Freedom Line Blog

On December 31, 2014,the Satellite Television Extension and Localism Act (STELA) is set to expire.  The House Energy and Commerce Subcommittee on Communications and Technology is in the process of reauthorizing the law, and that provides a critical opportunity for pro-market reform by modernizing anachronistic regulations like retransmission consent agreements and must-carry provisions of the 1992 Cable Act.

So what is STELA, and why should conservatives and libertarians care?

Well, when the Cable Act became law in 1992, the prevailing concern was that cable operators might somehow employ monopoly power to block local broadcast stations in their home areas.  Accordingly, the Act tipped the scales in favor of broadcasters by granting them the right to guaranteed carriage or the right to compel cable operators to pay stations for consent to retransmit their broadcasts to local subscribers.  STELA, enacted in 2010 and due to expire at the end of this year, essentially maintained many of those outdated rules.

Today, more than two decades later, the television marketplace is much more competitive and no longer resembles the 1992 state of affairs.  Consumers now possess innumerable options in channel selection and the means to access them, from cable to fiber optics to online to multiple satellite and cable providers.  Yet despite that evolution, the government-imposed advantage for broadcasters remains.  Multi-channel video programming distributors (MVPDs) like cable, satellite and fiber providers are prohibited under current outdated regulations from disconnecting service during sweeps week, but broadcasters remain free to do the same thing during such events as the World Series in which the local team is playing.  Thus, broadcasters maintain government-created negotiating power through the retransmission consent rules, and are guaranteed a place on cable companies’ basic tier.  That tipping of scales has resulted in consumers suffering service disruptions and cost increases.

Fortunately, the opportunity has arrived for Congress to do something about it, and allow greater negotiating balance and a more even playing field.   As part of STELA reauthorization, Congress can at the very least jettison the prohibition against MVPDs disconnecting service during sweeps week if necessitated by a negotiating impasse with intransigent broadcasters, as well as broadcasters’ government-granted right to placement on cable companies’ basic tier, which it appears ready to do.

The federal government simply shouldn’t be playing favorites or tipping the scales in an industry as dynamic as this, and STELA reauthorization provides the perfect opportunity to correct those existing defects.