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Ownership and Qualifications. Radio Service Type. Alien Ownership Is the applicant a foreign government or the representative of any foreign government? Is the applicant an alien or the representative of an alien?

Is the applicant a corporation organized under the laws of any foreign government? Is the applicant a corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or by any corporation organized under the laws of a foreign country?

Is the applicant directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country? The Alien Ruling question is not answered. Basic Qualifications Has the applicant or any party to this application had any FCC station authorization, license or construction permit revoked or had any application for an initial, modification or renewal of FCC station authorization, license or construction permit denied by the Commission?

Has the applicant or any party to this application, or any party directly or indirectly controlling the applicant, ever been convicted of a felony by any state or federal court? The thrust of MPAA's case is that the Tribunal failed to explain adequately, or to adduce substantial evidence for, its awards to program suppliers and MPAA vis-a-vis other claimants.

In light of the whole record of the proceeding, however, we affirm the Tribunal's distributions. In general, we have little difficulty in discerning the "path" followed by the Tribunal in its various Phase I awards. The Tribunal's allocation to program suppliers largely reflected the "hard numbers" in MPAA's Nielsen Report, on which program suppliers had based a claim to The Tribunal adequately explained, and supported, its reasons for following this approach.

A major reason for the Tribunal being unable to accord the Nielsen "hard numbers" the weight urged upon us by MPAA is that we share the views advanced by certain other claimants, notably Joint Sports and NAB, that cable operators are interested in selling subscriptions and that viewership [which the Nielsen Report measures] is of limited relevance to cable operators. In assessing the weight to be accorded the Nielsen Report we have also considered the evidence as to the methodology of the study, the selection of the station sample on a fee generated basis previously found deficient by the Tribunal, the use of "sweep periods," and the role of MPAA in the design and execution of the survey.

Our search for a discernible path of reasoned decisionmaking, however, should not be confused with hypertechnical scrutiny of an agency's phraseology. In light of the purpose for which we review an agency's explanations, and the different evidentiary records in the Tribunal's and proceedings, we find the Tribunal's rationale for its allocation to program suppliers to be at least as indicative of reasoned decisionmaking as was its rationale defended vigorously by MPAA last year for the program suppliers' allocation.

In affirming the Tribunal's allocation, we reject MPAA's argument that the Tribunal's general approach was undermined by the program suppliers' evidence of "harm.

It is well established that an agency may explain itself by incorporating by reference parts of the record, see NAB v. See, e. I scribbled down--see the scribbles--a couple of quotes from our salesman" ; JA 1, testimony of Mr. JSC presented evidence that cable operators perceive sports programming to account significantly for the ability of cable systems to attract and retain subscribers; in part, this evidence was adduced through the direct testimony of several cable operators and, in part, through an industry-wide survey similar to one which JSC had introduced in the proceeding the BBDO survey.

Although the Tribunal acknowledged that this "attitudenal [sic] evidence cannot be the sole basis of MPAA argues that the Tribunal's reasons for relying on this attitudinal evidence--in lieu of the "direct" evidence of viewership measured in MPAA's Nielsen Report--is nowhere explained. We disagree. The Tribunal expressly stated that, " [a]s in the royalty proceeding, the direct case of the Joint Sports claimants was structured and presented to focus on the marketplace considerations we have found most useful.

Given that JSC's presentation was designed to reflect "how the cable industry would have allocated its royalty dollars if it had been required to bargain about compulsory licensing," 45 Fed. Indeed, given Congress' evident intent to have the Tribunal operate as a substitute for direct negotiations which were thought to be impractical among cable operators and copyright owners, see House Report at 89, we find the Tribunal's receptiveness to evidence simulating the commercial attitudes of the "buyers" in this supplanted marketplace to be more than reasonable.

Although we also affirm the reasonableness of the Tribunal's Phase I allocation to NAB, we are not as sanguine about the quality of the Tribunal's explanation.

NAB's award was intended to compensate television broadcasters for the retransmission by cable of certain "local" broadcasts, such as station news and public affairs programming, to relatively nearby though technically "distant" communities. In support of its Phase I claim, NAB presented testimony from cable operators and a survey of cable subscribers indicating the benefit of local broadcasts to cable systems; evidence concerning the relatively high percentage of commercial "distant" signals originating less than miles from the cable community; and, in particular, a study of the amount of time allocated to local broadcasts retransmitted by cable.

In contrast to NAB's presentation in the proceeding--which provided no evidence of local broadcasting's benefit to cable; was supported almost entirely by a mechanistic time-based formula; and was characterized by the Tribunal as having left the record in "a state of utter confusion and disarry [sic]" --nab'S presentation was praised by the Tribunal for having been made "in an effective and coherent manner.

Despite this compliment, however, the Tribunal adopted by reference the views of several claimants that NAB's presentation had merely repeated NAB's time-based case, and furthermore stated that its review of the record had not caused it "to alter the basic conclusion we reached in the earlier [] proceeding. Although the Tribunal next acknowledged specifically the new evidence introduced by NAB for , it stated that a review of the record left it unpersuaded that local broadcasting was "of more than marginal value to cable operators, or a significant factor in the decision of the public to subscribe to a cable system.

Finally, the Tribunal concluded that NAB's award should reflect a "downward adjustment of the 'hard numbers,' whether viewed from either the NAB perspective of total programming hours [the time-based evidence] Nevertheless, even the inartful author of this section of the Decision has not been able to camouflage completely the discernible and defensible path of the Tribunal's allocation.

In context, we take the Tribunal's criticism of NAB's time-based evidence, and the Tribunal's conclusion that local broadcasting is of only "marginal" value, to explain why NAB's original claim to But, given that the Tribunal has identified these Nielsen percentages as "the single most important piece [s] of evidence in the record" and "a useful 'starting point' for the application of the criteria to the record evidence," id.

Although our review of an agency's explanation does not permit us to "guess" at its thinking, Greater Boston Television Corporation, F. In affirming the Tribunal's allocation, however, we take this opportunity to paraphrase an admonition previously given by this court to the Tribunal:.

While we do not sanction [the quality of the Tribunal's explanation], we have regarded [it] charitably in light of the Tribunal's lack of a professional staff and the [relative] novelty of the proceeding. We expect the quality of the Tribunal's decisionmaking to improve with experience. The time for improvement is now. We reject MPAA's claim. This assertion is groundless. Not only did the Tribunal indicate that it "welcomes voluntary agreements," 47 Fed.

Although the Tribunal certainly could have been more specific in its evaluation of MPAA's aggregate evidence, as well as more specific in its identification of the evidence on which it based its competing awards to Multimedia, NAB, and SIN, we cannot say that, considering the record as a whole, the Tribunal's allocations were outside an identifiable zone of reasonableness.

Specifically, we note that Multimedia's 1. NAB's award as a syndicator of station programming of 0. And SIN's award of 0. See id. PTL Brief at xii. Each of these organizations, for example, distributes its programs to broadcasting stations with the understanding that no commercial interruptions are to be allowed. Another common attribute is that CBN, PTL, and OTGH all use their programs as vehicles for soliciting donations; indeed, each of these organizations finances its production and distribution costs entirely from viewer contributions.

In addition to the distribution of their programs through broadcasting stations, CBN and PTL also distribute their programs over their own twenty-four-hour satellite programming services. These services relay a variety of programs, including some CBN- and PTL-produced programs, directly to cable stations for retransmission over the cables to subscribers. Although, in operating their satellite networks, CBN and PTL relay their own programs without commercial interruption, they do attempt to sell advertising time for the other programs.

In addition to distribution by satellite, CBN distributes its programs through four commercial broadcast stations in Atlanta, Boston, Dallas, and Portsmouth Va. Perhaps because of the similarities among these three program suppliers, however, the Tribunal treated them as a group, the "Devotional Claimants," to which it made no award in the Phase II distribution among producers and syndicators.

Although, on appeal, these claimants continue to argue independently, we shall evaluate first their overlapping objections to the Tribunal's "group" decision before discussing, briefly, several more particular objections raised individually in the briefs.

Because we are not satisfied that the Tribunal's treatment of the Devotional Claimants reflects reasoned decisionmaking, we remand this aspect of the Phase II distribution for redetermination.

The Tribunal gave two reasons for denying the Devotional Claimants an award. First, it found that devotional programming had no marketplace value one of the three primary criteria because its producers had to pay broadcasters to air it.

In the Tribunal's words:. We regard it as a fundamental distinction the practice of these syndicator claimants to buy time on television stations to broadcast their programs, while other syndicated programs are purchased by the stations. Second, and subordinately, the Tribunal found that the Devotional Claimants are not "harmed" by cable retransmission of their programming another of the Tribunal's original criteria , and indeed may benefit from it because the expanded viewing audience could provide a source of additional donations:.

Although, as discussed elsewhere, we have not found the evidence on the harm criteria to provide much assistance in allocating royalty shares, cable carriage may well benefit these claimants because the expanded carriage provides greater exposure and the potential of increased contributions from viewers.

The record establishes that these claimants rely upon direct contribution for the support of the programs and other activities. Although the Tribunal's explanations appear at first blush to be perfectly reasonable, they take on an air of unexplained arbitrariness when measured against the evidentiary record of the proceeding and the Tribunal's dissimilar treatment of claimants which, in several respects, seem similarly situated to the Devotionals.

We begin by reiterating that there is nothing necessarily irrational about the Tribunal's "fundamental distinction;" the fact that CBN, PTL, and OTGH pay broadcasters to air devotional programming provides, as a matter of logic, the basis for a reasonable inference that their programming is without recognizable market value. But while we do not criticize the Tribunal's abstract logic, the Tribunal completely fails to acknowledge much less discuss record evidence suggesting factual weaknesses in its neat conclusion.

For example, nowhere does the Tribunal discuss the contention--repeatedly pressed by the Devotional Claimants--that their payments to broadcasters reflect a conscious, self-inflicted cost of commercial-free formatting rather than any external indication of market worthlessness. Nor does the Tribunal acknowledge the merits of a counterargument, also pressed repeatedly by the Devotional Claimants, that the market value of their programming is reflected in the "value viewers place on it in that they are willing to pay to support it [through donations].

These failures, by themselves, may not necessarily vitiate the Tribunal's "fundamental distinction"--" [s]ubstantial evidence is not lacking merely because the agency chooses one conclusion from evidence that arguably supports 'two inconsistent conclusions. FMC, U. But the Tribunal's conspicuous failure to discuss these relevant aspects of the Devotional Claimants' case makes it difficult for us to appraise the reasonableness of the Tribunal's response to the record evidence.

Moreover, troubling indications of arbitrariness arise when, in considering the cases of Public Broadcasting Service PBS and National Public Radio NPR , the Tribunal felt free to make awards to claimants regardless of "commercial marketplace factors. The record supports a finding that the programming has a special appeal, which justifies an award" making. And even more specific indications of arbitrariness are suggested by the Tribunal's Phase II recognition albeit only on the order of a.

Measured in light of these awards, the Tribunal's "fundamental distinction" begins to take on the texture of quicksilver. Tell-tale indicators of capriciousness become more apparent when we turn, as the Tribunal did not, to the "benefit to cable systems" criterion: the criterion which, in discussing the Joint Sports Claimants' presentation, the Tribunal included as among "the marketplace considerations we have found most persuasive and useful.

In its analysis of the Devotional Claimants' presentations, however, the Tribunal felt it unnecessary to discuss what appears to be at least noteworthy record evidence of "benefit to cable operators. A: Of course". While we do not necessarily interpret this evidence to require an award to the Devotional Claimants, the evidence does seem similar to that upon which the Tribunal appears to have elsewhere based awards. In the absence of any discussion of this apparently relevant evidence, the Tribunal's non-award to the Devotional Claimants suggests an element of arbitrariness in the Tribunal's decisionmaking.

Finally, we come to the Tribunal's "harm" criterion and, specifically, to the Tribunal's conclusions that Devotional Claimants 1 may well "benefit" a negative harm from cable retransmission; 2 cannot claim harm for any interest involving their satellite services; and 3 are not harmed due to fractionalization of their local audiences.

Although we do not find implausible the Tribunal's supposition that cable retransmission "may well benefit" the Devotional Claimants' contribution base, we are troubled by the unexplained vengeance with which the Tribunal seems to have applied this factor to CBN, PTL, and OTGH.

At the outset, we note that the Tribunal did not determine the actual extent to which these claimants might be benefitted; accordingly, the Tribunal's notable reliance on this plausible--yet unquantified--presumption of benefit seems to run counter to the very reason given by the Tribunal for discounting use of the "harm" criterion in general.

Indeed, the Devotional Claimants introduced evidence into the record not discussed by the Tribunal to suggest that the net benefit from cable to their fundraising efforts may be relatively moderate. Even more troublesome, however, is the unevenness with which the Tribunal's presumption of benefit seems to have been applied. The reasons why the "benefit from cable" factor completely forecloses the Devotional Claimants from any award are never presented.

Before discussing the Devotional Claimants' "satellite" and "fractionalization" arguments, it is necessary to identify briefly why the Devotional Claimants may be, at least on a conceptual level, less "fundamentally" distinct than the Tribunal seems to have supposed. We start from the observation that these claimants, like others, are copyright holders who attempt to exploit the economic value of their works.

To be sure, their marketing strategies and long-range aspirations differ from those of most other claimants: rather than sell their programs to broadcasters for the programs' advertising values, the Devotional Claimants buy television time and use the value of their programs to solicit contributions from viewers.

It may well be that, as a factual matter, cable retransmission will affect these two marketing systems differently; and we do not discount the possibility that the economic benefit of cable to the Devotional Claimants' system may outweigh its economic harms.

But in making this determination, it is certainly the Tribunal's obligation to consider all legally-cognizable evidence of economic harm placed before it by the parties. This observation becomes important in evaluating the Tribunal's treatment of CBN's and PTL's argument that cable harms their satellite programming services. Specifically, these Devotional Claimants maintained that the availability of their programs on cable made it difficult 1 for CBN and PTL to place their satellite networks with other, competing cable systems which may have felt, for instance, that their area already had "enough PTL" , and consequently 2 made it that much less likely for their programs to be shown during prime time, when viewership and potential contributions are at their maximum CBN and PTL can almost never afford to buy prime time for their programs from commercial broadcasters, but both claimants schedule their own programs during prime time on their satellite networks.

To both of these arguments, the Tribunal responded:. Whatever the situation may be, we hold that any harm suffered by a satellite network, whether or not the harm can be linked to distant signal importation, is not a harm for which the Tribunal can provide compensation under the provisions of Section of the Copyright Act.

We think that the Tribunal's interpretation of the Act was partly, but not entirely, correct. To the extent that the Tribunal refused to recognize general revenue loss from these claimants' inabilities to "place" their satellite networks--beyond the specific, marginal loss of prime time contributions from their copyrighted programs--we agree. As CBN itself admits, "The distribution process focuses on harm to copyright owners in their capacity as copyright owners, not on injury to broadcasters By the same reasoning, the Act does not envision royalty fee distribution to satellite network owners for harm to their networks, simply because these owners may incidentally hold valid copyrights to some of their networks' programming.

But to the extent that the Devotional Claimants can prove to the Tribunal's satisfaction that cable retransmission has measurably diminished their ability to exploit the contribution potential of their particular works, whether by satellite or otherwise, we see no reason why such an opportunity loss would fall outside the scope of section of the Act.

See House Report at 90 emphasizing desire to compensate copyright holders for cable's adverse effects on owner's ability to exploit work in distant markets. Although it appears to us that proving such an attenuated loss would be extremely difficult, competent evidence of such a harm would not be beyond the power of the Tribunal to evaluate.

Similarly, we find the Tribunal authorized to consider evidence of economic harm due to fractionalization--the splitting of a program's local audience because of distant signal importation of other programs. In response to an argument by OTGH that fractionalization of its audience by cable importation forces it to pay more for station time allegedly because the station loses some of the "lead time" value of OTGH to the next program , the Tribunal responded:.

We have also not found convincing the theory advanced by OTGH that we should distribute royalty fees to compensate it for alleged harm resulting from fractionalization of its audience because of distant signal importation of other programs.

To the extent the Tribunal's decision reflects an evaluation of OTGH's evidence of loss, it stretches our tolerance of even those "vague" or "summary" findings sanctioned in NAB v. To the extent the Tribunal's decision reflects its rejection of OTGH's entire "theory" of harm, we find it difficult to reconcile with the Tribunal's original explanation of "harm" announced in its determination: "It is also our opinion, as reflected in the record, that there is a further adverse economic impact on a copyright owner from the importation of competing distant works into the aggrieved party's local community.

Our inability to tell which of these two possibilities the Tribunal meant to express only highlights the reason we are forced to remand this aspect of the Decision back to the agency. Miscellaneous Challenges. We do not base our remand on any of the other various legal and procedural challenges advanced by the Devotional Claimants on appeal. First, we reject the contention that all bona fide copyright owners whose works were retransmitted by cable are entitled to an award as a matter of law.

As we stated in our decision in NAB v. CRT, the Act envisions the need for copyright holders to qualify for distribution of the Fund. In light of Congress' evident intent to leave the development of "particular, limiting standards for distribution" to the Tribunal, House Report at 97, we have affirmed the Tribunal's five allocational factors as a reasonable interpretation of legislation by the agency charged by Congress with its enforcement.

NAB v. Democratic Senatorial Campaign Comm. It is for the Tribunal, and not each claimant, to determine in the final analysis whether and to what extent a particular claim satisfies these allocational criteria. CRT, we emphasized in that decision that our remand was based entirely on the fact that the Tribunal's rescission of NPR's Phase I allocation occurred in procedurally infirm proceedings that violated the Tribunal's own public meeting requirements.

No such procedural irregularity occurred in the Tribunal's Decision. Although, as we have emphasized, the Tribunal's explanation for its non-award to the Devotional Claimants in Phase II was inadequate, the Tribunal was not legally foreclosed from reevaluating the Phase I record for Phase II purposes.

If on remand, however, the Tribunal continues to maintain its current Phase II non-award, it must adequately explain "why it [chose] to reject the reasoning of its initial decision," National Association of Food Chains, Inc. ICC, F. The Devotional Claimants assert that other procedural irregularities occurred in the proceeding.

In general, they maintain that the Tribunal failed to determine that its awards were made to proven copyright owners and, in particular, that the Tribunal allocated royalty fees to claimants which failed to satisfy the Tribunal's minimal filing requirements, see 37 C.

Although these assertions correctly indicate that several "technical" filing imperfections surfaced fairly late in the proceeding, we do not interpret the Tribunal's decision as having overlooked these problems. Rather, the Tribunal stated that it had applied its rules albeit "flexibly" in light of the record evidence; specifically, the Tribunal found that "evidence in this record establishes that programs of each of the claimants with defective claims were carried as distant signals," and further stated that it had not awarded cable fees to claimants "which did not submit adequate entitlement justification.

Although the Devotional Claimants suggest certain theoretical difficulties with the Tribunal's approach, see, e. Finally, we reject OTGH's claim that the Tribunal's proceedings took longer than the one-year time period statutorily imposed by 17 U. V The Tribunal rendered its final Determination on March 2, precisely one year after the effective date of its Federal Register notice announcing that proceedings had begun.

See supra, pages OTGH indicates that " [s]omebody at the Office of the Federal Register was more efficient than the Tribunal expected" and the notice with a stated effective date of March 2, was actually published on February 26, OTGH Brief at But we decline to hold that Congress' one-year period of decisionmaking was violated by the efficiency of the Office of the Federal Register; it is to the specified "effective date" of the Tribunal's Notice that we give legal significance.

Interstate Natural Gas Association of America v. FERC, F. SIN challenges the Tribunal's rejection of a "fee-generated" formula for awarding distributions. By using such a formula, which links the distribution of royalty fees to the amount of fees paid into the Fund, SIN claims that it is entitled to a larger Phase II award for its Spanish language programming.

Because neither of these arguments provides a defensible reason for upsetting the Tribunal's Decision, we affirm the Tribunal's allocation to SIN. To begin, we reject SIN's contention that the Tribunal was obligated to issue a general rule on the validity vel non of fee-generated methodologies; the Tribunal is under no obligation to proceed by general rulemaking.

See SEC v. Chenery Corp. Federal Maritime Commission, F. It is sufficient that the Tribunal explained that it chose not to address the general validity of fee-generated formulas because "the record establishes that the formula presented by SIN contains such incomplete and unreliable data that it could not be utilized for distribution purposes, regardless of what conclusion we might reach as to its rationale.

The Tribunal's position is supported by substantial evidence in the record. SIN raises virtually the same objections--regarding copyright ownership--as were raised by the Devotional Claimants. As we explained in our discussion of Nos. See supra pages Moreover, as we explained in our discussion of No.

Accordingly, for the reasons stated in these earlier aspects of our decision, as well as for those reasons added above, we affirm the Tribunal's 0. As a final matter, we consider two arguments advanced by NAB. First, on behalf of television broadcasters, NAB seeks reversal of the Tribunal's conclusion that no Phase I award could legally be accorded television broadcasters for the value of their contribution to sports telecasts.

Second, on behalf of commercial radio broadcasters, NAB challenges the Tribunal's failure to make any Phase I award for the distant carriage of radio signals by cable. We consider these arguments seriatim. In the proceeding, NAB took the position that some of the funds distributed to the sports claimants should be allocated to television broadcasters for their copyrightable contributions to the quality of sports telecasts.

Although the Tribunal allowed this evidence into the record, it subsequently granted a request by the Joint Sports Claimants for a declaratory ruling that the Copyright Act forbade the Tribunal from awarding any "sports" royalty fees to television broadcasters. Specifically, the Tribunal reiterated its view, expressed in its Distribution Determination, that. This court's subsequent decision in NAB v.

CRT squarely rejected the Tribunal's interpretation of the Act:. Although there is some confusion in the legislative history, Congress clearly seemed to contemplate Tribunal recognition of the copyrightable interests [of broadcasters in sports telecasts]:.

News , p. Given that the Tribunal's evaluation of NAB's claim thus rests on an incorrect legal premise, NAB urges us to remand its claim regarding sports broadcasting to the Tribunal.

We agree that a remand is in order; as we stated in NAB v. CRT, "the Tribunal has no authority under the Act to ignore valid copyright claims. Although it is true that the NAB v. CRT court found a remand unnecessary, that decision rested on NAB's failure to introduce evidence in the proceeding from which the Tribunal could conclude that NAB's interests were of more than a "quantitatively de minimis" value.

As NAB itself admits, "In the proceeding In contrast, however, NAB did introduce evidence in the proceeding which attempted to demonstrate the value of NAB's contributions to sports telecasts. While we recognize that this evidence addresses "quality," one of the Tribunal's secondary criteria, we note that the Tribunal has found compensable value in other programs notably those of PBS and NPR largely on the strength of this factor.

However probative of marketplace value NAB's evidence may prove to be, it is not our role to second guess the Tribunal's distributions; the assessment of NAB's evidence belongs, in the first instance, to the Tribunal. We express no view on the distribution if any due broadcasters for their contributions to sports telecasts. In remanding the case to the Tribunal, we also express no view on NAB's assertion that broadcasters are entitled to a specified percentage--either The bases for NAB's claim are two-fold: 1 that in Whatever the merits of this claim, NAB was not permitted to raise it before the Tribunal.

Accordingly, the claim is not properly raised, in the first instance, on appeal. See D. Transit System, Inc. Washington Area Transit Commission, F. Although cable systems generally are associated with the importation of distant television signals, many cable systems are equipped to import distant radio signals as well; the Copyright Act clearly authorizes the Tribunal to use the Fund to compensate "nonnetwork programming consisting exclusively of [distant] aural signals.

In its Decision, however, the Tribunal concluded that it had been "unable to discern any significant marketplace value or benefit from distant commercial radio carriage," 47 Fed. On appeal, NAB contends that this non-award 1 is unsupported by substantial evidence, and 2 cannot be reconciled with the Tribunal's 0. While we find much of NAB's claim overstated, the apparent inconsistency of the Tribunal's treatment of Music and NAB forces us to remand the case to the Tribunal either for re-distribution or for an improved explanation of its non-award to NAB.



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