AT&T’s Misleading STELAR Campaign Does a Disservice

AT&T-owned DirecTV has launched a misleading on-air campaign warning viewers they are “at risk of losing your TV channels”
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Nearly 30 years ago, Congress passed a bill representing a temporary fix to copyright law to boost competition to the cable industry. The bill — now known as STELAR — provided for a “distant signal license” that allowed fledgling satellite TV companies to deliver ABC, CBS and NBC programming to households unserved by local TV stations.

Gordon Smith during the NAB Show 2019 session "Beyond the Briefing Room: Tales from the White House Beat"

NAB president and CEO Gordon Smith

This legislation was never intended to be permanent — indeed, Congress set the bill to sunset after five years. However, because of lagging efforts by the satellite industry to carry local TV stations in all 210 television markets, Congress has continued to renew the distant signal license.

Now, with the latest iteration of this bill set to expire at the end of the year, AT&T-owned DirecTV has launched a misleading on-air campaign warning viewers they are “at risk of losing your TV channels” unless the legislation is renewed by Congress. Viewers, including those in unaffected areas such as the Washington, D.C., market, have reported turning on their DirecTV systems and being “auto-tuned” to a screen directing them to contact Congress in support of STELAR’s renewal.

These scare-tactic messages appearing on the TV screens of DirecTV customers are disingenuous at best and deceptive at worst. The truth is there is no reason for AT&T and DirecTV to grossly mislead most of its subscribers. That’s because the vast majority of DirecTV customers face no impact whatsoever from STELAR’s expiration.

Today, the number of locally unserved households for the five major television networks has dropped to fewer than 500,000 (or less than 0.5% of total U.S. households). Indeed, the U.S. Copyright Office — the expert federal agency on copyright issues — supports expiration of STELAR, and rightly believes that a free-market solution will protect the dwindling number of unserved DirecTV homes from losing access to broadcast programming.

For most of these relatively few remaining households, DirecTV can easily ensure that its viewers won’t lose access to broadcast network programming when STELAR expires. They can simply deliver on their decade-old pledge to carry all local TV stations in every television market. Today, that pledge remains unfulfilled in 12 U.S. TV markets where it refuses to invest in carriage of local TV stations. There is no longer any technical justification for this anti-consumer decision to deprive viewers of local news, weather and emergency information.

It is long past time for DirecTV to fulfill its decade-old promise and provide every subscriber with their local TV station signals. That way, DirecTV viewers from Maine to Montana, and from Kentucky to Texas, will be able to watch local TV station affiliates rather than piped-in New York and Los Angeles programming from thousands of miles away.

DirecTV is doing a serious disservice to both its customers and to Congress by running these misleading messages. We urge AT&T and DirecTV to reconsider airing alerts that only confuse their viewers, and to work with local broadcasters to ensure that all DirecTV customers receive their network programming from local TV affiliates.

Tim McKone, executive VP of federal relations for AT&T, responded to Smith's criticism late last week, which was initially leveled in a letter to AT&T CEO Randall Stevenson:

Dear Senator Smith:

I write in response to your September 12, 2019, letter to Randall Stephenson, AT&T Chairman and CEO, which you released to the media that afternoon.

Consumers need Congress to modernize the outmoded television regulatory regime, designed during the monopoly cable era of the late 1980s and adopted in 1992. As it has in the past, Congress should take advantage of the renewal of STELAR[1]to reform current law, which provides local broadcasters unnecessary special protections that they have used to demand skyrocketing programming fees and engage in blackouts – all to the detriment of TV consumers. Fortunately, for the first time, bipartisan leaders of Congress, Representatives Eshoo and Scalise, have come together to do just that. The Modern Television Act (H.R. 3994) would help end broadcaster blackouts, improve consumer choice, and lead to renewed investment. 

Indeed, contrary to your assertions, it is essential for Congress to renew STELAR. Absent renewal, 870,000 customers, most of whom are in rural America and served via the distant signal license, could lose access to their network channels.[2] For many of these customers, local broadcasters (your members) do not provide them an over-the-air signal, while others are RV enthusiasts, long-haul truckers, and tailgaters, who rely on the distant signal license to provide them mobile access to broadcast networks. 

Moreover, without the provisions of STELAR that require broadcasters to negotiate in “good faith,” local broadcasters could more freely engage in blackouts that needlessly deprive consumers their programming. This is not a theoretical risk. Last year, a majority of DIRECTV customers lost broadcast network programming due to blackouts.That trend is simply unsustainable and expiration of the good-faith requirements would make this bad situation even worse. 

Finally, I must correct your claim, which you repeatedly make, about a merger commitment made by one of your member companies when they purchased DIRECTV. News Corp (their successor company FOX Television remains on the NAB Board) volunteered to serve all 210 television DMAs with an integrated antenna solution that involved harnessing local broadcasters’ spectrum, as well as launching additional markets via satellites. We are meeting that commitment today. DIRECTV serves 198 markets through our satellites. In 12 markets, we offer local broadcasts through an antenna, in which case the customer’s viewing experience is identical to the satellite service; the channel appears in the programming guide like all other channels; programming can be recorded with a DVR; and we offer consumers a $3 discount off all DIRECTV packages. Notably, consumers in those markets have never endured a local broadcaster blackout because your members cannot withhold their over the air signals.

We look forward to working with Congress, NAB, consumer groups and independent channels on a new video law. We offer to join you in a productive, fact-driven debate that, when complete, will benefit all consumers.

Sincerely,

Tim McKone

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