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As you know, S. 1361 did not get enacted into law and the bill was reintroduced as S. 22 in the Senate and is now pending before you as H.R. 2223. After passage of S. 1361 in the Senate, Guam Cable TV system continued to operate under threats of lawsuits; and in face of opposition to the Stevens amendment by the Motion Picture Association, the National Association of Broadcasters and one or more networks. While we were happy that the Senate agreed with our position, and we beliered that the House would also, we had no certain understanding of the length of time required for deliberation of the omnibus copyright bill in the House, and its enactment into law, and whether section 111, which is CATV copyright liability, would be included. With great uncertainty as to our continuing ability to serve the residents of Guam and other areas of the Trust Territory of the Pacific Islands, Mr. Won Pat, our Representative, introduced H.R. 4965, a bill that we honed would expeditiously settle his very narrow copyright question by putting us in the same exact footing as mainland CATV systems.

Fortunately, Mr. Won Pat's bill contained many provisions that met the concerns of the copyright holders. With this in mind, our counsel arranged a meeting between Mr. Valenti and me in which we discussed the CATV system in Guam and set to work on amendments largely derived from Mr. Won Pat's bill, which we proposed to this committee. These amendments would perfect the Stevens amendment and satisfy those seeking (1) payment for use of their product and (2) protection of the integrity of that product; and would also satisfy those seeking a compulsory license under the proposed copyright law for use of that product.

Thus, the proposed legislation would, among other things, accomplish the following:

1. Apply the criminal provisions and other remedies of the copyright act to violations of the taping authority for the offshore systems affected.

2. Provide for only one time transmissions of videotapes on the CATV's.

3. Prohibit deletion or editing of programs including the commercials that are now contained within the story line of the programs. This would not affect the existing practice of deleting or otherwise altering or substituting commercial content at the beginning and end of the programs.

4. Those systems engaged in taping must prevent the duplication of the tapes while in the system's possession and while in the possession of the taping facility and must take adequate precautions to prevent duplication while being transported. The system is also required to erase or destroy the tape or cause such erasure' or destruction and to attest to the fact by an affidavit of an owner or officer by the CATV involved. Such affidavits must be kept open to public inspection in a public file in its office.

5. CATV transmissions must be those that would be permitted under the pertinent FCC rules and regulations if made by a system that were not taping. Importantly, because of (1) the complexity of FCC rules and regulations, (2) the likelihood that such regulations may from time to time be changed, and (3) the problems involving notification, proposed section 111(e)(1) (F) is explicitly inapplicable to inadvertent

or accidental transmissions. This is designed specifically to insure against the institution of nuisance suits under the copyright law.

Paragraph (e) (2) applies similar restrictions to the process of sharing tapes among CATV systems to insure that such tapes do not find their way out of the CATV chain of distribution. It would also allow for cost sharing of the full costs attendant to making tapes available, that is, costs of tape, production costs, and delivery costs. Finally, paragraph (e) (3) indicates that the legislation is not meant to supersede any existing agreements concerning exclusivity protection provided to broadcast stations.

It is our opinion that the adoption of the proposed amendments into H.R. 2223 would fully resolve our CATV/copyright problem and would avoid the necessity for any consideration at this time of H.R. 4965 legislation, Mr. Won Pat's bill. We believe this agreement among the parties constitutes a good faith effort to arrive at a reasonable solution to a complex problem. Our experience in the last several weeks indicates that a forthright and hard-working approach to settle this matter has been entered into and achieved, and we urge this committee's adoption of the proposed amendments.

As you know, the residents of the northern Marianas have voted to join the United States as a Commonwealth. The bill that would confer such status has passed the House and is now pending in the Senate. When it passes, they will join the people of Guam as our westernmost American citizens"6,000 miles off the California coast. As Americans in the world today, their freedom of speech includes access to television, our most widely distributed medium. We have all played a part in the proposed legislation, and we believe that enactment of these vital amendments will meet the daily needs of these Americans.

Thank you for this opportunity to testify and I would be delighted to answer any of your questions.

Mr. KASTENMEIER. Thank you, Mr. Holmes. The Chair knows that there has been an exchange of correspondence on this issue and there are, for example, a letter from Mr. Valenti to Mr. Holmes dated September 10; a letter from Mr. Valenti to the Chair dated September 11; a letter from Mr. Brown to Mr. Valenti, dated September 12; a letter from Mr. Brown to the Chair, dated September 15; a letter from Mr. Brown to Mr. Won Pat dated September 15. Without objection, these communications will be placed in the record, and the thrust of these communications is to affirm what Mr. Holmes has suggested; namely, that the parties have resolved their dispute and have agreed to amendments varying somewhat from H.R. 4965.

The above-referred to documents and a letter from Mr. Valenti to the Chair, dated September 30, 1975, follow:]

MOTION PICTURE ASSOCIATION OF AMERICA, INC.,

Washington, D.C., September 10, 1975. Mr. LEE M. HOLMES, President, Guam Cable TV System, Tamuning, Guam.

DEAR LEE: In our endeavor to be helpful in meeting the special geographical problem of Guam, as you are aware we have worked out with your Washington counsel, Richard Brown, Esq., who has consulted with you, an amendment to the provision dealing with nonsimultaneous secondary transmissions presently contained in Section 111 of H.R. 2223.

The text of the proposed modifications, which we trust will be acceptable to the congressional subcommittee considering copyright, is attached herewith although I assume your counsel has forwarded it to you. We believe, and Mr. Brown concurs, that the proposed language would meet your needs and we, as copyright owners, are agreeable to advising Chairman Kastenmeier and the Members of his subcommittee at the scheduled hearing on September 18, 1975, that the proposal is also acceptable to us.

An understanding has been reached with Mr. Brown that you, or Mr. Brown as your attorney under your direction, will as soon as possible and prior to the hearing date, (a) write the Honorable Antonio Borja Won Pat, Delegate from Guam, advising him that modifications to the copyright bill have been agreed upon between us that make the Won Pat Bill (H.R. 9301) unnecessary and asking him to so advise Chairman Kastenmeier; and (b) write Chairman Kastenmeier, with copies to the members of his subcommittee that an agreement has been reached by you with the copyright holders for language changes in the bill that are acceptable to both parties and that under the circumstances you have asked your congressional delegate not to press his bill.

I am sending a copy of this letter to Chairman Kastenmeier and to the members of the subcommittee so that they will be informed of the facts. In a covering letter, I will ask the Chairman to give friendly consideration to the amendment which we have jointly agreed upon. We will confirm this position formally at the subcommittee hearing on September 18.

I am pleased that you and I had the opportunity to meet personally on this problem and as a result I made a special point of explaining your situation to the members of the MPAA committee that is responsible for copyright matters. The end result has been helpful and I hope that we can persuade the subcommittee that the best interests of all the parties, and especially the people of Guam, are being served. I look forward to receiving copies of your letters to Mr. Won Pat and Chairman Kastenmeier promptly. Sincerely,

JACK VALENTI,

President. Enclosure.

MOTION PICTURE ASSOCIATION OF AMERICA, INC.,

Washington, D.O., September 11, 1975. Hon. ROBERT W. KASTENMEIER, Chairman, Subcommittee on Courts, Civil Liberties and the Administration of

Justice, Committee on the Judiciary, U.S. House of Representatives, Wash

ington, D.C. MY DEAR MR. CHAIRMAN : Throughout the congressional consideration of the copyright bill, it has been my policy to conciliate and make concessions in an earnest endeavor to expedite the enactment of a bill that all of the parties can live with. However, as you and your colleagues are aware, I found it necessary in my testimony before your committee to note our opposition to the language in Sec. 111 of H.R. 2223 that was carried over from the Senate bill that permits nonsimultaneous transmissions to be classified as simultaneous transmissions for certain non-contiguous United States areas. The provision, known as the "Stevens Amendment” does violence to the essence of copyright integrity, as Ms. Barabra Ringer, the Register of Copyrights, has pointed out, hence our opposition.

Nevertheless, it has been my personal feeling that Guam, situated more than 5,000 miles from the mainland and more than 3,000 miles from the nearest state, Hawaii, with only one commercial television station that operates for a limited number of hours, is deserving of special consideration.

I have sought, therefore, to meet with sympathy and a concern for the welfare of the residents of Guam, the problems presented to me by Mr. Lee Holmes in behalf of the Guam Cable system, a facility that serves some 9,000 homes on the Island. I also have taken into consideration Mr. Holmes' expressed desire to undertake cable operations on the Islands of Tinian and Saipan where scheduled military installations will bring in large numbers of American military families in the future.

Attached is a draft of an amendment to Section 111, jointly worked out and approved by Mr. Holmes and his Washington counsel and ourselves in behalf of the copyright owners. We trust that it will meet with your approval and that of the Members of your subcommittee and we bespeak your friendly considera

tion of it. A copy of my letter to Mr. Holmes, confirming our understanding and agreement is also attached for your information. With great respect and affection. Sincerely,

JACK VALENTI,

President.

LAW OFFICES OF RICHARD L. BROWN,

Washington, D.C., September 12, 1975. Mr. JACK VALENTI, President, MPAA, Washington, D.C.

DEAR JACK : I received your letter forwarding a copy of the proposed amendments to HR 2223. I spoke to Lee Holmes last night, who concurs that the agreement will provide a workable and equitable solution to the special problems of CATV transmissions in Guam and the Trust territory. Your suggestion to inform the subcommittee membership as soon as possible is a good one and I am forwarding a copy of my letter to you to each of the subcommittee members. I am also asking Chairman Kastenmeier for favorable consideration of the proposed amendments.

I will also write Mr. Won Pat; I believe that he will be delighted to know that the parties have been able to reach an agreement that will be beneficial to thousands of Guamanians and that adoption of the proposed amendments would alleviate the necessity for HR 4965. On behalf of Lee and myself, thank you for cooperating in this matter. The opportunity to reason this out together was both productive and enjoyable. Ed Cooper and Larry Monaco did a superb job in drafting the proposed amendments. Very truly yours,

RICHARD L. BROWN, Counsel for Guam Cable TV System, Inc.

LAW OFFICES OF RICHARD L. BROWN,

Washington, D.C., September 15, 1975. Re H.R. 2223. Hon. ROBERT W. KASTENMEIER, Chairman, Subcommittee on Courts, Civil Liberties, and the Administration of

Justice, Committee on the Judiciary, U.S. House of Representatives, Wash

ington, D.C. DEAR MR. CHAIRMAN: I am writing on behalf of Guam Cable TV System concerning testimony scheduled for September 18, 1975, relating to the so-called "Stevens Amendment.” It has always been the position of Guam Cable TV System that an accident of geography-great distance from the contiguous states should not make offshore CATV viewers second class citizens. That is, viewers are entitled to the full compliment of programming available to counterpart viewers in the contiguous states. Hence, passage of the so-called “Stevens Amend. ment” by the Senate last year in S. 1361.

Recently, Guam Cable TV System and the Motion Picture Association of America, Inc. have had several discussions concerning CATV operations in Guam and the Trust Territory of the Pacific. The MPAA has recognized our problems and we have recognized theirs. We propose to the Committee the language set forth in the attachment hereto. Also enclosed is an exchange of correspondence between my client and the Motion Picture Association of America, Inc. concerning the proposed amendments to HR 2223. In light of these facts. I am also writing to Mr. Won Pat asking him not to press for passage of HR 4965.

We hope that the Subcommittee will give favorable consideration to the proposed amendments which will be the subject of our testimony. Very truly yours,

RICHARD L. BROWN.

PROPOSED AMENDMENTS TO H.R. 2223 On page 17, between lines 18 and 19, insert the following: (e) Nonsimultaneous Secondary Transmissions By Cable Systems.(1) Notwithstanding those provisions of the second paragraph of subsection

(f) relating to nonsimultaneous secondary transmissions by a cable system, any such transmissions are actionable as an act of infringement under section 501, and are fully subject to the remedies provided by sections 502 through 506, unless :

(A) the program on the videotape is transmitted no more than one time to the cable system's subscribers; and

(B) the copyrighted program, episode, or motion picture videotaped, including the commercials contained within such program, episode, or picture, is transmitted without deletion or editing; and

(C) an owner or officer of the cable system (i) prevents the duplication of the videotape while in the possession of the system, (ii) prevents duplication while in the possession of the facility making the videotape for the system, (iii) takes adequate precautions to prevent duplication while the tape is being transported, and (iv) subject to paragraph (2), erases or destroys, or causes the erasure or destruction of, the videotape; and

(D) within 45 days after the end of each calendar quarter, an owner or officer of the cable system executes an affidavit attesting (i) to the steps and precautions taken to prevent duplication of the videotape, and (ii) subject to paragraph (2), to the erasure or destruction of all videotapes made or used during such quarter; and

(E) such owner or officer places or causes each such affidavit, and affidavits received pursuant to paragraph (2) (C), to be placed in a file, open to public inspection, at such system's main office in the community where the transmission is made or in the nearest community where such system maintains an office; and

(F) the nonsimultaneous transmission is one that the cable system would be authorized to transmit under the rules, regulations and authorizations of the Federal Communications Commission in effect at the time of the nonsimultaneous transmission if the transmission had been made simultaneously, except that this clause shall not apply to inadvertent or accidental

transmissions. (2) If a cable system transfers to any person a videotape of a program nonsimultaneously transmitted by it, such transfer is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506, except that any cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands may transfer, pursuant to a written, nonprofit contract providing for the equitable sharing of the costs of such videotape and its transfer, a videotape nonsimultaneously transmitted by it in accordance with paragraph (1), to another cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands, if :

(A) each such contract is available for public inspection in the offices of the cable systems involved, and a copy of such contract is filed, within 30 days after such contract is entered into, with the Copyright Office in the Library of Congress (which Office shall make each such contract available for public inspection); and

(B) the cable system to which the videotape is transferred complies with paragraph (1) (A), (B) (i), (iii), and (iv), and (C) through (F); and

(C) such system provides a copy of the affidavit required to be made in accordance with paragraph (1) (D) to each cable system making a previous nonsimultaneous transmission of the same videotape. (3) This subsection shall not be construed to supersede the exclusivity protection provisions of any existing agreement or any such agreement hereafter entered into, between a cable system and a television broadcast station in the area in which the cable system is located or a network with which such station is affiliated.

(4) As used in this subsection, the term “videotape", and each of its variant forms, means the reproduction of the images and sounds of a program or pro-grams broadcast by a television broadcast station licensed by the Federal Com-munications Commission, regardless of the nature of the material objects, such as tapes or motion pictures, in which the reproduction is embodied.

On page 17, line 19, strike out “(e)" and insert in lieu thereof “(f)”.

On page 17, line 29, immediately after "or”, insert a comma and the following: "in accordance with subsection (e),".

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