Mr. RAILSBACK. That free ride is very, very tightly regulated. Mr. COOPER. That is correct. And I assure you, sir, on the other end, we are even more tightly regulated by the Federal Communications Commission for our "free ride" to our actual cable.

See, a broadcaster, take a total capital plant investment of--to pick a round number- $1 million for a million homes, $1 per home. You can't even begin to touch service to a real or potential cable television home for less than $100, or $150 per home invested, going in, to start with. That is because we have a very high expense of delivering the signal from our head-in, if you will, or tower, to the individual home. We don't have free rides on the waves, we don't have free easements, we neist pay a local franchise fee tax. The rights of way where we string our cabies are the same to us as the broadcaster's either through which he transmits from his transmitting tower on top of the Sears Building, exept that we have to pay money, we have to pay a substantial amount of money and have a very high risk involved in maintaining our transmassion medium; he has none. His stops the minute his signals goes into the public airways.

Mr. KASTEN METER. I have just one last question to follow up on several questions that have been asked. Do I understand you correctly, Mr. Cooper, that you feel that CATV should not have to pay a copyright fee unless there might be certain other conditions, for example, if he originates; if he tapes and retranost its; if he sells advertising, if he does a series of other things than semple retransmission, extem por uncons, then, are you conce ling that you might have to pay a copyright!

Mr. CooPER. I think on a point by point basis, what we are really talking about in terms of concedar g that copyr ght could and should be pa, da specifically on the pay television aspect of our industry where a thov je specifically is bought and then shown on the cable.

Mr. DANTELON. If I may interrupt. You mentioned pay television. If you or grate, if you just simply put Bumba on the cable, whether you charge individually for it, or hot, do you see any reason why you sould not pay copyright, if you of ghate

Mr. Coorer. If I have procured Bambi, or the rights to show it on the open market

ME DANIELSON, If you organate, put it on your cable

Mr. Cooren. Should I pay copyright for showing bamba!

Mr. DANDISOs. It isn't a matter of whether you charge your sub wri sets, but if you put it on your calde, you namuil pay.

Mr. Coorea Many systems have a 24 hour movie el annel. That is pot something you pay extra for, that not part of th ཤ ༈ 、 ༥ ་ སྣུས M2 KATESMER Getting ha k to my qaton, what I 'ch as that if calne systetus involve then,selves in certain met vi which some of your members maist

try to

then to that extent they

Mr. Coori. No copyright payment for » għal transmission, 19, I be seve what wente mastog I don't lax the word "refrAT STI »SIOT It everybody when it

Mr. KASTEN MEIER. But the fact of life is that increasingly ca' systems do much more than simple retransmission.

Mr. COOPER. And they do pay for it now, sir, when they are buying Bambi to show.

Mr. KASTEN MEIER. It is a rather mixed situation, it isn't quite black and white.

Mr. COOPER. That is exactly right, exactly right. They do pay fo** now when they show Bambi.

Mr. DRINAN. One more question. I wonder, sir, if you have statut language, what would you substitute for 2223, the relevant sestrone! If you would have that prepared, I think that would give me, at least, a better idea.

Mr. COOPER. I can submit that to you.

Mr. DRINAN. Thank you.

Mr. COOPER. Thank you.sir.

Mr. KASTEN MEIER. Mr. Cooper, I want to compliment you on your presentation here this morning, we appreciate it.

Mr. COOPER. Thank you, sir.

[The prepared statement of Robert Cooper follows:]

STATEMENT OF ROBERT COOPER, EXECUTIVE DIRECTOR, CATA

Mr. Chairman, and members of the subcommittee, I am Robert Couper. Fiori tive Director of CATV.

CATA, the Community Antenna Television Association is a trade ass 1'? organized in 1973 that today has as members some 100 CATV systers thr© 2 the United States. Originally organized to focus on proposed copyright leg at CATA has broadened its membership and scope of activities to the ale matters as participating in FCC proceedings. Generally stated CATAS pë phy recognizes that the roots of CATV lie within the con menuty name, a name abandoned in the 1960s by our immediate predecessors II, Texts We are not here to pull punches or present diplomație trufs truths. Nor will we play a lengthy numbers game By a timbers gea I statistics on who does or does not support this bill However, you should kn that some 25 state and regional associations have voted against the NGTA position And you can count on the fingers of one hand the state and reg associations still supporting the NCTA position Firthermore the Perissa State Association and the NCTA's largest single member compitiy, TelePn : ; In have requested and received time on their own to present views, ev tirart NOTA. TelePrompTer and the Pen svivarta systems serve over two homes. These statistics reveal only conclusions, not reasons We x,%! the only reason (ATV copyright presently has gry support is not beca copyright-supporting splinter of the industry believes that CATV sh but because it is politically expedient to do so and because of some? og m the consensus agreement. The NCTA NAB, and MPAA can try to exp's agreement to you. For our part, we will concentrate on the merits of the eng yright iste

CATA is here today because its men,bership does not believe that the ma picture industry is entitled to place 1's hands in the pockets of CATV-peret is or CATV whscribers. We relect the joint copyright position of NCTA NAB MPAA that CATV owes reisch pile copyright

The imposition of copyrig) ↑ on CATV is in part, a tax on the view ng i It is also a deception to an Atterlein television viewing pulse who told time and time again of the benevolence of broade ster delivered vision" As we all know, it is not a free system I' is an advertiser spp **val system which means we al pay once for the programs we watch by pay ng bigher prices for televisión, üdvertised products. Also approx n vrely tete i house holds must pay a second time to actually rece ve televi pictures by subscriu z to CATV And now throng" i pynight legislation, tha will be asked to pay yet a third time Remember CATA probably would heter have come into existence if the FCC had fist dionsly followed the Congress mandate of Section One of the Communications Act "to make avaliace

as possible, to all the people of the United States, a rapid, efficient, nation-wide, and world wide wire and radiocommunications service." Yet, twenty-five years after the FCC commenced fumbling with television allocations, two million households or 3 percent of all homes, receive absolutely no over-the-air television signals. It is estimated that over ten million homes, or 15 percent of the popula tion, do not receive the three national network signals,off the air. It is CATV, however, that over the last 25 years has filled gaps in the FCC's allocations voids and lent a boost to UHF television in tandem with your all channel receiver la w

It is antithetical, then, to your Communications Act purposes to saddle CATV, and through it, the American television-viewing public with a tax for the privilege of watching

Copyright is a creation of the legislature under a constitutionally delegated power: "To promote the progress of science and useful acts by securing for United times to authors and inventers the exclusive rights to their respective Writings and discoveries.”

Also under the Constitution, you have specifically been delegated power to make laws affecting interstate commerce and have done so vis-a-vis broadcasting by passage of the Communications Act Today, the Communications Act and Copyright Act are in a state of apparent tension. I say apparent because the program suppliers would have you believe that the main purpose of copyright is to give authors money so that they will have incentive to write Not true. The main purpose is not to reward authors, but to insure that creative works find their way to the public. The Supreme Court has pointed out that in economie terms, copyright grants are made in "the connection that encouragement of individual effort by personal gain is the best way to advance public welfare ・・・ Thus, the tension dissolves when it is realized that Congress has also established a Communications Act and created the FCC to fulfill similar, if not identical, purposes those being to secure the general benefits of radio and television programming to all the people of the United States and to encourage their larger and more effective use in the public interest. In these stated purposes, it is inconceivable that the FCC's own general counsel could testify before you that CATV should pay just because the argument has been around for a long time We submit that if the FCC testifies in support of copyright, It ought to reiste that testimony to some area of concern within its jurisdiction. If Mr. Hardy desires to see resolution of the issue merely for the sake of resolution, his dewire can be accommodated just as well by deleting CATV from this bill

There are other voices in and out of the CATV industry who say that "the copyright issue must be solved it must be put belind us, because until it is laid to rest, the investment community will not advance the capital required by cable to expand and grow "

We have no quarrel with this line of reasoning except when it is expanded to the illogical conclusion that the industry should simpy pay copyright merely to expedite the removal of this uncertainty, when (ATVs future is better served by the removal of € ATV from copyright legislation

And then there are voices in our industry who say "We can afford to pay” with remarks like "What is one or two or 24 percent of our grow? Let me tell you what it is

In December 1973 CATA turned into Senator John McClellan an economic study of more 11 an 250 CATV system a rat gig in wine from 40 w chwerthers to 5 W) wighne ribers. In that study, which we will with rat for the record. CATA found that in the singular "rate level of one percent of gross proceeds to expyright that amot got ar brena 1 won by mystett, alte systems of 1001 1 500 nu) a rulers w='d experience red action of net revenues of 118 percent

Erstky the in distry cannot a′′ nd to pay and that in the truth Test 11 is be reholdered solely in pitch for a mall system exemption that is a fat dollar * e』 **% ⪜t%r ?, a® $} cow it in pot Frogyright will adversely affect larger སྨོན་ལྔ་

We also regard as fir tumental ecratterati na the following questions which wheelch he maked of every pe parent of ongs right liability for CATV

1 Wy od 1) ‚m ind ‚»*ry ¡my'

2 Who will really pay?

1 Wow 1 receive Dej w970er tu?

CATV al cal not pay expracht beentine Pere is no debt owbig. There are Tandrevis of thousands of 1 spital rooms in this country offerig felevis, m service at a price. Patients rent a televisi -ti net and the set sijgsier the L, mps'al

2. Who will really pay? And,

3. Who will receive the payments?

Consider this, there are hundreds of thousands of hospital rooms around this country, offering television service at a price. Patients rent a television set and the set supplier, the hospital, and maintenance man all profit. The rates are as high as $3 a day, nationally, according to the hospital association. This is an unmolested industry, hospital television, HOTV, possibly with gross revenues exceeding cable. Why are they not in the copyright bill? Simply because, providing the service of facilitating television viewing is their job. The Supreme Court has twice held that the same rationale applies to CATV, and these cases of the Supreme Court are exceedingly instructive. First, one must lay aside the program-supplier-sponsored misconception that the cases are irrelevant-relevant, pardon me, because they dealt only with the 1909 Copyright Act. Of course, the Supreme Court was dealing with the 1909 Copyright Act, but the decision was made "with due regard to changing technology"; that is not based on 1909 concepts. In fact, the Court held:

"Mere quantative contribution cannot be the proper test to determine copyright liability in the context of television broadcasting. If it were, many people who make large contributions to television viewing might find themselves liable for copyright infringement-not only the apartment houseowner who erects a common antenna for his tenants, but the shopkeeper who sells or rents television sets, and, indeed, every television set manufacturer. Rather, resolution of the issue before us depends upon a determination of function that CATV plays in the total process of television broadcasting and reception."

The Court reasoned that television viewing was a combined activity, a combined activity of broadcasters and viewers. Broadcasters perform, viewers do not. Broadcasters are active performers, viewers passive beneficiaries. CATV "falls on the viewer's side of the line."

The Court concluded as a matter of separation of powers-not as a matter of copyright policy-that the job of accommodating "various competing considerations of copyright, communications, and antitrust" belonged to Congress. The Court did not intend that Congress, in fact, adopt CATV copyright liability.

Then came Tele Prompter-CBS, where the Court was faced with microwaved, long-distance signal importation-more than 450 milesby CATV systems that also originated their own programs, also sold local advertising, and also interconnected with other systems. The Court found no copyright significance to these auxiliary activities and found that the distance the signals traveled did not "alter the function that CATV performs for its subscribers." In fact, the Court stated: The reception and rechanneling of these signals for simultaneous viewing is essentially a viewer function, irrespective of the distance between the broadcasting station and the ultimate viewer.

Mr. Chairman and members of this committee, when a television station broadcasts, the broadcast is in the public domain. The Supreme Court characterization of what CATV does is as true today as it was when the Court made its decision. What CATV does-its viewer function-is not altered by the words of the 1909 act, or H.R. 2923. Those advocating CATV liability have a high burden of persuasion because CATV does fulfill Communications act goals by making television more widely available, or often available for the first time.

It is a viewer-oriented medium, as are translators, master antennae, rooftop antennae, and television sets themselves. None of these entities are prospectively liable for copyright under your bill, and none should be, for they are all part of the process of nationwide dissemination of programing that you have legislated in the Communications Act.

In fact, in Tele Prompter-CBS, the copyright holders argued that CATV prerelease of programs would dilute the profitability of reruns and other syndicated properties, thus removing incentive to produce television programs. The court rejected this argument. It recognized that the appropriate nexus was missing, that is, copyright holders do not receive money from the ultimate user-the television viewer-the money comes from the advertisers.

In fact, the Court recognized that the distant signal carriage does not interfere with the "copyright holders' means of extracting recompense for their creativity and labor"; and that, in fact, CATV provides a larger viewing market to the benefit of both the advertiser and the copyright holder.

We submit that CATV should not pay because CATV does not owe. This leads to the question of who would really pay, were this bill to become law. Well, there is no doubt that your imposition of copyright on CATV would be, at least in part, a consumer tax on television viewing. Must the cable viewer himself pay it? It could stop at the cable company, as it was pointed out, but it will not because there are no free lunches in this world.

Is it a large amount? At the national average, $6 per home. You have all the figures before you. The copyright bite works out to $1.80 per home per year for the 2.5-percent rate, which is irrespective of the number of signals carried.

In the seven congressional districts of this committee, there are approximately 73,000 cable homes. Under this bill, these 73,000 homes could pay to copyright holders up to $131,400 this year.

So, do the television viewers care? CATA has already received more than 200 community resolutions opposing this viewing tax, from cities as diverse as Eau Claire, Wis. and Granville Village, N.Y.

These resolutions from municipalities will be supplied for the record. Further, the U.S. Conference of Mayors and the League of Cities has also adopted a joint resolution in 1974, unanimously opposing the inclusion of CATV in the copyright bill. The message, I believe, is that the constituents are concerned about higher CATV charges that will result from copyright legislation.

The third question concerns to whom copyright payments would be made. Mr. Jack Valenti, president of the MPAA, told Senator McClellan's committee on the Judiciary on August 1, 1973, that he also represents something called the Committee of Copyright Owners, composed of eight independent suppliers of copyrighted television programs, which are listed in my text. Mr. Valenti testified:

The programs supplied by members of CCO to stations, and thereby to cable systems, constitute by far the largest part of all copyright programs carried by television and cable.

In a CATA study of programs broadcast in New York City during a recent week in the month of March we found that 46 percent of all copyright-on-file evening programs on CBS are in fact owned by those

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