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Senator DECONCINI. You think the court's going to be unduly impressed by having news monitoring mentioned, and thereby, in essence, if you say it isn't a presumption, in fact it will end up being one.

Mr. PATTERSON. Right. I do, Mr. Chairman, because I have studied and analyzed and written in the law of copyright for some 30 years

Senator DECONCINI. I know you have.

Mr. PATTERSON (continuing]. And I am continually impressed by the fact that courts simply do not give the copyright statute a complete reading. And let me emphasize I'm not criticizing the courts here.

Senator DECONCINI. I understand.

Mr. PATTERSON. They have an awfully heavy burden, and the copyright statute is a very complex statute.

Senator DECONCINI. Mr. Warner, how do you reconcile the fact that news clip services pay to use the material they use in their services. Why shouldn't video monitors also pay for the material that they acquire from the broadcasters?

Mr. WARNER. I don't think there's necessarily a parallel there. The news monitor provides a service of alerting us by the call they make to us that is, I think, very, very critical. The alert that is provided we couldn't get from the broadcaster. I can't imagine the broadcaster calling us and saying, "We have just run a story" or "We are running a story,” but we have got the news monitor who, on the other hand, is apt to call and

Senator DECONCINI. What difference is that than somebody monitoring the New York Times or Los Angeles Times, an 80-page paper, every day, and if they copy it, they have to pay, I understand. But in this case, do video monitors buy the material?

Mr. WARNER. Sure, we would buy the paper. I suppose you could say if we could buy a way to monitor all stations, you would, and that's what the news monitoring service provides us.

Senator DECONCINI. Well, why shouldn't the news monitoring service go to the broadcasters and the broadcasters be required to give a compulsory license and get paid something for it, even if Congress has to decide what that something is for? Aren't they entitled to remuneration for what they do? Your answer is, I guess, no.

Mr. WARNER. I would say no.
Mr. COHEN. Mr. Chairman, may I interrupt?

Senator DECONCINI. I find that quite contrary to the commercial use of copyright material. Maybe the distinction of Professor Patterson is the rationale if you want to do it, and I also see the public interest from the standpoint of having it available for a commercial use. Because I think it's very helpful. I know as a candidate it's very helpful to have you fellows employed, and if you had to get a license from all the stations in Arizona, Mr. Moser, you'd have to pay something and charge me more, and that's part of the market

Mr. WARNER. And it would become prohibitive.

Senator DECONCINI. Well, would it? Why would it become prohibitive? If it were a compulsory license with a mandated 2 cents or some arbitrary figure that just recognized the value of it, the 2 cents or 10 cents or whatever it might be would have to be passed on. I understand that. But isn't that what the market and the commercial use of copyright material is all about?

Mr. COHEN. Mr. Chairman, can I jump in on that? Our industry would welcome such an opportunity if it were compulsory and it were fair.

Senator DECONCINI. Sure.

Mr. COHEN. The problem that we're faced with is that we have so many broadcasters who hold to their breasts for fear of libel suits, whatever it might be, and we have other broadcasters who are, in my terminology, usurious. We have a case in point of a station, and we went to court on this, that asked 65 percent of our gross revenues as the license. We said we couldn't stay in business at 65 percent.

Senator DECONCINI. Sure. I agree with that.

Mr. COHEN. We made a reasonable effort, and the station chose to go to litigation.

Senator ĎECONCINI. Well, of course, that's their prerogative and, maybe the court of last resort is the legislative body.

Mr. COHEN. Our industry would welcome congressional help in mandatory licensing at a reasonable rate.

Senator DECONCINI. Thank you.

Mr. Moser, what do you think about the distinction between news clipping service do you do news clipping service?

Mr. MOSER. Yes, sir.

Senator DECONCINI. That's what I thought. We used your service, or have, and maybe we still do. News clipping services, which you have to pay for, you have to buy the newspaper. Shouldn't you have to pay something for the video or what you receive over the airwaves?

Mr. MOSER. Well, we both agree that if it were possible to get a reasonable and fair number there, it would be something we would certainly entertain.

Senator DECONCINI. Well, I'm not going to ask you, Mr. Cohen or Mr. Warner or Mr. Moser, to give me a reasonable number today, because I think it's unfair to have you on the block here and maybe not be able to have broadcasters on the block here, and I'm not in the process of negotiating something here, but I would like you to think about that, and if you're inclined to convey that to me, to this committee-not to me, but to the subcommittee it would be very helpful.

Mr. COHEN. Mr. Chairman, might I add, I was a little shocked in your statements about Mr. Oman having made an offer for our industry to sit down. We have never been aware we did not refuse to sit down with the Copyright Office, we as an industry.

Senator DECONCINI. Is that right? Well, I'm glad to know that. Would you be willing to do that?

Mr. ČOHEN. Absolutely. Absolutely.
Senator DECONCINI. I'm very glad to know that.

Mr. COHEN. And again, the idea in mind, to sum it up again, the courts are not giving us any way of

Senator DECONCINI. I understand. I understand your dilemma. Mr. COHEN (continuing). Which is why we're here.

Senator DECONCINI. I understand your dilemma. And I also know the value of your service, having been a consumer. I understand it, but it seems to me that there's a copyright problem, at least with me, that I can't quite get over as intellectually as the professor can here.

Maybe I can work on that, Professor, but I have a little trouble making that leap.

Mr. COHEN. We do pay cable companies as well for the right to take the information.

Senator DECONCINI. You do?

Mr. COHEN. We do subscribe to cable companies in all of our offices.

Senator DECONCINI. Do you have any licenses with cable companies?

Mr. COHEN. We pay the money.
Senator DECONCINI. You mean you buy the

Mr. COHEN. We subscribe the services, and that's the way we receive our signal. So in essence, CNN is receiving revenue from us vis-a-vis the cable company.

Senator DECONCINI. Yes, as a customer.
Mr. COHEN. As a customer.
Senator DECONCINI. OK.

I would like to encourage Mr. Oman to once again make that offer, if he would, and for you all to be part of that, to see what kind of standards might be developed and see how far it might go. It might be helpful to this committee.

Thank you very much. Your testimony is extremely helpful.

The last panel is Mr. David Nimmer, on behalf of Turner Broadcasting and other broadcasters.

Mr. Nimmer, welcome. We're glad to have you here, and your full statement will be put in the record, if you'd summarize it, please. STATEMENT OF DAVID NIMMER,

NIMMER, ATTORNEY IRELL & MANELLA, LOS ANGELES, CA, TESTIFYING ON BEHALF OF TURNER BROADCASTING SYSTEM AND THE NATIONAL ASSOCIATION OF BROADCASTERS Mr. NIMMER. Thank you, Mr. Chairman.

My name is David Nimmer. I represent Turner Broadcasting System in some litigation that is pending today, and I'm here today on behalf of Turner Broadcasting System and also on behalf of the National Association of Broadcasters, of which TBS is a member.

Despite the claims of broadcast monitors, the dispute we have surrounding S. 1805 is not whether the public deserves access to news clips, but whether copyright holders deserve compensation for and protection of their product. Turner Broadcasting and the NAB recognize that the public's right to receive information is an important aspect of first amendment jurisprudence. But that right neither exempts news disseminators from laws of general applicability, whether found in the Tax Code, the Fair Labor Standards Act, or the Copyright Act, nor does it grant broadcast monitors unrestrained and unlicensed access to copyrighted materials. We believe, of course, in the first amendment right to speak, publish, and broadcast, but we also believe in the protection of intellectual property. One right need not trump the other.

To date, the delicate balance between public access and copyright protection has been successfully maintained by a combination of statutory rights, court-made safe harbors for noncommercial video monitoring, and voluntary negotiations between news producers and broadcast monitors. Federal law already provides for public access to broadcast news clips through the fair-use doctrine and several specific statutory exemptions for video archiving and noncommercial use. Similar arrangements have accommodated the growth of other services that duplicate copyrighted materials and exploit them for commercial purposes. There's no reason to believe that the same process cannot work here.

These avenues of access not only demonstrate the adequacy of current law, but also the danger of a so-called corrective measure such as S. 1805, which attempts to bring broadcast news monitoring within the protection of the fair-use doctrine. There is simply no way to characterize the commercial activities of broadcast monitors as fair use. Although a majority of the U.S. Supreme Court, in the famous Sony Betamax litigation, held that noncommercial use of a VCR for time shifting purposes only may qualify as fair use, both the majority and dissent unanimously agreed that commercial use of the VCR cannot be justified. Further, the monitors' activities fall afoul of the fair-use doctrine in that they simply reproduce the works of others wholesale rather than adding their own commentary, analysis, or other productive component. In short, the only result of the monitors' activities is to destroy an ancillary market that otherwise would inure to the benefit of the copyright owners who create the subject newscast in the first place.

Mr. Chairman, I noted at the outset that you commented on the value of video monitoring services and mentioned that today was not the day in which we would discuss whether that value does exist or not. But I heard from the panel that preceded me many claims that video monitoring does provide a valuable news service, but I did not hear until the colloquy what the gross revenues of the video monitoring industry consist of. When we heard that that industry makes revenues in the neighborhood of $50 million, certainly there is room within that figure for a reasonable license fee to be paid to the copyright owners.

We very strongly agree with Mr. Oman's remarks that the marketplace can provide the resolution for both industries to coexistnews broadcasting and video monitoring. The relationships between broadcasters and monitors are still developing. As the industry continues to grow and as news producers and news monitors establish long-term and mutually advantageous commercial relationships, it will become even easier for consumers to enjoy quick access to that vast pool of information. But for this to happen, both parties must come to the table. When one party claims that the fair-use doctrine obviates its needs for a license, negotiations are not likely even to begin.

I thank you, Mr. Chairman, for the opportunity to present these views, and I'd be most pleased to answer any questions.

[Mr. Nimmer submitted the following material:]

[blocks in formation]

Association of Broadcasters of which TBS is a member.

with your

permission I shall submit a prepared statement for the record,

and use these few minutes to highlight portions of that

testimony.

Despite the claims of broadcast monitors, the dispute

surrounding s. 1805 is not whether the public deserves access to

news clips but whether copyright holders deserve compensation for

and protection of their product.

Turner Broadcasting recognizes

that the public's right to receive information is an important

aspect of first amendment jurisprudence.

But that right neither

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