RESPONSES FROM MR. MERLIS TO WRITTEN QUESTIONS SUBMITTED BY SENATOR MATHIAS 1. In your testimony you express some apprehension about one of the Ad Hoc Working Group's conclusions. While you agree that the cable compulsory license fees that are paid for distant signals are Berne compatible, you have doubts about whether the compulsory license for cable retransmission of local or network programming is compatible because no fees are paid to copyright holders for these retransmissions. If we were to go ahead and adhere to Berne, what do you propose as a solution assuming your fears about cable retransmission of local programming are correct? Would this problem be solved if Congress both said that the current cable compulsory license is consistent with Berne and took steps to ensure that the Convention is not self-executing? 2. In your testimony you express concern over the issue of moral rights. You state that, "Despite any contractual rights that the creator might assign to the programming service, moral rights' could be asserted by the creator to prevent editing necessary to comport with community standards, or even necessary to make the production fit within a prescribed time slot for telecasting." What has been the experience of cable in other countries such as France, which has a long tradition of moral rights? Would your concerns be put to rest if the Congress could assure that the Convention is not self-executing? This letter is in response to your and Senator Specter's request of May 21st concerning the views of the National Cable Television Association on United States accession to the Berne Convention. At the outset, it may be helpful to summarize very briefly the points I raised in my testimony. 1. NCTA is opposed to any action in regard to the Berne Convention which would directly or indirectly disrupt domestic copyright law. 2. The study and debate surrounding accession to the Berne Convention seem to presume that accession is, in fact, desirable and tends to focus only on whether, in the abstract, certain elements of domestic copyright law are compatible. NCTA knows of no body of knowledge which has attempted to measure or predict the potential impact on domestic copyright law that accession to the Berne Convention is likely to cause, but believes such a body of knowledge should be developed so that the desirability of accession may be determined by more than intuition. 3. Congress should not act on the Berne Convention simply to satisfy legal or diplomatic convenience, unless it also understands, at the same time, what the impact of that action would be. 4. NCTA is opposed to U. S. accession to the Berne Convention based on the inadequate record. NCTA urges Congress to study the matter more carefully and deliberately before making its decision. Unfortunately, NCTA at this time can only identify for you, as we did in our testimony, the key areas in which the body of knowledge concerning the Berne Convention and its impact are critically deficient in relation to cable television. If NCTA had the answers to the questions that we raised in our testimony, we would be pleased to point them out to the subcommittee. Our point, Mr. Chairman, is this: the balance of American domestic copyright law is an extremely delicate one. Yet based on that balance, American consumers have access to a greater diversity of creative work than do consumers anywhere. And, consumers have responded to this availability through an ever-increasingly voracious appetite for creative works. In return, the authors of creative works have been protected and enriched. Until we all have a better understanding of the likely impact of accession to the Berne Convention, Congress should not risk disruption of the copyright balance that should stand as a model to the world. NCTA's concerns would not be ameliorated by Congressional assurances that the Convention is not self-executing. Even with the impotence that seems to characterize international accords NCTA finds it difficult to believe that accession to the Berne Convention would not, at a minimum, set into motion forces which ultimately would disrupt the balance of domestic copyright law, particularly where the issue of "moral rights" is concerned. NCTA understands that the principal proponents of U. S. accession to the Berne Convention, other than the State Department which seeks it as a matter of diplomatic facility, are copyright holders concerned about piracy of their products in foreign markets. Although NCTA is sympathetic to this serious problem, this group has failed to demonstrate any meaningful cause and effect which will occur between U. S. accession and stopping the piracy problem. We suggest, for example, that U.S. accession to Berne will have little, if any, impact on stopping piracy in countries like Taiwan. NCTA agrees that international piracy of protected intellectual works is a pressing problem which the United States government needs to address. However, we believe that there are diplomatic and trade measures which may be taken which are far less drastic or precarious in nature than acceding to the Berne Convention when we do not adequately understand the impact of this action. NCTA respectfully requests that this response to your questions, Mr. Chairman, be made a part of the record of the Subcommittee's hearings. We look forward to working with the Subcommittee further and answering any more questions that it might have. Senator MATHIAS. Mr. Olsson. STATEMENT OF HARRY R. OLSSON, JR. Mr. OLSSON. Thank you, Mr. Chairman. CBS, like other broadcasters, is not only a user of copyrighted works, but an owner of them as well. In both roles, American broadcasters are adversely affected when copyright protection in a foreign country is denied. The people on the last panel criticized U.S. use of the back door to Berne. If we want to be in a position to reform the freeloaders of the world, we cannot be one ourselves. So CBS supports U.S adherence to Berne. There are countries that are very friendly to us, but nevertheless provide us with no copyright protection, other countries where the copyright protection is selectively insufficient. One example, Mr. Chairman, of selective insufficient protection is Canada. This normally friendly neighbor does not grant copyright protection against the retransmission of copyrighted works contained in broadcast signals. Retransmission permission need not be secured nor payment made. Canada is one of the most heavily cabled countries in the world. Its cable systems regularly retransmit to their subscribers the broadcasts of affiliated stations of the three U.S. national networks. Moreover, a private corporation called Canadian Satellite Communications, Inc., or Cancom, has made itself the distributor of the copyrighted works contained in these broadcast signals to cable systems all over Canada. Its method of doing business is to intercept the signals of the U.S. network affiliates, scramble the signals it has intercepted, and charge the cable systems for the right to retransmit to the cable system subscribers what Cancom has poached from the broadcast ers. Under present Canadian copyright law, neither cable system retransmissions nor Cancom retransmissions are protected. There is some hope now that Canada will adopt a new law which will provide some protection. Both Canada and the United States adhere to the Universal Copyright Convention, which prescribes national treatment for the works of other contracting state nationals, and also that the protection must be adequate and effective. There is no help for us in that convention, however, because Canada does not give its own nationals retransmission protection, and because Canada obviously claims that the protection it offers satisfies the adequate and effective test. Canada is a member of the Berne Convention, but it is bound only by the early Rome text of 1928, which provides no protection against retransmission. Berne's present text does. U.S. adherence to the present text of the Berne Convention would not be a panacea for the Canadian broadcast retransmission problem. However, U.S. adherence would have the effect of encouraging entry into Berne by other nonmember countries and of encouraging the acceptance of Berne's present higher standards by countries like Canada. Adherence would remove the international embarrassment of the United States, the world's largest exporter of intellectual works, urging higher standards protection while it is not a member of the higher standards international convention. Furthermore, Congress and the administration have wisely made the international recognition of intellectual property rights a majority priority of our trade policy. The last panel talked about the GATT and the inclusion of an intellectual property code in GATT. We at CBS think that is a great idea. The chief obstacle to U.S. entry into Berne has been the manufacturing clause of our copyright law, and politically, we think, it is probably the most difficult obstacle to get over. The clause is due to expire by its own terms at the end of June 1986, and we submit it should be allowed to expire. The clause seriously weakens our international copyright protection efforts. It also appears to violate our international trade obligations under GATT because it discriminates in favor of Canada against other GATT members, and because it extends protection to a domestic industry other than by the application of its import duties. Thank you very much, Mr. Chairman, for the opportunity to be heard. [Mr. Olsson's submission for the record follow:] 50-320 O 87 13 PREPARED STATEMENT OF HARRY R. OLSSON, JR. General Attorney, CBS Inc. SUMMARY Standards of copyright protection are low in certain parts of the world. For example, broadcast signals and programs are used in many foreign countries without permission or compensation; Canada is one such country. The United States should adhere to the Berne Convention to raise international copyright protection standards. The chief obstacle to United States adherence to Berne is the Manufacturing Clause which is scheduled to expire at the end of June 1986. The Manufacturing Clause is also generally an obstacle to the achievement of the international intellectual property protection and trade objectives of Congress and the Administration. The clause violates the General Agreement on Tariffs and Trade. The Manufacturing Clause should be permitted to expire as scheduled. Mr. Chairman, gentlemen, CBS appreciates this opportunity to express its views. My name is Harry R. Olsson, Jr. During the past 33 years I have worked as a broadcast lawyer. Since 1969 I have been a General Attorney of CBS Inc. During these years I have had an interest in domestic and international copyright and communications, and been active in such professional circles. I am here to urge that the United States adhere to the |