[House Report 113-544]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     113-544


                                OF 2014


 July 22, 2014.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed


   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 

                              R E P O R T

                        [To accompany H.R. 5036]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 5036) to amend title 17, United States Code, to 
extend expiring provisions of the Satellite Television 
Extension and Localism Act of 2010, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.


Purpose and Summary..............................................     1
Background and Need for the Legislation..........................     2
Hearings.........................................................     2
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Cost Estimate........................     3
Duplication of Federal Programs..................................     5
Disclosure of Directed Rule Makings..............................     5
Performance Goals and Objectives.................................     5
Advisory on Earmarks.............................................     5
Section-by-Section Analysis......................................     5
Changes in Existing Law Made by the Bill, as Reported............     6

                          Purpose and Summary

    The legislation extends the expiring Section 119 satellite 
distant into local license by one additional period of 5 years 
and makes two technical corrections to existing law.

                Background and Need for the Legislation

    Title 17 contains three compulsory video licenses that are 
used by satellite and cable companies to obtain video content 
that is delivered to their customers. For satellite company 
customers who are able to receive local broadcast channels via 
an over-the-air antenna, satellite carriers that use these 
licenses are required by law to deliver only these local 
broadcast channels, instead of channels from another market. 
However, not all local television markets have local broadcast 
channels that serve them, primarily in rural areas. For these 
areas, the Section 119 license enables satellite carriers to 
obtain video content from distant network channels (typically 
New York and Los Angeles) and deliver that content to those 
customers who do not have access to local broadcast channels.
    The Section 119 license was originally created to ensure 
that satellite carriers could compete with cable systems that 
already had access to such channels. The growth of the two 
current satellite carriers indicates that this objective has 
been met. The Committee has requested and received a study from 
the Copyright Office on options to phase out one or more of the 
three compulsory licenses. The Section 302 Report, as it is 
known, was requested by Congress in Section 302 of P.L. 111-
175, the Satellite Television Extension and Localism Act of 
2010. The Copyright Office determined that the Section 119 
license would be the easiest to phase out due to the declining 
number of American households that receive video content due to 
its existence, the limited number of channels that are obtained 
by it, and the limited number of satellite companies. The 
Copyright Office report, however, noted that private sector 
negotiations in lieu of the statutory framework had not 
occurred and would be unlikely to occur without certainty as to 
when the compulsory license would terminate. This legislation 
creates this certainty by setting a termination date of 
December 31, 2019, which should be more than sufficient time 
for private sector negotiations to occur over the next 5 years.


    The Committee's Subcommittee on Courts, Intellectual 
Property, and the Internet held 2 separate days of hearings on 
the issues contained in H.R. 5036 on September 10, 2013 and May 
8, 2014.
    On September 10, 2013, testimony was received on the topic 
of ``Satellite Television Laws in Title 17'' from Mr. James 
Campbell, Vice-President for Regulatory Affairs, CenturyLink, 
Inc.; Mr. R. Stanton Dodge, Executive Vice-President, General 
Counsel and Secretary, DISH Network, LLC; Mr. Paul Donato, 
Executive Vice-President and Chief Research Officer, the 
Nielsen Company; Mr. Robert Garrett, Partner, Arnold and 
Porter, LLP on behalf of the Major League Baseball; Mr. Earle 
MacKenzie, Executive Vice-President and Chief Operating 
Officer, Shentel Cable on behalf of the American Cable 
Association; Mr. Preston Padden, former President, ABC 
Television Network and former Executive Vice-President, The 
Walt Disney Company (testifying on his own behalf); and Mr. 
Gerard J. Waldron, Partner, Covington & Burling, LLP on behalf 
of the National Association of Broadcasters.
    On May 8, 2014, testimony was received on the topic of 
``Compulsory Video Licenses of Title 17'' from Mr. William J. 
Roberts, Jr., Acting Associate Register of Copyrights and 
former Judge of the Copyright Royalty Board, U.S. Copyright 
Office; Mr. R. Stanton Dodge, Executive Vice President and 
General Counsel, DISH Network; Ms. Marci K. Burdick, Senior 
Vice President of Broadcasting, Schurz Communications, on 
behalf of the National Association of Broadcasters; and Mr. 
Matthew M. Polka, President and Chief Executive Officer, 
American Cable Association.

                        Committee Consideration

    On July 10, 2014 the Committee met in open session and 
ordered the bill H.R. 5036 favorably reported without 
amendment, by a voice vote, 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 no 
rollcall votes occurred during the Committee's consideration of 
H.R. 5036. One amendment by Mr. Collins was offered and 

                      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 

               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. 5036, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 17, 2014.
Hon. Bob Goodlatte, 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. 5036, the 
``Satellite Television Access Reauthorization Act of 2014.''
    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.
                                      Douglas W. Elmendorf,


        Honorable John Conyers, Jr.
        Ranking Member

  H.R. 5036--Satellite Television Access Reauthorization Act of 2014.

As ordered reported by the House Committee on the Judiciary on July 10, 

    Based on information from the Copyright Office, CBO 
estimates that implementing H.R. 5036 would not have a 
significant effect on the Federal budget. CBO estimates that 
enacting H.R. 5036 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    Under current law, satellite carriers pay royalty fees for 
the right to transmit certain television signals to their 
subscribers without obtaining permission from copyright 
holders. The statutory license allowing those transmissions is 
set to expire on December 31, 2014; H.R. 5036 would extend that 
license through December 31, 2019.
    Under the statutory license, satellite carriers pay royalty 
fees to the Copyright Office for transmission of certain 
copyrighted broadcasts and the Copyright Office later 
distributes those fees to the owners of copyrights on the 
transmitted material. Based on information from the Copyright 
Office, CBO expects that the additional workload to continue 
administration of the royalty payments would not be 
significant. Collections and disbursement of royalty fees are 
not recorded in the Federal budget; therefore, there would be 
no budgetary effect, with regard to those fees, to extend the 
statutory license.
    H.R. 5036 would extend existing intergovernmental and 
private-sector mandates, as defined in the Unfunded Mandates 
Reform Act (UMRA), on satellite carriers and copyright holders 
(including public entities). The bill would extend through 
December 31, 2019, the royalty rates satellite carriers are 
required to pay for transmitting some copyrighted material. If 
this requirement were to expire, royalty rates would be 
negotiated privately between copyright owners and satellite 
carriers. The cost of the mandate would equal the difference 
between the royalties that would be set in the absence of the 
bill and the royalties set under current law. Based on 
information from industry sources and the Copyright Office, CBO 
expects that those rates would not differ significantly. 
Consequently, CBO estimates that the cost of complying with the 
mandates would be small and would fall below the annual 
thresholds established in UMRA for intergovernmental and 
private-sector mandates ($76 million and $152 million in 2014, 
respectively, adjusted annually for inflation).
    On June 13, 2014, CBO transmitted a cost estimate for H.R. 
4572, the STELA Reauthorization Act of 2014, as ordered 
reported by the House Committee on Energy and Commerce on May 
9, 2014. H.R. 4572 would extend provisions of current law that 
allow satellite carriers to transmit copyrighted material but 
would not extend the license that allows such transmission 
without permission from the copyright holders. CBO estimates 
that implementing H.R. 4572 would cost about $1 million over 
the 2015-2019 period, assuming appropriation of the necessary 
amounts, for reports and regulatory actions by the Federal 
Communications Commission.
    The CBO staff contacts for this estimate are Susan Willie 
(for Federal costs), Melissa Merrell (for the state and local 
impact), Tristan Hanon, and Patrice Gordon (for the private-
sector impact). The estimate was approved by Theresa Gullo, 
Deputy Assistant Director for Budget Analysis.

                    Duplication of Federal Programs

    No provision of H.R. 5036 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 5036 does not direct any 
rule makings proceeding within the meaning of 5 U.S.C. 551.

                    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. 
5036, extends an existing compulsory license in Section 119 of 
Title 17 for an additional 5 years, and makes two technical 
corrections within existing law.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 5036 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. Section 1 sets forth the short title 
of the bill as the ``Satellite Television Access 
Reauthorization Act of 2014.''
    Sec. 2. Reauthorization. Section 2 makes two technical 
corrections to existing law in Section 111(d)(3) and changes 
the date ``2014'' to the date ``2019'' in two provisions of 
existing Section 119 to effectuate the extension.
    Sec. 3. Termination of License. Subsection 3(a) creates a 
new paragraph (h) in Section 119 to make clear that the Section 
119 license expires on December 31, 2019. Subsection 3(b) makes 
one conforming amendment in Section 107(a).

         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 italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE

           *       *       *       *       *       *       *

           *       *       *       *       *       *       *

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

    (a) * * *

           *       *       *       *       *       *       *

    (d) Statutory License for Secondary Transmissions by Cable 
            (1) * * *

           *       *       *       *       *       *       *

            (3) Distribution of royalty fees to copyright 
        owners.--The royalty fees thus deposited shall, in 
        accordance with the procedures provided by [clause] 
        paragraph (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) * * *
                    (B) Any such owner whose work was included 
                in a secondary transmission identified in a 
                special statement of account deposited under 
                [clause] paragraph (1)(A).

           *       *       *       *       *       *       *

Sec. 119. Limitations on exclusive rights: Secondary transmissions of 
                    distant television programming by satellite

    (a) * * *

           *       *       *       *       *       *       *

    (c) Adjustment of Royalty Fees.--
            (1) Applicability and determination of royalty fees 
        for signals.--
                    (A) * * *

           *       *       *       *       *       *       *

                    (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 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, [2014] 2019, or in accordance with 
                the terms of the agreement, whichever is later.

           *       *       *       *       *       *       *

    (e) Moratorium on Copyright Liability.--Until December 31, 
[2014] 2019, 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, 
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.

           *       *       *       *       *       *       *

    (h) Termination of License.--This section shall cease to be 
effective on December 31, 2019.

           *       *       *       *       *       *       *



           *       *       *       *       *       *       *

           *       *       *       *       *       *       *


    [(a) Termination.--Section 119 of title 17, United States 
Code, as amended by this Act, shall cease to be effective on 
December 31, 2014.]

           *       *       *       *       *       *       *