By the end of the hearing, there was no consensus on anything.
R. Stanton Dodge, at Dish Network, told the Senate committee that broadcasters’ challenge of Dish's Hopper DVR service was an attack on consumers.
Broadcasters, cable operators and consumer advocates took their opposing positions this week at video competition hearings held on Capitol Hill by the Senate Commerce Committee. At the end of the hearing, there was no consensus on anything.
Prior to the start of the hearing, Sen. Jay Rockefeller (D-WV), the chairman of the committee, asked the Government Accounting Office (GAO) to examine the impact of TV station joint sales agreements (JSAs) and shared service agreements (SSAs) on consumers.
Small cable operators have complained that broadcasters inflate retransmission rates when TV stations coordinate negotiations. Rockefeller noted that this increases cable subscription fees for consumers and bypasses local ownership caps.
Because of the “serious questions” raised about the impact of these coordination arrangements, Rockefeller asked the GAO to take a closer look at that coordination. He also wanted to know how broadcasters use the agreements; how many such arrangements there are; whether they make programming blackouts more likely or raise costs of services; and do they result in more local programming or simply duplication on multiple outlets.
What would prevent the FCC from requiring copies of all JSAs and SSAs and other evidence of coordination be placed in a public file, and should be some aspects of them be regulated, Rockefeller asked.
Years ago, Rockefeller noted, the FCC imposed limits on radio JSAs, requiring that any station that sold over 15 percent of the ad time on another would be deemed to have an attributable ownership interest in that station. The FCC has tentatively concluded the same limitation should apply to TV JSAs.
R. Stanton Dodge, Executive Vice President, General Counsel and Secretary at Dish Network, told the committee that the broadcasters’ challenge of its Hopper DVR service is an attack on consumers. The device does not kill ads, he said, but allows subscribers to skip them.
“The networks are accusing millions of subscribers of being copyright infringers just because they want to skip commercials more easily or watch TV on iPads in their bedroom,” Dodge said.
Dodge called for retransmission reform, saying disputes are pitting broadcasters against consumers. He described them as one-sided contests with government-aided broadcasters on one side, and the “losers” being “the consumers who get their programming pulled from them by the broadcasters and see their bills on the rise.”
Sen. John McCain (R-AZ) last week introduced legislation that would establish a la carte programming on cable systems. Basic cable costs, McCain said, have increased an average of 6.1 percent annually since 1995.
McCain’s bill would also would require the FCC to reclaim the license and spectrum of a broadcaster who tried to move its programming to cable, as was threatened at NAB by some broadcasters in their dispute with Aereo.
“Some broadcasters have floated the idea of becoming a cable channel, thus stopping the broadcast of their channels over the air,” Stanton said. “If the broadcasters choose to do that, they should give back all of their government-granted broadcast spectrum.”
Sen. Mark Warner (D-VA) said he was troubled by talk at NAB by broadcasters who said they might move to cable if Aereo wins its case. He danced around with the idea of endorsing McCain’s provision to take spectrum from broadcasters who exit the airwaves with programming.
Michael Powell, president of the National Cable and Telecommunications Association (NCTA) and former chairman of the FCC, noted that McCain’s proposed legislation probably would not result in lower cable bills.
Niche and new channels would have a harder time getting viewers and advertisers, Powell said, forcing cable operators to charge more for the programming. Ten a la carte channels might cost as much as 100 channels in a cable package today, Powell said.
He also pointed out that one of the values of the TV experience is stumbling on a program you didn’t know you wanted to watch, or finding networks that meet changing viewing interests, both of which would be harder to do in an a la carte world.
Gordon Smith, head of the NAB, targeted all of the broadcasters’ perceived enemies while promoting the standard NAB theme that broadcasters provide free, local, live television.
He acused Aereo of piracy for not paying broadcasters a copyright fee; Dish, for ad-skipping technology; retransmission, which he claimed adds only pennies to a cable bill; and claimed broadcasters pay for their public spectrum each day by providing free news, weather and emergency information.
Smith said no broadcasters have come forward to support the spectrum auction, which “will present a challenge” for NAB members, who insist the spectrum is essential for their programming. “Our spectrum comes with public service obligations that only we can deliver,” Smith said.
While Aereo wasn’t represented at the hearing, it was defended by John Bergmayer, senior attorney for Public Knowledge, a public advocacy group. He noted that Aereo had already succeeded in two federal courts in lawsuits brought by broadcasters. Those courts found that Aereo was essentially a remote TV antenna rental service that owed broadcasters nothing, he noted.
Bergmayer also backed McCain’s a la carte legislation.
“A lot of people today feel like they’re getting ripped off,” he said.