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minute, the instant that signal radiates from the transmitting tower; will you accept that?

In other words, as soon as they release it it's gone and they have no more expense involved in the delivery of that signal.

Mr. RaiLSBACK. Yes; they don't deliver it by cable, they deliver it by other means.

Mr. COOPER. That's correct.
Mr. RAILSBACK. That is a different system.

Mr. COOPER. Well, not necessarily. On the other hand, our expense only begins where their expense stops. Mr. RAILSBACK. But they don't charge viewers, do they?

Mr. COOPER. We did a very interesting study on that a few months ago in which we pointed out that based upon the gross receipts of all television stations of all markets in the country we can very quickly determine a cost per household per year; a cost based upon increased costs for all goods and services that were for sale in the marketplace, which included a percentage for advertising cost, half of one percent for Coca-Cola, for example.

If you do this, you very quickly determine that there is some place between $21 and $50 a year per home, is the average cost, nationwide, that we all pay, we all share it, for the broadcasting service that exists.

Mr. RAILSBACK. You know, what really bothers me and this may not be analogous, but we have sat through record piracy hearings where we have received testimony from record companies to the effect that they have to pay rather substantial costs to invest in a particular production. Then certain people pirate that work product, and sell it at a reduced cost. They have gotten the benefit of that capital invest ment, and the cost of producing that work and they make a big profit.

Now, I have difficuty. I see you charging the individual viewer, and I see the networks using advertisers, and I see you both disseminating creative works, which is in the public interest. But to me it is not logical for them to have to pay for copyright, and you do not.

Mr. Wiggins. Will the gentleman yield?
Mr. RAILSBACK. Yes.

Mr. Wiggins. Would it make any difference if your reception of the signal were taped by you and rebroadcast at your convenience ?

Mr. COOPER. Would it make a difference philosophically! Mr. WIGGINS. In terms of your viability for copyright payments. Mr. COOPER. I would expect it would, yes, sir. Mr. WIGGINS. What is the difference, other than time? Mr. COOPER. I think there is a very significant difference, the time of showing, the fact that it is not a simultaneous release.

You see, the cable company—and this is an argument that goes back to 1954, that the cable companies participate in the programing and scheduling of the releases that they show upon their system. Well, the factual matter is, we do not. The disseminator, the television broadcast station showing the movie that you refer to, he picks everything that goes in it, the contents. We have absolutely no choice over it. His expenses absolutely stop the minute that signal is broadcast, whereas ours only begin at that point. He gets a free ride through the federally regulated airways of which there is only a limited quantity available, and we must therefore share those airways, so it's not creating a problem.

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 clon't have free easements, we must pay a local franchise fee tax. The rights-of-way where we string our cables are the same to us as the broadcaster's either through which he transmits from his transmitting tower on top of the Sears Building, except 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 transmission medium; he has none. His stops the minute his signals goes into the public airways.

Mr. KASTEN MEIER. 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 retransmits; if he sells advertising, if he does a series of other things than simple retransmission, extemporaneous, then, are you conceding 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 conceding that copyright could and should be paid is specifically on the pay television aspect of our industry where a movie specifically is bought and then shown on the cable.

Mr. DANIELSON. If I may interrupt. You mentioned pay television. If you originate, if you just simply put Bambi on the cable, whether you charge individually for it, or not, do you see any reason why you should not pay copyright, if you originate!

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

Mr. DANIELSOx. If you originate, put it on your cable-
Mr. ('OOPER. Should I pay copyright for showing Bambi?
Mr. DANIELSON. Yes.
Mr. ('OOPER. Absolutely, sir.

Mr. DANIELSON. It isn't a matter of whether you charge your subscribers, but if you put it on your cable, you should pay.

Mr. (OOPER. Many systems have a 24-hour movie channel. That is not something you pay extra for, that is just part of the service.

Mr. KASTES MELR. Getting back to my question, what I am trying to establish is that if cable systems involve themselves in certain activities which some of your members must--then to that extent they might, you concede, owe a copyright. So, it isn't a flat no-copyright-atall situation, but no copyright if, or unless a cable system involves itself in certain aspects.

Mr. COOPER. No copyright payment for signal transmission, is, I believe what we are saying. I don't like the word "retransmission," but everybody uses it.

le to all the people of the United States, a rapid, effici A virid-wide wire and radiocommunications service."

her the FCC commenced fumbling with television allocat buis or 3 percent of all homes, receive absolutely no over

as it is estimated that over ten million homes, or 15 perce % 34 receive the three national network signals off the berter, that over the last 25 years has filled gaps in the

320d eat a boost to CHF television in tandem with your all

betical, then, to your Communications Act purposes hit, the American television-viewing public with a ta:

Mr. KASTENMEIER. But the fact of life is that increasingli 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. KASTENMEIER. It is a rather mixed situation, it isn't qutes black and white.

Mr. Cooper. That is exactly right, exactly right. They do pay for : now when they show Bambi.

Mr. DRINAX. One more question. I wonder, sir, if you have stat,f.my language, what would you substitute for 2:22:3, the relevant 0:0*,' If you would have that prepared. I think that would give me, at les a better idea.

Mr. COOPER. I can submit that to you.
Mr. Drinax. Thank you.
Mr. COOPER. Thank you.sir.

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

Mr. COOPER. Thank you, sir.
[The prepared statement of Robert ('ooper follows:)

I

STATEMENT OF ROBERT ("OOPER, EXEL UTIVE DIREKTOR, CATA Mr. Chairman, and members of the subcommittee, I am Robert (ofer. Erre: tive Director of CATV'.

t is a creation of the legislature under a constitut Tu To promote the progress of science and useful acts

times to authors and inventers the exclusive rights t

nad discoveries."
A. ander the Constitution, you have specifically been de
MP an affecting interstate commerce and have done so vis-

uage of the Communications Act. Today, the Commur
Piret Act are in a state of apparent tension. I say app
a : rpilers would have you believe that the main pui
s' pre authors money so that they will have incentive to

1.purpose is not to reward authors, but to insure th
la:! way to the public. The Supreme Court bas pointed ou

A grigbt grants are made in "the connection that yrlatfort by personal gain is the best way to advance pu

'he pukinn dissolves when it is realized that Congress h L a .. ns Act and created the FCC to fulfill simila

be being to secure the general benefits of radio

to all the people of the United States and to enco
156 2. etre use in the public interest. In these stated

errae that the FCC's own general counsel could testi
A n d pay just because the argument has been arour

...!!hat if the FYC testifies in support of copyright,
22 p. a to some area of concern within its jurisdict
o 'o see resolution of the issue merely for the sake

* 12 m modated just as well by deleting CATV fror

Tyne are other voices in and out of the CATV industry m y must be solved-it must be put behind us, bec

y most, 'be investment community will not advance the capita

T: 4:4 und grow." WE ARE do quarrel with this line of reasoning, except whe ja moolision that the industry should simply pa indir be removal of this uncertainty when CATV's fut

renal of CATV from copyright legislation. 12A" bere are voices in our industry who say "We can TELU İke "What is one or two or 242 percent of our gros

D

CATA, the ('ommunity Antenna Television Asmation is a trade anemy'e organized in 1973 that tocar has as members sime 100 CATisstems thri * : the United States. Originally organized to fixon promised prik'lor. CATA has broadened its membership and

of ICU .'s to in.de ) matters as participating in Fre properlings. Generally stated. CATAR phs recognizes that the roots of CATV lie within the full mtnity

! name, a name abandoned in the 1980s by our immediate predrasus. II .

We are not here to pull punches or present diplomatic tri,'/ 11 truths Vor will we play a lengths numiless pame By a number R. . statistics on who do or does not w ort this bill Honfler, vond AT that some 23 state and regional writion have voted a pairst le vil Domition. And you (111 (unnt on the filters of our in the sale are my A kociations still supportint the WTA tion Fitrihvor the Pr!.. . State Asociatindi and the WTA la rip! 11. le nether company, TelePrt:i. have requested and revin til, on their own tro present les tra". XCTA. TelePromp Toral, the Pillivari. Ons were over (H.. . home. These stallen reinil onls (un 11-10! not reasons. We',.!! the only reason (ATV apirisht presents his ars Sport i la P . . copyright-supportinik pl:.ter of the industry someth1 CATI pont because it in l.iis pir1:11,' lil .. !Hall of suit the (wynsen1s ngrement. The e'll VAB, and IPA. C.In fro to exp', !! agreement tool For our part. We will tinentrate on the merits of the 16'

CATA is here todar try !! n.ro:.bership of their belirse the phon e picture 11.0" frs is entitled to play i'r llind in the p hoto of ('ATI ower cor CATV !. Pilot W ront the joint pricht llop of ViTA AB MAAthit CAT

SIGE, The inition of prison CATI nart non ?! helewing . It is also a gore potion to an 1!116T!..ull rein os,1* ! !! ha. Put told time and fill. navn of te briol.net of depor desea free Vinton A e all knon. It is not a free

1 an ndiertiser si peper tem which means to al' puniy for the pr . w warati by paying bror prin for trinn U rly prunes Alou, a popsurintinly in . households must pas & Neti!1e to returils r e teleien signalo ir pirer

pures toy multi ir to CAT And Dew Ph D in rigti! legislation be!

ll the ashed to put yet a third Remember, ("ATI pawahly wnu'd neret Puncome into eristeter if the par hund studiously found the Congress anal radote a fertion (me of the Communications Art to make aralla hle. Par

in (weere, 1973. CATA turned into Senator John Mc
tokyot more than 250 CATV systems, ranging in size fro

cribers. In that study, which we will submit for the
that in the singular "rate" level of one percent of gross pr
hat, ang other breakdowns by system size, systems of 1,0

perience reduction of net revenues of 13.8 percent. Prankly, the industry cannot afford to pay and that is th

ed solely pitch for a small system exemption, th
exe, soch as $100.000, it is not. For copyright will ad

trer, eluding multiply owned systems.
Te is regard as fundamental considerations the follow

e nd of every proponent of copyright liability for C
I Why should this industry pay?
2 he will really pay?
1 mo will receive the payments?
CATV old not pay copyright because there is no del

therands of hospital rooms in this country
prie Patients rent a television set and the sets

[graphic]

as prihle, to all the people of the United States, a rapid, efficient, nation-wide, mr.d world wide wire and radiocommunications service.** Yet, twenty-five yran after the FTC commenced furublink with television allocations, two million husholds or 3 percent of all homes, rrive absolutely no over-the-air television sigra. It is estimated that over ten million homes, or 16 percent of the popula. tv, do not rerile the three national network signals of the air. It is ('ATV. berseter, that over the Inst 25 years has filled maps in the Fils allocations P Is and lent a boost to L HF television in tandem with your all channel receiver

It is antithetical, then to your (ommunications Act purposes to enddle CATV. ar.d thraxhi It, the American television-Fiewing public with a tax for the privilege

(opyrikt is a creation of the legislature under a constitutionally delegated

rr: *To promote the price of science and usefui acts by securing for 1191.1 fod t111:*** to author and insenters the exclusive rights to their respective wri: 1. ad virtie*

As under the constatution, you have specifically been delegated power to make laws affeting internate comment and have done NO VÍN-a vis broadcasting by usage of the communications Art Toway, the communications Act and c riaht Act are in a state of apparent tenslon. I may apparent bonuse the prstam suppliers would have you **lete that the main purpme of copyright is to give authors money so that they will have incentive to write. Not true. The main purt is foot to reward authon, but to insure that creative works fr.d their way to the public The Supreme Court has painted out that in economic terms, pright krants are made in *the mention that encaumgement of individual rt by terminal kain in the wat way to any puhiie welfare •.•** Th."N, the termen din lips wlien it is ru' tliat (

o

as also tabliebed a (excl. mnunirntins Art and crrated the it to fall Miliar it next identiani.

in thim ng to mure the spheral trenefits of audio and telerinin pro inn.ning to all .1. let the 1 11. Niates and to manage their larger mind mere effetive us in the public interest in these stated print , it is in. finisable that the p o wn grneral unari fuld testify before you that (ATV tuld pay just want me the arritent l.as turn a nd for a long t11., We m .1t that if the tre institwirt a cuil.t, it ought to ninte that testimony to m e arm of premiiliin its jurisdition If Mr llanty dein to see toe afhun at tlor inntje merely for the sake of relation, his draire an **01111.- te lust R* !1 ts de pofl. (All'in t i !

Tre are other worden in and out of the ("ATV industry who say that the en right imue must be mlved it must be prst behind un t une until it is laid to put the investment mnunity will not alvaner thr (attal ruired by calle tretj41.0 and row"

We have no quarrel with this line of framinin pirr when it is e nded to the illni

en i.nt the 10.0*ry weld sinis ar aurig?! merely Imple ni !Iges a f it.ls inprint.' WITO (ATI fratire is tetter seriod lay the fronin (AIV from p riklit Irellation

And (.en there are an in ur 11.111 who say "We can a rd to fe** with marke like **Wat is een two pa r t of our kr As?" lat w tell you wl.at it is

In l ulet 14 (ATA 1 Into Merantas Jiha 1.9.11an an minnie ***y rom: AL *** ATV ******* xl in 'fra 10 *"1err.lere to NUR Tolmini ***

.h we will !! font leur ('41. fund it.at in the 211.! r rateleirloof te mirat not a literator rig'it 1.at ATE ! # ritra t y ***4. e'te !! I 1 I *) surir

1.1: pirer P inot i el r *,', II I

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E 3 a viewer-oriented medium, as are translators, m:
sottop antennae, and television sets themselves. None
* ure prospectively liable for copyright under your
erald be, for they are all part of the process of natio
Dance of programing that you have legislated in th
tos Act

In fact, in TelePrompter-CBS, the copyright holde CATV prerelease of programs would dilute the prof reas and other syndicated properties, thus removing in bune television programs. The court rejected this prognized that the appropriate nexus was missing, th: bolders do not receive money from the ultimate userTimer--the money comes from the advertisers.

In fact, the Court recognized that the distant signa st interfere with the “copyright holders' means of ex pense for their creativity and labor”; and that, in fact, 1 larger viewing market to the benefit of both the ad copyright holder.

Do free mpany, as it wole viewer hp art, a consumo

2. Who will really pay? And,
3. Who will receive the payments?

('onsider this, there are hundreds of thousands of hospital roce around this country, offering television service at a price. Patients rent a television set and the set supplier, the hospital, and maintenane man all profit. The rates are as high as $3 a day, nationally, according to the hospital association. This is an unmolested industry, hospita: television, HOTV', possibly with gross revenues exceeding cable. Van are they not in the copyright bill? Simply because, providing the service of facilitating television viewing is their job. The Supreme ('ourt has twice held that the same rationale applies to CATT', ani these cases of the Supreme ('ourt are exceedingly instructive. First, olie inust lay aside the program-supplier-sponsored misconception that the cases are irrelevant-relevant, pardon me, because they dealt only wilai the 1909 Copyright Act. Of course, the Supreme Court was deal: with the 1909 ('opyright Act, but the decision was made “with do regard to changing technology"; that is not based on 1909 con epis In fact, the Court held:

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

The ('ourt reasoned that television viewing was a combined a tivity, a combined activity of broadcasters and viewers. Broadcaster perform, viewers do not. Broadcasters are active performers viewer pa-sive beneficiaries. CATV "falls on the viewer's side of the 1::r.

The Court concluded as a matter of separation of powers-botas a matter of copyright policy—that the job of accommodating "runera competing considerations of copyright, communications, and ani:trusi" belonged to ('ongress. The l'ourt did not intend that ('ongina in fact, adopt CATV' copyright liability.

Then came TelePrompter-('BS, where the Court was faced w..! microwaved, long-distance signal importation--more than 430) miles by CATV systems that also originated their own programs, als) ! local advertising, and al-o interconnected with other syuterns. The Court found no copyright significance to these auxiliary activities and found that the distance the signals traveled did not "alier the fun! that (ATV performs for its subscribers." In fact, the Court stated.

The reception and rechanneling of these signals for simultaneous viewing is pontially a viewer function, irreptive of the distance between the broadcas 11146 station and the ultimate viewer.

Jr. Chairman and members of this committee, when a television station broadcases, the broadcast is in the public domain. The Supreme Court characterization of what (ATV does is as true today as if was when the ('ourt made its decision. What CATV does--its veter function--is not altered by the words of the 1909 act, or HI.R.

Those advocating CATV liability have a high burden of persua-ion because (ATV dos fulfill ('ommunications act goals br ana king television more widely available, or often available for the first time.

[graphic]

We submit that CATV should not pay because CAT

This leads to the question of who would really pay, become law. Well, there is no doubt that your impo right on CATV would be, at least in part, a consume

on viewing. Must the cable viewer himself pay it? ) tas cable company, as it was pointed out, but it will no

no free lunches in this world. Is it a large amount? At the national average, $6 have all the figures before you. The copyright bite wo per bome per year for the 2.5-percent rate, which is irr tember of signals carried.

In the seven congressional districts of this committe proximately 73,000 cable homes. Under this bill, thes old pay to copyright holders up to $131,400 this year.

S do the television viewers care! CATA has a Deee than 200 community resolutions opposing this vi ees as diverse as Eau Claire, Wis. and Granville Vil

These resolutions from municipalities will be supplie Further, the U.S. Conference of Mayors and the Leag

so sdopted a joint resolution in 1974, unanimously con of CATV in the copyright bill. The message, he sostituents are concerned about higher CATV CI

ilk from oopyright legislation. The third question concerns to whom copyright pay made Mr. Jack Valenti, president of the MPAA Ollan's committee on the Judiciary on August

represents something called the Committee of Cor used of eight independent suppliers of copyrig yenums, which are listed in my text. Mr. Valenti Dhe mms supplied by members of OCO to stations, and

coustitute by far the largest part of all copyright pro

LICATA study of programs broadcast in New Y
Ihon week in the month of March we found that

right-on-file evening programs on CBS

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