutory authority for satellite and cable providers to compel
copyright owners to make available their television programs at
below-market government-mandated rates.
A. EXPANSION AND PERPETUATION OF COMPULSORY LICENSES
``The bill rests on the assumption that Congress should
impose a compulsory license only when the marketplace
cannot suffice.''\1\
---------------------------------------------------------------------------
\1\H.R. Rep. No. 100-887, 100th Cong., 2d Sess., pt. 1, at 15.
When the original Satellite Home Viewer Act was enacted, it
was intended to provide a limited and temporary mechanism for
clearing the rights to copyrighted television broadcast
programming. The drafters' intent was to permit the license to
expire once the satellite industry and copyright owners were
able to negotiate the rights to network television programs in
an efficient manner.
At present, it is estimated that approximately one million
subscribers receive distant-network programming under the
authority of the Sec. 119 license. Despite the existence of
these licenses, the cable and satellite industries remain free
to enter into private negotiations with copyright owners and to
compensate them for the use of their property under agreed-upon
terms. Indeed, such agreements provide the basis for the
overwhelming majority of programming made available to cable
and satellite subscribers.
In several respects, H.R. 3570 resuscitates, broadens and
extends the license rather than accelerating its demise. This
is regrettable since the justification for establishing the
license and abrogating the rights of copyright owners, i.e.
that consumers would benefit from the nurturing of an effective
competitor to cable providers, was satisfied long ago.
Today, the two national satellite carriers are the second
and third largest multi-video program distributors (MVPD's) in
the country. For years, they have been among the fastest
growing and most profitable programming distributors as their
technology and the efficiencies of scale they enjoy as
``national'' services have enabled them to take market-share
from local and regional cable competitors.
The Satellite Home Viewer Act of 1988 was envisioned as
necessary to spur the growth of a start-up direct-to-home
satellite industry as an effective competitor to cable.
Congress determined ``that the public interest best will be
served by creating an interim statutory solution that will
allow carriers of broadcast signals to serve home satellite
antenna users until marketplace solutions to this problem can
be developed.''\2\ Congress was clear that it ``does not favor
interference with workable marketplace relationships for the
transfer of exhibition rights in programming,'' and that by
adopting a 6-year sunset on the new satellite compulsory
license it expected that ``the marketplace and competition will
eventually serve the needs of home satellite dish owners.''\3\
---------------------------------------------------------------------------
\2\Id. at 13.
\3\Id. at 15.
---------------------------------------------------------------------------
The Copyright Office was specifically tasked with the
responsibility to evaluate the effect of these licenses and in
the 2008 report mandated by the Satellite Home Viewer Extension
and Reauthorization Act (SHVERA), found that both the cable and
satellite industries ``are no longer nascent entities in need
of government subsidies through a statutory licensing system''
and that they ``have substantial market power and are able to
negotiate private agreements with copyright owners.'' The
Copyright Office concluded that the distant compulsory licenses
``have interfered in the marketplace for programming and have
unfairly lowered the rates paid to copyright owners'' and that
``[t]he time has come when private negotiations would serve the
public interest, and interests of the creative community,
better than either Section 111 or Section 119.'' The report's
principal recommendation was ``that Congress move toward
abolishing Section 111 and Section 119 of the [Copyright]
Act.'' That recommendation builds upon findings in earlier
Copyright Office reports in 1997 and 1992 and a 1989 FCC
report.
There is ample evidence to question whether satellite
carriers continue to need the compulsory license to effectively
compete and provide a ``lifeline'' network service to
consumers. The license is of tremendous economic value to them
in avoiding negotiations and the payment of market rates to
copyright owners. Even if Congress was not prepared to allow
the license to expire at the end of 2009, the decision to
extend it by an additional five years without including
meaningful steps to transition content owners and wean
satellite carriers from the coerced subsidy they receive out of
the pockets of creators was unfortunate. Congress should
examine ways to replace the current system with an alternative
that is fair to all copyright owners.
B. SUBORDINATING COPYRIGHT ENFORCEMENT TO THE COMMUNICATIONS ACT GOAL
OF LOCAL-INTO-LOCAL SERVICE
During the 2004 reauthorization of the Sec. 119 license,
the Committee worked to diminish satellite carriers' continued
reliance on the distant programming license, to provide for the
evaluation of free-market alternatives, and to encourage the
wider availability of local programming. As a result, satellite
carriers today offer ``local into local'' service to
approximately 97% of American households.
Nevertheless, there are some markets where satellite
providers chose not to offer local service due to low
population densities and/or business or economic decisions. A
desire to ensure the availability of local service in these few
remaining markets is cited as the motivation for section six of
the bill, which orders a federal court to waive a permanent
injunction against a satellite carrier, i.e. the DISH Network
(aka EchoStar), which was found liable for willfully and
systematically violating the rights of intellectual property
owners in 2006.
In a remarkable, unanimous opinion by a panel of the Court
of Appeals for the Eleventh Circuit in CBS Broadcasting, Inc.
v. EchoStar Communications Corp., the court wrote:
EchoStar has disregarded the limitations of its
statutory license and sought to avoid its obligations
under the [law] at every turn,'' and, ``As if the
magnitude of its ineligible subscriber base were
insufficiently disconcerting, we have found no
indication that EchoStar was ever interested in
complying with the Act. Indeed,... we seem to have
discerned a `pattern' and 'practice' of violating the
Act in every way imaginable.
The Court of Appeals, upholding a determination by the
district court, make clear that DISH Network's record of
deliberately violating the rights of intellectual property
owners and the clear requirements of copyright law was not
inadvertent, insignificant, or a mere technical matter.\4\
---------------------------------------------------------------------------
\4\The Eleventh Circuit found ``In an effort to dissuade the
district court from issuing the original injunction in this case,
EchoStar's CEO, Charles Ergen, made a formal pledge under penalty of
perjury in September 1999. In that pledge, he promised . . . [to]
terminate all illegal subscribers. . . . Contrary to Ergen's promise,
the district court found no evidence that EchoStar terminated service
to any of these subscribers for compliance-related purposes.''
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The importance of intellectual property to the United
States cannot be overstated. The most urgent matters that
confront American innovators and creators today is how they can
effectively protect their works from unlawful exploitation and
enforce respect for their exclusive rights in an international
marketplace.
While we share the goal of enabling all Americans to view
local television programming via satellite, we question the
proposition that the best available means to provide such an
incentive is to relieve DISH Network of the foreseeable results
of its persistent, determined, unlawful conduct. Rather than
crafting a proposal designed to benefit one satellite carrier,
a better approach would be to provide an incentive to both
national satellite carriers to enter the remaining markets.
Such an approach would harness the forces of free-market
competition and possess the virtues of protecting the integrity
of the copyright law and respecting the judiciary's
independence in administering, without prejudice, the laws
Congress enacts to advance copyright owners' legitimate
interests. When Congress weakens copyright protection, it
strikes a dissonant note. Before enactment, SHVURA should
incorporate provisions to enhance regard for intellectual
property and further strengthen deterrence from future
violations. To fail to do so places Congress in the position of
absolving a notorious infringer for past violations in return
for vague assurances of future respect for the rights of
others.
C. EROSION OF ``NO DISTANT WHERE LOCAL'' AND COPYRIGHT EXCLUSIVITY
PRINCIPLES
In addition to these concerns, the bill also re-defines a
household capable of receiving a local network signal through
the air as ``unserved'' if the signal is delivered in some
cases via digital multicast technology. For more than two
decades, the license has generally limited the abrogation of
copyright owner's rights to only those circumstances where
consumers are unable to receive a good quality signal through
the air. This is commonly referred to as providing a
``lifeline'' service to consumers. When a household can receive
a good quality network signal through the air, there is no need
for a lifeline and no apparent justification for permitting a
satellite carrier to prefer an imported distant signal over the
signal offered by a community-based local broadcaster.
In a sense, the inclusion of this provision erodes the ``no
distant where local'' principle embodied in the 2004 Satellite
Home Viewer Extension and Reauthorization Act (SHVERA). In
essence, this language functions as a ``no local where
distant'' provision because it provides authority to satellite
providers to discriminate against the network television
programming offered for free in a local community by over-the-
air broadcast stations.
Indeed, the preference in section three of the bill may
result in discouraging free over-the-air local broadcasters
from affiliating with more than one network and developing a
market-based solution to the ``missing network affiliate''
problem. This would limit the number of free network
programming options available to consumers and, in effect,
require consumers to subscribe to pay television to receive
networks they might otherwise have been able to view for free.
We recognize that the bill mitigates one harm from this
provision by limiting it to a period of three years but that
limit may actually lead to a scenario in which some satellite
subscribers could lose programming they will have become
accustomed to receiving on January 1, 2013. It would be
preferable to eliminate the provision in its entirety rather
than create a new and perhaps vocal class of subscribers who
could be urged by certain satellite providers to petition
Congress to extend this provision as it approaches expiration.
Despite these concerns, the prospect of approximately one
million American households being denied the ability to view
network programming via satellite after December 31, 2009 made
it advisable to advance the bill at full committee. It is our
hope that the spirit of cooperation reflected at the markup
will be extended to the continued attention, deliberation and
improvement of the serious matters that remain to be
appropriately addressed in SHVURA.
Lamar Smith.
Howard L. Berman.
Howard Coble.
Sheila Jackson Lee.
Daniel E. Lungren.
Darrell E. Issa.
Adam B. Schiff.
J. Randy Forbes.
Louie Gohmert.
Jason Chaffetz.
Tom Rooney.
Gregg Harper.
