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mittee, we have agreed upon a joint presentation, where all of us will be available subsequent to the presentation to answer your questions.

Thank you.

Mr. BRENNAN. Counsel thanks all three societies for their cooperation and hopes it will continue.

Senator MCCLELLAN. Have you submitted your statement?
Mr. CRAMER. Yes.
Mr. BRENNAN. Yes, Mr. Chairman.

Senator MCCLELLAN. They will be printed in the record in full.
You may proceed.
STATEMENT OF HERMAN FINKELSTEIN, GENERAL COUNSEL,

ASCAP; ACCOMPANIED BY: EDWARD M, CRAMER, PRESIDENT, BMI; ALBERT F. CIANCIMINO, COUNSEL, SESAC, INC.

Mr. FINKELSTEIN. Mr. Chairman, in accordance with the committee's request, this statement, as Mr. Cramer pointed out, is being presented jointly on behalf of the three American organizations which make it possible for all users of musical works, including operators of cable televisions systems to obtain licenses to perform publicly in nondramatic form, any musical composition required in their operations.

These organizations, the Ameriacn Society of Composers, Authors, and Publishers, commonly known as ASCAP; Broadcast Music, Inc., commonly known as BMÍ; and SESAC, Inc. are well known to the Chairman and members of this committee. Each is filing a separate statement, but all three join in this statement, following the suggestion of counsel for this committee.

We shall briefly summarize the reasons supporting our position that there is no need for a statutory license for the music embodied in these three repertories because there is already adequate assurance of the availability of all music they require at fair and nondiscriminatory prices; and that if any price control is necessary, it is already available by resort to an impartial body--the courts or arbitration.

As our respective supporting statements indicate:

(1) Music performed in nondramatic form is unique among copyrighted works in that it is all available to everyone, including CATV, on a nonexclusive basis without any problems of clearance or complicated negotiations for individual works, or fears of prices being arbitrary, unreasonable or discriminatory.

(2) Music has been available to all users through this simple method of licensing for decades.

(3) The assurance that prices will be fair, reasonable, and nondiscriminatory is a matter of public record. In the case of ASCAP, it is embodied in a decree of the Federal Court entered in 1950 on the consent of the U.S. Government and ASCAP.

The Federal Court is available to any user, including CATV, who questions the reasonableness of rates quoted by ASCAP. Several proceedings to determine reasonable rates have been brought by broadcasters, wired music operations and others. In fact, proceedings to determine reasonable rates brought by the national broadcasting networks and by Muzak operators and others are pending at this time.

BMI and SESAC, Inc. have tendered arbitration to the CATV representatives and will continue to do so.

(4) The distance of the station from which music is picked up does not raise any problems. Under the prevailing licensing system, all music is equally available to CATV whether it comes from distant sources, from local sources, or even when it is originated by the cable system itself.

5. We have heard a great deal about the keeping of records of uses and seeing that payments are apportioned among those whose works are used. This is undertaken by the licensing organizations; it does not present a problem to the CATV operator.

6. The music licensing organizations have met with representatives of the cable television industry and have not had any problem as to the method of licensing and the availability of all music used in nondramatic form to all CATV operators for all purposes.

Figures requested by cable television to assist in reaching agreement as to rates for all their music were given to CATV by these organizations several months ago. There is every reason to believe that agreement can be reached with the CATV industry, as it has been with other industries, considering all the safeguards available to CATV.

In conclusion, we submit that there is no necessity for a compulsory license for musical works if those works are available on the following basis:

First, the works are part of a total repertory made available to cable television under a single license agreement without requirement of separate negotiations for individual works or individual uses;

Second, the works are available on a nonexclusive basis on fair and nondiscriminatory terms.

Third, the agreement makes the works available for a substantial period of time. Agreements are made available to broadcasters for a period of 5 years.

Fourth, in the event of dispute as to the reasonableness of the rates quoted, the rates can be determined by resort to a U.S. district court or to arbitration.

Fifth, provision is made for payment to the licensor for distribution to the parties entitled to the amounts collected so as to avoid any disputes between the licensees—that is, individual cable systems--and individual copyright owners.

As we have previously indicated, section 111 could be framed so as to exempt musical works from a compulsory license if they are voluntarily made available on the basis I have outlined; or it could specifically require that all musical works be licensed to cable television for retransmission on that basis.

If a work does not meet those requirements, it could, of course, be made subject to a compulsory license on the same basis as other material.

In sum, the music licensing organizations have tendered licenses that meet all problems of the cable television industry. These problems have been solved by a system that insures a maximum of availability and a minimum of accounting and negotiation. Equal treatment of all is assured without preference to anyone.

The only item for discussion is price, and if that cannot be agreed on, there is an impartial outside body-a court or arbitration-available to insure reasonableness.

We respectfully submit that when copyright owners make their works available to all users on a basis that insures reasonableness, there is no need for a statutory licensing system-a regulatory device that should be resorted to only when voluntary action fails to meet a public need.

Thank you, Mr. Chairman.
If there are any questions, any of us will be happy to answer them.
Senator McCLELLAN. Thank you very much.
Senator Burdick, do you have any questions?

Senator BURDICK. On page 2 you refer to the court action in 1950, and then you state, “The Federal court is available to any user who questions the reasonableness of rates quoted by ASCAP including CATV.” This is a legal question.

What is your basis for appealing to the courts at that point?

Mr. FINKELSTEIN. Oh, when you have organizations that have as many copyright owners as ASCAP has, you are going to have problems under the antitrust laws. And we each have worked out agreements with the U.S. Government that we commonly refer to as consent decrees, under which we make the repertory available on a basis agreed to by the U.S. Government and the society.

One of the provisions of that decree of 1950 is that any user who is dissatisfied with the rate quoted by ASCAP may, at the election of the user, go to the Federal court and have the reasonableness of the rate determined and have the court fix a reasonable rate.

Senator BURDICK. I am trying to get the legal basis. I cannot go to court on any other commercial transaction to say it is unreasonable or reasonable.

What is the basis of getting jurisdiction? Mr. FINKELSTEIN. Of course, copyright gives the exclusive right, but when you combine copyrights, you become subject to another law, the antitrust laws. And the courts, under the antitrust laws, may require that the copyright owners agree that their rate shall be fixed by the court in the event of disagreement.

In the case of music, collective action makes it possible to avoid all these difficulties that you have had with the other industries; but in doing that, you collide with the antitrust laws and must make some arrangement where the public can be sure that the prices quoted by this combination are reasonable.

Senator BURDICK. In other words, then, there is no question in your mind that there could be court review?

Mr. FINKELSTEIN. None whatsoever.

Mr. CIANCIMINO. Senator, I would like to make one thing clear. Mr. Finkelstein did say that we are each subject to consent decrees. However, SESAC is not subject to a consent decree. We are a small operation, and in lieu of the Federal court's availability, we have offered arbitration to the cable television operators in order to set a reasonable fee.

Senator BURDICK. Well, eventually if everything else fails, there is access to the courts even in your cases.

Mr. CIANCIMINO. I suppose there would be if an action were brought and the court does determine that we should come under the same type of supervision as ASCAP.

Senator BURDICK. That is all.
Senator McCLELLAN. Thank you very much.
[The statements referred to earlier follow:7

STATEMENT OF AMERICAN SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS

(ASCAP), BROADCAST Music, INC. (BMI), AND SESAC, INC. (SESAC) BEFORE THE SUBCOMMITTEE ON PATENTS, TRADEMARKS, AND COPYRIGHTS, SENATE JUDICIARY COMMITTEE ON S. 1361

(August 1, 1973) Mr. Chairman, in accordance with the Committee's request, this statement is being submitted jointly on behalf of the three American organizations which make it possible for all users of musical works, including operators of cable television systems (CATV) to obtain licenses to perform publicly in nondramatic form, any musical composition required in their operations. These organizationsthe American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC, Inc. are well known to the Chairman and members of this Committee. Each is filing a separate statement, but all three join in this statement, following the suggestion of Counsel for this Committee, who has been most cooperative.

We shall briefly summarize the reasons supporting our position that there is no need for a statutory license for the music embodied in these three repertories because there is already adequate assurance of the availability of all music they require at fair and nondiscriminatory prices; and that if any price control is necessary it should be determined by an impartial body--the courts or arbitration. As our respective supporting statements indicate:

1. Music performed in nondramatic form is unique among copyrighted works in that it is all available to everyone including CATV on a nonexclusive basis without any problems of clearance or complicated negotiations for individual works, or fears of prices being arbitrary, unreasonable or discriminatory.

2. Music has been available to all users through this simple method of licensing for decades.

3. The assurance that prices will be fair, reasonable and nondiscriminatory is a matter of public record. In the case of ASCAP, it is embodied in a decree of the Federal Court entered in 1950 on the consent of the United States Government and ASCAP. The Federal Court is available to any user who questions the reasonableness of rates quoted by ASCAP (including CATV). Several proceedings to determine reasonable rates have been brought by broadcasters, wired music operators and others. In fact proceedings to determine reasonable rates brought by tne national broadcasting networks and by Muzak operators and others are pending at this time.

BMI and SESAC, Inc. have tendered arbitration to the CATV representatives and will continue to do so.

4. The distance of the station from which music is picked up does not raise any problems. Under the prevailing licensing system, all music is equally available to CATV whether it comes from distant sources, from local sources, or even when it is originated by the cable system itself.

5. The task of keeping records of uses and seeing that payments are apportioned among those whose works are used is undertaken by the licensing organizations; it does not present a problem to the CATV operator.

6. The music licensing organizations have met with representatives of the cable television industry and have not had any problem as to the method of licensing and the availability of all music used in nondramatic form to all CATV operators for all purposes. Figures requested by CATV to assist in reaching agreement as to rates for all their music were given to CATV by these organizations several months ago. There is every reason to believe that agreement can be reached with the (ATV industry as it has been with other industries, considering all the safeguards available to CATV.

In conclusion, we urge that there is no necessity for a compulsory license for musical works if those works are available on the following basis :

(1) The works are part of a total repertory made available to cable television under a single agreement without the requirement of separate negotiations for individual works or individual uses ;

(2) The works are available on a nonexclusive basis on fair and nondiscriminatory terms;

(3) The agreement makes the works available for a substantial period of time;

(4) In the event of dispute as to the reasonableness of the rates quoted, the rates can be determined by resort to a United States District Court or to arbitration.

(5) Provision is made for payment to the licensor for distribution to the parties entitled to the amounts collected so as to avoid any disputes between the licensee and individual copyright owners.

As we have previously indicated, Section 111 could be framed so as to exempt musical works from a compulsory license if they are voluntarily made available on the foregoing basis; or it could specitically require that all musical works be licensed to CATV for retransmission on the foregoing basis. If a work does not meet these requirements, it could, of course, be made subject to a compulsory license on the same basis as other material.

In sum, the music licensing organizations have tendered licenses that meet all problems of the CATV industry. These problems have been solved by a system that insures a maximum of availability and a minimum of accounting and negotiation. Equal treatment of all is assured without preference to anyone. The only item for discussion is price, and if that cannot be agreed on there is an impartial outside body-a court or arbitration-available to insure reasonableness.

It is respectfully submitted that when copyright owners make their works available to all users on a basis that insures reasonableness, there is no need for a statutory licensing system-a regulatory device that should be resorted to only when voluntary action fails to meet a public need. Respectfully submitted.

SESAC, Inc.,
ALBERT F. CIANCIMISO,

General Counsel.
BROADCAST MUSIC, INC.,
EDWARD M. CRAMER,

President.
AMERICAN SOCIETY OF COMPOSERS,

AUTHORS AND PUBLISHERS,
HERMAN FINKELSTEIN,

General Counsel.

AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,

New York, N.Y., July 26, 1973. Hon. John L. MCCLELLAN, Chairman, Subcommittee on Patents, Trade-Marks, and Copyrights, Committee

on the Judiciary, Washington, D.C. DEAR MR. CHAIRMAN: As suggested by your Committee, a joint statement is being made on behalf of all three music licensing organizations—the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. and SESAC, Inc. with respect to the method of licensing music to cable television.

ASCAP has already furnished this Committee with a statement of its position in a letter dated January 14, 1972 (replying to a letter from Mr. Thomas C. Brennan, Counsel for the Committee) and in an accompanying statement. (Copies of that letter and statement are annexed and we respectfully request that they be made a part of the record of this hearing. What we said there with respect to S. 614 is of equal application to S. 1361.

The members of the American Society of Composers, Authors and Publishers appreciate the opportunity to present their views on cable television to this Committee. Sincerely,

HERMAN FINKELSTEIN,

General Counsel. Enclosures.

AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,

New York, N.Y., January 14, 1972. THOMAS C. BRENNAN, Esq. Chief Counsel, Senate Subcommittee on Patents, Trade-Marks, and Copyrights,

Washington, D.C. DEAR MR. BRENNAN: I am pleased to enclose the comments of the American Society of Composers, Authors and Publishers concerning the content of a modified Section 111 of S. 644 which you invited by your letter of December 15, 1971. We appreciate particularly having this opportunity to explain why music re

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