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National Association of Broadcasters
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Narrow Satellite Legislation Should Expire as Congress Intended

ISSUE SUMMARY

The growth of the satellite TV business, advancements in technology and private business agreements that exist in the media marketplace, have rendered the Satellite Television Extension and Localism Act Reauthorization (STELAR) unnecessary. The law is currently set to expire at the end of 2019. Broadcasters support its expiration.

Here's why:

Three decades ago, nascent satellite television companies were given a significantly discounted copyright license that allowed them to better compete with big cable monopolies. Under the license as originally conceived, a satellite company could import an out-of-market network TV station signal, typically from a major city, into a local television market where a local broadcast station could not be provided by the satellite company. At the time the license was created, the technology simply did not exist to enable satellite carriage of local broadcast stations in most markets and importing an out-of-market station provided viewers with their favorite network programming.

Today, the landscape is much different. AT&T-DIRECTV is a $235 billion company, and DISH is a $17 billion company. No technological impediment exists to providing satellite viewers with their local broadcast station rather than an out-of-market substitute. Nonetheless, STELAR still allows these billion-dollar satellite companies to import TV channels from major cities for a small number of households instead of providing viewers their local network channels. Royalties under this outdated license are discounted substantially below the carriage fees for these stations negotiated in the market by other pay-TV providers. This below-market subsidy incentivizes the satellite companies to deny viewers local news, weather and life-saving emergency information, while still charging their subscribers hefty fees each month for an out-of-market station.

Viewers will benefit from eliminating this outdated law, ensuring they receive the local content most relevant to them. In rare instances where a local broadcast channel is not available, private business arrangements between satellite TV providers and broadcasters can resolve these issues.

The bottom line:

As noted by many lawmakers, it has always been Congress' intent to sunset this narrow law once it is no longer necessary. That is why the original legislation and all its progeny included expiration dates. There is no policy justification or technological reason for STELAR to be reauthorized. The time has come to stop subsidizing billion-dollar satellite TV companies and to instead provide viewers with the local news, weather and emergency information they want and need. Congress should let STELAR expire.