ber of ASCAP and it automatically is assured that it has the right to perform the composition over the air, either live or in recorded form. Without a blanket license of this type, the user would have to investigate the ownership of each individual composition it wished to perform and negotiate a contract to permit its performance. The operation of all those branches of the entertainment industry that involved the public performance of music for profit would be almost impossibly cumbersome under such circumstances; and the plans of performing artists to include particular works on their programs easily could be frustrated. Once users of performing rights became reconciled to the need to pay royalties, they recognized the utility of the performing rights society from their own practical point of view.

The success of the performing rights society concept led to the accumulation in the hands of ASCAP of a tremendous aggregation of rights. This concentration of economic power began early to attract the attention of the federal government. The first investigation of ASCAP under the antitrust laws was launched by the Federal Trade Commission in 1923. The Department of Justice also conducted an investigation in 1926. No action was taken until 1934, when the Department of Justice instituted a civil antitrust action against ASCAP." The government's claim eventually was settled by the entry of a consent decree in 1941 under which, among other things, the members of ASCAP were permitted to retain non-exclusive performing rights in their works and ASCAP was prohibited from discriminating in its rates between licensees similarly situated." A criminal information also was filed against ASCAP and certain of its members under the antitrust laws in 1941. This was concluded, at approximately the same time that the consent decree was entered, by pleas of nolo contendere and the imposition of fines totaling $35,250.

The 1941 consent decree was amended in several important respects in 1950, following a decision adverse to ASCAP in a private antitrust suit brought by a large number of motion picture exhibitors." In addition to revamping the performing rights licensing system for motion picture exhibition, this amended decree required changes in the internal organization of ASCAP and its methods of distributing income to its

members. The most important features of the 1950 consent decree for the purposes of the present discussion, however, are those compelling ASCAP to issue a license to any user on non-discriminatory terms and establishing a procedure under which the United States District Court which entered the decree retains supervisory authority over the fixing of rates. If an applicant is dissatisfied with the terms quoted by ASCAP, he can apply to the Court for the establishment of a reasonable royalty rate. Several such proceedings have been instituted.70

In 1950, the Department of Justice brought another antitrust action against ASCAP, attacking the validity of its network of exclusive agreements with similar performing rights societies in other countries of the world. This action also led to a consent decree, which was entered at the same time as the 1950 amendment to the earlier decree in the case dealing with domestic matters."1

Most recently, in 1960, still further amendments were made in the 1941 decree." These arose out of persistent complaints of discrimination within the organization itself against certain classes of members. The 1960 amendments deal largely with the mechanics of allocating among members the funds collected by ASCAP from its licensees."

The current ASCAP consent decree, as noted, contains specific compulsory licensing provisions." Any user who requires a performing rights license is entitled to receive one from ASCAP on non-discriminatory terms. If an agreement cannot be reached on rates by negotiation, the user has the right to apply to the United States District Court for the fixing of a reasonable royalty. BMI also operates under an antitrust consent decree prohibiting discrimination between licensees.75

Accordingly, users of performing rights in copyrighted music have equal access to it pursuant to antitrust decrees under court supervision. The achievement of this end in the field of performing rights came about as the result of a lengthy and expensive series of proceedings involving charges of violations of the antitrust laws, and litigation continues to plague this branch of the musical world.

By contrast, the analogous principle of equal access to copyrighted music by users of the recording right was achieved by a relatively simple legislative process, i.e., the enactment of the mechanical license

Excerpts from the decree appear in Appendix N.

provisions in 1909. These provisions serve a comparable purpose to the activities of ASCAP and BMI; and it seems abundantly clear that the interests of the affected industries and the public have been served much better by having this goal reached by an Act of Congress rather than by a painful series of antitrust proceedings.

It should be clearly understood that the phonograph record industry has no quarrel with ASCAP or BMI, nor should anything stated above be taken as a criticism of their operations. Indeed, as indicated, performing rights societies perform useful functions both from the standpoint of their own members and from the standpoint of the users of the rights they control. Our point simply is that parallel practical considerations compel a similar ease of access to copyrighted music in the phonograph record industry and that history reveals the desired result has been achieved on a less complicated basis in the phonograph record field by means of the mechanical license provisions in the Copyright Act, which derive from Congressional concern to prevent the growth of monopolistic practices, rather than judicial operation of consent decrees as an aftermath of violations of the Sherman Antitrust Act.

Perhaps our concern can be demonstrated most graphically by suggesting the case of a performing artist, whether in the popular or serious musical field. It is almost unthinkable that such an artist could be prevented from walking on to a stage and singing or playing whatever musical compositions happened to form part of his repertoire. The same is true of a performance in a cabaret or a radio or television studio. The reason the artist in fact is free to perform under those circumstances can be traced to the blanket license issued by the performing rights society to the theatre, the concert manager, the cabaret operator or the broadcaster, as the case may be. A similar situation exists today in the phonograph record industry, where the artist can go before the recording microphone and perform whatever is in his repertoire without hindrance. This comes about because of the mechanical license provisions in the Copyright Act. If they were to be eliminated, however, that situation could change overnight, to the detriment of the music industry, the performing artist and the public at large."

52-380 O-66-pt. 2-4

9. The Experience of Foreign Countries.

The manner in which the recording right problem has been dealt with in foreign countries is relevant to our discussion for many reasons. Not the least of these is the fact that American recordings play an important part in the record industries of practically every other country of the world. Duplicate master recordings are exported around the globe and used to manufacture replicas of the U. S. product, so that the same records frequently appear on the bestseller lists in a number of countries simultaneously. The reverse process also takes place, with the United States importing duplicate master recordings of performances by foreign artists. This international traffic in sound recordings is an important method of cultural exchange and influence among nations. The phonograph record manufacturer must reckon with his own country's copyright law, whether the master recording was produced domestically or imported. American recordings thus are subject to the copyright licensing systems of foreign countries; and, similarly, foreign master recordings imported by U. S. manufacturers are subject to the compulsory licensing system of the U. S. statute."

Beyond this, information about the experience of foreign countries in dealing with the identical problem is bound to be helpful in evaluating the Register's recommendation to do away with the statutory license system in the United States. The following survey will reveal that many other nations have followed the lead of the United States in establishing a statutory license system for sound-reproducing devices; that several of these countries after careful study specifically rejected recommendations to eliminate the statutory license system in the course of recent revisions of their copyright statutes; and that it became necessary as a practical matter to develop a recording rights organization with a blanket license system because a number of countries failed to enact compulsory license provisions for phonograph records.

The original Berne Convention of 1886 provided specifically that mechanical reproducing devices were not to be considered infringements of musical copyright." By the time of the 1908 revision, however, a clause had been inserted under which compulsory

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license provisions for such devices were permitted under the local law of participating countries." England was one of the first countries to adopt this system;80 its revised Copyright Act of 1911 included statutory license provisions along the same general lines as those of the United States Act of 1909 (except that the statutory royalty is calculated on a percentage basis).81 Other important countries with statutory license systems for recordings include Germany, Austria, Switzerland and most of the nations influenced by British law, such as Canada, Australia, India, Pakistan, Eire, South Africa and Israel.82 At the present time, the copyright statutes of 23 foreign countries contain compulsory license provisions applicable to phonograph records.

Copyright legislation tends to get out of date, largely because of the development of new methods for reproducing and transmitting literary and musical works. The current revision program in the United States is paralleled by similar programs in other parts of the world. The first of the current series of new copyright laws was enacted by England in 1956.

A specially appointed committee held hearings and made a thorough investigation of the entire subject of copyright before the new English law was drafted. Significantly, much attention was given to the statutory license system for recordings, the elimination of which was urged vehemently in some quarters. Nevertheless, these arguments were rejected and the English Act of 1956 contains compulsory license provisions essentially the same as those in the predecessor Act of 1911.

Copyright revision followed a parallel pattern in India, Pakistan and Ireland; despite efforts to have the compulsory license provisions eliminated, the new laws enacted respectively in 1957, 1962 and 1963 kept the statutory license system intact. As this statement is prepared, thorough-going revisions of the existing copyright laws are pending in Australia, Canada, West Germany, New Zealand and South

• Appendix O is a tabulation of these foreign copyright laws.