eliminate the commercials, then you could understand, could you not, how this would have an adverse impact on us? Senator D'AMATO. I could understand your concern. Notice the way I hedged that answer. Mr. SHEINBERG. There is a gentlemen here, whom I have never met before in my life, who appears to represent some nonbiased testimony, by the name of Mr. Waz of the National Citizens Committee for Broadcasting. With the exception of the fact that he sees this Senate bill as an appropriate interim measure, which he does and therefore supports it, I found myself supporting about 90 percent of what he said. He focused on not only the eagerness to somehow decriminalize-and, by the way, copyright infringement in the home is not a crime. Senator D'AMATO. Pardon me? Mr. SHEINBERG. Copyright infringement in the home is not a crime, so these people who have been variously painted as criminals and the like-there is no issue of their being criminals, and if we say we are not going to proceed against them, I believe we have the authority not to proceed against people who might otherwise be tort feasors of some sort. With the exception of the point that he made, which is that he saw this bill as an appropriate interim device, I found myself subscribing to most of what he said, because he was interested in the impact upon the community that made the product, not because I believe he has any love for those of us who toil in those vineyards, but because he recognized that ultimately a diminution of their productivity is going to impact negatively on consumers. Senator D'AMATO. Mr. Scheinberg, let me assure you that it certainly is not the intention of this Senator-and I am certain that, when I indicate my sentiments, Senator DeConcini shares them as well-to do any kind of injury to those who make possible the entertainment and the programs that those of us would like to see recorded or do record. We do have an underlying concern. Make no mistake about it. Although I support S. 1758, whether it is pride of authorship or not, the totality of the problem is one that should not be negated as a result of what we see to be maybe an interim step. I think Senator DeConcini has indicated that a number of times. We do not say this is the final answer, we do not say this is the end-all and be-all, but really treat it in the manner of dealing with this one particular problem. I think some of the things you have brought forth today-can we take an accurate survey? What happens if we determine, indeed, that the advertising message does not get through and there is that kind of adverse impact that ultimately will reduce the productivity and the capability of the industry to proceed?-those are questions that certainly have to be looked into, with the balancing as to whether you put out of business or allow to be put out of business another industry as well. That is a very legitimate question, and I do not think we should engage in it. That is something that we have to weigh also. Do they face a situation of dire consequences? If we do nothing, do we not just continue to dig that hole for them when someday, if we allow it to go on-as you would seem to indicate, saying, “Well, we have a right to the product wherever and whenever, and it should not be shown again"-I think we could see some dire consequences potentially posed for their industry. So it is a balancing of those two. With that, I turn the chair back over to Senator DeConcini who has come back. Senator DECONCINI. Mr. Sheinberg, did you finish your statement? Mr. SHEINBERG. I finished my statement. Senator DECONCINI. Mr. Williams, do you have a statement? Senator DECONCINI. You may proceed, please. STATEMENT OF W. G. WILLIAMS, FORMER PRESIDENT AND CURRENT BOARD MEMBER, INDEPENDENT MEDIA PRODUCERS ASSOCIATION Mr. WILLIAMS. I am W. G. Williams, and I am on the board of directors of the Independent Media Producers Association. The members of the Independent Media Producers Association, a nationwide organization of producers of motion pictures and videotapes, have a great interest in the outcome of this debate over the future legality of the off-air videotaping of broadcast materials. To muddy the waters a bit perhaps, our primary concern is one that has not yet been brought to the attention of this committee. Senate bill 1758, which was introduced in response to the Universal v. Sony decision with the intent of legalizing home video recording of off-air material, is, we feel, much broader than necessary to achieve the goal. The bill gives a tremendous foot in the door to those who would make unauthorized copies of all types of video and motion picture programming, broadcast or not. In fact, the limiting words "broadcast," "home," or "television" do not even appear in the bill. The apparent intent of the bill is definitely worthwhile-to allow American citizens the right to this technological convenience that we have been discussing-but this must be done without disallowing the copyright holders a fair return on their investment. If the profit incentive is removed or significantly reduced for the producers, all those who enjoy film and television programs will suffer because independent producers will either turn their attentions to other endeavors or will produce materials that will be specifically excluded from any market that cannot be tightly controled. Members of IMPA, with a few exceptions, are not the large studios or corporations that have tremendous resources to fall back upon or even tremendous numbers of copyrights. Rather, most are independent entrepreneurs or small businesses that produce programs for training and education as well as entertainment. Often these programs are produced spontaneously in the hopes of recouping costs through future sales. Therefore, the making of any unauthorized duplicates of their programs represents a significant financial loss to our producers. Although this unauthorized duplication has been a problem for some time, the passage of S. 1758 in its present form will only exacerbate the situation. As a result, a major concern of our organization is that the passage of this bill, as written, could be construed by the general public to be a wide opening of the door to unauthorized duplication. The bill, as written states that it: is not an infringement of copyright for an individual to record copyrighted works on a video recorder if the recording is made for private use and the recording is not used in a commercial nature. Let me illustrate our concerns with this wording that I just used. Does S. 1758 mean that an individual may order a preview copy of any kind of film or videotape or obtain such a program on approval from an authorized distributor-we are not talking broadcastmake his or her own copy of that program, and return the original material to the distributor without a purchase? The wording of S. 1758 seems to give away the store. Since broadcasting is not mentioned in the bill, it would also seem that the current wording of the bill would allow anyone to copy any copyrighted films or tapes obtained from any source and not be in violation of the Copyright Act as long as it is for private use and not used in a commercial nature. Under S. 1758 it would seem that the copyright holder would have no recourse or make very few sales. Senator DECONCINI. Excuse me, Mr. Williams, if I understand what you are saying, would it not require a person to have two recorders? Mr. WILLIAMS. That is true. Senator DECONCINI. So they would have to go out to put together an operation where they wanted to borrow one. Mr. WILLIAMS. That is very true. Senator DECONCINI. So they would have to double their investment? Mr. WILLIAMS. Right. An independent producer of motion pictures or television programing would seem to have far less hope of ever making a return on his or her investment as a result of this apparent abrogation of his or her copyright. If the wording of the bill were sufficiently narrow as to be limited to that material which could be obtained off-air from open circuit broadcasting or even cable television, where the producers have already been reimbursed for their efforts-at least theoretically-it would be different. But the wording of the bill is so loose as to endanger the copyright protection of all video material. With the passage of S. 1758 in its present form, the holder of copyrights on video material would have little hope of ever making a return on a speculative investment and might well decide that plumbing or carpentry would be a far better way to make a living. That may well prove to be the case. The end result could be a reduction in the amount of future programing, since there would be little chance of paying the developmental costs of any programs not having a prior guarantee of network or theatrical play. This would seem to be to the detriment of the very people that the bill is intended to benefit, and this was one of the concerns voiced by Mr. Waz. Currently this unauthor ized duplication of materials is frequently referred to as piracy and, if you are a producer, the term is apt. The Federal Bureau of Investigation has been making considerable strides recently in developing ways of determining whether specific motion picture prints and videotapes are pirated or not. It is also IMPA's concern that the passage of this bill, as written, will make it more difficult for the FBI's antipiracy unit to continue this work. This bill might also make it more difficult to obtain piracy convictions of those few who cause a significant loss to the entire industry, including Columbia and the major studios, through their wholesale production of pirated copies of programs. While a variety of solutions has been suggested here today, IMPA would like to make the recommendation that changing the wording of the bill could go a long way toward addressing many of our organization's concerns. First, we feel that the wording might be: Notwithstanding the provisions of section 106, it is not an infringement of copyright for an individual to record on a video recorder for private use in the home television signals transmitted through the air or through cable into the home provided, one, that no additional copies be made or be allowed to be made; and, two, that there be no commercial use of any recordings made under this section. Mr. Friedman earlier today elaborated on what, home, could be referred to under terms of law. This wording would address the specific situation that inspired the bill and would allow individuals the full use of their recording equipment to enjoy television programing at their leisure in their homes. This wording also would provide a measure of protection to the copyright holders of the broadcast material. And, finally, the wording would provide additional protection to the producers of copyrighted educational materials which are rarely broadcast into the home but which are often telecast over closed circuit or ITFS systems into classrooms. Additionally, we feel that the bill should be expanded to stipulate that it does not authorize any further distribution of any videotapes recorded under its provisions, it does not authorize reproduction of any copyrighted materials not telecast into the home, and that any such duplication without the express concern of the copyright holders constitutes a violation of copyright. To conclude, the Independent Media Producers Association agrees that individuals should be allowed to enjoy television in their home on their own schedule. This means that off-air video recording of television programs for private home use should be completely legal. However, in correcting the apparent oversight in the Copyright Act brought to light by the Universal v. Sony decision, the Congress should not pass legislation that would be so broad as to deny copyright protection to the producers. We feel that S. 1758, in its present form, does just that. We respectfully urge this committee to study ways to revise the language of the bill so that the rights of the few will not be annulled in the haste to reestablish the rights of the many. Senator DECONCINI. Thank you, Mr. Williams. I think that is a very constructive suggestion that certainly goes to the thrust that the authors of this bill intended, and that is to exempt the consum ers in their home for private use from having to be subject to the Copyright Act. Your suggestions are certainly along those lines. I wonder if Mr. Sheinberg cares to comment regarding those suggestions? How does your benevolent organization feel about that, sir? Mr. SHEINBERG. I think his suggestions in terms of what concerns him are well taken. They do not go to the heart of my concerns, but I can understand his. Senator DECONCINI. What suggestions do you have, Mr. Sheinberg, as to what ought to be done in this area? Should we leave it to the courts to make this determination? Mr. SHEINBERG. No. 1, I do not see, as I said earlier, a way out of the costly procedure that Universal and Sony find themselves in, in terms of all the acts, if they continue to be viewed as infringements that have taken place to date. I am afraid that we are going to be in the courts, absent some type of bilateral or multilateral type of settlement. No. 2, I think there is an appropriate remedy that might be considered. Left to my own devices, it certainly would be only candid to state that we wish that the videotape recorder were not a problem that we had to confront. However, the reality is that the videotape recorder is a device that is proliferating. Consumers do like it, and we have to face that reality also. Our main concern is that, before Congress adopt any law which in effect takes this radical approach toward eliminating such an important aspect of our copyrighted property, there really be very intense and due deliberation about what damage can occur and how do we properly compensate copyright owners for such damage. We are concerned that there has been a rush to judgment, and we think this is a time for careful, detailed study. If the copyright owners are unable to convince you and the Congress or other appropriate tribunal that indeed their injury is real, not imagined, that is one case. We obviously believe it is real. There is only one way that I have ever been able to figure out that you can cope with something if indeed you determine that you wish to grant what amounts to a compulsory license to people to permit this limited type of copying in the home, and that is that some type of fund is going to have to be created out of somewhere that is going to go toward compensating that mass of copyright holders that are entitled to some compensation. Senator DECONCINI. You are talking about the consumer obviously, when you say somewhere, someone. Mr. SHEINBERG. No. Senator DECONCINI. That has to be the people who are going to use it. Mr. SHEINBERG. No. Senator DECONCINI. Where else would it come from? Mr. SHEINBERG. Quite frankly, our view is that the source is the place from which this fund should come. Senator DECONCINI. You mean the manufacturers? Mr. SHEINBERG. The manufacturers of the tapes, the manufacturers of the machines. Whether or not this is something that can be absorbed in their profits I do not know. I understand for example |