Summary of Congressional Hearings on STELAR

Curtis LeGeyt, NAB’s Executive VP of Government Relations, gives us an overview of the House Energy & Commerce telecom subcommittee hearing on STELAR June 4th and the Senate Commerce, Science & Transportation telecom subcommittee hearing June 5th on Capitol Hill.

Tuesday, June 4th, the House Energy and Commerce telecom subcommittee held a hearing entitled “STELAR Review: Protecting Consumers in an Evolving Media Marketplace.” Gordon Smith testified on behalf of NAB, as well as witnesses from AT&T, Boycom Vision (small cable) and Public Knowledge (public interest). Gordon’s written testimony and the full hearing materials are available here.

Gordon’s testimony focused on the merits of STELAR’s expiring provisions. He argued that while STELAR succeeded in creating a competitive satellite industry, it now causes affirmative harm to neglected viewers in the rural markets DirecTV fails to serve with no technological justification. As discussed in more detail below, several members followed up Gordon’s testimony by questioning the panel on the harm posed to their constituents by STELAR’s distant signal license, while a great deal of attention was also paid to the retransmission consent system and media consolidation.

All told, most members undertook this inquiry without signaling a decision on the underlying STELAR reauthorization. With the exception of Reps. Eshoo (D-CA) and Scalise (R-LA) – who would like to see STELAR used as a vehicle for a massive reform of the video marketplace – only Subcommittee Chairman Mike Doyle (D-PA) affirmatively stated a desire to see STELAR reauthorized.

Full committee Chairman Frank Pallone (D-NJ) remained more open-minded and expressed his interest in focusing on serving consumers, noting a lack of local service by satellite companies but also an increase in retransmission consent blackouts. Subcommittee Ranking Member Bob Latta (R-OH) highlighted local broadcasting as a bedrock in the media marketplace, especially during times of emergency, followed by similar sentiments from Reps. Clarke (D-NY), Shimkus (R-IL), McEachin (D-VA), Olson (R-TX), Soto (D-FL), and DeGette (D-CO). Taking it a step further, Reps. Loebsack (D-IA) (who has written a public letter), Gianforte (R-MT), and Olson (R-TX) spoke to the harm caused by STELAR to neglected markets in their districts or elsewhere in their states.

Full committee Ranking Member Greg Walden (R-OR) reiterated his public questioning of whether the 30 year old satellite legislation is truly needed in today’s marketplace, highlighted the importance of local broadcasting to local communities, and asserted that any review must be transparent and driven by data. Following that lead, several other members questioned the merits and underlying use of STELAR, including Reps. Long (R-MO) (government intervention is not always the answer, need to take a hard look at STELAR rather than rubber stamp it), Olson (R-TX), Flores (R-TX) and Johnson (R-IL). These members sought specific information from AT&T on the use of STELAR to import distant signals rather than carry local, as well as information on DirecTV’s previous promises to deliver local to all local markets. NAB will be working closely with these offices on what, if any responses, they receive from AT&T and will encourage follow-up if those responses are insufficient (as they have been in the past).

Members questioning the panel on rising consumer prices or retransmission consent “blackouts” included Reps. Eshoo (D-CA) (noting both her legislation to require telecoms to provide transparent billing and forthcoming bill with Rep. Scalise), Scalise (R-LA), McNerney (D-CA), McEachin (D-VA), Cardenas (D-CA) and Brooks (R-IN). Amidst this proverbial “food fight” over the cost of programming, Gordon defended broadcasters’ need for fair compensation through marketplace negotiations for retransmission consent and explained how this revenue is key to investment in local content and investigative reporting. No members embraced specific policy changes at this hearing and even the Eshoo/ Scalise agreement remains in concept, at least publicly.

Overall, we believe this hearing reaffirmed that this committee will take a critical look at the merits of the expiring STELAR provisions before moving forward with any legislation, and that no decision has been made in that regard. NAB and will continue to make the case for STELAR expiration tomorrow when Gordon testifies before the Senate Commerce Committee.

 

Following on the heels of June 4th’s House E&C hearing, the Senate Commerce Committee held a hearing on the “State of the Television and Video Marketplace” June 5th. Similar to the House hearing, the panel’s questioning focused largely on STELAR expiration and the cost of video programming. Gordon Smith again testified on behalf of NAB, as well as witnesses from NCTA (big cable), Nielsen, and Free Press (public interest). Gordon’s written testimony and the full hearing materials are available here.

Although billed as a broader video hearing, Gordon’s testimony again argued forcefully for STELAR’s expiration and the harm posed to local communities by the distant signal importation that the law enables. While Nielsen has no position on STELAR, the NCTA and Free Press witnesses both advocated for reauthorization, mainly to extend the good faith requirements for retransmission consent negotiations.

Similar to the House hearing, most members approached this hearing without signaling a decision on the question of STELAR reauthorization, though several Senators indicated an interest in examining decades old laws and regulations on the merits. To that end, a number of Senators solicited the panelists’ views on STELAR expiration, allowing Gordon to make the arguments for broadcasters. This included Sens. Cantwell (D-WA) (Ranking Member of Committee), Capito (R-WV), Lee (R-UT), and Cruz (R-TX). Much of this discussion raised questions about the impact of STELAR on rural communities, and how to create a level playing field between regulated services like broadcast/cable and unregulated tech giants.

Several Senators went a step further towards the broadcast position. Sens. Blunt (R-MO) and Tester (D-MT) both discussed the neglected markets in their states and allowed Gordon to make the case that STELAR is incentivizing this disservice from AT&T-DirecTV. Sen. Blackburn (R-TN) expressed her disfavor of compulsory copyright licenses and continued skepticism of whether satellite legislation is needed. (Note: Senator Blackburn also questioned Gordon on NAB’s inconsistency on demanding fair retransmission consent compensation while advocating against a performance royalty for radio, which he handled ably.)

Several Senators  also expressed concern about rising programming costs (although not exclusive to retransmission consent) and blackouts, including Sens. Wicker (R-MS) (full Committee Chairman), Cantwell, Thune (R-SD) and Schatz (D-HI) (who also focused on cable profits). Those Senators also reiterated the critical role that broadcasters play in local communities.

Finally, several additional broadcast-relevant issues were touched upon. Sen. Schatz raised the lack of diversity in broadcast ownership and Gordon touted the work of the NAB Leadership Foundation’s BLT program and called for reinstatement of the minority tax certificate program. Sen. Markey (D-MA) used his time to discuss two pieces of legislation that he has authored: the first, to provide pricing transparency to consumers on telecom bills and the second, to require cable operators like Charter to negotiate in good for carriage of out-of-market broadcast programming where that broadcaster is willing and able (pursuant to contractual rights). Sen. Udall (D-NM), highlighted concerns with what he perceives to be lamentable coverage by broadcasters of popular events rather than issues like climate change, but also gave Gordon the opportunity to argue that broadcasters invest in journalism and that we are an unbiased news source critical to the democracy.

As with yesterday’s House hearing, we believe this hearing reaffirmed that the Congress will take a critical look at the merits of the expiring STELAR provisions before moving forward with any legislation. While Senate Commerce Chairman Wicker had previously been quoted in the press as saying STELAR is “must-pass,” his press comments this morning had noticeably shifted to: “I think it should be reauthorized. … Members of the committee are being thoroughly courted by all parties concerned from a variety of angles. And it’s not for me to say what the result will be.” No one else on the Committee took the affirmative position today that STELAR should be reauthorized, and our discussions will continue with each of these offices.

– Curtis LeGeyt, NAB Government Affairs