Opinion ID: 427192
Heading Depth: 2
Heading Rank: 2

Heading: The Tribunal's Approach

Text: 21 In evaluating the parties' competing claims to the Fund, the Tribunal operates with very little substantive guidance from Congress. The only limitation in the 1976 Copyright Act is that the Tribunal must restrict its distribution awards to copyright owners whose work[s] [were] included in a secondary transmission made by a cable system of a nonnetwork television program ... beyond the local service area of the primary transmitter. 17 U.S.C. Sec. 111(d)(4)(A) (Supp. V 1981) (emphasis added). As we explained in NAB v. CRT, this restriction reflects a congressional understanding that copyright owners should be compensated for their inability, due to cable retransmission, to exploit their materials in distant markets; because cable retransmission of network programming does not weaken the owners' exploitation of distant markets (given that network programming is theoretically available across the country) and because cable retransmission within the local service area was not felt by Congress to threaten the existing local market for copyright owners, Congress confined the Tribunal's awards to nonnetwork programs retransmitted beyond the primary transmitter's local service area. See NAB v. CRT, 675 F.2d at 373 & n. 3 (noting that local service areas are defined by the FCC and generally encompass a 100-mile radius). Other than this restriction, however, Congress felt that it would not be appropriate to specify particular, limiting standards for distribution of cable royalties, and left the development of distribution criteria to the Tribunal on the basis of all pertinent data and considerations presented by the claimants. See H.R.Rep. No. 1476, 94th Cong., 2d Sess. 97 (1976), U.S.Code Cong. & Admin.News 1976, pp. 5659, 5712 (hereinafter cited as House Report). 22 In its 1979 proceeding, the Tribunal was presented with a welter of conflicting data based on such diverse factors as television viewing, cable royalty fee generation, attitudinal surveys of cable operators, advertising rates, broadcast station expenditures, economic regression analyses, distant signal programming time, innovative and quality programming, and technical equipment. 47 Fed.Reg. 9,892 (1982). After finding that no single formula or rationale provided an adequate basis for allocation, the Tribunal adopted the same five distribution criteria that it had developed in its 1978 proceeding: 23 The Tribunal determined the primary factors to be: 24 (a) the harm caused to copyright owners by secondary transmissions of copyrighted works by cable systems, 25 (b) the benefit derived by cable systems from the secondary transmission of certain copyrighted works, and 26 (c) the marketplace value of the works transmitted. 27 The Tribunal determined the secondary factors to be: 28 (a) quality of copyrighted program material, and 29 (b) time-related considerations. 30 Id.; see 45 Fed.Reg. 63,035 (1980) (announcing five criteria in 1978 proceeding). In applying these criteria to the 1979 record, however, the Tribunal noted that the harm test proved of limited utility because there was little concrete evidence by which to determine that cable retransmission had harmed one group more than any other. See 47 Fed.Reg. 9,892, 9,899 n. 477 (1982) (parties unable to provide more than theories or anecdotal evidence of harm). Accordingly, the 1979 Decision focused on those factors that the Tribunal found to appraise more accurately the compensable marketplace value, lost due to cable retransmission, of a claimant's ability to exploit his or her works. In this appraisal, the Tribunal put particular emphasis on two types of evidence. First, the Tribunal found that MPAA's Nielson Report--analyzing the public's viewership of different categories of programming--was the single most important piece of evidence in the record, having probative value in establishing the entitlement of claimants in accordance with some, but not all, of the criteria. Id. at 9,892. Second, the Tribunal found that the presentation of the Joint Sports Claimants--emphasizing evidence that cable operators consider sports programming as increasingly important to their ability to attract and retain subscribers--was structured and presented to focus on the marketplace considerations we have found most persuasive and useful. Id. Because the Nielsen Report and JSC's attitudinal evidence indicated that movies and sports programs contribute overwhelmingly to cable's attractiveness, it is hardly surprising that over 80% of the 1979 distribution was allocated to MPAA and JSC.