which is appropriate whether it be the athletic league, the athletic team, the network or the station.

(d) Virtually all of the remaining programs of commercial stations fall into two categories-feature film programs and so-called syndicated programs. These categories occupy about 60 to 70 percent of television network affiliates' nonnetwork time and a predominant portion of independents' broadcast time.

(i) In the case of feature film programs a station almost invariably contracts with a particular distributor for rights to a "package" or group of films over a substantial period of time-3 to 5 years is not uncommon. Depending upon the contract between the station and the distributor, clearance could be obtained from either the distributor or the station. Lists of feature film programs and their distributors are available. In any event, every station knows what feature film rights it has, and the CATV system can obtain this information and seek blanket clearance for the entire package. If it is unsuccessful in obtaining clearance, it will have to cut out the particular program. The point is that here, too, the CATV operator will have sufficient advance information as to the station's schedule to manage this deletion very readily. If it has not obtained performance rights, this is precisely what it should do.

(ii) Syndicated programs are usually half an hour or an hour in length and are produced especially for television. They will almost invariably be regularly scheduled (perhaps once weekly or perhaps Monday through Friday at a particular time of the day), and the contracts will usually run for 39 to 52 weeks. Precisely the same approach is feasible with respect to syndicated programs as in the case of feature film programs.

(3) The foregoing categories account for virtually all the programing of commercial stations. Only a handful of programs would be left, principally those of a one-shot nature. Big Ten basketball finals would be an evample. As a practical matter the CATV system could seek clearance from the source well beforehand, and it is difficult to believe that any really serious problems would be presented.'

(4) As to educational stations, most of the same considerations applicable to commercial programs would apply, with the possible exception of classroom transmissions under section 109 (2). Here there necessarily will be a question of intent as far as the CATV system is concerned. In any event, once again, the CATV system is in a position to obtain advance information from the noncommercial educational station and to obtain clearance where necessary.

Difficulties are conceivable in the event that the station or network intentionally or innocently infringes a copyright. But as a practical matter these difficulties will be minimal. In the first place, copyright infringement by networks and television stations is a rare occurrence. In the second place, if a network or television station does infringe, it or they and not the CATV system will be the prime candidates to be defendants. In the third place, if the CATV system obtained all the rights it was aware of, only the minimum statutory damages would probably apply. The risk of innocent infringement to which the CATV system would be exposed is thus essentially no different from the everyday risk undertaken by the television broadcaster. In the case of network programs, for example, the station's control is essentially the same as that of the CATV system, viz, the power to decide beforehand whether or not to take a program or program series. But as far as the copyright implications are concerned, the station has no real opportunity to determine whether there has been an infringement by the network.

Thus, the real risk for the CATV operator exists only when he operates with recklessness toward the copyrights of others. If he is willing to make the effort to obtain clearances, his risk can be reduced to minimal proportions no greater than that commonly encountered by broadcasters.*

3. There is no inconsistency between the carriage requirements of the Federal Communications Commission and the existence of copyright protection There is no inconsistency between the requirements of the Federal Communications Commission that CATV systems carry the signals of particular stations and the existence of copyright protection with respect to particular programs. Mr. Ford's assumption that the CATV operator "must pay whatever a copyright

3 Live unscheduled programs rarely contain copyrighted material, and recorded unscheduled programs are generally from the packages in category 2(d) above.

Cf. U.S. v. ASCAP, 331 F. 2d 117 (2d Cir., 1964), where the court declined to order ASCAP to clear feature film, etc., at the source.

owner demands, or refuse to receive the signals of stations he is required by law to receive (thus violating the law), or simply go out of business" is founded on a misconstruction of the Commission's order. (Tr. 1485.)

As I pointed out in my original testimony, the Commission's order expressly recognized the possibility that the pending litigation in the United Artists and Teleprompter cases would establish the right of copyright proprietors to require CATV systems to obtain licenses. [First Report and Order, FCC 65–335, Apr. 23, 1965, par. 55.] And its order went on to state that nothing therein was "intended to affect the determinations of other Federal or State tribunals as to matters within their jurisdiction." In rejecting suggestions that copyright be specifically mentioned in the Commission's CATV rules, the Commission stated that express recognition of copyright and related rights in programs was "unnecessary," since nothing in the order would affect the determinations of other tribunals. [Id., para. 159.]

The Commission's order requires only that signals of television stations be carried by CATV systems under certain circumstances. Neither expressly nor by implication does it even suggest that the CATV system must carry any particular program of any particular station if it would be a violation of copyright for the CATV system to do so. Moreover, we think it clear that the treatment of the copyright situation by the Federal Communications Commission in its April 23, 1965, Report and Order was intended to afford the basis for a CATV system's not transmitting a particular program if it seeks necessary copyright clearance and does not obtain it. And, if there is any ambiguity on this score, it will require nothing more than a simple pleading filed by NCTA with the FCC to present the ambiguity and a simple order of the FCC to remove it.

CONCLUSION

In summary, the Association of Maximum Service Telecasters submits that the subcommittee should reject as a basis for exempting CATV the alleged impracticability of securing copyright clearance and should adhere to the recommendation of the Register's supplementary report that such an exemption not be included.

Mr. KASTEN MEIER. The committee will now recess until 20 minutes to 12, at which time we will hear the next witness.

(A brief recess was taken.)

Mr. KASTENMEIER. The committee will come to order. Our next witness will be the Community Television Association, principally represented by Mr. Frederick Ford, president, and certain other witnesses will also, the Chair understands, testify. Welcome to the committee, Mr. Ford, and, if you will, identify your associates who may be with you or may later care to testify.

STATEMENT OF FREDERICK W. FORD, PRESIDENT, NATIONAL COMMUNITY TELEVISION ASSOCIATION, INC., ACCOMPANIED BY E. STRATFORD SMITH

Mr. FORD. My name is Frederick W. Ford. I am president of the National Community Television Association.

The witnesses I have with me at the witness table, Mr. Stratford Smith-E. Stratford Smith-and also accompanying me are six witnesses, Mr. Don Corbitt, Mr. Tom Creighton, Mr. Clifton W. Collins, Mr. Thomas J. Whyte, Robert K. Weary, and Alfred F. Dougherty. Their testimony will be quite brief.

The National Community Television Association is composed of approximately 620 CATV systems serving roughly 60 percent of the total CATV subscribers in the Nation, and 60 associate members who are engaged in manufacturing or a related activity.

First Report and Order in Dockets 14895 and 15233 (Apr. 23, 1965).

CATV systems permit private viewers to receive regular television broadcasts which might otherwise be difficult or economically impossible for them to receive because of their disadvantageous geographical locations, or in some instances to avoid a multiplicity of antennas.

The first community antenna was installed on an experimental basis at Astoria, Oreg., in 1949, and the first commercial system at Lansford, Pa., in 1950. Today, there are approximately 1,600 CATV systems serving more than 5 million viewers. Some, but very few community antenna systems, have the facilities to originate programs. Most systems receive from 1 to 10 stations with an average of about 4.

The number of systems is growing rapidly. It is worthy of note that CATV is the only television service which grew up in the grassroots. All other forms of television have been or are being developed in the great population centers.

Public service is the historic and only justification for devoting a large portion of the radio spectrum to broadcasting. If we are to continue to justify the use of such a large portion of this valuable national resource for broadcasting in the face of industrial and military demands for the same spectrum space, we must promote the widest possible use and enjoyment of broadcast services by the American public utilizing all methods and techniques available. If we fail to do this we are wasting this great resource. Maximum service in the public interest is the ultimate objective and only justification for the assignment of the radio spectrum for use by private interests.

Insofar as the viewing public is concerned, service to the public consists of the technical excellence and quality of the signal it receives, and the number of stations from which it has to choose. It is on this basic fundamental principle of service to the public that the community antenna service was founded and has grown. This growth has been a direct response to the demand of the viewing public for the reception service CATV furnishes.

The Deputy Register of Copyrights, Mr. George D. Cary, stated in his testimony before you that:

The Constitution itself made it clear that the purpose of this protection for authors was to promote the progress of science and the useful arts, which is simply another way of saying that the protection was to be in the public interest.

The nature of the public interest considerations which face the Congress is succinctly stated in the House committee print, 89th Congress, 1st session, Copyright Law Revision, part 6, at page 13:

The basic legislative problem is to insure that the copyright law provides the necessary monetary incentive to write, produce, publish, and disseminate creative works, while at the same time guarding against the danger that these works will not be disseminated and used as fully as they should because of copyright restrictions.

In his testimony, Mr. Cary briefly reviewed the nature of CATV and the contentions of copyright owners and those seeking outright exemption of CATV. After this review he stated:

In our view, there may be valid arguments on both sides of this entire question. A particularly strong point on the CATV side, it seems to me, is the obvious difficulty under present arrangements of obtaining advance clearances for all the copyrighted material contained in a broadcast. This represents a real problem that cannot be brushed under the rug. It seems to us that it is up to the copyright owners to come forward with practical suggestions for solving it.

On balance, however, it is our view that the CATV operators are making a performance to the public of a copyright owner's work. This performance results in a profit which, in all fairness, the copyright owner should share.

Unless he is compensated, the performance can have damaging effects upon the value of the particular copyright. For these reasons, therefore, we have not included an exemption for commercial community antenna systems in the bill. Nowhere, either in the above report or in his testimony, do I find any reasoned analysis of the facts, conclusions of fact or any applications of the legislative criteria to them. His conclusions are unsupported except for his subjective opinion.

Moreover, there is no analysis or explanation of Mr. Cary's concept that community antenna operators "are making a performance" of the copyrighted work.

An objective analysis of the facts would disclose that the only "performance" made is by the broadcaster, whose signals are received through the community antenna service in the same manner as housetop or other private antennas. Since there is no "performance," the question of profit from the antenna service is immaterial.

I can, therefore, find no justification in Mr. Cary's statement for his resolution of the issue. I will, in my testimony, undertake to point out a number of factors which were apparently not considered in drafting the proposed revision of the copyright law, HI.R. 4347.

This revision would restrict home television reception by CATV subscribing members of the public by giving the holder of a copyright, for the first time, the exclusive right to control the reception of a telecast copyrighted work by a homeowner who uses a community antenna, which is basically contrary to the public's interest in full dissemination of the protected works.

Although several witnesses who have argued for control, through copyright, of reception of copyrighted telecasts by means of community antenna systems have recognized some of our arguments in opposition to the present bill's lack of a community or apartment house master antenna exemption, they have nevertheless supported the bill's provisions which would subject these millions of television viewers to a copyright fee not levied upon other viewers fortunate enough to live in geographical areas where television signals can be adequately received without the use of a community or master antenna. This pure element of geographic chance, whether due to unfavorable terrain or high buildings which interfere with television reception, has been ignored by those who seek to create an element of invidious discrimination between Americans on an arbitrary and unjustified basis which to me is contrary to our basic concept of equality of treatment under the laws.

I. THE PROPOSED BILL CONFLICTS WITH NATIONAL TELEVISION POLICY

At the outset, I would like to draw the subcommittee's attention to a problem of particular concern to me. As I am sure the subcommittee is aware, the Federal Communications Commission has been perplexed with the problem of integrating community antennas into the national television scheme. For a number of years the Commission has proposed legislation amending the Communications Act to deal with community antennas.

The Interstate and Foreign Commerce Committee is presently considering a bill introduced by Chairman Harris which would confer authority on the Commission to regulate community antenna television systems. Hearings have been held within the last month on this bill.

In December 1962, the Commission proposed regulations applicable to community antenna systems served by microwave relay systems. Recently the Commission finalized these regulations and proposed to make similar regulations applicable to all community antenna systems. It is the basic principle of the regulations and of the proposed legislation that all so-called local stations must be carried by community antenna systems. Although the definition of what is a local station has not been completely clear or consistent in these proposals over the years, all proposals have contemplated that stations located in the same city or town as the community antenna must be received on the antenna system.

In addition, the Commission's regulations require, and the proposed legislation contemplates, carriage of stations within whose grade A contour the community antenna is located. Moreover, in many, if not most circumstances, a community's antenna will be required by the regulations to receive the signals of a station in whose grade B contour it is located.

Thus the national television scheme, as envisaged by the proposed legislation and the committees of the Congress considering this legislation, as well as the Federal Communications Commission, requires a community antenna operator to provide reception of the signals of certain television stations. In this connection I invite the committee's attention to the fact that there will not be many community antenna systems that are not within the compulsory reception requirements envisaged by the Commission and the proposed legislation.

Without detailing the technical requirements of the Commission's regulations and the proposed legislation the effect of both will be, with few exceptions, to specify the particular stations whose signals the community antenna must receive. In other words, community antenna operators in many cases will have little, if any, discretion as to the stations whose signals are received on their system.

As I have stated, the purpose of the Commission's regulations and the proposed legislation is to integrate community antenna systems into the national scheme of broadcasting. It should therefore be apparent that there is a serious conflict between the objectives and effects of the legislation being considered by the Interstate and Foreign Commerce Committee and this copyright revision legislation. Community antenna systems will be required to receive certain signals containing programs, and at the same time, under the copyright revision legislation being considered by this commiteee, would be required to attempt. to negotiate licenses giving them permission to receive these very same signals.

There are both legal and practical conflicts in this situation; that is, should a community antenna system operator be required to receive the signals of certain stations broadcasting programs, and at the same time be required to secure and pay for licenses for the reception of these programs?