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$1,032,774

78

$896,381

-450

-130

Total

To summarize the table:

the TPT proposal, as ap

plied to its systems, results in an overall reduction in

copyright fees of $136,393, or 13 percent from $1,032,774 to $896,381 relative to H.R. 2223. Only the highest revenue

class of systems--those with annual revenues in excess of

$640,000--show a decrease in fees.

All other revenue classes

of systems show increases.

Viewed from a slightly different perspective, the

following table presents the percentage distribution of copyright fee payments by revenue class under H.R. 2223 and the

TPT proposal respectively.

Among other things, it shows that

the relative contribution of the largest revenue class is

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reduced from 77 percent to 60 percent of total copyright fee

payments under the TPT proposal, while the relative contri

bution of the remainder increases from 23 percent to 40 per

cent.

COMPARISON OF COPYRIGHT FEES FOR TELEPROMPTER CABLE SYSTEMS

PER 1.R. 2223 AND TELEPROMPTER PROPOSAL

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The purpose of this study is twofold: (1) to evaluate the conceptual and administrative soundness of the TelePrompter (TPT) proposal as an appropriate alternative to the provisions of H.R. 2223 for determining copyright liability among cable systems for the retransmission of copyrighted broadcast signals and (2) to evaluate the specific impact of the proposal with respect to copyright liability on (a) TPT

cable systems for which relevant base data are publicly available and (b) copyright proprietors. Additionally, in an

appendix to this study, we present an analysis of the impact

of the TPT proposal upon systems located within the Congressional Districts of the members of the House Judiciary Subcommittee on Courts, Civil Liberties and the Administration of

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As a preamble to its proposal TPT states its "basic

position is that there should be no copyright liability of any sort for cable retransmission of broadcast signals." However,

in what it characterizes as a compromise, the TPT proposal does make some provision for copyright liability.

The pro

posal is based fundamentally on distinctions it draws among

local signals and network and non-network distant signals, and concludes that only the last, non-network distant signals

should be subject to copyright liability.

The specific lan

guage of TPT's redraft of the statute reads "a 'copyright

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qualifying broadcast station' shall be any broadcast station whose signal is not required to be retransmitted by the cable

system pursuant to the rules and regulations of the (FCC)."

Stated another way, the TPT proposal would grant copyright liability only for non-local broadcast stations (i.e., those which may not insist upon retransmission of their signals), and then only the non-network originated portions of the

signals of such stations.

It should be noted here that the

terms "distant signal," "copyright qualifying broadcast station" and "signal(s)...not required to be retransmitted" are not terms of art which lend themselves to precise definition, especially within the context of the FCC's complex rules on signal carriage for different types of stations for various

purposes.

They are, rather, terms which are ambiguous and

which invite definitional disputation. This ambiguity is characteristic of the whole TP proposal, but specifically of its formula for determining copyright liability. Without otherwise commenting here on the philosophy, equity or realism of the proposal, it would appear at best to be an enormous

administrative burden.

III. COMPONENTS OF THE TELEPROMPTER PROPOSAL

The critical substance of the TPT proposal is that only "non-network programming of distant stations" be subject to copyright liability. The proposal attempts to establish a marketplace rationale for this position (based on a "model of the broadcasters") by focusing on:

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should be available for copyright payments, and

2. the value of each distant signal for copyright

purposes.

To place the TPT proposal in perspective we shall examine its specific components point by point. Cable system copyright liability is determined by application of the for

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The product of the first two components (A) x (B) of the TPT formula defines the base of cable system revenues that

would be subject to copyright liability. The TPT proposal adjusts total cable system revenues by a factor which is the

ratio of "programming costs" (in reality, non-network programming costs) to "total revenues" of "all television sta

tions" (28 percent in this hypothetical example).

Our

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57-786 0 - 76 - pt.3 - 38

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