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House Judiciary Wades Into STELA

The House Energy & Commerce Committee Thursday passed the Satellite Television Extension and Localism Act (STELA) on a bipartisan vote, but that doesn't mean the legislation is done in the House.

The Judiciary Committee, which shares jurisdiction, held a hearing on compulsory cable and satellite licenses, including those in STELA, only hours after that vote, and it was clear cable, satellite, and broadcast representatives would get another venue to pitch their positions.

Retrans blackouts were a hot topic of discussion among some concerned lawmakers, as were orphan counties--where viewers can't get in-state news or sports or weather because of gerrymandered DMAs that put them in the market of another state. Cable ops--represented by American Cable Association President Matt Polka--would like to see more retrans reforms than were in the STELA bill that passed in the E&C committee, though they were pleased with its provision preventing coordinated retrans negotiations, while broadcasters were not happy with that provision. Satellite operators, too, would like to see more retrans muscle in the STELA bill that ultimately passes.

Polka and Dish exec Stanton Dodge squared off with National Association of Broadcasters witness Marci Burdick at the STELA hearing, which was in the Subcommittee on Courts, Intellectual Property, and the Internet.

Polka and Dodge argued for preventing blackouts during negotiation impasses, but Burdick said that the signal was the only leverage stations had when facing large MVPDs, the top four of which control 60% of the country. She pointed out that 90% of the blackouts involved either Dish, DirecTV or Time Warner Cable. She said 50% involved Dish and that there might be a business strategy involved there.

She said Congress could address the problem by getting rid of the early termination fees that make it harder for viewers to drop service, pointing out that broadcast TV station signals are never blacked out to over-the-air viewers.

Dish's Dodge said that even one blackout was too many, and even one hour was too long if it was during the Super Bowl.

Rep. Doug Collins (R-Ga.) was particularly concerned about the four orphan counties in his district and viewers who couldn't get local news and weather, particularly in emergencies. He asked whether if broadcasters would clear the rights to that programming, if Dish would deliver it. Dodge said he thought that did not give the viewers what they wanted, which included the national programming. Collins, who is a satellite subscriber himself, did not like the answer. Burdick said she was willing to work to get those rights cleared, and pointed out broadcasters and cable operators had worked together on a solution for those counties.

Polka said it had been his members experience that it was difficult to negotiate with broadcasters over issues like orphan counties, where even when it is legal to import distant signals to significantly viewed stations, TV network contracts prevented it.

Collins also did not like an answer from Polka and let him know it. Rep. Judy Chu (D-Calif.) pointed to the Aereo case being decided by the Supreme Court and asked for input from the panel. Polka said ACA supported the disruptive technology, as did Dodge, while Burdick said its innovation was only in the way it tried to engineer its way around the law.

Collins said Polka's description of it as disruptive to business plans was a curve ball, a generous description at best, and a dishonest one at worst.

Polka told the legislators that they’re going to need to have a separate conversation about over-the-top video.