Copyright Liability for Cable Television

Is Compulsory Licensing the Solution?

by Stanley Besen, Willard G. Manning, Bridger M. Mitchell

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Analyzes the historical background and the economic issues leading to the General Revision of the Copyright Act, which provides a compulsory license instead of full copyright liability. This license permits cable systems to carry those signals currently authorized for retransmission by the Federal Communications Commission upon payment of a specified percentage of revenues. The basic thesis of this report is that the adoption of compulsory licensing will aggravate the problems associated with distant signal importation. (1) A compulsory license is less efficient than full liability because the consumers' willingness to pay for programs is perceived only indirectly by program suppliers. (2) The lack of specificity in the guidelines for allocating the compulsory license fees among suppliers can only aggravate their revenue problems. (3) Whereas full liability would have provided a more enduring resolution of the copyright liability for cable, the General Revision provides only a temporary solution.

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