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Senator BURDICK. Suppose a magazine buys my rights on a book, and it is serialized in a national magazine that is circulated throughout the country

Mr. ZIMMERMAN. Yes.

Senator BURDICK (continuing). And the magazine pays for those rights. Does that give the right of another magazine to publish it without paying for it?

Mr. ZIMMERMAN. Clearly "No." You are being compensated through the magazine and through its ability to charge the reader, just as the television program creator is being compensated by the television viewer; and all readers who enjoy the book should pay for it. All television viewers already pay for the programs they enjoy.

The proposal here would make the CATV viewers pay twice. They have already paid when they buy the sponsor's product.

Senator BURDICK. Well, the testimony has some contradictions in it and I am sure that your views are appreciated.

Well, the thesis of what you are proceeding on this morning is simply this, as I see it, that you do not think that this committee should do anything about the question of liability and we should leave the problem in the hands of the FCC.

Mr. ZIMMERMAN. Well, I think something should be done. I think that two things probably ought to be done.

I think that we ought to get the copyright question out of this problem and that we ought to get FCC regulation into this problem. I think that what Congress should do should be to make it clear that copyright does not apply and should make it clear that the FCC has the power it needs to handle on a regulatory basis problems raised by the CATV. That is what I think is the preferred solution.

We indicate that if you are committed to the role of using copyright as your means of handling what is to us a regulatory problem, we certainly think you should not do it this way-in terms of a blanket copyright liability—and that at the very least, you should attempt to distinguish among situations and tailor the copyright liability according to the regulatory problems. But we do not think that is a preferred solution.

Senator BURDICK. Well, let us get this straight again. The preferred solution is that we as a committee do nothing about the copyright.

Mr. ZIMMERMAN. No. I think that the preferred solution would be to clarify that there is no copyright liability and, at the same time, to insure that the FCC goes forward and regulates.

Senator BURDICK. Well, all we can deal with in this committee is the copyright question.

Now, do you want us to have copyright liability or not have copyright liability?

Mr. ZIMMERMAN. Very clearly we prefer that you do not have copyright liability.

Senator BURDICK. At any time.

Mr. ZIMMERMAN. That is right. But contingent on that is the notion of strong FCC regulation.

Senator BURDICK. Our problem is copyrights.

Mr. BRENNAN. Just one or two questions, Mr. Chairman.

Is not ASCAP at the present time regulated by a Federal antitrust consent decree?

Mr. ZIMMERMAN. Yes, it is.

Mr. BRENNAN. With respect to their rates?

Mr. ZIMMERMAN. Yes.

Mr. BRENNAN. Is there a need for an exemption from copyright liability with respect to copyright works which already are regulated by the antitrust consent decree?

Mr. ZIMMERMAN. I do not know of any such need.

Mr. BRENNAN. That is all.

Senator BURDICK. Do any of you other gentlemen have anything to offer at this time? I want to thank you very much.

Mr. ZIMMERMAN. Thank you very much.

Senator BURDICK. The next witness will be Richard Jencks.

STATEMENT OF RICHARD W. JENCKS, DEPUTY GENERAL COUNSEL, CBS, INC.

Mr. JENCKS. Mr. Chairman, members of the subcommittee, I am Richard W. Jencks, deputy general counsel of the Columbia Broadcasting System, Inc. I am here at your invitation to discuss with you the current position of CBS with respect to the possibility, suggested in a letter from Subcommittee Counsel Thomas C. Brennan, dated June 16, that your committee may wish to consider in this session copyright legislation limited to CATV systems.

I am pleased to have the opportunity to appear before you today and to submit a statement of the position of CBS with respect to this important matter.

As the committee knows, it has been judicially determined in United Artists Television, Inc. v. Fortnightly Corporation that the unauthorized retransmission of copyrighted material by a CATV system constitutes an infringing performance within the meaning of the present copyright statute. We believe that this case vindicates the basic philosophy of our system of copyright. That philosophy, expressed in article I, section 8, clause 8 of the Constitution, is 'to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries ***"

It seems to us that the encouragement of authorship can be achieved only through the protection of the opportunity to license copyrighted works under the free marketing conditions which have evolved to form the natural economic backbone for the growth of mass communications in the 20th century. I might digress at this point briefly from my prepared statement to note that on a free marketing basis of bargaining between users and copyright proprietors, in the television and radio field, more than 800 television stations and more than 5,700 radio stations are constantly utilizing copyrighted material under licenses obtained under free marketing conditions and without the intervention of any scheme of regulation, finely honed or otherwise, designed to regulate traffic in rights in copyrighted material.

In thus supporting the constitutional objective of the copyright law we believe that this committee may also properly give due weight to the need for maintaining the uniquely American system of free television broadcasting and to the need to provide acceptable television reception for people living within the normal coverage areas of stations but who cannot be reached by the ordinary techniques of overthe-air television transmission.

CBS believes that these objectives can be met by legislation which would grant to CATV systems an exemption from copyright infringement for retransmissions of television broadcasts to subscribers within the normal coverage area of the television station initiating such broadcasts. The rationale for this proposal is that a copyright owner who licenses his work for television broadcast by a particular station can reasonably expect his work to be seen by all persons who live within the normal coverage area of that station. In this fact situation the copyright owner can be fully compensated by the royalties he receives for his licensing of broadcasting rights whether the audience sees the performance of his work on a television set connected to a conventional antenna or on a television set which can receive a CATV system's retransmission. Our endorsement of such a proposal for copyright exemption for CATV retransmissions for subscribers within a station's normal coverage area is subject to the following conditions with which a CATV system ought to be required to comply in order to qualify for the exemption:

(1) In order to be entitled to such an exemption a CATV system should be required to carry, during its hours of operation and subject to applicable FCC regulations, the entire schedule of the station whose broadcasts it retransmits. It seems clear that a special copyright privilege should not be granted to a CATV system which can pick and choose those portions of a station's schedule to be offered to the system's subscribers. The basis for the exemption is to make all programs of such station available to members of the public who otherwise cannot adequately receive them.

(2) In order to be entitled to such an exemption a CATV systems service should be limited to the retransmission of broadcast programing. CBS believes that it is fundamentally sound that CATV systems who desire a special copyright privilege to retransmit the broadcasts of stations should not originate programing which competes with such stations and which, by diverting the broadcast audience, is economically harmful to the copyright proprietor. In addition, it would seem that program origination is historically, as well as logically, contrary to the CATV industry's own view that its function is the supplementary one of providing optimum television reception to poor reception

areas.

(3) The limits of the normal coverage area in which the copyright exemption would apply should be capable of being determined with precision by reference to a map or chart showing such area. Compliance with the civil and criminal penalties of the copyright laws should not rest on technical measurements which are difficult or expensive to ascertain and which can be disputed. Such a precise designation of the normal coverage area will eliminate the uncertainties and disputes which have already arisen in establishing broadcast contours under the present regulations of the Federal Communications Commission relating to CATV.

(4) The exemption should not apply to any CATV system which makes any separate or direct charge for any particular retransmission or which otherwise bases its charges to subscribers in whole or part on program content. Such charges should be limited to a periodic charge-usually now made by CATV systems on a monthly basis-for the retransmission service rendered by the CATV system, together with an appropriate installation charge.

(5) Transmissions which may be retransmitted under the exemption should be limited to those encompassed by the term "broadcasting" as defined in the Communications Act; that is, "communications intended to be received by the public." If not so limited, CATV systems would be permitted to pick up off the air and freely utilize types of signals which are clearly not intended for CATV retransmission such as, for example, signals sent from a communications satellite to an earth station for relay to and transmission by regular commercial television stations.

(6) Exemption from liability for copyright infringement should extend only to retransmission to private homes and apartments. However, if desired-and subject to the same conditions-the exemption might be extended to private guestrooms only of hotels and similar public establishments. Any other change in the provisions of existing law concerning the treatment of hotels and public establishments should await enactment of legislation providing for a general revision of the copyright law.

These six conditions are the minimum we believe necessary to create and maintain a policy which permits a limited exemption for CATV operations and at the same time conforms to the previously stated principles.

Some proposals have been made for legislative relief for CATV systems which desire to retransmit the signals of stations to subscribers located beyond the stations' normal coverage areas. We believe that legislative relief for such extension of a station's signal is both premature and unnecessary. Legislative relief which would permit ĈATV systems to extend the signals of stations beyond their normal coverage area would be destructive of the very essence of copyright—the right of the creator of literary and artistic works to receive the full economic benefit of his labors. We see no reason to believe that copyright proprietors will be arbitrary and unreasonable in their dealings and we believe that it would be a wise legislative policy to permit an actual period of CATV licensing by copyright proprietors before deciding that any legislative action is necessary other than the exemption for the retransmission of local station signals which I have discussed above.

Finally, we want to make it clear that CBS neither seeks nor desires to control the community antenna industry through the exercise of its rights in copyrighted programs. Indeed, the fact is that with respect to most of its program schedule, the rights of CBS are dependent upon negotiations with a multitude of independent copyright proprietors and, in addition, are subject to contract restrictions imposed by various program participants as well as by unions and guilds under collective bargaining agreements. It will therefore be seen that the interests of CBS are not necessarily identical with those of copyright proprietors generally, and that CBS to a large degree occupies a middle position in which it finds itself in a crossfire between the competing interests of CATV systems on the one hand and those of copyright proprietors, program participants, and unions and guilds on the other. CBS intends to use its best efforts to obtain CATV rights from copyright proprietors and others with whom it deals. CBS has publicly stated that, to the extent it is able to acquire such rights, its intention is to grant CATV systems permission to use its network tele

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vision programs when those systems are the only means by which satisfactory television service will be available. In such circumstances, CBS will ask only a fee sufficient to cover actual costs incurred by it. CBS reaffirms this position.

We have here stated what we consider the best general approach to an intricate problem. We recognize that it does not go as far in offering legislative relief to CATV systems as many proposals which have been made. We believe, however, that the proposal is simple, workable, and fair. We believe that no more extensive proposal is necessary or desirable or can be harmonized with the basic principles of copyright law in this country.

Mr. Chairman, I would like to ask leave, if I may, to submit after this hearing a written statement in response to or commenting upon the testimony of Mr. Zimmerman this morning.

Senator BURDICK. Without objection, so ordered.

Thank you, Mr. Jencks.

Your suggestion is, in general, to allow an exemption to CATV systems that receive the signal and retransmit in the normal listening range of the radio station or TV station.

Mr. JENCKS. Of the normal viewing area of the television station. Senator BURDICK. This can be

Mr. JENCKS. We do not believe that any copyright relief for CATV systems is called for or is desirable with respect to radio.

Senator BURDICK. You make some limitations in that (1) you want the CATV to carry the entire program.

Mr. JENCKS. That is correct, sir.

Senator BURDICK. And the other principal limitation is that it must be within a defined area.

Mr. JENCKS. That is correct.

Senator BURDICK. B contour, would that be a defined area?

Mr. JENCKS. That would be certainly a possible area to choose, Mr. Chairman. We have not indicated in this statement how we think the normal coverage area might be arrived at. It could be an area delineated by a committee of experts who might take into account both technical characteristics of the station's signal and possibly economic characteristics of the station's market area. We have no particular suggestion as to how the area would be determined but we do not think it would be an unduly difficult problem.

Senator BURDICK. Then, if the CATV rebroadcast is limited to the normal viewing area of station X and would carry the total programs, you would have no objection.

Mr. JENCKS. We have no objection in that limited situation of the CATV system having a copyright exemption under the conditions we have specified.

Senator BURDICK. And that is as far as you would recommend, as far as you would go.

Mr. JENCKS. Yes, sir, because, as I indicated in my statement, we see no reason to believe that it will be impossible or difficult for the normal market conditions to operate in other kinds of situations. For our own part, in the so-called underserved areas where the CBS network program service is not being adequately received, we are eager to see that it be adequately received. And we think other similarly situated networks, stations, and copyright proprietors will likewise

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