Broadcasters Up in Arms Over Initial STELA Draft

Several industry officials and lobbyists painted a broad, consistent picture of what they heard verbally, with none saying they had seen any draft legislation text yet. The bill would reauthorize STELA for five years, one telecom lobbyist said. If a multichannel video programming distributor asks to opt out of group negotiation with broadcasters in the case of JSAs and SSAs, it can, the lobbyist said, with the STELA draft’s proponents saying this doesn’t go as far as the FCC might. Broadcasters could still sell ads, handle human resources and manage other efficiencies together -- this would affect only retransmission negotiations. Within two years, cable operators wouldn’t have to include broadcast stations automatically in their basic tier, under the legislation’s provisions.

The STELA draft would also immediately repeal the sweeps-week rule and add in the language from HR-3196, which subcommittee Vice Chairman Bob Latta, R-Ohio, introduced last fall, several industry officials have confirmed. That bill proposes ending the integration ban demanding cable operators use CableCARDs instead of built-in security in set-top boxes. The bill has seven co-sponsors.

NAB will be “forced to strenuously oppose” the STELA draft as currently described “because our members are very, very concerned,” Executive Vice President Dennis Wharton told us, confirming details others had shared. The provisions left Wharton “shocked” given “previous assurances” that many of the video issues would be addressed in a broader Communications Act overhaul, not as part of STELA reauthorization. He said the draft bill provisions would not mark any radical change to retransmission consent fundamentally, just to joint negotiation.

The STELA draft appears to be a cable bill, with many gifts for that industry, which differs from what broadcasters expected as recently as Monday, one broadcast industry lobbyist told us Thursday. Broadcasters swarmed Capitol Hill over the past 24 to 48 hours voicing their concerns, the lobbyist said, adding there appear to be the beginnings of some softening possible in the draft language. The Communications Subcommittee plans a hearing on STELA Wednesday at 10 a.m. and the broadcast lobbyist suspects House Republicans want this draft released before then. He suspects it will be released Monday at the latest, more likely Friday to give the hearing’s witnesses time to digest the draft. The lobbyist had heard other provisions thrown around in recent days, too, such as killing the sports blackout rule and language regarding antennas.

Public Knowledge Staff Attorney John Bergmayer judged there to be “a few good, narrowly-targeted reforms,” based on what officials are reporting. “They tend to relate to the carriage of broadcast signals by MVPDs, like STELA itself does,” Bergmayer said. “Getting rid of sweeps and basic tier buy-through rules makes a lot of sense to me.” But NAB’s Wharton said it would be “completely anti-consumer” to remove broadcasters from the basic tier. “There’s a reason broadcasters are on the lifeline basic tier,” Wharton said. “When cellphone and broadband networks crashed during Hurricane Katrina and Superstorm Sandy, the local TV stations stayed on air and saved lives. This is about public safety, and millions of people who rely on broadcast TV would be harmed by forcing the most popular stations off the basic cable tier."

"But any language about set-top boxes seems off-topic, and could open the door to all kinds of proposals,” Bergmayer warned. “It would be unfortunate if extraneous proposals like the set-top proposal became a distraction.” Public Knowledge has opposed Latta’s legislation and Bergmayer said the proposal “could hinder the FCC’s attempt to replace CableCARD with a better system.”

"I don’t think it’s clear yet what’s going into the final draft,” one observer of the telecom policy debate told us, citing the active broadcaster opposition this week and suspecting additional changes are being made in light of the “buzzsaw” Congress entered when adding those items. Despite suspecting additional changes to broadcaster provisions, the observer said it would be a “near-miracle” for the draft not to include Latta’s CableCARD language. It’s “Christmastime early for cable,” said the observer, who is familiar with video issues before the subcommittee and a former Hill aide considered expert in telecom policy. He described great disappointment with the draft announced, however, and said he thinks the subcommittee lost its way, especially with a lack of real debate on the integration ban provisions. Cable hijacked the process, the observer said, especially surprised given Walden had wanted it clean. He criticized alleged misinformation on the integration ban issue and pointed to the lobbying power of cable. Video law demands a broader overhaul, and piecemeal tweaks of this sort only make the situation worse -- these types of issues aren’t merely tweakable, the observer argued. It’s too soon to tell on the bill’s prospects, he said.

One industry official who heard of the integration and video items getting into the legislation wondered if Walden was trying to accomplish legislative priorities of his other committee members, citing Latta and subcommittee ranking member Anna Eshoo, D-Calif., who loudly slammed retransmission blackouts and introduced legislation to that effect in December. That official judged it “obvious” that NAB would “make a lot of noise” over the provisions, pointing to broadcasters’ concern with protecting current retransmission consent arrangements -- he pointed to the formation of broadcasters’ TV Freedom coalition and all their recent advertising. “Inclusion in STELA of some minor tweaks to retransmission consent just indicates that others don’t share the view that the regime is the free market negotiation that NAB claims it is,” the industry official said.

With emotion and advocacy removed, this STELA draft looks quite clean, the minimum the subcommittee could and should do, said the telecom lobbyist who described the draft bill in greatest detail. The draft will likely compel bigger video law updates, the lobbyist said. He expected it would have bipartisan support and very well could pass into law, despite the broadcaster concerns. No one looks at the draft bill as a slam dunk, he added.

Speaking at a Minority Media and Telecommunications Council event Thursday (see separate report in this issue), House Commerce Committee Majority Chief Counsel David Redl declined to comment on STELA, saying there’s a hearing next week and that he doesn’t want to get out front of his bosses on the topic. A Republican committee spokesman declined to confirm details of the proposal. The spokesman cited Walden’s statement from earlier this week that Walden would release a STELA draft by the end of the first quarter. (jhendel@warren-news.com)