29–006 

108TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 108–660 

SATELLITE HOME VIEWER EXTENSION AND 

REAUTHORIZATION ACT OF 2004 

SEPTEMBER 7, 2004.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. SENSENBRENNER, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

[To accompany H.R. 4518] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 4518) to extend the statutory license for secondary transmissions under section 119 of title 17, United States Code, having 

considered the same, reports favorably thereon with an amendment 

and recommends that the bill as amended do pass. 

CONTENTS 

Page 

The Amendment ...................................................................................................... 1 

Purpose and Summary ............................................................................................ 7 

Background and Need for the Legislation ............................................................. 7 

Hearings ................................................................................................................... 12 

Committee Consideration ........................................................................................ 12 

Vote of the Committee ............................................................................................. 13 

Committee Oversight Findings ............................................................................... 13 

New Budget Authority and Tax Expenditures ...................................................... 13 

Congressional Budget Office Cost Estimate .......................................................... 13 

Performance Goals and Objectives ......................................................................... 16 

Constitutional Authority Statement ...................................................................... 17 

Section-by-Section Analysis and Discussion .......................................................... 17 

Changes in Existing Law Made by the Bill, as Reported ..................................... 19 

Markup Transcript .................................................................................................. 33 

THE AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

2

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Satellite Home Viewer Extension and Reauthorization Act of 2004’’. 

(b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents. 

TITLE I—STATUTORY LICENSE FOR SATELLITE CARRIERS 

Sec. 101. Extension of authority. 

Sec. 102. Reporting of subscribers; significantly viewed and other signals; technical amendments. 

Sec. 103. Statutory license for satellite carriers outside local markets. 

Sec. 104. Waivers. 

Sec. 105. Study. 

Sec. 106. Effect on certain proceedings. 

Sec. 107. Expedited consideration of voluntary agreements to provide satellite secondary transmissions to local 

markets.

TITLE I—STATUTORY LICENSE FOR 

SATELLITE CARRIERS 

SEC. 101. EXTENSION OF AUTHORITY. 

(a) IN GENERAL.— Section 4(a) of the Satellite Home Viewer Act of 1994 (17 

U.S.C. 119 note; Public Law 103–369; 108 Stat. 3481) is amended by striking ‘‘December 31, 2004’’ and inserting ‘‘December 31, 2009’’. 

(b) EXTENSION FOR CERTAIN SUBSCRIBERS.—Section 119(e) of title 17, United 

States Code, is amended by striking ‘‘December 31, 2004’’ and inserting ‘‘December 

31, 2009’’. 

SEC. 102. REPORTING OF SUBSCRIBERS; SIGNIFICANTLY VIEWED AND OTHER SIGNALS; TECHNICAL AMENDMENTS. 

Section 119(a) of title 17, United States Code, is amended—

(1) in paragraph (1)—

(A) in the paragraph heading, by striking ‘‘AND PBS SATELLITE FEED’’; 

(B) in the first sentence, by striking ‘‘(3), (4), and (6)’’ and inserting ‘‘(5), 

(6), and (8)’’; 

(C) in the first sentence, by striking ‘‘or by the Public Broadcasting 

Service satellite feed’’; and 

(D) by striking the second sentence; 

(2) in paragraph (2)—

(A) in subparagraph (A), by striking ‘‘(3), (4), (5), and (6)’’ and inserting 

‘‘(5), (6), (7), and (8)’’; and 

(B) by striking subparagraph (C) and inserting the following: 

‘‘(C) EXCEPTIONS.—

‘‘(i) STATES WITH SINGLE FULL-POWER NETWORK STATION.—In a 

State in which there is licensed by the Federal Communications Commission a single full-power station that was a network station on January 1, 1995, the statutory license provided for in subparagraph (A) 

shall apply to the secondary transmission by a satellite carrier of the 

signal of that station to any subscriber in a community that is located 

within that State and that is not within the first 50 television markets 

as listed in the regulations of the Commission as in effect on such date 

(47 CFR 76.51). 

‘‘(ii) CERTAIN ADDITIONAL STATIONS.—The statutory license provided for in subparagraph (A) shall apply to the secondary transmission, by a satellite carrier to subscribers in no more than two counties in a State that are in local market principally comprised of counties in another State, of the signals of any network station located in 

the capital of the State in which such counties are located, if the total 

number of television households in the two counties combined did not 

exceed 10,000 for the year 2003 according to Nielsen Media Research. 

‘‘(D) SUBMISSION OF SUBSCRIBER LISTS TO NETWORKS.—

‘‘(i) INITIAL LISTS.—A satellite carrier that makes secondary transmissions of a primary transmission made by a network station pursuant to subparagraph (A) shall, 90 days after commencing such secondary transmissions, submit to the network that owns or is affiliated 

with the network station—

‘‘(I) a list identifying (by name and street address, including 

county and zip code) all subscribers to which the satellite carrier 

makes secondary transmissions of that primary transmission to 

subscribers in unserved households; and 

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‘‘(II) a separate list, aggregated by designated market area (as 

defined in section 122(j)) (by name and street address, including 

county and zip code), which shall indicate those subscribers being 

served pursuant to subsection (a)(3), relating to significantly 

viewed stations. 

‘‘(ii) MONTHLY LISTS.—After the submission of the initial lists 

under clause (i), on the 15th of each month, the satellite carrier shall 

submit to the network—

‘‘(I) a list identifying (by name and street address, including 

county and zip code) any persons who have been added or dropped 

as subscribers under clause (i)(I) since the last submission under 

clause (i); and 

‘‘(II) a separate list, aggregated by designated market area (by 

name and street address, including county and zip code), identifying those subscribers whose service pursuant to subsection (a)(3), 

relating to significantly viewed stations, has been added or 

dropped. 

‘‘(iii) USE OF SUBSCRIBER INFORMATION.—Subscriber information 

submitted by a satellite carrier under this subparagraph may be used 

only for purposes of monitoring compliance by the satellite carrier with 

this subsection. 

‘‘(iv) APPLICABILITY.—The submission requirements of this subparagraph shall apply to a satellite carrier only if the network to whom the 

submissions are to be made places on file with the Register of Copyrights a document identifying the name and address of the person to 

whom such submissions are to be made. The Register shall maintain 

for public inspection a file of all such documents.’’; 

(3) by striking paragraph (8); 

(4) by redesignating paragraphs (9) through (12) as paragraphs (10) 

through (13), respectively; 

(5) by redesignating paragraphs (3) through (7) as paragraphs (5) through 

(9), respectively; 

(6) by inserting after paragraph (2) the following: 

‘‘(3) SECONDARY TRANSMISSIONS OF SIGNIFICANTLY VIEWED SIGNALS.—

‘‘(A) IN GENERAL.—Notwithstanding the provisions of paragraph (2)(B), 

and subject to subparagraph (B) of this paragraph, the statutory license 

provided for in paragraphs (1) and (2) shall apply to the secondary transmission of the signal of a network station or a superstation to a subscriber 

who resides outside the station’s local market (as defined in section 122(j)) 

but within a community in which the signal of that station was determined 

by the Federal Communications Commission, on or before the date of the 

enactment of the Satellite Home Viewer Extension and Reauthorization Act 

of 2004, to be significantly viewed in accordance with the provisions of section 76.54 of title 47, Code of Federal Regulations, as in effect on such date 

of enactment. 

‘‘(B) LIMITATION.—Subparagraph (A) shall apply only to secondary 

transmissions of network stations and superstations to subscribers who receive secondary transmissions from a satellite carrier pursuant to the statutory license under section 122.’’; and 

(7) in paragraph (2)(B)(i), by adding at the end the following new sentence: 

‘‘The limitation in this clause shall not apply to secondary transmissions under 

paragraph (3).’’. 

SEC. 103. STATUTORY LICENSE FOR SATELLITE CARRIERS OUTSIDE LOCAL MARKETS. 

Section 119 of title 17, United States Code, is amended as follows: 

(1) Subsection (a) is amended by inserting after paragraph (3), as added by 

section 102 of this Act, the following: 

‘‘(4) STATUTORY LICENSE WHERE RETRANSMISSIONS INTO LOCAL MARKET

AVAILABLE.—

‘‘(A) RULES FOR SUBSCRIBERS UNDER SUBSECTION (e).—

‘‘(i) FOR THOSE RECEIVING DISTANT SIGNALS.—In the case of a subscriber of a satellite carrier who is eligible to receive the signal of a network station solely by reason of subsection (e) (in this subparagraph referred to as a ‘distant signal’), and who is receiving the distant signal 

of a network station on the date of the enactment of the Satellite Home 

Viewer Extension and Reauthorization Act of 2004, the following shall 

apply: 

‘‘(I) In a case in which the signal of a local network station affiliated with the same television network is made available by that 

4

satellite carrier to the subscriber pursuant to the statutory license 

under section 122, the statutory license under paragraph (2) shall 

apply only to secondary transmissions by that satellite carrier to 

that subscriber of the distant signal of a station affiliated with the 

same television network—

‘‘(aa) if, within 60 days after receiving the notice of the satellite carrier under section 338(h) of the Communications Act 

of 1934, the subscriber elects to retain the distant signal; but 

‘‘(bb) only until such time as the subscriber elects to receive such local signal. 

‘‘(II) Notwithstanding subclause (I), the statutory license under 

paragraph (2) shall not apply with respect to any subscriber who 

is eligible to receive the distant signal of a television network station solely by reason of subsection (e) and to whom subclause (I) 

applies unless the satellite carrier, within 60 days after the date 

of the enactment of the Satellite Home Viewer Extension and Reauthorization Act of 2004, submits to that television network a list, 

aggregated by designated market area (as defined in section 

122(j)(2)(C)), that—

‘‘(aa) identifies that subscriber by name and address 

(street or RFD number, city, State, and zip code) and specifies 

the distant signals received by the subscriber; and 

‘‘(bb) states, to the best of the satellite carrier’s knowledge 

and belief, after having made diligent and good faith inquiries, 

that the subscriber is eligible under subsection (e) to receive 

the distant signals. 

‘‘(ii) FOR THOSE NOT RECEIVING DISTANT SIGNALS.—In the case of 

any subscriber of a satellite carrier who is eligible to receive the distant 

signal of a network station solely by reason of subsection (e) and who 

did not receive a distant signal of a station affiliated with the same 

network on July 1, 2004, the statutory license under paragraph (2) 

shall not apply to secondary transmissions by that satellite carrier to 

that subscriber of that distant signal. 

‘‘(B) RULES FOR OTHER SUBSCRIBERS.—In the case of a subscriber of a 

satellite carrier who is eligible to receive the signal of a network station 

under the statutory license under paragraph (2) (in this subparagraph referred to as a ‘distant signal’), other than subscribers to whom subparagraph (A) applies, the following shall apply: 

‘‘(i) In a case in which the signal of a local network station affiliated with the same television network is made available by that satellite carrier, on January 1, 2005, to the subscriber pursuant to the 

statutory license under section 122, the statutory license under paragraph (2) shall apply only to secondary transmissions by that satellite 

carrier to that subscriber of the distant signal of a station affiliated 

with the same television network if the subscriber’s satellite carrier, 

within 60 days after such date, submits to that television network a 

list, aggregated by designated market area (as defined in section 

122(j)(2)(C)), that identifies that subscriber by name and address 

(street or RFD number, city, State, and zip code) and specifies the distant signals received by the subscriber. 

‘‘(ii) In a case in which the signal of a local network station affiliated with the same television network is not made available by that 

satellite carrier, on January 1, 2005, to a subscriber pursuant to the 

statutory license under section 122, the statutory license under paragraph (2) shall apply only to secondary transmissions by that satellite 

carrier of the distant signal of a station affiliated with the same network to any person—

‘‘(I) who is a subscriber of that satellite carrier on such date, 

or 

‘‘(II) who becomes a subscriber of that satellite carrier after 

such date but before the local signal is available, 

but only until such time as the subscriber elects to receive the local signal from that satellite carrier. 

‘‘(C) FUTURE APPLICABILITY.—The statutory license under paragraph (2) 

shall not apply to the secondary transmission by a satellite carrier of a primary transmission of a network station to a subscriber who—

‘‘(i) does not receive such secondary transmission as of the date of 

the enactment of the Satellite Home Viewer Extension and Reauthorization Act of 2004; and 

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‘‘(ii) resides in a local market where the satellite carrier makes 

available a network station affiliated with the same television network 

pursuant to the statutory license under section 122. 

‘‘(D) OTHER PROVISIONS NOT AFFECTED.—This paragraph shall not affect 

the applicability of the statutory license to secondary transmissions under 

paragraph (3) or to unserved households included under paragraph (12). 

‘‘(E) AVAILABLE DEFINED.—For purposes of this paragraph, a local signal has been made available by a satellite carrier to a subscriber or person 

if the satellite carrier offers that local signal to other subscribers who reside 

in the same zipcode as that subscriber or person.’’. 

(2) Subsection (b)(1) is amended by striking subparagraph (B) and inserting 

the following: 

‘‘(B) a royalty fee for that 6-month period, computed by multiplying the 

total number of subscribers receiving each secondary transmission of each 

superstation or network station during each calendar month by the appropriate rate in effect under this section.’’. 

(3) Subsection (b)(1) is further amended by adding at the end the following 

flush sentence: 

‘‘Notwithstanding the provisions of subparagraph (B), a satellite carrier whose 

secondary transmissions are subject to statutory licensing under paragraph (1) 

or (2) of subsection (a) shall have no royalty obligation for secondary transmissions to a subscriber who resides outside the station’s local market (as defined in section 122(j)(2)) but within a community in which the signal of that 

station was determined by the Federal Communications Commission, on or before the date of the enactment of the Satellite Home Viewer Extension and Reauthorization Act of 2004, to be significantly viewed in accordance with the provisions of section 76.54 of title 47, Code of Federal Regulations, as in effect on 

such date of enactment.’’. 

(4) Subsection (c) is amended—

(A) by amending paragraph (1) to read as follows: 

‘‘(1) APPLICABILITY AND DETERMINATION OF ROYALTY FEES.—The appropriate 

rate for purposes of determining the royalty fee under subsection (b)(1)(B) shall 

be the appropriate rate set forth in part 258 of title 37, Code of Federal Regulations, as in effect on the date of the enactment of the Satellite Home Viewer 

Extension and Reauthorization Act of 2004, as modified under this subsection.’’; 

(B) by striking paragraph (2); 

(C) in paragraph (3)—

(i) by redesignating that paragraph as paragraph (2); 

(ii) in subparagraph (A)—

(I) by striking ‘‘January 1, 1997,’’ and inserting ‘‘January 1, 

2005,’’; and 

(II) by striking ‘‘who are not parties to a voluntary agreement 

filed with the Copyright Office in accordance with paragraph (2)’’; 

(iii) in subparagraph (C), by striking ‘‘as provided’’ and all that follows through ‘‘later’’ and inserting ‘‘on January 1, 2006’’; and 

(iv) by striking subparagraph (D); and 

(D) by striking paragraphs (4) and (5) and inserting the following: 

‘‘(3) COST OF LIVING ADJUSTMENT.—The royalty rates set forth in subsection 

(b)(1)(B), as adjusted under paragraph (2) of this subsection, shall be adjusted 

by the Librarian of Congress—

‘‘(A) on January 1, 2005, to reflect any changes occurring during the period beginning on January 1, 2000, and ending on November 30, 2004, in 

the cost of living as determined by the most recent Consumer Price Index 

(for all consumers and items) published by the Secretary of Labor during 

that period; and 

‘‘(B) on January 1, 2007, and on January 1 of each year thereafter, to 

reflect any changes occurring during the preceding 12 months in the cost 

of living as determined by the most recent Consumer Price Index so published. 

‘‘(4) REDUCTIONS.—The rate of the royalty fee determined under paragraph 

(2)—

‘‘(A) for superstations shall be reduced by 30 percent; and 

‘‘(B) for network stations shall be reduced by 45 percent.’’. 

(5) Subsection (d) is amended—

(A) by amending paragraph (9) to read as follows: 

‘‘(9) SUPERSTATION.—The term ‘superstation’ means a television broadcast 

station, other than a network station, licensed by the Federal Communications 

Commission that is secondarily transmitted by a satellite carrier. ’’; 

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(B) in paragraph (10)(D), by striking ‘‘(a)(11)’’ and inserting ‘‘(a)(12)’’; 

and 

(C) by striking paragraph (12). 

(6) Subsection (a)(7), as redesignated by section 102(5) of this Act, is 

amended—

(A) in subparagraph (A), by striking ‘‘who does not reside in an 

unserved household’’ and inserting ‘‘who is not eligible to receive the transmission under this section’’; 

(B) in subparagraph (B), by striking ‘‘who do not reside in unserved 

households’’ and inserting ‘‘who are not eligible to receive the transmission 

under this section’’; and 

(C) in subparagraph (D), by striking ‘‘is for private home viewing to an 

unserved household’’ and inserting ‘‘is to a subscriber who is eligible to receive the transmission under this section’’. 

SEC. 104. WAIVERS. 

Section 119(a) of title 17, United States Code, is amended by adding at the end 

the following new paragraph: 

‘‘(14) WAIVERS.—A subscriber who is denied the secondary transmission of 

a network station under paragraph (4)(C), or is denied the secondary transmission of a network station or a superstation under paragraph (3)(B), may request a waiver from such denial by submitting a request, through the subscriber’s satellite carrier, to the network station or superstation in the local 

market where the subscriber is located. The network station or superstation 

shall accept or reject the subscriber’s request for a waiver within 30 days after 

receipt of the request. If the network station or superstation fails to accept or 

reject the subscriber’s request for a waiver within that 30-day period, that network station or superstation, as the case may be, shall be deemed to agree to 

the waiver request. Unless specifically stated by the network station or superstation, a waiver under section 339(c)(2) of the Communications Act shall not 

constitute a waiver for purposes of this paragraph.’’. 

SEC. 105. STUDY. 

No later than June 30, 2008, the Register of Copyrights shall report to the Committee on the Judiciary of the House of Representatives and the Committee on the 

Judiciary of the Senate the Register’s findings and recommendations on the operation and revision of the statutory licenses under sections 111, 119, and 122 of title 

17, United States Code. The report should include, but not be limited to, the following: 

(1) A comparison of the royalties paid by licensees under such sections, including historical rates of increases in these royalties, a comparison between the 

royalties under each such section and the prices paid in the marketplace for 

comparable programming. 

(2) An analysis of the differences in the terms and conditions of the licenses 

under such sections, an analysis of whether these differences are required or 

justified by historical, technological, or regulatory differences that affect the satellite and cable industries, and an analysis of whether either the cable or satellite industry is placed in a competitive disadvantage due to these terms and 

conditions. 

(3) An analysis of whether the licenses under such sections are still justified 

by the bases upon which they were originally created. 

(4) An analysis of the correlation, if any, between the royalties, or lack 

thereof, under such sections and the fees charged to cable and satellite subscribers, addressing whether cable and satellite companies have passed to subscribers any savings realized as a result of the royalty structure and amounts 

under such sections. 

SEC. 106. EFFECT ON CERTAIN PROCEEDINGS. 

Nothing in this title shall modify any remedy imposed on a party that is required by the judgment of a court in any action that was brought before May 1, 

2004, against that party for a violation of section 119 of title 17, United States Code. 

SEC. 107. EXPEDITED CONSIDERATION OF VOLUNTARY AGREEMENTS TO PROVIDE SATELLITE SECONDARY TRANSMISSIONS TO LOCAL MARKETS. 

Section 119 of title 17, United States Code, is amended by adding at the end 

the following: 

‘‘(f) EXPEDITED CONSIDERATION BY JUSTICE DEPARTMENT OF VOLUNTARY AGREE- MENTS TO PROVIDE SATELLITE SECONDARY TRANSMISSIONS TO LOCAL MARKETS.—

‘‘(1) IN GENERAL.—In a case in which no satellite carrier makes available, 

to subscribers located in a local market, as defined in section 122(j)(2), the secondary transmission into that market of a primary transmission of one or more 

7

1 Compulsory licenses are authorized by the Copyright Act as a limitation on the exclusive 

rights that are otherwise granted to copyright holders. Also referred to as a statutory license, 

‘‘[a] compulsory license allows individuals to use protected works without obtaining the consent 

of the copyright owner upon payment of fees set by the government. In order to take advantage 

of a compulsory license, the prospective user must comply with certain statutory procedures.’’ 

ROGER E. SCHECHTER AND JOHN R. THOMAS, INTELLECTUAL PROPERTY: THE LAW OF COPYRIGHTS, PATENTS AND TRADEMARKS § 7, at 114 (2003). 2 19 FCC Rcd. 1606, 12622, available at http://hraunfoss.fcc.gov/edocslpublic/attachmatch/

FCC-04-5A1.pdf. The FCC publishes an ‘‘Annual Assessment of the Status of Competition in the 

Market for the Delivery of Video Programming,’’ which surveys the MVPD market. The current 

edition was released in January 2004. 3 Id. 

4Localism is the concept that consumers should be able to view their own local news, weather, 

emergency, and community-oriented programming. The availability of local programming is 

Continued

television broadcast stations licensed by the Federal Communications Commission, and two or more satellite carriers request a business review letter in accordance with section 50.6 of title 28, Code of Federal Regulations (as in effect 

on July 7, 2004), in order to assess the legality under the antitrust laws of proposed business conduct to make or carry out an agreement to provide such secondary transmission into such local market, the appropriate official of the Department of Justice shall respond to the request no later than 90 days after the 

date on which the request is received. 

‘‘(2) DEFINITION.—For purposes of this subsection, the term ‘antitrust 

laws’—

‘‘(A) has the meaning given that term in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes 

section 5 of the Federal Trade Commission Act (15 U.S.C. 45) to the extent 

such section 5 applies to unfair methods of competition; and 

‘‘(B) includes any State law similar to the laws referred to in paragraph 

(1).’’.

PURPOSE AND SUMMARY

The purpose of H.R. 4518 is to extend the copyright compulsory 1

license for the retransmission by satellite carriers of distant overthe-air television broadcast stations for an additional 5 years, provide a process that will enable copyright owners whose works are 

retransmitted under the distant signal license to receive fair compensation for the statutory use of their creative works, ensure that 

satellite subscribers are able to continue to receive distant and 

local network and superstation signals to which they are entitled, 

and to make other necessary improvements and revisions to § 119 

of the Copyright Act. 

BACKGROUND AND NEED FOR THE LEGISLATION

American consumers rely upon broadcast, cable, and direct 

broadcast satellite (‘‘DBS’’) to deliver most television programming 

into their homes. Broadcast programming is generally available 

free to consumers who can receive it over-the-air in the local market of the television station. Cable and DBS dominate the multichannel video programming distribution (‘‘MVPD’’) marketplace, 

where providers offer programming to consumers on a fee-for-subscription basis. 

According to the most recent data from the Federal Communications Commission (‘‘FCC’’), there are approximately 107 million television households in the United States.2 Of those, 88% choose to 

subscribe to an MVPD service. Cable serves 75% of subscribers, 

while DBS serves 22%.3

While cable still serves the vast majority of MVPD subscribers, 

DBS has benefitted from congressional efforts to promote localism 4

8

largely dependent on the continued health of network affiliates, who use revenue from the sale 

of advertising, the rates for which depend on audience size, to produce local content. 5 In 2003, the United States General Accounting Office (‘‘GAO’’) published a study that concluded there was a direct relationship between Congress’s decision to permit DBS operators to 

provide local signals to subscribers in the Satellite Home Viewer Improvement Act (‘‘SHVIA’’) 

and the growth of DBS operators. ‘‘Since 1999, when DBS operators acquired the legal right 

to provide local broadcast stations (such as affiliates of ABC, CBS, Fox, and NBC), these companies have emerged as important competitors to cable operators. In particular, in areas where 

subscribers can receive local broadcast stations from both primary DBS operators, the DBS penetration rate—that is, the percentage of households that subscribe to satellite service—is approximately 40 percent higher than in areas where subscribers cannot receive local broadcast 

stations from both primary DBS operators.’’ U.S. General Accounting Office, Issues Related to 

Competition and Subscriber Rates in the Cable Television Industry, GAO–04–8 at 4 (Washington, DC:October 2003), available at http://www.gao.gov/new.items/d048.pdf. 6 ‘‘DBS competition is associated with a slight reduction in cable rates as well as improved 

quality and service. In terms of rates, we found that a 10 percent higher DBS penetration rate 

. . . is associated with a slight rate reduction—about 15 cents per month.’’ Id. at 11. 7 19 FCC Rcd. 1606, 1610. ‘‘Since its introduction, the DBS growth rate has exceeded the 

growth rate of cable by double digits in every year except in the past year, when DBS growth 

exceeded cable growth by 9.16 percentage points.’’ Id. 8 Id. at 1651. ‘‘DirecTV states that according to its internal subscriber data, approximately 

70% of its customers were cable subscribers at the time they subscribed to DirecTV.’’ Id. 

and encourage competition 5 in the MVPD marketplace. Historically, Congress has attempted to balance these twin goals in order 

to preserve the ability of Americans to continue to receive free 

over-the-air television programming, much of it local in nature, 

while still fostering competition, which provides consumers with a 

greater variety of choices, improved services, higher quality, and 

technological innovation, in the fee-for-subscription market. While 

DBS has provided competition to cable, its impact on cable operations has generally been associated with improved customer service and the expanded offerings of new cable stations rather than a 

substantial reduction in cable rates.6

The two dominant DBS companies, DirecTV (a subsidiary of 

News Corporation) and EchoStar, which markets its service as the 

DISH Network, combined to sign up more than 80% of new cable 

and satellite television subscribers over the last year. Over the last 

decade, the DBS industry’s growth rate has far outpaced that of 

cable, exceeding it by double digits in nine of those years.7 Evidence indicates the DBS companies are succeeding in providing effective competition to cable, including luring many customers away 

from their competitors.8

Several provisions of the Copyright Act (Title 17 of the U.S. 

Code) govern the ability of cable and DBS providers to retransmit 

copyrighted broadcast programming. The cable and DBS industries 

are always free to enter into private negotiations with copyright 

owners and to compensate them for the use of their content under 

agreed-upon terms. Such privately-negotiated agreements provide 

the basis for the majority of programming that is retransmitted to 

subscribers by cable and DBS companies. 

In the absence of a freely-negotiated agreement, the cable and 

DBS industries rely upon separate and distinct copyright compulsory licenses that enable each to provide their subscribers with retransmitted over-the-air television broadcast programming without 

obtaining the permission of the copyright owners. In enacting each 

license, Congress has traditionally considered the unique historical, 

technological, and regulatory circumstances that affect each industry. 

Among other differences, the local character of cable systems and 

the national business model of DBS have resulted in differential 

public service, carriage, and taxation obligations that ought to be 

9

9 17 U.S.C. § 119 (d)(9)(A) defines a superstation as a ‘‘television broadcast station, other than 

a network station, licensed by the Federal Communications Commission that is secondarily 

transmitted by a satellite carrier. Essentially, it is an independent broadcast station. As of May 

20, 2004, the Copyright Office reports that six superstations received payments under the distant signal license in recent years. These stations are: 

KTLA Los Angeles, CA 

KWGN Denver, CO 

WGN Chicago, IL 

WPIX New York, NY 

WSBK Boston, MA 

WWOR Secaucus, NJ (reported as New York, NY) 10 17 U.S.C. § 119 (d)(2) defines a ‘‘network station’’ as . . . that is owned or operated by, or 

affiliated with, one or more of the television networks in the United States which offer an interconnected program service on a regular basis for 15 or more hours per week to at least 25 of 

its affiliated television licensees in 10 or more states . . .’’

objectively reviewed before Congress enacts sweeping changes. 

Congress has historically sought to balance the interests of the 

public in having continued access to free, local programming with 

a desire by some consumers to pay to view additional stations. In 

achieving equilibrium, it is critical that Congress not compromise 

the legitimate interests of intellectual property holders nor sacrifice 

long-term competitive interests by unfairly favoring one industry 

over another. 

The distant signal satellite license, codified in 17 U.S.C. § 119, 

was first enacted in 1988 as part of the Satellite Home Viewer Act. 

The license is temporary and applies to the retransmission of both 

distant network and superstation signals. 

Congress has renewed the distant signal satellite license twice 

before. First, in the Satellite Home Viewer Act of 1994 and, second, 

in SHVIA in 1999. In addition, SHVIA added a new, permanent 17 

U.S.C. § 122 that permits satellite carriers to retransmit local television broadcast stations to their subscribers. The § 119 distant signal license is slated to expire on December 31, 2004. 

The distant signal license is important to DBS carriers because 

it enables them to clear the rights to copyrighted programming contained on distant superstation and network stations by submitting 

a statement of account and paying a statutorily determined royalty 

fee to the Copyright Office on a semiannual basis. The ability to 

clear the rights by the use of a compulsory license permits the DBS 

industry to avoid the expense and uncertainty associated with negotiating individual terms and fees with copyright owners in advance of retransmitting each protected work. 

The abrogation of copyright owners’ exclusive rights and the 

elimination of transaction costs for satellite carriers are valuable 

accommodations that benefit the DBS industry. The terms and conditions of § 119, therefore, are crafted to represent a careful balance 

between the interests of satellite carriers who seek to deliver distant broadcast programming to subscribers in a manner that is 

similar to that offered by cable operators, and the need to provide 

copyright owners of the retransmitted broadcast programming fair 

compensation for the use of their works. 

The § 119 license applies to two categories of distant broadcast 

television stations offered by satellite: superstations 9 (i.e. commercial independent over-the-air television broadcast stations), and 

network stations 10 (i.e. commercial television network stations and 

noncommercial educational stations). Satellite carriers calculate 

their royalty payment by multiplying the attendant fee for each 

superstation signal by the number of subscribers who receive that 

10

11 17 U.S.C. § 119(d)(10) generally defines an ‘‘unserved household,’’ with respect to a particular television network, as a household that cannot receive an acceptable over-the-air signal 

of a network affiliate through the use of a conventional, stationary, outdoor rooftop receiving 

antenna. 12The term ‘‘grandfathered subscribers’’ is used to describe a class of individuals to whom 

DBS providers were not lawfully entitled to transmit distant network signals and to whom their 

provider was under a Federal district court order to terminate the transmission of such signals 

after July 11, 1998 but before October 31, 1999. 

signal for each month of the 6-month accounting period, and by 

multiplying the different fee for each network station times the 

number of subscribers who receive that signal for each month of 

the 6-month accounting period.

The flat, per subscriber royalty mechanism in § 119 stands in 

stark contrast to the more complicated percentage of gross receipts 

calculation applied to cable operators in the § 111 license. The cable 

license royalty is based on the application of vestigial distant signal 

carriage rules, which were once used by the FCC. The flat, per subscriber royalty mechanism used to calculate distant signal satellite 

royalties is easier to comprehend, far simpler to calculate, and reduces the time and expense associated with royalty computation. 

The current royalty fees for network station and superstation 

programming were established by a Copyright Arbitration Royalty 

Panel (‘‘CARP’’) in 1997, applying a fair market value standard. In 

other words, the CARP determined what, in the absence of a statutory license, a willing buyer and a willing seller would negotiate as 

the fair market price for all the programming retransmitted on network stations and superstations. The CARP recommended a single 

royalty rate for programming on both network stations and superstations. 

In SHVIA, Congress mandated two separate royalty rates, one 

based on network station retransmissions, the other applying to 

programming on superstations. Congress further required substantial reductions in the CARP-determined rate, applying a statutory 

discount of 45 percent to programming on network stations and a 

discount of 30 percent to superstation programming. In spite of increased costs for program production and the cumulative effects of 

inflation, these royalty rates have been unchanged throughout the 

current extension of § 119. This has eroded the real value of the 

royalties paid under the license, inuring greatly to the benefit of 

the DBS industry. 

As a general rule, the distant signal license permits delivery of 

distant network programming to unserved households 11 only. The 

unserved household limitation prohibits a DBS provider from retransmitting a distant station of the same network to a subscriber 

who can otherwise receive the local network signal through-the-air 

by the use of a conventional rooftop antenna. The license provides 

limited exceptions for recreational vehicles, commercial trucks, Cband dish owners, and a class of subscribers ‘‘grandfathered’’ 12 by 

SHVIA. 

An element of the § 119 license since inception, the unserved 

household limitation has been a central tenet of congressional policy on distant signal carriage. Its primary purpose is to ensure that 

those residing in rural areas or in areas where terrain makes it impossible to receive an acceptable over-the-air signal from their local 

television stations can receive a ‘‘life-line’’ network television service from a satellite provider. 

11

13 17 U.S.C. § 122(j)(2)(A) defines a ‘‘local market’’ as the ‘‘designated market area in which 

a station is located, and—

(i) in the case of a commercial television broadcast station, all commercial television 

broadcast stations licensed to a community within the same designated market area are 

within the same local market . . .’’ 14 17 U.S.C. § 122(j)(2)(C) describes the manner for determining a stations DMA ‘‘as determined by Nielsen Media Research and published in the . . . Nielsen Station Index Directory 

and Nielsen Station Index United States Television Household Estimates or any successor publication. 15The cable license, contained in § 111 of title 17 is often referred to as a ‘‘must carry’’ provision. The satellite local license, contained in § 122 of title 17 is described as ‘‘carry one, carry 

all’’ since the decision to carry local stations in a given local market is permissive on the part 

of DBS operators. 

Where a satellite provider can retransmit a local station’s exclusive network programming but chooses to substitute identical programming from a distant network affiliate of the same network instead, the satellite carrier undermines the value of the license negotiated by the local broadcast station as well as the continued viability of the network-local affiliate relationship. In addition to these 

copyright and contractual concerns, broadcasters contend that the 

long-term interests and short-term welfare of DBS subscribers are 

compromised when they are not able to receive timely local news, 

weather, and emergency information via satellite. 

The Committee has consistently considered market-negotiated 

exclusive arrangements that govern the public performance of 

broadcast programming in a given geographic area to be preferable 

to statutory mandates. Accordingly, a second purpose of the 

unserved household limitation is to confine the abrogation of interests borne by copyright holders and local network broadcasters to 

only those circumstances that are absolutely necessary to provide 

the ‘‘life-line’’ service. 

To ensure that DBS carriers respect the boundaries of the 

unserved household limitation, § 119 requires DBS operators to 

provide television networks with periodic reports that specify the 

identity and number of subscribers who receive network stations 

under the license. The purpose of these requirements is to discourage DBS provision of ‘‘illegal’’ signals to subscribers and avoid costly and protracted litigation between broadcast stations and DBS 

companies. The provision of such signals runs afoul of congressional policy that recognizes the importance of the network-affiliate 

exclusive licensing relationship, which is intended to promote the 

continued production and dissemination of local programming. 

SHVIA created a royalty-free copyright compulsory license that 

allows DBS providers to retransmit local network stations and local 

superstations to their subscribers in a given local market.13 Local 

markets are determined by reference to the stations designated 

market area (‘‘DMA’’).14 The practice of retransmitting this programming to subscribers who reside in the local market of these 

stations is sometimes referred to as ‘‘local-into-local.’’

The terms of this license are contained in § 122 of the Copyright 

Act. In contrast to the cable license, the DBS local license permits, 

but does not require, DBS providers to offer local-into-local service 

in the television markets of their choosing.15 However, once a DBS 

operator elects to retransmit one or more stations in a given market, the carrier must retransmit all eligible local stations in that 

market in a non-discriminatory manner. Despite the fact that these 

local signals are made available to DBS operators on a copyright 

royalty free basis, the typical practice of DBS companies is to 

12

16 Intellectual Property and Communications Omnibus Reform Act of 1999, Appendix I, Title 

I, Pub. L. No. 106–113. 17The text that the Subcommittee reported became the basis for H.R. 4518, which included 

proposed changes to the distant signal license codified in 17 U.S.C. § 119. 18 H.R. 4518 was introduced on June 4, 2004 by the Chairman of the Subcommittee on Courts, 

the Internet, and Intellectual Property, Rep. Smith of Texas, along with Representatives Conyers and Berman and was referred to the Committee on the Judiciary. The bill was based on 

the Committee Print reported by the Subcommittee and incorporated input from all stakeholders. 

charge their subscribers a monthly fee for the receipt of such programming. In sum, § 122, coupled with § 119, enables DBS companies to provide their subscribers with a full complement of broadcast signals in a manner similar to that afforded to cable operators 

under the § 111 statutory license. 

The Committee is concerned by allegations that DBS operators 

have been retransmitting superstation signals to commercial establishments, in violation of § 119, which unambiguously restricts such 

retransmissions to private homes. The Committee encourages all 

affected parties to continue their efforts to reach an amicable resolution of the past liability for these unlawful transmissions and 

strongly recommends that they negotiate reasonable terms, rates, 

and conditions for the prospective availability of a license(s) that 

will permit the DBS industry to retransmit superstation signals to 

non-residential customers, as cable providers are permitted to do 

under current law. 

To further promote competition between the cable and DBS industries, it is recommended that the § 119 license be reauthorized 

for an additional 5 years. The Committee determines this period to 

be appropriate and consistent with prior extensions. Given the ongoing transition of the broadcast television industry from analog 

transmissions to digital, it is in the public interest for Congress to 

reexamine the terms and conditions of the § 119 license in 5 years 

and to make any necessary adjustments at that time. 

HEARINGS

On February 24, 2004, the Committee’s Subcommittee on Courts, 

the Internet and Intellectual Property held an oversight hearing to 

consider SHVIA 16 and its extension. Testimony was received from 

four witnesses, who represented the U.S. Copyright Office, the Motion Picture Association of America, Inc., the Satellite Broadcasting 

Communications Association, and the National Association of 

Broadcasters. Additional materials were submitted by the American Society of Composers, Authors and Publishers, and Broadcast 

Music, Inc., the Association of American Publishers, Inc., and the 

Software & Information Industry Association; and the Association 

of Public Television Stations. 

COMMITTEE CONSIDERATION

On May 6, 2004, the Subcommittee on Courts, the Internet, and 

Intellectual Property met in open session and ordered favorably reported a Committee Print of legislation on this topic, as amended, 

by a voice vote, a quorum being present.17 On July 7, 2004, the 

Committee met in open session and ordered favorably reported the 

bill H.R. 4518,18 with an amendment, by a voice vote, a quorum 

being present. 

13

VOTE OF THE COMMITTEE

In compliance with clause 3(b) of Rule XIII of the Rules of the 

House of Representatives, the Committee notes that there were no 

recorded votes during the consideration of H.R. 4518. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increase tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 4518, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 22, 2004. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4518, the ‘‘Satellite Home 

Viewer Extension Act of 2004.’’

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Melissa E. Zimmerman, 

who can be reached at 226–2860. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN.

Enclosure

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 4518—Satellite Home Viewer Extension and Reauthorization 

Act of 2004. 

SUMMARY

Under current law, satellite television companies pay a monthly 

royalty fee for each subscriber to the Copyright Office (within the 

Library of Congress) for the right to retransmit network and superstation television signals to satellite television subscribers. The 

Copyright Office later distributes these fees to the copyright owners of the retransmitted material. 

14

H.R. 4518 would extend the requirement, set to expire under current law on January 1, 2005, that satellite carriers pay royalty fees 

to the Federal Government through December 31, 2009, and would 

make other changes to current law relating to satellite retransmission of television broadcasting. CBO estimates that enacting the 

bill would increase revenues by $40 million in 2005, $459 million 

over the 2005–2009 period, and $557 million over the 2005–2014 

period. With higher royalty collections, the payments to copyright 

owners (including interest earnings) also would increase, resulting 

in an estimated increase in direct spending of less than $500,000 

in 2005, $48 million over the 2005–2009 period, and $582 million 

over the 2005–2014 period. Thus, the net impact on the Federal 

budget would be a decrease in the deficit of $40 million in 2005 and 

$412 million over the 2005–2009 period, but it would increase the 

deficit by $24 million over the 2005–2014 period. (That net increase 

over the 10-year period reflects the payment of interest in addition 

to amounts collected in royalties.) Implementing the bill would not 

have a significant effect on spending subject to appropriation. 

H.R. 4518 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA) and would not affect 

the budgets of state, local, or tribal governments. 

H.R. 4518 would impose a private-sector mandate as defined in 

UMRA on satellite companies. CBO estimates that the cost of the 

mandate would not exceed the annual threshold for private-sector 

mandates established by UMRA ($120 million in 2004, adjusted annually for inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 4518 is shown in the following table. The costs of this legislation fall within budget function 370 (commerce and housing credit).

By Fiscal Year, in Millions of Dollars 

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

CHANGES IN REVENUES AND DIRECT SPENDING

Estimated Revenues 0 40 91 99 108 121 98 0 0 0 0

Estimated Budget Authority 0 40 94 108 122 140 119 19 15 10 5

Estimated Outlays 0 0 0 0 11 37 71 105 126 129 103

Estimated Net Increase or 

Decrease (–) in the Deficit 

from Changes in Revenue and 

Direct Spending 0 –40 –91 –99 –98 –84 –27 105 126 129 103

BASIS OF ESTIMATE

The bill would increase Federal revenues from copyright royalties. Those fees, plus interest, would then be paid out to copyright 

owners. 

Extension of Copyright Royalty Fees 

H.R. 4518 would extend, through December 31, 2009, the requirement that satellite companies pay royalty fees to owners of 

copyrighted material for retransmitting that material to their subscribers. The bill also would require the Copyright Office to set a 

15

new rate on January 1, 2005, to account for increases in the cost 

of living from 2000 through 2004 and to adjust that rate on January 1st of each year starting in 2007. 

CBO estimates that, taken together, these changes would increase revenues by $40 million in 2005, $459 million over the 

2005–2009 period, and $557 million over the 2005–2014 period. 

With higher royalty collections, the payments to copyright owners 

also would increase. Historical spending patterns indicate that 

copyright holders may receive the fees and interest several years 

after the Copyright Office has collected the revenues. Thus, CBO 

estimates a significant lag between increases in revenue collections 

and higher payments to copyright holders. CBO estimates that increases in direct spending resulting from increases in royalty collections (and interest on those collections) would be negligible for 

the next few years but would total $48 million over the 2005–2009 

period and $582 million over the 2005–2014 period. 

Interest on Copyright Royalties 

H.R. 4518 would result in additional spending because all revenues are eventually paid to copyright holders with interest. Therefore, under the bill, budget authority for spending associated with 

royalty collections would be slightly higher than revenues associated with those collections. 

Satellite Retransmission of Distant and Local Signals 

According to the Federal Communications Commission (FCC), 

about 20 million households subscribe to satellite television service 

in the United States. Under current law, satellite companies are 

permitted to retransmit signals originally broadcast by television 

stations back into the same area where they originated (‘‘local-intolocal’’) for most subscribers and may retransmit signals that originate in a distant market into a local area (‘‘distant-into-local’’) 

under certain circumstances. As a result, some subscribers are eligible to receive both distant-into-local and local-into-local signals. 

Section 103 would require certain satellite subscribers to choose between receiving distant-into-local and local-into-local signals. 

While satellite companies pay royalties for restransmitting distant-into-local signals, they do not pay royalties for retransmitting 

local-into-local signals. Under section 103, satellite companies 

would pay slightly fewer royalties because they would be retransmitting distant-into-local signals to a slightly smaller number 

of subscribers than they would if the current copyright laws were 

extended. 

CBO estimates that enacting section 103 would decrease revenue 

collections by about $1 million over the 2005–2010 period. In addition, payments to copyright owners would decrease, causing a decrease in direct spending of about $1 million from 2005–2014. 

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

H.R. 4518 contains no intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act and would not affect the budgets of state, local, or tribal governments. 

16

ESTIMATED IMPACT ON THE PRIVATE SECTOR

H.R. 4518 would impose a private-sector mandate as defined in 

UMRA on satellite companies. CBO estimates that the cost of the 

mandate would not exceed the annual threshold for private-sector 

mandates established by UMRA ($120 million in 2004, adjusted annually for inflation). 

H.R. 4518 would require satellite companies to submit to television network stations a list of their subscribers that are receiving 

signals of ‘‘significantly viewed’’ stations. The FCC determines 

which over-the-air television broadcast stations are considered significantly viewed stations in a particular community. The satellite 

companies also would be required to submit an updated list monthly. 

PREVIOUS CBO ESTIMATES

On July 8, 2004, CBO transmitted a cost estimate for H.R. 4501, 

the Satellite Home Viewer Extension and Reauthorization Act of 

2004, as ordered reported by the House Committee on Energy and 

Commerce on June 3, 2004. While H.R. 4518 would extend the 

copyright royalty fees, H.R. 4501 would not. The cost estimates for 

the bills reflect this difference. Both bills contain provisions that 

would make similar changes to satellite retransmission of distant 

and local signals, and the cost estimate for those provisions are 

also similar. 

On July 22, 2004, CBO transmitted a cost estimate for S. 2013, 

the Satellite Home Viewer Extension Act of 2004, as ordered reported by the Senate Committee on the Judiciary on June 17, 2004. 

Both S. 2013 and H.R. 4518 would extend the copyright royalty 

fees, but each would increase the rates in a slightly different manner. Both bills contain provisions that would make changes to satellite retransmission of distant and local signals, but S. 2013 would 

affect a smaller number of subscribers. The cost estimates for the 

bills reflect these differences. 

The private-sector mandate on satellite companies in H.R. 4518 

and S. 2013 are similar. H.R. 4501 includes the same mandate 

along with additional ones on satellite companies. The total direct 

costs of mandates contained in each of the bills would fall below 

the annual threshold for private-sector mandates established in 

UMRA. 

ESTIMATE PREPARED BY: 

Federal Costs: Melissa E. Zimmerman (226–2860) 

Impact on State, Local, and Tribal Governments: Sarah Puro (225–

3220) 

Impact on the Private Sector: Jean Talarico (226–2940) 

ESTIMATE APPROVED BY: 

Peter H. Fontaine 

Deputy Assistant Director for Budget Analysis 

PERFORMANCE GOALS AND OBJECTIVES

H.R. 4518 will extend the distant signal license for 5 years and 

make other appropriate laws in this area. The Committee believes 

17

that this will foster continued competition in the MVPD market 

while also ensuring that copyright owners are fairly compensated. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in Article I, section 8 of the Constitution. 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

Because H.R. 4518, the ‘‘Satellite Home Viewer Extension and 

Reauthorization (SHVERA) Act of 2004’’ was reported with an 

amendment in the nature of a substitute, the following discussion 

constitutes an explanation of the bill as reported by the Committee. 

Section 1 of the bill sets forth the title of the Act, the ‘‘Satellite 

Home Viewer Extension and Reauthorization Act of 2004.’’

TITLE I—STATUTORY LICENSE FOR SATELLITE CARRIERS

Sec. 101. Extension of Authority. 

Subsection (a) extends the sunset date for 17 U.S.C. § 119, for an 

additional 5 years. Similarly, subsection (b) extends the existing 

grandfather provision of § 119 for recipients of network signals who 

would not qualify but for the exception provided in SHVIA over the 

past 5 years. 

Sec. 102. Reporting of Subscribers; Significantly Viewed and Other 

Signals; Technical Amendments. 

Section 102 eliminates expired and obsolete provisions from 

SHVIA and the Satellite Home Viewer Act of 1994, including those 

that pertain to the PBS Satellite Feed and a transitional television 

signal strength testing regime that expired in 1996. 

The section also permits satellite carriers to retransmit ‘‘significantly viewed’’ signals to subscribers who receive retransmissions 

of their local signals from their satellite carrier under the § 122 license. ‘‘Significantly viewed’’ signals are television stations that are 

located in adjacent television markets that are received over-the-air 

by a significant number of viewers in the local market but are technically considered to be distant signals. The § 111 cable license permits cable operators to retransmit significantly viewed signals to 

their subscribers royalty-free. Section 102 amends the § 119 license 

to permit satellite carriers to retransmit these signals royalty-free 

to create parity between the two licenses. To be eligible to retransmit significantly viewed signals to subscribers in a local market, satellite carriers must provide initial and monthly lists of subscribers to broadcasters whose signals they carry on a significantly 

viewed basis. 

Section 102 also permits the retransmission, subject to payment 

of applicable copyright royalties, of certain additional television stations on a basis other than local or significantly viewed. These two 

exceptions are for States with a single commercial full-power commercial station and in certain other limited circumstances. 

18

Sec. 103. Statutory License for Satellite Carriers Outside Local 

Markets. 

Section 103 prescribes the conditions under which grandfathered 

subscribers and subscribers residing in unserved households may 

receive network stations under § 119. The section distinguishes between subscribers who live in a local market where retransmission 

of the local stations are being offered by the satellite carrier and 

those subscribers who reside in a local market where such service 

is not currently offered. For a grandfathered subscriber who receives distant network stations on the date of enactment of the bill 

and resides in a local market where local stations are being offered 

by the satellite carrier, the subscriber may continue to receive distant network signals if 1) the subscriber elects to retain the distant 

network signals within 60 days of notification from the satellite 

carrier of an offer of local service, and 2) the subscriber declines receipt of the local network signals. Once the subscriber elects to receive local signals, the distant network signals may not be provided 

under § 119. In addition, to continue retransmission of distant network signals to a subscriber who does not receive local signals, the 

satellite carrier must submit a list to each television network retransmitted that asserts the subscriber is a grandfathered subscriber and eligible to receive what is otherwise impermissible distant network service. If the subscriber did not actually receive service of distant network signals on July 1, 2004, they are no longer 

considered to be grandfathered and shall not qualify for the receipt 

of distant network stations as a grandfathered subscriber after that 

date. 

For a subscriber who resides in an unserved household (i.e. is not 

a grandfathered subscriber) located in a local market where the 

satellite carrier offers local signals on January 1, 2005, the subscriber may continue to receive distant network signals only if the 

satellite carrier submits a list to the networks that identifies such 

subscribers within 60 days of that date. For a subscriber who resides in an unserved household located in a local market where the 

satellite carrier does not offer local signals on January 1, 2005, the 

subscriber may 1) continue to receive distant networks signals 

under § 119 until such time as the subscriber elects local signals 

from the carrier, or 2) may sign up for service of distant network 

signals until such time as the local signals are made available and 

the subscriber elects the local signals. 

Finally, persons who reside in a local market where local signals 

are made available by their satellite carrier, but who have not 

sought distant network service from their satellite carrier, shall be 

ineligible to receive such service under § 119. 

Section 103 also contains provisions that relate to the royalty 

fees due satellite carriers under the § 119 license. Unless superseded by private agreements, the section requires the convening of 

a CARP in 2005 to establish fair market value rates for network 

stations and superstations. Identical to Congress’s action in enacting the SHVIA in 1999, the rates determined by the CARP, and approved by the Librarian of Congress, will again be reduced by 45 

percent for network stations and 30 percent for superstations. 

While the CARP proceeding is pending, the current § 119 royalty 

rates will be adjusted for changes in the cost of living over the last 

5 years, as determined by the Consumer Price Index (‘‘CPI’’). BeVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660
19

ginning in 2007, the Librarian of Congress will adjust rates annually to account for changes in the cost of living, as determined by 

the CPI, over the preceding year for the remainder of the license 

(2007, 2008, and 2009). 

Sec. 104. Waivers. 

Section 104 creates a waiver process for subscribers who are not 

eligible to receive distant network signals under the provisions contained in § 103 of the bill, and for subscribers who are not eligible 

to receive significantly viewed network and superstation signals because their satellite carrier does not offer service of local signals 

under § 122 of the Copyright Act. A subscriber may seek a waiver 

through his/her satellite carrier from the local broadcaster. The 

waiver is considered granted unless the broadcaster acts within 30 

days of receipt to reject the request. The § 104 waiver provision 

does not apply to waivers from the unserved household restriction 

in § 119, which are governed by § 339(c)(2) of the Communications 

Act. 

Sec. 105. Study. 

Section 105 requires the Copyright Office to conduct a study of 

the § 119 and § 122 licenses for satellite, and the § 111 license for 

cable, and to make recommendations for improvements to the Committee and the Senate Committee on the Judiciary no later than 

June 30, 2008. The Office will analyze the differences among the 

three licenses and consider whether they should be eliminated, 

changed, or maintained with the goal of harmonizing their operation. 

Sec. 106. Effect on Certain Proceedings. 

Section 106 clarifies that nothing in the bill is intended to modify 

any remedy imposed on a party pursuant to litigation brought 

under § 119 prior to May 1, 2004. 

Sec. 107. Expedited Consideration of Voluntary Agreements to Provide Satellite Secondary Transmissions to Local Markets. 

Section 107 requires the Department of Justice to respond within 

90 days of receipt of a business review letter from two or more satellite carriers that proposes to make or carry out an agreement to 

provide local-into-local retransmissions under 17 U.S.C. § 122 (j)(2), 

into a specific local market or markets where no satellite carrier 

has made available retransmissions under the § 122 license. By ensuring satellite carriers will receive a timely response addressing 

whether proposed business conduct violates the antitrust laws, 

§ 107 is intended to provide an additional tool to facilitate the 

availability of local-into-local retransmissions in small and rural 

television markets. The Committee intends for this authority to be 

used only for the limited purpose of ensuring timely consideration 

of agreements that relate solely to the delivery of local signals. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00019 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660
20

ted is enclosed in black brackets, new matter is printed in italics, 

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

SECTION 4 OF THE SATELLITE HOME VIEWER ACT OF 

1994

SEC. 4. TERMINATION. 

(a) EXPIRATION OF AMENDMENTS.—Section 119 of title 17, 

United States Code, as amended by section 2 of this Act, ceases to 

be effective on December 31, ø2004¿ 2009. 

* * * * * * *

SECTION 119 OF TITLE 17, UNITED STATES CODE

§ 119. Limitations on exclusive rights: Secondary transmissions of superstations and network stations for 

private home viewing 

(a) SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS.— (1) SUPERSTATIONS øAND PBS SATELLITE FEED¿.—Subject to 

the provisions of paragraphs ø(3), (4), and (6)¿ (5), (6), and (8)

of this subsection and section 114(d), secondary transmissions 

of a performance or display of a work embodied in a primary 

transmission made by a superstation øor by the Public Broadcasting Service satellite feed¿ shall be subject to statutory licensing under this section if the secondary transmission is 

made by a satellite carrier to the public for private home viewing, with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, or authorizations of the Federal Communications Commission governing 

the carriage of television broadcast station signals, and the carrier makes a direct or indirect charge for each retransmission 

service to each household receiving the secondary transmission 

or to a distributor that has contracted with the carrier for direct or indirect delivery of the secondary transmission to the 

public for private home viewing. øIn the case of the Public 

Broadcasting Service satellite feed, the statutory license shall 

be effective until January 1, 2002.¿

(2) NETWORK STATIONS.— (A) IN GENERAL.—Subject to the provisions of subparagraphs (B) and (C) of this paragraph and paragraphs ø(3), 

(4), (5), and (6)¿ (5), (6), (7), and (8) of this subsection and 

section 114(d), secondary transmissions of a performance 

or display of a work embodied in a primary transmission 

made by a network station shall be subject to statutory licensing under this section if the secondary transmission is 

made by a satellite carrier to the public for private home 

viewing, with regard to secondary transmissions the satellite carrier is in compliance with the rules, regulations, 

or authorizations of the Federal Communications Commission governing the carriage of television broadcast station 

signals, and the carrier makes a direct or indirect charge 

21

for such retransmission service to each subscriber receiving the secondary transmission. 

(B) SECONDARY TRANSMISSIONS TO UNSERVED HOUSE- HOLDS.—(i) IN GENERAL.—The statutory license provided 

for in subparagraph (A) shall be limited to secondary 

transmissions of the signals of no more than two network stations in a single day for each television network to persons who reside in unserved households. 

The limitation in this clause shall not apply to secondary transmissions under paragraph (3).

* * * * * * *

ø(C) SUBMISSION OF SUBSCRIBER LISTS TO NETWORKS.— A satellite carrier that makes secondary transmissions of 

a primary transmission made by a network station pursuant to subparagraph (A) shall, 90 days after commencing 

such secondary transmissions, submit xto the network that 

owns or is affiliated with the network station a list identifying (by name and street address, including county and 

zip code) all subscribers to which the satellite carrier 

makes secondary transmissions of that primary transmission. Thereafter, on the 15th of each month, the satellite carrier shall submit to the network a list identifying 

(by name and street address, including county and zip 

code) any persons who have been added or dropped as such 

subscribers since the last submission under this subparagraph. Such subscriber information submitted by a satellite carrier may be used only for purposes of monitoring 

compliance by the satellite carrier with this subsection. 

The submission requirements of this subparagraph shall 

apply to a satellite carrier only if the network to whom the 

submissions are to be made places on file with the Register 

of Copyrights a document identifying the name and address of the person to whom such submissions are to be 

made. The Register shall maintain for public inspection a 

file of all such documents.¿

(C) EXCEPTIONS.— (i) STATES WITH SINGLE FULL-POWER NETWORK

STATION.—In a State in which there is licensed by the 

Federal Communications Commission a single fullpower station that was a network station on January 

1, 1995, the statutory license provided for in subparagraph (A) shall apply to the secondary transmission by 

a satellite carrier of the signal of that station to any 

subscriber in a community that is located within that 

State and that is not within the first 50 television markets as listed in the regulations of the Commission as 

in effect on such date (47 CFR 76.51). 

(ii) CERTAIN ADDITIONAL STATIONS.—The statutory 

license provided for in subparagraph (A) shall apply to 

the secondary transmission, by a satellite carrier to 

subscribers in no more than two counties in a State 

that are in local market principally comprised of counties in another State, of the signals of any network station located in the capital of the State in which such 

22

counties are located, if the total number of television 

households in the two counties combined did not exceed 

10,000 for the year 2003 according to Nielsen Media 

Research. 

(D) SUBMISSION OF SUBSCRIBER LISTS TO NETWORKS.— (i) INITIAL LISTS.—A satellite carrier that makes 

secondary transmissions of a primary transmission 

made by a network station pursuant to subparagraph 

(A) shall, 90 days after commencing such secondary 

transmissions, submit to the network that owns or is 

affiliated with the network station—

(I) a list identifying (by name and street address, including county and zip code) all subscribers to which the satellite carrier makes secondary transmissions of that primary transmission 

to subscribers in unserved households; and 

(II) a separate list, aggregated by designated 

market area (as defined in section 122(j)) (by name 

and street address, including county and zip code), 

which shall indicate those subscribers being served 

pursuant to subsection (a)(3), relating to significantly viewed stations. 

(ii) MONTHLY LISTS.—After the submission of the 

initial lists under clause (i), on the 15th of each month, 

the satellite carrier shall submit to the network—

(I) a list identifying (by name and street address, including county and zip code) any persons 

who have been added or dropped as subscribers 

under clause (i)(I) since the last submission under 

clause (i); and 

(II) a separate list, aggregated by designated 

market area (by name and street address, including county and zip code), identifying those subscribers whose service pursuant to subsection 

(a)(3), relating to significantly viewed stations, has 

been added or dropped. 

(iii) USE OF SUBSCRIBER INFORMATION.—Subscriber information submitted by a satellite carrier 

under this subparagraph may be used only for purposes of monitoring compliance by the satellite carrier 

with this subsection. 

(iv) APPLICABILITY.—The submission requirements 

of this subparagraph shall apply to a satellite carrier 

only if the network to whom the submissions are to be 

made places on file with the Register of Copyrights a 

document identifying the name and address of the person to whom such submissions are to be made. The 

Register shall maintain for public inspection a file of 

all such documents. 

(3) SECONDARY TRANSMISSIONS OF SIGNIFICANTLY VIEWED

SIGNALS.—

(A) IN GENERAL.—Notwithstanding the provisions of 

paragraph (2)(B), and subject to subparagraph (B) of this 

paragraph, the statutory license provided for in paragraphs 

(1) and (2) shall apply to the secondary transmission of the 

23

signal of a network station or a superstation to a subscriber 

who resides outside the station’s local market (as defined in 

section 122(j)) but within a community in which the signal 

of that station was determined by the Federal Communications Commission, on or before the date of the enactment of 

the Satellite Home Viewer Extension and Reauthorization 

Act of 2004, to be significantly viewed in accordance with 

the provisions of section 76.54 of title 47, Code of Federal 

Regulations, as in effect on such date of enactment. 

(B) LIMITATION.—Subparagraph (A) shall apply only to 

secondary transmissions of network stations and superstations to subscribers who receive secondary transmissions 

from a satellite carrier pursuant to the statutory license 

under section 122. 

(4) STATUTORY LICENSE WHERE RETRANSMISSIONS INTO

LOCAL MARKET AVAILABLE.—

(A) RULES FOR SUBSCRIBERS UNDER SUBSECTION (e).—

(i) FOR THOSE RECEIVING DISTANT SIGNALS.—In 

the case of a subscriber of a satellite carrier who is eligible to receive the signal of a network station solely by 

reason of subsection (e) (in this subparagraph referred 

to as a ‘‘distant signal’’), and who is receiving the distant signal of a network station on the date of the enactment of the Satellite Home Viewer Extension and 

Reauthorization Act of 2004, the following shall apply: 

(I) In a case in which the signal of a local network station affiliated with the same television 

network is made available by that satellite carrier 

to the subscriber pursuant to the statutory license 

under section 122, the statutory license under 

paragraph (2) shall apply only to secondary transmissions by that satellite carrier to that subscriber 

of the distant signal of a station affiliated with the 

same television network—

(aa) if, within 60 days after receiving the 

notice of the satellite carrier under section 

338(h) of the Communications Act of 1934, the 

subscriber elects to retain the distant signal; 

but 

(bb) only until such time as the subscriber 

elects to receive such local signal. 

(II) Notwithstanding subclause (I), the statutory license under paragraph (2) shall not apply 

with respect to any subscriber who is eligible to receive the distant signal of a television network station solely by reason of subsection (e) and to whom 

subclause (I) applies unless the satellite carrier, 

within 60 days after the date of the enactment of 

the Satellite Home Viewer Extension and Reauthorization Act of 2004, submits to that television 

network a list, aggregated by designated market 

area (as defined in section 122(j)(2)(C)), that—

(aa) identifies that subscriber by name 

and address (street or RFD number, city, 

24

State, and zip code) and specifies the distant 

signals received by the subscriber; and 

(bb) states, to the best of the satellite carrier’s knowledge and belief, after having made 

diligent and good faith inquiries, that the subscriber is eligible under subsection (e) to receive the distant signals. 

(ii) FOR THOSE NOT RECEIVING DISTANT SIGNALS.— In the case of any subscriber of a satellite carrier who 

is eligible to receive the distant signal of a network station solely by reason of subsection (e) and who did not 

receive a distant signal of a station affiliated with the 

same network on July 1, 2004, the statutory license 

under paragraph (2) shall not apply to secondary 

transmissions by that satellite carrier to that subscriber of that distant signal. 

(B) RULES FOR OTHER SUBSCRIBERS.—In the case of a 

subscriber of a satellite carrier who is eligible to receive the 

signal of a network station under the statutory license 

under paragraph (2) (in this subparagraph referred to as 

a ‘‘distant signal’’), other than subscribers to whom subparagraph (A) applies, the following shall apply: 

(i) In a case in which the signal of a local network 

station affiliated with the same television network is 

made available by that satellite carrier, on January 1, 

2005, to the subscriber pursuant to the statutory license 

under section 122, the statutory license under paragraph (2) shall apply only to secondary transmissions 

by that satellite carrier to that subscriber of the distant 

signal of a station affiliated with the same television 

network if the subscriber’s satellite carrier, within 60 

days after such date, submits to that television network 

a list, aggregated by designated market area (as defined in section 122(j)(2)(C)), that identifies that subscriber by name and address (street or RFD number, 

city, State, and zip code) and specifies the distant signals received by the subscriber. 

(ii) In a case in which the signal of a local network 

station affiliated with the same television network is 

not made available by that satellite carrier, on January 1, 2005, to a subscriber pursuant to the statutory 

license under section 122, the statutory license under 

paragraph (2) shall apply only to secondary transmissions by that satellite carrier of the distant signal 

of a station affiliated with the same network to any 

person—

(I) who is a subscriber of that satellite carrier 

on such date, or 

(II) who becomes a subscriber of that satellite 

carrier after such date but before the local signal 

is available, 

but only until such time as the subscriber elects to receive the local signal from that satellite carrier. 

(C) FUTURE APPLICABILITY.—The statutory license 

under paragraph (2) shall not apply to the secondary transVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6603 E:\HR\OC\HR660.XXX HR660
25

mission by a satellite carrier of a primary transmission of 

a network station to a subscriber who—

(i) does not receive such secondary transmission as 

of the date of the enactment of the Satellite Home 

Viewer Extension and Reauthorization Act of 2004; 

and 

(ii) resides in a local market where the satellite 

carrier makes available a network station affiliated 

with the same television network pursuant to the statutory license under section 122. 

(D) OTHER PROVISIONS NOT AFFECTED.—This paragraph shall not affect the applicability of the statutory license to secondary transmissions under paragraph (3) or to 

unserved households included under paragraph (12). 

(E) AVAILABLE DEFINED.—For purposes of this paragraph, a local signal has been made available by a satellite 

carrier to a subscriber or person if the satellite carrier offers that local signal to other subscribers who reside in the 

same zipcode as that subscriber or person.

ø(3)¿ (5) NONCOMPLIANCE WITH REPORTING AND PAYMENT

REQUIREMENTS.—Notwithstanding the provisions of paragraphs 

(1) and (2), the willful or repeated secondary transmission to 

the public by a satellite carrier of a primary transmission 

made by a superstation or a network station 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, where the 

satellite carrier has not deposited the statement of account and 

royalty fee required by subsection (b), or has failed to make the 

submissions to networks required by paragraph (2)(C). 

ø(4)¿ (6) WILLFUL ALTERATIONS.—Notwithstanding the provisions of paragraphs (1) and (2), the secondary transmission 

to the public by a satellite carrier of a performance or display 

of a work embodied in a primary transmission made by a 

superstation or a network station 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 announcement transmitted by the primary 

transmitter during, or immediately before or after, the transmission of such program, is in any way willfully altered by the 

satellite carrier through changes, deletions, or additions, or is 

combined with programming from any other broadcast signal. 

ø(5)¿ (7) VIOLATION OF TERRITORIAL RESTRICTIONS ON STATUTORY LICENSE FOR NETWORK STATIONS.—

(A) INDIVIDUAL VIOLATIONS.—The willful or repeated 

secondary transmission by a satellite carrier of a primary 

transmission made by a network station and embodying a 

performance or display of a work to a subscriber øwho does 

not reside in an unserved household¿ who is not eligible to 

receive the transmission under this section 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—

26

(i) * * *

* * * * * * *

(B) PATTERN OF VIOLATIONS.—If a satellite carrier engages in a willful or repeated pattern or practice of delivering a primary transmission made by a network station 

and embodying a performance or display of a work to subscribers øwho do not reside in unserved households¿ who 

are not eligible to receive the transmission under this section, then in addition to the remedies set forth in subparagraph (A)—

(i) * * *

* * * * * * *

(D) BURDEN OF PROOF.—In any action brought under 

this paragraph, the satellite carrier shall have the burden 

of proving that its secondary transmission of a primary 

transmission by a network station øis for private home 

viewing to an unserved household¿ is to a subscriber who 

is eligible to receive the transmission under this section. 

* * * * * * *

ø(6)¿ (8) DISCRIMINATION BY A SATELLITE CARRIER.—Notwithstanding the provisions of paragraph (1), the willful or repeated secondary transmission to the public by a satellite carrier of a performance or display of a work embodied in a primary transmission made by a superstation or a network station 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 satellite carrier unlawfully discriminates against a distributor. 

ø(7)¿ (9) GEOGRAPHIC LIMITATION ON SECONDARY TRANSMISSIONS.—The statutory license created by this section shall 

apply only to secondary transmissions to households located in 

the United States. 

ø(8) TRANSITIONAL SIGNAL INTENSITY MEASUREMENT PROCEDURES.—

ø(A) IN GENERAL.—Subject to subparagraph (C), upon 

a challenge by a network station regarding whether a subscriber is an unserved household within the predicted 

Grade B Contour of the station, the satellite carrier shall, 

within 60 days after the receipt of the challenge—

ø(i) terminate service to that household of the signal that is the subject of the challenge, and within 30 

days thereafter notify the network station that made 

the challenge that service to that household has been 

terminated; or 

ø(ii) conduct a measurement of the signal intensity of the subscriber’s household to determine whether the household is an unserved household after giving 

reasonable notice to the network station of the satellite carrier’s intent to conduct the measurement. 

ø(B) EFFECT OF MEASUREMENT.—If the satellite carrier 

conducts a signal intensity measurement under subparagraph (A) and the measurement indicates that—

27

ø(i) the household is not an unserved household, 

the satellite carrier shall, within 60 days after the 

measurement is conducted, terminate the service to 

that household of the signal that is the subject of the 

challenge, and within 30 days thereafter notify the 

network station that made the challenge that service 

to that household has been terminated; or 

ø(ii) the household is an unserved household, the 

station challenging the service shall reimburse the 

satellite carrier for the costs of the signal measurement within 60 days after receipt of the measurement 

results and a statement of the costs of the measurement. 

ø(C) LIMITATION ON MEASUREMENTS.—(i) Notwithstanding subparagraph (A), a satellite carrier may not be 

required to conduct signal intensity measurements during 

any calendar year in excess of 5 percent of the number of 

subscribers within the network station’s local market that 

have subscribed to the service as of the effective date of 

the Satellite Home Viewer Act of 1994. 

ø(ii) If a network station challenges whether a subscriber is an unserved household in excess of 5 percent of 

the subscribers within the network station’s local market 

within a calendar year, subparagraph (A) shall not apply 

to challenges in excess of such 5 percent, but the station 

may conduct its own signal intensity measurement of the 

subscriber’s household after giving reasonable notice to the 

satellite carrier of the network station’s intent to conduct 

the measurement. If such measurement indicates that the 

household is not an unserved household, the carrier shall, 

within 60 days after receipt of the measurement, terminate service to the household of the signal that is the subject of the challenge and within 30 days thereafter notify 

the network station that made the challenge that service 

has been terminated. The carrier shall also, within 60 days 

after receipt of the measurement and a statement of the 

costs of the measurement, reimburse the network station 

for the cost it incurred in conducting the measurement. 

ø(D) OUTSIDE THE PREDICTED GRADE B CONTOUR.—(i) 

If a network station challenges whether a subscriber is an 

unserved household outside the predicted Grade B Contour 

of the station, the station may conduct a measurement of 

the signal intensity of the subscriber’s household to determine whether the household is an unserved household 

after giving reasonable notice to the satellite carrier of the 

network station’s intent to conduct the measurement. 

ø(ii) If the network station conducts a signal intensity 

measurement under clause (i) and the measurement indicates that—

ø(I) the household is not an unserved household, 

the station shall forward the results to the satellite 

carrier who shall, within 60 days after receipt of the 

measurement, terminate the service to the household 

of the signal that is the subject of the challenge, and 

shall reimburse the station for the costs of the measVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660
28

urement within 60 days after receipt of the measurement results and a statement of such costs; or 

ø(II) the household is an unserved household, the 

station shall pay the costs of the measurement.¿

ø(9)¿ (10) LOSER PAYS FOR SIGNAL INTENSITY MEASURE- MENT; RECOVERY OF MEASUREMENT COSTS IN A CIVIL ACTION.— In any civil action filed relating to the eligibility of subscribing 

households as unserved households—

(A) * * *

* * * * * * *

ø(10)¿ (11) INABILITY TO CONDUCT MEASUREMENT.—If a 

network station makes a reasonable attempt to conduct a site 

measurement of its signal at a subscriber’s household and is 

denied access for the purpose of conducting the measurement, 

and is otherwise unable to conduct a measurement, the satellite carrier shall within 60 days notice thereof, terminate 

service of the station’s network to that household. 

ø(11)¿ (12) SERVICE TO RECREATIONAL VEHICLES AND COM- MERCIAL TRUCKS.— (A) * * *

* * * * * * *

ø(12)¿ (13) STATUTORY LICENSE CONTINGENT ON COMPLI- ANCE WITH FCC RULES AND REMEDIAL STEPS.—Notwithstanding 

any other provision of this section, the willful or repeated secondary transmission to the public by a satellite carrier of a primary transmission embodying a performance or display of a 

work made by a broadcast station licensed by the Federal Communications Commission 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, at the time 

of such transmission, the satellite carrier is not in compliance 

with the rules, regulations, and authorizations of the Federal 

Communications Commission concerning the carriage of television broadcast station signals.

(14) WAIVERS.—A subscriber who is denied the secondary 

transmission of a network station under paragraph (4)(C), or is 

denied the secondary transmission of a network station or a 

superstation under paragraph (3)(B), may request a waiver 

from such denial by submitting a request, through the subscriber’s satellite carrier, to the network station or superstation 

in the local market where the subscriber is located. The network 

station or superstation shall accept or reject the subscriber’s request for a waiver within 30 days after receipt of the request. 

If the network station or superstation fails to accept or reject the 

subscriber’s request for a waiver within that 30-day period, that 

network station or superstation, as the case may be, shall be 

deemed to agree to the waiver request. Unless specifically stated 

by the network station or superstation, a waiver under section 

339(c)(2) of the Communications Act shall not constitute a 

waiver for purposes of this paragraph.

(b) STATUTORY LICENSE FOR SECONDARY TRANSMISSIONS FOR

PRIVATE HOME VIEWING.—

(1) DEPOSITS WITH THE REGISTER OF COPYRIGHTS.—A satellite carrier whose secondary transmissions are subject to 

29

statutory licensing under subsection (a) shall, on a semiannual 

basis, deposit with the Register of Copyrights, in accordance 

with requirements that the Register shall prescribe by regulation—

(A) * * *

ø(B) a royalty fee for that 6-month period, computed 

by—

ø(i) multiplying the total number of subscribers 

receiving each secondary transmission of a superstation during each calendar month by 17.5 cents per 

subscriber in the case of superstations that as retransmitted by the satellite carrier include any program 

which, if delivered by any cable system in the United 

States, would be subject to the syndicated exclusivity 

rules of the Federal Communications Commission, and 

14 cents per subscriber in the case of superstations 

that are syndex-proof as defined in section 258.2 of 

title 37, Code of Federal Regulations; 

ø(ii) multiplying the number of subscribers receiving each secondary transmission of a network station 

or the Public Broadcasting Service satellite feed during each calendar month by 6 cents; and 

ø(iii) adding together the totals computed under 

clauses (i) and (ii).¿

(B) a royalty fee for that 6-month period, computed by 

multiplying the total number of subscribers receiving each 

secondary transmission of each superstation or network station during each calendar month by the appropriate rate in 

effect under this section. 

Notwithstanding the provisions of subparagraph (B), a satellite 

carrier whose secondary transmissions are subject to statutory 

licensing under paragraph (1) or (2) of subsection (a) shall have 

no royalty obligation for secondary transmissions to a subscriber who resides outside the station’s local market (as defined in section 122(j)(2)) but within a community in which the 

signal of that station was determined by the Federal Communications Commission, on or before the date of the enactment of 

the Satellite Home Viewer Extension and Reauthorization Act of 

2004, to be significantly viewed in accordance with the provisions of section 76.54 of title 47, Code of Federal Regulations, 

as in effect on such date of enactment.

* * * * * * *

(c) ADJUSTMENT OF ROYALTY FEES.— ø(1) APPLICABILITY AND DETERMINATION OF ROYALTY

FEES.—The rate of the royalty fee payable under subsection 

(b)(1)(B) shall be effective unless a royalty fee is established 

under paragraph (2) or (3) of this subsection. 

ø(2) FEE SET BY VOLUNTARY NEGOTIATION.—

ø(A) NOTICE OF INITIATION OF PROCEEDINGS.—On or 

before July 1, 1996, the Librarian of Congress shall cause 

notice to be published in the Federal Register of the initiation of voluntary negotiation proceedings for the purpose 

of determining the royalty fee to be paid by satellite carriers under subsection (b)(1)(B). 

30

ø(B) NEGOTIATIONS.—Satellite carriers, distributors, 

and copyright owners entitled to royalty fees under this 

section shall negotiate in good faith in an effort to reach 

a voluntary agreement or voluntary agreements for the 

payment of royalty fees. Any such satellite carriers, distributors, and copyright owners may at any time negotiate 

and agree to the royalty fee, and may designate common 

agents to negotiate, agree to, or pay such fees. If the parties fail to identify common agents, the Librarian of Congress shall do so, after requesting recommendations from 

the parties to the negotiation proceeding. The parties to 

each negotiation proceeding shall bear the entire cost 

thereof. 

ø(C) AGREEMENTS BINDING ON PARTIES; FILING OF

AGREEMENTS.—Voluntary agreements negotiated at any 

time in accordance with this paragraph shall be binding 

upon all satellite carriers, distributors, and copyright owners that are parties thereto. Copies of such agreements 

shall be filed with the Copyright Office within 30 days 

after execution in accordance with regulations that the 

Register of Copyrights shall prescribe. 

ø(D) PERIOD AGREEMENT IS IN EFFECT.—The obligation 

to pay the royalty fees established under a voluntary 

agreement which has been filed with the Copyright Office 

in accordance with this paragraph shall become effective 

on the date specified in the agreement, and shall remain 

in effect until December 31, 1999, or in accordance with 

the terms of the agreement, whichever is later.¿

(1) APPLICABILITY AND DETERMINATION OF ROYALTY FEES.—

The appropriate rate for purposes of determining the royalty fee 

under subsection (b)(1)(B) shall be the appropriate rate set forth 

in part 258 of title 37, Code of Federal Regulations, as in effect 

on the date of the enactment of the Satellite Home Viewer Extension and Reauthorization Act of 2004, as modified under 

this subsection.

ø(3)¿ (2) FEE SET BY COMPULSORY ARBITRATION.—

(A) NOTICE OF INITIATION OF PROCEEDINGS.—On or before January 1, ø1997¿ 2005, the Librarian of Congress 

shall cause notice to be published in the Federal Register 

of the initiation of arbitration proceedings for the purpose 

of determining a reasonable royalty fee to be paid under 

subsection (b)(1)(B) by satellite carriers øwho are not parties to a voluntary agreement filed with the Copyright Office in accordance with paragraph (2)¿. Such arbitration 

proceeding shall be conducted under chapter 8. 

* * * * * * *

(C) PERIOD DURING WHICH DECISION OF ARBITRATION

PANEL OR ORDER OF LIBRARIAN EFFECTIVE.—The obligation 

to pay the royalty fee established under a determination 

which—

(i) * * *

* * * * * * *

shall become effective øas provided in section 802(g) or 

July 1, 1997, whichever is later¿ on January 1, 2006. 

31

ø(D) PERSONS SUBJECT TO ROYALTY FEE.—The royalty 

fee referred to in subparagraph (C) shall be binding on all 

satellite carriers, distributors, and copyright owners, who 

are not party to a voluntary agreement filed with the 

Copyright Office under paragraph (2). 

ø(4) REDUCTION.— ø(A) SUPERSTATION.—The rate of the royalty fee in effect on January 1, 1998, payable in each case under subsection (b)(1)(B)(i) shall be reduced by 30 percent. 

ø(B) NETWORK AND PUBLIC BROADCASTING SATELLITE

FEED.—The rate of the royalty fee in effect on January 1, 

1998, payable under subsection (b)(1)(B)(ii) shall be reduced by 45 percent. 

ø(5) PUBLIC BROADCASTING SERVICE AS AGENT.—For purposes of section 802, with respect to royalty fees paid by satellite carriers for retransmitting the Public Broadcasting Service satellite feed, the Public Broadcasting Service shall be the 

agent for all public television copyright claimants and all Public Broadcasting Service member stations.¿

(3) COST OF LIVING ADJUSTMENT.—The royalty rates set 

forth in subsection (b)(1)(B), as adjusted under paragraph (2) 

of this subsection, shall be adjusted by the Librarian of Congress—

(A) on January 1, 2005, to reflect any changes occurring during the period beginning on January 1, 2000, and 

ending on November 30, 2004, in the cost of living as determined by the most recent Consumer Price Index (for all 

consumers and items) published by the Secretary of Labor 

during that period; and 

(B) on January 1, 2007, and on January 1 of each year 

thereafter, to reflect any changes occurring during the preceding 12 months in the cost of living as determined by the 

most recent Consumer Price Index so published. 

(4) REDUCTIONS.—The rate of the royalty fee determined 

under paragraph (2)—

(A) for superstations shall be reduced by 30 percent; 

and 

(B) for network stations shall be reduced by 45 percent.

(d) DEFINITIONS.—As used in this section—

(1) * * *

* * * * * * *

ø(9) SUPERSTATION.—The term ‘‘superstation’’—

ø(A) means a television broadcast station, other than 

a network station, licensed by the Federal Communications Commission that is secondarily transmitted by a satellite carrier; and 

ø(B) except for purposes of computing the royalty fee, 

includes the Public Broadcasting Service satellite feed.¿

(9) SUPERSTATION.—The term ‘‘superstation’’ means a television broadcast station, other than a network station, licensed 

by the Federal Communications Commission that is secondarily 

transmitted by a satellite carrier.

(10) UNSERVED HOUSEHOLD.—The term ‘‘unserved household’’, with respect to a particular television network, means a 

household that—

32

(A) * * *

* * * * * * *

(D) is a subscriber to whom subsection ø(a)(11)¿

(a)(12) applies; or 

* * * * * * *

ø(12) PUBLIC BROADCASTING SERVICE SATELLITE FEED.—

The term ‘‘Public Broadcasting Service satellite feed’’ means 

the national satellite feed distributed and designated for purposes of this section by the Public Broadcasting Service consisting of educational and informational programming intended 

for private home viewing, to which the Public Broadcasting 

Service holds national terrestrial broadcast rights.¿

(e) MORATORIUM ON COPYRIGHT LIABILITY.—Until December 

31, ø2004¿ 2009, a subscriber who does not receive a signal of 

Grade A intensity (as defined in the regulations of the Federal 

Communications Commission under section 73.683(a) of title 47 of 

the Code of Federal Regulations, as in effect on January 1, 1999, 

or predicted by the Federal Communications Commission using the 

Individual Location Longley-Rice methodology described by the 

Federal Communications Commission in Docket No. 98–201) of a 

local network television broadcast station shall remain eligible to 

receive signals of network stations affiliated with the same network, if that subscriber had satellite service of such network signal 

terminated after July 11, 1998, and before October 31, 1999, as required by this section, or received such service on October 31, 1999.

(f) EXPEDITED CONSIDERATION BY JUSTICE DEPARTMENT OF

VOLUNTARY AGREEMENTS TO PROVIDE SATELLITE SECONDARY

TRANSMISSIONS TO LOCAL MARKETS.—

(1) IN GENERAL.—In a case in which no satellite carrier 

makes available, to subscribers located in a local market, as defined in section 122(j)(2), the secondary transmission into that 

market of a primary transmission of one or more television 

broadcast stations licensed by the Federal Communications 

Commission, and two or more satellite carriers request a business review letter in accordance with section 50.6 of title 28, 

Code of Federal Regulations (as in effect on July 7, 2004), in 

order to assess the legality under the antitrust laws of proposed 

business conduct to make or carry out an agreement to provide 

such secondary transmission into such local market, the appropriate official of the Department of Justice shall respond to the 

request no later than 90 days after the date on which the request is received. 

(2) DEFINITION.—For purposes of this subsection, the term 

‘‘antitrust laws’’—

(A) has the meaning given that term in subsection (a) 

of the first section of the Clayton Act (15 U.S.C. 12(a)), except that such term includes section 5 of the Federal Trade 

Commission Act (15 U.S.C. 45) to the extent such section 5 

applies to unfair methods of competition; and 

(B) includes any State law similar to the laws referred 

to in paragraph (1).

33

MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, JULY 7, 2004

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:03 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the committee] presiding. 

Chairman SENSENBRENNER. The committee will be in order. 

[Intervening business.] 

Chairman SENSENBRENNER. Now, pursuant to notice, I call up 

the bill H.R. 4518, the ‘‘Satellite Home Viewer Extension and Reauthorization Act of 2004’’, for purposes of markup and move its favorable recommendation to the House. Without objection, the bill 

will be considered as read and open for amendment at any point. 

[The bill, H.R. 4518, follows:]

34

1

I

108TH CONGRESS

2D SESSION H. R. 4518

To extend the statutory license for secondary transmissions under section

119 of title 17, United States Code.

IN THE HOUSE OF REPRESENTATIVES

JUNE 4, 2004

Mr. SMITH of Texas (for himself, Mr. CONYERS, and Mr. BERMAN) introduced

the following bill; which was referred to the Committee on the Judiciary

A BILL

To extend the statutory license for secondary transmissions

under section 119 of title 17, United States Code.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Satellite Home Viewer Extension and Reauthorization

6 Act of 2004’’.

7 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

TITLE I—STATUTORY LICENSE FOR SATELLITE CARRIERS

Sec. 101. Extension of authority.

Sec. 102. Reporting of subscribers; significantly viewed and other signals; technical amendments.


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Sec. 103. Statutory license for satellite carriers outside local markets.

Sec. 104. Study.

Sec. 105. Effect on certain proceedings.

1 TITLE I—STATUTORY LICENSE

2 FOR SATELLITE CARRIERS

3 SEC. 101. EXTENSION OF AUTHORITY.

4 (a) IN GENERAL.—Section 4(a) of the Satellite Home

5 Viewer Act of 1994 (17 U.S.C. 119 note; Public Law 103–

6 369; 108 Stat. 3481) is amended by striking ‘‘December

7 31, 2004’’ and inserting ‘‘December 31, 2009’’.

8 (b) EXTENSION FOR CERTAIN SUBSCRIBERS.—Sec9 tion 119(e) of title 17, United States Code, is amended

10 by striking ‘‘December 31, 2004’’ and inserting ‘‘Decem11 ber 31, 2009’’.

12 SEC. 102. REPORTING OF SUBSCRIBERS; SIGNIFICANTLY

13 VIEWED AND OTHER SIGNALS; TECHNICAL

14 AMENDMENTS.

15 Section 119(a) of title 17, United States Code, is

16 amended—

17 (1) in paragraph (1)—

18 (A) in the paragraph heading, by striking

19 ‘‘AND PBS SATELLITE FEED’’;

20 (B) in the first sentence, by striking ‘‘(3),

21 (4), and (6)’’ and inserting ‘‘(5), (6), and (8)’’;

22 (C) in the first sentence, by striking ‘‘or by

23 the Public Broadcasting Service satellite feed’’;

24 and


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1 (D) by striking the second sentence;

2 (2) in paragraph (2)—

3 (A) in subparagraph (A), by striking ‘‘(3),

4 (4), (5), and (6)’’ and inserting ‘‘(5), (6), (7),

5 and (8)’’; and

6 (B) by amending subparagraph (C) to read

7 as follows:

8 ‘‘(C) SUBMISSION OF SUBSCRIBER LISTS

9 TO NETWORKS.—

10 ‘‘(i) INITIAL LISTS.—A satellite car11 rier that makes secondary transmissions of

12 a primary transmission made by a network

13 station pursuant to subparagraph (A)

14 shall, 90 days after commencing such sec15 ondary transmissions, submit to the net16 work that owns or is affiliated with the

17 network station—

18 ‘‘(I) a list identifying (by name

19 and street address, including county

20 and zip code) all subscribers to which

21 the satellite carrier makes secondary

22 transmissions of that primary trans23 mission to subscribers in unserved

24 households; and


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1 ‘‘(II) a separate list, aggregated

2 by designated market area (as defined

3 in section 122(j)) (by name and street

4 address, including county and zip

5 code), which shall indicate those sub6 scribers being served pursuant to sub7 section (a)(3), relating to significantly

8 viewed stations.

9 ‘‘(ii) MONTHLY LISTS.—After the sub10 mission of the initial lists under clause (i),

11 on the 15th of each month, the satellite

12 carrier shall submit to the network—

13 ‘‘(I) a list identifying (by name

14 and street address, including county

15 and zip code) any persons who have

16 been added or dropped as subscribers

17 under clause (i)(I) since the last sub18 mission under clause (i); and

19 ‘‘(II) a separate list, aggregated

20 by designated market area (by name

21 and street address, including county

22 and zip code), identifying those sub23 scribers whose service pursuant to

24 subsection (a)(3), relating to signifiVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00037 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660

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1 cantly viewed stations, has been added

2 or dropped.

3 ‘‘(iii) USE OF SUBSCRIBER INFORMA4 TION.—Subscriber information submitted

5 by a satellite carrier under this subpara6 graph may be used only for purposes of

7 monitoring compliance by the satellite car8 rier with this subsection.

9 ‘‘(iv) APPLICABILITY.—The submis10 sion requirements of this subparagraph

11 shall apply to a satellite carrier only if the

12 network to whom the submissions are to be

13 made places on file with the Register of

14 Copyrights a document identifying the

15 name and address of the person to whom

16 such submissions are to be made. The Reg17 ister shall maintain for public inspection a

18 file of all such documents.’’;

19 (3) by adding at the end the following new sub20 paragraph:

21 ‘‘(D) STATES WITH SINGLE COMMERCIAL

22 FULL-POWER NETWORK STATION.—In a State

23 in which there is licensed by the Federal Com24 munications Commission a single full-power sta25 tion that was a network station on January 1,


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1 1995, the statutory license provided for in sub2 paragraph (A) shall apply to the secondary

3 transmission by a satellite carrier of the signal

4 of that station to any subscriber in a commu5 nity that is located within that State and that

6 is not within the first 50 major television mar7 kets as listed in the regulations of the Commis8 sion as in effect on such date (47 CFR

9 76.51).’’;

10 (4) by striking paragraph (8);

11 (5) by redesignating paragraphs (9) through

12 (12) as paragraphs (10) through (13), respectively;

13 (6) by redesignating paragraphs (3) through

14 (7) as paragraphs (5) through (9), respectively;

15 (7) by inserting after paragraph (2) the fol16 lowing:

17 ‘‘(3) SECONDARY TRANSMISSIONS OF SIGNIFI18 CANTLY VIEWED SIGNALS.—

19 ‘‘(A) IN GENERAL.—Notwithstanding the

20 provisions of paragraph (2)(B), and subject to

21 subparagraph (B) of this paragraph, the statu22 tory license provided for in paragraphs (1) and

23 (2) shall apply to the secondary transmission of

24 the signal of a network station or a supersta25 tion to a subscriber who resides outside the staVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660

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1 tion’s local market (as defined in section

2 122(j)) but within a community in which the

3 signal of that station is determined to be sig4 nificantly viewed under section 340 of the Com5 munications Act of 1934.

6 ‘‘(B) LIMITATION.—Subparagraph (A)

7 shall apply only to secondary transmissions of

8 network stations and superstations to sub9 scribers who receive secondary transmissions

10 from a satellite carrier pursuant to the statu11 tory license under section 122.’’; and

12 (8) in paragraph (2)(B)(i), by adding at the

13 end the following new sentence: ‘‘The limitation in

14 this clause shall not apply to secondary trans15 missions under paragraph (3).’’.

16 SEC. 103. STATUTORY LICENSE FOR SATELLITE CARRIERS

17 OUTSIDE LOCAL MARKETS.

18 Section 119 of title 17, United States Code, is

19 amended as follows:

20 (1) Subsection (a) is amended by inserting after

21 paragraph (3), as added by section 102 of this Act,

22 the following:

23 ‘‘(4) STATUTORY LICENSE WHERE RETRANS24 MISSIONS INTO LOCAL MARKET AVAILABLE.—


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1 ‘‘(A) RULES FOR SUBSCRIBERS UNDER

2 SUBSECTION (e).—In the case of a subscriber of

3 a satellite carrier who is eligible to receive the

4 signal of a network station solely by reason of

5 subsection (e) (in this subparagraph referred to

6 as a ‘distant signal’), the following shall apply:

7 ‘‘(i) In a case in which the signal of

8 a local network station affiliated with the

9 same television network is made available

10 by that satellite carrier to the subscriber

11 pursuant to the statutory license under

12 section 122, the statutory license under

13 paragraph (2) shall apply only to sec14 ondary transmissions by that satellite car15 rier of the distant signal of such network

16 station to that subscriber—

17 ‘‘(I) if, within 60 days after re18 ceiving the notice of the satellite car19 rier under section 338(h) of the Com20 munications Act of 1934, the sub21 scriber elects to retain the distant sig22 nal; but

23 ‘‘(II) only until such time as the

24 subscriber elects to receive such local

25 signal.


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1 ‘‘(ii) Notwithstanding clause (i), the

2 statutory license under paragraph (2) shall

3 not apply to any subscriber who is eligible

4 to receive the signal of a network station

5 solely by reason of subsection (e) unless

6 the subscriber’s satellite carrier, within 60

7 days after the date of the enactment of the

8 Satellite Home Viewer Extension and Re9 authorization Act of 2004, submits to that

10 television network a list, aggregated by

11 designated market area (as defined in sec12 tion 122(j)(2)(C)), that—

13 ‘‘(I) identifies that subscriber by

14 name and address (street or RFD

15 number, city, State, and zip code) and

16 specifies the distant signals received

17 by the subscriber; and

18 ‘‘(II) states, to the best of the

19 satellite carrier’s knowledge and be20 lief, after having made diligent and

21 good faith inquiries, that the sub22 scriber is eligible under subsection (e)

23 to receive the distant signals.

24 ‘‘(B) RULES FOR OTHER SUBSCRIBERS.—

25 In the case of a subscriber of a satellite carrier


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1 who is eligible to receive the signal of a network

2 station under the statutory license under para3 graph (2) (in this subparagraph referred to as

4 a ‘distant signal’), other than subscribers to

5 whom subparagraph (A) applies, the following

6 shall apply:

7 ‘‘(i) In a case in which the signal of

8 a local network station affiliated with the

9 same television network is made available

10 by that satellite carrier, on the date of the

11 enactment of the Satellite Home Viewer

12 Extension and Reauthorization Act of

13 2004, to the subscriber pursuant to the

14 statutory license under section 122, the

15 statutory license under paragraph (2) shall

16 apply only to secondary transmissions by

17 that satellite carrier of the distant signal

18 of such network station to that

19 subscriber—

20 ‘‘(I)(aa) if, on such date of enact21 ment, the subscriber is receiving such

22 distant signal and is also receiving

23 such local signal, and

24 ‘‘(bb) the subscriber’s satellite

25 carrier, within 60 days after such date


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1 of enactment, submits to that tele2 vision network a list, aggregated by

3 designated market area (as defined in

4 section 122(j)(2)(C)), that identifies

5 that subscriber by name and address

6 (street or RFD number, city, State,

7 and zip code) and specifies the distant

8 signals received by the subscriber; or

9 ‘‘(II)(aa) if, on such date of en10 actment, the subscriber is receiving

11 such distant signal and is not receiv12 ing such local signal; but

13 ‘‘(bb) only until such time as the

14 subscriber elects to receive such local

15 signal.

16 ‘‘(ii) In a case in which the signal of

17 a local network station affiliated with the

18 same television network is not made avail19 able by that satellite carrier, on the date of

20 the enactment of the Satellite Home View21 er Extension and Reauthorization Act of

22 2004, to a subscriber pursuant to the stat23 utory license under section 122, the statu24 tory license under paragraph (2) shall

25 apply only to secondary transmissions by


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1 that satellite carrier of the distant signal

2 of such network station to any person—

3 ‘‘(I) who is subscriber of that

4 satellite carrier on such date of enact5 ment, or

6 ‘‘(II) who becomes a subscriber

7 of that satellite carrier after such date

8 but before the local signal is available,

9 but only until such time as the subscriber

10 elects to receive the local signal from that

11 satellite carrier.

12 ‘‘(C) FUTURE APPLICABILITY.—The statu13 tory license under paragraph (2) shall not apply

14 to secondary transmissions by a satellite carrier

15 of a primary transmission of a network station

16 to a subscriber in a location to which the signal

17 of a local network station affiliated with the

18 same television network was made available by

19 that satellite carrier, before that person became

20 a subscriber to that satellite carrier, pursuant

21 to the statutory license under section 122.

22 ‘‘(D) NULLIFICATION OF EXISTING WAIV23 ERS.—In the case of any subscriber to whom

24 subparagraph (B)(i)(II) or (B)(ii) applies, at

25 such time as the subscriber elects to receive the


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1 local signal of a network station, any waiver by

2 that network station under section 339(c)(2) of

3 the Communications Act of 1934 shall cease to

4 be effective with respect to that subscriber.

5 ‘‘(E) OTHER PROVISIONS NOT AF6 FECTED.—This paragraph shall not affect the

7 applicability of the statutory license to sec8 ondary transmissions under paragraph (3) or to

9 unserved households included under subsection

10 (a)(12). ’’.

11 (2) Subsection (b)(1) is amended by striking

12 subparagraph (B) and inserting the following:

13 ‘‘(B) a royalty fee for that 6-month period,

14 computed by multiplying the total number of

15 subscribers receiving each secondary trans16 mission of each superstation or network station

17 during each calendar month by the appropriate

18 rate in effect under this section.’’.

19 (3) Subsection (b)(1) is further amended by

20 adding at the end the following flush sentence:

21 ‘‘Notwithstanding the provisions of subparagraph

22 (B), a satellite carrier whose secondary trans23 missions are subject to statutory licensing under

24 paragraph (1) or (2) of subsection (a) shall have no

25 royalty obligation for secondary transmissions to a


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1 subscriber who resides outside the station’s local

2 market (as defined in section 122(j)(2)) but within

3 a community in which the signal of that station is

4 determined to be significantly viewed under section

5 340 of the Communications Act of 1934.’’.

6 (4) Subsection (c) is amended—

7 (A) by amending paragraph (1) to read as

8 follows:

9 ‘‘(1) APPLICABILITY AND DETERMINATION OF

10 ROYALTY FEES.—The appropriate rate for purposes

11 of determining the royalty fee under subsection

12 (b)(1)(B) shall be the appropriate rate set forth in

13 part 258 of title 37, Code of Federal Regulations, as

14 in effect on the date of the enactment of the Sat15 ellite Home Viewer Extension and Reauthorization

16 Act of 2004, as modified under this subsection.’’;

17 (B) by striking paragraph (2);

18 (C) in paragraph (3)—

19 (i) by redesignating that paragraph as

20 paragraph (2);

21 (ii) in subparagraph (A)—

22 (I) by striking ‘‘January 1,

23 1997,’’ and inserting ‘‘January 1,

24 2005,’’; and


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1 (II) by striking ‘‘who are not

2 parties to a voluntary agreement filed

3 with the Copyright Office in accord4 ance with paragraph (2)’’;

5 (iii) in subparagraph (C), by striking

6 ‘‘as provided’’ and all that follows through

7 ‘‘later’’ and inserting ‘‘January 1, 2006’’;

8 and

9 (iv) by striking subparagraph (D);

10 and

11 (D) by striking paragraphs (4) and (5)

12 and inserting the following:

13 ‘‘(3) COST OF LIVING ADJUSTMENT.—The roy14 alty rates set forth in subsection (b)(1)(B), as ad15 justed under paragraph (2) of this subsection, shall

16 be adjusted by the Librarian of Congress—

17 ‘‘(A) on January 1, 2005, to reflect any

18 changes occurring during the period beginning

19 on January 1, 2000, and ending on November

20 30, 2004, in the cost of living as determined by

21 the most recent Consumer Price Index (for all

22 consumers and items) published by the Sec23 retary of Labor during that period; and

24 ‘‘(B) on January 1, 2007, and on January

25 1 of each year thereafter, to reflect any changes


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1 occurring during the preceding 12 months in

2 the cost of living as determined by the most re3 cent Consumer Price Index so published.

4 ‘‘(4) REDUCTIONS.—The rate of the royalty fee

5 determined under paragraph (2)—

6 ‘‘(A) for superstations shall be reduced by

7 30 percent; and

8 ‘‘(B) for network stations shall be reduced

9 by 45 percent.’’.

10 (5) Subsection (d) is amended—

11 (A) by amending paragraph (9) to read as

12 follows:

13 ‘‘(9) SUPERSTATION.—The term ‘superstation’

14 means a television broadcast station, other than a

15 network station, licensed by the Federal Commu16 nications Commission that is secondarily transmitted

17 by a satellite carrier.’’;

18 (B) in paragraph (10)(D), by striking

19 ‘‘(a)(11)’’ and inserting ‘‘(a)(12)’’; and

20 (C) by striking paragraph (12).

21 SEC. 104. STUDY.

22 No later than June 30, 2008, the Register of Copy23 rights shall report to the Committee on the Judiciary of

24 the House of Representatives and the Committee on the

25 Judiciary of the Senate the Register’s findings and recVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660

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1 ommendations on the operation and revision of the statu2 tory licenses under sections 111, 119, and 122 of title 17,

3 United States Code. The report should include, but not

4 be limited to, the following:

5 (1) A comparison of the royalties paid by licens6 ees under such sections, including historical rates of

7 increases in these royalties, a comparison between

8 the royalties under each such section and the prices

9 paid in the marketplace for comparable program10 ming.

11 (2) An analysis of the differences in the terms

12 and conditions of the licenses under such sections,

13 an analysis of whether these differences are required

14 or justified by historical, technological, or regulatory

15 differences that affect the satellite and cable indus16 tries, and an analysis of whether either the cable or

17 satellite industry is placed in a competitive disadvan18 tage due to these terms and conditions.

19 (3) An analysis of whether the licenses under

20 such sections are still justified by the bases upon

21 which they were originally created.

22 (4) An analysis of the correlation, if any, be23 tween the royalties, or lack thereof, under such sec24 tions and the fees charged to cable and satellite sub25 scribers, addressing whether cable and satellite comVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00050 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660

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1 panies have passed to subscribers any savings real2 ized as a result of the royalty structure and amounts

3 under such sections.

4 SEC. 105. EFFECT ON CERTAIN PROCEEDINGS.

5 Nothing in this Act shall modify any remedy imposed

6 on a party that is required by a final judgment of a court

7 in any action that was brought before May 1, 2004,

8 against that party for a violation of section 119 of title

9 17, United States Code.

Æ


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Chairman SENSENBRENNER. The chair recognizes the gentleman 

from Texas, Mr. Smith, the Chairman of the Subcommittee on 

Courts, the Internet, and Intellectual Property to explain the bill. 

Mr. SMITH. Mr. Chairman, 2 months ago, the Subcommittee on 

Courts, the Internet, and Intellectual Property reported favorably 

a Committee print of the Satellite Home Viewer Extension and Reauthorization Act of 2004. 

In early June, I introduced H.R. 4518, which contained the core 

provisions of the Committee print, and I introduced it, along with 

Ranking Member Conyers and Subcommittee Ranking Member 

Berman. Over the past several weeks, we have worked together to 

make changes that are largely technical. At the appropriate time, 

I will offer an amendment in the nature of a substitute that incorporates these changes. 

Mr. Chairman, our goal was a bill that serves not the narrow interests of one constituency, but the broad public interest. The bill 

before us balances the interests of television viewers, satellite and 

cable television providers, broadcasters and copyright owners. The 

urgency is the year-end expiration of a distant-signal statutory 

copyright license that permits the satellite carriers to retransmit 

programming to subscribers in unserved households. 

The specific goal of the distant-signal license is to allow for a lifeline network television service to those homes beyond the reach of 

their local television stations. The principal beneficiaries of the license are DirecTV and EchoStar’s DISH Network, which together 

provide TV programming to more than 22 million households. 

The distant-signal license permits these companies to retransmit 

programming to otherwise unserved subscribers at fair market 

value without having to enter into expensive and time-consuming 

negotiations with individual content owners. The last time the 

rates were adjusted for content owners was 1999. 

Over the last year, the two dominant satellite companies have 

combined to sign up more than 8 in 10 new television subscribers, 

and together they have grossed nearly $14 billion in revenue. They 

provide formidable competition to the cable industry, and competition provides consumers with more choices, improved services, 

higher quality and greater technological innovation. 

However, there is also no denying the fact that the satellite companies who rely on the distant-signal license have benefitted tremendously from a royalty rate that has been frozen for nearly 5 

years. The bill’s royalty provision includes the first Cost of Living 

Adjustment in 5 years, provides for a new Copyright Arbitration 

Royalty Panel—called CARP—to determine the fair market value 

of programming and institutes annual Cost of Living Adjustments 

in 2007. 

Unfortunately, one of the satellite companies has misled the public by claiming that Congress is approving an increase in subscriber 

rates. Let’s put the facts regarding EchoStar’s royalty payments in 

context. 

In 2003, the company grossed $5.7 billion, while paying less than 

$26 million or less than one-half of 1 percent to copyright owners. 

Last year, three executives at the company cashed out stock options that together exceeded EchoStar’s total payment to all content owners under the license. I cannot agree with their position 

53

that content owners should be denied a Cost of Living Adjustment 

in 2005 which reflects inflation over the last 5 years. 

But this legislation, Mr. Chairman, is not just a royalty bill. It 

will allow satellite companies to expand subscriber choice and give 

them an incentive to make local signals available to all Americans. 

Finally, this bill will require the Copyright Office to conduct a 

comprehensive study of the three licenses—111, 119 and 122—that 

affect the cable and satellite industries and to make recommendations on whether to harmonize those licenses. 

This bill, and the amendment in the nature of a substitute, 

strike an appropriate balance between the interests of intellectual 

property owners and the interests of the satellite companies who 

use their copyrighted programming. 

I urge my colleagues to support the bill and the amendment and, 

Mr. Chairman, I yield back the balance of my time. 

[Intervening business.] 

Chairman SENSENBRENNER. Getting back to the Satellite Home 

Viewer Act reauthorization, the gentleman from Michigan? 

Mr. CONYERS. Thank you, Mr. Chairman. 

Our Ranking Member, Mr. Berman, hasn’t arrived yet, but we 

are in agreement on this side about the bill. The gentleman from 

Virginia, Mr. Boucher, has a comment about antitrust that I’m 

sure that we will approve of. Former Chairman Hyde has left us 

breathless, as usual, about his disposition on this matter. 

And before I yield to Mr. Berman, I wanted to observe that the 

satellite companies feel better—exactly, specifically, DirecTV and 

EchoStar—about the gray areas in terms of what satellite service 

customers can get when local-to-local satellite television is available, and the copyright owners, with respect to royalty rates, will 

receive an adjustment that I think has been worked out very fairly 

by all of the staff members, and the Committee, and particularly 

its ranking Subcommittee Member, Mr. Berman, to whom I yield 

the remainder of the time. 

Mr. BERMAN. Thank you very much, Mr. Chairman. I appreciate—and, Mr. Conyers, I appreciate your yielding to me. 

H.R. 4518, I’m pleased to cosponsor. While the bill doesn’t do everything I might have wanted, I think it represents a good-faith 

compromise, which has been meticulously hammered out among interested parties, and I would ask this Committee and my colleagues on the Committee to report it favorably. 

I think the bill has been summarized by the Chairman of the 

Subcommittee. Basically, H.R. 4518 reauthorizes section 119 of the 

Copyright Act. It should be noted that the legislation is of enormous benefit to satellite TV companies. In essence, it provides 

them with a valuable Government subsidy. It allows them to use 

copyrighted broadcast programming without the permission of the 

copyright owners. It guarantees that satellite TV companies will 

pay a Government-set rate which is far below the fair market rate. 

The Government subsidy embodied in section 119 was originally 

justified as necessary to make satellite television an effective competitor to cable television. With 22 percent of the pay TV market, 

you could say that satellite television has become a strong and 

credible competitor to cable. But while the policy rationales beyond 

section 119 Government subsidy have weakened, the companies’ 

desire for its extension have remained remarkably steady. 

54

If we are going to reauthorize this section 119 license, I think 

this bill represents a reasonable approach for doing so, and that’s 

why I support it. 

I would ask, Mr. Chairman, that the entire statement be included here. And while I would have preferred to talk about it privately, I want to throw out the idea that since we have unanimously, in this body, passed CARP reform, since key parts of this 

bill are geared on a CARP process, I would like to at least throw 

out the idea of placing our CARP reform bill already passed by this 

House into this bill, in this Committee, to make sure that were the 

parties not to negotiate a rate and were this to go to a CARP process, it would be the new reformed, more efficient and more effective 

CARP process that we spent a great deal of time working on and 

passing earlier this year. 

And, with that, I yield back. 

[The prepared statement of Mr. Berman follows:]

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND RANKING MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, 

I am pleased to join you in cosponsoring H.R. 4518. While this bill does not contain all that I had hoped, it represents a good-faith compromise meticulously hammered out among interested parties. Thus, I ask my Judiciary colleagues to report 

it favorably. 

The Chairman of the Subcommittee has admirably summarized the purpose and 

effect of H.R. 4518. As he noted, H.R. 4518 reauthorizes Section 119 of the Copyright Act. In doing so, it enables satellite TV companies to retransmit distant superstation and network signals to subscribers who cannot obtain those signals over the 

air. 

This legislation is of enormous benefit to satellite TV companies. In essence, it 

provides them with a valuable government subsidy. It allows them to use copyrighted broadcast programming without the permission of the copyright owners. It 

also guarantees that satellite TV companies will pay a government-set rate far 

below the fair market rate. 

The government subsidy embodied in Section 119 was originally justified as necessary to make satellite television an effective competitor to cable television. With 

22% of the pay TV market, you could say that satellite television has become a 

strong and credible competitor to cable. But while the policy rationales behind Section 119 government subsidy have weakened, the satellite companies’ desire for its 

extension has remained remarkably steady. 

If Section 119 reauthorization must occur, H.R. 4518 represents a reasonable approach for doing so. 

As did the 1994 and 1999 reauthorizations of the Section 119 license, H.R. 4518 

addresses the royalty fees that DBS providers will pay for the right to retransmit 

distant signals under the Section 119 license. While these fee provisions explicitly 

deny fair compensation to copyright owners, they represent a carefully-crafted compromise, and for that reason I will support them. 

Specifically, H.R. 4518 establishes a process for determining royalty rates that 

closely mirrors the approach embodied in the Satellite Home Viewer Improvement 

Act of 1999 (SHVIA). The bill directs that a Copyright Arbitration Royalty Panel, 

or CARP, establish royalty fees according to the same ‘‘fair market’’ standard utilized by previous CARPs. As was the case in 1999, the ‘‘fair market’’ rate established 

by the CARP will be reduced by 30% for superstation signals, and 45% for network 

signals. Thus, H.R. 4518 ensures that satellite companies will pay royalties that 

represent a huge discount to marketplace rates. 

While this approach is very similar to what we did in 1999, several differences 

do exist. 

Regardless of when H.R. 4518 is enacted, a CARP will not be able to establish 

a new rate before the current rate expires on December 31, 2004. In order to hasten 

establishment of a new rate by a CARP, the legislation eschews an official, voluntary negotiating period prior to the CARP, and directs that the CARP be concluded by December 31, 2005. This means that the new royalty rates cover the years 

2006 through 2009. It also means, in effect, that the months between now and enVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00054 Fmt 6659 Sfmt 6621 E:\HR\OC\HR660.XXX HR660
55

actment of this legislation become the voluntary negotiating period for licensors and 

licensees. 

Because the CARP won’t be completed until December 31, 2005, the Committee 

Print has to set forth a rate that will be in effect during 2005. The language directs 

that this ‘‘interim’’ royalty rate will be the prior, statutorily-reduced royalty rate adjusted for the cumulative change in the Consumer Price Index (CPI) since 2000. 

H.R. 4518 also provides that the rates payable in 2007, 2008, and 2009 shall be 

adjusted to reflect changes in the CPI over the preceding 12 months. These annual 

CPI adjustments ensure that, if Congress chooses to reauthorize Section 119 yet 

again, there will be no need for a 5 year CPI adjustment in 2010, and thus that 

rates will adjust more gradually over time. 

Because the CARP reform bill unanimously passed by the House earlier this year 

has yet to become law, it has been pointed out that the old, flawed CARP process 

may be used to establish the new royalty rates under Section 119. I think this is 

a legitimate concern, and understand the Senate may address this concern by combining CARP reform with the satellite bill. I would support such an outcome. 

I yield back the balance of my time.

Chairman SENSENBRENNER. Does the gentleman from Michigan 

yield back his time? 

Mr. CONYERS. Yes, sir, I do. 

Chairman SENSENBRENNER. The chair recognizes—without objection, all Members’ opening statements will be placed in the record 

at this point. 

[The prepared statement of Mrs. Blackburn follows:]

PREPARED STATEMENT OF THE HONORABLE MARSHA BLACKBURN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. Chairman, I want to thank you, Chairman Smith and your staff for working 

with me as we seek to reauthorize the ‘‘Satellite Home Viewer Extension and Reauthorization Act of 2004.’’

The laws that govern who can and cannot receive certain satellite signals are intricate and they have many nuances. I am sure that my office is not the only one 

with a unique story. 

For constituents of mine who live in Henderson County, TN, however, the story 

is not pleasant. Folks who reside in rural Henderson County cannot receive stations 

over the air, and they live in a Designated Market Area, the Jackson DMA, that 

has only one network affiliate, an ABC station. 

Since their DMA is ‘‘unserved’’ by NBC, CBS and Fox, the law permits satellite 

carriers to deliver distant network signals. Unfortunately, DirecTV and EchoStar 

have chosen to deliver the distant signals from Denver, Atlanta and New York stations rather than stations in Nashville or Memphis. As a result, my constituents are 

forced to watch the Atlanta Falcons and the Colorado Buffaloes rather then the Tennessee Titans and Volunteers. On a more serious note, they are also deprived of 

local news, weather and public safety information relevant to their lives and communities. 

One of my constituents called me and said, ‘‘My buddy has a lake house over in 

Decatur County and just uses that box in his house in Henderson County and gets 

the local signals just fine. I want to play by the rules but I want to see the Volunteers and the Titans.’’

We should be working to help those people that play by the rules. The solution 

should be fairly simple. Since nothing in the law appears to prohibit DirecTV and 

EchoStar from delivering an in-state distant signal to unserved subscribers in Henderson County, I contacted representatives of both companies to ask that they replace the Atlanta and Denver stations with in-state signals. After considering my 

request, DirecTV officials committed to me that they will begin to do so as soon as 

they start offering local-into-local service in the Jackson DMA. Unfortunately, 

EchoStar, which owns the DISH Network, has yet to make a similar commitment. 

It is my hope that EchoStar will follow DirecTV’s example and agree to do the same.

Chairman SENSENBRENNER. The chair now recognizes the gentleman from Texas for purposes of offering an amendment in the 

nature of a substitute. 

Mr. SMITH. Mr. Chairman, I have an amendment at the desk. 

Chairman SENSENBRENNER. The clerk will report the amendment. 

56

The CLERK. Amendment in the nature of a substitute to H.R. 

4518, offered by Mr. Smith of Texas. 

Chairman SENSENBRENNER. Without objection, the amendment 

in the nature of a substitute is considered as read. 

[The amendment follows:]

57 H.L.C.

AMENDMENT IN THE NATURE OF A SUBSTITUTE

TO H.R. 4518

OFFERED BY Ml. llllll

Strike all after the enacting clause and insert the

following:

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Satellite Home Viewer Extension and Reauthorization

4 Act of 2004’’.

5 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

TITLE I—STATUTORY LICENSE FOR SATELLITE CARRIERS

Sec. 101. Extension of authority.

Sec. 102. Reporting of subscribers; significantly viewed and other signals; technical amendments.

Sec. 103. Statutory license for satellite carriers outside local markets.

Sec. 104. Waivers.

Sec. 105. Study.

Sec. 106. Effect on certain proceedings.

6 TITLE I—STATUTORY LICENSE

7 FOR SATELLITE CARRIERS

8 SEC. 101. EXTENSION OF AUTHORITY.

9 (a) IN GENERAL.— Section 4(a) of the Satellite

10 Home Viewer Act of 1994 (17 U.S.C. 119 note; Public

11 Law 103–369; 108 Stat. 3481) is amended by striking

12 ‘‘December 31, 2004’’ and inserting ‘‘December 31,

13 2009’’.


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H.L.C.

1 (b) EXTENSION FOR CERTAIN SUBSCRIBERS.—Sec2 tion 119(e) of title 17, United States Code, is amended

3 by striking ‘‘December 31, 2004’’ and inserting ‘‘Decem4 ber 31, 2009’’.

5 SEC. 102. REPORTING OF SUBSCRIBERS; SIGNIFICANTLY

6 VIEWED AND OTHER SIGNALS; TECHNICAL

7 AMENDMENTS.

8 Section 119(a) of title 17, United States Code, is

9 amended—

10 (1) in paragraph (1)—

11 (A) in the paragraph heading, by striking

12 ‘‘AND PBS SATELLITE FEED’’;

13 (B) in the first sentence, by striking ‘‘(3),

14 (4), and (6)’’ and inserting ‘‘(5), (6), and (8)’’;

15 (C) in the first sentence, by striking ‘‘or by

16 the Public Broadcasting Service satellite feed’’;

17 and

18 (D) by striking the second sentence;

19 (2) in paragraph (2)—

20 (A) in subparagraph (A), by striking ‘‘(3),

21 (4), (5), and (6)’’ and inserting ‘‘(5), (6), (7),

22 and (8)’’; and

23 (B) by striking subparagraph (C) and in24 sert the following:

25 ‘‘(C) EXCEPTIONS.—


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1 ‘‘(i) STATES WITH SINGLE FULL2 POWER NETWORK STATION.—In a State in

3 which there is licensed by the Federal

4 Communications Commission a single full5 power station that was a network station

6 on January 1, 1995, the statutory license

7 provided for in subparagraph (A) shall

8 apply to the secondary transmission by a

9 satellite carrier of the signal of that station

10 to any subscriber in a community that is

11 located within that State and that is not

12 within the first 50 television markets as

13 listed in the regulations of the Commission

14 as in effect on such date (47 CFR 76.51).

15 ‘‘(ii) CERTAIN ADDITIONAL STA16 TIONS.—The statutory license provided for

17 in subparagraph (A) shall apply to the sec18 ondary transmission, by a satellite carrier

19 to subscribers in no more than two coun20 ties in a State that are in local market

21 principally comprised of counties in an22 other State, of the signals of any network

23 station located in the capital of the State

24 in which such counties are located, if the

25 total number of television households in


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1 the two counties combined did not exceed

2 10,000 for the year 2003 according to

3 Nielsen Media Research.

4 ‘‘(D) SUBMISSION OF SUBSCRIBER LISTS

5 TO NETWORKS.—

6 ‘‘(i) INITIAL LISTS.—A satellite car7 rier that makes secondary transmissions of

8 a primary transmission made by a network

9 station pursuant to subparagraph (A)

10 shall, 90 days after commencing such sec11 ondary transmissions, submit to the net12 work that owns or is affiliated with the

13 network station—

14 ‘‘(I) a list identifying (by name

15 and street address, including county

16 and zip code) all subscribers to which

17 the satellite carrier makes secondary

18 transmissions of that primary trans19 mission to subscribers in unserved

20 households; and

21 ‘‘(II) a separate list, aggregated

22 by designated market area (as defined

23 in section 122(j)) (by name and street

24 address, including county and zip

25 code), which shall indicate those subVerDate jul 14 2003 03:48 Sep 08, 2004 Jkt 029006 PO 00000 Frm 00060 Fmt 6659 Sfmt 6601 E:\HR\OC\HR660.XXX HR660

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1 scribers being served pursuant to sub2 section (a)(3), relating to significantly

3 viewed stations.

4 ‘‘(ii) MONTHLY LISTS.—After the sub5 mission of the initial lists under clause (i),

6 on the 15th of each month, the satellite

7 carrier shall submit to the network—

8 ‘‘(I) a list identifying (by name

9 and street address, including county

10 and zip code) any persons who have

11 been added or dropped as subscribers

12 under clause (i)(I) since the last sub13 mission under clause (i); and

14 ‘‘(II) a separate list, aggregated

15 by designated market area (by name

16 and street address, including county

17 and zip code), identifying those sub18 scribers whose service pursuant to

19 subsection (a)(3), relating to signifi20 cantly viewed stations, has been added

21 or dropped.

22 ‘‘(iii) USE OF SUBSCRIBER INFORMA23 TION.—Subscriber information submitted

24 by a satellite carrier under this subpara25 graph may be used only for purposes of


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H.L.C.

1 monitoring compliance by the satellite car2 rier with this subsection.

3 ‘‘(iv) APPLICABILITY.—The submis4 sion requirements of this subparagraph

5 shall apply to a satellite carrier only if the

6 network to whom the submissions are to be

7 made places on file with the Register of

8 Copyrights a document identifying the

9 name and address of the person to whom

10 such submissions are to be made. The Reg11 ister shall maintain for public inspection a

12 file of all such documents.’’;

13 (3) by striking paragraph (8);

14 (4) by redesignating paragraphs (9) through

15 (12) as paragraphs (10) through (13), respectively;

16 (5) by redesignating paragraphs (3) through

17 (7) as paragraphs (5) through (9), respectively;

18 (6) by inserting after paragraph (2) the fol19 lowing:

20 ‘‘(3) SECONDARY TRANSMISSIONS OF SIGNIFI21 CANTLY VIEWED SIGNALS.—

22 ‘‘(A) IN GENERAL.—Notwithstanding the

23 provisions of paragraph (2)(B), and subject to

24 subparagraph (B) of this paragraph, the statu25 tory license provided for in paragraphs (1) and


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H.L.C.

1 (2) shall apply to the secondary transmission of

2 the signal of a network station or a supersta3 tion to a subscriber who resides outside the sta4 tion’s local market (as defined in section

5 122(j)) but within a community in which the

6 signal of that station was determined by the

7 Federal Communications Commission, on or be8 fore the date of the enactment of the Satellite

9 Home Viewer Extension and Reauthorization

10 Act of 2004, to be significantly viewed in ac11 cordance with the provisions of section 76.54 of

12 title 47, Code of Federal Regulations, as in ef13 fect on such date of enactment.

14 ‘‘(B) LIMITATION.—Subparagraph (A)

15 shall apply only to secondary transmissions of

16 network stations and superstations to sub17 scribers who receive secondary transmissions

18 from a satellite carrier pursuant to the statu19 tory license under section 122.’’; and

20 (7) in paragraph (2)(B)(i), by adding at the

21 end the following new sentence: ‘‘The limitation in

22 this clause shall not apply to secondary trans23 missions under paragraph (3).’’.


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H.L.C.

1 SEC. 103. STATUTORY LICENSE FOR SATELLITE CARRIERS

2 OUTSIDE LOCAL MARKETS.

3 Section 119 of title 17, United States Code, is

4 amended as follows:

5 (1) Subsection (a) is amended by inserting after

6 paragraph (3), as added by section 102 of this Act,

7 the following:

8 ‘‘(4) STATUTORY LICENSE WHERE RETRANS9 MISSIONS INTO LOCAL MARKET AVAILABLE.—

10 ‘‘(A) RULES FOR SUBSCRIBERS UNDER

11 SUBSECTION (e).—

12 ‘‘(i) FOR THOSE RECEIVING DISTANT

13 SIGNALS.—In the case of a subscriber of a

14 satellite carrier who is eligible to receive

15 the signal of a network station solely by

16 reason of subsection (e) (in this subpara17 graph referred to as a ‘distant signal’),

18 and who is receiving the distant signal of

19 a network station on the date of the enact20 ment of the Satellite Home Viewer Exten21 sion and Reauthorization Act of 2004, the

22 following shall apply:

23 ‘‘(I) In a case in which the signal

24 of a local network station affiliated

25 with the same television network is

26 made available by that satellite carrier


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9

H.L.C.

1 to the subscriber pursuant to the stat2 utory license under section 122, the

3 statutory license under paragraph (2)

4 shall apply only to secondary trans5 missions by that satellite carrier to

6 that subscriber of the distant signal of

7 a station affiliated with the same tele8 vision network—

9 ‘‘(aa) if, within 60 days

10 after receiving the notice of the

11 satellite carrier under section

12 338(h) of the Communications

13 Act of 1934, the subscriber elects

14 to retain the distant signal; but

15 ‘‘(bb) only until such time as

16 the subscriber elects to receive

17 such local signal.

18 ‘‘(II) Notwithstanding subclause

19 (I), the statutory license under para20 graph (2) shall not apply with respect

21 to any subscriber who is eligible to re22 ceive the distant signal of a television

23 network station solely by reason of

24 subsection (e) and to whom subclause

25 (I) applies unless the satellite carrier,


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10

H.L.C.

1 within 60 days after the date of the

2 enactment of the Satellite Home

3 Viewer Extension and Reauthorization

4 Act of 2004, submits to that television

5 network a list, aggregated by des6 ignated market area (as defined in

7 section 122(j)(2)(C)), that—

8 ‘‘(aa) identifies that sub9 scriber by name and address

10 (street or RFD number, city,

11 State, and zip code) and specifies

12 the distant signals received by

13 the subscriber; and

14 ‘‘(bb) states, to the best of

15 the satellite carrier’s knowledge

16 and belief, after having made

17 diligent and good faith inquiries,

18 that the subscriber is eligible

19 under subsection (e) to receive

20 the distant signals.

21 ‘‘(ii) FOR THOSE NOT RECEIVING DIS22 TANT SIGNALS.—In the case of any sub23 scriber of a satellite carrier who is eligible

24 to receive the distant signal of a network

25 station solely by reason of subsection (e)


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11

H.L.C.

1 and who did not receive a distant signal of

2 a station affiliated with the same network

3 on July 1, 2004, the statutory license

4 under paragraph (2) shall not apply to sec5 ondary transmissions by that satellite car6 rier to that subscriber of that distant sig7 nal.

8 ‘‘(B) RULES FOR OTHER SUBSCRIBERS.—

9 In the case of a subscriber of a satellite carrier

10 who is eligible to receive the signal of a network

11 station under the statutory license under para12 graph (2) (in this subparagraph referred to as

13 a ‘distant signal’), other than subscribers to

14 whom subparagraph (A) applies, the following

15 shall apply:

16 ‘‘(i) In a case in which the signal of

17 a local network station affiliated with the

18 same television network is made available

19 by that satellite carrier, on January 1,

20 2005, to the subscriber pursuant to the

21 statutory license under section 122, the

22 statutory license under paragraph (2) shall

23 apply only to secondary transmissions by

24 that satellite carrier to that subscriber of

25 the distant signal of a station affiliated


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12

H.L.C.

1 with the same television network if the

2 subscriber’s satellite carrier, within 60

3 days after such date, submits to that tele4 vision network a list, aggregated by des5 ignated market area (as defined in section

6 122(j)(2)(C)), that identifies that sub7 scriber by name and address (street or

8 RFD number, city, State, and zip code)

9 and specifies the distant signals received

10 by the subscriber.

11 ‘‘(ii) In a case in which the signal of

12 a local network station affiliated with the

13 same television network is not made avail14 able by that satellite carrier, on January 1,

15 2005, to a subscriber pursuant to the stat16 utory license under section 122, the statu17 tory license under paragraph (2) shall

18 apply only to secondary transmissions by

19 that satellite carrier of the distant signal

20 of a station affiliated with the same net21 work to any person—

22 ‘‘(I) who is a subscriber of that

23 satellite carrier on such date, or


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13

H.L.C.

1 ‘‘(II) who becomes a subscriber

2 of that satellite carrier after such date

3 but before the local signal is available,

4 but only until such time as the subscriber

5 elects to receive the local signal from that

6 satellite carrier.

7 ‘‘(C) FUTURE APPLICABILITY.—The statu8 tory license under paragraph (2) shall not apply

9 to the secondary transmission by a satellite car10 rier of a primary transmission of a network sta11 tion to a subscriber who—

12 ‘‘(i) does not receive such secondary

13 transmission as of the date of the enact14 ment of the Satellite Home Viewer Exten15 sion and Reauthorization Act of 2004; and

16 ‘‘(ii) resides in a local market where

17 the satellite carrier makes available a net18 work station affiliated with the same tele19 vision network pursuant to the statutory li20 cense under section 122.

21 ‘‘(D) OTHER PROVISIONS NOT AF22 FECTED.—This paragraph shall not affect the

23 applicability of the statutory license to sec24 ondary transmissions under paragraph (3) or to


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H.L.C.

1 unserved households included under paragraph

2 (12).

3 ‘‘(E) AVAILABLE DEFINED.—For purposes

4 of this paragraph, a local signal has been made

5 available by a satellite carrier to a subscriber or

6 person if the satellite carrier offers that local

7 signal to other subscribers who reside in the

8 same zipcode as that subscriber or person.’’.

9 (2) Subsection (b)(1) is amended by striking

10 subparagraph (B) and inserting the following:

11 ‘‘(B) a royalty fee for that 6-month period,

12 computed by multiplying the total number of

13 subscribers receiving each secondary trans14 mission of each superstation or network station

15 during each calendar month by the appropriate

16 rate in effect under this section.’’.

17 (3) Subsection (b)(1) is further amended by

18 adding at the end the following flush sentence:

19 ‘‘Notwithstanding the provisions of subparagraph

20 (B), a satellite carrier whose secondary trans21 missions are subject to statutory licensing under

22 paragraph (1) or (2) of subsection (a) shall have no

23 royalty obligation for secondary transmissions to a

24 subscriber who resides outside the station’s local

25 market (as defined in section 122(j)(2)) but within


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H.L.C.

1 a community in which the signal of that station was

2 determined by the Federal Communications Com3 mission, on or before the date of the enactment of

4 the Satellite Home Viewer Extension and Reauthor5 ization Act of 2004, to be significantly viewed in ac6 cordance with the provisions of section 76.54 of title

7 47, Code of Federal Regulations, as in effect on

8 such date of enactment.’’.

9 (4) Subsection (c) is amended—

10 (A) by amending paragraph (1) to read as

11 follows:

12 ‘‘(1) APPLICABILITY AND DETERMINATION OF

13 ROYALTY FEES.—The appropriate rate for purposes

14 of determining the royalty fee under subsection

15 (b)(1)(B) shall be the appropriate rate set forth in

16 part 258 of title 37, Code of Federal Regulations, as

17 in effect on the date of the enactment of the Sat18 ellite Home Viewer Extension and Reauthorization

19 Act of 2004, as modified under this subsection.’’;

20 (B) by striking paragraph (2);

21 (C) in paragraph (3)—

22 (i) by redesignating that paragraph as

23 paragraph (2);

24 (ii) in subparagraph (A)—


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H.L.C.

1 (I) by striking ‘‘January 1,

2 1997,’’ and inserting ‘‘January 1,

3 2005,’’; and

4 (II) by striking ‘‘who are not

5 parties to a voluntary agreement filed

6 with the Copyright Office in accord7 ance with paragraph (2)’’;

8 (iii) in subparagraph (C), by striking

9 ‘‘as provided’’ and all that follows through

10 ‘‘later’’ and inserting ‘‘January 1, 2006’’;

11 and

12 (iv) by striking subparagraph (D);

13 and

14 (D) by striking paragraphs (4) and (5)

15 and inserting the following:

16 ‘‘(3) COST OF LIVING ADJUSTMENT.—The roy17 alty rates set forth in subsection (b)(1)(B), as ad18 justed under paragraph (2) of this subsection, shall

19 be adjusted by the Librarian of Congress—

20 ‘‘(A) on January 1, 2005, to reflect any

21 changes occurring during the period beginning

22 on January 1, 2000, and ending on November

23 30, 2004, in the cost of living as determined by

24 the most recent Consumer Price Index (for all


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17

H.L.C.

1 consumers and items) published by the Sec2 retary of Labor during that period; and

3 ‘‘(B) on January 1, 2007, and on January

4 1 of each year thereafter, to reflect any changes

5 occurring during the preceding 12 months in

6 the cost of living as determined by the most re7 cent Consumer Price Index so published.

8 ‘‘(4) REDUCTIONS.—The rate of the royalty fee

9 determined under paragraph (2)—

10 ‘‘(A) for superstations shall be reduced by

11 30 percent; and

12 ‘‘(B) for network stations shall be reduced

13 by 45 percent.’’.

14 (5) Subsection (d) is amended—

15 (A) by amending paragraph (9) to read as

16 follows:

17 ‘‘(9) SUPERSTATION.—The term ‘superstation’

18 means a television broadcast station, other than a

19 network station, licensed by the Federal Commu20 nications Commission that is secondarily transmitted

21 by a satellite carrier. ’’;

22 (B) in paragraph (10)(D), by striking

23 ‘‘(a)(11)’’ and inserting ‘‘(a)(12)’’; and

24 (C) by striking paragraph (12).


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H.L.C.

1 (6) Subsection (a)(7), as redesignated by sec2 tion 102(5) of this Act, is amended—

3 (A) in subparagraph (A), by striking ‘‘who

4 does not reside in an unserved household’’ and

5 inserting ‘‘who is not eligible to receive the

6 transmission under this section’’;

7 (B) in subparagraph (B), by striking ‘‘who

8 do not reside in unserved households’’ and in9 serting ‘‘who are not eligible to receive the

10 transmission under this section’’; and

11 (C) in subparagraph (D), by striking ‘‘is

12 for private home viewing to an unserved house13 hold’’ and inserting ‘‘is to a subscriber who is

14 eligible to receive the transmission under this

15 section’’.

16 SEC. 104. WAIVERS.

17 Section 119(a) of title 17, United States Code, is

18 amended by adding at the end the following new para19 graph:

20 ‘‘(14) WAIVERS.—A subscriber who is denied

21 the secondary transmission of a network station

22 under paragraph (4)(C), or is denied the secondary

23 transmission of a network station or a superstation

24 under paragraph (3)(B), may request a waiver from

25 such denial by submitting a request, through the


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H.L.C.

1 subscriber’s satellite carrier, to the network station

2 or superstation in the local market where the sub3 scriber is located. The network station or supersta4 tion shall accept or reject the subscriber’s request

5 for a waiver within 30 days after receipt of the re6 quest. If the network station or superstation fails to

7 accept or reject the subscriber’s request for a waiver

8 within that 30-day period, that network station or

9 superstation, as the case may be, shall be deemed to

10 agree to the waiver request. Unless specifically stat11 ed by the network station or superstation, a waiver

12 under section 339(c)(2) of the Communications Act

13 shall not constitute a waiver for purposes of this

14 paragraph.’’.

15 SEC. 105. STUDY.

16 No later than June 30, 2008, the Register of Copy17 rights shall report to the Committee on the Judiciary of

18 the House of Representatives and the Committee on the

19 Judiciary of the Senate the Register’s findings and rec20 ommendations on the operation and revision of the statu21 tory licenses under sections 111, 119, and 122 of title 17,

22 United States Code. The report should include, but not

23 be limited to, the following:

24 (1) A comparison of the royalties paid by licens25 ees under such sections, including historical rates of


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H.L.C.

1 increases in these royalties, a comparison between

2 the royalties under each such section and the prices

3 paid in the marketplace for comparable program4 ming.

5 (2) An analysis of the differences in the terms

6 and conditions of the licenses under such sections,

7 an analysis of whether these differences are required

8 or justified by historical, technological, or regulatory

9 differences that affect the satellite and cable indus10 tries, and an analysis of whether either the cable or

11 satellite industry is placed in a competitive disadvan12 tage due to these terms and conditions.

13 (3) An analysis of whether the licenses under

14 such sections are still justified by the bases upon

15 which they were originally created.

16 (4) An analysis of the correlation, if any, be17 tween the royalties, or lack thereof, under such sec18 tions and the fees charged to cable and satellite sub19 scribers, addressing whether cable and satellite com20 panies have passed to subscribers any savings real21 ized as a result of the royalty structure and amounts

22 under such sections.

23 SEC. 106. EFFECT ON CERTAIN PROCEEDINGS.

24 Nothing in this title shall modify any remedy imposed

25 on a party that is required by the judgment of a court


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H.L.C.

1 in any action that was brought before May 1, 2004,

2 against that party for a violation of section 119 of title

3 17, United States Code.


A4518.AAV
78

Chairman SENSENBRENNER. Are there any second-degree amendments to the Smith amendment in the nature of a substitute? 

The gentleman from Illinois, Mr. Hyde? 

Mr. HYDE. Mr. Chairman, I have an amendment at the desk. 

Chairman SENSENBRENNER. The clerk will report the amendment. 

The CLERK. Amendment to the amendment in the nature of a 

substitute to H.R. 4518, offered by Mr. Hyde. 

Mr. HYDE. Mr. Chairman, I ask that reading of the amendment 

be dispensed with. 

Chairman SENSENBRENNER. Without objection, so ordered. 

[The amendment follows:]

79 H.L.C.

AMENDMENT TO THE AMENDMENT IN THE

NATURE OF A SUBSTITUTE TO H.R. 4518

OFFERED BY MR. HYDE

Insert the following after section 103 and redesignate the succeeding sections accordingly:

1 SEC. 104. STATUTORY LICENSE FOR SATELLITE CARRIERS

2 SERVING COMMERCIAL ESTABLISHMENTS.

3 (a) STATUTORY LICENSE.—Section 119 of title 17,

4 United States Code, is amended—

5 (1) in the section heading, by striking ‘‘for pri6 vate home viewing’’;

7 (2) in subsection (a)(1)—

8 (A) by inserting ‘‘or for viewing in a com9 mercial establishment’’ after ‘‘for private home

10 viewing’’ each place it appears; and

11 (B) by striking ‘‘household’’ and inserting

12 ‘‘subscriber’’;

13 (3) in subsection (b), by striking ‘‘for private

14 home viewing’’ each place it appears; and

15 (4) in subsection (d)—

16 (A) in paragraph (1)—

17 (i) by striking ‘‘for private home view18 ing’’; and


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1 (ii) by inserting ‘‘in accordance with

2 the provisions of this section’’ before the

3 period;

4 (B) in paragraph (6), by inserting ‘‘under

5 this section’’ before the period; and

6 (C) in paragraph (8)—

7 (i) by striking ‘‘who’’ and inserting

8 ‘‘or entity that’’;

9 (ii) by striking ‘‘for private home

10 viewing’’; and

11 (iii) by inserting ‘‘in accordance with

12 the provisions of this section’’ before the

13 period.

14 (b) CONFORMING AMENDMENTS.—

15 (1) Section 111 of title 17, United States Code,

16 is amended in subsections (a)(4) and (d)(1)(A), by

17 striking ‘‘for private home viewing’’ .

18 (2) The item relating to section 119 in the table

19 of contents for title 17, United States Code, is

20 amended to read as follows:

‘‘119. Limitations on exclusive rights: Secondary transmissions of superstations

and network stations.’’.

Page 18, line 3, insert ‘‘, or a network station described in subsection (a)(7)(E)’’ before the period.


B4518.AAC
81

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. HYDE. Mr. Chairman, what I propose is a simple matter of 

parity. The lone remaining national superstation issue is Chicago’s 

WGN retransmitted nationwide to over 60 million homes. That 

number is growing. I understand that Comcast, the dominant cable 

provider, is adding WGN in millions of subscriber homes, including 

many thousands in the Washington, D.C., area. 

WGN is also available to patrons of commercial establishments 

that subscribe to cable, but not to the many restaurants and other 

businesses that subscribe to satellite services. This is due to a disparity in the statutory licenses under the Copyright Act. 

If two restaurant patrons want to see the Cubs play the Milwaukee Brewers this Thursday night or the newscast that follows 

the game, the patron in the restaurant is hooked up to cable, and 

he will be able to see the game, but the customer in the restaurant 

with the satellite dish will not. 

The same holds true for the White Sox games, the Chicago Bulls 

telecasts and other programming on WGN. This programming is 

not available elsewhere on broadcast or basic networks to satellite 

viewers. Even Major League baseball’s premium Extra Innings 

service blacks out Cubs and White Sox telecasts within the teams’ 

exclusive territory created by baseball under its antitrust exemption: Northern Illinois, Iowa and Indiana. 

As all here might guess, I have been a long-suffering Cubs baseball fan for many unrequited years and never in my lifetime have 

the Cubs and Sox been the legitimate pennant contenders they are 

this season. With all the tension in the world—and I am biased, 

I concede—watching day baseball from Wrigley Field is one of life’s 

simple and enduring pleasures. To do so amongst fellow fans at a 

local sports hangout is equally enjoyable for the many who cannot 

be there in person. 

Part of our policy objective in renewing the Satellite Home Viewer Act is to balance the playing field to ensure that cable and satellite compete on an equal footing. My amendment encourages competition between the two pay TV services. My amendment does not 

set rates. All I seek is parity and for you to support the legions of 

sports fans nationwide that seek the lifting of this unnecessary restriction. 

Now, I understand that Mr. Smith, the Chairman of the Subcommittee, has agreed to include in the Committee report clarifying language that creation of a compulsory license to permit carriage of WGN telecasts to sports bars must be an integral part of 

the ongoing royalty discussions. And if that is so, I will ask leave 

to withdraw my amendment, and I yield to Mr. Smith. 

Mr. SMITH. I thank the gentleman from Illinois for yielding. 

And the quick response is, yes, the gentleman from Illinois, with 

this amendment, has raised some very serious issues that have farreaching implications, and I would welcome the opportunity not 

only to discuss those issues with him, but to try putting clarifying 

language in report language that would satisfy the gentleman from 

Illinois as well. 

Mr. HYDE. I thank the gentleman for his remarks, and I ask 

leave to withdraw the amendment. 

82

Chairman SENSENBRENNER. Will the gentleman yield for a second? 

Mr. HYDE. Surely. 

Chairman SENSENBRENNER. I certainly think that the offer that 

has been made by the gentleman from Texas is a very good one. 

Now, I can understand why Cubs fans would need to go to the bar 

to watch their team, which has now just lost twice in a row to the 

poor, hapless Milwaukee Brewers. 

I yield back. [Laughter.] 

Mr. HYDE. The gentleman has an unkind streak in him. [Laughter.] 

Chairman SENSENBRENNER. The amendment is withdrawn. 

Are there further amendments? 

Mr. BOUCHER. Mr. Chairman? 

Chairman SENSENBRENNER. The gentleman from Virginia? 

Mr. BOUCHER. Thank you, Mr. Chairman. I have an amendment 

at the desk. 

Chairman SENSENBRENNER. The clerk will report the amendment. 

The CLERK. Amendment to the amendment in the nature of a 

substitute to H.R. 4518, offered by Mr. Boucher and Mr. Goodlatte. 

Chairman SENSENBRENNER. Without objection, the amendment 

will be considered as read. 

[The amendment follows:]

83 H.L.C.

AMENDMENT TO THE AMENDMENT IN THE

NATURE OF A SUBSTITUTE TO H.R. 4518

OFFERED BY MR. BOUCHER AND MR. GOODLATTE

Add at the end of title I the following:

1 SEC. 107. EXPEDITED CONSIDERATION OF VOLUNTARY

2 AGREEMENTS TO PROVIDE SATELLITE SEC3 ONDARY TRANSMISSIONS TO LOCAL MAR4 KETS.

5 Section 119 of title 17, United States Code, is

6 amended by adding at the end the following:

7 ‘‘(f) EXPEDITED CONSIDERATION BY JUSTICE DE8 PARTMENT OF VOLUNTARY AGREEMENTS TO PROVIDE

9 SATELLITE SECONDARY TRANSMISSIONS TO LOCAL MAR10 KETS.—

11 ‘‘(1) IN GENERAL.—In a local market, as de12 fined in section 122(j)(2), in which no satellite car13 rier makes available to subscribers located in that

14 market the secondary transmission of one or more

15 television broadcast stations licensed by the Federal

16 Communications Commission to that market, and

17 two or more satellite carriers request a business re18 view letter in accordance with section 50.6 of title

19 28, Code of Federal Regulations (as in effect on


C4518.AAB
84

2

H.L.C.

1 July 7, 2004), in order to assess the legality under

2 the antitrust laws of proposed business conduct to

3 make or carry out an agreement to provide such sec4 ondary transmission to such local market, the appro5 priate official of the Department of Justice shall re6 spond to the request no later than 90 days after the

7 date on which the request is received.

8 ‘‘(2) DEFINITION.—For purposes of this sub9 section, the term ‘antitrust laws’—

10 ‘‘(A) has the meaning given it in sub11 section (a) of the first section of the Clayton

12 Act (15 U.S.C. 12(a)), except that such term

13 includes section 5 of the Federal Trade Com14 mission Act (15 U.S.C. 45) to the extent such

15 section 5 applies to unfair methods of competi16 tion; and

17 ‘‘(B) includes any State law similar to the

18 laws referred to in paragraph (1).’’.


C4518.AAC
85

Chairman SENSENBRENNER. The gentleman from Virginia will be 

recognized for 5 minutes. 

Mr. BOUCHER. Thank you very much, Mr. Chairman. I am 

pleased to offer this amendment with our Virginia colleague, Mr. 

Goodlatte, with whom I have long been working to bring local television signals delivered by satellite to the Nation’s 211 local television markets. 

Today, we are taking another step in that effort by proposing 

that any agreement entered into between the satellite carriers to 

share satellite capacity solely for the purpose of delivering local signals be considered quickly by the Department of Justice when a 

business review letter is submitted to the DOJ. Specifically, our 

amendment directs that the review by DOJ be completed within 90 

days of the date of receipt by the DOJ of a business review letter. 

At the present time, EchoStar is serving about 120 of the 211 

local television markets across the Nation. DirecTV serves approximately 60 local markets with local TV signals, but soon will match 

the 120 markets that EchoStar is serving with local delivery. 

Unfortunately, due to constraints in satellite capacity and the 

very high cost of building and launching new satellites valued at 

about $500 million per satellite, neither carrier has announced 

plans to expand local service to additional markets any time in the 

near future. And the result is that the less-densely populated markets, the rural markets ranging in population to thinner levels 

from 120 to 211, including many small cities across the United 

States, are not going to be getting local television delivery by satellite any time soon. 

If the carriers agree to share their satellites solely to deliver the 

local signals, they can accomplish twice as much with the existing 

satellites already in orbit. They would be able to serve all 211 local 

markets very soon after a capacity sharing plan is put into effect. 

Separately, the chief executive officers of both EchoStar and 

DirecTV have indicated a strong interest in entering into a satellite 

capacity sharing arrangement very similar to what I have just described. In fact, Mr. Murdoch testified that he would like to have 

such an agreement negotiated with EchoStar at the time that he 

testified before the Energy and Commerce Committee in support of 

his acquisition of DirecTV last year. Mr. Ergen, on behalf of 

EchoStar, had said something very similar on a previous occasion. 

The amendment that we’re offering would assure that if a satellite sharing agreement is achieved, the antitrust review would 

occur quickly and remove any concern that the review would be 

held up for a lengthy period by the antitrust authority. 

I want to thank Mr. Goodlatte, Mr. Smith, Chairman Sensenbrenner, Mr. Conyers, and the members of their staffs who have 

assisted in the review and drafting of this measure, and I very 

much hope it will be the Committee’s pleasure to adopt an amendment that will well serve the interests of television viewers in rural 

America. 

Thank you, Mr. Chairman. I yield back. 

Chairman SENSENBRENNER. The gentleman from Texas, Mr. 

Smith? 

Mr. SMITH. Mr. Chairman, I’d like to thank Mr. Goodlatte and 

Mr. Boucher for offering this amendment. What they have tried to 

achieve, and have succeeded in achieving, I believe, is trying to 

86

make sure that satellite signals are available particularly to the 

small markets in the rural areas. And I thank them for this constructive amendment and urge my colleagues to support it. 

And I will yield the balance of my time to the gentleman from 

Virginia, Mr. Goodlatte. 

Mr. GOODLATTE. I thank the gentleman for yielding, and I am 

pleased to offer this amendment with my friend and colleague, Mr. 

Boucher of Virginia. And I want to thank Chairman Smith, Chairman Sensenbrenner and others who have worked closely with us 

to fashion this amendment. 

This is something that I have worked on, Congressman Boucher 

has worked on, and we have been joined by the overwhelming majority of the Members of the House over the past several years in 

our efforts to get local-to-local service to every community in America so that everyone can have the opportunity to have their local 

news, weather, emergency information, sports, community affairs 

information available to them by satellite. It provides access to information that many in remote areas would not have otherwise. It 

provides competition for those who do have access to an antenna 

or a cable system. 

And I think it is vital that the effort be pushed forward to continue to reach all of these markets. The smaller the market, the 

more difficult this becomes. The House, in fact, the Congress, 

passed legislation a few years ago to create incentives to do this. 

Market activities have, in some respects, overtaken that effort. 

And this effort to encourage those in the market—the major satellite companies—to have the ability to cooperate and get antitrust 

exemptions, as need be, to be able to share these very, very expensive pieces of equipment—satellites mainly—is an important step 

forward, and it will continue to show the Congress’s strong support 

for having rural America included in a new technology that is 

being enjoyed by the overwhelming majority of American citizens 

today at least having access to local service on their satellite. 

Mr. Chairman, I have a full statement that I would ask be made 

part of the record. 

Chairman SENSENBRENNER. Without objection. 

[The prepared statement of Mr. Goodlatte follows:]

PREPARED STATEMENT OF THE HONORABLE BOB GOODLATTE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF VIRGINIA

MR. CHAIRMAN, I AM PLEASED TO OFFER THIS AMENDMENT WITH MY 

FRIEND AND COLLEAGUE, MR. BOUCHER OF VIRGINIA. 

WITH MANY RURAL CONSUMERS STILL MISSING OUT ON LOCAL-INTOLOCAL SERVICE, SATELLITE COMPANIES NEED INCENTIVES TO ROLL OUT 

THIS SERVICE INTO RURAL AREAS SO THAT RURAL CONSUMERS CAN 

ENJOY THE SAME QUALITY PROGRAMMING THAT THOSE IN MORE URBAN 

AREAS ALREADY ENJOY. LOCAL-INTO-LOCAL SERVICE IS THE ONLY WAY 

THAT MANY PEOPLE IN RURAL AREAS WILL HAVE ACCESS TO THE LOCAL 

NEWS AND EMERGENCY INFORMATION PROVIDED BY THEIR LOCAL TELEVISION BROADCAST STATIONS. 

THIS AMENDMENT WOULD REQUIRE THAT THE DEPARTMENT OF JUSTICE PROVIDE AN EXPEDITED REVIEW OF APPLICATIONS SUBMITTED BY 

SATELLITE PROVIDERS WHO SEEK ADVICE AS TO WHETHER THEIR COLLABORATION EFFORTS TO PROVIDE LOCAL-INTO-LOCAL SERVICE TO UNSERVED MARKETS WOULD VIOLATE THE ANTITRUST LAWS. 

UNDER THE PROVISIONS OF THIS AMENDMENT, THE DEPARTMENT OF 

JUSTICE MUST RESPOND TO ANY SUCH APPLICATION WITHIN 90 DAYS 

AFTER IT IS FILED. THIS EXPEDITED PROCESS WILL HELP ENSURE THAT 

SATELLITE PROVIDERS SEEKING AN OPINION AS TO WHETHER THEIR 

87

PROPOSED ACTIVITY WOULD VIOLATE THE ANTITRUST LAWS WILL RECEIVE AN ANSWER IN A TIMELY MANNER, THUS PROVIDING CERTAINTY 

THAT THESE COMPANIES NEED WHEN DECIDING WHETHER TO WORK TOGETHER TO ROLL OUT LOCAL-INTO-LOCAL SERVICE TO CONSUMERS. 

THIS AMENDMENT IS SIMPLY AN ADDITIONAL STEP IN THE EFFORT TO 

GET LOCAL-INTO-LOCAL SERVICE TO ALL 210 MARKETS AS SOON AS POSSIBLE, AND I ENCOURAGE THE MEMBERS OF THE COMMITTEE TO SUPPORT THIS IMPORTANT AMENDMENT.

Mr. GOODLATTE. I yield back. 

Mr. SMITH. I yield back, Mr. Chairman. 

Chairman SENSENBRENNER. The gentleman from North Carolina, 

Mr. Watt? 

Mr. WATT. I move to strike the last word. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. WATT. And I won’t take 5 minutes, unless the answer to my 

question takes longer than I anticipate. 

I’m just wondering what are the consequences if there is a failure 

to respond to this request letter within the 90-day period that this 

amendment says. And I will yield to Mr. Boucher to educate me on 

that. I’m a little concerned that we might be putting the Antitrust 

Division or the Department of Justice in an untenable position 

here. 

Mr. BOUCHER. Well, I thank the gentleman for his inquiry, and 

I thank him also for yielding. 

There is no penalty contained within the amendment if the Department of Justice fails to respond within the allotted time. And 

if they did, it certainly wouldn’t be the first time that an agency 

failed to observe a requirement passed by the Congress that an 

agency act within a certain time frame. 

On the other hand——

Mr. WATT. So the word ‘‘shall’’ on line 5, Page 2, doesn’t really 

mean ‘‘shall.’’ I mean, there are no—if there is a failure to respond, 

it doesn’t automatically occur is what is the question that I’m——

Mr. BOUCHER. That is correct. There would be no automatic approval of the business review of the business plan simply upon the 

failure of DOJ to respond within the allotted time frame. That 

would not be the effect of the amendment. 

Mr. GOODLATTE. Would the gentleman yield? 

Mr. WATT. I yield to Mr. Goodlatte. 

Mr. GOODLATTE. I would add, and I hope the gentleman from 

Virginia would agree with me, that ‘‘shall’’ does mean ‘‘shall,’’ when 

the Congress says that. If somebody does not abide by that, then 

that’s an issue we have to address when we confront that. But we 

should not put in the record here a suggestion that ‘‘shall’’ does not 

mean ‘‘shall.’’

Mr. WATT. Well, I think I’ll—I guess the Court would take judicial notice that the word ‘‘shall’’ does mean ‘‘shall,’’ but I think we 

would be—could possibly be doing a disservice if the word ‘‘shall’’ 

automatically resulted in a consequence that might be counterproductive to the public interest, and that’s the only concern I had. 

And as long as—do you agree that there’s no automatic consequence, there’s no automatic granting or approval of the agreement if they don’t respond within the 90 days? That’s the only 

question I’m concerned with. 

88

Mr. GOODLATTE. I do agree with that, but I don’t want to leave 

the impression that the congressional intent is other than that they 

should act in that time frame. 

Mr. WATT. Okay. I think that satisfies my inquiry, and I will 

yield back. 

Chairman SENSENBRENNER. The question is on the Boucher second-degree amendment to the Smith amendment in the nature of 

a substitute. 

Those in favor will say aye. 

Opposed, no. 

The ayes appear to have it. The ayes have it. The amendment 

to the amendment in the nature of a substitute is agreed to. 

Are there further second-degree amendments to the amendment 

in the nature of a substitute? 

[No response.] 

Chairman SENSENBRENNER. If not, the question occurs on the 

amendment in the nature of a substitute, as amended, offered by 

the gentleman from Texas. 

All in favor, say aye. 

Opposed, no. 

The ayes appear to have it. The ayes have it, and the amendment in the nature of a substitute is agreed to. 

A reporting quorum is present. The question occurs on the motion to report the bill H.R. 4518 favorably, as amended. 

All in favor, say aye. 

Opposed, no. 

The ayes appear to have it. The ayes have it. The motion to report favorably is agreed to. 

Without objection, the bill will be reported favorably to the 

House in the form of a single amendment in the nature of a substitute incorporating the amendments adopted here today. Without 

objection, the Chairman is authorized to move to go to conference 

pursuant to House rules. Without objection, the staff is directed to 

make any technical and conforming changes. Then, all Members 

will be given 2 days, as provided by the rules, in which to submit 

additional, dissenting, supplemental or minority views. 

This concludes the items on the agenda today. The chair would 

like to thank the Members for their prompt attendance. We were 

able to get all this done in 33 minutes. Hopefully, that will set an 

example for the rest of our consideration this year, and the Committee stands adjourned. 

[Whereupon, at 10:32 a.m., the Committee was adjourned.]

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