Talks on Fees Paid by Cable TV Break Down

Negotiations in a $100-million dispute between the motion picture and cable-TV industries broke down Tuesday with charges that cable-TV operators are using copyright laws to “bludgeon” Hollywood studios and other producers of TV programming.

At the heart of the dispute is cable’s complicated system of industrywide copyright payments, established by a 10-year-old federal law, which allows cable-TV systems to carry the programming of over-the-air television stations, especially so-called superstations such as Ted Turner’s WTBS in Atlanta.

Not Enough Money

Hollywood studios and other copyright holders have long charged that the current law inadequately compensates them for their programs. The cable industry, on the other hand, has resisted efforts to alter the payment structure, which is set by the government’s Copyright Royalty Tribunal and is known as cable’s “compulsory license” to over-the-air programming.

Months of talks aimed at revising the method of collecting copyright fees collapsed in Washington after cable representatives refused to consider a new motion picture industry proposal to abolish the compulsory license.

“We want it, and we like it,” said James Mooney, president of the Washington-based National Cable Television, after a meeting Tuesday in the office of Jack Valenti, president of the Motion Picture Assn. of America.

During that meeting, Valenti proposed doing away with, within five years, the compulsory license for superstations, a move that Mooney said was “impossible” for the cable industry to accept.

“The compulsory license allows cable to use programming at an artificially low cost, without negotiating for price or use,” Valenti said. “But more importantly, the compulsory license gives cable a frightening power to force program suppliers to do their will.”

Valenti was especially concerned that the current law may allow cable systems to thwart efforts to establish new national broadcast networks because cable operators may import distant TV stations even when local stations carry the same programs.

Looking to Congress

Cable operators may “crush the value of those programs to (local) television stations,” Valenti said, and use “the compulsory license as a bludgeon to force program suppliers to their knees.”

Both sides said efforts to revise the issue are now most likely to move to Congress, which created the compulsory license in a massive 1976 revision of the copyright laws. The 1976 statute created the Copyright Royalty Tribunal to set or adjust copyright royalty rates and, in the case of cable TV, to distribute payments to producers, broadcast stations and other copyright holders.