would be staggering. The administrative costs could well exceed the royalties assessed. In my opinion, it would be far more economical to increase the governmental subsidies to public television to pay for programming costs, including permissions.

I am also unable to support the Bayh Amendment. As outlined earlier, the revision bill provides an exemption to make 30 copies or phonorecords, for transmission. I feel that some limitation is essential, and 30 copies should be ample to facilitate the activities of nonprofit organizations. The circulation of as many as 30 copies itself presents some danger to creators, since it is extremely difficult to insure that unauthorized copies are not made. Moreover, I believe a limitation on the period the copies or phonorecords may be held is eminently sound. There is nothing magic about a seven-year cut but, as a matter of principle, if a program is to be rebroadcast after a substantial period following the initial transmission, the authors and proprietors of the copyrighted works embodied in the program should be entitled to renegotiate a new deal, including additional compensation.

In conclusion, I must oppose the broad exemptions from the rights of authors proposed in the Mathias and Bayh amendments. The laudable objectives of public television and radio can be achieved more appropriately, and probably more economically, by direct support through government funding of public broadcasting. Direct subsidies represent recognition of the often-stated but fundamental truth, that creators of copyrighted works are entitled to just rewards from society for their endeavors as surely as administrators, technicians, performers, and other workers engaged in public broadcasting.

Sincerely yours,

BARBARA RINGER, Register of Copyrights.

Mr. DRINAN. Would the gentleman yield for just a moment? I asked that question because I thought that all of you people had amicably worked out all your differences. In this Senate subcommittee where everybody gets along so well, they must have a charm over there.

Mr. LIEB. I should say that our conversations, which we held at the suggestion of the Senate subcommittee, related almost entirely to the Mathias amendment. There were no discussions about this and we had assumed prior to July 2 when we were told by the public broadcasting people that they would not negotiate further with us on an agreement in substitution for Mathias, we only learned after that that they would push for the Bayh amendment as well as the Mathias amendment. I also want to call your attention to the fact that the Cambridge Research Institute which published the survey of the copyright law for your general assistance in 1973 expresses the opinion that the elimination of the limitations in section 112(b) are unnecessary.

Mr. KASTENMEIER. Thank you, Mr. Lieb.

Mr. KORMAN. Could I recapture 10 seconds of the several minutes? Our statement was rather lengthy and I fear that no one would get to look at the exhibits attached to it. I would like to call the committee's attention to the last exhibit which consists of copies of four letters that NET sent to a music publisher at a time when it was still acquiring synchronization licenses.

I am troubled, Mr. Chairman, because in 1975, my friend, Eric Smith, this morning speaks of the great difficulties of establishing clearance practices. There are simply no such difficulties. I call your attention to this because these letters illustrate how easy it was. On the third page of the first of them, there is a note which I think is particularly interesting.

This is a letter dated March 8, 1965, from NET to the Associated Music Publishers Co. In the letter, they are requesting a synchronization license for NET programs and they don't even identify the compositions.

They say in the note selections 2 and 3 above are as yet unnamed. Mr. Cowell will select them at time of performance. We will let you know at that time. However, overall duration will remain 8 minutes. What does it mean? It is an illustration, Mr. Chairman, of how this business really works.

Clearances are often obtained long after the fact. Commercial television network series may run the full 39 weeks and be off the air before the lawyers have gotten the contracts in shape to be signed. No one is sitting around lurking, as these public television people would suggest, behind bushes with clubs to hit them over the head as soon as their foot slips.

It does not happen at all. They can readily get the permission they

need.

Mr. KASTENMEIER. I appreciate your referring to these letters.

Mr. LIEB. May I request permission for Mr. Bender to submit a statement and possibly to say a few words?

Mr. KASTENMEIER. We would be pleased to accept your statement. What do you propose to speak on?

TESTIMONY OF IVAN R. BENDER, ON BEHALF OF THE EDUCATIONAL MEDIA PRODUCERS COUNCIL, AND JON BAUMGARTEN ON BEHALF OF MACMILLAN INC. AND HARCOURT BRACE JOVANOVICH (PUBLISHERS)

Mr. BENDER. I would like to amplify a statement that was made by Mr. Cohen this morning representing the agency for instructional television. I would like to also ask your permission for us to file a short written statement to further amplify and illustrate what I am going to say.

Mr. KASTENMEIER. Without objection we will receive that statement as I noted earlier. You are recognized for 2 minutes.

Mr. BENDER. Mr. Cohen seemed to represent this message that there is no such thing as an educational audiovisual industry. As a matter of fact, that is not true and I am sure that you realize that several hundreds of educational films and filmstrips are produced every year in this country and the use of those films is designed for schools and other kinds of instructional purposes.

The fact of the matter is as well as the use of these materials in the schools, the new technology, closed circuit television and open circuit television has caused our industry to look into this particular phase of the marketplace much more readily and in fact depend upon it very, very much.

The distribution of 60 millimeter motion pictures in the schools is becoming a much more difficult prospect because of the new technology. If the Mathias and the Bayh amendments together were adopted, the recording and distribution and retransmission privileges under the Bayh amendment, I say would put the television people in a tremendously unfair competitive situation where they would not only have an additional subsidy to create the materials but also be able to distribute those materials for retransmission without the kinds of problems and constraints that the commercial sector does have.

Lastly, I would like to say that many educational television stations actually seek distributors, commercial distributors of their materials.

As a matter of fact in Northern Virginia, the Northern Virginia Educational Television Authority recently contracted with the Encyclopaedia Britannica to produce television shows. They sought permission to use the materials that appear in those programs and were able to grant to us the rights to distribute those materials in the schools.

That is the end of my statement today and I would like to file this further written statement. Thank you very much.

Mr. KASTEN MEIER. Someone mentioned from the questions that we ask you are not to infer positions. Whether or not we necessarily agree with the thrust of the questions we ask, however, sometimes emotions of the questioner betray whether or not the question is put in that fashion.

We were developing the question of whether much of what public broadcasting presents now or whether public broadcasting is a not-forprofit enterprise for purposes of copyright. You cited a case or two. We have not been able, of course, to expand fully on it because it would take a very long time. But is it not the case that some public broadcasting or some public broadcasting facilities are not for profit and some public broadcasting facilities, because of perhaps the way they present their material or for other reasons are for profit?

Is that not the case? Can you not find a pure not-for-profit broadcasting enterprise?

Mr. KORMAN. If there were a public station that did not have any corporate announcement of financing, no sponsorship in any sense, and if anyone were paid at that station for rendering services, if they got the musicians to come in and perform free, I suppose everyone would agree, if no one got paid and the executives also contributed their services, I don't think any argument could be made that there is any profit for anyone.

There a situation did arise years ago that I think is pertinent to the question you raise. There was a radio station, and this case is referred to in our statement, there was a radio station operated by the Eugene Debs Memorial Fund qualified as a nonprofit educational foundation. That station broadcast a copyrighted composition on a sustaining program, a program that had no announcements.

The question was whether that performance was a public performance for profit. The court held that it was. Its reasoning was that that performance and that program was used to attract an audience and the station did have other programs which were commercially sponsored. Even though the ultimate purpose of the foundation was charitable, the fact that this money was brought in resulted in the foundation not running at a deficit was considered to make it for profit.

The music was used in a way to produce money for the foundation and the court felt that the copyright owner was entitled to be paid. If people are making their living as people in public television industry, and I deliberately call them an industry.

They are. They are big. If everyone else is making money out of this industry, then it seems to me that the people who furnish the creative materials that go into the programs should be compensated.

Mr. KARP. May I supplement that by pointing out that we in New York and across the country have long since recognized that the distinction between profit and not for profit often is meaningless.

The Port of New York Authority is not for profit. Read the book "The Power Broker" and you can't help realizing there has been a

57-786-76-pt. 2-20

tremendous revolution. There are many organizations run in this country which qualify as not for profit.

Public broadcasting is big business, heavily financed and should not be rattling the tin cup. I said we are not rattling the tin cup. We have got something to sell.

Mr. KASTENMEIER. I observe that the authors of these amendments concede that payments ought to be made.

Mr. KARP. But under a system badly conceived in a way that every nickel paid in royalties

Mr. KASTEN MEIER. I don't recall they mentioned any figure.

Mr. KARP. The point is their statement suggests it is necessary to keep these fees as low as possible. I think that this system is designed to do this and if you are going to have a dual administrative proceeding, first rate fixing and then fee distribution, for the copyright office with the bill saying this, the costs of the fee distribution shall be deducted from the royalties, there is going to be nothing left for the

creators.

Mr. KORMAN. Your question was whether the performances were for profit now.

I think that the performance on most major public television stations today are all for profit on the theory that the entertainment programs in the evening are certainly for profit. They are underwritten. They have sponsors. In the same sense that early radio stations. had sponsors. If corporations are using that medium for the purpose of selling the companies, not the products, but the companies, then every part of the operation is commercial.

Therefore, the performances are all for profit. These corporations are trying to address audiences and everything that these stations do is designed to attract audiences to watch these channels rather than other channels, or rather than doing something else.

Mr. KASTEN MEIER. For the profit of whom?

Mr. KORMAN. In the case of corporations which furnish the money, for the profit of the stockholders of those corporations. With respect to the educational programs, the people who produce those programs, the Children's Television Workshop, those people are making money.

Mr. KASTENMEIER. I don't know that. I for one cannot answer whether they are not for profit within the meaning of the terms used in the existing law. We can study that and make some determination. I have a second question, whether coming from-if indeed they come from an exempt status to a point where they are included fully, there is an analogy, of course and I say this because you have indicated in your statement that ASCAP is opposed in principle to any form of statutory compulsory license, that the jukebox people come from a similar exempt status to coverage under the proposal and they indeed do have compulsory license and have asked what I suppose the proponents here would ask. There are certain differences and I appreciate and feel that the proponents here are not really do not come from a clearly exempt status. But if they were, it would be analagous in fact that in principle you have already agreed to the statutory license for jukebox operators.

Mr. KORMAN. That has a long and sad history, Mr. Chairman. I think our position on the jukebox provision is that in 1967 we were faced with a kind of a take-it or leave-it situation. We were advised, "If you want any bill you better go along with the $8 fee because the

jukebox people have power in Congress." We took the $8. We feel if we want a bill, we better not open that can of worms.

But now, Mr. Chairman, when you say to me that the public television people ought to be treated the same way as the jukebox operators you are putting a very difficult question to me. Are you also saying to me or would you say to me, Mr. Chairman, Mr. Korman, if your clients want a bill, you better be awfully careful about what you do with the public broadcasters?

Mr. KASTEN MEIER. The history is, of course, long before the $8 was agreed compulsory license was agreed upon.

Mr. KARP. We should note for the record that neither jukebox nor cable television offer any precedent at all. The jukebox never permitted the jukebox player to play a recording of a book. It does not permit the proprietor of a jukebox to produce a recording of a book or a piece of music.

It does not permit them to do what the essence of public television is, which is to produce recorded programing which is like a motion picture studio.

Cable television was limited to the function of antenna retransmission. That is the only time a cable system has any right to do anything without permission. A cable television producer can't buy a recording and broadcast it. The only thing a cable system can do is retransmit off the air to its subscribers because it is serving as an antenna and nothing more.

Mr. KASTENMEIER. That is a limitation of some cable systems but not others.

Mr. KARP. They can't create programing without permission.

Mr. KASTEN MEIER. What we are confronted with in the future is something else.

Mr. KORMAN. We should look to the precedent of the symphony orchestra. They are kept going by private donations. They don't operate for profit in the ordinary sense, but they have always taken licenses. They have always recognized their responsibility to composers to see to it that they got paid when their music was being performed.

The symphony orchestra associations are like the public broadcasters except that the public broadcasters choose to assimilate themselves to the jukebox operators rather than the symphonies. I wonder why particularly when public radio says "Classical music will die unless we get a free ride." There is an association called the Concert Music Broadcasting Association. It is going very well. WNCN in New York, a concert music station, was sold to Senator Buckley's brother's company and it became a "rock and roll" station. There was an uproar. The public wants that station back as a classical music station and they are going to get it back.

[Subsequent to the hearing the following correspondence was received for the record:]

AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS,
New York, N.Y., July 11, 1975.

Hon. ROBERT W. KASTEN MEIER,
House of Representatives,

Washington, D.O.

DEAR CONGRESSMAN KASTEN MEIER: At the hearing yesterday, one of the spokesmen for the public broadcasters suggested that, unless the Mathias Amendment were adopted, classical music could not be broadcast by public radio stations if H.R. 2223 were enacted.