Page:H.R. Rep. No. 94-1476 (1976) Page 363.djvu

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363

rather than the amount of revenue. The 150 mile local definition would cause several problems:

One hundred and fifty miles is considerably beyond any currently accepted or established market definition. For example, under this definition Washington, D.C., signals would be “local” (and therefore not liable for copyright) through most of southeastern Pennsylvania. Likewise, New York City would be considered local throughout much of that state.

Cable systems which are not located within 150 miles of an urban area (systems in many parts of the country) would bear an undue burden For example, the majority of systems in Pennsylvania are located so that they are within 150 miles of either Philadelphia, New York, Washington, D.C., Baltimore or Pittsburgh. In other areas of the country, without such a proliferation of urban centers, signals are simply not available within 150 miles.

By decreasing (for many systems) the number of signals considered distant and thus liable for copyright, the total amount of dollars paid into the copyright royalty “pot” would be greatly decreased. In order to keep the “pot” at the proposed $8.5 million, the payment burden would have to be shifted to those systems not fortunate enough to be located within 150 miles of the primary transmitter. In such cases systems located beyond 150 miles would incur a larger copyright burden.

The same arguments which apply to the suggestion that 150 miles be considered the cut off point between distant and local signals also apply to the suggestion that distant signals be considered as those which cannot be received “off the air.” To include as “local signals” those receivable off the air by direct interception of a free space radio wave would permit signals received from over 100 miles distance using a 1000 foot antenna to be considered “local signals” even though such places are clearly beyond the local market area of the primary transmitter.

The distinction between local and distant signals as used in the Committee bill draws heavily on the FCC’s experience in defining what should be considered local signals.

Local signals are signals received within the geographical market area to which a broadcaster directs his programming and which serves as the basis for his advertising revenues. When a copyright owner sells his work to a given broadcaster, he must assume that the work will be viewed within that broadcaster’s local market area and the royalty which he charges will be based upon that assumption. However, neither he nor the broadcaster can control the retransmission of his work by a cable system to a distance area which would ordinarily constitute a separate market for his work. For this reason, the Committee has provided compensation to the copyright owner for signals retransmitted (secondarily transmitted) beyond the local market area. To define the term “local signals” by accepting either the 150 mile proposal or the concept that any signal which can be received off the air by an antennna mounted atop a high tower would be purely arbitrary. It would be inconsistent with commercial practice in the broadcast and advertising industries. It would deny fair compensation to copyright owners, and would place an unfair financial burden on cable systems located distant from urban areas. For this reason, the Com-