[Congressional Record (Bound Edition), Volume 150 (2004), Part 17]
[Extensions of Remarks]
[Pages 23675-23677]
[From the U.S. Government Publishing Office, www.gpo.gov]




H.R. 4518, THE SATELLITE HOME VIEWER EXTENSION AND REAUTHORIZATION ACT 
                                OF 2004

                                 ______
                                 

                            HON. FRED UPTON

                              of michigan

                    in the house of representatives

                       Tuesday, November 16, 2004

  Mr. UPTON. Mr. Speaker, I would like to submit the following Remarks 
for the Record. We have before us H.R. 4518, the ``Satellite Home 
Viewer Extension and Reauthorization Act of 2004'' (SHVERA). H.R. 4518 
reauthorizes certain expiring communications and copyright act 
provisions that govern the retransmission of broadcast television 
signals by direct broadcast satellite (DBS) providers such as DirecTV 
and EchoStar. It also modernizes other provisions to enhance consumer 
choice, increase parity between satellite and cable operators, and 
further promote competition. Because the bill implicates both 
communications and copyright issues, the House Energy and

[[Page 23676]]

Commerce Committee and the House Judiciary Committee have worked 
closely in drafting the legislation.
  Indeed, pursuant to a compromise between the House Energy and 
Commerce Committee and the House Judiciary Committee, H.R. 4518 has now 
been amended to combine its copyright provisions with the 
Communications Act provisions of H.R. 4501. H.R. 4501 resulted from an 
extensive examination of satellite television issues in the House 
Energy and Commerce Committee. The Subcommittee on Telecommunications 
and the Internet held an oversight hearing on March 10, 2004, and a 
legislative hearing on April 1, 2004. The Subcommittee then marked up 
legislation on April 28, 2004, and the full Committee marked up 
legislation on June 3, 2004. That legislation became H.R. 4501. The 
Committee filed a report on H.R. 4501 (H. Rept. 108-634) on July 22, 
2004.
  What follows is a section-by-section analysis of some of the 
Communications provisions in Title II of H.R. 4518, as amended, that 
have changed from the provisions that originated in H.R. 4501. Mr. 
Barton, Chairman of the House Energy and Commerce Committee, has also 
addressed some of the changes.


               Section 202. Cable/Satellite Comparability

  Section 340(f) creates a mechanism to enforce the new provisions 
regarding satellite delivery of significantly viewed signals. Under 
section 340(f)(1), the FCC may issue a cease and desist order if it 
finds in response to a complaint that satellite operators are carrying 
broadcast signals in violation of Section 340. If a broadcast station 
seeks damages, section 340(f)(1)(A) authorizes the FCC to award the 
station up to $50 per subscriber illegally served, per station 
illegally carried, per day of the violation if the FCC finds that the 
satellite operator did not have a good-faith belief that provision of 
the signal was lawful. Conversely, if a broadcaster seeks damages and 
the FCC finds that the broadcaster's claims were made in bad faith, 
section 340(f)(1)(B) allows the FCC to award the satellite operator up 
to $50 per subscriber, per station, per day that the broadcaster 
alleged the satellite operator was serving in violation of Section 340. 
If the broadcaster does not seek damages, however, the FCC may not 
grant damages to either the broadcaster or the satellite operator. 
Section 340(f)(2) gives the FCC 180 days from the submission of a 
complaint to render a decision. If the pleadings indicate that material 
facts underlying the case are subject to genuine dispute, the FCC may--
but is not required--to hear witnesses. Section 340(f)(3) makes clear 
that an FCC proceeding under Section 340 is available in addition to 
any remedies that may be available under the Copyright Act. For 
example, a broadcaster who also holds copyrights in the programming it 
carries might bring a claim before the FCC if it believes a satellite 
operator has carried a signal in a way that violates the Communications 
Act conditions for providing significantly viewed signals, as well as a 
suit in court if it believes that the same carriage also violates the 
terms under which a compulsory license is available under the Copyright 
Act. Section 340(f)(4) makes clear that any action or inaction by the 
FCC in response to a section 340 complaint shall have no bearing on a 
copyright suit, and that filing a section 340 complaint with the FCC is 
not a prerequisite for filing a suit in court alleging that carriage of 
a purportedly significantly viewed signal has violated a copyright.
  Section 340(g) requires satellite operators to give local 
broadcasters 60 days notice before retransmitting into a market the 
signal of distant stations that are significantly viewed over the air 
in the local market, and to list on their web sites the significantly 
viewed signals they carry. This provision is intended to help make 
consumers aware of what signals the satellite operators are offering. 
It is also intended to help local broadcasters monitor satellite 
compliance with the conditions SHVERA creates for the provision of 
significantly viewed signals.
  Section 340(h)(1) gives the FCC until April 30, 2005, to revise its 
rules so that a network station may elect ``carry-one, carry-all 
status'' from a satellite operator on a community-by-community basis 
within a local market. Under current law, when a satellite operator 
offers local-into-local service in a market, the local broadcasters may 
choose between carry-one, carry-all status and retransmission consent. 
If the local broadcaster elects carry-one, carry-all status, the 
satellite operator must carry the station, but the station is not 
entitled to compensation. If the station chooses retransmission 
consent, the broadcaster can try to negotiate for compensation, but 
runs the risk of not getting carried at all.
  Because cable systems are subject to local franchising, each 
community within a local market generally has a separate cable system. 
If a cable system is carrying a significantly viewed signal in a 
community, a local broadcaster of the same network can elect must-carry 
for that system, but still negotiate retransmission consent for cable 
systems elsewhere in the local market where no significantly viewed 
signal for the same network is being carried.
  Because satellite operators have a nationwide--rather than local-
franchise-based--service area, however, local broadcasters ordinarily 
must choose between carry-one, carry-all status and retransmission 
consent as an all-or-nothing proposition throughout the entire local 
market. To accommodate the new significantly viewed authority for 
satellite operators and to recreate, as best as possible, a similar 
bargaining framework for local broadcasters as exists with cable 
systems, section 340(h)(1) allows a local broadcaster to elect carry-
one, carry-all status in communities with a significantly viewed signal 
from the same network, while continuing to negotiate retransmission 
consent in other communities in the market.
  To ease the administrative burden on the satellite operator, section 
340(h)(2) specifies that the community-by-community elections within a 
local market shall take place in a unified negotiation between each 
satellite operator and broadcaster. There is no particular time limit 
on the negotiation. Nor must it take place in one sitting. The 
broadcaster shall, however, ``lay all its elections on the table at 
once'' so that the satellite operator can see the entire picture in 
anticipation of any retransmission consent negotiations that may be 
necessary in the communities where the broadcaster does not elect 
``carry one, carry all.''
  To facilitate the community-by-community election process, section 
340(h)(3)(A) gives the FCC until April 30, 2005, to revise its rules to 
require satellite operators to notify broadcasters in advance of any 
communities in which they intend to carry significantly viewed signals. 
The satellite operators are permitted to carry significantly viewed 
signals only in communities for which the satellite operators provide 
such notice. Section 340(h)(3)(B) recognizes that a satellite carrier 
could begin importing a ``significantly viewed'' signal after the 
expiration of a long-term retransmission consent contract but before 
the next three-year election cycle would allow the television station 
to choose between retransmission consent and carry one, carry all on a 
community-by-community basis. Consequently, section 340(h)(3)(B) allows 
a broadcaster to choose between retransmission consent and carry one, 
carry all on a community-by-community basis for any portion of the 
three-year cycle not covered by an existing retransmission consent 
agreement.
  One way the FCC might implement section 340(h)(3) for a station that 
entered into a retransmission consent agreement before the effective 
date of the Act, and that expires before the end of 2005, would be to 
require the satellite operator to send the station, by certified mail, 
at least 60 days before the agreement expires, the required 
notification for any period between the date of expiration of that 
agreement and December 31, 2005. If the satellite carrier gives that 
notice, the station could then, within 30 days of receipt, choose 
retransmission consent or mandatory carriage for those communities 
covered by the notification for the period between the date of 
expiration of the agreement and the end of 2005. For existing 
retransmission contracts that expire later but between election periods 
under 47 C.F.R. 76.66, the FCC could require the satellite carrier to 
provide the station by certified mail, at least 60 days before the 
election date under section 76.66 that immediately precedes the 
expiration date of the contract, the required notification for any 
period between the date of expiration of the agreement and the end of 
the next three-year election cycle under section 76.66. If the 
satellite carrier gives that notice, the station could then, on the 
same schedule provided under section 76.66, elect retransmission 
consent or mandatory carriage for those communities covered by the 
satellite carrier's notification for the period between the date of 
expiration of the agreement and the date of expiration of the next 
three-year election cycle. Retransmission consent contracts entered 
into after the effective date of the Act will not be affected by this 
harmonization provision, because negotiators will be able to take into 
account the possible importation of significantly-viewed stations in 
the future.


        Section 203. Carriage of Local Stations on a Single Dish

  Section 203(b)(1) of the bill amends sections 338(a)(1) and (a)(2) of 
the Communications Act (47 U.S.C. 338(a)(1)-(2)) to make clear that the 
FCC may enforce satellite operators' carry-one, carry-all obligations. 
The Communications Act currently grants the FCC authority to enforce 
cable operator's must-carry obligations to carry all local broadcast

[[Page 23677]]

stations upon request. There apparently is some ambiguity regarding the 
FCC's authority to enforce satellite operators' analogous carry-one, 
carry-all obligations. Section 203(b)(1) of the bill is intended to 
remove any doubt that a carrier can seek enforcement from the FCC under 
the Communications Act, in addition to any remedies it may have in 
court under the Copyright Act.
  Section 203(b)(1) of the bill also adds section 338(a)(3) of the 
Communications Act (47 U.S.C. Sec. 338(a)(3)) to clarify that satellite 
carriage of low-power television stations is permissive, not mandatory. 
Section 104 of the bill grants satellite operators a compulsory 
copyright license to carry low-power stations. Section 338(a)(3) of the 
Act, as amended, makes clear that carriage of such stations does not 
fall within the carry-one, carry-all requirements of Section 338.
  Sections 203(b)(2) and (b)(3) of the bill make conforming changes to 
the Act to implement section 203(b)(1) of the bill, and to define ``low 
power television station'' for purposes of that section.


     Section 204. Replacement of Distant Signals with Local Signals

  Section 204 of the bill amends section 339 of the Communications Act 
(47 U.S.C. Sec. 339) to require a satellite operator to stop providing 
distant signals of a network to certain subscribers in a market once 
the operator begins providing local signals of that network in that 
market, absent a waiver from the affected network station. It does, 
however, permit certain subscribers to continue receiving distant 
signals, and allows future distant signal subscribers in non-local-
into-local markets to continue receiving such signals under certain 
circumstances. Section 204 does not apply to carriage of distant 
signals from non-network stations.
  New section 339(a)(2)(A) requires certain grandfathered subscribers 
to choose between receiving a distant and a local signal of a network. 
Under SHVIA, some households that can receive a ``Grade B'' intensity 
over-the-air signal from a local network affiliate but not a ``Grade 
A'' signal qualify as ``unserved'' by that network because of a 
grandfathering provision in the Copyright Act (17 U.S.C. Sec. 119(e)). 
These grandfathered customers are sometimes referred to as ``Grade B 
doughnut'' households. The grandfathered status of these subscribers is 
set to expire at the end of this year. Under section 339(a)(2)(A), once 
a satellite operator makes the local signal of a network available 
under section 338 to customers receiving the distant signal under the 
Grade B doughnut provisions, the customers must choose between the 
local signal and the distant signal. They may continue to receive the 
distant signal if they elect to do so, but the subscribers may not 
receive both the distant and local signals of the network. Customers 
who were eligible for distant signals under the Grade B doughnut 
provisions but were not receiving such signals under those provisions 
on October 1, 2004, will no longer be eligible for such grandfathering. 
Thus, the universe of grandfathered households is fixed as of that day 
and cannot be expanded thereafter.
  New section 339(a)(2)(B) allows a satellite operator to provide both 
a local and a distant signal of a network to a subscriber who is 
unserved over-the-air by a Grade B signal of the network's local 
affiliate, so long as the satellite operator was offering the local 
signal of the network pursuant to section 338 by Jan. 1, 2005, and 
complies with certain notice obligations. If the satellite operator was 
not offering the local signal of the network pursuant to section 338 by 
Jan. 1, 2005, the satellite operator may provide both the distant and 
local signals to the subscriber only if the subscriber sought to 
subscribe to the distant signal before the satellite operator made the 
local signal available, and the satellite operator meets certain notice 
obligations.
  New section 339(a)(2)(C) provides that a satellite operator may not 
provide a signal of a distant affiliate of a network to a consumer if 
the consumer is not lawfully receiving the signal from the satellite 
operator on the date of enactment of SHVERA and the consumer seeks to 
receive the distant signal after the satellite operator began making 
the local signal of that network available in the market.
  New section 339(a)(2)(D) allows a local affiliate to waive any of the 
limitations in section 339(a)(2) as they apply to the retransmission, 
into the local affiliate's local market, of the distant signals of a 
station affiliated with the same network. The waiver can be as broad or 
as narrow as the affiliate wants. For example, a local affiliate can 
waive the application of section 339(a)(2) to one or more consumers in 
the local market, with respect to one or more specific distant 
affiliates of the same network, and with respect to one or more 
satellite operators. The broadcaster may do so as part of a negotiated 
agreement and for any reason, including common ownership among the 
stations. This is intended to be a private negotiation, not one over 
which the FCC or any other governmental body must preside; nor must any 
governmental body grant or approve the waiver. Whether to grant a 
waiver is a decision to be made solely based on the broadcaster's own 
business judgment, although a broadcaster may grant a waiver as part of 
an agreement made with a satellite operator or other parties. A 
broadcaster is also not required to execute any particular document as 
part of the waiver process, although parties who intend to rely on such 
a waiver or any attendant agreement will likely want to reduce the 
waiver and the agreement to writing, so that they have something to 
refer to should any dispute arise in the future. Such waivers are 
distinct from the waivers referred to in section 339(c)(2) of the 
Communications Act, although broadcasters are free to execute both 
types of waivers in tandem or with a single document. Unlike the 
section 339(c)(2) waivers, broadcasters must affirmatively grant 
section 339(a)(2)(D) waivers; they shall not be deemed granted by the 
broadcaster just because the broadcaster has not responded to a request 
within a certain amount of time. Nor are section 339(a)(2)(D) waivers 
or agreements subject to the section 325 good-faith negotiation 
requirement. Section 339(a)(2)(D) will facilitate agreements that 
provide consumers with more viewing choices.
  New section 339(a)(2)(E) requires satellite operators to provide 
networks, within 60 days after enactment of SHVERA, with lists of 
certain subscribers to whom they offer distant signals. It also 
requires satellite operators, within 60 days after commencing in a 
market local-into-local service under section 338, to provide networks 
with lists of the subscribers to whom they offer certain distant 
signals. The notice obligations are designed to help networks monitor 
compliance with the new ``no-distant-where-local'' requirements that 
SHVERA creates.
  New section 339(a)(2)(F) makes clear that the distant-signal 
limitations of section 339(a)(2) do not apply to the provision of 
significantly viewed signals under new section 340, or to the provision 
of distant signals to trucks and recreational vehicles.
  Nothing in section 204 of the bill is intended to affect any existing 
waivers under section 339(c)(2) of the Communications Act.

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