Hearing on Satellite TV Act Turns Into State of Video Hearing

Should the video marketplace be completely deregulated?

A hearing on a 25-year-old law law governing whether or not satellite TV services can carry out-of-market signals quickly broadened into a discussion on the state of video.

“I’m open to debate on a whole host of issues and options remain on the table,” said Rep. Greg Walden (R-Ore.), chairman of the subcommittee on communications and technology. What a difference a verb makes. With that single sentence, Walden turned the hearing, titled “The Satellite Television Law: Repeal, Reauthorize, or Revise?” into a state of video hearing.

The hearing Wednesday was the second on Stela, the Satellite Television Extension and Localism Act, which expires at the end of 2014 unless Congress extends it. 

But the Act, passed in order to level the playing field for satellite TV services, is almost moot, except for the 1 million homes that subscribe to satellite services that carry distant services. Dish carries the local signals in every TV market; DirecTV in 197.

Democrats signaled they would prefer to reauthorize the act rather than bog it down with other issues. As it is, the Judiciary committee has to be involved in the legislation because of the interlocking copyright provision in the law.

“We should pursue a clean reauthorization,” said Rep. Henry Waxman (D-Calif.), the ranking member of the House Commerce committee.

At the same time, members on both sides of the aisle saw the hearing as an opportunity to examine whether or not all of the nation’s communications laws governing pay TV services and the content they carry have turned into an outdated Rube Goldberg contraption. Or into, in the words of Geoffrey Manne, TechFreedom’s senior fellow and executive director of the International Center for Law and Economics, a house of cards.

Manne posited that the video marketplace should be completely deregulated to allow services like Netflix, which carries the show House of Cards, to thrive. “A clean reauthorization isn’t clean at all,” said Manne, adding that Stela should sunset, along with a host of other laws including must carry, retransmission consent, and carriage and access rules.

The hearing also gave broadcasters and pay TV services—in this instance, DirecTV and Schurz Communications—the opportunity to go at each others’ throats over retransmission consent, made possible by the 1992 Cable Act.

Michael Palkovic, DirecTV’s svp of services and operations, said retransmission consent favors broadcasters, and its effect leads to higher programming prices and blackouts, which he said occurred in 91 markets last year alone.

“We see two paths Congress should consider … One is to jettison broadcast regulation altogether and create a truly free market in which broadcast programming is no longer treated differently than every other type of programming. The other is to make the laws smarter to reflect the 21st century video marketplace,” Palkovic said.

Marci Burdick, svp of broadcasting for Schurz Communications, which also owns a small cable system, countered that retransmission consent works no matter which chair she sits in. “The retransmission consent system in place today has a success rate of 99 percent. Only in Washington, D.C., could something that works 99 percent of the time, providing for thousands of deals every year, be called broken,” Burdick said.

Of course, no discussion of the video marketplace would be complete without a potshot at rising cable subscription prices. Rep. Joe Barton (R-Tex.), who owns three homes, complained he paid $200 each for Charter and Comcast service. “I am about to go back to free TV because of the cost,” Barton said.

Summing it all up: “There are so many issues out there,” said Rep. Jim Matheson (D-Utah).