House Poised to Pass STELA Reauthorization but Lobbyists Expect More Changes

The Communications Subcommittee unveiled a modified draft of what’s now called the STELA Reauthorization Act of 2014 (HR-4572) Friday (CD July 21 p12), incorporating the provisions that modify the video marketplace in the same way the committee’s version always had, as well as the Judiciary bill provisions (HR-5036). House Commerce cleared its version in May and Judiciary cleared its clean version earlier this month.

Hill staffers and industry officials generally cited few issues of contention when asked about the House reauthorization vote. The bill is bipartisan, with its backers listed as Communications Subcommittee Chairman Greg Walden, R-Ore., Committee Chairman Fred Upton, R-Mich., subcommittee ranking member Anna Eshoo, D-Calif., and committee ranking member Henry Waxman, D-Calif. The STELA reauthorization legislation is being considered under suspension of the rules, which requires a two-thirds House vote and is typically reserved for noncontroversial legislation. On Tuesday, House begins legislative business at 2 p.m. and votes at 6:30 p.m., with HR-4572 the first item on the agenda.

STELA reauthorization requires Judiciary and Commerce in both chambers to sign off before the act expires at the end of the year. The Senate Judiciary Committee has cleared a clean, two-page reauthorization, but Senate Commerce Committee leadership said last week it will not consider reauthorization legislation until September.

The House’s 10-page STELA Reauthorization Act of 2014 contains two titles, the first on communications provisions that Commerce handled and the second on copyright provisions that Judiciary produced (http://1.usa.gov/1pwhfUC). The bill would forbid joint retransmission consent negotiations, give broadcasters more time to unwind the sharing agreements the FCC came down against earlier in the year, kill the sweeps week rule and kill the set-top box integration ban. Under current retransmission consent rules a cable company cannot remove a station from its cable service during a ratings sweeps period. The House Communications Subcommittee touts the backing of several industry groups, including ABC/Disney, the American Cable Association, the American Television Alliance (ATVA), CBS, DirecTV, Dish, NCTA and 21st Century Fox.

But NAB, which pushed for a clean STELA reauthorization, has remained neutral on HR-4572, not opposing it but not supporting it either. NAB hopes “the end product might be more to our liking than what is in the House bill,” Executive Vice President Dennis Wharton said. NAB wants to be able to give a full endorsement to STELA legislation, which would mean tweaking two provisions that are “problematic” for various NAB members, he said, namely the language of the sweeps weeks provision and the joint retransmission negotiation ban.

TVFreedom, a coalition of broadcast interests, echoed that. The Senate should consider tweaking some parts of the House bill, such as the provision on joint retrans negotiation, the coalition’s spokesman said. “One of the biggest threats” remains if the Senate takes up a provision that would allow cable operators to remove broadcast stations from the basic tier, he said. The House had initially considered that provision and dropped it following broadcaster opposition.

"I don’t think it’s game over by any stretch of the imagination,” one broadcast lobbyist told us. She said there’s a lot of pressure within the Senate for a clean reauthorization by unanimous consent, making the whole process “still a wild card.” Also wait for Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., to act, she said. Rockefeller has long indicated he wants to revamp video marketplace rules in his reauthorization draft but the clock is ticking, making it harder to do anything controversial, she said, repeating a sentiment many industry lobbyists have expressed.

STELA will all come down to the Senate, said a multichannel video programming distributor (MVPD) industry lobbyist. He doesn’t expect this House version, which is likely to pass with relative ease, will necessarily be the final STELA legislation. “I don’t think anything’s off the table,” the lobbyist said of the Senate Commerce STELA version in development. Some aspects of that bill may be identical to the House bill, some parts of the House bill may be missing from it and there may be some entirely new provisions. The MVPD industry regards the pending Senate Commerce draft with some optimism, given it’s not expected to be clean, but also uncertainty, given there are enough unknowns that could also hurt MVPDs. “At the end of the day, the bill that gets passed is the one that can get through the Senate,” he said.

The House bill’s other major item of contention is its provision ending the set-top box integration ban. The cable industry has lobbied heavily to end the integration ban, but TiVo has loudly resisted. The ban demands cable operators use CableCARDs instead of built-in security in set-top boxes. TiVo belongs to the Computer & Communications Industry Association, which has also criticized this provision, as has Free Press. ATVA, which includes satellite and cable companies as well as Free Press as members, has lobbied for STELA reauthorization to include revamp of retransmission consent rules. CEA also pressed for such changes in a letter sent to congressional leaders earlier this month (http://bit.ly/1rwqokG). (jhendel@warren-news.com)