Under H.R. 4347, as introduced, commercial CATV systems would be fully liable for copyright infringement whenever they retransmit without permission a broadcast containing copyrighted material. After extensive consideration of the arguments made during the hearings and the legal and public policy issues involved, the Subcommittee has reached agreement on certain amendments which would substantially change the bill to be recommended to the full Committee. The Subcommittee is, of course, aware that your Committee on Interstate and Foreign Commerce has been engaged in hearings and study of the problems of communications law presented by CATV activities. It has been our purpose, as far as possible, to resolve the copyright issues raised by CATV without trenching upon the area of communications problems. Because of the importance of this question and its relationship to the active consideration now being given by your Committee to measures that would define the status of CATV systems under the Communications Act, we have decided to announce our conclusions on this particular question at this time. The following is a broad simplified summary of what will necessarily be a complex statutory provision.

For the purpose of this summary, "CATV" refers to commercial services that intercept off-the-air transmissions of programs originated by others and retransmit them to paying subscribers by wire connections or the like, without altering their content, originating programs themselves, or making special charges for particular programs.

The Subcommittee's proposal would divide CATV activities, upon the basis of geographic and other characteristics, into three broad categories or "areas" which we call "white," "black," and "gray." In very general terms, the Subcommittee proposes to exempt CATV operations from copyright if they are entirely in the white area; make them fully liable if they are in black area; and subject them to limited liability in the nature of a "reasonable license fee" if they are in the gray area.

Under the Subcommittee's proposal, the white area embraces CATV retransmission solely within the radius of the area served by the primary broadcaster (in effect, its "Grade B contour") to fill in gaps or improve bad reception caused by technical interference. Example: A system operating solely within New York City and retransmitting New York City stations only.

The black area embraces retransmission beyond the area served by the primary broadcaster into an area already served by one or more other broadcasters, none of whom is licensed to carry the same program. Example: A system bringing a New York City station's broadcast of a motion picture to Philadelphia subscribers when no Philadelphia station is licensed to broadcast it.

The gray area embraces retransmissions beyond the area served by the primary broadcaster into an area already served by another broadcaster who has a license to carry the same program; or into an area not served by any primary broadcaster.

The Subcommittee believes that in the so-called white area where the CATV operation is merely a "fill-in" or "master antenna" service, operating solely within the area served by the primary broadcaster, the impact of the CATV operation is primarily to expand the audience by which the value of the copyright owner's license to the primary broadcaster is measured.

Where, on the other hand, the CATV operation occurs in a black area, i.e., where it extends into an area within which there are broadcasting facilities but the copyright owner has not granted his authorization for any transmission, the unauthorized retransmission by CATV could destroy a market and result in direct, immediate damage. Here the Subcommittee would impose full liability for infringement of copyright, including injunctive relief.

Intermediately, in the gray area situation, where the copyright owner has already licensed the use of his work in the area, or there is no broadcaster to license, there is no direct loss of market exclusivity. There is, however, an uncompensated "free ride" at the owner's expense. Advertisers will not pay for viewers living outside their area, and CATV service in these areas may keep out local broadcasters who would pay. Here, the Subcommittee believes that a reasonable license fee best meets the equities.

Beyond this allocation of different rights and remedies for the white, black and gray areas, the Subcommittee's proposal takes into account the arguments of the CATV operators as to the difficulties of obtaining advance clearances and the dangers of unlimited liability for statutory damages in this field. It proposes, with respect to CATV operations in the black area, to impose full liability only if the operator proceeds with the unauthorized retransmission after

having received advance notice from the copyright owner. If the owner does not provide advance notice, the retramsmission would be treated as if it were in the gray area.

As for CATV operations in the gray area, the Subcommittee proposes to withhold the possibility of an injunction or stautory damages, and limit the operator's liability to a "reasonable license fee" to be fixed by the court in the absence of agreement. However, in order to induce negotiations, the proposed amendment would provide the court with discretion to triple the recovery if it finds that the infringer failed to accept a reasonable offer, or to withhold any recovery if it finds that the copyright owner had refused to accept a reasonable offer.

It should be emphasized that the Subcommittee's proposal is directed solely to a prospective solution to the community antenna problem under the general revision by the copright law. It is in not intended as the expression of any opinion as to what the present law is under the 1909 statute or as to how the courts should ultimately decide that question. With best regards,

Sincerely yours,

ROBERT W. KASTEN MEIER,

Acting Chairman for Copyright Revision Subcommittee No. 3. Mr. BRENNAN. The first witness is Mr. Abraham Kaminstein, Register of Copyrights.

Senator BURDICK. Mr. Kaminstein. Will you introduce your assistant for the record, please?

STATEMENT OF ABRAHAM KAMINSTEIN, REGISTER OF COPYRIGHTS; ACCOMPANIED BY BARBARA A. RINGER, ASSISTANT REGISTER OF COPYRIGHTS; AND ABE A. GOLDMAN, GENERAL COUNSEL, COPYRIGHT OFFICE

Mr. KAMINSTEIN. On my left is Miss Barbara Ringer, who is the Assistant Register of Copyrights and on my right our General Counsel, Abe Goldman.

Mr. Chairman, my name is Abraham L. Kaminstein and I am the Register of Copyrights. It is a privilege for me to appear again before your committee as a witness in this series of hearings devoted to one of the most difficult problems in copyright law revision: How community antenna television and similar retransmission services should be dealt with in the copyright law.

As I mentioned when I testified before you nearly a year ago, S. 1006 is the product of more than a decade of study, discussion, and drafting. Out of the many problems dealt with in the bill, one in particular did not emerge as an important issue until the last 2 or 3 years, and has become urgent only recently. That is the question of whether, in the revised copyright law, commercial community antenna television systems should be fully subject to copyright control or should be accorded special treatment. The Copyright Office, after carefully weighing the arguments put forward on both sides, concluded that what CATV is doing is a public performance that should be subject to copyright control, and we therefore drafted S. 1006 in terms of full CATV liability. In doing so, however, we were careful to point out that we were not expressing any opinion as to what the present law on the subject is, and that the problems facing CATV operators in obtaining clearances are real ones that cannot be brushed aside.

Under the 1965 revision bill, a commercial community system that picks up television or radio broadcasts of copyrighted material, and

(B) the secondary transmission is made solely for the purpose and under the conditions specified by clause (2) of section 109; or

(C) the secondary transmission is made by a common carrier who has no direct or indirect control over the content or selection of the primary transmission or over the particular recipients of the secondary transmission, and whose activities with respect to the secondary transmission consist solely of providing wires, cables, or other communications channels for the use of others.

(2) Notwithstanding the provisions of subsection (c), but subject to the provisions of subsection (b), the secondary transmission to the public of a primary transmission embodying a performance or display of a work is not an infringement of copyright if the secondary transmission is made by a governmental body, or other nonprofit organization, without any purpose of direct or indirect commercial advantage, and without any charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service.

(3) Subject to the provisions of subsections (b) and (c), the secondary transmission to the public of a primary transmission embodying a performance or display of a work is not an infringement of copyright if the secondary transmission is made for reception solely within the limits of the area normally encompassed by the primary transmission.

(b) CERTAIN SECONDARY TRANSMISSIONS FULLY ACTIONABLE.-Notwithstanding the provisions of subsection (c) and of clauses (2) and (3) of subsection (a), the secondary transmission to the public of a primary transmission embodying a performance or display of a work is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506, if:

(1) the content of the particular primary transmission is in any way altered by changes, deletions, or additions during its secondary transmission; or

(2) the secondary transmitter, within one month before or after the particular secondary transmission, originates any transmissions to those members of the public to whom it also makes the secondary transmission, except for no more than one transmission at any one time of whether and news reports; or

(3) the secondary transmitter, within one month before or after the particular secondary transmission, makes any separate, direct charge for any particular transmission it makes to those members of the public to whom it also makes the secondary transmission; or

(4) the secondary transmission is made for reception wholly or partly outside the limits of the area normally encompassed by the primary transmission, and

(A) the secondary transmitter, at least one month before the date of the secondary transmission, has not recorded in the Copyright Office, in accordance with requirements that the Register of Copyrights shall prescribe by regulation, the identity and address of the person who owns the secondary transmission service or has power to exercise primary control over it, together with the name and location of the primary transmitter; or

(B) the secondary transmission is made for reception wholly or partly within the limits of an area normally encompassed by one or more transmitting facilities, other than the primary transmitter, if:

(i) within that area no such facility is authorized to transmit the same performance or display of the work, and

(ii) the copyright owner has given written notice to the secondary transmitter, in accordance with requirements that the Register of Copyrights shall prescribe by regulation, at least ten days before the primary transmission, that the copyright owner's authorization is necessary for the secondary transmission.

(c) LIMITATIONS ON LIABILITY FOR CERTAIN SECONDARY TRANSMISSIONS.— (1) Subject to the provisions of subsection (b), in the following cases involving a secondary transmission to the public of a primary transmission embodying a performance or display of a work, liability of the secondary transmitter for infringement under section 501 does not include the remedies provided by sections 502, 503, and 506, and its liability for the remedies provided by sections 504 and 505 is limited as provided by clause (2) of this subsection:

(A) Where the secondary transmission comes within the scope of paragraph (i) of subclause (B) of subsection (b) (4), but the copyright owner has not given notice as provided by paragraph (ii) of that subclause; or

having received advance notice from the copyright owner. If the owner does not provide advance notice, the retramsmission would be treated as if it were in the gray area.

As for CATV operations in the gray area, the Subcommittee proposes to withhold the possibility of an injunction or stautory damages, and limit the operator's liability to a "reasonable license fee" to be fixed by the court in the absence of agreement. However, in order to induce negotiations, the proposed amendment would provide the court with discretion to triple the recovery if it finds that the infringer failed to accept a reasonable offer, or to withhold any recovery if it finds that the copyright owner had refused to accept a reasonable offer.

It should be emphasized that the Subcommittee's proposal is directed solely to a prospective solution to the community antenna problem under the general revision by the copright law. It is in not intended as the expression of any opinion as to what the present law is under the 1909 statute or as to how the courts should ultimately decide that question. With best regards,

Sincerely yours,

ROBERT W. KASTEN MEIER,

Acting Chairman for Copyright Revision Subcommittee No. 3. Mr. BRENNAN. The first witness is Mr. Abraham Kaminstein, Register of Copyrights.

Senator BURDICK. Mr. Kaminstein. Will you introduce your assistant for the record, please?

STATEMENT OF ABRAHAM KAMINSTEIN, REGISTER OF COPYRIGHTS; ACCOMPANIED BY BARBARA A. RINGER, ASSISTANT REGISTER OF COPYRIGHTS; AND ABE A. GOLDMAN, GENERAL COUNSEL, COPYRIGHT OFFICE

Mr. KAMINSTEIN. On my left is Miss Barbara Ringer, who is the Assistant Register of Copyrights and on my right our General Counsel, Abe Goldman.

Mr. Chairman, my name is Abraham L. Kaminstein and I am the Register of Copyrights. It is a privilege for me to appear again before your committee as a witness in this series of hearings devoted to one of the most difficult problems in copyright law revision: How community antenna television and similar retransmission services should be dealt with in the copyright law.

As I mentioned when I testified before you nearly a year ago, S. 1006 is the product of more than a decade of study, discussion, and drafting. Out of the many problems dealt with in the bill, one in particular did not emerge as an important issue until the last 2 or 3 years, and has become urgent only recently. That is the question of whether, in the revised copyright law, commercial community antenna television systems should be fully subject to copyright control or should be accorded special treatment. The Copyright Office, after carefully weighing the arguments put forward on both sides, concluded that what CATV is doing is a public performance that should be subject to copyright control, and we therefore drafted S. 1006 in terms of full CATV liability. In doing so, however, we were careful to point out that we were not expressing any opinion as to what the present law on the subject is, and that the problems facing CATV operators in obtaining clearances are real ones that cannot be brushed aside.

Under the 1965 revision bill, a commercial community system that picks up television or radio broadcasts of copyrighted material, and

Under H.R. 4347, as introduced, commercial CATV systems would be fully liable for copyright infringement whenever they retransmit without permission a broadcast containing copyrighted material. After extensive consideration of the arguments made during the hearings and the legal and public policy issues involved, the Subcommittee has reached agreement on certain amendments which would substantially change the bill to be recommended to the full Committee. The Subcommittee is, of course, aware that your Committee on Interstate and Foreign Commerce has been engaged in hearings and study of the problems of communications law presented by CATV activities. It has been our purpose, as far as possible, to resolve the copyright issues raised by CATV without trenching upon the area of communications problems. Because of the importance of this question and its relationship to the active consideration now being given by your Committee to measures that would define the status of CATV systems under the Communications Act, we have decided to announce our conclusions on this particular question at this time. The following is a broad simplified summary of what will necessarily be a complex statutory provision.

For the purpose of this summary, "CATV" refers to commercial services that intercept off-the-air transmissions of programs originated by others and retransmit them to paying subscribers by wire connections or the like, without altering their content, originating programs themselves, or making special charges for particular programs.

The Subcommittee's proposal would divide CATV activities, upon the basis of geographic and other characteristics, into three broad categories or "areas" which we call "white," "black," and "gray." In very general terms, the Subcommittee proposes to exempt CATV operations from copyright if they are entirely in the white area; make them fully liable if they are in black area; and subject them to limited liability in the nature of a "reasonable license fee" if they are in the gray area.

Under the Subcommittee's proposal, the white area embraces CATV retransmission solely within the radius of the area served by the primary broadcaster (in effect, its "Grade B contour") to fill in gaps or improve bad reception caused by technical interference. Example: A system operating solely within New York City and retransmitting New York City stations only.

The black area embraces retransmission beyond the area served by the primary broadcaster into an area already served by one or more other broadcasters, none of whom is licensed to carry the same program. Example: A system bringing a New York City station's broadcast of a motion picture to Philadelphia subscribers when no Philadelphia station is licensed to broadcast it.

The gray area embraces retransmissions beyond the area served by the primary broadcaster into an area already served by another broadcaster who has a license to carry the same program; or into an area not served by any primary broadcaster.

The Subcommittee believes that in the so-called white area where the CATV operation is merely a "fill-in" or "master antenna" service, operating solely within the area served by the primary broadcaster, the impact of the CATV operation is primarily to expand the audience by which the value of the copyright owner's license to the primary broadcaster is measured.

Where, on the other hand, the CATV operation occurs in a black area, i.e., where it extends into an area within which there are broadcasting facilities but the copyright owner has not granted his authorization for any transmission, the unauthorized retransmission by CATV could destroy a market and result in direct, immediate damage. Here the Subcommittee would impose full liability for infringement of copyright, including injunctive relief.

Intermediately, in the gray area situation, where the copyright owner has already licensed the use of his work in the area, or there is no broadcaster to license, there is no direct loss of market exclusivity. There is, however, an uncompensated "free ride" at the owner's expense. Advertisers will not pay for viewers living outside their area, and CATV service in these areas may keep out local broadcasters who would pay. Here, the Subcommittee believes that a reasonable license fee best meets the equities.

Beyond this allocation of different rights and remedies for the white, black and gray areas, the Subcommittee's proposal takes into account the arguments of the CATV operators as to the difficulties of obtaining advance clearances and the dangers of unlimited liability for statutory damages in this field. It proposes, with respect to CATV operations in the black area, to impose full liability only if the operator proceeds with the unauthorized retransmission after