Seeks one-year of carriage at compulsory license rate before move to 'free market'

Sen. Lindsey Graham (R-S.C.), chairman of the Senate Judiciary Committee, which shares jurisdiction over the issue with Commerce, is putting a thumb on the scale for the sunset of the compulsory license that allows satellite providers to import distant network-affiliated TV signals into markets that lack them without having to negotiate individually for the license with broadcasters.

That puts Graham somewhat at odds with Commerce Chairman Roger Wicker.

The compulsory license is part of the STELAR law, which must be renewed by the end of the year or the license goes away. Broadcasters want the license to sunset, while MVPDs, including cable operators, do not.

Related: Sen. Graham Proposes STELAR Sunset Transition Plan 

Graham, in a letter to each of the four network's chief Washington lobbyists Friday (Nov. 1), made it clear that he was expecting the license to sunset. Graham sought a response to his proposal by Nov. 12. That date appears to be significant. According to a source, Wicker (R-Miss.) wants to start marking up a STELAR renewal bill Nov. 13. Wicker is on the record as saying he thought the license needed to be renewed.

At a Senate Commerce hearing on the bill last week, Wicker said he thought STELAR remained a critical law for preserving access to video services for those rural residents and others who find themselves on the wrong side of the digital divide. He also prefaced the hearing by saying it came as the "the committee was preparing to reauthorize STELAR."

Graham pointed out in the letters, a copy of which were obtained by Multichannel News, that the Copyright Office had recommended the license end back in 2011, and said that Congress had agreed, by which he appeared to mean it did not make the license permanent, but renewed it for another five years back in 2014. "As this expiration date approaches," he said, "I am writing to inquire about ABC's transition plan to a free market at the end of this calendar year to avoid any impact on consumers."

Graham's presumption notwithstanding the issue of sunset or not sunset has yet to be settled, though Congress needs to either decide or extend the expiration date if it plans to take more time in deciding as the days in the current legislative session dwindle down to a precious few.

Graham told the networks that he wanted to make sure his constituents could continue to get their stations' news and primetime shows, but again presuming that there would be a sunset and a "transition to a free market."

He said "more clarity" was needed from all of the networks, as well as satellite providers, on how the transition to a free market would occur.

He asked for answers to the following questions:

1. Will their respective networks provide a one-year license to satellite providers for ABC-owned shows in exchange for a "market-by-market" usage fee from each provider, including for use by long-distance truckers and RV owners, who also rely on the license.
2. Will the network agree, for that transition period, to charge a rate comparable to the compulsory license rate charged by the Copyright Royalty Board for 2018.
3. Will the network work with their affiliates to negotiate during this transition year, on a carriage aggreement for "full local-into-local on both Dish and DirecTV for deals begining in Jan. 1, 2021.
4. For areas without local affiliates, will the network commit to negotiating with Dish and DirecTV on a carriage agreement beginning no later than Jan. 1, 2021.
5. Will the network keep the committee informed on its progress toward such agreements.

Graham's offer sounds like one broadcasters would craft themselves, and likely jump at.

In fact, the National Association of Broadcasters was already jumping.

Related: NAB Pushes STELAR Sunset in Facebook Ads

“Broadcasters across the nation thank Sen. Graham for his leadership and recognition that STELAR’s expiring distant signal license is outdated and that the U.S. Copyright Office has recommended that it not be renewed," said NAB President Gordon Smith. "Long having outlived its usefulness, STELAR’s distant signal license now serves as incentive for dominant pay-TV platform AT&T-DirecTV to serve its satellite subscribers with out-of-market rather than local broadcast channels."