Retrans Reform Remains In STELA

Compromise satellite TV legislation slated to be voted by the Senate Commerce Committee Wednesday has been retooled to eliminate or water down some major retransmission consent reform proposals that had been included in earlier draft legislation on the subject — but key reform provisions appear likely to remain in place, industry sources said.

One retrans reform provision that is expected to be included would, like a similar measure included in legislation approved by the House in July, bar TV stations in the same market from coordinating retrans deal negotiations, unless those stations are jointly owned, according to a copy of the draft bill.

Unlike the House bill, the new Senate 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, the draft bill says.

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

In addition, the Senate draft bill, unlike the House measure, would bar local 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.

Like the House bill, the Senate bill would extend the Satellite Television Extension and Localism Act, or STELA, for five years.

STELA gives satellite TV companies the right to retransmit distant TV signals into some local markets. Unless reauthorized, STELA will expire at the end of this year.

Under a previous version of the Senate Commerce Committee’s STELA bill — backed by Sen. Jay Rockefeller (D-W.Va.) and Sen. John Thune (R-S.D.), the committee’s chairman and the ranking Republican, respectively — included a “local choice” provision that would have cleared the way for individual pay TV subscribers to decide whether they wanted to pay for local TV signals or not. In addition, the original bill included a provision opposed by broadcasters that could have barred them from denying pay TV subscribers access to broadcasters’ online signals.

Broadcast lobbyists credited a grassroots industry lobbying effort for moderating some of the Senate bill’s original retrans reform provisions. “This was a major advocacy victory for broadcasters,” one industry lobbyist said.

“Though we continue to have some concerns, we applaud the changes made in this package that represent significant improvements for local broadcasting that NAB is pleased to see included,” said Gordon Smith, National Association of Broadcasters president-CEO, in a statement.

Still, pay-TV industry reform advocates were declaring victory—or at least far from conceding defeat.

“We’re fully supportive of the new bill,” said Brian Frederick, a spokesman for the American Television Alliance, a pay TV industry-backed group that has been lobbying for retrans reform. “It provides some meaningful retrans reforms for consumers.”

Added Matt Polka, president-CEO of the American Cable Association, an ATVA member: “The American Cable Association will remain focused in the days ahead on ensuring that the provisions in the latest draft that most protect consumers from the broken retransmission consent marketplace remain in place, and we appreciate all of the efforts of Sens. Rockefeller and Thune to move these important provisions forward.”