CO Urges Congress End STELA's Distant Signal License Ahead of Hearing

Stakeholders are to sharpen their positions on STELA renewal during that hearing, with three of the four witnesses speaking in favor of recertification, in written testimony. House Commerce Committee Democrats outlined issues in a memo. The panel begins at 10:30 a.m. in 2322 Rayburn. The Senate Commerce also plans a media market hearing Wednesday (see 1905290029).

The CO again recommends letting STELA’s distant signal statutory license provision expire Dec. 31, Register of Copyrights Karyn Temple wrote House Judiciary Chairman Jerry Nadler, D-N.Y., and ranking member Doug Collins, R-Ga. The office similarly recommended Congress eliminate that license in 2008 and 2011 (see 1108310083). “The case for removing” that license “in favor of less-regulated alternatives has never been stronger than today,” the CO reported, attached to Temple’s letter. The license “has been made unnecessary by the substantial growth of the satellite industry, now a strong incumbent, and the changed realities of the programming delivery market -- in particular plummeting carriage of distant signals by satellite.”

The distant signal license “may also negatively impact subscribers,” as reflected in letters from members of Congress to the leaders of committees with STELA jurisdiction that criticized the distant signal language (see 1903280070 and 1905310051), the CO said. “Technological limitations that once made it burdensome or impossible to provide local programming to certain markets have been overcome.” Congress “would be justified in allowing [the distant signal license language] to expire even if the other video compulsory licenses are left untouched for an indefinite period,” the CO said.

The Scalise-Eshoo bill, to be filed in the “coming weeks,” will allow more competition in the marketplace and give consumers more freedom to watch their favorite programming, Scalise said. He has been eyeing refiling his Next Generation Television Marketplace Act, which would repeal compulsory copyright licenses and retransmission provisions included in the 1992 Cable Act and end Communications Act mandates on carriage and purchase of certain broadcast signals by MVPDs (see 1903200009).

“The system today leaves consumers being held hostage to blackouts due to disputes between companies,” Eshoo said in the news release. “Our bipartisan approach will eliminate blackouts and stem the rising costs.” Eshoo has been considering refiling her Video Consumers Have Options in Choosing Entertainment (Video Choice) Act (see 1812280025). The bill, filed in the 113th Congress, addressed retrans blackouts (see 1312130065).

Retrans

America’s Communications Alliance CEO Matthew Polka before the announcement was strongly bullish on the prospects for a Scalise-Eshoo bill and STELA renewal generally. “There will be a lot of ideas” proposed during the STELA debate and ACA is open to all possibilities, Polka said during a conference call with reporters Monday. It's "beyond high time to reform” the retrans rules and it’s positive that Scalise and Eshoo “are in lockstep about the need for” a revamp of those rules. The American Television Alliance also favors addressing retrans rules via STELA renewal, said spokesperson Trent Duffy during the call ATVA organized.

ACA Vice Chairman Patricia Jo Boyers focuses on retrans concerns for the House Communications hearing, saying “all ideas are on the table” for revamping the current rules. She calls the Local Choice Act broadcast a la carte proposal “one good idea” that “would essentially get us out of the business of being a middleman between broadcasters and their viewers.” Boyers also cites the Next Generation Television Marketplace Act and the Video Choice Act. “I hate the idea of Congress having to get involved in my business,” she says. “But at this point, something needs to be done.”

CEO Gordon Smith doubles down on NAB's longstanding opposition to STELA reauthorization (see 1810090045). The statute “is not only unnecessary today due to considerable advances in the media marketplace, but any reauthorization will further harm the satellite viewers currently being denied access to their local television stations,” Smith says. On the distant signal license, “royalties under this outdated license are discounted substantially below the carriage fees for these stations negotiated in the market by other pay-TV providers," he said. "This … incentivizes the satellite companies to deny viewers local" programming "while still charging their subscribers hefty fees each month for an out-of-market station.”

“Viewers will benefit from eliminating this outdated law, ensuring they receive the local content most relevant to them,” Smith says. “In rare instances where a local broadcast channel is not available, private business arrangements between satellite TV providers and broadcasters can resolve these issues.” Lawmakers have criticized the license in the context of the 12 media markets where AT&T's DirecTV subsidiary provides limited or no access to locally broadcasted networks' stations (see 1905310051). AT&T says the 12 markets have access to local stations' terrestrial signals.

AT&T Senior Vice President-Content and Programming Rob Thun urges Congress to “make permanent” authorizing language for the license as part of STELA recertification. The law “contains provisions that continue to benefit consumers, including the statutory copyright license permitting satellite carriers to provide network programming to more than 870,000 satellite subscribers,” Thun says. The reauthorization debate gives Congress an opportunity to again enact “substantive reform apart from the expiring provisions,” as it has in previous STELA iterations, he said. A retrans revamp is “foremost among needed changes” because the current rules are “the principal cause of rapidly rising broadcast programming costs and blackouts.”

Public Knowledge Senior Counsel John Bergmayer says Congress should at the least renew STELA or “even better, make it permanent” because it’s “an important building block of video competition.” There’s “no reason for Congress to create artificial crises every few years to ensure that satellite remains a competitor,” he says. "‘Clean’ reauthorization of [the law] indefinitely would not prevent Congress from revisiting the provision at a later date, perhaps along with other video reforms.” But “if Congress does choose to reauthorize STELA for only a few years, it should tie its expiration to the expiration of other video marketplace protections, such as distant signal rules, basic tier buy-through, and similar provisions,” Bergmayer said.