STELA Clues Eyed for House Media Market Hearing Amid Low Expectations
Communications sector expectations for Thursday's House Communications Subcommittee hearing on the state of the media market are nearly universally low. But some lobbyists told us they will be listening for potential clues about contours of the looming 2019 debate on Satellite Television Extension and Localism Act (STELA) reauthorization. The hearing, called largely at the behest of House Majority Whip Steve Scalise, R-La., is expected to include a major focus on his Next Generation Television Marketplace Act (HR-6465). Lobbyists and Capitol Hill aides noted substantial House Commerce Committee pique over Scalise's push to hold the hearing, including expectations of sparse lawmaker attendance. The panel will begin at 3 p.m. in 2123 Rayburn.
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House Commerce Chairman Greg Walden, R-Ore., acknowledged Scalise's role in calling the hearing and told us he expects “some level of focus” on HR-6465. The bill, which Scalise refiled in late July, would repeal compulsory copyright licenses and retransmission provisions of the 1992 Cable Act and end Communications Act mandates on carriage and purchase of certain broadcast signals by MVPDs (see 1807230044). He filed versions of the bill in the 112th and 113th Congresses (see 1207240073 and 1312130065).
“It's important to highlight just how outdated our video marketplace laws are,” Scalise told us. The 1992 Cable Act was enacted “back at a time when you only had monopoly cable companies, you didn't have satellite, you didn't have fiber, you didn't have the internet” as it exists today. “That makes no sense for today's marketplace,” he said. “The law should be updated and modernized to meet the technology capabilities that we have.” HR-6465's supporters “clearly have a little ways to go” before the bill can advance through House Commerce, but “I at least want to bring up the inadequacies” of the 1992 Cable Act, “how outdated” that law is and how HR-6465 would address those issues, Scalise said.
The hearing will be “bigger and broader than just [HR-6465], as important as that bill is,” Walden said. “We've got [STELA] reauthorization coming up again, we've got other questions about how the video marketplace has changed.” The hearing “will be the first part of what I think will be a broader look at the marketplace” given the STELA debate and perceptions that the landscape “has changed pretty dramatically” even compared with when recertification of the statute last happened in 2014 bill (see 1411200036 and 1412040067), Walden said. “When I took over” as House Communications chairman, “the notion of the word a la carte shattered the world and now most of us get our video in what is effectively a la carte.”
House Communications ranking member Mike Doyle, D-Pa., said Democrats likely will focus on concerns about the FCC's kidvid NPRM (see 1807120050) and media consolidation. A House Democratic aide noted concerns within the caucus about the NPRM's proposal to eliminate requirements on length and frequency of children's educational programming and language that would allow broadcasters to fulfill kidvid rules by streaming programming online. The FCC is collecting comments on the NPRM through Oct. 23. Broadcasters supportive of the NPRM found themselves at odds with programmers and consumer groups, in comments filed before a Monday deadline in the FCC's proceeding (see 1809250039). Media ownership also could draw some focus, though it's less of a “red-hot” topic given the demise of Sinclair's proposed buy of Tribune, a media lobbyist said.
ABC's Ocean Treks Executive Producer Jeff Corwin is expected to testify on kidvid rules and the need to maintain the spirit of the 1990 Children's Television Act. Corwin's Ocean Treks partner is Litton Entertainment, one of the educational and informative (E/I) programming entities that has been opposing the kidvid NPRM (see 1809100044). Litton “supports a comprehensive review of the children’s television rules and supports a number of proposals aimed at lessening burdens on television stations and providing them more programming flexibility,” Corwin says in written testimony. “However, we are opposed to allowing broadcasters to move E/I programming to multicast channels and rolling back the three-hour rule.”
Two analysts will focus on quantifying changes in the media market. MoffettNathanson's Craig Moffett notes the emergence of virtual MVPDs and “the trend towards vertical integration,” including AT&T's buy of Time Warner. “It is hard not to conclude out of all of this that we are currently in something of a bubble” in which “we are not yet seeing the natural consequences of changing economics in media ... but we will,” Moffett says. “Those changes are likely to lead to higher prices for vMVPDs services, and the production of less 'top shelf' content.”
“Online distribution has fundamentally altered how consumers access content,” says Kagan Media Research's Ian Olgeirson. “Broadband connections and mobile data services have introduced new options, fueling changes in consumption habits and preferences. Alternatives to legacy distribution for video and audio have clearly altered business models as well, and the corporate landscape is shifting in the pursuit of increased scale.” The industry “has substantial fortifications that have ensured the video market “is still in the early to mid-stages of a complex process that should not be over simplified with a rigid definition of cord cutting,” Olgeirson says.
Broadcasting and media lobbyists questioned whether much of the testimony and discussion will ultimately influence the debate on STELA and media. Some noted continued uncertainty over which party will control Congress after the November election, particularly given expectations of Democratic gains in the House. The hearing is “happening four months” before the next Congress convenes and HR-6424 itself is at least “dead in the water” for this Congress given it's controversial enough that it's unlikely to get traction during the lame-duck session, one broadcasting lobbyist said: The bill's life in the next Congress “will depend on which party is in the majority and what Scalise's place is within the GOP leadership hierarchy.”
“There is widespread expectation that it's going to be largely a bust,” but “I don't think that's necessarily a reflection” on the underlying debate about STELA, one media lobbyist said: “A hearing even with limited participation” could at least reveal what House Communications members are thinking before the real kickoff of the STELA debate next year. Some members may not be able to attend the hearing given its timing so close to the start of the House's weekslong pre-election campaign recess, which is expected to start after the close of business this week, another media lobbyist said. Any member's questions for the record, submitted after the hearing, will take on additional importance, the lobbyist said.