Retrans Fights Get Hill Airing

Boucher says Satellite Home Viewer Extension and Reauthorization Act is must-pass legislation this year

By John Eggerton -- Broadcasting & Cable, 2/24/2009 1:43:59 PM MT

A new version of the Satellite Home Viewer Extension and Reauthorization Act (SHVERA) is must-pass legislation this year, said Rep. Rick Boucher, chairman of the House Communications, Technology & Internet Subcommittee.

With that, Boucher presided over a hearing on reauthorization of the law providing the rules of the road for satellite carriage of local TV stations.

It was the first hearing as chairman for Rick Boucher (D-VA), who had said satellite reform was on the top of his to-do
list, along with broadband buildouts.

Boucher said he wanted to proceed on a pretty much straight line and didn't want to get sidetracked on collateral issues, which he said included retransmission consent reform, an issue that covered all multichannel platforms, rather than the satellite delivery of TV stations--both distant signals and local signals--that is the subject of the act.

That proved to be easier said than done, with retransmission consent reform raised frequently in the three-hour hearing.

Broadcasters were represented by James Yager, CEO of Barrington Broadcasting and NAB TV board chairman, and Martin Franks, EVP of CBS, speaking for his network. They diverged on their approach to the bill, with Yager calling for requiring satellite operators to carry local TV station signals in all 210 markets (as cable operators are required to do) and doing away with the distant signal importation regime and Franks saying he supported simply reauthorizing SHVERA as it is.

Satellite operators countered that to make it economically feasible to deliver stations in every market, Congress needed to change the law, including giving it a break on a retrans regime they argued unfairly favors broadcasters.

EchoStar Chairman Charlie Ergen said that the reason that his company did not deliver local stations in 32 of the nation's 210 TV markets was that they were all so-called short markets that lacked at least one, or in some cases three or four, network affiliates. Because the law prevented him from importing signals from network affiliates in adjacent markets, it consumers wouldn't buy the service.

Change that, he said, and those markets would get their local stations.

Bob Gabrielli, senior VP of DirecTV, argued that his company already was able to serve every local market with a device that integrated the satellite channels with an over-the-air tuner.

Rep. Anna Eshoo (D-CA), used the hearing to push what she said would be her reintroduction of a bill that would essentially force Dish Network to deliver the multicast signals of PBS stations. She pointed out that DirecTV had already agreed voluntarily to do so, and said the bill could be avoided if only Dish would follow suit.

Congress took aim at the use of Nielsen DMA's to determine what TV stations could be carried in a market, pointing to markets where the DMA crossed state lines and meant some viewers were getting out of state news, weather and other information. They said the DMA system was decades old and in need of revamping. They also took aim at retransmission consent negotiations, with Ergen saying that the broadcast "monopoly" had gained too much power.

Franks countered that the retrans system was not broken and did not need fixing, that the DMA's were determined by a combination of factors including viewing patterns and physics. He said that the vast majority of retrans deals are resolved quietly and amicably, and that Congress should not legislate based on a very small handful of disputes that result in a short-term loss of TV station signals.

On that score he got some tough questioning from Nathan Deal, a long-time proponent of retrans reform.

Deal said that Franks' pronouncement that retrans wasn't broken and Congress should do a straight re-authorization of SHVERA was the statement "of a monopolist." Deal said he disagreed with Boucher that retrans was not part and parcel of the SHVERA issue

Fellow Republican Steve Buyer of Indiana joined Deal in criticizing the retrans regime. He said that the LIN Broadcasting CBS affiliate going dark in Indianapolis during a retrans fight was not a good thing or in the public interest.

He also brought up reports that CBS' CEO [Leslie Moonves] had said back in December that the network model is changing and that perhaps networks would move more toward a cable delivery model and cut affiliates out of retrans money.

Franks said he had been answering a hypothetical question, and his answer was that something might happen 10 or 15 years down the road. He conceded that the company might need a cut of station's retrans money in order to continue to pay for the high-price programming, like March Madness, that is also high value, but that it would be "counterintuitive" to abandon local TV given that its owned stations are some of its most valuable assets.