[Congressional Record Volume 140, Number 149 (Thursday, December 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: December 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 THE SATELLITE HOME VIEWER ACT OF 1994

  Mr. HATCH. Mr. President, before the 103d Congress finishes its 
business, I would like to comment on one of the important bills passed 
by this body, but one that has not, in my judgment, received sufficient 
attention. I am referring to the Satellite Home Viewer Act, S. 2406, 
which passed both Houses of Congress in early October and which has 
already been signed into law by President Clinton.
  I was pleased to be a cosponsor of that legislation along with my 
good friend Senator DeConcini, Senator Leahy, Senator Thurmond, and 
many others. Its principal provision was an extension of the satellite 
compulsory license, section 119 of the Copyright Act. That provision 
was scheduled to expire at the end of this year. It will now expire at 
the end of 1999. The importance of this provision lies in the fact that 
it ensures uninterrupted reception of basic television service to many 
Americans who depend on the satellite dish for their television 
reception. This means most, of course, to our many rural citizens. I 
know for example that in my home State of Utah there are at least 
28,000 satellite dishowners who cannot receive television signals in 
the normal over-the-air manner that most of us enjoy. For them, 
extension of the satellite compulsory license was necessary at the 
time, if they were to continue to receive such programming at an 
affordable price.
  I must at this point, Mr. President, note that I have long been an 
opponent of compulsory licensing as a general proposition. And so it 
was with some reluctance that I came to cosponsor S. 2406. Instead, I 
have always believed that our free market system and our copyright laws 
are strong enough, and flexible enough, to permit our television and 
cable industries to clear copyrights without the need for Government 
regulation.
  There was, to be sure, a point in time--some 20 years ago--when the 
cable industry did in fact need the Government assistance which the 
cable and satellite compulsory licenses provide. But that time has 
clearly passed. Neither the satellite license nor the cable compulsory 
license--section 111 of the Copyright Act--was ever intended to 
subsidize successful companies in perpetuity. However, it became clear 
as we approached the end of the satellite license's first 5-year 
experiment that all parties involved in the home delivery of satellite 
signals needed an acceptable transition to the marketplace, and the 
final text of S. 2406 provides just such a transition.
  I therefore commend my colleagues on the Patent Subcommittee for 
supporting the extension of the satellite compulsory license through 
1999. It is my hope that this bill will promote a transition to the 
marketplace by insuring that Government established compulsory license 
rates will reflect the fair market value of the programming on all 
stations, as specified in the text of the bill.
  The decision to seek a compulsory license fee based on ``fair market 
value'' under S. 2406 was the result of many compromises, which is the 
way that most legislation, particularly in the copyright field, is 
crafted. And, as is often the case with legislative compromises, not 
all parties are entirely satisfied with the outcome. But I am confident 
that the legislative language contained in the final text of S. 2406 
makes sufficiently clear the intent of the legislators who voted on it 
that the arbitration panel which must carry out the mandate of S. 2406 
will have no need for recourse to the remarks of Senators such as 
myself when they set about the business of determining the fair market 
rates required under the law.
  One salutary benefit of the compulsory license is its ability to 
minimize the problem of excessive transaction costs. But the license is 
fairly criticized for failing to mandate rates that clearly represent 
the true market value of the programming. I hope that the new 
arbitration panels established under S. 2406 will develop the practice 
of encouraging true negotiation among the parties and that this will 
ultimately lead to a time when the license itself is no longer 
necessary. In establishing market rates, the arbitration panels must 
weigh all relevant information supplied by the parties. Although 
royalty rates paid by cable operators will certainly be considered, 
their significance will no doubt be affected by the fact that cable 
charges to subscribers are regulated by the FCC whereas satellite 
carriers are not subject to rate regulation.
  In summary, Mr. President, I would simply restate my desire that 
license fees which reasonably reflect the true worth of programming be 
recognized as the ultimate goal of our legislative efforts in this 
area. That is the only fair way that we can honor America's creative 
community and protect their valuable, hard-earned copyrights. It may be 
that the inflexibility written into the cable compulsory license will 
prevent us from reaching that goal under our current legislative 
framework. If so, I will not hesitate to suggest again, as Senator 
DeConcini and I did in the 102d Congress, that it may be time for a 
complete overhaul of all compulsory licenses under the Copyright Act.

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