Measure could cost rights holders $100 mil in lost royalty payments
WASHINGTON — A measure approved by a House subcommittee last week could cost copyright holders — including broadcasters, studios and syndicators — a total of $100 million in lost royalty payments.
The House Intellectual Property subcommittee voted to join the Senate in a one-year delay in the implementation of new copyright royalties ordered by the U.S. Copyright Office last October. The Copyright Office increased the royalty fee for re-transmission of broadcast channels from 6¢ per subscriber per month to 27¢ — a decision worth $100 million to copyright holders, according to subcommittee chairman Howard Coble (R N.C.).
The subcommittee vote placates the satcasting industry, which complained that the fee hike made it much more difficult to compete with cable, which currently pays 3¢ per subscriber per month for same copyright license. The fees are paid into a royalty pool which benefits affected copyright holders.
The delay in royalty payments was offered as an amendment to a bill that would allow satcasters to sell a programming package that includes local TV stations. But in a disappointment for satcasters, the legislation requires them to carry all of the local stations in a market — not just the most popular signals. In addition, the bill would require satcasters to get the permission of the local station before it began retransmitting the signal.
Rep. Howard Berman (D Calif.) was one of the few congressmen on the subcommittee to oppose the one-year delay in imposing the royalty fee. Berman argued that the fee reflects marketplace realities and that it is unfair to penalize copyright holders by delaying the imposition of the royalty.
But Rep. Barney Frank (D Mass.) countered that the interests of consumers would be best served by delaying the imposition of the fee. “I think suppliers are being quite richly compensated in a situation where consumers don’t have a lot of choice,” said Frank, who added, “We are talking about people in control of entertainment programs — it is not a group which is in any way in danger of being inadequately compensated.”
If the measure passes both the House and the Senate and is signed into law by President Clinton, satcaster EchoStar will have to revisit its business plan. Currently, EchoStar is offering a service in selected markets that offers the four major networks. EchoStar did not, however, secure the permission of the stations to retransmit the signals.
Rep. Rick Boucher, (D-Va.) wanted to introduce an amendment that would help EchoStar by allowing it to sell a package of selected local stations to any house which received a poor signal from its local station. The subcommittee refused to consider Boucher’s proposal, but it could be brought up by the full Judiciary Committee when it debates the measure as early as next week.