The case of copyrights' secondary retrans fees: 'secondary transmissions' is a separate fee from the 'retransmission consent fee' that U.S. TV networks collect from cable and satellite TV systems.

Author:Schiffman, Steven M.

It is common knowledge that TV producers pay their respective copyright holders, either via upfront payments and/ or royalty deals associated with global syndication, whether repeats or first run. Thus the question legitimately arises: Why the need to pay copyright owners a fee for live broadcast carriage by cable and satellite TV services? This copyrights fee for "secondary transmissions" is a separate fee from the $7.7 billion retransmission (retrans) consent fees that U.S. TV networks collected in 2016 from cable and satellite TV systems.

According to the Licensing Division of the U.S. Copyright Office, as of December 31, 2015 (the latest time from which figures are available), the amount of the 2014 Cable Funds available for distribution totaled approximately $233,557,040.34. Based on this amount, a 60 percent partial distribution of the 2014 Cable Funds would total approximately $140,134,224.20.

In a nutshell, "secondary transmissions" to the public by a cable system of a performance or display of a work embodied in a primary transmission made by a broadcast station licensed by the Federal Communications Commission shall be subject to statutory licensing. Consequently, twice each year, American cable services and satellite carriers deposit with the U.S. Copyright Office royalties payable for the privilege of retransmitting over-the-air television and radio broadcast signals via cable and satellite.

Section III of the U.S. Copyright Act grants a statutory copyright license to cable television systems for the retransmission of over-the-air television and radio broadcast stations to their subscribers.

In exchange for this license, cable operators submit royalty payments and statements of account detailing their retransmissions semiannually to the Copyright Office. The Copyright Office deposits the royalties into the United States Treasury for later distribution to copyright owners of the broadcast programming that the cable systems retransmit.

Then, Copyright Royalty Judges oversee distribution of the royalties to copyright owners whose works are included in the retransmissions and who have filed a timely claim for royalties. If an interested party fails to file a "Petition to Participate" in response to a formal public notice, that party will not be eligible for distribution of royalties for a pre-determined period from either the cable or satellite.

Allocation of the royalties collected occurs in one of two ways: In the first instance...

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