Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Proposed Rules 2365

ACTION: Notice of termination.

SUMMARY: This rulemaking project was

initiated to make various administrative

changes to clarify the statutory authority

and purposes of special anchorage areas

and anchorage grounds; remove

references to specific state and local

ordinances governing special anchorage

areas; relocate anchorage grounds

(Subpart B) from Part 110 to a new Part

111; adopt a standardized anchorage

description format using latitudes and

longitudes; and establish a

geographically oriented national

numbering system for anchorages.

Because Coast Guard resources have

been devoted to higher priority issues,

staff to complete this editorial effort has

not been and will not be available in the

foreseeable future to complete this

initiative. Therefore, the Coast Guard is

terminating further rulemaking under

docket number 86–079.

FOR FURTHER INFORMATION CONTACT:

Margie G. Hegy, Project Manager, Short

Range Aids to Navigation Division, U.S.

Coast Guard Headquarters, (202) 267–

0415.

SUPPLEMENTARY INFORMATION:

Responsibility for the administration

and enforcement of anchorage

regulations was transferred from the

U.S. Army Corps of Engineers to the

U.S. Coast Guard in 1967. Many of the

regulations have remained basically

unchanged since that time. In 1979, the

authority to designate special anchorage

areas and anchorage grounds and to

issue regulations pertaining to

anchorage grounds was delegated to

Coast Guard district commanders. State

and local governments have also

promulgated ordinances which apply in

some of these designated anchorages.

On March 11, 1988 (53 FR 7949) the

Coast Guard proposed a number of

editorial changes and a partial

reorganization of the anchorage

regulations in 33 CFR Part 110. After

reviewing the comments received as a

result of the NPRM, the Coast Guard

published a Supplemental Notice of

Proposed Rulemaking on December 5,

1988 (53 FR 48935) proposing to expand

the editorial revision of Part 110 to

include creating a new Part 111 and

standardizing the format for anchorage

descriptions by using latitudes and

longitudes.

Because Coast Guard resources have

been devoted to higher priority issues,

staff to complete this extensive editorial

effort has not been and will not be

available in the foreseeable future to

complete this initiative. Therefore, due

to the time that has lapsed since the last

section (1988) and the lack of resources

to complete this rulemaking, the Coast

Guard is terminating further rulemaking

under docket number 86–079. This

subject may be further reviewed and, as

resources permit, future rulemaking

projects initiated as needed.

Dated: December 30, 1994.

G.A. Penington,

Rear Admiral, U.S. Coast Guard Chief, Office

of Navigation Safety and Waterway Services.

[FR Doc. 95–435 Filed 1–6–95; 8:45 am]

BILLING CODE 4910–14–M

LIBRARY OF CONGRESS

Copyright Office

37 CFR Part 201

[Docket No. RM 89–2A]

Cable Compulsory License: Notice of

Inquiry Regarding Merger of Cable

Systems and Individual Pricing of

Broadcast Signals

AGENCY: Copyright Office, Library of

Congress.

ACTION: Extension of comment period.

SUMMARY: The Copyright Office is

reopening the comment period in

Docket RM 89–2 (Merger of Cable

Systems) to broaden the scope of this

proceeding. Specifically, the Office

seeks comment as to the copyright

royalty implications of a la carte

offerings of broadcast signals by cable

operators and the permissibility of

allocating gross receipts among

subscriber groups for a la carte signals

in computing royalties due under the

cable compulsory license of the

Copyright Act.

DATES: Initial comments should be

received by February 23, 1995. Reply

comments should be received by

February 8, 1995.

ADDRESSES: Interested persons should

submit fifteen copies of their written

comments, if delivered by mail, to:

Copyright GC/I&R, P. O. Box 70400,

Southwest Station, Washington, D.C.

20024. If delivered by hand, fifteen

copies should be brought to: Office of

the General Counsel, James Madison

Memorial Building, Room LM–407, 101

Independence Avenue, S.E.,

Washington, D.C. 20540.

FOR FURTHER INFORMATION CONTACT:

Marilyn J. Kretsinger, Acting General

Counsel, Copyright GC/I&R, P. O. Box

70400, Southwest Station, Washington,

D.C. 20024. Telephone (202) 707–8380.

Telefax: (202) 707–8366.

SUPPLEMENTARY INFORMATION:

I. Background

On September 18, 1989, the Copyright

Office published a Notice of Inquiry

(NOI) in Docket No. RM 89–2 to inform

the public that it was examining the

issues of merger and acquisition of cable

systems and their impact on the

computation and reporting of royalties

under the cable compulsory license, 17

U.S.C. 111. 54 FR 38390 (1989). At the

heart of the 1989 NOI were the royalty

filing questions raised by the

application of the ‘‘contiguous

communities’’ provision of the section

111(f) definition of a cable system. That

provision provides that two or more

cable facilities are considered as one

cable system if the facilities are either in

contiguous communities under common

ownership or control or operating from

one headend. See also 37 CFR

201.17(b)(2).

The Office highlighted some of the

difficulties created by cable systems in

contiguous communities becoming a

single system through either merger or

acquisition by a common owner:

For example, assume a situation where

there are two completely independent but

contiguous cable systems. System A carries

two non-permitted (3.75% rate) independent

station signals and System B, assigned a

different television market, carries the same

two independent station signals but on a

permitted (base rate) basis, plus a

superstation signal on a non-permitted

(3.75% rate) basis. Systems A and B are

purchased by the same parent company and

apparently become a single cable system for

purposes of the compulsory license. The

purchase raises several problematic issues as

to the calculation of the proper royalty fee.

Should the independent stations be paid for

at the 3.75% rate or the non-3.75% rate

system-wide, or should the rates be allocated

among subscribers within the system and, if

so, on what basis? Furthermore, if allocation

is the answer, what rate can be attributed to

new subscribers to the merged system?

Finally, there is the question of the

superstation signal which is only carried by

former cable System B. At the time of

acquisition, should the superstation be

attributed throughout the entire system, even

though many subscribers do not receive the

signal (a so-called ‘phantom’ signal)? And

which system’s market quota (A’s or B’s)

should be used for the entire statement?

54 FR at 38391

Based on the above scenario, the

Office also formally posed a set of

further questions—many of which

addressed the creation of subscriber

groups for attributing signals and

royalty rates. Among these questions

were whether cable operators should be

allowed to attribute distant signals

among their subscribers in accordance

with the conditions that existed prior to
2366 Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Proposed Rules

1Although the Copyright Office has reviewed the

comments, it has not reached any conclusions or

decisions with regard to the suggestions proposed

by the various commentators.

2 ’’Fragmentation’’ is the practice whereby a cable

system separates or ‘‘fragments’’ its system into as

series of smaller systems filing separate forms,

usually the SA 1–2, and corresponding lower

royalty rates. The purpose of fragmentation its to

reduce the operator’s overall gross receipts and

thereby create a substantially lower royalty

payment under the cable license.

3The royalty rate problems include identifying

the signals to which the 3.75% rate applies and in

the case of permitted signals, what is the order of

the DSE (first, second, third).

the merger or acquisition, and whether

cable operators should only be required

to include in gross receipts the revenues

generated from subscribers who actually

received a broadcast signal. Id. at

38391–92.

Several parties, who commented on

the 1989 NOI, proposed a possible

‘‘solution’’ to the above described

scenario. 1 Their proposal is a two step

approach: aggregation, and then

allocation of gross receipts. Cable

systems would first aggregate the gross

receipts of all of their subscribers to

determine which Copyright Office form

(and hence royalty rates) to use; then

cable systems would report carriage of

distant signals according to subscriber

groups. Thus, in the above example

provided by the Office in the 1989 NOI,

Systems A and B would aggregate their

gross receipts to determine which form

to use (either SA 1–2 or SA–3) and the

corresponding royalty rates, and then

continue to file separately (i.e. as they

were filing prior to the merger/

acquisition). Thus, if System A and B’s

aggregated gross receipts total was in

excess of $292,000, both systems would

file a separate form SA–3 with the

corresponding royalty rates. System A

would file an SA–3 and report two nonpermitted independent signals at the

3.75% rate, based only on the gross

receipts of the subscribers in the

communities System A serves. System B

would also file an SA–3 and report both

the non-permitted 3.75% superstation

signal and those same two independent

signals on a permitted basis, based on

the gross receipts of the subscribers in

the communities System B serves. See

comments of American Television and

Communications Corp. at 10; comments

of Baraff, Koerner, Olender & Hochberg,

P.C. at 2–3; comments of Adelphia

Communication Corp et. al. at 10;

comments of National Cable Television

Association at 13; comments of Program

Suppliers at 7–9. But see comments of

Joint Sports Claimants at 3. The

referenced commentators argue that this

approach is consistent with the

‘‘contiguous communities’’ provision of

section 111(f) since that provision

speaks only to how systems are to be

classified, not how they are to report

carriage, and sustains the purpose of the

provision to prevent fragmentation of

cable systems.2

The referenced commentators’

proposal advocates the creation of

‘‘subscriber groups’’ within a single

cable system, requiring allocation of

gross receipts to specific groups of

subscribers and application of varying

royalty rates to those groups. Until now,

the Copyright Office has looked with

disfavor on allocation of gross receipts

based on subscriber groups, since

allocation among different subscribers,

with one exception, is not specifically

recognized by section 111 and creates

problems in applying the royalty rates. 3

The only express allowance for

allocation in section 111 is the partially

local/partially distant provision of

section 111(d)(1)(B). That section

provides that ‘‘in the case of any cable

system located partly within and partly

without the local service area of a

primary transmitter, gross receipts shall

be limited to those gross receipts

derived from subscribers located

without the local service area of such

primary transmitter.’’ There are now

other ‘‘subscriber group’’ and gross

receipts allocation issues beyond those

of section 111(d)(1)(B) and those

presented by the merger and acquisition

of cable systems.

II. The 1992 Cable Act

In 1992 Congress passed the ‘‘Cable

Television Consumer Protection and

Competition Act of 1992’’ (1992 Cable

Act) which, among other things,

regulates the rates that cable operators

may charge their subscribers for cable

programming services. Although the

1992 Cable Act is telecommunications

legislation, and not copyright, its

passage has created additional issues

related to creation of subscriber groups

and allocation of gross receipts to those

addressed in our 1989 NOI.

The 1992 Cable Act permits the

Federal Communications Commission,

and in some cases local franchising

authorities, to regulate the rates charged

by cable operators for both broadcast

and nonbroadcast programming

services. While packages or ‘‘tiers’’ of

programming services are subject to rate

regulation, Congress excluded perchannel service offerings from such

regulation. These per-channel offerings

are known as a la carte signals because,

to be exempt from rate regulation,

subscribers must have a ‘‘realistic

choice’’ in deciding whether to receive

the signal. Report and Order and

Further Notice of Proposed Rulemaking

in MM Docket 92–266, 8 FCC Rcd. 5631

¶¶327–328 & n. 808.

The exemption from rate regulation

for a la carte signals encourages cable

operators to offer some, if not all of their

services (beyond the basic tier required

by the 1992 Cable Act to be provided to

all subscribers), on a subscriber choice

basis. Thus, for example, a cable

operator might offer subscribers three

distant superstation signals (WTBS,

WWOR, WGN, etc.) at $3 a month per

signal. A subscriber could choose any

combination of these signals, or none at

all, and pay only the per signal charges

for those signals selected. The result is

a number of distant signal offerings by

the cable operator, with varying

numbers of subscribers within the

system selecting, receiving, and paying

separately for each signal.

With the increasing ability of cable

operators to offer subscribers essentially

‘‘one signal tiers’’ of broadcast stations,

issues arise as to the proper calculation

and reporting of royalty fees under the

section 111 cable compulsory license. If

every distant signal offering is allocated

to the entire subscriber base of the cable

system, ‘‘one signal tiers’’ that are

purchased by just a few of the cable

system’s subscribers could result in

costing the cable system more in

royalties than the income it gets from

the few subscribers. As noted above, the

Copyright Office has had a longstanding

policy against creation of subscriber

groups and allocation of gross receipts,

except as provided for in section

111(d)(1)(B). By extending the comment

period in this proceeding, the Office is

now re-examining this policy in both

the context of merger and acquisition of

cable systems and a la carte broadcast

signals.

III. Extension of Comment Period

Because the royalty issues presented

by a la carte broadcast signals resemble

many of those presented by the merger

and acquisition of cable systems, the

Copyright Office is reopening this

proceeding to receive comment on how

compulsory license royalty payments

should be made for a la carte offerings

of broadcast signals by cable operators.

Specifically, the Office seeks comment

on the following inquiries:

(a) As described in the ‘‘System A and

System B’’ example in the 1989 NOI to

this proceeding, a ‘‘phantom’’ signal

problem occurs when the superstation

carried by System B is attributed to all

subscribers throughout the merged

systems, even though the subscribers in

former System A do not actually receive

the signal. In the case of a la carte

broadcast signals, should carriage of
Federal Register / Vol. 60, No. 5 / Monday, January 9, 1995 / Proposed Rules 2367

4This example assumes the cable system is an

SA–3 form system, and therefore makes royalty

payments based on the number of DSE’s carried.

each distant broadcast signal be

attributed throughout the entire

subscription base, even if many

subscribers do not actually receive the

signal. The Copyright Office has

historically required such attribution,

based upon its interpretation that the

Copyright Act permits only allocation of

gross receipts among subscriber groups

for partially local/partially distant

signals. Does the 1992 Cable Act, or

other circumstances, warrant a change

in this interpretation? If so, on what

basis?

(b) It has been suggested by some that

the Copyright Office should permit

creation of subscriber groups for a la

carte broadcast signals, and allow cable

operators to allocate gross receipts only

to those subscribers who select and

receive a particular signal. Thus, for

example, if a cable system has 1000

subscribers and only 500 of them choose

to receive superstation X, the distant

signal equivalent (DSE) value generated

by superstation X would only be

applied against the gross receipts

generated from the 500 subscribers who

took the superstation, as opposed to

applying it against the system’s total

gross receipts.4

One concern with allowing that

would be that it would offer the cable

system an incentive to pull its distant

signals from its basic tier offering, and

offer them only as a la carte signals,

thus reducing the subscriber base from

which the royalty is calculated.

The Cable Act of 1992 has made it

more difficult for cable systems to

restructure their distant signal offerings

because it states that, for a basic tier

subject to rate regulation, ‘‘such basic

service tier shall, at a minimum, consist

of * * * (iii) any signal of any

television broadcast station that is

provided by the cable operator to any

subscriber, except a signal which is

secondarily transmitted by a satellite

carrier beyond the local service area of

such station.’’ 47 USC 543 (b) (7) (iii).

Therefore, for distant signals that are

imported by means other than satellite

carrier, if the cable system offers it to

one subscriber, it must offer it to all on

the basic tier. In 1989, 48.2% of all

instances of distant signal carriage on a

Form 3 cable system were by means

other than satellite carrier. 1989 Cable

Royalty Distribution Proceeding, 57 FR

15286, 15294 (1992).

However, 51.8% of distant signal

carriage in 1989 was by means of

satellite carrier, and those signals could

be pulled from the basic tier without

violating the 1992 Cable Act. In

addition, cable systems that are not

subject to basic tier rate regulation

because there is effective competition in

the system’s franchise area, are also free

to restructure.

What would be the statutory basis for

allowing a la carte allocation, and what

effect would it have on the total amount

of royalties paid?

(c) If the Copyright Office allowed the

type of gross receipts allocation

described in question (b), what is the

proper royalty rate to assess against the

gross receipts of each subscriber group?

For example, if a cable system carried

two distant signals on an a la carte

basis, one a permitted signal and the

other a non-permitted signal at the

3.75% rate, how can it be determined

which subscriber group is receiving the

less expensive base rate permitted

signal, and which group is receiving the

more expensive 3.75% rate nonpermitted signal? Obviously, there is a

powerful incentive for the cable

operator to assign the 3.75% rate to the

signal with the fewest subscribers, and

hence the lowest amount of gross

receipts. A similar problem occurs in

applying the decreasing rates for

permitted signals. Are there any fixed

factors which the Copyright Office

could apply to prevent the repeated

occurrence of applying the lower rate

against the higher gross receipts? What

effect would that have on the total

royalty pool generated by section 111?

The Copyright Office requests

comment on the questions raised in this

extended comment period, as well as

any other issues related to compulsory

license royalty payments for a la carte

offerings of broadcast signals.

List of Subjects

Cable compulsory license; Cable

television systems.

Dated: December 29, 1994.

Marybeth Peters,

Register of Copyrights.

Approved by:

James H. Billington,

The Librarian of Congress.

[FR Doc. 95–439 Filed 1–6–95; 8:45 am]

BILLING CODE 1410–31–P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52

[OAQPS No. CA–95–6639; FRL–5134–4]

Approval and Promulgation of

Implementation Plans; California

Implementation Plan Revision, San

Joaquin Valley Unified Air Pollution

Control District

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: EPA is proposing to approve

revisions to the California State

Implementation Plan (SIP) which

concern the control of volatile organic

compound (VOC) emissions from

polystyrene foam, polyethylene, and

polypropylene manufacturing and

polyester resin operations.

The intended effect of proposing

approval of these rules is to regulate

emissions of VOCs in accordance with

the requirements of the Clean Air Act,

as amended in 1990 (CAA or the Act).

EPA’s final action on this notice of

proposed rulemaking (NPRM) will

incorporate these rules into the federally

approved SIP. EPA has evaluated each

of these rules and is proposing to

approve them under provisions of the

CAA regarding EPA action on SIP

submittals, SIPs for national primary

and secondary ambient air quality

standards and plan requirements for

nonattainment areas.

DATES: Comments must be received on

or before February 8, 1995.

ADDRESSES: Comments may be mailed

to: Daniel A. Meer, Rulemaking Section

[A–5–3], Air and Toxics Division, U.S.

Environmental Protection Agency,

Region IX, 75 Hawthorne Street, San

Francisco, CA 94105–3901.

Copies of the new rules and EPA’s

evaluation report of each rule are

available for public inspection at EPA’s

Region 9 office during normal business

hours. Copies of the submitted rules are

also available for inspection at the

following locations:

California Air Resources Board,

Stationary Source Division, Rule

Evaluation Section, 2020 ‘‘L’’ Street,

Sacramento, CA 95814.

San Joaquin Valley Unified Air

Pollution Control District 1999

Tuolumne Street, Fresno, CA 93721.

FOR FURTHER INFORMATION CONTACT:

Christine Vineyard, Rulemaking Section

[A–5–3], Air and Toxics Division, U.S.

Environmental Protection Agency,

Region IX, 75 Hawthorne Street, San