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(2) protection of the integrity of that product; and would also satisfy those Merking a compulsory license under the proposed copyright law for use of that proxiuct.

Tinus, the proposed legislation would, among other things, accomplish the following:

1. Apply the criminal provisions and other remedies of the copyright act to violations of the taping authority for the offshore systems affected;

2. Provide for only one time transmissions of the videotapes on the CATV's;

3. Prohibit deletion or editing of programs including the commercials that are contained within the story line of the programs. This would not affect the existing practice of deleting or otherwise altering or substituting commercial content at the beginning and end of programs;

4. Those systems engaged in taping must prevent the duplication of the tapes while in the system's possession and while in the possession of the taping facility and must take adequate precautions to prevent duplication while being transported. The system is also required to erase or destroy the tape or cause such erasure or destruction and to attest to the fact by an affidavit of an owner or officer of the CATV involved. Such affidavits must be kept open to public inspection in a public tile at its office;

5. CATV transmissions must be those that would be permitted under the pertinent FCC Rules and Regulations if made by a system that were not taping, Importantly, because of (1) the complexity of FCC Rules and Regulations, (2) the likelihood that such regulations may from time to time be changed, and (3) the problems involving notification, proposed section (e) (1) (F) is explicitly inapplicable to inadvertent or accidental transmissions. This is designed specifically to insure against the institution of nuisance suits under the copyright law,

Paragraph (e) (2) applies similar restrictions to the process of sharing tapes among CATV systems to insure that such tapes do not find their way out of the CATV chain of distribution. It would also allow for cost sharing of the full costs attendant in making tapes available, i.e., costs of tape, production costs and delivery costs. Finally, Paragraph (e) (3) indicates that the legislation is not meant to supersede any existing agreements concerning exclusivity protection provided to broadcast stations.

It is our opinion that the adoption of the proposed amendments in HR 2223 would fully resolve our CATV/copyright problem and would avoid the necessity for any consideration at this time of HR 4965 legislation, Mr. Won Pat's bill. We believe this agreement among the parties constitutes a good faith effort to arrive at a reasonable solution to a complex problem. Our experience in the last several weeks indicates that a forthright and hardworking approach to settle this matter has been entered into and achieved and we urge this Committee's adoption of the proposed amendments.

As you know, the residents of the northern Marianas have voted to join the United States as a Commonwealth. The bill that would confer such status has passed the House and is now pending in the Senate. When it passes, they will join the people of Guam as our westerninost American citizens-6.000 miles off the California coast, As Americans in the world today, their freedom of speech includes access to television, our most widely distributed medium. We have all played a part in the proposed legislation and we believe enactment of these vital amendments will meet the daily need of these Americans.

Thank you for this opportunity to testify and I would be delighted to answer any of your questions.

Mr. HOLMES. Mr. Chairman and members of the subcommittee, it is indeed a pleasure to appear before you this morning. Mr. name is Lee Holmes; I am president of Guam Cable TV System; seated on my right is my wife, Joan Holmes, a director and secretary of the corporation; and to my left is Richard L. Brown, our Washington counsel.

Guam (able TV System operates a CATV system on Guam. It carries the off-the-air signals of two local stations; one is an educational station, and one is a commercial station, KUAM-TV. Our company has approximately 150 shareholders, approximately 80 percent of which are Guamanians. Our company was developed with the financial

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assistance of the Guam Economic Development Authority. Therefore, not only are we a local service organization, but we are deeply routei in our community.

Guam Cable TV system currently has approximately 12.027 subscribing families and we estimate that nearly 50,000 Guamaniars cieu CITV programing on the system every day--the present populatiola of Guam is approximately 100.000 persons.

Guan is 9,000 miles from Washington, D.C. Distance is the fact that has given rise to our special CATV problem. Ordinarily, CITlp broadcast television signals out of the air and delivers them to sub Hribing customers. Sometimes this process is aided by the u-e of micti wave relay which allows the transportation of broadcast signals fir thousands of miles. Ilowever, the distance factor for G11am main microwave unavailable as a practical matter and requires programs to be taped in the continental United States and then physically town to Guam. It does not appear that satellite can ever be a solution to our

perial problem because of the time zone factor; that is, such trans missions would not be viewable at an appropriate time in Guam. For example, a satellite transmission of the Johnny Carson show would take place in the late afternoon on (uan. Similarly, satellite transi.in sion of Captain Kangaroo would take place in the wee hours of the morning.

The citizens of Guain should be able to receive the same televis09 prorraming as is a railable to citizens located in counterpart man in the contiguous States. Thus, Guam which is considered a walier market under the rules and regulations of the FCC is entitled to the fi!! programing of each of the three national networks, the programing of one independent station, and the programing of at least one eciucational station. This programing is now provided to CITV subsribers In Guam through the mechanism of videotaping.

Ilhen the companion bill of II.R. 23 was pending in the Senate in 1971, S. 1361, it provided for the payment by CATV of specited copia right fees under a compulsory license. I compulsory license w id be the equivalent of copyright consent without the necessity foroltaning that consent in each case, In other words, copyright holders br nr tue of having authorized television stations to broadenst their material, rould be deemed to have consented to (ITV carrin re. Prior to the addition of language which has come to be known as the S11.5 amendment, the oth short stems that tal programing.thak in Ornam and Unska. would not have revived compulsory lisens This Thomp srutems were placed in an inferior portion to cible ersteme located in the continguous States. We have always riew the Stevens uliendment as equity lerislation designed to plain the citizens of distnt areas on the same fonting as those in the 4s continuons Notes This if the Congopea decided to pass copyright legiulation involving (ATV, the provision of such legislation should apply to the nontir10: ari 11h 14 Gram.

Inelor the Staren amendment, which inics compulsory licenar of ot- repotems, the Senate lid away with the administrative and fortly nightmare program by program and s em hr sistem nej titions antalet.

E tially, this is what the compulsory license of ghost in tion 111 for mainland syaitms is all alwut in the fint place.

As you know, S. 1361 did not get enacted into law and the bill was reintroduced as S. 22 in the Senate and is now pending before you as HR. 2923. After passage of S. 1361 in the Senate, Guam Cable TV system continued to operate under threats of lawsuits; and in face of opposition to the Stevens amendment by the Motion Picture Association, the National Association of Broadcasters and one or more networks. While we were happy that the Senate agreed with our position, and we believed that the House would also, we had no certain understanding of the length of time required for deliberation of the omnibus copyright bill in the House, and its enactment into law, and whether Sotion 111, which is CATV copyright liability, would be included. With great uncertainty as to our continuing ability to serve the residents of Guam and other areas of the Trust Territory of the Pacific lands, Mr. Won Pat, our Representative, introduced H.R. 4965, a bill that we honed would expeditiously settle his very narrow copyright question by putting us in the same exact footing as mainland CiTV systems.

Fortunately, Mr. Won Pat's bill contained many provisions that met the concerns of the copyright holders. With this in mind, our counsel arranged a meeting between Mr. Valenti and me in which we discussed the CATV system in Guam and set to work on amendments largely derived from Mr. Won Pat's bill, which we proposed to this committee. These amendments would perfect the Stevens amendment and satisfy those seeking (1) payment for use of their product and (2) protection of the integrity of that product; and would also satisfy those seeking a compulsory license under the proposed copyright law for use of that product.

Thus, the proposed legislation would, among other things, accomplish the following:

1. Apply the criminal provisions and other remedies of the copyright art to violations of the taping authority for the offshore systems affecter.

... Provide for only one time transmissions of videotapes on the CATV's.

3. Prohibit deletion or editing of programs including the commerrials that are now contained within the story line of the programs. This would not affect the existing practice of deleting or otherwise altering or substituting commercial content at the beginning and end of the programs.

4. Those systems engaged in taping must prevent the duplication of the tapes while in the system's possession and while in the possession of the taping facility and must take adequate precautions to prevent (luplication while being transported. The system is also required to erase or destroy the tape or cause such erasure or destruction and to attest to the fact br an affidavit of an owner or officer by the CATV involved. Such affidavits must be kept open to public inspection in a public file in its office. . 5. CATV transmissions must be those that would be permitted under the pertinent FCC rules and regulations if made by a system that were not taping. Importantly, because of (1) the complexity of FCC rules and regulations, (2) the likelihood that such regulations may from time to time be changed, and (3) the problems involving notification, proposed section 111(e) (1) (F) is explicitly inapplicable to inadvertent or accidental transmissions. This is designed specifically to insure against the institution of nuisance suits under the copyright law.

Paragraph (e) (2) applies similar rest rictions to the process of sharing tapes among CATV systems to insure that such tapes do not find their way out of the CATV chain of distribution. It would also allow for cost sharing of the full costs attendant to making tapes available, that is, costs of tape, production costs, and delivery costs. Finalis, paragraph (e) (3) indicates that the legislation is not meant to super sede any existing agreements concerning exclusivity protection provided to broadcast stations.

It is our opinion that the adoption of the proposed amendments into H.R. 2223 would fully resolve our CATV/copyright problem and would avoid the necessity for any consideration at this time of H.R. 4965 legislation, Mr. Won Pat's bill. We believe this agreement among the parties constitutes a good faith effort to arrive at a rea sonable solution to a complex problem. Our experience in the last several weeks indicates that a forthright and hard-working approach to settle this matter has been entered into and achieved, and we urg this committee's adoption of the proposed amendments.

As you know, the residents of the northern Marianas have vote! to join the l'nited States as a Commonwealth. The bill that we'll confer such status has passed the House and is now pending in the Senate. When it passes, they will join the people of Guam or westernmost American citizens—6,000 miles off the California coa-t. As Americans in the world today, their freedom of speech includes access to television, our most widely distributed medium. We have all played a part in the proposed legislation, and we believe that enactment of these vital amendments will meet the daily needs of these Americans.

Thank you for this opportunity to testify and I would be delitel to answer any of your questions.

Mr. KASTEN MEIER. Thank you, Mr. Holmes. The Chair knows that there has been an exchange of correspondence on this issue and there are, for example, a letter from Mr. Valenti to Mr. Holmes dated September 10: a letter from Mr. Valenti to the Chair dated September 11: a letter from Mr. Brown to Mr. Valenti, dated September 12: a letter from Mr. Brown to the ("hair, dated September 13; a letter from Mr. Brown to Mr. Won Pat dated September 15. Without obinction, the communications will be placed in the record and the thrust of these communications is to affirm what Mr. Holmes has sugested: namely, that the parties have resolred their dispute and hire agreed to amendments varying somewhat from H.R. 40965.

I'Tha ghors.referred to doenmente ani a letter from Mr. Valenti to the Chair, dated September 30, 1975, follow:}

MOTION PICTI ET ARSOCIATION OF AMERIC, Tre.

Washington, DC, srptember 19, 1973 W Irr V No mre, Prroident, fuam ('able TV System, Tamuning. Guam.

War I . In our endeavor to be helpful in meeting the special fragraphical problem of Guam, as you are aware we have worked out with your Washing fon counsel, Richard Brown, Esq. who has consulted with you, as amendment to the provisdon dealing with nonsimultaneous secondary transmissions present ly contained in Section 111 of H.R. 2223

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The text of the proposed modifications, which we trust will be acceptable to the congressional subcommittee considering copyright, is attached herewith although I assume your counsel has forwarded it to you. We believe, and Mr. Brown concurs, that the proposed language would meet your needs and we, as copyright owners, are agreeable to advising Chairman Kastenmeier and the Members of bis subcommittee at the scheduled hearing on September 18, 1973, that the proposal is also acceptable to us.

An understanding has been reached with Mr. Brown that you, or Mr. Brown as your attorney under your direction, will as soon as possible and prior to the hearing date, (a) write the Honorable Antonio Borja Won Pat, Delegate from Guam, advising him that modifications to the copyright bill have been agreed upon between us that make the Won Pat Bill (H.R. 9301) unnecessary and asking him to so advise Chairman Kastenmeier; and (b) write Chairman Kastenmeier, with copies to the members of his subcommittee that an agreement has been reached by you with the copyright holders for language changes in the bill that are acceptable to both parties and that under the circumstances you have asked your congressional delegate not to press his bill.

I am sending a copy of this letter to Chairman Kastenmeier and to the members of the subcommittee so that they will be informed of the facts. In a covering letter, I will ask the Chairman to give friendly consideration to the amendment which we have jointly agreed upon. We will confirm this position formally at the subwommittee hearing on September 18.

I am pleased that you and I had the opportunity to meet personally on this problem and as a result I made a special point of explaining your situation to the members of the MPAA committee that is responsible for copyright matters. The end result has been helpful and I hope that we can persuade the subcommittee that the best interests of all the parties, and especially the people of Guam, are being served. I look forward to receiving copies of your letters to Mr. Won Pat and Chairman Kastenmeier promptly. Sincerely,

JACK VALENTI,

President. Enclosure.

MOTIOX PICTURE ASSOCIATION OF AMERICA, Inc.,

Washington, D.C., September 11, 1975. Hon. ROBERT W. KASTENMEIER, Chairman, Subcommittee on Courts, Civil Liberties and the Administration of

Justice, Committee on the Judiciary, U.S. House of Representatives, Wash

ington, D.O. JY DEAR MR. CU AIRMAN : Throughout the congressional consideration of the Copyright bill, it has been my policy to conciliate and make concessions in an earnest endeavor to expedite the enactment of a bill that all of the parties can live with. However, as you and your colleagues are aware, I found it necessary in my testimony before your committee to note our opposition to the language in Sec. 111 of H.R. 2223 that was carried over from the Senate bill that permits nonsimultaneous transmissions to be classified as simultaneous transmissions for certain non-contiguous United States areas. The provision, known as the *Sterens Amendment" does violence to the essence of copyright integrity, as Jx. Barabra Ringer, the Register of Copyrights, has pointed out, hence our opposition.

Vevertheless, it has been my personal feeling that Guam, situated more than 5.000 miles from the mainland and more than 3,000 miles from the nearest state, Hawaii, with only one commercial television station that operates for a limited number of hours, is deserving of special consideration.

I have sought, therefore, to meet with sympathy and a concern for the welfare of the residents of Guam, the problems presented to me by Mr. Lee Holmes in behalf of the Guam (able system, a facility that serves some 9.000 homes on the Island. I also have taken into consideration Mr. Holmer expressed desire to undertake cable operations on the Islands of Tinian and Saipan where scheduled military installations will bring in large numbers of American military families in the future.

Attached is a draft of an amendment to Section 111, jointly worked out and approved by Mr. Holmes and his Washington counsel and ourselves in behalf of the copyright owners. We trust that it will meet with your approval and that of the Members of your subcommittee and we bespeak your friendly considera

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