Senators Get An Earful On STELAR Pros and Cons

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WASHINGTON, D.C. — The future of local television as delivered by AT&T’s DirecTV direct broadcast satellite service, and the lack of availability of the closest network affiliate in a market without one, is perhaps one of the biggest topics associated with the Satellite Television Extension and Localism Act, or STELAR.


Under STELAR, DirecTV has provided 12 DMAs distant-signal stations, under the guise that doing otherwise would be costly and difficult — even though DBS competitor Dish Network has done so.

Reauthorization of STELAR would allow this to continue, while also keeping the important RV market’s access to network stations as is — something that’s become an equally important issue. Then, there’s the subject of retrans fees, which has fueled a Capitol Hill fight against the NAB, which wants STELAR to sunset.

An all-important hearing in the Hart Senate Office Building on Wednesday (10/23) will help in determine whether STELAR will continue to shine, or fade away at the end of 2019.

As promised, witnesses included Graham Media Group President/CEO Emily Barr, who also serves as Chairwoman of the NAB Television Board; MVPD Golden West Telecommunications CEO/GM Denny Law; former U.S. Representative and Ottawa Rough Riders quarterback J.C. Watts, co-founder of The Black News Channel; and Robert Thun, SVP/of Content and Programming at AT&T.

But, a third witness was added to the list of those appearing at the hearing: Jonathan Schwantes, Senior Policy Counsel at watchdog publication Consumer Reports.

Wednesday’s STELAR hearing, convened by Senate Commerce Committee Chairman Roger Wicker (R-Miss.), who noted that Americans today have more access to video content and programming than ever before. Yet, despite the rise of OTT and the maturation of the digital video marketplace, “hundreds of thousands of Americans can still not receive traditional over the air broadcast television in their homes.”

This dovetailed into the basics of STELAR, which for more than 30 years has enabled Americans beyond the reach of a broadcast signal to enjoy network programming from a provider. Rural consumers and RVs “have been particularly reliant” on STELAR to access broadcast television, Wicker noted, with its “distant signal license” key to bringing communities that lack a major network affiliate to receive signals from New York or Los Angeles.

At the end of the year, STELAR will expire — minus Congressional action.

While distant signals have been the key focal point of STELAR’s keep-or-kill debate, the other significant requirement that broadcasters and cable operators negotiate retransmission consent agreements “in good faith” has been crux to the “let STELAR stay” fight being waged by groups such as ACA Connects, the American Television Alliance (ATVA) and, more recently, Consumer Reports.

This important part of STELAR is likely why some disagree with the notion that it has long outlived its original purpose.

For Wicker, “It is my view that it remains a critical law for preserving access to video services for those that typically find themselves on the wrong side of the digital divide.”

He added that Congress “needs to know whether consumers will immediately lose access to certain television channels if STELAR expires.”


“It is my view that it remains a critical law for preserving access to video services for those that typically find themselves on the wrong side of the digital divide.” — Sen. Roger Wicker (R-Miss.)


 

Further, Wicker wants to know if STELAR’s sunset would increase prices for consumers.

That’s something Schwantes is very concerned about. In his testimony, the Consumer Reports senior policy counsel urged Congress to require “fair and transparent pricing” for pay-TV bills while supporting policies that foster competition in the video marketplace.

This includes ensuring that debate on STELAR does not occur again by taking expiring provisions in STELAR and making them permanent, namely the Section 119 “distant signal” license the NAB and broadcasters including Graham Media want gone.

“A golden opportunity exists for lawmakers to enact straightforward policy changes that would directly and immediately help consumers in a STELAR reauthorization bill passed before the end of this year, a reauthorization that CR strongly supports,” Schwantes said in his prepared testimony.

He later focused his testimony on cable bill costs, tying retransmission consent to rising consumer payments to MVPDs.

“In the past decade, cable companies have imposed new fees for features and services previously included in the base advertised rate,” Schwantes said. “Consumer Reports’ analysis of hundreds of pay-TV bills found that these company-imposed charges add almost 25% to the base price of the typical monthly cable bill.  These sneaky fees enable cable companies to camouflage price increases, confounding consumer efforts to comparison shop and stay within household budgets.”

THE COST OF KEEPING LOCAL

In Schwantes’ view, “a sudden disruption of television service to hundreds of thousands
of consumers” would occur should STELAR disappear.

But, what about the 20-year-old “local into local” service adopted in the 1999 version of STELAR? It comes down to money.

“It is less expensive to import one or two distant broadcast networks into some areas versus offering the full complement of local broadcast channels given the ‘carry one, carry all (local channels)’ mandate placed upon DBS operators who offer local networks,” Schwantes claimed.

That, in a nut shell, is the perhaps the most vexing part of the argument being fueled by the NAB and broadcast television companies. Schwantes continued, “It is important to note that if DirecTV wanted to provide local-into-local service into those markets, it could do so right now under current law, just as its DBS competitor, Dish Network, does.”

Nonetheless, he said, what lawmakers and the broadcasters cannot guarantee, absent a change in current law, is that DirecTV will fill that gap and choose to provide local networks to unserved consumers. “Consumers would likely blame Congress—and not the NAB or their service providers—for taking away their broadcast channels. Consumers should
not suffer restricted access to service without a guaranteed alternative.”


“It is important to note that if DirecTV wanted to provide local-into-local service into those markets, it could do so right now under current law, just as its DBS competitor, Dish Network, does.” — Jonathan Schwantes, Senior Policy Counsel at watchdog publication Consumer Reports.


 

In his testimony, Schwantes also took aim at such typical MVPD billing additions as a Broadcast TV Fee, Regional Sports Surcharge, HD Technology Fee, and a Network Access and Maintenance Fee.

These concerns were among those most pressing to Senate Commerce Committee Ranking Member Maria Cantwell, the junior Senator from Washington state.

“We know that Americans have many more choices but in some instances, more choices than they want to pay for,” she said. “We want to make sure that there is true competition among these platforms and not just capturing consumers and charging them higher fees.”

The Senate Commerce hearing follows a July 30 Senate Judiciary Hearing on Copyright Oversight that saw no less than five recreational vehicle (RV) groups urge Committee members via a letter to preserve the provision of copyright law that allows DirecTV and DISH Network to provide Distant Network Signals to RVers.

The RV Industry Association, the RV Dealers Association, the National Association of RV Parks and Campgrounds (ARVC), the Family Motor Coach Association and the Escapees RV Club, called on Congress to reauthorize Section 119 of the Copyright Act, which would sunset at the end of 2019, absent Congressional action.

Section 119 provides the copyright law exemption that makes it possible for RVers to access network TV programming regardless of where they happen to be traveling.

Without this exemption, the groups argue, “it would be a violation of copyright law for a satellite provider to allow an RVer to access a New York broadcast while camping at remote national park in a different market.”

The RV industry could fall into a different category than homes and businesses where STELAR is applied, using a standard similar to that of passenger air craft.


WHO’S IMPACTED AT HOME BY STELAR?

STELAR permits DirecTV to deliver national feeds of network affiliates to a select group of tiny designated market areas. On the East Coast, these stations are from New York; on the West Coast, they are from Los Angeles.

While DISH abandoned the use of New York or L.A. signals in these tiny DMAs, DirecTV said it would. It has not, and it’s fighting.

DirecTVThe markets involved are as follows:

  • Alpena, Michigan
  • Bowling Green, Kentucky
  • Casper-Riverton, Wyoming
  • Cheyenne, Wyoming/Scottsbluff, Nebraska
  • Grand Junction, Colorado
  • Helena, Montana
  • North Platte, Nebraska
  • Ottumwa, Iowa/Kirksville, Missouri
  • Presque Isle, Maine
  • San Angelo, Texas
  • Victoria, Texas
  • Glendive, Montana
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