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Broadcasters Fear Dressed-Up STELA

WASHINGTON — The “Local Choice” proposal in a Senate bill has thrown a scare into broadcasters, who have made it one of their key talking points in trying to convince Congress not to tackle several video-regulation reforms this year.

But TV-station owners are concerned about a number of regulatory flashpoints that could surface as the Senate considers its version of satellite-license reauthorization legislation, according to a copy of some National Association of Broadcasters talking points.

Local Choice, offered up by Senate Commerce Committee leaders as a possible addition to the must-pass legislation, would let pay TV subscribers decide whether they wanted to pay for broadcast-station signals, essentially scrapping the retransmission-consent negotiation model for direct sales from broadcasters to viewers.

But that was only one of the “extraneous and harmful” additions broadcasters feared could be added to the bill.

They have reason to be concerned. Sen. Jay Rockefeller (D-W.Va.), the retiring Senate Commerce Committee chairman, has signaled he wants to use the Satellite Television and Localization Act (STELA) as a vehicle for video reforms, some backed by cable operators. The new version of STELA — called the Satellite Television Access Reauthorization Act of 2014, or STARA — renews the compulsory license that allows satellite-TV providers to import distant network-affiliated TV-station signals in areas where there is no in-market access to a comparable affiliate.

The reauthorization, which affects some 1.5 million pay TV subscribers, must pass before Rockefeller exits the Congress.

From a document obtained by Multichannel News, here are some of the broadcasters’ fears (in addition to Local Choice), as expressed in their own talking points:

Elimination of sweeps prohibition: “Eliminating the [rule forbidding cable systems from dropping TV stations during Nielsen’s sweeps periods] gives pay TV the ability to target smaller markets, allowing cable and satellite to pull broadcast programming during the periods when local stations are measured, thus wreaking havoc with their advertising rates and jeopardizing their station revenues.”

Removal of basic-tier/lifeline services: “Today, pay TV subscribers are able to get local broadcast programming from the basic tier — the cheapest and most accessible tier available from a pay TV provider. The basic tier is considered the ‘lifeline tier’ because viewers rely on this programming during times of emergency. Removing broadcasters from the basic tier would allow pay TV companies to place broadcasters in a higher, more expensive tier, thus, charging consumers more for content they get today on the least expensive package.”

Ban on joint retransmission-consent negotiations: “Pay TV companies are working to prevent any joint broadcast retransmission-consent negotiations, which makes these negotiations more expensive and more difficult for local broadcasters. Congress should not ban small broadcasters from getting the financial efficiencies of jointly negotiating.”

Restricting content owners ability to control their online programming: “Literally hundreds of millions of dollars are spent annually on broadcast programming, which is some of the most watched content on television. Some in Congress have talked about dictating to content owners when, where and how local broadcast content is available online. This kind of heavy-handed government involvement in programming rights would stifle the already abundant content currently available.

Comprehensive Designated Market Area (DMA) reform: “Pay TV companies are anxious to dismantle the local broadcasting model by picking apart the DMA system, which allows local advertisers to target their local customers. Markets should not be altered to give pay TV companies an advantage while negotiating with local stations for carriage of local stations.”

Forced carriage/binding arbitration: “Pay TV companies have asked for increased government involvement in the free marketplace negotiations. They are asking for government-mandated carriage and forced baseball-style arbitration in retransmission-consent disputes. However, this kind of government involvement in private marketplace negotiations would only reward bad actors in the pay TV space and distort true market value of broadcast content.”