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rights, and advertisers are charged $210,000 a minute for their messages during the Super Bowl, the sports blackout need not be further expanded.

In any event, cable television viewers in mostly remote and rural areas have come to depend on a variety of sports for part of their television entertainment. It would not be in the public interest to deprive viewers of programs to which they have become accustomed over a period of many years.

Last, I believe that in the rapidly developing fields of professional sports and cable television, it would better serve the public interest to provide a mechanism which would remain flexible, so that changes in the public interest could be accommodated. By deleting the present sports blackout provision and leaving regulation of the carriage of such programs to the Federal Communications Commission, that mechanism can be achieved.

As FCC Chairman Dean Burch testified last year, before the Senate Subcommittee on Communications of the Committee Commerce

Senator McCLELLAN. You have already gone over your time.

Mr. BRADLEY. In his statement, Chairman Burch pointed out that the public was better served by the access to the broadest possible range of programing made available to the largest public. He stated that impact on sports teams “must, of course, be balanced against the desire of the public for the most diverse possible menu of sports programing.”

I believe that it is highly unfair to the American public to further deprive them of the right to watch televised events of the professional sports business.

I respectfully urge this subcommittee to remove section 111(c) (4) (C) from this bill.

Thank you for the opportunity to be heard. Senator McCLELLAN. Thank you gentlemen. [The prepared statement of Mr. Hostetter and Mr. Bradley follow:]

STATEMENT OF AMOS B. HOSTETTER, JR., CHAIRMAN, NATIONAL CABLE TELEVISION

ASSOCIATION, INC., BEFORE THE SUBCOMMITTEE ON PATENTS, TRADEMARKS AND COPYRIGHTS OF THE COMMITTEE ON THE JUDICIARY

I am Amos B. Hostetter, Chairman of the National Cable Television Association, with offices at 918 16th Street, N.W., Washington, D.C. 20006. I wish to address my comments to Subsection 111(c)(4) (C) of S. 1361, which is the cable sports blackout provision of the proposed revisions of the federal copyright statute.

At the outset, the total uniqueness of the sports blackout provision must be emphasized. Section 111 of the Bill would establish a scheme of copyright liability for secondary transmissions by cable television systems. Some secondary transmissions would be exempt from copyright liability; some would be subject to compulsory licensing; and some would become actionable as acts of infringement absent voluntary licensing by the copyright holder.

With the exception of the sports blackout provision, the liability of various secondary transmissions depends solely upon such factors as the classification of the primary broadcast station, the location of the cable system, the types of broadcast signals available in the market, the existence of exclusivity agreements, and certain notices and payments required by cable systems. What makes the sports blackout provision unique is that it is the only provision in Section 111 which makes a distinction based upon the program content of the secondary transmission. Except for sports programming, all types of commercially broadcast programs are treated the same in determining whether their secondary transmission will be subject to a compulsory license. Only sports programming receives special treatment.

I wish to make clear that, as others have already testified, the cable industry supports the concept of compulsory licensing for secondary transmissions with the payment of reasonable fees for such licenses. I submit, however, that it would be unreasonable and disserving of the public interest for the Congress to treat sports programming differently in Section 111 from other programming, and to deny cable systems compulsory licenses for carriage of such programming where they would otherwise exist.

As Subsection 111 (c) (4) (C) (iii) is now written, the sports blackout provision would prevent the carriage by a cable system of a live professional team sports event-which otherwise would be carried—if an authorization to broadcast that event has not been granted to any of the broadcast stations within whose local service area the system is located. What is the purpose of this provision?

On its face, the cable sports blackout provision is unrelated to the rationale and purpose of the exemption from the antitrust laws granted by Public Law 87-331 (15 U.S.C. $ 1292). Both the House and Senate Committees on the Judiciary clearly stated that the purposes of that legislation were (1) to enable the member clubs of a professional football, baseball, basketball or hockey league to pool their separate rights without violating the antitrust laws and (2) to prevent such package contracts from being used to impair college football receipts. Subsection 111(c) (4) (C) concerns neither pooling arrangements to help weaker clubs in a league, nor protection of college football receipts.

The proposed subsection is also far too broad to be intended to protect the gate receipts for home games of professional sports teams; and if it were so intended, it would mark a new affirmative Congressional policy. While Section 2 of Public Law 87-331 permits limited blackout provisions in pooling arrangement contracts exempted from the antitrust law, Congress was not thereby attempting to protect home gate receipts. Rather, its intent was to limit blackout agreements.

In explaining the meaning of Section 2 of Public Law 87–331, Representative Celler stated :

“Mr. Speaker, section 2 of the bill contains the first of two significant limitations on the antitrust exemption provided by the bill. Section 2 states that the antitrust exemption shall not apply to any joint agreement transferring television rights which prohibit the televising of any game in any area, except in the home territory of a member club on a day when that club is playing a game at home. The effect of section 2 is to allow only so much of a blackout as was recognized as reasonable by the judge in the particular case.

"Mr. Speaker, the Department of Justice, although opposed to the enactment of legislation of this character, has stated, that if the committee believes that a bill along these lines is in the public interest, it should include a limiting provision of the nature of section 2."

Similarly, the House Report states :

“This section is designated to deny the antitrust exemption with respect to joint agreements transferring league television rights which prescribe a blackout of any territory, except in the situation in which Judge Grim recognized such blackout as reasonable, namely, in the home territory of a member club on a day when that club is playing a game at home.”

Congress was thus not attempting to protect the home gate by including Section 2. Rather, Congress created an antitrust exemption in Section 1 in order to protect the weaker teams in the league who were unable to sell television rights individually. Section 2 was then inserted solely for the purpose of limiting the scope of the exemption by stating that the exemption would not be available if restraints were placed on the television broadcast of professional games—unless the restraint was the only one recognized as reasonable by Judge Grim in United States v. National Football League, 116 F. Supp. 319 (E.D. Pa. 1953).

If the proposed cable sports blackout provision represents a policy to protect home gate receipts, I would suggest that this Committee give careful consideration to such a policy. At a time when most professional team sports are playing to record attendance, I do not believe that the public interest is served by denying the public reasonable access to sporting events through secondary transmissions via cable television. I would further suggest that any benefits which such a

1 H.R. Rep. No. 1178. 87th Cong., 1st Sess. (1961); S. Rep. No. 1087, 87th Cong., 1st Sess. (1961).

blackout provision might provide the weaker leagues would be more than offset by the detrimental impact such a provision would have on the growth of cable television. I submit that a blanket policy of protecting home gate receipts for all professional team sports, without regard to the existnig financial health of particular sports, is unwarranted and unnecessarily restrictive.

If this Committee, however, believes that it is necessary national policy to protect the home receipts of professional sports teams, then I believe due care should be addressed to the existing overbreadth of Subsection 111 (c)(4) (C). Congress in the past chose to limit blackouts to what was reasonably necessary to protect gate receipts. Surely nothnig more is required here.

The following are some of the aspects of the subsection's overbreadth. First, it is not limited to days on which a team in the market is playing at home. Indeed, it is not even limited to markets which have a local team in the league, or even the sports, to which the blackout would apply. Second, it applies even where none of the local stations is interested in broadcastnig the event in question. Third, it is not limited to the geographic area critical to home gate receipts. When the limitation on the antitrust exemption was debated, cable television with its unique ability to pinpoint audiences, was not considered. It differs significantly from television broadcasting which transmits to the public for up to a radius of sixty miles. Since once broadcast the signals of a television station are not selectively blocked, the only practical solution to protecting home "draw" available to the Courts and the Congress, at that time, was to permit the blackout of broadcasts by local stations in the team's market when the team was at home. The incidental but necessary effect of this approach was to black out an area much larger than was necessary to protect the home territory. Since the reach of a cable television system is limited to its own community, blackout provisions applicable to cable television can and should be limited to the geographic area reasonably necessary to protect the home gate,

We submit that the problems of defining the area of protection, which may differ from sport to sport, market to market, and year to year, as well as the ability to grant waivers for equitable reasons, demand a flexible approach to regulation which cannot adequately be met by the necessary rigidity of copyright legislation. Such flexibility could be provided by the Federal Communications Commission, and we believe that delegated appropriate authority to the FCC for regulation in this area would be fare more appropriate than giving professional sports programming rigid, preferential treatment in copyright legislation.

If some form of preferential treatment for sports programming is deemed necessary by this Committee, then I suggest the following alternative for a sports blackout provision :

"A cable system, located within the urbanized area of a city in which a professional baseball, basketball, football, or hockey team is permanently headquartered, which carries secondary transmissions of distant stations pursuant to a compulsory license as provided for herein, may be required to delete programs on such signals embodying home games of such team, if the home team or its league has made the game unavailable to all television stations which serve the city in which the cable system is located. Cable systems in existence on the date of enactment of this ACT shall not be required to delete such programs.”

Thank you for your courtesy and consideration.

STATEMENT OF REX A. BRADLEY, PRESIDENT, TELECABLE CORP., BEFORE THE SUB

COMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS OF THE SENATE COMMITTEE ON THE JUDICIARY

My name is Rex A. Bradley. I am President of TeleCable Corporation with offices at 740 Duke Street, Norfolk, Virginia 23510. I am also a member of the Board of Directors of the National Cable Television Association, Inc. TeleCable is the sixteenth largest cable television company in the United States which, through its subsidiaries, operates thirty-three cable television systems located in South Carolina, Georgia, Alabama, North Carolina, West Virginia, Illinois, Wisconsin, Virginia and Kansas. Because the members of the public who avail themselves of my company's cable television services desire more diverse programming, at more convenient viewing times, I am vitally interested in those sections of S. 1361 which affect cable television operations.

It is my understanding that Subsection 111(c) (4) (C) provides a sports blackout applicable to the reception and distribution of television broadcast signals by cable television systems. It is to that specific subsection that I wish to address my comments.

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While I am not a lawyer, I understand that professional football, baseball, basketball and hockey clubs have been afforded special treatment under the Federal antitrust statutes, to enable them to pool their separate rights for television and radio broadcasting without violating the national anticompetitive policy, and also to prevent such pooling contracts from being used to impair college broadcast receipts.

If the "sports blackout" subsection is enacted as presently written, a cable television system in a television market would be prevented from carrying a live professional team sports event if an authorization to broadcast that event has not been secured by any broadcast station within the local service area of which the system is located.

I believe that this cable sports blackout provision goes far beyond a restatement of the existing national antitrust policy, and is unrelated to the reasons for, and the purposes of, the exemption from the antitrust laws granted by Public Law 87–331. Furthermore, in the context of this copyright bill, only sports programming receives special treatment; all other types of commercially broadcast programs are treated the same in determining whether their secondary transmission will be subject to a compulsory license.

I have examined my company's cable television systems signal complement in the light of the proposed sports blackout provision and I find that twenty-one of the thirty-three systems would be immediately, and adversely, affected. Furthermore, it is my opinion that almost every new cable television system would also be seriously affected.

As I understand the purpose of the antitrust exemption, it was, first, to allow pooling arrangements so that the “draw area" of certain types of professional sports teams could be protected. This area has not been clearly defined—it is some times called “the home territory"-but I believe that an appropriate area would be the urbanized area, as defined by the U.S. Census Bureau, which is an area sufficiently large to protect a home team's gate receipts, if protection is deemed necessary.

I am sure that this Committee is aware, however, that there is much debate about whether such protection is necessary. I understand that Senator Pastore has introduced S. 1841, a Bill which would place a one-year moratorium on such blackouts under certain circumstances. Further, the Federal Communications Commission has under consideration, in Docket 19417, proposed rules which will deal with the carriage of sports events by cable television systems.

In these circumstances, the expansion of the "black-out” area from the home territory necessary to protect the gate receipts of certain sports teams to the service area of a television station-an area encompassing hundreds of square miles-would be most unwise. It seems to me to be better public policy to refine the antitrust exemption rather than place such rigid concepts in a copyright revision Bill.

I also believe that the exemption to the anti-trust statutes identifies only four major team sports : Football, Baseball, Basketball and Hockey. The language of the sports blackout provision in S. 1361 would expand that protection to all professional team sports from soccer to the roller derby. If it was the judgment of the Congress that restrictions should be placed on the extent of the exemptions to our anti-trust laws, which I believe is a valid and necessary one there has been little or no justification, in the public interest, to reverse that judgment. If for no other reason alone than to limit the erosion of our anti-trust laws, the present sports blackout provision of S. 1361 should be rejected.

The anti-trust exemption was designed to protect a local “member club" on the day when it was playing at home from a broadcast of that home game. As I read the sports blackout provision of this Bill, any sports event will be blacked out unless it is being broadcast by a local television station. In my experience a Redskin fan is a Redskin fan, and carri of a Philadelphia Eagles-New York Giants game on a cable system in Rockville, Maryland, even if that game is not broadcast by a Washington television station will not keep that fan from Kennedy Stadium, if he can get tickets to the Redskins' game. If this sports blackout provision is enacted as written, it will require cable television systems to blackout broadcasts of Rams Forty-Niners games in towns as far away as Lexington Park, Maryland, unless it is carried on a local station. I cannot see how this is consistent with the present anti-trust exemption or how it serves the public interest.

It is my understanding that the anti-trust exemption provides protection only when a football baseball basketball, or hockey team, through its league, has

prohibited a local broadcast. The blackout provision here would go farther. Even if a team or league had offered the program to a local television broadcaster, who turned it down for one reason or another-that game could not be carried by importing a television station from a more distant city which had decided to broadcast the game. Here the standard is that the local station must have received, in hand, authorization to broadcast the game. How does it serve the public's interest to prohibit carriage of a team sports event if the local broadcaster chooses not to get broadcast authorization? It seems clear to me that this provision also ranges beyond existing public policy or anti-trust statutory exemptions.

I think it is well to remember that the sports blackouts would be an illegal conspiracy in restraint of trade without the statutory exemption. It is submitted that when football teams alone receive almost $70 million this year from radio and elevision stations for broadcast rights, and advertisers are charged $210,000 a minute for their messages during the Super Bowl, the sports blackout need not be further expanded.

In any event, cable television viewers in mostly remote and rural areas have come to depend on a variety of sports for part of their television entertainment. It would not be in the public interest to deprive viewers of programs to which they have become accustomed over a period of many years.

Lastly, I believe that in the rapidly developing fields of professional sports and cable television, it would better serve the public interest to provide a mechanism which would remain flexible, so that changes in the public interest could be accommodated. By deleting the present sports blackout provision and leave ing regulation of the carriage of such programs to the Federal Communications Commission, that mechanism can be achieved.

As FCC Chairman Bean Burch testified last year, before the Senate Subcommittee on Communications of the Committee on Commerce :

"The Commission is well aware of the facts of sports blackouts. Each new football season brings us a steady stream of complaints that a particular television station is not televising a particular game because of a blackout provision.

"There is also the background matter of cable television and sports blackouts. We instituted a rule making proceeding in the entire area of cable's sports carriage on February 2, 1972, the same day the Commission adopted its new rules for cable television.

“To focus the proceeding, we proposed a specific rule to deal with Section 1292 and requested comment on other possible rules to carry out the purposes of the law as a whole. Under our proposed rule, when a major league football, baseball, basketball, or hockey team is playing at home, a cable system licensed to the home city of a team may not carry a professional game of the same sport unless it is available on a local station. (In this event, of course, it must be carried.)"

Chairman Burch pointed out that the public was better served by access to the broadcast possible range of programming made available to the largest possible public. He stated that impact on sports teams “must, of course, be balanced against the desire of the public for the most diverse possible menu of sports programming."

I believe that it is highly unfair to the American public to further deprive them of the right to watch televised events of the professional sports business.

I respectfully urge this Subcommittee to remove Section 111(c) (4) (C) from this Bill.

Thank you for the opportunity to be heard. If you should desire a supplementary statement showing examples of how the purposed sports blackout would affect my company's cable television systems, I would be happy to provide it.

Mr. BRENNAN. The next witnesses appear on behalf of the National Collegiate Athletic Association.

Senator McCLELLAN. All right, gentlemen. Have a seat.

Mr. BRENNAN. Gentlemen, you have 12 minutes for your part of the presentation.

Mr. Higgins, would you identify yourself and your associate for the record, sir?

Mr. HIGGINS. Yes, sir. I am James B. Higgins, athletic director at Lamar University in Beaumont, Tex. I'm speaking to the concerns

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