Senator BURDICK. And a "mixed" area? Mr. KAMINSTEIN. Right now under Judge Herlands' decision, the entire area is "black." Senator BURDICK. I understand that. Brennan, do you have any questions? Senator McClellan? Mr. Mr. BRENNAN. Yes, Mr. Chairman. Mr. Kaminstein, it would be helpful to the subcommittee to get your comments on some of the issues that will arise in the course of these 3 days of hearings. Does the Copyright Office have any objection in principle to a statutory requirement for the compulsory licensing of copyrights when this is deemed to be in the public interest? Mr. KAMINSTEIN. The present statute already contains a compulsory licensing provision, and as I have indicated, the House committee proposal contains a provision which, in effect, amounts to a compulsory license. I see no objection to its use in this way. Mr. BRENNAN. You testified last year in support of a compulsory licensing requirement with respect to musical recordings. Would you not agree that there is a greater public interest in assuring the public access to a larger number of TV channels than with respect to multiple recordings of the same composition? Mr. KAMINSTEIN. My answer to that would be qualified. I think these matters are so important, reaching over into both copyright and communications areas, that they must be considered in the light of the particular situation. This is what the House committee proposal tries to do, to consider the equities in particular situations. Mr. BRENNAN. But you do recognize that there is a public interest in having access to a variety of TV stations. Mr. KAMINSTEIN. Certainly. I think the House committee proposal leads in that direction. Mr. BRENNAN. Is there any objection in principle to a statutory rate or fee schedule? Mr. KAMINSTEIN. I think there is. A compulsory license provision has to be used in a very guarded fashion, that is, only when it is absolutely necessary. When you establish a statutory rate, you face a host of problems. One is that the statutory rate will be fixed for a great number of years. For example, the present provision in the 1909 statute as to musical recordings has remained at 2 cents for more than 57 years now. In addition, when you try to fix a total rate for all works used, you face all the problems of distribution, which in some cases may be insurmountable. Senator BURDICK. I have just one last good question. If a copyright is a property right, a property interest, why is any use of that right permitted without consent of the owner? Mr. KAMINSTEIN. Senator Burdick, I think you will find that some of the witnesses will argue that any use is an infringement of their property right. My own feeling is that we should be a little more flexible than that, and the present statute does bend in that it contains a compulsory license provision with respect to records. Senator BURDICK. I want your reasons why. Mr. KAMINSTEIN. Why it should be? Senator BURDICK. Yes. Mr. KAMINSTEIN. Well, in considering the 1909 law, a great part of the hearings at that time were devoted to trying to arrive at a compromise in giving the copyright owner of music the right to record his music for use on piano rolls and phonograph records, while giving all recording companies access to the music recorded by any one of them. As I indicated to Mr. Brennan, a compulsory license provision should be used very sparingly, but I think it has its uses and should be available in crucial situations. I don't think this is an absolute right, and I don't think it can be treated as such in this situation. Senator BURDICK. That is your answer, that it is not an absolute right. Mr. KAMINSTEIN. That is right. Senator BURDICK. Thank you. Mr. KAMINSTEIN. I think the Congress has the ability to adapt it to a particular situation. For example, in the "white" area, the market of the copyright proprietor is being broadened in the area for which his right is sold, so that there is no real damage. Senator BURDICK. There is no damage, but he has a right that has been used. Mr. KAMINSTEIN. In theory I think that is absolutely correct. Senator BURDICK. And I am trying to get the rationale for saying that it shouldn't apply in all cases. Mr. KAMINSTEIN. I certainly agree that it should not apply in all cases. I think a compulsory license should be used only in crucial cases where no other agreement or compromise can be arrived at. Senator BURDICK. Thank you very much. The next witness is Mr. Rosel H. Hyde, Chairman of the Federal Communications Commission. Would you introduce your associates also for the record? STATEMENT OF ROSEL H. HYDE, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION; ACCOMPANIED BY HENRY GELLER, GENERAL COUNSEL, AND ARTHUR STAMBLER, LEGAL COUNSEL TO THE CHAIRMAN Mr. HYDE. I have at my right Henry Geller, General Counsel to the Federal Communications Commission, to my left Arthur Stambler, Legal Counsel to the Chairman. My name is Rosel H. Hyde, Chairman of the Federal Communications Commission. I appreciate this oportunity to present our views concerning the proposed revision of copyright law in the area of community antenna television-CATV-which is an active currently subject to comprehensive Commission regulation. The Commission has long recognized that, for reasons I shall develop, copyright is a key factor in the community antenna television field. The relationship between CATV and television broadcasters under the Communications Act has been one of the most important and most difficult problems facing the Commission in recent years. The Commission's CATV program, set forth in our second report and order of March 8, 1966, represents what we believe to be an effective 69-173 0-67—2 compromise of the divergent views of the several Commissioners as to the need for Commission regulatory direction of CATV development under present circumstances, namely, with no definitive, settled copyright requirements. However, there is far greater unanimity in the Commission that copyright considerations should play an instrumental role in the CATV field and that the resolution of the copyright problem may have a most significant effect upon the CATV regulatory program which we have recently adopted. In this light, I believe it would be helpful to the subcommittee if I were to first provide a summary of our CATV rules and policies which will serve as a backdrop for my subsequent comments on the copyright issue itself. The Commission has given the matter of CATV intensive study over recent years and has conducted a number of public rulemaking proceedings. Our second report and order provides rules to govern the operation of all CATV systems. The report is a lengthy one and the regulations complex. Rather than attempting to set forth its full details here, I respectfully request that the second report be incorporated in the record, and I will here only briefly point up some highlights of the report, particularly as they relate to the copyright question before you. Senator BURDICK. Without objection, that will be done. (The report follows:) [From the Federal Register, Mar. 17, 1966] [P. 4540] [From the Federal Register, Mar. 17, 1966] [March 17, 1966] et Nos. 14895 and 15233. These have to do with color duplication, educational television stations, station-owned trans Title 47-TELECOMMUNICATION lators, and a possible transition period Chapter I-Federal Communications Commission [Docket Nos. 14895, 15233, 15971; FCC 66-220] PART 21-DOMESTIC PUBLIC RADIO SERVICES (OTHER THAN MARITIME MOBILE) PART 74-EXPERIMENTAL, AUXIL- PART 91-INDUSTRIAL RADIO Community Antenna Television In the matter of amendment of Subpart L, Part 91, to adopt rules and regulations to govern the grant of authorizations in the Business Radio Service for microwave stations to relay television signals to community antenna systems, Docket No. 14895; amendment of Subpart I, Part 21 to adopt rules and regulations to govern the grant of authorizations in the Domestic Public Point-toPoint Microwave Radio Service for microwave stations used to relay television broadcast signals to community antenna television systems, Docket No. 15233; amendment of Parts 21, 74, and 91 to adopt rules and regulations relating to the distribution of television broadcast signals by community antenna television systems, and related matters, Docket No. 15971 (RM Nos. 636, 672, 742, 755 and 766). 1. On April 23, 1965, the Commission issued a notice of inquiry and notice of proposed rule making in Docket No. 15971 (30 F.R. 6078), which divided the proceeding into two parts. In Part. I the Commission reached an initial conclusion that it has jurisdiction over all community antenna television (CATV) systems, whether or not microwave facilities are used, and proposed to extend to nonmicrowave CATV systems the substantive provisions of the carriage and nonduplication rules adopted for microwave-served CATV's in Docket Nos. 14895 and 15233. First report and order in Docket Nos. 14895 and 15233, 30 FCC 683; memorandum opinion and order in Docket Nos. 14895 and 15233, 1 FCC 2d 524. Part I also invited comment on various auxiliary questions affecting all CATV's which were not resolved in Dock before the carriage provisions are made fully applicable to existing CATV systems with limited channel capacity (notice, pars. 33-36). 1 2. In Part II of the proceeding the Commission initiated an inquiry looking toward possible rule making on broader questions posed by the trend of CATV development, including (1) the effect of CATV entry into major cities on UHF independent stations,. (2) the possible need for limitations on the distance a station's signal may be extended by CATV, (3) "leap-frogging," (4) program origination or alteration by CATV and the related question of Pay-TV or combined CATV-Pay-TV operations, and (5) various miscellaneous questions. In paragraph 49 of Part II the Commission adopted an interim policy, pending the outcome of the proceeding, which provides that a microwave application to serve a CATV system in a community with four or more commercial channel assignments and three or more stations in operation (or with at least two stations in operation and one or more stations authorized or applied for) must be accompanied by a clear and full showing that in the particular circumstances a grant would not pose a substantial threat to the development of independent UHF service in the area. A like showing was required for microwave facilities to serve a CATV system in an "overshadowed" community where, because of its proximity to three or more existing stations, any new UHF station would be independent in operation. In paragraph 50 of Part II, the Commission proposed an interim rule along similar lines to govern nonmicrowave CATV entry into such areas. 3. Comment on Part I and paragraph 50 of Part II was due at an earlier date than that specified for the remaining portions of Part II, which, it was anticipated. would require more lengthy 1 "Leap-frogging" means the distribution by the CATV system of more distant signals in preference to signals of stations located much closer to the system. * Comments and reply comments on Part I and par. 50 were originally due on June 25 and July 26, 1965, respectively. By orders issued on June 16 and June 30, 1965, these times for filing were extended to July 26 and Sept. 17, 1965. Formal comments and/or reply comments have been received from the parties listed in the attached Appendix A. In addition, a large number of informal comments or letters from members of the public have been received and placed in the docket. consideration and possibly a further notice to afford an opportunity for comment on any specific rule proposals of the Commission (notice, pars. 64, 68). Comments and reply comments on Part I and paragraph 50 have now been fully considered by the Commission. This report and order deals only with these aspects of the proceeding. PART I. THE CARRIAGE AND NONDUPLICATION PROVISIONS 4. In proposing that the substantive provisions of the carriage and nonduplication rules governing microwave CATV systems be extended to all CATV systems, the notice emphasized (pars. 27, 30) that two main issues were presented: (1) Whether the Commission can appropriately proceed on the basis of its present statutory authority and (2) whether any special problems of substance or procedure are posed by rules going to nonmicrowave systems. We turn now to a discussion of the first issue. 5. The threshold jurisdictional question is twofold: (a) Whether the Commission has jurisdiction as a matter of law over nonmicrowave CATV systems under the present provisions of the Communications Act and (b) whether it would be appropriate to exercise any such jurisdiction without a legislative enactment on the subject. In the notice we concluded initially, for the reasons set forth in our memorandum on jurisdiction attached to the notice, that CATV systems are engaged in interstate communication by wire to which the provisions of the Communications Act are applicable (secs. 2(a) and 3(a), 47 U.S.C. 152(a) and 153(a)). It further appeared to us that the Commission's statutory powers, particularly under sections 4(i), 303 (f), (h), and (r), include authority to promulgate necessary and reasonable regulations to carry out the provisions of section 1 and 307(b) of the Act and to prevent frustration of the regulatory scheme by CATV operations, irrespective of the use of microwave. However, we pointed up the following matters (par. 31 of the notice): While we have initially concluded that we have jurisdiction, we would carefully consider comments addressed to this aspect. The attached memorandum presents the case for jurisdiction-a strong one in our viewand is set out in order to afford interested parties a full opportunity to direct their comments to that case. Second, we adhere to our position that clarifying legislation would be desirable, and have no intention of bypassing congressional action in this field. We are clearly concerned here with new and important questions of policy and law in the communications field. That being the case, the Commission would welcome (1) a congressional guidance as to policy and (11) congressional clarification of our authority, which would lay the troublesome jurisdictional question at rest. It is our understanding that hearings will shortly commence. The information gathered in this proceeding will, we think, be of assistance to the Congress in its consideration of the matter. In short, by instituting this proceeding, we shall gather essential data, both for the Commission and the Congress, and will have conserved valuable time and be in a position to take final effective action in either of two eventualities: (1) Congress has enacted legislation in this field which does not preclude the Commission from promulgating rules along the lines of those adopted in Docket Nos. 14895 and 15233; or (2) no legislation is forthcoming, and the comments in the rulemaking proceeding lead to the conclusion that the Commission does have present jurisdiction to extend the substantive provisions of the rules adopted in the above dockets to all CATV systems, whether or not they use microwave facilities. In the latter event, we would be remiss in our statutory duties if we had failed to exercise, without undue delay, our existing jurisdiction and authority to promote a public interest in this important area. The rule-making proceeding instituted by this notice will thus be conducted concurrently with legislative consideration, with final Commission decision withheld for an appropriate period to afford Congress an opportunity to act. 6. Following the issuance of the notice, H.R. 7715 was introduced in the House on April 28, 1965, and hearings on the bill were held before the Subcommittee on Communications and Power of the House Committee on Interstate and Foreign [P. 4541] Commerce in May and June 1965. In the Commission's testimony concerning the bill, it was stated that the Commission did "not contemplate applying any new rules that we may enact with respect to the rest of the CATV industry until 1966, in other words, until at least after this session of Congress is over and it has had the ability to consider this problem." (Hearings before the Subcommittee on Communications and Power of the House Committee on Interstate and Foreign Commerce on H.R. 7715, 89th Cong., 1st sess., p. 25.) No bill relating to CATV has been introduced in the Senate, and the 89th Congress adjourned its 1st session without enacting any legislation on CATV. 7. We think it appropriate, therefore, to take up without further delay Part I and paragraph 50 of the rulemaking proceeding. Here we note that CATV is developing and expanding at a very rapid rate (see pars. 31-39 within). We cannot ignore the increasing risk of adverse impact on the "public interest in |