Deep in the bowels of a 250-page Copyright "Office report
on a weird, esoteric law, Ars Technica uncovered a tasty little nugget about how Verizon and AT&T might be eligible for some sweet local TV licensing deals for their respective FiOs and U-Verse digital television services. Webcasters, meanwhile, should not be eligible for the same treatment, according to the Copyright Office.
The June 2008 report on the "Satellite Home Viewer Extension and Reauthorization Act" (SHVERA), tears apart an outdated licensing system that was meant to prevent broadcasters from gouging cable and satellite providers on licensing deals for TV content.
The statutory rates were established when broadcasters held all the cards and cable TV was in its infancy. Now the Copyright Office points out that the power has shifted, and that satellite TV and cable operators have enjoyed "below marketplace" licensing rates, and it's time to give it a rest.
Fair enough. But in the same breath, the Copyright Office suggests that AT&T and Verizon could qualify as cable operators and could therefore be eligible for the licenses -- or eligible as long as those licenses are still offered.
Say what?
"AT&T and Verizon do not neatly fit within the confines of the current statutory licenses. Nevertheless . . . both AT&T and Verizon’s operations can be viewed as cable systems and consequently, they may use the Section 111 license to retransmit broadcast signals, provided that they adhere to all of the FCC’s broadcast signal carriage rules," said the Copyright Office in the report.
"It all depends on how you define a cable system," says Steve Gordon, a New York City-based entertainment lawyer, who hadn't had a chance to dissect the report yet.
Already, the National Cable and Telecommunications Association is voicing its objections. The trade group says it's still in the process of reviewing the report, but says current rates "which were negotiated upwards twice in the last ten years -- [are] appropriate," said NCTA spokesman Brian Dietz.
It's curious to us, though, that we haven't heard much from the so-called webcasters. Video sites such as Hulu and Veoh negotiate their deals directly with content providers (such as CBS or NBC) and probably wouldn't qualify for the retransmission licenses. Still, what about the IPTV service providers?
"These licenses never pertained to webcasters," says Gordon.
