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came encumbered with the idiosyncratic needs of educational users. These doctrines are, however, the most flexible limitations the statute offers in order to balance its expansive rights and broad subject

matter.

V

THE FUTURe of the 1976 ACT

The 1976 Act's strategy has caused it difficulties in adjusting to technological development. The specificity of the statute's prose renders its detailed provisions increasingly irrelevant, while its few more general provisions are not elastic enough to compensate for the specific provisions' weaknesses. Although the statute is a relatively young one, its inability to adjust to the changes in the world it was designed to order has already become manifest. I will review two of the 1976 Act's most troublesome failures. First, I will illustrate the pitfalls of reliance on too-specific language by examining the fate of the statute's cable television provision. I will then explore the inadequacy of the law's few general provisions in a discussion of the problems posed by private use.

A. Cable Television and its Competitors

Under the 1976 Act's broad definition of public performance, 373 any transmission of a radio or television signal is a public performance and can trigger copyright liability unless it comes within a privilege or license spelled out in the statute. For example, one subsection of the statute privileges the behavior of individuals who merely turn on a radio or television in a public place;374 without that exemption, a clerical worker's use of a transistor radio at the

373 See 17 U.S.C. § 101:

To perform or display a work “publicly" means—

(1) To perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered; or

(2) To transmit or otherwise communicate a performance or display of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.

374 See id. § 110(5). Subsection 110(5) establishes a conditional privilege for the "public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes," but prohibits charging anyone to see or hear the transmission or any further transmission of the signal. The statute defines transmission as communication "by any device or process whereby images are received beyond the

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office would infringe the copyright owner's exclusive right "to perform the copyrighted work publicly."375

The cable television section includes an exemption for passive common carriers with "no direct or indirect control over the content or selection of the primary transmission or over recipients of the secondary transmission, and whose activities with respect to the secondary transmission consist solely of providing wires, cables, or other communications channels for the use of others."76 It includes a complicated group of privileges and compulsory licenses for some, but by no means all, cable television transmissions. " The complex provisions of the cable section were drawn to accommodate industry practices in the mid-1970s and to incorporate the substantive regulatory structure that the FCC had put in place, much of which was integral to the deal. Neither the industry practices of the mid-1970s nor the FCC's regulations, however, survived very long.

The development of satellite technology soon made satellite transmission preferable to microwave transmission for delivery of cable signals. The copyright status of satellites and satellite transmissions, however, was murky. Could a communications satellite come within the statutory exemption for passive common carriers? Nobody was sure. 378 The use of satellite technology spurred the growth of original cable programming, which offered an attractive alternative to the importation of distant signals. Pay cable programming companies, such as Home Box Office, began to offer programs directly to cable systems. The FCC imposed stringent restrictions on pay cable programming, but, in 1977, the Court of Appeals for the D.C. Circuit struck those regulations down. 179 Shortly thereafter, the FCC decided to re-examine the rest of its cable television regulations, 380 and ultimately dismantled much of

375 Id. § 106.

376 Id. § 111(a)(3).

377 Id. § 111(c).

378 See 1979 House Hearings, supra note 312, at 23 (prepared statement of Barbara Ringer, Register of Copyrights). Ultimately, the courts concluded that communications satellites operating as common carriers were entitled to the passive carrier exemption in § 111(a)(3). See Hubbard Broadcasting v. Southern Satellite Systems, 777 F.2d 393 (8th Cir. 1985), cert. denied, 479 U.S. 1005 (1986); Eastern Microwave v. Doubleday Sports, 691 F.2d 125 (2d Cir. 1982), cert. denied, 459 U.S. 1226 (1983).

379 See Home Box Office v. FCC, 567 F.2d 9 (D.C. Cir.), cert. denied, 434 U.S. 829 (1977).

380 See 1979 House Hearings, supra note 312, at 3 (prepared statement of Henry Geller, U.S. Dep't of Commerce).

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the regulatory structure on which the copyright statute's language had been based. 381 Some of the remaining regulations were later held unconstitutional by the courts. 382 The newly established Copyright Royalty Tribunal attempted to compensate for the FCC's deregulation with a radical recalibration of compulsory license royalty fees;383 copyright owners, broadcasters, and cable operators came running to Congress demanding that it revise the balance.384 Members of Congress again applied pressure to encourage a privately negotiated solution.385 Tentative deals emerged from private negotiations but dissolved before final agreements could be reached. 386

At the same time, the playing field grew more crowded. Alternatives to cable television systems sprung up. Apartment complexes installed Satellite Master Antenna Systems, which combined satellite dishes and conventional antennas to provide a range of programming to residents. The Register of Copyrights concluded that the application of the compulsory license provision to Satellite Master Antenna systems was unclear.387 Further complications arose in 1982 when the FCC authorized low-power television stations. 388 Was a low-power television station located in the same community as a cable system a "local" station within the meaning of the statute and thus "entitled to insist upon its signal being retransmitted by a cable system pursuant to the rules, regulations, and authorizations of the Federal Communications Commission in effect on April 15, 1976"?389 Alternatively, was the station to be deemed a “distant” one, and entitled to royalties if the cable system

381 See 1983 Senate Hearings, supra note 313, at 5 (testimony of David Ladd, Register of Copyrights).

382 See Quincy Cable TV v. FCC, 768 F.2d 1434 (D.C. Cir. 1985), cert. denied, 476 U.S. 1169 (1986).

383 See National Cable Television Ass'n v. Copyright Royalty Tribunal, 724 F.2d 176 (D.C. Cir. 1983).

384 See Copyright/Cable Television: Hearings on H.R. 1805, H.R. 2007, H.R. 2108, H.R. 3528, H.R. 3530, H.R. 3560, H.R. 3940, H.R. 5870 and H.R. 5949 Before the Subcomm. on Courts, Civil Liberties and the Administration of Justice of the House Comm. on the Judiciary, 97th Cong., 1st & 2d Sess. 2 (1982) (remarks of Rep. Kastenmeier).

385 See, e.g., id. at 1266-67 (testimony of Thomas Wheeler, Nat'l Cable Television Ass'n); id. at 1335 (testimony of Jack Valenti, Motion Picture Ass'n of America). 386 See, e.g., id. at 1357 (testimony of Vincent T. Wasilewski, Nat'l Ass'n of Broadcasters).

387 See Copyright and New Technologies, supra note 2, at 53-54 (prepared statement of Ralph Oman, Register of Copyrights).

388 See 47 Fed. Reg. 21,468 (1982), on recon., 48 Fed. Reg. 21,478 (1983).

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chose to carry it? Low-power television stations asked the Copyright Office for a ruling on their status; the Copyright Office held a public hearing on the issue and concluded that the statute was ambiguous. 390

As with the 1909 Act, linguistic fortuity appeared to control the legal status of developing technology. The increasing use of satellites led to the marketing of the home satellite dish, which enabled viewers to intercept satellite transmissions without paying a cable system to deliver them. Was the use of a satellite dish an infringement of copyright? The answer depended in part on whether the satellite dish could appropriately be characterized as a “single receiving apparatus of a kind commonly used in private homes."391 In response to home satellite dish purchases, cable programmers began scrambling their signals. Cable services sought to scramble the broadcast signals they obtained via satellite, but the copyright statute posed a problem. Both the exemptions and the compulsory licenses in the statute prohibited signal alteration. If the satellite systems performed either the scrambling or unscrambling themselves, they could no longer claim that they had no control over the signal's content but merely provided "wires, cables, or other communications channels for the use of others."392 If a cable system scrambled or unscrambled the signal itself, it would run afoul of the statutory provision that prohibited willful alteration of the signal "through changes, deletions, or additions.”393

The essence of the problem for all of the newly developed entertainment technologies was that the 1976 Copyright Act gave copyright owners a very broad public performance right subject only to enumerated exceptions. The definition of performance was designed to encompass future technological developments; the privileges and limitations were not. The legality of a new entertainment service, therefore, depended entirely upon whether its activities fit within specifically worded exceptions negotiated without it in mind. 394 This severely disadvantaged newcomers to the market

390 See Copyright and New Technologies, supra note 2, at 7-10 (prepared statement of Ralph Oman, Register of Copyrights). In 1986, Congress enacted a narrow amendment to § 111, clarifying low-power television's status for the purpose of the cable compulsory license. See Pub. L. No. 99-397 (1986).

191 17 U.S.C. § 110(5). See Entertainment and Sports Programming Network v. Edinburg Community Hotel, 623 F. Supp. 647 (S.D. Tex. 1985); Copyright and New Technologies, supra note 2, at 122 (colloquy).

392 17 U.S.C. § 111(a)(3).

393 Id. § 111(c)3).

394 See Copyright and New Technologies, supra note 2, at 4 (testimony of Ralph

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(Vol. 68, 1989] place, since, at best, their legal status remained uncertain until Congress or the courts could speak. A new medium's only secure course was to pursue negotiated licenses with the innumerable copyright owners whose works appeared in the signals, at prohibitive transaction costs.

I pick on the cable compulsory license provision because it is a particularly easy target, and because the unsuccessful effort to clarify its ambiguities has occupied Congress throughout the past decade. 395 The problems with the cable television provisions, however, are symptomatic of problems that pervade the 1976 Act. Defining very broad rights subject to very specific exceptions creates a systemic bias: the exceptions will quickly grow obsolete, while the increasingly less qualified rights will endure. The lesson that emerges from the rapid obsolescence of the cable provisions is that a statute needs more than a discernible strategy to adjust to technological change; it must also incorporate some flexibility."

B. Private Use

396

Technological progress has gradually upset the overall balance that the statute struck when it was enacted by making the law's specific limitations trivial. The few more elastic limitations have been insufficiently powerful to restore the law's balance. In the

Oman, Register of Copyrights). In Pacific & Southern Co. v. Satellite Broadcast Networks, for example, the operator of a direct broadcast satellite, which made secondary transmissions of broadcast programming directly to home satellite dishes, argued that it was entitled to a cable compulsory license. The court held that defendant could not use a cable compulsory license because it was not a cable system within the meaning of the statutory language. "[T]he definition of a cable system... requires the cable system to be facility, located in any state, which makes secondary transmissions of signals. SBN's satellite which orbits the earth is not a facility located in any state." Pacific & Southern Co. v. Satellite Broadcast Networks, 694 F. Supp. 1565, 1570 (N.D. Ga. 1988).

395 Extensive inter-industry negotiations have yielded only partial, piecemeal solutions. In 1988, Congress clarified the rules for a subgroup of satellite systems operators by adding a complicated new compulsory license to the statute. See Satellite Home Viewer Act of 1988, Pub. L. No. 100-667, 102 Stat. 3935 (1988) (codified at 17 U.S.C. § 119); Olson, supra note 2, at 121-22; supra note 16.

396 In theory, courts could supply the flexibility that the statute lacks. Courts could attempt to interpret the 1976 Act in a manner that would give greater flexibility to its limitations. They could go further and use the statute's specific privileges as bases for generalization. The ephemeral recording privileges in 17 U.S.C. § 112, for example, might suggest a more general privilege to make temporary copies (or indeed other incidental use) of a copyrighted work in connection with a use that has already been licensed. Most contemporary courts, however, would view such an undertaking as