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95–760 PDF 2015

S. HRG. 113–691 

REAUTHORIZATION OF THE SATELLITE 

TELEVISION EXTENSION AND LOCALISM ACT 

HEARING 

BEFORE THE

COMMITTEE ON THE JUDICIARY 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

WEDNESDAY, MARCH 26, 2014 

Serial No. J–113–54 

Printed for the use of the Committee on the Judiciary 

( 
(II) 

COMMITTEE ON THE JUDICIARY 

PATRICK J. LEAHY, Vermont, Chairman 

DIANNE FEINSTEIN, California 

CHUCK SCHUMER, New York 

DICK DURBIN, Illinois 

SHELDON WHITEHOUSE, Rhode Island 

AMY KLOBUCHAR, Minnesota 

AL FRANKEN, Minnesota 

CHRISTOPHER A. COONS, Delaware 

RICHARD BLUMENTHAL, Connecticut 

MAZIE HIRONO, Hawaii 

CHUCK GRASSLEY, Iowa, Ranking Member 

ORRIN G. HATCH, Utah 

JEFF SESSIONS, Alabama 

LINDSEY GRAHAM, South Carolina 

JOHN CORNYN, Texas 

MICHAEL S. LEE, Utah 

TED CRUZ, Texas 

JEFF FLAKE, Arizona 

KRISTINE LUCIUS, Chief Counsel and Staff Director 

KOLAN DAVIS, Republican Chief Staff Director 
(III) 

C O N T E N T S 

STATEMENTS OF COMMITTEE MEMBERS 

Page 

Leahy, Patrick J., a U.S. Senator from the State of Vermont ............................. 1 

prepared statement .......................................................................................... 22 

Grassley, Charles, a U.S. Senator from the State of Iowa, prepared statement 24 

WITNESSES 

Witness List ............................................................................................................. 21 

Minea, Alison A., Director and Senior Counsel of Regulatory Affairs, DISH 

Network L.L.C., Washington, DC ....................................................................... 3 

prepared statement .......................................................................................... 27 

Burdick, Marci, Senior Vice President of Broadcasting, Schurz Communications, Inc., Mishawaka, Indiana, on behalf of the National Association of 

Broadcasters ......................................................................................................... 4 

prepared statement .......................................................................................... 54 

Stutzman, Ellen, Director of Research and Public Policy, Writers Guild of 

America, West, Inc., Los Angeles, California ..................................................... 6 

Bergmayer, John, Senior Staff Attorney, Public Knowledge, Washington, DC .. 8 

prepared statement .......................................................................................... 67 

QUESTIONS 

Questions submitted by Senator Grassley for Alison A. Minea ........................... 74 

Questions submitted by Senator Grassley for Marci Burdick ............................. 76 

Questions submitted by Senator Grassley for Ellen Stutzman ........................... 77 

Questions submitted by Senator Klobuchar for Ellen Stutzman ......................... 78 

Questions submitted by Senator Grassley for John Bergmayer .......................... 79 

ANSWERS 

Responses of Alison A. Minea to questions submitted by Senator Grassley ...... 80 

Responses of Marci Burdick to questions submitted by Senator Grassley ......... 86 

Responses of Ellen Stutzman to questions submitted by Senator Klobuchar .... 92 

Responses of Ellen Stutzman to questions submitted by Senator Grassley ....... 96 

Responses of John Bergmayer to questions submitted by Senator Grassley ..... 100 

MISCELLANEOUS SUBMISSIONS FOR THE RECORD 

Motion Picture Association of America, Inc., March 26, 2014, statement for 

the record .............................................................................................................. 102 

(1) 

REAUTHORIZATION OF THE SATELLITE 

TELEVISION EXTENSION AND LOCALISM ACT 

WEDNESDAY, MARCH 26, 2014 

U.S. SENATE, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Committee met, pursuant to notice, at 10 a.m., in Room SD– 

226, Dirksen Senate Office Building, Hon. Patrick J. Leahy, Chairman of the Committee, presiding. 

Present: Senators Leahy, Klobuchar, Franken, Grassley, Hatch, 

and Flake. 

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. 

SENATOR FROM THE STATE OF VERMONT 

Chairman LEAHY. Good morning, everybody. The Senate is just 

opening, and I understand that the visiting chaplain today is from 

Iowa, so obviously Senator Grassley is there on the floor and will 

join us in a while. But my good friend, Senator Hatch, is here, the 

most senior Member of the Republican Party, and my friend, Amy 

Klobuchar. 

You know, it does not seem possible, except for those of you in 

the industry, but five years ago, television broadcasters turned off 

their analog signals. They went to digital. It is a different type of 

business and thus a dramatic improvement. But even then, we did 

not even start to imagine how the video market has changed. With 

online platforms like Netflix and Amazon and others, you can 

watch entire seasons of television shows on demand. They have 

also been doing a lot of original programming. 

We have had very rapid innovation like this over the years, from 

the cable industry in the 1970s to the satellite industry in the 

1980s. New challenges, new opportunities, but it has been almost 

30 years since we passed the Satellite Home Viewer Act to address 

the challenges of it. Now we have the most recent iteration of that 

law: the Satellite Television Extension and Localism Act, or 

STELA. STELA grants the satellite industry a compulsory copyright license to retransmit distant broadcast television content to consumers who are unable to receive a signal over the air. I am not 

telling you anything you do not know, but I am doing this because 

we stream these online and those who are following us online. And 

this license is going to expire at the end of the year. Actually, it 

was, for many years, the only way the satellite industry could provide broadcast television content to consumers. But broadcast television is most valuable when it is appropriately tailored to local 

markets and provides local news, weather, and sports that consumers want to see. We worked in 1999 to create a new, perma-
2 

nent license to allow for the retransmission of local content by satellite carriers into local markets. And I think that has helped to 

strengthen the local focus of American broadcasting, having this 

local television content and satellites. 

It has put two major, nationwide distribution platforms on an 

equal footing with the cable industry. DISH Network and 

DIRECTV give people more choice, particularly in rural areas like 

Vermont where cable is not always available. Even though I live 

seven miles from our State capital, from the Statehouse itself, I am 

on a dirt road where my nearest neighbor is half a mile away. So 

that gives you some idea of why there is no cable television there. 

And because it is on the side of a mountain, there is very little 

over-the-air television. 

But when I am home, I like to be able to see the local news and 

know what is going on throughout the State of Vermont. That is 

why I have worked to ensure that every single satellite subscriber 

in the State has access to local news and weather, as I do as a satellite subscriber. 

In 2010, we extended STELA’s distant signal license for another 

five years. We updated all three of the compulsory copyright licenses for the digital era. We made changes to reduce reliance on 

the distant signal license. 

Now, I recognize that not everyone sees a need for us to reauthorize this license. Compulsory copyright licenses inherently restrict the rights of content holders to negotiate on market-based 

terms. And retransmissions of out-of-market broadcast stations dilute the value of local stations. And I share some of these concerns. 

I look forward to a time when we can let this license lapse because 

virtually all consumers are being served by local stations. 

From what I hear around the country, we are not at that moment yet. I will move forward with bipartisan legislation to reauthorize STELA, but that is why we are having input here today. 

And I will work closely with Senator Grassley and Chairman 

Rockefeller and our counterparts in the House. 

I have had the chance to work both as Chairman and as Ranking 

Member with Senator Hatch, Senator Sessions, and Senator Specter on satellite reauthorizations. And as I see Senator Grassley arriving, I will hush up and turn it over to him. Otherwise, I will just 

put his statement in the record. 

OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S. 

SENATOR FROM THE STATE OF IOWA 

Senator GRASSLEY. I had already decided I was going to put it 

in the record, so I think we will go ahead, if that is okay with you. 

Chairman LEAHY. Okay. It will be in the record. 

Senator GRASSLEY. Thank you very much. 

[The prepared statement of Senator Grassley appears as a submission for the record.] 

Chairman LEAHY. Okay. We will start with Alison Minea, the director and senior counsel of regulatory affairs at DISH Network. 

She is responsible for the company’s advocacy before the FCC on 

spectrum, media, and satellite issues. She joined DISH in February 

2010. She received her bachelor’s degree from Bryn Mawr College 
3 

and then went out to Colorado and got her law degree from the 

University of Colorado. 

Please go ahead. 

STATEMENT OF ALISON A. MINEA, DIRECTOR AND SENIOR 

COUNSEL OF REGULATORY AFFAIRS, DISH NETWORK L.L.C., 

WASHINGTON, DC 

Ms. MINEA. Good morning. Chairman Leahy, Ranking Member 

Grassley, and Members of the Committee, I appreciate the opportunity to testify today. My name is Alison Minea. I am the director 

and senior counsel of regulatory affairs for DISH Network, the Nation’s third largest pay-TV provider. 

Should STELA be reauthorized? Yes, of course. If not, over 1.5 

million customers, mostly in rural areas, will lose one or more of 

the Big Four network channels. But just extending the Act for another five years is not enough. A so-called clean reauthorization of 

the satellite home viewer law would ignore the satellite home viewer’s number one problem: the increasing threat of blackouts. 

The last few times that Congress took up STELA, it was more 

than a clean reauthorization. In 2009, to benefit consumers, it confronted the challenge of how to get local broadcast stations carried 

by satellite in all 210 markets. I am proud to say that, as a result, 

DISH Network is the only provider of local television service in all 

210 markets. 

With this year’s STELA reauthorization, there is once again a 

challenge to be met. We believe that Congress should take this opportunity to fix the escalating problem of local channel blackouts 

during retransmission consent disputes. There were 12 blackouts in 

2010, and more than 10 times as many in 2013, a record-breaking 

127. 

We suggest two possible legislative solutions to end blackouts 

and ensure that consumers have continuous access to network programming from the pay-TV provider of their choice. 

First, during a retransmission consent impasse, a mandatory 

standstill should be in place to ensure that the broadcast signal 

stays up. If the parties are unable to agree upon terms, they should 

proceed to so-called baseball arbitration, where a neutral arbitrator 

chosen by the parties evaluates each party’s best offer and selects 

the one that most accurately reflects a fair market price. In all 

cases, the final rate would apply retroactively, ensuring that the 

broadcaster is fairly compensated. Most important, the consumer 

would remain unharmed. 

Second, a more limited solution would allow pay-TV providers to 

import a distant network station when the local network affiliate 

withholds its signal during a retransmission consent dispute. This 

solution would still leave consumers without access to certain local 

programming, like local news, sports, and weather, but it would at 

least provide network programming content. 

The thing is that the television landscape has changed dramatically since the Cable Act of 1992 established the current system of 

retransmission consent. In those early days, the broadcaster negotiated with a single cable company that was likely the only payTV provider in the same market. Today cable operators no longer 

enjoy local monopolies, and broadcasters can now pit pay-TV com-
4 

petitors against one another, all to the consumers’ detriment. This 

is not a free market. 

Meanwhile, mom-and-pop local broadcasters continue to disappear, as broadcaster conglomeration accelerates. 2013 alone saw 

three large broadcaster mergers. The remaining separately owed 

broadcasters increasingly use sidecar agreements that further solidify their monopoly power. As a result, pay-TV providers are frequently dealing with one entity coordinating retransmission negotiations for many separate broadcasters in the same local market. 

Not surprisingly, these market developments have led to a dramatic increase in blackouts as the broadcasters leverage the market imbalance into higher prices. Fortunately Congress can do 

something about it. 

On behalf of DISH’s 22,000 employees and more than 14 million 

subscribers across the Nation, I strongly encourage the Committee 

to seize this opportunity and update the law to reflect marketplace 

realities and better protect consumers. 

Thank you, and I look forward to answering any questions you 

may have. 

[The prepared statement of Ms. Minea appears as a submission 

for the record.] 

Chairman LEAHY. Thank you. And also thank you for being so 

clear on the position you are in on this. 

Ms. Burdick, it is nice to see you again. 

Marci Burdick is senior vice president for Schurz Communications, supervises three cable companies, eight television stations, 

and 13 radio stations. She has been in her current role since 2003. 

She is president of the Television Board of the National Association 

of Broadcasters, serves on the South Bend Rotary Club, and, of 

course, the Museum Studebaker, which is most appropriate in 

South Bend. And, of course, you are no stranger to Capitol Hill, so 

good to have you here. 

STATEMENT OF MARCI BURDICK, SENIOR VICE PRESIDENT 

OF BROADCASTING, SCHURZ COMMUNICATIONS, INC., 

MISHAWAKA, INDIANA, ON BEHALF OF THE NATIONAL ASSOCIATION OF BROADCASTERS 

Ms. BURDICK. Thank you, Chairman Leahy, Ranking Member 

Grassley, and Members of the Committee. Good morning. I am 

Marci Burdick. I am senior vice president of the Electronic Division 

for Schurz Communications, a mom-and-pop broadcaster. We own 

eight television stations in six States. We have operating partnerships with two others. And we own three cable companies and 13 

radio stations. I am testifying today on behalf of the National Association of Broadcasters, where I am the TV Board Chair, and our 

more than 1,300 free, local, over-the-air television station members. 

NAB’s position on the STELA reauthorization is simple: We ask 

that the Committee take a hard look at whether the distant signal 

license continues to benefit consumers. The distant signal license 

exists for the benefit of satellite companies, and it was enacted in 

a time where technology did not exist for satellite to offer local 

broadcast TV stations to its subscribers. If you conclude that the 

reauthorization of this satellite bill is warranted, NAB will support 

that effort. But any reauthorization should be narrow and not a ve-
5 

hicle for additional reforms that expand the scope of the license or 

undermine broadcasters’ ability to serve our local communities. 

In 1988, 26 years ago, CDs outsold vinyl records for the first 

time, ‘‘Rain Man’’ was at the top of the U.S. box office, and the Dow 

Jones Industrial Average was trading at just over 2,000 points. 

Also, 26 years ago, Congress enacted the first satellite television 

authorization, the Satellite Home Viewer Act, as a means to help 

spur competition for home video delivery against incumbent cable 

monopolies. Now, two and a half decades later, it is clear that this 

Committee’s work was a resounding success as the satellite companies have evolved into the country’s second and third largest payTV providers. How times have changed. 

The original 1988 Satellite Home Viewer Act enabled satellite 

carriers to retransmit the signals of distant television network stations to satellite owners. This is commonly referred to as ‘‘the Section 119 license,’’ and it is the expiring provision of STELA that is 

before the Committee today. 

At the time it was enacted, the distant signal license was needed 

to provide certain unserved households with network programming 

because satellite companies were unable to provide local broadcasters. The distant signal license served an important purpose in 

1988, when the back-yard satellite industry was just getting started, and it served its purpose again when DISH and DIRECTV first 

launched their small-receiver services in the 1990s. But in 2014, 

when DISH and DIRECTV have achieved a size and scope that 

makes them dominant market leaders, the distant signal license 

has become a vestige of a bygone era, a time before fiber optics, 

compression technology, and digital. 

Congress anticipated that satellite technology would evolve, 

which is why each of the satellite laws has included a five-year 

sunset. Today over 98 percent of all U.S. TV households can view 

their local network affiliates by satellite. Further, as DISH has 

demonstrated, there are no longer technical reasons preventing any 

market from receiving their local TV stations. And no public policy 

justifies treating a satellite subscriber in a local-into-local market 

as an unserved household eligible to receive distant network signals. 

Let us be clear. Any viewer served by a distant signal is deprived 

of the benefits of locally focused service. A viewer in Vermont or 

Iowa does not benefit from service from a Denver ABC affiliate instead of his or her local WVNY or KCRG. 

Local TV stations deliver high-quality local needs, weather, and 

emergency updates to all Americans. This is exactly as Congress 

intended. This local service is one that our viewers, your constituents, continue to rely on and one we take great pride in continuing 

to improve every day. Broadcasters are continuously looking for 

ways to enhance newscasts, upgrade weather and emergency services, and provide accurate, efficient, and speedy coverage of breaking news events and their aftermath. No other medium provides 

the depth of coverage we do for locally focused events paired with 

the most watched entertainment programming on prime-time TV. 

In conclusion, if this Committee decides to once again reauthorize the distant signal license, NAB will support that effort. But 

with that support, we ask you to take a hard look at whether this 
6 

license continues to serve consumers and urge you to reject calls 

from satellite providers to expand the scope of the compulsory Section 119 license in order to give them a leg up in market-based retransmission consent negotiations. Moreover, we ask that you reject any attempt to add wholly unrelated or controversial provisions to a STELA bill. 

Thank you for inviting me here today, and I look forward to your 

questions. 

[The prepared statement of Ms. Burdick appears as a submission 

for the record.] 

Chairman LEAHY. Well, thank you very much, Ms. Burdick, and 

it is nice to see you again. 

Ms. BURDICK. Thank you. 

Chairman LEAHY. Our next witness is Ellen Stutzman. She is 

the director of research and public policy for the Writers Guild of 

America, West. In her role with the Writers Guild, she coordinates 

the development of its public policy agenda. She received her bachelor’s from Cornell and then crossed the country to get her MBA 

from the University of California in Los Angeles. 

Ms. Stutzman, we are glad to have you here. Please go ahead. 

STATEMENT OF ELLEN STUTZMAN, DIRECTOR OF RESEARCH 

AND PUBLIC POLICY, WRITERS GUILD OF AMERICA, WEST, 

INC., LOS ANGELES, CALIFORNIA 

Ms. STUTZMAN. Thank you. Good morning, Chairman Leahy, 

Senator Grassley, and Members of the Committee. My name is 

Ellen Stutzman. I am the director of research and public policy for 

the Writers Guild of America, West. Thank you for the opportunity 

to testify. 

The Guild is a labor organization representing more than 8,000 

professional writers of feature film, TV series, local news, and original video programming now available through services like Netflix 

and Amazon. We support reauthorizing STELA because we want 

broadcast content to be as widely available as possible. A clean reauthorization will preserve access for subscribers while still protecting localism. 

Because there has been much discussion about using this process 

to weaken retransmission in favor of MVPDs, I will focus my comments on why we support the existing rules. 

We do so because we want broadcast television to remain a 

healthy source. Broadcasters also air the most original and highestrated content. Last season, 96 of the top 100 most-watched programs were on broadcast television. As such, the broadcast networks are responsible for a great deal of the must-have programming that makes an MVPD service attractive. And of key interest 

to our members and other entertainment workers, broadcast employment standards are the best in the industry. 

Broadcasters continue to produce content in a time of increased 

competition from cable networks and online video providers. Retransmission allows broadcasters to diversify revenue and adapt to 

a media landscape where they no longer account for all of television 

viewing. 

The existing rules are necessary because four MVPDs control 

two-thirds of the market. DIRECTV and DISH are the second and 
7 

third largest distributors and account for one-third of all MVPD 

customers. And the proposed Comcast-Time Warner merger, which 

we oppose, would combine the first and fourth largest MVPDs. 

Concentration can be even greater at a local level, where a single 

distributor can account for the majority of subscribers. Retransmission rules help balance the power between broadcasters and 

MVPDs. 

The Guild is concerned with the rising costs of cable, but we cannot deny that television today offers so much more than even a few 

years ago. We have transitioned from a world where networks controlled the schedule to where content is available whenever and 

wherever consumers want. Retransmission negotiations include the 

on-demand rights that make this possible—rights that provide tremendous value to MVPDs. 

It is appropriate that broadcasters be fairly compensated for this 

contribution. Retransmission fees are a small portion of the cable 

bill, and we do not think weakening the rules is the answer to rising prices. 

Many of the proposed changes would simply give more power to 

distributors. Mandatory interim carriage in the event of a dispute 

would significantly reduce an MVPD’s incentive to engage in goodfaith negotiations. Similarly, allowing distant-signal importation 

during a dispute would sacrifice localism in favor of enhancing 

MVPD power. 

It is unfortunate when viewers lose access to the content our 

members create because of a blackout, but we recognize that such 

action is sometimes necessary. The loss of viewers and revenue presented by a signal interruption remains a sufficient incentive for a 

broadcaster to make a fair deal. 

In sum, this is not the appropriate vehicle to begin making selective changes to industry regulations. The Guild would, however, 

welcome a broader review of the video marketplace. We think 

changes that include requiring networks to air independent content, expanding the definition of an MVPD to promote more virtual 

competitors, and changing content bundling practices would do 

more to produce a vibrant, competitive market. 

Simply put, there are better ways to increase competition and 

address rising costs to consumers than unfairly and asymmetrically 

gutting the negotiating rights of broadcasters. 

Thank you for your attention, and I look forward to your questions. 

[The prepared statement of Ms. Stutzman was not available at 

the time of publication.] 

Chairman LEAHY. Well, thank you very much. 

And our last witness is John Bergmayer, senior staff attorney at 

the Washington, DC-based Public Knowledge. He specializes in 

telecommunications and intellectual property issues. He is a member of the DC and Colorado Bar Associations, received his bachelor’s degree from Colorado State University, and his law degree 

from the University of Colorado Law School. 

Mr. Bergmayer, please go ahead, sir. 
8 

STATEMENT OF JOHN BERGMAYER, SENIOR STAFF 

ATTORNEY, PUBLIC KNOWLEDGE, WASHINGTON, DC 

Mr. BERGMAYER. Chairman Leahy, Ranking Member Grassley, 

and Members of the Committee, thank you for the opportunity to 

appear here today. 

First, I have a few remarks on issues specific to STELA, and 

then I will present a few broader ideas that will make the video 

marketplace more competitive and affordable. 

Congress must reauthorize STELA. This law ensures that satellite television companies can continue to retransmit broadcast 

stations to their customers, and it is an important building block 

of video competition. The success of satellite should be a lesson for 

policymakers about the importance of fostering new models of video 

competition. Congress should not put the video competition we 

have already achieved at risk by failing to ensure that satellite 

viewers can continue to access popular programming without interruption. 

Given the importance of STELA to maintaining competition in 

the video marketplace, Congress should reauthorize STELA indefinitely and without sunset. There is no reason for Congress to create artificial crises every few years. However, if Congress does 

choose to reauthorize STELA for only a few years, it should tie its 

expiration to the expiration of other video marketplace rules, such 

as distant signal rules, basic tier buy-through, and similar provisions. This would ensure that it is not just the satellite industry 

that has to come to Congress hat in hand on such a regular basis. 

STELA reauthorization also presents the opportunity to give customers more reliable and relevant programming with two simple 

reforms. First, Congress can protect consumers from the increased 

rate of programming blackouts due to retransmission consent negotiations. Retransmission consent negotiations have been compared 

to a fight between two elephants where the consumers are the 

grass. Ideally a gradual phase-out of the retransmission consent regime, coupled with the elimination of compulsory copyright licenses, would simplify the system and eliminate statutory middlemen. If Congress maintains the current system of retransmission 

consent, it should act to prevent consumers from being trampled by 

the elephants. 

It should direct the FCC to adopt rules prohibiting conduct 

deemed to violate the good-faith negotiation provision and clarifying existing FCC statutory authority to mandate arbitration and 

interim carriage. The consumer benefit from these reforms is twofold: 

First, they would prevent blackouts, ensuring that TV viewers 

are not held hostage as a negotiating tactic between media companies. 

Second, they would slow down the rate of increases in carriage 

fees paid by multichannel video programming distributors, or 

MVPDs, to broadcasters, in turn slowing the rate at which consumer pay-TV bills increase. 

A second simple reform that can be tied to STELA would be to 

allow the FCC to modify designated market areas for broadcast TV 

carriage on satellite, as it already can with cable. In previous authorizations, Congress has commissioned studies of this so-called 
9 

orphan county issue. This time, Congress should empower the FCC 

to make these corrections. 

The success of satellite TV points to the best long-term approach 

for improving the video marketplace: promoting competition from 

new providers. Technology has dramatically changed the possibilities for how the public can watch television, and yet many Americans are locked into a television business model that limits competition and choice. Most of the most popular programming is not 

available except through traditional bundled subscription TV services, and these grow more expensive year after year. 

An outdated regulatory structure and a trend toward industry 

consolidation, such as the Comcast-Time Warner Cable merger, 

which we likewise oppose, allows incumbents to protect themselves 

and fend off new competition. It is time to revamp that structure. 

A video marketplace that served the public interest would align the 

interests of viewers, creators, and distributors and not set one 

against the other. 

Online video can provide much needed competition in the video 

marketplace. Congress and the FCC can help it in three easy ways: 

First, they can clear away some of the outdated rules that hold 

back competition and keep prices high. I have mentioned one example in the dysfunctional retransmission consent system. The basic 

tier buy-through rule that prohibits broadcast stations from being 

offered a la carte by cable companies is another. The Congress 

should be cautious not to weaken parts of the statute that benefit 

consumers, such as Section 629 of the Communications Act, which 

promotes video device competition. 

Second, Congress and the FCC can extend the successful policies 

such as program access to online providers. These policies are designed to mitigate market power by large video providers. They 

should not be repealed until effective competition develops. 

Third, Congress and the FCC can protect online openness. Online 

video needs an open Internet to thrive. In addition to supporting 

the FCC and protecting the open interest, Congress should encourage the FCC to examine whether discriminatory data caps hold 

back online video competition and whether large ISPs are using 

network interconnection agreements, sometimes called ‘‘peering 

agreements,’’ anticompetitively. This will increase competition, 

meaning lower prices, better services, and more control for consumers. 

Thank you, and I look forward to your questions. 

[The prepared statement of Mr. Bergmayer appears as a submission for the record.] 

Chairman LEAHY. Well, thank you very much. Let me start off 

with just a couple questions. Then we will go back and forth here. 

And maybe, Ms. Stutzman, this is best for you. 

Whenever we are considering satellite reauthorization, we talk 

about the importance of competition in the video marketplace. The 

original Satellite Home Viewer Act, I think we can all agree, the 

satellite industry was in its infancy. Now the industry has grown 

into a legitimate competitor to cable. 

How important is a competitive video market to writers and creators of content? 
10 

Ms. STUTZMAN. Thank you for your question. It is incredibly important. We currently do not think that the MVPD market is competitive enough. In most markets, consumers can choose between 

a cable provider and two satellite providers, and we would like to 

see more competition. But what this amounts to is these companies 

are powerful gatekeepers, and they can decide what content 

reaches consumers, and that has a negative impact on the stories 

that are told, on diverse and independent content, and ultimately, 

you know, what our members do. So a competitive marketplace is 

incredibly important. 

Chairman LEAHY. Ms. Burdick, I want to talk about rural areas 

and what might happen in smaller areas, and I know you are 

aware of that. I am not being parochial, but to use an example, a 

State like Vermont could easily be dominated by major television 

markets like New York. How does the system put in place by 

STELA actually help us to have local content? 

Ms. BURDICK. Well, I think—and you will remember this better 

than I because you were here—the Section 122 license, which requires and preserves localism, has been a wholesale success. DISH 

is now in every local market in the country. Direct could be. There 

is no technological barrier. So localism was definitely encouraged 

and preserved under the Section 122 license, which is now permanent. 

Our concern is with the distant signal, and as you rightly point 

out, when a Los Angeles or a New York television station is imported into Vermont, that localism is undermined when local television stations are not seen. And when local television stations are 

not seen, their advertisers are not seen. Ninety percent of our revenue comes from advertising, so it diminishes our economics. 

Chairman LEAHY. Thank you. And, Ms. Minea, we have heard in 

other hearings that there are between 1 and 1.5 million customers 

relying on the distant signal license for broadcast television programming. DISH’s testimony today is that it numbers over 1.5 million. Do you know what the exact number or as exact as you can 

get? 

Ms. MINEA. Thank you for your question, Chairman Leahy. I believe the number is approximately 1.56. DISH and DIRECTV, in an 

effort to answer this question, confidentially submitted some subscriber numbers to the Satellite Industry Association, which then 

compiled them together to arrive at that number. 

Chairman LEAHY. But the number of subscribers served with distant signals is lower than when we enacted the local license in 

1999. Is that correct? 

Ms. MINEA. Over time, DISH, as you know, has been expanding 

its local-into-local service so that the need for the distant signal license has diminished, and I could not agree with Ms. Burdick more 

that localism is important and, wherever possible, you know, we 

want to provide people with their local broadcast stations. 

Nonetheless, the Section 119 distant signal license still serves a 

very important role for those approximately 1.5 million consumers 

for, among other things, short markets, which are markets that are 

typically smaller and rural markets that do not have a local network affiliate. And the distant signal license allows DISH to import 
11 

a replacement network station to fill out a complement of Big Four 

stations for those consumers. 

Chairman LEAHY. Some of them are RVs and trucks and things 

like that. Is that correct? 

Ms. MINEA. Yes, Chairman Leahy, the distant signal license also 

allows a satellite carrier to provide distant network stations to subscribers in recreational vehicles and commercial trucks, subject to 

some paperwork and verification requirements. 

Chairman LEAHY. We are talking about what we are going to do 

and what House Energy and what Commerce is going to do. Let 

me ask you this: Would DISH oppose a reauthorization of STELA 

that does not address broader issues related to the video market, 

such as retransmission consent? 

Ms. MINEA. Thanks for your question, and it is an important one. 

We absolutely want the Section 119 license reauthorized, but we 

believe that more must be done and can be done. As I noted in my 

testimony, blackouts of local network station signals during disputes are increasing. There were 12 in 2010 and 127 in 2013. And 

consumers cannot wait. Blackouts need to be dealt with now, and 

we believe that the STELA reauthorization is extremely the right 

opportunity to address this issue. 

Chairman LEAHY. Thank you. I am sure there are going to be 

some more questions on this to all of you. As you know, it is going 

to be a major part of the debate. 

Senator Grassley. 

Senator GRASSLEY. I am going to ask each of you three questions, 

and I would like a short answer because, quite frankly, the idea is 

to summarize some things you have already said in your statement. 

The Copyright Office has suggested in their recommendations of 

Section 302 report phasing out three statutory licenses of Title 17. 

Now, I have already heard from you about Section 119, so the question of the other three: In your view, is the Section 119 statutory 

license still necessary in today’s marketplace? We will start with 

you, Ms. Burdick. 

Ms. BURDICK. Is Section 119 still—— 

Senator GRASSLEY. Yes. 

Ms. BURDICK. We question whether Section 119 is still necessary 

when local broadcasters can be seen in all television markets of the 

country. 

Senator GRASSLEY. Ms. Stutzman. 

Ms. STUTZMAN. At this point, we are in favor of reauthorizing it 

because we want the content to be available where it is not. 

Senator GRASSLEY. Okay. 

Mr. BERGMAYER. Senator, in general, we are in favor of phasing 

out compulsory licenses. It just has to be done very cautiously, according to a timetable, and we need to avoid the situation where 

an MVPD might be double paying because it does not have a compulsory license for the copyright and yet still has to negotiate for 

retransmission consent. And that applies to all the cable and satellite compulsory licenses. 

Senator GRASSLEY. Okay. Then for all of you, starting with Alison, if Congress were not to reauthorize STELA, how would this 

affect consumers? What sort of disruptions, if any, are likely to 
12 

occur if the three statutory licenses were repealed? And if that happened, what are the benefits or harms with respect to letting the 

law expire? 

Ms. MINEA. That is a great question. If I could just clarify, are 

you asking specifically with regard to Section 119 or with respect 

to other copyright—— 

Senator GRASSLEY. Now it is more general. So if I misinterpreted 

your answer to Senator Leahy and you want to answer what I previously had asked, I would like to hear your view on the question 

of whether or not Section 119 is still necessary in today’s marketplace. 

Ms. MINEA. Thank you, and I share your concern for making sure 

that consumers are not disrupted as laws are updated. 

We do believe that the Section 119 license continues to play an 

important role, and statutory licensing in general, such as the 122 

license, I think continues to be necessary to ensure that consumers 

get local broadcast stations. 

There may be possibilities for overhauling the entire system and 

taking away the statutory licenses, but that would be a very complex process. There is a thicket of government regulations that govern the system, so we would definitely urge caution in looking at 

whether or not the statutory licenses could be eliminated. 

Senator GRASSLEY. Ms. Burdick, on my second question. 

Ms. BURDICK. I would agree with both ends of the table that 

eliminating all copyright would be exceptionally complex. I worry 

as a local broadcaster—I try to envision a day where I would have 

to go out and negotiate all of those rights as a local broadcaster. 

But since Section 119 is the only provision that is sunsetting and 

the distant signal importation, I would say that in terms of the 

need for that, only DISH and Direct know, of that 1.5 million number that we have all heard, how many of those customers are 

grandfathered and actually could be receiving local-into-local. So 

we really do not know. Only they know. 

Senator GRASSLEY. So disruption would be the answer, the effect 

on the consumer that I was kind of concentrating my question on. 

Ms. BURDICK. I think the disruptions would be minimal and 

maybe even less than the 1.5 million. 

Senator GRASSLEY. Okay. Ms. Stutzman. 

Ms. STUTZMAN. Thank you. We think the statutory licenses could 

be retired, and there might possibly be a marketplace solution to 

negotiating the copyright. And we are not asking for that at this 

time, but certainly if retransmission consent rule changes were 

contemplated, we think that might be an appropriate consideration. 

Thank you. 

Senator GRASSLEY. Mr. Bergmayer, do you have something to 

add? 

Mr. BERGMAYER. Sure. Even if you accept the premise that the 

number of customers that would be disrupted is relatively small, 

I would just look to where those customers are located. They would 

be predominantly rural and perhaps low-income customers that I 

think Congress should take extra care to protect. 

Senator GRASSLEY. This will have to be my last question. Time 

is running out. Do you have a position on the length of STELA reauthorization if Congress decides to extend it? 
13 

Ms. MINEA. Senator Grassley, ideally we think that the Section 

119 license should be reauthorized permanently. Failing that, we 

would like it reauthorized for as long as possible. 

Senator GRASSLEY. Ms. Burdick. 

Ms. BURDICK. We would absolutely disagree that a distant signal 

law should be made permanent, and there is less of a need every 

single day. If this Committee thinks it needs to be reauthorized for 

five years, we would support that. 

Chairman LEAHY. Okay. 

Ms. STUTZMAN. We would also support a five-year reauthorization. 

Senator GRASSLEY. Mr. Bergmayer. 

Mr. BERGMAYER. I think one approach that Congress could take 

is tie its expiration to expiration of provisions from around the industry so different people’s oxes get gored. 

Senator GRASSLEY. I am done with my presentation today, but I 

will have questions for each of you, and quite a few questions for 

DISH, if you would be willing to answer them in writing. 

Ms. MINEA. Certainly. Thank you. 

[The questions of Senator Grassley appear as submissions for the 

record.] 

Senator GRASSLEY. Thank you. 

Chairman LEAHY. Senator Klobuchar. 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. I always like to follow a statement about goring oxes when I am going 

to ask questions. 

[Laughter.] 

Senator KLOBUCHAR. Thank you for holding this important hearing. Satellite service is really important, especially in the rural 

part of Senator Franken’s and my State. It is the only way that 

many of the 650,000 satellite subscribers in our State can get access to video services. 

I think we have seen subsequent updates to this law that give 

an additional boost to competition by ensuring satellite competitors 

could offer local broadcast channels to their customers. I can tell 

you that local broadcasting is an important part of life in America. 

In our State it is the way that many people actually get updates 

on floods, problems that occur in the local areas, tornadoes. It has 

been actually not just key for our local programming and bringing 

people together; it has also been key for some of our emergencies 

that we have had in our State over the years. 

So I want to start here with you, Ms. Minea. Is reauthorization 

of this Act—I think you have made the case—still necessary? And 

what changes would you like to see? 

Ms. MINEA. Thanks for your question, Senator Klobuchar. So, 

yes, the Section 119 license continues to be necessary. Minnesota 

actually has a short market. Mankato, Minnesota, which does not 

have an ABC or an NBC affiliate, so one example of something that 

would go away if 119 were not reauthorized is our inability to import an ABC and an NBC from the Twin Cities market into Mankato. 

More broadly, as I said, we believe that the reauthorization of 

STELA is an important opportunity to fix the problem of blackouts. 

Consumers cannot wait for reforms that may come in the future. 
14 

This is now the time to stop this now. So as I said in my testimony, 

we propose a standstill and baseball-style arbitration as our first 

choice to deal with the problem of blackouts now. 

Senator KLOBUCHAR. Okay. Ms. Burdick, one of our goals here 

was to promote localism. Do you think that it has done its job? And 

what more can be done to get at Congress’ intent to promote localism? 

Ms. BURDICK. I think anything you can do to incentivize all providers to be in all local markets would be a positive thing. As DISH 

has demonstrated, they are, in fact, in all 210 markets. If that can 

be incentivized some other way, that would be a good thing, providing choice for consumers and competition. 

Senator KLOBUCHAR. As you all know, this Committee is soon 

going to be holding a hearing on the merger between Comcast and 

Time Warner Cable. This combination has the potential for profound impact on the competitive landscape. 

Ms. Minea, what is DISH’s view on the merger? And are there 

any concerns from your standpoint that the Committee should be 

aware of as we consider the impact the merger will have? 

Ms. MINEA. Senator Klobuchar, we have read those news reports, 

and as far as we know, there are not any applications before the 

FCC. At this point we just have not had an opportunity to develop 

a position, so I am not able to comment on it. 

Senator KLOBUCHAR. Okay. Does anyone else want to comment 

on it? I just thought you would. I do not know why I thought you 

would. 

[Laughter.] 

Senator KLOBUCHAR. You want to gore another ox, Mr. 

Bergmayer, please. 

Mr. BERGMAYER. Yes, I believe that the Comcast-Time Warner 

merger would be disastrous for programmers, for independent creators, and for TV viewers. It would raise prices. It would create a 

single gatekeeper for programming in broadband of almost unprecedented power, in addition to the vertical integration harms which 

just happened due to Comcast’s unfortunate acquisition of 

NBCUniversal. So in that hearing, we are looking forward to hearing your views on the dangers of this merger. 

Senator KLOBUCHAR. Back to some satellite. Minnesota, as we 

know—I see the satellite dishes all over our State, especially in the 

rural areas. There is certainly a higher percentage of rural homes 

that have satellite. Would that be true, Ms. Minea? 

Ms. MINEA. Senator Klobuchar, I want to make sure I understand your question. Are you asking specifically about rural customers in Minnesota relative to other States? 

Senator KLOBUCHAR. Yes—no, no. I am asking about rural areas 

having more of them than in urban areas. 

Ms. MINEA. Of course. Yes, rural customers disproportionately 

depend upon satellite. That was true in the early days of satellite, 

and it continues to be true today. Indeed, that is why the expiration of the Section 119 license would have a disproportionately 

larger effect on rural subscribers to DISH and DIRECTV, because 

in many cases, it is rural subscribers who live in short markets and 

rural subscribers who live outside of the over-the-air footprint of 

broadcasters. 
15 

Senator KLOBUCHAR. Ms. Burdick, during the last STELA reauthorization—I feel that I have been here for not that long, but I 

was here for that, and I am also on the Commerce Committee, so 

I live and breathe STELA—there were concerns about the way that 

DMAs were defined for local broadcasters and the issue of orphan 

counties. This is an issue I spoke about during the Judiciary markup and in the Commerce Committee consideration of STELA five 

years ago. 

Can you talk about how DMAs are still important to local advertising and the economies and what the status is of that? 

Ms. BURDICK. As I mentioned earlier, 90 percent of our revenue 

comes from advertising, and the fact is that the DMAs were determined where the major population centers were concentrated. And 

so that is still extremely important to us. 

But as it relates to orphan counties, there are provisions currently available to solve many of those issues. We have been involved with several of them. And as an example, I live—my front 

yard is in Michigan. My back yard is in Indiana. So while I vote 

in Congressman Upton’s district, I am served by South Bend television. The MVPD in my area reserves a channel for unduplicated 

local programming, so the Michigan broadcaster with its local news 

and information can be on the air while the South Bend CBS affiliate is protected with its syndicated and network exclusive programming. So there are solutions currently available to solve many 

of those issues. 

Senator KLOBUCHAR. Okay. Thank you very much, and I will put 

some questions on the record for you, Ms. Stutzman. Thank you. 

[The questions of Senator Klobuchar appear as submissions for 

the record.] 

Chairman LEAHY. Thank you very much. 

Senator Hatch. 

Senator HATCH. Well, I want to thank you all for coming today. 

Thank you, Mr. Chairman. My thanks to all of you for coming here 

today to help us learn about some of these outstanding issues, both 

those that are directly before us in deciding whether to reauthorize 

the Satellite and Television Extension and Localism Act of 2010, or 

STELA, as well as some of the broader reforms that have been proposed. 

Now, let me just ask you this, Ms. Burdick—and we welcome you 

especially. I understand that studios own the content and should 

be able to control how it is being used, but we have to be realistic 

about trends toward streaming television online. 

During a dispute between a cable or satellite provider and a 

broadcaster, can online viewers who specifically choose not to have 

satellite or cable, can they also be affected? 

Ms. BURDICK. So there are many ways in which content is provided online, and as a local broadcaster, I can control my content 

online in a different way than I can offer network or syndicated 

programming online. You know, I think you are probably speaking 

of the CBS issue with Time Warner recently, and I think what was 

lost in all of that is that those agreements went back to 2008, before the Internet was ubiquitous. And the outcome of that was that 

a holistic agreement was reached in which Internet and video 
16 

rights were resolved. And so the retransmission consent discussion 

is far more robust than just video rights. 

Senator HATCH. All right. Ms. Minea, let me ask you this question: As you know, blackouts are related to the issue of retransmission consent, and I am trying to understand whether there is 

a need for reform here or not. On the one hand, a DIRECTV executive testified in June that, ‘‘Between 2010 and 2015, DIRECTV’s retransmission consent costs will increase 600 percent per subscriber.’’ 

On the other hand, Ms. Burdick has testified that, ‘‘While only 

two cents of every dollar of cable video revenue goes to retransmission consent, nearly 20 cents goes to cable programming fees.’’ 

Now, Ms. Minea, I realize that I quoted a figure from DIRECTV, 

but assuming that DISH is facing similar increases, when we talk 

about a number like 600 percent, what are we talking about in dollars and cents? And how much money per subscriber are we talking 

about here? 

Ms. MINEA. Thanks for your question, Senator Hatch. The particular breakdown of the numbers is not something that we have 

released for confidentiality reasons. What I can tell you is that satellite TV is part of a very competitive market for pay-TV providers. 

We have telephone companies, we have cable companies, we have 

DIRECTV against whom we compete, so we have to fight like crazy 

to keep our costs down. Programming costs generally are our biggest cost center, and when we see broadcast stations who are asking for 400-percent increases for our contract renewal, it really 

hurts. And at some point we have to start passing along some of 

those costs to our subscribers. We do not believe it is sustainable, 

and that is why we think that reform is needed. 

Senator HATCH. Ms. Burdick, could you comment on some of 

these increases? 

Ms. BURDICK. Thank you. Math was never my strong suit, but 

when you start at zero, it is pretty easy to get to 400 percent pretty 

darn quickly. 

I am negotiating against a company represented by Ms. Minea 

to my right that said to me at the outset of the negotiation, ‘‘I do 

not care if you are dark because I churn more customers in a year 

than your company represents.’’ And you know what? That is the 

truth. 

Broadcasters are never off. We always are on the air, local television broadcasters. We may have a contractual dispute from time 

to time with DISH or DIRECT, but the only thing preventing a 

customer from moving to another provider is their late fee and termination requirements that one customer told me—because I take 

all those calls from customers. He said, ‘‘It will cost me $429 to 

switch.’’ The local broadcasters are always on. 

Senator HATCH. Well, let me just ask you this: While retransmission consent may be beyond the scope of our reauthorization of 

STELA, I would like to focus on a proposal regarding joint sales 

agreements. Could you tell us how joint sales agreements are helpful for broadcasters? 

Ms. BURDICK. Sure. Let me speak from our own experience. We 

have three. We have one in Wichita, Kansas, where we own the 

dominant CBS station, and we helped Entravision enter the mar-
17 

ket faster with a shared service and a joint sales arrangement. The 

net effect of that is we are providing the only local news broadcasting in Spanish in the State of Kansas, something they could 

not afford on their own. We helped them lower their costs. 

The other side of the equation is in Augusta, Georgia, where I 

had an NBC affiliate, the only one that our company owned that 

was not a leader in its market, and for 12 years we—after launching local news, we sustained losses every year for 12 years. And 

when the recession hit and the remainder of our company could not 

prop it up, we had two choices: Go out of the local news business 

because that is where the bulk of our expense is, or enter into an 

agreement where we could share costs with other broadcasters. 

And we did that with Media General, preserving a local broadcaster in the market. 

Senator HATCH. Well, thank you. My time is up, but let me just 

give you a chance, Ms. Minea, to respond. Why do cable and satellite producers see them as being anticompetitive? 

Ms. MINEA. Thanks so much for your question, Senator Hatch, 

and if you would indulge me, I just want to respond briefly to what 

Ms. Burdick said. 

The way that we see it is that blackouts are 100 percent the 

fault of the broadcaster. We never, ever want to take the signal 

down. That is why we are asking for a standstill. Yes, it may take 

time for us to hammer out the deal, but consumers should never 

lose their signal. And in some cases, the signal may be free over 

the air, but consumers should not have to be put in the position 

of choosing which provider to switch to. They may have chosen 

DISH because we have the lowest price and the best technology. 

They should not even have to be in a position where they have to 

switch. Blackouts should never happen. 

And as to your other question, Senator Hatch, in terms of these 

joint sales agreements, there are lots of different sorts of sidecar 

agreements. An instance where two broadcasters need to share a 

news helicopter to save costs, we are not concerned about that. We 

can absolutely see why that might make sense. 

Our concern is really just focused on those agreements under 

which separately owned broadcasters get together and negotiate 

jointly for retransmission consent. And, again, this all ties back to 

blackouts. Three stations negotiate jointly. That means if we cannot reach a deal by the deadline, that is three stations that are 

blacked out rather than just one. So, again, it is an even greater 

impact to the customer than if we were negotiating with just one 

at a time. Thank you. 

Senator HATCH. Thanks, Mr. Chairman. 

Chairman LEAHY. Senator Franken. 

Senator FRANKEN. Thank you, Mr. Chairman, for calling this 

hearing, and thank you all for being here. This hearing marks the 

beginning of a process that will result in more competition for consumers, I hope. Congress has passing satellite TV laws since the 

1980s, but the cable industry remains the dominant force in the 

marketplace. I believe that the cable industry could become even 

more powerful if Comcast is allowed to acquire Time Warner Cable. 

I strongly oppose this acquisition, and it is a good reminder that 

consumers need more competition from satellite TV. 
18 

I know that the satellite companies, the cable industry, and the 

broadcasters all have their priorities in this bill, but one thing is 

clear: that the best interests of the consumers must guide this 

process. If Congress does not act before this law expires, many people could wake up on January 1st without access to local stations 

that they rely on for news and programming. And Senator 

Klobuchar is absolutely right. They are very useful in emergencies, 

and we have had a lot of school closings this winter. 

As I said, consumers have to be our focus, and that is why I am 

so concerned about this Comcast-Time Warner Cable acquisition. I 

believe it is a terrible deal for consumers. 

Ms. Stutzman, I am a member of the Writers Guild, so I am very 

sympathetic to anything you say. 

[Laughter.] 

Senator FRANKEN. You recently submitted a filing urging the 

FCC to reject this deal. Can you explain why you did this and what 

the acquisition could mean for both satellite and cable customers? 

Ms. STUTZMAN. Thank you for your question, Senator. We share 

your concern and appreciate how vocal you have been about the 

merger. 

We think the FCC should reject the deal because it is not in the 

public interest, it is anticompetitive, and that is a bad deal for content creators as well as consumers. 

Comcast is already the largest cable and Internet service provider, and allowing them to get bigger by acquiring eight or 10 million customers will make them too powerful of a content gatekeeper. 

On the cable side, they can use this to cut affiliate fees paid to 

broadcast and cable networks, which reduces the money available 

to invest in content, which harms viewers. The company will also 

control at least one-third of the broadband Internet market, and 

this is where all of the new video competition is coming from. And 

we fear that they will use their power in that market to steer the 

direction away from new providers like Amazon and Netflix to 

favor their own content, which obviously limits what consumers 

will be able to see. 

And the Internet, you know, the broadband Internet market is 

even less competitive than the cable market. Most people really 

have a choice of one or two Internet providers when you are talking 

about high-speed Internet that could be used to watch video. 

And so we just think this will limit choice. It will probably increase prices, and it will harm the content that consumers can see. 

Senator FRANKEN. And, Mr. Bergmayer, you talked about peering 

agreements, and I think when we talk about an open Internet, we 

want to be talking about that. 

This is about blackouts again. There is a basic dispute here, I 

guess, and so I will—Ms. Minea, you have your position, and, Ms. 

Stutzman, you have yours. And anybody can weigh in on this. Can 

anybody here get to the nub of the difference? And how can we 

avoid blackouts for consumers? But what is the disagreement here? 

Go ahead. 

Mr. BERGMAYER. Senator, I think everyone at this table agrees 

that broadcasters ought to be paid a fair value for their content. 

I think the disagreement is about whether basically pulling the sig-
19 

nal during the course of a contract dispute is a legitimate negotiating tactic or not. I happen to think that it is not, especially because the way that TV works, you have these must-see events that 

happen periodically, and I do not think it is a coincidence that very 

often these disputes are timed to happen near those events, which 

I think leads to an unfair situation. But ultimately I am not saying 

that I think that cable or satellite ought to get access to this content for free. 

Senator FRANKEN. I know that Ms. Minea talked about a baseball sort of arbitration, a way of resolving this. Ms. Stutzman, Ms. 

Burdick, do you have opinions on that? 

Ms. BURDICK. Yes, arbitration will not resolve blackouts any 

more quickly. It will lengthen the process, and it will add expense 

to local broadcasters like me. I do not have a phalanx of attorneys 

who negotiate these deals 24/7, like the bigger MVPDs. 

I would like to correct one thing John said. Both parties in a contract negotiation determine its length of time. So to suggest that 

broadcasters are somehow pulling a signal before a must-see event 

is not correct. Both parties agree to the length of terms, and they 

both know what that is. 

Ms. MINEA. May I briefly respond? 

Senator FRANKEN. I would say yes. 

[Laughter.] 

Chairman LEAHY. I will say yes, too, but votes have started, and 

we are going to have to wrap up all of this in seven minutes. 

Senator FRANKEN. Really? 

Chairman LEAHY. But go ahead. 

Senator FRANKEN. Okay. Well, I actually—— 

Chairman LEAHY. And we have to have Senator Flake have a 

chance, but go ahead and respond. 

Ms. MINEA. I will be very brief. We do not want blackouts, and 

the reason we have proposed baseball-style arbitration in conjunction with the standstill is there will be no blackout. Consumers will 

not be impacted. They will not lose their programming, and the arbitration will produce a fair market prices, because both sides will 

have an incentive to submit their best offer, and the arbitrator can 

choose. But in the meantime, consumers are not harmed. 

Ms. STUTZMAN. But content continues to be available over the 

air, and I really think that needs to be promoted to consumers because most households can receive broadcast programming using a 

digital antenna. And so it remains there rather than giving more 

power to an MVPD in a negotiation. 

Chairman LEAHY. Thank you. 

Senator FRANKEN. Thank you, Mr. Chairman. 

Chairman LEAHY. Senator Flake. 

Senator FLAKE. Thank you. I apologize if I am plowing old 

ground here, and I apologize for not being here. But if you can just 

tell me—and let us start with Ms. Minea—the structure that we 

have, the retransmission structure, started in 1992 with the goal 

of maintaining or enhancing local content, do you feel that it has 

achieved that goal, the structure that we have? 

Ms. MINEA. Thanks for the question, Senator Flake. Yes, in the 

sense that local broadcast stations are more available now on DISH 

Network than they ever have been before. We offer local broadcast 
20 

stations in all 210 markets. So the current statutory framework 

has allowed us to do that, and all I would say is that, unfortunately, because of the increased competition among pay-TV providers, meanwhile there is only one NBC affiliate, for example, per 

market, it is not a level playing field. That is what is causing the 

blackouts. 

So we believe in localism, we believe it is working, and we just 

think that STELA could do more to protect consumers. 

Senator FLAKE. Okay. Ms. Burdick. 

Ms. BURDICK. So it was 1992 that broadcasters were allowed to 

negotiate for their signal. It was really not until 2006 that any 

broadcaster was paid, and that really was a benefit of satellite increasing its presence in each of the markets so there was a competitor. 

Retransmission consent is working, although while broadcast television accounts for about 40 percent of the viewing, we get about 

six to seven percent of the revenue. So we still have a ways to go 

in trying to negotiate a fair value for the product we bring, investing back into local communities with local news, weather, and 

sports. 

Senator FLAKE. All right. Ms. Stutzman. 

Ms. STUTZMAN. I think retransmission consent negotiations are 

very important because broadcast stations operate in a television 

landscape where there are hundreds of cable channels that consumers can choose from, and those cable networks have a dual revenue stream. And so this is really broadcast adapting to that 

model, diversifying their revenue sources, and keeping broadcast 

healthy. So we think it is very important. 

Senator FLAKE. All right. 

Mr. BERGMAYER. And I think a lot of aspects of the 1992 Cable 

Act were successful. However, I think that the general approach 

that Congress took in 1976 of first creating the cable compulsory 

license and then, fast-forward, creating a new right that is sort of 

layered on top of that, so we have the simultaneous existence of 

copyrights and then a broadcaster has a signal right and that is 

where the negotiation takes place, is just a little too complicated. 

That is why we have advocated simplifying the system. 

Senator FLAKE. Thank you, Mr. Chairman. 

Chairman LEAHY. If there are no further questions, then I would 

thank you all. But I know that some will have questions for the 

record, and I would ask you to return them as quickly as you can. 

Thank you all very much for being here. 

[Whereupon, at 11:06 a.m., the Committee was adjourned.] 
21 

A P P E N D I X 
22 

PREPARED STATEMENT OF CHAIRMAN PATRICK LEAHY
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PREPARED STATEMENT OF RANKING MEMBER CHUCK GRASSLEY
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PREPARED STATEMENT OF ALISON A. MINEA
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PREPARED STATEMENT OF MARCI BURDICK
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PREPARED STATEMENT OF JOHN BERGMAYER
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QUESTIONS SUBMITTED BY SENATOR GRASSLEY FOR ALISON A. MINEA
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QUESTIONS SUBMITTED BY SENATOR GRASSLEY FOR MARCI BURDICK
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QUESTIONS SUBMITTED BY SENATOR GRASSLEY FOR ELLEN STUTZMAN
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QUESTIONS SUBMITTED BY SENATOR KLOBUCHAR FOR ELLEN STUTZMAN
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QUESTIONS SUBMITTED BY SENATOR GRASSLEY FOR JOHN BERGMAYER
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RESPONSES OF ALISON A. MINEA TO QUESTIONS SUBMITTED BY SENATOR GRASSLEY
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RESPONSES OF MARCI BURDICK TO QUESTIONS SUBMITTED BY SENATOR GRASSLEY
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RESPONSES OF ELLEN STUTZMAN TO QUESTIONS SUBMITTED BY SENATOR KLOBUCHAR
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RESPONSES OF ELLEN STUTZMAN TO QUESTIONS SUBMITTED BY SENATOR GRASSLEY
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RESPONSES OF JOHN BERGMAYER TO QUESTIONS SUBMITTED BY SENATOR GRASSLEY
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MISCELLANEOUS SUBMISSIONS FOR THE RECORD
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Æ