By John Quale, Brian Weimer, and Mick Tuesley

With the Satellite Home Viewer Improvement Act (SHVIA) set to expire on December 31, 2004, it is time again for Congress to address the many challenging issues raised by satellite carriage of broadcast signals. SHVIA had its genesis in a 1988 congressional rewrite of trademark and copyright law, which included the Satellite Home Viewer Act of 1988 (the 1988 Act). The 1988 Act added an interim compulsory copyright license to the previous copyright scheme to enable satellite providers to carry signals of distant network broadcast stations to unserved subscribers. In 1994, Congress reauthorized and tweaked the interim copyright license to prevent its expiration. Again, on the eve of its expiration, Congress extended and further modified the 1988 Act with SHVIA in 1999.

SHVIA significantly altered communications and copyright law in an effort to promote competition between cable and satellite companies while simultaneously protecting the over- the-air broadcast system. SHVIA, for the first time, enabled satellite companies to provide local broadcast signals to subscribers in the local station’s market (so-called "local-into-local" service). SHVIA also extended for five years the right of satellite companies to provide "distant" network broadcast signals to eligible subscribers.

Congress has devoted a great deal of attention to the reauthorization of SHVIA. In January, Senator Orrin Hatch introduced legislation that would simply extend SHVIA until 2009 without substantive modification. The House Committee on Energy and Commerce (CEC) has also conducted two hearings on the subject over the last several weeks and proposed amendments as part of draft legislation. The draft bill circulated by congressional staff is entitled the "Satellite Home Viewer Improvement Reauthorization Act." If the views of the various industry participants at the CEC hearings are any indication, most find the proposed bill an acceptable compromise.

In addition to renewing the statutory license for local-into-local, the proposed bill would extend the requirement that broadcast stations negotiate in good faith for retransmission consent until January 1, 2010. (The bill would for the first time add a similar requirement for cable and satellite distributors.) The proposed legislation would also require the FCC to review and revise the methods utilized to determine a subscriber’s ability to receive a local analog signal and to initiate an inquiry to determine appropriate methodologies for assessing whether a satellite subscriber can receive a broadcast television digital signal using a reasonable terrestrial antenna on or after January 1, 2007. In addition, the bill would extend for five years the unserved household exemption for distant network signals; permit satellite carriers to transmit the same out-of- market "significantly viewed" stations that cable operators can carry; and require satellite carriers to cease providing distant network signals to subscribers who can receive local-into-local signals. One of the more controversial provisions proposed in the bill, however, would require all local stations to be available on a single dish, a significant setback for Echostar, which currently employs a two-dish system in some markets. Echostar is also disappointed that the bill merely requires a study of digital signal reception and is lobbying for an amendment to the House bill that would permit it to deliver distant network signals to any household that is not yet receiving an over-the-air digital signal. Broadcasters are strongly opposed to the amendment.

Others argue that the satellite statutory copyright license should be made permanent in order to level the playing field with the cable industry (which has a permanent statutory copyright license). The satellite industry also contends the "no distant where local" provision is unnecessary in light of current marketplace considerations–most subscribers drop distant signals when they can receive local networks. While there will certainly be more revisions to the House proposal before final passage, it appears that SHVIA is on its way again to reauthorization with additional modifications to reflect the changing marketplace.

John Quale, Brian Weimer and Mick Tuesley are attorneys in the Washington, DC, office of Skadden, Arps, Slate, Meagher and Flom LLP. Quale’s email address is [email protected]; Weimer’s email address is [email protected]; and Tuesley’s email address is [email protected]