This subcommittee will be interested to know that more than 5,000 dwelling units in several apartments are served by a single antenna in the New York City area, which antenna receives New York City stations. This is far more connections than the average community antenna system will have. Community antenna systems are proposed for New York City to receive New York City stations. Does it make a difference whether a master antenna system is installed in several buildings to serve 5,000 families living in the buildings, or installed in the street of the same city to serve 5,000 families living in 5,000 buildings?

Does not the copyright proprietor contemplate reception by everyone, or hopefully everyone in town, when he licenses his program to the station? Of what concern to the copyright proprietor is it that some people use master antennas and others use individual antennas; or whether they own the antennas or rent them; or whether they pay for master antenna service directly or indirectly?

Can you logically exempt reception by means of a CATV system of local stations, as would seem to be fair since the copyright proprietor and broadcaster obviously contemplated reception in the same community, but at the same time impose liability on CATV reception where the CATV is outside the city where the television stations are located but in their grade A contours? This bill provides no such exemption and the copyright owners, I assume, would not agree to exempt grade A signals.

Every copyright proprietor and broadcaster contemplates reception within the grade A contour of the station and within the grade B contour, and for that matter beyond it. The Federal Communications Commission anticipated reception out to the grade B contours, and the fact is that it expected reception beyond grade B, as even a casual study of the Commission's Sixth Report and Order will show. Then is distance of the community antenna from the originating station a reasonable and workable criterion? I submit that it is not.

The Television Factbook, a standard reference source within the television industry, contains charts showing the grade A and grade B contours predicted for every commercial television station in the United States, and in addition shows, based upon studies made by market research bureaus, the television set coverage of each of those commercial stations. These studies are accepted and useful tools in the television industry and in almost every instance they will show effective commercial coverage beyond the grade B contour.

The station time buyers and the advertisers know this. Can you logically draw a line on the basis of distance of the CATV in question from the station in question? I don't know, but apparently the Register did not draw a distance line, and as far as I know no copyright proprietor has suggested one.

The fundamental misconception in this part of H.R. 4347 is that of trying to make something out of CATV which it is not. It is not a broadcaster; it does not sell programs; it does not control programing; it does not collect for programs; it does not negotiate for them. It is the effort to analogize CATV to a broadcast station or an exhibiting theater that is the root of the problem of logic. Someone, in my opinion, is comparing apples with oranges. H.R. 4347 can have logic to copyright protection against CATV only if it is logical to

say that no reception is permissible except by a privately owned home antenna, regardless of where the station is located and regardless of where CATV is located. I think what I have said before illustrates that this logic cannot be sustained.

There are other problems in H.R. 4347 which in my opinion make it unworkable, but I am leaving these for other papers and other witnesses in order to avoid unnecesary duplication and conserve the time of this committee.

However, I would like to say a brief word about television in Arizona and the value of community antenna service there. In Arizona we have few broadcast stations. CATV is a highly important adjunct of television reception in our State. We are sparsely settled and our small cities and towns distant from Phoenix and Tucson need and require CATV reception. Why should they not have it? Why should they bear the burden of a second copyright fee? Do they not purchase the same products advertised on television as the residents of Phoenix and Tucson?

Of course they do, and they have paid their fair share. The motion picture producers, distributors, syndicators, television program producers, the networks and the music society should not be permitted to persuade this committee that the copyright monoply should be extended to provide for a second royalty, the burden of which must be borne by the home television set owner.

I appreciate the consideration of this subcommittee.

Mr. KASTEN MEIER. Thank you, Mr. Corbitt.

I think we will proceed with all the witnesses and then if there are questions perhaps the witnesses will be available to answer questions at that time.

Mr. FORD. Mr. Tom Creighton.

Mr. KASTEN MEIER. Welcome to the committee, Mr. Creighton. You may proceed, sir.

STATEMENT OF TOM CREIGHTON, TEXAS COMMUNITY ANTENNA TELEVISION ASSOCIATION

Mr. CREIGHTON. Mr. Chairman and members of the committee, my name is Tom Creighton. I come from Mineral Wells, Tex., where I am a practicing attorney, and I also currently represent that town and 10 counties in the Texas State Senate.

I am here today representing the Texas Community Antenna Television Association, which is composed of 113 systems with 103,000 subscribing television homes, the great majority of which are located in the rural areas of Texas without adequate network television network signals.

One of the first CATV systems in Texas was built in my home town of Mineral Wells in 1950, just after the birth date of modern television. I know this system and feel that it is representative of those in other areas of our State. For example, systems in Graham and Tyler, Tex. were built at approximately the same time for the same

reasons.

Mineral Wells, a town of 14,000 people, is nestled in a valley surrounded by 4 small hills and the then low-powered television stations in Fort Worth, 40 miles away, offered an unsatisfactory or unviewable

signal to most of the Mineral Wells population. The remainder of the community antenna systems in Texas developed for precisely the

same reasons.

Unlike the history of many other eastern areas of the country, the Texas community antenna service was developed from its inception by private investors. For the most part, these investors were not professional engineers or industrialists, but rather technicians and television repairmen. These technicians and repairmen merely responded to the needs of their service customers for better television reception by providing a master antenna connection instead of the housetop or tower antennas they formerly installed. In short, instead of individual antennas, the television repairman gave his customers a better connection to a more efficient antenna.

When the Fort Worth and Dallas television stations began operating in the late 1940's they were, at best, able to broadcast only a fringe quality signal in Mineral Wells. As shown by the contour coverage charts in Television Factbook, Mineral Wells is just within the grade B contour for all of these stations.

Thus, the CATV system enabled the broadcaster and copyright owners to achieve more satisfactory coverage of an audience within their intended coverage area. And it wasn't surprising that local sales of television sets boomed immediately after community antenna service was installed. Indeed, the independent television station, KTVTTV, which went on the air in 1955, was able to take advantage of the audience market created by the Mineral Wells and nearby community antenna systems.

This more efficient reception by community antenna television viewers undoubtedly increased the copyright royalties paid by the broadcaster at that time because the broadcaster's overall coverage increased. In any event, the accepted method under the American system of broadcasting for compensating copyright proprietors is through advertising, and the number of television sets of each station enter into the advertiser's determination of the cost per thousand sets of advertising on the station. Thus, the CATV-connected receiver does enter into the determination of whether or not an advertiser will buy a station.

Despite the fact that three Fort Worth-Dallas television stations have increased their operating power and now produce a good quality picture for Mineral Wells homes with rooftop antennas, the Mineral Wells system continues to grow. This growth can be attributed to two factors:

(1) The hilly terrain makes it advisable for some people who are disadvantageously located within the town to use the Mineral Wells antenna system.

(2) The convenience of a plug-in antenna connection eliminates certain inconveniences associated with housetop antennas, for example, those antennas that are blown and destroyed by the frequent wind. storms in our area of the country.

Incidentally, let me say that I have one on the top of my house right now that is just like this.

I submit to this subcommittee that it is unfair to impose a copyright fee upon people who happen to live where there are hills and wind.

storms.

Television broadcasters recognize the value of the community antenna as evidenced by their interest in extending their coverage. By virtue of this extension of coverage, they are able to charge advertisers higher rates. In this way, they get more for their product.

Since the copyright proprietor receives a portion of the broadcasters' revenues from advertisers, he, in turn, receives or should receive an increased royalty. In addition to this increased payment, copyright proprietors are now asking this subcommittee for an additional payment from the same source for precisely the same coverage. At a meeting of the Texas Community Antenna Association last May in Dallas, Tex., representatives of WBAP-TV and KTVT-TV, Fort Worth, and WFAA-TV, Dallas, were in attendance and expressed real interest and concern in the extension and continued availability of community antenna services. The interest and concern of these broadcasters is obviously motivated by their desire to increase revenues for their own stations, rather than from some charitable impulse for the benefit of community antenna systems.

Every man on this subcommittee as well as in the Congress consistently seeks to pursue the public interest. It is a constant and oftentimes confusing pursuit, and I submit to you that public interest will not be served by imposing a discriminatory double burden upon certain Americans simply because they live in geographical areas that have hills and windstorms.

Mr. KASTENMEIER. Thank you, Senator Creighton.

We appreciate hearing from someone else in the legislative process. While you are here, you may note that our sister subcommittee, Subcommittee No. 5 of the Judiciary Committee, is having hearings on reapportionment. While you are in town, you may want to go over

there.

Mr. CREIGHTON. Mr. Chairman and members of the committee, we have just been confronted with and disposed of that problem temporarily. Thank you for your courtesy.

Mr. FORD. Mr. Clifton W. Collins.

Mr. KASTENMEIER. Mr. Collins, welcome to the committee.
You may proceed, sir.

STATEMENT OF CLIFTON W. COLLINS, GENERAL COUNSEL, PACIFIC NORTHWEST COMMUNITY TELEVISION ASSOCIATION, INC.

Mr. COLLINS. I might say at the outset there are some attachments to which I will refer that are on the back of the statement.

My name is Clifton W. Collins, and I reside in Ephrata, Grant County, Wash. I am a partner in the law firm of Collins & Allan of Ephrata, Wash.

I am general counsel of the Pacific Northwest Community Television Association, Inc., and have been its attorney since its formation of more than 10 years ago.

Our association is the largest CATV association geographically and is the second largest in terms of CATV viewers represented in its membership.

Our association includes the States of Washington, Oregon, Idaho. and Montana. In these States there are CATV systems in more than 240 communities serving in excess of 172,000 subscribers. On behalf

of the association, I wish to express my appreciation for the opportunity to appear before your committee.

Our area, although large geographically, is sparse in terms of population. There are only a few urban areas which can support commercial television broadcast facilities. As a result, a large percentage of our residents reside at substantial distances from existing TV stations or in communities isolated from direct off-the-air signals due to rugged terrain. This has resulted in a public need for CATV systems.

Compared to other areas in the United States, a relatively high percentage of residents in our area receive their television through CATV systems. The percentages are: Washington, 8 percent; Idaho, 12 percent; Oregon, 13 percent; and Montana, 20 percent. This is due to the mountainous nature of the area which makes it difficult or impossible for many residents who live outside the large metropolitan areas with their television stations to receive direct off-the-air TV signals.

Even in the city of Seattle where, by the way, there are five television stations, there are many residents who cannot receive the local Seattle stations directly off the air because of the hilly terrain, and they, too, must rely on CATV systems.

The members of this committee have already heard testimony from other witnesses emphasizing the unfairness of penalizing these citizens who, because their place of residence forces them to use master antenna systems, would be deprived of their existing television service or would be forced to pay substantially higher charges for the privilege of receiving television programs. This prior testimony is particularly applicable to our residents in the Pacific Northwest and we join with those witnesses so testifying.

It has been claimed that copyright owners are being deprived of profits because CATV systems are receiving television signals and distributing them to their subscribers. It is the position of our association that the contrary is true-that copyright owners have received and are now receiving payment for their creative works because of the very existence of CATV systems. Copyright owners extract fees for use of copyrighted material based upon the ability of the television station to pay the fee charged. The television station's ability to pay is related to the revenues of that station as reflected in its rate card.

The time charges made by TV stations are primarily a product of the number of television viewers within the station's coverage area. CATV systems in the Pacific Northwest area have substantially extended the coverage area of television broadcast stations.

For example, in Portland, CBS affiliate KOIN-TV, channel 7, has a prime time rate of $1,000 per hour. It claims coverage of 541,200 television homes. This compares with the CBS affiliate in New York City, WCBS-TV, channel 2, which has a prime time rate of $10,000 per hour. It claims coverage of 5, 655,300 television homes.

In all areas of the United States, stations include in their claimed coverage not only television homes within their grade A and grade B contours whether received by individual or master antennas, but also homes outside those contours which receive signals by means of CATV systems or otherwise.