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Copyright Office Publishes Updated List of Specialty Stations

June 18, 2007   

The Copyright Office has put out for comment an updated version of the “specialty station” list that is used by cable operators and the Office in calculating cable compulsory license royalty payments.  A station’s identification as a specialty station is significant in the administration of the cable compulsory license because cable operators are allowed to pay for the carriage of any distant specialty station at the “permitted” base rate, thus avoiding the higher “3.75 percent rate” for such stations.  As discussed below, the new list differs quite significantly from the previously published list and should be reviewed carefully by cable operators.

Background.  For purposes of the cable compulsory license, broadcast stations classified as “specialty stations” are not subject to the 3.75% royalty rate when they are carried as “distant” signals.  Specialty station status is determined by reference to a definition originally promulgated by the FCC: “a commercial television broadcast station that generally carries foreign-language, religious, and/or automated programming in one-third of the hours of an average broadcast week and one-third of the weekly prime-time hours.” See 47 C.F.R. § 76.5(kk) (1981).  After the FCC stopped updating its specialty station list in 1981, the Copyright Office took over the task.  Although the Office originally indicated that it would update the list every three years, the most recent update was published in December 1998.  In February 2007, the Office, recognizing the possibility that the list was now out-of-date, issued a “Request for Information” inviting specialty station owners to submit sworn affidavits attesting that their stations meet the specialty station criteria. 

Updated List.  The Copyright Office received affidavits on behalf of sixty-one broadcast stations, identified in the attached notice.  Any party that objects to the inclusion of a particular station on the list has until July 16, 2007 to submit specific comments detailing the basis for that objection.  The Office will publish a final “annotated” list later this year noting any objections filed against a particular station’s claim.  This annotated list will be used by Copyright Office personnel in reviewing cable operators’ Statements of Account; however, the Copyright Office will not independently seek to verify the specialty station status of any station. 

The updated list will become effective at the beginning of the semi-annual accounting period that begins after the publication of the final annotated list; in all likelihood, that will be the 2008-1 period.  Because almost three-quarters of the stations previously identified by the Office as “specialty stations” do not appear on the updated list, it is important that cable operators review the attached list as soon as possible.  If a station that an operator has been classifying as a “specialty station” (and thus exempt from the 3.75% rate) does not appear on the list, the operator has two options: (1) assuming that the station still meets the specialty station criteria, the operator can contact the station owner and urge it to submit a late affidavit to the Copyright Office or (2) assuming that the station no longer meets the specialty station criteria, the operator may want to drop the station so as to avoid incurring 3.75% royalty rate liability in future accounting periods.

We would be pleased to respond to any questions regarding this matter.
                                   

 

 

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