Hearing on legislation governing retransmission of broadcast Television Content by satellite tv companies. Representatives from the National Association of broadcasters, at t, the cable industry, and the Public Interest group testified at this hearing held by house energy and subcommittee on communications. There we go. Will now come to order. The chair recognizes himself for five minutes. Good morning, id like to welcome everyone to the subcommittees first hearing for stellar and evolving marketplace. Id like to thank our witnesses for appearing before us to address these important issues. Five years ago passed the act, extended authorization for Satellite Television companies to provide broadcast content to unserved households. According to satellite tv industry, this provision enables roughly 870,000 customers in mostly rural to receive broadcast television signals. These customers fall into a few categories, first is households that cant receive content using an antenna. Second is markets from a satellite provider does not offer local to local service. The third is short markets where there are no local affiliated stations with one of the networks. And finally satellite tv subscribers that receive service to a commercial truck or an rv. In effect, this provision enables rural customers of dish and directv to receive content from nbc, abc, cbs, fox, and other broadcast stations where it isnt otherwise available. Stelar required broadcast stations and mpvds, cable, telecome and satellite like charter, dish that offer Television Service to negotiate carriage of broadcast content on their systems, which is known as retransmission consent or retrans under a good faith standard to be decided by the fcc. This regulatory backstop was and is important because there have been allegations thatne nesthes negotiations have at times not been carried out in good faith. When negotiations stall or break down, broadcasters may pull systems from mpvd system channel line up resulting in a blackout of that content. In these circumstances consumers suffer as a result of the two parties inability to come to an agreement. While it is true some have the ability to set up an antenna to get the content over the years when it gets pulled off their satellite or cable for many its too complicated or go without broadcast doughnut during disputes. Requiring parties engage good faith intended to reduce blackouts. These were the major provisions of the bill that are now set to expire at the end of this year. Make in the broadcast have argued this legislation should sunset and provisions are no longer necessary. While i agree this law isnt a perfect solution, allowing this legislation to sunset would create a crisis that could result in nearly a Million Consumers losing access to important broadcast content. Allowing a lapse of the good faith standard and retransmission consent negotiation only invites bad behavior and consumer harm. More broadly, the media landscape has changed a lot in the last five years with major consolidation occurring among broadcasters and mpvds. Miss boyer in her testimony argues the arms race between the two sides resulted in increased rates for smaller rural cable providers who dont have the scale to get preferential rates and pay higher for content of their larger rivals. However, across the board we hear from mpvds that rates for transmission are increasing. In recent years weve seen the rise of over the top providers like sling, hulu, and youtube offering live Television Service over the internet directly through consumers. This is a complex marketplace consumers rely on for information and entertainment and americans pay a lot every year to get access to this content. I look forward to the testimony of our witnesses and with that i yield one minute to my friend from california. I thank the chairman for yielding to me. I think todays hearing is not choosing sides between broadcasters and cable but about consumers i think are losing out in the media market in two ways, blackouts and unexpected fees. Too off consumers are held hostage during disputes between blood caste broadcaster and cable. In 2017, 2,000 blackouts, more than double the number of the year prior. Mr. Scalise and i have championed legislation to end blackouts by overhauling outdated regulations. Next we should dealing with hundreds of millions of dollars of misleading below the line fees consumers get stuck with every year. My bill hr 2020, 1220, true fees absent simply requires cable, phone, and internet providers include all fees in the prices they ties to consumers. Kind of a common sense idea. I think it would ensure consumers would then know exactly what they are paying when they sign up for a service. Thank you, mr. Chairman, look foshd forward to a productive hearing and thank you for yielding to me. I thank the gentlelady. Now recognize the member of the subcommittee for five minutes for his opening statement. Thank you, mr. Chairman. Thank you for holding the hearing and thank you to our Panel Witnesses for being with us today. Todays hearing once again considers interplay between local broadcasters and direct broadcast Satellite Services known as stelar. Key provisions expire at the end of 2019 and im pleased the subcommittee continues the process on the question of reauthorization. We started last year examining current state of the video marketplace. In the subcommittee hearing last september we learned about changes in consumers viewing habits such as continued rise of over top Video Services and notable shifts of advertising expenditures across the various mediums. Nevertheless while online videos flourish and exciting alternatives bedrock of video marketplace remains local broadcast programming. All of us rely on our local broadcast for news, emergency updates, weather, traffic, Community Engagement and local interest programming. Accordingly the subcommittee has a duty local broadcasters retain ability to invest in infrastructure and program that keeps all americans connected to their communities. For 30 Years Congress has also played a key role in ensuring Rural Americans unable to receive an over the air broadcast Network Signal are able to receive local news and content via direct broadcast Satellite Services. Congress accomplished this in 1988 by creating a statutory license for fee, license fee, that helped the direct broadcast satellite industry take root. But the video marketplace continues to evolve, and accordingly every five years we carefully examine whether this model should be reauthorized, repealed, or revived. Through each iteration of what we now call stelar, we ask the subject matter agencies to report on effectiveness of statutory license fee model, and we hold hearings calling upon a prod collection of the stakeholders representing consumers and industry participants. Im pleased we have again seated a qualified panel of experts who can assist this committee to paint an accurate picture of this market. Its important we fall enthusiastic competitive video marketplace and ensure all americans continue to receive access to unbiased local news reports, up to the minute weather updates, and critical information during emergencies. For example, unfortunately last week in ohio we had a series of tornadoes and folks back home in my district particularly had to rely on local broadcast as to what was occurring. I look forward to working with the chairman and members of the subcommittee as we carefully examine reauthorization. I thank our witnesses again. At this time im going to yield to mr. Long. Thank you. Thank my friend for yielding. Id like to thank the witnesses for being here. Im especially happy to see a fellow missourian here today, miss boiyers, as a real estate f you want to move to the 135th Congressional District we can set you up. We can agree the Media Entertainment marketplace has and is rapidly evolving. Theres more competition than ever and Government Intervention isnt always the answer. It is important to examine the state of the video marketplace but as we approach 6th reauthorization of stelar we need to look at underlying policy and its relevance rather than assuming passage as certain. Ensemble three things certain, death, taxes and reauthorization of stelar. We should ignore rubber stamping this legislation only because this committee has historically done so in the past. I yield back. Mr. Chairman, at this time are there any other members wishing to reclaim the remainder of my time . Mr. Scalise. Thank you, mr. Ranking member and mr. Chairman. Appreciate you coming to talk about stelar and not just in the context of reauthorization in that silo but its a time it forces us to look at the entire marketplace, the entire video marketplace and all the laws governing it. I actually share the expressions of some of the panelists who talk about why they think stelar should expire. Its not because they think it should go away because they want more reforms, some people might think stelar going away gets us reform but it doesnt. Going away brings us back to the fundamental 1992 cable act laws, the foundation, which is incredibly outdated. Weve got a marketplace thats changed dramatically since 1992. I think Everybody Knows that. I literally can pull up content on this device right here and its not governed by mostly what i would pull up gomped by verne2 cable act. Some is governed by 1992 act. I go on the internet, why do we have such a diverse set of laws that apply to basic industry in our country. We need to reform the entire act. Its been a long time for congress to do it. I applaud the congresswoman, she into a few minutes ago, weve been working very closely. Hopefully we can get to that point where we inform the entire marketplace that regards video. I appreciate the time. Mr. Chairman, i yield back. Gentleman yields back. Chair recognizes mr. Pollone, chairman of the committee for his statement. Thank you, chairman. For nearly 70 Years Television has been a unifying threat in american society. It brings people together, friends gather around to watch the big game and coworkers share theories about tuitions and turns of the moments must watch series. Tv is the place we get our local and National News and turn for emergency information during a storm or natural disaster. The hearing today may appear to be focused on arcane provisions in copy right law but fundamentally about consumers getting access to broadcast programming whether they are an urban or rural areas. We should continue to focus on timeless values that inform our media policy, those are localism, diversity and competition. The stelar reauthorization act of 2013 and its predecessors establish framework that allow providers to deliver broadcast inside and sometimes outside of the subscribers market to customers. Some socalled unserved subscribers cant receive local stations from an antenna because they are too far away or they are in a media market that doesnt have a station affiliated with one of four big networks and these consumers must be protected. At the same time Satellite Television providers are not required to carry local broadcast networks. As a result some subscribers receive out of Market Network programming from slooet provider instead of local stations. Congress the goodfaith negotiation rules that underlie the agreements that allow consumers to watch over the air broadcast stations as part of their cable and satellite tv packages. As media consolidation has grown, so, too, have the fights over these programming agreements and unfortunately consumers have been caught in the middle. The number of station blackouts has been increasing as have the rates consumers pay. Smaller Telecommunication Companies are facing a choice of whether to continue as Cable Operators or simply become broadband providers. So as we begin our examination of stellar, its important we ask the ultimate question of how best to put consumers first. I expect that my colleagues on both sides of the aisle will offer a number of Different Solutions large and small tackling different issues within the media landscape. We should focus our analysis on the consumers and questions like what are the implications if stelar is not reauthorized and how will the over 800,000 consumers currently receiving distants signals be impablthsct . Whats the path that gives consumers the ability to access at prices they can afford the Television Content they want . How do we ensure that consumers are not rendered pawns in highstakes negotiations between video Distribution Companies and big broadcaster station groups. And how can we ensure that broadcast stations remain vibrant outlets of expression and trusted sources of information for the local communities while also promoting competition to the benefit of consumers. Aushlgs how can we encourage the carrying of local program at reasonable rates and that local programming reflects a 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 still have i dont know if anybody wants my time. If not, ill yield back. Thank you. Oh, yes, ill yield to the vice cha chair. Thank you, mr. Vice chairman and i thank chairman doyle and our Ranking Member. Good morning. And 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. We are not seated here today to discuss satellite and Cable Operators or broadcasters for that matter. We are 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. Gentleman yields back. Chair recognizes mr. Walden, the Ranking Member of the full committee for five minutes for his opening statement. Good morning, mr. Chairman and to our witnesses. Were delighted to have you here today. I want to thank you. I know your expertise is going to help us as we work on this legislation and review the media marketplace and whether or not Satellite Home viewer act first passed when Ronald Reagan was president works for Television Viewers today. Id like to extend a warm welcome to my friend and fellow oregonian, senator gordan smith who served oregon in the United States senate for a dozen years. Good to see you here in the peoples house, senator. 30 years ago, congress sought 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 copyright license as an alternative to individually negotiating with each copyright holder. While the license is now a permanent fixture, the distance 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 during my time as subcommittee chair, this must be a transparent process and driven by data. Im encouraged the fcc im appreciative of the work by the Government Accountability office in draft tgs report to congress directing, describing stakeholders views on phasing out the statutory license. Our goal should 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 revolves 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 the wildfires and smoke warnings or tornadoes, traffic accidents, emergency situations elsewhere in the country, local content provides vitally important, trustworthy and timely information to communities across america. Its understandable in our fastmoving world to take stock of whats changed. Technological developments paired with changes in how americans consume video driven in part by online Video Services have led video distributors to see steep declines in subscribers as consumers cut the cord and broadcasters have seen advertising revenues move to digital platforms. This fact certainly impacts the distributors but also impacts the broadcasters and their ability to serve their local communities with indepth news programming. Local broadcasters expend tremendous resources serving their communities and deserve a level Playing Field through their fcc licenses. They are also trustees of the publics air waves and must serve the publics interest. That means they serve the needs and interests i