STELAR Compromise to be Included in End of Session Spending Legislation

As we have reported previously, STELAR expires on December 31st of this year.  STELAR is an exception to the copyright law that allows satellite companies to import distant network signals into areas that cannot receive an over their air TV signal.  It was enacted 30 years ago at a time when satellite companies lacked the technical capacity to provide local-into-local service to all TV markets.  While this is no longer a problem today, ATT/DirecTV still does not provide local-into-local service in about 12 small markets outside New York State.

STELAR is up for renewal every five years.  Unfortunately, it has become a vehicle to impose new, onerous regulations on TV stations.  NYSBA believes STELAR should expire.

Last week we outlined the four bills moving through the House of Representatives and Senate.  Together these bills would allow STELAR to expire.  The leadership of both the House and Senate Judiciary and Commerce Committees reached agreement.  The compromise will be included in the end of year spending bill.  Generally the agreement follows the provisions contained in the two House bills.

  1. STELAR will not be extended.  This is a huge win, as it eliminates the legislative vehicle for imposing new regulations on TV stations.
  2. The STELAR copyright exemption will remain for providing out of market TV service to RV’s, Trailers and short markets (i.e. those markets without a full complement of network signals).  To use this exemption, however, ATT/Direct TV will have until May 31, 2020 to provide local-into-local service to the dozen markets that currently do not have this service.  There will be no waivers after this date.  (Note, this does not impact NY, as all markets have local-into-local service)
  3. There will be a permanent “good faith negotiation” requirement for retransmission consent agreements.  Current law already requires us to negotiate in good faith.
  4. There will be greater transparency in cable bills.
  5. Smaller cable companies, i.e., those with a nation-wide subscriber base of 500,000 or less, will be allowed to form collective bargaining units to negotiate retransmission consent agreements.  However, the buying group’s reach may not exceed more than 25 percent in any local market.  Also, these collective negotiations only apply to broadcast companies that have a national reach that is greater than 20 percent.

We had some concerns about the collective bargaining provisions.  However, provisions appear to have been narrowed somewhat.  Moreover, it will not apply to the major cable companies (e.g., Charter/Spectrum, COMCAST, Altice) that represent the overwhelming majority of cable subscribers in NY TV markets.

This is an important victory for television stations.  NAB did a terrific job.  We want to thank House Judiciary Chairman Jerry Nadler and Senate Minority Leader Charles Schumer for their support.  They were instrumental in getting the compromise across the finish line.


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