Can we draw the following hypothesis from the context (see options)? 

Context:

No. What we were saying is, if Congress wants to permit restoration of films, for example, an issue that's been well briefed here, Congress can say, if you restore the film, then the restoration gets a copyright so long as it satisfies originality as outlined in Feist, and it gets a copyright for a period of time. But this Court's opinion in Graham and in Feist made clear that it could not extend copyrights to works in the public domain. The Government doesn't concede that, but we stand on that as a way of understanding why this Court --

Hypothesis: The government makes decisions regarding copyright
pick from the following. [i] Yes. [ii] It's impossible to say. [iii] No.
[i]