ment on these matters. I am pleased to report to you that such agreement has now been reached. As you will recall, these problems affected copyright matters pertaining to non-contiguous cable systems. At the behest of Mr. Fuchs, of your office, several discussions were held and agreement was reached on working for these proposed amendments which address the concerns of both the Motion Picture Association and the cable operators in Alaska. It is my understanding that you are in possession of a copy of the revised wording for these proposed amendments, contained in Mr. Valenti's November 7th letter to you concerning this matter. I wish to thank you and your fellow members on the Subcommittee for your interest and hard work on behalf of the Alaskan Cable system. With best wishes, TED STEVENS, U.S. Senator. Mr. KASTENMEIER. Now, the committee would like to turn to the questions of ephemeral recording rights, involving music of a religious nature, as appears in Section 112 (c). Our first witness on that subject this morning is Albert Ciancimino. TESTIMONY OF ALBERT F. CIANCIMINO, COUNSEL, SESAC, INC., OF NEW YORK Mr. CIANCIMINO. Well, I am not General SESAC, as on the witness list, but I thank you for allowing me to be here today. Mr. Chairman, I would like to submit the complete text of my statement to you. Mr. KASTENMEIER. Without objection, your statement in its entirety will be accepted and made a part of the record. [The prepared statement of Albert Ciancimino follows:] STATEMENT OF ALBERT F. CIANCIMINO, COUNSEL FOR SESAC, INC. Mr. Chairman, members of the Committee, my name is Albert F. Ciancimino, and I am a member of the New York Bar and counsel to SESAC Inc. in New York. The main issue involving Section 112(c) of H.R. 2223 is relatively simple. It is whether or not a religious program producer can use a piece of religious music and distribute it to approximately 4,000 radio stations without any compensation to the creator of that religious music. Stripping away all of the other issues and side-issues, we basically come to the question-Is Congress going to provide that the creator of a religious copyright is to continue to have the right to receive payment for the mechanical reproduction of his work by a religious program producer, or for the first time in the history of the United States Copyright Act, is Congress going to say that in the area of mechanical reproduction rights, an outright exemption is going to be granted. You may remember, Mr. Chairman and members of the Committee, that even the Public Broadcasting Service representatives have not asked for an exemption in the mechanical rights area, but rather have asked for a statutorily governed fee to be set by Congress. The National Religious Broadcasters are going one step beyond the educators and public broadcasters by asking for this total exemption. It is our position that no such exemption is justified and it should not be granted. In the Summer of 1973, I had the pleasure of appearing before a Senate Subcommittee on this very issue. At that time, as now, I testified since the 112(c) exemption is already in the proposed Copyright Revision Bill. Testimony given by the National Religious Broadcasters after my appearance, therefore, went unrebutted. I will now refer to and answer segments of the NRB's prior testimony in order to set the record straight. In 1973, the NRB made much of the fact of the three performing rights organizations (ASCAP, BMI and SESAC), only SESAC was asking religious program producers to sign licenses for recordings of religious music on their transcribed programs. It was implied that SESAC was overreaching and applying undue pres sure in an area where the other two organizations were not causing any problems. To quote from the NRB's 1973 testimony: "Religious program producers have reported no problems in this respect with ASCAP or BMI. Only SESAC, according to frequent reports, has pressured certain of the religious program producers to make such payments." The NRB failed to point out, however, that ASCAP and BMI cannot ask for mechanical licenses in this area because they do not represent the mechanical rights on behalf of their affiliates. Both ASCAP and BMI represent only the performance rights. SESAC alone of the three organizations represents not only the performance rights but also the mechanical and synchronization rights on behalf of its affiliates. I believe the NRB is well aware of this basic fact of life in our industry, and I am dismayed that such a fact has been so terribly distorted. One thing should be made clear. We have no desire to inhibit the broadcasting of religiously oriented programs. To the contrary, we are simply trying to maintain the integrity of a religious copyright and we are simply trying to preserve to the creator of a religious copyright those rights which are now, and even under H.R. 2223, will continue to be available to the creator of non-religious copyrights. Why should one who creates a religious work be treated as a second class citizen? Clearly, even under the NRB's proposal as reflected in 112(c), this exemption is to be granted only with regard to religious works. If Oral Roberts or Billy Graham uses a non-religious work on his program, there is no question that he will be responsible for the payment of mechanical royalty fees. The creator of a religious copyright has the same expenses as the creator of a non-religious copyright. He must pay the same for a loaf of bread or a bottle of milk. Why then the distinction in allowing the author of a non-religious work a broader earning base than the creator of a religious copyright. Also, one can imagine the very substantial problems of determining what is a religious work. In many instances, whether a work is of a religious nature is determined on a subjective basis by each listener. In 1973 the NRB also asserted: "Any law requiring or leaving open the possibility that mechanical reproduction fees be paid for such use could make this music too expensive in the average religious broadcast. . . ." The fact of the matter is that the usual charge to a program producer for the use of a copyright in a transcribed program to be heard on radio is a rather nominal $10.00 per year per copyright for unlimited use of that copyright during that year. I think that organizations such as Billy Graham's Hour of Decision, The Lutheran Hour, The Baptist Hour and others cited by the NRB in 1973 as NRB members can well afford to pay the creator of a religious song $10.00 a year for unlimited use of that song. If they can afford this more than half-page ad in a Minneapolis newspaper earlier this month to attract viewers and listeners of the Word of God, they surely can pay those creating the music of God. The NRB in 1973 said over and over again that responsible religious broadcasting is a non-profit activity carried on as a ministry. We again emphasize that we have no quarrel with the importance of such a ministry and with the fact that the country needs more of this kind of broadcasting. All we ask is that these non-profit organizations (many of whom are rather large and wealthy) pay for the use of their religious music just as they pay for their newspaper advertisements, their electricity, their studio and auditorium rental, their executive salaries, their plane fares from city to city, their guest starts and every other expense normal to their business. Again in 1973 the NRB stated and again today they state: "The proposed mechanical reproduction exemption would cause no measurable injury to religious music copyright owners, their publishers or agents. . . ." What is left unsaid is that many of the program producers at the behest of NRB have refused to pay mechanical royalties pending resolution of this issue by Congress. However, if they recognize their current obligations under the 1909 law, as have some of their associates, a more substantial amount of income would be accruing to copyright proprietors today. Therefore, the injury to religious music copyright owners is both measurable and substantial, as evidenced by the list of endorsements appended to my testimony in 1973 from the foremost copyright proprietor organizations in the industry. Letters were submitted in agreement with SESAC's basic position from The Church Music Publishers Association, The National Music Publishers Association, The Music Publishers Association, BMI, ASCAP, The Harry Fox Agency, The American Guild of Authors and Composers and The National Gospel Music Publishers Association. Mr. Chairman, should you wish copies of the full letters of endorsement which are already contained in the record of the Senate hearings held in 1973, I will be more than happy to supply them to you. These organizations represent substantially all of the responsible copyright proprietor interests in the United States today and all of them are opposed to the inclusion of Section 112(c) in the pending Revision Bill. I might also add that the American Bar Association passed a resolution in 1973 which opposes 112 (c) in its entirety. It is interesting to note that in the monthly newsletter of the NRB called "Hotline", the June 1975 issue referred to a petition filed with the FCC which the NRB claimed “clearly discriminates against sectarian groups" and the NRB pointed out that the religious orientation of an applicant should not be used as a basis for determining its eligibility for a commission license. SESAC wholly endorses this position and we further ask that the religious orientation of a copyright creator not be used as a basis for determining his eligibility to receive copyright royalty payments. Before concluding, I must touch upon the often used NRB argument that 112(c) would eliminate unfair double fees. The NRB points to the performance payment made by a radio station to SESAC, ASCAP and BMI, generally under a blanket licensing arrangement, as well as the payment of a mechanical royalty under the current law by the program producer. This is no different, Mr. Chairman, from a situation where a commercial record company, such as Columbia, Decca, RCA, etc. would pay the copyright proprietor a mechanical reproduction fee for each record pressed, while at the same time the broadcaster pays a performance fee for his performance of the recording over the air. There is no "double fee". There are simply different uses being made by different people, each of which justifiably calls for compensation to the copyright owner. In conclusion, I ask this sub-committee to consider and weigh the practical necessities for such an exemption as exists in 112(c) against the far-reaching and negative effects which it will have not only on trade industry practice as currently exists, but on the unwarranted dilution of the rights originally granted to the copyright proprietors by Congress in 1909. Only by allowing the copyright proprietor of religious works equal rights and an equal opportunity to earn a living, will we continue to enjoy the kind of music which has contributed to and hopefully will continue to contribute to the moral fiber of our great country. Thank you. Mr. CIANCIMINO. I will try to omit certain portions of the statement in the interest of time. The main issue involving section 112(c) of H.R. 2223 is relatively simple. It is whether or not a religious program producer can use a piece of religious music and distribute it to approximately 4,000 radio stations without any compensation to the creator of that religious music. You may remember, Mr. Chairman and members of the committee, that even the Public Broadcasting Service representatives have not asked for an exemption in the mechanical rights area, but rather have asked for a statutorily governed fee to be set by Congress. The National Religious Broadcasters are going one step beyond the educators and public broadcasters by asking for this total exemption. It is our position that no such exemption is justified and it should not be granted. In the summer of 1973, I had the pleasure of appearing before a Senate subcommittee on this very issue. At that time, as now, I testified first since the 112(c) exemption is already in the proposed copyright revision bill. Testimony given by the National Religious Broadcasters after my appearance, therefore, went unrebutted. I will now refer to and answer segments of the NRB's prior testimony in order to set the record straight. By the way, I noted from reading the statement made by the NRB that all of the points I am addressing myself to are repeated in their testimony before you this morning. In 1973, the NRB made much of the fact that of the three performing rights organizations-ASCAP, BMI, and SESAC-only SESAC was asking religious program producers to sign licenses for recordings of religious music on their transcribed programs. It was implied that SESAC was overreaching and applying undue pressure in an area where the other two organizations were not causing any problems. To quote from the NRB's 1973 testimony: I might add, it is in their testimony today, too. To quote from the NRB's 1973 testimony: Religious program producers have reported no problems in this respect with ASCAP or BMI. Only SESAC, according to frequent reports, has pressured certain of the religious program producers to make such payments. The NRB failed to point out, however, that ASCAP and BMI cannot ask for mechanical licenses in this area because they do not represent the mechanical rights on behalf of their affiliates. Both ASCAP and BMI represent only the performance rights. SESAC alone of the three organizations represents not only the performance rights but also the mechanical and synchronization rights on behalf of its affiliates. I believe the NRB is well aware of this basic fact of life in our industry, and I am dismayed that such a fact has been so terribly distorted. One thing should be made clear. We have no desire to inhibit the broadcasting of religiously oriented programs. To the contrary, we are simply trying to maintain the integrity of a religious copyright and we are simply trying to preserve to the creator of a religious copyright those rights which are now, and even under H.R. 2223, will continue to be available to the creator of nonreligious copyrights. Why should one who creates a religious work be treated as a second class citizen? The creator of a religious copyright has the same expenses as the creator of a nonreligious copyright. He must pay the same for a loaf of bread or a bottle of milk. Why then the distinction in allowing the author of a nonreligious work a broader earning base than the creator of a religious copyright? Also, one can imagine the very substantial problems of determining what is a religious work. In many instances, whether a work is of a religious nature is determined on a subjective basis by each listener. In 1973 the NRB also asserted: Any law requiring a leaving open the possibility that mechanical reproduction fees be paid for such use could make this music too expensive in the average religious broadcast. The fact of the matter is that the usual charge to a program producer for the use of a copyright in a transcribed program to be heard on radio is a rather nominal $10 per year copyright for unlimited use of that copyright during that year. I think that organizations such as Billy Graham's Hour of Decision, the Lutheran Hour, the Baptist Hour, and others cited by the NRB as NRB members in 1973 can well afford to pay the creator of a religious song $10 a year for unlimited use of that song. If they can afford this more than the half-page ad in a Minneapolis newspaper earlier this month to attract viewers and listeners of the Word of God, they surely can pay those creating the music of God. The NRB in 1973 said over and over again that respon sible religious broadcasting is a nonprofit activity carried on as a ministry. We again emphasize that we have no quarrel with the importance of such a ministry and with the fact that the country needs more of this kind of broadcasting. All we ask is that these nonprofit organizations-many of whom are rather large and wealthypay for the use of their religious music just as they pay for their newspaper advertisements, their electricity, their studio and auditorium rental, their executive salaries, their plane fares from city to city, their guests stars, and every other expense normal to their business. Again in 1973 the NRB stated, and again today they state: The proposed mechanical reproduction exemption would cause no measurable injury to religious music copyright owners, their publishers or agents***. What is left unsaid is that many of the program producers at the behest of NRB have refused to pay mechanical royalties pending resolution of this issue by Congress. However, if they recognize their current obligations under the 1909 law, as have some of the associates, a more substantial amount of income would be accruing to copyright proprietors today. Therefore, the injury to religious music copyright owners is both measurable and substantial, as evidenced by the list of endorsements appended to my testimony in 1973 from the foremost copyright proprietor organizations in the industry. Letters were submitted in agreement with SESAC's basic position from the Church Music Publishers Association, the National Music Publishers Association, the Music Publishers Association, BMI, ASCAP, the Harry Fox Agency, the American Guild of Authors and Composers, and the National Gospel Music Publishers Association. Mr. Chairman, should you wish copies of the full letters of endorsement which are already contained in the record of the Senate hearings held in 1973, I will be more than happy to supply them to you. These organizations represent substantially all of the responsible copyright proprietor interests in the United States today and all of them are opposed to the inclusion of section 112 (c) in the pending revision bill. I might also add that the American Bar Association passed a resolution in 1973 which opposes 112(c) in its entirety. It is interesting to note that in the monthly newsletter of the NRB called Hotline, the June 1975 issue referred to a petition filed with the FCC which the NRB claimed "clearly discriminates against sectarian groups" and the NRB pointed out that the religious orientation of an applicant should not be used as a basis for determining its eligibility for a commission license. SESAC wholly endorses this position and we further ask that the religious orientation of a copyright creator not be used as a basis for determining his eligibility to receive copyright royalty payments. In the interests of time, I will conclude, Mr. Chairman, by asking this subcommittee to consider and weigh the practical necessities for such an exemption as exists in 112(c) against the far reaching and negative effects which it will have not only on trade industry practice as currently exists, but on the unwarranted dilution of the rights originally granted to the copyright proprietors by Congress in 1909. Only by allowing the copyright proprietors of religious works equal rights and an equal opportunity to earn a living, will we continue to |