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*le buy cable systems having gross rerentes in excess of $160,00, NBC would favor a formula that was certain in application and inexpensive. For example, the Ihmisilik fi* payable by the larger cable sistems could be computed by multiply. IPK TIR receipts from subscribers by the percentage of total network and Porudesting retrtiue Njent on network and lexal riation programmink costs.

Drop the reasons set forth above, we oppose the prowals of Teleprompter and arge that the compulsory licensing fees be reised to reflect the economic value oli suurkliert* to cable orators,

We appreciate this opportunity to present our views to the Sul committee

THE NATIONAL ( OIATF ATITETIC ASSOCIATION,

Jismon, Kans. Votember 14, 1975, Congressman RomaT KATT MEIER, 1 x Hus of Representatives, Rayburn House Office Building. Washington, DC,

Than ('ONGRIX VAN KA TENIR I hare your letter of November 4, 1975, in. sting me to comment on hall of the National Collegiate Athletic A mintion on amendments propri by Teleprompter l'orporation to the royalty provisions

Tie injury to college and high whol athletie programs and the limitations oth the array of interrolle inte sports to broadcast teletion which results from widespread cable retrah mission of distant kimnls of interellegiate mort errnts, and of professional famoball telexns des rive by Nation 3 of Public las mi 331, cannot ive mitigated or adequately commented for by any royalty

The wolution to the problems which I die'llased in my testimony before the Wystutuittee on ('ourts, Civil L rtips and the Administration of Justice thunt lie in wife limitations on rahle aurringe of such arts events I le 1****sary 111. *atin mas be immed either directly by HR *23, or buy the Federal (one De sliratote (umumnadon pour unnt to an * | ** authorization in the bl Any Shanthorization would dirt the commission to take any aunt of (1) the 19.00:t of anble (arringe on attendano al current whewal college pirts, and

2. p il pile s pipra loy (oligrr* in Sertion 3 of Public lan #7 3:31 (0) pertatjats which the common hanfrently one akun refused to rewrite In its larritur ! arton den Tag #titatis fur ronsideration of its w lit rule Nakik Ngarding andledartini Afwirts f**ent brendkan

Tlv VAA and individual \'. A mnenbrittitutiots in collegiate netts do honeipt lase wtettial interest in the puyalty firoviniotin of the bill, 1.1 although, that interest flee in romani in with the Vll principal (ut.ru Pen1.sble retransmissions of marts pirts, it is suffernt lo ime me to Birry your invitation to ( ment on the merits of the Teleprompter tonata f]*** pro ! That proval i faulty in *semal **, in Indite the

i contrary to Teleprompter formation « assertion, it is neither lette al nor talleto pirtude duble sintom's retrat

e af sulle lol in the 1, of whl. h Telepromptet Muld take tu* pletely on ended) friville not, tant recurrents ('alla **tu al inta tih nikmalarid wil that at a print to suburrit Jant as they do in the case of stalind "distant nipis atid they should be ruirrelta j a ruunable totalty to the f rietat

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cable system of responsibility for any meaningful royalty mayment. It's therefore, that the Teleprompter ('orporation proposal should be rejerted by your subcommittee.

In closing I must reiterate that it is the NCAA's hope and urgent more!ba! you will propose an amendment to HR 2233 which will make provisie free trip imposition of limitations on cable retransmissions of sports events De ** protect high school and college athletic programs. Sincerely yours,

JOHN (or

...of viery with respect to a proposed alternativ
phoon po'ation of copyright royalty payments in H.R.
• Pin the primal only on its face and have not

pro me impact of the proposal on the cable ind
17W** a teties of the financial results of indivi
;- & as to thrir plans for the importation of dista

..the market share of such prograins, and the a
T r iptision systems.
b em me are able to conclude that the propose

deliminate the possibility of changes in the r
'1*"* tribunal, will have a more predictable effect
5. t of cable television systems. The eliminatio
come financing opportunities for such systems.

W moment in Mr. Wicks' testimony, however, any copy
S i ded in H.R. 223 will have a significant ad

**;. j 1 unt cable systems and must be regarded as
- more up their growth prospects.

f. 17oate this opportunity to make these comments
T

r id to in your letter.
Tety truly yours,

CHARLE
Counsel for Becker Commur

TELET
New York, N.Y.

NATIONAL CABLE TELEVISION A A147108

Washington, D.C., Voromber 14.1973, Hon. ROBERT W. KASTENMEIER, (hairman, Subcommittee on Courts, Ciril Liberties and the Administrator

Justice, Rayburn House Office Building, Washington, D.C. DEAR (ONGRESS MAN KASTENMEIER: This is in response to your letter of Viets ber 4. asking for our thoughts on the able television copy right pay the pas advanced by TelePrompt Ter Corporation for inclusion in HR 13.

As you know, NCTA has consistently expressed its willingness to cut bill which provides for a reasonable copyright payment for the carriage broadcast signals.

The key to NCTA's support of H.R. 2-3 is the phrase "reasonable pripa** as we stated in our testimony of June jo before your subcommittee In the as presently written a ('ATV systein would pas a programire Map of ** gross subscriber revenues from the basic reception service. The fee wbestile of in the bill would be subject to periodic review by a tribunal SOTA tribe : support of the payment plan but took strong exception to the tribunal arbitratia mechanism on the ground, among others, that this is an artitrary stem with at criteria or adequate review which is therefore fraught with datiger and usef tainty for the cable industry.

On the subject of the fee schedule itself. NOTA Arignized that HR . payment plan is based solely on gross rerenue. This approach distraards the lokal or distant source and the number of broadcast iguals carried kya (ITI system. From the standpoint of logic, NOTA has always been, and s . attracted to a concept of paring only for signals not normally respired in the community. Laxal signals are already present off-theair in the tim inity and the copyright owner has been momjensin for distribution of his prout le wise, a CATV system carrying one distant signal should not have to pay as the as a ('ATV system carrying five distant signals. We have heptofore the way to formulate a fnir method of apportioning payment alons such lokal signal versiis distant signal lines,

TeleprompTer has submitted a new method of calculating a CAT uro.
cp right liability. It is based on payment solely for each diutant sigual atte
a concept which, as indicated above, apars to be logically mond tot teda
further review, Rather than the usual arbitrary assumptions found in wet
payment plans, this propwal attempts to track market place fartar in min, a!
ing the form to be pud by a CATV sistein. The built-in features of the plan w
to proride guertainable standards for tribunal fee resiew. This NOT * *'.
ing the plan and we are presently engaged in a thorough statistkalardan be
analisis of all of its fucp* We will tre happy to provide your tastiera
our findings when our reserch has two cumpleted
Sincerely,

Rex A. HRANIT
Chairman of the Board

delar TKASTET VEIER,
No 84 Hiss Judinary Subcommittee on ('ourts, ('

munetration of Justice, Rayburn Building, Washing
PER MILCHAIRWAX: We are taking this opportunity
**'; prerionsly submitted to your Committee,
smisar, we wuld like to address the criticism tha

W trongly believe that this criticism is unjust toge b oula is not in fact complicated. It involve * **of which depend upon data which is eith

1. my mained. Attached hereto is an example, P ortir formula works.

si mimits of H.R. 22:23 as it no's stands is Math in H.R. 223 required periodic adjus

- almost certainly ensures periodic litiga * * Haber Hou of Congress overrode a deter A 12 +1'ptiply unertain and difficult situation wou

A formula of H.R. 2223 is deceptive for ano mi ris ) guidance as to how to distribute the

ils Nation 111idi (311 ) rather wistfull
1! (fearization will develop to remedy this om
I 'llop all copyright owners do not join the sa
'

in the case of ASCAP, some meml
utilized is the organization is unfair?
u nt hill gives absolutely no guidance

in the absence of agreement among

make the tre distribution) should perform i
* I ntwu.al will use, as do ASCAP and BMI
&

prugrams as the basis for distribution.
.. . it would not relate the payment recei

1:1 m ld not solre the problem since it
testral matrikersy will once again erupt--this ti
*

* That is copsright owners whose p
Los

dort stations will object to sharing the
****** ** s me priigrams are broadcast locally
*** ': 'be loval broadcast station has alre

* Nght owner for the local cable viewerst

MAYOR, Buss & PLAT?

IT odlington, DC Votember 1312 Mr Rog NT T KAMTIMI #. (hairman, Nommittee on ('ourt ( The rise and f inis***4*

Justiner, committee on the Judgetary. I«***r" of Representatore, Hoy! ..

DAR MR. KANTTMIX Mr Thuid o Wick, Jr. of Berche (*. cu% t

iatas, has asked me to tend to your letter of Voremtr 1. wil, intit!

A

a submission of views with respect to a proposed alternative method of dealing with the computation of copyright royalty payments in II.R. 2023. We have been able to review the proposal only on its face and have not been able to project the actual economic impact of the proposal on the cable industry. Such a study would involve a review of the financial results of individual companies and information as to their plans for the importation of distant non-network programming, the market share of such programs, and the average programming cost of cable television systeins.

Nevertheless, we are able to conclude that the proposed alternative, to the extent it would eliminate the possibility of changes in the royalty rate by action of a copyright tribunal, will have a more predictable effect upon the operations and profitability of cable television systems. The elimination of this uncertainty should improve financing opportunities for such systems.

As noted in Mr. Wicks' testimony, however, any copyright royalty of the magnitude provided in ILR. 2223 will have a significant adverse effect upon the profitability of most cable systems and must be regarded as having a potentially inhibiting impact upon their growth prospects.

We appreciate this opportunity to make these comments upon the alternative proposal referred to in your letter. Very truly yours,

CHARLES W. PETTY, Jr., Counsel for Becker Communications Associates.

TELEPROMPTER CORP.,

New York, N.Y., November 14, 1975. Hon. ROBERT W. KASTENMEIER, Chairman, House Judiciary Subcommittee on Courts. Ciril Liberties and the

Administration of Justice, Rayburn Building, Washington, D.C. DEAR MR. CHAIRMAN: We are taking this opportunity to amplify the copy. right proposal we previously submitted to your committee.

In particular, we would like to address the criticism that our formula is overly complex. We strongly believe that this criticism is unjustified for two reasons :

Pirst, the formula is not in fact complicated. It involves only two simple calculations, both of which depend upon data which is either readily available or can be easily obtained. Attached hereto is an example, using one of our own systems, of how our formula works,

Serond, the simplicity of H.R. 2223 as it now stands is deceptive. The simple formula contained in H.R. 2223 required periodic adjustment from a Royalty Tribunal--which almost certainly ensures periodic litigation. Then, too, if for some reason either House of Congress overrode a determination made by the Tribunal an extremely uncertain and difficult situation would exist.

The simple formula of H.R. 2223 is deceptive for another reason as well-it gives absolutely no guidance as to how to distribute the royalty payments. The present bill (in Section 111(d) (3) ()) rather wistfully contemplates that an ASCAP-like organization will develop to remedy this omission. But what if one does not? Or if all copyright owners do not join the same organization? Or if, as in fact happened in the case of ASCAP, some members claim that the distribution scheme utilized by the organization is unfair?

Moreover, the present bill gives absolutely no guidance as to how the Royalty Tribunal (which in the absence of agreement among the claimants will be required to make the fee distribution) should perform its distribution function. Probably the tribunal will use, as do ASCAP and BMI, the relative popularity of copyrighted programs as the basis for distribution. Any other result would be absurd since it would not relate the payment received to the value of the work created.

This, however, would not solve the problem since it is likely that the local. distant signal controversy will once again erupt—this time among the copyright owner claimants. That is, copyright owners whose programs are carried on imported independent stations will object to sharing the cable royalties with the copyright owners whose programs are broadcast locally on the perfectly reason. able ground that the local broadcast station has already adequately compen. sated the copyright owner for the local cable viewership. Perfectly reasonable,

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to be surebut how is the tribunal to respond when the argument runs ac to the entire philosophy of H.R. 2223?

We believe that our proposal would give the statutory guidance party solve these distribution problems. First, of course, because it adopts it." local-distant (as well as network-non-network) distinction, it immediatr.. the question of who are the proper claimants. Second, because the ) itself based on the popularity of the imported programming It is mia ? consistent with what we envision will necessarily have to be the mechant the distribution arrangement.

We also wish to address the question of whether Teleprompter's forer's advantages smaller, rural systems in favor of larger urban systems the is right now doing a complete analysis of this matter and will be able your committee a definite answer to this question in a short time. For D T merely observe that this problem, if it exists, can easily be remedied ! ale ing an exclusion which would be applicable only to small independecily v*:* systems. Such a proposal would have only a minimal impact on the tot2.59 right fees collected from the cable industry but would go far toward *. * the support of the small independent operators. Very truly yours,

RURSUL KAD Erample

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Teleprompter's system in Farmington, New Mexico had revenue of in 1974. The system, which is located in San Juan County, New Mexic, 103opet the following distant independent television stations which received the proper tive market shares indicated below:

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Station :

KTTV. KCOP. KHJ. KTLA KNME

KTLA KTTV

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Total We have proposed that copyright liability be determined by the folks : formula :

Subscriber revenues X percentage of revenues which broadcast stations e t on programming X popularity of imported independent and Dobbelwerk fute gramming as expressed as a market share percentage.

Applying the Farmington data to our formula (and assuming that all brukes cast stations spend 2 perrent of their revenues for programming is '' in a pyright fee of $14,199.41 (2.5% of subscriber revenues). This may be derived as follows:

$563,072 X 26 X 9 =$14,189 41

APPENDIX 2 Sha di 2 consists of the 18 briefing papers submitted by t

bila terred to in the testimony of the Register of Copyrigh

"

..

Ile whould be remembered that rural system. which are able to wort say stations are often much more pofitable than the larrrr urban ari T. " Manhattan and Los Angeles #stetaan kost $11.330 00 IR 1974 wllte mal of # PID) were extremely profitable

b ells01018 the first $100 (W) of mystem prennes from a pyright Man* We have all scheda page from Wellson which shows the market domes wi

t stations in San Jinn County

• We have attache a ty of the F . summartuation of the Form 1.4 Alrd from which the 2% perirnt agurt in derived

1986

in Para os CURRENT ISSUES RAISED BY H.R. 2223, *** Nite **** miefing paper in folders 2-19 included in thi ..! practical guidance of the members of the House

ve Te! sole purpose is to pinpoint issues and to provide ba:**Le way the bill deals with those issues. The papers a

* 1 forte suminary of the contents of the bill or as a the

p e retical basis, or construction of particular p
***' satt metulers of the Copyright Office, listed
sa mer, uted to the compilation, writing, editing and

Anna Banana Acosta, Catherine Armstrong, Gloria Jean
#ina Davis, Carol Duling. Lewis Flacks, Marybeth
t aa. Landa Hutterly, Dennis Jeffries, John Kent

Mary Middleton, Stephen Plichta, Rachel Ray, Barb:

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APPENDIX 2 This appendix 2 consists of the 18 briefing papers submitted by the Copyright Othce and referred to in the testimony of the Register of Copyrights on May 7, 1973.

BRIEFING PAPERS ON CURRENT ISSUES RAISED BY H.R. 2223, MAY 7, 1975

Introductory note

The collection of briefing papers in folders 2--19 included in this portfolio are intended for the practical guidance of the members of the House Judiciary Subcomunittee. Their sole purpose is to pinpoint issues and to provide general information about the way the bill deals with those issues. The papers are not intended either as a complete summary of the contents of the bill or as a thorough analysis of the history, theoretical basis, or construction of particular provisions.

The following staff members of the Copyright Othce, listed in alphabetical order, have contributed to the compilation, writing, editing and preparation of this material : Barbara Acosta, ('atherine Armstrong, Gloria Jean Burke, Sharon Butler, Wilma Davis, Carol Duling. Lewis Flacks, Marybeth Peters Gingery, James Hanavan, Linda Hutterly, Dennis Jeffries, John Kent Dunlap, Kevin Maricle, Mary Middleton, Stephen Plichta, Rachel Ray, Barbara Ringer, and Dorothy Schrader.

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