from major TV markets, are liable for copyright fees substantially in excess of the nominal levels contemplated in H.R. 2223, and in excess of fees paid by larger systems. As

applied to TPT's own systems, the following table illustrates

Another effect of TPT's proposal is that it tends to increase payments by the decreased number of systems which remain liable for payment, with a proportionately greater burden borne by systems in the lower revenue classes.

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To summarize the table: the TPT proposal, as applied to its systems, results in an overall reduction in copyright fees of $136,393, or 13 percent from $1,032,774 to $896,381 relative to H.R. 2223. Only the highest revenue class of systems--those with annual revenues in excess of $640,000--show a decrease in fees. All other revenue classes of systems show increases.

Viewed from a slightly different perspective, the following table presents the percentage distribution of copyright fee payments by revenue class under H.R. 2223 and the TPT proposal respectively. Among other things, it shows that the relative contribution of the largest revenue class is

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reduced from 77 percent to 60 percent of total copyright fee payments under the TPT proposal, while the relative contribution of the remainder increases from 23 percent to 40 per

cent.

COMPARISON OF COPYRIGHT FEES FOR TELEPROMPTER CABLE SYSTIMS
PER H.R. 2223 AND TELEPROMPTER PROPOSAL

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1. INTRODUCTION

The purpose of this study is twofold: (1) to evaluate the conceptual and administrative soundness of the TelePrompter (TPT) proposal as an appropriate alternative to the provisions of H. R. 2223 for determining copyright liability among cable systems for the retransmission of copyrighted broadcast signals and (2) to evaluate the specific impact of the proposal with respect to copyright liability on (a) TPT cable systems for which relevant base data are publicly available and (b) copyright proprietors. Additionally, in an appendix to this study, we present an analysis of the impact of the TPT proposal upon systems located within the Congressional Districts of the members of the House Judiciary Subcommittee on Courts, Civil Liberties and the Administration of Justice.

II. COPYRIGHT QUALIFICATION

As a preamble to its proposal TPT states its "basic position is that there should be no copyright liability of any sort for cable retransmission of broadcast signals. However, in what it characterizes as a compromise, the TPT proposal does make some provision for copyright liability. The proposal is based fundamentally on distinctions it draws among local signals and network and non-network distant signals, and concludes that only the last, non-network distant signals should be subject to copyright liability. The specific lanquage of TPT's redraft of the statute reads "a 'copyright

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qualifying broadcast station' shall be any broadcast station whose signal is not required to be retransmitted by the cable system pursuant to the rules and regulations of the (FCC)." Stated another way, the TPT proposal would grant copyright liability only for non-local broadcast stations (i.e., those which may not insist upon retransmission of their signals), and then only the non-network originated portions of the signals of such stations. It should be noted here that the terms "distant signal," "copyright qualifying broadcast station" and "signal(s)...not required to be retransmitted" are not terms of art which lend themselves to precise definition, especially within the context of the FCC's complex rules on signal carriage for different types of stations for various purposes. They are, rather, terms which are ambiguous and which invite definitional disputation. This ambiguity is characteristic of the whole TPT proposal, but specifically of its formula for determining copyright liability. Without otherwise commenting here on the philosophy, equity or realism of the proposal, it would appear at best to be an enormous administrative burden.

III. COMPONENTS OF THE TELEPPOMPTER PROPOSAL

The critical substance of the TPT proposal is that only "non-network programming of distant stations" be subject to copyright liability. The proposal attempts to establish a marketplace rationale for this position (based on a "model of the broadcasters") by focusing on:

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