Few Changes in Views on Compulsory License Regime
Pay-TV distributors still like the statutory licenses that let cable systems carry broadcast TV programming without licensing the rights for that programming from every content owner carried on a broadcast, and copyright holders still want to do away with the rules, comments to the Copyright Office Monday indicate. The office sought industry input for a report to Congress required by last year’s satellite reauthorization act on possible alternatives to the statutory license system. Commenters largely ignored questions the office asked about online video. Broadcasters suggested keeping the statutory license for local carriage of TV stations, but eliminating it for the importation of distant signals. Pay-TV distributors argued against eliminating the licenses without altering retransmission-consent and must-carry rules.
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NAB was one of a handful of the 17 commenters to address online video. It argued that online video distributors aren’t entitled to the compulsory license. “The history and operation of Section 111” of the Copyright Act, which sets up the license, “are inextricably tied to the operation of the FCC’s cable carriage and program exclusivity regime,” NAB said. “Accordingly, only entities that adhere to the FCC’s cable carriage, program exclusivity and other regulatory requirements may avail themselves of the benefits” of the license, it said. “An MVPD cannot claim the benefit of the statutory license under the guise that it is operating as a ‘cable system,’ yet fail to comply with the communications statutory and regulatory legal requirements."
Without the statutory licenses under review by the Copyright Office, “there will never be 24/7 broadcast programming available online,” said Todd Weaver, CEO of ivi TV. The online video company has been sued by broadcasters for streaming TV station signals online. Weaver and ivi urged the office to retain the licenses, to allow new pay-TV entrants access to programming. “Without the Section 111 compulsory license (and the Section 119 license), there would be no market reward for technological advances like satellite television, microwave television,” or Verizon’s FiOS and AT&T’s U-verse services, Weaver said.
The licenses should be left alone until Congress acts to revamp all broadcast/pay-TV carriage rules, Verizon said. “Eliminating the statutory licenses now without a corresponding shift to a market-based approach more generally in the relationship between broadcasters and subscription video distributors would do more harm than good.” Because distributors are required to carry some stations under must-carry rules, “the statutory license provides a mechanism to avoid unpredictable and largely uncontrollable copyright liability that could otherwise result” from that forced carriage of stations, the telco said. “Simply eliminating the statutory licenses without corresponding regulatory changes might increase the amounts that copyright holders receive for use of their works, but at the expense of consumers."
Rural pay-TV distributors and the NCTA struck a similar tone. “Any consideration of changes to the compulsory license should also involve an examination of retransmission consent,” said the Rural MVPD Group. Members include the American Cable Association, NTCA, OPASTCO and Western Telecommunications Alliance. “The retransmission consent and compulsory license regimes are now intricately intertwined,” they said. NCTA concurred, saying: “So long as broadcasters continue to enjoy statutorily conferred carriage rights and the benefit of other carriage restrictions imposed on cable operators, a copyright negotiation between a station and a cable operator will not be a true negotiation."
Copyright holders such as MPAA and Major League Baseball and performing rights organizations such as BMI and ASCAP favor phasing out the licenses. The pay-TV industry has matured and no longer needs the help of a compulsory license, BMI and ASCAP said jointly. “The ‘orderly development’ of the cable industry that Congress felt was necessary has long been accomplished.” They said collective licensing is a viable alternative to the existing statutory license system.
"Mandating a particular form of licensing is tantamount to replacing one form of regulation with another,” MPAA and other program suppliers said in comments. “The Office should refrain from proposing a particular form of private licensing to Congress as a catch-all replacement” for the current system, they said. Any new system should be phased in over reasonable period of time to allow “stakeholders to put in place the necessary framework to replace the compulsory system,” they said.