Mr. COOPER. That is well put.

Mr. DEINAN. I am just delighted and I congratulate you. I yield back my time.

Mr. KASTENMEIER. The gentleman from New York.

Mr. PATTISON. No questions.

Mr. KASTENMEIER. If there are no further questions, then, we appreciate the appearance of Mr. Cooper and Mr. Holmes and their colleagues.

Settlement of the issue between the parties is reflected in the following correspondence:

(1) Letter from Jack Valenti, president, Motion Picture Association, to the Chair, dated November 7, 1975, and enclosure, and (2) letter from Senator Ted Stevens of Alaska to the Chair, dated November 10, 1975.

MOTION PICTURE ASSOCIATION OF AMERICA, INC.,

Hon. ROBERT W. KASTEN MEIER,

Washington, D.C. November 7, 1975.

Chairman, House Subcommittee on Courts, Civil Liberties, and the Administration of Justice, Washington, D.C.

MY DEAR MR. CHAIRMAN: You will recall that under date of October 8, 1975 Senator Stevens wrote you with respect to the agreement on the taping of programs for nonsimultaneous transmission by cable systems in offshore areas as jointly agreed to by Mr. Lee Holmes in behalf of the Guam cable system and myself in behalf of the copyright holders.

Senator Stevens praised the parties for their willingness to work out an agreement but suggested that consideration be given to further changes that would permit so-called “bicycling" of tapes within Alaska (as permitted between Guam and within the Pacific trust territories) and that the liability of cable systems for piratical taping be modified.

This is to advise you that our staff people met with Senator Stevens' staff and with your committee counsel, Mr. Fuchs during which it was agreed to work out language to meet Senator Stevens' request. Subsequently, the Senator asked that we further modify a cable system's liability against duplication and we have done so.

Attached herewith is the complete text of the Stevens-Won Pat amendment as further modified at Senator Stevens' request. I assume that Senator Stevens will advise you of his approval of what has been done. I hope that this additional compromise will be satisfactory to you and your subcommittee. Sincerely,

JACK VALENTI,

President.

[Corrected copy]

PROPOSED AMENDMENTS TO H.R. 2223

On page 17, between lines 18 and 19, insert the following: (e) Nonsimultaneous 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 actionable as an act of infringement under section 501, and are fully 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 copyrighted 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 unauthorized duplication while in the possession of the facility making the videotape for the system if the system owns or controls the facility, or takes reasonable precautions to

prevent such duplication if it does not own or control the facility, (iii) takes adequate precautions to prevent duplication while the tape is being transported, and (iv) subject to paragraph (2), erases or destroys, 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 affidavit 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 each such affidavit, and affidavits received pursuant to paragraph (2) (C), to be placed in a file, open to public inspection, at such 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 cable system would be authorized to transmit under the rules, regulations and authorizations of the Federal Communications Commission in effect at the time of the nonsimultaneous transmission if the transmission had been made simultaneously, except that this clause shall not apply to inadvertent or accidental transmissions.

(2) 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 502 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 videotape and its transfer, a videotape nonsimultaneously transmitted by it in accordance with paragraph (1), [to another cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands,] may be transferred by one cable system in Alaska to another system in Alaska, by one cable system in Hawaii permitted to make such nonsimultaneous transmissions to another such cable system in Hawaii, or by one cable system in Guam, the Northern Mariana Islands, or the Trust Territory of the Pacific Islands, to another cable system in any of those three territories, if:

(A) each such contract is available for public inspection in the offices of the cable system 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 Congress (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), (C) (i), (iii) and (iv) and (D) through (F); and (C) such system provides a copy of the affidavit required to be made în 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 affiliated.

(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 Communications Commission, regardless of the nature of the material objects, such as tapes or motion pictures, in which the reproduction is embodied. One 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),”.

Hon. ROBERT W. KASTEN MEIER,

U.S. SENATE, COMMITTEE ON COMMERCE, Washington, D.C., November 10, 1975.

Chairman, House Subcommittee on Courts, Civil Liberties and the Administration of Justice, Washington, D.C.

DEAR MR. CHAIRMAN: Pursuant to my October 8th letter to you concerning several problems I had with proposed amendments to Section 111 of the Omnibus Copyright Bill, my office has had the benefit of several discussions with representatives of the Motion Picture Association in an attempt to reach agree

57-786-76-pt. 3- -23

ment on these matters. I am pleased to report to you that such agreement has now been reached.

As you will recall, these problems affected copyright matters pertaining to non-contiguous cable systems. At the behest of Mr. Fuchs, of your office, several discussions were held and agreement was reached on working for these proposed amendments which address the concerns of both the Motion Picture Association and the cable operators in Alaska. It is my understanding that you are in possession of a copy of the revised wording for these proposed amendments, contained in Mr. Valenti's November 7th letter to you concerning this matter. I wish to thank you and your fellow members on the Subcommittee for your interest and hard work on behalf of the Alaskan Cable system.

With best wishes,

Cordially,

TED STEVENS,

U.S. Senator.

Mr. KASTENMEIER. Now, the committee would like to turn to the questions of ephemeral recording rights, involving music of a religious nature, as appears in Section 112(c). Our first witness on that subject this morning is Albert Ciancimino.

TESTIMONY OF ALBERT F. CIANCIMINO, COUNSEL, SESAC, INC., OF NEW YORK

Mr. CIANCIMINO. Well, I am not General SESAC, as on the witness list, but I thank you for allowing me to be here today.

Mr. Chairman, I would like to submit the complete text of my statement to you.

Mr. KASTENMEIER. Without objection, your statement in its entirety will be accepted and made a part of the record.

[The prepared statement of Albert Ciancimino follows:]

STATEMENT OF ALBERT F. CIANCIMINO, COUNSEL FOR SESAC, INC.

Mr. Chairman, members of the Committee, my name is Albert F. Ciancimino, and I am a member of the New York Bar and counsel to SESAC Inc. in New York. The main issue involving Section 112(c) of H.R. 2223 is relatively simple. It is whether or not a religious program producer can use a piece of religious music and distribute it to approximately 4,000 radio stations without any compensation to the creator of that religious music. Stripping away all of the other issues and side-issues, we basically come to the question-Is Congress going to provide that the creator of a religious copyright is to continue to have the right to receive payment for the mechanical reproduction of his work by a religious program producer, or for the first time in the history of the United States Copyright Act, is Congress going to say that in the area of mechanical reproduction rights, an outright exemption is going to be granted. You may remember, Mr. Chairman and members of the Committee, that even the Public Broadcasting Service representatives have not asked for an exemption in the mechanical rights area, but rather have asked for a statutorily governed fee to be set by Congress. The National Religious Broadcasters are going one step beyond the educators and public broadcasters by asking for this total exemption. It is our position that no such exemption is justified and it should not be granted.

In the Summer of 1973, I had the pleasure of appearing before a Senate Subcommittee on this very issue. At that time, as now, I testified since the 112(c) exemption is already in the proposed Copyright Revision Bill. Testimony given by the National Religious Broadcasters after my appearance, therefore, went unrebutted. I will now refer to and answer segments of the NRB's prior testimony in order to set the record straight.

In 1973, the NRB made much of the fact of the three performing rights organizations (ASCAP, BMI and SESAC), only SESAC was asking religious program producers to sign licenses for recordings of religious music on their transcribed programs. It was implied that SESAC was overreaching and applying undue pres

sure in an area where the other two organizations were not causing any problems. To quote from the NRB's 1973 testimony:

"Religious program producers have reported no problems in this respect with ASCAP or BMI, Only SESAC, according to frequent reports, has pressured certain of the religious program producers to make such payments."

The NRB failed to point out, however, that ASCAP and BMI cannot ask for mechanical licenses in this area because they do not represent the mechanical rights on behalf of their affiliates. Both ASCAP and BMI represent only the performance rights. SESAC alone of the three organizations represents not only the performance rights but also the mechanical and synchronization rights on behalf of its affiliates. I believe the NRB is well aware of this basic fact of life in our industry, and I am dismayed that such a fact has been so terribly distorted.

One thing should be made clear. We have no desire to inhibit the broadcasting of religiously oriented programs. To the contrary, we are simply trying to maintain the integrity of a religious copyright and we are simply trying to preserve to the creator of a religious copyright those rights which are now, and even under H.R. 2223, will continue to be available to the creator of non-religious copyrights. Why should one who creates a religious work be treated as a second class citizen? Clearly, even under the NRB's proposal as reflected in 112(c). this exemption is to be granted only with regard to religious works. If Oral Roberts or Billy Graham uses a non-religious work on his program, there is no question that he will be responsible for the payment of mechanical royalty fees. The creator of a religious copyright has the same expenses as the creator of a non-religious copyright. He must pay the same for a loaf of bread or a bottle of milk. Why then the distinction in allowing the author of a non-religious work a broader earning base than the creator of a religious copyright. Also, one can imagine the very substantial problems of determining what is a religious work. In many instances, whether a work is of a religious nature is determined on a subjective basis by each listener.

In 1973 the NRB also asserted: "Any law requiring or leaving open the possibility that mechanical reproduction fees be paid for such use could make this music too expensive in the average religious broadcast. . . ."

The fact of the matter is that the usual charge to a program producer for the use of a copyright in a transcribed program to be heard on radio is a rather nominal $10.00 per year per copyright for unlimited use of that copyright during that year. I think that organizations such as Billy Graham's Hour of Decision, The Lutheran Hour, The Baptist Hour and others cited by the NRB in 1973 as NRB members can well afford to pay the creator of a religious song $10.00 a year for unlimited use of that song. If they can afford this more than half-page ad in a Minneapolis newspaper earlier this month to attract viewers and listeners of the Word of God, they surely can pay those creating the music of God. The NRB in 1973 said over and over again that responsible religious broadcasting is a non-profit activity carried on as a ministry. We again emphasize that we have no quarrel with the importance of such a ministry and with the fact that the country needs more of this kind of broadcasting. All we ask is that these non-profit organizations (many of whom are rather large and wealthy) pay for the use of their religious music just as they pay for their newspaper advertisements, their electricity, their studio and auditorium rental, their executive salaries, their plane fares from city to city, their guest starts and every other expense normal to their business.

Again in 1973 the NRB stated and again today they state: "The proposed mechanical reproduction exemption would cause no measurable injury to religious music copyright owners, their publishers or agents. . . ."

What is left unsaid is that many of the program producers at the behest of NRB have refused to pay mechanical royalties pending resolution of this issue by Congress. However, if they recognize their current obligations under the 1909 law, as have some of their associates, a more substantial amount of income would be accruing to copyright proprietors today. Therefore, the injury to religious music copyright owners is both measurable and substantial, as evidenced by the list of endorsements appended to my testimony in 1973 from the foremost copyright proprietor organizations in the industry. Letters were submitted in agree-. ment with SESAC's basic position from The Church Music Publishers Associa tion. The National Music Publishers Association, The Music Publishers Association, BMI, ASCAP, The Harry Fox Agency, The American Guild of Authors and Composers and The National Gospel Music Publishers Association. Mr. Chairman,

should you wish copies of the full letters of endorsement which are already contained in the record of the Senate hearings held in 1973, I will be more than happy to supply them to you. These organizations represent substantially all of the responsible copyright proprietor interests in the United States today and all of them are opposed to the inclusion of Section 112(c) in the pending Revision Bill. I might also add that the American Bar Association passed a resolution in 1973 which opposes 112 (c) in its entirety.

It is interesting to note that in the monthly newsletter of the NRB called "Hotline", the June 1975 issue referred to a petition filed with the FCC which the NRB claimed “clearly discriminates against sectarian groups" and the NRB pointed out that the religious orientation of an applicant should not be used as a basis for determining its eligibility for a commission license. SESAC wholly endorses this position and we further ask that the religious orientation of a copyright creator not be used as a basis for determining his eligibility to receive copyright royalty payments.

Before concluding, I must touch upon the often used NRB argument that 112(c) would eliminate unfair double fees. The NRB points to the performance payment made by a radio station to SESAC, ASCAP and BMI, generally under a blanket licensing arrangement, as well as the payment of a mechanical royalty under the current law by the program producer. This is no different, Mr. Chairman, from a situation where a commercial record company, such as Columbia, Decca, RCA, etc. would pay the copyright proprietor a mechanical reproduction fee for each record pressed, while at the same time the broadcaster pays a performance fee for his performance of the recording over the air. There is no "double fee". There are simply different uses being made by different people, each of which justifiably calls for compensation to the copyright owner.

In conclusion, I ask this sub-committee to consider and weigh the practical necessities for such an exemption as exists in 112(c) against the far-reaching and negative effects which it will have not only on trade industry practice as currently exists, but on the unwarranted dilution of the rights originally granted to the copyright proprietors by Congress in 1909. Only by allowing the copyright proprietor of religious works equal rights and an equal opportunity to earn a living, will we continue to enjoy the kind of music which has contributed to and hopefully will continue to contribute to the moral fiber of our great country. Thank you.

Mr. CIANCIMINO. I will try to omit certain portions of the statement. in the interest of time. The main issue involving section 112(c) of H.R. 2223 is relatively simple. It is whether or not a religious program producer can use a piece of religious music and distribute it to approximately 4,000 radio stations without any compensation to the creator of that religious music.

You may remember, Mr. Chairman and members of the committee, that even the Public Broadcasting Service representatives have not asked for an exemption in the mechanical rights area, but rather have asked for a statutorily governed fee to be set by Congress. The National Religious Broadcasters are going one step beyond the educators and public broadcasters by asking for this total exemption. It is our position that no such exemption is justified and it should not be granted.

In the summer of 1973, I had the pleasure of appearing before a Senate subcommittee on this very issue. At that time, as now, I testified first since the 112(c) exemption is already in the proposed copyright revision bill. Testimony given by the National Religious Broadcasters after my appearance, therefore, went unrebutted. I will now refer to and answer segments of the NRB's prior testimony in order to set the record straight.

By the way, I noted from reading the statement made by the NRB that all of the points I am addressing myself to are repeated in their testimony before you this morning.