TV Deregulation Would Add Freedom, Confusion to the Industry
The introduction of TV industry deregulatory legislation (HR-3675, S-2008) and plans for Congressional hearings on the subject (CD Dec 22 p1) point to a desire for a marketplace closer to the Internet, said an industry executive. But such a marketplace may add confusion for the industries rather than lessen it, said others.
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The bill, if passed, would create confusion for the pay-TV and broadcast industries by doing away with the compulsory cable licenses without setting up a new framework for clearing rights, industry sources said. In the past, distributors have told the Copyright Office to keep the license. Pay-TV distributors who issued statements supporting the bill seemed to parse their language carefully, supporting the idea that it’s time to look at the video marketplace but not explicitly endorsing every aspect of the bill, an industry source said. And a recent GAO report said eliminating the licenses would create some uncertainty about what other pay-TV rules would need to be changed (CD Nov 25 p10). The bill would also remove statutory copyright provisions of Section 119 and 122 and change Section 111 of the Copyright Act. An industry executive said it wasn’t exactly clear what the effect the legislation would be on future satellite TV reauthorization. The current reauthorization expires in 2014.
Despite broadcast industry skepticism over the bill’s strength, not everyone is so pessimistic. “I think this bill is going places,” said Andrew Reinsdorf, DirecTV senior vice president-government affairs. The legislation and coming hearings “imagines a world where the pay TV marketplace looks like the marketplace of the Internet, where interesting and innovative things are occurring,” he said. The discussions are a move toward “consumer driven choices and innovation,” he said. Dish Network didn’t comment.
It’s not clear whether or to what extent distributors would benefit if the bill were adopted as written, a broadcast lawyer said. “If they were to want a signal of a local TV station, they're going to need a copyright license and they're going to have to negotiate with that station, who can then charge them a price,” the lawyer said. “It doesn’t get them to the point they would like: To have the compulsory license so they can take the signal, but [eliminate retransmission consent] so they don’t have to negotiate to get it.” Also, the bill would preserve must-carry status for non-commercial stations.
There are aspects of the bill that might appeal to various industry constituencies -- broadcasters would like to see ownership restrictions repealed, content owners have been pushing for eliminating the compulsory license, and distributors want changes to the retrans rules -- but passing such broad legislation is difficult, particularly when multiple committee jurisdictions are involved, as would be the case with this bill. “Something this broad is very hard to do because you get someone who says ‘Well, I like everything but that.’ And if you take ’that’ out” other would-be supporters could fail to support the bill, the lawyer said.