Eshoo and Scalise Video Bills Face, Create Challenges, Lobbyists Say

"Clearly, these two pieces of legislation are utterly inconsistent with each other, and we find it sad that pay TV companies who built their broadband, voice and video businesses on the backs of local TV signals now balk at the notion of paying a fair market rate for the most-watched programming on television,” NAB President Gordon Smith said in opposing both bills. “We will constructively engage with policymakers seeking to improve upon a retransmission consent law that is now working over 99 percent of the time."

Meanwhile, NCTA President Michael Powell pointed to differences in the bills but said “each independently highlights what is quickly becoming a growing consensus -- namely, that laws enacted over twenty years ago are out of sync with the realities of today’s video marketplace and in many cases serve to inhibit innovation, thwart fair competition, and harm consumers.” NCTA welcomes “an examination of a retransmission consent regime that is increasingly fractured and in need of some repair,” Powell said, calling the bills “responsible."

House Communications Subcommittee ranking member Anna Eshoo, D-Calif., introduced the CHOICE Act with Rep. Zoe Lofgren, D-Calif. Rep. Steve Scalise, R-La., joined with Rep. Cory Gardner, R-Colo., to introduce the Next Generation Television Marketplace Act. Eshoo’s office flagged the bill’s supporters -- Dish Network, Time Warner Cable, DirecTV, USTelecom, Verizon, CenturyLink, the American Cable Association, Free Press, Public Knowledge, Starz, NTCA, Charter Communications and others. Both Eshoo and Scalise cited the efforts of one another in their news releases announcing their bills and express a willingness to work together.

A broadcast industry lobbyist views the bill introductions more as a public relations stunt than any sort of legislative threat, he told us. The bills were no surprise, given Scalise has introduced a version of his bill before and Eshoo had released a draft of her bill back in early fall, the lobbyist said. The lack of co-sponsors on both bills is significant, the lobbyist said, citing that both bill sponsors had pushed for co-sponsors in the last two weeks before the introductions. It’s unlikely Democrats will support the Scalise bill or Republicans the Eshoo bill, and unlikely that Scalise and Eshoo will come together, the lobbyist said. The two bills are very different, Scalise’s quite deregulatory and Eshoo’s adding regulation, he added, pointing to how complicated it was for companies to issue statements in support of both following their introduction. Scalise tried to find a Senate sponsor for the bill but failed, the lobbyist said.

Scalise expects a senator to take the lead on the bill soon, his spokesman told us, citing great interest in that chamber: “The House is where the action is on video reform, so Mr. Scalise wanted to get the bill out there again and is confident the strong policy will result in a Senate sponsor soon.” Scalise didn’t conduct a “canvassed effort” to acquire House co-sponsors but expects more co-sponsors to sign on now that the language has been finalized, the spokesman said, calling the bill “a starting point."

Communications Act rewrite plans threw another wrench into the prospects of these two bills, lobbyists have told us. House Commerce Republican leadership recently announced its intentions to hold hearings and issue white papers on an update in 2014 and introduce legislation in 2015. When Congress embarks on the rewrite, it’s no question variations of these proposals will be part of the discussion, the broadcast lobbyist said. Communications Subcommittee Chairman Greg Walden, R-Ore., has stressed his preference for a “clean” reauthorization of the Satellite Television Extension and Localism Act, due by the end of 2014, so advocates of video law updates would have to either address the broader rewrite process or introduce such standalone bills, the lobbyist said.

Scalise and Eshoo together amount to a serious force now, said a telecom lobbyist who doesn’t oppose the bills. It’s no secret they have been talking and coordinating and may amount to a loss of control for Walden and Commerce Committee Chairman Fred Upton, R-Mich., said the lobbyist. He described their coordinated bill introduction as a “full-frontal response” to the idea that retrans updates will have to wait for a broader Communications Act rewrite, happening later than STELA reauthorization. Both the Eshoo and Scalise bills have a common ground despite different approaches, and the question is how much they can work together, the lobbyist said. Walden and broadcasters may be confronted with the idea that a narrow reauthorization of STELA is not quite so possible, the lobbyist added. A different communications industry lobbyist told us in early December that these bills, which she had expected to be introduced, would flounder in 2014 amid the Communications Act rewrite efforts (CD Dec 5 p1). She also described the bill sponsors as actively looking for co-sponsors at the time.

Stifel Nicolaus outlined the “different approaches on retransmission consent,” in a research note. In spite of the differences between Eshoo and Scalise, “both lawmakers vowed to work with each other,” Stifel said. “We continue to believe the odds are against Congress revising the retrans law in 2014,” said analyst Paul Gallant of Guggenheim Partners in a research note. “But we also acknowledge there is clearly congressional interest in this issue, and we do not rule out a scenario in which Congress does take some action on retrans in 2014.” Gallant pointed to Walden’s preference for clean STELA reauthorization and said retrans updates would likely have to happen through a broader Communications Act rewrite, if at all. (jhendel@warren-news.com)