any such adjustment shall apply only to the affected television
broadcast signals carried on those systems affected by the change.

As explained by the House Judiciary Committee, this adjustment authority was granted to the CRT because the FCC's distant signal and syndicated exclusivity rules then in effect afforded the copyright owner a measure of protection. The House Report states (H.R. Rep. No. 94-1476, 94th Cong. 176):

The purpose of this provision is to give the Commission broad
discretion to reconsider the royalty rates applicable to (but only to)
the carriage of any additional distant signals permitted under
therules and regulations of the FCC after April 15, 1976. The present
FCC rules limiting the number of distant signals that may be carried
by cable systems have the effect of protecting copyright owners by
restricting the amount of television programs. It is the Committee's
judgment that the royalty rates paid by cable systems should be
adjusted to reflect such changes.

With respect to subclause (C), the House Report states (id. at 177):

The purpose of this subclause is similar to that of Section 801(b)(2)(B).
The syndicated and sports program exclusivity rules of the FCC have
the effect of protecting copyright owners by restricting 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 the royalty rates paid by cable
systems should be adjusted to reflect such changes.

Thus, the 1976 Copyright Act reflects a legislative intent not to foreclose the Commission from making changes in its rules based on communications policies, even though such changes might affect the reasonableness of the cable 26/ royalty rates set forth in Section III of the Copyright Act. Rather, Congress chose to incorporate into the Copyright Act a mechanism to adjust the royalty rates to make them reasonable in light of subsequent Commission actions. The House Report explicitly recognized (p. 177) that the Commission might act so as

26/ Moreover, Section 301(d) of the 1976 Copyright Act provides that : "Nothing in this title annuls or limits any rights or remedies under any other Federal Statute" (17 U.S.C. 301(d)). This includes rights arising under the Communications Act. See, Nimmer on Copyright, Sec. 101 (B)(4).

to decrease or increase the protection realized by copyright owners under its rules, and the CRT is authorized to adjust the royalty rates accordingly (i.e., either up or down).

3.

The legislative history of the Copyright Act shows that Congress did not intend to affect the Commission's regulatory authority under the Communications Act to effectuate communications policies.

It is common knowledge that Congressional action on copyright legislation was long delayed pending a resolution of how to treat cable television. At first, Congress incorporated into the copyright legislation provisions that would have codified communications aspects. In commenting on this approach, the Commission took the position that these matters should "not be written into substantive law but left to agency discretion" because they "could be more effectively handled through the flexible approach afforded by the administrative process." (Testimony of FCC General Counsel Ashton Hardy, Hearings before the House Judiciary Committee on H.R. 2223, 94th Cong., Ist Sess. 437). As the Register of Copyrights later pointed out with respect to 1966-1967 Copyright provisions, "it was obvious that the bill as it stood had enormous communications implications, which produced an unfortunate jurisdictional dispute between the Judiciary and Commerce Committees, which got onto the floor, as I am sure the Chairman remembers well" (Hearings on H.R. 2223, 94th Cong., 1st Sess. 1814-1815). See 113 Cong. Rec. 3624-3626, 3636-3637, 3644-3647, 3857-3859. In an effort to save that copyright legislation, the House deleted the cable section entirely and sent the problem to the Senate, which failed to act on it.

After the 1971 consensus agreement between the National Cable Television Association and the Motion Picture Association of America, Inc., the Commission's then Chairman Dean Burch, by letter dated January 26, 1972, to Senator McClellan (Chairman of the Subcommittee on Patents, Trademarks and Copyrights), stated that the Commission was endeavoring to adopt rules to

implement the consensus and that a primary factor was "the probability that Commission implementation of the consensus agreement will, in fact, facilitate the passage of the cable copyright legislation" (Hearings before the Senate Subcommittee on Patents, Trademarks and Copyrights on S. 1361, 93rd Cong., Ist Sess., 309). In replying on January 31, 1972, Senator McClellan agreed that FCC implementation would help facilitate copyright legislation and stated his intention to resume active consideration of copyright as soon as the FCC acted (id. at 310 ).

After the adoption of the Commission's 1972 rules for cable television, the Senate considered and passed, in September 1974, a copyright bill that had cable provisions with communications policy ramifications. Because of the effect on FCC jurisdiction, the Senate Commerce Committee asked for and was granted a referral. Its report complains repeatedly that the short referral time made hearings impossible despite the potential effect on television service (S. Rept. No. 93-1035, 93rd Cong., 2d Sess. 66, 71). The Commerce Committee requested joint consideration in the future of any copyright legislation codifying communications policy (id. at 66).

After such experiences, the House and Senate Judiciary Committees became extremely sensitive about not encroaching on the communications jurisdiction of the Commerce Committees and the FCC, despite the fact that they were considering copyright provisions for cable that were based on the particular regulatory scheme the Commission adopted for cable in 1972. This dilemma is pointed up in a colloquy between Congressman Pattison and FCC General Ashton Hardy (Hearings before the House Judiciary Committee on H.R. 2223, 94th Cong., 1st Sess. 441-442):

Mr. Pattison. I also see potential conflicts in your jurisdiction
between the copyright law and the FCC's jurisdiction in the
area of non-duplication of signals and exclusivity and also in the
area of the use of translators, which we have not talked about.
And I wonder if you would just comment a little bit more about
the problems. I realize that the Southwestern case was decided

and said that you have jurisdiction, but that was in the advance of copyright law. Now, suppose we pass a copyright law here that relates and governs cable, is that not going to cause some jurisdictional problems between the FCC and copyright law?

Mr. Hardy. I am not sure that we will have any problems with our jurisdiction. If we were to feel that there were jurisdictional problems, I am sure we could submit to Congress proposed legislation to clarify the jurisdiction of the Commission. Insofar as this bill is concerned as it relates to the areas you just mentioned, that being the use of translators, the use of microwave facilities, we do not believe that there is anything that you will be carving into statutory stone which would affect our jurisdiction. Were the courts to so construe your statute, then we would, of course, have to come to Congress for some clarifying legislation.

Mr. Pattison. My point is once the cable system is paying a copyright fee, as they are not now, then questions arise of how they can use their license. It seems to me that our legislation is sort of in the situation that if then your legislation changes, in other words, your rules change, then our legislation, to the extent is was based upon your legislation at that time becomes somewhat impractical.

Mr. Hardy. I can only say to you I know of no present rulemakings which would affect it.

Mr. Pattison. Well, for instance, you establish a fee, for instance, for cable operators based upon the fact that they do have the nonduplication rules. Assume that. And I do not suppose that it is going to happen, but just for the purpose of argument, just as an example, assume that you do away with your non-duplication rules. Then, of course, the fee would have to perhaps be different.

Mr. Hardy. Well, I know of nothing presently pending before the Commission which would indicate the Commission anticipates removing exclusivity protection or non-duplication protection. Mr. Pattison. That is not my point. The point is that it is obvious a change in your rules will reflect upon the statute that we ultimately pass, based upon the rules as they exist right now.

Mr. Hardy. I can only respond by saying, I suppose, Congress has to adopt legislation based on a situation as it exists, leaving as much flexibility as possible for future change. I really do not know how to respond to your question, Mr. Pattison, and I am not trying to evade it.

Mr. Pattison. No. I understand.

Mr. Hardy. But I really do not know how to answer that. I can only
say to you that all that Congress can do is adopt legislation
based upon the present statute, and I know of no plans, I know
of no pending rulemakings which would change the statute from
the Commission standpoint, from its regulatory standpoint, so I
don't know how to respond to that, how you can leave that
flexibility.

Mr. Pattison. I guess the problem is that we are dealing in an area
that is so rapidly changing, the technology is so rapidly
changing, that we really cannot foresee what kinds of changes
in technology will occur and, therefore, what rule you are going
to adopt in response to that technology.

Mr. Hardy. I suspect that we have the same problem at the
Commission.

Mr. Pattison. So, it would seem to me, knowing that there are
probably going to be changes, that maybe we ought to think in
terms of building in some sort of mechanism so that those
changes can be coordinated. I do not know how you do that.

Apart from shedding light on some of the background reasons for the CRT royalty adjustment mechanism in Section 801 of the Copyright Act, this exchange is significant for the absence of any suggestion that the FCC would lack authority to change its rules because of any provisions in the Copyright Act. There was no referral to the Commerce Committees of the bills that became the Copyright Act of 1976 (S. 22 and H.R. 2223), and the Judiciary Committees and their members repeatedly stressed that these bills did not interfere with the jurisdiction of the Commission or the Commerce Committees to affect communications policy.

27/

At the time of this exchange, H.R. 2223 did not contain any provision for CRT royalty revisions in light of FCC rule changes.