WASHINGTON — The approximately $172 million in royalty fees the cable industry pays annually into a copyright trust fund could rise dramatically under a proposal sent to Congress by the U.S. Copyright Office.
Any increase in the fees would benefit broadcasters and syndicators, who are compensated for cable’s use of their copyrighted material via the royalties collected by the Copyright Office.
In a report to submitted to Congress late last week, the Copyright Office recommended putting cablers and satellite carriers on an equal footing when it comes to the royalty fees. Currently, satellite carriers are charged a “market rate” for their use of broadcast signals, while cablers hand over a percentage of their receipts. That percentage is 3.75% of gross receipts, but it varies depending on the size of an individual cable system.
In contrast, satellite carriers pay up to 17.5¢ per subscriber for each retransmission of broadcast signals. The per subscriber pricing works out to be a much higher royalty rate.
“The cable industry has paid considerably less,” Copyright Office senior attorney William Robert told Bloomberg News. Although broadcasters did not ask for a change in the rate formula, the Copyright Office has urged Congress to change the rates so that cable’s fees “reflect fair market value.”
National Cable Television Assn. officials were unavailable for comment Tuesday.
In other recommendations, the Copyright Office urged Congress to amend current law to allow DBS companies to retransmit TV stations in their local markets. The DBS issue was hot this spring when News Corp. Rupert Murdoch announced his plan to offer a slate of programming that included local TV stations. Murdoch abandoned the plan after his partnership with Echostar collapsed.
Also, the Copyright Office rejected a proposal by a satellite carrier to use a picture quality test to determine if a subscriber is qualified to receive a TV station signal from a distant market via satellite.
Under the proposal, a DBS subscriber could legally sign on to a package of programming that included a TV station signal from a distant market if their reception of local TV stations was poor. But the copyright office said the use of picture quality as a deciding factor was “too subjective.”