broadcasters competing on an equal basis with television stations, in that such items would be able to rebroadcast network and other program fare, originate al programs, and advertise. Otherwise, CATV would have all the advantages privileges afforded television licensees but would not be subjected to the oblitions imposed on television licensees for the purpose of assuring the public erest is protected.

Also, in the event CATV systems are permitted program origination without striction, the systems should be permitted to originate only local news and ather and only if the concerned community is not served by a local television ition.

We believe that the Supreme Court decisions in such cases as National Broadsting Co. v. United States (319 U.S. 190 (1943)), regarding restrictions on free eech, give the Congress and the FCC ample authority to make such a valid striction.

B. COMMISSION'S SECOND REPORT AND ORDER

This committee's consideration of CATV legislation, of course, demands an preciation of the CATV rules the Commission has recently adopted. Although me of these rules should, in the opinion of BIC, be left to the discretion of the mmittee, their effect on the development of CATV is such that Congress may sh to make its views known by legislative enactment or legislative history. cordingly, BIC will direct its comments to (1) the discriminatory procedural ovisions of the Commission's rules as concerns television stations outside of e top 100 markets, (2) CATV service to areas within the grade B contour of levision stations located in the top 100 markets, (3) the Commission's same-day nduplication requirement, and (4) the tremendous potential of television transfor stations.

(1) The Commission's procedural rules as they apply to stations outside of the p 100 markets are arbitrary.-A serious deficiency in the CATV rules adopted · the Commission concerns the degree of protection afforded to television staons located outside of the "top 100 markets." A new procedural rule (sec. :.1007) relating to the expansion of CATV systems has placed television staons in large metropolitan areas in a position of preference when compared to ations operating in the "bottom 130 markets." Specifically, as concerns staons in the "top 100 markets," section 74.1007 requires an evidentiary hearing id places the burden of proof on any CATV system which proposes to transmit e signals of a television station into the "top 100 markets" if said station does ot place a grade B contour over the community to be served by the CATV 'stem.

Conversely, a television station located outside of the "top 100 markets" (ie. he "bottom 130") has a burden of proof and must file a petition to deny and tempt to prevent a CATV system from importing any number of distant-city gnals into the communities said station is serving. The "bottom 130 markets" > not get the same consideration. CATV must justify its entering into the op 100 markets." The poorer stations of the smallest communities face costly gal procedures to get the same protection for themselves and their communities. This discriminatory and seemingly arbitrary procedural rule will have a subantial adverse impact on both UHF and VHF television stations in the small arkets. There are approximately 200 television stations in these markets, inuding 33 UHF stations. In addition, construction permits have been granted or 13 new UHF stations and applications for over 30 new UHF stations are ending before the Commission in markets below the "top 100." The Commision, in referring to the procedural preference afforded UHF and VHF stations the large metropolitan areas, stated :

"Finally, the top 100 markets include roughly 90 percent of the television omes in this country. Our policy (i.e., selecting the top 100 markets for speial attention) therefore focuses on the critically important areas." ("Second eport and Order” in dockets Nos. 14895, 15233, and 15971. (Par. 144) 31 F.R.

540-73.)

We don't think people living in small towns should have any less consideration. We don't think a 90-percent solution is sufficient in this case.

We submit that the small markets are also critically important and need even greater degree of protection from CATV penetration because they serve marnal markets and cannot compete with the growing large CATV monopolies imorting numerous distant city signals. The effects of this procedural discriminaon will include (a) deterioration of local programing, (b) the demise of some

existing stations and (c) an indefinite freeze of the development of new UHF and VHF stations in the "bottom 130 markets." We submit that it is in the public interest to preserve and foster the development of television stations in the small markets because an important portion of the programing needs and desires of every community can only be satisfied through locally originated tele vision programs. Congress has recognized this as a national policy. It should not be changed.

It is critically important to note that this discriminatory procedural rule maș result in entire States being without any local television service. For example, there are seven States which do not have one city within the "top 100 markets" (Idaho, Nevada, Montana, North Dakota, Vermont, Hawaii, and Alaska).

(2) Protection afforded stations in larger markets. The service area of tele vision stations extends to and beyond their grade B contours. The "local pro grams" of stations are, for the most part, geared to their entire coverage area. In most instances, the programing needs, interests, and desires of those within the coverage area of a station are similar. The political, social, religious, economic, and cultural interests of each particular area are unique and are not restricted to those viewers residing within the grade A contour of the local station or stations.

The amount of public service programing presented by local stations is dependent upon their financial ability to present programs which, in turn, is dependent upon their revenue or ability to attract advertisers. To permit unlimited CATV penetration into the grade B contour of stations located in the "top 100 markets" can reduce the number of local programs geared to the particular interest of the area served. That is, penetration of CATV into the grade B contour of a television station can reduce its income because of audience fraetionalization and thereby reduce its financial ability to present public-servicetype programs.

The public need for CATV, i.e., a legitimate supplemental service to upgrade signals and reception, does not always exist in the grade B contour of a television station. It is more often beyond that contour that CATV has an important purpose coupled with the public interest.

(3) The Commission's nonduplication rules are ineffective.—The nonduplication rules adopted by the Commission in its "Second Report and Order" afford the local stations "same-day" nonduplication protection in a limited area. This protection is effectively restricted to network programing because prime time programs must be broadcast entirely within prime time. BIC is of the view this provision will prove inadequate and ineffective in that it will not achieve its purpose, which is to provide protection to local television stations. The prior 15-day nonduplication rule of the FCC ("First Report and Order" on CATV) was much more realistic.

For example. "same-day" nonduplication will not protect the local station's presentation of nonnetwork programs or feature films because such programs are infrequently scheduled on the same day by different stations. Accordingly. CATV systems could invade a small market and present a feature film the day before (and under certain circumstances, on the same day) the film would appear on the local station. A practice such as this would substantially undercut the income-producing potential of feature film programs: especially, since feature films attract the greatest advertiser revenue when they are presented to a given market for the first time.

Also, nonduplication protection which is restricted to the same day will be contrary to the policies of the Commission and the intent of Congress in the most important area of public service programing. That is, this limited restric tion which, as concerns network programs, relates only to prime time will force the local broadcasters to sacrifice public service programing during prime time out of economic necessity. Why should a broadcaster present a sustaining pub lic service program of substantial local interest. while the competing CATV system presents the deleted network program? The broadcaster will incur a loss in presenting the local public service program and will lose income because the network show is not presented by him. This is especially applicable to the small-market areas where stations are making marginal profits or, in some instances, sustaining losses with the hope to prosper in the future through sound programing practices.

BIC suggests that television stations be afforded complete nonduplication protection for at least 15 days and that CATV systems be required to justify to the FCC that it would be in the public interest to waive or shorten such a requirement.

4) Television translator stations.-Congress and this committee have been st concerned with the formulation of a national television policy. BIC is of · opinion too little attention has been paid to another supplemental television vice-television translators.

Selevision translator stations are and have been critically important in fosterthe development of UHF and VHF television and in providing a free teleion service to rural areas and other areas of poor reception. Most important, expense of providing this service is incurred by the broadcaster or indeident translator groups, including municipalities and other cooperative groups. expense is incurred by the viewer and television service is thereby not conioned upon a CATV installation fee and indefinite monthly assessments hich could be increased once the subscriber is committed). There are many ailies where a payment of even $5 or $6 per month constitutes an economic dship. In Utah, for example, an outstanding translator system has been ́eloped. It reaches many areas that cable systems eschew because of inade

ite revenue.

The Commission is beginning to appreciate the tremendous potential of transRecently completed and pending translator proceedings before the mmission include:

ors.

a) Docket No. 15858 (July 9, 1965): This proceeding amended the Commisn's translator rules to permit 100-watt VHF translators on any channel listed the Commission's table of assignments which is unoccupied by radio or teleion stations or satellites. It also permits 100-watt UHF translators on all ccupied UHF channels in the table of assignments.

(b) Docket No. 16424: This is a pending rulemaking proposal which, if opted, would permit the use of microwave frequencies to relay television proims to translators. Now, CATV systems which have an installation fee and nthly charge are permitted to utilize microwave relays. We hope this perssion will be extended to television translators.

e) The Commission's "Second Report and Order" will now require for the t time that CATV systems carry the signals of commercial and educational nslators operating in communities served by the system if they have power of watts or higher.

d) The Commission has stated that it will consider granting waivers of proions of its rules to permit the use of VHF translators by television licensees ond their grade B contours and also permit station-owned translators which I provide reception within the grade A contour of another station in order to prove the reception of said station subject to certain duplication provisions. e) In addition, the Commission recently expanded its inquiry in docket No. 29. In this proceeding, the Commission will consider whether it should per: (1) operation of nonassignment translators on all 70 UHF channels, as is w the case with the 12 VHF channels and (2) the reservation of channels 70for the exclusive use of translators.

3IC is of the opinion television translator service should be considered on least an equal basis with CATV service by this committee. Translator stans provide a free multiple television service, whereas CATV systems provide a Itiple television service for a specified consideration for an indefinite period time. We submit that the rules adopted by the Commission in its "Second port and Order" are insufficient-CATV is given an advantage under present es compared with translators. The "Second Report and Order” defers cortive action. We consider it a waste of natural resources not to use transors wherever feasible to provide free off-the-air television. We urge the Conss to express a policy in favor of at least equalization of the rules applicable translators.

STATEMENT OF GARY KENNEDY, HARVARD TOWERS, WASHINGTON, D.C.

, Gary Kennedy, and an associate, organized, controlled, and built WBUF-TV, second television station in Buffalo, NY. I am the former committeeman m the 46th district, having built a home at 417 Getzville Road, Buffalo, N.Y. e station is a success and our Barton Street studios now house channel 2. I a pioneer in the television industry, and I have a personal desire to keep it ionwide and competitive.

Community antenna services are ancillary and should be treated as such. wever, certain legislation should be enacted whereby we protect and encourage

more integration of management and control; more diversification in media and television ownership in the same market area thereby to strengthen the siners of America; more local live studio television operations which encourage the business and political life of a community; more economical use of the spectrum. so that a more competitive system may emerge.

Community antenna service or CATV at this time should not be allowed to have a deleterious effect on free and unobstructed television and develop inte a system that could be controlled or operated without local emphasis. Integration of management and control to encourage (more and more local participation i has been an objective of ours and it should continue to be.

The Communications Act of 1934 laid out the ground rules and the sixth report has been more specific in their interpretation. Now let us have a bill that could perhaps help improve more economical use of the spectrum we have to work with. The motion picture and certain other industries are "licking their chops" te beat down this bastion of America and it should be protected and fostered se that it can mature into what we all want.

Worldwide television with worldwide compatible color should be a strong for forward into more understanding and less language barriers in the future. We are blessed with the technical genius and spiritual ideals to take television to higher levels. However, we can destroy those things with equal dexterity. Prosperity is the key to sound construction of a healthy and competitive system We face not just the United States of America but with the use of Comsat world responsibility for television for all people coupled with compatible colur (homogenous) throughout the world should be encouraged.

Again, CATV is ancillary and should be subjected to minimum regulation at this point; it should be watched and kept local in its orientation and not allowed to be national in its scope ownershipwise; not allowed to smother TV as we know it today.

We should plan to economize our spectrum (NAM report June 4, 1965) to provide for four networks and condense TV to more practical terms.

The mere charging for entertainment has not enhanced the product that we have had for entertainment and free television has produced many, many fine displays of American genius.

We have the wherewithal of lift this country up, the world up, if you will. but we need more restraint, perhaps more guidance through more desirable channels to attain the goal we all aspire.

The eyes of the entire world are on us; let us begin. We can with greater diversification of media:

Limit the number of stations in the VHF (54-216 megacycles) to four, the number any one group may own or control. Again more economical use of the spectrum can promote competition in the area where it will do the country the most good. I call your attention recently to a city TV sale where the station was not even in the top few markets in the country and still sold for upward of $20 million. This is alarming.

When we consider CATV we should stop and coodinate our resources so that the very wonderful potential of TV in the courtroom where properly handled and controlled TV can give the public air of equality and justice to allow a light into an area where so few to date have bothered to acquaint themselves. A TV camera is a powerful weapon for good but it will take much to develop its potential. Let us encourage it, not restrict it or ever place a price tag on it. The free and unfettered dissemination of news and public service aspects do much to outweigh the other aspects.

In the Lindow report our progress to date has been portrayed; however, the responsibility is up to the Commission and to the broadcasters to make full intent of that original hypothesis come true.

I would like to see this done with a minimum of regulation; however. I be lieve the dissemination of news and the public impact in the years to come should determine any action.

I have interests in the motion-picture field as well as having built a pioneer station; therefore, I feel particularly well versed in parts of the phase which we are about to pursue channeling the CATV to what we want in the years to

come.

As a complement to UFH it can be an asset, and as a method to put a dozen services, including Sullivan and football, into the living room it be an asset: and as an avenue to get time, weather, entertainment, and other data 24 hours a

lay it can be an asset. However, the commercial aspects can threaten our goals and should be assessed.

We can produce plays, innocuous as they may be, from one end of Broadway vith "Guys and Dolls" to "Here's Love"; however, the play will not be able to ail itself via CATV.

In summary, I would like to see: the spectrum used with more efficiency (more advantage and usage); the diversification of station control to a greater legree (newspapers should not own a TV in the same market); more local ive studio-type stations capable of providing a finer service; more integration of management and control.

I thank you.

STATEMENT OF AMERICAN BROADCASTING COMPANIES, INC., RESPECTING

H.R. 13286

American Broadcasting Companies, Inc., (ABC) supports enactment of H.R. 13286, introduced by the Honorable Harley O. Staggers, Congressman from West Virginia. In support of this position ABC, the licensee of television stations in New York (WABC-TV), Chicago (WBKB), Detroit (WXYZ-TV), San Francisco (KGO-TV), and Los Angeles (KABC-TV), and one of the three national television networks with affiliated stations throughout the country, submits the following.

ABC has long held the view that the Federal Communications Commission has authority under provisions of the Communications Act of 1934, as amended, to adopt regulations such as those covered by the Commission's "Second Report and Order" in Docket Nos. 14895, 15233 and 15971, released March 8, 1966.1 The ABC "Petition for Commission Regulation of Carriage of Television Signals by Community Antenna Television Systems," filed October 16, 1964, initiated in substantial measure the course of pleadings and consideration of CATV impact upon free television which led to the action taken by the Commission in its "Second Report and Order." In that report and order the Commission asserted jurisdiction over all CATV systems to the extent necessary to meet the basic threat that uncontrolled CATV expansion would seriously impede the development of free television and thereby thwart the basic policies of the Communications Act. The policies recently adopted by the Commission are designed to accommodate the orderly growth of both free television and CATV, with the latter serving a supplementary role.

The Commission has provided, in essence, that CATV systems must carry stations providing a local service, i.e., stations within whose grade B contours the CATV system is located, without degradation of the station's signals and without duplication of its programing. The Commission has also limited the importation of distant signals by specifying that within the top 100 markets (i.e., markets in which the prospect for development of local stations, particularly UHF, is greatest) no CATV system may extend a station's signal beyond its grade B contour "except upon a showing made in an evidentiary hearing that such operation would be consistent with the public interest, and particularly the establishment and healthy maintenace of UHF television broadcast service" (par. 141). Consideration would be given, on an individual-case basis, to similar matters in markets other than the top 100.

In our view, reasons given by the Commission for its actions, pinpointing the public importance of local station development; the commitment of the Congress and the Commission to this objective as a matter of national policy; and the responsibilities in this area imposed upon the Commission under the Communications Act more than support the reasonableness and lawfulness of the steps taken by the Commission in its "Second Report and Order." Indeed ABC believes that the Commission also should have provided: (1) protection against duplication on CATV systems of the programs of local stations for 15 days before and after the broadcast of such programs instead of the 1-day protection provided by the Commission; (2) outright prohibition against importation of distant signals into the top 100 markets instead of providing that proposals to

1 We refer, for example, to letter dated June 3, 1965, from ABC President Leonard H. Goldensen to the Honorable Walter Rogers with respect to H.R. 7715, introduced by the Honorable Oren Harris on April 28, 1965. In that letter, we also supported the desirability of confirmatory legislation.