[Congressional Record Volume 155, Number 130 (Tuesday, September 15, 2009)]
[Senate]
[Pages S9373-S9378]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself, Mr. Sessions, Mr. Kohl, Mr. Hatch, and 
        Mr. Kyl):
  S. 1670. A bill to reform and modernize the limitations on exclusive 
rights relating to secondary transmissions of certain signals; to the 
Committee on the Judiciary.

[[Page S9374]]

  Mr. LEAHY. Mr. President, during the past decade we have witnessed 
tremendous development in the way video content is made available to 
consumers. Today, as a result of digital technology, we can watch 
movies, television programs, and other video not only on our television 
sets, but also on our computers, phones, and other mobile devices. In 
order to maximize the potential of digital content, Congress must 
ensure that our copyright and communications laws are modernized and 
updated to accommodate the digital revolution. Today, I join with 
Senators Sessions, Kohl, Hatch, and Kyl in introducing the Satellite 
Television Modernization Act of 2009. Our legislation will reauthorize, 
modernize, and simplify important portions of the statutory license 
used by satellite providers that will otherwise expire at the end of 
this year.
  The transition to digital television requires Congress to modernize 
the statutory copyright licenses that allow cable and satellite 
providers to retransmit the content of local broadcast stations. In 
February, many stations across the country, including those in Vermont, 
made the digital transition and can now offer multiple programming 
channels over a single, crystal-clear digital signal. In June, the 
remaining broadcast stations across the country completed the digital 
transition. The current statutory licenses, however, are based on the 
now outdated analog standard. In our reauthorization, we seek to ensure 
that the licenses work properly in the digital world.
  In June 2008, the U.S. Copyright Office issued a report on the 
statutory licenses, and offered recommendations on how to improve the 
current system. The Copyright Office's principal recommendation was to 
move toward abolishing the compulsory licenses, in particular the 
distant signal licenses. Short of that, the Copyright Office offered 
suggestions on how to harmonize and streamline the licenses.
  The legislation we introduce today draws on the recommendations of 
the Copyright Office and takes important steps toward limiting future 
reliance on the section 119 distant signal license used by satellite 
providers. This legislation will move locally oriented elements out of 
the distant signal license--such as the special exception that allows 
Vermonters in the State's southern-most counties to receive Vermont 
broadcast stations by satellite--and place them into the section 122 
license, which facilitates the retransmission of local content with the 
consent of the broadcaster. The bill will also fix an anomaly in the 
distant signal license, which will make it easier for satellite 
providers to serve local markets that are missing a network affiliate.
  Making these changes will improve the ability of satellite providers 
to deliver a full complement of network stations to consumers, as well 
as make it easier for them to offer local stations. In Vermont, these 
changes will have the additional benefit of fostering competition 
between DISH Network and DirecTV, by allowing DISH to offer Vermont 
broadcast stations in southern Vermont, a service DirecTV provides 
today. The legislation also adds a new provision to the local license 
that will allow satellite providers such as DISH to import a missing 
network station from an adjacent market when the local market is not 
served by all four principle networks, after the provider first obtains 
the station's consent. This new provision will make it more likely and 
reasonable for DISH to launch local service in these markets, which is 
good for local broadcasters, good for satellite providers, and good for 
consumers.
  These changes will not only improve the satellite licenses, but will 
begin the process of phasing out the distant signal license as 
satellite providers offer local service in more markets. As the distant 
signal license fades, Congress should follow the Copyright Office's 
suggestion and move ultimately toward a market-based system, in which 
statutory licenses are unnecessary.
  One further step we can take toward a marketplace model this year is 
to allow broadcast stations to opt-out of the statutory licenses. All 
non-broadcast channels carried by cable and satellite providers, such 
as ESPN and the USA Network, are able to aggregate a complex series of 
content rights, and negotiate for carriage in the free market. Local 
broadcasters should be permitted to do the same if they, too, are able 
to aggregate the necessary rights to license directly to cable and 
satellite providers. This is a proposal I expect the Judiciary 
Committee to examine as the bill moves through the mark up process. I 
encourage all industry participants to work with the Committee so that 
we can address any concerns about this market-based approach.
  Short of repealing the compulsory licenses, the Copyright Office 
recommended harmonizing the cable and satellite licenses in order to 
create regulatory parity between the two industries. The section 111 
license used by cable, for instance, is based on FCC rules that have 
long since been repealed, and the license itself has not been 
significantly updated since it was established more than 30 years ago. 
The arcane nature of the cable license can at times produce unintended 
results, such as cable companies paying copyright holders for content 
that consumers do not actually receive. This is referred to as the 
phantom signal problem. In contrast, satellite companies pay a flat, 
per subscriber rate based on consumers actually receiving a broadcast 
station. Comprehensive reforms to section 111 that aim to modernize the 
statute and create regulatory parity between cable and satellite 
providers would address these disparities. We take a more modest 
approach in the bill we introduce today. The legislation contains an 
amendment that will resolve the phantom signal issue. I appreciate that 
members of the content community and the cable system came together to 
find a solution on which they can all agree.
  The Satellite Television Modernization Act is one component of the 
reauthorization. Portions of the expiring law are within the 
jurisdiction of the Senate Committee on Commerce, and I look forward to 
working with the leadership of that Committee, and our counterparts in 
the House of Representatives, to enact legislation that once again 
improves the law by fostering competition, protecting broadcasters, and 
improving service to consumers.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1670

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Satellite Television 
     Modernization Act of 2009''.

     SEC. 2. LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY 
                   TRANSMISSIONS OF SUPERSTATIONS AND NETWORK 
                   STATIONS FOR PRIVATE HOME VIEWING.

       Section 119 of title 17, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) by striking ``subparagraphs (B) and (C)'' and inserting 
     ``subparagraph (B)''; and
       (II) by striking ``(5), (6), (7), and (8)'' and inserting 
     ``(4), (5), (6), and (7)'';

       (ii) in subparagraph (B)--

       (I) in clause (i), by striking the second sentence; and
       (II) in clause (ii)--

       (aa) in subclause (I)--
       (AA) by striking ``the Individual Location'' and all that 
     follows through ``No. 98-201,'' and inserting ``the 
     predictive digital model established by the Federal 
     Communications Commission,''; and
       (BB) by striking ``under section 339(c)(3) of the 
     Communications Act of 1934 (47 U.S.C. 339(c)(3))''; and
       (bb) in subclause (II), by striking ``section 339(c)(4) of 
     the Communications Act of 1934 (47 U.S.C. 339(c)(4))'' and 
     inserting ``rules established by the Federal Communications 
     Commission'';
       (iii) by striking subparagraph (C);
       (iv) by redesignating subparagraph (D) as subparagraph (C); 
     and
       (v) in subparagraph (C) (as so redesignated)--

       (I) in clause (i), by striking ``network station--'' and 
     all that follows through the period at the end and inserting 
     ``network station a list, aggregated by designated market 
     area (as that term is defined in section 122(j)), 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.'';
       (II) in clause (ii), by striking ``the network--'' and all 
     that follows through the period at the end and inserting 
     ``the network a

[[Page S9375]]

     list, aggregated by designated market area (as that term is 
     defined in section 122(j)), 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
       (III) in clause (iv), at the end of the second sentence, by 
     striking the ending quotation mark and semicolon;

       (B) by striking paragraph (3);
       (C) by redesignating paragraphs (4) through (14) as 
     paragraphs (3) through (13), respectively;
       (D) by amending paragraph (3) (as so redesignated) to read 
     as follows:
       ``(3) Statutory license where retransmissions into local 
     market available.--
       ``(A) 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 December 31, 2009; 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.
       ``(B) Other provisions not affected.--This paragraph shall 
     not affect the applicability of the statutory license to 
     secondary transmissions to unserved households included under 
     paragraph (11).
       ``(C) Waiver.--A subscriber who is denied the secondary 
     transmission of a network station under this paragraph 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 (47 U.S.C. 
     339(c)(2)) shall not constitute a waiver for purposes of this 
     subparagraph.
       ``(D) 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 zip 
     code as that subscriber or person.'';
       (E) in paragraph (4) (as so redesignated), by striking 
     ``section 509'';
       (F) in paragraph (6) (as so redesignated)--
       (i) in subparagraph (A)(ii), by striking ``$5'' and 
     inserting ``$250''; and
       (ii) in subparagraph (B)--

       (I) in clause (i), by striking ``$250,000'' and inserting 
     ``$2,500,000''; and
       (II) in clause (ii), by striking ``$250,000'' and inserting 
     ``$2,500,000''; and

       (G) by striking paragraph (15); and
       (H) by redesignating paragraph (16) as paragraph (14);
       (2) in subsection (b)--
       (A) by striking the subsection heading and inserting ``(b) 
     Deposits and Distribution of Royalty Fees.--''; and
       (B) in paragraph (1), by striking the matter following 
     subparagraph (B);
       (3) by amending subsection (c) to read as follows:
       ``(c) Adjustment of Royalty Fees.--
       ``(1) Applicability and determination of royalty fees.--
       ``(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 transmissions of 
     network stations and superstations shall be the appropriate 
     fee set forth in subchapter E of chapter III of title 37, 
     Code of Federal Regulations, as in effect on July 1, 2009, as 
     modified under this paragraph.
       ``(B) Fee set by voluntary negotiation.--On or before 
     January 4, 2010, 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 transmission of 
     network stations and superstations under subsection 
     (b)(1)(B).
       ``(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, 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)(i) Agreements binding on parties; filing of 
     agreements; public notice.--Voluntary agreements negotiated 
     at any time in accordance with this paragraph shall be 
     binding upon all satellite carriers, distributors, and 
     copyright owners 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 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 a proceeding pursuant to 
     subparagraph (F).
       ``(II) 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 Copyright Royalty Judges shall adopt the 
     royalty fees from the voluntary agreement for all satellite 
     carriers, distributors, and copyright owners without 
     convening a proceeding unless a party with an intent to 
     participate in the 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 in accordance 
     with this paragraph shall become effective on the date 
     specified in the agreement, and shall remain in effect until 
     December 31, 2014, or in accordance with the terms of the 
     agreement, whichever is later.
       ``(F) Proceeding to establish royalty fees.--
       ``(i) Notice of initiation of proceedings; voluntary 
     agreements.--On or before May 3, 2010, the Copyright Royalty 
     Judges shall cause notice to be published in the Federal 
     Register of the initiation of proceedings for the purpose of 
     determining the royalty fee to be paid for the secondary 
     transmission of primary transmission of network stations and 
     superstations under subsection (b)(1)(B) by satellite 
     carriers and distributors--

       ``(I) in the absence of a voluntary agreement filed in 
     accordance with subparagraph (D) that establishes royalty 
     fees to be paid by all satellite carriers and distributors; 
     or
       ``(II) if an objection to the fees from a voluntary 
     agreement submitted for adoption by the 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 proceeding and a 
     significant interest in the outcome of that proceeding.

     Such proceeding shall be conducted as provided under chapter 
     8 of this title.
       ``(ii) Establishment of royalty fees.--In determining 
     royalty fees under this paragraph, the Copyright Royalty 
     Judges shall establish fees for the secondary transmissions 
     of the primary transmission of network stations and 
     superstations that most clearly represent the fair market 
     value of secondary transmissions, except that the Copyright 
     Royalty Judges 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 
     Copyright Royalty Judges shall base their decision on 
     economic, competitive, and programming information presented 
     by the parties, including--

       ``(I) the competitive environment in which such programming 
     is distributed, the cost of similar signals in similar 
     private and compulsory license marketplaces, and any special 
     features and conditions of the retransmission marketplace;
       ``(II) the economic impact of such fees on copyright owners 
     and satellite carriers; and
       ``(III) the impact on the continued availability of 
     secondary transmissions to the public.

       ``(iii) Period during which decision of copyright royalty 
     judges effective.--The obligation to pay the royalty fee 
     established under a determination which is made by the 
     Copyright Royalty Judges under this paragraph shall be 
     effective as of January 1, 2010.
       ``(iv) Persons subject to royalty fee.--The royalty fee 
     referred to clause (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) Royalty fee annual adjustment.--The royalty fee 
     payable under subsection (b)(1)(B) for the secondary 
     transmission of the primary transmission of network stations 
     and superstations shall be adjusted annually by the Copyright 
     Royalty Judges 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 prior to December 
     1. Notification of the adjusted rates shall be published in 
     the Federal Register prior to December 1 of that year.'';
       (4) in subsection (d)--
       (A) in paragraph (10)--
       (i) by amending subparagraph (A) to read as follows:
       ``(A)(i) is located in a local market in which there is no 
     primary network station affiliated with such network licensed 
     to a community within such local market; or

[[Page S9376]]

       ``(ii) 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 that does not exceed the signal intensity standard in 
     section 73.622(e)(1) of title 47 of the Code of Federal 
     Regulations as in effect on January 1, 2010;'';
       (ii) in subparagraph (B), by striking ``(a)(14)'' and 
     inserting ``(a)(13)''; and
       (iii) in subparagraph (D), by striking ``(a)(12)'' and 
     inserting ``(a)(101'';
       (B) in paragraph (11), by striking ``, except that'' and 
     all that follows through ``located'';
       (C) by striking paragraph (12); and
       (D) by redesignating paragraph (13) as paragraph (12); and
       (5) by striking subsection (f).

     SEC. 3. LIMITATIONS ON EXCLUSIVE RIGHTS: SECONDARY 
                   TRANSMISSIONS BY SATELLITE CARRIERS WITHIN 
                   LOCAL MARKETS.

       Section 122 of title 17, United States Code, is amended--
       (1) by amending subsections (a), (b), and (c) to read as 
     follows:
       ``(a) Secondary Transmissions of Television Broadcast 
     Stations by Satellite Carriers.--
       ``(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 and low power stations.--A 
     secondary transmission of a performance or a display of a 
     work embodied in a primary transmission of a television 
     broadcast station or low power television station to 
     subscribers who receive secondary transmissions of primary 
     transmissions under paragraph (1) shall, if the secondary 
     transmission is made by a satellite carrier that complies 
     with the requirements of paragraph (1), be subject to 
     statutory licensing under this paragraph as follows:
       ``(A) Secondary transmissions of significantly viewed 
     signals.--The statutory license shall apply to the secondary 
     transmission of the primary transmission of a network station 
     or a superstation 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) Carriage of low power television stations.----
       ``(i) In general.--The statutory license 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.
       ``(ii) 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.
       ``(3) Special exceptions.--A secondary transmission of a 
     performance or a display of a work embodied in a primary 
     transmission of a television broadcast station to subscribers 
     who receive secondary transmissions of primary transmissions 
     under paragraph (1) shall, if the secondary transmission is 
     made by a satellite carrier that complies with the 
     requirements of paragraph (1), be subject to statutory 
     licensing under this paragraph as follows:
       ``(A) States with single full-power network station.--In a 
     State in which there is licensed by the Federal 
     Communications Commission a single full-power station that 
     was a network station on January 1, 1995, the statutory 
     license provided for in this paragraph shall apply to the 
     secondary transmission by a satellite carrier of the primary 
     transmission of that station to any subscriber in a community 
     that is located within that State and that is not within the 
     first 50 television markets as listed in the regulations of 
     the Commission as in effect on such date (47 C.F.R. 76.51).
       ``(B) States with all network stations and superstations in 
     same local market.--In a State in which all network stations 
     and superstations 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 this paragraph 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).
       ``(C) Additional stations.--In the case of that State in 
     which are located 4 counties that--
       ``(i) on January 1, 2004, were in local markets principally 
     comprised of counties in another State; and
       ``(ii) had a combined total of 41,340 television 
     households, according to the U.S. Television Household 
     Estimates by Nielsen Media Research for 2004,

     the statutory license provided under this paragraph shall 
     apply to secondary transmissions by a satellite carrier to 
     subscribers in any such county of the primary transmissions 
     of any network station located in that State, if the 
     satellite carrier was making such secondary transmissions to 
     any subscribers in that county on January 1, 2004.
       ``(D) Certain additional stations.--If 2 adjacent counties 
     in a single State are in a local market comprised principally 
     of counties located in another State, the statutory license 
     provided for in this paragraph shall apply to the secondary 
     transmission by a satellite carrier to subscribers in those 2 
     counties of the primary transmissions of any network station 
     located in the capital of the State in which such 2 counties 
     are located, if--
       ``(i) the 2 counties are located in a local market that is 
     in the top 100 markets for the year 2003 according to Nielsen 
     Media Research; and
       ``(ii) the total number of television households in the 2 
     counties combined did not exceed 10,000 for the year 2003 
     according to Nielsen Media Research.
       ``(E) Networks of noncommercial educational broadcast 
     stations.--In the case of a system of 3 or more noncommercial 
     educational broadcast stations licensed by a single State, 
     political, educational, or special purpose subdivision of a 
     State, or a public agency, the statutory license provided for 
     in this paragraph shall apply to the secondary transmission 
     of that system to any subscriber in any county or county 
     equivalent within that State that is located in a designated 
     market that is not otherwise eligible to receive secondary 
     transmissions of a noncommercial television broadcast station 
     located within that State pursuant to paragraph (1). If a 
     satellite carrier makes secondary transmissions to an 
     adjacent underserved county, local noncommercial educational 
     broadcast stations shall not be repositioned in the channel 
     lineup as a consequence of these retransmissions.
       ``(4) Short markets.--A secondary transmission of a 
     performance of a display of a work embodied in a primary 
     transmission of a television broadcast station to subscribers 
     who receive secondary transmissions of primary transmissions 
     under paragraph (1) shall be subject to statutory licensing 
     under this paragraph if the secondary transmission is of a 
     primary transmission of a network station from a market 
     adjacent to such local market and no station affiliated with 
     such network is licensed to a community within the local 
     market.
       ``(5) Applicability of royalty rates.--The royalty rates 
     under section 119(b)(1)(B) shall apply to the secondary 
     transmissions to which the statutory license under paragraphs 
     (3) and (4) apply.
       ``(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) a list, aggregated by designated market area (as that 
     term is defined in subsection (j)), 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); and
       ``(B) a list, to be prepared and submitted separately from 
     the list required under subparagraph (A), aggregated by 
     designated market area (by name and address, including street 
     or rural route number, city, State, and zip code), which 
     shall indicate those subscribers being served pursuant to 
     paragraphs (2), (3), or (4) of subsection (a).
       ``(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) a list, aggregated by designated market area (as that 
     term is defined in subsection (j)), 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; 
     and
       ``(B) a list, to be prepared and submitted separately from 
     the list required under subparagraph (A), 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 
     paragraphs (2), (3), or (4) of subsection (a) has been added 
     or dropped.
       ``(3) Use of subscriber information.--Subscriber 
     information submitted by a satellite

[[Page S9377]]

     carrier under this subsection may be used only for the 
     purposes of monitoring compliance by the satellite carrier 
     with this section.
       ``(4) Requirements of networks.--The submission 
     requirements of this subsection shall apply to a satellite 
     carrier only if the network to which the submissions are to 
     be made places on file with the Register of Copyrights a 
     document identifying the name and address of the person to 
     whom such submissions are to be made. The Register of 
     Copyrights shall maintain for public inspection a file of all 
     such documents.
       ``(c) No Royalty Fee Required for Certain Secondary 
     Transmissions.--A satellite carrier whose secondary 
     transmissions are subject to statutory licensing under 
     paragraphs (1) and (2) of subsection (a) shall have no 
     royalty obligation for such secondary transmissions.'';
       (2) in subsection (f)--
       (A) in paragraph (1)(B), by striking ``$5'' and inserting 
     ``$250''; and
       (B) in paragraph (2)--
       (i) in subparagraph (A)(ii), by striking ``$250,000'' and 
     inserting ``$2,500,000''; and
       (ii) in subparagraph (B)(ii), by striking ``$250,000'' and 
     inserting ``$2,500,000'';
       (3) in subsection (j)--
       (A) by redesignating paragraphs (3), (4), and (5) as 
     paragraphs (4), (5), and (6), respectively; and
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) Low power television station.--The term `low power 
     television station' means a low power television 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.''.

     SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS.

       Section 338(a) of the Communications Act of 1934 (47 U.S.C. 
     338(a)) is amended--
       (1) by amending the first paragraph (3) to read as follows:
       ``(3) Carriage of low power, significantly viewed, and 
     special exception stations optional.--No station whose signal 
     is provided under paragraph (2) or (3) of section 122(a) of 
     title 17, United States Code, shall be entitled to insist on 
     carriage under this section, regardless of whether the 
     satellite carrier provides secondary transmissions of the 
     primary transmissions of other stations in the same local 
     market pursuant to such section 122, nor shall any such 
     carriage be considered in connection with the requirements of 
     subsection (c) of this section.''; and
       (2) by redesignating the second paragraph (3) (relating to 
     effective date) and paragraph (4) as paragraphs (4) and (5), 
     respectively.

     SEC. 5. EXTENSION OF AUTHORITY.

       Section 4(a) of the Satellite Home Viewer Act of 1994 (17 
     U.S.C. 119 note; Public Law 103-369) is amended by striking 
     ``December 31, 2009'' and inserting ``December 31, 2014''.

     SEC. 6. MODIFICATIONS TO THE CABLE STATUTORY LICENSE.

       (a) Update and Clarification of Royalty Calculation 
     Methodology.--Section 111(d)(1) of title 17, United States 
     Code, is amended by striking subparagraphs (B), (C), and (D) 
     and inserting the following:
       ``(B) except in the case of a cable system whose royalty 
     fee is specified in subparagraph (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) 1.064 per centum for the privilege of further 
     transmitting any nonnetwork 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 clauses (ii) 
     through (iv).
       ``(ii) 1.064 per centum of such gross receipts for the 
     first distant signal equivalent.
       ``(iii) 0.701 of 1 per centum of such gross receipts for 
     each of the second, third, and fourth distant signal 
     equivalents.
       ``(iv) 0.330 of 1 per centum of such gross receipts for the 
     fifth distant signal equivalent and each distant signal 
     equivalent thereafter;
       ``(C) in computing the amounts payable under clauses (ii) 
     through (iv), any fraction of a distant signal equivalent 
     shall be computed at its fractional value or 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;
       ``(D) in computing the amounts payable under clauses (ii) 
     through (iv), if a cable system provides a secondary 
     transmission of a primary transmitter to some but not all 
     communities served by that cable system, the gross receipts 
     and the distant signal equivalent values for each secondary 
     transmission shall be derived solely on the basis of the 
     subscribers in those communities where the cable system 
     provides each such secondary transmission, provided, however, 
     that the total royalty fee for the period paid by such system 
     shall in no event be less than the royalty fee calculated in 
     accordance with clause (i) multiplied by the gross receipts 
     from all subscribers to the system; and provided further, 
     that a cable system that on a statement submitted prior to 
     the date of enactment of the Satellite Television 
     Modernization Act of 2009, computed its royalty fee 
     consistent with the methodology in this subparagraph or that 
     amends a statement filed prior to the date of enactment of 
     such Act to compute the royalty fee due using this 
     methodology shall not be subject to an action for 
     infringement, or eligible for any royalty refund, 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, gross receipts 
     of the cable system for the purpose of this subparagraph 
     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. The royalty 
     fee payable under this subparagraph shall be 0.5 of 1 per 
     centum, regardless of the number of distant signal 
     equivalents, if any; and
       ``(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 subparagraph 
     shall be--
       ``(i) 0.5 of 1 per centum of any gross receipts up to 
     $263,800; and
       ``(ii) 1 per centum of any gross receipts in excess of 
     $263,800 but less than $527,600 regardless of the number of 
     distant signal equivalents, if any.''.
       (b) No Quinquennial Adjustments Until 2015.--Section 804(b) 
     of title 17, United States Code, is amended by striking 
     ``2005'' each place that term appears and inserting ``2015''.
       (c) Acceptance of Additional Deposits.--Any royalty fee 
     payments received by the Copyright Office from cable systems 
     for the secondary transmission of primary broadcast 
     transmitters (as such terms are defined in subsection (f) of 
     section 111 of title 17, United States Code) that are in 
     addition to the payments calculated and deposited in 
     accordance with subsection (d) of such section 111 shall be 
     deemed to have been deposited for the particular accounting 
     period during which they are received and shall be 
     distributed as specified in subsection (d) of such section 
     111.
       (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 (a), shall take 
     effect beginning with the statement of account covering the 
     first accounting period in 2010.

  Mr. HATCH. Mr. President, I rise today to introduce with my colleague 
from Vermont, Senator Leahy, the Satellite Television Modernization 
Act. I also note the efforts of Senators Sessions, Kohl, and Kyl in 
crafting this bipartisan bill.
  It is hard to believe that 5 years have transpired since we passed 
the Satellite Home Viewer Extension Act, SHVERA, of 2004. Much has 
occurred since that time, including the transition from analog to 
digital signals, which occurred in June. That is why the proposed 
legislation will not only reauthorize the statutory license used by 
satellite television providers, but will bring all of the statutory 
licenses into the digital age so that consumers can receive a good 
quality digital signal. Additionally, S. 1670 expands access to low 
power stations by broadening the license for low power stations to 
cover the entire local market; permits satellite providers to carry a 
noncommercial educational broadcast station if a station is part of a 
state-wide network; improves the ability of both DirecTV and DISH 
Network to provide local signals to local markets; and addresses the 
``phantom signal'' issue, where currently cable providers may be 
required to pay royalty fees under section 111 based on subscribers who 
do not receive the content for which the royalty is being paid.
  I hasten to point out, however, that much more needs to be done to 
move away from government regulation and toward a marketplace where 
satellite providers and cable providers can compete based on market 
forces. This is not a new issue for this body. In fact, during the 2004 
reauthorization of SHVERA, Congress required that the U.S. Copyright 
Office prepare a report to make recommendations on the operations of, 
and revisions to, sections 111, 119, and 122 of the Copyright Act. The 
Copyright Office provided this report to Congress on June 30, 2008.
  While I will not provide a line by line summary of the Report, I will 
underscore some key findings that the Copyright Office, under the 
leadership of Register of Copyrights Marybeth Peters, suggests that 
Congress consider

[[Page S9378]]

when legislating in this area of the law. Specifically, the Copyright 
Office found that ``below-market rates may have been justifiable when 
cable and satellite were nascent industries and needed a mechanism to 
allow them to serve their subscriber base with valuable distant 
signals.'' The Report continues by stating that ``the current 
multichannel video distribution marketplace is robust and has, for a 
long time, overshadowed the broadcast industry.'' Moreover, the 
Copyright Office further argues that ``it is now time to phase out 
section 111 and section 119 so that copyright owners can negotiate 
market rates for the carriage of programming.''
  I agree with the Copyright Office that something needs to be done to 
``phase out'' these compulsory licenses. There is no longer any reason 
that the cable and satellite industries need a government-sponsored 
subsidy--paid for by program providers--for the right to retransmit 
broadcast signals. I believe we can devise a way that would phase out 
these compulsory licenses without disrupting the market. In fact, it is 
already being done today, as cable and satellite services license 
programming for more than 550 non-broadcast networks directly in the 
marketplace without a need for a compulsory license.
  Some have suggested a market trigger mechanism that would create an 
opportunity for, but not require, copyright owners to license their 
copyrighted programming on broadcast television in the same manner as 
they do currently for cable channels like TBS, ESPN, Nickelodeon, 
Disney Channel, FX, and Bravo. Copyright owners would have a choice 
between continuing to operate under the compulsory license, or if they 
prefer, licensing cable and satellite retransmission of their works 
directly through the free market as is done every day for the hundreds 
of non-broadcast cable channels.
  I hope that industry stakeholders will participate in creating a 
practical and reasonable approach to rectifying this important issue. 
At a minimum, it is time to let program creators and distributors have 
the option to determine the terms and conditions for their intellectual 
property rights. I am pleased that Senate Judiciary Committee Chairman 
Pat Leahy is committed to exploring viable options for a marketplace 
model, and I look forward to working with him and our colleagues on 
this and other issues before final passage of this bill.
                                 ______