The terms modality and modal harmony mean different things. Modality refers to the diatonic modal character of a composition. Ron Gorow(Hearing and Writing Music) explains modal harmony however as being the harmonisation of any modal tone with any chord that contains that tone - whether it belongs in the mode or not. Interesting..I always thought that modal harmony was like, the way McCoy Tyner would voice lead diatonic 4ths throught the dorian scale - but apparently not exclusively. There are plenty of examples in Gregorian Chant for example where the modal centre remains ambiguous. I can hear a nice overtonal balance in the Chris Isaak's tune - which gives it that modal ambiguity. I think OP's original point is alluding to where the modal root note is right?...not so much about what different modes that are possible on each chord..... Anyway the guitar line starts on F# on a Bm chord and descends by step through the first tetrachord of Bm to a B on the E chord. Both key melody notes are 5ths - which balances the 'function' of each chord to me. But the melody also feels Bm to me - simply because of its motion from dominant to tonic - so we get this melodic dominant to tonic with the counterweight of a harmonic i- IV (or if v-I the melody would be 9th to 5th) I think Strat's point about Bm -E not having to equate to a ii V is absolutely right - except that in this case the E gets the lions share of the bar lengths - so here's another question. Does it have to resolve? I hear the progression as Bm - but throwing its weight toward the E in order to foil a typical resolution - but i dont hear it resolving on E at all. bTW Strat, I always thought it was the chord at the end, not the melody note that determined the key - otherwise wouldnt everything end on a root note? I may have misunderstood that.