Legislation aimed at blocking the proposed hike in satellite copyright fees was amended with five new provisions during a markup last Tuesday (8/4) before the House Judiciary Committee. Congressional sources predict the amendments will hurt the bill's chances of becoming law.
The House Judiciary Committee accepted five amendments backed by the nation's broadcasters that were offered by Rep. Howard Coble (R-N.C.). Two provisions already are drawing opposition and reducing support for the legislation.
The bill, H.R. 2921, now includes a controversial provision to allow satellite broadcast providers to offer local network signals to their viewers for the first time, but burdens them with "must carry" obligations that require them to offer the same public access channels and other programming as cable TV providers.
EchoStar Communications Corp. [DISH] Chairman Charlie Ergen has been an outspoken critic of such a measure. He claims too few channels exist in his satellite broadcasting service to meet that requirement and insists subscribers could be better served with other programming.
Satellite television representatives were disappointed with another amendment that would guarantee them access to copyrighted programming for only the next five years. That limit would put satellite broadcast providers at a disadvantage compared to their cable TV competitors, which have permanent access to the programming. The satellite industry's use of copyrighted programming had been scheduled to expire under the existing Satellite Home Viewer Act (SHVA) by December 1999.
Other amendments to the bill would hold the line on hefty copyright fee hikes planned for satellite broadcast providers until December 1999, establish a national PBS feed via satellite, and allow cable subscribers who switch to satellite TV to gain immediate access to network programming rather than forcing them to wait 90 days as required under current law. Access to the network programming would be limited to subscribers who lawfully may receive it. Satellite broadcast subscribers who live close enough to receive local network signals over-the-air would continue to be banned from receiving distant network signals via satellite.
Vince Garlock, an aide with the House Courts and Intellectual Property Subcommittee, said, "We wanted to mark the bill up this week to allow time for negotiation of certain issues during the August break," Garlock said. The break began last Friday (8/7) and ends Sept. 8. "We are hoping to develop a consensus about the base text of the bill," he added.
The Senate already has passed a bill that would extend the delay in imposing the big hike in copyright fees until March 31, 1999. That bill, S. 1422, backed by Sen. John McCain (R-Ariz.), does not include the provisions added to the House bill last Tuesday. If the House passes the Judiciary Committee's amended bill intact, a conference committee would be formed to hammer out a compromise.
...Revised Bill Fails To Address Murky Rules About Offering Local Channels Via Satellite
Andrew Wright, vice president of government and legal affairs with the Satellite Broadcasting and Communications Association (SBCA), said that extending the SHVA for five years to allow the use of copyrighted programming is inadequate. The provision also fails to clarify the festering problem of which satellite subscribers are eligible to receive local programming, particularly in light of recent court decisions in Miami and Raleigh, N.C., that found PrimeTime 24 illegally allowed satellite subscribers to obtain distant network signals (SN, Aug. 3).
"We look forward to putting together a final bill to reach the floor to address our problems," Wright said. One complication is that Congress must decide whether to completely deregulate cable rates by next March 31. Congress set that date when it passed the 1996 Telecommunications Act.
McCain, in remarks offered July 28 before the Commerce Committee that he chairs, said he plans to introduce a separate bill to enhance competition, rather than continuing regulation of the cable industry that has failed to curb runaway rate increases. "Cable rates have continued to soar, efforts to create viable competition to cable television have faltered and the Federal Communications Commission's attempts to regulate cable rates have failed," McCain said.
Cable television rates jumped an average of 10 percent in 1996 and 7.5 percent last year to far outstrip inflation, McCain said. Cable rates soared a whopping seven times the adjusted Consumer Price Index last month alone, he added.
The House needs to pass a bill that eliminates obstacles that prevent satellite television providers from competing fairly with cable TV operators, Wright said.
"Satellite is the competition for cable," Wright said. "This bill does not address the problems we need to resolve. This bill doesn't go far enough."
However, passage of the bill by the House Judiciary Committee was a "legislative step forward," Wright said.
The National Association of Broadcasters (NAB) was the big winner last week because all five of the amendments it supported were approved by the committee. The broadcasters were especially pleased that the "must-carry" provisions were added to the House bill.
"Local stations bring needed value to satellite companies providing full must-carry," said Edward Fritts, NAB's president and CEO.
Steven Berman, senior vice president of business affairs and general counsel with the National Rural Telecommunications Cooperative (NRTC), said, "I think it's clear evidence of the power and influence the NAB continues to have with Congress. The NAB's recent successes demonstrate that the entire satellite industry needs to be uniform in its approach on these important issues. The broadcasting industry is made up of corporations and individuals who have, in the past, received from the public free spectrum, and those same interests now are trying to successfully keep out any form of competition."
"Satellite service providers should not face the need to win another extension to continue using copyrighted programming when cable TV service providers have a permanent right to such programming," Berman added. "However, five years is better than no years. The copyright fee rollback is movement in the right direction, but it doesn't address the fundamental issue of why satellite pays more than cable for distant network signals and superstation programming."
Both the House and Senate bills would postpone the proposed copyright fee hike to 27 cents a month for each subscriber, up from the current 6 cents and approximately 17.5 cents for network affiliate signals and superstations, respectively. Cable television providers only pay an average of 2.7 cents for a distant network signal and 9.7 cents for a superstation every month for each subscriber.