Welcome. And we are delighted to have all of you with this today. The committee gathers to examine this state of the television and video marketplace. Im glad to convened this hearing with my colleague, se senator cantwell, hours established panel of witnesses and thank them for appearing. The honorable michael powell, president and ceo of an cta the internet and television association. The honorable gordon smith, president and ceo of the National Association of broadcasters and our former colleague. Mr. David kinney, ceo of nielsen. Mr. Craig aaron, president and ceo of free press. Americans are living in the golden age of television. Weve never had more choices and access to video content. When viewers tend to be home at a certain time to watch their favorite show, they are gone. Television experience is moving away from dependence on fixed schedules, programming links and the confines of the Family Living room. With the development of overthetop technology, digital programming and streaming services, consumers now control how, where and when they watch television and video content. The growing availability of highspeed Internet Access underlies the disruption of the traditional t. V. Industry. Internet conductivity has ignited an explosion of new video offerings on a variety of platforms and devices. Live scripted and on scripted video programming and User Generated Content is now readily available on computers, tablets, smartphones, gaming consoles and social media platforms. As a result americans are able to access and watch television anywhere they can get a sufficient connection online. Also Witnesses Today will discuss the impact of rising digital and online Video Services. On consumer viewing habits and preferences. As well as the effects of growing access to content. Internet access is also spurred changes in the ways video content is offered and packaged. It is led many to cut the cord for subscriptions to traditional paid t. V. Offerings. In exchange for online Video Services. I am akin to some of those that cut the cord. For example, viewers can now purchase skinny bundles or scaled down selections of paid t. V. Channels. That more closely aligned with their preferences. Content is also available on demand through subscriptionbased offerings that provide uninterrupted ad free viewing. As well as socalled premium models. Where the service is available free of charge with intermittent advertisements. The growth of these offerings is delivering a more personalized and less Expensive Television experience. This morning hearing is an opportunity to discuss how Television Programming and the delivery of video content has evolved over the past decade. Particularly within the broadcast and Cable Television industries. I would also like to ask witnesses to address how new entrants into the video marketplace are transforming Traditional Television Business Models. While increasing competition and consumer choice. As technology continues to advance and transform, the television industry, this hearing provides an opportunity to examine existing rules and policies governing the video marketplace. Many of the rules which are contained in the stellar act and the cable act of 1992, are intended to promote competition and access to content. This is especially important for rural l areas. Where many individuals live beyond the reach of a broadcast signal. These laws have also played a meaningful role in fostering localism and viewpoint diversity. But despite an increasingly competitive video marketplace, consumers sometimes face higher bills. For video content, programming blackouts and lack of access to the most relevant programming due to market restrictions. I would say they will no doubt adjust the views on existing laws and policies governing the video marketplace. Also hope that witnesses will discuss how congress should modernize these laws given the context of which options and services are available to the viewers. Television and video programming industries are important, sectors of the economy their Critical Communications they create jobs, distribute information, drive commercial activity and entertain through Quality Content and Services Television and video programs provide a voice to many perspectives that serve the interest of the viewing public every day. This bring their committees closer and empower citizens. I look forward to a thoughtful discussion today, truncated and abbreviated though it might be because of the voting schedule. We thank you all and will do the best we can to fit a lot into a short time and i now recognize turnage my dear friend from the state of washington. Thank you, mr. Chairman. R i too will try to be brief so we can hear from our witnesses and possibly get questions in before 11 00 votes today. Thank you for holding a hearing and thank you to the witnesses for their insight and the everchanging content market and delivery system. Obviously billions are being invested in new programming and new production and there are many more options for consumers enand an everexpanding world o content. Entertainment mis at our fingertips whenever we wanted. Including this hearing being seen i am sure by many people. So much of the content in so many places and we obviously love the notion that we can watch it when we need the content and content information. But how has this innovation in the television and video market impacted consumers . How are they better off and what are the challenges that we ctface in continuing to protect their interests . The committee must engage in i believe a robust debate about how we are going to foster true localism, diversity coand competition and fidelity to the Public Interest as we work on various issues when we move forward. Not so long ago, most of us watched t. V. For free over the air and the time i guess our eyeballs were rented to watch a lot of ads to pay for the content. And we understood what that meant and we understood with the Public Interest meant. But as we have changed into this larger picture, how has the heart of localism and diversity and true media competition been maintained . These are the issues that i think we will be pondering with as we look at issues of broadcast and cable industry and the changes that people are proposing. The fcc s desire to strictly basic rules that would ensure that companies play fairly in a marketplace or dismantling also preserve the diversity of content and media ownership particularly impacting i believe in a negative way, the number of voices that we need to have in media. And also, and impact of key issues, consumers such as local broadcasters. In fact a recent survey revealed 76 percent of Americans Trust their local news a great deal or fair amount more. I want to make sure that we are understanding how the Public Interest here is being served in this debate that sometimes can seem discussions about big business as opposed to the consumer and the content that they are after. The cable industry led the charge to limit the fcc strong Net Neutrality rules that help ensure that consumers are guaranteed by rule to have unfettered access to new online video content. Now the industry is asking the fcc to further eliminate its Public Interest obligations including those that could potentially force localities to change whether to keep Public Education and government access channels on the air. I hope all of these issues will be discussed this morning and again i think our witnesses for being here on this very important Public Policy debate. Thank you very much senator cantwell. We will receive in their entirety, the statements submitted by all four of our witnesses and will ask, at the end of the table for five minute summaries begin with mr. Powell. Your recognize peer. Thank you, sir. Good morning chairman, i am pleased to be here to discuss the state of todays marketplace today in one word is extraordinary. It is the latest installment of a multiepisode story on the evolution of television. It is a really good story and it is only getting better. As we know, and episode when it opens with the invention of broadcasting presenting moving images over the air with nothing short of magical. Government licensed the airways in exchange for vibroadcasters providing free service and serving the Public Interest. It was a medium that delivered one show to all viewers at the same time and t. V. Commercials with a heart of the business model. Today broadcast content is predominantly viewed unpaid t. V. Systems. An episode to television was transformed by cable. Which brought content directly to the home by wire and improving quality and reach. Cable created new forms of content including cnn, espn, hbo and countless other diverse varieties of niche programming. The number of networks has blown from 11 to over 900 today. Cable was partly financed and financed by a subscription model peer regulation was checking cables Committee Market position and protecting over the air broadcasting. Prescription now somewhat out of date in the face of a newly invigorated market. Multichannel video, attracted competitors from the satellite and Telco Industries as well. They won substantial market share now commanding over 42 percent of that market. Of the top six, only two today or Cable Companies. In the current episode that we are in the internet is upending the television universe. Creating a world of robust competition, continuous innovation and new consumer experiences. The key driving changes are worth highlighting. Deeper providers no longer need to own an infrastructure or license to offer video service. Lower barriers to entry new video providers have flooded into the video space. The largest providers today are streaming services that did not even exist in 2006. Video apps have allowed view on any device rendering the adage anytime anywhere clichc. The amount of video content is also stored from 182 original scripted shows in 2002 to a staggering 495 shows last year. Consumers now demand programming tailored to their preferences. The medical professional and User Generated Content, binge watch entire seasons and often repel from advertising. Providers must adapt to keep pace with the new generation of viewers. And t. V. Companies must compete with other internet distractions. From gaming to instagram. S nelson estimates for example, that 18 to 34yearolds spend 34 percent of their time using a smart phone and only 22 percent on television. A lot of the storm is hard to know how the corporate will be when the dust settles with the mega winner is certainly the consumer. The cable industry certainly felt the heat. Its dominance has receded, losing market share to traditional and facing the challenge of cord cutting. Competition for programming is fierce and rising costs have squeezed profitability. Despite these changes the industry is adapting, it is improving user experiences. Such efforts include voice role control, apps to watch her Cable Service on any device. And the ability to download o. Content on the go. The industry has also embraced streaming services both of their own and in ipartnership with others like netflix and youtube. Such innovations do not stop with video however. The industry continues to push forward withbroadband. Just recently upgraded to one gigabyte service reaching under three percent of the homes in our footprint. Looking forward industry has been announced a initiative to bring 10 gigs to customers and we will not rest until every Rural Community also has broadband. Economic market predicates on which video laws are based have withered. Since the 1992 act, the industry has substantially less share, less control over programming and faces stiffer competition. Rules premised on cables bottle neck control are just unfounded. Second, many of the video laws apply to some Industry Groups and not others and the Newer Services are completely unregulated. Trying to create greater parity. And finally we must preserve social value those protection of children trusted news and Information Sources and respect for the First Amendment is important and enduring prego im happy to take your questions for go. Mister powell your ability to summarize a multipage Statement Like that in five minutes is breathtaking. [laughter]. Can you do the same i dont know if anybody is as talented as michael but i will do my best. You are recognize them i thank yoube chairman and members of the distinguished committee my former colleague i am gordon smith present of the National Association of broadcasters i appreciate the opportunity to testify on how congress can ensure viewers are better able to access local news, sport news, sports, weather and emergency information by allowing existing provisions of the stellar to sunset it is not only necessary with considerable advances in the media marketplace but also any reauthorization to satellite viewers that are currentlyhe deniedoc access to television as a result of this law perkel broadcasters oppose the reauthorization similarly the Copyright Office with the license released a report on monday calling for the expiration. In todays competitive media landscape and with those entertainment programming and sports and Investigative Journalism and turning to local stations learning how to help neighbors in need look at the news acres give a unbiased view what is happening local broadcasting is crucial and is a critical electronic threat running through every community in america keeping them together informed and safe. The exceptions to the benefits by the local broadcast system are those communities that continue to be served by outofstate market stations as a result of stellar. In 1988 when the original satellite law was enacte enacted, viewers had two predominant choices, over the air broadcast television or a subscription cable packageof offered by a single local provider. That satellite legislation is predecessor which was hugely successful to better compete with the cableopol monopoly that no longer exist. But the thrust that it gave them was the ability with out of Network Programming without havingoc to negotiate but 30 years later the media market is virtually unrecognizable and dramatically different even compared to five years ago when it wasau reauthorized. Those companies that Congress Subsidized are now multibilliondollar companies that are behemoths in those come not only from those providers and cable brethren but also unregulated Tech Companies such as facebook and google and online providers like netflix and amazon most importantly no technological impediment exist today to prevent at t directv or dish from providing local broadcast channels to their subscribers across thehe country. They promised to do that dish has an directv has not but the stellar provisions incentivize those companies to a shrinking universe of eligible viewers because of the subsidy. To put in another terms directv subscribers in nebraska recently saw a news story about a new panhandling fine in new jersey. The local news they should have seen as a series of floods having aka devastating effect. Instead of election news viewers in montana, the state capital of hell and i were seeing santa clara board of supervisors instead of electionon coverage for culmination of seeing emergency coverage on a possible explosion in Grand Junction colorado they heard about californias new michelin star restaurant. This is a business decision at t and directv is making in 12 world markets. A choice that puts their profits ahead of service to their consumers and the safety of communities. Broadcasters and a viewers salute the senators that have highlighted the harm that must end. To end this consumer harm to modernize the video marketplace to allow stellar to expire as originally intended there is no technical reason this should be reauthorized and the time has come to stop subsidizing billiondollar Satellite Companies to provide with the most accurate news from local broadcasters. Thank you. Thank you very much mister smith. Thank you for having me chairman and members of the committee for having me today with a video marketplace to spur competition and encourage innovationn,ou to amplify divere voices and empower creators providing with local news and information that we need so often when we come together to talk about the state of media talk about industry versus broadcasting or cable old media versus new perkel and hope well talke more about the audience, viewers, bill payers and public. As congress has long recognized the companies that control the publicic airways, dig up city streets must have public responsibilities with the public needs from them is more competition, choices, divey and especially lower prices they should be the committees priorities that refreshes the laws with our Communication System the tv and video marketplace is evolving but the reality is american still spent far more time on traditional cable and broadcast tv than on social media or other apps. This powerful and profitable broadcasting industry come to washington touting their commitments to diversity while seeking to evade those promises, undercut competitor competitors, and consolidate at all cost. They want all the benefits of dominating local media but none of the obligations. It has been said what comes up must come down. That is true for everything except your cable bill it only goes in one direction. Up and up some more. Cable prices have risen three times faster than inflation for decades and it is still happening despite the advent of online video. Customers are spending a fortune for channels they dont want gouge by hidden fees locked into bloated bundles and contracts meanwhile broadcasters reach consent and political advertising revenue hasto skyrocketed to local levels but they are not reinvesting that money into local content or better journalism that is flowing into the pockets of executives and investors. Years of runaway consolidation have pushed local owners out of the broadcast market with insurmountable barrier shutting out diverse voices. When big broadcasters and Companies Fight over transmission with the disputes are blacked out before the big game theres nobody to root for on either side the winner may very but the losers are always the same, the public. It doesnt have to be this way congress should pass legislation allowing consumers to choose the channels they want to watch all the cart its time to and those hidden charges and require providers to show the actual total price people will pay when their advertisements and their bills to support viable alternatives we needie policies like Net Neutrality to push the isp to invest big open pipes rather than cooking ups schemes to crush competition. For broadcasters, we must put the t brakes on runaway media consolidation starting with restore local loners ownership revoking the discount and refusing to raise the ownership cap perkel we should lower the cap and divest to local owners too incentivize the license to women and people of color. Considerable their ideas like advertising to find noncommercial local news technology. What we do know based on decades of evidence a race to the bottom will not create a thriving marketplace that we need. We should put the power and choices and control back into the hands of the people in local communitiesitie to empower them to create. I look forward to answeringer your questions. Thank you. You are now recognized and i understand you really have to be out of here by 11 00 quick. 1115. You are recognized we are delighted to hear from you. Thank you Ranking Member as well as all members of the Senate Commerce committee for the opportunity to discuss the consumers. As the video landscape changes the role is critical our independent measurement and Analytic Services that our distributors make the decision so customers can look at the video they want in the manner that they want and from whom they wanted. Trust and transparency is the reason why nielsen ratings are the currency in which much business is conducted. Watching the audience make a particular program and at what time and at what locality to make certain programming available thee independence of nielsen matters and should be protected without an independent voice industry would be left robbing consumers of their voice and sidelining critical investment from advertisers. As congress develops legislationn and considers privacy nielsen feels there is a legitimatehe interest in the use of independent thirdparty Data Collection through measurement. This is an exciting time for consumers. The changes in just the last few years have been extraordinary. The entire ecosystem including my fellow panelists, ensures that consumers can receive the content that they want, when they want to and at a reasonable cost. Overall video consumption has increased substantially over the last decade. It does look as if it will flatten out. Today the average adultlt consumer watching daily over 2017 and 2018 taking into account all the new methods in which they can consume video content. That consumption of Live Television between 2017 and 2018 Live Television comprises 70 percent of all consumption. Three hours 44 minutes to be exact are spent watching per person daily on my television 39 minutes watching recorded programming from life tv. Nevertheless we see doubledigit growth via connected devices such as roku or Smart Television which is internet connected allowing viewers to control features from streaming content in a onestop fashion increasing at a rapid rate jumping 29. 8 percent through cute 32018 and 2017. Itvi isnt usage but on a personal computer between q3 2017 and 2018. Many relative entrants are investing substantial sums of new programming benefiting consumers. But interestingly eight of the top ten shows on netflix for example, come fromit Traditional Television content office, friends, and grays anatomy independently account for 2 percent of netflix total video viewership. When choosing what to watc watch, consumers sided existing and former broadcast shows as the biggest influence. Less than half of that cited a recommendation from the streaming services themselves. Lastly one ofre the hallmarks is to help video producers and distributors understand their audience we believe our Services Critical to ensure that all should be accounted for when producing investing and distributing video content and diversity is a monetary reality coming to consumption and the adoption of new technology in a changing media landscape. But diverse consumers are more tied to their phone moving away from Traditional Televisionon as the country becomes more and more culturally diverse these trendlines represent the future and then to be well advised to serve the population now. Thank you for allowing me to share the hard work my colleagues at neils and produce we are excited what the future brings making decisions from everything from video regulation to privacy. Had only to ask e but embrace independent measurement and analysis without it my colleagues would be unable to further invest in our ecosystem. Instead with that exciting innovation by consumers today and years to come. Thank you. Thank you very much. You mentioned nielsens measurement and capabilities to assess demographics and diversity on page number four of your testimony. The provisions in stellar help to ensure Rural Communities with ad one access to broadcast programming, what can you tell the committee how broadcasters are addressing the needs of americas Rural Communities quick. Nielsen is known for its measurement a video consumption across the country in 208 of the 210 markets we can measure. This allows us to serve thosee communities also with wireless coverage which is another way those communities are served. And i would say we continue to see with the fcc allowing those to utilize nielsen data to challenge decisions we have Wireless Companies they bring Video Television but also broadband capabilities to those areas we are proud to play a part of that work like his Rural America getting what it needs today . In most cases we do believe they continue to make sure those economics work. Mister smith and mister powell. Mister aaron went on at length about the increasing cost despite more choices available the cost of cable and Satellite Television is increasingct and according to streaminge cost of services are also rising. Why is this happening . And do you have anything to say in response. Chairman and the best thing we could do is to broadcast local television is to end a stellar. Are the cost increasing becauseof of stellar quick. Im the only one up here that offers every american that can receive a satellite signal to get it for free if they w want. We include everyone regardless of race, ethnicity, urban, rural, t is up there all the time. We dont have blackouts. Sometimes as we bargain for the value of our content, we obviously like to make sure the money follows the ratings. We have the best content available and people want to see it. Also at the highest rating on viewership. But things are changing now watching more and more on devices and unrelated to u us, there is a unregulated group of providers now with an acronym of setting growing exponentially while we are being controlled by statute. The single greatest driver of rising prices is rising cost of programming and support cost. Those have increased by double digits across the spectrum. These costs have transitioned from 500 million to ten yearsgo ago and that is all pushed through the platforms and you can see the evidence of that like on youtube over the lastee several weeks they have raised their prices grappling with the ever escalating cost of high Quality Programming in a production value it is rumored game of thrones cost 14 million per episode as long as there is appetite for that expense there will be a lot of pressures on the system. Thank you very much. To m go back to your question of the Rural Communities in your testimony you mention broadcasters at the satellite providers does not provide service at those markets is this something we need to address this is something the committee needs to look at one that has managed to serve all 210 markets. The other has not for reasons that are not clear to me although we could also support the reauthorization of the stellarhi bill. And then to be well served but i do think its worth looking closely at these markets to get some clearns answers from at t where they can do local but they can everywhere else. That they are providing the same content quick. Correct. One of the great drivers of Program Costs that every american has been receiving a broadcast signal gets it for free. We love satellite and cable but they can make money off of what we are providing from advertising to free for all americans. We do have that right to bargain for its value in viewership o. So we are in this together and its a marketplace at work. It works 99 percent of the time without a disruption. So as far as were concerned we are never in a blackout. If you just want to take that visual antenna. There are some instances with one provider not providing a local channel because they are t in dispute so they cannot get a cbs channel in my own community because of the ongoing dispute this is very frustrating. So pointing out free eyeball access why isnt that a good thing quick. There are a number of people served by satellite who cannot get there over the years signal and the experience of those consumers mattersch. Thats because of the changes we have made . Correct quick status but we push through. I raised objections to that because the money off of the action people are selling off 5g with loss of information because they are rushing to spectrum so with this problem we created by making that digital push. Senator cantwell , technology is proving whether 500,000 as we calculate or 870, overthetop offerings there is a technological solution with many other author offers that shows how this can be taken carell of. So i definitely agree consumers should be advocating to drive down price and if there are solutions out there that give consumers back to the old model i watch a lot of commercials in exchange for free content we should not be blocking that. We should not give the people new ways to capture that and repackage that when the old model deliver thatd content in a business context for free. So you had to Pay Attention to things you didnt want to. But we should keep our eye on driving down costs to consumers. But yes i will stop with that. So lets talk just a minute about those unserved markets like Kirkwood University one kirkwood admin missouri a tv station that covers me most of the time when i go there. What changes what impact can that Community Get its c local tv on cable are not . They are given a distant license so i dont know if your missourians are getting the new york news but they can get that for veryit little money means they dont bargain with the local station which means that is deprived of one of its Revenue Sources either transmission consent and that money is shared by networks and affiliates tort support localism and great Network Programmingor by the nfl. If you take that away which is done in the case of a missouri station like directv, that is made possible by stellar and it should no longer be possible. At t is a 200 billiondollar company o. Look at that market capitalization every affiliate in america, some of that will not equal at t they do not need the subsidy. I certainly agree with senator smith on the size of at t we need to Pay Attention to that consolidation i do think there are elements that our important to leave these in places where we cannot receive a broadcast signal so we want to make sure they still have access to all kinds of programming o. And that said what concerns me is losing these goodfaith b negotiations and what brings these parties to the table to make sure we arent experiencing those blackouts that senator cantwell was describing that they are taking care idha like signals on the air or other forms of arbitration that would encourage these folks to get the deals done and stop punishing the viewers if they cannot get along. Now the prevalence of the overthetop providers, how has that affected viewership generally . Or content quick. On the viewership standpoint it has largely leveledy out. So they are choosing those demographics over the top faster but as there are more choices consumers are finding ways to put that together in a way that makes sense at all is on the Advertising Market the way that is funded is through advertising but the ad model works as well. I wonder as i watch are they collecting information to advertise later . Te what are they doing . But i dont see commercials so i wonder about that so on that topic of overthetop do you want to add something to that quick. Yes the most obvious is many more distributors entering that space to the highest Quality Content. There is the war for the best writers and directors and producers to have theies best blockbusters seared series and thats why we have seen a skyrocketing amount of original series created in the value with those communities have gone way up. Thats why you even see youtube raising the cost of service because of a growing expansive content spanning between 12 and 15 billion annually to find out across all of the distributors you can see the impact on pricing. What is the impact on pricing . If you say netflix what is the first offering from what it was quick. Netflix raised prices in the last six months three or four dollars probably. I have to get the exact number. But for them that is a big percentage. Yes they are in the 1099 or 1299 price range they are moving up closer to 15. Thank you. Thank you mister chairman. Starting with mister powell, i think i heard you say the main reason prices are going up we pay providers more . Is that correct quick. That is the principal reason yes. Why else are prices going up quick. Given that the cost is increased at 35 percent per year those are the most massive drivers. Is profitability up quick. Not a video. Like broadband or the profit margin has declined over the last ten years. Do you reduce prices or is this just a fact of life they will outplace outpace inflation quick. With those experimental efforts to have new Business Models that can do that. For example, the mvps launched our skinny bundles a smaller collection of programming at dllower prices. Im worried to see many of them forced to raise prices. Do you disagree quick. I do. We have a huge competition problem for the first time some parts of the market are beginning to slow the rising prices a little bit. But the chairman is right expenses are tremendous. The big challenge onar the horizon that they are being subsidized to grab market share so by the time they are used as a justification for further consolidation, then theres only two players left and everybody raises, prices. This is our risk and we have to watch carefully and also like Net Neutrality had we make sure these overthetop Services Continue to reach their audience and build customer base. We need that the chairman will continue to provide because in order to get the services we all have to pay broadband. And with Net Neutrality that they rely on neutrality that they will behave like angels once dominant. La absolutely not and i encourage you to watch all of them carefully. Ou talk about Media Diversity and with those broadcast stations and those that are in the top 50 media markets is this a problem in your view quick. It thi is and one that we are working hard to fix. To have a very aggressive Education Foundation we have graduated from 20 classes with curriculum focusing on women and minorities to train them in broadcast ownership and management to become upwardly mobile. Im sorry what does that have to do with the idea without this foundation you cannot find qualified owners quick. It is helpful in view of the people doing the hiring. And to do that diversity within the united statesnt senate there is a pipeline problem but the chief of staff or staff directors and then to prove nonsense. And then i would just encourage you to go beyond the to bef a foundation qualified enough there are people qualified enough that if you have 7 Percent People of color ownership and 40 percent viewership it is a structural problem not solved from the foundation. When i was in the senate on this committee to sponsor the minority tax certificate and when dad existed for 17 years it went up tenfold. That was 1995. And to strongly recommend to the committee. It is not a lack of well. Thank you for being here. It is very clear that this needs to expire. But that specificity so can we go down and then to be reauthorized with that debate of the satellite industry. With those enforceable obligations it is already a difficult and contentious negotiation to continue the fccs supervision and this continues to be important. I agree they should be reauthorized with the bill. This goodfaith negotiating is very important. And the vehicle provides an important opportunity to check in on the state of the industry. And as things are working as they are supposed to. We do care we have independent measurements with those negotiations between the a parties to make this ensures a good faith negotiation. The rebuttal is we have every incentive to be at the negotiating table we are anxious to make a deal for the value of that content. That is a wholly separate issue that should not be tethered. And that should be tied to Rural Communities. And that the sec and that to know about this but could you flesh that out a little bit to have any impact on future innovation in the future . If the water was muddied quick. And what stellar includes that provision with a legally enforceable obligation and then with those retransmission consent and then to have a venue to take that complaint and that incentivizes. So if that backdrop did not exist and if there was a charge of not acting inwa good faith with the sec still continue to be the arbiter . And then this would be an obvious ability with a third party to overseeir that questio. And as a matter ofat historic record with that provision is the length of time. There is never a finding of bad faith on the part of broadcasters. S. So now i will switch topics streaming on your device and cutting the cord, you can stream no podcasting. But you can watch it on my device so is that compensated for that . That is part of the money stream. Am there is a coalition of broadcasters that produce the app to provide content so that you can get it stream to use. Or off of your own website. Correct. We are anxious so we are on every device we can get on as well as satellite as well as overthetop that is a disproportionate number of people in the community this is to have those broadcast and get it for free. That part of what you are measuring. Wet can. We invest in those technologies it is important to be measured independently in the same h way so theres nothing between that measurement and then get back to the right broadcaster. Thank you. Thank you mister chairman. Consumers have been surprised each month to find cable, phone, internet bills are much higher than the advertised price that is why i introduce the true fee act legislation putting an end to these appetizing practices that is confusing about trueve cost. The true fees act in requires providers to include all charges in the prices they advertise for their services. Number two, allows customers to end a contract without early termination fees instead of increasing the fees under the contract, and provide clear and timely notice for price changes to consumers with easily readable high profile message to the consumer. Do t believe consumers should have these rights . To support the true fees act quick. We do in this is aney incredibly important piece of legislation because it would give consumers the ability to see what they pay for percolation not be surprised at the end of thehe month, they should be given information what they pay for each and every channel especially the below the line fees if you respond to an advertisement or they sell you on the phone when you try to upgrade come you get the bill and it cost significantly more it is a problem and should not be allowed. You commit to working with me as they are transparent with these practices work. I will say the concerns do have they are regulated by a labyrinth of state and federal regulators we are concerned about wearing that complexity with those rules we think they are adequate. People just dont have time to go through each one of these details but what should be upfront and there it is your price is going up and out a contract you cannot get out of. We support your legislation. Thank you. Anybody else want to interrupt me with that . [laughter]r]. The people of massachusetts rely on local broadcast television every day how we follow through with the red sox and sea informed about her State Government unfortunately residents of Berkshire County to local access broadcast television because the Cable Provider dropped the springfield and dc station and the boston abc station from its channel lineup. Because that is technically part of the albany new york area in western massachusetts can only ag access stations that focus on the yankees or the giants. [laughter] and Governor Cuomo is good as he is, although not our governor thats why introduce legislation to enforce thehe berkshire Cable Provider charter to engage in good faith negotiations to bring those stations back on the air in Berkshire County. So you commit to working with me in his committee to address this and other orphan county problems across the country which areen residents receive local broadcasting relevant to their lives quick. Yes. The cable industry is always trying to help these orphan county situations. First and foremost, is a problem of market definitionai o with the fcc and then dealing with the rights for what rights local broadcasters have that they are forced to live with. The springfield system and the syndicated program at the local news and weather so senator smith, same question. We support your legislation. Thank you i appreciate that. One finalt ur question. In the era of media globalization and consolidation Public Education and television for cable access tv is critical information about their communities or platforms but the fcc has proposed a rule change to allow Cable Companies to shirk their obligations to the communities where they operate. Under current law towns and cities are permitted as part of cable franchise r agreements that they set aside channels that the current proposal would allow Cable Operators to assign a value to these channels and subtract that amount it places on any other and kind of fees so this would threaten the pay channels across the country so why is it critical the fcc not imperil Community Television by moving forward with this proposal . I have a letter with 15 members of the senate calling for this rulemaking not to proceed. We will include that in the record. I believe the fcc is going against the wishes of congress it is clear that the channel should be provided in the fees are separate they are trying to squeeze these outlets in so many communities Public Access is probably the vast last vestige of local content these are institutions providing training and technical trainingut giving people their first opportunity to be part of the industry these are vital institutions and should be protected and not be pitted against the local government by Companies Making a lot of money. Can we insert this for the record quick. You are next. Thank you mister chairman. I want to go into the orphan countys a little bit but ill go over to mister kenny. In northwest montana the one montana we have an issue without a spokane so its not about watching the red sox or the yankees we have a fire a forest firest burning they have to get it local otherwise human lives are at risk. Is there anything nielsen can do quick. Nielsen measures what people watch and then there is a process. But they dont have access to local channels they cannot watch it. So it can be h measured. Thats a decision that needs to be measured by the fcc where they want to make thatde allocation. We dont tell the fcc what to decide. Write them a letter . Or is that an act of congress we dont do anything so they dont have to door anything quick. I thank you have to write them a letter. You can make a local appeal to change the allocation that they are the body that decides. I would point out the fcc has a market modification process that is very supportive of that and has use that to resolve some of these very kinds of orphan situations i would just command that to your attention and use and we will help you with that. I appreciate that very much. This is tough to be honest. We ought to figure it out. There are new players in the video marketplace before they used to get highlights of the High School Football team from netflix and as you know, we rely on local broadcast for news or information what is going on both local b, state and national and political for the safety of our communities. What can this committee do to ensureco local news continues to play the role it has traditionally played quick. Candidly the most obvious of most immediate is to let stellar sunset. Because then hdtv is in a position they have to deal with the local stations for local content instead of providing into markets in montana combining with los angeles. What are your thoughts on consolidation among the entire video landscape quick. I would simply note because broadcasting was the first we are the most highly regulated but all of these on facebook amazon netflix and google that they are cannibalizing the market that sells chevys in bozeman and localism matters. I think they should be held to the standards we are held to because they are growing like separate nations. And we are trying to fight to stay alive for our members. I just think as many senators started to draw attention to this issue, i salute them for that. I appreciate those comments and hopefully the chairman of this committee will agree with your perspective because i do think to level the Playing Field is important. Thank you veryhe much. Thank you to each of the witnesses for being here. You are an insightful group with information to share. Starting with you, to understand from your comments is it fair to say the current Video Entertainment marketplace from laws passed in 1992 quick. That was a good time. I remember it well. It was a different era. We didnt have the internet. Ordinary people do not have the ability to access anything close toac that. If you wanted to watch a movie not airing on cable or broadcast televisionot or if you are lucky enough to have Satellite Television system , then you would go to blockbuster may be looking for adventures in babysitting that was rentedd out you would have to watch iron eagle for nobody knows what that was they watch anyway pretending to like it. [laughter] does that technological world reflect how they consume video today quick. Know it doesnt. We have a chart that shows the law is only as good as the technical and economic market predicates upon which it is felt that an armsll premise from the cable industry of 98 percent of all video viewing market that you said it was a good time it was a good time for the cable industry but that share has gone down all the way down to 56 percent today owning more content that was aired on the Networks Today now in single digits. There is an enormous transformation that innovation brought about by Internet Services doesnt fit the model altogether. Indeed but since then the development of otc services those did not exist back then and that technology was not accessible. s there is no reason to exist. But you agree they have changed the marketplace today. Totally. You zero in on the reason we ask for stellar to sunset that technology exists making it unnecessary. The competition that exists did not exist then and the harm is very real now as a of Public Policy. So should it be folded into the 1992 legislative framework quick. I have not considered that but it is filling a niche h where they want to watch video on their platforms that are not currently available. But they should be available through broadcast. So what i am seeing is we have two separate frameworks. One operates with 1982 technology and regulated with 1992 laws. Another operates with cuttingedge technology that operates in a different world. And has resulted in substantial innovation to the consumer. To me that suggest we shouldnt try to hobble the part of the market that is driving that technological innovation with that framework meant for another arrow that i add we just recently discovered milli vanilli was a fraud. [laughter] some people got bent out of shape on that. You can answer whatever order you prefer but is there room for reform in the video marketplace . D and what key principles show drive that quick. What we are asking for is the recognition that stellar is over 30 years old, out of date, shoulds lapse, some of these provisions that has merit should not be held hostage to this bill. They could be dealt with separately. My own view is that im not for regulation but i am for markets but if you have half of the Video Industry shackled by old regulations and statutes of the other is completely unfettered. I would simply note my own political experience with social media began with civil discourse began to deteriorate as well. I dont have the answer to that but i i say we would ask for a level Playing Field. I would note what is important in the age of fake news that somebody still does journalism broadcasters do it on a local and nationalur level. If we care about the news being about utah senators in utah then look at how the Revenue Streams to broadcasters being damaged . If you damage those you damage localism than the news is Just National not about the local civic information. To deliver a public value that should be respected and supported. Can i have him answer the same question i dont have a schematic held to approach the problem but i would start with modernizingit the technical and predicates what are the technologies used today to deliver those video signals compared to 19921 of those economic realities with traditional providers to monetize those Services Excellent we havent message mentioned is the new entrance for those companies in the industrialized world many have massive amounts ofme capital and access to other sources that make our services palin comparison. So getting that predicate correctte is one and to harmonize i could go through chapter and verse rules that apply to cable but not to satellite satellite but not broadcasting or broadcasting of which apply to the modern new entrance it is just coherent you cannot reconcile the varying Regulatory Environment in the consumer sees those as in competition with each other. Thank you very much as always showing a greatsh grasp of culture. [laughter] im told you have to depart. Is thatr. Correct . We will really she. [laughter] thank you for being here. I had a really tough questio question. Im kidding. So i will direct this question to chairman powell but we know it has beenn discussed at length but the marketplace for Video Services has changed dramatically consumers have a lot more choices for content than ever before. Netflix is the Largest Video service in terms of subscribers amazon prime offers exclusive video prior one programmin programming, and investing resources to capture the greater share of the market place. One of the factors bringing this rapid change to the expansion of reliable Broadband Connectivity c briefly discuss the ways connectivity created those video experiences can you elaborate what your members are doing to ensure rural areas like my home state of south dakota have access to reliable broadband. I would be happy to but i think solving real broadband issue with his seminal. I dont think you can be an active participant in Society Without having the ability to access that so we do think it is essential. These are communities and our neighbors for those otherwise that can i get a broadcast signal and many are operating in this part of the world. First we are trying to get a much better mapping data set for weve heard the conversation for many years to identify andio target the unserved area because of the inadequacy of Data Collection and those maps the fcc has a meeting under way we are actively participating with a proposal with the shape files that provide much more dramatic detailth mapping of unserved areas to better target those unlimited resources but also making sure dollars go to the unserved before the underserved we make sure everybody eats once that is a flaw of the subsidy programs in the past but on the ground we are trying to demand aggregation like those that work with the local government or businesses to help lower the problem of revenue to serve those communities. A lot of Cable Companies nowow experimentre with an innovative fixed technology and then use fixed wireless to hop another six or 8 miles and then hop again then go 40 miles from the last point i point to a mid continent in the dakotas. May have other Big Companies looking at that option as well. We also have to be candid at that last two or t 3 percent that is a really tough problem. We have to find ways to empower wireless and satellite delivered Services Running a wire between two homes 500 miles apart it will always be difficult from 20000 feet and space all major Tech Companies to close the Digital Divide they should be compelled to talk about iowa montana and south dakota. During the house hearing to be discussed at length to pay substantially more than larger providers are locked out of programming. Can you clarify what goes into determining the rates for retransmission and why they may pay more and whether that same Market Dynamic applies to nonbroadcast programming fees . Im not a part of those negotiationsns. But what they try to focus on is value for their viewership andr content. Obviously with a Small Cable Company and those dynamics are small broadcasters dealing with much larger Cable Companies its never perfect to work 99 percent of s the time with the market that is respected and members will see that it does ultimately support the programming we have all acknowledged is becoming more expensive. You can get it for free if you put up an antenna. But if you want a subscription you can get that to. Any comment on thatma german . Is there any perspective on that dynamic . We have many operators that make this challenge senator smith is right a big part of that problem is that bargaining to buy the consortiums and encourage those that are willing to negotiate with that. For more information there was testimony yesterday by the ceo who sell who herself as a leader of the Small Cable Company to articulate that challenge. I will wrap up because i have to vote but in Previous Congress this committee is taken a serious look at video reforms of which there are many and as chairman of the subcommittee i continue those discussions of today i believe consumers are smart we are to make it easier to make informed choices about consumption while recognizing the local broadcasting across the country. I hope that is giving additional consideration we can Work Together to enhance transparency in the changing marketplace while always protecting the Important Role broadcastingth plays i will recognize the senator from new mexico. Thank yous chairman and to all the witnesses here today. In support of local media means we need media and our communities reporting on local events and stories of local interest not prepackaged stories that dontg reflect the community. I understand n the claim the number of hours of news is increasing, that more is not always better on may 6 the United Nations chartered a panel of critical report on the 1 million animal and plant species threatened with extinction because of destructive human activity and on thatam same day baby urge he was born to prince harry and duchess of sussex. Which got the most coverage . I thank you probably know. Baby archie. Overwhelmingly the three stations spent nearly 18 minutes on baby archie and the only station cbs gave one minute and 21 seconds on the one report that is a sad reflection on our priorities. This is an even more interesting little graph now we have abc news with one week of royal baby coverage , talking a whole year and entire year of Climate Change seven minutes versus six minutes so we are in a situation where thetu media is not focusing on the existential issue and they are up against tough challenges the president continues the fake news that the news that does not flatter him or those outlets is dwindling all of this has abe Chilling Effect of the press. We must continue to have newsrooms of Public Interest free of worry the sec will pull the license for no good reason or the department of justice will be pressured to rule against them. A couple of weeks ago there was doctored video to make sure Speaker Pelosi was impaired as deep Faith Technology becomes more sophisticated we are threatened what role should broadcasters of video providers play to monitor this type of content to make sure the bad faith content does not further amplify . I dont think we have any editorial control as to what people want to hear about i tell my memberser constantly report the news without fear of favor. And the First Amendment is not subject to repeal as far as i can see and freedom of speech is very much intact we have a job we are proud to do and will continue to do it however imperfectly. But i would note to your point about fake news or doctored videosct you statutes and regulations we have to obey and we are happy to do that for all of these entrance are wholly unregulated so that point made many times by the panel that the Playing Field should be leveled to the Election Integrity i just say the altar video shape of things to come with Artificial Intelligence and then that puts up content it is moral and ethicaler obligation with that extent they can determine in those First Amendment speakers to enjoysp those protections with public figures but then to navigate those to come we have to accept some responsibility. Senator when we talk about those issues that are shared responsibility from one platform but then they are rebroadcast on fox news or local tv. We need to Pay Attention to everyone stepping up taking that responsibility perk and looking at the changing media market and with runaway media consolidation you see the cutbacks and then investing to say waite and stop thank you mister chairman. Thank you for staying with us. And as part of that social media platform to put things up that is helpful. I am so glad we are doing this hearing today because not only on commerce but also the Judiciary Committee and most importantlymp representing the great state of tennessee which of course, some writers protect and that is how they make their living and as i lamented in the last reauthorizationt of stellar when i was a member in the house we do not keep up with the evolving video and technology marketplace. So i think this is something we have to pay very close attention to because it evolves much faster. So keep that in mind when you look at the technology what is made available to the american public. If steller were to expire what impact would that have on those missions . The provision that is most important is the goodfaith legal obligation those parties have to negotiate in good faith and failure to do so can invite the oversight and response by the sec. That is an important elementse ofis those negotiations to limit leading to consumer blackouts. There is a problem with good faith to your earlier point that should not be the reason steller is reauthorized that could be a separate issue is just during the life the broadcasters have never been found in violation we have every incentive to make a deal we want people to see content it is our incentive and desire to act in good faith and a pledge that will not change. Its fair to say you would like for steller to sunset. I would. In part because it provides Satellite Companies with their continued ability to broadcast the signals without authorization of all copyright holders through that blanket compulsory effort. And it is your view that should require the actual sunset of those that on the copyright you probably know where this is going for guy you answer it everyis time. So help me to understand why you think they should be required as part of tv broadcasts but not also for radio transmission of sound recordings where the copyright is owned by third parties quick. I was not here in the early thirties when congress wrote the law that said performers get that remuneration through contract and songwriters got it through copyright. Congress has the ability to change that there will. What i am charge to do is protectha. I an industry of rad. When we put that out there we dont charge anyone except those who advertise on the stations. We provide tremendous value in terms of advertising. But when we put it up on the screen and somebody elseit gets paid radio prescription we pay a copyright because congress created that law. We observe the law. That your petition would be because radio transmissions are not protected by copyright. Correct. But then shouldnt your position be it should be like policy for like policy to be protected by copyright quick. If we are interested in recognizing the reality on the ground as well, most of the radio stations out there are momandpop operations of Rural Communities like inn texas are those that depend on lifesaving information, i am charge to keep them alive to. Look at those streaming rates on copyright there are very few radio stations can do that anymore because there is no money and it so if youre interested in the benefit of all music in Congress Wants to get into what those rates should be then please for the state the sake of your constituents take care of this lifeline of information of free and local radio. I am not unsympathetic. I hope we can reconcile these positions i am over time. Thank you. Thank you senator blackburn. Thank you to each of the witnesses for being here today. Those that are vastly different from the sixties and seventies on the only had three broadcast channels to choose from those industries that have grown are no longer the new entrance they once were and those innovated services and platforms to give more n options. And those that have more and better content to reach that intended audience with a video marketplaceon consumers remain frustrated and theyre still in a of those that restrict that content is how is ultimately delivered to consumers i appreciate the committee holds a hearing but it is worth noting its more than 30 years since Congress Passed the first iteration of the bill and the tv video marketplace evolved and something nobody from 1990 would recognize with a multibilliondollar part of the i economy only continues to grow. Is it time to look at reforms and consider broader and more holistic reform to regulations thatg, govern the tv and video marketplace . If so what would you recommend quick. Im happy to. Yes, we always welcome t that. There are several Guiding Principles that our important the first is just the revolution that underpinned the 1982 act. And those that were passed with the technology too distribute and those have been upended and those to be reformed and as i mentioned before the rules do not apply coherently across the state with those regulations look through the eyes of a consumer and with those regulatory regimes. It doesnt harmonize that structure it is weak and effective with that conglomeration those that are driving the stakes to be remotely contemplated in 1992 across the whole economy. In particular with regard to those journalist, how should government policy respond quick. And then to reflexively say and then to do whatever that Public Interest and with those both environments dont have any consideration of the trusted sources those obligations to consumers but to highlight to the Community One committee but am around that second product but without Google Search or sharing and amazon. Thats very different and then in that has to be understood in the process as well. And to be engaged in working with you with those reforms as they come to mind. And what i always tell my broadcasters is the new entrance everyone in telecommunications want content and spectrum but they dont want to do what you do which is localism in journalism. We are trying not to become the newspaper industry. We have two sources that support localism that is the envy of the world to create this relationship with networks and affiliates and all these other platforms but when they are cannibalized with those gasoline prices and to create jobs and frankly essential to make sure the news is that about you and not about new york n or los angeles , that retransmission is what people complain about but it is a market working but simply i would ask you to remember the way you pay for local Network Broadcasting in the affiliate relationships through retransmission consent and advertising is cannibalized right now in the age america loses something precious. We need to look back at what is working 1992 seems like a long time ago that was also the only time but after passage see that cable bills actually went down in the last 35 years. We should figure out what is working and update how do we empower consumers with more choice quirks to let the cable system to pick and choose the channels they want, pay for them but if we empower consumers we will get more effective market and put more of those choices in the hands of consumers. If they want other stations it will pay for them or sports they will pay for them and we will give them the choice then look at retransmission consent fees it works for the broadcasters they are up 2000 percent over the last decade. Its hard when you start from zero. Thank you gentlemen for your testimony. The record will remain open for two weeks. Senators are asked to submit questions for thes record they are requested to submit the written answers to the committee as soon as possible no later than wednesday june 19. Thank you very much managing to get in quite a lot we have a second vote so we will close the hearing. [inaudible conversations] [inaudible conversations]. Today that big idea is more relevant than ever, on television and online. You can make up your own mind, brought to you by your cable or satellite provider. This weekend on booktv, sunday at 6 45 earn we hear how they maintain their relationship despite opposite political views. But this is the basis to me of what matters in life and its all that the chemotherapy test. That is the fact that when you are relying on a hospital bed when you are lying on a hospital bed with getting chemotherapy in your vein you do not ask the othe person standing next to you get through it. At 8 00 a. M. , a talk about his book on freedom of the press. The difference between the modern media today and the Patriot Media that helped found the country is the pate trod media, the men withty prints presses and pamphlets, 30 some newspapers, they were trying to fundamentally transform government. They wanted representative government. Today the press is trying to fundamentally transform us. At 9 00 eastern, jim acosta offer his firsthand account of covering the Trump Administration in his book the enemy of the people. He is interviewed by jayce rosen, New York University jay rosen, founder of press think. As folks know we are roughly 90 plush days since our last official White House Briefing in the White House Briefing room and we just dont have access to white house officials the way we used to, even during the Trump Administration where we have them on the record in the briefing room, where everybody is micd, and you have a variety of reporters. Not just the networks but also print reporters from the wire services, newspapers, foreign news outlets. That has been lost. Watch booktv all weekend on cspan2. The House Intelligence Committee held a hearing to examine risk from deep fake videos in which the audio or images have been altered but are presented as real. Former fbi and pentagon officials testified at the hearing. The committee will come to order. Before we begin i want to remind all members were in open session and well discuss unclassified matters only. Please have a seat. Our members may be wandering in a bit late. We were here until 1 00 in the morning but those on Armed Services were here until
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