Page:H.R. Rep. No. 94-1476 (1976) Page 367.djvu

367 space radio wave emitted” appear appropriate for the definition of a local signal.

Cable television and related technology can provide the means for equalizing the television reception opportunity for all viewers. This capability corrects the limitation of the electronic spectrum to provide a minimum choice of signals for all citizens on an equal basis by whatever means reception is secured. Copyright owners have greatly increased their earnings, because of wide dissemination made possible by television, and pay nothing for the benefits conferred upon them by the use of the public’s air waves. It is, therefore, appropriate for copyright owners equally to consider the interests of the television viewing public as consumers in return.

To illustrate the scope of the differences in reception opportunity, some areas of the country today have as many as fourteen different television signals available while some areas have one receivable signal and a small area has none at all.

Since modern technology can provide it, the Congress should, as a part of the copyright royalty fee assessed for the privilege of retransmitting distant signals, include a minimum complement of signals for which the .00675 fee required is paid. Such a complement might include the three national networks, three independent, and one educational station at a minimum, however received.

A provision of this nature would avoid the current problem under this bill of the creation of second class television citizens because of copyright. Of course, this does not in any way impede the Federal Communications Commission, under present law, from granting or withholding authority for cable television systems to carry television broadcast signals. Such a provision would merely establish the price and leave the communications regulatory aspects for resolution by the appropriate committees of Congress and the Commission.

II

The use of a percentage of gross as the basis for cable television copyright payment rather than of a fixed sum, as was originally done for coin-operated phonorecords, was to provide a flexible return to the copyright owner tied to inflation, deflation or increased revenue of the cable television system from expanded service or increased subscriber rates.

As a result there is no need to give the Copyright Royalty Commission any jurisdiction to alter the rates (percentage) of cable television systems. If inflation occurs, the copyright owner’s revenues will increase, just as they will decrease if basic subscriber revenues decline.

Using a percentage of basic subscriber revenues as the criteria of payment insures an equitable result. Likewise, if subscriber rates increase, the copyright owner’s revenues increase. Consequently, there is no reason or justification for the expense of proceedings before the Copyright Royalty Commission for adjusting cable television percentage rates.

Moreover, under the provisions of Section 801, the cable television subscriber is required to guarantee the copyright owner (via the cable television system and the Copyright Royalty Commission) protection against inflation or deflation based on today’s inflated dollar or on any