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June 4, 2019
Dennis Wharton
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Testimony of Gordon Smith at House Communications Subcommittee STELAR Review Hearing

WASHINGTON, D.C. -- NAB President and CEO Gordon Smith testified this morning at House Energy & Commerce Subcommittee on Communications and Technology hearing entitled, “STELAR Review: Protecting Consumers in an Evolving Media Marketplace.”

Below is his testimony as prepared for delivery.

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Good morning Chairmen Pallone and Doyle, Ranking Members Walden and Latta and members of the subcommittee. My name is Gordon Smith and I am the president and CEO of the National Association of Broadcasters.

On behalf of the free and local broadcast television stations serving your hometowns, I appreciate the opportunity to testify on how Congress can ensure that viewers are better able to access their local news, sports, weather and emergency information by allowing the expiring provisions of STELAR to sunset this year.

Today, STELAR is not only unnecessary due to considerable advances in the media marketplace, but any reauthorization will further harm the satellite viewers that are currently denied access to their local television stations as a result of this law. For these reasons, broadcasters oppose STELAR’s reauthorization. Similarly, the Copyright Office – the expert agency charged with administering STELAR’s license - released a report yesterday calling for its expiration.

In today’s competitive media landscape, local broadcast television remains the most-watched source of news, emergency updates, entertainment programming, sports and investigative journalism in communities across America. Our viewers turn to local stations to get the weather report, learn how to help neighbors in need, and watch trusted local news anchors give an unbiased view of what is happening in their communities. Local broadcasting is a critical electronic thread that keeps every community together, informed and safe.

The exceptions to the benefits afforded by this local broadcast system are those communities that continue to be served by out-of-market stations as the result of STELAR. In 1988, when the original satellite law was enacted, viewers had two predominant choices for video programming: over-the-air broadcast television or a subscription cable package offered by a single local provider. That satellite legislation, a predecessor of STELAR, was hugely successful in enabling the nascent satellite television companies to better compete with cable’s monopoly. But the crutch it gave them was the ability to serve viewers with out-of-market network programming at a below-market rate and without having to negotiate for it.

But thirty years later, today’s media marketplace is virtually unrecognizable and dramatically different, even compared to just five years ago at the last STELAR renewal. Those nascent satellite companies that Congress subsidized are now multi-billion-dollar behemoths. And today’s competition for viewers comes not only from those giant pay-TV providers and their cable brethren, but also unregulated tech companies such as Facebook and Google, and online video providers like Netflix and Amazon.

Most importantly, no technological impediment exists today to prevent AT&T-DIRECTV and DISH from providing local broadcast channels to their subscribers across the country. Yet STELAR’s distant signal provisions incentivize those companies to serve a shrinking universe of eligible viewers with out-of-market stations because of its subsidy.

To put this in practical terms, DIRECTV subscribers in Ottumwa, Iowa recently saw a news story about a garbage truck catching fire in Los Angeles. The local news they should have seen is that of crop insurance prices rising and the impact on farmers across the Hawkeye State. During times of emergency, the difference between what STELAR viewers see versus their local broadcast news is stark. This is a business decision that AT&T-DIRECTV is making in 12 rural markets across America: a choice that puts their profits ahead of service to consumers, and ahead of the safety of communities. Broadcasters and viewers salute Congressman Loebsack and other Members of Congress who have highlighted this STELAR harm.

To end this consumer harm and modernize the video marketplace laws, Congress should allow STELAR to expire as it was originally intended. There is no policy justification or technological reason for this outdated law to be reauthorized. The time has come to stop subsidizing billion-dollar satellite companies and to instead provide viewers with the most accurate and timely source of community news, weather and emergency information – their local broadcast stations.

Thank you again for the opportunity to testify today. I look forward to your questions.

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