Retrans Reform Advocates Pin Hopes On Satellite Bill

Hearings next week present two days of opportunity

Retransmission reform advocates think they've got an opening to convince Congress it's time to change the law that leads to blackouts like the one between CBS and Time Warner Cable that left more than 3 million Time Warner Cable subscribers outside the CBS dome.

Their big hope? Getting retransmission consent reform language attached to the reauthorization of the Satellite Television Extension and Localism Act (STELA).

Since the law expires at the end of next year unless Congress does something, retrans reform advocates can take advantage of the debate to make the argument that it's the perfect opportunity to address retransmission consent law, whether it's forced arbitration, prohibiting blackouts, or some other measure.

A 25-year-old law, STELA allows satellite TV companies like Dish and DirecTV to retransmit in a local market a network TV signal from outside the subscribers' market if a local signal isn't available.

Because it deals with carriage of local signals, retrans reform advocates see the STELA debate as a perfect bill to attach retransmission reform.

"Getting retrans reform as part of STELA is our main focus," said Stanton Dodge, Dish's general counsel.

Dodge and other retrans reform advocates that are part of the American Television Alliance know that without STELA, it could be a lot harder to build support in Congress.

"Right now it's our only chance because it's the only piece of legislation that deals with broadcast carriage, is moving and has to be acted on," said Matt Polka, president and CEO of the American Cable Association representing smaller cable companies. "It's not the only opportunity, but other opportunities will take more work."

Retrans reform advocates will get a good shot at making their case stronger next week during two House subcommittee hearings called to address the issues around STELA. The House judiciary subcommittee on courts, intellectual property, and the Internet meets Tuesday. On Wednesday, the Commerce subcommittee on communications and technology is holding its third hearing on STELA.

But despite the opportunity to testify, it could be an uphill battle for retrans reform advocates. The number of lawmakers that seem ready to take any real action to reform retransmission consent can be counted on one hand. Sens. John McCain (R-Ariz.) and Richard Blumenthal (D-Conn.), who have co-sponsored an á la carte bill, is going nowhere and hasn't picked up any new supporters in months. On the House side Rep. Steve Scalise (R-La.) has yet to find a co-sponsor to re-introduce a bill that would eliminate all media ownership rules and the Cable Act, which governs retransmission consent.

Even though month-long CBS-Time Warner blackout provided lots of opportunity for action, policymakers chose only to resort to political rhetoric.

"[The CBS-Time Warner Cable blackout] presented one of the most politically-appealing invitations for the government to second guess the path of a free market retrans negotiation, and the government declined to do so," Scott Flick, a partner with Pillsbury Winthrop Shaw Pittman wrote in a recent blog post

Despite the lack of support in Congress, remains optimistic that they can turn things around.

"I can't point to anybody that has a bill in the works, but discussions are happening and ideas are forming," Polka said. "I think we're making progress.

We're also hopeful that more lawmakers will see in these continuing blackouts like CBS-Time Warner Cable, the need for reform."

Dodge isn't so certain. "Broadcasters are some of the most powerful folks in Washington," he noted.