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FOR IMMEDIATE RELEASE
June 5, 2019
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Dennis Wharton
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Testimony of Gordon Smith at Senate Commerce Committee Video Marketplace Hearing

WASHINGTON, D.C. -- NAB President and CEO Gordon Smith testified this morning at U.S. Senate Committee on Commerce, Science, and Transportation hearing entitled, “The State of the Television and Video Marketplace.”

Below is his testimony as prepared for delivery.

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Good morning, Chairman Wicker, Ranking Member Cantwell and members of the committee. My name is Gordon Smith and I am the president and CEO of the National Association of Broadcasters.

On behalf of the free and local broadcast television stations serving your hometowns, I appreciate the opportunity to testify on how Congress can ensure that viewers are better able to access their local news, sports, weather and emergency information by allowing the expiring provisions of STELAR to sunset this year.

Today, STELAR is not only unnecessary due to considerable advances in the media marketplace, but any reauthorization will further harm the satellite viewers that are currently denied access to their local television stations as a result of this law. For these reasons, broadcasters oppose STELAR’s reauthorization. Similarly, the Copyright Office – the expert agency charged with administering STELAR’s license - released a report on Monday calling for its expiration.

In today’s competitive media landscape, local broadcast television remains the most-watched source of news, emergency updates, entertainment programming, sports and investigative journalism in communities across America. Our viewers turn to local stations to get the weather report, learn how to help neighbors in need, and watch trusted local news anchors give an unbiased view of what is happening in their communities. Local broadcasting is a critical electronic thread that keeps every community together, informed and safe.

The exceptions to the benefits afforded by this local broadcast system are those communities that continue to be served by out-of-market stations as the result of STELAR. In 1988, when the original satellite law was enacted, viewers had two predominant choices for video programming: over-the-air broadcast television or a subscription cable package offered by a single local provider. That satellite legislation, a predecessor of STELAR, was hugely successful in enabling the nascent satellite television companies to better compete with cable’s monopoly. But the crutch it gave them was the ability to serve viewers with out-of-market network programming at a below-market rate and without having to negotiate for it.

But thirty years later, today’s media marketplace is virtually unrecognizable and dramatically different, even compared to just five years ago at the last STELAR renewal. Those nascent satellite companies that Congress subsidized are now multi-billion-dollar behemoths. And today’s competition for viewers comes not only from those giant pay-TV providers and their cable brethren, but also unregulated tech companies such as Facebook and Google, and online video providers like Netflix and Amazon.

Most importantly, no technological impediment exists today to prevent AT&T-DIRECTV and DISH from providing local broadcast channels to their subscribers across the country. Yet STELAR’s distant signal provisions incentivize those companies to serve a shrinking universe of eligible viewers with out-of-market subs because of its subsidy.

To put this in practical terms, DIRECTV subscribers in Nebraska recently saw a news story about a new panhandling fine in New Jersey. The local news they should have seen is that of a series of floods that may have a devastating impact on Nebraska crop yields this year.  Instead of important local election news, viewers in Montana’s state capital of Helena were watching the Santa Clara County, California Board of Supervisors.  And when they should have been seeing emergency coverage of a possible explosion on a busy local street, viewers in Grand Junction, Colorado were hearing a story about California’s newest Michelin-starred restaurants.  This is a business decision that AT&T-DIRECTV is making in 12 rural markets across America: a choice that puts their profits ahead of service to consumers, and ahead of the safety of communities. Broadcasters and viewers salute the senators who have highlighted this STELAR harm.

To end this consumer harm and modernize the video marketplace laws, Congress should allow STELAR to expire as it was originally intended. There is no policy justification or technological reason for this outdated law to be reauthorized. The time has come to stop subsidizing billion-dollar satellite companies and to instead provide viewers with the most accurate and timely source of community news, weather and emergency information – their local broadcast stations.

Thank you again for the opportunity to testify today. I look forward to your questions.

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About NAB
The National Association of Broadcasters is the premier advocacy association for America's broadcasters. NAB advances radio and television interests in legislative, regulatory and public affairs. Through advocacy, education and innovation, NAB enables broadcasters to best serve their communities, strengthen their businesses and seize new opportunities in the digital age. Learn more at www.nab.org.