House May Take the Lead On STELA Legislation - Broadcasting & Cable

House May Take the Lead On STELA Legislation

Satellite television act could have better shot at movement if retrans is kept out of review
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According to industry sources, the Senate plans to let the House take the lead this time around on legislation renewing—or not, as the case may be—the Satellite Television Extension and Localism Act (STELA). If so, the bill would most likely not deal with retrans or other contentious issues that could tie it up even more than it no doubt would be.

Broadcasters seek a clean reauthorization of the bill—if the alternative is a referendum on retrans—while cable operators and multichannel video programming distributors are generally looking at STELA as the vehicle for what they say is needed reform.

A House Energy & Commerce Committee source confirmed on background that the plan is for the House to do the initial heavy lifting.

The Senate has historically taken the lead, though, to borrow a baseball phrase, the House seemingly hit for power the last time they took the reins on the issue, in 2010. An industry source argues that the House Judiciary Committee was responsible then for allowing Dish to get back into the distant-signal business in exchange for delivering local TV station signals to every market.

They’re In Command There

The House Energy & Commerce and Judiciary Committees and their Senate counterparts have jurisdiction over the law, which principally grants satellite operators a blanket license to deliver distant network-affiliated TV station signals to subscribers who can’t get a viewable signal from their in-market affiliate. That includes serving markets without a full complement of affiliated stations, as well as areas of a market where satellite spot beams don’t reach, and so-called orphan counties that may lack access to stations carrying nearby sports teams or news or politics more relevant to those viewers.

The act, however, also includes the FCC authority to enforce good faith negotiations in retrans disputes. Without renewal, it will expire at the end of 2014.

House Communications Subcommittee chairman Greg Walden (R-Ore.), the most active Hill voice on STELA, had signaled he was looking at working on a House draft bill starting in the first quarter of this year. The sooner the better, historically speaking: If past is prologue, Congress will need plenty of time to debate how to renew it.

Last time around, STELA was a magnet for contentious debate that pushed its renewal months past the Dec. 31, 2009 deadline, forcing the Senate to ask distributors to treat satellite operators as though they still had a compulsory license and trusting Congress to make the license retroactive when it finally did agree on a renewal.

The Copyright Office has recommended getting rid of the blanket license in favor of marketplace negotiations. The greater likelihood in the wake of the coming debate is a fairly narrow reauthorization—that is, if Walden gets his way on the issue, although a reauthorization for a full five-year term seems less likely.

The agreement on this issue in this manner would delay battles over retrans and orphan counties and instead consider those issues in the multi-year Communications Act rewrite Rep. Walden and House Energy and Commerce Committee chairman Fred Upton (R-Mich.) have teed up. It remains to be seen whether the committee’s ranking member Anna Eshoo (D-Calif.) will agree to defer the retrans battle, given that she has introduced a retrans reform bill to try to eliminate blackouts.

Over on the Senate side, look for Commerce Committee chairman Jay Rockefeller (D- W. Va.) to hold a hearing on a video reform bill he introduced last fall.

Any standalone bill is a long shot, but it was described as a way for Rockefeller to “start a conversation about the best way to nurture new, innovative online services” so they can become true competitors to cable.”

That conversation in the Senate may well extend into STELA.

BROADCASTERS HOPE AN EDGE IN AEREO FIGHT IS BEYOND QUESTION

Antsy, worried broadcasters that have battled Aereo to the highest court in the land may have gotten some good news in a single-page posting on the Supreme Court’s website.

The court has officially presented the “question” before it in the Aereo appeal, which signals the starting point of solicited briefs from both sides. That question represents broadcasters’ take on what the court should be looking at: “Whether a company ‘publicly performs’ a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet.” Broadcasters say it definitely does, and Aereo therefore should have to negotiate rights and pay for them.

Broadcast attorney Harry Cole blogged last week that the court’s presentation of the question was essentially one more tea leaf in the nonscience of predicting where the Supreme Court will eventually come down on a case, but that it was certainly better than if the court had posed the question the way Aereo did in its initial brief asking the court to settle the matter.

Aereo said the question presented should be: “Whether Aereo performs publicly…by supplying remote equipment that allows a consumer to tune an individual, remotely located antenna to a publicly accessible, over-the-air broadcast TV signal, use a remote digital video recorder to make a personal recording from that signal and then watch that recording.”

The key of course will be the court’s answer. But Cole finds some comfort in the court choosing one question over the other. “The fact that the court has now announced that the parties are to use the broadcasters’ ‘question presented’ as the starting point of their briefs…seems like good news for the broadcasters,” he said. “It suggests at least an initial willingness on the court’s part to see things the way the broadcasters see them.”

An attorney arguing the other side agrees. “[Cole] is right that it is a favorable sign for broadcasters,” said veteran public interest lawyer Andrew Schwartzman. “He’s is also right in saying this is merely a ‘tea leaf’ to read, and that litigators sometimes read too much into these things.”

Schwartzman said he would rather have the question read the other way, but he also sees it as a tough road to get to five votes for broadcasters, particularly since Justice Samuel Alito has recused himself. If there is a 4-4 tie, that would leave the status quo, which was the Second Circuit’s refusal to block Aereo.

In other less anticipatory good news for Fox and the broadcasters challenging FilmOn and Aereo, the U.S. Court of Appeals for the D.C. Circuit has granted the motion to hold off on deciding whether to lift an injunction against FilmOn from delivering TV station signals everywhere but the Second Circuit—New York— where the court refused to block the service.

The D.C. Circuit will wait until the Supreme Court has weighed in, a decision expected to come by the end of June.

According to industry sources, the Senate plans to let the House take the lead this time around on legislation renewing—or not, as the case may be—the Satellite Television Extension and Localism Act (STELA). If so, the bill would most likely not deal with retrans or other contentious issues that could tie it up even more than it no doubt would be.

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