Reps. Eshoo, Scalise renew efforts to revamp TV carriage regime

Veteran teammates in an effort to reform the retransmission consent system have introduced new legislation that would repeal retransmission consent--though not must-carry--and compulsory copyright licenses, including the satellite license.

Elements of both retrans (good faith bargaining requirements) and the satellite license are set to expire unless the Congress renews the STELAR law by year's end.

The Modern Television Act of 2019 was introduced by Reps. Anna Eshoo (D-Calif.) and Steve Scalise (R-La.), which they said would address "perennial broadcast TV blackouts." It contains familiar asks from the pair, including preventing blackouts and providing for outside arbitration of negotiation impasses.

The pair unveiled the legislative effort on YouTube:

Look for cable operators to do some clapping over the legislative proposal, though it is more likely the start of a legislative conversation as STELAR renewal heats up. Likely retrans reform's dynamic duo is hoping that the spotlight on current blackouts will give the effort some momentum.

Related: Smith Sees Stealth STELAR Play in Retrans Impasses

Currently, CBS and Nexstar stations are not being carried on DirecTV platforms, with CBS pointing Thursday (July 25) to the sports programming its DirecTV viewers would have to find other means to access.

"This year, there have been over 200 blackouts. That’s more than double the number from a few years prior. In fact, my constituents are facing major broadcast blackouts right now," she said. "These outdated regulations end up hurting consumers in their wallets."

"It’s time for Congress to finally modernize these laws. Our bill goes back to basic copyright protection, so that everyone gets paid for their product, and consumers get to choose whatever they want to buy, wherever they want to buy it, whatever device they want to watch their video on," said Scalise.

Specifically, the bill:

"Extends the 'Good Faith' negotiation requirements (that otherwise expire on December 31st) and applies these requirements to small- and medium-sized cable operator buying groups.

"Protects consumers from experiencing broadcast blackouts when MVPDs and broadcasters fail to extend an agreement by requiring MVPDs carry a broadcast signal while the parties continue negotiations for up to 60 days. Parties are retroactively paid for their content aired during this time. (Effective 90 days after enactment.)

"Repeals retransmission consent, compulsory copyright licenses, and several other outdated statutory provisions and regulations. This would allow free-market contract negotiations to happen under traditional copyright law. (Effective 42 months after enactment.)

"Establishes a mechanism by which the FCC may, but is not required to, compel parties to seek “baseball-style” binding arbitration through a neutral third-party arbitrator, following an extended impasse or a finding of bad faith. Consumers are protected from blackouts that otherwise would have occurred, and copyright holders are paid for their content during this process. (Effective 42 months after enactment.).

"Preempts federal, state, and local authority to regulate rates of cable services. (Effective 42 months after enactment.)

"Requires the Government Accountability Office to report specific metrics about the impact of this Act on consumer and the marketplace every two years. Based on the totality of these metrics the FCC must determine if this Act has had a net positive, net negative, or indeterminate impact on consumers and the marketplace. If the FCC finds a net negative impact, it must recommend specific policies for Congress to improve the marketplace.

"Ensures consumers have access to local programming by retaining the ability of a local television broadcast station to require carriage on cable and satellite providers in their local market. (Effective immediately, no change in law.) "

“I applaud Reps. Scalise and Eshoo for introducing the Modern Television Act. It represents a serious and long-overdue attempt to address the increasing dysfunction in the television marketplace," said ACA Connects president Matthew Polka. "For too long, broadcasters’ greed and ability to leverage their government-granted protections have led to skyrocketing prices and broadcaster blackouts. And for too long, ACA Connects’ smaller cable system operator members have borne the brunt of broadcasters’ misconduct. The Modern Television Act promises real change and real relief for consumers."

“If the Modern Television Act were law today, tens of thousands of Americans – including many customers of ACA Connects members – would never have lost their broadcast signals. And the endless cycle of broadcaster price increases might finally stop, or at least slow down," he said.

“I am especially pleased to see that the Modern Television Act contains provisions that, at long last, would extend the FCC’s good faith rules to negotiations involving buying groups used by small cable system operators, such as the National Cable Television Cooperative."

Broadcasters, who argue the retrans system is working fine but that the compulsory license needs to go, saw it quite differently.

“NAB respectfully opposes legislation introduced by Reps. Eshoo and Scalise that we believe would undermine America’s world leadership in free and local broadcasting," said National Association of Broadcasters executive VP Dennis Wharton. "We look forward to working with Reps. Eshoo and Scalise – and other policymakers – as we strive to preserve a local broadcasting system that is the envy of the world. In an era of social media dysfunction and the loss of daily newspapers, local television remains an indispensable force for good by exposing corruption at City Hall, keeping communities safe during natural disasters, and delivering the most popular source of free entertainment and sports programming.”

“The draft legislation authored by Congresswoman Eshoo and Congressman Scalise demonstrates a broad, bipartisan consensus that the retransmission consent regime is irreparably broken, and consumers are being harmed," said RIDE TV president Craig Harris. "RIDE TV applauds the efforts of Representatives Eshoo and Scalise to reform retrans. Fixing this broken system will lower cable bills and expand the availability of diverse and independent programming.”

"With the bipartisan introduction of the Modern Television Act of 2019, Representatives Steve Scalise (R-La.) and Anna Eshoo (D-Calif.) recognize that the nearly 30-year-old TV rules are harming consumers," said DirecTV parent AT&T in a statement. "Amid cord-cutting, growing video options and internet-based platforms, broadcasters use their special protections in current law to continue to demand price increases from the customers of cable and satellite distributors for TV programming that consumers watch less and less. Unfortunately, the result of this broken system is an alarming number of TV blackouts, with over 200 TV blackouts across the country so far this year.

“In order to protect our customers from these price increases and TV blackouts, AT&T supports Reps. Scalise’s and Eshoo’s legislation and we thank them for their leadership on this issue. We are committed to working with Congress, broadcasters and others to modernize our video and television laws to benefit consumers.”