Section 111 of the Copyright Act is alive and well

In this week's videoblog, I did a piece about FilmOn.com, a U.K. company that's streaming broadcast signals from television stations in Los Angeles, as well as a variety of cable networks, across the Internet. Like ivi, FilmOn.com is depending on Section 111 of the U.S. Copyright Act, which requires television broadcasters to grant statutory (mandatory) licenses to retransmit their signals to cable systems, in return for payments made to the Copyright Office and distributed to broadcasters.

Some people (including myself) have argued that Section 111 was superseded by the 1996 Telecommunications Act, which gives broadcasters control over whether or not their signals can be retransmitted by cable systems and similar services. The Act also allows broadcasters to specify the price for retransmission rights, which is paid directly to broadcasters, not to the Copyright Office.

Last week, however, the Copyright Office issued two notices in the Federal Register: Distribution of the 2008 Cable Royalty Funds and Distribution of the 2008 Satellite Royalty Funds.  Note that the Copyright Office is still collecting royalties, and so far as they're concerned, Section 111 is still in full effect. Here's a direct quote from the Federal Register posting:

"Each year cable systems must submit royalty payments to the Register of Copyrights as required by the statutory license set forth in section 111 of the Copyright Act for the retransmission to cable subscribers of over-the-air television and radio broadcast signals. See 17 U.S.C. 111(d).  These royalties are then distributed to copyright owners whose works were included in a qualifying transmission and who timely filed  a claim for royalties. Allocation of the royalties collected occurs in one of two ways.  In the first instance, these funds will  be distributed through a negotiated settlement among the parties. 17 U.S.C. 111(d)(4)(A). If the claimants do not reach an agreement with respect to the royalties, the Copyright Royalty Judges (‘‘Judges’’) must conduct a proceeding to determine the distribution of any royalties that  remain in controversy. 17 U.S.C. 111(d)(4)(B)."

"The 'Phase I Parties' are the Program Suppliers, Joint Sports Claimants, Public Television Claimants, Commercial Television Claimants (represented by National Association of Broadcasters), Music Claimants (represented by American Society of Composers, Authors and Publishers, Broadcast Music, Inc., and  SESAC, Inc.), Canadian Claimants, National Public Radio, and the Devotional Claimants. In Phase I of a cable royalty distribution proceeding, royalties are allocated among certain categories of broadcast programming that have been retransmitted by cable systems. The categories have traditionally been movies and syndicated television series, sports programming, commercial and noncommercial broadcaster-owned programming, religious programming, music, public radio programming, and Canadian programming."

Now, that pretty much covers every kind of programming and every kind of broadcaster. If broadcasters are relying on the Telecommunications Act, why are they still collecting royalties from the Copyright Office? It could be that there are broadcasters who don't bother to negotiate for retransmission compensation who still want to claim the statutory royalties from the Copyright Office. Nevertheless, it adds an interesting dimension to the ivi and FilmOn.com story