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II. LEGISLATIVE ISSUES

In this section, the Copyright office briefly reviews some of the major legislative issues in the field of copyright that are likely to be brought to the attention of this Congress. The question of United States adherence to the Berne Convent ion is ment ioned in the next section, but we note here that adherence requires changes in our domest ic copyright law.

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On June 15, 1984, at the second session of the 98th Congress, Representat ive Kastenmeier introduced H.R. 5878, a bill to amend the Copyright

Act of 1976 with respect to the structure and operat ion of the Copyright

Royalty Tribunal (CRT) and the implement at ion of the cable compulsory license.

The bill would have changed the Tribunal's membership from five to three

commissioners, and would have authorized professional staff (one economist and

one general counsel).

It would have established additional criteria for the

Tribunal to consider in determining the reasonableness of rates and rate

adjustments pursuant to section 801(b)(2)(B) of the Copyright Act, including the impact of the rates on cable subscribers both as to the availability and cost of receiving copyrighted materials. It would have excluded from the 1982 royalty rate adjustment distant signal equivalents represented by three distant independent broadcast signals in the case of any cable system which does not carry any local independent television broadcast signals, or two dist ant independent broadcast signals in the case of any cable system which

carries any local independent television broadcast signal. It would have clarified the existing section relating to judicial review of final decisions of the Tribunal by providing that review shall be had on the same standards

and bases as any executive branch or independent regulatory agency. Finally,

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copyright royalties based upon the receipts of cable systems only from

subscriber groups receiving particular "tiers" of service containing secondary transmissions. 37 This bill was approved by this Subcommittee, but it was

not reported by the full Judiciary Committee.

Some of the features of H.R. 5878 may be given further considerat ion in

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On October 12, 1984, the Copyright office held a public hearing concerning the status of low power television stations under the cable compulsory

license.

Having reviewed the statute and legislative history in connection

with an examination of the divergent views presented at the hearing and during the comment period, the Copyright Office concluded that the Copyright Act is ambiguous on the issue of whether, when a cable system retransmits a low power

3/ In Copyright Office Final Regulations issued at 49 Fed. Reg. 13029, 13035 (April 2, 1984), the Copyright office determined that the Copyright Act does not presently permit any prorat ion or other allocat ion of either distant signal equivalents or gross receipts by subscriber groups where any secondary transmission service is combined with nonbroadcast services in program tiers. The Office accordingly, clarified its definition of gross receipts for the "basic service of providing secondary transmissions of primary broadcast transmitters." 37 C.F.R. $201.17(b)(1) (1984). These regulat ions are under review in court in Nat ional Cable Television Assoc. v. Columbia Pictures Industries, Inc., et.al., Civil Action No. 83-2785 (D.D.C., filed September 21, 1983).

television signal, the signal should be characterized as "local" or "distant" for purposes of applying the DSE value formula. Consequently, in collecting cable copyrighted royalties, the Copyright office will take a neutral position

on this specific issue.

The Office recommends legislative clarification of

this issue

In the same proceeding, the Office concluded that if Copyright owners and cable systems uniformly agree that negot iated retransmission consents supercede the cable compulsory license requirements of section 111 cable systems, in paying royalties pursuant to that section, need not take account

of the signal of a low power television stat ion for which voluntary licenses

have been obtained.

This is so provided that the negotiated license covers

all cable-retransmitted works carried by a particular broadcast ing station for the entire broadcast day for each day for the entire account ing period. This decision is published at 49 Fed. Reg. 39174-39175 (October 4, 1984).

3. Administration of the cable compulsory license

Nonprorat ion of the distant signal equivalent value (DSE): The Copyright office recently issued final regulat ions, published at 50 Fed. Reg. 9270-73 (March 7, 1985), affirming without modification the Office's interim regulations (published at 47 Fed. Reg. 21786 [May 20, 1982]) concerning the

calculation of DSE's after the FCC's June 25, 1981 deregulation of cable

television. The final regulat ions provide that proration of the DSE is possible only as specifically legislated by Congress in the DSE definition of

section 111(f).

In summary: (1) The permissive substitution referred to in section 111(f) is governed by the FCC's former local content substitution rule, which remains effective for purposes of the Copyright Act, and proration is possible; (2) proration is also possible in the case of part time carriage

for lack of activated channel capacity since these FCC rules remain in effect; (3) subst itut ion of distant signals newly authorized by the FCC deregulation

must be calculated at the full DSE value of the signal carried because

Congress did not establish an open-ended policy of permitting the reduction of DSE values to correspond to actual signal carriage; (4) after June 30, 1981, prorat ion of DSE's based upon part-time carriage pursuant to the FCC's late-night and specialty programming rules is no longer possible since the FCC, by eliminating those rules, removed the just ificat ion for prorat ion; and (5) cable systems can no longer avail themselves of the syndicated program exclusivity rules as a basis for substitution without calculation of a DSE for such carriage. They may, however, continue to substitute other programming in place of programming deleted pursuant to the FCC's sport exclusivity rule

without calculat ion of a DSE since those rules remain in effect.

b. Not ice of inquiry regarding FCC's amendment of the Major Television Markets List: The FCC recently published a final rule amending the

list of major television markets in section 76.51 of its rules to include

Melbourne and Cocoa, Florida within the Orlando-Daytona Beach hyphenated market. 50 Fed. Reg. 2565-70 (January 17, 1985). In response to a petition from cable system representatives, the Copyright office published a Not ice of Inquiry [at 50 Fed. Reg. 14725, (April 15, 1985)] inviting public comment, views and informat ion on the impact on the copyright law of a change by the FCC in the major television market list, which has the effect for FCC purposes of making a formerly "dist ant" signal a "local" must-carry signal, and related

issues.

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The CRT's 1985 Cable Royalty Inflation Adjustment Proceeding: Pursuant to section 801(b)(2)(A) and (D) of the Copyright Act of 1976 the Copyright Royalty Tribunal (CRT) is authorized to adjust the cable television

royalty rates and gross receipts limitations for inflation, upon the pet it ion of parties with a "significant interest" in the royalty rates. On March 8, 1985, the CRT received a joint submission from various parties represent ing

interested copyright owners and cable television systems whereby the parties

advised that they had entered into an "Agreement of Settlement Concerning 1985 Cable Royalty Inflation Adjustment." This Settlement Agreement would, if

effectuated,

resolve all issues that would be raised in the adjustment

proceeding by these parties.

Pursuant to the joint submission, the CRT

commenced an informal 1985 cable inflation adjustment proceeding and proposed adopt ing the adjustment of royalty rates 4 and gross receipts limitations/ suggested in the Settlement Agreement, to become effective with the first

account ing period of 1985.

The CRT also requested comments concerning its

adopt ion of the Settlement Agreement in lieu of holding more formal,

evident iary hearings.

See Notice Commencing_1985 Cable Royalty Inflation

Adjustment Proceeding and Setting Procedural Dates, 50 Fed. Reg. 10989-91

(March 19, 1985).

d. Turner Broadcast ing System Rate Adjustment Petition: On March 25, 1985, Turner Broadcasting System Inc. pet it ioned the CRT to consider its superst at ion WTBS a "national distant signal" and remove the 3.75 percent

47.893 (instead of the current .799) of 1 per centum for the first DSE, .563 (instead of the current .503) of 1 per centum each for the second, third and fourth DSE's, and .265 (instead of the current .237) of 1 per centum for the fifth DSE and each additional DSE thereafter. See 17 U.S.C. $111(a)(2)(B)(1984); 37 C.F.R. $308.2(a)(1984). 5

/ The current $107,000 limitation would be raised to $146,000 and the $214,000 limitat ion would be raised to $292,000.

17 U.S.C. $111(0)(2)(C)-(D) (1984); 37 C.F.R. $308.2(b) (1984).

See

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