grams would not be jeopardized by the development of CATV systems in a manner which did not take into consideration the requirements of the UHF station.

Our proposal actually is to conduct hearings on applications for CATV systems in these larger markets, to get a basis on which to make a judgment as to what the impact on UHF would be. At this point we are only able to say that there are indications, there are reasons to feel that this may be a serious problem.

We actually have not conducted hearings in any particular case, and we do defer our judgment on that until we have examined the facts in a particular case.

Senator BURDICK. Senator Hart, any questions?

Senator HART. No.

Mr. HYDE. I have been reminded by counsel here that I mentioned only three established networks, and I did say that UHF stations would probably be dependent upon independent programing. In doing this, I overlooked the fact that there is a proposal underway, in fact it is beyond being a mere proposal. An effort is being made to organize a fourth network.

Senator BURDICK. That was my question. Might some day down the road UHF have its own network?

Mr. HYDE. There may very well be. I hope that there will be another network.

Senator BURDICK. But you still have these complicated situations. Mr. HYDE. We do.

Senator BURDICK. Between UHF, VHF, and now CATV.

Mr. HYDE. That is right, sir. Our whole effort has been to provide a reasonable accommodation between the requirements of television of the conventional kind, and the requirements of CATV systems to give the public the benefit of both so far as we can.

Senator BURDICK. We talked about the "white" and "black" areas. Do you recognize any "gray" area?

Mr. HYDE. Oh, there is always a "gray" area. Nothing is ever either "black" or "white."

Senator BURDICK. You spelled out the "white" and agreed the rest of it is "black," but do you think any of it is slightly "gray"?

Mr. HYDE. Well, I mentioned the areas where there would be two services, and we thought that the public would demand and should have access to more than just two services. I suppose this could be a "gray" area.

Senator BURDICK. That is something for us to work out.

Mr. HYDE. Yes, sir, and we will be very glad to assist you in every way we can. Our professional staff will be at your service.

Senator BURDICK. Mr. Brennan.

Mr. BRENNAN. Thank you, Mr. Chairman. Mr. Hyde, in the underserved areas to which you made reference, would you agree that in order to assure the public access to the variety of television programs that it would be advisable to have a requirement for compulsory licensing or a statutory fee schedule?

Mr. HYDE. I did suggest in my statement that the committee give consideration to the problem of making additional programs reasonably available to residents of such areas. I should say compulsory licensing along the lines mentioned by Mr. Kaminstein might be appropriate for that purpose.

Mr. BRENNAN. If the CATV system is required to pay copyright fees, do you believe there should be any restrictions upon their local live originations of programs?

Mr. HYDE. The Commission hasn't really discussed the situation as you put it. When the Commission made its presentation to the House, it had under consideration the conditions at the moment under which CATV's operate largely outside any copyright limitations which might be found later to apply, and what the Commission had in mind was an operation where a CATV system paid no copyright fees, and yet might undertake to present local originations in competition with the local station, in what the Commission thought would be an unfair competitive situation so the Commission thought that the CATV system should not originate programs except local news and weather, which were mentioned in the Commission's statement to the House.

There was also the possibility of the Commission on a case-by-case basis granting waivers or exemptions for local public service. This type of thing, as you well recognize, does not cover, oh, creative works, films, the sort of thing that the local station might compete for in a program market.

Also the Commission felt that there were rather compelling public interest considerations which would justify the community antenna system carrying local originations of the kind that I have mentioned, notwithstanding the general prohibition.

Mr. BRENNAN. Thank you.

Senator BURDICK. I think I will ask you the same question I asked Mr. Kaminstein. What is the rationalization or justification for granting exemption at all if the copyright is a property right?

Mr. HYDE. Well, my answer would have to be that some reasonable compromise which would give just and reasonable recognition to the copyright owners' ownership interest, and give appropriate recognition to the right of the public to hear and see his product. We think this is a matter in which Congress might very well provide for a just compromise.

Senator BURDICK. You predicate your answer on the public interest. Mr. HYDE. I do, sir.

Senator BURDICK. In certain areas.

Mr. HYDE. I do, sir.

Senator BURDICK. Senator Hart, any questions?

Senator HART. No. I promised I wouldn't ask a question today until I understood what the subject was all about and I still don't. But this general assumption that where there is a series of competing interests among private parties, let Congress resolve it, assumes that Congress can more prudently negotiate this than the parties themselves. Why not let them have a fling at it? Now admittedly, I ask this from an enormous background of ignorance.

Mr. HYDE. Well, I hope I haven't given the impression that I think the whole problem should be tossed in the lap of the committees in Congress, without some advisory assistance from the Commission. Actually, we have endeavored to be of assistance here in terms of calling attention to considerations which we think should be recognized in the legislation, and we will help with the details of undertaking the formulation of provisions of law.

Senator HART. I wasn't by implication referring to a role the Commission might play, not even having caught up with your statement yet, but I want your counsel. Just coming in here late and listening to the exchange, again I understand and I was encouraged by our subcommittee chairman's question-that the law of copyright has developed a concept of the right of property.

Mr. HYDE. Right.

Senator HART. The copyright law, I take it, on some occasions makes exemptions. I take it that the exemptions on behalf of CATV would be that the fellows that argue for it would bear the burden of proof. Your Commission has issued a rule as to carrying this locally.

Mr. HYDE. Yes.

Senator HART. And this creates a problem. Now, having recognized the problem, why is it that you suggest, as I understood you to do, that the way best to resolve it is for Congress to write some formula rather than saying to the parties, "Here again you have a problem with respect to the handling of a property right. Go ahead and handle it."

Mr. HYDE. I would give two answers if I may. In the first instance, of course, I refer to the public interest, and there are many instances where a Government agency must endeavor to point out ways and means of protecting this interest which may not necessarily evolve from the competition between contending parties.

I should also like to state-and this is the second part of my answerthat the Commission became concerned with CATV regulation when the competition between the parties seemed to break down, and when it failed of its purpose. Actually, the community antenna system first beginning just as an assist, an antenna system, burgeoned into a distributing system, and as I point out in my statement, became involved in the carriage of programs from city to city, without regard to the normal distribution system.

The Commission really was brought into the act when community antenna systems came to the Commission applying for licenses for microwaves to carry these programs from one city an another. When we would issue a microwave authorization, we would have to find that the operation would serve the public interest, convenience, and necessity.

Well, how could we find that this served public interest, convenience, and necessity if the resulting operation had an adverse impact upon the normal competitive system where the copyright law had failed to provide protection? This is in general terms the basis on which we got into it, and the reason which I have given was our overall concern for public interest.

Senator HART. I am sure it will be helpful to me as I continue to read these statements that I missed.

Mr. HYDE. This is a most complicated subject. You will find yourself regulating the transmission of programs to people who are hungry for them. You can be very reluctant about any interference with the distribution of an eagerly sought service. On the other hand, you must be concerned about the service being delivered in a way that will not be disruptive or destructive of other service which the public needs. Senator HART. Thank you.

Senator BURDICK. And the reason why the matter is of immediate concern I presume is because of the decision of Judge Herlands.

Mr. HYDE. Judge Herlands' decision has introduced a very important new consideration in it. Our regulations were issued prior to his decision. As a matter of fact, they were issued when it didn't look very hopeful that we would have any change in the situation then existing under which CATV operated, seemingly in complete disregard of copyright considerations.

Senator BURDICK. Do you know whether that case is on appeal to the circuit court?

Mr. HYDE. I am told that it is on appeal.

Senator BURDICK. Thank you, Mr. Hyde, for your testimony. Senator Fong?

Senator FONG. I am sorry I was not here to listen to your testimony. I will read your testimony.

Mr. HYDE. Thank you. Thank you, Mr. Chairman.

Senator BURDICK. Mr. Frederick Ford, president of the National Community Antenna Television. Will you introduce your associates. STATEMENT OF FREDERICK W. FORD, PRESIDENT, NATIONAL COMMUNITY TELEVISION ASSOCIATION, INC.; ACCOMPANIED BY ALFRED R. STERN, CHAIRMAN, BOARD OF DIRECTORS; AND E. STRATFORD SMITH, SPECIAL COUNSEL, NATIONAL COMMUNITY TELEVISION ASSOCIATION, INC.

Mr. FORD. Mr. Chairman, on my right is E. Stratford Smith, who is the special counsel to the National Community Television Association, and on my left is Mr. Alfred R. Stern, who is the chairman of the Board of Directors of the National Community Television Association.

Mr. Chairman, members of the subcommittee, my name is Frederick W. Ford. I am the president of the National Community Television Association, Inc., which is composed of approximately 945 member CATV systems serving roughly 70 percent of the total CATV subscribers in the Nation, and 85 associate members who are engaged in manufacturing, in supplying CATV equipment, or in related activities.

On June 24, 1965, I, together with other representatives of the CATV industry, presented testimony on H.R. 4347 to Subcommittee No. 3 of the Committee on the Judiciary of the House, which is contained in the printed record of those hearings. The legislation now being considered by this committee is identical to that upon which those hearings were held, and since that testimony was presented at great length, it seems a waste of the committee's time to again request that they listen to such an extensive presentation on exactly the same subject. Therefore, I would like to ask that the committee incorporate by reference that testimony in order to avoid its repetition here. Senator BURDICK. Without objection it is so ordered.

Mr. FORD. That testimony is found on pages 1241 to 1332 in part 2 of the hearings before Subcommittee No. 3 of the Committee on the Judiciary, House of Representatives, on H.R. 4347. If the committee so desires, I would like to present copies of the statements of each of the witnesses who testified in behalf of the CATV industry

at that time. Those witnesses, in addition to myself, were: Don Corbitt, Arizona Television Association; Tom Creighton, Texas Community Antenna Television Asosciation; Clifton W. Collins, general counsel, Pacific Northwest Community Television Association, Inc.; Thomas J. Whyte, on behalf of the West Virgina & Mid-Atlantic Community Television Association; Robert K. Weary, president, Oklahoma-Kansas Community Television Association; Alfred F. Dougherty, on behalf of the Montana Cable Television Association; and George J. Barco, on behalf of the Pennsylvania Community Antenna Television Association, Inc.

The first community antenna was installed on an experimental basis at Astoria, Oreg., in 1949. The first commercial systems were placed in operation in the mountainous areas of Pennsylvania in late 1949 and early 1950. Today, there are approximately 1,700 CATV systems serving more than 6 million viewers. Some 150 community antenna systems have the facilities to originate programs in local studios. This number is not large but the trend in the direction of furnishing such additional services is increasing, particularly in the field of local public service programs, such as programs on civic and local governmental problems. For a more complete statement of the communications gap which CATV systems can fill, I would like to submit as an exhibit an address which I delivered to the recent convention of our association on June 27, 1966.

CATV systems receive from 1 to 11 stations with the average being about 4. The five-channel system is the most common, representing about 37 percent of the systems and 39 percent of the subscribers. The number of systems is growing rapidly. There are about 1,400 franchises for CATV systems which are not yet operating, and another 1,400 cities are considering franchise applications. Thus, in all, there is in existence, authorized and under consideration CATV systems in some 4,500 communities in the United States.

There have been several significant occurrences between the presentation of the testimony before Subcommittee No. 3 of the Committee on the Judiciary of the House, and the statement that I am delivering today which have affected the industry, its posture and position with respect to copyright. Among these are:

1. The opinion of Judge William B. Herlands of the U.S. District Court for the Southern District of New York in the case of United Artists Television v. Fortnightly Corporation, holding that reception by community antennas for viewing in private homes of broadcasts embodying copyrighted works, without authorization of the copyright owner, is an infringement of those copyrights;

2. The Federal Communications Commission has asserted jurisdiction to regulate all community antenna systems; and

3. Acting Chairman Kastenmeier of Subcommittee No. 3 of the Committee on the Judiciary of the House has announced substantial modification in the provisions of H.R. 4347, an identical bill with S. 1006, as they apply to CATV.

The bill before you today would confirm the very broad liability imposed by Judge Herlands in his decision, and would, in effect, place the community antenna television industry at the mercy of the copyright owners. It would require CATV systems to obtain copyright clearance for each program they received and distributed to the public