ter television antenna arrangements." Yet this appears to be the concept underlying H.R. 12914.

In any event, the real inquiry is: Does the public interest require regulation of CATV facilities? The answer is: The need for strong, effective regulation of CATV in the public interest has been clearly demonstrated. In the absence of such regulation, the unchecked proliferation and expansion of CATV will lead inevitably to the impairment, if not the demise, of the structure of television allocations and the entire system of free, local, and area television broadcast service. This would be contrary to longstanding congressional policy and contrary to the public interest.

H.R. 13286

H.R. 13286 and S. 3017, both introduced at the request of the FCC, would reaffirm the authority of the FCC to issue rules and regulations with respect to CATV. Although the FCC has correctly concluded that it already has jurisdiction and authority to regulate CATV under the present act, it has sought congressional legislation to clarify this authority.

Enactment of clarifying legislation is a reasonable course of action so long as (1) such legislation does not reduce or limit existing FCC authority over CATV and (2) such legislation does not alter the basic policy which the FCC is applying to CATV. The fundamental public policy on which the FCC has based its regulation of CATV, that of insuring the fullest development of free competitive, local, and area television broadcast stations, has been long established. This policy is a reflection of an American tradition which reaches back into the past long before radio or television was a reality. That policy has now been applied by the FCC to CATV, for the Commission has found that CATV should be supplementary and auxiliary to broadcasting and not a substitute for it. There is no occasion for any change in this long-established policy.

However,

In general, H.R. 13286 and S. 3017 are sound in their approach. a number of detailed comments on specific provisions seem appropriate : 1. The definition of CATV is, quite rightly, broadly inclusive. Although the definition of CATV would include some operations, such as master antenna services, as to which regulation is not contemplated, section 331 (a) (2) of the bill gives the FCC the authority to exempt such operations from regulation. This approach seems better than unduly restricting the statutory definition of CATV which would limit regulatory flexibility.

2. Section 331(a)(1) is sound in affirming the FCC's broad authority, in appropriate breadth and scope, to regulate CATV. We note the use of the phrase "with due regard to both the establishment and maintenance of broadcast services and the provision of multiple-reception services." We do not read this phrase as establishing public policy which is new or indeed which differs from that underlying sections 1, 303 (h) or 307 (b) of the Communications Act, the all-channel receiver legislation and the sixth report and order on television allocations and thus we do not read it as equating CATV service with television broadcast station service. It would be desirable, however, in order to avoid any possibility of ambiguity to make clear that this language is not to be construed in a manner which would change, modify, or in any way derogate from the longestablished policy under which the maintenance and development of free, local, and area television broadcast service is given first priority among the aims of regulatory efforts in this area and CATV must be treated as a supplementary and auxiliary service.

(a) The public interest and longstanding national television policy dictate that television broadcast service responsive to the particular needs and interests of the local community and area be given clear priority over service from distant stations which serve the needs and interests of distant unrelated communities and areas. Similarly, public policy dictates that the establishment and maintenance of local and area television broadcast services must be given priority over provision of multiple-reception services. The language "due regard to both the establishment and maintenance of broadcast services" and the provision of multiple reception services should not be construed as being in derogation of these policies.

(b) The longstanding policy giving priority to the maintenance and development of free television, as against television programs provided to

the public for a fee (whether by CATV or other form of pay-TV), should not in any way be diminished by the "due regard" language.

3. As phrased, section 331 (b), which generally prohibits CATV transmissions of signals other than those received "directly or indirectly" over the air from & broadcast station, is somewhat troublesome.

(a) The phrase "received directly or indirectly over the air” might be construed to permit a system to pick up a signal, tape it, and transmit it on a delayed basis. This would be tantamount to program originations by the system. Although the FCC's explanation of this provision indicates that the phrase "or indirectly" was added in order to permit microwave relay and not to permit delayed transmission, it would be appropirate to make this express by modifying this provision to read: "Community antenna transmissions shall be confined to such programs or other material as are received and simultaneously retransmitted by the system."

(b) The provision excepting the origination of program and other material where the Commission authorizes "by general rule limited exceptions to permit such transmissions without any additional charge to subscribers,” should be eliminated. CATV systems should be limited to receiving and simultaneously retransmitting broadcasts without insertions or deletions except as necessary to comply with non-duplication requirements or copyright law or other similar legal limitations. In any event, the provision is too broad and fails to identify what such "limited exceptions" would be and in what cases they would be authorized. Also, although the exception prohibits additional charges for such limited originations, it does not include a specific prohibition against the system carrying advertising with such originations. If limited originations are allowed, clearly the system should not be allowed to carry advertising when it already receives a subscription fee for its services.

4. Section 331 (c) provides that local or State governments shall not be precluded from regulating matters not directly in conflict with the Federal statute or with FCC regulations if the individual States or localities wish to do so. This provision is an effort to accommodate Federal and State regulation of CATV.

5. The Commission has made no firm recommendation as to whether CATV systems should be required to obtain the consent of the originating broadcast station before retransmitting its signal although the proposed bill would ap parently permit the Commission to establish such a requirement by regulation. A consent provision is entirely appropriate with respect to CATV systems just as regular television stations, television station satellites and translators may not now under section 325 (a) of the Communications Act rebroadcast the program of another station without its express atuhorization. However, no such requirement goes to the heart of CATV regulation and hence no such requirement should be treated as a substitute for effective comprehensive regulation of CATV by the FCC.

(The following are the recommendations of the Association of Maximum Service Telecaster, Inc., for changes in language in H.R. 13286, which they feel would specifically accomplish the suggestions made in the preceding attachment B:)

SUGGESTED CHANGES IN H.R. 13286

[New matter in italic; stricken matter in black brackets]

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 3 of the Communications Act of 1934 (47 U.S.C. 153) is amended by adding at the end thereof the following new subsection:

"(gg) 'Community antenna system' means any facility which, in whole or in part, receives directly or indirectly over the air and amplifies or otherwise modifies the signals transmitting programs broadcast by one or more broadcast stations and distributes such signals by wire or cable to subscribing members of the public who pay for such service."

SEC. 2. Part I of title III of the Communications Act of 1934 is amended by adding at the end thereof the following new section:

"COMMUNITY ANTENNA SYSTEMS

"SEC. 331. (a) The Commission shall, as the public interest, convenience or necessity requires, have authority

"(1) to issue orders, make rules and regulations, and prescribe such conditions or restrictions with respect to the construction, technical characteristics, and operation of community antenna systems, to the extent necessary to carry out the purposes of this Act, with due regard to [both] the establishment and maintenance of multiple broadcast services [and the provision of multiple reception services]; and

"(2) to make general rules exempting from regulation, in whole or in part, community antenna systems where it is determined that such regulation is unnecessary because of the [size] number or nature of the subscribers of the systems so exempted.

"(b) No community antenna system shall transmit over its system any program or other material other than that which it has received directly or indirectly over the air from a broadcast station[] and simultaneously transmitted, [except that the Commission may, upon an express finding that it would serve the public interest, authorize by general rule limited exceptions to permit such transmissions without any additional charge to subscribers.]

"(c) Nothing in this Act or any regulation promulgated hereunder shall preclude or supersede legislation relating to, or regulation of, community antenna systems by or under the authority of any State or territory, the District of Columbia, the Commonwealth of Puerto Rico or any possession of the United States except to the extent of direct conflict with the provisions of this Act or regulations promulgated hereunder."

Mr. LINDOW. My name is Lester W. Lindow, and I am executive director of the Association of Maximum Service Telecasters, an organization of over 160 television stations, UHF and VHF, commercial and educational, located throughout the United States. I have here a lengthy written statement setting forth in detail the views of MST on the issues before this committee. Attachment A is a discussion of certain of the basic considerations relating to the FCC rules on CATV. Attachment B to my written statement is an analysis of two bills that this committee is considering-H.R. 12914 and H.R. 13286. In the interest of saving time I would like to have the statement and attachments appear in the record, and I will try to highlight some of the issues as we see them.

I am accompanied this afternoon by the association's legal counsel, Mr. Ernest W. Jennes, who is here at the table with me.

I fear that in the multitude of words that has been heaped on this committee in these hearings up to now the real issues have become obscured. I should like today briefly to outline what we think are the real issues and suggest some considerations that might bear on this committee's resolution of these issues.

First, let me say that MST is not opposed to CATV. As far as I know, no broadcaster-certainly no broadcaster that has appeared before this committee-is against CATV. We believe, and I think all broadcasters would agree, that CATV can provide a valuable service and that this service helps to extend television to people throughout the country otherwise unable to obtain it because of either remoteness or unusual terrain situations.

While we do not oppose traditional CATV, we do think that a different type of CATV that is rapidly coming into being will increasingly have an adverse effect on the public interest and will undermine national policies unless CATV is subject to reasonable Federal regulation.

There are those who appear to hold that there should be no Federal regulation of CATV. Most of the CATV interests that have appeared before this committee have not supported that view, and I think I can fairly characterize that view as the extreme position.

The CATV interests have attempted to show that CATV is an important and growing element of the television broadcasting system. The FCC regulates that system in general under the mandate of the Congress. Since CATV is engaged in the further transmission and extension of broadcast signals, we think it would be unwise to withdraw CATV from the scope of the Commission's regulatory power.

So, I think this committee should have no difficulty in resolving the first real issue before it--whether the FCC should be stripped of its power to regulate CATV. We are clear that no such pruning of the Commission's regulatory authority can be justified.

The next issue for this committee is the appropriate form of regulation of CATV systems. The FCC has issued its regulations on this subject and has invited this committee to express it views on them.

Among the matters covered by the FCC rules are three matters about which I would like to comment in particular: (1) the rules require that CATV systems carry local stations; (2) they require that the programs of local stations not be duplicated on the day they are shown; and (3) they impose certain limitations on the importation of signals of distant stations by CATV.

1. To go to the first one, I know of no real dispute over the Commission's carriage rules. Most CATV interests agree that it is wrong not to carry the local stations and the majority are now in compliance with this rule. One serious problem relating to carriage is the extent of degredation of the local stations' signals on CATV, which can result in a better picture for the distant station than for the local station on the cable. Some CATV systems meet his problem by carrying the local stations on different channels, but this causes public confusion and impairs the local station's channel identity. The solution is to require CATV systems to carry the local stations on their assigned channels without degredation unless a compelling showing is made of technical unfeasibility.

2. There is fairly general agreement that a prohibition on duplication of local station programs is fair and necessary. There has been debate over whether the rule should be limited to simultaneous nonduplication as urged by some CATV interests or 15 days before and after nonduplication as urged by most broadcasters. The Commission's rule prohibits same-day duplication of local stations' programs. This gives the local stations far less protection than was originally proposed and far less than is necessary to protect their investment in nonnetwork programing. CATV interests can hardly complain about the Commission's compromise rule. The 15-day rule originally proposed by the FCC was a bare minimum and even it did not provide adequate protection for feature film and syndicated programs for which the broadcasters pay dearly.

3. The Commission's rule on importation of distant stations' signals has produced considerable debate and difference of opinion. Again the rule is far less than is necessary to protect local service the general prior hearing requirement does not apply to markets below 100;

nor does it apply beyond the grade A service area in any size market; it is subject to extremely broad "grandfather" exceptions; and it contemplates waivers of the rule under various circumstances.

These deficiencies are discussed in attachment A to my prepared testimony. I will say here in summary that the Commission's failure to extend its general prior hearing rule to markets below 100 and to the grade B of markets above 100 is a serious failing that leaves the smaller, weaker stations without sufficient protection and substantially restricts the protection to service provided in the top 100 markets. Moreover, the breadth of the grandfather exception threatens to undermine the force of the distant signal rule in many areas. And the hundreds of individual proceedings that will arise under the new rules will place serious burdens on the Commission as well as on the individual stations.

A compelling case has been made that a limit on distant signal importation is essential to the preservation of the free local and area television service. You have heard a wealth of testimony on this subject and I will not add to it.

Let me briefly consider the contentions made by CATV interests to persuade you that a distant signal limitation is not required.

We have heard from CATV interests that local television service is not impaired by the importation of distant signals-particularly where the local stations are carried on the cable. At the same time we also have heard that distant signal importation broadens the choice of stations to watch and thereby promotes diversity for the viewing public.

The CATV interests cannot have it both ways. If importation of distant station signals provides a wider choice of stations to the viewers, it must adversely affect local service by taking away part of the local stations' audience. If there are 10 or 12 stations to watch instead of 3 or 4, the 3 or 4 are going to have less viewers. And the loss of audience by those three or four local stations will mean a reduction in their advertising billings and an impairment of their ability to maintain a high-quality local and area service.

We have also heard that CATV is a boon to UHF stations, particularly those stations whose signals cannot at the moment be received in many homes that lack all-channel receivers. It is no doubt true that in the short run CATV may have this effect in some limited situations. I am thinking of areas where there has not been substantial conversion to all-channel receivers. This would not include many of the middle-sized or small markets that are served exclusively by UHF stations, because the public in those markets is generally able to receive UHF stations off the air.

But whatever help CATV is to UHF stations does not depend on CATV importation of distant signals. And the FCC rules do not stop CATV systems from broadening the markets for UHF stations within their service areas. When distant signals are involved the increase in potential audience for the local UHF station is more than offset by the fragmenting effect of importing many additional stations from far-off cities. The net result is a loss in UHF station audiences.

A few examples have been cited to this committee of areas served by both VHF and UHF stations where the signals of the UHF sta