Mr. KAISER. No. It is an amendment to the Federal Communications Act.

Mr. KASTEN MEIER. FCC.

Mr. KAISER. Which makes it a crime to take any measures, even peaceful picketing, even advertising, to protest the rampant firing. We had staff's all over this country. We had men engaged full-time playing in almost every community of any size in this country, wiped out, Mr. Congressman and members of this committee. We hardly have a single person who derives a steady income from radio business today.

Mr. KASTENMEIER. I am informed my time has expired. I yield to the gentleman from Illinois, Mr. Railsback.

Mr. RAILSBACK. Yes. May I ask how the schedule was prepared that appeared in the bill H.R. 5345, as far as payments. I am just curious. How was the fee schedule determined?

Mr. GORTIKOV. Originally in section 114 when the principal performance right was encompassed within the general copyright bill. It is really arbitrarily arrived at to try to give heed to insulating the tiny station from any cost impact and to have some graduated measure of application and without penalizing the radio industry with any inordinate kind of costs. So, therefore, its net effect is less than—it is about a fourth of what they currently pay composers and publishers.

Mr. RAILSBACK. How would that money be distributed or allocated. For example, you have an orchestra and you also have a performing artist. Does this money go into a pool and then is it given to each artist and the primary performer?

Mr. WOLFF. If I may, Mr. Railsback, the only definite agreements or the only definite plans are these. One, as you probably know, the moneys would be divided between the artists concerned and the record companies. That is No. 1.

Mr. RAILSBACK. On what basis?

Mr. WOLFF. Fifty-fifty. So there would be two funds, one for the production company, the people who make the records, and one for the performing artists. If on-and I believe, sir, I said this in my presentation, but I don't think you were present

Mr. RAILSBACK. I was late, yes, and I apologize.

Mr. WOLFF. Let me just give you an example. A performing artist, and I think there I used Mr. Sinatra's name again, makes a record which is played on radio, as it would be, and there are 10 musicians and 5 singers singing in the background with Mr. Sinatra. The royalty would be split 16 ways amongst those 16 performing artists that appear, that contribute to that phonograph record.

Mr. RAILSBACK. Is that set forth in the bill or is that

Mr. WOLFF. No, sir.

Mr. RAILSBACK. Or is this all by agreement?

Mr. WOLFF. No, sir. The bill merely says the moneys will be made available. The royalties will be paid.

Mr. RAILSBACK. Does it say to whom it will be paid, because I haven't had a chance to really study it.

Mr. WOLFF. Oh, yes. I think it makes clear it will be paid to the performing artists, and to the production company.

Mr. RAILSBACK. I mean, is it set forth that it goes into a fund or to a certain designated agency or fund or what?

Mr. WOLFF. Go ahead.

Mr. GORTIKOV. There is an absence of detail in H.R. 5345. In the original section 114 it was set up that the Register of Copyrights would receive these moneys and there would be developed an equitable system for distributing it and for adjusting disputes. There is a great deal of work to be done to implementing the payout. It is most likely that since we-we already have a great deal of precedents, machinery that exists through the ASCAP, BMI mode of collecting and sharing these moneys. So, undoubtedly when it came to the point of working out the system, we would rely heavily on those precedents because they are working well to create equitable distributions among the proper recipients.

Mr. RAILSBACK. I don't have much time, but may I give you a hypothetical and you can respond. Suppose you have a company that is within the range of, as advertising sponsors, more than $25,000 but less than $100,000, and that company plays a number of records, everything from rock to concertos. But they have to pay a $250 fee which goes into a fund. Who, then, is responsible for making the determination as to which artists are entitled to what benefits?

Mr. GORTIKOV. If we follow the ASCAP-BMI precedents, there is an intricate system of statistical monitoring of actual play lists of radio stations and airplay that ultimately comes up with formulas for distribution predicated on the reality of the air play that prevails. Mr. RAILSBACK. I see.

Mr. WOLFF. Mr. Congressman, I think your question-I understood your question to go a little farther, as to who would be the performing artists that participated. Is that correct?

Mr. RAILSBACK. Well, I think that has been answered-I think everybody that produces records.

Mr. WOLFF. And we have data that shows us who was on particular records. We know who the performing artists are. That is not difficult. The performing unions know that.

Mr. DRINAN [now presiding]. The time of the gentleman has expired.

Mr. Wolff, I would assume that logically the case would extend to a library collection of records and that as one European country does, at least, every author over there of a volume, of a book, gets a royalty every time the book is borrowed from the public library. Logically, I suppose your case would extend to the New York City Public Library if it loans the records.

Mr. WOLFF. No, sir. We are talking here about the broadcast of the record.

Mr. KAISER. Profitability, public performance.

Mr. DRINAN. What I am trying to get at-I am trying to get at the philosophy of the exact plight of the artist or of the person. Now, if BMI or ASCAP took a position on this, could they secure the extra 1 percent and distribute it equitably?

Mr. WOLFF. It might work very well.

Mr. DRINAN. Why don't ASCAP and BMI carry the ball?

Mr. WOLFF. Because they don't represent our people. I do-The American Federation of Television and Radio Artists and the American Federation of Musicians.

Mr. DRINAN. I recognize that, but all I say is we have inherited this bill that came here from the Senate after like 8 or 9 years and we

are trying to get out a bill and I am just trying to find out where somebody dropped the ball. I don't believe, frankly, it was political clout and economic power that did it. It has been a rational distinction made along the line, and just for the sake of myself and the other members here, what is the legislative history? Did this ever have a chance of getting into the bill? Tell us the background.

Mr. WOLFF. Yes, sir. I think Mr. Kaiser, having been present through almost the 40 years of its evolution

Mr. DRINAN. We have heard that, but why was it dropped?

Mr. KAISER. We were before this committee and we made an urgent request to have it incorporated in the basic revision bill and we-Mr. Wolff recited the result. The committee felt along with the then Register of Copyrights that there was still some-there were still some issues that were not sufficiently crystalized, and so this committee said, while we made very persuasive and cogent arguments

Mr. DRINAN. I read that, sir.

Mr. KAISER. And it was you

Mr. DRINAN. Would you answer the question?

Mr. KAISER. I am answering your question, sir. We came to you. The ball, if I may say so, was dropped by you.

Mr. DRINAN. I wasn't even

Mr. KAISER. I don't mean you personally.

Mr. DRINAN. I wasn't even in Congress.

Mr. KAISER. I mean by Congress, by the House. The ball was dropped by you. We then went to the Senate. They found the same persuasiveness in our reasoning. At least the Senate committee did. And they adopted it. That is why we are here now. We are back to you. You told us to come back to another Congress. That was 6, 7 years ago. Now we are back.

Mr. GOLODNER. Mr. Drinan, if I can, sir, Mr. Kaiser is correct. The Senate Judiciary Committee did approve section 114 and in rather strong language endorsed it. When it came to the floor, there was a jurisdictional

Mr. RAILSBACK. Would you yield? I think it was a tie vote, wasn't it? It was very close in this committee.

Mr. GOLODNER. There were some tie votes in the committee.

Mr. RAILSBACK. You left out part of the scenario.

Mr. DRINAN. That is precisely what I want to know.

Mr. GOLODNER. When it came to the floor, the Commerce Committee claimed jurisdiction and in a Commerce Committee report recommended against adoption because of the fact that the Commerce Committee did not have an opportunity to extensively study the matter. Senator Baker at that time voted with the majority of the Commerce Committee on this, but stated that,

"when it deleted section 114, insofar as it pertained to broadcasting, an amended related sections, the Committee did not pass

He is talking about the Commerce Committee

did not pass on the merits of the matter. Rather it was concerned that the short referral time made hearings impossible and precluded an in-depth consideration of the possible consequences.

This was after years of study by the Judiciary Committee and at the last minute, at the 23d hour, the Commerce Committee said it

didn't have a chance to study it and this is the reason it is not in the Senate bill today, because it was taken out. As I indicated, many Senators, including Senator Baker, agreed to take it out, not only on the substantive question, but on the procedural question.

Mr. DRINAN. Has the Commerce Committee done anything about it since?

Mr. GOLODNER. NO.

Mr. DRINAN. Have you people been back to them?

Mr. GOLODNER. Yes, sir.

Mr. DRINAN. Just tell

Mr. GOLODNER. We have asked for a hearing.
Mr. DRINAN. And what-

Mr. GOLODNER. We are having a hearing tomorrow again in the Judiciary Committee and in the Commerce Committee as far as we have been told the AFL-CIO-we will wait and see again what happens, what you people do, and what the Judiciary Committee does, and then it will decide what it will do.

Now, this has been going on unfortunately for years, years and years, and nobody yet has addressed this substantive question except insofar as your own committee did in 1966 in which it admitted or not admitted but stated, rather, that there were no persuasive arguments opposed to what we are saying, yet at that time it was premature and that was 8 years ago.

Mr. DRINAN. Well, Mr. Kastenmeier, our distinguished chairman, is the only survivor of that particular committee, so you will have to educate us all over again.

Mr. KAISER. That ought to be a lesson to you.

[Laughter.]

Mr. DRINAN. All right, Mr. Chairman, my time has expired.

Mr. KASTENMEIER [now presiding]. Thank you. I don't know what lesson-I yield to the gentleman from New York, Mr. Pattison.

Mr. PATTISON. I thank the panel for being here with us today, particularly my old friend John Hightower, whose career in the promotion of American cultural interests is well-known, at least to me, and Mr. Bikel, whom I have heard on a number of occasions at various folk festivals, and can attest to the truth that each performance is a separate, unique creative thing. And I thank him for being here and for his art.

Mr. DRINAN. Should he be compensated for every single one?
Mr. PATTISON. Not the folk festival.

I am interested in the question that was raised by the gentleman from Massachusetts and perhaps Mr. Gortikov could respond to that. Is it not true that an ASCAP kind of organization will have to be set up and that the reason that ASCAP, BMI, et cetera, cannot do that is for antitrust reasons? Would it not violate the consent decree, or maybe that is not the problem.

Mr. GORTIKOV. I can't speak to a possible violation of consent decree. We have counsel here, if you are interested in that aspect.

But, certainly, in response to the forward part of your question. some entity for collection would have to be set up, if it wereMr. PATTISON. For distribution.

Mr. GORTIKOV [continuing]. For the collection and distribution of the royalties. If there were no legal prohibitions, perhaps ASCAP or

BMI might be interested in being that collection entity merely because they are doing processes and have procedures and mechanics for doing it. We haven't approached it, because it would be premature.

Mr. PATTISON. No point in setting up such a mechanism until the fund is available.

Mr. GORTIKOV. Correct.

Mr. PATTISON. All right. Do any of you have a proposal of thoughts about the permanence of the fee? You know, there are proposals for various other parts of the bill, for a tribunal, and for setting the fee by tribunal with a reference back to the Congress. Is that part of your proposal?

Mr. GORTIKOV. The language of this bill says that this fee shall prevail for no less than 2 years. It sets-it puts the onus, the responsibility on the parties to negotiate any change, if there is to be any change. And if the parties fail to agree, there is an arbitration machinery set up within this bill to accomplish this. It is quite parallel to the prevailing mechanism under which ASCAP, under which the publishers and composers set their amounts, although it isn't precisely the fact. Mr. PATTISON. Except this is a compulsory license.

Mr. GORTIKOV. Correct.

Mr. PATTISON. And the ASCAP is not.

Mr. GORTIKOV. Correct.

Mr. PATTISON. Would the industry-would the performers be satisfied with a bill that did not contain that kind of fee for setting or fee changing mechanism, or leave it to the Congress, from time to time, to relook at that?

Mr. GORTIKOV. I can't speak for the performers. I could speak for the companies and I could say that we are primarily interested in the right, if the rate can be improved on or reviewed and could be the subject of negotiations with the parties, we would be more than happy if that is the wish of Congress to approach it that way.

Mr. WOLFF. If I may chime in, we have unanimous approval from the performing unions that if this is the kind of legislation that is deemed proper, that we would be in agreement that Congress can, from time to time, make the changes and that be the mechanism as far as changes in rates up or down are concerned.

Mr. PATTISON. Particularly in view of the fact that it is based on a percentage.

Mr. PATTISON. I have no further questions.

Mr. KASTENMEIER. I have just one or two questions.

I take it that while we are principally talking about music, 99 percent of what is performed, the records, will be music, it isn't limited to music. A dramatic reading by Mr. Bikel or a recording would be covered.

Mr. WOLFF. We would hope it would be included and it is in the bill. I know it is in the bill, but I would hope that nobody would consider the rights of a singer to be more important than the rights of a performing actor or actress.

Mr. HIGHTOWER. Also, Mr. Chairman, if I might add one thought, also the dancers would be covered, should the development of the