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TO BE OR NOT When the big players—the cable industry, MPAA and broadcasters--can compromise their differences is not now known. Some deal makers have suggested cable might accept higher royalty fees in a trade for elimination of the must-carry rules. “'It's to early for details,” say Effros. “The industry is not yet united on what it wants in copyright.”

Meanwhile, back at the Tribunal, civil servant Hall indicates she expects to earn her pay ($66,700 a year) this year. "We will give everyone a full, a fair hearing. I feel my only goal is to seek a balancing of the equities."

Commissioner Ray says he expects 60 to 70 days of hearings.

As for the cable industry argument that the 3.75 percent rate has caused wholesale cancellation of distant signals by cable operators, thus defeating the Tribunal's objective of wider distribution and increased royalties to copyright owners, Hall says, "That will be the centerpost of the testimony."

Ray says the cable industry will need to substantiate that claim. "We don't have the staff to get those figures,” Ray declaims. "We welcome the testimony of MSOs and other cable companies besides the NCTA.”

Chairman Hall acknowledges that entertainment is big business in this country, and the copyright laws are intended in part to promote science and the arts "by securing the exclusive use for a period of time of the creations” of various artists or inventors. "I am not looking to bolster or project one industry or one side. “I look at the end result and I see a fine product coming out of Hollywood, out of New York, our of Nashville and this whole great country. I see more opportunity for young creators. . . and I see a more satisfied public than in any other country in the world. There is simply no comparison.

"I could not jeopardize or interfere with the internal business policies of this business," says Hall, and repeats:

"We are just a small cog in a very big wheel involving the dissemination of entertainment in this country.”

І пегIIICSale

1975

Broadcastingu Apr 29

The curious combination at the CRT

To reck link in implementation
.:.:. Copyright Act of 1976
ho lways been the Copyright
.., ry Tribunal, whose mission
n . qver been matched by resources;
this is the story of the three
Cu... nissioners now trying to keep up
The Copyright Act of 1976 placed much of
iss hope for marketplace justice in the Copy-
right Zoyalty Tribunal, a tiny—but increas-
ingly powerful-federal agency that deter-
mines how much cable operators pay for the
compulsory copyright license and how the
collected royalties—now amounting to tens
of millions of dollars a year—are split
among program producers and suppliers.
The incumbent clout is concentrated in the
hands of three individuals Chairman Mari-
anne Mie!c Hall and Commissioners Edward
W. Pay and Mario F. Aguero.

They're a curious combination. Hall, who joined the CRT last November, is a 34-yearold lawyer with a pronounced conservative

Aguero, Hall and Ray bent who has had more experience in teaching law than in practicing it. Ray, 58, who had measurable copyright experience, even committee, said, "If the cable industry is was appointed to the CRT in 1982 and who though the act's legislative history suggests going to get a fair shake, it will be through served as its chairman in 1983, is a soft that the President appoint "persons who have legislation and the courts.". spoker former record producer and distribu demonstrated professional competence in Three years ago, Senator Charles Mathias tor. And Aguero, 53, named a commissioner the field of copyright policy."

(R-Md.) told a group of broadcasters that the last Piay, is a Cuban immigrant and former Since its inception, the CRT has earned White House considers the CRT" useful New York businessman and producer of con little respect from the industries it affects, place to put some otherwise embarrassing certs, motion pictures and television shows. the Congress or the courts. That's attributed applications for jobs." And Robert Kasten

The thrze have at least one thing in com to a number of factors, including the inexpe- meier (D-Wis.), chairman of the House mon: All are staunch Republicans with rience of most of the commissioners, the Copyright Subcommittee, has written that enough of the right connections to secure a lack of staff and small budget (5722,000 this subcommittee believes the body is "in dire presidential appointment to the CRT-a sev year) and the absence of clear guidance from need of reform.". en-year job with a current annual salary of the Copyright Act.

Moreover, the U.S Court of Appeals in nearly $70,000.

The cable industry feels the CRT is inher- Washington has twice stated in upholding Only Hall joined the tribunal with any ently biased toward the copyright holders CRT decisions: "While we do not sanction kind of background in copyright matters. and seems to have given up all hope of get- (the quality of the CRT's explanation). We But that's not unusual. Indeed, during the ting what it considers "a fair shake" from it. have regarded (it) charitably in light of the Seven-year history of the CRT, only Hall and John Malone, president of Tele-Commyni- tribunal's lack of a professional staff and the Thomas Brennan, a former congressional cations Inc. and chairman of the National (relative) novelty of the proceeding. We exstaffer who helped draft the 1976 act, have Cable Television Association's copyright pect the quality of the tribunal's decision

making to improve with experience."

As the CRT is now constituted, Hall is the key player, not so much because she is current chairman, but because of her intention to improve the much-maligned agency by tightening up procedures, restructuring its organization and strengthening the soundness of its opinions.

Her interest in copyright goes back to the summer of 1977 when she worked as an intem at the Copyright Office of the Library of Congress, the agency that actually collects and disburses the cable copyright fees.

Since being graduated from Rutgers Law School in 1978, Hall has taught law, worked for several banks and has become involved with a number of right-wing groups.

Most of her teaching has been done * Northem Virginia Law School in Alexandria, Va., which Hall describes as a “small

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private school with a part-time program. Calls to the school, which is not accredited LPTV grame. FCC has tentatively granted low-power television applications of Mountain TV by the American Bar Association, are an Network for channels 52 and 54. Hazen, N.D.; 45 and 47. Hamilton, Mont.: 64, Malta, Mont; swered by a recording describing the school 55, 33, 31, 63, 67, 61.59 and 65, all Bonilla, S.D.; 60, 68, 62, 56, 64 and 58, all Chamberlain, as "the weekend-only law school," and of S.D.: 36, 44, 54 and 60, all Wishek, N.D.: 23, 25, 62, 64 and 31. all Dubois, Wyo.: 62, Rugby iering information through a post office box. N.D.; 20, 28 and 36, Wheatland, Wyo ; 68, Reva, S.D.; 49, 51 and 53, Hyannis, Neb. It also has Returning a call left with his answering ser tentatively granted applications of State of Alaska for ch. 24. Trapper Creek, Alaska: Douglas vice, Alfred Avins, the head of the school, Televiewers Inc., ch. 2, Douglas, Ga.; Steven C. Nelson, ch. 8. Fairmont, N.D.; Harlan L said Hall is an "instructor" at the school, but Jacobsen, ch. 12, Mitchel & Woonsocket. S.D.; Graphic Scanning Corp., ch. 69. Wichita, declined further comment.

Kan.; State Board of Directors for Educational Television, ch. 9, Mitchell, S.D., Bear Paw TV In the fall of 1981, she taught one semes Club, ch. 11, Lloyd, Mont.; John W. Smith St. and Mary L Smith, Jettersonville, Ind.; ter of estates and wills at Antioch Law Regents of the University of New Mexico and Board of Education of the City of Albuquerque, School in Washington, where her conserva ch. 32, Albuquerque, N.M.; Arapahoe County TV Club, ch. 30. Gallup. N.M., North Tillamook tive values often clashed with those of the County Translators Inc., channels 53, 44 and 57, Rockaway (and vicinity), Ore.; Kentel, ch. liberal students and faculty. According to 47, Boise, Idaho; North Sherman TV Coop. ch. 67, Wasco, Ore.; World Out Reach for Antioch professor Richard Rubenstein, who Deliverance, ch. 60, Keokuk, lowa, and Five County Public Telecommunications Project, ch. hird Hall, she "did very well." He remem 62, Lake George, Colo. bers that she would "provoke her students by saying things she knew they would disagree with. And, he said, she was always pre set up a "separate, but superior school sys- March 1979 and May 1980. She says she pared to defend her views. “She talks back," tem" for blacks. Because black males resent also set up a system to aid the bank in makhe said. "She doesn't take s... from any the authority of whites and females, it says, ing sure it stays in compliance with federal one."

the schools should have male teachers and, and city EEO laws. Hall says she also taught one semester of whenever possible, former star athletes as In 1981, Hall worked with Lieutenant law in the business environment in the principals. Black students who accept the General Daniel O. Graham (U.S. Army business School of the University of the Dis work ethic” would qualify for integration now retired) and others on "High Frontier. A trict of Columbia in the spring of 1981. into the majority schools," it says. New National Strategy," a study that pre

Some of Hall's conservative views are dis The chapter proffers other unconventional posed the strategic defense initiative that tilled in a 71-page booklet—"Foundations in ideas. It asserts that "life is still cheap in was later adopted in part by the Reagan adSand"- that she helped write and publish Africa," citing Idi Amin's reign of terror in ministration and popularized as “Star Wars." with two others, Lawrence Hafstad and John Uganda. It also contends that slavery was an The study also spawned a permanent ageni H. Morse, in 1982.

African tradition and that it died out in Euro- Zation, High Frontier Inc., on whose board The booklet's most controversial chapter pean cultures because it proved "ineffi of advisers, according to project director may be the one that addresses The Minority cient."

Graham, Hall still serves. Graham strongly Problem. It argues that black males are at a Although she told the Senate Judiciary endorses Hall, calling her a brilliant young disadvantage in Wester culture because of Committee that she "co-authored" the book woman. the “10,000 years of selective breeding" that let, Hall told BROADCASTING the ideas are And over the past few years, Hall has also allowed them to thrive in the African jun- really those of Hafstad and that she acted advised and contributed money to the Leadgles. “Black male youths have great difficul- primarily as an editor. She doesn't, however, ership Foundation, a conservative group ty overcoming their millenia of breeding for disavow the booklet and the ideas it con headed by former broadcast newswoman shon-sighted, high-energy solutions to prob- tains. The booklet was intended "to stir, Martha Rountree. According to Rountree, lems," it says. Their race has skipped the thinking into alternative methods of solving 4 one of the goals of the group is to “clean up centuries of training which has produced in our problems," she said.

television by encouraging grass-roots proother races the discipline, foresight and tol Although "Foundations in Sand” firmly tests against excessive sex and violence on erance of drudgery, necessary for success in rejects "affirmative action" as a means of television. Like Graham, Rountree praises the agricultural and industrial ages in the improving the lot of blacks and other minor Hall as "one of the most conscientious peo temperate zones....

ities in business, Hall says she helped imple- ple I know.... I don't know anyone with It's possible for black males to overcome ment an Equal Employment Opportunity more integrity. She'll do her homework and their genetic handicap, the booklet says. program for Washington's Riggs National she'll be fair." And to help them, it says, the country should Bank when she worked for the bank between Hall anticipates that the remainder of

1985 will be busy for the CRT. "I don't think we are going to get a day off for the next

eight months," she said. The proceeding to CPB budget hearings. The threat of the administration's S14 million rescission of the Corpo determine the distribution of the 1983 copyration for Public Broadcasting's proposed fiscal 1987 appropriation, died last week. The right pool, which amounts to around $85 White House recommended that Congress cut the $200 million proposed for CPB to $186 million, will be more complicated, and, posmillion; however, 45 legislative days had passed since the rescission request was filed. Since sibly, more contentious than ever, she said. Congress had not voted on it, the requested cut expired April 24. In an attempt to avoid a third For the first time, she said, the pool includes Presidential veto, CPB has also supported the administration's proposed FY 1988 appropri fees stemming from the CRT's 1982 rate ination of $214 million. With that, $108.3 million would go to noncommercial television stations creases-3.75% of gross revenues for disin the form of community service grants (CSG's); 36. 1 million for national television program tant signals added by cable systems after the production, and $48.2 million for radio's program and national radio program produc FCC dropped its distant-signal rules and an tion, CPB Chairman Sonia Landau told House Appropriations Subcommittee members April across-the-board hike on all distant signals 18.

to compensate copyright holders for the At a Senate Appropriations Subcommittee hearing last Thursday (April 25). CPB Landau FCC's elimination of the syndicated excluoffered her "personal observations about CPB's priorities': Public broadcasting 'can, and sivity rules. should play a meaningtul role in educating America's children": CPB was committed to At the same time, she said, the CRT will opening up the benefits of public broadcasting to the physically impaired":public broadcast probably have to launch a proceeding to reing should never become preoccupied with ratings, and noncommercial broadcasting view the 3.75% rate and the so-called syndishould do more in the area of public affairs. For the last, she would like to see more cated exclusivity surcharge. Turner Broadextensive coverage of Congress, including programs offering an historical prospective on it. casting System, owner of superstation She also wanted to attract more "innovative producers of children's programing to noncom WTBS(TV) Atlanta, has already petitioned the mercial broadcasting, she said. Among other topics discussed during the hearings was CRT to review the 3.75% rate for cable sysCPB's relationship with National Public Radio. Pfister told the House subcommittee members tems wishing to add the superstation. And, DCPB had a 'Testy relationship with the noncommercial radio network.

she said, she expects others to petition for a broader review and trigger a "full-blown

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Broadcasting Apr 29 1985

proceeding."

One task the CRT will not have to perform his year is deciding on an adjustment of the : "pyright fees for inflation. The cable indusay and the programers got together earlier cais year and agreed to increase the rates early 12%, obviating the need for the CRT roceeding. "The inflation proceeding is pretty much laid to rest," Hall said,

To do the job and do it right, Hall feels that e CRT must have something it has never -ad: a competent professional staff to support the work and decisions of the commissoners. She has already hired the CRT's first general counselformer FCC attorney Rob ert Cassier-and would like to hire at least wo more lawyers, an economist and an accountant.

Although the Copyright Act specifies five commissioners, Hall believes it can get along with just three. In fact, she believes the appointment of two more commissioners would be a frightful waste." She said she plans to ask Congress to allow her to use money earmarked for the absent commissioners for additional staffers.

the upcoming distribution and ratereview proceedings are wrapped up, Hall said she would like to explore rewriting parts of the Copyright Act to see if we can offcially reorganize the (CRT) into a more workable structure" with three commissioners and sufficient staff. (She said she would also like to see a rewrite of Section 111 "to make it more readable. That thing is just like nud.")

In preparation for this year's hearings, Fail said she is also in the process of reformag the procedures "to give them more struce and more consistency." The CRT has zired a law firm to help analyze the procedures and recommend improvements, she said.

"The next big headache... is really beefng up our opinions, our determinations, so hat they have more substance than they wave had in the past," she said. "That is going to be a project in which I wish my egal counsel had a half a dozen assistants Occause the determinations we come out with this year are going to be major."

Despite her conservative credentials, or zerhaps because of them, Hall is a dedicated -eformerat least when it comes to the CRT.

I think this agency needs a total overhaul," she said, "When every determination results n people storming the courts and storming che Congress, that says to me that this ageny is not doing the job that it was expected to 1o. You expect half the sides to be unsatised. But when the biggest takers are still Lissatisfied, it tells me we have to look at what we are doing and why."

The cable industry has long maintained hat the CRT has a bias in favor of the copyright holders. This bias, they say, was mani"ested in 1982 with the CRT rate increases. "It's not so much a function of bias," said all in response to the charge. "It's more a unction... of inactivity. If the previous comunissioners) did more, studied more, orked harder toward finding a better answer then maybe some of the discontent from all sides would have been ameliorated.

"I'm not going to sit here and say I'm

perspective." Morcover, Ray says that when going to make it all better. I don't know if I the 1987 recording rate proceeding comes can," said Hall. "But I do know that I will before the tribunal he will not participate if work as hard as I can to try to find better the parties feel it's necessary. solutions."

As for the size of the CRT, Ray agrees of the three commissioners, Ray now has with Hall that it should be reduced from five the most experience, having arrived at the to three commissioners. He says he has alCRT in 1982 and having served as chairman ways taken that position. He also backed the in 1983. He is the only current commission decision to hire a chief counsel. During his er to have participated in the controversial 3.75% rate hike proceeding. Ray supported

chairmanship, with the help of the commis

sioner Katherine Ortega, Ray was able to get the increase.

a budget set aside to hire a chief counsel. But Like Aguero, Ray has strong ties with the he failed to convince the rest of his colentertainment industry. His career spans several decades in the music industry beginning

leagues. He's now "very happy they finally

got one. in the 1950's when he worked for Central However, that's as far as he will go. He Record Sales, a record distribution firm in doesn't see any need for more stafi ori full Los Angeles. In 1955, he joined Imperial

time economist. "Unless there are additional Records, another Los Angeles record distri

responsibilities given to the CRT I think it bution fim, as national promotion manager.

would be a terrible waste of time and money For five years, he worked for Capitol Re to have a full-time economist. As to whether cords, eventually becoming a vice president,

we might hire an outside economist for a and later joined MGM Records where he served as senior vice president.

specific project, that's another thing that I

would probably support, Ray said. Ray left MGM Records in 1974 to estab Ray was reluctant to commeat on the lish Eddie Ray Music Enterprises, whose Turner petition, although he expressed sur. holdings included a recording studio, music prise that the CRT hadn't been petitioned publishing and record production divisions. sooner for a review of the 3.754 rate. The company also operated the Tennessee "By no means am I closing my mind a College of Recording Arts, a vocational college for those interested in the recording

making prejudgments as to what a review

might turn up, he said. "My decisions are business. In 1979, Ray returned to Los An based on the record before us.... If the re

cord has changed, if other things are presentgeles as president of California Multiple In ed then, of course, I have no idea what my dustries Inc., a real estate and music consult

vote will be on the appeal until that record is ing company

recorded." In California, he was active in Republican

His view on the compulsory license is sipolitics and was a California state co-chair

miliar to Hall's. "I have always taken a posiman for Republican Black Voters for the

tion that if and when the industries can de Reagan/Bush Campaign in 1980. And dur

velop an internal mechanism in which they ing the 1984 campaign Ray served on the

can negotiate themselves in a free market national advisory Committee of the National

atmosphere would love to see that day Black Republican Council and was an active

happen-I think then that there certainly Republican Eagle in 1983.

would be no need for the CRT or anything (He received a bachelor of professional

like the CRT. I am not convinced at this studies degree from Memphis State Univer

point, in fact I know at this point, they have sity and studied in business administration at

not been able to do that." Los Angeles City College.)

Ray has had some doubts about the AKTS Nominated initially to fill the unexpired

role from the very beginning. He questions term of Clarence James, Ray was reappoint

whether "taxpayers should be responsible ed for a full term which expires September

for these kinds of actions." However, "as 1989. At the time of his second confirmation

long as Congress does not change it and as before the Senate, there was some congres

long as the industries themselves cannot desional concern that Ray's background in the

velop the kind of mechanisms so that they record industry might compromise his posi

can do it themselves, I don't see any other tion at the CRI. Nonetheless those concerns

way," he added. were quelled. And as Ray explains: "The

But as far as copyright reform goes, Ray is position of the people at the White House not anxious to become entangled in such an who recommended me was that they felt it

endeavour. What's more, he said, it's not in was time to have someone at an agency in

the CRT's mandate to seek reform. "I would Washington who was not the typical Wash

not be in favor of a member of the tribunal ington lawyer type, but someone who had

becoming a lobbyist on the Hill." business experience, who had practical If cable operators petition the CRT to lowworking knowledge, that can give a different

er the 3.75% copyright rate, they will have to deal with at least one unsympathetic commissioner, Mario Aguero. Asked what he thought about the rate, Aguero said, "I don't think it's too much, the 3.75%." And, apparently unaware of the NCTA's ill-fated court appeal of the rate, he added, "So far today we haven't had any challenge of the 3.75%. What do you think?"

Aguero was appointed in May 1984 to fill out the unexpired term of the late Marylou Burg (Burg died in May 1983) and was reap pointed in September 1984 to a full seven

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1

51-527 0 - 85 - 11

year term. He says he received bachelor's Aguero was particularly active in Presi- plement. With only three commissioners, degree in science and letters from the Cama dent Reagan's 1980 presidential campaign Aguero fears there will be times the tribunal guey Institute before leaving Cuba in 1960, and in 1983 was named chairman of public won't be able to assemble a quorum. More and a degree in business administration from relations for the Republican National His- over, he said, the CRT will have its hands full Havana University

panic Assembly, a post he held until Feb. 24, with the 65 hearings scheduled this year Soon after arriving in the U.S., Aguero 1985.

And he expects the workioad to increase. I founded Enterprises Latinos, which dubbed Since his roots are in show business, some think the television industry is growing so Spanish soundtracks onto English movies, CRT watchers may feel Aguero will lean in much that in the next three years we're going and Artists in Radio, Television and Specta- favor of the copyright holders. Not so, the to surpass the $100 million mart. The more cles, a union for foreign performers. Neither commissioner maintained. "We are here to money we have the more troubles we're go company nor union exists today.

make decisions in the right manner. We don't ing to face." (Aguero also thinks the tribunal Aguero became involved in other show have any favorites. We make the most hon needs an economist.) business jobs and ventures. Calling himself est decision we can afford. It's our job," he Although it's unclear whether Aguero is a a "theatrical entrepreneur," Aguero says he said. Furthermore, Aguero added, he has al hard-line advocate of the compulsory license serverd as a talent consultant for several Latin ready participated in at least Il tribunal scheme, he doesn't seem anxious to see it American television stations and says he hearings and has not shown an inclination disappear. "How do you control the rights of produced numerous concerts, stage and ra toward

any certain entity. "I loved my career the composers and performers without a dio shows at Carnegie Hall and Lincoln Cen as a producer, I love actors and performers, compulsory license r' be asked. What about ker. He cites his production of "Roberto Igle- but this has nothing to do with the business turning it over to the marketplace? "I never sias Ballet Espanol," which appeared on the of the tribunal," he said.

thought of that, I don't know," he responded. New York stage as well as the Ed Sullivan Aguero also deflects any criticism that all "The compulsory license has helped a lot so Show and Bell Telephone Hour, as one of his the commissioners should have some back far to my knowledge." major accomplishments.

ground in copyright law. “I think we com Aguero isn't the only member of his famAguero owned and operated a New York bine a good team here. That team representsily working for the government. His wife, restaurant. Havana East, for 10 years before people who know the law very well and very Lilia Lazo, an actress, has joined the Cuban selling it in 1981. And at the beginning of deeply and people involved in business." In service of Voice of America (Radio Marti). this year, he sold off his real estate interests, his opinion, it's combinations like that that as an anchor. mostly apartment buildings held by Amalia have made the "tribunal great in the last sev The lawyers who deal with the CRT in Pealty Corp. As a CŘT commissioner, en years.

behalf of the various cable, broadcasting and Aguero feels it's necessary to rid himself of Like Hall, Aguero wants to strengthen the programing lobbies privately question the any possible conflicts of interest. “As long tribunal. However, he would go about that competence of the three commissioners. But as I am here I want to be in the best possible differently. He favors filling the two vacant some are impressed with Hall's enthusiasm shape with the tribunal." commission seats to give the CRT a full com- and determination to reform the agency and

are hopeful that she can bring some order to its procedures and some reason to its deci sions. Now, they are waiting to see if she can deliver.

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