mined by a formula based on a computation of the number of ‘‘distant signal equivalents’’ carried by the system. No payments were to be made for local signals, and different values were assigned to signals from distant independent, network, and educational stations, with special provisions dealing with substitution or addition of signals under the mandatory and discretionary program deletion and substitution rules of the FCC. The special reduced royalty fee based on a percentage of gross receipts for systems with semiannual gross receipts of less than $80,000 was retained, but a similar reduction was added for systems with semiannual gross receipts of between $80,000 and $160,000.
Section 111(e) of the House bill established the conditions and limitations under which certain cable systems outside the continental United States can tape programs for nonsimultaneous retransmission under the compulsory license. The House bill also contained, in sections 111(c) (3), 501(d), and 509, provisions denying (with one exception) the compulsory license in any case where a cable system alters program content or commercials, extending standing to sue to additional classes of broadcasters, and providing the possibility of a special penalty in such cases. Under the substantially revised provisions of chapter 8 of the House bill, the Copyright Royalty Commission would review the rates established in the bill in 1980 and at five-year intervals thereafter; explicit limitations were placed on the factors the Commission could consider in making its periodic rate revisions, but rate adjustments could be made at any time if the FCC amends its rules and regulations governing the carriage of distant signals or its rules and regulations dealing with syndicated and sports program exclusivity.
Conference substitute
With one exception the conference substitute adopts the provisions of the House bill. Section 111(d) (3) is amended to require that the royalty fees held in a fund by the Secretary of the Treasury be invested in interest-bearing U.S. securities for later distribution with interest by the Tribunal. A corresponding amendment is made in subsection (c) (1) of section 116, the jukebox provision.
exclusive rights in sound recordings
Senate bill
The Senate bill, in section 114, limited the exclusive rights of the owner of copyright in a sound recording to those specified by clauses (1), (2), and (3) of section 106−that is, the rights to reproduce the work in phonorecords, to make derivative works, and to distribute phonorecords. It expressly denied the exclusive right of public performance under section 106(4) to sound recordings.
House bill
The House amendments to section 114 clarified the scope of the exclusive right to make derivative works in relation to sound recordings, and permitted the use of copyrighted sound recordings in the audio portions of educational radio and television programs under certain conditions. The House bill also required the Register of Copyrights to submit to Congress, on January 3, 1978, a report with recom-
