[House Report 111-319]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-319

======================================================================



 
      SATELLITE HOME VIEWER UPDATE AND REAUTHORIZATION ACT OF 2009

                                _______
                                

October 28, 2009.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3570]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3570) to amend title 17, United States Code, to 
reauthorize the satellite statutory license, to conform the 
satellite and cable statutory licenses to all-digital 
transmissions, and for other purposes, having considered the 
same, report favorably thereon with amendments and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
The Amendments...................................................     2
Purpose and Summary..............................................     4
Background and Need for the Legislation..........................     4
Hearings.........................................................    14
Committee Consideration..........................................    14
Committee Votes..................................................    14
Committee Oversight Findings.....................................    15
New Budget Authority and Tax Expenditures........................    15
Congressional Budget Office Cost Estimate........................    15
Performance Goals and Objectives.................................    21
Constitutional Authority Statement...............................    21
Advisory on Earmarks.............................................    21
Section-by-Section Analysis......................................    21
Changes in Existing Law Made by the Bill, as Reported............    25
Committee Jurisdictional Letters.................................    68
Additional Views.................................................    70

                             The Amendments

    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:

    Page 2, line 12, strike ``chapter I'' and insert ``chapter 
1''.

    Page 6, line 4, strike ``catastrophe'' and insert 
``catastrophic incident''.

    Page 6, line 19, insert ``and the Committee on Homeland 
Security'' after ``Judiciary''.

    Page 7, insert the following after line 12:

                            ``(iii) Catastrophic incident.--The 
                        term `catastrophic incident' means any 
                        natural disaster, act of terrorism, or 
                        other man-made disaster that results in 
                        extraordinary levels of casualties or 
                        damage or disruption severely affecting 
                        the population (including mass 
                        evacuations), infrastructure, the 
                        environment, the economy, national 
                        morale, or government functions in a 
                        geographic area.

    Page 8, line 3, strike ``by a'' and insert ``to a''.

    Page 9, strike lines 7 and 8 and insert the following:

            (4) in paragraph (3), as redesignated--
                    (A) by inserting ``(including the filing 
                fee specified in paragraph (1)(C))'' after 
                ``shall receive all fees''; and
                    (B) by striking ``paragraph (4)'' and 
                inserting ``paragraph (5)'';

    Page 12, line 21, strike ``Copyright'' and insert 
``copyright''.

    Page 19, lines 2 and 3, strike ``associated data'' and 
insert ``program-related material''.

    Page 19, line 4, insert ``(as determined by Nielsen Media 
Research)'' after ``viewership ratings''.

    Page 19, line 10, insert a space after ``(1),''.

    Page 21, line 11, insert ``, as amended by subsections (d) 
and (j),'' after ``119(a)''.

    Page 23, line 6, strike ``paragraph (3)(E)'' and insert 
``subparagraph (E) of paragraph (3)''.

    Page 27, line 9, strike ``chapter I'' and insert ``chapter 
1''.

    Page 34, move lines 5 through 7 two ems to the right.

    Page 35, move line 21 through page 36, line 3, two ems to 
the right.

    Page 36, move line 9 two ems to the right.

    Page 36, line 11, strike ``low power television station'' 
and insert ```low power television station'''.

    Page 36, line 15, strike ``low power television station'' 
and insert ```low power television station'''.

    Page 37, line 2, strike ``chapter I'' and insert ``chapter 
1''.

    Page 38, line 21, strike ``catastrophe'' and insert 
``catastrophic incident''.

    Page 39, line 9, insert ``and the Committee on Homeland 
Security'' after ``Judiciary''.

    Page 39, add the following after line 24:

                    ``(C) Catastrophic incident.--The term 
                `catastrophic incident' means any natural 
                disaster, act of terrorism, or other man-made 
                disaster that results in extraordinary levels 
                of casualties or damage or disruption severely 
                affecting the population (including mass 
                evacuations), infrastructure, the environment, 
                the economy, national morale, or government 
                functions in a geographic area.

    Page 40, line 24, insert a space after the semicolon.

    Page 41, line 3, strike ``A total'' and insert ``Except in 
the case of a cable system whose royalty is specified in 
subparagraph (E) or (F), a total''.

    Page 41, line 10, insert ``of such gross receipts'' after 
``1.064 percent''.

    Page 43, lines 11 and 12, strike ``this paragraph'' and 
insert ``subparagraph (C)(iii)''.

    Page 43, line 16, insert ``or offset'' after ``refund''.

    Page 45, strike lines 4 through 6 and insert the following:

            (2) in paragraph (2)--
                    (A) by striking ``The Register of 
                Copyrights'' and inserting the following 
                ``Handling of fees.--The Register of 
                Copyrights''; and
                    (B) by inserting ``(including the filing 
                fee specified in paragraph (1)(G))'' after 
                ``shall receive'';

    Page 45, line 20, strike ```; and''' and insert ``the 
semicolon''.

    Page 47, line 3, strike ``during'' and insert ``for''.

    Page 47, insert the following after line 4 and redesignate 
succeeding subsections accordingly:

    (d) Effective Date of New Royalty Fee Rates.--The royalty 
fee rates established in section 111(d)(1)(B) of title 17, 
United States Code, as amended by subsection (c)(1)(C) of this 
section, shall take effect commencing with the first accounting 
period occurring in 2010.

    Page 49, line 8, strike ``steam'' and insert ``stream''.

    Page 54, line 21, strike ``subsection (c)'' and insert 
``subsection (c)(1)''.

    Page 54, line 24, strike ``each place it appears''.

                          Purpose and Summary

    The purpose of the Satellite Home Viewer Update and 
Reauthorization Act of 2009 is to modernize, improve and 
simplify the compulsory copyright licenses governing the 
retransmission of distant and local television signals by cable 
and satellite television operators, under Sections 111, 119 and 
122 of Chapter 17 of the United States Code. Both the cable and 
satellite industries rely on these licenses to provide 
television programming to their customers.
    The legislation reauthorizes the Section 119 license, which 
would otherwise expire on December 31, 2009. The bill also 
amends the licenses to reflect the transition to digital 
television, resolves the so-called ``phantom signal'' ambiguity 
and slightly increases the royalties paid under the cable 
license (Section 111), provides content owners with an audit 
right that increases fairness in the Sections 111 and 119 
licenses, dramatically increases the penalties for copyright 
infringement under the satellite licenses (Sections 119 and 
122), incentivizes the satellite industry to correct a gap in 
the current television market that disadvantages rural 
consumers, and provides a framework for cable and satellite 
providers to offer multicast signals to their customers. The 
bill corrects technical errors and inconsistencies in the 
licenses.

                Background and Need for the Legislation

    These compulsory copyright licenses were designed to 
facilitate investment in new creative works by the satellite 
and cable industries by eliminating direct negotiation with the 
copyright owners for the use of certain kinds of distant\1\ and 
local signal programming. Section 119 of the Copyright Act 
allows satellite carriers to retransmit ``distant'' broadcast 
signals without incurring the transaction costs associated with 
individual marketplace negotiations. The license in Section 122 
governs the rebroadcast of certain kinds of local signals by 
satellite providers, and Section 111 of the Copyright Act 
governs the retransmission of distant and local signals by 
cable operators.
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    \1\A distant signal contains the programming of a television 
network affiliate that comes from outside the receiving household's 
local market area (known as ``Designated Market Areas'' or DMAs). For 
example, if a household in Zanesville, Ohio receives the programming on 
an ABC station based in Chicago, the Chicago ABC station signal is a 
``distant signal'' for the Ohio household. The country is divided into 
210 DMAs. The boundaries of each DMA are defined by Nielsen Media 
Research and are periodically updated. Broadcasters generally negotiate 
affiliation agreements and advertising contracts concerning particular 
DMAs. Additionally, the FCC's carriage requirements refer to DMAs.
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    The purpose of this legislation is to make the licenses 
more fair for content owners, increase competition and service 
to satellite and cable consumers, and update the licenses to 
reflect new technological advances such as multicasting and the 
transition to digital television.

               A. THE HISTORICAL CONTEXT OF THE LICENSES

    Over 30 years ago, Congress first recognized the challenges 
that made it difficult for the nascent cable industry to clear 
the numerous copyrights contained in a broadcast television 
signal before retransmitting the programming to its customers. 
Specifically, Congress wanted to decrease the high transaction 
costs associated with the private negotiation with each content 
creator for the performance rights in copyrighted work.
    In 1976, Congress enacted Section 111 of the Copyright Act, 
which allows cable operators to provide distant and local 
signals to customers. Unlike Section 119, which must be 
reauthorized every 5 years, Section 111 is permanent and has 
rarely been amended by Congress since its inception.
    Beginning in 1988, Congress passed a series of laws 
governing the retransmission of broadcast television signals by 
satellite carriers, in order to foster growth in the nascent 
satellite industry, advance multichannel video competition, and 
increase consumer choice. The Section 119 license was intended 
to provide a lifeline service to households that could not 
receive certain signals over the air and to help the satellite 
industry develop into a viable competitor to the entrenched 
cable industry. The 1988 Satellite Home Viewer Act 
(``SHVA''),\2\ the Satellite Home Viewer Act of 1994,\3\ the 
1999 Satellite Home Viewer Improvement Act (``SHVIA''),\4\ and 
the 2004 Satellite Home Viewer Extension and Reauthorization 
Act (``SHVERA'')\5\ established and modified the Section 119 
and Section 122 licenses. Section 119 permits satellite 
carriers to offer distant signals to subscribers who are not 
otherwise served by local network television signals. Section 
122 permits satellite carriers to retransmit the subscriber's 
local television signals to the subscriber via satellite.
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    \2\P.L. 100-667.
    \3\P.L. 103-369.
    \4\P.L. 106-113.
    \5\P.L. 108-447, passed as Division J of Title IV of the FY 2005 
Consolidated Appropriations Act.
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                        B. HOW THE LICENSES WORK

    In exchange for the license to publicly perform the 
copyrighted works contained in distant signals, cable and 
satellite providers pay royalties at pre-determined rates to 
the Copyright Office, which then distributes those royalties in 
accordance with an order issued by the Copyright Royalty Judges 
to the pool of copyright owners whose works have been used. The 
rates can be set by voluntary agreement, or, in the case of 
Section 119, the rate can also be set by a compulsory 
proceeding before the Copyright Royalty Judges. The calculation 
of royalties that cable providers must pay under Section 111 is 
based on a percentage of the gross receipts generated by each 
cable system. The royalties that satellite carriers must pay 
under Section 119 are calculated on a per subscriber, per 
signal basis. Section 122 is a royalty-free license.
    Under Section 111, cable operators may offer any number of 
distant broadcast signals to subscribers, as long as the 
operators pay the royalties required by the license and abide 
by rules and regulations established by the Federal 
Communications Commission regarding the carriage of broadcast 
signals.\6\ In contrast, under the Section 119 license, a 
satellite carrier may only provide the distant signal of a 
network\7\ station to a household that is ``unserved'' with 
respect to that particular network. A household is unserved if 
the household does not receive the primary video of a network 
affiliate that is located within the household's DMA.\8\
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    \6\See, e.g., 47 U.S.C. Sec. 339(b).
    \7\Under the Section 119 license, the word ``network'' means both 
traditional networks, such as ABC or CBS, and noncommercial educational 
stations.
    \8\The ``primary video'' is the programming stream that had the 
highest viewership on the date of this statute's enactment. Viewership 
is measured by the Neilson Media Research company. In rare cases, a 
local broadcaster may offer--in addition to its primary signal--a 
different network affiliate on a multicast video stream. Multicasting, 
and its effect on the ``unserved household'' analysis, is addressed 
more comprehensively in Section (C)(2) of this Report.
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    Section 122 governs the satellite retransmission of signals 
from the subscriber's own local market (so-called ``local into 
local'' service). This license does not require the payment of 
royalties because it simply results in consumers receiving the 
same programming they could receive without a satellite (e.g., 
by using an antenna).
    This license permits, but does not require, satellite 
carriers to retransmit a local network signal to the households 
in the DMA where the signal originated. If a satellite carrier 
chooses to provide the signal of a local broadcast station in a 
DMA, it must offer the signal of all network channels in that 
DMA.\9\ Local broadcasters do not want their programming to be 
ignored by consumers simply because it is not integrated into 
satellite service, so this requirement ensures that consumers 
who choose to receive satellite service receive their local 
broadcast as easily as they receive the other channels offered 
via their satellite service. Satellite companies now offer 
local-into-local service to 97 percent of the households in the 
country. The areas that do not receive this service tend to be 
rural and sparsely populated markets. These are the regions 
that would particularly benefit from satellite service, but 
have thus far been insufficiently profitable to induce 
satellite carriers to enter the market.
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    \9\This rule is known as ``carry one, carry all'' and is related to 
requirements set forth in the Section 338 of the Communications Act, as 
implemented by the Federal Communications Commission.
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                  C. THE ISSUES CONTEMPLATED BY SHVURA

(1) Reauthorization of Section 119 License for Five Years
    This legislation extends Section 119 for 5 years. The 
Committee carefully considered proposals to eliminate the 
Sections 111, 119 and 122 licenses. Content owners assert that 
the compulsory licenses are an abrogation of their exclusive 
rights, that the below-market rates they receive are an 
unjustifiable subsidy to a profitable industry, and that the 
declining number of distant signal subscribers (approximately 1 
percent of U.S. TV households) serviced by satellite providers 
prove the licenses are an anachronism.\10\ The Copyright Office 
shares this perspective but has noted that as long as the cable 
industry benefits from the continued existence of the 111 
compulsory license, it would be inequitable for Congress to 
eliminate the 119 license.\11\ Satellite providers assert that 
nearly a million satellite subscribers still rely on the 
distant signal license today.\12\
---------------------------------------------------------------------------
    \10\Hearing testimony of Fritz Attaway, Executive Vice President, 
Motion Picture Association of America, ``Copyright Licensing in a 
Digital Age: Competition and the Need to Update the Cable and Satellite 
TV Licenses,'' February 25, 2009, Committee on the Judiciary, House of 
Representatives.
    \11\Hearing testimony of Marybeth Peters, Register of Copyrights, 
``Cable and Satellite Carrier Statutory License,'' February 24, 2004, 
Subcommittee on Courts, The Internet and Intellectual Property, House 
of Representatives.
    \12\Hearing testimony of Bob Gabrielli, Senior Vice President, 
DirecTV, Inc., ``Copyright Licensing in a Digital Age: Competition and 
the need to Update the Cable and Satellite TV Licenses,'' February 25, 
2009, House of Representatives, Committee on the Judiciary.
---------------------------------------------------------------------------
    The Committee supports a transition to open market and 
direct negotiations between content owners and cable and 
satellite providers, but has determined that the marketplace is 
not yet equipped to function without the licenses.
(2) Revisions Required by the Digital Transition
    In June 2009, all full power television broadcast stations 
ceased broadcasting analog signals and exclusively broadcast 
digital signals. This legislation updates the statutory 
licenses in several respects to accommodate the significant 
changes the digital transition has caused in television 
broadcasting.
    Prior to this legislation, a household was considered 
``served'' if it received a stray signal from a station outside 
of its DMA.\13\ This legislation clarifies that only signals 
that originate from the DMA where the household is located are 
considered when determining if a household is served. The bill 
also updates the definition of ``unserved household'' to 
provide for a more accurate predictive method of determining 
whether satellite carriers may presume a household will be 
``unserved'' by a particular network signal.
---------------------------------------------------------------------------
    \13\This phenomenon has previously been called ``Grade B Bleed.'' 
After the digital transition, the situation would occur when a 
broadcast signal is received outside of its ``noise-limited contour,'' 
which is the area that the FCC estimates a digital signal will cover.
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    The legislation also addresses the growing practice of 
``multicasting''--when a broadcaster subdivides its digital 
stream, allowing the broadcaster to provide multiple streams of 
distinct programming to a single household.\14\ At the time the 
statutory licenses were designed, this proliferation of 
programming options by a single broadcaster was not 
contemplated. This has caused uncertainty about whether 
multicast streams should be considered when determining if a 
household is served, as well as how multicast streams should be 
valued for the purposes of royalty collection.
---------------------------------------------------------------------------
    \14\For example, in a market that does not contain a local 
affiliate for a particular network, a local broadcaster could negotiate 
with that missing network to provide the network programming on one of 
its subchannels. The broadcaster would add syndicated programming and 
its own local programming to provide consumers with a full television 
programming day.
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    This legislation updates the Section 119 license to address 
when a multicast stream of a network station will render a 
household ``served'' for the purpose of distant signal 
eligibility. At this point in time while multicasting is in its 
infancy, it is impossible to predict how many such multicast 
network channels will arise. To accommodate the current 
limitations on satellite capacity,\15\ this legislation 
provides for a 3-year multicasting transition period. Any local 
broadcaster's multicast of a network station that a satellite 
carrier offers on July 1, 2009 will render a household 
``served'' for the purpose of determining distant signal 
eligibility for that network. After the statute is enacted, 
satellite carriers have 3 years to build out satellite capacity 
to accommodate new network channels transmitted by multicast, 
and broadcasters have 3 years to establish new network 
affiliates they intend to transmit by multicast. A household 
that receives a transmission of these additional network 
channels as a multicast stream during this transition period is 
not considered ``served,'' and a satellite carrier is allowed 
to provide that station to the subscriber under Section 119. On 
January 1, 2013, any household that receives local network 
programming via multicast will be considered ``served'' with 
respect to that station. Satellite carriers will not be 
permitted to import distant signals if these multicasts exist 
in the local market.
---------------------------------------------------------------------------
    \15\Satellite carriers design their satellite spot beams to 
maximize the number of local markets they can serve under the ``carry 
one, carry all'' rules. If they design a particular beam with too 
little capacity, they cannot serve the market at all. If they design 
the beam with more capacity than necessary, however, they can fit fewer 
beams on the satellite (and can thus serve fewer markets). So they have 
designed their beams to exactly match the number of full power stations 
in a given market, which is why at the current time most of those beams 
lack room for additional local multicast signals.
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    The Committee intends this change to affect only the 
definition of ``unserved household,'' which in turn concerns 
only eligibility for distant signals under the statutory 
license contained in Section 119. The Committee does not intend 
this language to affect the definition of ``primary video'' or 
``program related'' under any other provision of law.
    In the Section 111 license, which has no ``unserved 
household'' standard, this legislation clarifies that multicast 
streams have some value with respect to royalty calculations.
    The Committee does not intend for the digital transition to 
upset settled expectations with regard to the application of 
Section 111 to broadcast signals whose status for purposes of 
the compulsory license has historically been determined by 
reference to the analog ``Grade B contour.'' Thus for example, 
Section 5(d)(4) of the Act updates the definition of the 
``local service area of a primary transmitter'' to add a 
reference to the ``noise-limited contour,'' which is the 
comparable signal strength measurement for digital television 
broadcast signals as the analog Grade B contour. The Copyright 
Office will adopt a common sense approach with respect to other 
situations in which the Grade B contour is a factor in the 
application of the compulsory license.
(3) Filing Fee
    The administration of the statutory license is expensive. 
The Committee believes that the entire cost of administering 
the licensing system and adjudicating disputes should not be 
deducted from the royalties copyright owners are due to receive 
for the compelled use of their works.\16\
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    \16\In its Section 110 Report, the Copyright Office concluded that 
``the section 119 license does harm copyright owners because the 
current statutory rates do not reflect fair market value and . . . the 
law requires a segment of copyright owners to bear the costs associated 
with administration of the new Copyright Royalty Board without any 
requirement that the users of the license pay any share of the 
Copyright Royalty Board's administrative costs.'' Satellite Home Viewer 
Extension and Reauthorization Report, Report of the Register of 
Copyrights, February 2006, at p. vi.
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    The legislation adds a new subparagraph (c) to 119 (b)(1), 
directing the Register of Copyrights to determine an 
appropriate filing fee to be paid in connection with the 
deposit of semiannual statements of account and royalty 
payments by satellite carriers.
    The legislation also adds a new subparagraph G to Section 
111(d)(1), directing the Register of Copyrights to determine an 
appropriate filing fee to be paid in connection with the 
deposit of semi-annual statements of account and royalty 
payments by cable systems. In establishing such a fee, the 
Register should seek to minimize the burden such fees may 
impose on individual cable systems that calculate their 
royalties based on subparagraphs (E) and (F) of Section 
111(d)(1).
(4) Emergency Response
    At present, the statutory licenses preclude cable and 
satellite companies from retransmitting broadcast television 
programming to government organizations, even in times of 
national emergency. The bill gives satellite carriers and cable 
operators the flexibility they need to assist the U.S. 
government during specific national emergencies. It permits 
either provider to retransmit distant signal programming of 
television broadcast stations as the relevant Federal agencies 
may require in order to carry out their mission.
(5) Audit Right
    The bill gives copyright owners a mechanism by which they 
can verify that they are being accurately compensated for the 
use of their intellectual property under both the Section 111 
and Section 119 licenses.
    The legislation directs the Register of Copyrights to adopt 
regulations establishing a process by which copyright owners, 
through a qualified independent auditor, may verify the gross 
receipts and royalty fee computations reported on statements of 
account submitted by cable operators under Section 111. By 
specifying that a system's semi-annual statements of account 
may be subject to a ``single verification procedure,'' the 
Committee intends only to ensure that no individual statement 
of account may be audited more than once. In implementing the 
verification process, the Register may consider the procedures 
adopted under other audit provisions in its rules as well as 
audit provisions in private agreements to which cable operators 
or content owners may be parties. The Register should seek to 
tailor audit procedures to the specific needs and circumstances 
of the reporting and payment of royalty fees under Section 111.
    In particular, the Register should adopt a verification 
procedure that protects sensitive business information from 
unnecessary disclosure and minimizes the burden and costs 
imposed by the audit process. For example, the Register should 
establish limits on the frequency with which audits can be 
conducted on an individual cable system and on the number of 
audits that a multiple system operator can be required to 
undergo in a single year. The Copyright Office will establish a 
procedure under which all copyright owners whose works were the 
subject of secondary transmissions during the relevant 
accounting period and desire to audit a cable system shall 
designate a single qualified independent auditor to verify on 
their behalf a cable system's reported gross receipts and 
royalty fee calculations for the period.
    Finally, in establishing verification procedures, the 
Register should provide cable operators the opportunity to 
review the auditor's report before it is disseminated to the 
copyright owners and should establish a reasonable period 
following such review before the auditor's report is 
disseminated to the owners. The regulations should permit a 
cable operator during the pre-dissemination period to amend its 
statement of account and to supplement its royalty payments 
(subject to the filing fee and interest requirements generally 
applicable to late, corrected, or supplemental statements of 
account and royalty fees) to conform with the auditor's 
findings. In the absence of a showing of bad faith, a cable 
operator that files such amendment and supplemental payment 
within the prescribed period will not be subject to copyright 
infringement liability under Section 111(c)(2)(B) based on the 
deficiencies found by the auditor. Failure to amend and to pay 
within the prescribed period would mean that an infringement 
action could be brought against a cable operator based on the 
deficiencies identified by the auditor and, to the extent that 
such deficiencies are determined by a court of competent 
jurisdiction to constitute copyright infringement, the operator 
would be fully subject to all infringement remedies, provided, 
however, that a finding of the auditor shall be given no 
special deference in any such infringement action. The rules 
adopted by the Office shall include procedures allocating 
responsibility for the cost of audits consistent with such 
procedures in other audit provisions in its rules.
(6) ``Significantly Viewed'' and Low Power Stations
    The 2004 SHVERA legislation provided satellite carriers 
with a limited right to retransmit significantly viewed 
signals,\17\ on a royalty-free basis, to those subscribers who 
already receive local signals. This change was made to achieve 
greater parity between cable and satellite providers (because 
cable operators can provide subscribers with significantly 
viewed channels) and to provide an additional incentive for 
subscribers to sign up for the delivery of local signals where 
available. Since significantly viewed signals are by definition 
a subset of distant signals, SHVERA included this provision in 
Section 119, the distant signal license. However, since 
significantly viewed signals do not incur royalties, the 
Committee believes it should be moved to Section 122, which 
governs all other royalty-free satellite transmissions under 
the compulsory license. The bill accordingly incorporates the 
significantly viewed provision, previously in Section 
119(a)(3), into Section 122(a).
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    \17\Significantly viewed signals are broadcast stations that 
originate in a neighboring DMA but have historically been significantly 
received and viewed by a wider audience.
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    This legislation also amends the law with respect to low 
power television stations to clarify that the Section 119 
license requires payment for the use of low power signals when 
they are transmitted beyond the limited area that the broadcast 
equipment of the low power station was designed to reach over 
the air.\18\ The bill moves the low power provision that 
relates to rebroadcasts within the geographic limitation, which 
are royalty-free, to Section 122, but preserves the ability of 
satellite carriers to retransmit low power stations throughout 
the DMA, so long as royalties are paid for transmissions that 
go beyond the local service area.
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    \18\This geographic limitation is referred to as the low power 
station's local service area.
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(7) Permanent Injunction
    In 2006, DISH Network (DISH) was enjoined from using the 
Section 119 license. A Florida district court found that DISH 
Network, then known as Echostar Communications Corporation, had 
a national pattern of significant violations of the 
license.\19\ Although that court found DISH liable for massive 
copyright infringement and imposed heavy remedial obligations 
on the company, it did not enjoin DISH from using the Section 
119 license. However, on appeal, the United States Court of 
Appeals for the 11th Circuit ruled that as a matter of law, the 
district court did not have the equitable jurisdiction to avoid 
imposing the permanent injunction under 17 U.S.C. 
119(a)(7)(B)(i).\20\ The appellate court directed the district 
court to impose the injunction.
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    \19\CBS Broad., Inc. v. EchoStar Communs. Corp., 276 F. Supp. 2d 
1237 (2003).
    \20\CBS Broad., Inc. v. Echostar Communs. Corp, 450 F.3d 505, 512 
(11th Cir. 2006).
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    This legislation restores DISH's ability to provide 
subscribers distant signals if, and only if, DISH provides 
local-into-local service to all 210 DMAs in the country. 
Currently, DISH provides local service in 182 DMAs.\21\ To 
regain access to its 119 license, DISH would have to provide 
local-into-local service under the Section 122 license to the 
additional 28 markets. Once the injunction has been lifted, if 
DISH stops serving all 210 DMAs, it loses the right to use the 
Section 119 license.
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    \21\DirecTV offers local television stations by satellite in 150 
out of 210 DMAs.
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    This legislation does not lift or alter the penalties for 
abusing the license that exist elsewhere in the statute, for 
DISH or for any other carrier. It places the burden of proof on 
DISH if its compliance with the terms of the waiver is 
challenged. If DISH abuses the license, the injunction will be 
reimposed and DISH will face additional, substantial penalties.
    The Committee believes that this is an important policy 
initiative because it will induce DISH to fill a gap in the 
current television market that primarily disadvantages rural 
consumers who live in markets that are often not served by 
cable television and not deemed sufficiently lucrative by 
satellite companies to justify the expense of launching local-
into-local service. Consequently, about 3 percent of all U.S. 
households do not receive local broadcast signals through their 
satellite service. Because there are constitutional obstacles 
to requiring a satellite carrier to provide local-into-local 
service in all 210 markets, an incentive-based system is the 
most effective method available to guarantee that all 
television markets receive local-into-local service.
    The actual impact of permitting DISH to once again use the 
Section 119 license is fairly limited. Due to the ``if local, 
no distant'' requirements in the law, DISH would only be able 
to use the Section 119 license in a few circumstances, such as 
for short markets (markets that are missing an affiliate), for 
recreational vehicles, and for the special exceptions for 
Vermont, New Hampshire, Oregon and Mississippi.\22\
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    \22\Section 119(a)(2)(C). In these states, satellite carriers are 
permitted to provide in-state signals to subscribers who neither reside 
in the originating DMA nor qualify to receive the programming on the 
basis of the signal being deemed ``significantly viewed.''
---------------------------------------------------------------------------
(8) The ``Phantom Signals'' Dispute
    For the past several years, the cable television and 
content industries have taken different views on whether cable 
providers should include certain signals that are not received 
by every customer in the calculation of Section 111 royalty 
obligations. Members of the cable industry argue that providers 
should not have to pay for such signals because some consumers 
do not receive them. Members of the content industry assert 
that, under the law, all signals should be taken into account 
in the royalty rate calculation. The Committee understands that 
there are two different readings of the statute and that the 
issue should be resolved to provide certainty to both 
industries.
    The legislation revises and updates subparagraphs (C) and 
(D) of Section 111(d)(1) to resolve the so-called ``phantom 
signal'' issue. Just as the current law allows subscriber group 
calculations for ``partially local/partially distant'' 
situations, so too may cable systems use the subscriber group 
methodology when calculating royalties for phantom signal 
situations. Specifically, subparagraph (C) as amended states 
that if a cable system provides secondary transmissions of 
primary transmitters to some, but not all, communities served 
by the cable system, the gross receipts and distant signal 
equivalent values for each secondary transmission may be 
derived on the basis of the subscribers in those communities 
where the cable system actually provides such secondary 
transmission. Where a cable system calculates its royalties on 
such a community-specific (or ``subscriber group'') basis, the 
system will apply the methodology in Section 111(d)(1)(B)(ii)-
(iv) to calculate a separate royalty for each subscriber group, 
but will compute the minimum fee calculation called for by 
Section 111(d)(1)(B)(i) on a system-wide basis (just as it 
currently is calculated for purposes of Section 
111(d)(1)(C)(ii)). For each accounting period in which such a 
community-specific calculation is used, a system's total 
royalty fee payment will be either the amount of the sum of the 
subscriber-group-by-subscriber group royalty calculations or of 
the system-wide minimum fee royalty calculation, whichever is 
greater. This change shall not affect a cable system's 
obligation to pay the minimum fee as appropriate.
    Subparagraph (D) as amended provides that for any 
accounting period prior to the enactment of the amendments in 
subparagraph (C), a cable system's computation of its royalty 
fee consistent with the methodology described in subparagraph 
(C)(iii), or a cable system's use of such methodology on an 
amendment of a statement originally filed before the date of 
enactment will not be deemed actionable as an act of 
infringement within the meaning of section 111(c)(2)(B) 
provided, however, that the cable system shall not be entitled 
to a refund or to an offset to any current or future royalty 
payments in connection with the re-calculation of royalty fees 
using such methodology contained in such amendment.
    Finally, as a result of discussions among the parties 
affected by the phantom signal issue that helped lead to broad 
industry support for these amendments, certain cable operators 
agreed to the payment of additional royalty amounts directly to 
the Copyright Office for a 5-year period. These additional 
royalty payments are addressed in new paragraph (6) of 
subsection (d), which directs the Copyright Office to treat 
them as part of the Section 111 base rate royalty pool 
attributable to the period for which they are submitted. For 
example, if the first such additional royalty payments are 
submitted on the filing deadline for the first accounting 
period of 2010 (i.e., August 29, 2010), the Office shall treat 
such amounts as part of the base rate royalty pool for the 
first accounting period of 2010 for deposit and distribution to 
claimants using the existing procedures.
    The legislation also revises and updates subparagraph (B) 
of Section 111(d)(1) to adjust the royalty percentages payable 
by cable systems that must compute their royalty payments in 
accordance with subparagraph (B). The adjusted royalty 
percentages become effective January 1, 2010 in lieu of any 
adjustments in royalty percentages or gross receipts thresholds 
that might have been made in 2010 pursuant to Sections 
801(b)(2) and 804(b)(1). The schedule for future proceedings to 
adjust the royalty percentages and gross receipt thresholds has 
been revised so that the proceedings to determine the next such 
adjustments are moved to 2015, with subsequent determinations 
to be made every 5 years thereafter.
    The Register of Copyrights will work closely with the 
interested parties to minimize the administrative burden of 
implementing the Act's provisions.
(9) Public Television
    Currently, Section 119 does not permit satellite carriers 
to retransmit state or public television network programming 
throughout the state if some DMAs straddle state lines 
(generally such DMAs may receive programming from one state or 
the other depending on where the DMA is located, but not both). 
State and public television network programming is often 
intended for a statewide audience. The Committee believes that 
given the public value of this type of programming, the 
statutory license should not preclude satellite companies from 
using distant signals to provide such state-specific 
programming to the entire state audience. Consequently, the 
legislation permits, but does not require, satellite carriers 
to import state public television network signals into in-state 
counties that are located in an out-of-state DMA, provided they 
pay the associated royalty fees.
(10) Grandfathering
    Some customers receive signals to which they would not be 
entitled under the current law. This legislation continues the 
practice of ``grandfathering'' these subscribers so that they 
are not abruptly deprived of programming and services to which 
they have become accustomed. The total number of so-called 
``grandfathered'' households remains small.

                                Hearings

    The Committee on the Judiciary held an oversight hearing 
titled, ``Copyright Licensing in a Digital Age: Competition and 
the Need to Update the Cable and Satellite TV Licenses,'' on 
February 25, 2009. The purpose of the hearing was to assess the 
Satellite Home Viewer Extension and Reauthorization Act of 2004 
and begin formal consideration of what changes, if any, the 
Committee should make to the law. Witnesses at the hearing 
included the following: Marybeth Peters, United States Register 
of Copyrights; Fritz Attaway, Executive Vice President, Motion 
Picture Association of America; Bob Gabrielli, Senior Vice 
President, DirecTV, Inc.; Chris Murray, Senior Counsel, 
Consumer's Union; Kyle McSlarrow, President and CEO, National 
Cable & Telecommunications Association; and David Rehr, 
President and CEO, National Association of Broadcasters. 
Charles W. Ergen, Chairman and CEO, DISH Network Corporation, 
and Mike Mountford, CEO, National Programming Service, 
submitted additional written testimony.

                        Committee Consideration

    On September 16, 2009, the Committee met in open session 
and ordered the bill H.R. 3570 favorably reported, without 
amendment, by a rollcall vote of 34 to 0, a quorum being 
present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 3570:
    1. Reporting the bill favorably. Approved 34-0.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman......................................              X
Mr. Berman......................................................              X
Mr. Boucher.....................................................              X
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................              X
Ms. Waters......................................................
Mr. Delahunt....................................................              X
Mr. Wexler......................................................
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Mr. Pierluisi...................................................              X
Mr. Quigley.....................................................              X
Mr. Gutierrez...................................................              X
Mr. Sherman.....................................................
Ms. Baldwin.....................................................              X
Mr. Gonzalez....................................................
Mr. Weiner......................................................              X
Mr. Schiff......................................................              X
Ms. Sanchez.....................................................              X
Ms. Wasserman Schultz...........................................              X
Mr. Maffei......................................................              X
Mr. Smith, Ranking Member.......................................              X
Mr. Sensenbrenner, Jr...........................................              X
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Lungren.....................................................              X
Mr. Issa........................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................              X
Mr. Jordan......................................................              X
Mr. Poe.........................................................              X
Mr. Chaffetz....................................................              X
Mr. Rooney......................................................              X
Mr. Harper......................................................              X
                                                                 -----------------------------------------------
    Total.......................................................             34               0
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 3570, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 16, 2009.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3570, the 
``Satellite Home Viewer Update and Reauthorization Act of 
2009.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie, 
who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 3570--Satellite Home Viewer Update and Reauthorization Act of 
        2009.

                                SUMMARY

    Under current law, satellite and cable television carriers 
pay royalty fees to the Copyright Office for the right to 
transmit certain television signals to their subscribers. The 
Copyright Office later distributes those fees to the owners of 
copyrights on the transmitted material.
    H.R. 3570 would amend and extend through December 31, 2014, 
the requirement that satellite carriers pay royalty fees to the 
Copyright Office for transmission of certain copyrighted 
broadcasts. The bill also would change the calculation of 
royalties that cable companies pay for the right to transmit 
copyrighted material to their subscribers. (The requirement to 
pay royalties for satellite transmissions is set to expire on 
December 31, 2009; royalty fees for cable transmissions do not 
expire). The bill also would authorize the Copyright Office to 
charge filing fees to satellite and cable operators to offset 
part of its cost to operate the royalty program.
    CBO estimates that enacting the bill would increase 
revenues by $633 million over the 2010-2019 period. With higher 
royalty collections, the payments to copyright owners 
(including interest earnings) also would increase, resulting in 
an estimated increase in direct spending of $725 million over 
the 2010-2019 period. Thus, the net impact on the Federal 
budget would be an increase in the deficit of $92 million over 
the over the same period. That net increase over the 10-year 
period reflects the payment of interest, which accrues during 
the period the royalties are held by the Copyright Office, in 
addition to amounts collected in royalties.
    H.R. 3570 would impose intergovernmental and private-sector 
mandates, as defined in the Unfunded Mandates Reform Act 
(UMRA), on satellite carriers, cable carriers, broadcasters, 
and copyright holders. Based on information from industry 
sources and the Copyright Office, CBO estimates that the 
aggregate cost of complying with the mandates would not exceed 
the annual thresholds established in UMRA for intergovernmental 
or private-sector mandates ($69 million and $139 million in 
2009, respectively, adjusted annually for inflation).

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 3570 is shown in the 
following table. The costs of this legislation fall within 
budget function 370 (commerce and housing credit).

                                                         By Fiscal Year, in Millions of Dollars
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               2010   2011   2012   2013   2014   2015   2016   2017   2018   2019  2010-2014  2010-2019
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Satellite Copyright Royalty
  Fees                                                           20     97    101    104    106     79      0      0      0      0       428        507

Cable Copyright Royalty
  Fees                                                            7     11     12     12     12     13     13     13     13     13        54        119

Copyright Office Filing Fees                                      0      0      0      1      1      1      1      1      1      1         2          7

    Total Changes in
      Revenues                                                   27    108    113    117    119     93     14     14     14     14       484        633

CHANGES IN DIRECT SPENDING

Estimated Budget Authority                                       27    110    121    132    140    111     29     28     24     19       530        741

Estimated Outlays                                                 1     16     14     39     72    108    132    132    112     99       142        725

NET EFFECT ON THE DEFICIT\1\
Estimated Impact on the
  Deficit                                                       -26    -92    -99    -78    -47     15    118    118     98     85      -342         92
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Positive numbers represent an increase in the deficit; negative numbers represent a reduction in the deficit.

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the bill will be 
enacted before the end of December 2009 and that spending will 
follow historical patterns for the program. The bill would 
increase the collection of copyright royalty fees, which are 
recorded in the budget as revenues. Those fees, plus interest 
accrued between the time of collection and payment, would later 
be paid to copyright owners.
Revenues
    H.R. 3570 contains provisions that would increase Federal 
revenues by increasing royalty collections and assessing new 
fees on certain cable and satellite providers. Taken together, 
CBO estimates that enacting H.R. 3570 would increase revenues 
by $633 million over the 2010-2019 period.
    Satellite Copyright Royalty Fees. H.R. 3570 would extend 
through December 31, 2014, the requirement that satellite 
carriers pay royalty fees to owners of copyrighted material to 
retransmit that material to some of their subscribers. The 
royalty is based on a flat fee charged for each subscriber that 
receives the copyrighted transmissions. The bill would require 
the Copyright Royalty Judges (CRJs) to set a new rate if the 
affected parties cannot come to an agreement voluntarily; the 
rate would be adjusted annually thereafter for increases in the 
cost of living. The bill also would make a number of changes to 
current law that would affect the number of households eligible 
to receive transmissions for which royalty payments would be 
due.
    In fiscal year 2008, the Copyright Office collected about 
$90 million in royalties from seven satellite carriers. Based 
on information from the satellite industry and groups 
representing copyright holders, CBO expects that the parties 
would reach an agreement on new rates that would not result in 
a significant increase in royalty collections. H.R. 3570 could 
also affect royalty collections by increasing the number of 
households that would be eligible to receive copyrighted 
transmissions. Based on information from satellite providers, 
CBO expects that royalty collections could increase by about 5 
percent per year once the infrastructure is in place to 
transmit the broadcasts to more households. We estimate that, 
taken together, those changes would increase revenues by $507 
million over the 2010-2019 period.
    Cable Copyright Royalty Fees. Under current law, cable 
companies pay a royalty fee to use copyrighted material based 
on revenues collected from subscribers that are entitled to 
receive the copyrighted material whether or not they receive 
those broadcasts. H.R. 3570 would increase royalty rates set in 
law and eliminate the requirement that copyright fees be paid 
on revenue from subscribers that do not receive the copyrighted 
material. The bill also would authorize the Copyright Office to 
distribute any royalty payments received as the result of 
private agreements reached between cable systems and copyright 
holders.
    In fiscal year 2008, the Copyright Office collected about 
$150 million in royalties from cable television carriers on 
revenues reported by approximately 5,000 cable systems. H.R. 
3570 would increase the rate charged on those revenues by 5 
percent. CBO estimates the higher royalty rate would increase 
revenues by $119 million over the 2010-2019 period.
    Copyright Office Filing Fees. H.R. 3570 would authorize the 
Copyright Office to establish a new fee to be paid by satellite 
and cable providers that report subscriber or revenue data 
twice yearly with their royalty payments. The fees would be set 
at a rate sufficient to cover a portion of the costs to 
administer the licensing program; copyright holders pay the 
full cost of the program under current law. Based on 
information from the Copyright Office, CBO estimates that those 
new filing fees would ultimately generate about $1 million per 
year for a total of $7 million over the 2010-2019 period and 
would increase direct spending by the same amount.
    Penalties. H.R. 3570 would significantly increase the size 
of the penalties that could be assessed for violations of rules 
that restrict satellite transmissions to households that cannot 
receive over-the-air network broadcasts that originate in their 
local market. This increase could result in additional Federal 
revenues when penalties are assessed for violations of the 
territorial restrictions. Civil penalties are recorded as 
revenues, however, CBO estimates that such revenue collections 
would not be significant due to the small number of cases 
expected to be involved.
Direct Spending
    Royalty Payments with Interest. With higher satellite and 
cable royalty collections under H.R. 3570, payments to 
copyright holders also would increase. Under current law, CRJs 
are responsible for determining the distribution of royalties 
collected and for settling disputes over royalty claims. 
Because the process relies on the copyright holders' agreement 
on the allocation of the amount due, royalty collections can be 
held by the Copyright Office for a number of years. Historical 
spending patterns indicate that copyright holders generally 
begin to receive payments several years after the revenues have 
been collected. Thus, we estimate a significant lag between 
increases in revenue collections and payments to copyright 
holders.
    Under current law, interest, which accrues on the 
collections during the time they are held by the Copyright 
Office, is paid to the copyright holders at the time the 
royalties are distributed. Based on historical spending 
patterns, CBO assumes that the royalties would be held for four 
years, on average, before being distributed.
    CBO estimates that increases in direct spending resulting 
from increases in royalty collections would total $718 million 
over the 2010-2019 period. Of that amount, approximately $90 
million represents payments of accrued interest.
    Filing Fees. Under current law, the full cost to administer 
the royalty program is deducted from payments due to copyright 
owners. As noted above, H.R. 3570 would authorize the Copyright 
Office to charge cable and satellite carriers filing fees to 
offset a portion of those administrative costs, in effect, 
distributing the program costs between those paying the royalty 
fees and those receiving the royalty distributions. This would 
result in an increase in the amount of royalties paid to the 
copyright holders because they would be covering a smaller 
portion of the administrative costs. CBO estimates that this 
provision would increase direct spending by $7 million over the 
2010-2019 period.
Spending Subject to Appropriation
    H.R. 3570 would require the Copyright Office to develop new 
regulations to allow reports submitted to the Office to be 
audited and to establish the new filing fees. In addition, the 
Federal Communications Commission would be required to develop 
a new model to determine the eligibility of households to 
receive copyright-protected satellite signals in light of the 
switch to digital broadcasting. Finally, the Department of 
Homeland Security would be required to develop regulations that 
would allow cable and satellite carriers to broadcast certain 
material to Federal agencies in the event of an emergency. 
Based on information from each agency, CBO estimates that 
implementing those requirements would not have a significant 
effect on spending subject to appropriation.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    H.R. 3570 would impose intergovernmental and private-sector 
mandates, as defined in UMRA, on satellite and cable carriers, 
broadcasters, and copyright holders. Based on information from 
industry sources and the Copyright Office, CBO estimates that 
the aggregate cost of complying with the mandates would not 
exceed the annual thresholds established in UMRA for 
intergovernmental or private-sector mandates ($69 million and 
$139 million in 2009, respectively, adjusted annually for 
inflation).
Mandates that Apply to both Public and Private Entities
    Secondary Transmission of Network Signals. The bill would 
extend an existing mandate on satellite carriers and copyright 
holders that requires them to participate in a process to set 
royalty rates for certain types of transmissions. The bill also 
would adjust some of the methods for determining subscribers' 
eligibility for those transmissions. The requirement to 
participate in the process is set to expire on December 31, 
2009.
    In the absence of the bill, royalty rates would be set in 
the private market. Under the bill, satellite carriers, as 
users of copyrighted materials, would not need specific 
permission from copyright owners to retransmit those materials 
to their eligible subscribers but would be required to pay 
royalties and abide by certain conditions when using the 
material. The bill would require satellite carriers and 
copyright holders to negotiate in good faith to set royalty 
rates. If a party objects to the rates set during the 
negotiations, the bill would require CRJs to establish rates 
that represent the fair market value. The cost of the mandate 
to satellite carriers and copyright holders would be equal to 
the difference between the royalties that would be set in the 
absence of the bill and the royalties set during the process 
required by the bill. Based on information from industry 
sources and the Copyright Office, CBO expects that the parties 
would reach an agreement on new rates that would not differ 
significantly from the rates that would be set in the market. 
Consequently, we estimate that the costs of complying with this 
mandate would be small.
    H.R. 3570 also would extend an existing mandate on 
broadcasters and copyright holders to allow satellite providers 
to retransmit network signals of certain stations without 
paying royalties. Based on information from the Federal 
Communications Commission and industry sources, CBO expects 
that few subscribers would be eligible for such transmissions. 
Therefore, CBO estimates that the cost to comply with the 
mandate would be minimal.
    Cable Royalty Rates. The bill would increase the royalties 
that cable carriers pay for retransmitting the signals of 
distant network stations by $54 million over the 2010-2014 
period. Based on information from industry sources about the 
number of cable carriers involved, CBO estimates that the cost 
to public cable carriers of the royalties set in the bill would 
total less than $3 million per year and that the cost to 
private cable carriers would total no more than $12 million per 
year.
    Filing Fees. The bill would require satellite and cable 
carriers to pay filing fees to the Copyright Office for any 
royalty payments incurred from retransmitting distant network 
signals. Based on information from the Copyright Office, CBO 
estimates that the cost to satellite and cable carriers would 
be $1 million per year beginning in 2013. At the same time, the 
bill would direct the Copyright Office to reduce fees that 
copyright holders pay under current law to register, renew, or 
change a copyright in an amount equal to the fees to be paid by 
satellite and cable carriers.
    Broadcaster Audits. The bill would require satellite and 
cable carriers to allow copyright holders to audit their 
subscriber lists. Because such subscriber information is 
already collected and maintained by satellite and cable 
carriers, CBO estimates that the cost of complying with this 
mandate would be minimal.
    Retransmission to Certain Government Organizations During 
Emergencies. The bill would limit the ability of copyright 
owners to collect compensation when secondary transmissions of 
copyrighted works are made for emergency purposes. CBO expects 
that few such emergencies would occur and estimates that the 
loss of compensation to copyright holders would be small.
Mandate that Applies to Private Entities Only
    Satellite Reporting Requirements. The bill would require 
satellite carriers to submit additional information about 
subscribers that receive local retransmission of network 
stations. Based on information from industry sources regarding 
current industry practice and the availability of such 
information, CBO estimates that the costs to comply would be 
minimal.

                          ESTIMATE PREPARED BY

    Federal Costs: Susan Willie
    Impact on State, Local, and Tribal Governments: Elizabeth 
Cove Delisle
    Impact on the Private Sector: Sam Wice and Paige Piper/Bach

                          ESTIMATE APPROVED BY

    Theresa Gullo: Deputy Assistant Director for Budget 
Analysis

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
3570 amends and modernizes the compulsory copyright licenses 
governing the retransmission of broadcast television signals 
set forth in Sections 111, 119 and 122 of Chapter 17 of the 
United States Code and reauthorizes the satellite license in 
Section 119 for 5 more years.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8, clauses 3 and 8 of 
the Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R.3570 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Short Title. Sets forth the short title of the bill 
as SHVURA.
    Sec. 2. Reference.
    Sec. 3. Modifications to Statutory License for Satellite 
Carriers.
    Subsection (a) removes ``for private home viewing'' from 
the heading to reflect the fact that the Act is no longer 
limited to private homes and now extends to commercial 
establishments, recreational vehicles, and other places. It 
updates the table of contents.
    Subsection (b) amends the definition of ``unserved 
household'' in Section 119(d)(10)(A). It clarifies that a 
household that does not receive a primary video signal from a 
network within its local market is unserved for the purposes of 
that network. The amended definition also provides that a 
household receiving a qualified multicast from a network within 
its local market will be considered served for the purpose of 
that network. ``Qualified multicast'' is defined in subsection 
(h). This subsection also grandfathers subscribers who were 
lawfully receiving distant signals when this law is enacted.
    Subsection (c) provides for a filing fee to help recoup 
administrative costs of distributing royalty fees. The fee will 
be set by the Copyright Office.
    Subsection (d) permits satellite carriers to retransmit 
programming that would otherwise be unavailable under the 
license at the request of the Secretary of Homeland Security, 
when necessary to help monitor and respond to a national 
emergency. This new subsection also requires the Secretary of 
Homeland Security to issue regulations governing these requests 
and to annually report such use to Congress.
    Subsection (e) will permit, but not require, satellite 
carriers to import state public television network signals into 
in-state counties that are located in an out-of-state DMA. 
Without this provision, satellite carriers cannot transmit the 
state or regional public television networks that are intended 
to serve the entire state to markets that are in a different 
DMA.
    Subsection (f) grants an audit right to copyright owners so 
they can verify the statements of account and royalty fees 
submitted by satellite providers.
    Subsection (g) amends Section 119(c), which sets forth the 
procedure for determining royalty rates. Royalty rates can 
either be set by voluntary agreement or by proceedings before 
the Copyright Royalty Judges. The new rates will not be 
automatically reduced as they were under the previous statute. 
The provision now clarifies that fees should be established for 
each digital stream of programming included in a multicast 
transmission. The subsection also provides for a more efficient 
annual cost of living adjustment by the Copyright Royalty 
Judges. Technical changes in this section include the 
elimination of the word analog, grammatical corrections, and 
deletion of references to arbitration proceedings and the 
Librarian of Congress.
    Subsection (h) adds or clarifies the definition of the 
following terms: ``subscriber,'' ``low power television 
station,'' ``local market,'' ``noncommercial educational 
broadcast station,'' ``multicast transmission,'' ``qualified 
multicast video,'' and ``nonnetwork station.'' A ``multicast 
transmission'' is a transmission by a television station that 
contains more than one channel or digital stream, each 
containing its own distinct programming. A ``qualified 
multicast video'' is a multicast video that can render a 
household served for the purpose of that network. A multicast 
that a satellite carrier offers to its subscribers on July 1, 
2009, and remains affiliated with the same network, will be 
counted for purposes of determining if a household is served. 
Any subsequent multicast streams will not render a household 
served until January 1, 2013. After that date, no new 
multicasts will be taken into account in the analysis of 
whether a household is served.
    Subsection (i) replaces the word ``superstation'' with the 
word ``nonnetwork station'' throughout the statute because 
``superstation'' has a different meaning in the licenses than 
it has in communications law.
    Subsection (j) amends the ``low power'' provision to 
clarify that the Section 119 license requires payment for the 
use of low-power signals when they are transmitted beyond the 
area they would otherwise reach over the air (the so-called 
``geographic restriction'').
    Subsection (k) removes the ``significantly viewed'' 
provision from Section 119 (so it can be inserted into Section 
122, as described below) and makes conforming amendments.
    Subsection (l) includes a predictive model to be used for 
digital signals, which shall be established by the FCC. This 
subsection also makes changes to 119(a)(3) [formerly (a)(4)], 
which grandfathers certain subscribers for distant signals. The 
subsection removes the word ``analog'' from each place it 
occurs and preserves the status quo so that subscribers who are 
grandfathered before the act continue to be grandfathered after 
the act. This subsection also increases the penalty for 
violations of territorial restrictions by increasing the 
maximum statutory damages from $5 to $250 per subscriber per 
month during which the violation occurred, and changes the 
maximum statutory damages for a regional or large-scale 
violation (that does not trigger a permanent injunction or 
``death penalty'') from $250,000 to $2.5M. This subsection also 
removes all references to Section 509 of Title 17, because that 
section was repealed last year.
    Sec. 4. Modifications to Statutory License For Satellite 
Carriers in Local Markets.
    Subsection (a) changes the heading of Section 122 to 
``Secondary Transmissions of Local Television Programming by 
Satellite.''
    Subsection (b) amends Section 122 to add the 
``significantly viewed'' provision that this bill removes from 
Section 119. The substance of the provision is essentially the 
same, except the significantly viewed waiver does not have the 
same sunset procedure. Low power stations are covered by the 
122 license where they are rebroadcast within their geographic 
limitations.
    Subsection (c) adds the requirement to report all 
subscribers receiving significantly viewed stations to the 
networks. (The legislation moves these requirements from 
Section 119 to Section 122).
    Subsection (d) increases the statutory penalty for 
individual violations of the Section 122 license from $5 to 
$250 for each subscriber for each month during which the 
violation occurred; it increases the statutory penalty for 
regional or national violations of the license from $250,000 to 
$2.5M.
    Subsection (e) makes minor changes to the definitions 
section, including adding the definition of ``low power 
television station'' to Section 122.
    Sec. 5. Modifications to Cable System Secondary 
Transmission Rights Under Section 111.
    Subsection (a) changes the title of Section 111 to reflect 
the fact that the license concerns secondary transmissions used 
in cable television.
    Subsection (b) permits cable operators to retransmit 
programming that would otherwise be unavailable under the 
license at the request of the Secretary of Homeland Security, 
when necessary to help monitor and respond to a national 
emergency. This new subsection also requires the Secretary of 
Homeland Security to issue regulations governing these requests 
and to annually report such use to Congress. This language 
parallels the language in Section 119.
    Subsection (c) resolves the phantom signal ambiguity that 
required cable systems to pay royalty fees for carriage to all 
subscribers within the system. It allows a cable system that 
provides transmissions of distant signals to some but not all 
communities to calculate royalty fees on the basis of the 
actual carriage of specific signals and the gross receipts 
derived from the subscribers in the community. It slightly 
raises the royalty rate that cable operators must pay to 
content owners.
    This subsection also provides for a filing fee to help 
recoup administrative costs of distributing royalty fees. It 
grants an audit right to copyright owners so they can verify 
the statements of account and royalty fees submitted by the 
cable operators. The Register of Copyrights will issue 
regulations that structure the process to reflect the 
particular requirements of auditing cable systems.
    Subsection (d) amends and supplements the terms defined in 
the statute to correct errors, describe new technologies and 
reflect alterations to the royalty structure. The term 
``distant signal equivalent'' is updated to reflect the digital 
transition and emergence of multicasting.
    Subsection (e) changes the date of the next inflation 
adjustment (which would have occurred in 2010), because the 
rates have already been increased in subsection (c).
    Subsection (f) makes technical and conforming amendments, 
including providing numbers for paragraphs that had been left 
undesignated in the previous statute and making grammatical 
corrections.
    Sec. 6. Certain Waivers Granted to Providers of Local-Into-
Local Service for All DMAs.
    This section waives the injunction precluding a previously-
enjoined satellite carrier (DISH Network) from using the 
Section 119 license, on the condition that the carrier provides 
local-into-local service in all 210 designated market areas or 
DMAs (defined as 90 percent of all households in each DMA). 
This subsection does not lift or alter the penalties for 
abusing the license that exist elsewhere in the statute. The 
waiver lasts only as long as the carrier continues to provide 
service in all 210 markets and abide by all other requirements 
of the license.
    It outlines the procedure by which the carrier must obtain 
permission to use the license on a temporary basis to enter all 
210 television markets. During this preliminary period, the 
carrier will have limited access to the license for the 
exclusive purpose of providing a full complement of programming 
to any `short market'' to which the carrier is providing local-
into-local service for the first time. A ``short market'' lacks 
one or more necessary affiliates. This limited temporary waiver 
can only be issued once and will expire within 120 days of its 
issuance unless the court finds good cause to extend the 
temporary waiver.
    Once the carrier is providing local-into-local service in 
all 210 DMAs, it will file a statement of eligibility with the 
court that imposed the injunction. This statement shall include 
a certification issued by the Federal Communications Commission 
stating that the carrier is providing a good quality signal to 
90 percent of the households in each DMA.
    The subsection also outlines the mechanism by which the 
carrier's establishment of service to all 210 markets can be 
challenged. It sets out the penalties that the court will 
impose for willful noncompliance, including the revocation of 
the license and substantial monetary penalties. It sets forth 
the burden of proof for initial and subsequent compliance 
proceedings.
    Sec. 7. Sunset of the Section 119 License.
    This section provides for the expiration of the Section 119 
license on December 31, 2014.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE



           *       *       *       *       *       *       *
            CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

Sec.
101. Definitions.
     * * * * * * *
[111. Limitations on exclusive rights: Secondary transmissions.]
111. Limitations on exclusive rights: Secondary transmissions of 
          television programming by cable.
     * * * * * * *
[119. Limitations on exclusive rights: Secondary transmissions of 
          superstations and network stations for private home viewing.]
119. Limitations on exclusive rights: Secondary transmissions of distant 
          television programming by satellite.
     * * * * * * *
[122. Limitations on exclusive rights: Secondary transmissions by 
          satellite carriers within local markets.]
122. Limitations on exclusive rights: Secondary transmissions of local 
          television programming by satellite.

           *       *       *       *       *       *       *


Sec. 111. Limitations on exclusive rights: Secondary transmissions of 
                    television programming by cable

    (a) Certain Secondary Transmissions Exempted.--The 
secondary transmission of a performance or display of a work 
embodied in a primary transmission is not an infringement of 
copyright if--
            (1) * * *
            (2) the secondary transmission is made solely for 
        the purpose and under the conditions specified by 
        [clause] paragraph (2) of section 110; or
            (3) the secondary transmission is made by any 
        carrier who has no direct or indirect control over the 
        content or selection of the primary transmission or 
        over the particular recipients of the secondary 
        transmission, and whose activities with respect to the 
        secondary transmission consist solely of providing 
        wires, cables, or other communications channels for the 
        use of others: Provided, That the provisions of this 
        [clause] paragraph extend only to the activities of 
        said carrier with respect to secondary transmissions 
        and do not exempt from liability the activities of 
        others with respect to their own primary or secondary 
        transmissions;
            (4) the secondary transmission is made by a 
        satellite carrier pursuant to a statutory license under 
        section 119[; or] or section 122;
            (5) the secondary transmission is not made by a 
        cable system but is made by a governmental body, or 
        other nonprofit organization, without any purpose of 
        direct or indirect commercial advantage, and without 
        charge to the recipients of the secondary transmission 
        other than assessments necessary to defray the actual 
        and reasonable costs of maintaining and operating the 
        secondary transmission service[.]; or
            (6) the secondary transmission is made by a cable 
        system for emergency preparation, response, or recovery 
        as described under subsection (g).

           *       *       *       *       *       *       *

    (c) Secondary Transmissions by Cable Systems.--
            (1) Subject to the provisions of [clauses] 
        paragraphs (2), (3), and (4) of this subsection and 
        section 114(d), secondary transmissions to the public 
        by a cable system of a performance or display of a work 
        embodied in a primary transmission made by a broadcast 
        station licensed by the Federal Communications 
        Commission or by an appropriate governmental authority 
        of Canada or Mexico shall be subject to statutory 
        licensing upon compliance with the requirements of 
        subsection (d) where the carriage of the signals 
        comprising the secondary transmission is permissible 
        under the rules, regulations, or authorizations of the 
        Federal Communications Commission.
            (2) Notwithstanding the provisions of [clause] 
        paragraph (1) of this subsection, the willful or 
        repeated secondary transmission to the public by a 
        cable system of a primary transmission made by a 
        broadcast station licensed by the Federal 
        Communications Commission or by an appropriate 
        governmental authority of Canada or Mexico and 
        embodying a performance or display of a work is 
        actionable as an act of infringement under section 501, 
        and is fully subject to the remedies provided by 
        sections 502 through 506, in the following cases:
                    (A) * * *

           *       *       *       *       *       *       *

            (3) Notwithstanding the provisions of [clause] 
        paragraph (1) of this subsection and subject to the 
        provisions of subsection (e) of this section, the 
        secondary transmission to the public by a cable system 
        of a performance or display of a work embodied in a 
        primary transmission made by a broadcast station 
        licensed by the Federal Communications Commission or by 
        an appropriate governmental authority of Canada or 
        Mexico is actionable as an act of infringement under 
        section 501, and is fully subject to the remedies 
        provided by sections 502 through 506 and section 510, 
        if the content of the particular program in which the 
        performance or display is embodied, or any commercial 
        advertising or station announcements transmitted by the 
        primary transmitter during, or immediately before or 
        after, the transmission of such program, is in any way 
        willfully altered by the cable system through changes, 
        deletions, or additions, except for the alteration, 
        deletion, or substitution of commercial advertisements 
        performed by those engaged in television commercial 
        advertising market research: Provided, That the 
        research company has obtained the prior consent of the 
        advertiser who has purchased the original commercial 
        advertisement, the television station broadcasting that 
        commercial advertisement, and the cable system 
        performing the secondary transmission: And provided 
        further, That such commercial alteration, deletion, or 
        substitution is not performed for the purpose of 
        deriving income from the sale of that commercial time.
            (4) Notwithstanding the provisions of [clause] 
        paragraph (1) of this subsection, the secondary 
        transmission to the public by a cable system of a 
        performance or display of a work embodied in a primary 
        transmission made by a broadcast station licensed by an 
        appropriate governmental authority of Canada or Mexico 
        is actionable as an act of infringement under section 
        501, and is fully subject to the remedies provided by 
        sections 502 through 506, if (A) with respect to 
        Canadian signals, the community of the cable system is 
        located more than 150 miles from the United States-
        Canadian border and is also located south of the forty-
        second parallel of latitude, or (B) with respect to 
        Mexican signals, the secondary transmission is made by 
        a cable system which received the primary transmission 
        by means other than direct interception of a free space 
        radio wave emitted by such broadcast television 
        station, unless prior to April 15, 1976, such cable 
        system was actually carrying, or was specifically 
        authorized to carry, the signal of such foreign station 
        on the system pursuant to the rules, regulations, or 
        authorizations of the Federal Communications 
        Commission.
    (d) Statutory License for Secondary Transmissions by Cable 
Systems.--
            (1) [A cable system whose secondary] Statement of 
        account and royalty fees.--A cable system whose 
        secondary transmissions have been subject to statutory 
        licensing under subsection (c) shall, on a semiannual 
        basis, deposit with the Register of Copyrights, in 
        accordance with requirements that the Register shall 
        prescribe [by regulation--] by regulation the 
        following:
                    (A) [a statement of account] A statement of 
                account, covering the six months next 
                preceding, specifying the number of channels on 
                which the cable system made secondary 
                transmissions to its subscribers, the names and 
                locations of all primary transmitters whose 
                transmissions were further transmitted by the 
                cable system, the total number of subscribers, 
                the gross amounts paid to the cable system for 
                the basic service of providing secondary 
                transmissions of primary broadcast 
                transmitters, and such other data as the 
                Register of Copyrights may from time to time 
                prescribe by regulation. In determining the 
                total number of subscribers and the gross 
                amounts paid to the cable system for the basic 
                service of providing secondary transmissions of 
                primary broadcast transmitters, the system 
                shall not include subscribers and amounts 
                collected from subscribers receiving secondary 
                transmissions pursuant to section 119. Such 
                statement shall also include a special 
                statement of account covering any [nonnetwork] 
                non-network television programming that was 
                carried by the cable system in whole or in part 
                beyond the local service area of the primary 
                transmitter, under rules, regulations, or 
                authorizations of the Federal Communications 
                Commission permitting the substitution or 
                addition of signals under certain 
                circumstances, together with logs showing the 
                times, dates, stations, and programs involved 
                in such substituted or added carriage[; and].
                    [(B) except in the case of a cable system 
                whose royalty is specified in subclause (C) or 
                (D), a total royalty fee for the period covered 
                by the statement, computed on the basis of 
                specified percentages of the gross receipts 
                from subscribers to the cable service during 
                said period for the basic service of providing 
                secondary transmissions of primary broadcast 
                transmitters, as follows:
                            [(i) 0.675 of 1 per centum of such 
                        gross receipts for the privilege of 
                        further transmitting any non-network 
                        programming of a primary transmitter in 
                        whole or in part beyond the local 
                        service area of such primary 
                        transmitter, such amount to be applied 
                        against the fee, if any, payable 
                        pursuant to paragraphs (ii) through 
                        (iv);
                            [(ii) 0.675 of 1 per centum of such 
                        gross receipts for the first distant 
                        signal equivalent;
                            [(iii) 0.425 of 1 per centum of 
                        such gross receipts for each of the 
                        second, third, and fourth distant 
                        signal equivalents;
                            [(iv) 0.2 of 1 per centum of such 
                        gross receipts for the fifth distant 
                        signal equivalent and each additional 
                        distant signal equivalent thereafter; 
                        and
                in computing the amounts payable under 
                paragraphs (ii) through (iv), above, any 
                fraction of a distant signal equivalent shall 
                be computed at its fractional value and, in the 
                case of any cable system located partly within 
                and partly without the local service area of a 
                primary transmitter, gross receipts shall be 
                limited to those gross receipts derived from 
                subscribers located without the local service 
                area of such primary transmitter; and
                    [(C) if the actual gross receipts paid by 
                subscribers to a cable system for the period 
                covered by the statement for the basic service 
                of providing secondary transmissions of primary 
                broadcast transmitters total $80,000 or less, 
                gross receipts of the cable system for the 
                purpose of this subclause shall be computed by 
                subtracting from such actual gross receipts the 
                amount by which $80,000 exceeds such actual 
                gross receipts, except that in no case shall a 
                cable system's gross receipts be reduced to 
                less than $3,000. The royalty fee payable under 
                this subclause shall be 0.5 of 1 per centum, 
                regardless of the number of distant signal 
                equivalents, if any; and
                    [(D) if the actual gross receipts paid by 
                subscribers to a cable system for the period 
                covered by the statement, for the basic service 
                of providing secondary transmissions of primary 
                broadcast transmitters, are more than $80,000 
                but less than $160,000, the royalty fee payable 
                under this subclause shall be (i) 0.5 of 1 per 
                centum of any gross receipts up to $80,000; and 
                (ii) 1 per centum of any gross receipts in 
                excess of $80,000 but less than $160,000, 
                regardless of the number of distant signal 
                equivalents, if any.]
                    (B) Except in the case of a cable system 
                whose royalty is specified in subparagraph (E) 
                or (F), a total royalty fee for the period 
                covered by the statement, computed on the basis 
                of specified percentages of the gross receipts 
                from subscribers to the cable service during 
                such period for the basic service of providing 
                secondary transmissions of primary broadcast 
                transmitters, as follows:
                            (i) 1.064 percent of such gross 
                        receipts for the privilege of further 
                        transmitting, beyond the local service 
                        area of such primary transmitter, any 
                        non-network programming of a primary 
                        transmitter in whole or in part, such 
                        amount to be applied against the fee, 
                        if any, payable pursuant to clauses 
                        (ii) through (iv);
                            (ii) 1.064 percent of such gross 
                        receipts for the first distant signal 
                        equivalent;
                            (iii) 0.701 percent of such gross 
                        receipts for each of the second, third, 
                        and fourth distant signal equivalents; 
                        and
                            (iv) 0.330 percent of such gross 
                        receipts for the fifth distant signal 
                        equivalent and each distant signal 
                        equivalent thereafter.
                    (C) In computing amounts under clauses (ii) 
                through (iv) of subparagraph (B)--
                            (i) any fraction of a distant 
                        signal equivalent shall be computed at 
                        its fractional value;
                            (ii) in the case of any cable 
                        system located partly within and partly 
                        outside of the local service area of a 
                        primary transmitter, gross receipts 
                        shall be limited to those gross 
                        receipts derived from subscribers 
                        located outside of the local service 
                        area of such primary transmitter; and
                            (iii) if a cable system provides a 
                        secondary transmission of a primary 
                        transmitter to some but not all 
                        communities served by that cable 
                        system--
                                    (I) the gross receipts and 
                                the distant signal equivalent 
                                values for such secondary 
                                transmission shall be derived 
                                solely on the basis of the 
                                subscribers in those 
                                communities where the cable 
                                system provides such secondary 
                                transmission; and
                                    (II) the total royalty fee 
                                for the period paid by such 
                                system shall not be less than 
                                the royalty fee calculated 
                                under subparagraph (B)(i) 
                                multiplied by the gross 
                                receipts from all subscribers 
                                to the system.
                    (D) A cable system that, on a statement 
                submitted before the date of the enactment of 
                the Satellite Home Viewer Update and 
                Reauthorization Act of 2009, computed its 
                royalty fee consistent with the methodology 
                under subparagraph (C)(iii) or that amends a 
                statement filed before such date of enactment 
                to compute the royalty fee due using such 
                methodology shall not be subject to an action 
                for infringement, or eligible for any royalty 
                refund or offset, arising out of its use of 
                such methodology on such statement.
                    (E) If the actual gross receipts paid by 
                subscribers to a cable system for the period 
                covered by the statement for the basic service 
                of providing secondary transmissions of primary 
                broadcast transmitters total $263,800 or less--
                            (i) gross receipts of the cable 
                        system for the purpose of this 
                        paragraph shall be computed by 
                        subtracting from such actual gross 
                        receipts the amount by which $263,800 
                        exceeds such actual gross receipts, 
                        except that in no case shall a cable 
                        system's gross receipts be reduced to 
                        less than $10,400; and
                            (ii) the royalty fee payable under 
                        this paragraph shall be 0.5 percent, 
                        regardless of the number of distant 
                        signal equivalents, if any.
                    (F) If the actual gross receipts paid by 
                subscribers to a cable system for the period 
                covered by the statement for the basic service 
                of providing secondary transmissions of primary 
                broadcast transmitters are more than $263,800 
                but less than $527,600, the royalty fee payable 
                under this paragraph shall be--
                            (i) 0.5 percent of any gross 
                        receipts up to $263,800, regardless of 
                        the number of distant signal 
                        equivalents, if any; and
                            (ii) 1 percent of any gross 
                        receipts in excess of $263,800, but 
                        less than $527,600, regardless of the 
                        number of distant signal equivalents, 
                        if any.
                    (G) A filing fee, as determined by the 
                Register of Copyrights pursuant to section 
                708(a).
            (2) [The Register of Copyrights] Handling of 
        fees.--The Register of Copyrights shall receive 
        (including the filing fee specified in paragraph 
        (1)(G)) all fees deposited under this section and, 
        after deducting the reasonable costs incurred by the 
        Copyright Office under this section, shall deposit the 
        balance in the Treasury of the United States, in such 
        manner as the Secretary of the Treasury directs. All 
        funds held by the Secretary of the Treasury shall be 
        invested in interest-bearing United States securities 
        for later distribution with interest by the Librarian 
        of Congress upon authorization by the Copyright Royalty 
        Judges.
            (3) [The royalty fees] Distribution of royalty fees 
        to copyright owners.--The royalty fees thus deposited 
        shall, in accordance with the procedures provided by 
        clause (4), be distributed to those among the following 
        copyright owners who claim that their works were the 
        subject of secondary transmissions by cable systems 
        during the relevant semiannual period:
                    (A) [any such] Any such owner whose work 
                was included in a secondary transmission made 
                by a cable system of a [nonnetwork] non-network 
                television program in whole or in part beyond 
                the local service area of the primary 
                transmitter[; and].
                    (B) [any such] Any such owner whose work 
                was included in a secondary transmission 
                identified in a special statement of account 
                deposited under clause (1)(A)[;].
                    (C) [any such] Any such owner whose work 
                was included in [nonnetwork] non-network 
                programming consisting exclusively of aural 
                signals carried by a cable system in whole or 
                in part beyond the local service area of the 
                primary transmitter of such programs.
            (4) [The royalty fees] Procedures for royalty fee 
        distribution.--The royalty fees thus deposited shall be 
        distributed in accordance with the following 
        procedures:
                    (A) * * *

           *       *       *       *       *       *       *

            (5) Verification of accounts and fee payments.--The 
        Register of Copyrights shall issue regulations to 
        provide for the confidential verification and audit of 
        the information reported on the semi-annual statement 
        of account filed after the date of the enactment of the 
        Satellite Home Viewer Update and Reauthorization Act of 
        2009. The regulations shall provide for a single 
        verification procedure, with respect to the semi-annual 
        statements of account filed by a cable system, to be 
        conducted by a qualified independent auditor on behalf 
        of all copyright owners whose works were the subject of 
        a secondary transmission to the public by a cable 
        system of a performance or display of a work embodied 
        in a primary transmission and for a mechanism to review 
        and cure defects identified by any such audit.
            (6) Acceptance of additional deposits.--Any royalty 
        fee payments received by the Copyright Office from 
        cable systems for the secondary transmission of primary 
        transmissions that are in addition to the payments 
        calculated and deposited in accordance with this 
        subsection shall be deemed to have been deposited for 
        the particular accounting period for which they are 
        received and shall be distributed as specified under 
        this subsection.
    (e) Nonsimultaneous Secondary Transmissions by Cable 
Systems.--
            (1) Notwithstanding those provisions of the [second 
        paragraph of subsection (f)] subsection (f)(2) relating 
        to nonsimultaneous secondary transmissions by a cable 
        system, any such transmissions are actionable as an act 
        of infringement under section 501, and are fully 
        subject to the remedies provided by sections 502 
        through 506 and section 510, unless--
                    (A) the program on the videotape is 
                transmitted no more than one time to the cable 
                system's subscribers; [and]
                    (B) the copyrighted program, episode, or 
                motion picture videotape, including the 
                commercials contained within such program, 
                episode, or picture, is transmitted without 
                deletion or editing; [and]
                    (C) an owner or officer of the cable system 
                (i) prevents the duplication of the videotape 
                while in the possession of the system, (ii) 
                prevents unauthorized duplication while in the 
                possession of the facility making the videotape 
                for the system if the system owns or controls 
                the facility, or takes reasonable precautions 
                to prevent such duplication if it does not own 
                or control the facility, (iii) takes adequate 
                precautions to prevent duplication while the 
                tape is being transported, and (iv) subject to 
                [clause] paragraph (2), erases or destroys, or 
                causes the erasure or destruction of, the 
                videotape; [and]
                    (D) within forty-five days after the end of 
                each calendar quarter, an owner or officer of 
                the cable system executes an affidavit 
                attesting (i) to the steps and precautions 
                taken to prevent duplication of the videotape, 
                and (ii) subject to [clause] paragraph (2), to 
                the erasure or destruction of all videotapes 
                made or used during such quarter; [and]
                    (E) such owner or officer places or causes 
                each such affidavit, and affidavits received 
                pursuant to [clause] paragraph (2)(C), to be 
                placed in a file, open to public inspection, at 
                such system's main office in the community 
                where the transmission is made or in the 
                nearest community where such system maintains 
                an office; and
                    (F) the nonsimultaneous transmission is one 
                that the cable system would be authorized to 
                transmit under the rules, regulations, and 
                authorizations of the Federal Communications 
                Commission in effect at the time of the 
                nonsimultaneous transmission if the 
                transmission had been made simultaneously, 
                except that this [subclause] subparagraph shall 
                not apply to inadvertent or accidental 
                transmissions.
            (2) If a cable system transfers to any person a 
        videotape of a program nonsimultaneously transmitted by 
        it, such transfer is actionable as an act of 
        infringement under section 501, and is fully subject to 
        the remedies provided by sections 502 through 506, 
        except that, pursuant to a written, nonprofit contract 
        providing for the equitable sharing of the costs of 
        such videotape and its transfer, a videotape 
        nonsimultaneously transmitted by it, in accordance with 
        [clause] paragraph (1), may be transferred by one cable 
        system in Alaska to another system in Alaska, by one 
        cable system in Hawaii permitted to make such 
        nonsimultaneous transmissions to another such cable 
        system in Hawaii, or by one cable system in Guam, the 
        Northern Mariana Islands, the Federated States of 
        Micronesia, the Republic of Palau, or the Republic of 
        the Marshall Islands, to another cable system in any of 
        those [three territories] five entities, if--
                    (A) each such contract is available for 
                public inspection in the offices of the cable 
                systems involved, and a copy of such contract 
                is filed, within thirty days after such 
                contract is entered into, with the Copyright 
                Office (which Office shall make each such 
                contract available for public inspection); 
                [and]
                    (B) the cable system to which the videotape 
                is transferred complies with [clause] paragraph 
                (1)(A), (B), (C)(i), (iii), and (iv), and (D) 
                through (F); and
                    (C) such system provides a copy of the 
                affidavit required to be made in accordance 
                with [clause] paragraph (1)(D) to each cable 
                system making a previous nonsimultaneous 
                transmission of the same videotape.

           *       *       *       *       *       *       *

            (4) As used in this subsection, the term 
        ``videotape'' [, and each of its variant forms,] means 
        the reproduction of the images and sounds of a program 
        or programs broadcast by a television broadcast station 
        licensed by the Federal Communications Commission, 
        regardless of the nature of the material objects, such 
        as tapes or films, in which the reproduction is 
        embodied.
    (f) Definitions.--As used in this section, the following 
terms [and their variant forms] mean the following:
            [A ``primary transmission'' is a transmission]
            (1) Primary transmission.--A ``primary 
        transmission'' is a transmission, including a multicast 
        transmission, made to the public by the transmitting 
        facility whose signals are being received and further 
        transmitted by the secondary transmission service, 
        regardless of where or when the performance or display 
        was first transmitted.
            [A ``secondary transmission'']
            (2) Secondary transmission.--A ``secondary 
        transmission'' is the further transmitting of a primary 
        transmission simultaneously with the primary 
        transmission, or nonsimultaneously with the primary 
        transmission if by a [``cable system''] cable system 
        not located in whole or in part within the boundary of 
        the forty-eight contiguous States, Hawaii, or Puerto 
        Rico: Provided, however, That a nonsimultaneous further 
        transmission by a cable system located in Hawaii of a 
        primary transmission shall be deemed to be a secondary 
        transmission if the carriage of the television 
        broadcast signal comprising such further transmission 
        is permissible under the rules, regulations, or 
        authorizations of the Federal Communications 
        Commission.
            [A ``cable system'']
            (3) Cable system.--A ``cable system'' is a 
        facility, located in any State, [Territory, Trust 
        Territory, or Possession] territory, trust territory, 
        or possession of the United States, that in whole or in 
        part receives signals transmitted or programs broadcast 
        by one or more television broadcast stations licensed 
        by the Federal Communications Commission, and makes 
        secondary transmissions of such signals or programs by 
        wires, cables, microwave, or other communications 
        channels to subscribing members of the public who pay 
        for such service. For purposes of determining the 
        royalty fee under subsection (d)(1), two or more cable 
        systems in contiguous communities under common 
        ownership or control or operating from one headend 
        shall be considered as one system.
            [The ``local service area of a primary 
        transmitter'']
            (4) Local service area of a primary transmitter.--
        The ``local service area of a primary transmitter'', in 
        the case of a television broadcast station, comprises 
        the area in which such station is entitled to insist 
        upon its signal being retransmitted by a cable system 
        pursuant to the rules, regulations, and authorizations 
        of the Federal Communications Commission in effect on 
        April 15, 1976, or such station's television market as 
        defined in section 76.55 (e) of title 47, Code of 
        Federal Regulations (as in effect on September 18, 
        1993), or any modifications to such television market 
        made, on or after September 18, 1993, pursuant to 
        section 76.55(e) or [76.59 of title 47 of the Code of 
        Federal Regulations] 76.59 of title 47, Code of Federal 
        Regulations, or within the noise-limited contour as 
        defined in 73.622(e)(1) of title 47, Code of Federal 
        Regulations, or in the case of a television broadcast 
        station licensed by an appropriate governmental 
        authority of Canada or Mexico, the area in which it 
        would be entitled to insist upon its signal being 
        retransmitted if it were a television broadcast station 
        subject to such rules, regulations, and authorizations. 
        In the case of a low power television station, [as 
        defined by the rules and regulations of the Federal 
        Communications Commission,] the ``local service area of 
        a primary transmitter'' comprises the area within 35 
        miles of the transmitter site, except that in the case 
        of such a station located in a standard metropolitan 
        statistical area which has one of the 50 largest 
        populations of all standard metropolitan statistical 
        areas (based on the 1980 decennial census of population 
        taken by the Secretary of Commerce), the number of 
        miles shall be 20 miles. The ``local service area of a 
        primary transmitter'', in the case of a radio broadcast 
        station, comprises the primary service area of such 
        station, pursuant to the rules and regulations of the 
        Federal Communications Commission.
            [A ``distant signal equivalent'' is the value 
        assigned to the secondary transmission of any 
        nonnetwork television programming carried by a cable 
        system in whole or in part beyond the local service 
        area of the primary transmitter of such programming. It 
        is computed by assigning a value of one to each 
        independent station and a value of one-quarter to each 
        network station and noncommercial educational station 
        for the nonnetwork programming so carried pursuant to 
        the rules, regulations, and authorizations of the 
        Federal Communications Commission. The foregoing values 
        for independent, network, and noncommercial educational 
        stations are subject, however, to the following 
        exceptions and limitations. Where the rules and 
        regulations of the Federal Communications Commission 
        require a cable system to omit the further transmission 
        of a particular program and such rules and regulations 
        also permit the substitution of another program 
        embodying a performance or display of a work in place 
        of the omitted transmission, or where such rules and 
        regulations in effect on the date of enactment of this 
        Act permit a cable system, at its election, to effect 
        such deletion and substitution of a nonlive program or 
        to carry additional programs not transmitted by primary 
        transmitters within whose local service area the cable 
        system is located, no value shall be assigned for the 
        substituted or additional program; where the rules, 
        regulations, or authorizations of the Federal 
        Communications Commission in effect on the date of 
        enactment of this Act permit a cable system, at its 
        election, to omit the further transmission of a 
        particular program and such rules, regulations, or 
        authorizations also permit the substitution of another 
        program embodying a performance or display of a work in 
        place of the omitted transmission, the value assigned 
        for the substituted or additional program shall be, in 
        the case of a live program, the value of one full 
        distant signal equivalent multiplied by a fraction that 
        has as its numerator the number of days in the year in 
        which such substitution occurs and as its denominator 
        the number of days in the year. In the case of a 
        station carried pursuant to the late-night or specialty 
        programming rules of the Federal Communications 
        Commission, or a station carried on a part-time basis 
        where full-time carriage is not possible because the 
        cable system lacks the activated channel capacity to 
        retransmit on a full-time basis all signals which it is 
        authorized to carry, the values for independent, 
        network, and noncommercial educational stations set 
        forth above, as the case may be, shall be multiplied by 
        a fraction which is equal to the ratio of the broadcast 
        hours of such station carried by the cable system to 
        the total broadcast hours of the station.]
            (5) Distant signal equivalent.--
                    (A) In general.--Except as provided under 
                subparagraph (B), a ``distant signal 
                equivalent''--
                            (i) is the value assigned to the 
                        secondary transmission of any non-
                        network television programming carried 
                        by a cable system in whole or in part 
                        beyond the local service area of the 
                        primary transmitter of such 
                        programming; and
                            (ii) is computed by assigning a 
                        value of one to each channel or digital 
                        stream carrying independent television 
                        programming, and a value of one-quarter 
                        to each channel or digital stream 
                        carrying network television programming 
                        or noncommercial educational television 
                        programming transmitted by a television 
                        broadcast station pursuant to the 
                        rules, regulations, and authorizations 
                        of the Federal Communications 
                        Commission.
                    (B) Exceptions.--The values for 
                independent, network, and noncommercial 
                educational programming specified in 
                subparagraph (A) are subject to the following:
                            (i) Where the rules and regulations 
                        of the Federal Communications 
                        Commission require a cable system to 
                        omit the further transmission of a 
                        particular program and such rules and 
                        regulations also permit the 
                        substitution of another program 
                        embodying a performance or display of a 
                        work in place of the omitted 
                        transmission, or where such rules and 
                        regulations in effect on the date of 
                        enactment of the Copyright Act of 1976 
                        permit a cable system, at its election, 
                        to effect such omission and 
                        substitution of a nonlive program or to 
                        carry additional programs not 
                        transmitted by primary transmitters 
                        within whose local service area the 
                        cable system is located, no value shall 
                        be assigned for the substituted or 
                        additional program.
                            (ii) Where the rules, regulations, 
                        or authorizations of the Federal 
                        Communications Commission in effect on 
                        the date of enactment of the Copyright 
                        Act of 1976 permit a cable system, at 
                        its election, to omit the further 
                        transmission of a particular program 
                        and such rules, regulations, or 
                        authorizations also permit the 
                        substitution of another program 
                        embodying a performance or display of a 
                        work in place of the omitted 
                        transmission, the value assigned for 
                        the substituted or additional program 
                        shall be, in the case of a live 
                        program, the value of one full distant 
                        signal equivalent multiplied by a 
                        fraction that has as its numerator the 
                        number of days in the year in which 
                        such substitution occurs and as its 
                        denominator the number of days in the 
                        year.
                            (iii) In the case of a channel or 
                        digital stream carried pursuant to the 
                        late-night or specialty programming 
                        rules of the Federal Communications 
                        Commission, or a channel or digital 
                        stream carried on a part-time basis 
                        where full-time carriage is not 
                        possible because the cable system lacks 
                        the activated channel capacity to 
                        retransmit on a full-time basis all 
                        signals that it is authorized to carry, 
                        the values for independent, network, 
                        and noncommercial educational 
                        programming set forth in subparagraph 
                        (A), as the case may be, shall be 
                        multiplied by a fraction that is equal 
                        to the ratio of the broadcast hours of 
                        such channel or digital stream carried 
                        by the cable system to the total 
                        broadcast hours of the channel or 
                        digital stream.
            [A ``network station'']
            (6) Network station.--
                    (A) In general.--A ``network station'' is a 
                television broadcast station that is owned or 
                operated by, or affiliated with, one or more of 
                the television networks in the United States 
                providing nationwide transmissions, and that 
                transmits a substantial part of the programming 
                supplied by such networks for a substantial 
                part of that station's typical broadcast day.
                    (B) Network programming.--The term 
                ``network television programming'' means 
                programming that is transmitted by a network 
                station.
            [An ``independent station'' is a commercial 
        television broadcast station other than a network 
        station.
            [A ``noncommercial educational station'' is a 
        television station that is a noncommercial educational 
        broadcast station as defined in section 397 of title 
        47.]
            (7) Independent station.--
                    (A) In general.--An ``independent station'' 
                is a commercial television broadcast station 
                other than a network station.
                    (B) Independent programming.--The term 
                ``independent television programming'' means 
                all programming other than ``network television 
                programming'' or ``noncommercial educational 
                television programming''.
            (8) Noncommercial educational station.--
                    (A) In general.--A ``noncommercial 
                educational station'' is a television or radio 
                broadcast station that--
                            (i) under the rules and regulations 
                        of the Federal Communications 
                        Commission in effect on November 2, 
                        1978, is eligible to be licensed by the 
                        Federal Communications Commission as a 
                        noncommercial educational radio or 
                        television broadcast station and that 
                        is owned and operated by a public 
                        agency or nonprofit private foundation, 
                        corporation, or association; or
                            (ii) is owned and operated by a 
                        municipality and that transmits only 
                        noncommercial programs for education 
                        purposes.
                    (B) Noncommercial educational 
                programming.--The term ``noncommercial 
                educational television programming'' means 
                programming that is transmitted by a 
                noncommercial educational station.
            (9) Multicast transmission.--A ``multicast 
        transmission'' is a transmission by a television 
        station that contains more than one channel or digital 
        stream, each containing its own distinct programming.
            (10) Subscriber.--The term ``subscriber'' means a 
        person or entity that receives a secondary transmission 
        service from a cable system and pays a fee for the 
        service, directly or indirectly, to the cable system.
    (g) Retransmission for Emergency Preparation, Response, or 
Recovery.--
            (1) Authority.--For purposes of subsection (a)(6), 
        a secondary transmission by a cable system of a 
        performance or display of a work embodied in a primary 
        transmission by a television broadcast station is made 
        for emergency preparation, response, or recovery if 
        such transmission is made--
                    (A) by a cable system to a Federal 
                governmental body designated by the Secretary 
                of Homeland Security or an organization 
                established with the purpose of carrying out a 
                system of national and international relief 
                efforts and chartered under section 300101 of 
                title 36;
                    (B) to officers or employees of such body 
                or such organization as a part of the official 
                duties or employment of such officers or 
                employees;
                    (C) at the request of the Secretary of 
                Homeland Security; and
                    (D) for the sole purpose of preparing for, 
                responding to, or recovering from an emergency 
                described under paragraph (2).
            (2) Emergencies.--An emergency is described under 
        this paragraph if the Secretary of Homeland Security 
        identifies such emergency as a major disaster, a 
        catastrophic incident, an act of terrorism, or a 
        transportation security incident.
            (3) Regulations.--Not later than 6 months after the 
        date of the enactment of this subsection, the Secretary 
        of Homeland Security shall issue regulations to protect 
        copyright owners by preventing the unauthorized access 
        to the secondary transmissions described in paragraph 
        (1).
            (4) Reports to congressional committees.--Not later 
        than one year after the date of the enactment of this 
        subsection and by September 30 of each year thereafter, 
        the Secretary of Homeland Security shall submit a 
        report to the Committee on the Judiciary and the 
        Committee on Homeland Security of the House of 
        Representatives and the Committee on the Judiciary of 
        the Senate describing--
                    (A) the manner in which the authority 
                granted under paragraph (1) is being used; and
                    (B) any additional legislative 
                recommendations the Secretary may have.
            (5) Definitions.--As used in this subsection:
                    (A) Terrorism.--The term ``terrorism'' has 
                the meaning given that term in section 2(16) of 
                the Homeland Security Act of 2002 (6 U.S.C. 
                101(16)).
                    (B) Transportation security incident.--The 
                term ``transportation security incident'' has 
                the meaning given that term in section 70101 of 
                title 46.
                    (C) Catastrophic incident.--The term 
                ``catastrophic incident'' means any natural 
                disaster, act of terrorism, or other man-made 
                disaster that results in extraordinary levels 
                of casualties or damage or disruption severely 
                affecting the population (including mass 
                evacuations), infrastructure, the environment, 
                the economy, national morale, or government 
                functions in a geographic area.
            (6) Effective date.--This subsection shall take 
        effect with respect to a secondary transmission 
        described under paragraph (1) that is made after the 
        end of the 30-day period beginning on the effective 
        date of the regulations issued by the Secretary of 
        Homeland Security under paragraph (3).

           *       *       *       *       *       *       *


Sec. 119. Limitations on exclusive rights: Secondary transmissions of 
                    [Superstations and network stations for private 
                    home viewing] distant television programming by 
                    satellite

    (a) Secondary Transmissions by Satellite Carriers.--
            (1) [Superstations] Non-network stations.--Subject 
        to the provisions of paragraphs [(5), (6), and (8)] 
        (4), (5), and (7) of this subsection and section 
        114(d), secondary transmissions of a performance or 
        display of a work embodied in a primary transmission 
        made by a [superstation] non-network station shall be 
        subject to statutory licensing under this section if 
        the secondary transmission is made by a satellite 
        carrier to the public for private home viewing or for 
        viewing in a commercial establishment, with regard to 
        secondary transmissions the satellite carrier is in 
        compliance with the rules, regulations, or 
        authorizations of the Federal Communications Commission 
        governing the carriage of television broadcast station 
        signals, and the carrier makes a direct or indirect 
        charge for each retransmission service to each 
        subscriber receiving the secondary transmission or to a 
        distributor that has contracted with the carrier for 
        direct or indirect delivery of the secondary 
        transmission to the public for private home viewing or 
        for viewing in a commercial establishment.
            (2) Network stations.--
                    (A) In general.--Subject to the provisions 
                of subparagraphs (B) and (C) of this paragraph 
                and [paragraphs (5), (6), (7), and (8)] 
                paragraphs (4), (5), (6), and (7) of this 
                subsection and section 114(d), secondary 
                transmissions of a performance or display of a 
                work embodied in a primary transmission made by 
                a network station shall be subject to statutory 
                licensing under this section if the secondary 
                transmission is made by a satellite carrier to 
                the public for private home viewing, with 
                regard to secondary transmissions the satellite 
                carrier is in compliance with the rules, 
                regulations, or authorizations of the Federal 
                Communications Commission governing the 
                carriage of television broadcast station 
                signals, and the carrier makes a direct or 
                indirect charge for such retransmission service 
                to each subscriber receiving the secondary 
                transmission.
                    (B) Secondary transmissions to unserved 
                households.--
                            (i) In general.--The statutory 
                        license provided for in subparagraph 
                        (A) shall be limited to secondary 
                        transmissions of the signals of no more 
                        than two network stations in a single 
                        day for each television network to 
                        persons who reside in unserved 
                        households. [The limitation in this 
                        clause shall not apply to secondary 
                        transmissions under paragraph (3).]
                            (ii) Accurate determinations of 
                        eligibility.--
                                    (I) * * *

           *       *       *       *       *       *       *

                                    (III) Accurate predictive 
                                model with respect to digital 
                                signals.--Notwithstanding 
                                subclause (I), in determining 
                                presumptively whether a person 
                                resides in an unserved 
                                household under subsection 
                                (d)(10)(A) with respect to 
                                digital signals, a court shall 
                                rely on a predictive model set 
                                forth by the Federal 
                                Communications Commission 
                                pursuant to a rulemaking as 
                                provided in section 339(c)(3) 
                                of the Communications Act of 
                                1934 (47 U.S.C. 339(c)(3)), as 
                                that model may be amended by 
                                the Commission over time under 
                                such section to increase the 
                                accuracy of that model. Until 
                                such time as the Commission 
                                sets forth such model, a court 
                                shall rely on the predictive 
                                model endorsed by the 
                                Commission in FCC 05-199, 
                                released December 9, 2005.
                            (iii) C-band exemption to unserved 
                        households.--
                                    (I) * * *
                                    (II) Definition.--[In this 
                                clause] In this clause, the 
                                term ``C-band service'' means a 
                                service that is licensed by the 
                                Federal Communications 
                                Commission and operates in the 
                                Fixed Satellite Service under 
                                part 25 of title 47 [of the 
                                Code of Federal Regulations], 
                                Code of Federal Regulations.
                    (C) Exceptions.--
                            (i) * * *
                            (ii) States with all network 
                        stations and [Superstations] non-
                        network stations in same local 
                        market.--In a State in which all 
                        network stations and [superstations] 
                        non-network stations licensed by the 
                        Federal Communications Commission 
                        within that State as of January 1, 
                        1995, are assigned to the same local 
                        market and that local market does not 
                        encompass all counties of that State, 
                        the statutory license provided under 
                        subparagraph (A) shall apply to the 
                        secondary transmission by a satellite 
                        carrier of the primary transmissions of 
                        such station to all subscribers in the 
                        State who reside in a local market that 
                        is within the first 50 major television 
                        markets as listed in the regulations of 
                        the Commission as in effect on such 
                        date (section 76.51 of title 47 [of the 
                        Code of Federal Regulations], Code of 
                        Federal Regulations).

           *       *       *       *       *       *       *

                            (vi) Networks of noncommercial 
                        educational broadcast stations.--In the 
                        case of a system of three or more 
                        noncommercial educational broadcast 
                        stations licensed to a single State, 
                        public agency, or political, 
                        educational, or special purpose 
                        subdivision of a State, the statutory 
                        license provided for in subparagraph 
                        (A) shall apply to the secondary 
                        transmission of the primary 
                        transmission of such system to any 
                        subscriber in any county within such 
                        State, if such subscriber is located in 
                        a designated market area that is not 
                        otherwise eligible to receive the 
                        secondary transmission of the primary 
                        transmission of such system pursuant to 
                        section 122(a).
                    (D) Submission of subscriber lists to 
                networks.--
                            [(i) Initial lists.--A satellite 
                        carrier that makes secondary 
                        transmissions of a primary transmission 
                        made by a network station pursuant to 
                        subparagraph (A) shall, 90 days after 
                        commencing such secondary 
                        transmissions, submit to the network 
                        that owns or is affiliated with the 
                        network station--
                                    [(I) a list identifying (by 
                                name and address, including 
                                street or rural route number, 
                                city, State, and zip code) all 
                                subscribers to which the 
                                satellite carrier makes 
                                secondary transmissions of that 
                                primary transmission to 
                                subscribers in unserved 
                                households; and
                                    [(II) a separate list, 
                                aggregated by designated market 
                                area (as defined in section 
                                122(j)) (by name and address, 
                                including street or rural route 
                                number, city, State, and zip 
                                code), which shall indicate 
                                those subscribers being served 
                                pursuant to paragraph (3), 
                                relating to significantly 
                                viewed stations.
                            [(ii) Monthly lists.--After the 
                        submission of the initial lists under 
                        clause (i), on the 15th of each month, 
                        the satellite carrier shall submit to 
                        the network--
                                    [(I) a list identifying (by 
                                name and address, including 
                                street or rural route number, 
                                city, State, and zip code) any 
                                persons who have been added or 
                                dropped as subscribers under 
                                clause (i)(I) since the last 
                                submission under clause (i); 
                                and
                                    [(II) a separate list, 
                                aggregated by designated market 
                                area (by name and street 
                                address, including street or 
                                rural route number, city, 
                                State, and zip code), 
                                identifying those subscribers 
                                whose service pursuant to 
                                paragraph (3), relating to 
                                significantly viewed stations, 
                                has been added or dropped.]
                            (i) Initial lists.--A satellite 
                        carrier that makes secondary 
                        transmissions of a primary transmission 
                        made by a network station pursuant to 
                        subparagraph (A) shall, not later than 
                        90 days after commencing such secondary 
                        transmissions, submit to the network 
                        that owns or is affiliated with the 
                        network station a list identifying (by 
                        name and address, including street or 
                        rural route number, city, State, and 9-
                        digit zip code) all subscribers to 
                        which the satellite carrier makes 
                        secondary transmissions of that primary 
                        transmission to subscribers in unserved 
                        households.
                            (ii) Monthly lists.--After the 
                        submission of the initial lists under 
                        clause (i), the satellite carrier 
                        shall, not later than the 15th of each 
                        month, submit to the network a list 
                        identifying (by name and address, 
                        including street or rural route number, 
                        city, State, and 9-digit zip code) any 
                        persons who have been added or dropped 
                        as subscribers under clause (i) since 
                        the last submission under clause (i).

           *       *       *       *       *       *       *

            [(3) Secondary transmissions of significantly 
        viewed signals.--
                    [(A) In general.--Notwithstanding the 
                provisions of paragraph (2)(B), and subject to 
                subparagraph (B) of this paragraph, the 
                statutory license provided for in paragraphs 
                (1) and (2) shall apply to the secondary 
                transmission of the primary transmission of a 
                network station or a non-network station to a 
                subscriber who resides outside the station's 
                local market (as defined in section 122(j)) but 
                within a community in which the signal has been 
                determined by the Federal Communications 
                Commission, to be significantly viewed in such 
                community, pursuant to the rules, regulations, 
                and authorizations of the Federal 
                Communications Commission in effect on April 
                15, 1976, applicable to determining with 
                respect to a cable system whether signals are 
                significantly viewed in a community.
                    [(B) Limitation.--Subparagraph (A) shall 
                apply only to secondary transmissions of the 
                primary transmissions of network stations and 
                non-network stations to subscribers who receive 
                secondary transmissions from a satellite 
                carrier pursuant to the statutory license under 
                section 122.
                    [(C) Waiver.--
                            [(i) In general.--A subscriber who 
                        is denied the secondary transmission of 
                        the primary transmission of a network 
                        station under subparagraph (B) may 
                        request a waiver from such denial by 
                        submitting a request, through the 
                        subscriber's satellite carrier, to the 
                        network station in the local market 
                        affiliated with the same network where 
                        the subscriber is located. The network 
                        station shall accept or reject the 
                        subscriber's request for a waiver 
                        within 30 days after receipt of the 
                        request. If the network station fails 
                        to accept or reject the subscriber's 
                        request for a waiver within that 30-day 
                        period, that network station shall be 
                        deemed to agree to the waiver request. 
                        Unless specifically stated by the 
                        network station, a waiver that was 
                        granted before the date of the 
                        enactment of the Satellite Home Viewer 
                        Extension and Reauthorization Act of 
                        2004 under section 339(c)(2) of the 
                        Communications Act of 1934 shall not 
                        constitute a waiver for purposes of 
                        this subparagraph.
                            [(ii) Sunset.--The authority under 
                        clause (i) to grant waivers shall 
                        terminate on December 31, 2008, and any 
                        such waiver in effect shall terminate 
                        on that date.]
            [(4)] (3) Statutory license where retransmissions 
        into local market available.--
                    (A) Rules for subscribers to [analog] 
                signals under subsection (e).--
                            (i) For those receiving distant 
                        [analog] signals.--In the case of a 
                        subscriber of a satellite carrier who 
                        is eligible to receive the secondary 
                        transmission of the primary [analog] 
                        transmission of a network station 
                        solely by reason of subsection (e) (in 
                        this subparagraph referred to as a 
                        ``distant [analog] signal''), and who, 
                        as of October 1, 2004, is receiving the 
                        distant [analog] signal of that network 
                        station, the following shall apply:
                                    (I) In a case in which the 
                                satellite carrier makes 
                                available to the subscriber the 
                                secondary transmission of the 
                                primary [analog] transmission 
                                of a local network station 
                                affiliated with the same 
                                television network pursuant to 
                                the statutory license under 
                                section 122, the statutory 
                                license under paragraph (2) 
                                shall apply only to secondary 
                                transmissions by that satellite 
                                carrier to that subscriber of 
                                the distant [analog] signal of 
                                a station affiliated with the 
                                same television network--
                                            (aa) if, within 60 
                                        days after receiving 
                                        the notice of the 
                                        satellite carrier under 
                                        section 338(h)(1) of 
                                        the Communications Act 
                                        of 1934, the subscriber 
                                        elects to retain the 
                                        distant [analog] 
                                        signal; but
                                            (bb) only until 
                                        such time as the 
                                        subscriber elects to 
                                        receive such local 
                                        [analog] signal.
                                    (II) Notwithstanding 
                                subclause (I), the statutory 
                                license under paragraph (2) 
                                shall not apply with respect to 
                                any subscriber who is eligible 
                                to receive the distant [analog] 
                                signal of a television network 
                                station solely by reason of 
                                subsection (e), unless the 
                                satellite carrier, within 60 
                                days after the date of the 
                                enactment of the Satellite Home 
                                Viewer Extension and 
                                Reauthorization Act of 2004, 
                                submits to that television 
                                network a list, aggregated by 
                                designated market area (as 
                                defined in section 
                                122(j)(2)(C)), that--
                                            (aa) identifies 
                                        that subscriber by name 
                                        and address (street or 
                                        rural route number, 
                                        city, State, and zip 
                                        code) and specifies the 
                                        distant [analog] 
                                        signals received by the 
                                        subscriber; and
                                            (bb) states, to the 
                                        best of the satellite 
                                        carrier's knowledge and 
                                        belief, after having 
                                        made diligent and good 
                                        faith inquiries, that 
                                        the subscriber is 
                                        eligible under 
                                        subsection (e) to 
                                        receive the distant 
                                        [analog] signals.
                            (ii) For those not receiving 
                        distant [analog] signals.--In the case 
                        of any subscriber of a satellite 
                        carrier who is eligible to receive the 
                        distant [analog] signal of a network 
                        station solely by reason of subsection 
                        (e) and who did not receive a distant 
                        [analog] signal of a station affiliated 
                        with the same network on October 1, 
                        2004, the statutory license under 
                        paragraph (2) shall not apply to 
                        secondary transmissions by that 
                        satellite carrier to that subscriber of 
                        the distant [analog] signal of a 
                        station affiliated with the same 
                        network.
                    [(B) Rules for other subscribers.--In the 
                case of a subscriber of a satellite carrier who 
                is eligible to receive the secondary 
                transmission of the primary transmission of a 
                network station under the statutory license 
                under paragraph (2) (in this subparagraph 
                referred to as a ``distant signal''), other 
                than subscribers to whom subparagraph (A) 
                applies, the following shall apply:
                            [(i) In a case in which the 
                        satellite carrier makes available to 
                        that subscriber, on January 1, 2005, 
                        the secondary transmission of the 
                        primary transmission of a local network 
                        station affiliated with the same 
                        television network pursuant to the 
                        statutory license under section 122, 
                        the statutory license under paragraph 
                        (2) shall apply only to secondary 
                        transmissions by that satellite carrier 
                        to that subscriber of the distant 
                        signal of a station affiliated with the 
                        same television network if the 
                        subscriber's satellite carrier, not 
                        later than March 1, 2005, submits to 
                        that television network a list, 
                        aggregated by designated market area 
                        (as defined in section 122(j)(2)(C)), 
                        that identifies that subscriber by name 
                        and address (street or rural route 
                        number, city, State, and zip code) and 
                        specifies the distant signals received 
                        by the subscriber.
                            [(ii) In a case in which the 
                        satellite carrier does not make 
                        available to that subscriber, on 
                        January 1, 2005, the secondary 
                        transmission of the primary 
                        transmission of a local network station 
                        affiliated with the same television 
                        network pursuant to the statutory 
                        license under section 122, the 
                        statutory license under paragraph (2) 
                        shall apply only to secondary 
                        transmissions by that satellite carrier 
                        of the distant signal of a station 
                        affiliated with the same network to 
                        that subscriber if--
                                    [(I) that subscriber seeks 
                                to subscribe to such distant 
                                signal before the date on which 
                                such carrier commences to 
                                provide pursuant to the 
                                statutory license under section 
                                122 the secondary transmissions 
                                of the primary transmission of 
                                stations from the local market 
                                of such local network station; 
                                and
                                    [(II) the satellite 
                                carrier, within 60 days after 
                                such date, submits to each 
                                television network a list that 
                                identifies each subscriber in 
                                that local market provided such 
                                an signal by name and address 
                                (street or rural route number, 
                                city, State, and zip code) and 
                                specifies the distant signals 
                                received by the subscriber.
                    [(C) Future applicability.--The statutory 
                license under paragraph (2) shall not apply to 
                the secondary transmission by a satellite 
                carrier of a primary transmission of a network 
                station to a person who--
                            [(i) is not a subscriber lawfully 
                        receiving such secondary transmission 
                        as of the date of the enactment of the 
                        Satellite Home Viewer Extension and 
                        Reauthorization Act of 2004; and
                            [(ii) at the time such person seeks 
                        to subscribe to receive such secondary 
                        transmission, resides in a local market 
                        where the satellite carrier makes 
                        available to that person the secondary 
                        transmission of the primary 
                        transmission of a local network station 
                        affiliated with the same television 
                        network pursuant to the statutory 
                        license under section 122, and such 
                        secondary transmission of such primary 
                        transmission can reach such person.
                    [(D) Special rules for distant digital 
                signals.--The statutory license under paragraph 
                (2) shall apply to secondary transmissions by a 
                satellite carrier to a subscriber of primary 
                digital transmissions of network stations if 
                such secondary transmissions to such subscriber 
                are permitted under section 339(a)(2)(D) of the 
                Communications Act of 1934, as in effect on the 
                day after the date of the enactment of the 
                Satellite Home Viewer Extension and 
                Reauthorization Act of 2004, except that the 
                reference to section 73.683(a) of title 47, 
                Code of Federal Regulations, referred to in 
                section 339(a)(2)(D)(i)(I) shall refer to such 
                section as in effect on the date of the 
                enactment of the Satellite Home Viewer 
                Extension and Reauthorization Act of 2004.]
                    (B) Rules for other subscribers.--The 
                statutory license under paragraph (2) shall not 
                apply to the secondary transmission by a 
                satellite carrier of a primary transmission of 
                a network station to a person who--
                            (i) is not a subscriber lawfully 
                        receiving such secondary transmission 
                        as of the date of the enactment of the 
                        Satellite Home Viewer Update and 
                        Reauthorization Act of 2009; or
                            (ii) at the time such person seeks 
                        to subscribe to receive such secondary 
                        transmission, resides in a local market 
                        where the satellite carrier makes 
                        available to that person the secondary 
                        transmission of the primary 
                        transmission of a local network station 
                        affiliated with the same television 
                        network pursuant to the statutory 
                        license under section 122, and such 
                        secondary transmission of such primary 
                        transmission can reach such person.
                    [(E)] (C) Other provisions not affected.--
                This paragraph shall not affect the 
                applicability of the statutory license to 
                secondary transmissions [under paragraph (3) 
                or] to unserved households included under 
                [paragraph (12)] paragraph (11).
                    [(F)] (D) Waiver.--A subscriber who is 
                denied the secondary transmission of a network 
                station under subparagraph [(C) or (D)] (B) may 
                request a waiver from such denial by submitting 
                a request, through the subscriber's satellite 
                carrier, to the network station in the local 
                market affiliated with the same network where 
                the subscriber is located. The network station 
                shall accept or reject the subscriber's request 
                for a waiver within 30 days after receipt of 
                the request. If the network station fails to 
                accept or reject the subscriber's request for a 
                waiver within that 30-day period, that network 
                station shall be deemed to agree to the waiver 
                request. Unless specifically stated by the 
                network station, a waiver that was granted 
                before the date of the enactment of the 
                Satellite Home Viewer Extension and 
                Reauthorization Act of 2004 under section 
                339(c)(2) of the Communications Act of 1934 
                shall not constitute a waiver for purposes of 
                this subparagraph.
                    [(G)] (E) Available defined.--For purposes 
                of this paragraph, a satellite carrier makes 
                available a secondary transmission of the 
                primary transmission of a local station to a 
                subscriber or person if the satellite carrier 
                offers that secondary transmission to other 
                subscribers who reside in the same 9-digit zip 
                code as that subscriber or person.
            [(5)] (4) Noncompliance with reporting and payment 
        requirements.--Notwithstanding the provisions of 
        paragraphs (1) and (2), the willful or repeated 
        secondary transmission to the public by a satellite 
        carrier of a primary transmission made by a 
        [superstation] non-network station or a network station 
        and embodying a performance or display of a work is 
        actionable as an act of infringement under section 501, 
        and is fully subject to the remedies provided by 
        sections 502 through 506 and 509, where the satellite 
        carrier has not deposited the statement of account and 
        royalty fee required by subsection (b), or has failed 
        to make the submissions to networks required by 
        paragraph (2)(C).
            [(6)] (5) Willful alterations.--Notwithstanding the 
        provisions of paragraphs (1) and (2), the secondary 
        transmission to the public by a satellite carrier of a 
        performance or display of a work embodied in a primary 
        transmission made by a [superstation] non-network 
        station or a network station is actionable as an act of 
        infringement under section 501, and is fully subject to 
        the remedies provided by sections 502 through 506 and 
        section 510, if the content of the particular program 
        in which the performance or display is embodied, or any 
        commercial advertising or station announcement 
        transmitted by the primary transmitter during, or 
        immediately before or after, the transmission of such 
        program, is in any way willfully altered by the 
        satellite carrier through changes, deletions, or 
        additions, or is combined with programming from any 
        other broadcast signal.
            [(7)] (6) Violation of territorial restrictions on 
        statutory license for network stations.--
                    (A) Individual violations.--The willful or 
                repeated secondary transmission by a satellite 
                carrier of a primary transmission made by a 
                network station and embodying a performance or 
                display of a work to a subscriber who is not 
                eligible to receive the transmission under this 
                section is actionable as an act of infringement 
                under section 501 and is fully subject to the 
                remedies provided by sections 502 through 506, 
                except that--
                            (i) * * *
                            (ii) any statutory damages shall 
                        not exceed [$5] $250 for such 
                        subscriber for each month during which 
                        the violation occurred.
                    (B) Pattern of violations.--If a satellite 
                carrier engages in a willful or repeated 
                pattern or practice of delivering a primary 
                transmission made by a network station and 
                embodying a performance or display of a work to 
                subscribers who are not eligible to receive the 
                transmission under this section, then in 
                addition to the remedies set forth in 
                subparagraph (A)--
                            (i) if the pattern or practice has 
                        been carried out on a substantially 
                        nationwide basis, the court shall order 
                        a permanent injunction barring the 
                        secondary transmission by the satellite 
                        carrier, for private home viewing, of 
                        the primary transmissions of any 
                        primary network station affiliated with 
                        the same network, and the court may 
                        order statutory damages of not to 
                        exceed [$250,000] $2,500,000 for each 
                        6-month period during which the pattern 
                        or practice was carried out; and
                            (ii) if the pattern or practice has 
                        been carried out on a local or regional 
                        basis, the court shall order a 
                        permanent injunction barring the 
                        secondary transmission, for private 
                        home viewing in that locality or 
                        region, by the satellite carrier of the 
                        primary transmissions of any primary 
                        network station affiliated with the 
                        same network, and the court may order 
                        statutory damages of not to exceed 
                        [$250,000] $2,500,000 for each 6-month 
                        period during which the pattern or 
                        practice was carried out.

           *       *       *       *       *       *       *

            [(8)] (7) Discrimination by a satellite carrier.--
        Notwithstanding the provisions of paragraph (1), the 
        willful or repeated secondary transmission to the 
        public by a satellite carrier of a performance or 
        display of a work embodied in a primary transmission 
        made by a [superstation] non-network station or a 
        network station is actionable as an act of infringement 
        under section 501, and is fully subject to the remedies 
        provided by sections 502 through 506, if the satellite 
        carrier unlawfully discriminates against a distributor.
            [(9)] (8) Geographic limitation on secondary 
        transmissions.--The statutory license created by this 
        section shall apply only to secondary transmissions to 
        households located in the United States.
            [(10)] (9) Loser pays for signal intensity 
        measurement; recovery of measurement costs in a civil 
        action.--In any civil action filed relating to the 
        eligibility of subscribing households as unserved 
        households--
                    (A) * * *

           *       *       *       *       *       *       *

            [(11)] (10) Inability to conduct measurement.--If a 
        network station makes a reasonable attempt to conduct a 
        site measurement of its signal at a subscriber's 
        household and is denied access for the purpose of 
        conducting the measurement, and is otherwise unable to 
        conduct a measurement, the satellite carrier shall 
        within 60 days notice thereof, terminate service of the 
        station's network to that household.
            [(12)] (11) Service to recreational vehicles and 
        commercial trucks.--
                    (A) Exemption.--
                            (i) In general.--For purposes of 
                        this subsection, and subject to clauses 
                        (ii) and (iii), the term ``unserved 
                        household'' shall include--
                                    (I) recreational vehicles 
                                as defined in regulations of 
                                the Secretary of Housing and 
                                Urban Development under section 
                                3282.8 of title 24 [of the Code 
                                of Federal Regulations], Code 
                                of Federal Regulations; and
                                    (II) commercial trucks that 
                                qualify as commercial motor 
                                vehicles under regulations of 
                                the Secretary of Transportation 
                                under section 383.5 of title 49 
                                [of the Code of Federal 
                                Regulations], Code of Federal 
                                Regulations.

           *       *       *       *       *       *       *

                    (B) Documentation requirements.--A 
                recreational vehicle or commercial truck shall 
                be deemed to be an unserved household beginning 
                10 days after the relevant satellite carrier 
                provides to the network that owns or is 
                affiliated with the network station that will 
                be secondarily transmitted to the recreational 
                vehicle or commercial truck the following 
                documents:
                            (i) * * *

           *       *       *       *       *       *       *

                            (iii) Registration and license.--In 
                        the case of a commercial truck, a copy 
                        of--
                                    (I) * * *
                                    (II) a copy of a valid, 
                                current commercial driver's 
                                license, as defined in 
                                regulations of the Secretary of 
                                Transportation under section 
                                383 of title 49 [of the Code of 
                                Federal Regulations], Code of 
                                Federal Regulations, issued to 
                                the operator.

           *       *       *       *       *       *       *

            [(13)] (12) Statutory license contingent on 
        compliance with fcc rules and remedial steps.--
        Notwithstanding any other provision of this section, 
        the willful or repeated secondary transmission to the 
        public by a satellite carrier of a primary transmission 
        embodying a performance or display of a work made by a 
        broadcast station licensed by the Federal 
        Communications Commission is actionable as an act of 
        infringement under section 501, and is fully subject to 
        the remedies provided by sections 502 through 506, if, 
        at the time of such transmission, the satellite carrier 
        is not in compliance with the rules, regulations, and 
        authorizations of the Federal Communications Commission 
        concerning the carriage of television broadcast station 
        signals.
            [(14)] (13) Waivers.--A subscriber who is denied 
        the secondary transmission of a signal of a network 
        station under subsection (a)(2)(B) may request a waiver 
        from such denial by submitting a request, through the 
        subscriber's satellite carrier, to the network station 
        asserting that the secondary transmission is 
        prohibited. The network station shall accept or reject 
        a subscriber's request for a waiver within 30 days 
        after receipt of the request. If a television network 
        station fails to accept or reject a subscriber's 
        request for a waiver within the 30-day period after 
        receipt of the request, that station shall be deemed to 
        agree to the waiver request and have filed such written 
        waiver. Unless specifically stated by the network 
        station, a waiver that was granted before the date of 
        the enactment of the Satellite Home Viewer Extension 
        and Reauthorization Act of 2004 under section 339(c)(2) 
        of the Communications Act of 1934, and that was in 
        effect on such date of enactment, shall constitute a 
        waiver for purposes of this paragraph.
            [(15) Carriage of low power television stations.--
                    [(A) In general.--Notwithstanding paragraph 
                (2)(B), and subject to subparagraphs (B) 
                through (F) of this paragraph, the statutory 
                license provided for in paragraphs (1) and (2) 
                shall apply to the secondary transmission of 
                the primary transmission of a network station 
                or a superstation that is licensed as a low 
                power television station, to a subscriber who 
                resides within the same local market.
                    [(B) Geographic limitation.--
                            [(i) Network stations.--With 
                        respect to network stations, secondary 
                        transmissions provided for in 
                        subparagraph (A) shall be limited to 
                        secondary transmissions to subscribers 
                        who--
                                    [(I) reside in the same 
                                local market as the station 
                                originating the signal; and
                                    [(II) reside within 35 
                                miles of the transmitter site 
                                of such station, except that in 
                                the case of such a station 
                                located in a standard 
                                metropolitan statistical area 
                                which has 1 of the 50 largest 
                                populations of all standard 
                                metropolitan statistical areas 
                                (based on the 1980 decennial 
                                census of population taken by 
                                the Secretary of Commerce), the 
                                number of miles shall be 20.
                            [(ii) Superstations.--With respect 
                        to superstations, secondary 
                        transmissions provided for in 
                        subparagraph (A) shall be limited to 
                        secondary transmissions to subscribers 
                        who reside in the same local market as 
                        the station originating the signal.
                    [(C) No applicability to repeaters and 
                translators.--Secondary transmissions provided 
                for in subparagraph (A) shall not apply to any 
                low power television station that retransmits 
                the programs and signals of another television 
                station for more than 2 hours each day.
                    [(D) Royalty fees.--Notwithstanding 
                subsection (b)(1)(B), a satellite carrier whose 
                secondary transmissions of the primary 
                transmissions of a low power television station 
                are subject to statutory licensing under this 
                section shall have no royalty obligation for 
                secondary transmissions to a subscriber who 
                resides within 35 miles of the transmitter site 
                of such station, except that in the case of 
                such a station located in a standard 
                metropolitan statistical area which has 1 of 
                the 50 largest populations of all standard 
                metropolitan statistical areas (based on the 
                1980 decennial census of population taken by 
                the Secretary of Commerce), the number of miles 
                shall be 20. Carriage of a superstation that is 
                a low power television station within the 
                station's local market, but outside of the 35-
                mile or 20-mile radius described in the 
                preceding sentence, shall be subject to royalty 
                payments under subsection (b)(1)(B).
                    [(E) Limitation to subscribers taking 
                local-into-local service.--Secondary 
                transmissions provided for in subparagraph (A) 
                may be made only to subscribers who receive 
                secondary transmissions of primary 
                transmissions from that satellite carrier 
                pursuant to the statutory license under section 
                122, and only in conformity with the 
                requirements under 340(b) of the Communications 
                Act of 1934, as in effect on the date of the 
                enactment of the Satellite Home Viewer 
                Extension and Reauthorization Act of 2004.]
            (14) Secondary transmissions of low power 
        television programming.--
                    (A) In general.--Notwithstanding paragraph 
                (2)(B), and subject to subparagraphs (B) 
                through (D) of this paragraph, the statutory 
                license provided for in paragraph (1) shall 
                apply to the secondary transmission by a 
                satellite carrier of the primary transmission 
                of the programming of a non-network station 
                that is licensed as a low power television 
                station, to a subscriber who resides within the 
                same designated market area as the station that 
                originates the programming signal.
                    (B) No applicability to repeaters and 
                translators.--Secondary transmissions provided 
                for in subparagraph (A) shall not apply to any 
                low power television station that retransmits 
                the programs and signals of another television 
                station for more than 2 hours each day.
                    (C) Royalty fees.--A satellite carrier 
                whose secondary transmission of the primary 
                transmission of the programming of a low power 
                television station is subject to statutory 
                licensing under this section shall be subject 
                to royalty payments under subsection (b)(1)(B) 
                for any transmission to a subscriber outside of 
                the local market of the low power television 
                station.
                    (D) Limitation to subscribers taking local-
                into-local service.--Secondary transmissions 
                provided for in subparagraph (A) may be made by 
                a satellite carrier only to subscribers who 
                receive secondary transmissions of primary 
                transmissions from that satellite carrier 
                pursuant to the statutory license under section 
                122.
            [(16)] (15) Restricted transmission of out-of-state 
        distant network signals into certain markets.--
                    (A) * * *

           *       *       *       *       *       *       *

            (16) Retransmission for emergency preparation, 
        response, or recovery.--
                    (A) Authority.--The secondary transmission 
                by a satellite carrier of a performance or 
                display of a work embodied in a primary 
                transmission of a television broadcast station 
                is not an infringement of copyright if such 
                secondary transmission is made--
                            (i) to a Federal governmental body 
                        designated by the Secretary of Homeland 
                        Security or an organization established 
                        with the purpose of carrying out a 
                        system of national and international 
                        relief efforts and chartered under 
                        section 300101 of title 36;
                            (ii) to officers or employees of 
                        such body or such organization as a 
                        part of the official duties or 
                        employment of such officers or 
                        employees;
                            (iii) at the request of the 
                        Secretary of Homeland Security; and
                            (iv) for the sole purpose of 
                        preparing for, responding to, or 
                        recovering from an emergency described 
                        under subparagraph (B).
                    (B) Emergencies.--An emergency is described 
                under this subparagraph if the Secretary of 
                Homeland Security identifies such emergency as 
                a major disaster, a catastrophic incident, an 
                act of terrorism, or a transportation security 
                incident.
                    (C) Regulations.--Not later than 6 months 
                after the date of the enactment of this 
                paragraph, the Secretary of Homeland Security 
                shall issue regulations to protect copyright 
                owners by preventing the unauthorized access to 
                the secondary transmissions described in 
                subparagraph (A).
                    (D) Reports to congressional committees.--
                Not later than one year after the date of the 
                enactment of this paragraph and by September 30 
                of each year thereafter, the Secretary of 
                Homeland Security shall submit a report to the 
                Committee on the Judiciary and the Committee on 
                Homeland Security of the House of 
                Representatives and the Committee on the 
                Judiciary of the Senate describing--
                            (i) the manner in which the 
                        authority granted under subparagraph 
                        (A) is being used; and
                            (ii) any additional legislative 
                        recommendations the Secretary may have.
                    (E) Definitions.--As used in this 
                paragraph:
                            (i) Terrorism.--The term 
                        ``terrorism'' has the meaning given 
                        that term in section 2(16) of the 
                        Homeland Security Act of 2002 (6 U.S.C. 
                        101(16)).
                            (ii) Transportation security 
                        incident.--The term ``transportation 
                        security incident'' has the meaning 
                        given that term in section 70101 of 
                        title 46.
                            (iii) Catastrophic incident.--The 
                        term ``catastrophic incident'' means 
                        any natural disaster, act of terrorism, 
                        or other man-made disaster that results 
                        in extraordinary levels of casualties 
                        or damage or disruption severely 
                        affecting the population (including 
                        mass evacuations), infrastructure, the 
                        environment, the economy, national 
                        morale, or government functions in a 
                        geographic area.
                    (F) Effective date.--This paragraph shall 
                take effect with respect to a secondary 
                transmission described under subparagraph (A) 
                that is made after the end of the 30-day period 
                beginning on the effective date of the 
                regulations issued by the Secretary of Homeland 
                Security under subparagraph (C).

           *       *       *       *       *       *       *

    [(b) Statutory License for Secondary Transmissions for 
Private Home Viewing.--]
    (b) Deposit of Statements and Fees; Verification 
Procedures.--
            (1) Deposits with the register of copyrights.--A 
        satellite carrier whose secondary transmissions are 
        subject to statutory licensing under subsection (a) 
        shall, on a semiannual basis, deposit with the Register 
        of Copyrights, in accordance with requirements that the 
        Register shall prescribe by regulation--
                    (A) a statement of account, covering the 
                preceding 6-month period, specifying the names 
                and locations of all non-network stations and 
                network stations whose signals were 
                retransmitted, at any time during that period, 
                to subscribers as described in subsections 
                (a)(1) and (a)(2), the total number of 
                subscribers that received such retransmissions, 
                and such other data as the Register of 
                Copyrights may from time to time prescribe by 
                regulation; [and]
                    (B) a royalty fee for that 6-month period, 
                computed by multiplying the total number of 
                subscribers receiving each secondary 
                transmission of each non-network station or 
                network station during each calendar month by 
                the appropriate rate in effect under this 
                section[.]; and
                    (C) a filing fee, as determined by the 
                Register of Copyrights pursuant to section 
                708(a).
        [Notwithstanding the provisions of subparagraph (B), a 
        satellite carrier whose secondary transmissions are 
        subject to statutory licensing under paragraph (1) or 
        (2) of subsection (a) shall have no royalty obligation 
        for secondary transmissions to a subscriber under 
        paragraph (3) of such subsection.]
            (2) Verification of accounts and fee payments.--The 
        Register of Copyrights shall issue regulations to 
        permit interested parties to verify and audit the 
        statements of account and royalty fees submitted by 
        satellite carriers under this subsection.
            [(2)] (3) Investment of fees.--The Register of 
        Copyrights shall receive all fees (including the filing 
        fee specified in paragraph (1)(C)) deposited under this 
        section and, after deducting the reasonable costs 
        incurred by the Copyright Office under this section 
        (other than the costs deducted under [paragraph (4)] 
        paragraph (5)), shall deposit the balance in the 
        Treasury of the United States, in such manner as the 
        Secretary of the Treasury directs. All funds held by 
        the Secretary of the Treasury shall be invested in 
        interest-bearing securities of the United States for 
        later distribution with interest by the Librarian of 
        Congress as provided by this title.
            [(3)] (4) Persons to whom fees are distributed.--
        The royalty fees deposited under [paragraph (2)] 
        paragraph (3) shall, in accordance with the procedures 
        provided by [paragraph (4)] paragraph (5), be 
        distributed to those copyright owners whose works were 
        included in a secondary transmission made by a 
        satellite carrier during the applicable 6-month 
        accounting period and who file a claim with the 
        Copyright Royalty Judges under [paragraph (4)] 
        paragraph (5).
            [(4)] (5) Procedures for distribution.--The royalty 
        fees deposited under [paragraph (2)] paragraph (3) 
        shall be distributed in accordance with the following 
        procedures:
                    (A) * * *

           *       *       *       *       *       *       *

    (c) Adjustment of Royalty Fees.--
            (1) Applicability and determination of royalty fees 
        for [analog] signals.--
                    (A) Initial fee.--The appropriate fee for 
                purposes of determining the royalty fee under 
                subsection (b)(1)(B) for the secondary 
                transmission of the [primary analog 
                transmissions] primary transmissions of network 
                stations and [superstations] non-network 
                stations shall be the appropriate fee set forth 
                in part 258 of title 37, Code of Federal 
                Regulations, as in effect on [July 1, 2004] 
                July 1, 2009, as modified under this paragraph.
                    (B) Fee set by voluntary negotiation.--On 
                or before [January 2, 2005, the Librarian of 
                Congress] January 4, 2010, the Copyright 
                Royalty Judges shall cause to be published in 
                the Federal Register of the initiation of 
                voluntary negotiation proceedings for the 
                purpose of determining the royalty fee to be 
                paid by satellite carriers for the secondary 
                transmission of the [primary analog 
                transmission] primary transmissions of network 
                stations and [superstations] non-network 
                stations under subsection (b)(1)(B). A separate 
                fee shall be established for each stream of a 
                multicast transmission included in the 
                secondary transmission to the subscriber.
                    (C) Negotiations.--Satellite carriers, 
                distributors, and copyright owners entitled to 
                royalty fees under this section shall negotiate 
                in good faith in an effort to reach a voluntary 
                agreement or agreements for the payment of 
                royalty fees. Any such satellite carriers, 
                distributors and copyright owners may at any 
                time negotiate and agree to the royalty fee, 
                and may designate common agents to negotiate, 
                agree to, or pay such fees. If the parties fail 
                to identify common agents, the [Librarian of 
                Congress] Copyright Royalty Judges shall do so, 
                after requesting recommendations from the 
                parties to the negotiation proceeding. The 
                parties to each negotiation proceeding shall 
                bear the cost thereof.
                    (D) Agreements binding on parties; filing 
                of agreements; public notice.--[(i) Voluntary 
                agreements]
                            (i) Voluntary agreements; filing.--
                        Voluntary agreements negotiated at any 
                        time in accordance with this paragraph 
                        shall be binding upon all satellite 
                        carriers, distributors, and copyright 
                        owners [that a parties] that are 
                        parties thereto. Copies of such 
                        agreements shall be filed with the 
                        Copyright Office within 30 days after 
                        execution in accordance with 
                        regulations that the Register of 
                        Copyrights shall prescribe.
                    [(ii)(I) Within]
                            (ii) Procedure for adoption of 
                        fees.--
                                    (I) Publication of 
                                notice.--Within 10 days after 
                                publication in the Federal 
                                Register of a notice of the 
                                initiation of voluntary 
                                negotiation proceedings, 
                                parties who have reached a 
                                voluntary agreement may request 
                                that the royalty fees in that 
                                agreement be applied to all 
                                satellite carriers, 
                                distributors, and copyright 
                                owners without convening [an 
                                arbitration proceeding pursuant 
                                to subparagraph (E)] a 
                                proceeding under subparagraph 
                                (F).
                    [(II) Upon receiving a request under 
                subclause (I), the Librarian of Congress]
                                    (II) Public notice of 
                                fees.--Upon receiving a request 
                                under subclause (I), the 
                                Copyright Royalty Judges shall 
                                immediately provide public 
                                notice of the royalty fees from 
                                the voluntary agreement and 
                                afford parties an opportunity 
                                to state that they object to 
                                those fees.
                    [(III) The Librarian]
                                    (III) Adoption of fees.--
                                The Copyright Royalty Judges 
                                shall adopt the royalty fees 
                                from the voluntary agreement 
                                for all satellite carriers, 
                                distributors, and copyright 
                                owners without convening [an 
                                arbitration proceeding] the 
                                proceeding under subparagraph 
                                (F) unless a party with an 
                                intent to participate in [the 
                                arbitration proceeding] that 
                                proceeding and a significant 
                                interest in the outcome of that 
                                proceeding objects under 
                                subclause (II).
                    (E) Period agreement is in effect.--The 
                obligation to pay the royalty fees established 
                under a voluntary agreement which has been 
                filed with the [Copyright Office] Copyright 
                Royalty Judges in accordance with this 
                paragraph shall become effective on the date 
                specified in the agreement, and shall remain in 
                effect until [December 31, 2009] December 31, 
                2014, or in accordance with the terms of the 
                agreement, whichever is later.
                    (F) Fee set by [compulsory arbitration] 
                copyright royalty judges proceeding.--
                            (i) Notice of initiation of 
                        [proceedings] the proceeding.--On or 
                        before [May 1, 2005, the Librarian of 
                        Congress] May 3, 2010, the Copyright 
                        Royalty Judges shall cause notice to be 
                        published in the Federal Register of 
                        the initiation of [arbitration 
                        proceedings] a proceeding for the 
                        purpose of determining the royalty [fee 
                        to be paid] fees to be paid for the 
                        secondary transmission of [primary 
                        analog transmission] the primary 
                        transmissions of network stations and 
                        [superstations] non-network stations 
                        under subsection (b)(1)(B) by satellite 
                        carriers and [distributors] 
                        distributors--
                                    (I) * * *
                                    (II) if an objection to the 
                                fees from a voluntary agreement 
                                submitted for adoption by the 
                                [Librarian of Congress] 
                                Copyright Royalty Judges to 
                                apply to all satellite 
                                carriers, distributors, and 
                                copyright owners is received 
                                under subparagraph (D) from a 
                                party with an intent to 
                                participate in the 
                                [arbitration] proceeding and a 
                                significant interest in the 
                                outcome of that proceeding.
                        [Such arbitration proceeding shall be 
                        conducted under chapter 8 as in effect 
                        on the day before the date of the 
                        enactment of the Copyright Royalty and 
                        Distribution Act of 2004.] Such 
                        proceeding shall be conducted under 
                        chapter 8.
                            [(ii) Establishment of royalty 
                        fees.--In determining royalty fees 
                        under this subparagraph, the copyright 
                        arbitration royalty panel appointed 
                        under chapter 8, as in effect on the 
                        day before the date of the enactment of 
                        the Copyright Royalty and Distribution 
                        Act of 2004 shall establish fees for 
                        the secondary transmissions of the 
                        primary analog transmission of network 
                        stations and non-network stations that 
                        most clearly represent the fair market 
                        value of secondary transmissions, 
                        except that the Librarian of Congress 
                        and any copyright arbitration royalty 
                        panel shall adjust those fees to 
                        account for the obligations of the 
                        parties under any applicable voluntary 
                        agreement filed with the Copyright 
                        Office pursuant to subparagraph (D). In 
                        determining the fair market value, the 
                        panel shall base its decision on 
                        economic, competitive, and programming 
                        information presented by the parties, 
                        including--]
                            (ii) Establishment of royalty 
                        fees.--In determining royalty fees 
                        under this subparagraph, the Copyright 
                        Royalty Judges shall establish fees for 
                        the secondary transmissions of the 
                        primary transmissions of network 
                        stations and non-network stations that 
                        most clearly represent the fair market 
                        value of secondary transmissions, 
                        except that the Copyright Royalty 
                        Judges shall adjust royalty fees to 
                        account for the obligations of the 
                        parties under any applicable voluntary 
                        agreement filed with the Copyright 
                        Royalty Judges in accordance with 
                        subparagraph (D). In determining the 
                        fair market value, the Judges shall 
                        base their decision on economic, 
                        competitive, and programming 
                        information presented by the parties, 
                        including--
                                    (I) * * *

           *       *       *       *       *       *       *

                            [(iii) Period during which decision 
                        of arbitration panel or order of 
                        librarian effective.--The obligation to 
                        pay the royalty fee established under a 
                        determination which--
                                    [(I) is made by a copyright 
                                arbitration royalty panel in an 
                                arbitration proceeding under 
                                this paragraph and is adopted 
                                by the Librarian of Congress 
                                under section 802(f), as in 
                                effect on the day before the 
                                date of the enactment of the 
                                Copyright Royalty and 
                                Distribution Act of 2004; or
                                    [(II) is established by the 
                                Librarian under section 802(f) 
                                as in effect on the day before 
                                such date of enactment shall be 
                                effective as of January 1, 
                                2005.]
                            (iii) Effective date for decision 
                        of copyright royalty judges.--The 
                        obligation to pay the royalty fees 
                        established under a determination that 
                        is made by the Copyright Royalty Judges 
                        in a proceeding under this paragraph 
                        shall be effective as of January 1, 
                        2010.
                            (iv) Persons subject to royalty 
                        [fee] fees.--The royalty [fee] fees 
                        referred to in (iii) shall be binding 
                        on all satellite carriers, distributors 
                        and copyright owners, who are not party 
                        to a voluntary agreement filed with the 
                        Copyright Office under subparagraph 
                        (D).
            [(2) Applicability and determination of royalty 
        fees for digital signals.--The process and requirements 
        for establishing the royalty fee payable under 
        subsection (b)(1)(B) for the secondary transmission of 
        the primary digital transmissions of network stations 
        and non-network stations shall be the same as that set 
        forth in paragraph (1) for the secondary transmission 
        of the primary analog transmission of network stations 
        and non-network stations, except that--
                    [(A) the initial fee under paragraph (1)(A) 
                shall be the rates set forth in section 
                298.3(b)(1) and (2) of title 37, Code of 
                Federal Regulations, as in effect on the date 
                of the enactment of the Satellite Home Viewer 
                Extension and Reauthorization Act of 2004, 
                reduced by 22.5 percent;
                    [(B) the notice of initiation of 
                arbitration proceedings required in paragraph 
                (1)(F)(i) shall be published on or before 
                December 31, 2005; and
                    [(C) the royalty fees that are established 
                for the secondary transmission of the primary 
                digital transmission of network stations and 
                non-network stations in accordance with to the 
                procedures set forth in paragraph (1)(F)(iii) 
                and are payable under subsection (b)(1)(B)--
                            [(i) shall be reduced by 22.5 
                        percent; and
                            [(ii) shall be adjusted by the 
                        Librarian of Congress on January 1, 
                        2007, and on January 1 of each year 
                        thereafter, to reflect any changes 
                        occurring during the preceding 12 
                        months in the cost of living as 
                        determined by the most recent Consumer 
                        Price Index (for all consumers and 
                        items) published by the Secretary of 
                        Labor.]
            (2) Annual royalty fee adjustment.--Effective 
        January 1 of each year, the royalty fee payable under 
        subsection (b)(1)(B) for the secondary transmission of 
        the primary transmissions of network stations and non-
        network stations shall be adjusted by the Copyright 
        Royalty Judges to reflect any changes occurring in the 
        cost of living as determined by the most recent 
        Consumer Price Index (for all consumers and for all 
        items) published by the Secretary of Labor before 
        December 1 of the preceding year. Notification of the 
        adjusted fees shall be published in the Federal 
        Register at least 25 days before January 1.
    (d) Definitions.--As used in this section--
            (1) Distributor.--The term ``distributor'' means an 
        entity [which] that contracts to distribute secondary 
        transmissions from a satellite carrier and, either as a 
        single channel or in a package with other programming, 
        provides the secondary transmission either directly to 
        individual subscribers or indirectly through other 
        program distribution entities in accordance with the 
        provisions of this section.
            (2) Network station.--The term ``network station'' 
        means--
                    (A) a television station licensed by the 
                Federal Communications Commission, including 
                any translator station or terrestrial satellite 
                station that rebroadcasts all or substantially 
                all of the programming broadcast by a network 
                station, that is owned or operated by, or 
                affiliated with, one or more of the television 
                networks in the United States [which] that 
                offer an interconnected program service on a 
                regular basis for 15 or more hours per week to 
                at least 25 of its affiliated television 
                licensees in 10 or more States; or
                    (B) a noncommercial educational broadcast 
                station [(as defined in section 397 of the 
                Communications Act of 1934)];
        except that the term does not include the signal of the 
        Alaska Rural Communications Service, or any successor 
        entity to that service.

           *       *       *       *       *       *       *

            (5) Private home viewing.--The term ``private home 
        viewing'' means the viewing, for private use in a 
        household by means of satellite reception equipment 
        [which] that is operated by an individual in that 
        household and [which] that serves only such household, 
        of a secondary transmission delivered by a satellite 
        carrier of a primary transmission of a television 
        station licensed by the Federal Communications 
        Commission.
            (6) Satellite carrier.--The term ``satellite 
        carrier'' means an entity that uses the facilities of a 
        satellite or satellite service licensed by the Federal 
        Communications Commission and operates in the Fixed-
        Satellite Service under part 25 of title 47 [of the 
        Code of Federal Regulations], Code of Federal 
        Regulations [or the Direct], or the Direct Broadcast 
        Satellite Service under part 100 of title 47 [of the 
        Code of Federal Regulations], Code of Federal 
        Regulations, to establish and operate a channel of 
        communications for point-to-multipoint distribution of 
        television station signals, and that owns or leases a 
        capacity or service on a satellite in order to provide 
        such point-to-multipoint distribution, except to the 
        extent that such entity provides such distribution 
        pursuant to tariff under the Communications Act of 
        1934, other than for private home viewing pursuant to 
        this section.

           *       *       *       *       *       *       *

            [(8) Subscriber.--The term ``subscriber'' means an 
        individual or entity that receives a secondary 
        transmission service by means of a secondary 
        transmission from a satellite carrier and pays a fee 
        for the service, directly or indirectly, to the 
        satellite carrier or to a distributor in accordance 
        with the provisions of this section.]
            (8) Subscriber.--The term ``subscriber'' means a 
        person or entity that receives a secondary transmission 
        service from a satellite carrier and pays a fee for the 
        service, directly or indirectly, to the satellite 
        carrier or to a distributor.
            (9) [Superstation] Non-network station.--The term 
        ``[superstation] non-network station'' means a 
        television station, other than a network station, 
        licensed by the Federal Communications Commission, that 
        is secondarily transmitted by a satellite carrier.
            (10) Unserved household.--The term ``unserved 
        household'', with respect to a particular television 
        network, means a household that--
                    [(A) cannot receive, through the use of a 
                conventional, stationary, outdoor rooftop 
                receiving antenna, an over-the-air signal of a 
                primary network station affiliated with that 
                network of Grade B intensity as defined by the 
                Federal Communications Commission under section 
                73.683(a) of title 47 , Code of Federal 
                Regulations, as in effect on January 1, 1999;]
                    (A) cannot receive, through the use of a 
                conventional, stationary, outdoor rooftop 
                receiving antenna, an over-the-air signal 
                containing the primary video or qualified 
                multicast video of a primary network station 
                located in that household's local market and 
                affiliated with that network of--
                            (i) if the signal originates as an 
                        analog signal, Grade B intensity as 
                        defined by the Federal Communications 
                        Commission under section 73.683(a) of 
                        title 47, Code of Federal Regulations, 
                        as in effect on January 1, 1999; or
                            (ii) if the signal originates as a 
                        digital signal, intensity defined in 
                        the values for digital television 
                        noise-limited service contour, as 
                        defined in regulations issued by the 
                        Federal Communications Commission under 
                        section 73.622(e) of title 47, Code of 
                        Federal Regulations, as such 
                        regulations may be amended from time to 
                        time;
                    (B) is subject to a waiver that meets the 
                standards of [subsection (a)(14)] subsection 
                (a)(13), whether or not the waiver was granted 
                before the date of the enactment of the 
                [Satellite Home Viewer Extension and 
                Reauthorization Act of 2004] Satellite Home 
                Viewer Update and Reauthorization Act of 2009;

           *       *       *       *       *       *       *

                    (D) is a subscriber to whom subsection 
                [(a)(12)] (a)(11) applies; [or]
                    (E) is a subscriber to whom the exemption 
                under subsection (a)(2)(B)(iii) applies[.]; or
                    (F) is a subscriber who was lawfully 
                receiving, by reason of subparagraph (A) of 
                this paragraph, as in effect on the day before 
                the date of the enactment of the Satellite Home 
                Viewer Update and Reauthorization Act of 2009, 
                secondary transmissions of the primary 
                transmission of a network station affiliated 
                with that network.
            [(11) Local market.--The term ``local market'' has 
        the meaning given such term under section 122(j), 
        except that with respect to a low power television 
        station, the term ``local market'' means the designated 
        market area in which the station is located.]
            (11) Local market.--The term ``local market'' has 
        the meaning given such term under section 122(j).
            (12) Low power television station.--The term ``low 
        power television station'' means a [low power 
        television as] low power TV station as defined under 
        section 74.701(f) of title 47, Code of Federal 
        Regulations, as in effect on June 1, 2004. For purposes 
        of this paragraph, the term ``low power television 
        station'' includes a low power television station that 
        has been accorded primary status as a Class A 
        television licensee under section 73.6001(a) of title 
        47, Code of Federal Regulations.

           *       *       *       *       *       *       *

            (14) Noncommercial educational broadcast station.--
        The term ``noncommercial educational broadcast 
        station'' means a television broadcast station that--
                    (A) under the rules and regulations of the 
                Federal Communications Commission in effect on 
                November 2, 1978, is eligible to be licensed by 
                the Federal Communications Commission as a 
                noncommercial educational television broadcast 
                station and is owned and operated by a public 
                agency or nonprofit private foundation, 
                corporation, or association; or
                    (B) is owned and operated by a municipality 
                and transmits only noncommercial programs for 
                education purposes.
            (15) Multicast transmission.--A ``multicast 
        transmission'' is a transmission by a television 
        station that contains more than one channel or digital 
        stream, each containing its own distinct programming.
            (16) Qualified multicast video.--A ``qualified 
        multicast video'' is a video stream other than the 
        primary video that, with respect to a particular 
        satellite carrier either--
                    (A) was carried by that satellite carrier 
                on July 1, 2009, and remains affiliated with 
                the same network; or
                    (B) exists on January 1, 2013, and remains 
                affiliated with the same network.
            (17) Primary video.--The term ``primary video'' 
        means the single programming stream and program-related 
        material that received the highest aggregate viewership 
        ratings (as determined by Nielsen Media Research) of 
        all programming streams offered by that station as of 
        the date of enactment of the Satellite Home Viewer 
        Update and Reauthorization Act of 2009, offered by a 
        television broadcast station.
    (e) Moratorium on Copyright Liability.--Until December 31, 
[2009] 2014, a subscriber who does not receive a signal of 
Grade A intensity (as defined in the regulations of the Federal 
Communications Commission under section 73.683(a) of title 47 
[of the Code of Federal Regulations], Code of Federal 
Regulations, as in effect on January 1, 1999, or predicted by 
the Federal Communications Commission using the Individual 
Location Longley-Rice methodology described by the Federal 
Communications Commission in Docket No. 98-201) of a local 
network television broadcast station shall remain eligible to 
receive signals of network stations affiliated with the same 
network, if that subscriber had satellite service of such 
network signal terminated after July 11, 1998, and before 
October 31, 1999, as required by this section, or received such 
service on October 31, 1999.

           *       *       *       *       *       *       *

    (g) Certain Waivers Granted to Providers of Local-Into-
Local Service to All Dmas.--
            (1) Injunction waiver.--A court that issued an 
        injunction pursuant to subsection (a)(7)(B) before the 
        date of the enactment of this subsection shall waive 
        such injunction if the court recognizes the entity 
        against which the injunction was issued as a qualified 
        carrier.
            (2) Limited temporary waiver.--
                    (A) In general.--Upon a request made by a 
                satellite carrier, a court that issued an 
                injunction against such carrier under 
                subsection (a)(7)(B) before the date of the 
                enactment of this subsection shall waive such 
                injunction with respect to the statutory 
                license provided under subsection (a)(2) to the 
                extent necessary to allow such carrier to 
                retransmit distant network signals to unserved 
                households located in short markets in which 
                such carrier was not providing local service 
                pursuant to the license under section 122 as of 
                December 31, 2009.
                    (B) Expiration of temporary waiver.--A 
                temporary waiver of an injunction under 
                subparagraph (A) shall expire after the end of 
                the 120-day period beginning on the date such 
                temporary waiver is made unless extended for 
                good cause by the court making the temporary 
                waiver.
                    (C) Failure to make good faith effort to 
                provide local-into-local service to all dmas.--
                            (i) Willful failure.--If the court 
                        making a temporary waiver under 
                        subparagraph (A) determines that the 
                        satellite carrier that made the request 
                        for such waiver has failed to make a 
                        good faith effort to provide local-
                        into-local service to all DMAs and 
                        determines that such failure was 
                        willful, such failure--
                                    (I) is actionable as an act 
                                of infringement under section 
                                501 and the court may in its 
                                discretion impose the remedies 
                                provided for in section 502 
                                through 506 and subsection 
                                (a)(6)(B) of this section; and
                                    (II) shall result in the 
                                termination of the waiver 
                                provided under subparagraph 
                                (A).
                            (ii) Nonwillful failure.--If the 
                        court making a temporary waiver under 
                        subparagraph (A) determines that the 
                        satellite carrier that made the request 
                        for such waiver has failed to make a 
                        good faith effort to provide local-
                        into-local service to all DMAs and 
                        determines that such failure was 
                        nonwillful, the court may in its 
                        discretion impose financial penalties 
                        that reflect--
                                    (I) the degree of control 
                                the carrier had over the 
                                circumstances that resulted in 
                                the failure;
                                    (II) the quality of the 
                                carrier's efforts to remedy the 
                                failure; and
                                    (III) the severity and 
                                duration of the service 
                                interruption.
                    (D) Single temporary waiver available.--An 
                entity may only receive one temporary waiver 
                under this paragraph.
                    (E) Short market defined.--For purposes of 
                this paragraph, the term ``short market'' means 
                a local market in which programming of one or 
                more of the four most widely viewed television 
                networks nationwide as measured on the date of 
                enactment of this subsection is not offered on 
                the primary signal of any local television 
                broadcast station.
            (3) Establishment of qualified carrier 
        recognition.--
                    (A) Statement of eligibility.--An entity 
                seeking to be recognized as a qualified carrier 
                under this subsection shall file a statement of 
                eligibility with the court that imposed the 
                injunction. A statement of eligibility must 
                include--
                            (i) an affidavit that the entity is 
                        providing local-into-local service to 
                        all DMAs;
                            (ii) a request for a waiver of the 
                        injunction; and
                            (iii) a certification issued 
                        pursuant to section [X] of [E&C Act].
                    (B) Grant of recognition as a qualified 
                carrier.--Upon receipt of a statement of 
                eligibility, the court shall recognize the 
                entity as a qualified carrier and issue the 
                waiver under paragraph (1).
                    (C) Voluntary termination.--At any time, an 
                entity recognized as a qualified carrier may 
                file a statement of voluntary termination with 
                the court certifying that it no longer wishes 
                to be recognized as a qualified carrier. Upon 
                receipt of such statement, the court shall 
                reinstate the injunction waived under paragraph 
                (1).
                    (D) Loss of recognition prevents future 
                recognition.--No entity may be recognized as a 
                qualified carrier if such entity had previously 
                been recognized as a qualified carrier and 
                subsequently lost such recognition or 
                voluntarily terminated such recognition under 
                subparagraph (C).
            (4) Qualified carrier obligations and compliance.--
                    (A) In general.--An entity recognized as a 
                qualified carrier shall continue to provide 
                local-into-local service to all DMAs.
                    (B) Compliance determination.--Upon the 
                motion of an aggrieved television broadcast 
                station, the court recognizing an entity as a 
                qualified carrier may make a determination of 
                whether the entity is providing local-into-
                local service to all DMAs.
                    (C) Pleading requirement.--In any motion 
                brought under subparagraph (B), the party 
                making such motion shall specify one or more 
                designated market areas (as such term is 
                defined in section 122(j)(2)(C)) for which the 
                failure to provide service is being alleged, 
                and, for each such designated market area, 
                shall plead with particularity the 
                circumstances of the alleged failure.
                    (D) Burden of proof.--In any proceeding to 
                make a determination under subparagraph (B), 
                and with respect to a designated market area 
                for which failure to provide service is 
                alleged, the entity recognized as a qualified 
                carrier shall have the burden of proving that 
                the entity provided local-into-local service 
                with a good quality satellite signal to 90 
                percent of the households in such designated 
                market area at the time and place alleged.
            (5) Failure to provide service.--
                    (A) Penalties.--If the court recognizing an 
                entity as a qualified carrier finds that such 
                entity has willfully failed to provide local-
                into-local service to all DMAs, such finding 
                shall result in the loss of recognition of the 
                entity as a qualified carrier and the 
                termination of the waiver provided under 
                paragraph (1), and the court may, in its 
                discretion--
                            (i) treat such failure as an act of 
                        infringement under section 501, and 
                        subject such infringement to the 
                        remedies provided for in sections 502 
                        through 506 and subsection (a)(6)(B) of 
                        this section; and
                            (ii) impose a fine of no greater 
                        than $250,000.
                    (B) Exception for nonwillful violation.--If 
                the court determines that the failure to 
                provide local-into-local service to all DMAs is 
                nonwillful, the court may in its discretion 
                impose financial penalties for noncompliance 
                that reflect--
                            (i) the degree of control the 
                        entity had over the circumstances that 
                        resulted in the failure;
                            (ii) the quality of the entity's 
                        efforts to remedy the failure and 
                        restore service; and
                            (iii) the severity and duration of 
                        the service interruption.
            (6) Penalties for violations of license.--A court 
        that finds, under subsection (a)(6)(A), that an entity 
        recognized as a qualified carrier has willfully made a 
        secondary transmission of a primary transmission made 
        by a network station and embodying a performance or 
        display of a work to a subscriber who is not eligible 
        to receive the transmission under this section shall 
        reinstate the injunction waived under paragraph (1), 
        and the court may order statutory damages of not to 
        exceed $2,500,000.
            (7) Local-into-local service to all dmas defined.--
        For purposes of this subsection:
                    (A) In general.--An entity provides 
                ``local-into-local service to all DMAs'' if the 
                entity provides local service in all designated 
                market areas (as such term is defined in 
                section 122(j)(2)(C)) pursuant to the license 
                under section 122.
                    (B) Household coverage.--For purposes of 
                subparagraph (A), an entity that makes 
                available local-into-local service with a good 
                quality satellite signal to 90 percent of the 
                households in a designated market area based on 
                the most recent census data shall be considered 
                to be providing local service to such 
                designated market area.
                    (C) Good quality satellite signal 
                defined.--The term ``good quality signal'' has 
                the meaning given such term under section [X] 
                of [E&C Act].

           *       *       *       *       *       *       *


Sec. 122. Limitations on exclusive rights: Secondary transmissions [by 
                    satellite carriers within local markets] of local 
                    television programming by satellite

    [(a) Secondary Transmissions of Television Broadcast 
Stations by Satellite Carriers.--A secondary transmission of a 
performance or display of a work embodied in a primary 
transmission of a television broadcast station into the 
station's local market shall be subject to statutory licensing 
under this section if--
            [(1) the secondary transmission is made by a 
        satellite carrier to the public;
            [(2) with regard to secondary transmissions, the 
        satellite carrier is in compliance with the rules, 
        regulations, or authorizations of the Federal 
        Communications Commission governing the carriage of 
        television broadcast station signals; and
            [(3) the satellite carrier makes a direct or 
        indirect charge for the secondary transmission to--
                    [(A) each subscriber receiving the 
                secondary transmission; or
                    [(B) a distributor that has contracted with 
                the satellite carrier for direct or indirect 
                delivery of the secondary transmission to the 
                public.]
    (a) Secondary Transmissions Into Local Markets.--
            (1) Secondary transmissions of television broadcast 
        stations within a local market.--A secondary 
        transmission of a performance or display of a work 
        embodied in a primary transmission of a television 
        broadcast station into the station's local market shall 
        be subject to statutory licensing under this section 
        if--
                    (A) the secondary transmission is made by a 
                satellite carrier to the public;
                    (B) with regard to secondary transmissions, 
                the satellite carrier is in compliance with the 
                rules, regulations, or authorizations of the 
                Federal Communications Commission governing the 
                carriage of television broadcast station 
                signals; and
                    (C) the satellite carrier makes a direct or 
                indirect charge for the secondary transmission 
                to--
                            (i) each subscriber receiving the 
                        secondary transmission; or
                            (ii) a distributor that has 
                        contracted with the satellite carrier 
                        for direct or indirect delivery of the 
                        secondary transmission to the public.
            (2) Significantly viewed stations.--
                    (A) In general.--The statutory license 
                under paragraph (1) shall apply to the 
                secondary transmission of the primary 
                transmission of a network station or a non-
                network station to a subscriber who resides 
                outside the station's local market but within a 
                community in which the signal has been 
                determined by the Federal Communications 
                Commission to be significantly viewed in such 
                community, pursuant to the rules, regulations, 
                and authorizations of the Federal 
                Communications Commission in effect on April 
                15, 1976, applicable to determining with 
                respect to a cable system whether signals are 
                significantly viewed in a community.
                    (B) Limitation.--Subparagraph (A) shall 
                apply only to secondary transmissions of the 
                primary transmissions of network stations or 
                non-network stations to subscribers who receive 
                secondary transmissions from a satellite 
                carrier pursuant to the statutory license under 
                paragraph (1).
                    (C) Waiver.--A subscriber who is denied the 
                secondary transmission of the primary 
                transmission of a network station or a non-
                network station under subparagraph (B) may 
                request a waiver from such denial by submitting 
                a request, through the subscriber's satellite 
                carrier, to the network station or non-network 
                station in the local market affiliated with the 
                same network or non-network where the 
                subscriber is located. The network station or 
                non-network station shall accept or reject the 
                subscriber's request for a waiver within 30 
                days after receipt of the request. If the 
                network station or non-network station fails to 
                accept or reject the subscriber's request for a 
                waiver within that 30-day period, that network 
                station or non-network station shall be deemed 
                to agree to the waiver request.
            (3) Secondary transmission of low power 
        programming.--
                    (A) In general.--Subject to subparagraphs 
                (B) through (D) of this paragraph, the 
                statutory license provided under paragraph (1) 
                shall apply to the secondary transmission by a 
                satellite carrier of the primary transmission 
                of a network station or a non-network station 
                that is licensed as a low power television 
                station, to a subscriber who resides within the 
                same local market as the station that 
                originates the transmission.
                    (B) No applicability to repeaters and 
                translators.--Secondary transmissions by a 
                satellite carrier provided for in subparagraph 
                (A) shall not apply to any low power television 
                station that retransmits the programs and 
                signals of another television station for more 
                than 2 hours each day.
                    (C) Limitation to subscribers taking local-
                into-local service.--Secondary transmissions by 
                a satellite carrier provided for in 
                subparagraph (A) may be made only to 
                subscribers who receive secondary transmissions 
                of primary transmissions from that satellite 
                carrier pursuant to the statutory license in 
                paragraph (1), and only in conformity with the 
                requirements under section 340(b) of the 
                Communications Act of 1934, as in effect on the 
                date of the enactment of the Satellite Home 
                Viewer Update and Reauthorization Act of 2009.
                    (D) No impact on other secondary 
                transmissions obligations.--A satellite carrier 
                that makes secondary transmissions of a primary 
                transmission of a low power television station 
                under a statutory license provided under this 
                section is not required, by reason of such 
                secondary transmissions, to make any other 
                secondary transmissions.
    (b) Reporting Requirements.--
            (1) Initial lists.--A satellite carrier that makes 
        secondary transmissions of a primary transmission made 
        by a network station under subsection (a) shall, within 
        90 days after commencing such secondary transmissions, 
        submit to the network that owns or is affiliated with 
        the network [station a list identifying (by name in 
        alphabetical order and street address, including county 
        and zip code) all subscribers to which the satellite 
        carrier makes secondary transmissions of that primary 
        transmission under subsection (a).] station--
                    (A) a list identifying (by name in 
                alphabetical order and street address, 
                including county and 9-digit zip code) all 
                subscribers to which the satellite carrier 
                makes secondary transmissions of that primary 
                transmission under subsection (a); and
                    (B) a separate list, aggregated by 
                designated market area (by name and address, 
                including street or rural route number, city, 
                State, and 9-digit zip code), which shall 
                indicate those subscribers being served 
                pursuant to subsection (a)(2), relating to 
                significantly viewed stations.
            (2) Subsequent lists.--After the list is submitted 
        under paragraph (1), the satellite carrier shall, on 
        the 15th of each month, submit to the [network a list 
        identifying (by name in alphabetical order and street 
        address, including county and zip code) any subscribers 
        who have been added or dropped as subscribers since the 
        last submission under this subsection.] network--
                    (A) a list identifying (by name in 
                alphabetical order and street address, 
                including county and 9-digit zip code) any 
                subscribers who have been added or dropped as 
                subscribers since the last submission under 
                this subsection; and
                    (B) a separate list, aggregated by 
                designated market area (by name and street 
                address, including street or rural route 
                number, city, State, and 9-digit zip code), 
                identifying those subscribers whose service 
                pursuant to subsection (a)(2), relating to 
                significantly viewed stations, has been added 
                or dropped since the last submission under this 
                subsection.

           *       *       *       *       *       *       *

    (f) Violation of Territorial Restrictions on Statutory 
License for Television Broadcast Stations.--
            (1) Individual violations.--The willful or repeated 
        secondary transmission to the public by a satellite 
        carrier of a primary transmission embodying a 
        performance or display of a work made by a television 
        broadcast station to a subscriber who does not reside 
        in that station's local market, and is not subject to 
        statutory licensing under [section 119 or] section 119, 
        subject to statutory licensing by reason of subsection 
        (a)(2)(A), or subject to a private licensing agreement, 
        is actionable as an act of infringement under section 
        501 and is fully subject to the remedies provided by 
        sections 502 through 506, except that--
                    (A) * * *
                    (B) any statutory damages shall not exceed 
                [$5] $250 for such subscriber for each month 
                during which the violation occurred.
            (2) Pattern of violations.--If a satellite carrier 
        engages in a willful or repeated pattern or practice of 
        secondarily transmitting to the public a primary 
        transmission embodying a performance or display of a 
        work made by a television broadcast station to 
        subscribers who do not reside in that station's local 
        market, and are not subject to statutory licensing 
        under [section 119 or] section 119, subject to 
        statutory licensing by reason of subsection (a)(2)(A), 
        or subject to a private licensing agreement, then in 
        addition to the remedies under paragraph (1)--
                    (A) if the pattern or practice has been 
                carried out on a substantially nationwide 
                basis, the court--
                            (i) * * *
                            (ii) may order statutory damages 
                        not exceeding [$250,000] $2,500,000 for 
                        each 6-month period during which the 
                        pattern or practice was carried out; 
                        and
                    (B) if the pattern or practice has been 
                carried out on a local or regional basis with 
                respect to more than one television broadcast 
                station, the court--
                            (i) * * *
                            (ii) may order statutory damages 
                        not exceeding [$250,000] $2,500,000 for 
                        each 6-month period during which the 
                        pattern or practice was carried out.
    (g) Burden of Proof.--In any action brought under 
subsection (f), the satellite carrier shall have the burden of 
proving that its secondary transmission of a primary 
transmission by a television broadcast station is made only to 
subscribers located within that station's local market or 
subscribers being served in compliance with [section 119 or] 
section 119, subsection (a)(2)(A), or a private licensing 
agreement.

           *       *       *       *       *       *       *

    (j) Definitions.--In this section--
            (1) Distributor.--The term ``distributor'' means an 
        entity [which contracts] that contracts to distribute 
        secondary transmissions from a satellite carrier and, 
        either as a single channel or in a package with other 
        programming, provides the secondary transmission either 
        directly to individual subscribers or indirectly 
        through other program distribution entities.
            (2) Local market.--
                    [(A) In general.--The term ``local 
                market'', in the case of both commercial and 
                noncommercial television broadcast stations, 
                means the designated market area in which a 
                station is located, and--
                            [(i) in the case of a commercial 
                        television broadcast station, all 
                        commercial television broadcast 
                        stations licensed to a community within 
                        the same designated market area are 
                        within the same local market; and
                            [(ii) in the case of a 
                        noncommercial educational television 
                        broadcast station, the market includes 
                        any station that is licensed to a 
                        community within the same designated 
                        market area as the noncommercial 
                        educational television broadcast 
                        station.]
                    (A) In general.--The term ``local market'' 
                means--
                            (i) in the case of a television 
                        broadcast station that is not a low 
                        power television station, the 
                        designated market area in which such 
                        station is located, and--
                                    (I) in the case of a 
                                commercial television broadcast 
                                station, all commercial 
                                television broadcast stations 
                                licensed to a community within 
                                the same designated market area 
                                are within the same local 
                                market; and
                                    (II) in the case of a 
                                noncommercial educational 
                                television broadcast station, 
                                any station that is licensed to 
                                a community within the same 
                                designated market area as the 
                                noncommercial educational 
                                television broadcast station; 
                                and
                            (ii) in the case of a low power 
                        television broadcast station, the area 
                        that is both--
                                    (I) within the designated 
                                market area in which such 
                                station is located; and
                                    (II) within the area within 
                                35 miles of the transmitter 
                                site of such station, except 
                                that in the case of such a 
                                station located in a standard 
                                metropolitan statistical area 
                                that has 1 of the 50 largest 
                                populations of all standard 
                                metropolitan statistical areas 
                                (based on the 1980 decennial 
                                census of population taken by 
                                the Secretary of Commerce), the 
                                area within 20 miles of the 
                                transmitter site of such 
                                station.

           *       *       *       *       *       *       *

            (3) Network station; Non-network station; satellite 
        carrier; secondary transmission.--The terms ``network 
        station'', ``non-network station'', ``satellite 
        carrier'', and ``secondary transmission'' have the 
        meanings given such terms under section 119(d).
            [(4) Subscriber.--The term ``subscriber'' means a 
        person who receives a secondary transmission service 
        from a satellite carrier and pays a fee for the 
        service, directly or indirectly, to the satellite 
        carrier or to a distributor.]
            (4) Subscriber.--The term ``subscriber'' means a 
        person or entity that receives a secondary transmission 
        service from a satellite carrier and pays a fee for the 
        service, directly or indirectly, to the satellite 
        carrier or to a distributor.

           *       *       *       *       *       *       *

            (6) Low power television station.--The term ``low 
        power television station'' means a low power TV station 
        as defined under section 74.701(f) of title 47, Code of 
        Federal Regulations, as in effect on June 1, 2004. For 
        purposes of this paragraph, the term ``low power 
        television station'' includes a low power television 
        station that has been accorded primary status as a 
        Class A television licensee under section 73.6001(a) of 
        title 47, Code of Federal Regulations.

           *       *       *       *       *       *       *


CHAPTER 8--PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES

           *       *       *       *       *       *       *


Sec. 804. Institution of proceedings

    (a) * * *
    (b) Timing of Proceedings.--
            (1) Section 111 proceedings.--(A) A petition 
        described in subsection (a) to initiate proceedings 
        under section 801(b)(2) concerning the adjustment of 
        royalty rates under section 111 to which subparagraph 
        (A) or (D) of section 801(b)(2) applies may be filed 
        during the year [2005] 2015 and in each subsequent 
        fifth calendar year.
            (B) In order to initiate proceedings under section 
        801(b)(2) concerning the adjustment of royalty rates 
        under section 111 to which subparagraph (B) or (C) of 
        section 801(b)(2) applies, within 12 months after an 
        event described in either of those subsections, any 
        owner or user of a copyrighted work whose royalty rates 
        are specified by section 111, or by a rate established 
        under this chapter before or after the enactment of the 
        Copyright Royalty and Distribution Reform Act of 2004, 
        may file a petition with the Copyright Royalty Judges 
        declaring that the petitioner requests an adjustment of 
        the rate. The Copyright Royalty Judges shall then 
        proceed as set forth in subsection (a) of this section. 
        Any change in royalty rates made under this chapter 
        pursuant to this subparagraph may be reconsidered in 
        the year [2005] 2015, and each fifth calendar year 
        thereafter, in accordance with the provisions in 
        section 801(b)(2)(B) or (C), as the case may be. A 
        petition for adjustment of rates established by section 
        111(d)(1)(B) as a result of a change in the rules and 
        regulations of the Federal Communications Commission 
        shall set forth the change on which the petition is 
        based.

           *       *       *       *       *       *       *


                    Committee Jurisdictional Letters


                            Additional Views

    The principal purpose of H.R. 3570 is to extend for an 
additional five years the copyright compulsory license, which 
is codified in Sec. 119 of title 17, United States Code, for 
the satellite retransmission of distant over-the-air television 
broadcast stations. The bill also contains amendments to the 
local satellite retransmission license, which is codified in 
Sec. 122 of title 17, and the cable license, which is codified 
in Sec. 111 of title 17. Together, these licenses provide 
statutory authority for satellite and cable providers to compel 
copyright owners to make available their television programs at 
below-market government-mandated rates.

          A. EXPANSION AND PERPETUATION OF COMPULSORY LICENSES

        ``The bill rests on the assumption that Congress should 
        impose a compulsory license only when the marketplace 
        cannot suffice.''\1\
---------------------------------------------------------------------------
    \1\H.R. Rep. No. 100-887, 100th Cong., 2d Sess., pt. 1, at 15.

    When the original Satellite Home Viewer Act was enacted, it 
was intended to provide a limited and temporary mechanism for 
clearing the rights to copyrighted television broadcast 
programming. The drafters' intent was to permit the license to 
expire once the satellite industry and copyright owners were 
able to negotiate the rights to network television programs in 
an efficient manner.
    At present, it is estimated that approximately one million 
subscribers receive distant-network programming under the 
authority of the Sec. 119 license. Despite the existence of 
these licenses, the cable and satellite industries remain free 
to enter into private negotiations with copyright owners and to 
compensate them for the use of their property under agreed-upon 
terms. Indeed, such agreements provide the basis for the 
overwhelming majority of programming made available to cable 
and satellite subscribers.
    In several respects, H.R. 3570 resuscitates, broadens and 
extends the license rather than accelerating its demise. This 
is regrettable since the justification for establishing the 
license and abrogating the rights of copyright owners, i.e. 
that consumers would benefit from the nurturing of an effective 
competitor to cable providers, was satisfied long ago.
    Today, the two national satellite carriers are the second 
and third largest multi-video program distributors (MVPD's) in 
the country. For years, they have been among the fastest 
growing and most profitable programming distributors as their 
technology and the efficiencies of scale they enjoy as 
``national'' services have enabled them to take market-share 
from local and regional cable competitors.
    The Satellite Home Viewer Act of 1988 was envisioned as 
necessary to spur the growth of a start-up direct-to-home 
satellite industry as an effective competitor to cable. 
Congress determined ``that the public interest best will be 
served by creating an interim statutory solution that will 
allow carriers of broadcast signals to serve home satellite 
antenna users until marketplace solutions to this problem can 
be developed.''\2\ Congress was clear that it ``does not favor 
interference with workable marketplace relationships for the 
transfer of exhibition rights in programming,'' and that by 
adopting a 6-year sunset on the new satellite compulsory 
license it expected that ``the marketplace and competition will 
eventually serve the needs of home satellite dish owners.''\3\
---------------------------------------------------------------------------
    \2\Id. at 13.
    \3\Id. at 15.
---------------------------------------------------------------------------
    The Copyright Office was specifically tasked with the 
responsibility to evaluate the effect of these licenses and in 
the 2008 report mandated by the Satellite Home Viewer Extension 
and Reauthorization Act (SHVERA), found that both the cable and 
satellite industries ``are no longer nascent entities in need 
of government subsidies through a statutory licensing system'' 
and that they ``have substantial market power and are able to 
negotiate private agreements with copyright owners.'' The 
Copyright Office concluded that the distant compulsory licenses 
``have interfered in the marketplace for programming and have 
unfairly lowered the rates paid to copyright owners'' and that 
``[t]he time has come when private negotiations would serve the 
public interest, and interests of the creative community, 
better than either Section 111 or Section 119.'' The report's 
principal recommendation was ``that Congress move toward 
abolishing Section 111 and Section 119 of the [Copyright] 
Act.'' That recommendation builds upon findings in earlier 
Copyright Office reports in 1997 and 1992 and a 1989 FCC 
report.
    There is ample evidence to question whether satellite 
carriers continue to need the compulsory license to effectively 
compete and provide a ``lifeline'' network service to 
consumers. The license is of tremendous economic value to them 
in avoiding negotiations and the payment of market rates to 
copyright owners. Even if Congress was not prepared to allow 
the license to expire at the end of 2009, the decision to 
extend it by an additional five years without including 
meaningful steps to transition content owners and wean 
satellite carriers from the coerced subsidy they receive out of 
the pockets of creators was unfortunate. Congress should 
examine ways to replace the current system with an alternative 
that is fair to all copyright owners.

 B. SUBORDINATING COPYRIGHT ENFORCEMENT TO THE COMMUNICATIONS ACT GOAL 
                      OF LOCAL-INTO-LOCAL SERVICE

    During the 2004 reauthorization of the Sec. 119 license, 
the Committee worked to diminish satellite carriers' continued 
reliance on the distant programming license, to provide for the 
evaluation of free-market alternatives, and to encourage the 
wider availability of local programming. As a result, satellite 
carriers today offer ``local into local'' service to 
approximately 97% of American households.
    Nevertheless, there are some markets where satellite 
providers chose not to offer local service due to low 
population densities and/or business or economic decisions. A 
desire to ensure the availability of local service in these few 
remaining markets is cited as the motivation for section six of 
the bill, which orders a federal court to waive a permanent 
injunction against a satellite carrier, i.e. the DISH Network 
(aka EchoStar), which was found liable for willfully and 
systematically violating the rights of intellectual property 
owners in 2006.
    In a remarkable, unanimous opinion by a panel of the Court 
of Appeals for the Eleventh Circuit in CBS Broadcasting, Inc. 
v. EchoStar Communications Corp., the court wrote:

        EchoStar has disregarded the limitations of its 
        statutory license and sought to avoid its obligations 
        under the [law] at every turn,'' and, ``As if the 
        magnitude of its ineligible subscriber base were 
        insufficiently disconcerting, we have found no 
        indication that EchoStar was ever interested in 
        complying with the Act. Indeed,... we seem to have 
        discerned a `pattern' and 'practice' of violating the 
        Act in every way imaginable.

    The Court of Appeals, upholding a determination by the 
district court, make clear that DISH Network's record of 
deliberately violating the rights of intellectual property 
owners and the clear requirements of copyright law was not 
inadvertent, insignificant, or a mere technical matter.\4\
---------------------------------------------------------------------------
    \4\The Eleventh Circuit found ``In an effort to dissuade the 
district court from issuing the original injunction in this case, 
EchoStar's CEO, Charles Ergen, made a formal pledge under penalty of 
perjury in September 1999. In that pledge, he promised . . . [to] 
terminate all illegal subscribers. . . . Contrary to Ergen's promise, 
the district court found no evidence that EchoStar terminated service 
to any of these subscribers for compliance-related purposes.''
---------------------------------------------------------------------------
    The importance of intellectual property to the United 
States cannot be overstated. The most urgent matters that 
confront American innovators and creators today is how they can 
effectively protect their works from unlawful exploitation and 
enforce respect for their exclusive rights in an international 
marketplace.
    While we share the goal of enabling all Americans to view 
local television programming via satellite, we question the 
proposition that the best available means to provide such an 
incentive is to relieve DISH Network of the foreseeable results 
of its persistent, determined, unlawful conduct. Rather than 
crafting a proposal designed to benefit one satellite carrier, 
a better approach would be to provide an incentive to both 
national satellite carriers to enter the remaining markets.
    Such an approach would harness the forces of free-market 
competition and possess the virtues of protecting the integrity 
of the copyright law and respecting the judiciary's 
independence in administering, without prejudice, the laws 
Congress enacts to advance copyright owners' legitimate 
interests. When Congress weakens copyright protection, it 
strikes a dissonant note. Before enactment, SHVURA should 
incorporate provisions to enhance regard for intellectual 
property and further strengthen deterrence from future 
violations. To fail to do so places Congress in the position of 
absolving a notorious infringer for past violations in return 
for vague assurances of future respect for the rights of 
others.

  C. EROSION OF ``NO DISTANT WHERE LOCAL'' AND COPYRIGHT EXCLUSIVITY 
                               PRINCIPLES

    In addition to these concerns, the bill also re-defines a 
household capable of receiving a local network signal through 
the air as ``unserved'' if the signal is delivered in some 
cases via digital multicast technology. For more than two 
decades, the license has generally limited the abrogation of 
copyright owner's rights to only those circumstances where 
consumers are unable to receive a good quality signal through 
the air. This is commonly referred to as providing a 
``lifeline'' service to consumers. When a household can receive 
a good quality network signal through the air, there is no need 
for a lifeline and no apparent justification for permitting a 
satellite carrier to prefer an imported distant signal over the 
signal offered by a community-based local broadcaster.
    In a sense, the inclusion of this provision erodes the ``no 
distant where local'' principle embodied in the 2004 Satellite 
Home Viewer Extension and Reauthorization Act (SHVERA). In 
essence, this language functions as a ``no local where 
distant'' provision because it provides authority to satellite 
providers to discriminate against the network television 
programming offered for free in a local community by over-the-
air broadcast stations.
    Indeed, the preference in section three of the bill may 
result in discouraging free over-the-air local broadcasters 
from affiliating with more than one network and developing a 
market-based solution to the ``missing network affiliate'' 
problem. This would limit the number of free network 
programming options available to consumers and, in effect, 
require consumers to subscribe to pay television to receive 
networks they might otherwise have been able to view for free.
    We recognize that the bill mitigates one harm from this 
provision by limiting it to a period of three years but that 
limit may actually lead to a scenario in which some satellite 
subscribers could lose programming they will have become 
accustomed to receiving on January 1, 2013. It would be 
preferable to eliminate the provision in its entirety rather 
than create a new and perhaps vocal class of subscribers who 
could be urged by certain satellite providers to petition 
Congress to extend this provision as it approaches expiration.
    Despite these concerns, the prospect of approximately one 
million American households being denied the ability to view 
network programming via satellite after December 31, 2009 made 
it advisable to advance the bill at full committee. It is our 
hope that the spirit of cooperation reflected at the markup 
will be extended to the continued attention, deliberation and 
improvement of the serious matters that remain to be 
appropriately addressed in SHVURA.

                                   Lamar Smith.
                                   Howard L. Berman.
                                   Howard Coble.
                                   Sheila Jackson Lee.
                                   Daniel E. Lungren.
                                   Darrell E. Issa.
                                   Adam B. Schiff.
                                   J. Randy Forbes.
                                   Louie Gohmert.
                                   Jason Chaffetz.
                                   Tom Rooney.
                                   Gregg Harper.

                                  
