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LAW OFFICES OF RICHARD L. BROWN,

Washington, D.C., September 15, 1975. Hon. ANTONIO B. WON PAT, Cannon House Office Building, House of Representatives, Washington, D.C.

DEAR MR. WON PAT: As you know, Lee Holmes is scheduled to testify on September 18, 1975, concerning HR 2223 and your bill HR 4965. In the last several weeks, there have been extensive discussions with the Motion Picture Association of America, concerning the “Stevens Amendment” and your bill.

Enclosed you will find an exchange of correspondence between Mr. Valenti of the Motion Picture Association and myself, on behalf of Guam Cable TV System, and letters simultaneously sent with this one to members of the Subcommittee on Courts, Civil Liberties, and the Administration of Justice of the House Judiciary Committee. The discussions between Guam Cable TV System and the MPAA have led to the drafting of proposed amendments to the "Stevens Amendment” currently in HR 2223. You will note, that these amendments are largely derived from your bill HR 4965. Lee Holmes is satisfied that passage of HR 2223 with the proposed amendments will be of great benefit to the many thousands of Guamanians who view CATV and the passage of the proposed amendments would alleviate the necessity of HR 4965. With these facts in mind, Guam Cable TV System respectfully urges that there is no need for passage of both HR 4965 and HR 2223, if amended as proposed. We hope that you would agree with this conclusion and would so inform the delegations of other offshore areas and also Mr. Kastenmeier, Chairman of the Committee on Courts, Civil Liberties and the Administration of Justice.

Lee Holmes will arrive in Washington on September 16, 1975, and will call upon you when he arrives. With warmest regards,

RICHARD L. BROWN.

[Subsequent to the hearing the following statement and letter were received :)

STATEMENT BY HON. SPARK M. MATSUNAGA, MEMBER OF CONGRESS FROM HAWAII

Mr. Chairman, and members of the Subcommittee, I appreciate this opportunity to share with you my views on H.R. 9301, amendments to the Copyright Law, title 17 of the U.S. Code, which would allow cable antenna television (CATV) operators in non-contiguous areas of the United States to carry a full complement of videotaped programs for their paid subscribers, without incurring copyright liability.

The proposed legislation sets forth the operating procedures for CATV systems in non-contiguous areas regarding the transmission of nonsimultaneous, videotaped programs. It effectuates the ruling of the U.S. Supreme Court that CATV systems in the 48 states are not subject to copyright infringement for intercepting broadcast transmissions and rechanneling these programs simultaneously to their paid subscribers. The Court has determined that CATV systems are not “performers” of copyrighted programs, but act as adjuncts to regular broadcasting stations by extending the range of viewability. Consequently cable systems in the contiguous 48 states are not required to pay copyrigh: royalties.

The Court, however, did not contemplate the unique position of CATV systems in non-contiguous areas. These cable systems generally transmit nonsimultaneous videotaped programs because they are much too far away from the mainland to receive over-the-air signals. Recently, the CATV systems in Guam and Alaska have been involved in lawsuits with mainland network producers and other copyright holders who allege that imported videotaped programs constitute copyright infringement under the Copyright Act of 1909. Most of these lawsuits have been settled out of court but my bill would eliminate the expensive and protracted threat of future litigation.

Hawaii maintains an unusual position within this matrix. Unlike Guam, which has only one broadcasting station, Hawaii has five regular stations and eight district CATV systems. Its CATV systems usually receive signals from the regular stations which carry the three major networks, and thus have a lesser requirement for videotaped programs of their own. In August 1971,

the Federal Communications Commission also allowed Hawaii CATV systems to import two distant signals. If Hawaii does elect to import the two extra signals, its CATV systems may be vulnerable to a charge of copyright infringement. In effect, this bill would ensure the future growth of the cable television industry because most operators would be able to expand their services without fear or threat of lawsuits.

I would like to emphasize here that H.R. 9301 would neither compromise nor displace the Copyright Revision Bill, H.R. 2223, now under consideration in this Subcommittee. It is an interim measure to equalize the legal postures of CATV systems in contiguous and non-contiguous areas. Until a copyright bill passes which deals with technological advancements in television and radio broadcasting, this proposal would ensure that CATV systems in non-contiguous areas are not liable for royalties to copyright holders for secondary transmissions.

I believe that it is essential that the inequities be corrected. It is obvious that CATV systems in noncontiguous areas provide exactly the same service as do their counterparts within the 48 contiguous states, except that the means of obtaining all or some of the programs are different. Under the present law, isolated CATV systems are penalized for accidents in geography. Furthermore, contrary to unfounded reports, this bill would not prevent copyright holders from deriving just compensation for their works from cable television owners. In fact, the Supreme Court has declared that the broadcasting networks themselves may include cable television audiences when computing copyright programing fees. This bill would eliminate the need for a multitude of negotiations between cable television systems and copyright owners.

It is a sad fact that the Copyright Act of 1909, which is presently in effect, was drafted before broadcast television and cable television had even been conceived. Even the courts, on numerous occasions, have recognized the inapplicability of the statute to rapid technological developments and called for legislative reform. An omnibus copyright revision bill will definitely be needed to fortify the dam. But until that massive job is finished, I believe that this bill would plug particularly one inequitable leak. Thank you.

CBS Inc.,

Washington, D.O., September 19, 1975. Re H.R. 2223. Hon. ROBERT W. KASTENMEIER, U.S. House of Representatives, Washington, D.O.

DEAR MR. CHAIRMAN: This morning Mr. Jack Valenti, President of the Motion Picture Association of America testified before you with respect to that part of Section 111 of H.R. 2223 which would permit cable systems to tape television programs in the continental United States and exhibit them to cable subscribers in offshore United States possessions. Mr. Valenti disclosed that his Association had concluded discussions concerning CATV operations in Guam and the Trust Territory of the Pacific with the Guam Cable TV System and had agreed with the Guam Cable TV System on language modifying the provisions of Section 111. The modifications agreed upon also make unnecessary H.R. 4965 introduced by Mr. Won Pat. I understand that Richard L. Brown, on behalf of the Guam Cable TV System, has confirmed to you and to Mr. Won Pat his satisfaction with the agreement worked out by the Motion Picture Association.

The purpose of this letter is merely to convey to you, on behalf of CBS, its approval of the modified language in Section 111 of H.R. 2223. We hope, therefore, that the Subcommittee will adopt the recommended language. With warm personal regards, Sincerely,

RICHARD W. JENCKS,

Vice President, MOTION PICTURE ASSOCIATION OF AMERICA, INC.,

Washington, D.C., September 30, 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: A minor typographical error is contained in a paragraph designation in the modification to the so-called Stevens Amendment

-submitted to your Subcommittee. Two of the cross references in paragraph (2)(B) are incorrect.

For convenience, I am enclosing the complete text of the original proposed amendments with the corrections. Sincerely,

JACK VALENTI,

President. Enclosure.

(Corrected copy)

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 508, 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), (C) (i), (iii) and (iv) and (D) 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 programs broadcast by a television broadcast station licensed by the Federal Communications 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),”.

Mr. KASTENMEIER. At this time, the Chair would like to call Mr. Edward Cooper, vice president, Motion Picture Association of America, accompanied by Lawrence Monaco, vice president. TESTIMONY OF EDWARD COOPER, VICE PRESIDENT, MOTION PIC

TURE ASSOCIATION OF AMERICA, ACCOMPANIED BY LAWRENCE MONACO, VICE PRESIDENT

Mr. COOPER. Thank you, Mr. Chairman. I am Edward Cooper, vice president of the Motion Picture Association, and with me is Mr. Lawrence Monaco our legislative counsel.

We are substituting for Mr. Valenti, the president of the association, who has testified here before. He is in California for a series of conferences of utmost importance to the motion picture industry. He has asked me personally to apologize for his inability to be here, and give his regret that he cannot testify in person. Before you is a copy of his statement, to which is attached a copy of proposed amendments to the bill, H.R. 2223, and a detailed explanation of those amendments. I will not

Mr. KASTENMEIER. Without objection, that statement-
Mr. COOPER. I was just about to ask that.

Mr. KASTENMEIER (continuing]. And the proposed amendments will be inserted in the record.

[The prepared statement of Jack Valenti follows:] STATEMENT OF JACK VALENTI, PRESIDENT OF THE MOTION PICTURE ASSOCIATION OF

AMERICA, INC., AND THE ASSOCIATION OF MOTION PICTURE AND TELEVISION PRODUCERS, INC., ON NONSIMULTANEOUS TRANSMISSIONS BY OFFSHORE CABLE SYSTEMS

My name is Jack Valenti. I am President of the Motion Picture Association of America, a trade association whose members are the major American producers and distributors of copyrighted motion pictures. We are, therefore, the principal holders of the copyrighted program material seen on television and cable.

This statement also represents the view of and is filed in behalf of the Association of Motion Picture and Television Producers of Hollywood, California, whose membership comprises some 70 companies, large and small, employing more than 60,000 persons, who produce copyrighted motion pictures for theatrical exhibition and television viewing, and television series programs. I also privileged to speak for the Committee of Copyright Owners, an ad hoc committee of independent producers and distributors of filmed and taped copyrighted television programs. This committee was formed to coordinate its members' efforts in resolving copyright-cable television legislative problems and the regulatory issues that arise from time to time on the importation of television signals by cable systems.

I appreciate the opportunity to again testify on that part of Section 111 of H.R. 2223 and on H.R. 4965, the Won Pat Bill, both of which would permit cable systems to tape television programs in the continental United States and exhibit them to cable subscribers in offshore United States possessions.

The Motion Picture Association, the Association of Motion Picture and Television Producers, and the Committee of Copyright Owners are all opposed to the provision in Section 111 in its present form and to the Won Pat Bill as I pointed out in my statement to this Subcommittee on June 12, 1975.

At that time I explained that the proposal was first made in the Senate by Senator Stevens to meet a problem in Alaska and thus became known as the Stevens Amendment. It will be found on page 17, beginning on line 29 of the Bill. The Alaska problem was solved some months ago and no longer exists. As originally drafted, and as now incorporated in H.R. 2223, the so-called Stevens Amendment, and the Won Pat Bill, seek to re-define a "secondary transmission" by asserting that a non-simultaneous transmission shall be deemed to be a simultaneous transmission for certain offshore purposes.

However, throughout congressional consideration of the copyright bill, it has been my policy to attempt to conciliate differences, particularly when special circumstances are involved. That is why, when Mr. Lee Holmes, owner of the Guam Cable TV System and his counsel, Richard Brown, asked me to discuss the Stevens Amendment, I was pleased to do so.

My conferences with Mr. Holmes and Mr. Brown convinced me that as a matter of public interest the people who live on Guam deserved special consideration. Guam is more than 5,000 miles from the Western shore of the continental United States. It has only one commercial television station that operates for a limited number of hours daily. It is apparent that the people of Guam would be denied a fair share of television programming if the cable system was unable to tape programs on the mainland and fly them in.

Moreover, Mr. Holmes spoke of his intention to install and operate systems on the Islands of Tinian and Saipan where the United States Government is expected to create major military installations with large numbers of American service families. Mr. Holmes or other operators of those systems or systems elsewhere in the Marianas and the Trust Territory of the Pacific Islands would be able to use the program tapes supplied to Guam.

It seemed to me, therefore, that in the public interest we should make every effort to work out language acceptable to the parties and which we could recommend to this Subcommittee for its favorable consideration. The copyright owners and the Guam cable system have now reached agreement on such language. It modifies the provisions of Section 111 and makes the Won Pat bill unnecessary.

The modifying language we are recommending to the Subcommittee would permit cable systems in offshore areas covered by the so-called Stevens Amendment to ta pe television programs and show those taped programs to their cable subscribers without infringing any copyright, if the cable system satisfies the requirements stated in the modifying language.

As the Chairman and the Members of the Subcommittee are aware, letters affirming the agreement between the copyright holders and the Guam system have been sent the Committee by Mr. Brown in behalf of Mr. Holmes, and by myself in behalf of the two Associations and the Committee of Copyright Owners. Mr. Brown additionally has written the Delegate from Guam pointing out that his bill is no longer necessary. May I request, Mr. Chairman, that the letters be included in the record of these hearings.

We believe the proposal is in the public interest because it makes allowance for the special circumstances that affect United States offshore areas covered by the so-called Stevens Amendment now in H.R. 2223. For these reasons, we respectfully request that the Subcommittee adopt the recommended language.

I am attaching at the end of my statement the text of the proposed Amend. ments and a detailed explanation of them.

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

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