(A) A statement of account, covering the three months next preceding, spec ifying the number of channels on which the cable system made secondary transmissions to its subscribers, the names and locations of all primary transmitters whose transmissions were further transmitted by the cable system and the gross amount irrespective of source received by the cable system.

(B) A total royalty fee for the period based upon a schedule or schedules to be determined as follows:

(i) Within sixty days after the enactment of this Act, the Register of Copyrights shall constitute a panel of the Copyright Royalty Tribunal in accordance with Section 803 for the purpose of fixing a schedule or schedules of just and reasonable compulsory license fees.

(ii) The schedule or schedules of compulsory license fees shall be determined by the Tribunal in a like manner as if the Tribunal were convened to make a determination concerning an adjustment of copyright royalty rates, provided, however, that Sections 806 and 807 shall not apply and that the determination of the Tribunal shall be effective at the end of the twelfth month after the enactment of this Act or on the date the Tribunal renders its decision, whichever occurs sooner.

(iii) The Tribunal, immediately upon making a determination, shall transmit its decision, together with the reasons therefor, to the Register of Copyrights who shall give notice of such decision by publication in the Federal Register within fifteen days from receipt thereof. Thereafter, the determination of the Tribunal may be subject to judicial review in a like manner as provided in Section 809 but no other official or court of the United States shall have power or jurisdiction to otherwise review the Tribunal's determination.

(iv) Notwithstanding any of the provisions of the antitrust laws (as designated in § 1 of the Act of October 15, 1914, c. 323, 38 Stat. 730, Tit. 15 U.S.C. § 12; and any amendment of any such laws) owners of copyrights in different works and owners of cable systems may among themselves or jointly with each other agree on, or submit to the Copyright Tribunal for its consideration, one or more proposed schedules of compulsory license royalty fees, and proposed categories of secondary transmissions and cable systems for inclusion in any of the schedules to be established or adjusted by the Tribunal pursuant to this subsection and Section 802.

(C) The preceding subclause (B) of clause (2) of this subsection (d), shall not apply to cable systems that before March 31, 1972, were operating in accordance with the rules and regulations of the Federal Communications Commission, served less than 3,500 subscribers, and were not, directly or indirectly, by stock ownership or otherwise, under common ownership or control with any other cable systems serving in the aggregate more than 3,500 subscribers, provided that this exemption shall continue to apply as long as the cable system continues to serve not more than 3,500 subscribers and is not directly or indirectly, by stock ownership or otherwise, under common ownership or control with any other cable systems serving in the aggregate more than 3,500 subscribers, and provided further, that such cable system files annually at the Copyright Office in accordance with requirements that the Register of Copyrights shall prescribe by regulation, a statement setting forth the names and addresses of other cable systems directly or indirectly in control of, controlled by, or under common control with the cable system filing the statement, the number of subscribers served by each of such other cable systems; and the names and addresses of any person or persons who directly or indirectly own or control the cable system filing the statement and directly or indirectly own or control any other cable system or systems, and the names and addresses of the cable systems so owned or controlled. For the purposes of this subclause (C) of clause (2) of subsection (d), "subscriber" shall mean a household or business establishment, or, if a hotel, apartment house or similar establishment, it shall mean a lodging or dwelling unit within such establishment containing a television receiving set.

(3) The royalty fees deposited under clause (2) shall be subject to the following procedures:

(A) During the month of July in each year, every person claiming to be entitled to compulsory license fees for secondary transmissions made during the preceding twelve-month period shall file a claim with the Register of Copyrights, in accordance with requirements that the Register shall prescribe by regulation. Notwithstanding any provisions of the antitrust laws

(as designated in § 1 of the act of October 15, 1914, 38 Stat. 730, Tit. 15 U.S.C. § 12, and any amendments of any such laws), for purposes of this clause any claimants may agree among themselves as to the proportionate division of compulsory licensing fees among them, may lump their claims together and file them jointly or as a single claim, or may designate a common agent to receive payment on their behalf.

(B) After the first day of August of each year, the Register of Copyrights shall determine whether there exists a controversy concerning the statement of account or the distribution of royalty fees deposited under clause (2). If he determines that no such controversy exists, he shall, after deducting his reasonable administrative cost under this section, distribute such fees to the copyright owners entitled, or to their designated agents. If he finds the existence of a controversy he shall certify to that fact and proceed to constitute a panel of the Copyright Royalty Tribunal in accordance with section 803. In such cases the reasonable administrative costs of the Register under this section shall be deducted prior to distribution of the royalty fee by the tribunal.

(C) During the pendency of any proceeding under this subsection, the Register of Copyrights or the Copyright Royalty Tribunal shall withhold from distribution an amount sufficient to satisfy all claims with respect to which a controversy exists, but shall have discretion to proceed to distribute any amounts that are not in controversy.

(e) Relation to other laws and regulations.-Nothing in this section shall be construed as limiting or preempting the authority of the Federal Communications Commission to regulate the operations of broadcast stations or cable systems pursuant to any other Act of Congress: Provided that, the Federal Communications Commission shall not limit the area, duration or other scope of the exclusivity a television broadcast station may acquire respecting secondary transmissions by cable systems that are not subject to the compulsory license provided for in subsection (c) of this Section 111 beyond any limits that may be applicable to the area, duration or other scope of the exclusivity a television broadcast station may acquire respecting other television broadcast stations.

(f) Definitions.-As used in this section, the following terms and their variant forms mean the following:

(1) A “primary transmission" is a transmission made to the public by the transmitting facility whose signals are being received and further transmitted by the secondary transmission service, regardless of where or when the performance or display was first transmitted.

(2) A "secondary transmission" is the further transmitting of a primary transmission simultaneously with the primary transmission without change in program or other message content.

(3) A "cable system" is a facility that in whole or in part receives signals transmitted by one or more television broadcast stations licensed by the Federal Communications Commission and makes secondary transmissions of such signals by wires, cables, or other communications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under Subsection (d) (2) (B), two or more cable systems in contiguous communities under common ownership or control or operating from one headend shall be considered as one system.

(4) The "local service area of a primary transmitter" as used in this section comprises the area in which a television broadcast station is entitled to insist upon its signal being retransmitted by a cable system pursuant to the rules and regulations of the Federal Communications Commission as published in Volume 37, Federal Register, page 3252, et seq., on February 12, 1972, or such similar rules as the Federal Communications Commission may from time to time lawfully adopt in the future in light of changed circumstances.

(5) The terms "full network station," "partial network station," "independent commercial station," and "non-commercial educational station" as used in subpart D of the rules and regulations of the Federal Communications Commission as published in Volume 37, Federal Register, page 3252, et seq., on February 12, 1972, shall be defined in accordance with the rules and regulations of the Commission of the same date with such additional elaboration as the Commission may from time to time provide consistent with the intent of this Act.

(g) This section shall be effective upon the enactment of this Act.

[Add the following to section 501]

20-344-73-39

(c) For any secondary transmission by a cable system that embodies a performance or a display of a work which is actionable as an act of infringement under subsection (c) of section 111, a television broadcast station holding a copy right or other license to transmit or perform the same version of that work shall, for purposes of subsection (b) of this section 501 be treated as a legal or beneficial owner if such secondary transmission occurs within the local service area of that television broadcast station.

Mr. STEPHEN G. HAASER,

THE MARINE BIOMEDICAL INSTITUTE,
Galveston, Tex., August 7, 1973.

Senate Subcommittee on Patents, Trademarks and Copyrights, Committee on the Judiciary, Dirksen Building, Washington, D.C.

Sir: I am Dr. Stewart G. Wolf, Professor of Medicine and Physiology, Uni versity of Texas Medical Branch, and Director, Marine Biomedical Institute. 200 University Boulevard, Galveston, Texas; former President of the American Gastroenterological Association; American Federation for Clinical Research; American Psychosomatic Society; American Pavlovian Society; American Col lege of Clinical Pharmacology and Chemotherapy. I am a member of twenty nine scientific societies, most of which societies sponsor medical serials. I am currently on the Editorial Board of the Journal of Psychosomatic Research, Psychiatry in Medicine, Research Communications in Chemical Pathology and Pharmacology, International Journal of Psychobiology, Rendiconti, and the Publications Center of the Journal of Laboratory and Clinical Medicine.

I appreciate this opportunity to present my view of the copyright bill S. 1361, and request that this statement be made part of the official record.

As the author of some 260 publications that have appeared in periodical medical journals and author or coauthor of twelve books, I would like to comment on the wording of the proposed copyright bill, especially Section 108, from the viewpoint of the author and user. Medical authors of articles that appear in the periodical literature not only receive no financial compensation for their work, but in most instances must pay page charges to the publisher for their work to appear. Thus the author's reward is not financial but is in direct proportion to the extent of his readership, both in numbers and geographic distribution. It is, therefore, to his advantage as well as the advantage of the user to have interlibrary requests for photocopies promptly and expeditiously filled. The normal medical user employs the photocopy in the pursuit of his own work and applies it to no commercial purpose. In short, the author of medical periodical articles derives no financial protection from the Copyright Law but, like the user and often, as a user himself, benefits from a rapid and expeditious distribution of his written word.

I have read the substitute wording for Section 108 (1) suggested by the American Library Association and feel that it is an equitable compromise of the various potentially conflicting interests. It reads as follows:

"The library or archives shall be entitled, without further investigation, to supply a copy of no more than one article or other contribution to a copyrighted collection or periodical issue, or to supply a copy or phonorecord of a similarly small part of any other copyrighted work."

I appreciate the opportunity to provide testimony before your Committee.
Sincerely,

Mr. THOMAS C. BRENNAN,

STEWART WOLF, M.D..

Professor and Director.

MEDICAL LIBRARY ASSOCIATION, INC.,
Birmingham, Ala., August 3, 1973.

Chief Counsel, Subcommittee on Patents, Trade Marks and Copyrights, Committee on the Judiciary, U.S. Senate, Russell Senate Office Building, Washington, D.C.

DEAR MR. BRENNAN: The Medical Library Association is made up of libraries and librarians located in all types of health service facilities. As President of

this Association, it has come to my attention that in the congressional hearing on July 31 of the Subcommittee on Patents, Trade-Marks, and Copyright on S. 1361 the publishers' testimony emphasized that numbers of journal subscriptions were cancelled due to Xerox copying. May I, as the director of a medical center library, assure you that cutback on subscriptions is not due to this alone; the subscriptions dropped from this library's list have had nothing to do with Xeroxing. Our reasons are monetary. The line item of the Books and Journals budget was spent in five months this year due to the increase in cost of journal subscriptions. This increase was not an addition of new titles but a rise in the price of the 2,100 journal titles currently being purchased. May I point out that other price increases have been continuing through the year. For example, a notice was received recently of a 26+% price rise in Chemical Abstracts.

The second copy titles are being dropped to relieve some strain; our duplicate journals with other libraries on the same campus are being dropped for the same reason and a number of foreign language periodicals are having to be cancelled only because we feel it is imperative to continue to buy our most heavily used English language journals.

There is little hope that the Books and Journals budget for the new fiscal year can take care of the increases in journal prices.

This situation is being faced by medical librarians throughout the United States. Consideration by the Subcommittee of this reason for cancellation of subscriptions will be appreciated.

Sincerely,

(Mrs.) SARAH C. BROWN,

President.

SUPPLEMENTAL STATEMENT OF THE MEDICAL LIBRARY ASSOCIATION

This supplement to the statement of the Medical Library Association on July 31, 1973 on the library photocopy issue in S. 1361 is submitted in order to clarify what may appear to be a contradiction of Section 108 (d) (1) and 108(d) (2) in the amendment proposed by the Association of Research Libraries and the American Library Association, and endorsed by the Medical Library Association. The difference in the proposed limitations reflects a difference in the quantity of the copyrighted matter to be used. In sub (1) the right to make a single photocopy of a periodical article without prior investigation is proposed because the portion to be copied is so small that the effort of the search for an unused issue of the journal would be out of proportion to the extent of the article and the delay incompatable with the user's time schedule. On the other hand, sub (2) applies to a copy of an entire work or a large portion of one, and is deemed reasonable, because the need is usually less urgent, whether the copy is required by a reader for his personal use or by the library to fill a gap in its collection. Thus the time frame is usually sufficient to accommodate a search for an unused copy and the costs are comparable.

The proposal of these two different limitations reflects the librarians' desire to fulfill their obligation to satisfy the users', and at the same time to keep their work in manageable proportions.

SUPPLEMENTAL STATEMENT OF JACK VALENTI, PRESIDENT OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC. AND OF THE ASSOCIATION OF MOTION PICTURE AND TELEVISION PRODUCERS, INC., AUGUST 10, 1973

We appreciate the opportunity to submit this supplemental statement to the Committee and to comment in behalf of the Motion Picture Association of America, Inc. ("MAPA"), the Association of Motion Picture and Television Producers, Inc. ("AMPTP") and the Committee of Copyright Owners (“CCO”), on some of the views which have been expressed by other witnesses at the hearing of August 1, 1973. More specifically, we shall address ourselves to the following points:

1. NCTA has repudiated the Consensus Agreement while seeking to retain its benefits.

2. NCTA has failed to demonstrate any rational basis for rejecting arbitration of the fee question.

3. Cable systems can easily afford to pay just and reasonable royalties without raising fees to subscribers. CCO has never suggested that subscribers fees should be raised in order to pay copyright royalties.

4. CATV revenues are based on the use of copyrighted programs and CATV should pay its fair share for their use. Copyright owners will not receive double royalties from payment of copyright fees.

5. Several of the changes proposed by NCTA for the text to Section 111 of S. 1361 are unwarranted, especially those dealing with the definition of cable systems and with the exemption from copyright liability of CATV's retransmission of scrambled signals such as those used for closed circuit broadcasts and pay-TV.

Attached to this supplemental statement as an Appendix "A" is a memorandum prepared by Dr. Robert W. Crandall, Associate Professor of Economics at the Massachusetts Institute of Technology and by Mr. Lionel L. Fray of Temple, Barker & Sloane, Inc., management and economic counsel. These two gentlemen are the authors of the study commissioned by CCO entitled "The Profitability of Cable Television Systems and Effects of Copyright Fee Payment," which we submitted to the Subcommittee on August 1, 1973 as a special appendix to our statement. Professor Crandall and Mr. Fray were present at the hearing of August 1, 1973 and their memorandum (Appendix "A") addresses itself to the questions of an economic or statistical nature raised by the Chairman and comments on some of the views on economic matters expressed by witnesses at said hearing.

1. NCTA HAS REPUDIATED THE CONSENSUS AGREEMENT WHILE SEEKING TO RETAIN ITS BENEFITS

In his testimony on August 1, 1973, Mr. David Foster, President of the National Cable Television Association ("NCTA”), referred to the Consensus Agreement as the "so-called ‘OTP Compromise' ". Such attempt by means of terminology to give the impression of only limited governmental sponsorship and support for the Consensus Agreement, cannot, of course, erase or extenuate the embarrassment which NCTA experiences as the result of the repudiation of its solemnly given word and signature to that agreement. Indeed, it cannot be denied that the Consensus Agreement received the expressed approval not only of the Office of Telecommunications Policy (OTP) but also of the Federal Communications Communication (“FCC”) and of the Chairman of this Subcommittee. The history and sponsorship of the Consensus Agreement has been fully explained by FCC Chairman Dean Burch when he said in his concurring statement accompanying the Cable Television Report and Order:

I joined OTP . . . in an effort to secure a consensus among the industries that would lead to resolution of the cable/copyright issue, de-escalate the level of violence, and thus greatly serve the public interest.

"[The FCC] debated the details of the agreement. We debated the necessity of implementing it in its entirety. We debated its probable impact on the passage of cable/copyright legislation, and the critical importance of such legislation to cable's assured future.

"We went over every square inch of the ground-and then went over it again. And, in the end, we voted: a majority of the Commissioners explicitly decided that the public interest would be served by the Commission's implementation of the agreement."

Mr. Foster also overlooks the correspondence between Chairman Burch and Chairman McClellan which preceded the implementation of the Consensus Agreement by the FCC. In that correspondence Chairman Burch stated in his letter to Chairman McClellan dated January 26, 1972 that "a primary factor in [the FCC's] judgment as to the course of action that would best serve the public interest is the probability that Commission implementation of the Consensus Agreement will, in fact, facilitate the passage of cable copyright legislation." In his reply to said letter, Chairman McClellan wrote on January 31, 1972: "I commend the parties for the efforts they have made, and believe that the agreement that has ben reached is in the public interest and reflects a reasonable compromise of the positions of the various parties." Copies of the correspondence between Mr. Dean Burch and Senator McClellan were attached to our statement filed on August 1, 1973 as Appendix 2.

Mr. Foster asserts "that the Congress was not a party to this so-called compromise, nor to our knowledge was it consulted with, nor is it bound by the terms, in any way." Mr. Foster misses the point here. The question is not whether Congress is bound by the terms of the agreement—which of course it is not but rather whether NCTA has pledged its support of the agreement as part of a