[Federal Register Volume 63, Number 16 (Monday, January 26, 1998)]
[Proposed Rules]
[Pages 3685-3686]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1795]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 98-1]


Satellite Carrier Compulsory License; Definition of Unserved 
Household

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of inquiry.

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SUMMARY: The Copyright Office of the Library of Congress is opening a 
rulemaking proceeding to determine the permissibility, under the 
satellite compulsory license, of satellite carriers retransmitting 
over-the-air broadcast network stations to subscribers who reside 
within the local markets of those stations.

DATES: Initial comments should be received no later than February 25, 
1998. Reply comments are due March 27, 1998.

ADDRESSES: If sent by mail, an original and ten copies of comments and 
reply comments should be addressed to: David O. Carson, General 
Counsel, Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, 
Southwest Station, Washington, DC 20024. If hand delivered, an original 
and ten copies of comments and reply comments should be brought to: 
Office of the Copyright General Counsel, James Madison Memorial 
Building, Room LM-403, First and Independence Avenue, SE., Washington, 
DC 20559-6000.

FOR FURTHER INFORMATION CONTACT:
David O. Carson, General Counsel, or William Roberts, Senior Attorney, 
Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest 
Station, Washington, DC 20024. Telephone: (202) 707-8380. Fax: (202) 
707-8366.

SUPPLEMENTARY INFORMATION: On December 23, 1997, the Copyright Office 
received a petition for rulemaking from EchoStar Communications 
Corporation (``EchoStar'') requesting that the Office confirm that a 
satellite carrier's local retransmission of network stations to 
subscribers who reside in those station's local markets is permissible 
under the compulsory license granted by 17 U.S.C. 119. Three 
organizations, the Association of Local Television Stations (``ALTV''), 
Network Affiliated Stations Alliance (``NASA''), and the National 
Association of Broadcasters (``NAB''), filed oppositions to EchoStar's 
request for a rulemaking. The petition and oppositions are available 
for inspection and copying at the Copyright Office in Room LM 458, 
James Madison Memorial Building, 101 Independence Avenue, SE., 
Washington, DC.

Opening of This Proceeding

    EchoStar's petition is not the first time that the Copyright Office 
has been called upon to decide whether it is permissible under section 
119 for satellite carriers to retransmit network stations to 
subscribers who reside within the local markets of those stations. In 
the summer of 1996, the Office received a letter from American Sky 
Broadcasting (``ASkyB'') requesting the Office issue a declaratory 
ruling that such local-into-local retransmissions were permissible 
under section 119. By letter dated August 15, 1996, the Office informed 
ASkyB that it would not issue a declaratory ruling or formally resolve 
the matter. The Office did state that if ASkyB filed a Statement of 
Account and royalty fee for local-into-local retransmissions of network 
signals, the Office would not question the sufficiency of the filing or 
return it. See Letter of the Acting General Counsel to William Reyner, 
August 15, 1996. ASkyB did not petition the Office for a rulemaking 
proceeding.
    One year later, the issue of local-into-local retransmissions of 
network signals arose again in the context of the adjustment of the 
section 119 royalty rates. In Docket No. 96-3 CARP SRA, ASkyB argued to 
the Copyright Arbitration Royalty Panel (CARP) charged with the task of 
adjusting the section 119 rates that local-into-local retransmissions 
were permissible under the terms of the statute, and that the royalty 
rate for such retransmissions should be zero. The CARP declined to 
adopt ASkyB's zero royalty request because it determined that it lacked 
subject matter jurisdiction to do so. Report of the CARP at 48 (August 
29, 1997). The CARP considered section 119(a)(2)(B), which provides 
that the satellite compulsory license is ``limited to secondary 
transmissions to persons who reside in unserved households,'' and 
examined the section 119(d)(10) definition of an ``unserved 
household.'' The CARP concluded that:

    [N]etwork signals generally may not be retransmitted to the 
local coverage area of local network signals. The separate rate 
request of ASkyB is explicitly intended to apply to retransmission 
of network signals to served households. Section 119 does not 
provide a compulsory license for those retransmissions. Hence, we 
lack subject matter jurisdiction to set a rate for local 
retransmissions of local network signals.

CARP Report at 48. The CARP did acknowledge, however, that there could 
be subscribers who resided within a network station's local market that 
fell within the CARP's interpretation of an ``unserved household,'' but 
the CARP identified these as being ``rare instances.'' Id.
    The Librarian of Congress, reviewing the CARP's decision under an 
arbitrary or contrary to the Copyright Act standard, accepted the 
CARP's determination stating that he could not ``unequivocally say that 
the Panel's decision is arbitrary or contrary to law.'' 62 FR 55742, 
55753 (October 28, 1997). The Librarian reached this decision because 
he found the statute to be silent on the issue of local-into-local 
retransmissions. Id. The Librarian did state, however, that although 
the statute was silent, the Copyright Office ``retain[ed] the authority 
to conduct a rulemaking proceeding to determine the permissibility of 
local retransmission of network signals to served households, 
regardless of the Panel's determination in this proceeding.'' Id.\1\
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    \1\ The Librarian did adopt a zero rate for retransmission of 
network signals to unserved households located within the local 
markets of network stations. Id.
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Authority for a Rulemaking Proceeding

    As stated in the Librarian's review of the CARP decision, the 
Copyright Office believes that it has the authority to gather 
information and conduct a rulemaking to resolve whether local-into-
local retransmission of network signals is permissible under section 
119. The Office has determined in the past, in the context of the 
section 111 cable compulsory license, whether certain retransmissions 
were subject to statutory licensing. See 57 FR 3284 (January 29, 1992) 
(determining that retransmissions of broadcast signals by satellite 
carriers and Multichannel Multipoint Distribution Services were not 
eligible for the section 111 license); 62 FR 18705 (April 17, 1997) 
(determining that retransmissions of

[[Page 3686]]

broadcast signals by Satellite Master Antenna Television systems were 
eligible for section 111 licensing). The authority to issue a 
determination in this proceeding is derived from the Office's 
rulemaking authority under 17 U.S.C. 702.
    The objections to EchoStar's petition filed by ALTV, NASA and NAB 
all counsel against the Copyright Office opening a rulemaking 
proceeding at this time, preferring instead to resolve the matter 
through legislation. There is no question that legislative resolution 
of the issue of local-into-local retransmissions of network stations 
under section 119 is the best solution. The Office has recommended to 
Congress that section 119 be clarified to allow local-into-local 
retransmission. Library of Congress, U.S. Copyright Office, A Review of 
the Copyright Licensing Regimes Covering Retransmission of Broadcast 
Signals 119-120 (August 1, 1997). In the meantime, however, the Office 
believes that it should exercise its duties and responsibilities under 
section 702 of the Copyright Act and open this rulemaking.

Issues for Public Comment

    As presented by Echostar's petition, the question of whether local-
into-local retransmissions of network signals is permissible turns on 
the interpretation to be afforded the definition of an ``unserved 
household.'' Section 119(a)(2)(B) provides that the satellite 
compulsory license for retransmission of network signals is ``limited 
to secondary transmissions to persons who reside in unserved 
households.'' Section 119(d)(10) defines an ``unserved household'' as:

a household that--
    (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
    (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 a cable system that 
provides the signal of a primary network station affiliated with 
that network.

17 U.S.C. 119(d)(10).
    In interpreting the ``unserved household'' definition, the primary 
question is: Was it the intention of Congress to prevent all satellite 
retransmissions of a network station when a subscriber can receive an 
off-the-air grade B intensity signal of the local network station, or 
was Congress attempting to exclude only distant network stations of the 
same network that might be imported by a satellite carrier into the 
local affiliate's market? Is there anything in the legislative history 
that offers guidance on this question? If not, does subsection (B)'s 
prevention of satellite retransmission when a subscriber is receiving 
the local network station via cable have any bearing on this issue?
    If local-into-local retransmissions of network stations are 
permissible under section 119, how should a network station's local 
market be defined? Is the local market definition in section 119(d)(11) 
appropriate, or should some other measure be used?
    In addition, the Copyright office is interested in receiving 
comment as to what impact, if any, local-into-local retransmissions of 
network stations by satellite would have on retransmission consent and 
other provisions and requirements of the Communications Act, 47 U.S.C. 
ch. 5.
    The Copyright Office welcomes and encourages comments as to these 
questions, and well as any other matters that commenting parties may 
deem relevant.

    Dated: January 21, 1998.
Marybeth Peters,
Register of Copyrights.
[FR Doc. 98-1795 Filed 1-23-98; 8:45 am]
BILLING CODE 1410-31-M