that is the question of broadcasters as local producers. We produce local documentaries. We produce local public affairs. How will the moral rights regime affect us on a local level? That is another question I think that should be considered as well.

But let us take a look just very briefly, and I am sure these are points you are very familiar with, but just quickly to review; from our point of view, the concept of editing for time and content. First of all, as we well know if we listen very carefully to the cable debate these days, broadcasters have, unfortunately, only one stream of revenue. That stream of revenue is advertising.

And we have to be given the opportunity to be able to cut a product in order to be able to get our advertising in within sufficient time or otherwise, we are simply not going to have the money to be able to buy that film and to continue to provide our public service. So, the advertising issue and the cutting for that is obviously one that is very important to us. But we would also remind you that in cutting for those breaks, we also provide public service announcements which deal with a wide variety of community issues and station identification which is required under the Communications Act. We have to provide information in regard to weather emergencies and so forth. So there are a number of things that make it necessary for us to be able to cut content at various times.

Another requirement simply has to do with the competitive nature of broadcasting, the competitive nature of television, and that is cutting programs for existing time periods. It is something that goes back to the early years of radio and is now carried into television. We simply have a standard of generally starting programs on the hour and half hour. And if you are going to be competitive in this business, you have to be able to start right on time. There are any numbers of studies that have been done, proof that is available that if you have overruns, that can be significant in nature, that they can seriously affect your rating, especially your news ratings. The only possible exception to that is the overruns of the NFL football games on Sunday, especially when they are on CBS, it is very helpful to "Sixty Minutes." But that is the only case where it generally tends to build a rating. In most other cases, overruns hurt the operation of a commercial station.

And then finally, there is the enigma of editing for content. You have broadcasters who represent communities throughout this country each with different standards. We are members of those communities and we are required on one hand by the Communications Act, to make sure that we provide that program in that local public interest. And so we have to be careful about content dealing with indecency, obscenity, in some cases, violence.

And what is something that could well be indecent content in one part of the country may not be in another part of the country. I mean, these are community standards which we have to be careful about. And we could well find ourselves, if there is a moral rights regime, in conflict with the Copyright Act on one hand, the Communications Act on the other. So, we feel that it is essential that we retain editorial control in terms of serving our local communities.

And finally, you have been talking here about formatting in terms of the simple technology of the television screen. You have

talked briefly about letter-boxing. We have also talked briefly about panning and scanning. So there has been enough said on that.

The only comment I would like to make on it, though, Mr. Chairman, and I am glad to see you were at the CES to see these new technologies and how they are developing, remember that most television receivers in the United States are 20 inches or less. Despite all the talk about the big screens, most television viewers, when they go to the store to buy a television set, buy a set that is 20 inches or less and that is in the overwhelming majority of all cases. Even if you look at these sales figures today, you will see that the large projection screen sales are going down; they are not going up. So, that the marketplace is dictating at the present time, that most people watch television on small screens.

So basically, these are the concerns of the broadcasters as we look at this moral rights regime; which editing standards do we follow? Is our responsibility to the Copyright Act or the Communications Act? Do we letter-box? Do we pan and scan? And so these are the issues that we have and the concerns that we have. Thank you for your attention.

Mr. KASTENMEIER. Thank you very much, Mr. Sherman. [The prepared statement of Mr. Sherman follows:]

Prepared Statement of CharRLES E. SHERMAN, Senior Vice President for TeleviSION, NATIONAL ASSOCIATION OF BROADCASTERS, ON BEHALF OF NAB AND THE AssoCIATION OF INDEPENDENT TELEVISION STATIONS

Thank you, Mr. Chairman. I am Chuck Sherman, Senior Vice President of Television for the National Association of Broadcasters (NAB). I am representing both the NAB and the Association of Independent TV Stations (INTV). I appreciate the opportunity to appear here today as your panel looks at the issue of "moral rights."

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we do not believe that such

Let me make plain the position of NAB and INTV a radical change in the copyright law is in the public interest. Broadcasters are required under the terms of their license to serve the public interest in their local communities. We provide local, national and international news, emergency information, entertainment and other programming. If you allow a small group of individuals to impose an "artistic veto" on broadcasters, you will be severely hampering our ability to carry out our public interest responsibilities.

We see the creation of moral rights law as directly in conflict with those responsibilities by restricting our ability to edit programs and maintain an orderly schedule for our local communities. We also see such moral rights as an unnecessary and costly "add-on" to the already expensive process of bringing programming to the American audience.

Let me explore these concerns in greater detail.

In 1988, Congress found the proper middle ground on this issue. When Congress ratified the Berne Convention, it pointed to existing federal and state law as satisfying our "moral rights" obligations under the Convention. The Congress recognized the fact that our copyright law provides incentives to produce and provide programming for the public. In fact, in Sony Corp. v. Universal City Studios. Inc.,' the United States Supreme Court reiterated that the public interest takes precedence over private motivations in copyright law. We have discovered nothing today which should direct Congress to disrupt this carefully-crafted balance.

Yet moral rights clearly do not exist for the benefit of the public, but rather for the author or, in this case, the film director. The Berne Convention itself spells out the primacy of the author:

"Independently of the author's economic rights, and even after the transfer of said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation." (emphasis added)3

This is an important point. We believe that the current copyright system works because it takes into account the incentives provided to those who produce copyrighted works, while it also promotes the flow of intellectual property to the public. Motion pictures made by American film companies set the world standard. Yet establishment of

'464 U.S. 417, at 429, (1984).

2Berne Convention for the Protection of Literary and Artistic Works, September 9, 1886 (Paris Revision 1971) Art. 6 bis.

moral rights will simply result in an after-the-fact attempt by certain collaborators in the creation of a motion picture to secure an additional right or benefit which was not part of the original contract they entered into with the movie studio. Moral rights threaten to impede the flow of news, art, music and films to the public by creating a new set of noneconomic rights which are foreign to our system of copyright.

This change in our system of copyright creates a great deal of uncertainty and a significant loss of predictability -- characteristics which are the hallmark of our economic system and which promote the dissemination of a variety of video works to the viewing public. Moral rights creates a series of "subjective rights" which would leave the parties involved in bringing video works to the public unsure as to how to proceed.

Such a radical change in the current method of bringing programming to the public should occur only where the current copyright system has significantly failed. That is clearly not the case. Our current system of copyright protections has worked quite well and could serve as a model for other countries.

Under a moral rights regime, the broadcaster runs the risk of losing his or her editorial discretion. It is the broadcaster who should decide how a motion picture should be presented to the local community. Not only is the broadcaster a member of that community, but his or her FCC license places the legal responsibility and liability on his or her shoulders to exercise proper editorial discretion. Failure to do so can result in forfeitures and could ultimately place the broadcast license in jeopardy.