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(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 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 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),”.

EXPLANATION OF PROPOSED MODIFYING LANGUAGE The proposed modifying language would permit a cable system in offshore areas covered by the Stevens Amendment to tape television programs and show the programs to its subscribers, without infringing any copyright, if the cable system satisfies all of the following requirements :

(1) The system shows the taped program only one time.

(2) The copyrighted program, whether it is a motion picture, television series, a documentary, or any other television program, must be taped and shown by the cable system without any deletion or editing, including no deletion of commercials with one exception: The system is authorized to delete commercials prior to the beginning of, and after the end of, the motion picture, documentary, or other program being taped.

(3) The cable system is required to prevent duplication of the tape while the tape is in the system's possession and while it is in the possession of the facility making the tape. The cable system must also take adequate precautions to see that there is no duplication during any time the tape is being transported from one place to another. After showing the tape one time, the system shall destroy or erase the tape, unless the tape is being transferred to another cable system in accordance with the proposed language.

(4) Every 3 months the cable system is required to execute an affidavit on the measures it has taken during the preceding 3-month period to prevent duplication. Each affidavit must be made available for public inspection by the cable system.

(5) The cable system may tape and show its subscribers only those television programs which the system is permitted to show live under FCC rules (but cannot do so because of geographical distance). If, however, the system inadvertently or accidentally shows a program that it would not have been permitted to show live, no copyright infringement occurs.

A cable system is prohibited from transferring any of its videotapes to another cable system for showing to the other system's subscribers unless that other system is located in Guam, the Northern Marianas, or the Trust Territory of the Pacific Islands, and unless certain additional requirements are met.

The first condition is that the transfer may be made only under a nonprofit contract providing for the equitable sharing of the costs of the tape among the authorized cable systems using the tape. These costs include the purchase price of the blank tape, the processing costs, and the transportation and handling costs in transferring the tape from the taping facility to the first cable system and thereafter to each system. The contract must be filed in the office of each cable system and with the Copyright Office in the Library of Congress. Each system to which the videotape is transferred must comply with the same requirements that bind the cable system which originally showed the tape. However, the subsequent system users are not covered by the prohibition against the duplication at the taping facility. In addition, each cable system must furnish a copy of its affidavit to every cable system which previously had shown the same tape.

The last provision of the proposed, modifying language makes clear that any existing or future contract between a cable system and a television station or network that provides for exclusivity or nonduplication protection may not be superseded by the amendment. For example, assume cable system X tapes the programs of a Los Angeles television station and shows them in Guam. The Guam television station shows many of the same programs that the Los Angeles station does. The Guam television station and cable system sign a contract that provides that the cable system will not show the Los Angeles-taped programs for a specified period of time immediately following the showing in Los Angeles. If the Guam television station has not shown the program after the end of the period, the Guam Cable System may then show the program unless the Federal Communications Commission has adopted a contrary rule.

Mr. COOPER. Thank you. I will not take the time to read Mr. Valenti's statement, because I think your time is precious. We don't really need it. I hope the committee will have an opportunity to read Mr. Valenti's statement.

The members of the committee have received the letters the chairman just referred to from both Mr. Valenti and Mr. Holmes, explaining that an agreement had been worked out on legislative changes in the bill between the copyright holders and Mr. Holmes on behalf of the cable system. That agreement is embraced in the proposal that has been submitted to the committee. As the committee knows and as Mr. Valenti testified here last June, he made clear the sharp concern of copyright holders with the language in the bill, 2223, on page 17, beginning line 29, which has commonly been referred to as the “Stevens amendment” because it came over from the Senate bill. That provision would have permitted cable systems to tape television programs in the continental United States and exhibit them to subscribers in offshore possessions of the United States. Our concern, then, was that this pro

vision failed to take into consideration the lawful rights and interests of copyrighted owners in their copyrighted copies. It did so by redefining a secondary transmission, so that what was actually not a nonsimultaneous transmission could be held to be a simultaneous transmission in these offshore areas.

We were further disturbed because the provision lent itself to the misuse of taped material through piracy of the programs. Piracy of films currently costs our industry many millions of dollars annually.

The Won Ďat bills, H.R. 4965 and 9301, have the same deficiency by permitting widespread taping, but they closed, fortunately, some of the piracy loopholes, a proposal which we strongly endorse, and which has been incorporated into the amendments we respectfully propose to the committee.

Moreover, there was another factor. Guam presented an unusual situation because of its distant geographical location, coupled with the inability Mr. Holmes referred to of the cable system to obtain adequate local programing. As Mr. Valenti noted in his statement before you, and as Mr. Holmes has pointed out, a series of meetings was held with Mr. Holmes and his counsel and a good faith effort was made to seek a legislative compromise that would meet the current situation in Guam and in the adjacent islands and in the Pacific Trust Territories.

In short, the Won Pat bills formed the basis for those provisions in the agreement that protect the integrity of the tapes in a manner satisfactory to the copyright holders.

On our part, we have made special concessions on the use and the handling of tapes for Guam and the far Pacific. We respectfully ask the committee's favorable consideration of what the parties have agreed upon. But clearly, we think that what has been agreed upon is greatly in the public interest.

I thank you.

Mr. KASTENMEIER. Thank you very much, Mr. Cooper, for presenting Mr. Valenti's statement to us and a restatement of his position and that of your association. Needless to say, when a matter can be reconciled, such as in this case, the committee is very happy indeed.

The committee will, of course, examine it, because we do not need to be reminded that we represent more than merely two parties to a potential dispute, but I would assume that what you have agreed to can be accepted as being in the public interest?

Mr. Cooper. We certainly believe so, Mr. Chairman. Mr. KASTENMEIER. I would like to yield to the gentleman from Illinois.

Mr. RAILSBACK. I want to thank you for your testimony this morning, and also just say that I want personally to welcome the Holmes, whom I met while visiting Guam. I was with the Eilberg subcommittee and we received tremendous hospitality from the Governor and all of the Guamanians and also we had a chance to visit the northern Marianas. I was very impressed with the desire of those people to become American citizens. So, we are happy to hear you and we are glad you worked out an agreement.

Mr. HOLMES. Thank you very much, sir.

Mr. DRINAX. I take it, from what I heard, that nonsimultaneous recording in noncontingent use areas is a nonproblem?

Mr. COOPER. That is well put.

Mr. DRINAN. I am just delighted and I congratulate you. I yield back my time.

Mr. KASTENMEIER. The gentleman from New York.
Mr. PATTISON. No questions.

Mr. KASTENMEIER. If there are no further questions, then, we appreciate the appearance of Mr. Cooper and Mr. Holmes and their colleagues.

Settlement of the issue between the parties is reflected in the following correspondence:

(1) Letter from Jack Valenti, president, Motion Picture Association, to the Chair, dated November 7, 1975, and enclosure, and (2) letter from Senator Ted Stevens of Alaska to the Chair, dated November 10, 1975.

MOTION PICTURE ASSOCIATION OF AMERICA, INC.,

Washington, D.C. November 7, 1975. Hon. ROBERT W. KASTENMEIER, Chairman, House Subcommittee on Courts, Civil Liberties, and the Administration

of Justice, Washington, D.C. MY DEAR MR. CHAIRMAN: You will recall that under date of October 8, 1975 Senator Stevens wrote you with respect to the agreement on the taping of programs for nonsimultaneous transmission by cable systems in offshore areas as jointly agreed to by Mr. Lee Holmes in behalf of the Guam cable system and myself in behalf of the copyright holders.

Senator Stevens praised the parties for their willingness to work out an agreement but suggested that consideration be given to further changes that would permit so-called "bicycling" of tapes within Alaska (as permitted between Guam and within the Pacific trust territories) and that the liability of cable systems for piratical taping be modified.

This is to advise you that our staff people met with Senator Stevens' staff and with your committee counsel, Mr. Fuchs during which it was agreed to work out language to meet Senator Stevens' request. Subsequently, the Senator asked that we further modify a cable system's liability against duplication and we have done so.

Attached herewith is the complete text of the Stevens-Won Pat amendment as further modified at Senator Stevens' request. I assume that Senator Stevens will advise you of his approval of what has been done. I hope that this additional compromise will be satisfactory to you and your subcommittee. Sincerely,

JACK VALENTI,

President. (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 unauthorized duplication while in the possession of the facility making the videotape for the system if the system owns or controls the facility, or takes reasonable precautions to

prevent such duplication if it does not own or control the facility, (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 para. graph (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,] may be transferred by one cable system in Alaska to another system in Alaska, by one cable system in Hawaii permitted to make such nonsimultaneous transmissions to another such cable system in Hawaii, or by one cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands, to another cable system in any of those three territories, if:

(A) each such contract is available for public inspection in the offices of the cable system 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 (1) 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 Communications Commission, regardless of the nature of the material objects, such as tapes or motion pictures, in which the reproduction is embodied.

One 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),”.

U.S. SENATE,
COMMITTEE ON COMMERCE,

Washington, D.C., November 10, 1975.
Hon. ROBERT W. KASTENMEIER,
Chairman, House Subcommittee on Courts, Civil Liberties and the Administra-

tion of Justice, Washington, D.C. DEAR MR. CHAIRMAN: Pursuant to my October 8th letter to you concerning several problems I had with proposed amendments to Section 111 of the Omnibus Copyright Bill, my office has had the benefit of several discussions with representatives of the Motion Picture Association in an attempt to reach agree

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