UK Cable Operators Will No Longer be Exempt From Copyright Fees with Repeal of Section 73

The United Kingdom has issued a Response and decided that it will repeal Section 73 of the Copyright, Designs and Patents Act 1988 (“CDPA”) immediately following the passing and approval of the Digital Economy Bill by Parliament (expected sometime in 2017). IFTA had urged the elimination of the exemption of Section 73 of the CDPA which exempted cable operators from paying copyright fees for the retransmission of the Public Service Broadcasters’ (“PSB”) core channels.

Online service providers also have increasingly relied on Section 73 to stream PSB channels without seeking permission from or paying any license fees to the broadcaster or copyright owners of the broadcast content, although online services are outside the scope of the exemption. Once repealed, and once an appropriate tariff framework is established (likely through industry negotiations), producers likely will be able to collect appropriate remuneration for the secondary commercial use of their broadcast content. The PSB core channels include all BBC channels, ITV1, and Channel 4 and 5’s core channels.

The repeal -- if it stimulates a regime in the UK like those accepted for retransmission elsewhere in Europe -- will be a win for IFTA’s Members around the world.  In its filing to the U.K.’s Intellectual Property Office in November, IFTA, which established its royalty collections division -- IFTA Collections – in 1994, stated:

Royalty income from secondary uses is often a steady, significant income stream for the independent production and distribution companies that IFTA represents and provides financial support for business operations. These rights holders depend upon legal frameworks which ensure compensation for the use of the secondary rights, including protection against the unequal economic leverage of broadcasters to avoid the specific payment to the producer for such additional or secondary uses. A repeal of Section 73 should foster and immediately facilitate producers’ ability to receive compensation for each use on all platforms by all users of copyright. As for performers, the relevant exclusive rights of performers will have been cleared by the producers. In most cases, the remuneration for the retransmission of performances will be satisfied by means of individual contract and/or collective bargaining agreement.