Now this next chart, figure 13, is an attempt to give you some idea of how nonduplication works. It has to be studied in some detail, and this whole matter has to be studied in some detail to really get it quite clearly, but I just want to try to give you a broad outline of it.

EFFECT OF DIFFERENT MONON-DUPLICATION REQUIREMENTS

MONDAY THRU FRIDAY DAYTIME PROGRAMS-JULY 19-23, 1965

FIGURE 13

This chart represents the eight channels in the CATV system in Great Falls, Mont. Again, I show you this because it is one that we have at the Commission, and it was furnished to us by the system itself in Great Falls.

There, the Great Falls system carries the two local Great Falls stations, and they are represented in these first two columns, and their programs are shown, all programs being broadcast are shown in grey. This is the daytime, the schedule of daytime programs for the week of July 19-23, and it goes from 6 in the morning, down to 6 in the evening, so it represents 12 hours of what we might call daytime programing on the two local television stations.

The system in Great Falls carries these two local stations, and the six other stations that I referred to: one in Canada, three in Spokane, and two or three stations on two CATV channels from Salt Lake.

Now the vertical-lined area shows what programs on the distant signals would receive protection under simultaneous nonduplication. The blue area shows what would receive protection and which would not be shown on the distant station signal under same day nonduplication protection, which is the standard we adopted.

Needless to say, the latter includes the former; that is, any program receiving protection on the same day would also receive it under 15-day, because this is greater, but this gives you some idea of the amount of programing in this instance that would receive protection, that would at least have the right to be shown, first of all, on the local station; that is, its exclusivity or first call from the network, and so on, would be protected.

Although we have each of these programs crossed out, I want to emphasize that the crossing out does not mean that the CATV subscribers do not see them. They do see them. It means simply that they see them on the local station, rather than on this distant station. At the time these are being shown on the distant station, the CATV channel for that station is either blacked out or it shows the local station. It carries, in effect, the local station, so that in any event, it is the local station, with the local station's commercials, and what have you, that is seen.

Each of the programs in the dotted and vertical-line areas are shown on these first two columns. In other words, every program that is blacked out here is shown on these two columns, so the local subscribers see these programs, but at a slightly different time. They also see them on the same day.

Now I think the difference between the amount of dotted and verticallined area is probably due to the fact that this is a different time zone from Spokane. These Spokane stations are Pacific time, the local stations in Great Falls are mountain time, so that many of these stations here on the local stations are shown earlier than here, due to a quirk in network operation.

But even if this weren't a differential in time, these would still receive protection, possibly under the simultaneous. We don't know exactly how it would break down. But this is the situation as it exists on those stations. As a matter of fact, I guess they wouldn't receive protection under simultaneous, because they are shown at different times.

But I think this gives you some overall idea of the difference between same day and simultaneous. This next chart, figure 14, is the same system, the CATV system in Great Falls, only this is the nighttime programing. This is the 6 p.m. to 12 midnight, or actually to 1 a.m. programing. Six to eleven generally is considered to be prime time, and this also shows the rest of the evening's programs.

The gray, again, are the signals that are being broadcast. The first two columns are the local channels. The vertical lined square is again. the program that would be blacked out if we had simultaneous nonduplication. The checked squares are what is blacked out if we have same-day nonduplication protection, and the crossed squares are what would be blacked out if we had 15-day before and after nonduplication programs.

The greater of all of these includes the lesser, again; all that would be protected under same day, would be protected under 15 day, 15 day being greatest.

And her I think we could see that the same-day nonduplication is considerably less than the 15 day would have afforded, but again, it is somewhat more than simultaneous.

Again, all of the programs that have crosses on them are shown over here on the same day. They are seen by the CATV subscriber, and they are seen on the same day.

I think, Mr. Chairman, that regardless of how this might break down on any other station, the point simply is that simultaneous is somewhat less protection than same day. Same day is somewhat less than 15 days. We think that the broadcast industry will adapt, if our rules are not changed by legislation, will adapt to the same-day requirement, so as to obtain maximum benefits from it. We don't know exactly what the effect will be, because it is only coming into the rules now, but we think that they will adapt to obtain as much protection as possible under it.

Now the last chart I have, figure 15, is simply a photograph of an advertisement for a nonduplication switcher which is made by Telemation, Inc., West Temple Street, Salt Lake City, Utah. This shows the switcher here in the middle, which receives electronic inputs from the various signals that the CATV master antennas takes off the air, and you can see from the programs shown that there are 5 different programs from the 11 different signals.

On 11 different stations, there are only 5 programs that are different. And this automatically, once it is preprogramed, blacks out the ones that would be duplicated, and gives only the ones that are different. So from the 11 here, we get 5, and this could be programed in any way that is necessary to enable the CATV system to comply with the Commission's rules on nonduplication protection.

It says that it can make 480 program changes weekly. I don't know how often it would have to be programed, but of course, it takes an employee of that CATV system to program it and to get all the

TELEMATION INC. 2275 SO. WEST TEMPLE P. O. BOX 15068 SALT LAKE CITY, UTAH 84115

FIGURE 15

information necessary to do it. It is not automatic, in the sense that you can pre-set it, and then it will work forever. It is semiautomatic.

I have described the essence of our action as to traditional CATV. We think that we have proceeded cautiously and in a way that represents a fair accommodation of the needs of both the broadcast and CATV interests in bringing service to the public. And, we believe that on the grounds stated in our legal memorandum and discussed with this committee last session, we have the lawful authority to act.

In view of the heavy pressures of CATV growth and impact on our broadcast system, we believe we had the responsibility to act when we did, and in the manner we did.

Congress provided in section 2(a) of the act that its provisions "shall apply to all interstate and foreign communication by wire or radio." And "radio," whenever I use it in these terms, includes television. We believe it clear that community antenna systems are engaged in interstate communication by wire within the definitions of section 3 of the act. This being so, the Commission's duty under the act to establish the areas to be served by television stations, that is under section 303 (h) of the act, and to distribute licenses so as to provide a fair, efficient, and equitable distribution of television service to each State and community, under section 307(b) of the act, required it to exercise its power to promulgate regulations applicable to CATV in order to carry out that duty.

The alternative was to sit passively while the entire congressional scheme of unified regulation and a fair distribution of service, was threatened. The problem presented to the Commission was whether it should, by failing to act, ignore that threat-and by so doing risk serious disruption or erosion of the system by which television service is now provided to the American people. We simply decided that we would be derelict to take that risk.

I turn now to our action dealing with CATV in the larger markets. As I said, CATV has entered a new and potentially revolutionary phase. Its systems are now moving into the larger cities where the public already has multiple reception services. Thus, as reported by NCTA, there are CATV systems currently operating in 12 of the top 100 markets-that is, in 1 or more cities in each of those 12 markets-other CATV franchises have been granted in 19 of those markets, and there is further CATV activity, in the form of pending franchise applications, in 53 of such markets.

This movement, in addition to the question of fair competition already referred to, raises a serious question as to the possible impact of CATV on the further development of free, off-the-air broadcasting, particularly in the UHF spectrum.

As our second report and order points out, Congress, in the 1962 all-channel receiver legislation, made the judgment that the widest possible development of UHF is the best way of achieving an adequate national system of television, including both commercial and educational systems.

The all-channel receiver legislation has helped produce substantial progress toward that goal and, absent possible short circuiting by novel factors such as the new phase of CATV growth, will produce even greater progress, in the next several years before us.

For example, between 1962 and the end of 1965, the number of commercial UHF stations on the air increased from 85 to 100, and the number of UHF channels applied for at the Commission increased from 19 to 80. UHF set circulation on a nationwide basis is now up to 25 percent or more and should move close to 100 percent in the next 5 years or so.

CATV and UHF are both entering the larger markets, in an effort to bring in programing that is not now available in those markets. There are at least 163 communities or areas-most of which are located within the top 100 markets-which have UHF stations oper