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STELA Draft Unites NCTA, NAB

WASHINGTON — The National Cable & Telecommunications Association and the National Association of Broadcasters, engaged in a battle over retransmission consent, both said they can back the draft of Satellite Television Extension and Localism Act legislation offered up by the House Communications Subcommittee’s Republican leadership.

Cable had the upper hand on the bill’s content at the outset, and arguably still does, but broadcasters scored a victory when a provision that would have excised the must-buy tier mandate for stations that opt for retransmission consent was dropped from the draft.

While both sides can still find something in the bill that is hard to for them swallow — and sparred over retrans and must-buy provisions last week on Capitol Hill — neither side is being forced to take a poison pill.

Broadcasters have received the sweetener of a provision blocking the FCC’s tightening of joint service agreements, while cable operators would get out from under the set-top integration ban and be permitted to negotiate retransmission consent independently with stations allied in sharing arrangements.

The draft was vetted in the subcommittee last week and has many more Hill gauntlets to run — including Democrats who said they cannot support the bill as it is as currently drafted.

But the committee has managed to get broadcasters and cable operators — and satellite providers, for that matter — to support a bill that both protects broadcast shared-service agreements and limits coordinated retransmisson consent.

“We support legislation offered by chairmen [Fred] Upton [R-Mich.] and [Greg] Walden [ROre.] reauthorizing STELA, and proposing narrowly targeted video reforms,” the NCTA said last week. “We particularly support eliminating the FCC’s integration ban rule — a rule that applies only to cable operators among MVPD competitors and that forces consumers to bear needless costs. And we support efforts to address anti-competitive concerns that consumers are harmed by local broadcasters jointly negotiating signal carriage agreements.”

The draft also would prevent the FCC from taking any action on making joint sales and services agreements attributable under FCC ownership caps unless it does so as part of its congressionally mandated quadrennial ownership review.

The FCC has said it was going to combine the 2010 and 2014 quadrennial review and launch that at the March 31 meeting. But it also said it was going to separately make JSAs above 15% attributable under its ownership caps and give current JSAs that would violate those rules a couple years to unwind.

Last week, the NAB said it could live with the bill as well, even though it prevents coordinated retransmission consent agreements among stations and their JSA partners in a market unless the cable operator agrees to it, and would remove the ban on cable operators dropping TV stations during the four sweeps periods.

Just as the CableCard provision is the big draw for NCTA, preventing JSAs from becoming attributable would be a big win for broadcasters, though it is unclear how that would work since the FCC still plans to make JSAs attributable by the end of the month so long as the chairman can get three votes.

“NAB is extremely encouraged by the discussion draft circulated … by House Republicans under the leadership of chairmen Upton and Walden,” the NAB said two weeks ago, and gave it a shout out at the hearing as well. “Although we were hopeful for a clean bill from the Committee, the product put out today is legislation NAB is pleased to support.”

STELA is a long way from its fi nal form, however, with a hearing on the draft last week (March 12) in the House Communications Subcommittee. Sources said there is also a hearing teed up in the Senate Judiciary Committee March 26.

If the law, which would renew the compulsory copyright license for distant-signal TV stations, is not reauthorized by year-end, it will sunset.

TAKEAWAY

House Republicans appear to have crafted a STELA reauthorization bill that both broadcasters and the cable industry can live with.