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Broadcasters Keeping Close Watch on SHVERA Bill

In what would be a victory for over-the-air broadcasters if it stayed as it is, the discussion draft of a Satellite Home Viewer Act Reauthorization and Extension Act (SHVERA) bill currently being circulated on the Hill in advance of a hearing this week does not include provisions allowing satellite or cable companies to import adjacent-market stations to fix so-called split markets.

The draft, according to a copy obtained by B&C/Multichannel News is from House Communications Subcommittee Chairman Rick Boucher (D-VA), who has said he would like to address that issue, but also said he needed the bill to be as narrow as possible so that it could pass this year.

The Copyright Office has suggested that it was time to harmonize the cable and satellite compulsory licenses. Currently, cable's license is based on gross receipts, while satellite's is a flat fee. But this may not be the venue for that.

Split markets are ones where the market crosses state lines and some viewers have to watch stations from the adjacent state.

EchoStar, for one, has been pushing Congress to allow importation of signals from nearby stations into those markets so viewers can get their own local news and weather and sports teams.

Broadcasters fear that could reduce their leverage in retransmission consent negotiations, and point out that satellite companies can already make deals with stations to import that local programming, just not the network programming or syndicated programming that could siphon viewers from the affiliate of the same network currently being delivered to those viewers from across the state line.

If the reauthorization bill did not pass, the satellite blanket license would expire and satellite companies would have to negotiate individually with network affiliates to import their signals to viewers who cannot receive a good local signal of the same affiliate in their market.

The bill could still be amended, however, and Rep. Mike Ross (D-Ark.) is expected to try to add an amendment to the bill that would allow for cable and satellite companies to "fix" split markets by importing broadcasters might call "proximate" rather than "distant" signals. Affiliate groups have been taking their case against that bill, particularly Fox in recent days.

One issue the bill will need to address is how an "unserved" household is defined. Not only will the FCC have to help come up with a definition of unserved household for its broadband plan, but it will need to figure out who is unserved for the purposes of importing distant broadcast network affiliate signals.

Up until June 12, the definition was a viewer who could not get a grade B signal, but in digital that grade B distinction goes away. The bill strikes that phrase, as it does the term analog, which appears frequently in previous versions.

The bill gives the FCC 180 days to close an open inquiry on how to determine digital distant signal carriage and come up with a new predictive model.

Broadcasters have vigorously opposed enlarging the bill to deal with split markets, arguing that they have paid for the exclusive rights to import valuable syndicated programming. Allowing satellite and, potentially, cable operators to import duplicative programming would constitute a "free copyright license" that would "drive local TV stations out of business," ABC affiliate board chairman Darrell Brown said in a letter to House Energy & Commerce Committee Chairman Henry Waxman (D-CA) in April.

Brown says that without territorial exclusivity, networks, sports leagues and studios will move their content to cable and satellite. Brown painted a gloomy picture for broadcasters that would only darken if Congress adopted the change.

"Local television station personnel are being laid off and furloughed in record numbers, and many of these stations are now in receivership," he said. "It is difficult to believe Congress would seriously consider giving pay cable and satellite companies an unfair competitive advantage of this kind over free, local, over-the-air television service."