Good morning, i would like to welcome you. Like to thank our witnesses for appearing before us today to discuss these issues. Nt five years ago, this committee passed a stellar reauthorization act. Extended the authorization for satellite provide n companies to broadcast content to unserved households. According to the satellite tv industry this enables roughly 700,000 customers in mostly Rural Communities to receive over the air broadcast television signals. These customers fall into a few categories. The first is household that is receive broadcast content using an antenna. A second is markets where satellite provider does not offer localtolocal service, markets, hird is short where there are no local affiliated stations with one of finally, rks, and satellite tv subscribers have received service through a or an rv. Truck in effect this provision enables dish and omers of directv to receive content from fox, and other where it stations isnt otherwise available. Cable, also required tell coand Satellite Companies like charter, verizon, dish, and thers that offered Television Service to negotiate the carriage of broadcast Television Content on their systems, which retransmission consent or retrans, under a good be decided by, to the fcc. Backstop was and is important because there have been allegations that these not iations have at times been carried out in good faith. When negotiations stall or break broadcasters may pull their signal from an mpvd system lineup resulting in a blackout of that content. In these circumstances, consumers suffer as a result of the two parties inability to while an agreement and its true that some customers ave the ability to set up an antenna to get this content over the air, for many, this option complicated or they go without this broadcast content disputes. Requiring the parties engage in good faith negotiation was number ofo reduce the blackouts and the resulting consumer harm. These were the major provisions bill that are now set to expire at the end of this year. Some in the broadcast industry argued that this legislation should sunset, and provisions are no longer necessary. While i agree that this law isnt a perfect solution, this legislation to sunset would create a crisis that could result in nearly a consumers losing access to important broadcast content. Lapse of the good faith standard and retransmission consent bad iation only invites behavior and consumer harm. More broadly, the media landscape has changed a lot in last five years with major consolidation occurring among mpvds. Asters and ms. Boyer in her testimony argue that is this arms race between two sides has resulted in smaller rates for rural cable providers who dont have the scale to get who rential rates and oftentimes pay higher rates for the content than their larger rivals. Across the board, we s that the rates for retransmission consent are increasing. Of overso seen the rise the top providers like sling, hulu and youtube offering live over the internet to consumers. This is a complex marketplace hat consumers rely on for information and entertainment and americans pay a lot every year to get access to this content. Look forward to the testimony of our witnesses and with that i my end in inute to from california. Hearing is odays not so much about choosing sides between broadcasters and cable users. About consumers who are losing out in the media market in two ways. Unexpected fees. Too often consumers are held disputes between broadcasters and cable. N 2017, there were 213 blackouts, which is more than double the number from five prior. Im pleased to report that mr. To ise and i have agreed champion legislation to end blackouts by overhauling outdated regulations. Next, i think we should also deal with the hundreds of millions of dollars of below the line fees that consumers get stuck with every year. Bill hr 2020, 1220, it simply requires that table, phone and internet providers include all prices that they advertise to consumers. Kind of a common sense idea. Think that it would ensure that consumers would then know xactly what they are paying when they sign up for a service. So thank you, mr. Chairman. Productive rd to a hearing, and thank you for yielding to me. Now the k you and chairman recognizes the rank subcommittee for a five minute opening statement. Thank you, mr. Chairman and and i todays hearing thank our panelists for being with us. Considering the interplay local broadcasters and direct broadcast satellite services, known as stellar. Provisions of stellar exentire at the end of 2019 and that this subcommittee is continuing this process on the question of startedrization that we last year with a broader hearing examining the current state of video marketplace. In the subcommittee hearing last september we learned about consumers habits such as the continuing rise of ver the top Video Services and notable shifts of advertising expenditures across various mediums. Nevertheless, while online Video Services flourish and deliver bedrock ofernatives, our video marketplace remains local broadcasting programming. Of us rely on our local broadcasters for news, weather, engagement munity and local interest programming. Accordingly this subcommittee to ensure that local broadcasters retain the ability and vest in infrastructure programming that keeps all americans connected to their community. Has also rs, Congress Played a key role in ensuring that Rural Americans who are an over the eive air broadcast Network Signal are ble to receive local news and contenten via direct broadcast satellite services. Accomplished this in 988 by creating a statutory copyright license for fee, icense fees that helped the direct broadcast satellite industry take root. But the video marketplace evolve and accord xwl every five years we carefully examine when this mod reauthorized, repealed or readvise advised. Of whateach ittervation we call stellar we ask the expert subject matter agencies effectiveness e of statutory license fee model we hold hearings calling upon a broad collection of the take holders representing both consumers and the industry participants. Im pleased that we have again of add qualified Panel Experts who can assist this committee to paint an accurate market. Of this its important that we foster a competitive video marketplace that all americans continue to receive access to reports, ocal news weather updates, and critical information during emergencies, unfortunately,e, last week in ohio, we had a series of tornados and folks in my district in particular, had to rely on the local broadcast as to what was occurring. I look forward to working with the chairman and members of the carefully e as we examine reauthorization and i think there are witnesses. Im going his time, to yield to mr. Long. You. Ing i thank my friend for yielding and i would like to thank the being here an im especially happy to see a fellow boyer is here although she did make the unfortunate district to live in not mine. Istrict and as i Real Estate Broker for 30 years, i still have a lot of to move if you want into the best of the districts we can set you up. All agree that the entertainment marketplace has and is rapidly evolving. There is more competition than ever and Government Intervention is not us a the answer. To s important for us examine the state of the video marketplace but as we approach a reauthorization of stellar, we need to take a hard look at the underlying and its relevance today rather than assuming its passage is a necessity. Hey say there is only three things in this life that are certain, death, taxes, and the of stellar. Tion we should ignore the inclination to rubber stamp this legislation only because this committee has historically done so in the past. And i yield back. Mr. Chairman, at this time, are there any other members remainder claim the of my time . Mr. Scalise . Ranking member and mr. Chairman. Coming to all of you talk about stellar and not just stellar in the context of in that silo, n but its a time that forces us, the entire look at marketplace, the entire video marketplace and all the laws i actually because share the expressions of some of talk about whyho they think stellar should expire. Its not because they think it because they want more reforms, and some people might think that stellar going reform but it really doesnt. Brings us back to the act law, l 1992 cable the foundation, which is outdated. We have a marketplace thats changed dramatically since 1992. Pull up content on this device and its not governed, would pull up i is not governor earned by the 1992 kale act. If i go on the internet and pull something up r if im over the top, why do we have such a diverse set of that apply to a basic industry in our country . Entire to reform the 1992 cable act. Its long pastime for this it. Gress to do i applaud congresswoman i spoke a few minutes ago. Weve been working closely and hopefully we can get to the reforming the entire marketplace that regards video nd i appreciate the time, mr. Chairman and yield back. The chairman recognizes the of the full committee for his opening statement. Thank you. For nearly 70 Years Television unifying threat in american society. It brings people together. Riends gather around to watch the big game and coworkers share their theories about the twists and turns of the most watch series. Tv is also the place that we get our local and National News and we turn for emergency information during a storm or natural disaster. The hearing today may appear to focused on a few discreet arrest contain provisions of communications and copyright law but it is fundamentally about to umers getting access broadcast programming, whether they are in urban or rural areas. Focus should continue to on the timeless values that inform our media policy, and localism, diversity and competition. The stellar reauthorization act stellar, and its predecessors, established the ramework that allows satellite and Television Providers to deliver broadcast stations inside and sometimes outside of subscribers market to their customers. Some socalled unserved their bers cant receive local stations from an antenna orause they are too far away there is a media market that doesnt have a station affiliated with one or more of networks, and these consumers must be protected. At the same time, satellite providers are not required to carry local broadcast networks. Subscribers some receive out of Market Network programming from their satellite of local nstead stations. Congress also created the good aith negotiation rules that underlie the agreements that allow consumers to watch over the air broadcast stations as of their cable and satellite tv packages. As media consolidation has so, too, have the fights over these programming agreements, and unfortunately, been caught in the middle. The number of station blackouts as been increasing as have the rates consumers pay. Smaller Telephone Communication onpanies are facing a choice whether to continue as Cable Operators or simply become providers. As we begin our examination of stellar its important that we howthe ultimate question of best to put consumers first. I expect that my colleagues on of the aisle will offer a number of different solutions, large and small, tackling different issues up within the media landscape. In my opinion we should focus on the consumers, and questions like what are the mplications, if stellar is not reauthorized, and how will the customers 0 current be impacted . Gives the path that consumers the ability to access at prices they can afford the want . Ision content they how do we ensure consumers are pawns between video Distribution Companies and big broadcaster station groups . We ensure that broadcast stations remain outlets of expression and trusting stores of information for the local community while also promoting competition to the benefit of consumers . Also, how can we encourage the carrying of local programming at reasonable rates and that local programming reflects the diversity of views . This committee will closely examine these issues and Work Together to find a consensus approach of moving forward. I want to thank the witnesses being here today. I dont know if anybody wants my time. If not, ill yield back. Thank you. Oh, yes. Ill yield to the vice chair. Thank you very much, mr. Chairman, and i think chairman doyle and our Ranking Member. Good morning. I want to thank you for holding this very important hearing. Providing equal Television Broadcast access for consumers is crucial to informing the public and having more competition available will assist our constituents. Were not seated here today to discuss satellite and Cable Operators or broadcasters, for that matter. Were here today to focus on the consumers. Our constituents deserve rules that protect them. They deserve rules that protect the diversity of voices in media and access to the spectrum. Its my hope that your input as experts in the field today will give us that room and that space to do just that. With that, mr. Chairman, i yield back. And i yield back as well, mr. Chairman. Gentlemen yields back. The chair now recognizes mr. Walton for five minutes for his opening statement. Good morning, mr. Chairman and good morning to our witnesses. Were delighted to have you here today. I know your expertise will help us as we work on this legislation and review the media marketplace and whether or not Satellite Home viewer arguments first passed when Ronald Reagan was president , works for Television Viewers today. I especially would like to extends a warm welcome to my friend and fellow orchiesian, smith, who effectively served oregon in the United States senate for a dozen years. Its good to see you over here in the peoples house. 30 years ago, congress decided to ensure that Rural Americans unable to receive an over the air broadcast signal would still be able to view content via satellite services, for a large rural district like mine in oregon which would stretch from the Atlantic Ocean to ohio if you laid it over the east coast this was critical. Congress would go on to bless the budding satellite industry with a discounted satellite license as an alternative to individually negotiating each copy right holler. While the license to provide localtolocal is now a permanent fixture, the distant Network Signal license is still reviewed every five years along with other elements that accompany the extension. As i emphasized when we did this five years ago, dur my time as subcommittee chair this must be a transparent process and driven by data. Im encouraged that the fcc last year commenced its review of the media landscape. Im also appreciative of the work by the Government Accountability office in drafting its report to congress, directing, describing stake holders views on phasing out the statutory license. Our goal should certainly be that everyone in the country has access to local content and at a reasonable price. You all have heard me discuss my background in radio broadcasting, hopefully understand my priority that local content is preserved. We must have a model that evolves around this concept because although we might like watching the latest shows on netflix or some other service, its essential that we have access to our local news, sports, weather and emergency information. Whether its wildfires and smoke warnings in the summer in oregon tornados, traffic accidents or emergency situations elsewhere in the country, local content provides vitally trustworthy and timely information to communities across america. Ts also certainly understandable in our fast moving world to stake stock of whats changed. Technologicalle developments with how americans consume video driven in significant part by nline Video Services have led video distributors to see steep eclines in subscribers as consumers cut the cords and advertisers have seen them move platforms. This impacts the distributors and broadcasters and their ability to serve their local in depth news h programming. Local broadcasters have been serving s resources their communities and they deserve a level Playing Field. Licenses they also trustees of the Public Airways and must serve the publics interest. Means they serve the needs of the community. We must be careful not to hamstring thing with negotiating restrictions not justified by market conditions. Most importantly, consumers gaps in coverage, blackouts and opportunities that drive up prices, and reduce the quality of content. The bottom line is that Congress Must consider whether a distant expansiongnal license is a bridge or a blockade to delivering local coverage. To ensuring ted that all Rural Communities both in oregon and across the country ontinue to receive robust, effective and affordable local coverage. Period. So im looking forward to the today. G and hearing from our witnesses, a crosssection of industry and holders asrest stake we move forward in this process nd examine the role of statutory license in todays video marketplace. With that i yield back. Yields back. Man we would like to remind members rules, allo Committee Opening statements will be made part of the record. Would like to introduce our witnesses for todays hearing, s. Pat 2rish yeah joe boyer, man. Ident and vice choir mr. Robert thun, at t mobility welcome,cer. Nment, senator gordon smith, president and c. E. O. Of the National Association of broadcasters, senator, welcome. City. John bergmayer, council, Public Knowledge. Welcome. We want to thank our witnesses for joining us. Your k forward to testimony. At this time, the chair will now recognize each witness for five their openingvide statement. Before we begin, i would like to explain the lighting system in of you. There are a series of lights. The light will initially be green at the start of your opening statement. It will turn yellow when you have one minute left. So please start to wrap up your at that point, and the light will turn red when your time expires. Ms. Boyer, youre not recognized for five minutes. Nd please make sure your microphone is on. Thank you, good morning. Bring you greetings from the foothills of the great ozark mountains in Southeast Missouri. Astastarted our mom and pop in 1992. This meant we had to take out a econd mortgage on our home and we used our farm as collateral. Its never been easy. Our systems are very rural. Areas you need a tomcat if you want kittens. 147 miles from our local, nbc affiliate and cant an get these signals free over the and and more than 75 miles away from our local nbc and cbs stations. Most of our subscribers none of offer our local news, sports, or weather. No matter what others might tell you today. We have a very sensitive population. None of these our five countie impoverished. This simply means that the annual Household Income has been poverty levelonal 1960 census. Yet, we survive. Know about already the retransmission consent problems from your constituents, digit price hikes, blackouts before march kwis events and a requirement to channel 2, a channel no one has ever heard of so the reality for rural operators is have gotten worse since the last satellite and television reauthorization. First broadcasters geesingly control multiple Network Affiliates within local markets. Instance, in my market, the same folks from atlanta, cbs ia, own both the local and the abc affiliate. This naturally leads to higher prices. There is no other game in town for us. And these two stations air the exact same local broadcast. Same weather guy. Same news guy, same words. Same news. So thats one station for the even of two, and its not my local news unless we [inaudible] secondly, broadcasters now many more stations nationally. The owners of ew the broadcast station that i dealt with, all three of them. Now, i deal higher rates in the form of take it or leave it broadcasters he who do i know where im at or anything about my customers. Thirdly, broadcasters are requiring these Regional Sports networks to increase their leverage if these bundling of contract renewals. For is especially egregious us, when sinclair finally finishes their purchase of the sports midwest, home of the cardinals, hell, we could drive all the way to st. Louis, buy the, hot dogs, popcorn and beer, for the price of what well be paying sinclair for our subscribers so its no wonder why the broadcasters wants to llow the sun to set but whats needed is the sun to shine, on their behavior and their what consumers and competition. Their prices are especially bad for small operators like me. The fcc reports that small cable average at w pay on least 30 more than large systems pay for retransmission consent. My small system that percentage is 47 . Oday, the four affiliated broadcast stations make up 20 of my programming fees. For the other 300 channels. And that percentage is growing of more than 200 percent every renewable cycle so much about are as your constituents as i do about our customers. Elderly, on fixed income that is on us, for that Video Service and who are greatly subscription gher fees, and a lot of these folks cant even get satellite or dish. Because its not available to them. But, because they cant afford it. Checking have accounts. They dont have credit cards. They dont have credit. All they can do is work with the local cable tv who will work with them. We can work with them. We can even barter out at times turning a deaf ear to my plight today simply ensures that hose who live in the hills and the hollers of Southeast Missouri and the rest of Rural America will be uneconomical to and those who do have our service are paying through the dated r it so the man regulatory vantage given to broadcasters, make a free impossible. Solution now, i hate the idea of congress business. Nvolved in my but they are already involved in my business. From basic tier buyouts to channel placement do need your help. One solution of many, to help mitigate these soaring fees faithbe to apply the good rules to negotiations between larger station groups and the which is a buying group thats a small cable tv use. Tors like myself affiliated with the American Communications association. We have an so affiliation. Regulations and reauthorization desperately needed. To, we can put our shoulder to plow and figure this out now. Thank you. The ank you very much, chair now recognizes mr. Thun for five minutes. Ranking you, chairman, member walden, subcommittee and members of the committee. Im Senior Vice President of at t. T programming at my current role is securing content rights for both Major Networks and local broadcast groups for the company. At t is 143year history of nnovation that includes eight nobel prizes. We employ more than 200,000 of the 50 cross all states. Were deeply invested in our country, our communities, our and our customers. This hearing is aptly focused on consumers in a marketplace undergoing revolutionary change. Its consumers, our customers, constituents, who are driving these changes. They are demanding high quality ability tont and the watch it where and how they want to. Its important for policymakers that the laws reflect a vibrant video marketplace and all consumers benefit from it. Present they do not because the legal Regulatory Framework or broadcasting intelligent content distorts the market in favor of broadcasters. This framework is sorely in need recalibration. The retransmission consent egime that governs the video marketplace dates back to the 1992 cableality. Put into place to help broadcasters obtain carriage on cable platforms were the only me paid tv offering in most areas. Despite the competition in the broadcaster lace, fees for carrying these stations have roughly doubled over the years. Ive since 2008 through 2018, the 500 ave grown from a million to 10 billion. Which a 2,000 increase is clearly unsustainable. Is this happening . Because they cannot offer network rs alternative programming even temporarily during an impasse. Local s unfairly protect marketers, harming innovation and consumer choice. Limit the ey tend to increases in these fees local broadcasters respond with blackouts. Local broadcasters have shattered records for black juts. As i testify in front of you face blackouts across 33 stations covering 25 markets. Cycle of increased fees includes over 20 million of our premium customers. Retransmission and consent has weapon for broadcasters to use to the detriment of consumers. Modernize the law to provide a more level Playing Field with the local broadcasters marketplace has seen tremendous change since congress 2014. Renewed stella in there are over 170 million over the top subscriptions with have more subscribers than at t and comcast combined. Be the stellar renewal as an opportunity to of the video em marketplace, the broken regime to. Be clear at t strongly supports stellar. Al of it contains provisions including negotiations requirements in the statutory copyright license permitting to provide rriers Network Programming to more than 800,000 satellite subscribers. Subscribers are hundreds of thousands of rural homes that broadcast stations fail to reach. Addition it provides long haul truckers, rv enthusiasts 130r9s fans the satellite Delivery Network tv. This ss should take opportunity to make permanent the license that Police Network service to hundreds of thousands customers. He broadcasters negotiate in good faith serves as an important backstop. We still have issues with negotiate fusing to fairly or even respond to offers in certain cases. Espite this, the good faith provisions are important to helping these negotiations along. The notion that broadcasters is se this provision emblematic of the challenges we face under the current law. Grateful to the committee for holding this important hearing. Also like to acknowledge scalise, to reform it. We look forward to working with a and all of you to find solution i look forward to answering any questions you might have. Thank you, gentlemen. Senator smith, youre recognized for five minutes. Morning, you good, chairman and doyle. And ng members latta walden. And members of this distinguished subcommittee. My name is gordon smith. And c. E. O. Of nt the National Association of broadcasters. Free and local broadcast television stations i ving your hometowns, appreciate the opportunity to testify on how congress can ensure that viewers are better to access their local news, sports, weather, emergency the mation, by allowing expiring provisions of stellar this year. Today, stellar is not only considerable e to advances in the media marketplace but any authorization will further harm he satellite viewers that are currently denied access to their local television stations, as a of this law. For these reasons, broadcasters ppose stellars reauthorization. Similarly, the Copyright Office, charged with ncy administering stellars license, yesterday report calling for its expiration. N todays competitive media landscape local broadcast television remains the most watched source of news, updates, entertainment programming, sports, and journalism, e something thats in trouble in this country. Across ommunities america, were their lifeline. Ur viewers turn to local stations to get weather reports, learn how to help neighbors in eed and watch trusted local news anchors give an unbiased view of whats happening in their communities. Broadcasting is a critical electronic thread that keeps together, nity informed and safe. The exceptions to the benefit this local broadcast system are those communities hat continue to be served by out of market stations as a result of stellar. 1988, when the original satellite law was enacted viewers had two predominant video programming. Over the air broadcasting, television, or subscription offered by a single local provider. Legislation, a predecessor of stellar, was successful in enabling the Satellite Television companies to better compete with monopoly. But it was never meant to be permanent. Gave satellite operators a crutch. The ability to serve local with out of Market Network programming at below market rates, and without having negotiate for it, but 30 years later, todays media is virtually unrecognizable and dramatically different, even compared to just at the last stellar renewal. That Satellite Companies Congress Subsidized are now behemoths, dollar and todays competent decision for viewers comes not from those tv providers and their cable brethren, but also moth ulated behe Companies Like facebook. Impediment ical xists today to keep at t, directive and dish, from providing local broadcast channels. Stellars provisions incentivize those customers to shrinking universe of eligible viewers with out of arket stations because of the subsidy. To put this in practical terms, subscribers, in iowa, saw a news story about a garbage catching fire in los angeles. The local news they should have that of Crop Insurance on es rising and its impact farmers in their state. In the hawkeye state. During times of emergency the difference between what stellar versus the local broadcast news is stark. This is a business decision that a 200 billion at t directv is in 12 rural markets across america. A choice that puts their profits ahead of service to consumers of ahead of the safety communities. Broadcast and viewers salute from members of congress who have highlighted harm. Stellar to end this consumer harm, and to modernize the video Laws Congress should allow stellar to expire as it intended. Ally there is no policy justification or technological reason for this outdated law to be reauthorized. He time has come to stop subsidizing billion dollar Satellite Companies and to instead provide viewers with the the most watched, the most timely source of community news. Their weather, their emergency information, which is their local broadcast stations. Thank you for this opportunity. You. Hank we now recognize mr. Bergmayer minutes. Thank you, all the members of the subcommittee. Congress must reauthorize better, make it permanent. 870,000 satellite subscribe not be a bargaining chip n the decades long dispute between broadcasters. Whether whatever its called ts ensured that Satellite Television companies can continue to retransmit local broadcast stations to all of their customers. Stellar is an important Building Block of video Competition Among iewers who live in underserved areas to continue to receive a full range of national programming. Satellite television has been a success story. Action by congress and the federal communications ommission has ensured that Satellite Television, once a new distribution technology, could reach viewers. Policy that ensure new distributors can access the Public Interest and successive satellite should be a importance of e fostering new modes of video competition. For congress ason to create an artificial crisis every few years. Why congress enacted stellar in the first place remains unchanged. A necessary part of the current overall regulatory systemle which otherwise has no lear way to deal with the problem of short markets. However, if congress does choose for onlyhorize stellar it could distance basic tier buy through. Would better incentivize all to come to the table but fundamentally if were reforms they should benefit consumers, not one industry sector at the steps of another. For years, Public Knowledge has believed this is an instance where predominantly deregulatory approach is needed and has a chance of bipartisan support in. We would like to recognize representative scalise for their leadership on video reforms. Ce a promising approach would be to copyright lines, retransmission consent system with a regime based purely on right. This would better aline in the interest of programming creators eliminate utors and dukekative negotiations. Ensure that local broadcasters can create original ocal programming that they own the rights to. It would make it much easier for access distributors to programming by limiting the current two track system where rights are negotiated one way, and wherein structural ave a advantage. To eliminate viewer blackouts goodan approach would keep faith requirements in place. Avoid al phasein would industry and consumer disruption. Additionally, its time to nonduplication and yndicated excluestivety protections as its prove than such measures are unnecessary Video Industry can manage its affairs. Ambitious reforms of this kind to jet stream y line the marketplace. Hile Public Knowledge supports changes, incremental reform should not be off the table if hey are more feasible in the consent term. It could be improved through the adoption of clear standards of ood faith and through the prohibition of certain actions hat would be considered bath faith. Congress should consider promoting competitiveness by end the the sec to unjustified policy intervention al la carte offerings unlawful. To certain online providers. Congress should also promote and prevent ness driscriminatory building practices that can hold back online video. In addition to supporting open rules, congress should examine disscrimmayor data caps can hold back online video competition. Ts time for congress and the fcc to revamp the rules, to promote the Public Interest. A video marketplace that serves the Public Interest would give and the ore choice ability to watch any programming wherever they want on the device of their choice. At the same time it would ensure a fair ple are paid price. By tying egin expiration to the vaurs marketplace rules. Thank you. We thank all the witnesses for their testimony that. Concludes opening statements. Were now going to move to member questions. Member will have five minutes to ask questions of our itnesses, and i will start by recognizing myself for five minutes. N, you say roughly 800,000 tv subscribers depend on he provisions of stellar to receive broadcast content. What would happen with those provisions expire and do you any customers would lose programming that they currently receive . Is your microphone on . Sorry. Expires those customers simply would not receive broadcast stations. Would lose s, they access to that programming. Senator smith what do you that . About i know there are 12 markets localt t does not provide news to, that it could. It chooses not to. There is no technological reason why they couldnt. He market has fundamentally changed and renewing stellar to ly perpetuates the harm many communities, specifically continue. T would ms. Boyer, let me ask you what would be the consequence if stellar tokes spire, specifically the good provisions that allow retransmission consent. Thank you, congressman. Important because reauthorization gives congress that ability every five years to reexamine the marketplace. To make necessary changes that consumers, tomers, your constituents, and less oversight by congress, its critical, it consumers and competition because the broadcast industry, which has already shown a willingness year to raise their prices to consumers, and increase their broadband tv or broad tv during blackouts, will have no check and balance whatsoever. Good for your constituents, my consumers, my that we provide service to, its kind of that david and us. Ath thing for ive got 3,000 subscribers. Im just 3,000 subscribers. Gnat, you know. I said that this morning. The gnat on a butterfly. Whenever you think in terms of dont care. On, they they dont care about me, what channels. For my four they dont care. Thats more than i pay for espn or anything else. Its like david and goliath. David needed god to help him. Need you to help us. Pretty close line drawn there. You, mr. Thun, what do you think about the good related visions retransmission consent negotiations . I think they are critical. They sit today, they are extremely loose. Hey are a guiding post for negotiations, but they dont work perfectly. Were currently in a situation blackouts because we put a proposal on the table across seven broadcasters. They refused to respond. A deal nt want to do independently of each other. They wanted to do them altogether. Herefore, they gave us no ability to keep the signals up. They took them away. I welcome divine intervention were in this because having an unsustainable path to increases and that goes to the consumer. I think i have heard from ofse seven broadcasters, all them have said they have offered to keep the signal up and at t has said no. The were talking about same one, i dont know. But i know that if you want to lamentable he catalog of bad faith, what you been ind is there have very few uses of this good 235i9 the sion and never have broadcasters been found guilty of operating, and negotiating in faith. Never. And were committed to good faith. Boyers and mr. Thun, i understand there are a large tv markets in this country that are duop, and in case, a single entity owns parts. Ur what impact of consolidation does this have on you and your customers . We have one company out of atlanta, georgia, that owns two of my four. A much larger price, because they can come in dont want toally mess with you. Here it is, take it or leave it, those good faith regulations help us to still have a seat at table, irregardless of how great that price gets. Price bsolutely leads to increases. Ironically, one of those markets, i believe there are two have four. T one of those we currently do not ave signals because the broadcaster has been given too much power to the consolidation that se stations in market. I dont think thats the way the intended. But there are loopholes that allows broadcasters to put other powered stations as well as others that create undue i see my time is expired. You very much to all the witnesses, and the chair now recognize mrs. Latta. Subcommittee Ranking Member for five minutes to ask questions. Smith, i believe that local broadcasting is to my constituents, Vital Information to our communities. The focus on local news programming and interest local area. The in Bowling Green and the communities nearby, broadcasters re engaged in Community Activity to put on local fundraisers, toy drives and events. Harity ive held two large Public Forums in my district on the moderated id crisis by local news anchors on their own time. Its evidence that local broadcasters want to build and maintain Strong Communities newsroom. He with that, senator, im curious, if people want to receive out of than local broadcast programming and does stellar encourage sorry, does stellar encourage providers to local broadcast signals . What stellar enables, if it kentucky, i green, dont know if there is a Bowling Green, ohio. From. Ats where im Bowling Green, kentucky, for example, is not served with a server by at t or directv and they are complaining about at t d it wouldnt cost 200 billion company, a whole lot to negotiate with a local broadcaster. Me, the whole point of the signal was just to give them big breathing space to get enough to compete with cable so that over time, when technology and it does ble, oh, they would then, as they long ago, provide one of the 212 markets in the country. Thats not happened. And it should have. There is no reason for it not to. To you, mr. Up thun, from a satellite perspective, what barriers do and mvps face in inviting local programming . We dol, in the 12 markets serve, those constituents with local broadcasting, we happen to an over the head solution thats integrated that provides our mless experience to customers. So we do in fact, in those markets do provide local programming. The impediments to providing it are also cost. We have to turn around. Markets y, of the 12 that we don service, they are either in all cases except one, all four or five. One market that isnt, its a short market. When you face that going into with, again, stations somehow circumventing what i think the laws were to have, multiple stations, it makes it even arder to enter into those markets. Thank you. To help s intended Rural Americans receive local news. Your testimony makes it clear you dont believe stellar is serving Rural America. How can we ensure that not ituents like mine are disproportionately impacted by the reforming or repealing stellar . It, bviously, a rewrite of the Communications Act would be awesome. Know that maybe at a granular level, a small changes is whats needed. Situation where the signal does get everywhere, through dishes, and through increasing prices, they have the same problem we have in etting that signal to our customers because of the price. If youre do you know in the hill, clearwater, in immediate mont, missouri, you arent getting anything. If you dont have youre not getting anything. Income, youn a fixed ant get dish, you cant get directv, if you dont have voycom you arent getting anything. Those are customers that were concerned about. Bulk of my p the customer, those folks who are economically impaired. Important for us with the good faith rules that are on the board. Thats what makes a broadcaster come to com or sinclair the table with little ole me and say, you know, we dont want to talk to you. Dont care about you, but i honor good faith. Away, if they sunset that in december, they ould care less, probably, they could give exclusivity to dish or the other Satellite Companies prohibit us from having their local channels at all. Protectionsies some because were small. Back. Ntlemen yields the chair now recognizes mr. Minutes. For five i appreciate you coming down us. And talking to sarah gordon, smith, excuse me. It works either way. What percentage of the retransmission fees typically reverse fter transmission fees have been accounted for . Whats interesting, you add up when claims of broadcasting gouge. We represent, depending on the company, 12 cents on a cable bill. I dont think were the cause of cable inflation or satellite what we do d appreciate is the opportunity to negotiate in a free market for value of our content. What we do and that supports localism so the news is someone , sir, and not at the national level. For not you filibustering. The retransmission fees have time. Oing up over whats happened to the share that local broadcast affiliates getting . N are down. Atings so, to directly answer your uestion, the share is diminishing, but we face an ever pricing. Ng sea of and so im not sure where the 12 cents comes from. Bill ertainly isnt the that we pay to any individual station. Than that. So we have to take on and ultimately our consumers take and its a bad policy. Its a bad place for our customers to be and if their continuously going to go up, certainly at the clip that broadcasting fees are going up. Thank you. Between local broadcast affiliates receiving a smaller retransmission fees and did relaxation of media the past rules over few years im concerned that the principle of localism or the principles behind broadcast licenses being undermined, access to aveless local. Mr. Bergmayer, how does of media ownership rules over the last two years retransmission negotiations . Yeah, i mean, i certainly localism. Goal of i think local content is very viewers. T to i question whether the current regulatory scheme that we have n place is the best way to promote localism and one of the things that undermines localism he most is broadcaster consolidation. When you have broadcasters, not really local broadcasters, they owned by a National Chain that spans the country, and net like sinclair star, which are just as big and powerful as any of the other more companies that are known brand names to consumers. And i think that structure, where different stations are together as part of single retransmission consent negotiations, where the carriage of cable content is part of local signal retransmission crowds out small independent programmers, which harms the diversity of rogramming generally, and its really hard to see how this system benefits localism in any significant way. Youre using the word ears,idation, music to my mr. Bergmayer. Thank you for saying that. Testimony you note in 2014 Congress Prohibited ocal stays from jointly negotiating for retransmission consent. Broadcasters have found ways pro bhigss. What are the ways they are using to get around the pro bhigss . Previously,e i said multicast ing the feeds to put another big four station upon their one broadcast stream. As well, they are buying low power stations and placing these networks upon them. More and seemingly more markets that have more than the same n owned by company and thought nationally is the the numbers always leads to higher prices and is a bad thing for consumers. Ms. Boyer, could you describe what effect blackouts have on your viewers and their your business . Well, in my particular neck of the woods we dont have blackouts. Simply dont. There is no place where anything say or do is o controversial enough that a will cut their signal off to me. Obviously, 75 , to 147 miles away from our local affiliate. Chairman, ill give you nine seconds. I thank the gentleman. Now races the Ranking Member of the full committee, mr. Walden. To thank you nt all for being here. Sitting here and listening to this i dont think there is an that isnt consolidating. Represented here. Everybody is. Forso, ms. Boyer, you aside a second, there are a lot of big players represented in this room. Im honored. You, too, could be a big just keep day if you going out of the hollows and the hills. All of that. Its tough serving in rural areas. District is enormous. Care a lot about how we get affordable programming to but i also know that programming has great value or you all wouldnt be having this discussion. How you set the value. N my opening statement, i talked about some of that, and the Copyright Office just wrote Judiciary Committee yesterday and they recommended hat the license be allowed to sunset due to its limited current usage. The distance signal license. To ask that the letter be entered into the record, mr. Chairman. I think off copy of that. Without objection so ordered. So according to copy right the royalties have plummeted since we last reauthorized this act in 2014. Somewhere around 85 to 87 nationwide. And they say this is, and i due to a dramatic decline in total subscribers which in affected by the drop in overall distant networks stations and two, the of nonnetwork stations such as wgn. Estimated that about 500,000 households get at least one distant signal. Believe, hun, i according to your testimony, hat number is somewhere around 870,000 individuals. Or households. An each of you explain what those numbers are based on and what you think explains the discrepancy there, between households and 870,000 households. Mr. Smith . I think the only way they could get to an 800,000 to include the cw which is not about localism. Mr. Thun, is that what happens . Im not sure of the detail those what goes into numbers. Know the those numbers are combined with dishs and i assume they use the same have the same number or they apply the same standard in gathering their but those are could you look into that more and provided for us, the record . Will do it i want to go back to you. Our friend talked about the importance of net neutrality. Smallrious at the regulations might mean for you. We do not favor reinstating. And hundreds of members opent support an active internet legislation and all firms operating in the internet ecosystem. No one should be able to block Internet Access subscribers from accessing lawful content. No one should be able to engage in unreasonable discrimination. We followed the state practices as well in our businesses, so should we do all those things. We are a good player and it is important. I dont think it is productive to consider this issue. All right. Broadcastersu said represent about . 12 of the overall cable bill. Where do you get that number . And we follow it fairly regularly. What do you say about that . Am not sure they were that low. Numbers are significantly higher than that. I dont have the exact number. By what weis dwarfed pay overall. The subscriber right off the p l. That is for retrans question mark what you pay for other services . 54. You know what i like about a small operator . She knows her numbers. The chairman recognizes you for five minutes. Thank you. We turn today and really appreciate it. Is nice to hear from different points of view. Viewve a lots of different represented and unfortunately, the consumer is the one in the middle of all this and the one ones wehe need to be focusing on. To the committee and Judiciary Committee, raising an issue that is facing many of my constituents. We have directv. I would like to submit that into the record. Ordered. Thank you. Folks are subscribing to directv. They are not able to receive local broadcast. I was interviewed by one of the stations and they said i said we will have the hearing and ill let you know what comes of it. Many places, even an antenna will not pick up a local broadcast. V things i talk about is rural broadband. It is very difficult to build out, if not impossible. The infrastructure cost a lot of seems tot satellite build for local and local should not be that hard. Does at t, directv have any intention of bringing local service to my constituents in the near future . We do. We have an integrated solution that takes the signals over the air, pumps it through and subscribers can enjoy dvr functionality. We do have that in place and we also take three dollars off the of the taxpayer in. I think it is partially incumbent on the broadcasters as well. They could invest in their they wantstations in theely on us to pay them at retransmission fees. I dont know if all the blame should be shouldered upon us in this regard. I do want to ask a question if i could. Thank you for being here. You have unique insight when it comes to insight. I think this committee is familiar with Public Knowledge. I would like to address the question about the view. Pull the microphone closer to you. Were having trouble hearing. I want to you that they are not coming to iowa just to let , you know. I do believe, as a global general statement, i believe every customer has, should have the opportunity to receive local broadcast. We do everything we can to make sure that happened. What about you . I would agree. All things being equal. Having access to local programming. How do we get that . Whether its expiring or being renewed, may not even make or break the system. I think basically the current regulatory system as we see at the debates today is not serving the interest of viewers of local programming. People who pay those, thats why in a written testimony, a lot of specific details and we support that. I think its localism better than these incremental things. First priority for guaranteeing improving that, what the numbers should be. Can you specify . First thing is to make it permanent, to make the prices go away and we can address the underlying issues in the marketplace. One way is to start at the compulsory licenses. We then layered retransmission on top of that already existing system. Every little step made sense over the years. I think we need to radically rethink the ways that broadcasters and video distributors interact. That will better align. I do have questions, i would like to submit. The chair recognizes you for five minutes. Just some historical, remembering as committee, Digital Transition and away from analog and i think we lost distance, digital plus, kind of information for some of my colleagues not here during those battles. Some of the local areas, had trouble getting their signal. Clearly we have a different opinion on this. The question is, is this just a binary choice . So let me ask this, senator smith, good to see you. Happy to have you here. Can you briefly describe in more detail how you envisioned a negotiation process between broadcasters and satellite operators for local programming . Probably not unlike what occurs now through the offering. There are Market Solutions but as long as the incentive is given to not bring local, they have no intent to talk to us. Same question to you. It would be a tremendous harm to us in our negotiations. We feel like the minimum is we feel like the minimum is being said here. And in certain cases, its not being met. That would be harmful ultimately if that went away, im not sure how broadcasters would behave, more progressively than they are now. In a regime were we have those policies in place, we seen the increases i talked about, 2000 over ten years. I will go back to senator to respond. When you start from nothing, 2000 is not all that hard. What we are offering is the most important, most watched program. We appreciate the opportunity to negotiate. That is not reflected, what they paid for our content is way below what they pay for much less watched other content they pay for. I would like to speak and i dont mean to filibuster there has to be a way in this expanding telecommunications to pay for localism and investigative journalism. We are one of the last ones standing. We have two Revenue Streams. Advertising model, which is being cannibalized by the big tech companies. We dont want to be like the newspapers. That is where we are heading. We cant negotiate the value of our content. My district change over the years because of the redistricting. When i first came here and much of the areas, theres a local tv station there and quincy, i was on the levee when the levees broke. So i get torn. I believe in the need of local broadcasters and programming. I fear consolidation purchasing power where we loose the stories of local haiku High School Teens and activity and stuff. So we want to, as much as we can, keep that localism and sometimes consolidation helps because it does provide more dollars to coverage. Theres consolidation in that part of the state and you get Better Weather coverage because of the competition. Let me turn to this, the Current System is challenging for you in negotiations currently, right . So you are caught between a rock and a hard place. Out ask you, if its a keep it or not keep it, maybe there is a middle ground of where you think the small providers are adequately listened to versus, if its just a binary choice, i dont see how you are served by either. If i could discern a little bit youve got ten seconds. We did a survey in 2018 in my broadcast channel. All of my customers. 47 return on a survey on a postcard. 61 was cbs affiliates. 20 reverse that. Abc, 6 watched. I beg to differ its the most important programming. In my neck of the woods, if your horse dies, you wait until its stiff. All of the things that are happening in every revision has instantly helped. They helped the process along for me and without anything to provide for that. I have no place. Time is expired. The chair recognizes you for five minutes. Thank you. Thank you for holding this hearing. Local broadcast television remains a valuable resource to receive information about the community including Severe Weather and natural disasters. This will only grow more important in time as Climate Change worsens. Severe weather becomes more frequent and dangerous. Broadcasters must be apple to continue to get timely information to the community to help keep them safe. Despite the Important Role played by television, especially in terms of danger, transmission remains a problem. The 2017 and 2018, approximately 213 disruptions of service and consumers nationwide effectively. In the 2019, six to do blackouts across the nation blackouts fluctuated annually, these numbers are compared to the 2010 with only eight blackouts, on acceptable. Senator smith. Thank you for being here. I will ask the same question in a moment but i would like to start with you. Like to believe blackouts are occurring despite existing good pay provisions, what would be the affect on consumers where these provisions expire . I think the observation, 99 of them are negotiated successfully without any interruption. We also point out that the people want to keep the tv set, they have to just let that in into the output, input and theyve got all the local television you can get. I dont know where they are in terms of them finding their market. I leave that to Business People that i represent and he represents. At the end of the day, we dont like them but we are always on and available if people want to use our antenna and we think its the important we have the ability to negotiate for the value of our content. We fully support local. Service is available to 99. 58 of satellite broadcast stations across the nation. Im the business person on the other side. I tell you that good faith rules rules, i can only predict rates will go up. Theres no other way to think, if you thank you take those away and the rates will stabilize, blackouts will go down, we are fooling ourselves. Thank you. Is beefing up the requirements a solution . I think beefing up the requirements would be an important component as well as interim carrots. We need to make it so blackouts are used as a tactic in negotiation to harms the other side and not bring them to the table. Pay more for me otherwise would. Would you defend that . While negotiations are ongoing between two parties, they havent decided to depart ways, the signal discontinues being carried under the terms of the previous agreement. Thank you. On the witnesses, i yield back. He yields back. The chair now recognizes you for five minutes. I think the chair. Its good to see you again. Welcome. From the city of texas, missouri city, how do you do it . Knowing firsthand, local broadcast disaster, you were all called to years ago to the very day, april 2017, almost my entire state was hit hard by hurricane harvey. 5 feet of water, it left for two days. Dramatic flooding. That in less than two days, in less than two days, dramatic flooding. People turned to local news to get weather information, road closures, where they should go, where there were recovery operations. Cbs 11, they had lets. The backup crews were kept on air, that was amazing. Abc, fox 26, also dont forget, too big ones online. This question, you detailed the history and our congress always agrees to that in the future. Mr. Walton, member of the head of our committee has said that an open question as to whether we should do that as well. We all know your colleagues very well. Its easy to kill a vampire in the program. My question is, if we decide that its a bad program that should be allowed to expire, how it affects tv during a time of crisis . Thank you for that question. Broadcasters have every incentive to be viewed on as many platforms as possible. We dont want disruptions. The other in good faith. Weve never been found to be otherwise. Your question perfectly points out how vital a lifeline my numbers are in times when my wonderful at t phone crashes and the only thing you can get is your local television or radio. So as you tinker with the economics around here, i would remind you of the importance of our lifeline and the revenues we have to support journalism and localism comes from two sources. Advertising, retransmission is where we go. Its very important that having the news about few members of congress and for your constituents is important. One, doppler later, we could see realtime out there as opposed to go to the weather channel, some other channel that would drift. It was very important for local tv stations. How about you . How important is local tv for disasters . If we let stellar expire . It would be a disaster to let it expire. I do not think it should expire. I think it would be bad for consumers to increase that. It relates to getting programming during disasters. As it pertains to weather. I think a lot of cases, people are used to watching the weather on this. I dont know many people who sit around waiting for weather. But more and more, you look at your weather app to see whats happening, when it will happen. Thats not the solution, we do have other programs available but in these cases, we would rather be up and down with our broadcast partners. That is not always the case. We have relationships with them because of the prices we see. Services go down during bad weather, but they also go down during times when broadcasters would be there. One. Im sorry about that but have to ask this. Michael, he sent a letter to leadership asking about making sure it expires. He talked about how bad it is, sent in the record. Without objection. Victoria is not a small town. Over 50,000 in the census of 2010. Out there west, its not a small town either. Population around 400,000 100,450, modified in 2014. Both these towns have issues with getting reception. Can you explain how they are responsible for them for not having access to local television. If he can do it in five seconds, i will let him answer, but we are 45 seconds over time. If i understand your question we want your constituents to have our product. Negotiate with satellite and cable providers and then hopefully they can put up an antenna. If all else fails, its free. Everything for free, if you dont want to pay a subscription. Time expired. The chair recognizes mr. Soto. Thank you. We are really worried about diversity programming and increasing local content and i worry about modernization of programming up across the nation. There are so many great local talents across this nation that really needs to have a voice, i also worry about Spanish Language and stations, every couple of years we seem to have a crisis about certain programs being blocked. I want to start with you, regarding basic requirements, if we were to put some in place as a condition of reauthorization, without be something you would be supportive of . I think we have to the everything to know what we are considering. Were certainly seeing big proponents of diversity. Record in providing television con is there. We think we disturbing more diverse programming than any other industry. If theres a poster child for somebody thats a good actor in a space, that would be best. Thank you. If they were to do that, how would that affect diversity programming . I think whats important about what we do, look at the percentage of the people wholly reliant on the air broadcasting, we are very anxious to keep our darren m. Keep our content appealing to all. Thats why we have networks that are specifically targeted to some of the hispanic community. How would it affect original content . What i have noticed is that one of my numbers is going to succeed, they succeed when they focus on local. When they do otherwise, they are less successful. They cant sell ads unless they focus on local. Thank you. You mentioned changing license John Bergmayer with your copyright. Explain in more detail the increased profits or payments to local providers, how that would work and what the incentive would be. The idea is that the people who are creating content to the distributors instead of through various layers like we have, then again, if you are a local broadcaster and you are coming from creating local programming, relevant to the community and people who live there, then you have every incentive to make that programming the best you can and make the most of it as you can. Then a system where local content is there but also a lot of the primary leverage from reselling national programming. Would this help local broadcasters and producers . I believe the overall would end up helping the production of local content and artists by basically streamlining a system. What about local sports . I think theres this notion that getting the government out of the way somehow, it automatically im looking at online video working today, i noticed cbs has cbs all access disturber and thats disturbing without local broadcasters. Youtube tv, directv now, a lot of them are missing the local broadcast content. I think if we want to promote localism, it will require a lot. An important step would be streamlining the regulatory system i dont think it can and there. I think we have seen a lot of the online providers are not providing local programming without that cost. Other than ozark and netflix, local content for that region. Diversity, absolutely. We offer everything that is available to us. What is some local programming that you provide . We have telemundo, they come from there. We do not see those. From the ozark mountain areas , is there any in your region . No. No local programming even being developed. What would help with that . Money. Money is always the bottom line. For me, the content these are prohibiting. Where i met, i cannot raise my rates. Those folks, they have a certain amount of dollars. I understand. I yield back. Thank you. I appreciate the panel being here. I represent a very rural district. The longest district in the east of the mississippi. This is one of the biggest one. We are here today to discuss the scholar act, which expires at the end of this year. Ive heard many different perspective as to whether he should be considered past were allowed to sunset. As we all know, the increase and technologies, the media marketplace has changed substantially. I appreciate all the perspectives that i have heard today. Let me go to some very basic questions. In your testimony, you explained that there are a number of people that still receive broadcast channels because of still are. I know many of my colleagues have asked you for specific rates of the markets for those subscribers that receive out of market channels because of still are. While this Committee Considers whether or not this legislation used to be reauthorized, abduction the helpful to understand what benefits the expiring provisions of still are providing. What the consequences would be. Would you be willing to work with my staff to supply us with the specifics of what subscribers receive . Which subscribers receive what channels and from where on directv . Yes. Ok. Well call on you for that. Senator smith, my district partially encompasses this market. I know only has one local podcast affiliate. Can you explain to me where satellite tv subscribers will receive their other broadcast channels from if congress does not reauthorize stellar . Will they still receive the stations . My local broadcast would be anxious to talk with them. They have a fair price to make sure constituents can get their signal. We have incentive to make sure people see what we produced. I know its hard for you to manage the food but my friends, the truth is, we all need each other. Everybody is trying to make a buck. Were not trying to put anybody out of business but we are trying to preserve localism. Thats a really good point. He threw me off my questions but you said Everybody Needs everybody. You are right, we do. It would seem to me common sense should prevail at some point. Other than congress having to mediate solve this problem, it seems to me the industry are to be about to come together and come up with Common Sense Solutions where everybody walks away of winter. Moving on, and his testimony, he spoke about how the number of impasses between local broadcast stations and cabling cable and satellite. As that resulted in some stations going off the air. What is your response to that . I think its a marketplace. At the end of the day, i want to remind you, we have an incentive to make sure more people view our stuff. We advertise all that and retransmission is a piece of that. A vital piece to keeping local television available to all these robert thun wonderful platforms represented here. You have anything to add . I agree, we both need each other. They are an important part of our business. Finding of the ground is what we are fighting over, i think. In any rational case, even we do start at a low place, i should remind everybody we were launched first. He didnt start at the baseline. We cant sustain these prices and hold that back from consumers. That is bad for all of us. Can i comment to that . I am coming to you. You stayed in that ring transmission deployment. What do you mean when you say that you revenue supports broadband . Video revenue, you all care about that. Every precious dollar we can put to work, even further into the woods, its setback increasingly. Rural and small operators like me, we are the ones after already. From the digital divide. We operate and we are already almost frontline for this broad line. Every dollar that goes through retransmission, 25000 a mile, 32500 for underground, if you can do it. Where we are at, we only have a certain amount. I would like to speak to mr. Smith. Time is up. I will have to yield back. As much they love spending time with all of you, we are going to be here for a long time if we keep going minutes over. I will let you arm wrestle her. [laughter] chair recognizes you for five minutes. I think the gentlemen, thank you to the witnesses and im sorry i have to back backandforth. This important one, its wonderful to see you. Longtime friend and someone who has served people in our country so well. Thank you pretty what are you going to say when chairman said we will be here all day . I will give you my time. I appreciate that so much. Let it be known right now on your records, we dont make a buck. What the big guys charge me, gets past to the consumer. The 12. 16 boycotts, does not pay. 100 ; passthrough, to my consumers. They know what they are paying for the channel. That being said, i dont know where the . 12 is coming from but i want that deal. We shall talk after the Committee Meeting convenes. I want that 12 since deal. I thank you are a witness. Had love to be there with you. I think i will have to go back there. I got your back. Youve argued for regulatory overhaul and i agree with you. Specifically, retransmission consent is in dire need of reform. I bought this for a long time. I understand what at t doesnt like the current regime. Tell us through your robert thun experience how it affects your customers. Is the same whether its a small operator and you are a giant and everyone in between, this is all passed to the consumer . I think it affects us similarly in that we are offering a video to our consumers. Predicated on our charge to program that. If those prices go up, our prices correspond we go up. That happened for years. What we hit is a wall. The fight we face, this is not a winwin money is going up and their revenues are going up, this is margin shrinking. Certain businesses, especially rural Cable Operators are going out of business because they cant afford the program cost. This goes straight to consumer. Thats where we need them. The larger guys dont go out to where they are. Let me ask the obvious question, maybe its already been asked. Every five years, this comes up and now we are reauthorizing and it seems to me that there is a pattern here. That is the year or here before we authorization comes up, the numbers dip a little and then afterward, it is jacked up all over again. I cant imagine this is come double for your. There broader sense of broadcasters, have protesters thought over another kind of model . This is not sustainable. Its not defensible. It keeps going up, up, up. Blackouts, increase, people are picked off. I dont know anyone in the country who has gotten a refund when there is a blackout. Are you thinking of Something Else . Are you just going to hold onto this . I would share with you, authorizations are not my favorite. This is one of two ways in which we support localism. You can get for free. Im the only one up your that offers everything we do for free. If they wanted that way. Your time is expired. The chair recognizes you for five minutes. I guess i follow with my colleague. And dear friend. The signal, you are seeing People Choose the option. That means you dont get any retransmission consent dollars. The loss dont work for todays marketplace. If you could go one place have a broader experience, then the other place in the 1992 cable act, you see consumers walk. What ive been suggesting is, when it comes up, look at it in a negative way. That is an opportunity for us to look at the video marketplace. The loss dont work for todays world could then maybe we can also help solve the problem of what youre getting less retransmission dollars because people are cutting support. Theyre walking away from the entire system. Maybe you want to let expire. I do think we shouldnt just look at stella, we should look at the whole thing. They were a perfect law in 1992. Lets say they did in 1992. Does anybody want to come up and suggest that when they wrote that law, they took into account how the world today . How people get their video content today. Of course not. You can talk to the people who wrote the law. The people who were there, they recognize that the world is different today. Why hasnt the law been updated . What i would suggest is, as we talk about retransmission consent or any other, you ought to be paid for your content. They want to help keep the local content. The problem is, he talked about this earlier, more and more, you see the National Networks take a bigger chunk of the retransmission consent. Your local stations on getting that money. That is the deal for the respective author, the reason why you have to make it available for free, people can buy a 30 dish and get that signal off of the local stations that if a went through their local cable company. All i would ask, are like everyone to a common, if you look at stella regardless where you are, being renewed, do you think the current laws, especially the foundational table act needs to be updated to reflect where we live today . Absolutely and i would love to be part of that. Weve had conversations, might not all be in the same place but we want to get to a similar place to a better place. They want robert thun to be part of updating and modernizing the world we live in. We commend your efforts. They are clearly outdated, they are broken. I really appreciate your noting the relationship between my Network Members and my affiliate members. They need each other. They need Sports Program and weekly shows. They have high ratings and the networks need the locals to provide the tornado alert. Lifeline. This dont sell yourself short. I want my local broadcasting weather. Lsu i watch the saints and tiger updates i will not get , that from iowa. I want to get it for my local station. Would you be open to working with us on a table act that would work on some of these problems . Were always open to new ways to do it but what i want to emphasize is that the earlier act created a system, a benefit and blessing to the american people. Twelve seconds left. My concern is that somehow a reform would just focus on that and forget the locals. Talking about blackouts for that reason. Dont sell yourself short. People want that content. I thank you need a lot of policy measures, increase , itsity to Program Important to rethink the cable act. Thank you. Appreciate it. Thank you. The chair recognizes you for five minutes. Thank you. All of my colleagues here and i completely agree, local broadcasters provide great coverage of local events, weather disasters, as well as, you talked about elected officials accountable for their actions because they are in the community. Thats an Important Role. Something else weve seen in the market, were seeing this around the country, we are seeing Venture Capital private equity start to buy up some of the media outlets. In the print industry, weve seen it in other places. I want to start with you. How do you think the incentives for private equity, but this other incentive im talking about local tv provides, covered of weather, indepth coverage of about local tv provides, covered of weather, indepth coverage of politics and other issues. How do you think the motive and the need to step up and invest in the local news and how will that work in the long run . I agree. Its particularly noticeable in media when you have these investors to take over companies a shortterm perspective. Shortterm from these businesses businesses, just walking away and forgetting that particularly with media and newspapers, local broadcasters, its a longterm commitment. How to those goals and challenges lineup as we look at reauthorization of stellar . I think stella offers an opportunity to look at a wide range of different media and Video Industry policies, including you ownership rules. I think something, the shortterm investor kind of thing, that relates to the Broader Media ownership. Do you have anything to add . I would reemphasize those who want to invest in broadcasting, if you invest and do not focus on vocal, you will not make money. People are going to change the channel. My members were successful are the ones who keep a focus. Thats assuming there is that competition. If theres no channel to change it to, thats where you run into that trouble. The kind of up the competition. We got some of our members doing it. It goes directly to the internet. Theres lots of way to get our product and we want people to see it. Where others try to sell our product to their advantage, we are in retail consent. I do want to talk a bit about consolidation issue. He said that some ownership are robert thun using loopholes to get around the rules prohibiting them from calling more than one station. Can you talk briefly about that . Im not sure the ownership changes the emphasis on localism tween the broadcast stations. What im discussing is in the negotiation, we go into renewal in a particular deal if they own more stations in a particular market. It makes it more challenging. They hold onto their positions and economics and they are extremely stubborn. I want to close this, and ask you, what does media consolidation do tumors . It removes the local programming because if they turn the signal off, they couldnt reach an agreement. I would tell you that the broadcasters themselves, big affiliates and local broadcasters, theyve got your competition. They are competing with your sessions. I will tell you that if you listen to that here, my friend here was a broadcaster. He started advertising and he has me. He is utilizing the captured marketplace. They send signals down to his eyeballs to see. His Revenue Streams today are advertising. The only people are the ones who can. The ones who cant, those who dont have a credit card, you dont get this. Have to have me. They are utilizing me for revenue. Time is expired. Good lord. Where are we at . The chair recognizes mr. Long. Thank you. I want to remind you the irs does monitor these hearings. [laughter] talking about eggs for payment. I report all my income. [laughter] you might not want to go there. 1974, George Foreman fought muhammad ali. He came up with a strategy. Our younger George Foreman. He would cover up and back into the ropes. Its kind of like what i felt like when i did this in the last few weeks with the broadcasters. People coming into my office, everybody was to pull on us if we got how this welcome out in this thing is going to come out in end. You referenced a local broadcast station, where is one . What is the local broadcast station . Any broadcaster, in a geographic region. Local to that region. I think if youre in that region, and that your station, the problem is when theres, when youre short a market, then you need some kind of station is not going to be local to your particular market. Nevertheless, that station is thought of as a local station. So you said local affiliates, 147 miles away, is that a local station . The definition of local might be stretched a little bit in rural billy long areas. But its certainly closer than a station in l. A. Or new york. When i go home on the weekends, two or three days a week, i sit down to watch local news with my wife and i will say who is that . Who is that . All of the reporters, when i was growing up, you have the same reporter and sports people your whole life. Now every time you go home, they have a young kid out of college because the two they can afford to buy. It is constantly shifting. Senator smith, you talk about locals, walk me through that. Whats that look like . Where there is a demographic area served by a station, the people within that area get that signal. If theres not, if you have if you are miss boyars 147 , miles away, i thought you were saying there was a way to bring local broadcast into that. There are translators who help signals to rural areas. In the valleys, all over this country, if they dont want to have a subscription, i dont know, the ozarks whether they are sufficient. To get it for free. We offer for free i was a little confused on bringing local into local, like i said, go home to a town of 167 some people. Abc, cbs, nbc but two of them, weve fought this battle before, they cant in together. They tried to keep their newspeople separate. Theres not our real way to bring a local station that would. E functioning i think what you are speaking to is the expense of running a newsroom. Someone that does not have a doal station, what do you during the recent tornado in your area . Whenever you watch the weather, its the same on the cbs station as it is on fox. The same news team again. The only time you hear, when the radar gets way off. They call themselves tristate area. The billy long local news one quick last question, you came by my office the other day, you mentioned 47 , tell me, 40 47 more than your competitors . Report based on the fcc they put together last year. Is it because thats what im offered in my negotiations. 47 more. Time is expired. The chair recognizes mr. Flores. Thank you. I appreciate the hearing this morning. I have a quick question i would like you to answer for me. At t directed to commitments to serve all local channels. None of those commitments have that been there. I would like to for you to respond to what has been done. If you put the market where you convert the signals and what the plans will be to remove the down conversion features. To talko continue on introduced andct that is what should be framework look like for video moving reemergence ofe the options we have today and then there are things that are going to totally transform this business space. I would like some ideas from you as to what the statutory framework would look like not relying on the 1992 at. Framework looks like . I give each of you about 45 seconds. I believe you should start with copyright and fundamental negotiations and build from there. Right now, we have a system where you have a compulsory license and then negotiated in the marketplace. I think this adds too much complication. You start with copyright and i think for addressing the market. Thats how it works everywhere else. Thank you. For us it would be choice, choice for the consumer, choice for us as a provider. In todays framework we are mandated by federal law to provide those stations first and foremost. If subscribers dont want to watch them, they shouldnt have to pay for them. Choices part of that. And just absolutely more choice, let the marketplace set the demands. And alle open to any ideas. Retransmission consent brought us here today, the measures around that, i am not sure, but it starts on working from the 1992 act from scratch and seeing if there are laws that can create marketplace conditions that are not punitive to consumers. Representative i dont want to start with the 1992 act. I want to start with a blank slate. A blank piece of paper. The marketplace has totally changed. If the president was on, you were screwed. You didnt get to watch anything else. You have to watch the president on all three channels. Have twolly, you options. You could have the government manage prices and these negotiations, which i would strongly oppose. Im opposed. Or you could allow the retransmission consent process to go on, which is always kind of a food fight, when people are trying to freely bargain for the value of content. My view is, the dollar should follow the eyeballs. We got the eyeballs. Retransmission consent is part of it, but it is thinking too small. New technology is going to come in and wire around retransmission consent. We need to figure out what the statutory infrastructure looks like so that we create the video marketplace of the future that puts consumers first. Mr. Chairman, i yield back. Chair the gentleman yields back. The chair recognizes mr. Cardin denas for five minutes. Cardenas tive earlier today, there was testimony that no broadcaster has been fired for violating goodfaith rules. There was an investigation and a settlement of 9. 5 million with sinclair. I wanted to state that for the record. Consumers watch video is changing. But for a lot of folks, they still receive local news, weather, emergency news and local entertainment over air and by way of cable and satellite. This is a complicated issue for those in the video market, so i am glad to see so many stakeholders at the table, so we can get this right. We need to remember the bottom line, that consumers have access to local, diverse programming. That is important to millions of americans. To senatorestion is mr. Smith, ceo of nab. Latinos send amenities of color depend on free, local broadcasts for local news. Rate ofdiscuss the viewership amongst communities of color . Yes, and it is one of the proudest thing we have to offer as free, local broadcasters, that those who exclusively rely on us tend to be minority communities and the economically disadvantaged. We are proud of univision, telemundo, members of our association. We are doing everything we can to make sure there is content available to them free, over the air, and those communities disproportionately rely on us. Ardenas ive representative cardenas n a space where we see more and more consolidation, we need to make sure local networks can continue to operate and that there is room for new entrants in the marketplace. We have heard the recant the retransmission consent process can cut into programming budgets that would other buys that would otherwise be used to showcase content with unique voices. Is that accurate . Absolutely. We only have a certain bucket of money for programming. Retransmission consent fees take away funds to provide compelling, independent programming. We are on the same side of this issue with independent programmers. Are financially strapped. We have the same, too much month at the end of the money. We want to do everything we can to get those folks on our station but we only have so many dollars. Representative cardenas some of the small players in the field go around with a little tin cup. Hopefully they will get something to rattle around in there. That concerns me, because the smaller the player, the more likely they are not going to be willto play, that they go away. One of the saddest things we could see in americas to see someone who is passionate and heartfelt to do that as a career and realize that there is no room on the Playing Field for them because it just doesnt pencil. They cant eat and do the beautiful, wonderful content that they are capable of producing. But if you cant eat, you do Something Else. That is a big concern of mine. Sir, same question. An excellent track record carrying independent channels, hitting diverse audience. We have an unassailable record as far as i know we have an unassailable record. As far as i know, we distribute more diverse content than any distributor in the marketplace. We have a National Platform so we can touch people across the country in those different pockets, and we try to do so with providing a robust experience for them to touch different pieces of content that are not from the same voices. Cardenas do you have anything to add . The Market Structure benefits the major programmers primarily. It doesnt particularly harm the very largest, comcast, charter. You have these large buyers fighting each other all the time in the interest of smaller programmings and and the interests of smaller programmers get forgotten. Ardenas so some tweaks might be welcome . I would favor fundamental changes to the system, but i am open to tweaks in the current framework as well as addressing consolidation issues, which dont help. The chair recognizes mr. Wahlberg. Representative wahlberg. This is one of the most interesting panels i have been i have to tell you, i agree with all of you. I want you all to be satisfied. Is that ok, mr. Chairman . Im not sure if that will happen. But i have learned some great, new words i can use up my town halls. I appreciate that. One of the counties in my district, my home county in michigan, is an orphan county. It is in the toledo market. And as broad as the local content may be, i am sure my constituents would prefer to be watching the michiganohio state game from a local michigan affiliate. They are going to lose anyway. Walberg we have such comedy on the committee. [laughter] localism would be especially appreciated during the football season. Can you help me understand why local, cant just import out of market signals to serve subscribers in my county, for instance, or what would it take to ensure subscribers in land to receivelenoway local content . In every instance a local station has come to us, we have complied except in cases where it was technically not feasible. In certain cases our beams dont cover so technically, we wouldnt be able to deliver it. But your particular example, im not exactly well attuned to what that area is or what has been spoken to us, but we are absolutely receptive to looking at that. And if a broadcaster comes to us for distribution there, to provide a michigan point of view instead of the ohio point of view, nothing against the buckeyes or nothing representative you started out well. [laughter] but we are happy. We are supportive of that. Note that in the last bill reauthorization there was Authority Given to the fcc to deal with orphan county issues. We supported that. We worked with them. We hope that your county, if they are orphaned, will work through that process. We have addressed a number of these issues for a number of orphan counties. Can you walk me through how the distant signal compulsory copyright works versus the retransmission consent process . Mr. Smith what it means is, for example, Mitch Mcconnells Bowling Green area for some reason, that is not served with the local stations that are there. I distant signal is brought in from new york city. There are 12 markets like that, ones that at t directv has not provided local the way outlined and still are. And im sure they would work with us and i think local stations there would be anxious to find a price that they can deliver local into local. but as long as stellar remains, they have an easy out . Could i assume that sounds like Something Like a subsidy if they could negotiate directly . It is a subsidy. If you add up market capitalization of every broadcaster in america, it would not equal the market capitalization of at t. The question becomes, do they need a subsidy . As i testified earlier, we do serve those communities. We do have a solution of what is over that antenna. Part of it is incumbent on the broadcaster to provide a signal that is Strong Enough so that other folks can receive it. They dont have an incentive to provide a signal, and when we come in, we dont get paid for delivering them beyond the footprint they are able to do, rates from us that are very handsome and continue to go out of control. The 12 markets that we dont serve, 11 are either doowop police, double doowop lease or lies. P police or triopo and every time we try to go into those markets, the price is somehow higher. Chair the chair recognizes mr. Butterfield. Butterfield let me thank the witnesses for your testimony. Thank you for your patience. Let me make an observation. My district is very rural. The firstituents in district of North Carolina rely on satellite to receive local news, to receive content that matters to their families. How would allowing the relevant provisions of stella expire promote access local programming in Rural Communities . If mr. Walden were still here, i would share with a menu a similar thing. I have a place in the Blue Mountains of oregon. I am a directv customer, and we get los angeles news there. Continues,stellar that will continue. And i think if it goes away, im sure mr. Thun and i could work out a deal and fix these 12 markets, but that is left to people at a higher pay grade, and our companies can hopefully get that done unless there is an out that allows them to bring in a distant signal. Representative my staff tells me whether that you question whether goodfaith negotiations required by congress are necessary for fruitful negotiations. Without goodfaith rules, what would change from the consumer perspective . Of retransmission consent process now is that both sides are incentivized to come to a deal. We want them to have our product. We appreciate the resources it brings to us that helps support local journalism, and they want more eyeballs too. So we have a community of interest. My read of the statute and the sec rule is that good faith applies to both sides. Negotiations have to happen in good faith without clarifying what that means doesnt really get you that far. That is why we advocated that, we put some teeth behind it so that you find that certain negotiation tactics that henan tactics that tend to harm consumers and driveup bills the considered bad faith. Butterfield how does the distant signal license provided by the current Regulatory Framework benefit rural consumers . In a lot of areas, rural areas, viewers cant get an over the air signal. We can provide Network Programming, not local, but Network Programming so that they can see the content they enjoy. Butterfield wood expiration of that effect local programming . I dont know if it would do anything for local programming, but for those customers who cant get local programming because they get it through distant signal, that would sunset. Im not what im not sure what process would take place for them to get that local content. Butterfield how would increasing local program fees affect your efforts to deploy broadband in underserved areas . If we have multiple Revenue Streams, one of them being video, and if that revenue stream is shrinking, that affords us less money to invest in other areas of the business, one being broadband. Financial principle would dictate that if you are making less money in your business, you have less money to spend in other areas. Howesentative butterfield would this affect your universe . The sunset . It would affect us dramatically. Talking about this no good faith complaint as a way of saying you dont need good faith rules. Rules arent made for breaking. So i think it is a testament that we all come to the table together under the guise of these mandated, goodfaith rules, and to be able to allow other folks to come in under the guise of the goodfaith rules on our behalf would help us to have lower rates, possibly, so we could have more money to deploy. But the goodfaith rules are an important hanger for us. Chair the chair recognizes mr. Thete representative chair recognizes mr. Gianforte. Forte inative giant montana they really rely on local stations for news and weather. Some stations in our state, including the state capital, does not receive their local station through directv. What local news can directv subscribers get in our capital . New york or los angeles. People in helena care about community events, local weather, the wildfire season, not standstill traffic on interstate five or the subway breakdown in new york city. As more consumers look to cut the cord, providing viewers with their local broadcast stations would be an effective way to keep consumers. As we look at the tv marketplace, we should consider how to lower the costs to consumers and increase competition while making sure neglected markets like helena are covered. I would like to focus on getting prices down for consumers. And hears stories from constituents that paytv bills are on the rise. Ms. Boyers, i appreciate your testimony today. How can we get consumers relief on the prices . We are being pushed into a vacuum, as a passive retransmitter of broadcast signal. We are there eyeballs and then a lot of areas thats the only eyeballs they have because they cant do antenna and they dont offer it on broadcast. We are being penalized for being small and being world and we are subsidizing the lack of revenuegenerating in their Business Model. Now if they can come up with a different Business Model and lower my rights, i pass that onto my customer. We dont make a buck on retransmission consent. Andesentative gianforte you testified 75 of your pn al arepenses p and related to local programming. An have mentioned you have antenna option. The challenge in montana is mountains. The broadcast doesnt work. Why can you not provide local stations to our state capital . I think we can. Just to be clear, we dont bring distant signals to the heart of helena, it is going to the outskirts where white areas are. Our solution is the over the air and antenna the over the air antenna integrated into our signal box. Anforte those gi over the air antennas dont work in the mounds. Why cant those citizens get access to local news . What is the impediment today . In certain cases the broadcaster signal cant get into those areas. There are probably areas within your representative gianforte what is preventing it from going over your network . These networks are rife with dual diopter lease with doowop police and with doowouopolies. We see what prices are extracted in the retransmission regime. There is no technological impediment any longer to at t being able to provide this. There is plenty of competition. You have to support local stations there in montana. We do that. If people in helena want our stuff directly, that is supported by advertising revenues, they just put up the digital antenna. But the way you make sure at t does not provide it over their system is to renew stellar. Gianforte ive clearly we have different opinions. I look forward to working with you to figure this out so our constituents are better served at prices they can afford. Thank you. Brooks itive apologize. I have been running between different earrings. What is clear to me is that there is not a lot of agreement from the panel. To start out by ,sking, could you please share could you explain how retransmission prices are decided . That seems to be the sticking point, or one of the sticking points. Can you talk about how prices get decided . Negotiate them. If mr. Thun and i did, im sure we could come up with a deal. Their Business People and our Business People, my numbers, sit down and negotiate. And i would just make the point that they pay for their own content far more than they pay for hours, which is much higher watched. So our members try to get the dollars reflected by the eyeballs that we bring to their system and hours. Whyesentative is that prices may vary based on the size of the mvd . Of course. Representative any disagreement with anyone else on that answer . Im trying to see if there is ent on i have sympathy for ms. Boyer. Im from a rural part of oregon and know what it is like to be left out. But the economics going into those places make it very difficult. I agree. It costs us more to pick up that signal once it comes from their transmitter to my receiver, and then it comes to my head and, and that is where i incur the respins, to get an aerial underground to that customer. What they are charging me for is what gets to my head in, and then i turned around and passively transmit it for them. So for me to get that signal a cost no more than two transmit right there myself. However, i am paying 47 more. I dont understand. I was interested in that answer that you just asked. I have no idea, other than the fact that we have no Bargaining Power when we sit down. It is take it or leave it. ,brooks what are in those goodfaith discussions, what are the factors as we have to explore how to go forward with this incredible, changing landscape . I dont know because i am not in there. I can imagine that comparables for other programs are evaluated, viewership and ratings come into bear on what a broadcaster would ask, but i am just assuming that. Ive never been involved in those negotiations. Representative brooks i have a as wen about blackouts, have heard from various communities and what happened, particularly as it relates to Public Safety. More about Public Safety issues that are created when we go into blackouts . What is the longest blackout we kind of ruleswhat should we have around this issue of blackouts as it relates to Public Safety . I would like to finish with each of you talking about that. Blackouts happen to other aca members as well. Seven hundred we have 700 momandpop companies. Blackouts is an issue. It seems that although they say, even if there is a threat of a blackout, 99 of those contracts are made, miraculously. We have a member, liberty, and puerto rico, threatening of a blackout before the hurricane. Do you think the leverage of liberty saying, yes, i will pay your high prices, there were much more able to do that because they had a hurricane coming and wanted to be able to watch the radar. I find that compelling that all these additional blackouts seem to hover around times of negotiations around retransmission consent. My timetative brooks has expired but i would be interested in additional answers and written forms about blackouts and Public Safety. Chair the chair asks unanimous consent to enter documents into the record, a letter from the television alliance, a letter from consumer reports, a letter from the National Association of black owned broadcasters, a letter from representative golden, a letter from ride tv, a letter from rural group coalition, a statement from the Motion Picture association, a blog post from sports fans withoutn, and a letter objection. So ordered. Witnesses,hank the and miss boyer, you can testify for me anytime you want. Just ask and i will be here. Doyle you have 10 days to submit additional questions in writing to the witnesses that have appeared and i asked the witnesses to respond in writing promptly. The subcommittee is adjourned. [captions Copyright National cable satellite corp. 2019] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] goo coming up tonight on cspan, President Trump speaks at the American Veterans National Convention in louisville, kentucky. Then, the president s remarks to reporters that he as he departed the white house. After that, climatologists discuss Climate Change. Earlier today, President Trump spoke at the American Veterans National Convention in louisville, kentucky. He discussed investments his administration has made into modernizing the military and changes that the v. A. Regarding medical care. The president also signed an executive memorandum for giving th
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