Exclusivity, that is, the ability of the program owner to control its exposure to the public, is thus essential to a continuing supply of television programs which, in turn, is essential to the survival of television itself. If the supply of programs is diminished or cut off, free television broadcasting-and, more important, the public at large suffers. As an inducement to the production and broadcast of television programs, there is no realistic substitute for exclusivity. The ability of program owners and telecasters to maintain this exclusivity is imperiled by the metamorphosis which CATV has recently been undergoing. Let me explain how CATV can impair exclusivity, by contrasting historic CATV with the "CATV unlimited" systems now being built or proposed throughout the country.

CATV originally did and still does operate in areas of poor television reception where it provides only the signals of local and area television broadcast stations which CATV subscribers within the service areas of these stations would not otherwise be able to receive adequately because of terrain or other factors. Such CATV systems, for example, place a receiving antenna on a mountain and bring the nearby local and area television signals down the mountainside by cable to communities shielded from direct signals.

In its historic role, CATV has fulfilled an important function as a supplement to our system of free television; it has brought television to those who otherwise would have had on their television screens only snowy scenes or none at all. There is still substantial room for the further growth and development of this kind of CATV.

Let me emphasize at this point, however, that when Mr. Ford of NCTA asserts-as he has in the past and doubtless will again todaythat CATV is merely improving the reception of local and area television stations, it is this kind of CATV, and only this kind of CATV, to which his assertion has any applicability. However, even in this limited sphere, CATV provides an elaborate transmission service for a price and it is reproducing or performing copyrighted programs for profit.

But even historic CATV goes further than this limited "fill-in" function. It also extends broadcast signals into remote areas beyond the range of any off-the-air broadcast signal. The copyright implications of such transmission are even more obvious, although, to the extent that such CATV does not displace present or future local stations, it is still performing essentially a supplementary service.

More recently, an entirely different type of CATV has been emerging. First, let me describe the operational characteristics of the new CATV which we call "CATV unlimited":

The number of channels carried is increasing rapidly. Early systems had one to three channels. Even in 1964, 70 percent of the CATV systems carried five or fewer channels. But new systems already carry up to 12 stations, and systems with 20, 30 or 40 channels are planned. There are no geographical bounds for "CATV unlimited." Increasingly, multi-hop microwave relays are being sought or planned to import stations from metropolitan centers across many hundreds of miles and several States.

These multi-channel systems, importing distant stations both off the air and by microwave, are trying to mushroom into cities and towns

of all sizes where reception of local and area broadcasting stations is excellent.

The surge of CATV has reached explosive proportions. Applications are pending for CATV systems in more than 1,000 communities and new applications are being filed at the rate of about 3 every day. CATV promoters have predicted they will take over 85 percent of all television sets in the United States, in virtually every city and town in the country.

In short, "CATV unlimited" is a new type of CATV with capabilities and operations only faintly resembling historic CATV.

As CATV's purpose and operations expand beyond providing an auxiliary service, CATV becomes a threat to the public interest in free, diverse, and competitive, local and area television broadcast services. In essence, this threat derives from CATV's ability to import multiple television signals from many distant stations into cities where local and area television stations are already reaching the viewing public. Because the same television programs are broadcast in many different markets, the importation by CATV into such wellserved cities of the signals from stations in other markets means that the exclusivity of the local station as to many-if not most-of its programs will be destroyed. To the extent that a program is viewed on an imported channel, the benefit of exclusivity, for which the local station has bargained, is destroyed-to the damage of the local station, the copyright owner and, ultimately, the public. For, when CATV subscribers watch network programs, feature films, or syndicated film programs imported from distant stations, the local viewing audience is fractionated and the local station is deprived of advertiser support, since it can no longer offer to advertisers as large an audience of local viewers. The resulting decrease in advertising revenue means at least that programing must be curtailed and at worst that the local station will be forced off the air. With either result, those persons unable or unwilling to pay to hook onto the CATV transmission cable or living in rural or other thinly populated areas which CATV cannot afford to serve will receive off the air a degraded service or none at all.

Besides the destruction of program exclusivity, "CATV unlimited" is unfair and inequitable. These multiple-channel CATV systems carry vast quanities of program material. If these systems went out into the marketplace to purchase rights to program material, the cost to the CATV's and the corresponding return to the copyright owners would be substantial.

These potentially giant CATV systems are being built on the premise, however, that the programs which they transmit will cost them nothing. The CATV will simply pick up the signals of distant television stations and sell them to their subscribers in competition with local and area television stations which have to pay substantial sums for broadcast rights to program material.

This is unfair to the distant station because the CATV is getting for nothing something for which the distant station had to pay. This is unfair to the copyright owner because he is receiving no compensation for the use which is being made of his work by the CATV system. This is unfair to the local station which has paid the copyright owner for exclusive rights in its market, because the value of the program to it has been reduced.

On April 23, 1965, the Federal Communications Commission took and proposed several important actions with respect to CATV. These actions, however, in no way deal with copyright protection. They relate only to the proper role of CATV under the public interest standards of the Federal Communications Act. The Commission expressly stated in paragraph 159 of its First Report and Order of that date, FCC 65-355:

We have noted *** the pendency of suits in which program suppliers are seeking to establish their rights to control the use by CATV systems of signals carrying their programs. We have also noted that such suits fall entirely beyond our jurisdiction. Our decision to require non-duplication takes account— as it must-of the existing practices of CATV system operators and the present inability of program suppliers to control the availability of their programs via CATV. For these facts are central in any evaluation of the nature and effects of competition between CATV and television broadcasting. Our determination does not rest, however, on any theory concerning the requirements of copyright **

The Commission's April 23 orders did the following:

(1) As the first step, the FCC adopted with respect to microwavefed CATV systems rules which provide for mandatory carriage by CATV of local and area television stations and for nonduplication of the programs carried by local and area stations, both at the request of the relevant station, for a period of 15 days before and after broadcast.

(2) The Commission asserted its jurisdiction with respect to all CATV systems, whether fed by microwave or not, and proposed promptly to apply the foregoing carriage and nonduplication rules to CATV generally.

(3) The Commission instituted an inquiry in which it is considering proposals for the adoption of a comprehensive set of rules with respect to CATV generally.

(4) The Commission announced certain interim policies it will follow in order to protect UHF television development.

None of these actions falls within the scope of the copyright law. The nonduplication provision is somewhat analogous, but it is sharply limited as to time and does not go to the copyright exclusivity for which the local station has bargained. Moreover, nonduplication applies only if the program is carried by a local or area station and even then the rules are quite technical-and it does not always apply. Furthermore, nonduplication does not aim to benefit the copyright proprietor by either creating or preserving the salability of his work. Finally, nonduplication relates only to programs as such; it does not relate to music, for example.

Because the purpose, scope, and effect of the Commission's regulation of CATV differ so radically from that of the copyright law, we believe that the Commission's orders of April 23 do not reduce the need for full and adequate protection under the copyright law.

MST thus appears before this subcommittee today in support of four general propositions:

1. The bill should unmistakably provide that a CATV system's unlicensed transmission of copyrighted television programs is an infringement.

CATV's carriage of programs is included under section 106 of H.R. 4347 as a performance or an exhibition which would be subject to the

revised statute. The application of the copyright laws to CATV is wholly justified under classic copyright concepts. CATV takes a given copyrighted work and distributes it to members of the public, to CATV's own financial advantage.

Under the 1909 act, the Supreme Court held as early as 1917 that a performance was for profit even though no separate charge was made for the particular performance. Herbert v. Shanley Co. (242 U.S. 591 (1917)). In the famous Jewell-LaSalle Realty Co. case 15 years later, the Supreme Court, again unanimously, held that "the acts of a hotel proprietor, in making available to his guests, through the instrumentality of a radio receiving set and loud speakers installed in his hotel and under his control and for the entertainment of his guests" constituted a public performance for profit. Buck v. JewellLaSalle Realty Co. (283 U.S. 191 (1931)).

Moreover, there is still a public performance notwithstanding the guest's ability to select in his hotel room among the signals of more than one station carried on the system. We cite a number of cases for that proposition. SESAC v. New York Hotel Statler Co. (19 F. Supp. 1 (S.D.N.Y. 1937)); see also Harms Inc. v. Sansom House Enterprises, Inc. (162 F. Supp. 129, 135 (E.D. Pa. 1958)), aff'd sub nom. Leo Feist, Inc. v. Lew Tendler Tavern, Inc. (267 F. 2d 494 (3d Cir. 1959)).

CATV is even more clearly a public performance under classic concepts. It not only tunes in on a broadcast station-as did the hotel proprietor in Jewell-LaSalle-but it also converts, amplifies, and relays the signal over an elaborate system beyond its own premises to places in which, in most cases, the signals would not otherwise be received. These performances are not less public because each. viewer sees the performance within the confines of his own home. It has been established law for 40 years that

a performance *** is no less public because the listeners are unable to communicate with one another, or are not assembled within an enclosure, or gathered together in some *** public place.

And the Court went on to say:

Nor can a performance be deemed private because each listener may enjoy it alone, in the privacy of his home (Remick & Co. v. American Automobile Acc. Co., 5 F. 2d 411, 412 (6th Cir. 1925), cert. den., 269 U.S. 556 (1925)).

It is imperative that any copyright bill enacted by the Congress deal with the CATV problem in a clear and unambiguous manner. The problem of preserving exclusivity as to program material apparently may well fall solely within the boundaries of Federal copyright law, and there may be no alternative remedy available should Congress' intent be misconstrued by the courts.

The difficulties are underscored not only by the pre-emptive language in section 301 of H.R. 4347, but by the Supreme Court's recent decisions in Sears, Roebuck & Co. v. Stiffel Co. (376 U.S. 225 (1964)), and Compco Corp. v. Day-Brite Lighting, Inc. (376 U.S. 236 (1964)). The U.S. Court of Appeals for the Ninth Circuit, in Cable Vision, Inc. v. KUTV, Inc. (335 F. 2d 348 (1964)), a suit between a CATV system and a local television station serving the same community, read Sears and Compco as preventing it from protecting the rights of the local station in programs save within the confines of the copyright law.

MST respectfully submits that the new statute must include effective remedies against those CATV operators who would pick up a television station's costly programs without consent and without payment and transmit them into the market area served by another station, irrespective of the second station's right of exclusivity-a right procured at appreciable cost from the program owner. In such a case, not only is the CATV operator reaping in the distance market where he has not sown, but he is destroying valuable rights purchased by his competitor, the local television station.

2. The bill should be modified to make clear that it applies to live television programs.

Many works of authorship are first disseminated by live television. broadcasts. Large numbers of persons can and do thereby perceive a work of authorship. Live telecasts represent as great a contribution to public knowledge and culture as similar works which are disseminated in printed form or by motion pictures. Accordingly, works of authorship disseminated by live telecasts should receive copyright protection equivalent to that accorded works of authorship disseminated in tangible form or from tangible copies.

As written, it is doubtful that the bill accords protection against unauthorized performance or exhibition of a live television work which is simultaneously recorded on video tape or film. Yet, if the television station were to record the program first and broadcast the recording over the air, delaying the broadcast by just a few seconds after recording, the broadcast would be accorded protection.

In essence, the foregoing incongruity exists because it appears that under the bill an infringement would occur only when the work of authorship is "copied" from a tangible copy. If this interpretation is correct and we hope it isn't, but if this is correct-it would fail to take into account the basic importance of the intangible artistic conception or work of authorship as distinguished from the tangible medium from which it can be perceived. It would contradict the bill's intent to separate

the "original work" which is the product of the author's creative intellect and which is the real subject of copyright protection and "copies" or "phonorecords” (which are the material objects embodying the work). (Quoted from the supplemental report of the Register, p. 4, committee print, 1965.)

As to a work of authorship which is presented live, MST submits that, at the very least, the "original work" should be fully protected if it becomes fixed in a tangible medium of expression, as required in section 102, concurrently with its transmission. I might note that this uncertainty of interpretation is particularly important as to sports programs, which are almost always televised live. The bill should be amended to remove the uncertainty.

Further, since registration cannot occur until after a live broadcast, an appropirate remedy should be provided to prevent threatened infringement before it occurs. Otherwise, there would be a right but no remedy.

3. Practical remedies against infringements by CATV systems are necessary.

Any consideration of remedies for infringement of statutory copyright by CATV systems must take into account the practical problems of enforcing rights against the thousands of CATV systems which