Anachronistic regime for the provision of broadcast programs. , we addressedly impending transition from analog to digital television. Other issues the committee considered at that time remain unresolved, while new technologies have further disrupted the market with innovations that we could not less than a decade ago. I believe we have a unique opportunity to tackle some of the big issues that will define the future of video. Licenses, i think everyone will admit represent a departure from freemarket negotiations and are usually the last resort in the event of market failure. When the compulsory licenses were first enacted, the cable and Satellite Industries were in their embryonic stages. Over it is estimated that 90 of american households subscribe to a paid tv service. Of issuesa myriad that may be relevant for consideration. Example, these licenses are necessary to foster competition, or should they be phased out as the Copyright Office and others have recommended . How many consumers truly benefit from these licenses . On the other hand, is the current overlapping web of communications and copyright policy functioning in a way that meets the goals of National Media policy . It cannot be denied or disregarded that marketplace incumbents, including broadcasters, cable and satellite providers and content creators, have entrenched interest and investments in a complex framework created by law. Dismantling of this structure be unfair to those industries and harmful to consumers . 10 current law keep pace with currentnologies can law keep pace with technologies that seek to export ambiguities in the Legal Framework . What constitutes a Public Performance or retransmission for retransmission and consent purposes . Cables time warner dispute resulted in a temporary blackout for some consumers. Evidence of a broken system, or does it reflect a robust freemarket . Also, how should we address or should we address a nascent online video distribution model that in the future may very well displace the traditional distribution methods altogether . Are these internetbased video Distribution Models the new kids on the block, entitled to comparable statutory imposed obligations and prohibitions, or is the time for Government Intervention over . Broadare a few of the policy questions that i think are relevant in this space. I believe we must determine whether the current regime is working to ensure that content providers and distributors, old and new, are appropriately tivized ind and incen a way that provides a competitive environment for consumers. We have an impressive and Diverse Group of expert witnesses today, with very different views on how the marketplace works, and how it has developed, and most probably what the rules of the road should be moving forward. I look forward to the testimony today, and to continuing this dialogue in the future. I yield back, mr. Chairman. Thank you. The distinguished gentleman from virginia, mr. Bob goodlatte. Thank you, mr. Chairman. I look forward to the testimony of the witnesses. For decades, the vast majority of americans have relied upon satellite and Cable Services for access to a wide variety of video content ranging from nighttime entertainment for their families, educational shows for their children, local and National News with information that informs them, and Public Access channels that empower americans to see their local state and federal representatives in action. As a numbers of content continues to increase, consumers subscribe to additional sources. Americans are embracing these Additional Services to such a degree that society has coined two new terms. Cord shavers, and cord cutters. For those who are reducing or eliminating traditional video subscriptions. To the fccs latest report, in addition to free broadcast content, 100 of americans have access t 98 have access to these , local alternative. 35 have access to two Satellite Services and two local alternatives. Marketplace competition has grown significantly since the last activity in this area in 2010, when congress enacted the Satellite Television extension and localism act. Compulsoryhree licenses in title 17 impacting this industry, one of which expires at the end of 2014. This committee will concern whether a reauthorization of this compulsory license is warranted. As the written testimony demonstrates, some interested parties are advocating for congress to undertake more than a simple reauthorization, and look at other matters surrounding the video marketplace and competition policies that appear to have become more prominent recently. One core factor this committee will weigh as we consider these important issues is ensuring that copyright owners maintain the right to distribute their intellectual property as they choose, and this committee has traditionally disfavored compulsory licenses. Another core factor we will weigh is ensuring competition in the marketplace. Consumers and intermediaries benefit where there is robust competition. Efforts that involve competition issues deserve this committees oversight and ongoing attention. The written testimony of the witnesses this morning highlights the importance of both issues to the video marketplace. This committee continues its oversight and legislative activities, i look forward to hearing from all interested parties about their perspectives and concerns. I thank the chairman and yield back. The chair recognizes the distinguished gentleman from michigan. The Satellite Television isension and localism act that we havens witnesses to. Fornt to thank the chairman keeping the witness list down to seven. I understand we ran out of tables and were not able to put on any more people than are here. I want to consider these options. I look forward to the witness testimony. Two considerations. Owners, andpyright the other about consumers. Owners protect copyright because it is there a property that forms the basis of the entire scheme. Compulsory licenses are generally not favored because they distort the marketplace and result in below market rates being paid to content owners. Policiese must enact that protect consumers and safeguard competition. Consumers benefit from increased competition because more competition usually produces lower prices. Not benefitners do financially from retransmission consent agreements, which is at the heart of these disputes, despite the fact that the signal only has worth because of the programming contained on the signal. I think we must focus on principles of localism, people who subscribe to cable or Satellite Television have so many options, there is never a shortage of something to watch. Even with all these choices, value their highly local news, their local sports. Local channels to deliver emergency information. Localism and the affiliate relationship also benefits copyright owners by allowing their programming to be publicly performed in every market across the country. I conclude by observing that there will be circumstances in which these principles will conflict. Forward to working to ensure that the Public Interest through be served satellite carriage of broadcast Television Signals. I think the chairman for allowing me to make these brief remarks. We have a very distinguished panel before us today. I will begin by swearing and the witnesses. If you would please rise . You swear the testimony youre about to give is the truth, the whole truth, and nothing but the truth, so help you god . Let the record show that all witnesses concur with that. I will now introduce our panel. We appreciate everyones attendance at this hearing. Our first witness, executive Vice President , chief research. Hes responsible for overseeing , whilement and research serving as deals liaison to his industry associations. He received his ba in psychology and sociology from the State University of new york at stony brook. Our second witness is executive Vice President , general counsel and secretary of the dish network. He is responsible for legal and Government Affairs for dish and its subsidiaries. He received his bs from the university of vermont. Testifiedwitness today on behalf of the National Association of broadcasters. He has more than 25 experience years of experience. Fromceived his ba degree the university of virginia. Chairman goodlatte has asked permission to introduce our next witness. Its my pleasure to welcome our fourth witness and my constituent, mr. Earl mckenzie, chief operating officer, testifying on behalf of the American Cable Association with 35 years telecom experience. He is responsible for daily operations of many subsidiaries. He received his ba in accounting from the college of william and mary. Our next witness is our fifth witness today, Vice President of Public Policy. Hes responsible for the companys regulatory and legislative affairs, and received his bachelors degree from santa clara university. Our six witness sixth witness has testified today on behalf of Major League Baseball. He joined in 1977 and has served as outside counsel to Major League Baseball on copyright and telecom issues for more than 35 years. He attended northwestern university. Our seventh and final witness has testified is testifying on his own behalf today. He served as former president of Abc Television network, and former executive Vice President of the walt disney company. He received his ba from the university of maryland. We will start with you. You will be the leadoff hitter today. As is obvious to all, we have seven witnesses. This can take a long time. We try to apply the five minute rule. Turns to green light amber, that is your signal that the time is running out and you have a minute to go. At that point, we would appreciate it if you would wrap it up. Applyl a tried try to the five minute rule to ourselves as well. Why dont you start us off . Thank you. Paul do not owe, and im executive Vice President chief research offer officer for nielson. Nielsen is a global media and Marketing Research company that measures what people watch in 100 countries. In the u. S. , we are widely known for our Television Audience measurement service. Over the years, nielsen has developed Innovative Technologies allowing us to expand our measurement services. ,hrough these technologies nielsen has the capability to measure Consumer Internet purchase habits, listening trends on terrestrial internet and satellite radio, and help consumers utilize social media. Our instrument reports are relied on by a range of public and private sector stakeholders to facilitate business transactions and engage consumer trends. It is also used by the federal government to define markets. And discussions of stella its predecessors begin with a conversation about nielsens dna. Market area is a collection of counties which share a predominance of viewing to broadcast stations licensed to operate within a given standard metropolitan statistical area, as defined by the omb. Predominance or dominance of viewing is defined to indicate that for a particular county, homes may view broadcast stations licensed to operate from different but generally nearby metro areas. The dma with the predominant viewing is that metro area whose broadcast stations have the highest share of audience for that county. We start with new york and los angeles and continue on through the 201 dna markets. Existing dna regions are testified tested to verify that the dominant share of viewing from each county continues to be from broadcast stations licensed to operate from within that same home metro. All assignments are based on share of household tuning between 6 00 a. M. And 2 00 a. M. Sunday through saturday tuesday through saturday. There are rules that nielsen exercises when it appears that the predominance of viewing may be shifting. These rules try to balance the need for stability in television markets. At the same time, the need to assure that town these are assigned to dna counties are assigned to dna. To broadcast shift stations from another dna, that shift must be statistically significant. Instituted the dna system in the mid1960s to measure the number of viewers in a particular area, and to connect sellers and buyers of advertising. It allowed for the creation of a market where buyers and sellers of local Television Advertising could do business with each other based on impartial information by thirdparty. Advertisers need to know that they are directing towards audiences they want to serve. With an estimate of 72 billion for the entire year, that is a market that fuels the Great Entertainment and news programs this country produces. With the emergence of satellite thecable, the landscape of industry changed. The new technology allowed companies that carried Television Programming to expand their boundaries, specifically television stations who were previously limited to being viewed in the local dna. While new technologies open new horizons, they also create new problems for the television industry. The industry needed rules to determine which local stations could be carried in which local markets. Congress and the fcc established rules governing which local television stations could be carried in which local markets. Nielsens designated market areas were adopted as a guideline for determining which local stations could be carried. Nielsen did not recommend the use of the dnas purpose, nor were we ask for Technical Assistance on the use of the dnas. It was a decision made entirely by congress. As he were to learn more about future trends and video use, we will be happy to assist you however we can. I look forward to your questions. Thank you, and congratulations. You beat the illumination of the red light. Your entire statements will be made part of the record. Chairman goodlatte, Ranking Members of the subcommittee, i appreciate the opportunity to testify today. I am general counsel of dish network. Dish is the nations Third Largest paid tv provider. We are the only provider of local Television Service in all 210 local dmas. Consumers can use features to have greater choice and control over their viewing experience. Pays billions of dollars for the right to distribute content. We believe that outdated laws graded. Be up Public Policy should support preservation and expansion of Consumer Video choices. As distributors like dish offer ad in technology, some programmers are crying wolf, saying this time the threat is real and they will not be able to survive the onslaught of innovation. The challenges to the dvr are a perfect example. We believe in consumer choice. Shouldeve Congress Protect consumers against the growing problem of blackouts caused by retransmission consent dispute. In 2010, there were 12 blackouts. In 2011, 51. In 2012, almost 100. Have had 84 blackouts which puts us on track for a recordsetting year of 120. The length of the blackouts a number of consumers impacted are increasing. The consumers are the real victims of these onesided negotiations. Some broadcasters are coordinating their negotiations with each other. American television alliance, a coalition whose membership encompasses cable,atellite and telco providers and in which dish is a member, has unified and called for changes to the outdated retransmission consent rules. That when a local Network Station is pulled from a consumer due to a retransmission consent dispute, the video distributor should be able to provide another markets network signal. The broadcaster whose signal is supported would be compensated under the distance signal royalty rate. This will at least allow consumers to keep their Network Programming while negotiations continue. If the broadcasters local content is as valuable as they assort assert, importing signal is a poor substitute, and there will be incentive to reach agreement. Living in remote and underserved areas have benefited from stella. Stella allows americans residing in predominately rural areas to receive distant network signals. Licenseance signal sunsets at the end of 2014 and without reauthorization, 1. 5 million american households will be disenfranchised. Third, in the three years since the last authorization, the Video Industry has not been sitting still. Americans increasingly want to watch on the go. Over the years, dishes has done much to responding respond to change. In summary, we believe the government should work to ensure competitive realities. Thank you, and i look forward to answering any questions you may have. Thank you, mr. Dodge. I commend you for beating the light. Good morning. Jerry waldron. Im testifying on behalf of more than 1000 free local over the of theevision members National Association of broadcasters. Urgebroadcast constituents you to keep in mind two principles. Free, locally focused broadcast television should remain available to american households. Should not of stella be used to create new exceptions to copyright law that undermine those contractual relationships between broadcasters and satellite or <