05-13331. Rate Adjustment for the Satellite Carrier Compulsory License

AGENCY:

Copyright Office, Library of Congress.

ACTION:

Final rule.

SUMMARY:

The Copyright Office of the Library of Congress is publishing the royalty rates for the retransmission of digital over-the-air television broadcast signals by satellite carriers under the statutory license.

EFFECTIVE DATE:

January 1, 2005.

FOR FURTHER INFORMATION CONTACT:

David O. Carson, General Counsel, or Tanya M. Sandros, Associate General Counsel, Copyright Arbitration Royalty Panel (CARP), P.O. Box 70977, Southwest Station, Washington, DC 20024. Telephone: [phone]. Telefax: [phone].

SUPPLEMENTARY INFORMATION:

On December 8, 2004, the President signed the Satellite Home Viewer Extension and Reauthorization Act (“SHVERA”), a part of the Consolidated Appropriations Act of 2005, Pub. L. No. 108-447. SHVERA extends for an additional five years the statutory license for satellite carriers retransmitting over-the-air television broadcast stations to their subscribers, 17 U.S.C. 119, as well as making a number of amendments to the license. One of the amendments to section 119 sets forth a process, for the first time, for adjusting the royalty fees paid by satellite carriers for the retransmission of digital broadcast signals. 17 U.S.C. 119(c)(2). The law set the initial rates as the rates set by the Librarian in 1997 for the retransmission of analog broadcast signals, 37 CFR 258.3(b)(1)&(2), reduced by 22.5 percent. 17 U.S.C. 119(c)(2)(A). These rates are to be adjusted in accordance with the procedures set forth in section 119(c)(1) of the Copyright Act.

On March 8, 2005, the Copyright Office received a letter from EchoStar Satellite, L.L.C., DirecTV, Inc., Program Suppliers, and the Joint Sports Claimants requesting that the Office begin the process of setting the rates for the retransmission of digital broadcast signals by initiating a voluntary negotiation period so that rates for both digital and analog signals “will be in place before the July 31, 2005 deadline for satellite carriers to pay royalties for the first accounting period of 2005.” Letter at 2. The Office granted the request and, pursuant to section 119(c)(1), published a notice in the Federal Register initiating a voluntary negotiation period and requesting that any agreements reached during this period be submitted no later than April 25, 2005. See 70 FR 15368 (March 25, 2005).

In accordance with the March 25 notice, the Office received one agreement, submitted jointly by the satellite carriers EchoStar Satellite L.L.C. and DirecTV, Inc., the copyright owners of motion pictures and syndicated television series represented by the Motion Picture Association of America, and the copyright owners of sports programming represented by the Office of the Commissioner of Baseball. The agreement proposed rates for the private home viewing of distant superstations and distant network stations for the 2005-2009 period, as well as the viewing of those signals for commercial establishments. The agreement specifies that distant superstations and network stations that are significantly viewed do not require a royalty payment, which is consistent with 17 U.S.C. 119(a)(3), as amended. In addition, the agreement proposed that, in the case of multicasting of digital superstations and network stations, each digital stream that is retransmitted by a satellite carrier must be paid for at the prescribed rate but no royalty payment is due for any program-related material contained on the stream within the meaning of WGN v. United Video, Inc., 693 F.2d 622, 626 (7th Cir. 1982) and Second Report and Order and First Order on Reconsideration in CS Doc. No. 98-120, FCC 05-27 at ¶ 44 & n.158 (February 23, 2005).

The statute requires the Library to “provide public notice of the royalty fees from the voluntary agreement and afford parties an opportunity to state that they object to those fees.” 17 U.S.C. 119(c)(1)(D)(ii)(II). The Library published a Notice of Proposed Rulemaking on May 17, 2005, to fulfill this requirement. 70 FR 28231 (May 17, 2005). The Office received no objections as a result of this notice. Consequently, the Library is adopting the rates as set forth in the voluntary agreement as final.

List of Subjects in 37 CFR Part 258

Copyright, Satellite, Television.

Final Regulations

For the reasons set forth above, the Copyright Office amends 37 CFR chapter II as follows:

PART 258—ADJUSTMENT OF ROYALTY FEE FOR SECONDARY TRANSMISSIONS BY SATELLITE CARRIERS

1. The authority citation for part 258 is revised to read as follows:

Authority: 17 U.S.C. 119, 702, 802.

§ 258.2

[Amended]

2. In § 258.2, paragraph (b) is amended by removing “§ 258.3(b)” and adding “§ 258.3(a)” in its place.

3. Section 258.3 is amended by revising the section heading and in paragraphs (a) through (h), by adding “analog signals of” before “broadcast stations” each place it appears.

The revisions to § 258.3 read as follows:

§ 258.3

Royalty fee for secondary transmission of analog signals of broadcast stations by satellite carriers.

* * * * *

4. Add a new § 258.4 to read as follows:

§ 258.4

Royalty fee for secondary transmission of digital signals of broadcast stations by satellite carriers.

(a) Commencing January 1, 2005, the royalty rate for secondary transmission of digital signals of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 20 cents per subscriber per month for distant superstations.

(ii) 17 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 40 cents per subscriber per month for distant superstations.

(b) Commencing January 1, 2006, the royalty rate for secondary transmission of digital signals of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 21.5 cents per subscriber per month for distant superstations.

(ii) 20 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 43 cents per subscriber per month for distant superstations.

(c) Commencing January 1, 2007, the royalty rate for secondary transmission of digital signals of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) 23 cents per subscriber per month for distant superstations.

(ii) 23 cents per subscriber per month for distant network stations.

(2) For viewing in commercial establishments, 46 cents per subscriber per month for distant superstations.

(d) Commencing January 1, 2008, the royalty rate for secondary transmission of digital signals of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) The 2007 rate per subscriber per month for distant superstations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(ii) The 2007 rate per subscriber per month for distant network stations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(2) For viewing in commercial establishments, the 2007 rate per subscriber per month for viewing distant superstations in commercial establishments adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2007 to January 2008.

(e) Commencing January 1, 2009, the royalty rate for secondary transmission of digital signals of broadcast stations by satellite carriers shall be as follows:

(1) For private home viewing-

(i) The 2008 rate per subscriber per month for distant superstations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

(ii) The 2008 rate per subscriber per month for distant network stations adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

(2) For viewing in commercial establishments, the 2008 rate per subscriber per month for viewing distant superstations in commercial establishments adjusted for the amount of inflation as measured by the change in the Consumer Price Index for all Urban Consumers from January 2008 to January 2009.

(f) For purposes of calculating the royalty rates for secondary transmission of digital signals of broadcast stations by satellite carriers-

(1) In the case of digital multicasting, the rates in paragraphs (a) through (e) of this section apply to each digital stream that a satellite carrier or distributor retransmits pursuant to section 119; provided, however that no additional royalty shall be paid for the carriage of any material related to the programming on such stream; and

(2) Satellite carriers and distributors are not required to pay a section 119 royalty for the retransmission of a digital signal to a subscriber who resides in a community where that signal is “significantly viewed,” within the meaning of 17 U.S.C. 119(a)(3) and (b)(1), as amended.

Dated: June 21, 2005.

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.