STAVRA Goes Through More Cuts Ahead of Senate Commerce Markup, Addressing Broadcaster Concerns

Opposition to the Senate Commerce Committee’s Satellite Television Access and Viewer Rights Act (S-2799) cooled slightly ahead of a planned markup Wednesday. Senate Commerce Committee leaders further chopped down controversial parts of the legislation, in a new draft circulated among committee member offices Friday (CD Sept 15 p9). Broadcasters initially opposed the bill strongly, but the changes address some of their concerns. Sen. Claire McCaskill, D-Mo., plans to offer what she’s calling the McCaskill Customer Service Amendment, collecting several of her concerns about the pay-TV industry, while Sen. Roy Blunt, R-Mo., is eyeing broadcaster joint sales agreement with his own amendment, among several others expected.

This is the second major change to the STAVRA bill since the first draft’s circulation (CD Sept 8 p1). Last week, STAVRA’s authors -- Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and ranking member John Thune, R-S.D. -- stripped STAVRA of the divisive broadcast a la carte Local Choice proposal. Rockefeller told us last week that Local Choice’s removal was due to practicality but emphasized he thought Commerce could approve the rest of the bill (CD Sept 11 p6). The House cleared a Satellite Television Extension and Localism Act reauthorization bill similar to the current Senate Commerce draft in July, the same month that Senate Judiciary cleared a clean reauthorization. STAVRA markup is Wednesday at 2:30 p.m. in 253 Russell.

"Chairman Rockefeller and I have worked together to put forward a bipartisan bill we believe will garner broad consensus among members and stakeholders,” Thune told us in a statement Monday. “The STAVRA substitute filed by Chairman Rockefeller on Friday, which will be the text marked up on Wednesday, is the product of that bipartisan collaboration."

The latest draft is 14 pages, while the original was 39. Local Choice is gone but so are parts of other provisions, which had addressed the FCC’s role and also called for the agency to look into online blocking as part of its good-faith retrans consent negotiating rules. STAVRA retains a provision addressing joint retrans negotiations among broadcasters. It would “prohibit a television broadcast station from coordinating negotiations or negotiating on a joint basis with another television broadcast station in the same local market … to grant retransmission consent under this section to a multichannel video programming distributor, unless such stations are directly or indirectly under common de jure control permitted under [FCC] regulations,” the Friday draft said.

STAVRA’s modifications followed a week of talks with Commerce member offices and stakeholders, and now Thune expects little to no opposition to STAVRA, said a Republican Senate staffer. Thune also still believes Local Choice is better for consumers and the market than the status quo, despite lack of time for its consideration through STELA reauthorization, the staffer said.

Expect Amendments

Thune will propose an amendment reducing the reauthorization time from the five years, as it is currently, to a reauthorization lasting only until Dec. 31, 2016. Thune’s amendment is “strictly for conversational purposes,” a Republican aide told us. “He does not intend to offer it for a vote. Senator Thune is very interested in continuing the dialogue around video policy reform into the next Congress, and it seems that ‘must-pass’ legislation is the only way to get Congress to focus on many issues,” the aide said. “Nevertheless, even if STELA is reauthorized for 5 years (as set forth in STAVRA), Sen. Thune looks forward to working on Local Choice and other possible video reforms with his colleagues and industry stakeholders next Congress."

Amendments are expected from Sens. Richard Blumenthal, D-Conn.; Blunt; Dean Heller, R-Nev.; Ed Markey, D-Mass.; McCaskill; Mark Pryor, D-Ark., chairman of the Communications Subcommittee; and Thune. Blumenthal’s amendment would direct the FCC to “study the impact of television sports programming and the costs to consumers,” it said. Heller will try to attach his FCC Consolidated Reporting Act bill in his amendment. Markey’s amendment will change what STAVRA does to the set-top box integration ban, calling for an FCC working group on competitive device availability that would provide a report not more than a year after STAVRA’s enactment. Within two years of STAVRA enactment, the FCC would have to issue “final rules that promote a not-unduly-burdensome, uniform, and technology- and platform-neutral methodology for access to a system’s programming, features, functions, and services, such as through a software-based downloadable security system, designed to assure the competitive availability of navigation devices in furtherance of section 629 of the Communications Act,” the Markey amendment said. The focus of Pryor’s amendment is “to make information about the market modification process available to consumers on [the FCC] website,” its text said.

Blunt plans to offer a two-page amendment, intended “to exempt application of [joint sales agreement] attribution rule in case of existing agreements,” said the amendment text. It referred to the FCC Further NPRM and order adopted on March 31 and outlined an instance in which “such party shall not be considered to be in violation of the ownership limitations.”

"Senator McCaskill agrees with the intent of Congress in the Cable Act that [local franchise authorities] are the most appropriate entity to enforce Customer Service Guidelines for cable operators,” many of which “are abdicating this responsibility -- and many are even prohibited from enforcing consumer protections by state laws -- leaving consumers frustrated with nowhere to turn,” said a four-page outline on her amendment. “Satellite operators -- which serve an estimated 30 percent of the pay-TV market -- are subject to no similar customer service guidelines on matters such as: adequate notification of prices and rate changes; minimum requirements for transparency in billing; and timely dispute resolution, among others.” McCaskill, chairwoman of the Commerce Consumer Protection Subcommittee, has long outlined concerns about pay-TV industry billing and may hold a Consumer Protection Subcommittee hearing on the issue this year, she told us last week.

The six-page McCaskill Customer Service Amendment would ask the FCC to update its customer service guidelines for cable operators, clarify agency authority to enforce customer service guidelines, direct the commission to form customer service guidelines for satellite operators and give the agency power to forbid “unfair or deceptive acts or practices by cable and satellite operators,” said her office’s amendment outline. The customer service outlines should speak to “communications between the cable operator and the subscriber (including standards governing bills and refunds); notifications to subscribers of prices and rate changes; and customer service availability and accessibility,” the outline said. The FCC would be told to account in its guidelines for “differences in capabilities and resources of cable operators based on their size” and give “maximum flexibility possible” for operators given technology differences, geographical footprint and the operators’ resources. The FCC should “consider clarifying the circumstances in which the commission may take enforcement actions,” the outline said.

'Significant Improvements,’ NAB Says

NAB still does not back the latest STAVRA draft but applauds “the changes made in this package that represent significant improvements for local broadcasting,” President Gordon Smith said in a statement. NAB has “some concerns” with STAVRA as-is, he said. TVFreedom, a broadcaster coalition including NAB that vehemently questioned STAVRA following its first circulation, declined comment on the latest draft Monday.

One broadcast industry official cited many STAVRA modifications addressing broadcaster objections -- the draft nixed Local Choice along with FCC authority to become involved in retrans disputes and request documents, the language on online blocking and the provision telling the FCC to conduct a rulemaking on updates to per se violations of good-faith negotiating. It changed the FCC market modification process provision and the transparency section’s retrans consent data reporting provision to accommodate broadcast lobbying concerns, he said. The joint retrans negotiation language also now mirrors what the House passed, a version “much less hostile to broadcasters” than what initially was included in STAVRA, he said. Broadcasters had remained neutral on the House STELA bill, and NAB told us last month that while it did not oppose the House bill, it did hope to change it (CD Aug 27 p7). The broadcast industry official credited STAVRA changes to “a massive grassroots effort” including more than 130,000 calls and emails to senators pushing for changes, following NAB radio and TV advertising.

NCTA praised the latest STAVRA. It “provides clear benefits to consumers by extending expiring provisions and making targeted video reforms that are appropriate given the realities of today’s competitive marketplace” and still, as had the original draft, “sunsets the FCC’s Integration Ban rule -- an unnecessary technology mandate that violates principles of competitive neutrality and forces cable customers leasing set-top boxes to bear added costs and higher energy use for no additional benefit,” NCTA said in a statement. It said STAVRA “rightly addresses concerns of anticompetitive harm in retransmission consent negotiations, by barring such coordination among local broadcast stations that are not commonly owned.” TiVo “remains strongly opposed to the set-top box provision included in the latest draft,” General Counsel Matt Zinn said in a statement Monday.

Broadcasters will see victory, said a media industry official. But it’s no shock that the more substantial parts of STAVRA would disappear given its late introduction date -- those modifications were necessary to ensure STELA reauthorization could pass Congress before its expiration Dec. 31, he said. But the initial draft sets the stage for 2015, the official said.

The American Cable Association wants to keep “the provisions in the latest draft that most protect consumers from the broken retransmission consent marketplace,” President Matt Polka said in a statement. The American Television Alliance still backs STAVRA. The coalition includes pay-TV industry members, including ACA, and has lobbied for Congress to overhaul retrans, strongly backing Local Choice when it was part of the bill. “For years, broadcasters have resisted any changes to what everyone else realizes is a broken system of retransmission consent and Congress is finally providing some real reforms for consumers,” ATVA’s spokesman told us.