[Congressional Record (Bound Edition), Volume 145 (1999), Part 5]
[Extensions of Remarks]
[Pages 7429-7431]
[From the U.S. Government Publishing Office, www.gpo.gov]




  INTRODUCTION OF THE SATELLITE COPYRIGHT, COMPETITION, AND CONSUMER 
                         PROTECTION ACT OF 1999

                                 ______
                                 

                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                         Monday, April 26, 1999

  Mr. COBLE. Mr. Speaker, I am pleased to introduce the Satellite 
Copyright, Competition, and Consumer Protection Act of 1999. This bill 
will improve the copyright compulsory license and the conditions of 
that 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.
  This is a very dynamic time for the multi-channel video marketplace, 
particularly for the satellite industry. The satellite copyright 
compulsory license is set to expire at the end of this year at a time 
when the industry enjoys a record number of subscribers. In the 
meantime, a federal court decision threatens to disconnect hundred of 
thousands of satellite customers from their distant network signals. 
Additionally, several other copyright restrictions still prevent the 
satellite industry from competing with the cable television industry on 
an even playing field.
  The Copyright Act of 1976 bestowed on cable television a permanent 
copyright compulsory license which 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 from becoming a true competitor to cable. Technology has 
changed significantly since the cable and satellite compulsory licenses 
were created. Satellite carriers are starting to 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 this year, and the Federal Communications 
Commission has reported time and again 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 ``Satellite Copyright, Competition, and Consumer 
Protection Act of 1999'' makes the following changes to the Satellite 
Home Viewer Act:
  It reauthorizes the satellite compulsory license for five years.
  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 provides a discount for the copyright fees paid by the satellite 
carriers.
  It allows satellite carriers to retransmit a local television station 
to households within that station's local market, just like cable does, 
conditioned upon meeting requirements of the Communications Act.
  It allows satellite carriers to rebroadcast a national signal of the 
Public Broadcasting Service.
  It postpones the currently scheduled shut-off of distant network 
service until the FCC develops a new predictive model to more 
accurately determine who is entitled to receive distant network 
signals.
  I commend the work of Representative Billy Tauzin, Chairman of the 
Commerce Subcommittee on Telecommunications, Trade and Consumer 
Protection, and with Representative Tom Bliley, Chairman of the 
Committee on Commerce, on those provisions of this legislation 
complimentary to the copyright provisions. Their leadership and 
partnership have been and will continue to be invaluable and necessary 
in guaranteeing true competition between the satellite and cable 
industries, particularly as this legislation moves forward towards a 
conference.
  I also want to recognize the leadership and care that Senator Orrin 
Hatch and Senator Patrick Leahy, Chairman and Ranking Member of the 
Senate Committee on the Judiciary, have paid to the development of this 
important bill. We have worked together closely on its provisions and I 
look forward to continuing our work together as our bills move toward 
completion.
  Let me make clear that this bill is a compromise, carefully balanced 
to ensure competition. Many doubters thought our two committees could 
never work together to forge such a compromise. I believe it contains 
the balance necessary to allow this bill to become law this session and 
I urge all Members to support its passage.


[[Page 7430]]

                           Section-by-Section


         TITLE I--SATELLITE COMPETITION AND CONSUMER PROTECTION

     Section 101. Short title
       The name of title I of the bill is the ``Satellite 
     Copyright, Competition, and Consumer Protection Act of 
     1999.''
     Section 102. Retransmission consent
       Section 102 amends section 325 of the Communications Act to 
     provide that satellite carriers 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 103 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 under the must-
     carry provisions.
       Section 102 exempts carriage of certain broadcast stations 
     from the retransmission requirement. Retransmission consent 
     does not apply to noncommercial broadcasting stations, and 
     superstations that existed as superstations on May 1, 1991, 
     were retransmitted by satellite carriers under the section 
     119 satellite compulsory license as of July 1, 1998, and 
     the retransmissions were in compliance with FCC rules 
     governing network nonduplication, syndicated exclusivity 
     and sports blackout.
       The retransmission consent exemption for satellite-
     delivered distant network signals is eliminated 7 months 
     after passage of the Act. Elimination of this exemption will 
     foster retransmission of local network stations by satellite 
     carriers by requiring satellite carriers to obtain 
     retransmission permission from the distant network stations 
     they wish to provide to their subscribers.
       Section 102 also directs the Federal Communications 
     Commission, within 45 days of enactment, to commence a 
     rulemaking proceeding to adopt regulations governing the 
     exercise of retransmission rights for satellite 
     retransmissions. In addition to establishing election periods 
     for must-carry/retransmission consent rights, the Commission 
     is directed to establish regulations, effective until January 
     1, 2006, that prohibit broadcasters from engaging in 
     discriminatory practices, understandings, arrangements and 
     activities, including exclusive contracts for carriage, that 
     prevent any multichannel video programming distributor from 
     obtaining retransmission consent.
     Section 103. Must-carry for satellite carriers retransmitting 
         television broadcast signals
       Section 103 of the bill creates must-carry obligations for 
     satellite carriers retransmitting television broadcast 
     signals, effective on January 1, 2002. The provisions are 
     similar to those applicable to the 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 102 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.
       Section 103 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 some 
     channel positioning rights and are required to provide a good 
     quality signal to the satellite carrier's local receive 
     facility in order to assert must-carry rights. Satellite 
     carriers are forbidden from obtaining compensation from local 
     broadcasters in exchange for carriage. Section 103 also 
     provides a means for broadcasters to seek redress from the 
     Federal Communications Commission for violations of the must-
     carry obligations.
       The Federal Communications Commission is directed to adopt 
     regulations within 6 months of enactment of the legislation 
     to implement the must-carry obligations for satellite.
     Section 104. Nonduplication of programming broadcast by local 
         stations
       Section 104 of the bill directs the Federal Communications 
     Commission, within 45 days of enactment, to commence 
     rulemaking proceedings to adopt network nonduplication, 
     syndicated exclusivity and sports blackout rules applicable 
     to satellite retransmission of television broadcast signals. 
     To the extent possible, the Commission shall model its new 
     regulations after those that currently apply to the cable 
     industry.
       The bill sets forth express network nonduplication 
     provisions that will solve the problems associated with 
     satellite delivery of network signals and the recent shut-
     offs of network signals that have occurred as the result of 
     federal court injunctions. This is accomplished through 
     improvement of the signal intensity standard and predictive 
     model, and creation of a system that allows subscribers who 
     do not receive an adequate over-the-air signal from a network 
     broadcaster to obtain a waiver to receive satellite service 
     of that network.
       The bill establishes that the current over-the-air signal 
     intensity standard is the Grade B standard identified in the 
     FCC's rules. Within 6 months of enactment, the Commission is 
     directed to develop and prescribe by rule a point-to-point 
     predictive model for reliably and presumptively determining 
     the ability of individual locations to receive an over-the-
     air signal of Grade B intensity. Such predictive model will 
     take into account terrain, building structures, and other 
     land cover variations.
       For those subscribers targeted by the predictive model as 
     receiving an adequate over-the-air signal, but do not, there 
     are two forms of relief. First, the subscriber may request a 
     waiver from the local network broadcaster to receive 
     satellite-delivered network service. The local broadcaster is 
     given 30 days to issue a waiver or reject the request. If the 
     station rejects the request, then the subscriber may submit a 
     request to his/her satellite carrier that a test be conducted 
     as the subscriber's household. The party conducting the test 
     shall be designated by the satellite carrier and the local 
     broadcaster or, if they cannot agree, the FCC. The cost of a 
     test will be borne by the satellite carrier and the local 
     broadcaster equally, and the subscriber shall not have any 
     responsibility for the cost.
       If a subscriber has installed satellite reception equipment 
     on a recreational vehicle, that vehicle shall be exempt from 
     a network broadcaster's nonduplication protection rights if 
     the subscriber provides a local broadcaster seeking to 
     enforce those rights with verification of the motor vehicle 
     registration, license, and proof of ownership of such 
     vehicle. Recreational vehicles to not include any 
     residential manufactured homes.
       Not later than 2 years after enactment, the Commission 
     shall conduct an inquiry to determine whether the current 
     Grade B signal intensity standard is adequate to measure 
     subscribers' ability to receive an acceptable over-the-air 
     television broadcast signal. In conducting this inquiry, the 
     Commission will consider the number of subscribers requesting 
     waivers, the number of denials, the number of tests requested 
     and their results, the results of any consumer research study 
     undertaken to carry out the purpose of section 104 of the 
     bill, and the extent to which consumers are not legally 
     entitled to install broadcast reception devices assumed in 
     the Commission's signal standard. The Commission will report 
     the findings of its inquiry to Congress not later than the 
     end of the 2-year period and shall complete any action 
     necessary to revise the Grade B signal intensity standard and 
     the predictive model.
     Section 105. Consent of membership to retransmission of 
         public Broadcasting Service satellite feed
       Section 105 amends the Communications Act to require the 
     Public Broadcasting Service to certify on an annual basis to 
     the Corporation for Public Broadcasting that the majority of 
     its membership supports, or does not support, the 
     retransmission by satellite carriers of the Public 
     Broadcasting Service satellite feed. The Public Broadcasting 
     Service is required to provide notice of the certification to 
     each satellite carrier retransmitting the satellite feed.
     Section 106. Definitions
       Section 106 amend the Communications Act to provide 
     definitions of a ``local market,'' ``satellite carrier,'' and 
     ``television network/television network station'' for 
     purposes of the amendments made by the bill.
     Section 107. Completion of biennial regulatory review
       Within 6 months of the date of enactment, the FCC is 
     directed to complete its biennial review required by section 
     202(h) of the Telecommunications Act of 1996.
     Section 108. Result of loss of network service
       Section 108 provides that until the FCC implements its new 
     regulations governing network nonduplication protection for 
     broadcasters against satellite carriers, if a satellite 
     subscriber has lost his/her network service as a result of 
     the provisions of section 119 of the Copyright Act, the 
     satellite carrier terminating such service must, upon request 
     of the subscriber, provide the subscriber free-of-charge an 
     over-the-air television broadcast receiving antenna that will 
     provide the subscriber with an over-the-air signal of grade B 
     intensity for those network stations that were terminated as 
     a result of section 119.
     Section 109. Interim provisions
       Section 109 provides that no subscriber of satellite 
     service who lives outside of the Grade A contour of a network 
     station shall have his or her satellite service disconnected 
     as a result of a finding of copyright infringement under 
     Section 119 of the Copyright Act until the FCC has issued and 
     implemented a new predictive model under this Act.


 TITLE II--SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS WITHIN LOCAL 
                                MARKETS

     Section 201. Short title
       The name of title II of the bill is the ``Satellite 
     Copyright Compulsory License Improvement Act.''
     Section 202. Limitations on exclusive rights; secondary 
         transmissions by satellite carriers within local markets
       Section 202 of the bill creates a new copyright compulsory 
     license, found at section

[[Page 7431]]

     122 of title 17 of the United States Code, for the 
     retransmission of television broadcast stations by satellite 
     carriers to subscribers located within the local markets of 
     those stations. In order to be eligible for this compulsory 
     license, a satellite carrier must be in full compliance with 
     all applicable rules and regulations of the Federal 
     Communications Commission, including any must-carry 
     obligations imposed upon the satellite carrier by the 
     Commission or by law.
       Because the copyrighted programming contained on local 
     broadcast programming is already licensed with the 
     expectation that all viewers in the local market will be able 
     to view the programming, the new section 122 license is a 
     royalty-free license. Satellite carriers must, however, 
     provide local broadcasters with lists of their subscribers 
     receiving local stations so that broadcasters may verify that 
     satellite carriers are making proper use of the license. The 
     subscriber information supplied to broadcasters is for 
     verification purposes only, and may not be used by 
     broadcasters for other reasons.
       Satellite carriers are liable for copyright infringement, 
     and subject to the full remedies of the Copyright Act, if 
     they violate one or more of the following requirements of 
     the section 122 license. First, satellite carriers may not 
     in any way willfully alter the programming contained on a 
     local broadcast station.
       Second, satellite carriers may not use the section 122 
     license to retransmit a television broadcast station to a 
     subscriber located outside the local market of the station. 
     If a carrier willfully or repeatedly violates this limitation 
     on a nationwide basis, then the carrier may be enjoined from 
     retransmitting that signal. If the broadcast station involved 
     is a network station, then the carrier could lose the right 
     to retransmit any network stations. If the willful or 
     repeated violation of the restriction is performed on a local 
     or regional basis, then the right to retransmit the station 
     (or, if a network station, then all networks) can be enjoined 
     on a local or regional basis, depending upon the 
     circumstances. In addition to termination of service on a 
     nationwide or local or regional basis, statutory damages are 
     available up to $250,000 for each 6-month period during which 
     the pattern or practice of violations was carried out. 
     Satellite carriers have the burden of proving that they are 
     not improperly making use of the section 122 license to serve 
     subscribers outside the local markets of the television 
     broadcast stations they are providing.
       The section 122 license is not limited to private home 
     viewing, as is the section 119 compulsory license, so that 
     satellite carriers may make use of it to serve commercial 
     establishments as well as homes. The local market of a 
     television broadcast station for purposes of the section 122 
     license will be defined by the Federal Communications 
     Commission as part of its broadcast carriage rules for 
     satellite carriers.
     Section 203. Extension of effect of amendments to section 119 
         of title 17, United States Code
       Section 203 of the bill extends the expiration date of the 
     current section 119 satellite compulsory license from 
     December 31, 1999, to December 31, 2004.
     Section 204. Computation of royalty fees for satellite 
         carriers
       Section 204 of the bill reduces the 27-cent royalty fee 
     adopted last year by the Librarian of Congress for the 
     retransmission of network and superstation signals by 
     satellite carriers under the section 119 license. The 27-cent 
     rate for superstations is reduced by 30 percent per 
     subscriber per month, and the 27-cent rate for network 
     stations is reduced by 45 percent per subscriber per month.
       In addition, section 119(c) of title 17 is amended to 
     clarify that in royalty distribution proceedings conducted 
     under section 802 of the Copyright Act, the Public 
     Broadcasting Service may act as agent for all public 
     television copyright claimants and all Public Broadcasting 
     Service member stations.
     Section 205. Public Broadcasting Service satellite feed; 
         definitions
       Section 205 of the bill amends the section 119 satellite 
     compulsory license for retransmission of distant signals by 
     providing that satellite carriers may deliver the national 
     satellite feed of the Public Broadcasting Service under the 
     section 119 license. PBS will supply its national feed to 
     satellite carriers in lieu of the signals of its affiliates, 
     as long as PBS certifies to the Corporation for Public 
     Broadcasting on an annual basis, as provided in section 105 
     of the bill, that the affiliates support the national feed. 
     Such certification is not required until satellite carriers 
     provide their subscribers with local PBS affiliates, or two 
     years from date of enactment, whichever is earlier.
     Section 206. Distant signal retransmissions
       Section 206 of the bill amends the section 119 satellite 
     compulsory license for the retransmission of distant signals 
     by removing the ``Unserved household'' restriction from the 
     Copyright Act. Instead of the ``unserved household'' use of 
     the section 119 license by satellite carriers is contingent 
     upon compliance with the FCC's nonduplication rules for 
     satellite prescribed in section 104 of the bill.
     Section 207. Application of Federal Communications Commission 
         regulations
       Section 207 of the bill amends the section 119 satellite 
     compulsory license to clarify that satellite carriers' 
     eligibility for the license is contingent upon their full 
     compliance with all Federal Communications Commission rules 
     governing carriage of television broadcast signals.
     Section 208. Study
       Section 208 provides that the Copyright Office and the NTIA 
     shall jointly study the proliferation of local-to-local 
     service to smaller markets.
     Section 209. Effective date
       The amendments made by the bill take effect on July 1, 
     1999, the first day of a new copyright accounting period for 
     satellite carriers, except the amendments made by section 205 
     and 208 which take effect upon date of enactment.

     

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