REAUTHORIZATION OF THE SATELLITE HOME VIEWER IMPROVEMENT ACT HEARING BEFORE THE SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS SECOND SESSION FEBRUARY 24, 2004 Serial No. 69 Printed for the use of the Committee on the Judiciary ( Available via the World Wide Web: http://www.house.gov/judiciary U.S. GOVERNMENT PRINTING OFFICE 92–119 PDF WASHINGTON : 2004 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 16:32 May 13, 2004 Jkt 089266 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 G:\WORK\COURTS\022404\92119.000 HJUD1 PsN: 92119 COMMITTEE ON THE JUDICIARY F. JAMES SENSENBRENNER, JR., Wisconsin, Chairman HENRY J. HYDE, Illinois JOHN CONYERS, JR., Michigan HOWARD COBLE, North Carolina HOWARD L. BERMAN, California LAMAR SMITH, Texas RICK BOUCHER, Virginia ELTON GALLEGLY, California JERROLD NADLER, New York BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina WILLIAM L. JENKINS, Tennessee ZOE LOFGREN, California CHRIS CANNON, Utah SHEILA JACKSON LEE, Texas SPENCER BACHUS, Alabama MAXINE WATERS, California JOHN N. HOSTETTLER, Indiana MARTIN T. MEEHAN, Massachusetts MARK GREEN, Wisconsin WILLIAM D. DELAHUNT, Massachusetts RIC KELLER, Florida ROBERT WEXLER, Florida MELISSA A. HART, Pennsylvania TAMMY BALDWIN, Wisconsin JEFF FLAKE, Arizona ANTHONY D. WEINER, New York MIKE PENCE, Indiana ADAM B. SCHIFF, California J. RANDY FORBES, Virginia LINDA T. SA´ NCHEZ, California STEVE KING, Iowa JOHN R. CARTER, Texas TOM FEENEY, Florida MARSHA BLACKBURN, Tennessee PHILIP G. KIKO, Chief of Staff-General Counsel PERRY H. APELBAUM, Minority Chief Counsel SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY LAMAR SMITH, Texas, Chairman HENRY J. HYDE, Illinois HOWARD L. BERMAN, California ELTON GALLEGLY, California JOHN CONYERS, JR., Michigan BOB GOODLATTE, Virginia RICK BOUCHER, Virginia WILLIAM L. JENKINS, Tennessee ZOE LOFGREN, California SPENCER BACHUS, Alabama MAXINE WATERS, California MARK GREEN, Wisconsin MARTIN T. MEEHAN, Massachusetts RIC KELLER, Florida WILLIAM D. DELAHUNT, Massachusetts MELISSA A. HART, Pennsylvania ROBERT WEXLER, Florida MIKE PENCE, Indiana TAMMY BALDWIN, Wisconsin J. RANDY FORBES, Virginia ANTHONY D. WEINER, New York JOHN R. CARTER, Texas BLAINE MERRITT, Chief Counsel DAVID WHITNEY, Counsel JOE KEELEY, Counsel MELISSA L. MCDONALD, Full Committee Counsel ALEC FRENCH, Minority Counsel (II) VerDate 0ct 09 2002 16:32 May 13, 2004 Jkt 089266 PO 00000 Frm 00002 Fmt 5904 Sfmt 0486 G:\WORK\COURTS\022404\92119.000 HJUD1 PsN: 92119 C O N T E N T S FEBRUARY 24, 2004 OPENING STATEMENT Page The Honorable Lamar Smith, a Representative in Congress From the State of Texas, and Chairman, Subcommittee on Courts, the Internet, and Intel- lectual Property .................................................................................................... 1 The Honorable Howard L. Berman, a Representative in Congress From the State of California, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property .................................................................... 3 WITNESSES Honorable Marybeth Peters, Register of Copyrights, Copyright Office of the United States, The Library of Congress Oral Testimony ..................................................................................................... 5 Prepared Statement ............................................................................................. 7 Mr. Fritz Attaway, Executive Vice President for Government Relations and Washington General Counsel, Motion Picture Association of America (MPAA) Oral Testimony ..................................................................................................... 12 Prepared Statement ............................................................................................. 14 Mr. David K. Moskowitz, Board Chairman, Senior Vice President and General Counsel, EchoStar Communications Corporation, on behalf of Satellite Broadcasting and Communications Association (SBCA) Oral Testimony ..................................................................................................... 16 Prepared Statement ............................................................................................. 18 Mr. Robert G. Lee, President and General Manager, WDBJ Television, Inc., on behalf of National Association of Broadcasters (NAB) Oral Testimony ..................................................................................................... 21 Prepared Statement ............................................................................................. 23 APPENDIX MATERIAL SUBMITTED FOR THE HEARING RECORD Prepared Statement of the Honorable Howard L. Berman, a Representative in Congress From the State of California .......................................................... 55 Prepared Statement of the Honorable Bob Goodlatte, a Representative in Congress From the State of Virginia .................................................................. 56 Letter to the Honorable Lamar Smith from Marilyn Bergman, the American Society of Composers, Authors and Publishers (ASCAP), and Frances W. Preston, Broadcast Music, Inc. (BMI) ................................................................ 57 Letter to the Honorable Lamar Smith from Patricia Schroeder, President and CEO, Association of American Publishers (AAP), and Ken Wasch, Soft- ware & Information Industry Association (SIIA) .............................................. 59 Prepared Statement of the Association of Public Television Stations (APTS) ... 61 (III) VerDate 0ct 09 2002 16:32 May 13, 2004 Jkt 089266 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 G:\WORK\COURTS\022404\92119.000 HJUD1 PsN: 92119 VerDate 0ct 09 2002 16:32 May 13, 2004 Jkt 089266 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 G:\WORK\COURTS\022404\92119.000 HJUD1 PsN: 92119 REAUTHORIZATION OF THE SATELLITE HOME VIEWER IMPROVEMENT ACT TUESDAY, FEBRUARY 24, 2004 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY, COMMITTEE ON THE JUDICIARY, Washington, DC. The Subcommittee met, pursuant to call, at 4:05 p.m., in Room 2141, Rayburn House Office Building, Hon. Lamar Smith (Chair of the Subcommittee) presiding. Mr. SMITH. The Subcommittee on Courts, the Internet, and Intel- lectual Property will come to order. Today’s hearing is on the reau- thorization of the Satellite Home Viewer Improvement Act. I am going to recognize myself and the Ranking Member for opening statements, and then we will look forward to the testimony of our witnesses today. The purpose of today’s hearing is to assess the Satellite Home Viewer Improvement Act, SHVIA, to begin formal consideration of what changes, if any, Congress should make to this law as we evaluate how and whether to reauthorize the act. Since its enactment in 1999, the Satellite Home Viewer Improve- ment Act has provided consumers greater access to broadcast net- work programming using their satellite dishes. Today’s hearing will mark the first serious reexamination by this Congress of the many issues and interests that were involved in the enactment of the original legislation 5 years ago. The Satellite Home Viewer Improvement Act and its predecessor, the Satellite Home Viewer Act, have clearly succeeded in helping direct broadcast satellite providers deliver multi-channel video pro- gramming to millions of American consumers. Barely a decade old, the direct broadcast satellite industry has experienced remarkable growth. Over the last 5 years, the industry has more than doubled its number of customers and now serves in excess of 20 million households. Although a cable company remains the largest distributor of multi-channel video programming in the U.S., two satellite pro- viders, DirecTV and EchoStar, now serve as the second and fourth largest distributors of television programming. While there are a number of significant provisions to the Sat- ellite Home Viewer Improvement Act, two provisions of the law will expire on December 31, 2004, unless Congress acts to provide an extension. These provisions are known as the distant network sig- (1) VerDate 0ct 09 2002 16:32 May 13, 2004 Jkt 089266 PO 00000 Frm 00005 Fmt 6633 Sfmt 6601 G:\WORK\COURTS\022404\92119.000 HJUD1 PsN: 92119 2 nal compulsory license, sometimes referred to as the grade B grandfathering provision, and the copyright compulsory license. By providing a distant network signal license, Congress intended to ensure that Americans who were not able to receive an accept- able over-the-air local network signal would have access to network programming by satellite. As part of this license, Congress agreed to grandfather certain satellite customers who had been receiving distant network signals illegally, so long as the satellite company could demonstrate that their customer was unable to receive a strong local signal. Satellite industry proponents insist that the distant signal provi- sion ought to be extended and that a decision not to do so could cause several hundred thousand satellite customers to lose pro- gramming they have been receiving. Local broadcasters who serve communities with free over-the-air and digital programming believe the distant signal provision un- dermines the value of their licensing