Welcome. And we are delighted to have all of you with this today. The committee gathers to examine this state of the television and video marketplace. Im glad to convened this hearing with my colleague, se senator cantwell, hours established panel of witnesses and thank them for appearing. The honorable michael powell, president and ceo of an cta the internet and television association. The honorable gordon smith, president and ceo of the National Association of broadcasters and our former colleague. Mr. David kinney, ceo of nielsen. Mr. Craig aaron, president and ceo of free press. Americans are living in the golden age of television. Weve never had more choices and access to video content. When viewers tend to be home at a certain time to watch their favorite show, they are gone. Television experience is moving away from dependence on fixed schedules, programming links and the confines of the Family Living room. With the development of overthetop technology, digital programming and streaming services, consumers now control how, where and when they watch television and video content. The growing availability of highspeed Internet Access underlies the disruption of the traditional t. V. Industry. Internet conductivity has ignited an explosion of new video offerings on a variety of platforms and devices. Live scripted and on scripted video programming and User Generated Content is now readily available on computers, tablets, smartphones, gaming consoles and social media platforms. As a result americans are able to access and watch television anywhere they can get a sufficient connection online. Also Witnesses Today will discuss the impact of rising digital and online Video Services. On consumer viewing habits and preferences. As well as the effects of growing access to content. Internet access is also spurred changes in the ways video content is offered and packaged. It is led many to cut the cord for subscriptions to traditional paid t. V. Offerings. In exchange for online Video Services. I am akin to some of those that cut the cord. For example, viewers can now purchase skinny bundles or scaled down selections of paid t. V. Channels. That more closely aligned with their preferences. Content is also available on demand through subscriptionbased offerings that provide uninterrupted ad free viewing. As well as socalled premium models. Where the service is available free of charge with intermittent advertisements. The growth of these offerings is delivering a more personalized and less Expensive Television experience. This morning hearing is an opportunity to discuss how Television Programming and the delivery of video content has evolved over the past decade. Particularly within the broadcast and Cable Television industries. I would also like to ask witnesses to address how new entrants into the video marketplace are transforming Traditional TelevisionBusiness Models. While increasing competition and consumer choice. As technology continues to advance and transform, the television industry, this hearing provides an opportunity to examine existing rules and policies governing the video marketplace. Many of the rules which are contained in the stellar act and the cable act of 1992, are intended to promote competition and access to content. This is especially important for rural l areas. Where many individuals live beyond the reach of a broadcast signal. These laws have also played a meaningful role in fostering localism and viewpoint diversity. But despite an increasingly competitive video marketplace, consumers sometimes face higher bills. For video content, programming blackouts and lack of access to the most relevant programming due to market restrictions. I would say they will no doubt adjust the views on existing laws and policies governing the video marketplace. Also hope that witnesses will discuss how congress should modernize these laws given the context of which options and services are available to the viewers. Television and video programming industries are important, sectors of the economy their Critical Communications they create jobs, distribute information, drive commercial activity and entertain through Quality Content and Services Television and video programs provide a voice to many perspectives that serve the interest of the viewing public every day. This bring their committees closer and empower citizens. I look forward to a thoughtful discussion today, truncated and abbreviated though it might be because of the voting schedule. We thank you all and will do the best we can to fit a lot into a short time and i now recognize turnage my dear friend from the state of washington. Thank you, mr. Chairman. R i too will try to be brief so we can hear from our witnesses and possibly get questions in before 11 00 votes today. Thank you for holding a hearing and thank you to the witnesses for their insight and the everchanging content market and delivery system. Obviously billions are being invested in new programming and new production and there are many more options for consumers enand an everexpanding world o content. Entertainment mis at our fingertips whenever we wanted. Including this hearing being seen i am sure by many people. So much of the content in so many places and we obviously love the notion that we can watch it when we need the content and content information. But how has this innovation in the television and video market impacted consumers . How are they better off and what are the challenges that we ctface in continuing to protect their interests . The committee must engage in i believe a robust debate about how we are going to foster true localism, diversity coand competition and fidelity to the Public Interest as we work on various issues when we move forward. Not so long ago, most of us watched t. V. For free over the air and the time i guess our eyeballs were rented to watch a lot of ads to pay for the content. And we understood what that meant and we understood with the Public Interest meant. But as we have changed into this larger picture, how has the heart of localism and diversity and true media competition been maintained . These are the issues that i think we will be pondering with as we look at issues of broadcast and cable industry and the changes that people are proposing. The fcc s desire to strictly basic rules that would ensure that companies play fairly in a marketplace or dismantling also preserve the diversity of content and media ownership particularly impacting i believe in a negative way, the number of voices that we need to have in media. And also, and impact of key issues, consumers such as local broadcasters. In fact a recent survey revealed 76 percent of Americans Trust their local news a great deal or fair amount more. I want to make sure that we are understanding how the Public Interest here is being served in this debate that sometimes can seem discussions about big business as opposed to the consumer and the content that they are after. The cable industry led the charge to limit the fcc strong Net Neutrality rules that help ensure that consumers are guaranteed by rule to have unfettered access to new online video content. Now the industry is asking the fcc to further eliminate its Public Interest obligations including those that could potentially force localities to change whether to keep Public Education and government access channels on the air. I hope all of these issues will be discussed this morning and again i think our witnesses for being here on this very important Public Policy debate. Thank you very much senator cantwell. We will receive in their entirety, the statements submitted by all four of our witnesses and will ask, at the end of the table for five minute summaries begin with mr. Powell. Your recognize peer. Thank you, sir. Good morning chairman, i am pleased to be here to discuss the state of todays marketplace today in one word is extraordinary. It is the latest installment of a multiepisode story on the evolution of television. It is a really good story and it is only getting better. As we know, and episode when it opens with the invention of broadcasting presenting moving images over the air with nothing short of magical. Government licensed the airways in exchange for vibroadcasters providing free service and serving the Public Interest. It was a medium that delivered one show to all viewers at the same time and t. V. Commercials with a heart of the business model. Today broadcast content is predominantly viewed unpaid t. V. Systems. An episode to television was transformed by cable. Which brought content directly to the home by wire and improving quality and reach. Cable created new forms of content including cnn, espn, hbo and countless other diverse varieties of niche programming. The number of networks has blown from 11 to over 900 today. Cable was partly financed and financed by a subscription model peer regulation was checking cables Committee Market position and protecting over the air broadcasting. Prescription now somewhat out of date in the face of a newly invigorated market. Multichannel video, attracted competitors from the satellite and Telco Industries as well. They won substantial market share now commanding over 42 percent of that market. Of the top six, only two today or Cable Companies. In the current episode that we are in the internet is upending the television universe. Creating a world of robust competition, continuous innovation and new consumer experiences. The key driving changes are worth highlighting. Deeper providers no longer need to own an infrastructure or license to offer video service. Lower barriers to entry new video providers have flooded into the video space. The largest providers today are streaming services that did not even exist in 2006. Video apps have allowed view on any device rendering the adage anytime anywhere clichc. The amount of video content is also stored from 182 original scripted shows in 2002 to a staggering 495 shows last year. Consumers now demand programming tailored to their preferences. The medical professional and User Generated Content, binge watch entire seasons and often repel from advertising. Providers must adapt to keep pace with the new generation of viewers. And t. V. Companies must compete with other internet distractions. From gaming to instagram. S nelson estimates for example, that 18 to 34yearolds spend 34 percent of their time using a smart phone and only 22 percent on television. A lot of the storm is hard to know how the corporate will be when the dust settles with the mega winner is certainly the consumer. The cable industry certainly felt the heat. Its dominance has receded, losing market share to traditional and facing the challenge of cord cutting. Competition for programming is fierce and rising costs have squeezed profitability. Despite these changes the industry is adapting, it is improving user experiences. Such efforts include voice role control, apps to watch her Cable Service on any device. And the ability to download o. Content on the go. The industry has also embraced streaming services both of their own and in ipartnership with others like netflix and youtube. Such innovations do not stop with video however. The industry continues to push forward withbroadband. Just recently upgraded to one gigabyte service reaching under three percent of the homes in our footprint. Looking forward industry has been announced a initiative to bring 10 gigs to customers and we will not rest until every Rural Community also has broadband. Economic market predicates on which video laws are based have withered. Since the 1992 act, the industry has substantially less share, less control over programming and faces stiffer competition. Rules premised on cables bottle neck control are just unfounded. Second, many of the video laws apply to some Industry Groups and not others and the Newer Services are completely unregulated. Trying to create greater parity. And finally we must preserve social value those protection of children trusted news and Information Sources and respect for the First Amendment is important and enduring prego im happy to take your questions for go. Mister powell your ability to summarize a multipage Statement Like that in five minutes is breathtaking. [laughter]. Can you do the same i dont know if anybody is as talented as michael but i will do my best. You are recognize them i thank yoube chairman and members of the distinguished committee my former colleague i am gordon smith present of the National Association of broadcasters i appreciate the opportunity to testify on how congress can ensure viewers are better able to access local news, sport news, sports, weather and emergency information by allowing existing provisions of the stellar to sunset it is not only necessary with considerable advances in the media marketplace but also any reauthorization to satellite viewers that are currentlyhe deniedoc access to television as a result of this law perkel broadcasters oppose the reauthorization similarly the Copyright Office with the license released a report on monday calling for the expiration. In todays competitive media landscape and with those entertainment programming and sports and Investigative Journalism and turning to local stations learning how to help neighbors in need look at the news acres give a unbiased view what is happening local broadcasting is crucial and is a critical electronic threat running through every community in america keeping them together informed and safe. The exceptions to the benefits by the local broadcast system are those communities that continue to be served by outofstate market stations as a result of stellar. In 1988 when the original satellite law was enacte enacted, viewers had two predominant choices, over the air broadcast television or a subscription cable packageof offered by a single local provider. That satellite legislation is predecessor which was hugely successful to better compete with the cableopol monopoly that no longer exist. But the thrust that it gave them was the ability with out of Network Programming without havingoc to negotiate but 30 years later the media market is virtually unrecognizable and dramatically different even compared to five years ago when it wasau reauthorized. Those companies that Congress Subsidized are now multibilliondollar companies that are behemoths in those come not only from those providers and cable brethren but also unregulated Tech Companies such as facebook and google and online providers like netflix and amazon most importantly no technological impediment exist today to prevent at t directv or dish from providing local broadcast channels to their subscribers across thehe country. They promised to do that dish has an directv has not but the stellar provisions incentivize those companies to a shrinking universe of eligible viewers because of the subsidy. To put in another terms directv subscribers in nebraska recently saw a news story about a new panhandling fine in new jersey. The local news they should have seen as a series of floods having aka devastating effect. Instead of election news viewers in montana, the state capital of hell and i were seeing santa clara board of supervisors instead of electionon coverage for culmination of seeing emergency coverage on a possible explosion in Grand Junction colorado they heard about californias new michelin star restaurant. This is a business decision at t and directv is making in 12 world markets. A choice that puts their profits ahead of service to their consumers and the safety of communities. Broadcasters and a viewers salute the senators that have highlighted the harm that must end. To end this consumer harm to modernize the video marketplace to allow stellar to expire as originally intended there is no technical reason this should be reauthorized and the time has come to stop subsidizing billiondollar Satellite Companies to provide with the most accurate news from local broadcasters. Thank you. Thank you very much mister smith. Thank you for having me chairman and members of the committee for having me today with a video marketplace to spur competition and encourage innovationn,ou to amplify divere voices and empower creators providing with local news and information that we need so often when we come together to talk about the state of media talk about industry versus broadcasting or cable old media versus new perkel and hope well talke more about the audience, viewers, bill payers and public. As congress has long recognized the companies that control the publicic airways, dig up city streets must have public responsibilities with the public needs from them is more competition, choices, divey and especially lower prices they should be the committees priorities that refreshes the laws with our Communication System the tv and video marketplace is evolving but the reality is american still spent far more time on traditional cable and broadcast tv than on social media or other apps. This powerful and profitable broadcasting industry come to washington touting their commitments to diversity while seeking to evade those promises, undercut competitor competitors, and consolidate at all cost. They want all the benefits of dominating local media but none of the obligations. It has been sa