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1982

copyright liability of 1.48 percent of annual revenues, or 8.6

It should also be noted that, beyond outright exemp

cents per subscriber per month (less than the postage cost of

billing each subscriber for service each month).

ut the concepts of 'copyright qualification" and "popular

obedied in the TPT proposal necessarily result in an are pasaraphic distribution of copyright liability. This

It should also be noted that the purposefully incre

mental construction of the H.R. 2223 fee schedule results in a

e and to place a greater copyright burden on cable sysnon red in nore remote areas which rely heavily on "dis

1.92' importation rather than on systems located in or * wyr 1 markets which, because of the availability of

greater than proportional share of copyright liability being borne by the largest TPT systems--those with annual revenues in excess of $640,000, and with the highest average monthly charge to subscribers--55.98 (Column (4)]. Columns (3) and (5) indicate that these systems, representing 60.6 percent of TPT's revenues, account for 76.9 percent of the total copy

sca. signals, use fever "distant signals" in providing Es to their subscribers. The greater copyright burden, Sauce, would fall sore on those systems for which the lack

cest 'local' signals means greater reliance on "dis21.4.s.

To illustrate this point, Table VI presents an

of the geographic distribution of those systems which

right liability. A less than proportional share applies to all other classes of TPT's sytems. This result is consistent with the intention of the H.R. 2223 statute as drafted. It is also significant to note that the overall copyright fee impact of 1.48 percent on TPT systems per #. R. 2223 contrasts sharply with the illustrative figure of 2.24 percent in the text of TPT's proposal. Despite the higher illustrative fee given in the text of the TPT proposal (2.24 percent versus 1.48 percent in H.R. 2223), one is led to conclude that there are elesents in the TPT proposal, which if placed in actual operation would result in substantially lower copyright liability for TPT. Since the formula would apply only to systems which retransmit *copyright qualifying stations and/or signals, the definition serves to exempt outright a number of cable systems from all copyright liability.

RE: the signals of 'copyright qualifying" TV stations, to the used by the TP? proposal. The data contained therein ta e of the 25 systems within 35 miles of a top 100 TV cer, on y ? systems, or 8 percent, relied on distant Loe a popularity' factors of 4 percent or more.

M., of the 19 systems outside the 35 mile zones of top S urvis, 51 systems, or 65 percent, relied on "copy** Ten!y204 distant signals" with relatively high "popu

<iy x.. . This pattern of signal carriage by cable We starscores the greater copyright burden of systems

s'er sarkets.

It should also be noted that, beyond outright exemption, the concepts of copyright qualification and popularAty embodied in the TPT proposal necessarily result in an uneven geographic distribution of copyright liability. This would tend to place a greater copyright burden on cable systens located in more remote areas which rely heavily on "distant signalo importation rather than on systems located in or near major TV markets which, because of the availability of many local signals, use fever distant signals" in providing service to their subscribers. The greater copyright burden, therefore, vould fall more on those systems for which the lack

of sufficient local“ signals means greater reliance on

dis

tant signals.

To illustrate this point, Table vi presents an

analysis of the geographic distribution of those systems which retransmit the signals of copyright qualifying" TV stations. as defined by the TPT proposal. The data contained therein show that of the 25 systems within 35 miles of a top 100 TV market, only 2 systems, or percent, relied on distant

signala with 'popularity* factors of 4 percent or more.

Convernely. of the 79 systems outside the 35 mile tones of top 100 TV markets, 51 systems, or 65 percent, relied on copya righe qualifying distant signals with relatively high popularity* ratings. This pattern of signal carriage by cable #ysten, underscores the greater copyright burden of systems

outside major markets.

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The consistency of this pattern is further underscored by the observation that of the 26 "copyright qualifying" cable systems with minimal viewing to distant signals, 16 systems, or 62 percent, are within the 35 mile zone of a top 100 TV market. This indicates that closer proximity to a

u ocher 'significantly viewed"' signals in the county in ea ke system is located. Although we are mindful that se bedinitions lack absolute precision, they should yield 2. ts vaich are reasonably representative of the impact of 7. proposal on their systems.

the results of applying these definitions to the 142 ble systems included in our analysis are found in Tables

major TV market results in less reliance on copyright liable*

distant signals.

and 11:-which are, respectively, summaries of cable

and systen revenues as to copyright qualification.

besar.on of the data in these tables indicates that if the

Moreover, in addition to the 104 TPT "copyright qualifying" systems in the foregoing analysis, the same pattern of signal carriage is evident among the 38 TPT systems, which are exempt outright from copyright liability of these 38 systems, 30 systems, or 79 percent, are within 35 miles of a top 100 TV market. Again, a pattern wholly consistent with their nonreliance on "copyright qualifying" distant signals.

mente. Aspects of the TPT proposal were to be implemented,

S

VII. EXEMPTION EFFECT OF TELEPROMPTER PROPOSAL

id systems, or 26.9 percent would be exempt outright

copyright liability. More to the point is that these e ens account for and exempt 26.3 percent of TPT's revenues

copyright liability. Beyond outright exemption, also s.bar the inpact of the 'popularity" component of the TPT was on copyright qualification. Although we have already FRED I on the unwieldy aspects of the 'popularity" compo

save, nevertheless, undertaken the viewing hour

In order to evaluate the exemption aspects of the TPT proposal, we have established a definition of the term "copyright qualifying broadcast signal" and, by extension, "qualifying cable systems. Por purposes of this analysis, we have defined such systems as those which retransmit signals of stations whose Grade B contours do not cover the location of the cable system. Therefore, "non-copyright qualifying' cable systems are those which retransmit only the signals of stations within whose Grade B coverage the system is located,

da betired and listed in Appendix B of the Memorandum opin

Otter of Reconsideration of the Cable Television

144de! Docket 18397 et al.), FCC 72-530. It we be soted that Appendix Bis based upon 1971-1972 ".. Besta, and, hence, may not reflect current patterns

ticant viewing.

T

here, the application of these definitions to the a tot completely unambiguous, e.g., the proper dis**.39 of subscribers of systems located in more than

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plus other significantly viewed": signals in the county in which the system is located. Although we are mindful that these definitions lack absolute precision, they should yield results which are reasonably representative of the impact of IPT'proposal on their systems.

The results of applying these definitions to the 142 TV+ cable systems included in our analysis are found in Tables 111 and 111-4 which are, respectively. summaries of cable systems and system revenues as to copyright qualification. Examination of the data in these tables indicates that if the exemption aspects of the TPT proposal vere to be implemented, 18 of its systems, or 26.8 percent would be exempt outright from all copyright liability. More to the point is that these

systems account for and exempt 26.3 percent of TPT', revenues from all copyright liability. Beyond outright exemption, also consider the impact of the popularity component of the TPT proposal on copyright qualification. Although we have already commented on the unwieldy aspects of the popularity compobent, we have, nevertheless, undertaken the viewing hour

As det ined and listed in Appendix # of the Memorand in Opinion and Order on Heronsideration of the Carle v ision kesi ardeler (t >*et 16 17 et al.). Po 72-50." it. .3 be noted that Appendix ® is based upin 1971-1972 Vieving data, and, hence, may not retlect current patterns of significant viewing.

Furthermore, the application of these definitions to the data is not completely unanbiguous. ... the proper diatribution of subscribers of systems located in more than one county

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ex?percent' (see Table I), and "popularity" factors

.2d in the IP? proposal. We have employed the term :.: qualifying' broadcast signals as defined on page 10.'

.. of the formula with these components to the re

market share analysis in conformity with our interpretation of the TPT proposal. The analysis focuses on "copyright qualifying cable systems (Column (3), Table 11), and identifies lin Column (4)] those cable systems which carry "qualifying" signals which achieve "popularity" below 0.5 percent' in the county in which the cable system is located. The effect is to exempt another 26 systems, an additional 18.3 percent, from copyright liability and an additional 19.1 percent of TPT'S revenues (Column (4), Table 111-A). Taken together, our estimate of the implementation of the proposal would exempt : 64 TPT systems (45.1 percent) and $31.7 million of TPT reve

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nues (45.4 percent) from copyright liability. Note that of the $31.7 million of revenues exempt from copyright liability, $20.0 million, or 62.9 percent, are accounted for by TPT systems in the highest (over $640,000) revenue class. Column

De Bre, the greatest impact is on TPT systems in the is: 20-5174,000 annual revenue class, an effective rate of

ii. par sect of revenues, or 14.9 cents per subscriber per

(6) of Tables III and III-A recapitulate the exemption totals.

in a compared with impacts of 2.42 percent and 13.4 cents

* 1.set.bet per month for the largest TPT systems--those in

VIII. COPYRIGHT FEE IMPACT OF PROPOSAL ON TELEPROMPTER

SYSTEMS

Sate: $64., 600 annual revenue class. Copyright liability a bremessed system by system and is a function of the

To the 78 TPT systems that would remain liable for copyright payments we have applied the formula from the TPT proposal to determine copyright liability. The formula we

We that the 28 percent figure is based on total broadcast

ex ich has the effect of reducing copyright pay

have used includes the program expense/broadcast revenue

* $.ve proper weight to copyright qualifying non-network

2.94 of network affiliated stations, we have apbuild a !acket of 40 percent to the market share percent*** 7.6.99 hours obtained by such stations. Estimate

45e 06. A. C. Nielsen Co., Nielsen National TV Ratings, 1.5** Television Index, which was provided by an

The minimum reporting standard of the Arbitron television rating service is 0.5 percent.

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