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 hate no more expense involved in the delivery of that signal.

Mr. RAILSBACK. Yes; they don't deliver it by cable, they deliver t 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 marketp's e 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, nation" ie, 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 hear 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 well 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 dise nating 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 paymer.ts Mr. COOPER. I would expect it would, yes, sir.

Mr. WIGGINS. What is the difference, other than time?

Mr. CooPFR. 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 brosi cast 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 feders"y regulated airways of which there is only a limited quantity ava. 'abe, and we must therefore share those airways, so it's not creating 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 don't have free easements, we most 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 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 retransmats; if he sells advertising, if he does a series of other things than simple retransmission, extempor icons, 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 fing about in terms of conceding that copyright could and should be pa, das 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 yock charge individually for it, or not, do you see any reason why you should not pay copyright, if you or gate

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

MY DANIELSON. If you originate, put it on your · able

Mr. Cooper. Should I pay copyright for showing Bamba!

Mr. DANDEOs. Yes,

Mr. Cooper Visolutely, sor

ME DANIELSON. It isn't a matter of whether you change your wab wriers, but if you put it on your cable, you saoully

pay.

Mr. Cooran. Many systetiis have a 24 hout movie channel. That is Pot somethir g you pay extra for, t'at what part of the servie

1

ME KASTENMEK Getting back to my që fat what I am trying to esta dish is that if cable systems involve then schow in certain, not ve which sotne of your members miast then to that extent they 19d Voi concede, owe a copyright. So, it port to copyright at 9'' - taation, Eat no copyright of, or los acablesy ten moolawat alf

Mr. Coop. No copyright payment for sgual transmission, is, I be deve what we are saving. I don't lae the word "reft at stipss off everybody usesit

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 are 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 exp»ræ 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 mont's 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 inery ased costs for all goods and services that were for sale in the marketp', which included a percentage for advertising cost, half of one per ezt 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, nationwie, 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 hear where we have received testimony from record companies to the effect that they have to pay rather substantial costs to invest in a particn'ar production. Then certain people pirate that work product, and 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 paymer.ts. 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 broad cast station showing the movie that you refer to, he picks everything that goes in it, the contents. We have absolutely no choice over it. It's expenses absolutely stop the minute that signal is broadcast, whereas ours only begin at that point. He gets a free ride through the feders”y regulated airways of which there is only a limited quantity avalse, 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 *.gal 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 meest 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 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 org nates; if he tapes and retransmits; if he sells advertising, if he does a series of other things than simple retransmission, extempor cous, 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 ta's ng about in terms of conceding that copyright could and should lepa, das 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 f

Mr. CooPER. If I have procured Bambi, or the rights to show it on the of

market

ME DANIELSON, If you or ginate, put it on your cable

Mr. Coorer. Should I pay copyright for showing bambi!

Mr. DANDON. Yes.

Mr. COOPER. Absolutely, se'P.

Mr. DANDING. It isn't a matter of whether you charge your sh werners, bat if you put it on your cable, you saould pay.

Mr. Cooper. Mahy systems have a 24 hour movie channel. That is Tot something you pay extra for, that serot part of the servie

M2 KASIESMETEk Getting by k to my qa toh, what I am trying to estar lash as that if cable systems involve them selves in certacha motivas

which some of your thembers trist then to that extent they 109) ↑ Vou concede, owe a copyright. So, it in 't a flat no cop và ght at fatuation, but no copyright.f, or unle

Mr. Coorin. No copyright payment for signal transmission, is, I herese what we are saving. I don't like the word "rytrar shj wsion,” but everybody uses it.

Mr. KASTEN MEIER. But the fact of life is that increasingly a 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 for 4 now when they show Bambi.

Mr. DRINAN. One more question. I wonder, sir, if you have statut m language, what would you substitute for 2223, the relevant se forst If you would have that prepared, I think that would give me, at 6, a better idea.

Mr. COOPER. I can submit that to you.

Mr. DRINAN. Thank you.

Mr. COOPER. Thank you,sir.

Mr. KASTENMEIFR. Mr. Cooper, I want to compliment you on yo 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 Cooper Exem tive Director of CATV.

CATA, the Community Antenna Television Association is a trude asso organized in 1973 that today has as members some 100 CATV-ny stern } * the United States. Originally organized to focus on proposed copyr gt bes CATA has broadened its membership and scope of activities to me vide matters as participating in FCC proceedings. Generally stated CATA× p2 phy recognizes that the roots of CATV lie within the community name, a name abandoned in the 1960s by our immediate predecessors iti festi We are not here to pull punches or present diplomatic truth» truths. Nor will we play a lengths numbers game Bè a numbers gave Dre statistics on who does or does not support this bill However, yon sho 11 at that some 25 state and regional associations have voted against the position And you can count on the fingers of one hand the state and reg associations still supporting the NCTA position Firthermore the Portavle State Association and the NCTA's largest single member con.piny, Te'eP»• (D have requested and received time on their own to present views COLTZAT NCTA. TelePrompTer and the Pennsylvania systems serve over two n homes. These statisties reveal only conclusions, not reasons

the only reason CATV copyright presently has any support is rat bes Copyright-supporting splinter of the industry believes that CATV st but because it is politically expedient to do so and because of something my the consensus agreement The NCTA NAB, and MPAA can try to explain ta agreement to you. For our part, we will concentrate on tre merits of the exp¥rg“? issue

CATA is here today because its men,bership does not believe that the m *** picture industry is entitled to place its hands in the pockets of CATV (4×73* ** or CATV subscribers. We reject the joint copyright position of NCTA NAB MPAA that CATV owes reasonable copyright

The imposition of copyrig? ↑ on CATV is in part a tax or the viewag pl It is also a deception to an American telev sin view ng pole which daw feet told time and time agun of the benevolence of brondeister delivered free to e Vision" As we all know, it is not a free system It is an advertiser « p»***↑ system which means we all pay once for the programs we watch by pay 5ẩ higher prices for televisione advertised products. Also approximately tent households must pay a second time to act ja ly receive television wigt n's se cient pletures by subscribing to CATV And now through copyright legislati to "? will be asked to pay yet a third fine Remember CATV probably wou'd never have come into existence if the FCC had fast diously followed the Congress, Da mandate of Section One of the Communications Act "to make avaliabe * fat

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