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entered into, between a cable system and a television broadcast station in the arta in which the cable system is located, or a network with which such station is affiliated.

(4) As used in this subsection, the term "videotape", and each of its variant forins, means the reproduction of the images and sounds of a program or programs broadcast by a television broadcast station licensed by the Federal Communications Commission, regardless of the nature of the material objects, such as tapes or motion pictures, in which the reproduction is embodied.

On page 17, line 19, strike out" (e)" and insert in lieu thereof “(f)".

On page 17, line 29, immediately after "or", insert a comma and the following: "in accordance with subsection (e),".

Mr. KASTENMEIER. At this time, the Chair would like to call Mr. Edward Cooper, vice president, Motion Picture Association of America, accompanied by Lawrence Monaco, vice president. TESTIMONY OF EDWARD COOPER, VICE PRESIDENT, MOTION PIC.

TURE ASSOCIATION OF AMERICA, ACCOMPANIED BY LAWRENCE MONACO, VICE PRESIDENT

Mr. Cooper. Thank you, Mr. Chairman. I am Edward Cooper, vice president of the Motion Picture Association, and with me is Mr. Lawrence Monaco our legislative counsel.

We are substituting for Mr. Valenti, the president of the association, who has testified here before. He is in California for a series of conferences of utmost importance to the motion picture industry. He has asked me personally to apologize for his inability to be here, and give his regret that he cannot testify in person. Before you is a copy of his statement, to which is attached a copy of proposed amendments to the bill, H.R. 2223, and a detailed explanation of those amendments. I will not

Mr. KASTEN MEIER. Without objection, that statement
Mr. COOPER. I was just about to ask that.

Mr. KASTENMEIER [continuing]. And the proposed amendments will he inserted in the record.

[The prepared statement of Jack Valenti follows:]

STATEMENT OF JACK VALENTI, PRESIDENT OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC., AND TIIE ASSOCIATION OF MOTION PICTURE AND TELEVISION PRODUCERS, INC., On NonSIMULTANEOUS TRANSMISSIONS BY OFFSHORE CABLE SYSTEMS

My name is Jack Valenti. I am President of the Motion Picture Association of America, a trade association whose members are the major American producers and distributors of copyrighted motion pictures. We are, therefore, the principal holders of the copyrighted program material seen on television and cable.

This statement also represents the view of and is filed in behalf of the Associa. tion of Motion Picture and Television Producers of Hollywood, California, whose memhership comprises some 70 companies, large and small, employing more than 60.000 persons, who produce copyrighted motion pictures for theatrical exhibition and television viewing, and television series programs. I am also privileged to speak for the Committee of Copyright Owners, an ad hoc committee of independent producers and distributors of filmed and taped copyrighted television programs. This committee was formed to coordinate its members' efforts in resolving copyright-cable television legislative problems and the regulatory issues that arise from time to time on the importation of television signals by cable systems.

I appreciate the opportunity to again testify on that part of Section 111 of H.R. 2923 and on H.R. 4965, the Won Pat Bill, both of which would permit cable systems to tape television programs in the continental United States and exhibit them to cable subscribers in offshore United States possessions.

The Motion Picture Association, the Association of Motion Picture and Television Producers, and the Committee of Copyright Owners are all opposed to the provision in Section 111 in its present form and to the Won Pat Bill as I pointed out in my statement to this Subcommittee on June 12, 1975.

At that time I explained that the proposal was first made in the Senate by Senator Stevens to meet a problem in Alaska and thus became known as the Stevens Amendment. It will be found on page 17, beginning on line 29 of the Bill. The Alaska problem was solved some months ago and no longer exists. As originally drafted, and as now incorporated in H.R. 2223, the so-called Stevens Amendment, and the Won Pat Bill, seek to re-define a "secondary transmission" by asserting that a non-simultaneous transmission shall be deemed to be a simul. taneous transmission for certain offshore purposes.

However, throughout congressional consideration of the copyright bill, it has been my policy to attempt to conciliate differences, particularly when special circumstances are involved. That is why, when Mr. Lee Holmes, owner of the Guam Cable TV System and his counsel, Richard Brown, asked me to discuss the Stevens Amendment, I was pleased to do so.

My conferences with Mr. Holmes and Mr. Brown convinced me that as a matter of public interest the people who live on Guam deserved special consideration. Guam is more than 5,000 miles from the Western shore of the continental United States. It has only one commercial television station that operates for a limited number of hours daily. It is apparent that the people of Guam would be denied a fair share of television programming if the cable system was unable to tape programs on the mainland and fly them in.

Moreover, Mr. Holmes spoke of his intention to install and operate systems on the Islands of Tinian and Saipan where the United States Government is expected to create major military installations with large numbers of American service families. Mr. Holmes or other operators of those systems or systems elsewhere in the Marianas and the Trust Territory of the Pacific Islands would be able to use the program tapes supplied to Guam.

It seemed to me, therefore, that in the public interest we should make every effort to work out language acceptable to the parties and which we could recommend to this Subcommittee for its favorable consideration. The copyright owners and the Guam cable system have now reached agreement on such language. It modifies the provisions of Section 111 and makes the Won Pat bill unnecessary.

The modifying language we are recommending to the Subcommittee would permit cable systems in offshore areas covered by the so-called Stevens Amend. ment to tape television programs and show those ta ped programs to their cable subscribers without infringing any copyright, if the cable system satisfies the requirements stated in the modifying language.

As the Chairman and the Members of the Subcommittee are aware, letters af. firming the agreement between the copyright holders and the Guam system have been sent the Committee by Mr. Brown in behalf of Mr. Holmes, and by myself in behalf of the two Associations and the Committee of Copyright Owners. Mr. Brown additionally has written the Delegate from Guam pointing out that his bill is no longer necessary. May I request, Mr. Chairman, that the letters be included in the record of these hearings.

We believe the proposal is in the public interest because it makes allowance for the special circumstances that affect United States offshore areas covered by the so-called Stevens Amendment now in H.R. 2223. For these reasons, we re spectfully request that the Subcommittee adopt the recommended language.

I am attaching at the end of my statement the text of the proposed Amendments and a detailed explanation of them.

PROPOSED AMENDMENTS TO H.R. 2223 On page 17, between lines 18 and 19, insert the following: (e) Vonsimultaneous Secondary Transmissions By Cable Systems.

(1) Notwithstanding those provisions of the second paragraph of subsection (f) relating to nonsimultaneous secondary transmissions by a cable system, any such transmissions are actionabile as an act of infringement under section 501, and are fulls subject to the remedies provided by sections 502 through 506, unless :

(A) the program on the videotape is transmitted no more than one time to the cable system's subscribers; and

(B) the copsrighted program, episode, or motion picture videotaped, including the commercials contained within such program, episode, or picture, is transmitted without deletion or editing, and

(C) an owner or officer of the cable system (i) prevents the duplication of the videotape while in the possession of the system, (ii) prevents duplication while in the mission of the facility making the videotape for the system, (iii) takes adeqtlate precautions to prevent duplication while the tape is being transported, and (IV) subject to paragraph (2), erases or destross, or causes the erasure or destruction of the videotape; and

"D) within 45 days after the end of each calendar quarter, an owner or officer of the cable system executes an attidavit attesting (i) to the steps and precautions taken to prevent duplication of the videotape, and (ii) subject to paragraph (2), to the erasure or destruction of all videotapes made or used during such quarter; and

(E) such owner or officer places or causes such affidavit, and affidavits received pursuant to paragraph (2) (('), to be placed in a file, open to public inspection, at sikh system's main office in the community where the transmission is made or in the nearest community where such system maintains an office; and

(F) the nonsimultaneous transmission is one that the (uble system would be authorized to transmit under the rules, regulations and authorizations of the Federal Communications Commission in effect at the time of the non simultaneous transmission if the transmission had been made simultaneously, except that this clause shall not apply to inadvertent or accidental transmissions.

12) If a cable system transfers to any person a videotape of a program nonsimultaneously transmitted by it, such transfer is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections

12 through 506, except that any cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands may transfer, pursuant to a written, nonprofit contract providing for the equitable sharing of the costs of such ridutape and its transfer, a videotape nonsimultaneously transmitted by it in txtrordance with paragraph (1), to another cable system in Guain, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands, if :

(A) each such contract is available for public inspection in the offices of the cable systems involved, and a copy of such contract is filed, within 30 days after such contract is entered into, with the Copyright Office in the Library of ('ongress (which Office shall make each such contract available for public inspection); and

(B) the cable system to which the videotape is transferred complies with paragraph (1) (A), (B) (i), (iii) and (iv), and (c) through (F); and

l() such system provides a cops of the affidavit required to be made in accordance with paragraph (1) (D) to each cable system making a previous nonsimultaneous transmission of the same videotape.

(3) This subsection shall not be construed to supersede the exclusivity protection provisions of any existing agreement, or any such agreement hereafter entered into, between a cable system and a television broadcast station in the area in which the cable system is located, or a network with which such station is a fliliated.

(4) As used in this subsection, the term "videotape", and each of its variant forms, means the reproduction of the images and sounds of a program or programs broadcast by a television broadcast station licensed by the Federal ('ommunications Commission, regardless of the nature of the material objects, such as tapes or motion pictures, in which the reproduction is embodied.

On page 17, line 19. strike out “(e)" and insert in lieu thereof “(f)".

On page 17, line 29, immediately after “or”, insert a comma and the following: “in accordance with subsection (e),”.

EXPLANATION OF PROPOSED MODIFYING LANGUAGE The proposed modifying language would permit a cable system in offshore areas covered by the Stevens Amendment to tape television programs and show the programs to its subscribers, without infringing any copyright, if the cable system satisfies all of the following requirements:

(1) The system shows the taped program only one time.

(2) The copyrighted program, whether it is a motion picture, television series, a documentary, or any other television program, must be taped and shown by the cable system without any deletion or editing, including no deletion of commercials with one exception: The system is authorized to delete commercials prior to the beginning of, and after the end of, the motion picture, documentary, or other program being taped.

(3) The cable system is required to prevent duplication of the tape while the tape is in the system's possession and while it is in the possession of the facility making the tape. The cable system must also take adequate precautions to see that there is no duplication during any time the tape is being transported from one place to another. After showing the tape one time, the system shall destroy or erase the tape, unless the tape is being transferred to another cable system in accordance with the proposed language.

(4) Every 3 months the cable system is required to execute an affidavit on the measures it has taken during the preceding 3-month period to prevent duplication. Each affidavit must be made available for public inspection by the cable system.

(5) The cable system may tape and show its subscribers only those television programs which the system is permitted to show live under FCC rules (but cannot do so because of geographical distance). If, however, the system inadvertently or accidentally shows a program that it would not have been permitted to show live, no copyright infringement occurs.

A cable system is prohibited from transferring any of its videotapes to another cable system for showing to the other system's subscribers unless that other system is located in Guam, the Northern Marianas, or the Trust Territory of the Pacific Islands, and unless certain additional requirements are met.

The first condition is that the transfer may be made only under a nonprofit contract providing for the equitable sharing of the costs of the tape among the authorized cable systems using the tape. These costs include the purchase price of the blank tape, the processing costs, and the transportation and handling costs in transferring the tape from the taping facility to the first cable system and thereafter to each system. The contract must be filed in the office of each cable system and with the Copyright Office in the Library of Congress. Each system to which the videotape is transferred must comply with the same requirements that bind the cable system which originally showed the tape. However, the subsequent system users are not covered by the prohibition against the duplication at the taping facility. In addition, each cable system must furnish a cops of its affidavit to every cable system which previously had shown the same tape.

The last provision of the proposed, modifying language makes clear that any existing or future contract between a cable system and a television station or network that provides for exclusivity or nonduplication protection may not be superseded by the amendment. For example, assume cable system X tapes the programs of a Los Angeles television station and shows them in Guam. The Guam television station shows many of the same programs that the Los Angeles sta. tion does. The Guam television station and cable system sign a contract that provides that the cable system will not show the Los Angeles-taped programs for a specified period of time immediately following the showing in Los Angeles. It the Guam television station has not shown the program after the end of the period, the Guam Cable System may then show the program unless the Federal Communications Commission has adopted a contrary rule.

Mr. Cooper. Thank you. I will not take the time to read Mr. Valenti's statement, because I think your time is precious. We don't really need it. I hope the committee will have an opportunity to read Mr. Valenti's statement.

The members of the committee have received the letters the chairman just referred to from both Mr. Valenti and Mr. Holmes, explaining that an agreement had been worked out on legislative changes in the bill between the copyright holders and Mr. Holmes on behalf of the cable system. That agreement is embraced in the proposal that has been submitted to the committee. As the committee knows and as Mr. Valenti testified here last June, he made clear the sharp concern of copyright holders with the language in the bill, 2223, on page 17, beginning line 29, which has commonly been referred to as the “Stevens amendment” because it came over from the Senate bill. That provision would have permitted cable systems to tape television programs in the continental United States and exhibit them to subscribers in offshore possessions of the United States. Our concern, then, was that this pro

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Tuon failed to take into consideration the lawful rights and inter**** of copyrighted owners in their copyrighted copies. It did so by neng a secondary transmission, so that what was actually not a Def.:m:janeous transmission could be held to be a simultaneous trans

on in these offshore areas.

We were further disturbed because the provision lent itself to the ****** * * mue of taped material through pira y of the programs. Piracy of

6.3 /rrently costs our industry many millions of dollars annually.

lie Won Pat bills, II.R. 4963 and 9301, have the same deficienos

be permitting widespread taping, but they closed, fortunately, some op of ipira'y loopholes, a proposal which we strongly endorse, and

Wir á las bun incorporated into the amendments we respectfully prou to the committee.

Horroier, there was another factor. Guam presented an unusual sit. tankerquse of its distant geographical location, coupled with the itabi.( Mr. líolmes referred to of the cable system to obtain a les giate viral programing. As Mr. Valenti noted in his statement beCome on, and as Mr. Ilolmes has pointed out, a series of meetings #antil with Mr. Ilolmes and his counsel and a good faith effort was mnie to * A lrgi lative compromise that would meet the current stolt on in Guam and in the adjacent islands and in the Pacific Tru-t Territories

In sort, the Won Pat bills formed the basis for those provisions in tahun'nt that protect the integrity of the tapes in a manner atsia topi to the pyright holders

On our part, we have made special con essions on the use and the la.. of tax for Gunm and the far Pacific, We respectfully a live (

t utter's favorable consideration of what the parties have akuvad ufun. But clearly, we think that what has been agreed upon is Trally in the public interput. 11. k roti. Vir. K1X MECn. Thank you very much, Jir, (oper, for prrent. * Jr. Valentinstatement to uwania re-tatement of her powtion and tist of your swiation. Veedless to say, when a matter can be s . *hn in this case, the committee is very happy indeped.

7. confutter will, of court, framine it, because we do not neril for four foerstejad that were preplit mir than merrly two partiem to a putea pute, but I would a !111, that what you haie agreed to 19's bo gostopeit a being in the public interent!

Vr. (eln. Weerstanly bespo), Vir. (hairman.

Nr. K1:111)K. I would like to sirlil to the pointleman frun 1. Iul.

Mr Run And K. I want to thank you for your tent:bony thin short, in #13 - Ir that I want fraali v to spletne the Homes Mor I 11.8 !etiniting :11. I w. with the l ast futha llosa # *

p e ed tremendous hospitality from the Governor 11!!!! alimlar12ans and a)-, We l.ail

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Villimis. Thank you very much, Sir.

Wr IIN!». I l. if, from what I licurile pligt no-in.lt 1:1, 111.0 oltita" tot 1. mini-al

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