COPYRIGHT ROYALTY TRIBUNAL . AND U.S. COPYRIGHT OFFICE f,t OVERSIGHT HEARING BEFORE THE SUBCOMMITTEE ON COUETS, CIVIL LIBERTIES, AND THE ADMINISTRATION OF JUSTICE OF THE COMMITTEE ON THE JUDICIAEY HOUSE OF REPRESENTATIVES NINETY-NINTH CONGRESS FIRST SESSION ON COPYRIGHT ROYALTY TRIBUNAL AND U.S. COPYRIGHT OFFICE MAY 1, 1985 Serial No. 20 Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 51-527 O WASHINGTON : 1985 COMMITTEE ON THE JUDICIARY PETER W. RODINO, JR., New Jersey, Chairman JACK BROOKS, Texas HAMILTON FISH, JR., New York ROBERT W. KASTENMEIER, Wisconsin CARLOS J. MOORHEAD, California DON EDWARDS, California HENRY J. HYDE, Illinois JOHN CONYERS, JR., Michigan THOMAS N. KINDNESS, Ohio JOHN F. SEIBERLING, Ohio DAN LUNGREN, California ROMANO L. MAZZOLI, Kentucky F. JAMES SENSENBRENNER, JR., WILLIAM J. HUGHES, New Jersey Wisconsin MIKE SYNAR, Oklahoma BILL McCOLLUM, Florida PATRICIA SCHROEDER, Colorado E. CLAY SHAW, JR., Florida DAN GLICKMAN, Kansas GEORGE W. GEKAS, Pennsylvania BARNEY FRANK, Massachusetts MICHAEL DEWINE, Ohio GEO. W. CROCKETT, JR., Michigan WILLIAM E. DANNEMEYER, California CHARLES E. SCHUMER, New York HANK BROWN, Colorado BRUCE A. MORRISON, Connecticut PATRICK L. SWINDALL, Georgia EDWARD F. FEIGHAN, Ohio HOWARD COBLE, North Carolina LAWRENCE J. SMITH, Florida HOWARD L. BERMAN, California FREDERICK C. BOUCHER, Virginia HARLEY 0. STAGGERS, JR., West Virginia JOHN BRYANT, Texas M. ELAINE MIELKE, General Counsel GARNER J. CLINE, Staff Director ALAN F. COFFEY, Jr., Associate Counsel SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND THE ADMINISTRATION OF JUSTICE ROBERT W. KASTENMEIER, Wisconsin, Chairman JACK BROOKS, Texas CARLOS J. MOORHEAD, California ROMANO L. MAZZOLI, Kentucky HENRY J. HYDE, Illinois MIKE SYNAR, Oklahoma MICHAEL DEWINE, Ohio PATRICIA SCHROEDER, Colorado THOMAS N. KINDNESS, Ohio BARNEY FRANK, Massachusetts PATRICK L. SWINDALL, Georgia BRUCE A. MORRISON, Connecticut HOWARD COBLE, North Carolina HOWARD L. BERMAN, California FREDERICK C. BOUCHER, Virginia MICHAEL J. REMINGTON, Chief Counsel GAIL HIGGINS FOGARTY, Counsel DAVID W. BEIER, Counsel DEBORAH LEAVY, Counsel THOMAS E. MOONEY, Associate Counsel JOSEPH V. WOLFE, Associate Counsel (II) CONTENTS WITNESSES Page Curran, Donald C, Acting Register, Copyright Office, Library of Congress 60 Prepared statement 65, 103 Hall, Marianne, chairman, Copyright Royalty Tribunal 3 Prepared statement 6 ADDITIONAL MATERIAL Minutes of staff meeting held April 25, 1985 38 Administration and legislative issues of the Copyright Office 50 ADDITIONAL STATEMENTS 1. National Cable Television Association (James P. Mooney, president and chief executive officer) 110 2. Oliver Berliner 122 APPENDIX I. FURTHER MATERIALS RELATING TO THE COPYRIGHT ROYALTY TRIBUNAL A. Correspondence and memoranda: 1. Letter from Hon. Robert W. Kastenmeier and Hon. Carlos Moorhead to Hon. Marianne Hall (December 18, 1984) 124 2. Letter from Hon. Marianne Mele Hall to Hon. Robert W. Kastenmeier (dated January 29, 1985) 126 3. Memorandum to the Record on Operations of the Copyright Royalty Tribunal from Marianne Mele Hall (December 31, 1984) 127 4. Letter from Hon. Marianne Mele Hall to Hon. Robert W. Kastenmeier (April 16, 1985) with amendments 136 5. Letter from Hon. Marianne Mele Hall to Hon. Peter W. Rodino, Jr. (dated April 18, 1985) 171 6. Letter from Hon. Edward W. Ray to Hon. Robert W. Kastenmeier (dated April 22, 1984) with attachment 179 • 7. Statement of Marianne Hall (May 2, 1985) 182 8. Letter from Hon. Marianne Mele Hall to Hon. Robert W. Kastenmeier (dated May 6, 1985) with April 30, 1985 update on memorandum for the record written December 31, 1984 183 9. Memorandum to Members of the Bar who practice before the Tribunal, Administrative Conference of the United States, from Edward W. Ray (dated May 12, 1985) 198 B. Copyright Royalty Tribunal procedures: 1. Part 301, Code of Federal Regulations—Copyright Royalty Tribunal Rules of Procedure 205 2. Memorandum to the Copyright Royalty Tribunal: Evidence and Relat­ ed Subjects, from Rice, Carpenter and Carraway (undated) 235 C. Magazine and newspaper articles: 1. Montgomery, "CRT: Small Clog, Big Clog?", Cable Television Business (February 1, 1985) at 42 288 2. "The curious combination at the CRT," Broadcasting (April 29, 1985) at 65 291 3. "Hall assailed for tract called racist," Broadcasting (May 6, 1985) at 44 . 295 4. "CRT chairman resigns under fire," Broadcasting (May 13, 1985) at 39 .. 298 tin i IV II. MATERIALS RELATING TO "FOUNDATIONS OF SAND" Page A. "Foundations of Sand: A Hard Look at the Social Sciences," Excerpts 300 B. Certificate of Copyright Registration for "Foundations of Sand" (August 23, 1982) 312 III. FURTHER MATERIALS RELATING TO THE COPYRIGHT OFFICE A. Correspondence: Letter from William F. Patry to Hon. Robert W. Kastenmeier (dated May 15,1985) 314 B. Cases: 1. United States v. Steerwell Leisure Corp., F. Supp. (W.D.N.Y. 1984) 315 2. United States v. Gallo, F. Supp. (W.D.N.Y. 1984) 320 COPYRIGHT ROYALTY TRIBUNAL AND U.S. COPYRIGHT OFFICE WEDNESDAY, MAY 1, 1985 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES, AND THE ADMINISTRATION OF JUSTICE, COMMITTEE ON THE JUDICIARY, Washington, DC. The subcommittee met, pursuant to call, at 2:15 p.m., in room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding. Present: Representatives Kastenmeier, Synar, Schroeder, Morri­ son, Boucher, Moorhead, and Swindall. Staff present: Michael Remington, chief counsel; Deborah Leavy, counsel; Thomas E. Mooney, associate counsel; Audrey Marcus, clerk. Mr. KASTENMEIER. The committee will come to order. Without objection, the subcommittee will permit, today, the meeting to be covered, in whole or in part, by television broadcast and/or still photography, pursuant to rule V of the committee rules. Also, pursuant to a standing request of my chairman, both wit­ nesses this afternoon will be sworn in, in terms of testimony. I would like to make this opening statement. This afternoon, the subcommittee is pleased to continue its oversight of various agen­ cies that fall within our jurisdiction. Today's hearing will be on the two entities within the legislative branch of government: The Copy­ right Royalty Tribunal and the Copyright Office. The Copyright Royalty Tribunal was created by the Copyright Act of 1976. The Tribunal is composed of five Commissioners ap­ pointed by the President, with the advice and consent of the Senate. It presently has two vacancies, probably more a finding of benign neglect by the administration than a conclusion that the agency and its authority are unimportant. The Tribunal is important. It has general statutory authority to make determinations concerning copyright royalty rates in the area of cable television, phonograph records, jukeboxes, and non­ commercial broadcasting; and further, to distribute cable and juke­ box royalties deposited with the Register of Copyrights. To set the tone for this hearing, I would like to state that I have little doubt that the Tribunal is in dire need of reform. The sub­ committee has had a classic case of a broken agency on its hands. I (l) 2 do not know whether the agency is broken beyond repair. I certain­ ly hope not. The purpose of the hearing, therefore, is to inquire as to whether the agency generally is effective and whether the Commissioners' relative lack of expertise, and I say this historically, in copyright law has hurt the Tribunal in terms of its deliberations; whether ju­ dicial review has been meaningful; whether the absence of clear guidance from Congress on how the Tribunal shall make rate deci­ sions creates a statutory defect that ought to be rectified. Now, I ought to point out, and I regret to do so, a recent article in Broadcasting Magazine raised several of these questions, and it also, of course, contained a discussion of a book, Foundations in Sand, authored by a Dr. Lawrence Hafstad with Marianne Mele Hall and John Morse. I have several questions about this publica­ tion that I will ask Ms. Hall during the course of the hearing. It is, of course, constitutionally the assigned job of the Senate to analyze and assess all factors in a person's record prior to confir­ mation. I have strong feelings that the House should not attempt to replicate that function. I will state, however, that this subcom­ mittee has an exceedingly high interest in whether public officials, particularly those appointed by the President of the United States, satisfy the public confidence conferred upon them. Presidential appointees are expected to uphold the Constitution, obey the laws of the land, and satisfy high ethical standards; they should, in exchange for relatively high salaries, work hard; and, fi­ nally, should be balanced and fair in the exercising of their judg­ ment. This was once aptly observed more than a century ago by a Member of the House of Representatives, Henry Clay: "Govern­ ment is a trust, the officers of the Government are trustees; and both the trust and trustees are created for the benefit of the people." Parenthetically, I would also address these comments to the em­ ployees of the Copyright Office, including the Register of Copy­ rights who is to be appointed in the near future. Now, I, at this point, would like to call upon the Chairman of the Copyright Royalty Tribunal to come forth. I am not clear whether the other Commissioners—Commissioner Ray and Commissioner Aguero—also desire to come forward with the Chair. Ms. HALL. They are not in attendance. Mr. KASTENMEIER. All right. Mr. SYNAR. Mr. Chairman, were the other two Commissioners in­ vited? Mr. KASTENMEIER. I don't recall specifically. It is the custom for Commissioners to come. I think technically they probably were all invited. Mr. SYNAR. Could we receive notice on why they are not with us today? Mr. KASTENMEIER. No; if they are not here—and I inquire again, are Commissioner Aguero and Commissioner Ray present today? They were not, I would say to the gentleman from Oklahoma, listed as witnesses, but it is customary for them to be here.