correct when it flatly concluded that Berne does not allow a jukebox compulsory license in any form. Thus, we have doubts that the Copyright Office proposal would be compatible with Berne. If the Copyright Office's approach were deemed to be compatible with Berne, we see some problems with the draft proposal (found at pages 13-14 of the discussion draft). - - First, the draft "limitation on exclusive right" (the first paragraph of text on page 13) does not adequately provide for the situation where some, but not all, of the performing rights societies reach voluntary agreement with the jukebox operators. The draft provision specifies that if voluntary agreements do not cover "the quantity of musical works substantially the same as were being performed on coin-operated phonorecord players during the year prior to the effective date of this act" presumably, the ASCAP, BMI and SESAC repertories then the prior compulsory license "shall be effective with respect to the musical works that are not the subject of negotiated licenses." But that prior compulsory license covered all copyrighted music. It is conceivable that one or two, but not all three, performing rights societies would reach voluntary agreements with the jukebox operators. In that case, there is no provision for, indeed, no practical way to, prorate the amount paid under the prior compulsory license to apply to the repertory of a performing rights society which does not achieve a voluntary agreement. Further, in such a situation of partial voluntary licensing, the effect of that provision would be to place a cap on any voluntarily-negotiated license fee. The jukebox operators would know that, if they refused to reach agreement, the most they would have to pay would be the compulsory license fee payable under the prior compulsory license. That would be patently unfair to copyright owners of music, for economic circumstances might change and require a higher fee than the prior compulsory license fee. Indeed, it was just such a consideration which prompted the Senate to reject the jukebox operators' effort to freeze the statutory fee at the time of passage of the 1976 Act. Congress deliberately provided for a mechanism to modify the compulsory license fees as economic conditions changed, through the Copyright Royalty Tribunal. The jukebox operators can also make this argument. They could be hurt if conditions changed to warrant a lower fee. A licensing organization then might fail to agree, knowing the compulsory license fee would continue to apply. We also believe that the proposed modifications to Section 801(1)(B), at page 14 of the discussion draft, are ill-advised and would be harmful to copyright owners. The modifications would require the Copyright Royalty Tribunal, in considering one of the statutory factors determining the reasonableness of a rate -- whether the return to the copyright Owner is fair to give "great weight" to two new factors: the rates in effect under the prior compulsory license and the rates contained in any voluntary agreement. - If embedded in the law, the first proposed factor the prior compulsory license fee would freeze for all time a fee determined only for particular economic circumstances. And that fee would not merely be a factor to be considered, but would be given "great weight". It is possible that, with intervening voluntary agreements, a compulsory license determination might not be made for twenty years after enactment of this amendment. Clearly, it would not be fair to copyright owners to force the Tribunal to consider and give "great weight" to a fee determined more than twenty years before. We also see danger in forcing the Tribunal to give "great weight" to negotiated agreements. If one performing rights society made a bad deal, other copyright owners should not suffer as a result. And, as marketplace licensing has shown, the value of the repertories of the performing rights societies differ. ASCAP's repertory is valued higher than the repertories of BMI or SESAC in all marketplace licenses, and we should not be prejudiced by the voluntary rates charged by BMI or SESAC for their lesser repertories. These suggested modifications to 17 U.S.C. $801(1)(B) have no place in our law, under any circumstances. In conclusion, then, we strongly support United States adherence to the Berne Convention as being in the highest national interest. We believe such adherence would require complete abolition of the jukebox compulsory license, to be replaced by voluntary arrangements. We also strongly support abolition of the notice requirement and of the manufacturing clause, and have limited our comments largely to the jukebox issue because we who license performing rights in music are most familiar with that issue. We appreciate the opportunity to make these comments and would be happy to supply any additional information which you think may be helpful to the Subcommittee. Respectfully, Ваплика Bernard Korman BK: b During consideration by your Subcommittee of adoption of the Berne Convention there was no concern demonstrated that Section 118 of the Copyright Act, which provides a compulsory license for public broadcasters, is incompatible with the Convention. Moreover, the analysis of the U. S. Copyright Office does not raise this matter as a problem. However, the Ad Hoc Working Group of the State Department, in its Preliminary Report, has suggested that reproduction rights under Section 118 may be incompatible with the Convention. National Public Radio thinks all of Section 118 is fully consistent with the Berne Convention, and has filed a Comment on the Preliminary Report with the Ad Hoc Committee requesting that it clarify its Report to so reflect. For your information, we enclosed a copy of those comments with this letter. We would, of course, be pleased to answer any questions you or your staff my have about this matter. Thank you for your consideration. Sincerely, 2025 M Street NW Washington DC 20036 Telephone 202 822-2000 50-320 087 24 Douglas J. Bennet NATIONAL PUBLIC RADIO May 19, 1986 Mr. Harvey Winter Director Economics Bureau Department of State Washington, D.C. 20520 Dear Mr. Winter: On behalf of National Public Radio we offer the following comments on the Preliminary Report of the Ad Hoc Working Group on U.S. Adherence to the Berne Convention. Our comments address Chapter 8 of that Preliminary Report. We request that the Ad Hoc Working Group clarify the Report to reflect that all portions of the public broadcasting compulsory license in Section 118 of the United States Copyright Act are compatible with the Berne Convention. National Public Radio (NPR) is a non-profit, noncommercial membership organization which provides interconnection and programming services to over 300 full-service public radio stations and which represents them in developing a viable and diverse public radio service to the American public. NPR and its member stations produce programming, as well as broadcast and distribute programs. Programming which NFR produces for use by public radio stations throughout the country include "All Things Considered," "Morning Edition," and "Weekend Edition." Member stations also produce hundreds of hours of varied programming broadcast throughout the United States. Production of these and other programs by NPR and its member stations currently relies heavily on the coverage, by the compulsory license in Section 118 of the Copyright Act, of both performing and reproduction rights. Just as the Ad Hoc Working Group determines that the public broadcasting compulsory license for performing rights is consistent with the Berne Convention, it should determine that compulsory licensing of reproduction rights under Section 118 is consistent with the Berne Convention. A brief summary of how public radio programs are produced and distributed for broadcast may be helpful to the Ad Hoc Working Group in considering this matter. Public radio programs frequently include musical works: they may involve studio musicians, concert performances or pre-recorded works. Many individual stations operate under severe financial constraints, with limited funds available for program production. Economies of scale and the general quality of national programming are among the factors resulting in station reliance on programming produced by others to fulfill their local broadcast needs. Public radio producers, which include National Public Radio, American Public Radio, independent producers and public radio stations, generally syndicate programs for local broadcast by hundreds of public radio stations nationwide. Most frequently, satellite feeds are used to nationally distribute these programs. Individual stations must be given the right to tape these. programs for future broadcast, after receiving them by satellite, to accommodate diverse programming goals and scheduling needs. This entire system of program production and distribution relies heavily on stations' ability to tape delay the broadcast of programming. The compulsory license for recording rights under Section 118 allows this system to function without the need to individually license the use of musical works from recording rights holders. If public radio producers and distributors were required to secure these rights individually, continued operation of the current system would be severely jeopardized by the additional financial and administrative burdens this would entail. Reproduction rights are as integral to program production and distribution to the public having available public radio programming as are performing rights. The Working Group has determined in its Preliminary Report that a compulsory license for performing rights under the procedures in Section 118 is consistent with Article 11 of the Berne Convention. NPR agrees with the analysis and supports the conclusion of the Working Group on that point. The Working Group does not so plainly conclude that reproduction rights under Section 118 are consistent with Article 9 (2) of the Berne Convention, but rather sets forth alternative findings that reproduction rights under Section 118 may or may not be consistent with Article 9 (2). A direct conclusion that reproduction rights under Section 118 are consistent with Article 9 (2) is in fact warranted. Article 9 provides: (1) Authors of literary and artistic works protected by (2) It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author. (3) Any sound or visual recording shall be considered as a reproduction for the purposes of this Convention. Article 9(2) permits compulsory licensing for reproduction rights like that in Section 118 if the provisions of Article 9(2) are met. As the Working Group recognizes (as an alternative finding), it may be argued that the limited compulsory license for reproduction rights granted in Section 118, for a limited class of works and a limited class of users (public broadcasting entities) is a "special case" under Article 9(2), meets the tests of Article 9(2), and is therefore compatible with the letter and spirit of Article 9. This alternative finding of the Working Group is bolstered by the final recommendations which the Main Committee made to the Union in plenary session when the Berne Convention was being adopted. */ Those recommendations provide: 85. The Committee also adopted a proposal by the Drafting Committee that the second condition should be placed before the first, as this would afford a more logical order for the interpretation of the rule. If it is considered that reproduction conflicts with the normal exploitation of the work, reproduction is not permitted at all. If it is considered that reproduction does not conflict with the normal exploitation of the work, the next step */ The comment "Compatibility of Section 118 of the Copyright Act with the Berne Convention" which the Fublic Broadcasting Service filed with the Working Group on May 14, 1985, at pp. 6-9 makes this analysis more fully. |