Senate Panel OKs FCC, Cuba Broadband Provisions in Bill

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By Lydia Beyoud

June 16 — The Senate Appropriations Committee approved a draft fiscal 2017 spending bill June 16 that includes modified provisions aimed at slowing Federal Communications Commission efforts to open up the pay-TV set-top box market.

Sen. Brian Schatz (D-Hawaii) secured language in a managers' amendment package at the full committee's June 16 markup session to lighten the blow of a measure approved in the draft Financial Services and General Government spending measure by the panel's relevant subcommittee June 15.

Schatz's text modified some of the requirements of the study, including that the Government Accountability Office conduct it rather than a peer-reviewed academic group.

The pay-TV industry, including groups such as the National Cable and Telecommunications Association and companies such as DISH Network Corp. oppose the FCC's proposal, which they say could impact their negotiations with content providers and expose consumers to privacy risks by third-parties that would gain access to content through pay-TV providers' systems.

The cable and satellite industries have mounted a full-court press lobbying effort in recent months. They have managed to persuade dozens of Democratic and Republican lawmakers to raise concerns with the FCC's proposal. Given those bipartisan concerns, the set-top box rider could be included in whatever version of the spending bill lawmakers ultimately send to President Barack Obama's desk.

House appropriators also included set-top box study language in their version of the fiscal 2017 spending bill that would fund the agency. The full House is expected to take up that measure (H.R. 5485) next week, according to Bloomberg Government.

Schatz's Changes

Schatz also succeeded in eliminating language that would have required the study to evaluate the potential costs and benefits of the FCC's proposed rule, which the FCC says would allow consumers to be able to purchase rather than rent equipment by setting certain standards for pay-TV providers to pass their video streams through to third-party providers. The change would instead require the study to evaluate the availability of other market-based solutions.

The GAO would have to examine copyright, consumer privacy, intellectual property, programming diversity and other issues related to the rules.

FCC Funding

The committee approved the $22.4 billion draft bill on a 30-0 vote, in what a committee aide said was the first unanimous committee vote to approve that particular spending bill.

An amendment by Sen. Chris Coons (D-Del.) to increase the FCC's $341 million fiscal 2017 allocation for the FCC to $356 million was rejected on a 14-16 vote.

In a report accompanying the draft bill text, the committee recommended that up to $117 million be retained from spectrum auction activities to fund the administrative expenses of conducting the auction.

The committee asked the FCC to complete a pair of studies related to the impact of the agency's ongoing spectrum incentive auctions on the broadcast industry and on consumers to help determine whether a $1.75 billion fund Congress established in 2012 will be sufficient to reimburse broadcasters for their expenses to move to different channels from their current assignments in order to make room for wireless companies.

The committee report reaffirmed congressional intent that all joint sales agreements—a type of contract two broadcast stations operating in the same market use to share marketing and other resources—should be grandfathered through Sept. 30, 2025, regardless of whether a station's license is transferred. The FCC has taken steps since passing restrictions on the use of JSAs in 2014 to prohibit stations from continuing a grandfathered JSA when a station license is transferred.

U.S.-Cuba Telecom Trade

Several amendments aimed at increasing U.S. trade with Cuba also were added to the draft Senate spending bill, including an amendment based on legislation (S. 1389) by Sen. Tom Udall (D-N.M.), that would prohibit funds being used to block the export of telecommunications equipment to Cuba.

The amendment is intended to counterbalance provisions in a House appropriations bill that could make it difficult for the telecom industry to do business with Cuban entities, such as the state-operated telecom provider, or gain financing to export telecom goods to Cuba.

Companies including Cisco Systems Inc., Verizon Communications Inc. and satellite company Intelsat Corp., as well as groups including the Electronic Transactions Association, and the U.S. Chamber of Commerce have been lobbying on Udall's bill, the Cuba Digital and Telecommunications Advancement Act of 2015 for over a year, according to government lobbying disclosures.

To contact the reporter on this story: Lydia Beyoud in Washington at

To contact the editor responsible for this story: Keith Perine at

For More Information

Text of H.R. 5485 is available at: