[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Extensions of Remarks]
[Pages E162-E165]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              COPYRIGHT COMPULSORY LICENSE IMPROVEMENT ACT

                                 ______
                                 

                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                      Thursday, February 12, 1998

  Mr. COBLE. Mr. Speaker, I am pleased to introduce the ``Copyright 
Compulsory License Improvement Act.'' This bill will improve the 
copyright compulsory license for satellite carriers of copyrighted 
programming contained on television broadcast signals by applying to 
such carriers the same opportunities and rules as their cable 
competitors. This competitive parity will lead to increased exposure of 
copyrighted programming to consumers who will pay lower prices for 
cable and satellite services which deliver programming to their homes. 
These lower prices will result from the choices consumers will have in 
choosing how they want their television programming delivered. Mr. 
Speaker, I know I speak for many of the Members in this House when I 
assert that creating competition in the video delivery market is the 
key to more choice and lower prices for our constituents.
  The Copyright Act of 1976 bestowed on cable television a permanent 
compulsory license enables that industry to rebroadcast network and 
superstation signals to cable television viewers without requiring 
cable operators to receive the authorization of thousands of copyright 
owners who have an exclusive right to authorize the exploitation of 
their programs. The cable operators pay a set fee for the right to 
retransmit and the monies collected are paid to the copyright owners 
through a distribution proceeding conducted under the auspices of the 
United States Copyright Office.
  In 1988, Congress granted a compulsory license to the satellite 
industry. Although the cable and satellite compulsory licenses have 
similarities, there are important differences which I believe prevent 
satellite becoming a true competitor to cable. Technology has changed 
significantly since the cable and satellite compulsory licenses were 
created. In a very short time, satellite carriers will be able to bring 
local programming through their services to viewers of that local 
market. The time has come to take a comprehensive look at the satellite 
compulsory license as it relates to the long-term viability and 
competitiveness of the satellite television industry. The satellite 
compulsory license is set to sunset in December of next year, and the 
Federal Communications Commission has reported that in areas where 
there is no competition to cable, consumers are paying higher cable 
rates. We must act for our constituents to level the playing field in a 
manner that will allow both industries to flourish to the benefit of 
consumers.
  To that end, the ``Copyright Compulsory License Improvement Act'' 
makes the following changes to the Satellite Home Viewer Act:
  It makes the satellite compulsory license permanent, just like the 
cable compulsory license.
  It allows new satellite customers who have received a network signal 
from a cable system within the past three months to sign up for 
satellite service for those signals. This is not allowed today.
  It allows satellite carriers to retransmit a local television station 
to households within that station's local market, just like cable does.
  It reforms the current structure of the administrative body which 
determines rates and distributions applicable to all copyright 
compulsory licenses to make it cheaper and more efficient for the 
parties.
  In order to create parity for the above new opportunities for 
satellite carriers by reforming the license, the bill must also create 
corresponding regulatory parity between the satellite and cable 
industries, including must-carry rules, retransmission consent 
requirements, network non-duplication protection, syndicated

[[Page E163]]

exclusivity protection, and sports blackout protection. These 
regulations will apply after a period of time in which the Federal 
Communications Commission can carefully consider and tailor their 
implementation. Until that time, the portions of the satellite 
compulsory license which determine who is eligible to receive network 
and superstation signals from satellite carriers will continue to apply 
just as they do now.
  I note that under the provisions of this bill the current state of 
the law (and as expressly stated in section 12(b), the unserved 
household provisions of current law) shall remain in effect until such 
time as the Commission makes determinations pursuant to section 12 of 
the bill regarding implementation of network nonduplication protection 
and other protections. I am troubled by the suggestion of some that the 
introduction of this legislation may form the basis of an attempt to 
postpone or alter the outcome of pending court proceedings regarding 
enforcement of the current unserved household provisions. This 
legislation is not intended to diminish the effect of existing law. 
Parties subject to the unserved household provisions of the current 
Section 119 license are expected to comply fully with those provisions 
as they currently exist, and, of course, I reject any suggestion that 
courts should decline to enforce or postpone enforcing existing law 
because Congress is debating whether to change it. The notion that 
parties need not comply with laws that may be changed in the future is 
an invitation to lawlessness which I firmly reject.
  This is a forward-looking bill which will create an incentive for 
companies to develop the means by which to provide local programming to 
local markets over satellite systems. I am committed to working with 
Representative Billy Tauzin, Chairman of the Commerce Subcommittee on 
Telecommunications, Trade and Consumer Protection, and with 
Representative Tom Bliley, Chairman of the full Commerce Committee, on 
the regulatory provisions in this bill. Their leadership and 
partnership has been and will continue to be invaluable and necessary 
in guaranteeing true competition between the satellite and cable 
industries.
  I also want to recognize the leadership and care that Senator Orrin 
Hatch, Chairman of the Senate Committee on the Judiciary, has paid to 
the development of this important bill. We have worked together closely 
on its provisions and I know he is committed, as I am, to assuring fair 
competition through this legislation. I look forward to continuing our 
work together as our bills move through both bodies of the Congress.
  Let me make clear that this bill is a compromise, carefully balanced 
to ensure competition. I believe it contains the balance necessary to 
allow this bill to become law this session and I urge all interested 
parties to join us in a constructive discussion of this very important 
legislation.
  Following is a brief section-by-section which explains the bill in 
more detail:

                               SECTION 1

       The title of the bill is the ``Copyright Compulsory License 
     Improvement Act.''


                               SECTION 2

       Section 2 of the bill amends the section 119 satellite 
     carrier compulsory license of the Copyright Act to create a 
     statutory licensing scheme that permits satellite carriers to 
     provide their subscribers with local and distant television 
     broadcast signals, as well as the national satellite feed of 
     the Public Broadcasting Service. Satellite carriers may 
     retransmit any television broadcast signals to subscribers 
     for private home viewing, provided that such retransmissions 
     are in compliance with the rules and regulations of the 
     Federal Communications Commission. Such compliance would 
     include syndicated exclusivity, sports blackout and network 
     nonduplication protection for broadcasters, as required by 
     section 12 of the bill.
       Section 2 requires satellite carriers to provide initial 
     and updated lists to local television stations identifying 
     subscribers in the local television station's area who 
     receive satellite service and the names of the network 
     stations provided to those subscribers. This will allow 
     television stations to preserve their network 
     nonduplication rights provided in section 12 of the bill.
       Section 2 prohibits satellite carriers from willfully 
     altering the programming contained on television broadcast 
     signals and the PBS national satellite feed that carriers 
     retransmit. In addition, satellite carriers are prohibited 
     from unlawfully discriminating against a distributor of 
     satellite retransmitted broadcast programming, and any such 
     unlawful discrimination constitutes an act of copyright 
     infringement subject to the penalties of chapter 5 of the 
     Copyright Act. It is also copyright infringement for a 
     satellite carrier to fail to submit a statement of account 
     and royalty fee necessary to obtain the satellite compulsory 
     license.


                               SECTION 3

       Section 3 of the bill creates the terms and conditions of 
     the satellite compulsory license. Carriers must submit a 
     statement of account and royalty fee to the Copyright Office 
     on a semiannual basis for subsequent distribution to 
     copyright owners. The royalty fee for retransmission of 
     distant television broadcast stations, and the PBS national 
     feed, is the royalty fee in effect on date of enactment of 
     the bill for retransmission of distant broadcast signals. 
     There is no royalty fee for television broadcast signals that 
     are retransmitted to subscribers who reside within the local 
     markets of such signals.
       The remainder of section 3 continues the provisions of the 
     existing law by prescribing how the royalty fees are 
     collected and maintained for distribution, and how copyright 
     owners of works contained on retransmitted television 
     broadcast signals and the PBS national feed may claim 
     royalties.


                               SECTION 4

       Section 4 of the bill contains definitions of terms used in 
     section 119 compulsory license. Most of the definitions in 
     the existing law are carried forward. New provisions include 
     a definition of ``designated market area'' and ``local 
     market'' for determining royalty-free local retransmissions 
     of broadcast signals, and a definition of new PBS national 
     feed.


                               SECTION 5

       Section 5 of the bill carries forward the provision of 
     existing law maintaining exclusivity of the satellite license 
     with the cable compulsory license of the Copyright Act, found 
     at 17 U.S.C. 111. That is, a satellite carrier making 
     secondary transmissions of television broadcast signals, and 
     the PBS national feed, for private home viewing may only do 
     so under the terms of section 119 license, and may not invoke 
     the terms of the section 111 cable license.


                               SECTION 6

       Section 6 of the bill contains a conforming amendment 
     amending the table of contents of chapter 1 of the Copyright 
     Act.


                               SECTION 7

       Section 7 of the bill completely revises chapter 8 of the 
     Copyright Act, replacing the current Copyright Arbitration 
     Royalty Panels with a Copyright Royalty Adjudication Board.
       New section 801 of the Copyright Act establishes the 
     Copyright Royalty Adjudication Board within the U.S. 
     Copyright Office.
       New section 802 of the Copyright Act establishes the 
     membership and qualifications of the Board. New section 
     802(a) establishes that the Board should be comprised of one 
     full-time Chief Administrative Copyright Judge and at least 
     two part-time Administrative Copyright Judges. It is left up 
     to the discretion of the Librarian of Congress, upon the 
     recommendation of the Register of Copyrights, to determine 
     how many other part-time Administrative Copyright Judges 
     the Board shall have. The determination should be based on 
     how many judges the Board will need to conduct its 
     business in a timely manner.
       New section 802(b) requires that the Chief Administrative 
     Copyright Judge be an attorney with ten or more years of 
     legal practice and have experience either in administrative 
     hearings or court trials, and a demonstrated knowledge of 
     copyright law. Other Administrative Copyright Judges must 
     possess expertise in the business and economics of industries 
     affected by the actions the Board takes.
       New section 802(c) provides that the term of all 
     Administrative Copyright Judges shall be five years on a 
     staggered basis so that no more than one term is due to 
     expire in any one year. To achieve this, the Librarian of 
     Congress, upon the recommendation of the Register of 
     Copyrights, shall appoint some of the initial Administrative 
     Copyright Judges to shorter than five year terms.
       New section 802(d) provides compensation for the 
     Administrative Copyright Judges at the Senior Level in 
     accordance with the provisions of 5 U.S.C. 5376.
       New section 803 of the Copyright Act provides for selection 
     of the Administrative Copyright Judges. New section 803(a) 
     provides that the Librarian of Congress, upon the 
     recommendation of the Register of Copyrights, selects the 
     Administrative Copyright Judges. The Librarian may only 
     select those persons found qualified under section 802(b) and 
     found to meet the financial conflict of interest standards 
     adopted under section 805(a). The Librarian may re-select, 
     without limit, Administrative Copyright Judges to additional 
     terms. Section 803(b) provides that actions taken by the 
     Board during those times will be valid, notwithstanding any 
     temporary vacancy.
       New section 804 of the Copyright Act provides for the 
     independence of the Board. New section 804(a) provides that 
     the Board shall have decisional independence on the 
     substantive matters before it. Administrative Copyright 
     Judges are neither to receive performance appraisals nor are 
     they to be assigned duties inconsistent with their duties and 
     responsibilities as Administrative Copyright Judges.
       New section 805 of the Copyright Act provides for removal 
     and sanction of the Administrative Copyright Judges. New 
     section 804(a) provides that the Register of Copyrights shall 
     adopt regulations regarding the standards of conduct that 
     Administrative Copyright Judges are expected to maintain.
       New section 804(b) provides that the Librarian, upon the 
     recommendation of the Register of Copyrights, may remove or 
     sanction a Administrative Copyright Judge of the Board, upon 
     notice and opportunity for hearing, for violation of any of 
     the standards of conduct adopted under section 804(a).
       New section 806 of the Copyright Act provides for the 
     functions of the Board. New section 806 enumerates the rate 
     setting, royalty

[[Page E164]]

     distribution, and rulemaking functions that are delegated to 
     the Board. The Board determines the rates for: cable 
     retransmission of broadcast signals, the making and 
     distributing of phonorecords by means other than digital 
     phonorecord delivery, satellite carrier retransmission of 
     broadcast signals, and the importing and distributing or 
     manufacturing and distributing of digital audio recording 
     devices.
       The Board determines the rates and terms for: public 
     performance of a sound recording by means of a digital audio 
     transmission; the making and distributing of phonorecords by 
     means of a digital phonorecord delivery; the public 
     performance of music on jukeboxes; the use of music 
     and visual works by public broadcasting entities; and the 
     transmission to the public by a satellite carrier of a 
     primary transmission of a public telecommunications 
     signal.
       The Board accepts or rejects claims filed by copyright 
     owners to royalties deposited with the Copyright Office in 
     the cable fund, the satellite carrier fund, and the digital 
     audio recording fund. Then, for those claims that the Board 
     accepts, the Board determines how much each claimant should 
     receive from those funds
       The Board has jurisdiction to decide, when petitioned, if a 
     particular digital audio recording device or digital audio 
     recording interface device is subject to the provisions of 
     chapter 10 for paying a royalty on the distribution of such 
     devices.
       The Board also has certain rulemaking authority concerning 
     the filing of claims, the notice and record keeping 
     requirements pertaining to some of the compulsory licenses, 
     and the Board's own procedures.
       New section 807 of the Copyright Act sets out the actors 
     for determining the royalty fees for the section 114, 115, 
     116, 118 and 119 compulsory licenses of the Copyright Act. 
     The section also lists the factors that the Board shall take 
     into account when determining or adjusting royalty rates.
       New section 808 of the Copyright Act provides for the 
     institution of royalty distribution and rate adjustment 
     proceedings under the compulsory licenses. New section 808 
     instructs the Board when proceedings shall occur, and whether 
     the proceedings require a petition to initiate them or 
     whether they commence automatically.
       New section 809 of the Copyright Act describes the conduct 
     of royalty distribution and rate adjustment proceedings. New 
     section 809(a) provides that the Board shall conduct its 
     proceedings in accordance with the Administrative Procedure 
     Act. New section 809(b) provides that the Board shall adopt 
     its own rules of procedures upon the approval of the Register 
     of Copyrights. New section 809(c) authorizes the Copyright 
     Office, in its discretion, to file formal pleadings with the 
     Board on any matter pending before the Board. All Copyright 
     Office pleadings shall be formally filed and served on all 
     the parties to the proceeding. The Board may accept or reject 
     the advice of the Copyright Office.
       New section 809(d) provides that all actions of the Board 
     are by majority rule. New section 809(e) allows the Board the 
     discretion to determine whether, in a particular proceeding, 
     one or three Administrative Copyright Judges should preside. 
     New section 809(f) permits all parties whose claims are 
     accepted or who have an interest in the royalty rate to be 
     set to participate in the proceeding and submit relevant 
     proposals and evidence.
       New section 809(g) provides that, except as provided in 
     sections 118 and 119(c), the time limit for the issuance of 
     initial decisions in proceedings with one presiding 
     Administrative Copyright Judge shall be six months from the 
     declaration of the controversy, and the time limit for 
     initial decisions in proceedings with three presiding 
     Administrative Copyright Judges shall be one year from the 
     declaration on the controversy.
       New section 809(h) provides that the initial decision shall 
     contain the same level of reasoned decision-making that is 
     required under the Administrative Procedure Act, and take 
     into account precedent of the decisions of the Copyright 
     Royalty Tribunal, the copyright arbitration royalty panels 
     and the decisions of the Librarian of Congress made in 
     respect to the copyright arbitration royalty panels.
       New section 809(i) provides the parties to the proceeding 
     and the Register of Copyrights an opportunity to petition the 
     entire Board to reconsider any initial decision issued by its 
     presiding Administrative Copyright Judge or Administrative 
     Copyright Judges. If there are no petitions for 
     reconsideration, the initial decision becomes the final 
     decision automatically. If there are petitions for 
     reconsideration, the entire Board considers the petition, 
     and issues a final decision. The final decision of the 
     entire Board constitutes a final agency action. Section 
     809(i) provides that the time limits for filing petitions 
     for reconsideration, and for the entire Board to issue the 
     final decision shall be determined by regulation.
       New section 809 of the Copyright Act provides for judicial 
     review of Board determinations. New section 810(a) provides 
     that when the initial decision becomes the final decision, 
     the Board shall have one week to publish the final decision 
     in the Federal Register. Parties aggrieved by the decision of 
     the Board shall have 30 days from the appearance of the final 
     decision in the Federal Register to appeal the decision to 
     the United States Circuit Court of Appeals for the Federal 
     Circuit. In that case, the Board shall be the defending 
     party, and the Chief Administrative Copyright Judge shall 
     refer the conduct of the Board's defense to the Department of 
     Justice. Notwithstanding the pendency of any appeal, persons 
     who would pay the royalty rates adjusted by the Board's 
     decision are still obligated to pay the adjusted rate and, if 
     applicable, to file a statement of account with the Copyright 
     Office.
       New section 810(b) provides that judicial review of the 
     Board's final decision is in accordance with the 
     Administrative Procedure Act.
       New section 811 delineates various administrative matters 
     related to administration of the compulsory licenses. New 
     section 811(a) instructs the Librarian of Congress, upon the 
     recommendation of the Register of Congress, to provide the 
     Board with the necessary administrative services and 
     personnel support it needs.
       New section 811(b) delegates to the Board the authority to 
     publish in the Federal Register notices of the Board's 
     actions in its proceedings, and such regulations as the Board 
     has been delegated the exclusive right to adopt. New section 
     811(c) authorizes the Register of Copyrights to deduct from 
     the royalty fees deposited with the Copyright Office the 
     reasonable costs incurred by the Copyright Office and the 
     Board. In ratemaking proceedings, the reasonable costs of the 
     Copyright Office and the Board shall be borne by the parties 
     to the proceeding in such manner and proportion as the Board 
     directs.
       New section 811(d) provides that notwithstanding any 
     ceiling imposed on the full-time equivalent positions in the 
     Library of Congress, the Administrative Copyright Judges or 
     employees in support of the Board do not count in the 
     calculation of that ceiling.
       New section 811(e) provides that when the Register of 
     Copyright submits to Congress the budget of the Copyright 
     Office, the Register shall identify the portion intended for 
     the Board with a statement assessing the Board's budgetary 
     needs.
       Section 811(f) provides that the Board shall prepare its 
     own annual report and it shall be included in the Copyright 
     Office's annual report.


                               SECTION 8

       Section 8 of the bill provides that, prior to the 
     constituting of the Board, the Register of Copyrights shall 
     adopt the Board's rules of procedure, but that when the Board 
     is constituted, it may adopt supplemental or superseding 
     regulations, upon the approval of the Register of Copyrights.
       The section also provides that copyright arbitration 
     royalty panels that have already been convened at the time of 
     the passage of this act may continue and complete their 
     proceeding, unless the Register of Copyrights, finds for good 
     cause, that the proceeding should be discontinued. For those 
     proceedings that continue, the report of the copyright 
     arbitration royalty panels shall be submitted to the 
     Librarian of Congress, or the Librarian may, in his 
     discretion, direct the panel to submit the report to the 
     Board. If there are any appeals pending of a decision of a 
     copyright arbitration royalty panel that are eventually 
     remanded by the Court, the remanded case shall go to the 
     Board, not to a reconvened copyright arbitration royalty 
     panel.


                               SECTION 9

       Section 9 of the bill contains conforming amendments to 
     substitute the Copyright Royalty Adjudication Board for the 
     copyright arbitration royalty panels and the Librarian of 
     Congress wherever appropriate.


                               SECTION 10

       Section 10 amends the section 325 of the Communications Act 
     to provide that satellite carries must in certain 
     circumstances obtain retransmission permission from a 
     broadcaster before they can retransmit the signal of a 
     network broadcast station. Like the regime applicable to the 
     cable industry, network broadcasters are afforded the option 
     of either granting retransmission consent, or they may elect 
     must-carry status as provided in section 11 of the bill. All 
     satellite carriers that provide local service of television 
     network stations must obtain either retransmission consent of 
     the local broadcasters, or carry their signals subject to the 
     must-carry provisions.
       Section 10 does exempt carriage of certain broadcast 
     stations from the retransmission consent requirement. 
     Retransmission consent does not apply to noncommercial 
     broadcasting stations, and superstations that existed as 
     superstations on January 1, 1998. Also exempt from the 
     retransmission consent requirement is retransmission of a 
     network station to a household that is not subject to the 
     network nonduplication protection provided in section 12 of 
     the bill. The purpose of this provision is to allow 
     subscribers who reside in the designated market area of a 
     network affiliate, but do not live in an area where the 
     relevant local stations can request network nonduplication 
     (assuring that a subscriber does not or cannot otherwise 
     receive the signal of the local affiliate) to obtain a 
     distant signal of the same network from their satellite 
     carrier.
       Section 10 also directs the Federal Communications 
     Commission, within 45 days of enactment of the bill, to 
     commerce a rulemaking proceeding to adopt regulations 
     governing the exercise of retransmission rights for satellite 
     retransmissions for private home-viewing.


                               SECTION 11

       Section 11 of the bill creates must-carry obligations for 
     satellite carriers retransmitting television broadcast 
     signals. The provisions are similar to those applicable to 
     the

[[Page E165]]

     cable industry. Any satellite carrier that retransmits a 
     television broadcast signal to subscribers residing within 
     the local market of that signal must carry all the television 
     stations in the local market to subscribers residing in the 
     local market. This approach of ``carry one, then carry all'' 
     is subject to the retransmission consent election of section 
     10 of the bill. Thus, a satellite carrier does not have to 
     carry a local television broadcast station if the station 
     elects retransmission consent rather than must-carry. The 
     ``local market'' of a broadcast station is defined as the 
     station's Designated Market Area, as determined by Nielsen 
     Media Research.
       Section 11 tracks the cable must-carry provisions of the 
     1992 Cable Act by relieving satellite carriers from the 
     burden of having to carry more than one affiliate of the same 
     network if both of the affiliates are located in the same 
     local market. Local broadcasters are also afforded channel 
     positioning rights, and are required to provide a good 
     quality signal to the satellite carrier's principal headend 
     in order to assert must-carry rights. Satellite carriers are 
     forbidden from obtaining compensation from local broadcasters 
     in exchange for carriage. Section 11 also provides a means 
     for broadcasters to seek redress from the Federal 
     Communications Commission for violations of the must-carry 
     obligations.


                               SECTION 12

       Section 12 of the bill directs the Federal Communications 
     Commission, within 45 days of enactment of the bill, to 
     commence rulemaking proceedings to impose network 
     nonduplication protection, syndicated exclusivity and sports 
     blackout protection on satellite retransmissions of 
     television broadcast signals for private home-viewing. The 
     regulations adopted are to be similar to those currently in 
     force for retransmissions of television broadcast signals by 
     cable systems. In adopting network nonduplication protection 
     rules, the Commission is directed to adopt rules that permit 
     satellite carriers to provide distant network signals to 
     subscribers who reside within the designated market area of a 
     network station affiliated with the same network but who 
     cannot receive an over-the-air signal of the local affiliate, 
     and further do not receive the local signal from a cable or 
     satellite service The purpose of this provision is to prevent 
     local affiliates from asserting network nonduplication 
     protection against subscribers who legitimately cannot or 
     otherwise do not receive the local network affiliate signal. 
     Thus, if the satellite carrier serving a subscriber provides 
     him/her with the local affiliate for that designated market 
     area, the satellite carrier may not also provide such 
     subscriber with distant network signals affiliated with the 
     same network.

     

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