eight CCO firms; similarly, 32 percent for NBC, and 17 percent for ABC.

Finally, we also checked movie copyrights on file for that week in March of this spring, and it was reflected that 51 of the 68 movies-60 percent-were owned by one of these eight firms. Clearly, Mr. Valenti is correct about his employer's position.

But, to make the analysis and our point more clear, please consider that the largest copyright owner of the big eight-MCA-had gross revenues in 1974 of $641 million, a third more than not the largest cable company, but all cable companies; the whole cable industry.

Given the current state of economic affairs in our cable industry, we are indeed saddened that we were not the first in thinking of a relief act for our industry, a royalty from program suppliers to CATV for aiding viewers to see their programs. Program suppliers, we feel, clearly can afford to pay.

Thank you.

Mr. KASTEN MEIER. Before yielding to Mr. Pattison I just have a clarifying question. In terms of constituent members, does CATA differ from NCTA?

Mr. COOPER. You mean is there an overlapping of membership? Mr. KASTEN MEIER. Are the operators more or less, characteristically, the same, as far as size?

Mr. COOPER. I have never seen an analysis of that, I can give you an expression from my own experience. The impression would be, "No." Typically, our operators tend to be smaller and dependent in the sense that they probably own a couple of systems as opposed to multiple systems.

Mr. KASTEN MEIER. They tend to be smaller in terms of operations? Mr. COOPER. They tend to be smaller in terms of operations, and in terms of subscribers, the area they serve. They are more rural, as a

consequence.

Mr. KASTEN MEIER. Does the type of retransmission that they engage in, would that be substantially different from NCTA members?

Mr. COOPER. I don't think substantially, no, sir.

Mr. KASTENMEIER. One other question. Does the view of your organization differ from the ad hoc committee on cable television!

Mr. COOPER. I am not aware of any significant difference, no, sir. Mr. KASTENMEIER. I yield to the gentleman from New York, Mr. Pattison.

Mr. PATTISON. I just want to thank Mr. Cooper for his statement; it certainly provides us with the other side of the coin, and gives us a real different philosophical point of view that we obviously have to consider. I have no questions about the statement.

Mr. KASTENMELER. The gentleman from Massachusetts, Mr. Drinan. Mr. DRINAN. Just one question, Mr. Cooper. On what do you base your conviction here, that you expressed so well, that copyright is not due. Do you go back to the Supreme Court opinion, or how, ultimately do you do it?

Mr. COOPER. I think basically the Court said in its two opinions what we have always believed as a group of operators; and we believe in the language of and subsequent court, many, many Court decisions interpreting, perhaps, the section of the Constitution that deals with copyright.

Mr. DRINAN. And you believe that all these people have deviated from what you believe to be the law simply because they worked out the consensus agreement, and it is politically expedient for them to go that way?

Mr. COOPER. I think that is what they say, and I have to agree. That is their analysis why they are where they are; yes, sir.

Mr. DRINAN. Well, now, just a clarifying one last question. Do you think that any part of cable television, under any circumstances, should be required to pay copyright fees?

Mr. COOPER. Sir, I think we almost need to talk about the definition of cable television. If we are talking only about a system that receives broadcasts from off-the-air sources, and supplies those broadcasts to its customers, then my answer to you is, no, we can't see any area, any geographic center of operation, any size of system, any dollar economic growth revenue determination of system that to us makes any sense that should be liable for copyright, based upon our philosophical view

that is set forth here.

However, if a system, a functioning operating system wishes on its own to serve the needs of its community to procure for display only on the cable movies, sporting events, and other events that are not generally available off the air to broadcasting, then I am sure that they must and should enter the normal marketing mechanisms, and pay their proportionate percentages of copyright fees, just as any originating transmitting facility should do.

Mr. DRINAN. All right, thank you for your statement.

Mr. KASTEN METER. The gentleman from California, Mr. Wiggins. Mr. WIGGINS. Well, first, Mr. Cooper, I want to compliment you for coming out swinging. You have stated the other side of the coin, as you indicated, not only objecting to any imposition of copyright fees, but suggesting that you ought to be paid for expanding the market of the originator.

You have just answered a question which suggests to me that you do not object conceptually to the whole idea of copyright. Do you affirm that?

Mr. COOPER. By conceptually, I guess we are talking about the constitutional conception of copyright as a means of making available to the public?

Mr. WIGGINS. Well, it is a two-edged sword. The language which you indicated, indicates the policy of making available to the public; and then the framers of the Constitution, I believe, added to the language, "by securing for a limited time to authors and inventors the exclusive right", and so forth.

So, I think it is fair to say the Constitution contemplates some mechanism for securing those rights, and we do so in the payment schedule.

Mr. COOPER. I agree.

Mr. WIGGINS. You conceptually agree to that. And you would apply it to cable in the sense of cable-originated programs, not simply transmitting someone else's signal.

You make a case that the payment is not due, and support that position in part by the argument which relates to payment of the royalty by the viewers, as opposed to putting that economic burden on the advertisers; is that correct?

Mr. COOPER. That is correct.

Mr. WIGGINS. Well, it seems to me that this notion of advertisers' paying the royalty is almost unique to the television industry, and perhaps to radio. But, if you get away from those and talk about books, for example, the author is paid by the reader-the analogy being to the viewer. Indeed, you can carry that analogy quite a ways, and it seems that television, and perhaps radio are unique in the sense that someone else picks up the tab; is that not so?

Mr. COOPER. Yes.

Mr. WIGGINS. Well, then we shouldn't place too much emphasis on the notion that the viewer may ultimately have to pay as a reason for rejecting the payment of copyright by a cable television, should we? Mr. COOPER. Well, I think that is probably a political decision.

Mr. WIGGINS. No, I am not thinking about it politically. I am trying to get some evenhanded treatment of those who exploit for profit the protected works of authors and inventors.

Well, I am going to reread your statement carefully, Mr. Cooper because it is a threshold question that we have to come to grips with, whether you should pay anything. That is a difficult question on which you have strong views. But we only get to the question of the tribunal and the rates if they get past the threshold. Thank you for raising the issue.

Mr. KASTENMEIER. The gentleman from California, Mr. Danielson. Mr. DANIELSON. I have very little to add to what has already come forward here. I just want to be sure I understand the thrust of your presentation. I think I do, and that is, it is your position that the cable should pay no royalty except in those situations where it originates its own program, and then of course it would be on a negotiated basis, I suppose, with the owner of the copyprighted material.

Mr. COOPER. That is correct.

Mr. DANIELSON. And the items you pick off the air and transmit to your subscribers that are things that are already disseminated, it is your position that a cable is to serve as sort of an amplifier for the eyes and ears of the viewer, and you are simply enabling the viewer for a subscription fee to see and to hear the programs that are already broadcast by someone else.

Mr. COOPER. Yes, sir. I think what we are really doing is fulfilling a mandate that is stated in the Communications Act, to provide the widest possible dissemination.

Mr. DANIELSON. Well, that may be a legal effect of what you are doing. What you are doing is to sell to your subscribers a service and enable them to see and hear things which they couldn't otherwise see and hear.

Mr. COOPER. We are selling to him, if you will, the utilization of our amplifiers and our cables; yes, sir.

Mr. DANIELSON. Thank you very much.

Mr. KASTENMEIER, Mr. Drinan?

Mr. DRINAN. You mentioned the seven congressional districts of this committee, and this is of interest to me. There are approximately 73,000 cable homes. That is collectively, in all seven?

Mr. CQQPER. In all seven districts, that's correct.

Mr. DRINAN. If counsel could furnish that to each of the seven members, I am sure they would be as interested as I am. Mr. COOPER. We certainly will, sir.

Mr. KASTEN MEIER. The gentleman from Illinois, Mr. Railsback. Mr. RAILSBACK. Mr. Cooper, do you think the networks ought to have to pay to run movies that have already been made public? In other words, if I pick up an old movie, do you think a network should have to pay a fee for copyright? Or, for that matter a station like WGM, which is a nonnetwork station. Do you think that a network, or an independent television station ought to have to pay a fee?

Mr. COOPER. Well, the point is, it is in the public domain for the first time

Mr. RAILSBACK. So, they are perpetuating, then, the Federal Communications Act.

Mr. COOPER. Yes.

Mr. RAILSBACK. Should they have to pay for running that movie? Mr. COOPER. I have trouble bet ween a fee and

Mr. RAILSBACK. For the copyright, I'm sorry.

Mr. COOPER. Okay.

Mr. RAILSBACK. They are disseminating a creative work to the public.

Mr. COOPER. Yes, sir.

Mr. RAILSBACK. Just like you are doing.

Mr. COOPER. No, not just like it.

Mr. RAILSBACK. Maybe not just like, but they are disseminating it. What I am asking you is, should that network have to pay a fee?

Mr. COOPER. All right, they are disseminating this movie, program, whatever it might be into and through the public domain from its airway, for which they are receiving revenues. Yes, they should.

Mr. RAILSBACK. They are receiving revenues from their advertisers. Mr. COOPER. Yes, sir.

Mr. RAILSBACK. You are receiving your revenues from your viewers. Mr. COOPER. That's correct.

Mr. RAILSBACK. I have trouble seeing the difference, could you give me your reasoning? Why should you not have to pay?

Mr. DANIELSON. Will the gentleman yield?

Mr. RAILSBACK. Yes.

Mr. DANIELSON. I think the gentleman pointed out here at one point, the broadcasters are actively broadcasting this copyrighted material; the cable system is passively

Mr. COOPER. Delivering it.

Mr. DANIELSON [continuing]. Receiving it, I think that's it.

Mr. RAILSBACK. But, I just don't understand the logic where the network on the one hand is acting as an information disseminator and, on the other hand as a program originator where somebody else has produced, and actually has to buy that performance, or pay a fee, or pay a copyright, or buy the copyright. I have difficulty seeing where in that case

Mr. COOPER. I think I can answer it for you.

Mr. RAILSBACK. Go ahead.

Mr. COOPER. Their cost of doing business runs the gamut from electricity to the power and all this business, right?

Mr. RAILSBACK. Right.

Mr. COOPER. All right. The minute that signal leaves the transmitting tower it's in the ether, as it were; it's in the atmosphere, in the public domain. Their cost of delivery of the signal stops the

57-796 () 76 pt. 1 41

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 investment, 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.