Local stations must retain their right to prevent unauthorized uses of their programs to protect themselves from legal liability. Examples of cases where continuing unauthorized exposure of a local station program might increase their liability include programs containing defamatory statements, invasions of privacy, and, ironically enough, copyright infringements.

Stations also must be able to protect against misuses of their programing. An example of possible misuse would include editing to distort the content or meaning of a program, thereby placing the station, its personnel or program participants in a false light.

We are not suggesting that the educational community makes a habit of snipping, clipping, and reassembling television programing for less than laudable purposes. We simply wish to point out that once a station cannot determine who may make additional uses of its program product, its ability to protect itself and others from such misuse is lost.

Local stations also must concern themselves with the rights of their employees and other parties connected with their programing. Writers, producers, directors, designers, and on-air personnel are vitally concerned with maintaining the integrity of their work in the public eye. Stations which cannot control additional uses of their programs cannot give any assurance to their programing personnel that instances of damaging misuse, much less legal liability would not occur.

Finally and this I would like to describe in some detail-extensive unauthorized off-air taping destroys a market for the station-copyright owner. Candidly, the market to which I refer barely exists at the present time. We do not now see broadcast stations engaged in extensive licensing of their works for educational purposes. What we envision, however, is a competitive milieu in which broadcast stations will find it not only desirable, but necessary to develop and exploit other markets.

The entire telecommunications industry is entering a new era of competition. Broadcasters who have competed vigorously with each other increasingly will find themselves competing with other media for audience.

Cable television is growing steadily and providing a plethora of competitive program services. Satellites, subscription television, the multipoint distribution service, translators, low power television stations, optical communications, videocassettes, videodiscs, and technologies we may not even know about today, all portend more competition for broadcasters. This will leave broadcasters with a smaller slice of the audience pie and reduce the revenue potential for sale of advertising time. Obviously, it will create a tremendous incentive to find other pies for their sustenance.

One such "pie" or market is the market for videocassette and videodisc copies of broadcast programs. We think it far from inconceivable that local broadcaxt stations may be offering tape or disc copies of their programing for sale in the not too distant future.

Local news, public affairs, and children's programs are expensive to produce. To continue to improve such programing or even to maintain the current level of quality, broadcasters facing a declining ad revenue potential must be able to develop other means of support. Sale or lease of recordings of these programs is one such source of additional revenue.

If our crystal ball is correct, educators will constitute a significant proportion of the market for these program copies. We are concerned that unauthorized off-air taping of local programs in the near term will destroy that market before it has a chance to develop. Yet, this market may become critical to the continued creative efforts of local broadcasters in providing vital news, public affairs, and children's programing. A copyright law such as ours, premised on the promotion of creative efforts, hardly can countenance dilution or destruction of that market.

I also have mentioned that we are concerned as users of copyrighted material. To the extent that programing furnished by networks or purchased by syndicators is exposed in a market prior to local broadcast, its value to the local station diminishes.

Simply put, the more potential viewers who have seen a program before it is broadcast, the less the audience potential the show will have when it is broadcast by the local stations.

Ultimately, of course, stations may insist on lower prices (or higher network compensation) for the rights to broadcast these programs; and the producer, syndicator or network bears the loss. If the producer has made a conscious decision to authorize and gain recompense for prebroadcast uses, then, perhaps, the station could attept to protect itself by seeking exclusivity against such uses of purchasing a different program.

On the other hand, if the station and producer are helpless to prevent prebroadcast exposure, then one must absorb the resultant loss. In either case, the function of the copyright law to promote creative efforts is undermined.

Lastly, I must admit that authorizing or licensing of educational uses of even local broadcast programing may not occur overnight. While we detect no overwhelming or widespread desire in the industry to withold product, stations will face hurdles which may prevent supply from responding immediately to demand. Stations often incluede copyrighted works in their programs-music, scripts, graphics, etc. The copyright owners of these works may or may not be willing to permit stations to authorize off-air taping by educators. Similarly, existing union graphics, etc. The copyright owners of these works may or may not be iwlling to permit stations to authorize off-air taping by educators. Similarly, existing union agreements and talent contracts may not contemplate such additional licensing. We are hopeful that adjustments can be made, but they will take time. Again, I would like to thank you for the opportunity to speak today and, also, for the opportunity to listen to the remainder of the day.

TESTIMONY OF DONNA SESSA ON BEHALF OF ABC-TV

MS. SESSA. My name is Donna Sessa and I am in charge of ABC Media Concepts, which is the educational subsidiary of the American Broadcasting Cos., Inc.

My objective this morning is to outline some of the unique problems which characterize off-the-air taping of broadcast programs for educational purposes.

A television network both distributes and produces copyrighted programs. It is therefore both an exhibitor of copyrighted works and a creator of such works.

As an exhibitor of programs, networks are essentially a vehicle to provide the filmed or taped show to the public. If the show has been created and produced by someone else, the network only has the rights to promote and subsequently broadcast the program.

In such circumstances, not only does the network not have any copyright interest in the program, it has no ability to deal with copyright questions, except to the extent the network is normally bound by contract to commit no act that would jeopardize the owner's copyright. Therefore, ABC is simply not in a position to grant licensing or taping requests for such programs.

As to the limited number of programs which ABC produces inhouse, and does own the copyright-programs such as "Good Morning, America" segments, the ABC "News Close-Up" documentaries, newscasts and sports programs, "Kids Are People, Too" segments, and "20/20"-ABC contracts with writers, directors, and talent to guarantee to these persons certain compensation for their work and for ABC to use the finished product. Under these arrangements, certain rights are also reserved to these persons to utilize their work elsewhere or to be compensated if ABC makes other types of uses of their work.

Under certain collective bargaining agreements with the Writers. Guild, ABC has contractually obligated itself to protect the literary material for copyright purposes and to take no action to cause or permit such material to become part of the public domain.

When a television program is copied and supplied to a marketplace other than television release, the rights reserved to the writer, actor, or director may call for additional payments. Sale or other supply of a documentary to the educational market, for example, generates additional payments to writers.

A television program is clearly not like a book or record which can be casually examined before purchase-and, in fact, is typically purchased in its entirety before being used for any educational or like purpose.

This is why we believe that judgments as to what, if any, "fair use" of such programing may be appropriate, can only be considered after arrangements have been made for the first acquisition of the complete television program.

Recognizing the inherent educational value of much television programing, and acting within the limits imposed, ABC has long sought to cooperate with the educational community. For example, ABC Media Concepts, a wholly owned subsidiary, is the central media resource for educators seeking access to programs televised on the ABC Television Network and on its owned and operated stations. Through its own distribution efforts and the efforts of its licensed distributors, ABC Media Concepts makes many programs available. Solely owned and produced programs are available for rental and for purchase in many formats: 16mm, videocassette, and filmstrip, Available programing includes hard news broadcasts, documentaries. and public affairs, sports, children's, and special features.

Also, ABC now provides for off-the-air licensing of its hard news

casts.

In addition, we recently began supplying educators with appropriate lists-names and addresses of copyright holders for programs not produced by ABC, although televised by the ABC Television Network or its owned and operated stations.

ABC has also worked closely with the educational community to better utilize television in the learning process, including efforts to increase both reading skill levels and reading interest.

ABC has designed a children's "Be a TV Reviewer" project to motivate children to write and to think critically about television programing, and has underwritten a project to create a social studies or language arts course for grades 3-5 which will enable children to become more intelligent and discriminating viewers.

These examples of coordination and cooperation with the educational community reflect ABC's widespread interest in improving the learn ing process-within the limits imposed.

I thank you very much. [Applause.]

[Prepared statement of Donna Sessa follows:]

STATEMENT OF DONNA SESSA, DIRECTOR OF ABC MEDIA CONCEPTS, ABC, INC.

My name is Donna Sessa and I am Director of ABC Media Concepts, the educational subsidiary of ABC, Inc. My objective this morning is to outline some of the unique problems which characterize off-the-air taping of broadcast programs for educational purposes.

A television network both distributes and produces copyrighted programs. It is therefore both an exhibitor of copyrighted works and a creator of such works.

As an exhibitor of programs, networks are essentially a vehicle to provide the filmed or taped show to the public. If the show has been created and produced by someone else, the network only has the rights to promote and subsequently broadcast the program.

In such circumstances, not only does the network not have any copyright interest in the program, it has no ability to deal with copyright questions, except to the extent the network is normally bound by contract to commit no act that would jeopardize the owner's copyright. Therefore, ABC is simply not in a position to grant licensing or taping requests for such programs.

As to the limited number of programs which ABC produces inhouse, and does own the copyright-programs such as Good Morning America segments, the ABC News Close-up documentaries, newscasts and sports programs, Kids Are People Too segments, and 20/20-ABC contracts with writers, directors and talent to guarantee to these persons certain compensation for their work and for ABC to use the finished product. Under these arrangements certain rights are also reserved to these persons to utilize their work elsewhere or to be compensated if ABC makes other types of uses of their work.

Under certain collective bargaining agreements with the Writers Guild, ABC has contractually obligated itself to protect the literary material for copyright purposes and to take no action to cause or permit such material to become part of the public domain.

When a television program is copied and supplied to a marketplace other than television release, the rights reserved to the writer, actor or director may call for additional payments. Sale or other supply of a documentary to the educational market for example, generates additional payments to writers.

A television program is clearly not like a book or record which can be casually examined before purchase and, in fact, is typically purchased in its entirety before being used for any educational or like purpose. This is why we believe that judgments as to what, if any, "fair use" of such programming may be appropriate, can only be considered after arrangements have been made for the first acquisition of the complete television program.

Recognizing the inherent educational value of much television programming, and acting within the limits imposed, ABC has long sought to cooperate with the educational community. For example, ABC Media Concepts, a wholly owned subsidiary, is the central media resource for educators seeking access to programs televised on the ABC Television Network and on its owned and operated stations. Through its own distribution efforts and the efforts of its licensed distributors, ABC Media Concepts makes many programs available. Solely owned and produced programs are available for rental and for purchase in many formats: 16mm, videocassette and filmstrip. Available programming includes hard news broadcasts, documentaries and public affairs, sports, children's and special features.

Also, ABC now provides for off-the-air licensing of its hard newscasts.

In addition, we recently began supplying educators with appropriate lists (names and addresses) of copyright holders for programs not produced by ABC, although televised by the ABC Television Network or its owned and operated stations.

ABC has also worked closely with the educational community to better utilize television in the learning process, including efforts to increase both reading skill levels and reading interest. ABC has designed a children's "Be a TV Reviewer" project to motivate children to write and to think critically about television programming, and has underwritten a project to create a social studies or language arts course for grades 3-5 which will enable children to become more intelligent and discriminating viewers.

These examples of coordination and cooperation with the educational community reflect ABC's widespread interest in improving the learning processwithin the limits imposed.

I thank you very much.

Mr. LEHMAN. Thank you.

Next, we will move on to CBS, and Joe Bellon will make a presentation for CBS.

TESTIMONY OF JOE BELLON, CBS

Mr. BELLON. I think that CBS wisely anticipated Mr. Lehman's prior remarks about the ratings gotten us by ABC in sending a person from the news division.

And I am proud to say that we at CBS News feel that with Walter Cronkite and "60 Minutes," we have somewhat of a leadership position in the news area.

For nearly 20 years, CBS has been making many of its public affairs broadcasts available to various educational film and tape distributors, who, in turn, rent or sell them to school systems and libraries for nonbroadcast exhibition.

Many of our public affairs broadcasts not licensed to distributors are available directly from CBS.

In some cases, however, because of rights prohibitions or legal considerations, we cannot release these broadcasts.

And with respect to entertainment programs, in practically all cases, CBS obtains only broadcasting rights, and therefore, CBS cannot make these programs available for nonbroadcast use.

The process of clearing rights for nonbroadcast use and licensing these broadcasts to distributors is administered by a department in CBS whose activities are akin to the subsidiary rights or licensing departments at publishing companies or motion picture corporations. We regard this as a proper and beneficial business activity.

Likewise, those educational distributors who acquire our broadcasts are also engaged in a worthwhile business enterprise.

That's why, since 1957, this CBS licensing department has released more than 600 broadcasts to distributors for nontheatrical exhibition, including such series as "The Twentieth Century," "CBS Reports,' "Of Black America," segments of "60 Minutes," plus many other outstanding CBS News documentaries.

I know that some of you are quite familiar with this licensing function at CBS and at the other networks. But we receive plenty of mail and telephone inquiries from educators, especially those who have recently discovered the new video technology, that suggest complete unawareness of this business activity. I believe that this lack of knowledge is at the root of many of the problems we are having with unauthorized off-the-air taping and with some proposals of educators who want special concessions in the copyright law.

I suppose the attitude is: What harm are we doing by taping these programs off the air, being totally unaware of the ongoing, prolonged business activity in this area.

Now having said that, let me now try to dispel some other misconceptions that we encounter in our discussions with educators on the subject of off-air recording.

First, many persons, unfamiliar with television production and the profession of broadcast journalism, do not comprehend television news and public affairs programs as "copyrighted works," like books which are indeed protected under the U.S. copyright law.

I know that those of you who are aware of how these programs are produced would agree that the skill and creativity involved in the production of these broadcasts equals or exceeds that of authors of books and other printed matter.

Another misconception is that because television broadcasts are transmitted over the "public airwaves," they thereby lose some copyright protection and thus may be freely used by those who record these broadcasts off the air.

Somehow, similar arguments are not made with respect to textbooks or other educational materials that schools purchase and are delivered to schools over "public" highways or by means of the U.S. Postal Service.

Let me summarize the position of CBS. We believe that our broadcasts are indeed creative works protected by copryight. These broadcasts are, have been, and will continue to be licensed for nonbroadcast use in schools, and other institutions and eventually for inhome use.

We believe that this is a proper business activity similar to the sale of books and the licensing of theatrical motion pictures to schools and