[House Report 113-544]
[From the U.S. Government Publishing Office]
113th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 113-544
======================================================================
SATELLITE TELEVISION ACCESS REAUTHORIZATION ACT
OF 2014
_______
July 22, 2014.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Goodlatte, from the Committee on the Judiciary, submitted the
following
R E P O R T
[To accompany H.R. 5036]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 5036) to amend title 17, United States Code, to
extend expiring provisions of the Satellite Television
Extension and Localism Act of 2010, having considered the same,
report favorably thereon without amendment and recommend that
the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for the Legislation.......................... 2
Hearings......................................................... 2
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 3
New Budget Authority and Tax Expenditures........................ 3
Congressional Budget Office Cost Estimate........................ 3
Duplication of Federal Programs.................................. 5
Disclosure of Directed Rule Makings.............................. 5
Performance Goals and Objectives................................. 5
Advisory on Earmarks............................................. 5
Section-by-Section Analysis...................................... 5
Changes in Existing Law Made by the Bill, as Reported............ 6
Purpose and Summary
The legislation extends the expiring Section 119 satellite
distant into local license by one additional period of 5 years
and makes two technical corrections to existing law.
Background and Need for the Legislation
Title 17 contains three compulsory video licenses that are
used by satellite and cable companies to obtain video content
that is delivered to their customers. For satellite company
customers who are able to receive local broadcast channels via
an over-the-air antenna, satellite carriers that use these
licenses are required by law to deliver only these local
broadcast channels, instead of channels from another market.
However, not all local television markets have local broadcast
channels that serve them, primarily in rural areas. For these
areas, the Section 119 license enables satellite carriers to
obtain video content from distant network channels (typically
New York and Los Angeles) and deliver that content to those
customers who do not have access to local broadcast channels.
The Section 119 license was originally created to ensure
that satellite carriers could compete with cable systems that
already had access to such channels. The growth of the two
current satellite carriers indicates that this objective has
been met. The Committee has requested and received a study from
the Copyright Office on options to phase out one or more of the
three compulsory licenses. The Section 302 Report, as it is
known, was requested by Congress in Section 302 of P.L. 111-
175, the Satellite Television Extension and Localism Act of
2010. The Copyright Office determined that the Section 119
license would be the easiest to phase out due to the declining
number of American households that receive video content due to
its existence, the limited number of channels that are obtained
by it, and the limited number of satellite companies. The
Copyright Office report, however, noted that private sector
negotiations in lieu of the statutory framework had not
occurred and would be unlikely to occur without certainty as to
when the compulsory license would terminate. This legislation
creates this certainty by setting a termination date of
December 31, 2019, which should be more than sufficient time
for private sector negotiations to occur over the next 5 years.
Hearings
The Committee's Subcommittee on Courts, Intellectual
Property, and the Internet held 2 separate days of hearings on
the issues contained in H.R. 5036 on September 10, 2013 and May
8, 2014.
On September 10, 2013, testimony was received on the topic
of ``Satellite Television Laws in Title 17'' from Mr. James
Campbell, Vice-President for Regulatory Affairs, CenturyLink,
Inc.; Mr. R. Stanton Dodge, Executive Vice-President, General
Counsel and Secretary, DISH Network, LLC; Mr. Paul Donato,
Executive Vice-President and Chief Research Officer, the
Nielsen Company; Mr. Robert Garrett, Partner, Arnold and
Porter, LLP on behalf of the Major League Baseball; Mr. Earle
MacKenzie, Executive Vice-President and Chief Operating
Officer, Shentel Cable on behalf of the American Cable
Association; Mr. Preston Padden, former President, ABC
Television Network and former Executive Vice-President, The
Walt Disney Company (testifying on his own behalf); and Mr.
Gerard J. Waldron, Partner, Covington & Burling, LLP on behalf
of the National Association of Broadcasters.
On May 8, 2014, testimony was received on the topic of
``Compulsory Video Licenses of Title 17'' from Mr. William J.
Roberts, Jr., Acting Associate Register of Copyrights and
former Judge of the Copyright Royalty Board, U.S. Copyright
Office; Mr. R. Stanton Dodge, Executive Vice President and
General Counsel, DISH Network; Ms. Marci K. Burdick, Senior
Vice President of Broadcasting, Schurz Communications, on
behalf of the National Association of Broadcasters; and Mr.
Matthew M. Polka, President and Chief Executive Officer,
American Cable Association.
Committee Consideration
On July 10, 2014 the Committee met in open session and
ordered the bill H.R. 5036 favorably reported without
amendment, by a voice vote, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that no
rollcall votes occurred during the Committee's consideration of
H.R. 5036. One amendment by Mr. Collins was offered and
withdrawn.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 5036, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 17, 2014.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5036, the
``Satellite Television Access Reauthorization Act of 2014.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie,
who can be reached at 226-2860.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 5036--Satellite Television Access Reauthorization Act of 2014.
As ordered reported by the House Committee on the Judiciary on July 10,
2014.
Based on information from the Copyright Office, CBO
estimates that implementing H.R. 5036 would not have a
significant effect on the Federal budget. CBO estimates that
enacting H.R. 5036 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
Under current law, satellite carriers pay royalty fees for
the right to transmit certain television signals to their
subscribers without obtaining permission from copyright
holders. The statutory license allowing those transmissions is
set to expire on December 31, 2014; H.R. 5036 would extend that
license through December 31, 2019.
Under the statutory license, satellite carriers pay royalty
fees to the Copyright Office for transmission of certain
copyrighted broadcasts and the Copyright Office later
distributes those fees to the owners of copyrights on the
transmitted material. Based on information from the Copyright
Office, CBO expects that the additional workload to continue
administration of the royalty payments would not be
significant. Collections and disbursement of royalty fees are
not recorded in the Federal budget; therefore, there would be
no budgetary effect, with regard to those fees, to extend the
statutory license.
H.R. 5036 would extend existing intergovernmental and
private-sector mandates, as defined in the Unfunded Mandates
Reform Act (UMRA), on satellite carriers and copyright holders
(including public entities). The bill would extend through
December 31, 2019, the royalty rates satellite carriers are
required to pay for transmitting some copyrighted material. If
this requirement were to expire, royalty rates would be
negotiated privately between copyright owners and satellite
carriers. The cost of the mandate would equal the difference
between the royalties that would be set in the absence of the
bill and the royalties set under current law. Based on
information from industry sources and the Copyright Office, CBO
expects that those rates would not differ significantly.
Consequently, CBO estimates that the cost of complying with the
mandates would be small and would fall below the annual
thresholds established in UMRA for intergovernmental and
private-sector mandates ($76 million and $152 million in 2014,
respectively, adjusted annually for inflation).
On June 13, 2014, CBO transmitted a cost estimate for H.R.
4572, the STELA Reauthorization Act of 2014, as ordered
reported by the House Committee on Energy and Commerce on May
9, 2014. H.R. 4572 would extend provisions of current law that
allow satellite carriers to transmit copyrighted material but
would not extend the license that allows such transmission
without permission from the copyright holders. CBO estimates
that implementing H.R. 4572 would cost about $1 million over
the 2015-2019 period, assuming appropriation of the necessary
amounts, for reports and regulatory actions by the Federal
Communications Commission.
The CBO staff contacts for this estimate are Susan Willie
(for Federal costs), Melissa Merrell (for the state and local
impact), Tristan Hanon, and Patrice Gordon (for the private-
sector impact). The estimate was approved by Theresa Gullo,
Deputy Assistant Director for Budget Analysis.
Duplication of Federal Programs
No provision of H.R. 5036 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that H.R. 5036 does not direct any
rule makings proceeding within the meaning of 5 U.S.C. 551.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
5036, extends an existing compulsory license in Section 119 of
Title 17 for an additional 5 years, and makes two technical
corrections within existing law.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 5036 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Short title. Section 1 sets forth the short title
of the bill as the ``Satellite Television Access
Reauthorization Act of 2014.''
Sec. 2. Reauthorization. Section 2 makes two technical
corrections to existing law in Section 111(d)(3) and changes
the date ``2014'' to the date ``2019'' in two provisions of
existing Section 119 to effectuate the extension.
Sec. 3. Termination of License. Subsection 3(a) creates a
new paragraph (h) in Section 119 to make clear that the Section
119 license expires on December 31, 2019. Subsection 3(b) makes
one conforming amendment in Section 107(a).
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 italics, existing law in which no change
is proposed is shown in roman):
TITLE 17, UNITED STATES CODE
* * * * * * *
CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT
* * * * * * *
Sec. 111. Limitations on exclusive rights: Secondary transmissions of
broadcast programming by cable
(a) * * *
* * * * * * *
(d) Statutory License for Secondary Transmissions by Cable
Systems.--
(1) * * *
* * * * * * *
(3) Distribution of royalty fees to copyright
owners.--The royalty fees thus deposited shall, in
accordance with the procedures provided by [clause]
paragraph (4), be distributed to those among the
following copyright owners who claim that their works
were the subject of secondary transmissions by cable
systems during the relevant semiannual period:
(A) * * *
(B) Any such owner whose work was included
in a secondary transmission identified in a
special statement of account deposited under
[clause] paragraph (1)(A).
* * * * * * *
Sec. 119. Limitations on exclusive rights: Secondary transmissions of
distant television programming by satellite
(a) * * *
* * * * * * *
(c) Adjustment of Royalty Fees.--
(1) Applicability and determination of royalty fees
for signals.--
(A) * * *
* * * * * * *
(E) Period agreement is in effect.--The
obligation to pay the royalty fees established
under a voluntary agreement which has been
filed with the Copyright Royalty Judges in
accordance with this paragraph shall become
effective on the date specified in the
agreement, and shall remain in effect until
December 31, [2014] 2019, or in accordance with
the terms of the agreement, whichever is later.
* * * * * * *
(e) Moratorium on Copyright Liability.--Until December 31,
[2014] 2019, a subscriber who does not receive a signal of
Grade A intensity (as defined in the regulations of the Federal
Communications Commission under section 73.683(a) of title 47,
Code of Federal Regulations, as in effect on January 1, 1999,
or predicted by the Federal Communications Commission using the
Individual Location Longley-Rice methodology described by the
Federal Communications Commission in Docket No. 98-201) of a
local network television broadcast station shall remain
eligible to receive signals of network stations affiliated with
the same network, if that subscriber had satellite service of
such network signal terminated after July 11, 1998, and before
October 31, 1999, as required by this section, or received such
service on October 31, 1999.
* * * * * * *
(h) Termination of License.--This section shall cease to be
effective on December 31, 2019.
* * * * * * *
----------
SATELLITE TELEVISION EXTENSION AND LOCALISM ACT OF 2010
* * * * * * *
TITLE I--STATUTORY LICENSES
* * * * * * *
SEC. 107. TERMINATION OF LICENSE.
[(a) Termination.--Section 119 of title 17, United States
Code, as amended by this Act, shall cease to be effective on
December 31, 2014.]
* * * * * * *