This is three hours. [background noises] good afternoon. The subcommittee will come to order the chair recognizes himself for five minutes for an Opening Statement. Welcome to todays educational hearing on the state. I look forward to our hearing today from our witnesses representing a wide range of viewpoints across the industry. The video marketplace is rapidly changing. For over half a century americas Video Program and one white on the television in their home. Tvs and devices allowed for the string platforms to provide new choices to consumers beyond over the air and tenants satellite disk or cable. Americans are no longer tethered to rigid tv schedule. Today viewers can choose where and when they watch tv whether its at home, on the go or everywhere in between. This industry shift has ushered in redefining how we entertain, educate and inform ourselves. Access to highquality content statistics tell americans preferences are changing the streaming becomes easy and affordable choice for americans. For the first Time Streaming providers claim the largest portion of u. S. Video viewership in july of 2022. At that Time Streaming viewership represented 34. 8 of tb viewership while cable subscriptions represent 34. 4 . The same report published this month streaming shares hit a new high of the tb viewership where this Shows Consumers continue to cut their cable subscriptions move to streaming or in other words theyre cutting cord. Yet as this immediate landscape has drastically evolved the Regulatory Environment has largely remained the same. The cable act which is over 30 years old still provides a bedrock framework for tv regulations today. Burdensome regulations including media ownership restrictions of transportation are just a few regulations in the broadcasters. With the introduction of streaming services we must resist the temptations and post more regulations on the competitive industry. Largely unregulated streaming marketplace allow platforms to flourish and negotiate deals with unprecedented access to content and local Broadcasters Television shows movies and other content. Rather we should focus on deregulating and overly regulating the industry 1990s error regulation onto eight new and vibrant industry. To determine whats working we can reduce regulations to help and support the american viewing choice one shrink local broadcast continues to thrive. Todays hearing is the beginning of this conversation. Recent changes in the industry, this hearing provides an opportunity for congress to learn about issues with laws and regulations pertaining to multichannel Video Programming distributors like comcast and directv and vpds and vpds like hulu, live tv, and youtube tv. The contrast between linear or scheduled tv and non linear meeting on demand content and outdated laws and regulations that may no longer make sense in todays marketplace. I look forward to our discussion today and thank our witnesses for their willingness to be here as representatives of their industry. Before i recognized my colleagues the Ranking Member of the subcommittee the gently from california the seventh district i went to make one last statement says a lot about this committee and its the greatest committee in congress. One of things i always say about it is we look over the horizon five 10 years that is where you are in a lot of cases. We cant go out there and think about enacting a piece of legislation or laws in general without knowing whats happening out there. Thats white so important we have this hearing today. With that again i recognize my good friend and Ranking Member the gentle lady from california for her Opening Statement thank you. Thank you, thank you for those words too. Todays hearing comes at a critical time for the video marketplace. Customer preferences and Business Models are changing quickly. Congress needs to keep pace this discussion provided a needed form for that. The market we are examining given the middle of a profound seachange the pandemic continues the trend that was arty building and the video ecosystem. Consumers are steadily drifting away from tv towards a videoondemand other overthetop services. By some estimates 80 million households will have cut the cord by 2026. As more families cut the cord then maintain a paid tv subscription implications for the market will be significant. Business mostly to adapt obligatory structures must be scrutinized to ensure they are presenting consumer harms. Because these changes are already being felt across the industry. Especially by consumers. Perhaps no more acutely than Television Blackouts. Freeman who has Expensive Television blackout theyre they easy to understand. Consumers pay for something they never get. And almost any other industry charging a customer for something that is not delivered would be unthinkable. And yet it is an experience that is all too common. Your friends over to watch the game, the big game or your favorite show for each turn on the tv nothing. Despite and paid in full nothing no gains no show. It is not just once these blackouts can go for weeks not only that but they are becoming more and more common. Its estimated there been more than 1000 stations blackouts since 2010. In 2019 alone they already had 230. These blackouts are unfair and they have to stop. Or forward to the video marketplace, im going to be laser focused on stopping these blackouts. As Congress Moves forward with hearings like this the scc is also engaged on these important issues. The scc is taking steps to correct out on focus junk fees sticker shock and inflated bills the precedent would require distributors to provide the all in price clearly and prominently in their ads and on scrubbers bills. Consumers deserve Accurate Information to make informed decisions and i hope the scc can strike the right balance. It would be an incomplete discussion if we did not our valued News Partners are facing. From election information to Public Safety alerts, americans rely on the trusted sources of information. I have seen it firsthand im excited will be describing a perfect example of local news. In sacrament casie are a casey are aawardwinning journan indispensable part of our regions fabric. Intuit wildfires a provide a lifeline to every resident who needs it. I slid forward with discussions at the need local are fighting for committees like all of the country depend on it. Without appreciate todays witnesses for appearing before us. I look for to support discussion are you back the balance of my time per click thank you the gentle it yields back the balance over time. The church recognize the gentle lady from washington the chair of the full committee for five months for Opening Statement for. Good afternoon. Thank you and all of our witnesses. Todays video marketplace is evolving rapidly. Americans have more choices than ever on how, when and where they watch content. As well as what content they watch. We have seen a profound shift in peoples viewing habits especially streaming services have become more available and reliable. For decades, the only options available were over the air television and Cable Services or people could watch live tv at a scheduled time on television. Now streaming platforms allow people to watch whatever they want, whenever they want. Whether that is on a tv or on the go using a phone, computer, tablet or any device that is access to the internet. Streaming platforms have reshaped our entertainment habits. Made our lives more convenient and diversified the content available. This transformation introduce complex challenges for the entire Media Industry. Cable and satellite operators or are continue to lose record numbers of historic people have experienced major blackouts on Cable Networks across the country due to a failure by providers and broadcasters to reach carriage agreements. Including in my district work just this past weekend constituents were prevented from watching local news and the seahawks. They lost. Hollywood shut down as actors and writers strikes carries on. 1992 Congress Passed the cable act. A landmark piece of legislation that injected matching the competition and Consumer Protection to eight monopolistic cable and satellite tv industry. As discussed the industry has changed drastically since then. The internet has created unlimited possibility for innovation which we have seen with the advent of streaming services. This shift has created a new environment the cable access was never designed for. After nearly 30 years its timee for us to reexamine the law. To want to get ensure innovation and competition are encouraged. Now some have called to simply expand the law to cover the streaming industry. Rather than reevaluate and bring into the 21st century. This approach would be irresponsible could potentially kill the flourishing streaming industry. Walking both Online Platforms and providers into elevated laws. Under the Obama Administration to expand the legacy rules related to multichannel programming distributors to new internet based streaming providers. Thankfully this effort was never finalized. Recently however calls to the tc to open that proceeding. This is an effort i do not support. White earlier this year chairman and i caution from refreshing the record. We were minded to chairwoman the scc has a Legal Authority to regulate streaming services. The scc and congress should not be in the business of applying a decades old laws to modern innovative technology. Especially when much of that technology the service it provides does not even exist at the time the law was written. Congress also must be mindful of the crucial role that local broadcast plays in the Media Industry. Local broadcasters have long been pillars of our community. Providing Vital Information for millions of the platform for diversity of voices to be heard. And Rural Communities in particular rely on local broadcasting. Especially when they only have limited our no access to the broadband and streaming services. Fosters a sense of local identity. Connecting people through regional programming that reflects the unique perspective and traditions. Local broadcasters Important Safety Information to public and pert first responders. Its closer to the people telling the story sharing perspectives to does not cover sometimes ignores must be sure the local broadcast is preserved. Todays hearing will provide expert insight into the evolution of this market. As well steps congress can take to ensure outdated regulations do not hinder innovation competition. I look forward to the discussion today so chairman i yield back. Thank you very much for the gentle lady yields back. The chair not recognize us for five minutes the Ranking Member of the full committee. Thank you, mr. Chairman. We are here today to discuss everchanging video marketplace the marketplace that has been experiencing an ongoing transformation. These changes the consumers options and prices they paid to do the programs in the content they want. Around a boxy television with rabbit ears and on a good day to be off three Major Television networks. Today there are a lot more options we cannot scroll through endless channels to get to either cable or Satellite Service and Subscription Services access to the internets. While the delivery mechanism differ at its heart its really the same. Watching a video screen consuming sports, art, entertainment judging by recent surveys do a lot of pert in 2022 there six hours a day watching video and over the air broadcast Broadcasting Cable satellite Tv Streaming Services and social media sites. In some ways theres never been a better time to be a consumer of the video content. Numerous options mean petition, and more awareness of what Consumers Want. They are buying district amount of content more opportunity for content creators who are women and people of color. Creating more diversity and new competitive streaming services have offered consumers the promise of saving money. Only paying for the content they want. While the industry remains robust consumers have largely benefited, new players in the market changing Business Models and outpatient statutes have dramatically altered Revenue Streams. Precarious moment some portion of our to be getting seep market consolidation, rising prices, junk fees and disappearing content. Consumers are beginning to experience prescription fatigue upwards of one third dollars a month on multiple servers to get access to all of the content they want to watch. Television blackouts are rampant content creators are finally getting a chance to tell their stories are fighting new gatekeepers take it or leave it feels are impacting their ability to make a living. Moreover we cannot forget the backbone of all of this is Broadband Internet access. Unlike our old cable bundles for free over the air broadcasting, access to the new Online Video Services require the separate subscription to highquality reliable broadband. Unfortunately Digital Divide persists and whether due to affordability or availability broadband subscription often remains out of reach for many families. That is why programs champion the Affordable Connectivity Program and the broadbent equity access and Deployment Program are so important. They offer so much promise to truly unlock the innovative Video Services for people across the country who simply dont have access because of they cannot afford it or stop available where they live. We should all keep in mind as we discussed the positive impact these are making on American Families around the nation. We are also child to the shifting video marketplace by changing information landscape. American still by and large support broadcasters and cable trusted local news live events and emergency information. We were Online Streaming Services still rely on traditional challenge to offer this important content to consumers. Whats more is consumers increasingly turn to social media and Online Platforms for the raid content. This information and content harmful to children. This troubling content jeopardizes our democracy. The evolving video marketplace is complex in the midst of uncertainty is more important than ever to put consumers first to make sure the not being ripped off by these companies because of high prices and junk fees. Localism and diversity. The solution is not to throw it all out were enacted in the first place. On behalf of the American People consumers. The judgment yields back insert curtis the president chief executive officer of the National Association of broadcasters. President chief executive officer association. Mr. David gantner cofounder chief executive officer of food boat tv inc. Mr. Jon lee senior policy counsel for Consumer Reports. Thank you all for being with us. I want to take a quick want to understand and hope its all out there on the table your timer light will turn yellow you have a one minute remaining. It will turn red when your time has expired. Just a quick note of personal privilege we do have the former chair of the energy and Commerce Committee with us today. Also the former subcommittee chair of the communication and technology. That might be more important. So welcome back. You are recognized for five minutes your Opening Statement. Ranking numbers and members of the subcommittee. My name is curtis i am the president ceo National Association of broadcasters. I am proud to testify today on behalf of the thousands of local television and Radio Station members who serve your constituents across the country. In todays media landscape television and radio broadcasters Value Proposition stands alone. We are the most trusted. We are the most local. We offer the most in demand sports and entertainment programming. And we are freely available to any viewer and listener who wants to access our stations over the air. For those reasons we remain the most popular. More than 181 million adults watch broadcast tv each month within 227 million listeners tune into broadcast radio each week. Most importantly we are lifelines in times of emergency internet and Cell Networks fail. Consider the wildfires that recently ravage the island of maui. Destroying homes, lives and businesses forcing thousands of people to evacuate. Theres no power no water no internet service. Vibrant lines and cell towers burned to the ground. But broadcast remained one of the few dependable sources of communication providing roundtheclock updates on the fires, emergency supplies and shelter that kept people safe. Tragically this is not unique. Whether its tornadoes in ohio are flooding in california broadcasters are there. Yet broadcasters investment in this service freely available to the public does not exist in a vacuum. We compete in a fierce immediate landscape that has been is beendramatically reshape by s in technology and an avalanche of content. To date we compete for audience, advertising dollars in content right with cable, satellite, podcasts, digital platform, and most significantly big tech. Yet despite the industry changes broadcasters remain uniquely subject to rules governing our scale and scope from a bygone era. Unlike tv broadcasters, no restricts Audience Reach to 39 of u. S. Households. Unlike radio broadcasters, limit siriusxm to offering five channels and one local market. Our competitors have no obligations or incentive to provide local news, weather, sports, Public Affairs or emergency information that our audiences rely on. We offer a Public Service that our competitors do not replicate. That we do all this while competing with one arm tied behind our backs. Too that and more must be done to ensure fair competition and continue consumer access to our essential service. This committee should urge the scc to immediately take more actions. First the scc should complete his 2018 review for account for the rise and increasing in incre of digital media. Second the impact of streaming of your access to local stations. Third the scc should create a more transparent fair predictable process to review broadcast transactions and finally scc should continue supporting the rollout of nexgen tv. These actions the scc can take today. Initiate this committee could focus legislative efforts on two bills am radio for every vehicle act as a safety standard and automobiles. Legislation to reinstate the diversity credit reflect the communities we serve. In conclusion, americas broadcasters are extremely proud of our service to your constituents. One partly must acknowledge that they shared success innate Legal Framework that was created and refined by generations of this committee. While some on the Witness Panel are blend of local National Programming that is uniquely tailored to every Community Across the country is where the true Success Stories and a century of telecommunication. As a result freight local broadcast system remains the envy of the world. Thank you for the opportunity to appear before you today i look forward to your questions. Thank you for your testimony. You are recognized for five minutes. Correct thank you for the opportunity to testify on these very timely issues. Aside from congressman no member of this committee was in congress 31 years ago when it enacted the 1992 cable act. Looking back no one could have accurately predicted the tremendous changes that would follow from that law. The law it resulted in content providers gaining disproportionate leverage over smaller cable providers and their subscribers. This formed in 1993 after passage to give small and rural Cable Operators a seat at the table in washington. Since then has been engaged in every major legislative and regulatory decision affecting the video marketplace greatly appreciate the sea at this table today. Thus four to 2023 we have over five and are members who serve up at the states. Thirty years ago Cable Television was my members core business. By 2019 that was no longer true. The marketplace had evolved so dramatically it changed our name from the American Cable Association to americas communication association. Aca connects to emphasize our growing focus on broadband delivery platforms. The shift away is fundamentally driven by the ever rising cost of programming especially sport content the price increases that we experience consumers have access to tons of concept aca are delivering that content to their consumers over worldclass broadband infrastructure that empowers Consumer Choice. If we as a country or to collectively seize this moment for the benefit of consumers we must ensure that the rules operate fairly and rationally without anyone having the ability to exert undue leverage. Otherwise we face a reckoning. Looking forward there were three main issues that are worth your attention here in congress today. First just abusing the disruption to local newspapers and other media driven by changing habits and technologies the video business has changed forever. Both large and small have exited the video business already. Seriously consider the possibility of doing that in the future. The fallout of the coming change was profound for everyone programmers and local broadcasters. How congress chooses to impact the pace of change is of paramount importance to everyone. Second a constant theme market size and market power cast a mark influence over marketing. We encourage you for existing programs rules and laws with an eye towards trying to make sure no player can assert undue leverage. Resulting in armed competition or consumers. The same is true for many Telecom Policies under consideration before this committee. Taken Net Neutrality for example. All of the evidence points to a healthy and functioning dynamic marketplace broadband providers make it possible for their subscribers to choose content sources. I cannot leave this table today without urging you to consider the risks of revisiting title ii regulation. If anything, just as we have seen in the video marketplace policymakers need to consider the impact on smaller providers who lack leverage over online giants. Failure to do so could destabilize the echo system especially in the rural markets we serve. Third and finally the transition to internet delivered services and content is well underway many consumers today are impacted by factors such as the rates terms and conditions for linear programming. The retransmission consent framework continues to leave customers suffering under a regime of inflated prices of blackouts and without the ability to choose content packages to best suit their needs. Must fix it and avoid future mistakes we keep the dynamics in mind as we tackle the issues going forward. Nice for five minutes good afternoon. And distinguish mems of the subcommittee. Thank you for inviting me too testify before you today. My name is david im the cofounder and chief executive officer. Ive been in the Media Industry for nearly 25 years in various roles including local broadcasts and table Cable Tv Companies the general and hispanic marks that cofounded food boat in 2015 for two reasons i want to help consumers access content that was difficult and too, i believe that immediate landscape with transitioning to streaming. And so it did. Today consumers have freedom when deciding how to access content with the rise of streaming video content marketplace has become increasingly diverse and competitive. From traditional cable to satellite to a variety of streaming services accessing news, entertainment and sport content is easier than ever prices are very competitive. Cable fiber and Satellite Television cummings at comcast and directv continue to offer content to consumers. However consumers can access content on their computers, television and mobile devices. The streaming services have various formats. Disney plus or netflix allow consumers to stream selections from eight library of contents. These Services Offer content on demand prerecorded video for users to watch at their leisure with limited to no life content. Services like youtube tv ed hulu plus life tbr settlement to traditional cable satellite and companies in the content they offer. They are very different in every aspect. The aggregate hundreds of broadcast Television State but deliver them over the internet. Notably live tv content stream access to almost every local station in america. For example subscribers can stream approximate 99 of local stations across the country live tv streamers can be cheaper consumer alternative. We do not require therefore do not charge consumers for cable or satellite boxes. Also consumers do not agree to longterm contracts as they may be required to do with cable. All of these benefits for consumers and accessibility of local content are possible because Companies Like fumo do not face regulation that undermine our ability to prioritize Consumer Preferences and to intubate. Applying a decadesold regulation to streaming platforms is the pity me at a solution in search of a problem. Large Station Groups are pushing for rule changes these are pushing for string platforms to negotiate directly or content they do not own. They seek to revive a longterm proceeding provoked and overwhelmingly response during public consultation. Commenters pointed to the potential harm to viewers good content creators and local news providers. The protected nextdoor tv dispute is an example next star has pulled conte from directv for several months now. Blackouts such as this cause massive disruption for consumers were not able to watch the must have programming including pro Football Games like this past weekend. Consumers undoubtedly benefit from our subscription model are subscribers receive a channel plan that is right for them with applicable local news weather and sport content as well as national networks. However it would simply not be possible for us to provide the content to consumers if regulations require we negotiate with each local station. The time and people necessary to complete such negotiation would allow us to only focus on major major immediate markets leaving local communities behind. This would be a profoundly detrimental change to the Current System actually united with Broadband Access and signup and accessor local content. Also it is highly unlikely food boat and other streaming countries will defeated treated fairly any negotiations ultimately again the consumer will be adversely impacted. We know Consumers Want the technological innovation content selection and competition created by the Current System because we see that in the rate of consumer customers canceling their Traditional Services has continued to accelerate in the United States. Thank you for the opportunity to to appear at this hearing today i am of course happy to answer any questions. Thank you. Correct thank you very much through testimony you are recognized for five minutes through opening and members of the subcommittee. Thank you for inviting me too testify on the current state of the video marketplace. My name is jon im a senior policy counsel Consumer Reports. To date we will no doubt hear the video marketplace has been dramatically disrupted with a chaste sobering pastor through said this point many of us will agree. Traditional cable settle itb companies have lost millions of customers. Specifically more than 25 million in just the past five years. On the other hand streaming serves as a novelty a decade ago signed up millions of subscribers. Netflix link account for 75 and a half million u. S. Subscribers. Today some streaming Services Provide television equivalent to traditional Cable Company offers. Importantly over the air broadcasting exist many younger consumers have no memory three or four local speaking for myself i do remember. To put this in perspective last year in july for the very first time as the chairman pointed out streaming Services Drew more viewers in cable tv they snag new 35 share of total Tv Consumption in the country. Streaming stretches lead to nearly 39 this past summer. So what is going on here . First its important to understand how consumers view content is as important as how they received content to pay with the introduction of the iphone and other smartphones in 2007, the proliferation of screens began allowing consumers source video content whenever they wanted, wherever they wanted. But none of these changes wouldve been possible without the availability of affordable fast and reliable broadband connection which is necessary to stream video. Eighty with the arrival of mobile screams and sufficient st Computing Power the internet was set to revolutionize the video marketplace much like it had the newspaper and Music Industry earlier in the decade. These changes grade a market ship away from Washington Television and a set time called linear programming empowered consumers to watch content on their own schedule. This democratization of your choice started to chip away at the long dominant Business Model of Cable Television. Un bouncy changes have benefit consumers in numerous ways but competition and more Consumer Choice for Video Programming is a good thing. There are more choices or video content more ways to access that content than ever before. Consumer behavior bears us out. According to National Representative Consumer Reports survey conducted earlier this year, roughly half of american households say they subscribe to four more streaming services. Most one in 10 subscribe to nine or more. Furthermore most streaming application allow consumers to easily cancel anytime during a given month. Consumers are only obligated to pay much content as they like. As for the equipment required for video streaming many tvs sold today are device that connects to the is a stark permit cable or Satellite Company that can also be expensive in this respect the many choices offered by streaming require consumers to be more conscious of the purchasing decision in real time. In cognizant how much theyre spending across the streaming apps are subscribing to pay moreover more streaming Services Price increases are nothing new the prevalence of blackouts which happily agreement the video distributor. Anticonsumer with estimated 1000 of them is 2010 all about money. The recent dispute between disney and charter exhibit a 50 men Charter Spectrum cable subscribers were denied abc, espn and other channels followed filed bydisney for more than a. Can and should be addressed by congress in a way that better benefit consumers what is working what is not what we value and a healthy marketplace and leveled the Playing Field for all video providers in a way to best serve consumers. I outline some these ideas in my written test may be happy to discuss in further. With that i look forward to answering any questions you may have, thank you. Quick thank you very much for your testimony. Again we appreciate all of our witnesses for being with us today. At this time we will now begin the question for members of the committee. The chair will not recognize himself for five minutes of questions. If i could ask you to make it may be a brief statement or answer on this for about 30 seconds each. That mediate marketplaces experience significant changes since the passage of the cable act of 1992. Local broadcast tv and cable are required to operate in a regulated environment not competing at streaming services which will remain unregulated. These laws dont change in the next two five years looking over the horizon what is the outlook for your industry . Click sega for the question. Broadcasters are competing with these unregulated streaming services. And content rights. As a big attack especially as turn into this space. Advertising dollars are being gobbled up by local markets. Consumers are cutting the cord for a litany of reasons but consent feeds from traditional paid tv outlets in all of that means less revenue for local stations to put into local news and information absent some ownership reforms. And absent the scc looking at the impact of the virtual on this marketplace for quick thank you. The firm might members perspective i think ive outlined it pretty well and might written and my oral testimony. If something does not change in the next few years we do face a real reckoning for consumers and for the industry. My members saw this coming have started to migrate boy from a primary focus on video delivery to a broadband delivery. That has opened up the ability for Broadband Service and over overtop service are flourishing. Thank you. I would like to state i certainly empathize with all of my colleagues here. I worked at a local television station and the great state of texas in san antonio. Dma number 35 general market. And so i understand the problem. If you look at food boat for instance with respect to read transit fees our sub base has been growing tween 20 and 40 . So the amount of money we are generating on retransmit is growing quite rapidly. At the same time as being one of the smallest players in the country we also are paying a pretty significant escalator over the last six or seven years. When you couple the massive growth rate with the escalators that we are paying and the amount of the number of stations we carry which right now is over 800 plus. As i mentioned in the opening comments over 99 coverage across the United States with one blackout that happened earlier this year i think we have done a pretty good job driving revenue. The last thing i will say as it relates to local news as it is very important to identify the fact a lot of the programming we are talking about heres owned by national broadcasters. The local news component is quite different and is available tens of millions almost 100 million plus devices at this point in time. You can access any of the news channel across any of the major sticks were connected tvs. So i think from that perspective we have done a really good job ensuring we have Viewpoint Diversity and have access to as many channels as possible across the United States. Thank you. Broadcast stations are currently prohibited from reaching more than 39 of u. S. Households while streaming services can reach any household with a broadband connection. The current laws and regulations of those in media should be providing an equitable Playing Field for the immediate marketplace today . No, they absently jones. We have seen a tremendous disruption posed by the Big Tech Companies on the advertising marketplace. Newspapers of the most prolific example of that. The tremendous dominance in the advertising marketplace have big tech has effectively destroyed the newspaper industry. As a result local broadcasters are filling that void more than 50 of newsroom staffing in the countries happening at local broadcast stations. And our constraint on further investment in those news rooms is only inhibited by our ability to offer advertisers more in scale and receive greater revenant we can put into the reinvestment. About my last 15 seconds or the increasing trend toward cord cutting how is your industry addressing the changing demands of more choice and content consumption . Thats a tough one mr. Chairman seven seconds. I would say that we are focusing on trying to fix the trap we find ourselves in. We are squeezed by prices for programming and content that continues to rise. And we have no alternative other than to pass it along, go out of business or have lost my third one i apologize. Its pass it along comets go out of business, or its a black them out and nobody wants blackouts. My apologies. Thank you very much. My time has expired but i will submit my final questions for our witnesses to answer. At this time the chair now recognizes a gentle lady from california in the Ranking Member of the subcommittee for five minutes for quick thank you very much mr. Chairman. On the heels of one of the Largest Television blackouts in recent memory between disney and charter, that your argument about the regulatory explanation for blackouts in your testimony. We also know there are other factors at play. Do you believe changing have wrote a play increasingly regular Television Blackouts and how. The short answer is yes we have seen some the other witnesses have pointed out that its welldocumented. Riley choi structure exists in the 92 cable acts will hear a lot about called retransmission were Cable Companies are obligated to carry the local channels. Theres a lot of leverage with the broadcasters to extract. And i do not blame them, as much as they can, out of Cable Companies to put them on the air. Are they increasing for that reason because they need more money . Maybe. I do know as grant hasnt pointed out these increased retransmission fees are passed on to consumers. Now we will quibble with how they are passed on in the junk fees which in some markets are more than 20 a month. And they are not in the advertised price that is killing consumers. I would say between the two they are even worse. Is a longtime viewer myself i think the pioneering local journalism are doing on behalf of of the Sacramento Region as a National Stands for excellence in Public Service. Drink wildfires, elections and everything in between its hard to keep sacramento. We are all excited about the video options consumers have today but can you talk about the three local over the air television and Radio Stations play in promoting equitable access to information . Fix thank you for the question. Local broadcasting is unique because we are freely available to every consumer who wants to access us over the airport take issue with the term thats been thrown around at blackout. Never got off the air. A local broadcast station cannot reach an agreement with a provider who was to repackage the programming cell as a bundled to the consumers but its never off the air. In times of emergency when Cell Networks fail we are always a providing that service to local communities. It is important to note these impasses are a last resort. 99 of the time these contractual carriage negotiations are concluded successfully without disruption. Accessing that we are anecdote to the misinformation. What about when natural disasters compromised inter based communication what functions over the air Services Play . I think you just hit the nail on the head at congresswoman. Which is that we are on the air. Thats what local broadcasters both television and radio are doing our best work. What is unique as we are not just they are reporting during the natural disasters ensuring our viewers and listeners have access to safety. The information we need. We are also there in communities boots on the ground ensuring these communitys can rebuild. Certainly. Announced a proposal to require tripe Price Transparency from video distributors for this would help prevent sticker shock and give consumers better information about the true cost for video service. Consumers deserve more transparency this is a step in the right direction. Can you describe how these fees are obscured consumers and advertising materials . And i have a warning sign already here but. Great thank you congresswoman i am happy too. Was a long history in telecom of itemizing fees. Some are the obvious ones like taxes and like the universal service fund be things of that nature. Going back to her favorite law of the day the 92 cable act also allowed Cable Companies the discretion it did not mandate to have the ability to also itemize their own fees. What we call at Consumer Reports company imposed a visa its very popular now to call them junk fees but lets call them simple. That is where we are seeing a lot of these fees they are not in the advertised price congresswoman. List of 1000 bills back in 2018 we found the company so broadcast tv, Regional Sports fee you name it theres a name for all of them. It contributed 24 of the advertised price like a 24 surcharge showing 37 a month. I would hazard to guess its much more expensive today because those fees have only gone out. Thats of their hidden there hidden in the fine print. My time has run out i will submit other questions thank you very much for quick thank you very much the gentlest time has expired the chair not recognize a gentle lady from washington the chair of the full committee for five minutes. Thank you. We share concerns about the scc decision to issue a hearing designation order for the standard general and merger. This decision killed the creation of the nations largest minority owned women led broadcast company in u. S. History. It was not even brought to the Commission Level for a vote. I am concerned that the scc continues down this path they will silence of voices and heard the future of local broadcasting. What would that mean for the future of broadcast industry as it relates to mergers . And what message did this action by the scc sent to local broadcasters . Thank you for the question for your attention to this issue. I am very, very focused on in scenting investment into the local broadcast industry. I think every one of us over to talk about the local stations in your district i want more local news at local programming the stations are offering and thats only going to happen if we haveb investment in this industry. The uncertainty at the scc as to whether a transaction, a proposed transaction is going to get an up or down vote on the up or down vote is going to happen in a timely fashion is absolutely paramount to ensuring wouldbe investors will come into broadcasting. So i share your concert i worry it has a Chilling Effect we have not seen those effects yet but its very much top of mind for the local broadcast industry. As a followup, you do not want to call them blackouts what he wants to call them what to cg not available . Little call them impasses. [laughter] impasse. [laughter] when we reach these impasse and people do not have access they are not available certainly we are seeing more of that it seems. You are even hearing it today certain broadcast stations on cable programming this weekend it was local spokane station stationwere we did not have acco Important News updates and as i mentioned the seahawks Football Game on sunday. I wanted to ask you if you would just walk us through the trent retransmission consent negotiation process from Broadcasting Cable perspective respectively and what is the biggest challenge in reaching a deal . It is important to underscore the vast majority of these negotiations they are resolved without any impact on viewers. It is a worstcase scenario for all parties if a viewer is impacted because obviously we are in the business of reaching viewers. But we talked but all the competition in the marketplace. It is absolute paramount local broadcasters have the ability to reinvest in local programming, retransmission consent revenues are big part of that. At times this is cast as bike he meant against small guys one side or the other certainly i have a lot of sympathy for his smaller members. But you are at local fox station is a great example that is often time also small broadcasters going up against a large cable provider. So these things are not easy. At the negotiations ensure it local broadcasters can reinvest in the programming. So from my members perspective, there is an absolute need to fix this going forward. It is a product of the law that allowed its blackouts to come into place. He is correct the vast majority of our negotiations are resolved without a blackout that is because my members rollover and accept the prices demanded by the broadcasters. What drives the fees you see in my testimony. We really cannot continue to do this and hope to have my members continue to serve as video providers. And the more important thing i do not want this to be at re trance hearing. There are so many issues that we are stuck with it now and i would love to have congress fix it. But we have got regulatory overhang we need to deal with her pursuant to get one more question. Fumo is a streaming platform offering tv, sports a local broadcast content. We do speak briefly to how that has worked with the broadcasters to carry the local contact . Yes thank you. We carry over eight or plus local tv stations but it makes our negotiation with the broadcasters very easy. We have been ensuring we dont go into blackout but i will read you one quote from mr. Tom carter who is the former president chief operating officer of next start. This is as of march 7. We are in a dispute with cbs right now over the food boat situation tom carter said during a Morgan Stanley hosted investor conference. Keep in mind virtual contribute less than 10 of our distribution revenue. Our distribution revenue is about half of our total revenue. Fumo is the smallest virtual we deal with. We talk about a relatively minor amount of money. Quite honestly to both us and cbs. Its kind of easy to fake as a fight to have. My point here is it is very difficult to negotiate with local broadcasters because they do not own the seahawks contents. That is owned by the broadcaster the re trance the fees paid, they are quite significant number one. Number two if you look at the history of the local Station Groups they basically have been using re transit to invest outside of local programming. Next star has acquired the cw network which is not about local programming it is about syndicated content. So i dont think it is a last resort as you can see from this quote. We are very happy with the current way the model works. We have been very transparent with consumers but we do not have junk fees. We are a sports first platform. But i think it works well because people get free trout but you dont get in cable. Then we send out a reminder to customers the week before. This has been working quite well by. Thank you very much my time is expired but thank you, mr. Chairman yelled back too. Thank you for much the gentle it is time is expire the journal recognizes the gentleman from floridas ninth district for five minutes. Thank you, mr. Chairman. In Central Florida we love our sports. And options to view them which is why we are all very relieved lease on disney, espn and Charter Communications bring a deal in for a landing pal talk a little bit more about that in seconds. We also value both local content and national content. The seventh largest media market. We want to hear stories about central floridians. It is important for our citizenry to be educated on issues happening among their local government, state and federal. Whether, local sports, food, travel, arts, all critical things. We see a shifting landscape social media streaming, and in the midst of all this we see shifting revenues. These are mostly private sector deals that will evolve. But there are some values that are important for my community, local content axis diversity and affordability. Which is why we are supporters which we already heard a Ranking Member talk about. While these are primarily private sector armslength negotiations we have a duty to oversee which is why we are here today. And when necessary legislate when Public Values are threatened. Which is why is excited to see this coming in for a landing without us having to get involved in multiyear agreement. The majority of Disney Network stations will be available on spectrums customers. We will see some sharing between each other online offerings as well. These were tough negotiations. But at the end of the day, the local broadcast station was always available throughout the dispute free over the air to those viewers and the parties came to a quick resolution. But theres a lot of disruption here and i think some of the issues that were ultimately negotiated to an agreement between disney and charter demonstrate how much disruption really there is in this landscape posed by the streaming services and how important it is for local broadcasters that we are going to be accessible on those streaming services . Mr. Spilmar . Thank you, sir. The settlement as i understand it is a Promising Development for the Industry Holding out possibility of new innovative approaches may be implemented. These are private transactions but its about market power. Please dont forget about market power. Charter and disney are two relatively equally waited players in a very big with big pockets. When it comes to rest of us in the cable industry, we dont have that balance. It is a much different transaction. Theres a lot of really big players in this industry. None of them are at the table here today. You can call a broadcaster big, they are the biggest at the people at the table but the really big people are not here. I was talking to my local broadcasters last night. It would be great to hear from mr. Schwan. Streaming has been a super fast force and we have seen it reduce cost but also concerned about content creation. Where do you think the balance lies ahead as we are looking at things like the sag strike and of this balance between cost and content creation, mr. Gandler and schwan. We acquire content the same way large Cable Companies through through licensing relationships with disney, Nbc Universal and others. So personally its a shame that this is happening but we are going through a disruptive time but i think the Market Forces have been working quite well to ensure that things two on. Just to mention one quick thing, on the charter situation, you know, as the disroute unfolded, charter had offered all its customers access and promotional pricing to go to fubu and disney did the same offering customers to go to hulu to make sure everyone had access at least over the weekend. My time expired. Thank you very much, the gentlemans time expired. Chair now recognizes the gentleman from floridas 12th district for 5 minutes. Thank you, mr. Chairman. I appreciate it very much. Mr. Pressure to have more for competitors, is less money for new entrance and independent linear channels, and what does this mean for diversity of content. It does mean that its more difficult to find the resources to add independent and new startup networks. There are capacity constraints that are on Cable Systems that are consumed by the dominant cable content providers who demand that not only that you carry one channel or two channels, but these 18 other channels over here and so it does it does significantly impact that ability and does does hurt consumers as well. Theres some opportunity to two to the web and see some of those content sources there. Again, i would come back to the importance of broadband being out there. Without a Competitive Broadband Network where you have a telephone company, a Cable Company, a wireless company, a cellular company, all and the Satellite Television delivery, you have potentially 5 people in a market that can alabama that content in and thats the biggest change thats changed in the last decade for this video marketplace. Thank you, sir. As you know, my district my constituents were recently impacted by the hurricane, hurricane idalia. I thank you and our local broadcasts for keeping our communities safe, before and during and after the storms. As we discuss todays competitive landscape, do you see the Bigtech Companies performing any of the same protective services and i want to thank all of you for your testimony as well, so if you can respond, i appreciate it . I dont, its local broadcasters uniquely on the ground and i appreciate your acknowledgment both on the grounded both during the storm and then after helping the communities come together and i i dont know that i can overstate how much some of the changing landscape that we are talking about here is going to impact that local. As mr. Spellmeyer, Small Companies are exiting the business or considering exiting the business. Mr. Gandler told us that hulu is getting into the business. We know that if we hearing ten years ago, now fifth largest linear provider in the country. Frc needs to look whether local broadcasters, this is something that the Expert Agency needs to provide a basis for examining. I tell you what, i want to put a plug in for Dennis Phillips who is a local broadcaster, weather man in our area, abc action news. His son was in tallahassee, of course, the university. My son was at the university of florida but he was getting his personal, the hurricane was actually scheduled to hit tallahassee and and the parents were very concerned and he put them at ease and thats a great thing. I have one more question, i dont know, i have a little more time. Mr. Mr. Spellmeyer, over the years as the marketplaces exchange and callers have tried to find ways to support small Market Participant to collaborate for retransmission content agreements. Have these mvpds seen the success that we are hoping for and what are the differences. Thank you for the work to work through nctcr buying to try to negotiate stuff. The last cycle after passing of legislation and it was brandnew and the first cycle we are about to go through another cycle and i think this cycle will judge how effective its been. Obviously look at the pricing. It hasnt slowed down in terms of increases. We all want local broadcasters to succeed. They two to the Grocery Store in the weekend. We want to local coverage and we try to use community access, channels and things like that to promote it. We are all in this together, but we have to reverse some of the fundamental structural problems that were created by the passage of the law and the change in technology. Well, thank you very much. Yeah, thank you very much, appreciate, yield back, mr. Chairman. The gentleman yields back. Before we two to our next member i want to let the witnesses know that we have a subcommittee sunning right now downstairs so we have members coming in and out and thats why you see members up and town in all the chairs, running town ask their questions. I have to recognize gentle lady for 5 minutes for questions. Thank you, mr. Chairman. Thank you for Ranking Member as well for holding the very important hearing and all of the gentleman that are at the table, thank you, for your testimony. I think if theres one thing that i would say for sure about this hearing is that we have a real problem with blackouts and it is congress that needs to cure that. Consumers are being hammered. It is totally unfair. People think of themselves being innovators and entrepreneurs. What an idea, what is this . Congress hasnt updated statutes that govern all of this, they are outdated and regulations and contribute to discourage of blackouts. Congressman scalise and myself have introduced modern Television Act in the last two congresses, we will again in this congress and it would reform the existing regime to present blackouts and allow free markets, contract negotiations to happen under traditional copy right law and our contingents. We can cast light on this and get it done. Can you affect consumers . As you know Consumer Reports have supported your legislation. Thank you. Its kind of i will be succinct, definition of insanity, keep doing the same thing over and over and get a different result. I do like copyright. Dont judge me, i was on the Judiciary Committee for years on the senate side. We like copyright law. Its not going to be super clear and realistic and would not prevent blackouts. Its still is a private contract negotiation. I like the arbitration in the law where instead of going to a blackout and you miss the us open and potential monday night football, you can keep the station on for 60 days an figure it out, im hoping to try new things. Im not repping charter they are going up against disney. Charter is Second Largest Company in the country but its not youre negotiating for abc, you to take all of those channels and come up with a package for that, some observers i have seen, lets just make, you just have a negotiation for the local channels and other the cable property, you can in separate negotiation and take a look at local channels and theres different level of incentives and more to what the Virtual World is a copyright world. Mr. Spellmeyer, you talk about the loopholes that allow broadcasters to purchase more of the one top four stations in the local market. How do the loopholes and the resulting consolidation in local markets contribute to blackouts. First of all, do you think they do, if so your view on that and how else does a station consolidation negatively impact consumers . I believe as ive talked earlier this is about market power to the extent local to the extent any entity is allowed to acquire and control more stations, more content that only sets the stage for an abuse of of market power. There are a number of terms that i know fly around the industry, things like side cars that is a discussion about how you you own somebody but you dont technically control them under fcc definitions. Theres a bunch of manutia, im trying to sort of history through the 20 years of fcc but i fundamentally agree with you, Congress Needs to step and the fcc cant do it. Congress needs to fix it. We applaud you and mr. Scalises legislation, you have been pushing this for four, five sessions now and i dont think the situation has gotten any better. No. Its deteriorating. You can see it in my blackout charts and it is an important topic for the committee to address. And to the witnesses that i havent asked questions here, youll be receiving mine in written form, appreciate all of your testimony and with that, mr. Chairman, i yield back. The chair recognizes the gentleman from the Fifth District for five minutes. Thank you, mr. Chairman. Thanks to the panel for being here and thanks for the service that is you provide. The video marketplace has changed dramatically to say the least, even the last few years. Consumers have more options than ever to customize what works best for them based on price, content, connection and more as they ought to. I myself use over the air service to get my wonderful local broadcast channels. I hope that doesnt shock anybody. [laughter] i also have accounts for streaming as well. This plethora of options is letting the market work without heavyhanded government interference, competition for programming and viewers is robust and in this environment we should be looking at ways we can make the marketplace even better for our constituents. Mr. Regeyt, we heard the term retransmission consent and consent fees cited as the reason that mvpd prices are so high in comparison to several virtual mvpds, can you please describe what is driving the cost of consent fees . Thank you for the question. Local broadcasters are competing for expensive content, we are competing for dollars and behemoth. And the reality is, we compete with everyone. And the only way that we have the dollars to reinvest in local programming and, you know, i think in some ways the proof is in the pudding, over the last decade, local news has increased by 78 in markets across the country, the time spent on local news coverage, we need the retransmission consent fees. The cost of doing business has gone up for all of us at the same time that the competition has become more fierce and this is really about being able to reinvest in the local news, local programming that serves as anecdote to type of information on social media that you are concerned with. Very much. How has cost of broadcasters versus other programming changed over the last several years and secondly, is it more expensive to carry broadcast content versus other channels . Two very good questions, sir. I direct you to the last page of my testimony. Ive got a chart that documents aggregate transfees, members that is mediumsized provider. Its 2023, 27 a month across the four broadcast networks. So its substantial. I honestly do not know the answer to the question as to what my members on average pay for pricing to other content providers, as an association i try to stay of the details of pricing in the marketplace but i can direct you to the second chart which talks about aggregate programming hitting 80 a month in that particular local market, so, you know, it might be it might be a third of the total, and i think there are a couple of of networks such as espn that are particularly expensive for my members to acquire. All of its driven by local as i cited by sports, not local, sports programming drives all overall programming to a considerable extent. Surprise, surprise. We all love sports. Thats how we got to where were at. Thank you. Fubu isnt under the regime as mvpds and service like yours carry the broadcast channels that my constituents rely on for our local news, sports and weather. How does your negotiating process work . Its quite complicated as you can imagine, sir . Make it as simple as possible. You dont have to kill me if you tell me. Essentially, we are negotiating with the four Largest Media Companies that own the broadcast networks and as part of those negotiations they also act as process in retransdeals. Its important to know that if you look at retransescalaters, right, obviously we started a much higher price than any of the previous groups whether its telco, cable or satellite but our escalators if you look over the 7 years since we launched platform, we are well ahead, multiple ahead of inflation rate and that includes 2021 and 2022. So its quite expensive. Well, thank you very much. And thank you for your questions and just to let everybody know, the when they set up today, they did not put the box in front of you can the lights. The only light that we have i guess what we have to start doing when time expired you will hear so you will know. Im sorry that they did not put the boxes in front of us today and its for you as our witnesses, sorry about that. The next member to ask questions is gentleman from californias 29th district for 5 minutes. Thank you, mr. Chairman lara and Ranking Member for holding our hearing and i want for expertise. Consumers can watch antenna for free or increasingly consumers can turn to streaming. Streaming has allowed diverse content to flourish something consumers have been waiting for. As usual in the media economy latino consumers lead the way in transitioning to streaming services with 43 46 of latino audiences watching tv via streaming last year compared to around 35 of the general audience. This shows the value of having diverse inclusive content in a variety of languages including spanish. Accessible across mull approximately platforms. Streaming has also given families options when deciding what they spend their resources on. This type of content choice is not possible without streaming platforms. Knowing that this shift in Consumption Patterns is happening, we need to meet consumers where they are. We need to make sure that viewers can watch the shows they want to see and get connect today trust worthy news that is relevant to them and have flexility to choose how they consume their media. Mr. Schantes, as you talk about there has been a boom in Consumer Options and accessing tv content, we all agree that the consumer should have flexility and choice. Not so long ago, local news and video content you had to be in front of a television at a certain time, can you talk about the variety of options where americans can consume local news and video content which is critical for communities like the ones in my district, hi, lower immigrant and immigrant communities . Thank you, congressman, thats a great question. Mvpd, cable, satellite environment, consumers can record and watch at their own schedule, in the streaming environment from what im familiar on streaming platforms there are apps called astack where you can watch local news from across the country. I grew up in North Central wisconsin and i miss my local news. I can use app to access local news. For all the reasons we heard today. We support local broadcasters. I agree its the best defense of misinformation as mr. Legeyt pointed out. Can you talk about the boom of Video Streaming Services have affected to affordable nonenglish language programming . Sure. Part of what we do in Consumer Reports review all kinds of things and we do look at platforms and we recommend them and we go through the prices and how they work, et cetera, what we discovered in the last couple of years univision launched they changed name, its vix, 6 a month for ad free but they have its well, like a mvpd, 50 channels but children programming, live sports a lot of soccer, content from brazil, colombia and mexico. Thats a steal. Free its free if you want to put up with the ads or 6 bucks and that has hundreds of thousands of programs and its all in spanish. I will say for the other streaming platforms, theres a lot of when you go through the menus theres a Spanish Language option so you can look at the program as well and lets not underestimate the value of subtitles. Growing up in my parents are immigrants from mexico, when i heard the word vices i thought something was going to be rubbed across my chest. Vicks was the solution. On the topic of multilanguage with streaming being so available and it being available to all income levels, what what do you see today and tomorrow looking like when it comes to more accessibility in that sense or less accessibility and if theres a cause and effect more or less what are the main factors . Always succinct. I see more accessibility but depends on giant assumption in the room, broadband. None of this works without affordable broadband connection. Consumer reports are supporting Connectivity Program and thats the best way to get lowincome americans online. I dont think anyone on the panel would disagree and thats the key to streaming. Okay, well, we did more in the last couple of years when it comes to broadband in american history, hopefully we will continue the trend in the future. My time having expired. Thank you very much, mr. Chairman. Thank you, mr. Chairman and thank all of you for being here. This is extremely important. Obviously in this video marketplace what we have seen over the last 30 years has been amazing and transformational and no question about it. We all recognize that modernization is imperative and thats why this hearing, mr. Chairman, thank you, is so timely. Mr. Spellmeyer, i want to start with you, different sports leagues, nfl, go dogs are obtaining significant media rights and thats causing disruption in leagues and and just the media fees that, the media right fee that is tv networks are obtaining, how does the rising cost of sports media rights affect Cable Companies. Its directly related and driving it. Ive acknowledged that. It start with the nfl and what that does do to the both broadcast cost as well as lets call it espn and amazon cost and it goes from there. The nba drives tnt and tbs costs and it gets passed along to my members in a take it or leave it situation. I want you to understand. This is so constrained, they stop us, the contracts that we have to sign stop our members from telling anybody what the price is we are paying for it either separately or in the aggregate. People question retrans fees, we want to label and put retrans fees that in the aggregate it cost you x for all 3 channels or, you know, 12 for abc and im picking that out of the air. That gets us back to customer choice. We talked about a la carte, lets decide consumers get what they want and where to get it from and understand the content providers are the ones us to bundle this together. The nfl is causing you . The nfl has done very well under mr. Gadels leadership and you see it in players salaries and you see in team valuations. Okay. I want to ask all of you, the majority of the panelists here today, you either create your content or you distribute content or maybe a combination of both. Should everyone on the panel have the same Regulatory Framework, is that even possible . I will start with you mr. Legeyt. Sports rights are the elephant in the room here. When we talk about the costs of putting on the product that are putting pressure on everyone in the media landscape, my networks, my affiliates, television radio, it is sports rights because as all of the viewing is getting defense aggregated, the viewing that has the most value especially to most advisers the viewing in realtime and thats sports. Sports are the programming that you dont dvr it and watch it later. It has a lot of value. Thats putting pressure on all of us. In terms of the Regulatory Environment i do think all of this is complicated but theres no doubt that the Regulatory Framework that has enabled local broadcasters to negotiate retransmission consent which traditional paid tv and Satellite Companies for the last 30 years has resulted in tremendous investment in local content and local news to your community and the fcc at least needs to examine whether as audiences are migrating to streaming that that some element it was Regulatory Framework may be relevant there. Okay, mr. Spellmeyer. 36 seconds. Yeah, im sorry. We desperately need a level Playing Field. We need we need antitrust oversight, competition oversight, we need a level Playing Field. Theres lots of ways to do that. You can see this is immensely complex and my opening the message in my Opening Statement is be careful what you do. This wont be a bill that we can pass in one legislative hearing but its going to take some time but it does need to happen or the prices will continue to escalate, blackouts will continue and consumers will lack choice. Okay. Thank you. Im out of time, thank you very much, i yield my time. They failed to put the white boxes in the witness table. I will bring the gavel down when the time has expired. Our next member to ask questions the general lady from texas. Thank you so much, mr. Chairman. Thank you for holding this really important hearing. Its been very interesting and i appreciate all of your testimony and perspective. There are a lot of things that have come up and i think its been pretty frank conversation which is useful because i think it is it is complicated and looking at it from the policy perspective, we have to understand the things that are good ideas and the things that are not good ideas. Definitely want to hear more about that in your conversation with congress ahoo and i want to follow up on something that you said, when you were talking about the al cart provisions and options, thinking about it in a consumer perspective, certainly i hear my constituents to say they have choice to pie packages on things they dont necessarily want. They would like something. I know thats one of the suggestions that you made mr. Swan, have very basic package that people can get but what do you think is the likelihood given the landscape that youre in that we are going see that kind of al cart selection when it comes to your members and is that something that is going to be dealt with, do you think thats something thats possible in the policy space and in the legislative space that we are talking about here or thats going to just continue to evolve as the marketplace has so much over the last decade . Yeah, so we have tried for several decades at aca to push programmers to allow us to do a la carte and it is consistently rejected. You take the entire programmers, bucket of content and you have to put it all on and so that i believe its part of the Charter Disney thing. Theyre not a member of mine. Based on what i understand, they made some progress in terms of getting disney to allow them to offer a couple of packages. Maybe a little bit of movement there. But my members without leverage, sorry, take it or leave it. Thank you for that. Mr. Swan, i want to come back to you because i appreciate your written testimony and suggestion that is you made and you said in your Opening Statement as well in your testimony that we need to be thinking about what is working and whats not working. It piqued my interest when you said there are things you couldnt to. That kind of insight how much youre studying the marketplace and understand what Consumers Want and what sort of a reasonable landscape and im particularly interested in what you dont support. If you want to share with that and open it up to you on things that are working and are not working. What should be our priorities as we are doing this work . Like fubu and youtube tv. The proceeding was started in 2014 and i do agree with my other friends in the panel that the world has changed significantly in nine years but i dont think taking an old law before we even thought about the internet and applying is the way to go. That said and this might surprise some folks, we think less regulation could be a good thing but we have to agree on some core things. There are great things in the broadcaster and cable world that dont apply to youtube tv and mvpd like privacy protections. That is something that we have sprong privacy in cable and broadcast world. The things like that. Price transparency. What are we going to do on privacy, what about diversity . Lets have a conversation about media ownership caps. Bring it back to low cost. Basic cable was a creation from the 92 cable act. The local channels, that was designed for if you want nothing else, you get that. If youre allowincome household, if you want your basic channels. Which one is waying for which and so those plans, i mean, i dont have the numbers off the top of my head, its not cheap at 50 or 60 bucks a month. Thats the conversation we need to have. Lets start over. Its complicated and its tough. Well, thank you so much for that, thanks to all of you. It is complicated and with five minutes none of us can really get to all of the things that we would like to cover but i appreciate your insights and i think this is a really important conversation to have and i thank you, mr. Chairman, and Ranking Member mahoi. The chair recognizes the gentleman from pennsylvania for five minutes. Thank you, mr. Chairman, thank you for holding the hearing. I think its an important topic that resonates in america today. It has been too many years since we have addressed the issue. Weve recognized that and addressed today and the video marketing, the Video Programming market has drastically changed since then with the ad streaming and media options the consumers are embracing. My gents in pennsylvania 1 district are some of thousands of americans negatively affected by tv blackouts and at this very moment join this very hearing four counties and 350,000 constituents of mine in the johnstown area without cbs from critical weather alerts to investigative news and information within the community, local journalism is the backbone of america especially in rural pennsylvania. This blackout along with others underscore the problems that the industry and consumers are currently facing. Mr. Spellmeyer, what reforms do you anticipate that this market will need to prevent blackouts from occurring and create sustainable access to local news . Thank you, congressman joyce. I will say that im going to try to keep this at a high level i figured someone would ask me a question about how do we fix this. I think we need an equal footing for all players in the marketplace. I think we need to protect consumers from the run away rates that theyve experienced over the course of the last two decades driven as weve discussed by sports programming and other small segments to have market. And the third the choice is a priority and thats where i discuss a la carte here. I have hit 3 that i outlined in my note card but if we dont theres still those blackouts are real. I know that consumers in those marketplaces have the opportunity to go and still grab over the air signals but how many of us have rabbit ears laying around and do you know how to unplug the back of your tv and plug that one in, i dont. Mr. Spellmeyer, addressing a different issue, the cost of getting content is also impacted by the cost of fiber that we are building. So the Regulatory Environment that isnt actually so excite to go some people but important issues like pole attachment fees, access to right of way, content costs are one pay juror component of the consumers bill but so the actual cost of building, maintaining and upgrading the networks, so do you feel that permitting regulatory relief would be essential to your business . Absolutely essential. My members have been really busy over the course of the last five years, over the last course of five years we have grown, the numbers of homes passed in the aggregate by onethird. We did that during the pandemic. We are focused on building broadband. The Biggest Issue that we hit, ive been out meeting my members over the course of last 18 months as i took this job, the number one consistent issue that comes is not retransmission consent, it is cost of access to rights of way and what we need to deploy the broadband assets and it can be the subject of an entire additional hearing and its the most talked about things that i get. Mr. Legeyt, in your opinion, which regulations do you believe have a detriment to your business specifically . Thank you for the question, congressman. First and foremost, the idea that local broadcasters compete and are restrained, the restrictions on our scale, 39 ownership cap on our ability to reach National Audiences in the country local ownership rules that impact our scale, you know, we are in a world where we are competing every day with youtube, facebook for advertising dollars. This is stifling our ability to compete for those dollars and similarly and no one here would suggest that the system is perfect but the retransmission consent system has enabled local broadcasters to invest in local programming, local content without it we look a lot more like the newspaper industry and i think everyone in this room knows how that story is ending right now. It has been critical to enabling local broadcasters to invest in communities, invest in news. The shift of audiences from cable and satellite over to these, you know, Cable Replacement Services, the vmpds is going to impact those revenues and this is something that the Expert Agency, the f cc needs to take a look at. My time has expired. I thank all of the witnesses for being here today. Thank you, mr. Chairman. Thank you, the gentleman yields back and the chair chair recognized the general lady of the sixth district for five minutes. Thank you, mr. Chair, and thank you member matsui. We are all talking about a lot of issues and we can probably use more hearings on because the media listened escape has changed so much since our last hearing on this topic and we should talk about what congress should be doing, theres so much we can talk about but im going to focus on the state of programming for children. Our best local broadcasters often remain the backbone of our communities, not only providing critical journalism, emergency alerts and contributing in other ways beyond the screens such as hosting Community Service projects, job fairs, i love all of my local stations and Everybody Knows that. For years broadcasters were the Gold Standard when it came to trusting childrens content from sesame street to saturday morning cartoons and everything in between. We newbie in large that when something was in local broadcast channels, there were standards in place to keep content safe for our kids. With the Police Officer occasion of streaming, they have never been more options for parents looking for programming for their children. Unfortunately while theres a lot of positive educational on lying content, one can also find some pretty dangerous rabbit holes to serving imagery, programming with little educational value, excessive commercial and online spaces that children are frequenting. Moreover we know that still too many families do not have broadband and is required to access all of the new online content. Many still rely in traditional platforms like broadcasting and cable to access Educational Programming for children, intood at the height of the pandemic altered to reach families without broadband or commuter access with ageappropriate programming. It was a lifeline for families in a challenging time. Mr. Swan, can you speak to the state of childrens programming, what advice for parents navigating this difficult landscape . Weve had laws on the books since 90s, regulate the kind of content. Unfortunately some of those rules were relaxed in 2019. They can air earlier on the weekend and they no longer need to be 30 minutes in length and we lost the trust mark. Ei, a parent could see that was Educational Programming. I agree that the migration of streaming is one of the dark sides that weve seen. We have our friends at common sense media, they cited a survey taken by pew that 80 of parents do put kids in front of youtube for childrens content but 60 were i saw things i didnt really like and also the advertising. In the broadcast world that advertise asking regulated with regards how much advertising can occur during childrens programming. I think its definitely what do we value in healthy marketplace and this is a huge issue and im glad that you raised it. We have one minute and 30 seconds. Mr. Leyget can you discuss providing high quality Educational Programming to local communities . Absolutely, thank you for the question and great to see you. This is one of the core tenants. Our commitments to family makes unique in the landscape. As father of three under 11, im proud to sit down on sunday morning or after school and be very comfortable that the programming that my children are going to consume on broadcast television isnt something im going to need to turn the channel on and broadcasters very much serve as a strong alternative to all those diversions online that we are concerned on. The rules that were referenced a moment ago, have been beneficial for local stations ability to provide children with the programming in the form and at the times and in the length that they are going to be most likely to access it. I mean, our kids viewing habits have changed, asking a kid to sit down and watch a 30minute program, thats not what my children are doing these days and broadcaster have been able to provide children thanks to reforms and i appreciate your work on that. That is going to meet them where they are. Thank you. Children in the United States account for 22 of the population but 100 of the future and this matters, mr. Chairman, i yield back. Thank you, the general lady yields back. Thank you, mr. Chairman. Let me get over here to the mic. We need to raise the chairs a little bit. Maybe update them. [laughter] but thank you for holding this important hearing and as mentioned, its been a long time, 3 decades since we passed the cable act which was last updated and, of course, the state of the marketplace has changed drastically and i have to admit i was a part of that i was a guest and part of that deal where we didnt get to watch football, so i tried your one Month Free Service and i have a deal with that later. But anyway [laughter] it was very frustrating but i got it done. I was the hero of the group, let me tell you. But, you know, cable subscribers are really confused. I mean, like i said, all of a sudden and technology has become very frustrating and, you know, you have Internet Streaming Services like fubu and you get more competition in the market. You have Television Broadcasters have great 21st Century Technology like the atsc3 tv and that they are prepared to fullyy utilize. This is a time of great disruption in this market and i think we talked about a great deal today, obviously the blackout is the subject in how annoying that was right before College Football season and, again, i like the information about the fact that its sports thats controlling this. You know, this weekend, you know, many of my constituents, we are not able to watch some of the most popular Football Games and and, you know, im sure our phones are burning up saying, hey, you have to fix this. And but throughout the market changes, National Media continues to plummet. To be honest with you nearly three quarters of u. S. Adults say news media is increasing Political Polarization in this country and just under half say they have little or no trust in the medias ability to report the news fairly and accurately. And on top of these stats, political ad spending for 2024 is expected to shatter 10 billion. More than 3 times what it was in 2016, local journalism has never been more important with Americans Trust in that institution remaining strong. More than twice as Many Americans have higher emotional trust in local journalists than the National News and i experience that in my own district. As Congress Reviews federal regulations of the video marketplace its important to improve competition in the marketplace, remove redundant regulations all while protecting local journalism. Questions for the entire panel, from your perspective, how would the video market change if congress regulated all of it like traditional Cable Services are currently regulated and we will just go from left to right here . I think this landscape is is far too complicated to paint with a broad brush and so what we have been advocating is for the fcc to take a refreshed look at all of this, to do what this committee is doing today, look at all these changes in viewer habits and assess the impact on localism. There are some really important vestages of the regulation that is have governed the relationship between broadcasters and satellite systems, we transmission consent during the last 30 years has been critical to reinvestment and local but there are some regulations that are clearly outdated, the most significant of which are capping on our ability to gain the type of scale that allows us to better compete with youtube. I only have 40 seconds left so we have to go really quick. I will go fast and say prices will go up and confused consumers will be even more confused and concerned. I will have to agree. I will have to agree, prices will absolutely two up. Retrans would require you to negotiate the same sports deal price, once with the national broadester and then again with the local affiliate and all of those deals are specifically set up to expire right before football season. And i will quick, higher prices for consumers and more blackouts or impasses. Well, consumers are not going to be happy about this. Okay. With that, i yield back. The gentleman yields back and this time the chair recognizes the Ranking Member of the full committee for five minutes. Thank you, mr. Chairman. Its been said already several times today that the public is consuming video more than ever whether its for news Sports Entertainment or education and in many ways competition and choice that theres never been a better time to be a consumer in this market but in my opinion consumers should be at the heart of the discussions annie Committee Work should be focused on helping consumers in the marketplace. Let me ask mr. Swatsen, what types in the marketplace affect consumer sates fiction positively or negatively and how do we make the Services Affordable for all consumers including lowincome consumers . The good is more content than ever before. If you count both linear and streaming, the number of title available is 2. 7 million programs. Thats up like a million in just the last couple of years. So that is mindboggling and just the kind of choice. Theres all different kind of streaming platforms and have different packages of content that is not like the traditional cable. Thats the good. The bad, we touched on it. Its junk fees and the cable tv market and large part due to rising costs for broadcast television and unfortunately those fees are not included in the advertised price and so that 25dollar broadcast fee, thats the gotyou moment on your first months bill. What else . I will say the ugly are blackouts. I think we have spent a lot of oxygen on that today so i will pass over that and then in general is broadband. We have to none of this works without broadband and we have to make sure its affordable in this country and thats why, you know, the affordable can he believe thivity program is getting more lowincome consumers online but also in the streaming world, yes, some things are more expensive than others but there are ad supported apps that are free and Consumer Reports, we review this every year and i would be remiss to mention and i do agree with curtis, we recommend to consumers the money years are antiquated. If youre lose to an urban area, you may be getting highquality television over the air for free. Let me Say Something else, let me mention, i certainly am a big advocate for local journalism. Im sure thats true for all members of the house of representatives because we want, you know, local journalism and that, you know, i think provides our best local broadcast stations that are providing the best local journalisms. I worry that Online Platforms and social media spread a lot of misinformation, disinformation. But you have the Public Interest obligations require broadcasters to promote localism, competition and diversity and thats why we trust our broadcasters more than unregulated social Media Companies. So mr. Swantes, do you agree that the standard for broadcasters is part of the reason why broadcasters remain as the most trusted news sources in the country . I do congressman. Absolutely they have an obligation going back to 1934 communication to serve local communities and part of it is trust and standard of journalism that we support and complicated when you talk about the online world but thats a good place to start. Thanks, mr. Legeyt, you want to add anything to that . Thank you for acknowledging the obligations. The public obligations are at the core as who we are as local broadcasters. Ranking member matsui raised the point of digital equity. We are freely available to consumers of all socioeconomic stripes. So our ability to deliver trusted information, the most local, combined with our networks, investment in muchwatch entertainment, mustwatch sports, its the most incredible Value Proposition. This land cape we can talk about the Regulatory Regime but we shouldnt lose sight of the fact what we are doing in the local community no one is doing right now. Thank you. I yield back. Thank you very much. I just want to say that before you figured out that we had a problem with the witnesses not having lights, the chair did go over, ask another question. All right. [laughter]. The current marketplace is unsustainable. We sought to impose original sportsnet fig to cover costs associated with local sports coverage. So my question is where you think this is trending . As a current Business Model sustainable . You think over Time Streaming services will start to look more like some of the more traditional options . Yes, think of your question. First of all we offer free trial so people can test the service. And ensure they enjoy the content they are receiving. Moreover we are offering reminders to customers before the trial period is over reminding them they are going into a paid service momentarily. Last but not least we highlight the Regional Sports fee prominently in the flow. Whats we understand what geographer you are and pray there is an overlap of differeny have seven, eight, nine teams. Madison square arden has five hockey teams. Once we understand at dhec check out flow to prominently provide that. I think the market is very strong. Although it from free to 80, 90, 100 over corporate people can consume contents. They could readily switch services. There is no friction. Theres a lot of value in what people provided. What i will say most importantly is the bundle is can bring the average food bill customer watches over 100 hours of programming per bunch. People like to have all their content in one place, thank you. Thank you, thank you, mr. Chairman print thank you very much the judgment yields back. The chair now recognizes the gentleman from ohios 12th district for five minutes. Correct thank you, mr. Chairman. I dont have a question for you but we were just talking but ive no disrespect sir but i live in Southeastern Ohio i got an email from a Charter Spectrum on the side it says hey, get a hole of fubo do a free trial. Thank you spectrum is out there helping you. [laughter] i did the same thing. Are right thank you for being here too. Several live tv streaming situations vm vpds have begun offering skinny bundles that provide their customers a small bundle of a lightly tee the options offered choice. Obviously we would like everyone to be able to compete in this marketplace but in this respect and as mentioned and his testimony at the new services can offer more choices to consider as the data Shows Consumers are taking advantage of the flexibility. Can you explain why some traditional tv providers do not offer the service to their consumers and what can be done to provide more Consumer Choice and promote competition in the industry . Practice i have discussed at several points of this hearing a it goes to the issue of Consumer Choice i will call al a carte or skinny bundles or small packages. Might members are pushed hard and sue programmers to try to get that over a period of time of a decade it. They content providers will not let us do it. Ill talk about market power at my guides are small, role they serve a county or two. The program must look at them and say it not going to let you do that. Now, youtube tv has had some success in breaking that model. In part because they are Google Google has a lot more market power than cable does in missouri. That numerous providers we have in ohio. We just do not have the power to break it its good for consumers we have talked about that extensively, we should try to do it thank you. Quick thinking for being here. The immediate market serves a large portion of my Congressional District that i represent has five local broadcasters broadcasting their content on hd channels. Ats e3. 0 also known as nexgen tv. In your test made touch on nexgen tv the benefits it provides for tv stations and consumers. Can you discuss the viewer it benefits given update on where mitigation to next janet tv stands . Absolute congressman. We are tremendously proud of the rollout going on across the country of next Generation Television parade this is an upgraded over the air standard that will allow viewers to access for free a 4k picture immersive audio more interactive programming, hyper localized weather and news. Make no mistake returned about the future of sports the future of. Our ability to provide that type of your experience as table stakes to ensuring we can maintain our audience versus the appletvs on the amazons of the world. We are deployed in 78 market 65 the country can access some sort of next agenda television. We are in the midst of these to because its tough as opposed to an at t or verizon who could upgrade to a 5g we need an entire industry rowing in the same direction. When he Consumer Electronics industry on board when he consumer groups on board we are very supportive of the scc recent launch and partnership with the future of Television Initiative thats enabling the transition such a framework to get the transition from where it is today to completion nationwide to every consumer can access the benefits. Thank you very much. My last question the 2014 scc notice of proposed rulemaking regarding has been frequently discussed leading up to this hearing. You mentioned in your testimony of these rules were adopted the cost of fubo tv Similar Services would increase being passed on to the consumers ive heard similar concerns from across the industry. Could you tell me why being regulated would increase costs and how significant that would increase would be for your business and consumers . Im going to stop him out of time if you could submit that answer it would be great well get that to predict thank you pe in much the gentlemens time has expired the chair now recognizes a gentle lady from new york for five minutes for a quick thank you very much mr. Chairman party thinker Ranking Member for holding this hearing as well as our panel of esteemed witnesses for joining us today to discuss and examine the everchanging industry. Television was once an industry comprised of just a few local broadcast networks delivering a limited number of Linear Television channels but local consumers over the air at no cost. Its morphed into the multibilliondollar video marketplace of today comprised of broadcast network, cable, satellite providers and online video distributors offering both linear and nonlinear program through a variety of platforms beyond the traditional set. Unfortunately too many of the platforms are old or controlled by a handful of multinational corporations with complex often competing financial interests driving corporate decisionmaking with the ability to impact to millions of consumers. While corporate interest technological advances from policy choices that lead to the current state of affairs have undoubtedly unleashed unprecedented Consumer Choice for middle content consumption yet remains much work to be done by both the policymakers and the private sector to ensure the longterm viability of the sector. Competition Consumer Choice will likely be a topic of conversation today, i want to focus on diverse and independent within the video marketplace and medial echo system more broadly. Diversity end media goes beyond mere representation. Its about including voices from disher ratio gender socioeconomic and cultural background reflecting tapestry of experience and perspectives found across our nation. Moreover a diverse immediate landscape can create Economic Opportunity the historically marginalized community and is essential for a healthy democracy by ensuring citizens can make informed decisions on critical issues. Given our nations important history of discrimination and withholding of opportunities of marginalized communities we must take care to not entrench the inequities of today when crafting policies that spur the innovations of tomorrow. We all must continue to support policy that encourage diversity in media and i look forward to introducing legislation in the coming weeks to do just that. My first question is directed. Thank you for joining us today. I understand the difficult broadcasters are forced into larger conglomerates use streaming services to compete for market share. The Important Role broadcasters play as trusted sources for local news on a daily basis without crucial lifeline of times of emergency cannot be overstated and i thank you. How might the suggested scc reforms you mentioned in your prepared testimony in terms of both content and ownership. What would you say are the biggest obstacles with increasing diversity across the immediate landscape . Thank you for the question congresswoman. Diversity in media is top of mind and across the industry. We are advocating for reinstatement of the Tax Certificate Program to incentivize sales to diverse broadcast owners. We run a broadcast Leadership Program out of our foundation that ensures the leadership in our industry better deflects the diversity of the communities we serve. We are hyperactive in toolkits for our journalists across the country to in sure but none of this will impact what is on the screen reaching living rooms across the country for the broadcast industry is not that one that would be invested diverse investors are willing to come into. And so we need to ensure we can gain the scale to compete with the youtubes and facebook of the world look at broadcasters are subject to ownership restriction that no one else in the immediate landscape is subject to a grid that shows investment. His uncertainty as to how broadcast transactions will be reviewed at the scc what the timeline will look like but with that they will receive it up or down vote. That shows potential investment. All of these are areas of focus for this committee to ensure greater diversity in broadcasting but. I have four seconds of you gentlemen would submit to me some of your thoughts in writing that would be externally helpful with that mr. Chairman i yield back too. Thank you very much the gentle late yields back. The chair not recognize a gentle lady from tennessee for five minutes. Think it mr. Chairman. I think the witnesses for being here today. Really, i do not know i have a question i just want to go over some notes i have you tell me if im wrong. Yes, i do have spectrum i could not watch the ballgame i dont know how rick got fubo for a month and mindset a week. [laughter] fubo for a month and mindset a week. [laughter] your cable bill. I have not gotten a notice. I didnt sign up im just saying out to my sons and watch youtube tv. Anyway. [laughter] [inaudible] let me see if ive got all this right so we can regulate or deregulate. We got decadesold regulations it stifles traditional tv providers and streaming platforms are able to flourish in a deregulated market so you said retransmission fees are basically under a gag order i call it that because we do not know what they are charging. You said we need to reinvest in local programming. You all said we need al a carte system and a service from content providers who wont allow us to have that right now which i would love to have that. You all said sports rates cost a whole lot of money is putting pressure on the Program Providers due to realtime viewing and advertising use of the scc needs to examine retransmission consent is a number of customers go to streaming. Did antitrust and oversight and i do have a subscription to Consumer Reports to just fyi. Dont supply cable actives to active streamyou prefer less ree bottom line eight we Price Transparency more freedom of choice in my correct . Anybody can answer our. Yes it paid. Yes okay. Are paying careful attention. I am a pharmacist i have to have the details correct or i could kill somebody. [laughter] just like the month versus a week. I will look that up. I look at what we do what you do. It is sent National Security issue when it comes to like the fires in maui we have have the am radio. We have to have an infrastructure that will report all of that. Live in a rural area where broadband is imperative to getting streaming. I look at what their weddings with the vehicles now i only have streaming the people i serve, they drive gasoline cars and they listen to am radio. We have to have that as an option and choices. Competition makes everything better and it makes everybody better. That i get anything wrong . I hope your answer is no. A note. Okay good i will continue my subscription. Thank you for being a subscriber to consume your reports with the issue on the cable bundle and maybe i can answer since im not a Cable Company or a content provider. For many, many years the cable bundle and go back to the 90s or 20 years ago. Sobol all of the channels we know, there arent too many independent channels out there. Disney owns i dont know if the top of my head 10, 20 channels . Why didnt i get that deal over that they would not allow that back on the network. Owes part of the deal they got with charter. It is sort of like what do we like . What are we willing to sacrifice . For that we have to as the ceo of charter. But oddly big it must have a programming with its local channels are gold for local broadcasting and live. It is on thats driving a lot of costs and all across industry. All of those big fees paid to espn subsidize and the smaller channels the fear and im not smart enough to figure it out. If you have them al a carte those channels survive 58 Million People in espn for 500,000 want nat geo wild. A really fun one. That cannot sustain if you tell you could only survive on what you get from subscribers and though be like maybe it was the thing no one wanted to talk about. Okay im out of time now. I will talk to you guys later. I yield back at the. A gentle ladys time has expired. Leach out chair now recognizes the gentle lady from New Hampshire for five minutes. Thank you very much think it mr. Chairman i want to thank the hearing for its important fits. This discussion is timely as many households in my districts in northern New Hampshire are currently experiencing consequences of a breakdown in the tv marketplace. Over this past week ive heard directly from constituents who can no longer Access Channel nine news due to a blackout at the local broadcasting station. On their cable tv provider. Rely on to get their daily weather and traffic updates, emergency alerts and to stay uptodate on whats happening in their community and across this country. Let me be clear this a blackout is the result of a business contract dispute but it is the consumer who gets caught in the middle and pays the price. You stated blackouts have been on the rise in recent years. Would you consider these blackouts assign the current structure of the marketplace is no longer serving these customers . Certainly its one of the things we point out as being a very concerning and anticonsumer. I would say one of that war since the current marketplace we need to address. There are some novel ideas out there. And again there is no Silver Bullet here. If you had a 60 day cooling off mediation for the thorniest disputes you do have the channels. It is tough. It cuts both ways. Think about disney where they really willing to let twopoint to billion dollars sit on the table . How long can they sustain that when theyre trying make disney plus profitable . Both sides have a lot to gain. Both sides have a lot to lose. Prison us that Consumer Reports consumers end up in the short end of the stick in either scenario. Because ultimately when they do cut a deal the prices go up consumers pay it. It is dangerous for me have extreme weather events in my district. Cannot get the information. I think we can agree it is lose, lose, lose the blackouts are bad for local broadcasters. Bad for cable providers but most of the hurt consumers who lose access to local news stations and the program they rely upon. As you know local stations provide trusted reporting for communities around the country including in my districts. The current marketplace but their future in jeopardy as costs are on the rise in consumers move to nontraditional video platforms. I will have to say including in our household in terms of falling every last game of the u. S. Open but how do we ensure they can continue to operate now and into the future . Thank you for the question congresswoman. Local broadcasting relies on two Revenue Streams advertising on that market has been completely overrun with the market on the digital platforms. And retransmission consent to reinvest and local news, local programming put some criticism has been raised today on the Current System this govern broadcaster relationship with the cable and Satellite Companies for the last 30 years. It has unquestionably resulted in a system where 210 unique markets around the country individual local broadcast stations can invest in local news, local programming are not just running National Feeds of birds is a real cost testament to our legal regime we have something no other country has in that regard. So, as we look at streaming and audience cutting the cord and moving to some of these Cable Replacement Services online, i think it is imperative the scc looks at will have on localism whether there are elements of the regime that governs cable and satellite that ought to be considered or something new. We have all concluded here this is complicated. I do want to also say with regard to the retransmission impasse he raised with wmu are, we understand how important that station is to your local constituents. The session is freely available over the air. And it will continue to be. But it is important to hone in a little bit here. We talk about these impasses as it industry wide problem. Over the last five years to Companies One of which is relevant here dish and directv have been responsible for nearly 90 of the impasses nationwide in consent negotiations. Lets call this what it is which is a problem with two companies. Should probably add in for the benefit of my republican colleague, this is for our country as well as the first of the nation primary. My time is up and i will yield the back of it. Thank you very much the gentle lady time has expired the chair recognizes the gentleman from idaho for five minutes. Think it mr. Chairman. Local broadcasters as face certain regulatory restrictions. You have touched on some of that how many stations on a Single Company can own, what type of program must be aired, how often programming are allowed or not allowed because you operate on public airwaves. You are king for a day. Just very quickly can you speak to some of the specific rules . Which ones are the most outdated . What can be reformed and eliminated . Have you working friday quickly give me summary. The me ownership restriction local broadcasters operate under art vestiges of a bygone era. A broadcaster only competes with other broadcasters for viewership and advertising in ag dollars which these are premised on is clearly as we discussed today not the modern immediate landscaper thats not to say not every local broadcaster that suddenly go and expand its footprint but broadcasters need the flexibility to invest in that scale in order to compete with google and facebook. Similarly the rules of the road that have applied to local broadcasters relationships with cable and Satellite Companies for the last 30 years have unquestionably resulted in an investment in local news local entertainment thats unique to 210 different markets in the country. The scc needs to take a look at the agency on how to ensure the same investment and localism as streaming proliferates. Your comments on that please . Is going to try to interject myself to steal from fluid youre going to need a bigger boat in order to fix this problem. You cannot expect the customers who subscribe to local cable programming are going to continue to be able to entirely support local broadcasting. Curtis talked about how he has lost the advertising side. What hes got left is the retransfer side. The cable industry might not be around long enough to continue to fund that. It is a longterm challenge. On the sequel a more specific question. What if we eliminate regulations . We just eliminate them around charge and services. Would that make cable more competitive . What to omit cable more make cae competitive and i would be supportive of that as the better solution than continuing the way we are approved may be other solutions in between. But yes very. Okay think im going to shift gears. Some of the advantages and disadvantages with allowing small those with fewer than 500,000 subscribers, what about buying groups . What about being able to leverage those small organizations with a buying group . Would that help in terms of negotiation . Id like to get your thoughts and comments of that. Is something i am also looking for. We are very unique company but we are small relatively small this year we will be at about one point to were 3 million, one point to 1. 3 million customers. In north america we cannot join the ntc see because of facility space there is no place for us to join. This is a company that has grown up in a very complicated marketplace with programmers and broadcasters who are looking to take advantage of our size. That would be very helpful. Perhaps it may be having the opportunity to join on the cable side it might make sense very. Vigorously got about 40 seconds left there is another related question i was looking from your written testimony you expressed concern with scc might have online video providers and streaming platforms to negotiate with broadcasters or with content the broad casters dont own. I did not fully understand your thoughts could you impact that customer. Yes this is by the most important point of this hearing is a fact it sounds like what is been conflated today is local sports and local broadcast for the reality is therefore broadcasters who own basically College Football, pro football, the olympics, the world series in programming that really matters must have a programming. The problem is we are already negotiating the expensive rates. Having to then have to negotiate read trans rates will effectively increase the price that much more. Thank you, thank you to the panel thank you chairman amount of time i yield back for quick stillness time has expired the chair and are recognized as a gentle lady from illinois Second District for five minutes. Thank you chair and Ranking Member for holding this afternoons hearing. It is important in this subcommittee address of the video marketplace has changed the impact on its consumers. The changing landscape consumers deserve to have a choice. To me that means access to the local stations as well as popular Cable Networks. That is why im disheartened like my colleague was by the ongoing blackout in areas that i represent in chicago were local tv stations like wgn went dark on directv platform. And as you have her in chicago is not alone. Such blackouts have been increasingly common and are impacting more consumers. I joined many of my constituents helping a resolution can be reached as they can continue to have either Favorite Network program at live sporting events, local news and local content. However to ensure consumers have access to content relevant to their daily lives it is essential entities within the video ecosystem maintain diverse and inclusive coverage to provide a better representation of the communities they serve and to continue Building Audience interest. I was encouraged to see on the website your organizations commitment to adversity equity and inclusion and broadcasting what types of initiatives have you supported that improve diversity and broadcasting and create new opportunities for women, for people of color and other represented communities . You might comment on your Leadership Training Program also. Thank you so much for the question and the acknowledgment. Because our work in this space in partnership with our industry is arguably the element of our association i am most proud of it. Broadcast Leadership Training Program which is the Gold Standard amongst a litany of Training Programs we provide on the sales side. On the engineering side early on in careers as well as advancing up through middle management are broadcast Leadership Training Program is really meant to hone in on the next generation of leaders of the broadcast industry. And giving them exposure through a yearlong executive mba Style Program to the elements of the business they might not otherwise have an awareness of very few have been a very, very successful salesperson youre going to get exposed in this program to the financial side of the business, the programming side of the business. It is focused on ensuring that especially diverse leaders in the industry who have high potential get that training to get the business experience and can rise to the top of their companies. It has been tremendously successful. Also eclipse those interested in getting to getting into station ownership of training how to do that on the financial side it is a program we are very, very proud of. It is not more than 20 years in existence and growing every year. Do you know how many have gone on to own their own station by any chance . I can provide you with that data. I can tell you that it is a substantial number that either have gone on to own their own station or have advanced to the c suite within their companies. Can you speak a little bit about the barriers when it comes to access to capitol that still seems like a problem. It is a huge problem. And just to step back for a moment the broadcast industry is one hundred one transition for what we talked about today. There is a lot of uncertainty as to what investment in the broadcast space will look like in terms of sec review. Is a lot of question about broadcast viability in the spaces been dominated by big tech in light of the constraints on any Station Group ability to gain necessary size and scale. All of that is chilling some investment in so as it relates to access as to what this industry looks like 10 or 20 years down the line. As well as the license itself and a transaction. We moved to a two oh two crew losers in the small market into why its a worthwhile investment. You think the Certificate Program should be reinstated . Yes or no pay. Yes. [laughter] and the goal real quick do you think its time for congress, this committee to look at modernizing the rules of the road you can say yes or no. Yes. The rules of the road for video marketplace . Yes. And no. Yes its time to modernize. I cannot ask you what you said no i yield back thank you. Quit said gentle it is time has expired the chair now recognizes the gentleman from texas 11th district for five minutes. The gentleman from texas 11th district for five minutes. As a consumer it is interesting is relevant and timely. For decisions that my own family is making. I certainly see the value of making sure the role of government to set the appropriate conditions and let the competition be what it is. But to have a positive impact on our society. A lot of these topics have been broached but i will start looking at the average amount of tv that an adult watches and ane narrowing of the channels. I think most people if youre like me have 10200 channels but youre only watching 10 of those. So youre basically paying for things that are watched. Theres been suggestions about it al a carte option for cable. But of your members considered offering additional options . Might members talk to me about it every day. As i have indicated the little secret consumers dont understand its content providers while at the Cable Companies offer small packages. They force you to take the whole suite of programming offered by a particular disney, or discovery, or whoever it may be. That really hampers our ability to meet consumers needs and we would like to fix that. How much of the transmission consent fee is vested at local content versus sent to the big networks . Varies dramatically depending on the Station Group and the particular network. What i can tell you at a local level roughly 40 of a local broadcaster operating budget is invested in local news and programming. Said maybe it just as a follow on to that, and government do it better when it comes to the regulatory posture there that ends up resulting in either Better Options or lower cost . So think what is extremely important about this and theres a lot of pressure coming down the cost of content creation both on the part of my Network Members and sports rights all the things we have discussed today as well as increased costs of local content. But there is no doubt the retransmission consent regime of the last 30 years has enabled local stations around the country to reinvest in their local news programming we are the most trusted there is a reason for it. An s consumers are cutting the cord, increasing and consuming their content from the Cable Replacement Services online the scc the Expert Agency needs to take a hard look at how that is going to impact that ability to invest in local we have asked them to refresh the record and their 2014 proceeding. Okay ill still feel for follow up here. We seek Media Companies their content creators. They are distributors they are producers with the online video options. What the consolidation of online video are the crossownership rules Still Necessary . No they are not. For this and that i would argue none of the current broadcast ownership at least as written remain relevant they are premised on the notion local broadcasters compete with only other local broadcaster for audience and advertising dollars. That is not the reality we are competing in today. Complicate were also competing with big tent for content because progressive one more. Weve heard a lot about the marketplace how it has changed in the last couple of years your testimony reflected that. It seems to me the demands and demand andexpectations have proy changed a lot as well. I was the start of the statement by our own choices. What is most important . When you think is most important to the viewing public . And how are our laws impeding the ability for consumers to have those choices . It about 12 seconds because s at the cost is a big one and a choice consumers love the Different Streaming Services out there. I do think, earlier some he said i want to deregulate everything thats not true we just cannot take an old regulation from the cable era and apply it to streaming services when you have a fresh conversation about how we can do better to level the Playing Field across the board. Think you come at times expired yelled back at. Thank you jonahs time has expired or the chair now recognizes the judgment protects his 33rd district for five minutes per. Thank you very much mr. Chair. Someone who covered 3a football for our local paper in texas and you all know how big football is in texas understands how important local news is in diversity in media and our in or communities across the country. I really cannot emphasize enough the importance of having a strong local News Presence in every town. A robust local news ecosystem is vital to making sure the freedom of expression at a strong democracy something stays in place. While it is true americans have access to an inescapable flow of digital news and programming the sustainability of local news in that ecosystem is a big danger right now. And it is very important and critical as we find ourselves in this information landscape in which significant information runs rampant and effects are harder to come by. I hope todays hearing can shed some light on the action items we in the industry can collaboratively take to save local trusted news and journalism increasing opportunities for all americans to benefit from the video marketplace. The first question i have is i think it is imperative we not overlook consumers in this conversation particularly those low income are economically vulnerable. While there is no doubt the outline streaming options have increased competition giving consumers more choice at lower cost for these services robust and affordable broadband is necessary to take advantage of these options. For two main the cost of internet is still out of reach. What Affordable Connectivity Program championed this made historic gains in this area. But funding for it is going to run out soon public q2 of next year is what most people have said. If congress does not provide more funding we will be we will back that progress and make it harder for 21 millions americans and bouncer Household Budgets and i want to ask why is it so important that they get refunded . Thank you congressman. Acp has certainly been an important lifeline for many of my members and their customers approximately 75 Member Companies have participated in the program. What is going to run out of money you are correct. There are 28 million households on it today. Congress it faces some tough choices that are beyond my pay grade in terms how to fund it, whether to fund it and how to change it. But certainly i would urge congress to take a close look at it. Many people do rely on it. If they dont as a whole bunch of shutdown and transition issues that are real about how consumers are going to be what is going to go dark. In the program is over. How do we deal with prior balances . How is a lot of stuff that needs be thought about in that area once Congress Reaches a funding decision. Quickset also went to ask a question about local news being such a trusted outlet for many people. Especially whereas growing up in a generation before me. As the cochair of the Voting Rights caucus theres been misinformation around elections and how that proliferates online and jeopardizes our democratic process. The people in my district often on local tv Radio Stations to cut through the noise and offer reliable information on when and where we vote. I wanted to ask can you talk about the Important Role local broadcasters play and our election specifically the role broadcasters and local journalists play to combat misinformation spreads online. Thank you for the question congressman. And for acknowledging the role we are playing at some ways you just did as well as i possibly can. This is our priority. In the light over the state of the newspaper industry in this country local broadcasters are the source of trusted local information. We are doubling down on that localism would have increased the size of our newsrooms as an industry by 70 over the last decade. It is absolutely essential. We understand especially the communities you talked about that are victimized by the Digital Divide. Often minority communities are particular subject of this information. Local broadcaster be where they get their information. And so we are providing a vetted information not only on the issues, the candidates, but also election processes. Where to vote, how to vote. I do not think our role has ever been more important as this disinformation is proliferating online were very, very proud of the fact were doing that work. Whether it is school board elections. Or national. I beg your pardon. And again for members or witnesses unfortunately do not have the light boxes in front of them today the recently gavel at five minutes. The gentleman from florida Second District is recognized for five minutes per. Thank you very much mr. Chairman. Homey say its been interesting conversation. Clearly we needed to have his hearing. I noticed competition to maintain customers and the monthtomonth platform sharing between platforms has increase the cost clearly for consumers. But there are many providers that have shortterm packages that allow our consumers to choose what they want, when they want with no more than a one month billing tale we can unsubscribe at any time and get what we want and not wait. The programs often jump from provider to provider in the free Market Competition to serve those customers. I like to know i have the right to instantly pivot to another provider that picks up whatever show i like. Fsu football or whatever. I do not want to be locked in for two years. Another troubling matter emerging in the subscription tv market was of course the surge surgeonprices to consumers. I wonder if this could be a regulation rather than under regulation. Ive seen more disputes more blackouts, impasses excuse me. I think its clear that cable regulated status has a long history which and testified when the mandatory channels of the 1992 cable act came out. I note president bush 41 vetoed that legislation was unfortunately overridden by congress. Then sandra biden was one of the overriding votes on that vote. Many different opinions on how to work through the problem the modern video plays someone to level the Playing Field some people want to deregulate the Playing Field i want to ask a couple questions if i may. I think its fair to think of Technology Neutral thats deregulated neutrally. We had a very simple product. We provide just video. Consumers can move in and out we offer trials. We offer different packaging of different groups of people across the United States in different languages. We are Technology Neutral were focused on technology but we are a Software Platform i would say we are agnostic to roku. We are software consumers. Yes, i have starling at my house yes i have cable i have fiber. Is not all software sir. If you take Companies Like samsung they have a tv. That tv is a platform that is a device for their Companies Like amazon that have sticks and a roku stick is another example of a platform that is 50 78 million customers at this point. We are a pure point software. In your home if you have multiple tv sets or sticks you can move seamlessly. Its fruit d regulations. In york test of you correctly outline the dramatic increase in cost. And in particular the retransmission consent fees. In addition consumers seem to have they get billed for the inflated cost would you say these costs restrict the ability to carry diverse viewpoints from independent programmers unaffiliated with broadcast networks . Yes sore it absolutely does. It eats up resources that could otherwise be devoted to that programming. It also eats up capacity and Cable Networks to the extent they are capacity limited in some systems. Crunch of address that as i sat here but i wanted to ask that question. I wanted everyone to understand i care about your answer. With your remaining 20 some seconds my district its hammered by hurricanes occasionally. Not since last week. My constituents depend on emergency alerts could you please talk about the broadcasters role in that situation . In 10 seconds per. Thank you for the question. We are free we are always on we are a lifeline in the sense of emergency when other networks fail. And frankly i think d regulation in some areas will help us to do even more of that. Continued regulation others will also help but importantly i think its premature for this committee to be thinking about legislation the scc has the ability to examine this regulations i make some of those determinations for the benefit of our ability big. Thank you very much mr. Chairman thank you again i yield back. Gemmas time has expired the chair record as a judge latest from floridas Third District for five minutes. Wonderful, thank you, mr. Chairman for holding this important hearing today. Thank you to our witnesses for appearing before the committee. But actually am fascinated by this issue. It is so rapidly changing this environment it is hard to keep up. Isaac cord cutter myself. Im sure my stuff lives that right now. Jumping right into it, and your testimony you mentioned fubo will introduce ai products. It will enhance the Consumer Experience can you detail what that might look like . Sure as i said initially we are very focused on the Consumer Experience and one of the ways we can gauge that is by the level of engagement with our product relative to any of the product to the marketplace. As i stated we are roughly just over 100 hours per household of our products. The goal with ai and Machine Learning is to better index he programming to better understand what people are watching. And to help with discovery of Additional Program which i think will help as we create we have no capacity issues basically who wanted to we get a 400 or 500,000 channels people could access at any given time. And think ai is going have a profound effect on programming moving forward very quickly most people do not even recognize. Very talking more broadly on the issue come right back to you in today say that right question i. You did. Thank you. Arent you both touch on ai in your testimony. So question she both what benefits risks included, does ai posted the video marketplace moving forward . Maybe i will start. In my view i think it puts the power into that users hand very different from social media were algorithms decide basically what you see. The way we are developing it is going to allow the user to decide what they want. Basically if you are a fan of someone in the news all the time you can say show me everything and they will look at clips and new segments on an eight channel spanishlanguage english language is a pretty interesting tool to drive discovery. Okay per. And would focus on the impact of local broadcasting. Certainly there are opportunities for hyper localism the efficiencies the weight we e write scripts that will enable her boots on the ground for a locally focused reporting rebuild that than what people can do we do have several policy concerns the first is we already have issues in the big teco landscape with our content being accessed online. Not be fairly compensated for that local content. That is going to be potentially exacerbated by ai. Second is the image and likeness of our media personalities both on a local and national level. Ensuring this are protected very much top of mind for all of our members. Third we are the most trusted medium by all studies. The challenges to newsrooms of betting stories that are littered with ai generated content some of which will be typical to decipher we got to make sure we have the resources in place to do that well. All the challenges we are navigating look forward to work with congress on. You touched on an issue im really cared about is the liability issues that come with using ai generated capability. I was recently a broad, and very first 24 7 ai generated anchor. I thought that was fascinating. With benefits also come the risk. You hit on some of the copyright issues and whatnot. More on the risk site has there been anything i know, there is so much we could get in soil have 55 seconds real quick can you hit on the risk we have to look at mitigating from the liability of the streaming services utilizing ai and essentially crowdsourcing of it . It is just ensuring everyone in the landscape has the right mechanisms in place to ensure that likeness. Its one think its truly ai generated likeness of a news anchor. Its another thing if its an image of lester holt and the viewer it believes its lester holt and it is not. This is going to require a lot of work for its already been done but Many Companies a lot of work to figure out how we ensure our role as the most trusted his issomehow undermined by consumer confusion. I cannot believe my five minutes or up. I will submit the remainder of my questions to you all in writing without a yield back. A gentle lady yields a back the bounce overtime the chair now recognize the judgment from ohio cyst six the district for five minutes per. Thank you, mr. Chairman i love the discussion about ai. I almost want to go off script and dig into that a little bit. I can tell theyre two things im not going to do im not going to fly on an airplane thats flown by ai pilot i am not going to be diagnosed by doctor that says he is an ai drl condition. Because i dont how it works. A few years ago congress permanently extended stellar the Satellite Television reauthorization bill. Part of that process congress reaffirm the value of having local broadcast channels available to viewers in their local markets. We also made some other changes like allowing small Cable Television providers to band together to joint negotiate with large broadcast groups. Today it we are holding this hearing to talk about changes that have happened to the video marketplace since then. Specifically regarding streaming and overthetop services. So, can you speak to you reMember Companies position on how local broadcast stations should interact with the streaming services and what you see is the biggest opportunities in the biggest threats to local broadcasting thriving over the next few years . Thank you for the question. I appreciate your reference to the committees work on that bill four years ago. Because it principally what it did and we are strong supporters of it including the relief you provided for small Cable Companies. Principally at reaffirm the transmission consent allowed local stations across the country to invest in local programming and news. This is all very complicated and asking how those rules of the road should apply to the current Cable Replacement Services that are happening on the streaming side. Including fubo. Within my membership we do not have consensus as to what the answer is. But what we are asking us for the scc who has an open proceeding on this to refresh the record in that proceeding to ask some of these very same questions. And to begin looking at these very difficult questions. I sure your view and the view of many of my colleagues congress should be looking at how to deregulate rather than adding additional players to an antiquated system in order to try to level the Playing Field and have a fair competitive environment that meets the needs of the current video marketplace. You have also shared your concerns with retransmission consent framework appeared particular for smaller providers and noted the concerning front trend of increased blackouts when broadcasters and tv providers are unable to reach an agreement. This is a big issue that impacts viewers in eastern ohio and all over the country. As you know in 2019 congress amended the communication act to prevent small those serving no more than 500,000 subscribers nationally to form buying groups to negotiate retransmission consent with large Station Groups. I knew her view has disability to form these groups in order to negotiate has that been affected . As i said earlier response to another question the answer is yes. It has helped to bring thank you to congress for taking the action you took in 2019 and still are. The negotiations that came out of that happened relatively quickly after the passage of the bill like three or four months later. In the retransmission consent cycles like a cycle of every three years we negotiate re trance. And so it happened very quickly. It produces some positive results although not as much as we had hoped to. We are in the middle right now heading into another one of those that will occur between now and the end of the year. There will be sent risk of blackouts by members want to avoid that and we want to come to agreement and keep customers online. Stations online for customers. Okay. What strategies do you employ to attract and retain subscribers in a competitive market with various streaming options . Basically it all comes onto product. Fubo is number one in Customer Satisfaction among Live Tv Service providers according to jd power. We really focus on developing technology ensuring people are able to gain value. Its not a cheap subscription as you know. Its very important we quickly highlight the number of channels people have access to it also ensure we are tracking what they are watching and making sure they are easily available to them. Mr. Chairman a yield back pretty quick thank you very much a gentleman yields back. Looking around we have no other members wishing to ask any questions at this time. Went to first of all thank our witnesses. You can tell this has been a great hearing. It is certainly educational. We need to get more information out. Its very important for all of you who have been with us today we appreciate your time. At this time ask unanimous consent the documents included on the staff hearing documents list and without objection so ordered. I also remind members of 10 Business Days to submit questions for the record asked the witnesses to respond to the questions promptly. Member should smother questions with the close of business on september the 27th. Without objection a subcommittee is adjourned. [applause] [background noises] [background noises] [background noises] thanks so much. [inaudible] [inaudible conversations] [inaudible conversations]
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