Aereo Should Expect No Saviors on Capitol Hill, Lobbyists Say

Don’t rule out the possibility of legislative solutions entirely, despite the lack of a lobbying push, some lobbyists said. They pointed especially to Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and the Satellite Television Extension and Localism Act (STELA) reauthorization bill he’s putting together.

The Supreme Court decision won’t stop Rockefeller’s focus on the future of video, he said last week, emphasizing “we must foster innovative online video services, which I believe offer the best way to provide more consumer choice and to lower consumers’ bills.” Rockefeller said such services shouldn’t violate copyright law. House Communications Subcommittee ranking member Anna Eshoo, D-Calif., issued a statement calling the decision “disappointing” and backing her call for overhaul of video market laws. No House legislation has been planned, a Democratic aide told us last week.

Rockefeller introduced his Consumer Choice in Online Video Act (S-1680) last fall and has hinted repeatedly at attaching it the STELA draft he’s now assembling with Sen. John Thune, R-S.D. That bill contains provisions favorable to Aereo, which many said would legalize the service. “I've constantly raised that possibility, and I enjoy doing it,” Rockefeller told us in mid-June. “And I enjoy doing it just because I know it keeps K Street unhappy.” Rockefeller is planning a hearing on STELA and online video distributor issues July 16, industry lobbyists told us.

It’s doubtful Rockefeller will succeed at attaching the Aereo provisions of that bill to STELA, and Aereo has no real shot on the Hill otherwise, said a broadcast industry lobbyist and a media industry lobbyist. Time is working against an ambitious STELA bill, though it’s always hard to predict with the Commerce Committee, they said. Committee staff told the broadcast lobbyist they want to mark up its STELA draft before the August recess, at a session following the July 16 hearing, he said. The broadcast lobbyist suspects some of the Consumer Choice in Online Video Act will make it on to the STELA draft, just not parts favoring Aereo, he said, saying committee staff played their cards close to the vest.

The multichannel video programming distributor industry won’t be active in lobbying for any legislative help for Aereo, despite some philosophical support for the service, an MVPD lobbyist told us. Some MVPDs wouldn’t oppose that possibility, but the MVPD lobbying muscle won’t be there, he said. “There’s definitely a chance,” the lobbyist remarked, mentioning Rockefeller’s bill. It’s one provision “in the mix” among many that could go into the Senate Commerce Committee STELA draft, but one with a lower probability of advancing due to controversy it could create, he said. STELA expires at the end of the year unless Congress reauthorizes it, and broadcasters have pushed for a narrower STELA. Rockefeller would face fierce opposition from broadcasters if he tried to save Aereo through STELA, the MVPD lobbyist said, making that boon for Aereo ultimately “unlikely.”

No Rockefeller Aereo Reversal

Due to his committee’s jurisdiction, Rockefeller can’t reverse the Supreme Court ruling, which focused on copyright, but he could try to help Aereo by modifying provisions under the Communications Act, the MVPD lobbyist also observed. The broadcast lobbyist made the same point on jurisdiction but dismissed the idea that any legislative answer would be anything other than authorizing the theft of broadcast content.

Aereo is a member of both CEA and the Computer & Communications Industry Association, two groups with greater lobbying heft on the Hill than the company, based on lobbying spending and expertise. Neither group is actively engaged in legislative efforts to save Aereo yet, their lobbyists told us. CCIA is simply attempting to explain the ruling, said Vice President-Government Relations Cathy Sloan. But “pay close attention” to what Rockefeller does on STELA, she said. CEA Senior Vice President-Government Affairs Michael Petricone said Aereo is “determining their strategy” and said he’s “not sure” what the company will do next. Aereo didn’t comment. Petricone mentioned a line from the court ruling suggesting innovators could go to Congress to change the law but slammed this based on the entrenched lobbying strength of incumbents, which have all the “political power” and establishment cachet. “Incumbents don’t like to be disrupted -- that’s human nature,” he said.

Any legislative or regulatory answers would involve making pay-TV law more technology neutral “so that online services could opt in if they wanted to,” Public Knowledge Senior Staff Attorney John Bergmayer said. He pointed to “legislative ways to get to that result,” as through the Rockefeller legislation.

"It’s pretty hard to see any Aereo legalization push going very far,” said Guggenheim Partners analyst Paul Gallant. “Even with some top Democrats like Rockefeller and Eshoo wanting a legal Aereo, it would raise too many difficult questions around regulatory parity with cable. But I do think Aereo has ensured that legalizing OTT [over the top] will be a central feature of the next big Telecom Act update.”

Petricone and Sloan said the ruling undercuts broadcasters’ arguments about their rights to free spectrum. Petricone called the decision “a Pyrrhic victory” for broadcasters that will ultimately drive consumers away from broadcast content and to viewing content online through mobile devices. Any notion that “broadcast networks should be able to restrict who gets access to free over the air local TV broadcast signals of affiliate stations by whatever technical means is just plain wrong,” Sloan said. She said she agrees with CEA that “it becomes difficult for broadcasters to justify their continued control of high value channels in the spectrum while they are actively shrinking their audience through litigation.” (jhendel@warren-news.com)