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IV. THE ISSUE

1"zad somessfully, to my knowledge, to refute this argument. They 7.00'indisi alt something else, > vadowbers by virtue of their access to the air, with no charges

or: to transport their product to the public compared to CATV com : ;*; -$10(x) a mile for their channels of communication to subs

y be required to forgo a second fee from a reception ser

The Ad Hoc Committee does not view the matter of coprright parrages 2* *: issue between it and the Office of Copyrights, the copyright of litt !". Hip AMST, or NCTA, because none of them will pay copyright--only the for mately pays copyright on television programs. The issue here is !! copyright owners and the subscribing members of the public to Cou!111 tennas. That issue is as follows: "Should the Congress, contrary to be pe mine and logic of the t'nited States Supreme Court, on two orasu' traie » legislative fiction that CATV is engaged in the display or juerformance of an righted work publicly and is, therefore, liable for the payment of experties from which, of course, it would have to collect from the public as a part of 1** *222 service?"

The proposed legislation would create this legislatire firtion hy defining the right to display or “perform the copyrighted work publicly," The dri:.'. I "perform," "display,” “publicly" and "transmit" in Section 101 of fix ko intend, according to the Committee Report, to mean that "A cable triptor system is performing when it retransmits the broadcast to its soha 11!" T. right of public performance in the copyright owner is not limited by any profit" requirement. Section 111 of the Bill proposes limited every stro liability of CATV and establishes communications polics—the progret tuo.& of the Commerce Committee.

150-zlarly true here when a handful of companies seek this dou

American Sample across the country for what Congressions Ww. ai l. ml.. now dictate is in the public domain."

apie tplasat or its advertisers will pay for any copyrighted prog prag'rnberras the public would receive nothing for the cash the broa

app ile ripopright owner siphon from the public ria CATV which o * Tward Pup on pyright fees for more diverse programming.

la conflict between communications policy and any copyr La rate antenna systein is required to pay copyright on any sig to oppurite and distribute on its system by the Federal Con

V. THE PUBLIC SHOULD NOT BE REQUIRED TO PAY A SECOND COPYRIGHT TIT ME 111

SAME PROGRAM BECAUSE OF THE TYPE ANTESSA IT IS

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no me comit has construed the Communications Act to emp

werplate CATV. In exercising this power, the Commission But you repiving and carriage of television broadcast signals, th piroty ali bwal signals. The definition of local signal varies accord

s'iptabeff the system is located. Neverthelss, the Commission exe
* * Titise marriage of certain signals and permits the carriage
3,0 nt: * Drum conititute (ATV a supplemental service to
***** atins of frequencies more effective. Until set aside,

ATV syatem most comply with those carriage rules.
E-poin sed legislation would compel CATV to pay copyright ou
***** **als carrying their copyrighted works. The broadcaste
*'in Å and choose the copyrighted works he will buy and
****! ' legate photo record straight. If the Commission is confirme

** app to severe carriage of particular signals by CATV, th

a puntal reception service, perform nothing, and ow i sampel 'n still be copyright payment by CATV for its supplem

IV. entitled to carry whatever programs it desires, '*14titute its own. This is strictly a communicatio

There ar astos should not be permitted to have it both way *1. se. op from pinkors for the added carriage of CATV a

aprill fees. In short, the broadcaster is arguing for th 1930* FREE B to (typyright owners at the expense of the pul "Bom Is Of 11xing copyright to restrict the growth of CATV

*'L's enrich the broadcaster and for the copyright lit porabit. Thiene anti-consumer provisions should not be el

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The Office of Copyright makes its case for CATV copyright liabili's fact that CATV charges its subscribers a fee for its antenna settima * make a profit and failure to share these profits could damage the cojini! Too Supreme Court disagreed with these assumptions and found otherus in Prompter Corp. v. ('RN, supra n.2. If the Ottice of copyrights theory of 1.2 is correct, which it is not, then anyone who make a profit, diretly or in me from a performance of a copyrighted work should be liable. This 11211.'T run to wire and receiver manufacturers and countless other busine* et irri which enable the public to view the performance

The fact that CATV makes a profit, by a sinting the TV station to de: ** programs to the public it is obligated to serve and for which the experie: **** has been paid, has no bearing on whether the public should pas apie 60 • free via CATV. CATV services keeps the copyright owner honest boy deliver. 94 signal carrying his program to the publie for which he has been paard!

At the present time, a sponsor who buys a program isually as the mother owner for one performance over one or more stations. The sinsorpuss the end right owner, directly or indirectly, for tickets to the show for elever.** the grade B contour of the stations telerining it and as far lesend that estar it can be recrived. This cunt in paused on to the public event unily in the ju, m3 price of the product.

It is a scientitic fact, recognized in the sixth Report and Orler "" borrier!"a' over average terrain only me of the lowntions in the Grade A contrar pow:1789 andernate manal 30 of the time, and within the Grade B eunteur .ls the jointsonm revive an adequate rigtal 50% of the time I will seek itp " Itavt sponsor- paying for a program think they are getting a potential of juan out the locations 100% of the time hut that thist Ian't wo einthetish the 99.6" enner is probably qolleeting for 10 of the locatioun 100; of the title

A contunity antena televisiota jstem within the Grade Retour team!! and the wineer in getting his modern worth from the sun right owns and "f* **I jon by ***uring the sponsor that anyone who de irre the 1 sil: 118 If therls and thus increase the palestial audiene (stain eu?! 08:09" Dort sa tantied with this They coilent from the statisrup who were his pow?" the public and they would like to collect again from the CATI operatur wb **

les fonds him monet on to the publie Nome way or other it is not sreen nie!!! the probade to have to pay for ***o tlehrts to the situe perfurad Ee“ Nur Bp Das

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Then the pages wit to compromise the fundamental legal

y the l'uted States Supreme Court on two occasions

the gee of the river. The brondeaster--whatever his mot !!.. to saddle its viewers with extra copyright paymen **** IT'lust line of a more efficient rented antenna.

non rico fpps on the community antenna function and &"** A: ***All public pay tribute twice to the 28 corporatio all dawn butantially all of the copyrighted m #gent, trup T\' is wrong. If the copyright owners or mer

*@n! p on the short term profit of double payment a ... to ti riski. they will be amply rewarded with ev Botstralians fruirements of cable television for mate

Till cannels in the years to come. The Commissi

Naff ixna!imported by microwave has been festis lietujem to protect the copyright owner and the pub

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1.1.3 bentlope Act of 1934, as amended, prohibits i

comunications except this section sh Sinop utilizing the contents of any rad vetrarstultted by amateurs or others for use of

21 bron 1341. P 6A

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W. x'rse that this subcommittee is justified and should adop

antenna industry's historical position by amending ...bute any copyright liability for the community ant

"ber xertion lit or other provisions of H.R. 2223, bu
5. tie orgination function of cable television system

be liable like anyone else.
i 10u.
: King MHER. Thank you, Mr. Ford. The Chair yields t

from New York. Mr. Pattison.
pies. I have no questions. It seems to me that this
"walls--there are no substantial disagreements between
milli paosition that was stated just a few minutes ago
HiFu W., I haven't heard all of the statement, I haven'

ofthrali-wer. I would not agree with. I think, fundamen
is: 12 a very decided distinction between the performe

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decisions that are on the side of the viewer. The broadcaster, wiatre! his motives are, is wrong in trying to saddle its viewers withering copyright payments to view its "free" programs through u of a b ? efficient rented antenna.

Imposing copyright fees on the community antenna funt:ona d. in ettect, making the American publie pay tribute twice told corporations in New York and Hollywood that own sulatantissi of the copyrighted material on TV, to watch "free T*" is wrond If the copyright owners or merchandisers exercise forbearune fi the short-term protit of double payment and permit cable television to flourish, they will be amply rewarded with even greater protita from the insatiable requirements of cable television for material to til ils many origination channels in the years to come.

The Commission's power to limit the number of distant signal ported by microwave has been contirmed. No further power is Djerbed to protect the copyright owner and the public interest.

Now that the "unfar competition" shibboleth has been dimited, the only bases for contending that CATV should pay copyright an

One: That it makes a profit from the use of copyrighted mater:3!
Two: That it really does engage in public performance for profit

Neither one of these positions are sound. There is no prilepile of copyright law which assesses liability for copyright baril on fire.it alone and certainly none exists in the pending bill.

As to the display or performance of copyrighted work publiels ir community antennas, the complete answer is that a reception antes does not perform. The cable operator does not convert the ele truita signal into pictures and sound-the merely delivers a gal to the sutreriber who furnishes his own equipment to convert the *:*',s! to pictures and sound in order to recene and view the performit! Y. The CATV operator does not use or sell any program or the fu fort. anre thereof either publicly or privately. I CATV operator ! 3 receiving antenna service, just as a manufacturer solls & P**!!! antenna from which he make a profit. But, community anternas jer not perform anything

Despite the FCC's push for copyright liability, the copyrigit low is not the place to bypass the commerre committees and en band regulatory flexibility in concrete. The senate ('ommerce Commuter in its report on S. 1361 stated that "it believes that in view of the potential impact of certain provisions in S. 1341 on our nations de communication service, ample opportunity should have been atome it to consider thomp provisions in-depth and to have held hearum in the communications legal."

(ertainly, CAT lould be eliminated from this bill, if for no other reason than to permit the commerin ('ommittee to develop a national communications policy on euble television before any response right policy on the community antenna function is undertaken.

Basel on the foregoing review of the beachground and the prolone of the legislation, it must be concluded that the provision of HR Broneering CAIU are plulosopralls ninotini. An acromito ward payment, includ ng meathis the puble for two tlehrta to the me pwrformant or for lintant svonul in limited by the comm'. mon's rules. In an our opinion, washing the funer.

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M. Putin. I have no further questions.

W KTENMHTER. The gentleman from California, Mr. Wi:
Ms Mr. Ford. I am going to make an argument to
1. & FX1*nt you to agree, but I would like you to give me
nu a foliagreeing.
l's it an be stated fairly and accurately that there is

Di lutween payment of copyright and the market
you and the copurighted work. For example, the sale by a
r's divdual producer for the performance of a pla

in ng it that all other producers may reproduce that pi
"Bila further payment.

petit production of a movie for showing at resid
some point of carry with it the implication that it can be repro

• ili w.toolt the latment of an additional copyright
T... I think, is that the owner of a copyright bargained

ir patarkime, and that he did not bargain for more than
Tr.!!!.. In the validity to this argument, could it not b

ener of a convright, selling convrighted work, the on
"p,bargain for a market, and he did not bargain f
ist by cable television, and that accordingly, he

wcompensation by reason of that expanded n
W *. l, my response is that he does in fact barra
03.178 it for every person who has a receiver within the

--001 utation. So, he makes his bargain, he gets hi

- tis elit, and he delicates it to the public within the
line figures his price, he knows substantially how
2... He knows precisely what he is selling, and wh

pomeranto.

MWI. I am assuming something that you ma

1'*iale opens up a new market that is not avail Vislatie alsertier receives the benefit of that. A

mr. a-thie Supreme Court pointed out, will incre mtr lum for the reception of that program by

that area. That was the logie on which the si "the tant signal to be brought in been

win.

We believe that this subcommittee is justified and should adopt the community antema industry's historical position by amending this bill to eliminate any copyright liability for the community antenna function, under section 106 or other provisions of HI.R. 20-23, but not, of course, the origination function of cable television systems for which it should be liable like anyone else.

Thank you.

Mr. KASTEN METER. Thank you, Mr. Ford. The Chair yields to the gentleman from New York, Mr. Pattison.

Mr. Pattison. I have no questions. It seems to me that this statement is basically-there are no substantial disagreements between your position and the position that was stated just a few minutes ago.

Mr. Forn. Well, I haven't heard all of the statement, I haven't seen it. Some of the answers I would not agree with. I think, fundanentally, I am making a very decided distinction between the performer and the viewer.

Mr. PATTISON. I have no further questions.
Mr. KASTEN METER. The gentleman from California, Mr. Wiggins.

Mr. Wiggins. Mr. Ford, I am going to make an argument to which I do not expect you to agree, but I would like you to give me your rea-ons for disagreeing.

I think it can be stated fairly and accurately that there is some relationship between payment of copyright and the market to be served by the copyrighted work. For example, the sale by a playwright to an individual producer for the performance of a play does not carry with it that all other producers may reproduce that play for protit without a further payment.

Similarly, the production of a movie for showing at residential theaters does not carry with it the implication that it can be reproduced on television withont the payment of an additional copyright fee.

The reason, I think, is that the owner of a copyright bargained for a particular market, and that he did not bargain for more than that. Now, if there is some validity to this argument, could it not be said that the owner of a convright, selling copyrighted work, the original transmitter, bargains for a market, and he did not bargain for the expanded market by cable television, and that accordingly, he should get some additional compensation by reason of that expanded market,

Mr. For. Well, my response is that he does in fact barwain and receives payment for every person who has a receiver within the reach of that television station. So, he makes his bargain, he gets his cash. He intends to sell it, and he dedicates it to the public within the bounds of that station.

And when he figures his price, he knows substantially how many people are there. Ile knows precisely what he is selling, and who he is delicating this program to.

Mr. WIGGINS. Well, I am assuming something that you may challengre, that the cable opens up a new market that is not available to normal transmission.

Mr. FORD. But the advertiser receives the benefit of that. And the copyright owner, as the Supreme Court pointed out, will increase his fee to compensate him for the reception of that program by all the people within that area. That was the logje on which the Supreme ('ourt permitted the distant signal to be brought in because it said it

did not-the Supreme Court in its logic said it did not affect the ability of the copyright owner to extract compensation for his product.

Mr. Wiggins. In summary, then, your answer to my argument is that it is the same market.

Mr. Ford. The same market. It has been paid for by the man watching that program simultaneously with its broadcast.

Now, when you get into delayed broadcasts, when you get into some of the other things, then you are getting into the question of origination, the producer; you have the other producer, the books and all those other things which are different.

But what I am talking about is a simultaneous reception, and there is no basis under the Sun for the copyright owner to get paid a second time.

Mr. Wiggins. In that event, would you differentiate between local and distant signals?

Mr. Ford. No, I would not. I would have up until the Supreme Court decision; and the logic for this can be found in the CBS case. I think, when you look at it, the Commission limits the number of distant signals that can be brought in.

If you look at the cited statistics in my statement--which I did not read-the income of the copyright owners and we are talking about. really, only 28 companies. If we look at their income from copyrights, as near as we can determine from the figures which have been published, they have made a very substantial increase in their income as a result of television.

Now, as a result, if a few distant signals are brought in, they should give something back for this tremendous increase in profits they have made in the last 10 years.

Mr. WIGGINS. To whom?

Mr. Ford. To the public by not charging the public. For instance, about 85 percent of the public is in the first 100 markets. And these distant signals that are brought in are most beneficial to those other markets beyond the first 100 markets.

Mr. Wiggins. Just to get a direct answer, you would not support the concept of a copyright payment for the importation of distant signals for simultaneous transmission on local television?

Mr. Ford. No, based on the Supreme Court decisions.
Mr. KASTENMEIER. The gentleman from Massachusetts, Mr. Drinan.

Mr. Drinan. Thank you very much, Mr. Chairman. Mr. Ford, the statute that you refer to on page 5 does not, as I read it, state categorically that the transmission has to be simultaneous; perhaps it is there. This would allow for delaved broadcast.

Mr. FORD. It is not intended.
Mr. DRINAN. Not intended. But you intend it.

Mr. Ford. “The further transmitting to the public, by means of broadcast receiving equipment of whatever design, ineluding antennas, and related equipment, wherever located, which receives and makes available by means of cable, or wires and related equipment to individual reception sets,” there is nothing in here that would permit anything other than simultaneous reception.

Mr. DRINAN. It does not preclude it, though.
Mr. FORD. Probably.
Mr. DRINAN. You should tighten that up.

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