The profit motive is not a reasonable ground for imposing copyright liability upon community antenna systems which happen to be owned by investors. They still provide an antenna service; only the details of ownership and the method of payment differs. The effect of this provision of the copyright bill can only produce inequities and additional costs for television viewing in these areas. Moreover, imposition of a copyright liability on community antenna systems is not only discriminatory on a geographical basis— it would impose additional costs for television reception on rural and small community residents-but it is also discriminatory against those who would not be economically able to afford the installation of their own rooftop or more elaborate antenna system. An individual rooftop antenna to secure adequate reception may be quite expensive to install and maintain, but in many areas in the States represented by my association, this may be the only alternative to securing reception through the community antenna system. Imposing a copyright fee upon the systems will inevitably result in increased rates to subscribers and thus impose a burden on those who could not afford to install their own antenna. To summarize, there seems no logical basis to impose an additional economic burden on the television viewer who chooses to subscribe to the reception service provided by a community antenna, while on the other hand, his next door neighbor who is economically able and chooses to erect his own antenna, as well as the viewer in the metropolitan area with his individual antenna, has no such burden. Thank you. Mr. KASTENMEIER. Thank you, Mr. Whyte. Mr. FORD. Mr. Robert K. Weary. Mr. KASTENMEIER. Mr. Weary, welcome to the committee. STATEMENT OF ROBERT K. WEARY, PRESIDENT, OKLAHOMAKANSAS COMMUNITY TELEVISION ASSOCIATION Mr. WEARY. Mr. Chairman and subcommittee members, my name is Robert K. Weary and I am president of the Oklahoma-Kansas Community Television Association. This association includes in its membership 39 community antenna systems, serving approximately 49,000 families in Kansas and Oklahoma. For your information, I have set forth below certain statistics, which I will not take the time to recite, indicating the extent of community antenna activity in the States I represent. One of the principal arguments of the proponents of copyright law revision requiring community antenna systems to obtain clearance for programs broadcast by the stations whose signals they receive is, in essence, that a community antenna system is basically like a television broadcast station. Undoubtedly this thesis, which originated with the copyright representative organizations, will be maintained by broadcast representatives when they appear. The Federal Communications Commission has held that community antennas are not engaged in broadcasting or rebroadcasting. Television stations originate the programs obtaining them from a variety of sources or by producing them. They are transmitted over the air for reception and viewing by means of television receiving equipment. Community antennas function only as receiving devices. They aid or make possible the reception of broadcast signals. They do not select the programs, nor do they charge for them. They do not solicit advertising or sell time. They only receive signals broadcast for public reception. As the statistics that I previously cited indicate, the average size system in the area I represent is relatively small. Serving only approximately 850 subscribers, with a staff consisting of perhaps from 3 to 5 persons, the typical system would be presented with an insurmountable administrative problem by imposition of a copyright clearance requirement. Permit me to illustrate: the community antenna system operator, unconcerned with actual program content of the signals he receives, is not, under ordinary circumstances, aware of the identity of copyright owners, whether or not a program is copyrighted, and has no way of knowing what will be broadcast in sufficient time to negotiate a clearance. Literally hundreds of individuals and organizations hold copyrights in television programs. It is manifestly impossible for a community antenna operator to discover their identity and obtain clear ance. H.R. 4347 suggests no machinery by means of which this problem may be solved, nor do the copyright owners supporting this bill come forth with a proposal as suggested by Mr. Cary in his testimony (statement, George D. Cary, p. 23; transcript, May 26, 1965, p. 27). I submit that their failure to do so during the years in which this bill has been in the stages of preparation implicitly recognizes that this is a problem of administration which simply cannot be solved. And this is not a comforting thought to the members of my association, because the statute proposed sets forth severe penalties for violations. Simply stated, this bill, in my mind, requires community antenna systems to perform an act which in practice is impossible, nevertheless imposing penalties for failure to comply. Worse still, the Federal Communications Commission has adopted regulations to force community antennas to receive certain stations as a prerequisite to remaining in business. So on the one hand we are required by FCC regulation and proposed regulations to receive programs for which H.R. 4347 would require us to negotiate copyright clearance without one scintilla of control or supervision over the license fees by anyone except the copyright owner, who in fact under this bill seems free to refuse to negotiate. Caught in such a dilemma, CATV could easily and readily be forced out of business. At its best the suggested revision of the copyright law would seem to contemplate drastic alteration of the CATV industry. Thus, in the event the community antenna systems are required to obtain copyright clearance, they will be compelled to depart from their customary function of furnishing antenna service and enter the field of bargaining for and furnishing program service. We do not think this alteration in our basic function will serve the public interest in any form and we do not believe this committee wants to force CATV into a program service bidding against broadcasters for copyright clearance. The public has indicated its strong support of CATV the way it is and I submit will resent strenuously having its access to television reception restricted by this legislation. In the States of Kansas and Oklahoma where there is only a limited number of television signals available because of geographic and economic considerations, this impact would be the greatest. In an area already discriminated against in a sense, it would thus face enhanced discrimination through a dramatically effective tool created by the proposed legislation. In closing, this subcommittee has heard the Motion Pictures Association argue that community antenna operators receive a "free ride" at the expense of copyright proprietors, and that their activities are similar to those of the operators of motion picture houses, the only difference being that our subscribers are simply not assembled in one place. This analogy is clearly wrong. CATV does not charge for a motion picture or a program. It is paid for a connection to the antenna whether or not any program is seen and without regard to what programs are received. Any fee charged is for antenna service generally and not for a particular program. I thank you for this opportunity to appear, and on behalf of the Oklahoma-Kansas Community Television Association urge you to amend H.R. 4347 as proposed by Mr. Ford. Mr. KASTEN MEIER. Thank you, Mr. Weary. Mr. FORD. Mr. Chairman, our last witness, Mr. Alfred F. Dougherty. Mr. KASTEN MEIER. Mr. Dougherty, welcome to the committee. STATEMENT OF ALFRED F. DOUGHERTY, ON BEHALF OF THE Mr. DOUGHERTY. Mr. Chairman and members of the subcommittee, my name is Alfred F. Dougherty. I am a member of the bar of the State of Montana and am engaged in the general practice of law in Helena. I am attorney for the Montana Cable Television Association. I appreciate the opportunity to testify before this subcommittee on behalf of the 28 Montana community antenna systems and their approximately 35,000 subscribers. Montana is a rugged, mountainous State with a lot of geography, but very few people. The State's largest city has only 65,000 residents. There are not more than a dozen towns with a population in excess of 10,000. Due to the area's topography and sparse population, Montana is not a major or significant market in the broadcasting industry. In fact, I believe Montana was the last State in the Nation to get network radio. I am told that the Montana congressional delegation, which at the time included Senator Burton K. Wheeler, had to plead with the networks to enter the State in the early thirties. It was not surprising, therefore, that network television was slow in coming into Montana. Few communities could support television stations. CATV was the first to make network television available to Montana-at Kalispell-in 1963. Residents of Montana have been required to turn to community antenna systems and low-powered translators to obtain their television reception because no other means were available. This television is obtained at the expense of our citizens who either contribute to support the low-power stations or to support their local community antenna by paying its monthly charges. Thus, at the outset the burden carried by Montana residents, to obtain television at least somewhat comparable to that of more populous areas, is already great, and we are distressed at the possibility that this committee may approve the proposals of the Register of Copyrights relative to community antennas and impose this further burden upon us. In commenting on H.R. 4347 let me make it plain that neither my clients nor I are opposed to a copyright owner's receiving compensation for his work. We believe in and endorse that right-but we respectfully submit that H.R. 4347, as now written, would grant to the copyright owner double compensation. It is my understanding that the television stataion charges its advertisers on the basis of the number of viewers it serves. The greater the number of viewers, the higher the advertising rate. And it is my understanding the copyright organizations base their charges on the dollar volume of the station. Hence, the greater the number of viewers, the greater the station advertising rate, the higher its dollar volume, and the greater the return to copyright owners. The television stations carried by CATV are zealous in claiming viewers who receive such service because they help the rate picture. For the CATV system to pay a second assessment would be plainly a double reward for the copyright owner. Here is a vivid example of my thesis: KREM-TV in Spokane, Wash., is separated from Kalispell and Missoula, Mont., by 200 miles of some of the most jagged, rugged, and I should say also, beautiful, mountainous country on this continent. Direct home reception of KREM-TV by Kalispell and Missoula residents is an impossibility. But, because KREM-TV is carried by Kalispell and Missoula CATV systems, KREM-TV claims 86 percent coverage of the 10,800 TV households in Kalispell-and 85 percent of the 12,900 TV homes in Missoula. These claims are shown by the American Research Bureau statistics in the Television Factbook and substantially contribute to the station's claimed 219,600 viewers. It is only on this basis that KREM-TV is able to charge a net hourly rate of $800, and it is on this basis that the copyright proprietors are able to charge considerable license fees to KREM-TV. Thus, they are already compensated for the reception of their programs by CATV subscribers. I can state with complete confidence that Montanans are quite emotional about their television reception. It may seem parochial to the big city resident, but Montanans are tremendously eager to receive the same service their fellow citizens in the metropolitan centers are receiving. They have found that quality of service through CATV, and I know they will be resentful of any enactment which requires them to pay a copyright fee for what their big city contemporary receives free of charge. In Montana our CATV systems do not alter, change, or add to any of the program signals they receive. They do no more than receive them and make them available to subscribers. The charge levied is for the service as a master antenna. It is not for the programs received. I respectfully submit H.R. 4347 should be amended in the fashion suggested by NCTA President Frederick W. Ford to achieve fairness and equity. I thank you very much. Mr. KASTEN MEIER. Thank you, Mr. Dougherty. Mr. Ford, witnesses appeared this afternoon from Arizona, Texas, the great Northwest, Oklahoma, Kansas, and West Virginia areas. Are we to infer that geography is quite important in relation to CATV, wide open spaces and mountain areas particularly? Mr. FORD. I think that this is true and, in addition to that, the canyon cities where the signals bounce around among the buildings. My own observation of the tests of the UHF station compared with the VHF station in New York City some place around 1960 convinced me that the most second-class city so far as television was concerned in the United States was New York City. If you have been in hotels up there and around trying to watch television, I think you will confirm what I say, that the canyon city is a difficult problem. Mr. KASTEN MEIER. One other question. Earlier you referred to what might happen to CATV unless the bill were changed, that financially it would work a great burden on the system. You may have to go to pay TV, but Mr. Corbitt and Mr. Whyte, too, alluded to a different contingency and that is that it might be necessary to go into a cooperative type of enterprise to avoid the profitmaking end of it. Do you think this is a possible result? Mr. FORD. As you know, the Commission has authorized translators for some years, which, for the most part, are cooperatives, and they grew very rapidly to begin with and they have not grown so rapidly since because everybody's business is nobody's business and, as a matter of fact, some CATV systems have constructed translators in order to serve the rural areas surrounding the built-up urban areas that can be served economically by CATV because of the high cost of cable. There are other CATV systems that have as many as three translators serving the same communities with the same programs. What happens in many of those cases is that the translator will run down and the signal will get poor and then they will go around and collect money and build it back up again. Then, for a while, it is all right and then the signal begins to drift. off and the equipment gets out of order; so I doubt seriously that a |