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in its restraint of CATV to assure that there is no possibilit

tion potential of cable for their copyright product--which will be maT TECH of any amount which could possibly be secured from the present industry as basis.

Finally and most important, cable television viewers comprising 10 METER subscriber homes with over 30,000,000 viewers-have never been informed proposal for copyright payment for their television reception service, we ar ment will not be required for the same reception by their pert door de using a conventional rooftop antenna. In this day of consumer concern and se cial awareness for due process, the lack of fairness and reasonable treatment for cable subscribers for television reception both of the air and for har oplem vision service is most evident, is not supportable, and certainly sboud : countenanced by this Committee whose very title stands as a beacon ingat ! the citizens of our nation for proper protection of their basic rights.

PENNSYLVANIA

CABLE

TELEVISION ASSOCIATION

ON COPYRIGHT

POLICY Position Pie

og
Hie r any change in the status quo.

erdiation was manifested most clearly in the FCC's action with
Parts Agreement of November, 1971, which was notable not o

*ill enacted the requirement of copyright payment as the co Ermannon of its rules, but also because of the scant quantum o free case for this exaction. The nature and extent of the FCC'S 2m 48s pretioas constitute a clear declaration of the FCC determ misst dere,fiment in CATV technology can occur only on the conditi mat ! Ar in the esisting television broadcasting order.

i T* Ifruided negotiation efforts by representatives of Nationa
* Axwciation with representatives of the copyright owners hay
** '24't be waition and attitude of the copyright owners do not al
ville blitt bargaining process, the demands of the copyright owne
saj et blant and unrealistic, and without regard for the conse

!:** Unary of the suhscribing public.
il: Wro to the restraints placed by the FCC rules on CATV te
pas pour Iveys, and in turn on cats system development and growth,
ko urriand to local franchising, taken with the related actions
do 14 governments, bare resulted in a multi-structured re

AT S A is duplicative, inconsistent, costly and most burdenso
i ! bright promise of the potential and capacity of cable t

5 pwrial difficulties have been encountered in system
'ack jaca in large and metropolitan city areas, and the feasib
fropa2 CATV urrice in such areas are yet to be established.
il v with the earlier expressed opposition of the Unite

***Justjep to the extension of copyright liability of CATV b

In October, 1968, the Board of Directors of Pennsylvania ('able Teleride Association, after careful study and consideration, formulated a powling & copyright which was approved by the overwhelming vote of the members of ! Association at a special meeting held in April, 1909, together with harágned explanation.

The background explanation for the position called attention to the die. difference, both in fundamental concept and practical objectiipa, loween traditional community antenna television system which operate ly or may to provide television reception service in fringe areas, and the much promotrd but still largely undeveloped-cable communications isstem which is erpreted to provide broad television and communication sprrices, particularly in politan areas, including distribution of copyrighted programs purchased for showing through the wired system,

The background explanation also particularly poted:

The t'nited States Supreme Court decision in Fortnightly Corporate I'mited Artista ('orporation, decided in June, 196, in which service provided by the traditional CATV system was held to be on the spiewer's side of the nor and therefore, not suhject to copyright liability :

The action of the Federal ('ommunications ('ommission in its Proped CATV Rules and Inquiry, inved in December, 1W, which among other things to effect, foreclosed the industry on the copyright question so far as new year derelopment is concerned and the expansion of system reception service in many areas;

The general precept that the community antenna television reception functie of providing of the air reception for television signals whould not be colond 12 its copyright and FCC regulatory treatment by the future potentials and pro bilities for CATV, or traded as an expedient to acelerate or to promote ! Lor Tv lution of product and marketing problems which may be involsed in the devel opment of some of these capabilities.

Based on these considerations, the central concept and principle of the "Pro sylvania Position" on copy right was set forth as follows:

To the extent that a wired system f any kind anywhere in torent: he television reception function of an antenna as the traditional C'ATi strm the reception should not be subject to restrictions or to coprright liability any than reception by a conventional antenna and, arurdirkiy, that there shed te no copyright payment for television reception provided of signals meird the air.

(orrelating principle were also set forth regarding the availablity of "heden television reception service to all and regarding the desirability of pipar the possible basis upon which microwaving of signals might provide increased programming.

in the intervening period since the adoption of this m ition the following Niguificant derelopments and ocrurrinces must be taken into aavunt as bearing upon the copyright issue:

(1) The Federal (ommunications Commision has demonstrated morladrely chat with its rigid conditioning to the broadcastint environment of warrittcreated by the inherent limitatione in frency allocation. Its primary mitment is to the printing broadcasting market order of things with the amo anrink characteristics of market monopoly and lack of program diversity trons in the Fe( commitment and concern in this rest that it has been

***.. at puttive consequences and because the extension is So!!aropriate considerations for copyright protection, the De ti

m ber, 1970, filing before the FCC concluded that
4 refra''Lijon of broadcast signals is not unfair compet
'> $***pred application of this concept in the circumstance
ba

l ssties presented.
kislin Sains Supreme Court in Teleprompter Corporation
te

ng yelem, Inc., decided in March, 1974, extended the
- C oding that: “By importing signals that could not no

** T*1' technology in the community it serves, a CATV St
*****pirms, alter the function it performs for its si

is broadcaster transmits a program, it has made public 1°**

and baring the contents of that program. The privi

n ast Plantronic signals and of converting them into
B"' t List priigram inheres in all members of the public who
banguna

. Toe reception and rechanneling of these signals for
**'

L e las viewer function, irrespective of the di
"..

. a:ion and the ultimate viewer."
401 ** **ip of these developments and occurrences, the
yms . ad principle of the Pennsylvania position on cor

Fire betiere, the application of this concept and prin
*

mented in view of the broad and long-term in 15 min 11.4-In, both in terms of the consequences to b. **** * ntar to the developithent of cable communication

telp? ingin pere ption function of CATV, an orerriding 3 years or mast be that basic television reception O

r a!.4 ont subject to the burdens and risks involved in P arent

***** fim *pring reinforcement to the principle that teler *

is off the air should not be subject to copyrigh

CATI means used to receive them. On the other
* 18 lii trated technology can provide the means for equ
* *****. tuty for all viewers, thereby correcting &

" mib asting technology, service for at least basic o
are **** buld not be subject to copyright payment, b

***"1 * *ured
1.*******Em mimpition is being provided by CATV of signals

!! ! basic television reception, there is no proper bas

bere can be any complaint or objection by any bro

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surnantious in its restraint of (ATV to assure that there is no possibility that Al will effect any change in the status quo.

'I hatt predilection was manifested most clearly in the F*** action with regard to the cotisati Un Arredament of November, 1971, which was notable not only be all the ti piacted the requireturnt of copyright payment as the condition for any relaxation of its rules, but also been use of the meant qunntum of relief Kiiet in pichange for this pinition. The nature and extent of the fol" signal arria erretration Crostitute a clear deraration of the For determination that au) deiriopent in CATI tehnology (41 eur only on the condition that ther who call in the pist111g tepiston broaden tilig order

12) T1 Item Degotiation efforts by repiruhtatit ** of Valona! (able Tripil 100 Aviation with reprenntaties of the cominht on her hair atat libed that the prition and attitude of the copyright onnen do not allow for the tjetlal busine** berkaitank pro*, the demands of the copyright on nereink

a n'l) exortant and unrei!l, and without regard for the (Ulmyuebiru rifing the ladustry or the sultihin, trille.

13In addition to the refraints pne by the Fry rules on CATV television melon urip, and in turn of cat teita du Plepiti put u ronth, the 1979 R 1. a. relatrd to loval frankist. Ohnen wihtlit' poland actitis of state and or fi unul 20111:sette, hair 1*!itet in a multi **Turtund regularion of ('ITV watch is duplliative, 11.**] ent, confly and it hardenature

14 Wai'e the bright profine of the wifetimal and part of calle television has not din d. mial dith nifi bine twin routtronin sintem construr. tind and operation in large and the populltanity and and the fisibility and Arraure of (AIVwrine in th areas are yet to l* t.bol lol

13. In ker' with the rutier pi *** 1- **** he titrd Niat I hjartment of Justly to the pion of orixtot tiat:1!11) of ('ATI I ts of the farinful I.'}**. title *07*****114 tse*** * *

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TESTIMONY OF WILLIAM J. BRESNAN, PRESIDENT, CABLE

TELEVISION DIVISION OF TELEPROMPTER CORP.

right owner, since such reception is substantially in keeping with the rest marketing order.

Concerning the potential of CATI 8ystems for incrrasing program chr9 part through the microwaving of distant signals, a number of police and pira u situations come into play, and all of these strongly indicate that there at : no copyright payment for such reception. In addition to the reason ita **** this conclusion in the CBS case and in the Justice Department of op te reference has been made, it is generally accepted that the pricht over. use the public resource of the airwaves without cost ) have no right to :!

lm absolute control on the distribution of the copyright property which they: * to distribute by broadcasting.

At the same time, it is also generally accepted that a method can be drop do vody whereby copyright owners can be fully compensated for the actual este and performances of their property, without the necessity of frutrir*!! dening CATV systems or services which may well be tlie means for disk. increasing the distribution possibilities for copyright proports Finally. I!! a public interest in encouraging the investment of the huge capital (ul.!.!.! required for the construction of CATV systems with their greatly inte ! munications capacities, and also in encouraging the utilization of the Nira

Recognizing that such microwaving may require some marketink ad s and to respond by way of compromise to the overall objections of the bredd: 18** and copyright owners, a payment of two-tenths of one per cent pescola!"..!.. monthly service charge gross receipts would apply in exchange for a lon license for such reception.

With regard to both of these aspects of ('ATI", it is essential that the trees tion of the CATI' copyright issue not include a confirmation of the anale1 tent of regulation undertaken by the Federal ('ommunications to think **! cable television or of its present rules governing (ATV. The copyrigtit las m. include no provision regarding the regulation of CATV which must be a se of separate congressional legislative determination.

In summary, the policy position uwlate on copyright is as follows:

I. No copyright fees whonid be payable for teleriston reception of puff Bro' signals provided by a (ATV system to subscribers with such mervice to le sf cally exempt from copyright.

II. No copyright fees whould be payable on rereption provided by a (ATV' $1$ tem to its wubscribers of at least basic or minimum television ryption avl.', of reception of the national networks at this time thrrel, of three lobe, * * television stations and of one educativtial telesno nation, a belser me,':',

ured off the air, by microwave or other means, with such service teler *** cifically erempt from copurisht.

III A compulsory license for reception of microwased signals tot het the required for minimum reception wiride as dormid ablej muuld tw**** for which there should be a payment of twortenths of une pervat per la r * channel of the gros Oripts from monthly Nirure charge onls 'Il. rm! be statutorily fived and payable into a cupright smil, to be distried 'ya" puitable furnula.

IN 'There should be no restriction or interference by the Federal ( ...) tinta (ointi*10 with rikard to any of the alter

I bustas. Tuank you very much.
i ponaj afternoon, I am William J. Bresnan, senior vice presid

Copiles Corp., and president of our Cable Division,

er live the Nation's largest cable television company, . : : riy twice as many cable television subscribers as the 2 wi.pany. 11 is Jay Ricks, a partner in the firm of Hogan & H po es oft - Jacqueline Da Costa, director of Media Informat Anime at Ted Bates & Co., and to her left is Barry P. Simoi

pride president and general counsel. 1. Wpter's position on copyright is straightforward. We DrPronatem should not be required to pay any copyr ! m'atrage of broadcast signals. Tinand this position, it is necessary to understand a b:

!'rinadi ast industry--a fact which makes that industry t ail or distributors of copyrighted materials. The *4* the movie producer or the book publisher, does r ",'r product. What the broadcaster sells is the attentio

om I in purchaser is the advertiser. The more viewers th dupan leiser to the advertiser, the more the advertiser ''Dor the advertiser pays, the more money is availabl *! Bir toparthe copyright owner. Top poti inlon affects this relationship only by enlarging

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p" di&. in to the broadcaster. In many cases this actually

r evenues available to pay the copyright own in it deprive the copyright owner of anything to wh

T

a le s-tem operator is not like a record pirate, as

Yationed in this hearing, rather, he is more like pr. a littwork affiliate, I might add, actually receive of network for expanding the net work market a l e to cite two examples. First, imagine a televisi

*& 18unity part of which is in a valley where Power poor. Imagine also that a cable television system

rose bismiple of the community. The people who live i
tro! I. ini-tall a rooftop antenna to watch the progra
*

in oni station;
in .an bribe to the cable television system and t

." of this antenna tower erected by the cable telev

the interest of the (ATV Auerir, who up to the daie baie had !!* defidently Tip*******11ed in any of the heart and dist] juste titten d w hair neitr had an opportunity to be hearl (ATT quat

? take the restibility of fully infort u berils of the varia* the innue in the purpose of the le-i tatise pro martha niarly if i rili tu ment must be added to the prvine *** paid by the sukker.

Vir. KimT MIR. The ('hair would now like to ru!! Mr. W:"4) Bran who is the president of the cable Telesiston 1:1. of: of T' prompter ('orp.

Mr. Bryan. We apolovize for the dela in rrahing on this 1101'" iner but we are interested in the wulanget.I w on hien porpend

ment will not particular!, lot! 10 MRT por fraseny it

I m.ty can do neither and simply not watch the Ti

Hai, Court has twice recognized, choices 1 and: • intel Since no copyright liability attaches when 0..091 qui fpiria, why should there be any liability TORIN! f of the antenna tower erected by the

TESTIMONY OF WILLIAM J. BRESNAN, PRESIDENT, CABLE

TELEVISION DIVISION OF TELEPROMPTER CORP. Mr. Brimnes. Thank you very much. Good afternoon, I am William J. Brruan, senior vice president of Teleprompier Corp., and president of our Cable Division, Teleprofepter is the Satlon's largent cable television company, having approximately twice as many able television sububen as the second largest company.

On is night is Jav Riiks, a partner in the firm of Hogan & Hartson. On mit leitin Jacqueline La Costa, director of Mechia Information and ANRI is at Ted Baten & Co., and to her left is Barry P. Sunon, Tele propter's sliepressdent and general concl.

Traprompter's pomilon on copyright in miraightforward, We believe rabile trieswonnifellin louid not be required to pay any copinght fre for the carriage of broadsat signals.

To understand then portion, it in their art to understandi algue fact ainut tie bruadeant industry a fait while mahro that industry unique among all otlar dintubutons of (opunited materials. The brondd antet, unlike the mos e producer of the womak pullatier, does not illa optrihteed produit. What time lirondinner will in the attention of the 110PX, The purchased in the side!! !. The fliore Heftir broad (all can deliver to the avertit, the more the misrit T will pav. In this more then oder

in this brote flores Miable for the beter tonnas tilatokhri.

Calle telemon aile the relation only by emulate the aud1film ble tottir broadster. In It) ("***** the hillund DTT834 tlar silvert."11P 1 8 b le to the copyright on . in) + de 12*** ita prise de cop t out of Unlike to What: lo he is

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Another fundamental concern emphasized in the Pennsylvania position is that the copyright bill not effect a confirmation of the present FCC regulatory treatment of the industry. For example, the FCC definition of so-called distant and local signals has little relation to actual reception conditions for signals received off the air; and the application of these artificial and arbitrary definitions results in unreasonable, unfair, and discriminatory treatment for television viewers.

Finally, and most important, cable television viewerscomprising 10 million subscriber homes with over 30 million viewers have never been informed of the proposal for copyright payment for their television reception service, while payment will not be required for the same reception by their next door neighbor using a conventional rooftop antenna. In this day of consumer concern and special awareness for due process, the lack of fairness and reasonable treatment for cable subscribers for television reception—both off the air and for basic television service-is most evident, is not supportable, and certainly should not be countenanced by this committee whose very title stands as a beacon light for the citizens of our Nation for proper protection of their basic rights.

Mr. Chairman and members of this committee, I have been a member of the negotiating committee of the industry; and I was party to the consensus agreement. I should be very glad to answer any questions you have.

Mr. KASTENMEIER. Thank you, Mr. Barco. In that connection, when the agreement was concluded in 1971, you were one of those who were agreeable to the provisions?

Mr. Barco. Absolutely not. There was a very strong division, then, and we were told by the then Chairman of the FCC that this had to be because it was demanded by the White House, otherwise we cannot relax the rule. There had been a freeze on the industry, and the industry was desperate. The manufacturers were going out of business, the industry was at a standstill; and it was only by a two-vote majority that that was carried and accepted by the board of our directors and the officers of the association. There were very, very violent arguments about the whole thing. And, as Mr. Ford has pointed out, the other factors shortly followed, so it was never given any credence by anybody. Mr. KASTENMEIER. Off the record.

[Discussion off the record.] Mr. KASTENMEIER. Mr. Barco, we do have another witness whom we will not be able to hear without returning. So, I will request that we recess and then return during what would otherwise be the lunch hour, and proceed with our last witness.

I propose we will return at 1:45, after we vote, and conclude at 2 o'clock.

Mr. BARCO. Mr. Chairman, before I am dismissed, may I please just make one suggestion? You note that our position provides that when a signal is carried far beyond its normal area of operation Mr. KASTEN MEIER. By microwave.

Mr. Barco. Yes. We believe that under some circumstances a copy. right fee should be paid.

Mr. KASTENMEIER. I was interested in this and hoped to question you about this.

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