with nonnetwork programing, which is not sold on a simultaneous basis, it is sold to particular markets, and on an exclusive basis. If the broadcaster obtains that exclusivity in the marketplace, it is there we would go to the full copyright liability or retransmission consent. They are equivalent.

Mr. KASTENMEIER. Wouldn't you really have two classes of cable systems: Those operating under a grandfather and those not grandfathered. Those not grandfathered would then have to evolve into something else, like Home Box Office. They would tend to generate their own programing and assume the characteristics of a television station, with added technological advantages in terms of scope of materials generated.

You are then looking to a different class of system which could. be differentiated, technologically and otherwise, from existing cable system. Is that correct?

Mr. GELLER. That is correct. When cable moves into a major market it can't go out of distant signal. It can and has in the past, but when cable goes into Pittsburgh, or into the Washington area or the other places, there is so much-over-the air broadcasting there already that for cable to succeed it must offer new services. That is why it is offering pay cable. That is why it has 20 services. That is why you are getting a black network and why you will be getting cable news, as Ted Turner is proposing. It needs to do that. Another thing it can do, we believe, is to provide a place for advertiser-based programing and the assurances that they can get it. Some of the pay programs have advertising support. You could take the same film, but it might be a little later. However, the middleman or the broadcaster would go out and get advertisers who would pay not only for the showing in that area but for the showing in cable homes. It would be engineered to do that. We don't see why it can't be done.

But we agree with you that if it cannot be done, if the marketplace has reasons that won't work out, then we believe the answer is just what you said: Cable in major markets will turn to the new services.

Mr. KASTENMEIER. With respect to long distance retransmissions, in your view, who should bear the copyright liability; the cable system or the satellite company that makes such retransmission possible?

Mr. GELLER. I think that the copyright owner should be fully compensated. I think a consortium will work out how to do it. I believe the broadcaster will come to who ever owns the copyright, and say, "I would like to put it in Atlanta. I would also like to send it to 5 million cable homes. What will you charge me to do that?" He will then turn to advertisers to see how much money he can get for Atlanta and for those 5 million homes.

He might also turn to the cable systems and say to them, "I need help; I am not getting enough money to buy the product I want and, therefore, I want you to contribute x pennies per subscriber a month." It may be that the middleman will do this.

Just as you said, the satellite carrier, you have quotes around "carrier," but the satellite system such as Southern Satellite might be the one who works all this out and chips in money.

I repeat to you, I don't know how the market should work and we don't have any blueprint; all we know is that it works out in the pay area, that middlemen came forward and did it, and we think it will work out here. I don't know whether it will work out by cable being paid or cable having to pay so much, but we would leave that to the marketplace to figure out.

Mr. KASTENMEIER. You tend to differentiate between existing cable systems and new cable systems. Might not another basis for differentiation be to treat satellite signals differently than conventionally retransmitted signals?

Mr. GELLER. I don't believe so because it means, therefore, that in Philadelphia, which is close to New York, you can operate one way and bring in signals, but if you are further away you could not. We think it is a function of what is going on. With parabolic antennas you can pick up signals as much as 250 miles away. In Canada they do not allow microwave of signals. As a result, signals are brought in by very high, very peculiar antennas. We think that is a foolish way to proceed and that it ought not to be done. Mr. KASTENMEIER. This is, of course, a policy question. Nonetheless, in terms of trying to assess the possibility of change and given the importance of syndicated exclusivity to the broadcast industry, do you think a partial exclusion might be to mandate, by statute, a continuation of the exclusivity rules?

Mr. GELLER. Yes, and I agree fully with your characterization of it as a partial exclusion. We think that the syndicated exclusivity rules are desirable because you don't get it unless you go out and bid for it in the marketplace. The broadcaster doesn't pay enough, he doesn't get exclusivity, and that is a way of doing it.

There are a number of other possible compromises such as just divide the top 100 markets and say that within the top 100 markets, within a 35-mile zone, you must come within the new policy of retransmission of full copyright liability. Outside of it, you are instead within the compulsory license. It is messy, this two system thing that you speak about, but we think that you have to deal with the system as it is.

Justice Holmes said "The life of the law is not logic; it is experience," and here you have something that grown up people become accustomed to-getting services, that is what makes for the messiness. If you don't do anything about it, it means that we will skew the system for the future development in favor of a very large industry.

Mr. KASTENMEIER. I would recognize the gentleman from California.

Mr. DANIELSON. I don't have any answers for the problems which are giving rise to these hearings. The problems are very complex, as I see them, and what amazes me is that it is only 3 years since we passed the copyright revision law and yet we are considering problems that at least I had never dreamed of at the time, and no one brought into focus, no one at all, which causes me to take one other step of caution and that is that perhaps what we are talking about here and now won't mean a thing 2 or 3 years from now. The fact we have got, I think you said, 20 satellite services available. Mr. GELLER. About to be available, since they are about to begin.

Mr. DANIELSON. Let's call it in being or gestation, one or the other.

Mr. GELLER. Yes sir.

Mr. DANIELSON. I don't believe there were any 3 years ago and I am pretty much of the opinion that 3 years from now the situation is going to be entirely different.

Some person told me not too long ago that there is on the drawing boards some kind of a supersatellite system, which I called a celestial jukebox. In other words, you didn't have to wait until the program was ready, you just sort of punched the right button and you got whatever program you wanted out of something up there.

Mr. GELLER. I hope it is far off.

Mr. DANIELSON. I beg your pardon?

Mr. GELLER. I hope that is not coming tomorrow.

Mr. DANIELSON. I think it may be in your office before you get back to it.

In your statement, which I will chide you about briefly, I didn't receive it until this morning-I don't know how on earth I can be expected to have studied something I haven't seen. Maybe that is part of the new technology also.

Mr. GELLER. I apologize.

Mr. DANIELSON. You don't have to apologize. Almost all witnesses do it except in my subcommittee. I don't know how you would ever appear before a court of appeals without having filed your brief at least 10 days in advance. So I can't respond frankly to your questions and your suggestions and you will be gone when I am able to.

My thrust of what I am saying is, I don't really know where we are at the present time. I appreciate the contribution that you have made and I will read your brief, but I think we had better go rather slowly in changing anything because I am afraid by the time we get it changed our change will be obsolete, and we may be better off with what we have than to fly to others we know not of. Mr. KASTENMEIER. The gentleman from North Carolina.

Mr. GUDGER. Mr. Chairman, I appreciate the opportunity to question Secretary Geller, but I will refrain from doing so at this time in view of the time limitation, except to ask one question.

It is my understanding that the 1976 act really was implemented only about 18 months ago. There was about a 11⁄2 year delay in implementation, was there not?

Mr. GELLER. As a matter of fact, the first division of revenues under it has not yet occurred. It is now being considered by the Copyright Tribunal because there is a dispute and-

Mr. GUDGER. Royalties have been collected but not yet dispersed. They have been collected, they have not been distributed.

May we write you or communicate with you further should your brief and testimony here prompt us to have questions of you? Mr. GELLER. I would be delighted to come to your office individually or to come back for further testimony.

I would just say one thing. While normally I appreciate the need to go slowly, we have discovered it is best to be evolutionary in most fields and not try to turn things upside down. I would say that this field is moving so fast and cable penetration is moving so

fast, that the reason I argue for grandfathering is because you can't take a lollipop away once the public has it and becomes accustomed to a certain way of operating.

So what I am saying to you, if you allow it to continue along the path it is continuing, then that is a decision and that decision, I think, will be almost foreclosed some years in the future. It is a very dynamic, a very fast moving field, and not acting may be a sound decision but it is a decision

Mr. DANIELSON. I agree with you. I have one concern. You spoke of the lollipop. The people in the areas served do have this benefit and do not wish to have it taken from them.

Mr. GELLER. That is true.

Mr. DANIELSON. There are some areas which are not yet served and I am sure human nature being what it is, they also will want a lollipop and they will say why should the people in Denver, for example, have this benefit while we in Butte do not have the benefit.

Mr. GELLER. I would answer you that the people in Denver have much more service over the air now than the people in Butte. Mr. DANIELSON. Let's reverse the cities. Butte now has it and Denver doesn't?

Mr. GELLER. What I am saying, is that when you go into major markets there is a great deal of over air service. We would like all the additional service that is possible and, therefore, we favor cable development in those markets. We are only saying as cable comes, let it come within the marketplace, with all these new services. paid for by standing and bidding for them, rather than getting the Government to step in and say here, you can have it and here is what you have to pay and here is how we are going to adjust for exclusivity lost in the marketplace. That is all.

We are saying that major markets are different and it would be helpful if the Government got out of the business of refereeing this and let it go to the marketplace.

Mr. GUDGER. I am going to yield back the balance of my time with this observation. Being a Congressman representing the Appalachian Mountains district, I, of course, have some long acquaintance with cable TV because we do not pick up even close signals due to the mountain interference. As early as the fifties we had to get into it. So I am interested and I did not want the fact that I was not questioning to be interpreted as a lack of interest or

concern.

I thank you.

Mr. KASTENMEIER. I thank the gentleman.

This concludes, I think, questions for Mr. Geller. But, as has been suggested, we may want to continue further dialog with you on this question, which is an interesting one, and something the committee has to entertain prospectively in terms of being able to anticipate what the future will bring.

Thank you very much for your contribution this morning.

Mr. GELLER. I appreciate the opportunity to initiate the dialog at this time. Thank you.

Mr. KASTENMEIER. The committee will recess for approximately 15 minutes after which time we will hear from Ms. Ringer.

[A short recess was taken.]

56-020 O - 80 - 2

Mr. KASTENMEIER. We will reconvene. The committee will come to order.

Our second witness today is one who very, very often appears before this committee. If she were to count the hours and we were to count the hours she has appeared before this committee, it would indeed be impressive, but not as impressive as the quality of the service she has rendered to the country in her capacity as Register of Copyrights and in her prior capacity in that office. She has been, I think, one of the most outstanding public servants, civil servants, our system has produced. I would like to greet the Register of Copyrights, Ms. Barbara Ringer.

TESTIMONY OF BARBARA RINGER, U.S. REGISTER OF COPYRIGHTS, ACCOMPANIED BY DOROTHY SCHRADER, HARRIET OLER, AND DAVID LEIBOWITZ

Ms. RINGER. Thank you very much, Mr. Chairman. I appreciate your words more than I can say.

I am Barbara Ringer, Register of Copyrights in the Copyright Office of the Library of Congress and Assistant Librarian of Congress for Copyright Services. I would like to thank you and the subcommittee staff for giving me the opportunity to appear here today. I would also like to introduce my colleagues.

To my right, Dorothy Schrader, General Counsel of the Copyright Office. To her right is Harriet Oler, attorney-adviser in the Copyright Office, and to my left, David Leibowitz, attorney-adviser in the Copyright Office. They each have their areas of expertise.

I am here to talk primarily about two things today. In my prepared statement I have included some comments on four areas that I think are of rather urgent concern to the Copyright Office, but with your permission I don't plan to discuss them in my oral remarks, at least my introductory remarks. I will be more than happy to answer questions on them, however.

I am here primarily to talk about performance royalties for sound recordings and the problems of cable television and copyright, a subject Mr. Geller introduced this morning. I will only summarize the main points of my rather long preliminary statement, Mr. Chairman, and will be more than happy to answer any questions that you have.

Mr. KASTENMEIER. Without objection, your 30-page statement will be received and made part of the record. [The above referred to statement follows:]

STATEMENT OF Barbara Ringer, Register of Copyrights AND ASSISTANT LIBRARIAN OF CONGRESS FOR COPYRIGHT SERVICES

Mr. Chairman, I am Barbara Ringer, Register of Copyrights in the Copyrights Office of the Library of Congress and Assistant Librarian of Congress for Copyright Services. I should like to thank you and the Subcommittee staff for giving me the opportunity to appear before you today. My purpose is threefold: first, to comment directly on proposals to establish performance rights in sound recordings, including two bills sponsored by Mr. Danielson and pending before your Committee, H.R. 237 and H.R. 997; second, to comment generally on the question of uses of copyrighted works by cable systems, including the practical problems that have arisen under section 111 and chapter 8 of the Copyright Act and the proposals for changes in communications law and FCC regulations that would have a direct impact on those copyright provisions; and, third, to call to your attention certain other points of concern with respect to the Copyright Office arising from the Copyright Act of 1976.