Fights Over STELA, Comcast/TWC Deal Fuel 2014 Capitol Hill Lobbying

Retrans battles in particular fueled Hill attention from both pay-TV industry lobbyists and broadcasters. Lobbying disclosure forms covering Q1 2014 were due Monday, and cable remained a leader among the pack of spenders, Comcast central among them despite a dip compared to past quarters. STELA will expire at the end of the year unless Congress reauthorizes it, and pay-TV industry stakeholders have attempted to add several provisions that have frustrated broadcasters -- such as revamping retransmission consent rules. But NAB, in a rare move, outspent NCTA.

NAB bulked up its lobbying heavily, in a season full of perceived legislative threats. It spent $5.28 million on in-house lobbying in Q1 in addition to around $750,000 on more than a dozen firms. It hired four of those firms late last year, according to registration forms posted October through December. In 2013, NAB spent $4.2 million in Q1, $3.19 million in Q2, $3.26 million in Q3 and $3.8 million in Q4. In this latest quarter, NAB focused on STELA, the FCC’s broadcast TV incentive auction rules, media ownership rules and “issues related to news gathering restrictions,” it said.

Both STELA and congressional oversight of the proposed Comcast acquisition of Time Warner Cable await action when Congress returns from recess. The House Judiciary Committee scheduled a hearing on the purchase for May 8, and several committees are hashing out details of what should go into STELA reauthorization.

Comcast/TWC Focus

Proponents and critics of the proposed Comcast acquisition of Time Warner Cable revealed their lobbying figures. Comcast spent $3.09 million in Q1, actually far less than in any 2013 quarter, despite a lobbying push backing the purchase. It had spent $4.48 million in Q1 last year, $5.47 million in Q2, $3.98 million in Q3 and $4.78 million in Q4. Time Warner Cable, meanwhile, spent $1.93 million this quarter, up from the $1.87 million in Q1 last year. Comcast and Time Warner Cable say the purchase, which requires approval from the FCC and the Justice Department, would help consumers and not hurt competition.

Both Comcast and Time Warner Cable tout a bevy of lobbying firms. Comcast has already hired six lobbying firms in the first four-and-a-half months of 2014, with many of those lobbyists specializing in antitrust issues (CD April 14 p3), compared to its hire of just four firms in all of 2013. For the Q1 period, 37 different entities filed lobbying forms on behalf of Comcast -- not including the millions Comcast spent on its own lobbying. It paid $100,000 to PutalaStrategies, $90,000 each to Brownstein Hyatt, the Duberstein Group and Forbes-Tate, and $80,000 each to Blank Rome Government Relations, FTI Government Affairs, Ryan MacKinnon and Thorsen French Advocacy, with other firms pulling in slightly lesser amounts. Several of these lobbying forms explicitly cite lobbying on the STELA reauthorization as well as the Comcast/Time Warner Cable deal.

NCTA, which includes Comcast and Time Warner Cable as members, also lobbied heavily, both with in-house lobbyists and several outside lobbying firms. Disclosure forms suggested it touched on both the proposed Comcast/Time Warner Cable deal and STELA. NCTA spent $4.14 million, slightly down from the $4.17 million it spent in the same quarter last year. Its spending had spiked late last year, with $6.6 million clocked in Q4.

But many groups critical of the Comcast/Time Warner Cable deal also filed and lobbied against approval. Writers Guild of America-West opposes the deal and spent $120,000, up from the $100,000 it spent in Q1 last year. It also lobbied on retrans. Another opponent is Consumers Union, which spent $70,000, up from last year’s $60,000. The Sports Fans Coalition, represented by Emmer Consulting for $20,000, lobbied on what it called “advocacy regarding the impact of the proposed Comcast/Time Warner Cable merger on sports programming” as well as retrans revamp “such that sports fans do not lose key programming during retransmission consent disputes.” It also lobbied on ending the FCC sports blackout rule.

In a Monday letter to shareholders, Netflix also announced opposition to the deal. Earlier this year, Netflix and Comcast announced a paid-peering agreement, which Netflix has since slammed. (See separate report in this issue.) Netflix backs peering agreements at no cost to either party, it has said. It has spent $300,000 every quarter for the last year lobbying Congress and named in this latest quarter “Internet non-discrimination” among its priorities. D&P Creative Strategies, one of Comcast’s firms, listed “Netflix” among its lobbying priorities, which also included the proposed Time Warner Cable purchase, STELA and net neutrality.

Sen. Al Franken, D-Minn., has slammed the Comcast/Time Warner Cable deal and pointed to the 107 lobbyists Comcast employed in 2013. Franken also recently sent a letter to Netflix asking it to weigh in on the deal. Franken has questioned Comcast’s compliance with conditions placed on its purchase of NBCUniversal. Bloomberg spent $100,000 lobbying on Q1 priorities that included “enforcement of conditions governing Comcast/NBCU merger,” it said. Level 3 Communications, another critic of paid peering, gave Peck Madigan Jones $50,000 to lobby on net neutrality, which some advocates say encompasses paid-peering agreements -- a point Comcast disputes.

"Level 3 and others have been and will continue to engage in lobbying activities centered on strong net neutrality, because traditional net neutrality and ’strong’ net neutrality, which would cover interconnection arrangements with last mile ISPs, are so closely tied,” Level 3 General Counsel Michael Mooney told us. “You cannot effectively address net neutrality concerns without also addressing the interconnection with last mile bottleneck ISPs.” Mooney said Internet backbone competition “evaporates entirely” when backbone providers connect to a last-mile Internet service provider. He warned of potential harm to the open Internet, and some harm already happening, as last-mile ISPs “perpetuate Internet congestion” as a way to “extract anticompetitive tolls from, and increase the costs to, backbone providers and their customers” or “in an effort to force edge providers to deal with the ISPs directly to alleviate the congestion.”

"It’s not surprising that Comcast is pulling out all the stops on the lobbying front,” Consumers Union Policy Counsel and registered lobbyist Delara Derakhshani told us of the proposed Time Warner Cable purchase. “Senator Franken made the point during the Judiciary hearing that there may be a hundred Comcast lobbyists, but he’s heard from 100,000 consumers who oppose the deal. The challenge for us is to make sure that consumers’ voices are heard.”

"While ISPs’ market power only increases with acquisition activity, we view this as an issue bigger than any acquisition,” Mooney said. “We can and will continue to advocate that these discriminatory harms be addressed, both by the FCC and on Capitol Hill.”

Eyes on STELA

The proposed Comcast purchase and STELA reauthorization operate largely on separate tracks, Free Press Policy Director Matt Wood said, although the purchase debate will likely “heighten the awareness” for lawmakers of key video marketplace players and issues going forward. The proposed purchase will be a hot “talking point,” Wood said.

Both Dish and DirecTV named STELA as well as many of the pieces of video marketplace legislation among lobbying priorities. DirecTV spent $690,000, down from the $740,000 over the same time last year. Dish spent $390,000, up from $350,000. The American Television Alliance, which has fiercely attacked broadcasters and retrans rules, paid Fierce Isakowitz $150,000 to lobby on STELA and retrans on behalf of its members, which include many pay-TV industry players, Public Knowledge and the New America Foundation. Google, spending $3.82 million, also lobbied on STELA, it reported. It also lobbied on online video, spectrum allocation and rules for white spaces, broadband adoption and deployment, Internet governance and net neutrality. Google spent only $3.35 million in 2013’s first quarter.

The International Brotherhood of Electrical Workers “urged Congress to oppose efforts by pay television providers (cable and satellite) to hamstring broadcasters ability to negotiate retransmission consent agreements,” the union said in its form, clocking $289,639 in Q1 spending, more than $30,000 more than last year’s. “Legislative efforts that undermine broadcasters capability to bargain these agreements would have a negative impact on the livelihoods of IBEW members in the broadcasting industry.” Focus on retransmission consent and the Aereo case before the Supreme Court (see separate report in this issue) has “taken most of the time” among the union’s telecom and media priorities, IBEW lobbyist Bruce Barton told us: “We're really there for our broadcasters who employ our members,” he said, adding that cable has not necessarily served labor well.

The possible Communications Act overhaul, set to occur over the next several years, received frequent mentions among Q1 forms. The Telecommunications Industry Association named it along with the IP transition and spectrum reallocation, spending $70,000, or $20,000 more than it spent in Q1 of last year. Paul Unger, who lobbied for NCTA and Comcast, specifically included the hashtag #CommActUpdate, coined by House Republicans, in two lobbying forms.

Spending did not shift as substantially in the telecom sphere, although many still lobbied on the video issues that affect them, including STELA. USTelecom spent $1.25 million, slightly down from the $1.28 million the same time last year, and lobbied on everything from retrans video issues to net neutrality legislation to FCC structure. AT&T spent less in Q1 compared to last year, down to $3.67 million from $4.26 million. Verizon spent $3.55 million, down from $3.67 million. CenturyLink spent $1.01 million, up from $920,000 last year. CTIA spent $3.08 million this year’s Q1 compared to $2.95 million. Sprint’s spending was up to $784,707, with $666,558 spent in last year’s Q1. T-Mobile spent $1.47 million, up from $1.3 million in Q1 last year.

"STELA and the Comcast merger will be the anchors of the telecom lobbying business for the rest of the year,” said Guggenheim analyst Paul Gallant. “And if Aereo wins [its Supreme Court battle] in June, STELA or other media legislation would become an even bigger deal. The Telecom Act rewrite is a long road, and I don’t know whether that’s something companies will really go all-in on just yet.” (jhendel@warren-news.com)