Broadcasting Oct 31 - American Radio History

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Tom Enders, who was then undersecretary of state, and his succes- sors. What do we have? We have net -net a major victory for broadcasters in Radio Marti; one that a year ago nobody said was possible. We have, in addition to that, ongoing negotiations between the Cubans and the United States for the first time in recent years-to try to resolve the incompatibilities and the technical problems between the broadcasting systems in Cuba and in the United States. That's major -that helps eliminate a lot of interference, potentially. We have 221 co- sponsors on a major piece of legislation before the House of Representatives. Never before has NAB gone after co- sponsors to this magnitude, to see the degree of success that we have reached with 221 co- sponsors. Our objective was to get the majority of the House of Representatives- bipartisan- Republicans and Democrats -from all over the country. We're pleased with that. The Freedom of Expression Foundation. Strong movement. Strong support from NAB and the other entities in town, and in universal communications. We think that's significant. We think that it's going to be sort of the wave of the future and something that we're going to work toward in the future. So, on balance, even though there have been some uneven tides, if you will, during this fast year -and I think any time there is a change of any type, in any organization, there.are some ripple ef- fects-on balance, I have to say I am very enthusiastic, I am very encouraged. We've treaded some tough waters in the first year, and we antici- pate that those waters have smoothed substantially, and that in the future, hopefully, the wind will be at our back. We think we're making progress, and underlying all that, we feel that the net result is AT LARGE 411w & Roq ao Appeals court criticizes CRT, upholds most of '79 decision Panel rejects MPAA request for greater percentage; tells tribunal to review claims for religious groups and sports The Copyright Royalty Tribunal's distribution of the $20 million in royalty fees paid by the nation's cable television operators in 1979 was criticized by a three judge panel of the U.S. Court of Appeals last week as less than an artistic success. And in some re- spects- including some questions raised on appeal by the National Association of Broadcasters -the court remanded the decision to the tribunal for reconsideration. But in the main, the decision was affirmed. For the most part, that means the Motion Picture Association of America was the prin- cipal loser in a case involving six appeals and dozens of intervenors. MPAA, arguing on behalf of 58 producers and syndicators, said those program suppliers are entitled to more than the 70% of the total fund that was allocated to them as groups in Phase I of the distribution. MPAA also said that in Phase II they should receive all of the funds assigned to syndicators and producers, rather than only 96.8 %. The panel rejected those arguments. The NAB, however, persuaded the panel to direct the tribunal to reconsider its refusal to accord any weight to television broadcasters' contributions to sports broadcasts, or to allocate any part of the royalty fund to radio broadcasters. The panel also remanded the portion of the tribunal's decision denying "devotional claimants" -the Christian Broadcasting Network, Old Time Gospel Hour and PTL Television Network -any share of the royalties distributed among suppliers and movie producers, in Phase II. The last case considered by the panel in- volved an appeal by the Spanish Internation- al Network, which was seeking to increase its allocation of 0.7% of the royalties al- lowed producers at the expense of the award to MPAA. That effort failed. The 1979 distribution by the tribunal was the second it made after being established under the Copyright Act of 1976 -and was the second challenged in a number of appeals. The tribunal's decision regarding the 1978 distribution emerged almost entirely intact. As in that proceeding, the appeals court panel last week, in a unanimous decision, said the claims "are motivated essen- tially by each petitioner's feeling that it de- served a larger share of the fund." And it Broadcasting Oct 31 1983 54 that NAB is a much stronger association with its membership, with its staff, and even on the Hill. We have made contacts in this Congress. Even though there are those who say we are greedy and arrogant, there are those who do not say we are greedy and arrogant; on the other hand, there are those who say that we're very, very calculating and that we're very re- served in our approach and that they're glad to see us up there working. Even Chairman Dingell has said: "You have dealt with us fairly and on top of the table." And we're very pleased to see that. I want to go back to make sure we don't lose a chance for you to answer the question about leaving your own mark on NAB. Well, let's face it, this is not Eddie Fritts's NAB. This is not Vince Wasilewski's NAB and it's not Leroy Collins's NAB. This is an association of broadcasters -large and small, radio and television, all across the country- unified in an effort to move the industry forward as technology changes and as the competitive climate changes. I don't know if it's Eddie Fritts's mission to put a "mark," per se, so that I can say I've accomplished a specific goal at NAB. We have goals, no question, but they're not goals for Eddie Fritts, they're goals for this association and for this total staff. I think we've been reasoned, and if you can say this in the same context, aggressive, but yet conservative. I don't think we've made major mistakes. I think we've corrected a lot of ills -hopefully, for a positive effect. N noted that the tribunal again was confronted with "a welter of conflicting data" based on a variety of factors. The panel did not fmd the arguments MPAA had used in seeking "a larger share of the fund" persuasive. MPAA had said suppliers suffered " harm" as a result of cable retransmission of their material. But the panel said the tribunal had been correct in down- playing the evidence of harm, which was largely "anecdotal." The panel also rejected the argument that the tribunal had not adequately explained its awards to sports claimants -15% -and television broadcasters, represented by the NAB- 4.5% -in Phase I of the distribution. It said the sports claimants had presented evidence that "cable operators perceive sports programing to account significantly for the ability of cable systems to attract and retain subscribers." The panel acknow- ledged that the tribunal's explanation of its grant to NAB was "tortured "; nevertheless, it concluded the award was "within the zone of reasonableness." As for the award of 96.8% of the funds allocated to suppliers in Phase II, MPAA said that constitutes the imposition of a pen- alty on the 58 companies it represents, for they had agreed to divide among themselves 98.5% of the suppliers' allocation. The panel called the argument "groundless." It said the tribunal not only indicated it "welcomes" voluntary agreements but had also said the
"aggregate" evidence relied on by MPAA was less persuasive than the individually tai- lored evidence of the other parties who shared in the remainder of the funds allotted to suppliers -Multimedia Program Produc- tions (1.6 %), NAB (0.8 %) and SIN (0.7 %). The NAB 's success in persuading the panel to remand that portion of the tribunal's decision regarding television broadcasters' contributions to sports telecasts was a dem- onstration of a lesson well learned. The court, in ruling on the same question in NAB 's appeals from the 1978 distribution, agreed that the cameramen and director who cover a football or baseball game are partici- pating in an act of "authorship." However, the court did not remand that portion of the decision because NAB had presented no evidence. In the 1979 proceeding, however, NAB did. The panel last week noted the association had demonstrated the manner in which instant replay, split screens, play -by- play commentary and video -audio editing "add to the enjoyability of a sports telecast." However, the panel simply directed the tribunal to assess the evidence -it expressed "no view on the distribution (if any) due broadcasters for their contribution to sports telecasts." As for NAB's claim regarding commercial radio broadcasters, the panel said it found an "inconsistency" in the tribunal's treatment of music claimants -who were allocated 4.25% of the fund for the perfor- mance of copyrighted music relayed from distant radio stations -and the denial of any award to NAB. The tribunal said it had been unable "to discern any significant marketplace value or benefit from distant commercial radio carriage." The panel directed the tribunal either to include radio in the distribution of royalty fees or to provide an "improved explanation of its nonaward to NAB." The NAB had also said the tribunal's posi- tion on commercial radio could not be recon- ciled with its decision to award National Public Radio .25% of the fund. The panel disagreed on that point, however. It said "there is substantial evidence for the tribunal's conclusion that NPR's programing is of a distinctive quality," as well as for the conclusion "that the quality of NPR's programing has special appeal to cable subscribers." The panel remanded the portion of the tribunal's decision denying the "devotionals" an award on the ground that it does not reflect "reasoned decision making." Indeed, the panel suggested it was arbitrary. The tribunal found that devotional programing had no marketplace value because the producers paid broadcasters to carry it, and it said they are not "harmed" by cable retransmission of their programing. But as for the first point, the panel said the tribunal did not acknowl- edge, let alone discuss, "record evidence suggesting factual weakness in its neat conclusion"- specifically, the devotionals' claim that their payments to broadcasters constitute a "self- inflicted cost of commercial-free formatting rather than any external indication of market worthlessness." It also noted that the tribunal made awards to public broadcasting claimants "regardless of 'commercial marketplace factors.' " As for the point that the devotionals actually benefit from cable carriage -the panel said the tribunal never presented the reasons why those benefits "completely foreclose" the devotionals from any award. SIN had challenged the tribunal's rejec- tion of a "fee- generated" formula for award- ing distribution. It had claimed that the use of such a formula -which links the distribution of royalty fees to the amount of fees paid into the fund -would entitle it to a larger portion of the fees allocated to suppliers. SIN also challenged the allocation of those fees that the tribunal made to MPAA, on the ground it was made without proper regard to copyright ownership. But the panel said nei- ther argument provides "a defensible reason for upsetting the tribunal's decision." After threading its way through the claims of the litigants and the holdings of the tribunal, the appeals court panel, in the opinion written by Judge Abner Mikva, made it clear it expects improved decision writing from the tribunal in the future. The court is aware the tribunal operates without a staff, and ac- knowledged the tribunal's task may become even more difficult as claimants attempt to interpret the nuances of the tribunal's past decisions and to improve accordingly the so- phistication of their evidentiary presenta- tions." And, Mikva wrote, "We do not mean to charge the tribunal with needless formalism ...But Congress has directed the tribunal to state in detail the criteria, factual findings and 'specific reasons' for its determina- fons...The tribunal may not abdicate this Almost on board. Terry Galvani, an anti- trust professor at Vanderbilt University law school in Nashville, has been nominated to the Federal Trade Commission, pending final Senate approval. Calvani, who is also counsel to the Birmingham, Ala-based law firm of North, Haskell, Slaughter, Young & Lewis, passed through the initial confirmation hearing on Oct. 5 with "no opposition," according to an FTC spokeswoman. His recommen- dation from the Senate Commerce Com- mittee is expected in markup, which has not yet been scheduled. Galvani, a Re- publican, has been nominated to fill the seat of Commissioner David Clanton, whose term expired Oct. 14. Broadcasting Oct 31 1983 55 responsibility. Nor may it attempt to distin- guish apparently inconsistent awards with simple undifferentiated allusions to a 10,000 -page record. As the tribunal contin- ues to accumulate experience with royalty fee distributions, we continue to hope that the clarity of its decision making will improve." Mikva was joined in the opinion by Chief Judge Spottswood Robinson III and Judge Malcolm Wilkey. FCC gets first MMDS deluge Commission receives 16,499 applicants for new service; many file for multiple cities; no estimate on when first grants will be processed The telecommunications industry may or may not be competitive, but competition for telecommunications licenses is getting fierce. That would seem evident from the FCC's recently authorized multichannel multipoint distribution service: according to the FCC, the service has drawn 16,499 applications ( "In Brief," Oct. 24). A series of lists released by the FCC last week reveals that much of the interest in MMDS is being expressed by those already in the telecommunications business: broadcasters, cablecasters, MDS operators -and even telephone companies. But some sur- prising newcomers -for example, the Mil- waukee Brewers Baseball Club (Chicago, Denver /Boulder, Colo., Milwaukee/Racine, Wis., and San Antonio, Tex.) -have applied as well. Judging from the FCC lists, any one ap- plicant's chances of actually getting an MMDS license in a major market through the lotteries the commission has proposed are slim. New York, Los Angeles and Phila- delphia, for example, drew close to 150 applications apiece. Even Anchorage attracted 66. Interest in serving smaller markets was generally less intense. However, only a handful of small markets-Clifton, Ariz., among them -drew only one application. Many companies filed multiple applications. American Box Office Inc., a Denver - based satellite master antenna television operator, led the pack by asking for 413; Broadcast Data Corp., a subsidiary of Graphic Scanning Corp., Teaneck, N.J., a radio common carrier, applied for 330; Na- tional Television Co. (which listed an ad- dress for Management Analysis Center, Washington) applied for 310; MDS operator Microband Corp. of America applied for more than 200, and Fortuna Systems Corp., Flagstaff, Ariz., applied for 205. The television networks weren't nearly as ambitious. ABC, for example, applied for Chicago, Los Angeles, New York City and San Francisco. CBS applied for Chicago, Los Angeles, New York City, Philadelphia and St. Louis. And NBC's parent, RCA,
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Broadcasting Oct 31 - American Radio History

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