Congress should let the Satellite Television Extension and Localism Act Reauthorization (STELAR) of 2014 expire at the end of this year. STELAR is the most recent reincarnation of the Satellite Home Viewer Act of 1988, a law that has long since outlived it’s purposes.
Owners of home satellite dishes in the 1980s—who were largely concentrated in rural areas—were receiving retransmission of popular television programs via satellite carriers in apparent violation of copyright law. When copyright owners objected, Congress established a compulsory, statutory license mandating that content providers allow secondary transmission via satellite to areas unserved by either a broadcaster or a cable operator, and requiring satellite carriers to compensate copyright holders at the rate of 3 cents per subscriber per month for the retransmission of a network TV station or 12 cents for a cable superstation.
The retransmission fees were purposely set low to help the emerging satellite carriers get established in the marketplace when innovation in satellite technology still had a long way to go. Today the carriers are thriving business enterprises, and there is no need for them to continue receiving subsidies. Broadcasters, on the other hand, face unprecedented competition for advertising revenue that historically covered the entire cost of content production.
Today a broadcaster receives 28 cents per subscriber per month when a satellite carrier retransmits their local television signal. But the fair market value of that signal is actually $2.50, according to one estimate.
There is no reason retransmission fees cannot be “determined in the marketplace through negotiations among carriers, broadcasters and copyright holders,” as the Reagan administration suggested in 1988.
Aside from perpetuating an unjustified subsidy, renewal of STELAR may deprive owners of home satellite dishes in the nation’s twelve smallest Designated Market Areas from receiving programming from their own local broadcast TV stations.
Due to severe capacity constraints inherent in satellite technology in the 1980s, the statutory license originally allowed satellite carriers to retransmit a single, distant signal (e.g. from a New York or Los Angeles network affiliate) throughout their entire footprint. As the technology has improved, the statutory license has been expanded in recent years to include local-into-local retransmission. DISH Network, which already provides local-into-local retransmission throughout the nation (in all 210 DMAs), has demonstrated that a statutory license for distant signals is no longer necessary or warranted.
Although DirecTV does not yet offer nationwide local-into-local retransmission, this is a voluntary business decision that should not dictate the renewal of a statutory license based on 30 year old technology.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.