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Policy

Satellite Act Draft Makes Rounds on Hill

7/19/2009 2:00 AM Eastern

The House Judiciary Committee has circulated a draft of the Satellite Home Viewer Extension and Reauthorization Act that has a little something for everyone.

The act would reauthorize the blanket copyright license that allows satellite-TV providers to deliver out-of-market network-affiliated TV stations, or distant signals, to viewers who can’t receive a viewable signal from their local affiliate.

But a copy of the draft — which was being circulated by committee chairman Rep. John Conyers (D-Mich.), a source said — included a phaseout of that compulsory license for broadcasters who could show they controlled the rights to all their programming, essentially allowing them to opt out of the license and negotiate individually with satellite carriers.

That is something some broadcasters have been pushing hard for. The Copyright Office has recommended phasing out the compulsory license.

The bill also addresses the issue of short markets, or markets that lack affiliates of one or more networks, but in a way that disallows attempts to resolve the matter without legislation.

For instance, in some markets ABC has struck secondary affiliation deals that place its programming on a station’s digital multicast channel. The bill would allow satellite providers to import a distant signal even where such digital arrangements are in place.

“Multicast affiliations don’t count as serving the market,” said one frustrated broadcast executive.

The bill would allow Dish Network back into the distant-signal business once it has delivered local TV-station signals into all 210 markets. It is under an injunction not to do so and is currently in an arm’s-length agreement with National Programming Service, which delivers those distant signals to Dish subscribers.

And for those who have been following the accretion process of the SHVERA name, which began as SHVA (Satellite Home Viewers Act), then SHVIA (Satellite Home Viewer Improvement Act) and most recently SHVERA (Satellite Home Viewer Extension and Reauthorization Act), the bill would replace that with a new name and alphabet soup of initials — SHVDTA, or the Satellite Home Viewer Digital Television Act of 2009.

“We commend House Judiciary for a very thoughtful discussion draft that addresses multiple issues,” said Dish Network in a statement. “[It] puts competitors on a level playing field and takes into consideration the needs of consumers.”

SHVERA must be reauthorized by year-end or the compulsory license will sunset. The judiciary panel’s draft will be marked up before the August recess, said a source.

The bill must be reconciled with a House Commerce Committee version that has already been marked up.

The two committees split jurisdiction, with the judiciary panel focusing more on the copyright issues, like setting rates and the carve-out for broadcasters who can secure their own single-source license for programming.

Elsewhere on the SHVERA front, Rep. Mike Ross (D-Ark.) reintroduced his bill to fix so-called split markets, another issue that could wind up in the final reauthorization bill. Split markets are Nielsen DMAs that cross state lines and where some pay TV subscribers receive a local station from an adjacent state, rather than their own.

A source said his effort the week before to rustle up some co-sponsors had produced 10 of them.

The bill is narrower than Ross’s 2007 version. Nevertheless, it will still run into pushback from broadcasters, who say such a change could cost them hundreds of millions of dollars. They argue that allowing multichannel video programming distributors to import local TV network-affiliated stations from adjacent, in-state markets into markets that cross state lines will provide duplicative programming that adversely impacts exclusivity deals and retransmission-consent negotiations. 

Ross and satellite providers argue that the measure simply gives local viewers access to their local stations denied by a gerrymandered DMA system. They also counter that the exclusivity argument is weakened by the availability of most TV shows worldwide at the click of a mouse.

In the 2007 version of the bill, stations could be imported across state lines into the entire adjacent market. In this version, only the so-called “adjacent underserved counties” where the market crosses the state line will get the in-state imports.

Other new elements of the bill, according to Ross:

  • It is limited to only those counties where subscribers can't get home-state news, sports, and entertainment.

  • It encourages MVPDs to carry both local and adjacent stations, but requires local service first.

  • It requires MVPDs to negotiate retransmission consent agreements for carriage in adjacent underserved counties — except where the station is legally unable to give such consent.

  • It clarifies that cable operators, like satellite operators, can carry such stations on a royalty-free basis.

Broadcasters succeeded last month in keeping any split-market amendments from being added to the House Commerce mark-up of the bill.

September