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Sources: House E&C Strikes STELA Compromise

According to multiple sources, the House Energy & Commerce Committee has come up with a compromise Satellite Television Extension and Localism Act bill that would not block the FCC's effort to make some joint sales agreements attributable under FCC ownership rules - as the original draft would have done - but would give stations an extra six months to unwind deals and would essentially prevent the FCC from taking any action on the syndicated exclusivity and network nonduplication rules until after the Government Accounting Office (GAO) studied them.

According to a summary of the compromise, if a broadcaster applies for a waiver of the new JSA rule within 90 days of the law's enactment, they wil have 18 months or until Dec. 31,2016 to unwind the deal, which gives broadcasters six more months than the FCC's March 31 order provided.

According to those sources, the compromise, expected to be substituted for the original bill at the markup May 8, would also:

1) Extend STELA for five years, which means a) extending the retransmission consent exemption for distant network TV station signals imported into a market without them; b) extending the requirement for good faith retransmission consent negotiations and c) prohibiting exclusive TV station carriage contracts.

2) Prohibits a TV station from jointly negotiating retrans with another station in the same market unless the stations are commonly owned.

3) Eliminates the rule that prohibits cable operators from dropping a TV station during a sweeps period.

4) Eliminates the set-top box integration ban from FCC CableCARD rules. The FCC could reinstate the ban if it decided that were necessary.

The bill also requires a study, which is usually a way to address concerns of members without those concerns torpedoing a bipartisan compromise.

GAO would be directed to study what changes to current broadcast carriage by cable and satellite should resume if Congress phased out the compulsory license. The last STELA renewal in 2010 also called for such a study.

According to one source, committee leaders will also ask for the GAO study on network nonduplication and syndicated exclusivity rules, which would have the effect of delaying any FCC action, and another study on competition in local ad markets, including cable interconnects, which is something broadcasters have been calling for, and online targeted advertising.

If the compromise passes through committee as expected, it will likely get House approval, putting pressure on the Senate to come up with a passable bill or a compromise House bill would likely be the default.

The STELA Republican draft was approved unanimously in the Communications subcommittee March 25 with a provision that blocked the FCC's JSA order, but with an asterisk that there was still work to do.