64984 Federal Register / Vol. 78, No. 210 / Wednesday, October 30, 2013 / Notices 

1Amazing Facts, American Religious Town Hall, 

Inc., Catholic Communications Corporation, The 

Christian Broadcasting Network, Inc., Coral Ridge 

Ministries Media, Inc., Cottonwood Christian 

Center, Crenshaw Christian Center, Crystal 

Cathedral Ministries, Inc., Evangelical Lutheran 

Church in America, Faith For Today, Inc., Family 

Worship Center Church, Inc. (d/b/a Jimmy Swaggart 

Ministries), In Touch Ministries, Inc., It Is Written, 

Liberty Broadcasting Network, Inc., Rhema Bible 

Church a/k/a Kenneth Hagin Ministries, Joyce 

Meyer Ministries, Inc. f/k/a Life in the Word, Inc., 

Oral Roberts Evangelistic Association, Inc., RBC 

Ministries, Reginald B. Cherry Ministries, Ron 

Phillips Ministries, Speak the Word Church 

International, The Potter’s House of Dallas, Inc. 

d/b/a T.D. Jakes Ministries, and Zola Levitt 

Ministries comprise the SDC. 

2The National Association of Broadcasters as 

representative of program suppliers (NAB), and 

Joint Sports Claimants (JSC) also filed Petitions to 

Participate in Phase II of this proceeding. Issues 

relating to claims represented by NAB were 

resolved prior to the Phase II hearing by agreement. 

See Joint Notice of Settlement (of the Motion Picture 

Association of America and NAB) (Jan. 26, 2012). 

Based on preliminary motions, the Judges resolved 

all issues relating to claimants in the Sports 

Programming category. See Memorandum Opinion 

and Order, Docket No. 2008–2 CRB CD 2000–2003 

(Phase II) (Mar. 21, 2013); Order on Motion by Joint 

Sports Claimants for Section 801(c) Ruling, or in the 

Alternative, A Paper Proceeding in the Phase I 

Sports Category, Docket No. 2008–2 CRB CD 2000– 

2003 (Phase II) (May 17, 2013); and Order on 

Motion for Distribution, Docket No. 2008–2 CRB CD 

2000–2003 (Phase II) (May 23, 2013). 

3 IPG initially asserted that certain of its 

represented copyright owners’ works also fell 

within the Sports category. The Judges 

subsequently rejected IPG’s claim to any of the 

Phase II Sports category royalties. See supra, note 

2. 

DEPARTMENT OF LABOR 

Wage and Hour Division 

RIN 1235–0018 

Extension of the Approval of 

Information Collection Requirements 

AGENCY: Wage and Hour Division, 

Department of Labor. 

ACTION: Notice. 

SUMMARY: The Paperwork Reduction Act 

of 1995 (PRA), 44 U.S.C. 3501 et seq., 

and its attendant regulations, 5 CFR part 

1320, require that the Department 

consider the impact of paperwork and 

other information collection burdens 

imposed on the public. Under the PRA, 

an agency many not collect or sponsor 

the collection of information, nor may it 

impose an information collection 

requirement unless it displays a 

currently valid Office of Management 

and Budget (OMB) control number. See 

5 CFR 1320.8(b)(3)(vi). The OMB has 

assigned control number 1235–0018 to 

the Fair Labor Standards Act (FLSA) 

information collections. In accordance 

with the PRA, the Department solicited 

comments on the FLSA information 

collections as they were proposed to be 

changed by a Notice of Proposed 

Rulemaking published December 27, 

2011 (76 FR 81199–200). 44 U.S.C. 

3506(c)(2). The Department also 

submitted a contemporaneous request 

for OMB review of the proposed 

revisions to the FLSA information 

collections, in accordance with 44 

U.S.C. 3507(d). On February 29, 2012, 

the OMB issued a notice that continued 

the previous approval of the FLSA 

information collections under the 

existing terms of clearance. (See OMB 

ICR Reference no. 201205–1235–002 

http://www.reginfo.gov/public/do/

PRAViewICR?ref_nbr=201205-1235- 

002). The OMB asked the Department to 

resubmit the information collection 

request upon promulgation of a Final 

Rule, after considering public comments 

on the December 27, 2011 Notice of 

Proposed Rulemaking. The Department 

published Application of the Fair Labor 

Standards Act to Domestic Service; 

Final Rule, in the Federal Register on 

October 1, 2013 (78 FR 60454). At the 

time of publication, the Department 

stated its intent to publish a notice 

announcing OMB’s decision regarding 

the information collection (78 FR 

60497). 

Notice is hereby given that the OMB 

has approved the extension of the 

existing information collections under 

control number 1235–0018. The OMB 

has also pre-approved changes in the 

information collections that result from 

the Application of the Fair Labor 

Standards Act to Domestic Service; 

Final Rule; these changes become 

effective January 1, 2015. 

Dated: October 24, 2013. 

Mary Ziegler, 

Director, Division of Regulations, Legislation, 

and Interpretation. 

[FR Doc. 2013–25598 Filed 10–29–13; 8:45 am] 

BILLING CODE 4510–27–P 

LIBRARY OF CONGRESS 

Copyright Royalty Board 

[Docket No. 2008–2 CRB CD 2000–2003 

(Phase II)] 

Distribution of the 2000, 2001, 2002 

and 2003 Cable Royalty Funds 

AGENCY: Copyright Royalty Board, 

Library of Congress. 

ACTION: Final distribution order. 

SUMMARY: The Copyright Royalty Judges 

announce the final Phase II distribution 

of cable royalty funds for the years 2000, 

2001, 2002 and 2003 for the Program 

Suppliers and Devotional programming 

categories. 

DATES: Effective October 30, 2013. 

ADDRESSES: The final determination also 

is posted on the Copyright Royalty 

Board Web site at http://www.loc.gov/

crb. 

FOR FURTHER INFORMATION CONTACT: 

Richard Strasser, Senior Attorney, or 

Gina Giuffreda, Attorney Advisor. 

Telephone: (202) 707–7658; Email: crb@

loc.gov. 

SUPPLEMENTARY INFORMATION: On 

February 10, 2011, the Copyright 

Royalty Judges (Judges) published a 

notice of initiation of Phase II 

distribution proceedings relating to 

cable retransmission royalties for 

royalty years 2000 through 2003. 76 FR 

7590 (Feb. 10, 2011). Participants in the 

proceeding included the Motion Picture 

Association of America as 

representative of program suppliers 

(MPAA), the Settling Devotional 

Claimants (SDC),1 and Worldwide 

Subsidy Group LLC d/b/a Independent 

Producers Group (IPG).2 IPGrepresented claimants include copyright 

owners whose works fall within either 

the Program Suppliers category or the 

Devotional Programming category.3

Based on the considerations and 

analysis set forth in this Final 

Determination, the Judges conclude that 

the distributions at issue in this 

proceeding shall be: 

ALLOCATION IN THE PROGRAM SUPPLIERS CATEGORY

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

MPAA ............................................................................................................... 98.84 99.69 99.64 99.77 

IPG ................................................................................................................... 1.16 0.31 0.36 0.23 


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4Although Mr. Alan Whitt began his testimony, 

the Judges ultimately did not admit it into evidence. 

See 6/6/13 Tr. at 1358–62. By stipulation of the 

parties, the Judges accepted the written testimony 

of Mr. Michael Little (but not all exhibits). See 

Stipulation Regarding Testimony of Michael D. 

Little (May 31, 2013). 

5 In Phase I of the current proceeding, the 

claimants organized themselves into the following 

claimant categories: devotional programs, sports 

programs, Canadian programs, commercial 

programs, noncommercial television programs, 

noncommercial radio broadcast programs, music on 

all broadcast programs, and program suppliers. See 

Distribution of the 2000–2003 Cable Royalty Funds, 

Distribution order, in Docket No. 2008–2 CRB CD 

2000–2003, 75 FR 26798 (May 12, 2010). IPG 

challenged the category definitions; the Judges 

rejected IPG’s challenge, finding that IPG was 

‘‘collaterally estopped from contesting the 

definitions established by the final Phase I 

determination’’ since IPG did not file a Petition to 

Participate in Phase I of the proceeding. See Order 

on Motion by Joint Sports Claimants for Section 

801(c) Ruling, or in the Alternative, a Paper 

Proceeding in the Phase I Sports Category, Docket 

No. 2008–2 CRB CD 2000–2003 (Phase II), at 2 (May 

17, 2013). The claims categories adopted by the 

Phase I parties were developed over a number of 

years through a series of settlements by participants 

in successive royalty distribution proceedings. 6The Librarian was responsible for administering 

the Copyright Arbitration Royalty Panel (CARP) 

process for distributing cable royalties from 1993, 

when the Copyright Royalty Tribunal (CRT), a 

predecessor adjudicative body, was abolished, until 

2005, when the Copyright Royalty Judges program 

was established. The Librarian had the obligation of 

reviewing CARP decisions and, on recommendation 

of the Register of Copyrights, adopting, modifying 

or rejecting them. 

ALLOCATION IN THE DEVOTIONAL CATEGORY

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

SDC ................................................................................................................. 62.86 60.92 58.98 60.92 

IPG ................................................................................................................... 37.14 39.08 41.02 39.08 

The following findings of fact and 

conclusions of law are based upon the 

evidence introduced at the hearing, the 

accepted written and live testimony of 

the witnesses, the direct and rebuttal 

statements of the parties, the 

precedential guidance discussed in this 

Final Determination, and consideration 

of the economic analyses offered by the 

parties. 

I. Background 

Beginning June 3, 2013, the Judges 

considered testimony of nine 

witnesses 4 and concluded with 

argument of counsel on June 6, 2013. 

During the course of the proceeding, the 

Judges reviewed written statements, 

direct and rebuttal testimony, and ruled 

on pre-hearing motions regarding 

discovery and other issues raised by the 

parties. The parties submitted proposed 

findings of fact and conclusions of law 

on June 14. 

On July 10, 2013, the Judges issued to 

the parties their Initial Determination. 

Pursuant to 17 U.S.C. 803(c)(2) and 37 

CFR Part 353, SDC filed a motion for 

rehearing. After reviewing the motion, 

the Judges denied the motion for 

rehearing. Order Denying Motion for 

Rehearing, Docket No. 2008–2 CRB CD 

2000–2003 (Phase II) (Aug. 7, 2013). As 

explained in the August 7, 2013 Order, 

the Judges determined that none of the 

grounds set forth in the motion 

constituted the type of exceptional 

case—namely, (1) an intervening change 

in controlling law, (2) the availability of 

new evidence, or (3) a need to correct 

a clear error or prevent manifest 

injustice—warranting a rehearing. Id. 

A. Statutory and Regulatory Premises 

Section 111 of the Copyright Act (Act) 

creates a statutory license that permits 

cable system operators (CSOs) to 

retransmit copyrighted works included 

in broadcast television signals without 

obtaining the authorization of the 

owners of those works. When a CSO 

retransmits non-exempt broadcast 

programming outside the program’s 

original, local broadcast area the CSO 

must deposit royalties based on their 

gross receipts with the Copyright Office 

semiannually. 17 U.S.C. 111(d)(1). In 

July of each year, copyright owners, 

whose works the CSOs retransmit, file 

claims to the royalties deposited for the 

previous calendar year. 17 U.S.C. 

111(d)(4)(A). Claimants may file 

individual claims or joint claims 

directly, or through an authorized agent. 

The Judges are charged with 

allocation and distribution of the 

statutory license royalties deposited 

with the Copyright Office. 17 U.S.C. 

111(d)(4). By statute and regulation, the 

Judges must render a decision and issue 

a determination regarding distribution 

of the collected funds within 11 months 

of conclusion of a statutorily mandated 

settlement conference. 17 U.S.C. 

803(c)(1); 37 CFR 352.2. The settlement 

conference in this proceeding took place 

on August 10, 2012. See Order Adopting 

Protective Order and Amending 

Discovery Schedule, Docket No. 2008–2 

CRB CD 2000–2003 (Phase II), at 3 (July 

10, 2012). 

Historically, individual and joint 

claimants have utilized a common 

representative to pursue on their behalf 

collection and distribution of the 

deposited royalties. Each representative 

pursues claims within a program 

category. Distribution proceedings, by 

convention, have progressed in two 

phases. In Phase I of the proceeding, 

claimants contest the allocation of 

royalties among the program categories.5

If representatives of the categories agree, 

the Judges may authorize distribution to 

the categories in the agreed percentages. 

If the representatives do not agree, the 

Judges initiate what has come to be 

known as a Phase I distribution 

proceeding. The Judges may authorize 

partial distributions pending resolution 

of the controversies, provided that 

sufficient funds remain to cover the 

amounts in controversy. See 17 U.S.C. 

801(b)(3). 

The allocation of funds among 

individual claimants within a particular 

category occurs in what has been termed 

Phase II of the distribution proceeding. 

Similar to Phase I, if the claimants 

agree, the representatives may distribute 

funds in accordance with the content of 

the claims and any representation 

agreement they may have with the 

claimants. If the validity or amount of 

a claim, or the claimant’s proportional 

share of the funds within a category, is 

in controversy, the Judges commence a 

Phase II proceeding to resolve the 

controversies. 

B. Guiding Precedent 

Section 111(d)(4) of the Act provides 

that, in the event of a controversy 

concerning the distribution of royalties, 

‘‘the Copyright Royalty Judges shall, 

pursuant to Chapter 8 of [title 17], 

conduct a proceeding to determine the 

distribution of royalty fees.’’ Unlike 

sections of the Act that apply to the 

determination of rates, Section 

111(d)(4), which deals with 

distributions, does not set forth an 

economic standard that the Judges shall 

apply in order to determine how to 

distribute the royalties. 

As the Librarian of Congress 

(Librarian) 6 has stated: 

Section 111 does not prescribe the 

standards or guidelines for distributing 


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7The 1993–1997 Librarian Order was vacated as 

moot after the parties settled their appeals. 

Distribution of 1993, 1994, 1995, 1996 and 1997 

Cable Royalty Funds, Notice of termination of 

proceeding, Docket No. 2000–01 CARP CD 93–97, 

69 FR 23821 (Apr. 30, 2004). The settlement and 

vacatur of the 1993–1997 Librarian Order did not 

disturb the reasoning articulated therein. Id. at 

23822. 

8 1979 Cable Royalty Distribution Determination, 

Notice of final determination, in Docket No. CRT 

80–4, 47 FR 9879 (Mar. 8, 1982) (1979 

Determination); 1980 Cable Royalty Distribution 

Determination, Notice of final determination, in 

Docket No. CRT 81–1, 48 FR 9552 (Mar. 7, 1983) 

(1980 Determination); 1981 Cable Royalty 

Distribution Determination, Notice of final 

determination, in Docket No. CRT 82–1, 49 FR 7845 

(Mar 2, 1984) (1981 Determination); 1982 Cable 

Royalty Distribution Determination, Notice of final 

determination, in Docket No. CRT 83–1, 49 FR 

37653 (Sept. 25, 1984) (1982 Determination); 1983 

Cable Royalty Distribution Proceeding, Notice of 

final determination, in Docket No. CRT 84–1 83CD, 

51 FR 12792 (Apr. 15, 1986) (1983 Determination); 

1984 Cable Royalty Distribution Proceeding, Notice 

of final determination in Docket No. CRT 85–4– 

84CD, 52 FR 8408 (Mar. 17, 1987) (1984 

Determination); 1985 Cable Royalty Distribution 

Proceeding, Notice of final determination, in Docket 

No. CRT 87–2–85CD, 53 FR 7132 (Mar. 4, 1988) 

(1985 Determination); 1986 Cable Royalty 

Distribution Proceeding, Notice of final 

determination, in Docket No. CRT 88–2–86CD, 54 

FR 16148 (Apr. 21, 1989) (1986 Determination); 

1987 Cable Royalty Distribution Proceeding, Notice 

of final determination of Devotional Claimants 

controversy, in Docket No. CRT 89–2–87CD, 55 FR 

5647 (Feb. 16, 1990) (1987 Devotional 

Determination); 1987 Cable Royalty Distribution 

Proceeding, Notice of final determination of music 

controversy, in Docket No. 89–2–87CD, 55 FR 11988 

(Mar. 30, 1990) (1987 Music Determination). 

9 Determination of the Distribution of the 1991 

Cable Royalties in the Music Category, Docket No. 

94–3 CARP CD 90–92, 63 FR 20428 (Apr. 24, 1998) 

(1990–1992 Determination); 1993–1997 Librarian 

Order, 66 FR 66433. 

10 Devotional Claimants, JSC, National 

Association of Broadcasters for U.S. Commercial 

Television Broadcaster Claimants, Music Claimants, 

MPAA, and Public Television Claimants comprised 

the ‘‘Settling Parties.’’ 

royalties collected from cable operators 

under the statutory license. Instead, Congress 

decided to let the Copyright Royalty Tribunal 

‘‘consider all pertinent data and 

considerations presented by the claimants’’ 

in determining how to divide the royalties. 

Distribution of 1993, 1994, 1995, 1996 

and 1997 Cable Royalty Funds, Order, 

in Docket No. 2000–2 CARP CD 93–97, 

66 FR 66433, 66444 (Dec. 26, 2001) 

(quoting H.R. Rep. No. 1476, at 97 

(1976)) (1993–1997 Librarian Order).7

There is not, however, a wholesale 

absence of statutory guidance. Section 

111 directs the Judges to act pursuant to 

Chapter 8 of the Act. The Judges are 

guided by the general directives 

contained in Chapter 8. In particular, 

Section 801 of the Act provides, in 

pertinent part: ‘‘The Copyright Royalty 

Judges shall act * * * on the basis of 

* * * prior determinations and 

interpretations of the Copyright Royalty 

Tribunal, Librarian of Congress, the 

Register of Copyrights, copyright 

arbitration royalty panels * * * and the 

Copyright Royalty Judges, * * * and 

decisions of the court of appeals under 

this chapter.’’ 17 U.S.C. 803(a)(1). 

Accordingly, the Judges have 

reviewed the 12 prior determinations of 

Phase II proceedings under Section 111 

of the Act—ten by the CRT,8 and two by 

the Librarian under the CARP 

system 9—as well as the relevant Federal 

court cases. The Judges have identified 

several basic principles from these 

earlier proceedings that have particular 

relevance to the present proceeding. 

Relative marketplace value is the 

preeminent consideration for allocating 

shares of royalties to programs or groups 

of programs. Program Suppliers v. 

Librarian of Congress, 409 F.3d 395, 401 

(D.C. Cir. 2005); 1993–1997 Librarian 

Order, 66 FR at 66445. Although early 

CRT decisions considered other factors, 

such as the degree of harm to copyright 

owners by virtue of the statutory 

license, the benefits derived by the CSO, 

program quality and program length, 

1986 Determination, 54 FR at 16153, 

these factors have been deemphasized 

in later decisions of the CRT, the CARPs 

and the Librarian. 

In order to assess relative marketplace 

value the Judges must look to 

hypothetical, simulated, or analogous 

markets, since there is no free market for 

cable retransmission of broadcast 

television programs. See, e.g., 1993– 

1997 Librarian Order, 66 FR at 66445; 

1987 Music Determination, 55 FR at 

11993. While there is no single formula 

or source for allocating royalties, see, 

e.g., 1993–1997 Librarian Order, 66 FR 

at 66447, actual measured viewing is 

significant to determining relative 

marketplace value, id., and viewing data 

compiled by The Nielsen Company 

(Nielsen) are a useful starting point for 

determining actual viewership. See, e.g., 

1986 Determination, 54 FR at 16153. 

Nevertheless, viewing measurements are 

not perfect and the Judges must be 

prepared to make appropriate 

adjustments when claimants are able to 

demonstrate that their programs have 

not been measured or are significantly 

undermeasured. See, e.g., 1987 

Devotional Determination, 55 FR at 

5650; 1986 Determination, 54 FR at 

16153–54. 

In making distributions under Section 

111, mathematical precision is not 

required. Rather, the Judges’ rulings 

must lie with a ‘‘zone of 

reasonableness.’’ See National Ass’n of 

Broadcasters v. Librarian of Congress, 

146 F.3d 907, 929 (D.C. Cir. 1998); see 

also Asociacion de Compositores y 

Editores de Musica Latino Americana v. 

Copyright Royalty Tribunal, 854 F.2d 

10, 12 (2d Cir. 1988) (recognizing ‘‘zone 

of reasonableness’’ standard in Phase II 

proceedings); Christian Broadcasting 

Network, Inc. v. Copyright Royalty 

Tribunal, 720 F.2d 1295, 1304 (D.C. Cir. 

1983) (same). 

With the foregoing principles clearly 

in mind, the Judges apply the 

appropriate economic analysis to the 

evidence adduced at the hearing. 

II. Statement of the Case 

A. Phase I Proceeding 

In the Phase I proceeding for the 

present case the parties limited by 

stipulation the issues to be considered 

by the Judges. Distribution of the 2000– 

2003 Cable Royalty Funds, Distribution 

Order, Docket No. 2008–2 CRB CD 

2000–2003, 75 FR 26798, 26799 (May 

12, 2010) (Phase I Order). Specifically, 

the parties stipulated that the Judges 

would determine the Phase I share of 

the Canadian Claimants only, with the 

remaining balance to be awarded to the 

Settling Parties.10 Id. The stipulation 

made clear that the parties were not 

seeking the individual Phase I shares of 

the claimant groups comprising the 

Settling Parties. Id. Consequently, on 

May 12, 2010, the Judges announced the 

final Phase I shares of the Canadian 

Claimants to the cable royalties for the 

years at issue in this Phase II proceeding 

and awarded the remaining balance of 

the 2000–2003 cable royalties to the 

Settling Parties. Id. at 26807. To date the 

Judges have authorized partial 

distributions ranging from $121.7 

million in 2000 to nearly $131 million 

in 2003. On February 3, 2011, the Judges 

ordered final distribution of all cable 

royalties for 2000, 2001, 2002, and 2003 

that were no longer in dispute. Order 

Granting Phase I Claimants’ Motion for 

Further Distribution of 2000, 2001, 

2002, and 2003 Cable Royalty Funds, 

Docket No. 2008–2 CRB CD 2000–2003 

(Feb. 3, 2011). On January 17, 2012, the 

Judges denied IPG’s motion for a partial 

distribution of $3 million of the 

remaining royalties for 2000–2003, 

noting that IPG is ‘‘not an established 

claimant to cable royalties’’ and ‘‘[the 

Judges] simply do not know at this stage 

of the proceeding if IPG is entitled to a 

royalty distribution, let alone the 

amount.’’ Order Denying Independent 

Producers Group’s Motion for Partial 

Distribution, Docket No. 2008–2 CRB CD 

2000–2003 (Phase II) (Jan. 17, 2012). 

B. Commencement of Phase II 

On February 10, 2011, on request of 

program suppliers represented by 

MPAA, SDC, and JSC, the Judges 


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11Subsequently, MPAA settled its Phase II 

controversies with NAB and the Joint Petitioners, 

see Joint Notices of Settlement (January 26, 2012), 

and later with SDC, see Joint Notice of Settlement 

(May 26, 2012). 

12The March 21 Order resolved all outstanding 

challenges to the validity of claims, except the 

Judges ordered IPG to obtain written clarification of 

representation from the Billy Graham Evangelistic 

Association and sought further briefing relating to 

‘‘Claim 308 from 2000,’’ involving RBC Ministries 

in the Devotional category. The Judges validated 

Claim 308 from 2000 by order dated April 10, 2013. 

The Billy Graham organization acknowledged IPG’s 

representative authority for 2002 and 2003, thereby 

resolving that controversy in favor of IPG for those 

royalty years. See Letter from Justin T. Arnot to 

Copyright Royalty Board (Apr. 19, 2013). 

13 During the course of the proceeding, in 

correspondence (particularly email 

correspondence); pleadings; written testimony; live 

testimony; and argument of counsel, certain of the 

parties raised questions and implied, if not spoken, 

requests for action by the Judges. Except to address 

the MPAA representation issue raised by IPG, see 

section III.B.1.a and note 18, infra, the Judges 

decline to take action on issues, substantive or 

procedural, when those issues are presented 

informally. The Judges, in this instance, afforded 

IPG the benefit of the doubt inasmuch as IPG 

included the issue in a responsive pleading, albeit 

without a specific affirmative request. Affirmative 

action by the Judges without a request for action is 

unwarranted and could be contrary to principles of 

due process. The Judges considered other informal 

requests of IPG and the other participants and 

rejected them on both procedural and substantive 

grounds. 

14These objections, which were properly 

interposed by IPG’s counsel, stand in contrast with 

the views that Mr. Galaz offered on the 

admissibility in his written rebuttal testimony. The 

views of a witness on the admissibility of evidence 

are improper and the Judges do not consider them. 15See supra note 12. 

announced initiation of a Phase II 

proceeding and requested Petitions to 

Participate. See 76 FR 7590 (Feb. 10, 

2011). In response to the notice, the 

Judges received petitions from: the 

MPAA; SDC; JSC; NAB; Devotional 

Claimants; HSN, LP, AST LLC, Home 

Shopping En Espangol [sic] GP, USA 

Broadcasting Productions, USA 

Broadcasting Stations, Studios USA, 

and InterActive Corp., jointly (Joint 

Petitioners); and IPG.11 By May 2012, 

the only remaining Phase II 

controversies were those asserted by IPG 

in the Devotional, Sports and Program 

Suppliers categories. 

C. Preliminary Hearing 

In August 2012, the remaining 

participants filed motions or objections 

relating to the claims asserted by other 

participants. The participants made farranging objections and submitted papers 

and arguments to support their 

objections in a form that the Judges 

could not accept as evidence. As a 

result, the Judges denied all the motions 

and objections without prejudice and 

set the matter for an evidentiary hearing 

on claims objections. The Judges 

commenced the evidentiary hearing on 

November 13, 2012, with a continuance 

after two days of testimony to December 

5, 2012, to complete the participants’ 

presentations of evidence and argument. 

On March 21, 2013, the Judges 

entered an order resolving most of the 

claims challenges. Memorandum 

Opinion and Order, Docket No. 2008–2 

CRB CD 2000–2003 (Phase II) (March 

21, 2013) (March 21 Order).12

Subsequent to the Preliminary 

Hearing, the Judges determined that IPG 

had no remaining valid claims to 

royalties in the Sports Programming 

category. Order on Motion by Joint 

Sports Claimants for Section 801(c) 

Ruling or, in the Alternative, a Paper 

Proceeding in the Phase I Sports 

Category, Docket No. 2008–2 CRB CD 

2000–2003 (Phase II) (May 17, 2013). As 

a result, the only remaining Phase I 

categories in dispute were the Program 

Suppliers category and the Devotional 

category. The Judges’ role in this matter, 

therefore, is to determine the relative 

percentage allocations of royalties for 

2000, 2001, 2002, and 2003 between 

MPAA-represented claimants and IPGrepresented claimants in the Program 

Suppliers category and between SDCrepresented claimants and IPGrepresented claimants in the Devotional 

category. 

III. Preliminary Rulings 13

A. Admissibility of Exhibit 

The SDC, with agreement of IPG, 

offered into evidence Exhibit 177, the 

Written Direct Testimony of Mr. 

Michael. D. Little, President and Chief 

Operating Officer of The Christian 

Broadcasting Network, Inc. At the 

hearing, IPG objected to the 

admissibility of Exhibit 3 to Mr. Little’s 

testimony, which consists of 

approximately 600 pages of printouts of 

Internet Web sites. IPG objected that (1) 

the veracity of this document, derived 

from the Internet, is questionable, (2) 

Mr. Little, by his own admission, 

obtained the printouts from an 

undisclosed third party, raising further 

questions as to the veracity and 

authenticity of the Exhibit, and (3) the 

documents themselves are ‘‘just a bunch 

of random stuff without any analysis 

attached to it.’’ 6/6/13 Tr. at 1341–42. 

The Judges admitted Exhibit 177 and 

took under advisement admission of the 

attendant Exhibit 3. Id. at 1344. 

IPG’s objections are well-taken.14 The 

SDC did not lay an adequate foundation 

for Exhibit 3. Even if SDC had done so, 

the exhibit is, from a practical 

standpoint, unusable. While some of the 

more than 600 pages contain program 

information, a great many do not. In the 

format that this document was delivered 

to the Judges it is not searchable, and, 

in many cases is nearly illegible. The 

SDC did not provide a summary or 

analysis of the specific relevant facts to 

be gleaned from this stack of paper. By 

offering evidence in this form, the SDC 

places an unreasonable burden on the 

Judges and the other parties. The Judges 

reject Exhibit 3 to Exhibit 177. The 

remainder of Exhibit 177 is thus 

admitted by stipulation, with that 

redaction. 

B. Challenges to Claims Subsequent to 

the Preliminary Hearing 

To distribute royalties to a copyright 

owner under Section 111 of the 

Copyright Act, the Judges must first 

determine whether the copyright owner 

is eligible to receive such royalties. 

Universal City Studios LLLP v. Peters, 

402 F.3d 1238, 1244 (D.C. Cir. 2005); see 

Order Denying Motions to Strike Claims, 

Docket No. 2008–2 CRB CD 2000–2003 

(Phase II) at 2 (Sept. 14, 2012). Under 

the law and regulations in effect through 

July 31, 2004, in order to be eligible to 

receive Section 111 royalties, a 

copyright owner (or its duly authorized 

representative) was required to file a 

claim for royalties with the Copyright 

Office during the month of July in the 

year following the year for which the 

copyright owner seeks such royalties. 17 

U.S.C. 111(d)(4)(A) (amended 2004); 37 

CFR 252.2 (repealed 2005). Similarly, 

the copyright owner or its duly 

authorized agent must file a Petition to 

Participate in any cable royalty 

distribution proceedings within thirty 

days after the publication in the Federal 

Register of a notice of commencement 

of a proceeding. 37 CFR 351.1(b)(3). 

The Preliminary Hearing in this 

proceeding led to a resolution of almost 

all claims challenges asserted by the 

parties up to that point.15 After the 

Preliminary Hearing, some claimants 

contacted the Judges asserting an 

alliance to one representative or the 

other. By Order issued on May 20, 2013 

(Order to Show Cause), the Judges 

directed the parties to show cause why 

several of the affected claims should not 

be dismissed in light of the copyright 

owners’ statements, since it appeared 

that either no authorized entity had 

filed a claim, or, a timely claim having 

been filed, no authorized entity had 

included the claimant as part of its 

Petition to Participate in this 

proceeding. The Judges received 

additional evidence from the parties at 

the beginning of the Determination 

hearing in order to resolve remaining 

representation issues and ruled on the 


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16See Appendix A. 17Unlike the claims the Judges addressed in their 

Order to Show Cause, the Judges received no new 

information following the preliminary hearing that 

would cast doubt on the validity of the MPAA 

claims that IPG challenges. 

18Rather than lodging a formal pleading, IPG 

embedded its dissatisfaction with certain MPAA 

claims. Mention of a concern defensively rather 

than in the form of a motion or cross-motion does 

not present the issue for full consideration by the 

Judges. 

19Exhibit 500 is a restricted exhibit. See 6/3/13 

Tr. at 141. Consequently, access to this exhibit is 

limited to only the parties who have executed NonDisclosure Certificates in accordance with the 

Protective Order entered in this proceeding. 

20The following claims fall in this category: 

DreamWorks LLC, Litton Syndications, Inc., Marty 

Stouffer Productions, Ltd., Martha Stewart Living 

Omnimedia, Reel Funds International, Remodeling 

Today d/b/a Today’s Homeowner, The Television 

Syndication Company, United States Olympic 

Committee, and Urban Latino TV LLC. In addition, 

Fintage, as a representative for Venevision 

International, has asserted that MPAA should 

represent Venevision in these proceedings. In the 

Show Cause hearing several of these claims were 

dismissed for certain years. See supra note 16. 

21The claims falling in this category are: Carol 

Reynolds Productions, Inc., Cinemavault Releasing, 

Eagle Rock Entertainment, Fitness Quest, Inc., 

Integrity Global Marketing, Inc., Pacific Family 

Entertainment and Ward Productions. 

claims from the bench. 6/3/13 Tr. at 53– 

58.16

1. Program Suppliers Claims 

a. MPAA’s Representation of Joint 

Claimants 

In his written rebuttal testimony, Mr. 

Raul Galaz of IPG asserts, for the first 

time in this proceeding, that 615 claims 

represented by MPAA and identified in 

Exhibit R–15 to his testimony should be 

dismissed because MPAA has failed to 

produce adequate documentation of its 

authority to represent the ultimate 

claimants, i.e., the copyright owners. 

Galaz WRT at 35–38 and Ex. R–15. 

Each of the 615 claimants is claimed 

indirectly by MPAA. MPAA represents 

a number of entities that have filed joint 

claims on behalf of other copyright 

owners. MPAA has no contractual 

privity with those copyright owners. Its 

representation of them is by virtue of its 

representation agreements with joint 

claimants who filed on their behalf. 

This, in itself, is no impediment to 

MPAA’s representation. 

The Judges conclude that IPG’s 

challenge to MPAA’s representation of 

these 615 claimants is not properly 

before the Judges.17 IPG’s counsel made 

no motion to strike these claims at any 

time during these proceedings. 

Moreover, IPG was in a position to raise 

these challenges during the preliminary 

hearing and failed to do so in other than 

an incidental way.18

Even assuming that IPG’s challenges 

were properly before the Judges, the 

Judges would have rejected them. The 

sole ground that IPG asserts for 

invalidating the claims on Exhibit R–15 

is that MPAA has not produced 

contracts between third parties—i.e., the 

MPAA-represented program suppliers 

and the individual claimants that the 

MPAA-represented program suppliers 

represent in turn. From this lack of 

documentation IPG concludes, and asks 

the Judges to conclude, that MPAA has 

failed to establish that it is a duly 

authorized representative of those 

individual claimants. 

Neither the Act, nor any of the 

regulations adopted under it, address 

what evidence is needed to establish 

one’s authority to represent claimants in 

the filing of claims or in distribution 

proceedings before the Judges. 

Nevertheless, the Judges have stated that 

‘‘the parties must manifest in some 

unambiguous manner that they 

intended for a principal/agent 

relationship to exist between them.’’ 

March 21 Order, at 12. Ultimately the 

question of authority is a question of 

fact requiring a weighing of the 

evidence. 

In this proceeding MPAA has 

produced fully-executed Representation 

Agreements with each of the MPAArepresented program suppliers. Ex. 

500.19 Each Representation Agreement 

includes a provision stating that if the 

‘‘Claimant’’ (MPAA’s counterparty) has 

filed a joint claim, MPAA is authorized 

to represent all joint claimants to that 

joint claim. See, e.g., Ex. 500 at Bates 

no. MPAA–RP–05219, ¶ 16. Each 

Representation Agreement also includes 

a provision stating that the Claimant is 

the duly authorized representative of all 

joint claims submitted by the Claimant, 

and that the Claimant is authorized by 

all joint claimants to execute the 

Representation Agreement on their 

behalf. See, e.g., id. at Bates no. MPAA– 

RP–05219, ¶ 17. See also, 6/3/13 Tr. at 

146–150 (Kessler). By their terms, the 

Representation Agreements are 

perpetual—i.e., they remain effective 

until terminated by one of the parties. 

Ex. 500 at Bates no. MPAA–RP–05219, 

¶ 18; 6/3/13 Tr. at 157 (Kessler). 

The Judges find this evidence 

sufficient to establish that MPAA is 

duly authorized to represent the joint 

claimants covered by these 

Representation Agreements. Further 

evidence of representation, such as the 

contracts between the MPAArepresented program suppliers and the 

underlying claimants, is unnecessary in 

the absence of any evidence calling into 

question the authority of MPAA or the 

joint claimants that it represents—e.g., a 

disavowal of representation by an 

underlying claimant or evidence that 

the claimant is represented by another 

party. IPG has offered no such evidence 

with respect to the 615 claims that it 

seeks to challenge. Therefore, the 

challenge, even if IPG had raised it 

properly, would have been rejected. 

b. Overlapping Claims 

Both IPG and MPAA have identified 

different sets of overlapping claims— 

i.e., claimants that both parties claim to 

represent. Galaz WRT at 32 n.32 and Ex. 

R–11; Kessler WRT at 5. 

In some instances, claimants assert 

that they terminated their relationship 

with IPG either during the years covered 

by this proceeding or thereafter.20 These 

claimants stated that they do not want 

IPG to continue to represent their 

interests. In other instances, there are 

simply conflicting claims of 

representation, with no further 

communication from the claimants.21

As to both groups, IPG asserts that the 

terms of their agreements specify a 

termination procedure that requires at 

least six months’ notice and authorizes 

and obligates IPG to continue pursuit of 

royalties payable through the 

termination date. As to the first group of 

claims, MPAA asserts that the Judges 

should honor the claimants’ wishes to 

be represented by MPAA rather than 

IPG. MPAA has not addressed the 

second group directly. 

IPG has invited the Judges to engage 

in an interpretation of the 

representation agreements that it has 

entered into with these claimants to 

determine whether a claimant’s 

purported termination satisfies the 

requirements of the contract. This sort 

of contractual interpretation is beyond 

the Judges’ authority. See Nat’l Broad. 

Co. v. Copyright Royalty Tribunal, 848 

F.2d 1289, 1296 (D.C. Cir. 1988) 

(Tribunal’s obligation is to set forth the 

rule of distribution, not resolve 

substantive rights of the parties). Where 

a claimant has unambiguously 

manifested that it no longer wants a 

particular entity to represent its 

interests in these proceedings, the 

Judges will honor that request. To the 

extent that the claimant’s action may 

affect the rights and obligations under a 

contract between the claimant and the 

entity that purports to represent it, those 

issues must be resolved by a court of 

competent jurisdiction. See Id. 

Applying this rule, the Judges resolve 

the representation of the overlapping 

claims as follows. 


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As to the overlapping claims where 

there has been no instruction from the 

claimant concerning representation, the 

Judges will take the later-in-time 

agreement between a claimant (or its 

representative) and a party as the most 

persuasive evidence concerning 

representation. Admitted written 

agreements are deemed more persuasive 

than oral testimony about the existence 

of an agreement. 

Applying this rule, the Judges resolve 

the representation of the overlapping 

claims as follows. 


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22The Judges note that this ruling is contrary to 

the ruling from the bench regarding BBC–WA that 

was made during the Show Cause hearing. See 6/ 

3/13 Tr. at 57. Upon further reflection and 

examination of the record the Judges conclude that 

their earlier determination was incorrect. 

DISPOSITION OF OVERLAPPING CLAIMS—NO COMMUNICATION FROM CLAIMANT

Claimant 

Claim year 

Rationale 

2000 2001 2002 2003 

Carol Reynolds Productions Inc.MPAA ........... MPAA ........... MPAA ........... MPAA ........... 2000–2001: Claimant covered by MPAA Representation Agreement with CBC dated 9/25/02; no 

record evidence of IPG agreement with claimant; 

IPG concedes MPAA agreement is later in time. 

Cinemavault Releasing ... MPAA ........... MPAA ........... MPAA ........... MPAA ........... Claimant covered by MPAA Representation Agreement with AFMA dated 9/24/02; no record evidence of IPG agreement with claimant; IPG concedes MPAA agreement is later in time. 

Eagle Rock Entertainment.MPAA ........... MPAA ........... MPAA ........... MPAA ........... Claimant covered by MPAA Representation Agreement with Audio-Visual Copyright Society dated 

9/25/02; no record evidence of IPG agreement 

with claimant; IPG concedes MPAA agreement 

is later in time. 

Fitness Quest Inc ............ MPAA ........... MPAA ........... MPAA ........... MPAA ........... Claimant covered by MPAA Representation Agreement with The Goodman Group dated 7/8/04; no 

record evidence of IPG agreement with claimant; 

IPG concedes MPAA agreement is later in time. 

Integrity Global Marketing 

Inc.

MPAA ........... MPAA ........... MPAA ........... MPAA ........... Claimant covered by MPAA Representation Agreement with The Goodman Group dated 7/8/04; no 

record evidence of IPG agreement with claimant; 

IPG concedes MPAA agreement is later in time. 

Pacific Family Entertainment.Dismissed .... MPAA ........... MPAA ........... MPAA ........... Claimant covered by MPAA Representation Agreement with ComPact Collections dated 7/8/02; no 

record evidence of IPG agreement with claimant; 

IPG concedes MPAA agreement is later in time. 

Claimant not covered by MPAA petition for 2000. 

Ward Productions ............ MPAA ........... MPAA ........... MPAA ........... MPAA ........... Claimant entered into Representation Agreement 

with MPAA dated 9/27/02; no record evidence of 

IPG agreement with claimant; IPG concedes 

MPAA agreement is later in time. 

c. Claim(s) for BBC Worldwide 

Americas, Inc. 

An additional claimant—BBC—falls 

into its own category. Both MPAA and 

IPG have included BBC Worldwide 

(BBC–W) in their respective Petitions to 

Participate. Fintage Publishing and 

Collections BV (Fintage) advised the 

Judges that it had the exclusive right to 

administer and collect royalties on 

behalf of its client, EGEDA, and EGEDA, 

in turn, had such rights with respect to 

BBC–W. Notice Regarding 

Representation of BBC Worldwide, 

Venevision International, and Reel 

Funds International, Docket No. 2008– 

2 CRB CD 2000–2003 (Phase II) (May 9, 

2013). Fintage advised the Judges that it 

wished to have MPAA represent this 

claimant’s interests in the proceedings. 

Id. at 1, 3. Subsequently, the General 

Counsel of BBC Worldwide Americas, 

Inc. (BBC–WA) advised the Judges that 

it is represented by IPG. Notice 

Regarding Representation of BBC 

Worldwide Americas, Docket No. 2008– 

2 CRB 2000–2003 (Phase II) (May 21, 

2013) (BBC Notice). 

IPG filed claims on behalf of BBC–W 

for 2000, and on behalf of BBC–WA for 

2001–2003. Fintage filed a claim on 

behalf of BBC–W for 2002. BBC–WA 

filed its own claims for 2000 and 2001. 

No claims were filed on behalf of BBC– 

W for 2001 or 2003. 

This appears to be a case of mistaken 

identity on IPG’s part. BBC–WA’s 

General Counsel has clarified that BBC– 

W (or, to be precise, BBC Worldwide 

Limited) is a separate entity from BBC– 

WA. BBC Notice, at 2. IPG’s relationship 

is with BBC–WA, not BBC–W. Fintage’s 

relationship is with BBC–W (through 

EGEDA), not with BBC–WA. These are 

separate claimants with separate claims. 

There is no overlap. 

IPG, however, mistakenly identified 

its client as BBC–W, rather than BBC– 

WA, in its Petition to Participate. Any 

claimant in a distribution proceeding 

must file a Petition to Participate. 37 

CFR 351.1 (a). Section 354.1(b)(2) 

requires parties to a proceeding to file 

a Petition to Participate within 30 days 

of commencement of the proceeding, 

providing detail concerning the 

participant or claimants the participant 

is representing in a joint petition. The 

Judges may accept late petitions up to 

a date that is no less than 90 days before 

the date set for filing written direct 

statements. 37 CFR 351.1(d). That date 

is long past. It is now too late to rectify 

IPG’s error by adding a new claimant to 

these proceedings. BBC–WA is not a 

represented claimant in this proceeding, 

and IPG’s mistaken claim for BBC–W is 

dismissed.22


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23 Dr. Gray recalculated the royalty shares with 

Reel Funds and Venevision allocated to IPG. The 

shares did not change to the second decimal place. 

6/4/13 Tr. at 490 (Gray). 24The remaining MPAA claims that were 

dismissed were not included in MPAA’s petition or 

Dr. Gray’s calculations. 25Mr. Galaz claims to challenge 44 claims that 

appear in Exhibit R–2 to his written testimony. 

Only 43 claims appear in that exhibit, one of which 

IPG challenged unsuccessfully in the Preliminary 

Hearing. 

26Notwithstanding the compulsory nature of 

statutory licenses under the Copyright Act, in most 

contexts, the Act requires the Judges to consider the 

evidentiary value of directly negotiated licenses in 

setting rates and terms for royalty fees and in 

determining distributions of those fees. 

As to MPAA’s representation of BBC– 

W, the only year for which both 

predicates for representation in this 

proceeding—filing of a valid claim and 

inclusion in a Petition to Participate— 

have been met is 2002. No claims were 

filed for BBC–W in 2001 and 2003. The 

only year in which MPAA included 

BBC–W in its petition is 2002 (through 

its inclusion of Fintage which, in turn, 

listed BBC–W in its joint claim). In 

summary: 

DISPOSITION OF CLAIMS INVOLVING BBC ENTITIES

Claimant 

Claim year 

2000 2001 2002 2003 

BBC Worldwide ...................................................................................................... Dismissed .... Dismissed .... MPAA ........... Dismissed. 

BBC Worldwide Americas ...................................................................................... Dismissed .... Dismissed .... Dismissed .... Dismissed. 

Nearly all of the disputed claims are 

thus resolved in MPAA’s favor (apart 

from Reel Funds and Venevision, which 

have an insignificant effect on the 

relative shares 23). The Judges conclude 

that the dismissal of BBC–W (one 

MPAA-represented claimant out of 

approximately 1400) for three claim 

years does not have a material effect on 

the relative shares.24 Similarly, the 

dismissal of two of IPG’s claimants 

(BBC–WA for all claim years and 

Venevision for 2000) out of more than 

150 does not have a material effect on 

the relative shares. As for the allocation 

of the disputed claims to MPAA, 

MPAA’s expert witness on economics 

and econometrics, Dr. Jeffrey Gray, 

credited all of them to MPAA in his 

computation of relative shares, 6/4/12 

Tr. at 513 (Gray), so there is no need to 

make any adjustment to reflect that 

resolution. In sum, the Judges conclude 

that no adjustment to the relative 

royalty shares of IPG and MPAA is 

needed as a result of the foregoing 

determination of claims. 

2. Devotional Programming Claims 

IPG challenged 42 of the SDC’s 

claims 25 for the first time in Mr. Galaz’s 

rebuttal testimony. As with IPG’s 

challenge to 615 of MPAA’s claims, 

these challenges are not properly before 

the Judges. IPG’s counsel made no 

motion to strike these claims at any time 

during this proceeding, and IPG was in 

a position to raise these challenges 

during the Preliminary Hearing (when 

IPG challenged eighteen of the SDC’s 

claims) and failed to do so. 

Moreover, IPG does not (and cannot) 

allege that the SDC’s claims are for 

programs that were not retransmitted on 

a distant basis during the claim years 

they challenge. 6/5/13 Tr. at 905 (Galaz). 

Rather, IPG argues that the claims 

should be dismissed because the 

specific example of a broadcast the 

Devotional claimants cited in their 

claims did not take place as described 

on the claim form. The Judges rejected 

that argument as a basis for challenging 

the validity of claims in the March 21 

Order, and would do so now as well if 

IPG’s challenge were timely. 

IV. Analysis 

A. Economic Issues 

1. Relative Market Value Standard 

Despite the absence of a defined 

statutory standard, as noted above the 

Judges do not write on a clean slate. 

More particularly, prior Phase II 

determinations in cable retransmission 

proceedings have referred to a ‘‘relative 

market value’’ standard, although 

‘‘relative market value’’ has not been 

defined explicitly. In order to make 

explicit the Judges’ application of the 

relative market value standard in the 

present Determination, the Judges begin 

by expressly defining relative market 

value. 

2. Definition of ‘‘Relative Market Value’’ 

At the outset, it is necessary to 

appreciate the reason for the statutory 

license and the concomitant distribution 

proceedings. Statutory licenses 

substitute for free market negotiations 

because of a perceived intractable 

‘‘market failure’’ inherent in the 

licensing of copyrights—particularly the 

assumed prohibitively high ‘‘transaction 

costs’’ of negotiating a multitude of 

bilateral contracts between potential 

sellers and buyers.26 See, e.g., R. Picker, 

Copyright as Entry Policy: The Case of 

Digital Distribution, 47 Antitrust Bull. 

423, 464 (2002) (‘‘The modern structure 

of * * * validating or conferring rights 

in copyright holders yet coupling those 

rights with statutory licenses has the 

virtue of mitigating the exercise of 

monopoly power and minimizing the 

transaction costs of negotiations.’’); S. 

Willard, A New Method of Calculating 

Copyright Liability for Cable 

Rebroadcasting of Distant Television 

Signals, 94 Yale L.J. 1512, 1519 (1985) 

(‘‘One important reason for compulsory 

licensing * * * was to avoid the 

‘prohibitive’ transaction costs of 

negotiating rebroadcast consent.’’); S. 

Beser, W. Manning & B. Mitchell, 

Copyright Liability for Cable Television: 

Compulsory Licensing and the Coase 

Theorem, 21 J.L. & Econ. 67, 87 (1978) 

(‘‘Compulsory licensing * * * has 

lower negotiating costs than a system 

based on full copyright liability 

* * *.’’). The statutory license avoids 

this feared breakdown in the contracting 

process by allowing copyright use to be 

undertaken ex ante payment—thereby 

permitting consumers to obtain the 

enjoyment (‘‘utility,’’ in economic 

terminology) of viewing the copyrighted 

work—with the price to be paid to the 

individual copyright owner ex post 

viewing. 

The Judges begin parsing the phrase 

‘‘relative market value’’ by considering 

the word ‘‘relative.’’ The fact that the 

Phase II categories are finite (the 

allocation among categories having been 

finalized in Phase I), indicates that the 

word ‘‘relative’’ is intended to denote 

that the value of any retransmitted 

program is to be determined in relation 

to the value of all other programs in the 

respective Phase I categories. 

The next two words in the phrase— 

‘‘market value’’—are typically construed 

together. Further, ‘‘market value’’ is 

traditionally stated in decisional and 

administrative law more fully as ‘‘fair 

market value.’’ The Supreme Court has 

defined ‘‘fair market value’’ as ‘‘the 

price at which the property would 

change hands between a willing buyer 

and a willing seller, neither being under 

any compulsion to buy or sell and both 

having reasonable knowledge of 


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27Although the Judges generally agree with Dr. 

Gray’s application of the definition of ‘‘fair market 

value’’ to the definition of ‘‘relative market value,’’ 

the Judges note that Dr. Gray omitted from the latter 

the requirement that the parties have ‘‘reasonable 

knowledge of relevant facts.’’ This condition is 

important because issues regarding the hypothetical 

parties’ knowledge of such facts as viewership 

levels and CSO program bundling strategies are 

relevant to this Determination, as discussed in the 

analysis of the IPG Methodology, infra. 

28 Dismayingly, none of the parties proffered 

admissible testimony (written or oral) of a witness 

with knowledge of CSO programming. Both Mr. 

Galaz and Dr. Robinson, on behalf of IPG, and Dr. 

Gray, on behalf of MPAA, noted their lack of 

pertinent experience in connection with the 

negotiation of copyright licenses, 6/5/13 Tr. at 928– 

29 (Galaz); 6/6/18 Tr. at 1218–20 (Robinson); 6/4/ 

13 Tr. at 439 (Gray), and none of those witnesses 

offered any competent evidence as to how a CSO 

actually makes programming decisions. IPG 

attempted to introduce only the written testimony 

of a producer of a syndicated children’s show, Mr. 

Thomas Moyer, who claimed to have knowledge of 

the relative unimportance of viewership/ratings to 

CSOs. (The parties were unable to arrange for a de 

bene esse deposition of Mr. Moyer to perpetuate his 

testimony. He was subpoenaed by MPAA to testify 

in person at the hearing, but he did not appear. 

Accordingly, the Judges did not admit Mr. Moyer’s 

Written Rebuttal Testimony. 6/6/13 Tr. at 1288–98; 

1302–04. We note, though, that Mr. Moyer’s written 

testimony indicated that he lacked the experience 

necessary to provide the Judges with competent 

testimony regarding the programming decisionmaking process of a CSO.). 

29Since CSOs must retransmit a station’s signal 

in its entirety (including advertisements) without 

alteration, it cannot sell advertising on 

retransmitted broadcast channels. 17 U.S.C. 

111(c)(3). 

30 If the CSO, as a program purchaser, had some 

degree of monopsony power in the factor market, 

it could pay less than a price equal to MRP, but still 

would buy programs in a quantity at which MRP 

would equal the Marginal Cost of an additional 

program. 

31 Indeed, this notion is akin to the 

‘‘displacement’’ argument advanced in the present 

proceeding by IPG. Galaz WRT at 14. 

relevant facts.’’ U.S. v. Cartwright, 411 

U.S. 546, 551 (1973). 

Dr. Gray defined relative market value 

in his Written Direct Testimony as ‘‘the 

price at which the right to transmit a 

program carried on a distant broadcast 

signal would change hands between a 

willing buyer (a CSO) and a willing 

seller (a copyright owner), neither being 

under any compulsion to buy or sell.’’ 

Gray WDT at 7–8; see also 6/4/13 Tr. at 

445–46 (Gray).27

The Judges note that application of 

these definitions to the present dispute 

is neither simple nor obvious. More 

particularly, it is necessary to further 

define the various terms that comprise 

the foregoing definition of relative 

market value, which the Judges 

undertake below. 

a. The Hypothetical Willing Seller (the 

Copyright Owner) 

The copyright owner seeks to 

maximize profit from the licensing of 

the program to the CSO. Since the 

copyright owner’s marginal costs are 

low and approaching zero (most of the 

costs incurred in creating the work are 

sunk, fixed costs), this means simply 

that the copyright owner wants to 

maximize the revenue it receives from 

the CSO as a result of the retransmission 

of its program over the distant broadcast 

signal by that CSO. Given the minimal 

marginal costs and the ‘‘public good’’ 

aspect of a copyrighted work, the 

copyright owner, as the hypothetical 

willing seller, will always have an 

incentive to sell at some positive price, 

but will likely engage in bargaining 

whereby the copyright owner threatens 

to refuse to grant the license unless its 

(undisclosed) reservation price is 

offered. See Beser, et al, supra, at 81 

(When the CSO fails to offer a price 

which the hypothetical seller requires, 

‘‘the program supplier * * * will simply 

refuse to allow the cable system to carry 

the program’’). 

b. The Hypothetical Willing Buyer (the 

CSO) 28

For the CSO, the economics are less 

straightforward. The revenue that the 

CSO earns from retransmitted 

broadcasts is a consequence of the 

impact of the retransmissions on the 

sale of subscriptions to its cable bundles 

(packages or tiers). This is in contrast to 

the terrestrial commercial television 

station whose signal is being 

retransmitted, and whose revenues are 

received from advertisers.29

To the CSO, the program offered by 

the Copyright Owner is an input—a 

factor of production—utilized to create 

the product that the CSO sells to its 

customers, viz., the various subscription 

bundles of cable channels. In a 

hypothetical program market, a CSO 

would buy a program license for 

retransmission, as it would purchase 

any factor of production, up to the level 

at which that ‘‘factor price’’ equals the 

‘‘Marginal Revenue Product’’ (MRP) of 

that program. In simple terms, this 

means that a CSO in a competitive 

factor market would only pay a price for 

a program if the revenue that the CSO 

can earn on the next (marginal) sale of 

the final product is at least equal to that 

price. In practical terms, why would a 

CSO pay $50,000 to retransmit a 

program that the CSO estimates would 

add only $40,000 to the CSO’s 

subscriber revenue? See Beser, et al., 

supra, at 80 (‘‘To the cable system the 

value of carrying the signal is equal to 

the revenue from the extra subscribers 

that the programming will attract and 

any higher subscriber fees it can charge 

less the additional costs of importing 

the program.’’).30

c. ‘‘Neither Being Under Any 

Compulsion To Buy or Sell’’ 

The ‘‘compulsion’’ limitation within 

the definition of ‘‘fair market value’’ is 

often treated as a truism and thus not 

subject to analysis. Here, in the actual 

(i.e., non-hypothetical) market, any 

program available for purchase by the 

CSO already has been pre-bundled by 

the terrestrial broadcast station into that 

station’s signal. The CSO cannot 

selectively purchase for retransmission 

some programs broadcast on the 

retransmitted station and decline to 

purchase others; rather, the signal is 

purchased in toto. 17 U.S.C. 111(c)(3). 

Is this required bundling a form of 

‘‘compulsion’’ upon the CSO? It is 

compelled to take every program prebundled on the retransmitted distant 

station, despite the fact that the various 

pre-bundled programs would each add 

different monetary value (or zero value) 

in the form of new subscriber volume, 

subscriber retention, or higher 

subscription fees. Indeed, some 

programs on the retransmitted station 

may have so few viewers that the CSO— 

if it had the right—would decide not to 

purchase such low viewership 

programs. 

Further, certain programs may have 

more substantial viewership, but that 

viewership might merely duplicate 

viewership of another program that 

generates the same sub-set of 

subscribers. For example, 

hypothetically, the viewers of reruns of 

the situation comedy ‘‘Bewitched’’ may 

all be the same as the viewers of reruns 

of ‘‘I Dream of Jeannie,’’ a similar 

supernatural-themed situation comedy. 

However, ‘‘Bewitched’’ may have fewer 

viewers than ‘‘I Dream of Jeannie.’’ The 

hypothetical, rational profit-maximizing 

CSO that had already paid for a license 

to retransmit ‘‘I Dream of Jeannie’’ 

would not also pay for ‘‘Bewitched’’ in 

this hypothetical marketplace, because 

it fails to add marginal subscriber 

revenue for the CSO.31 Rather, the 

rational CSO would seek to license and 

retransmit a show that marginally 

increased subscriber revenue (or 

volume, if market share was more 

important than profit maximization), 

even if that program had lower total 

viewership than ‘‘Bewitched.’’ 

If the Judges were to measure 

‘‘relative market value’’ in these 

instances solely by viewership of the 

programs actually retransmitted, then 

the valuation process would arguably 

fail the ‘‘non-compulsion’’ requirement 

of the ‘‘fair market value’’ standard 


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32As discussed below, IPG suggests the need for 

such a bundling-based analysis. However, as also 

discussed below, the IPG Methodology itself fails to 

address the economics of bundling and thus serves 

only as a weak counter-argument to MPAA’s 

viewer-centric analysis. 

33A focus on marginal costs and benefits is not 

only efficient for the hypothetical buyers and 

sellers, but also for the consuming public: ‘‘Optimal 

program diversity will result if cable operators and 

the public they serve pay to copyright owners the 

marginal value derived from viewing syndicated 

programming.’’ Willard, supra, at 1518. 

34Nielsen ratings are a statistical estimate of the 

number of homes tuned to a program based upon 

a sample of television households selected from all 

television households. The findings within the 

sample are ‘‘projected’’ to national totals. A rating 

measures what percentage of the universe of 

television households are tuned in to a program. 

Lindstrom WDT at 3. 

35 Dr. Gray tested this conclusion through a threestep estimation approach. First, Dr. Gray calculated 

the relative volume of MPAA programming and IPG 

programming. Second, Dr. Gray calculated the 

relative viewership of MPAA programming and IPG 

programming (as described infra). Third, Dr. Gray 

examined statistically whether, given the same level 

of viewership, MPAA and IPG programming affect 

subscriber growth differently. Dr. Gray 

hypothesized that, in the absence of a meaningful 

difference in how the two sets of programs affect 

subscriber growth, viewership is the most 

economically sound measure of relative market 

value. Gray WDT at 14–15. 

36CDC collects and analyzes information on 

Statements of Account (SOAs) that cable systems 

file with the Licensing Division of the Copyright 

Office. CDC makes the collected information 

available to users by purchase, either on an asneeded basis or by subscription. CDC is the only 

company providing such a service. Martin WDT at 

1–2. 

37Some programs broadcast on Canadian and 

Mexican stations are, in fact, compensable in the 

Program Suppliers category. This issue is discussed 

infra. 

38Nielsen data are recorded on a county-bycounty basis. MPAA provided Nielsen with its list 

of distant viewing counties to enable Nielsen to 

produce estimates of distant cable viewing to the 

Kessler Sample stations. Nielsen conducted this 

custom analysis for MPAA. Lindstrom WDT at 5; 

6/3/13 Tr. at 288 (Lindstrom). 

39 During 2000–2003, Nielsen utilized two basic 

data collection instruments in its syndicated 

services: Meters and diaries. Lindstrom WDT at 4. 

A set meter is an electronic device attached to a 

television set in a particular household that detects 

the channel to which the television is tuned. The 

data from these set meters are converted into 

household ratings. Nielsen collected household 

meter data year-round in a random sample of 

households in selected geographic markets across 

the United States, i.e., Nielsen’s metered markets, 

during 2000–2003. Lindstrom WDT at 4; Gray WDT 

at 15–16, 18–19. 

Diaries are paper booklets in which each person 

in the household records viewing information. In 

2000–2003, diary data were collected in Nielsen’s 

diary markets during the months of November, 

February, May, July, and in some cases October and 

March, which are also known as the ‘‘sweeps’’ 

ratings periods (Nielsen Diary Data). Nielsen mailed 

seven-day diaries to homes randomly selected by 

Nielsen to keep a tally of when each television in 

the household was on, what it was tuned to, and 

Continued 

identified by Dr. Gray. Why should a 

CSO (hypothetically) be compelled to 

pay for a program based on its higher 

viewership, but which adds less value 

than another show with lower 

viewership? By extension, why should 

the Judges, in this distribution 

proceeding, establish program value 

solely as if such compulsion were 

present? 

Simply put, the hypothetical, rational 

profit-maximizing CSO would not pay 

copyright owners based solely on levels 

of viewership. Rather, the hypothetical 

CSO would (i) utilize viewership 

principally as a heuristic to estimate 

how the addition of any given program 

might change the CSO’s subscriber 

revenue, (ii) attempt to factor in the 

economics of various bundles; and (iii) 

pay for a program license (or eschew 

purchasing that license) based on that 

analysis. 

On the other side of the coin, is the 

seller, i.e., the copyright owner, under 

any ‘‘compulsion’’ to sell? In the actual 

market, one in which the terrestrial 

station signal is acquired in a single 

specific bundle by the CSO, the answer 

appears to be yes, there is 

‘‘compulsion.’’ The copyright owner 

cannot carve out its program and seek 

to maximize its value independent of 

the pre-packaged station bundle in 

which it exists. 

Of course, in the ‘‘hypothetical 

market’’ that the Judges are charged 

with constructing, it would be 

inappropriate not to consider the 

inherent bundling that would occur. 

That is, the bundling decision is a 

‘‘feature’’ rather than a ‘‘bug’’ in even a 

hypothetical market in which the 

statutory license framework does not 

exist. Thus, while the copyright owner 

could offer to supply its program at a 

given price, the equilibrium market 

price at which supply and demand 

would intersect would reflect the CSO’s 

demand schedule, which is based in 

part upon the fact that the buyer, i.e., 

the CSO, would pay only a price that is 

equal to (or less than) the MRP of that 

program in a bundle to be purchased by 

subscribers.32

To summarize, the hypothetical 

market the Judges will apply in this 

Determination contains the following 

participants and elements: (1) The 

hypothetical seller is the owner of the 

copyrighted program; (2) the 

hypothetical buyer is the CSO that 

acquires the program as part of its 

hypothetical bundle of programs; and 

(3) the absence of compulsion requires 

that the terrestrial stations’ initial 

bundling of programs does not affect the 

marginal profit-maximizing decisions of 

the hypothetical buyers and sellers.33

B. Analysis of Parties’ Proposals 

1. Program Suppliers Category 

a. Description of the MPAA 

Methodology and Proposed Allocation 

As in past distribution proceedings, 

MPAA’s calculation of relative market 

value is based almost exclusively upon 

estimated levels of viewership of the 

distantly retransmitted programs, as 

based on data received from Nielsen.34

MPAA contends that program 

viewership provides a direct and 

reasonable measure of program market 

value, especially because the allocation 

of MPAA Program Suppliers’ royalties 

in this Phase II proceeding involves 

examination of relatively homogeneous 

programming. Gray WDT at 3.35

The initial steps of MPAA’s proposed 

relative market value calculation entail 

selection of a sample of television 

stations whose programming would be 

the basis for the remuneration of 

royalties to MPAA-represented 

claimants (Kessler Sample). Ms. Marsha 

Kessler, a former executive of MPAA, 

testified that she obtained from Cable 

Data Corporation (CDC) 36 a listing of 

broadcast stations that were 

retransmitted as distant signals by cable 

systems from 2000 through 2003. Ms. 

Kessler, believing they were not 

compensable in the Program Suppliers 

category, then excluded Canadian, 

Mexican, and public television 

stations.37 Ms. Kessler ranked stations 

according to the number of distant 

subscribers and then selected her 

sample stations based on a combination 

of fees generated and distant 

subscribers. Finally, because the Nielsen 

ratings do not differentiate between 

distant and local viewing, Ms. Kessler 

performed a local county analysis for 

each sample station to identify local 

county viewing data for each station so 

that it could be filtered out by Nielsen. 

6/3/13 Tr. at 114–27 (Kessler); Kessler 

WDT at 11–13 and Appendices D, E, 

and F. The Kessler Sample was not (and 

was not intended to be) a random 

sample. 6/3/13 Tr. at 122–25 (Kessler). 

Ms. Kessler forwarded the Kessler 

Sample stations to Nielsen, instructing 

Nielsen to measure viewing only in the 

counties identified by MPAA as outside 

the originating station’s local county 

viewing area.38 Ms. Kessler further 

instructed Nielsen to place the 

programming in one of the eight Phase 

I categories. 6/3/13 Tr. at 114–27 

(Kessler); Kessler WDT at 13–14. 

Mr. Paul Lindstrom, Senior Vice 

President at Nielsen, testified that 

Nielsen provided MPAA with so-called 

‘‘diary data’’ for each of the Kessler 

Sample stations measuring viewing in 

non-local counties during sweeps 

periods.39


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who in the household was watching. Over the 

course of a four-week sweeps period, Nielsen 

mailed diaries to a new panel of randomly selected 

homes each week. At the end of each sweeps 

period, all of the viewing data from the individual 

weeks were aggregated into Nielsen’s database. 

Each sweeps period yielded a sample of 

approximately 100,000, aggregating to 400,000 

households over the course of a year. Lindstrom 

WDT at 4; Gray WDT at 15–16; 6/3/13 Tr. at 290, 

296–98, 312 (Lindstrom). 

40 In fact, Reznick failed to exclude the network 

programming and this task was performed by Dr. 

Gray. 6/3/13 Tr. at 246–48 (Patterson); 6/4/13 Tr. at 

488–89 (Gray). 

41The MPAA list of titles was compiled initially 

through program title information that was 

submitted by the claimants it represents and from 

its own research. MPAA then prepared a 

certification report listing the titles that it believed 

were attributable to the claimant, and supplied a 

certification form for the claimant to sign verifying 

that it has the right to claim retransmission royalties 

for the works listed. Each claimant was instructed 

to strike through any titles for which it was not 

entitled to claim retransmission royalties. Kessler 

WDT at 9–10. 42To the extent the comparison analysis 

conducted by Reznick left programs that did not 

match, Reznick conducted a manual matching 

exercise. As part of this manual matching exercise, 

whenever Reznick found titles that appeared to be 

a match, it would check for other examples of the 

same or similar program titles manually inspecting 

each to determine if the programs were in fact a 

match. For non-English programs, Reznick 

employed a native Spanish speaker to assist in the 

manual matching exercise. 6/3/13 Tr. at 273–74 

(Patterson). 

43These data sets provided Dr. Gray with 

information on distant viewing, local ratings, the 

number of distant subscribers, the quarter hour of 

the day the broadcast took place, station affiliation, 

and which programs were compensable in these 

proceedings. 

44All of Dr. Gray’s calculations of program 

viewing were based on the Gray Sample. The 

Kessler Sample was merely used to make 

projections of distant viewing from the Local 

Ratings Data. 6/4/13 Tr. at 452–54 (Gray). 

45The lower and upper bounds of the 95% 

confidence intervals for the estimates of MPAA’s 

viewership shares for each year are: For the year 

2000, 98.84% to 99.03%; for the year 2001, 99.69% 

to 99.75%; for the year 2002, 99.64% to 99.74% and 

for the year 2003, 99.77% to 99.83%. Gray WRT at 

26 n.25. 6/5/13 Tr. at 754–58 (Gray). 

MPAA also retained the services of 

the Reznick Group P.C. (now known as 

CohnReznick LLP) (Reznick) to match 

title information provided by MPAA to 

compensable retransmissions of 

television broadcasts. Mr. Kelvin 

Patterson of Reznick testified that he 

and his team at Reznick conducted two 

analyses for MPAA—one based on 

Tribune Media Services (Tribune) data 

and the other based on MPAA title 

information provided to Reznick by 

MPAA. The first required Reznick to 

examine broadcast television station 

logs provided by Tribune for the Kessler 

Sample stations and a separate set of 

sample stations provided by MPAA’s 

economics expert, Dr. Jeffrey Gray (Gray 

Sample), for each of the years 2000, 

2001, 2002 and 2003, and exclude those 

program titles that are not compensable 

for purposes of this proceeding in the 

Program Suppliers category: (1) 

Programs identified in the Tribune Data 

as broadcast type ABC, CBS and NBC 

(i.e., network programming); 40 (2) 

programs airing on WGN’s local feed 

(WGN-local) that were not 

simultaneously broadcast on WGN’s 

national feed (WGN–A); and (3) 

programs not identified by Tribune as a 

series, special, movie, documentary or 

‘‘other.’’ Patterson WDT at 2–3. 

The second analysis conducted by 

Reznick involved using a computer to 

electronically compare a list of program 

titles claimed by MPAA-represented 

claimants, prepared and provided by 

MPAA,41 with the refined Tribune data 

to identify every distant retransmission 

of each MPAA title on the Kessler 

Sample stations and the Gray Sample 

stations. Patterson WDT at 3; 6/3/13 Tr. 

at 250–51 (Patterson).42 Thus, Reznick 

was able to identify the potentially 

compensable broadcasts of MPAA titles 

that aired on the Kessler Sample and 

Gray Sample stations. Patterson WDT at 

5. 

MPAA retained Dr. Gray to design an 

allocation methodology and compute 

the results of that methodology (the 

MPAA Methodology). 6/4/13 Tr. at 440 

(Gray). Dr. Gray testified that his 

analysis seeks to determine the ‘‘relative 

market value’’ of copyrighted programs 

based on an econometric model of 

estimating viewership that takes into 

account program characteristics and 

popularity that affect the program’s 

predicted relative viewership. His 

approach analyzes program volume, 

program viewing and the number of 

subscribers for the Gray Sample—a 

stratified random sample of 120 stations 

generated by Dr. Gray from CDC data for 

each year from 2000 to 2003. Gray WDT 

at 3, 9; Gray WRT at 25, 30. 

Dr. Gray relied upon five data sources 

in creating and applying the MPAA 

Methodology: (1) CDC data for all cable 

system operators in the United States 

who distantly retransmitted broadcast 

signals, which included information 

about the signals they distantly 

retransmitted as well as the total 

number of distant subscribers to those 

signals; (2) a custom analysis of Nielsen 

Diary Data, prepared by Mr. Lindstrom, 

which shows the viewing of distant 

retransmissions of the Kessler Sample 

stations during Nielsen’s ‘‘sweeps’’ 

periods; (3) information from Nielsen’s 

local ratings, derived from individual 

television electronic meters, provided 

on a quarter-hour basis, for 24 hours a 

day, seven days a week, and 12 months 

a year (Local Ratings Data), for the Gray 

Sample stations; (4) Tribune Data, 

including the program title, time of 

broadcast, information on the station, 

whether or not the station was a 

network affiliate, the type of 

programming, the actors and directors 

and other information about the 

program, for every broadcast in the 

Kessler Sample stations and Gray 

Sample stations; and (5) the Reznick 

data analyses, in the form of a list of 

MPAA compensable programming, 

based upon start time, date and station, 

and a separate list of IPG compensable 

programming, based upon start time, 

date and station. 6/4/13 Tr. at 447–50 

(Gray). 

Dr. Gray analyzed the relationship 

between distant viewing and local 

ratings, holding constant the number of 

distant subscribers, which, Dr. Gray 

posited, is equivalent to examining 

distant ratings and local ratings. Dr. 

Gray testified that he found a positive 

and strong statistically significant 

relationship between distant viewing 

and local ratings. After establishing this 

correlation, Dr. Gray built his full 

econometric model combining all of the 

five data sets he identified in his written 

testimony.43 Dr. Gray then utilized a 

multiple regression analysis to predict 

distant viewing for every single quarter 

hour, for every single program, 24 hours 

a day, seven days a week, 12 months a 

year, for all four years.44 6/4/13 Tr. at 

465–67 (Gray). 

Based on his analysis, Dr. Gray 

calculated the viewership (and 

distribution) shares of MPAA and IPG 

programming as follows.45

MPAA PROPOSED VIEWERSHIP AND DISTRIBUTION SHARES

2000 2001 2002 2003 

(percent) 

MPAA ............................................................................................................... 98.93 99.72 99.69 99.80 

IPG ................................................................................................................... 1.07 0.28 0.31 0.20 


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46Mr. Galaz claimed in his live testimony that he 

prepared a document which set forth his 

calculation of the percent of programs that Nielsen 

reported to have had zero viewing. Under 

questioning from the Judges, however, Mr. Galaz 

acknowledged that he had never provided such a 

document to MPAA, 6/5/13 Tr. at 846–47, and IPG 

did not seek to have that document admitted into 

evidence. 6/5/13 Tr. at 888–89. 

47To adapt an analogy used by Dr. Gray, if one 

were attempting to estimate the number of lefthanded individuals in the United States, by 

sampling ten people in New York City and 

Washington, DC, respectively, it would not be 

implausible to find zero left-handed people in the 

sample. However, when the sampling expanded to 

ten people each in Boston, Los Angeles, and San 

Francisco, one might find two, three, and perhaps 

even seven left-handed individuals, respectively, in 

those cities. While only about 10% of the 

population in the United States may be left-handed, 

it would make no more sense to eliminate (as 

supposedly unrepresentative) the zero counts in 

New York and Washington than it would to exclude 

the (unusually high) count of seven left-handed 

individuals in San Francisco. See 6/4/13 Tr. at 606– 

08 (Gray). 

48Since it is a hypothetical market we are 

constructing, it also would not be unreasonable to 

hypothesize that the CSO and the Copyright Owner 

might negotiate a license that would contain a 

provision adjusting the value of the license, postviewing, to reflect actual viewership. See 6/4/13 Tr. 

at 562–63 (Gray). In that regard, the Judges refer to 

one of the pre-conditions for relative market 

value—the one omitted by Dr. Gray—‘‘reasonable 

knowledge of relevant facts.’’ Actual viewership 

would be a ‘‘relevant fact’’ that could be applied if 

post-viewing adjustments to the license fees were 

hypothetically utilized by the bargaining parties. 

While the parties might find the ‘‘transaction costs’’ 

of such post-viewership negotiations and 

adjustments to be prohibitive in practice, it is the 

function of the Judges, as noted supra, to construct 

a hypothetical market in which such transaction 

costs are avoided. See O. Williamson, The 

Economic Institutions of Capitalism 45 (1985) (one 

aspect of the ‘‘transaction cost problem’’ is the 

inability of the negotiating parties to obtain ‘‘perfect 

information.’’). 

Gray WRT at 26. 

(1) Evaluation of the MPAA 

Methodology 

IPG opposes a relative market value 

assessment based solely on Nielson 

viewership data. One broad attack by 

IPG on the use of Nielsen viewership 

data is that the data do not exist until 

after the distantly retransmitted 

programs are broadcast. Thus, IPG 

argues, the hypothetical willing buyer 

and willing seller could not utilize this 

viewership data ex ante to negotiate a 

license. Galaz WDT at 13. Although this 

criticism is literally correct, it does not 

preclude the use of such viewership 

data to estimate the value of the 

hypothetical licenses. Ideally, it might 

be preferable to utilize anticipated 

viewership as the viewership-centric 

measure of value. 

However, such a measure would be 

quite difficult to assemble in a Section 

111 proceeding. Each type of program 

would be subject to its own yardstick: 

For example, reruns could be valued 

based on their prior ratings, newly 

syndicated programs could be valued 

based on the past ratings of comparable 

programs; and first-run televised movies 

could be valued based on their boxoffice value in theaters. The gathering 

and presentation of such evidence likely 

would be prohibitively expensive, and 

the evidence in the record before the 

Judges does not permit such an analysis. 

Another attack by IPG on the use of 

Nielsen Data concerns the so-called 

‘‘zero viewing’’ problem. The quarterhour sampling points within the Nielsen 

Data relied upon by MPAA contain, 

annually, between 76% and 82% ‘‘zero 

viewing’’ sampling points. Robinson 

WRT at ¶ 31. In previous Phase II 

proceedings the existence of these ‘‘zero 

viewing’’ sampling points had not been 

adequately explained by MPAA’s 

witnesses, which diminished the value 

of its methodology. See, e.g., 1993–1997 

Librarian Order, 66 FR at 66449–50. 

However, in this proceeding, MPAA has 

provided adequate evidence to 

demonstrate, to the satisfaction of the 

Judges, that the incidence of so-called 

‘‘zero viewing’’ does not preclude the 

Judges’ reliance in part upon the 

Nielsen data, subject to adjustments in 

the allocations to acknowledge some 

imprecision arising out of the ‘‘zero 

viewing’’ sample points. 

First, to be precise, the percentages of 

‘‘zero viewing sampling points’’ 

represent—on a station-by-station 

basis—the percent of total sampling 

points at which no sample households 

with Nielsen diaries recorded that they 

were viewing that station. These 

percentage figures do not represent that 

‘‘zero households’’ had viewed a 

particular program over the entirety of 

the sampling period, i.e., the sweeps 

period at issue. Although both Mr. Galaz 

and IPG’s economist, Dr. Laura 

Robinson, were critical of the high 

incidence of ‘‘zero viewing’’ sampling 

points, Dr. Robinson proffered no 

evidence, 6/6/13 Tr. at 1195–97 

(Robinson), and Mr. Galaz proffered no 

admissible or credible evidence, 6/5/13 

Tr. at 844 (Galaz),46 that the Nielsen 

data had revealed particular programs 

with ‘‘zero viewing’’ throughout the 

Nielsen diary sampling periods. This 

distinction is critical, because, under 

the hypothetical market construct, 

royalties would accrue on a program-byprogram basis to individual copyright 

owners, not to the distantly 

retransmitted stations. 

Second, the Judges agree with Mr. 

Lindstrom that these ‘‘zero viewing’’ 

sampling points can be considered 

important elements of information, 

rather than defects in the process. As 

Mr. Lindstrom testified, when doing 

sampling of counts within a population, 

it is not unusual for a large number of 

zeros to be recorded, 6/4/13 Tr. at 391– 

93, 410 (Lindstrom), and those ‘‘zero 

viewing’’ sample points must be 

aggregated with the non-zero viewing 

points. 6/3/13 Tr. at 323 (Lindstrom). 

Third, as Dr. Gray testified, when 

those zeros are included with non-zero 

data from the sample in a regression that 

correlates local and distant viewing, the 

zeros are placed in an appropriate 

statistical context. 6/14/13 Tr. at 614–15 

(Gray).47

Fourth, as Mr. Lindstrom testified, 

distantly retransmitted stations typically 

have very small levels of viewership in 

a television market fragmented (even in 

the 2000–2003 period) among a plethora 

of available stations. 6/4/13 Tr. at 393 

(Lindstrom). Thus, it would be 

expected, not anomalous, for Nielsen to 

record some zero viewing for any given 

quarter-hour period within the diary 

sampling (sweeps) period. 

Despite these reasonable and credible 

explanations of the ‘‘zero viewing’’ 

sampling points, the Nielsen data are 

not without problems. The sample size 

is not sufficient to estimate low levels 

of viewership as accurately as a larger 

sample. Mr. Lindstrom acknowledged 

that ‘‘[t]he relative error on any given 

quarter-hour for any given station * * * 

would be very high,’’ 6/3/13 Tr. at 303 

(Lindstrom)—an acknowledgment 

echoed by Dr. Gray. 6/4/13 Tr. at 518– 

19 (Gray) (agreeing that, with samples of 

10,000 households, there is a high 

relative error rate for each quarter-hour 

‘‘point estimate’’). 

Furthermore, Mr. Lindstrom 

acknowledged that he had not produced 

the margins of error or the levels of 

confidence associated with the Nielsen 

viewership data, despite the fact that 

such information could be produced. 

6/3/13 Tr. at 391–93, 410 (Lindstrom). 

Without this information, the reliability 

of any statistical sample cannot be 

assessed. (By way of comparison, Dr. 

Gray provided with his conclusions the 

margin of error and the level of 

confidence associated with his findings. 

Gray WRT at 26 n.25.). The Judges infer 

that, had such information underscored 

the reliability of the Nielsen data, it 

would have been produced by MPAA. 

Thus, the Judges conclude that 

viewership as measured after the airing 

of the retransmitted programs is a 

reasonable, though imperfect proxy for 

the viewership-based value of those 

programs.48

(2) Dr. Gray’s Economic Analysis 

The Judges credit the economic 

analysis undertaken by Dr. Gray, as set 

forth in his Written Direct Testimony 


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49Statistically valid unbiased inferences 

regarding an entire population cannot be projected 

from a non-random sample. The Judges, therefore, 

remain troubled by the fact that Dr. Gray did not 

insist on scrapping Ms. Kessler’s non-random 

sample and require (as a condition to his 

engagement as MPAA’s expert) the use of a random 

sample. Instead, Dr. Gray attempted to mitigate the 

non-randomness of Ms. Kessler’s sample by 

shrinking his 120-station random sample to the 70- 

station sample which constituted the overlap 

between the Kessler Sample stations and the Gray 

Sample stations. However, a non-randomly selected 

sub-set of an otherwise random sample is not a 

random sub-set. The 70 stations were then used to 

derive a mathematical relationship between local 

and distant viewing. That relationship was then 

used in Dr. Gray’s regression analysis to project 

distant viewing from the local viewing data for all 

120 sample stations, and, ultimately, to make a 

prediction with regard to the distant viewing of the 

entire population of MPAA and IPG programs that 

were distantly retransmitted by every CSO. 

The Judges credit Dr. Gray’s testimony that 

MPAA refused to abandon the Kessler Sample and 

that, without it, Dr. Gray would not have had access 

to distant signal viewing data with which to 

perform his regression. The Judges likewise credit 

Dr. Gray’s testimony as to the fact that scrapping 

Ms. Kessler’s non-random sample likely would 

have caused additional expense for MPAA, as 

MPAA would have been required to rely on Dr. 

Gray’s truly random sample and develop a new set 

of distant signal viewing data through additional 

work by CDC, Nielsen and Reznick. 6/4/13 Tr. at 

583–587 (Gray). Although the Judges understand 

why MPAA might have chosen to avoid this 

additional cost and rely, at least in part, on a 

compromised sample of stations, that cost-saving 

decision compromises the Judges’ ability to give 

more weight to Dr. Gray’s analysis than they have 

done in this Determination. 

Dr. Gray attempted to demonstrate that the use of 

the flawed Kessler Sample did not damage the 

accuracy of his analysis. The Kessler Sample 

suffered from Ms. Kessler’s intentional selection of 

the largest stations in terms of subscribers, and her 

‘‘intuitive’’ decision to cut off her sampling at a 

particular level. 6/3/13 Tr. at 122 (Kessler). This 

bias toward larger stations could have prejudiced 

IPG, if the programs of the IPG-represented 

claimants were relatively more concentrated on 

smaller stations than were the MPAA-represented 

programs. To test that possibility, Dr. Gray ran his 

regression including only the bottom quartile of the 

Kessler Sample stations and found no change in 

viewership estimates. 6/4/13 Tr. at 469–70, 500, 570 

(Gray). Of course, that fact only indicates that, 

within the Kessler Sample, changes in broadcast 

station size did not affect IPG negatively, and at best 

only suggests that inclusion of even smaller stations 

(excluded from the Kessler Sample or within Dr. 

Gray’s 120-station sample but excluded from the 70- 

station Kessler/Gray overlapping sample) would not 

have increased viewership estimates for IPG. 

50The Judges note that Dr. Robinson was engaged 

by IPG only two months prior to the June 2013 

hearing, and one month prior to the May 2013 

and in his oral testimony at the hearing, 

see, e.g., Gray WDT at 3; 6/4/13 Tr. at 

446 (Gray), but not without some 

reservations. First, the Judges agree with 

Dr. Gray that viewership can be a 

reasonable and directly measurable 

metric for calculating relative market 

value in cable distribution proceedings. 

Indeed, the Judges conclude that 

viewership is the initial and 

predominant heuristic that a 

hypothetical CSO would consider in 

determining whether to acquire a 

bundle of programs for distant 

retransmission, subject to marginal 

adjustments needed to maximize 

subscribership. Nevertheless, the Judges 

are reluctant to rely solely on 

viewership data merely because the 

marginal bundling adjustments are not 

readily measurable. The Judges must 

also consider subscriber fees and 

subscribership levels, even if the 

evidence relating to subscribership 

creates only a crude proxy for 

addressing the economic bundling 

issue. 

The Judges agree with Dr. Gray that 

the programs within the Program 

Suppliers category are more 

homogeneous inter se than they are in 

comparison with programs in either the 

Sports Programming or the Devotional 

Programming claimant categories. 

6/4/13 Tr. at 446, 455–57 (Gray). This 

relative homogeneity suggests that a 

rational CSO would not be as concerned 

with whether different programs would 

attract different audience segments 

(compared with more heterogeneous 

programming) and therefore such a CSO 

would rely to a greater extent on 

absolute viewership levels. The Judges 

note, however, that Dr. Gray’s position 

appears to conflict with Ms. Kessler’s 

testimony which described the mix of 

MPAA programs as quite varied (i.e., 

heterogeneous), Kessler WDT at 4–6. 

Taken at face value, Ms. Kessler’s 

observation suggests that the 

hypothetical CSO would consider 

whether there was a fragmentation of 

viewership among MPAA-represented 

programs that would reduce its reliance 

on absolute viewership and increase its 

use of a bundling analysis to exploit 

such heterogeneity. This disparity 

confirms the Judges’ conclusion that 

viewership data alone cannot form the 

basis for measuring relative market 

value. Notwithstanding Ms. Kessler’s 

testimony to the contrary, the Judges 

accept Dr. Gray’s analysis of the lack of 

an impact of changes in programming 

upon subscribership. Dr. Gray’s analysis 

suggests that, even if program 

heterogeneity could affect value via the 

CSO’s bundling choices, there is no 

evidence in the current record to suggest 

that the programs of the claimants 

whom IPG represents have created a 

programming mix that would increase 

the value of those programs vis a` vis 

programs of non-IPG claimants. 6/4/13 

Tr. 554–55 (Gray); Gray WDT 

(Amended) at App. C. 

Moreover, the Judges rely upon Dr. 

Gray’s use of a random sample of 

approximately 120 stations annually 

from 2000 through 2003 to construct his 

viewership estimates. Indeed, Dr. Gray’s 

sample is the only random sample of 

stations presented to the Judges in this 

proceeding, and must be contrasted 

with the admittedly non-random 

sampling of stations undertaken by Mr. 

Galaz and Ms. Kessler.49

The Judges view favorably Dr. Gray’s 

decision to increase his data base by 

supplementing it with Nielsen meter 

data—the Local Ratings Data—in order 

to determine, in his regression analysis, 

the relationship between local viewing 

and distant viewing of the retransmitted 

stations. 6/4/13 Tr. at 448. The use of 

this additional data allowed Dr. Gray to 

observe approximately 1.6 million 

quarter-hours of local viewing data 

(6/4/13 Tr. at 465, 467) strengthening 

his results, and further mitigating any 

potential problems with the zero 

viewing sampling points contained in 

the Nielsen Diary Data. 

Nevertheless, the Judges find that Dr. 

Gray’s decision not to summarize the 

results of his regression as it related to 

other independent variables, especially 

the impact of time of day upon the level 

of distant viewing of the transmitted 

stations, is a shortcoming in his 

analysis. Dr. Gray conceded that there 

was a strong positive relationship 

between time of day and the level of 

distant viewing, 6/4/13 Tr. at 639–41 

(Gray), which could support IPG’s use of 

a Time Period Weight Factor as a basis 

for allocating royalties. 6/4/13 Tr. at 

639–43 (Gray). 

In addition, the Judges recognize the 

criticism, leveled by IPG’s expert 

witness, Dr. Laura Robinson, that Dr. 

Gray wrongly replaced Nielsen Diary 

Data regarding distant viewing for the 

six months of sweeps, with his 

projected data, derived from Nielsen 

Local Viewing Data. Dr. Robinson also 

noted that, if Dr. Gray had retained his 

Nielsen Diary Data, with its 

approximate 80% of zero viewing 

sampling points, he should have had at 

least a level of approximately 40% zero 

viewing points in his final analysis. 

6/6/13 Tr. at 1202–03. 

In response to Dr. Robinson’s 

criticism, Dr. Gray ran the distant 

viewership numbers in the manner 

suggested by Dr. Robinson. To use Dr. 

Gray’s terminology, using these 

‘‘supplant’’ values would have resulted 

in an even greater allocation to MPAA 

at the expense of IPG. 6/6/13 Tr. at 

1328–30 (Gray). IPG objected that it had 

not been afforded the details of this 

analysis previously, but the Judges 

discount that objection, given that Dr. 

Robinson had not presented her critique 

of this aspect of Dr. Gray’s analysis until 

her live testimony at the hearing.50


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deadline for the filing of rebuttal testimony. 6/6/13 

Tr. at 122 (Robinson). IPG’s delay in that regard 

may have compromised its expert’s ability to 

construct a more comprehensive critique of Dr. 

Gray’s analysis. As Dr. Robinson was engaged after 

the Preliminary Hearing in this matter, IPG, by its 

own delay in retaining Dr. Robinson, was unable to 

seek additional discovery based upon her purported 

need for additional information. 

51Section 111(c)(4) places certain geographic 

restrictions on such retransmissions. 

52The ‘‘Joint Sports Claimants’’ category is 

defined as: 

Live telecasts of professional and college team 

sports broadcast by U.S. and Canadian television 

stations, except for programs coming within the 

Canadian Claimants category * * *. 

Kessler WRT at Addendum B. 

53The ‘‘Program Supplier’’ category is defined as: 

Syndicated series, specials and movies, other 

than Devotional Claimants programs as defined [in 

the stipulation]. Syndicated Series and specials are 

defined as including (1) programs licensed to and 

broadcast by at least one U.S. commercial television 

station during the calendar year in question, (2) 

programs produced by or for a broadcast station that 

are broadcast by two or more U.S. television 

stations during the calendar year in question, and 

(3) programs produced by or for a U.S. Commercial 

television station that are comprised predominantly 

of syndicated elements, such as music video shows, 

cartoon shows, ‘‘PM Magazine,’’ and locally hosted 

movie shows. 

Id. 

The Judges also acknowledge Dr. 

Robinson’s criticism that, given the 

level of zero viewing in the raw Nielsen 

diary data, Dr. Gray should have used a 

different regression model than his 

selected Poisson regression. Dr. Gray 

defended his use of the Poisson 

regression model, however, as a basis to 

perform a regression with such a large 

number of zeros in the data. Although 

Dr. Robinson suggested the use of 

another form of regression to account for 

the relatively high number of zeros, 

(such as a negative binomial regression), 

she did not provide any alternative 

analysis to indicate how such a different 

form of regression would have changed 

the results, and Dr. Robinson 

acknowledged that she therefore was 

unable to state that Dr. Gray’s 

conclusions were wrong. 6/6/13 Tr. at 

1279–81 (Robinson). Moreover, to the 

extent the zeros in the raw data reflect 

non-viewing of television at the moment 

of sampling, or to the extent they reflect 

poor sampling of small numbers of 

viewers, a separate regression to account 

for the zero viewing may have been 

appropriate. As noted, supra, Mr. 

Lindstrom and Dr. Gray both pointed 

out, however, small numbers of viewers, 

indeed zero viewers, is a meaningful 

sample point, given the small number of 

viewers of distantly retransmitted 

broadcast stations, so those zeros should 

not be isolated and treated differently. 

Another of IPG’s criticisms of the 

MPAA Methodology concerns the 

treatment of Canadian and Mexican 

stations. See, e.g., Galaz WRT at 40–41. 

MPAA and Dr. Gray did, in fact, exclude 

Canadian and Mexican television 

stations from the Kessler and Gray 

Samples. 6/3/13 Tr. at 116 (Kessler); 

6/5/13 Tr. at 753–54 (Gray). This 

appears to have resulted from the belief 

that programs carried on those stations 

were either not compensable, or not 

included in the Program Suppliers 

category. 6/3/13 Tr. 116–17 (Kessler); 6/ 

5/13 Tr. at 754 (Gray). This exclusion 

was an error. 

Section 111(c)(1) unambiguously 

grants cable system operators a statutory 

license to retransmit Canadian and 

Mexican broadcast stations.51 Section 

111(d)(3)(A) likewise directs that 

royalties deposited by cable system 

operators under the statutory license be 

distributed to any copyright owner 

whose work was included in a 

secondary transmission made by a cable 

system of a non-network (i.e., not ABC, 

CBS or NBC) television program on a 

distant signal basis. The statute provides 

no exception for works carried in 

retransmissions of primary signals that 

originate in Canada or Mexico. MPAA’s 

conclusion that programs carried on 

Canadian and Mexican broadcast 

stations are noncompensable was 

erroneous. 

As to the categorization of programs 

carried on Canadian and Mexican 

Stations, the parties in the Phase I 

proceeding in this matter stipulated to 

definitions of the following program 

categories: Program Suppliers; Joint 

Sports Claimants; Commercial 

Television; Public Broadcasting; 

Devotional Claimants; Canadian 

Claimants; National Public Radio; and 

Music Claimants. The definitions are 

mutually exclusive and, in the 

aggregate, comprehensive. See 

Stipulation of the Parties on the Issues 

of Program Categorization and Scope of 

Claims, Docket No. 94–3, CARP CD 90– 

92 (Feb. 23, 1996), at 3 (stating that 

Phase I categories identical to those 

used in this proceedings were ‘‘intended 

to cover all non-network television 

programs on all stations retransmitted as 

distant signals by U.S. cable systems 

* * * on a mutually exclusive basis’’). 

In other words, every compensable 

program must fall within one and only 

one program category. 

The ‘‘Canadian Claimants’’ category is 

defined as: 

All programs broadcast on Canadian 

television stations, except (1) live telecasts of 

Major League Baseball, National Hockey 

League, and U.S. college team sports, and (2) 

other programs owned by U.S. copyright 

owners. 

Kessler WRT at Addendum B. 

The first exception describes 

programs that fall within the Sports 

Programming category.52 The second 

exception includes all programs owned 

by U.S. copyright owners. Although 

programs falling within the second 

exception could, potentially, fall into 

any of the other categories, in reality 

they are all within the Program 

Suppliers 53 category. Phase I Order, 75 

FR at 26800 n.5; see also Written Direct 

Testimony of Janice de Freitas, Ex. 

CDN–1, Docket No. 2008–2 CRB CD 

2000–2003 (Phase I) at 2. 

There is no ‘‘Mexican Claimants’’ 

category, so any compensable 

programming carried on distantly 

retransmitted Mexican broadcast 

stations must fall into one of the other 

agreed categories (other than Canadian 

Claimants), including the Program 

Suppliers. It is simply incorrect to 

conclude that all compensable 

programming on distantly retransmitted 

Canadian and Mexican broadcast 

stations falls outside the Program 

Suppliers category. MPAA erred by 

excluding Canadian and Mexican 

stations from its analysis. 

The Judges do not have before them 

sufficient evidence to determine the 

precise degree to which MPAA’s 

exclusion of Canadian and Mexican 

stations has affected their proposed 

distribution. The Judges can, however, 

construct a rough estimate based on 

IPG’s sample stations, which were 

selected because they were the most 

widely retransmitted television stations 

based on fees generated. 6/5/13 Tr. at 

762 (Galaz). 

Of the 223 stations that IPG included 

in its sample for royalty year 2000, 12 

stations (5.38% of the total) were 

Canadian. Those stations represented 

4.46% of the overall number of distant 

subscribers covered in the IPG sample. 

Only two Mexican stations (0.90% of 

the total) were included in the IPG 

sample, representing 0.02% of distant 

subscribers covered in the IPG sample. 

The Judges conclude that the effect on 

MPAA’s proposed distribution shares of 

excluding Mexican stations from their 

regression analysis was negligible. On 

its face, however, the impact of 

excluding the Canadian stations may 

not be negligible. 

Evidence from the Phase I proceeding 

suggests that a relatively small amount 

of the programming on Canadian 

broadcast stations is allocable to the 

Program Suppliers category. Written 

Direct Testimony of Janice de Freitas, 

Ex. CDN–1, Docket No. 2008–2 CRB CD 

2000–2003 (Phase I) at 6 and Ex. CDN– 

1–I. Assuming, for purposes of this 

rough estimate, that there are half as 


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54 In his analysis of the IPG Methodology, Dr. 

Gray evaluated the effect of IPG’s inclusion in its 

methodology of non-U.S. programs carried on 

Canadian stations and concluded that it resulted in 

an overstatement of the value of IPG’s claims 

(perhaps reflecting a higher proportion of non-U.S. 

programming among IPG-represented programs 

than among MPAA-represented programs). Gray 

WDT at 15–17. Unfortunately that analysis sheds no 

light on the effect of MPAA’s exclusion of U.S. 

programs on Canadian stations on its calculation of 

relative shares of royalties. 

55 IPG’s samples consisted of 223 stations for 

2000; 231 stations for 2001; 200 stations for 2002; 

and 200 stations for 2003. Galaz WDT at 16; see 

Galaz WDT at Ex. IPG–4; 6/5/13 Tr. at 762, 790 

(Galaz). 

56The stations surveyed as part of the IPG Sample 

accounted for 89–93% of the aggregate number of 

Form 3 subscribers receiving retransmitted 

commercial signals in any given year during 2000– 

2003, and 94–96% of the distant cable 

retransmission fees generated by commercial 

stations in any given year during 2000–2003. Galaz 

WDT at 17; see Galaz WDT at Ex. IPG–5; 6/5/13 Tr. 

at 765, 788 (Galaz). 

57 IPG contended that it was reasonable to use 

1997 data for this purpose because Nielsen Media 

Research publications indicate that there have been 

only trace changes in U.S. daypart viewing, even 

over the span of decades. Galaz WDT at 21–22; 

6/5/13 Tr. at 775–77 (Galaz). IPG’s calculations 

originally were based on six dayparts, rather than 

48. When this issue was brought to IPG’s attention, 

IPG produced revised calculations based on the 48 

dayparts described in Mr. Galaz’ written testimony. 

See Galaz WRT at Exs. R–19 (revised) and R–20 

(revised). In live testimony, Mr. Galaz stated that 

the error was inadvertent. 6/5/13 Tr. at 774 (Galaz). 

many programs on Canadian stations 

that fall in the Program Suppliers 

category than there are on U.S. stations, 

Canadian stations carried roughly 2.7% 

of retransmitted programs in the 

Program Suppliers category. It thus 

appears that a small, but not negligible, 

number of programs in this category are 

carried on Canadian stations. 

For the exclusion of the relatively 

small percentage of programs broadcast 

on Canadian stations to have a material 

impact on the relative shares computed 

by MPAA, the proportion of MPAArepresented programs to IPGrepresented programs on Canadian 

stations would have to differ fairly 

significantly from that on U.S. stations. 

There is no evidence to suggest that it 

does.54 The Judges conclude that, while 

the exclusion of the Canadian stations 

was an error, it did not have a 

significant effect on the relative shares 

computed by MPAA. 

b. Description of the IPG Methodology 

and Proposed Allocation 

IPG’s distribution methodology (the 

IPG Methodology) was created by Mr. 

Raul Galaz, an employee and former 

principal of IPG. Mr. Galaz testified that 

the IPG Methodology was formed in 

response to a perceived bias in the 

distribution methodology historically 

utilized by MPAA. Galaz WDT at 7–8. 

IPG espouses that each and every 

program that is broadcast by a terrestrial 

station, and is thereafter retransmitted 

by a CSO pursuant to the Section 111 

statutory license, is entitled some 

portion of the fees deposited with the 

U.S. Copyright Office. Id. at 14. 

Upon the commencement of this 

Phase II proceeding, IPG obtained 

updated data from CDC of all Form 3 

retransmitted stations from 2000–2003, 

which data included the number of 

households to which any particular 

terrestrial signal was retransmitted, as 

well as the fees generated from the 

retransmission of any particular 

terrestrial signal. IPG ranked such 

stations on a year-by-year basis, 

according to the cable retransmission 

fees generated by such stations. Id., at 

16; 6/5/13 Tr. at 762 (Galaz). 

IPG thereafter acquired from Tribune 

Media the programming data for the 200 

broadcast stations (IPG Sample) 

generating the largest amount of cable 

retransmission fees, and supplemented 

such information with broadcast data 

already acquired by IPG for calendar 

years 2000 and 2001.55 Galaz WDT at 

16; see Galaz WDT at Ex. IPG–4; 6/5/13 

Tr. at 762, 790 (Galaz).56 The IPG 

Sample was not (and was not intended 

to be) a random sample. 6/5/13 Tr. at 

765–66, 808–09 (Galaz). From this 

programming data IPG identified 

11,213,962 individual broadcasts that 

took place on the IPG Sample stations 

which, after omitting non-compensable 

programming (e.g., network feed 

programming), yielded 8,515,052 

compensable broadcasts representing 

39,969 discrete titles. Galaz WDT at 17. 

According to Mr. Galaz, IPG then 

undertook to confirm with all of the 

claimants that it represents exactly 

which titles and broadcasts were owned 

or controlled by them. IPG submitted to 

each claimant the list of compensable 

titles, and requested that the claimant 

respond to IPG with a list of any titles 

on the list that correspond to titles 

owned or controlled by the claimant. In 

some circumstances IPG determined 

which titles and broadcasts were owned 

or controlled based on information 

within the IPG contracting documents, 

or information previously provided to 

IPG in the course of IPG’s 

representation. Galaz WDT at 18; 6/5/13 

Tr. at 791–93 (Galaz). Based on that 

vetting process, IPG determined that 

1,297 compensable programs were 

owned or controlled by IPG-represented 

claimants, reflected within 541,586 

compensable broadcasts. Galaz WDT at 

10; see Galaz WDT at Exs. IPG–2, 3. 

The weight that IPG accorded to any 

given compensable broadcast was the 

product of (x) a ‘‘Station Weight 

Factor,’’ (y) a ‘‘Time Period Weight 

Factor,’’ and (z) the duration of the 

broadcast. Galaz WDT at 18–23. 

IPG took two alternative approaches 

to creating a Station Weight Factor. One 

assigned a value to a station based on 

the number of distant cable subscribers 

that received retransmissions of that 

station’s broadcasts. The other assigned 

a value to a station based on the amount 

of distant cable retransmission fees 

generated by the station, as disclosed in 

CDC data. IPG presented three 

alternative computations based on each 

of the Station Weight Factors and an 

average of the two. Galaz WDT at 18; see 

Galaz WDT at Ex. IPG–4; Galaz WRT at 

Exs. R–19 and R–20; 6/5/13 Tr. at 769, 

768, 779–81 (Galaz). 

The Time Period Weight Factor 

reflects the fact that average television 

viewership varies by time of day. IPG 

based the Time Period Weight Factor on 

Nielsen Media Research’s assessment of 

distant viewership of all persons during 

48 half-hour dayparts that was, in turn, 

based on Nielsen viewing data from 

1997.57

Mr. Galaz testified that the IPG 

Methodology seeks to replicate the 

decisions actually made by CSOs by 

looking at data representative of such 

decisions, and data reflecting the 

aggregate of information that a CSO 

could have had at the time of its 

decision to retransmit a broadcast 

station. 6/5/13 Tr. at 761, 763, 768 

(Galaz). He explained that it was for this 

reason that IPG used its Time Period 

Weight Factor in preference to 

projections of actual viewership. IPG 

avers that actual viewership can only be 

known after a broadcast has taken place; 

prior to a CSO’s decision to retransmit 

a particular broadcast, the CSO may 

only reasonably predict on a day-by-day 

basis the relative viewership of a 

program based on the timing of its 

placement on a station’s lineup. Galaz 

WDT at 20–22; 6/5/13 Tr. at 770–75 

(Galaz). 

As a final step, the broadcast length 

of all compensable broadcasts appearing 

in the IPG analysis was applied against 

the ‘‘Station Weight Factor(s)’’ and the 

‘‘Time Period Weight Factor’’ to create 

a weighted value for each of the 

broadcasts. After segregating the 

compensable broadcasts into their 

respective Phase I categories, including 

the Program Suppliers category, IPG 

summed the resulting weighted values 

for (i) all IPG-claimed broadcasts, and 

(ii) all MPAA-claimed broadcasts. Galaz 

WDT at 24; Galaz WRT at Exs. R–19 

(revised) and R–20 (revised); 6/5/13 Tr. 

at 778 (Galaz). By comparing these 


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‘‘Sum Weighted Values’’ for IPG and 

MPAA, IPG calculated its proposed 

relative distribution shares. 

Using a Station Weight Factor based 

on numbers of distant subscribers, IPG 

computed the following proposed 

relative distribution shares. 

IPG PROPOSED DISTRIBUTION SHARES

[SWF—Subs] 

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

MPAA ............................................................................................................... 90.52 92.77 94.54 94.95 

IPG ................................................................................................................... 9.48 7.23 5.46 5.05 

Galaz WRT, Ex. R–19, at 1 (revised). 

Using a Station Weight Factor based 

on fees generated, IPG computed the 

following proposed relative distribution 

shares. 

IPG PROPOSED DISTRIBUTION SHARES

[SWF—Fees] 

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

MPAA ............................................................................................................... 90.60 92.57 94.56 94.86 

IPG ................................................................................................................... 9.40 7.43 5.44 5.14 

Id. 

Using an average of the shares 

produced by the previous two methods, 

IPG computed the following proposed 

relative distribution shares. 

IPG PROPOSED DISTRIBUTION SHARES

[SWF—Subs and fees] 

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

MPAA ............................................................................................................... 90.56 92.67 94.55 94.91 

IPG ................................................................................................................... 9.44 7.33 5.45 5.09 

Id. 

(1) Evaluation of the IPG Methodology 

IPG, through the written testimony of 

its sole direct witness, Mr. Galaz, did 

not definitively state that its 

methodology was an application of 

‘‘relative market value.’’ Galaz WDT at 

11. At the hearing, on crossexamination, Mr. Galaz initially 

declined to state that the IPG 

Methodology was consonant with any 

‘‘economic principle.’’ Under further 

cross-examination, Mr. Galaz testified 

that he thought that the IPG 

Methodology fits under the ‘‘relative 

market value’’ standard. 6/5/13 Tr. at 

942–47. 

The IPG Methodology for distributing 

royalties in this Phase II proceeding 

eschews explicit reliance upon 

viewership levels. Rather, IPG asserts 

that ‘‘certain obvious factors that would 

otherwise affect a negotiated license 

between a producer and an exhibitor are 

not present in the compulsory licensing 

scheme * * * .’’ Galaz WDT at 12. The 

Judges understand IPG’s position in this 

regard to be premised on the assertion 

that the hypothetical CSO is interested 

in maximizing subscriber fees (i.e., 

profits, assuming constant costs) or 

subscriber levels (i.e., market share), 

rather than viewership. 

IPG is not incorrect in its assertion of 

the different ‘‘factors’’ (i.e., incentives) 

that apply to a CSO, as opposed to an 

‘‘exhibitor’’ (i.e., a broadcast station) in 

this retransmission context. The Judges 

conclude, however, that the substance 

of IPG’s direct case suffers from three 

major defects: 

First, the maximization of subscriber 

revenues or levels is not divorced from 

viewership levels. Rather, a CSO would 

attract subscribers on a distantly 

retransmitted station only to the extent 

that the programs it offered were 

demanded by consumers who intended 

to view the programs. Indeed, even IPG’s 

expert witness, Dr. Robinson, 

acknowledged that, in her professional 

experience, viewership was a factor in 

determining the value of a retransmitted 

television program. 6/6/13 Tr. at 1219– 

21 (Robinson). 

Second, it is true, as IPG asserts, that 

since a CSO is concerned about which 

programs the marginal subscriber might 

prefer, a CSO may prefer a program with 

a smaller level of viewership if that 

viewership represents new subscribers, 

instead of a show with a large audience 

that consists only of existing 

subscribers. IPG has not, however, 

proffered any evidence applying such a 

marginal analysis in the present 

proceeding. Dr. Robinson testified that 

such an analysis would require a ‘‘more 

sophisticated model,’’ incorporating 

perhaps ‘‘game theoretic’’ principles to 

demonstrate how a CSO would 

maximize subscribership through such a 

marginal viewer analysis. 6/6/13 Tr. at 

1230 (Robinson). Likewise, Dr. Gray 

testified that such an approach would 

require a ‘‘more sophisticated’’ analysis 

than the parties’ evidence permitted in 

this proceeding. 6/4/13 Tr. at 547 

(Gray). 


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58 It is noteworthy that IPG engaged Dr. Robinson 

to critique the MPAA methodology and Dr. Gray’s 

analysis, but, as Dr. Robinson testified, she was not 

asked to defend the IPG Methodology created by 

Mr. Galaz. 6/6/13 Tr. at 1226 (Robinson). 

59Mr. Galaz asserted that compensating each and 

every copyright owner affected by the Section 111 

statutory license was a constitutional imperative. 

Galaz WDT at 14; IPG PFF at 12. Counsel for IPG 

echoed this ‘‘takings’’ argument in his closing 

statement. 6/6/13 Tr. at 1454–55. IPG did not brief 

or argue this issue, so it is not before the Judges for 

decision. Nevertheless, the Judges note that, on its 

face, this argument proves too much. In addition to 

statutory licenses, the Copyright Act includes a 

number of outright exceptions (e.g., fair use under 

Section 107) where a copyright owner’s exclusive 

rights are limited without any compensation 

whatsoever. IPG’s Fifth Amendment takings 

argument would, absurdly, render these exceptions 

unconstitutional. 

Third, the IPG Methodology does not 

follow from the foregoing critique. 

Rather, the IPG Methodology uses 

factors that tend to treat as similar 

programs that are distantly 

retransmitted at the same time of day, 

run for the same number of minutes per 

program or that appear on the same 

station. Thus, the IPG Methodology 

considers neither the initial necessity of 

considering absolute viewership nor the 

subsequent necessity of considering the 

iterative process (‘‘perhaps a ‘‘game 

theoretic’’ approach, as Dr. Robinson 

testified). Simply put, aside from any 

other defects in the IPG Methodology, it 

is not true to its own critique of a 

viewership-based analysis. 

(2) The Testimony of Mr. Galaz 

IPG’s direct case also suffers from the 

fact that it was presented by a particular 

single witness, Mr. Galaz. For the 

following reasons, Mr. Galaz, to say the 

least, was an imperfect messenger to 

convey the IPG Methodology. 

First, the Judges note that Mr. Galaz 

was previously convicted and 

incarcerated for fraud in the context of 

copyright royalty proceedings—a fraud 

that caused financial injury to MPAA. 

6/5/13 Tr. at 932 (Galaz). In connection 

with that fraud, Mr. Galaz also 

admittedly lied in a cable distribution 

proceeding much like the instant 

proceeding. Id. Mr. Galaz’s fraud 

conviction and prior false testimony 

compromises his credibility, especially 

in this proceeding. 

Second, Mr. Galaz, the founder and 

previously an owner of IPG, is now an 

employee of IPG. Galaz WDT at 7. IPG 

is currently owned by his mother and 

sister. 6/5/13 Tr. at 1079 (Galaz). Thus, 

he clearly has a self-interest which 

renders the IPG Methodology—of which 

he is the architect—less credible than a 

methodology created by an outside 

expert.58

Third, Mr. Galaz acknowledged that 

he is not an economist, statistician, or 

econometrician, and that he had no 

particular expertise that would permit 

him to opine as an expert on the 

construction of a methodology to 

establish ‘‘relative market value’’ in this 

distribution proceeding. 6/5/13 Tr. at 

928–30. The Judges gave serious 

consideration to granting the motion in 

limine filed by MPAA and the SDC at 

the start of the hearing to bar Mr. Galaz’s 

testimony on the basis that he was 

offering expert opinion but was not 

qualified as an expert witness. For the 

reasons stated on the record, however, 

the Judges denied the in limine motion 

and decided to permit Mr. Galaz to 

testify and accord his testimony 

whatever weight it warranted. 6/3/13 Tr. 

at 58–64. Nothing in Mr. Galaz’s 

testimony indicates that the Judges 

should give his testimony any weight, 

except to the limited extent certain 

general principles he utilized in his IPG 

Methodology provide a basis to modify 

marginally the distribution allocations 

arising from the MPAA Methodology. 

Fourth, Mr. Galaz did not indicate 

that he had any experience working for 

or on behalf of a CSO, and he admitted 

that he had not discussed the IPG 

Methodology with any CSO. 6/5/13 Tr. 

at 970–72. Thus, his suppositions as to 

how a CSO might construe viewership 

lack foundational support. Moreover, 

since Mr. Galaz is not an economist, he 

cannot apply microeconomic theory in 

order to opine upon the economic 

incentives to which a hypothetical CSO 

might respond when acquiring a bundle 

of licenses from owners of program 

rights. 

(3) Additional Problems With the IPG 

Methodology 

In addition to the foregoing 

overarching and substantial defects in 

IPG’s direct case, particular elements of 

the IPG Methodology are also deficient. 

First, IPG contends that the purpose 

of the IPG Methodology is to 

compensate every claimant, even if 

there is no evidence that there was any 

viewership of the claimant’s program.59

The Judges find such a methodology 

unacceptable. Even if viewership as a 

metric for determining royalties may be 

subject to some adjustment in light of 

the economic incentives facing a CSO, 

there is certainly no basis to allow for 

compensation in the absence of any 

evidence of viewership. See 6/5/13 Tr. 

at 950 (Galaz). 

Second, IPG’s ‘‘sample’’ of stations 

was not selected in a statistically 

random manner. Id. at 957 (Galaz). 

Thus, it suffers from the same infirmity 

as the Kessler Sample relied upon in 

part by MPAA. However, unlike MPAA, 

IPG made no effort to mitigate the 

problems with its non-random sample. 

Indeed, at the hearing, Mr. Galaz 

attempted to disavow that his list of 

stations was a sample, and instead redefined his station selections as a 

‘‘survey.’’ Id. at 959 (Galaz). 

Third, the IPG Methodology, with its 

reliance on the so-called ‘‘Station 

Weight Factor,’’ grossly ignores 

viewership, resulting in a much higher 

relative market value for relatively lowrated programs. The following two pairs 

of examples from Dr. Gray’s Written 

Rebuttal Testimony, unrebutted by Mr. 

Galaz at the hearing, show how the IPG 

Methodology calculates the relative 

value of two programs as identical, 

merely because they aired at the same 

time of day, even though the MPAAclaimant programs (‘‘Judge Joe Brown’’ 

and ‘‘Poke ́mon’’) had substantially 

higher viewership levels than the IPGclaimant programs (‘‘Animal 

Adventures’’ and ‘‘Dragon Ball Z’’) 

which aired in the same time period: 

TABLE 2—EXAMPLES SHOWING THAT FACTORS OTHER THAN STATION, TIME OF DAY, AND PROGRAM TYPE IMPACT

DISTANT VIEWING OF A PROGRAM * 

Date/time Station Program Program type Entity 

claiming 

Nielsen 

viewing 

households 

Gray 

viewing 

households 

IPG 

estimated 

relative 

value 

7/8/2000: 

16:30 ................... KRON ...... Animal Adventures ..... FIRST-RUN SYNDICATION.IPG .......... 740 952 2,358,915 

5/21/2000: 


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60Mr. Galaz asserted that information published 

by Nielsen supported his use of 1997 data. See 

supra note 57. Mr. Galaz lacks the requisite 

expertise on which to base that conclusion, 

however. 

TABLE 2—EXAMPLES SHOWING THAT FACTORS OTHER THAN STATION, TIME OF DAY, AND PROGRAM TYPE IMPACT

DISTANT VIEWING OF A PROGRAM *—Continued 

Date/time Station Program Program type Entity 

claiming 

Nielsen 

viewing 

households 

Gray 

viewing 

households 

IPG 

estimated 

relative 

value 

16:30 ................... KRON ...... Judge Joe Brown ....... FIRST-RUN SYNDICATION.MPAA ...... 1,840 1,635 2,358,915 

7/30/2001: 

16:30 ................... WPIX ....... Dragon Ball Z ............. CARTOON ................. IPG .......... 2,898 5,586 63,748,728 

2/5/2001: 

16:30 ................... WPIX ....... Poke ́mon .................... CARTOON ................. MPAA ...... 10,888 8,228 63,748,728 

Notes: ‘‘Gray Viewing Households’’ refers to predicted household distant viewing based on the econometric estimation procedure described in 

my Direct Testimony. IPG Estimated Relative Value is based on Mr. Galaz’s SWF Subs measure. Programs in the two sets of examples also 

have identical IPG Estimated Relative Value based on Mr. Galaz’s SWF Fees measure. Nielsen Viewing Households represents the number of 

households viewing the program distantly as reported in the Nielsen Diary Data and averaged over the quarter hour increments that constitute 

the full program time. 

Gray WRT at 8. 

Fourth, the IPG Methodology, with its 

additional reliance on the so-called 

‘‘Time Period Weight Factor,’’ ascribes 

equal relative value to MPAA-claimed 

programs and IPG-claimed programs 

that aired on the same station and for 

the same duration, despite substantially 

different levels of viewership. The 

following comparison of programs that 

aired on WGN in 2001 demonstrates this 

outcome. 

TABLE 4—EXAMPLE OF MY [DR. GRAY’S] AND MR. GALAZ’S ESTIMATED RELATIVE VIEWING OF RETRANSMITTED WGN 

BROADCASTS

Date/time Program Entity 

claiming 

Nielsen 

viewing 

households 

Gray 

viewing 

households 

lPG’s TPWF IPG relative 

value 

5/12/2001: 

17:00 ..................................... Andromeda .................................. MPAA ...... 117,501 102,065 0.612244 1,220,182,908 

2/3/2001: 

10:00 ..................................... Video Computer Store ................ IPG .......... 6,754 12,325 0.612244 1,220,182,908 

5/6/2001: 

17:00 ..................................... Coach .......................................... MPAA ...... 117,088 143,757 0.612244 610,091,454 

7/14/2001: 

9:30 ....................................... As Seen on TV PC ..................... IPG .......... 10,282 14,322 0.612244 610,091,454

Notes: ‘‘Gray Viewing Households’’ refers to predicted household distant viewing based on the econometric estimation procedure described in 

my Direct Testimony. IPG Estimated Relative Value is based on Mr. Galaz’s SWF Subs measure. Programs in the two sets of examples also 

have identical IPG Estimated Relative Value based on Mr. Galaz’s SWF Fees measure. Nielsen Viewing Households represents the number of 

households distant viewing the program as reported in the Nielsen Diary Data and averaged over the quarter hour increments that constitute the 

full program time. 

Id. at 22. 

Fifth, compounding the problems 

with the IPG Methodology, Mr. Galaz 

utilized 1997 data to estimate the level 

of viewing throughout the broadcast 

day, rather than data that was 

contemporaneous with the 2000 through 

2003 royalty distribution period at issue 

in this proceeding.60 6/5/13 Tr. at 973 

(Galaz). 

Sixth, Mr. Galaz claimed originally to 

have utilized half-hour viewing 

segments to create his Time Period 

Weight Factor. However, as Dr. Gray 

explained in his Written Rebuttal 

Testimony, Mr. Galaz in fact did not 

utilize half-hour viewing segments in 

his analysis, but rather utilized the six 

‘‘daypart’’ categories upon which IPG 

had relied in the 1993–1997 Phase II 

proceeding, which reliance was 

criticized by the CARP convened for 

that prior proceeding. Gray WRT at 

20–21. Mr. Galaz acknowledged this 

problem, described it as a good faith 

error, and changed his calculations by 

substituting the half-hour viewing 

segments for his ‘‘daypart’’ categories in 

his application of the Time Period 

Weight Factor. Compare Galaz WRT at 

Exs. R–19 and R–20 (original) with 

Galaz WRT at Exs. R–19 and R–20 

(revised). 

What is particularly noteworthy about 

this issue is the extent to which the use 

by Mr. Galaz of the ‘‘daypart’’ 

categories, as compared to his claimed 

use of the half-hour segments, inured to 

IPG’s benefit. As Mr. Galaz testified, 

6/6/13 Tr. at 1155–56 (Galaz), his use of 

the ‘‘daypart’’ categories significantly 

inflated IPG’s claimed percentage of the 

Program Suppliers category in each of 

the years at issue as follows. 

For 2000, IPG’s claimed percentage was 

inflated by 23%, i.e., from 9.47% if Mr. Galaz 

had correctly used half-hour segments, to 

11.62% when he instead utilized ‘‘daypart’’ 

categories. 

For 2001, IPG’s claimed percentage was 

inflated by 32%, i.e., from 7.33% if Mr. Galaz 

had correctly used half-hour segments, to 

9.71% when he instead utilized ‘‘daypart’’ 

categories. 

For 2002, IPG’s claimed percentage was 

inflated by 27%, i.e., from 5.45% if Mr. Galaz 

had correctly utilized half-hour segments, to 

6.9% when he instead utilized ‘‘daypart’’ 

categories. 

For 2003, IPG’s claimed percentage was 

inflated by 21%, i.e., from 5.09% if Mr. Galaz 

had correctly utilized half-hour segments, to 

6.33% when he instead utilized ‘‘daypart’’ 

categories. 

Id. 

Given the serious issues of credibility 

regarding Mr. Galaz’s testimony, as 

discussed supra, the Judges cannot state 


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61At the hearing, the Judges offered the fanciful 

example that an instructional show with low 

viewership might be more valuable to a CSO, on the 

margin, than reruns of ‘‘Bewitched’’ with higher 

viewership, if the ‘‘Bewitched’’ viewers were 

merely redundant of, or displacing, viewers of 

another similar show, e.g., ‘‘I Dream of Jeannie,’’ 

which was already part of that CSO’s offering. 

6/4/13 Tr. at 551–53. 

62There is a wealth of economic literature 

analyzing the economics of bundling, i.e., the 

impact of the offering for joint sale or purchase two 

or more products or services. See generally B. 

Kobayashi, Does Economics Provide a Reliable 

Guide to Regulating Commodity Bundling by Firms? 

A Survey on the Economic Literature on Bundling, 

1 J. of Competition L. & Econ. 707 (Dec. 2005). For 

example, bundling is utilized by sellers who 

possess market power as a means of ‘‘price 

discrimination,’’ by tying two products with 

different elasticities of demand together in order to 

convert the ‘‘consumer surplus’’ which would exist 

in the absence of a tying or bundling, into higher 

profits for the seller. See G. Stigler, U.S. v. Loew’s 

Inc.: A Note on Block Booking, 1963 Sup. Ct. Rev. 

152 (1964). Thus, a rational bundling CSO with 

market power would not simply seek to acquire a 

copyright license to a program that, in isolation, 

would add more subscriber fees, but rather would 

determine which combination of programs 

extracted the most profits, based upon the relative 

inelasticity of demand for popular shows. To cite 

another issue created by bundling, the program 

owner (with monopolistic power over its own 

relatively more valuable program) might hold out 

for a license royalty that appropriated for itself the 

profits from bundling, thus frustrating the CSO’s 

attempt to price discriminate by assembling a roster 

of shows which would create the profit-maximizing 

bundle. This is a variant of the classic and 

indeterminate problem of price-setting between a 

monopolist and a monopsonist, as to which the 

game theoretic principles referred to by Dr. 

Robinson would be applicable. These are the types 

of issues which the IPG Methodology simply does 

not address. 

with any confidence that these rather 

significant errors—all of which would 

have substantially inflated IPG’s 

allocation and were left uncorrected 

until they were disclosed in Dr. Gray’s 

Written Rebuttal Testimony—were not 

the product of design rather than 

inadvertence. 

Seventh, the IPG Methodology, 

although intended to eschew viewership 

as a primary measure, nonetheless is 

based implicitly upon viewership, as it 

considers the duration of a program as 

an indicia of value (a program of 

relatively longer duration would be 

more valuable because of its viewership 

over a longer period), as well as the time 

of day a program is aired (there are more 

viewers at some times of day than 

others). 

(4) Limited Applicability of the IPG 

Methodology 

Although the Judges reject the 

wholesale application of the IPG 

Methodology in this Determination, 

they do note that the IPG Methodology 

attempts to address certain issues of 

value which are worthy of consideration 

when the Judges determine the extent, 

if any, to adjust an allocation based 

upon the MPAA viewership-based 

methodology. 

First, Dr. Gray acknowledged that the 

IPG Methodology was an 

‘‘approximation’’ of Dr. Gray’s own 

methodology, albeit a ‘‘crude 

approximation.’’ Gray WRT at 4 

(emphasis added). 

Second, as noted supra, Dr. Gray 

acknowledged that even his own 

regression analysis showed a strong 

correlation between the time of day 

when a program aired and the level of 

viewership of the distantly 

retransmitted programs. This correlation 

generally affirms that IPG’s Time Period 

Weight Factor is not irrational, even 

though IPG’s emphasis on that factor, 

and its failure to acknowledge the much 

greater importance of per-program 

viewership, is unreasonable. 

Third, IPG’s argument that lowerrated shows might enhance subscriber 

fees or levels more than higher-rated 

shows is a logical economic concept. In 

that regard, the Judges understand IPG’s 

theory to be an application of the 

bundling problem in economics, an 

application that can be summarized as 

follows. 

—A CSO does not make decisions based 

upon maximizing viewership, but 

rather upon maximizing subscriber 

revenues (assuming costs are 

constant) or by maximizing subscriber 

volume (if maximizing market share is 

more important than maximizing 

profits at any given point in time). 

—A CSO maximizes subscriber revenue 

or volume by creating a mix of 

program types (even within a given 

Phase I category). 

—The CSO’s maximizing mix of 

program types is not (merely) a 

function of total viewership. 

—Rather, the CSO will bundle different 

programs in order to obtain additional 

new (i.e., marginal) subscribers. 

—These new subscribers may be 

attracted to programs at viewership 

levels that are lower than the 

viewership levels of other shows 

available for licensing, but the latter 

shows may simply have more of the 

same viewers who have already 

subscribed based upon the other 

shows in the CSO lineup.61

—Therefore, assessing the relative 

market value of retransmitted 

programs on the basis of relative 

viewership alone is an imperfect 

measurement because viewership 

does not explicitly account for the 

CSO’s incentive to bundle programs 

in a manner designed to maximize 

subscriber fees (profits) or levels 

(market share). 

When bundling is considered, the 

economic analysis shifts from the 

relatively straightforward profit 

maximization analysis advanced by 

MPAA (using viewership as a measure 

of value) to a more nuanced valuation 

assessment. In essence, the hypothetical 

CSO whose buying decisions we must 

consider would create an ersatz station 

by bundling programs in a combination 

that would maximize its expected 

revenues or volumes (with all other 

costs assumed constant). As previously 

explained, an attempt to maximize 

profits would result in the purchase of 

program licenses at a fee (the marginal 

cost of the program input) up to the 

anticipated MRP from that program in a 

competitive market. 

So stated, IPG’s argument is rational 

in theory. However, as both Dr. Gray 

and Dr. Robinson testified, such a 

concept would require a much more 

detailed economic and game theoretic 

model of CSO programming than was 

presented by IPG in this proceeding.62

Further, such an argument would 

require evidence and testimony from 

someone with actual knowledge of CSO 

programming decisions and strategies 

pertaining to the bundling of programs. 

See supra note 28. In these two regards, 

(an undeveloped theory and the absence 

of factual support) the Judges cannot 

adopt the IPG Methodology. 

(5) Conclusion Regarding the IPG 

Methodology 

For the foregoing reasons, the Judges 

conclude that the IPG Methodology 

cannot be applied to establish the basis 

for an allocation of the royalties in the 

Program Suppliers category. However, 

given the few generally correct 

principles, noted above, within the IPG 

Methodology, and given certain 

imperfections in the MPAA 

Methodology, the Judges conclude that 

the allocations otherwise established by 

a strict application of the MPAA 

Methodology should be adjusted 

downward marginally. 

c. Allocations Within the Program 

Suppliers Category 

The Judges conclude that the MPAA 

Methodology should be accorded 

substantial weight in establishing the 

zone of reasonableness for the 

allocations in the Program Suppliers 

category. By contrast, in light of the 

Judges’ conclusion that the IPG 

Methodology is seriously deficient, the 

IPG methodology cannot be used in 

establishing the parameters of the zone 

of reasonableness for the allocation of 

royalties in the Program Suppliers 

category. 


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63As in the Program Suppliers category, IPG 

computes three alternative Station Weight Factors: 

A pure subscriber-level factor, a pure fee-based 

factor and an average of the two. 

64 IPG also asks the Judges to order the SDC to 

reimburse IPG for costs it incurred to develop data 

also relied upon by the SDC. IPG PFF (Devotional) 

at 22. However, IPG did not file a motion seeking 

such reimbursement, and the Judges are not aware 

of any statutory or regulatory authority pursuant to 

which such costs can be shifted in this proceeding. 

65The Judges excluded Exhibit 3 to Mr. Little’s 

testimony for reasons discussed supra. See text 

accompanying note 14. 66 Dr. Brown also proposed that the Nielsen data 

be ‘‘supplemented, where applicable, with Bortz 

[Survey] study data.’’ Brown WDT at 5. However, 

in his Amended Written Rebuttal Testimony, Dr. 

Brown testified: ‘‘I conclude that the Bortz survey 

data cannot be used to supplement the MPAA/

Nielsen viewing data to determine the comparative 

value of programs within the single genre of 

devotional programming.’’ Brown WRT (Amended) 

at 16. 

The Judges conclude that the ‘‘zone of 

reasonableness’’ in the Program 

Suppliers category in this proceeding 

corresponds with the range established 

by the 95% confidence interval that Dr. 

Gray computed for MPAA’s proposed 

distribution allocation. See supra note 

45; Gray WRT at 26 n.25. In light of the 

noted defects in the MPAA 

Methodology, and given the few 

generally correct principles identified 

by IPG as noted above, the Judges 

conclude that the distribution levels 

should be set at the lower bound 

(‘‘lower’’ in terms of percent of 

distributions awarded to MPAA) of Dr. 

Gray’s confidence interval (and, 

therefore, the lower bound of the ‘‘zone 

of reasonableness’’). 

Accordingly, the Judges establish the 

following annual distribution levels, 

finding them to be within the zone of 

reasonableness: 

ALLOCATION IN THE PROGRAM SUPPLIERS CATEGORY

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

MPAA ............................................................................................................... 98.84 99.69 99.64 99.77 

IPG ................................................................................................................... 1.16 0.31 0.36 0.23 

2. Devotional Category 

a. The IPG Methodology 

IPG proposes the identical formula for 

the Devotional allocations as it 

proposed for the Program Suppliers 

category. Specifically, IPG applies a 

methodology that considers: (1) The 

station(s) on which a devotional 

program appeared, thereby providing 

the number of subscribers receiving the 

distantly retransmitted station and the 

fees paid by those subscribers (the 

Station Weight Factor); (2) the time of 

day during which each devotional 

program was broadcast (the Time Period 

Weight Factor); and (3) the length of 

each devotional program. These factors 

are then multiplied and aggregated for 

IPG and MPAA programs. IPG then uses 

those aggregate program values to 

determine the relative value as between 

the IPG-claimed Devotional Programs 

and the SDC-claimed Devotional 

Programs.63

IPG’s formula produced absurd results 

in the Devotional category, as it did in 

the Program Suppliers category. The 

Judges note Dr. Brown’s Amended 

Written Rebuttal Testimony, in which 

he explained how, for example, in the 

Devotional category, application of the 

IPG Methodology bizarrely: (1) Would 

cause a program with 167% of a 

competing program’s national rating to 

receive less than 30% of the value 

assigned to that competing program; and 

(2) would allow programs comprising 

0.119% of the entire Devotional 

category to receive more than 18% of all 

Devotional category revenue simply 

because that 0.119% of the programs 

were broadcast on WGNA, which was 

retransmitted to a disproportionately 

high number of subscribers. Brown 

WRT (Amended) at 10–13. 

More generally, in the discussion 

regarding the Program Suppliers 

distributions, the Judges have explained 

in detail the deficiencies in the IPG 

Methodology, and the few positive 

attributes arising from—to use Dr. 

Gray’s language—the ‘‘crude 

approximation’’ of relative market value 

created by the IPG Methodology. The 

Judges adopt in this Devotional category 

analysis those prior statements 

regarding the attributes of the IPG 

Methodology.64

b. The (Proffered) SDC Methodology 

The SDC explicitly requests that, in 

the Devotional category, the Judges 

adopt the MPAA Methodology to 

establish relative market value. Indeed, 

the SDC claims to have relied upon, 

inter alia, the non-random Kessler 

Sample of stations, as well as the 

Nielsen Diary Data originally provided 

to MPAA and about which Mr. 

Lindstrom testified. As discussed below, 

the Judges have declined to rely on the 

results of the application of the SDC 

Methodology because the SDC offered 

evidence of the application of its 

methodology in an untimely manner, in 

contravention of the Judges’ procedural 

rules. Therefore, the Judges cannot use 

the SDC Methodology to determine the 

allocation of the Phase II share of 

royalties in the Devotional category. 

The SDC’s direct case consisted of the 

written and oral testimony of Dr. 

William Brown and the written 

testimony of Mr. Michael Little, which 

was admitted pursuant to stipulation of 

the SDC and IPG. Stipulation Regarding 

Testimony of Michael D. Little (May 31, 

2013).65 Mr. Little’s testimony describes 

the diversity of the SDC programming. 

Little WDT at 1–4. He identifies 23 SDCrepresented claimants and their 

respective programs during the years 

2000–2003. See Little WDT at Ex. 2. 

The heart of the SDC’s case rests on 

Dr. Brown’s testimony. Dr. Brown, a 

Professor and Research Fellow at the 

School of Communication and the Arts 

at Regent University in Virginia Beach, 

Virginia, served as the SDC’s expert 

witness in the field of communication 

theory and research. See 6/6/13 Tr. at 

1371 (Brown). In his direct testimony, 

Dr. Brown asserted that ratings are a 

‘‘valuable tool’’ in determining Phase II 

allocations. Brown WDT at 4. He 

described how 

Nielsen compiled data on an overnight 

basis using a scientific sample of several 

thousand households electronically metered 

to monitor TV viewing, and during sweeps 

periods (pre-selected, 4-week cycles) using 

tens of thousands of diaries of households 

that keep records of TV viewing activities. 

Id. Consequently, Dr. Brown opined, 

that ‘‘[t]he most useful quantifiable data 

is Nielsen viewing data, projected to 

distant households.’’ 66 Id. at 5. 

At no time during the direct phase of 

its case did the SDC offer any testimony, 

written or oral, specifically setting forth 

the application of the MPAA 

methodology to Devotional 

Programming. Rather, the SDC 

attempted to introduce such evidence 

during the rebuttal phase of its case by 

proffering the written and oral 

testimony of Mr. Alan G. Whitt, the 


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67One important difference, though, was that the 

MPAA did not rely on the non-random Kessler 

Sample of stations and took steps to mitigate its impact; the SDC simply utilized the Kessler 

Sample. 

founder and principal of IT Processing, 

Inc. The purpose of Mr. Whitt’s 

testimony was to provide the underlying 

data upon which Dr. Brown would rely 

to form his opinion as to the proper 

distribution of royalties for the 

Devotional category for the years 2000 

through 2003. Specifically, Mr. Whitt 

gathered: (1) The Kessler non-random 

sample of stations; (2) the Nielsen data 

prepared on behalf of MPAA; (3) the 

Tribune Media Services database of 

programs that aired during the relevant 

calendar years; and (4) the MPAA 

‘‘Reports of Household Viewing Hours 

for the MPAA Copyright Royalty 

Databases’’ for 2000–2003. He then 

identified programs as ‘‘Devotional’’ or, 

synonymously, ‘‘Religious.’’ Whitt WRT 

at 3–8. In his rebuttal testimony, Dr. 

Brown explained how he used Mr. 

Whitt’s work to arrive at the SDC’s 

proper distribution: 

Nielsen’s quarter hour results were * * * 

transmitted to Mr. Whitt * * *. Mr. Whitt 

received the data and, utilizing sophisticated 

software programming and the data from 

Tribune Media Services (TV DATA) of 

programs telecast in 2000–2003, [Mr. Whitt] 

determined the programs to which the 

viewing information was attributed. * * * 

Mr. Whitt organized programming data for 

entities he identified as religious or 

devotional. 

Brown WRT (Amended) at 14–15 

(emphasis added). 

The Judges excluded Mr. Whitt’s 

testimony on the basis that the SDC was 

required by the Judges’ regulations to 

provide Mr. Whitt’s testimony in its 

direct case. See 37 CFR 351.4(b)(1), 

(c)(contents of and amendment of 

Written Direct Statements) and 

§ 351.10(e)(introduction of studies and 

analyses); 6/6/13 Tr. at 1352–53, 1361– 

62 (to the extent Whitt’s testimony 

provided foundation for Dr. Brown’s 

testimony, it ‘‘needed to be included in 

the direct case of SDC.’’). 

By failing to provide Mr. Whitt’s 

testimony until its rebuttal case, a mere 

three weeks before the hearing, the SDC 

prejudiced IPG and, in essence, engaged 

in trial by ambush, in violation of the 

letter and spirit of the Judges’ 

procedural rules. More specifically, by 

not including Mr. Whitt’s testimony in 

its direct case, the SDC deprived IPG of 

the opportunity to review the work 

undertaken by Mr. Whitt. Although Dr. 

Brown, in his Written Direct Testimony, 

indicated that the SDC intended to 

utilize the MPAA Methodology,67 the 

SDC’s application of that methodology 

by Mr. Whitt was not properly disclosed 

in the SDC’s direct case. Consequently, 

the Judges cannot consider the 

application of the SDC Methodology in 

their determination of the Phase II 

distribution to the Devotional category. 

c. Allocations in the Devotional 

Category 

In light of the foregoing, the Judges 

are faced with a Hobson’s Choice. The 

SDC has failed to introduce evidence of 

its distribution methodology in a timely 

manner. IPG has set forth a methodology 

that suffers from a number of flaws and 

which has validity only in certain 

limited respects, as explained above. 

The Judges are, nevertheless, obligated 

to reach a determination based on the 

existing record. Given the evidentiary 

constraints, and in order to allocate the 

royalties in the Devotional category in a 

manner within the ‘‘zone of 

reasonableness,’’ the Judges hereby 

conclude as follows. 

IPG’s proposed allocations, and the 

SDC’s proffered allocations 

(unsubstantiated in the SDC’s direct 

case) are as follows. 

PROPOSED ALLOCATIONS IN THE DEVOTIONAL CATEGORY

Year Party 

SDC proposed 

allocation 

range 

(percent) 

IPG proposed 

allocation 

(percent) 

2000 ............................................................................................................................................... SDC ............. 60.8–74.5 62.86 

IPG ............... 25.5–39.1 37.14 

2001 ............................................................................................................................................... SDC ............. 72.7–77.0 54.88 

IPG ............... 23.0–27.3 45.12 

2002 ............................................................................................................................................... SDC ............. 61.9–67.5 58.98 

IPG ............... 32.5–38.1 41.02 

2003 ............................................................................................................................................... SDC ............. 67.5–70.5 53.32 

IPG ............... 29.5–32.5 46.68 

For the year 2000, the Judges note that 

the IPG proposal falls within the range 

the SDC had proposed. There is, 

therefore, some degree of agreement 

between the parties as to the appropriate 

allocation. Accordingly, the Judges find 

it well within the ‘‘zone of 

reasonableness’’ to allocate 62.86% of 

the royalties in the Devotional category 

to SDC and the remaining 37.14% to 

IPG. 

For the year 2002 (the years 2001 and 

2003 will be considered below), a very 

similar (but not identical) situation 

exists. The IPG proposal is almost equal 

to the lower bound of the results of the 

SDC’s proffered distribution range. 

Given this near equality, the Judges find 

that for the year 2002, again there is 

some degree of agreement between the 

parties as to the allocation of royalties. 

It is well within the ‘‘zone of 

reasonableness’’ to allocate the royalties 

in the Devotional category for the year 

2002 as follows: 58.98% to SDC and 

41.02% to IPG. 

For the years 2001 and 2003, there is 

a marked difference between the 

percentage allocations proposed by IPG 

and the percentage allocations set forth 

in the SDC’s proffered allocations 

(unsubstantiated in the SDC’s direct 

case), and, therefore, little agreement 

between the parties. Given the wide 

divergence between the competing 

methodologies, the Judges cannot 

reconcile the competing proposals in 

the same manner as undertaken for the 

years 2000 and 2002. 

Given that the SDC’s application of its 

methodology was not supported in the 

SDC’s Direct Case, and that the SDC’s 

attempt to provide such support in Mr. 

Whitt’s rebuttal testimony was not 

timely presented and, therefore, 

rejected, that methodology cannot serve 

as any guide-post for the Judges to apply 

(except, as noted above, to the extent 

that the allocations proposed by the 

SDC demonstrate some degree of 

agreement between the parties). 

Moreover, since the SDC Methodology 

cannot be credited, there is no record 

evidence explaining why the percentage 


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Federal Register / Vol. 78, No. 210 / Wednesday, October 30, 2013 / Notices 65005 

allocations for 2001 and 2003 should be 

so markedly different in those years 

compared to 2000 and 2002. 

The IPG Methodology, while in 

evidence, is so flawed that the Judges 

cannot credit the percentage allocations 

as proposed. Indeed, in prior 

determinations, the CRT did not hesitate 

to make a ‘‘downward adjustment’’ to a 

participant’s proposal to reflect 

‘‘perceived deficiencies in the 

methodology.’’ See, e.g., 1979 

Determination, 47 FR at 9892. 

Accordingly, the Judges conclude that 

the percentage allocations for the years 

2001 and 2003 should be set at the 

average of the allocations for the years 

2000 and 2002. Therefore, the 

allocations for each of the years 2001 

and 2003 shall be 60.92% to SDC and 

39.08% to IPG. To summarize, the 

royalty allocations in the Devotional 

category for the years 2000 through 2003 

shall be: 

ALLOCATION IN THE DEVOTIONAL CATEGORY

2000 

(percent) 

2001 

(percent) 

2002 

(percent) 

2003 

(percent) 

SDC ................................................................................................................. 62.86 60.92 58.98 60.92 

IPG ................................................................................................................... 37.14 39.08 41.02 39.08 

V. Conclusion 

This Final Determination determines 

the allocation of cable royalty funds for 

the years 2000, 2001, 2002, and 2003 in 

the Program Suppliers and Devotional 

categories, respectively. The Register of 

Copyrights may review the Judges’ final 

determination for legal error in 

resolving a material issue of substantive 

copyright law. The Librarian shall cause 

the Judges’ final determination, and any 

correction thereto by the Register, to be 

published in the Federal Register no 

later than the conclusion of the 60-day 

review period. 

So ordered. 

Dated: August 13, 2013. 

Suzanne M. Barnett, 

Chief Copyright Royalty Judge. 

Jesse M. Feder, 

Copyright Royalty Judge. 

David R. Strickler, 

Copyright Royalty Judge. 

Dated: August 13, 2013. 

Suzanne M. Barnett, 

Chief Copyright Royalty Judge. 

Approved by: 

James H. Billington, 

Librarian of Congress. 

Appendix A 

The Judges ruled as follows. 

CLAIMS DISMISSED AT SHOW CAUSE HEARING

Claimant 

Claim Year 

Rationale 

2000 2001 2002 2003 

Dreamworks LLC ....... Dismissed ................. ................................... ................................... ................................... Claimant terminated 

IPG’s authority effective 12/31/02. 

Claimant identified 

in IPG’s petition 

that was filed after 

claimant terminated 

IPG’s authority. 

MPAA did not include claimant in its 

petition for 2000. 

Litton Syndications ..... Dismissed ................. ................................... ................................... ................................... Claimant terminated 

IPG’s authority no 

later that 5/18/12. 

Claimant identified 

in IPG’s petition 

that was filed after 

claimaint terminated IPG’s authority. MPAA did not 

include claimant in 

its petition for 2000. 

Marty Stouffer Productions.Dismissed ................. ................................... ................................... ................................... Claimant alleges termination of IPG authority in july 2002. 

IPG’s petition that 

includes claimant 

was filed after alleged termination. 

Claimant is not included in MPAA’s 

petition for 2000. 


emcdonald on DSK67QTVN1PROD with NOTICES
65006 Federal Register / Vol. 78, No. 210 / Wednesday, October 30, 2013 / Notices 

CLAIMS DISMISSED AT SHOW CAUSE HEARING—Continued 

Claimant 

Claim Year 

Rationale 

2000 2001 2002 2003 

Remodeling Today, 

Inc. DBA Today’s 

Homeowner.

................................... ................................... Dismissed ................. ................................... Claimant terminated 

IPG’s authority on 

3/1/04. Claimant 

identified in IPG’s 

petition that was 

filed after claimaint 

terminated IPG’s 

authority. MPAA 

did not include 

claimant in its petition for 2002. 

The Television Syndication Company.................................... ................................... ................................... Dismissed ................. Claimant terminated 

IPG’s authority on 

4/29/04. Claim for 

2003 filed after 

claimant terminated 

IPG’s authority; no 

valid claim filed. 

Urban Latino TV ......... ................................... Dismissed ................. ................................... ................................... No claim was filed for 

2000. Claimant terminated IPG’s authority on 5/28/03. 

Claimant identified 

in IPG’s petition 

that was filed after 

claimaint terminated IPG’s authority. MPAA did not 

include claimant in 

its petition for 2001. 

[FR Doc. 2013–25453 Filed 10–29–13; 8:45 am] 

BILLING CODE 1410–72–P 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

[Notice 13–125] 

National Space-Based Positioning, 

Navigation, and Timing (PNT) Advisory 

Board; Meeting 

AGENCY: National Aeronautics and 

Space Administration (NASA). 

ACTION: Notice of meeting. 

SUMMARY: In accordance with the 

Federal Advisory Committee Act, Public 

Law 92–463, as amended, and the 

President’s 2004 U.S. Space-Based 

Positioning, Navigation, and Timing 

(PNT) Policy, the National Aeronautics 

and Space Administration (NASA) 

announces a meeting of the National 

Space-Based Positioning, Navigation, 

and Timing (PNT) Advisory Board. 

DATES: Wednesday, December 4, 2013, 

9:00 a.m. to 5:00 p.m.; and Thursday, 

December 5, 2013, 9:00 a.m. to 12:00 

p.m., Local Time. 

ADDRESSES: The Omni Shoreham Hotel, 

2500 Calvert Street NW., Washington, 

DC 20008. 

FOR FURTHER INFORMATION CONTACT: Mr. 

James J. Miller, Human Exploration and 

Operations Mission Directorate, NASA 

Headquarters, Washington, DC 20546, 

(202) 358–4417, fax (202) 358–2830, or 

jj.miller@nasa.gov. 

SUPPLEMENTARY INFORMATION: The 

meeting will be open to the public up 

to the seating capacity of the room. It is 

imperative that the meeting be held on 

these dates to accommodate the 

scheduling priorities of the key 

participants. Visitors will be requested 

to sign a visitor’s register. 

The agenda for the meeting includes 

the following topics: 

• Update on U.S. Space-Based 

Positioning, Navigation and Timing 

(PNT) Policy and Global Positioning 

System (GPS) modernization. 

• Explore opportunities for enhancing 

the interoperability of GPS with other 

emerging international Global 

Navigation Satellite Systems (GNSS). 

• Examine emerging trends and 

requirements for PNT services in U.S. 

and international arenas through PNT 

Board technical assessments. 

• Prioritize current and planned GPS 

capabilities and services while assessing 

future PNT architecture options. 

• Assess the current and projected 

economic impact of GPS on the United 

States, and consider the effects of 

potential PNT service degradation if 

adjacent radio-band spectrum 

interference is introduced. 

Patricia D. Rausch, 

Advisory Committee Management Officer, 

National Aeronautics and Space 

Administration. 

[FR Doc. 2013–25719 Filed 10–29–13; 8:45 am] 

BILLING CODE 7510–13–P 

NATIONAL COUNCIL ON DISABILITY 

Sunshine Act Meeting 

TIME AND DATES: The Members of the 

National Council on Disability (NCD) 

will meet in closed executive session by 

phone on Friday, November 1, from 1:00 

p.m.–2:00 p.m., Eastern. 

PLACE: The meeting will occur by 

phone. The meeting will be open only 

to the NCD Council Members. 

STATUS: The meeting on Friday, 

November 1, from 1:00 p.m. till 2:00 

p.m., Eastern will be closed to the 

public. 

MATTERS TO BE CONSIDERED: The Council 

will meet by phone to discuss matters 

related solely to internal personnel rules 

and practices of exigent import, 

pursuant to paragraph (c)(2) of the 

Sunshine Act, and in accordance with a 


emcdonald on DSK67QTVN1PROD with NOTICES