69–006

106TH CONGRESS REPT. 106–79 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1

SATELLITE COMPETITION AND CONSUMER PROTECTION

ACT

APRIL 7, 1999.—Ordered to be printed

Mr. BLILEY, from the Committee on Commerce,

submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 851]

[Including cost estimate of the Congressional Budget Office]

The Committee on Commerce, to whom was referred the bill

(H.R. 851) to require the Federal Communications Commission to

establish improved predictive models for determining the availability of television broadcast signals, having considered the same, report favorably thereon with an amendment and recommend that

the bill as amended do pass.

CONTENTS

Page

Amendment .............................................................................................................. 2

Purpose and Summary ............................................................................................ 11

Background and Need for Legislation .................................................................... 11

Hearings ................................................................................................................... 15

Committee Consideration ........................................................................................ 15

Rollcall Votes ............................................................................................................ 15

Committee Oversight Findings ............................................................................... 16

Committee on Government Reform Oversight Findings ...................................... 16

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 16

Committee Cost Estimate ....................................................................................... 16

Congressional Budget Office Estimate ................................................................... 16

Federal Mandates Statement ................................................................................. 21

Advisory Committee Statement .............................................................................. 21

Constitutional Authority Statement ...................................................................... 21

Applicability to Legislative Branch ........................................................................ 21

Section-by-Section Analysis of the Legislation ...................................................... 21
2

Changes in Existing Law Made by the Bill, as Reported ..................................... 27

Additional Views ...................................................................................................... 57

AMENDMENT

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Satellite Competition and Consumer Protection

Act’’.

TITLE I—AMENDMENTS TO THE

COMMUNICATIONS ACT OF 1934

SEC. 101. RETRANSMISSION CONSENT.

Section 325(b) of the Communications Act of 1934 (47 U.S.C. 325(b)) is amended—

(1) by amending paragraphs (1) and (2) to read as follows:

‘‘(b)(1) No cable system or other multichannel video programming distributor shall

retransmit the signal of a television broadcast station, or any part thereof, except—

‘‘(A) with the express authority of the originating station;

‘‘(B) pursuant to section 614, in the case of a station electing, in accordance

with this subsection, to assert the right to carriage under such section; or

‘‘(C) pursuant to section 338, in the case of a station electing, in accordance

with this subsection, to assert the right to carriage under such section.

‘‘(2) The provisions of this subsection shall not apply—

‘‘(A) to retransmission of the signal of a noncommercial television broadcast

station;

‘‘(B) to retransmission of the signal of a television broadcast station outside

the station’s local market by a satellite carrier directly to its subscribers, if—

‘‘(i) such station was a superstation on May 1, 1991;

‘‘(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the compulsory license of section 119 of title 17, United States

Code; and

‘‘(iii) the satellite carrier complies with all network nonduplication, syndicated exclusivity, and sports blackout rules adopted by the Commission

pursuant to section 712 of this Act;

‘‘(C) until 7 months after the date of enactment of the Satellite Competition

and Consumer Protection Act, to retransmission of the signal of a television network station directly to a satellite antenna, if the subscriber receiving the signal

is located in an area outside the local market of such station; or

‘‘(D) to retransmission by a cable operator or other multichannel video provider, other than a satellite carrier, of the signal of a television broadcast station outside the station’s local market if such signal was obtained from a satellite carrier and—

‘‘(i) the originating station was a superstation on May 1, 1991; and

‘‘(ii) as of July 1, 1998, such station was retransmitted by a satellite carrier under the compulsory license of section 119 of title 17, United States

Code.’’;

(2) by adding at the end of paragraph (3) the following new subparagraph:

‘‘(C) Within 45 days after the date of enactment of the Satellite Competition and

Consumer Protection Act, the Commission shall commence a rulemaking proceeding

to revise the regulations governing the exercise by television broadcast stations of

the right to grant retransmission consent under this subsection, and such other regulations as are necessary to administer the limitations contained in paragraph (2).

The Commission shall complete all actions necessary to prescribe such regulations

within one year after such date of enactment. Such regulations shall—

‘‘(i) establish election time periods that correspond with those regulations

adopted under subparagraph (B) of this paragraph; and

‘‘(ii) prohibit television broadcast stations that provide retransmission consent

from engaging in discriminatory practices, understandings, arrangements, and

activities, including exclusive contracts for carriage, that prevent a satellite carrier from obtaining retransmission consent from such stations.’’;
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(3) in paragraph (4), by adding at the end the following new sentence: ‘‘If an

originating television station elects under paragraph (3)(C) to exercise its right

to grant retransmission consent under this subsection with respect to a satellite

carrier, the provisions of section 338 shall not apply to the carriage of the signal

of such station by such satellite carrier.’’;

(4) in paragraph (5), by striking ‘‘614 or 615’’ and inserting ‘‘338, 614, or 615’’;

and

(5) by adding at the end the following new paragraph:

‘‘(7) For purposes of this subsection, the term ‘television broadcast station’ means

an over-the-air commercial or noncommercial television broadcast station licensed

by the Commission under subpart E of part 73 of title 47, Code of Federal Regulations, except that such term does not include a low-power or translator television

station.’’.

SEC. 102. MUST-CARRY FOR SATELLITE CARRIERS RETRANSMITTING TELEVISION BROADCAST SIGNALS.

Title III of the Communications Act of 1934 is amended by inserting after section

337 (47 U.S.C. 337) the following new section:

‘‘SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE CARRIERS.

‘‘(a) CARRIAGE OBLIGATIONS.— ‘‘(1) IN GENERAL.—Subject to the limitations of subparagraph (2), each satellite carrier providing secondary transmissions to subscribers located within

the local market of a television broadcast station of a primary transmission

made by that station shall carry upon request all television broadcast stations

located within that local market, subject to section 325(b), by retransmitting the

signal or signals of such stations that are identified by Commission regulations

for purposes of this section.

‘‘(2) EFFECTIVE DATE.—No satellite carrier shall be required to carry local television broadcast stations under paragraph (1) until January 1, 2002.

‘‘(b) GOOD SIGNAL REQUIRED.— ‘‘(1) COSTS.—A television broadcast station asserting its right to carriage

under subsection (a) shall be required to bear the costs associated with delivering a good quality signal to the designated local receive facility of the satellite

carrier or to another facility that is acceptable to at least one-half the stations

asserting the right to carriage in the local market.

‘‘(2) REGULATIONS.—The regulations issued under subsection (g) shall set

forth the obligations necessary to carry out this subsection.

‘‘(c) DUPLICATION NOT REQUIRED.— ‘‘(1) COMMERCIAL STATIONS.—Notwithstanding subsection (a), a satellite carrier shall not be required to carry upon request the signal of any local commercial television broadcast station that substantially duplicates the signal of another local commercial television broadcast station which is secondarily transmitted by the satellite carrier within the same local market, or to carry upon

request the signals of more than 1 local commercial television broadcast station

in a single local market that is affiliated with a particular television network.

‘‘(2) NONCOMMERCIAL STATIONS.—The Commission shall prescribe regulations

limiting the carriage requirements under subsection (a) of satellite carriers with

respect to the carriage of multiple local noncommercial television broadcast stations. To the extent possible, such regulations shall provide the same degree of

carriage by satellite carriers of such multiple stations as is provided by cable

systems under section 615.

‘‘(d) CHANNEL POSITIONING.—No satellite carrier shall be required to provide the

signal of a local television broadcast station to subscribers in that station’s local

market on any particular channel number or to provide the signals in any particular

order, except that the satellite carrier shall retransmit the signal of the local television broadcast stations to subscribers in the stations’ local market on contiguous

channels and provide access to such station’s signals at a nondiscriminatory price

and in a nondiscriminatory manner on any navigational device, on-screen program

guide, or menu.

‘‘(e) COMPENSATION FOR CARRIAGE.—A satellite carrier shall not accept or request

monetary payment or other valuable consideration in exchange either for carriage

of local television broadcast stations in fulfillment of the requirements of this section or for channel positioning rights provided to such stations under this section,

except that any such station may be required to bear the costs associated with delivering a good quality signal to the local receive facility of the satellite carrier.

‘‘(f) REMEDIES.—

‘‘(1) COMPLAINTS BY BROADCAST STATIONS.—Whenever a local television broadcast station believes that a satellite carrier has failed to meet its obligations
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under this section, such station shall notify the carrier, in writing, of the alleged

failure and identify its reasons for believing that the satellite carrier is obligated to carry upon request the signal of such station or has otherwise failed

to comply with other requirements of this section. The satellite carrier shall,

within 30 days of such written notification, respond in writing to such notification and either begin carrying the signal of such station in accordance with the

terms requested or state its reasons for believing that it is not obligated to carry

such signal or is in compliance with other requirements of this section, as the

case may be. A local television broadcast station that is denied carriage in accordance with this section by a satellite carrier or is otherwise harmed by a response by a satellite carrier that it is in compliance with other requirements

of this section may obtain review of such denial or response by filing a compliant with the Commission. Such complaint shall allege the manner in which

such satellite carrier has failed to meet its obligations and the basis for such

allegations.

‘‘(2) OPPORTUNITY TO RESPOND.—The Commission shall afford the satellite

carrier against which a complaint is filed under subparagraph (A) an opportunity to present data and arguments to establish that there has been no failure

to meet its obligations under this section.

‘‘(3) REMEDIAL ACTIONS; DISMISSAL.—Within 120 days after the date a complaint is filed under subparagraph (A), the Commission shall determine whether

the satellite carrier has met its obligations under this chapter. If the Commission determines that the satellite carrier has failed to meet such obligations, the

Commission shall order the satellite carrier, in the case of an obligation to carry

a station, to begin carriage of the station and to continue such carriage for at

least 12 months, or, in the case of the failure to meet other obligations under

this section, shall take other appropriate remedial action. If the Commission determines that the satellite carrier has fully met the requirements of this chapter, the Commission shall dismiss the complaint.

‘‘(g) REGULATIONS BY COMMISSION.—Within 180 days after the date of enactment

of this section, the Commission shall, following a rulemaking proceeding, issue regulations implementing this section.

‘‘(h) DEFINITIONS.—As used in this section:

‘‘(1) SUBSCRIBER.—The term ‘subscriber’ means an entity that receives a secondary transmission service by means of a secondary transmission from a satellite and pays a fee for the service, directly or indirectly, to the satellite carrier

or to a distributor.

‘‘(2) DISTRIBUTOR.—The term ‘distributor’ means an entity which contracts to

distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary

transmission either directly to individual subscribers or indirectly through other

program distribution entities.

‘‘(3) LOCAL RECEIVE FACILITY.—The term ‘local receive facility’ means the reception point in each local market which a satellite carrier designates for delivery of the signal of the station for purposes of retransmission.

‘‘(4) TELEVISION BROADCAST STATION.—The term ‘television broadcast station’

has the meaning given such term in section 325(b)(7).

‘‘(5) SECONDARY TRANSMISSION.—The term ‘secondary transmission’ has the

meaning given such term in section 119(c) of title 17, United States Code.’’.

SEC. 103. NONDUPLICATION OF PROGRAMMING BROADCAST BY LOCAL STATIONS.

Section 712 of the Communications Act of 1934 (47 U.S.C. 612) is amended to

read as follows:

‘‘SEC. 712. NONDUPLICATION OF PROGRAMMING BROADCAST BY LOCAL STATIONS.

‘‘(a) EXTENSION OF NETWORK NONDUPLICATION, SYNDICATED EXCLUSIVITY, AND

SPORTS BLACKOUT TO SATELLITE RETRANSMISSION.—Within 45 days after the date

of enactment of the Satellite Competition and Consumer Protection Act, the Commission shall commence a single rulemaking proceeding to establish regulations

that apply network nonduplication protection, syndicated exclusivity protection, and

sports blackout protection to the retransmission of broadcast signals by satellite carriers to subscribers. To the extent possible consistent with subsection (b), such regulations shall provide the same degree of protection against retransmission of broadcast signals as is provided by the network nonduplication (47 C.F.R. 76.92), syndicated exclusivity (47 C.F.R. 151), and sports blackout (47 C.F.R. 76.67) rules applicable to cable television systems. The Commission shall complete all actions necessary to prescribe regulations required by this section so that the regulations shall

become effective within 1 year after such date of enactment.

‘‘(b) ESTABLISHMENT OF NETWORK NONDUPLICATION BOUNDARIES.—
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‘‘(1) ESTABLISHMENT OF SIGNAL STANDARD FOR NETWORK NONDUPLICATION REQUIRED.—The Commission shall establish a signal intensity standard for purposes of determining the network nonduplication rights of local television broadcast stations. Until revised pursuant to subsection (c), such standard shall be

the Grade B field strength standard prescribed by the Commission in section

73.683 of the Commission’s regulations (47 C.F.R. 73.683). For purposes of this

section, the standard established under this paragraph is referred to as the

‘Network Nonduplication Signal Standard’.

‘‘(2) ESTABLISHMENT OF IMPROVED PREDICTIVE MODEL REQUIRED.—Within 180

days after the date of enactment of the Satellite Competition and Consumer

Protection Act, the Commission shall take all actions necessary, including any

reconsideration, to develop and prescribe by rule a point-to-point predictive

model for reliably and presumptively determining the ability of individual locations to receive signals in accordance with the Network Nonduplication Signal

Standard. In prescribing such model, the Commission shall ensure that such

model takes into account terrain, building structures, and other land cover variations. The Commission shall establish procedures for the continued refinement

in the application of the model by the use of additional data as it becomes available. For purposes of this section, such model is referred to as the ‘Network

Nonduplication Reception Model’, and the area encompassing locations that are

predicted to have the ability to receive such a signal of a particular broadcast

station is referred to as that station’s ‘Reception Model Area’.

‘‘(3) NETWORK NONDUPLICATION.—The network nonduplication regulations required under subsection (a) shall allow a television network station to assert

nonduplication rights as follows:

‘‘(A) If a satellite carrier is retransmitting that station, or any other television broadcast stations located in the same local market, to subscribers

located in that station’s local market, the television network station may

assert nonduplication rights against the satellite carrier throughout the

area within which that station may assert such rights under the rules applicable to cable television systems (47 C.F.R. 76.92), except as provided in

subparagraph (C).

‘‘(B) If a satellite carrier is not retransmitting any television broadcast

stations located in the television network station’s local market to subscribers located in such market, the television network station may assert nonduplication rights against the satellite carrier in the geographic area that

is within such station’s Reception Model Area, but such geographic area

shall not extend beyond the local market of such station.

‘‘(C) If there are 2 or more television network stations that are each affiliates of a single television network within the same local market, neither

such station may assert under subparagraph (A) nonduplication rights

against a satellite carrier in an area that is outside the Reception Model

Area of that station.

‘‘(4) WAIVERS.—The network nonduplication protection described in paragraph

(3) shall not apply to a subscriber who files with the satellite carrier a written

waiver with respect to that subscriber obtained from a television network station allowing the subscriber to receive satellite retransmission of another network station affiliated with that same network. The television network station

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

receipt of the request. The television network station and the satellite carrier

shall maintain a file available to the public that contains such waiver requests

and the acceptances and rejections thereof.

‘‘(5) OBJECTIVE VERIFICATION.—If a subscriber submits a petition to the Commission or an entity designated by the Commission by rule—

‘‘(A) that alleges that such subscriber does not receive a signal that meets

or exceeds the Network Nonduplication Signal Standard; and

‘‘(B) includes a processing fee in an amount prescribed by regulation to

recover the cost of administering the provisions of this paragraph;

the network nonduplication rights described in paragraph (3) shall not apply to

that subscriber unless such station submits to the Commission or such entity

and to the subscriber the written findings and conclusions of a test conducted

in accordance with the provisions of section 73.686(d) of title 47, Code of Federal Regulations, or any successor regulation, demonstrating that the subscriber

receives a signal that meets or exceeds the Network Nonduplication Signal

Standard. A subscriber is required to file a waiver request under paragraph (4)

before filing a petition under this paragraph. A subscriber may not be required

to bear any portion of the cost of such test.
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‘‘(6) RECREATIONAL VEHICLE LOCATION.—In the case of a subscriber to a satellite carrier who has installed satellite reception equipment in a recreational

vehicle, and who has permitted any television network station seeking to assert

network nonduplication rights to verify the motor vehicle registration, license,

and proof of ownership of such vehicle, the subscriber shall be considered to be

outside the local market and Reception Model Area of such station. For purposes of this paragraph, the term ‘recreational vehicle’ does not include any residential manufactured home, as defined in section 603(6) of the National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C.

5402(6)).

‘‘(c) REVIEW AND REVISION OF STANDARDS AND MODEL.— ‘‘(1) ONGOING INQUIRY REQUIRED.—Not later than 2 years after the date of enactment of the Satellite Competition and Consumer Protection Act, the Commission shall conduct an inquiry of the extent to which the Network Nonduplication Signal Standard, the Network Nonduplication Reception Model, and the

Reception Model Areas of television stations are adequate to reliably measure

the ability of consumers to receive an acceptable over-the-air television broadcast signal.

‘‘(2) DATA TO BE CONSIDERED.—In conducting the inquiry required by paragraph (1), the Commission shall consider as evidence that consumers are not

receiving a signal of the quality described in such paragraph—

‘‘(A) the number of subscribers requesting waivers under subsection

(b)(4), and the number of waivers that are denied;

‘‘(B) the number of subscribers submitting petitions under subsection

(b)(5), and the number of such petitions that are granted;

‘‘(C) the results of any consumer research study that may be undertaken

to carry out the purposes of this section; and

‘‘(D) the extent to which consumers are not legally entitled to install

broadcast reception devices assumed in the Commission’s standard.

‘‘(3) REPORT AND ACTION.—The Commission shall submit to the Congress a report on the inquiry required by this subsection not later than the end of the

2-year period described in paragraph (1). The Commission shall complete any

actions necessary to revise the Network Nonduplication Signal Standard, the

Network Nonduplication Reception Model, and the Reception Model Areas of

television stations in accordance with the findings of such inquiry not later than

6 months after the end of such 2-year period.

‘‘(4) DATA SUBMISSION.—The Commission shall prescribe by rule the data required to be submitted by television broadcast stations and by satellite carriers

to the Commission or such designated entity to carry out this subsection, and

the format for submission of such data.’’.

SEC. 104. CONSENT OF MEMBERSHIP TO RETRANSMISSION OF PUBLIC BROADCASTING SERVICE SATELLITE FEED.

Section 396 of the Communications Act of 1934 (47 U.S.C. 396) is amended by

adding at the end the following new subsection:

‘‘(n) The Public Broadcasting Service shall certify to the Board on an annual basis

that a majority of its membership supports or does not support the secondary transmission of the Public Broadcasting Service satellite feed, and provide notice to each

satellite carrier carrying such feed of such certification.’’.

SEC. 105. INQUIRY ON RURAL SERVICE REQUIRED.

(a) INQUIRY REQUIRED.—Within 180 days after the enactment of this section, the

National Telecommunications and Information Administration shall complete an inquiry into the availability of local television broadcast signals in small and rural

markets as part of a service that competes with, or supplements, video programming delivered by satellite carriers or cable operators. The Administration shall submit to the Committee on Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate a report on the results of such inquiry.

(b) ANALYSIS REQUIRED.—The inquiry under subsection (a) shall include an analysis of—

(1) the technological capability of dual satellite dish technology to receive effectively over-the-air broadcast transmissions from the local market, the availability of such capability in small and rural markets and the affordability of

such capability;

(2) the technological capability (including interference), availability, and affordability of wireless cable (or terrestrial wireless) delivery of local broadcast

stations, including the feasibility and desirability of the expedited licensing of

such competitive wireless technologies for rural and small markets; and
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(3) the technological capability, availability, and affordability of a broadcastonly basic tier of cable service.

SEC. 106. DEFINITIONS.

Section 3 of the Communications Act of 1934 (47 U.S.C. 153) is amended—

(1) by redesignating—

(A) paragraphs (49) through (52) as paragraphs (52) through (55), respectively;

(B) paragraphs (39) through (48) as paragraphs (41) through (50), respectively; and

(C) paragraphs (27) through (38) as paragraph (28) through (39), respectively;

(2) by inserting after paragraph (26) the following new paragraph:

‘‘(27) LOCAL MARKET.—

‘‘(A) IN GENERAL.—The term ‘local market’, in the case of both commercial

and noncommercial television broadcast stations, means 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;

and

‘‘(ii) in the case of a noncommercial educational television broadcast

station, the market includes any station that is licensed to a community within the same designated market area as the noncommercial

educational television broadcast station.

‘‘(B) COUNTY OF LICENSE.—In addition to the area described in subparagraph (A), a station’s local market includes the county in which the station’s community of license is located.

‘‘(C) DESIGNATED MARKET AREA.—For purposes of subparagraph (A), the

term ‘designated market area’ means a designated market area, as determined by Nielsen Media Research and published in the DMA Market and

Demographic Report.’’;

(3) by inserting after paragraph (39) (as redesignated by paragraph (1) of this

section) the following new paragraph:

‘‘(40) SATELLITE CARRIER.—The term ‘satellite carrier’ means an entity that

uses the facilities of a satellite or satellite service licensed by the Commission,

and operates in the Fixed-Satellite Service under part 25 of title 47 of the Code

of Federal Regulations or the Direct Broadcast Satellite Service under part 100

of title 47 of the Code of Federal Regulations, to establish and operate a channel

of communications for point-to-multipoint distribution of television station signals, and that owns or leases a capacity or service on a satellite in order to provide such point-to-multipoint distribution, except to the extent that such entity

provides such distribution pursuant to tariff under this Act.’’; and

(3) by inserting after paragraph (50) (as redesignated by paragraph (1) of this

section) the following new paragraph:

‘‘(51) TELEVISION NETWORK; TELEVISION NETWORK STATION.—

‘‘(A) TELEVISION NETWORK.—The term ‘television network’ means a television network in the United States which offers an interconnected program

service on a regular basis for 15 or more hours per week to at least 25 affiliated broadcast stations in 10 or more States.

‘‘(B) TELEVISION NETWORK STATION.—The term ‘television network station’ means a television broadcast station that is owned or operated by, or

affiliated with, a television network.’’.

SEC. 107. COMPLETION OF BIENNIAL REGULATORY REVIEW.

Within 180 days after the date of enactment of this Act, the Commission shall

complete the biennial review required by section 202(h) of the Telecommunications

Act of 1996.

TITLE II—AMENDMENTS TO TITLE 17, UNITED

STATES CODE

SEC. 201. LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY TRANSMISSIONS BY SATELLITE

CARRIERS WITHIN LOCAL MARKETS.

(a) IN GENERAL.—Section 119 of title 17, United States Code, is amended to read

as follows:
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‘‘§ 119. Limitations on exclusive rights; Secondary transmissions by satellite

carriers

‘‘(a) SECONDARY TRANSMISSIONS OF TELEVISION BROADCAST STATIONS BY SAT- ELLITE CARRIERS.— ‘‘(1) STATUTORY LICENSE.—Subject to the provisions of paragraphs (2), (3), (4),

and (5) of this subsection and section 114(d), a secondary transmission that is

in compliance with the rules, regulations, and authorizations of the Federal

Communications Commission of a primary transmission made by a television

broadcast station and embodying a performance or display of a work may have

a statutory license under this section if the satellite carrier makes a direct or

indirect charge to subscribers for the secondary transmission or to a distributor

that has contracted with the satellite carrier for direct or indirect delivery of

the secondary transmission. For purposes of this section, the Public Broadcasting Service satellite feed shall be considered a primary transmission made by

a television broadcast station that is in compliance with the rules, regulations,

and authorizations of the Federal Communications Commission, except that

subsequent to—

‘‘(A) the date when a majority of subscribers to satellite carriers are able

to receive the signal of at least one noncommercial educational television

broadcast station from their satellite carrier within such stations’ local market, or

‘‘(B) 2 years after the effective date of the Satellite Competition and Consumer Protection Act,

whichever is earlier, the statutory license created by this section with respect

to such satellite feed shall be conditioned on the annual certification of support

under section 396(n) of the Communications Act of 1934.

‘‘(2) SUBMISSION OF SUBSCRIBER LISTS.—(A) A satellite carrier that makes secondary transmissions of a primary transmission of a television broadcast station

under paragraph (1) shall, within 90 days after commencing such secondary

transmissions, submit to that station a list identifying all subscribers to which

the satellite carrier currently makes secondary transmissions of that primary

transmission. Such list shall be organized by State, identifying all subscribers

by name (including street address, county, and 9-digit zip code) in that State

that receive secondary transmissions of that primary transmission.

‘‘(B) After the list is submitted under subparagraph (A), the satellite carrier

shall, on the 15th of each month, submit to the television broadcast station a

list identifying by State the names (including street address, county, and 9-digit

zip code) of any subscribers who have been added or dropped as subscribers

since the last submission under this paragraph.

‘‘(C) Subscriber information submitted by a satellite carrier under this paragraph may be used only for purposes of monitoring compliance by the satellite

carrier with the statutory license created by this section. The submission of subscriber lists is only required for those television broadcast stations that place

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) NONCOMPLIANCE WITH REPORTING AND PAYMENT REQUIREMENTS.—Notwithstanding the provisions of paragraph (1), the willful or repeated secondary

transmission to the public that is in compliance with the rules, regulations, and

authorizations of the Federal Communications Commission by a satellite carrier

of a primary transmission made by a television broadcast 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, if the satellite carrier has not deposited the statement of

account and royalty fees required by subsection (b).

‘‘(4) WILLFUL ALTERATIONS.—Notwithstanding the provisions of paragraph (1),

the secondary transmission to the public that is in compliance with the rules,

regulations, and authorizations of the Federal Communications Commission by

a satellite carrier of a primary transmission made by a television broadcast 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 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 a 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.
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‘‘(5) DISCRIMINATION BY SATELLITE CARRIER.—Notwithstanding the provisions

of paragraph (1), the willful or repeated secondary transmission to the public

that is in compliance with the rules, regulations, and authorizations of the Federal Communications Commission by a satellite carrier of a primary transmission made by a television broadcast station and embodying the 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, if the satellite carrier unlawfully discriminates against a distributor.

‘‘(6) GEOGRAPHIC LIMITATION ON SECONDARY TRANSMISSIONS.—The statutory

license created by this section shall apply only to secondary transmissions to

subscribers located in the United States.

‘‘(b) STATUTORY LICENSE FOR SECONDARY TRANSMISSIONS OF TELEVISION BROAD- CAST STATIONS.— ‘‘(1) DEPOSITS WITH THE REGISTER OF COPYRIGHTS.—A satellite carrier whose

secondary transmissions are subject to statutory licensing under subsection (a)

shall, on a semiannual basis, deposit with the Register of Copyrights, in accordance with the requirements that the Register shall prescribe by regulation—

‘‘(A) a statement of account, covering the preceding 6-month period, specifying the names and locations of all television broadcast stations whose signals were retransmitted at any time during that period to subscribers, the

total number of subscribers that received such secondary transmissions,

and such other data as the Register of Copyrights may from time to time

prescribe by regulation, and

‘‘(B) a royalty fee for that 6-month period, computed as follows:

‘‘(i) For each television network station that is retransmitted to subscribers located outside the local market of that station, by multiplying

the total number of subscribers receiving such secondary transmission

during each calendar month by the royalty fee prescribed in section

258.3(b)(2) of title 37, Code of Federal Regulations, as in effect on January 1, 1998.

‘‘(ii) For each superstation that is retransmitted to subscribers located outside the local market of that station, by multiplying the total

number of subscribers receiving such secondary transmission during

each calendar month by the royalty fee prescribed in section 258.3(b)(1)

of title 37, Code of Federal Regulations, as in effect on January 1, 1998.

‘‘(iii) By adding together the totals computed under clauses (i) and

(ii).

For secondary transmissions of a television broadcast station to subscribers who

reside within the local market of that station, there shall be no royalty fee.

‘‘(2) INVESTMENT OF FEES.—The Register of Copyrights shall receive all fees

deposited under this section and, after deducting the reasonable costs incurred

by the Copyright Office under this section (other than the costs deducted under

paragraph (4)), shall deposit the balance in the Treasury of the United States,

in such manner as the Secretary of the Treasury directs. Any funds held by the

Secretary of the Treasury shall be invested in interest bearing securities of the

United States for later distribution with interest by the Librarian of Congress

as provided by this title. The Register may, in the Register’s discretion, at any

time after four years have elapsed since the close of any calendar year, close

out the royalty payments account for that calendar year, and may treat any

funds remaining in such account and any subsequent deposits that would otherwise be attributable to that calendar year as attributable to the succeeding calendar year.

‘‘(3) PERSONS TO WHOM FEES ARE DISTRIBUTED.—The royalty fees deposited

under paragraph (2) shall, in accordance with the procedures provided by paragraph (4), be distributed to those copyright owners whose works were included

in a secondary transmission to the public made by a satellite carrier during the

applicable 6-month accounting period and who file a claim with the Librarian

of Congress under paragraph (4). For purposes of section 802 of this title, with

respect to royalty fees paid by satellite carriers for retransmitting the Public

Broadcasting Service satellite feed, the Public Broadcasting Service shall be

agent for all public television copyright claimants and all Public Broadcasting

Service member stations.

‘‘(4) PROCEDURES FOR DISTRIBUTION.—The royalty fees deposited under paragraph (2) shall be distributed in accordance with the following procedures:

‘‘(A) FILING OF CLAIMS FOR FEES.—During the month of July in each year,

each person claiming to be entitled to statutory license fees for secondary

transmissions under this section shall file a claim with the Librarian of

Congress, in accordance with requirements that the Librarian shall pre-
10

scribe by regulation. For purposes of this paragraph, any claimants may

agree among themselves as to the proportionate division of statutory license

fees among them, may lump their claims together and file them jointly or

as a single claim, or may designate a common agent to receive payment on

their behalf.

‘‘(B) DETERMINATION OF CONTROVERSY; DISTRIBUTIONS.—After the first

day of August of each year, the Librarian of Congress shall determine

whether there exists a controversy concerning the distribution of royalty

fees. If the Librarian determines that no such controversy exists, the Librarian shall, after deducting reasonable administrative costs under this

paragraph, distribute such fees to the copyright owners entitled to receive

them, or to their designated agents. If the Librarian finds the existence of

a controversy, the Librarian shall, pursuant to chapter 8 of this title, convene a copyright arbitration royalty panel to determine the distribution of

fees.

‘‘(C) WITHHOLDING OF FEES DURING CONTROVERSY.—During the pendency

of any proceeding under this subsection, the Librarian of Congress shall

withhold from distribution an amount sufficient to satisfy all claims with

respect to which a controversy exists, but shall have discretion to proceed

to distribute any amounts that are not in controversy.

‘‘(c) DEFINITIONS.—As used in this section—

‘‘(1) DISTRIBUTOR.—The term ‘distributor’ means any entity which contracts to

distribute secondary transmissions from a satellite carrier and, either as a single channel or in a package with other programming, provides the secondary

transmission either directly to individual subscribers or indirectly through other

program distribution entities.

‘‘(2) LOCAL MARKET.—The term ‘local market’ of a television broadcast station

has the meaning given that term section 3 of the Communications Act of 1934

(47 U.S.C. 153) as interpreted under the rules, regulations, and authorizations

of the Federal Communications Commission relating to carriage of television

broadcast signals by satellite carriers.

‘‘(3) PRIMARY TRANSMISSION.—The term ‘primary transmission’ has the meaning given that term in section 111(f) of this title.

‘‘(4) PUBLIC BROADCASTING SERVICE SATELLITE FEED.—The term ‘Public Broadcasting Service satellite feed’ means the national satellite feed distributed by

the Public Broadcasting Service for purposes of this section consisting of educational and informational programming, to which the Public Broadcasting

Service holds national terrestrial broadcast rights.

‘‘(5) SATELLITE CARRIER.—The term ‘satellite carrier’ has the meaning given

that term in section 3 of the Communications Act of 1934.

‘‘(6) SECONDARY TRANSMISSION.—The term ‘secondary transmission’ has the

meaning given that term in section 111(f) of this title.

‘‘(7) SUBSCRIBER.—The term ‘subscriber’ means an entity that receives a secondary transmission service by means of a secondary transmission from a satellite and pays a fee for the service, directly or indirectly, to the satellite carrier

or a distributor.

‘‘(8) SUPERSTATION.—The term ‘superstation’ means a television broadcast station, other than a television network station, licensed by the Federal Communications Commission that is secondarily transmitted by a satellite carrier, and

includes the Public Broadcasting Service satellite feed.

‘‘(9) TELEVISION BROADCAST STATION.—The term ‘television broadcast station’

has the meaning given that term in section 325(b)(7) of the Communications Act

of 1934.

‘‘(10) TELEVISION NETWORK STATION.—The term ‘television network station’

means—

‘‘(A) a television network station (as defined in section 3 of the Communications Act of 1934); or

‘‘(B) a noncommercial educational broadcast station (as defined in section

397 of such Act).

‘‘(d) EXCLUSIVITY OF THIS SECTION WITH RESPECT TO SECONDARY TRANSMISSIONS

OF TELEVISION BROADCAST STATIONS BY SATELLITE TO MEMBERS OF THE PUBLIC.—

No provision of section 111 of this title or any other law (other than this section)

shall be construed to contain any authorization, exemption, or license through which

secondary transmissions by satellite carriers of programming contained in a primary

transmission may be made without obtaining the consent of the copyright owner.’’.

(b) CONFORMING AMENDMENTS.—
11

1See Annual Assessment of the Status of Competition in Markets for the Delivery of Video

Programming, Fifth Annual Report, CS Docket No. 98–102 (rel. Dec. 23, 1998).

(1) TABLE OF CONTENTS.—The table of sections for chapter 1 of title 17,

United States Code, is amended by striking the item relating to section 119 and

inserting the following:

‘‘119. Limitation on exclusive rights: Secondary transmissions by satellite carriers.’’.

(2) STANDING.—Subsection (e) of section 501 of title 17, United States Code,

is repealed.

SEC. 202. REDUCTION IN ROYALTY FEES.

The royalty fee prescribed in section 119(b)(1)(B)(i) of title 17, United States Code,

as amended by section 201(a) of this Act, is reduced by 45 percent, effective upon

July 1, 1999. The royalty fee prescribed in section 119(b)(1)(B)(ii) of such title, as

so amended, is reduced by 30 percent, effective upon July 1, 1999.

PURPOSE AND SUMMARY

The purpose of H.R. 851, the Satellite Competition and Consumer Protection Act, is to promote competition in the market for

multichannel video programming distribution (‘‘MVPD’’) through

the availability of satellite-delivered local broadcast television programming. H.R. 851: (1) clarifies the scope of local broadcast stations’ rights in granting retransmission consent to satellite carriers; (2) delays implementation of satellite must-carry rules until

January 1, 2002; (3) imposes network non-duplication, syndicated

exclusivity, and sports blackout rules for satellite-delivered broadcast programming; (4) provides satellite carriers with a permanent

compulsory copyright license to transmit both local and distant

broadcast television programming; and (5) reduces the copyright

royalty fees that satellite carriers pay for the out-of-market distribution of broadcast programming.

BACKGROUND AND NEED FOR LEGISLATION

THE CURRENT STATE OF VIDEO COMPETITION

At its core, the Satellite Competition and Consumer Protection

Act is about promoting competition in the MVPD market. A recent

Federal Communications Commission (‘‘FCC’’) report on the status

of competition in the MVPD market 1 found that, while

subscribership to satellite television services is growing exponentially, incumbent cable operators still retain a dominant position in

the MVPD market, with about 85 percent of the MVPD market.

Moreover, the FCC’s report also found that cable rates increased an

average of 8.5 percent over the 12-month period from June 1997 to

June 1998, compared to a 1.7 percent increase in the consumer

price index (‘‘CPI’’) for the same period.

It is important to note that these cable rate increases have occurred under the auspices of the FCC’s cable rate regulation regime (the statutory authority for which expired on March 31,

1999). As a result, competition is widely viewed as the most effective tool for protecting consumers against rate increases. Thus, the

Committee is exploring alternative, non-regulatory means to promoting more competition in the MVPD market, and satellite-delivered television is a key component of that effort.
12

2The current compulsory license also includes superstation signals, such as WGN in Chicago.

The superstation license, however, has no geographic limitation similar to the unserved household limitation on network programming signals. 17 U.S.C. §119(a)(1).

EMERGENCE OF SATELLITE TELEVISION

Satellite-delivered television arrived in the mid-1970s, and

emerged as a serious competitor in the MVPD market in the 1990s.

During that period, it never competed directly against other multichannel video programming providers, such as cable. Instead, it

served those markets (particularly rural markets) where cable and

over-the-air broadcast either could not or would not provide service.

But recent advances in satellite technology (e.g., smaller dishes,

added signal capacity) have enabled distributors to compete directly with cable and over-the-air broadcast television service, even

in urban markets. Satellite television has, therefore, become a key

competitor in the MVPD market. To be sure, satellite television is

not yet a complete substitute for other terrestrial-based multichannel systems, such as cable and wireless cable. In part, this is

because satellite television systems have traditionally lacked both

the technology and legal authority to distribute local broadcast signals (i.e., ‘‘local-into-local’’).

Satellite television distributors have, therefore, sought to differentiate their service by offering consumers hundreds of channels

of high-quality national programming, including ‘‘packages’’ of outof-market broadcast signals (e.g., WCBS in New York, or WRAL in

Raleigh) as well as superstation signals (e.g., WGN, WWOR). Notwithstanding the unavailability of local broadcast programming,

consumers have responded positively to satellite television offerings. Satellite television—and particularly high-powered direct

broadcast satellite (‘‘DBS’’) service—has made substantial inroads

into incumbent cable’s historically dominant position in the MVPD

market. The FCC’s report on the MVPD market found that over 10

million households subscribe to satellite television service, and that

two out of three new subscribers to an MVPD service choose DBS.

SHVA’S COMPULSORY LICENSING REGIME

The Committee finds that in order for satellite television to compete more effectively with cable in the MVPD market, Congress

must reform the Satellite Home Viewer Act (‘‘SHVA’’). First enacted in 1988, and then re-authorized in 1994, SHVA governs the

manner in which satellite television distributors can re-transmit

broadcast network programming to households in markets

unserved by either cable or over-the-air broadcast television service. Specifically, SHVA currently extends to satellite television distributors a ‘‘compulsory copyright license’’ to re-transmit distant

network-affiliated signals to ‘‘unserved households.’’ 2 Through a

compulsory license, satellite television distributors avoid the significant transaction costs and practical difficulties of obtaining

clearance for every program carried on every broadcast station. A

compulsory license essentially ‘‘compels’’ a copyright holder to license its programming to a distributor (such as a satellite television operator or a cable operator), in return for the distributor
13

3 ‘‘Grade B intensity’’ measures the strength of the television signal at a given location.

paying a fee that is either statutorily or administratively prescribed.

Congress, however, placed a key limitation on the satellite distributors’ compulsory license, i.e., the license permits satellite television distributors to re-transmit out-of-market network programming only to ‘‘unserved households.’’ SHVA currently defines

‘‘unserved households’’ as those that: (1) cannot receive an over-theair signal of ‘‘grade B intensity’’ 3 from a local broadcast station affiliated with that network using a conventional roof-top antenna,

and (2) have not subscribed to a cable system that provides the signal of a local broadcast station affiliated with that network within

the previous 90 days. Unserved households are colloquially referred

to as ‘‘white areas,’’ because their television sets receive only ‘‘white

snow’’ when using a rooftop antenna.

The unserved household limitation is intended to protect the traditional network-affiliate relationship. Broadcast networks give

local affiliates an exclusive license to distribute network programming in a given market. Local affiliates, in turn, rely upon and

market this exclusivity to attract commercial advertisers. Because

advertising revenue is its only source of revenue, a local broadcast

station strives to reach as many households as possible within its

market. Thus, when a satellite television operator distributes outof-market, or distant, network signals to households that can otherwise receive local signals over the air, the local broadcast station’s

viewership (and hence, advertising revenue) necessarily declines.

The unserved household limitation therefore has helped to preserve

local affiliates’ bargained-for exclusivity, and in doing so, promoted

the development of local programming and free, over-the-air television.

‘‘WHITE AREA’’ LITIGATION

The unserved household limitation, however, has proven to be

difficult to enforce, and as such, has led to a great deal of confusion

and uncertainty for consumers. In March 1997, local television

broadcast stations affiliated with CBS and Fox filed suit in Miami,

Florida, against PrimeTime 24, a distributor of satellite-delivered

network programming. The broadcasters argued that PrimeTime

24 willfully violated SHVA’s unserved household limitation by selling packages of out-of-market broadcast signals to households that

were otherwise able to receive local broadcast signals via conventional rooftop antennas.

In December 1998, the Miami court ruled in favor of the plaintiff

broadcasters in light of the overwhelming evidence that a substantial number of PrimeTime 24’s subscribers lived in close proximity

to local broadcast station transmitters (or, stated technically, lived

‘‘within the stations’ Grade A contours’’). The court, therefore, ordered that satellite television distributors shut off network programming signals for about 2.2 million households. But at a recent

Subcommittee on Telecommunications, Trade, and Consumer Protection hearing, the Committee learned that the scope of the court’s

injunction was unnecessarily broad. Specifically, testimony before

the Subcommittee made clear that as many as 10 percent of the
14

4 17 U.S.C. §119(d)(10) (defining ‘‘unserved household’’ for purposes of determining the scope

of the network station compulsory license).

homes subject to the court’s injunction were genuinely ‘‘unserved’’

and, therefore, eligible for satellite-delivered network programming. While the courts’ ability and authority to interpret the law

is unquestionable, their remedies are sometimes too blunt, particularly in cases, such as this one, where the remedy affects a broad

class of consumers who, to the best of their knowledge, violated no

Federal law. It is, therefore, critical that, on a going-forward basis,

Congress empower expert agencies with implementing and enforcing telecommunications policy.

SHVA REFORM: ENABLING LOCAL-INTO-LOCAL

The key to more competition with cable, as well as a partial solution to the ‘‘white area’’ problem, is to provide satellite carriers

with the legal authority to distribute local broadcast signals back

into local markets, i.e., ‘‘local-into-local.’’ As previously stated, satellite carriers traditionally lacked the technological capability to

provide local broadcast signals, and as a result, sold packages of

distant network signals to meet consumer demand for network programming. Consequently, the satellite compulsory license was limited to superstation and distant signal distribution.

But digital compression, as well as ‘‘spot beam’’ technology, have

advanced to the point where satellite carriers have enough capacity

to carry many (if not all) local broadcast signals from around the

country. The Subcommittee received testimony from two satellite

carriers—Local TV on Satellite, and EchoStar—that, within a couple of years, plan to provide consumers living in numerous cities

with access to their local broadcast stations via satellite. Satellite

television, in other words, now has the technological ability to offer

consumers a complete substitute for incumbent cable offerings.

SHVA REFORM: REFINING DISTANT SIGNAL ELIGIBILITY RULES

The other key component to reforming SHVA is to further refine

the rules regarding consumers’ eligibility for distant network signals. Under current law, a consumer’s eligibility for satellite-delivered network programming turns on whether he or she, among

other things, ‘‘cannot receive, through the use of a conventional

outdoor rooftop receiving antenna, an over-the-air signal of grade

B intensity (as defined by the Federal Communications Commission).’’ 4 This eligibility standard has led to protracted litigation between the television broadcast industry and the satellite television

industry. The broadcast industry argues that the standard is sufficient. The problem (in the broadcast industry’s view) lies not in the

statute but with satellite television distributors that have willfully

violated the unserved household limitation. The satellite industry

maintains that the statute is too vague, as well as outdated given

that it relies on a signal intensity standard that was acceptable to

consumers in the 1950s but may be unacceptable to today’s consumers.

In any event, it is clear to the Committee that criteria for eligibility need refinement, both in terms of their implementation and

enforcement. Consumers have become pawns in a lawsuit between
15

two warring industries, and the Committee seeks to avoid a repeat

of this scenario. At the same time, however, the Committee re-affirms its historical commitment to localism. As previously mentioned, the unserved household limitation served a valuable purpose: to preserve local affiliates’ bargained-for exclusivity, and promote the development of local programming and free, over-the-air

television.

H.R. 851, therefore, seeks to achieve a critical balance between

promoting competition and preserving localism. In doing so, H.R.

851 makes numerous changes to telecommunications and copyright

law to enable local-into-local, as well as to refine the rules for consumer eligibility for distant network signals. Moreover, these

amendments are premised on the idea that, to the extent possible,

similar rules and obligations should apply to similarly situated distributors of multichannel video programming. In other words, because local-into-local will enable satellite television service to serve

as a more complete substitute to cable service, then satellite and

cable service providers should operate on similar regulatory footing.

HEARINGS

The Subcommittee on Telecommunications, Trade, and Consumer

Protection held a hearing on February 24, 1999, to consider issues

relating to reform and reauthorization of the Satellite Home Viewer Act. The Subcommittee received testimony from Deborah

Lathen, Chief, Cable Services Bureau, FCC; Charles C. Hewitt,

President, Satellite Broadcasting and Communications Association

(‘‘SBCA’’); Gene Kimmelman, Co-Director, Consumers Union; Andy

Fisher, Executive Vice President, Cox Broadcasting; Jack Perry,

President and Chief Executive Officer (‘‘CEO’’), Decisionmark; Sophia Collier, President and CEO, Northpoint Technology; Al

DeVaney, President, NewsWeb Broadcasting; John Hutchinson, Executive Vice President and Chief Operating Officer, Local TV on

Satellite; and David K. Moskowitz, Senior Vice President and General Counsel, EchoStar.

COMMITTEE CONSIDERATION

On March 4, 1999, the Subcommittee on Telecommunications,

Trade, and Consumer Protection met in open markup session and

approved H.R. 851 for Full Committee consideration, amended, by

a voice vote. On March 25, 1999, the Full Committee met in open

markup session and ordered H.R. 851 reported to the House,

amended, by a voice vote, a quorum being present.

ROLLCALL VOTES

Clause 3(b) of rule XIII of the Rules of the House requires the

Committee to list the recorded votes on the motion to report legislation and amendments thereto.

There were no recorded votes taken in connection with ordering

H.R. 851 reported. An Amendment in the Nature of a Substitute

offered by Mr. Tauzin, was agreed to, amended, by a voice vote. An

Amendment to the Tauzin Amendment in the Nature of a Substitute offered by Mr. Boucher to require the National Telecommunications and Information Administration to conduct a
16

study and report to Congress on the availability of local television

broadcast signals in small and rural markets as part of a service

that competes with, or supplements, video programming delivered

by satellite carriers or cable operators was agreed to by a voice

vote. An Amendment to the Tauzin Amendment in the Nature of

a Substitute offered by Mrs. Wilson to exempt the provision of the

bill relating to network non-duplication for subscribers that install

a satellite receiver on a recreational vehicle, was agreed to by a

voice vote. An Amendment to the Tauzin Amendment in the Nature of a Substitute offered by Mr. Green to require satellite providers or vendors to provide a free, over-the-air antenna to receive

local broadcast signals to subscribers who have been terminated

from receiving a distant network signal, was withdrawn by unanimous consent.

A motion by Mr. Bliley to order H.R. 851 reported to the House,

amended, was agreed to by a voice vote, a quorum being present.

COMMITTEE OVERSIGHT FINDINGS

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

of Representatives, the Committee held an oversight hearing and

made findings that are reflected in this report.

COMMITTEE ON GOVERNMENT REFORM OVERSIGHT FINDINGS

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House

of Representatives, no oversight findings have been submitted to

the Committee by the Committee on Government Reform.

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the

House of Representatives, the Committee finds that H.R. 851, the

Satellite Competition and Consumer Protection Act, would result in

no new or increased budget authority, entitlement authority, or tax

expenditures or revenues.

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by

the Director of the Congressional Budget Office pursuant to section

402 of the Congressional Budget Act of 1974.

CONGRESSIONAL BUDGET OFFICE ESTIMATE

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

of Representatives, the following is the cost estimate provided by

the Congressional Budget Office pursuant to section 402 of the

Congressional Budget Act of 1974:
17

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, April 7, 1999.

Hon. TOM BLILEY,

Chairman, Committee on Commerce,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 851, the Satellite Competition and Consumer Protection Act.

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

to provide them. The CBO staff contacts are Mark Hadley (for federal costs), Hester Grippando (for revenues), Theresa Fullo (for the

state and local impact), and Jean Wooster (for the private-sector

impact).

Sincerely,

BARRY B. ANDERSON, (For Dan L. Crippen, Director).

Enclosure.

H.R. 851—Satellite Competition and Consumer Protection Act

Summary: H.R. 851 would allow satellite carriers (companies

that use satellite transmissions to provide television signals directly to consumers) to retransmit the signals of local television

broadcast stations into the local markets of those stations. The bill

would allow a local broadcast station to require, by January 1,

2002, satellite carriers that serve customers in its market to transmit its signal. In addition, the bill would eliminate a 90-day waiting period for households that switch from cable to satellite service.

Under the Satellite Home Viewer Act of 1988 (Public Law 100–

667), satellite carriers pay a monthly royalty fee for each subscriber

to the U.S. Copyright Office for the right to retransmit distant network and superstation signals by satellite to subscribers for private

home viewing. The Copyright Office later distributes the fees to

those who own copyrights on the material retransmitted by satellite. The bill would permanently extend the requirement that satellite carriers pay royalty fees to the federal government. Beginning July 1, 1999, the bill would reduce the current royalty fees

charged to superstations by 30 percent, to $0.19 per subscriber per

channel per month, and the fees paid by network stations by 45

percent to $0.15.

CBO estimates that enacting H.R. 851 would result in a net increase in revenues of $477 million over the 2000–2004 period and

of $916 million over the 2005–2009 period. After review by an arbitration panel, royalty fees are paid to copyright owners, along with

accrued interest earnings. With higher royalty collections, the payments to copyright holders would also be higher under H.R. 851,

by an estimated $152 million over the 2000–2004 period, and by

another $750 million over the following five years. Because H.R.

851 would affect both revenues and direct spending, it would be

subject to pay-as-you-go procedures. Assuming appropriation of the

necessary amounts, CBO also estimates that complying with the

provisions of the bill would cost the Federal Communications Commission (FCC) and the National Telecommunications and Informa-
18

tion Administration (NTIA) about $2 million in 2000 and less than

$500,000 in each subsequent year. H.R. 851 would impose both

intergovernmental and private-sector mandates, as defined by the

Unfunded Mandates Reform Act (UMRA), but CBO estimates that

the cost of the mandates would not exceed the thresholds established by UMRA ($50 million in 1996, adjusted for inflation for

intergovernmental entities and $100 million in 1996, adjusted for

inflation for the private sector).

Estimated cost to the Federal government: The estimated budgetary impact of H.R. 851 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—

1999 2000 2001 2002 2003 2004

REVENUES AND DIRECT SPENDING 1

Recepits and spending under current law:

Estimated revenues 2 ................................................ 244 185 118 112 107 101

Estimated budget authority 3 .................................... 272 281 219 142 131 121

Estimated outlays ..................................................... 209 207 259 264 220 182

Proposed changes:

Estimated revenues .................................................. 0 17 92 107 122 139

Estimated budget authority ...................................... 0 18 97 116 136 155

Estimated outlays ..................................................... 0 0 4 19 35 94

Net increase in the surplus ...................................... 0 17 88 88 87 45

Receipts and spending under H.R. 851:

Estimated revenues 2 ................................................ 244 202 210 219 229 240

Estimated budget authority 3 .................................... 272 299 316 258 267 276

Estimated outlays ..................................................... 209 207 263 283 255 276

1 In addition to the effects shown in the table, H.R. 851 would increase spending subject to appropriation by about $2 million in 2000 and

by less than $500,000 in each subsequent year. 2 Includes royalty fee collections from cable television stations, satellite carriers, and digital audio devices.

3 Payments to copyright owners include interest earnings on securities held by the Copyright Office.

Basis of estimate: H.R. 851 would allow a satellite carrier to

make secondary transmissions of local television broadcasts, eliminate the waiting period for switching from cable to satellite service,

reduce the rates of copyright royalty fees, and permanently extend

those fees. All of these provisions would affect payments by satellite carriers to the federal government and payments by the federal government to copyright holders. CBO assumes that payments

from the federal government to copyright holders for satellite

transmissions would follow historical patterns. Assuming enactment of the bill before the end of fiscal year 1999, CBO estimates

that H.R. 851 would increase revenues by $477 million and increase spending by $152 million over the 2000–2004 period.

Secondary transmission.—H.R. 851 would allow satellite carriers

to retransmit the signals of local television broadcast stations into

the local markets of those stations. The bill also would eliminate

a provision of current law that requires households to wait 90 days

between ending cable service and beginning satellite service. These

provisions would make the services provided by satellite carriers

more attractive. As a result, CBO expects that the number of subscribers to satellite services would increase more rapidly than

under current law. Based on information from the Copyright Office,

CBO estimates that under H.R. 851 the annual change in the volume of satellite services would increase from a projected rate of 10

percent a year to 17 percent in 2000.
19

In addition, H.R. 851 would allow a local broadcast station to require, by January 1, 2002, satellite carriers that serve customers

in its market to transmit its signal. This provision would reduce

revenues from fees in two ways. First, satellite carriers might enter

new markets more slowly as they grapple with the technical difficulty of carrying hundreds of local signals. Second, satellite carriers would provide subscribers with fewer distant network signals

and more signals of local broadcast stations. Under the bill, satellite carriers would not pay the royalty fee for local broadcast stations.

CBO estimates that the annual growth in fee volume would

gradually decrease from the projected rate of 17 percent in 2000 to

about 3 percent by 2009. Because the bill’s provisions could increase the incentives for choosing satellite service over cable service, they might lead to a loss in revenues from cable fees. However,

based on information from the Copyright Office and the cable and

satellite industries, CBO estimates that any such reduction in revenues would not be significant.

Reduction in the copyright royalty fee.—A rule issued on October

28, 1997, by the Librarian of Congress, increased the royalty fee to

$0.27 per subscriber per month. H.R. 851 would reduce the royalty

fee on superstations by 30 percent to $0.19 per subscriber per channel per month and the rates on network stations by 45 percent to

$0.15, effective July 1, 1999. Based on information from the Copyright Office, CBO estimates that this provision would reduce revenues by $26 million in fiscal year 2000, when the fees would expire

under current law. But this reduction would be more than offset by

permanently extending the copyright royalty fees.

Extension of copyright royalty fees.—Under current law, the royalty fees for satellite carriers expire on December 31, 1999. H.R.

851 would permanently extend royalty fees, increasing both revenue from satellite carriers and payments to copyright holders (including interest) during the 2000–2004 period. In fiscal year 2000,

the net change in estimated revenues would be relatively small—

$17 million—because the additional revenue from extending the

fees ($43 million) would be partially offset by a reduction in fee

payments due early in the year under current law. By 2004, CBO

expects additional revenues to total $139 million because of the fee

extension.

Payments to copyright holders.—H.R. 851 would result in additional spending because all revenues are eventually paid to copyright holders with interest. Historical spending patterns indicate

that copyright holders may receive the fees and interest up to 10

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

CBO estimates a significant lag between changes in revenues and

the eventual changes in the outlays that stem from copyright fees.

Discretionary spending.—H.R. 851 would require the FCC to conduct rule makings containing technical and business relationships

between satellite carriers and local broadcast stations. The bill also

would require the FCC to report on methods for facilitating the delivery of local signals in local markets, especially smaller markets.

Based on information from the FCC, CBO estimates that implementing H.R. 851 would cost the commission about $1 million in

2000 and less than $500,000 in each subsequent year, subject to
20

the availability of appropriated funds. H.R. 851 would require

NTIA to report on the availability of local television broadcast signals in small and rural markets. Based on information from NTIA,

CBO estimates that conducting the inquiry would cost $500,000 to

$1 million in 2000, subject to the availability of appropriated funds.

Pay-as-you-go considerations.—The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The new changes in

outlays and governmental receipts that are subject to pay-as-yougo procedures are shown in the following table. For the purposes

of enforcing pay-as-you-go procedures, only the effects in the current year, the budget year, and the succeeding four years are

counted.

By fiscal year, in millions of dollars—

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Changes in outlays ................................. 0 0 4 19 35 94 108 125 153 173 191

Changes in receipts ................................ 0 17 92 107 122 139 156 172 186 197 205

Intergovernmental and private-sector impact: H.R. 851 would impose both intergovernmental and private-sector mandates, as defined by UMRA. The cost of the intergovernmental mandate would

be insignificant and would not exceed the threshold established by

UMRA ($50 million in 1996, adjusted for inflation). The cost of the

private-sector mandates imposed on satellite carriers and network

broadcast stations also would not exceed the annual threshold for

private-sector mandates ($100 million in 1996, adjusted for inflation).

Section 104 would impose a mandate on the Public Broadcasting

Service (PBS). The requirement would be both an intergovernmental and private-sector mandate because PBS is owned and operated by local noncommercial television stations that include both

publicly and privately owned stations. This bill would require that

PBS annually certify whether the majority of its member stations

support the retransmission of PBS’s national satellite feed. PBS

must also provide such certification to the satellite carriers that

carry that feed. Based on information from PBS, CBO estimates

that the cost to comply with this mandate would be insignificant

because PBS regularly surveys its members for other purposes and

could easily incorporate this new requirement into existing surveys.

The remaining mandates would impose requirements on satellite

carriers and network stations, all private-sector entities. Section

101 would require satellite carriers to obtain consent from a television broadcast station to rebroadcast programs to subscribers outside the local broadcast. That requirement would be effective seven

months after enactment of this bill. The costs imposed on the satellite carriers would be mostly administrative costs for negotiating

agreements with local network stations. CBO believes that those

costs would be small.

Section 103 would require that both satellite providers and network television stations maintain a publicly available file of subscribers’ requests to allow the satellite retransmission of the signal

of a network affiliate. Information from satellite carriers and networks indicates that most currently maintain some or all of that
21

information. CBO estimates that the additional costs incurred by

the satellite carriers and network television stations would be

small.

An additional economic effect of this bill (not associated with a

federal mandate) would result from changes to the royalty fees paid

by satellite carriers to copyright holders, including some state and

local government entities. The bill would reduce the fees from current levels and permanently extend them. If the current arrangement for collecting royalties were to expire, satellite owners would

have to reach agreement with each copyright owner, which would

be difficult and expensive.

Previous CBO estimate: On March 8, 1999, CBO transmitted a

cost estimate for S. 247, the Satellite Home Viewers Improvements

Act, as ordered reported by the Senate Committee on the Judiciary

on February 25, 1999. That bill would extend the requirement that

satellite carriers pay royalty fees only until December 31, 2004.

Thus, S. 247 and H.R. 851 would have different effects on revenues

and spending over the 2005–2009 period. S. 247 does not contain

provisions affecting the FCC or NTIA.

Estimate prepared by: Federal costs: Mark Hadley; Revenues:

Hester Grippando; Impact on State, local, and tribal governments:

Theresa Gullo; Impact on the private sector: Jean Wooster.

Estimate approved by: Robert A. Sunshine, Deputy Assistant Director for Budget Analysis.

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office

pursuant to section 423 of the Unfunded Mandates Reform Act.

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the

Federal Advisory Committee Act were created by this legislation.

CONSTITUTIONAL AUTHORITY STATEMENT

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

of Representatives, the Committee finds that the Constitutional authority for this legislation is provided in Article I, section 8, clause

3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes.

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act.

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

Section 1 provides for the short title of the Act, the ‘‘Satellite

Competition and Consumer Protection Act.’’
22

TITLE I—AMENDMENTS TO THE COMMUNICATIONS ACT OF 1934

Section 101. Retransmission consent

Section 101 amends subsection 325(b) of the Communications Act

of 1934, which currently requires MVPDs to obtain the consent of

broadcast stations before retransmitting their signals (unless the

station has elected must-carry status pursuant to section 614 (cable

must-carry) or new section 338 (satellite must-carry)). New subsection 325(b), however, provides for four exceptions to the general

retransmission consent rule. First, no MVPD need obtain consent

to retransmit the signal of non-commercial television broadcast stations. Second, no satellite carrier need obtain consent to retransmit

the signal of any station outside the station’s local market if such

station was a superstation as of May 1, 1991, was distributed directly to subscribers pursuant to the satellite compulsory license as

of July 1, 1998, and the satellite carrier complies with all network

non-duplication, syndicated exclusivity, and sports blackout rules

pursuant to new section 712. Third, until seven months after enactment, no satellite carrier need obtain consent to retransmit station

signals to subscribers residing in distant markets. And fourth, no

non-satellite MVPD need obtain consent to retransmit the signal of

any station outside the station’s local market if such station was

a superstation as of May 1, 1991, and the signal was distributed

to the non-satellite MVPD’s headend pursuant to the satellite compulsory license as of July 1, 1998.

Subsection 325(b) further requires the FCC to issue implementing rules within one year of enactment. Subsection 325(b) specifically directs the FCC to ensure that its rules (1) establish election

time periods, and (2) prohibit stations from engaging in discriminatory practices, understandings, arrangements, and activities, including exclusive contracts for carriage, that prevent a satellite carrier from obtaining retransmission consent from stations. With regard to the second criteria, the Committee notes that the FCC’s

rules may not require stations to provide retransmission consent to

different MVPDs on identical terms. Each MVPD is architecturally

unique. Cable systems serve a local or regional territory, whereas

satellite systems have a national footprint. Stations may therefore

properly choose to provide consent on varying terms and conditions

to reflect the inherent differences in video programming distribution systems.

Finally, subsection 325(b) makes clear that a station electing carriage pursuant to retransmission consent may not avail itself of the

satellite must-carry requirements under new section 338. This limitation is parallel to the limitation on stations’ ability to secure

cable carriage pursuant to cable must-carry once they have elected

retransmission consent.

Section 102. Must-carry for satellite carriers retransmitting television broadcast signals

Section 102 creates new section 338 of the Communications Act

of 1934 to address satellite carriers’ must-carry obligations. In particular, subsection 338(a) requires satellite carriers, by January 1,

2002, to carry all local broadcast stations signals in a market in

which it carries at least one such signal. The Committee points out
23

that nothing in subsection 338(a) is intended to compel the carriage

of multiple signals from any one broadcast station, to require the

carriage of both digital and analog signals during the transition to

digital television, or to otherwise supersede existing statutory authority regarding the carriage of analog or digital signals transmitted by broadcasters.

Subsection 338(b) requires television broadcast stations that assert must-carry rights to bear the costs of delivering a good quality

signal to the designated local receive facility of the satellite carrier,

or to an alternative facility that is acceptable to at least one-half

of the stations in the same market that are also asserting mustcarry rights. Subsection 338(c) provides that, notwithstanding the

general must-carry requirement, satellite carriers are not required

to transmit substantially duplicative local television station signals

within the local market, nor are satellite carriers required to retransmit more than one affiliate of a television broadcast network.

With regard to carriage of multiple local non-commercial television

stations, subsection 338(c) directs the FCC to ensure that such stations receive the same degree of carriage by satellite systems that

they presently receive from cable systems.

Pursuant to subsection 338(d), even though they are not required

to provide local television broadcast signals on any particular channel, satellite carriers must retransmit local television broadcast signals to subscribers on contiguous channels, and provide access to

such signals at a nondiscriminatory price, and in a non-discriminatory manner, on any on-screen program guide or similar interface.

Subsection 338(e) provides that satellite carriers may not accept or

request compensation in cash or in kind in exchange for carriage

of a local television broadcast station, or for channel positioning

rights provided to the local television broadcast station.

Subsection 338(f) outlines a complaint procedure for a local television station to follow in the event that the station believes a satellite carrier has wrongly denied carriage to the station under section 338. Finally, subsection 338(g) gives the FCC 180 days to implement satellite must-carry rules.

Section 103. Nonduplication of programming broadcast by local stations

Section 103 replaces section 712 of the Communications Act of

1934 to establish rules relating the non-duplication of broadcast

programming distributed via satellite. As amended, subsection

712(a) requires the FCC to issue rules that enable local broadcast

stations to assert network non-duplication, syndicated exclusivity,

and sports blackout rights against satellite carriers distributing

other broadcast programming. Subsection 712(a) further states

that, to the extent possible, local broadcast stations shall have the

same degree of protection against duplication as they do in the context of cable distribution of other broadcast programming.

Given the uniqueness of the network-affiliate relationship, subsection 712(b) provides specific guidelines with regard to the duplication of network programming via satellite. In the cable context,

the FCC’s network non-duplication rules permit a local network television station to ask that a cable operator delete duplicative network programming from another network television station re-
24

5See 47 C.F.R. § 73.683.

transmitted by the cable operator into a specified zone associated

with the local network television station. Subsection 712(b) is intended to operate as the satellite equivalent of the network non-duplication rules that currently apply to cable operators. To begin

with, it directs the FCC to establish a ‘‘Network Nonduplication

Signal Standard’’ that, at least initially, will be the FCC’s existing

grade B signal contours,5 and to also establish a new ‘‘Network

Nonduplication Reception Model’’ that can reliably and presumptively predict the ability of a consumer to receive a signal in accordance with the Network Nonduplication Signal Standard. Subsection 712(b) directs the FCC, within 180 days of enactment, to incorporate into its Model signal interference caused by terrain,

building structures, and other land cover variations. The FCC is

further directed to continually refine the Model and additional data

as it becomes available. Together, the Signal Standard and the

Model will generate a ‘‘Reception Model Area’’ (‘‘RMA’’) for each television broadcast station, throughout which consumers are predicted to have access to a signal in accordance with the Network

Nonduplication Signal Standard.

Subsection 712(b) then identifies the scope of television broadcast

station’s network non-duplication rights, depending upon whether

the satellite carrier is distributing local broadcast signals back into

their originating markets (i.e., local-into-local). Specifically, in cases

where the satellite carrier is offering local-into-local, a network television station may assert non-duplication rights against a satellite

carrier within the same geographic area throughout which the station may assert non-duplication rights with respect to cable retransmission of television broadcast signals. (However, in cases

where there are two network stations that are affiliates of the

same television network, and both stations are located within the

same local market, neither station may assert non-duplication

rights in an area that is outside the station’s RMA.) In cases where

a satellite carrier is not offering local-into-local, a network television station may assert non-duplication rights against a satellite

carrier within that network television station’s RMA.

The Committee recognizes that, even though subsection 712(b)

requires the FCC to continually refine its Network Nonduplication

Reception Model, there inevitably will be occasions where some

consumers are erroneously deemed ineligible for satellite-delivered

network programming. Accordingly, subsection 712(b) provides consumers with the added protection of an expeditious waiver process.

In particular, subsection 712(b) makes clear that consumers may

seek a waiver from a network television station that has asserted

network non-duplication rights affecting the consumer. The station

must accept or reject the waiver request within 30 days. In the

event the station denies the waiver, subsection 712(b) further permits the consumer to submit a petition to the FCC (or a neutral

third party of the FCC’s choosing), alleging that he or she does not

receive the required signal intensity. The petition will be deemed

granted, unless the network television station submits to the FCC

(or the neutral third party) the written findings and results of a

test that prove that the consumer does, in fact, receive the required
25

signal intensity. Subsection 712(b) makes clear that under no circumstances is the consumer to be required to bear any portion of

the cost of the test. Finally, in cases where consumers adequately

demonstrate that they have installed satellite television services in

a recreational vehicle, subsection 712(b) deems those consumers to

be outside network television stations’ local markets and RMAs,

and thus eligible for satellite-delivered network programming without restriction.

Section 712 provides one other measure to ensure that the eligibility criteria serve the interests of both competition and localism:

an ongoing review of the signal intensity standard and the predictive model. Subsection 712(c) directs the FCC to conduct an inquiry, and report to Congress within two years of enactment, on

the extent to which the Network Nonduplication Signal Standard,

the Network Nonduplication Reception Model, and the Reception

Model Areas are adequate to reliably measure the ability of consumers to receive an acceptable over-the-air television broadcast

signal. As part of its inquiry, the FCC must consider, among other

things, the number of consumers that have requested waivers from

their local broadcaster, and the number of waivers that broadcasters have denied. The Committee believes that, in cases where

the Model fails to accurately predict consumer eligibility, the waiver process is critical to ensuring that consumers are expeditiously

served, with the least amount of administrative and financial burden.

Subsection 712(c) directs the FCC to revise its eligibility rules in

accordance with the findings from its inquiry, within six months of

completing the inquiry and submitting a report to Congress. The

Committee emphasizes that the FCC is required to make only

those changes that flow from the findings from its inquiry. Thus,

if the FCC finds that the grade B signal intensity standard, when

applied in conjunction with a refined predictive model, and an expedited waiver process, adequately serve consumers, then the FCC

shall refrain from modifying the signal intensity standard.

Section 104. Consent of membership to retransmission of public

broadcasting service satellite feed

Section 104 amends section 396 of the Communications Act of

1934 to require the Public Broadcasting Service (‘‘PBS’’) to annually certify to the Corporation for Public Broadcasting (‘‘CPB’’) that

a majority of PBS’ member stations support a national PBS satellite feed. Satellite carriers will have access to the feed through a

compulsory license that is created in subsection 201(a) of H.R. 851.

No later than two years after enactment, however, the compulsory license for a PBS feed will be conditioned upon the annual certification process in subsection 396(n). The Committee views this

annual certification process as a critical component of the compulsory license. While the Committee supports wide availability of satellite-delivered PBS programming (and therefore provides for a conditional compulsory license), the Committee at the same time seeks

to ensure that PBS member stations support the satellite feed.
26

6 17 U.S.C. § 119.

Section 105. Inquiry on rural service required

Section 105 directs the National Telecommunications and Information Administration (‘‘NTIA’’) of the Department of Commerce to

conduct an inquiry into the availability of local television broadcast

signals in small and rural markets as part of a service that competes with, or supplements, video programming delivered by satellite carriers or cable operators. NTIA is further required to submit to the Committee, as well as the Committee on Commerce,

Science, and Transportation of the Senate, a report on the results

of the inquiry.

Section 106. Definitions

Section 106 amends section 3 of the Communications Act of 1934

to include definitions of ‘‘local market,’’ ‘‘satellite carrier,’’ and ‘‘television network; television network station.’’

Section 107. Completion of biennial regulatory review

Section 107 provides that, within 180 days after the date of enactment, the FCC will complete the biennial review required by

section 202(h) of the Telecommunications Act of 1996. In particular, the FCC will issue a notice of proposed rulemaking and a final

report and order on those rules that are covered under ‘‘MM Dkt.

No. 98–35, NOI, FCC 98–37.’’

TITLE II—AMENDMENTS TO TITLE 17, UNITED STATES CODE

Section 201. Limitations on exclusive rights; secondary transmissions by satellite carriers within local markets

(a) In general

Subsection 201(a) amends section 119 of the Copyright Act.6 Subsection 119(a) expressly establishes a compulsory license for satellite carriers to retransmit local and distant television broadcast

station signals to subscribers, irrespective of where they reside.

The license is conditioned upon carrier compliance with FCC rules

and regulations (which are established in Title I of the bill), as well

as compliance with monthly submissions of detailed subscriber

lists.

The Committee notes that new subsection 119(a) removes all provisions regarding the unserved household limitation that are currently in the satellite compulsory license. It is illogical to place territorial restrictions on compulsory licenses, given that they are designed to effectuate telecommunications policy goals (e.g., localism,

and the viability of free, over-the-air television), and not copyright

interests. Therefore, Title I of H.R. 851—which addresses amendments to the Communications Act of 1934—properly identifies any

and all geographic limitations on satellite carriers’ ability to retransmit broadcast programming, and Title II conditions the carriers’ compulsory license on compliance with FCC rules established

pursuant to Title I.

The Committee also notes that new subsection 119(a) unifies the

compulsory license for local and distant licenses, and makes both

licenses permanent (as opposed to sunsetting one, but making the
27

other permanent). Many rural and small markets rely, and will

continue to rely for some time, upon satellite-delivered distant signals as their only source of network programming. It therefore

makes no sense to the Committee to effectively discriminate

against consumers living in these markets by sunsetting the distant signal license, while also making the local license permanent.

Similarly, new subsection 119(a) makes the compulsory license

available for distribution to both residences and commercial establishments alike. Many consumers have no access to multichannel

video programming at their place of residence. They therefore rely

on commercial establishments for access to a wide variety of satellite-delivered information and video programming. The Committee is satisfied that submissions of detailed subscriber lists will

minimize any potential piracy associated with distribution to commercial establishments.

Finally, subsection 119(a) also establishes a compulsory license

for satellite carriers to retransmit a national PBS feed. The compulsory license for a national PBS feed, however, is conditional. Beginning no later than two years after enactment, PBS must make

an annual certification to CPB in accordance with subsection

396(n) of the Communications Act of 1934.

Subsection 119(b) makes clear that the local-into-local license is

royalty-free. Subsection 119(b) also codifies the current statutory

royalty fees paid by satellite carriers for the retransmission of distant network and superstations. Those rates are then reduced by

the percentages provided in section 202 of the bill.

(b) Conforming amendments

Subsection 201(b) makes certain conforming amendments to Title

17. It also removes the standing of local broadcast stations to sue

for infringement under Section 501 of the Copyright Act. The Committee finds that local broadcast stations have sufficient remedies

available to them under the Communications Act of 1934 to protect

their legitimate telecommunications-related interests. It is, therefore, unnecessary to give stations an additional right of action

under the Copyright Act to protect their non-copyright-related interests. This is not to say that stations have no legal recourse in

cases where their copyright interests have been infringed upon. To

the contrary, the Copyright Act still permits a station to bring an

infringement action, but only for those programs for which the station owns the copyright.

Section 202. Reduction in royalty rates

Section 202 of H.R. 851 reduces the copyright royalty fees paid

by satellite carriers for the retransmission of network and superstation signals by 45 percent and 30 percent, respectively.

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 omitted is enclosed in black brackets, new matter is printed in italic,

existing law in which no change is proposed is shown in roman):
28

COMMUNICATIONS ACT OF 1934

* * * * * * *

TITLE I—GENERAL PROVISIONS

* * * * * * *

SEC. 3. DEFINITIONS.

For the purposes of this Act, unless the context otherwise

requires—

(1) * * *

* * * * * * *

(27) LOCAL MARKET.—

(A) IN GENERAL.—The term ‘‘local market’’, in the case of

both commercial and noncommercial television broadcast

stations, means 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; and

(ii) in the case of a noncommercial educational television broadcast station, the market includes any station that is licensed to a community within the same

designated market area as the noncommercial educational television broadcast station.

(B) COUNTY OF LICENSE.—In addition to the area described in subparagraph (A), a station’s local market includes the county in which the station’s community of license is located.

(C) DESIGNATED MARKET AREA.—For purposes of subparagraph (A), the term ‘‘designated market area’’ means a

designated market area, as determined by Nielsen Media

Research and published in the DMA Market and Demographic Report.

ø(27)¿ (28) MOBILE SERVICE.—The term ‘‘mobile service’’

means a radio communication service carried on between mobile stations or receivers and land stations, and by mobile stations communicating among themselves, and includes (A) both

one-way and two-way radio communication services, (B) a mobile service which provides a regularly interacting group of

base, mobile, portable, and associated control and relay stations (whether licensed on an individual, cooperative, or multiple basis) for private one-way or two-way land mobile radio

communications by eligible users over designated areas of operation, and (C) any service for which a license is required in a

personal communications service established pursuant to the

proceeding entitled ‘‘Amendment to the Commission’s Rules to

Establish New Personal Communications Services’’ (GEN

Docket No. 90–314; ET Docket No. 92–100), or any successor

proceeding.
29

ø(28)¿ (29) MOBILE STATION.—The term ‘‘mobile station’’

means a radio-communication station capable of being moved

and which ordinarily does move.

ø(29)¿ (30) NETWORK ELEMENT.—The term ‘‘network element’’ means a facility or equipment used in the provision of

a telecommunications service. Such term also includes features, functions, and capabilities that are provided by means

of such facility or equipment, including subscriber numbers,

databases, signaling systems, and information sufficient for

billing and collection or used in the transmission, routing, or

other provision of a telecommunications service.

ø(30)¿ (31) NUMBER PORTABILITY.—The term ‘‘number portability’’ means the ability of users of telecommunications services to retain, at the same location, existing telecommunications numbers without impairment of quality, reliability, or

convenience when switching from one telecommunications carrier to another.

ø(31)¿ (32)(A) OPERATOR.—The term ‘‘operator’’ on a ship of

the United States means, for the purpose of parts II and III

of title III of this Act, a person holding a radio operator’s license of the proper class as prescribed and issued by the Commission.

(B) ‘‘Operator’’ on a foreign ship means, for the purpose of

part II of title III of this Act, a person holding a certificate as

such of the proper class complying with the provision of the

radio regulations annexed to the International Telecommunication Convention in force, or complying with an agreement or

treaty between the United States and the country in which the

ship is registered.

ø(32)¿ (33) PERSON.—The term ‘‘person’’ includes an individual, partnership, association, joint-stock company, trust, or corporation.

ø(33)¿ (34) RADIO COMMUNICATION.—The term ‘‘radio communication’’ or ‘‘communication by radio’’ means the transmission by radio of writing, signs, signals, pictures, and sounds

of all kinds, including all instrumentalities, facilities, apparatus, and services (among other things, the receipt, forwarding,

and delivery of communications) incidental to such transmission.

ø(34)¿ (35)(A) RADIO OFFICER.—The term ‘‘radio officer’’ on a

ship of the United States means, for the purpose of part II of

title III of this Act, a person holding at least a first or second

class radiotelegraph operator’s license as prescribed and issued

by the Commission. When such person is employed to operate

a radiotelegraph station aboard a ship of the United States, he

is also required to be licensed as a ‘‘radio officer’’ in accordance

with the Act of May 12, 1948 (46 U.S.C. 229a–h).

(B) ‘‘Radio officer’’ on a foreign ship means, for the purpose

of part II of title III of this Act, a person holding at least a first

or second class radiotelegraph operator’s certificate complying

with the provisions of the radio regulations annexed to the

International Telecommunication Convention in force.
30

ø(35)¿ (36) RADIO STATION.—The term ‘‘radio station’’ or ‘‘station’’ means a station equipped to engage in radio communication or radio transmission of energy.

ø(36)¿ (37) RADIOTELEGRAPH AUTO ALARM.—The term ‘‘radiotelegraph auto alarm’’ on a ship of the United States subject

to the provisions of part II of title III of this Act means an

automatic alarm receiving apparatus which responds to the radiotelegraph alarm signal and has been approved by the Commission. ‘‘Radiotelegraph auto alarm’’ on a foreign ship means

an automatic alarm receiving apparatus which responds to the

radiotelegraph alarm signal and has been approved by the government of the country in which the ship is registered: Provided, That the United States and the country in which the

ship is registered are parties to the same treaty, convention, or

agreement prescribing the requirements for such apparatus.

Nothing in this Act or in any other provision of law shall be

construed to require the recognition of a radiotelegraph auto

alarm as complying with part II of title III of this Act, on a

foreign ship subject to such part, where the country in which

the ship is registered and the United States are not parties to

the same treaty, convention, or agreements prescribing the requirements for such apparatus.

ø(37)¿ (38) RURAL TELEPHONE COMPANY.—The term ‘‘rural

telephone company’’ means a local exchange carrier operating

entity to the extent that such entity—

(A) provides common carrier service to any local exchange carrier study area that does not include either—

(i) any incorporated place of 10,000 inhabitants or

more, or any part thereof, based on the most recently

available population statistics of the Bureau of the

Census; or

(ii) any territory, incorporated or unincorporated, included in an urbanized area, as defined by the Bureau

of the Census as of August 10, 1993;

(B) provides telephone exchange service, including exchange access, to fewer than 50,000 access lines;

(C) provides telephone exchange service to any local exchange carrier study area with fewer than 100,000 access

lines; or

(D) has less than 15 percent of its access lines in communities of more than 50,000 on the date of enactment of

the Telecommunications Act of 1996.

ø(38)¿ (39) SAFETY CONVENTION.—The term ‘‘safety convention’’ means the International Convention for the Safety of Life

at Sea in force and the regulations referred to therein.

(40) SATELLITE CARRIER.—The term ‘‘satellite carrier’’ means

an entity that uses the facilities of a satellite or satellite service

licensed by the Commission, and operates in the Fixed-Satellite

Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100

of title 47 of the Code of Federal Regulations, to establish and

operate a channel of communications for point-to-multipoint

distribution of television station signals, and that owns or

leases a capacity or service on a satellite in order to provide
31

such point-to-multipoint distribution, except to the extent that

such entity provides such distribution pursuant to tariff under

this Act.

ø(39)¿ (41)(A) SHIP.—The term ‘‘ship’’ or ‘‘vessel’’ includes

every description of watercraft or other artificial contrivance,

except aircraft, used or capable of being used as a means of

transportation on water, whether or not it is actually afloat.

(B) A ship shall be considered a passenger ship if it carries

or is licensed or certificated to carry more than twelve passengers.

(C) A cargo ship means any ship not a passenger ship.

(D) A passenger is any person carried on board a ship or vessel except (1) the officers and crew actually employed to man

and operate the ship, (2) persons employed to carry on the

business of the ship, and (3) persons on board a ship when

they are carried, either because of the obligation laid upon the

master to carry shipwrecked, distressed, or other persons in

like or similar situations or by reason of any circumstance over

which neither the master, the owner, nor the charterer (if any)

has control.

(E) ‘‘Nuclear ship’’ means a ship provided with a nuclear

powerplant.

ø(40)¿ (42) STATE.—The term ‘‘State’’ includes the District of

Columbia and the Territories and possessions.

ø(41)¿ (43) STATE COMMISSION.—The term ‘‘State commission’’ means the commission, board, or official (by whatever

name designated) which under the laws of any State has regulatory jurisdiction with respect to intrastate operations of carriers.

ø(42)¿ (44) STATION LICENSE.—The term ‘‘station license,’’

‘‘radio station license,’’ or ‘‘license’’ means that instrument of

authorization required by this Act or the rules and regulations

of the Commission made pursuant to this Act, for the use or

operation of apparatus for transmission of energy, or communications, or signals by radio by whatever name the instrument may be designated by the Commission.

ø(43)¿ (45) TELECOMMUNICATIONS.—The term ‘‘telecommunications’’ means the transmission, between or among points

specified by the user, of information of the user’s choosing,

without change in the form or content of the information as

sent and received.

ø(44)¿ (46) TELECOMMUNICATIONS CARRIER.—The term ‘‘telecommunications carrier’’ means any provider of telecommunications services, except that such term does not include

aggregators of telecommunications services (as defined in section 226). A telecommunications carrier shall be treated as a

common carrier under this Act only to the extent that it is engaged in providing telecommunications services, except that

the Commission shall determine whether the provision of fixed

and mobile satellite service shall be treated as common carriage.

ø(45)¿ (47) TELECOMMUNICATIONS EQUIPMENT.—The term

‘‘telecommunications equipment’’ means equipment, other than

customer premises equipment, used by a carrier to provide
32

telecommunications services, and includes software integral to

such equipment (including upgrades).

ø(46)¿ (48) TELECOMMUNICATIONS SERVICE.—The term ‘‘telecommunications service’’ means the offering of telecommunications for a fee directly to the public, or to such classes of

users as to be effectively available directly to the public, regardless of the facilities used.

ø(47)¿ (49) TELEPHONE EXCHANGE SERVICE.—The term ‘‘telephone exchange service’’ means (A) service within a telephone

exchange, or within a connected system of telephone exchanges

within the same exchange area operated to furnish to subscribers intercommunicating service of the character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or (B) comparable service provided

through a system of switches, transmission equipment, or

other facilities (or combination thereof) by which a subscriber

can originate and terminate a telecommunications service.

ø(48)¿ (50) TELEPHONE TOLL SERVICE.—The term ‘‘telephone

toll service’’ means telephone service between stations in different exchange areas for which there is made a separate

charge not included in contracts with subscribers for exchange

service.

(51) TELEVISION NETWORK; TELEVISION NETWORK STATION.— (A) TELEVISION NETWORK.—The term ‘‘television network’’

means a television network in the United States which offers an interconnected program service on a regular basis

for 15 or more hours per week to at least 25 affiliated

broadcast stations in 10 or more States.

(B) TELEVISION NETWORK STATION.—The term ‘‘television

network station’’ means a television broadcast station that

is owned or operated by, or affiliated with, a television network.

ø(49)¿ (52) TELEVISION SERVICE.—

(A) ANALOG TELEVISION SERVICE.—The term ‘‘analog television service’’ means television service provided pursuant

to the transmission standards prescribed by the Commission in section 73.682(a) of its regulations (47 C.F.R.

73.682(a)).

(B) DIGITAL TELEVISION SERVICE.—The term ‘‘digital television service’’ means television service provided pursuant

to the transmission standards prescribed by the Commission in section 73.682(d) of its regulations (47 C.F.R.

73.682(d)).

ø(50)¿ (53) TRANSMISSION OF ENERGY BY RADIO.—The term

‘‘transmission of energy by radio’’ or ‘‘radio transmission of

energy’’ includes both such transmission and all instrumentalities, facilities, and services incidental to such transmission.

ø(51)¿ (54) UNITED STATES.—The term ‘‘United States’’

means the several States and Territories, the District of Columbia, and the possessions of the United States, but does not

include the Canal Zone.

ø(52)¿ (55) WIRE COMMUNICATION.—The term ‘‘wire communication’’ or ‘‘communication by wire’’ means the transmission

of writing, signs, signals, pictures, and sounds of all kinds by
33

aid of wire, cable, or other like connection between the points

of origin and reception of such transmission, including all instrumentalities, facilities, apparatus, and services (among

other things, the receipt, forwarding, and delivery of communications) incidental to such transmission.

* * * * * * *

TITLE III—PROVISIONS RELATING TO

RADIO

PART I—GENERAL PROVISIONS

* * * * * * *

SEC. 325. FALSE DISTRESS SIGNALS; REBROADCASTING; STUDIOS OF

FOREIGN STATIONS.

(a) * * *

ø(b)(1) Following the date that is one year after the date of enactment of the Cable Television Consumer Protection and Competition

Act of 1992, no cable system or other multichannel video programming distributor shall retransmit the signal of a broadcasting station, or any part thereof, except—

ø(A) with the express authority of the originating station; or

ø(B) pursuant to section 614, in the case of a station electing,

in accordance with this subsection, to assert the right to carriage under such section.

ø(2) The provisions of this subsection shall not apply to—

ø(A) retransmission of the signal of a noncommercial broadcasting station;

ø(B) retransmission directly to a home satellite antenna of

the signal of a broadcasting station that is not owned or operated by, or affiliated with, a broadcasting network, if such signal was retransmitted by a satellite carrier on May 1, 1991;

ø(C) retransmission of the signal of a broadcasting station

that is owned or operated by, or affiliated with, a broadcasting

network directly to a home satellite antenna, if the household

receiving the signal is an unserved household; or

ø(D) retransmission by a cable operator or other multichannel video programming distributor of the signal of a superstation if such signal was obtained from a satellite carrier and

the originating station was a superstation on May 1, 1991.

For purposes of this paragraph, the terms ‘‘satellite carrier’’,

‘‘superstation’’, and ‘‘unserved household’’ have the meanings given

those terms, respectively, in section 119(d) of title 17, United

States Code, as in effect on the date of enactment of the Cable Television Consumer Protection and Competition Act of 1992.¿

(b)(1) No cable system or other multichannel video programming

distributor shall retransmit the signal of a television broadcast station, or any part thereof, except—

(A) with the express authority of the originating station;

(B) pursuant to section 614, in the case of a station electing,

in accordance with this subsection, to assert the right to carriage under such section; or
34

(C) pursuant to section 338, in the case of a station electing,

in accordance with this subsection, to assert the right to carriage under such section.

(2) The provisions of this subsection shall not apply—

(A) to retransmission of the signal of a noncommercial television broadcast station;

(B) to retransmission of the signal of a television broadcast

station outside the station’s local market by a satellite carrier

directly to its subscribers, if—

(i) such station was a superstation on May 1, 1991;

(ii) as of July 1, 1998, such station was retransmitted by

a satellite carrier under the compulsory license of section

119 of title 17, United States Code; and

(iii) the satellite carrier complies with all network nonduplication, syndicated exclusivity, and sports blackout

rules adopted by the Commission pursuant to section 712

of this Act;

(C) until 7 months after the date of enactment of the Satellite

Competition and Consumer Protection Act, to retransmission of

the signal of a television network station directly to a satellite

antenna, if the subscriber receiving the signal is located in an

area outside the local market of such station; or

(D) to retransmission by a cable operator or other multichannel video provider, other than a satellite carrier, of the signal of a television broadcast station outside the station’s local

market if such signal was obtained from a satellite carrier

and—

(i) the originating station was a superstation on May 1,

1991; and

(ii) as of July 1, 1998, such station was retransmitted by

a satellite carrier under the compulsory license of section

119 of title 17, United States Code.

(3)(A) * * *

* * * * * * *

(C) Within 45 days after the date of enactment of the Satellite

Competition and Consumer Protection Act, the Commission shall

commence a rulemaking proceeding to revise the regulations governing the exercise by television broadcast stations of the right to grant

retransmission consent under this subsection, and such other regulations as are necessary to administer the limitations contained in

paragraph (2). The Commission shall complete all actions necessary

to prescribe such regulations within one year after such date of enactment. Such regulations shall—

(i) establish election time periods that correspond with those

regulations adopted under subparagraph (B) of this paragraph;

and

(ii) prohibit television broadcast stations that provide retransmission consent from engaging in discriminatory practices, understandings, arrangements, and activities, including exclusive

contracts for carriage, that prevent a satellite carrier from obtaining retransmission consent from such stations.

(4) If an originating television station elects under paragraph

(3)(B) to exercise its right to grant retransmission consent under

this subsection with respect to a cable system, the provisions of sec-
35

tion 614 shall not apply to the carriage of the signal of such station

by such cable system. If an originating television station elects

under paragraph (3)(C) to exercise its right to grant retransmission

consent under this subsection with respect to a satellite carrier, the

provisions of section 338 shall not apply to the carriage of the signal

of such station by such satellite carrier.

(5) The exercise by a television broadcast station of the right to

grant retransmission consent under this subsection shall not interfere with or supersede the rights under section ø614 or 615¿ 338,

614, or 615 of any station electing to assert the right to signal carriage under that section.

* * * * * * *

(7) For purposes of this subsection, the term ‘television broadcast

station’ means an over-the-air commercial or noncommercial television broadcast station licensed by the Commission under subpart

E of part 73 of title 47, Code of Federal Regulations, except that

such term does not include a low-power or translator television station.

* * * * * * *

SEC. 338. CARRIAGE OF LOCAL TELEVISION SIGNALS BY SATELLITE

CARRIERS.

(a) CARRIAGE OBLIGATIONS.— (1) IN GENERAL.—Subject to the limitations of subparagraph

(2), each satellite carrier providing secondary transmissions to

subscribers located within the local market of a television

broadcast station of a primary transmission made by that station shall carry upon request all television broadcast stations

located within that local market, subject to section 325(b), by retransmitting the signal or signals of such stations that are

identified by Commission regulations for purposes of this section.

(2) EFFECTIVE DATE.—No satellite carrier shall be required to

carry local television broadcast stations under paragraph (1)

until January 1, 2002.

(b) GOOD SIGNAL REQUIRED.—

(1) COSTS.—A television broadcast station asserting its right

to carriage under subsection (a) shall be required to bear the

costs associated with delivering a good quality signal to the designated local receive facility of the satellite carrier or to another

facility that is acceptable to at least one-half the stations asserting the right to carriage in the local market.

(2) REGULATIONS.—The regulations issued under subsection

(g) shall set forth the obligations necessary to carry out this

subsection.

(c) DUPLICATION NOT REQUIRED.—

(1) COMMERCIAL STATIONS.—Notwithstanding subsection (a),

a satellite carrier shall not be required to carry upon request

the signal of any local commercial television broadcast station

that substantially duplicates the signal of another local commercial television broadcast station which is secondarily transmitted by the satellite carrier within the same local market, or

to carry upon request the signals of more than 1 local commer-
36

cial television broadcast station in a single local market that is

affiliated with a particular television network.

(2) NONCOMMERCIAL STATIONS.—The Commission shall prescribe regulations limiting the carriage requirements under subsection (a) of satellite carriers with respect to the carriage of

multiple local noncommercial television broadcast stations. To

the extent possible, such regulations shall provide the same degree of carriage by satellite carriers of such multiple stations as

is provided by cable systems under section 615.

(d) CHANNEL POSITIONING.—No satellite carrier shall be required

to provide the signal of a local television broadcast station to subscribers in that station’s local market on any particular channel

number or to provide the signals in any particular order, except that

the satellite carrier shall retransmit the signal of the local television

broadcast stations to subscribers in the stations’ local market on

contiguous channels and provide access to such station’s signals at

a nondiscriminatory price and in a nondiscriminatory manner on

any navigational device, on-screen program guide, or menu.

(e) COMPENSATION FOR CARRIAGE.—A satellite carrier shall not

accept or request monetary payment or other valuable consideration

in exchange either for carriage of local television broadcast stations

in fulfillment of the requirements of this section or for channel positioning rights provided to such stations under this section, except

that any such station may be required to bear the costs associated

with delivering a good quality signal to the local receive facility of

the satellite carrier.

(f) REMEDIES.—

(1) COMPLAINTS BY BROADCAST STATIONS.—Whenever a local

television broadcast station believes that a satellite carrier has

failed to meet its obligations under this section, such station

shall notify the carrier, in writing, of the alleged failure and

identify its reasons for believing that the satellite carrier is obligated to carry upon request the signal of such station or has

otherwise failed to comply with other requirements of this section. The satellite carrier shall, within 30 days of such written

notification, respond in writing to such notification and either

begin carrying the signal of such station in accordance with the

terms requested or state its reasons for believing that it is not

obligated to carry such signal or is in compliance with other requirements of this section, as the case may be. A local television

broadcast station that is denied carriage in accordance with

this section by a satellite carrier or is otherwise harmed by a

response by a satellite carrier that it is in compliance with other

requirements of this section may obtain review of such denial

or response by filing a compliant with the Commission. Such

complaint shall allege the manner in which such satellite carrier has failed to meet its obligations and the basis for such allegations.

(2) OPPORTUNITY TO RESPOND.—The Commission shall afford

the satellite carrier against which a complaint is filed under

subparagraph (A) an opportunity to present data and arguments to establish that there has been no failure to meet its obligations under this section.
37

(3) REMEDIAL ACTIONS; DISMISSAL.—Within 120 days after

the date a complaint is filed under subparagraph (A), the Commission shall determine whether the satellite carrier has met its

obligations under this chapter. If the Commission determines

that the satellite carrier has failed to meet such obligations, the

Commission shall order the satellite carrier, in the case of an

obligation to carry a station, to begin carriage of the station

and to continue such carriage for at least 12 months, or, in the

case of the failure to meet other obligations under this section,

shall take other appropriate remedial action. If the Commission

determines that the satellite carrier has fully met the requirements of this chapter, the Commission shall dismiss the complaint.

(g) REGULATIONS BY COMMISSION.—Within 180 days after the

date of enactment of this section, the Commission shall, following

a rulemaking proceeding, issue regulations implementing this section.

(h) DEFINITIONS.—As used in this section:

(1) SUBSCRIBER.—The term ‘‘subscriber’’ means an entity that

receives a secondary transmission service by means of a secondary transmission from a satellite and pays a fee for the service,

directly or indirectly, to the satellite carrier or to a distributor.

(2) DISTRIBUTOR.—The term ‘‘distributor’’ means an entity

which contracts to distribute secondary transmissions from a

satellite carrier and, either as a single channel or in a package

with other programming, provides the secondary transmission

either directly to individual subscribers or indirectly through

other program distribution entities.

(3) LOCAL RECEIVE FACILITY.—The term ‘‘local receive facility’’

means the reception point in each local market which a satellite

carrier designates for delivery of the signal of the station for

purposes of retransmission.

(4) TELEVISION BROADCAST STATION.—The term ‘‘television

broadcast station’’ has the meaning given such term in section

325(b)(7).

(5) SECONDARY TRANSMISSION.—The term ‘‘secondary transmission’’ has the meaning given such term in section 119(c) of

title 17, United States Code.

* * * * * * *

PART IV—ASSISTANCE FOR PUBLIC TELECOMMUNICATIONS FACILITIES; TELECOMMUNICATIONS DEMONSTRATIONS; CORPORATION FOR PUBLIC BROADCASTING

* * * * * * *
38

Subpart D—Corporation for Public Broadcasting

SEC. 396. DECLARATION OF POLICY.

(a) * * *

* * * * * * *

(n) The Public Broadcasting Service shall certify to the Board on

an annual basis that a majority of its membership supports or does

not support the secondary transmission of the Public Broadcasting

Service satellite feed, and provide notice to each satellite carrier carrying such feed of such certification.

* * * * * * *

TITLE VII—MISCELLANEOUS

PROVISIONS

* * * * * * *

øSEC. 712. SYNDICATED EXCLUSIVITY.

ø(a) The Federal Communications Commission shall initiate a

combined inquiry and rulemaking proceeding for the purpose of—

ø(1) determining the feasibility of imposing syndicated exclusivity rules with respect to the delivery of syndicated programming (as defined by the Commission) for private home viewing

of secondary transmissions by satellite of broadcast station signals similar to the rules issued by the Commission with respect to syndicated exclusivity and cable television; and

ø(2) adopting such rules if the Commission considers the imposition of such rules to be feasible.

ø(b) In the event that the Commission adopts such rules, any

willful and repeated secondary transmission made by a satellite

carrier to the public of a primary transmission embodying the performance or display of a work which violates such Commission

rules shall be subject to the remedies, sanctions, and penalties provided by title V and section 705 of this Act.¿

SEC. 712. NONDUPLICATION OF PROGRAMMING BROADCAST BY LOCAL

STATIONS.

(a) EXTENSION OF NETWORK NONDUPLICATION, SYNDICATED EXCLUSIVITY, AND SPORTS BLACKOUT TO SATELLITE RETRANSMISSION.—Within 45 days after the date of enactment of the Satellite Competition and Consumer Protection Act, the Commission

shall commence a single rulemaking proceeding to establish regulations that apply network nonduplication protection, syndicated exclusivity protection, and sports blackout protection to the retransmission of broadcast signals by satellite carriers to subscribers. To

the extent possible consistent with subsection (b), such regulations

shall provide the same degree of protection against retransmission

of broadcast signals as is provided by the network nonduplication

(47 C.F.R. 76.92), syndicated exclusivity (47 C.F.R. 151), and sports

blackout (47 C.F.R. 76.67) rules applicable to cable television systems. The Commission shall complete all actions necessary to prescribe regulations required by this section so that the regulations

shall become effective within 1 year after such date of enactment.
39

(b) ESTABLISHMENT OF NETWORK NONDUPLICATION BOUND- ARIES.—

(1) ESTABLISHMENT OF SIGNAL STANDARD FOR NETWORK NON- DUPLICATION REQUIRED.—The Commission shall establish a signal intensity standard for purposes of determining the network

nonduplication rights of local television broadcast stations.

Until revised pursuant to subsection (c), such standard shall be

the Grade B field strength standard prescribed by the Commission in section 73.683 of the Commission’s regulations (47

C.F.R. 73.683). For purposes of this section, the standard established under this paragraph is referred to as the ‘‘Network Nonduplication Signal Standard’’.

(2) ESTABLISHMENT OF IMPROVED PREDICTIVE MODEL RE- QUIRED.—Within 180 days after the date of enactment of the

Satellite Competition and Consumer Protection Act, the Commission shall take all actions necessary, including any reconsideration, to develop and prescribe by rule a point-to-point predictive model for reliably and presumptively determining the

ability of individual locations to receive signals in accordance

with the Network Nonduplication Signal Standard. In prescribing such model, the Commission shall ensure that such model

takes into account terrain, building structures, and other land

cover variations. The Commission shall establish procedures for

the continued refinement in the application of the model by the

use of additional data as it becomes available. For purposes of

this section, such model is referred to as the ‘‘Network Nonduplication Reception Model’’, and the area encompassing locations that are predicted to have the ability to receive such a signal of a particular broadcast station is referred to as that station’s ‘‘Reception Model Area’’.

(3) NETWORK NONDUPLICATION.—The network nonduplication

regulations required under subsection (a) shall allow a television network station to assert nonduplication rights as follows:

(A) If a satellite carrier is retransmitting that station, or

any other television broadcast stations located in the same

local market, to subscribers located in that station’s local

market, the television network station may assert nonduplication rights against the satellite carrier throughout

the area within which that station may assert such rights

under the rules applicable to cable television systems (47

C.F.R. 76.92), except as provided in subparagraph (C).

(B) If a satellite carrier is not retransmitting any television broadcast stations located in the television network

station’s local market to subscribers located in such market,

the television network station may assert nonduplication

rights against the satellite carrier in the geographic area

that is within such station’s Reception Model Area, but

such geographic area shall not extend beyond the local

market of such station.

(C) If there are 2 or more television network stations that

are each affiliates of a single television network within the

same local market, neither such station may assert under

subparagraph (A) nonduplication rights against a satellite
40

carrier in an area that is outside the Reception Model Area

of that station.

(4) WAIVERS.—The network nonduplication protection described in paragraph (3) shall not apply to a subscriber who

files with the satellite carrier a written waiver with respect to

that subscriber obtained from a television network station allowing the subscriber to receive satellite retransmission of another network station affiliated with that same network. The

television network station shall accept or reject a subscriber’s

request for a waiver within 30 days after receipt of the request.

The television network station and the satellite carrier shall

maintain a file available to the public that contains such waiver requests and the acceptances and rejections thereof.

(5) OBJECTIVE VERIFICATION.—If a subscriber submits a petition to the Commission or an entity designated by the Commission by rule—

(A) that alleges that such subscriber does not receive a

signal that meets or exceeds the Network Nonduplication

Signal Standard; and

(B) includes a processing fee in an amount prescribed by

regulation to recover the cost of administering the provisions of this paragraph;

the network nonduplication rights described in paragraph (3)

shall not apply to that subscriber unless such station submits

to the Commission or such entity and to the subscriber the written findings and conclusions of a test conducted in accordance

with the provisions of section 73.686(d) of title 47, Code of Federal Regulations, or any successor regulation, demonstrating

that the subscriber receives a signal that meets or exceeds the

Network Nonduplication Signal Standard. A subscriber is required to file a waiver request under paragraph (4) before filing

a petition under this paragraph. A subscriber may not be required to bear any portion of the cost of such test.

(6) RECREATIONAL VEHICLE LOCATION.—In the case of a subscriber to a satellite carrier who has installed satellite reception

equipment in a recreational vehicle, and who has permitted any

television network station seeking to assert network nonduplication rights to verify the motor vehicle registration, license, and

proof of ownership of such vehicle, the subscriber shall be considered to be outside the local market and Reception Model

Area of such station. For purposes of this paragraph, the term

‘‘recreational vehicle’’ does not include any residential manufactured home, as defined in section 603(6) of the National Manufactured Housing Construction and Safety Standards Act of

1974 (42 U.S.C. 5402(6)).

(c) REVIEW AND REVISION OF STANDARDS AND MODEL.—

(1) ONGOING INQUIRY REQUIRED.—Not later than 2 years

after the date of enactment of the Satellite Competition and

Consumer Protection Act, the Commission shall conduct an inquiry of the extent to which the Network Nonduplication Signal

Standard, the Network Nonduplication Reception Model, and

the Reception Model Areas of television stations are adequate to

reliably measure the ability of consumers to receive an acceptable over-the-air television broadcast signal.
41

(2) DATA TO BE CONSIDERED.—In conducting the inquiry required by paragraph (1), the Commission shall consider as evidence that consumers are not receiving a signal of the quality

described in such paragraph—

(A) the number of subscribers requesting waivers under

subsection (b)(4), and the number of waivers that are denied;

(B) the number of subscribers submitting petitions under

subsection (b)(5), and the number of such petitions that are

granted;

(C) the results of any consumer research study that may

be undertaken to carry out the purposes of this section; and

(D) the extent to which consumers are not legally entitled

to install broadcast reception devices assumed in the Commission’s standard.

(3) REPORT AND ACTION.—The Commission shall submit to

the Congress a report on the inquiry required by this subsection

not later than the end of the 2-year period described in paragraph (1). The Commission shall complete any actions necessary to revise the Network Nonduplication Signal Standard,

the Network Nonduplication Reception Model, and the Reception Model Areas of television stations in accordance with the

findings of such inquiry not later than 6 months after the end

of such 2-year period.

(4) DATA SUBMISSION.—The Commission shall prescribe by

rule the data required to be submitted by television broadcast

stations and by satellite carriers to the Commission or such designated entity to carry out this subsection, and the format for

submission of such data.

* * * * * * *

TITLE 17—COPYRIGHTS

* * * * * * *

CHAPTER 1—SUBJECT MATTER AND SCOPE OF

COPYRIGHT

Sec.

101. Definitions.

* * * * * * *

ø119. Limitations on exclusive rights: Secondary transmissions of superstations

and network stations for private home viewing.¿

119. Limitation on exclusive rights: Secondary transmissions by satellite carriers.

* * * * * * *

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

private home viewing

ø(a) SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS.—

ø(1) SUPERSTATIONS.—Subject to the provisions of paragraphs (3), (4), and (6) of this subsection and section 114(d),

secondary transmissions of a primary transmission made by a

superstation and embodying a performance or display of a
42

work 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, 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.

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

(4), (5), and (6) of this subsection and section 114(d), secondary transmissions of programming contained in a primary transmission made by a network station and embodying a performance or display of a work 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, and the carrier makes a direct or indirect charge for such retransmission service to

each subscriber receiving the secondary transmission.

ø(B) SECONDARY TRANSMISSIONS TO UNSERVED HOUSE- HOLDS.—The statutory license provided for in subparagraph (A) shall be limited to secondary transmissions to

persons who reside in unserved households.

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 to 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 currently

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.

ø(3) 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 in-
43

fringement 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) WILLFUL ALTERATIONS.—Notwithstanding the provisions

of paragraphs (1) and (2), the 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 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) VIOLATION OF TERRITORIAL RESTRICTIONS ON STATUTORY

LICENSE FOR NETWORK STATIONS.— ø(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 who does

not reside in an unserved household 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—

ø(i) no damages shall be awarded for such act of infringement if the satellite carrier took corrective action

by promptly withdrawing service from the ineligible

subscriber, and

ø(ii) any statutory damages shall not exceed $5 for

such subscriber for each month during which the violation occurred.

ø(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 who do not reside in unserved households, then in addition to the remedies set forth in subparagraph (A)—

ø(i) if the pattern or practice has been carried out on

a substantially nationwide basis, the court shall order

a permanent injunction barring the secondary transmission by the satellite carrier, for private home viewing, of the primary transmissions of any primary network station affiliated with the same network, and the

court may order statutory damages of not to exceed

$250,000 for each 6-month period during which the

pattern or practice was carried out; and

ø(ii) if the pattern or practice has been carried out

on a local or regional basis, the court shall order a permanent injunction barring the secondary transmission,
44

for private home viewing in that locality or region, by

the satellite carrier of the primary transmissions of

any primary network station affiliated with the same

network, and the court may order statutory damages

of not to exceed $250,000 for each 6-month period during which the pattern or practice was carried out.

ø(C) PREVIOUS SUBSCRIBERS EXCLUDED.—Subparagraphs

(A) and (B) do not apply to secondary transmissions by a

satellite carrier to persons who subscribed to receive such

secondary transmissions from the satellite carrier or a distributor before November 16, 1988.

ø(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 is for private home

viewing to an unserved household.

ø(6) 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 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, if the satellite carrier unlawfully discriminates against a distributor.

ø(7) GEOGRAPHIC LIMITATION ON SECONDARY TRANS- MISSIONS.—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 PROCE- DURES.—

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—

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 net-
45

work 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’s station 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 measurement 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.
46

ø(9) LOSER PAYS FOR SIGNAL INTENSITY MEASUREMENT; RE- COVERY OF MEASUREMENT COSTS IN A CIVIL ACTION.—In any

civil action filed relating to the eligibility of subscribing households as unserved households—

ø(A) a network station challenging such eligibility shall,

within 60 days after receipt of the measurement results

and a statement of such costs, reimburse the satellite carrier for any signal intensity measurement that is conducted by that carrier in response to a challenge by the

network station and that establishes the household is an

unserved household; and

ø(B) a satellite carrier shall, within 60 days after receipt

of the measurement results and a statement of such costs,

reimburse the network station challenging such eligibility

for any signal intensity measurement that is conducted by

that station and that establishes the household is not an

unserved household.

ø(10) 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(b) STATUTORY LICENSE FOR SECONDARY TRANSMISSIONS FOR

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

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—

ø(A) a statement of account, covering the preceding 6-

month period, specifying the names and locations of all

superstations and network stations whose signals were

transmitted, at any time during that period, to subscribers

for private home viewing as described in subsections (a)(1)

and (a)(2), the total number of subscribers that received

such transmissions, and such other data as the Register of

Copyrights may from time to time prescribe by regulation;

and

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;
47

ø(ii) multiplying the number of subscribers receiving

each secondary transmission of a network station during each calendar month by 6 cents; and

ø(iii) adding together the totals computed under

clauses (i) and (ii).

ø(2) INVESTMENT OF FEES.—The Register of Copyrights shall

receive all fees deposited under this section and, after deducting the reasonable costs incurred by the Copyright Office under

this section (other than the costs deducted under paragraph

(4)), shall deposit the balance in the Treasury of the United

States, in such manner as the Secretary of the Treasury directs. All funds held by the Secretary of the Treasury shall be

invested in interest-bearing securities of the United States for

later distribution with interest by the Librarian of Congress as

provided by this title.

ø(3) PERSONS TO WHOM FEES ARE DISTRIBUTED.—The royalty

fees deposited under paragraph (2) shall, in accordance with

the procedures provided by paragraph (4), be distributed to

those copyright owners whose works were included in a secondary transmission for private home viewing made by a satellite

carrier during the applicable 6-month accounting period and

who file a claim with the Librarian of Congress under paragraph (4).

ø(4) PROCEDURES FOR DISTRIBUTION.—The royalty fees deposited under paragraph (2) shall be distributed in accordance

with the following procedures:

ø(A) FILING OF CLAIMS FOR FEES.—During the month of

July in each year, each person claiming to be entitled to

statutory license fees for secondary transmissions for private home viewing shall file a claim with the Librarian of

Congress, in accordance with requirements that the Librarian of Congress shall prescribe by regulation. For purposes of this paragraph, any claimants may agree among

themselves as to the proportionate division of statutory license fees among them, may lump their claims together

and file them jointly or as a single claim, or may designate

a common agent to receive payment on their behalf.

ø(B) DETERMINATION OF CONTROVERSY; DISTRIBUTIONS.—

After the first day of August of each year, the Librarian

of Congress shall determine whether there exists a controversy concerning the distribution of royalty fees. If the

Librarian of Congress determines that no such controversy

exists, the Librarian of Congress shall, after deducting reasonable administrative costs under this paragraph, distribute such fees to the copyright owners entitled to receive

them, or to their designated agents. If the Librarian of

Congress finds the existence of a controversy, the Librarian of Congress shall, pursuant to chapter 8 of this title,

convene a copyright arbitration royalty panel to determine

the distribution of royalty fees.

ø(C) WITHHOLDING OF FEES DURING CONTROVERSY.—During the pendency of any proceeding under this subsection,

the Librarian of Congress shall withhold from distribution

an amount sufficient to satisfy all claims with respect to
48

which a controversy exists, but shall have discretion to

proceed to distribute any amounts that are not in controversy.

ø(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).

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.

ø(3) FEE SET BY COMPULSORY ARBITRATION.—

ø(A) NOTICE OF INITIATION OF PROCEEDINGS.—On or before January 1, 1997, 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 who 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.
49

ø(B) ESTABLISHMENT OF ROYALTY FEES.—In determining

royalty fees under this paragraph, the copyright arbitration royalty panel appointed under chapter 8 shall establish fees for the retransmission of network stations and

superstations that most clearly represent the fair market

value of secondary transmissions. In determining the fair

market value, the panel shall base its decision on economic, competitive, and programming information presented by the parties, including—

ø(i) the competitive environment in which such programming is distributed, the cost of similar signals in

similar private and compulsory license marketplaces,

and any special features and conditions of the retransmission marketplace;

ø(ii) the economic impact of such fees on copyright

owners and satellite carriers; and

ø(iii) the impact on the continued availability of secondary transmissions to the public.

ø(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—

ø(i) is made by a copyright arbitration royalty panel

in an arbitration proceeding under this paragraph and

is adopted by the Librarian of Congress under section

802(f), or

ø(ii) is established by the Librarian of Congress

under section 802(f),

shall become effective as provided in section 802(g) or July

1, 1997, whichever is later.

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

ø(1) DISTRIBUTOR.—The term ‘‘distributor’’ means an entity

which contracts to distribute secondary transmissions from a

satellite carrier and, either as a single channel or in a package

with other programming, provides the secondary transmission

either directly to individual subscribers for private home viewing or indirectly through other program distribution entities.

ø(2) NETWORK STATION.—The term ‘‘network station’’

means—

ø(A) a television broadcast station, including any translator station or terrestrial satellite station that rebroadcasts all or substantially all of the programming broadcast

by a network station, 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; or
50

ø(B) a noncommercial educational broadcast station (as

defined in section 397 of the Communications Act of 1934).

ø(3) PRIMARY NETWORK STATION.—The term ‘‘primary network station’’ means a network station that broadcasts or rebroadcasts the basic programming service of a particular national network.

ø(4) PRIMARY TRANSMISSION.—The term ‘‘primary transmission’’ has the meaning given that term in section 111(f) of

this title.

ø(5) PRIVATE HOME VIEWING.—The term ‘‘private home viewing’’ means the viewing, for private use in a household by

means of satellite reception equipment which is operated by an

individual in that household and which serves only such household, of a secondary transmission delivered by a satellite carrier of a primary transmission of a television station licensed

by the Federal Communications Commission.

ø(6) SATELLITE CARRIER.—The term ‘‘satellite carrier’’ means

an entity that uses the facilities of a satellite or satellite service licensed by the Federal Communications Commission and

operates in the Fixed-Satellite Service under part 25 of title 47

of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of the Code of Federal

Regulations, to establish and operate a channel of communications for point-to-multipoint distribution of television station

signals, and that owns or leases a capacity or service on a satellite in order to provide such point-to-multipoint distribution,

except to the extent that such entity provides such distribution

pursuant to tariff under the Communications Act of 1934,

other than for private home viewing.

ø(7) SECONDARY TRANSMISSION.—The term ‘‘secondary transmission’’ has the meaning given that term in section 111(f) of

this title.

ø(8) SUBSCRIBER.—The term ‘‘subscriber’’ means an individual who receives a secondary transmission service for private

home viewing by means of a secondary transmission from a

satellite carrier and pays a fee for the service, directly or indirectly, to the satellite carrier or to a distributor.

ø(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.

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

household that—

ø(A) cannot receive, through the use of a conventional

outdoor rooftop receiving antenna, an over-the-air signal of

grade B intensity (as defined by the Federal Communications Commission) of a primary network station affiliated

with that network, and

ø(B) has not, within 90 days before the date on which

that household subscribes, either initially or on renewal, to

receive secondary transmissions by a satellite carrier of a

network station affiliated with that network, subscribed to
51

a cable system that provides the signal of a primary network station affiliated with that network.

ø(11) LOCAL MARKET.—The term ‘‘local market’’ means the

area encompassed within a network station’s predicted Grade

B contour as that contour is defined by the Federal Communications Commission.

ø(e) EXCLUSIVITY OF THIS SECTION WITH RESPECT TO SECONDARY

TRANSMISSIONS OF BROADCAST STATIONS BY SATELLITE TO MEM- BERS OF THE PUBLIC.—No provision of section 111 of this title or

any other law (other than this section) shall be construed to contain any authorization, exemption, or license through which secondary transmissions by satellite carrier for private home viewing

of programming contained in a primary transmission made by a

superstation or a network station may be made without obtaining

the consent of the copyright owner.¿

§ 119. Limitations on exclusive rights; Secondary transmissions by satellite carriers

(a) SECONDARY TRANSMISSIONS OF TELEVISION BROADCAST STA- TIONS BY SATELLITE CARRIERS.— (1) STATUTORY LICENSE.—Subject to the provisions of paragraphs (2), (3), (4), and (5) of this subsection and section 114(d),

a secondary transmission that is in compliance with the rules,

regulations, and authorizations of the Federal Communications

Commission of a primary transmission made by a television

broadcast station and embodying a performance or display of

a work may have a statutory license under this section if the

satellite carrier makes a direct or indirect charge to subscribers

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

of the secondary transmission. For purposes of this section, the

Public Broadcasting Service satellite feed shall be considered a

primary transmission made by a television broadcast station

that is in compliance with the rules, regulations, and authorizations of the Federal Communications Commission, except

that subsequent to—

(A) the date when a majority of subscribers to satellite

carriers are able to receive the signal of at least one noncommercial educational television broadcast station from

their satellite carrier within such stations’ local market, or

(B) 2 years after the effective date of the Satellite Competition and Consumer Protection Act,

whichever is earlier, the statutory license created by this section

with respect to such satellite feed shall be conditioned on the

annual certification of support under section 396(n) of the Communications Act of 1934.

(2) SUBMISSION OF SUBSCRIBER LISTS.—(A) A satellite carrier

that makes secondary transmissions of a primary transmission

of a television broadcast station under paragraph (1) shall,

within 90 days after commencing such secondary transmissions,

submit to that station a list identifying all subscribers to which

the satellite carrier currently makes secondary transmissions of

that primary transmission. Such list shall be organized by

State, identifying all subscribers by name (including street ad-
52

dress, county, and 9-digit zip code) in that State that receive

secondary transmissions of that primary transmission.

(B) After the list is submitted under subparagraph (A), the

satellite carrier shall, on the 15th of each month, submit to the

television broadcast station a list identifying by State the names

(including street address, county, and 9-digit zip code) of any

subscribers who have been added or dropped as subscribers

since the last submission under this paragraph.

(C) Subscriber information submitted by a satellite carrier

under this paragraph may be used only for purposes of monitoring compliance by the satellite carrier with the statutory license

created by this section. The submission of subscriber lists is

only required for those television broadcast stations that place

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) NONCOMPLIANCE WITH REPORTING AND PAYMENT REQUIREMENTS.—Notwithstanding the provisions of paragraph (1), the

willful or repeated secondary transmission to the public that is

in compliance with the rules, regulations, and authorizations of

the Federal Communications Commission by a satellite carrier

of a primary transmission made by a television broadcast 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, if the satellite carrier has not deposited the statement of account and royalty fees required by subsection (b).

(4) WILLFUL ALTERATIONS.—Notwithstanding the provisions

of paragraph (1), the secondary transmission to the public that

is in compliance with the rules, regulations, and authorizations

of the Federal Communications Commission by a satellite carrier of a primary transmission made by a television broadcast

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 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 a 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.

(5) DISCRIMINATION BY SATELLITE CARRIER.—Notwithstanding the provisions of paragraph (1), the willful or repeated secondary transmission to the public that is in compliance with

the rules, regulations, and authorizations of the Federal Communications Commission by a satellite carrier of a primary

transmission made by a television broadcast station and embodying the 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,
53

if the satellite carrier unlawfully discriminates against a distributor.

(6) GEOGRAPHIC LIMITATION ON SECONDARY TRANS- MISSIONS.—The statutory license created by this section shall

apply only to secondary transmissions to subscribers located in

the United States.

(b) STATUTORY LICENSE FOR SECONDARY TRANSMISSIONS OF TEL- EVISION BROADCAST STATIONS.— (1) DEPOSITS WITH THE REGISTER OF COPYRIGHTS.—A satellite

carrier whose secondary transmissions are subject to statutory

licensing under subsection (a) shall, on a semiannual basis, deposit with the Register of Copyrights, in accordance with the requirements that the Register shall prescribe by regulation—

(A) a statement of account, covering the preceding 6-

month period, specifying the names and locations of all television broadcast stations whose signals were retransmitted

at any time during that period to subscribers, the total

number of subscribers that received such secondary transmissions, and such other data as the Register of Copyrights

may from time to time prescribe by regulation, and

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

follows:

(i) For each television network station that is retransmitted to subscribers located outside the local

market of that station, by multiplying the total number

of subscribers receiving such secondary transmission

during each calendar month by the royalty fee prescribed in section 258.3(b)(2) of title 37, Code of Federal Regulations, as in effect on January 1, 1998.

(ii) For each superstation that is retransmitted to

subscribers located outside the local market of that station, by multiplying the total number of subscribers receiving such secondary transmission during each calendar month by the royalty fee prescribed in section

258.3(b)(1) of title 37, Code of Federal Regulations, as

in effect on January 1, 1998.

(iii) By adding together the totals computed under

clauses (i) and (ii).

For secondary transmissions of a television broadcast station to

subscribers who reside within the local market of that station,

there shall be no royalty fee.

(2) INVESTMENT OF FEES.—The Register of Copyrights shall

receive all fees deposited under this section and, after deducting

the reasonable costs incurred by the Copyright Office under this

section (other than the costs deducted under paragraph (4)),

shall deposit the balance in the Treasury of the United States,

in such manner as the Secretary of the Treasury directs. Any

funds held by the Secretary of the Treasury shall be invested in

interest bearing securities of the United States for later distribution with interest by the Librarian of Congress as provided

by this title. The Register may, in the Register’s discretion, at

any time after four years have elapsed since the close of any calendar year, close out the royalty payments account for that calendar year, and may treat any funds remaining in such ac-
54

count and any subsequent deposits that would otherwise be attributable to that calendar year as attributable to the succeeding calendar year.

(3) PERSONS TO WHOM FEES ARE DISTRIBUTED.—The royalty

fees deposited under paragraph (2) shall, in accordance with

the procedures provided by paragraph (4), be distributed to

those copyright owners whose works were included in a secondary transmission to the public made by a satellite carrier during the applicable 6-month accounting period and who file a

claim with the Librarian of Congress under paragraph (4). For

purposes of section 802 of this title, with respect to royalty fees

paid by satellite carriers for retransmitting the Public Broadcasting Service satellite feed, the Public Broadcasting Service

shall be agent for all public television copyright claimants and

all Public Broadcasting Service member stations.

(4) PROCEDURES FOR DISTRIBUTION.—The royalty fees deposited under paragraph (2) shall be distributed in accordance

with the following procedures:

(A) FILING OF CLAIMS FOR FEES.—During the month of

July in each year, each person claiming to be entitled to

statutory license fees for secondary transmissions under

this section shall file a claim with the Librarian of Congress, in accordance with requirements that the Librarian

shall prescribe by regulation. For purposes of this paragraph, any claimants may agree among themselves as to

the proportionate division of statutory license fees among

them, may lump their claims together and file them jointly

or as a single claim, or may designate a common agent to

receive payment on their behalf.

(B) DETERMINATION OF CONTROVERSY; DISTRIBUTIONS.— After the first day of August of each year, the Librarian of

Congress shall determine whether there exists a controversy

concerning the distribution of royalty fees. If the Librarian

determines that no such controversy exists, the Librarian

shall, after deducting reasonable administrative costs

under this paragraph, distribute such fees to the copyright

owners entitled to receive them, or to their designated

agents. If the Librarian finds the existence of a controversy,

the Librarian shall, pursuant to chapter 8 of this title, convene a copyright arbitration royalty panel to determine the

distribution of fees.

(C) WITHHOLDING OF FEES DURING CONTROVERSY.—During the pendency of any proceeding under this subsection,

the Librarian of Congress shall withhold from distribution

an amount sufficient to satisfy all claims with respect to

which a controversy exists, but shall have discretion to proceed to distribute any amounts that are not in controversy.

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

(1) DISTRIBUTOR.—The term ‘‘distributor’’ means any entity

which contracts to distribute secondary transmissions from a

satellite carrier and, either as a single channel or in a package

with other programming, provides the secondary transmission

either directly to individual subscribers or indirectly through

other program distribution entities.
55

(2) LOCAL MARKET.—The term ‘‘local market’’ of a television

broadcast station has the meaning given that term section 3 of

the Communications Act of 1934 (47 U.S.C. 153) as interpreted

under the rules, regulations, and authorizations of the Federal

Communications Commission relating to carriage of television

broadcast signals by satellite carriers.

(3) PRIMARY TRANSMISSION.—The term ‘‘primary transmission’’ has the meaning given that term in section 111(f) of

this title.

(4) PUBLIC BROADCASTING SERVICE SATELLITE FEED.—The

term ‘‘Public Broadcasting Service satellite feed’’ means the national satellite feed distributed by the Public Broadcasting

Service for purposes of this section consisting of educational

and informational programming, to which the Public Broadcasting Service holds national terrestrial broadcast rights.

(5) SATELLITE CARRIER.—The term ‘‘satellite carrier’’ has the

meaning given that term in section 3 of the Communications

Act of 1934.

(6) SECONDARY TRANSMISSION.—The term ‘‘secondary transmission’’ has the meaning given that term in section 111(f) of

this title.

(7) SUBSCRIBER.—The term ‘‘subscriber’’ means an entity that

receives a secondary transmission service by means of a secondary transmission from a satellite and pays a fee for the service,

directly or indirectly, to the satellite carrier or a distributor.

(8) SUPERSTATION.—The term ‘‘superstation’’ means a television broadcast station, other than a television network station, licensed by the Federal Communications Commission that

is secondarily transmitted by a satellite carrier, and includes

the Public Broadcasting Service satellite feed.

(9) TELEVISION BROADCAST STATION.—The term ‘‘television

broadcast station’’ has the meaning given that term in section

325(b)(7) of the Communications Act of 1934.

(10) TELEVISION NETWORK STATION.—The term ‘‘television

network station’’ means—

(A) a television network station (as defined in section 3

of the Communications Act of 1934); or

(B) a noncommercial educational broadcast station (as

defined in section 397 of such Act.

(d) EXCLUSIVITY OF THIS SECTION WITH RESPECT TO SECONDARY

TRANSMISSIONS OF TELEVISION BROADCAST STATIONS BY SATELLITE

TO MEMBERS OF THE PUBLIC.—No provision of section 111 of this

title or any other law (other than this section) shall be construed to

contain any authorization, exemption, or license through which secondary transmissions by satellite carriers of programming contained in a primary transmission may be made without obtaining

the consent of the copyright owner.

* * * * * * *

CHAPTER 5—COPYRIGHT INFRINGEMENT AND

REMEDIES

* * * * * * *
56

§ 501. Infringement of copyright

(a) * * *

* * * * * * *

ø(e) With respect to any secondary transmission that is made by

a satellite carrier of a primary transmission embodying the performance or display of a work and is actionable as an act of infringement under section 119(a)(5), a network station holding a

copyright or other license to transmit or perform the same version

of that work shall, for purposes of subsection (b) of this section, be

treated as a legal or beneficial owner if such secondary transmission occurs within the local service area of that station.¿

* * * * * * *
(57)

ADDITIONAL VIEWS

H.R. 851 the Satellite Competition and Consumer Protection Act

established a means for satellite television carriers to legally carry

and retransmit local television network signals, thus providing a

viable competitor to the cable industry.

Recent events led to the termination of network signals to millions of satellite television subscribers. Under current law only

those persons who can not receive a network signal through an

over the air television antenna are eligible to receive and purchase

a distant network package through their satellite carriers. Unfortunately, there are many customers who live in areas of the country,

for example in downtown areas, that can receive a clear network

signal and were still sold these distant network packages. It is

these customers who deserve a measure of relief. These are ineligible customers who were sold an illegal product.

H.R. 851 takes many steps to solve the problem of satellite customers who might have been ineligible to receive a distant network

signal but were still sold distant network packages. The provisions

providing for local into local service will start to alleviate this problem. However, many of these customers were still sold either

through the carrier or a local vendor a distant network package

that was terminated. Until local into local service is available in all

markets, these satellite carriers or local vendors should be held accountable and are obligated to provide their customers with access

to a local network signal.

Satellite carriers and the local vendors need to fulfill their obligations to their customers and provide them with access to a network

signal.

GENE GREEN.

Æ