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March 12, 2014
Dennis Wharton
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Testimony of Marci Burdick at STELA Reauthorization Hearing

WASHINGTON, D.C. -- Schurz Communications Senior Vice-President of Broadcasting Marci Burdick testified today at a House Communications and Technology Subcommittee hearing on "Reauthorization of the Satellite Television Extension and Localism Act."

Below is a transcript of her testimony as prepared for delivery.

The attached ad is also running today in Hill publications regarding local radio and television broadcasters' role as first informers and a lifeline for local communities.

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Good morning, Chairman Walden, Ranking Member Eshoo and members of this Subcommittee. I'm Marci Burdick. I am Senior Vice President of the Electronic Division for Schurz Communications. I supervise radio, cable and television stations in small and medium markets. I am testifying on behalf of the NAB, where I am the Television Board Chair.

The STELA legislation that the Committee is considering is, at its core, a satellite bill. Passed in 1988, this law was supposed to be a temporary fix to help satellite carriers better compete with cable by giving them permission to provide distant broadcast channels. 26 years later, satellite is providing local broadcast channels in nearly every market and is a thriving competitive alternative to cable. So while NAB questions the need for the bill, we can support the draft produced by Chairman Upton and Chairman Walden.

Our primary interest in this legislation was to prevent the picking of marketplace winners and losers which is why we have asked for a clean bill. We are happy to see that this STELA draft steers clear of these kind of provisions. While cable and satellite companies sought to use STELA to gain leverage over broadcasters in retransmission consent negotiations, we continue to believe that free market negotiations are the most appropriate place to establish prices. As to any other broader changes to broadcasting rules, NAB firmly believes those should be debated as part of the comprehensive Communications Act update, recently launched by Chairmen Upton and Walden.

As you know, broadcasters may only operate with a license granted to us by the FCC and are, by far, its most regulated industry. It can be hard to flip a switch without getting permission from our regulator. While our competitors are often large, national companies with no ownership restrictions, we may not own more than one TV station in most markets. While our competitors may show provocative, cutting edge content at any time of the day, broadcasters live by decency rules dictating what we may air. Broadcasters are saddled with innumerable regulations that are by far more onerous than our cable and satellite competitors.

For all of these regulations, there are some benefits that broadcasters receive because we operate in the public interest. But if Congress opts to remove the benefits of being a broadcaster, then it should also remove the burdens. Deregulation should not be limited to one player in an industry.

If your goal is regulatory parity between the various video platforms seated at this table, a comprehensive examination in the Communications Act update is the only way to achieve it.

I'd like to spend the remainder of my time addressing Joint Sales Agreements, known as JSAs. These are agreements among broadcasters in a market for the joint sale of advertising. While often misunderstood, these agreements benefit the public, particularly in small and medium markets where Schurz operates, through improved public service, and enhanced transmission facilities.

For instance, our JSA in Wichita provides the only Spanish local newscast in the state of Kansas. In Springfield, Missouri, our JSA helped take a struggling station to one that is winning national awards for local news coverage.

We strongly oppose the extraordinarily regulatory path the FCC is taking to make television JSAs attributable for purposes of the broadcast ownership rules. The FCC's proposed rule will require broadcasters to unwind existing agreements, something unprecedented and amazingly disruptive. This is yet another example of how broadcasters are forced to play by one set of rules, while the rest of the video industry plays by another.

The issue here is local competition for advertising dollars. Television stations fiercely compete not just with each other, but with cable, Internet and mobile.

Although the FCC and DOJ have said broadcasters dominate local advertising, you can see in this chart that we are seeing and expecting big gains from our competitors.

This chart proves that today's local advertising market is far more than just local TV, but unfortunately we're being regulated like its 1960. And, importantly, for all the entities taking revenue OUT of a community, local broadcasters are the only ones putting it back through news and public service.

Strangely, the FCC apparently doesn't have the same concerns as it relates to cable. The same JSA-like agreements called "interconnects" are routine between cable, satellite and telcos for the joint sale of advertising. What you have are cable companies selling local advertising for their direct competitors, like DIRECTV, DISH and FiOS, yet they will continue unregulated.

In conclusion, we strongly support the bill's language that prevents the FCC from enforcing rules without first collecting empirical data studying the real world impact of JSAs. In reality, these agreements better serve the public interest. To ignore the market pressures facing broadcasting would doom us to the fate of newspapers, and I hope this Committee will take an honest, fact-based look at the importance of these agreements to localism.

We appreciate the work of this Committee and I am happy to answer any questions.

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About NAB
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