Page:Copyright Law Revision (Senate Report No. 94-473).djvu/155



General Considerations

This legislation establishes statutory cable television, mechanical and jukebox royalty rates. Section 118 grants public broadcasting a compulsory license for the use of certain categories of copyrighted works upon the payment of reasonable royalty fees. The legislation also provides that the royalty fees paid by cable television systems, jukebox owners and public broadcasting shall be deposited with the Register of Copyrights for distribution to the respective claimants.

The Committee believes that sound public policy requires that the royalty rates specified in the statute and those established for public broadcasting shall be subject to periodic review. It is neither feasible nor desirable that these rates should be adjusted exclusively by the normal legislative process. Therefore, Chapter 8 establishes in the Library of Congress a Copyright Royalty Tribunal for the purpose of making determinations concerning the adjustment of the statutory royalty rates, to establish and make adjustment of the public broadcasting royalty rates, and to make determinations in certain circumstances concerning the distribution of royalty fees deposited with the Register of Copyrights. For purposes of administration the Copyright Royalty Tribunal shall be regarded as part of the Copyright Office, but the Copyright Royalty Tribunal and its personnel shall be totally independent of the Copyright Office in the performance of its duties under this legislation.

With respect to the adjustment of the statutory royalty rates and the rates for public broadcasting, the purpose of the Tribunal is “to assure that such rates are reasonable.” The committee in fixing the royalty rates has had to weigh various considerations, such as the circumstance that certain users will be paying copyright royalties for the first time. While these considerations influenced the committee’s determination on rates it in no way restricts the independence of the Tribunal to recommend adjustment of these rates to assure that the rates are “reasonable” according to whatever criteria the Tribunal deems appropriate. The committee does not intend that the rates in this legislation shall be regarded as precedents in future proceedings of the Tribunal.

Section 801(b) also authorizes the Copyright Royalty Tribunal to change the “basis” of the cable television royalty schedule if the Tribunal determines that the “basis” established in Section 111 does not provide a reasonable royalty for the basic service of providing secondary transmissions of the primary broadcast transmitter. Section 111 provides that the royalty fee paid by cable television systems shall be computed on the basis of gross receipts from cable system subscribers for the basic service of providing secondary transmissions of primary broadcast transmitters. During the Subcommittee hearings concern was expressed by the representatives of copyright owners that at some time in the future cable systems might sharply reduce the basic cable subscription fee as an inducement for an individual to become a pay-cable subscriber. A significant shift of revenue sources could deny copyright owners the reasonable compensation for secondary transmissions contemplated by this legislation. While Section 111 requires cable systems to report their total income, the Committee does not intend that cable