Page:H.R. Rep. No. 94-1476 (1976) Page 177.djvu

 Change in the Syndicated and Sports Program Exclusivity Rules

Section 801(b)(2)(C) provides that the Commission may adjust the rates established in Section 111(d)(2)(B) in the event of any change in the FCC rules and regulations with respect to syndicated and sports program exclusivity after April 15, 1976. In this event the rates may be adjusted to assure that such rates are reasonable in light of the changes to such rules and regulations. Any such adjustment, however, shall only apply to the affected television broadcast signals carried on those systems affected by change. For this purpose, the Commission may exercise its discretion to adopt royalty schedules for particular classes of cable systems.

The purpose of this subclause is similar to that of Section 801(b)(2)(B). The syndicated and sports program exclusivity rules of the FCC have the effect of protecting copyright owners by restricting the cable carriage of certain distant television programming. If these rules are changed in the future to relax or increase the exclusivity restrictions, it is the Committee’s judgment that the royalty rates paid by cable systems should be adjusted to reflect such changes.

Adjustment of the Small System Royalty Fees

Section 801(b)(2)(D) provides that the small system gross receipts limitations established in Section 111(d)(2)(C) and (D) may be adjusted to reflect national monetary inflation or deflation or changes in the average rates charged cable system subscribers for the basic service of providing secondary transmissions to maintain the real constant dollar value of the exemptions provided therein. That is, the Commission is directed to look at these two factors to insure that systems of the same size as are now entitled to the exemptions provided for in sections 111(d)(2)(C) and (D) continue to be so entitled. For the purposes of section 111(d)(2)(C), references to the gross receipt limitations of that section mean all of the dollar amount specified therein.

Distribution of Royalty Fees

Section 801(b)(3) provides that the Commission is authorized to distribute the royalty fees deposited with the Register of Copyrights under Sections 111 and 116 and to determine the distribution of such fees where a controversy exists.

Institution and Conclusion of Proceedings

Section 804 establishes the time periods during which the Commission shall institute and conclude proceedings for the adjustment or distribution of royalty fees.

Periodic Adjustment of Certain Rates

Under Section 804(a), proceedings to adjust the royalty rates specified in Sections 115 (mechanical royalty) and 116 (juke-box) and proceedings under Sections 801(b)(2)(A) and (D) (cable television rates for certain purposes), are instituted in the following periodic time intervals:

"(1) On January 1, 1980, the Chairman of the Commission is required to publish in the Federal Register notice of the commencement of proceedings to adjust all the rates referred to in Section 804(a)."