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Cable, Broadcasters: Leave License Regime Alone

By: John Eggerton, Multichannel News

The bright lines between industries -- and some intersecting ones -- continued to be drawn Wednesday as Congress held its second (and third) hearings on changes to the law circumscribing cable and satellite's licenses to carry TV-station signals.

During a House Judiciary Committee hearing, "Copyright Licensing in a Digital Age: Competition, Compensation and the Need to Update the Cable and Satellite TV Licenses," National Cable & Telecommunications Association president Kyle McSlarrow and National Association of Broadcasters president David Rehr weighed in, joined by representativesKyle McSlarrow from the direct-broadcast satellite, programmer and consumer sides.

In a report to Congress last year, the U.S. Copyright Office suggested it was time to make changes to the regime that licenses cable and satellite multichannel video-programming distributors to carry broadcast-TV signals.

For one thing, the office suggested it might be time for a single, unitary license covering all MVPDs. Currently, cable's license is based on gross receipts, while satellite providers pay a flat fee.

The most pressing issue is reauthorization of the Satellite Home Viewer Extension and Reauthorization Act, which deals with the DBS industry's compulsory license to import distant over-the-air signals to unserved customers and expires at year-end. But, per the Copyright Office's suggestions for reforming and/or harmonizing related permanent compulsory licenses for cable and satellite distant and local signals, Congress is looking to deal with those issues as well.

For his part, McSlarrow argued that the different compulsory licenses for cable and satellite make sense, with some small modifications. Copyright holders are fairly compensated, distributors are helped and consumers are well-served, he argued.

McSlarrow conceded that the compulsory copyright license is "horrifyingly complex" and understood the natural reaction to want to "harmonize" it. And if major reform is on the table, McSlarrow said, than retransmission consent reform must be factored into the equation,

Rehr concurred with McSlarrow that the compulsory license has generally worked, saying he disagreed with the Copyright Office's recommendation to harmonize the licenses.

"They have different business models, different technologies and different evolutions," said Rehr, adding, "we are unsure of all the unintended consequences particularly in this difficult economic climate."

But Rehr also agreed with the Copyright Office that the distant-signal license should be phased out for satellite carriers. He suggested replacing it with an affirmative obligation to carry local signals in all 210 markets.

DirecTV Group senior vice president Bob Gabrielli argued that his company already was able to serve every local market with a device that integrated the satellite channels with an over-the-air tuner. If viewers still couldn't get signals, he argued, it was because broadcasters weren't delivering their signal to all the viewers in their markets.

Arguing for doing away with the compulsory distant-signal licenses altogether was register of copyrights Marybeth Peters, who said that cable and satellite operators no longer needed its protection and could negotiate independently, as is the case with Internet-delivered video content.

Motion Picture Association of America executive vice president Fritz Attaway said the current regime undercompensated content creators, whose interests the committee should focus on. It isn't the fiber or the headend that consumers want, he said, but the high-value content.

McSlarrow begged to differ with the suggestion the compulsory license undercompensated programmers, saying that a collective yearly payment of a quarter of a billion dollars didn't sound like undercompensation.

Also sticking up for the compulsory license was a representative from Consumers Union, who said pay TV prices would skyrocket if content producers were allowed to have greater leverage over negotiations.

Rep. John Conyers (D-Mich.), the Judiciary Committee chairman, called the hearing a first salvo and said he expected the debate to continue into the spring.

At a Senate Judiciary Committee Hearing on the same subject -- and at exactly the same time -- Comcast executive vice president David Cohen and Jim Yager, head of the NAB TV board, were making similar cases.

The witness list was almost identical to Tuesday's meeting of the House Subcommittee on Telecommunications, Technology and the Internet.


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