§ 111. — Limitations on exclusive rights: Secondary transmissions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 17USC111]
TITLE 17--COPYRIGHTS
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT
Sec. 111. Limitations on exclusive rights: Secondary
transmissions
(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) the secondary transmission is not made by a cable system,
and consists entirely of the relaying, by the management of a hotel,
apartment house, or similar establishment, of signals transmitted by
a broadcast station licensed by the Federal Communications
Commission, within the local service area of such station, to the
private lodgings of guests or residents of such establishment, and
no direct charge is made to see or hear the secondary transmission;
or
(2) the secondary transmission is made solely for the purpose
and under the conditions specified by clause (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 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
for private home viewing pursuant to a statutory license under
section 119; or
(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.
(b) Secondary Transmission of Primary Transmission to Controlled
Group.--Notwithstanding the provisions of subsections (a) and (c), the
secondary transmission to the public of a performance or display of a
work embodied in a primary transmission 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, if the primary
transmission is not made for reception by the public at large but is
controlled and limited to reception by particular members of the public:
Provided, however, That such secondary transmission is not actionable as
an act of infringement if--
(1) the primary transmission is made by a broadcast station
licensed by the Federal Communications Commission; and
(2) the carriage of the signals comprising the secondary
transmission is required under the rules, regulations, or
authorizations of the Federal Communications Commission; and
(3) the signal of the primary transmitter is not altered or
changed in any way by the secondary transmitter.
(c) Secondary Transmissions by Cable Systems.--
(1) Subject to the provisions of clauses (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 (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 and 509, in the
following cases:
(A) where the carriage of the signals comprising the
secondary transmission is not permissible under the rules,
regulations, or authorizations of the Federal Communications
Commission; or
(B) where the cable system has not deposited the statement
of account and royalty fee required by subsection (d).
(3) Notwithstanding the provisions of clause (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 sections 509 and 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 (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 and section 509, 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 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--
(A) 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 for private home viewing pursuant to
section 119. Such statement shall also include a special
statement of account covering any nonnetwork 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 nonnetwork 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.
(2) The Register of Copyrights shall receive 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 in the event no controversy over distribution
exists, or by a copyright arbitration royalty panel in the event a
controversy over such distribution exists.
(3) 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 owner whose work was included in a secondary
transmission made by a cable system of a nonnetwork television
program in whole or in part beyond the local service area of the
primary transmitter; and
(B) 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 owner whose work was included in nonnetwork
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 thus deposited shall be distributed in
accordance with the following procedures:
(A) During the month of July in each year, every person
claiming to be entitled to statutory license fees for secondary
transmissions shall file a claim with the Librarian of Congress,
in accordance with requirements that the Librarian of Congress
shall prescribe by regulation. Notwithstanding any provisions of
the antitrust laws, for purposes of this clause any claimants
may agree among themselves as to the proportionate division of
statutory licensing fees among them, may lump their claims
together and file them jointly or as a single claim, or may
designate a common agent to receive payment on their behalf.
(B) After the first day of August of each year, the
Librarian of Congress shall, upon the recommendation of the
Register of Copyrights, determine whether there exists a
controversy concerning the distribution of royalty fees. If the
Librarian determines that no such controversy exists, the
Librarian shall, after deducting reasonable administrative costs
under this section, distribute such fees to the copyright owners
entitled to such fees, or to their designated agents. If the
Librarian finds the existence of a controversy, the Librarian
shall, pursuant to chapter 8 of this title, convene a copyright
arbitration royalty panel to determine the distribution of
royalty fees.
(C) During the pendency of any proceeding under this
subsection, the Librarian of Congress shall withhold from
distribution an amount sufficient to satisfy all claims with
respect to which a controversy exists, but shall have discretion
to proceed to distribute any amounts that are not in
controversy.
(e) Nonsimultaneous Secondary Transmissions by Cable Systems.--
(1) Notwithstanding those provisions of the second paragraph of
subsection (f) 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 sections 509 and
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 (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
(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 (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 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 and
509, 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 (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, or the Trust Territory of the Pacific
Islands, to another cable system in any of those three territories,
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 (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 (1)(D) to each cable system
making a previous nonsimultaneous transmission of the same
videotape.
(3) This subsection shall not be construed to supersede the
exclusivity protection provisions of any existing agreement, or any
such agreement hereafter entered into, between a cable system and a
television broadcast station in the area in which the cable system
is located, or a network with which such station is affiliated.
(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 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'' is the further transmitting of a
primary transmission simultaneously with the primary transmission,
or nonsimultaneously with the primary transmission if by a ``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'' is a facility, located in any State,
Territory, Trust Territory, or Possession, 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'', 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, 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.
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.
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.
(Pub. L. 94-553, title I, Sec. 101, Oct. 19, 1976, 90 Stat. 2550; Pub.
L. 99-397, Secs. 1, 2(a), (b), Aug. 27, 1986, 100 Stat. 848; Pub. L.
100-667, title II, Sec. 202(1), Nov. 16, 1988, 102 Stat. 3949; Pub. L.
101-318, Sec. 3(a), July 3, 1990, 104 Stat. 288; Pub. L. 103-198,
Sec. 6(a), Dec. 17, 1993, 107 Stat. 2311; Pub. L. 103-369, Sec. 3, Oct.
18, 1994, 108 Stat. 3480; Pub. L. 104-39, Sec. 5(b), Nov. 1, 1995, 109
Stat. 348; Pub. L. 106-113, div. B, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(1), (2), (b)(1)], Nov. 29, 1999, 113 Stat. 1536, 1501A-
543.)
Historical and Revision Notes
house report no. 94-1476
Introduction and General Summary. The complex and economically
important problem of ``secondary transmissions'' is considered in
section 111. For the most part, the section is directed at the operation
of cable television systems and the terms and conditions of their
liability for the retransmission of copyrighted works. However, other
forms of secondary transmissions are also considered, including
apartment house and hotel systems, wired instructional systems, common
carriers, nonprofit ``boosters'' and translators, and secondary
transmissions of primary transmissions to controlled groups.
Cable television systems are commercial subscription services that
pick up broadcasts of programs originated by others and retransmit them
to paying subscribers. A typical system consists of a central antenna
which receives and amplifies television signals and a network of cables
through which the signals are transmitted to the receiving sets of
individual subscribers. In addition to an installation charge, the
subscribers pay a monthly charge for the basic service averaging about
six dollars. A large number of these systems provide automated
programing. A growing number of CATV systems also originate programs,
such as movies and sports, and charge additional fees for this service
(pay-cable).
The number of cable systems has grown very rapidly since their
introduction in 1950, and now total about 3,450 operating systems,
servicing 7,700 communities. Systems currently in operation reach about
10.8 million homes. It is reported that the 1975 total subscriber
revenues of the cable industry were approximately $770 million.
Pursuant to two decisions of the Supreme Court (Fortnightly Corp. v.
United Artist Television, Inc., 392 U.S. 390 (1968) [88 S.Ct. 2084, 20
L.Ed.2d 1176, rehearing denied 89 S.Ct. 65, 393 U.S. 902, 21 L.Ed.2d
190], and Teleprompter Corp. v. CBS, Inc., 415 U.S. 394 (1974)) [94
S.Ct. 1129, 39 L.Ed.2d 415], under the 1909 copyright law, the cable
television industry has not been paying copyright royalties for its
retransmission of over-the-air broadcast signals. Both decisions urged
the Congress, however, to consider and determine the scope and extent of
such liability in the pending revision bill.
The difficult problem of determining the copyright liability of
cable television systems has been before the Congress since 1965. In
1967, this Committee sought to address and resolve the issues in H.R.
2512, an early version of the general revision bill (see H.R. Rep. No.
83, 90th Cong., 1st Sess.). However, largely because of the cable-
copyright impasse, the bill died in the Senate.
The history of the attempts to find a solution to the problem since
1967 has been explored thoroughly in the voluminous hearings and
testimony on the general revision bill, and has also been succinctly
summarized by the Register of Copyrights in her Second Supplementary
Report, Chapter V.
The Committee now has before it the Senate bill which contains a
series of detailed and complex provisions which attempt to resolve the
question of the copyright liability of cable television systems. After
extensive consideration of the Senate bill, the arguments made during
and after the hearings, and of the issues involved, this Committee has
also concluded that there is no simple answer to the cable-copyright
controversy. In particular, any statutory scheme that imposes copyright
liability on cable television systems must take account of the intricate
and complicated rules and regulations adopted by the Federal
Communications Commission to govern the cable television industry. While
the Committee has carefully avoided including in the bill any provisions
which would interfere with the FCC's rules or which might be
characterized as affecting ``communications policy'', the Committee has
been cognizant of the interplay between the copyright and the
communications elements of the legislation.
We would, therefore, caution the Federal Communications Commission,
and others who make determinations concerning communications policy, not
to rely upon any action of this Committee as a basis for any significant
changes in the delicate balance of regulation in areas where the
Congress has not resolved the issue. Specifically, we would urge the
Federal Communications Commission to understand that it was not the
intent of this bill to touch on issues such as pay cable regulation or
increased use of imported distant signals. These matters are ones of
communications policy and should be left to the appropriate committees
in the Congress for resolution.
In general, the Committee believes that cable systems are commercial
enterprises whose basic retransmission operations are based on the
carriage of copyrighted program material and that copyright royalties
should be paid by cable operators to the creators of such programs. The
Committee recognizes, however, that it would be impractical and unduly
burdensome to require every cable system to negotiate with every
copyright owner whose work was retransmitted by a cable system.
Accordingly, the Committee has determined to maintain the basic
principle of the Senate bill to establish a compulsory copyright license
for the retransmission of those over-the-air broadcast signals that a
cable system is authorized to carry pursuant to the rules and
regulations of the FCC.
The compulsory license is conditioned, however, on certain
requirements and limitations. These include compliance with reporting
requirements, payment of the royalty fees established in the bill, a ban
on the substitution or deletion of commercial advertising, and
geographic limits on the compulsory license for copyrighted programs
broadcast by Canadian or Mexican stations. Failure to comply with these
requirements and limitations subjects a cable system to a suit for
copyright infringement and the remedies provided under the bill for such
actions.
In setting a royalty fee schedule for the compulsory license, the
Committee determined that the initial schedule should be established in
the bill. It recognized, however, that adjustments to the schedule would
be required from time to time. Accordingly, the Copyright Royalty
Commission, established in chapter 8 [Sec. 801 et seq. of this title],
is empowered to make the adjustments in the initial rates, at specified
times, based on standards and conditions set forth in the bill.
In setting an initial fee schedule, the Senate bill based the
royalty fee on a sliding scale related to the gross receipts of a cable
system for providing the basic retransmission service and rejected a
statutory scheme that would distinguish between ``local'' and
``distant'' signals. The Committee determined, however, that there was
no evidence that the retransmission of ``local'' broadcast signals by a
cable operator threatens the existing market for copyright program
owners. Similarly, the retransmission of network programing, including
network programing which is broadcast in ``distant'' markets, does not
injure the copyright owner. The copyright owner contracts with the
network on the basis of his programing reaching all markets served by
the network and is compensated accordingly.
By contrast, their retransmission of distant non-network programing
by cable systems causes damage to the copyright owner by distributing
the program in an area beyond which it has been licensed. Such
retransmission adversely affects the ability of the copyright owner to
exploit the work in the distant market. It is also of direct benefit to
the cable system by enhancing its ability to attract subscribers and
increase revenues. For these reasons, the Committee has concluded that
the copyright liability of cable television systems under the compulsory
license should be limited to the retransmission of distant non-network
programing.
In implementing this conclusion, the Committee generally followed a
proposal submitted by the cable and motion picture industries, the two
industries most directly affected by the establishment of copyright
royalties for cable television systems. Under the proposal, the royalty
fee is determined by a two step computation. First, a value called a
``distant signal equivalent'' is assigned to all ``distant'' signals.
Distant signals are defined as signals retransmitted by a cable system,
in whole or in part, outside the local service area of the primary
transmitter. Different values are assigned to independent, network, and
educational stations because of the different amounts of viewing of non-
network programing carried by such stations. For example, the viewing of
non-network programs on network stations is considered to approximate 25
percent. These values are then combined and a scale of percentages is
applied to the cumulative total.
The Committee also considered various proposals to exempt certain
categories of cable systems from royalty payments altogether. The
Committee determined that the approach of the Senate bill to require
some payment by every cable system is sound, but established separate
fee schedules for cable systems whose gross receipts for the basic
retransmission service do not exceed either $80,000 or $160,000
semiannually. It is the Committee's view that the fee schedules adopted
for these systems are now appropriate, based on their relative size and
the services performed.
All the royalty payments required under the bill are paid on a
semiannual basis to the Register of Copyrights. Each year they are
distributed by the Copyright Royalty Commission to those copyright
owners who may validly claim that their works were the subject of
distant non-network retransmissions by cable systems.
Based on current estimates supplied to the Committee, the total
royalty fees paid under the initial schedule established in the bill
should approximate $8.7 million. Compared with the present number of
cable television subscribers, calculated at 10.8 million, copyright
payments under the bill would therefore approximate 81 cents per
subscriber per year. The Committee believes that such payments are
modest and will not retard the orderly development of the cable
television industry or the service it provides to its subscribers.
Analysis of Provisions. Throughout section 111, the operative terms
are ``primary transmission'' and ``secondary transmission.'' These terms
are defined in subsection (f) entirely in relation to each other. In any
particular case, the ``primary'' transmitter is the one whose signals
are being picked up and further transmitted by a ``secondary''
transmitter which in turn, is someone engaged in ``the further
transmitting of a primary transmission simultaneously with the primary
transmission.'' With one exception provided in subsection (f) and
limited by subsection (e), the section does not cover or permit a cable
system, or indeed any person, to tape or otherwise record a program off-
the-air and later to transmit the program from the tape or record to the
public. The one exception involves cable systems located outside the
continental United States, but not including cable systems in Puerto
Rico, or, with limited exceptions, Hawaii. These systems are permitted
to record and retransmit programs under the compulsory license, subject
to the restrictive conditions of subsection (e), because off-the-air
signals are generally not available in the offshore areas.
General Exemptions. Certain secondary transmissions are given a
general exemption under clause (1) of section 111(a). The first of these
applies to secondary transmissions consisting ``entirely of the
relaying, by the management of a hotel, apartment house, or similar
establishment'' of a transmission to the private lodgings of guests or
residents and provided ``no direct charge is made to see or hear the
secondary transmission.''
The exemption would not apply if the secondary transmission consists
of anything other than the mere relay of ordinary broadcasts. The
cutting out of advertising, the running in of new commercials, or any
other change in the signal relayed would subject the secondary
transmitter to full liability. Moreover, the term ``private lodgings''
is limited to rooms used as living quarters or for private parties, and
does not include dining rooms, meeting halls, theatres, ballrooms, or
similar places that are outside of a normal circle of a family and its
social acquaintances. No special exception is needed to make clear that
the mere placing of an ordinary radio or television set in a private
hotel room does not constitute an infringement.
Secondary Transmissions of Instructional Broadcasts. Clause (2) of
section 111(a) is intended to make clear that an instructional
transmission within the scope of section 110(2) is exempt whether it is
a ``primary transmission'' or a ``secondary transmission.''
Carriers. The general exemption under section 111 extends to
secondary transmitters that act solely as passive carriers. Under clause
(3), a carrier is exempt if it ``has no direct or indirect control over
the content or selection of the primary transmission or over the
particular recipients of the secondary transmission.'' For this purpose
its activities must ``consist solely of providing wires, cables, or
other communications channels for the use of others.''
Clause (4) would exempt the activities of secondary transmitters
that operate on a completely nonprofit basis. The operations of
nonprofit ``translators'' or ``boosters,'' which do nothing more than
amplify broadcast signals and retransmit them to everyone in an area for
free reception, would be exempt if there is no ``purpose of direct or
indirect commercial advantage,'' and if there is no charge to the
recipients ``other than assessments necessary to defray the actual and
reasonable costs of maintaining and operating the secondary transmission
service.'' This exemption does not apply to a cable television system.
Secondary Transmissions of Primary Transmissions to Controlled
Group. Notwithstanding the provisions of subsections (a) and (c), the
secondary transmission to the public of a primary transmission embodying
a performance or display is actionable as an act of infringement if the
primary transmission is not made for reception by the public at large
but is controlled and limited to reception by particular members of the
public. Examples of transmissions not intended for the general public
are background music services such as MUZAK, closed circuit broadcasts
to theatres, pay television (STV) or pay-cable.
The Senate bill contains a provision, however, stating that the
secondary transmission does not constitute an act of infringement if the
carriage of the signals comprising the secondary transmission is
required under the rules and regulations of the FCC. The exclusive
purpose of this provision is to exempt a cable system from copyright
liability if the FCC should require cable systems to carry to their
subscribers a ``scrambled'' pay signal of a subscription television
station.
The Committee is concerned, however, that the Senate bill is not
clearly limited to the situation where a cable system is required by the
FCC to carry a ``scrambled'' pay television signal. The Committee
believes that the provision should not include any authority or
permission to ``unscramble'' the signal. Further, the Senate bill does
not make clear that the exception would not apply if the primary
transmission is made by a cable system or cable system network
transmitting its own originated program, e.g., pay-cable. For these
reasons, the subsection was amended to provide that the exception would
only apply if (1) the primary transmission to a controlled group is made
by a broadcast station licensed by the FCC; (2) the carriage of the
signal is required by FCC rules and regulations; and (3) the signal of
the primary transmitter is not altered or changed in any way by the
secondary transmitter.
Compulsory License. Section 111(c) establishes the compulsory
license for cable systems generally. It provides that, subject to the
provisions of clauses (2), (3) and (4), the secondary transmission to
the public by a cable system of a primary transmission made by a
broadcast station licensed by the FCC or by an appropriate governmental
authority of Canada or Mexico is subject to compulsory licensing upon
compliance with the provisions of subsection (d) where the carriage of
the signals comprising the secondary transmission is permissible under
the rules and regulations of the FCC. The compulsory license applies,
therefore, to the carriage of over-the-air broadcast signals and is
inapplicable to the secondary transmission of any nonbroadcast primary
transmission such as a program originated by a cable system or a cable
network. The latter would be subject to full copyright liability under
other sections of the legislation.
Limitations on the Compulsory License. Sections 111(c)(2), (3) and
(4) establish limitations on the scope of the compulsory license, and
provide that failure to comply with these limitations subjects a cable
system to a suit for infringement and all the remedies provided in the
legislation for such actions.
Section 111(c)(2) provides that the ``willful or repeated'' carriage
of signals not permissible under the rules and regulations of the FCC
subjects a cable system to full copyright liability. The words ``willful
or repeated'' are used to prevent a cable system from being subjected to
severe penalties for innocent or casual acts (``Repeated'' does not mean
merely ``more than once,'' of course; rather, it denotes a degree of
aggravated negligence which borders on willfulness. Such a condition
would not exist in the case of an innocent mistake as to what signals or
programs may properly be carried under the FCC's complicated rules).
Section 111(c)(2) also provides that a cable system is subject to full
copyright liability where the cable system has not recorded the notice,
deposited the statement of account, or paid the royalty fee required by
subsection (d). The Committee does not intend, however, that a good
faith error by the cable system in computing the amount due would
subject it to full liability as an infringer. The Committee expects that
in most instances of this type the parties would be able to work out the
problem without resort to the courts.
Commercial Substitution. Section 111(c)(3) provides that a cable
system is fully subject to the remedies provided in this legislation for
copyright infringement if the cable system willfully alters, through
changes, deletions, or additions, the content of a particular program or
any commercial advertising or station announcements transmitted by the
primary transmitter during, or immediately before or after, the
transmission of the program. In the Committee's view, any willful
deletion, substitution, or insertion of commercial advertisements of any
nature by a cable system or changes in the program content of the
primary transmission, significantly alters the basic nature of the cable
retransmission service, and makes its function similar to that of a
broadcaster. Further, the placement of substitute advertising in a
program by a cable system on a ``local'' signal harms the advertiser
and, in turn, the copyright owner, whose compensation for the work is
directly related to the size of the audience that the advertiser's
message is calculated to reach. On a ``distant'' signal, the placement
of substitute advertising harms the local broadcaster in the distant
market because the cable system is then competing for local advertising
dollars without having comparable program costs. The Committee has
therefore attempted broadly to proscribe the availability of the
compulsory license if a cable system substitutes commercial messages.
Included in the prohibition are commercial messages and station
announcements not only during, but also immediately before or after the
program, so as to insure a continuous ban on commercial substitution
from one program to another. In one situation, however, the Committee
has permitted such substitution when the commercials are inserted by
those engaged in television commercial advertising market research. This
exception is limited to those situations where the research company has
obtained the consent of the advertiser who purchased the original
commercial advertisement, the television station whose signal is
retransmitted, and the cable system, and provided further that no income
is derived from the sale of such commercial time.
Canadian and Mexican Signals. Section 111(c)(4) provides limitations
on the compulsory license with respect to foreign signals carried by
cable systems from Canada or Mexico. Under the Senate bill, the carriage
of any foreign signals by a cable system would have been subject to full
copyright liability, because the compulsory license was limited to the
retransmission of broadcast stations licensed by the FCC. The Committee
recognized, however, that cable systems primarily along the northern and
southern border have received authorization from the FCC to carry
broadcast signals of certain Canadian and Mexican stations.
In the Committee's view, the authorization by the FCC to a cable
system to carry a foreign signal does not resolve the copyright question
of the royalty payment that should be made for copyrighted programs
originating in the foreign country. The latter raises important
international questions of the protection to be accorded foreign
copyrighted works in the United States. While the Committee has
established a general compulsory licensing scheme for the retransmission
of copyrighted works of U.S. nationals, a broad compulsory license
scheme for all foreign works does not appear warranted or justified.
Thus, for example, if in the future the signal of a British, French, or
Japanese station were retransmitted in the United States by a cable
system, full copyright liability would apply.
With respect to Canadian and Mexican signals, the Committee found
that a special situation exists regarding the carriage of these signals
by U.S. cable systems on the northern and southern borders,
respectively. The Committee determined, therefore, that with respect to
Canadian signals the compulsory license would apply in an area located
150 miles from the U.S.-Canadian border, or south from the border to the
42nd parallel of latitude, whichever distance is greater. Thus the
cities of Detroit, Pittsburgh, Cleveland, Green Bay and Seattle would be
included within the compulsory license area, while cities such as New
York, Philadelphia, Chicago, and San Francisco would be located outside
the area.
With respect to Mexican signals, the Commission determined that the
compulsory license would apply only in the area in which such signals
may be received by a U.S. cable system by means of direct interception
of a free space radio wave. Thus, full copyright liability would apply
if a cable system were required to use any equipment or device other
than a receiving antenna to bring the signal to the community of the
cable system.
Further, to take account of those cable systems that are presently
carrying or are specifically authorized to carry Canadian or Mexican
signals, pursuant to FCC rules and regulations, and whether or not
within the zones established, the Committee determined to grant a
compulsory license for the carriage of those specific signals on those
cable systems as in effect on April 15, 1976.
The Committee wishes to stress that cable systems operating within
these zones are fully subject to the payment of royalty fees under the
compulsory license for those foreign signals retransmitted. The
copyright owners of the works transmitted may appear before the
Copyright Royalty Commission and, pursuant to the provisions of this
legislation, file claims to their fair share of the royalties collected.
Outside the zones, however, full copyright liability would apply as
would all the remedies of the legislation for any act of infringement.
Requirements for a Compulsory License. The compulsory license
provided for in section 111(c) is contingent upon fulfillment of the
requirements set forth in section 111(d). Subsection (d)(1) directs that
at least one month before the commencement of operations, or within 180
days after the enactment of this act [Oct. 19, 1976], whichever is
later, a cable system must record in the Copyright Office a notice,
including a statement giving the identity and address of the person who
owns or operates the secondary transmission service or who has power to
exercise primary control over it, together with the name and location of
the primary transmitter whose signals are regularly carried by the cable
system. Signals ``regularly carried'' by the system mean those signals
which the Federal Communications Commission has specifically authorized
the cable system to carry, and which are actually carried by the system
on a regular basis. It is also required that whenever the ownership or
control or regular signal carriage complement of the system changes, the
cable system must within 30 days record any such changes in the
Copyright Office. Cable systems must also record such further
information as the Register of Copyrights shall prescribe by regulation.
Subsection (d)(2) directs cable systems whose secondary
transmissions have been subject to compulsory licensing under subsection
(c) to deposit with the Register of Copyrights a semi-annual statement
of account. The dates for filing such statements of account and the six-
month period which they are to cover are to be determined by the
Register of Copyrights after consultation with the Copyright Royalty
Commission. In addition to other such information that the Register may
prescribe by regulation, the statements of account are to specify 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 carried by the system, the total
number of subscribers to the system, and the gross amounts paid to the
system for the basic service of providing secondary transmissions. If
any non-network television programming was retransmitted by the cable
system beyond the local service area of the primary transmitter,
pursuant to the rules of the Federal Communications Commission, which
under certain circumstances permit the substitution or addition of
television signals not regularly carried, the cable system must deposit
a special statement of account listing the times, dates, stations and
programs involved in such substituted or added carriage.
Copyright Royalty Payments. Subsection (d)(2)(B), (C) and (D)
require cable systems to deposit royalty fee payments for the period
covered by the statements of account. These payments are to be computed
on the basis of specified percentages of the gross receipts from cable
subscribers during the period covered by the statement. For purposes of
computing royalty payments, only receipts for the basic service of
providing secondary transmissions of primary broadcast transmitters are
to be considered. Other receipts from subscribers, such as those for
pay-cable services or installation charges, are not included in gross
receipts.
Subsection (d)(2)(B) provides that, except in the case of a cable
system that comes within the gross receipts limitations of subclauses
(C) and (D), the royalty fee is computed in the following manner:
Every cable system pays .675 of 1 percent of its gross receipts for
the privilege of retransmitting distant non-network programming, such
amount to be applied against the fee, if any, payable under the
computation for ``distant signal equivalents.'' The latter are
determined by adding together the values assigned to the actual number
of distant television stations carried by a cable system. The purpose of
this initial rate, applicable to all cable systems in this class, is to
establish a basic payment, whether or not a particular cable system
elects to transmit distant non-network programming. It is not a payment
for the retransmission of purely ``local'' signals, as is evident from
the provision that it applies to and is deductible from the fee payable
for any ``distant signal equivalents.''
The remaining provisions of subclause (B) establish the following
rates for ``distant signal equivalents:''
The rate from zero to one distant signal equivalent is .675 of 1
percent of gross subscriber revenues. An additional .425 of 1 percent of
gross subscriber revenues is to be paid for each of the second, third
and fourth distant signal equivalents that are carried. A further
payment of .2 of 1 percent of gross subscriber revenues is to be made
for each distant signal equivalent after the fourth. Any fraction of a
distant signal equivalent is to be computed at its fractional value and
where a cable system is located partly within and partly without the
local service area of a primary transmitter, the gross receipts subject
to the percentage payment are limited to those gross receipts derived
from subscribers located without the local service area of such primary
transmitter.
Pursuant to the foregoing formula, copyright payments as a
percentage of gross receipts increase as the number of distant
television signals carried by a cable system increases. Because many
smaller cable systems carry a large number of distant signals,
especially those located in areas where over-the-air television service
is sparse, and because smaller cable systems may be less able to
shoulder the burden of copyright payments than larger systems, the
Committee decided to give special consideration to cable systems with
semi-annual gross subscriber receipts of less than $160,000 ($320,000
annually). The royalty fee schedules for cable systems in this category
are specified in subclauses (C) and (D).
In lieu of the payments required in subclause (B), systems earning
less than $80,000, semi-annually, are to pay a royalty fee of .5 of 1
percent of gross receipts. Gross receipts under this provision are
computed, however, by subtracting from actual gross receipts collected
during the payment period the amount by which $80,000 exceeds such
actual gross receipts. Thus, if the actual gross receipts of the cable
system for the period covered are $60,000, the fee is determined by
subtracting $20,000 (the amount by which $80,000 exceeds actual gross
receipts) from $60,000 and applying .5 of 1 percent to the $40,000
result. However, gross receipts in no case are to be reduced to less
than $3,000.
Under subclause (D), cable systems with semi-annual gross subscriber
receipts of between $80,000 and $160,000 are to pay royalty fees of .5
of 1 percent of such actual gross receipts up to $80,000, and 1 percent
of any actual gross receipts in excess of $80,000. The royalty fee
payments under both subclauses (C) and (D) are to be determined without
regard to the number of distant signal equivalents, if any, carried by
the subject cable systems.
Copyright Royalty Distribution. Section 111(d)(3) provides that the
royalty fees paid by cable systems under the compulsory license shall be
received by the Register of Copyrights and, after deducting the
reasonable costs incurred by the Copyright Office, deposited in the
Treasury of the United States. The fees are distributed subsequently,
pursuant to the determination of the Copyright Royalty Commission under
chapter 8 [Sec. 801 et seq. of this title].
The copyright owners entitled to participate in the distribution of
the royalty fees paid by cable systems under the compulsory license are
specified in section 111(d)(4). Consistent with the Committee's view
that copyright royalty fees should be made only for the retransmission
of distant non-network programming, the claimants are limited to (1)
copyright owners whose works were included in a secondary transmission
made by a cable system of a distant non-network television program; (2)
any copyright owner whose work is included in a secondary transmission
identified in a special statement of account deposited under section
111(d)(2)(A); and (3) any copyright owner whose work was included in
distant non-network programming consisting exclusively of aural signals.
Thus, no royalty fees may be claimed or distributed to copyright owners
for the retransmission of either ``local'' or ``network'' programs.
The Committee recognizes that the bill does not include specific
provisions to guide the Copyright Royalty Commission in determining the
appropriate division among competing copyright owners of the royalty
fees collected from cable systems under Section 111. The Committee
concluded that it would not be appropriate to specify particular,
limiting standards for distribution. Rather, the Committee believes that
the Copyright Royalty Commission should consider all pertinent data and
considerations presented by the claimants.
Should disputes arise, however, between the different classes of
copyright claimants, the Committee believes that the Copyright Royalty
Commission should consider that with respect to the copyright owners of
``live'' programs identified by the special statement of account
deposited under Section 111(d)(2)(A), a special payment is provided in
Section 111(f).
Section 111(d)(5) sets forth the procedure for the distribution of
the royalty fees paid by cable systems. During the month of July of each
year, every person claiming to be entitled to compulsory license fees
must file a claim with the Copyright Royalty Commission, in accordance
with such provisions as the Commission shall establish. In particular,
the Commission may establish the relevant period covered by such claims
after giving adequate time for copyright owners to review and consider
the statements of account filed by cable systems. Notwithstanding any
provisions of the antitrust laws, the claimants may agree among
themselves as to the division and distribution of such fees. After the
first day of August of each year, the Copyright Royalty Commission shall
determine whether a controversy exists concerning the distribution of
royalty fees. If no controversy exists, the Commission, after deducting
its reasonable administrative costs, shall distribute the fees to the
copyright owners entitled or their agents. If the Commission finds the
existence of a controversy, it shall, pursuant to the provisions of
chapter 8 [Sec. 801 et seq. of this title], conduct a proceeding to
determine the distribution of royalty fees.
Off-Shore Taping by Cable Systems. Section 111(e) establishes the
conditions and limitation upon which certain cable systems located
outside the continental United States, and specified in subsection (f),
may make tapes of copyrighted programs and retransmit the taped programs
to their subscribers upon payment of the compulsory license fee. These
conditions and limitations include compliance with detailed
transmission, record keeping, and other requirements. Their purpose is
to control carefully the use of any tapes made pursuant to the limited
recording and retransmission authority established in subsection (f),
and to insure that the limited objective of assimilating offshore cable
systems to systems within the United States for purposes of the
compulsory license is not exceeded. Any secondary transmission by a
cable system entitled to the benefits of the taping authorization that
does not comply with the requirements of section 111(e) is an act of
infringement and is fully subject to all the remedies provided in the
legislation for such actions.
Definitions. Section 111(f) contains a series of definitions. These
definitions are found in subsection (f) rather than in section 101
because of their particular application to secondary transmissions by
cable systems.
Primary and Secondary Transmissions. The definitions of ``primary
transmission'' and ``secondary transmission'' have been discussed above.
The definition of ``secondary transmission'' also contains a provision
permitting the nonsimultaneous retransmission of a primary transmission
if by a cable system ``not located in whole or in part within the
boundary of the forty-eight contiguous states, Hawaii or Puerto Rico.''
Under a proviso, however, a cable system in Hawaii may make a
nonsimultaneous retransmission of a primary transmission if the carriage
of the television broadcast signal comprising such further transmission
is permissible under the rules, regulations or authorizations of the
FCC.
The effect of this definition is to permit certain cable systems in
offshore areas, but not including cable systems in the offshore area of
Puerto Rico and to a limited extent only in Hawaii, to tape programs and
retransmit them to subscribers under the compulsory license. Puerto Rico
was excluded based upon a communication the Committee received from the
Governor of Puerto Rico stating that the particular television
broadcasting problems which the definition seeks to solve for cable
systems in other noncontiguous areas do not exist in Puerto Rico. He
therefore requested that Puerto Rico be excluded from the scope of the
definition. All cable systems covered by the definition are subject to
the conditions and limitations for nonsimultaneous transmissions
established in section 111(e).
Cable System. The definition of a ``cable system'' establishes that
it is a facility that in whole or in part receives signals of one or
more television broadcast stations licensed by the FCC and makes
secondary transmissions of such signals to subscribing members of the
public who pay for such service. A closed circuit wire system that only
originates programs and does not carry television broadcast signals
would not come within the definition. Further, the definition provides
that, in determining the applicable royalty fee and system
classification under subsection (d)(2)(B), (C), or (D) cable systems in
contiguous communities under common ownership or control or operating
from one headend are considered as one system.
Local Service Area of a Primary Transmitter. The definition of
``local service area of a primary transmitter'' establishes the
difference between ``local'' and ``distant'' signals and therefore the
line between signals which are subject to payment under the compulsory
license and those that are not. It provides that the local service area
of a television broadcast station is the area in which the station is
entitled to insist upon its signal being retransmitted by a cable system
pursuant to FCC rules and regulations. Under FCC rules and regulations
this so-called ``must carry'' area is defined based on the market size
and position of cable systems in 47 C.F.R. Secs. 76.57, 76.59, 76.61 and
76.63. The definition is limited, however, to the FCC rules in effect on
April 15, 1976. The purpose of this limitation is to insure that any
subsequent rule amendments by the FCC that either increase or decrease
the size of the local service area for its purposes do not change the
definition for copyright purposes. The Committee believes that any such
change for copyright purposes, which would materially affect the royalty
fee payments provided in the legislation, should only be made by an
amendment to the statute.
The ``local service area of a primary transmitter'' of a Canadian or
Mexican television station is defined as the area in which such station
would be entitled to insist upon its signals being retransmitted if it
were a television broadcast station subject to FCC rules and
regulations. Since the FCC does not permit a television station licensed
in a foreign country to assert a claim to carriage by a U.S. cable
system, the local service area of such foreign station is considered to
be the same area as if it were a U.S. station.
The local service area for a radio broadcast station is defined to
mean ``the primary service area of such station pursuant to the rules
and regulations of the Federal Communications Commission.'' The term
``primary service area'' is defined precisely by the FCC with regard to
AM stations in Section 73.11(a) of the FCC's rules. In the case of FM
stations, ``primary service area'' is regarded by the FCC as the area
included within the field strength contours specified in Section 73.311
of its rules.
Distant Signal Equivalent. The definition of a ``distant signal
equivalent'' is central to the computation of the royalty fees payable
under the compulsory license. It 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. It is computed by assigning a
value of one (1) to each distant independent station and a value of one-
quarter (\1/4\) to each distant network station and distant
noncommercial educational station carried by a cable system, pursuant to
the rules and regulations of the FCC. Thus, a cable system carrying two
distant independent stations, two distant network stations and one
distant noncommercial educational station would have a total of 2.75
distant signal equivalents.
The values assigned to independent, network and noncommercial
educational stations are subject, however, to certain exceptions and
limitations. Two of these relate to the mandatory and discretionary
program deletion and substitution rules of the FCC. Where the FCC rules
require a cable system to omit certain programs (e.g., the syndicated
program exclusivity rules) and also permit the substitution of another
program in place of the omitted program, no additional value is assigned
for the substituted or additional program. Further, where the FCC rules
on the date of enactment of this legislation permit a cable system, at
its discretion, to make such deletions or substitutions or to carry
additional programs not transmitted by primary transmitters within whose
local service area the cable system is located, no additional value is
assigned for the substituted or additional programs. However, the latter
discretionary exception is subject to a condition that if the
substituted or additional program is a ``live'' program (e.g., a sports
event), then an additional value is assigned to the carriage of the
distant signal computed as a fraction of one distant signal equivalent.
The fraction is determined by assigning to the numerator the number of
days in the year on which the ``live'' substitution occurs, and by
assigning to the denominator the number of days in the year. Further,
the discretionary exception is limited to those FCC rules in effect on
the date of enactment of this legislation [Oct. 19, 1976]. If subsequent
FCC rule amendments or individual authorizations enlarge the
discretionary ability of cable systems to delete and substitute
programs, such deletions and substitutions would be counted at the full
value assigned the particular type of station provided above.
Two further exceptions pertain to the late-night or specialty
programming rules of the FCC or to 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. In this event, the values
for independent, network and noncommercial, educational stations set
forth above, as the case may be, are determined by multiplying each 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.
Network Station. A ``network station'' is defined as a television
broadcast station that is owned or operated by, or affiliated with, one
or more of the U.S. television networks 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. To qualify as a network station, all the
conditions of the definition must be met. Thus, the retransmission of a
Canadian station affiliated with a Canadian network would not qualify
under the definition. Further, a station affiliated with a regional
network would not qualify, since a regional network would not provide
nationwide transmissions. However, a station affiliated with a network
providing nationwide transmissions that also occasionally carries
regional programs would qualify as a ``network station,'' if the station
transmits a substantial part of the programming supplied by the network
for a substantial part of the station's typical broadcast day.
Independent Station. An ``independent station'' is defined as a
commercial television broadcast station other than a network station.
Any commercial station that does not fall within the definition of
``network station'' is classified as an ``independent station.''
Noncommercial Educational Station. A ``noncommercial educational
station'' is defined as a television station that is a noncommercial
educational broadcast station within the meaning of section 397 of title
47 [47 U.S.C. 397].
References in Text
The antitrust laws, referred to in subsec. (d)(4)(A), are classified
generally to chapter 1 (Sec. 1 et seq.) of Title 15, Commerce and Trade.
The date of enactment of this Act, referred to in the fifth
undesignated par. of subsec. (f), defining ``distant signal
equivalent'', is Oct. 19, 1976.
Amendments
1999--Subsecs. (a), (b). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(b)(1)(A), (B)], substituted ``performance or display of a work
embodied in a primary transmission'' for ``primary transmission
embodying a performance or display of a work'' in introductory
provisions.
Subsec. (c)(1). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(2), (b)(1)(C)(i)], inserted ``a performance or display of a
work embodied in'' after ``by a cable system of'', struck out ``and
embodying a performance or display of a work'' after ``governmental
authority of Canada or Mexico'', and substituted ``statutory'' for
``compulsory''.
Subsec. (c)(3), (4). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(b)(1)(C)(ii)], substituted ``a performance or display of a
work embodied in a primary transmission'' for ``a primary transmission''
and struck out ``and embodying a performance or display of a work''
after ``governmental authority of Canada or Mexico''.
Subsec. (d). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(2)], which directed substitution of ``statutory'' for
``compulsory'', was executed by substituting ``Statutory'' for
``Compulsory'' in heading to reflect probable intent of Congress.
Subsec. (d)(1). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(2)], substituted ``statutory'' for ``compulsory'' in
introductory provisions.
Subsec. (d)(1)(B)(i), (3)(C). Pub. L. 106-113, Sec. 1000(a)(9)
[title I, Sec. 1011(a)(1)], substituted ``programming'' for
``programing''.
Subsec. (d)(4)(A). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(2)], substituted ``statutory'' for ``compulsory'' in two
places.
Subsec. (f). Pub. L. 106-113, Sec. 1000(a)(9) [title I,
Sec. 1011(a)(1)], substituted ``programming'' for ``programing''
wherever appearing.
1995--Subsec. (c)(1). Pub. L. 104-39 inserted ``and section 114(d)''
after ``of this subsection''.
1994--Subsec. (f). Pub. L. 103-369, Sec. 3(b), in fourth
undesignated par. defining local service area of a primary transmitter,
inserted ``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,'' after ``April
15, 1976,''.
Pub. L. 103-369, Sec. 3(a), inserted ``microwave,'' after ``wires,
cables,'' in third undesignated par., defining cable system.
1993--Subsec. (d)(1). Pub. L. 103-198, Sec. 6(a)(1), struck out ``,
after consultation with the Copyright Royalty Tribunal (if and when the
Tribunal has been constituted),'' after ``Register shall'' in
introductory provisions.
Subsec. (d)(1)(A). Pub. L. 103-198, Sec. 6(a)(2), struck out ``,
after consultation with the Copyright Royalty Tribunal (if and when the
Tribunal has been constituted),'' after ``Register of Copyrights may''.
Subsec. (d)(2). Pub. L. 103-198, Sec. 6(a)(3), substituted ``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 in the event no controversy over
distribution exists, or by a copyright arbitration royalty panel in the
event a controversy over such distribution exists.'' for ``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 Copyright Royalty Tribunal as provided by this title. The Register
shall submit to the Copyright Royalty Tribunal, on a semiannual basis, a
compilation of all statements of account covering the relevant six-month
period provided by clause (1) of this subsection.''
Subsec. (d)(4)(A). Pub. L. 103-198, Sec. 6(a)(4), substituted
``Librarian of Congress'' for ``Copyright Royalty Tribunal'' before
``claim with the'' and for ``Tribunal'' before ``requirements that
the''.
Subsec. (d)(4)(B). Pub. L. 103-198, Sec. 6(a)(5), amended subpar.
(B) generally. Prior to amendment, subpar. (B) read as follows: ``After
the first day of August of each year, the Copyright Royalty Tribunal
shall determine whether there exists a controversy concerning the
distribution of royalty fees. If the Tribunal determines that no such
controversy exists, it shall, after deducting its reasonable
administrative costs under this section, distribute such fees to the
copyright owners entitled, or to their designated agents. If the
Tribunal finds the existence of a controversy, it shall, pursuant to
chapter 8 of this title, conduct a proceeding to determine the
distribution of royalty fees.''
Subsec. (d)(4)(C). Pub. L. 103-198, Sec. 6(a)(6), substituted
``Librarian of Congress'' for ``Copyright Royalty Tribunal''.
1990--Subsec. (c)(2)(B). Pub. L. 101-318, Sec. 3(a)(1), struck out
``recorded the notice specified by subsection (d) and'' after ``where
the cable system has not''.
Subsec. (d)(2). Pub. L. 101-318, Sec. 3(a)(2)(A), substituted
``clause (1)'' for ``paragraph (1)''.
Subsec. (d)(3). Pub. L. 101-318, Sec. 3(a)(2)(B), substituted
``clause (4)'' for ``clause (5)'' in introductory provisions.
Subsec. (d)(3)(B). Pub. L. 101-318, Sec. 3(a)(2)(C), substituted
``clause (1)(A)'' for ``clause (2)(A)''.
1988--Subsec. (a)(4), (5). Pub. L. 100-667, Sec. 202(1)(A), added
par. (4) and redesignated former par. (4) as (5).
Subsec. (d)(1)(A). Pub. L. 100-667, Sec. 202(1)(B), inserted
provision that determination of total number of subscribers and gross
amounts paid to cable system for basic service of providing secondary
transmissions of primary broadcast transmitters not include subscribers
and amounts collected from subscribers receiving secondary transmissions
for private home viewing under section 119.
1986--Subsec. (d). Pub. L. 99-397, Sec. 2(a)(1), (4), (5),
substituted ``paragraph (1)'' for ``clause (2)'' in par. (3), struck out
par. (1) which related to recordation of notice with Copyright Office by
cable systems in order for secondary transmissions to be subject to
compulsory licensing, and redesignated pars. (2) to (5) as (1) to (4),
respectively.
Pub. L. 99-397, Sec. 2(a)(2), (3), which directed the amendment of
subsec. (d) by substituting ``paragraph (4)'' for ``clause (5)'' in
pars. (2) and (2)(B) could not be executed because pars. (2) and (2)(B)
did not contain references to ``clause (5)''. See 1990 Amendment note
above.
Subsec. (f). Pub. L. 99-397, Sec. 2(b), substituted ``subsection
(d)(1)'' for ``subsection (d)(2)'' in third undesignated par., defining
a cable system.
Pub. L. 99-397, Sec. 1, inserted provision in fourth undesignated
par., defining ``local service area of a primary transmitter'', to cover
that term in relation to low power television stations.
Effective Date of 1995 Amendment
Amendment by Pub. L. 104-39 effective 3 months after Nov. 1, 1995,
see section 6 of Pub. L. 104-39, set out as a note under section 101 of
this title.
Effective Date of 1994 Amendment
Amendment by section 3(b) of Pub. L. 103-369 effective July 1, 1994,
see section 6(d) of Pub. L. 103-369, set out as an Effective and
Termination Dates of 1994 Amendment note under section 119 of this
title.
Effective Date of 1990 Amendment
Section 3(e)(1) of Pub. L. 101-318 provided that: ``The amendments
made by subsections (a) and (b) [amending this section and section 801
of this title] shall be effective as of August 27, 1986.''
Effective Date of 1988 Amendment
Amendment by Pub. L. 100-667 effective Jan. 1, 1989, see section 206
of Pub. L. 100-667, set out as an Effective Date note under section 119
of this title.
Termination of Trust Territory of the Pacific Islands
For termination of Trust Territory of the Pacific Islands, see note
set out preceding section 1681 of Title 48, Territories and Insular
Possessions.
Section Referred to in Other Sections
This section is referred to in sections 106, 110, 114, 119, 122,
501, 510, 511, 801, 802, 803 of this title; title 18 section 2319; title
47 sections 325, 534, 573.
