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The first reactions I have heard to it have been somewhat unfavorable. But I do not want to go any further in commenting on it. I have studied it, and I think it has some attractive features and some unattractive features. I would say probably its most unattractive feature is its complexity.

Vr. KASTENMEIER. On behalf of the committee, it might be useful for us if you would undertake to transmit that with any particular comments you would wish to make. Copies of the proposal-you say it comes off late in the game; but insofar as we have not heretofore received any proposal formally, it might be useful at least to have it in the discussion.

Mr. RAILSBACK. Mr. Chairman, I wonder if I might just add to that. I wonder if any objectors to the proposal who have not had a chance to register specific concerns about it-I think we ought to consider it. I think it ought to be before us, because I think we ought to hear from both sides.

Ms. Ringer. I agree. Mr. KASTEN MEIER. I am sure there would be no objection to that. Any other parties interested in appropriately commenting on the proposal, and care to do so, their views will be considered.

Vs. Ringer. In fairness to Teleprompter, I should say this put forward only as a fallback from their basic position, which is that there should be no payment at all.

Mr. KASTENMEIER. I think it is understood that many cable operators, depending on what organization they belong to, how they operate, what their personal view might be, vary from opposing any provisions to some sort of compromise. Furthermore, you did allude to concern that I think some of the copyright proprietors, broadcasters, filmmakers have; that, namely, in terms of the rate structure, that there be some flexibility considering the base computation, because of what some people foresee as radically altered bases for revenue in terms of cable television or pay television, or whatever it may be in the years ahead.

Some people, of course, see as I say a radically changed market, in which proprietors-owners of copyright material--may be dealing directly with pay TV or modified cable television operators. But the basis for revenue might be quite different than the subscription or the gross receipts tables that presently are in the proposed bill--I do not really know that we are prepared to make any judgment about that. But it is another late factor, it seems to me, in a consideration of this section.

Are there other comments or questions of the members of the committee?

Mr. Drinan. Mr. Chairman, I wonder if you or Ms. Ringer could address themselves to whether that same jurisdictional dispute might exist between the Judiciary Committee and Commerce Committee concerning cable. I would be very happy to give cable to them, if the ('ommerce Committee would want it.

Mr. KASTEN MEIER. May I respond to that, because that is a good question. It is the posture of the Chair to maintain some sort of communication with the chairman of the subcommittee, of the Commerce Committee, the gentleman from Massachusetts, Mr. Macdonald, on this question. And as we proceed, we have to keep him not only fully

informed, but he and members of this committee, as far as I am concerned, may participate-or at least have an input-into our deliberations.

I think it is necessary for us to move forward, obviating the impasse that we confronted in early 1967. But on the other hand, it is not necessary, I think, to do what the Senate did; to literally share jurisdiction with the copyright bill with that subcommittee. I think we can arrive at an agreement with them. At least, we can consult with them, and we can achieve a result which would not come to, let us say, jurisdictional disputes later in legislative proceedings.

Mr. DRINAN. Thank you.

Ms. Ringer, on your last page-page 32—you say "We do not advocate congressional action to abrogate those rules as inconsistent with Federal copyright policy.” If this bill were enacted, would some of those rules be set aside?

Ms. RINGER. No. I do not think there would be any automatic action. This is a much-debated point in the whole area right now. I might add, in fact, that the trade press has indicated that within the last 2 or 3 weeks, the Domestic Council in the White House has been addressing this question under its deregulation activities, and apparently has focused in on cable and these rules in the copyright context, in part. I would say that the chances of a constitutional attack on the rules under this bill would be less than 50/50. I would personally prefer to see copyright matters handled by copyright law, but I do not think that things are quite that compartmentalized.

The Supreme Court, in the Southwestern case, upheld the FCC's right to regulate the importation of distant signals by cable, which does involve both communication and copyright aspects. What I would certainly hope is that the FCC would see the light, and, Congress having taken a position that this should be handled by compulsory licensing, would rethink a lot of its exclusivity details, which are extraordinarily complex and are capable of criticism on that ground.

Mr. DRINAx. Is there any way by which we could fashion the law, or write in the report a congressional policy that the new congressional policy supersedes whatever rules might be inconsistent? Could that preclude a lot of expensive, time-consuming litigation?

Ms. RINGER. I confess it would please me to see you do that. But I think it would displease a great many other people. This is a much broader problem than actually what is covered in section 111, and I am not sure that this could be sustained in both Houses and gotten through both Houses of Congress. Rather than daring something as large as that, I would be inclined to approach it on a somewhat more low-level basis.

Mr. DRINAN. Is there any pending litigation that might result in decisions which would modify some of the conclusions you made here!

Ms. Ringer. The FCC nonduplication rules have been attacked in court, and I believe they are still in court. I do not know the details of that litigation. I do not think this would alter basically anything you would be doing here, unlike the previous situation.

Vr. KASTENMEIER. The gentleman from Illinois ?

Mr. RAILSBACK. You do not seem to address yourself to the issue of public broadcasting--or maybe you did.

Jls. Rrxger. That is the next chapter.

Mr. RAILSBACK. Excuse me. I will wait, and will come back for the next chapter.

Ms. RixGER. I hope we can get into it a little bit this morning.

Mr. RAILSBACK. You have always recognized a distinction between the importation of distant signals and retransmission of local, and you are still recognizing that distinction. But you are not really suiggesting how we might handle it. Do you have any further thoughts about that?

Ms. Ringer. If you want a single conclusion, it is the approach of the present bill--the general approach is probably about as good as you can do.

Mr. RAILSBACK. The graduated percentage? Ms. RINGER. I agree with you that you now have before you this Teleprompter proposal, which is basically an effort to try to distinguish between the two and not pay for local signals. But in order to do that, you have got to do a lot of other things which alter some very fundamental aspects of the present bill. I am not so wedded to drawing a line between local and distant that I would strongly advocate that.

I might say that in the earlier efforts, the line was drawn between compulsory licensing for local and full liability for distant. Now, we are in a situation where you are paying as compulsory licensing for everything, and it seems to me there that when everybody has access, and pays depending upon a graduated scale, it is not quite as important as it was before.

Mr. RAILSBACK. In respect to baseball or major league sports, it seems to me that there maybe ought to be a distinction between the minor leagues and major leagues. And there seems to be there at least are allegations-that perhaps Boston, although Boston did very well this year, but we use it as a hypothetical-anyway, I wonder if maybe there is not some justification for exclusivity, based on where you have a spectator sport. And yet, the people who gave testimony did not have any empirical data supporting their argument, I wonder if you

Ms. RINGER. Considered as a theoretical matter, I suppose you could make that argument.

Mr. RAILSBACK. I think it is a valid distinction.

Ms. RINGER. I agree with you. If you are going to try to do it this way, this is a valid point. But to include organized sports, an exclusive right cutting cable out of the retransmission of one of its principal business assets, which is the ability to retransmit sporting events, it seems to me out of place in a completely compulsory licensing section which we have now.

In the Senate, in September 1974, they had gotten past the point where they were seriously considering putting it in the bill. But Senator Hart put forward a proposal that the FCC, which is considering this question, be directed to deal with it. I do not think it was too clear as to what they were supposed to do, but they were directed to address the problem of sports blackouts and the protection of gate receipts. The Hart amendment was defeated.

Mr. RAILSBACK. Thank you.

Mr. KASTENMEIER. The gentleman from New York, Mr. Pattison?

Mr. PATTISON. Is the $25,000 exemption which has been suggested, is that a quarterly?

Ms. RINGER. Yes.
Mr. PATTISON. So it is $100,000 per year.

On the sports issue, is it your position that that really is more of a--better dealt with as a communications policy with the FCC, rather than as copyright?

Ms. Ringer. Yes; I do not want to express an opinion, pro or con, on this. But I think that broadcasts of sporting events contain copyrightable elements, and the contributions of the cameraman, director, and to some extent the people that direct the halftime events, and so forth. I do not think that the game itself, as a game, and activities of the participants, the players, are actually copyrightable; and I think, in all candor, that copyright has been seized upon as a possible way of protecting blackouts. If Congress wants to protect organized sports this way, it should do it directly rather than through the guise of cable exclusivity.

I mentioned before that the first time I looked at the Senate version of the bill that emerged in 1973, it struck me very forcefully that everything was subject to compulsory licensing except organized sports, which was given a complete protection. This seemed a little bit out of place in the orderly scheme of things.

Mr. PATTISON. In your opinion, would the Teleprompter proposal tilt in favor of the urban systems, and essentially put the burden of copyright on the fringe area systems?

Ms. RINGER. It would certainly work in their favor. I do not think there is any doubt about this; it would work in the favor of a system like Teleprompter, which gets most of its subscription fees from the retransmission of local signals in big urban areas. I do not think there is any doubt about that. It might have some beneficial effects for other types of systems, and it might have some beneficial effects for copyright owners, in comparison to this section 111 you now have. But I cannot really say what those ultimate effects would be.

Mr. PATTISOX. Would that not be essentially contrary to, for instance, the exemption for the small system at $25,000 a quarter!

Ms. RINGER. It depends on what the small system is carrying.

Mr. Patrison. I agree. But is it not fairly typical that the small systems are fringe systems, small towns and therefore, primarily carry imported signals?

Ms. Ringer. This is true.

Mr. Parrisox. It would be really very contrary. The exemption in the Teleprompter system would really be two directly contrary approaches to the same problem.

Ms. Ringer. Yes; this is one of the reasons why the $25,000 exemption was put forward by NCTA as a possible solution to this. You are saying, if I understand you, that these are really counter to each other.

Mr. PATTISON. The argument is very arguable and logical that you only charge for the imported signal. If you could handle it some way without terrible complexity-but that kind of a ruling would favor the urban system, which basically picks up local signals and may make all of its money, and tend to make most of its money, from paid TV.

Ms. Rixger. You cannot really tell what is going to happen. Obviously, Teleprompter at one time it has been the largest-it anticipated the possibility of bringing perhaps 25 or 50 signals containing different programs into New York City, for example. This was a technical possibility, and

Mr. Pattison. Although there are not that many programs that are available.

Ms. Ringer. If you wanted to use microwave relays, you probably could.

Mr. PATTisox. There are not 25 or 50 programs being broadcast anywhere.

jls. Ringer. In the country, yes. If you wanted to bring them in from the heartland, and so forth, I think you could.

Mr. Patrisox. You mean there are 25 or 50 independent signals ? Ms. Ringer. You might have a lot of different "I Love Lucys."

Mr. Patrisox. That is what I am talking about-excluding the repeats of the network programing, independent signals. I am not talking about signals that are owned by networks. I am talking about nonnetwork kind of programing, where you actually are creating something. It is pretty rare—there are only about 10 independents that really do that.

Ms. Rixger. But they buy syndicated programs and play them over and over again. At any one time, you could easily find 50 different programs.

Mr. Pattison. With the availability of 30 I Love Lucys on the same TV set at the same time, this certainly poses a great

Ms. RINGER. No comment on that.

Mr. KASTENMEIER. One question. It has to do with the practice I am not aware of what the practice is in terms of vicarious liability for infringing performances, and the ballroom operator case; is that the practice that the orchestra-whatever orchestra it is-must go to BMI and get a license to play a repertoire of BMI pieces?

Ms. RinGER. I believe it is usually the entrepreneur rather than the individual orchestra that does take the license. It is a blanket license.

Mr. KASTENMEIER. What you are saying is that the orchestra, which plays for profit, and in fact plays the music, does not pay a performing rovaltv?

Ms. Ringer. That is right, because the royalty is paid by the person who is providing the premises and is charging the admission. I think that is the usual pattern. I am sure there are variations to it, but essentially a band that goes into a place can assume that the person providing the physical facilities and so forth has a license from all three performing rights societies.

Mr. KASTENMEIER. Is there, in fact, a double payment? That is, if you had an orchestra, and obtained a license from the performing rights society for playing his repertoire, and also went into a place where the ballroom operator had also paid the same performing rights society for its license, is whether in fact that would be a double pay. ment-your answer is, in fact, orchestras never do obtain?

Ms. RINGER. I do not know. This is something we could inquire. I think it is a valid point. Mr. KASTENMEIER. Thank you for your-one more question. 57–786—76-pt.

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