license fee for Fox's transmissions of its programs to its local stations between 1986 and December 31, 1995, we hold that the reasonable amount of that license fee, in the circumstances described above, would be $ 0.
E. Prospective License Fees
Although ASCAP has collected its license fees for the broadcast of Fox's programs from the local stations from Fox's inception in 1986, and will continue to do so through December 31, 1995, ASCAP, Fox and Fox's local stations are, of course, free to restructure the terms of their relationship for license terms beginning in January 1996. Indeed, we believe that ASCAP is correct in its argument that Fox should be licensed on a through-to-the-viewer basis as ABC, NBC and CBS are. In practical terms, Fox does present itself to the public as a fourth network, and its revenues are substantial. Every week, it distributes a substantial amount of programming, clearly identified to the viewing public as Fox programming, to approximately 142 local television stations.
Indeed, Fox may by now have surpassed the 40 hours/week threshold and met the Shenandoah license definition of "regular national television network." If that is the case, and if in future negotiations between ASCAP and the local stations the terms of the Shenandoah license remain unaltered, Fox's programming would be excluded from the local television programs for which the local stations pay licensing fees. Fox would then presumably obtain a through-to-the-viewer license from ASCAP.
Even if Fox does not maintain that level of programming, however, there is no magic to the 40 hours/week benchmark in defining a "network." The definition of a "regular national television network" in the Shenandoah license is merely a contractual term negotiated by ASCAP and the local stations in the course of arriving at a license agreement. ASCAP and the parties are certainly free, for license terms beginning on January 1, 1996, to negotiate another definition for "regular national television network" that would explicitly exclude Fox and any other similar entities that appear in the future. Again, Fox's programs would presumably then be licensed on a through-to-the-viewer basis.
Furthermore, although we are not called on to decide the issue today, we believe that Fox may well fit the definition of a "telecasting network," for which Article V(A) of the Consent Decree requires through-to-the-viewer licensing. "Telecasting network" is not defined in the Decree. There is precedent, however, for construing the term broadly, to include "any entity that--like [ABC, CBS and NBC]--assemble[s] a unique package of television programming which it supplie[s] to a number of locally-based telecasters with which it maintain[s] a contractual relationship, and which in turn transmit that programming, under the program supplier's name, to the televisions in its locality."
See Turner Broadcasting, 782 F. Supp. at 789. Fox would fit that definition. We encourage ASCAP and Fox to give serious consideration to negotiating a prospective through-to-the-viewer license for Fox's programs, as well as ensuring that the terms of the Shenandoah license clearly exclude Fox's programming from the set of programs for which local stations pay license fees.
We do not order that the parties do so at this time. Indeed, we cannot. We may only set rates when the parties have sought to negotiate a reasonable fee, failed to arrive at such a fee within 60 days and applied to this Court for relief. See Art. IX, Consent Decree. Fox's application primarily seeks a resolution of the threshold matter of whether it owes any license fee at all to ASCAP; it requests us to set a reasonable fee only in the alternative. The application is not specific about the time period for which it requests this relief. Since this application was filed in August 1992 and the Buffalo Broadcasting proceeding set fees through December 31, 1995, we are of the opinion that Fox has not requested us to set fees beyond that time. Furthermore, we wish to give AS CAP and Fox an opportunity to reach a mutually agreeable prospective fee agreement before we embark on the lengthy process of conducting a fee-setting hearing.
We can and do, however, hold today that in future licensing arrangements ASCAP must license Fox's programs on either a through-to-the-viewer basis or at the local level. ASCAP may not extract fees for music use in Fox's programs from' both Fox and Fox's local stations. Cf. Turner Broadcasting, 782 F. Supp. at 817 (noting that if cable program suppliers are directly licensed by ASCAP and cable system operators only transmit programs provided by licensed cable suppliers, system operators would not need separate licenses).
For the foregoing reasons, we hold that ASCAP is not entitled to collect license fees from Fox for the transmission of Fox's programs to its local stations between 1986 and December 31, 1995, and that, even if it were entitled to do so, the reasonable fee for that activity, in the circumstances described above, is $ 0. For license periods beginning January 1, 1996, ASCAP may grant licenses for music use in Fox's programs either to Fox, on a through-to-the-viewer basis, or to Fox's affiliates and O&Os, but not at both levels.
January 3, 1995
New York, New York
William C. Conner
United States District Judge