Last week, the Senate approved a reauthorization of STELA, the new bill called STELAR (the “STELA Reauthorization Act of 2014”), adopting the version that had been approved by the House of Representatives earlier in the month. In addition to simply giving satellite television companies (essentially DISH and DirecTV) the a five-year extension of their rights to rebroadcast the signals of over-the-air television stations without authorization from every copyright holder of the programming broadcast on those stations, STELAR made other changes to both the Communications and Copyright Acts that will have an impact on TV station operators once this bill is signed by the President. The Presidential signing is expected before the end of the year. [Update, 12/5/2014 - the President signed the Bill yesterday evening, so it is now law]
Some of the important provisions for TV stations contained in this bill include provisions that impact not only the relationship between TV stations and satellite TV companies, but also ones that have a broader impact on the relationship of TV stations with all MVPDs, including cable systems. There is also a provision actually providing more latitude for LPTV stations to negotiate carriage agreements. Some of the specific provisions of this bill include:
JSA Extension: STELAR will give TV stations currently operating with a Joint Sales Agreement with another station in their market which they cannot own under the current multiple ownership rules 6 more months to terminate such operations – until December 19, 2016 (after the next Presidential election). See our discussion of the changes in JSA attribution here and here.
Joint Negotiation of Retransmission Consent: STELAR extends the prohibition against the joint negotiation of retransmission consent agreements between non-commonly owned stations to a prohibition against the negotiations between any two non-commonly owned stations within the same market – not just among the Top 4 station in the market, as the FCC’s recent rule changes had provided (see our summary here).
Prohibition Against Retransmission Consent Agreements that Require Deletion of Significantly Viewed Stations: Retransmission consent agreements cannot include a provision blocking the MVPD (cable or satellite) from carrying a distant signal that is significantly viewed in the local station’s market (or any other distant signal that the MVPD is entitled to carry). So local TV stations cannot force cable and satellite providers to drop (or not carry in the first instance) duplicating network affiliates from outside the market (though they still, at least for now, have the right to insist on network nonduplication and syndex protections – see our discussion of the proposals to change these rules here).
Flexibility on Market Modifications: Prior to STELAR, the FCC’s market modification rules did not apply to satellite MVPDs. STELAR now puts those MVPDs on essentially the same footing as cable MVPDs in terms of market modifications. In addition, the FCC has been given greater flexibility on the modification of television markets. One of the objectives of this greater flexibility is to make it easier for viewers to receive a station on their MVPD that comes from the state in which the viewer lives, even if the viewer resides in a DMA where the primary city is in another state.
Deletion of Stations During Sweeps: STELAR deletes the prohibition in the statute against an MVPD from dropping carriage of a TV station during a ratings “sweeps” period. It does not prevent TV stations and MVPDs from privately negotiating sweeps protection.
Extension of LPTV Copyright-Free Zone: The bill amends the Copyright Act to allow MVPDs to carry LPTV stations without having to pay distant signal fees (which would increase the cost of carriage significantly). The bill extends the local area of an LPTV station from 35 miles to anywhere within the DMA in which the LPTV station operates, plus communities in other DMAs if the communities are within 35 miles of the LPTV transmitter site in markets below number 50, or within 20 miles of the site in the Top 50 markets.
Additional Studies and Reviews: In addition to these and other actions taken by the bill, STELAR also requires a number of rulemakings, studies and reports, including a provision requiring the the FCC to complete a rulemaking within one year to determine what constitutes “good faith” negotiation between TV stations and MVPDs, and another dealing with market modifications and the definition of DMAs. In addition, Congress directs the Comptroller General to study the entire compulsory copyright scheme that currently governs the carriage of TV stations by MVPDs, to determine if it should be changed. STELAR also requires the FCC to publish an annual statistical report on the aggregate average total amount paid by cable systems in compensation for retransmission consent.
These and other actions could have far-reaching consequences. So, while the industry has been awaiting this bill with much concern for many months as earlier versions had even more far-reaching provisions that could have fundamentally impacted the relationship between TV stations and MVPDs, the debate is obviously not over. So watch as these other proceedings play out over the coming year.