Opinion ID: 402322
Heading Depth: 2
Heading Rank: 2

Heading: The Tribunal's General Approach

Text: 25 The Act instructs the Tribunal to compensate claimants only for nonnetwork material that is retransmitted in whole or in part beyond the local service area of the primary transmitter. 17 U.S.C. § 111(d)(4). This reflects a congressional understanding that copyright owners suffer injury requiring compensation only when the secondary transmissions by cable operators reach markets ordinarily not served by the primary transmitters. See House Report at 90. Network programming, for example, which theoretically is available across the country, is not adversely affected even though it is also available on cable. Similarly, the local retransmission by cable television of a local broadcast merely duplicates programming that is already available in an area. The problem arises because cable systems can pick up broadcasts that are exclusive to one geographical area and carry those broadcasts vast distances into other markets, thereby weakening the copyright holder's ability to exploit his materials elsewhere. The Act therefore was not intended to compensate network broadcasts or even local broadcasters whose programs are retransmitted locally by a cable system in the same area. 3 26 Aside from these restrictions, however, Congress decided that it would not be appropriate to specify particular, limiting standards for distribution of the cable royalties, and to leave the development of such criteria to the Tribunal on the basis of all pertinent data and considerations presented by the claimants. House Report at 97. The Tribunal concluded that no mathematical formula or theory or combination of formulas or theories provided a satisfactory basis for the distribution of royalty fees. 45 Fed.Reg. 50,62 1 (July 30, 1980). Accordingly, it decided that the following criteria should guide its allocation of royalty shares: 27 The Tribunal determined the primary factors to be: 28 (a) the harm caused to copyright owners by secondary transmissions of copyrighted works by cable systems, 29 (b) the benefit derived by cable systems from the secondary transmissions of certain copyrighted works, and 30 (c) the marketplace value of the works transmitted. 31 The Tribunal determined the secondary factors to be: 32 (a) quality of copyrighted program material, and 33 (b) time-related considerations. 34 Decision at 63,035. 35 These criteria explain why almost 90% of the Fund was awarded to movie producers, program syndicators, and sports claimants. The Tribunal observed that movies, syndicated programs, and sports events constitute the largest and most profitable segment of programming transmitted by cable systems, and therefore deserved commensurate compensation under the marketplace value standard. 4 The lion's share went to movie producers and program syndicators because by any measure syndicated movies and programs comprise the largest segment of programming transmitted by cable systems and because of the great risks to these producers in a market in which the high costs of production and the low returns from network licensing make program producers dependent upon syndication to recoup their costs. Decision at 63,037.