munication of information" much of this programming "indistinguishable from a good deal of commercial programming." (H. Rept. 93-83, p. 42).

(iii) In his comments, made several years ago, the Register also noted "the large audiences (such programming) is now reaching, (and) the vast potential audiences that are awaiting it." (ibid) Indeed, much of public broadcasting's programming is aimed, no less than commercial stations, at building and reaching large audiences. The MONTY PYTHON show and UPSTAIRS-DOWNSTAIRS are not classroom instruction; they were bought by U.S. public broadcasters at substantial prices because they would "sell to audiences."

(iv) Public broadcasters and producers spend large sums of money to create many of their programs. According to its 1974 Annual report, the Corporation for Public Broadcasting distributed $48 million dollars in grants and awards in that fiscal year. Large sums also were received from giant foundations, business corporations and other public sources. The total program cost of the series FEELING GOOD was $7.1 million, the Report tells us, for 26 segments; and it informs us that the total cost of THEATER IN AMERICA was $2.4 million, for NOVA $1.03 million (p. 8).

(v) Several programs are heavily financed by large business corporations who act like sponsors, and derive the same benefits they obtain from underwriting (i.e. "sponsoring") commercial television and radio programs [See Par. 4 (iii)}. (vi) Public television and radio do not broadcast the work of amateurs. Their programs are created and produced by professionals-executives, directors, producers, writers, actors and technicians who are well paid for their services. For example, the elaborate production facilities and headquarters of National Public Radio, vastly out-stripping those of most commercial radio stations, are operated by a large staff of well-compensated professionals.

(vii) As is indicated below, public broadcasting negotiates on a voluntary basis for the services of its employees, including those who create program materials; for the programs it leases from domestic and foreign television producers; for the films it leases from motion picture companies; and for the myriad of other facilities, goods and services it requires.

(viii) Public broadcasting copyrights its programs and exploits them in many marketplaces; e.g. it distributes tapes and film recordings for non-theatrical exhibition, for cable origination and for foreign broadcasting; it sells cassette recordings of radio programs.

5. THE SCOPE OF THE "NOT-FOR-PROFIT" EXEMPTION IN THE PRESENT COPYRIGHT LAW Proponents of the Mathias Amendment argue that public television and radio enjoy a blanket "not-for-profit" exemption under the present Copyright Act which permits them to use books and other non-dramatic literary works without permission or payment. This is not the case.

(i) The "not-for-profit" limitation on the author's right to read or deliver his work [Sec. 1(c)] dates back to 1909 when a live reading might reach an audience of a few hundred, at most, in an auditorium or lecture hall. No one foresaw that a live reading could reach an audience of hundreds of thousands or millions if done on public television or radio stations, or networks.

(ii) The present Copyright Act does not impose a "not-for-profit" limitation on the author's right to make a recording or transcription of his book or other literary work, by which it may be delivered or presented. His permission and compensation are required, whether the recording is made by a "for-profit" or "not-for-profit" organization. Most of the material broadcast by public stations consists of recorded programs. And for the most part, such a recording is not the transcription of a live program created by the station-placed on tape simply to permit its broadcast at a later time. On the contrary, the vast majority of these recorded programs are created by production centers, individual stations or independent producers for distribution to many public broadcast stations. They are created by one production entity for future broadcast by many other stations just as motion picture companies or independent commercial television producers produce on film or tape such recorded works as motion pictures, television series, television documentaries, game shows and other "recordings"-for syndication to independent commercial stations, sale or lease to the three commercial networks, and for dissemination to public and instructional broadcasting stations. Authors and publishers believe that both the letter and spirit of the present Copyright Act require that their permission must be obtained now to make use of their works in such recorded programs. And public and instructional broadcasting producers do request and receive these permissions, voluntarily, at very modest fees.

(iii) It is highly doubtful that some public broadcasting stations, and many programs, qualify as "non-profit" for the purpose of those provisions of Sec. 1 which are subject to a "not-for-profit" limitation. Many programs are heavily financed by business concerns who act like "sponsors", and derive the same benefits they obtain from underwriting (i.e., sponsoring) commercial television and radio programs. EXXON, MOBIL, XEROX, IBM and other industrial giants make no secret of their financing of public broadcast programs. In addition to "credits" on the programs, they purchase newspaper advertising announcing their financial support, so the public will know it should be grateful to them for the programs. This, as Newsweek has noted, is the earliest and still one of the most effective forms of broadcast advertising. It wins the good will of potential customers without alienating some of them as "hard-sell" commercial would (NEWSWEEK, Dec. 2, 1974; p. 92). As to the effect of sponsorship on the not-for-profit limitation, see: Associated Music Publishers, Inc. v. Debs Memorial Radio Fund, Inc. 141 F.2d 852 (2d Cir. 1944); Rohauer v. Killiam Shows, Inc., et al. 379 F. Supp. 723 (SDNY, 1974).

(iv) Elimination of the "not-for-profit" exemption for a live reading of a literary work on public television or radio is not, therefore, the drastic change which some Mathias-amendment proponents claim. Thus, the House of Representatives and the Senate have approved the change, as did the Copyright Office. It should also be stressed that Sections 1(b) and 7 of the present Copyright Law now prevent any public broadcaster from dramatizing a literary work or adapting it into a television documentary or other program.

6. AUTHORS WILL BE THE VICTIMS OF COMPULSORY LICENSING

Most established authors of novels, poetry, biographies, current histories and other works of general interest own the rights to use their books in television, radio and motion pictures and receive all the income from such uses. Even where the publisher is authorized to license these rights, most of the income is paid to the author. So far as these types of books are concerned, authors rather than publishers would be the principal victims of a compulsory licensing system for literary works.

7. UNAUTHORIZED USES UNDER COMPULSORY LICENSING WOULD SERIOUSLY INJURE AUTHORS AND PUBLISHERS

Even public broadcasting spokesmen have recognized that unauthorized dramatizations, or adaptations of books on documentary programs, could inflict great economic damage on authors and publishers. Such expropriations, or the possibility of them, would prevent authors and publishers from licensing their books for use by commercial broadcasters or motion picture companies. For this reason Senator Mathias stated, and public broadcasting spokesmen conceded, that his proposed amendment would not permit expropriation of books for purposes of dramatization or adaptation.

The unauthorized reading of an entire literary work, or substantial portion of it, under a compulsory license also can be damaging. Thus while most authors might voluntarily license such uses for public broadcasting, there will be occasions when a writer will decline to grant a license exercising his basic right to decide whether and when particular uses of his work should be made. Unauthorized readings of a novel to large public radio or television audiences may prevent the author from licensing its use to commercial television or motion picture producers. Unauthorized repeated broadcasts of the reading of a children's book on public stations may destroy the author's opportunity to license its use in commercial records or audio-visual productions.

If the reading of a particular book may increase the sale of copies (an assumption public broadcast spokesmen frequently make), the copyright owner will take that into account, and grant the license. But he is entitled to decide what the effects may be in particular circumstances. Not only may other commercial uses be prevented; the broadcasts of readings of some books also may inhibit the sale of copies. For example, the reading of an entire mystery novel, including its solution, to public radio listeners will decrease its sales to that audience.

Moreover, a compulsory licensing system would deprive the author of his fundamental right to protect his reputation and the integrity of his work from the injury a misuse or inappropriate use would cause. The author may believe that the producer who intends to expropriate his work under a compulsory licensing system is an incompetent who will mangle it; or that a particular use will distort it; or even, as is sometimes the case, that a particular work will suffer in oral

delivery. A compulsory licensing system would deny him the right to protect his reputation or work against such injuries by declining to authorize the particular

use.

8. COMPULSORY LICENSING WOULD DENY COPYRIGHT OWNERS REASONABLE
COMPENSATION FOR PUBLIC BROADCASTING USES

Licenses are now being granted voluntarily by some authors and publishers for the reading of their literary works on public broadcast programs-at reasonable, and often exceedingly modest, fees. Given the hundreds of thousands of works which public broadcasting can draw on, and the past experience of comparable license arrangements in publishing, it is clear that such fees would continue to be set at reasonable and modest levels by voluntary arrangements. Compulsory licensing would have a different and damaging consequence to authors and publishers. Its effect, and indeed the likely objective of its proponents, was stated by the Public Broadcasting System: "public broadcasting royalty payments must be held within low budgetary constrictions." (PBS Comments on the Mathias Amendment, to Senator McClellan's Subcommittee; 1975; p. 7). The answer to this objective was given by the Senate Judiciary Committee, when it noted that while public broadcasting stations "may deserve greater financial assistance, [but] they should not be subsidized by this country's creative talent." (S. Rept. 93-983, p. 128)

A Tribunal or other mass-licensing system cannot establish fair rates for broadcasting uses of books, poetry or other literary works. The economic situation is drastically different from that involved in licensing the performance of music. For one thing, a successful musical composition will be performed repeatedly in the same or different renditions without diminishing its appeal to the same audiences; and the composer and publisher are compensated on the basis of the number of performances. A broadcast audience will not listen to repeated readings of the same book. Moreover, the value of broadcast rights for different books and poems vary more widely than do the value of broadcast rights for musical compositions. The reading of verses from a book for young children cannot be equated, on an arbitrary time-fee basis, with the reading of a successful novel or the poems of a Nobel Prize winner.

A compulsory license/royalty tribunal system is too inflexible to establish for all books, poetry, articles and other literary works reasonable royalties that would take account of significant differences in: the success and value of individual works, author's standing and reputation, types of programs, production budgets and degree of "sponsorship", and kinds of uses. Such a system would lower the author's or publisher's remuneration for extensive use of a valuable literary work on a high-budget public program to the lowest common denominator of fees for much less valuable works used casually on inexpensive programs. Moreover, the high dual costs of administering the Tribunal's rate-fixing activities and the Copyright Office's distribution functions would drastically reduce or eliminate the compensation paid to the author or publisher under the compulsory licensing system. Finally, the system would deprive the author and publisher of the fundamental right to decline a license if vòluntary negotiations do not produce a fee he deems reasonable.

9. PUBLIC BROADCASTING DOES NOT NEED COMPULSORY LICENSING IN ORDER TO CREATE

PROGRAMS

Nothing in the Copyright Act or Revision Bill prevents any public broadcaster or producer from creating and broadcasting a program on the same subject mat ter that is dealt with in a copyrighted book or other literary work. He is free to use the same sources, narrate the same facts and describe the same events reported in the copyrighted work. All the copyright does is prohibit the public broadcaster, or anyone else, from substantially copying the author's expression of the material rather than independently creating his own script.

Moreover, public broadcasters have the privilege of quoting. i.e. reading or reciting, excerpts from any copyrighted work under the doctrine of fair use, without permission or payment. A substantial proportion of the uses public broadcasters might make of literary works fall within the doctrine, and thus furnish no justification for inflicting a compulsory-license system of expropriation on authors and publishers. In our meetings with public broadcasters in recent weeks, we offered to discuss the formulation of guidelines for fair use, and we are ready and willing to continue that discussion.

10. PUBLIC BROADCASTING CAN FUNCTION EFFECTIVELY UNDER VOLUNTARY LICENSING,

ARRANGEMENTS

Public broadcasting spokesmen point to alleged "difficulties” in obtaining volun-. tary licenses as a principal justification for imposing a compulsory licensing system on authors and publishers of literary works. The "difficulties" are grossly exaggerated; and inconveniences that may occur occasionally can be avoided under voluntary arrangements, by simple procedures which we have been discussing with public broadcasting representatives [see (iii), below].

(i) Public Broadcasting's Experience With Voluntary Licensing

Licenses to read from books, poetry, etc. would hardly constitute a significant part of public broadcasting's licensing activities. In our discussions, one of the public broadcasting spokesmen mentioned that programs using such material probably constituted a very minor portion of all public television programs. By contrast, the operations of public broadcast stations and producers depend on the contracts they negotiate with officers and executives; commentators, performers and announcers; producers, directors and script writers; cameramen, film editors and artists; musicians and electricians; stagehands, janitors and other help; and the unions representing some of them. All of these agreements are negotiated on a voluntary basis. No compulsory license system compels these people to make their services available to public broadcasting, at salaries fixed by a “tribunal” without their consent.

Much of public broadcasting's programming consists of original material created for it by its script writers, directors and producers-working under arrangements negotiated voluntarily. The Mathias Amendment would not conscript their creative service. In addition, public broadcasters negotiate voluntary licenses to broadcast motion pictures, plays, programs produced by independent domestic producers, and television and radio programs produced by foreign broadcasters. The Mathias Amendment would not expropriate any of these copyrighted works, which constitute a large proportion of U.S. public broadcasting's programming. It would not subject them to compulsory licensing. It should not. The point is that public broadcasting can and does obtain most of its program materials by volun tary arrangements and licenses. It can and should use voluntary arrangements. when it seeks to use material from copyrighted books and other literary works. In this connection it should be remembered that some of the most successful programs broadcast by U.S. public broadcasting stations are produced by the British Broadcasting Corporation, a very public, non-profit entity, and by other British producers. Indeed the major programs on U.S. public television based on literary works were produced by these British organizations which obtain the rights from authors and publishers by voluntary arrangements, not by a compulsory-license system of expropriation.

(ii) What a "License" is

A license to read a book, or portion of it, on a public broadcast program is not a contract drawn separately for each use. The license usually is a short printed form which contains all the terms. The station or producer simply inserts designated information to identify the material to be used and the type of program use to be made. As is the case with thousands of comparable licenses used for decades in publishing, this is done by laymen, not lawyers or "experts". Publishers and authors' agents have prepared such forms for various types of broadcasting uses, and some public broadcasters and producers also have prepared them.

(iii) Use of a Recommended Standard Form

Representatives of authors, publishers and public broadcasters-some of whom are appearing here today-have been holding a series of discussions to work out voluntary arrangements to further simplify and expedite the licensing procedure. A principal component would be the use of a recommended, standard license form. We have spent many hours working on this. Both sides have drafted and redrafted a proposed form, and discussed it at length in our meetings. It is fair to say that both sides are close to agreement on the document. This form would eliminate a primary source of delays and confusion, which public broadcasting spokesmen are wont to characterize as "difficulties." In large part, these are. simply due to inadequate information. A station requesting a license, often by

57-786-76-pt. 2- -16

letter, may omit such data as the title of the book, the author's name or the pages to be used. This causes time-consuming rounds of correspondence.

The recommended standard license form would eliminate such delays. The form would be made available for use by all public broadcasters and producers, publishers, authors and their agents. The information required to complete the license is clearly called for on the form. Everyone involved would know what data was required and where it should be placed. Everyone would know where each provision of the license appeared, and what it means.

(iv) Public Broadcasting Employees are Capable of Preparing License Requests Public broadcasting spokesmen have argued that the preparation of license requests is too difficult for employees of their stations to cope with. This is not

SO.

(1) Similar licenses have been employed in publishing for many decades to obtain permission to quote extensive portions of copyrighted works in other books, text books, anthologies and periodicals. Countless individual authors have obtained these licenses to reprint other people's copyrighted material in books they are writing or anthologies they are editing. They complete these forms, send them off to the copyright proprietors and secure licenses without the benefit of counsel of a staff of employees. Their resources are much more limited than those of the smallest public broadcasting station. But resources are not required. (2) Many public broadcasters and producers are large organizations which are easily able to prepare and process these simple licenses. It is unbecoming for a station like New York's WNET, which is receiving $3 million to produce one series of programs (NY TIMES, 6.13.75,p.74), to argue it cannot afford the minimal time and effort required to have an employee fill in a few blank spaces on a standard license form when the station wishes to use material from an author's book in a program.

(3) Even the smallest public broadcasting stations receive many of their programs and many services from centralized organizations. The Public Broadcasting Service, for example, "distributes programming, assists the stations in the acquisition of programs... (and) assists the stations by suppying a variety of materials . . ." [Public Broadcasting System Comments to Sen. McClellan, cited supra, p. 1]. As the Corporation for Public Broadcasting stated in its Annual Report for 1974, the Public Broadcasting Service is a "source of member (station) services"; and in fiscal year 1974, the Corporation paid Public Broadcasting Service "slightly over $8 million for these services." (p. 9) National Public Radio performs similar services for its member public radio broadcasters.

These powerful organizations, with little effort, could assist even the smallest station adjust to the minimal routine involved in completing and mailing the standard license form for those of its own programs which might require permission from an author or publisher. It should be emphasized that the station would not have to seek permission for any program, using copyrighted literary material, which it received from PBS or similar sources. PBS, or the large organization or station which produced the program, would obtain a license that covered broadcasts of the program by all public broadcasting stations.

(v) Establishment of an “Expediting Office”

When delays occur in securing a license, they are usually due to such minor causes as the user's failure to provide an item of information (e.g. the book's title), not mailing the form to the proper address, or oversight in a publisher's office. The standard recommended license form would eliminate most of these occasional delays. Clear instructions from Public Broadcasting Service and National Public Radio to their member stations would eliminate others. In addition, the Association of American Publishers has agreed, within the framework of a voluntary licensing arrangement accepted by copyright owners and public broadcasters, to establish and operate an "Expediting Office". This office would check on delays in processing individual requests for licenses, help resolve snags, and provide information to public broadcasting stations and producers. Actually they will need little help in adjusting to using the recommended standard form. But the Expediting Office would be there to provide assistance, when needed.