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ACA Urges Congress To Retain Cable Compulsory Copyright License

Trade Group Pushes For Reform Of Broken Retransmission Consent Rules

PITTSBURGH, May 12, 2014 - ACA President and CEO Matthew M. Polka urged Congress to retain cable's compulsory copyright license, saying the law still tracks with current market conditions and meets the needs and interests of consumers and industry participants in ways that the broken retransmission consent law and regulations clearly do not.

"Copyright holders and cable operators have been operating under the Section 111 statutory license since 1976, and throughout that time, it has served its goal in compensating copyright holders for the retransmission of their work in a way that is fair and minimally burdensome for multiple stakeholders," Polka said in his Capitol Hill testimony.

Polka's support for retention of the cable license came in May 8 testimony before the House Judiciary Committee's Subcommittee On Courts, Intellectual Property and the Internet, a panel that exercises jurisdiction over copyright statutes that operate in tandem with communications provisions found in the Satellite Television Extension and Localism Act of 2010 (STELA), which is up for renewal this year.

The Sec. 111 license is a legal mechanism adopted by Congress to encourage cable distribution of local broadcast signals without requiring the preclearance of the rights to all of the copyrighted works on retransmitted broadcast signals.  Without the license, subscription TV providers would need to clear in advance the copyrighted works each retransmitted broadcast station will be airing, which creates obstacles for cable operators who are not involved in broadcasters' decisions regarding the programming they choose to make available over-the-air.  Faced with the threat of potential copyright liability for failure to pre-clear copyrighted works, subscription TV operators would need to blackout TV stations' programming abruptly or drop the stations altogether if these broadcasters failed to provide sufficient notice.

"Under these circumstances, it is not at all surprising that a wide range of stakeholders - including representatives of broadcast stations, copyright users and even some copyright owners - agree that it is appropriate for the statutory license to remain unchanged," Polka said, adding rights holders who allege being underpaid for their works are actually fully compensated for their works today via reverse compensation payments from broadcasters who derive revenue from the retransmission consent market.

Addressing a range of related issues, Polka called on Congress to reform the broken, out-of-date retransmission regime, arguing that Sinclair Broadcasting's blackout of Buckeye CableSystem has left those cable customers without their local NBC affiliates for nearly 150 days. He called on Congress to build on the FCC's March 31 unanimous and bipartisan vote banning separately owned, same-market top four-rated broadcast stations from colluding in the sale of retransmission consent.

Key to reform is new regulations that would allow the FCC to stop TV station blackouts, Polka said. In 2013, millions of cable and satellite TV subscribers went without access to their local broadcast signals from their service provider after station owners cut off programming 127 times. This was nearly a 40% increase over 2012, nearly a 250% increase over 2011, and more than a 1000% increase over 2010. ACA has proposed adoption of a rule mandating that broadcasters and MVPDs continue to offer a broadcast station's signal to consumers after an existing retransmission consent agreement expires.

Polka also recommended that to protect consumers, Congress should specify that a broadcast station's blocking access to its freely available Internet content during a retransmission consent impasse is a per se violation of the FCC's good faith bargaining rules governing retransmission consent negotiations. This issue flared nationally last August when CBS blocked its websites to broadband subscribers of Time Warner Cable in a retransmission consent blackout initiated by CBS.

In his testimony, Polka urged Congress to modify current law by not requiring inclusion of broadcast stations that elect retransmission consent in the cable basic service tier, so that consumers who wish to receive cable television service without subscribing to the retransmission consent stations may do so.

"Such a modification to existing rules would impact only how broadcast stations that elect retransmission consent are sold. It would not affect the right of broadcast stations that elect must carry and other channels, such as Public, Education and Governmental (PEG) channels, to be on the basic service tier and included with the purchase of any other cable television service," Polka said.

Lastly, Polka called for updating the program access laws and regulations to allow programming buying group like the National Cable Television Cooperative to utilize the rules on behalf of its members. He reiterated ACA's support for new CableCARD regulations in which cable operators would no longer need to deploy expensive CableCARD-enabled set-top boxes while still required to support third-party boxes like TiVo that depend on CableCARDs to access encryption cable channels.

About the American Cable Association

Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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