Preserve Viewer Access to Valuable Local Television Services Through a Clean STELA Reauthorization

The Satellite Television Extension and Localism Act (STELA) enables satellite carriers to retransmit the signals of distant television network stations and superstations to satellite dish owners for their private home viewing. This Act is set to expire at the end of the year. If Congress determines that re-authorization is necessary, the extension should not be a vehicle to reopen well-established copyright and retransmission consent provisions that are outside the scope of this Act. Specifically, the re-authorization of this legislation should not serve as a backdoor mechanism to harm broadcasters' ability to provide viewers with unique, locally-focused service.

Issue
The Satellite Television Extension and Localism Act (STELA) enables satellite carriers to retransmit the signals of distant television network stations and superstations to satellite dish owners for their private home viewing. This Act is set to expire at the end of the year. If Congress determines that reauthorization is necessary, the extension should not be a vehicle to reopen well-established copyright and retransmission consent provisions that are outside the scope of this Act. Specifically, the reauthorization of this legislation should not serve as a backdoor mechanism to harm broadcasters' ability to provide viewers with unique, locally-focused service.

History
In 1988, Congress crafted the Satellite Home Viewer Act (SHVA), legislation creating the Section 119 statutory license. The purpose of this license was to enable satellite carriers to provide network programming to households unable to receive adequate over-the-air signals from their local network affiliates. At that time, the technology did not exist for satellite companies to carry local broadcast signals, so a distant signal license was necessary to provide a lifeline service to viewers having no other means to receive network programming. The law was a success and satellite television became a serious competitor to the cable industry.

This legislation was given a five-year sunset, but was subsequently reauthorized and revised several times. As part of a revision in 1999, Congress created the Section 122 license that enabled satellite to provide local stations to their local markets. This license, unlike the 119 license, was made permanent and succeeded in promoting competition with cable by providing viewers with their local signals instead of signals from a distant market.

The Section 122 license (the local-into-local license) supports broadcasters' commitment to localism, while the 119 license (the distant signal license) does not.

The Section 122 license permits satellite carriers to retransmit a local broadcast signal in that station's home market on a royalty-free basis. This license is permanent and not up for renewal.
The Section 119 license permits satellite carriers to provide network programming from an out-of-market station without the station's consent to households that are not served by a local broadcast station. This license sunsets on December 31, 2014, and is the subject of the STELA reauthorization.

Sections 119 and 122 are part of the Copyright Act. SHVA, and its progeny, the Satellite Home Viewer Improvement Act (SHVIA), the Satellite Home Viewer Extension and Reauthorization Act (SHVERA) and STELA, also included parallel and closely inter-related provisions in the Communications Act. For example, Section 325 of the Act requires satellite carriers to obtain retransmission consent for the carriage of local stations, but exempts carriers from obtaining such consent to retransmit distant network signals to unserved households. This exemption has been renewed several times, but is scheduled to expire at the end of 2014.

Representatives from the cable and satellite industries have targeted STELA for significant changes to both the Copyright Act as well as the Communications Act.
The House Energy and Commerce Committee is the first of four committees of jurisdiction to pass STELA legislation. While this bill does not affect the current retransmission consent system, basic tier, must-carry or designated markets areas (DMAs), NAB could not support the bill as a whole due to a provision that bans joint retransmission consent negotiations. In addition to extending STELA for a five-year term, the legislation eliminates the sweeps rule and extends the period of time broadcast television stations have to unwind joint sales agreements (JSAs) that do not receive a waiver.

NAB Position
Today, no technological impediments stand in the way of satellite providers offering local broadcast channels to nearly all of their subscribers. The vast majority of households are served by the local broadcast stations in their own market, and DISH, for example, provides local broadcast stations to viewers in every market.

Only a small fraction of satellite subscribers are still served by distant, out-of-market signals. The distant signal license disincentives satellite companies from offering local broadcast television to every subscriber and deprives viewers of the locally-focused benefits of broadcast television.

One current challenge today is that one satellite company,DIRECTV,  has chosen not to provide local broadcast stations in every market and instead use the distant signals. It's time for DIRECTV to provide local service in all 210 markets and for the distant signal license to lapse.

Broadcasters oppose the numerous changes pay-TV companies are pushing through this legislation that would alter the retransmission consent process. This process, which allows local stations to negotiate with pay-TV companies for fair compensation when their signals are resold to pay-TV subscribers, was established by Congress and benefits viewers. Compensation from retransmission consent negotiations enables broadcasters to provide local communities with the news, weather reports, emergency updates, sports and entertainment they rely on each day.

Action Needed
Should Congress reauthorize STELA, it should reject proposals that would expand the scope of the distant signal license, depriving viewers of their local TV stations. It should also reject unrelated provisions that undermine broadcasters' retransmission consent rights and that would impact their ability to serve their local communities.