11. VOLUNTARY LICENSING ARRANGEMENTS WILL BE LESS COSTLY AND LESS BURDENSOME THAN A COMPULSORY LICENSING SYSTEM

If a compulsory licensing system were established, someone would have to pay (1) the considerable costs incurred by the Copyright Royalty Tribunal in the continuing and difficult task of fixing royalties for broadcasting uses of literary works; and (2) the formidable costs that would be incurred by the Copyright Office in distributing royalties to countless individual authors for various broadcast uses of their works. Its spokesmen assume none of these dual costs will be borne by public broadcasting. But the system would be just as costly if the taxpayers have to support it. And it would be utterly unfair if authors and publishers were compelled to pay the high, dual costs of expropriating their own propertyby deducting them from royalties and thus diminishing even further their compensation for these unauthorized uses of their books, poetry and other works.

Public broadcasting spokesmen also assume that a compulsory licensing system will not impose an administrative burden and expense on their stations and producers. This is not so; indeed, the burden and expense would probably exceed those incurred under voluntary arrangements. Stations and producers would have to file reports of every use of every copyrighted literary work, giving a complete identification and describing the type of use made. Otherwise, authors and publishers would have no way of knowing when their works had been used, and would be denied the information needed to determine which compulsory license royalty applied to each particular type of use. Without this information, individual authors and publishers would effectively be denied compensation. Without the information, the Copyright Office could not perform the complex task of distributing royalties to the individuals entitled to receive them. Since public broadcasting would have to participate in rate-fixing proceedings and appeals, it would have additional heavy costs to bear.

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13. VOLUNTARY LICENSING WILL PROVIDE PUBLIC BROADCASTING WITH AMPLE "ACCESS" TO LITERARY WORKS

(i) The Author's Right of Refusal

Public broadcasters argue that compulsory licensing is needed to assure them "access" to literary works. By "access" they mean the privilege of using any work, any time they ask for it. They complain that voluntary arrangements would not guarantee them that every author or publisher would grant a license each time it is requested. This 100% certainty is a luxury they do without in every other aspect of their operations. As we have noted, there are reasons why an author or publisher, under certain circumstances, will decline to grant a license-to protect his or his work's integrity, or his economic interests. His right to refuse permission for a particular use of his work is one of the fundamental rights granted by copyright-indeed, it is the essence of copyright, and of every other form of property.

But public broadcasters' concern over occasional refusals of licenses is totally unrealistic. They have, and will continue to have, available for use an infinite supply of literary works-exceeding by many, many times even their most ambitious demands for it. There are now several hundred thousand copyrighted books in print, plus countless copyrighted poems, articles and other individual works. More than 30.000 new books are published annually in this country; several times that number are published abroad. To this enormous mass, add the hundreds of thousands of books, and the incalculable number of poems, that have already fallen into the public domain. With this vast, almost infinite, reservoir of literary material, it requires a special sense of insecurity to worry that if one author, on one occasion, refuses a license-a producer will be unable to find another work to read or recite. If further security is required, it should be remembered that frequently the use intended will fall, or could be brought within, the boundaries of fair use-so that no permission or payment would be required.

(ii) The time element

One gets the impression from public broadcast spokesmen that programs are written on Monday and produced on Tuesday, leaving no time to secure permissions. Not true. All of public broadcasting's television programs and much of

its radio programming are recorded, and very little that would use readings from literary material is not planned in advance. Voluntary licenses for such programs are secured now. One of the problems that authors and publishers have confronted is the long delay that occurs between the granting of the license and the ultimate production of the program, if indeed the program is ever produced or ever uses the work for which the license was granted. There is ample time to secure licenses, delays can be avoided, and licenses could even be cleared, when necessary, by using the telephone.

(iii) Price

As we have indicated, one of public television's primary motives in seeking compulsory licensing may well be the hope of expropriating authors' works at lower prices than would be reached in voluntary arrangements. Also, they have expressed the fear that some authors and publishers would demand excessive prices. Here again they are victims of a strange and unrealistic need for absolute security. Public television is able to cope with all of its other costs-for outside programming, talent, labor, supplies and equipment-without the umbrella of compulsory licensing.

The record thus far is that authors and publishers have been extremely reasonable in the fees they have charged public broadcasters for literary material. Many licenses have been granted for fees of $25, $50 and $100. Frequently permissions have been granted to make uses in excess of fair use, without any charge. But under a voluntary system, when a work of considerable value is sought for a high-budget program, the author has the option of requesting a larger fee. Public broadcasting spokesmen have suggested that fees for all works. on all programs, and all budgets, be set at the same level. They see compulsory licensing as the means of holding all compensation for all uses to the same lowest common denominator-for the low budget children's program, or a multi-million dollar series underwritten by corporate sponsors like EXXON, MOBIL, XEROX and IBM.

There is no evidence that publishers and authors will be any less reasonable in the future than they have been in the past. Aside from their genuine desire to be helpful to public television (not likely to be preserved by a Mathias Amendment) there is the inexorable pressure of supply and demand. The huge reservoir of available literary material vastly exceeds needs. Fees are exceedingly modest now because the law of supply and demand does work in this area; with the continuing flow of new books, it is not likely to be repealed in the foreseeable future.

14. THE NEGOTIATIONS BETWEEN AUTHOR/PUBLISHER AND PUBLIC BROADCASTING REPRESENTATIVES

(i) The Meetings Prior to June 18th

At the suggestion of Senator McClellan's Subcommittee, author/publisher and public broadcasting representatives held four meetings to attempt to work out a voluntary reasonable accommodation; they also met jointly with the Subcommittee staff on three occasions. Considerable work was done, considerable progress was made. The representatives drafted and redrafted the recommended standard form of license for readings of nondramatic literary works on public broadcasting programs, and came close to agreement on the form.

Because we were preparing a voluntary recommended form, whose terms would not be frozen into a statute for decades, author/publisher representatives acceded to requests by public broadcasting spokesmen to include provision which go far beyond the scope of the Mathias Amendment. We would bitterly oppose their inclusion in a statutory licensing scheme since they can be exceedingly harmful in some circumstances, and may become even more dangerous in a short time. We were willing to include them in the recommended form because it is a voluntary arrangement-leaving each author and publisher free to decide whether to accept the provisions, or delete them from the license it grants.

As noted, other subjects were discussed at the meetings: (1) Provided agreement is reached with the broadcasters, the Association of American Publishers would establish an "expediting office" to facilitate the processing of licenses : (2) We offered to work with public broadcasting spokesmen on the development of fair-use guidelines.

(ii) The June 18 Meeting

At our fourth and most recent meeting, held on June 18th at the headquarters of National Public Radio, public broadcasting representatives told us they were awaiting instructions from their Boards of Directors on whether the recommended standard license form and the expediting office would be acceptable to their organizations. They told us there were 5 "open questions" for the Boards to consider: (1) that under a voluntary system, an author could decline to grant a license; (2) that public broadcasting stations could not use a literary work if its author or publisher did not reply to a license request; (3) that author/ publisher representatives could not discuss a recommended fee schedule, or fix one that was binding on all copyright owners; (4) that author/publisher representatives would not agree that public broadcasting programs could use 100 words or less from any work without permission or payment, even though the 100 words might be the entire poem or other work, or a major portion, and its use would not be fair use under the particular circumstances involved; and (5) that author/publisher representatives would not agree to an arrangement that continued indefinitely, indeed perpetually.

As noted above (p. 3), the Public Broadcasting Service has decided to reject a voluntary arrangement with authors and publishers. Presumably the other broadcasting organizations have reached the same decision.

(iii) Our Response to the 5 "Open Questions"

Obviously the 5 "open questions" could not be answered in public broadcasting's favor under any voluntary arrangement. This must have been apparent to them from the outset, as it was to the Senate Subcommittee when it urged that a reasonable voluntary accommodation be worked out by both sides. The Authors League and Association of American Publishers cannot bind individual authors and publishers to grant every license requested, or agree for them that failure to respond to a request constitutes the grant of a license. If only for antitrust reasons, our organizations cannot negotiate recommended fees with the broadcasting organizations; and obviously cannot bind each author or publisher to accept specified fees. Nor can our organizations bind each author or publisher to grant the use of 100 words from a work without permission or payment. Nor should the authors of short poems and similar works be deprived of compensation under such a rule. On the other hand, guidelines complying with the principles of fair use would recognize the use of much longer excerpts, in various circumstances, as fair use.

The 5 "open questions" can only be answered in public broadcasting's favor under a statutory compulsory-licensing system. For the reasons discussed above, public broadcasting is not entitled to expropriate authors' and publishers' works under such a system. And as we have pointed out, public broadcasting can function effectively under voluntary licensing arrangements and obtain ample "access" to literary works.

(iv) The "Perpetual" Agreement

Public broadcasting representatives have contended that any agreement with author and publisher organizations must contain provisions to assure its continuation for some indefinite, perhaps perpetual, term. This argument underlies their 5th "open question." Such an open-ended or perpetual term is legally impossible: and, realistically, unnecessary. Public broadcasting spokesmen argue that if the Mathias amendment is not adopted, authors and publishers will have no incentive to use the recommended license form, maintain an expediting office or be cooperative in granting licenses.

We totally disagree. The threat of a Mathias-type amendment will be as potent a stimulus for authors and publishers five years from today as it is now. Indeed, if they scuttled a voluntary licensing arrangement negotiated now, the threat would be even greater. But there are better and more dignified reasons why a voluntary licensing arrangement would continue. It is as much in the author/ publisher interest as in public broadcasting's interest to have a reasonable, standardized voluntary licensing system for these uses. Authors derive income from them, and are more likely to do so if the system works. The administrative cost to publishers (as well as broadcasters) is much less if the license form is standardized, if all requests are made on the same form, if everyone-on both

sides is accustomed to dealing with it, and an expediting office function. Even assuming the Association of American Publishers ultimately closed the office, perhaps because it was no longer needed, the licensing system would continue to function. And the Public Broadcasting Service and National Public Radio could provide the minimal coordinating service that might be requested by their stations, just as these organizations provide other services to them.

(v) Our readiness to continue the discussions

We are prepared to resume discussions with the public broadcasting representatives whenever they wish to do so. We hope that the Directors of their organizations decide they should. But if their Directors conclude that public broadcasting should not resume that effort to achieve a reasonable voluntary accommodation, author and publisher representatives will complete the recommended standard license form themselves, working from the last draft which embodies many of public broadcasting's demands, and make this license form available for use by public broadcasters and producers, publishers, authors and agents.

15. SEC. 116-THE JUKE BOX CLAUSE

Public broadcasters incorrectly argue that this clause justifies the compulsory license system they seek. It does not. Sec. 116 deals only with the playing of musical recordings on juke boxes. It does not allow juke box owners to play records of books. It does not allow them to produce recordings of books, music or other works. It is narrowly limited to the performance of music on coin-operated phonograph machines; and even in that narrow context, it is recognized as an historical aberration.

16. SEC. 111-THE CATV CLAUSE

Public broadcasters also incorrectly argue that this clause justifies the compulsory license system they demand. It does not. Sec. 111 only applies when a CATV system receives an over-the-air broadcast and simultaneously relays it to the system's subscribers-in other words when the CATV system functions as an antenna. (See: The Supreme Court's Fortnightly and Teleprompter opinions) Sec. 111 does not authorize any CATV system to use a book or any other copyrighted work in producing a program; it does not authorize the system to use a recording of a book or other work to originate a broadcast of a program. If an author does not voluntarily license a television producer to use his book or other literary work on a television program, it will never reach a cable audience.

17. PUBLIC TELEVISION ORGANIZATIONS AND OFFICIALS SHOULD NOT BE GRANTED THE POWER OF EXPROPRIATING AN AUTHOR'S WORK

In the initial meeting called by the Senate Subcommittee staff on April 24th, the Register of Copyrights expressed her opposition to the adoption of any compulsory licensing system for the use of literary works on public broadcasting programs. She emphasized that this was a drastic departure from the established principles of copyright law, that it was unnecessary and unjustified, and that it would set a very dangerous precedent. We agree, for the reasons discussed in this statement.

STATEMENT OF NATIONAL MUSIC PUBLISHERS ASSOCIATION AND AMERICAN GUILD OF AUTHORS AND COMPOSERS REGARDING PROPOSED PUBLIC BROADCASTING AMENDMENTS TO H.R. 2223, THE COPYRIGHT REVISION BILL

The American Guild of Authors and Composers (AGAC) and the National Music Publishers Association (NMPA)-the creators and distributors of America's music who hold the copyrights under which are issued "synchronization" licenses (the right to record works in synchronization with visual images, rights which Professor Nimmer has stated unequivocally to be protected under the Copyright Act and which the development of the kinescope and video tape have made relevant to public television)-strongly urge the Congress to reject as unfair, unwarranted and unwise (A) the proposal for a two-level governmentadministered compulsory license of copyrighted musical compositions for all public broadcasters ("the Mathias Amendment," so termed because Senator Mathias offered such a proposal last year) and (B) the elimination of all limitations on the number of additional "ephemeral" recordings of copyrighted material

which public broadcasters can make for instructional purposes without any compensation to copyright holders ("the Bayh Amendment").

Our appreciation of this nation's cultural advancement has long caused both our organizations to applaud the success of public and instructional broadcasting, particularly public television. Public broadcasting has become a well-established part of our national broadcasting system, widely hailed for its quality entertainment, artistic, news, sports and other programs. Instructional broadcasting is an integral part of our educational system. Both raise and spend large sums of money and represent important markets for our works. We thus want public and instructional broadcasting to enjoy the widest possible access to the music we create. If it is true that they have budgetary problems, this does not detract from the economic needs of the authors and composers of music whose very livelihood depends upon income from negotiated uses of their works. We agree with the words of the Senate Judiciary Committee Report of last year: “Such stations may deserve great financial assistance, but they should not be subsidized by this country's creative talent." (S. Rept. 73–983, p. 128)

Our sympathy with the legitimate needs of instructional broadcasting is demonstrated in the concessions we have previously made in Sections 110(2) and the predecessors of 112(b). However, the amendments now under consideration go beyond any reasonable compromise. The Bayh Amendment removes all safeguards for the economic interests of authors, composers and publishers. The Mathias Amendment must be viewed in relation to the true nature of "public" broadcasting. As stated several years ago by the Register of Copyrights:

"Fully acknowledging the unique public value of educational broadcasting and its need for financial support, we must also recognize the large public audiences it is now reaching, the vast potential audiences that are awaiting it, and the fact that, as a medium for entertainment, recreation, and communication of information, a good deal of educational programing is indistinguishable from a good deal of commercial programing. The time may come when many works will reach the public primarily through educational broadcasting. In terms of good education it is certainly true that the more people reached the better: but in terms of the author's rights it is equally true that the more people reached the more he should be compensated. It does not seem too much to ask that some of the money now going to support educational broadcasting activities be used to compensate authors and publishers whose works are essential to those activities." (See H. Rept. 90–83. p. 42, emphasis added)

Public broadcasting is not granted special privileges by the producers, directors, actors, electricians or landlords who provide them with services. No compulsory license enables public broadcasters to receive such services without negotiating for them, no statute enables them to call some services "ephemeral" and pay nothing for them, and no government tribunal fixes the rate of payment for these services (or, for that matter, fixes the rate of compensation received by the public broadcast stations themselves). Surely discrimination against the creators of American music cannot logically be written into a copyright law that is constitutionally intended to protect them merely out of consideration for such large corporate sponsors of public broadcasting as Mobil and Exxon who contribute taxdeductible dollars to advertise their generosity.

I. The Mathias Amendment

A. GOVERNMENT INTERVENTION IS UNNECESSARY

The composers and publishers of America's music are most desirous to grant all possible licenses to the large and growing market of public broadcasting, as we are with respect to all similar markets for our works, and no statute is required to compel us to do so. Such licenses have been routinely negotiated and granted as a matter of course since the earliest days of public broadcasting. Indeed the final sentence of subparagraph (a) (2) of the Mathias Amendment acknowledged the fact that royalty rates already can be and are negotiated between public broadcasters and copyright owners.

No information has come to our attention indicating that public broadcasters have been denied equal access on fair and reasonable terms to any and all the copyrighted musical material they have requested. We have heard of no obstacle to the regular granting of synchronization licenses to such broadcasters and have heard of no instance in which negotiations with our members broke down over the amount of the royalty which was to be paid under the universally recognized system of rewarding creativity. And we know of no reason why the same pro