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105th Congress                                            Rept. 105-661
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 2
_______________________________________________________________________


 
          COPYRIGHT COMPULSORY LICENSE IMPROVEMENT ACT OF 1998

                                _______
                                

 September 10, 1998.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

_______________________________________________________________________


Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 2921]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 2921) to amend the Communications Act of 1934 to require 
the Federal Communications Commission to conduct an inquiry 
into the impediments to the development of competition in the 
market for multichannel video programming distribution, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.

                           TABLE OF CONTENTS

                                                                   Page
The Amendment....................................................     1
Purpose and Summary..............................................    10
Background and Need for Legislation..............................    10
Hearings.........................................................    16
Committee Consideration..........................................    16
Committee Oversight Findings.....................................    16
Committee on Government Reform and Oversight Findings............    17
New Budget Authority and Tax Expenditures........................    17
Congressional Budget Office Estimate.............................    17
Constitutional Authority Statement...............................    21
Section-by-Section Analysis and Discussion.......................    21
Changes in Existing Law Made by the Bill, as Reported............    23

  The amendments are as follows:
  Strike section 4, redesignate section 3 as section 7, and 
strike sections 1 and 2 and insert the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Copyright Compulsory License 
Improvement Act of 1998.''

SEC. 2. LIMITATIONS ON EXCLUSIVE RIGHTS; SECONDARY TRANSMISSIONS BY 
                    SATELLITE CARRIERS WITHIN LOCAL MARKETS.

  (a) In General.--Chapter 1 of title 17, United States Code, 
is amended by adding after section 121 the following new 
section:

``Sec. 122. Limitations on exclusive rights; secondary transmissions by 
                    satellite carriers within local markets.

  ``(a) Secondary Transmissions of Television Broadcast 
Stations by Satellite Carriers.--A secondary transmission into 
the local market of a television broadcast station of a primary 
transmission made by that station and embodying the performance 
or display of a work shall be subject to statutory licensing 
under this section if--
          ``(1) the secondary transmission is made by a 
        satellite carrier to the public;
          ``(2) the secondary transmission is permissible under 
        the rules, regulations, or authorizations of the 
        Federal Communications Commission; and
          ``(3) the satellite carrier makes a direct or 
        indirect charge for the secondary transmission to--
                  ``(A) each subscriber receiving the secondary 
                transmission; or
                  ``(B) a distributor that has contracted with 
                the satellite carrier for direct or indirect 
                delivery of the secondary transmission to the 
                public.
   ``(b) Reporting Requirements.--
          ``(1) Initial lists.--A satellite carrier that makes 
        secondary transmissions of a primary transmission made 
        by a network station pursuant to subsection (a) shall, 
        within 90 days after commencing such secondary 
        transmissions, submit to the network that owns or is 
        affiliated with the network station a list identifying 
        (by name and street address, including county and zip 
        code) all subscribers to which the satellite carrier 
        currently makes secondary transmissions of that primary 
        transmission.
          ``(2) Subsequent lists.--After the list is submitted 
        under paragraph (1), the satellite carrier shall, on 
        the 15th of each month, submit to the network a list 
        identifying (by name and street address, including 
        county and zip code) any subscribers who have been 
        added or dropped as subscribers since the last 
        submission under this subsection.
          ``(3) Use of subscriber information.--Subscriber 
        information submitted by a satellite carrier under this 
        subsection may be used only for the purposes of 
        monitoring compliance by the satellite carrier with 
        this section.
          ``(4) Requirements of networks.--The submission 
        requirements of this subsection shall apply to a 
        satellite carrier only if the network to whom the 
        submissions are to be made places on file with the 
        Register of Copyrights a document identifying the name 
        and address of the person to whom such submissions are 
        to be made. The Register shall maintain for public 
        inspection a file of all such documents.
  ``(c) No Royalty Fee Required.--A satellite carrier whose 
secondary transmissions are subject to statutory licensing 
under subsection (a) shall have no obligation to pay royalties 
under this title for such secondary transmissions.
  ``(d) Noncompliance With Reporting Requirements.--
Notwithstanding subsection (a), the willful or repeated 
secondary transmission to the public by a satellite carrier 
into the local market of a television broadcast station of a 
primary transmission made by that station and embodying a 
performance or display of a work is actionable as an act of 
infringement under section 501, and is fully subject to the 
remedies provided under sections 502 through 506 and 509, if 
the satellite carrier has not complied with the reporting 
requirements of subsection (b).
  ``(e) Willful Alterations.--Notwithstanding subsection (a), 
the secondary transmission to the public by a satellite carrier 
into the local market of a television broadcast station of a 
primary transmission made by that television broadcast station 
and embodying a performance or display of a work is actionable 
as an act of infringement under section 501, and is fully 
subject to the remedies provided by sections 502 through 506 
and sections 509 and 510, if the content of the particular 
program in which the performance or display is embodied, or any 
commercial advertising or station announcement transmitted by 
the primary transmitter during, or immediately before or after, 
the transmission of such program, is in any way willfully 
altered by the satellite carrier through changes, deletions, or 
additions, or is combined with programming from any other 
broadcast signal.
  ``(f) Violation of Territorial Restrictions on Statutory 
License for Television Broadcast Stations.--
          ``(1) Individual violations.--The willful or repeated 
        secondary transmission to the public by a satellite 
        carrier of a primary transmission made by a television 
        broadcast station and embodying a performance or 
        display of a work to a subscriber who does not reside 
        in that station's local market, and is not subject to 
        statutory licensing under section 119, is actionable as 
        an act on infringement under section 501 and is fully 
        subject to the remedies provided by sections 502 
        through 506 and 509, except that--
                  ``(A) no damages shall be awarded for such 
                act of infringement if the satellite carrier 
                took corrective action by promptly withdrawing 
                service from the ineligible subscriber; and
                  ``(B) any statutory damages shall not exceed 
                $5 for such subscriber for each month during 
                which the violation occurred.
           ``(2) Pattern of violations.--If a satellite carrier 
        engages in a willful or repeated pattern or practice of 
        secondarily transmitting to the public a primary 
        transmission made by a television broadcast station and 
        embodying a performance or display of a work to 
        subscribers who do not reside in that station's local 
        market, and are not subject to statutory licensing 
        under section 119, then in addition to the remedies set 
        forth in paragraph (1)--
                  ``(A) if the pattern or practice has been 
                carried out on a substantially nationwide 
                basis, the court shall order a permanent 
                injunction barring the secondarytransmission by 
the satellite carrier of the primary transmissions of any television 
broadcast station, and the court may order statutory damages not 
exceeding $250,000 for each 6-month period during which the pattern or 
practice was carried out; and
                  ``(B) if the pattern or practice has been 
                carried out on a local or regional basis with 
                respect to more than one television broadcast 
                station, the court shall order a permanent 
                injunction barring the secondary transmission 
                in that locality or region by the satellite 
                carrier of the primary transmissions of any 
                television broadcast station, and the court may 
                order statutory damages not exceeding $250,000 
                for each 6-month period during which the 
                pattern or practice was carried out.
  ``(g) Burden of Proof.--In any action brought under 
subsection (d), (e) or (f), the satellite carrier shall have 
the burden of proving that its secondary transmission of a 
primary transmission by a television broadcast station is made 
only to subscribers located within that station's local market.
  ``(h) Geographic Limitation on Secondary Transmissions.--The 
statutory license created by this section shall apply only to 
secondary transmissions to locations in the United States.
  ``(i) Exclusivity With Respect To Secondary Transmissions of 
Broadcast Stations by Satellite to Members of the Public.--No 
provision of section 111 or any other law (other than this 
section and section 119) shall be construed to contain any 
authorization, exemption, or license through which secondary 
transmissions by satellite carriers of programming contained in 
a primary transmission made by a television broadcast station 
may be made without obtaining the consent of the copyright 
owner.
  ``(j) Statutory License Contingent on Compliance With 
Satellite Must-Carry Requirements.--Notwithstanding subsection 
(a), the willful or repeated secondary transmission to the 
public into the local market of a television broadcast station 
by a satellite carrier of a primary transmission made by that 
station and embodying a performance or display of a work is 
actionable as an act of infringement under section 501, and is 
fully subject to the remedies provided by sections 502 through 
506 and 509, if at the time of such transmission the satellite 
carrier is not in compliance with the requirements of 
subsection (k) to carry television stations.
  ``(k) Carriage Obligations.--
          ``(1) In general.--Each satellite carrier providing 
        secondary transmissions to subscribers located within 
        the local market of a television broadcast station of a 
        primary transmission made by that station shall carry 
        upon request all television broadcast stations located 
        within that local market, subject to subsection (l), 
        except that the carriage obligations of this subsection 
        shall apply only to satellite carriers that retransmit 
        the signals of broadcast television stations pursuant 
        to the statutory license under this section. Carriage 
        of additional broadcast stations within that local 
        market shall be at the discretion of the satellite 
        carrier, subject to subsection (l). The satellite 
        carrier shall carry the entire signal of each local 
        television station carried pursuant to this subsection.
          ``(2) Duplication not required.--Notwithstanding 
        paragraph (1), a satellite carrier shall not be 
        required to carry upon request the signal of any local 
        television broadcast station that substantially 
        duplicates the signal of another television broadcast 
        station within the same local market which is 
        secondarily transmitted by the satellite carrier, or to 
        carry upon request the signals of more than one local 
        television broadcast station in a single local market 
        that is affiliated with a particular broadcast network 
        (as the term `broadcast network' is defined by the 
        Register of Copyrights by regulation).
          ``(3) Carriage of all local television stations on 
        contiguous channels.--All local television broadcast 
        stations retransmitted by a satellite carrier to 
        subscribers in the stations' local markets shall be 
        made available to subscribers in their local markets on 
        contiguous channels and in a nondiscriminatory manner 
        on any navigational device, on-screen program guide, or 
        menu.
          ``(4) Compensation for carriage.--A satellite carrier 
        shall not accept or request monetary payment or other 
        valuable consideration in exchange either for carriage 
        of local television broadcast stations in fulfillment 
        of the requirements of this subsection or for channel 
        positioning rights provided to such stations under this 
        subsection, except that any such station may be 
        required to bear the costs associated with delivering a 
        good quality signal to the designated local receive 
        facility of the satellite carrier.
          ``(5) Remedies.--
                  ``(A) Complaints by broadcast stations.--
                Whenever a local television broadcast station 
                believes that a satellite carrier has failed to 
                meet its obligations under this subsection, 
                such station shall notify the carrier, in 
                writing, of the alleged failure and identify 
                its reasons for believing that the satellite 
                carrier is obligated to carry upon request the 
                signal of such station or has otherwise failed 
                to comply with other requirements of this 
                subsection. The satellite carrier shall, within 
                30 days of such written notification, respond 
                in writing to such notification and either 
                begin carrying the signal of such station in 
                accordance with the terms requested or state 
                its reasons for believing that it is not 
                obligated to carry such signal or is in 
                compliance with other requirements of this 
                subsection, as the case may be. A local 
                television broadcast station that is denied 
                carriage in accordance with this subsection by 
                a satellite carrier or is otherwise harmed by a 
                response by a satellite carrier that it is in 
                compliance with other requirements of this 
                subsection may obtain review of such denial or 
                response by filing a complaint with the 
                Register of Copyrights. Such complaint shall 
                allege the manner in which such satellite 
                carrier has failed to meet its obligations and 
                the basis for such allegations.
                  ``(B) Opportunity to respond.--The Register 
                shall afford the satellite carrier against 
                which a complaint is filed under subparagraph 
                (A) an opportunity to present data and 
                arguments to establish that there has been no 
                failure to meet its obligations under this 
                subsection.
                  ``(C) Remedial actions; dismissal.--Within 
                120 days after the date a complaint is filed 
                under subparagraph (A), the Register shall 
                determine whether the satellite carrier has met 
                its obligations under this chapter. If the 
                Register determines that the satellite carrier 
                has failed to meet such obligations, the 
                Register shall order the satellite carrier, in 
                the case of an obligation to carry a station, 
                to begin carriage of the station and to 
                continue such carriage for at least 12 months, 
                or, in the case of the failure to meet other 
                obligations under this subsection, shall take 
                other appropriate remedial action. If the 
                Register determines that the satellite carrier 
                has fully met the requirements of this chapter, 
                the Register shall dismiss the complaint.
          ``(6) Regulations by Register of Copyrights.--Within 
        180 days after the effective date of this section,the 
Register of Copyrights shall, following a rulemaking proceeding, issue 
regulations implementing the requirements imposed by this subsection.
  ``(l) Retransmission Consent.--
          ``(1) Retransmission consent required.--No satellite 
        carrier shall retransmit the signal of a television 
        broadcast station, or any part thereof, except--
          ``(A) with the express authority of the station; or
          ``(B) pursuant to subsection (k) of this section, in 
        the case of a station electing, in accordance with this 
        subsection, to assert the right to carriage under such 
        subsection.
          ``(2) Exclusions.--The provisions of this subsection 
        shall not apply to--
                  ``(A) retransmission of the signal of a 
                noncommercial television broadcast station;
                  ``(B) retransmission of the signal of a 
                superstation by a satellite carrier to 
                subscribers for private home viewing if the 
                originating station was a superstation on May 
                1, 1991, and on December 31, 1997, such station 
                was a network station and its signal was 
                retransmitted by a satellite carrier directly 
                to at least 500,000 subscribers for private 
                home viewing; or
                  ``(C) retransmission of the signal of a 
                television broadcast station that is owned or 
                operated by, or affiliated with, a broadcasting 
                network directly to a home satellite antenna, 
                if the household receiving the signal is an 
                unserved household.
          ``(3) Promulgation of regulations.--Within 45 days 
        after the effective date of the Copyright Compulsory 
        License Improvement Act of 1998, the Register of 
        Copyrights shall commence a rulemaking proceeding to 
        promulgate regulations governing the exercise by 
        television broadcast stations of the right to grant 
        retransmission consent under this subsection, and such 
        other regulations as are necessary to administer the 
        limitation contained in paragraph (2). Such regulations 
        shall establish election time periods that correspond 
        with those regulations adopted under subparagraph (B) 
        of section 325(b)(3) of the Communications Act of 1934. 
        The rulemaking shall be completed within 180 days after 
        the effective date of the Copyright Compulsory License 
        Improvement Act of 1998.
  ``(m) Definitions.--In this section:
          ``(1) Designated market area.--The term `designated 
        market area' means a designated market area, as 
        determined by the Nielsen Media Research and published 
        in the DMA Market and Demographic Report.
          ``(2) Distributor.--The term `distributor' means an 
        entity which contracts to distribute secondary 
        transmissions from a satellite carrier and, either as 
asingle channel or in a package with other programming, provides the 
secondary transmission either directly to individual subscribers or 
indirectly through other program distribution entities.
          ``(3) Local market.--(A) In the case of both 
        commercial and noncommercial television broadcast 
        stations, the term `local market' means the designated 
        market area in which a station is located.
          ``(B) In the case of a commercial television 
        broadcast station, all commercial television broadcast 
        stations licensed to a community within the same 
        designated market area are within the same local 
        market.
          ``(C) Following a written request, the Register of 
        Copyrights may, with respect to a particular local 
        market, include additional commercial television 
        broadcast stations to better effectuate the purposes of 
        this section. In considering such a request, the 
        Register shall primarily consider evidence of historic 
        viewing patterns within the local market concerned. The 
        Register may determine that particular commercial 
        television broadcast stations serve more than one local 
        market
          ``(D) In the case of a noncommercial educational 
        television broadcast station, the local market includes 
        any station that is licensed to a community within the 
        same designated market area as the noncommercial 
        educational television broadcast station.
          ``(4) Local receive facility.--The term `local 
        receive facility' means the reception point in the 
        local market of a television broadcast station or in a 
        market contiguous to the local market of a television 
        broadcast station at which a satellite carrier 
        initially receives the signal of the station for 
        purposes of transmission of such signals to the 
        facility which uplinks the signals to the carrier's 
        satellites for secondary transmission to the satellite 
        carrier's subscribers. The designation of a local 
        receive facility by a satellite carrier shall not be 
        used to undermine or evade the carriage requirements 
        imposed by this chapter.
          ``(5) Subscriber.--The term `subscriber' means an 
        entity that receives a secondary transmission service 
        by means of a secondary transmission from a satellite 
        and pays a fee for the service, directly or indirectly, 
        to the satellite carrier or to a distributor.
          ``(6) Television broadcast station.--The term 
        `television broadcast station' means an over-the-air 
        commercial or noncommercial television broadcast 
        station licensed by the Federal Communications 
        Commission under subpart E of part 73 of title 47, Code 
        of Federal Regulations, as such regulations are in 
        effect on August 4, 1998, and as they may be amended 
        thereafter.
          ``(7) Satellite carrier, etc.--The terms `private 
        home viewing', `satellite carrier', `secondary 
        transmission', `superstation', and `unserved household' 
        have the meanings given such terms in section 
        119(d).''.
  (b) Standing to Sue For Satellite Carrier Failure to Carry 
All Local Television Broadcast Stations.--Section 501 of title 
17, United States Code, is amended by adding at the end the 
following:
  ``(f) With respect to any satellite carrier making a 
secondary transmission of a primary transmission made by a 
television broadcast station to subscribers located within the 
local market of such station that fails to carry all television 
broadcast stations located within that market as required by 
section 122, any station that has not given retransmission 
consent and is improperly denied carriage shall have standing 
to bring a copyright infringement action with respect to the 
unauthorized performance or display of works embodied in the 
secondary transmission.
  ``(g) With respect to any secondary transmission that is made 
by a satellite carrier of a primary transmission embodying the 
performance or display of a work and that is actionable as an 
act of infringement under section 122, a television broadcast 
station holding a copyright or other license to transmit or 
perform the same version of that work shall, for purposes of 
subsection (b) of this section, be treated as a legal or 
beneficial owner of that work if such secondary transmission 
occurs within the local market of that station. For purposes of 
this subsection and subsection (f), the definitions contained 
in section 122 of this title apply.''.
  (c) Additional Remedies For Failure By Satellite Carriers to 
Carry All Local Television Broadcast Stations.--Chapter 5 of 
title 17, United States Code, is amended by adding at the end 
the following:

``Sec. 512. Remedies for failure by satellite carriers to carry all 
                    local broadcast stations

  ``(a) In any action filed pursuant to section 122(j), the 
following remedies shall be available:
          ``(1) If the action is brought by a party identified 
        in subsection (b) of section 501, the remedies provided 
        by sections 502 through 505, and the remedy provided by 
        subsection (b) of this section.
          ``(2) If an action is brought by a television 
        broadcast station identified in subsection (f) of 
        section 501, the remedies provided by sections 502 and 
        505, together with any actual damages suffered by such 
        station as a result of the infringement, and the remedy 
        provided by subsection (b) of this section.
  ``(b) In any action filed pursuant to section 122(j) of this 
title in which carriage of a television broadcast station has 
been improperly denied, the court shall decree that the 
satellite carrier is deprived of the statutory license under 
section 122 of this title until carriage of such station has 
been restored.''.
  (d) Technical and Conforming Amendments.--(1) The table of 
sections for chapter 1 of title 17, United States Code, is 
amended by adding after the item relating to section 121 the 
following:

``122. Limitations on exclusive rights; secondary transmissions by 
          satellite carriers within local markets.''.

  (2) The table of sections for chapter 5 of title 17, United 
States Code, is amended by adding after the item relating to 
section 511 the following:

``512. Remedies for failure by satellite carriers to carry all local 
          broadcast stations.''.

SEC. 3. EXTENSION OF APPLICABILITY OF SECTION 119 OF TITLE 17, UNITED 
                    STATES CODE.

  Section 4(a) of the Satellite Home Viewer Act of 1994 (17 
U.S.C. 119 note; Public Law 103-369) is amended by striking 
``December 31, 1999'' and inserting ``December 31, 2004''.

SEC. 4. UNSERVED HOUSEHOLDS.

  Section 119(d)(10) of title 17, United States Code, is 
amended to read as follows:
          ``(10) Unserved household.--The term `unserved 
        household', with respect to a particular television 
        network, means a household that 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.''.

SEC. 5. PUBLIC BROADCASTING SERVICE SATELLITE FEED; APPLICATION OF 
                    FEDERAL COMMUNICATIONS COMMISSION REGULATIONS.

  (a) Secondary Transmissions.--Section 119(a) of title 17, 
United States Code, is amended--
          (1) in paragraph (1)--
                  (A) by striking the paragraph heading and 
                inserting ``(1) Superstations and pbs satellite 
                feed.--'';
                  (B) by inserting ``or by the Public 
                Broadcasting Service satellite feed'' after 
                ``superstation''; and
                  (C) by inserting ``is permissible under the 
                rules, regulations, or authorizations of the 
                Federal Communications Commission,'' after 
                ``satellite carrier to the public for private 
                home viewing,''; and
          (2) in paragraph (2), by inserting ``is permissible 
        under the rules, regulations, or authorizations of the 
        Federal Communications Commission,'' after ``satellite 
        carrier to the public for private home viewing,''.
  (b) Definition.--Section 119(d) of title 17, United States 
Code, is amended by adding at the end the following:
          ``(12) Public broadcasting service satellite feed.--
        The term `Public Broadcasting Service satellite feed' 
        means the national satellite feed distributed by the 
        Public Broadcasting Service, consisting of educational 
        and informational programming intended for private home 
        viewing, to which the Public Broadcasting Service holds 
        national terrestrial broadcast rights.''.

SEC. 6. TEMPORARY STAY OF SATELLITE ROYALTY FEE INCREASE.

  Notwithstanding any other provision of law, the Copyright 
Office shall not before December 31, 1999, implement, enforce, 
collect, or award copyright royalty fees pursuant to the 
decision of the Librarian of Congress on October 28, 1997, 
which established a royalty fee of $0.27 per subscriber per 
month for the retransmission of distant broadcast signals by 
satellite carriers, and no obligation or liability for 
copyright royalty fees shall accrue before December 31, 1999, 
pursuant to that decision. This section shall not affect 
implementing, enforcing, collecting, or awarding copyright 
royalty fees pursuant to the royalty fee structure affected by 
the decision, as it existed prior to October 28, 1997.

  Amend the title so as to read:

    A bill to provide for statutory copyright licensing of 
secondary transmissions by satellite carriers of primary 
transmissions of television broadcast stations within the local 
markets of such stations, and for other purposes.

                          Purpose and Summary

    The purpose of H.R. 2921, the ``Copyright Compulsory 
License Improvement Act,'' is to improve the current copyright 
compulsory license applied to satellite carriers of copyrighted 
programming contained on television broadcast signals, and to 
provide for a new copyright compulsory license that will allow 
satellite carriers to retransmit a local broadcast signal into 
the same local market from which it originated for no copyright 
fee. This will essentially provide to satellite carriers the 
same opportunities as their cable competitors while also 
applying many of the same obligations. This parity will lead to 
increased exposure of copyrighted programming to consumers, 
resulting in lower prices for cable and satellite services 
because such services will have to compete with each other to 
deliver desired programming directly to American homes.

                Background and the Need for Legislation

                  cable: Sec. 111 of the copyright act

    National network or local television stations negotiate 
privately with copyright owners, who possess the exclusive 
property right to authorize the exploitation of content 
contained in their television programs for ``program rights''--
the authority to broadcast publicly their programs over signals 
transmitted by the broadcaster. Payment is made for such 
program rights by the broadcaster directly to the copyright 
owner.
    In 1976, with the rise of cable as an alternative means of 
multichannel video delivery, Congress feared that the infant 
cable industry would not have the financial ability to 
negotiate privately with copyright owners for program rights to 
viewers not covered by fees paid for such program rights by 
broadcasters. In order to encourage the rise of cable as a 
viable video delivery system for consumers, Congress bestowed 
on that industry, in the Copyright Act of 1976, a permanent 
compulsory license.1
---------------------------------------------------------------------------
    \1\ 17 U.S.C. Sec. 111, et seq.
---------------------------------------------------------------------------
    This license compels copyright owners to allow the 
``retransmission'' of a local television signal into the same 
local market from which it originated, free of charge. 
Copyright owners do not receive compensation for the 
retransmission of a local signal back into the same local 
market because they have already been fully compensated through 
program rights fees paid by broadcasters for such programming 
to reach viewers in one manner or another in that market.
    The cable compulsory license also compels copyright owners 
to allow the retransmission of television stations outside of a 
local market (a distant signal) at a government-set rate. 
Copyright owners are entitled to compensation for distant 
signals since these signals will reach viewers not covered by a 
program rights fee paid by a broadcaster for viewers in a 
certain market.
    The fees cable operators pay for distant signal 
retransmission are paid to the copyright owners through a 
distribution proceeding conducted under the auspices of the 
United States Copyright Office.2
---------------------------------------------------------------------------
    \2\ See 17 U.S.C. Sec. Sec. 801-803.
---------------------------------------------------------------------------

                Satellite: Sec. 119 of the copyright act

    During the mid-1980's, the direct-to-home satellite 
industry began to offer an increasingly popular alternative for 
the delivery of multichannel video. Congress grew concerned, 
however, that satellite, still in its infancy like cable before 
it, might lack the financial ability to negotiate privately 
with copyright owners for the necessary program rights (to 
viewers not covered by fees paid for such program rights by 
broadcasters). To expedite the viability of satellite as an 
alternative video delivery system for consumers, and to clarify 
the application of the Sec. 111 license, Congress created a 
separatecompulsory license when it enacted the Satellite Home 
Viewer Act (SHVA) of 1988.\3\
---------------------------------------------------------------------------
    \3\ 17 U.S.C. Sec. 119.
---------------------------------------------------------------------------
    The license requires copyright owners to allow the 
retransmission of television stations outside of a local market 
(a distant signal to ``unserved households'') at a government-
set rate. No license was created to compel the retransmission 
of local signals into local markets because, at the time, 
satellite carriers were not capable technologically of 
providing such retransmissions. Under the license, copyright 
owners are entitled to compensation for distant signals 
retransmitted to ``unserved households'' since the signal will 
reach viewers not covered by a program-rights fee paid by a 
broadcaster for viewers in a certain market.
    The SHVA further awarded satellite carriers the right to 
retransmit a local television signal to unserved households 
without the broadcaster's permission and without payment to the 
broadcaster. Once again, this subsidy was considered necessary 
to stimulate the growth of the direct-to-home satellite 
industry.
    It is similar in many respects to the cable license. 
Section 119 allows a satellite carrier to retransmit distant 
network broadcast signals to ``unserved'' subscribers for 
private home-viewing upon semiannual submissions of statements 
of account and royalty fees to the Copyright Office. Unlike 
cable royalties, however, Sec. 119 royalties are calculated on 
a flat, per subscriber, per signal, monthly fee basis. 
Television signals are divided into two categories--
superstation signals (commercial independent stations) and 
network signals (commercial network stations and noncommercial 
educational stations)--each with its own attendant royalty 
rates. Satellite carriers simply multiply the respective 
royalty rate for each signal they carry by the number of 
subscribers who receive the signal.
    In 1991, an arbitral panel increased the rates to the 
following levels: $0.175 cents per subscriber per month for any 
superstation signal subject to syndex rules; $0.14 cents per 
subscriber per month for any superstation signal not subject to 
syndex rules; and $0.06 cents per subscriber per month for any 
network signal.
    Although a satellite carrier may retransmit a superstation 
signal to subscribers anywhere in the United States, the 
Sec. 119 license imposes a constraint on the retransmission of 
network signals to certain households. As noted, a satellite 
carrier may only retransmit network signals to ``unserved 
households.'' Section 119(d)(10) defines such a household as 
one ``. . . that cannot receive, through the use of a 
conventional outdoor rooftop . . . antenna, an over-the-air 
signal of grade B intensity . . ., and [which has not received 
a cable signal within the previous 90 days.]'' The broadcast 
and satellite industries also refer to those locations in which 
``unserved households'' are situated as ``white areas.''
    Once the SHVA expired in 1994, Congress reauthorized it for 
another five years. While the basic framework of the 1988 Act 
remained in place, two significant changes were made: the first 
involved the creation of a temporary mechanism to allow 
broadcasters to target impermissible service of network signals 
in ``white areas,'' which expired at the end of calendar year 
1996. The other reform concerned the application of a fair 
market value standard for adjusting royalty rates under the 
license.
    In contrast to the Sec. 111 compulsory license, which has 
no expiration date, the SHVA of 1994 and the Sec. 119 license 
will expire, in the absence of reauthorization, at the end of 
calendar year 1999.

          The Copyright Office Review of the Licensing Regimes

    The Copyright Office conducted a review of the copyright 
licensing regimes governing the compulsory licenses, and 
released its findings on August 1, 1997. The report contains, 
inter alia, the following findings and recommendations:
    1. Perpetuation of Both Licenses. Ideally, the Copyright 
Office believes Sec. 111 and Sec. 119 should be repealed. 
Practically speaking, however, many commercial arrangements and 
investments are made in reliance upon their existence; and 
critics have yet to identify a workable alternative in their 
absence. Therefore, as long as the cable license exists 
indefinitely, so should the satellite license be extended 
indefinitely.
    2. Harmonization of Both Licenses. Differences between the 
two should be removed where possible, but there is no practical 
benefit in terms of public administration to harmonize both 
into one license.
    3. Structure of Cable Rates. (a) Amend Sec. 111 rates so 
that they reflect fair market value, the best alternative being 
a flat, per subscriber, per signal fee. (b) Eliminate reference 
to the 1976 must-carry rules and define a ``local'' market by 
its area of dominant influence (ADI). (c) Define Public 
Broadcasting Service (PBS) markets by a 50-mile radius from a 
PBS station's community of license.
    4. Application of Cable License to Open Video Systems (OVS) 
Operations. Because of its similarity to cable, any OVS should 
be eligible for the Sec. 111 license.
    5. Passive Carrier Exemption. Section 111(a)(3) exempts a 
carrier from liability (copyright infringement) if it has ``. . 
. no direct or indirect control over the content of selection . 
. .'' of the broadcast signal transmitted or the recipients of 
the signal (and so long as it only provides the hardware of 
transmission ``. . . for the use of others. . . .'' The 
Copyright Office advocates that an OVS carrier receive the 
benefit of the exemption only when the operator retransmits 
broadcast signals for an unaffiliated programmer and no 
broadcast stations invoke their must-carry rights.
    6. Section 119 and ``White Areas.'' (a) The Copyright 
Office believes that Congress should eventually allow the 
retransmission of signals generated by all television broadcast 
stations, commercial as well as PBS, within each station's 
local market. (b) Until such time, eliminate the Grade B 
contour standard and substitute a ``red zone/green zone'' 
approach; that is, a subscriber living within a ``red zone'' (a 
broadcast station's local market) could not receive a distant 
signal unless he or she paid a surcharge distributed by the 
Copyright Office to affiliates.
    7. Treatment of Network Signals. (a) Equalize rates for the 
retransmission of network as well as independent (superstation) 
signals. (b) Owners of network programming should receive cable 
royalties in addition to satellite royalties.
    8. Payment for Local Signals. The Copyright Office 
advocates retaining payment of a minimum copyright royalty fee 
for cable systems.

                       ``White Area'' Litigation

    As discussed supra, the SHVA of 1994 created a new and 
temporary mechanism to address the issue of retransmission of 
network signals to unserved households. The statute authorized 
a network affiliate to issue written challenges to a satellite 
carrier for any subscribers that the affiliate believed were 
not entitled to received network carriage from the carrier. If 
a given subscriber resided in the Grade B contour of the 
challenging station (generally thought of as the station's 
over-the-air service area), the satellite carrier, upon 
receiving the challenge, had the option of either turning off 
the subscriber's service of that network, or conducting a 
measurement of the intensity of the signal arriving at the 
subscriber's rooftop antenna. If the measurement indicated that 
the subscriber did receive a signal of Grade B intensity, then 
the carrier would pay for the test and immediately terminate 
service of that signal. If the test revealed the subscriber did 
not receive a Grade B signal, however, the service would 
continue and the challenging broadcast station would pay for 
the test.4
---------------------------------------------------------------------------
    \4\ 17 U.S.C. Sec. 119(a)(8).
---------------------------------------------------------------------------
    The application of this mechanism was highly 
unsatisfactory. Many challenges were issued, but few tests were 
conducted. Satellite carriers complained that the tests were 
too costly, and both sides argued over the mechanics and 
parameters of an ``appropriate'' test (the broadcasters 
advocating the Grade B contour standard, the carriers a 
``picture quality'' standard). Broadcast affiliates began suing 
the largest carrier, Primetime 24, in different venues around 
the country, and have urged Congress not to extend the Sec. 119 
license as a result of the satellite industry's ``bad faith'' 
in ``refusing'' to abide by the terms of the SHVA of 1994. 
Primetime 24 responded by urging its subscribers to contact 
Congress to ``fix'' the law.
    There have been significant developments of late in two of 
the lawsuits brought against Primetime 24 and its agents. In 
the first case, the U.S. District court for the Southern 
District of Florida granted a motion for preliminary injunction 
at the request of plaintiffs CBS and FOX against Primetime 24. 
The Injunction will result in Primetime 24 discontinuing 
nationwide the importation of CBS and FOX distant signals to 
customers who do not live in an ``unserved household'' within 
the Grade B as determined by Longley-Rice propagation maps. The 
trial of this case is proceeding as of the filing of this 
Report.
    Additionally, on August 19, 1998, the U.S. District court 
for the Middle District of NorthCarolina issued a permanent 
injunction in favor of ABC against Primetime 24 finding that Primetime 
24 engaged in a willful and repeated pattern and practice of 
transmitting ABC programming to households ineligible for such service 
under the SHVA. The decision will result in a discontinuation of any 
distant ABC signals to Primetime 24 customers within the local market 
of the Raleigh, North Carolina, ABC affiliate station (WTVD).
    Lastly, on July 14, 1998, the National Rural 
Telecommunications Cooperative petitioned the Federal 
Communications Commission (FCC) to initiate a rulemaking 
procedure aimed at establishing a new definition of an over-
the-air signal of Grade B intensity. The Commission has not yet 
taken any action. On August 18, 1998, Echostar Communications 
Corporation filed a similar petition with the FCC.

                            ``Spot-Beaming''

    Echostar Communications Corporation, Capital Broadcasting 
Company, and certain other satellite companies hope to solve 
the ``white area'' problem while providing competition to the 
cable industry. They wish to ``spot-beam'' signals, including 
local broadcast signals, to households. If feasible, this 
breakthrough would enable a satellite carrier to uplink a local 
broadcast signal and retransmit it directly (and with perfect 
clarity) to the affected broadcaster's service area. As a 
result, satellite subscribers would receive local broadcasts of 
network programming, thereby resolving the ``white area'' 
controversy between the cable and broadcast industries since 
satellite, like cable, could deliver local signals through its 
service to the intended market. Unlike cable, however, 
satellite companies do not operate with a license which 
incorporates the relevant regulating provisions. A change to 
copyright law would be necessary to clarify that such local-to-
local retransmission is permissible.
    The cable industry argues that this technology is as yet 
unperfected, and that roughly one-quarter of the entire country 
would still be unserved by the technology due to limited 
satellite space, assuming that Congress amends the Copyright 
Act to authorize the activity. In addition, cable maintains 
that the same tax and regulatory constraints placed on its 
operations should also apply to those of satellite if both 
industries are permitted to offer local-to-local service.
    On December 23, 1997, Echostar Communications Corporation 
filed a petition with the Copyright Office requesting that the 
Office issue a rule concerning whether a satellite carrier may 
retransmit network station signals to households within a 
station's local market area. The Copyright Office has granted 
that request and has begun a rulemaking proceeding. Comments on 
the proposed rule were to be submitted to the Copyright Office 
by February 28, 1998. That same month, Echostar began to offer 
local-to-local service in six markets, with a goal of expanding 
to 20 markets nationwide.

              arbitral decision to increase satellite fees

    Originally, the former Copyright Royalty Tribunal (CRT) 
distributed to copyright owners the royalties received by the 
Copyright Office and deposited the royalty fees with the U.S. 
Treasury in interest-bearing accounts, pending their 
distribution. In 1993 Congress abolished the CRT, however, and 
replaced it with a system of ad hoc copyright arbitration 
panels (CARPs), administered by the Copyright Office under the 
direction of the Librarian of Congress.5
---------------------------------------------------------------------------
    \5\ See supra note 2.
---------------------------------------------------------------------------
    The SHVA of 1988 established initial rates for the 
satellite compulsory license, which were later adjusted by the 
old CRT in 1992. In passing the SHVA of 1994, however, Congress 
directed future CARPs to adjust satellite rates based on a fair 
market value standard.
    A recently-convened CARP published its determination 
pursuant to this new standard on August 28, 1997, which raises 
superstation signal rates (currently $0.175 cents per 
subscriber, per month) and network signal rates (currently 
$0.06 per subscriber, per month) to $0.27 cents a piece, and 
applied the increases retroactively to July 1, 1997. The 
Librarian affirmed the decision but chose to apply the changes 
prospectively; they took effect on January 1, 1998.
    The practical consequence of the decision means that, as of 
January 1, 1998, satellite broadcast companies must pay $0.27 
per subscriber, per month, per broadcast signal (superstation 
and distant network signals alike). Prior to the decision, 
satellite broadcast companies paid $0.06 per subscriber, per 
month for each distant network signal, $0.14 per subscriber, 
per month for each ``syndex-proof'' superstation signal, and 
$0.175 per subscriber, per month for each ``non-syndex proof'' 
superstation signal. The first copyright fee payment by the 
satellite companies under the newrate was due on August 1, 
1998.
    Satellite carriers and distributors are irate over the 
decision. They fear that if they raise subscriber rates to 
compensate for the CARP decision that customers will drop 
satellite service, or switch to cable. In addition to hurting 
those businesses affected by rate proceedings under Sec. 119, 
these same organizations argue that cable will face even less 
competition in the foreseeable future.

                        need for the legislation

    Although the cable and satellite compulsory licenses have 
similarities, there are important differences which prevent 
satellite from becoming a true competitor to cable. Technology 
has changed significantly since the cable and satellite 
compulsory licenses were created. In a very short time, 
satellite carriers will be able to bring local programming 
through their services to viewers of that local market. The 
goal of this legislation is to facilitate such a shift to local 
service, and contains the following changes in furtherance of 
that end and to the benefit of consumers:
    1. Provisions which will allow satellite carriers to 
retransmit local network signals into the local market of that 
station via satellite. (Pursuant to this reform, those 
companies which offer local-to-local service must carry all 
local broadcast stations within a given market.);
    2. A provision which will extend the satellite compulsory 
license for five years;
    3. A provision which lifts the current prohibition which 
prevents a qualified new subscriber from receiving network 
signals for 90 days;
    4. A provision which allows satellite carriers to 
rebroadcast a national Public Broadcasting Services (PBS) 
signal; and
    5. A provision which places a moratorium on the increase in 
copyright fees to be paid by satellite carriers until December 
31, 1999, matching a provision adopted by the Subcommittee on 
Courts and Intellectual Property.

                                Hearings

    The Committee's Subcommittee on Courts and Intellectual 
Property held two days of oversight hearings on issues 
addressed in H.R. 2921 on October 30, 1997, and February 4, 
1998. Testimony was received from 19 witnesses representing 17 
public and private organizations

                        Committee Consideration

    On August 4, 1998, the Committee met in open session and 
ordered reported favorably the bill H.R. 2921 with amendment by 
voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
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.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budget authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 2921, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 4, 1998.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary,
U.S. House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2921, the 
Copyright Compulsory License Improvement Act of 1998.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Mark Hadley 
(for federal costs), Hester Grippando (for revenues), Pepper 
Santalucia (for the state and local impact), and Jean Wooster 
(for the private-sector impact).
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

H.R. 2921--Copyright Compulsory License Improvement Act of 1998

    Summary: Pursuant to the Satellite Home Viewer Act of 1988, 
satellite carriers (companies that use satellite transmissions 
to provide television signals directly to consumers) pay a 
monthly royalty fee for each subscriber to the U.S. Copyright 
Office for the right to retransmit network and superstation 
signals by satellite to subscribers for private home viewing. 
The Copyright Office later distributes these fees to those who 
own copyrights on the material retransmitted by satellite.
    H.R. 2921 would allow satellite carriers to retransmit the 
signals of local television broadcast stations into the local 
markets of those stations The bill would also extend the 
requirement that satellite carriers pay royalty fees to the 
federal government until December 31, 2004. Finally, the bill 
would rescind an increase in those fees that went into effect 
in January and delay that increase for two years.
    H.R. 2921 would decrease revenues from royalty collections 
by $115 million in 1999, but increase revenues thereafter. CBO 
estimates that the bill would result in a net increase in 
revenues of $692 million over the 1999-2003 period and of $544 
million in the following two years. After review by an 
arbitration panel, the royalty fees will be paid to copyright 
owners, along with accrued interest earnings. With higher 
royalty collections, the payments to copyright holders will 
also be higher, by an estimated $196 million over the 1999-2003 
period, and by another $1.2 billion over the following five 
years. Assuming appropriation of the necessary amounts, CBO 
estimates that issuance of regulations regarding secondary 
transmissions would cost the Copyright Office about $500,000 in 
1999. Because H.R. 2921 would affect both revenues and direct 
spending, it would be subject to pay-as-you-go procedures.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2921 is shown in the following table. 
For purposes of this estimate, CBO assumes the bill will be 
enacted at or near the start of fiscal year 1999. CBO also 
assumes that payments from the federal government to copyright 
holders for satellite transmissions would follow historical 
patterns. The costs of this legislation fall within budget 
function 370 (commerce and housing credit).

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                        1998      1999      2000      2001      2002      2003  
----------------------------------------------------------------------------------------------------------------
Receipts and Spending Under Current Law:                                                                        
    Estimated Revenues \1\..........................       235       322       259       183       193       202
    Estimated Budget Authority \2\..................       263       450       286       208       217       225
    Estimated Outlays...............................       372       332       295       250       216       205
Proposed Changes:                                                                                               
    Estimated Revenues..............................         0      -115        50       214       250       293
    Estimated Budget Authority......................         0       -85        48       219       266       315
    Estimated Outlays...............................         0       -10       -44       -36        77       209
    Net Increase or Decrease (-) in Surplus.........         0      -105        94       250       173        84
Receipts and Spending Under H.R. 2921:                                                                          
    Estimated Revenues \1\..........................       235       207       309       397       443       495
    Estimated Budget Authority \2\..................       263       365       334       427       483       540
    Estimated Outlays...............................       372       322       251       214       293       414
----------------------------------------------------------------------------------------------------------------
\1\ Includes royalty collections from cable television stations, jukebox licenses, satellite carriers, and      
  digital audio devices.                                                                                        
\2\ Payments to copyright owners include interests earnings on securities held by the Copyright Office.         
                                                                                                                
Note: In addition to the effects shown above, H.R. 2921 would increase spending subject to appropriation by     
  about $500,000 in fiscal year 1999.                                                                           

    Basis of estimate: H.R. 2921 would allow a satellite 
carrier to make secondary transmissions of local television 
broadcasts, extend copyright royalty fees, and delay in 
increase in those fees. All of these provisions affect payments 
by satellite carriers to the federal government and payments by 
the federal government to copyright holders. Assuming enactment 
of the bill near the beginning of fiscal year 1999, CBO 
estimates that H.R. 2921 would increase revenues by $692 
million and increase spending by $196 million over the 1999-
2003 period.
    Secondary transmissions: Section 2 of H.R. 2921 would allow 
satellite carriers to retransmit the signals of local 
television broadcast stations into the local markets of those 
stations. Secondary transmissions would make the services 
provided by satellite carriers much more attractive to people 
who are not customers of cable television stations. The bill 
would also eliminate a provision of law that requires customers 
of cable television service to wait 90 days between ending that 
service and purchasing satellite service. As a result, CBO 
expects that the number of subscribers to satellite services 
would increase more rapidly than under current law. Based on 
information from the Copyright Office, CBO estimates that under 
H.R. 2921 the annual change in the volume of satellite services 
would increase from a projected rate of 10 percent a year to 17 
percent a year by 2001. By 2003, this increased rate of growth 
would result in additional annual revenues of $64 million, all 
of which would ultimately be paid out to copyright holders. 
Because these provisions could increase the incentives for 
choosing satellite service over cable service, they might lead 
to a loss in revenues from cable fees. However, based on 
information from the Copyright Office and the cable and 
satellite industries, CBO estimates that any such reduction in 
revenues would not be significant.
    Section 2 would result in a small discretionary cost for 
the Copyright Office to issue the required regulations. CBO 
estimates that the cost of issuing those regulations--within 
180 days after enactment--would be about $500,000, subject to 
the availability of appropriated funds.
    Delay of increase in the copyright royalty fee: H.R. 2921 
would prohibit Copyright Office from collecting or awarding 
copyright royalty fees pursuant to a rule issued on October 28, 
1997, by the Librarian of Congress, which increased the royalty 
fee to $0.27 per subscriber per month, during calendar years 
1998 and 1999. Previously, the royalty fee was $0.06 per 
subscriber per month for distant networks and between $0.14 and 
$0.175 per subscriber per month for superstations. The 
Copyright Office has already received payments at the higher 
rate from satellite carriers for the first six months of 
calendar year 1998. Assuming that, under H.R. 2921, the 
additional revenues from satellite carriers in 1998 would be 
credited to the revenues due in 1999, CBO estimates that the 
bill would reduce revenues by $115 million in fiscal year 
1999--about $30 millionin credits for the excess 1998 payments 
and $85 million for the reduction in 1999 payments. Under the bill, the 
fee imposed on satellite carriers would revert to its current higher 
level of $0.27 per subscriber per month on December 31, 1999.
    Extension of copyright royalty fees: Under current law, the 
royalty fees for satellite carriers expire on December 31, 
1999. H.R. 2921 would extend royalty fees through December 31, 
2004, increasing both revenue from satellite carriers and 
payments to copyright holders (including interest) during the 
2000-2005 period. CBO estimates that revenues from satellite 
carriers would total $135 million in 2000 (of which $91 million 
would be from the proposed extension of fees). In 2000, the net 
change in estimated revenues is relatively small because of a 
lag between changes in fee rates and the collection of such 
fees. In particular, the first of two annual payments to the 
Copyright Office in 2000 would be lower than under current law 
because of the lower rates required by the bill for 1999. Only 
the second of those two payments would reflect the bill's 
extension of the authority to collect royalty fees. By 2003, we 
expect additional revenues to total $293 million.
    Payments to copyright holders: S. 2921 would result in 
additional spending because all revenues are eventually paid to 
copyright holders with interest. Historical spending patterns 
indicate that copyright holders may receive the fees and 
interest up to four years after the Copyright Office has 
collected the revenues. Thus, CBO estimates a significant lag 
between changes in revenues and the eventual changes in outlays 
that stem from copyright fees.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays and governmental receipts that are subject 
to pay-as-you-go procedures are shown in the following table. 
For the purposes of enforcing pay-as-you-go procedures, only 
the effects in the current year, the budget year, and the 
succeeding four years are counted.

                                                        [By fiscal year, in millions of dollars]                                                        
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  1998     1999    2000    2001    2002    2003    2004    2005    2006    2007    2008 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays.............................................       0      -10     -44     -36      77     209     279     326     318     187      45
Changes in receipts............................................       0     -115      50     214     250     293     343     201       0       0       0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 2921 
would impose no intergovernmental or private-sector mandates as 
defined in UMRA. However, the delay in the increase in 
copyright royalty fees would impose costs on the copyright 
holders, including some state and local government entities, 
while reducing costs of satellite carriers. Because of this 
delay, the fees collected in 1998 and 1999 that the Copyright 
Office would distribute over fiscal years 1999 through 2001 to 
the industry groups that represent copyright holders would be 
reduced by $90 million. The bill would also extend the royalty 
fees through December 31, 2004.
    Previous CBO estimates: On July 9, 1998, CBO transmitted an 
estimate for H.R. 2921, the Multichannel Video Competition and 
Consumer Protection Act of 1997, as ordered reported by the 
House Committee on Commerce on June 24, 1998. On March 26, 
1998, CBO prepared a cost estimate for S. 1422, the Federal 
Communications Commission Satellite Carrier Oversight Act, as 
ordered reported by the Senate Committee on Commerce, Science, 
and Transportation on March 12, 1998. Differences between those 
estimates and the estimate of the Judiciary Committee's version 
of H.R. 2921 reflect differences in the bills and the timing of 
fee collections. Neither the House Commerce Committee's version 
of H.R. 2921 nor S. 1422 would extend the copyright payments by 
satellite carriers beyond December 31, 1999. In addition, the 
previous estimates assumed that the bills would be enacted 
before any payments of the increased 1998 fees were made.
    The House Commerce Committee's version of H.R. 2921 would 
postpone the scheduled increase in royalty fees paid by 
satellite carriers until July 1999--six months sooner than the 
Judiciary Committee's version. S. 1244 would postpone the 
scheduled increase in royalty fees paid by satellite carriers 
until December 31, 1998--one year sooner than the Judiciary 
Committee's version of H.R. 2921. Consequently, the revenue 
loss and reduced spending associated with postponement of the 
royalty fee increase are greater under the Judiciary 
Committee's version of H.R. 2921 than they would be under the 
House Commerce Committee's version of H.R. 2921 or under S. 
1422.
    Estimate prepared by: Federal Costs: Mark Hadley, Revenues: 
Hester Grippando, Impact on State, Local, and Tribal 
Governments: Pepper Santalucia, Impact on the Private Sector: 
Jean Wooster.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to Rule XI, clause 2(l)(4) of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article I, section 8, clause 8 of the 
Constitution.

                      Section-by-Section Analysis

    Sec. 1. Short Title. The title of the bill is amended to 
read the ``Copyright Compulsory License Improvement Act.''
    Sec. 2. Limitations on Exclusive Rights; Secondary 
Transmissions by Satellite Carriers Within Local Markets. This 
section creates a new compulsory license for satellite carriers 
retransmitting local television broadcast stations to address 
the problems associated with satellite subscribers losing, or 
being denied, access to satellite-delivered television 
broadcast stations. Due to the limitations of the Sec. 119 
satellite compulsory license, satellite providers may not 
afford a subscriber network television signals if the 
subscriber can receive an over-the-air signal of Grade B 
intensity using a conventional rooftop antenna, or the 
subscriber receives cable television service. By creating a 
permanent, royalty-free compulsory license for local 
retransmissions, the bill encourages satellite carriers to 
offer their subscribers the local network affiliates in the 
same way that cable offers its subscribers local stations. In 
exchange for the license, satellite carriers offering local 
signals must carry all full-power television broadcast stations 
in those markets.
    The bill creates a new Sec. 122 of the Copyright Act 
expressly devoted to local-to-local retransmissions. Satellite 
carriers may retransmit the signal of a local television 
station, either network or independent, to subscribers who 
reside within that station's local market without incurring a 
royalty fee obligation. The satellite carrier must not in any 
way alter the signal of the local station, and must provide the 
networks once a month with lists and locations of subscribers 
receiving local retransmissions. The purpose of this 
requirement is to ensure that satellite carriers do not attempt 
to use the Sec. 122 license to provide network stations to 
subscribers who do not reside within the local markets of those 
stations.
    Any violations of the terms of the Sec. 122 license are 
subject to a copyright infringement action and the full 
remedies of the copyright law. If a satellite carrier willfully 
and repeatedly violates the terms of the Sec. 122 license, the 
carrier is permanently enjoined from offering any television 
station broadcasts under the license.
    The new Sec. 122 license is a permanent license; however, a 
satellite carrier using it must retransmit all local stations 
within a given market to obtain the license. For example, if a 
satellite carrier provides its subscribers in the Washington, 
D.C., television market with the local network stations, the 
satellite carrier must also carry the signals of all full power 
television stations in Washington, D.C., market. The bill also 
amends Sec. Sec. 501 and 512 of the Copyright Act to clarify 
that Sec. 122 is contingent upon full must-carry obligations, 
and confers standing upon broadcasters to sue for violations of 
the requirements of Sec. 122.
    In order to avail themselves of the Sec. 122 license, 
satellite carriers must carry all full power television 
broadcast stations in the markets they choose to offer local 
signals. The must-carry requirements, which are conditions 
attached to this license, are modeled after the must-carry 
obligations of title 47 of the U.S. Code currently imposed on 
the cable television industry.
    Although a satellite carrier using the Sec. 122 license 
must carry all the local stations, the carrier is not required 
to carry a local television broadcast station whose programming 
substantially duplicates the programming of another station in 
the market. For example, a satellite carrier would not have to 
carry two NBC stations located in the same market.
    A satellite carrier must ``place'' all television broadcast 
stations on contiguous channels and make them available in a 
nondiscriminatory manner on any navigational device, on-screen 
program guide, or menu. No satellite carrier may request or 
accept compensation from a television broadcast station in 
exchange for carriage, and the television broadcast station 
bears the cost of delivering a good quality signal to the 
satellite carrier's local ``receive'' facility.
    The Register of Copyrights is charged with determining when 
individual satellite carriershave failed to satisfy their must-
carry obligations. The Register is given 120 days from the filing of a 
complaint by a television broadcast station to determine whether 
carriage is required, and has the power to order such carriage. The 
Register is also directed to adopt regulations implementing all 
requirements imposed by the must-carry provisions of Sec. 122. In 
addition, a local broadcast station improperly denied carriage of its 
signal is given standing to sue for full remedies and damages under the 
Copyright Act.
    In addition to must-carry rights, Sec. 122 also grants 
local broadcasters retransmission rights. No satellite carrier 
may carry the signal of a local television broadcast station 
without the station's permission, unless the station invokes 
its must-carry rights or is subject to one of the exemptions to 
retransmission consent. The exemptions include noncommercial 
broadcast stations, superstations that have been carried on a 
nationwide basis since 1991, and network stations delivered to 
unserved households under Sec. 119 of the Copyright Act.
    Sec. 3. Extension of Effect of Amendments to Sec. 119 of 
Title 17, United States Code. The Sec. 119 compulsory license 
of the Copyright Act, created by the SHVA for the 
retransmission of distant television stations by satellite 
carriers, is extended for a period of five years. This should 
allow the satellite industry sufficient time to implement 
technology designed to offer satellite subscribers their local 
television stations under the permanent Sec. 122 license.
    Sec. 4. Unserved Households. The current definition of an 
unserved household in the Sec. 119 compulsory license is 
amended by eliminating the 90-day waiting period from 
termination of cable service to eligibility of satellite-
delivered network service. The prohibition of the current law 
is anticompetitive because it discourages subscribers from 
terminating their cable service in favor of satellite since 
they must wait 90 days before they can receive network stations 
from their satellite carrier.
    Sec. 5. Public Broadcasting Service Satellite Feed. The 
Sec. 119 compulsory license is further amended by extending the 
license to cover the national programming service offered by 
PBS. Because the PBS national satellite feed is not a 
television broadcast station, satellite carriers do not have a 
compulsory license to retransmit it. Section Five treats the 
PBS national feed as if it were a superstation retransmission 
under current law.
    Sec. 6. Temporary Stay on Satellite Royalty Fee Increase. 
The bill postpones the effective date of the royalty fee 
increase adopted last year by the Librarian of Congress for the 
Sec. 119 compulsory license. Satellite carriers may pay for the 
retransmission of superstations and network stations at the 
prior rates established by the Copyright Royalty Tribunal until 
December 31, 1999.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 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.
101. Definitions.
     * * * * * * *
122. Limitations on exclusive rights; secondary transmissions by 
          satellite carriers within local markets.

           *       *       *       *       *       *       *


Sec. 119. Limitations on exclusive rights: Secondary transmissions of 
                    superstations and network stations for private home 
                    viewing

  (a) Secondary Transmissions by Satellite Carriers.--
          [(1) Superstations.--] (1) Superstations and pbs 
        satellite feed.--Subject to the provisions of 
        paragraphs (3), (4), and (6) of this subsection and 
        section 114(d), secondary transmissions of a primary 
        transmission made by a superstation or by the Public 
        Broadcasting Service satellite feed and embodying a 
        performance or display of a work shall be subject to 
        statutory licensing under this section if the secondary 
        transmission is made by a satellite carrier to the 
        public for private home viewing, is permissible under 
        the rules, regulations, or authorizations of the 
        Federal Communications Commission, and the carrier 
        makes a direct or indirect charge for each 
        retransmission service to each household receiving the 
        secondary transmission or to a distributor that has 
        contracted with the carrier for direct or indirect 
        delivery of the secondary transmission to the public 
        for private home viewing.
          (2) Network stations.--
                  (A) In general.--Subject to the provisions of 
                subparagraphs (B) and (C) of this paragraph and 
                paragraphs (3), (4), (5), and (6) of this 
                subsection and section 114(d), secondary 
                transmissions of programming contained in a 
                primary transmission made by a network station 
                and embodying a performance or display of a 
                work shall be subject to statutory licensing 
                under this section if the secondary 
                transmission is made by a satellite carrier to 
                the public for private home viewing, is 
                permissible under the rules, regulations, or 
                authorizations of the Federal Communications 
                Commission, and the carrier makes a direct or 
                indirect charge for such retransmission service 
                to each subscriber receiving the secondary 
                transmission.

           *       *       *       *       *       *       *

  (d) Definitions.--As used in this section--
          (1) * * *

           *       *       *       *       *       *       *

          [(10) Unserved household.--The term ``unserved 
        household'', with respect to a particular television 
        network, means 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.]
          (10) Unserved household.--The term ``unserved 
        household'', with respect to a particular television 
        network, means a household that 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.

           *       *       *       *       *       *       *

          (12) Public broadcasting service satellite feed.--The 
        term ``Public Broadcasting Service satellite feed'' 
        means the national satellite feed distributed by the 
        Public Broadcasting Service, consisting of educational 
        and informational programming intended for private home 
        viewing, to which the Public Broadcasting Service holds 
        national terrestrial broadcast rights.

           *       *       *       *       *       *       *


Sec. 122. Limitations on exclusive rights; secondary transmissions by 
                    satellite carriers within local markets.

  (a) Secondary Transmissions of Television Broadcast Stations 
by Satellite Carriers.--A secondary transmission into the local 
market of a television broadcast station of a primary 
transmission made by that station and embodying the performance 
or display of a work shall be subject to statutory licensing 
under this section if--
           (1) the secondary transmission is made by a 
        satellite carrier to the public;
           (2) the secondary transmission is permissible under 
        the rules, regulations, or authorizations of the 
        Federal Communications Commission; and
           (3) the satellite carrier makes a direct or indirect 
        charge for the secondary transmission to--
                   (A) each subscriber receiving the secondary 
                transmission; or
                   (B) a distributor that has contracted with 
                the satellite carrier for direct or indirect 
                delivery of the secondary transmission to the 
                public.
   (b) Reporting Requirements.--
          (1) Initial lists.--A satellite carrier that makes 
        secondary transmissions of a primary transmission made 
        by a network station pursuant to subsection (a) shall, 
        within 90 days after commencing such secondary 
        transmissions, submit to the network that owns or is 
        affiliated with the network station a list identifying 
        (by name and street address, including county and zip 
        code) all subscribers to which the satellite carrier 
        currently makes secondary transmissions of that primary 
        transmission.
          (2) Subsequent lists.--After the list is submitted 
        under paragraph (1), the satellite carrier shall, on 
        the 15th of each month, submit to the network a list 
        identifying (by name and street address, including 
        county and zip code) any subscribers who have been 
        added or dropped as subscribers since the last 
        submission under this subsection.
          (3) Use of subscriber information.--Subscriber 
        information submitted by a satellite carrier under this 
        subsection may be used only for the purposes of 
        monitoring compliance by the satellite carrier with 
        this section.
          (4) Requirements of networks.--The submission 
        requirements of this subsection shall apply to a 
        satellite carrier only if the network to whom the 
        submissions are to be made places on file with the 
        Register of Copyrights a document identifying the name 
        and address of the person to whom such submissions are 
        to be made. The Register shall maintain for public 
        inspection a file of all such documents.
   (c) No Royalty Fee Required.--A satellite carrier whose 
secondary transmissions are subject to statutory licensing 
under subsection (a) shall have no obligation to pay royalties 
under this title for such secondary transmissions.
   (d) Noncompliance With Reporting Requirements.--
Notwithstanding subsection (a), the willful or repeated 
secondary transmission to the public by a satellite carrier 
into the local market of a television broadcast station of a 
primary transmission made by that station and embodying a 
performance or display of a work is actionable as an act of 
infringement under section 501, and is fully subject to the 
remedies provided under sections 502 through 506 and 509, if 
the satellite carrier has not complied with the reporting 
requirements of subsection (b).
   (e) Willful Alterations.--Notwithstanding subsection (a), 
the secondary transmission to the public by a satellite carrier 
into the local market of a television broadcast station of a 
primary transmission made by that television broadcast station 
and embodying a performance or display of a work is actionable 
as an act of infringement under section 501, and is fully 
subject to the remedies provided by sections 502 through 506 
and sections 509 and 510, if the content of the particular 
program in which the performance or display is embodied, or any 
commercial advertising or station announcement transmitted by 
the primary transmitter during, or immediately before or after, 
the transmission of such program, is in any way willfully 
altered by the satellite carrier through changes, deletions, or 
additions, or is combined with programming from any other 
broadcast signal.
   (f) Violation of Territorial Restrictions on Statutory 
License for Television Broadcast Stations.--
           (1) Individual violations.--The willful or repeated 
        secondary transmission to the public by a satellite 
        carrier of a primary transmission made by a television 
        broadcast station and embodying a performance or 
        display of a work to a subscriber who does not reside 
        in that station's local market, and is not subject to 
        statutory licensing under section 119, is actionable as 
        an act on infringement under section 501 and is fully 
        subject to the remedies provided by sections 502 
        through 506 and 509, except that--
                  (A) no damages shall be awarded for such act 
                of infringement if the satellite carrier took 
                corrective action by promptly withdrawing 
                service from the ineligible subscriber; and
                  (B) any statutory damages shall not exceed $5 
                for such subscriber for each month during which 
                the violation occurred.
           (2) Pattern of violations.--If a satellite carrier 
        engages in a willful or repeated pattern or practice of 
        secondarily transmitting to the public a primary 
        transmission made by a television broadcast station and 
        embodying a performance or display of a work to 
        subscribers who do not reside in that station's local 
        market, and are not subject to statutory licensing 
        under section 119, then in addition to the remedies set 
        forth in paragraph (1)--
                  (A) if the pattern or practice has been 
                carried out on a substantially nationwide 
                basis, the court shall order a permanent 
                injunction barring the secondary transmission 
                by the satellite carrier of the primary 
                transmissions of any television broadcast 
                station, and the court may order statutory 
                damages not exceeding $250,000 for each 6-month 
                period during which the pattern or practice was 
                carried out; and
                  (B) if the pattern or practice has been 
                carried out on a local or regional basis with 
                respect to more than one television broadcast 
                station, the court shall order a permanent 
                injunction barring the secondary transmission 
                in that locality or region by the satellite 
                carrier of the primary transmissions of any 
                television broadcast station, and the court may 
                order statutory damages not exceeding $250,000 
                for each 6-month period during which the 
                pattern or practice was carried out.
  (g) Burden of Proof.--In any action brought under subsection 
(d), (e) or (f), the satellite carrier shall have the burden of 
proving that its secondary transmission of a primary 
transmission by a television broadcast station is made only to 
subscribers located within that station's local market.
  (h) Geographic Limitation on Secondary Transmissions.--The 
statutory license created by this section shall apply only to 
secondary transmissions to locations in the United States.
  (i) Exclusivity With Respect To Secondary Transmissions of 
Broadcast Stations by Satellite to Members of the Public.--No 
provision of section 111 or any other law (other than this 
section and section 119) shall be construed to contain any 
authorization, exemption, or license through which secondary 
transmissions by satellite carriers of programming contained in 
a primary transmission made by a television broadcast station 
may be made without obtaining the consent of the copyright 
owner.
  (j) Statutory License Contingent on Compliance With Satellite 
Must-Carry Requirements.--Notwithstanding subsection (a), the 
willful or repeated secondary transmission to the public into 
the local market of a television broadcast station by a 
satellite carrier of a primary transmission made by that 
station and embodying a performance or display of a work is 
actionable as an act of infringement under section 501, and is 
fully subject to the remedies provided by sections 502 through 
506 and 509, if at the time of such transmission the satellite 
carrier is not in compliance with the requirements of 
subsection (k) to carry television stations.
  (k) Carriage Obligations.--
          (1) In general.--Each satellite carrier providing 
        secondary transmissions to subscribers located within 
        the local market of a television broadcast station of a 
        primary transmission made by that station shall carry 
        upon request all television broadcast stations located 
        within that local market, subject to subsection (l), 
        except that the carriage obligations of this subsection 
        shall apply only to satellite carriers that retransmit 
        the signals of broadcast television stations pursuant 
        to the statutory license under this section. Carriage 
        of additional broadcast stations within that local 
        market shall be at the discretion of the satellite 
        carrier, subject to subsection (l). The satellite 
        carrier shall carry the entire signal of each local 
        television station carried pursuant to this subsection.
          (2) Duplication not required.--Notwithstanding 
        paragraph (1), a satellite carrier shall not be 
        required to carry upon request the signal of any local 
        television broadcast station that substantially 
        duplicates the signal of another television broadcast 
        station within the same local market which is 
        secondarily transmitted by the satellite carrier, or to 
        carry upon request the signals of more than one local 
        television broadcast station in a single local market 
        that is affiliated with a particular broadcast network 
        (as the term ``broadcast network'' is defined by the 
        Register of Copyrights by regulation).
          (3) Carriage of all local television stations on 
        contiguous channels.--All local television broadcast 
        stations retransmitted by a satellite carrier to 
        subscribers in the stations' local markets shall be 
        made available to subscribers in their local markets on 
        contiguous channels and in a nondiscriminatory manner 
        on any navigational device, on-screen program guide, or 
        menu.
          (4) Compensation for carriage.--A satellite carrier 
        shall not accept or request monetary payment or other 
        valuable consideration in exchange either for carriage 
        of local television broadcast stations in fulfillment 
        of the requirements of this subsection or for channel 
        positioning rights provided to such stations under this 
        subsection, except that any such station may be 
        required to bear the costs associated with delivering a 
        good quality signal to the designated local receive 
        facility of the satellite carrier.
          (5) Remedies.--
                  (A) Complaints by broadcast stations.--
                Whenever a local television broadcast station 
                believes that a satellite carrier has failed to 
                meet its obligations under this subsection, 
                such station shall notify the carrier, in 
                writing, of the alleged failure and identify 
                its reasons for believing that the satellite 
                carrier is obligated to carry upon request the 
                signal of such station or has otherwise failed 
                to comply with other requirements of this 
                subsection. The satellite carrier shall, within 
                30 days of such written notification, respond 
                in writing to such notification and either 
                begin carrying the signal of such station in 
                accordance with the terms requested or state 
                its reasons for believing that it is not 
                obligated to carry such signal or is in 
                compliance with other requirements of this 
                subsection, as the case may be. A local 
                television broadcast station that is denied 
                carriage in accordance with this subsection by 
                a satellite carrier or is otherwise harmed by a 
                response by a satellite carrier that it is in 
                compliance with other requirements of this 
                subsection may obtain review of such denial or 
                response by filing a complaint with the 
                Register of Copyrights. Such complaint shall 
                allege the manner in which such satellite 
                carrier has failed to meet its obligations and 
                the basis for such allegations.
                  (B) Opportunity to respond.--The Register 
                shall afford the satellite carrier against 
                which a complaint is filed under subparagraph 
                (A) an opportunity to present data and 
                arguments to establish that there has been no 
                failure to meet its obligations under this 
                subsection.
                  (C) Remedial actions; dismissal.--Within 120 
                days after the date a complaint is filed under 
                subparagraph (A), the Register shall determine 
                whether the satellite carrier has met its 
                obligations under this chapter. If the Register 
                determines that the satellite carrier has 
                failed to meet such obligations, the Register 
                shall order the satellite carrier, in the case 
                of an obligation to carry a station, to begin 
                carriage of the station and to continue such 
                carriage for at least 12 months, or, in the 
                case of the failure to meet other obligations 
                under this subsection, shall take other 
                appropriate remedial action. If the Register 
                determines that the satellite carrier has fully 
                met the requirements of this chapter, the 
                Register shall dismiss the complaint.
          (6) Regulations by Register of Copyrights.--Within 
        180 days after the effective date of this section, the 
        Register of Copyrights shall, following a rulemaking 
        proceeding, issue regulations implementing the 
        requirements imposed by this subsection.
  (l) Retransmission Consent.--
          (1) Retransmission consent required.--No satellite 
        carrier shall retransmit the signal of a television 
        broadcast station, or any part thereof, except--
          (A) with the express authority of the station; or
          (B) pursuant to subsection (k) of this section, in 
        the case of a station electing, in accordance with this 
        subsection, to assert the right to carriage under such 
        subsection.
          (2) Exclusions.--The provisions of this subsection 
        shall not apply to--
                  (A) retransmission of the signal of a 
                noncommercial television broadcast station;
                  (B) retransmission of the signal of a 
                superstation by a satellite carrier to 
                subscribers for private home viewing if the 
                originating station was a superstation on May 
                1, 1991, and on December 31, 1997, such station 
                was a network station and its signal was 
                retransmitted by a satellite carrier directly 
                to at least 500,000 subscribers for private 
                home viewing; or
                  (C) retransmission of the signal of a 
                television broadcast station that is owned or 
                operated by, or affiliated with, a broadcasting 
                network directly to a home satellite antenna, 
                if the household receiving the signal is an 
                unserved household.
          (3) Promulgation of regulations.--Within 45 days 
        after the effective date of the Copyright Compulsory 
        License Improvement Act of 1998, the Register of 
        Copyrights shall commence a rulemaking proceeding to 
        promulgate regulations governing the exercise by 
        television broadcast stations of the right to grant 
        retransmission consent under this subsection, and such 
        other regulations as are necessary to administer the 
        limitation contained in paragraph (2). Such regulations 
        shall establish election time periods that correspond 
        with those regulations adopted under subparagraph (B) 
        of section 325(b)(3) of the Communications Act of 1934. 
        The rulemaking shall be completed within 180 days after 
        the effective date of the Copyright Compulsory License 
        Improvement Act of 1998.
  (m) Definitions.-- In this section:
          (1) Designated market area.--The term ``designated 
        market area'' means a designated market area, as 
        determined by the Nielsen Media Research and published 
        in the DMA Market and Demographic Report.
          (2) Distributor.--The term ``distributor'' means an 
        entity which contracts to distribute secondary 
        transmissions from a satellite carrier and, either as a 
        single channel or in a package with other programming, 
        provides the secondary transmission either directly to 
        individual subscribers or indirectly through other 
        program distribution entities.
          (3) Local market.--(A) In the case of both commercial 
        and noncommercial television broadcast stations, the 
        term ``local market'' means the designated market area 
        in which a station is located.
          (B) In the case of a commercial television broadcast 
        station, all commercial television broadcast stations 
        licensed to a community within the same designated 
        market area are within the same local market.
          (C) Following a written request, the Register of 
        Copyrights may, with respect to a particular local 
        market, include additional commercial television 
        broadcast stations to better effectuate the purposes of 
        this section. In considering such a request, the 
        Register shall primarily consider evidence of historic 
        viewing patterns within the local market concerned. The 
        Register may determine that particular commercial 
        television broadcast stations serve more than one local 
        market
          (D) In the case of a noncommercial educational 
        television broadcast station, the local market includes 
        any station that is licensed to a community within the 
        same designated market area as the noncommercial 
        educational television broadcast station.
          (4) Local receive facility.--The term ``local receive 
        facility'' means the reception point in the local 
        market of a television broadcast station or in a market 
        contiguous to the local market of a television 
        broadcast station at which a satellite carrier 
        initially receives the signal of the station for 
        purposes of transmission of such signals to the 
        facility which uplinks the signals to the carrier's 
        satellites for secondary transmission to the satellite 
        carrier's subscribers. The designation of a local 
        receive facility by a satellite carrier shall not be 
        used to undermine or evade the carriage requirements 
        imposed by this chapter.
          (5) Subscriber.--The term ``subscriber'' means an 
        entity that receives a secondary transmission service 
        by means of a secondary transmission from a satellite 
        and pays a fee for the service, directly or indirectly, 
        to the satellite carrier or to a distributor.
          (6) Television broadcast station.--The term 
        ``television broadcast station'' means an over-the-air 
        commercial or noncommercial television broadcast 
        station licensed by the Federal Communications 
        Commission under subpart E of part 73 of title 47, Code 
        of Federal Regulations, as such regulations are in 
        effect on August 4, 1998, and as they may be amended 
        thereafter.
          (7) Satellite carrier, etc.--The terms ``private home 
        viewing'', ``satellite carrier'', ``secondary 
        transmission'', ``superstation'', and ``unserved 
        household'' have the meanings given such terms in 
        section 119(d).

           *       *       *       *       *       *       *


             CHAPTER 5--COPYRIGHT INFRINGEMENT AND REMEDIES

Sec.
501. Infringement of copyright.
     * * * * * * *
512. Remedies for failure by satellite carriers to carry all local 
          broadcast stations.

Sec. 501. Infringement of copyright

  (a) * * *

           *       *       *       *       *       *       *

  (f) With respect to any satellite carrier making a secondary 
transmission of a primary transmission made by a television 
broadcast station to subscribers located within the local 
market of such station that fails to carry all television 
broadcast stations located within that market as required by 
section 122, any station that has not given retransmission 
consent and is improperly denied carriage shall have standing 
to bring a copyright infringement action with respect to the 
unauthorized performance or display of works embodied in the 
secondary transmission.
  (g) With respect to any secondary transmission that is made 
by a satellite carrier of a primary transmission embodying the 
performance or display of a work and that is actionable as an 
act of infringement under section 122, a television broadcast 
station holding a copyright or other license to transmit or 
perform the same version of that work shall, for purposes of 
subsection (b) of this section, be treated as a legal or 
beneficial owner of that work if such secondary transmission 
occurs within the local market of that station. For purposes of 
this subsection and subsection (f), the definitions contained 
in section 122 of this title apply.

           *       *       *       *       *       *       *


Sec. 512. Remedies for failure by satellite carriers to carry all local 
                    broadcast stations

  (a) In any action filed pursuant to section 122(j), the 
following remedies shall be available:
          (1) If the action is brought by a party identified in 
        subsection (b) of section 501, the remedies provided by 
        sections 502 through 505, and the remedy provided by 
        subsection (b) of this section.
          (2) If an action is brought by a television broadcast 
        station identified in subsection (f) of section 501, 
        the remedies provided by sections 502 and 505, together 
        with any actual damages suffered by such station as a 
        result of the infringement, and the remedy provided by 
        subsection (b) of this section.
  (b) In any action filed pursuant to section 122(j) of this 
title in which carriage of a television broadcast station has 
been improperly denied, the court shall decree that the 
satellite carrier is deprived of the statutory license under 
section 122 of this title until carriage of such station has 
been restored.

           *       *       *       *       *       *       *

                              ----------                              


           SECTION 4 OF THE SATELLITE HOME VIEWER ACT OF 1994

SEC. 4. TERMINATION.

  (a) Expiration of Amendments.--Section 119 of title 17, 
United States Code, as amended by section 2 of this Act, ceases 
to be effective on December 31, [1999] 2004.

           *       *       *       *       *       *       *

                              ----------                              


             SECTION 705 OF THE COMMUNICATIONS ACT OF 1934

SEC. 705. UNAUTHORIZED PUBLICATION OF COMMUNICATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) For purposes of this section--
          (1) * * *

           *       *       *       *       *       *       *

          (6) the term ``any person aggrieved'' shall include 
        any person with proprietary rights in the intercepted 
        communication by wire or radio, including wholesale or 
        retail distributors of satellite cable programming or 
        direct-to-home satellite services (as defined in 
        section 303(v)), and, in the case of a violation of 
        paragraph (4) of subsection (e), shall also include any 
        person engaged in the lawful manufacture, distribution, 
        or sale of equipment necessary to authorize or receive 
        satellite cable programming.