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be ina de at hourly intervals during the program ir the last such announcement occurs at least 13 minutes before the announcement at the close of the program. The person or orxan zation furnishing or producing the program or providing funds for its production, shall be identitied by name only, except that in the case of a commercial company having bona fide o rating divisions or subsidiaries one of which has furnished the program or funds, the

ivimion or sulmidiary mas be mentioned in addition to or intend of the controlul rom. pany No material beyond the company for division or subsidiary) nane hill be included.

on request for walver of this provision, the Commission may authorize the inclusion of brief additional descriptive material only when deemed necessary to avoid confusion with another company having the same or a similar name. No mention shall be made of any product or service with which a commercial enterprise being identified bas a contition, except to the extent the name of the product or service is the same as that of the enterprise for division or subsidiary) and is so included. A repeat broadcast of a particular program is considered a separate program for the purpose of this note.

NOTE 2: Announcements may be made of general contributions of a substantial nature which make possible the broadcast of programs for part, or all of the day's schedule. Such anuouncements may be made at the opening and closing of the day or sexment, including all of those persons or organizations whose substantial contributions are making ible the broadcast day or segment. In addition, one such general contributor may be 14entified once during each hour of the day or segment. The provisions of Note 1 of this section as to permissible contents apply to announcements under this note.

NOTE 3: The limitations on credit announcements imposed by Xotes 1 and 2 of this sec. tion shall not apply to program material, the production of which was completed before January 1, 1971, or to other announcements broadcast before January 1, 1971, pursuant to underwriting agreements entered into before November 30, 1970.

NOTE 4: The provisions of Notes 1 and 2 of this section shall not apply during the broad. cant times in which "auctions are held to finance station operation. Credit announcements during "auction" broadcasts may identify particular products or services, but whall not include promotion of such products or services beyond that necessary for the spelfic auction purpose. Visual exposure may be given to a display in the auction area including the under. writer's name and trademark, and product or service or a representation thereof

NOTE 5: The numerical limitations on permissible announcements contained in Voto 1 and 2 of this section do not apply to announcements on behalf of noncommercial profit entities, such as the Corporation for Public Broadcasting, State or regional entitles, or charitable foundations. ( 73.621(d) amended & (c) added eff. 6-17-70 of ell. date postponed to 11-30-70; Votes 1 & 2 amended and Notes 3, 4 & 5 added el. 11-30-70; III (68)-11)

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le provisions of tomto before November 2010 January 1, 1971. Dub

SECTION 73.508

$ 73.503 Licensing requirements and scrrice.

The operation of, and the service furnished by noncommercial educational FM broadcast stations shall be governed by the following:

(a) A noncommercial educational FJ broadcast station will be licensed only to a nonprofit educational organization and upon showing that the station will be used for the advancement of an educational program,

(1) In determining the eligibility of publicly supported educational organizations, the accreditation of their respective state departments of education shall be taken into consideration.

(2) In determining the eligibility of privately controlled educational organizations, the accreditation of state departments of education and or recognized regional and national educational accrediting organizations shall be taken into consideration,

(b) Each station may transmit programs directed to specific schools in a system or systems for use in connection with the regular courses as well as routine and administrative material pertaining thereto and may transmit educational, cultural, and entertainment programs to the public.

(c) A noncommercial educational FM broadcast station may broadcast programs produced by, or at the expense of, or furnished by persons other than the licensee, if no other consideration than the furnishing of the program and the costs incidental to its production and broadcast are received by the licensee. The payment of line charges by another station, network, or someone other than the licensee of a noncommercial educational FM brondcast station, or general contributions to the operating costs of a station, shall not be considered as being prohibited by this paragraph.

(d) Each station shall furnish a nonprofit and noncommercial brondegst sery. ire. Noncommercial educational FM broadcast stations are subject to the pro. visions of $ 73.289 to the extent that they are applicable to the bridest of programs produced by, or at the expense of, or furnished by others; however, no announcements promoting the sale of a product or service shall be broadcast in connection with any program.

NOTE 1: Announcements of the prodnring or furnishing of programs, or the provision of innds for their production, may be made no more than twice. at the opening and at the close of any program, except that where a program lasts longer than 1 hour in n re. ment may be inade at hourly Intervals during the program 11 the last sucb annoncement

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occurs at least 15 minutes before the announcement at the close of the program. The per or organization furnishing or producing the program, or providing funds for its printe tion, shall be identified by name only, except that in the case of a commercial cupriy havins bona fide operating divisions or subsidiaries one of which has furnished the prezi or funds, the division or subsidiary may be mentioned in addition to or instead of the an mercial company. No material beyond the company (or division or subsidiary) name hall be included. Upon request for waiver of this provision, the Commission may author ze to inclusion of brief additional descriptive material only when deemed necessary to avoid confusion with another company having the same or a similar name. No mention shall te made of any product or service with which a commercial enterprise being identified has % connection, except to the extent the name of the product or service is the same as that of the enterprise (or division or subsidiary) and is so included. A repeat broadcast of & par. ticular program is considered a separate program for the pupose of this note.

NOTE 2 : Announcements may be made of general contributions of a substantial natura which make possible the broadcast of programs for part, or all of the days schedule Such announcements may be made at the opening and closing of the day or segment, inciding all of those persons or organizations whose substantial contributions are making possible the broadcast day or segment. In addition, one such general contributor mas bu identified once during each hour of the day or segment. The provisions of Note 1 of this section as to permissible contents apply to announcements under this note.

Narre 3: The limitations on credit announcements imposed by Notes 1 and 2 of this section shall not apply to program material, the production of which was completed before January 1, 1971, or to other announcements broadcast before January 1, 1971, pursuant to underwriting agreements entered into before November 30, 1970.

NOTE 4: The provisions of Notes 1 and 2 of this section shall not apply during the broadcast times in which "auctions' are held to finance station operations. Credit announcements during "auction" broadcasts may identify particular products or services, but shall not include promotion of such products or services beyond that necessary for the specific auction purpose.

NOTE 5: The numerical limitations on permissible announcements contained in Notes 1 and 2 of this section do not apply to announcements on behalf of noncommercial, nonproot entities, such as the Corporation for Public Broadcasting. State or regional entities, or charitable foundations. I$ 73.503 (c) amended & (d) added eff. 6-1770 & eff. date postponed to 11-30-70; Notes ist 2 amended and Notes 3, 4 & 5 added ej. 11-30-70; 11 (68)-11)

APPENDIX B

PERTINENT PROVISIONS OF THE PUBLIC BROADCASTING ACT OF 1967

"SUBPART B-CORPORATION FOR PUBLIC BROADCASTING

"Congressional declaration of policy

“Sec. 396. (a) The Congress hereby finds and declares

“(1) that it is in the public interest to encourage the growth and development of noncommercial educational radio and television broadcasting, including the use of such media for instructional purposes ;

“(2) that expansion and development of noncommercial educational radio and television broadcasting and of diversity of its programing depend on freedom, imagination, and initiative on both the local and national levels;

“(3) that the encouragement and support of noncommercial educational radio and television broadcasting, while matters of importance for private and local development, are also of appropriate and important concern to the Federal Government;

“(4) that it furthers the general welfare to encourage noncommercial educational radio and television broadcast programing which will be responsive to the interests of people both in particular localities and throughout the United States. and which will constitute an expression of diversity and excellence;

(5) that it is necessary and appropriate for the Federal Government to complement, assist, and support a national policy that will most effectively make noncommercial educational radio and television service available to all the citizens of the United States;

“(6) that a private corporation should be created to facilitate the develop ment of educational radio and television broadcasting and to afford maximum protection to such broadcasting from extraneous interference and control. Corporation established

"(h) There is authorized to be established a nonprofit corporation, to be known as the Corporation for Public Broadcasting, which will not be an agency or establishment of the United States Government. The Corporation shall be subject to the provisions of this section, and, to the extent consistent with this section, to the District of Columbia Nonprofit Corporation Act.

"Board of Directors

*(C) (1) The ('orporation shall have a Board of Dirertors (hereinafter in this section referred to as the Board'), consisting of fifteen members appointed by the President, by and with the advice and consent of the Senate. Not more than eight members of the Board may be members of the same political party.

*(?) The members of the Board (A) shall be selected from among citizens of the l'nited States (not regular fulltime employees of the United States) who are eminent in such fields as education, cultural and civic affairs, or the arts, including radio and television; (B) shall be selected so as to provide as nearly as prac ticable a broad representation of various regions of the country, various professions and occupations, and various kinds of talent and experience appropriate to the functions and responsibilities of the Corporation,

*Vonprofit and nonpolitical nature of the corporation

"(f) (1) The ('orporation shall have no power to issue any shares of stock, or to declare or pay any dividends.

*(2) No part of the income or assets of the Corporation shall inure to the benefit of any director, officer, employee, or any other individual except as salary or reasonable compensation for services,

"(3) The Corporation may not contribute to or otherwise support any political party or candidate for elective public otlice. *Purposes and activities of the corporation

*(g)(1) In order to achieve the objectives and to carry out the purposes of this subpart, as set out in subsection (a), the Corporation is authorized to

"(A) facilitate the full development of educational broadcasting in which programs of high quality, obtained from diverse sources, will be made avail. able to noncommercial educational television or radio broadcast stations, with strict adherence to objectivity and balance in all programs or series of programs of a controversial nature;

**(B) assist in the establishment and development of one or more systems of interconnection to be used for the distribution of educational television or radio programs so that all noncommercial educational television or radio broadcast stations that wish to may broadcast the programs at times chosen by the stations ;

"(C) assist in the establishment and development of one or more systems of noncommercial educational television or radio broadcast stations throughout the United States;

*(D) carry out its purposes and functions and engage in its activities in ways that will most effectively assure the maximum freedom of the noncommercial educational television or radio broadcast systems and local sta

tions from interference with or control of program content or other activities. *(2) Included in the activities of the Corporation authorized for accomplishment of the purposes set forth in subsection (a) of this section, are, among others not specifically named

*(A) to obtain grants from and to make contracts with individuals and with private, State, and Federal agencies, organizations, and institutions;

*(B) to contract with or make grants to program production entities, individuals, and selected non-commercial educational broadcast stations for the production of, and otherwise to procure, educational television or radio programs for national or regional distribution to noncommercial educational broadcast stations;

"(C) to make payments to existing and new non-commercial educational broadcast stations to aid in financing local educational television or radio programing costs of Huch stations, particularly innovative approaches thereto, and other costs of operation of such stations:

“(D) to establish and maintain a library and archives of noncommerrial educational television or radio programs and related materials and develop public awareness of and disseminate information about noncommercial educational television or radio broadcasting by various means, including the publication of a journal;

(E) to arrange, by grant or contract with appropriate public or private agencies, organizations, or institutions, for interconnection facilities suitable for distribution and transmission of educational television or radio programs to noncommercial educational broadcast stations ;

"(F) to hire or accept the voluntary services of consultants, experts, advisory boards, and panels to aid the Corporation in carrying out the purposes of this section;

"(G) to encourage the creation or new noncommercial educational broadcast stations in order to enhance such service on a local, State, regional, and national basis;

(H) conduct (directly or through grants or contracts) research, demonstrations, or training in matters related to noncommercial educational teleri

sion or radio broadcasting. "(3) To carry out the foregoing purposes and engage in the foregoing activities, the Corporation shall have the usual power conferred upon a nonprofit corporation by the District of Columbia Nonprofit Corporation Act, except that the Corporation may not own or operate any television or radio broadcast station, system, or network, community antenna television system, or interconnection or program production facility.

"(h) Nothing in the Communications Act of 1934, as amended, or in any other provision of law shall be construed to prevent United States communications common carriers from rendering free or reduced rate communications interconnection services for noncommercial educational television or radio services, sulp ject to such rules and regulations as the Federal Communications Commission may prescribe.

OCTOBER 15, 1975. MEMORANDUM

Re: Amendment to the Copyright Revision Bill (H.R. 2223) adding Section 118

to provide a compulsory license for non-dramatic works in public broadcasting

programs Text of amendment

The text of the public broadcasting compulsory license amendment as adopted by the Senate Judiciary Committee on October 7, 1975, is attached. Background

Since the licensing of the first noncommercial educational radio and television stations in 1919 and 1952, respectively, noncommercial educational public broadcasting has been covered by the not-for-profit exemptions in Section 1 of the 1909 Copyright Law. It has therefore been public broadcasting's view that the current copyright law permits inclusion of non-dramatic, literary, musical and photographic works in educational television and radio programs without obtaining clearance from or making payments to copyright owners.

Since the beginning of revision proceedings, both houses of Congress hare shown a preference for removing the general not-for-profit exemptions and substituting specific exceptions or other special treatment where, after careful analysis, they appear to be in the public interest. In adopting the Mathias Amendment, the Senate Judiciary Committee has filled a previous gap in the current Revision Bill for public broadcasting, and with public broadcasting's concurrence has provided for royalty payments to copyright holders in return for ready availability of non-dramatic works. Thus a reasonable compromise has been found between total exemption and total non-exemption in a manner similar to the compulsory license already provided for phonograph records, cable television and jukeboxes. The purpose or effect of the public broadcasting compulsory license

The serious dangers in complete non-exemption for public broadcasting are three-fold. First, much important copyright material would necessarily become unavailable by reason of unavoidable clearance difficulties. Second, burdensome administrative structures and prohibitive clearance expenses would be newly required. Third, excessive royalty rates could be imposed because of unequal bargaining strength.

The compulsory license is thus aimed not only at achieving reasonable royalty rates for public broadcasting, but more importantly at ensuring availability for program use and reducing the burdens and expense of obtaining access. It would avoid individual negotiations with copyright owners to secure permissions to use

individual works, and hence eliminate prolonged delays and substantial administrative costs. Without the amendment, the number of copyrighted works requiring clearance could easily be in the hundreds of thousands every year, straining especially the infinitesimal budgets of local stations. Even those scarce resources would undoubtedly not pass to the copyright holders, but would be dissipated in neelless administrative procedures.

With the compulsory license, public television and radio stations would have access to nondramatic copyrighted materials without having to undertake the costs and delays of securing individual permissions, Standard fees for the incluviou of such materials could, in the absence of industry-wide private agreements, be set by the Copyright Royalty Tribunal already established to handle royalty fee revisions for other compulsory licenses. Thus, an independent panel would decide, where the major parties cannot agree, what fair payment should be made by public broadcasting for the use of copyrighted materials.

Basically, therefore, what the new section provides is similar to the compulsory licenses already in H.R. 2223 for CATV systems (section 111), record manufacturers (section 115) and jukebox operators (section 116). It differs from these others in two important respects, however. First, it calls for initial rute determination by the Copyright Royalty Tribunal. Second, it encourages the substitution of mutually acceptable arrangements for Royalty Tribunal determinations. In summary, the publio broadcasting compulsory license prorider ample possibility for the succc88 of purely primate arrangements-but orhere they cannot be accomplished, provides an objective mechanism for fair resolution of disagreements. Need for amendment

Without the compulsory license, noncommercial educational broadcasting would be treated exactly the same as commercial broadcasting. But there are at least four critical differences between commercial and noncommercial broadcasting:

1. Public television and radio programs use more copyrighted material than their commercial counterparts. Situation comedies, quiz shows, sports programs do not require significant access to copyrighted materials. Extensive music per. formances, historical programs, children's programs, informational and cul. tural programs-often unique to public broadcasting-do. With the increased use of copyrighted materials necessary for educational programming go increased clearance burdens.

2. Central to the philosophy of public broadcasting is repeated program use. One or two exposures are maximum in commercial broadcasting, and are almost unheard of in public television. With repeated use goes vastly greater clearance burdens, particularly with the use of music.

3. Most commercial stations do little, if any, local production which requires resort to copyrighted materials. Public broadcasting stations are built upon local production at large and small producing organizations throughout the countrt-not just in Hollywood and New York. With centralized production, com. merrial television can support large clearance staffs; with dispersed production, public broadcasting cannot.

4. To serve the functions that Congress and the American people intend for noncommercial broadcasting, its scarce resources should be spent on paying fair fees to the creators of copyrighted materials, not squandered in unnecessary clearance procedures. Statue of negotiations betireen public broadcasting and copyright holders

At the request of the Senate and House Subcommittees, meetings were held continuously since last February to attempt to work out a non-legislative solotion to public broadcasting's clearance and royalty problems. For several reasons, such negotiations could not resolve those difñculties:

Music. --The music agencies originally proposed to jointly provide public broadcasting with blanket licenses for all copyrighted music at rates negotiated on a periodic basis, with rate disagreements to be subject to separate arbitration with each music organization. There is still no agreement, however, on the amount of initial fees and definite disagreement on the necessity for combined rather than separate arbitration. More importantly, at least one music agency has taken the firm position that any such joint agreement would require prior legislative relief from the antitrust laws.

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