Maybe so, says the General Accountability Office in a congressionally mandated study. A market-based approach to licensing broadcast programming to cable and satellite operators might be a better way, it says. If it works in the OTT world, why not cable and satellite, it asks. One sticking point is what to do with must-carry rules, which rely on the compulsory license.
GAO: Is It Time To End Compulsory License?
A new study from the General Accountability Office says it “may be feasible” to phase out the compulsory copyright license and replace it with a market-based approach.
The study, conducted at the request of Congress, also points out that eliminating the compulsory license “could have implications” for the “must-carry” and “carry-one, carry-all rules” that require cable and satellite operators, respectively, to carry local broadcast signals on request.
“As GAO has previously reported, the must-carry requirement could become impractical if Congress phased out the statutory license that applies to cable operators, as these operators could find themselves in the paradoxical position of being required to transmit the copyrighted content on a local broadcast television station’s signal for which they may not have the legal right to air.”
The study was based primarily on interviews with 42 “stakeholders” — trade associations, cable and satellite operators, broadcasters, content producers and rights holders, music licensing organizations.
Of those, 15 supported a phase-out of the license, 14 opposed it and 13 had no opinion. The study identifies the stakeholders, but not how they voted.
The study says that broadcasters have successfully used a market-based approach to license programming for OTT services like CBS All Access and Sony PlayStation Vue.
“The method by which these online rights are licensed varies by broadcast network and by online video distributor; however, the content they must license — without the benefit of the statutory licenses — is similar to the content covered by the statutory licenses,” the study says.
“Therefore, it seems feasible that just as broadcast content is licensed for online viewing using market-based negotiations, it can also be licensed for viewing through cable and satellite operators using market-based negotiation and without the statutory licenses.”
The study says that the eliminating the license “would not necessarily” impact retransmission consent. “However, without the statutory licenses, cable and satellite operators would be required to obtain the rights to retransmit the content embedded on a broadcast station’s signal….”
And eliminating the license “would not, on its face, require a change to the syndicated exclusivity or network non-duplication rules,” it says.