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understand; the lack of accountability by the performing arts societies for the fees they collect throughout the country; and the question of charging, not just once, but several times, for music that is played on radio and television broadcasts resulting in double and triple dipping for the performing rights societies. These problems all have a negative effect on small business operations.

Mr. Chairman, there is not a single issue that arouses more anger in the hospitality industry than the issue that you have before you today.

Mr. Chairman, what concerns me most about the issue is the lack of understanding by the performing rights societies of our retail industry's positive position relative to the incidental use in our establishments of radio and television transmissions, cassettes, CD's, and other types of recorded music commonly found in the home.

These televisions, radios, and players are turned on for our customers enjoyment. There is little economic advantage to us. We simply provide background music in the dining room or have a television for our customers at the bar. The customers expect service, food and drink, and a relaxed atmosphere.

For the performing rights societies to charge fees for the incidental use of televisions, radios, and other players is simply outrageous.

I am here today to urge your positive vote for this first step in correcting many of these abuses in H.R. 3288, the Public Accommodations Exceptions Act. This is not a New Jersey problem; it is a national problem in our industry.

A member of the Montana Association recently wrote the National License Beverage Association that they have two television sets in their lounge. One is a 19-inch, the other is a 36-inch. ASCAP wanted to charge them for both televisions, even though the owner insisted that the televisions are of the type commonly used in the home, and were not assessable by ASCAP. They wanted $300 a year for one of the TV's.

This is the way they interact with our members. I have personal examples throughout New Jersey. The issue is simple. If an establishment does not charge admission for customers specifically to hear radio and television transmissions, then we should not have to pay a fee for simply turning on the television, radio or other player.

It seems, Mr. Chairman, that all three performing rights societies have various price structures relating to televisions, radios, and other players in our establishments. There is no consistent standard on homestyle exemptions relating to television size.

It is possible, Mr. Chairman, for one performing rights society to require a license for a 27-inch television and another to require a fee for a 36-inch television. It is unfair to allow these inconsistencies to continue especially where we already pay for cable network access to programming.

Mr. Chairman, we already pay fees to the performing rights societies for live music and music on our jukeboxes. I notice that the copyright law presently provides an exemption from fees for the playing of records in record stores which promote the sale of records, and at agricultural fairs and a whole list of other activities that are exempted in the law.

Mr. Chairman, television and radio technology has greatly changed in the past 18 years. Our legislation is narrowly drawn to provide for another exemption under the law. In 1976, Congress passed the copyright law that exempted music played on a single apparatus of the type commonly used in private homes.

It is time for Congress to update the homestyle exemption and pass H.R. 3288 this session of Congress.

Mr. HUGHES. Thank you very much, Mr. Johnson. [The prepared statement of Mr. Johnson follows:)

Thank you.

PREPARED STATEMENT OF JOE JOHNSON, OWNER, ROD & REEL

TAVERN, BRIGANTINE, NJ, AND PRESIDENT, ATLANTIC COUNTY CHAPTER, NEW JERSEY LICENSED BEVERAGE ASSOCIATION, ON BEHALF OF THE NATIONAL LICENSED BEVERAGE ASSOCIATION

Mr. Chairman and members of the subcommittee, I am Joe Johnson, owner of the Rod &

Reel Tavern in Brigantine, New Jersey, and the president of the Atlantic County Chapter of the New

Jersey Licensed Beverage Association. Today I am representing the National Licensed Beverage

Association, which is composed of members of the retail alcohol beverage industry.

I would like to compliment the members of this subcommittee, including my congressman,

Rep. Bill Hughes, for having the courage and foresight to hold this hearing on the performing rights

societies. I believe that this is the first hearing to focus on the many problems we in the hospitality

industry face every day in dealing with the agents of the performing rights societies. We recognize

that all of the problems are not addressed in the legislation we are urging you to consider and pass,

H. R. 3288, the Public Accommodations Exception Act. In many cases, owners of establishments

have no recourse but to pay the fees or face litigation by the performing rights societies. The

problems include: the total lack of informatiun on the song titles that each group claims as its own;

the arbitrary imposition of fees, based on a matrix of criteria that most small businessmen cannot

understand; the lack of accountability by the performing rights societies for the fees they collect around the country; and the question of charging not just once but several times for music played

on radio and television broadcasts, resulting in double and triple dipping payments to the performing

rights societies. These problems all have a negative effect on our small business operations. Mr.

Chairman, there is not a single issue that arouses more anger in the hospitality industry than the

issue that you have before you today in this hearing.

Mr. Chairman, what concerns me the most about this issue is the lack of understanding by

the performing rights societies of our retail industry's position relative to the incidental use in our

establishments of radio and television transmissions, cassette tapes, CD players and other types of

recorded music for use in the home. These televisions, radios and players are turned on for our

customers' enjoyment. There is little economic advantage to us in having pleasant radio or other

background music in a restaurant or in having a television on the bar for our customers. The

customers expect service, food and drink in a relaxed atmosphere. For the performing rights

societies to charge fees for this incidental use of televisions, radios and other players is simply

outrageous.

I am here today to urge your positive vote for this first step in correcting many of these

abuses by passing H. R. 3288, the Public Accommodations Exceptions Act. This is not just a New

Jersey problem, it is a national problem for our industry. A member of the Montana Tavem

Association recently wrote to the NLBA that they have two televisions in their lounge: one is 19",

the other 36". ASCAP wanted to charge them for both televisions, even though the owner insisted

that televisions that are customarily used in the home cannot be assessed. ASCAP wanted $300 per

year for one of these televisions. This is the way they interact with our members. I have personal

examples throughout New Jersey.

The issue is simple: if an establishment does not charge admission for customers to

specifically hear radio and television transmissions, then we should not have to pay a fee for simply

turning on a television, radio or other player. It seems, Mr. Chairman, that all three performing

rights societies have varied price structures relating to television, radios or other players in our

establishments. There is no consistent standard on homestyle exemption television size. Is it

possible, Mr. Chairman, for one performing rights society to require a license fee for a 27" television

and another to require a fee for 36" television? It is unfair to allow these inconsistencies to

continue, especially since we pay fees to cable networks for access to programming, for live music

performances, for jukebox music and, yes, Mr. Chairman, fees to the performing rights societies

under the copyright law. We need to clarify this issue, and H. W.3288 does just that. I notice that

the copyright law presently provides an exemption from fees for record stores, to promote the retail

sale of records, and for agricultural fairs.

Mr. Chairman, television and radio technology has greatly changed in the last 18 years. Our

legislation is narrowly drawn to provide for another exemption under the law. In 1976, Congress

passed a copyright law that exempts music played on a single apparatus of the type commonly used

in private homes. It is time for Congress to update the homestyle exemption and pass H. R. 3288

this session of Congress.

worse.

Mr. HUGHES. Before I recognize Mr. Leonard for his testimony on behalf of the National Licensed Beverage Association, let me advise you that I asked Congressman Don Edwards to chair for a while.

Instead of recessing for an hour at noontime, an hour and a half, because I have a direct conflict at noontime, I am going to continue because of the bad weather, and take the rest of the testimony.

But I have read your statements and I will examine the transcript, and I want to say I appreciate your coming, in some instance, a fairly long distance. I will ask at this

time if Don Edwards will chair, and I know that my colleague has the same conflict. Would you like to be recognized?

Mr. REED. Yes, Mr. Chairman. Thank you very much. Both you and I will be going down to visit with the Attorney General, so we beg your apology for leaving, but I will have a chance later to see John and talk to him. I appreciate your testimony and coming here today. Thank you very much.

Mr. EDWARDS (presiding). Thank you, Mr. Chairman. I am honored to temporarily chair this very distinguished subcommittee that I am always pleased to be a part of. I apologize because of the scheduling of our work today. I was supposed to be at three places at once, and it is very difficult to divide yourselves into three parcels, although I have people who would like to divide me, and do

You are also going to help educate me and other people because I was not able to be here for the beginning of the testimony, but thank you for being patient.

Mr. Leonard, you may proceed. Without objection, all four statements will be made a part of the record. STATEMENT OF MICHAEL LEONARD, OWNER, GREENBAUM

AND GLHOOLEY'S RESTAURANT, WAPPINGER FALLS, NY, AND EXECUTIVE VICE PRESIDENT, UNITED RESTAURANT, HOTEL, TAVERN ASSOCIATION OF NEW YORK STATE, ON BEHALF OF THE NATIONAL LICENSED BEVERAGE ASSOCIATION

Mr. LEONARD. Mr. Chairman and members of the subcommittee, I am Mike Leonard, owner of Greenbaum and Gilhooley's Restaurant in Wappinger Falls, NY. I am the executive vice president of the United Restaurant, Hotel, Tavern Association of New York State, and I am here today representing the National Licensed Beverage Association.

In my home State of New York, our members are constantly experiencing problems with music licensing. This has increased dramatically during the past few years as the licensing societies have prioritized the licensing of televisions.

Our most serious problem stems from the confusion over the homestyle exemption, especially at it relates to televisions. The law provides that the exemption applies to equipment commonly found in the home, but does not define this any further.

The provision is so confusing, that the two most prominent licensing organizations, ASCAP and BMI, interpret the exemption differently. BMI has determined that any single television measuring 27 inches diagonally or larger is equipment not commonly

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