Copyright Office advocates eliminating compulsory license
An arcane but critical copyright law is under attack by a key government agency.
The U.S. Copyright Office, which advises Congress on copyright issues, is proposing that lawmakers phase out the cable and satellite statutory licenses in the Copyright Act, calling it "an artifact of an earlier era."
The so-called compulsory license, established in 1976, allows cable and satellite operators to distribute broadcast television signals in return for paying a one-size-fits-all copyright fee to the Copyright Royalty Tribunal (CRT). The CRT then distributes the fees to copyright holders such as Hollywood studios and sports leagues and local television stations. Each year, the CRT collects tens of millions of dollars in fees that it distributes to rights holders.
Instead, the Copyright Office wants Congress to change the law and require distributors to negotiate with content rights holders on an individual basis.
While programmers and sports leagues may cheer such a move, it will be met with tremendous resistance from both the cable and satellite industries. This is not the first time that the Copyright Office has pitched gutting the compulsory license, but Washington insiders think it is highly unlikely Congress would act on the recommendation.
Some broadcasters are also against a change to rules because they already pay for the rights to sub-license content they get from Hollywood and sports leagues and they won't want to give that up. Cable will resist because it is easier and potentially cheaper for them to pay one fee to the CRT than to negotiate with each rights holder.
First to go, if the Copyright Office gets its wish, would be the distant signal portion of the act.
For example, if a Los Angeles TV station is carried by a multichannel video programming distributor (MVPD) outside the Southern California area, that MVPD pays a fee to the CRT. If the distant signal portion of the act was gone, the MVPD would go to the individual suppliers of the programing to negotiate an agreement, a much more costly and tedious process.
One company watching this closely will be Tribune, the parent of the Los Angeles Times and owner of WGN, a local TV station that is carried nationally by MVPDs and hence would be most affected by any change to the distant signal part of the act.
The Copyright Office suggested that after the Distant Signal rules were gutted, Congress could then consider how to gradually eliminate the local rules.
-- Joe Flint