Option 2: Retention of the retransmission scheme

15.61 Option 2 assumes a continuing need to facilitate the retransmission of free-to-air television and radio broadcasts, either to ensure access to free-to-air broadcasting or to facilitate market entry by new content service providers.

15.62 This means that a mechanism to ensure broadcasters are obliged to allow retransmission is still required; along with a statutory licensing scheme for the underlying rights, on the basis that it would be impracticable for retransmitters to negotiate the retransmission of free-to-air broadcasts.

A remunerated exception for broadcast copyright

15.63 The ALRC asked, in the Issues Paper, whether the retransmission of free-to-air broadcasts should continue to be allowed without the permission or remuneration of the broadcaster.[58]

15.64 Perhaps unsurprisingly, subscription television interests considered that the existing retransmission exception should continue to operate,[59] while free-to-air broadcasters generally submitted that the permission of the broadcaster should be required.[60]

15.65 A central argument for retaining the current arrangements is that they benefit consumers through competition in the market, by ensuring that free-to-air broadcasts are available across platforms, so consumers may access these services terrestrially, or via cable or satellite.[61] ASTRA and Foxtel submitted that the existing retransmission regime works well for the benefit of consumers, has ensured access to free-to-air broadcast through commercial negotiation and that there is no justification for legislative reform.[62]

15.66 Screenrights stated that, from a commercial perspective, ‘access to the free to air broadcast channels is very important for a new entrant into the television market in Australia’.[63] In its view, retransmission has fostered competition in the broadcast market and has ‘encouraged new and diverse services, that probably were not considered at the time the scheme was created’.[64]

15.67 While requiring the permission of broadcasters for retransmission would provide broadcasters with an opportunity to negotiate remuneration directly, stakeholders considered that broadcasters already receive remuneration in other ways. That is, commercial broadcasters are ultimately remunerated for retransmission through higher ratings, which have a role in determining advertising revenue. In addition, broadcasters are often the underlying rights holders and receive remuneration under pt VC.[65]

15.68 ASTRA submitted that no evidence has been provided to show any loss of advertising revenue or potential audience reach as a result of retransmission of commercial television services on subscription platforms. Rather, commercial broadcasters were seen as effectively seeking an additional revenue stream from subscription television consumers ‘for television services that are required to be both freely available and usually funded by advertising, and where those customers can already receive those services without payment’.[66]

15.69 Foxtel highlighted that retransmission is ‘an extremely limited right’, which only enables it to retransmit free-to-air broadcasts simultaneously with the terrestrial broadcast, in the licence area and in an unaltered fashion. Foxtel retransmits free-to-air broadcasts only for the convenience of its subscribers being able to access those channels through the one service.[67]

15.70 As discussed above, in the ALRC’s view, a scheme that allowed broadcasters to control whether or not broadcasts are retransmitted would be problematic for the operation of any statutory licensing scheme for the underlying rights. For this reason, if Option 2 is preferred, the ALRC proposes that broadcast copyright should also be subject to a statutory licence. This would ensure that retransmission can continue to operate, and provide some recognition for broadcast copyright.

15.71 A model for the new scheme is provided by pt VD of the Copyright Act. Part VD was introduced in 2010 as part of the changeover from analogue to digital television broadcasts.[68] A new service was implemented to transmit television by satellite to remote reception areas. As the new satellite service would mainly re-broadcast, pt VD provided a statutory licence to allow this without infringing copyright.

15.72 Unlike the pt VC licence, the pt VD licence extends to the copyright in the broadcast itself. For the satellite BSA licensee to be able to rely on the statutory licence of that copyright there must be an agreement, Copyright Tribunal order or undertaking covering payment to the broadcast copyright owner.[69] A similar scheme could apply to broadcast copyright in relation to retransmission.

15.73 Screenrights stated that the exclusion of broadcast copyright from pt VC is anomalous and, if pt VC were amended to include broadcasts within a statutory licence, it could ‘foresee no difficulties with administering this’.[70]

15.74 From the perspective of broadcasters, however, control of the broadcast rather than remuneration for retransmission may be the primary issue. Broadcasters would like to have the ability to refuse permission for retransmission in certain situations and the flexibility to negotiate remuneration, if appropriate.[71]

15.75 Free-to-air broadcasters would not necessarily ask to be remunerated in order for subscription television companies to retransmit their programs, because retransmission may increase their market penetration. At present, free-to-air broadcasters may, for example, pay for the costs of satellite transponder space in order to facilitate retransmission by subscription television services.

15.76 CRA stated that, in many cases, radio broadcasters would be willing to ‘authorise retransmission free of charge, so the imposition of a statutory licensing scheme may not be appropriate’. However, there are also ‘situations where compensation would be appropriate, for example, if a third party were making a significant amount of revenue from the retransmission, or if the service competed directly with one offered by the broadcaster’.[72]

15.77 CRA also submitted that the industry should have the right to refuse permission for the retransmission of a broadcast, for a range of reasons—for example, where the broadcast licence area is ‘so well serviced by traditional analogue and digital radio, and station simulcasts, that further fragmentation of the listenership through retransmission is unnecessary, and certainly outside the spirit of the original legislative drafters’ intention’.[73]

15.78 The ALRC understands that, even under the current retransmission regime, free-to-air broadcasters already enter retransmission agreements with Foxtel. These agreements cover matters such as paying for satellite capacity, a channel’s position on the electronic program guide, and the quality and reliability of reception. The small number of free-to-air broadcasters means that whether, and on what terms, retransmission takes place can generally be left to negotiation in the marketplace.

Remuneration for underlying rights

15.79 The Copyright Act provides that the copyright in underlying works and other subject matter is not infringed by retransmission, if remuneration is paid under the pt VC statutory licensing scheme. Screenrights collects the licence fees, identifies the programs that are retransmitted and pays royalties to the rights holders. Royalties are generated when free-to-air broadcasts are simultaneously retransmitted by another service.

15.80 Questions may be raised about the retention of the pt VC scheme because, in other contexts, the ALRC has proposed that statutory licensing schemes should be repealed and licences for such uses negotiated voluntarily.[74]

15.81 However, pt VC appears to remain necessary for facilitating retransmission because, even where the broadcast is retransmitted with the consent of the broadcaster, the broadcaster may not have a licence from underlying copyright holders to authorise retransmission.

15.82 Further, because retransmission must be simultaneous with the free-to-air broadcast (the programming of which can change at any moment), it would be impractical for the retransmitter to seek licences to underlying rights, even if problems with the multiplicity of copyright holders could be overcome. Importantly, the retransmitter may have limited, or no prior notice of the broadcast content and would not necessarily be able to identify all the copyright holders.

15.83 The retention of pt VC would also retain the only statutory source of remuneration for directors because, under s 98 of the Copyright Act, directors are entitled to licence fees for retransmission.[75]

15.84 As discussed above, the ALRC presents alternative sets of proposals. Option 1 assumes that the retransmission of free-to-air television and radio broadcasts no longer needs to be facilitated in a converging media environment, and the extent to which retransmission occurs should be left to be determined by market mechanisms. Reform would involve the repeal of both the free-use exception applying to broadcast copyright and the remunerated exception in relation to copyright in the underlying rights.

15.85 Option 2 assumes a continuing need to facilitate the retransmission of free-to-air television and radio broadcasts, and that it would be impracticable for retransmitters to negotiate the retransmission of free-to-air broadcasts. Reform would involve replacing the free-use exception for broadcast copyright with a remunerated exception, similar to that applying to the underlying rights, which would be retained.

Proposal 15–1

Option 1: The exception to broadcast copyright provided by the Broadcasting Services Act 1992 (Cth), and applying to the retransmission of free-to-air broadcasts; and the statutory licensing scheme applying to the retransmission of free-to-air broadcasts in pt VC of the Copyright Act, should be repealed. This would effectively leave the extent to which retransmission occurs entirely to negotiation between the parties—broadcasters, retransmitters and underlying copyright holders.

Option 2: The exception to broadcast copyright provided by the Broadcasting Services Act, and applying to the retransmission of free-to-air broadcasts, should be repealed and replaced with a statutory licence.

[58] Australian Law Reform Commission, Copyright and the Digital Economy, IP 42 (2012), Question 35.

[59] ASTRA, Submission 227; Foxtel, Submission 245. News Ltd endorsed Foxtel’s submission in relation to retransmission: News Limited, Submission 224.

[60] Free TV Australia, Submission 270; Commercial Radio Australia, Submission 132.

[61] ASTRA, Submission 227; Screenrights, Submission 215.

[62] Foxtel, Submission 245; ASTRA, Submission 227.

[63] Screenrights, Submission 215. A number of other stakeholders expressly supported Screenrights’ submission in relation to retransmission: Copyright Agency/Viscopy, Submission 249; APRA/AMCOS, Submission 247; ARIA, Submission 241; Australian Directors Guild, Submission 226; Australian Copyright Council, Submission 219; Arts Law Centre of Australia, Submission 171.

[64] Screenrights stated that these services include ‘satellite and cable residential subscription television, mobile television, fibre to the premises services, hospital communication systems and IPTV’ and that, in 2010–2011 more than 2.25 million households received retransmission: Screenrights, Submission 215.

[65] Foxtel, Submission 245. ASTRA stated that free-to-air broadcasters currently receive a ‘substantial proportion of the remuneration payments made under Part VC’: ASTRA, Submission 227.

[66] ASTRA, Submission 227.

[67] Foxtel, Submission 245.

[68]Broadcasting Legislation Amendment (Digital Television) Act 2010 (Cth).

[69]Copyright Act 1968 (Cth) s 135ZZZI. See Thomson Reuters, The Law of Intellectual Property: Copyright, Designs and Confidential Information, [12.225].

[70] Screenrights, Submission 215.

[71] Commercial Radio Australia, Submission 132.

[72] Ibid.

[73] Ibid.

[74] See Chs 14 and 15, in relation to the pts VA and VB licensing schemes, as they apply to educational and government uses of copyright material.

[75] The Australian Directors Guild expressed concern about the limited scope of directors’ copyright in films: Australian Directors Guild, Submission 226.