STELA! Technological Advancements Must Give Way to Updated Rules and A More Free-Market Approach

Satellite TV Dish (Courtesy Jan Tik)

The Satellite Television Extension and Localism Act (STELA) was passed by both chambers of Congress in 2010 and renewed the blanket license allowing “satellite operators to deliver distant signals to subscribers who cannot get a viewable signal from their local affiliate.” The main goal being that satellite TV companies (i.e. Dish and DirecTV) can be allowed to retransmit to local market subscribers a network TV signal from outside the subscribers’ market. We now sit three years later and two things are clear: First, STELA must be reauthorized by December of 2014; Second, while reauthorization is important, there is also a real chance to make STELA a more free-market friendly vehicle for providers.

This week the House Subcommittee on Communications and Technology will be holding a hearing that will continue the discussion of STELA reauthorization that began back in February of this year. Representative Steve Scalise (R-La.) sits on the subcommittee and has championed legislation aimed at strengthening free-market principles as it relates to telecommunications in a sea of constantly changing technological advancements. The Next Generation TV Marketplace Act, sponsored by Mr. Scalise would do just that, and he has looked at the advancements in technology over the last two decades as guidance in terms of how to return to a more fair-minded, free-market approach. In 2012 he gave an interview to Red State in which he discussed the changing technologies and how his legislation would be beneficial:

“Retransmission consent rules were enacted in 1992, and you only have to compare a cell phone or computer from that era with today’s smart phones and tablets to realize how far technology has advanced, yet the laws haven’t changed to keep pace with the technology… The Next Generation TV Marketplace Act re-establishes personal property rights and also starts a dialogue to allow the modern telecommunications marketplace to return to true free market principles. By returning to a free market, which we don’t have in today’s video marketplace, the only way someone will be able to exhibit a copyrighted video signal is through a mutual agreement between the party that owns the content and the party wanting to show it. Under my bill I have no doubt that commercial programming, demanded by consumers, will be carried by pay-TV providers at a fair market price.”

The Taxpayers Protection Alliance has been a vocal supporter of Congressman Scalise’s legislation and last year TPA President David Williams sent a letter to the Senate discussing why updating the guidelines that cable providers operate under is crucial to consumers nationwide noting that, “There are no longer cable monopolies and broadcasters have a choice among many providers such as cable, satellite and fiber optic networks. This has given broadcasters the upper hand in negotiations. Broadcasters have used this advantage to force cable and satellite providers to pay outrageous fees or carry extra channels on their basic tiers.  This lopsided leverage has caused program blackouts until a deal is reached and  a huge increase in what customers pay as broadcasters’ pass these fees as higher rates to customers.” The issue was also taken up in a coalition letter undersigned by several free-market and taxpayer groups, including TPA.

The hearing on June 12 is the next step in what will hopefully be a thorough and open examination of the ways in which STELA can be improved to accommodate the advancements in technology that have been vast in terms of the impact not only to businesses, but also consumers. There is clearly a divide and we have seen it for quite some time with a push for change being led by an industry coalition going up against the Broadcasters who are seeking a clean reauthorization of STELA without any change to the existing framework in place.

When this issue began to re-surface in February of 2013 the focus was mainly on the history of STELA but the lines were clearly drawn between the camps with the Broadcasters looking for the government to keep outdated regulations imposed, making it more difficult for Satellite operators to compete. This is wrong and not only because the free-market approach is the best option for consumers, but also because it is more advantageous for businesses. The increased competition will encourage advancements in innovation and technology which will ultimately give the consumers more choice, giving providers more flexibility in how they will sell their products in the open-market to customers nationwide.