Statutory Copyright Licensing: Implications of a Phaseout on Access to Television Programming and Consumer Prices Are Unclear

Most U.S. households have access to television broadcast programming through cable or satellite services. Cable and satellite operators offer this programming by providing a secondary transmission of the over-the-air programming from television broadcast stations. Three statutory licenses permit operators to offer copyrighted broadcast programming in return for paying a government-set royalty fee. Although Congress created the licenses as a cost-effective way for operators to clear the copyrights to the programming, some policymakers and others believe the licenses should be phased out and a market-based approach adopted. The Satellite Television Extension and Localism Act of 2010 directed GAO to study and evaluate possible effects if Congress phased out the statutory licenses. This report addresses (1) the potential implications for the Federal Communications Commission's (FCC) regulations if such a phaseout were enacted; as well as how such a phaseout might affect (2) the market and regulatory environment and (3) consumer prices for cable and satellite television service and access to television programming. To address these objectives, GAO analyzed price, carriage, and royalty data; reviewed relevant laws; and interviewed industry stakeholders. GAO provided FCC and the U.S. Copyright Office with a draft of this report. In response, both provided technical comments that were incorporated where appropriate.