And President Leon Papernow of H. & B. American Corp., reputed to be the biggest owner of CATV's, told his stockholders in his latest annual repor "The successful development of pay TV would carry us along in its engulfing tide and companies like H. & B. American would be among the first to take ad vantage of this vital new way of marketing entertainment." Both Mr. Shapp and Mr. Papernow are right; and both those statements re mind me of those 27 rattlesnake skins. No, ladies and gentlemen, I am not against CATV. Indeed, I owe the sacss of my first venture in television 16 years ago in large measure to the communi antenna. And today, at least one Taft television station derives about 20 perce of its audience potential through community antennas. Community antennas fill a necessary gap in the Nation's broadcast service as a supplement to broadcasting. I am not anticommunity antenna. But I am prepublic interest. And the public interest lies in preserving, expanding, and diver sifying the free competitive broadcasting service that is the envy of the rest of the world. The public interest does not lie in permitting unfettered, unbridled use of this service by any sort of wired TV service without so much as a "please," or i "thank you," or any form of payment. The objective, and result, of such mcontrolled reuse of radio and television broadcasting service will be the creation of a nationwide pay-as-you-see television and radio service by wire, which mast in turn cannibalize the public's free TV and radio service until it withers and dies. None of this has anything to do with opposition to CATV. My opposition is to the inequity of a situation in which an entrepreneur can take a product, free for the asking, which belongs to someone else, then use it to create a monopoly in the area of public communications. There is no question that Congress has jurisdiction to regulate all CATV's. CATV's are in the busness of transmitting and selling communications in interstate commerce. There is likewise no question that this jurisdiction has been passed on by Congress to the FCC under the Communications Act. The FCC has on many occasions been reluctant to exercise its jurisdiction over various areas of communications. Having been admonished by the Commerce Committees of the House and Senate on several occasions, the Commission has been understandably gun shy. However, in this case their legal right to take action was so clear they felt no need to be timid. Indeed to paraphrase Senators Pastore and Magnuson of the Senate Commerce Committee, if the FCC had any doubt about its authority to act to protect the public's free broadcasting service, then Congress should immediately pass resolutions to erase that doubt Chairman Harris of the House Committee was not so enthusiastic about the newly announced FCC proposals. In fact, the House Committee held a closed door session last week to discuss with the FCC its new rules and proposed rules, We don't know yet what are the results of these deliberations. He However, one member of the House Committee has taken me to task for suggesting that the FCC has the power to assume jurisdiction over CATV. says, in effect, that broadcasters who seek such regulation are inconsistent, because if the FCC has the power to regulate CATV's, then it should also have the power to regulate networks, and we are both opposed to the FCC's power to regulate networks. Well, this is not as difficult to answer as it sounds because there is a very real and serious distinction between FCC regulation of CATV and similar regulation of networks. Essentially, I believe, it boils down to this: A network is a program origination source whose product is disseminated entirely through regulated facilities: a CATV is (until now) an entirely unregulated facility for the distribution of programs which are the property of others, including networks. If the FCC regulates CATV's, it does nothing more than it is already doing with regard to the stations whose programs are being redistributed and the networks whose lines and relays are leased from the common carrier regulated by the FCC. Don't misunderstand me. We are no more interested than the next fellow in any extension of FCC power. What we do say, and our legal counsel has so stated formally to the FCC, is that the Communications Act (sec. 307B) already provides for the regulation of CATV's as it does the licensees like us whose regulated service is the only basis for CATV. Network facilities, that is to say their own licensed stations and their affiliated stations, and the A.T. & T. facilities which interconnect them, are already sub ject to that same regulation. But the networks' product; namely, programing, is specifically excluded from regulation by the Communications Act, and many of us feel by the first amendment as well. The kind of regulation most telecasters seek, which the FCC has adopted, and which we hope they will extend to all CATV, involves principally the matter of protection of a broadcaster from having to compete with his own programs in his own market. In addition, we believe that the unlimited use by CATV's for any purpose of any broadcast signals will choke off the further development of local television, especially UHF, and radio broadcasting as well. Really, all these questions become nearly academic if only the same law which applies to broadcasters were also applied to CATV's with regard to the pickup and rebroadcast of off-the-air signals. If, as a licensee, I do this without the permission of the station whose program I pick up, I violate the law, and I'm subject to a fine. And I agree this is as it should be. But if a CATV does the same thing to me, he gets paid for it. There is hardly any equity in this. There is actually a case on record where a television operator, with an offthe-air pickup network contract, took the baseball game of the week without permission of the originating station, since he had a network order for it. The originating station complained, and ultimately the offender paid a $250 fine. No question here. But had exactly the same thing been done in exactly the same town by a CATV operator competing with this same telecaster, then at that time the FCC would have said, "Sorry, we don't have any jurisdiction." This despite the fact that the CATV operator is making a direct charge to the public for this, in this instance, pilfered service. Thus there is only one question of major significance dividing the proregulation and the antiregulation forces in the matter of CATV: this is a matter of equity. All the broadcaster wants is a normal bit of American frontier justice-not to be shot with his own gun. In any station AM, FM, or television, the licensees are all subject to one common problem: to provide programing. No matter what sort of programs you provide, no matter what their source, no matter who is the ultimate owner, there is one common denominator: you must pay for them. You pay for programs in announcers' salaries, in free hours to networks, in direct licensing fees to film and transcription companies, or in royalties to music licensing firms even though in some instances you don't even use the music. For us there are no free programs. Now here comes a CATV operator who pays absolutely nothing for any program service he takes off the air from you. He doesn't even have to ask your permission. To the extent this CATV extends your signal to an area otherwise without service, he is a welcome appendage, and you are happy to have him carry the programs to additional audiences. But to the extent he competes with you by using the service for which you have paid to this extent, I maintain, and I think any fair-minded person should maintain, you are entitled to some kind of protection. This position is not anti-CATV. In fact it is supported by the National Community Television Association itself. There is one major difference of opinion between the broadcasters generally and the NCTA: That is the matter of extending the protection from duplication of the local broadcaster from simultaneous nonduplication to nonduplication for 15 days before and after the event. My argument is with the predators in the CATV business who press for no regulation at all, because their objective is an all pay-TV system. Every proponent of "pay-as-you-see," from the early days of Gene MacDonald's Phonevision down through the latter day Genghis Khans masquerading behind the mask of CATV, has clung to one prophecy in common: that the American people are waiting with bated breath for the marvelous new program services, public services, and cultural explosions that await them in the golden land of "pay-as-you-see." Time after time this has proved to be false. The only fellow who is waiting with bated breath is the guy who owns the coinbox. CATV equipment manufacturers are now boasting that their 12-channel systems are even now obsolescent, and that soon 30 or 40 or even 50 channels will be available to people of every city from coast to coast. These claims are perfectly true; although there is still the matter of the billions of dollars of investment necessary to wire up all the major cities. This investment virtually demands the unlimited access to free program material off the air without interference by the broadcaster or the FCC. Now I do not decry these marvelous technological breakthroughs. They are awe inspiring. But I do respectfully point out that no matter if there are a hundred channels from coast to coast, there is no amount of money and no amo! of equipment in the world that will create more talent and more quality entertainment product. Genius and creativity will continue to be among man's rarest treasures. I defy you, here in the great metropolis of Chicago, one of the cultural and entertainment centers of the world. I defy anyone in the audience to find mOTE ballets, symphonies, and living and historical excursions into the worlds of art and culture, here, live, than you can find in any given month, free, on your Chicago television stations. Throughout this discussion I have attempted to make clear that I favor regulatory protection for the public's free broadcasting service. Until recently, there have been many radio-only licensees who have watched in high glee the discomfort of their chief tormentors: the TV operators. After all, wasn't it television that created the biggest upheaval in the radio business and took most of its national advertising revenues? Not surprising that many radio licensees took the problems of their TV brethren a trifle philosophically, But let's look deeper into Milton Shapp's proposal for 40-channel CATV's in every town in the Nation. This is something of vital concern to every AM and FM licensee in the Nation not just the major market TV broadcaster. Technically feasible in every multiple-channel wire-TV system, and actually in operation in many areas in addition to distant television services, are all-classical music services, noncommercial background music channels similar to Musak. all time signal and weather report channels, and round-the-clock news service channels. One major broadcaster-CATV operator told me last week that he has such an embarrassment of riches in extra channels on one of his new systems that he is actually going to feed the market with 30 additional FM stations. And the best part of it is that up to now the operator could provide these multiple services without paying for them and without securing permission to use them. No wonder some of the CATV entrepreneurs are ecstatic. It's almost like waking up to find you are really King Midas. The key point is that, besides providing the golden touch to operators of metropolitan CATV's unlimited TV by wire must result in the fragmentizing of audiences to the point where advertising becomes either too costly or too difficult. With the economic base removed, the public will find that it has had its free television service replaced by exactly the same service on a see for a fee" basis. The $600 million a year now spent by networks for programing will seem pale by comparison with the gate receipts possible when the charges can be made on a "per program" basis. But the condition for this fantastic gold rush is the elimination of the existing local free TV service. Now let's relate all these facts to you, here in Chicago. Why should not the advertiser be happy to know that his message, picked up unrestricted by CATV's from coast to coast, will provide him with such coverage as to render unnecessary either a spot or a network purchase? If the only stations which survive this change are the giants in New York, Chicago, and Los Angeles, why doesn't this provide a more economical medium? If WGN-TV or WBKB are going to be piped into homes in Cincinnati, or Austin, Tex., or Pasadena, why doesn't this make them national media with fantastic advertising dollar potential? Well, these are perfectly good questions; and all the answers could take time for several more speeches. In the first place, if your advertising message, picked up by CATV's is carried from coast to coast, then you can expect exactly the same thing of other messages coming from other places into Chicago, Marshall Field might love the impact in Kansas City, but how are they going to feel about Macy's in Chicago? Yet even this is beside the point. Without any form of legal restriction, there is nothing to stop unlimited wire TV, in the form of CATV, from taking a Marshall Field program and deleting the Marshall Field commercials or those of Toni, of Wrigley, or Alka Seltzer, or Pure Oil, or Swift, or any others you can name. Here's another true story. And it's happening right now. One of our TV stations is in a market made up of many small towns and cities. The sales manager succeeded in getting something like five out of the six Sears, Roebuck stores in the area to agree to run the same Sears film commercial at the same time. and to share the cost. The sixth Sears manager said, "Heck no! I'm going to run my Sears film on the local CATV where I can get exposure to only my customers for a fraction of the cost." And, I might add, in such a case there is nothing in the world to stop him from running it right in the middle of "Bonanza," in place of those silly old Chevrolet commercials. Or, if he's selling bicycles, he can run that spot right in the middle of "Yogi Bear," in place of that noisy cereal commercial. You see, ladies and gentlemen, it's not CATV I am against. It's larceny. Especially when the larceny is protected by the absence of laws or regulations, but at the same time you and I are prevented from putting zippers on our pockets. The problem of figuring out what you are buying, and from whom, and where, and when, is something else again. I am quoting now from the Rate Guide and TV Station Location Guide of the Panther Valley Television Co., Inc., of Coaldale, Lansford, and Hauto, Pa. It lists nine TV channels and five FM channels in use. Numbered notes 2, 3, 4, and 5 read as follows: "New York channel 5 is received on PVTV 2 in the early morning until New York channel 11 begins telecasting. New York channel 5 is also received for a time on PVTV 5 in the late afternoon. "New York channel 9 is received on PVTV 5 at all times except in notes 2 and 4. "Philadelphia channel 10 is received on PVTV 5 in the late afternoon for the "Early Movie Show" and from 11 p.m. until "signoff" except when a baseball, football, basketball, or other sports program is telecast by New York channel 9. "Occasionally sports telecasts are "blacked out" from stations located in or near where the sports event is being held. If a station (other than those normally received over the PVTV system) telecasting the event can be received at the PVTV antenna receiving site, arrangements are made to receive it on PVTV 5 for the duration of the sports event." Is that entirely clear? Even the loss of all our advertising business-yours and mine-is only a matter of self-interest regardless how painful it might be to you and me, and perhaps 10,000 other highly skilled unemployed. But where is the public interest in all this? In the final analysis this is where the determination must be made. My good friend, Ward Quaal, who deserves every accolade he has received as an outstanding citizen of your city and my industry, has most dramatically demonstrated the public interest ramifications in the regulation of unlimited use of all broadcast programs by CATV. Ward has made WGN-TV perhaps the preeminent nonnetwork television station in the United States. His programing would add diversity and scope to the TV fare in Dayton or Duluth, Savannah or Seattle. And one CATV operator at least has planned to take his shows on microwave and cable as far away as Texas. But Ward says "No." WGN-TV is licensed-as are all licensed broadcasting stations-to its home city and to the Chicago area. Ward is in the forefront of the effort to insure that the programs of WGN-TV may not be used to form the basis of a paid service that will prevent the growth or the existence of local, free, broadcast television in other communities in other parts of the Nation. For as soon as unregulated wire TV and radio can make unrestricted use of all existing broadcast fare from coast to coast, local stations and networks will become unnecessary. And the primary declaration of Congress in the Communications Act "to provide a diverse local free broadcasting service to as many communities of the Nation as possible" will be forever frustrated. Ward Quaal knows that WGN-TV could be one of the four or five biggest profiteers of unlimited CATV. But he has chosen instead to be among the leaders of local broadcasting in the public interest who are striving to protect the people's interest in the world's most elaborate and successful broadcasting service, free of the bridles of censorship, and free of charge to the public. CATV is a legitimate, and in many areas, a necessary extension of the American broadcasting service. That the public interest in broadcasting should be protected from the abuse of CATV, as well as other forms of interstate radio and wire communications, is neither sinister nor surprising. Failure to control CATV as set forth by the recent FCC rules and proposals is to endanger the continued existence of a truly nationwide, competitive system of local radio and television stations as contemplated and prescribed by Congress for more than a generation. Anyone who tries to tell you that unlimited CATV will not result in the replacement of free broadcasting by a pay-as-you-see system speaks to you with a tongue as forked as those of 27 rattlesnakes. WNEP-TV, Wilkes-Barre, Scranton Airport, Avoca, Pa., April 14, 1966. Hon. HARLEY O. STAGGERS, DEAR MR. CHAIRMAN: I am general manager of WNFP-TV. WNEP-TV is one of the three UHF television stations now on the air in Scranton and WilkesBarre, Pa. It is an ABC-TV network affiliate and is licensed to Taft Broadcasting Co. Three witnesses at your recently concluded hearings on proposed CATV regulations (H.R. 12914 and H.R. 13268) testified at length (1) about CATV impact on local television broadcasting in the Scranton and Wilkes-Barre area; (2) about WNEP-TV; and (3) about information furnished to your committee by FCC Chairman Henry, which dealt with CATV in the Scranton and Wilkes-Barre market and which was based on data furnished by WNEP-TV. I wish to comment briefly on a few aspects of their testimony, and respectfully request that this letter be made a part of the printed record of your committee's hearings. Mr. Frank H. Nowaczek, who identified himself as the president of the Pennsylvania Community TV Antenna Association, testified before your committee or April 7, 1966 (transcript, pp. 1173-1184). He presented extensive statistics dealing primarily with coverage of the northeastern Pennsylvania area by various television stations. Mr. Nowaczek showed that several television stations placed calculated grade B signals over part of the area served by WNEP-TV. He con cluded that there are only two counties served by WNEP-TV which do not receive at least some theoretical service from another ABC-TV affiliate (transcript, p. 1179). While Mr. Nowaczek is vague as to the significance of this fact, he seems to suggest that it shows that importation of distant signals by CATV into the Scranton-Wilkes-Barre service area is not so bad because a number of the stations imported, at least in theory, get into part of that area off the air. The fact that the Scranton-Wilkes-Barre market is squeezed in between a number of stations, many of which are VHF and located in larger cities, magnifies, not diminishes, the importance to local broadcasting of prompt, effective CATV regulation by the FCC. WNEP-TV's (and the other Scranton-WilkesBarre stations) potential market is limited by off-the-air competition from surrounding stations. Further limiting caused by CATV noncarriage and duplication of the local Scranton-Wilkes-Barre stations has an even greater impact on local broadcasting in our area than it does in markets where such off-the-air overlapping does not exist. Moreover, the closeness of Scranton-Wilkes-Barre to New York City and Philadelphia makes it easy for CATV to reach out for New York City and Philadelphia stations and retransmit them into the very heart of our market. frequently even without the use of microwave. This is, in fact, what is happening. The regular function of CATV in our area was to provide service which would otherwise not be available because of mountainous terrain. But CATV has been transformed into a service which imports distant signals into our market, changing parts of our market from 3-station service to 10- or 12-station service. Mr. Nowaczek also stresses the importance of the mountainous terrain in northeastern Pennsylvania. He correctly points out that a great many persons located within the calculated grade B contour of local Scranton-Wilkes-Barre stations are unable, because of the mountains, to receive their signals, but he infers from this fact that WNEP-TV and the other Scranton-Wilkes-Barre stations are not really local stations for such persons. This is incorrect. The "localness" of a station is determined by the service it provides. News, weather. sports, and other public affairs programing provided by WNEP-TV and the other Scranton-Wilkes-Barre stations are specifically prepared for the people of northeastern Pennsylvania. The fact that a television viewer is prevented. by an interfering mountain, from receiving our local service makes that service |