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spyp trpe of exclusivity is syndicated exclusivity, where a

on ha- purchased the right to a particular movie or pro::*ation has the right to prevent us from showing that same * Birti it's imported from another signal, even though he may

one to fix that amount. Isn't it better at all times to have the ote mination made by a tribunal who can listen to the arguments ar 'k! sides, a tribunal who can conduct an investigation of the final cumstances of the parties involved, and make a reasonable des 16. based upon the circumstances as they come up from time to us!

Mr. BRIDLEY. In a setting of rate by a tribunal, in addition to l' uncertainty that worries us, there would be some pretty muti ai! pressures brought to bear by some of our opponents in this world –

Mr. Badinia). There are no pressure brought on ('ongre, I gatuar
Mr. BRADLEY. I know that, sir. (Laughter.]

But, there are more of you, and we have great confidence in your ability to set the rate.

Mr. Badilio. I have no further questions.
Mr. KASTENMEIER. The gentleman from New York, Mr. Patt:

Mr. Parrison. Relative to this exemption, this $100MM TING come exemption, isn't it true that that exemption, if enacted, so.1 cover most of the rural stations which pick something out of th .1. don't import very much by microwave and other means, and arr pri marily the people you can make the beat argument about that ! not pay copyright fees, as opposed to the local person who p.Athe CATV who pick: local signals off the air, and where you are a rra sonably good signal anyway?

Mr. BRADLEY. Yes. This 100,000 figure would-in round number exempt items that have 1.300 subsribers or less, small sistem that have 2.000, or so. But, at least that takes care of the very small one. the one that is rendering a master antenna system type of sluir silla the pure sense

Mr. PATTINON. IIow would you handle the problem where to: $100,000) exemption would provide an incentive to small - -bir syutems, for that matter to become a cries of all the

In other words, you take a situation where you have a varels of Sistems in the suburts that are all arved by one head and 11. I am owned by the same company, but could be owned bv diden af companies !

Mr. BRADLFY. I believe the bill now has a definition of mi" ir it, that would prevent that. That definition includes all the ana sini by one head-end of a cable ratem.

Mr. PATTINON. But there could be a breakpoint where a syfem could say, "Well, it's better to metall a couple of other head-t a ! get the exemption."

Mr. BRADLY. I believe that the cont of installing head end ... 1 prevent that, braus its subratantial.

Mr. Pirtis IN, OK. Now, another subject. You talk about the bisa ont of the nonduplication rule. When you blach out a distant !!!! cau a lewal putem has that partinlar program on, can you lala? broadcast that partsular program? What in the practie!

Mr. BRADLY. No. We cannot rebroad at it. When a program 15 wine bached out, in all but one ana of the country it back , simultaneously with the broadcast which the viewer will . lut. this has to do with the network exclusivity. There are two tofan of bilgi Å outs One I just mentioned in twork, when an imported net mork al is now the Nin promam as the lonal matin. Ju blink out the imported one and show the lowalone,

**--». Would you elaborate a little on that, I missed that.

'iter les sir. When television stations buy program rights
1 foto ar movie, or syndicated program, they frequently have

..pirtin that area. That exclusive right exists even though
Idi 964 have shown that program; and it conceivably even
: :"-1 may never show that program.
Trasle program being imported from a distance cannot be

1:37exclusivity rule. WP73, Iny time! HALOT. Any time during the period of the contract arrange.

. Will the gentleman yield? WPTix. Yes, W 1.21.0 5. How would vou prevent this? If it's coming in by 2. Pronave, how do you black out this program!

* Pass. I think it's done by notification. The local station and statist local CATV and says, “We have bought Bambi VINNIIN . Or "I Love Lucy," WPow. But "Bambi" is more likely. (Laughter.] inst wanted to buy "Deep Throat“ -[Laughter.] And then Et it. I guess Dopgated in what your proposal is, that you really eliminate

V

ration rules if we passed the copyright law.

1 Yes ir. * PASTE. Sow, the normal argument, transmission or com.::argument about that--without regard to copyright

Bipa Ty erious effect on the local transmission, the fracsist of the local market. Particularly it would effect, foi INI: Daw programs that are produced locally. That is just **** stling that is produced locally by local affiliates be

'!for Dollars" thing they have in the morning. The rondofi loval affiliate is really in producing news, and that's 11. urteit! M . Vissir; that is essentially correct. V Prix W1l, wouldn't there be a communications effectm i' opright effect--wouldn't there be a communication *.* ! fat, the nonduplication rule were eliminated so you can "Y!!. while the local news program is on? Wouldn't tha i j os pito al advertiser that usually sponsors local news MIX:41. If I uiderstand your question correctly--and I hop ..!.is ituriy no prohibition against bringing in program 1203, mp3: «I.l, or other nature, which compete with the loci

W 1 11. All certainly, I would admit that if the local new # B ****ytive to the eyes of a viewer as something else, he

The other type of exclusivity is syndicated exclusivity, where a teleision station ha- purchased the right to a particular move or promam. That station has the right to present us from showing that same program when it's imported from another signal, even though he may met haleshown it.

Mr. PATTINON. Would you elaborate a little on that, I missed that. Jr. Bradu.Y. Yes, sir. When television stations buy program rights to a particular movie', or syndicated program, they frequently have an X!"-11e right in that area. That excluse right existspien though they may not have shown that program; and it conceivably even eX if they may never hon that program.

S), that same program being imported from a distance cannot be shown under the c usuty rule.

Mr. Patrims. Any time!
Mr. Brabu..Y. Any time during the period of the contract arrange-

Mr. DANIELSON. Will the gentleman yield!
Mr. Patrikox. YP.

Mr. DANIELSON. Ilow would you prevent this! If it's coming in by cai.!r, or microwave, how do you black out this program!

Mr. Piring. I thank it done by notification. The local station lid» notified the local CITV and ville have bought Bainbi

Mr. DANIELOW. Or "I Love Lucy."
Mr. Partinox, But “Bambı"js more likely. (Laughter.]

I know you wanted to buy "Deep Throat" (laughter. And then the can't show it, I guess

I'm interested in what your propowal is, that you really eliminato the nonduplication rule, niwe prawid the copyright law.

Mr. BRADITI. Yes, str.

Mr. Pirminin. Jow, the normal argument, transmmon or communications argument about that - without regard to coprnight . wo! I have any p11011* cert on the local tan

m eton, the frame. tomation of the local marhrt. Particularly it would tert, for intaner, the pes programs that air produced locaily. Ilunt la junt alwett only thing that is prexual lexully by lexal athiintes te sit the *Dialing for Ibollarne thing they hase in the morning lhe whole sort of the local attentrally in prowing new and that's

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: wed statement of Rex Bradley, and suggested amend-
.. li R. 23 follow :)

,XIV; OF REX A. BRADLEY, CHAIRMAN, NATIONAL CABLE TELEVISION

ASSOCIATION

ID R-1 Brades, I am Chairman of the Board of the National Cable

- Lomad, it and also President of TeleCable Corp., Norfolk, Va., owner
. .! 15 male television systems serving 130,000 subscribers in ten
!,- Vis to you in my capacity as Chairman of NCTA.
.. .de lervision Association is the major trade association rep-

:' !Prison industry. Our membership includes both multiple
I n independent CATV operators, as well as manufacturers

PA, of cable television equipment and services. NCTA's 1,320
. . Lily serve 5.8 million subscribers or 58% of the nation's

i ll: bolds.
I. , 1. iy appeared before this subcommittee to present our views

Prislation and also on the newsman's shield issue.
; e , nally interested in matters affecting the CATV industry
... and we thank you for the opportunity to appear before you

.."Prdel.berations,

I think there might be a beneficial effect in this type of competitor, it will sharpen up the local station so that he will make the new - foexte attractive.

Mr. Pattison. Well, my point is, if you are going to show a dupa cating program--not a news program, but “I Love Lucy," which is a duplicating program which will be precluded from showing dur! the local news time, I mean

Mr. BRADLEY. I understand now, I did not understand soit question.

Yes. The answer I gave. I guess, would apply here.

Mr. Patrisox. My point is, isn't that basically, fundamentalls, a matter of communications policy, as opposed to copyright pol. : couldn't we leave that to the FCC'!

In other words, we shouldn't be determining here in thin committee whether local news is going to be heard and therefore, all you get : Walter ('ronkite and John Chancellor, and the rest of the people. That is not really our area, and shouldn't that be left with the FCC'!

Mr. BRADLEY. Well, I think, sir, that your question poses a theort cal possibility. In our efforts throughout the years to determini af. instance of actual damage to a broadcaster we haven't found the first one; and we repeatedly asked for that. So, while there is some theoret ical possibility. I think it's probably not a very real one.

I think, too, that we have stood in the past on the position that if there is a demonstrated harm, we would like to know about it, as we are willing to talk about it and reason.

Mr. PirriNOX. I just have one other question, and that relates to the whole issue of translators, dealt with on page 19 of vour statement. I would junt like to have you enlighten us a little bit more about that I don't really understand the whole mechan.-m of that, hon that wo!

Mr. BradiFY. A translator is a repeating device that is estaliaci in areas where there are holidays in the signal of the broad. 1! station.

Mr. PATTINOX. And the translators are installed by whom!

Mr. BRADY. Well, they are various owned. In some ina! they are owned by the broadcasting ton. In other in animal!" are owned by a group of local citizens and in other instance by a government agency

Mr. Pirusin. Inil how down thist attest

Mr. BRADER. Well, our point there, ;* that the b:11 does not be anowis Popiaht labiini tooernment owned transion and we Uninst that this anno different from an y ely.

Mr. Pirmail. What would the sernment own a transistor for!
Mr. BHADHI. That would love a local government which wou.down

(Psale is limited and there are many groups to hear from, I., ' a de alied description of cable television, the nature of its serv

!cur rule we believe broadband cable communications will play
-

cummunications needs. I will be happy to submit this
::', Rru, 11 the committee so desires,
DOI: 1.Jaip that because of the complexity of the issues now under
.. .1' le of the potential impact on the public and the CATV
:. ! Do dne: ti ultimately taken by Congress on copyright law revision.

:: ?! pre into perspective some aspects of the history of cable

.

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og obye contact that we believe that copyright was conceived in the
- Assure that creative minds would be encouraged by

jur and distribute the fruits of that creativity. Copyright
..! as a hechanism to deny the public access to creative works.

**** I will discuss further our view of copyright and comment
w int deteloped in the late 1940's in Pennsylvania and Oregon

'n lama' service in response to commercial broadcasting's

'serie ourlying areas. Indeed, by bringing programming to mis viime would have received none, CATV performed a bene'..''Tagasier and the public.

usipom peririving that cable growth could result in addi. F .llik broadcasters for audience, began urging Congress and ang'ir growth.

f mid-'s and throughout the decade the FCC gradually . . . ,, ofer CATV operations. As is well known now. FCC

B 1. 1994 and 19 imposed a virtual six year freeze on expan' ' ha'ion's largest television markets where approximately

r. Det kated it. Third Report and Order? which was designed to
- Ilus pull of cable in the larger urban markets. Then FCC Chair

caracterized the plan as one designed to "integrate cable television
maathaal columnications structure."
and to the testimony (Appendix A) is a summary of those 1972 FC

as which have rightfully been called among the most complex rules an
a setet derised by the mind of man.
Din the PCOS ix year freeze cable growth did not halt completely. Oper
n e d to expand in areas where systems were already in operation an

ated areas of the country outside of the freeze zone. Also, more atter
des to providing additional services--for example, originating locs
y yer ins-on existing systeins.

-1975, there were approximately 3,240 cable systems serving nearl

curs in all 50 state. Nearly ten million American homes receive 1°1 Report 154 Order 38 FCC 2nd 143 (1972).

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Mr. PiTuinin. Onn, I spe's just to mprove the 'Tial for the low 11 people.

Mr. BRADI. Yim, T.
Mr. P inin. Or (III colloun a traitor.count !
Mr. Beant. I thrid I think thee Filodd prohibit of
Mr PITTINN.OK. I have no further allons
Mr.
K

M R. Vr Bry11). I want to t!.lik you on bwhalf of trottop for pottin!!butions morning, the ercellent presen tation of you !..on.

un in the

appro

(Tie prepared statement of Rex Bradley, and suglisted amend1..1-10 II.R. follow:

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A BRADY, ('HAIRMAX, NATIONAL (ABI E TFIEVINIOX

What Is RX Bradley, I am (hairman of the Board of the National ("able TI P*

* tion to all'esident of Trieable ('art. Varfrh. 1, onner * 15met of 15 white telesno tenim krilik 13416Ubu ribers in testa stars day I sk to you in my capacity as (hairman of NOTA.

1 \... tl ( 110, 111a1on I lution is the major trade a ntion r tul, thor 'le telefon industry Our metnlardpcludes both muliple a) "* 1 rutors and to findet (ATI rtuf, ** well as miatt.11.cturers ali ber w er of cable trenton uipment and rep* CIA 1 320 11. kamp wystę.." (artin'!) strie 3 million subscribers or jhar of the nation's

Ilhas prri101-11 wared before this loin mitte to print our views 16 klt teist lexislation and also on the new fun * seldisste

W art, of to , vitals interest in motor aferding tlir (AT) industry ard 11 to writers and we thank you for the afortunity to a ur before you al. 1 1*.t you in your de literat10

Vir (l.lrii, in 18p 1.11. in limited and there are many kronjes to hear from, word to potretat dr and desirabotata che trip 11, the nature of its seri. un and the future role ne se brendnd cable (ommunication will piny N 01.24*10* this fo.1 mmit to men will the trappy to subint this Il further teru, if thelatin

dito I rirr. I do their that truly of the culiarity of the funds to under C.1.:Jerlotand two of the fannt 11 italit on the public at the (IT) Ir tatry of the nin ultimately inkona by (outress on e rikht Inw prison, It is in order to my into

f

i ve me a ts of the history of cable rir, Yent. Iw:11 Put the ott**** the Mebles that a rhl W. (her in the l' I npTY to A sure that create and would be red by * * lot to porno maid tribute the fruit of that dirinti farisht wa fare un P114 A mura lani in to deny the follit all to arrive work la'. 111 1:3 ****plant I will do 11 month furtler ar ** * ***** TIKI 1.41 sent

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word' es efforts to work with Congress in arriving at fair and reason

nh..mung myself to specific provisions in HR 2223 I would like to
.. wipoal key factors which I believe this subcommittee and the Congress

hono arriving at fair copyright legislation for CATV.
:. .. provides for copyright protection to promote the progress of
Dr. Dre by giving authors and inventors exclusive right to the
- rativity for a limited period of time. However, the courts have

:> ! pyright protection has a two-fold purpose; to encourage
9 :30 promote the dissemination of knowledge to the public. It is
poja, aintain a balance between encouraging creativity through a lim-
..!! a'r the paramount interest of the public in unrestricted freedom

of others after authors have harvested their rewards. Conse, Thi! iegislation is not only for the benefit of the owner of a work.

jurtant, for the benefit of the public.

: it is important to keep in mind that cable television through its
1. nation of television broadcast signals, promotes the dissemina-
' Wielger to the public. Indeed, without this service, which is well-
...N 30 percentage of the population, significant numbers of Amer-
ii. Dend the fruits of creative labor. Congress should be cognizant

.CATV role Legislation which, for whatever reason, restricts or
- wetuluation of knowledge to the CATV public would not be con-
E N plary public interest concern of copyright.
Ob 'olem should be aware that imposition of copyright liability

on the (ATV subscribing public. As mentioned, those sub

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15 their ('ATV service. I am sure that members of this subIr On 1897 ion beard from CATV subscribers when those subscrib

maal terulations or law threatened them with loss of program14. ant extent the cost of copyright liability will be borne by cable

cable television service, or about 15 percent of the nation's television bogsebes Franchises have been granted in another 2,600 communities, but are botype ? ating. Applications are pending in approximately 1,00 additional committee

Subscriber fees for CATV service range from $4 to $11 monthly and are about $5.50 nationally.

The cable industry employs an estimated 23,000 men and women in manage ment, construction, engineering, programming, finance and marketing care

In that necessarily broad sketch of cable development I have purpompy cull ted reference to copyright. Let me briefly retrace my steps focusing of dr ! the copyright question has played in cable's development.

As cable growth continued, alarmed broadcasters charged that cable le. systems were engaged in “unfair competition when they carried programas out permission or payment. Those claims of unfair competition were judam tested and rejected in 1M4 by the 1.8. Court of Appeals in the Kh (inu.'

During this same period the first copyright suit was brought against tw1.177 systems by l'nited Artists ('orp. Later a second suit in which the issue wees beyond liability for simple reception was brought by ('BS. Primary do adverse rulings by the lower courts in the l'nited Artists case. NOTA D I committed itself to work for a legislative solution to the copyright prola: also undertook negotiations with representatives of the broadcasting and I picture industries. Words cannot really reflect the atmosphere in the cake vision industry following those adverse lower court rulings. The proper! W* simply one of total bankruptcy-turning the CATV industry loud, stock and barrel over to the motion picture industry.

In 1968 the Supreme ('ourt, reversing the lower courts, held in the 12. Artists' case that ('ATV was not liable for copyright in territik o bed. signals, Fire months later the FTC proposed and adopted as interim primuove "retransmission consent" rules which required (ATV to obtain perti .. broadcast stations and program owners to (arry broadcast programs the very thing which the Supreme Court had just ruled CATV did not need to do Sede to say, in the ensuing four years virtually no such consent was granted.

Negotiation between the cable and motion picture industries continund uß !! amount of copyright fees to be paid to copyright holders Then in 1971, LE 40 effort to break the regulatory impasse over cable, the Office of Teleritat. tions Policy and the Fi' fashioned the so called "('onerlius Agreement w.jef wlich the parties broadcasters, copyright owners, and cable affinued . for (ups right legislation and approved the outline for new Fronble regual, L Of course, the ('ongres was not a party to this agreement.

Subsuently the supreme ('ourt in 1974 ruled in (BS v. TelePrunup Ter'! cubie television systems were not liable for copyright for enrriage of any riad cat sikhain under the meaning of the 1919 law. Following that devijon bef" slifted to ('oneress and rehetori efforts to revise the law with, a fantast ) other things, provisions for cable television.

I have reviewed thesgo highlights in an effort to demonstrate the cutie 1. of the rule o riglie probleill, the intense pressure created for the one .B dustry by it, and the almost ihellricate interrelationship between copyright and calle regulation

During these bearing I am sure you will hear charges principalıy fra
broaden and motion picture representative to the effect that tlor a
trevisjon itduntry has to live up to its copyright respondilities Ilal 13
In unfnir e wtitor, and that the industry has attempted to delay resu
of tlie ( right issue

Wellatet i nord to engage in Who struck John" rhetoric in the bearings
can only way toall throughout this frustrating period .(TA has attempted in
Psori
W

i ble to live up to its fundamental contrat me nt to work for far
(forkli lisinl.on Trillation fair to all parties corred, fair to a y 1
de la llar A fair to top jornt and future ("ATV subscribing por
who IX. * r ) will the after test bos inusition of rupyright liability on al

I ne ter of this sulkutaittee tias Aware, there are divisjons within the ( A na-ri the issue of right m irlit Positions range froen tul l !! at all. to 11. lllully fur in merised off the air, and Down

1,' ferro polveret, of 121. uls that all framan ay lie defined as adequate Nike I wise. Hrver, that the majority of the members of WTA super

terul further observations on the current financial state of the Sonia taken several years, but an awareness is growing that CATV is

l as once thought to be. Last year, for example, nine of the

Juniper-companies who will bear a very sizeable percentage

en-uffered a combined net loss of nearly $17 million on ... !ni million.

g;.'ai intensive business. It is also a business whose expenses

1 . are fixed and subject to very little influence of the CATV "MAS Ip*sts are subject to the same inflationary pressures ex

- Do 1. rougbont the country, with the normal competitive in ,,. ML $113 tending to moderate the rate of increase. However, ir *

* Piperience a number of substantial expenses, whose levels .. o antitrarils by some authority not subject to the moderation 0. .. .o ra Sollie of these expenses are subject to change with little

... ! 11CATV operator to influence the level. Examples of these ar n

a pcharges, interest, franchise taxes, property taxes, and FC P

a hor pwnses are fixed, the only opportunity for cable opera

1.1.1 .1.in a favorable profit margin is through additional sul
o n Lo Tran subscriber rates (often difficult because city counc

d'uned.
... 2.1* related to these uncontrollable expenses make financis

1.l . diffrult and expensive. Appendix B contains furthe
- det, 06 the financial impact of copyright liability for cable.
have been in to the specific provisions of HR 2223. Chapter 8 of the bi

!!, first time a Copyright Royalty Tribunal in the Library

T T:: sal would be composed of three persons and would be en p o to adjust copyright royalty rates, the revenue base, and i

• A nna Be distribution of royalty fees. The Tribunal is directe **15

of royalty rates within six months of the date of enac
18 a nd is to be completed within 18 months. Thenceforth, tl

olevar a terlew every five years ad infinitum.
a neatr mised to the establishment of this Tribunal, and v

a sertion of the bill is laced with infirmities that represei

atral to the future viability of the cable television industry "Haring Dagal, 280 r 8. 123, 127 (1932).

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