National Ass'n of Broadcasters v. Copyright Royalty Tribunal

675 F.2d 367, 218 U.S. App. D.C. 348, 8 Media L. Rep. (BNA) 1432, 51 Rad. Reg. 2d (P & F) 329, 214 U.S.P.Q. (BNA) 161, 1982 U.S. App. LEXIS 20282
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 9, 1982
DocketNos. 80-2273, 80-2281, 80-2284, 80-2290 and 80-2298
StatusPublished
Cited by17 cases

This text of 675 F.2d 367 (National Ass'n of Broadcasters v. Copyright Royalty Tribunal) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Ass'n of Broadcasters v. Copyright Royalty Tribunal, 675 F.2d 367, 218 U.S. App. D.C. 348, 8 Media L. Rep. (BNA) 1432, 51 Rad. Reg. 2d (P & F) 329, 214 U.S.P.Q. (BNA) 161, 1982 U.S. App. LEXIS 20282 (D.C. Cir. 1982).

Opinion

Opinion for the Court filed by Circuit Judge MIKVA.

MIKVA, Circuit Judge:

These consolidated cases present various challenges to the first distribution of cable [352]*352royalty fees under the 1976 Copyright Act, 17 U.S.C. § 101 et seq. (Supp. Ill 1979) (the Act). Respondent is a governmental agency, the Copyright Royalty Tribunal (Tribunal), whose function is to make an annual distribution of royalty fees paid by cable television operators for their retransmission of certain copyrighted programming. The Act invests the Tribunal with broad discretion in apportioning these royalty fees. Specific awards are reversible only if the agency’s decision is not supported by “substantial evidence” or is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” as defined by the Administrative Procedure Act, 5 U.S.C. § 706 (1976). Judged by these standards, the Tribunal’s decision adequately supports and explains almost all of its royalty allocations, and these we affirm.

In conducting its first distribution under the Act, however, the Tribunal’s treatment of one of the many claimants before it may have violated the procedural requirements of the Government in the Sunshine Act, 5 U.S.C. § 552b (1976), and the Tribunal’s own regulations. We therefore remand a small portion of the decision before us — a $50,000 award initially allocated to National Public Radio — for further Tribunal proceedings.

I. BACKGROUND

Cable television is one of a number of technological changes that have recently revolutionized the communications industry in America. Operation of cable systems typically involves the reception of broadcast beams by means of special antennae and transmission of these electronic signals by cable or other methods to the homes of subscribers. In Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), and Teleprompter Corp. v. CBS, Inc., 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974), the Supreme Court held that such reception and distribution of television broadcasts did not constitute a “performance” within the meaning of the Copyright Act of 1909. The Court recognized the commercial impact of its decisions, but concluded that “any ultimate resolution of the many sensitive and important problems in this field .. . must be left to Congress.” Teleprompter Corp. v. CBS, Inc., 415 U.S. at 414, 94 S.Ct. at 1141.

Congress responded to these decisions by enacting Section 111 of the Copyright Act of 1976, 17 U.S.C. § 111 (Supp. Ill 1979), which requires cable operators to pay royalties to the creators of copyrighted program material that is used by the cable systems. Congress recognized, however, that it would be impractical to require every cable operator to negotiate directly with every copyright owner. See H.R.Rep.No. 1467, 94th Cong., 2d Sess. 89 (1976) (hereinafter cited as House Report). Accordingly, the Act mandates two steps in this process. First, cable operators are required to obtain a copyright license and periodically pay royalty fees into a central fund (the Fund).1 17 U.S.C. § 111(c), (d). Second, the Tribunal is then required to

distribute royalty fees deposited . . . under section 111 and ... determine, in cases where controversy exists, the distribution of such fees.

17 U.S.C. § 801(b)(3). The Act requires that the Tribunal render its final distribution decision within one year of the start of these proceedings, and that it state the relevant criteria and facts relied on as well as the reasons for its decision. 17 U.S.C. § 803(b).

The Tribunal initiated the first royalty distribution under this scheme in August 1979, concerning cable royalties paid for the 1978 calendar year.2 The Tribunal divided [353]*353its proceeding into two “phases,” based on the fact that the claimants to the Fund could easily be broken down into specific groups. “Phase I would determine the allocation of cable royalties to specific groups of claimants. Phase II would allocate royalties to individual claimants within each group.” 45 Fed.Reg. 63,027 (Sept. 23,1980). Phase I resulted in the following distribution of the $15 million Fund:

Program syndicators and movie producers 75 %
Sports leagues 12 %
Television broadcasters 3.25%
Public television 5.25%
Music claimants 4.5 %

The Phase II proceedings were considerably simpler than those in Phase I because all but one of these claimant groups reached voluntary agreement on the allocation of shares within each group. The Tribunal had only to apportion the share of music claimants, and did so as follows:

American Society of Composers, Authors and Publishers (ASCAP) 54%
Broadcast Music, Inc. (BMI) 43%
SESAC, Inc. 3%

These distributions were announced in the Tribunal’s final decision of September 23, 1980, 45 Fed.Reg. 63,026 (hereinafter cited as Decision).

A. The Claimants

The five cases challenging the Tribunal’s Decision can best be understood after identifying the various petitioners.

No. 80-2273 is brought by the National Association of Broadcasters (NAB), which represents commercial radio and television broadcasters. The Tribunal rejected NAB’s contention that broadcasters deserved a substantial share of the Fund. It awarded the 3.5% share to television broadcasters, and denied any award whatsoever to commercial radio broadcasters on the ground that these retransmissions lacked “any significant marketplace value.” Decision at 63,038.

No. 80-2284 is brought by the Joint Sports Claimants (JSC), a group that includes professional baseball, basketball, hockey, and soccer leagues. JSC seeks a larger award at the expense of movie producers and program syndicators, but also intervenes in No. 80-2273 to protect its 12% award from the claims of NAB.

No. 80-2298 is brought by ASCAP, an unincorporated membership association of writers and publishers of music. ASCAP makes two general claims, contending that music claimants should have received a larger share of the Fund in the Phase I proceeding, and that ASCAP should have received a larger relative share of the 4.5% music award divided by the Tribunal in the Phase II proceeding.

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675 F.2d 367 (D.C. Circuit, 1982)

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675 F.2d 367, 218 U.S. App. D.C. 348, 8 Media L. Rep. (BNA) 1432, 51 Rad. Reg. 2d (P & F) 329, 214 U.S.P.Q. (BNA) 161, 1982 U.S. App. LEXIS 20282, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-assn-of-broadcasters-v-copyright-royalty-tribunal-cadc-1982.