Senate Commerce Takes on STELA

Hearing features host of possible flash points in must-reauthorize bill
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The Senate Commerce Committee Tuesday launched its STELA reauthorization effort with plenty of issues to hash out and numerous signals that the process would be anything but smooth.

National Cable & Telecommunications Association President Michael Powell and National Association of Broadcasters President Gordon Smith sparred over joint sales agreements and the must-buy tier, while Powell and TiVo President Tom Rogers were in opposite corners on getting rid of the FCC set-top integration ban.

Sen. Claire McCaskill (D-Mo.) took off on MVPD bills, saying she had discovered a high speed charge she was still paying even after it had become the baseline speed. When she called to ask why she was still paying extra, she was told it was because she hadn't called to change it. She did not identify the provider.

Sen. Ted Cruz got FCC Media Bureau Chief Bill Lake to promise that the FCC would not revive the discredited Community Information Needs study, but could not get assurances about a way to reduce the satellite bill's complexity, rather than add to it.

Most of the witnesses supported renewing the Satellite Television Extension and Localism Act (STELA) legislation so that the approximately 1.5 million viewers, who get distant signals to compensate for a lack of one or more viewable network affiliated TV station signals in their markets, would not lose access.

Smith said broadcasters would be just as happy if STELA were allowed to sunset and that it was providing an excuse for satellite operators to import distant signals rather than having to boost their local station signal delivery, thus avoid paying additional retrans fees.

DirecTV executive VP Michael Palkovic countered that satellite operators were delivering almost all the local signals--Dish in 100% of markets, DirecTV in more than 90%--and had spent billions to do so. The idea it had not built out the rest to avoid paying retrans was off base, he said.

Smith called STELA a chance every five years to "harpoon broadcasters as they swim by."

In this case the harpoons include retransmission consent reforms that Powell and Palkovic were both pushing for, which includes no coordinated retransmission consent negotiations (Powell) and no more blackouts (Palkovic).

Powell had three basic asks from STELA: 1) no coordinated retrans; 2) Get rid of the set-top integration ban; 3) get rid of the must-buy requirement.

TiVo's Tom Rogers, who suggested some of his best friends are cable operators--he has founded cable channels and claims 14 of the top 20 operators as clients--said the FCC must not sunset that integration ban before it comes up with a successor that cable operators are committed to support.

There was only brief mention of orphan counties and the Nielsen DMA system that creates those situations--viewers in one state included in the gerrymandered DMA of another.

Broadcasting got plenty of praise for the value of its programming since access to their signals is the primary focus of the bill. Sen Mark Pryor (D-Ark.), chairman of the Subcommittee, said that the key to the legislation was what was best for consumers, which he suggested was the broadcast programming, relevant news, sports, and "timely weather warnings that can ultimately save lives."

Smith pointed out that the value of local programing was the reason NAB wasn't so high on renewing the blanket license allowing distant signals from one of the coasts to substitute for those local signals, particularly if there is a tornado bearing down on a local community while a viewer is getting news from one of the coasts.

Smith said broadcasters were willing to work out orphan county issues, but that it took two.

Powell and Smith got into it a bit over joint sales agreements, though Powell somewhat reluctantly. Powell has said NCTA took no position on JSAs. Smith said he thought it was unfair that broadcast joint sales agreements had been targeted by the FCC, while cable's joint sales had not been.

Powell said that the fundamental difference was that the Justice Department had weighed in and said the cable interconnects were not anticompetitive because they were among companies not competing with each other, while broadcasting's were among stations in a market that were otherwise supposed to be competing. He did say that the FCC should give clear notice of what it is going to do, which is something broadcasters say the FCC did not do with JSAs, almost by definition.

Smith pointed out that the FCC had allowed some 85 JSAs that would now have to be unwound. Lake countered that the FCC had not passed judgment on any of those except ones involved in transactions. He also pointed out that the FCC had given broadcasters two years to unwind, just as it did radio operators when it adopted similar JSA attribution rules in the 1990s.

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