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It is obligated to serve and lor which the copynght owner has been paid, has no bearing on whether CATV should pay copyright CATV services keeps the copynght owner honest by delivering the signal carrying his program to the public for which he has been paid in February 1965, in my remarks before the Inter national Radio and Television Society, I stated

"At the present time, a sponsor who buys a program usually pays the
copyright owner for one performance over one or more stations. The spon.
sor pays the copyright owner, directly or indirectly, for tickets to the show
for everyone within the Grade B contour of the stations televising it and as
far beyond that contour as it can be received This cost is passed on to the
public eventually in the purchase price of the product.
"It is a scientific fact, recognized in the Sixth Report and Order, however, that
over average terrain only 90% of the locations in the Gade A contour receive
an adequate signal 50% of the time, and within the grade B contour only
70% of the locations receive an adequate signal 50% of the time I will
venture that most sponsors paying for a program think they are getting a
potential of 100 % of the locations 100% of the time, but that just isn't so,
even though the copyright owner is probably collecting for 100m of the
locations 100% of the time.

*A community antenna television system within the Grade 8 contour merely aids the sponsor in getting his moneys worth from the copyright owner and the station by assuring the sponsor that anyone who desires the Signal will receive it clearly, and thus increase the potential audience Cer. tain copyright owners are not satisfied with this They collect from the sponsor who recovers his cost from the public and they would like to collect again from the CATV operator who must also pass his cost on to the public Some way or other it does not seem right to me for the public to have to pay

for two tickets to the same performance No one has attempted, to my knowledge, since that time to refute this argument

There is an additional factor relating to the question of "profits" Although early figures breaking down program expenses for television were not published, it is significant that the television industry, as a whole, was reported in 1952, by the FCC, to have had revenues of $323.266 000 and expenses of $267 902.000. In 1973 the Commission reported that 604 VHF and UHF Stations expended 218.266 000 for him and $64 749.000 for royalty and license fees for a Gla! of $783.015.000. The three networks AXperded $6.4.430.000 in amortization expense on programs obtained from others $3.128.000 for records and transcriptions $7.248 000 for music license fees and $75,467.000 for other performances or program nonts 11 is difficult, if not impossible to estimate the actual copyright lees received because of the infarmixture of other program costs with copyright. It is obvious, however that because of television the 28 companies that control almost 100% of copyrighted fare on television have made huge profits (of which 85we are told comes from the top 50 markets) from that exposure and have been paid handsomaly by the public through the broadcaster for programs dedicated to serve that same public Why should the copyright owner, these 28 companies Mr Krim spoke of in 1965 and a tew others that may

n off" duplicate copyrignt fees from the public under the quise that CATV makes a "profit and these companies are entitle

Those facis should demonstrate conclusively that the copyright owner giants (1) by virtue of their access to the air. (2) with no charges by the Government to transport their product to the public (3) com. Dared to CATV companies which pay up to $10.000 a mile tor their channels of communication to subscribers should certainly be required to forego double tees from a reception service for the public The small number of copyright owners who dominate this area should certainly be required to give some. thing back to the public in return tor using the public domain for what are obviously huge profits. Cable television of its advertisers will pay for any programs it siphons from broadcast television, whereas the public would receive nothing for the cash the broadcasters would have the copyright owner siphon trom the public via CATV

There is a basic conflict between communications policy and any copyright law in which a cable antenna system is required to pay copyright on any signal it is authorized to receive and distribute on its System by the Federal Communications Commission

The Court has construed the Communications Act to empower the Commission to regulate CATV In exercising this power, the Commission requires, as a condition or receiving and carriage of television broadcast signals, that CATV Systems must carry all local sig according to the size market where the system is located Nevertheless, the Commission exercises its power to require carriage of certain signals and permits the carriage of others Such regulations now constitute CATV a supplemental service to make the Commission's allocations of frequencies more ellective. Until set aside, revised or revoked, CATV systems must comply with those camage rules

The proposed legislation would compel CATV to pay copyright owners for distributing signals carrying their copyrighted works. The broadcaster has the right to pick and choose the copyrighted wO'KS he will buy and broadcast. Congress should set the record straight. If the Commission is confirmed in power to require carriage of particular signals by CATV, than CATV is a supplemental reception service performs nothing, and owes nothing. If it is desired to require copyright payment by CATV for its supplemental role, then CATV should be entitled to carry whatever programs it desires. delete the ad vertising and substitute its own. The broadcaster should not be permitted to have it both ways - coilect additional revenue from sponsors for the added carriage of CATV and require CATV to pay copyright fees

rguing for the morality of unjust enrichment to copyright owners at the expense of the public CATV serves as a means of using copyright to restrict the growth of CATV. It is the public who will unjustly enrich the broadcaster and/or the copyright owner - not the CATV operators These anti-consumer provisions should not be enacted into law.

IV - CONCLUSION Based on the foregoing review of the background and the provisions of this legislation, it must be concluded that the provisions of S. 1361 concerning CATV are philosophically unsound. An across the board payment, including payment by the public for two tickets to the same performance or for distan signals as limited by the Commission's rules, is, in my opinion, soaking the consumer and will add to an already inflationary economy. I believe that you are justified and should revert to the industry's historca. position and make every effort to seek an amendment to this bill, substantially as recommended in 1965 (supra n. 1), to eliminate any liability under Section 106 or other provisions of S. 1361.

The Subcommittee on Communications of the Senate Commerce Committee, in its Report No 93-1035 on S. 1361, proposed certain amendments to the bill, In conclusion, the subcommittee stated on page 71;

"Despite proposing amendments to the Judiciary Committee's amendment in the nature of a substitute for S. 1361, you Committee emphasizes it is reporting the bill out without recommendation.

"Clearly, some of its subject matter substantially affects the broadcast. ing and cable industries, and is regulatory in nature

"Should it be enacted it will have a significant impact on our nationwide communications system, without the relevant issues having been analyzed in the forum designated the Senate for that purpose, i.e. your Committee on Commerce."

I have not undertaken to separate the regulatory parts of the bill from those properly in a copyright bill. At a later time, this type analysis should be made in order to further demonstrate the inappropriate. ness of the provisions of S. 1361 relating to cable television.

bill. at a later time, this type analysissa

Frederick W. Ford

Ad Hoc (OMMITTEE
OF (OSCERXED CABLE TELEVISION OPERATORS

FOR A FAIR ('OPYRIGHT LAW,

Painted Post, N.Y., June 10, 1975. Re H.R. 2923_Omnibus Copyright Revision Legislation ('able Television. Hon. ROBERT W. KASTENMELER, (hairman, Subcommittee on ('ourts, ('iril Liberties, and the Administration of

Juxtire, Judiciary Committee, House of Representatives, Washington, D.('. DEAR CONGRESSMAN KASTES METER : The Ad Hoc Committee of concerned Cable Television Operators For a Fair ('opyright Law is enclosing herewith for insertion in the records on the current Hearings on the above-referenced legislation the following:

1. Listing of State and Regional cable television associations that have adopted resolution against the payment of copyright fees by cable television systems.

2. Copies of resolutions passed by 53 municipalities in the l’nited States against the payment of copyright fees by CATV systems and indirectly the l'nited States public that happens to view their television on CATV systems,

It is pertinent to note that no municipalities in the United States have voted in favor of having CATV systems pay copyright. It would obviously not be logical for thein to do so because the cost of the copyright fees will be passed on to the subscribing U.S. consumers. Obviously they know it would not be popular or even intelligent to adopt such a position. This special interest legislation would in effect require the American consumer to par special copyright fees for viewing programming that has advertisements attached to it. Such **pork barrel" legislation is clearly not in the public interest.

You will note that to date 23 states have officially adopted resolutions against the payment of copyright fees by CATV systems, CATV operators are essentinlly providing an "antenna service". As such, CATV operators do not understand this entire issue of copyright. However, as (ATV operators become more and more aware that they will have to pay copyright fees in the immerlinte future if this disastrous legislation goes through, they are putting pressure on individual state associations to officially adopt positions against the payment of copyright.

The only people that are for the payment of copyright are the large multiple system owned CATV operators that control the National Cable Television Association. These operators feel that the Federal ('ominunications ('ommission will continue to enact disastrous legislation in our industry if this copyright issue is not settled. We agree that it should be settled. But we also feel that to agree to pay copy right which we feel is fundamentally immoral and anti-consumer is not the appropriate course of action.

We hope that your ('ommittee will consider in its deliberations on the proposed copyright legislation the strong feeling of the municipalities that voted against this legislation. Please also consider the feelings of all the state associations representing approximately 1.g of all the states in America that have taken the trouble to adopt resolutions against this legislation as it relates to cable television, Very truly yours,

LAWRENCE FLIXX, JR., Jember.

LISTING OF STATE AND REGIONAL CATV AssOCIATIONS THAT HAVE ADOPTED A

"YO PAY" POSITIOX OX ('OPYRIGHT AS OF JUNE 6, 1970

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12. Texas*
13. Virginia *
14. West Virginia

STATES REPRESENTED THROUGH REGIONAL CATV ASSOCIATIONS

STATES REPRESENTED AND NAME OF REGIONAL ASSOCIATIONS 15. Illinois, Illinois Indiana CATV Assn. 16. Indiana. 17. Maryland, Maryland-Delaware CATV Assn. 18. Delaware. 19. Kansas, Mid-America CATV Assn. 20. Missouri.

Oklahoma (counted above. Passed separate resolution). 21, Nebraska. 22. Colorado, Rocky Mountain CATV Assn. 23. Wyoming*

STATE ASSOCIATIONS THAT HAVE VOTED TO ADOPT THE NCTA POSITION

ON COPYRIGHT 1. California. 2. Florida.

Copy of resolution passed is submitted herewith. The other resolutions have been recently reported by telephone or in the press and copies of the related resolutions passed will be obtained and copies will be submitted to Congress.

1 Would pay copyright on distant signals only beyond basic complement of 7 TV signals. (3 nets, 1 ETV, & 3 Independents).

AD HOC COMMITTEE
OF CONCERNED CABLE TELEVISION OPERATORS
FOR A FAIR COPYRIGHT LAW

BOX 389
PAINTED POST NEW YORK 14870

TELEPHONE 607 962 3890

July 3, 1975

Hon. Robert W. Kastenmeier
Chairman, Subcommittee on Courts, Civil
Liberties, and the Administration of
Justice
Room 2232
Rayburn office Building
Washington, D.C. 20515

Re:

H.R. 2223 - Omnibus Copyright Revision Legislation -
Cable Television

Dear Congressman Kastenmeier:

In reference to our letter to you dated June 10, 1975, enclosed herewith is a resolution passed by the City of Bellaire, Ohio requesting Congress to remove any provision requiring the payment of copyright fees by cable television systems from the above referenced legislation.

Please include the enclosed document in our previous filing for insertion in the records for the current deliberations on this proposed legislation. Thank you for your help in this matter.

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CC: Members of the House Subcomittee on Courts,

Civil Liberties and the Administration of Justice

57-79

0). 76. pl. 1 - 43

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