TV station owners dodged a bullet last night, although possibly just temporarily, as the Senate Commerce Committee drafts a must-pass bill that governs satellite companies’ dealings with broadcasters. Chairman Jay Rockefeller (D-W.Va.) and Ranking Member John Thune (R-SD) agreed to take out a broadcast a la carte provision that pay TV companies wanted: It would have enabled subscribers to decide which local stations they wanted to receive, and pay for. The lawmakers said that the Local Choice provision in the Satellite Television Access and Viewer Rights Act (STAVRA) “would empower TV viewers, maintain our policy of broadcast localism, and ensure TV stations get fairly compensated for the retransmission of their signals.” But since it’s “a big and bold idea” it “deserves more discussion and a full consideration by policymakers.” Rockefeller and Thune want the STAVRA bill to pass next week.
The National Association of Broadcasters, which led the opposition, said it’s “thankful” that the committee recognized “the unintended negative consequences this measure would have had on localism, broadcasters and our millions of viewers.” It feared that stations would lose revenue if satellite customers could decline to pay for them — perhaps by supplementing their pay TV service with an antenna to pick up local over-the-air signals for free.
But the Commerce Committee is looking at other changes that might weaken broadcasters’ bargaining power in deals to grant retransmission rights to pay TV. For example, it might direct the FCC to consider it a bad faith negotiation practice — subject to an investigation — when a station blocks its broadcast shows from a distributor’s Internet customers in disputes where a station goes dark on the video service. That has “a reasonable chance of winning majority support” when the Committee votes on the bill next week, says Guggenheim Securities’ Paul Gallant.
He adds that the Local Choice provision might be revived if, as many pundits expect, Republicans win control of the Senate this fall. Thune, who helped to draft the a la carte plan, would be poised to chair the Commerce Committee. So it probably would “resurface as part of a communications legislative effort in 2015.” The American Cable Association, which supports the change, says that “Local Choice is a powerful, bipartisan idea rooted in free-market principles that would create a level playing field and discipline the market in ways that benefit the public. This is a concept whose time will come.”