APPENDIX 6.-LETTER FROM BENJAMIN L. PALUMBO, PALUMBO & CERRELL, INC., TRANSMITTING A RESPONSE FROM ASCAP TO THE STATEMENT OF THE TELEVISION MUSIC LICENSE COMMITTEE, TO HON. WILLIAM J. HUGHES, CHAIRMAN, APRIL 20, 1994 Palumbo & Cerrell, Inc. Public Affairs Counselors RECEIVED 1000 Connecticut Avenue. N.W. Suite 700 Washington. D.C. 20036 (202) 466-90XX) (202) 609 FAX April 20, 1994 APR 2 5 1994 SUBC. ON IP.IA The Honorable Willian J. Hughes 241 Cannon House Office Building Washington, DC/20515 Dear Mr Chairman: the Enclosed is our response to a statement submitted to RESPONSE AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS to the Statement of the Television Music License Committee HOUSE JUDICIARY COMMITTEE SUBCOMMITTEE ON INTELLECTUAL The American Society of Composers, Authors and Publishers (ASCAP) respectfully submits this response to the statement submitted to the Subcommittee on March 11, - 1994 by the Television Music License Committee (TMLC). As we show below, the TMLC's principal arguments that ASCAP has resisted efforts on the TMLC's part to obtain "a meaningful per program license" and that ASCAP has refused to provide television stations with information as to musical works in the ASCAP repertory are refuted by both history and the reality of the marketplace, the manner in which music is used by local - television stations. History The history of the dealings between ASCAP and the owners of the nation's commercial television stations dates back to the late 1940's. When television was in its infancy, the earliest licenses issued by ASCAP were gratuitous blanket licenses. In the wake of the entry of the Amended Final Judgment in United States v. ASCAP, the owners of a group of local television stations brought the first proceeding under Section IX of the ASCAP consent decree, seeking determination by the federal court of a reasonable fee for an ASCAP per program license. That proceeding was dismissed in 1954 when the stations and ASCAP agreed on the terms for a per program license. In 1954, it was clear that the per program license was not intended for most television stations. Then, às now, television stations aired a large number of programs containing ASCAP music, so as to make impracticable a per program license the fee for which is calculated as a percentage of revenue from programs with ASCAP music. From 1954 until 1985, the same per program license terms were offered to television stations. Indeed, although ASCAP and the radio station industry agreed on a radically new form of per program license in 1978, the television stations pursued another course, launching their antitrust attack against ASCAP and BMI at that time, Buffalo Broadcasting v. ASCAP and BMI, which ultimately resulted in rejection of the stations' claims that ASCAP's and BMI's licenses violate the antitrust laws. When they were unsuccessful in their efforts to destroy the longstanding mechanism for licensing performing rights, the local television stations commenced a proceeding for determination of ASCAP license fees under the ASCAP consent decree (the Buffalo Broadcasting proceeding). Shortly thereafter, in 1986, the stations sought Congressional they came before the Subcommittee seeking enactment of the so-called "source-licensing legislation." The Subcommittee was not persuaded to enact any legislation by that effort. intervention The Buffalo Broadcasting proceeding remains pending and is now at the appellate stage. As a result of the rulings in the case by Magistrate Judge Dolinger, ASCAP and TMLC have agreed upon most of the terms and conditions of a new per program license for 1995. This means that if the stations ultimately prevail, they will have the radically new per program license they say they have been unable to obtain previously. If ASCAP is able to persuade the Second Circuit Court of Appeals that Magistrate Dolinger erred in determining the fee structure for the new per program license, then the Court will further consider and resolve the issue. In either event, we believe that the Subcommittee should not even consider legislation mandating per program license terms until the results of the litigation are known. *We should note as well that just last year, the TMLC's Executive Director and its counsel testified before the Canadian Copyright Board in support of the Canadian broadcasters' efforts to persuade the Board to mandate a per program license for Canadian television stations. Recognizing the inherent administrative inefficiency of a per program license, the Board denied the broadcasters' request for a per a per program license. The Television Music Marketplace Undisputed testimony in the Buffalo Broadcasting antitrust and Section IX cases - and, indeed, readily demonstrate the diversity of the television music marketplace. Music can be heard in a wide range of syndicated programs aired by local television stations: situation comedies, action-adventure shows, feature films, reality-based daily programs, talk shows, game shows, sporting events and even the occasional variety program. In addition, music is used in locally-originated programs like the evening news and local sports events. use Under the interim per program license arrangements that have been in effect since 1988, ASCAP has furnished its more than 250 per program television station licensees with music information on thousands of programs aired by local television stations. On a semi-annual basis, ASCAP has furnished each per program licensee with an updated Interim Per Program List, identifying those programs, series and feature films that contain ASCAP music. of course, for most programs aired by television stations, information as to whether a particular song is in the ASCAP repertory is simply irrelevant. This is because most of the stations' programs are either furnished by the networks with which they are affiliated (and which are separately licensed by ASCAP), or are syndicated programs produced by third parties. In either case, the insertion of |