Mr. WIGGINS. Do you have any idea what the revenue would be expressed in terms of a percent of sales, of sale prices now?

Ms. RINGER. No. We could work out some kind of estimate based on what figures we have, but I could not give you even a ballpark estimate

now.

Mr. WIGGINS. It does have some practical problems. It would require a higher degree of bookkeeping. Well, I do not purport to have this all worked out in my mind, or even embrace it necessarily. If you have any subsequent material on this subject, I personally would appreciate it.

Mr. KASTEN MEIER. I would like to now move on to chapter 10, section 116.

I regretfully must say I will be absent from the hearing room for perhaps 15 minutes or so, and will ask Mr. Drinan to preside.

Mr. DRINAN [presiding]. Ms. Ringer, why do you not just proceed in your usual fine manner.

MS. RINGER. Thank you.

This is the so-called juke box question which is contained in section 116, and, as identified in chapter 1, page 10, I think this has now resolved itself down to three issues.

If I may start reading from page 2, and I will try to summarize some of this although it is a rather short chapter. The hearings before the House Judiciary Subcommittee on June 3 of this year were devoted to this section, section 116, and they proved a pale reflection of the full-blooded battles waged over this issue for really nearly 50 years.

Since 1926 the jukebox operators have successfully staved off continuous attempts to repeal the present jukebox clause of the 1909 law. And I repeat it here: it is an outright exemption of performances upon coin operated machines.

This outright exemption was added to the 1909 act without explanation just before its passage, apparently as the result of some last minute legislative expediency. I do not think anyone has ever discovered what the deal was here.

As long as the machines involved were player pianos and similar musical automata the economic impact of the exemption was slight, but with the enormous expansion of the jukebox industry beginning in the 1920's, unfairness was more and more apparent.

A particular sore spot has arisen from the fact that American copyright owners, whose works are popular in foreign countries. received substantial royalties from jukebox performances abroad while a foreign composer who has a jukebox here in the United States receives nothing from that source.

Proposals to remove the exemption have taken different forms, and by the early 1960's it was becoming apparent that some sort of compulsory licensing probably offered the only realistic solution.

I must emphasize, Mr. Chairman, that when we embarked upon the legislative phase of the revision program the jukebox activity was in full swing. There was a great deal of activity in this committee in the early 1960's separate from general revision. And the 1961 Register's report took account of that, and in effect was saying, press on with the efforts to repeal the jukebox provision. And whatever comes out of that should be worked into the general revision bill.

The basic conclusion was which is in the middle of page 3-that the jukebox exemption should be repealed or should at least be replaced by a provision requiring jukebox operators to pay reasonable cense fees for the public performance of music for profit. The consideration of legislation proposed for this purpose should continue without awaiting the general revision of the law. And it did.

House hearings were held in 1963, and a bill completely removing the exemption after a 1-year period was reported with minority views by this committee on September 10, 1963. It was addressed right up to 1965 as a separate issue, and-if I may then skip to page 5-the arguments that had been going on, actually since the Second World War, in Congress over this issue continued right through the House hearings in 1965. And your subcommittee reported a bill on October 12, 1966, which contained a jukebox section based on a compulsory licensing system.

Now at that time-and a lot of this seems to have been forgottenbut at that time there were four different possibilities for dealing with the problem. They talked about compulsory arbitration, compulsory license with a per box maximum, which is not exactly what we have here, compulsory license with a fixed fee per record purchased, and a compulsory license with a fixed fee per record in the box.

And that is what emerged and went through the full legislative process in the House up to the time the bill went to the floor in 1967. The explanation is at the bottom of page 5. And again, this subcommittee went through a very thorough economic analysis of the problem and set an alternative quarterly fee of either 3 cents per song, or a prorated amount of less than 3 cents based on box capacity and the total number of songs available for performance during a quarter.

This was complicated, but it was the closest approach that the committee could find to what it considered a fair solution to the problem at the time. On this basis it estimated that annual royalties would average $19.20 per box, or about $9 million per year.

Now this formula was again adopted by your committee, and when the bill went to the House this was, I think, the most controversial issue when it went to the House floor. And without going into the details of that very difficult compromise, a compromise was hammered out, almost literally, and it was based on the clear observation that the bill could not pass unless a compromise was reached.

Neither the system nor the amount that was in the House reportthe committee-reported bill-could survive, and it was a question of either letting the whole bill go or trying to compromise this issue, which was essentially a money issue. After strenuous negotiations, essentially the same formula now in the bill was passed by the House on April 11, 1967. The amount of the royalty was to be $8 per box. The Senate did not accept this compromise at first; it kept the House reported version for longer than would normally have been expected, but eventually it went over to the flat $8 per box rate.

Then, in 1969, it added what used to be section 114 of the billwhich I will discuss if I ever get to chapter 8-the performance royalty for records. And that, of course, applied to jukebox performances as well as broadcasts. And the Senate added a dollar to the $8. making it a $9 fee, with $1 pegged for the jukebox, to go for the

performance on the jukebox. And it added a 50-cent fee to reimburse the Copyright Office directly for the paperwork involved in licensing individual jukeboxes.

Picking up on page 7, the 1969 bill, as reported, also set up the Copyright-Royalty Tribunal, and, among other things, gave it responsibility for periodic review and adjustment of the $9 jukebox royalty. These went forward in the 1971 version of the revision bill, and in the 1973 version as originally introduced in the Senate. But on July 3, 1974, when the full Senate Judiciary-when the Subcommittee of the Senate Judiciary Committee reported the bill, the fee was reduced to $8 with one-eighth, $1 going to the copyright owners and performers of sound recordings. The 50-cent registration fee was deleted from section 708, though, as you heard testimony, a vestige of it remained in section 116.

The reported bill retained the provisions in chapter 8, making the $8 fee subject to periodic review by the Copyright-Royalty Tribunal, which meant that they were back to the House version of April 1967, but with the possibility that the Royalty Tribunal might reexamine, and conceivably raise, the $8 fee.

This provision, the applicability of the Royalty Tribunal, was deleted from the bill on the floor of the Senate on September 9, 1974. Senator McClellan, who had been opposed to this, inserted something in the Congressional Record which I think expresses his feelings on the subject.

He said, "In speaking against this amendment on the floor. I said it gave no protection to the consumer, for a jukebox operator can increase the fees charged to the public, but for all practical purposes, the payment that he makes to the composers of the songs played on his machine are permanently frozen."

Well, of course, this is not really true in the sense that Congress can always change them, but they were certainly frozen until Congress acted.

Again on November 27, 1974, Senator McClellan wrote to jukebox operators, manufacturers and other interested parties indicating once more than he felt the annual fee should be $19.70, which had been a figure that had been floated around in the late 1960 hearings, especially if the $8 was not to be subject to review.

The 1975 bill, as introduced in both Houses, adopted the form in which the 1974 bill passed the Senate. But when S. 22, which was the Senate version of your bill, was reported by the Senate Judiciary Subcommittee on June 13 of this year, the provision for Tribunal review was restored in chapter 8. And this change was retained by the full committee when it reported S. 22 to the Senate on October 7, 1975. And when I wrote this I had not seen it, but I know that you have now-or the chairman has now received a request to amend the House bill to conform to the Senate reported bill-this is the Judiciary Committee; the Senate has not yet acted on the full bill yet.

Meanwhile, you held hearings on this issue on June 5th, and this was the first jukebox hearing since 1967 after all the many, many hearings earlier in the fifties and sixties and so forth. The same old pro and con arguments were made, but the tone was muted. It appeared to some observers at least that the only true issue being discussed was whether or not the $8 fee should be subject to Tribunal review.

Again, section 116 seems too far down the road to warrant reopening either its premises or its basic formulation. The vestigial reference to section 708 should be removed-that is the 50-cent thing-assuming the committee wishes the cost of licensing jukeboxes by the Copyright Office to be borne by the copyright owners. This is going to come out of their $8 in other words.

Similarly, it might be wise to add language making clear that coin operated machines include devices activated by tokens and currency, et cetera, since, if you are familiar with jukeboxes these days, there are some that you can operate by putting in a dollar bill.

Mr. DRINAN. That is progress.

Ms. RINGER. Aside from these minor adjustments, the only questions. are the $8 amount and whether the Royalty Tribunal should be able to review. These are essentially practical and interrelated questions. The Copyright Office takes no position on them, although, as in the case of other compulsory licenses, we recognize that the Tribunal could be more effective than congressional committees in marshalling and evaluating the masses of economic data necessary to revise the rates up or down, and that a congressional veto power is provided.

Mr. DRINAN. Thank you very much, Ms. Ringer.

I have just one question and then I will yield to Mr. Wiggins.

Is there any way by which we can set the maximum decibels of this

creature?

[General laughter.]

Mr. DRINAN. Mr. Wiggins?

Mr. WIGGINS. I have no questions, Mr. Chairman.

Mr. DRINAN. Mr. Pattison?

Mr. PATTISON. There seems to be an argument developing on the Tribunal as to whether the Tribunal should set the rate of the congressional veto, or whether the tribunal should recommend a rate, having developed the information subject to congressional approval. Do you have any particular feeling? That also relates not only to this particular issue, but to other issues as well.

MS. RINGER. Actually, I am wrestling with this now-this is chapter 8 of the bill-and now, as I have organized the rest of my presentation, I will have a separate chapter on this, and I have not come to a final conclusion on your question.

I am troubled-as I have indicated earlier, I think in connection with the cable issue-by the one House veto arrangement, and the fact that you really do not know what happens then. If one House vetoes, what do you do? And I think that obviously needs to be addressed. It has been suggested that you might have the rate set by the Tribunal and allow paying out so that the funds are not tied up-in other words, assume this is valid but allow the courts to test it.

I know this is being suggested, and I would like to save my comments on that proposal until later.

Mr. PATTISON. Fine. I will look forward to getting those. But there are constitutional issues also which would be obviated by doing it through the mechanism of having the Tribunal recommend and the Congress act. And those constitutional problems I am not sure how serious they are, although we have some memoranda on that that indicate that they may well be serious.

Ms. RINGER. I am going to try to address this in chapter 15. I think that the questions are serious ones and need to be addressed. I think that the provision is shakier on some constitutional grounds than others, and there are several points of attack. But I would rather really save that, if I may.

Mr. PATTISON. Fine.

I have no other questions.

Mr. DRINAN. Ms. Ringer, if these creatures now can absorb a dollar bill, we have trouble with the statute that talks about a coin-operated phonorecord player.

MS. RINGER. This is my point, Mr. Drinan. And the Senate report on this anticipated this, and rather boldly interpreted coin operated to mean currency operated, which is probably all right, but I think it would be just as well to put it in the bill since the literal language is

coin.

Mr. PATTISON. Or Master Charge operated, I suppose.

Mr. DRINAN. Operated for profit in any form.

Well, I am encouraged, Ma'am, that you think this problem may have receded into the past, and I am glad that you think that conference we had on June 5 the hearing was muted. I did not think— at least in the sequel they keep writing.

But, Mr. Wiggins? Counsel? Any more questions on this chapter? All right, now the masses of economic data that you mention on page 9, would you feel that we got sufficient evidence on and after June 5 about this industry to make some type of a ballpark judgment? Ms. RINGER. No.

I do not think that $8 recognizes anything other than a compromise figure. It really does not bear that much relation to the points that the economic data I was talking about were addressed to.

I would say if the thing were under the tribunal these could well be addressed, although

Mr. DRINAN. Well, it is under the tribunal in 2223.

Ms. RINGER. That is right-no, no, it is not. It came out on the Senate floor, and what you have in front of you is what came out on the Senate floor. It has gotten back in the Senate, and whether it survives in the Senate when it gets to the floor again, I do not know, I cannot predict.

Mr. DRINAN. Well, in the event that the $8 is adopted, does the jukebox industry desire to be under tribunal or not?

Ms. RINGER. Absolutely not.

That is the issue, I think, that is with us right now.

Mr. DRINAN. Where does the term come from-jukebox?
Ms. RINGER. I have known, but I have forgotten.

Mr. DRINAN. It is a minor point.

Ms. RINGER. I think it is Southern dialect referring to cafes or other establishments in Georgia. This is what sticks in my mind, although there are others who are in this room who know more about this than I do.

Mr. DRINAN. All right. If there are no further questions, why not move on to the next chapter. Is it 11?

MS. RINGER. Yes.

Mr. DRINAN. All right, thank you.