Cable operators and broadcasters were skillfully represented at the House Communications Subcommittee STELA reauthorization hearing Wednesday as Republicans and Democrats heard from various stakeholders on a first draft of the legislation.
National Cable & Telecommunications Association President Michael Powell sparred with National Association of Broadcasters TV board chair Marci Burdick over coordinated retransmission consent, joint sales agreement limits, and must-buy tier issues in the almost two-hour hearing, but Burdick's strongest criticism was aimed at the Justice Department.
Weighing in on DOJ's comments to the FCC in support of making joint sales agreements attributable, Burdick took the gloves off. She said that the comments had "lifted" sections from 1997 radio JSA comments, that they never mentioned cable or the Internet as competitors for local advertising, and, worst of all, said it had reviewed several sharing agreements for anticompetitive harms, did not find them, but still drew a bright line, suggesting the FCC limit JSAs.
She called the comments disingenuous, sloppy, and said they could not be relied on as documents of fact. She said that coordinated retrans agreements have never been mandatory at her stations, and that in 10 years only one MVPD had asked for separate negotiations.
For his part, Powell said that coordinated retrans was producing collusive pricing with antitrust implications, and that the draft's prohibition on them among independently owned stations was a good step, though he also added that NCTA would be OK with prohibiting them among two owned stations in a market as well.
Burdick countered that if the Committee was going to look at coordinated retrans among broadcasters, it should also look at it on the other side. She pointed to negotiations where cable operator members of the American Cable Association had said they needed to run a deal by ACA lawyers.
Burdick pointed to sharing agreements her stations had entered into and said they had created more news, more jobs, and more public service. Matt wood of Free Press said that one person's synergies was another's layoff, and pointed to job losses at Sinclair stations. He also suggested that he had a problem when news sharing agreements meant sharing people and stories. Burdick said Wood was starting from a false premise if the thought that the absence of sharing arrangements would leave two, separate, robust newsrooms.
As expected, Democrats took issue with the Republican-backed STELA draft proposals that would eliminate the FCC's ban on integrated set-tops and limit FCC action on JSAs. Rep. Anna Eshoo (D-Calif.), ranking subcommittee member, said the committee needed to drop or redraft those provisions and Rep. Henry Waxman (also D-Calif.) said he could not support the bill in its present form, though he did say that if the House could unanimously pass bipartisan FCC process reform, as it did March 11, he thought they could come up with compromise STELA legislation.
Powell pledged NCTA's continued support of CableCARDs if the integration ban were lifted, pointing to the 44 million in use. But he also said lifting the ban would allow cable operators to provide a lower-cost, more energy efficient alternative.
Powell has said in his testimony that the cost of the integration ban to the cable industry has exceeded $1 billion.
Eshoo asked, if the ban were lifted--which she opposes doing--whether cable operators would return that to consumers in the form of lower cable bills. Powell said he would not tell operators how to use that money, but said it would certainly be invested back into their networks.
Powell also argued that there has been an explosion of new devices from Netflix, Roku, on iOS and Android that are meeting market demand without the need for additional intervention.
Powell said the must-buy requirement had outlived its usefulness, while Burdick countered that it was one of the benefits to go along with the innumerable obligations of being heavily regulated by the government.
It was clear from the hearing that the first STELA draft will not be its last. Rep Doris Matsui (D-Calif.) made the point that the process had not started off with a bipartisan bill.
Next up for STELA will be a hearing March 26 in the Senate Judiciary Committee, according to multiple sources.
