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sion calling for compulsory arbitration in the event rates cannot be agreed upon. I would like to stress that the copyright holders place a great deal of emphasis upon compulsory arbitration as the only fair and equitable method of assuring rates acceptable to all of those involved.

Further, it should be pointed out that the copyright holders represent the creative elements responsible for producing works of artistic nature and of entertainment value which contribute significantly to cable television programming. The copyright holders are indeed the major program suppliers to this rapidlyexpanding medium.

In closing, Mr. Chairman, I would like to say that as a representative from California, I am deeply concerned with the future of cable television as a source of employment for a presently troubled industry, and as a source of creativity for the entire Nation.

Hon. JOHN MCCLELLAN,

CONGRESS OF THE UNITED STATES,

HOUSE OF REPRESENTATIVES, Washington, D.C., August 3, 1973.

Chairman, Subcommittee on Patents, Trademarks and Copyrights, Senate Judiciary Committee.

DEAR MR. CHAIRMAN: I am concerned about the possibly adverse effects of section 111 of Senate bill 1361 currently under your committee's review, which sets forth a cable television copyright fee schedule.

It is my understanding that in November, 1971 representatives of copyright holders, broadcasters and cable system operators reached a compromise agreement concerning signal carriage and copyright issues. This agreement was endorsed by the Federal Communications Commission and the Office of Telecommunications Policy. On the fee schedule, the parties agreed to settle their differences by compulsory arbitration in the absence of a mutually acceptable rate schedule.

As you know, both sides have failed to resolve this issue, and have presented conflicting economic studies to document their claims. I believe it would be hazardous for Congress to intervene in this matter at this time and impose an initial fee schedule which may be economically advantageous to only one side. Since the 1971 agreement already provides for legally binding arbitration to settle this dispute, I recommend that this approach be adopted in determining fair and reasonable copyright fees.

Sincerely yours,

EDWARD R. ROYBAL,
Member of Congress.

STATE LIBRARY OF PENNSYLVANIA
Harrisburg, Pa., August 19, 1973.

Hon. HUGH SCOTT,

U.S. Senate,

Senate Office Building,

Washington, D.C.

DEAR SENATOR SCOTT: I am informed that the Senate Sub Committee on Patents, Trademarks and Copyrights conducted hearings on Senate Bill No. 1361 on July 31, and that the hearing record will be closed on August 10.

I respectfully request that the attached statement be made a part of the hearing record, since the subject matter is of grave importance to Pennsylvania libraries, archives and the State Library.

Thanks very much for your often demonstrated interest and support for the programs and resources of American Libraries.

Sincerely,

ERNEST E. DOERSCHUK, Jr.,
State Librarian.

COMMENTS ON SENATE BILL 1361

Libraries of all types in Pennsylvania are meeting individual user needs by vigorous exchange of materials and by providing single-copy extracts of articles and other printed materials needed by researchers and students. Libraries have relied on the "fair use" concept to protect them against charges of copyright infringement.

While Senate Bill No. 1361 incorporates the "fair use" principle in Section 107 of the Bill, it does not specifically offer the library or archive immunity from prosecution for copyright infringement if it makes even one copy of copyrighted material in response to a request from another library or from an individual.

So that libraries may serve the needs of users to the fullest extent and with a minimum of delay, I urge:

(1) that a library or archive be specifically entitled to make no more than one copy of an article or portion of printed copyrighted material, or of a phonorecord, to assist in teaching, research, or in filling an interlibrary loan request from another library or archive;

(2) that a library or archive be entitled to make a copy of an entire copyrighted work if the library or archive has ascertained that the work can not be readily obtained from trade sources; and

(3) that a library or archive providing a copy of copyrighted material shall attach to the copy a warning that the material copied appears to be copyrighted. I believe that the above provisions can be incorporated in an amendment to Senate Bill No. 1361 as Section 108 (d) as recommended by the American Library Association, and I respectfully urge such amendment as a measure necessary to facilitate research and exchange of materials among libraries.

ERNEST E. DOERSCHUK, Jr., State Librarian of Pennsylvania.

CITY OF PHILADELPHIA,
FREE LIBRARY OF PHILADELPHIA,
Philadelphia, Pa., August 7, 1973.

Senator HUGH SCOTT,

Senator from Pennsylvania,

Russell Senate Office Building,

Washington, D.C.

DEAR HUGH: I am writing to you on behalf of the Board of Trustees and staff of the Free Library of Philadelphia concerning the current hearings of the Subcommittee on Patents, Trademarks, and Copyrights of the Senate Committee on the Judiciary.

Mr. Edmon Low testified before the Subcommittee on behalf of the American Library Association asking that the amendment to the copyright revision bill, S. 1361, include a definite statement that making a single copy to aid in teaching and research, and particularly in interlibrary loan, is permissible and not subject to possible suit for this activity in behalf of the public good. We wholeheartedly endorse this position and ask your support of this recommended revision. Without such a provision librarians in Pennsylvania and throughout the nation would be seriously restricted in their ability to offer quality reference service and in the general performance of their duty to patrons.

We would be appreciative if you would include this letter as a part of the committee's hearing record.

Sincerely yours,

WILLIAM W. BODINE, Jr.,

First Vice President, Board of Trustees.

SPANISH INTERNATIONAL NETWORK,
New York City, September 14, 1973.

Hon. JOHN L. MCCLELLAN, Chairman, Subcommittee on Patents, Trademarks and Copyrights, Committee on the Judiciary, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: On July 31 and August 1 of this year, the Senate Subcommittee on Patents, Trademarks and Copyrights held hearings on various aspects of S. 1361, a bill providing for the general revision of the Copyright Law (Title 17, United States Code). At the conclusion of those hearings you extended an invitation to other interested parties to submit written comments on the proposed legislation, Spanish International Network and Spanish International Communications Corporation, a company operating Spanish-language television broadcasting stations in several major U.S. communities, therefore takes this opportunity to present a statement of its position on an aspect of the proposed bill which is of great concern to Spanish International-the matter of copyright liability for secondary transmissions by cable television systems.

Our position in this regard is set forth in the attached Statement of Spanish International Communications Corporation, which we respectfully request be made a part of the record of the Hearings held earlier this summer. If desired by the Chariman, we would be pleased to testify before the Committee on this matter.

Respectfully,

REYNOLD V. ANSELMO,

President.

STATEMENT OF SPANISH INTERNATIONAL COMMUNICATIONS CORPORATION

I. INTRODUCTION

Spanish International Communications Corporation is the Federal Communications Commission licensee of television broadcast stations KMEX-TV, Channel 34, Los Angeles, California, KFTV, Channel 21, Hanford, California, KWEXTV, Channel 41, San Antonio, Texas, WLTV, Channel 23, Miami, Florida, and WXTV, Channel 41, Paterson, New Jersey. All of the Spanish International stations broadcast almost exclusively in the Spanish-language, serving some six to eight million Spanish-Americans (including Mexican-Americans, Puerto-Rican nationals and Cuban-Americans, among others) with quality news, public affairs and entertainment programming.

The continuation of such quality programming on our stations is now seriously theratened by recently adopted provisions of the Federal Communications Commission relative to secondary transmissions by cable television systems in the United States. It is this situation which prompts our submission which, as noted briefly above, deals principally with those provisions of the proposed legislation (S. 1361) which concern the copyright liability of cable television systems. A brief background discussion will serve to put our particular problem in proper perspective.

By letter to Congress dated August 5, 1971, the Federal Communications Commission set forth proposals for the future regulation of cable television systems. One such proposal was to permit the unrestricted importation, by U.S. cable operators, of foreign language television signals (in our particular case, television signals from Mexico). At the same time the Commission proposed to limit the cable carriage of distant English-language signals to what was termed "adequate television service" (see section 111(c)(3) of S. 13661). No such limitations were placed upon the cable carriage of foreign-language broadcast signals.

In a letter dated September 22, 1971, Spanish International requested the Commission to reconsider that part of its August 5 Letter of Intent which sought to permit the wholesale importation of Mexican broadcast signals. The letter took issue with the wisdom of such a policy and demonstrated that unrestricted importation of Mexican signals could well destroy Spanish-language broadcasting in the United States-a result, we urged, which could not possibly serve the public interest in an effective and viable local television service for the Spanish American population.

In our letter of September 22, 1971, we explained how this could occur. For example, we pointed out that Spanish International relies to a very large extent on programming which is carried by many, if not all, of the Mexican border stations, and that many of the best programs carried on the Mexican network, and distributed to border affiliates, are not made available to Spanish International until as much as a year or more from the date of first transmission in Mexico. In addition, we noted that while Spanish International is required to pay substantial duties, freight and taping charges to import quality Spanish-language programming, Mexican stations, and U.S. cable television systems importing their signals, are in a position to avoid these expenses. We concluded that all of these considerations added to a significant competitive disadvantage for U.S. Spanish-language broadcasters-who were now being asked to compete against Mexican as well as other U.S. stations, for an audience, which has been recognized by the Commission to be "limited in number".

Although it then appeared that the Commission's proposed cable regulations would tend to restrict importation of Mexican Spanish-language signals into markets where there is a local Spanish-language station, by counting such imported signals against the cable system's "quota", the current rules do not appear to have been interpreted by the Commission to give domestic stations such protection. In addition, in those markets with no local Spanish-language sta

tion, distant U.S. Spanish-language stations can be "overlooked" by cable systems in favor of Mexican stations-no such "leap-frogging" policy is now permitted for English-language stations. As noted earlier, this cannot serve the public interest in an effective and viable local television service for the SpanishAmerican population in this country.

We thus concluded that while importation of foreign signals may, in some few instances, be appropriate, it should not be allowed where the viability of U.S. Spanish-language television is jeopardized, or where U.S. stations offering similar program fare-e.g. foreign language-are available off-the-air or via microwave. And, we urged the Commission to adopt such a prohibition. In essence, we asked that where cable systems have the choice of carrying U.S. or Mexican foreign language stations, they be prohibited from importing Mexican stations.

Illustrating our point: many cable systems in Southern California receive both Mexican and Los Angeles signals off-the-air-including, for example, Spanish International's KMEX-TV-yet, many carry the Mexican station to the exclusion of KMEX-TV. There are also numerous cable systems in the fourstate southwestern border area carrying Mexican stations via microwave where U.S. Spanish-language signals are also available. In each of these cases, however, the cable system is not carrying the U.S. Spanish-language station even though English language signals from the same market (Los Angeles, for example) are being carried on the cable system. This situation has proliferated under the Commission's cable rules.

Although recognizing that "foreign language stations fulfill an important need for what generally is an audience limited in number," the Commission, nevertheless, ignored the merits of Spanish International's arguments. In a footnote to its Cable Report the Commission stated:

50 Following our August letter to Congress, the licensees or permittees of Spanish-language stations in Los Angeles and Hanford, California, San Antonio, Texas and Miami, Florida, wrote to the Commission requesting that importation from Mexico of Spanish language stations not be allowed where U.S. Spanish language programming is available either off the air or potentially available via microwave. We recognize the arguments in favor of supporting domestic stations. However, above all, we are attempting to encourage carriage of foreign language stations. Therefore, absent the unusual situation, we do not think any additional burden should be imposed on the cable systems involved." (36 F.C.C.2d 143 at 180; emphasis supplied)

At that time we found it difficult to understand, if the Commission indeed does "recognize the arguments in favor of supporting domestic stations", how it could ignore these arguments solely because an “additional burden" of unspecified magnitude would be imposed on cable television systems. We still find the Commission's determinations to be somewhat perplexing and irrational.

On March 13, 1972, Spanish International filed a Petition for Reconsideration of the Commission's Decision, noting its earlier arguments in this matter-principally, that a significant burden is being imposed upon domestic UHF Spanish language stations as a result of the Commission's Mexican importation policy, and that this policy fosters a grossly unfair competitive situation-and, in addition, pointing out that other domestic [i.e., U.S.] Spanish language businesses would be similarly "burdened" by the Commission's importation policy. In response the Commission stated, referring to our Request for Reconsideration: "As we noted in the Cable Television Report and Order at footnote 50, petitioner requested following the issuance of our letter of intent, that importation from Mexico of Spanish-language stations not be allowed where U.S. Spanishlanguage programing is available either off the air or potentially available via microwave. The petition for reconsideration restates that request. But we considered the request in finalizing the rules and see no reason to alter our view. We are attempting to encourage the carriage of foreign language programing. Where there is a local Spanish-language station, it will of course get carriage priority. But outside its own market, where there is no "right" of carriage and no special need for protection against other stations programed in the same language, it is in the public interest to make foreign language programing available without impediment. In unusual situations where a domestic Spanish-language station makes a compelling demonstration for relief with respect to a particular application, we can afford such relief under § 76.7. This should serve to maintain the vitality of local foreign language services without general restrictions on the right of cable systems to distribute the programing of foreign stations." (empha

sis supplied; Reconsideration of Cable Television Report and Order, paragraph 23; 36 F.C.C. 2d 326.)

The Commission, however, was far from being in complete accord on the matter of its Mexican importation policies. We would note particularly the dissent of Commissioner Robert E. Lee:

"The majority treats the U.S. foreign language stations most shabbily. These are struggling UHF stations, some losing money, some barely making it. The majority lets CATVS import Mexican foreign language stations into the U.S. without restriction-even though the Mexican fare is the same as appears on the U.S. stations, only a year more recent. The majority says that the local UHF foreign language can object. Why should the burden be on the UHF to undertake relatively expensive proceedings? And what about the community where there will now never be a local foreign language station because a CATV imports Mexican stations?

"Further, these U.S. stations get no anti-leapfrogging benefits. A CATV can be located 100 miles away from the U.S. foreign language station and yet can go 600 miles to Mexico if it wants to do so. How does the majority square this with its desire to help UHF, with its insistence that an ordinary UHF independent could not be bypassed if located within 200 miles (in the case of the third independent)?" (Emphasis supplied.)

Commissioner Reid expressed similar concerns:

"Another problem which was brought to the attention of the Commission by Petitions for Reconsideration was the problem of importing a foreign station for foreign language programs under the provisions of Section 76.58 (4) (b); 76.59 (2) (d); 76.61 (2) (e). . . .

"... I believe we should have permitted cable systems to carry only those foreign stations whose signals were available off the air, and prohibit the importation of such signals by microwave, from a foreign station. This is especially true when non-English broadcast stations are readily available to the cable system. . ., especially so when they are Domestic Stations and it seems reasonable to me to protect them.

"... We attempt to answer this problem by saying that-'In unusual situations where a domestic Spanish-language station makes a compelling demonstration for relief with respect to a particular application we can afford such relief under Section 76.7.'

"While I recognize that they probably will file for special relief, and I would hope we would welcome it and grant favorable relief. I firmly believe that a general policy would have been more beneficial." (emphasis supplied; Concurring Statement of Commissioner Charlotte T. Reid, page 4).

Since the Commission's new cable rules became effective about a dozen additional cable system operators have proposed to import Mexican signals into some 25 different U.S. communities-some of which already have a local Spanish language station.

In these latter situations especially, a particularly onerous burden upon our stations is fostered by the Commission's cable rules. For example, Spanish International's KMEX-TV (Los Angeles) obtains significant quantities of its Spanish language programming from Spanish International Network Sales, which is the United States representative of V. T. Latin Programs, Mexico, whose associated company also supplies programming to XEWT-TV, Tijuana. Thus, both stations receive major amounts of programming from the same source and thus carry essentially similar program schedules. For example, XEWT-TV and KMEX-TV are both carrying the following Spanish-language programs during their current broadcast week:

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