home. Do we need a public
performance license?

"A. Yes. You are required to have

a public performance license...."

Of course, no educational program would be complete without emphasizing the penalties both civil and criminal - that awaited the unlicensed performance of videocassettes. The MPLC educational effort has been a complete success. Nursing homes now understand that to show videos in their common rooms, they need a license, for a license is required by law. That a license is required in this context has been confirmed for the Subcommittee in an opinion given by the Register of Copyrights.

If a license is required by law, there are only two solutions. Either change the law so a license is not required. (The Or have the licensors grant a

bills before you do just that.) license to the nursing homes. logic.

That, to me, is a matter of simple

MPLC pursued the second course. The trouble with that course is not its legality. Rather, the law on this subject is bad public policy and should be changed. If the law in its wisdom has granted license-free viewing to you and to me in our living rooms, why are the common rooms of nursing homes different? The common room is their living room. The policy for us ought to be the policy for them. The law makes a distinction it should not make.

When I first introduced this legislation in the last Congress, the Motion Picture Associations of America (MPAA) contacted my office and vigorously defended the status quo, arguing that licenses should be required. Their argument then was that the humanitarian purpose of nursing homes did not justify license-free videos any more than it justified free medicine or free telephones of free heating fuel. My response is that MPAA did not understand and, after eighteen months of study,

still does not understand that the purpose of the legislation is equal treatment under law for our homes and nursing homes. You and I do not enjoy free medicine, free telephone, or free heating oil, but we do enjoy license-free video viewing. So should nursing homes.

Now that Congressman Cardin and I have introduced legislation and been blessed with a good number of co-sponsors and now that several health care organizations have become very interested in the legislation, it is hard to find someone who takes the original MPAA position.

As interest in the legislation intensified, MPAA contacted my office with a new position: The public policy of the legislation was correct but other humanitarian groups might be included. Congress could not be trusted if the legislation got rolling.

On August 6, 1989, MPAA requested my acquiescence in their seeking a non-legislative solution. I conveyed two concerns: first, some avenues to a binding solution might be complicated by antitrust concerns; second, it would be difficult to achieve coverage of all videos, particularly future ones. Moreover, the non-legislative solution, whatever it was to be, had to be the equivalent of legislation. Simply retreating from MPLC's position was not sufficient.

Discussions ensued between the health care groups and some representatives of the industry, namely MPLC, Swank, and MPAA. After considerable study and negotiation, a tentative agreement was reached. It was tentative because it was understood that the industry representatives could not speak for others not present. So that the Subcommittee be fully informed, I ask that a copy of their agreement be made part of the record. (Appendix B.)

The major studios have refused to accept the

positions, by letter, to Congressman Cardin and me. I ask that these letters also be included in the record, together with our reply. (Appendices C & D.)

All of the letters from the studios appear to concur in the policy objectives of the legislation. For some of them, that is the sum and substance of their "non-legislative solution." For these the solution is simply no legislation. Others are somewhat more responsive; they offer each nursing home a license either for free or in return for a charitable contribution in the licensor's

name.

There are roughly twenty thousand nursing homes across the nation. The offer to license these nursing homes individually by licensor and by licensee would administratively require several hundred thousand transactions to make nursing home viewing legal, if all performance rights holders made the offer, which they have not. Many studios prefer to offer merely a promise not to seek licenses from nursing homes. Since this neither changes the law nor grants a license, it does not make nursing home viewing legal which is my objective. And even if for the moment that objective were achieved, please note that such offers may be revoked at any time.

Your attention is drawn to the last sentence of the second last paragraph of MCA's letter of March 28, 1990, which notes that the actions of the studio in making such an offer are "voluntary" rather than binding and that if "additional demands" are made "to impose limitations upon our ability to license..., we may be forced to re-examine our views." It is not clear to me for whom the threat is intended, but that hardly matters. For it makes clear what may happen under the solutions proposed by the industry.

Mr. Chairman, I don't want a solution that can be terminated by the motion picture industry. The solution must be binding. What the industry ought to do, if it does not trust Congress to act on legislation, is to enter into a contractual

arrangement whereby each licensor signing a single document grants a blanket license to all those covered by the legislation.

Congressman Cardin and I have offered that advice to the studios, verbally and in writing, but without success. Why do they decline our advice, which we have offered for months? It is not clear. Some do not appreciate how forcefully an agent of the industry impacted the nursing homes. Some do not appreciate the subtleties of copyright law. Non-enforcement of the licensing requirement does not make nursing home viewing legal. And others have just recently raised antitrust concerns.

However, these antitrust concerns differ somewhat from those considered last August. I thought it might be a problem for all studios to get together and establish a price, even if zero, for licensing nursing homes. But the industry's antitrust concern has now been raised in response to a question

Congressman Cardin and I have raised, namely: Does the industry accept the definition of the covered class (which I have alluded to as nursing homes in my testimony) in the legislation we have introduced?

If the industry believes that it cannot answer that question without subjecting itself to antitrust litigation, then legislative dialogue is impossible. Lest it go unnoticed, Mr. Chairman, I note that today the Subcommittee will hear from two health care groups who can speak for their members while you will hear from two motion picture industry spokesman who, I am told, cannot speak for anyone but themselves.

It is all rather cute, you see. MPAA can say no, as it has. But it is an antitrust violation to say yes. Thus for those of us who want a real solution, it appears that legislation is the only course.

In contemplating this course, the Subcommittee is asked to consider the plight of the program director of a nursing

completely silent, some have basically promised non-enforcement of licensing requirements, and a few have offered to grant individual licenses. Since each studio has subsidiaries and affiliates with different names and may market home vidoes under different names, only someone with a great deal of knowledge of the industry will know whether a given cassette matches up with the silent studios, the non-enforcing studios, or the licensing studios.

After the program director matches the video with a studio, then he must go to his files to find the reproduced letter, if any, from that studio to Congressman Cardin or me. Since each studio has chosen a different definition of the covered class, the program director, perhaps with the advice of a lawyer, must determine whether the facility falls within the studio's unique definition of the covered class.

The lawyer will probably advise the director, if the studio in question has not written at all or has adopted a nonenforcement policy, that the viewing is not legal. If the studio in question has been silent, it could sue. If the studio in question is one with a non-enforcement policy, it probably won't sue. However, the studio has a right to revoke its policy at any time. It never promised to give notice if it did. But it may have. To be safe, the nursing home should contact the studio to make sure its policy is unchanged since there is no legal relationship between the parties.

How many vidoes do you expect to be shown in these

circumstances?

Mr. Chairman, is this a solution? I am told the industry believes that it is. In view of the industry's attitude, only legislation can bring order out of this chaos. Of course, since there is still time left in the session to act on legislation, I am sure the industry would be willing to negotiate a non

legislative solution. But if the industry believes that it cannot legally come to an agreement, why should anyone continue to