In an extremely impressive show of its bench strength, the Copyright Office yesterday released a second report to Congress, this time on the Satellite Home Viewer Extension and Reauthorization Act. The report covers the unserved household limitation in Section 119 and the relatively recent Section 122 statutory license for the retransmission of local network stations into their local markets. Section 119 is not for the faint of heart, and requires very technical knowledge, both of the industry, copyright law, and FCC law. There are only a tiny number of copyright lawyers who can grasp the intracies of the SHVA, which also requires a great deal of history of past acts. Bill Roberts, now Judge Roberts of the Copyright Royalty Board, was the principal drafter of the report, and is one of the select few. My home boy Tom Olson, a partner at Wilmer Hale is another.
For those wondering how sunsets work in practice, Section 119 is an example. In 1994, when I was counsel to the House of Representatives, the SHVA, first passed in 1988, was up for renewal or death. I preferred death, but I had no say in the matter. I therefore spent the good part of a year working with Bill Roberts, the Senate, and opposing members in the House, principal of whom was the late Mike Synar a strong proponent of the satellite industry. Committee chair Jack Brooks was also a supporter, which eliminated much negotiating room for those of us in the House who sided with the broadcasters. The Senate was also hostile to the broadcasters over their having killed cable compulsory reform the prior year. Subcommittee staff were upset about that too, but we took issues on a case by case basis, and sided with the broadcasters and sports leagues.
The most contentious issue in 1994, as now, is the unserved household restriction. The restriction serves to ensure that households that receive over-the-air signals do not receive through their satellite service another such signal, from another station affiliated with the same network. In 1994, the Senate preferred an extremely, and we believed unworkable scheme, of testing compliance. We went along with it out of comity. That system failed miserably.
In 1999, the system was amended and adopted a predictive model to determine subscriber eligibility. Although the Office's report notes one dissenting view, it concludes that the 1999 revisions have operated both efficiently and effectively. That is a "signal" improvement indeed.
Another issue is the fee for the satellite license. The license is calculated differently from the cable compulsory. One of the most unusual experiences I think I had in Washington arose out of the 1994 renewal legislation, when we dictated that market rate be set as the benchmark for what was then the carps (copyright arbitration royalty panels). When the arbitrators faithfully followed the statute in the rate adjustment under the 1994 Act, there was a huge uproar among some, including members of Congress who weren't involved in the legislation. The result was a rollback in 1999, and a freezing of the rates for five years, so that now the rates are far below market rate. There is no reason in the world why the satellite industry should be subsidized by copyright owners, and I applaud the Office's report for concluding that copyright owners are being harmed by below market rates. Sunsets are, though, intensely political matters and the issue is fought out by muscle, not on the merits.
The Office's report is another outstanding effort, so bravo again.