CATV: A REGULATORY HISTORY AND
A SURVEY OF ATTITUDES 0F COMMERCIAL
TELEVISION STATION MANAGERS

Thesis for the Degree of Ph. D.
MECHEGAN STATE UNWERSR'Y
RODERICK SAVI'D RIGHTMIRE

197 0

LIBRARY

Michigan State
University

 

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thesis entitled
CATV: A REGULATORY HISTORY AND A SURVEY

OF ATTITUDES OF COMMERCIAL TELEVISION

STATION MANAGERS
presented by

RODERICK D. RIGHTMI'RE

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of the requirements for

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ABSTRACT

CATV: A REGULATORY HISTORY AND A SURVEY OF ATTITUDES
OF COMMERCIAL TELEVISION STATION MANAGERS

BY

Roderick David Rightmire

Commercial Community Antenna Television, commonly called
CATV or Cable Television, has been in existence since 1950.
However, the place of CATV in this country's total communica-
tions system is still poorly defined. The character of CATV
has changed significantly over the years, from a small-scale,
fill-in television distribution system to a potential multi-
purpose communications service. It would appear that CATV
is in the midst of one of the most crucial periods in its
history. Although certain regulatory principles have been
established, a final decision on the apprOpriate role of cable
television is yet to be made. Regardless of what that deci-
sion may be, it will be the individual television stations
which will be affected most directly by the services which
the cable systems provide. Against this background, it was
considered important to know the attitudes of commercial
broadcasters toward the development of CATV° To accomplish

that purpose, this study was undertakeno

Roderick David Rightmire

In order to understand the context within which the
attitudes of reSpondents would be eXpressed, an account of
the regulatory history of cable television was needed. This
information, which was drawn primarily from government docu—
ments and court cases, is presented in Chapter II.

The attitude portion of the research, which is reported
in Chapters III and IV, was obtained from the reSponses to a
questionnaire which was mailed to the manager of every com—
mercial television station in the continental United States.
Of the 588 questionnaires which were sent, 258 (43.8%) were
completed and returned. Three types of information were
sought. Part I of the questionnaire asked for descriptions
of certain characteristics of individual stations and markets.
In Part II, twenty—five questions were asked in which mana-
gers were requested to indicate their attitudes toward CATV
by checking one of three prescribed reSponse categories.
Part III provided for expanded Opinions regarding Specific
CATV problems through replies to Open-ended questions. The
responses to the questions in Part II were broken out sepa—
rately and compared among the various descriptive categories
in Part I.

The results of the study indicated clearly that a ma-
jority of the commercial television station managers who
participated in the survey had what must be classified as a
consistently negative, or pessimistic, attitude toward the

deve10pment of community antenna television. Three groups

Roderick David Rightmire

were more favorable than others toward CATV: (1) managers
who were involved financially in cable television, (2) Opera-
tors of stations in the tOp 25 markets, and (5) managers of
independent stations. However, most managers reSponded in

a manner which indicated their concern that CATV should not
upset our present system Of broadcasting or adversely affect
the welfare of the individual stations which compose that
system.

While the Opportunity was made available in the question-
naire for respondents to provide insight into the future of
CATV, most managers replied to the questions in light of
current situations. In general, they were either unable or
unwilling to consider alternative circumstances in which their
stations might be able to provide comparable or better tele-
vision service. The perception by the station Operators of
a competitive relationship between CATV and the television
industry was evident throughout the study. For instance, over
one-fifth of the responses to an Open—ended question in Part
III Of the questionnaire indicated that CATV could provide
99 local service which was not feasible over a regular broad-
cast TV channel.

Several conclusions, which have implications for the
future of CATV, were suggested by the research and are
reported in the final chapter together with recommendations

for further study. It is hoped that additional research

Roderick David Rightmire

will be completed in order to provide information which is
needed to develop and build an efficient and effective

national communications system.

CATV: A REGULATORY HISTORY AND A SURVEY OF ATTITUDES

OF COMMERCIAL TELEVISION STATION MANAGERS

BY

Roderick David Rightmire

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree Of

DOCTOR OF PHILOSOPHY

Department of Speech

1970

p>,COpyright by
RODERI CK DAVID RI GHTMIRE

1970

ii

Accepted by the faculties of the Department Of Speech
and Television—Radio, College of Communication Arts,
Michigan State University, in partial fulfillment of the

requirements for the Doctor of PhilOSOphy degree.

Di§ector of ThESis \

 

Guidance Committee: Kenneth G. Hance, Chairman
Leo A. Martin
Winston R. Oberg
Arthur F. Weld

iii

ACKNOWLEDGMENTS

Sincere appreciation is expressed to each member of my
guidance committee. Dr. Kenneth Hance, Department of Speech,
Professor Leo Martin, Department of Television and Radio,

Dr. Winston Oberg, Department of Management, and Professor
Arthur Weld, Department of Television and Radio, contributed
valuable assistance in every phase of the preparation Of the
research and the writing of the final document.

Special thanks go to Dr. Hance, my committee chairman
and major professor. NO teacher is more dedicated to serving
the needs Of the individual student.

Any expression of appreciation to Professor Martin would
be inadequate. He has been teacher, colleague and friend,
and his contribution to this study was but a small part of
the assistance and inSpiration which he has provided over the
years.

Of course, none Of this would have been possible without
the understanding, encouragement and patience of my wife,
Nancy. And to Mark, Judy and Janice, thanks; I know it was

difficult to understand.

iv

TABLE OF CONTENTS

CHAPTER

I.

II.

III.

IV.

V.

INTRODUCTION . . . . . . . . . . . . . . . .

CATV: A Brief Description. . . . . . . .
Statement Of the Problem. . . . . . . . .
Limitations Imposed . . . . . . . . . . .
Significance and Justification Of Research
Methods Of Research . . . . . . . . . . .
Definition Of Terms . . . . . . . . . . .
Citation Style in Footnotes and Bibli-
ography. . . . . . . . . . . . . . . .

THE DEVELOPMENT OF REGULATION OF COMMUNITY
ANTENNA TELEVISION OF THE UNITED STATES .

REPORT OF FINDINGS FROM PARTS I AND II OF
"A SURVEY OF THE ATTITUDES OF COMMERCIAL
TELEVISION STATION MANAGERS TOWARD CATV".

Rationale for Survey. . . . . . . . . . .
Procedure Used in Obtaining Respondent
Replies. . . . . . . . . . . . . . . .
Questionnaire Returns . . . . . . . . . .
Report of Survey: Part I . . . . . . . .
Report of Survey: Part II. . . . . . . .
Summary . . . . . . . . . . . . . . . . .

REPORT OF FINDINGS FROM PART III OF "A SURVEY

OF THE ATTITUDES OF COMMERCIAL TELEVISION
STATION MANAGERS TOWARD CATV" . . . . . .

Rationale for Part III of Survey. . . . .
Report of Survey: Part III . . . . . . .
Summary . . . . . . . . . . . . . . . . .

SUMMARY AND CONCLUSIONS. . . . . . . . . . .

Summary . . . . . . . . . . . . . . . . .

Page

H
omqqp H

12

14

44
44
45
47
47

112

115

115
115

158
140

140

TABLE OF CONTENTS--continued

CHAPTER

Conclusions . . . . . . . . . . . . . .
Recommendations for Further Research. .
BIBLIOGRAPHY. . . . . . . . . . . . . . . . . . .
APPENDICES. . . . . . . . . . . . . . . . . . . .
A. "NAB-NCTA PrOposed Compromise". . . . .

B. Survey Materials (Samples of Originals)

vi

Page

142
148

153
159
159
165

CHAPTER I

INTRODUCTION

CATV: A Brief Description

Community Antenna Television, commonly called CATV or
Cable Television, is believed to have started on an experi-
mental basis at Astoria, Oregon, in 1949. One year later,
in October, 1950, the first commercial system went into

1

Operation at Lansford, Pennsylvania. Modest initial growth

Of the cable industry is indicated by the fact that in 1952

2 most

only seventy systems were serving 14,000 subscribers,
Of whom lived in small communities in remote geographical
areas where normal television reception was either poor or
non-existent. As CATV technology improved, and as more
businessmen realized the potential profit in cable service,

the industry grew dramatically. By January 1, 1954, 500

cable systems were providing signals to 65,000 homes, and

 

1U. 8., Federal Communications Commission, Slst Annual
Report for the Fiscal Year 1965 (Washington, D.C.: Govern-
ment Printing Office, 1965), p. 78.

 

2CATV and Station Coverage Atlas (Washington, D.C.:
Television Digest, Inc., 1969), p. 4a.

seven years later, in 1961, 700 CATV Operations claimed
725,000 subscribers. As of February 7, 1969, 2,500 systems
were providing television antenna service tO more than
5,600,000 subscribers.3

The basic principle of CATV is simple. The signal which
is transmitted from a television station has "line-of—sight"
characteristics. That is, if Obstructions, such as mountains
or groups of tall buildings, are between the station and the
receiver, the signal will be blocked or reflected and will
not reach the TV set with acceptable quality. A simple cable
television system eliminates this problem by placing a highly
sensitive receiving antenna on the highest point in the area,
Often a tower which has been built for the purpose. The sig-
nals which are picked up on this master antenna are then
amplified and fed through wires which usually are attached to
utility poles in the community. An individual connection,
or "drop", is installed at the home of each subscriber.
These wires come into the house in much the same manner as
telephone lines. A small outlet is placed on the wall to
which a wire is connected from the television set. This instal-
lation then replaces the individual antenna which had been
used previously.

There are usually two charges for CATV service. The

first is a one-time installation fee, between ten and twenty

 

31bid.

dollars. After the initial connection has been made, each
subscriber pays a monthly charge of about five dollars.

Of course, specific amounts vary among systems, but these
fees represent typical charges.4

Reference was made earlier to the fact that the "simple
cable system" utilizes a master antenna at a favorable loca-
tion in or near the community. Some systems find this method
inadequate because they are too far from some stations to
receive direct Off-the-air signals or their subscribers may
desire a greater variety of stations than can be supplied by
such a CATV facility. To overcome these reception problems,
some cable systems extend the reach of distant stations by
amplifying television signals and relaying them to the master
receiving site. Subscribers to these systems are provided
with a greater choice of television stations than would ever
be possible otherwise.

The early cable services were limited to a maximum of
five channels and the latest available information indicates
that 572 systems still provide five, or fewer, television
signals.5 Early improvement in technology, however, permitted
twelve channels in 1955; and today systems with a capacity

for twenty different signals are being installed.6 As Of

 

4Ralph Lee Smith, "The Battle Over Cable TV," The New
York Times Magazine, May 26, 1968, p. 55.

5CATV Atlas, p. 4a.

6Smith, "The Battle," p. 57.

February 7, 1969, 1,559 cable systems provided between six
and twelve channels; and 29 systems had over twelve signals
available for their subscribers.7

Even though the growth of cable has been rapid and
dramatic, it should be pointed out that most of the systems
serve relatively few people. Over half Of the CATV facili-
ties which are currently in operation have fewer than 1,000
subscribers per system. Only six percent have more than
5,000 homes connected; and the largest CATV operation in the
country, in San Diego, California, has 55,429 subscribers.8
This compares with a total Of 570,000 available television
homes in the San Diego metropolitan market area.9 Nationally,
approximately 6.4% of the television homes are connected to
CATV.1°

Although the size of individual cable communities may
vary greatly, it has been necessary to locate CATV in areas
where there are population concentrations. The distribution
of television to rural areas by cable has proved to be pro-
hibitive from the standpoint of both cost and efficiency.

However, it seems inevitable that CATV technology, which has

 

7CATV Atlas, p. 4a.
8Ibid.

9"Television Household Data," Spot Television Rates and
Data, LI (September 15, 1969), 77.

 

10Compiled from information in CATV Atlas, p. 4a, and
Spot Television Rates and Data, p. 26.

 

advanced so far in such a short time, will ultimately solve
this problem.

Another important aspect of community antenna television
concerns the cross-ownership patterns between CATV and re-
lated industries. 0f the 2,500 cable systems which were
Operating as Of February 7, 1969, 6.5% were owned by telephone
companies and 9.6% by neWSpaper and publishing interests.

In View of the fact that the responses to the attitude survey
which is reported in subsequent chapters were obtained from
managers Of commercial television stations, it is particularly
significant to note that 52.2% of the CATV services were owned
by broadcasters.ll

Although variety of television station signals and im-
proved quality of reception, particularly color, are the
primary reasons for the success of cable television, supple-
mentary originations by the systems themselves provide
services which also are attractive to subscribers. For many
years, CATV has programmed automated services such as time
and weather information or pictures of wire service news
teletypes or stock tickers. More recently, cable channels
have presented local originations such as live news and
sports, public service programs, and film. These services
are provided on separate channels on the subscriber's set,

just as a television station is given a channel allocation.

 

11CATV Atlas, p. 4a.

 

A total of 885 of the existing systems provide some sort of
CATV origination. Of these, 825 have automated services,
the most common Of which is a time and weather channel; and
282 present non-automated local originations. Another 156
systems say that they plan some sort of origination in the
future.12

While it is believed by many peOple that most cable
television systems have not begun to provide the variety of
services which will be available in the future, the 1969
Broadcastinngearbook reports that the so-called future may
have arrived in some communities.

In Olean, N. Y., a closed-circuit TV surveillance
system, under the control of the city's police depart-
ment, was set up by the local CATV to monitor Olean's
main business district 24 hours a day. In California
a marketing firm tested a computerized device that
reportedly provided 100% read-out as to what and when
cable subscribers are viewing.

Subscribers to the Valley Vision Cable Television
in Placerville, Calif., received via CATV a televised
local daily newspaper. And in Colorado Springs, a
cable system was being installed with two-way communi-
cation facilities in preparation for the day when that
CATV will Offer extra services for computers, fascimile
newspapers and data retrieval}3
One of the reasons that CATV has not made greater strides

in local origination may be the regulatory uncertainty which

has been generated by the Federal Communications Commission

and by some state governments. As cable television has

 

12Ibid.

l3"1969 Promises More CATV," Broadcasting Yearbook
(Washington, D.C.: Broadcasting Publications, Inc., 1969),
p. 24.

 

develOped, the FCC has gradually altered its views with re-
gard to its role in regulating the new industry. The result
has been confusion on the part of the CATV Operator as well

as the television broadcaster.

Statement Of the Problem

 

The research which is reported in this study is in two
parts: (1) a compilation Of the regulatory history of
Community Antenna Television in the United States, and
(2) a survey of the attitudes of all commercial television
station managers toward the present status and future expan-
sion of CATV, with particular emphasis upon the potential

effects of current and proposed regulations.

Limitations Imposed

Many facets of Community Antenna Television need and
deserve thorough investigation. However, limitations imposed
by lack Of time and financial resources dictated that this
study should be narrow in scope and specific in its objec-
tives. It is hOped that the research which is reported
herein can be combined with other sources in providing infor-
mation which will be useful in the deve10pment of an efficient
and effective national communications system.

An attempt was made to limit the investigation of cable

television to the following:

1. Writings by scholars, critics, and practitioners
on the matter Of the regulatory aspects of CATV and
the industry's relationship to television broad-
casting.

2. Key decisions and statements from the Federal Com-
munications Commission relative to its role in CATV
regulation.

5. Key court cases which have resolved important issues
related to cable television and/or which have estab-
lished precedent for future deve10pment.

4. The results Of an attitude questionnaire which was

sent to the manager of every commercial television
station in the continental United States.

Significance and Justification of Research

As indicated earlier, commercial Community Antenna Tele—
vision has been in existence since 1950. However, the place
of cable in this country's total communications system is still
poorly defined. The character of CATV has changed signifi-
cantly over the years, from a small-scale, fill-in television
distribution system to a potential multi-purpose communica-
tions service. Therefore, it would appear that CATV is in the
midst Of the most crucial period in its history. Although
certain regulatory principles have been established, a final
decision on the apprOpriate role of cable television is yet
to be made. Its current status has been summarized in the
1969 Broadcasting Yearbook, which cited an independent study
that had been prepared by Drexel Harriman Ripley, Incorpor-

ated, a Philadelphia institutional research firm:

Terming the industry "a powerful new force in com-
munications" the firm said CATV challenged present
institutions by effecting in time a subordinate communi-
cations for the telephone in the home, affecting broad-
casting and network programming, changing politics,
and, "if advertising is permitted," changing retailing.
"The key to the growth rate of cable communications
is the legislative and regulatory climate," the firm
said. "Regardless of the climate, CATV, we believe, is
an inexorable force. It is a service that the public
wants, needs, and in time demands."l4
Against this background, it is important to know the
attitudes of commercial broadcasters toward the development
Of cable. To accomplish that purpose, this attitude study
was undertaken.

In order to understand the context within which answers
would be given, an account of the regulatory history of CATV
was needed. One such history had been published in TV and

D C 1
CommunicationS‘s

in 1965, but that was prior to the release
of the FCC's first comprehensive cable television rules on
March 4, 1966.1"8 The accounts of the events which have had
great effect upon the industry since that date have not been
compiled and are available only in such publications as docu-
ments, yearbooks, and trade publications. Therefore, the
documentation Of the development of CATV which is reported in

this study is believed to be the only current history of the

regulatory aSpects of cable television.

 

14Ibid., p. 23.

15Robert D. L'Heureux, "The CATV Industry: Its History,
Nature and SCOpe" (Parts I, II, III, IV, v, VI), TV and Com-
munications, II (May, June, July, August, September and
October, 1965).

16Second Report and Order, 2 FCC 2d 745-746 (1966).

10

NO evidence has been found which would indicate that any-
one has attempted to survey the attitudes of commercial
managers toward existing and projected effects of CATV on the
television industry. However, it is the individual television
station which is most directly affected by the services which
the cable system provides. In many cases, signals are ex-
tended so that a station's audience is increased significantly.
On the other hand, CATV may cause audience fragmentation which
has an adverse effect on the station's competitive position.
Also, ownership patterns provide an interesting dilemma.

A broadcaster who is financially involved in cable is likely
to perceive the problems Of CATV much differently than is a
manager who does not own a cable system.

It is hOped that the documentation of the regulatory
history of cable television, together with a report and analy-
sis of the responses to the attitude survey, will provide
insight into the problems which must be faced in assuring
future success of any communications system which may be

created.

Methods of Research

Three distinct methods of research were employed in the
process Of gathering and presenting the information in this
study.

Chapter II is based completely upon the historical ap-

proach. It was necessary to review journals, trade

11

publications, books, periodicals, government documents, and
court cases in an effort to identify significant events in
the growth and development of community antenna television.
The survey method of research was used in order to
gather the material for Chapters III and IV. A mail question-
naire was sent to every commercial television station manager
in the continental United States. Three types of information
were sought: (1) descriptions of certain characteristics of
individual stations and markets, (2) attitudes toward CATV as
expressed by checking prescribed reSponse categories, and
(5) expanded Opinions regarding specific CATV problems through
replies to Open-ended questions.
The critical approach to research was employed in Chapter
V and to a lesser extent in portions of the other chapters.
This was done in an attempt to evaluate the historical and
attitude information which had been reported earlier. Also
in Chapter V are recommendations for further research in the

general area Of Community Antenna Television.

Definition of Terms

 

CommunityiAntenna Television.--This term, and the two
synonymous terms, CATV and Cable Television, mean:

. . . any facility which, in whole or in part,
receives directly or indirectly over the air and ampli-
fies Or otherwise modifies the signals transmitting
programs broadcast by one or more television stations
and distributes such signals by wire or cable to sub-
scribing members Of the public who pay for such service,
but such term shall not include (1) any such facility

12

which serves fewer than 50 subscribers, or (2) any such

facility which serves only the residents of one or more

apartment dwellings under common ownership, control, or
management, and commercial establishments located on the
premises of such an apartment house.17

Grade A and Grade B Contours.--These terms refer to the
measurement of two field intensity contours Of a television
station which ". . . indicate the approximate extent of
coverage over average terrain in the absence of interference
from other television stations."18 Within the Grade A contour
is the primary coverage area of a station. The Grade B con-
tour designates the secondary coverage area, where reception
is possible but not dependable.

Distant Signal.--"The term 'distant signal' or distant
station means the signal of a television broadcast station
which is extended or received beyond the Grade B contour of
that station."19

Importation.--This term refers to the process of extend-

ing the signal of a television broadcast station beyond its

Grade B contour.

Citation Style in Footnotes and Bibliography

The accepted style of legal citation is used in this

study. Full titles of the references which are cited in

 

170. S.,Code Of Federal Regulations, Title 47, Part 74,
Subpart K, 1969, p. 574.

lslbig.. Part 75, pp. 240-241.

19Ibid., Part 74, p. 574.

15

this manner are listed below, with appropriate abbreviations
in parentheses:

Federal Communications Commission Reports, 1st Series
(FCC): 2nd Series (FCC 2d). This is the Official publica-
tion of decisions and notices by the FCC.

Federal Reporter, lst Series (F.); 2nd Series (F. 2d).
This is the official report of cases which are decided in
the United States Courts of Appeals.

Federal Supplement (F. Supp.). This publication reports
decisions from the United States District Courts.

Pike and Fischer Rules and Regulations, 1st Series
(RR); 2nd Series (RR 2d). This publication reports all cur-
rent activity Of the Federal Communications Commission and
compiles, annotates and up-dates FCC Rules and Regulations.

United States Reports (U.S.). This is the Official
publication Of the decisions of the United States Supreme
Court.

When a legal citation is used in a footnote, the number
preceding the abbreviation indicates the volume; and the
number following refers to the page which is being cited.

An item in a bibliography is similar except that the number
following the abbreviation indicates the first page of the

reference.

CHAPTER II

/ THE DEVELOPMENT OF REGULATION OF COMMUNITY

ANTENNA TELEVISION OF THE UNITED STATES

The early development of community antenna television
in the United States created little need for federal regu-
lation. The systems which were established served to
provide television signals to areas where normal reception
was "(1) non-existent, (2) of unsatisfactory quality, or
(5) possible only with the aid of costly . . . antennas."1
The result, therefore, was an increase in potential audience,
a situation which pleased the Federal Communications Commis-
sion, as well as television station Operators.

In recent years, however, that small supplementary-
service function which characterized early CATV has changed
dramatically, thus creating many previously unforeseen prob-
lems. In 1966, the FCC enumerated some of them: (1) CATV
had expanded into areas which already received satisfactory
television signals. (2) The local audience had been frag-

mented; while the CATV system had many channels available,

 

1Robert D. L'Heureux, "The CATV Industry: Its History,
Nature and Scope" (Part I), TV and Communications, II (May,

14

15

the TV station had only one. (5) Some CATV systems had not
carried local channels, thus eliminating those stations from
the choices available to a subscriber and denying the local
station an important potential audience. (4) Some cable
systems were carrying signals which duplicated local station
programming, thus eliminating, in part, the need for the
local service. (5) Although a great variety of service had
been made available to subscribers through the cable, not
everyone was willing to pay for CATV. (6) Rural areas would
be denied a variety-service because CATV had not proved to be
economically feasible outside areas with a moderate degree of
pOpulation concentration. (7) Given the possibility of the
preceding two problem areas, many peOple would be deprived
Of television service if local stations were forced off the
air. (8) CATV was also looked upon as a threat to the build-
ing, and successful Operation, Of new UHF television stations
which must rely upon the audience's desire for increased
local programming service.2
In Spite Of the problems which CATV presented, the FCC
recognized that cable systems were providing important addi-
tional services to television viewers throughout the country.
However, the Commission also concluded that CATV needed to
be encouraged to develop in an "orderly manner so that its

effects would be to provide a supplementary service without

 

2U. 8., Federal Communications Commission, 52nd Annual
Report for the Fiscal Year 1966 (Washington, D.C.: Govern-
ment Printing Office, 1966T, pp. 85-86.

16

having a serious adverse impact on free TV."3 It had taken
sixteen years, since that first commercial system had begun
in Lansford, Pennsylvania, for the CATV industry to develop
to the point where the Federal Communications Commission felt
compelled to state, "In order to preserve off—the-air TV,
regulation of CATV was clearly indicated."4

In 1966, the FCC assumed full jurisdiction over all
Community Antenna Television. That action--like all preced-
ing regulation--was not precipitous. It had evolved slowly
from the relationships and conflicts which had developed be-
tween television stations and CATV systems. In fact, each
step in the regulatory process seemed to represent a direct
and studied response to a clearly defined need.

The first regulation which affected Community Antenna
Television had been adopted in 1956 with an amendment to
Part 15 of the FCC Rules and Regulations governing "Incidental
and Restricted Radiation Devices." This was the outgrowth of
a First Report and Order in which the Commission had stated
a few months earlier:

It is well established that radio communications can

produce satisfactory results and be effective only so

long as the desired signal is strong enough to override

the interference that may be present at the receiver.

. . . This area of regulation is becoming ever more

important as the use of the radio Spectrum for communi-

cations exPands, . . . and as the number of non-radio
devices producing radiation keeps growing.5

 

31bid., p. 86.
4Ibid.

5U. 8., Federal Register, XX, No. 252, Dec. 29, 1955,
10056.

17

The Second Report and Order, adOpted July 11, 1956,
applied the earlier rule-making directly to Community Antenna
Television Systems. It said:

Due to the loss of energy occurring in the cable [con-

necting the master receiving antenna with the sets of

the subscribers], it is necessary to provide amplifiers
at regular intervals along the cable. . . . It is
inevitable that there is some radiation from the CATV
system and this radiation may produce interference to
the reception of the direct signal by non-subscribers
to the CATV system, some of whom have installed their
own antenna systems and boosters or amplifiers to pro—
vide for the direct reception Of weak signals.6

The result was the application of engineering standards
which prescribed the limits Of incidental radiation applic-
able to CATV systems. The rules also required that systems
should be constructed to meet the standards and that the sys-
tems must be prepared to demOnstrate compliance with the
regulations. A time limit was established within which com-
pliance was to be completed.7

The next several years are best characterized as those
in which the FCC absolved itself Of additional jurisdiction
in the area Of CATV.

Some pressure was exerted on the Commission to declare
cable television a common carrier and thus assume regula-
tory power under existing rules. However, in Frontier

Broadcasting Company 3, Collier, on April 2, 1958, the Com-

mission ruled:

 

6Ibid., XXI, NO. 158, July 18, 1956, 5566.

7Ibid.

18

A community antenna television system Operator is
not a common carrier . . . mainly because the Operator
and not the individual subscriber has the ultimate con-
trol Of the type of intelligence transmitted over the
system, whereas in the case of ordinary communications
common carrier, . . . the choice of the Specific intel-
ligence to be transmitted is the sole responsibility
of the subscriber and not the carrier.8

One year later, on April 14, 1959, the FCC released a
Report and Order titled, "In the Matter Of Inquiry Into the
Impact of Community Antenna Systems, TV Translators, TV
'Satellite' Stations, and TV 'Repeaters' on the Orderly
DevelOpment of Television Broadcasting." In this document,
consideration was given to four possible bases of jurisdic-
tion over CATV:

(a) Regulation of CATV'S as common carriers under
title II of the Communications Act. Parties so arguing
would have us reverse our decision in Frontier Broad-
casting Company y, Collier, 16 R.R. 1005 (April 1958),

supra .

(b) Authority over CATV'S as broadcasting stations
or, at least, engaged in broadcasting, based on the
definitions of "radio communication," "broadcasting"
and "broadcast station" contained in subsections (b),
(O), and (cc) Of section 5 of the act.

(c) Jurisdiction over CATV'S as a significant part
Of the communications industry, which the Commission
has "plenary power" to regulate; or, as enterprises hav-
ing a substantial (adverse) impact upon broadcasting
activities which the Commission does regulate and upon
the mandate of section 1 and section 507(b) of the act.

(d) It is contended that section 525(a) applies to
CATV'S as well as to broadcasting stations, so that they
are required to secure the consent of the originating
stations whose signals they carry: or, if CATV'S are not
literally within the scope of that section, the same
"prOperty right" principle applies in their case and the

 

8Frontier Broadcasting Co., 16 RR 1005 (1958).

19

Commission should by rule affirm it. Under either

theory, it is argued, CATV'S could be compelled, by

cease-and-desist order under section 512(a), to comply

with this requirement.9

The Commission concluded that the fact that CATV may be
involved in broadcasting did not Of itself permit further
regulation Of cable systems. The report said, "In sum, . . .
we find no present basis for asserting jurisdiction or
authority over CATV'S, except as we already regulate them
under part 15 of our rules with respect to their radiation
of energy."10

Although the FCC refused to assume control of cable tele-
vision in 1959, the need for federal regulation was recog-
nized. However, the Commission said that legislation was
first required to change the Communications Act Q£_19§4.
The recommendations which were sent to Congress stated that
"CATV systems should be required to obtain consent of the
stations whose signals they transmit and that they should be
required to carry the signal of the local station (without
degrading it) if the local station so requests.“;l Neither
this nor similar legislation which was prOposed in subsequent

years ever became law}2

 

9Report and Order, 26 FCC 427 (1959).

10M” p. 451.

”1110.12” p. 441.

12U. 8., Federal Communications Commission, 51st Annual

Report for the Fiscal Year 1965 (Washington, D.C.: Govern-
ment Printing Office, 1965), pp. 80-81.

20

It was indicated earlier that the FCC's assumption of
regulatory control of CATV was slow and evolutionary in
nature. However, one decision stands out above all others
in signifying an important turning point in the Commission's
thinking. In response to a CATV application from the Carter
Mountain Transmission Corporation for a license to install
microwave radio relay facilities on COpper Mountain, Wyoming,
the Commission found that CATV service had already decreased
the revenues of KWRB-TV in two of four principal towns in
the station's service area. Further, it found that extension
Of cable service by Carter Mountain into the other two com-
munities could put KWRB-TV out of business. If the station
were to go Off the air, it was determined that a large part
of northwestern wyoming would be denied local television
service and that surrounding rural areas would be unable to
receive any TV signal.13

In denying the Carter Mountain application, the FCC
said that:

Licenses are granted by the Commission only if the
Operations prOposed are found to be in the public inter-
est, convenience, and necessity. Hence, when the
impact of economic injury is such as to adversely af-
fect the public interest, it is not only within our
power, but it is our duty to determine the ultimate

effect, study the facts, and act in a manner most ad-
vantageous to the public.14

 

13Carter Mountain Transmission Corp., 52 FCC 462-464
(1962).

14Ibid., p. 464.

21

The Commission did not assume direct control Of CATV
in this decision, but it did recognize the potential effects
which cable television might have upon individual stations.
The fact that this was a clear change in policy was evident
in the statement, "To the extent that this decision departs
from our views in the report and order . . . , 26 FCC 405
(released April 14, 1969), those views are modified."15
On May 25, 1965, the United States Court of Appeals,
District of Columbia, Upheld the FCC Carter Mountain decision.
The court said, in part:
It may be assumed that any denial Of a license to
transmit radio or television programs keeps off the
air, and hence deprives the public Of, the material
which the applicant desires to communicate. But that
does not mean that the Commission must grant every
license which is requested. Nor does it mean that the
whole statutory system of regulation is invalid. Quite
to the contrary is true: a denial of a station license,
validly made because the standard of "public interest,
convenience, or necessity" has not been met, is not a
denial of free Speech.16
The FCC's authority in this matter was finally deter-
mined when the Carter Mountain appeal resulted in a denial
Of certiorari by the United States Supreme Court on December
16, 1963.17

The reason this case can be classified as a turning

point with regard to the FCC's jurisdiction over CATV is that

 

15Ibid., p. 465.

16Carter Mountain Transmission Corp. v. FCC, 521 F. 2d
564 (D.C. 1965).

17Carter Mountain Transmission Corp. v. FCC, 575 U.S.
951 (1965).

22

it provided the general philosophy for a First Report and
Order which was adOpted April 22, 19650 Included in the
document were provisions for regulation of all CATV systems
which relied upon microwave service. At this time, however,
no cable system which provided only those signals which it
could receive and distribute without benefit of microwave
relay would come under the new regulation.

The rules which were adopted required microwave-served
CATV systems to: (1) carry all local television stations,
upon request of the individual station, (2) carry the local
signals without material degradation Of quality, and (5) re-
frain from "duplicating the programs of local commercial
stations, either simultaneously or within 15 days before or

after local broadcast.“8

The third regulation was based
upon the fact that CATV does not have to bid for programs
which are a part of a station's regular program schedule.
Therefore, the FCC considered that the importation of dupli-
cate programming into a market was unfair competition for
the local TV station.lg

In a Second Report and Order, which was adopted on March
4, 1966, the FCC, without benefit Of any Of the congressional
legislation which it had sought over the years, asserted

jurisdiction over all CATV, microwave and non-microwave. The

reason which was given was that continued growth of CATV

 

18Rules re Microwave-Served CATV, 58 FCC 685 (1965).

l91bid., pp. 704-705.

25

threatened to impede realization of the Commission's TV

assignment plan, particularly with regard to the develop-

ment Of local UHF stations.2O
Upon issuance Of the Report and Order, the regulations

became Subpart K of Part 74, Title 47, of the Code of Federal

Regglations. The major provisions called for the following:

 

1. CATV systems were required to carry, without material
degradation, "all commercial and non-commercial educational
stations within whose Grade B contours the system or the com-
munity Of the system is located. . . .” In cases of insuf-
ficient CATV channel capacity, priorities were assigned to
determine which stations would be carried.21

2. NondUplication protection of the programming of a
local station was changed from the fifteen days Of the First
Report to same-day protection. Certain exceptions were cited,
including a provision for permission to carry an imported
program in color if the local signal would be black and
white.22

5. All CATV systems were required to notify local sta-
tions, as well as the FCC, whenever they prOposed to import

new distant signals or to extend service into a new area.23

 

2°Second Report and Order, 2 FCC 2d 745-746 (1966).

21U. 8., Code of Federal Regulations, Title 47, Part 74,
Subpart K, 1969, pp. 574-575.

221bid., pp. 575-576.

231bid., pp. 576-577.

24

4. CATV systems which Operated within the Grade A con-
tour of a TV station in the one hundred largest television
markets were prohibited from extending any TV signal beyond
the Grade B contour of a station without approval from the
FCC. This provision did not apply to systems which were
already supplying such service, but expansion Of service by
existing systems was covered by the new regulation.24

Most CATV Operators probably eXpected rules similar to
the first three; but the last one, the importation rule,
caused them much distress. Midwest Television, Incorporated
(KFMB-TV), in San Diego, California, presented what the
Federal Communications Commission called "a classic case for
a hearing with respect to the general issues of expansion of
respondents' CATV systems throughout the San Diego market

area."25

Several CATV systems, particularly Mission Cable TV,
Incorporated, and Southwestern Cable Company, had been in-
creasing their service in the area, and, in so doing, were
importing several Los Angeles television stations. Therefore,
the Commission ruled that a hearing would be held to deter-
mine whether this CATV eXpansion was consistent with the
public interest of the viewers in San Diego. Other issues
also dictated the need for a hearing:

For instance, there is disagreement as to whether some

of respondents' systems are Operating within the pre-

dicted grade A contour Of KFMB-TV; there is controversy
as to whether some of the reSpondents' systems operate

 

24Ibidn pp. 577-578.

25Midwest Television, Inc., 4 FCC 2d 620 (1966) .

25

within the grade B contour of some of the Los Angeles
stations carried on the system . . . ; there is a
serious question as to whether respondents' systems
degrade the San Diego signals carried and particularly
the signals of KFMB-TV; the degree of CATV penetration
Of the market is contested; and, Of course, there is
controversy as to whether carriage on the systems will
help or hurt new or prospective UHF stations in San
Diego. These issues are all particularly apprOpriate
for resolution in an evidentiary hearing.28

The result Of this hearing was clear evidence that the
Commission intended to enforce strongly its CATV regulations.
Although the initial decision of the hearing examiner found
no reason to restrict cable deve10pments in San Diego,27 the
Commission as a whole felt otherwise. On June 26, 1968, the
decision which was adopted said, "It is the effect of un-
limited CATV eXpansion on prOposed or potential service by

independent UHF stations in San Diego with which we are

principally concerned."28

The decision went on to say:

We emphasize in this connection that our goal is
not to deprive the San Diego public Of the additional
program services Offered by the Los Angeles stations,
but rather to make such programming and augmented local
services available to the entire public in the San
Diego area. . . . The San Diego CATV systems have yet
to demonstrate their willingness and ability to origi-
nate local programming designed to meet the particular
needs and interests of the San Diego public. And even
if they were to do so to a substantial degree, such
local originations would be available only to the sub-
scribing public and would not benefit the very con-
siderable portion not reached by CATV. . . .

 

26Ibid., p. 621.
27Midwest Television, Inc., 11 RR 2d 274 (1967).

28Midwest Television, Inc., 15 FCC 5d 492 (1968).

26

. . . We conclude that unlimited CATV eXpansion

carrying Los Angeles signals would probably preclude

or substantially impair potential UHF development in

San Diego and frustrate the Commission's allocations

to the detriment of the public interest. In order to

effectuate the goals of the all-channel receiver

legislation and to preserve the opportunity for aug-

mented television services to the entire San Diego

public, we believe it necessary to prohibit further

carriage of Los Angeles Signals by CATV systems in the

San Diego area.- . . 29

Some Specific exceptions were noted in the decision, as
well as recognition of the grandfathering protection which
had been provided in the original Report and Order. Also,
the CATV systems won FCC approval--even encouragement--for
their own origination of local programming. Commercials were
prohibited, however, to protect UHF development in San Diego.30

It must be remembered that this decision, and the rules
from which it came, represented a complete reversal from the
1959 statement, in which the Commission insisted that it had
no jurisdiction over CATV. Further, no legislation had been
forthcoming from the Congress in the meantime to authorize
the regulation of cable systems by the FCC. It was inevit-
able, therefore, that the San Diego case would ultimately
reach the Supreme Court. In United States et al. y, South-
western Cable Company et al., the Court decided, on June 10,

1968, that:

1. The FCC has authority under the Act to regulate CATV
systems. . . .

 

29Ibid., pp. 501-502.

3°Ibid., pp. 505-508.

27

(a) The FCC has broad authority over “all inter-
state and foreign communication by wire or radio,"
which includes CATV systems as they are encompassed
within the term "communication by wire or radio," and
there is no doubt they are engaged in interstate com-
munication. . . .

(b) The FCC's requests for legislation have no
significant bearing on the resolution of this issue. . . .

(c) The FCC has reasonably found that the success-
ful performance of its responsibilities for the orderly
deve10pment Of local television broadcasting demands
prompt and efficacious regulation Of CATV, and in the
absence of compelling evidence that Congress intended
otherwise, administrative action imperative to an
agency's ultimate purposes should not be prohibited. . . .

(d) The FCC's authority recognized here is restricted
to that reasonably ancillary to the effective performance
of its responsibilities for the regulation of television
broadcasting. . . .

2. The FCC had authority to issue the prohibitory order
in this case. . . .

AlthOugh cable television interests interpreted the
San Diego case as a setback, they were delighted with a
Supreme Court decision which was handed down just one week
later. This concerned another important aSpect Of the regu-
lation of Community Antenna Television, that of copyright law.
"In many respects the history of CATV COpyright liability
parallels the history of FCC regulation, because both followed

the changing nature of cable television."32 When the cable

 

31United States v. Southwestern Cable Co., 592 U. S.
157-158 (1968)-

32Dick Nelson, "CATV: Enter the FCC," Freedom of
Information Center Report No. 219 (April, 1969), p. 5.

28

performed the limited function of an antenna in remote areas
Of the country, no one worried about the collection Of COpy-
right fees. However, when the great financial success of

the CATV business became a reality, and when programming
material began to be extended beyond market areas in which it
had been originally sold to individual stations, COpyright
holders became concerned.

The only CATV copyright suit which has been decided by
the Supreme Court was that brought by United Artists Televi-
sion, Incorporated, against the Fortnightly Corporation,
Operators of cable systems in Clarksburg and Fairmont, West
Virginia. The two systems, which were eighteen miles apart,
picked up five television signals, three from Pittsburgh,
Pennsylvania, one from Steubenville, Ohio, and one from
Wheeling, West Virginia. Distances between those cities and
the two cable systems in Clarksburg and Fairmont ranged from
fifty-two to eighty-two miles. During the period of the law-
suit, United Artists granted licenses tO each of the five
stations to broadcast copyrighted motion pictures. The Fort-
nightly CATV systems at no time obtained a license.33

The lower courts had ruled that Fortnightly was liable,
and "no one expected the high court to let CATV off the

hook. . . ."34 However, in its decision, which was released

 

33Fortnightly Corp. 3, United Artists Television, Inc.,
592 U. S. 592-595 (1968).

34Nelson, "CATV," p. 5.

29

June 17, 1968, the lower court rulings were reversed:

Held: Judicial construction of the Copyright Act,
in light of drastic technological changes, has treated
broadcasters as exhibitors, who “perform," and viewers
as members of the audience, who do not "perform," and
Since petitioner's CATV systems basically do no more
than enhance the viewers' capacity to receive broadcast
Signals, the CATV systems fall within the category Of
viewers, and petitioner does not "perform" the programs
that its systems receive and carry.35

The decision not only reversed the lower court, but it
did SO with only one justice, Abe Fortas, dissenting. It
seems apprOpriate to quote from the Opinion of Mr. Justice
Fortas, not for the purpose of presenting the case of the
proponents of CATV COpyright liability, but rather to cite
some of the very important issues which illustrate the com-
plexity of the problem. Justice Fortas said in his dissent-
ing Opinion:

Applying the normal jurisprudential tools--the
words of the COpyright Act, legislative history, and
precedent--to the facts Of the case is like trying to
repair a television set with a mallet.

The implications Of any decision we may reach as
to the copyright liability of CATV are very great.

On the one hand, it is darkly predicted that the impo-
sition Of full liability upon all CATV Operations

could result in the demise Of this new, important
instrument of mass communications; or in its becoming

a tool of the powerful networks which hold a substan-
tial number Of COpyrights on materials used in the
television industry. On the other hand, it is foreseen
that a decision to the effect that CATV systems never
infringe the COpyrights of the programs they carry would
permit such systems to overpower local broadcasting
stations which must pay, directly and indirectly, for
copyright licenses and with which CATV is in increasing
competition.35

 

35Fortnightly, 592 U. S. 590.

36Ibid., pp. 405-404.

50

As indicated in the FCC discussion of the regulation of
CATV systems, the Commission had become concerned about ex-
tension of television signals beyond their normal range.
While in the Fortnightly case, this was not a consideration,
because the cable systems received all TV signals directly,
Mr. Justice Fortas recognized the problem:

The Court has indulged in an oversimplification of
the "function" of CATV. It may be, indeed, that inso-
far as CATV Operations are limited to the geographical
area which the licensed broadcaster (whose signals the
CATV has picked up and carried) has the power to cover,
a CATV is little more than a "COOperative antenna" em-
ployed in order to ameliorate the image on television
screens at home or to bring the image to homes which,
because of obstacles other than mere distance, could not
receive them. But such a description will not suffice
for the case in which a CATV has picked up the signals
Of a licensed broadcaster and carried them beyond the
area--however that area be defined-—which the broadcaster
normally serves. In such a case the CATV is performing
a function different from a simple antenna for, by hy-
pothesis, the antenna could not pick up the signals of
the licensed broadcaster and enable CATV patrons to
receive them in their homes.37

In addition to not dealing with cable television systems
which import signals from distant stations, the Court did not
concern itself with the potential problem which is caused by
the system which originates its own local programming. As
the FCC said in its annual report for the 1968 fiscal year,
"It leaves to Congress the accommodation of conflicting COpy-
right, communications, and antitrust considerations by legis-

lative change of the COpyright statutes."35

 

37Ibid., p. 407.

38U. 8., Federal Communications Commission, 54th Annual
Report/Fiscal Year 1968 (Washington, D.C.: Government Print-
ing Office, 1969), p. 47.

51

Earlier, it was indicated that the history of copyright
liability and general FCC regulation of CATV paralleled each
other. This has certainly been the case in the matter of
Congressional legislation. The first comprehensive COpy-
right law revision was introduced in the 89th Congress, First
Session,.in.1966. Similar bills have been presented in sub-
sequent sessions, but none of these attempts has won congres-
sional approval. Many copyright eXperts seem to feel that
one of the major reasons for the delay in revision of the
COpyright Act is the very thorny problem presented by CATV.
No one seems to know what form this section of the final
regulation might take, but the original prOposal is clear.
The bill which was presented to the 89th Congress said, in
Section 109, that the following would not be an infringement
Of COpyright:

~ (5) the further transmitting to the public of a
transmission embodying a performance or exhibition of

a work, if the further transmission is made without

altering or adding to the content of the original trans-

mission, without any purpose of direct or indirect com-
mercial advantage, and without charge to the recipients

Of the further transmission.39

The fact that cable systems charge a fee for their serv-
ices means that they would be subject tO copyright liability
under this proposed legislation. Frederick W. Ford, Presi-

dent Of the National Cable Television Association, Spoke for

his industry in hearings before the House of Representatives

 

39Hearings before the House Subcommittee No. 5 of the
Committee on the Judiciary on COpyright Law Revision, 89th
Cong., 1st Sess., pt. 1 at 5-6 (1966).

52

Subcommittee of the Committee on the Judiciary.

This revision would restrict home television re-
ception by CATV subscribing members of the public by
giving the holder of a copyright, for the first time,
the exclusive right to control the reception of a
telecast copyrighted work by a homeowner who uses a
community antenna, which is basically contrary to the
public's interest in full dissemination of the pro-
tected works.4O
There seems to be little question but that the FCC would

have preferred a different ruling from the Supreme Court as
well as Specific congressional copyright legislation which
would include a resolution of the CATV issue. As stated in
Broadcasting magazine, "The Commission has long felt that if
CATV systems were subject to copyright liability--and thus
lost the 'unfair' advantage they have over broadcasters Of
plucking signals out of the air, free of charge--much of the
burden Of regulating the cable industry would be eased."4l
Another problem with which the FCC has had to deal is
that Of the relationship between cable Operators and the tele-
phone companies. Although the Commission has ruled that CATV
does not fall under common carrier regulation, the cable
systems make use of common carrier facilities when they lease
telephone company lines as their means of distribution. The
Commission exPressed its concern in the interrelationships of

CATV and telephone company interests in the General Telephone

Company of California decision which was adOpted June 25, 1968:

 

4°1bid., p. 1245.

41"FCC PrOposes Rigid Rules on CATV," Broadcasting, LXXV
(December 16, 1968), 28.

55

By reason Of its control over utility poles, or
other local advantages resulting from its status as an
existing common carrier in the community, the telephone
company is in a position to preclude or substantially
delay an unaffiliated CATV system from commencing serv-
ice and thereby eliminate competition. Furthermore,
construction by a telephone company for an affiliated
CATV operator calls for careful scrutiny on the part of
the Commission in order to insure against wasteful dupli-
cation Or unnecessary construction. 2
The Commission concluded that construction Of lines by
a telephone company for the purpose of providing channel
service to a CATV system must be certified.43 This decision
reinforced a previous Memorandum Opinion and Order which held
that such service "is clearly a common carrier undertaking"
and therefore subject to the provisions of the Communications
Act of 1954.44 More stringent regulations regarding anti-
competitive practices of telephone companies, as well as rules
concerning their ownership patterns in CATV systems, are ex-
pected from the Federal Communications Commission.45

It should be noted that all regulation of CATV has been
based upon the assumption that service from any individual
system would be provided for a regular, predetermined fee.

If, on the other hand, some of the local programming which

cable systems intend to originate is offered to subscribers

 

42General Telephone Co., 15 FCC 2d 465 (1968).
43;p;g., p. 454.

44Memorandum Opinion and Order, 4 FCC 2d 260 (1966).
45Notice of Inquiry and Notice Of PrOposed Rulemaking,

Current RR 54:211-217 (1969); see also "FCC Examines Telephone
Firms in CATV," Broadcasting, LXXVI (April 7, 1969), 55.

54

on a per-program, or "pay television", basis, precedent could
be upset. In this kind Of situation, the individual viewer
would have to make a decision whether he wished to pay to
receive specific programs. This, then, would seem to give
the cable system some of the characteristics of a common car-
rier, one definition Of which is, "a system that transmits
commercially to its customers the signals they select."46

If such regulation were determined apprOpriate in the case

of some aspects of the Operation Of Community Antenna Tele-
vision, the several states could also become involved in the
regulatory process, because they share responsibility for
common carriers with the federal government.

Two states already have laws which affect CATV.
Connecticut and Nevada have classified cable systems as utili-
ties and placed them under the jurisdiction of public utili-
ties commissions. In Connecticut, the state has declared
that CATV must serve only as an antenna service and must not
originate programming. Only one system is permitted in any
given section Of the state, and public hearings are held on
all applications. Financial aSpects also are controlled
through requirements which call for regular reports from CATV
franchise holders, the filing of prOposed initial rates, and

the approval of all rate changes.47

 

46"Notes, The Wire Mire: The FCC and CATV," Harvard Law
Review, LXXIX (1965), 567.

47Ester Featherer, "CATV: Problem and Promise," Freedom
of Information Center Publication No. 122 (May, 1964), p. 2.

55

Although state authority is being challenged in the
courts Of Connecticut and Nevada, eleven other states and
the territory of Puerto Rico have initiated prOposals for
utility regulation Of their CATV systems. If these efforts
are successful, it is expected that nearly all states will
adOpt similar measures.48

Of course, in addition to state and federal jurisdiction,
local municipalities have been involved in CATV regulation
almost from the beginning. Their concerns, however, have
been in areas such as the legal, technical, financial, and
character qualifications of the owners of the proposed sys-
tems. Also, the cities have wanted to approve rates and
plans for the distribution of signals. In some cases, they
have required the reservation of channels for public use,
such as the broadcast of city council or school board meet-
ings.

The complexity surrounding the regulation Of cable tele-
vision is heightened by the latest major development in this
area. On December 12, 1968, the Federal Communications Com-
mission adopted a Notice Of PrOposed Rulemaking and Notice of
Inquiry, "In the matter of: lAmendment of Part 74, Subpart K,
of the Commission's Rules and Regulations Relative to Com-
munity Antenna Television Systems; and inquiry into develop-

ment of Communications Technology and Services to Formulate

 

48"New Regulatory Clouds Over Wire,“ Broadcasting, LXXVI
(March 24, 1969), 68.

56

Regulatory Policy and Rulemaking and/or Legislative Pro-

posals."49

Although specific provisions may change as a
result of the hearing process, most broadcasters and cable
Operators seem to feel that future regulation will closely
parallel the provisions Of this document. For this reason,
the attitude questionnaire, which is reported in the follow-
ing chapters, was based upon the prOposed rules rather than
those which are currently in effect. The major provisions
Of the Notice of PrOposed Rulemaking and Notice of Inquiry
are:

1. CATV systems mpg; originate programming. The FCC,
which has always wanted as many local outlets as possible,
is of the Opinion that CATV can contribute "both as a means
Of providing a local outlet to communities which have no
television outlet of their own and as a means of enhancing
diversity in communities which do have broadcast outlets."so
Small systems might be exempt, however.

2. As conditions to program origination, CATV systems
would be subject to rules similar to those regulating tele-
vision stations in (a) broadcasts by political candidates
(Section 515), (b) identification Of sponsors (Section 517),
and (c) programs which are subject to the provisions of the

Fairness Doctrine. Also, the Commission indicated a desire

 

49Notice Of Proposed Rulemaking and Notice of Inquiry,
15 FCC 2d 417-464 (1968).

501515., pp. 421-422.

57

for comments on the application of obscenity and lottery
provisions to cable systems.51
5. Provision for consumer protection would have to be
shared by local and state government, as well as federal.
"Local entities, either at the State of municipal level de-
pending on State law, should--among other things--be concerned
with various licensing considerations pertinent to the public
interest judgment to be made by the local authority."52
4. Provision for diversification of ownership would be
provided in three forms: (a) cross-ownership of a television
station and a CATV system within the grade B contour of the
station would be prohibited; (b) a limitation would be placed
upon the degree Of multiple ownership Of cable systems nation-
wide, number of subscribers, size of communities, and regional
concentration; (c) it is prOposed to limit to one the number
of channels on which CATV systems may originate programming,
not counting automated services.53
5. CATV systems would be encouraged to Operate as common
carriers on otherwise unused channels. Such programming
might include presentation of political candidates, subscrip-

tion programs, programs of modestly funded organizations, and

programs featuring municipal authorities. One channel might

 

SlIbid., pp. 424-425.
521bid., pp. 425-426.

531bid., pp. 426-427.

58

be devoted to advertising. Although it is not prOposed that
common carrier use be required by the FCC, state or local
provisions might be imposed.54

6. An annual report would be required which would indi-
cate the status of each CATV system and its activity.55

7. The FCC invited comments relative to the deve10pment
of minimum technical standards for CATV systems.56

8. Each cable system must carry local signals, which are
defined as all commercial and noncommercial stations within
whose grade B contour the system Operates. Also, the signals
must be carried without degradation.57

(A definition is required in order to understand the
next three provisions of this proposed rulemaking. "The
term 'sPecified zone of a television broadcast station' means
the area extending 55 air miles from the main post Office in
the community or communities to which that station is as-
signed. . ."58)

9. No CATV system in the specified zone of a Top 100

market (as determined by the 1967 American Research Bureau

net weekly circulation ranking)59 could extend a commercial

 

S‘Ibid., p. 427.
551bid., pp. 427-428.

561bid., p. 428.
57Ibid., pp. 429, 459.
58Ibid., p. 459.

591bid., pp. 455, 459-460.

59

television signal beyond its predicted grade B contour with-
out permission Of the originating station. Noncommercial
educational stations might be extended if there were no ob-
jection from the local educational TV station or from local
or state television agencies. In the case of such extension
Of signals (also called importation), priority must be given
to ETV stations which are located in the same state, or
closest to the system.“0

10. Within the Specified zone of markets smaller than
the TOp 100, a cable system may extend television signals
beyond their grade B contours in order to fulfill the follow-
ing three requirements: (a) Signals might be imported in
order to furnish full network service Of each of the national
commercial television networks. No "leapfrogging" would be
permitted; that is, the closest network station in a state
or region must be carried. (b) One distant commercial inde-
pendent signal might be carried, provided it were Obtained
from the nearest community with an Operating independent
station. (c) Any educational TV station could be carried,
provided there were no objection from a local ETV station or
television agency.61

11. If the CATV system is outside any Specified zone
(market not stipulated as a television market), it must give

priority to the importation of signals of a given type which

 

6°Ibid., p. 461.

BlIbid.. pp. 461-462.

40

are available from communities located closest tO the system.
More distant stations of the same type might then be extended
without limitation as to total number.62

12. Importation rules would not apply to any signals
which a CATV system was supplying to subscribers on December
20, 1968, or to other cable systems which might later serve
that community. The new rules would apply, however, to the
expansion of an existing system into new areas.83

Although the prOposed rulemaking indicated that no de-
cision had been reached on the question of advertising on a
CATV system, comments were invited on the basis of varying
circumstances in different markets.84

Some minor revisions of these prOposals were adOpted
May 14, 1969, when the FCC released a Further Notice of Pro-
posed Rulemaking. One of the changes indicated that the
reference to smaller market importation of signals applied to

CATV systems within the specified zone of a commercial tele-

 

vision station, not an educational station. Also, since exact
coordinates of main post Office buildings were not available
for all cities, the Commission changed its reference points

in determining "specified zones of television broadcast
stations.“' It adopted the list of coordinates for four

hundred ninety-two cities which are listed in the United States

 

62Ibid., p. 462.
63Ibid.

e‘Ibid.. pp. 425-424.

41

Department of Commerce Special Publication Number 258,
"Airline Distances Between Cities in the United States."
In most cases, these locations were determined by the inter-
section Of the two main streets in a given city. For com-
munities not listed, the Commission adOpted a list of post
Office coordinates which was provided by the National Cable
Television Association. Finally, a change in the prOposed
rules was adOpted which gave importation protection to sta-
tions which had received construction permits but which had
not yet commenced broadcasting.85

One deve10pmemt which would have provided an important
step forward in resolving some Of the CATV regulatory prob-
lems occurred in May, 1969, when the staffs of the National
Association of Broadcasters and the National Cable Television
Association released the draft of a proposed compromise agree-

ment.66

However, the terms of the compromise met with so
much resistance, particularly among broadcasters, that it was
never ratified.

One of the most striking characteristics of the prOposed
NAB-NCTA document was that it concerned itself, almost exclu-

sively, with current Operational considerations. Although

most of the prOposed FCC regulations deal with similar

 

65Further Notice of Proposed Rulemaking, Current RR 54:
152-153, 162. 164 (1969).

66Mimeograph COpy of NAB-NCTA prOposed agreement, dis-
tributed by NAB, May, 1969, pp. 1-5; also see I‘The Wording Of
a Compromise," Broadcasting, LXXVI (June 2, 1969), pp. 24-25.
Full text Of compromise agreement is in Appendix A.

42

problems, the Commission has also recognized the potential
long-range effects which these two industries may have upon
each other. In addition to requesting comment on Specific
rules, the Commission's Notice of PrOposed Rulemaking and
Notice of Inquiry initiated a major study of future uses of
cable.

. . . It has been suggested that the expanding
multi-channel capacity of cable systems could be uti-
lized to provide a variety of new communications
services to homes and businesses within a community,
in addition to services commonly Offered such as time,
weather, news, stock exchange ticker, etc. . . .

. . . It has been suggested further that there
might be interconnection of local cable systems . . .
to provide numerous communications services to the home,
business and educational or other center on a regional
or national basis. The advent of CATV program origina-
tion in such cities as New York and Los Angeles (where
there is also CATV activity) gives rise to the possi-
bility of a CATV origination network or networks. The
so-called "wired city" concept embraces the possibility
that television broadcasting might eventually be con-
verted, in whole or in part, to cable transmission
. . . , thereby freeing some broadcast spectrum for
other uses and making it technically feasible to have
a greater number of national and regional television
networks and local outlets. More broadly in the area
Of general communications, the present and future de-
velopment of intercity facilities with very high com-
munications capacity . . . , coupled with the potential
Of the computer and communications satellite technolo-
gies, may stimulate the provision Of new nationwide or
regional services of various kinds. . . . Another
matter to be eXplored in this area is the exPanding
multi-channel capacity of CATV . . . , including the
question of whether it is technically and economically
feasible for CATV to develop capability for two-way
and switched services.67

 

67Notice Of PrOposed Rulemaking and Notice of Inquiry,
15 FCC 2d 419-421.

45

It was against this background of current problems,
coupled with an unknown but potentially exciting future,
that this present research of attitudes toward CATV were
sought from the managers of this country's commercial tele-

vision stations.68

 

68On October 24, 1969, the FCC implemented one of its
proposed rules by requiring CATV systems with more than
5,500 subscribers to originate programming "to a significant
extent" as of January 1, 1971. The distribution of programs
by this method will be called "cablecasting" and will be sub-
ject to regulations which are similar to those provided by
Section 515, the Fairness Doctrine and the sponsor identifi-
cation rules. Advertising at natural breaks will be permitted.
See First Report and Order, 20 FCC 2d 201 (1969). This rule-
making was adopted after this research had been completed
and, therefore, will not be included in the report and inter-
pretation of the data.

CHAPTER III

REPORT OF FINDINGS FROM PARTS I AND II OF
"A SURVEY OF THE ATTITUDES OF COMMERCIAL

TELEVISION STATION MANAGERS TOWARD CATV"

Rationale for Survey

The broadcasting trade associations have always been
looked upon as the spokesmen for the radio and television
industry, and those organizations do accurately reflect the
views of many of their members. However, there is no record
Of any previous attempt actually to survey all commercial
television station managers in an effort to determine atti-
tudes toward the development Of cable television.

The unique character of CATV is ideally suited to the
attitudinal portion of this research. One TV broadcaster
may be the operator of a cable system, while another station
owner may feel that some of his strongest competition comes
from CATV. What are the attitudes Of the TV industry toward
the great variety of real and potential problems and ques-
tions regarding cable television? The purpose of this
research is not only to reflect attitudes toward current
status, but to provide judgments regarding directions which

CATV might take in its future deve10pment.

44

45

Procedures Used in Obtaining
Respondent Replies

Responses to this questionnaire were sought from the
manager of every commercial television station in the conti-
nental United States. Stations in Alaska, Hawaii, and the
Territories of Puerto Rico and the Virgin Islands were not
included because it was felt that their circumstances might
differ significantly from those of the rest of the country.
Also, satellite, booster, and repeater stations were not in-
cluded because, in most cases, these stations had the same
general managers as "parent" stations, whose attitudes were
being sought in other questionnaires.

A list of 588 stations was compiled from the May 15,
1969 Spot Television Rates and Data.1 This monthly publica-
tion of the Standard Rate and Data Service, Incorporated,
provides current information about every station in the
United States, including listings of personnel and addresses.

The mailing, which was sent to each station manager during

the week of June 22, 1969, included the following: (1) a COpy

of the questionnaire, ”A Survey Of the Attitudes of Commercial

Station Managers Toward CATV," (2) a cover letter to each

manager, in which the project was explained and a request made

for him to participate in the survey, and (5) a business reply

envelope for the return of the questionnaire. Follow-up

 

1'"Television Station Listings," Spot Television Rates
and Data, LI (May 15, 1969), 58-496.

46

materials, which were sent to every manager who had not
responded by July 20, 1969, included a second copy Of the
questionnaire, a memorandum reminding him of the project, and
a second business reply envelope.2
In the initial mailing, the body of each cover letter
was duplicated by an offset printing process, but the typing
on the inside address was matched in such a way that each
letter gave the appearance Of having been typed individually.
The letterhead of the Department of Television and Radio,
Michigan State University, was used in an attempt to give
additional credibility to the survey. The questionnaire was
printed on both sides of 11x17 inch light green paper. Each
sheet was then folded so that the questions appeared on four
8§x11 inch pages. The COpy was reduced to 65%’Of its original
size so that all questions would fit on the one sheet of
folded paper, thus eliminating the necessity for a page insert.
It was felt that an additional page might make the question-
naire appear too lengthy. The green paper was used in the
hOpe that it would be noticed on the manager's desk. A small
white slip, approximately 1§x5 inches, was glued along one
end and attached to the front of each questionnaire. On this
slip appeared the call letters Of the station together with
an explanation that the information would be kept confidential

and that the slip would be destroyed after the return had been

tabulated.

 

2Copies Of all mailing materials are in Appendix B.

47

The original deadline for returning the completed ques-
tionnaires was July 14, 1969. .However, it was believed from
the beginning that more time would be needed to insure a
maximum return. Therefore, on July 21, 1969, the follow-up
was sent to all managers who had not responded. This mailing

stated the final deadline of August 8, 1969.

Questionnaire Returns

Of the 588 questionnaires which were sent, 258 were com-
pleted and returned. This represented 45.8%tof all commercial
television station managers who were contacted. A total of
204 had been received by July 20, 1969. The other 48 re-
Sponded after the follow-up mailing had been sent.

It should be noted that the information and attitudes re—
ported herein should not be interpreted as representing all
commercial television station managers. However, in various
categories in Part I of the questionnaire, Station and Market
Information, there is a positive relationship between the
percentages Of reSpondent stations and the total stations to

which the questionnaire was sent.

Report of Survey: Part 13

Part I of the questionnaire was designed to provide

Specific station and market information. Three of the items

 

3Copy of questionnaire is in Appendix B.

48

in this section are compared with figures which describe all
Of the stations to which questionnaires were sent. It was
impossible to cite similar comparisons in every descriptive
category because the necessary information was not available.
Two figures are indicated under each heading. The first
represents the number Of respondents who replied in a given

manner. The second figure is the percentage Of each category.

Questionnaire Item I, la

Please indicate the type of station you manage:

 

 

Surveprespondents All Stations
VHF 182(70.5) 454(75.8)
UHF 76(29.5) 154(26.1)

Questionnaire Item I, 1b
Please indicate ownership of your station:
Single station 110(42.6)

Group 148(57.4)

Questionnaire Item IL_1c

Please indicate network affiliation (ABC, CBS or NBC):

 

 

Survey Reepondents All Stations
Yes 220(85.5) 497(84.5)
NO 58(14.7) 91(15.4)

Questionnaire Item IL 1d
Please indicate market size according to the 1967 rating of
ARB based Upon net weekly circulation. (This is the list

which the FCC is currently using to classify CATV markets.)

49

 

 

Survey Resggndents All Stations
Top 25 42(16.5) 126(21.4)
Markets 26-100 109(42.2) 241(40.9)
Smaller than TOp 100 106(41.1) 221(57.5)
Unclassified4 1( .4)

Questionnaire Item I, 2
In the Space provided, please indicate the number of TV sta-
tions which are received in your market area with at least

Grade B signal strength.

 

 

 

Network Independent Non-commercial
Affiliated Commercial Educational

0 164(65.6) 89(54.5)

1 8( 5.1) 56(14.0) 125(48.4)

2 58(14.7) 25( 9.7) 50(11.6)

5 144(55.8) 15( 5.8) 7( 2.7)

4-7 45(17.4) 12( 4.7) 1( .4)

8-12 14( 5.4)

More than 12 5( 1.2)

NO answer 6( 2.5) 6( 2.5) 6( 2.5)

Eggstionnaire Item I, 5

Does your station, or parent company, own or have financial
interest in one or more CATV systems?

Yes 82(51.8)

No 176(68.2)

 

4Respondent indicated that his market was not listed in
the 1967 ARB listing.

5O

Questionnaire Item I, 4
If your answer to question 5 was “yes”, please indicate the
number of systems in which your company has financial

interest.

1 CATV system 25(50.5)
2-5 systems 25(50.5)
6-10 systems 17(20.7)
More than 10 systems 11(15.4)
NO answer 4( 4.9)

Questionnaire Item I, 5
Is there CATV service within the Grade B contour of your tele-

vision station?

Yes 250(89.1)
NO 24( 9.5)
NO answer 4( 1.6)

Questionnaire Item I, 6

If you answered "yes" to question 5, please complete the

following five parts of this question. If you answered no

to question 5, please go on to question 7.
Questionnaire Item I, 6a.--Is your signal carried on

one or more local CATV systems?

Yes 222(96.5)

No 7( 5.0)

NO answer 1( .4)

Questionnaire Item I, 6b.--Within your Grade B contour,

about how many homes subscribe to a CATV service?

Less than 5,000 55(14.5)
5,000-9,999 55(15.2)
10,000-19,999 55(15.2)
20,000-29,999 50(15.0)
50,000-49,999 25(10.0)
50,000-99,999 12( 5.2)
100,000-199,999 4( 1.7)
200,000 or more 2( .9)
No answer 56(24.5)

Questionnaire Item I, 6c.-—What percentage of television

homes does the figure in part "b. represent?

Less than 1% 25(10.9)
1-4.9% 50(15.0)
5-9.9% 50(15.0)
10-14.9% 51(15.5)
15-19.9% 10( 4.5)
20-29.9% 20( 8.7)
50-49.9% 18( 7.8)
50% or more 5( 1.5)
No answer 65(27.4)

Qpestionnaire Item I, 6d, (1)._12L, (5).--In the Spaces
provided, please indicate the number of different TV signals
available on the CATV systems which provide service within

your Grade B contour.

52

 

 

 

Network Independent Non-commercial
Affiliated Commercial Educational

0 Stations 60(26.1) 21( 9.1)

1 45(18.7) 95(40.4)

2 5( 1.5) 52(15.9) 45(18.7)

5 45(19.6) 25(10.0) 20( 8.7)

4-7 81(55.2) 28(12.2) 8( 5.5)

8-12 45(19.6) 1( .4)

More than 12 16( 7.0)

No answer 40(17.4) 45(18.7) 45(19.6)

Questionnaire Item I, 6d,,(4).-—What is the largest
number Of non-broadcast signals which are originated by a
single CATV system (which provides service within your Grade

B contour)?

O 20( 8.7)
.1 47(20.4)
2-5 42(18.5)
More than 5 7( 5.0)

NO answer 114(49.6)

Questionnaire Item I, 6e.--Does your station, or parent
company, own or have financial interest in a CATV system

which is within the Grade B contour of your own station's

signal?
Yes 58(16.5)
NO 186(80.9)

NO answer 6( 2.6)

55

Questionnaire Item £447
Is your signal imported into a distant market by a CATV system

outside your Grade B contour?

Yes 156(60.5)
No 51(19.8)
Don't know 40(15.5)
NO answer 11( 4.5)

Eyaluation of Selected Part I Items

Some of the questions which were asked in this portion
of the questionnaire provide useful station and market infor-
mation, but they do not necessarily lend themselves to com-
parison with the attitude questions in Part II. These
questions are numbers 2 and 6 b, c, and d. After reviewing
the data, it appears that comparisons based upon market size
will provide more meaningful results. Also the question 6
items have more "no answer" responses than any other questions
.in Part I. This may be explained, in part, by a letter from
Fred Weber, Executive Vice President of the Rust Craft Broad-
casting Company:

Many of the questions in your form could only be
answered by cable systems and not by stations, and thus
you will find a number of questions unanswered. It
seems apprOpriate to make certain that you know that
the lack Of response to certain questions results from

,the inability Of stations to secure adequate informa-
tion from cable systems.5

 

5Letter from Fred Weber, Executive Vice President, Rust
Craft Broadcasting Company, July 26, 1969.

54

Report of Survey: Part II

Each attitude question in Part II provided for one of
three responses on the part of the respondent, plus the Op-
tion of not answering. In the report Of these data, the
first entry for each question indicates the manner in which
the 258 managers (Total Respondents) answered that particular
question. Responses are also broken out and compared with
selected descriptive categories in Part I.

Two figures are listed under each heading. They refer
to the respondent category, which is indicated on the left.
The first figure represents the number of managers in a
particular respondent category who replied in a given manner.

The second figure is the percentage of that category.

Questionnaire Item II, 1

Ratignale.--In addition to seeking over-all attitudes

 

toward a specific proposed rule, this question was asked in
an effort to identify differences of Opinion which might be
reflected among various descriptive categories, particularly
market size and involvement in CATV.

The guestion.--Should CATV systems within a 55 mile

 

radius of the top 100 markets be required to seek permission
from distant originating stations before importing signals

in those markets?

55

NO NO
YES N9. OPINION ANSWER
Total
ReSpondents 200(77.5) 27(10.5) 24( 9.5) 7( 2.7)
ACCORDING TO TYPE OF STATION
VHF 142(78-0) 18( 9.9) 17( 9.5) 5( 2.7)
UHF 58(76.5) 9(11.8) 7( 9.2) 2( 2.6)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 85(75.5) 10( 9.1) 15(11.8) 4( 5.6)
Group owner 17(79.1) 17(11.5) 11( 7.5) 5( 2.0)
ACCORDING TO NETWORK AFFILIATION
Network 174(79.1) 19( 8.6) 20( 9.1) 7( 5.2)
Independent 26(68.4) 8(21.1) 4(10.6)
ACCORDING TO MARKET SIZE6

TOp 25 28(66.7) 10(25.8) 5( 7.2) 1( 2.4)
26-100 95(85.5) 9( 8.5) 4( 5.7) 5( 2.8)

Smaller than
top 100 78(75.6) 8( 7.5) 17(16.1) 5( 2.8)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 58(70.7) 16(19.5) 8( 9.7)

Non-owner 142(80.7) 11( 6.5) 16( 9.1) 7( 4.0)

 

6One market not classified. Therefore, comparisons
"According to Market Size" will be based upon 257 responses.

56

NO NO
YES NO OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR7

Own CATV
within B 24(65.2) 8(21.1) 6(15.8)

Non-owner
within B 151(81.2) 11( 5.9) 18( 9.7) 6( 5.2)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION8

CATV'within

B contour 177(77.0) 22( 9.6) 24(10.4) 7( 5.0)
NO CATV
within B 21(87.5) 5(12.5)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET9

Imported 119(76.5) 16(10.5) 18(11.5) 5( 1.9)
Not imported 45(84.5) 5( 9.8) 5( 5.9)
Don't know 52(80.0) 2( 5.0) 5( 7.5) 5( 7.5)

Analysis.--The responses from managers who have financial

interest in CATV were not surprising, except that a larger

 

7Six managers did not respond to this descriptive cate-
gory in Part I. Therefore, comparisons "According to Financial
Interest in CATV Within Grade B Contour" will be based upon
224 of the 250 who have CATV service in their areas.

8Four managers did not respond to this descriptive cate-
gory in Part I. Therefore, comparisons "According to Presence
Of CATV Service Within Grade B Contour of Respondent's Sta-
tion" will be based Upon 254 responses.

9Eleven managers did not respond to this descriptive cate-
gory in Part I. Therefore, comparisons "According to Impor-
tation Of Respondent's Signal into Distant Market" will be
based upon 247 responses.

57

percentage might have been exPected to answer "No." It is
natural that they would desire less stringent CATV regula-
tions than stations which are not involved in CATV. The
independent station manager is more apt to see the Opportunity
for an increase in audience through the extension of his sig-
nal, while the network station may anticipate fragmentation of
its audience. The most interesting comparison is between

the TOp 25 markets and those in the 26 to 100 bracket. One
explanation for these results might be that the stations in
the largest markets do not fear CATV competition as much as
those in what might be classified as medium markets. This
also raises a question of the appropriateness of the FCC's
classification. The stations in the smaller markets in the
tap 100 bracket may not have much in common with the stations

in the very large markets.

Qgestionnaire Item II, 2

Rationale.--Some critics of the FCC's proposed rules

 

feel that stations in smaller markets, particularly new UHF
facilities, need as much protection as the larger market
stations. Therefore, the question was asked in an attempt to
determine if this prOposed rule permits competition which is
too strong for the small market stations.

The_guestion.--In markets below the top 100, the FCC
has prOposed that CATV systems may carry as many distant
signals as necessary (without "leapfrogging") to provide

three full network services, the programs Of one independent,

58

and any educational stations. Do these regulations afford

adequate protection?

Total
Respondents

UHF

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
top»100

Own CATV

Non-owner

NO NO
YES N9 OPINION ANSWER
107(41.5) 121(46.9) 27(10.5) 5(1.2)

ACCORDING TO TYPE OF STATION
72(59.6) 89(48.9) 20(11.0) 1( .5)
55(46.1) 52(42.1) 7( 9.2) 2(2.6)

ACCORDING TO TYPE OF STATION OWNERSHIP

50(45.5) 51(46.4) 8( 7.5) 1( .9)
57(58.5) 70(47.5) 19(12.9) 2(1.4)

ACCORDING TO NETWORK AFFILIATION
86(59.1) 107(48.6) 24(10.9) 5(1.4)
21(55.5) 14(56.8) 5( 7.9)

ACCORDING TO MARKET SIZE

18(42.9) 17(40.5) 6(14.5) 1(2.4)
41(57.6) 50(45.9) 16(14.7) 2(1.8)
47(44.5) 54(50.9) 5( 4.7)

ACCORDING TO FINANCIAL INTEREST IN CATV
55(42.7) 55(42.7) 12(14.7)
72(40.9) 86(48.9) 15( 8.5) 5(1.7)

59

NO NO
YES NQ. OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 16(42.1) 17(44.7) 5(15.1)

Non-owner
within B 82(44.1) 84(45.2) 17( 9.1) 5(1.6)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV‘within

B contour 101(45.9) 105(44.8) 25(10.0) 5(1.5)
NO CATV
within B 5(20.8) 17(70.8) 2( 8.5)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 75(46.8) 67(42.9) 15( 9.6) ,1( .6)
Not imported 19(57.5) 26(51.0) 6(11.8)
Don't know 11(27.5) 24(60.0) 5( 7.5) 2(5.0)

Analysis.--As indicated in the rationale, it was ex—
pected that the UHF stations would question the adequacy of
the proposed small market protection. However, many of these
stations probably are not affiliated with a network and
would, therefore, be a part of the "Independent" category
also. The reason the independents favored this proposed regu-
lation more strongly than other categories of stations might
have been that they foresee an advantage in having their
signals imported into additional markets. It is obvious that

managers in communities without cable TV have a greater fear

60

Of CATV than those station Operators who are in areas with
established systems. It must be pointed out, however, that

this conclusion is based upon a very small number of Opinions.

Questionnaire Item II, 5

Rationale.--Items one and two of this part of the ques-
tionnaire indicate provisions of the proposed rules as they
apply to the importation of distant signals. The purpose of
this question is to determine attitudes toward a proposal
which would apply the same importation rule, regardless of
market size.

The guestion.--Should a CATV system in a market below
the top 100 have to seek retransmission rights from all sta-

tions whose signals that system wishes to import?

NO NO
YES & OPINION ANSWER
Total
Respondents 202(78.5) 55(15.6) 16( 6.5) 5(1.9)
ACCORDING TO TYPE OF STATION
VHF 146(80.2) 22(12.1) 10( 5.5) 4(2.2)
UHF 56(75.7) 15(17 .1) 6( 7.9) 1(1.5)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 87(79.1) 11(10.0) 9( 8.2) 5(2.7)
Group owner 115(77.7) 24(16.2) 7( 4.8) 2(1.4)
ACCORDING TO NETWORK AFFILIATION
Network 179(81.4) 25(11.4) 11( 5.0) 5(2.5)

Independent 25(60.5) 10(2615) 5(15.1)

61

N0 NO
YES ug_ OPINION ANSWER

ACCORDING TO MARKET SIZE
Top 25 25(54.8) 15(51.0) 4( 9.5) 2(4.8)
26-100 89(81.7) 12(11.0) 6( 5.5) 2(1.8)
Smaller than
top 100 89(84.0) 10( 9.4) 6( 5.7) 1( .9)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 54(65.9) 22(26.8) 5( 6.1) 1(1.2)
Non-owner 148(84.1) 15( 7.4) 11( 6.2) 4(2.5)
ACCORDING TO FINANCIAL INTEREST IN CATV

WITHIN GRADE B CONTOUR

Own CATV
within B 26(68.4) 10(26.5) 2( 5.2)

Non-owner
within B 152(81.7) 18( 9.7) 15( 7.0) 5(1.6)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV’within

B contour 179(77.8) 51(15.5) 15( 6.5) 5(2.2)
NO CATV
within B 22(91.7) 1( 4.2) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 119(76.5) 25(14.7) 15( 8.4) 1( .6)
Not imported 45(88.2) 4( 7.8) 2( 4.0)
Don't know 54(85.0) 2( 5.0) 1( 2.5) 5(7.5)

Analysis--The most significant result in the response

to this question is that over 78% agreed with its provisions

62

after 41.5% had indicated that the prOposed regulation out-
lined in question number two was adequate. It may be assumed
that, although the other rule was adequate, this one would be
better. The greatest concern about importation of signals
into the smaller markets would seem to be among the managers
of VHF stations, the network affiliates, and in the markets
below the top 25. It should be noted that the managers of
the large market stations seemed to perceive the problem much
differently than did their counterparts in the medium and
small markets. It is not surprising to find differences which
are based upon involvement in CATV systems. However, the

margin among the managers in areas without CATV service was

greater than might have been anticipated.

Questionnaire Item IIL 4
Rationale.-—Many broadcasters have expressed concern over
the fact that they consider the 35 mile zone of protection
in the prOposed rules to be inadequate. This question was
asked in an effort to determine the number of managers who
have this Opinion and what types of stations they represent.
The guestion.-*Should the proposed 55 mile zone of pro-
tection from unrestricted importation of distant TV signals
into the tOp 100 markets be extended to an area such as 60

or 75 miles?

Total
Respondents

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

65

NO
YES E9. OPINION
165(64.0) 51(19.8) 36(14.0)
ACCORDING TO TYPE OF STATION
116(63.7) 40(22.0) 21(11.5)
49(64.5) 11(14.5) 15(19.7)

ACCORDING TO TYPE OF STATION OWNERSHIP

70(65.6) 21(19.1) 15(15.6)

95(64.2) 50(20.3) 21(14.2)

ACCORDING TO NETWORK AFFILIATION

140(65.6) 46(20.9) 28(12.8)

25(65.8) 5(15.2) 8(21.1)

ACCORDING TO MARKET SIZE

25(59.5) 7(16.7) 7(16.7)
76(69.7) 22(20.2) 10( 9.1)
65(59.4) 22(20.8) 19(17.9)

ACCORDING TO FINANCIAL INTEREST IN CATV

48(58.5) 22(26.8) 11(15.4)

117(66.5) 29(16.5) 25(14.2)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

21(55.5) 13(54.2) 4(lO.5)

120(64.5) 51(16.7) 30(16.1)

NO

ANSWER

6(2.5)

5(2.7)
1(1.5)

4(3.6)
2(1.4)

6(2.7)

3(7.1)

1( .9)

2(1.9)

1(1.2)

5(2.8)

5(2.7)

64
NO NO
YES fl OPINION ANSWER

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 145(63.0) 45(19.6) 54(14.8) 6(2.6)
NO CATV
within B 18(75.0) 4(16.7) 2( 8.5)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 89(57.1) 56(23.1) 28(18.0) 5(1.9)
Not imported 37(72.5) 10(19.6) 4( 7.8)
Don't know 51(77.5) 2( 5.0) 4(10.0) 5(7.5)

Analysis.--Comparisons among the descriptive categories
of type of station, network affiliation, and size of market
did not yield significant differences on this question. -AS
expected, involvement in CATV was again reflected in the
managers' responses, but these differences were no greater
than those based upon the importation of the respondent's
signal into a distant market or upon the presence of a local
CATV system. One conclusion might be that resistance to CATV
decreases somewhat if the station begins to benefit from

being carried on a cable system, either local or distant.

Questionnaire Item II, 5
Rationale.r-The purpose of this question was similar to
that of question number four, except that the concern here

was in the markets smaller than the top 100.

65

The question.--Should the prOposed 55 mile zone of pro-
tection from unrestricted importation of distant TV signals

into markets smaller than the tOp 100 be extended to an area

 

such as 60 or 75 miles?

NO NO

YES Ng OPINION ANSWER
Total
ReSpondents 174(67.4) 43(16.7) 35(13.6) 6(2.5)

ACCORDING TO TYPE OF STATION
VHF 125(67.6) 32(17.6) 22(12.0) 5(2.7)
UHF 51(67 .1) 11(14.5) 15(17 .1) 1(1.5)

ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 82(74.5) 14(12.7) 12(10.9) 2(1.8)

GrOUp owner 92(62.2) 29(19.6) 25(15.6) 4(2.7)

ACCORDING TO NETWORK AFFILIATION
Network 151(68.6) 57(16.8) 26(li.9) 6(2.7)
Independent 23(60.5) 6(15.8) 9(25.7)

ACCORDING TO MARKET SIZE

Top 25 25(54.8) 8(19.0) 8(19.0) 5(7.1)
26-100 69(63.5) 21(19.3) 17(15.6) 2(1.8)

Smaller than
top 100 81(76.4) 14(15.2) 10( 9.4) 1( .9)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 45(54.9) 24(29.3) 12(14.6) 1(1.2)

Non-owner 129(75.5) 19(10.8) 25(13.1) 5(2.8)

66

NO NO
YES NO OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 22(57.9) 12(31.6) 4(10.5)

Non-owner
within B 126(67.7) 27(14.5) 28(15.0) 5(2.7)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV'within

B contour 152(66.1) 40(17.4) 52(15.9) 6(2.6)
NO CATV
within B 21(87.5) 1( 4.2) 2(8.3)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 101(64.7) 28(17.9) 25(16.0) 2(1.3)
Not imported 57(72.5) 9(17.6) 4( 7.8) 1(2.0)
Don't know 28(70.0) 3( 7.5) 6(15.0) 5(7.5)

Analysis.--When the category, According to Market Size,
above, was compared with that of the previous question, the
number of "yes" reSponseS represented a decrease of nine
among the managers of stations in the tOp 100 markets and an
increase of eighteen among the Operators of the stations in
markets smaller than the tOp 100. This indicates that atti-
tudes toward the question of the size of a zone of protection
are subject to change according to the direct effect which

such a regulation might have upon a station.

67

Questionnaire Item II, 6

Rationale.--UHF stations have always had difficulties

 

which are not shared by VHF outlets. The UHF signal has a
Shorter range; many receivers are not equipped to receive
UHF stations, or they may not have prOper antennas; the UHF
station is more difficult to tune because it does not appear
as a Channel number on a "click—type" tuner in the receiver.
The primary purpose of this question was to discover the
degree of favorable effect which the UHF station might find
in becoming one of the channels which would be made available
on a CATV system.

The question.--In your Opinion, does the presence of one
or more CATV systems within a station's Grade B contour (or

its ARB ADI) increase that station's audience potential?

NO NO
YES NO OPINION ANSWER
Total
Re3pondents 87(35.7) 139(53.9) 27(10.5) 5(1.9)
ACCORDING TO TYPE OF STATION
VHF 55(29.1) 109(59.9) 17( 9.5) 5(1.6)
UHF 54(44.7) 30(39.5) 10(15.2) 2(2.6)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 57(53.6) 56(SO.9) 14(12.8) 5(2.7)

Group owner 50(53.8) 85(56.1) 13( 8.8) 2(1.4)

68
NO NO
YES N_q OPINION ANSWER
ACCORDING TO NETWORK AFFILIATION
Network 65(29.5) 128(58.2) 22(10.0) 5(2.3)

Independent 22(57.9) 11(28.9) 5(15.2)

ACCORDING TO MARKET SIZE

Top 25 25(59.5) 10(25.8) 5(11.9) 2(4.8)
26-100 35(52.1) 58(55.2) 14(12.8) 2(1.8)
Smaller than 27(25.5) 71(67.0) 7( 6.6) 1( .9)

ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 54(41.5) 40(48.8) 8( 9.7)
Non-owner 53(30.1) 99(56.5) 19(10.8) 5(2.8)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B-CONTOUR

Own CATV

within B 16(42.1) 20(52.6) 2( 5.5)

Nondowner

within B 59(51.7) 99(55.2) 23(12.4) 5(2.7)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 78(35.9) 122(55.0) 25(10.9) 5(2.2)
N0 CATV
within B 8(53.5) 15(62.5) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 54(54.6) 86(55.1) 15( 9.6) 1( .6)
Not imported 19(57 .5) 26(51.0) 6(11.8)
Don't know 11(27.5) 19(47.5) 6(15.0) 4(10.0)

69

Analysis.--It should be noted that a large number of UHF
stations in this country are not affiliated with a network and
are located in the large market areas. Therefore, it was not
surprising to find a positive relationship among these cate-
gories of reSponses. Also, reception in large metropolitan
areas is sometimes adversely affected by large buildings and
by the presence of more electrical interference than is found
in less pOpulated areas. These difficulties are minimized by

CATV.

Questionnaire Item II, 7

Rationale.--The most successful CATV systems are those

 

which improve significantly the quality of the television
reception in an area or which import signals which would not
otherwise be available. Either alternative gives the viewer
an increased choice of channels, the result of which may be
the potential loss Of audience by the local stations. The
purpose of this question was to determine the strength of
attitudes toward this possible fragmentation.

Thegguestion.--A CATV system usually increases the
choice of channels for a subscriber. In your opinion, does
the presence of a local CATV system significantly fragment
the audience so that the local station loses potential
audience?

NO NO
YES & OPINION ANSWER

Total
ReSpondentS 194(75.2) 39(15.1) 21( 8.2) 4(1.6)

UHF

Single
station

Group owner

Network

Independent

TOp 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within.B

Non-owner
within B

70

NO NO
YES Ng_ OPINION ANSWER
ACCORDING TO TYPE OF STATION
140(76.9) 24(15.2) 16( 8.7) 2(1.1)
54(71.1) 15(19.7) 5( 6.6) 2(2.6)
ACCORDING TO TYPE OF STATION OWNERSHIP
87(79.1) 14(12.7) 8( 7.5) 1( .9)
107(72.3) 25(16.9) 15( 8.8) 5(2.0)
ACCORDING TO NETWORK AFFILIATION
171(77.7) 27(12.3) 19( 8.6) 3(1.4)
25(60.5) 12(31.6) 2( 5.5) 1(2.6)
ACCORDING TO MARKET SIZE
19(45.2) 16(58.1) 6(14.5) 1(2.4)
85(76.1) 13(11.9) 10( 9.2) 5(2.8)
91(85.8) 10( 9.4) 5( 4.7)
ACCORDING TO FINANCIAL INTEREST IN CATV
50(61.0) 21(25.6) 10(12.2) 1(1.2)
144(81.8) 18(10.2) 11( 6.2) 5(1.7)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR
22(57.9) 12(51.6) 4(10.5)
147(79.0) 22(11.8) 15( 7.0) 4(2.2)

71

NO NO
YES NO OPINION ANSWER

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV'within

B contour 171(74.5) 57(16.1) 18( 7.8) 4(1.7)
No CATV
within B 22(91.7) 1( 4.2) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 114(75.1) 29(18.6) 12( 7.7) 1( .6)
Not imported 45(84.5) 5( 9.8) 2( 5.9) 1(2.0)
Don't know 52(80.0) 2( 5.0) 4(10.0) 2(5.0)

Analysis.--Because it is in the large cities where the
greatest number of signals already exist, the managers of
stations in the top 25 markets would not feel fragmentation
as much as those in communities which receive only a few sig—
nals without the aid of CATV. It is interesting to note the
difference in attitude between owners of CATV within their
own grade B contour and those managers whose stations are
picked up by cable systems other than their own. .Either the
one is overly Optimistic or the other is unnecessarily pessi-

mistic.

Questionnaire Item IIL_§
Rationale.-—If a TV signal is extended into a distant
market area, that station's audience will increase. This

question was asked in an attempt to determine the value of

72

that increase in terms of the station's competitive position.
Thegguestion.-—Is a local station's competitive posi-
tion improved when its signal is imported into a distant

market by a CATV system?

NO NO
YES NO OPINION ANSWER
Total
ReSpondents 114(44.2) 113(45.8) 26(10.0) 5(1.9)
ACCORDING TO TYPE OF STATION
VHF 74(40.7) 86(47.5) 18( 9.8) 4(2.2)
UHF 40(52.6) 27(35.5) 8(10.5) 1(1.5)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 44(40.0) 53(48.2) 12(10.9) 1( .9)
Group owner 70(47.5) 60(40.5) 14( 9.5) 4(2.7)
ACCORDING TO NETWORK AFFILIATION
Network 95(42.5) 98(44.5) 24(10.9) 5(2.5)
Independent 21(55.3) 15(59.5) 2( 5.5)
ACCORDING TO MARKET SIZE
Top 25 21(50.0) 16(58.1) 3( 7.1) 2(4.8)
26-100 43(59.4) 49(45.0) 14(12.8) 5(2.8)

Smaller than
top 100 50(47.2), 47(44.5) 9( 8.5)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 47(57.5) 22(26.8) 12(14.6) 1(1.2)
Non-owner 67(58.1) 91(51.7) 14( 8.0) 4(2.5)

73
NO NO
YES E9. OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 21(55.5) 11(28.9) 6(15.8)

Non-owner
within B 78(41.9) 87(46.8) 16( 8.6) 5(2.7)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 102(44.5) 101(45.9) 22( 9.6) 5(2.2)
NO CATV
within B 9(57.5) 12(50.0) 5(12.5)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 74(47.4) 68(45.6) 13( 8.5) 1( .6)
Not imported 22(45.1) 20(59.2) 8(15.7) 1(2.0)
Don't know 11(27.5) 21(52.5) 5(12.5) 5(7.5)

Analysis.--The attitudes toward no other item in the
questionnaire were as evenly divided as they were on this
question. The UHF, independent, and top 25 categories showed
a slightly higher favorable reSponse, while those involved
in CATV continued to provide the greatest difference in

response.

Questionnaire Item II, 9
Rationale.--The Supreme Court has ruled that CATV is not

subject to COpyright legislation. However, it is anticipated

74

that a revised law may make cable systems liable for copy-
right fees. The purpose of this question was to determine
broadcasters' attitudes toward the issue.

The question.--Do you feel that CATV systems should be

subject to copyright legislation?

NO NO
E19; N9 OP INION ANSWER
Total
Respondents 251(89.5) 15( 5.8) 10( 5.9) 2( .8)
ACCORDING TO TYPE OF STATION
VHF 166(91.2) 10( 5.5) 5( 2.7) 1( .5)
UHF 65(85.5) 5( 6.6) 5( 6.6) 1(1.5)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 99(90.0) 7( 6.4) K4( 3.6)
Group owner 152(89.2) 8( 5.4) 6( 4.1) 2(1.4)
ACCORDING TO NETWORK AFFILIATION
Network 200(90.9) 12( 5.5) 6( 2.8) 2( .9)
Independent 51(81.6) 5( 7.9) 4(10.5)
ACCORDING TO MARKET SIZE
TOp 25 55(85.5) 3( 7.1) 5( 7.2) 1(2.4)
26-100 96(88.i) 8( 7.3) 4( 5.7) 1( .9)

Smaller than
top 100 99(95.4) 4( 5.8) 5( 2.8)

75

NO NO
YES NO OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 68(82.9) 11(15.4) 3(3.6)
Non-owner 163(92.6) 4( 2.3) 7(4.0) 2(1.l)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 29(76.3) 7(18.4) 2(5.5)

Non-owner
within B 170(91.4) 8( 4.3) 6(3.2) 2(1.1)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV'within

B contour 204(88.7) 15( 6.5) 9(3.9) 2( .9)
NO CATV
within B 23(95.8) 1(4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 140(89.7) 10( 6.4) 6( 5.8)
Not imported 45(88.2) 3( 5.9) 3( 5.9)
Don't know 35(87.5) 2( 5.0) l( 2.5) 2(5.0)

Analysis.--The position of the managers is clear on the
issue of applying copyright legislation to CATV systems.
However, it was surprising to find such a strong affirmative
response to this question from those who are involved in

cable ownership.

76

Questionnaire Item II, 10

Rationale.--General reaction to the FCC's proposed im—

 

portation regulations is that they are a substitute for COpy-
right legislation. In seeking permission to import signals,
cable systems would find that stations do not own the copy—
rights to many of the programs which are broadcast. For this
reason, CATV operators would be forced into a situation where
clearance would have to be given by the COpyright holder
before a station could grant permission to extend its signal.
The question was asked in an effort to determine if broad-
casters viewed this prOposed rule as an attempt to draft a
substitute for COpyright legislation of CATV.

The question.--Do you consider the prOposed FCC importa-
tion regulations to be, in reality, a substitute for copy-

right legislation?

NO NO
YES N9 _ OPINION ANSWER
Total
ReSpondents 52(20.2) 144(55.8) 58(22.5) 4(1.6)
ACCORDING TO TYPE OF STATION
VHF 34(18.7) 109(59.9) 36(19.7) 3(l.6)
UHF 18(23.7) 35(46.1) 22(28.9) 1(i.3)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 22(20.0) 61(55.5) 25(22.7) 2(1.8)

Group owner 30(20.3) 83(56.1)' 33(22.3) 2(1.4)

Network

Independent

TOp 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

CATV within
B contour

No CATV
within B

Imported
Not imported

Don't know

77

NO NO

YES NO OPINION ANSWER

ACCORDING TO NETWORK AFFILIATION

40(18.2) 130(59.1) 46(20.9) 4(1.8)
12(31.6) 14(36.8) 12(3i.6)

ACCORDING TO MARKET SIZE
12(28.6) 21(50.0) 7(16.7) 2(4.8)
19(17.4) 63(57.8) 25(23.0) 2(1.8)
21(19.8) 59(55.7) 26(24.5)

ACCORDING TO FINANCIAL INTEREST IN CATV

21(25.6) 45(54.9) 15(18.3) 1(1.2)

31(17.6) 99(56.3) 43(24.4) 3(1.7)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

9(23.7) 23(60.5) 6(15.8)

34(18.3) 104(55.9) 46(24.8) 2(l.1)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

45(19.6) 129(56.1) 52(22.6) 4(1.7)

6(25.0) 12(50.0) 6(25.0)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

32(20.5) 95(60.9) 28(18.0) l( .6)
9(17.6) 24(47.1) 18(35.3)
8(20.0) 18(45.0) 12(30.0) 2(5.0)

78

Analysis.--Although the importation rules have been
viewed as a substitute for COpyright legislation, it is
obvious that the majority of the managers who replied to
this questionnaire did not agree. One interpretation of
these results could be that broadcasters want copyright
legislation which covers CATV rather than a set of regula-
tions which attempt to accomplish the same purpose indirectly.
The difference in response between the network and independent
stations is difficult to eXplain, as is the large percentage

of "no Opinion" responses.

Questionnaire Item II, 11

Rationale.--If CATV systems were required to originate
local programming, the television stations in a cable com-
munity would be subject to a potential increase in competition
for audience. The situation for the cable systems would also
change as they would have to enter the open marketplace and
compete for available program material and personnel. This
question was asked in order to determine attitudes toward
this proposed regulation and to observe any differences be-
tween managers who are financially involved in CATV and those
who are not.

The question.--Should CATV systems be required to origi-

nate programming?

Total
ReSpondents

UHF

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

79

NO
YES .119 OPINION
16( 6.2) 213(82.6) 27(10.4)

ACCORDING TO TYPE OF STATION

11( 6.0) 152(83.5) 18( 9.9)

5( 6.6) 61(80.3) 9(11.8)

ACCORDING TO TYPE OF STATION OWNERSHIP

7( 6.4) 90(81.8) 13(11.8)

9( 6.1) 123(83.1) 14( 9.4)

ACCORDING TO NETWORK AFFILIATION

12( 5.5) 185(84.1) 21( 9.5)

4(10.5) 28(73.7) 6(15.8)

ACCORDING TO MARKET SIZE

3( 7.1) 32(76.2) 6(14.3)
10( 9.2) 90(82.6) 8( 7.4)
3( 2.8) 90(84.9) 13(12.3)

NO
ANSWER

2( .8)

1( .5)

1(1.5)

2(1.4)

2( .9)

1(2.4)

1( .9)

ACCORDING TO FINANCIAL INTEREST IN CATV

4( 4.9) 71(86.6) 7( 8.5)

12( 6.8) 142(80.7) 20(11.3)

2(1.1)

ACCORDING TO FINANCIAL INTEREST IN CATV

WITHIN GRADE B CONTOUR

1( 2.6) 34(89.5) 3( 7.9)

13( 7.0 153(82.3) 18( 9.7)

2(1.1)

CATV within
B contour

No CATV
within B

Imported
Not imported

Don't know

80

NO NO
YES NO OPINION ANSWER

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

14( 6.1) 193(83.9) 21( 9.1) 2( .9)

2( 8.3) 17(70.8) 5(20.9)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

9( 5.8) 129(82.7) 18(11.6)
3( 5.9) 43(84.3) 5( 9.8)
3( 7.5) 31(77.5) 4(10.0) 2(5.0)

Analysis.--Attitudes toward requiring CATV systems to

originate local programming are clear. It is interesting to

note that managers with financial interests in cable felt

even more strongly about the question than those who are not

involved in CATV. The total number of independent stations

is small, and this should be taken into account when looking

at that category. However, it is interesting to Observe

their responses to this question because local origination by

CATV systems might provide more competition to an independent

station than to a network affiliate.

Questionnaire Item II, 12

Rationale.--This question was asked to determine if

there were a difference in attitude toward permitting_local

CATV origination of programming rather than requiring it,

 

81

as indicated in the previous question.

The question.--Should CATV systems be permitted to

 

originate local programming?

Total
Respondents

UHF

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
t0p 100

Own CATV

Non-owner

NO NO
YES NO OPINION ANSWER
97(37.6) 151(50.8) 26(10.0) 4(1.6)

ACCORDING TO TYPE OF STATION
74(40.7) 88(48.4) 17( 9.3) 3(1.6)
25(50.5) 45(56.6) 9(11.8) 1(1.5)

ACCORDING TO TYPE OF STATION OWNERSHIP

36(32.7) 61(55.5) 13(11.8)
61(41.2) 70(47.3) 13( 8.8) 4(2.7)

ACCORDING TO NETWORK AFFILIATION
80(56.4) 116(52.7) 20( 9.1) 4(1.8)
17(44.7) 15(39.5) 6(15.8)

ACCORDING TO MARKET SIZE

24(57.1) 11(26.2) 6(14.3) 1(2.4)
43(39.4) 54(49.5) 9( 8.2) 3(2.8)
30(28.3) 65(61.3) 11(10.4)

ACCORDING TO FINANCIAL INTEREST IN CATV
49(59.8) 27(52.9) 5( 6.1) 1(1.2)
48(27.5) 104(59.1) 21(11.9) 5(1.7)

82

NO NO
YES N9. OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 25(65.8) 11(28.9) 2( 5.3)

Non-owner
within B 57(30.6) 109(58.6) 16( 8.6) 4(2.2)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 86(37.4) 122(53.0) 18( 7.8) 4(1.7)
NO CATV
within B 8(53.5) 9(37.5) 7(29.1)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 65(41.7) 73(46.8) 17(10.9) 1( .6)
Not imported 13(25.5) 33(64.7) 4( 7.8) 1(2.0)
Don't know 11(27.5) 22(55.0) 5(12.5) 2(5.0)

Analysis.--Although it is difficult to interpret the
results of each of the above categories without more informa-
tion, two points are clear. (1) Managers who have financial
interests in CATV indicated a somewhat stronger affirmative
reaction to the question than did those who do not own cable
systems. However, an even greater difference might have been
expected. (2) The managers, as a total group, were not as
strongly opposed to giving CATV systems permission to origi-
nate local programming as they were to requiring such origi-

nation.

83

Questionnaire Item II,_13

Rationale.--At the time this questionnaire was sent,

 

the FCC had not prOposed rules regarding the origination of
commercials by CATV systems. Therefore, the question was
asked in an effort to determine how strongly broadcasters
felt about possible CATV competition for the advertising
dollar at the local level.

, The_guestion.--Should CATV systems be permitted to origi-

nate commercials as a part of local programming?

NO NO
YES Np OPINION ANSWER
Total
Respondents 45(17.4) 200(77.5) 11( 4.2) 2( .8)
ACCORDING TO TYPE OF STATION
VHF 30(16.5) 144(79.1) 7( 3.8) i( .5)
UHF 15(19.7) 56(73.7) 4( 5.2) 1(1.3)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 13(11.8) 92(83.6) 5( 4.5)
Group owner 32(21.6) 108(73.0) 6( 4.1) 2(1.4)
ACCORDING TO NETWORK AFFILIATION
Network 34(15.5) 175(79.5) 9( 4.1) 2( .9)

Independent 11(28.9) 25(65.8) 2( 5.2)

84

NO NO
YES NO OPINION ANSWER

ACCORDING TO MARKET SIZE
Top 25 15(35.7) 23(54.8) 3( 7.2) 1(2.4)
26—100 21(19.3) 83(76.1) 4( 3.6) 1( .9)
Smaller than
tOp 100 9( 8.5) 93(87.7) 4( 3.8)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 29(55.4) 52(63.4) 1( 1.2)
Non-owner 16( 9.1) 148(84.1) 10( 5.6) 2(1.1)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 15(39.5) 22(57.9) 1( 2.6)

Non-owner
‘within B 22(11.8) 154(82.8) 8( 4.3) 2(1.1)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 41(17.8) 178(77.4) 9( 3.9) 2( .9)
No CATV
within B 1( 4.2) 21(87.5) 2( 8.3)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 30(19.2) 119(76.3) 7( 4.5)
Not imported 6(11.8) 44(86.3) 1( 2.0)

Don't know 3( 7.5) 32(80.0) 3( 7.5) 2(5.0)

85

Analysis.-—The Opinion against the origination of com-
mercials by cable systems was stronger than the opposition
to the permitting of local programming, but not as strong as
that against requiring CATV program origination. Although
Opinions differed among the various categories above, the
least concern seemed to be among managers in the top 25
markets and those who operate CATV systems. The large market
stations probably see less potential threat from the cable,
and those with financial interest in community antenna tele-

vision would benefit from the added source of revenue.

Questionnaire Item II, 14

Rationale.--Expectation on this question was that, if

 

CATV systems were allowed to originate programming, broad-
casters would desire apprOpriate regulations which would be
comparable to those imposed upon stations.

The guestion.--If CATV systems are permitted, or re-
quired, to originate local programming, should they be subject
to the same regulations which pertain to broadcasters, i.e.,

Section 315, Fairness Doctrine, Sponsor identification, etc.?

NO NO
YES .152 OPINION ANSWER
Total
Respondents 244(94.6) 4( 1.6) 7( 2.7) 3(1.2)
ACCORDING TO TYPE OF STATION
VHF 172(94.5) 4( 2.2) 5( 2.7) 1( .5)

UHF 72(94.7) 2( 2.6) 2(2.6)

86

NO NO
YES NO OPINION ANSWER

ACCORDING TO TYPE OF STATION OWNERSHIP

Single

station 107(97.3) 2( 1.8) 1( .9)
Group owner 137(92.6) 4( 2.7) 5( 5.4) 2(1.4)

ACCORDING TO NETWORK AFFILIATION
Network 208(94.5) 4( 1.8) 6( 2.8) 2( .9)
Independent 36(94.7) 1( 2.6) 1(2.6)
ACCORDING TO MARKET SIZE

Top 25 59(92.9) 1( 2.4) 1( 2.4) 1(2.4)
26-100 1OO(91.7) 2( 1.8) 5( 4.6) 2(1.8)

Smaller than
top 100 104(98.1) 1( .9) 1( .9)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 75(91.5) 2( 2.4) 5( 6.1)
Non-owner 189(98.O) 2( 1.1) 2( 1.1) 5(1.7)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 34(89.5) 2( 5.3) 2( 5.2)

Non-owner
within B 179(96.2) 2( 1.1) 2( 1.1) 3(1.6)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within
B contour 218(94.8) 4( 1.7) 5( 2.1) 3(1.3)

No CATV
within B 24(100.0)

87

NO NO
YES ug OPINION ANSWER

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 150(96.2) 3( 1.9) 2( 1.2) 1( .6)
Not imported 49(96.1) 1( 2.0) 1( 2.0)
Don't know 37(92.5) 1( 2.5) 2(5.0)

Analysis.--This question provided the strongest one-
sided reSponse of any item in the questionnaire. Even in
the category, Financial Interest in CATV, where a wider vari-
ation might have been expected, Opinions were not significantly
different. It was obvious that the television station managers
felt strongly about the fact that FCC regulations which per-
tain to broadcast programming should also be applied to CATV
systems. This would eliminate a competitive advantage which

cable television might otherwise enjoy.

Questionnaire Item II, 15

 

Rationale.-—The Federal Communications Commission has

 

expressed increased interest in diversification of ownership
in broadcast facilities. The purpose of this question was
to determine Opinions regarding multi-media ownership as it
relates to CATV.

rThe question.--Should a TV station owner be prohibited

from owning a CATV system within his own Grade B contour?

Total
ReSpondents

UHF

Single
station

Group owner

Network

Independent

TOp 25
26-100

Smaller than
tOp 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

88

NO
YES uq OPINION
67(26.0) 149(57.8) 39(15.1)

ACCORDING TO TYPE OF STATION

45(24.7) 110(60.4) 25(13.7)

22(28.9) 39(51.3) 14(18.4)

ACCORDING TO TYPE OF STATION OWNERSHIP

36(32.7) 59(53.6) 14(12.7)

31(20.9) 90(60.8) 25(16.9)

ACCORDING TO NETWORK AFFILIATION

57(25.9) 128(58.2) 32(14.6)

10(26.3) 21(55.3) 7(18.4)

ACCORDING TO MARKET SIZE

3( 7.1) 30(71.4) 8(19.0)
24(22.0) 65(59.6) 18(16.5)
40(37.7) 53(50.0) 13(12.3)

NO
ANSWER

5(1.2)

2(1.1)
1(1.3)

1( .9)
2(1.4)

3(1.4)

1(2.4)

2(1.8)

ACCORDING TO FINANCIAL INTEREST IN CATV

7( 8.5) 66(80.5) 9(11.0)

60(34.1) 83(47.2) 30(17.0)

3(1.7)

ACCORDING TO FINANCIAL INTEREST IN CATV

WITHIN GRADE B CONTOUR

37(97.4) 21( 2.6)

56(30.1) 94(50.5) 34(18.2)

2(1.1)

89

NO NO
YES NO OPINION ANSWER

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 57(24.8) 135(58.7) 35(15.2) 3(1.3)
NO CATV
within B 9(37.5) 11(45.8) 4(16.7)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 38(24.4) 90(57.7) 28(17.9)
Not imported 16(31.4) 31(60.8) 4( 7.9)
Don't know 12(50.0) 19(47.5) 7(17.5) 2(5.0)

Analysis.--FCC action in other areas Of diversification
of ownership of media may have been reSponsible for the
divided Opinions indicated above. The non-owners of CATV
systems indicated the strongest affirmative response, but
even they did not provide a dramatic contrast from those who
have a financial interest in cable. Once again, the opinions

of the large market managers differed considerably from

those of the medium and small market Operations.

Questionnaire Item IIL 16

Ratignale.--The purpose of this question was to deter-
mine broadcasters' Opinions on another facet of multi-media
ownership. This issue represents another area of proposed
FCC rulemaking.

The guestion.--Should each CATV company be limited in

the number of local systems which it may own nationally?

Total
Respondents

Single
station

Group owner

Network

Independent

TOp 25
26-100

Smaller than
tOp 100

Own CATV

Non-owner

OwnACATV
within B

Non-owner
within B

90

NO
YES Nu OPINION
140(54.3) 78(30.2) 36(14.0)

ACCORDING TO TYPE OF STATION

95(52.2) 59(32.4) 25(13.7)

45(59.2) 19(25.0) 1(14.5)

ACCORDING TO TYPE OF STATION OWNERSHIP

71(64.5) 24(21.8) 13(11.8)

69(46.6) 54(36.5) 23(15.6)

ACCORDING TO NETWORK AFFILIATION

121(55.0) 64(29.1) 31(14.1)

19(50.0) 14(36.8) 5(13.2)

ACCORDING TO MARKET SIZE

13(31.0) 22(52.4) 5(11.9)
61(56.0 33(30.3) 13(11.9)
66(62.3) 22(20.8) 18(16.9)

NO
ANSWER

4(1.6)

3(1.6)

1(1.3)

2(1.8)
2(1.4)

4(1.8)

2(4.8)
2(1.8)

ACCORDING TO FINANCIAL INTEREST IN CATV

25(30.5) 47(57.3) 10(12.2)

115(65.3) 31(17.6) 26(14.7)

4(2.3)

ACCORDING TO FINANCIAL INTEREST IN CATV

WITHIN GRADE B CONTOUR

11(28.9) 21(55.3) 6(15.8)

111(59.7) 46(24.7) 26(13.9)

3(1.6)

91

NO NO
YES NO OPINION ANSWER

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 123(53.5) 71(30.9) 32(13.9) 4(1.7)
NO CATV
within B 16(66.7) 4(16.7) 4(16.7)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 83(53.2) 47(30.1) 26(16.7)
Not imported 31(60.8) 14(27.5) 6(11.7)
Don't know 23(57.5) 10(25.0) 4(10.0) 3(7.5)

Analysis.-—Over twice as many affirmative responses
are indicated to this question as were recorded for the
previous item. Although each concerned the issue of multi-
media ownership, the managers felt much more strongly about
the potential of national control of Cable than about local
cross-ownership. It should be noted that degrees of varia-
tion among the descriptive categories were similar in both

questions.

Questionnaire Item II, 17

Rationale.--Although it was eXpected that most station

 

managers would agree that the FCC should regulate cable
television, this question was asked in order to determine
whether there was any significant difference in Opinion among

the various descriptive categories.

92

The question.--In your opinion, is the FCC the appro-

priate federal agency to regulate CATV?

Total
Respondents

UHF

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
tOp 100

Own CATV

Non-owner

NO NO
YES up OPINION ANSWER
235(90.3) 7( 2.7) 16( 6.2) 2( .8)

ACCORDING TO TYPE OF STATION
165(90.7) 4( 2.2) 12( 6.6) 1( .5)
68(89.5) 3( 3.9) 4( 5.2) 1(1.3)

ACCORDING TO TYPE OF STATION OWNERSHIP

99(90.0) 5( 4.5) 6( 5.4)
134(90.5) 2( 1.4) 10( 6.8) 2(1.4)

ACCORDING TO NETWORK AFFILIATION
201(91.4) 4( 1.8) 13( 5.9) 2( .9)

32(84.2) 3( 7.9) 3( 7.9)

ACCORDING TO MARKET SIZE

36(85.7) 2( 4.8) 3( 7.1) 1(2.4)
97(89.0) 3( 2.8) 8( 7.3) 1( .9)
99(93.4) 2( 1.9) 5( 4.7)

ACCORDING TO FINANCIAL INTEREST IN CATV
74(90.2) 2( 2.4) 6( 7.5)
159(90.5) 5( 2.8) 10( 5.7) 2(1.1)

93

NO NO
YES NQ_ OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 35(92.1) 1( 2.6) 2( 5.3)

Non-owner
within B 167( 89.8) 4( 2.2) 13( 7.0) 2(1.1)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 208(90.4) 5( 2.2) 15( 6.5) 2( .9)
NO CATV
within B 21(87.5) 2( 8.5) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 140(89.7) 4( 2.6) 12( 7.7)
Not imported 48(94.1) 1( 2.0) 2( 4.0)
Don't know 34(85.0) 2( 5.0) 2( 5.0) 2(5.0)

Analysis.--Very few managers in any category, includ-
ing owners of CATV systems, questioned the apprOpriateness
of FCC jurisdiction in cable television. A slightly lower
percentage of large market managers is noted, but the differ-

ence is not what could be classified as significant.

Questionnaire Item II, 18

Rationale.--There has been much discussion about the

 

rapprOpriateness of regulation of CATV by the individual

states. Connecticut and Nevada have assumed limited control

94

of their cable systems by classifying them as utilities.

The question has also been raised concerning the possibility
of placing at least a portion of CATV activity in the cate-
gory of common carrier. This question was designed to
determine broadcasters' attitudes toward the issue. It should
be remembered that over 90% of them had already affirmed

their belief in federal regulation by the FCC.

The question.--Should the individual states have any

 

regulatory jurisdiction over CATV systems?

NO NO
YES ug OPINION ANSWER
Total
ReSpondents 60(23.3) 159(61.6) 35(13.6) 4(1.6)
ACCORDING TO TYPE OF STATION
VHF 40(22.0) 112(61.5) 27(14.8) 5(1.6)
UHF 20(26.3) 47(61.8) 8(10.5) 1(1.3)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 27(24.5) 67(60.9) 14(12.7) 2(1.8)
GrOUp owner 33(22.3) 92(62.2) 21(14.2) 2(1.4)
ACCORDING TO NETWORK AFFILIATION
Network 53(24.1) 133(60.5) 30(13.7) 4(1.8)

Independent 7(18.4) 26(68.4) 5(13.2)

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within B

Non owner
within B

CATV'within
B contour

No CATV
within B

Imported
Not imported

Don't know

95

NO NO

YES NO OPINION ANSWER

ACCORDING TO MARKET SIZE

12(28.6) 24(57.1) 4( 9.5) 2(4.8)
19(17.4) 75(68.8) 13(11.9) 2(1.8)
28(26.4) 60(56.6) 18(16.9)

ACCORDING TO FINANCIAL INTEREST IN CATV

12(14.6) 63(76.8) 7( 8.5)

48(27.3) 96(54.5) 28(15.9) 4(2.3)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

2( 5.3) 32(84.2) 4(10.5)

50(26.9) 107(57.5) 26(14.0) 3(1.6)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

53(23.0) 143(62.2) 30(13.0) 4(1.7)

7(29.2) 13(54.2) 4(16.7)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

34(21.8) 99(63.5) 23(14.7)
15(29.4) 31(60.8) 5( 9.8)
9(22.5) 21(52.5) 7(17.5) 3(7.5)

Analysis.--A majority of every category of managers

indicated Opposition to state jurisdiction of CATV.

96

As expected, those who have financial interests in cable
systems expressed the strongest opposition to such regula-
tion. Most of the other groups paralleled the "total
respondent" category, with a few minor exceptions which are

noted above.

Questionnaire Item II, 19

Rationale.--Individual communities have asserted con-

 

trol over local aspects of cable television for many years

and the FCC has encouraged a continuance of the practice.

This question was designed to determine broadcasters' atti-
tudes toward government regulation of CATV at the local level.

The question.--Should local communities have the power

 

to franchise CATV systems?

NO NO
YES 39. OPINION ANSWER
Total
Respondents 180(69.8) 55(21.3) 21( 8.2) 2( .8)
ACCORDING TO TYPE OF STATION
VHF 134(73.6) 35(19.2) 12( 6.5) 1( .5)
UHF 46(60.5) 20(26.3) 9(11.8) 1(1.3)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 77(70.0) 25(22.7) 8( 7.3)

Group owner 103(69.6) 30(20.3) 13( 8.8) 2(1.4)

Network

Independent

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

CATV within
B contour

No CATV
within B

Imported

Not imported

Don't know

97
NO NO
YES up, OPINION ANSWER
ACCORDING TO NETWORK AFFILIATION
157(71.4) 43(19.5) 18( 8.2) 2( .9)

23(60.5) 12(31.6) 3( 7.9)

ACCORDING TO MARKET SIZE

31(73.8) 8(19.0) 2( 4.8) 1(2.4)
67(61.5) 29(26.6) 12(11.0) 1( .9)
81(76.4) 18(17.0) 7( 6.6)

ACCORDING TO FINANCIAL INTEREST IN CATV
58(70.7) 18(22.0) 6( 7.3)
122(69.3) 37(21.0) 15( 8.5) 2(1.1)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

25(65.8) 10(26.3) 3( 7.9)
131(70.4) 37(19.9) 16( 8.6) 2(1.1)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

161(70.0) 48(20.9) 19( 8.3) 2( .9)
16(66.7) 7(29.2) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET
110(70.5) 34(21.8) 12( 7.7)
35(68.6) 11(21.6) 5( 9.8)
26(65.0) 9(22.5) 3( 7.5) 2(5.0)

98

Analysis.--Approximately 70% of the managers approved
of the local power to franchise CATV systems. The UHF and
Independent stations were less positive in their responses
than the other categories, but the surprising result was
that almost no differences of Opinion existed between owners

and non-owners of cable television systems.

Questionnaire Item II, 20

Rationale.--It has been widely believed that the frag-
mentation of audience, which CATV often produces, hurts UHF
more than VHF stations. The FCC's proposed importation rules
were designed, in part, to minimize any potential adverse
effect. This question was asked in an effort to determine
how satisfactorily the broadcasters felt the problem would
be solved in the top 100 markets.

The question.--If current proposed FCC rulemaking is
adOpted, will CATV deter the deve10pment of local UHF sta-

tions in the top 100 markets?

NO NO
YES fl OPINION ANSWER
Total
Respondents 167(64.7) 56(21.7) 30(11.7) 5(1.9)
ACCORDING TO TYPE OF STATION
VHF 123(67.6) 39(21.4) 17( 9.3) 3(1.6)

UHF 44(57.9) 17(22.4) 13(17.1) 2(2.6)

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
top 100

OwnvCATV

NOD-0WD er

Own CATV
within B

Non-owner
within B

CATV within
B contour

NO CATV
within B

99

NO NO

YES NO OPINION ANSWER

ACCORDING TO TYPE OF STATION OWNERSHIP

75(68.2) 20(18.2) 14(12.7) 1( .9)
92(62.2) 36(24.3) 16(10.9) 4(2.7)
ACCORDING TO NETWORK AFFILIATION
145(65.9) 46(20.9) 25(11.4) 4(1.8)
22(57.9) 10(26.3) 5(13.2) 1(2.6)
ACCORDING TO MARKET SIZE
19(45.2) 15(35.7) 6(14.3) 2(4.8)
75(68.8) 24(22.0) 8( 7.3) 2(1.8)
72(67.9) 17(16.0) 16(15.1) 1( .9)
ACCORDING TO FINANCIAL INTEREST IN CATV
44(53.7) 30(36.6) 8( 9.7)
123(69.9) 26(14.8) 22(12.5) 5(2.8)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR
21(55.3) 14(36.8) 3( 7.9)
124(66.7) 33(17.7) 25(13.5) 4(2.2)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
-GRADE B CONTOUR OF RESPONDENT'S STATION

147(63.9) 51(22.2) 28(12.2) 4(1.7)

19(79.2) 2( 8.3) 2( 8.3) 1(4.2)

100

NO NO
YES NO OPINION ANSWER
ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 100(64.1) 35(22.4) 19(12.2) 2(1.3)
Not imported 36(70.6) 7(13.7) 7(13.7) 1(2.0)
Don't know 27(67.5) 7(17.5) 4(10.0) 2(5.0)

Analysis.--The difference of opinion between the mana-
gers of stations in the tOp 25 markets and those in the
medium and small communities presents a very interesting con-
trast. Again, the responses would seem to indicate that
large market station operators do not envision CATV with as
much fear as do the smaller market managers. »Even the medium
market bracket, 26—100, was above the over-all response pat-
tern On the affirmative side. The majority of the CATV
owners also indicated that CATV will deter UHF development in
the top 100 markets, but their margin of difference was
neither as wide as that of the "total reSpondents" nor as

close as the reSponse of the "top 25" managers.

Questionnaire Item_II, 21

Rationale.--The FCC's prOposed rules would permit more
importation into smaller markets than into those which are
classified as the top 100. The purpose of this question was
to determine attitudes toward potential effect on UHF de-
ve10pment in these smaller markets and to discover whether
opinions differ from those which were eXpressed in reSponse

to the previous question.

101

The question.--If current proposed FCC rulemaking is

 

adOpted, will CATV deter the development Of local UHF sta-

tions in markets under the top 100?

Total
Respondents

VHF

Single
station

GrOUp owner

Network

Independent

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

NO NO
YES ug OPINION ANSWER
191(74.0) 41(15.9) 22( 8.6) 4(1.6)

ACCORDING TO TYPE OF STATION

138(75.8) 25(13.7) 16( 8.7) 3(1.6)

53(69.7) 16(21.1) 6( 7.9) 1(1.3)

ACCORDING TO TYPE OF STATION OWNERSHIP

87(79.1) :15(13.6) 8( 7.3)
104(70.3) 26(17.6) 14( 9.4) 4(2.7)
ACCORDING TO NETWORK AFFILIATION
169(76.8) 29(13.2) 18( 8.2) 4(1.8)
22(57.9) 12(31.6) 4(10.5)
ACCORDING TO MARKET SIZE
20(47.6) 14(33.3) 5(11.9) 3(7.1)
82(75.2) 15(13.8) 11(10.1) 1( .9)
88(83.0) 12(11.3) 6( 5.7)

ACCORDING TO FINANCIAL INTEREST IN CATV

51(62.2) 23(28.0) 8( 9.7)

140(79.5) 18(10.2) 14( 8.0) 4(2.3)

102

NO NO
YES NO OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 26(68.4) 8(21.1) 4(10.5)

Non-owner
within B 141(75.8) 25(13.4) 16( 8.6) 4(2.2)
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 169(73.5) 37(16.1) 20( 8.7) 4(1.7)
NO CATV
within B 21(87.5) 1( 4.2) 2( 8.3)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 113(72.4) 24(15.4) 17(10.9) 2(1.3)
Not imported 43(84.3) 6(11.8) 2( 3.9)
Don't know 30(75.0) 5(12.5) 3( 7.5) 2(5.0)

.Analysis.--Nearly 10% more managers responded that CATV
would deter UHF development in smaller markets than believed
lit would be a deterrent in the top 100 markets. However, the
affirmative responses of representatives of the tOp 25 markets
increased only 2.4%,'while the number of "yes" Opinions ex-
pressed by independent Operators was the same as that for the
previous question. This would seem to indicate that these
categories of managers do not see market size as a factor when

considering the potential effect of CATV on UHF development.

103

The degree of difference between CATV owners and non-owners

was approximately the same as that in question 20.

Questionnaire Item II, 22

 

Rationale.--Critics say that CATV is the first step in
establishing a Pay, or Subscription, television system.
This possibility has become more realistic since the FCC has
prOposed that cable systems may be required to originate
their own programming. Broadcasters' attitudes toward the
issue were sought in an attempt to determine the strength of
their feelings and to discover differences of opinion, par-
ticularly between owners and non-owners of CATV.

The question.--In your Opinion, will CATV evolve into a
form of Pay, or Subscription, television, where a subscriber

pays for a portion of the service on a "per program” basis?

NO NO
YES fl OPINION ANSWER
Total
ReSpondents 192(74.4) 44(17.1) 19( 7.4) 3(1.2)
ACCORDING TO TYPE OF STATION
VHF 142(78.0) 28(15.4) 11( 6.0) 1( .5)
UHF 50(65.8) 16(21.1) 8(10.5) 2(2.6)
ACCORDING TO TYPE OF STATION OWNERSHIP
Single
station 87(79.1) 14(12.7) 8( 7.3) 1( .9)

Group owner 105(70.9) 30(20.3) 11( 7.5) 2(1.4)

Network

Independent

TOp 25
26-100

Smaller than
tOp 100

Own CATV

Non-owner

Own CATV
within B

Non-owner
within B

CATV‘within
B contour

No CATV
within B

104

NO NO

YES Ne OPINION ANSWER

ACCORDING TO NETWORK AFFILIATION

170(77.3) 33(15.0) 15( 6.8) 2( .9)

22(57.9) 11(28.9) 5(10.6) 1(2.6)
ACCORDING TO MARKET SIZE

24(57.1) 13(31.0) 4( 9.5) 1(2.4)

82(75.2) 17(15.6) 9( 8.2) 1( .9)

85(80.2) 14(13.2) 6( 5.6) 1( .9)

ACCORDING TO FINANCIAL INTEREST IN CATV

44(53.7) 29(35.4) 9(10.9)

148(84.1) 15( 8.5) 10( 5.6) 3(1.7)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

19(50.0) 15(39.5) 4(10.5)

150(80.6) 22(11.8) 12( 6.5) 2(1.1)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

172(74.8) 40(17.4) 16( 7.0) 2( .9)

19(79.2) 1( 4.2) 4(12.5) 1(4.2)

105

NO NO
YES NO OPINION ANSWER

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 116(74.4) 27(17.3) 13( 8.4)
Not imported 40(78.4) 8(15.7) 2( 3.9) 1(2.0)
Don't know 31(77.5) 3( 7.5) 4(10.0) 2(5.0)

Analyeis.--The differences of Opinion which are re-

 

flected in the data above are not nearly as significant nor
as surprising as the fact that almost 75% of the managers who
responded thought that Pay television would evolve from our

current CATV system.

Questionnaire Item_;IL_23

Rationale.—-The conclusion of the research which was
published in the book, Television and the Wired City, was
that CATV provided additional choices of programs which were
similar rather than a greater diversity of types of program-
ming.10 This question was asked in order to determine broad-
casters' attitudes toward the issue. The responses of the
managers of independent stations were of particular interest
because they are most apt to feel that they offer types of
programs which are different from those available on network

affiliates.

 

loHerman W. Land Associates, Inc., Television and the
Wired City (Washington, D.C.: National Association of Broad-
casters, 1968). pp. 15-16.

106

The question.--In your Opinion, does CATV provide a

greater diversity of types of television programming than is

available without a cable system?

Total
Respondents

UHF

Single
station

Group owner

Network

Independent

Top 25
26-100

Smaller than
top 100

Own CATV

Non-owner

NO NO
YES Ne OPINION ANSWER
106(41.1) 128(49.6) 21( 8.2) 3(1.2)

ACCORDING TO TYPE OF STATION

71(39.0) 95(52.2) 15( 8.2) 1( .5)

35(46.1) 33(43.4) 6( 7.9) 2(2.8)'

ACCORDING TO TYPE OF STATION OWNERSHIP

45(40.9) 57(51.8) 8( 7.3)

61(41.2) 71(48.0) 13( 8.8) 3(2.0)

ACCORDING TO NETWORK AFFILIATION

87(39.5) 112(50.9) 18( 8.2) 3(1.4)
19(50.0) 16(42.1) 3( 7.9)

ACCORDING TO MARKET SIZE
21(S0.0) 18(42.9) 2( 4.8) 1(2.4)
42(38.5) 55(50.5) 11(10.1) 1( .9)
43(40.6) 54(50.9) 8(7.5) 1( .9)

ACCORDING TO FINANCIAL INTEREST IN CATV

43(52.4) 33(40.2) 6( 7.3)

63(35.8) 95(54.0) 15( 8.5) 3(1.7)

107

NO NO
YES NO OPINION ANSWER

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 25(65.8) 11(28.9) 2( 5.3)

Non-owner
within B 68(36.6) 97(52.2) 18( 9.7) 3(1.6)

ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within

B contour 97(42.2) 110(47.8) 20( 8.7) 3(1.3)
No CATV
within B 6(25.0) 17(70.8) 1( 4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 68(43.6) 75(48.1) 12( 7.7) l( .6)
Not imported 18(35.3) 27(52.9) 6(11.8)
Don't know 14(35.0) 21(52.5) 3( 7.5) 2(5.0)

Analysis.-—The reSponse to only one other question
(number 8) was more evenly divided than these Opinions on
diversity of types of programs provided by CATV. A somewhat
greater percentage of affirmative opinions was eXpressed by
managers of stations which are independent, in large markets,
or which have financial interest in CATV. Once again, the
managers with the strongest feelings were those who are

located in areas without cable systems.

Questionnaire Item IIL 24
Rationale.-—The FCC has been under much pressure to pro-

vide more spectrum Space for uses other than radio and

108

television broadcasting. One of the ways this might be
accomplished is to change the method of distribution of
broadcast station Signals to a cable, or closed circuit,
system. The greatest deterrent to this prOposal at the
present time is that it would be too costly and impractical
in the rural areas. However, if the technology is developed
which will permit the change, the "wired city" could be a
reality. This question was intended to seek attitudes toward
such a deve10pment.i

The question.——Do you perceive CATV as the forerunner of
a change in the mode of distribution of television program-

ming from the present broadcast, or “on-the-air", system to

a national non-broadcast cable, or "wired city", concept?
NO NO
YES .NQ OPINION ANSWER
Total
Respondents 130(50.4) 83(32.2) 39(15.1) 6(2.3)

ACCORDING TO TYPE OF STATION
VHF 90(49.5) 58(31.9) 30(16.4) 4(2.2)
UHF 40(52.6) 25(32.9) 9(11.8) 2(2.6)

ACCORDING TO TYPE OF STATION OWNERSHIP

Single
station 53(48.2) 35(31.8) 20(18.2) 2(1.8)
Group owner 77(52.0) 48(32.4) 19(12.9) 4(2.7)
ACCORDING TO NETWORK AFFILIATION
Network 113(51.4) 67(30.5) 35(16.0) 5(2.3)

Independent 17(44.7) 16(42.1) 4(10.5) 1(2.6)

109

NO NO
YES NO OPINION ANSWER

ACCORDING TO MARKET SIZE
TOp 25 18(42.9) 16(38.1) 6(14.2) 2(4.8)
26-100 55(50.5) 35(32.1) 16(14.7) 3(2.8)
Smaller than
top 100 56(52.8) 32(30.2) 17(16.1) 1( .9)
ACCORDING TO FINANCIAL INTEREST IN CATV
Own CATV 37(45.1) 30(36.6) 14(17.1) 1(1.2)
Non-owner 93(52.8) 53(30.1) 25(14.2) 5(2.8)
ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

Own CATV
within B 18(47.4) 13(34.2) 7(18.4)

Non-owner
within B 97(52.2) 60(32.3) 24(13.0) 5(2.7)
ACCORDING TO PRESENCE OF CATV.SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV'within

B contour 117(50.9) 75(32.6) 33(14.3) 5(2.2)
NO CATV
within B 12(50.0) 7(29.2) 4(16.6) 1(4.2)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 72(46.2) 60(38.5) 23(14.7) 1( .6)
Not imported 30(58.8) 12(23.5) 8(15.7) 1(2.0)
Don't know 23(57.5) 8(20.0) 5(12.5) 4(10.0)

110

Analysis.--The descriptive categories are presented
above to show how little difference of Opinion existed among
various types of managers. It is interesting to note that
over 50% of all those who reSponded thought that our broad-
casting system will change to a "wired City" method of

distribution.

Questionnaire Itemellee25

Rationale.--Approximately one month before the question-
naire was mailed to all commercial television station mana-
gers, the NAB-NCTA compromise agreement was proposed.
Opposition from broadcasters had been reported in the trade
press but no official action had yet been taken by the NAB.
There had been some speculation that broadcasters would bene—
fit more from the compromise than they would from legislation
which might be passed later without previous agreement be-
tween the parties involved. Against that background, the
managers were asked their opinion of the prOposal.

The guestion.--Do you agree with the recent CATV compro-
mise agreement which was prOposed by the National Association

of Broadcasters and the National Cable Television Associa-

tion?
NO NO
YES Ne OPINION ANSWER
Total

Respondents 25( 9.7) 189(73.3) 39(15.1) 5(1.9)

UHF

Single
station

GrOUp owner

Network

Independent

TOp 25
26-100

Smaller than
tOp 100

Own CATV

Non-owner

Own CATV _
within B

Non-owner
within B

111

NO NO

YES NO OPINION ANSWER

ACCORDING TO TYPE OF STATION

14( 7.7) 144(79.1) 21(11.5) 3(1.6)

11(14.5) 45(59.2) 18(23.7) 2(2.6)

ACCORDING TO TYPE OF STATION OWNERSHIP

15(13.6) 76(69.1) 17(15.4) 2(1.8)

10( 6.8) 113(76.4) 22(14.9) 3(2.0)

ACCORDING TO NETWORK AFFILIATION

17( 7.7) 171(77.7) 28(12.7) 4(1.8)
8(21.1) 18(47.4) 11(28.9) 1(2.6)
ACCORDING TO MARKET.SIZE
4( 9.5) 25(59.5) 11(26.2) 2(4.8)
.11(10.1) 82(75.2) 13(12.0) 3(2.8)
10( 9.4) 81(76.4) 15(14.2)

ACCORDING TO FINANCIAL INTEREST IN CATV

10(12.2) 62(75.6) 9(11.0) 1(1.2)

15( 8.5) 127(72.2) 30(17.0) 4(2.3)

ACCORDING TO FINANCIAL INTEREST IN CATV
WITHIN GRADE B CONTOUR

6(15.8) 27(71.1) 5(13.2)

16( 8.6) 135(72.6) 30(16.2) 5(2.7)

112

NO NO
YES ug_ OPINION ANSWER
ACCORDING TO PRESENCE OF CATV SERVICE WITHIN
GRADE B CONTOUR OF RESPONDENT'S STATION

CATV within J
B contour 22( 9.6) 167(72.6) 36(15.6) 5(2.2)

No CATV

within B 3(12.5) 18(75.0) 3(12.5)

ACCORDING TO IMPORTATION OF RESPONDENT'S
SIGNAL INTO DISTANT MARKET

Imported 17(1O.9) 109(69.9) 29(18.6) 1( .6)
Not imported 6(11.8) 38(74.5) 7(13.7)
Don't know 2( 5.0) 31(77.5) 3( 7.5) 4(10.0)

Analysis.--Without more information, it is impossible
to cite reasons for the differences among the above cate-
gories. However, it should be noted that some groups of
managers who indicated low negative responses had a much high-
er "no Opinion" percentage than the grOUp as a whole. Also,
it is interesting to note the similarity in response from the

CATV owners and non—owners.

Summary

The results of this portion of the questionnaire indi-
cate clearly that a majority of the commercial television
station managers who participated in the survey had what must
be classified as a consistently negative, or pessimistic,

attitude toward the development of community antenna

113

television. In answer to only one question, "Is a local sta-
tion's competitive position improved when its signal is
imported into a distant market by a CATV system?” did more
managers respond in a positive, rather than negative, manner
toward CATV and, then, by a very small margin.

The respondents who were most favorable toward cable
television were: (1) managers who are involved financially
in CATV, (2) operators of stations in the top 25 markets,
and (3) the managers Of independent stations.

The possible reasons for differences among categories
of stations are speculative. The manager who is also an
owner of a cable system might be expected to be more positive
about the prospects of CATV than the manager who does not
have any financial interest in cable TV. It is interesting
to observe in the responses to some questions, however, that
the differences between these two categories were smaller
than might have been expected.

In the top 25 markets, only three cities have as few
as three commercial television stations; nine communities
have four stations; six markets provide five different sig-
nals; four of the top 25 have six stations; two markets,
.New York and San Francisco, have eight commercial outlets;
Los Angeles has eleven licensed television stations. In the
remainder of the top 100 markets, only six cities have five
commercial stations, while fourteen provide four signals.

The other fifty-five cities have three, or fewer, TV

114

outlets.11 It can be seen from these data that audiences

in the tOp 25 markets already have a greater variety of
channels than is available in markets 26 through 100.
Therefore, CATV is less likely to provide additional frag-
mentation which might adversely affect existing viewing pat-
terms. In contrast, the addition of channels in two- or
three-station markets could have great impact.

The independent station, particularly the UHF outlet,
sees in cable television the opportunity for equality on the
viewers' sets. Also, it is the non-network affiliate which
is most likely to be imported into distant markets. The
manager of that type of station sees the increase in audience
and area coverage as advantages which he might use in compe-
tition with the network affiliate, which usually enjoys the
strongest position in a market.

One observation which might cover most responses to this
questionnaire is that managers seemed to reSpond in a manner
which indicated their concern that CATV should not Upset our
present system of broadcasting or adversely affect the wel-

fare of the individual stations which compose that system.

 

ll"Television Market Rankings," Television Factbook,
1968-69 Edition/No. 38 (Washington, D.C.: Television Digest,
Inc., 1968), Service Volume, pp. 40a-43a.

CHAPTER IV

REPORT OF FINDINGS FROM PART III OF
"A SURVEY OF THE ATTITUDES OF COMMERCIAL TELEVISION

STATION MANAGERS TOWARD CATV"

Rationale for Part III of Survey

Part II of the questionnaire gave the managers of the
commercial television stations the opportunity to indicate
their attitudes toward the major problems related to commun-
ity antenna television. Part III was included so that the
respondents might express themselves beyond the simple check
of a reSponse category. The questions which were asked in
this section concerned those aspects of CATV which might af-
fect a station most directly now, as well as in the future.
It was also hOped that the knowledge and experience of the
managers as reflected in their responses to the questions in
Part III, would provide insight into the future directions
and relationships of CATV and the television broadcasting

industry.
Report of Survey: Part III
A total of 208 Of the 258 reSpondents answered some

portion of Part III of the questionnaire. After a review of

115

116

all responses, answers to each question were separated into
categories in order to facilitate the reporting of the data.
Under each category, representative reSponseS, or replies
that were particularly interesting or provocative, are re-
ported. It should be noted that this section reflects the
variety of Opinions of the managers who participated in the
survey rather than representative prOportions of particular
attitudes. The analysis which concludes the report of each
question does indicate, however, the predominant Opinion,

or Opinions, which were expressed.

Questionnairepgtem III, 1
The FCC has prOposed rather extensive rulemaking regard-
ing CATV. Briefly outline any additional or alternative

regulations which you feel would be apprOpriate.

Responses to question 1

Agreement gith prgpgeed regulations.--

I look Upon CATV value as an extension of TV service
to communities which do not receive free off the air
three network services, one independent, and one educa-
tional channel. Beyond this service, CATV Should be
limited to local public service programming, time, weather,
and other services such as stock markets, etc., on a non-
commercial basis.

Distant signals should not be imported into any
markets that have all the network services available from
local stations. CATV should be permitted to carry only
the local network stations except where one or the other
net services are not available locally. CATV should be
permitted to carry independent and ETV signals also but
not over local signals Of same.

Basically, I am in agreement with the prOposed rule-
making. Certainly in the area of protection to the tOp
100 markets and in regards to non—broadcast ownership.

117

Expansion of present preposed rulemaking.—-

Most important is restoration of Grade A and B con-
tours as area of protection. 35 miles is insignificant
and would thoroughly lose marketplace, as we have shown
here. 60-70 miles is more adequate, with overlaps being
evenly divided between overlapping stations. What is
sense of 5 megawatts of power for serving rural areas if
35 miles is all protection allows. Strict limitation of
CATV to serving stations in whose area cable operates.

In short, little or no "importation." Complete program
exclusivity for life of contract is vital. Programs

cost stations too much to have CATV dilute value with un-
restricted duplication Of syndicated material. NO com-
mercials, entertainment originations on CATV. Full COpy-
right liability on basis Of circulation and pro rata costs
for programs, per channel, unless CATV carries only local
or area stations to areas which have signal difficulties.
This was original concept of CATV and it should not be
allowed to unfairly compete with its own source of pro-
grams. This is parallel to laws restricting movie pro-
ducers from distributing and vice versa.

Increase in protection provisions of rulemaking.--

Smaller market broadcasters need help more than
larger market Operators. .NAB TV board is irresponsive
because it is dominated by multiple owners, etc.

It seems the protection to free TV is slanted toward
the larger markets (tOp 100) where the economics are such
that they (TV stations) need little protection. In this
market (3 V's) none Of the stations are doing well. CATV
would certainly fragment the audience to the point that
one or more would cease Operations, at least at present
level of service.

CATV should be restricted to signals received off
air and microwave should not be licensed to import sig-
nals not available off air. TOp 100 markets should not
be given protection not afforded all markets. In other
words, why import signals into my community if a larger
community cannot import my Signal?

If CATV is allowed to sell commercials, it will force
small market television broadcasters out of business, thus
ending free television for the average and below average
income families.

Need for strict non-duplication protection and technical
standards.--

I; CATV must exist, and if FCC is federal agency for
regulation, absolute regulations should be in effect, and

"x

118

strongly enforced quaranteeing total protection from
duplication, not only of live net programs, but also de-
layed programs and first run of syndication programs.
Regulations should require individual CATV systems to
obtain necessary program data from the stations carried
on the system for determining duplication. Absolute
technical standards should be required to insure adequate
reception in the home. If local program origination is
permitted, same criteria should apply as that for existing
commercial TV stations for application of license and
license renewal. '

”Grandfathering" clauses afford stations little pro-
tection against established CATV'S. Existing regulations
need enforcement and supervision or Spot checking re:
carriage, non-dUplication and quality.

CATV should be licensed and strict technical require-
ments laid down with heavy penalties for non adherence to
the non-duplication rule.

The prOposed rules have no substance. We have a
large CATV system in our area. Subscribers are constantly
complaining of the poor service and signals supplied.

The proposed rules don't actually help this situation at
all.

Need for COpyright liability.--

Cable systems should be required to have permission
to rebroadcast signals of any broadcast station, the same
as when a translator and a station must have permission
to rebroadcast.

The survival of broadcasting requires the imposition
of COpyright laws on CATV.

Cable TV should be allowed to deve10p in any manner
they wish as long as they are not allowed to do it by
stealing our programs which cost us a great deal of money
to produce and which we consider as our prOperty. If they
want to program, then let them do it on their own. Let
them buy all of the expensive production equipment and let
them buy all of their own programs. -Don't let them steal
our product.

CATV systems should be made to pay a fee to each
station from which it takes a signal. Tariffs could be
determined by State Public Utilities Commissions.

Limitation to auxiliary service.--

The unregulated growth of CATV wired systems has
the potential of making a shambles out of the whole

119

system of the FCC table of allocations both for radio

and TV--which, after all, is the foundation for our broad-
cast service in this country. CATV can provide auxiliary
service but it should do so in such a manner as not to
disturb local service obligations of radio and TV stations
who are assigned to serve specific markets.

Should be allowed to distribute signals into areas
where they are not available—-the original purpose of
CATV--nothing else.

I believe CATV systems should be required to carry
all stations whose signals are grade B or better in the
CATV service area-—and no others-~and that they should be
required to carry these stations only on each station's
assigned channel.

SUQplement to regular TV and responsible to audience.--

CATV must have total broadcast reSponsibility, in-
cluding public service, local news and fairness requires
ments--they should also bear some of the program costs.

CATV should SUpplement the established television
system. Many peOple have gone out on a limb to provide
excellent TV service--why should a leech take over?

Whatever regulations are necessary to prevent the
country's free, over-the-air, local broadcasting system
from being Slowly changed into a fee, cable (and thereby
restricted to those fortunate to live in front of the
cable) and national system. Local viewers will lose
access to free, over-the-air local news, local weather,
local politics, local public service and local advertising.

Concurrence with trade association_prgposals.~-

Am a firm believer in minimum government regulation--
feel that prOper approach is furthering of negotiations
between NAB and NCTA.

We concur with the entire MST [Association of Maximum
Service Telecasters] proposal and feel that NAB has not
written a clear compromise agreement.

Reduction of regulation.—-

FCC should not have any jurisdiction over CATV in
any way.

I believe we should adhere to the private enterprise
approach and let the demand and need of the public make
the determination--not legislation or complete regulation.

120

One Simple principle for real and permanent compro-
mise: let CATV agree to carry only TV programs. Let
broadcasters agree CATV may carry as many TV programs as
it can provide with no leap—frogging or other restric-
tions. The public interest is the controlling factor and
the public interest is clearly that the public should
have ell the service that can be made available.

Miscellaneous.--

The suggestion re seeking permission from distant
station before a CATV can bring its signal into any mar-
ket is fatuous and absurd. What station would refuse to
add homes to its audience?

Do away with CATV except in communities with no
local stations.

New direction.--

The real future of CATV is in transmission of a wide
variety of services, only a few of which will be designed
for a mass audience. A CATV facility cannot and should
not be the creator of all these varied program services.
The Commission should decide in the very near future if
CATV is to be a common carrier under a designated monOpoly
arrangement with appropriate tariffs and profit limita-
tions, if it is to be permitted to be a common carrier on
some channels and program originator on others, etc. .The
evolvement of the full service will be a very complicated
procedure both with reSpect to the market place and tech-
nical facilities. Intelligent regulation that will make
possible the orderly development of a SOphisticated system
will be highly desirable and very difficult to achieve.

Analysis Of responses.

Most managers who indicated additional or alternative
regulation Of CATV used present or prOposed rules as the
basis for their comments. Therefore, the suggestions tended
to be ones of increasing or decreasing the degree of regula-
tion in a given area of concern. Exceptions to this general

pattern of reaction were those who recommended elimination

of, or significant reduction in, any type of government

121

involvement in cable television. Only one manager, who is
cited under the category of “new direction," indicated any
concern or awareness of the broad problems of interrelation-
ship between today's use of community antenna television and
tomorrow's potential in terms of the variety of services

which may be provided.

Questionnaire Item IIIL 2
What local services, if any, can a CATV system originate

which are not feasible over a regular broadcast TV channel?

Responses to question 2

Tabulauion of service§.-—In answer to this question, most
respondents listed the local services which might be provided
by CATV. Some lists contained several items, while others
indicated only one or two. .The tabulation below is a frequency
count of the number of times each service was mentioned by

the 190 managers who reSponded in some way to this question.

 

 

Local CATV Service Times Mentioned
None 49
Weather 47

City council meetings and local govern-
ment activities , 36

Local civic functions and public service
activities 29

Local news or continuous teletype
printer 29

Stock market reports 27

122

Local CATV Service Tgmes Mentioned

Limited-interest or very locally

oriented programming 25
Continuous time service 19
Local sports 18

School activities, including board Of
education meetings 17

Commercial services, including classi-
fied advertising 7

Shopping and billing services 5

P

Educational television programming

Community service in areas without
local TV

Background music

.Surveillance of buildings and streets
Meter reading

Computer service

NewSpaper printout

Foreign language programming

Common carrier

l—‘l—‘HNNNCNPIP‘

Pay TV

Extended replies.--Although most responses to this
question consisted of the simple enumeration of types of
service, some managers explained their answers. Representa-
tive replies are quoted below.

VAS a television station manager, I have numerous
programming alternatives ranging from drama to a local
school board meeting. But, since we operate on one

Channel, I can select only one of these programs at a
Specific time. And.due to the nature of our business,

123

this program usually must have wide appeal among viewers.
As a cable system Operator with 12 to 20 Channels at his
diSposal, he can place all of the alternatives on chan-
nels and let the viewers make the choice that the tele-
vision station manager has to make at this point in our
communication deve10pment.

We believe that a CATV system can originate pro-
grams that have a very limited appeal, such programs not
lending themselves to being placed on a television station
having a much wider audience. Such programs as interviews
pertaining to individual church activities, to individual
civic club activities, and any other Similar type local
grOUp, could very logically be interested in having infor-
mation broadcast on a CATV system, thus making available
to those persons in the community interested in the
particular activity. In other words, we believe that CATV
can perform a service of a local nature so limited in
scope that it could not possibly lend itself to television.

If CATV is required to adhere to commercial TV engi-
neering standards, none. If CATV practices are used, any
small community gathering could be televised on CATV.

Most peOple do not realize that television broadcasting
entails more than pointing a cheap Japanese camera in the
general direction of some activity.

Continuous time/temperature/Weather--local political
discussions-—coverage of city council and county supervisor
meetings--any Ipformational programming of a purely local
political/civic or social action nature. Feasible was not
the right word to use in this instance. All licensed
broadcasters already carry, in some measure, news or
public affairs programming applying to each of the tOpics
listed above. However, CATV systems' sole saleable com-
modity is the entertainment programming they pick up.
Without it they would not exist. To further fragment
entertainment seeking audiences in this most unfair manner
will eventually kill free local TV.

This horse is dead. Certainly they could "broadcast
the Town Council Meeting every Monday",-—but council af-
fairs are mostly dull recitation of rezoning please,
budgetary matters, etc. which have previously been dis-
cussed and decided at the corner drugstore that morning,--
to which so few would view and listen that it becomes an
exercise in regulatory futility. It looks good on paper,
makes regulators feel warm with accomplishment, but the
customer bought the service for a far different reason.

CATV Should not be allowed to originate any local
programming. This is what commercial radio and TV sta-
tions are licensed to do.

124

Analysis of responses.

It should be noted that over one-fifth of the respondents
indicated that CATV can provide no local service which is not
feasible over a regular broadcast TV channel. AS indicated
in the tabulation of Local CATV Service on pages 121 and 122,
most of the other managers cite the most common existing
originations which are available on cable systems. Very few
responses indicated an awareness, or an acknowledgment, of
the ways in which community antenna television may supplement
off-the-air TV with services which have no relationship to

broadcasting.

Queetionnaire ItempIIIL 3

Increased demand for spectrum Space has required reexami-
nation Of current utilization. One of the suggestions has
been to change television from its present broadcast distribu-
tion system to a national cable, or non-broadcast "wired city",

concept. Comment on this possibility.

Responses to question 3.
Need for improvementuip Spectrum allocation§,--

The needs Of additional Space by the mobile services
have been greatly exaggerated. Better management and
assignment of existing Space would solve current and
foreseeable problems.

Such a change would be a complete surrender to those
elements in the trucking industry and the military who do
not want to do the hard work necessary to utilize their
present Spectrum space more efficiently. Obviously, a
wired system would be more expensive for the public than
the present one; the public would then be paying for the
convenience of the land mobile services.

125

More discriminate control over Channel allocations,
thus alleviate crowding. Vigorous deve10pment of UHF.
Possible phase-out of VHF channels which would be made
available for government uses, etc. and relieve demand
pressure for Spectrum Space.

There is no problem with Spectrum space in our area
(western South Dakota, western Nebraska, and eastern
Wyoming). Also, I would believe that the spectrum Should
be utilized so as to provide maximum benefits to the
public. I would think a broadcaster serving thousands
of peOple on a frequency is providing a greater service
to more peOple than most two-way communications uses
which reach only a relative handful of peOple.

Present pressure is the result of:

1. Unrealistic demands by military and commercial
firms.

2. Poor, shameful assignment of presently available
TV Channels on the part of the FCC; the VHF should have
been phased out as originally suggested.

3. Similarly, allowing both AM and FM to co-exist
is poor stewardship.

It may come to that. However, the lesson to be
learned here is to for Heaven's sake think ahead so we
don't wind Up with another broadcast miasma based on in-
competent planning and flagrant politics. The present
2-way users scream is not justified: the frequency space
alloted is adequate if prior planning had been applied by
first government, then manufacturer, then salesman, and
finally user.

Telstar, AM, FM, VHF, UHF, videotape, computer phone:
from one little box.

Eeaeibility questioned.e-

Reduces future potential of out—of-home viewing.
Reduces feasibility of portable sets picking up "air"
Signals.

Too costly. WOUld put local stations out of business.

Politically, this will not go.

Not economically feasible.

Beautiful from theory standpoint but at present
state Of technical art, rather impractical.

Do not feel that industry or viewer is presently
ready.

126

Reduction or elimination of TV service to rural areas.--

Would eliminate rural coverage. Requires viewer to
pay for his TV service through monthly subscription.

This would be okay for the city residents who can
afford the monthly payments. What happens to the rural
audiences who cannot be feasibly wired or to low-income
citizens who can't afford the tariffs and who now depend,
by the millions, on advertising supported commercial
broadcasts for information and entertainment?

This is a very real possibility with the danger that
those families living in rural America would then be de-
prived of television, as CATV Operators will not provide
service to thinly pOpulated or remote areas. Only those
families which could afford to pay monthly or even on a
program by program basis would be able to receive tele-
vision. Commercial station operations could not Operate
with the wired TV concept as we do today. Public service
programming and local community interest programs would
become a thing of the past.

Disenfranchises poor and rural. Anti—democratic.
.Destructive of greatest communications force on earth.

It would be unthinkable to change the present broad—
cast distribution system at this point, because of the
impracticability of wiring the numerous small communities
now served by Off-air reception. For instance, it would
not be a practical investment for any company to wire a
community Of 150 homes some 30 miles away from 3-station
broadcast stations. This is, of course, assuming there
would be no government subsidy for such an Operation.

Wired city concept could leave rural areas without
service. Cost of wired city concept could preclude
"small company" ownership of CATV.

CATV has not yet wired sparsely-populated areas
where line costs are too great. How can such areas be
included in such plan-—or will they lose their only TV
service Off-air? On the other hand, would such prohibi-
tive costs just be passed along to present subscribers?

Reduction in localupublie service programminq.-—

This would.destroy the basic public service concept
of television. .Even with local public service under this
system it would be on a separate channel and therefore
not viewed. Fact is majority of public can't be bothered

127

to view culture and public service. This would also
lead directly to pay TV--public forced to pay for same
programming now received freei

The possibility appears likely, but from our view
is not in the public interest. Money making is the
objective of all those in the scramble.

There goes all local service, for nets would just
buy wires from a utility, bypassing affiliation agree-
ments with on-air broadcasters.

Increasing attention to local programming and more
sensitivity to community needs will make "wired city"
concept less feasible.

Would eliminate or make economically impractical
all local interest programming.

Radio and TV as presently constituted provide a
broad service of entertainment, public service, news,
Special events as well as a means Of communicating
important government messages to all the population
Free, without discrimination or need of wires. What
could be more equitable or desirable? we had better
keep it §§.A§1

Opposition to elimination of free TV.--

We are unalterably Opposed to the "wired city"
concept. There is nothing "free" about subscriber paid
TV. The public's interest cannot be served by giving
CATV'S the carte blanche ability to compete with, or
replace, local stations for audiences, and all that por-
tends, without considering what must inevitably happen
when local stations would be forced to reduce or eliminate
their investments in local services. How stUpidly naive
and ignorant are those who would encourage the replace-
ment of free TV with a system which would remove an indi-
vidual's right not to have to pay to watch. Nor is there
any assurance that quantity will automatically improve
quality. .The contrary is more likely.

Only U. S. free broadcasting can insure the tremen-
dous stature vis a vis all other systems.

This is a possibility--if it happens, the vast
majority of lower income peOple will be denied TV.

Will convert all TV into pay TV thus removing rural
peOple and poor from access to TV. Contrary to public
policy.

128

An anathema--putting a box office into every home
and destroying free TV service which has been the best
in the world.

This would mark the end of free television as we
know it. Free TV is necessary for the future of this
country.

Qpposition--no reason stated.--Several managers stated
1:11at they were opposed to the concept of the wired city withti
(DIJt stating reasons.

Alternate poseibilitieS.-—

Quite possible and even likely pending deve10pment
of satellite to home transmission. ;f_this (wired city)
concept prevails and is COUpled with free importation of
distant signals, it will eventually mean drastically
fewer local stations. Perhaps one "local" station in
each of the first 50 or 60 markets.

Comments cannot be in terms of black and white.

The probable communications system of the future will
employ conventional broadcast facilities, cable, and
satellites. The blend will be necessary to serve as many
people with as many different kinds of service as is
technically and economically feasible.

We do not feel that the elimination of television
as we know it today to be replaced by a national distribu-
tion system by a national cable will ever come to pass.
Other electronic deve10pments will take place before the
national cable concept could ever materialize. We believe
that the local television station will continue to exist
in one form or another through the years and will never
be completely replaced. However, the actual function of
a local television station may change in the foreseeable
future. .Distribution of television Signals by satellite
direct to homes will in the long run eliminate any pos-
sible need for a national cable.

Probability of creation of the "wired city" concept.--

Some areas will be heavily cabled as the only means
of reception. Downtown areas will be wired for business
transmissions. .Flat areas that do not need leased lines
for business or TV will be the last to be wired. Every
communications wire laid underground will be TV and data
transmission capable. CATV will compete with telephone
for data transmission.

129

I believe that despite the efforts of the broad-
caster and interested grOUps, that within 15 years, free
TV will be almost extinct. And even though we fight the
CATV'S, they will eventually win the battle.

Unless the FCC acts promptly, this will become a
fact.

Quite possible, but expensive and long range.

Good possibility—-will not replace conventional
broadcasting until signal can be fed through electric
lines.

I think the possibilities are good and that "broad-
casting" will phase out to a "wired City".

If CATV is technically improved and allowed to net—
work, it is inevitable that wired TV will replace off-air
TV. Microwave deve10pments will allow low cost rural
service.

Think it is a real possibility, but wonder what will
happen to investment in small TV stations.

I think it will happen. In my Opinion the "wired
city" concept is the most practical--may take 10 years
but it's coming. Unlimited programming would be avail-
able. Only question is economics. If the CATV'S in the
nation were tied together, there would be no need for TV
stations. The 3 networks would be on the system as well
as others, who may prOSper in different forms of program-
ming. Systems could originate programs to needs of each
community, sell advertising, etc. Satellites to ground
(homes) would cover the white areas not able to receive
TV by cable, say 3 networks. Consequently the entire
nation would have at least 3 networks plus unlimited
local programming in major markets and all towers could
come down and TV stations go out of business and Spectrum
allocated to other services. "What is good for the coun—
try and its peOple is not always easily accomplished."
[sic]

2¥fialysis of reSponseS.

The reaction to this question was Similar to those which
\vere reported earlier. .Most managers seemed to reflect a fear
1ihat a change in the present system of signal distribution

‘vould have an adverse effect upon television programming

130

service to the audience. It is difficult not to conclude
1:1123t the respondents consider "free" broadcasting, as we know
i_1: , to be incompatible with the "wired city" concept. The
last response above is an exception. Very few Opinions were
€i>§pressed which indicated the belief that television service

might be improved as a result of a national cable system.

Sleuestionnaire Item III, 4a

Note: Answer this question only if your market has
*Eacisting CATV systems. What has been the effect of CATV on

Your station ?

Responses to question 4a.
Fragmentation of audience.-—

It allows large market stations to tear apart audi-
ences of small market stations. The practical effect is

to make the big grow bigger and the small fight harder
for existence.

Harmful. Difficult to increase circulation figures
even with non-duplication. .Even more difficult to com-

pete with large-budget outside stations in non-network
hours. L

In a relatively small market it has fragmented a
limited audience. One station in this market is in
severe financial problems. The CATV systems have more
subscribers than that station has average audience.

Disastrousi 30-40% of local audience is lost to
CATV .

Increasing fragmentation of viewing to local chan-
nels; especially during non-network programming periods.

Reduced our audience Slightly.
Lower audience, higher cost per thousand and in-
creased outside station penetration. .Latter is resulting

in more gravitation of shopping to adjacent larger
markets.

131

We are definitely not getting the credit for all
the homes viewing our station on the ARB's and Nielsens
because of the confusion of CATV carrying stations on
channels other than their assigned channel numbers.

We are small market with heavy CATV penetration.

It has fractionalized audience--forced US to compete
with much stronger financed metrOpolitan station--even
caused great animosity of public toward our station when
we acquired exclusivity. Poor translation of our signal
has caused many problems. Great difficulty in acquiring
sound financial Operation, change directly traceable to
exclusivity.

Reduction of advertisingyrevenue.--

Has badly reduced our revenues and our ability to
give maximum service in the community.

Audience has been fragmented--holding or decreasing
audience levels in different day parts. Local advertisers
increasingly wary of effectiveness. Some success of im-
ported stations acquiring advertising budgets, which would
have been placed here, on basis Of CATV penetration. With
rising costs, have been unable to improve income.

Our local CATV system programs one channel commer—
cially and sells advertising against us. If they were
honest about it, it wouldn't be so bad, but they repre-
sent themselves as being the local TV station. When the
customer mentions our channel, they lead them [sic] to
believe that they are representing us and that the adver-
tising will appear on the air to non subscribers. They
hurt us some but mostly they are killing themselves.

They degrade our Signal to favor their channel which is
adjacent to us on the cable.

Has affected our ability to get national and
regional advertisers.

Inadequate non-dUplicationeprotection.--

We have never received adequate protection from the
cable systems Operating even within our grade "A" Signal.
This has_lost US untold audience measurement. -Some
cable companies placed us on cable channels which were
far inferior to our Off—the-air signal, which caused many
viewers to watch our "unprotected" network programming on
a competitor's station carried by the cable system.

We have not been afforded protection from distant
stations and it fragments our audience potential.

132

.Reduced audience until we were able to secure non-
duPlication rights. But non—duplication right is now
being questioned.

Degradation of Signal.--

It has degraded our picture quality and caused a bad
public image among the businessmen who are the majority
of the subscribers.

From a home standpoint we have been watered--from
a signal standpoint the cable has degraded us to compare
with distant signals. Quality of signal the greatest
loss.

Lope of Channel identification.--

Confusion. Viewers on CATV don't know what station
they're viewing. Those with diaries must indicate in-
correct stations.

It may have broadened outer limit of reception, but
the audience is difficult to measure. .In addition, I
feel that many of our programs are mishandled and rebroad-
cast on different Channels. Identity is lost, as is con-
trol of our product quality.

Liptle or no effeep,--Many managers have indicated that
CATV has had negligible effects Upon their stations. Most of
these answers were one or two word replies.

CATV as an asset.--

Enables us to get into many homes otherwise unavail-
able because of terrain, antenna or conversion problems.
.Helps on competitive edge with grandfathered VHF stations.
Conversely, CATV forces US to compete with stations we
would not otherwise have to face.

Improved coverage.

Since we are a new UHF in an existing VHF market,
CATV has probably given us a plus in home penetration--
the viewer does not have to be concerned with a "Special"
antenna.

It has been good for the station providing the CATV
systems provide the prOper services and Signals.

133

Better service to the viewer. (It's the future that
is disturbing--but, of course, being disturbed about the
future is not very unique.)

Since CATV systems in our market serve, by and large,
the original purpose of CATV--to extend broadcast signals
into areas which, due to distance and/Or terrain, receive
inadequate television service--our station has probably
been helped by the resulting increase in audience.
Distant signal importation by systems in our market con-
stitutes an insignificant factor.

We have used [CATV] to an advantage.

Given viewer choice. Decreased pressure (criticism)
on programming. Gain about what we lose through CATV.
Helped news rating by carriage outside "B".

[CATV has] helped by making [our station] the prime
network affiliate on one large system.
Analysis of reSponses.

It Should be pointed out that, of the 142 managers who
reSponded to this question, 43 reported that CATV had little
or no effect on their stations, and an additional 25 managers
indicated that cable systems had been an asset. In other
words, almost 48%)of the respondents were not negative in
their responses. This reaction is in marked contrast to
Opinions which have been expressed regarding potential effects
and proposed regulation of CATV. It appears that even less
negative feeling would exist if current regulations were en-
forced. Many managers exPressed concern over the fact that
they were afforded inadequate non-dUplication protection and
that their signals were degraded by cable systems with poor

technical standards.

134

Questionnaire Item III, gp

Note: Answer this question only if your market has
existing CATV systems. ~What do you see as future effects of
CATV on your station and on the deve10pment of commercial

television in your market?

Responses to question 4b.
Fragmentation of audience.--

CATV has already drOpped this market from 45th
ranking to 59th ranking. The cost Of that loss is 2 to
4 million dollars per year in unrealized revenues due to
circulation losses. We have documented this rather
thoroughly for FCC, NAB.

If distant signal stations are allowed to come into
our market via cable in numbers, there is the possibility
that our audience will become so fragmented as to cause
us great economic damage. There is the distinct possi-
bility that we might not be able to survive. The cost of
Operating a station in a small market is practically as
great as Operating a station in a large market--of course,
income is much, much less.

Severe impact on audience and profits.

Continued erosion of audience will mean erosion of
our financial ability to perform the public service
that is expected of us by the Commission. Further de-
velopment of commercial television in this market will
be halted.

Initial acceleration Of UHF capability resulting in
larger audience. Eventual fragmentation of audience and
diminishing national Spot business in smaller markets.
Growth in local use of TV accompanied by higher produc-
tion costs for stations.

Deterrent to UHF Develppment.--

It would seem to me that uncontrolled growth of
CATV will certainly kill UHF exPansion in many areas\
that need extra service. We can use more broadcast
services that provide local and regional service to
viewers. Wholesale importation of big city signals into
small markets kills the allocations concept of the FCC
and creates serious if not disastrous economic problems
for small market TV.

135

Threat to development of UHF. Deterioration of
"local" station significance in marketplace.

Would kill deve10pment of UHF stations in market
and hurt independent VHF station.

‘Starting a new UHF station in a small market and
in the face of heavy existing VHF penetration is a
hazardous undertaking. SUperimposing a CATV system on
the market would serve to further fragment audience and
Sponsor's dollars and could possibly prevent the healthy
deve10pment of commercial television in our market.

General adverse effect.--

If the FCC lets down its present bars on distant-
signal importation, to a significant extent; if CATV'S
are permitted to support program origination by advertis-
ing or by per-program charges; and if networking of CATV
systems is permitted--the effect upon our station, as
well as other stations in the market, will inevitably be
adverse. Additional UHF stations would have little
chance of economic survival.

Unless CATV is regulated as to importing distant
Signals, it can have drastic effects on small market TV
stations.

A serious Uphill battles-eSpecially since FCC en-
couragement of local program origination by CATV'S:

Most serious aSpect is importation of 6 channels from
major market which is 100 miles away:

This depends on whether importation and originating
of entertainment programs is permitted. If they are,
we believe the effects could conceivably be disastrous
to free television.

With exclusivity of programming and limitation of
signals to 3 network, [one] independent and educational
[stations] we can survive financially and serve public
in small market. With unlimited signals, program origi-
nation and selling advertising by CATV'S I would be
seriously concerned about ability to continue economically
viable Operation. Certainly there would be no further
development of TV broadcasting, either VHF or UHF.

I think many CATV systems will cease to Operate due
to inability to make a profit. ESpecially so if they
are controlled as TV are [sic] controlled. If CATV is
permitted to use programs at no cost and permitted to
Operate any way they please they may force us to cease
Operation due to lack of revenue to Operate.

136

Evolution into "wired city."--

I expect to see CATV eventually replace broadcast-

CATV--short term panacea for lack of sufficient
broadcast facilities. Will be big, only to be replaced
by all purpose over—the-air communications utilities.

 

Will destroy national free TV unless rigidly regu-
lated.

Uncertainpy about future.--

Impossible to forecast because it's impossible to
predict, in the present chaos and hostilities, what the
future shape of CATV will be.

Depends on CATV rules when adOpted.

The future effects of CATV are essentially an un-
known quantity because of our type of market essentially
rural in character with no one large central city. CATV
will never have any large impact on television in this
market and should never be a hindrance to the further
deve10pment of commercial TV in this area.

Limited effect.--

Since I believe that we are seeing the emergence of
two systems of television, the advertising-SUpported sys-
tem and the viewer-supported system, I do not believe
that CATV will have any adverse effect on the development
of advertising supported television stations.

We think it is unlikely that CATV will have a sig-
nificant effect in our market area.

We can go along if distant signals are carefully
controlled within 60 miles. Can live with origination
and selling commercials. Otherwise, they can destroy us.

Barring an entirely new national communications pro-
file generated by regulation, we forecast that CATV in
this market will have very little effect on our televi-
sion station. Rather, we believe the real function of
future CATV is a proliferation of services different
than the conventional ones now being SUpplied by typical
commercial television stations.

Competition has never injured a responsible broad-
caster. We doubt that it (CATV) will destroy commercial
television, either in our market or in any market through-
out the U. S.

137

CATV as an asset.--

A local CATV Offers equal parity for a UHF station
since the signal is converted to VHF.

It can be complementary to off-the-air TV with
prOper regulation without undue harm if it does not work
to destroy the vehicle which allowed it to come into
being in the first place.

Good effects retaining CATV as is; adverse effects
should paid CATV be allowed.

Insures success of UHF.

Better pictures into more homes. .Sell more color
sets.

Reasonably regulated and competently run, CATV Should
aid deve10pment of commercial TV by providing larger
audiences and reducing true cost per thousand to adver-
tiser. *

Analysis of reSponses.

Of the 163 managers who responded to this question,
twenty-nine said that, in the future, CATV would have little
or no effect Upon commercial television in their markets,
while sixteen said that cable systems would be an asset.
Another twelve managers indicated that.they were unable to
predict possible effects. In other words, only 35% of the
respondents were either neutral or affirmative in their re-
sponses. This provides an interesting comparison with the
48% of the managers who answered the previous question by
indicating that they were not negative regarding effects
which CATV has already had upon their stations. This response

pattern is consistent with other results of the study which

seem to indicate that any adverse effects which cable has

138

had Up to this time are not as great as the potential prob-

lems which are predicted for the future.

Summary

The rationale for this section of the questionnaire
indicated two reasons for including Open-ended questions in
the survey: (1) obtaining opinions which would be more than
the simple check of a reSponse category, and (2) acquiring
possible insight into future directions and relationships of
CATV and the broadcasting industry.

As indicated in the responses which have been quoted in
this Chapter, the managers not only accepted the opportunity
to express themselves, but they did so in a frank and direct
manner. These answers Should prove helpful in understanding
some of the reasons for the attitudes which were reported in
Part II of the questionnaire.

Responses which might have provided insight into the
future of CATV were disappointing. .Most managers replied
to the questions in light of current situations. In general,
they were either unable or unwilling to consider alternative
circumstances in which their stations might be able to pro-
vide comparable or better television service. The obvious
conclusion to be drawn is that most commercial managers con-
sider the present television system to be SUperior to others
which might be develOped and that Significant changes would

be detrimental.

139

While the Opinions Of the managers who participated in
the survey indicated a desire to preserve the status quo, a
portion of the next chapter will be devoted to an exploration
of CATV as it relates to the distribution of television broad-
cast signals as well as its potential in providing a totally

new communications service.

CHAPTER V

SUMMARY AND CONCLUSIONS

Summary

As the CATV industry has developed into a significant
force in commercial television, the Federal Communications
Commission has adOpted the regulations which have been
necessary to meet changes as they have occurred. Most of
these policies have evolved slowly and have followed, rather
than preceded, the needs. At the present time, however, the
Commission appears to be trying to anticipate the potential
role of CATV in a national communications system. New rule-
making has been proposed and a "Notice of Inquiry" has asked
many provocative questions.

Although it may be possible sometime in the future to
look back at the actions of the FCC and hold it responsible
for some of the problems of cable television development,
this research would seem to indicate that such reSponsibility
would have to be shared by the television broadcasters.

AS indicated in the summary to Chapter III, most managers
responded to the questionnaire in a manner which indicated

their concern that CATV should not Upset our present system

140

141

of broadcasting or adversely affect the welfare of the indi-
vidual stations which compose that system.

The perception by the station Operators of a competitive
relationship between CATV and the television industry was
evident throughout the study. The feeling seemed to be so
strong that most of the commercial station managers were un-
able to see cable television in any role other than one which
was related directly to broadcasting as: (1) a TV antenna
service, (2) an importer of distant signals, or (3) the origi-
nator of television—type programming. This attitude was
particularly evident in the answers to question number 2 in
Part III of the survey where over one-fifth of the respondents
indicated that CATV could provide pp_local service which was
not feasible over a regular broadcast TV channel. In addition,
very few managers recognized potential non-broadcast CATV
services such as computer access, surveillance functions,
common carrier uses, etc.

The purpose of this summary is not to dismiss, as unim-
portant, the attitudes of the commercial television station
managers who participated in the survey. Rather, the inten-
tion is to indicate the very natural tendency of the managers
to react in a self-protecting manner to a complex and poten-
tially threatening situation. A Similar type of response
might have been expected if the survey had been sent to owners
of cable systems. In order to deal effectively with the

problems which surround cable television, objective criteria

142

need to be developed which represent not only the needs and
desires of the broadcasting and cable industries but also

those of the public.

Conclusions

 

Implications of research findiugs

Although interpretations, which are related specifically
to the data collected in this study, have been presented in
earlier chapters, several other conclusions, which have impli-
cations for the future of CATV, are suggested by the research:

1. One such conclusion is that, while the television
broadcasters who replied to this survey did not provide mepy
provocative thoughteeebout the develgpment of an effective
relationship between CATV and the television industry, the
future can still be exciting and challengiug. Ralph Lee
Smith, in his article in The New York Times Magazine, said,
"Predictions of what the cable might do in the future seem to

1 As

be limited only by the prognosticator's imagination."
indicated earlier, some cable systems already have begun to
provide new and valuable services. Such uses as surveillance
of a city's streets, computerized rating read-outs, and a
televised newspaper were not what might have been Classified

as primary concerns when CATV began at Lansford, Pennsylvania,

in 1950.

 

1Ralph Lee Smith, "The Battle Over Cable TV," The New
York Times Magezine, May 26, 1968, p. 35.

143

2. Another conclusion is obvious. Television stations
and cable interests are fighting to protect their investments
and to improve their competitive positions with as little risk
as possible. This action is natural in a free enterprise
system. However, the public interest aspect of broadcasting
dictates that television is not a typical business. This was
illustrated effectively in a speech by Frederick W. Ford which
was delivered when he was President of the National Cable
Television Association:

Historically, then, I think it is clear that the

"public interest, convenience and necessity" had great

meaning at the time it was adopted as a legislative

standard in the Radio Act. Its significance lay in the
contrast it presented to what had prevailed before.

Private interests were to be subordinated to thgee of

the listenipg_public.2

3. Mr. Ford also issued a forceful and idealistic chal-
lenge to the members of his industry when he urged them to
dedicate their "technological success to serve the public and

3 It does not

not attempt to make it the public's master."
seem likely that the CATV owners will accept this challenge
because most of them are businessmen who do not understand
the problems of local origination. While the broadcasters

could furnish the impetus which is needed, many of them per-

ceive cable television as unfair, or undesirable, competition

 

2Frederick W. Ford, The Polar Star of CATV, Address be-
fore 17th Annual Convention of the National Cable Television
Association, July 2, 1968 (Washington, D.C.: National Cable

Television Association, 1968), p. 5.

31bid., p. 10.

144

for their stations. Therefore, it seems logical to conclude
further that, if CATV is to become the complete and varied
communications system which has been predicted, the Federal
Commupgeations Commiesion and Congresseprobably are going to
have to take a more active andepositive role.

In another speech, on March 29, 1968, Frederick Ford
was critical of the fact that regulations which have been
imposed Upon broadcasting stations and cable systems reflect
". . . antiquated thinking and machinery better suited to the

4

era of crystal sets and earphones." He went on to say:

We must coordinate radio, telephone, satellite and
other means of wire and wireless communications into a
solid, meaningful pattern that replaces the haphazard,
hodge-podge arrangement which we have inherited from
the past. Our regulating programs must keep up with
our technology. If this is prOperly done satellites,
radio, television and cable will continue to grow as
viable parts of our mass communications complex.5
This line of thinking apparently was recognized when the
Commission formulated its “Notice of Proposed Rulemaking and
Notice of Inquiry,“ which was released on December 12, 1968.
Although that document dealt primarily with current Opera-
tional problems, it also raised some provocative questions

about the future:

(1) What is the apprOpriate relationship between CATV, com-
munications common carriers, and other entities (e.g., the

 

4Frederick W. Ford, "The Potential of Cable Television
and National Policy" (Speech presented at the Telecommunica-
tions Symposium of the Broadcast Advertising Club of Chicago,
Illinois, March 29, 1968), p. 11.

5Ibid.

145

broadcasters, computer industry, etc.) which now provide,
or may in the future seek to provide, communications services
in the locality?

(2) What is likely to be the nature of the services that could
be offered to the home or business under present and antici-
pated technology . . . ?

(3) Would the public interest be best served for the immediate
future by:

(a) Permitting or encouraging the entry to all would-be
newcomers, services, technologies and facilities in an atmos-
phere of free competition, letting the market place determine
the survival of the fittest, subject to . . . minimum regula-
tion . . . ; or

(b) Permitting tests of different systems or services
. . . to afford some basis in experience for decision as to
the best Ultimate structure before any particular system or
service becomes established on a widespread basis: or

(c) Undertaking to devise a master plan now, before new
facilities and services are inaugurated, to guide their
development?

(4) Is it necessary or desirable that there should ultimately
be a single cable . . . providing multiple means of communica-
tion to and from the home and/Or business and, if so, should
the complete system be owned by one entity or should there be
diversity of ownership or control of some aspects of such a
multipurpose communications system . . . ?

(5) Is it necessary or desirable that there be multiple facili-
ties providing means of communication to and from the home or
business--e.g., some combination of radio, cable and wire--
and, if so, what kinds of services should in general be pro-
vided on what kinds of facilities?

0 O O O O O O O O O O O O O O O O O O O 0 O O 9 0 O O O O O O

(6) What facilities would be necessary or desirable for trans-
mission through the streets, as Opposed to from the street to
consumer's premises, and what are the comparative advantages
or disadvantages of radio, cable, or some other mode?

(7) How should the local communication system or systems tie
into inter-city terrestrial and satellite facilities?

(8) What technical standards would be necessary or desirable
to achieve national and local compatibility and good quality
service to the public?

146

(9) How could the same communications services available
to homes in the city be provided to homes in rural or
other areas not now economically reached by the cable

0 O O 0 . O O O O O O O 0 O O O O 0 O O 0 0 O O 0 O O 0 O

(10) What should be the division Of regulatory functions
between federal and state or local authorities with
reSpect to the local communications system or systems

0 O O O 0 O O O O O O O O O O O O O 0 O O O O O O O O O

The foregoing merely touches on some of the ques-
tions which occur to us initially and is by no means an
all-inclusive listing. Among other things, the Commission
is also concerned about the effect of potential new
Specialized communications developments on present com-
munications technologies and services and, particularly,
the social, political and economic considerations raised
by such developments. . . .

If the FCC can deal successfully with these questions,
the CATV vs. television dilemma will be solved by the creation
of a new national communications policy. The result could be
one of the most exciting deve10pments in the history of com-
munications.

4. In light of the deve10pments reported, and the atti-
tudes expressed, it may be concluded that the broadcaster has
a great fear of theepotential impact of cable television.

When viewed objectively. however, CATV and television are not
as incom atible as they sometimes are made to _ppear.
Community antenna television is merely a means of signal
distribution. Broadcasting, on the other hand, is much more;

it is the communication Of ideas. If the television station

function were to be taken over by the CATV industry, the

 

6Notice of Proposed Rulemaking and Notice of Inquiry,
15 FCC 2d 442-443 (1968).

147

broadcasters would lose their battle by default. At the
present time, the television station uses a transmitter and
antenna from which to send its signal. If that same informa-
tion were to be distributed by wire or from a satellite, it
would be no less useful.

5. Although some broadcasters have financial interest in
CATV, the majority of owners are businessmen who have had no
previous eXperience with television except, in some cases, as
technicians. Therefore, most CATV operators are not gualegied
to create, write,uproduce and sell television programs. In
answer to a question which was reported in Chapter IV, a
manager said, "Most people do not realize that television
broadcasting entails more than pointing a cheap Japanese
camera in the general direction of some activity." The view-
ing public expects an acceptable level of quality in content
and presentation of the programs which appear on the tele-
vision screen. Most cable Operators are not competent enough
to deliver that quality.

6. Many people have complained that television does not
offer enough minority-interest programming. The commercial
station manager responds by saying that he must serve as
large a percentage of his audience as possible. However,
cable television Offers an excellent Opportunity tp_progpam
to minority tastes. While a broadcast Signal may reach every-
one within the coverage area Of a station, the potential

audience for a CATV origination is much smaller and much more

148

easily defined. It is still the television broadcaster who

is best qualified to produceeprogramming. Large broadcast
group owners prepare and distribute programs to individual
stations. What is to prevent stations from producing program-
ming for area syndication to cable systems?

7. Rather than fearing the possible adverse effects of
QATVL the commercial television industry needs to take affirma-
tiveeeteps to stuey its future role in the communicatione
system. If the FCC can provide the prOper guidelines, with
support from the Congress where needed, not only will both
the broadcasting and cable industries realize tremendous
economic growth, but the public also will benefit from the

creation of an improved electronic communications system.

Recommendations for Further Research

As stated in Chapter I, this study was designed to be
specific in its objectives. It was expected that the research
would raise more questions than it would answer. Listed below
are some suggestions for further study:

1. Information which would complement the results of this
study directly would be a surveyuof the attitudes of owners
9§_QATV systems. It would be useful to know how cable Opera-
tors feel about the present regulatory climate and what they
foresee as the future relationship between CATV and television.

2. Additional study should be made of the feasibility of

extensive local origination by cable facilities and the

149

possible effects which such service would have on local tele-
vision stations.7 While many commercial station managers
assume that the potential economic effects of CATV will be
adverse, a factor which needs investigation concerns the
possible future economics of cable systems. Can CATV purchase
or produce programs which will be competitive with those
provided by commercial broadcasting stations? Because a
single CATV system cannot deliver an audience as large as one
which watches an off—the-air channel, the amount of advertis—
ing revenue which CATV can generate might not be enough to
permit the purchase of programming that would attract viewers.
On the other hand, in a very small market, a local UHF sta-
tion, with its heavy expenses, might not be as feasible as

a good CATV service. .More research is needed to determine
relative potentials for financial stability.

3. Another important research project could be a survey
of the relatignship between the size of marketeyend the
factoreewhich have an effect Upon the stations in those
markets. AS indicated in the report of this research, mana-
gers of stations in the tOp 25 markets Often answered ques-
tions differently than did their counterparts in markets 26

through 100. This division should not be interpreted as

 

7One project in this area is being undertaken. In June,
1969, the Rand Corporation was given a grant of $165,000 by
the Ford Foundation to study the potential impact of CATV on
the television industry. The results will be turned over to
the FCC and will be released to the public. See ("Ford
Grant Backs Cable-TV Study," Broadcasting, June 20, 1969,
pp. 65-66).

150

definitive. It may be that markets should have been sepa-
rated for purposes Of this study into two grOUps of fifty
each. The important consideration is that the FCC has estab-
lished some of its rules on the basis of a tOp 100 market
category. This study indicates the need for reviewing, and
possibly reconsidering, that decision.

4. Research which might prove interesting would be a
comperison between attitude questions and answers to ques-
tions in multiple descpiptive categories. For example, how
do the response patterns pertaining to a particular question
differ among large market VHF stations as compared with large
market UHF stations, small market VHF stations, etc.? Again,
many assumptions are made about particular types of stations
and markets. More descriptive research is needed.

5. Broadcasters, at the industry level and at individual
stations, need to study potential relationehipe with CATV.
Although they may continue to Oppose cable television, the
station Operators need to be prepared to adapt their services
to whatever mode of distribution evolves. In answer to one
of the items in the questionnaire, 50.4% of the managers who
reSponded indicated that they thought that television in this
country would change to a cable, or "wired city", method of
signal distribution. The broadcasters who prepare for future
alternatives are the ones who will be in a position to con-
tribute most effectively to the further deve10pment of our

national communications system.

151

6. The fact that broadcasters are required to operate
in the public interest would suggest that a most important
recommendation for research would be for studies which seek
ppinionsyfrom viewers. Many managers feel that CATV systems
will cause stations to go off the air, or decrease their
local programming, and thus deny the public of a service
which the cable systems cannot, or will not, dUplicate.

Many cable Operators, on the other hand, claim that existing
local programming does not need to be affected. They argue
that the viewer is afforded a greater variety of service
through CATV than is available when reception is restricted
to off-the-air signals. While both sides present strong
arguments, it is the public which is affected most directly.
Therefore, viewers should have an opportunity to eXpress
their Opinions. When the FCC holds hearings on such matters
as CATV, testimony comes primarily from those who have fi-
nancial interests in the outcome. The Commission itself is
SUpposed to represent the people, but does it have enough
information to do so prOperly? In an article in Saturday
Review, FCC Commissioner, Nicholas Johnson, said that the
fate of CATV was "being determined in a grim political and
economic struggle"8 between broadcasting industry and tele-
phone company interests on one side and the CATV industry

on the other. He went on to say that, "Almost no one Speaks

 

8Nicholas Johnson, "CATV: Promise and Peril,
Review, November 11, 1967, p. 87.

Saturday

152

for the public."9

No claim is made that the above list of recommendations
represents all areas related to CATV which need further
study. However, one fact is inescapable. More information
is needed in order to develop and build an efficient and

effective national communications system.

 

9Ibid.

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"The Wording of a Compromise." Broadcasting, June 2, 1969,
pp. 24-25.

Speeches and Miscellaneous Materials

Ford, Frederick W. The Polar Star Of CATV. Address before
17th Annual Convention of the National Cable Television
Association, July 2, 1968. Washington: National Cable
Television Association, 1968.

. "The Potential of Cable Television and National
Policy." Speech presented at the Telecommunications
Symposium of the Broadcast Advertising Club of Chicago,
Illinois, March 29, 1968.

. “Statement on Parts III and IV of the Notice of
PrOposed Rulemaking and Notice of Inquiry in Docket
18397." Presented before the Federal Communications
Commission, Washington, D.C., February 3, 1969.

Jansky and Bailey Broadcast-Television Department. "A Remote
Retrieval Dial Access Television System." Paper pre-
sented at 45th annual convention of the National Associ-
ation of Educational Broadcasters, Washington, D.C.,
November 11, 1969.

National Association of Broadcasters and National Cable Tele-
vision Association. "Proposed Compromise Agreement."
Washington, 1969. (Mimeographed.)

APPENDICES

APPENDIX A

"NAB-NCTA Proposed Compromise'I

NAB-NCTA PROPOSED COMPROMISE--May, 1969

The National Association of Broadcasters and the National
Cable Television Association have been made increasingly aware
that constant conflict between the two industries which should
have compatible interests does not serve the public interest.
In consideration of this fact, the staffs of the two trade
associations have evolved proposals for consideration by
their respective Boards of Directors which, in the Spirit of
compromise, would allow both industries to move forward and
establish an effective national broadcasting communications
policy in the public interest.

The prOposals which are set forth below would involve
amendments to the COpyright laws and changes in regulatory
policies to be enacted as amendments to the Communications
Act. However, in the event regulatory legislation cannot be
enacted at this time, both industries express a desire that
the FCC would lend its SUpport to the effectuation of this

compromise through its own regulatory authority.

I. COPYRIGHT: The COpyright law would be amended to re—
flect the following:
A. CATV would be liable for COpyright payments under

the terms and conditions set out below:

159

160

1. CATV systems will have a compulsory license to
carry all local television signals. Local broadcast signals
are defined as Grade B contour signals or their equivalent.

2. The COpyright statute would recognize the con-
cept of "adequate" television service. Adequate service
means that the CATV system Shall have available to it the
services of stations fully affiliated with each of the
national TV networks plus the services of no more than three
non-affiliated commercial TV stations. This means, for
example, that in a market such as Philadelphia, which has
stations fully affiliated with all existing national networks
and three commercial TV stations not so affiliated, no im—
portation of distant signals shall be permitted.

In the event that it is necessary to import a
distant signal for thefpurpose of getting adequate service,
the signals Of the most proximate station in either category
shall be the first to be imported. A CATV system, to the
extent that it does not have a sufficient complement of local
signals to comprise the signals of a full network station
for each of the national television networks and the signals
of three commercial independent stations, would have a com-
pulsory license to receive signals of distant stations to
bring them up to this adequate service concept: provided,
however, that the CATV system would be compelled to obtain
the signals necessary to achieve this adequate service from

television stations next most proximate to the CATV system.

161

A distant television signal means the signal of a television
broadcast station which is extended or received beyond the

predicted Grade B contour of that station.

II. EXCLUSIVITY: CATV systems located in primary or secondary
broadcast markets must recognize exclusive licensing of COpy-
righted material as follows:

1. As against "distant" signals imported into a
"primary" television market, a CATV system, Upon appropriate
notice and request of a broadcast station within whose Grade A
signal contour such system is located, must provide the same
protection Of copyrighted material as that which the broad-
cast station is afforded against other broadcasters in the
same television market.

2. As against Grade B television signals carried in
a "primary" television market, a CATV system Upon appropriate
notice and request of a broadcast station within whose Grade
A signal contour such system is located, must protect the
first run only syndicated showing of a copyrighted work.

3. As against distant Signals imported into a
"secondary" television market, a CATV system Upon apprOpriate
notice and request of a broadcast station within whose Grade
A signal contour such system is located, must protect the
first run only syndicated showing of a performance or diSplay
of a COpyrighted work.

4. For purposes of affording exclusivity protection,

a CATV system will be deemed to be within the market of a

162

commercial television station if the CATV system is located
in whole or in part within 35 miles of the main post Office
or reference point of the community in which the commercial
television station is located. The geographic coordinates
of the main post offices and reference points will be those
adOpted by the Federal Communications Commission in Appendix
B of Further Notice of PrOposed Rule Making in Docket No.
18397, released May 16, 1969 (FCC 69-516).

5. A CATV system located within the 35 mile radius
of a community listed by ARB as one of the top 50 television
markets will be deemed to be located in a primary television
market.

6. A CATV system located within the 35 mile radius
of a community listed by the ARB as above the tOp 50 tele-
vision markets will be deemed to be located in a secondary

television market.

III. GRANDFATHERING: All CATV systems serving subscribers
as of the date of the passage of this Bill would be grand-
fathered as to all existing service. They could continue to
carry the signals that they presently carry and would not
have to provide any of the "exclusivity" set forth above.
This grandfathering would extend only to the franchise
area in which each grandfathered system operates. In the
case of a non-enfranchised CATV system, the grandfathering
would extend to the boundary of the political sub-division in

which the CATV system currently Operates.

163

The grandfathering indicated in this section relates
solely to signals currently carried. Should signals be
changed or substituted, the new changes will reflect all ex-

clusivity provisions for this agreement.

IV. REGULATORY CONSIDERATIONS: The NAB and the NCTA agree
that the most efficient manner of effectuating the compromise
in the public interest would be through the enactment of
legislative amendments to the Communications Act. However,
if this is not possible at this time, both organizations agree
that Since the FCC has the authority to implement these poli—
cies it will proceed t6 do so Upon the enactment of copyright
legislation.

1. Retain the carriage and nondUplication currently
set forth in present Commission rules.

2. Originations--The FCC should promulgate rules
that will permit CATV systems to originate, without any re-
strictions, sponsored programs on a single channel. There
would be no limit to the number of channels the CATV system
could devote to either automated service or public service
type programs. Advertising, however, would be limited to
either the channel permitting unlimited originations of any
type of programs or on thOse Channels devoted to automated

services.

V. INTERCONNECTIONS: Consistent with the Spirit of compro-

mise in the public interest, and conditioned Upon the

164

acceptance of the other portions of this agreement, recogni-
tion must be afforded to the necessity for the preservation
of television broadcast services to all areas of the country.
Accordingly, both organizations agree that CATV systems
receiving broadcast programs would be prohibited from inter-
connecting for the purpose of distributing entertainment

type programming. This prohibition could be waived on a
case—by-case basis for good cause shown for contiguous CATV

systems for the purpose of serving a local market area.

VI. COPYRIGHT PAYMENTS: CATV systems will pay reasonable
COpyright fees as determined by the Congress. Small and re-
mote CATV systems should either be exempt from payment or
should pay a nominal amount. The proposals set forth above
are contingent on a fair and satisfactory statutory resolu-

tion of the matter of COpyright payment.

APPENDIX B

SURVEY MATERIALS
(Samples Of Originals)

1165

MICHIGAN STATE UNIVERSITY EAST LANSING - women! 4882}

 

DEPARTMENT OF TELEVISION AND RADIO 0 322 UNION BUILDING

How will CATV affect the future Of commercial television? What forms of
regulations are needed? Although many industry groups Speak regularly to
these questions, no one to date has attempted to seek the Opinions Of every
commercial television station manager. Yet, you are the peOple who will
perhaps be most vitally affected by CATV.

Enclosed is a copy of a questionnaire which is being sent to all commercial
television Stations in the United States. The survey is designed to discover
what you think about the future relationship between commercial television
and CATV.

Your reSponse is vital to the success of this project. You have knowledge,
experience, and Opinions which are available from no other source.

To be included in the final report, the questionnaire must be returned by
July 14. A return enveIOpe is enclosed for your convenience.

Thank you very much for your COOperation.

Sincerely,

Roderick Rightmire

RR:aa

1636

A SURVEY OF THE ATTITUDES 0F CMRCIAL
TELEVISION STATION MANAGERS TOHARD CATV

Part I
Station and Market Information

Please indicate:
a. Type of station you manage (Check one):

(1)VHF_____ (2)UHF_____
b. Ownership of your station:

(l)Single station____ (2)Group____
c. Network affiliation (ABC, CBS or NBC):

(1)Yes__ (2)No_

d. Market size according to the 1967 rating of ARB based upon net weekly circulation. (This is
the list which the FCC is currently using to classify CATV markets.)

(1)T0p 25 (2)Harkets 26-100 (3)Smaller than Top 100

 

In the spaces provided, please indicate the number of TV stations which are received in your
market area with at least Grade B signal strength.

(1)How many network affiliated stations?
(2)How many independent, or non-network affiliated, comnercial stations?
(3)How many non-commercial educational stations?
Does your station, or parent company, own or have financial interest in one or more CATV systems?

(1)Yes (2)No

If your answer to question 3 was "yes", please indicate the number of systems in which your
company has financial interest.

Is there CATV service within the Grade B contour of your television station?
(l)Yes (2)No

If you answered "yes" to question 5, please complete the following five parts of this question.
If you answered “no" to question 5, please go on to question 7.

a. Is your signal carried on one or more local CATV systems?
(1)Yes (2)No

b. Within your Grade B contour, about how many homes subscribe to a CATV service?

 

c. What percentage of television homes does the figure in part "b" represent?

d. In the spaces provided, please indicate the number of different TV signals available on the
CATV systems which provide service within your Grade B contour.

(1)How many network affiliated stations?

(2)How many independent, non-network affiliated, conmercial stations?

(3)How many non-commercial educational stations?

(4)What is the largest number of non-broadcast signals which are originated by a single
CATV system?

 

e. Does your station, or parent company, own or have financial interest in a CATV system which
is within the Grade B contour of your own station's signal?

(l)Yes

 

(2)No
Is your signal imported into a distant market by a CATV system outside your Grade B contour?

(l)Yes (2)No (3)Don't know

10.

ll.

12.

13.

14.

167

Part II
Attitudes Toward CATV

Should CATV systems within a 35 mile radius of the tap 100 markets be required to seek
permission from distant originating stations before importing signals into those markets?

(l)Yes (2)No (3)No opinion
In markets below the tap 100, the FCC has prOposed that CATV systems within a 35 mile radius
of a station may carry as many distant signals as necessary (without "leapfrogging“) to

provide three full network services, the programs of one independent, and any educational
stations. Do these regulations afford adequate protection?

(1)Yes (2)No (3)No opinion

Should a CATV system in a market below the tap 100 have to seek retransmission rights from all
stations whose signals that systan wishes to import? -

(l)Yes (2)No (3)No opinion

 

Should the prOposed 35 mile zone of protection from unrestricted importation of distant TV
signals into the top 100 markets be extended to an area such as 60 or 75 miles?

(l)Yes (2)No (3)No opinion

Should the prOposed 35 mile zone of protection from unrestricted importation of distant TV
signals into markets smaller than £hg £22 100 be extended to an area such as 60 or 75 miles?

(l)Yes (2)No (3)No opinion

In your opinion, does the presence of one or more CATV systems within a station's Grade B
contour (or its ARB ADI) increase that station's audience potential?

(l)Yes (?)No (3)No opinion
A CATV system usually increases the choice of channels for a subscriber. In your opinion, does
the presence of a local CATV system significantly fragment the audience so that the local

station loses potential audience?

(l)Yes (2)No (3)No opinion

 

Is a local station's competitive position improved when its signal is imported into a distant
market by a CATV system?

(l)Yes (2)No (3)No opinion
Do you feel that CATV systems should be subject to copyright legislation?

(l)Yes (2)No (3)No opinion

 

 

Do you consider the proposed FCC importation regulations to be, in reality, a substitute for
COpyright legislation?

(l)Yes (2)No (3)No opinion

 

Should CATV systems be required to originate local programming?
(l)Yes____ (2)No____. (3)No opinion____
Should CATV systems be permitted to originate local programming?
(l)Yes____ (2)No___ (3)No Opinion____
Should CATV systems be permitted to originate cannercials as a part of local programing?
(l)Yes_ (2)No__ (3)No opinion-
If CATV systems are permitted, or required, to originate local programming, should they be
subject to the same regulations which pertain to broadcasters, i.e. Section 315, Fairness

Doctrine, sponsor identification, etc.?

(l)Yes (2)No (3)No opinion

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

I 168

Should a TV station owner be prohibited frOm owning a CATV system within his own Grade B
contour?
(l)Yes

(2)80 (3)80 opinion

 

 

 

Should each CATV company be limited in the number of local systems which it may own nationally?

(l)Yes (2)80 (3)80 Opinion

 

 

In your opinion, is the FCC the appropriate federal agency to regulate CATV?

(l)Yes (2)80 (3)80 Opinion

 

Should the individual states have any regulatory jurisdiction over CATV systems?

(1)Yu_ (2)80

 

(3)80 opinion
Should local communities have the power to franchise CATV systems?
(l)Yes

(2)80 (3)80 Opinion

 

 

If current proposed FCC rulemaking is adopted, will CATV deter the development of local UHF
stations in the top 100 markets?

(l)Yes (2)80 (3)80 opinion

 

If current proposed FCC rulemaking is adopted, will CATV deter the development of local UHF
stations in markets under the tOp 100?

 

(l)Yes (2)80 (3)80 Opinion

 

 

In your Opinion, will CATV evolve into a form of Pay, or Subscription, television, where a
subscriber pays for a portion of the service on a "per program" basis?

(l)Yes (2)80 (3)80 opinion

 

 

In your opinion, does CATV provide a greater diversity of types of television programming than
is available without a cable system?
(l)Yes

(2)80 (3)80 opinion

 

 

Do you perceive CATV as the forerunner of a change in the mode of distribution of television
programming from the present broadcast, or "on-the-air", system to a national non-broadcast
cable, or "wired city", concept?

(l)Yes (2)80 (3)80 Opinion

 

Do you agree with the recent CATV compromise agreement which was proposed by the National
Association of Broadcasters and the National Cable Television Association?

(l)Yes (2)80 (3)80 Opinion

 

Part III
Personal Opinion (Attach additional sheet if needed)

The FCC has prOposed rather extensive rulemaking regarding CATV. Briefly outline any
additional or alternative regulations which you feel would be appropriate.

(Over)

169

2. What local services, if any, can a CATV system originate which are not feasible over a regular

broadcast TV channel?

3. Increased demand for spectrum space has required reexamination Of current utilization. One of
the suggestions has been to change television from its present broadcast distribution system
to a national cable, or non-broadcast "wired city", concept. Consent on this possibility.

4. Note: Answer this question only if your market has.existing CATV systems.

a. What has been the effect of CATV on your station?

What do you see as future effects of CATV on your station and on the development of

b.
commercial television in your market?

Roderick Rightmire
Department Of Television and Radio
322 Union Building

Michigan State University

East Lansing, Michigan 48823

Please return to:

170

MICHIGAN STATE UNIVERSITY East Lansing - Michigan 48823

 

Department of Television and Radio - 322 Union Building

July 21, 1969

To: All Comercial Television Station General Managers

Fran: Rod Rightmire

The excellent response to the survey which I sent you recently
indicates a great interest in CATV. If you have already mailed
your return, thank you very much for your participation.

In the event that you have not been able to complete your ques-
tionnaire, a duplicate copy is enclosed for your convenience.
Since the survey is designed to seek the opinions of even
comercial television station general manager, your response

is vital to the success of the project.

The tabulation deadline has been extended so that any return sent
by August 8th will be included in the final report.

Thank you again for your cooperation.