4. UHF stations, existing or as yet unborn, can benefit greatly from the carriage of their programs on CATV systems, for CATV actually helps UHF stations achieve signal and coverage equality with VHF.

5. VHF stations also benefit greatly from consistent quality of reception (par ticularly color quality) that can be guaranteed all viewers served by CATV. 6. Public service and other types of CATV program origination are a valuable addition to present methods of communications, and cannot endanger broadcast television.

7. The limited and valuable broadcast frequencies available in any given mar ket cannot in themselves satisfy the insatiable desires of all viewers for a wider variety of educational, entertainment and news programs. Such additional needs can be better served through the use of the multichannel cable television system. 8. The artificial market protection guaranteed the television broadcaster by the new FCC rules is not only foreign to our system of free enterprise but is ur sought by large and responsible segments of the broadcast industry and has never been granted to other communications media such as radio, motion pictures or the press; it can only result ultimately in more severe regulation of the broadcast industry itself.

9. Hundreds of CATV franchises have been (and will be) granted by local municipalities after a thorough analysis of the local public interest; the Federal Government should not override such local decisions.

10. CATV is absolutely not pay TV. Efforts to confuse the two by special interests have clouded this distinction. As CATV grows and viewers are given the choice of a larger number of programs, the allure of pay TV diminishes.

Any legislation which does not incorporate the foregoing principles is not in the public interest. The public's investment in television receivers is greater by far than the total investment in television by all other segments of the industry. We respectfully urge all those interested in the continued health and growth of television to support the basic purpose of the bill recently introduced by Congressman Walter Rogers, which preserves the public's right to freedom of radio and television reception.

THE JERROLD CORP.,
ROBERT H. BEISSWENGER,

President.

(The above ad is reprinted from "FCC Final CATV Decision" published by Television Digest)

The CHAIRMAN. Thank you very much, Mr. Beisswenger for your statement.

I turn the questioning over to Mr. Rogers of Texas.

Mr. ROGERS of Texas. Mr. Beisswenger, I notice all through your statement you have referred to certain things that you say you would leave to the Commission and to the Congress. Now I think it ought to be made clear, I guess I am old fashioned, but it has been my understanding and my belief that the Commission does not have anything to say about any of these things until Congress acts. We have been challenged on this by not only the Federal Communications Commission, but every other board and bureau that has been created, including many in the executive branch. I want the record to very clearly show that in my opinion this is a matter for the Congress, the duly elected representatives of the people of this country, and not a primary issue to be decided by a Commission that is appointed and is completely buffered and insulated from the electorate. I think it is a matter that ought to be discussed in that light.

Now, as I understand you, you have said that certain rules that your company will be in favor of with regard to nonduplication and this sort of thing to be promulgated by the Commission

Mr. BEISSWENGER. By the Congress, sir.

Mr. ROGERS of Texas. Yes. I believe you said that you have gone over this 125 pages that had been submitted by the Federal Communi

ations Commission very thoroughly and very exhaustively. I am ure you realize, Mr. Beisswenger, that what the Commission is asking or is the power to legislate, the power to write rules and regulations vith regard to grandfather clauses, with regard to everything else. Laving to do with a business.

Now, CATV is a separate and distinct industry as I understand it; s it not?

Mr. BEISSWENGER. Yes, sir.

Mr. ROGERS of Texas. There has been a lot of talk about these rules, what they would do and what they will not do. They had already changed their minds down there two or three times before they finally published the rules. Now they have published them, there is nothing in the world, if we grant them the power to change these rules, to change their mind tomorrow and to write other rules which will be just as effective in favor of CATV and against broadcasters or in favor of broadcasters and against CATV people. There is nothing in the world to keep them from doing that. The only way for the Congress to enter into that sort of situation is to come in and repeal the authority which they have granted to them which I sincerely hope they do not. Now, does your company do much credit business, Mr. Beisswenger? Mr. BEISSWENGER. We do some financing; yes, sir. We arrange financing for our customers.

Mr. ROGERS of Texas. Would it be good business for your industry or any other industry to lend credit for the establishment of some kind of facility or equipment that could be wiped off in a short period of 3, 4, 5, or 6 months by a simple change order in the rules of a bureau or board in Washington?

Mr. BEISSWENGER. No, sir; it would not be very safe for us. It is for that very reason that I am setting forth here these very simple points, that the Congress would lay down as to the total extent. I talk about these five points here to the total exclusion of that whole second order report. The Chairman of the Commission and the Commission seem primarily worried when they talk, as I hear them talk, about the protection of local stations. I say fine, I am happy to protect local stations and I will do that. And, second, they are very worried about duplication. I say fine, I won't duplicate that local fellow on a simultaneous basis because it is simple, it is easily done, it is understandable. I will not duplicate him on a simultaneous basis.

Three, everybody is scared to death that we are sneaking in the back door with pay TV via CATV. I say fine, let the Congress say that we cannot go into that. That disposes, I think, of about 95 percent of what the Commission says they want. I say fine, I will give it to them right now. And let them not go beyond that.

Mr. ROGERS of Texas. Your advocacy of any rule to be applicable to CATV is based upon the premise that the decision is made that the Federal Government ought to go in this business and regulate it in the first place, that if it is regulated that whatever rules applicable be spelled out in clear, unmistakable language by the Congress. Mr. BEISSWENGER. Yes, sir.

Mr. ROGERS of Texas. You do not advocate a situation that would require you or anyone else in this instance to go hat in hand to a bureau downtown and beg for salvation under circumstances over which you have no control either directly or indirectly.

62-610-66- -19

Mr. BEISSWENGER. I agree with that completely, sir. One of the compelling reasons why I even suggest that I would accede to any kind of rules being laid down by the Congress, it is very seldom that you see a businessman come in and plead for protection. That is not good business to my mind. I saw a lot of people pleading for protection here against some will-o'-the-wisps, but if we do finance systems, and we are investors, I happen to be the president of 22 cable systems, they are long-term investments. We have their stockholders' money. I have 6,500 stockholders I must worry about, too, while I am thinking about the public interest. We need something that will keep us from capricious acts of the FCC. They have taken jurisdiction of us already. They took jurisdiction of us via the back door with their microwave grants. They don't say no to us but it is the slowest yes you

ever saw.

Mr. ROGERS of Texas. Thank you, Mr. Beisswenger.

Thank you, Mr. Chairman.

The CHAIRMAN. Mr. Springer.

Mr. SPRINGER. Mr. Beisswenger, the Jerrold Corp. is one of the large producers of equipment.

Mr. BEISSWENGER. Yes, sir.

Mr. SPRINGER. What other companies produce TV equipment, CATV equipment?

Mr. BEISSWENGER. The Ameca Corp., Phoenix, Ariz., Viking Industries, in Elizabeth and Newark, N.J.; Spencer-Kennedy Laboratories in Boston, and Entron, Inc., in Sliver Spring, Md., and Kaiser-Cox are the primary ones.

Mr. SPRINGER. What share of the business does Jerrold have, percentagewise?

Mr. BEISSWENGER. We do not split out of a corporate setup-we report on a consolidated basis on our balance sheet and our profit and loss statements. We do not break out how much CATV business we do. Our company does many things besides community antenna television. We build home television antennas, sophisticated downrange missile tracking antennas, Harmon-Cardon high-fidelity music. Mr. SPRINGER. What percentage would you estimate that Jerrold has?

Mr. BEISSWENGER. I would estimate something in the order of 20 percent.

Mr. SPRINGER. Do you have any interest in Television Digest? Mr. BEISSWENGER. Do I have any interest in Television Digest? Mr. SPRINGER. You or anybody in Jerrold?

Mr. BEISSWENGER. You mean a financial interest or interest in reading it?

Mr. SPRINGER Financial interest.

Mr. BEISSWENGER. No, sir. We bought that advertisement on there. Mr. SPRINGER. This was very good, may I say, giving the full story of the order and all legislation pending. It was very helpful to me in discussing this matter with the witnesses.

I have no further questions, Mr. Chairman.

The CHAIRMAN. Mr. Van Deerlin.

Mr. VAN DEERLIN. Mr. Beisswenger, I was interested in this analogy that you drew at the bottom of page 2 where you ask :

Is there any arbitrary limit to the number of magazines, newspapers, or other media? Of course not. Are there restrictions against the New York Times to prevent it from competing with the Washington newspapers? Of course not. Why then should the people, during the infancy of the medium of television, be limited to a paltry two or three television channels?

And so forth.

You are such an articulate witness that I was able to detect no tonguein-cheek as you covered that part of your testimony. I was wondering whether you asked this question seriously, or whether you realized very well what the answers to those questions are.

Mr. BEISSWENGER. I appreciate the compliment, Congressman. My tongue was not in my cheek. My position here, and, if I may take a moment to expand here, there was considerable talk here before this committee today about San Diego. I know that the Congressman comes from out in that area. At no time during those discussions did

I hear it brought out that the people in San Diego can now see the Los Angeles signals without a CATV system in many, many places in San Diego. What we have done in San Diego with that CATV system down there, we are the suppliers of the equipment, we are not the owners of that system, but we supplied the equipment and it offers us an excellent market, towns like this, to ship our gear to people who are already able to see Los Angeles on home antennas-fantastically high, terriby ugly things, spoiling all those pretty homes. But they were able to get Los Angeles.

It is my position here, sir, that if we are able technically now to give them good pictures in that area where now they can just see bad pictures off their home antennas, why keep them away? Why not let them have access to as many signals as possible?

Mr. VAN DEERLIN. I have not reached any judgments in this matter, but I do think we should keep the arena of conflict well identified. You understand, do you not, that Congress may not interfere with the competition of the printed word, for the obvious reason that the Constitution says it may not. The reason that Congress must regulate in the field of broadcasting is that there is a limitation on the number of bands or channels, and you cannot have chaos on the airwaves.

There is another difference here, however, which seems to me to be present. That is that if a newspaper coming into Washington other than the New York Times, should seek to bring features that are owned by the New York Times and carried by the New York Times, they would have a lawsuit slapped against them so fast that it would make their head swim.

Now CATV, as we know it today, is in effect lifting features off the established stations and carrying them without any recompense to the station or network which originates the signal, and delivering them in a way that newspapers do not do.

Mr. BEISSWENGER. There is a copyright case right now, sir, that is going to determine that question you are talking about, the matter of compensation.

Mr. VAN DEERLIN. There is a difference technically in the operation. There is a production that the New York Times can figure which cannot be lifted by a competitive newspaper in Washington, and there is a production which is just automatically lifted by wire television. I don't like to use the term parasite.

Mr. BEISSWENGER. I don't like to have it used, either, sir, against us. Mr. VAN DEERLIN. I have not used it.

Mr. BEISSWENGER. I have heard it used against us occasionally. But we have one thing going for us which is very, very interesting. We have an awful lot of people against us but not our customers. Our customers seem very pleased with the kind of service that we render. We recently opened a CATV system in Harrisburg, Pa., where people got something like three and a half signals. On opening night we had 16,000 people presubscribed to that system. I think that is very strong evidence of what I say, gentlemen, that here you are providing for the people a multiplicity of choice and the people are willing to subscribe to this service. If these people had enough money to put up that antenna that we have in Harrisburg, and here is a point that has been missed all through this, if someone wanted to get what we are providing him in his own home up in Harrisburg, he can get it. All he has to do is spend about $300,000 to $400,000 and put up an antenna right next to ours up on that hill and he can get them, himself. Those signals are in the air. There are 15 signals in that air. If I were a wealthy man wanting to provide television viewing for that family living in that area, I could spend $400,000 and put up a super de luxe antenna and provide it into my house. I wonder then if that would be poaching on signals. Those signals are free in the air as I understand.

Mr. VAN DEERLIN. The communications code, as you know, vests in Congress the responsibility of maintaining locally developed television throughout the country.

Mr. BEISSWENGER. Yes, sir.

Mr. VAN DEERLIN. For broadcasting.

Mr. BEISSWENGER. For broadcasting.

Mr. VAN DEERLIN. Therefore, this is a province in which Congress may feel some concern.

Mr. BEISSWENGER. Absolutely, as do we.

Mr. VAN DEERLIN. Now, just one matter briefly, about the testimony of the football commissioner in regard to the liting of signals and returning them into areas that are blacked out under their contracts with the networks. Would you comment on the validity of that testimony that they offered?

Mr. BEISSWENGER. I would like to comment, Congressman, but not on the validity of it. I would like to comment, I wish those two gentlemen had been after me so I would not be asked that question. That is a highly involved, legal, technical question. I think the copyrights case will move toward that, there are some of the extrapolations that can be made from the copyright case as to bringing in blacked out signals. I frankly don't know the answer.

Mr. VAN DEERLIN. A very candid answer, and I appreciate your giving it.

Mr. ADAMS. Would the gentleman yield?

Mr. VAN DEERLIN. Yes, I will.

Mr. ADAMS. Could your system exist without the free signal that you referred to in the air?

Mr. BEISSWENGER. Not CATV as we presently know it, Mr. Adams: it could not because ours is a reception service. If there is nothing to receive, you don't have a service.