Page:Copyright Law Revision (Senate Report No. 94-473).djvu/79

 CATV system to carry all television broadcast signals within a given geographical area, including pay-television (STV), yet subsection (b) provides that the secondary transmission of pay-television is an act of infringement and fully subject to civil and criminal penalties. The representatives of the film producers maintain that the FCC rules do not require the carriage of “scrambled” pay-television broadcast signals by cable television systems, and in fact currently prohibit the alteration or “unscrambling” of these signals. The committee has amended subsection (b) to provide that the prohibition of this subsection does not apply if the carriage of the “signals comprising the secondary transmission is required under the rules, regulations, or authorizations of the Federal Communications Commission.” The exclusive purpose of the revision of this subsection is to exempt a cable system from copyright liability if the FCC requires the system to carry a pay television signal. In such an over-the-air pay television situation, carriage of such signals would not be actionable as an act of infringement since the cable system in transmitting the pay signal is simply functioning as a common carrier.

Secondary transmission by cable systems.—Cable television systems are commercial subscription services that pick up broadcasts of programs originated by others and retransmit them to paying subscribers. Certain CATV systems also originate live programs. A large number of systems provide automated programming. A typical system consists of a central antenna which receives and amplifies television signals, and a network of cables through which the signals are transmitted to the receiving sets of individual subscribers. In addition to an initial installation charge, the subscribers pay a monthly service charge averaging about live or six dollars. The number of CATV systems in the United States has grown very rapidly since their introduction in 1950 and now total about 3,300 operating systems, serving 7,000 communities. Systems currently in operation reach about 10 million homes, about 30 million people. The average cable system is estimated to have 2,240 subscribers. It is reported that the 1974 total subscriber revenues of the cable industry were approximately $600 million.

Compulsory licensing

Section 111(c)(1) provides that, subject to certain other provisions of the legislation, the secondary transmission to the public by a cable system of a primary transmission made by a broadcast station licensed by the Federal Communications Commission, and embodying a copyrighted work is subject to compulsory licensing if (1) the signals comprising the primary transmission are exclusively aural; (2) if the signals are local signals of the primary transmitter or; (3) where the carriage of the signals is permissable under the rules, regulations or authorizations of the Federal Communications Commission.

Secondary transmissions fully liable

Section 111(c)(2) enumerates the circumstances in which a secondary transmission by a cable system is fully subject to the remedies provided in this legislation for infringement of copyright. The “willful or repeated” secondary transmission by a cable system in the specified cases is actionable as an act of infringement. The bill limits the cable system’s liability to “willful or repeated” acts of infringement