Retransmission of Digital Broadcast Signals Pursuant to the Cable Statutory License, 31399-31415 [E8-11855]

Agencies

• Library of Congress
• Copyright Office
• Copyright Office, Library of Congress

[Federal Register Volume 73, Number 106 (Monday, June 2, 2008)]
[Proposed Rules]
[Pages 31399-31415]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-11855]


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LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. 2005-5]


Retransmission of Digital Broadcast Signals Pursuant to the Cable 
Statutory License

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Copyright Office is seeking comment on proposed regulatory 
changes to accommodate the retransmission of digital television 
broadcast signals by cable operators under Section 111 of the Copyright 
Act.

DATES: Written comments are due July 17, 2008. Reply comments are due 
September 2, 2008. June 2, 2008.

ADDRESSES: If hand delivered by a private party, an original and five 
copies of a comment or reply comment should be brought to the Library 
of Congress, U.S. Copyright Office, Room LM-401, James Madison 
Building, 101 Independence Ave., SE, Washington, DC 20559, between 8:30 
a.m. and 5 p.m. The envelope should be addressed as follows: Office of 
the General Counsel, U.S. Copyright Office.
    If delivered by a commercial courier, an original and five copies 
of a comment or reply comment must be delivered to the Congressional 
Courier Acceptance Site (``CCAS'') located at 2nd and D Streets, NE, 
Washington, DC between 8:30 a.m. and 4 p.m. The envelope should be 
addressed as follows: Office of the General Counsel, U.S. Copyright 
Office, LM-403, James Madison Building, 101 Independence Avenue, SE, 
Washington, DC 20559. Please note that CCAS will not accept delivery by 
means of overnight delivery services such as Federal Express, United 
Parcel Service or DHL.
    If sent by mail (including overnight delivery using U.S. Postal 
Service Express Mail), an original and five copies of a comment or 
reply comment should be addressed to U.S. Copyright

[[Page 31400]]

Office, Copyright GC/I&R, P.O. Box 70400, Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Ben Golant, Assistant General Counsel, 
and Tanya M. Sandros, General Counsel, Copyright GC/I&R, P.O. Box 
70400, Washington, DC 20024. Telephone: (202) 707-8380. Telefax: (202) 
707-8366.

SUPPLEMENTARY INFORMATION: Section 111 of the Copyright Act (``Act''), 
title 17 of the United States Code (``Section 111''), provides cable 
operators with a statutory license to retransmit a performance or 
display of a work embodied in a primary transmission made by a 
television station licensed by the Federal Communications Commission 
(``FCC''). Cable systems that retransmit broadcast signals in 
accordance with the provisions governing the statutory license set 
forth in Section 111 are required to pay royalty fees to the Copyright 
Office. Payments made under the cable statutory license are remitted 
semi-annually to the Copyright Office which invests the royalties in 
United States Treasury securities pending distribution of these funds 
to those copyright owners who are entitled to receive a share of the 
fees.
    In 2005, the Motion Picture Association of America, Inc. 
(``MPAA''), its member companies and other producers and/or 
distributors of movies, series and specials broadcast by television 
stations (``Program Suppliers'') and the Joint Sports Claimants 
(``JSC'')\1\ (collectively, ``Copyright Owners'') filed a Petition for 
Rulemaking (``Petition'') seeking to clarify the applicability of 
existing Copyright Office regulations to the retransmission of digital 
broadcast signals under the statutory license set forth in Section 111 
of the Copyright Act.
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    \1\JSC is composed of the Office of the Commissioner of 
Baseball, the National Basketball Association, the National Football 
League, the National Collegiate Athletic Association, the National 
Hockey League and the Women's National Basketball Association.
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    The Copyright Office released a Notice of Inquiry (``NOI'') to 
address the matters raised in the Copyright Owners' Petition and to 
solicit comment on possible clarifications to the Copyright Office's 
existing rules and cable Statement of Account (``SOA'') forms. See 
Retransmission of Digital Broadcast Signals Pursuant to the Cable 
Statutory License, 71 FR 54948 (Sept. 20, 2006). In the NOI, the 
Copyright Office stated that there is nothing in the Act, its 
legislative history, or the implementing rules, which limits the cable 
statutory license to analog broadcast signals. Instead, the Office 
found that the language of Section 111 broadly states that the 
statutory license applies to any broadcast stations licensed by the FCC 
or any of the signals transmitted by such stations. As such, the 
Copyright Office held that the use of the statutory license for the 
retransmission of digital signals would not be precluded merely because 
the technological characteristics of a digital signal differ from the 
traditional analog signal format. Even so, the Copyright Office noted 
that questions remain regarding the application and operation of the 
cable statutory license structure in the digital television context. 
For that reason, the Office sought comment on the issues raised by the 
Copyright Owners' Petition and on additional issues.
    The following parties filed comments in response to the NOI: (1) 
Copyright Owners (including the Motion Picture Association of America; 
Joint Sports Claimants; Public Television Claimants; National 
Association of Broadcasters; Canadian Claimants; Music Claimants 
(ASCAP-BMI-SESAC); and Devotional Claimants); (2) National Cable 
Television Association (``NCTA''); (3) National Public Radio (``NPR''); 
and (4) Capitol Broadcasting Company (``CBC''). The following parties 
filed reply comments: (1) Copyright Owners; (2) NCTA; (3) NPR; (4) 
American Cable Association (``ACA''); and (5) Philip Marano-Villanova 
University School of Law.
    This Notice of Proposed Rulemaking (``NPRM'') addresses the 
arguments raised by commenters and seeks public comment on proposals 
and policy recommendations on issues related to the retransmission of 
digital television signals by cable operators under Section 111. 
Proposed rule amendments are found at the end of the NPRM.

I. Digital Broadcast Signal Retransmission Issues

A. Digital Television

    Digital television technology enables an FCC licensed television 
broadcast station to provide, over-the-air, a mix of high-definition 
digital television signals (``HDTV''), standard-definition digital 
television signals (``SDTV''), and many different types of ancillary 
programming and data services. In 1997, the FCC adopted its initial 
rules governing the transition of the broadcast television industry 
from analog to digital technology and authorized each individual 
television station licensee to broadcast in a digital format. Since 
that time, hundreds of television stations have been transmitting both 
analog and digital signals from their broadcast facilities and 
television stations may choose to broadcast in a ``digital-only'' mode 
of operations, pursuant to FCC authorization. A significant number of 
cable operators have agreed to voluntarily carry both analog and 
digital broadcast signals in local and distant television markets. 
After February 17, 2009, full power television stations will no longer 
be permitted to broadcast in an analog format and must thereafter 
transmit in a digital format.\2\
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    \2\Congress established February 17, 2009, as the date for the 
completion of the transition from analog to digital broadcast 
television. See Pub. L. No. 109-171, Section 3002(a), 120 Stat. 4 
(2006). We note that Canada is planning a digital television 
transition in 2011 and Mexico is planning for a transition in 2021. 
See, e.g., Associated Press, Digital Switch Raises Alarm Near 
Border, https://www.siliconvalley.com (Last accessed on January 14, 
2008). These developments are important because Section 111 covers 
the secondary retransmissions of distant broadcast signals from 
Mexico as well as Canada. See 17 U.S.C. 111(c)(1).
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    At present, cable operators are retransmitting the analog and 
digital signals of the same television station under the FCC's local 
broadcast signal carriage rules\3\ and under Section 111 of the 
Copyright Act. In most cases, the program content transmitted on the 
primary digital signal is the same as that found on the analog signal, 
except that the picture quality of a digital television signal is 
vastly improved. When a digital broadcast signal replicates the analog 
signal, it is called simulcasting. The signal, or digital stream as it 
is now called, could be in a high definition digital format or a lower 
quality standard definition digital format.
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    \3\See Carriage of Digital Television Broadcast Signals, 16 FCC 
Rcd 2598, 2618 (2001). We note that the FCC recently adopted new 
rules for the retransmission of local digital signals by satellite 
carriers under Section 338 of the Communications Act. Recognizing 
satellite capacity limitations, the FCC promulgated carriage 
requirements phased in over a course of four years. Satellite 
carriers must provide carriage of local stations' HD signals if any 
local station in the same market is carried in HD, pursuant to the 
following schedule: (1) In at least 15% of the markets in which they 
carry any station pursuant to the statutory copyright license in HD 
by February 17, 2010; (2) In at least 30% of the markets in which 
they carry any station pursuant to the statutory copyright license 
in HD no later than February 17, 2011; (3) In at least 60% of the 
markets in which they carry any station pursuant to the statutory 
copyright license in HD no later than February 17, 2012; and (4) In 
100% of the markets in which they carry any station pursuant to the 
statutory copyright license in HD by February 17, 2013. 
Implementation of the Satellite Home Viewer Improvement Act of 1999: 
Local Broadcast Signal Carriage Issues and Retransmission Consent 
Issues, Second Report and Order, CS Docket No. 00-96 (rel. March 27, 
2008).
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    Multicasting, on the other hand, is the process by which multiple 
streams of digital television programming are transmitted at the same 
time over a single broadcast channel by a single

[[Page 31401]]

broadcast licensee. Currently, broadcast stations offer multicast 
streams carrying news, weather, sports, religious material, as well as 
foreign language programming (especially, but not limited to, Spanish 
programming).\4\ For example, Station WRAL in Raleigh, North Carolina, 
(owned by Capitol Broadcasting Corporation or ``CBC'') transmits its 
analog signal (WRAL-TV) on channel 5 and its primary digital signal 
(WRAL-DT) on channel 5.1, which simulcasts (in both standard definition 
and high definition) the analog programming schedule. It is also 
engaged in multicasting by transmitting a 24-hour news channel (WRAL-
NC) on channel 5.2 and locally-produced programming on channels 5.3 
(WRAL-DT3) and 5.4 (WRAL-DT4). See https://www.wral.com/ These digital 
programming streams are broadcast from a single transmitter.
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    \4\See Allison Romano, Local Stations Multiply, Broadcasting & 
Cable, March 10, 2008 (noting that local television stations plan to 
launch several new multicast programming streams in the months 
ahead. Some possible streams include: LATV (bilingual Spanish-
English entertainment), Retro Television Network (classic television 
shows); .2 Network (movies from the last decade); Weather Plus 
(weather stream co-owned by NBC and its affiliates); Blue Highway TV 
(gospel and country music programming); CoLours TV (programming for 
minority and ethnic communities); Fan Vision (local sports); 
Funimation (Anime and Japanese cartoons); Mexicanal (Spanish-
language entertainment); Motor Trend TV (automotive-related 
programming); and World Championship Sports Network (sports 
programming).
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B. Royalties for the retransmission of non-network programming

    Copyright Owners' Petition. In their Petition, Copyright Owners 
acknowledge that some cable systems are separately reporting carriage 
of digital and analog broadcast signals and, in their view, doing so 
appropriately. However, they stated that it was unclear whether all 
cable systems are identifying carriage of both types of signals or are 
doing so in a consistent and uniform manner. According to Copyright 
Owners, the lack of uniformity in reporting the carriage of both analog 
and digital broadcast signals necessitates clarification of the 
Copyright Office's existing regulations.
    Copyright Owners therefore have asked the Copyright Office to 
clarify that, if a cable operator chooses to carry a television 
broadcast station's analog and digital signals, it should identify 
those signals separately in Space G on its Statement of Account form 
(e.g., as WRC-TV on channel 4 and WRC-DT on channel 48). Copyright 
Owners asserted that separate designation provides notice that a cable 
operator is carrying digital signals and may be charging subscribers 
additional fees that should be included in the gross receipts 
calculation. Moreover, in the context of distant signal carriage, 
Copyright Owners argued that separate reporting of both the digital and 
the analog signal is necessary because such carriage may trigger an 
additional royalty obligation.
    Copyright Owners have also asked the Copyright Office to clarify 
that a cable operator carrying multicast signals must identify those 
signals separately in Space G on its SOA form. They state that a cable 
operator choosing to carry all of the digital channels transmitted by 
WRAL, for example, should state in Space G of its SOA that it carried 
WRAL-DT on channel 5.1; WRAL-NC on channel 5.2; WRAL-DT3 on channel 
5.3; and WRAL-DT4 on channel 5.4. Copyright Owners asserted that 
separate reporting is necessary in the case of carriage of multiple 
digital channels, where the copyright owners of the programming on such 
separate channels may be wholly different from the copyright owners of 
the programming on the primary digital stream.
    For purposes of ascertaining the royalties owed, Copyright Owners 
suggested that where the programming is identical, the DSE values for 
carriage of a distant analog and a digital signal would be the same. 
However, Copyright Owners have urged the Copyright Office to require 
separate calculation of DSE values and royalty payments for carriage of 
multiple streams of a distant digital station. If, for example, a cable 
operator chose to retransmit two streams from a particular station that 
is engaging in multicasting, one of which contained network programming 
and the other of which did not, they believe that the operator should 
be considered as retransmitting 1.25 DSEs (1.00 DSE for the independent 
programming stream plus .25 DSE for the network programming stream).
    NOI. In the NOI, the Office asked whether a cable operator must pay 
separately for the retransmission of a digital signal and an analog 
signal where the signals carry identical programming to the subscriber. 
Alternatively, the Office asked whether the statutory license allowed 
for a single payment for the delivery of the same programming albeit in 
two different formats. The Office also asked whether the determination 
would be different if the digital signal included only a subset of the 
programming from the analog signal or if the digital signal was 
broadcast in a high definition format. It also sought comment on 
Copyright Owners' regulatory treatment of digital multicast signals 
under Section 111. 71 FR at 54950-51.
    Comments. NCTA argues that no additional liability attaches on 
account of carriage of a digital signal where the cable operator is 
already paying for carriage of its analog counterpart. In support of 
its argument, NCTA relies upon the definition of a ``primary 
transmission'' in 17 U.S.C. 111(f). It further argues that since this 
provision used the term ``signals'' as opposed to just ``signal,'' 
Congress had already contemplated the retransmission of multiple 
signals, each with different distant digital programming, at a single 
DSE value. It states that a cable operator's royalty payment should not 
be increased based on carriage of multiple signals from the same 
primary transmitter. NCTA Comments at 4-5.
    NCTA asserts that the amount a cable operator pays for distant 
signal carriage under Section 111 is based on the number and type of 
`stations' carried, not the number of signals transmitted by each 
station. NCTA notes that a DSE is defined as the ``secondary 
transmission of any nonnetwork television programming carried by a 
cable system in whole or in part beyond the local service area of the 
primary transmitter of such programming.'' It remarks that the DSE 
value depends on whether the station engaged in the primary 
transmission is considered to be an ``independent,'' ``network,''or 
``noncommercial educational'' station. NCTA comments that a ``network 
station'' is only assigned a single DSE (.25) even if a station is 
affiliated with ``one or more television networks in the United States 
providing nationwide transmissions.'' Based on the foregoing, NCTA 
concludes that nothing in the Act indicates that a single ``station,'' 
for Section 111 purposes, must transmit only one signal. Id. at 5.
    With regard to multicasting, NCTA states that in a small number of 
cases, a cable operator may be importing a digital multicast stream 
from a distant station that differs from the programming on the analog 
version of the station already carried on a distant basis. NCTA argues 
that the Act does not provide a mechanism for assigning additional DSE 
values in such a case, and the Copyright Office should refrain from 
doing so without explicit statutory authority. NCTA Comments at 6. NCTA 
believes that Section 111 does not require cable operators to pay 
additional royalties for the retransmission of additional signals being 
transmitted by a single station.
    Specifically, NCTA asserts that the carriage of a separate digital 
multicast signal would be no different, from the standpoint of royalty 
calculations, than carriage of a separate copyrighted work

[[Page 31402]]

transmitted by a station along with its main broadcast programming 
transmission. NCTA states, for example, that if a cable system were to 
retransmit closed captioning or other material, program-related or not, 
that might be in the vertical blanking interval of an analog television 
signal, no additional copyright payment would be owed. NCTA notes that 
so long as the additional material constitutes a ``primary 
transmission'' service, it would be covered by Section 111 and no 
additional DSE value would be assigned. It further notes that, for 
Section 111 purposes, the DSE value would not change, regardless of its 
status as ``program-related'' material for FCC purposes. NCTA argues 
that the same principle would apply where a cable operator retransmits 
multiple streams of digital programming transmitted by the same 
station. Id. at 6.
    NCTA also argues that a separate payment mechanism for digital 
transmissions was not intended by Congress, pointing to Section 119 of 
the Act for comparison. NCTA asserts that in 2004, Congress expressly 
amended Section 119 to require separate payments for a satellite 
carrier's secondary transmission of the primary digital transmissions 
of network stations and superstations See NCTA Comments at 6-7 citing 
17 U.S.C. 119(c)(2). Absent a similar amendment to Section 111, NCTA 
argues that no separate DSE should be calculated for ``distant digital 
signal carriage when the operator already pays for carriage of that 
primary transmitter's analog signal.'' NCTA Comments at 7.
    NCTA concludes that a cable operator should not have to pay more 
than once to import any number of signals (even if the programming 
differs) transmitted by a single broadcaster. NCTA argues that the plan 
devised by Copyright Owners ``would lead to inflated and unfair 
copyright fees.'' NCTA asserts that the Copyright Office should not 
impugn additional royalties under Section 111 when the language of the 
Act does not require it. NCTA Reply Comments at 2-4.
    Copyright Owners are principally concerned with the retransmission 
of multicast streams by cable operators under Section 111. They state 
that Section 111(f) assigns a DSE ``value of one to each independent 
station and the value of one-quarter to each network station and 
noncommercial educational station for the nonnetwork programming so 
carried pursuant to the rules, regulations, and authorizations of the 
Federal Communications Commission.'' Copyright Owners Reply Comments at 
19-20 (emphasis in original). According to Copyright Owners, the 
meaning of the term``signals'' is not the linchpin in this debate, 
rather the focus should be on the meaning of the term ``station'' as it 
is used in Section 111(f). That is, whether all multicast channels from 
a single broadcaster should be treated as one ``station'' for purposes 
of assigning a DSE value (NCTA's position), or whether each channel 
transmitting separate programming should be treated as a separate 
``station'' (Copyright Owners position). Id.
    Copyright Owners note that although Congress defined ``independent 
station,'' ``network station'' and ``noncommercial station'' in Section 
111(f), it did not define the general term ``station'' in Section 111. 
They comment that in 1976, a television station had broadcast 
programming on a single analog channel only. Id. at 21, citing Carriage 
of Digital Television Broadcast Signals, 16 FCC Rcd 2598, 2618 (2001). 
They state that it was not until the early 1990s that a ``common 
understanding'' began to develop that a digital televison station might 
engage in multicasting. Copyright Owners argue that there is no 
evidence that when Congress adopted the DSE definition in 1976, it 
contemplated that a television station would broadcast programming on 
more than a single channel, or that if a station did so, a single DSE 
value would encompass those multiple channels. They remark that this 
result is not surprising given that no station engaged in any type of 
multicasting until twenty years after Section 111 was enacted. 
Copyright Owners assert that these facts undercut NCTA's effort to 
encompass as many as six multicast streams within a single DSE value 
for purposes of calculating the Section 111 royalty payment. Id.
    Copyright Owners state that there are several reasons why the 
Copyright Office should decide that each multicast stream should be 
considered a separate ``station'' for purposes of the Section 111(f) 
definition of DSE. First, they argue that copyright owners should be 
compensated for all programming being retransmitted by Form 3 cable 
operators under Section 111, regardless of format. They state that a 
central principle underlying Section 111 was that royalties should 
increase, at least for larger systems, as the amount of distant 
programming increased.
    Next, Copyright Owners assert that a cardinal rule of statutory 
construction is that a statutory provision must be interpreted as a 
whole. In this case, they state that NCTA's proposed interpretations of 
Section 111(f) should be considered in light of Section 801(b)(2)(B), 
which arguably reflects a Congressional policy that Form 3 cable 
operators should pay a separate royalty for the carriage of non-network 
programming that they were not authorized to carry under the FCC's 1976 
rules. They state that NCTA's proposal would subvert that policy by 
allowing cable operators to retransmit substantial amounts of non-
permitted programming without paying a separate royalty, as long as 
that programming was contained on a multicast stream broadcast by a 
``permitted'' station.
    Third, Copyright Owners assert that an examination of some of the 
practical consequences of NCTA's suggested interpretation underscores 
its incompatibility with Congressional intent. They state that the DSE 
definition specifies certain circumstances where a cable operator may 
reduce or prorate a DSE value, such as when an operator retransmits a 
distant signal on a ``part-time'' basis because of the ``lack of 
activated channel capacity.'' According to Copyright Owners, in such 
cases, the cable operator is able to pay a fraction of the DSE value, 
using ``the values for independent, network, and noncommercial 
educational stations, as the case may be, to be multiplied by a 
fraction which is equal to the ratio of the broadcast hours of such 
station carried by the cable system to the total broadcast hours of the 
station.'' Id. at 24, citing 17 U.S.C. 111(f). Copyright Owners argue 
that if NCTA's interpretation were to be adopted, a cable system that 
otherwise qualified for part time carriage could cut in half the DSE 
value it had been assigning to a distant network affiliate simply by 
not carrying the affiliate's 24 hour weather multicast channel. They 
assert that a cable system could pay as little as one-sixth of its 
prior royalty for carriage of the same affiliate simply because the 
affiliate added five multicast channels that the system did not 
retransmit. Id. at 25.
    Copyright Owners state a similar problem would arise under the 
``network station'' definition that requires a ``station'' to transmit 
network programming ``for a substantial part of that station's typical 
broadcast day.'' Copyright Owners argue that if NCTA's position were 
accepted, such affiliates' classification as network stations might be 
questioned if they multicast any significant amount of nonnetwork 
programming on additional channels, so that the network programming 
would no longer occupy a substantial part of the station's typical 
broadcast day; in short, acceptance of NCTA's theory could lead to the 
conclusion that network affiliates

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choosing to multicast no longer qualified as ``network stations.'' 
Copyright Owners conclude that this would not be the result that 
Congress intended. Id. at 22-25.
    Discussion. As seen in the commenters' discussion, a critical step 
in the analysis is choosing the proper statutory construct for 
assessing copyright liability for the retransmission of distant digital 
television signals under the Act. Section 111 uses various terms, such 
as ``stations,'' ``signals,'' ``distant signal equivalents,'' and 
``nonnetwork television programming,'' to delineate the ``product'' 
being carried by cable operators and for which royalty fees must be 
paid. While the statute contains specific definitions of ``network 
station,'' ``independent station,'' and ``noncommercial station,'' the 
general term ``station'' is not defined in Section 111.
    There are certain terms that Congress did elaborate upon in Section 
111's legislative history. Congress stated that in any particular case, 
the ``primary'' transmitter is the one whose signals are being picked 
up and further transmitted by a ``secondary'' transmitter which, in 
turn, is someone engaged in ``the further transmitting of a primary 
transmission simultaneously with the primary transmission.'' H. Rep. 
No. 94-1476, 94th Cong., 2d Sess., at 91. In this instance, it 
mentioned the term ``signal'' in the plural form, but this is far from 
supporting NCTA's interpretation.
    Congress also explained that a ``distant signal equivalent`` is 
assigned to all ``distant`` signals. It stated that distant signals are 
defined as signals retransmitted by a cable system, in whole or in 
part, outside the local service area of the primary transmitter. It 
noted that different values are assigned to independent, network, and 
educational stations because of the different amounts of viewing of 
``non-network programming'' carried by such stations. Id. at 90. While 
Congress discussed the meaning of the term, ``distant signals,'' it did 
not explain the meaning and significance of the term ``signal,'' or how 
it is different from the term ``station,'' for cable copyright 
purposes.
    It is axiomatic that Section 111 is not a model of statutory 
clarity.\5\ The terms ``station'' and ``signal'' are used, 
interchangeably, dozens of times throughout the provision. It may have 
been that Congress did not find it necessary to clarify such terms in 
1976 because there was no confusion as to the subject being transmitted 
by cable operators at that time. However, for our purposes here, we 
must parse out what the terms mean, so that we can effectuate the 
intent of Congress when it enacted Section 111. In the absence of 
clarifying language in the Copyright Act, reference to the 
Communications Act of 1934 may help.
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    \5\See Daniel L. Brenner, Monroe E. Price, Michael Myerson, 
Present Rate Structure. Cable Television and Other Nonbroadcast 
Video, Sec.  9.9 (Database updated April 2007) (``The rate structure 
governing cable copyright payments is complex. It reflects the 
tremendous pressures exerted on Congress by the industries affected 
by the legislation. As all parties sought to fashion regulations 
that favored their own financial interests, they preferred ambiguity 
or possible inconsistency to potentially unfavorable clarity.'')
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    Under the Communications Act, the term ``broadcast station``, 
``broadcasting station'', or ``radio broadcast station'' means a radio 
station equipped to engage in broadcasting. 47 U.S.C. 153(5).\6\ This 
is the physical facility used to transmit radio signals. The term 
``broadcasting,'' in turn, means the dissemination of radio 
communications intended to be received by the public, directly or by 
the intermediary of relay stations. 47 U.S.C. 153(6). Broadcasting, 
then, is the act of transmitting radio signals. The term ``station 
license,'' ``radio station license,'' or ``license'' means that 
instrument of authorization required by the Communications Act or the 
FCC for the use or operation of apparatus for transmission of energy, 
or communications, or signals by radio, by whatever name the instrument 
may be designated by the Commission. 47 U.S.C. 153(42). A broadcast 
licensee is a holder of a broadcast license and has the authority under 
law to engage in broadcasting.\7\ Each of these terms were part of the 
Communications Act when Congress amended Title 17 in 1976 to include 
Section 111. And, each of these terms relates to the act of 
broadcasting and the dissemination of radio signals. None of the terms 
define the content of the transmission for either communications law or 
copyright law purposes. As such, when Congress used the term 
``station,'' in either the singular or the plural, in Section 111, it 
is reasonable to conclude that it did not intend for the term to define 
the scope of the cable operator's statutory royalty obligations.
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    \6\The Communications Act was amended in 1996 to include new 
definitions applicable to television broadcast licensees. Under the 
Act, the term ``analog television service '' means television 
service provided pursuant to the transmission standards prescribed 
by the Commission in Section 73.682(a) of its regulations (47 CFR 
73.682(a)). 47 U.S.C. 153(49)(A). The term ``digital television 
service '' means television service provided pursuant to the 
transmission standards prescribed by the Commission in Section 
73.682(d) of its regulations (47 CFR 73.682(d)). 47 U.S.C. 
153(49)(B).
    \7\In 1997, the FCC determined that the analog and digital 
facilities of a station are to be licensed under a single paired 
license. See Advanced Television Systems and Their Impact Upon the 
Existing Television Broadcast Service, Fifth Report and Order, 12 
FCC Rcd 12809 (1997).
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    Congress did not define the singular term ``signal'' in the 
Communications Act. However, it did define the term ``radio 
communication'' as the transmission by radio of writing, signs, 
signals, pictures, and sounds of all kinds, including all 
instrumentalities, facilities, apparatus, and services (among other 
things, the receipt, forwarding, and delivery of communications) 
incidental to such transmission. 47 U.S.C. 153(33). Signals, as seen 
above, are a particular kind of radio communication transmitted by a 
broadcast station. Again, however, the Communications Act does not 
delineate the specific type of programming carried by the signal 
transmission.
    To further elucidate the meaning of the term ``signal,'' it is 
useful to examine the history of the retransmission consent provisions 
of the Communications Act. Prior to 1992, cable operators were not 
required to seek the permission of a local broadcast station before 
carrying its signal nor were they required to compensate the 
broadcaster for the value of its signal. Congress found that a 
broadcaster's lack of control over its signal created a ``distortion in 
the video marketplace which threatens the future of over-the-air 
broadcasting.'' See S. Rep. No. 102-92, 102d Cong., 1st Sess. (1991) at 
35. In 1992, Congress acted to remedy the situation by giving a 
commercial broadcast station control over the use of its signal through 
statutorily-granted retransmission consent rights. Retransmission 
consent effectively permits a commercial broadcast station to seek 
compensation from a cable operator for carriage of its signal. Congress 
noted that some broadcasters might find that carriage itself was 
sufficient compensation for the use of their signal by a multichannel 
video programming distributor (``MVPD'') while other broadcasters might 
seek monetary compensation, and still others might negotiate for in-
kind consideration such as joint marketing efforts, the opportunity to 
provide news inserts on cable channels, or the right to program an 
additional channel on a cable system. Congress emphasized that it 
intended ``to establish a marketplace for the disposition of the rights 
to retransmit broadcast signals'' but did not intend ``to dictate the 
outcome of the ensuing marketplace negotiations.'' Id. at 36.
    With regard to copyright issues, the legislative history 
accompanying Section 325 indicates that Congress was

[[Page 31404]]

concerned with the effect retransmission consent may have on the 
Section 111 license stating that ``the Committee recognizes that the 
environment in which the compulsory copyright [sic] operates may change 
because of the authority granted broadcasters by section 325(b)(1).'' 
Id. The legislative history later stated that cable operators would 
continue to have the authority to retransmit programs carried by 
broadcast stations under Section 111. Id.
    In 2001, the FCC established a new policy permitting a broadcast 
station to treat its analog and digital signals differently for 
retransmission consent purposes. Under this paradigm, a television 
station would be allowed to choose must carry or retransmission consent 
for its analog signal and retransmission consent for its digital signal 
during the DTV transition period. The FCC also concluded that a 
broadcaster and a cable operator may negotiate for partial carriage of 
a local digital television signal. The FCC believed that this policy, 
which would apply to digital-only television stations and television 
stations with both analog and digital signals, would benefit both 
parties and help to accomplish the Congressional goal of smooth DTV 
transition. To the point, the FCC noted that the broadcaster gained 
access to cable subscribers for some fraction of its signal, and the 
cable operator could conserve channel capacity and carry that 
programming stream which it believes subscribers would want. The FCC 
stated that cable operators were likely to negotiate retransmission 
consent agreements with more stations if carriage of something less 
than the full complement of a broadcaster's digital signal is 
permitted. Carriage of Digital Television Broadcast Signals, 16 FCC Rcd 
at 2610-11.
    This discussion shows that Congress specifically intended to 
provide a broadcast ``station'' with a mechanism to extract the value 
of its ``signal'' when being retransmitted by a cable operator or other 
multichannel video programming distributor.\8\ This was a ``right'' 
that was clearly lacking in the copyright law. The legislative history 
of Section 325 of the Communications Act supports the notion that 
Congress was concerned about compensating a broadcast station for the 
retransmission of its signal by a cable operator, not the content 
carried on the signal.\9\ The FCC later allowed a broadcast station to 
segregate its digital signal to further realize the value of specific 
programming streams in the marketplace.
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    \8\For retransmission consent purposes, the term ``television 
broadcast station '' means an over-the-air commercial or 
noncommercial television broadcast station licensed by the 
Commission under subpart E of part 73 of title 47, Code of Federal 
Regulations, except that such term does not include a low-power or 
translator television station. 47 U.S.C. 325(b)((7).
    \9\Prior FCC statements on this matter support our view. When 
implementing the Communications Act's new must carry and 
retransmission consent provisions in 1993, the FCC stated that ``the 
legislative history of the 1992 Act suggests that Congress created a 
new communications right in the broadcaster's signal, completely 
separate from the programming contained in the signal. Congress made 
clear that copyright applies to the programming and is thus distinct 
from signal retransmission rights.'' The FCC interpreted Section 325 
as meaning that the new right may be bargained away by broadcasters 
in future contracts and conceivably could have been bargained away 
in some existing contracts. In so holding, the FCC stressed that 
``retransmission consent is a right created by the Communications 
Act that vests in a broadcaster 's signal; hence, the parties to any 
contract must have bargained over this specific right, not a 
copyright interest.'' The FCC then stated that ``Just as Congress 
made a clear distinction between television stations' rights in 
their signals and copyright holders' rights in programming carried 
on that signal, we intend to maintain that distinction as we 
implement the retransmission consent rules.'' See Broadcast Signal 
Carriage Issues, 8 FCC Rcd 2965, 3004 (1993).
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    So, it appears that the terms ``station'' and ``signal,'' are not 
necessarily controlling in our analysis here. In contrast, Section 111 
explicitly discusses the value of the nonnetwork programming carried by 
a broadcast station. Congress has used the term ``nonnetwork 
programming'' throughout the legislative history accompanying the Act. 
For example, Congress found that the retransmission of distant ``non-
network programming'' by cable systems causes damage to the copyright 
owner by distributing the program in an area beyond which it has been 
authorized. Congress also stated that such retransmission adversely 
affects the ability of the copyright owner to exploit the work in the 
distant market. For these reasons, Congress concluded that the 
copyright liability of cable television systems under the statutory 
license should be limited to the retransmission of distant ``nonnetwork 
programming.'' H. Rep. No. 94-1476, 94th Cong., 2d Sess., at 90.
    Further, when discussing copyright royalty distributions, Congress 
noted that copyright royalty fees should be made only for the 
retransmission of distant ``nonnetwork programming,'' and that the 
claimants were limited to (1) copyright owners whose works were 
included in a secondary transmission made by a cable system of a 
distant ``nonnetwork television program''; (2) any copyright owner 
whose work is included in a secondary transmission identified in a 
statement of account deposited under Section 111(d)(2)(A); and (3) any 
copyright owner whose work was included in distant ``nonnetwork 
programming'' consisting exclusively of aural signals. Id. at 97.
    The statutory definition of distant signal equivalents, and 
accompanying legislative history, also emphasize the term ``nonnetwork 
programming.'' For cable copyright royalty purposes, a ``distant signal 
equivalent'' is the value assigned to the secondary transmission of any 
nonnetwork television programming carried by a cable system in whole or 
in part beyond the local service area of the primary transmitter of 
such programming. It is computed by assigning a value of one to each 
independent station and a value of one-quarter to each network station 
and noncommercial educational station for the nonnetwork programming so 
carried pursuant to the rules, regulations, and authorizations of the 
Federal Communications Commission in effect in 1976. 17 U.S.C. 111(f) 
(emphasis added). The emphasis on DSEs is reinforced by Section 
801(b)(2)(B), which, as noted by Copyright Owners, reflects the 
legislative policy that cable operators should pay a separate royalty 
for the carriage of non-network programming that they were not 
authorized to carry under the FCC's 1976 rules.\10\
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    \10\This provision states, in relevant part: ``In the event that 
the rules and regulations of the Federal Communications Commission 
are amended at any time after April 15, 1976, to permit the carriage 
by cable systems of additional television broadcast signals beyond 
the local service area of the primary transmitters of such signals, 
the royalty rates established by section 111(d)(1)(B) may be 
adjusted to ensure that the rates for additional distant signal 
equivalents resulting from such carriage are reasonable in light of 
the changes effected by the amendment to such rules and 
regulations.'' 17 U.S.C. 801(b)(2)(B).
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    Congress noted that the definition of a ``distant signal 
equivalent''' is central to the computation of the royalty fees payable 
under the statutory license. According to the legislative history, it 
is the value assigned to the secondary transmission of any nonnetwork 
television programming carried by a cable system, in whole or in part, 
beyond the local service area of the primary transmitter of such 
programming. It is computed by assigning a value of one (1) to each 
distant independent station and a value of one-quarter (1/4) to each 
distant network station and distant noncommercial educational station 
carried by a cable system, pursuant to the rules and regulations of the 
FCC. The legislative history states, for example, that a cable system 
carrying two distant independent stations, two

[[Page 31405]]

distant network stations and one distant noncommercial educational 
station would have a total of 2.75 distant signal equivalents. H. Rep. 
No. 94-1476, 94th Cong. 2d Sess., at 100.
    We are confronted with an archaic and arcane statute and a 
burgeoning new technology that was never contemplated by Congress in 
1976. Both NCTA and Copyright Owners have submitted reasonable 
interpretations of the existing statutory language and its application 
to the retransmission of digital television streams. Our task here is 
to read Section 111 in a manner that keeps the statute functioning and 
in a way to avoid regulatory chaos. As such, the most reasonable 
interpretation, and one that is fully supportable by language and 
history of the Copyright Act (as well as the Communications Act), is 
one that best compensates copyright holders for the public performance 
of their works. We therefore propose that the statutory linchpins in 
this discussion are not ``signals,'' as proffered by NCTA, nor 
``stations,'' as noted by Copyright Owners, but ``DSEs'' and 
``nonnetwork television programming.'' While the Copyright Act is 
silent on the treatment of duplicative distant signals in Section 111, 
the DSE definition does not require cable operators to pay additional 
royalties for the digital simulcast of a distant television station's 
analog signal. In this case, there is no unique nonnetwork television 
programming retransmitted by the cable system. The copyright owner, in 
this instance, is already being compensated for the value of the work 
through the payment of royalties for the analog signal. Therefore, if 
the programming carried on the primary digital signal is duplicative of 
the programming carried on the analog signal, double payment of 
royalties for the retransmission of both by cable operators is not 
required. In practical terms, if a cable operator lists an analog 
signal and a digital simulcast signal on its statement of account, it 
only has to pay a single DSE.
    However, we propose that a cable operator must pay royalties on 
each retransmitted distant digital multicast stream carrying different 
programming from the channel line-up on other streams. Each multicast 
stream should be treated as a separate DSE for Section 111 purposes. It 
is important to note here that in 1976, an analog television station 
was limited by technology to being able to transmit a single channel of 
programming during a typical broadcast day. Currently, because of 
digital technology, a digital television station is able to transmit 
multiple channels of programming during a broadcast day. To the 
licensee, that is like having the ability to program multiple stations. 
To the cable subscriber, each multicast stream is received as, and 
appears to be, a separate ``station'' with different programming 
schedules. This is a critical distinction from program-related material 
embedded in the analog station's vertical blanking interval that cannot 
be seen nor has any instrinsic value to cable subscribers.
    In this instance, we propose that copyright owners must be 
compensated because there is new nonnetwork programming being carried 
by the cable operator regardless of whether multiple digital signals 
are broadcast from a single transmitter. Thus, if there is any 
original, non-duplicative programming on a multicast stream, then 
royalties must be paid according to the DSE value that would be 
assigned to that signal based upon its classification as either a 
network, independent, or noncommercial station. A cable operator must 
report the retransmission of each multicast programming stream it 
carries on its SOA. So, if an operator retransmits a distant network 
station analog signal, a digital simulcast of the network, and two 
separate digital multicast network station streams, the DSE would equal 
.75 (.25 for the analog, 0 for the digital simulcast, .25 for the first 
stream and .25 for the second stream).\11\ In accordance with the rules 
proposed below, a cable operator shall identify the types of digital 
streams retransmitted on its Statement of Account so that examiners are 
able to process the forms submitted to the Copyright Office. While 
Congress certainly did not contemplate the advent of multicasting when 
it enacted Section 111 thirty years ago, our proposal comports with the 
language, intent, and goals of the Act.\12\ We believe that the 
Copyright Office has the statutory authority to effectuate this policy 
outcome without legislative action.\13\
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    \11\This does not include the possibility of the 3.75% fee, or 
syndicated exclusivity surcharge, which may or may not apply.
    \12\The FCC has recognized the value of multicasting and its 
ability to reach audiences with different programming on different 
streams. For example, in 2004, the FCC amended its children's 
television rules and policies to ensure that they continue to serve 
the interests of children during and after the DTV transition. Among 
other things, the FCC revised its three-hour core programming 
processing guideline (where a television broadcast licensee is 
required to air three hours per week of programming ``specifically 
designed'' to serve the educational and informational needs of 
children ages 16 and under) as it applies to DTV signals. For those 
broadcasters that engage in multicasting, the rule generally 
provides that a broadcaster's core programming obligation increases 
in proportion to the amount of free programming being offered. That 
is, a digital television station must provide additional children's 
programming on each multicast it offers. See Children's Television 
Obligations of Digital Television Broadcasters, 19 FCC Rcd 22943 
(2004).
    \13\In the 2004 SHVERA, Congress was principally concerned with 
the reauthorization of Section 119 that was to expire without 
legislative action. Section 111, which is permanent, was not the 
subject of discussion at that time and any attempt to have amended 
the cable statutory license would have unduly delayed the Section 
119 renewal process.
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    When discussing DSEs here, it is also important to recognize that 
under Section 111(f) of the Copyright Act, the values for independent, 
network, and noncommercial educational stations are subject to some 
limitations. For example, where the FCC's rules require a cable system 
to omit the further transmission of a particular program, and the rules 
also permit program substitution, no value is assigned to the 
substituted or additional program. Further, where the FCC's rules 
permit a cable system, at its election, to omit the further 
transmission of a particular program and permit the substitution of 
another program, the value assigned for the substituted or additional 
program shall be, in the case of a live program, the value of one full 
distant signal equivalent multiplied by a fraction that has as its 
numerator the number of days in the year in which such substitution 
occurs and as its denominator the number of days in the year. Also, in 
the case of a station carried pursuant to the FCC's late-night or 
specialty programming rules, or a station carried on a part-time basis 
where full-time carriage is not possible because the cable system lacks 
the activated channel capacity to retransmit on a full-time basis all 
signals which it is authorized to carry, the values for independent, 
network, and noncommercial educational stations are multiplied by a 
fraction which is equal to the ratio of the broadcast hours of such 
station carried by the cable system to the total broadcast hours of the 
station. These exceptions are important to recognize because they 
demonstrate that Congress explicitly limited the value of certain 
nonnetwork programs, for royalty purposes, when the situation so 
warranted.\14\ There are no such exceptions for digital signals 
retransmitted under Section 111.
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    \14\The legislative history accompanying this provision states 
that this ``discretionary exception is limited to those FCC rules in 
effect on the date of enactment of this legislation. If subsequent 
FCC rule amendments or individual authorizations enlarge the 
discretionary ability of cable systems to delete and substitute 
programs, such deletions and substitutions would be counted at the 
full value assigned the particular type of station provided above.'' 
H. Rep. No. 94-1476, 94th Cong., 2d sess., at 100.

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[[Page 31406]]

C. Ancillary and Supplementary Streams

    Background. DTV technology allows television stations to use part 
of their digital bandwidth for new ancillary programming and data 
services. These adjunct services can be provided simultaneously with 
high definition or standard definition DTV programs, and can deliver 
virtually any type of data, audio or video, including text, graphics, 
software, web pages, video-on-demand, and niche programming. Some of 
the content produced and distributed by the television station may be 
related to the program being broadcast (i.e., ``program-related 
material''). For example, a television station may transmit interactive 
sports statistics along with the local major league baseball game being 
digitally broadcast.
    Copyright Owners did not directly discuss the retransmission of 
digital program-related material under Section 111 in their Petition 
for Rulemaking. However, they did suggest that if one digital broadcast 
stream contained only material that was part of the copyrighted 
programming on the other digital broadcast stream, the cable operator 
would report only a single DSE (or .25 DSE if the stream qualified as a 
``network station'' as defined in the Copyright Act). Copyright Owners 
cited to WGN v. United Video, 693 F.2d 622 (7th Cir. 1982) in support. 
We sought comment on Copyright Owners' recommendation in the NOI and 
also asked whether the 1982 WGN case, decided in an analog context, is 
applicable in this context. 71 FR at 54951.\15\ No party filed comments 
in response to this specific inquiry. However, as seen above, NCTA 
raises arguments about program-related material and multicasting that 
allude to this case. See, supra, at 11.
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    \15\Satellite carriers and copyright owners have agreed that no 
separate copyright royalty payment would be due for any program-
related material contained on the digital broadcast stream within 
the meaning of WGN. See Rate Adjustment for the Satellite Carrier 
Compulsory License, 70 FR 39178, 39179 (July 7, 2005).
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    We also must recognize that NAB, in its comments filed in response 
to the Copyright Office's Section 109 Notice of Inquiry, argues that 
separate rules for the retransmission of digital broadcast signals are 
unnecessary; instead, some relatively minor clarifications and 
amendments should clarify that the existing rules apply without regard 
to the broadcast format of a signal. According to NAB, each separate 
broadcast signal with a stream of programming retransmitted by a cable 
system to subscribers should be reported and considered separately for 
purposes of calculating Section 111 royalties. It comments that if the 
material on one channel consists entirely of material that is identical 
to or related to the copyrighted material on another channel, within 
the meaning of WGN v. United Video, Inc., 693 F.2d 622 (7 th Cir. 
1982), only one DSE value would be assigned to both channels. Based on 
the preceding comments, a discussion of WGN is important in both the 
royalty treatment of distant digital multicast signals and how the 
Office should examine ``program-related'' material for Section 111 
purposes.
    In WGN, an independent television station in Chicago sought an 
injunction against United Video, a telecommunications common carrier, 
to prohibit it from retransmitting its copyrighted television program 
to the carrier's cable television system customers after stripping the 
vertical blanking interval (``VBI'') of teletext information. The 7th 
Circuit held that the teletext was covered by the underlying copyright 
on the news program where it was intended to be seen by the same 
viewers that were watching the nine o'clock news on WGN, during same 
interval in which that news was broadcast, and it was an integral part 
of the news program. The teletext portion of the program itself, was 
encoded in vertical blanking interval of the television signal. The 
Court held that this was the case even though the teletext could not be 
viewed simultaneously with the news program and was intended to be seen 
as if it were on a different channel, even though it was part of the 
same signal. The Court concluded that the television station's 
copyright in its news program was infringed by the deletion of the 
teletext portion of the broadcast by United Video.
    Discussion. As an initial matter, we must note that digital 
multicasting is different than the teletext provided in the vertical 
blanking interval of WGN's analog broadcast signal for a variety of 
reasons. From a technical standpoint, there is no VBI in the digital 
television context. Rather, there are digital streams of data that can 
be dynamically tailored to transmit any type of programming within the 
bandwidth constraints of the digital television signal. There are also 
significant differences in the manner by which multicasting is 
presented. First, multicast streams are not intended by television 
stations to be seen by the same viewers. One of the benefits of 
multicasting is that a broadcaster can reach different audiences with 
different programs than the kind broadcast on the primary digital 
stream. Second, multicast streams exist independent of each other, at 
least from the viewers' perspective. While the streams are transmitted 
simultaneously by a digital television station, the programming streams 
are generally not entwined with each other. For example, a single 
digital television station may be multicasting separate digital 
programming streams of ABC, NBC, and Fox programming at the same time 
and be seen separately by viewers at home. Finally, each multicasting 
stream in the example given is not anchored to, or is an integral part 
of, the video programming of the main video stream (as designated by 
the broadcaster). Multicasts are more like separate ``stations'' rather 
than one station with programming streams orbiting around it. As such, 
most multicast streams would not be considered program-related for 
Section 111 purposes, and therefore, should not be bundled together for 
DSE determinations. Rather, each stream should have its own distinct 
DSE value in line with the points noted elsewhere in this NPRM.
    There are certain exceptions to this general rule. For example, a 
multiple camera angle sporting event may be considered a program-
related event under the WGN factors. In this instance, this programming 
is intended to be seen by the same viewers, they are related to each 
other since they are different perspectives of the same event, and they 
are an integral part of the same broadcast. As such, the retransmission 
of such nonnetwork programming would be assigned a value of a single 
DSE.
    It is important to note that FCC has determined that, to avoid 
inconsistency with copyright law, the factors enumerated by the 7th 
Circuit in WGN should be used in deciding whether material in the 
vertical blanking interval of local television stations is program-
related and therefore entitled to mandatory cable carriage.\16\ The FCC 
noted that there could also be instances in which material that does 
not fit squarely within the factors listed in WGN would be program-
related. See Broadcast Signal Carriage Issues, 8 FCC

[[Page 31407]]

Rcd 2985 n.235 (1993); Broadcast Signal Carriage Issues, 
Reconsideration Order, 9 FCC Rcd 6723, 6732 n.128. 614. See also In re 
Gemstar International Group., Ltd., 16 FCC Rcd 21531 (2001) (holding 
that an electronic program guide developed by Gemstar International, 
and carried in the VBI of local broadcast stations, was not covered by 
the signal carriage obligations of Section 614).
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    \16\Pursuant to Section 614 of the Communications Act, and 
implementing rules adopted by the FCC, a broadcast station is 
entitled to assert mandatory carriage rights on cable systems 
located within the station's market. Specifically, cable operators 
are required to carry the primary video, accompanying audio, and 
closed captioning information in line 21 of the VBI, in its 
entirety, of local commercial stations in fulfilling their must 
carry obligations. Cable operators also are required, to the extent 
technically feasible, to retransmit program-related material carried 
in the VBI. Carriage of other non-program-related material in the 
VBI (including teletext and other subscription and advertiser-
supported information services) is at the discretion of the cable 
operator.  See 47 U.S.C. 534(b)(3).
---------------------------------------------------------------------------

    Therefore, unique audio and visual material that is related to a 
program being transmitted by a digital broadcast television signal is 
considered covered under Section 111 of the Act. If such material is 
embedded in the digital programming stream, such as new interactive 
content like multiple camera angles, then a cable operator should not 
have to pay separate royalties for the additional material. However, if 
the distant digital broadcast station multicasts unique and separate 
streams of programming, and they are retransmitted pursuant to Section 
111, then a cable operator must pay royalties for each stream.
    WGN provides support for our interpretations here. In reviewing the 
facts and law presented in WGN, the 7th Circuit stated that ``Congress 
probably wanted the courts to interpret the definitional provisions of 
the new act flexibly, so that it would cover new technologies as they 
appeared, rather than to interpret those provisions narrowly and so 
force Congress periodically to update the act.'' 693 F.2d at 628. The 
Court comments that the House Report states: ``Authors are continually 
finding new ways of expressing themselves, but it is impossible to 
foresee the forms that these new expressive methods will take. The bill 
does not intend either to freeze the scope of copyrightable technology 
or to allow unlimited expansion to areas completely outside the present 
congressional intent. Section 102 [a lengthy enumeration of 
copyrightable works of authorship, including audiovisual works] implies 
neither that the subject matter is unlimited nor that new forms of 
expression within that general area of subject matter would necessarily 
be unprotected.'' Id. citing H.R. Rep. No.1476, 94th Cong., 2d Sess. at 
51 (1976) (emphasis added). The Court then states, ``We take this 
passage, despite its hedging language, as some warrant for the method 
of interpretation employed in this opinion, which allows new types of 
``audiovisual work'' to be recognized by analogy to the old.'' Id. at 
629.\17\ No party filed comments disagreeing with this general 
principle.
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    \17\Digital television applications are developing at a rapid 
pace and it is impossible to prognosticate future developments. In 
any event, broadcasters are currently working on technologies that 
would allow digital television station licensees to offer near on-
demand news and weather, target ads at individual viewers, and 
transmit downloadable programming, games, and music. See TVNEWSDAY, 
Digital TV Opens Up Two-Way Opportunities, https://tvnewsday.com/
articles/2008/02/28/daily.4/ (Last accessed on February 28, 2008). 
We are not in a position here to decide whether the retransmission 
of such material would be covered by Section 111.
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D. Application of Section 111 to Digital Signals

    In the NOI, we stated that the retransmission of digital signals 
was not expressly excluded under the cable statutory license, however, 
we sought comment on a number of practical problems associated with 
their retransmission under the existing Section 111 regulatory 
structure. At the outset, it is important to note that in their 
comments, Copyright Owners stress that separate rules for 
retransmission of digital broadcast signals are unnecessary. Instead, 
they ask the Copyright Of