Our position is that CATV Systems should not be allowed to carry AM or FM broadcasts or other aural only signals. CATV was originally conceived to expand television service and it should be limited to transmission of television.

In regards to leapfrogging (bringing in distant signals by microwave) it should be limited to current FCC rules which state that a CATV system may carry the three network signals plus one independent and one educational station in small markets as well as live originations. Leapfrogging should be limited to the closest network affiliates and independent stations.

In addition to the Compromise, I am submitting several pages of background material which does not necessarily represent the small market position, but will provide additional information concerning the Compromise (Consensus Agreement).

We need your help in getting a new Copyright Bill through Congress including Copyright legislation for cable systems that protects the small market free broadcasters of Montana and the Rocky Mountain West.

The U.S. Court of Appeals for the Second Circuit ruled on March 8, 1973 that "when a CATV system imports distant signals it is no longer within the ambit of the Fortnightly doctrine, and there is then no reason to treat it differently from any other person who, without license, displays a copyrighted work to an audience who would not otherwise receive it." The effect of this decision is to render CATV systems fully liable under copyright law for the performance of programs carried via distant signals. It also placed the Supreme Court's 1968 Fortnightly decision in proper perspective, i.e., that the copyright exemption afforded cable systems by that case only applied to acceptable signals received off the air by a CATV antenna "adjacent to the CATV community." The Court of Appeals decision overruled an earlier District Court ruling which would have exempted all CATV carriage of TV signals from copyright liability.

Teleprompter, on June 5, 1973, asked the Supreme Court to review the Appeals Court's decision. Presumably, if the Supreme Court denies review or upholds the Appeals Court decision, the case will be remanded to the District Court for a determination of damages.

The CBS v. Teleprompter case has given broadcasters and copyright owners the upper hand in dealing with cable on copyright and this factor should weigh heavily in the legislative arena.

B. FCC role in CATV copyright question

The CATV rules adopted by the FCC in February 1972 presuppose the enactment of copyright legislation which would call for the payment of fees by CATV systems for the use of copyrighted television programs. (See Government Relations Department memo for a discussion of the status of copyright legislation.) If copyright legislation is not forthcoming in the immediate future, the Commission's CATV rules would no longer be defensible as a balancing of the equities between cable and broadcast interest. In this regard, Chairman Burch stated in Senate testimony early this year that if copyright legislation is not forthcoming, the CATV rules will have to be revisited.

II. PAY-CABLECASTING-DOCKET NO. 19554

As part of the reconsideration of its cable actions in Docket No. 18397, the Commission, on July 24, 1972, instituted a new rule making proceeding to review the existing anti-siphoning rules applicable to cablecasting for which per program or per channel charges are made. The existing rules are essentially the same as those applicable to over-the-air pay-TV (STV).

In comments filed on November 1, 1972, NAB emphasized the proliferation of pay-TV via cablecasting and closed circuit arrangements. We urged the FCC to insure that pay cable serves as an outlet for new and diverse programming and does not become a vehicle for siphoning off programming now seen on free TV. Vigorous opposition to the existing pay-cable rules was raised, particularly by NCTA, the Justice Department and the program suppliers. In reply comments, NAB supported the FCC's jurisdiction to adopt anti-siphoning rules and countered the First Amendment arguments and other alleged obstacles to the imposition of pay-cable restrictions which had been advanced by the opposition. An FCC decision in this docket could be close at hand.

III. TRANSMISSION OF PROGRAM MATERIAL TO HOTELS AND SIMILAR LOCATIONSDOCKET NO. 19671

On January 24, 1973, the Commission initiated a broad inquiry and rulemaking proceeding concerning the competitive relationships between various methods of transmitting program material to hotels and existing broadcast and cable services. Additionally, the Commission noted its concern about similar transmissions to non-transient locations, such as homes and apartments. Essentially the proceeding covers all new forms of pay-TV, other than cable and STV.

NAB filed Comments on May 21, 1973. We pointed out that hotel pay television already is in operation nationwide and that widespread home service would soon follow thereby posing a direct and immediate siphoning threat to free broadcast television. We urged the Commission to adopt antisiphoning rules applicable to all methods of closed-circuit transmission (e.g., common carrier, MDS, Business Radio Service) which provide pay-TV to homes and other non-transient dwelling places, thus preserving free television as a vital and viable public service. Reply comments are due July 23, 1973.

IV. PROPOSED SPORTS BLACKOUT RULE-DOCKET NO. 19417

Together with its February 2, 1972 cable actions, the FCC issued a Notice of Proposed Rule Making to deal with the sports blackout question. The proposal would generally prohibit systems within the Grade B contour of a TV station located within the home city of a professional baseball, basketball, football or hockey team from carrying a TV broadcast of the same sport when the local team is playing at home. In comments filed on March 16, 1972, NAB supported this proposal and urged that it be extended to cover intercollegiate and scholastic events as well as professional contests. We also asked the FCC to address itself to the even more important question of the effect of unrestricted CATV importation of sports contests upon the ability of local stations to obtain revenues substantial enough to support the broadcasts of the home or away games of a local team engaged in the same sport. These points were stressed further in oral argument held last August.

While no decison has been issued in this docket, the FCC removed a measure of the prevailing inequity by ruling last December that a CATV system in the West Palm Beach, Florida market could not "import a distant network television station not normally carried on the system, which is broadcasting a professional sports program that is being blacked out, pursuant to a league-network contract, on network stations normally carried on the cable system."

V. PROPOSED CABLE/RADIO RULES-DOCKET NO. 19418

Concurrently with the issuance of its new cable rules in February 1972, the FCC issued a Notice of Proposed Rule Making looking toward adoption of rules governing CATV carriage of radio signals. The Commission cited the following CATV/radio provision of the consensus agreement as a focus for comments:

"When a CATV system carries a signal from an AM or FM radio station licensed to a community beyond a 35 mile radius of the system, it must, on request carry the signals of all local AM or FM stations respectively."

Additionally, they suggested a rule providing that whenever a local signal is carried, all signals of the same type must be carried. All comments and reply comments have been on file since early last summer and this matter should be ripe for decision.

Pending final action in this proceeding the FCC will not authorize new CATV service which would bring distant radio signals (1) into comunities of less than 50,000 having licensed radio stations or (2) into any community unless all local

stations of the same type (AM or FM) are also carried. For purposes of this interim procedure, a distant signal is one licensed to a community more than 75 miles from the cable community.

FISHER, WAYLAND, SOUTHMAYD AND COOPER,
Washington, D.C., June 19, 1973.

Mr. EARL E. MORGENROTH,

President, Rocky Mountain Broadcasters Association, c/o Station KGVO-TV

Missoula, Mont.

DEAR EARL: This will acknowledge receipt of your letter of June 8 requesting that I compile an RMBA position statement on FM translators, complete the RMBA comments on ascertainment of community needs in Docket 19715, request reconsideration in the license renewal proceeding in Docket 19153, and push the Commission to adopt a decision in the CATV radio signal rule making in Docket 19418.

I have obtained from the Commission the text of its attached proposed bill, to amend Section 318 of the Communications Act with regard to translators, and the Commission statement to Congress in justification of this proposed bill. Also, I have obtained the attached text of H.R. 5369 introduced in the House of Representatives on March 7, 1973 by Harley Staggers, the Chairman of its Committee on Interstate and Foreign Commerce, and the attached text of S. 1229 introduced in the Senate on March 14, 1973 by Warren Magnuson, the Chairman of its Committee on Commerce. I will complete and forward to you my draft of a position statement for RMBA within the next few days.

As I advised in our conference phone conversation, the date for the submission of comments in Docket 19715 on ascertainment of community needs has been extended to August 1. I will complete and forward to you well in advance of that date the RMBA comments in this Docket.

Although the Commission on May 4 announced adoption of its new license renewal requirements in Docket 19153, it stated that the document would not be published in the Federal Register until the Annual Programming Report and Section IV-B of Form 303 are cleared by the Office of Management and Budget; that the Rules will be effective 30 days after Federal Register publication; and that the time for filing Petitions for Reconsideration will also run from the date of such Federal Register publication. As yet, this publication has not occurred because the White House Office of Management and Budget has not yet cleared the new forms. It may be some time yet before the forms are cleared because there is current discussion about some revision in the forms. As a result, we will have ample time to complete and file the RMBA request for reconsideration of the new announcement requirements as set forth in the May 1 Interim Report and Order in Docket 19153.

Recently I discussed with Al Cordon, the Assistant Chief of the Cable Television Bureau, the status of the ratio signal importation rule making in Docket 19418. He advised that the matter is presently on dead center, and that it has a low priority among the numerous issues on cable television which await Commission decision. He said, for instance, that such issues as CATV multiple ownership and pay CATV have higher priority insofar as both his staff and the Commission are concerned. I have concluded from this and from other recent contacts at the Commission that if our push for action in Docket 19418 is to succeed, it will have to be directed to the Commission via your influential friends on Capitol Hill rather than by a direct RMBA approach to the Commission. The present low priority of Docket 19418 will not likely be changed without a lot of urging from the Hill. This I think could be most effectively initiated by the RMBA membership out there rather than by me here. With kindest personal regards and best wishes, I remain Sincerely yours,

[H.R. 5369, 93d Cong., first sess.]

JOHN P. SOUTHMAYD.

A BILL To amend section 318 of the Communications Act of 1934, as amended, to enable the Federal Communications Commission to authorize translator broadcast stations to radio translator stations to operate unattended in the same manner as is now peroriginate limited amounts of local programing, and to authorize frequency modulation radio translator stations to operate unattended in the same manner as is now permitted for television broadcast translator stations.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled. That clause (3) of the first proviso of section 318 of the Communications Act of 1934 (47 U.S.C. 318) is amended

(1) by striking out “solely” and inserting in lieu thereof “primarily”, and (2) by striking out "television".

[S. 1229, 93d Cong., first sess.]

A BILL To amend section 318 of the Communications Act of 1934, as amended, to enable the Federal Communications Commission to authorize translator broadcast stations to originate limited amounts of local programing, and to authorize frequency modulation radio translator stations to operate unattended in the same manner as is no permitted for television broadcast translator stations

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That clause (3) of the first proviso of section 318 of the Communications Act of 1934 (47 U.S.C. 318) is amended

(1) by striking out "solely" and inserting in lieu thereof "primarily", and (2) by striking out "television".

PROPOSED BY THE FCC FOR THE 93RD CONGRESS

A BILL To amend section 318 of the Communications Act of 1934, as amended, to enable the Federal Communications Commission to authorize translator broadcast stations to originate limited amounts of local programming, and to authorize FM radio translator stations to operate unattended in the same manner as is now permitted for television broadcast translator stations

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That clause (3) of the first proviso of section 318 of the Communications Act of 1934 (47 U.S.C. 318) is amended-

(1) by striking out "solely" and inserting in lieu thereof "primarily”, and

(2) by striking out "television".

EXPLANATION OF PROPOSED AMENDMENT TO SECTION 318 OF THE COMMUNICATIONS ACT OF 1934, AS AMENDED, TO ENABLE THE COMMISSION TO AUTHORIZE TRANSLATOR BROADCAST STATIONS TO ORIGINATE LIMITED AMOUNTS OF LOCAL PROGRAMMING, AND TO AUTHORIZE FM RADIO TRANSLATOR STATIONS TO OPERATE UNATTENDED IN THE SAME MANNER AS IS NOW PERMITTED FOR TELEVISION BROADCAST TRANSLATOR STATIONS

Translator stations are low-power broadcasting stations which receive the incoming signals of a television or FM radio station, amplify the incoming signals, convert-or "translate"-them to a different output frequency and retransmit the signals to the community or area which it is desired to serve. Translators are needed in certain areas of the country where because of terrain or extreme distances, it is not possible to receive directly the signals of the originating television or FM radio station. They were conceived as simple, inexpensive devices which could be made available to small communities where the demand for television or FM radio service was great and financial resources were meager. In such areas, translators frequently provide local residents with their only source of television or FM radio reception.

Section 318 of the Communications Act of 1934, as amended, 47 U.S.C. § 318, (clause (3) of the first proviso), limits translators to rebroadcasting the signals of their primary stations without any significant alteration of the characteristics of the incoming signals. Although the Commission has interpreted Section 318 to allow UHF television translators to broadcast twenty seconds of commercial advertising per hour, the origination is restricted to slide announcements, and no program origination is permitted. Consequently, translator stations are not self-supporting and must depend on public generosity for their support. In addition, Section 318's prohibition of program origination in many instances deprives those people dependent on translator stations for their television or FM radio reception of news of local political interest or events which vitally affect them. We believe the proposal's substitution of the word “primarily” for “soley” will the Commisison to authorize limited amounts of local origination in keeping with the public interest.

We recognize the proposal does not set any specific limitations as to the amount of local origination to be permitted. We believe, however, that such a limitation could be best determined in a rulemaking proceeding conducted by the Commission to implement this legislation during which the comments received from all interested parties could be analyzed and evaluated. In deciding upon such a limitation the Commission would, of course, be bound by the requirement of Section 318 that origination be limited to the extent necessary to insure that translator stations retain their primary characteristics as rebroadcast stations.

It should be noted that cable television interests have expressed their concern to the Commission with respect to what effect our proposal might have on the relationship of translators and cable systems. Cable operators expressed particular concern with regard to possible interference between VHF television translator stations (those operating on output channels 2 through 13) and cable television systems when broadcast channels are authorized for translator use. We cannot perceive that this proposal would have any effect whatsoever on the matter of electrical interference as it would merely enable the Commission to promulgate rules to authorize program origination by translators. This would have no effect on the frequencies on which translators operate. In any event, if the proposal is enacted into law, the cable operators would have ample opportunity to present their views at the rule-making proceeding the Commission would institute before adopting any rules to effectuate the statute.

We also propose striking the word "television" from Section 318. As previously noted, translators were conceived as simple, inexpensive devices designed to provide broadcast signals to the residents of sparsely populated, rural, remote, or mountainous areas. To make such stations economically feasible, Congress enacted Section 318 in 1960 to enable the Commission to permit television translator stations to operate without a licensed operator. At that time, there were only television translator stations. However, technological advances through the past decade have made FM translator stations possible and, in 1970, the Commisison authorized such stations. Now, in order to make the FM translator stations economically feasible, it is necessary to amend Section 318, as proposed, to authorize the FM translators to operate unattended in the same manner as is now permitted for television translator stations.

In sum, the Commission believes the public interest would be served by adoption of the proposed amendment.

Adopted: December 20, 1972, Commissioner Johnson concurring in the result.

FEE ASPECTS OF THE COPYRIGHT-CATV QUESTION-THE NEED FOR AN
INDEPENDENT ARBITRATION TRIBUNAL

1. Payment of adequate copyright fees is essential in the public interest to safeguard the continued production of television programs and to encourage the creation of more numerous and of high quality programs.

2. For more than 12 years CATV (cable) systems had been involved in a controversy with program producers as to whether they are liable to copyright under the archaic 1909 Copyright Act when they retransmit broadcasts of copyrighted television programs and as to whether new copyright legislation should provide for such liability.

3. This controversy has been settled in a "Consensus Agreement” by_representatives of cable system owners, television stations and program producers. The parties to this Consensus Agreement have pledged themselves to support full implementation of its provisions by the Congress and the Federal Communications Commission (FCC).

4. The FCC declaring that the terms of the Consensus Agreement were "within reasonable limits" and "of public benefit" promptly implemented it by issuing new cable rules effective March 31, 1972. These rules permit large-scale importations by cable, of programs from distant stations into the markets of local television stations.

5. On March 26, 1973, the Second Circuit in New York over-turned a decision by the District Court in CBS vs. Teleprompter, and declared among other things that cable systems importing distant signals were liable for copyright fees. 6. The Copyright Law Revision Bill, S. 1361, provides a compulsory license to CATV for the use by it of copyrighted programs upon payment of a compulsory license fee which would yield only a small fraction of what the program producers need to continue their production. This rate schedule was inserted into the bill without any prior hearings on this point and without the aid of any supporting economic data.

7. Both prior and subsequent to the Consensus Agreement representatives of copyright owners and of the cable industry have endeavored to agree on a rate schedule for joint recommendation to the Congress.

8. The Consensus Agreement expressly provides that "(u)nless a schedule of fees covering the compulsory licenses or some other payment mechanism can be agreed upon between the copyright owners and the CATV owners in time for inclusion in the new copyright statute, the legislation would simply provide for compulsory arbitration failing private agreement on copyright fees."