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of our costs. I might say in that context that, in 1965, when your subcommittee took the initiative to raise the fees the last time, the figure was around 64 percent. So we are falling very badly behind in that regard, and it is getting worse.
Mr. KASTENMEIER. In that connection, are you urged by any other source, such as Office of Management and Budget, or the librarians, or any other source, to bring fees in line with some historic guidelines in terms of fees with respect to services?
Ms. RINGER. Mr. Chairman, all I can say is that the subject is discussed every year at the Appropriations Committees.
Mr. DANIELSON. I would like to ask a question there.
What do you feel, Ms. Ringer, would be this is arbitrary, but where do you suppose would be an equitable place to place the fee?
My feeling is that the fee should pay for the service, but I recognize that there will be situations in which the person seeking the protection for some reason or another ought to receive some aid in connection with it.
Where do you feel it ought to go?
Ms. RINGER. We have always felt that 70 percent was a reasonable figure.
I think what we are proposing will probably bring in a little less than that, but one should consider that the copyright system includes the deposit of valuable copies, as well as actual monetary fees. And while the valuations that are placed on these copies are obviously not exactly what you would get if you went out on the street and tried to sell them, the Library is acquiring them without going out and buying them. So, this is a factor which, if added to the fees received, does bring us to over 100 percent recovery of costs. And I think this creates a situation in which you have some flexibility.
The position we have taken, Mr. Danielson, as you have described, is to avoid placing fees any higher than is reasonably necessary for an effective registration system. They should not constitute a burden on anyone, nor deter those seeking who want to get registration from obtaining it.
This is our position. I think the fees that are in the bill—both in the revision bíll as reported by the Senate, and Mr. Kastenmeier's separate bill—are satisfactory for that purpose.
Similarly, the bill would also anticipate two major changes in the registration procedure. It would permit the voluntary registration, of a number of unpublished works which are not registrable under present law, and would also allow some group registrations.
The Author's League, for obvious reasons, has not been very enthusiastic about the fee increase. Nonetheless, it is now seeking just as strongly as we are, to have separate legislation enacted because of the other reform elements that are in this bill, which would be of substantial benefit to individual authors. From a purely bureaucratic point of view, this would enable us to take care of some big procedural changes, well in advance of general revision. We would have them out of the way by the time we had to absorb the major impact of the full revision bill.
Mr. DRINAN. I note, Ms. Ringer, on page 12, that the separate bill is not lying in the Senate. They blanketed these reforms in S. 22. Can we get a separation in the Senate!
Ms. RINGER. The assurances I have are purely oral, Mr. Drinan, but I have been told by staff on the Senate Judiciary Committee that, if the House passes the bill, as soon as the revision bill is out of the way in the Senate nothing would stand in the way of Senate acceptance of the separate legislation.
I think the feeling was that they did not want to have this interfering with the ongoing progress of the revision bill at this particular time, but there is no substantive opposition to it. Mr. DRINAN. Thank you.
Ms. RINGER. Let me go on to the Royalty Tribunal, which obviously is an extremely important subject for your subcommittee.
The evolution of the concept of the Royalty Tribunal is traced on pages 12 through 20 of this report, and obviously I cannot go into the details of this. The tribunal is not just somebody's bright idea; it did evolve from a series of events which can be traced progressively.
In 1967, your subcommittee reported a bill which did not require a Royalty Tribunal, because there was, I believe, a conscious effort to try to structure the compulsory licenses in the bill so as to avoid this kind of Government activity.
But what the House did on April 11, 1967, by knocking out the cable provisions which had been reported by your committee, and by changing the concept of the jukebox compulsory license, set the scene for something that was almost inevitable: the development of some sort of Royalty Tribunal. Perhaps the simplest thing I can do is skip right to the end, Mr. Chairman, and state what I think might be done with the Royalty Tribunal.
What we are saying is that on the basis of—this is on pages 28 through 30—on the basis of the summary of the development of the bill, and what is now facing the tribunal, it is a necessary conclusion that the proliferation of compulsory license systems mandates the establishment of a Royalty Tribunal.
In the aggregate, the duties they seem likely to be called upon to perform are simply too large, complex, and specialized to be handled de novo by Congress and the courts. The Copyright Office believes that if chapter 8 were enacted in its present form, it would probably withstand a direct challenge to its constitutionality.
We now have an exchange of memos between Professor Gellhorn and Professor Pollack. The Gellhorn-Pollack papers, which both deal with the question of constitutionality through in quite different terms do not clearly settle the question of constitutionality or unconstitutionality. However, implicit in both papers is the feeling that you could certainly make the tribunal unequivocally constitutional by certain amendments.
We do suggest several, and they fall under four categories: Administrative structure, standards for determinations, timetables, and judicial review. If I may try to summarize this very briefly, we think that the tribunal should probably have a permanent staff; that it should have continuity and not be as ad hoc as is laid out in the bill at the moment. Turning to the standards, with each compulsory license the Royalty Tribunal has to deal with, there should be specific standards.
This is, I think, one of the most important aspects of resolving any constitutional doubts with respect to the tribunal.
The question of judicial review is also important in this context, and I think there is a growing feeling that judicial review, for the ratemaking adjustments, is highly desirable. In a memorandum which you received from Mr. Valenti, of the Motion Picture Producers Association, a suggestion is thrown out, which is based on the Postal Service's ratemaking activities and which may be quite applicable to this situation. Basically, instead of authorizing either House of Congress to veto the rate adjustment or otherwise consider it, you would permit the rate ruling to go directly to the courts, whose review would not be de novo, but rather would be on the basis of the record that had been made in the Royalty Tribunal. These would be safeguards that, I think, would probably satisfy the complaints that were made.
This is very sketchy, Mr. Chairman, but I hope this is sufficient to conclude the hearings.
Mr. KASTENMEIER. Thank you.
Are there any questions? If not, there is a vote pending, and we will consider these hearings to be closed, save a review of what we have had. Should such review indicate we require further enlightenment we can make arrangements to have another hearing day, but you have at least gone over all the material and it has been extremely valuable. I am only sorry that we could not have had all of our membership here for these meetings.
Should this be the last hearing date, I would think we would need no more official proceedings of this subcommittee in connection with the subject of copyright this year, but obviously early next year we will again return to the subject. And we thank you, Ms. Ringre.
Ms. RINGER. I want to thank you, Mr. Chairman, and the subcommittee for your courtesy and patience. Thank you very much.
Mr. KASTENMEIER. The committee stands adjourned.
[Whereupon, at 11:45 a.m., the subcommittee adjourned, subject to the call of the Chair.]
APPENDIX 1 During October, 1975, the Teleprompter Corporation, which had contributed testimony on the cable television issue in June, submitted a memorandum, an explanation of proposed amendments to Sections 111(d) and 111(e) of H.R. 2223, and a Memorandum Considering the Constitutionality of Proposed Copyright Legislation (H.R. 2223).
This submission, plus a number of responsive submissions by other interested parties and an amplification of the proposal of Teleprompter, were received in November, 1975. In alphabetical order, the submissions responsive to Teleprompter are as follows:
Ad Hoc Committee of Concerned Cable Television Operators for a Fair Copy. right Law (Frederick W. Ford).
George J. Barco (Pennsylvania Cable Television Association).
In 1976 the subcommittee received a further proposal from the National Association of Broadcasters, a letter from ABC Television Affiliates Association, and a memorandum of April 13, 1976 designated “Agreement between NCTA and MPAA as to terms of copyright legislation."
These various proposals, submissions, and documents constitute Appendix 1 to the hearing record.
MEMORANDUM OF TELEPROMPTER CORPORATION
EXPLANATION OF PROPOSED AMENDMENTS TO SECTIONS 111(d) AND 111(e) OF
Attached hereto is a redraft of the royalty provisions (and related definitions) contained in Section 111 of the proposed Copyright Bill. This redraft, in Teleprompter's opinion, is a more equitable and rational approach to the problem of copyright liability than that currently found in the bill.
Also attached is a memorandum of law prepared by Professor Ernest Gellhorn of the University of Virginia Law School. This memorandum argues that the provisions relating to the establishment of the Royalty Tribunal, as now set forth in H.R. 2223, are seriously vulnerable to constitutional attack.
Before describing in detail what we have attempted to do in our proposed redraft, a few words of background may be useful. Teleprompter's basic position is that there should be no copyright liability of any sort for cable television retransmission of broadcast signals. Everyone seems to agree that, as a matter of pure logic, there is no justification for imposing copyright liability on cable's retransmission of local signals. The real question of copyright liability has always concerned cable television's importation and retransmission of "distant broadcast signals.” However, retransmission of distant broadcast signals actually is a benefit to the originating station which is able to gain additional advertising revenues by virtue of its reaching distant markets via cable. These additional advertising revenues enable the originating station to pay copyright owners more than it otherwise would be able to. Therefore, allowing the copyright owner to collect copyright payments when the cable system in the distant market retransmits the copyrighted program would enable the copyright owner to extract a windfall double payment.