Refunds Under the Cable Statutory License

Background

The Satellite Television Extension and Localism Act of 2010 (“STELA”), Pub. L. No 111-175, amended Section 111 of the Copyright Act to allow a cable system to calculate its royalty payments on a community-by-community basis, rather than on a system-wide basis. STELA also eliminated the possibility of an infringement action against those cable systems that historically did not pay for carriage of “phantom signals,” and it clarified that cable systems that had paid for carriage of these signals were not entitled to a refund or offset for those payments. The legislation, however, did not address whether a cable system was entitled to a refund for non-phantom related reporting errors in the case where the cable system has an outstanding balance owed for the carriage of such signals for an accounting period prior to 2010. The Copyright Office seeks comment on whether a cable operator may receive refunds in situations where it has failed to pay for the carriage of distant signals on a system-wide basis under the Copyright Act before STELA amended the Act.