Norman Leventhal is a Partner in our Washington, D.C. office
Battles between broadcasters and Pay-TV providers have been ongoing in the courts for some time now: Aereo, Hopper, etc. [ See January 18, 2013 Blog Post] Now Congress is poised to get involved yet again.
The SatelliteTelevision Extension and Localism Act of 2010 (STELA) expires in 2014. STELA authorizes pay-tv providers such as DirecTV and DISH, to retransmit broadcaster signals to their respective home markets under one of two scenarios: the broadcast station asserts its right to elect carriage status or it consents to retransmission of its signal (almost always for a fee).
At issue this time, however, is more than just your typical multi-year extension; Pay-TV companies are pushing to change the entire "retransmission consent" scheme by which broadcasters negotiate for payment for the right of satellite companies to carry their programming signal. And they may be getting a receptive hearing in Congress which has received may complaints from constituents complaining about black-outs due to breakdowns in several high profile retransmission consent negotiations over the last several years.
One possible scenario could include compulsory arbitration when disputes reach an impasse and a prohibition on refusing signal carriage during the dispute resolution process. Obviously, broadcasters will fight this outcome since it removes a major part of their negotiating leverage.
A note to the wise: once Congress starts tinkering with one law, inevitably requests to alter other related laws come into play. Who knows today whether that would be good or bad for them.
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