In a regional game, we would welcome all cable systems to carry it in that region. In a national game, we would welcome all cables to carry it nationally.

But the problem comes when you have a regional game which is very vital to the NCAA schools. They are set at a certain time period. If there is another regional game on the west coast, for instance, which would be brought back to another region, there would be nowhere where the remainder of the schools or universities could play during that day in which they would not be in competition with some type of television.

I do not think that the royalty problem, as we have heard this morning, is one that we are discussing. The exception telecast, which is vital and important to many schools and universities and one which the NCAA Television Committee would like to endorse, is backfiring and forcing schools such as Ohio State not to provide cable telecast when they have sold-out games. It would be very good if they could provide local broadcasting, which we support in Columbus, but to take that signal and import it into other parts of the State of Ohio does damage to colleges and universities.

Mr. KASTENMEIER. Your statement seems to recognize, as the gentleman from California, Mr. Danielson, has suggested, the best place to resolve this question would, perhaps, be in the FCC rather than in the context of this bill-the copyright bill. Is that not true?

Mr. COPPEDGE. I do not believe we believe that, sir. There has been a problem. Our experience has been that the FCC has some doubt about their authority in this area. Any regulations the FCC issues would be subjected to court cases which would be lengthy.

I think this is such a big, public interest thing that if you do not provide specific language in the bill, then certainly some direction should be given by your committee. We are talking about a lot of schools-800 or so, or more, colleges and universities throughout the country.

It has a lot of public interest. And to date, there has been some hesitancy on the part of the FCC to put out ground rules on this subject, and I think there is some doubt about their jurisdiction.

We clearly think it is your committee who should-and that the bill should specify as a minimum, direction in which the FCC should go. if not some specific language that would limit these broadcasts.

Mr. KASTENMEIER. For purposes of historical comparison, the NFL blackout would not be affected by cable, would it? They could not invade the existing blackout, because there would be no transmission?

Mr. COPPEDGE. It is certainly a possibility of them scheduling, without damage, on a Friday night, or Saturday, and be perfectly appropriate to broadcast live in a particular area in accordance with the law.

But if that same game was transmitted into some other area, which it is likely to do, damage would occur. The illustration that I hear bantered about quite a bit among my colleagues is a signal that came out of an Atlanta game and was imported into Arkansas on a Friday night when the high schools were playing. I cannot pinpoint an illustration where one of the colleges were particularly affected, but it certainly has the potential.

If you keep up with it, as you noticed, in New York this year, because of scheduling problems in Shea Stadium, the Giants are, in fact, going to play some Saturday games during the regular season.

If these signals were imported to distant areas, it would do appreciable damage.

Mr. KASTENMEIER. Is not cable subject to the same limitations that other television broadcasting is, in that connection?

Mr. COPPEDGE. No, sir.

Mr. KASTEN MEIER. What advice would you have for us, in connection with cable telecasting of signals involving either college, high school, or professional games which interfere with colleges?

Mr. COPPEDGE. I think the specific language we would be interested in is providing the same limitations to them that are provided on overthe-air or regular telecasts. Those are clearly defined and workable.

Mr. KASTENMEIER. You would not grandfather anything, but take recognition of the fact that perhaps some cable systems have been televising with this sort of program sports events for years and all of a sudden they would have to get a prior clearance, I take it, from perhaps the NCAA or some other organization?

Mr. COPPEDGE. I do not think so. I will check with our attorney before I answer-he is more familiar with that than I am. But I do not think so there have not been a number of abuses, to date. However, the potential for abuses are tremendous, and there have been abuses--that is, Ohio State is a good example. The University of Arizona had a problem where there was a junior college championship game and about a week before the game, it was advertised in the paper that cable television was going to carry the Arizona versus Arizona State game. This forced the junior colleges to shift the schedule of the championship game to a night game, so they would not have to compete with the cable telecast--which was most detrimental to their game.

Although I have pointed out some specific illustrations, there have not been too many, but the potential damage especially in the regional games, which is of greatest concern to us, and to importing a signal in to various regions, is considerable.

Mr. THOMAS. My name is Ritchie Thomas. I am Washington counsel for the NCAA. To amplify that answer a little bit, sir, Captain Coppedge is correct that, as you know, with the new FCC rules still only 3 years old, the distant signal importation as to the systems which are now coming into being, is still in its infancy.

So, as to the problem of the spread of regional games, across regional boundaries, it has not as yet become a significant problem. So I do not think there is any problem, really, by grandfathering such a carriage because it really does not exist, substantially.

As to exception telecasts, basically the problem is that if widespread cable carriage so spreads the impact of broadcasting on other colleges and universities, that contemporaneous games are injured, we cannot make the exception telecast.

So, grandfathering in this regard would simply mean that the exception telecasts cannot be made.

Again, our position as to national telecasts and regional telecasts, as far as cable systems in the region are concerned, is that we are very happy to have cable systems carry those games, whether there is a local broadcast station which carries it, or not.

Mr. COPPEDGE. One other point, as one of the committee members who negotiates with the major broadcasting companies for the NCAA football package, if there are too many-if it happens frequently that you

have regional problems, then you cannot sell that product, besides doing damage to the gate by the teams, all the teams in that region. The product goes down in its value.

Mr. KASTENMEIER. I yield to the gentleman from California.

Mr. DANIELSON. Thank you, Mr. Chairman.

Thank you, gentlemen. Your statement is very clear and I do not really have any questions on the substance of it.

It is my understanding that you really are not anxious about royalty fees, license fees, but what you are concerned about is the damage that can be done to the institution of collegiate athletics through compelling teams to compete with television or cable broadcasts of other games which might have a great public interest, thereby cutting your gate?

Mr. COPPEDGE. That is correct. To carry it to its extreme, if you are able to do that, you would end up with 10 super teams in the country and they would be the only ones on TV all the time.

Mr. DANIELSON. Well, the economic aspect of having your gate diminished is terribly important here. That is not the only thing. A lack of attendance tends to destroy interest in the teams, and in the activities, generally.

It could have an adverse morale effect upon the entire athletic program of our colleges and universities.

Mr. COPPEDGE. Many of these so-called division 3 schools, which are the smaller athletic programs, do not even charge for their games.

Mr. DANIELSON. I also know that major schools-at least those who can come up in the black on the football, for example, or basketball— usually will use those profits to support other athletic programs intramural or intercollegiate programs which do not support themselves financially.

Mr. COPPEDGE. We support 21.

Mr. DANIELSON. In my own area, we had Occidental University in California. It used to have a fine football team. But they simply cannot compete today. They discontinued I think, starting with Chicago 30 years ago. There has been a constant attrition because of the inability to compete.

I am very sympathetic to this position. Your position is really not that much different from that of professional athletics. If we are going to have professional athletics, and public policy seems to be in favor of them, then you have got to keep the entire organism alive, not just one or two or three teams.

So, what I really think we need, Mr. Chairman, is legislation which will recognize the unique characteristics of college athletics and the unique characteristics of professional athletics, and provide a sufficient protection in the field of competition so that they can survive.

If the public policy, public interest wants this sort of activityand I am convinced they do want it-I think that that is a solution. But I really have serious doubts that copyright is the way to do it.

Maybe we should get somebody on Interstate and Foreign Commerce Committee to strengthen the jurisdiction of FCC and give them some guidelines and directions so they would come up with that kind of protection.

I am for the goals you seek. I am just, unfortunately, in doubt that this is the way to do it.

I yield back my time.

Mr. COPPEDGE. I am not a lawyer, but we have been frustrated in trying to get something done. And this certainly, to us, seems an appropriate forum.

Mr. DANIELSON. All right.

Mr. KASTENMEIER. The gentleman from New York.

Mr. BADILLO. No questions.

Mr. KASTENMEIER. Mr. Pattison?

Mr. PATTISON. No questions.

Mr. KASTENMEIER. Mr. Coppedge, we appreciate your appearance here today.

This concludes this day's hearings on the question, primarily, of cable television, section 111, and the provision of copyright, until the next meeting on July 10, public broadcasting.

The committee stands adjourned.

[Whereupon, at 5:10 p.m., the subcommittee adjourned until July 10, 1975.]

[Subsequently, the subcommittee received statements from National Broadcasting Co., Inc.; American Broadcasting Cos., Inc.; Lester W. Lindow, executive director, Association of Maximum Service Telecasters; William J. Bresnan, President, Cable Division, TelePrompter Corp.; and Times Mirror, as follows:]

STATEMENT OF NATIONAL BROADCASTING COMPANY, INC.

The National Broadcasting Company, Inc. ("NBC") respectfully requests that the following Statement be made a part of the record of this Subcommittee's hearings on the proposed bill to revise the copyright laws (H.R. 2223).

NBC operates major television and radio networks and is the licensee of five television and eight AM and FM radio stations. In that capacity, it is a large purchaser of copyrighted property owned by others, spending in 1974 over $400 million to obtain such property for broadcast use. It is also a copyright owner of some programming, primarily news and documentary programs. The proposed statute will affect NBC in both capacities.

Most of the provisions of the proposed statute tend either to codify existing law, to remove some of the uncertainty of the existing case law on copyright, or to create new rules which better reflect the substantial technological changes which have occurred since 1909, the date the last major copyright bill was enacted. One section-Section 111-expresses an extremely significant legislative policy toward cable television and copyright. Because of the importance of this Section to the communications industry as a whole, we will address most of our comments to it.

Finally, we are submitting comments on H.R. 7059, which would establish a "performance right" in sound recordings, in addition to the current rights which composers and authors have in the underlying music or literary property embodied in the recording. This provision could also have a substantial economic impact on the broadcasting industry, particularly on radio stations which are major users of sound recordings.

SECTION 111

Section 111 is significant because it establishes for the first time the principle that cable television should have some copyright liability when it retransmits television programming broadcast by existing television stations.* Since its inception, cable television has not been required to make payments to the copyright

*A critical distinction must be made between the transmission by cable of "local" broadcast signals and "distant" signals. Cable systems that merely retransmit or amplify local signals expand the potential audience for a program within the same market by delivering signals which might otherwise be blocked within the originating station's broadcast area. The low rates contained in the fee schedules of Section 111 would not, therefore, be unreasonable with respect to such activity.

We are addressing ourselves primarily to the activity involving "distant signal importation," where cable retransmits a signal from a distant market into a different market not otherwise able to receive it. This activity introduces a new program into that market and thus raises different policy considerations.

owners of such programs, primarily because of judicial interpretation of the technical wording of the 1909 Copyright Bill, drafted long before the current cable technology was even envisioned. Nevertheless, cable television is a commerical user of copyrighted property, does charge the public for the right to see such programs, and in this sense, is no different from any other user of copyrighted property. The statutory recognition of cable's obligation to pay copyright fees is thus a significant development.

Some have argued that cable should forever be exempt from copyright liability as a way of stimulating the future growth of that cable industry. This, in turn, is thought desirable because a strong cable industry is seen as adding to the diversity of entertainment programming that wlil be available to the American public, particularly entertainment intended for more sophisticated or minority tastes and interests.

We do not quarrel with the goal of diversity. However, it is difficult to see how that goal is furthered by an exemption which only encourages cable to retransmit entertainment programs that are already in existence. When cable retransmits an existing signal, it is not creating anything new and thus is not contributing to diversity.

Moreover, it is difficult to see how the constitutional objectives of copyright are furthered by such an exemption. The purpose of affording copyright protection to a literary, artistic or audiovisual work is to stimulate the creation of such property by giving their creators the opportunity to maximize their economic reward. When cable retransmits a program shown by an existing television station, particularly into markets where the program is not otherwise available, it is as much a user of creative property as the original television station which bought and paid for the right to broadcast the program. Yet, cable has not paid the owner of such a program for the right to use it in the market. This, of course, deprives that owner of revenues he might have obtained, and, at the same time, diminishes the value of any future sale he may wish to make in that market, thus defeating the basic objective of copyright.

For these reasons, we support the provisions of Section 111 which in principle treat cable equally with any other user of copyrighted property.

At the same time, Section 111 adopts a system of compulsory licensing based upon a fee schedule which, in our judgment, is so low as to represent only a token payment. We estimate that most non-network owned stations may spend as much as 42% of their broadcast revenues for programming and that the major television networks may spend as much as 80%. The MPAA has estimated that approximately 54% of broadcast revenues must be used to acquire programming. The NAB put the average at 34%. For present purposes, it does not matter which estimate is correct-under each of these estimates it is clear that the fee schedule contained in the proposed statute would obligate cable to pay an insignificant percentage of its revenues for the right to use existing programming. Moreover, the fee schedule does not adequately reflect the value that cable derives from being able to use existing television programs. There is no question that cable obtains increased penetration and profits from distant signal importation. Yet, the proposed fee schedule does not appear to take such incremental profits into account.

Thus, while the proposed statute does give some recognition in principle to the similarities between broadcasters and cable with respect to copyright liability, it does not attempt to apply that principle to anything approaching a realistic basis to carry out the objectives of that principle. As a practical matter, this deficiency may negate the beneficial public policies that are served by imposing copyright liability in the first place.

We recognize that it is not practical or wise for the Congress to become the final arbiter of prices that are usually determined in arms-length negotiations between copyright owners and users. We therefore support the concept of creating a Copyright Tribunal which would have the power to establish a more realistic and reasonable fee structure. We believe that the Congress should make clear that the fees contained in the current statute are merely a temporary starting point which can and should be reviewed promptly by the Tribunal. This would have the advantage of removing the Congress from the difficult, delicate and continuing job of fixing reasonable copyright fees and at the same time, allow for the flexibility that is needed to assure that the fee structure is, and continues to be, fair and reasonable.

The need for such flexibility should not be underestimated. The communications industry is dynamic, volatile and everchanging. No one can predict what future technological changes will occur and what relationships will emerge