clubs in the same league without the home club's consent is a necessary protection to ensure the continued viability of the NHL and its clubs. Such a provision is in the Senate bill, S. 2172. The NHL believes that the present compulsory license system, under which cable operators may expropriate games played on free television without the consent of any of the affected parties is harmful to sports, anticompetitive, and no longer warranted in today's cable television market. A fifty-mile protection is a reasonable legislative solution that offers limited protection to sports without materially affecting cable systems and fans. National Hockey League clubs presently rely upon two primary revenue sources, neither of which is alone sufficient to maintain a viable hockey club in today's economy. The first is fan attendance through the live home gate. The second is the logical extension of the home gate revenue derived from local television contracts - in the team's home area. The continued unfettered telecasting by cable television of hockey games into a team's home area at any time, without regard for the effect on these two revenue sources, will cause serious harm to the clubs and the league. National Hockey League clubs play on the average to roughly 80 percent capacity in their arenas. This is the primary source the clubs have to generate income in order to pay their players' salaries and other expenses. Unfortunately, NHL clubs have no protection from the importation of over three-hundred regular season NHL games that are televised and retransmitted to distant cable systems, both regionally and nationally, often in direct Both Congress and the courts have concluded that sports leagues have a right to restrict the broadcasting of league games into the home territory of a member team when that club is playing at home. Both Congress and the courts have recognized the resulting harm such competing telecasts may cause with respect to attendance and have placed limits on such broadcasts. The NHL believes the restrictions it proposes, similar to those now placed on broadcasters, should be applied to cable television systems. The second harmful aspect of distant signal importations of hockey games is the effect such retransmitting has upon actual and potential local television revenues. The value of a local television hockey package is substantially reduced by the ability of a cable system to import other games in direct competition with the local package at a fraction of the cost the local broadcaster pays. If an NHL club is unable to deliver an exclusive television right to hockey games in an area, then the value of any package is diminished. This devalues the importance of the local television package not only from a revenue standpoint, but also from the standpoint of promoting the home club itself. Opponents of this protection maintain that professional sports should have to show tangible "harm" arising from the present compulsory license system as a basis for protective measures. The NHL believes that suggestion begs a key question. Why should the NHL, now enjoys under the system? Professional sports should enjoy the protections offered other forms of entertainment - the ability to control and sell its product in the open market for whatever some one is willing to pay. Opponents of the limited protections sought by sports argue it would be "anti-competitive." present system, which permits a cable system to use professional games for a mere token payment, that is anti-competitive. Elimia ting the compulsory license system would put competition back into the present structure by requiring cable systems to negotiate for the use of our product, just as they must do with other entertainment. Hitherto cable television has been permitted to rebroadcast distant signals into a club's home area for virtually nothing. Whatever public policy may have formerly justified such permission has vanished. Compulsory licensing is an idea whose time has gone. Cable systems are now able and should now be required to negotiate in the market place for the right to broadcast sports events. cable industry is no longer an orphan requiring federal protection. It is full grown and fully adopted by such large conglomerates as American Express, Warner Communications, Westinghouse, and others. Mr. Bernard Wunder, Jr., the Assistant Secretary for Communications The Cable television enjoyed a year of subtantial growth and achievement in 1981. The number of cable subscribers rose about 2.4 million, or about 60 percent more than just five years ago. Basic cable revenues were about $2 billion; pay cable revenues, derived from about 11 million subscribers, topped $1 billion. Not only was 1981 thus something of a banner year for the cable television business, but most expect the same to be true in 1982. Our forecasts call for an increase in the number of subscribers of about 2.1 million, and an increase in revenues of about $500 million. By 1986, we expect the number of cable sub- Mr. Wunder and Mr. Fowler, Chairman of the FCC, both testified before this House Subcommittee in support of eliminating the compulsory license system. Cable television has come of age and the law should reflect the fact. It is more than inequitable to require a sports club, particularly hockey clubs, often marginally profitable, to continue to subsidize these large and still growing corporations. The NHL believes the compulsory license cable presently enjoys should be abandoned and the free market allowed to prevail. The league urges the Committee's support of the limited protection sought by sports. This would restore some balance to the relationship of cable television and sports. Thank you very much. Cable Television James P. Mooney June 2, 1982 The Honorable Timothy E. Wirth Subcommittee on Telecommunications, Dear Mr. Chairman: As you may know, the National Religious Broadcasters organization is engaged in a major effort to persuade the Committee on Energy and Commerce to amend the "must carry" provisions of H.R. 5949, the cable copyright bill reported by the Judiciary Committee. The bill, which is now pending before Commerce, would (among other things) enact the FCC's requirement that cable systems carry the signals of local broadcasters free of charge. As aprt of the general compromise between the broadcasting and cable industries which the bill represents, however, smaller capacity cable systems would be relieved of the current requirement that they dedicate channel capacity to television broadcast signals watched by very few people. Thus a cable operator required to carry a given broadcast signal would be relieved of this obligation if the signal in question attracted an audience share smaller than 1% of the noncable households in a given county and less than 2% of all television households in that county. We believe this kind of flexibility is absolutely necessary to lend even a minimum degree of equity to the must carry rules. Cable operators historically have opposed must carry rules in any form as unjustified seizures of private property for the economic benefit of broadcasters. Moreover, as Bob Johnson of Black Entertainment Television has argued, the ̈ must carry rules often result in program offerings such as BET being squeezed out in favor of broadcast signals intended to serve nearby but noncontiguous markets. Our industry agreed to the enactment of must carry rules in this bill only on the condition that our smaller capacity systems be afforded relief from mandatory carriage of signals virtually nobody watches. We appreciate that some broadcasters, including religious broadcasters, will experience loss of mandatory carriage in given counties as a consequence of their NATIONAL CABLE TELEVISION ASSOCIATION • 1724 MASSACHUSETTS AVENUE, N.W. • WASHINGTON, D.C. 20038 • (202) 775-3560 |