the public. Without legislative changes, the public loses in many

ways.

First of all, the networks will become even stronger than they are now, because they will have the financing to do the programing much longer than the independent producer, so rather than creating more competition, there will be less, because we will eliminate the independent producer.

Second, instead of diversity, the public will have multiple channels showing the reruns of the reruns.

Third, television will be available to only those who can afford cable, and we will no longer have free television as we have it today.

Fourth, eventually the quality and the quantity of programing will evaporate because it is unprofitable.

There are also certain blatant inconsistencies within the law that need to be addressed. Copyright laws exist to protect private property rights, but it is inconceivable that cable has the right legally to take someone else's property without consent or meaningful payment and sell it for profit. In any other situation it would be called stealing.

Regarding the unwilling superstation, how can a satellite system like ASN take the signal of KTTV Los Angeles and retransmit it without permission or payment while at the same time KTTV is required to get permission to boost its own signal?

To quote from Shakespeare's King Lear, "Nothing will come from nothing." Speak again. We are asking you to speak again, because nothing can be created or produced from nothing.

There is a cost and a fair payment, and ultimately the marketplace should determine that payment, but in the meantime it is essential to reevaluate the Copyright Act of 1976. Since that law was adopted there has been tremendous growth and changes in communication technology. There are also certain inequities that certainly need to be addressed, and the Copyright Royalty Tribunal does not have the authority or the flexibility to accomplish them. We must mandate syndicated exclusivity into the law and not leave it within the hands of 7 people to determine our fate. We must have consideration of retransmission consent at least in regard to unwilling superstations. We must readdress the law. Thank you.

Mr. KASTENMEIER. Thank you, Ms. Peters. Mr. Wolff.

TESTIMONY OF SANFORD WOLFF

Mr. WOLFF. Thank you, Mr. Chairman. We have filed a written statement with you, and inasmuch as I fully support that which Ms. Peters has said and what Mr. Golodner has said in announcing to you the position of the AFL-CIO I will get the title today for brevity.

I think that I have been identified as the chief executive of the American Federation of Television and Radio Artists. The union represents in the United States and all over the United States in excess of 40,000 persons, men and women, who are professionals in the radio, television, recording, phonograph recording, sound recording business.

I just want to make two statements, and then I would ask you, hopefully that you get time to read the statements we filed.

We confess to an enlightened self-interest in the subject matter. It is my and our firm belief that we are here to espouse safeguarding the free enterprise system, and guarding it against what we consider to be presently lawful piracy, but stark immorality. We stand in danger, threatened by available technology, of losing all that we have gained in the past 40 years by peaceful and, we hope, intelligent collective bargaining. The action, the activity required of the Congress, as outlined by Ms. Peters and Mr. Golodner we support, and that is all I would like to say, and again commend you to our written statement. Thank you.

Mr. KASTENMEIER. Thank you very much, Mr. Wolff, for that very brief statement. Your statement and the attachment will be received and made part of the record.

[The information follows:]

STATEMENT OF SANFORD I. WOLFF, NATIONAL EXECUTIVE SECRETARY, AMERICAN FEDERATION Of Television and Radio ARTISTS (AFL-CIO)

My name is Sanford I. Wolff. I am the Chief Executive of the American Federation of Television and Radio Artists (AFTRA), AFL-CIO. AFTRA is the collective bargaining representative for over 40,000 actors, dancers, newspersons, announcers, disc jockeys, and other professionals who inform and entertain the public from coast-to-coast on television, radio, sound recordings, slides, films, and cable.

I appear before you this morning to discuss the vexatious problem of retransmission of television broadcast signals by cable television systems. This problem arises from the interplay of the following:

Rapid changes in communications technology. Specifically the transition from land based microwave links to communications satellites as the means of feeding distant television broadcast signals to cable television systems.

A shift in prevailing regulatory philosophy at the Federal Communications Commission from reliance on classic government regulation to reliance on market forces. Currently, the Commission has proceedings underway which could eliminate distant signal and syndicated program exclusivity restraints now applicable to cable television systems.

Section 111 of Title 17 (copyrights) of the U.S. Code providing a compulsory license for cable television systems enabling them to carry television broadcast signals upon payment of royalty fees based on gross receipts from subscribers. This provision was enacted in 1976 when the state of the art for delivering distant television broadcast signals to cable systems was based on land based microwave links which imposed effective limits on the reach of cable television systems.

Presently, the term "television superstation" is finding its way into our vocabulary. This is a television station whose signal is picked up off-the-air (often contrary to the station's wishes) and beamed to a communications satellite which in turn transmits it to cable television systems in various parts of the United States. WTBS-TV (Atlanta, Channel 17) was the first such superstation and remains the best known. However, the following television stations are or are about to become superstations also, some, as I have indicated against their wishes: WCVB-TV (Boston), WSBK-TV (Boston), WGN-TV (Chicago), KTTV (Los Angeles), WOR-TV (New York), WCBS-TV (New York), WPIX (New York), and KTVU (Oakland). As a result of the interplay of the factors which I listed before, cable television systems are receiving copyrighted television programming having an estimated worth of between $1 and $2 billion dollars in return for compulsory license fees of about $13 million, about 1 percent of the value of the programming.

Mr. Chairman, this has to affect television broadcasters and the broadcasting industry. And let me acknowledge the symbiotic relationship that exists in some areas between members of AFTRA and that industry. When that industry is unfairly dealt with to its economic detriment, as in this case, our members are affected also, and we join the broadcasting industry and others who are seeking redress of this injustice.

But our members are also directly affected. Let me present you with two specific examples:

If an AFTRA member makes a commercial in Atlanta, Georgia, for 13 weeks use in that market, he or she is paid $163.65. Let me emphasize that this is for use in the Atlanta market only. However, if that commercial is shown on WTBS-TV (Atlanta, Channel 17), a television superstation, a matter over which the performer has no control, it is beamed by satellite to cable television systems in 46 states, including Alaska and Hawaii (see exhibit attached; in 1978 WTBS-TV was WTCGTV). The "national" rate for such a performance is about $1,000 for the same 13 week period. Thus, our performer loses over $800: money which most actors and artists can ill-afford to lose.

Network Newscasters receive approximately three times the salary of a newscaster in the Atlanta market. Yet, thanks to satellite dissemination, the Atlanta newscaster is carried to as many places as his/her colleagues who work for the television networks.

That is the problem, Mr. Chairman. And I think that everyone who has studied the matter agrees that it is a serious problem with far-reaching consequences. In the time remaining to me this morning rather than voicing abstract principles on which a solution should be based, I would like to present the following specific legislative proposal for your consideration:

First, make no change in existing signal carriage arrangements of cable television systems as of a selected date. But broaden the authority of the Copyright Royalty Tribunal to enable the Tribunal to adjust compulsory license fees to more equitably reflect the value of the programming covered by the compulsory license.

Second, provide that there would be complete copyright liability for distant signals added to a cable system after the date determined for purposes of the preceding paragraph or carried by a cable system established after that date.

To permit you to legislate in a deliberate manner, the regulatory status quo should be maintained with regard to the FCC's rules on syndicated program exclusivity and carriage of distant signals. This could probably be achieved by a letter or resolution from this Subcommittee or the House Judiciary Committee directed to the FCC stating your intention to legislate on this matter and requesting the Commission's forbearance until you had a reasonable opportunity to do so.

Mr. WOLFF. Thank you.

Mr. KASTENMEIER. Now I would like to call on Mr. Chapin, representing Broadcast Music, Inc., as vice president and general counsel.

TESTIMONY OF EDWARD CHAPIN, VÍCE PRESIDENT AND

GENERAL COUNSEL OF MUSIC BROADCAST, INC.

Mr. CHAPIN. Thank you very much. I, too, will be very brief. We have filed a statement, a three-page statement with the subcommittee, and I would like to have it made part of the record if that is agreeable, if you have it.

Mr. KASTENMEIER. Without objection. [The information follows:]

STATEMENT OF BROADCAST MUSIC, INC.

After nearly two years and with no frame of reference against which to make its decisions, the Copyright Royalty Tribunal remains enmeshed in predictable argument over distribution of royalties collected from the cable television industry. That is understandable. The Tribunal is faced with an incredibly complex problem: how to distribute $12 million already paid by the growing cable industry for much of the programming it offers its customers.

Collectively, cable's four major suppliers-music rights organizations, motion picture producers, broadcasters, and sports teams owners-have been able to provide little help. Despite many meetings the four groups have been unable to agree upon any formula for a suggested proportioning of these funds. Instead, as Variety has pointed out, there is a seemingly unending chorus of "me, me, me" assailing the ears of the Tribunal. Among these is one small voice which embraces three unique organizations, unique in the sense that they represent the creators and owners of almost all protected music in the world today. We hope that our voice now will be loud and clear as we offer, as we have attempted to do in the past, a solution to at least one significant portion of the cable TV royalty distribution problem.

It is a solution that clearly meets the requirements of the cable industry by insuring the maximum availability of copyrighted music and a minimum of accounting and negotiation.

It assures equal treatment to both the owners of music and the cable industry without preference to anyone.

It is in the public interest and it is simple.

We live in a period of meaningful deregulation. We have already witnessed major deregulation of the airlines. There is serious consideration of deregulating some functions of both the ICC and the FCC. You now have the opportunity to deregulate a significant part of the cable television payment distribution system before it takes hold and unnecessarily enmeshes the Tribunal. Without such action, hearings complex almost beyond imagination must be held. And clearly, as a result, writers and publishers of music will not receive their 1978 royalty payments until sometime in 1980, or perhaps well beyond, the victims of a serious devaluation of payment for something used at least two years before. We cannot believe this is what Congress intended when it drafted and passed Section 111.

You can begin by eliminating some of the regulatory snarl simply by removing music from the scope of the Tribunal's function.

The present portion of the copyright law that affects us today, and which has created the problem vexing the Tribunal, was written because CATV expressed concerns to the Congress. It was concerned about its ability to obtain certain rights; the difficulty of clearing individual musical compositions for performance at stated times; the fear that rights in music might be restricted; the difficulties of distributing royalties among individual copyright owners; and a fear that unreasonable fees might be exacted.

No basis for any of these apprehensions existed then and no basis exists today! None of the three music licensing organizations defined in the Copyright Act of 1976-ASCAP, BMI or SESAC-grants exclusive rights. Any licensee can play any composition in any of these three repertoires at any time. Under the blanket license form for musical performances prevailing throughout the world there is no need of separate or individual notices, permissions, or clearances, to any individual or work. Music performing rights organizations have no interests adverse to any present or potential music user, most certainly not the cable industry. Writers and publishers of music are interested only in having the maximum exposure in the greatest