Specifically BMI and ASCAP would each receive $90,000 a year to begin with the use of the BMI repertory alone. This would come to less than $75 a station per day. That is why we could not come to an agreement.

It had nothing to do with any problems of mechanics.

I have explained why this proposal if accepted would cost American writers and publishers money, why they would have to continue their subsidization of public broadcasting, something which no other group is asked to do. I pointed out why the position could cost the United States millions of dollars that we receive from abroad.

That is all in the statement. The machinery set up by the Copyright Royalty Tribunal is not necessary and only further reduces the amount available to writers and publishers. It is obvious to me that what is needed is not more, but less legislation.

If the parties for any reason are unable to arrive at an understanding, the resort to legislation, a petition to this body is always available. I submit that there is no justification for legislation merely because of the unlikely possibility of future problems.

Before concluding my remarks I note that the subcommittee will also consider the Bayh amendment. We have submitted a paper on that and we join in the others on the table in opposing it for the record. Thank you, Mr. Chairman.

Mr. KASTEN MEIER. Thank you, Mr. Cramer.

Now the Chair would like to call on Charles Lieb on behalf of the Association of American Publishers, Inc.

Mr. KARP. I will go first.

Mr. Chairman, my name is Irwin Karp and I appear for the Authors League of America. Accompanying me are Townsend Hoopes, Alexander Hoffman and Charles Lieb, appearing for the Association of American Publishers; Ivan Bender, appearing for the Educational Media Producers Council; and Jon Baumgarten, of the law firm of Linden and Deutsch, appearing for Harcourt Brace Jovanovich, Inc., and Macmillan, Inc.

Let me just try briefly to recapitulate what is in our rather lengthy statement and then I and my colleagues at the appropriate time would like to answer any questions you may have on the Mathias amendment. Public television programs today and for several years have on occasion used material from books.

Where that use exceeds fair use, licenses are required under the present law. Our statement, as does ASCAP, points out that the argument that a not-for-profit limitation applies is without basis.

In fact the only purpose of section 1 (c) when it was drawn in 1909 was to allow the live reading of a book to a small audience in a lecture hall or an auditorium. No one conceived that that section would allow a noncompensated performance of a piece of music or a book broadcast over television or radio to an audience of hundreds or thousands or millions at the same time.

In morality it should have been changed long ago and they are not proceeding on that aspect. But clearly to the extent to which all public television and a large part of public radio in effect broadcast programs produced in one type of production center or another, they do require a license and they do require to the extent that they are taken out of not-for-profit exemption by their sponsoring activities.

In that connection, let me read to you from Newsweek magazine a brief comment on this.

"When radio was in its infancy, sponsors were granted only a brief, tasteful comment on each program they paid for." As Newsweek points out, many companies today are finding that public TV sponsorship may be more effective than conventional advertising.

It is also cheaper. Some noncommercial stations are working hard to promote the idea that sponsorship of their programs is more than charitable. Instead of rattling a tin cup, we are offering a quid pro quo, according to channel 13 in New York.

This is a professional operation funded by millions and millions of dollars a year in Federal funds and huge grants from foundations. They are receiving one-third of the $38 million spent around the country from grants.

In most instances authors and composers would voluntarily license and do grant them for the use of books, poetry, and other material at very modest fees. The people who produce the instructional programs will grant licenses to use children's books which are read in their entirety for as little as $25, $50, or $100.

In some cases the licenses are not needed. There are occasions when authors would decline to permit a reading because of serious economic or esthetic damage. The compulsory license system would deprive them of that right and of right to negotiate reasonable compensation.

There is no reason to inflict this costly complex and devastating system of compulsory licensing on composers of books. Licenses are obtained now voluntarily and can be obtained under voluntary arrangements. They as well as we, public broadcasters, would face a serious administrative burden under the section they have drafted.

It is their handiwork, and Barbara Ringer, the Register of Copyrights, in 1975 writes opposing the Mathias and Bayh amendments. She said, "Unless the parties negotiate all cases will have to be handled by the Royalty Tribunal.

"The burden on the Tribunal will be staggering, the administrative costs could well exceed the royalty assessed."

Then the Tribunal would have to parcel out the small royalty payments to different authors and publishers all over the country. Their burden in using the system would be equally onerous and the public broadcasters would have to file a report for every use they made in detail, much more detailed and cumbersome than the license agreement they use now.

At page 6 to page 8 of our statement, we outline the nature of public broadcasting, pointing out the heavy commercial sponsorship prevailing and the fact that a great mass of public television's programing is entertainment, cultural and informational programing, not classroom instruction, the same programing that is done on commercial television and achieving the same purposes for which authors write. books and publishers publish them.

Large sums of money are spent on producing these programs. Millions of dollars are granted or obtained from corporate sponsors to produce a single series. It is not a shoestring amateur operation. Everybody in public television gets paid.

This is an industry run by professionals. All of their services are negotiated for on a voluntary basis. I wish we had more time and I will try briefly to glide over the serious damage done by compulsory license

systems. First of all there are occasions when an author would very logically decline to grant a license.

In those cases he is deprived of the right to protect his property. We discussed this at pages 11 and 12 of our statement. Compulsory licensing would deprive authors of compensation.

The objection of the proponents was stated by the public broadcasting system itself on a statement on the amendment in the Senate committee last year.

"Public broadcasting royalty payments must be held within low budgetary constrictions."

That is the reason they are pushing this amendment. As the Senate committee noted, public broadcasting stations may deserve greater financial assistance but they should not be subsidized by the country's creative talent. A royalty tribunal cannot establish fair compensation for literary works. There is a difference between the mass licenses of performance of music and the occasional performances of literary works. A tribunal could not take into account all the factors involved.

In many cases fees follow a person. There would be in most instances very low fees. But occasionally the work has tremendous value and occasionally the work is going to be used on one of those Polaroid specials or one of those heavily financed Xerox documentaries and there is no reason why an author should accept a low rate on a program like that.

He is entitled to negotiate for more. The cost factors involved in administering both the Tribunal and the Copyright Office will in turn diminish royalties to the point where they are nonexistent.

At pages 15 through 20 of our statement we have pointed out why compulsory licensing is not necessary. Right now public broadcasting lives with voluntary licensing for all of its program materials.

A great part of those materials are created by writers, directors in the employ of the station. Voluntary negotiations determine what they are paid for creating those programs.

A great deal of public television's program material consists of motion pctures, foreign television programs, and domestic programs all of which are negotiated for on a voluntary basis. I think my time is about to expire so I might as well stop at this point.

I do hope we can point out further in questioning why this whole fuss about the difficulty of clearance is sheer hypocrisy. There are not 29,000 hours of television programing on public broadcasting that use material from books. It may be as little as 1 percent of that material according to one of our colleagues on the television side in discussions with us.

Licensing consists of using a printed form. This type of licensing has been going on in American book publishing for the last 50 years. Most of the people who get the license are individual authors who are asking some other publisher for permission to use material. Without a lawyer, without a staff, with nothing but a 10 cent stamp and a piece of paper, they get the licenses.

Thank you, Mr. Chairman.

Mr. KASTEN MEIER. Thank you, Mr. Karp.

Mr. LIEB. We oppose with great vigor the amendment of the existing section 112(b) in H.R. 2223 and the substitution for it of the socalled Bayh amendment. Indeed, we go further and we suggest to you that the existing section 112(b) which permits the making of 30

copies and their use over a period of 7 years is too broad and that a better measure would have been the prior measure of 12 copies over a period of 5 years that was in your prior House bill and in the prior Senate bill.

Let me try to explain the Bayh amendment. I note this morning that it causes considerable confusion, and it causes me confusion at times, too. You have to read subsection 112(b), which is supplanted by the Bayh amendment, together with section 110(2). Section 110 is headed "Limitations on Exclusive Rights, Exemption of Certain Performances and Displays." The first subdivision exempts from copyright control the use of material in face-to-face teaching activities.

In subdivision (2), to which reference has been made in section 112 (b), this supplements the face-to-face classroom teaching provision with a further enlargement of the teaching right to broadcast instructional material provided the broadcast is a regular part of systematic instructional activities and the performance is directly related to the classroom study and the transmission is made primarily to the classroom or for disabled people who can't attend the classroom.

This is the subject of 112(b) (2), which provides that with respect to a transmission that may be made under the instructional broadcasting exemption of 110, the transmitting organization may make no more than 30 copies of the program for use over a period of 7 years except that a copy might be kept thereafter for archival purposes. The Bayh amendment would eliminate all such restrictions. Specifically, what it would do would be to eliminate the 30-copy restriction, thus permitting the making of an unlimited number of copies. It would eliminate the requirement of the period of use, thus permitting the copies and copies of copies and so on to be used and reused over an indefinite period.

Moreover, it would permit the distribution of these records or audiovisual tapes or whatever you would want to call them, it would permit their distribution to an unlimited number of other nonprofit organizations and would eliminate the restriction that the distributees make use of these recordings subject to the systematic instructional requirements and limitations of section 110.

We think this is a gross and unfair and unwise statute. We think that the issue is not whether this kind of recording of instructional programs should be permitted. We think the issue is whether it should be permitted, programs which contain material copyrighted by others.

If the instructional organizations create their own programs and use their own work which they themselves might copyright or use works on which they get permission from the copyright owner then, of course, within that permission they would have the right to make recordings. Mr. Drinan asked this morning who opposes the amendments.

Besides the people at this table, your committee in 1967 opposed it, the Senate committee opposed it, Ms. Ringer, in her letter of January 31 of this year to Senator McClellan, said: "I am also unable to support the Bayh amendment."

The revision bill provides an exemption to make 30 copies. I feel that some limitation is necessary and 30 copies should be sufficient. It is extremely difficult to insure that unauthorized copies are not made. We will be handing up copies of this letter.

[The letter referred to follows:]

Hon. JOHN L. MCCLELLAN,
U.S. Senate,

COPYRIGHT OFFICE,

THE LIBRARY OF CONGRESS, Washington, D.C., January 31, 1975.

Committee on the Judiciary, Washington, D.C.

DEAR SENATOR MCCLELLAN: This is in reference to your letter of September 22, 1974 requesting the views of the Copyright Office on two amendments to the Copyright Revision Bill proposed separately by Senators Mathias and Bayh in the 93rd Congress, which you anticipate will be raised again during the consideration of S. 22.

Senator Mathias' proposal, identified as Senate Amendment No. 1815, would have created a compulsory license to use copyrighted nondramatic literary and musical works, sound recordings, and pictorial, graphic, and sculptural works in the transmission of educational television or radio programs on noncommercial educational broadcast stations.

Senator Bayh's proposal, identified as Senate Amendment No. 1831, would have granted an unlimited exemption to nonprofit organizations and governmental bodies to make copies of programs they transmit and to distribute the copies for transmission by other similar organizations. The revision bill as it passed the Senate and the pending bill, S. 22, permit such organizations to make 30 copies or phonorecords, subject to the limitation that all copies and phonorecords, with the exception of one for archival purposes, must be destroyed within seven years from the date the program was first transmitted to the public.

I am in full support of the objectives of public educational broadcasting, and I sympathize with the aims of the Mathias and Bayh proposals to facilitate these objectives. Nevertheless, despite the worthy motivations behind these proposals, I feel that they go much too far in creating new and additional exemptions to the legitimate rights of authors and copyright proprietors. The copyright system can fulfill its objective of promoting "the progress of science and the useful arts" only if the exclusive rights of authors to control use of their works and receive payment on a negotiated basis are respected. Reasonable exceptions to these exclusive rights are appropriate and necessary: the revision bill already grants many exceptions for nonprofit organizations and governmental bodies, and on some especially difficult, complex issues it has been necessary to resort to compulsory licensing systems. However, I am becoming increasingly concerned about the implications of widespread compulsory licensing of copyrights, and the dangers that these systems bring to bear on creativity and freedom of expression.

The revision bill provides significant exemptions with respect to performances and displays of certain copyrighted works on educational television for instructional purposes. The fair use provisions of section 107 would also permit limited use of excerpts on public broadcasting stations in general. The concessions regarding instructional television are especially significant. They meet the greatest need of educational television and permit broad access to certain copyrighted works on a basis comparable to educators in a classroom. These exemptions were carefully worked out as a reasonable compromise, and they have my general support.

On the other hand, a broad compulsory license to use certain works on opencircuit educational television such as that proposed by Senator Mathias, is not, in my opinion justified or necessary, and I urge the Judiciary Committee not to adopt it. In presenting non-instructional programs, educational television directly competes for viewers, with commercial television. Uncontrolled use of copyrighted works on educational television, even though subject to some payment as determined by the Copyright Royalty Tribunal, would seriously interfere with the markets for the author's works on commercial television, and would unquestionably decrease their value. Nondramatic literary works are particularly vulnerable since the author's market for performing them is so small. I realize that the budgets of public broadcasting stations are very small, and that the costs of obtaining clearances for small incidental uses of photographs, drawings, and the like can be unjustified, costly, and bothersome, but the broad-brush approach of the Mathias proposal seems unsuitable as a solution to this problem.

Addressing myself directly to the details of the proposal, I believe as a policy matter that the failure to establish any statutory royalty makes the plan unworkable. Unless the parties negotiate the payment, all cases would have to be handled by the Copyright Royalty Tribunal. The burden on the Tribunal