The question is: Should the Copyright Act extend into the homes of American citizens who desire to tape programs for reviewing at another time? Or should the American consumer be exempt from this extension of the Copyright Act into the home?

I believe that S. 1758 captures not only the original intent of Congress but certainly reflects its current feeling. I will do everything I possibly can to insure that the full Senate has this issue brought before it in a most timely fashion.

Before closing my statement and welcoming our distinguished witnesses, I would again reiterate my thanks to the chairman of this committee, Senator Thurmond, for his efforts in support of this legislation and the hearings today. Also, Senator D'Amato will speak for himself, but I would simply like to thank him and his staff, with whom we have worked and cooperated from the outset in what I believe is a wholly cooperative, bipartisan effort to resolve a delicate and difficult issue.

Senator Denton.

STATEMENT OF HON. JEREMIAH DENTON, A U.S. SENATOR FROM THE STATE OF ALABAMA

Senator DENTON. Thank you, Mr. Chairman.

Allow me first to congratulate both you and the coauthor of the bill. I applaud the quick response to this knotty problem and your equally prompt scheduling of hearings on this important copyright issue. I believe that this committee hearing should be welcomed by the electronics and entertainment industries as well as by the American consumer.

For all its gravity, the so-called Betamax case does have a lighter side. In the last several weeks I have been treated to a number of cartoons dealing with this question, including one of a bewildered family being bundled into a paddy wagon as one bath-robed elderly lady, a neighbor, whispers to another, "I understand they were watching a home-recorded videotape." I have had a few cartoons made of bills that I have introduced, so there is nothing novel there.

The court's ruling in the Universal v. Sony case was unprecedented, and many believe that it represents one more instance in which technology has outpaced our laws. The 1976 revision of the Copyright Act was an attempt to update that body of law in every imaginable way.

This hearing is perhaps attributed to the ingeniousness of man, in that we are faced once again with a controversy over the impact of a sophisticated and readily available technology on newly codified copyright laws.

I believe the Congress of the United States is an appropriate forum in which to resolve the differences between the competing interests represented in the Sony case. As we proceed, I know that this committee will seek to protect the rights of both the producers and consumers of entertainment and video equipment.

I shall follow with interest the testimony of all those invited today and wish once again to acknowledge your leadership, Mr. Chairman.

I have noted the presence of an outstanding Alabamian on the list of those about to testify and like our distinguished colleague, Senator D'Amato, would ask the chairman that I be afforded the pleasure of introducing Mr. Julius Kretzer at the appropriate point in today's proceedings.

Senator DECONCINI. Thank you, Senator Denton.

At this time we will hear from Senator D'Amato of New York. Senator D'Amato, we welcome you and thank you for your cooperation and assistance in this matter. Please proceed.

STATEMENT OF HON. ALFONSE D'AMATO, A U.S. SENATOR FROM THE STATE OF NEW YORK

Senator D'AMATO. Thank you very much, Mr. Chairman and Senator Denton.

I am especially pleased to have this opportunity to address the hearing today on S. 1758, a bill which would exempt the private, noncommercial recording of copyrighted works on video recorders from copyright infringement. I think that is important. We are talking about a bill that exempts the private, noncommercial recording of copyrighted works on video recorders from copyright infringement.

My interest in this matter arose when I read of the opinion handed down by the U.S. Court of Appeals for the Ninth Circuit. Under the ninth circuit's opinion, over 3 million owners of video recorders would be liable for damages if they used their equipment to record from their televisions.

To me it seems most unjust that people in the privacy of their own homes should be unable to use their equipment in a private, noncommercial manner. So, I was especially delighted and pleased to be able to work with Senator DeConcini and his staff. I want to pay public tribute to the chairman and his staff for coming up with a proposal that I think treats this matter fairly, deliberately, and, yes, expeditiously, because time is of the essence. Owners and users of videotape recorders should be afforded certainly the same rights enjoyed by audio enthusiasts.

Since the inception of audio technology people have been recording from the radio without penalty, and the consumer and the industry have jointly benefited from the ability to record from commercial programing for private home listening. This same relationship, until recently, has existed between the consumer and the video recording industry.

Furthermore, the benefits of home video recording extend to numerous industries involved. The television industry significantly benefits from the wider viewing audience generated by delayed viewing, which in turn greatly increases the impact of television advertising.

The Ninth U.S. Court of Appeals said in its opinion that it is the prerogative of Congress to provide exemptions in the area of copyright law, and it is clear that the technological advances in the videotape recording field have created an inequitable situation under current copyright law, especially as that was interpreted by the recent decision.

Congress has not examined this area of law since 1976. S. 1758, which Senator DeConcini and I have introduced, would address this situation. Our bill would update the copyright law to reflect recent technological advances. It is in no way infringement upon the powers of the judiciary.

I would hope, Mr. Chairman, that as a result of this committee hearing and the testimony that will be presented to the committee, we would be able to go forth with a bill that could be acted upon expeditiously in the Senate.

Senator DECONCINI. Thank you, Senator D'Amato. We welcome you in this committee to join us up here to listen to the testimony and participate.

We are very pleased to have Representative Stan Parris, who has introduced similar legislation in the House of Representatives. Representative Parris, please proceed.

STATEMENT OF HON. STAN PARRIS, A U.S. REPRESENTATIVE FROM THE STATE OF VIRGINIA

Mr. PARRIS. Thank you, Mr. Chairman and Senator Denton. I appreciate the opportunity to testify today, and I would submit my complete statement for the record, with your permission.

Senator DECONCINI. Without objection, it will be included in the record.

Mr. PARRIS. I will simply summarize briefly the points that we try to make in that statement.

The Ninth Circuit Court of Appeals decision that we address today, in my opinion, was just the latest example of idiocy by the Federal judiciary and is a decision that is another unwarranted intrusion by the Federal courts into the privacy of American homes and is an extension of the intent of Congress that was never intended. It means that 9 to 12 million Americans who view their 3 million video recorders are violating the law if they record television programs without first obtaining the permission of the programs' producers, which is clearly impossible.

Therefore, on October 21, I introduced legislation in the House of Representatives, H.R. 4808, which is identical to the bill that you address today, S. 1758, to correct the inequity by allowing the continued sale and use of videotape recorders for noncommercial purposes.

As of this morning in the House of Representatives, my legislation has attracted 25 cosponsors, and I am sure that there will be considerably more support as the public and the Members of Congress return from the Thanksgiving break and become aware of the dilemma caused by this decision. This is an issue, as I see it, which is totally nonpartisan and has captured the interest of Members of the Congress from all regions of the country.

If the ninth circuit's decision is allowed to prevail, we will be jeopardizing a prosperous and growing industry with a very bright future. By the end of this year, I am told that there will be over 3 million video recorders in American homes with an additional sale of 2 million estimated for 1982. There are 35,000 education and entertainment oriented prerecorded cassettes to choose from today on the market, including 4,000 movies, all of which have copyright

royalties paid on them already. The total blank and prerecorded tape sales this year will exceed 25 million and for next year, 1982, it is estimated to be 35 million units.

When Congress last amended the Copyright Act in 1976, as Senator D'Amato referred to in a comprehensive way, video recorders were still in their infancy. The technology has been developed, and they have increased obviously in popularity, but the Congress has simply failed to keep up with those changes.

If we do not amend the Copyright Act now, the makers, the distributors, and the sellers of VCR's would be liable for damages, and VCR owners who tape programs in their homes would be guilty of copyright infringement. By enacting this legislation, Congress would be protecting the VCR owners from any infringement of the Copyright Act if they do not use their recorders for noncommercial purposes. I think that is the key to this legislation.

This legislation is very simple. There is nothing complex about it. It is consumer legislation. If we do not act, this controversy may be in fact tied up in the courts for years, and I submit respectfully to the committee that to combine the issues of royalties and entertainment talent rights with the issue of utilizing individually preowned, prepurchased equipment just unnecessarily confuses the entire matter. The questions are totally separable, and I think it would simply be inappropriate to combine and thereby confuse the entire problem.

The principal use of this equipment by everyday Americans is in so-called time shifting, and although some of us would like to have the ability to do so occasionally, there is no technology of which I am aware that will exercise the commercials from the beginning to the end of what you tape. So you get it just like it comes to you in the first instance. The only difference is that you get it when you are able to watch it. It does not seem to me that that is a very complicated problem.

A matter of convenience for individual Americans who have made a significant investment for their own enjoyment is what we are addressing today, and I think very frankly, as I have indicated before, that we are jeopardizing a prosperous industry, and I certainly hope that it will be the pleasure of the committee and the full Senate to report the bill and send it to the House at an early date.

I thank you very much for the opportunity to be with you.

Senator DECONCINI. Thank you, Congressman. We are very pleased to have you. If you care to join us here before you return to the House, please feel free to make yourself at home. We are glad to have you here.

Mr. PARRIS. Thank you very much.

Senator DECONCINI. Before we begin with the first witness I wish to place the text of S. 1758 in the record.

[Prepared statement and S. 1758 follow:]

STATEMENT OF STAN PARRIS

ON VIDEO RECORDER LEGISLATION

MR. CHAIRMAN, I APPRECIATE HAVING THE OPPORTUNITY TO TESTIFY THIS AFTERNOON, AND I COMMEND THE CHAIRMAN FOR HIS PROVIDING CONGRESS WITH THIS FORUM TO DISCUSS A VERY SERIOUS PROBLEM.

I WAS EXTREMELY DISTURBED WHEN I LEARNED THAT THE NINTH U.S. CIRCUIT COURT OF APPEALS RULED THAT THE USE OF HOME VIDEO RECORDERS WAS IN VIOLATION OF FEDERAL COPYRIGHT LAWS. FRANKLY, I FEEL THAT THIS WAS JUST THE LATEST EXAMPLE OF IDIOCY IN THE FEDERAL JUDICIARY, THIS UNREASONABLE DECISION MEANS THAT NINE TO TWELVE MILLION AMERICANS WHO VIEW THE THREE MILLION VIDEO RECORDERS ARE VIOLATING THE LAW IF THEY RECORD TELEVISION PROGRAMS WITHOUT FIRST HAVING THE PERMISSION OF THE PROGRAM'S PRODUCERS.

BY THE END OF THIS YEAR, THERE WILL BE OVER THREE MILLION VIDEO RECORDERS IN AMERICAN HOMES, WITH AN ADDITIONAL SALE OF TWO MILLION ESTIMATED FOR 1982. SINCE THEIR INTRODUCTION IN THE EARLY 1970's, VCRS HAVE COME DOWN IN PRICE AND HAVE INCREASED IN POPULARITY. THEIR POPULARITY SEEMS TO STEM FROM THE FACT THAT VIDEO RECORDERS HAVE MANY USES. THEY CAN PLAY PRERECORDED VIDEO CASSETTES, THEY CAN BE USED WITH A VIDEO CAMERA TO MAKE HOME MOVIES, AND THEY CAN BE USED TO RECORD A TELEVISION PROGRAM AND PLAY IT BACK AT A LATER TIME. SURVEYS HAVE SHOWN THAT VCRS ARE USED MAINLY FOR RECORDING A PROGRAM AND PLAYING IT BACK WHEN IT IS MORE CONVENIENT. THIS CONCEPT IS REFERRED TO AS "TIME-SHIFTING."

TO CORRECT WHAT I PERCEIVE TO BE AN UNWARRANTED INTRUSION BY THE FEDERAL COURTS INTO THE PRIVACY OF AMERICAN HOMES, I INTRODUCED LEGISLATION IN THE HOUSE WHICH WOULD PERMIT THE CONTINUED SALE AND USE OF VCRS FOR NON-COMMERCIAL PURPOSES. MY BILL, H.P. 4808, WAS INTRODUCED ON OCTOBER 21ST AND IS IDENTICAL TO THE LANGUAGE CONTAINED IN THE MEASURE PENDING BEFORE THIS COMMITTEE, S. 1758. AS OF THIS MORNING, WE HAD 25 CO-SPONSORS TO H. R. 4808, AND I'M SURE WE WILL BE ATTRACTING MORE SUPPORT AS THE PUBLIC AND MEMBERS OF CONGRESS BECOME AWARE OF THE DILEMMA POSED BY THE RECENT COURT DECISION. AS MY LIST OF CO-SPONSORS INDICATES, THIS IS A BI-PARTISAN ISSUE WHICH HAS THE INTEREST OF MEMBERS FROM ALL REGIONS OF THE COUNTRY.