Refunds Under the Cable Statutory License
The Copyright Office is amending its regulations to clarify its practices for providing refunds of cable royalties under the provisions of the Satellite Television Extension and Localism Act of 2010 (``STELA''). A cable operator must pay royalties to and file Statements of Account with the Office every six months in order to use the statutory license that allows for the retransmission of over-the-air broadcast signals under 17 U.S.C. 111. STELA allows a cable operator to calculate its royalty obligation for the carriage of distant signals on a community-by-community basis for accounting periods beginning on or after January 1, 2010, instead of calculating its royalty obligation based on the system as a whole. STELA also states that a cable operator shall not be subject to an infringement action if it used the subscriber group methodology to calculate its royalty obligation in a Statement filed prior to the effective date of STELA. Although a cable operator cannot be held liable for using the subscriber group methodology, the regulation clarifies that a cable operator's obligation to pay for the carriage of distant signals prior to the effective date of STELA was determined on a system-wide basis. Therefore, refunds for an overpayment of royalty fees on a Statement filed prior to the effective date of STELA will be made only when a cable operator has satisfied its outstanding royalty obligations (if any), including the obligation to pay for the carriage of each distant signal on a system-wide basis.