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Reauthorization of the Satellite Television
Extension and Localism Act (STELA)

Lennard G. Kruger
Specialist in Science and Technology Policy
Angele A. Gilroy
Specialist in Telecommunications Policy
July 2, 2014
Congressional Research Service
7-5700
www.crs.gov
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Summary
There are three primary ways for a household to receive broadcast television signals: by using an
individual antenna that receives broadcast signals directly over-the-air from a television station;
by subscribing to a cable television service that brings a wire into the house that carries the
retransmitted signals of broadcast stations; or by subscribing to a satellite television service that
puts a dish on the roof that receives the retransmitted signals of broadcast stations. With the rise
of cable and satellite television in the 1980s and 1990s, Congress and the Federal
Communications Commission (FCC) constructed a regulatory framework for the retransmission
of broadcast television signals by both cable and satellite television operators.
Through a series of laws, beginning with the 1988 Satellite Home Viewer Act (SHVA) and most
recently amended by the Satellite Television Extension and Localism Act (STELA), Congress has
constructed a regulatory framework for the satellite retransmission of broadcast television. There
are specific provisions in STELA that will expire on December 31, 2014. These provisions allow
satellite television operators to provide distant network broadcast signals to some of their
subscribers who may not be able to receive one or more of their local broadcast network affiliates
either over-the-air or via their satellite television systems. Given that approximately 1.5 million
satellite television households would likely lose distant network broadcast signals if STELA were
to expire, the 113th Congress has begun the process of considering reauthorization legislation. In
the House, jurisdiction over STELA is held by the Committee on Energy and Commerce and the
Committee on the Judiciary. In the Senate, jurisdiction over STELA resides with the Committee
on Commerce, Science, and Transportation and the Committee on the Judiciary.
On May 8, 2014, the House Energy and Commerce Committee approved H.R. 4572, the STELA
Reauthorization Act of 2014. H.R. 4572 would provide a five-year extension of expiring
provisions, limit joint retransmission consent negotiations in conjunction with limitations on FCC
action on broadcaster sharing agreements, eliminate the “sweeps” week prohibition on signal
changes, and repeal the FCC’s integration ban on cable set-top boxes. On June 26, 2014, the
Senate Judiciary Committee approved S. 2454, the Satellite Television Access Reauthorization
Act of 2014, which would extend until December 31, 2019 the provisions in the Copyright Act
that allow direct broadcast satellite (DBS) operators to retransmit distant broadcast television
signals.
Meanwhile, a STELA-related issue of continuing interest to Congress is “orphan counties” in
which satellite subscribers may not be receiving signals from in-state broadcast stations and may
not be receiving news, sports, and public affairs programming of interest in their state. H.R. 4572
would require the FCC to prepare a report on designated market areas. H.R. 4635, the Orphan
County Telecommunications Rights Act of 2014, seeks to provide for greater access to in-state
television broadcast programming by allowing orphan counties to petition the FCC to be included
in the local television market of an adjacent in-state television station. S. 2375, the Colorado
News, Emergency, Weather, and Sports Act of 2014, seeks to facilitate the delivery of in-state but
out-of-market television broadcast stations to two orphan counties in Colorado (Montezuma and
La Plata counties).
With the possibility of approximately 1.5 million satellite TV households losing their distant
network signals on December 31, 2014, the 113th Congress may address the reauthorization of
STELA and whether expiring provisions of the Copyright Act and the Communications Act
should be extended. An issue for Congress is whether these provisions should be extended (and if
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so, for how long), whether other changes to STELA are necessary, and to what extent the STELA
reauthorization should serve as a vehicle to address broader video policy issues such as
retransmission consent and carriage rules. Ultimately, Congress will likely determine whether to
address these broader video issues as part of the STELA reauthorization, or alternatively, as part
of a comprehensive update of the Communications Act of 1934 that may be considered by the
114th Congress.
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Contents
Background ...................................................................................................................................... 1
Satellite Retransmission of Broadcast Signals ................................................................................. 2
Expiration of STELA: What Would Be the Consequences? ............................................................ 5
STELA Reauthorization Legislation in the 113th Congress ............................................................. 6
House ......................................................................................................................................... 7
House Energy and Commerce Committee Bill, H.R. 4572 ................................................. 7
Senate ...................................................................................................................................... 12
Senate Judiciary Committee Bill, S. 2454 ......................................................................... 13
Orphan Counties ............................................................................................................................ 13
Orphan County Legislation During STELA Consideration in the 111th Congress .................. 14
Orphan County Legislation in the 113th Congress ................................................................... 15
Concluding Observations ............................................................................................................... 16

Tables
Table 1. How Consumers Receive Their Television Signals ........................................................... 1
Table 2. History of Satellite Television Law .................................................................................... 3

Contacts
Author Contact Information........................................................................................................... 16

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Background
There are three primary ways for a household to receive broadcast television signals: by using an
individual antenna that receives broadcast signals directly over-the-air from a television station;
by subscribing to a cable television service (from either a cable or telephone company) that brings
a wire into the house that carries the retransmitted signals of broadcast stations; or by subscribing
to a satellite television service that puts a dish on the roof that receives the retransmitted signals
of broadcast stations. In 2013, there were an estimated 118 million television households and 101
million multichannel video programming distributor (MPVD) subscribers1 in the United States.2
Table 1 shows the percentages of households receiving television signals by the various available
technologies.
Table 1. How Consumers Receive Their Television Signals
Percentage of Television
Percentage of MVPD

Householdsa
Subscribers
Cable (Comcast, Time Warner
46.5% 55%
Cable, Cox, others)
Direct broadcast satellite (DIRECTV
29% 34%
and DISH Network)
Telco television (primarily Verizon
9.6% 11%
FIOS and AT&T U-verse)
Broadcast only (over-the-air)
9.6%b N/A
Source: Percentages derived from SNL Kagan data, U.S. Multichannel Industry Benchmarks.
a. Does not include what Nielsen refers to as “zero-TV” households, which include those who view video
content on a computer, Internet-enabled TV, smartphone, or tablet.
b. Percentage derived from Nielsen Company, Free to Move Between Screens: The Cross-Platform Report, March
2013, p. 16.
Currently there are two direct broadcast satellite (DBS) companies—DIRECTV and DISH
Network—offering video service to most of the land area and population of the United States.
According to the Federal Communications Commission (FCC), as of June 2012, DIRECTV had
approximately 19.9 million subscribers, while DISH Network had approximately 14.1 million
subscribers. With respect to the number of subscribers, DIRECTV is the second-largest MVPD in
the United States, while DISH Network is the third largest.3
With the rise of cable and satellite television in the 1980s and 1990s, Congress and the FCC
constructed a regulatory framework for the retransmission of broadcast television signals by both
cable and satellite television operators. The satellite and cable regulatory frameworks attempt to
balance a number of long-standing, but potentially conflicting, public policy goals—most notably,

1 MVPD subscribers are those households paying for either cable or satellite television service.
2 Nielsen Company, Free To Move Between Screens: The Cross-Platform Report, March 2013, p. 16.
3 FCC, Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Fifteenth
Report, released July 22, 2013, p. 51, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-13-
99A1.pdf.
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localism,4 competitive provision of video services, support for the creative process, and
preservation of free over-the-air broadcast television. They also attempt to balance the interests of
the satellite, cable, broadcast, and program content industries.
MVPD operators typically offer their customers broadcast channels (such as WJLA or WRC in
Washington, DC) as well as cable channels (such as ESPN or MTV). In order to provide their
customers with the entertainment, news, sports, and other programming on broadcast channels,
the MVPD must retransmit local and (in some cases) distant broadcast stations. Retransmission of
broadcast signals by satellite and cable operators is subject to two different legal requirements:
• The Communications Act of 1934 as amended, which specifies procedures and
rules for retransmission consent, the process of how MVPDs may or may not be
required to obtain the consent of the broadcaster to retransmit their signals. The
provisions addressing retransmission consent are administered by the FCC.
• The Copyright Act of 1976 as amended, which specifies procedures for licensing
the public performance of copyrighted materials on those signals. Cable and
satellite operators can take advantage of special no-royalty or low-royalty
copyright licenses created by Sections 111, 119, and 122 of the Copyright Act if
they meet certain requirements set out in those sections. These statutory licenses
allow cable and satellite operators to avoid negotiating with every copyright
holder of a broadcast program. The statutory provisions in the Copyright Act are
administered by the Copyright Office in the Library of Congress.
Satellite Retransmission of Broadcast Signals
Through a series of laws, beginning with the 1988 Satellite Home Viewer Act (SHVA) and most
recently amended by the Satellite Television Extension and Localism Act (STELA),5 Congress
has constructed a regulatory framework for the satellite retransmission of broadcast television.
Table 2 shows the progression of satellite television laws that govern satellite retransmission of
broadcast signals. The various provisions in these satellite acts created new sections or modified
existing sections in the Copyright Act and the Communications Act. Under current law, in order
to retransmit a broadcaster’s signals to its subscribers, a satellite operator, with certain exceptions,
must obtain a license from the copyright holders of the content contained in the broadcast for use
of that content, and also must obtain the consent of the broadcaster for retransmission of the
broadcast signal. The law specifies copyright license and retransmission requirements for each of
the various categories of broadcast television stations including network affiliated stations,
independent non-network distant stations, nationally distributed superstations,6 significantly

4 According to the FCC, “Broadcast radio and television are distinctly local media. They are licensed to local
communities, and the Federal Communications Commission (FCC) has long required broadcasters to serve the needs
and interests of the communities to which they are licensed. Congress has also required that the FCC assign broadcast
stations to communities around the country to assure widespread service, and the Commission has given priority to
affording local service as part of this requirement. Broadcast ‘localism’ encompasses these requirements.” Federal
Communications Commission, FCC Consumer Facts, “Broadcasting and Localism,” available at
http://transition.fcc.gov/localism/Localism_Fact_Sheet.pdf.
5 For an in-depth discussion of STELA, see CRS Report R41274, How the Satellite Television Extension and Localism
Act (STELA) Updated Copyright and Carriage Rules for the Retransmission of Broadcast Television Signals
, by
Charles B. Goldfarb.
6 The Communications Act identifies a class of “nationally distributed superstations” (47 U.S.C. §339(d)(2)) that is
(continued...)
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viewed stations, and noncommercial broadcast television stations. As such, the Copyright Act and
the Communications Act govern whether and how satellite television companies may provide
both local and distant signals to their subscribers.
Table 2. History of Satellite Television Law
Satellite TV Law
Year Enacted
Highlights
Satellite Home Viewer Act (SHVA,
1988
Established a statutory copyright license to al ow
P.L. 100-667); and
satellite carriers to provide broadcast

programming. Limited network broadcast
Satellite Home Viewer Act of 1994
programming to subscribers unserved by over-the-
(P.L. 103-369)
1994
air signals. Also permitted carriers to offer distant
“superstations” to subscribers.
Satellite Home Viewer Improvement
1999
Created a legal and regulatory framework
Act (SHVIA, P.L. 106-113)
permitting satellite carriers to retransmit local
broadcast signals to subscribers (“local-into-local”
service).
Satellite Home Viewer Extension and
2004
Created framework for satellite carriage of
Reauthorization Act (SHVERA, P.L.
“significantly viewed” broadcast stations.
108-447)
Restricted satellite carriers from offering distant
signals to customers in a market where they are
also offering the local affiliate of the same network
(the “no distant where local” rule). Also modified
statute to account for various digital television
transition issues, imposed good faith bargaining
requirements for retransmission consent
negotiations, and provided for some exceptions to
the distant copyright license for certain areas of
the country.
Satellite Television Extension and
2010
Provided changes to the significantly viewed
Localism Act (P.L. 111-175)
provisions, modified digital television transition
provisions, addressed how multicast signals would
be treated, addressed “short” markets, and
required the FCC to provide a report on the
availability of in-state programming for orphan
counties.
Source: Excerpted by CRS from Testimony of Eloise Gore, Associate Bureau Chief, Enforcement Bureau,
Federal Communications Commission, before the House Subcommittee on Communications and Technology,
Committee on Energy and Commerce, Satellite Video 101 Hearing, February 13, 2013.
Local signals are the signals that local broadcasters provide over the air to households within the
local market of the subscriber (“local-into-local service”). The local market is defined by using
the Nielsen Media Research designated market areas (DMAs). Nielsen has constructed 210
DMAs by assigning each county in the United States to a specific DMA, based on the historical

(...continued)
limited to seven stations that were in operation prior to May 1, 1991. These are independent broadcast television
stations whose broadcast signals are picked up and redistributed by satellite to local cable television operators and to
satellite television operators all across the United States. These nationally distributed superstations in effect function
like a cable network rather than a local broadcast television station or a broadcast television network. The nationally
distributed superstations are WTBS, Atlanta; WOR and WPIX, New York; WSBK, Boston; WGN, Chicago; KTLA,
Los Angeles; and KTVT, Dallas. All of these nationally distributed superstations carry the games of professional sports
teams as well as other programming.
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(pre-cable and satellite) viewing patterns of the households in the DMA. Many of the households
that subscribe to satellite television service are in rural or remote areas that may not be able to
receive over-the-air local broadcast signals, thus relying on their satellite television service to
watch local broadcast channels that provide local news, weather, and sports. Under current law,
DBS operators are allowed, but not required, to provide local-into-local service. If they choose to
provide any local signal they must also carry the signals of all other full-power television
broadcast stations located within the local area that request carriage. However, if the local
broadcast station and satellite operator fail to reach a retransmission consent agreement, the
satellite operator may not include that station’s signal in its local-into-local offering.
Distant signals are broadcast signals imported by the DBS operator from outside a subscriber’s
local area. A satellite operator is allowed, but not required, to retransmit
• the signals of up to two distant stations affiliated with a network, to that subset of
subscribing households that are deemed “unserved” with respect to that network;
• the signals of significantly viewed7 stations to subscribers located in the markets
for which those stations qualify as significantly viewed; and
• the signals of distant non-network stations to all of its subscribers.
A household is considered “unserved” if it cannot receive the signals of a local network-affiliated
station because either
• the satellite operator does not offer local-into-local service in the local market
and the household is located too far from the transmitter to receive signals of a
certain quality over-the-air (using a rooftop antenna);
• the network does not have a local network-affiliated station in the household’s
local market (referred to as a “short” market); or
• the subscriber falls under a small number of grandfathered situations in which
subscribers who do have access to local-into-local service continue to be eligible
to receive distant signals from their satellite operator.
To retransmit the signals of a distant network station to unserved subscribers, a satellite operator
does not need to obtain the consent of that distant network station nor comply with the FCC’s
network non-duplication and syndicated exclusivity rules.8

7 “Significantly viewed” stations are located outside the local market in which the subscriber is located but have been
determined by the FCC to be viewed by a “significant” portion of those households in the local market that do not
subscribe to any multichannel video programming distributor (MVPD).
8 Broadcasters typically carry network and syndicated programming on their local television stations but must purchase
distribution rights from broadcast networks and syndicators who own or hold the rights to that programming. These
network/affiliate or syndication agreements generally include provisions which grant the local station exclusive rights
to the programming within the station’s local service area. Network non-duplication refers to the local commercial or
non-commercial broadcast television station’s contractual rights to be the exclusive distributor of network
programming within a specific geographic area. Syndicated exclusivity applies to exclusive contracts for syndicated
programming, rather than network programming, and applies only to commercial television stations. In general a local
broadcast station that has obtained such rights may request that an MVPD delete duplicative network or syndicated
programming that is brought in to the station’s geographic area where it holds such exclusivity rights.
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Expiration of STELA:
What Would Be the Consequences?

There are provisions in STELA that will expire on December 31, 2014. These provisions allow
DBS operators (DIRECTV and DISH Network) to provide distant network broadcast signals to
some of their subscribers. Unless reauthorized by Congress, various provisions in the
Communications Act and the Copyright Act will expire, including
• Section 325(b)(2)(C) of the Communications Act, which allows a satellite
operator to retransmit the signals of distant network stations, without first
obtaining the retransmission consent of those distant stations, to those
subscribing households that cannot receive the signals of local broadcast
television network affiliates. If this provision expires, a satellite operator will
have to negotiate compensation terms with those distant network stations whose
signals it retransmits to those “unserved” subscribers.
• Section 325(b)(3)(C)(ii) of the Communications Act, which prohibits a television
broadcast station that provides retransmission consent from engaging in
exclusive contracts for carriage or failing to negotiate in good faith. Section
325(b)(3)(C)(iii) also prohibits an MVPD from failing to negotiate in good faith
for retransmission consent. If these provisions expire, a broadcaster or an MVPD
could choose to employ a “take it or leave it” strategy rather than to negotiate
retransmission consent terms in good faith, increasing the risk of an impasse that
results in subscribers losing access to the broadcast station’s programming.
• Section 119 of the Copyright Act, which provides satellite operators that
retransmit certain “distant” (non-local) broadcast television signals to their
subscribers with an efficient, relatively low cost way to license the copyrighted
works contained in those broadcast signals (a statutory per subscriber, per signal,
per month royalty fee). If the law expires, it will be very difficult (and perhaps
impossible) for satellite operators to offer the programming of broadcast
networks to that subset of subscribers who currently cannot receive that
programming from local broadcast stations that are affiliated with those
networks. It will also be difficult for satellite operators to offer their subscribers
the signals of distant stations that are not affiliated with broadcast networks,
including both “superstations” and other non-network stations.
• The Copyright Act also grandfathers certain distant signal subscribers who retain
their eligibility to receive distant signals through December 31, 2014.9
According to the DBS industry, approximately 1.5 million households would lose their satellite-
provided distant broadcast signals if STELA were to expire.10 The following are the various

9 Testimony of Eloise Gore, Associate Bureau Chief, Enforcement Bureau, Federal Communications Commission,
before the House Subcommittee on Communications and Technology, Committee on Energy and Commerce, Satellite
Video 101 Hearing
, February 13, 2013, p. 4, available at http://docs.house.gov/meetings/IF/IF16/20130213/100256/
HHRG-113-IF16-Wstate-GoreE-20130213.pdf.
10 DIRECTV and DISH Network, “DIRECTV and DISH Applaud DRAFT Satellite Bill,” March 7, 2014, available at
http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/Hearings/CT/20140312/
20140307DIRECTV-DISH.pdf.
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situations where households are currently receiving distant broadcast network-affiliated signals
on their satellite television systems, and could thus lose access to those distant signals, if STELA
were to expire:
Households that receive neither over-the-air local broadcast signals nor DBS
local-into-local service. In the early days of satellite television, distant signals of
network affiliates in New York, Chicago, Denver, and Los Angeles provided the
only access to broadcast network programming for many subscribers. However,
since the inception of local-into-local service, the two satellite providers have
markedly increased their local market offerings. Specifically, DISH Network
offers local-into-local service into all 210 DMAs, while DIRECTV offers local-
into-local service in approximately 197 DMAs.11 Therefore, those DIRECTV
customers in DMAs without local-into-local service,12 and who are unserved by
over-the-air broadcast signals, are eligible to receive distant broadcast signals,
and would lose those signals if STELA is not reauthorized.
Households outside satellite spot beams. Spot beams are satellite signals that
cover a limited geographic area. In some local areas (DMAs), the satellite signal
delivering local-into-local service may not reach every household in that local
area. Those households outside the spot beam (and who are also unable to receive
over-the-air signals) are eligible to receive distant broadcast signals from their
satellite provider.
Commercial trucks and recreational vehicles. In situations where a satellite dish
is permanently affixed to a recreational vehicle or commercial truck, that
subscriber is deemed to be “unserved” and eligible to receive distant signals.
Grandfathered households. Previous Satellite Home Viewer Act reauthorizations
grandfathered some long-time satellite TV subscribers, who remain eligible to
receive distant signals.
Households in “short markets.” There remain some DMAs—referred to as “short
markets”—where not all broadcast networks are being carried by local
broadcasters. In this instance, satellite providers are allowed to import the distant
signal of broadcast stations affiliated with the missing network.
STELA Reauthorization Legislation in the
113th Congress

As discussed above, certain key provisions in STELA will expire on December 31, 2014. Given
that approximately 1.5 million satellite television households would likely lose distant network
broadcast signals if STELA were to expire, the 113th Congress has begun the process of
considering reauthorization legislation. Legislative approaches could range from enacting a

11 Testimony of William Lake, Bureau Chief, Media Bureau, FCC, before the Senate Committee on Commerce,
Science, and Transportation, April 1, 2014, p. 5, available at http://www.commerce.senate.gov/public/?a=Files.Serve&
File_id=c3acb52a-736c-4b2d-803d-129c08b28b17.
12Markets without local-into-local service from DIRECTV include Presque Isle ME; Alpena MI; Charlottesville VA;
Victoria TX; Ottumwa IA-Kirksville MO; San Angelo TX; Bowling Green KY; North Platte NE; Cheyenne WY-
Scottsbluff NE; Helena MT; Casper-Riverton WY; Grand Junction-Montrose CO; and Glendive MT. (Source: Ibid.)
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“clean” reauthorization (simply extending the expiring provisions in the Communications Act and
the Copyright Act), to amending and revising other provisions in the Communications Act and the
Copyright Act that govern retransmission consent and other video policy issues.
House
In the House, jurisdiction over STELA is held by the Committee on Energy and Commerce and
the Committee on the Judiciary. In the 113th Congress, the House Energy and Commerce
Committee held hearings on STELA on February 13, 2013,13 June 12, 2013,14 and March 12,
2014.15 The House Judiciary Committee held hearings on STELA on September 10, 201316 and
May 8, 2014.17
House Energy and Commerce Committee Bill, H.R. 4572
On March 6, 2014, the House Subcommittee on Communications and Technology released a
discussion draft of a STELA reauthorization bill.18 The draft would extend for five years the
expiring STELA provisions in the Communications Act. The draft bill also includes limitations on
joint retransmission consent negotiations in conjunction with limitations on FCC action on
broadcaster sharing agreements, elimination of the “sweeps” week prohibition on signal changes,
and elimination of the set-top box integration ban. The committee held a hearing on March 12,
2014, where witnesses from stakeholder groups discussed their views on the discussion draft
legislation.19 On March 24, 2014, the Subcommittee on Communications and Technology
approved the draft bill with amendments.
On May 8, 2014, the House Energy and Commerce Committee approved H.R. 4572, the STELA
Reauthorization Act of 2014. At the bill markup, the committee approved an amendment (offered
by Representative Luján and Representative Gardner) which requires the FCC to prepare a report
on designated market areas.
Extension of Authority
Section 2 of H.R. 4572 would extend until December 31, 2019, the provision in the
Communications Act (Section 325(b)) that exempts retransmission consent requirements for
distant network signals delivered by satellite operators to unserved households. H.R. 4572 also

13 “Satellite Video 101,” available at http://energycommerce.house.gov/hearing/satellite-video-101.
14 “The Satellite Television Law: Repeal, Reauthorize, or Revise?” available at http://energycommerce.house.gov/
hearing/satellite-television-law-repeal-reauthorize-or-revise.
15 “Reauthorization of the Satellite Television Extension and Localism Act,” available at
http://energycommerce.house.gov/hearing/reauthorization-satellite-television-extension-and-localism-act.
16 “Satellite Television Laws in Title 17,” available at http://judiciary.house.gov/index.cfm/hearings?ID=9128B0A5-
BD72-4A25-9BEA-CF5A1ECCE1A4.
17 “Compulsory Video Licenses of Title 17,” available at http://judiciary.house.gov/index.cfm/hearings?ID=
D2DB400C-4318-4CC7-A8D0-1188E98FA85F.
18 Available at http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/BILLS-113hr-
PIH-STELA-Reauthorization.pdf.
19 Testimony and background documents are available at http://energycommerce.house.gov/hearing/reauthorization-
satellite-television-extension-and-localism-act.
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extends for five years the prohibition for broadcasters to engage in exclusive contracts for
carriage, and for broadcasters and MVPDs to fail to negotiate in good faith.
Retransmission Consent Negotiations
Sections 325(b)(1)(A) and 325 (b)(3)(A) of the Communications Act prohibit MVPDs from
retransmitting a broadcast television station’s signal without the station’s consent and direct the
FCC to establish the framework for these negotiations. Furthermore, Section 325(b)(3)(C) of the
Communications Act instructs the FCC to enact regulations to ensure that broadcast television
stations and MVPDs negotiate retransmission consent agreements “in good faith.” Since the
establishment of these regulations, as required in the 1992 Cable Television Consumer Protection
and Competition Act (P.L. 102-385), the marketplace has continued to evolve, leading to a
reexamination of these rules. One of the growing trends noted in the marketplace is the move on
behalf of television broadcasters to negotiate retransmission consent jointly with another
television broadcast station in the same market. While some see this as a disturbing trend that is
ultimately harmful to consumers, others see it as beneficial.
Parties that support a rule against “joint negotiation” (typically MVPDs and consumer groups)
state that they are not in the public interest as they give broadcasters unfair market power during
the retransmission consent negotiations process. They claim, among other things, that they result
in higher retransmission consent fees which are ultimately passed on to MVPD consumers in the
form of higher rates, and increase the frequency of retransmission consent negotiation impasses
which can lead to blackouts of programming for MVPD subscribers. Those that oppose barring
joint negotiations (typically broadcasters) claim that, among other points, joint negotiations are in
the public interest as they enhance efficiency and reduce transaction costs, resulting in lower
retransmission consent rates to the ultimate benefit of MVPDs and consumers. They also question
the assumption that rising MVPD rates are a major contributor to rising consumer rates and note
that short of requiring a pass-through of any potential savings, there is no guarantee that any
potential savings will be passed on to consumers. Furthermore, they question the legal basis for
prohibiting joint negotiation, stating that among other issues, joint negotiation does not equate to
collusive or anticompetitive conduct and if necessary antitrust law is better to address any such
concerns.20
H.R. 4572 addresses the issue of joint negotiations among unrelated television broadcast stations.
Section 3 prohibits a television broadcast station from negotiating a retransmission consent
contract, on a joint basis, with another broadcast station in the same market unless they are
considered to be directly or indirectly owned, operated, or controlled by the same entity.
In a separate but related action the FCC, on March 31, 2014, adopted an order that limits joint
negotiations by certain large television broadcast stations.21 The order prohibits a television
broadcast station ranked among the Top Four stations in a local market (based on audience share)
from negotiating retransmission consent jointly with another Top Four station that serves the

20 For a more complete summary of and attribution of viewpoints as well as a further examination of the joint
negotiation issue see In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, (MB
Docket No. 10-71), released March 31, 2014. Available at http://transition.fcc.gov/Daily_Releases/Daily_Business/
2014/db0331/FCC-14-29A1.pdf.
21 This order also initiated a further notice of proposed rulemaking to solicit comment on whether the FCC should
eliminate or modify its network non-duplication and syndicated exclusivity rules.
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same geographic market (i.e., DMA), unless they are commonly owned.22 This action was taken,
according to the FCC, to “help curtail a practice that has put upward pressure on cable and Direct
Broadcast Satellite programming costs as well as prices to consumers.”23 The FCC stated that
joint negotiations among large, separately owned, same market broadcasters constitute a failure to
negotiate in good faith and are therefore prohibited.24 These joint negotiations, which will now be
in violation of the FCC rules, include the following activities: one station may not delegate its
authority to negotiate or approve a retransmission agreement to another station in the same
market; two or more stations may not delegate such authority to a common third party; and “any
informal, formal, tacit or other agreement and/or conduct that signals or is designed to facilitate
collusion regarding retransmission terms or agreements.... ”25 The FCC rules have no retroactive
effect, but only apply to retransmission negotiations going forward.
Delayed Application of JSA Attribution Rule in Case of Waiver Petition
Some broadcast stations enter into various forms of sharing agreements to share resources and
costs associated with the management of otherwise independent stations in the same market. One
such type of agreement, known as a joint sales agreement, or JSA, is established between two
stations in the same market and authorizes one station to sell advertising time on the other station.
Other shared service agreements, or SSAs, allow two stations in the same market to share
resources such as employees and administrative services as well as assets such as a news
helicopter. The use of sharing agreements and the potential impact they have on FCC broadcast
ownership rules and policy goals has come under FCC scrutiny.26
In a March 31, 2014, decision the FCC adopted a report and order that require that JSAs, where
one television broadcast station sells advertising for another, should be attributable for media
ownership purposes. Under these newly adopted rules a JSA that allows for the sale of more than
15% of the weekly advertising time on a competing local broadcast television station creates an
ownership interest for media ownership purposes. The FCC has granted stations two years to
come into compliance with current ownership limit rules and has also permitted stations to file on
a case-by-case basis for waivers.
Section 4 of H.R. 4572 changes the unwinding deadline to provide some stability to broadcasters
and is intended to encourage prompt FCC action on petition for waiver of the new rules. All
broadcasters involved in such non-compliant JSAs will have until the end of 2016 or 18 months
after the FCC’s denial of the respective waiver applications to unwind the JSAs, whichever is
later. All waiver applications for existing non-compliant JSAs must be filed within 90 days of the
bill’s enactment.

22 In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, (MB Docket No. 10-71),
released March 31, 2014. Available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0331/FCC-14-
29A1.pdf.
23 FCC Takes Action To Improve Retransmission Consent Process, FCC News Release, released March 31, 2014.
Available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0331/DOC-326347A1.pdf.
24 In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, paragraph 9.
25 In the Matter of Amendment of the Commission’s Rules Related to Retransmission Consent, paragraph 27.
26 For example, see Processing Of Broadcast Television Applications Proposing Sharing Arrangements And Contingent
Interests
, Federal Communications Commission, released March 12, 2014, available at http://transition.fcc.gov/
Daily_Releases/Daily_Business/2014/db0312/DA-14-330A1.pdf.
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Meanwhile, the FCC also adopted a further notice of proposed rulemaking (FNPR) to initiate its
2014 Media Ownership Quadrennial Review and incorporate the record for the pending 2010
Quadrennial Review.27 Included in the FNPR is a request for comment on how to define a
category of sharing agreements designated as SSAs, whether commercial television stations
should be required to disclose, and how to best achieve disclosure of, SSAs. Current ownership
rules remain in place while the FCC review is pending.
Deletion or Repositioning of Stations During Certain Periods
Section 614(b)(9) of the Communications Act prohibits a cable system operator from deleting or
repositioning a local commercial television station during a period where major television ratings
services measure audience size of local television stations. This provision prevents a cable
operator from deleting, or blacking out, local broadcast television programming during a disputed
retransmission negotiation process if it coincides with the periods that Nielsen Media Research
conducts its audience measurements. These periods, which occur four times a year (November,
February, May, and July), are known as the “sweeps” rating periods.28 The information gained
from this process is used to provide a basis for local advertising rates. In general a larger audience
share translates into higher advertising rates for the broadcast station. This prohibition in effect
guarantees that a local commercial broadcast station will capture both its cable and over-the-air
subscriber base during the sweeps period, enabling the local broadcast station to more accurately
determine its audience share to the benefit of its advertising rates. Similarly, the prohibition
against channel repositioning by cable operators during this time period protects viewership
(audience share) by ensuring that viewers can easily locate the local commercial broadcast station
on its customary channel.
Section 5 of H.R. 4572 requires the FCC, within 90 days of the bill’s enactment, to remove
Section 614(b)(9) of the Communications Act, which contains this prohibition. As a result there
will no longer be any “safe harbor” periods where a local commercial broadcast station will be
guaranteed cable system carriage during retransmission consent disputes. Cable television
operators will also be free to remove, or reposition the channel lineup of a local commercial
broadcast television station at any time during a retransmission consent negotiation impasse.
According to the March 10, 2014, memorandum issued by the majority staff of the House
Committee on Energy and Commerce, written to accompany the Communications and
Technology Subcommittee hearing on reauthorization of STELA, Section 5 was included for the
following reasons: the current prohibition permits local broadcast stations who have opted to
forgo mandatory carriage in exchange for retransmission consent fees to selectively gain carriage
during carriage disputes that occur during ratings periods; elimination will remove the
government from this aspect of the negotiation for signal carriage; and removal provides
regulatory parity since cable operators do not have the right to demand access to broadcast

27 Further Notice of Proposed Rulemaking and Report and Order, In the Matter of: 2014 Quadrennial Regulatory
Review, MB Docket No. 14-50; 2010 Quadrennial Regulatory Review, MB docket no. 09-182; Promoting
Diversification of Ownership in the Broadcasting Services, MB Docket No. 07-294; Rules and Policies Concerning
Attribution of Joint Sales Agreements in Local television Markets, MB Docket No. 04-256, adopted March 31, 2014,
released April 15, 2014. Available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0415/FCC-14-
28A1.pdf.
28 For further information about television audience measurement by Nielsen see TV Measurement; available at
http://www.nielsen.com/us/en/nielsen-solutions/nielsen-measurement/nielsen-tv-measurement.html.
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programming during retransmission disputes and satellite carriers are not subject to this
requirement.29
Repeal of the Integration Ban for Set-Top Boxes
In order to watch programming provided by a satellite or cable operator, customers must connect
their television to a set-top box which provides two functions: navigation (selecting channels or
on-demand services) and security (decrypting the encoded signal, thereby ensuring against
unauthorized use of that signal). Section 629 of the Communications Act—which was included in
the Telecommunications Act of 1996—required the FCC to assure the commercial availability of
set-top boxes that could be purchased in retail stores and would function with any cable system.
These set-top boxes would offer consumers an alternative to leasing the set-top boxes supplied by
the cable companies.
In 2003, the FCC adopted rules requiring the cable companies to make a security device known
as a “CableCARD” available to consumers. CableCARDs can be inserted into any set-top box in
order to decrypt the cable signal, thereby making that signal viewable by the cable subscriber.
The FCC became concerned that CableCARDs would not be appropriately supported by the cable
industry (and the retail set-top box market would not flourish) unless the devices were also
required in the leased set-top boxes supplied by the cable operators to their customers. Therefore,
in 2007, the FCC adopted further rules which banned the integration of the security and
navigation functions in the set-top boxes provided by the cable companies to their customers.
This required the cable companies to use CableCARDs in their own set-top boxes.
Section 6 of H.R. 4572 would repeal the FCC’s integration ban, thereby removing the
requirement that cable companies use CableCARDs in their own set-top boxes. The FCC would
maintain its authority to impose new regulations regarding set-top box controls in the future.30
Supporters of repealing the integration ban—primarily the cable industry—argue that the
integration ban has not led to a thriving market for third-party set-top boxes: 45 million
CableCARD-enabled set-top boxes have been deployed by the cable industry, while 600,000
CableCARDs have been requested by consumers for third-party devices. According to the cable
industry, CableCARD technology adds $56 to the cost of each box, resulting in a total cost to the
industry of over $1 billion. The cable industry also points out that satellite and Telco video
providers are not required to use CableCARDs, thereby creating an uneven playing field; that if
the integration ban is repealed, cable operators will still be required to supply CableCARDs for
third-party set-top boxes; and that the navigation device goals of the 1996 act are being achieved
through smartphones, tablets, and other video devices that do not require CableCARDs.31

29 Memorandum issued March 10, 2014, by the Committee on Energy and Commerce from the Majority Committee
Staff, “Legislative Hearing on Reauthorization of the Satellite Television Extension and Localism Act” available at
http://docs.house.gov/meetings/IF/IF16/20140312/101835/HHRG-113-IF16-20140312-SD004.pdf.
30 Section 6 is based on H.R. 3196, introduced in September 2013, by Rep. Latta and Rep. Green, which seeks to repeal
the set-top box integration ban and prohibit the FCC from adopting any new rules that prohibit companies from using
set-top boxes with integrated security functions.
31 Testimony of Michael K. Powell, President and CEO, National Cable & Telecommunications Association, before the
Subcommittee on Communications and Technology, House Committee on Energy and Commerce, March 12, 2014,
available at http://docs.house.gov/meetings/IF/IF16/20140312/101835/HHRG-113-IF16-Wstate-PowellM-
20140312.pdf.
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Opponents of repealing the integration ban—primarily the consumer electronics industry, TiVo,
and consumer groups—argue that repealing the integration ban would result in the cable industry
not providing appropriate support for CableCARDs, which in turn would destroy the commercial
viability of third-party set-top boxes. According to opponents, repealing the integration ban would
undermine consumer choice and innovation, and “lock consumers into accessing their cable
content only from a box or app supplied by their multichannel video provider. This would be a
step backwards for consumer choice in the multichannel video sector.”32
Reporting Requirements
Sections 7, 8, and 9 of H.R. 4572 contain reporting requirements. Section 7 requires the
Government Accountability Office (GAO) to conduct a study to assess the changes required to
the U.S. Code of Federal Regulations and the impact on consumers if Congress implemented a
phase-out of the statutory compulsory copyright requirements that govern broadcast content (i.e.,
Sections 111, 119, and 122 of Title 17, U.S.C.). The study is directed to include the impact that
such a phase-out and subsequent changes to carriage requirements would have on consumer
prices and access to programming. A report on the results of this study is to be submitted, to the
appropriate congressional committees, no later than 18 months after the enactment of the bill and
is required to include any recommendations for legislative or administrative actions and discuss
any differences between these results and the results of a study conducted under provisions
contained in STELA.
Section 8 requires satellite video providers (e.g., DIRECTV and DISH Network) to submit a
report, annually, to the FCC that details which local markets it retransmits broadcast television
signals from and the use and potential use of satellite capacity for the retransmission of local
signals in each local market; this reporting requirement sunsets after five years.
Section 9 requires the FCC to submit a report analyzing the extent to which consumers in each
local market have access to broadcast programming from stations located outside their local
markets, including significantly viewed broadcast stations carried by cable and satellite providers.
The report will also explore whether there are technologically and economically feasible
alternatives to the use of designated market areas to define markets that would provide consumers
with more programming options, and the potential impact such alternatives could have on
localism and on broadcast television locally, regionally, and nationally.
Senate
In the Senate, jurisdiction over STELA resides with the Committee on Commerce, Science, and
Transportation and the Committee on the Judiciary. In the 113th Congress, the Senate Judiciary
Committee held a STELA hearing on March 26, 2014.33 The Senate Commerce, Science, and
Transportation Committee held a hearing on April 1, 2014.34

32 Testimony of Matthew Zinn, Senior Vice President, TiVo Inc., before the Subcommittee on Communications and
Technology, House Committee on Energy and Commerce, March 12, 2014, available at http://docs.house.gov/
meetings/IF/IF16/20140312/101835/HHRG-113-IF16-Wstate-ZinnM-20140312.pdf.
33 “Reauthorization of the Satellite Television Extension and Localism Act,” available at
http://www.judiciary.senate.gov/meetings/reauthorization-of-the-satellite-television-extension-and-localism-act.
34 “Reauthorization of the Satellite Television Extension and Localism Act,” available at
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Senate Judiciary Committee Bill, S. 2454
On June 10, 2014, Senator Leahy and Senator Grassley introduced S. 2454, the Satellite
Television Access Reauthorization Act of 2014. S. 2454 would extend until December 31, 2019,
the provisions in the Copyright Act (Section 119) that allow DBS operators to retransmit (to
unserved or grandfathered households) distant broadcast television signals under a statutory
copyright license. In effect, this would allow the estimated 1.5 million satellite television
households to continue to receive distant network signals.
On June 26, 2014, the Senate Judiciary Committee approved S. 2454 by voice vote. The
Committee adopted an amendment offered by Senator Durbin that would allow cable companies
(as do satellite providers) to retransmit broadcast signals royalty-free from low-power television
stations to a wider audience area.
Orphan Counties
Under current statutes and rules, 43 states have one or more counties that are assigned to local
markets for which the principal city (from which all or most of the local television signals
originate) is outside their state. Satellite subscribers in these “orphan counties”35 may not be
receiving signals from in-state broadcast stations and may not be receiving news, sports, and
public affairs programming of interest in their state. The current regulatory frameworks for both
satellite and cable distinguish between the retransmission of local and distant signals and require
that local markets be defined by the DMAs constructed and published by Nielsen Media
Research.36 DMAs do not take into account state boundaries. The viewing patterns that underlie
these Nielsen markets are primarily the result of the physical locations of the various broadcast
television stations and the reach of their signals. They also reflect the boundaries of the exclusive
broadcast territories that each of the three original television broadcast networks—ABC, CBS,
and NBC—had incorporated into their contracts with their local affiliate stations decades ago.
Many residents of orphan counties have proposed that the statutory framework be modified to
remove prohibitions or impediments on satellite operators retransmitting to their subscribers in
these counties the signals of broadcast stations in in-state, but non-local, markets. (SHVERA, and
subsequently STELA, selectively removed these impediments through four “exceptions” that
allow satellite operators to retransmit to their subscribers in particular orphan counties in New
Hampshire, Vermont, Oregon, and Mississippi—but not in other locations—the signals of in-state

(...continued)
http://www.commerce.senate.gov/public/index.cfm?p=Hearings&ContentRecord_id=23352a01-e1a7-47b0-9a56-
27e88e76e378&ContentType_id=14f995b9-dfa5-407a-9d35-56cc7152a7ed&Group_id=b06c39af-e033-4cba-9221-
de668ca1978a&YearDisplay=2014.
35 For a complete state-by-state list of these counties, their populations, and the full power television stations located in
the counties, see the Appendix to CRS Report R40624, Reauthorizing the Satellite Home Viewing Provisions in the
Communications Act and the Copyright Act: Issues for Congress
, by Charles B. Goldfarb.
36 The statutory provisions for satellite explicitly require the use of Nielsen’s DMAs. (17 U.S.C. §122(j)(2)(A) and
(C).) The statutory provisions for cable instructed the FCC to make market determinations “using, where available,
commercial publications which delineate television markets based on viewing patterns.” (47 U.S.C. §534(h)(1)(C).)
Nielsen had already delineated such television markets, assigning geographic areas to markets based on predominant
viewing patterns in order to construct ratings data for advertisers, and the FCC therefore adopted Nielsen’s market
delineations.
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but out-of-market broadcast stations.)37 Broadcasters, however, have voiced concern that allowing
such retransmission could undermine their financial viability by reducing their audience share and
thus reducing their advertising revenues. They also assert such retransmission would weaken the
local broadcasters’ negotiating position with the satellite and cable operators, who could turn to
the programming of an in-state but out-of-market affiliate of a particular network if they failed to
reach retransmission consent with the local affiliate of that network. Broadcasters claim this
would harm their ability to provide quality local programming, which is expensive to produce.
Orphan County Legislation During STELA Consideration in the
111th Congress

During congressional consideration of STELA (P.L. 111-175) in the 111th Congress, a number of
bills were introduced that directly addressed the orphan county issue (either generically or for
specific states or geographic areas) by allowing satellite operators to retransmit to subscribers in
orphan counties the signals of certain in-state, but non-local broadcast stations.38 However,
STELA (reflecting each of the four bills that were reported out of the House Energy and
Commerce; House Judiciary; Senate Commerce, Science, and Transportation; and Senate
Judiciary committees, leading to STELA) did not include any provisions that would address this
issue directly. During the markup of the Senate Judiciary Committee bill, reportedly several
Senators prepared amendments that would have narrowly addressed the orphan county issue in
their states, but then agreed to withdraw their amendments when other Senators voiced concern
that the provisions would delay passage of the legislation because of unresolved issues among
broadcasters and satellite operators. At the markup, reportedly there was discussion of imposing a
deadline on the industry to reach a negotiated solution, such as a proposal by Senator Coburn that,
if there were no industry agreement by the time the legislation reaches the Senate floor, a trigger
provision would be inserted in the bill that would impose a statutory solution for the orphan
counties issue if no negotiated compromise was reached after two years. Ultimately, STELA did
not include a trigger provision.
As enacted, STELA did include a provision instructing the FCC to prepare within one year a
report containing analysis of (1) the number of households in each state that receive local
broadcast signals from stations of license located in a different state; (2) the extent to which
consumers have access to in-state broadcast programming; and (3) whether there are alternatives
to the use of DMAs to define local markets that would provide more consumers with in-state
broadcast programming. The FCC submitted its report to Congress on August 29, 2011.39 The

37 17 U.S.C. §§122(a)(4) and 47 U.S.C. §341.
38 Representative Ross introduced the Local Television Freedom Act of 2009, which would have allowed multichannel
video programming distributors (MVPDs)—satellite operators and cable operators (including telephone companies)—
serving an orphan county to retransmit to their subscribers in that county the signals of television broadcast stations
located in an adjacent in-state market. In addition, the Four Corners Television Access Act of 2009 was introduced in
both the House (by Representatives Salazar and Coffman) and the Senate (by Senators Bennet and Udall) to allow
satellite operators to retransmit the signals of certain in-state broadcast stations to subscribers located in two Colorado
counties that are assigned to the Albuquerque, NM, local market and to allow cable operators located in those counties
to retransmit the signals of certain in-state stations without having to obtain retransmission consent from the stations.
Also, Representative Boren introduced a bill which would have allowed satellite operators to retransmit to any
subscriber in the state of Oklahoma—not just those in orphan counties—the signals of any broadcast station located in
that state. None of those bills were enacted.
39 In the Matter of In-State Broadcast Programming Report to Congress Pursuant to Section 304 of the Satellite
Television Extension and Localism Act of 2010, MB Docket No. 10-238, Report, adopted August 26, 2011, and
(continued...)
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report provided data, summarized the comment of interested parties, and identified several
alternatives to the use of DMAs to define local television markets, but did not provide any
conclusions or recommendations.
Orphan County Legislation in the 113th Congress
Legislative options to address orphan counties could range from a narrowly focused provision
that would permit distant network signal importation for particular unserved counties, to a
national approach that would allow all orphan or unserved counties to receive out-of-market but
in-state distant broadcast network signals on their satellite TV systems. Another approach could
be expanding the FCC’s “market modification” process to satellite operators, in which the FCC
could be petitioned to add and/or subtract local communities or counties from DMAs for the
purpose of redefining them as part of an adjacent in-state local market.40
H.R. 4572, as approved by the House Energy and Commerce Committee, contains a provision
(Section 9, “Report on Designated Market Areas”) that would require the FCC to submit a report
to Congress analyzing the extent to which consumers in each local market have access to
broadcast programming from stations located outside their local markets, including significantly
viewed broadcast stations carried by cable and satellite providers. The report would also explore
whether there are technologically and economically feasible alternatives to the use of designated
market areas to define markets that would provide consumers with more programming options,
and the potential impact such alternatives could have on localism and on broadcast television
locally, regionally, and nationally.
During the May 8, 2014, House Energy and Committee markup of H.R. 4572, Section 9 was
offered as an amendment by Representative Luján and Representative Gardner, and agreed to
unanimously by voice vote. Previously during the March 24 subcommittee markup,
Representative Luján introduced and then withdrew the amendment requiring the FCC report on
designated market areas. Also during the subcommittee markup, Representative Luján offered
and subsequently withdrew an amendment which would have modified FCC retransmission and
carriage rules and restrictions to make it more feasible for MVPDs to deliver in-state but out-of-
market network broadcast signals to adjacent underserved counties.41
On May 9, 2014, Representative Aderholt introduced H.R. 4635, the Orphan County
Telecommunications Rights Act of 2014. H.R. 4635 seeks to provide for greater access to in-state
television broadcast programming by allowing orphan counties to petition the FCC to be included
in the local television market of an adjacent in-state television station.
On May 21, 2014, Senator Udall of Colorado and Senator Bennet introduced S. 2375, the
Colorado News, Emergency, Weather, and Sports Act of 2014. S. 2375 seeks to facilitate the
delivery of in-state but out-of-market television broadcast stations to two orphan counties in
Colorado (Montezuma and La Plata counties).

(...continued)
released August 29, 2011. Available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1454A1.pdf.
40 A discussion of the market modification option and DMAs is provided in the FCC’s In-State Broadcasting
Programming Report,
p. 31.
41 Available at http://docs.house.gov/meetings/IF/IF16/20140324/101989/BILLS-113-DiscussionDraft-L000570-Amdt-
3.pdf.
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Concluding Observations
With the possibility of approximately 1.5 million satellite TV households losing distant network
signals on December 31, 2014, the 113th Congress may address the reauthorization of STELA and
whether expiring provisions of the Copyright Act and the Communications Act should be
extended. An issue for Congress is whether these provisions should be extended (and if so, for
how long), whether other changes to STELA are necessary, and to what extent the STELA
reauthorization should serve as a vehicle to address broader video policy issues such as
retransmission consent and carriage rules governing the relationship between broadcasters and
MVPDs. Ultimately, Congress will likely determine whether to address these broader video issues
as part of the STELA reauthorization, or alternatively, as part of a comprehensive update of the
Communications Act of 1934 that may be considered by the 114th Congress.

Author Contact Information

Lennard G. Kruger
Angele A. Gilroy
Specialist in Science and Technology Policy
Specialist in Telecommunications Policy
lkruger@crs.loc.gov, 7-7070
agilroy@crs.loc.gov, 7-7778


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