STELA Draft Poised to Lose Controversial Basic Tier Provision
One of the most controversial provisions of a Satellite Television Extension and Localism Act draft may be stripped before it’s even released. STELA expires at the end of 2014 and must be reauthorized. Several lobbyists told us Wednesday that members of the House Communications Subcommittee resisted at least one major controversial add-on to a STELA draft that Subcommittee Chairman Greg Walden, R-Ore., began circulating last week (CD Feb 28 p1). The draft alarmed broadcasters, who have slammed a provision that would have allowed cable operators to remove broadcast stations from the basic tier. Now, the subcommittee is likely removing that provision, several lobbyists said.
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House Communications Subcommittee Republican members kept quiet about a closed-door, unannounced meeting Wednesday, which Capitol Hill and industry sources told us was dedicated to discussing STELA and rescheduled from a Monday meeting. Several of the subcommittee’s Republicans entered 2123 Rayburn at 10 a.m. for the meeting. Among the attendees were Walden, Subcommittee Vice Chairman Bob Latta of Ohio, Reps. Joe Barton of Texas, Brett Guthrie of Kentucky, Billy Long of Missouri, Steve Scalise of Louisiana and John Shimkus of Illinois.
Walden deflected questions before the meeting, as did several other members when they left the room an hour after gathering. “Oh, we had a private meeting,” Guthrie told us as he left, a sentiment repeated by other exiting members. Scalise was ushered away by an aide mentioning pressing constituent obligations. Scalise introduced the Next Generation Television Marketplace Act in December, which proposed major changes to the video market. He’s seen as largely responsible for many provisions included in the STELA draft (CD March 4 p5). Later, Scalise left the Rayburn building and briefly mentioned STELA.
"The bill hasn’t been filed yet,” Scalise told reporters. “There will be some of the provisions that I've been urging, to get to a freer market, to get to a free marketplace, that will be in the bill. We've never had a clean STELA bill.”
During the meeting, Scalise spoke in favor of the add-ons but found little support, two lobbyists, one affiliated with the broadcast industry and one the media industry, each told us, saying the basic tier provision looks doomed and on the chopping block. One industry official confirmed he heard that provision is out. Several other members urged a clean reauthorization, the lobbyists said. Barton, Long and Rep. Mike Pompeo of Kansas in particular emphasized a desire for a clean STELA draft bill, the broadcast lobbyist said. These other members backed what the media lobbyist called a two-tiered approach: One in which STELA did not address any controversial video law revamps, with those to be considered as part of the broader Communications Act overhaul process that House Republicans have also embarked on. Scalise’s one co-sponsor on his Next Generation Television Marketplace Act, Cory Gardner of Colorado, was not present at the Wednesday Republican members’ meeting, the media lobbyist added. Walden preferred to eliminate the basic tier provision because there was too much controversy now, the media lobbyist said. NAB said last week it would oppose that draft and a coalition of broadcast interests known as TVFreedom began advertising in favor of a clean STELA reauthorization this week.
"NAB is extremely encouraged by the reports we're hearing from the committee,” said a spokesman when asked about the basic tier provision’s fate.
Subcommittee staff planned a 3:30 p.m. Wednesday meeting to go over the STELA draft and likely remove the basic tier provision, lobbyists said. The five-year reauthorization draft would still include some of the other provisions that industry officials first described to us last week: Multichannel video programming distributors would be able to opt out of joint negotiation with broadcasters in the matter of joint sales agreements and shared services agreements, the elimination of the sweeps weeks rule as applied to cable and the Latta bill language killing the integration ban, which demands cable operators use CableCARDs instead of built-in security in set-top boxes. A subcommittee spokesman did not comment.
Scalise’s office did not confirm or deny accounts of Wednesday’s developments but promised a less than clean draft of STELA. “There was a lot of support for addressing these and broader issues in the video marketplace that Chairman Walden and the committee will take up soon,” Scalise’s spokesman said. “Congressman Scalise will continue advocating for free market reforms. As you'll probably soon see with the discussion draft, this will not be a clean STELA as some have requested.”
The subcommittee plans a STELA hearing next week: Wednesday at 10:30 a.m. in 2123 Rayburn. It had initially scheduled a hearing for this past Wednesday but it was postponed due to snow. Witnesses are still listed as NCTA CEO Michael Powell; Schurz Communications Senior Vice President-Broadcasting Marci Burdick, an NAB board member; TiVo General Counsel Matt Zinn, who objects to the integration ban legislation now expected to be part of the STELA draft; and DirecTV Executive Vice President Mike Palkovic. (jhendel@warren-news.com)