[Senate Hearing 111-193]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-193
 
            ENSURING TELEVISION CARRIAGE IN THE DIGITAL AGE

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 25, 2009

                               __________

                           Serial No. J-111-7

                               __________

         Printed for the use of the Committee on the Judiciary


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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 ARLEN SPECTER, Pennsylvania
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         JON KYL, Arizona
RICHARD J. DURBIN, Illinois          JEFF SESSIONS, Alabama
BENJAMIN L. CARDIN, Maryland         LINDSEY O. GRAHAM, South Carolina
SHELDON WHITEHOUSE, Rhode Island     JOHN CORNYN, Texas
RON WYDEN, Oregon                    TOM COBURN, Oklahoma
AMY KLOBUCHAR, Minnesota
EDWARD E. KAUFMAN, Delaware
            Bruce A. Cohen, Chief Counsel and Staff Director
              Nicholas A. Rossi, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Kohl, Hon. Herb, a U.S. Senator from the State of Wisconsin......     3
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................   111
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................     3

                               WITNESSES

Cohen, David L., Executive Vice President, Comcast Corporation, 
  Philadelphia, Pennsylvania.....................................    10
Ergen, Charles, Chairman and Chief Executive Officer, DISH 
  Network, L.L.C., Englewood, Colorado...........................     4
Franks, Martin D., Executive Vice President of Planning, Policy 
  and Government Relations, CBS Corporation, New York, New York..     8
Hartwell, Robert M., Vermont State Senator, Bennington District, 
  Manchester Center, Vermont.....................................    12
Yager, K. James, Chief Executive Officer, Barrington Broadcasting 
  Group, L.L.C., Hoffman Estates, Illinois, on behalf of the 
  National Association of Broadcasters...........................     7

                         QUESTIONS AND ANSWERS

Responses of David L. Cohen to questions submitted by Senators 
  Specter, Feingold and Hatch....................................    29
Responses of Charlie Ergen to questions submitted by Senators 
  Specter, Feingold and Hatch....................................    35
Responses of Martin Franks to questions submitted by Senators 
  Hatch and Specter..............................................    41
Responses of Robert M. Hartwell to questions submitted by Senator 
  Hatch..........................................................    44
Responses of James Yager to questions submitted by Senators 
  Hatch, and Specter.............................................    46

                       SUBMISSIONS FOR THE RECORD

Association of Public Television Stations (APTS), Arlington, 
  Virginia, statement............................................    53
Cohen, David L., Executive Vice President, Comcast Corporation, 
  Philadelphia, Pennsylvania, statement..........................    60
Ergen, Charles, Chairman and Chief Executive Officer, DISH 
  Network, L.L.C., Englewood, Colorado, statement................    71
Franks, Martin D., Executive Vice President of Planning, Policy 
  and Government Relations, CBS Corporation, New York, New York, 
  statement......................................................    76
Gabrielli, Bob, Senior Vice President, Broadcasting Operations 
  and Distribution, DIRECTV, Inc., El Segundo, California, 
  statement......................................................    93
Hartwell, Robert M., Vermont State Senator, Bennington District, 
  Manchester Center, Vermont, statement..........................   109
National Programming Service, Mike Mountford, Chief Executive 
  Officer, Indianapolis, Indiana, statement......................   113
Sohn, Gigi B., President, Public Knowledge, Consumers Union, 
  Washington, D.C., statement....................................   121
Yager, K. James, Chief Executive Officer, Barrington Broadcasting 
  Group, L.L.C., Hoffman Estates, Illinois, on behalf of the 
  National Association of Broadcasters, statement................   130


            ENSURING TELEVISION CARRIAGE IN THE DIGITAL AGE

                              ----------                              


                      WEDNESDAY, FEBRUARY 25, 2009

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:10 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Kohl, Feingold, Cardin, Wyden, 
Klobuchar, Kaufman, Specter, and Hatch.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning. It is good to see everybody 
here. We seem to have some interest in this hearing. I thank 
you all for coming.
    Last week, in Vermont, our broadcast television stations 
turned off their analog signals and began broadcasting only in 
digital. By June 13th, of course, all the television stations 
across the country will have completed this transition. And 
with the digital era upon us, consumers are, of course, getting 
their video content in ways that were unimaginable just a 
couple decades ago. Network programs are available online, and 
consumers are increasingly viewing broadcast television 
stations through cable and satellite systems rather than using 
an antenna.
    Congress has facilitated the growth of the cable and 
satellite industries by providing a statutory license to 
retransmit broadcast television to consumers. And we all know, 
I think, by the interest in this, that parts of that license 
expire this year, important parts.
    Congress first passed the Satellite Home Viewer Act in 
1988, and with each reauthorization we have sought to improve 
it in a manner that protects content owners but also improves 
the ability of consumers to access local television stations. 
In 1999, I introduced legislation with Senator Kohl and Senator 
Hatch and others that led to the creation of a license for 
satellite companies to provide local broadcast stations in 
local markets for the first time.
    This provision has been tremendously successful. Both DISH 
Network and DirecTV use this license to provide local service 
in Vermont, and I thank them for making that service available. 
I live in a rural area in Vermont. The nearest neighbor is half 
a mile away, and I have what is sometimes referred to as the 
``State flower'' in Vermont--the satellite dish on my roof.
    The local television plays a key role in cities and towns 
across the country. Local television, of course, provides 
relevant news, weather, and sports. It is the place where 
people hear first of emergencies in the area. It helps create a 
sense of community.
    Now, I appreciate that Bob Hartwell is here from Vermont to 
testify today. As a State Senator from Bennington County, which 
is in the southwest corner of our State, he can talk about the 
importance of receiving home State television stations. 
Bennington County is one of two counties in southern Vermont 
that is not considered part of the Burlington television 
market, the area where our three major television stations, now 
a fourth, are located. Residents in Bennington were unable to 
receive the local Vermont broadcast stations by satellite for 
many years. During the 2004 reauthorization, I included a 
provision that made it possible for the southern Vermont 
counties to receive Vermont stations by satellite. Senator 
Hartwell knows firsthand that for a Bennington County resident, 
seeing news of a fire in Clifton Park, New York, is not the 
same as seeing that news for Rutland, Vermont, or Bennington, 
Vermont.
    So the provision that I put in helped to keep Vermonters in 
all corners of the State connected. I appreciate that DirecTV 
took advantage of it to serve southern Vermonters, but there is 
still more to do. For instance, DISH is currently not allowed 
to provide this service, and I understand that other States 
have similar issues in which residents are unable to access 
stations from their home States.
    Now, a healthy satellite industry promotes competition 
between video providers and benefits consumers across the 
country. And it is particularly important in rural areas that 
may be out of the reach of broadcast television and even cable 
access. They are, of course, in these rural areas. I could not 
receive our Vermont stations with an antenna, and I am very 
typical of many, many Vermonters, and cable would not be 
available because of the lack of density in the area I live in. 
So we have satellite that fills that role. We are not flat in 
Vermont, and the topography blocks other signals. But a healthy 
satellite and a healthy cable industry take on a renewed 
importance because of the digital television transition, which 
has left many consumers unable to access stations over the air.
    So we are going to need to refocus on modernizing and 
simplifying the licenses for the digital age. The United States 
Copyright Office released a report last summer that made 
recommendations for updating these licenses. One of their 
recommendations is to harmonize the satellite and cable 
licenses, which currently operate very differently, and I am 
interested in hearing the views on how that is going to affect 
competition.
    I look forward to working with the Senators on this 
Committee, and a number of other Committees that have 
jurisdiction, to bring out legislation that is going to improve 
service to consumers, but that is also going to allow cable and 
satellite providers and broadcast television stations and 
content creators to thrive in the digital age, because if they 
all do well, then the consumers do well.
    Senator Specter.

STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE 
                        OF PENNSYLVANIA

    Senator Specter. Thank you, Mr. Chairman.
    This is a very important hearing to ensure television 
coverage in the digital age, and we find that people are 
relying more and more upon satellite and cable. This Committee 
has delved very deeply into a number of collateral issues 
relating to the controversies between the National Football 
League and the cable companies. And I have been concerned about 
arrangements where fans in the local areas of the Eagles and 
the Steelers, the two pro teams in my State, have been denied 
access because of complexities. And I do not know that this 
legislation will provide any opportunity to deal with those 
subjects, but, candidly, I have been looking for a vehicle 
which would address those matters, disconcerted with the high 
intensity of interest in the really premier teams, like the 
Steelers and the Eagles, that they are denied coverage.
    But we are dealing with some very, very technical subjects 
here. While cable and satellite providers may enter into 
private agreements with broadcasters for retransmission, in the 
absence of agreements it is governing by the Copyright Act. And 
these license are very important to enable cable and satellite 
providers to retransmit over-the-air broadcast without 
obtaining the broadcaster's permission with the compensation 
provided by the statute.
    Our inner workings of the Congress make it complicated 
because there is jurisdiction both by this Committee and the 
Commerce Committee, which means you have to go to four 
hearings--two in the House and two in the Senate. But at least 
you are covered by C-SPAN so what you say here will be carried 
far and wide.
    Senator Leahy and I have a special spot reserved on C-SPAN 
that put us on at 3 a.m., so he and I have a tremendous 
following among America's insomniacs.
    [Laughter.]
    Senator Specter. We will be watching this very closely. I 
regret that I am going to have to excuse myself early to join 
the Environment and Public Works Committee, where we are 
pushing ahead to try to find a legislative answer to global 
warming at an early stage. But I am leaving behind Ryan 
Triplette, in company with some very high-powered lawyers on 
the Hill, who knows more about this subject than anybody else.
    I want to give a special word of greeting to David Cohen, 
who is Executive Vice President of Comcast and a longstanding 
friend, a real activist in community affairs and commercial 
affairs.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you very much. And, unfortunately, as 
Senator Specter was referring to, everybody has about five 
different committees going on at once, but Senator Specter and 
I have always worked together in putting up the agenda for this 
Committee. So I appreciate your being here.
    Senator Kohl, did you want to say----

 STATEMENT OF HON. HERB KOHL, A U.S. SENATOR FROM THE STATE OF 
                           WISCONSIN

    Senator Kohl. Yes, just a word or two. Thank you, Mr. 
Chairman, for holding this hearing as we revisit the Satellite 
Home Viewer Act. The simple goal of this law at the time we 
passed it was to level the playing field between satellite and 
cable companies in order to give consumers greater choice and 
better value. Now that satellite has established itself in many 
markets as a competitor to cable, it is essential that we 
reauthorize parts of the law that are set to expire at the end 
of this year.
    Where necessary, we should take stock of the changes that 
have occurred over the past 5 years to see whether adjustments 
are necessary to enhance and expand competition between cable 
and satellite. I look forward to continue working with you, Mr. 
Chairman, as we have each of the last two times this bill was 
considered, as we reauthorize and improve the Satellite Home 
Viewer Act.
    I want to thank the witnesses for being here. I also have 
to leave because I am chairing a hearing in the Aging 
Committee, but it is a delight to see you, and I have enjoyed 
working with you over the years. Thank you so much.
    Chairman Leahy. Be careful on those of us who are aging, 
Senator Kohl. I do appreciate that.
    Senator Specter. Both of us, Senator Kohl.
    The first witness is going to be Charles Ergen. He is the 
founder, Chairman, and CEO of DISH Network, and what I am going 
to do is ask each one--I will introduce each one of you 
separately, and then if you will testify, and then we will all 
ask questions afterwards.
    He is the founder, Chairman, and CEO of DISH Network, one 
of the Nation's largest satellite television companies. He 
founded the original company EchoStar in 1980, as I recall, 
then launched DISH Network in 1996. He is the co-founder of the 
Satellite Broadcasting Communications Association. He was named 
one of the world's Best CEOs by Barron's Magazine in 2007, 
named to Forbes Magazine's top-ten CEO list. He received his 
bachelor's degree from the University of Tennessee, holds an 
MBA from the Babcock Graduate School of Management at Wake 
Forest University.
    Mr. Ergen, please go ahead, sir.

   STATEMENT OF CHARLES ERGEN, CHAIRMAN AND CHIEF EXECUTIVE 
       OFFICER, DISH NETWORK, L.L.C., ENGLEWOOD, COLORADO

    Mr. Ergen. Thank you. Chairman Leahy, Ranking Member 
Specter, and members of the Committee, I appreciate the 
opportunity to testify today. My name is Charlie Ergen. I am 
the Chairman and CEO of DISH Network, the nation's third 
largest pay-TV provider.
    The Copyright Office has provided this Committee with a 
road map for updating the cable and satellite compulsory 
copyright licenses to reflect the changing video landscape. We 
agree with the Copyright Office that the digital age has 
arrived and the laws need to catch up. I would like to 
highlight three issues from the 2008 Copyright Office Report.
    First, the separate cable and satellite copyright regimes 
no longer make sense. We compete for the same customers, and we 
should have the same rules.
    Second, many consumers cannot get local news and sports 
from their home state because of the way local markets are 
defined.
    And, third, many rural communities are missing one or more 
of the four major networks.
    In addition, Congress should also address the interrelated 
issues of retransmission consent and must-carry when updating 
the compulsory copyright licenses this year.
    With respect to the first issue, the Copyright Office 
recommended folding the existing licenses into a unitary 
digital copyright license to reflect the changes in technology 
and place all providers on the same level playing field. We 
support that approach. Specifically, a unitary license for all 
pay-TV providers would ensure that all consumers get the 
services they need in a digital world, in a manner that is fair 
to the copyright holders, broadcasters, cable, satellite, and 
new entrants such as the telcos.
    Absent a unified license, we agree with the Copyright 
Office that there should at least be parity going forward 
between cable, satellite, and telco regimes. Consumers should 
have the benefit of the same bundle of rights under the law 
regardless of the pay-TV provider they select. It should not be 
harder or more expensive for one pay-TV provider to carry a 
local, significantly viewed, or nearby broadcaster than a rival 
platform because of distinctions in copyright law.
    With respect to the second issue, the Copyright Office also 
recognizes the need for DMA reform and enhanced competition 
between video providers. Citizens living in DMAs that straddle 
state borders are often denied access to news, weather, and 
election coverage from their home state. State Senator 
Hartwell, here today, represents one such community in Vermont, 
where DMA lines force constituents to watch local news from a 
neighboring State. Overall, this is an issue in 45 states. As 
you can see from the map of Iowa, which is over here, depending 
on where a customer lives, they may get local news from Iowa, 
Minnesota, Nebraska, South Dakota, or Missouri. This is just 
one example.
    Now, Senators have been receiving complaints from their 
constituents about this concern for many years. Mr. Chairman, 
you took the lead on this issue 5 years ago for two DMAs in 
Vermont and championed a similar effort in additional states. 
Importantly, these fixes helped consumers and did not cause any 
actual harm to broadcasters. Building off that forward-looking 
policy, we recommend a more global DMA fix. Specifically, a 
broadcast station from a neighboring DMA should be treated as 
``local'' for purposes of the copyright laws, particularly if 
it furthers the concept of ``state unity.'' With this change, 
citizens living in DMAs that straddle state borders would no 
longer be prevented from receiving their local news from their 
home state.
    Third, we agree with the Copyright Office that all 
consumers should have access to NBC, CBS, ABC, and FOX 
programming. Today, DISH Network provides local service in 178 
markets, out of the 210 total, reaching 97 percent of 
households. This translates into 1,400 local broadcast 
stations, which is far more than any other pay-TV provider. In 
most of the remaining markets, one or more of the big four 
networks is missing, and so it has not been economical to 
provide the service for them. If a local community is missing a 
broadcast station, providers should be able to treat a nearby 
affiliate as the ``local'' affiliate under copyright and 
communications law.
    And, finally, Congress should use this opportunity to 
examine retransmission consent and must-carry, given that those 
issues have been tied to our compulsory license. Technology and 
competition have come a long way in the last 5 years, but today 
there are multiple pay-TV providers in every DMA. Broadcast 
stations electing retransmission consent hold DISH customers 
hostage, as they play their local monopoly off multiple 
providers to extract huge license fees. In 2008 alone, 
consumers lost programming in approximately 15 percent of our 
markets because of retransmission consent fee disputes. Yet the 
same broadcasters provide their content for free on the 
Internet and to those lucky enough to live within the shrinking 
areas of digital over-the-air coverage.
    Because the broadcasters received billions of dollars of 
spectrum for free, we think the retransmission consent should 
be free as well. Failing that, we support the creation of a 
national retransmission consent rate. Satellite providers 
already pay a fixed, per-subscriber copyright royalty rate, and 
we see no reason why a similar concept would not work for 
retransmission consent.
    With respect to must-carry, we are forced to carry hundreds 
of must-carry stations that have little or no local content. 
This increases our costs and raises our prices to consumers at 
a time when consumers need all the disposable income they can 
get. Must-carry stations should be required to earn carriage by 
airing at least 20 hours of local programming each week. This 
would be beneficial to consumers and would have no harmful 
effect on broadcasters that invest in their local markets.
    We are in the middle of a digital age that is changing the 
way people watch TV. It is pretty simple: People want to watch 
TV anywhere, anytime. The Committee put down a marker 5 years 
ago to give consumers the flexibility to get truly local 
content.
    Again, thank you for inviting me to testify this morning.
    [The prepared statement of Mr. Ergen appears as a 
submission for the record.]
    Chairman Leahy. Well, thank you very much, Mr. Ergen. I 
appreciate your being here.
    James Yager is the Chair of the Television Board for the 
National Association of Broadcasters. He is also the CEO of the 
Barrington Broadcasting Group, which he founded to manage 
small-and mid-sized-market TV stations. Mr. Yager began his 
broadcasting career in 1960 with WIS-TV in Columbia, South 
Carolina, and he has held numerous managerial positions at 
multiple broadcast companies since.
    But in addition to his role with the NAB and Barrington 
Broadcasting, Mr. Yager serves on the boards of Broadcast Music 
Incorporated, Television Operators Caucus, the Maximum Service 
for Television. He is a graduate of Colgate University.
    Mr. Yager, we are delighted to have you here. Please go 
ahead, sir.

     STATEMENT OF K. JAMES YAGER, CHIEF EXECUTIVE OFFICER, 
    BARRINGTON BROADCASTING GROUP, L.L.C., HOFFMAN ESTATES, 
ILLINOIS, ON BEHALF OF THE NATIONAL ASSOCIATION OF BROADCASTERS

    Mr. Yager. Well, Mr. Chairman, thank you for that 
introduction, and members of the Committee, I am delighted to 
be here today. The Chairman has given you my background, so let 
me just begin by saying ever since Congress crafted the 
original Satellite Home Viewer Act of 1988, it has worked to 
further two objectives: first, that free, over-the-air 
television will remain widely available to American households; 
and, second, that satellite retransmissions will not jeopardize 
the local television service in any market. Those two goals 
remain paramount today.
    Our Barrington stations keep our communities informed and 
connected. We work every day to embody the spirit of localism 
which Congress has affirmed time and time again as a vital 
public policy goal. We do not charge our viewers to watch our 
programming. We rely on payments from advertisers to deliver a 
free service to your constituents. Without free, over-the-air 
television, cable and satellite companies would essentially be 
unrestrained in their ability to charge subscribers even higher 
rates.
    Broadcast television stations remain the primary source of 
the most diverse and popular entertainment, news, weather, and 
sports programming in the country. In fact, according to data 
from Nielsen Media Research, in the 2007-08 television season, 
488 of the top 500 prime-time television programs were 
broadcast on over-the-air television. While these stations 
represent a relatively small number of channels of those on 
cable and satellite systems, broadcast stations offer a unique 
and valuable service to their local markets that could be 
diminished by unnecessary changes to the law.
    As Congress considers updates to SHVERA, it is vital that 
you uphold and strengthen the tradition of localism. Any 
changes should not impair the enforcement of program market 
agreements that are essential to local broadcast service. 
Furthermore, this Committee should strengthen localism by 
phasing out satellite licenses for distant signals. The license 
should be placed with a requirement for local-into-local 
carriage in all television markets. This would enhance 
localism, program diversity, price competition, and increased 
choices for the viewer.
    Congress should mandate local-into-local service in every 
market in the country. There are 31 of the 210 television 
markets in small and rural areas that satellite companies have 
chosen not to serve. They have said this is a capacity issue. I 
believe it is purely and simply a business decision on their 
part. I am certain that if Congress does not step in, the 
satellite companies will never provide local service to every 
market in this country.
    Broadcasters have invested $1 billion, and more, in making 
the transition to digital television. So far there has been 
little economic return on that investment for broadcasters. 
Nevertheless, those investments, in my opinion, were in the 
public interest. The satellite industry's investment in 
providing local-into-local service to all Americans would also 
be in the public interest.
    Localism is at the forefront of the broadcasters' 
operations. In emergency situations, it is the broadcaster, not 
the cable or satellite companies, who is on the scene providing 
the public with emergency, life-saving, and timely information 
it needs. Localism is not in the DNA or business models of 
either cable or the satellite companies. Some Members of 
Congress have expressed frustration that their constituents do 
not have access to in-State but out-of-market television 
stations. Current law allows cable and satellite systems to 
offer non-duplicating, out-of-market programming to their 
subscribers. But many cable and satellite systems choose not to 
do so. However, Congress should not change current law to allow 
cable and satellite companies to offer network and syndicated 
programming that is identical to programs already offered by 
the local broadcaster who has negotiated to have those rights 
in their markets. Doing so would be inconsistent with the 
longstanding principle of localism and the carefully balanced 
system of retransmission consent that is established by 
Congress to further this principle.
    If we import a distant, in-State duplicating signal, it 
could undercut the retransmission consent rights of an in-
market station and seriously erode the local broadcaster's 
service to the public.
    Thank you for giving me the opportunity to testify, and I 
look forward to answering any questions you might have.
    [The prepared statement of Mr. Yager appears as a 
submission for the record.]
    Chairman Leahy. Thank you very much.
    Our next witness is Martin Franks, the Executive Vice 
President for Policy, Planning, and Government Relations with 
the CBS Corporation. He is responsible for overseeing the 
corporation's activities in Washington as well as with State 
and local government. He also oversees CBS' corporate 
philanthropy. He joined CBS in 1988 following extensive 
experience in Washington, including service on the staffs of 
President Jimmy Carter, Congressman Tony Coelho, as well as 
having to serve a sentence as my chief of staff for a period of 
time. He also serves as Vice Chair of the Board for Advertising 
Council and Maximum Service Television and is a graduate of 
Princeton University.
    Mr. Franks, please go ahead.

   STATEMENT OF MARTIN D. FRANKS, EXECUTIVE VICE PRESIDENT, 
POLICY, PLANNING AND GOVERNMENT RELATIONS, CBS CORPORATION, NEW 
                         YORK, NEW YORK

    Mr. Franks. Mr. Chairman, it is a very real pleasure to be 
working with you once again on an issue of crucial importance 
to Vermonters. The industry appreciates your leadership and 
your efforts to preserve the broadcast network-affiliate 
relationship while promoting competition in today's video 
marketplace. And CBS will always be grateful to you and Senator 
Specter for your courage and leadership on S. 852, the FAIR 
Act, in the 109th Congress.
    Mr. Chairman, Senator Kaufman, I want to thank the 
Committee for the opportunity to appear and to express CBS' 
view that the legislative issue on the table today is really a 
very narrow one: whether to extend satellite's compulsory 
distant-signal license once again. In contrast, the local-into-
local license is permanent and not part of this debate. Yet 
during the course of congressional deliberation over the 
distant-signal license, you will hear from parties seeking to 
exploit this legislation as a vehicle for a wish list of 
unrelated items, such as changes to retransmission consent or 
DMA modification.
    Besides complicating the legislative process, the issues of 
retransmission consent and DMA modification are not broken and 
do not need fixing. Each year CBS and other television 
broadcasters conclude hundreds of retransmission consent 
agreements with cable, satellite, and telephone operators. In 
an overwhelming majority of such instances, agreements are 
reached quietly, amicably, and in a mutually beneficial manner. 
Legislating to deal with a very few disputes against a pattern 
where there are literally hundreds of instances where willing 
sellers and willing buyers successfully reach agreement would 
be a solution in search of a problem. In the end, the 
retransmission consent regime works and in the manner Congress 
intended.
    DMAs are not a governmental creation. Rather, Nielsen 
groups counties by viewing patterns and the laws of physics and 
signal propagation rather than geographic boundaries. DMAs are 
the center of a broadcaster's economic universe, and any 
tinkering with the system, even in good economic times, could 
be financially seismic, not only for smaller local 
broadcasters, but also for local merchants who buy time on 
their local stations in order to reach potential customers in 
their markets, never anticipating that competing and confusing 
ads could be coming into the market from a station a hundred or 
even a thousand miles away.
    If the desired outcome is for viewers to access news from 
their out-of-market but in-State television stations, right 
now--right now, without the need to change any law or redefine 
any DMA--MVPDs may already import any station's newscast into 
any other market simply by securing the imported station's 
permission to do so. Stations control the copyright of their 
news programming and face absolutely no restriction in making 
them available to multichannel providers in nearby markets 
looking to augment news programming.
    While we are prepared to work on any problem areas where 
there may be issues with regard to local and in-State news, 
please do not fall for the masquerade of those who are using 
DMA reform as a proxy for their real objective: a means for 
MVPDs to obtain bargaining leverage in a retransmission consent 
regime that is now in nearly perfect balance.
    Television broadcasters have the right, through the 
Copyright and Communications Acts and private contracts, to 
control the distribution of the national and local programming 
they transmit. The CBS Television Network alone invests 
billions of dollars each year in order to be able to deliver 
the highest-quality news, sports, and entertainment 
programming.
    Three weeks from tomorrow, the national phenomenon known as 
``March Madness'' will tip off. Each year CBS spends hundreds 
of millions of dollars just for the rights to the 3 weeks of 
March Madness alone. It is a hefty investment but one that, in 
partnership with the NCAA and our affiliates, gives us the 
right to determine how the content can be distributed in a way 
that produces a return on that investment and a benefit to 
American viewers. That expensive investment in high-quality 
programming pays off. Superior programming generates viewing 
that helps not only the CBS network and the stations we own, 
but also our affiliated stations nationwide.
    High-quality network programming benefits local stations 
because they sell advertising within that network programming. 
That allows them to make significant financial investments in 
local news, sports, weather, and other programming, including 
syndicated shows like ``Wheel of Fortune,'' ``Jeopardy,'' and 
``Oprah,'' some of your constituents' favorite programs.
    This mutually beneficial network-affiliate national and 
local arrangement, of course, is not unique to CBS. It is also 
enjoyed by the other networks and their affiliated stations 
across the country. In the end, however, it is local viewers 
who benefit most from this system.
    Mr. Chairman, again I would like to thank you and the 
Committee for helping to foster today's robust video delivery 
marketplace, where, thanks to vigorous competition, broadcast 
television is still an integral player deeply valued by 
American viewers.
    Thank you.
    [The prepared statement of Mr. Franks appears as a 
submission for the record.]
    Chairman Leahy. Thank you very much.
    Our next witness is David Cohen, Executive Vice President 
for the Philadelphia-based Comcast Corporation, senior counsel 
to the CEO, well-known to this Committee. Prior to joining 
Comcast, Mr. Cohen was a partner and Chairman of Ballard Spahr 
Andrews & Ingersoll, one of the largest law firms in the 
country. He serves on several distinguished boards and 
committees, including the Greater Philadelphia Chamber of 
Commerce, where he serves as Chairman. He serves on Penn 
Medicine, the Trustees of the University of Pennsylvania. He 
has a bachelor's degree from Swarthmore and his law degree from 
the University of Pennsylvania Law School.
    Mr. Cohen, it is nice to see you again. Please go ahead, 
sir.

STATEMENT OF DAVID L. COHEN, EXECUTIVE VICE PRESIDENT, COMCAST 
            CORPORATION, PHILADELPHIA, PENNSYLVANIA

    Mr. Cohen. Thank you, Mr. Chairman, and thank you for the 
opportunity to testify. While acknowledging the slight 
alteration from Senate protocol, I want to take a small piece 
of personal witness privilege and say what a pleasure it is to 
testify before your newest member, whom I have had the 
opportunity to work with on a wide variety of matters for over 
20 years, and what a pleasure it is to say ``Senator Kaufman.'' 
So a real pleasure to be here and to see you, Senator.
    Chairman Leahy. And I will certainly give you extra time 
for this. I must say also, Mr. Cohen, how delighted I am that 
Senator Kaufman is here, and he has been joined by Senator 
Klobuchar, two new members of this Committee. It makes my life 
a lot easier.
    Please go ahead, sir.
    Mr. Cohen. Thank you. I would like to focus my oral 
comments today on two basic points relating to the Section 111 
compulsory copyright license:
    First, cable's compulsory license works--for the consumers, 
for the copyright holders, and for cable. It is still 
necessary, and it should not be repealed or substantially 
altered.
    And, second, in light of a recent Copyright Office ruling, 
cable's compulsory license should be clarified to ensure that 
royalties are not paid on so-called phantom signals, which I 
will describe a little later.
    The compulsory license is critical to the cable industry 
and to our customers and your constituents. Without this 
license, it would be all but impossible as a practical matter 
for cable operators to secure the necessary clearances for each 
copyrighted program included in their cable line-ups--an 
estimated 500 million separate copyrighted programs every year. 
With the license, we get these rights, our customers get the 
programming they expect and value, and the underlying copyright 
owners get appropriate compensation. In fact, since 1976, the 
inception of the compulsory license, the cable industry has 
paid almost $4 billion in royalties, including well over $150 
million last year alone.
    In a report to Congress last year, the Copyright Office 
suggested that the compulsory copyright license could be 
repealed and that some replacement mechanism would likely 
emerge. I think that is wishful thinking. No better model has 
emerged anywhere in the world. And as strongly as I believe in 
free markets, the cable compulsory license is meeting the needs 
of consumers, copyright owners, and cable operators. And so I 
think we are confronted with a clear case of ``If it ain't 
broke, don't fix it.''
    Another idea that some have raised is whether Congress 
should consider harmonizing cable's compulsory license with the 
satellite industry's statutory license. The cable and satellite 
licenses are different largely because the FCC rules that 
determine how they can offer broadcast programming are very 
different.
    For example, cable operators are required to put all 
broadcast signals on the basic tier and make every subscriber 
buy that tier. That requirement does not apply to satellite 
companies, and there are additional important differences as 
well. Parity or harmonization of the cable and satellite 
licenses could not be achieved without major modifications to 
the cable and satellite regulatory and legislative schemes, and 
all of these changes will likely result in the disruptive loss 
of some broadcast signal retransmissions to your constituents. 
We strongly recommend against any such plan.
    There is one discrete area, however, where legislative 
action would be important: to deal with the so-called phantom 
signal issue I mentioned earlier. Let me use a simple example 
to explain the problem.
    Assume we have two communities, A and B, served by two 
separate Comcast cable systems. Community A has 5,000 
subscribers and has historically paid a distant signal charge 
on WZZZ only for the 5,000 subscribers in Community A--the 
customers who actually receive the signal. Community B has 
100,000 subscribers and does not receive WZZZ.
    But if Comcast were to connect the two cable systems with a 
fiber link to permit the more efficient delivery of advanced 
services, even though it made no changes to the channel line-
ups in either Community A or Community B, the Copyright Office 
now says that Comcast should pay royalties on WZZZ as if it 
were delivered not just to the 5,000 customers in Community A 
which actually receive the signal, but also to all 100,000 
subscribers in Community B who are not receiving the signal. In 
essence, Comcast would suddenly be paying 20 times more just to 
deliver the signal to the same 5,000 people. This phenomenon is 
called ``phantom signals,'' and I respectfully suggest it is an 
absurd result.
    The Copyright Office itself acknowledges that the result is 
illogical and probably not intended by the statute, but it 
insists that the existing statutory language gives them no 
choice and that this is a problem for Congress to fix.
    So we request that Congress consider a modest change to 
Section 111 to clarify that royalty fees need only be 
calculated on distant broadcast signals that are actually 
available to subscribers, and not on phantom broadcast signals.
    Thank you again for inviting me to testify, and I look 
forward to your questions.
    [The prepared statement of Mr. Cohen appears as a 
submission for the record.]
    Chairman Leahy. Thank you very much.
    Our last witness, Senator Bob Hartwell, is the Vermont 
State Senator for the District of Bennington. That includes 
Bennington County and Wilmington, Vermont, as I mentioned 
before, in the southwest corner of our State--a part where for 
some time television was mostly out of Albany, New York, and 
Vermont news was left out. Prior to beginning his service in 
the Vermont State Senate in 2007, Senator Hartwell was active 
in his community, served on the Bennington County Regional 
Planning Commission from 1997 to 2007; the Town of Dorset's 
Select Board from 2001 to 2004. He continues to serve on the 
New England Association of Regional Councils, and formerly in 
private law practice.
    Senator Hartwell, good to have you here. Please go ahead, 
sir.

 STATEMENT OF HON. ROBERT M. HARTWELL, VERMONT STATE SENATOR, 
        BENNINGTON DISTRICT, MANCHESTER CENTER, VERMONT

    Mr. Hartwell. Thank you, Senator, and thank you, members of 
the Committee, for allowing me the time to testify today. As 
Senator Leahy has said, I am in the Vermont State Senate. I 
serve on the Senate Committee on Natural Resources and Energy 
and on the Senate Committee on Finance, and I reside in the 
town of Dorset. There are 17 towns in Bennington County that I 
represent, and the one town, Wilmington, in the county of 
Windham immediately to its east.
    I am testifying as to the importance of providing local 
television access to residents in rural areas in rural States 
like Vermont. These areas are exemplified by Bennington and 
Windham counties, and I am requesting that the Committee assure 
that Vermont commercial and public television will be available 
in Bennington and Windham counties.
    Many of the towns in my district are exemplified as rural 
villages and residences clustered across the rural landscape, 
some of it farms, much of it working forests. These residences 
are separated in many instances by great distances. Nine of my 
towns have populations of less than a thousand people each, and 
for many of these people, satellite is their only access to 
television news, weather, and advertising. Most of these towns 
are located in mountainous areas accessible by one State 
secondary highway and a maze of local roads, many of them dirt 
roads.
    My constituents remind me that they are unable to receive 
cable television due to the prohibitive cost of bringing cable 
to rural homes given the distance, and even in cases in which 
cable is available in the area, the cost of bringing it to a 
few isolated residences is prohibitive. These same people, 
again, have access to television only through satellite, but 
many have no access to Vermont television programming 
whatsoever because Windham County has been assigned to the 
Boston DMA and Bennington County has been assigned to the 
Albany, New York, DMA.
    My own home is an example of this. Even as a State Senator, 
I do not see Vermont news on my television.
    Thanks to the Leahy provision added in the 2004 
reauthorization, DirecTV subscribers in Bennington and Windham 
counties do have access to Vermont television stations. But 
many of our subscribers are DISH Network subscribers, as I am, 
and do not have access to Vermont television or Vermont 
programming of any kind.
    I have constituents in this situation who are relegated to 
leaving home in search of a newspaper, which is likely to be a 
more prompt source of news for them. A good example of this is 
that during an election, they have access to television, but to 
the national results. But when it comes to local and State 
results, they do not have access at all and do not learn about 
it until 1 or 2 or even 3 days later, some of these areas being 
served only by weekly newspapers, which usually come out on a 
Friday. This search is frustrated somewhat further by the 
absence of what would be called a statewide newspaper.
    To put all of this in perspective, many of my constituents 
have served on their town select boards and school boards and 
other commissions and agencies, many of which are elective 
offices, as I have. Many of the proceedings of these boards and 
commissions are now available through local cable access, and 
those who have cable can see them. But many of my constituents 
who have served on these commissions never see them. They 
cannot get access to cable, and there is nothing for them 
whatsoever on satellite if they are DISH Network subscribers. 
This is frustrating for them, and they seem to feel or seem to 
express some sense of discrimination since they simply do not 
have access. Many of these people are retired. My constituents 
in Bennington County tend to be older than the rest of the 
State, and they have misgivings about going out at night to 
proceedings of this nature, and they usually occur at night.
    The placement of Windham County in the Boston DMA and the 
placement of Bennington County in the Albany DMA precludes the 
receipt of any Vermont news, weather, and advertising. A 
specific example of this would be that when we watch the 
Weather Channel at my house and houses similarly situated, we 
see the national weather. We know what is going on. But there 
is no current status and no forecasts for the immediate area, 
which you would find if you had access to cable. You would have 
a local status and forecast for Bennington area, and you would 
have one for the Brattleboro area in Windham County. We cannot 
see that status from our televisions at this time.
    I believe that all residents, including those in rural 
areas, have a reasonable expectancy of access to news, weather, 
and other programming relative to their home State and, 
therefore, of interest to them. I urge the Committee to work to 
assure that residents of rural areas such as the area I 
represent receive satellite television at reasonable cost with 
programming relevant to the State of Vermont, the State in 
which they live.
    Again, I want to thank you, Mr. Chairman and members of the 
Committee, for allowing me to testify about this important 
issue of public policy, and certainly a very important issue to 
my constituency in Vermont.
    [The prepared statement of Mr. Hartwell appears as a 
submission for the record.]
    Chairman Leahy. Thank you, Senator.
    Of course, you have the situation where Vermont is having a 
major debate in the legislature right now, as many other States 
are, on what to do in this economy with the changes in the 
State budget, the changes that are going to affect your 
constituents certainly in southern Vermont, as well as in all 
other parts of Vermont. And without this kind of coverage, your 
constituents are more apt to hear what is happening in Albany 
with the New York Legislature than they are about what is 
happening in Vermont. Is that correct?
    Mr. Hartwell. Yes, Senator, that is correct. I think 
certainly they will receive a lot more information about what 
is going on in Albany than they will of what is going on 
Montpelier. But they want to know what is going on in 
Montpelier.
    Chairman Leahy. Congress created the local license for 
satellite television, as has been talked about today, in 1999. 
Let me ask each of you: How has authorizing satellite companies 
to provide subscribers with local stations affected competition 
among video service providers from your view? And if you could 
keep it fairly brief, and certainly I will give everybody time 
to expand their testimony for the record.
    Mr. Ergen.
    Mr. Ergen. Thank you, Senator. It has been great, I think, 
for consumers. They were asking for it when we started back in 
1994 in this business, in the direct-to-home business, and it 
took us 5 years to get a law. And it has been one of the great 
success stories of this Committee to provide competition. The 
FCC has shown that where local channels are provided, customers 
have benefited from increased competition in lower rates for 
their TV programming and more choice.
    Chairman Leahy. Mr. Yager.
    Mr. Yager. Well, I believe in competition, and I think the 
satellite and cable industries have proven to all of us that 
good competition offers choice as long as we have local-into-
local service do not differentiate against our local stations.
    Chairman Leahy. Mr. Franks.
    Mr. Franks. It has been nothing but a boon to the video 
marketplace but, more important, to consumers. I would just 
stress, though, on Senator Hartwell's point, there is nothing 
in the law or regulation today that prevents a cable or 
satellite operator from bringing Burlington news into the 
southern Vermont counties.
    Chairman Leahy. Mr. Cohen.
    Mr. Cohen. Mr. Chairman, I agree with everyone on the 
panel. I think this has been a boon to competition, and I think 
it has made the cable industry a better competitor. And I think 
price is one thing, but I think if you look at the quality and 
the variety of services that are now being delivered by cable, 
by satellite, and now by the telcos as they go into that space, 
I think all of that was stimulated by bringing local television 
onto satellite.
    Chairman Leahy. Senator Hartwell.
    Mr. Hartwell. I would just re-emphasize, Senator, that for 
us it is an availability issue right now. Certainly satellite 
has been very important. Without the satellite, we would have 
no communication where I live.
    Chairman Leahy. The Copyright Office in their report has 
recommended that Congress either unify or harmonize the cable 
and satellite licenses. I have received a lot of mail from your 
industry on this, and each of you has a different perspective 
on the licenses. So let me ask you your views.
    Are there aspects of the satellite licenses that do not 
work in the cable world? How would the broadcasters and content 
owners view such a change? Let us start with you, Mr. Ergen.
    Mr. Ergen. As Mr. Cohen pointed out, there are some 
differences between what cable does and satellite, primarily 
because satellite has the ability to do a national signal and 
cable is only capable of doing a local signal.
    Having said that, I do believe that it is something that we 
should do, and we should be able to get to a unitary license. 
Mr. Cohen thought it was too complicated to do that. That is 
typically because they have several advantages over us in terms 
of how much they pay for copyright. On a percentage basis, we 
have paid much more than--in the satellite industry, we have 
paid a much greater percentage of our revenue to license fees. 
So we think that it needs to level the playing field.
    In addition, things like phantom subscribers are things 
that should be fixed, and there are some things that work for 
cable and some things that work for satellite. But I believe 
that with enough effort it would be relatively easy to get to a 
unified license.
    Chairman Leahy. Mr. Yager.
    Mr. Yager. Mr. Chairman, they are obviously very different 
technologies. The satellite technology and the cable technology 
are not the same. I would be concerned that trying to harmonize 
them might have unintended consequences, but the NAB really 
does not have a position on this issue.
    Chairman Leahy. Thank you.
    Mr. Franks.
    Mr. Franks. I promised our general counsel I would not 
practice law without a license again, Senator. I am far from a 
copyright expert. I would just say, though, the current system 
works pretty well. And to Jim's point, Mr. Yager's point about 
unintended consequences, when we try and change things to make 
them better, sometimes we do not make them better. And my 
temptation would be, as I testified, to do simply a straight 
reauthorization of the satellite license.
    Chairman Leahy. Mr. Cohen.
    Mr. Cohen. Mr. Chairman, just to be clear, I think I heard 
two questions in your question, which are the two possible 
recommendations from the Copyright Office:
    One, to eliminate the license, and I do not think there is 
any appetite by anyone on this panel to eliminate the license. 
I addressed it somewhat in my oral testimony, more in my 
written testimony, but I think that calls for the likelihood of 
chaos, massive disruption to customers, and is definitely not a 
recommendation that should be pursued.
    The second half of the question is, OK, if we are going to 
keep the license, should the cable versus satellite provisions 
be harmonized? And it is our position that they should not be. 
Again, the current structure basically works. There are 
differences, but those differences, I would suggest, are rooted 
in technology and different regulatory treatments; and that if 
you are trying to level the competitive playing field, you 
cannot just look at the compulsory copyright license. You have 
to look at the entire playing field, which is a considerably 
more complicated endeavor that involves a wide variety of 
regulatory restrictions, some of which are imposed on us, some 
of which are imposed on satellite.
    I would also note that it is not at all clear that, in 
fact, in the aggregate cable ``pays more'' and satellite ``pays 
less.'' And, again, the potential disruptions that could come 
from these changes I think are something this Committee has to 
be concerned about.
    I would close with one----
    Chairman Leahy. You would not agree with the Copyright 
Office that Congress should either unify or harmonize the 
cable----
    Mr. Cohen. We disagree with both those recommendations. But 
I want to make clear, this is actually not a cable-versus-
satellite issue. It happens to be an issue on which Mr. Ergen 
and I disagree. But I want to quote to you from some 
interesting testimony that was given on the other side of the 
Capitol, which I think is still in the same jurisdiction, if 
not in the same Committee, yesterday. That testimony, I will 
just read a very brief portion of it:
    ``Harmonization is better in theory than in practice. 
Imposing cable rules on satellite is problematic. Imposing 
satellite rules on cable cannot be any better. In the real 
world, harmonization would almost certainly result in consumer 
disruption.''
    The source of that testimony was DirecTV testifying against 
harmonization of the cable and satellite licenses.
    Chairman Leahy. Thank you. My time is up, and I will yield 
to Senator Hatch--unless you wanted to add something to that, 
Senator Hartwell.
    Mr. Hartwell. Thank you, Senator. For me, it is----
    Chairman Leahy. You just want to get the service.
    Mr. Hartwell. The signal is coming from the satellite, 
Senator. Yes, that is what I want.
    Chairman Leahy. Thank you.
    Senator Hatch.
    Senator Hatch. Well, thank you, Mr. Chairman.
    Now, Section 109 of SHVERA, the Satellite Home Viewer 
Extension and Reauthorization Act, required the Copyright 
Office to examine and compare the statutory licensing systems 
for the cable and satellite television industries under 
Sections 111, 119, and 122 of the Copyright Act and recommend 
any necessary legislative changes no later than June 30th of 
2008.
    Now, I know some of you referenced the report in your 
remarks, but I would like to just ask this question, for 
anybody who cares to answer it: Did the Copyright Office get it 
right or didn't it? Mr. Ergen.
    Mr. Ergen. I will start with that. I think in general they 
got it right. We all have our different constituencies. Some of 
us are public companies. We all have our own self-interest 
here. The Copyright Office really is an independent party, 
really does not get into shareholders and different 
constituencies. And so I think in general they got it right, 
and most of the panel here, other than myself, have said, ``We 
do not want to change anything.'' And that is usually 
indicative of a marketplace where somebody is pretty 
comfortable. They do not want to change anything because they 
do not want additional competition and so forth. And I think in 
general the Copyright Office is a good place for this Committee 
to start, as it is written by a third-party, objective 
observer.
    Senator Hatch. Anybody else care to comment?
    Mr. Cohen. I think, Senator, as I said, the Copyright 
Office got some things right. I think they got some things 
wrong. And one of the reasons for that is that I think when you 
look at the purposes of the compulsory copyright license, there 
were a number of stakeholder interests that needed to be 
examined: copyright owners, distributors, and the consumer 
interest. And I think where the Copyright Office fell down is 
that they did not properly value the consumer interests and the 
risks of disruption to our customers and your constituents to 
some of the changes that they proposed. And I think that is the 
underlying reason why they reached contrary conclusions, or 
conclusions that I do not think are supported by the overall 
public policy objectives that this Committee has in front of 
it.
    Senator Hatch. OK. The 2008 Copyright Office Report states 
that the cable and satellite industries are no longer dependent 
upon distant signals, as they were at the outset of the 
licenses, so repealing the distant-signal licenses will not 
have the dramatic effect that it would have had years ago.
    I would just like to know what your thoughts are on this 
finding. And what is your response to the argument made by the 
Copyright Office that current distant licenses have impeded the 
development of the sub-licensing system? And how would 
repealing the distant-signal licenses affect viewers? Yes, Mr. 
Yager.
    Mr. Yager. Repealing the distant-signal license is just 
part, I think, of the progress we have made in technology in 
terms of the satellite industry, as well as the cable industry. 
The NAB supports repeal of the distant-signal license. We 
support the local-into-local in all small markets, and they are 
all small markets that do not have local-into-local today. So 
we would support local-into-local, but we think basically the 
Copyright Office got it pretty right the first time.
    Senator Hatch. Mr. Yager, the Internet has opened up a 
whole new world of how television networks offer news, sports, 
entertainment, and other types of programming. Now, online 
video aggregators, like iTunes and Hulu, allow us to download 
or share their content over the Internet. Now, slingbox 
technology allows one to redirect local network streams 
remotely. Of course, not to be forgotten are digital recorders 
which allow viewers to watch programs at their leisure.
    Now, with everything available to the consumer today, why 
are you opposed, if you are, to importing TV stations' signals 
from adjacent DMAs, especially in areas where those DMAs cross 
State lines? Let me give you an example. If my fellow Utahans 
are receiving their local channel either through their cable or 
satellite providers, but want to pay an additional fee to 
receive a Las Vegas, Nevada, channel or a Denver, Colorado, 
channel, why would you oppose that option? And do you agree 
that in light of the emerging technologies, a new approach will 
be necessary to address how consumers are accessing TV 
programming?
    Mr. Yager. I think the issues of DMAs and in-market/out-of-
market stations are much more complex. Let me just give you an 
example of a station we own in Amarillo, Texas. It serves three 
counties in Oklahoma, up in the Oklahoma Panhandle. We are in 
the Texas Panhandle. The closest in-State station to those 
three Oklahoma counties is 334 miles away, and an omnibus 
change to the definition of ``DMAs'' could gigantically impact 
the service we provide to those three small counties in the 
Panhandle of Oklahoma. We are the ones who put emergency 
information on the air for them. We are the ones who report 
their school closings. We are the ones who cover their high 
school football games. And we are the ones that cover their 
local political institutions.
    It is hard for me to believe that a station that is 335 
miles away would do the same for those three counties that we 
would do. That is the essence of the DMA structure we have had 
in this country for now about 45 years.
    I would strongly believe that--there are exceptions, 
certainly, to DMA, and there are four exceptions currently to 
the in-State/out-of-market regime. But if we are going to get 
into DMAs, we have got to look at each one as an individual 
kind of situation.
    Let me just give you one other: North Carolina. For years, 
I managed a station in Spartanburg, South Carolina, that served 
the northwestern part of the State of North Carolina. We had 40 
translators up in the North Carolina area. If we could not 
serve that area, that market would have lost its viability in 
terms of its North Carolina audience, and the Asheville station 
would then be competing, if they brought in in-market stations, 
against much larger stations from Charlotte, North Carolina.
    So I really think when we get into the DMA situation, it is 
a much more complex situation than just saying let's bring in 
out-of-State stations to in-market stations--markets.
    Senator Hatch. Mr. Franks.
    Mr. Franks. Senator Hatch, let me address two points, I 
believe. As one of the networks that is providing content over 
the Internet, let me point out that we do not do that until a 
considerable period of time after it has aired live on the 
network. So that is one issue.
    Another is we do not put on our full complement of 
programming, either because we do not have the rights or for 
another business reason. But if as we enter into the Internet 
distribution of our programming, it is done as a private 
contractual agreement either with our affiliates or with--we 
supply video on demand to Comcast, or we are about to start 
supplying video on demand to Mr. Ergen. Those are private 
contractual arrangements that, frankly, work just fine and I do 
not think need congressional intervention.
    On the out-of-market question, I think the biggest--as I 
say, out-of-market news can be provided today. Once you get 
beyond news into either the entertainment programs or the 
sports programming, you enter a whole new web of copyrights, 
and of rights holders, and it is a very complicated world. But 
even more important than that, if Las Vegas starts coming into 
southern Utah, you are going to ultimately undermine not only 
the economics of the stations in Salt Lake or St. George or 
other parts of the State, but you are also going to hurt the 
local businesses that advertise on that station. A car dealer 
in St. George is buying an ad to reach that region. If a Las 
Vegas car dealer ad is coming in, I do not think too many 
people from St. George are going to Las Vegas to buy their car. 
And you are going to undermine that local economy, not just the 
station.
    Senator Hatch. You never know.
    Mr. Ergen. Senator, if I may, I would like to give an 
opposing view, perhaps, that our customers tell us about. You 
have heard that it was too complicated, these DMAs are too 
complicated and so forth. If we listen, with all due respect, 
to the broadcasters here, we would still have the horse and 
buggy.
    As you correctly point out, technology has changed. You can 
watch any of these channels on the Internet. Why can't you 
watch them on your satellite or cable system?
    And consumers, you cannot just put the news on and turn it 
on and off. It would be disruptive to consumers. And as Senator 
Hartwell said, people in Vermont in March Madness that is 
coming up, they want to watch the University of Vermont when 
they are in southwest Vermont. They do not want to watch the 
University of Rutgers because they are getting the Albany 
station. And at some point, I hope that the desires and the 
rights of consumers and what people want to see, they can get 
another technology until we bring the broadcasting world into 
the 21st century, into the digital age. And I think we have to 
keep the consumer in mind.
    Chairman Leahy. We have gone way over time, and we are 
going to have to--and I am supposed to be at another hearing. 
But, Mr. Franks, I would give you--very, very briefly.
    Mr. Franks. What Mr. Ergen just said is not that he cannot 
deliver the local news. It is that he does not want to deliver 
the local news without also being able to deliver the prime-
time programming.
    Mr. Ergen. Let me just put on the record that that is not 
true. I have gone to broadcasters to deliver local news, and 
what they say is, ``Well, our local news has national content 
in it. So when we do the local news from NBC, we may carry a 
national feed of NBC during the middle of the news, and we do 
not have the rights to do that. So we cannot give you the 
rights to do that.''
    So it is beyond news. It is also--but it is really people 
in Vermont want to see Vermont, and it is as simple as that. It 
is not complicated. And when you start--when people on a 
committee up here start talking about complicated, that is code 
for, ``We do not want competition.''
    Chairman Leahy. We are going to go to Senator Feingold and 
then Senator Kaufman, Senator Klobuchar, and Senator Cardin, 
depending upon which ones are here. I am going to step out 
briefly and turn the gavel over to Senator Feingold.
    Senator Feingold [presiding.] Thank you, Mr. Chairman. 
Thanks for having this hearing on television and the digital 
age. I know that the focus of this hearing is primarily on the 
SHVERA reauthorization, but I did want to take a minute to 
focus on some concerns of my constituents. Let me start with a 
comment on the digital transition itself, which has been a 
stressful time for many of my constituents who rely on over-
the-air television for information and entertainment.
    I want to acknowledge the hard work of many of your 
companies in helping to get the word out about the transition. 
I know that the Wisconsin broadcasters were diligent about 
setting up regional call centers and also believe that other 
industry segments were involved as well. While clearly there 
were problems with the converter box coupon program that are 
now being resolved, I remain concerned about individuals on the 
edges of markets that are going to be unable to receive over-
the-air digital signals and are facing the prospect of 
significant expense to either subscribe to a pay-TV service or 
invest in an antenna that may or may not fix their situation.
    Similarly, the shift from analog to digital in pay-
television services can also have ramifications as channels are 
shifted and compatibility issues arise with older television 
sets. These burdens can be especially daunting for low-income 
individuals and seniors living on a fixed income, and we have 
to make sure that we keep these populations in mind, 
particularly because many of them rely so heavily on television 
for entertainment.
    The other main area of concern I heard about in Wisconsin 
regards content. I go to every one of Wisconsin's 72 counties 
every year for a public town hall meeting. I cannot say that 
television is one of the top topics, but in the northwestern 
part of Wisconsin, it is a consistent concern. No offense to 
Senator Klobuchar, who was just here, but as was just being 
indicated by some of you folks, my constituents want to know 
why they can only get news about what is happening in 
Minnesota's government rather than about the laws and budget of 
Wisconsin. And while they can understand that some football 
fans might want to see the Vikings--we do have a little bit of 
dissension in that part of the State--most of my constituents 
only want to watch them when they lose to the Packers.
    [Laughter.]
    Senator Feingold. And they are extremely frustrated by what 
they see as an arbitrary decision on a map that prevents them 
from seeing their favorite team. So let me turn to my 
questions.
    Mr. Ergen, in your testimony you mentioned the need to find 
a way to address this situation. Tell me a little bit more 
about how you would envision this working. Would consumers have 
to subscribe to an additional in-State station and pay a fee? 
Would copyright holders and broadcasters be compensated?
    Mr. Ergen. Yes, I think the solution is very simple, and 
the Copyright Office addressed this in part. I think we need to 
expand the definition of ``local into local.'' We all know that 
in the DMA we can broadcast the local stations. We need to 
expand that ``local-into-local'' definition to include the 
adjacent DMA. I believe that to do that, to protect 
broadcasters, as Mr. Yager had said, you must first broadcast 
to the local market DMA, and then you would have the right to 
bring in the adjacent market. You then should compensate the 
adjacent market through retransmission consent and private 
agreements. That way the copyright holder is also protected.
    There will be differences in sports leagues and so forth 
and so on, and I think that once you expand local to local, the 
copyright holders will do their negotiations around that 
expanded local into local. I think it is a very, very simple 
solution.
    Senator Feingold. OK. Mr. Yager and Mr. Franks, Senator 
Hatch and Senator Leahy sort of touched on this, I think, but I 
noticed in your prepared testimony that you would oppose 
modification of DMAs to allow my constituents to watch the 
Packers and receive local news. Believe me, it will not go over 
well at my next town hall meeting during football season in 
northwestern Wisconsin. Do you have another solution to the 
issue? Or in your minds is it simply not a problem?
    Mr. Franks. Well, first off, Senator, unlike what Mr. Ergen 
said a few minutes ago, the CBS Television Network is willing 
to sign off any rights in our news programming to allow our 
local affiliates to give the right to an adjacent market to 
carry their local news. Local news is not really an issue in 
this hearing, I do not believe.
    The sports questions, though, are a very different question 
because there you are dealing with a very powerful rights 
hold--in this case, the National Football League--and with all 
due respect, I think it is a question you really need to 
address to them, because even if we wanted to allow that 
adjacent market in, we do not have the contractual right from 
the league to do that. And, in fact, we are regularly called 
upon by the league to enforce their territorial blackouts as 
part of our contractual obligation to them.
    Senator Feingold. Mr. Yager.
    Mr. Yager. Well, I agree with my colleague from CBS. They 
are the ones who negotiate for the national rights for major 
sporting events, and they negotiate with the NFL. The local 
station has very little it can do to carry an NFL game other 
than work with its network on what they offer.
    I understand the problem from--I happen to be a Bears fan, 
so I do not totally understand the problem that anybody would 
want to watch both the Packers----
    Senator Feingold. Well, we have a problem with that in 
another part of the state.
    [Laughter.]
    Mr. Yager. But it really is something you should be 
addressing with the NFL because it is a contractual----
    Senator Feingold. All right. My time is up. I would turn to 
Senator Cardin for his round and turn the gavel over to him.
    Senator Cardin [presiding.] Well, let me thank you all. I 
really came to this hearing to try to learn more about this 
issue. I represent Maryland, as you know, and we really have 
not seen the problems that have been expressed by those 
Senators who represent States that have a larger rural 
community. I represent rural areas in Maryland, and they do 
have this issue, but it has not been a dominant issue. I really 
wanted to try to understand more about the challenges.
    I was pleased to hear the last response, and I just hope 
that we can clarify that, because local content news is perhaps 
the most single important issue that we want to make sure 
communities can receive. And it seemed like there was more 
agreement than the information that we had received before. So 
perhaps we have made some progress on that as a result of this 
hearing.
    The other matter that I find challenging is that we have 
technology changing all the time, and with the use of the 
communications through the Internet, competition is not what it 
was when these laws were developed. And I think as we look at 
trying to harmonize and modernize the laws as it relates to 
different ways in which families receive their video 
communication, we have to be realistic that technology is not 
static and will continue to change and that what we put in law 
will be able to allow for fair competition and access as we 
move forward on these issues.
    So, with that in mind, I am just going to ask a general 
question as to are there changes that we should be looking at 
because of the technology changes that are currently taking 
place. As it relates to the way individuals can get video 
communication today, it is not from the conventional television 
set, but it is from so many different other sources. Do you 
have any advice for us in that regard?
    Mr. Ergen. I think I will start with that, and I was 
privileged to testify yesterday on the House side Commerce 
Committee where a representative from Consumers Union, Ms. 
Sohn, talked about this particular subject, and also a 
representative from one of the think tanks talked about this 
subject. And the big thing is that geographic lines no longer 
mean anything. In fact, almost they do not even mean anything 
around the world, but they certainly do not mean much anymore 
with today's technology from a geography DMA line that is 
randomly drawn through a Nielsen rating from 50 years ago on a 
map. You know, we showed a map earlier from Iowa that shows 
just how convoluted those DMA maps are. So with the advent of 
the Internet, it is ludicrous that you could watch any TV on 
your computer, but on your TV set you have to be in some DMA 
line that was broadcaster to broadcaster.
    So what I hope does not happen is we do not go another 5 
years with restrictions that do not keep up with the 
technology, and I think you have to look at that. Your point is 
well taken.
    Senator Cardin. I appreciate that.
    Mr. Yager.
    Mr. Yager. I would hate to mix technology with the DMA 
issue. The DMA issue is one that is voted upon by the viewers 
in their community. And, by the way, DMAs change every year. 
But your point on technology is a very valid one. It does not 
really impact, I think, the DMA issue, as Mr. Ergen would 
suggest.
    Where we think technology is going, look what we can do 
with digital. Look what we will be able to do with digital. 
Today we can probably multi-cast two channels other than the 
major channel we have. We think this is going to solve a lot of 
local problems, local service problems in the communities we 
serve. And we agree with you. We think technology is growing 
very rapidly, and when we get out of MPEG2 to MPEG4, which 
allows us to probably multi-cast four or five channels in the 
local market, Mr. Ergen is going to have further problems 
because we are going to say we want those carried as well on 
satellite.
    Mr. Franks. Senator Cardin, let me put on a slightly 
different hat, if I may. Instead of television network per se, 
let me be a program producer. For instance, we own the three 
``CSI'' programs, three of the top-ten most popular programs in 
the country. A challenge for us is that technology is indeed 
breaking down the windows and the business models in which we 
air that programming. But the technology is ahead of the 
economic models. So while, yes, we put the ``CSI'' on the 
Internet on a delayed basis for a video-on-demand experience 
for consumers, our network business is a $4.5 billion business, 
and attracting the advertisers to that simultaneous national 
viewing of a Thursday night ``CSI'' episode is what allows us 
to spend millions of dollars to create just that single 
episode.
    The revenues from the Internet are still in comparison de 
minimis, and it is why we are very careful in how we manage our 
Internet business so that it does not completely cannibalize 
the economic model that allows us to produce this popular 
programming. That is the threat we feel from technology. We 
will sort out our business issues with Mr. Ergen and Mr. Cohen. 
We are all big companies. We can protect ourselves pretty well. 
It is this attack on the economic model, the disruptive 
technology in that sense of the economic model, and it becomes 
a problem because if we do not figure that out, then it is 
going to be very hard--I mean, who is going to produce that 
programming? The Internet itself cannot produce the program. 
And how do you know that you want to go watch a program on the 
Internet? You know because the demand has been created by the 
dinosaur network.
    Senator Cardin. Is that factored into your negotiations 
today, that economic reality of current technology?
    Mr. Franks. It is why we try so hard to protect our 
windows, it is little things like DMAs. That $4.5 billion 
dinosaur network business, if you will, is what fuels all of 
that program creation and makes it possible for people like Mr. 
Ergen to resell our signal.
    Senator Cardin. Senator Wyden, the gavel is yours.
    Senator Wyden [presiding.] Thank you, Mr. Chairman, and I 
want to apologize to all of our guests. We had a very long 
hearing in the Finance Committee, and I am coming in late, and 
I am going to try not to plow over too much that people have 
already pummeled.
    My concern is born out of what I hear at home, and what I 
hear at home is tens of thousands of Oregonians get up every 
day to see their television broadcast--television that is 
important--coming from somewhere else and coming largely with 
news that they do not have a great interest in. It might be 
Washington, it might be Idaho, but it certainly is not Oregon. 
And I have been pushing for a great many years--I was also on 
the Commerce Committee. My spouse said the other day, ``Dear, 
what Committee are you not on? '' And now that I have picked up 
this Judiciary Committee assignment, I come to the Satellite 
Home Viewer Act with a perspective from a judicial outlook.
    From my vantage point, it is hard to see how just putting 
Band-aids on this issue, the question of reforming the 
Satellite Home Viewer Act, is going to really address the 
concern. You need to create what is, in effect, a bright-line 
fix that cannot involve manipulation and ensures that people 
can get broadcasts that they really care about, that represent 
the concerns and interests that they aspire to hear about on a 
daily kind of basis. So I think what I would like to do for a 
few minutes is touch on these issues.
    Mr. Ergen, you have had strong views on these topics for a 
lot of years, and let me start by getting your view with 
respect to the importance of these kinds of concerns--in-State 
news, weather, emergency notices. You have been in this 
business a long time. What is your sense about how people look 
at this?
    Mr. Ergen. I am 100 percent confident how they look at it. 
They look at it in the State of Oregon that they want to see 
the news, weather, and sports of Oregon. And these randomly 
drawn lines on a map 50 or 60 or 70 years ago by a Nielsen 
company who does not even want to take ownership for these 
lines today in today's digital world do not make sense.
    Mr. Yager earlier said that the consumer voted on these 
lines. I know of not one consumer who has ever voted in Oregon 
to watch Washington when it could watch Oregon. The technology 
exists, both through cable and satellite, for the people of 
Oregon to be able to watch channels in Oregon.
    Senator Wyden. And so your argument is that these rules are 
simply outdated. I mean, talk about health reform, something 
you and I have talked about, there you are dealing with the 
1940s, a day when people stayed somewhere at the workplace 20, 
25 years until you gave them a gold watch and a big steak 
dinner. And we are talking about reforming the health system to 
modernize these health rules. And you are talking about, I 
think, much the same thing as it relates to the Satellite Home 
Viewer Act.
    Mr. Ergen. Again, I do not want to live in the horse-and-
buggy age. I think that the Internet and satellite technology, 
along with digital cable, these are fantastic technologies that 
are able to now deliver consumers what they want to watch, 
where they wanted to watch it, and only the incumbent 
generations of people who do not want competition, you missed--
you know, earlier in the panel everybody said things are too 
complicated, we do not want to change anything. Well, nobody 
wants to change anything when they make good money and do not 
have competition. Of course, you do not want to change.
    But as you know, the consumer is saying you should change 
because the technology does allow us. We can watch it on our 
phone. We can watch it on our computer. Why can't we watch it 
on our TV?
    Senator Wyden. Now, how would an adjacent DMA fix, which is 
largely the concept that is being discussed here, that allows 
all satellite providers to offer State-specific stations to 
their customers solve these problems? What are the implications 
of an adjacent DMA fix? I guess that would be the way to 
characterize it.
    Mr. Ergen. Well, it is a very simple fix for consumers. It 
just allows you to bring in the adjacent DMA along with the 
local DMA. I think you should be required to do the local DMA. 
I do think--and we do not have a representative from sports 
leagues here or other copyright holders, and I do not want to 
speak for them. I think that they would have to renegotiate 
their contracts around what I call ``expanded local,'' which is 
to expand the definition of local to include your current local 
DMA and an adjacent DMA. That would solve the in-State problem 
where the 45 States import signals--I mean, from different 
States than their own State. That would solve that problem and 
give customers a choice. We can protect the local broadcaster 
by requiring the local broadcasts to be broadcast as well.
    Mr. Franks. Senator Wyden, may I jump in?
    Senator Wyden. Yes. Go ahead, Mr. Franks, and we are going 
to have some questions for you, too.
    Mr. Franks. I look forward to them, as always.
    With regard to the local news problem, there is nothing in 
today's law or regulation that prevents a cable operator or a 
satellite operator in the State of Oregon from providing that 
local news. The local station controls that copyright, and so 
there is no reason right now that your constituents could not 
be delivered the in-State local news product that you want. 
There is no impediment in the law or regulation to doing that 
now.
    Senator Wyden. Mr. Ergen.
    Mr. Ergen. I do not believe that is true. I have tried--I 
have met with Gannett Broadcasting, and I have tried to bring 
in the local news. I even talked about doing regional concepts. 
Ultimately what they said was--and this is an NBC affiliate so 
I do not want to speak for Mr. Franks, who is CBS. They said, 
well, we own the copyright to our local news, but we do not own 
the copyright to the national news, and our local news feeds 
are interlaced with national stories. So when President Obama 
was talking last night, that is a national story that national 
NBC owns the copyright. The local broadcaster did not have the 
right to give that news to me.
    Second, the consumer is interested in more than just news. 
He is interested in sports. So March Madness comes up, in 
Oregon they may want to watch the University of Oregon. They 
may not want to watch Gonzaga, which is what may be shown by 
the CBS affiliate that comes from Yakima or Spokane into 
Oregon.
    So it is a broader issue than that, and, look, it is a 
question of do we want to be on the side of consumers or do we 
want to be on the side of special interests that I represent 
and other people at this panel represent? And that is a choice 
that this Congress has to make.
    Senator Wyden. Mr. Franks I think is champing at the bit to 
say some more.
    Mr. Franks. I just do not quite understand how I am 
representing the special interests here. If there is a problem 
in Oregon that involves the CBS Television Network and a local 
CBS affiliate in providing local news product to your 
constituents, I would be happy to start working on it this 
afternoon, because it is not a problem.
    Senator Wyden. That may be what it comes to--under Chairman 
Leahy's auspices sending you all out to do some negotiating so 
that we get this resolved, because this has gone on for too 
long.
    As I look at this question, adjacent DMA, nobody is talking 
about doing this everywhere on the planet, only where there is 
not otherwise available State-specific affiliate broadcasting. 
So we may have to send good people like Mr. Franks and Mr. 
Ergen out to have their own kind of negotiation and put this 
together, because it is time to get this done.
    Mr. Franks. Well, I doubt that your constituents really 
care where they get their ``CSI.'' Part of what Mr. Ergen is 
also trying to do is to be able to import ``CSI'' into that 
market, and then we do begin to have a problem because then you 
are undermining the local station. But to the extent that this 
is about news, it is not a problem--it is a problem, I 
understand, but the solution to the problem exists right now.
    Senator Wyden. Do you want to bat this around some more, 
Mr. Ergen?
    Mr. Ergen. Well, I am pleased to hear Mr. Franks say CBS 
would give us the rights to the--would give their national 
rights to their affiliates----
    Mr. Franks. I did not say I would give them to you, but I 
would give them to our local affiliates.
    [Laughter.]
    Mr. Ergen. That is right, local affiliates in--I think Mr. 
Yager wanted to jump in here because I did not want to----
    Senator Wyden. We are teeing you up, Mr. Yager.
    Mr. Yager. Okay. Number one, our company would be happy--we 
have never been asked to give the rights to any of our 
newscasts, special programming to--by any satellite or cable 
company. I can say without question here I would be more than 
willing to work with our NBC, FOX, and ABC affiliates to get 
the rights to carry their news. Mr. Franks said we could always 
do that, so our CBS affiliates are available to Mr. Ergen to 
State lines at any time he wants as of this hearing.
    That is what is in the law, and we want to abide by the 
law. I was not aware that other affiliates might be using the 
network news angle and saying we do not have the copyrights. I 
think that is a simple problem to work out.
    Senator Wyden. That is promising.
    Mr. Ergen. I think that is great. I think that is great, 
and I am glad to hear that CBS will take the lead, and 
hopefully they can convince some of their other constituents or 
the other networks to do something similar. And I think Mr. 
Yager made a kind offer as well, and I think that would be an 
important step.
    Senator Wyden. That is real progress. You can take the rest 
of the day off.
    [Laughter.]
    Senator Wyden. Listen, can I ask you one----
    Mr. Franks. But I do think it is significant, Senator, that 
no one has ever asked him. How long have you been in the 
business, Jim?
    Mr. Yager. You do not want to know. I should be at Senator 
Kohl's hearing----
    Senator Wyden. I guess I just did, so----
    Mr. Franks. No, but I mean that no satellite or cable 
operator has ever asked. So, I mean, if there is this pressing 
need and this urgent desire to meet the needs of customers and 
constituents, in some ways we are hearing about it relatively 
late in the game.
    Senator Wyden. I am going to quit while I am ahead. I think 
we are on our way to making some progress.
    Just one other question for you, Mr. Yager. When our 
country switches over to digital on the 12th of June, obviously 
broadcast and TV changes dramatically. Folks in rural areas 
like rural Oregon who used to make do with a weak signal and a 
little snow on their TV screens are going to end up sometimes 
with no picture, no sound at all, unless the local broadcaster 
takes step to improve signal strength and coverage.
    What is being done on this point to make the necessary 
investments so that these communities get the kind of quality 
service they deserve?
    Mr. Yager. Well, I think most responsible local 
broadcasters are taking steps to, if they have had a side-
mounted digital antenna--and I think that is what you are 
referring to, where the digital signal might not be totally at 
this point in time replicating the analog signal in a given 
market, that can well be because of the power kind of being 
deficient to what they are going to have on analog or because 
they have got a side-mounted antenna.
    I can only speak for my company. We intend to fully 
replicate the analog signal, and the beauty of that is that 
when you replicate the analog signal, it is not a snowy 
picture. It will be a picture that that viewer can see without 
distortion.
    Senator Wyden. And for you, Mr. Cohen and Mr. Hartwell, we 
have largely spared you the grilling here today. Would you all 
like to add anything? In fact, what is really timely about 
this, and the comments of Mr. Franks, Mr. Yager, and Mr. Ergen, 
is that I think it is fair to say that the administration, the 
Obama administration, with all they have had on their plate, 
has not exactly laid out all of their goals for Satellite Home 
Viewer reauthorization, and I think it is helpful to have been 
able to have the three of you respond to some questions because 
I think it suggests that there may be more of a consensus here 
than people thought. And I want to give Mr. Cohen and Mr. 
Hartwell a chance, in effect, to make any comments they want, 
and we will wrap this up.
    Mr. Cohen, anything you want to add?
    Mr. Cohen. Senator, I think all I would say is that 
although I will plead guilty to being one of the folks on the 
panel who said that the adjacent DMA issue was complicated, 
what I also said was I think that there is dialog that can 
occur. We have found some fixes around this problem, for 
example, in--we, Comcast, and so I have some familiarity with 
it--in southern Vermont, and it does not help Senator 
Hartwell's constituents who are living in the most rural areas 
of southern Vermont where cable just cannot economically 
extend.
    We do currently carry WCAX, which is the CBS affiliate in 
Burlington. We bring that in as a distant signal under the 
compulsory copyright license. It happens to be the network 
affiliate, I am told, that has the most local news and the most 
local coverage. And it has been a way for us to satisfy or at 
least largely satisfy our customers in southern Vermont who 
were complaining to us, as well as to Senator Hartwell and 
Senator Leahy, about the absence of local news and local news 
content in southern Vermont.
    So we are prepared, we as an industry are prepared to sit 
at the table, to be at the table, to look whether there are 
business solutions or legal solutions to these issues, and we 
are happy to be a partner in trying to help resolve those.
    Senator Wyden. Mr. Hartwell, anything you want to add?
    Mr. Hartwell. Yes, thank you, Senator Wyden. I appreciate 
your introductory remarks. They go right to the point that the 
issue that is bothering many Oregonians is the same issue that 
is bothering many Vermonters. I look forward to what would be a 
novelty in my case, to turn on the television set in my home in 
Dorset, Vermont, and see the Burlington, Vermont, television. 
And we do not do that. We do not see that. But that is what we 
want.
    Senator Wyden. Well, I appreciate the panel. The fact of 
the matter is if you have these States--and Vermont and Oregon 
are particularly concerned. We have got large swaths of our 
State that simply are not able to watch news and information 
that we feel strongly about because their ``market area'' is 
somewhere else. And I think we have been able to make some 
progress today in terms of our witnesses looking at some ways 
to bridge the differences. So this has been constructive.
    Again, I apologize to our panel for coming in late and 
having to try to pick up on some of the earlier comments. But I 
like the tone of the outcome and where we are headed, and we 
will look forward to following up under the leadership of 
Chairman Leahy and Senator Specter.
    With that, we are adjourned.
    [Whereupon, at 11:40 a.m., the Committee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]

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