Congress Passes STELA

Full satellite reauthorization bill passed after months of delays; renews blanket license on distant signals for another five years.

By John Eggerton -- Broadcasting & Cable, 5/12/2010 1:29:10 PM

Congress finally passed a full satellite reauthorization bill May 12 after months of delays and extensions, many over unrelated matters.

The Senate passed the bill last week, and the House passed it Wednesday on suspension (a move for noncontroversial bills). It now heads to the president's desk for his signature.

The Satellite Television Extension and Localism Act (STELA) renews for another five years the blanket license that allows satellite operators to deliver distant signals to subscribers who cannot get a viewable signal from their local affiliate.

Actually, one of those operators, Dish, has had to deliver those signals through a third party by order of a court. But this bill allows Dish to get back into the distant-signal business itself in exchange for its pledge to deliver local TV station signals in the two dozen or so markets that don't currently get them. "Dish Network congratulates Congress on passing the landmark Satellite Television Extension and Localism Act of 2010 (STELA)," the company said in a statement, "clearing the way for Dish Network to become the first pay-TV provider to make local broadcast stations available in every television market in the United States."

The reauthorization also resolves the so-called phantom-signal issue, in which cable operators have to calculate royalty payments on systems serving contiguous communities as though all of the subs in both were receiving the same distant signals.

NCTA has said that phantom payment sometimes can result in a several hundred-percent increase in payments for adjacent cable systems that come under common ownership.

Those issues had helped extend the debate over the bill's reauthorization last year. The bill may have ultimately wound up on the suspension calendar as a noncontroversial bill, but it sure had a hard time making it through the Congress.

The license was set to expire Dec. 31, 2009, but had to be extended with first one, then another, stop-gap measure over a number of issues. One was said to be toughening the language that let Dish back into the distant-signal business.

Then the bill was briefly held hostage to the health-care debate, then ran into problems with the pay-go rule that all bills have to identify off-sets for their expenditures. The bill collects money, actually, but an accounting issue has it paying out more to copyright holders than it brings in for some portion of the collection process.

While a 10-year version was introduced to make the bill deficit neutral, a source said the Congressional Budget Office found a way to make the five-year renewal work. At one point, the license technically expired for a few days after Congress was unable to pass an extension. That  prompted the heads of the House and Senate Judiciary committees to send a letter to copyright holders and satellite operators asking them to continue business as usual with the promise that Congress would cover that gap in a retroactive provision, which it did.