STELA Reauthorization Act of 2014

Background

According to a report written by the Congressional Research Service (CRS), there are "three primary ways for a household to receive broadcast television signals: by using an individual antenna that receives broadcast signals directly over-the-air from a television station; by subscribing to a cable television service that brings a wire into the house that carries the retransmitted signals of broadcast stations; or by subscribing to a satellite television service that puts a dish on the roof that receives the retransmitted signals of broadcast stations." The Satellite Television Extension and Localism Act of 2010 (STELA) was the latest in a series of laws regulating satellite television services. If STELA were to expire, the CRS projects that "approximately 1.5 million satellite television households would likely lose distant network broadcast signals."

Provisions of the bill

This summary is based largely on the summary provided by the Congressional Research Service, a public domain source.

The STELA Reauthorization Act of 2014 would amend the Communications Act of 1934, as amended by the Satellite Television Extension and Localism Act of 2010 (STELA), to extend until December 31, 2019, the exemption from retransmission consent requirements (which prohibit cable systems or other multichannel video programming distributors [MVPDs] from retransmitting broadcasting station signals without the authority of the originating station) for satellite retransmissions of network station signals to subscribers located outside of a station's local market who reside in unserved households (commonly referred to as "distant signals"). Extends until January 1, 2020: (1) the prohibition on exclusive retransmission consent contracts, and (2) the requirement that television broadcast stations and MVPDs negotiate in good faith.

The bill would direct the Federal Communications Commission (FCC) to prohibit television broadcast stations from coordinating their negotiations or negotiating jointly in the same local market to grant retransmission consent to an MVPD, unless such stations are directly or indirectly under common de jure control permitted under FCC regulations.

The bill would establish a process to delay application of the FCC's amendments to joint sales agreement (JSA) rules under which a television station that sells more than 15% of the weekly advertising time of another station in the same market is attributed an ownership interest subject to ownership limitation rules. Prohibits a JSA party that submits a petition to the FCC for a waiver of such attribution rules from being considered in violation of ownership limits until the later of: (1) 18 months after the FCC denies such petition, or (2) December 31, 2016. (Currently, the FCC requires compliance with ownership limits within two years of the FCC's order adopting such amended attribution rules.)

The bill would remove a prohibition against deletion or reposition of a local commercial television station during periods in which major television ratings services measure the size of local television station audiences (commonly referred to as "sweeps" weeks).

The bill would repeal an integration ban that prohibits certain MVPDs from placing in service new navigation devices (set-top boxes) for sale, lease, or use that perform both conditional access (mechanisms that provide for selective access and denial of specific services and can prevent a signal from being received by unauthorized users) and other functions in a single integrated device.

The bill would require a Comptroller General (GAO) report concerning changes to carriage requirements currently imposed on MVPDs that would be required, or beneficial to consumers, if Congress implemented a phase-out of statutory compulsory licensing procedures (a licensing and royalty distribution system administered by the U.S. Copyright Office under which cable and satellite operators may retransmit programming, without negotiating with every copyright holder, by paying licensing royalties at statutorily-defined rates determined by Copyright Royalty Judges or by using a royalty-free license for the retransmission of local broadcasts) under federal copyright law.

The bill would direct satellite carriers to submit annual reports to the FCC regarding: (1) the local markets in which television broadcast station signals are retransmitted with a community of license, and (2) the use and potential use of satellite capacity for the retransmission of local signals in each local market. Terminates such reporting requirements after each satellite carrier has submitted five reports.

Congressional Budget Office report

This summary is based largely on the summary provided by the Congressional Budget Office, as ordered reported by the House Committee on Energy and Commerce on May 9, 2014. This is a public domain source.

Under current law, satellite carriers pay royalty fees for the right to transmit certain television signals to their subscribers without obtaining permission from copyright holders. H.R. 4572 would extend provisions of current law that allow satellite carriers to transmit copyrighted material but would not extend the license that allows transmission without specific permission from the copyright holders. That license will expire on December 31, 2014. The bill also would direct the Federal Communications Commission (FCC) to delay or amend certain regulations affecting television stations and cable carriers. Finally, H.R. 4572 would require the Government Accountability Office and the FCC to prepare several reports for the Congress concerning copyright issues and access to non-local programming.

Based on information from the FCC, the Congressional Budget Office (CBO) estimates that implementing H.R. 4572 would cost about $1 million over the 2015-2019 period, assuming the availability of appropriated funds, for the required reports and regulatory actions. Pay-as-you-go procedures do not apply to this legislation because it would not affect direct spending or revenues.

H.R. 4572 contains no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA) and would not affect the budgets of state, local, or tribal governments.

H.R. 4572 contains private-sector mandates, as defined in UMRA, on television broadcasters and satellite carriers. It would extend two mandates on television broadcasters that are set to expire under current law and impose new mandates on television broadcasters and satellite carriers. Based on information from the FCC and industry sources, CBO estimates that the aggregate cost of complying with the mandates in the bill would fall below the annual threshold established in UMRA for private-sector mandates ($152 million in 2014, adjusted annually for inflation).

The bill would extend for five years two existing mandates regarding the retransmission of broadcast programs by distributors of video programming services (pay television providers such as cable and satellite carriers). It would extend the mandate on television broadcasters that prohibits them from entering certain exclusive contracts with distributors of video programming services for the rights to carry (retransmit) their broadcast programs. That is, broadcast television stations must provide an opportunity to all distributors of video programming in the same market to negotiate an agreement to retransmit their broadcast programs. Second, it would extend the mandate on television broadcasters that prohibits them from receiving compensation from satellite carriers for retransmitting distant (non-local) broadcast programs to subscribers who live in areas that do not receive those broadcast signals. The cost of those mandates for broadcasters would be the net income forgone as a result of compliance with the prohibitions. Based on information from industry sources, CBO expects that the cost of extending those mandates would be small.

The bill also would prohibit television broadcasters from negotiating agreements on a joint basis with another television broadcaster in the same local market for re-transmission of their broadcast programs by distributors of video programming services. The prohibition would not apply to broadcast stations in the same market under common control. The cost of the mandate for broadcasters would be the loss of income as a result of the ban on joint negotiations. Under current law, a FCC rule that is scheduled to be in effect in June would ban such negotiations for the top four broadcast stations in a local market. The bill would broaden the ban to cover all television broadcasters in a local market. According to available studies, such joint negotiations are mostly done by the top broadcast stations. Therefore, CBO expects that the incremental cost to television broadcasters of the broader ban in the bill would not be large.

Lastly, the bill would impose a mandate on satellite carriers by requiring them to submit a report to the FCC containing certain information about the markets in which they provide local service. According to industry sources, satellite carriers already keep track of the information required to compile the report. Therefore, CBO estimates that the cost of preparing the data for the report would be minimal.

Procedural history

The STELA Reauthorization Act of 2014 was introduced into the United States House of Representatives on May 6, 2014 by Rep. Greg Walden (R, OR-2). The bill was referred to the United States House Committee on Energy and Commerce. On July 11, 2014, it was reported (amended) alongside House Report 113-518. The bill was scheduled to be voted on during the week of July 21, 2014.

Debate and discussion

The bill was supported by 21st Century Fox, Disney–ABC Television Group, the American Cable Association, the American Television Alliance, CBS, DirecTV, and the National Cable and Telecommunications Association.

The National Association of Broadcasters (NAB) supported the bill. The organization's president, Gordon Smith, announced that "NAB thanks Chairmen Goodlatte and Coble for guiding through the House Judiciary Committee a sensible, non-controversial STELA reauthorization bill ensuring that satellite TV subscribers without access to local TV signals can continue receiving popular programming from broadcast TV networks. NAB strongly supports this practical approach to STELA."

The United States Cattlemen's Association (USCA) supported the bill because it "will help provide continued access to local news and broadcasting services in rural regions."