A STELAR Outcome For Cable

Retrans Tweaks Count as Industry Wins in New Bill
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WASHINGTON — Cable operators have been praising the new satellite-reauthorization bill, and not just because it has, somewhat miraculously, avoided the drama that attended the last reauthorization in 2009 (which turned into 2010).

They had reason to be upbeat. The bill that passed the House and Senate two weeks ago with nary a discouraging word — the Satellite Television Extension and Localism Act Reauthorization, or STELAR — included some retransmission-consent changes and scrapped the ban on set-tops with integrated conditional access, giving cable operators several victories.

LESS-HEATED PROCESS

Last time around, the reauthorization process was far more contentious, and led to a months-long delay in renewing the compulsory license, a must-pass piece of legislation that grants satellite-TV providers the right to deliver distant-network signals to viewers who can’t receive a sufficiently strong over-the-air signal in their own market, with a bill that avoided retransmission-consent issues.

Cable operators had been hoping for a long-shot provision introduced in the Senate that would have essentially eviscerated retransmission consent, turning it into a direct negotiation between broadcasters and pay TV customers. But that was a bridge too far and would have likely created the same kind of impasses as in 2009.

Preventing blackouts during disputes had also been on the table, but was among various provisions that had to be dropped in order to secure bipartisan support.

But look for the “local choice” provision to resurface next year as the House prepares to weigh in on a Telecommunications Act revamp and one of its Senate co-sponsors, Sen. John Thune (R-S.D.), takes over as chairman of the Senate Commerce Committee.

The bill’s passage in both houses was being hailed as an example of the kind of bipartisan lawmaking that has been in short supply.

While the pay TV-backed American Television Alliance and the National Cable & Telecommunications Association praised passage and urged President Obama to sign the legislation into law, the National Association of Broadcasters and the broadcaster-backed group TVFreedom were silent on the bill. Spokespeople for both of the latter said their groups were “neutral.”

Broadcast lobbyists speaking not for attribution put the best face on the bill, pointing out the absence of the retransmission-eviscerating portions and blackout prohibitions.

Then there were the six extra months that stations will get to unwind joint sales agreements that the FCC this year made attributable as ownership interests.

BOX BAN NIXED

Eliminating the set-top ban had been one of the NCTA’s big asks, and appeared at one point to be in some trouble, given the opposition of Sen. Ed Markey (D-Mass.) in particular. Markey had blocked passage of a Senate version of the bill, but he relented.

Federal Communications Commission chairman Tom Wheeler promised to get to work ASAP on finding a successor to the CableCard hardware fix for promoting a retail market in boxes, something the integration ban failed notably to achieve. The integration ban won’t sunset for a year, an effort to accommodate Markey and other supporters.

Broadcasters had reason not to exactly be celebrating, given that the bill extended the prohibition on coordinated retransmission talks among the top four stations in a market to all non-commonly owned stations. That was a change that the American Cable Association had been pushing for and requires the FCC to look at what should be defined as good-faith negotiations.

STELAR at a Glance

Key provisions in the Satellite Television Extension and Localism Act Reauthorization:

► Extends satellite compulsory license to Jan. 1, 2020;

► Allows the FCC to modify markets to better deliver local news or in-state programming, unless it is technically or economically infeasible for the satellite carrier to do so;

► Authorizes MVPDs to import significantly viewed stations;

► Requires the FCC to launch a rulemaking within nine months to review its “totality of circumstances” text for good-faith negotiations;

► Gives TV station owners six more months to come into compliance with new rules making some joint sales agreements attributable as ownership interest;

► Gives cable operators the ability to drop TV station signals during sweeps periods;

► Eliminates the set-top integration ban one year after enactment of the Act and extends all waivers of the ban through Dec. 31, 2015. It also requires the FCC to launch a working group to come up with a successor to the Cable- Card method of separating channel-surfing and security functions.

— John Eggerton

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