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Dish, DirecTV Applaud House Satellite Draft Bill; Merger Next?

7 Mar, 2014 By: Erik Gruenwedel

Joint press release ups scuttlebutt satellite operators could merge in a consolidating multichannel video program distribution market

Dish Networks and DirectTV’s March 8 joint press release commending the House Energy and Commerce Committee’s release of a discussion draft of a bill to reauthorize the Satellite TV Extension and Localism Act (STELA), was the typical boiler plate variety — and not really the news.

Key to the presser was language underscoring the operators’ combined prowess. Indeed, Dish founder Charlie Ergen and DirecTV CEO Mike White have publicly acknowledged the benefits of a merger between the companies — a union that would rank satellite ahead of Comcast/Time Warner Cable and Netflix in terms of domestic subscribers.

“We and our 34 million combined customers appreciate the hard work of the subcommittee, and we look forward to working with Republican and Democratic members of Congress as this legislation moves forward,” Dish and DirecTV said in a statement.

Industry observers contend the satellite operators are waiting for any regulatory challenges Comcast and Time Warner Cable might face in their proposed $45 billion merger before pulling the trigger.

Meanwhile, reauthorization of STELA would ensure continuity of service to more than 1.5 million remote signal satellite customers who would, otherwise, lose service in December when the act expires. Remote TV access is the primary reason the satellite industry launched in the 1960s.

More importantly, STELA would prohibit broadcasters from negotiating joint retransmission agreements — an increasing bone of contention among multichannel video program distributors.

Critics of the broadcast industry say joint retransmission negotiations unfairly increase broadcasters' leverage over cable and satellite companies as they negotiate with broadcasters for the ability to air broadcast programming.

Indeed, Time Warner Cable and CBS engaged in a protracted blackout last summer over retransmission, among other issues.

TheHill.com reported that STELA initially included language that would have allowed MVPDs to sell less-expensive channel bundles to subscribers that excluded select broadcast channels. That provision was dropped after strong opposition from broadcasters.

"I look forward to working with members of the subcommittee as we continue this thoughtful process and firmly believe we can get this across the finish line before the clock expires on many of STELA’s provisions at the end of the year," Greg Walden (R-Ore.), chairman of the Commerce Subcommittee on Communications, said in a statement.

The next STELA committee meeting is slated for March 12.


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