matter of copyright; second, with the problem of fair use in reproduction for educational purposes; and third, of the problem of library and archival photocopying.

This is as far as we got. I do not see much point in reviewing the rather complicated testimony I gave. It is in the record. But I will be glad to answer any remaining questions you have on those three chapters of the report, those three big areas of subject matter. I think we covered them pretty thoroughly.

With your permission, I will go on to chapter 4 then.

Mr. KASTENMEIER, Please do.

Ms. RINGER. Chapter 4 of the supplementary report deals with limitations on performance rights, with the exception of those limitations dealing with nonprofit broadcasting, which I hope to get to before the day is over.

Let me start with a very general review of section 110, which is a key section in the bill. It lays out eight specific areas in which performing rights of various sorts are limited in one way or another. I will just run them down. They are on page 3 of the chapter.

First is face-to-face teaching activities.

The second, instructional broadcasting, I will cover under what is chapter 6 of the supplementary report.

The third is performances in the course of religious services. Fourth is live performances without commercial advantage to anyone. This was a rather complicated and at one time controversial provision that has not attracted any attention for some years.

The fifth is an important section and is one of the things I will talk about today-the mere reception of broadcasts in a public place, such as a restaurant.

The sixth was added in the Senate after you had finished with the bill in 1967: annual agricultural and horticultural fairs.

The seventh is similarly in response to proposals put forward by very special interests, public performance in connection with the sales of sheet music and records.

The eighth was added in the full Senate Judiciary Committee on October 7-for noncommercial broadcasting to the blind or deaf.

The two questions that were not raised during the hearings but are presented by this section I can I think characterize very generally as the Aiken case question, the subsection (5) question, and the ballroom question, which was presented directly to the Senate Judiciary Committee in its markup and voted upon. It was voted down. I will come to this in my explanation.

Let me talk first about subsection (5). I think it is short enough for me to read: "Communication of a transmission embodying a performance or display of work by the public reception of the transmission on a single receiving apparatus of the kind commonly used in private homes." This is exempted unless, first, a direct charge is made, or second-and this is crucial-the transmission thus received is further transmitted to the public.

You probably are unaware of this as an issue because it was not raised as such during the hearings. It has been a roiling issue in U.S.

copyright law going back to the 1930's and the early days of radio. Actually, it was known for many years as the Jewell-LaSalle question after a Supreme Court decision. As it was interpreted, the doctrine of the so-called Jewell-LaSalle case was that copyright owner had the right to collect for the retransmission of radio broadcasts taken off the air in public places such as in the Jewell-LaSalle case itself, the private rooms of a public hotel. This was considered settled law although the decision itself left some ambiguities.

But in any case, this had seemed to settle down as an issue until just after some of these performing rights questions were discussed during your hearings. The Supreme Court on June 17 handed down a decision which, I think, requires your attention to this subsection again.

Let me skip over the discussion in my report of this issue up to the point of the Aiken decision and review, reading from page 7, what that decision held and what it seems to mean. The Aiken case involved a fast-food chicken shop in Pittsburgh. The defendant was the owner and operator of this shop. Quoting from the decision, he had "a radio with outlets to four speakers in the ceiling," which he apparently turned and left on throughout the business day. Lacking any performing license, he was sued for copyright infringement by two ASCAP members. He lost in the District Court, won a reversal in the Third Circuit Court of Appeals, and finally prevailed, by a margin of 7 to 2, in the Supreme Court. The majority opinion was delivered by Justice Stewart; Justice Blackmun wrote an opinion disagreeing with practically everything in the majority opinion, but concurring with the result; and Chief Justice Burger wrote a blistering dissent in which Justice Douglas joined.

The Aiken decision is based squarely on the two Supreme Court decisions dealing with cable television, in both of which Justice Stewart also wrote the majority opinions. In the Fortnightly case and again in the Teleprompter case, the Supreme Court had held that a CATV operator was not "performing," within the meaning of the 1909 statute, when it picked up broadcast signals off the air and retransmitted them to subscribers by cable. The Aiken decision extends this interpretation of the scope of the 1909 statute's right of "public performance for profit" to a situation outside the CATV context and, without expressly overruling Jewell-LaSalle case, effectively deprives it of much meaning.

For fore than 40 years, the Jewell-LaSalle rule was thought to require a business establishment to obtain copyright licenses before it could legally pick up any broadcasts off the air and retransmit them to its guests and patrons. As reinterpreted by the Aiken decision, the rule of Jewell-LaSalle apparently applies only if the broadcast being retransmitted was itself unlicensed, which is a rare situation, as you can imagine.

Justice Burger's dissent is worth quoting, I think, not only in relation to this problem, but in relation to the task before you. He says:

There can be no really satisfactory solution to the problem presented here until Congress acts in response to longstanding proposals. My primary purpose

in writing is not merely to express disagreement with the Court but to underscore what has repeatedly been stated by others as to the need for legislative action. Radio today is certainly a more commonplace and universally understood technological innovation than CATV, for example, yet we are, basically, in essentially the same awkward situation as in the past when confronted with these problems.

We must attempt to apply a statute designed for another era to a situation in which Congress has never affirmatively manifested its view concerning the competing policy considerations involved.

Yet, the issue presented can only be resolved appropriately by the Congress; perhaps it will find the results which the Court reaches today a practical and equitable resolution, or perhaps it will find this "functional analysis" too simplistic an approach.

The reference there is to the interpretation of Justice Stewart in the Fortnightly and Teleprompter case which was carried over to Aiken. It said that, functionally, the CATV operator or the chicken shop operator was operating as a viewer rather than as a performer or broadcaster when it retransmitted the broadcast, which was licensed. The immediate result of this was that several people got phone calls from the press asking what would be the result under the case if it were being decided under the revised law, and the answers were conflicting. It was apparent that this had not been really thought through in these terms. The legislative history I have laid out here implied that the result would be different depending on whether or not you read the House report from 1967 or the Senate report from 1974 or particularly the Senate report that will emerge shortly, and this is obviously not a satisfactory way to leave this problem, which is too important to just pass over.

I should say the bill as reported by the Senate did not change the wording of subsection (5) at all, but I am sure the language in the report will be changed, and my impression, based on what I have been told, is that it will probably indicate that subsection (5) should be interpreted in favor of the copyright owner in the Aiken factual situation.

Mr. KASTEN MEIER. May I say to members of the committee, you do not have to wait until the end of Ms. Ringer's presentation with urgent questions or points that you may want to make. Please feel free to ask it.

Mr. DRINAN. Thank you, Mr. Chairman.

I just ask this question: How could they possibly expect to change the statutory language if they are going to keep (5) here, 110(5) (a) and (b)? How could they possibly change it by saying this does not apply in the Aiken situation? The language there gives the right to the gentleman with the restaurant it seems to me.

Ms. RINGER. It is arguable. I think the language of the report your subcommittee adopted in 1967 would probably have leaned in the way you are suggesting. I do not think anyone had really thought through what is a "receiving apparatus of the kind commonly used in private homes." I am not sure what Aiken had. He had four large speakers, but they were obviously placed for reception by his customers, not by himself.

I am assuming-I do not think we need to reargue the Aiken case. Let me read you my conclusion, and perhaps that might answer your question in some way.

Mr. DRINAN. What page is this on?

Ms. RINGER. This is on pages 10 and 11. The language of section 110 (5) seems adequate to express the intended scope of the exemption, and any effort to make the provision more explicit by reference to the size of the establishment, the number of patrons, the number of loudspeakers, et cetera, could freeze the provision unnecessarily and leave unpredictable loopholes.

But it seems imperative for fresh consideration to be given to the interpretation of section 110 (5) in both Senate and House reports. The commentary should provide a consistent answer to the frequently asked question: How would the Aiken case be decided under the 1975 revision bill? As things stand now, the House reports of 1966 and 1967 and the Senate report of 1974 are inconclusive, while the 1975 Senate report, now in the form of a draft before the full Senate Committee on the Judiciary, may in its final form state: "This clause is not intended to generally exempt performances or displays in commercial establishments for the benefit of customers or employees."

The main point I am trying to get across is that this should be interpreted consistently. It should not be left up in the air, as it is now. The legislative history of section 110(5) indicates that the provision was based in part on the traditional, pre-Aiken interpretation of the Jewell-LaSalle decision, and that public communication by means other than a home receiving set or further transmission of a broadcast to the public was not intended to be exempted. The Aiken majority based its decision on a narrow construction of the word "perform" in the 1909 statute, which in turn was impelled by the earlier CATV precedents. This is what Justice Blackmun was decrying in his concurring opinion.

This basis for the decision would be completely overturned by the revision bill. It is reasonable to assume that Mr. Aiken's apparatus was not an ordinary home receiving set and that, if four speakers were necessary for proper reception by all his customers, there was a further transmission-that is, a communication "whereby images or sounds are received beyond the place from which they were sent." This is the definition of "transmit" in the definitions section.

In other words, all

Mr. RAILSBACK. Where do you come down on that issue?

MS. RINGER. I came down on the side of an interpretation that would make clear that you would be liable if the receiving set was not of the ordinary home receiving set variety, and you would not be excused by merely stringing speakers-in other words, there is a line that has to be drawn.

Mr. RAILSBACK. You would further specify in the Senate report? Ms. RINGER. I have not seen the final version of the marked up fullcommittee report. My impression is that it will come close to saying that any commercial use of music in this type of situation would be an infringement. I would not go that far. I would say the distinction is whether or not you are actually retransmitting from something that is not home-receiving apparatus. I am inclined to think that is probably what Aiken was doing.

The Court may well have been right in what it was deciding under the 1909 law and may well have been bound by the CATV precedents. There was some regret expressed. They felt themselves trapped into this because there has been licensing in areas like this, and it was a

drastic thing to do to declare this long-standing interpretation of and earlier Supreme Court decision incorrect.

Mr. RAILSBACK. So where they would use some apparatus in addition to the home receiving set, you would make that distinction?

MS. RINGER. Of course, you have quadrophonic stereo reception now, which presumably involves four speakers. If you have four speakers, a very nice hi-fi rig behind your bar, for example, in a restaurant, and the people that are sitting at the bar get the benefit of it, I would say that would not be an infringement, but if you are stringing the speakers around the restaurant so that people in all four corners or all of the areas of the restaurant or all of the rooms of the restaurant are getting the performance, I think that was what subsection 5(b) was intended to catch, intended not to exclude from the exemption.

Mr. KASTENMEIER. Is it your point of view-apparently we do not know-I read the case of course that Mr. Aiken had a home receiving set, but nonetheless strung four speakers to various parts of his establishment.

Ms. RINGER. I am not clear as to what kind of receiving set he had. Of course, some home receiving sets are very sophisticated. It may well have been something that would fall within that, but he did string four speakers to it, and it was I think recognizable as a commercial motivation rather than a simple mom-and-pop type of candy store I'll-entertain-myself-while-I'm-waiting-for-customers type of operation.

This is, of course, something that needs to be addressed in the report. I do not think there is any necessity for amending the bill.

Mr. DRINAN. Ms. Ringer, would you explain at the bottom of page 9 and 10 the proposed addition to section 501? How does that fit in with the rest of your

MS. RINGER. That is the next point. It is completely unrelated.

Mr. DRINAN. We should just let her talk. Everything flows so well. Ms. RINGER. This is ballroom point. It is completely unrelated. I guess there is some remote relation to the basic liability question, but essentially this was a proposal put forward on behalf of entrepreneurs who contract with independent musicians or combos, and they are not employed. It is an independent contract relationship. The performers arrive, and they unpack their material. They play. Nobody controls what they are playing, and they get back in their van and go on, and somebody from the performing rights society is in the audience, and they sue the proprietor. They consistently win in the Courts, and there was an effort in the Senate-which I believe also produced at least one letter here to your subcommittee-proposing further amendment. That would in fact be to section 501, but it is really more relevant to this subsection-that is why I put it here-which would read, at the top of page 10:

Notwithstanding any other provision of this title, the proprietor of an establishment in which nondramatic musical work is performed by or under the exclusive directions of an independent contractor, not an employee of the proprietor, is not liable for infringement with respect to such public performance.

This was put forward as an amendment offered by Senator Hruska in the Senate Judiciary Committee on October 7 and was voted down.