John Eggerton

If the ranking member is any indication, the Democrats on the House Communications Subcommittee have a bone or two to pick with the Satellite Television Extension and Localism Act (STELA) draft.

In her opening statement for the March 12 hearing on reauthorizing the Act, Rep Anna Eshoo (D-CA) said that she had been working with Republican Steve Scalise (R-LA) on video reform legislation in a bipartisan manner, but she could not say the same for the STELA draft.

"Unfortunately, several of the provisions in this discussion draft do not embody the bipartisan values that have been the cornerstone of previous reauthorizations," she said. In particular, she pointed to the draft's elimination of the FCC's ban on integrated set-tops. "We need to be forward-thinking in our approach to legislating, but this bill dismantles a provision that has helped to ensure that consumers can buy cable set-top boxes from someone other than their local cable company, without any eye to the future," she said.

Having exhausted its court appeal options, the Tennis Channel wants the Federal Communications Commission to take another crack at justifying its decision that Comcast discriminated against Tennis Channel in favor of its own, co-owned sports networks Golf Channel and NBC Sports Network.

The FCC upheld Tennis Channel's program carriage complaint, but the DC Federal Appeals court vacated that decision, saying the facts did not support discrimination, and the Supreme Court declined to review that lower court ruling.
“[E]ven under the Commission’s interpretation of § 616 (the correctness of which we assume for purposes of this decision), the Commission has failed to identify adequate evidence of unlawful discrimination," the court concluded, which would seem to be definitive. But Tennis has petitioned the FCC asking it to test Comcast's actions against three "tests" the court suggested "may" establish that Comcast discriminated.

[March 11]

Saying the National Cable & Telecommunications Association is trying to "freeze out" retail competition, TiVo SVP Matthew Zinn plans to tell Congress that it should not allow a provision in the STELA bill that would "undermine the retail market for set top boxes and deprive consumers of choice." It says the provision has no place in the Satellite Television Extension and Localism Act. That is according to Zinn's written testimony for a March 12 hearing in the House communications Subcommittee on a draft of the bill that includes eliminating the FCC ban on integrated set-top boxes. Zinn said that while he would ordinarily not be opining on a satellite bill, he was weighing in because of a "completely unrelated provision that was slipped in to the STELA reauthorization legislation pushed by a cable lobbying group to eliminate choice in how consumers watch cable programming." Tivo is concerned that removing the CableCard mandate would disadvantage TiVo's Roamio retail set-top. "The provision inserted into STELA would repeal the requirement that cable operators use the same security standard in their boxes as they make available for retail boxes and allow operators to lock out competitive devices, by offering superior access to programming and functions to their own devices, and inferior and faulty access to competitive devices -- as they did before the 'integration ban' became effective." [March 11]

Previewing a likely square-off with TiVo in the March 12 Satellite Television Extension and Localism Act (STELA) hearing, National Cable & Telecommunications Association president Michael Powell plans to tell the House Communications Subcommittee that it likes the STELA draft issued by the Republican leadership, and in particular the provisions on getting rid of the Federal Communications Commission's set-top integration ban, which he calls an outdated legal requirement that handicaps cable operators, and limiting coordinated retransmission negotiations.

He says the requirement that cable operators, "and cable operators alone" include a separate decryption component -- a CableCARD -- adds extra cost, sucks up extra energy, and provides "no added benefit to cable customers with leased set-top boxes." He says the integration ban imposes needless extra cost and is not necessary to promote competition in retail device availability.

“Retail competition in navigation devices is a worthy goal, but it is now clear that this goal is best supported by embracing the innovations already occurring in today’s retail marketplace and not by clinging to an outdated and costly FCC rule,” says Powell. As to prohibiting coordinated retransmission negotiations among two or more independently owned stations in a market, which the bill would do unless cable ops agreed to it, Powell said NCTA was all for it. "If multiple broadcast stations in a local market are not co-owned, then they should not be allowed to act as if they are co-owned in retransmission consent negotiations through a sharing arrangement."

[March 11]

Free Press is advising the House Communications Subcommittee to drop a provision in a Satellite Television Extension and Localism Act (STELA) draft that would prevent the Federal Communications Commission from making immediate changes to TV station joint sales agreements (JSAs) and another that would remove the FCC ban on integrated set-top boxes.

In testimony for the March 12 subcommittee hearing on STELA, Free Press Policy Director Matt Wood says Congress should extend the blanket distant signal license. He also says the provision that would prevent coordinated retransmission negotiations could theoretically reduce some anticompetitive harms, too, though are short of changes needed, but would fail to address "other harms to competition, localism and viewpoint diversity that such agreements cause." Free Press says the draft primarily needs to scrap provisions that would not allow the FCC to make joint sales agreements attributable as ownership interests until it had completed its 2010 quadrennial ownership rule review--its current plan is to do JSAs first; and scrapping the ban on integrated set-tops, which has required cable operators to use CableCard security devices in their boxes, as well as support those in retail boxes. Either of those provisions, if they remained in the bill, "would decrease competition, localism and diversity in local broadcasting, maintain high barriers for small businesses and new entry, and slow the pace of competition and innovation in the market for set-top boxes and other video devices," said Wood.

[March 11]

The National Association of Broadcasters still questions the need to reauthorize the satellite distant signal blanket license given that local TV stations are being delivered by satellite companies "in nearly every DMA [designated market area] and are a thriving competitive alternative to cable."

But that said, NAB also says the draft reauthorization bill that will be the subject of the March 12 hearing in the House Communications Subcommittee is "a product NAB can support." That is according to the prepared testimony for NAB's witness at the hearing, Marci Burdick, television board chair and senior VP for station owner Schurz Communications.

"Our primary interest in this legislation was to prevent the picking of marketplace winners and losers, which is why we have asked for a clean bill," said Burdick. "We are happy to see that this STELA draft steers clear of these kind of provisions."

Actually the bill does remove the prohibition on cable operators dropping TV stations during sweeps periods and would prevent coordinated retransmission negotiations among two independently owned stations in a market unless the cable operator agrees to it. But gone from the draft is a proposal that would have removed the mandate that retransmission stations be offered on cable's must-buy basic tier, and the fact that there is a provision that would prevent the FCC from making joint sales agreements (JSAs) attributable.

[March 11]

DirecTV says it likes the way the House Communications Subcommittee draft of the Satellite Television Extension and Loclism Act (STELA) is shaping up. That is according to the prepared testimony of DirecTV executive VP Mike Palkovic for the March 12 STELA hearing.

Palkovic makes the point that given the bill is mostly about reauthorizing satellite operators' blanket license to import distant signals, the fact that it at least does that, and for another full five-year hitch, is important.

"More than 1.5 million subscribers, many in the most rural areas of the country, receive at least one distant network signal from DirecTV or Dish," he says. "I think we can all agree that these subscribers have as much right to receive network television as those in big cities. But only STELA permits them to receive that programming. In many cases, only STELA permits them to receive network television at all."

[March 11]

Sen Al Franken (D-MN) continues to hammer the proposed Comcast/Time Warner Cable deal in very public venues, including telling CBS that he has gotten 60,000 responses to an e-mail soliciting input on Comcast cable service and the news for Comcast isn't good.

In an interview with CBS This Morning, Sen Franken said: “I got 60,000 responses, and believe me, people don’t like their service from Comcast, and they don’t think this deal is going to help them,” he said.

[March 10]

House Commerce Committee Democrats were celebrating a new Government Accountability Office study that they say demonstrates the success of the government's various broadband stimulus programs boosting federally funded networks, including municipal.

A trio of California Dems, Commerce Ranking Member Reps Henry Waxman, Nancy Pelosi and Communications and Technology Subcommittee Ranking Member Anna Eshoo released the study, which they said showed that small business in areas with federally funded broadband networks were able to get higher quality, faster networks at lower cost.

That federal funding came via the President's broadband stimulus Recovery Act grants and loans (BTOP and BIP), the Federal Communication Commission's Connect America fund and various rural access and telecom loan guarantee programs. The study looked at 14 federally funded and municipal networks, and concluded that they "tended" to be faster than other networks and their prices "slightly" lower.

[March 10]

Comcast execs led by executive VP David Cohen pitched the Time Warner Cable deal to Federal Communications Commissioners. Their take, according to one pitchee, boiled down to no harm, no foul in three key areas:

1. No horizontal harms because the sub count would come in under the FCC's old 30% cap on a cable's subs, which a court threw out.
2. No vertical harms because Comcast has already been there, done that via the FCC's conditions on the merger with NBCU, which conditions will extend automatically to the Time Warner Cable systems when they become Comcast systems.
3. No broadband harms because Comcast is still subject to the FCC's anti-blocking and anti-discrimination rules through 2018 (and likely longer as a condition of the new deal, which would then apply those conditions to TWC as well). And because the broadband market has changed, and regardless of how many broadband subs the combined companies will have, it is hardly the only broadband game in town.

[March 10]