reaching compulsory license with respect to the use of copyrighted material other than motion pictures, audiovisual works and dramatic works.

Their concern is with the high cost and difficulty in getting clearances and the fact that their budget does not permit them to do the clerical work or to pay extensive royalties.

The Senate subcommittee staff is now engaged in a series of meetings trying to resolve this issue. The signs are relatively hopeful and perhaps with certain amounts of good will and cooperation, you will not have to face what is known generally as the Mathias amendment, which would be the proposal for a compulsory license covering public broadcasting.

Related to this is another amendment put forward in the last Congress by Senator Bayh which would extend to an unlimited amount. the number of recordings, tapes, that an instructional broadcaster could make of broadcasts for use in delayed broadcasts or throughout the whole complex of instructional broadcasting.

In my opinion, this is an important issue but it is not as important as the Mathias amendment, and I expect the two will be considered together whenever they get to you.

In the area of jukeboxes, a very difficult compromise was achieved in 1967 and, astonishingly, it has held up. This involved a compulsory license for jukebox performances with a payment of $8 by jukebox operators per box per year, the payments being made into the Copyright Office and then disbursed under the procedure provided.

As a result of the cable wars in the Senate, an amendment was added which establishes a copyright tribunal, chapter 8 of the bill, and gives it a double mandate. First, in certain cases, the tribunal would settle disputes with respect to the disbursement of fees. This does not seem objectionable to most people.

But in addition the tribunal would be called upon, through what in effect is a compulsory arbitration system, to review the rates of the compulsory licenses that are set under the bill, and recommended changes which would become effective unless Congress chose to wipe

them out.

The jukebox operators objected to $8 being subjected to a review. and in the Senate consideration last September, Senator Hollings put forward an amendment that took the jukebox rate out from under the tribunal review. This is the form in which the bill now appears.

The jukebox rate is frozen at $8 and it is not subject to review. I am reasonably sure you will hear testimony on this issue in the days to come.

I believe that this is the only real issue remaining with respect to the iukebox problem which, without any question, was our biggest headache in the early sixties.

The other economic issue that you will hear testimony on is the amount of the rate for the old traditional compulsory license covering the making of sound recordings of musical compositions.

The 1909 law was a pioneer. It adopted the first compulsory licen-e in any field. It established a system which is still in effect today that allows a record producer to make a record of a copyrighted musical composition without permission if he follows a compulsory licensing procedure and pays 2 cents per record per song.

One can wonder how 2 cents in 1909 could possibly still be viable. today. The answer is probably that the LP resulted in the unit price going from 2 cents to about 20 cents or in some cases 24 cents as a -ceiling.

But at the same time it has been argued very forcefully that the 2cent rate is infinitely too low, even considering the LP and the other structural changes that have occurred in that industry. In the 1965 hearings, there was massive testimony of a statistical nature dealing with the validity of the 2-cent rate.

Your committee agreed to 22 cents as a reasonable rate at which to peg the royalty.

The Senate, facing an inflationary curve which had only just started in 1965, raised the fee to 3 cents after considering at one point a 3%cent rate. This is still a very, very sharp controversy and I think you better prepare yourself for quite a lot of statistics within the coming weeks.

Finally, and the seventh issue that I will mention, is the performance right for records which has the-as the chairman mentioned

Mr. KASTEN MEIER. May I interrupt? I have five: Cable TV, library photocopying, liability of public broadcasting, jukeboxes, public recording.

Ms. RINGER. I am sorry. I accidentally skipped one, the question of educational use other than broadcasting and it will be the subject of one of your days of testimony, if not more. In the 1965 hearings, you heard a good deal of testimony on the issue of classroom photocopying and other copying by teachers of copyrighted material.

This was put forward in the context of the fair use provision which is now section 107 of the bill and is a rather general statement of the doctrine of fair use.

The question was whether or not a vague provision of this was sufficient to give teachers guidance as to what they could and could not do with respect to copyrighted material, except when they had at their fingertips a good deal of electronic and other machinery for using copyrighted materials and making them available to their students and pupils. At the time, you sought to solve this problem by considering all of the arguments that had been made and attempting in the report to lay out what the committee regarded as fair use in this context.

There are about four closely packed pages still in the report, in the Senate version, that reflect your committee's actual drafting of what you considered the scope of fair use to be in this context of classroom teaching.

This has not, I think it is fair to say, satisfied the educational representatives. I believe you will hear proposals on this issue and I would list this as one of the seven major issues.

An adjunct to the seven is the copyright royalty tribunal which is an issue in itself but arises in the context of three of the other issues and also of a fourth, which is the seventh of the major issues, the performance right in records.

The testimony in 1965 on this issue was very interesting. The record producers put forward a very strong case for anti-piracy legislation and during the hearing, after testimony by performers and performers' representatives, they added to that a proposal for a performing right in recordings. That would mean payment under some

sort of system for playing records on disc jockey programs, for playing records on jukeboxes, and for playing records on cable television and music systems.

I draw a distinction at this point between the music on the record and the recording itself. The music is already protected against all of these uses except cable and jukebox and would be protected against all

of them under the bill.

The stopgap legislation that you passed in 1971 effective in 1972, created a copyright in a sound recording that would extend to any creative elements present in the recording but limited it to the particular situation of so-called piracy, unauthorized duplication, usually on 8-track cartridges.

This legislation which was temporary in its 1971 form was standardized as permanent legislation in 1974 and is now part of the copyright law. I don't regard "piracy" as an issue. It may become one.

What is an issue, and the major issue in the Senate consideration of the bill in 1974, was the proposal that a performing right be added to the law that would allow the collection of royalties for the playing of records as such on radio, television, cable, jukeboxes, and so forth.

The sponsor of this legislation in the Senate was Senator Scott. The bill contained this provision when it went to the floor of the Senate and was knocked out in a rather heated debate during that consideration.

Senator Scott has reintroduced the proposal as a separate bill and Representative Danielson has introduced the same bill. In the Senate subcommittee I gather there will be hearings on the Scott bill and there is a possibility that it might be joined with the revision bill.

In any case it is not a piece of separate legislation in its real effect. I think it is something your subcommittee should consider as part of the overall picture of general revision.

I repeat, however, that the Danielson bill is a revision of the 1909 law, which is the approach that is being taken in the Senate by Senator Scott. I am not sure I have made that clear.

I should say on this point that I believe very strongly that sound recordings and the performances incorporated in them are creative works, that they are the writings of an author, and that they are subject to copyright protection under the Constitution.

There is no doubt about this in my mind and I believe that your action in passing legislation that recognizes sound recordings as copyrightable and protects them against piracy is consistent with that view. It is not whether they should be protected but how they should be protected, whether protection should go beyond piracy to include the payment of royalty for performances by various media. In principle, I support that, too.

I think that the ways of working it out need to be carefully considered. The proposal in the old section 114 in the Senate version in 1974 had problems of a practical nature, but I am not sure that they are insuperable.

These are the seven major issues and much of the testimony you will hear will be centered around them and will be economic in nature. In addition to this you will hear discussion at various points of the manufacturing clause, section 601 of the bill, and which is a disgraceful vestige, in my opinion, of 19th century protectionist thinking.

The manufacturing clause was added in the 1891 Copyright Act as the price the printers exacted for allowing copyright to be extended to foreign authors. They had been getting a free ride up to that point and they insisted that, as a price for allowing Dickens and Tolstoy to be protected in this country, the works could not be copyrighted unless they were printed here.

This provision, which was bad legislation to begin with, has become eroded over the years and in 1965 it was eroded some more. The Register's initial recommendation was that it be done away with. It became apparent that it could not be knocked out of the bill without a major fight.

As a result, it has been retained with a considerably narrowed scope. I believe that the principal arguments you will hear, perhaps tomorrow and in succeeding days, involve the fact that we are now equating Canada with the United States in terms of the place of manufacture, and this raises a host of technical questions which I won't go into. I think there has been accommodation among the parties and therefore it is unlikely you will find people attacking the manufacturing clause out of hand, as I have just done.

Yet personally I find it very, very bad legislation and would like to see it gone. It may not be practical to do that.

I believe you will also hear testimony from artists and their representatives with respect to the unsatisfactory situation of artists under the present law.

I think this is a valid argument. The revision bill would help artists but probably would not go as far as they would like it to.

Mr. KASTENMEIER. When you say "artists," whom do you have in mind?

MS. RINGER. Painters, sculptors, graphic artists, and designers. I wanted to mention the design bill. Title II of the bill is a completely separate piece of legislation which was conjoined with the revision, bill in the Senate more or less as legislative expediency at the time. The two problems are related and I have no objection to them being addressed together. I think this is probably a good idea.

But you will find differences in approach between them, and a bridge provision in section 113 deserves your attention. I think the design bill is a good bill and it deserves to be passed whether as a title II of this overall omnibus revision or separately.

It is then unclear whether there will be a debate over it. There has not been in the Senate.

There are other issues. There is a proposal that would exempt a proprietor of a ballroom or similar place of entertainment from liability and place the liability on the performing organization.

There are undoubtedly dozens of other little or perhaps not so little issues that will arise during these hearings. But I have tried to give you the overall framework of what you will be hearing, and in my opinion you do not need to go back to ground zero.

I don't think you need to start at the beginning. I think you can consider many issues settled, thanks to your efforts in the sixties. Your problem is not a simple one but I think it is something that is solvable and I am extremely encouraged by the scheduling of hearings and the general atmosphere that I find here today.

Thank you, Mr. Chairman.

M. KASTEN METR. Thank you, Ms, Ringer, for a very comprehensive ew historically of the issues involved in copyright law revision. The C) sir will state, that at our next hearing, we will have Governt represented by three other entities, the Justice Department, the Cece Department, and the State Department, and to some extent, ingatieets will be more deeply explored with reference to the bill in of instration from the governmental point of view.

I have at this pont just a couple of questions and then I would like e'd to my colleagues. From time to time there have been argude that we could leave something out of the bill.

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* 1, from time to time, certain areas have not been covered in the Pit not the case, this being a united code, that the operation dew apply whether or not we specifically deal with, a nject I it is to say, all we have done in a sense is by our nonstate, to leave the matter somewhat unresolved in terms of potential

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i-fore, we can really rot fail to deal with an issue. It wil le t with one way or the other. The code, title 17, will cover it. So we ta de a conseler tious decision even by omission. Do you agree f * K.Nger I would agree. In 1909 there was probably no intention feta te t sound recordings, I think the legislative history would bear post author gh it is arabiguous. In the early 1970's there was an inenrod pracy because of the increasing popularity of track Les. As a resuit, there was a major effort to get States to pass of of, or to enforce corimon law protection of what were clearly, vi's son æ, published works because of the lacuna in the 105 sere was no explicit protection. This issue went all the way to erone Court and the Supreme Court upheld the validity of a min, al statute ngainst record piracy on the ground that Conpreempted that protection since it had failed to net, y not even be reframing deliberately from giving protection, 1% was the furust of your question. You may, in fact, be tam State protection which is variable and inconsistent in es and tax a lot of undesirable features. These were the very features that Madison mentioned in the “Federalist ndo was defending the copyright clause in the

yxmeer. By virtue of passing this bill, we will deal with - 11 for we deal with it comp etely or not for the purpose vir volved is the of ly question, not whether it has fort corners of the 1-11 bevat e the four corners of the todeal thesersthong in copyright.

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deal with them, in a broad brush way.