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TO BE OR NOT

When the big players—the cable industry, MPAA and broadcasters-can compro mise 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.”

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Tin reck link in implementation
.:::9 Copyright Act of 1976
ho lways boon the Copyright
..., my fribunal, whose miesion
n i. qver been matched by resources;
tris is the story of the three
Cu... nissioners now trying to keep up
The Copyright Act of 1976 placed much of
iis hope for marketplace justice in the Copy-
right Zoyalty Tribunal, a tiny—but increas-
inly powerfulfederal 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-
anna lie!c Hall and Commissioners Edward
W. lay 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 bent who has had more experience in teach

Aguero, Hall and Ray ing 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 May, is a Cuban immigrant and former Since its inception, the CRT has earned White House considers the CRT", weful Now zork businessman and producer of con- little respect from the industries it affects, place to put some otherwise embarrassing cells, motion pictures and television shows. the Congress or the courts. That's attributed applications for jobs." And Robert Kasten

The irxe 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 (S722,000 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 hopo 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-tribunals 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, heve 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 inter at the Copyright Office of the Library of Congress, the agency that actually collects and disburses the cable copyrighi foes.

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 Northern 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 granta. 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. ND. 23. 25. 62, 64 and 31. all Dubois, Wyo. 62. Rugby iering information through a post office box. ND 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 tor ch. 24. Trapper Creek, Aleska 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 Si and Mary L. Smith, ch. 5, Jeffersonville, 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 mat. he 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 Dow retired) and others on "High Frontier. A trict of Columbia in the spring of 1981. into the majority schools," it says. New National Strategy." study that pro - 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 asseris 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 and H. Morse, in 1982.

African tradition and that it died out in Euro zation, High Frontier Inc., on whose bourd 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 Westem 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 short-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 (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 impie- ple I know.... I don't know anyone with li'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'r chint we are going to get a day off for the red

eight months," she said. The proceeding to CPB budget hearingo. The threat of the administration's $14 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, posmillon, 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 (CSGs), 536, 1 million for national television program tant signals added by cable systems after the production, and S48.2 million for radio's CSG 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 excluofered her personal observations about CPB) priorities': Public broadcasting can, and sivity rules. should play a meaningtut role in educating America's children CPB was 'committed to As 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 prograrns 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 dunng the heanngs 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, CPB had a Testy relationship with the noncornmercial radio network

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

Broadcasting AD 29 1988

proceeding."

One task the CRT will not have to perform is year is deciding on an adjustment of the : "pyright fees for inflation. The cable indus

and the programers got together earlier as year and agreed to increase the rates early 12%, obviating the need for the CRT Toceeding. 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 cad. a competent professional staff" to sup port the work and decisions of the commistoners. She has already hired the CRT's first general counsel former FCC attorney Rob ert Cassler-and would like to hire at least wo more lawyers, an economist and an ac. countant.

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

Once 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 offically reorganize the (CRT) into a more workable structure with three commissioners and sufficient staff. (She said she would Iso 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, tail said she is also in the process of reformog the procedures "to give them more strucTre and more consistency." The CRT has uired a law firm to help analyze the procedures and recommend improvements, she

perspective." Moreover, 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 chairmanship, with the help of the commis3.75% rate hike proceeding. Ray supported

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 be 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 staff or a full Los Angeles. In 1955, he joined Imperial time economist. "Unless there are additional Records, another Los Angeles record distribution firm, as national promotion manager.

responsibilities given to the CRT I think it

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 oconomist 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 comment 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 per oned publishing and record production divisions. sooner for a review of the 3.75% rate. The company also operated the Tennessee "By no means am I closing my mind a College of Recording Arts, a vocational col- making prejudgments as to whai a review lege for those interested in the recording

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

recorded."
ing company
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 deReagan/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 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

Dot been able to do that."
Los Angeles City College.)

Ray has had some doubts about the CRT's
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 CRT. 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 a 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 uncxpired term of the late Marylou Burg (Burg died in May 1983) and was reap pointed in September 1984 to a full seven

jaid.

"The next big headache. .. is really beefing up our opinions, our determinations, so that they have more substance than they have 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 because the determinations we come out with this year are going to be major."

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

I think this agency needs a total overhaul." she said. "When every determination results 22 people storming the courts and storming the Congress, that says to me that this agen:y is not doing the job that it was expected to co. You expect half the sides to unsatis

d. But when the biggest takers are still cissatisfied, it tells me we have to look at what we are doing and why."

The cable industry has long maintained that the CRT has a bias in favor of the copyright holders. This bias, they say, was maniested in 1982 with the CRT rate increases. It's not so much a function of bias," said all in res ponse to the charge. "It's more a function... of inactivity. If the previous comunissioners) did more, studied more,

crked 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

51-527 0 - 85 - 11

year term. He says he received . bachelor's de grue in science and letters from the Camaguey Institute before leaving Cuba in 1960, and a degree in business administration from havana University

Aguero was particularly active in Presi- plement. With only three commissioners, dent Reagan's 1980 presidential campaign Aguero fears there will be times the tnbunal and in 1983 was named chairman of public won't be able to assemble a quorum. Morerelations for the Republican National His- over, he said, the CRT will have its hands full panic Assembly, a post he held until Feb. 24, with the 65 hearings scheduled this year 1985

And he expects the workload to increase. "I Since his roots are in show business, some think the television industry is growing so CRT watchers may feel Aguero will lean in much that in the next three years we're going favor of the copyright holders. Not so, the to surpass the S100 million mark. The more commissioner maintained. "We are here to money we have the more troubles we're go make decisions in the right manner. We don't ing to face." (Aguero also thinks the tribunal have any favorites. We make the most hon- needs an economist.) est decision we can afford. It's our job," he Although it's unclear whether Aguero is a said. Furthermore, Aguero added, he has al- hard-line advocate of the compulsory license ready participated in at least Il tribunal scheme, be doesn't seem anxious to see it hearings and has not shown an inclination disappear. "How do you control the rights of toward any certain entity. "I loved my career the composers and performers without a as a producer, I love actors and performers, compulsory license to be asked, What about but this has nothing to do with the business turning it over to the marketplace? "I never of the tribunal," he said.

Soon after arriving in the U.S., Aguero founded Enterprises Latinos, which dubbed Spanish soundtracks onto English movies, and Anists in Radio. Television and Spectacles, a union for foreign performers. Neither company nor union exists today,

Aguero became involved in other show business jobs and ventures. Calling himself a theatrical entrepreneur," Aguero says he serverlas a talent consultant for several Latin American television stations and says he produced numerous concerts, stage and radio shows at Carnegie Hall and Lincoln CenL. He cites his production of "Roberto Iglesias Ballet Espanol," which appeared on the New York stage as well as the Ed Sullivan Show and Bell Telephone Hour, as one of his major accomplishments.

Aguero owned and operated a New York rsstaurant. Havana East, for 10 years before selling it in 1981. And at the beginning of This year, he sold off his real estate interests, mostly apartment buildings held by Amalia Peally Corp. As a CŘT commissioner, Aguero feels it's necessary to rid himself of any possible conflicts of interest. “As long as I am here I want to be in the best possible shape with the tribunal."

thought of that, I don't know," he responded. Aguero also deflects any criticism that all "The compulsory license has helped a lot so the commissioners should have some back far to my knowledge." ground in copyright law. “I think we com- Aguero isn't the only member of his fambine a good team here. That team representsily working for the government. His wife, people who know the law very well and very Lilia Lazo, an actress, has joined the Cuban deeply and people involved in business." In service of Voice of America (Radio Marti), his opinion, it's combinations like that that as an anchor have made the tribunal great in the last sev. The lawyers who deal with the CRT in en years.

behalf of the various cable, broadcasting and Like Hall, Aguero wants to strengthen the programing lobbies privately question the tribunal. However

, he would go about that competence of the three commissioners. But differently. He favors filling the two vacant some are impressed with Hall's enthusiasm 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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