Capitol Hill Digs In on STELA Renewal Amid Legislative Uncertainty

Senate Commerce Committee Chairman Roger Wicker, R-Miss., and House Communications Subcommittee Chairman Mike Doyle, D-Pa., separately told us they still strongly back reauthorizing STELA in full. Wicker said he plans to convene another STELA-focused hearing after the recess to supplement a June media marketplace panel that was aimed at launching Senate Commerce's renewal debate but dealt with broader trends (see 1906050083). House Communications also had a STELA-centric hearing in June (see 1906040057).

“We'll do a bill,” but “it's hard to say” how far it will go beyond simply recertifying the STELA text Congress enacted in 2014, Doyle said. “When we get back, there’s going to be a lot of things we’re trying to clear up” during the limited time before the end of the year. The House and Senate are set to reconvene Sept. 9. Doyle spoke before House Minority Whip Steve Scalise, R-La., and Rep. Anna Eshoo, D-Calif., bowed their Modern Television Act (HR-3994), which they aim to add to a STELA extension package. The bill would repeal some parts of the 1992 Cable Act, including retransmission consent (see 1907290053).

Eshoo and Scalise were unsure in interviews the day before they introduced HR-3994 that it would be ready before the recess. Both lawmakers emphasized that they made compromises to reach a deal on the final text, and they said they drew equally from Eshoo's Video Consumers Have Options in Choosing Entertainment (Video Choice) Act and Scalise's Next Generation Television Marketplace Act (see 1312130065 and 1807230044)

House Commerce ranking member Greg Walden, R-Ore., said he thinks “times have changed” because “there's just not an overwhelming 'we've got to pass'” STELA renewal mentality on the Hill “like we've had in the past.”

House Judiciary Committee ranking member Doug Collins, R-Ga., said he's still pushing for the committee to go beyond Register of Copyrights Karyn Temple's June testimony in its examination of STELA. Temple testified before House Judiciary and the Senate Intellectual Property Subcommittee on the CO's recommendation that Congress sunset STELA's distant signal provision (see 1906030065 and 1907300069). House Judiciary didn't comment.

“If I could ever get [House Judiciary] to focus on something besides bashing” President Donald Trump via hearings “I think we could take our part” in the reauthorization debate, Collins told us. “It's not been a priority so far and I've been frustrated generally about the committee's pace” on legislative issues. “I would love to have some hearings” because “I think there are still some issues we need to look at,” Collins said. “I'd love to take a 10-15-year approach” to handling STELA “and look at where we're headed on these issues.”

Senate Moves

“It's going to be [Wicker's] call” on STELA and he “views it as a priority,” said Senate Communications Subcommittee Chairman John Thune, R-S.D. Wicker in February said recertification of the statute must pass (see 1902270018). “We're going to have another hearing” on the issue, though it's clear “there are differences of opinion in the stakeholder community about whether it needs to be reauthorized based on the evolution of the video market," Thune said. He's skeptical there will be time to go beyond a simple renewal bill given the limited number of days on the post-recess legislative calendar.

Senate Commerce ranking member Maria Cantwell, D-Wash., and Senate Communications ranking member Brian Schatz, D-Hawaii, told us they believe the committee needs more information and stakeholder feedback before they reach a STELA decision. Cantwell said she believes there's still plenty of time to delve further into media issues that could inform the renewal debate. Schatz said he's “undecided on whether it needs to be reauthorized. Obviously the broadcasters and cable are at odds,” especially over the statute's distant signal statutory license provision. “This doesn't necessarily come up every year, so I'm still in the process of researching” the issue, Schatz said.

Senate IP leaders want to wade further into the STELA debate after the recess. Either the full Senate Judiciary Committee or the subcommittee will likely hold a hearing after Labor Day because “I want to hear from everybody,” said subcommittee Chairman Thom Tillis, R-N.C. “I see” the rationale behind calls from the Copyright Office and broadcasters for “letting it sunset” because “the world has changed a lot since it was first implemented, but I'm still listening to the other side.”

Senate IP ranking member Chris Coons, D-Del., told us he “met with advocates on both sides” and “I'm going to weigh those [arguments] carefully. I think we ought to hold a hearing on this before the year ends so we can find a path forward."

Senate Commerce and Judiciary member Marsha Blackburn, R-Tenn., has shifted to outright opposing reauthorization. “I'm one of those who think we need to let it sunset,” she told us. “I think the industry has matured enough that you don't need it” anymore.

Tillis told us he envisions Senate IP's work on STELA as completely separate from the effort to write legislation to aid CO modernization and a patent law revamp, because they're “defined very narrowly so we can get bipartisan support and get our House colleagues on board.” Tillis said he's also working with Senate Commerce “because we're mindful of jurisdictional issues” inherent in STELA.

Lobbyists' View

Lawmakers' rising interest in STELA is obvious between the filing of HR-3994 and recent attention on ongoing retransmission disputes like those between AT&T's DirecTV and broadcasters CBS and Nexstar (see 1907170014 and 1907190056), lobbyists said. Stakeholders also upped their Hill lobbying on the issue. Twenty-seven entities reported lobbying on reauthorization during Q2, up 35 percent from Q1. Twelve entities reported lobbying on retrans during Q2, level with Q1.

HR-3994's private sector supporters are far more bullish on the chances at least some of its provisions will make it into a recertification measure than are lawmakers or broadcasters. It's unlikely either chamber would be able to pass HR-3994 as a stand-alone measure or attach its entire text to another vehicle, but some of the bill's less controversial elements may make it into a compromise STELA renewal, media lobbyists said. STELA is unlikely to move via regular order and would need to be attached to another vehicle, they said.

Broadcasters believe their strong opposition to STELA has been effective, though officials and lobbyists we spoke with weren't ready to predict how the Hill debate will play out. "We think we've made some headway," but there are still "lots of shoes to drop," one official said. Pro-STELA communications policy leaders like Doyle and Wicker will be a major factor in the outcome, the official said. Broadcasters still vocally oppose STELA, as shown by NAB President Gordon Smith’s recent comments at a Media Institute event (see 1907230032). But the broadcasting interests are even more opposed to broader legislation that includes the HR-3994 text and other measures that could affect media ownership and other issues beyond retrans, lobbyists said.

Free Press likes “parts of” HR-3994, including its plan to establish a mechanism for the FCC to compel parties to seek “baseball-style” arbitration in retrans cases where there's an extended impasse or a finding of bad faith by one of the parties, said General Counsel Matt Wood. The group also favors language in the bill to require MVPDs to carry a broadcast signal for up to 60 days after a retrans agreement expires, while parties negotiate, he said.

Telecom lawyer/consultant Jonathan Lee supports HR-3994, but noted its arbitration language isn’t nearly as strong as what Time Warner’s Turner offered to MVPDs in 2017 to assuage DOJ concerns about the AT&T/TW deal. Those terms included guaranteed baseball-style arbitration if the MVPD couldn't reach a satisfactory distribution agreement for Turner networks and a ban on blackouts during the arbitration process (see 1711280063). HR-3994 would institute baseball-style arbitration 42 months after the bill’s enactment, while the Turner terms would have taken effect immediately, Lee said. The bill also allows only the FCC to seek that form of arbitration but doesn’t require it, he said.