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It is the opinion of Commissioner Edward Ray that the Tribunal should utilize the services of a part-time or outside economist, only as needed. Commissioner Ray supports the recent Tribunal opinion in its FY 86 Budget request that there is currently an insufficient need for a permanent full-time economist. He believes the Tribunal's employment of a general counsel and its utilization of a part-time economist will be responsive to Congress's 'concern for improved Tribunal determinations as well as to its concern for a substantial reduction in the current budget deficit.

c. REFERENCE, RESEARCH AND ARCHIVE MATERIALS

We have recently updated our library reference books and trade periodicals file. We have increased our number of trade periodicals with 5-10 free subscriptions. We have approached those 10 periodicals for which we pay and asked for gratis subscriptions. Most have complied.

We have compiled an archive of our legislative, budget and oversight hearings, we hope to compile law review articles concerning our Tribunal and similar foreign tribunals for research and reference.

We hope to reorganize and systematize our master case files. We have instituted a program of utilizing legal externs (students on a voluntary basis) to assist in these projects. They should begin this June.

We have recently collected all our cable distribution and rate determinations and the appellate decisions for publication by Shepard-McGraw-Hill as an appendix to a comprehensive work on cable TV, by Ira Stein of Falcon Cable, Inc. He has asked Chairman Hall to write the preface.

We have provided the general counsel of the Copyright Office with complete and indexed book

of all our determinations and appellate decisions with the hope that they will be incorporated in their series, Copyright Decisions. 5. STATUS OF PROCEEDINGS

A. CURRENT CALENDAR - ADJUDICATION (DISTRIBUTION)

The Tribunal's adjudication proceedings consist of the yearly distribution of cable television and jukebox royalties which are deposited with the Licensing Division of the Copyright Office. Full fees for any given year are deposited after the close of that year. Copyright owner's claims for these fees are filed with the Tribunal during the following year, therefore, the Tribunal's distribution proceedings run approximately two years behind. In fy 85, the Tribunal will determine distribution on 1983 cable royalty fees and 1983 jukebox royalty fees. A controversy has been declared in both and pretrial conferences have been held. We anticipate 20-30 hearing days collectively.

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The major issue in the 1983 cable distribution of approsimately $80 million dollars will be the distribution of those funds collected through the syndicated exclusivity surcharge. This is the first year of said collection. The major issue in the 1983 jukebox distribution will be the Tribunal's precedent for burden of proof requirements of the non-settling petitioner. This issue is currently on appeal in the 2nd Circuit for the 1982 jukebox distribution.

B. CURRENT CALENDAR RULEMAKING (RATE-SETTING)

On a yearly basis, and pursuant to s118 of Title 17, the Tribunal announces a cost of living adjustment to be applied to compulsory royalty rates paid by non-commercial broadcasting entities licensed to colleges and universities for the performance of musical compositions. The adjustment for FY 85 was determined on December 1984 to be 6.1% effective January 1, 1985. In 1987, the terms and rates for all public broadcasting entities will be reconsidered.

In 1985 the Tribunal can be petitioned to reconsider its royalty rates for cable retransmissions. The Tribunal was petitioned to make a cost of living adjustment for statutory distant signals. The proceeding was commenced by the Tribunal through informal rulemaking in March, 1985. The interested parties negotiated a settlement which the Tribunal put forth for public comment. A final rulemaking order will be published in the Federal Register in April or May, 1985.

The Tribunal was petitioned in March, 1985 by Turner Broadcasting Systems, Inc. to review the rate for distant signals which were deregulated by the FCC in 1980, as it applies to WTBS. The Tribunal expects to be petitioned by other parties and to commence a hearing later this year. We anticipate 20 - 30 days of hearings, extending into FY 86.

In FY 86, The Tribunal is not required to make any other adjustments the rates except for the yearly PBS rate discussed above. In FY 87, the Tribunal can be petitioned to reconsider the rates for making and distributing phonorecords.

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C. APPELLATE PROCEEDING

The Tribunal had published a final determination for 1979 cable royalty fees in March 1982, which determination was appealed in the U.S. Court of Appeals for the D.C. Circuit. (Christian Broadcasting Network v. CRT, 720 F.2d 1295 (1983)). A decision was rendered on October 25, 1983. This decision affirmed the Tribunal's determination in all respects but three. The Appellate Court remanded the following issues:

1) National Association of Broadcasters (NAB) claim of part of the Joint Sports share,

2)

Devotional claimant's zero award in the Phase I proceeding,

3)

Commercial radio's zero award in the Phase I proceed

ing.

The Tribunal accepted a voluntary agreement in lieu of reconsidering the NAB claim and accepted evidence on the other two remand issues. Upon reconsideration, the Tribunal granted the Devotionals .35% of the Phase I fund. This was a result of reevaluating some of the evidence and apportioning different weight to the criteria of benefit and harm.

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The Tribunal reconsidered and again denied award to commercial radio, but offered a clearer explanation. The Tribunal acknowledged that the claim was justified but asserted it was unquantifiable. The Tribunal stated it was unable to discern a marketplace value for the de minimis input of the nonmusic portion of commercial radio.

The determination of these remand issues was published on January 20, 1984. It has been appealed. The Justice Department is representing the Tribunal.

On March 7, 1983, the Tribunal rendered a final determination on the 1980 cable royalty fees which was also appealed in 0.s. Court of Appeals for the D.C. Circuit. On February 9, 1984, upon receiving the 1979 remand decision, the Tribunal moved the court to remand the 1980 case consistent with the 1979 opinion. The motion was granted.

Upon reconsideration, the 1979 remand decision was adopted for the 1980 cable royalty determination with the exception that the distribution of the Devotionals' share be pro rata shared among all Phase I claimants as opposed to the MPAA absorbing the full impact of the Devotionals' share as was done in the 1979 remand. This reconsideration is likewise on appeal.

In FY 83, the Tribunal accepted a negotiated agreement on the 1981 cable royalty distribution. The determination rendered on February 28, 1984. Said determination also adopts the 1979 determination and is likewise awaiting the decision on the appeal of the remand.

In FY 84, the Tribunal declared a controversy and conducted hearings on the 1982 cable royalty distribution. A determination was rendered in September 25, 1984. This determination has been appealed and has been consolidated with the 1979-81 remand appeals. Oral argument is set for May 6, 1985.

In FY 84, the Tribunal accepted a negotiated agreement on the 1982 jukebox distribution. This has been appealed in the 2 nd Circuit Court of Appeals. The oral argument was heard in February, 1985. We are awaiting a decision. 6. PUBLIC RELATIONS

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We anticipate major substantive, procedural and possibly legislative reforms of the Tribunal during FY85-86. We are and will continue to solicit public comment on all aspects. addition we hope to keep the public informed through press re

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leases and the public information office of the Licensing Division of the Copyright Office, who have been most supportive and helpful. We intend to work with them to produce a brochure on the Tribunal to supplement our public inquiry letters.

We have recently met with prominent personalities, Congress and other federal agencies such as FCC, Justice, OTA, CSR, and Copyright Office and many emminent copyright attorneys and trade representatives for the purpose of introducing this new Tribunal and establishing liaisons, including being placed on many mailing lists. Almost all visits resulted in support and encouragement for the initiatives this Tribunal has undertaken.

7. CONSULTATIONS

A. INTERNATIONAL - CHINA, CANADA

The Tribunal has conferred with Dr. Yang, a member of the Copyright Law Revision Committee, Ministry of Interior, Republic of China as to the feasibility of a Tribunal for his country. The Tribunal is currently consulting with Richard Beaird of NTIĀ with regard to possible legislative

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negotiated solutions to Canada's lack of cable copyright reimbursement to u.s. copyright owners. We expect to be called on again as the cable copyright problem reaches more countries. That is why we hope to compile the research materials explained earlier.

The United States has always led the world in the production of entertainment. The U.S. Copyright Royalty Tribunal should lead the world in the resolution of the very difficult legal and economic problems incumbent in the delivery of entertainment to the people.

B. DOMESTIC - OTA, LEGISLATION

We have consulted on several occasions with the Office of Technology Assessment on their study of intellectual property requested by Congressmen Rodino, Kastenmeier, Moorhead, Fish and Senator Mathias. We remain available and await the results.

Chairman Hall has recently sent possible draft legislation for a reintroduction of H.R. 6164 to House counsel Mike Remington. Chairman Hall's submission is intended to provide only her opinion with the hope that the subcommittee will apply its vast wisdom and experience in this area, to correct and conform this draft to the policy objectives of our Congress.

Commissioner Ray and Commissioner Aguero will be sending his opinions to the subcommittee at a later date.

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