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.