Posted on August 30, 2011 by David Oxenford

FCC Issues Report to Congress on Access to In-State Television Programming

The FCC just issued a Report to Congress concerning the access of television viewers to in-state television stations.  This report was requested by Congress as part of STELA (the Satellite Television Extension and Localism Act), which extended the compulsory license for direct to home satellite television operators (DISH and DirecTV) - a license which gives them copyright clearances to retransmit all the programming transmitted by the broadcast television stations that they make available as part of their service packages.  Congress also requested a Report from the Copyright Office on the need for the compulsory license - a report also issued this week, which we will write about in another article.  The issue of access to in-state television stations has been a controversial issue, as several Congressmen have sought (and in a few cases actually received) legislative authority for cable providers to carry out-of-market television stations on cable systems serving areas in one state that are part of television markets where the television stations come from a different state.  The report refers to these areas as "orphan counties."  Once legislative authority was granted in one state, many other bills popped up in Congress trying for the same relief in their state - causing concern that the existing television markets (or Designated Market Areas or "DMAs", designated by the Nielsen Company) might be undermined.  To see what impact such changes would have, Congress requested this report from the FCC.

The report for the most part does not make recommendations, but instead simply provides information about the service provided to US television viewers, the potential options for bringing an in-state service to all viewers, and the issues that such proposals would raise. Perhaps the most interesting fact revealed by the report is that 99.98% of all US television households already have access to an in-state television station, either over-the-air or through a Multichannel Video Programming Distributor (e.g. cable or satellite TV system), so this is a very isolated issue.  However,when the FCC sought comments on the issues discussed in the report, a number of individuals in particular DMAs responded about situations where they could not get access to in-state television stations and asked that something be done.  The report assesses the implications of any action that could be taken.

Any attempt to provide access to in-state television stations to all television viewers implicate the following legal issues:

  • Potential issues with the must-carry and retransmission consent process.  Some television stations are concerned that changes could disrupt the retransmission consent process by allowing out-of-market TV stations to be substituted for in-market stations during disputes over retransmission consent fees. Satellite carriers, on the other hand, are concerned that any sort of obligation to carry additional television stations could affect channel capacity.
  • Syndicated exclusivity and sports blackout rules are all based on existing DMAs, which could be disrupted if new stations were imported into existing markets
  • Copyright compulsory licenses are based on DMA definitions, so issues under those licenses could arise with new carriage obligations

Potential alternatives to the DMA were suggested, though many parties were concerned about the disruption to existing business relationships in the television industry and of long-established consumer viewing habits.  Virtually all such relationships are all based on DMA definitions.  Nevertheless, the Commission looked at alternatives including:

  • Market drawn along state lines, a proposal that drew almost universal condemnation for the disruption of existing relationships, and the fact that the proposal would also ignore real viewing patterns based on the interests that center on multi-state metropolitan areas.
  • An expanded market modification process that would allow petitions to include a distant in-state signal in a market where that signal provided in-state programming to viewers in a DMA, allowing MVPDs to carry that signal.
  • A modified definition of a significantly viewed stations, with implications similar to the option above
  • An approach suggested by broadcasters to allow the importation of the news and local programming by in-state stations, but not the network and syndicated programs (an approach criticized by MVPDs who note that this programming constitutes a small portion of any station's broadcast day, and that would leave channels with large amounts of blocked programming, making it unlikely that audiences would find the in-state programs.

This is obviously a very sticky problem, where any solution to help the few people who do not have access to in-state programming may raise more problems than it solves.  The report generated by the Commission is fascinating in the detailed information that it provides about interstate viewing patterns in markets all across the country.  While not putting this issue to rest once and for all, the FCC certainly has provided plenty of information for consideration by those who may want to continue to debate how to help the .02% of the population that falls into this unfortunate hole where they cannot receive in-state television programming. 
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Posted on May 12, 2010 by Brendan Holland

Congress Passes STELA Act Extending Satellite Television Provisions and Changing the Definition of Unserved Household

On Wednesday, Congress passed the Satellite Television Extension and Localism Act of 2010 (STELA), which extends the blanket copyright license allowing satellite television providers to deliver distant signals to "unserved" viewers who are unable to receive a signal from their local network affiliate.  The Act extends that blanket license for five more years until December 31, 2014.  Enactment of this bill (assuming President Obama signs it into law) will essentially extend the current blanket license scheme -- which previously expired on December 31, 2009, and which had been hastily extended temporarily a couple of times this year -- that governs the importation of distant signals.  Although the Act did not tackle many of the issues that had been raised and debated regarding satellite television and the rebroadcast of local station over the past six months, the final bill does allow Dish Network to get back into the business of rebroadcasting distant signals directly, instead of through a third party.  In exchange for this change in the law, Dish Network has committed to delivering local television signals into the remaining dozen or so markets in which it doesn't provide local-into-local service presently.  By virtue of this trade, Dish will likely become the first satellite television provider to offer local TV stations via satellite in all 210 markets in the country.

One subtle, but potentially very significant change for broadcast stations is the fact that the rule changes the definition of what constitutes an "unserved household".  Today, the law defines an unserved household (i.e., one that would be entitled to the importation of a distant signal) as:  "...a household that cannot receive, through the use of a conventional, stationary, outdoor rooftop receiving antenna, an over-the-air signal of a primary network station affiliated with that network..."  47 USC 119(d)(10)(A).  Now, however, the STELA Act changes that definition to simply state that an unserved household is one that:  "...cannot receive, through the use of an antenna, an over-the-air signal..."  Changing the definition to reception simply by "an antenna" instead of a "conventional, station, outdoor rooftop receiving antenna" would appear to mean that Congress has just extended the definition of unserved households to include those that cannot receive an adequate signal using rabbit ear antennas, not one that can't receive a signal using a 30-foot, fixed, outdoor antenna.  This could lead to a significant change in the provision of distant signals and potentially eat away at a station's protected service area.  How exactly this plays out and whether or not it allows the satellite providers to bring distant signals to households previously considered "served" remains to be seen. 

Beyond this change to the definition of an unserved household, the Act also revises language in the existing laws to reflect the transition from analog to digital by removing antiquated analog terms and substituting digital language.  In particular, the Act addresses multicast channels that provide network programming.  Specifically, the Act provides protection from duplicating distant network signals for those stations broadcasting Network affiliated multicast stations. Under the Act, network multicast channels in existence on March 31, 2010, will be entitled to program exclusivity protection beginning on October 1, 2010.  Network affiliated multicast channels that begin operation after March 31, 2010, but before December 31, 2010, will be protected from duplicating distant network signals for subscribers who sign up for service after December 31, 2010.  And stations commencing multicast of network signals after January 1, 2011 will be entitled to immediate protection.  This protection will apply with respect to new subscribers going forward, but existing subscribers are effectively grandfathered if they are already receiving a distant network signal from a network currently multicast by a local station.

While the Act does not address issues such as changes to the retransmission consent agreement process, it does make a number of small changes that could impact broadcasters in a big way.  So we will undoubtedly be talking about more of these issues in the future.     
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