Let's take a look at each of these provisions.
The most controversial aspect of this bill is definitely the first provision: to rate games based upon playing the entire game. Currently, a publisher puts together a video package of its game and must disclose all objectionable content. It then submits the package to the ESRB to rate. The ESRB reviews the video and makes its determination. In order to even get a rating (which is required to sell the game in the vast majority of stores), the video package must be representative of the game, showing its worst parts. If the ESRB finds that there is content that was not represented during the rating process, they can fine the publisher and/or force the publisher to re-rate the game or pull the game entirely.
Stearns' bill would force the ESRB reviewers to play through the entire game. With many games coming in at 40-60 hours of gameplay, and many more that are simply open-ended and therefore, never-ending, this would put a huge strain on the ESRB. In fact, I don't think that the ESRB could function under this system, which makes me think that Stearns' real goal is to take game ratings out of the hands of the non-governmental ESRB and make ratings the responsibility of the government, a scary thought, but more on that later.
This issue of playing the entire game came up in a House Subcommittee hearing back in June. Patricia Vance, President of the ESRB, was grilled on the subject and calmly explained that reviewing a game based upon playing it in its entirety is simply untenable and unnecessary. She also mentioned that the ESRB, due to the Hot Coffee mod situation, can now fine publishers up to $1 million if they don't, "disclose all of a game's objectionable content during the ratings process" (Gamespot).
The ESRB has a lot of teeth to keep publishers in check. And, based on the thousands of games they've rated over the years, the fact that only two have been re-rated ('GTA: San Andreas' and more recently, 'Elder Scrolls IV: Oblivion') is quite a successful track record. Going further, due to the two re-ratings, publishers know that the ESRB is being extra vigilant when rating games.
Moving on to the second provision, prohibiting a publisher/developer from hiding content, well, that can just be called the 'Hot Coffee' provision. When Rockstar and Take2 finally admitted that there was "hidden content" in the game that allowed for a little sexy action, the video game world was shocked and politicians had a field day. Everybody from Hillary Clinton and Joe Lieberman to a rash of state legislatures seized the opportunity to look tough on a "family values" issue; which they framed as "violent games in the hands of kids". Keep in mind, the sexy scene was unlockable only on the PC version of the game and you had to download the mod to unlock it.
Due to this mod, the ESRB forced Take2 to re-rate the game as AO (Adult Only). Take2 did so, and then made a new version of the game without that content in order to get the game back on the shelves as an "M" rated game.
Essentially, publishers are currently prohibited from hiding content during the ratings process. The bill would simply make it law, and I'm assuming there could be criminal penalties, which would basically mean fines, which is part of the current punishment for violations.
The third provision simply states that the person/entity rating the game (the ESRB) can't grossly mischaracterize the content of a game. An example of this would be saying that a game like 'GTA' has "mild violence and language" when it really has "excessive violence and obscene language".
The fourth provision asks that the investigative/study arm of Congress, the GAO, open a study to determine the effectiveness of the ESRB ratings system, whether that system should be peer reviewed, whether an independent ratings system would be more accurate, the prevalance of marketing to age groups under the ratings of those games, and the efficacy of a universal ratings system for movies, games, TV, and other visual media (something that also came up at the Subcommitte hearing back in June).
The question that I would really like to ask Rep. Stearns is, "What is your goal with this bill?" The GAO study is obviously an attempt to undermine the ESRB. I say this because at the hearing in June, Stearns was very critical of the ESRB. Stearns is hoping that the study will reach his predetermined conclusion that the government should be rating all visual media with a universal rating system.
I'd remind Rep. Stearns the the government isn't in the business of rating content, aka, determining taste. It's up to parents to decide what games are appropriate for their kids. If the government wants to help then they can do so by educating parents with PSAs in the strain of the V-Chip or content ratings for TV shows.