-13 factor of 28 percent (see Table I), and "popularity" factors Note that the 28 percent figure is based on total broadcast revenues which has the effect of reducing copyright pay ments. To give proper weight to copyright qualifying non-network programming of network affiliated stations, we have applied a factor of 40 percent to the market share percentage of viewing hours obtained by such stations. Estimate is based on A. C. Nielsen Co., Nielsen National TV Ratings, nera examination of FCC data for 1974 indicates that the 28 percent figure is almost certainly low and its basis open to question. Since the main thrust of the TPT proposal is imposition of copyright liability only on non-network distant signals, at the very least a more logical figure would be 31 percent, the ratio of non-network program expense to non-network total broadcast revenues. Indeed, it would appear perhaps even more appropriate to use a figure of 37 percent, based on nonnetwork net broadcast revenues, which adjusts for various commissions and cash discounts. Clearly, these alternatives to TPT's 28 percent would yield greater copyright liability. The relevant FCC data are summarized in Table I. A final comment is appropriate on this point. The TPT proposal characterizes its use of the program expense/ revenue ratio as "extremely generous" given broadcasters' use of scarce spectrum space at no cost to them. To be sure, there may be some merit to TPT's position, insofar as broadcasters ordinarily are not charged directly for allocated channels. Nevertheless, TPT apparently overlooks the not inconsiderable effort and expense required to ascertain community needs and interests, maintain public records, monitor compliance with the fairness and equal time provisions of FCC rules and regulations, etc., pursuant to the continued grant of a license to operate on an allocated channel. In addition, without presuming to speak for the broadcasters on this issue, examination of FCC data for 1974 shows that the cable industry nera -5 currently has available for use programming valued at $736 million at the TV station level, and $1.884 billion' for the whole broadcast industry (including networks). The bulk of this programming is retransmitted by the cable industry "at no cost to them." V. VALUATION OF SIGNALS OR "POPULARITY" The As The (C) component of TPT's formula attempts a valuation of the "copyright qualifying" distant signals used by cable systems. TPT uses 8 percent in its illustration. device employed by the TPT proposal is a "popularity" measurement of the signals. This "popularity" measurement would be applicable to the county or counties in which cable systems are located, "expressed as a market share percentage." stated in TPT's redraft of the statute, "the 'market share' of each 'copyright qualifying broadcast station'... shall be derived by...dividing the total number of viewer hours credited to the... station with respect to the county...in which the cable system is located by the total number of viewer hours credited to all stations...in such county...." Since TPT uses the "popularity" of copyright qualifying signals in its determination of cable system copyright liability, it appears inconsistent to measure that "popularity" in "total 1 Network 1974 program expenses were $1.148 billion. (Fed- n/e/r/a -6 county" households rather than "popularity" in CATV households only. The use of TPT's measure of "popularity" could tend to understate "popularity" among cable viewers and, thus, to understate the system's copyright liability. Although TPT's contention that these data are now being collected by the national rating services is technically The ultimate effect of TPT's proposal is very n/e/r/a -7 to the full base of the cable industry's basic service revenues, and which is structured incrementally to impact more heavily on the larger systems. Before turning to an examination of the TPT proposal in application to its systems, it is appropriate to review the effect of the H. R. 2223 fee schedule on TPT cable systems. VI. COPYRIGHT FEE IMPACT OF H.R. 2223 ON TELEPROMPTER SYSTEMS TPT cable television systems for which data on subscribers 2 Including those in which TPT has an interest of at least 50 percent. n/e/r/a |