Pay-TV Pushing Congress to Change TV Markets
A push on Capitol Hill by many in the pay-TV industry to change broadcaster markets (CD May 1 p12) to let cable and satellite subscribers watch in-state stations even when they live outside the market is gaining momentum, said supporters and opponents of the Designated Market Area changes. Although not necessarily a coordinated campaign, having small cable operators and the two largest direct broadcast satellite companies on the same page increases the odds of favorable legislation, they said. Large operators are less active on the issue, which has arisen as Congress considers reauthorization of the Satellite Home Viewer Extension and Reauthorization Act. But the big operators aren’t standing in the way of the American Cable Association, DirecTV and Dish Networks, they said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
“It’s tremendous to have that” unity among cable and satellite, said Matt Polka, president of the American Cable Association. “It shows that this is not an industry-specific issue or ask. This is an issue that will benefit all consumers -- that’s why you see big cable, small cable, DBS and other groups such as telephone groups” seeking similar things, he added. He cited a request made in Hill visits by members of the Organization for the Promotion and Advancement of Small Telecommunications Companies for access to content from broadcasters outside their DMAs (CD May 6 p2).
“Normally warring parties have linked arms” and that may help chances of getting DMA changes, said analyst Paul Gallant of the Washington Research Group. But “any serious DMA reform will be hard to get through Congress.” Others involved in the issue agreed and said it’s early-on in congressional consideration of SHVERA, with the House so far taking the lead. Things could change when senators spend more time examining the issue, said broadcast lawyers. “This is a long way from being resolved,” said industry attorney John Hane.
Some are optimistic a compromise can be reached between pay-TV and broadcasters, with DMA change benefitting cable and satellite companies coupled with a law requiring DBS operators to carry TV stations in all markets nationwide. The two changes could come hand-in- hand as a “trade off,” although broadcasters might not agree to DMA changes to get a local-into-local law, said a cable lawyer. “A lot of broadcasters don’t see anything that undermines market integrity at all as an acceptable outcome,” said Hane. “The so-called compromise doesn’t exist in the mind of a lot of essential supporters.”
The NAB “would have serious concerns if Congress would begin to unravel the thread of localism” by changing markets, said a spokesman for the group. “That would threaten the very foundation of a free and local broadcast system.” The NAB “strongly supports” a local-into-local requirement, but “once that issue is settled, it’s unclear why you'd have to import distant signals,” he added.
Some large cable operators want the ability to sign retransmission consent deals with broadcasters in neighboring markets if they can’t arrive at one with their local station, said cable and communications lawyers. “It is a tougher ask” than what satellite providers and small operators want, said one. An NCTA spokesman declined to comment. DirecTV and the ACA’s positions on market changes may more closely resemble each other, while Dish’s desire for legislation letting it resume importing distant signals sets it apart, said a cable lawyer. Dish was permanently barred by a court from directly importing distant signals, and has used another company to do so.
Dish seeks “parity with cable and DirecTV” on distant signal importation, a company spokeswoman said. The company opposes a local-into-local mandate, she added. “Congress should recognize and embrace” technological advances that let consumers view programming on a wide array of devices and let “the market to dictate which broadcast signals pay-TV companies deliver to their subscribers, provided that broadcasters are adequately compensated for the value of their content,” the spokeswoman said.
DirecTV considers the ACA “a strong ally” on SHVERA, said Andrew Reinsdorf, a vice president of the DBS company. “Their interests are the same as ours,” he said. Congress seems to support changing DMAs, but “this is an uphill fight,” he said. “With broadcasters opposing this, the more folks you have supporting it the better.”
Broadcasters are united in staunchly opposing any changes to their markets, said about a half-dozen lawyers we interviewed. “From the broadcasters’ perspective, all of this hand-wringing about bringing in-state news to viewers on the edge of a state border is a barely veiled attempt to just get leverage in retransmission consent negotiations,” said Paul Feldman, who represents cable operators and stations. “ACA has been calling for years about the need for their members to get leverage, and now that DirecTV is starting to pay significant money, they are interested too.” The FCC already can expand a TV station’s market so a cable operator can carry it, on a case by case basis, said broadcast lawyer Peter Tannenwald. “Most of the time, this business of jimmying around DMAs ends up hurting the smaller stations, because [pay-TV companies] are more interested in big city stations than in-state stations,” he said. “So as usual, big get bigger, and the little people are economically strangled.”