AT&T Lobbying on Video Issues Expected to Rise Due to DirecTV Deal

DirecTV “will continue its robust advocacy for a STELA reauthorization that will ensure that 1.5 million satellite subscribers do not lose their network signals, and that also revisits decades-old laws that have saddled consumers with rising prices and frequent broadcaster blackouts,” Senior Vice President-Government Relations Andrew Reinsdorf told us in a statement. DirecTV expects no change in the way it’s submitted STELA comments with Dish Network, Reinsdorf added.

Dish expects “to remain united with DirecTV in our advocacy on STELA,” it affirmed to us in a statement. The two companies “have historically worked together on government advocacy when it is in their mutual best interests, including efforts to protect satellite TV customers through the 2014 reauthorization of STELA and reform the outdated retransmission consent system,” Dish said.

Dish and DirecTV belong to the American Television Alliance (ATVA), a lobbying coalition battling broadcasters over the issue of retrans blackouts. The coalition includes groups such as Public Knowledge and the New America Foundation plus telecom heavyweights such as USTelecom and Verizon, but AT&T itself is not a member formally, despite belonging to USTelecom. A spokesman for ATVA declined comment on the effects of the acquisition and whether it would shift DirecTV’s role or perhaps give AT&T a role in the alliance. “Despite the NAB’s wishes, ATVA is more committed than ever to reforming retransmission consent and Congress finally agrees with us,” the spokesman said. “Everyone except broadcasters favors updating retrans through STELA because consumers are getting pummeled with skyrocketing retrans fees and TV blackouts.” An NAB spokesman responded by dismissing ATVA as a “front group funded by Time Warner Cable, DirecTV and Dish -- three companies that are the poster children on Least Liked Companies in America lists because of their abusive billing practices.” It’s false to say these companies side with consumers, as it is to say broadcasters cause higher pay-TV bills, he said by email.

AT&T welcomes what it calls “limited reform efforts” through STELA, it said earlier this year. The telco referred us to a 10-page letter from top lobbyist Tim McKone, executive vice president-federal relations, to the Senate Commerce Committee on STELA, dated March 25 and not publicly released, that demanded comprehensive overhaul of the Communications Act while acknowledging it “may make sense” for including overhauls in STELA. AT&T said the “case for reform is clear” in video policy and that it’s all the more important given the looming deadline of STELA expiration at year’s end.

AT&T Lobbying

AT&T said TV station content is “distorted” to favor broadcasters due to “legacy statutory provisions and FCC rules that grant them unnecessary and arbitrary bargaining power against distributors that results in consumer harm and lowers consumer welfare.” AT&T called the retrans regime “badly outdated” and tore into rising retrans fees, joint retrans negotiations and the tactic of retrans blackouts during negotiations. Congress should use STELA reauthorization to clarify FCC authority to ensure interim carriage of signals during retrans disputes, kill the FCC’s network non-duplication and syndicated exclusivity rules, prevent broadcasters from “demanding both in cash and in-kind compensation in return for retransmission consent,” prevent broadcasters from forcing negotiation “at the point of a gun” by terminating retrans agreements “shortly in advance of significant and popular cultural or sporting events,” ensure broadcasters show why higher retrans fees are warranted if requested and limit joint negotiation, AT&T said. NAB has defended current rules and lobbied for clean reauthorization of STELA.

AT&T has several times more lobbying resources than DirecTV. In Q1, AT&T spent $3.67 million on lobbying, while DirecTV spent $690,000. AT&T did lobby on STELA reauthorization among myriad other priorities, focusing on “provisions related to retransmission consent,” it said in its Q1 report.

It seems unlikely AT&T would put significant resources into fighting DirecTV’s STELA battles before the acquisition is consummated, said Computer & Communications Industry Association Vice President-Government Relations Cathy Sloan. AT&T’s focus will be lobbying on the deal itself and securing that approval, although it’s possible lawmakers will ask the telco questions on retrans and STELA during that oversight process, she said. CCIA members include Dish.

Before the acquisition, AT&T and DirecTV likely will continue lobbying on their priorities as usual, with AT&T unlikely to jump into DirecTV’s STELA battles in a big way and affect that reauthorization process, said a media industry lobbyist. Parties typically go out of their way to do that when deals are pending, he said. But AT&T’s investment in video market issues before Congress has a strong chance of rising if the takeover is approved, with the focus more on satellite issues than U-Verse, the lobbyist predicted. AT&T and Verizon often have saved their real lobbying capital for the fights on mobility issues such as spectrum, he said. The lobbyist also said Time Warner Cable has paid for its membership in the ATVA through the year and will also continue that advocacy as per usual as its proposed takeover by Comcast is pending. He suspects a combined AT&T/DirecTV will retain membership in the ATVA.

As Congress oversees AT&T/DirecTV, lawmakers may learn more about video market issues, “a quick education” that could indirectly influence STELA reauthorization, a communications industry lobbyist told us. That lobbyist agreed AT&T has not been as fiercely engaged on video issues and suspects that will change upon buying DirecTV. AT&T has an immediate greater interest if the company believes the deal will get approved, but its top priority on the Hill is likely the deal, that lobbyist said. DirecTV’s STELA advocacy will likely also lessen as it has to focus on the deal, he said. Congress has announced multiple oversight hearings of AT&T/DirecTV, but this lobbyist doubts the STELA-related topics such as retrans will feature prominently -- certainly the combining firms wouldn’t bring them up, he remarked. (jhendel@warren-news.com)