Cable Retrans Reform Effort Falling Short

The pay TV industry’s heavily lobbied retransmission consent reform campaign doesn’t appear likely to result in a major pummeling for broadcasters on Capitol Hill this year, but cable and satellite TV operators may score some gains that could hurt the ability of  broadcasters to negotiate future retrans deals.

The focus of the pay TV efforts to hobble broadcasters has been legislation aimed primarily at extending the ability of satellite TV operators to import distant broadcast signals in certain limited circumstances for five years.

The legislation is known as the Satellite Television Access and Viewer Rights Act, or STAVRA, in the Senate and the Satellite Television Extension and Localism Act, or STELA, in the House.

The pay TV lobbyists loaded the legislation with retrans reform extras, but have had mixed success in making them stick.

Broadcasters led by the NAB knocked out one provision in the Senate bill that would have forced stations to market their signals directly to pay TV subscribers, so-called “local choice,” and another that would have barred broadcasters from denying pay TV subscribers access to their online signals.

“STAVRA was dramatically improved with the removal of the broadcast-only a la carte idea and language that would have barred online program blocking,” said Dennis Wharton, a spokesman for the National Association of Broadcasters.

Even so, STAVRA continues to include a reform provision that also is in a House-passed version of the satellite TV bill that would bar TV stations in the same market from coordinating retrans deal negotiations, unless those stations are jointly owned.

In addition, STAVRA, unlike the House bill, would require the FCC to launch a rulemaking to “review and update” a key test for determining whether retrans negotiations are being pursued in good faith.

Also unlike the House bill, STAVRA would require the FCC to report annually on how much cable systems are paying for retransmission consent.

In addition, STAVRA, unlike the House bill, would bar stations from using retransmission consent agreements to limit the ability of cable and satellite TV providers to carry out-of-market stations that they are otherwise legally permitted to carry, including the so-called “significantly viewed” distant stations in their markets.

“NAB remains neutral on the STAVRA bill in its entirety,” said the association’s Wharton. “We’re waiting to see how the Senate and House resolve differences in the two bills. We still have concerns over language that bars broadcasters from jointly negotiating retransmission consent agreements with large pay TV providers.”

The good news for broadcasters is that STAVRA is likely to represent the worst-case reform scenario for broadcasters because the pay TV industry’s reform advocates don’t have the time — and are unlikely to be able to muster the votes — for a more stringent measure.

Assuming Senate approval of STAVRA, congressional leaders would still need to work out the differences between STAVRA and STELA in a conference before a final bill could be approved by Congress, and lawmakers aren’t supposed to add provisions to a conferenced bill that weren’t already approved in legislation by the House or the Senate.

Lawmakers are free to discard provisions in one or either of the bills pending in a conference, however. This means that the satellite TV bill expected to be approved before year’s end could even be made more palatable for broadcasters.

During the conference process, congressional leaders could delete STAVRA provisions from a new compromise bill or even include some provisions from STELA in the final bill that aren’t in STAVRA, including one provision supported by broadcasters that would give stations more time to divest joint sales agreements than would be allowed under current FCC regulations.

Under one possible scenario, broadcasters may even end up with a “clean” Senate bill that doesn’t include any retrans reform provisions.

That’s because Sen. Ed Markey (D-Mass.) is currently blocking a full Senate vote on STAVRA in an effort to fix what he sees as an anti-consumer, pay-TV-industry-backed provision in the bill that could prevent consumers from using their own set-top boxes to access pay TV programming.

Unless Markey drops his hold, the Senate could decide to opt for a clean version of the satellite TV bill instead, and that bill would then be the one used to create the compromise with the House’s STELA bill.

A cable TV industry source told TVNewsCheck that it was too early to predict exactly how the legislative battle will ultimately play out this year.

“Saying that the legislative battle is over now is like calling a horse race at the half-mile post,” the source said. “There’s still a lot of track left to cover before the finish line.”

While trying to influence the end game on retrans reform on Capitol Hill, broadcast industry lobbyists are also trying to limit the damage to the industry at the FCC, where Chairman Tom Wheeler has been raising concerns for broadcasters.

Wheeler has teed up a Sept. 30 vote on a proposal to eliminate the sports blackout rule — a regulation that bars cable operators from airing NFL games that have been blacked out on the local TV stations because the games aren’t sold out.

“It’s time to sack the sports blackout rule,” said Wheeler, in a Sept. 9 blog on the FCC’s website announcing the vote.

Wheeler has also been soliciting comment on whether to eliminate two agency rules that make it easier for broadcasters to protect the exclusivity of their syndicated the and network programming — the broadcasters’ key to negotiating for retrans payments.

Like the sports blackout rule, the syndicated exclusivity and network non-duplication rules effectively bar pay TV operators from importing broadcast signals into a market with the same programming as local stations.

Without the rules, broadcasters would still be able to protect the exclusivity of their programming, but would have to rely on the courts, instead of the FCC, to enforce the protections, adding to the hassle and expense for the broadcaster.

“It’s no secret that Chairman Wheeler is anti-broadcaster,” a broadcast lobbyist told TVNewsCheck. “He never misses a chance to praise broadband, but have you ever heard him say a positive thing about broadcasting?”