Additionally, contrary to your assertions, use of an arbitration panel will not result in cost savings. Firstly, unlike the Commissioner's compensation, the panel's compensation will most likely be contingent on the length and complexity of the proceeding. Furthermore, with all due respect to the legal profession, the compensation of most lawyers that represent parties before the Tribunal is also contingent on the length and complexity of the proceedings. Consequently, rather than provide an extra incentive to reduce the number of issues adjudicated, and thereby decrease the number of controversies, the arbitration proposal provides an extra incentive to prolong the proceedings, and an impediment to settlement. The use of arbitration panels to issue final determinations will also increase the claimants' costs because panel determinations are not binding on future panels. The establishment of precedent by the Tribunal has been a predominant impetus behind its long history of settlements in the areas of cable, public broadcasting, and jukebox. Unfortunately, not only are the determinations not binding on subsequent panels, but the Tribunal's own, well-established, precedent will not be binding on the panels. In essence, under the arbitration model, the parties will be reinventing the wheel with each and every proceeding. This fact will surely hamper settlement. Any party, who feels that it has not fared well, will have an incentive, during subsequent proceedings, to try to shape the new wheel in its favor. An additional detriment is the fact that the panel's decision may be reviewed by the courts. The Court of Appeals, on repeated occasions during the early years of the Tribunal, expressed its displeasure with the litigious nature of the parties appearing before the Tribunal. See NAB v. CRT, 809 F.2d 172 (1986), quoting CBN v. CRT, 720 F.2d 1295, 1319 (D.C. Cir. 1983) and NAB v. CRT, 772 F.2d 922, 940 (D.C. Cir. 1985). The Tribunal's well-established precedent, over time, discouraged this pattern of appeals. The absence of such precedent will inevitably lead to regularly recurring appeals. These appeals will result in substantial costs to both the claimants, by way of litigation costs, and the taxpayers, by way of court costs. In sum, the Bill proposes to replace a three decision maker scheme, which has wellestablished rules and procedures, with a four decision maker scheme, which could never establish game rules because it is incapable of establishing precedent. The efficiency and cost savings of such a proposal are elusive, at best, and illusory, at worst. The Bill May Destroy The Essential Independent Nature Of The Decision Making Body The proposed Bill has draw backs other than the added costs to the claimants and taxpayers. Specifically, transferring the Tribunal's responsibilities to the Copyright Office may destroy the vital independent nature of an entity that, not only determines distribution among copyright owners, but also establishes rates for copyright users. The Tribunal historically has been, an independent agency, free from political pressures, engaged in balancing Independence from the Copyright Office is essential to the effectiveness of the Tribunal, because the Copyright Office has been perceived as an advocate of the copyright owner. This preconception, whether or not justified, may frustrate the Copyright Office's ability to perform the most crucial of the Tribunal's roles, that of settlement facilitator. This is a role which the Tribunal has performed well. I believe that the Tribunal has, without exception, steadfastly insisted on private settlements rather than give in to the tendency of other agencies toward greater government involvement in the marketplace. Id. Such an agency has unquestionably served the public interest well. My colleague, Commissioner Goodman, noted in his letter of February 17, 1993, that the Tribunal "has managed to achieve the remarkable feat of displeasing both program owners...and many cable operators." See Letter from Commissioner Bruce Goodman to House Copyright Subcommittee Chairman William Hughes (February 17, 1993). Commissioner Goodman's observation, in fact, underscores the Tribunal's success as a negotiator. A good negotiator is one who negotiates a deal which somewhat displeases each side, by making each side feel that it has relinquished something. The worst scenario is where one side is perceived, rightly or wrongly, as always winning the negotiations. Such a situation will surely chill the prospects of settlement. Additional Drawbacks of Arbitration Panel Proposal Aside from the chilling effect that the perception of one-sidedness may have, the proposed Bill has additional drawbacks. With regard to settlements, the Bill provides that an arbitration panel will not be convened until a controversy has been declared. Therefore, the Register will have the awesome responsibility of serving as settlement facilitator. Performance of the settlement responsibility, in addition to all of the Register's other responsibilities, may result in the settlement function not receiving the attention it requires. A further drawback of the arbitration panel proposal is that it will not provide the necessary stability and continuity to enable the proper performance of the statutory functions, nor the proper forum for resolving legal issues, such as whether Congress intended networks to share in the satellite superstation fund. See Letter from Commissioner Edward Damich to House Copyright Subcommittee Chairman William Hughes (February 17, 1993). Since, with the convening of every arbitration panel will come ew committee of decision makers, who will have to familiarize themselves with substance and procedure, the potential for discouraging settlements and prolonging the proceedings is substantial. Moreover, since the arbitration panel will not be convened until a controversy is declared, resolution of interlocutory matters, such as motions to dismiss filed prior to declaration, will have to be handled by the Register's taxpayer-funded staff. The use of arbiters to determine the distribution of hundreds of millions of dollars presents certain basic concerns. Currently, Commissioners undergo a thorough scrutiny during the Senate confirmation process. The confirmation process is crucial because it weeds out potential and actual conflicts of interest. Arbiters, however, will not be required to undergo any such scrutiny. Even though it is the Register who will convene the panel, the Register will not have the resources to undertake a scrutiny, in any way, comparable to that of the Senate. Arbitration Panel Determined Rates Will No More Closely Resemble Marketplace Rates Than Those of The Tribunal Mr. Chairman, your final point in support of the proposed Bill is that "arbitrated rates can be expected to more closely resemble market rates than a government-set compulsory license fee." I take issue with that unsubstantiated conclusion. The Court of Appeals has stated that, based on the statutory guidelines, the Tribunal's efforts to set market prices are "more than reasonable." See National Cable Television v. Copyright Royalty Tribunal, 724 F.2d at 185. A legal practitioner, who is familiar with the Tribunal's |