u n i t e d s t a t e s c o p y r i g h t o f f i c e Satellite Television Extension and Localism Act § 302 REPORT a report of the register of copyrights august 29, 2011 u n i t e d s t a t e s c o p y r i g h t o f f i c e Satellite Television Extension and Localism Act § 302 REPORT a report of the register of copyrights august 29, 2011 Library of Congress Cataloging-in-Publication Data Library of Congress. Copyright Office Satellite Television Extension and Localism Act Section 302 Report: a report of the Register of Copyrights, August 2011/U.S. Copyright Office. p. cm. 1. Copyright licenses–United States. 2. Copyright–Broadcasting rights–United States. 3. Direct broadcast satellite television–Law and legislation–United States. 4. Cable Television–Law and legislation–United States. 5. Copyright-Royalties-United States I. Title. Library of Congress temporary Control Number: 2011936460 . STÄT ê e cl The Register of Copyrights of the United States of America ! F I United States Copyright Ofñce . ror Independence Avenue SE . Washington, DC 2o559-6ooo . (zoz) 7o7-835o 7 August 29,2011 Dear Mr. President: On behalf of the United States Copyright Office, I am pleased to deliver this Report to Congress, as required under Section 302 of the "Satellite Television Extension and Localism Act of 2010." See Public Law No. III-175, 124 Stat. 1218 (2010). As directed by Congress, the Report considers the repeal of statutory licensing provisions in Sections 111, 119, and 122 of the Copyright Act (Title 17, U.S. Code), which currently govern the retransmission ofdistant and local television broadcast signals by cable operators and satellite carriers. The Report provides recommendations for commencing and carrying out such repeal responsibly and on a reasonable schedule, addressing the following specific points: (1) Possible methods for implementing a phase-out (including allowing stakeholders the opportunity to develop market licenses); and (2) Possible mechanisms for ensuring a timely and effective phase-out (including adopting a date-certain and a tiered schedule); and (3) Possible legislative or administrative actions that may be appropriate in achieving a phase-out (including addressing communications issues that are outside the scope of copyright law). In reaching the recommendations contained in the Report, the Copyright Office engaged with many stakeholders, including copyright owners, members of the broadcast, cable and satellite industries, as well as the Federal Communications Commission, through numerous focused meetings, a public comment period and public hearing. The views of these parties are summarized for your benefit and information. Section 302 requires that I submit this Report no later than 18 months after the date of enactment of the Satellite Television Extension and Localism Act of 2010. Delivery to you today fulfills my obligations under the law. Respectfully âll¡^ -Å t1"-^ MariaA. Pallante Register of Copyrights Enclosure The Honorable Joseph Biden President United States Senate Washington, DC 20510 Àl The Register of Copyrights of the United States of America e United States Copyright Ofûce ' ror Independence Avenue SE . Washington,DC zo559-6ooo . (zoz) 7o7-835o ¡870 August 29,2011 Dear Mr. Speaker: On behalf of the United States Copyright Office, I am pleased to deliver this Report to Congress, as required under Section 302 of the "Satellite Television Extension and Localism Act of 2010." See Public Law No. lll-175,124 Stat.1218 (2010). As directed by Congress, the Report considers the repeal of statutory licensing provisions in Sections 111, 119, and 122 of the Copyright Act (Title 17, U.S. Code), which currently govern the retransmission ofdistant and local television broadcast signals by cable operators and satellite carriers. The Report provides recommendations for commencing and carrying out such repeal responsibly and on a reasonable schedule, addressing the following specific points: (1) Possible methods for implementing a phase-out (including allowing stakeholders the opporlunity to develop market licenses); and (2) Possible mechanisms for ensuring a timely and effective phase-out (including adopting a date-certain and a tiered schedule); and (3) Possible legislative or administrative actions thatmay be appropriate in achieving a phase-out (including addressing communications issues that are outside the scope of copyright law). In reaching the recommendations contained in the Report, the Copyright Office engaged with many stakeholders, including copyright owners, members of the broadcast, cable and satellite industries, as well as the Federal Communications Commission, through numerous focused meetings, a public comment period and public hearing. The views of these parties are summarized for your benefit and information. Section 302 requires that I submit this Report no later than 18 months after the date of enactment of the Satellite Television Extension and Localism Act of 2010. Delivery to you today fulfîlls my obligations under the law. Respectfully A/t/- -ÅÐ'L-^ Maria A. Pallante Register of Copyrights Enclosure The Honorable John Boehner Speaker of the House of Representatives Washington, DC 20515 ACKNOWLEDGMENTS This Report was prepared under the auspices of the Office of General Counsel, U.S. Copyright Office, with support from the Office of Policy and International Affairs. It is the result of the sustained commitment and professional expertise of several people in these departments, especially Tanya Sandros, Deputy General Counsel, Ben Golant, Assistant General Counsel, and Erik Bertin, Counsel for Policy and International Affairs. Ben was the principal author of the Report and, thanks to his years of experience at the Federal Communications Commission (FCC), was able to provide practical insights into the interplay between copyright and communications law. Tanya was the program manager and assisted me in framing the policy issues and developing the recommendations. Erik greatly assisted the overall effort, from research and writing to coordination with stakeholders. David Carson, Copyright Office General Counsel, provided oversight in reviewing drafts of the Report and discussing policy implications. Michele Woods, Acting Associate Register for Policy and International Affairs, also contributed substantive and editorial expertise. Christopher Reed, Senior Advisor to the Register, provided both policy and production direction. Many thanks to legal interns Jenni Wiser and Emily Zandy for their research efforts. I am also grateful to colleagues at the FCC who provided invaluable support and advice on a myriad of issues contained in the Report, especially Eloise Gore, Marcia Glauberman, Dana Scherer, and Jonathan Levy. Copyright Royalty Judge Stanley Wisniewski also contributed valuable insight and information. Finally, I would like to recognize David Christopher and his staff in the Information and Records Division of the Copyright Office, including Helen Hester-Ossa, Teresa McCall and Cecelia Rogers, for their assistance in producing the Report, Terrawn Rogers and Denise Prince for their assistance in formatting it, and Guy Echols for his technical review. And special appreciation goes to the staff of the print shop at the Library of Congress for their professionalism, courtesy and patience. Maria A. Pallante Register of Copyrights TABLE OF CONTENTS ABBREVIATIONS ....................................................................................................................................i EXECUTIVE SUMMARY .......................................................................................................................ii CHAPTER I: OVERVIEW ......................................................................................................................1 A. Legal Provisions .............................................................................................................................1 B. The Register’s Assignment Under Section 302 Of STELA............................................................3 C. Copyright Office Process ................................................................................................................6 D. Section 302 Considerations.............................................................................................................8 1. Marketplace Options that Could Replace the Statutory Licenses............................................8 2. Practical Issues and Special Policy Concerns........................................................................10 3. Other Considerations in a Phase-Out of the Statutory Licenses ............................................12 4. Recommendations for Achieving a Timely and Effective Phase-Out ...................................14 5. Delaying Repeal of Local Signal Licenses ............................................................................16 CHAPTER II: BROADCAST TELEVISION PROGRAMMING OVERVIEW...................................18 A. The Broadcast Television Structure ............................................................................................18 1. The Commercial Television Market ......................................................................................21 a. Types of commercial broadcast television stations ..........................................................21 b. Types of commercial broadcast television programming.................................................23 2. The Noncommercial Television Market ................................................................................30