Mr. BLISS. In addition, there are several hundred cable systems that cannot carry any distant signals. We don't have a list because, as Congressman Kastenmeier said, it is a very complicated formula. But I understand from talking to counsel-and they have a lot of clients who fall into this category-there are hundreds of cable systems in the minor markets who can carry no distant independent signals.

We believe this is a gross injustice, and that every viewer should have the opportunity of viewing three distant signals, just like in the big cities. There are potentially 80 million viewers, 80 million

constituents, in markets 51 through 214, the rural markets, that are being deprived of 1 or more distant signals due to the penalty fee.

The bill that would normalize this gross injustice is H.R. 2902, introduced by Congressman Mike Synar. We urge you to cosponsor and/or support this legislation. It fixes a gross injustice and it is passable with your help.

H.R. 2902 does not eliminate copyright fees. Cable systems will still pay copyright fees for every distant signal. They just don't pay the penalty fee.

Every study ever done about cable or for cable indicates that viewers take cable for two basic reasons. The first primary reason is pay TV, and the second is for distant signals. Every study ever done says that the viewers want distant signals. I know that each and every one of you supports equality. Please support distant signal equality, support H.R. 2902.

Thank you.

Mr. KASTENMEIER. Thank you, Mr. Bliss. We will have some questions for you later.

[The statement of Mr. Bliss follows:]

STATEMENT OF ROY L. BLISS, EXECUTIVE VICE PRESIDENT, United VIDEO, INC.

Thank you for this opportunity to present my views.

The Copyright Royalty Tribunal's recent 3.75 percent penalty fee cost my company (United Video) lost out of pocket revenues of $1,143,274.00 this year. We believe that it also cost us another $1 million in customers who would have taken the service in the next twelve months, but cannot now take it because of the 3.75 percent penalty fee.

This breaks down to roughly $95,000.00 per month in lost revenues and $85,000 per month in lost near term potential. A total of $180,000 per month forever.

In terms of viewers, or in political jargon, constituents, this equates to "pulling the plug" on approximately 5 million viewers of the WGN Superchannel. This is a list of the cable systems and the number of constituents effected, on a state by state basis. As you can see, Congressman the CRT pulled the plug on of your constituents.

I have been in the cable television business all of my life. My dad started a cable system in the mountains of Wyoming in 1952. In 1952, there were no distant signal regulations; there were no regulations at all. Everyone wanted television and in many, many locations, cable television was the only television available. All television was imported distant signals. There are still thousands of cable television systems in the United States that rely on imported distant signals for their survival. As the cable industry began to grow, two interest groups began to take notice. The first was the broadcast industry. They took notice in two ways: The first way was to fight cable as an intrusion on their God-given right to be the only disseminators of video information; the second and more enlightened broadcasters got involved in cable and today more than half of the cable industry is owned or controlled by broadcast interests.

The second group that took notice of cable was the Copyright interests, led by the Motion Picture Association of America. Several motion picture companies made forays into cable in the late 50's and early 60's, but for one reason or another got out. I can only assume that they decided the real "big" money was in copyright fees, best of all, the government collects the fees for you.

Back to the broadcasters, they brought their tremendous power to bear in the late 60's and early 70's, and through a series of regulations including distant signal restrictions of '72, got the FCC to freeze the cable industry. However, everywhere that cable went, subscribers were sure to follow. It was an industry that could not be denied and it continued to grow. Starting in mid-70's, the FCC slowly began relaxing some of their more restrictive rules, and finally in 1980, after an exhaustive study, the FCC in its infinite wisdom did away with the distant signal rules on the basis that they were ill-conceived and accomplished absolutely nothing.