Recap of Senate Judiciary Committee Hearing on STELA Reauthorization

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On Wednesday, the Senate Judiciary Committee held a hearing on the reauthorization of the Satellite Television Extension and Localism Act (STELA).  This Act is the most recent version in a series of authorizations dating back to the 1980s that governs the carriage of broadcast signals by satellite television providers.  The current Act contains several provisions that are set to expire at the end of 2014, and this hearing addressed whether or not provisions in this Act should be extended and for how long.

What’s unique about the STELA reauthorization is that it involves portions of both the Communications Act and the Copyright Act, thus falling within the jurisdiction of the Commerce and Judiciary Committees, respectively.  Two weeks ago, the House Energy and Commerce Committee’s Subcommittee on Communications and Technology held its own STELA hearing to address issues pertaining to retransmission consent – the ability of satellite providers and other MVPDs to obtain consent from broadcasters before carrying, or retransmitting broadcast signals.  The subcommittee also began discussion on Chairman Greg Walden’s (R-OR) draft legislation amending the Act.  The same committee held a markup of Walden’s legislation earlier this week.  On Wednesday, the Senate Judiciary Committee covered the provisions that fall under the Copyright Act, primarily the distant signal compulsory license that’s set to expire.  This distant signal license allows satellite carriers to provide an out of market station to consumers that are un-served by their local broadcaster.  An estimated 1.5 million satellite TV subscribers receive distant signal services today.

PK’s John Bergmayer was one of four witnesses called to testify at yesterday’s hearing.  The others included representatives from DISH Network, the National Association of Broadcasters (NAB), and the Writers Guild of America, West.  The general debate over STELA is whether or not it needs to be reauthorized, for how long, and if this reauthorization should be a “clean” reauthorization where Congress simply votes to reauthorize the Act with no changes, or whether it should be a vehicle for broader reforms in the video marketplace.  Members of Congress agree that the regulations governing the video marketplace are outdated and we are finally seeing more Members introduce pro-consumer alternatives to the current system.

PK offered two recommendations as to how Congress can make simple reforms to STELA that would benefit consumers.  First, Congress can protect consumers from rising incidences of programming blackouts due to retransmission consent negotiations.  These negotiations between broadcasters and MPVDs (satellite providers) put consumers at a disadvantage.  A gradual phase-out of the retransmission consent regime combined with the elimination of the compulsory copyright licenses would streamline the system and eliminate statutory barriers. Second, Congress should allow the FCC to modify the Designated Market Areas (DMAs) for broadcast TV carriage on satellite, as it can already do with cable.  We believe that Congress should empower the FCC to make these changes.

Additionally, PK reminded the Committee that online video can provide competition that the video marketplace sorely needs and that Congress can help spur this competition in three ways:

  1. Clear away some of the outdated rules that hinder the video marketplace.
  2. Extend successful policies providing statutory protection to online video providers the same as to cable and satellite providers
  3. Protect Internet openness by encouraging the FCC to examine whether discriminatory data caps hold back online video competition and whether large ISPs are using network interconnection agreements anti-competitively. 

The conversation before the Senate Judiciary Committee on Wednesday treaded familiar territory, and most observers expect STELA to be reauthorized in some form or another.  The larger question is whether or not this mandatory reauthorization will be a vehicle for unrelated video reforms. The relatively straightforward Senate Judiciary Committee hearing from Wednesday contrasted with the more wide-ranging hearing in the House Energy and Commerce Committee from two weeks ago, which focused on Chairman Walden’s discussion draft of video reforms.  There are multiple troublesome provisions in Chairman Walden’s bill, but most concerning is the inclusion of Rep. Bob Latta’s (R-OH) H.R. 3196, Consumer Choice in Video Devices Act, which would repeal the integration ban regulating the technology behind cable set-top boxes.  We’ve expressed our concerns about this bill in its standalone version and we’re disappointed by it’s inclusion into Walden’s STELA draft.

We believe Congress should reauthorize STELA indefinitely, which would not prevent Congress from revisiting the provisions at a later date or taking up other video reform measures.  The original success of STELA was that it introduced a new player into the video marketplace in the form of satellite television, allowing consumers to have some choice for programming and providers.  Congress and the FCC should continue to protect consumers by promoting new and innovative means of competition, but unrelated, controversial amendments that would harm consumer choice and competition have no place in this reauthorization.

Photo by Flickr user Joey Lax-Salinas.

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