UNDER THESE STANDARDS INCLUDE: (1) THE NATIONAL DISTRIBUTION
OF THE SIGNAL; (2) THE ACTIVE PROMOTION OF THE SIGNAL AS A
NATIONAL PROGRAM SERVICE; (3) THE INSTITUTION OF NATIONAL
ADVERTISING SALES PRACTICES TO CAPITALIZE ON THE AVAILABILITY ·
OF A NATIONAL CABLE AUDIENCE; (4) THE AVAILABILITY OF NATIONAL
AUDIENCE MEASUREMENT DATA (ESSENTIAL TO THE DETERMINATION OF
NATIONAL AD RATES AND THE VALUE OF EXHIBITION RIGHTS); AND
(5) THE FULL KNOWLEDGE OF AFFECTED PARTIES OF THE CHARACTERISTICS
AND OPERATION OF THE MARKET.

MR. CHAIRMAN, I WANT THIS SUBCOMMITTEE TO UNDERSTAND CLEARLY
THAT H.R. 3419 WOULD APPLY NOT ONLY TO WTBS BUT TO ANY DISTANT
SIGNAL THAT ACTIVELY ENGAGES IN A NATIONAL MARKETING STRATEGY
AND SEEKS TO SERVE A NATIONAL AUDIENCE. TODAY, WTBS IS CLEARLY
THE PRIMARY STATION THAT CAN SAY THAT IT DIRECTLY COMPENSATES
COPYRIGHT HOLDERS FOR ITS NATIONAL CABLE AUDIENCE. IT MAY BE
THAT OTHERS ARE PROVIDING INCREASED COMPENSATION AS WELL, OR THAT
THEY INTEND TO DO SO IN THE NEAR FUTURE. THE BILL WOULD PERMIT
THEM TO MAKE THE NECESSARY DEMONSTRATION TO THE CRT AS WELL.

SUPERSTATIONS SERVE AN IMPORTANT PUBLIC SERVICE BECAUSE OF THE INFORMATION AND PROGRAMMING DIVERSITY THEY PROVIDE TO THE PUBLIC, BECAUSE OF THE COMPETITION THEY INTRODUCE INTO THE MARKETPLACE, AND BECAUSE THEY PROVIDE A MEANS OF GREATER DIRECT COMPENSATION FOR COPYRIGHT HOLDERS WHICH OVER TIME WILL REDUCE THE NEED FOR A COMPULSORY LICENSE. THUS, I BELIEVE THAT CONGRESS SHOULD ENCOURAGE BROADCASTERS -- PARTICULARLY THOSE WHO ARE ALREADY WIDELY CARRIED IN DISTANT MARKETS TO PURSUE THIS BROADER AND

WTBS STRATEGY HAS DISTINGUISHED IT FROM OTHER DISTANT SIGNALS AND, IN FACT, FROM OTHER SUPERSTATIONS. AS WTBS' NATIONAL AUDIENCE HAS GROWN, IT HAS BEEN FORCED BY MARKETPLACE DEMANDS. TO PAY INCREASINGLY HIGH AMOUNTS TO COPYRIGHT HOLDERS FOR THE RIGHTS TO THE PROGRAMS THEY AIR. COPYRIGHT HOLDERS, WHO ARE NOT REQUIRED BY THE COMPULSORY LICENSE TO SELL THEIR PROGRAMS, FREELY NEGOTIATE WITH WTBS WITH FULL KNOWLEDGE OF ITS NATIONAL AUDIENCE AND NATIONAL MARKETING STRATEGY. AS WTBS' NATIONAL CABLE AUDIENCE HAS EXPANDED, SO TOO HAVE ITS LICENSING PAYMENTS TO COPYRIGHT HOLDERS INCREASED. AN AGREEMENT BETWEEN WTBS AND THESE. COPYRIGHT HOLDERS IS BY ITS VERY NATURE A MARKETPLACE NEGOTIATION THAT REPRESENTS A FREE DECISION BY BUYER AND SELLER. IN THIS ARENA, NO ADDITIONAL GOVERNMENT INTERVENTION AND PRICE REGULATION IS NECESSARY.

THE BILL WOULD NOT DIRECTLY EXEMPT ANY SUPERSTATION FROM THE RATE INCREASE, HOWEVER; IT MERELY ESTABLISHES A CONGRESSIONAL POLICY THAT, WHERE THE MARKET IS ADEQUATE TO INSURE COMPENSATION OF COPYRIGHT HOLDERS, THE CRT's RATE INCREASE PREMISED IN SECTION 80L (B) (2) (B) OF THE ACT SHALL NOT APPLY. IT RESERVES TO THE CRT THE AUTHORITY TO IMPLEMENT THAT POLICY PURSUANT TO STANDARDS PROVIDED IN THE BILL TO DETERMINE THE EXISTENCE AND OPERATION OF THAT MARKETPLACE.

THE PREREQUISITES TO THE OPERATION OF SUCH A FREE MARKET (AND TO THE CLASSIFICATION OF A CABLE RETRANSMITTED, DISTANT BROADCAST SIGNAL AS A "NATIONAL CABLE BROADCAST NETWORK")

UNDER THESE STANDARDS INCLUDE: (1) THE NATIONAL DISTRIBUTION
OF THE SIGNAL; (2) THE ACTIVE PROMOTION OF THE SIGNAL AS A
NATIONAL PROGRAM SERVICE; (3) THE INSTITUTION OF NATIONAL
ADVERTISING SALES PRACTICES TO CAPITALIZE ON THE AVAILABILITY
OF A NATIONAL CABLE AUDIENCE; (4) THE AVAILABILITY OF NATIONAL
AUDIENCE MEASUREMENT DATA (ESSENTIAL TO THE DETERMINATION OF
NATIONAL AD RATES AND THE VALUE OF EXHIBITION RIGHTS); AND
(5) THE FULL KNOWLEDGE OF AFFECTED PARTIES OF THE CHARACTERISTICS
AND OPERATION OF THE MARKET.

MR. CHAIRMAN, I WANT THIS SUBCOMMITTEE TO UNDERSTAND CLEARLY
THAT H.R. 3419 WOULD APPLY NOT ONLY TO WTBS BUT TO ANY DISTANT
SIGNAL THAT ACTIVELY ENGAGES IN A NATIONAL MARKETING STRATEGY
AND SEEKS TO SERVE A NATIONAL AUDIENCE. TODAY, WTBS IS CLEARLY
THE PRIMARY STATION THAT CAN SAY THAT IT DIRECTLY COMPENSATES
COPYRIGHT HOLDERS FOR ITS NATIONAL CABLE AUDIENCE. IT MAY BE
THAT OTHERS ARE PROVIDING INCREASED COMPENSATION AS WELL, OR THAT
THEY INTEND TO DO SO IN THE NEAR FUTURE. THE BILL WOULD PERMIT
THEM TO MAKE THE NECESSARY DEMONSTRATION TO THE CRT AS WELL.

SUPERSTATIONS SERVE AN IMPORTANT PUBLIC SERVICE BECAUSE OF THE INFORMATION AND PROGRAMMING DIVERSITY THEY PROVIDE TO THE PUBLIC, BECAUSE OF THE COMPETITION THEY INTRODUCE INTO THE MARKETPLACE, AND BECAUSE THEY PROVIDE A MEANS OF GREATER DIRECT COMPENSATION FOR COPYRIGHT HOLDERS WHICH OVER TIME WILL REDUCE THE NEED FOR A COMPULSORY LICENSE. THUS, I BELIEVE THAT CONGRESS SHOULD ENCOURAGE BROADCASTERS PARTICULARLY THOSE WHO ARE ALREADY

WIDELY CARRIED IN DISTANT MARKETS TO PURSUE THIS BROADER AND

14

MORE AGGRESSIVE STRATEGY. IF WGN OR WOR HAVE NOT YET CHOSEN
TO BECOME ACTIVE SUPERSTATIONS, THEN H.R. 3419, WHICH PROVIDES
THE MECHANISMS FOR THEM TO BECOME CLASSIFIED AS NATIONAL CABLE.
BROADCAST NETWORKS, MAY BE THE INCENTIVE THEY NEED TO MAKE
THE FINAL DECISION TO PURSUE THIS MARKETING STRATEGY. IF SO,
THE BILL WILL HAVE ADVANCED COMMUNICATIONS POLICY AS WELL AS
COPYRIGHT POLICY. AND THAT MR. CHAIRMAN, I WOULD BE GLAD TO
EXPLAIN TO MY CONSTITUENTS BACK HOME.

H.R. 3419 ALSO RECOGNIZES THAT THE CRT ITSELF NEEDS IMPROVE-
MENT. THE TRIBUNAL CURRENTLY IS AUTHORIZED TO HAVE FIVE..
COMMISSIONERS, BUT THE COPYRIGHT ACT DOES NOT PROVIDE THE
CRT WITH ANY PROFESSIONAL STAFF TO HELP ANALYZE THE EVIDENCE
PRESENTED TO THEM. THE BILL REDUCES THE CRT FROM FIVE TO THREE
COMMISSIONERS AND, WITH THE FUNDS SAVED FROM THIS REDUCTION, ADDS
A GENERAL COUNSEL AND CHIEF ECONOMIST. THIS PROVISION GENERALLY
FOLLOWS THE RECOMMENDATIONS OF THE 1981 GAO REPORT WHICH URGED
THAT THE CRT BE PROVIDED WITH THE RESOURCES NECESSARY TO REFORM
ITS JOB EFFECTIVELY.

98TH CONGRESS 1ST SESSION

H. R. 3419

To amend title 17, United States Code, regarding the Copyright Royalty

Tribunal.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 1983

Mr. SAM B. HALL, JR., introduced the following bill; which was referred to the Committee on the Judiciary

I

A BILL

To amend title 17, United States Code, regarding the Copyright Royalty Tribunal.

1 Be it enacted by the Senate and House of Representa

2 tives of the United States of America in Congress assembled,

3

4

SHORT TITLE

SECTION 1. This Act may be cited as the "Free Market

5 Copyright Royalty Act of 1983".

6

7

8

9

10

FINDINGS

SEC. 2. The Congress hereby finds that—

(1) in order to promote the availability and diversity of nationally distributed television programing for the public, national cable broadcast networks are