The Copyright Office is studying the compulsory licensing system for the cable and satellite television. The results of the examination are due June 30th, 2008. The compulsory licenses are regulated by Section 111 of the Copyright act (permits cable to retransmit broadcast programming to subscribers), Section 119 and 122 (allows satellite carriers to retransmit iers of distant television signals and let satellite carriers to retransmit distant and local television signals, respectively).

The Copyright Office will examine: 1) royalty fees paid; 2) terms and conditions of the licenses, and competitive impact; 3) necessity of the licenses 4) analysis of savings to subscribers 5) application of the licenses to further retransmissions. Royalties paid under the rates set by the copyright offices now amount to about $125 million annually for cable, $50 million for satellite.

Compulsory licensing sets up a vicious cycle. Once started, it becomes incredibly difficult to end and return to a market-based licensing system based on negotiations. Broadcasters are often barred by regulation from seeking other outlets, while cable has in part become complacent about its right to retransmit broadcast programming. No progress has been made to set right the confusion about default rights to retransmit that gave rise to the original problem, so it remains to lie in wait for other technologies. Ugh.