2

needed that will provide to cable subscribers a full range of news, information, sports, and entertainment services; and

(2) the Copyright Royalty Tribunal lacks adequate professional staff to perform effectively its statutory functions.

DISTANT SIGNAL ROYALTIES

SEC. 3. Section 801(b)(2) of title 17, United States

9 Code, is amended

(1) striking out “; and" in subparagraph (D) and inserting in lieu thereof a period; and

(2) inserting at the end thereof the following new

subparagraph:

“(E)(i) Notwithstanding the provisions of subparagraph (B), the Tribunal shall exempt from any adjustments in copyright royalty rates made pursuant to this subsection the carriage by any cable system (including functional equivalents thereof), as defined in section 111(f) of this title, of any national cable broadcast network signal. Carriage of a national cable broadcast network signal pursuant to such exemption shall be subject solely to the royalty rate provisions of section 111(d)(2)(B), as adjusted in accordance with section 801(b)(2)(A), and shall not count against the

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3

complement of signals referred to in clauses (i)

and (ii) of subparagraph (B). For purposes of this

subsection, the term 'national cable broadcast nettelevision broadcast station that

work' means

has been classified as such by the Tribunal. The Tribunal shall so classify any television broadcast station that requests such classification upon the

certification by the station that

"(I) the station's signal is distributed nationally for carriage by cable systems and the station promotes such carriage;

"(II) the station's commercial practices. and rates seek to compensate the station for its national audience;

"(III) the station's share of the national viewing audience is measured regularly by the major national rating measurement services; and

"(IV) copyright owners who supply works for performance or display over the

station are aware of the national distribution

of the station's signal.

"(ii) The Tribunal shall issue, within thirty

days after its receipt of such certification, its clas

sification of the station as a national cable broad

1

23

4

5

6

7

8

4

cast network if it finds that the certification meets

the standards set forth in this section. The decision of the Copyright Royalty Tribunal to deny classification as a national cable broadcast net

work shall be reviewable de novo in Federal dis

trict court; and".

MEMBERSHIP OF THE TRIBUNAL

SEC. 4. (a) Upon expiration of the terms of office of the

9 three commissioners of the Copyright Royalty Tribunal 10 whose terms expire on September 27, 1984, no person shall 11 be appointed to fill either of two of such offices after such 12 date. Such two offices shall be abolished effective on Septem13 ber 28, 1984.

14

(b) Effective on the date on which the offices of two

15 Tribunal commissioners are abolished pursuant to subsection 16 (a) of this section, section 802(a) of title 17, United States 17 Code, shall be amended by striking out "five" the first place 18 it appears in the first clause and inserting in lieu thereof 19 "three".

20

21

STAFF OF THE TRIBUNAL

SEC. 5. (a) Section 805 of title 17, United States Code,

22 is amended by adding at the end thereof a new subsection as 23 follows:

24

"(c) The Tribunal shall appoint, and fix appropriate

25 compensation for a general counsel and a chief economist to

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1 carry out the functions customarily performed by persons 2 with such titles.".

3 (b) The appointments mandated by section 805(c) of title 4 17, United States Code, as added by subsection (a) of this 5 section shall commence no earlier than the date on which the 6 membership of the Tribunal is reduced from five commission7 ers to three commissioners, pursuant to section 4 of this Act.

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Mr. KASTENMEIER. I have just a couple of questions, and perhaps other members of the subcommittee do too.

Congressman Synar, why do you feel the tribunal raised the rates so significantly? Do you conclude that there was any special purpose to be achieved other than adjustment of rates?

Mr. SYNAR. No, we don't. In reviewing what the CRT did, we can't really justify it on any economic grounds. In fact, the economic impact has been tremendous.

Really, when one looks at it, one is confused, because if one looks at what the FCC was trying to do with deregulation, what the CRT did was go in the opposite direction. As some of the members may not be familiar with, because I don't think it was spelled out, the CRT basically put together a three-tier system of markets, with large markets being able to have three distant signals, medium markets two signals, and small markets, where most of us are from, one signal, and after that, you have to pay your copyright royalty on that.

There is really no justification. As Sam pointed out and, I think, our witnesses who will follow, the economic impact and the unfairness to rural areas and smaller towns is unbelievable. That is why I think the legislation was introduced, because there is no justification.

Mr. KASTENMEIER. The two bills are significantly different with respect to the modifications to the Copyright Royalty Tribunal that Congressman Hall suggests. Have you looked at those and do you have any objections or observations about those modifications?

Mr. SYNAR. I am glad you asked me that, Bob, because I think that one of the things I would like to get on the record is these bills are not mutually exclusive. Sam has an excellent bill. My concern in H.R. 2902 is really addressing the rural cable and the differentiation between the three separate markets.

Sam's approach is more of a long-term approach in trying to deal with what we have seen have been problems with the CRT. I think it is something that this committee should consider. Mine is an immediate short-term thing.

One of the things I think Sam's bill does, and something which this committee needs to recognize, is that, unless we begin to look at changes with the CRT, this subcommittee is going to become the court of appeal on a lot of the decisions when it comes to copyright. I know that you and I and others who serve on here don't want that to happen. We don't want to have to deal with every decision the CRT does.

In recognizing that, I think what we want to do is to work with the CRT to give them the professional staff and maybe do some of the things that Sam is pointing out. But I see no reason why these two bills can't work together in accomplishing not only short-, but long-term goals.

Mr. KASTENMEIER. In fact, I probably should ask Sam this. Some of the suggestions you have made concerning the CRT have been considered in the past by this subcommittee. We haven't actually implemented anything in legislative form, but they are not new ideas. As a matter of fact, the General Accounting Office made recommendations along this line.