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Fritz E. Alloway

Mr. Attaway testified to the historical perspective of the FCC's enactment and subsequent repeal of its distant signal rules, and on Congress' creation of cable's license and royalty fee schedule. He also presented excerpts from several pleadings by cable interests, filed with the FCC from 1969 to 1979, to demonstrate the cable industry's perception of the high value of distant signals. Mr. Attaway stated that there is no statutory prohibition to the

Tribunal's providing for periodic cost of living adjustments to rate

determinations made in this proceeding. but rather there is a statutory command for the Tribunal to do so. Mr. Attaway also testified that the two most relevant factors to be considered by the Tribunal in setting reasonable rates are (1) the harm to copyright owners, and (2) the benefit to cable systems' carriage of the additional distant signals and programming, available because of the FCC's deregulatory actions.' Allen R. Cooper

Mr. Cooper's direct testimony was directed primarily to several sets of. exhibits prepared by the program suppliers. Mr. Cooper testified that one set of the exhibits shows the extent of revenues lost by program suppliers because of cable importation of distant signals, for the years 1980, 1981, and 1982, in seven top 100 television markets. He testified that under the current fee schedule, cable systems in these markets paid royalty fees for distant signals at approximately ten percent of marketplace value of the programs carried.

Another set of the exhibits presented by Mr. Cooper was a program suppliers' survey of franchise applications taken from the files of the Cable Television Information Center (CTIC). The survey included all applications submitted for cable franchises in the top 100 television markets, between January 1980 and April 1982, for which CTIC served as a consultant. Mr. Cooper testified that this set of exhibits shows that if current rates for distant signals were increased ten times, it would have minimal effect on the viability of a present cable system. Another set of the exhibits presented by Mr. Cooper was tabulated data from the 1979-1 Statement of Account Forms for Form 3 cable systems located in the 35 mile zone of the top 50 television markets. Mr. Cooper testified that this set of exhibits shows that the repeal of the FCC's syndicated

"Proposed Findings of Fact and Conclusions of Law by the National Cable Television Association. Inc.". September 1, 1982, p. §.

exclusivity rules will benefit the cable industry by eliminating the costs to cable systems for program substitution and for "black outs" of restrictive programming.

Mr. Warren Larson

Mr. Larson described the syndicated television market and the process by which programs reach the syndication market. He testified that the repeal of the FCC's distant signals and syndicated exclusivity rules would have an unfavorable impact on syndicated program producers' bargaining ability in selling their programs to local broadcast stations.

Robert Jacquemin

Mr. Jacquemin described the syndicated television programming production and distribution process. He testified that a vast majority of syndication revenue is derived from the top 50 television markets, and independent television stations are the most important group of buyers in the syndication market. It was also his testimony that the repeal of the FCC's distant signal and syndicated exclusivity rules has resulted in substantial harm to syndicated program suppliers in selling their programming in these markets. Mr. Jacquemin presented two studies of selected sales of syndicated programming in high penetration cable "protected" and "unprotected" markets to demonstrate this harm to program suppliers. Dr. Bridger Mitchell

Dr. Mitchell testified about several reports and studies he prepared for NCTA in the early 1970's concerning the prospects for the viability of cable in urban areas. Based on these materials, Dr. Mitchell had earlier concluded that cable generally was not expected to be profitable in urban markets where good quality broadcast signals were available off-air. He testified that the three principal factors that had led him to alter his earlier conclusions were (1) the elimination of many restrictive FCC regulations imposed on cable during the 1970's; (2) the cost of distant programming transmission has been significantly reduced by the advent of satellite technology; and (3) there has been substantial growth in the number and variety of programming sources available to cable systems. Dr. Mitchell also testified about the effect of the syndicated exclusivity rules and their repeal on cable systems. Relying on a study by Dr. R. E. Park in 1972 which . estimated the proportion of distant

'Ibid. p. 26.

signal programming potentially subject to blackout, and a 1978 survey by NCTA in which 1,024 cable systems subject to exclusivity rules were asked to report the extent to which programming had actually been deleted as a result, Dr. Mitchell testified that:

(a) The five NCTA "worst case" systems from its survey had a higher percentage of actual program deletions in 1978 than Dr. Park had estimated in 1972 for markets similar to those in which those five systems operated;

(b) the syndicated exclusivity rules' placed an economic burden on cable systems which had to bear additional costs to either blackout certain programming, or substitute other programming for it;

(c) repeal of the exclusivity rules saved systems expenses;

(d) repeal of these rules may have benefitted these systems in terms of continuity of programming and the retention of those subscribers who prefer not to switch from one channel to another."

Dr. Stanley Besen

Dr. Besen described for the Tribunal two types of harm to program suppliers because of cable's carriage of distant signals. He testified that the first type of harm to program suppliers results from audience viewing diversion from local broadcast signals to distant signals, and the second type of harm relates to the value of distant signals to cable

subscribers. By using a study by Dr. R. E. Park, Dr. Besen produced a table showing the estimated percentages by which subscriber fees could be increased as a result of the addition of distant signals. Dr. Besen further testified that, based on his table which showed the additional revenues a cable system could generate through added distant signals and programming, the current royalty fees are substantially lower than the royalty fees that would be generated in a free market.

Mr. James W. Lovenstein, Mr. Charles McCabe, Mr. Richard Enderwood

These witnesses described for the Tribunal the impact cable's carriage of distant signals was having on their Tulsa, Oklahoma independent UHF television station, KOKI-TV. They testified that Tulsa's cable penetration has increased about 20 to 25 percent to approximately 50 percent since KOKITV signed on in October 1980 and, that a significant portion of KOKI's syndicated programming has been duplicated by

Ibid. p 28 fid. p. 29.

distant signal importation in their market. They further testified that this duplication has diverted a portion of KOKI's viewing audience away from KOKI to distant signals, resulting in substantial losses in advertising revenue to KOKL

Mr. Lavenstein testified that a major consideration in negotiations with program suppliers in the purchase of programming is the loss of syndicated exclusivity protection and the availability of additional distant signals. Because of these considerations, Mr. Lavenstein testified that he tends to offer to purchase syndicated programming for less money than he would otherwise.

Joint Music: American Society of Composers, Authors and Publishers (ASCAP) and Broodcast Music, Inc. (BMI)

Joint Music proposed that the Tribunal adopt the rate schedule submitted in the "Proposed Rules of the Copyright Owners" as described in an abbreviated form in the summary of the evidentiary position of MPAA

Joint Music also contends that the Tribunal should provide for periodic rate adjustments for inflation and the effective date for any rate increase shall be July 1, 1981.

ASCAP and BMI presented their evidence jointly, and will be referred to as "Joint Music". Joint Music presented two witnesses in its direct case: Gloria Messinger, ASCAP's Managing Director, and Dr. David E. Black, Associate Chairman of the Department of Economics at the University of Delaware, and consultant to BMI. Gloria Messinger

Ms. Messinger testified that Joint Music's license fees for the performance of music on local television stations are a function of the station's gross revenue. To the extent that viewing audience is diverted from a local station to distant signals, its gross revenues are reduced. As a result, Joint Music's fees are thereby also diminished and the music copyright holder is harmed. Because music is used to such a great extent in syndicated programming, Ms. Messinger testified that the repeal of the syndicated exclusivity rules have a greater significance to Joint Music than does the repeal of the distant carriage

rules.

Dr. David E. Block

Dr. Black testified that based on the value that television broadcast stations

'Ibid. p. 35. "Ibid. p. 37.

NAB proposed that the Tribunal set a rate of 5% of cable's gross receipts for its basic service for each distant signal equivalent added as a result of the FCC's deregulation of its distant signal rules. NAB offered no proposal regarding rates for signal carriage resulting from the FCC's repeal of its syndicated exclusivity rules.

In regard to two legal issues to be considered by the Tribunal, NAB proposed that (1) the Tribunal provide for periodic rate adjustments for inflation and, (2) the effective date for any rate increases determined by the Tribunal shall be July 1, 1981.

NAB presented one witness in its direct case: Dr. Lawrence Patrick, Vice President for Research, National Association of Broadcasters.

Dr. Lawrence Patrick

Dr. Patrick's testimony focused primarily on "harm" to broadcasters due to the FCC's repeal of the distant signal rules. He testified that broadcast stations are harmed by: (1) Distant cable carriage of broadcast stations' copyrighted programming, at costs less than market value and (2) distant signals divert local viewing audiences away from local signals resulting in lost advertising revenue to broadcast stations.

By using various calculations based on exhibits presented by MPAA and Joint Music, Dr. Patrick testified that reasonable rate increases necessary to compensate broadcast stations for their loss of revenues were between 16.5 and 22.5 times the current statutory rates.

Dr. Patrick further testified that local station revenue loss was not offset by any revenue gain by the additional distant audiences. Joint Sports

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carriage resulting from the FCC's repeal of its syndicated exclusivity rules.

In regard to legal issues to be considered by the Tribunal, Joint Sports proposed that (1) the Tribunal provide for periodic rate adjustments for inflation, and (2) the effective date for any rate increases determined by the Tribunal shall be July 1, 1981.

Joint Sports presented five witnesses in its direct case: Dale N. Hatfield, Independent Consultant and Former Deputy Assistant Secretary of Commerce for Communications and Information; Thomas A. Larson, Proprietor of Larson Associates, a consulting firm; Dr. Peter H. Lemieux, Independent Researcher in Telecommunications; C. J.Villante, Executive Director of Marketing and Broadcasting in the Office of the

Commissioner of Baseball; and Dr. Yale

Braunstein, Assistant Professor of

Economics at Brandeis University and
Director of and Senior Research

Associate at Kalbas Bowen Associates.

Mr. Dale Hotfield

Mr. Hatfield presented testimony which described: (1) The objectives of Congress in establishing the cable royalty rate schedule in the 1976 Copyright Revision Act; (2) the cable regulatory market; (3) the cable industry's technological changes since 1976; and (4) the impact of changes in the cable industry since 1976 on the royalty fees paid by cable systems. He testified that the primary concern of Congress in setting the 1976 cable royalty rate schedule was to encourage the development of the then infant cable industry. He further testified that due to regulatory, technological, and economic changes in the cable industry since 1978, cable systems are now able to pay royalty rates consistent with copyright owners marketplace expectations; thereby encouraging the creation of new programming.

Mr. Thomas Larson

Mr. Larson presented computerized data taken from the Copyright Office's "Statement of Account" forms for all form 3 cable systems for the second half of 1981. In part, this data showed: (1) the average cable system's gross receipts for the second half of 1981; (2) the royalty fees paid by cable systems for this period; (3) the monthly subscriber fee for the system's basic services; and (4) the number of local part-time and full-time distant signals carried by each system. From this data, Mr. Larson, along with the Joint Sports witness, Dr. Peter Lemieux, developed a data base of form 3 systems that had upgraded from part.

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time to full-time distant signals that had formerly been prohibited by the FCC's distant signal rules. Mr. Larson's data base was used as a basis for the development of studies and exhibits subsequently introduced into the proceeding by Dr. Braunstein and Joint Sports.'

Dr. Peter Lemieux

Dr. Lemieux presented several exhibits prepared to demonstrate the current and future attractiveness of distant signals to cable operators. The sources for the underlying data of Dr. Lemieux' studies were (1) the Larson/ Lemieux data base of form 3 cable systems, (2) the signal registration statements filed with the FCC in the second half of 1981, and (3) the franchising proposals for 35communities evaluated by the Cable Television Information Center (CTIC). Dr. Lemieux testified that as a result of his studies, his conclusion was that the most valuable distant signals are those that are sports flagship stations. Dr. Lemieux also testified that cable systems which had registered distant signals as a prerequisite to their carriage, but had not added them, were signifying their intention to do so at a future date.

Mr. Thomas Villante

Mr. Villante testified that in a free marketplace for distant signals, professional sports programming would seek and obtain copyright payments. which are (1) no lower than those received from the USA Network and (2) no higher than those received from local cable and STV negotiations.' He further testified that absent compulsory licenses, cable systems' payments for baseball at the low end would be approximately .5 cents per subscriber per game, and at the high end the rate would be 20 to 25 cents per subscriber per game. 10 In comparison, current revenues received by copyright owners for similar programming is substantially lower.

Dr. Yale Brounslein

Dr. Braunstein lestified that based on his study presented in this hearing, current distant signal rates would have to be increased approximately 15 times

"Proposed Findings of Fact and Conclusions of Law of the Joint Sports Claimants", September 1, 1992. pp. 43-52

"Proposed Finding of Fact and Conclusions of Law by the National Cable Television Association. Inc. September 1, 1982. p. 50.

"Proposed Findings of Fact and Conclusions of Law by the Joial Sports Claimants, September 1. 1992 p. 28.

"Ibid. p. 41.

to result in copyright owners receiving what they would reasonably charge in a free marketplace." Dr. Braunstein's study, designed to create an analogous market for distant signals, was based on data taken from (1) the Larson/Lemieux data base for form 3 cable systems introduced earlier by Joint Sports witnesses, Dr. Larson and Dr. Lemieux; (2) testimony presented by Sports witness, Dr. Thomas Villante, regarding Sports' free marketplace copyright payments and negotiations, and (3) on Joint Sports 15 percent royalty share for distant signal payments.

Dr. Braunstein further testified that his study confirms that copyright owners could reasonably seek and obtain from cable systems a royalty rate of five percent of their gross basic receipts for each additional DSE "

Rebuttal Phase-Copyright Owners
MPAA

MPAA presented two witnesses during the rebuttal phase of the proceeding: Allen R. Cooper, Vice President, MPAA; Dr. Mark Levy, Director of the Center for Research and Public Communications.

Mr. Cooper and Mr. Levy presented the results of a survey, comprised of three exhibits, which they had conducted of several broadcast stations in the top 50 television markets. Both witnesses testified that in 41 of the 42 markets included in the survey, at least one local station in each market had requested syndicated exclusivity protection during 1978, 1979 and 1980. " Copyright Users

National Cable Television Association, Inc. (NCTA)-Direct Case:

NCTA submitted, as a "worst case" representation, the following adjusted fee schedule to be considered by the Tribunal in setting reasonable rates due to the FCC's repeal of its distant signal and syndicated exclusivity rules. NCTA contended that no adjustment is warranted for the second 50 markets.

In regard to legal issues to be considered by the Tribunal, NCTA proposed that (1) there be no provisions for periodic rate adjustments for inflation and, (2) the effective date of any rate increases determined by the Tribunal shall be July 1, 1983.

In support of their case, NCTA... presented seven witnesses during their direct case: Carolyn Chambers, Executive Vice President and Treasurer of Liberty Communications, Inc.; John Evans, Executive Vice President and Chief Operating Officer of Arlington Communications; Martin Lafferty, Director of Programming, Cox Communications; James Ackerman, Senior Vice President of Warburg, Parabus, Becker, Michelle Minarcin, NCTA's Director of Research; Char Beales, NCTA's Vice President for Media Services and Research; Dr. Rolla E. Park, Senior Economist, Rand Corporation.

Carolyn Chambers

Ms. Chambers testified that because of the major differences between broadcast television and cable television any attempt to determine reasonable rates for distant signals by comparison to what broadcasters pay for programming is invalid. She presented testimony that described many of the functional differences between broadcast and cable television including. (1) cable's narrow casting capability, (2) cable's two way

technology and multi-channel broadcast

retransmission capacity, and (3) cable's

non-broadcast and non-entertainment

transmissions and services. Ms. Chambers also testified that as a professional broadcaster it was her experience that broadcasters do receive added advertiser revenues from expanded audiences due to cable's carriage of their signals into distant markets.

John Evans

Mr. Evans described the general process by which cable operators acquire programming. He also testified that because of alternative programming

A

available to cable operators by broadcast satellite services, distant signals are less valuable to cable systems today than they were in 1976. Mr. Evans further testified that a retroactive rate increase for distant signals would have a disruptive impact on cable systems. "4

Mr. Martin Lafferty

Mr. Lafferty described Cox Cable's priorities in acquiring programming for its cable systems. He testified that Cox's first priority is the determination of the most effective mix of pay services and next, advertiser supported and basic cable services. The greatest proportion of Cox's revenue is generated by cable pay services according to Mr. Lafferty's testimony and approximately 6% of Cox Cable channels would carry additional distant signals. Mr. Lafferty also testified that due to the many changes in cable programming priorities, the value of distant signals relative to nonbroadcast programming, on a daily basis, has diminished since 1976. James Ackerman

Mr. Ackerman presented an overview of the cable industry's financial picture. In his testimony, Mr. Ackerman described cable industry's dramatic growth and projections for its future growth. However, according to Mr. Ackerman, the substantial costs of building urban market cable systems and high interest rates have reduced cable industry profits and projections are that near term profits will remain flat

Michelle Minarcin

Ms. Minarcin presented a variety of exhibits designed to show that (a) only a few signals that were formerly prohibited by FCC rules were added after repeal; (b) very few systems that did add signals could attribute any rate or penetration increase to them, especially because the signals were added with other non-broadcast services; (c) broadcast revenues continue to grow dramatically despite increases in cable penetration; (d) sports teams broadcast and gate revenue continue to grow dramatically despite increases in cable penetration. Ms. Minarcin also testified to the results of a NCTA survey conducted and filed with the FCC in 1979 showing the limited extent to which syndicated exclusivity protection had been requested prior to repeal. The survey included more than

""Proposed Findings of Fact and Conclusions of Law by the National Cable Television Association, Inc.". September 1, 1982, p. 61.

1000 cable systems to which the rules applied. 1

Ms. Char Beales

Ms. Beales testified to a variety of exhibits prepared by NCTA. One set of exhibits were designed to show the significant number of positive and negative changes in the cable industry ⚫. since 1976. Testifying to the negative impact of these changes on the cable industry, Ms. Beales described cables' competition from various new emerging technologies and the adverse effect of increasing franchise and regulatory costs that are unique to the cable industry. Ms. Beales testified that another set of the exhibits presented demonstrated that (1) each additional channel of programming has a declining marginal value. (2) each additional distant signal gains a diminishing share of viewing. (3) markets where cable systems have 12 or more channel capacity, additional signals have minimal impact in attracting new subscribers, (4) viewing of pay and advertiser supported programming is projected to grow at a dramatic rate, and (5) cable penetration has insignificant impact on prices local broadcasters pay for syndicated programming. Other sets of the exhibits were testified to by Ms. Beales to refute NPAA exhibits previously submitted by Mr. Allen Cooper.

Ms. Beales also testified that having experience as a professional in both the cable and broadcast industries, it is her opinion, that expanded audiences due to cable carriage of distant signals do generate additional advertiser revenues for the broadcast stations carried. Dr. Rolla E. Park

Dr. Park testified in both NCTA's direct and rebuttal case. He testified that the only relevant marketplace to examine for the purpose of approximating the rate the free marketplace would set, was one for distant signals bought by cable systems. It was his testimony that any reliance on attempted comparisons to other markets, in particular the market for sports programming purchased by USA Network and broadcast stations, is invalid and misplaced. The analogy is invalid because of the major differences between marketplaces which makes them incomparable. "He testified that the significant differences are those (1) between the products being purchased, (2) the uses the products were put to, and (3) between the sources of revenue

"Ibid. p. 68. "Ibid., p. 70.

52151

generated by the product. "In his testimony, Dr. Park stated that even though there is no operating free market for distant signals, a model of such a marketplace could be constructed from publicly available studies of the industries. Dr. Park constructed and presented his model in this proceeding. By using an example of a marketplace for oranges, Dr. Park described how prices are set by the interaction of the supply and demand for a product: His "supply" is the function of the cost of the orange to the seller (a seller would not be willing to sell the orange for less than it cost him); and, his "demand" is a function of the worth of an orange to the buyer (a buyer would be willing to pay more for the first orange than for the second, but not more than the orange is worth to him." Represented graphically, Dr. Park states that the point of market equilibrium is where the supply and demand curves intersect.

In the construction of his model, Dr. Park's "demand curves" are based on a 1970 regression analysis study, adjusted by Larson data as of the end of 1981, and by inflation factors. His "supply curves" are based on (1) the 1977 Wharton economic projections on audience loss, (2) the 1979 Bortz econometric projections in below 100 market, and (3) FCC case studies using 1976-1977 data. His calculations of distant revenue gains are based on a 1968 Park econometric study and his adjustments for pay cable diversions is based on May 1982 Neilsen data." After several calculations and adjustments of factors derived from these studies, Dr. Park summarized his analysis in a fee schedule format submitted by NCTA as a "worst case" representation of fees to be considered by the Tribunal for possible rate adjustments resulting from the FCC's repeal of its distant signal and syndicated exclusivity rules.. Copyright Users-Rebuttal Phase

The NCTA presented two witnesses in the rebuttal phase: Dr. Rolla E. Park, Senior Economist, The Rand

Corporation; Char Beales, NCTA's Vice President for Media Services and Research.

Dr. Rolla Park

Dr. Park presented extensive testimony and evidence in support of his supply and demand distant signal marketplace model..

"Ibid. p. 71

"Ibid. p. 72

""Proposed Findings of Fact and Conclusions of Law by the Joint Sports Claimants". September 1. 1982, p. 77.

52152

Char Beales,

cases

Statutory Royalty Fee Schedule

After considering the comments of parties, the Tribunal at a public meeting on March 31, 1982 adopted a motion finding, in part, "that it has the jurisdiction and authority to consider and to set royalty rates for additional signals and programming without being limited by the rates originally contained in the Act for other signals and .programming. However, the Tribunal concludes that it will also consider and judge accordingly all evidence regarding the relationship, if any, between any such new rates and the current statutory rates."

The legislative history of the cable. provisions of the copyright law has been presented in considerable detail in this record. Neither the rates in the copyright law nor the legislative history limit our adjustment of the rates for those signals and programs within the scope of this proceeding. We have reached similar conclusions in other rate proceedings, which holdings have been uniformly affirmed on judicial review.

. It is also clear from the legislative history that, as a policy matter, we were not expected to look to the statutory schedule for guidance as to the measure of reasonable compensation. Those rates were adopted by the Congress to implement an agreement between NCTA and MPAA, in which the fee schedule was only one of a number of accommodations reached on cable copyright issues.

Another issue related to the statutory schedule requires comment. Just as our determination in this proceeding is not restricted by the statutory schedule, the perceived inadequacies of that schedule provides this Tribunal with no

justification to balance the scales by excessive compensation of the copyright owners for those copyrighted works within the scope of this proceeding. Any appeals concerning the statutory

"In the mechanical royalty adjustment, we stated: "Likewise, the statutory language and the legislative history of the copyright revision bill excludes any presumption concerning the reasonableness of the existing rate. Nor is the existing rate to be accorded precedential weight in the Tribunal's proceedings." (46 FR 10478)

schedule should be addressed to the
Congress."1

Statutory Criteria and Legislative
Guidance

In contrast to the detailed criteria provided in 17 U.S.C. 801(b) for our jukebox and mechanical royalty adjustments, the copyright law provides only the most general guidance for this proceeding. We had occasion to analyze our jurisdiction in cable royalty matters in the 1980 ajustment proceeding." In the portion of the determination devoted to legal issues, we observed that the scope of our jurisdiction was limited, but within that scope the Congress has given us broad discretion. Our jurisdictional and legal conclusions were challenged by both copyright. owners and NCTA, but fully affirmed by the Court of Appeals" for the District of Columbia Circuit.

We have reached the same general jurisdictional conclusions in the current proceeding as in the 1980 case. The Congress has rigidly confined the scope of the proceeding, but within the area assigned we find that the Congress has granted us broad discretion. Our conclusions are fortified by the uniform holdings of the courts reviewing our determinations.

In the new distant signal adjustment, the Act directs us to consider, "among other factors, the economic impact on copyright owners and users." The House Report (H.R. 94-1476 at 176) directs us to consider the effect of the FCC action "on copyright owners and users, including broadcast stations, and the effect of such distant signals on local broadcasters' ability to service the public."

With regard to the syndicated exclusivity rule, the Copyright Act authorizes us to "assure that such rates are reasonable in light of the changes to such rules and regulations." The House Report states that the "exclusivity rules of the FCC have the effect of protecting copyright owners by restricting the cable carriage of certain distant television programming. If these rules are changed in the future to relax or increase the exclusivity restrictions, it is the Committee's judgment that royalty

"The minority views of Congressmen Harold S. Sawyer. M. Caldwell Butler. Barney Frank, and Dan Lungren to accompany H.R. 5949. Cable Television Copyright Act Amendments, of the rib Congress. HR 97-559-Part I assert that the Tribunal's "bureaucratically fixed royalties were unrealistically lower than their true market value." The cable royalty schedule was not established by the Tribunal. but by the Congress in Pub. L. 94-553. 46 FR 822-97.

"NCTA CRT. No. 81-1005, US Court of Appeals for DC Circuit, September 10, 1982.

rates paid by cable systems should be adjusted to reflect such changes."24

It is also essential to take into account the statements of the legislative drafters of these provisions that they did not contemplate the complete elimination by the Federal Communications Commission of its regulations on distant signal carriage and syndicated program exclusivity. Congressman Robert Kastenmeier, Chairman of the House Subcommillee on Courts, Civil Liberties and Administration of Justice wrote FCC Chairman Charles Ferris, March 13, 1980, quoted in 79 FCC 2d at 897, "We did not contemplate such a sweeping change in the regulatory structure when we drafted Public Law 94-553." It is thus necessary for the Tribunal to accommodate the statutory language to the reality of the situation existing in the cable television industry as a result of the Commission's actions.

Proceedings of the Federal
Communications Commission

The record of this proceeding includes references to certain findings of the Federal Communications Commission in matters before the Commission. The Congress has assigned exclusive jurisdiction in the matters covered by this proceeding to the Tribunal. The Commission acted on the

communications matters within its
jurisdiction and has disclaimed any
determinations concerning issues within
the jurisdiction of the Tribunal. We
express no views concerning
conclusions reached by the Commission
on matters of communications policy.
The subject matter of this proceeding
was not before the Commission. We
have reached our determination on the
basis of the record established in this
proceeding.

Other Proceedings of the Copyright
Royalty Tribunal

The Tribunal has completed two proceedings, and is currently engaged in a third proceeding for the distribution among copyright owners of the cable royalty fees. During these proceedings copyright claimants presented evidence which among other matters sought to establish that the secondary transmission of their copyrighted worked by cable systems was harmful to them and of a benefit to cable operators. Cable operators did not participate in those proceedings. The evidence and findings of those

proceedings cannot provide any bais for a decision in this proceeding, and such

"IR 94-1476, p. 1.7.

See 79 F.C.C. 2d at 762-63.