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House authorizes death of CableCard

Wed, 07/23/2014 - 4:52pm
Brian Santo

The U.S. House of Representatives has reauthorized the Satellite Television Extension and Localism Act (STELA), which mainly pertains to satellite providers’ carriage of broadcast stations. The cable industry had hoped to tack on provisions to reform retransmission consent rules, but the House declined. As a sop to cable, however – and not an insignificant one at that – the House included language to end separable security requirements. In other words, the House has agreed to let the loathed CableCard die.

The bill also prohibits local broadcast affiliates from banding together to negotiate retransmission consent agreements. Smaller cable operators especially have been complaining that that sort of collusion has been putting them at a significant disadvantage for years.  

The House legislation must now get Senate approval.

Ordinarily, the House and Senate will simultaneously prepare and consider similar legislation, and then work to reconcile the two versions. The Hill reports that the Senate has not prepared its own STELA Reauthorization bill, in part because Sen. Jay Rockefeller wants to address retrans reform. Rockefeller vowed to get legislation out of Senate Committee by September.

The Representatives shepherding the House version – Fred Upton and Greg Walden – deliberately left retrans reform out of their STELA Reauthorization bill, insisting that they’d rather reconsider the issue when Congress reconsiders the entire Communications Act at some later date.

The two bodies seem to be playing a game of chicken. STELA elapses at the end of 2014 and must be reauthorized by then. If the Senate includes retrans reform in its version of the bill, little if any time would be left for what would then be a contentious reconciliation process.

The Democratic-led Senate has to decide whether it trusts the Republican-led House to revisit the Communications Act. That might be difficult for three reasons: 1) Democrats have been proposing revisiting the Communications Act for two years, and the GOP has refused, 2) the Senate might flip to Republican control in November, and the prospects of a unified Republican Congress fiddling with retrans rules are dim; 3) the distrust both parties have for each other has been getting steadily worse for decades.  

In this context, it’s hard to see the elimination of separable security (aka, the integration ban) as anything more than a bargaining chip tossed in by House Republicans, meant to make their refusal to take up retrans reform more palatable to the cable industry and the Senate. On the other hand, it would take a considerable act of political pique to rescind the provision now that it’s out there.

The cable industry response to all this was carefully worded: The NCTA said, “By eliminating the FCC's Integration Ban, the legislation removes an unnecessary technology mandate that imposes higher costs and energy use on cable customers who lease set-top boxes while offering no benefits. The legislation also appropriately protects consumers from anticompetitive harm by preventing separately owned broadcast stations in local markets from jointly coordinating or participating in negotiations for retransmission consent.  

 “We look forward to working with the Senate after the August recess to act on this important legislation."

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