STELA Could Redefine Local Satellite Signals

FCC’s “antenna” definition may remake ad rates, retrans

By John Eggerton -- Broadcasting & Cable, 7/19/2010 12:01:00 AM

Is STELA easy on the eyes? Well, you might say that depends on who the beholder is. And broadcasters would be wise to look closely.

The STELA in this case is, of course, the Satellite Television Extension and Localism Act, which was finally passed into law in May after a pretty tough trip through Congress. STELA’s main clause is about providing local channels through satellite television. And while it might sound an awful lot like boilerplate, how the FCC defi nes “antenna” in its implementation of the bill could have a transformative effect on ad rates and retrans fees for local TV stations across the country.

The FCC used to define a subscriber ineligible to receive an out-of-market affiliate via satellite as someone who could get an acceptable in-market version using a rooftop antenna, one that the FCC traditionally calculated at 30 feet. The new bill, however, states that an unserved household is one that can’t receive an over-the-air signal via an antenna, period. How the FCC defines that word—a rooftop unit, or even a tin-foil loop in the basement—could have big implications.

“This could lead to a significant change in the provision of distant signals and potentially eat away at a station’s protected service area,” stated law firm Davis Wright Tremaine in an advisory.

David Donovan, head of the Association for Maximum Service Television, would only say that his group is “examining the provision now and will look to see what the engineering implications are.”

A veteran broadcaster speaking on background said he expected the direct- broadcast satellite folks to “outlobby” broadcasters and “end up with a method that will unwind the leverage for retrans.”

“My concern is the new definition of ‘unserved homes,’” he said. “These homes are not required to be provided in-market stations, unless the home cannot receive the OTA signal via an indoor loop located in the basement. Rather, these homes can be sold a distant signal. The DBS operators get distant signals for free. Therefore, they are incented to provide a distant signal, rather than pay stations for an in-market signal. Further, as a bargaining chip in a retransmission negotiation, they can threaten to reduce the numbers of subs to which they provide local signals by redefi ning ‘unserved homes.’”

One broadcast attorney wasn’t so sure: “I can’t imagine the FCC would construe that the new law would eliminate the outdoor antenna because it would be impossible to have a standard that could be enforced.”

Another veteran broadcast attorney who asked not to be identified suggested that the FCC would have an incentive to define an acceptable signal by an indoor loop antenna, one that could allow more distant signals into a market and potentially weaken local stations, as a spur to spectrum reclamation.

Weakening a station, he says, would make it more likely for the station to “take the money and say yes to an auction. All these issues get filtered through the chairman’s first question, which will be: ‘How is it going to affect my being able to push people to give up spectrum?’”

FCC spokesman David Fiske had no comment on the characterization, but said the FCC is working on a definition of “unserved.”

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton