News

Cable Ops Ready for Change As STELA Takes the Stage

GOP LAWMAKERS SPARRING OVER DRAFT 3/03/2014 12:00 AM Eastern

WASHINGTON — STELA reauthorization kicked into gear with a bang last week, and cable operators could ultimately benefit big time.

The House Communications Subcommittee will hold its second hearing on the Satellite Television Extension and Localism Act this week, with a draft in the works that could be a good bit less clean than broadcasters were hoping.

Republicans are not all of one mind on the draft, which is a work in progress, sources familiar with the legislation said. Republican members are said to be holding a meeting today (March 3), and the draft is expected to be a topic of conversation.

It was definitely a topic of conversations for broadcasters last week. “We are being forced to strenuously oppose this bill because our members are extremely concerned,” National Association of Broadcasters spokesman Dennis Wharton said.

The bill as it is currently being drafted — no text is available yet, one source said — would require broadcasters to negotiate carriage on a cable operator’s basic tier as part of retransmission-consent agreements, according to sources. It is not clear whether must-carry stations would lose their mandatory must-buy carriage requirement.

Owners of must-carry stations, led by ION Media, last Thursday (Feb. 27) formed their own coalition, Voices for TV Choices, to push for a cleaner STELA than the early draft suggests. It was the second broadcaster-backed coalition to launch in the last three weeks in a pushback against possible changes in the retrans must-carry regime (the other was the TVFreedom.org group of network affiliates).

The bill would also allow cable operators to negotiate retransmission consent separately with a station and its jointsales agreement (JSA) or shared-services agreement (SSA) partner in a market, and would do away with the Federal Communications Commission rules that prevent broadcast programming to go dark on cable systems during sweeps periods. It would also do away with the FCC’s ban on integrated set-tops, which was proposed in a separate bill by Reps. Robert Latta (R-Ohio) and Gene Green (R-Texas).

The National Cable & Telecommunications Association has been pushing for an end to the ban, and the American Cable Association would be happy to divorce stations from their JSA/SSA retrans-negotiation partners.

The draft issues are expected to get some tire-kicking at the March 5 hearing in the House Communications Subcommittee. NCTA president Michael Powell will be one of the witnesses, as will TiVo senior vice president Matt Zinn, who might have something to say about getting rid of the set-top integration ban. TiVo is concerned that removing the ban would put the company at a competitive disadvantage.

Rep. Greg Walden (R-Ore.), chairman of the House Communications Subcommittee, has signaled he wants to keep retrans issues separate, but ranking member Anna Eshoo (D-Calif.) does not want to push that issue into the planned Communications Act rewrite, which will likely be years in the making. STELA must be renewed by year’s end or it will sunset.

The last time around, in 2009, the bill got loaded down with other issues, and the deadline expired with no new bill. The draft was said not to address retrans blackouts, so that will likely not sit well with Eshoo, who wants to put an end to them. With TiVo in her district, getting rid of the ban is probably not high on her list, either. Her office would not comment on the potential bill.

Keeping retrans out of the bill entirely was always a tough ask since the bill also renews the FCC’s authority to enforce good-faith bargaining.

A subcommittee spokesman would neither confirm nor deny that such a draft was in the works, but said a draft was still targeted for the end of March.

On the Senate side, bipartisan leadership of the Senate Commerce Committee this week asked for input on what should be included in STELA, and the responses included suggestions along similar lines as the reported House draft, including removing the sweeps exception, getting rid of the set-top integration ban, addressing coordinated retrans and getting rid of the must-buy requirement.

TAKEAWAY

Broadcasters are worried over the retrans implications of a draft to reauthorize the bill that gives satellite providers the right to deliver local broadcast-TV signals.

September