Bicameral Compromise on STELA Reauthorization Emerges, Poised for House Vote

House and Senate Commerce Committee staffers coordinated informally to create what is the latest Satellite Television Extension and Localism Act reauthorization draft, as expected (see 1410150090). House lawmakers introduced the 22-page five-year STELA Reauthorization Act Tuesday. The draft still includes what may be its most controversial provision, at least in the Senate -- repeal of the set-top box integration ban.

STELA expires Dec. 31, and reauthorization is considered must-pass legislation. Without passage, about 1.5 million satellite customers are expected to lose access to broadcast content. The House approved a STELA bill in July, and a Senate reauthorization proposed in a unanimous consent vote effort failed in September due to a hold from Sen. Ed Markey, D-Mass., irate over the integration ban repeal. Sen. Richard Blumenthal, D-Conn., joined Markey's opposition and hold weeks later.

The new bill’s backers from both sides of the aisle are House Commerce Committee Chairman Fred Upton, R-Mich., ranking member Henry Waxman, D-Calif., Communications Subcommittee Chairman Greg Walden, R-Ore., and subcommittee ranking member Anna Eshoo, D-Calif. It's the product of bipartisan agreement with Senate Commerce, a House committee spokesman told us. The House Rules Committee lists the bill as potentially on deck this week under suspension of the rules, which requires a two-thirds majority vote and is typically reserved for uncontroversial legislation passed by voice vote. Industry lobbyists told us they expect easy House approval of this bill on Wednesday.

The STELA Reauthorization Act draft would forbid broadcasters from engaging in joint retransmission consent negotiations as well as from blocking “significantly viewed signals” from passing to local markets. The FCC would have to start a rulemaking within a year of bill enactment to assess the meaning of “good faith” retrans negotiation. It would kill the sweeps weeks rule and make cable operators include retrans payments in a rates report. The legislation would allow broadcasters time to unwind their joint sales agreements that the FCC came down against this spring. It would let satellite companies and broadcasters change their local market definitions to capture served communities more accurately and streamline regulatory processes for small cable companies in competitive markets.

The bulk of the legislation had appeared in prior versions, with general acceptance from media industry stakeholders.

NAB is neutral on this latest bill, a spokesman told us. Unsatisfied broadcasters have continued to lobby on certain retrans provisions. But they have not lobbied against any language with the ferocity they unleashed on earlier dropped provisions, such as the broadcast a la carte proposal known as Local Choice, originally intended for the Senate version.

The one especially divisive provision that remains is the bill's repeal of the set-top box integration ban. The new legislation compromises between the earlier House version, which would have repealed the ban immediately, and the Senate version, which would have repealed it in two years. This STELA Reauthorization Act would kill the ban after one year and call for a multistakeholder working group to find a successor solution to the CableCARD, with a report due to the agency nine months after the bill’s enactment. The working group must first meet within 90 days of enactment. Consumers Union, Free Press and Public Knowledge have lobbied against the repeal, as has TiVo. NCTA has lobbied for it, saying it would remove a key burden on cable operators and save money.

Markey and Blumenthal reiterated opposition to such an integration ban repeal as part of STELA reauthorization. “I’ll have a look at it,” Blumenthal told us at the Capitol Tuesday when considering the new compromise version of the legislation. “For now, I’ll continue with the hold.” The “hold still remains,” a spokeswoman for Markey said, saying the House still has to act on this latest legislation so there’s “more to come.”

NCTA is “especially pleased that the legislation also 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,” it said in a statement, urging passage. “In this way, the bill rightly recognizes that ongoing support for retail devices is not advanced by rules that impose costs on consumers who elect to lease equipment.”

This STELA reauthorization bill looks like a done deal, said a broadcast industry lobbyist. TiVo will not be happy, but other industry stakeholders will likely accept it, he said. The lobbyist had previously suspected reauthorization would become attached to a fiscal vehicle but is now less sure. The House will easily pass the standalone STELA bill Wednesday and senators may attach it to something else if the obstacles of Markey and Blumenthal persist, the lobbyist suspected.

Several industry groups praised the new bill. The American Television Alliance, a coalition of pay-TV industry companies, Public Knowledge and other groups, called the bill “a clear and convincing win for consumers” and was glad the bill touched on retrans. ATVA members Charter Communications, DirecTV, Dish Network and USTelecom issued statements of support. The bill “takes the first of several needed steps toward creating a level playing field for all competitors in the 21st century video marketplace,” USTelecom President Walter McCormick said.