[Federal Register Volume 61, Number 109 (Wednesday, June 5, 1996)]
[Rules and Regulations]
[Pages 28698-28718]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14238]
[[Page 28697]]
_______________________________________________________________________
Part V
Federal Communications Commission
_______________________________________________________________________
47 CFR Part 76
Open Video Systems; Final Rule
Federal Register / Vol. 61, No. 109 / Wednesday, June 5, 1996 / Rules
and Regulations
[[Page 28698]]
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 96-46; FCC 96-249]
Open Video Systems
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Second Report and Order describes rules and policies
concerning open video systems. The Second Report and Order amends our
regulations to reflect the provisions regarding open video systems in
the Telecommunications Act of 1996 (the ``1996 Act''). The Second
Report and Order fulfills Congress' mandate in adopting the 1996 Act
and will provide guidance to open video system operators, video
programming providers, and consumers concerning open video systems.
DATES: Effective date: July 5, 1996, except for Sec. 76.1502 which is
not effective until approval by OMB of the new information
requirements. The Commission will publish a document at a later date
notifying the public as to the effective date of Sec. 76.1502.
Written comments by the public on the proposed and/or modified
information collections are due on or before July 5, 1996. Written
comments must be submitted by the Office of Management and Budget (OMB)
on the proposed and/or modified information collections on or before 60
days after publication of the Second Report and Order in theFederal
Register.
ADDRESSES: A copy of any comments on the information collections
contained herein should be submitted to Dorothy Conway, Federal
Communications Commission, Room 234, 1919 M Street, N.W., Washington,
D.C. 20554, or via the Internet to dconway@fcc.gov, and to Timothy
Fain, OMB Desk Officer, 10236 NEOB, 725-17th Street, N.W., Washington,
D.C., 20503 or via the Internet to fain__t@al.eop.gov.
FOR FURTHER INFORMATION, CONTACT: Rick Chessen, Cable Services Bureau,
(202) 418-7200. For additional information concerning the information
collections contained herein, contact Dorothy Conway at 202-418-0217,
or via the Internet at dconway@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order in CS Docket No. 96-46, FCC No. 96-249, adopted May
31, 1996 and released June 3, 1996. The full text of this decision is
available for inspection and copying during normal business hours in
the FCC Reference Center (room 239), 1919 M Street, NW, Washington,
D.C. 20554, and may be purchased from the Commission's copy contractor,
International Transcription Service, (202) 857-3800, 1919 M Street, NW,
Washington, D.C. 20554.
The Second Report and Order contains proposed and/or modified
information collections. It has been submitted to the OMB for review,
as required by the Paperwork Reduction Act of 1995. The Commission, as
part of its continuing effort to reduce paperwork burdens, invites the
general public and OMB to comment on the information collections
contained in the Second Report and Order. Comments should address: (a)
whether the proposed collections of information are necessary to the
proper performance of the functions of the Commission, including
whether the information shall have practical utility; (b) the accuracy
of the Commission's burden estimates; (c) ways to enhance the quality,
utility, and clarity of the information collected; and (d) ways to
minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology.
OMB Approval Number:3060-0700.
Title:Implementation of Section 302 of the Telecommunications Act
of 1996; Open Video Systems.
Type of Review:Revision of a currently approved collection.
Respondents:640. (10 OVS operators, 250 video programming providers
that may request additional Notice of Intent information, file rate
complaints, or initiate dispute cases, 60 broadcast stations that may
elect type of carriage or make network non-duplication notifications,
300 must-carry list requesters, 20 oppositions to OVS operator
certifications.)
Number of Responses:3750. (10 Notices of Intent, 250 requests for
additional Notice of Intent information, 250 responses to requests for
additional Notice of Intent information, 50 rate complaints, 50 rate
justifications, 60 carriage elections, 10 must-carry recordkeepers, 300
must-carry list requests, 300 provisions of must-carry lists, 1200
notifications of network non-duplication rights to OVS operators, 1200
OVS operator notifications of network non-duplication rights to
programming providers, 10 certifications of compliance, 20 oppositions
to certifications of compliance, 20 dispute case complainants, and 20
dispute case defendants.)
Estimated Burden to Respondents: Notice of Intent requirements: 10
prospective OVS operators are estimated to be in existence within the
next year. Average number of entities that prospective OVS operators
must notify with each Notice of Intent: 45. Average burden to each OVS
operator to complete a Notice of Intent and to provide copies to all
applicable entities: 8 hours apiece; therefore 10 x 8 = 80 hours.
Estimated number of written requests for additional information that
will be received subsequent to Notices of Intent: 25 per Notice of
Intent x 10 Notices = 250. Average burden to prospective video
programming providers to make each written request: 2 hours apiece;
therefore 10 x 25 x 2 = 500 hours. Average burden to each OVS
operator to provide the additional information to all prospective video
programming providers: 8 hours apiece; therefore 10 x 8 = 80 hours.
Total burden for all respondents = 80 + 500 + 80 = 660 hours. Rate
Justification requirements: Estimated number of rate complaints that
video programming providers will file: 5 per OVS operator; therefore 10
x 5 = 50. Estimated number of rate justifications filed by OVS
operators in response to rate complaints: 50. Burden to video
programming providers for filing complaints: 1 hour per complaint;
therefore 50 x 1 = 50 hours. Burden to OVS operators for filing rate
justifications: 20 hours per justification; therefore 10 x 5 x 20 =
1,000 hours. Total burden for all respondents: 50 + 1,000 = 1050 hours.
Must-Carry and Retransmission Consent requirements: Number of OVS
operators: 10. Average number of broadcast stations in each OVS
operator's area of carriage: 6. Average burden to broadcast stations
for each election for must-carry or retransmission consent: 2 hours per
election; therefore 10 x 6 x 2 hours = 120 hours. Annual
recordkeeping burden for OVS operators to maintain list of its
broadcast stations carried in fulfillment of must-carry requirements: 4
hours per OVS operator; therefore 10 x 4 = 40 hours. Estimated annual
number of written requests received by OVS operators: 30 per OVS
operator; therefore 10 x 30 = 300. Burden for completing written
requests: .25 hours per request; therefore 10 x 30 x .25 = 75
hours. Burden to OVS operators to respond to requests: .25 hours per
request; therefore 10 x 30 x .25 = 75 hours. Total burden for all
respondents: 120 + 40 + 75 + 75 = 310 hours.
Sports Exclusivity, Network Non-Duplication and Syndicated
Exclusivity requirements: Estimated number of occurrences where
television broadcast stations must notify OVS operators of exclusive or
non-duplication rights
[[Page 28699]]
being exercised: 6 stations in each OVS operator's area of carriage x
20 annual notifications x 10 OVS operators = 1200. Burden to
television stations to make notifications: .5 hours per notification;
therefore 12400 x .5 = 600 hours. Burden for each OVS operator to
make notifications available to all programming providers on their
systems: 1 hour per notification x 1200 occurrences = 1200 hours.
Total burden for all respondents: 600 + 1200 = 1800 hours.
Certification Process requirements: Annual burden to OVS operators
to complete certifications: 1 hour apiece; therefore 10 x 1= 10
hours. Number of oppositions estimated to be filed with the Commission:
2 per certification; therefore 2 x 10 = 20. Average burden for
completing oppositions: 4 hours per opposition; therefore 20 x 4 = 80
hours. Total burden for all respondents: 10 + 80 = 90 hours.
Dispute Resolution requirements: Estimated number of notices filed
by complainant: 20. Estimated number of defendants' responses to
notices filed: 20. Average burden for each notice and response to
notice: 4 hours apiece; therefore 40 x 4 = 160 hours. We estimate
that the 20 notices will result in the initiation of 10 dispute cases.
The average burden for complainants and defendants for undergoing all
aspects of the dispute case: 25 hours per case; therefore 20 (10
complainants + 10 defendants) x 25 = 500 hours. Total burden to all
respondents: 160 + 500 = 660 hours.
Total Annual Burden to Respondents: 4570 hours. (660 + 1050 + 310 +
18600 + 90 + 660)
Estimated Cost to Respondents: Notices of Intent costs of
stationery and postage at $2 apiece for (10 Notices of Intent x 45
entities) + 250 requests for additional information + 250 responses to
requests for additional information = $1900.
Rate Justifications costs of stationery and postage at $2 apiece
for 50 rate complaints + 50 rate justifications = $200.
Must-Carry and Retransmission Consent costs of stationery and
postage at $2 apiece for 60 carriage elections + 300 requests for lists
+ 300 provisions of lists = $1320.
Sports Exclusivity, Network Non-Duplication and Syndicated
Exclusivity costs of stationery and postage at $2 apiece for 1200
notifications to OVS operators + 1200 OVS operator notifications to
programming providers = $4800.
Certification Process costs of stationery, diskettes, and postage
at $5 for 10 certifications = $50. Costs of stationery and postage at
$2 apiece for 20 opposition filings = $40. $50 + $40 = $90.
Dispute Resolutions costs of stationery and postage at $2 apiece
for 20 notices + 20 responses to notices = $80. Costs of stationery and
postage at $10 apiece for 10 complainants in dispute cases + 10
defendants in dispute cases = $200. $80 + $200 = $280.
Total Estimated Costs to Respondents: $8590. ($1900 + $200 + $1320
+ $4800 + $90 + $280).
Needs and Uses: The information collections contained herein are
necessary to implement the statutory provisions for Open Video Systems
contained in the Telecommunications Act of 1996.
Second Report and Order--Open Video Systems
1. New Section 653 of the Communications Act establishes a new
framework for entry into the video programming delivery marketplace--
the ``open video system.'' See Sections 651 and 653 of the
Communications Act of 1934, 47 U.S.C. Sec. 151 (``Communications
Act''). As designed by Congress, the open video framework provides an
option, particularly to a local exchange carrier, for the distribution
of video programming other than as a ``cable system'' governed by all
of the provisions of Title VI of the Communications Act. If a telephone
company agrees to comply with certain non-discrimination and other
requirements it can be certified as an operator of an ``open video
system'' and subjected to streamlined regulation under Title VI.
2. In establishing this structure, we believe that Congress
intended to advance competition in two areas of the video marketplace.
First, Congress sought to encourage telephone companies to enter the
video programming distribution market and to deploy open video systems
in order to ``introduce vigorous competition in entertainment and
information markets'' by providing a competitive alternative to the
incumbent cable operator. Telecommunications Act of 1996 Conference
Report, S. Rep. 104-230 at 178 (February 1, 1996) (``Conference
Report''). The incentive provided by Congress to encourage such entry
was not only exemption from particular requirements of Title VI, but
that streamlined Title VI obligations would apply in lieu of, and not
in addition to, any requirements under Title II. Second, by requiring
open video system operators to provide carriage opportunities for video
programming providers on terms that are just and reasonable, and not
unjustly or unreasonably discriminatory, Congress sought to foster
competition by encouraging multiple programming sources on open video
systems.
3. The open video system model can provide the competitive benefits
that Congress hoped to achieve: market entry by new providers, enhanced
competition, streamlined regulation, investment in infrastructure and
technology, diversity of programming choices and increased consumer
choice. We believe that the best way to achieve Congress' goals is to
give open video system operators the flexibility to enter and compete
based on the demands of the marketplace. Our approach reflects the
reduced regulatory burdens clearly envisioned by Congress for open
video systems. Where necessary, the Commission has provided a level of
guidance to parties in order to comply with Congress' particular
directives under Section 653 and to give certainty to the parties.
4. On March 11, 1996, the Commission released a Report and Order
and Notice of Proposed Rulemaking, seeking comment on how to implement
the requirements of Section 653. See Report and Order and Notice of
Proposed Rulemaking in CS Docket No. 96-46 and CC Docket No. 87-266
(terminated), released March 11, 1996, 61 FR 10496 (March 14, 1996)
(the ``NPRM''). We received 61comments and 79 replies in response to
the NPRM. After consideration of the comments and reply comments, we
hereby adopt the Second Report and Order herein.
A. Qualifications To Be an Open Video System Operator
5. We conclude that Section 653(a)(1) authorizes the Commission to
allow non-local exchange (``non-LECs'') to operate open video systems,
and to allow LECs to operate open video systems outside of their
telephone service areas, when the public interest, convenience, and
necessity are served. We further conclude that it would serve the
public interest, convenience and necessity to permit: (1) non-LECs that
are not cable operators; (2) LECs outside of their telephone service
areas; and (3) cable operators outside of their cable franchise areas,
to own or operate open video systems. With respect to cable operators
within their cable franchise areas, we conclude that it would serve the
public interest, convenience, and necessity to allow a cable operator
to operate an open video system in its cable franchise area if it is
subject to ``effective competition'' in its cable franchise area under
Section 623(l)(1) of the Communications Act, 47 U.S.C.
[[Page 28700]]
Sec. 543(l)(1). This condition shall apply even if a cable operator
also provides local exchange services within its cable franchise area.
In certain circumstances, particularly where the entry of a facilities-
based competitor into a market served by an incumbent cable operator
would likely be infeasible, we believe that it would be consistent with
the public interest to allow the incumbent cable operator to convert
its cable system to an open video system even if it is not subject to
``effective competition'' in its cable franchise area under Section
623(l)(1) of the Communications Act, 47 U.S.C. Sec. 543(l)(1). We will
consider petitions from cable operators seeking such a public interest
finding. Our decision to allow cable operators to become open video
system operators under these circumstances shall not be construed to
affect the terms of any existing franchising agreements or other
contractual agreements.
B. Certification Process
6. In light of the brief period (ten days) allowed for Commission
review of certification filings, we conclude that Congress intended the
certification process to be streamlined. We will require that
certifications be verified by an officer or director of the applicant,
stating that, to the best of his or her information and belief, the
representations made therein are accurate. The certification must
contain particular facts and representations about the system,
including: (1) the applicant's name, address and telephone number; (2)
a statement of ownership, including all affiliated entities; (3) if the
applicant is a cable operator applying for certification within its
cable franchise area, a statement that the applicant is qualified to
operate an open video system under Section 76.1501 of the Commission's
rules; (4) a statement that the applicant agrees to comply and to
remain in compliance with each of the Commission's regulations under
Section 653(b); (5) if the applicant is required under 47 CFR
Sec. 64.903(a) to file a cost allocation manual, a statement that the
applicant will file changes to its manual at least 60 days prior to
commencement of service; (6) a general description of the anticipated
communities or areas to be served upon completion of the system; (7)
the anticipated amount and type (i.e., analog or digital) of capacity
(for switched digital systems, the anticipated number of available
channel input ports); and (8) a statement that the applicant will
comply with the Commission's notice and enrollment requirements for
unaffiliated video programming providers. Applicants will be required
to file for certification using FCC Form 1275 (OMB approval pending).
7. Open video system operators may apply for certification at any
point prior to the commencement of service, subject to conditions. If
construction of new physical plant is required, the applicant must
obtain Commission approval of its certification prior to the
commencement of construction. If no new construction is required,
Commission approval of certification may be obtained at any point prior
to the commencement of service that would allow the applicant
sufficient time to comply with the Commission's notification
requirements herein.
8. We will consider comments or oppositions to a certification that
are filed within five days of the Commission's receipt of the
certification. Disapproval of a certification will not preclude the
applicant from filing a revised certification or from refiling its
original submission with a statement addressing the issues in dispute.
Such refilings must be served on any objecting party or parties. Any
certification filing that the Commission does not disapprove within ten
days will be deemed approved. If the representations contained in a
certification filing prove to be materially false or materially
inaccurate, the Commission retains the authority to revoke an open
video system operator's certification or to impose such other penalties
it deems appropriate, including forfeitures.
C. Carriage of Video Programming Providers
9. We affirm our tentative conclusion that the 1996 Act does not
require that the open video system operator be prohibited from
participating in the allocation of channel capacity. We believe that
the statute and implementing rules will prevent an open video system
operator from discriminating against unaffiliated video programming
providers, notwithstanding the operator's involvement in the allocation
process.
10. These rules and policies are designed to implement Sections
653(b)(1)(A) and 653(b)(1)(B) of the Communications Act. An open video
system operator will file a ``Notice of Intent'' (``Notice'') with the
Commission. The Commission will release the Notice to the public. The
Notice will contain certain information that a video programming
provider reasonably would need in order to assess whether to seek
carriage on the system. The Notice must include: a heading clearly
indicating that the document is a Notice of Intent; the open video
system operator's name, address and telephone number; a description of
the system's projected service area; a description of the system's
projected channel capacity, in terms of analog, digital, and other
type(s) of capacity, upon activation of the system; a description of
the steps a prospective video programming provider must follow to seek
carriage on the system, including the name, address and telephone
number of a person to contact for further information; the starting and
ending dates of the initial enrollment period; and a certification that
the system operator has complied with all relevant notification
requirements under our open video system regulations concerning must-
carry and retransmission consent, including a list of all local
commercial and non-commercial television stations served, and a
certificate of service showing that the Notice of Intent has been
served on all local franchising authorities entitled to establish
requirements under Section 611 of the Communications Act.
11. In addition to the information in the Notice, the open video
system operator will be required to provide within five business days
of receiving a written request from a potential video programming
provider certain information, including: the projected activation date
of the system (if a system is to be activated in stages, an operator
should describe each stage and the projected dates on which each stage
will be activated; a preliminary rate estimate; the information a video
programming provider will be required to provide to qualify as a
commercially bona fide video programming provider; technical
information that is reasonably necessary to prospective video providers
to assess whether to seek capacity on the system; any transmission or
reception equipment needed by a video programming provider to interface
successfully with the open video system; and the equipment available to
facilitate the carriage of unaffiliated video programming and the
electronic forms that will be accepted for processing and subsequent
transmission through the system.
12. The open video system operator may establish terms and
conditions of carriage for video programming providers that are just
and reasonable, and are not unreasonably or unjustly discriminatory.
For instance, an open video system operator may: (1) take reasonable
steps to ensure that a prospective video programming provider's request
for capacity is bona fide; (2) generally exclude an
[[Page 28701]]
incumbent, competing in-region cable operator from obtaining capacity
on its system when such carriage would siginificantly impede
facilities-based competition; (3) require video programming providers
to obtain capacity in increments of no less than one full-time channel,
however, the operator may not require video programming provider to
obtain capacity only in amounts greater than one full-time channel; (4)
preclude unaffiliated video programming providers from selecting the
programming on more capacity than the operator itself and its
affiliates; (5) negotiate co-packaging agreements with unaffiliated
video programming providers; and (6) require assurances that a video
programming provider will deliver video programming over the open video
system within some reasonable time after the system is activated.
13. At the conclusion of the open enrollment or notice period, the
open video system operator will determine whether demand for carriage,
including its own demand, exceeds the system's channel capacity. For
this purpose, analog and digital capacity must be treated separately.
Specifically, if the system contains both analog and digital capacity,
the open video system operator must separately assess whether analog
demand exceeds analog capacity and whether digital demand exceeds
digital capacity. Analog capacity shall be measured in 6 MHz channel
increments, and digital capacity shall be measured in bandwidth.
14. Further, we anticipate that concerns regarding the methods for
soliciting carriage demand and allocating system capacity will be
alleviated with capacity significantly higher than carriage demand.
Therefore, when an open video system operator can demonstrate that, due
to technology, the system's capacity is plentiful as compared to
demand, we will consider waiving the rules adopted in this Order.
15. If demand for carriage does not exceed system capacity, the
open video system operator may fill all video programming providers'
demands for capacity, including its own. If demand for carriage exceeds
capacity, the open video system operator may select the programming
services on no more than one-third of the system's activated channel
capacity. Public, educational, and governmental (``PEG'') and must-
carry channels carried pursuant to Sections 611, 614 and 615 of the
Communications Act will count in the system's total activated channel
capacity for purposes of calculating the operator's one-third limit,
but will not count against the operator's one-third limit. Channels
carrying ``shared'' programming will count against the operator's one-
third limit on a pro-rata basis, e.g., if the operator shares the
channel with one other video programming provider, it will count as
half of a channel against the operator's limit. The remaining two-
thirds of capacity, other than PEG and must-carry channels, must be
allocated to unaffiliated video programming providers on an open, fair,
non-discriminatory basis. The Commission does not require a specific
allocation methodology.
16. After service commencement, an open video system operator will
be required to allocate open capacity, if any is available, at least
every three years beginning three years after the system is activated,
through an open, fair, non-discriminatory process. Such open capacity
will include capacity that becomes available during the year, e.g., due
to a system upgrade or the expiration of carriage contracts, and any
capacity on which the open video system operator is selecting the video
programming beyond one-third of activated channel capacity. Changes in
an operator's PEG and must-carry obligations which cause changes in the
level of available open video system capacity must be accommodated in
accordance with the rules adopted in this Order. An operator must keep
a list of qualified video programming providers that have sought
carriage or additional carriage during the previous three year period.
17. In addition, we find that channel positioning is an important
part of allocating channel capacity to video programming providers, and
therefore will require an open video system operator to assign channel
positions in a non-discriminatory manner. We also find that, given
Section 653(b)(1)(A)'s specific exemption of must-carry and PEG from
its general non-discrimination requirements, an open video system
operator must comply with the channel positioning requirements
contained in those rules. Finally, we find that the statute leaves to
an open video system operator's discretion whether to create shared
channels for some or all of the duplicative programming on its system.
However, we disagree with telephone companies who argue that the
statutory reference to ``any video programming service'' means that an
open video system operator may select--in advance of any actual
duplication--which program services to place on shared channels. We
also note that certain cable operators and programmers argue that the
placement of a program service on a shared channel must be conditioned
on the approval of the program service. We take this to mean simply
that each video programming provider using the shared channel has
reached its own agreement with the programming service. We also find
that the statutory provision requiring subscribers have ``ready and
immediate'' access to programming carried on shared channels means that
channel sharing must be transparent to subscribers.
18. An open video system operator may not discriminate among video
programming providers with respect to technology or technical
information necessary to access the system.
D. Rates, Terms, and Conditions of Service
19. We will accord a strong presumption that carriage rates are
just and reasonable for open video system operators where at least one
unaffiliated video programming provider, or unaffiliated programming
providers as a group, occupy capacity equal to the lesser of one-third
of capacity or that occupied by the open video system operator and its
affiliates, and where any rate complained of is no higher than the
average of the rates paid by unaffiliated programmers receiving
carriage from the open video system operator.
20. We adopt our tentative conclusion that some level of rate
differentiation is permissible, provided that the bases for the
differences are not unjust or unreasonable. We therefore agree with
those commenters that argue that open video system operators should be
given flexibility to offer different carriage rates.
21. We conclude that it is unnecessary and undesirable to require
open video system operators to disclose publicly its carriage
contracts. In general, we agree with those telephone companies that
argue that making carriage contracts public would stifle competition by
forcing them to divulge sensitive information. In order to protect
video programming providers from discriminatory conduct, we will
require all open video system operators to make preliminary rate
estimates available to potential video programming providers. If,
however, a complaint is filed, regardless of which party bears the
burden of proof, the open video system operator's contracts with video
programming providers will be subject to discovery.
[[Page 28702]]
E. Applicability of Title VI Provisions
1. Public, Educational and Governmental Access Channels
22. The first issue we must address with respect to PEG use is how
PEG access obligations should be established for open video systems,
including the extent and amount of channel capacity and other resources
that open video system operators should be required to devote to PEG
use. We conclude that open video system operators should in the first
instance be permitted to negotiate their PEG access obligations with
the relevant local franchising authority. These negotiations may
include the local cable operator if the local franchising authority,
the open video system operator and the cable operator so desire.
23. We are unaware of any cable operator that charges PEG
programmers for access to the PEG channels on its cable system.
Therefore, because the PEG access obligations of open video system
operators are to the extent possible to be no greater or lesser than
those imposed on cable operators, we do not foresee open video system
operators charging PEG programmers for PEG use. We recognize that
certain costs will be associated with providing PEG channels. These
costs may be recovered as an element of the carriage rate.
24. Although we believe that negotiation is the best way to
establish the appropriate PEG access obligations for each open video
system operator, we recognize that the parties may be unable to reach
agreement. We therefore believe it is necessary to have a default
mechanism for establishing PEG access obligations. If the open video
system operator and the local franchising authority are unable to come
to an agreement, we will require the open video system operator to
satisfy the same PEG access obligations as the local cable operator. We
believe this can be accomplished by connection to the cable operator's
PEG access channel feeds and by sharing the costs directly related to
supporting PEG access, including costs of PEG equipment and facilities,
and equipment necessary to achieve the connection. We also determine
that, under these circumstances, in order to comply with the statutory
directive that to the extent possible the obligations be no greater or
lesser than those imposed on cable operators, the open video system
operator must provide the same amount of channel capacity for PEG
access as the local cable operator is required to provide.
25. If an open video system operator builds an institutional
network, the local franchising authority may require that educational
and govermental access channels be designated on that network to the
extent such channels are designated on the institutional network of the
local cable operator.
26. In addition, absent an agreement to the contrary, the open
video system operator will be subject to the same rules and procedures
as those imposed on the local cable operator regarding the use of PEG
channels for other programming when such channels are not being used
for PEG.
27. We will require cable operators to permit open video system
operators to connect with their PEG feeds. We will leave how this
connection is accomplished to the discretion of the parties, allowing
them to take into consideration the exact physical and technical
circumstances of the cable and open video systsms involved. If the
cable and open video system operators cannot agree on how this
connection can best be accomplished, the local franchising authority
may decide. In this context, the local franchising authority may
require that the connection take place on government property or on
public rights of way.
28. With regard to cost sharing, the costs of connection and
maintaining PEG facilities and equipment shall be divided equitably
between the cable operator and the open video system operator. This
shall include captial contributions and any other costs or investments
directly relating to or supporting PEG access and required by the cable
operator's franchise agreement. Capital expenses incurred prior to the
open video system operator's connection shall be subject to cost
sharing on a pro rata basis to the extent such investments have not
been fully amortized by the cable operator.
29. Where the open video system operator and the local franchising
authority cannot negotiate an agreement regarding PEG access, and the
open video system operator is instead satisfying its PEG access
obligations by connection and cost sharing with the cable operator's
PEG facilities, the open video system operator's PEG access obligations
should change to the extent that the cable operator's PEG access
obligations change with the franchise renewal. Accordingly, open video
system operators should be prepared to adjust their systems to comply
with new PEG access obligations as necessary. An open video system
operator will not, however, be required to displace other programmers
to accommodate PEG channels until channel capacity becomes available,
whether it be due to increased channel capacity or decreased demand for
channel capacity. Because PEG access channels are expressly exempt from
Section 653(b)(1)(A)'s non-discrimination requirement, an open video
system operator need not and should not wait until the next three-year
reallocation to comply with new PEG access obligations, but should
comply with such obligations whenever additional capacity is or becomes
available.
30. Where there is no local cable operator and the open video
system operator and the local franchising authority cannot agree on
appropriate PEG access obligations, we believe that the open video
system operator should make a reasonable amount of channel capacity
available for PEG access, as well as provide reasonable support of PEG,
services, facilities and equipment. First, the open video system
operator's PEG access obligations shall depend on whether there used to
be a cable franchise agreement in that franchise area. If there was,
the open video system operator shall follow the PEG terms of the
previously existing franchise agreement. Absent a previous cable
franchise agreement, the open video system operator's PEG access
obligations shall be determined by comparison to the franchise
agreement(s) for the nearest operating cable system with a commitment
to provide PEG access.
31. We believe that PEG access channels should be provided to all
subscribers to the open video system. The provision of PEG channels to
all open video system subscribers is important to ensure that the PEG
access obligations imposed on open video system operators are ``no
greater or lesser'' than those imposed on cable operators.
32. We also conclude that open video system operators should be
subject to PEG access requirements for every franchise area with which
its system overlaps. We believe that, despite open video system
operators not being subject to franchise requirements, pursuant to
Section 653(c)(1)(C), it is appropriate to require open video system
operators to comply with these franchise by franchise requirements so
that the obligations imposed on the open video system operator with
respect to PEG access are ``no greater or lesser'' than those imposed
on cable operators, as required by Section 653(c)(2)(A) of the
Communications Act.
2. Must-Carry and Retransmission Consent
33. We find that at this time the public interest will best be
served by application of the cable must-carry and
[[Page 28703]]
retransmission consent rules to open video systems, even though future
system configurations may require modification of our regulations. If
our regulations later become inadequate for open video system
operators, we intend to address promptly the problem. For now, we are
guided by Congress' directive that we impose obligations that are ``no
greater or lesser'' than the obligations currently imposed on cable
operators.
(1) Must-Carry
34. Pursuant to Section 614(b)(7) and 615(h), the operator of a
cable system is required to ensure that signals carried in fulfillment
of the must-carry requirements are provided to every subscriber of the
system. Sections 614 and 615 also generally state the number of must-
carry stations that a cable operator is required to provide. We believe
that in order to apply obligations that are no greater or lesser than
those imposed on cable operators, we must also apply these requirements
to open video system operators. Consequently, we find that the operator
of an open video system must ensure that every subscriber on the open
video system receives all appropriate must-carry channels carried in
accordance with our rules. An open video system operator will be
required to fulfill this obligation regardless of whether or not
individual subscribers on its system subscribe to the open video system
operator's programming package. We do not find it necessary to
prescribe a specific method to be used by an open video system operator
to comply with these requirements, such as a requirement that an open
video system operator must use a basic tier. We recognize that certain
costs will be associated with providing must-carry channels. These
costs may be recovered as an element of the carriage rate.
35. As a related matter, we leave the decision of how to offer any
necessary customer premises equipment to the open video system
operator, including whether the open video system operator will offer
it directly or require video programming providers to provide the
equipment. In addition, an open video system operator will be required
to implement the channel positioning requirements contained in the
must-carry rules in a manner as similar as possible to that of a cable
operator, including, for example, identifying broadcast stations on the
same channels as their over-the-air channel numbers, or on a channel
mutually agreed upon by the station and the operator. Consistent with
the statutory requirement of comparable treatment, open video systems
that span multiple television markets will be subject to the same must-
carry and retransmission consent rules as cable systems that span
multiple markets.
(2) Retransmission Consent
36. We find that our existing retransmission consent rules should
also be applied to the distribution of programming over open video
systems. These rules generally prohibit multichannel video programming
providers from retransmitting the signal of a commercial broadcasting
station without the station's express authority. Our retransmission
consent rules will apply to any video programming provider on an open
video system that provides more than one channel of video programming.
Given the inherent differences between cable systems and open video
systems, we believe that the application of our retransmission consent
rules in this fashion will impose obligations that are no greater or
lesser than those imposed on cable operators. The open video system
operator is charged with the responsibility for assuring that its
system meets the requirements of our must-carry rules. We believe that
it is also appropriate as a matter of administrative efficiency that
open video system operators receive all must-carry/retransmission
consent election statements that broadcast stations are required to
send under our retransmission consent rules. However, open video system
operators will not be responsible for making retransmission consent
arrangements for all programming carried on the system. Once
retransmission consent has been elected, broadcast stations will have
to negotiate agreements with individual video programming providers on
the open video system. Television broadcast stations are not required
to make the same elections for open video systems and cable systems in
the same geographic area.
3. Program Access
37. We believe that four general issues arise in the context of
applying the program access rules to open video systems. The first
concerns the extent to which the program access regime restricts the
activities of open video system operators. The second pertains to how
the program access regime restricts the conduct of open video system
video programming providers. The third issue concerns the extent to
which the benefits of the program access statute and rules apply to
open video system video programming providers. The fourth issue raised
by commenters involves certain expansions of our program access rules.
38. Section 653(c)(1)(A) applies the program access provisions to
open video system operators. Given this statutory language, we conclude
that the program access restrictions shall apply to the conduct of open
video system operators in the same manner as they are currently applied
to cable operators and common carriers or their affiliates that provide
video programming directly to subscribers. Specifically, the conduct of
an open video system operator shall be subject to Section 628(b), which
prohibits unfair methods of competition and unfair or deceptive acts or
practices. In addition, the program access provisions which preclude
certain specific conduct, including undue or improper influence, and
discrimination in prices, terms, or conditions, shall apply to open
video system operators as well. Similarly, the limitations on exclusive
contracts contained in Sections 628(c)(2) (C) and (D) shall apply to
open video system operators so that open video system operators will
generally be restricted from entering into exclusive contracts with
satellite programmers in which an open video system operator has an
attributable interest, but not in which a cable operator has an
attributable interest. Thus, any practice, understanding, arrangement
or activity, including exclusive contracts, between an open video
system operator and a satellite programmer vertically integrated with
an open video system operator that prevents an MVPD from obtaining
satellite programming in an area unserved by a cable operator as of the
date of enactment of the 1992 Cable Act is per se unlawful. Exclusive
contracts between an open video system operator and a satellite
programmer vertically integrated with an open video system operator
which relate to an area served by cable as of the date of enactment of
the 1992 Cable Act are prohibited unless the Commission first
determines that such a contract is in the public interest in accordance
with the factors set forth in Section 628(c)(2)(D). Moreover, Section
628 and or program access rules shall apply to any affiliate
established by an open video system operator to distribute programming
on its system. We also believe it is reasonable to, and will therefore
insert a note in Section 76.1000(h) of our rules indicating that
satellite open video system programming is included within the
definition of satellite cable programming.
39. The programming relationships that are likely to occur with
respect to open video systems raise additional
[[Page 28704]]
program access issues that are not raised by the programming
relationships on cable systems. In the cable context, an agreement to
carry programming is generally between a programmer and a cable
operator. Restricting the activities of cable operators and satellite
programmers vertically integrated with cable operators therefore
addresses Congress' concern over cable operator control over video
programming. In the open video system context, however, there may be
many programmers providing packages of programming directly to
subscribers. An agreement to carry programming may be between a
programmer and an open video system operator or between a programmer
who produces programming and one who will distribute it directly to
subscribers. Moreover, a video programmer may provide its own
programming directly to subscribers by purchasing channel capacity on
an open video system platform.
40. We believe that, in order to effectuate the purposes of the
program access statute in the open video context, open video system
programming providers should be subject to the program access
restrictions to the extent described below. In the open video system
context, a vertically integrated satellite programmer will not be per
se precluded from selling its programming exclusively to one MVPD on an
open video system, as long as that MVPD is not affiliated with the same
type of operator as the vertically integrated satellite programmer.
Similarly, cable operators, common carrriers or their affiliates
providing video programming directly to subscribers and open video
system operators are not generally restricted from entering into
exclusive contracts with non-vertically integrated programmers. We do
not intend to foreclose challenges to exclusive contracts between
vertically integrated satellite programmers and MVPDs, including
unaffiliated MVPDs, on open video systems under Section 628(b) or
Section 628(c)(2)(B), which prohibits, with limited exceptions,
discrimination among competing MVPDs by a vertically integrated
satellite programmer.
41. We believe that the purposes of the program access rules and
statute are served by extending the current program access rules to
apply to exclusive arrangements between satellite programmers in which
a cable operator has an attributable interest and open video system
programming providers in which a cable operator has an attributable
interest. We believe that Section 628(b) authorizes the Commission to
adopt additional rules to accomplish the program access statutory
objectives should additional types of conduct emerge as barriers to
competition and obstacles to the broader distribution of satellite
cable and broadcast programming. We will apply the program access rules
under Section 628 to exclusive contracts between a satellite programmer
in which a cable operator has an attributable interest (``cable-
affiliated satellite programmer'') and an open video system video
programming provider in which a cable operator has an attributable
interest (``cable-affiliated open video system programming provider'').
Specifically, such exclusive contracts will be prohibited unless the
contract pertains to an area served by a cable operator as of the date
of the enactment of the 1992 Cable Act and the Commission first
determines that the exclusive arrangement is in the public interest
under the factors listed in Section 628(c)(4). Two types of cable-
affiliated satellite programmer/cable-affiliated open video system
programming provider relationships will be affected by this restriction
on exclusive contracts. First, this rule will preclude a cable-
affiliated satellite programmer from entering into an exclusive
contract to provide its own programming to a cable-affiliated open
video system programming provider with which the programmer is
affiliated. Second, the new rule will preclude, absent prior Commission
approval, a cable-affiliated satellite programmer from entering into an
exclusive contract to provide its programming to an open video system
programming provider that is affiliated with another cable operator.
42. We believe that subjecting these types of exclusive contracts
to prior Commission review is necessary to fulfill the objectives of
the program access rules in the open video system context. The program
access requirements have at their heart the objective of releasing
programming to existing or potential competitors of traditional cable
systems so that the public may benefit from the development of
competitive distributors. Our primary concern is that exclusive
arrangements among cable-affiliated open video system programmers and
cable-affiliated satellite programmers may serve to impede development
of open video systems as a viable competitor to cable to the extent
that popular programming services are denied to open video system
operators or unaffiliated open video system programmers that seek to
package such programming for distribution to subscribers. In adopting
this rule, we recognize, as did Congress in enacting the program access
provisions, that exclusive contracts can often have pro-competitive
effects under certain market conditions. However, strategic vertical
restraints can also deter entry into markets for the distribution of
multichannel video programming. Accordingly, the Commission's program
access policies seek to balance the likely competitive harm to
consumers created by a particular vertical arrangement against its
likely efficiency benefits. In the context of open video systems,
unless the Commission first determines that exclusive arrangements for
satellite programming which favor cable-affiliated video programming
providers are in the public interest under Section 628(c)(4), the
potential for competitive harm from such contracts requires their
prohibition.
43. As stated above, a satellite programmer may also provide its
own programming directly to subscribers by purchasing channel capacity
on an open video system platform. It is therefore possible for a
programmer vertically integrated with a cable operator to purchase
channel capacity, to provide its own programming directly to
subscribers and to refuse to sell the programming it owns to another
MVPD on the open video system. Such a refusal to sell would appear to
be unreasonable because it discriminates against a class of
distributors, i.e., open video system programming providers.
Furthermore, this type of refusal to sell would result in the same
situation which we have deemed contrary to the purposes of Section 628
when achieved through an exclusive contract, i.e., restricting
competitive access to vertically integrated satellite cable programming
to a vertically integrated entity. We believe this would consequently
be actionable under Section 628(c).
44. Open video system operators and video programming providers
that provide more than one channel of programming on an open video
system are MVPDs. We will not create an exception to our rules that
would exclude open video system operators or open video system
programming providers from the benefits of our program access rules.
Accordingly, we will add a note to the definition of MVPD contained in
Section 76.1000(e) of our rules to indicate that video programming
providers on open video systems that provide more than one channel of
programming to subscribers are MVPDs.
[[Page 28705]]
4. Sports Exclusivity, Network Non-Duplication and Syndicated
Exclusivity
45. We believe that we can directly apply our existing cable
regulations regarding sports exclusivity, syndicated exclusivity and
network non-duplication to open video systems. We do not believe that
open video systems that span multiple geographic zones or communities
should be treated any differently than similar cable systems. The
record evidence indicates that large cable systems are able to comply
with these provisions, and no commenter has provided any reason why
open video systems should not be required to comply with the same
regulations. In addition, we find that open video system operators
should be responsible for compliance with these rules.
46. In all cases, we find that television stations must notify the
open video system operator of the exclusive or non-duplication rights
being exercised. When the open video system operator receives such a
notification, it will be required to give the appropriate video
programming providers an opportunity to either substitute signals or
delete signals where possible. Therefore, we require that open video
system operators make all notices of exclusive or non-duplication
rights received immediately available to the appropriate video
programming providers on their systems. We would not expect to impose
sanctions on an OVS operator for violations of the exclusivity rules by
an unaffiliated program supplier if the operator provided proper
notices to the program supplier and took prompt steps to stop the
distribution of the infringing program once it was notified of the
violation.
5. Other Title VI Provisions
47. The Commission will, as proposed in the NPRM, apply the
following provisions of the Communications Act and the Commission's
rules thereunder to open video systems: Section 613 (c) through (h)
regarding ownership restrictions; Section 616 regarding regulation of
carriage agreements; Section 623(f) regarding negative option billing;
Section 631 regarding subscriber privacy; and Section 634 regarding
equal employment opportunity.
6. Preemption of Local Franchising Requirements
48. Section 653 exempts an open video system operator from the
requirement of obtaining a local franchise under Section 621, although
the operator still must pay a gross revenue fee ``in lieu of'' a
franchise fee and must satisfy obligations under Section 611. However,
we believe that Congress did not intend to infringe upon local
communities' prerogative to manage their rights-of-way in order to
protect the public health and safety. State and local authorities may
impose conditions on an open video system operator for use of the
rights-of-way, so long as such conditions are applied equally to all
users of the rights-of-way (i.e., are non-discriminatory and
competitively neutral). Conversely, state and local authorities may not
impose specific conditions on use of the rights-of-way that are
unrelated to their management function or that apply to an open video
system operator differently than they apply to other rights-of-way
users.
49. Any state or local requirement that seeks to impose Title VI
``franchise-like'' requirements on an open video system operator would
directly conflict with Congress' express direction that open video
system operators need not obtain local franchises. Examples of such
``franchise-like'' requirements include constructing institutional
networks, donating money to local educational or charitable
institutions, or specifying the amount or type of capacity that the
system must possess. Such requirements are preempted because they
``stand[ ] as an obstacle to the accomplishment of the full purposes
and objectives of Congress.'' We believe the most natural reading of
Section 653, in light of Congress's stated intent, is that state and
local governments cannot require any open video system operator to
obtain a Title VI franchise from a state or local authority for use of
public rights-of-way necessary to operate its open video system.
50. The state or local government may, however, impose non-
discriminatory and competitively conditions on an open video system
operator for use of the rights-of-way, so long as such conditions are
applied equally to all users of the rights-of-way (i.e., are non-
discriminatory and competitvely neutral). For instance, a state or
local government could impose normal fees associated with zoning and
construction of an open video system, so long as such fees were applied
in a non-discriminatory and competitively neutral manner. Conversely,
state and local authorities may not impose specific conditions on the
use of the rights-of-way that are unrelated to their management
function or that apply to an open video system operator differently
than they apply to other users of the rights-of-way.
51. Local authorities will retain their ability to address the
following valid local concerns: (1) coordination of construction
schedules, (2) establishment of standards and procedures for
constructing lines across private property, (3) determination of
insurance and indemnity requirements, (4) establishment of rules for
local building codes, (5) repairing and resurfacing construction-
damaged streets, (6) ensuring public safety in the use of rights-of-way
by gas, telephone, electric, cable, and similar companies, and (7)
keeping track of the various systems using the rights-of-way to prevent
interference among facilities.
52. We will apply the fee to all gross revenues received by an open
video system operator or its affiliates, including all revenues
received from subscribers and all carriage revenues received from
unaffiliated video programming providers. Gross revenues will not
include revenues collected by unaffiliated video programming providers
from their subscribers or advertisers, etc.--gross revenues will only
include fees paid to the OVS operator. We will also require any gross
revenues fee that the open video system operator or its affiliate
collects from subscribers to be excluded from gross revenues.
53. Thus, we conclude that a state or local government requirement
that directs an open video system operator to obtain a Title VI
franchise, or impose Title VI ``franchise like'' requirements, to
operate an open video system directly conflicts with Section 653 of the
Communications Act and is preempted.
F. Information Provided to Subscribers
54. We believe, as stated in the Notice, that Section
653(b)(1)(E)(i) is intended to be a specific application of the non-
discrimination requirement contained in Section 653(b)(1)(A).
Specifically, we believe that this provision is meant to ensure that an
open video system operator does not favor itself or its affiliates in
its interaction with the customer at the point of actual program
selection (i.e., when the subscriber is choosing a particular channel
to watch). The type of ``material or information'' that therefore would
fall within the scope of Section 653(b)(1)(E)(i) includes navigational
devices, guides (electronic or paper) and menus used by the subscriber
to actively select programming.
55. An open video system operator may not discriminate in favor of
affiliated programming by, for example, ``burying'' unaffiliated
programmers in difficult to access portions of electronic guides,
navigational devices or menus, or by otherwise placing affiliated
programming in more prominent
[[Page 28706]]
positions on the electronic guides, navigational devices or menus. To
the extent that an open video system operator uses billing inserts to
advertise its service generally, rather than providing inserts as a
guide to program selection, we believe that such inserts fall outside
the scope of Section 653(b)(1)(E)(i). We believe that a paper
programming guide that is intended to be used at the point of actual
channel selection would be governed by Section 653(b)(1)(E)(i).
56. Section 653(b)(1)(E)(i) prohibits the open video system
operator from unreasonably discriminating in favor of its affiliated
programming by means of discriminatory use of on-system advertising, if
that advertising is contained in any channel selection guide, aid or
menu. Accordingly, an open video system operator may not use its
position as controller of a navigational device or menu to advertise
its programming on the navigational device or menu, while at the same
time disallowing unaffiliated programming providers comparable
opportunities to advertise on the navigational device or menu.
57. Menus offered by the OVS operator may inform the viewer that
other services (that the consumer has not ordered) are available on the
open video system, and direct the subscriber how to access a second
screen with more complete information on those other services. In
addition, for programming to which the consumer has actually
subscribed, no programming service on the open video system operator's
navigational device should be more difficult to select than any other
programming service.
58. An open video system operator is not relieved of the non-
discrimination provisions of Section 653(b)(1)(E)(i) if the operator
offers a navigational device that works only with affiliated video
programming packages. In addition, the open video system operator may
not evade its obligation to ensure that other non-affiliated
programming providers are represented on a navigational device, guide
or menu simply by having the service nominally provided by its
affiliate.
59. We find that the ``suitable and unique'' identification
requirement of Section 653(b)(1)(E)(ii) would be satisfied if an open
video system operator's navigational device included a provider's name
(broadcast station call letters and network affiliation, for example),
but not its logo or branding device. However, if the open video system
operator chooses to prohibit unaffiliated providers' logos or branding
information on its navigational device, guide or menu, it would
similarly have to prohibit its own logo or branding information under
Section 653(b)(1)(E)(i).
G. Dispute Resolution
60. Given the short 10-day period in which the Commission must
approve or disapprove a certification request, we believe that the
dispute resolution process will play a key role in ensuring the success
of the open video framework. In order for the Commission's review to be
as efficient and thorough as possible, we adopt our suggestion in the
Notice to model our open video system dispute resolution process after
our rules governing program access disputes (except for must-carry
complaints and petitions for special relief).
61. We will seek to dispose of as many cases as possible on the
basis of a complaint, answer and reply. Parties should include all
relevant evidence, including documentary evidence, in the complaint and
answer to support their claims. Discovery will not be permitted as a
matter of right, but on a case-by-case basis as deemed necessary by the
Commission staff reviewing the complaint. Any complaint filed pursuant
to Section 653(a)(2) must be filed within one year of the date on which
the open video system operator's actions allegedly violated Commission
rules.
62. Finally, while we encourage parties to use ADR techniques to
attempt to resolve their dispute without the Commission's direct
involvement, we believe that a clause in a carriage agreement requiring
ADR before a dispute could be brought to the Commission would not be a
``just and reasonable'' term or condition of carriage. Such a
requirement could delay an aggrieved party's right to redress
significantly beyond the 180-day period mandated by Congress. In
addition, permitting operators to require as a condition of carriage
that all disputes be resolved through ADR, may lead operators to
mandate ADR practices that give them an unfair advantage over
complainants.
H. Joint Marketing, Bundling and Structural Separation
63. Section 653 is silent on the issue of joint marketing. The Act
does, however, expressly impose joint marketing restrictions on
telephone companies in other contexts. Given that these Sections were
all enacted as part of the 1996 Act, we find it a significant
indication of Congress' intent that Sections 271(e), 272(g) and 274(c)
contain express joint marketing restrictions while Section 653 does
not. Section 272(g)(2) specifically sets a similar competitive
condition on the lifting of the joint marketing restrictions between
telephone exchange and interLATA services: a BOC's authorization under
Section 271(d) to provide interLATA services in an in-region State.
Again, no such condition was established in Section 653.
64. Since Congress chose not to adopt joint marketing restrictions
in Section 653 even though (1) it specifically applied joint marketing
restrictions to other provisions of the 1996 Act, and (2) it restricted
joint marketing in some provisions of the 1996 Act until the
introduction of competition in the local telephone market, we decline
to adopt joint marketing restrictions here. We note, however, that any
entity that offers any telecommunications service will be subject to
both the customer proprietary network information (``CPNI'')
restrictions set forth in Section 222 of the Communications Act and any
regulations the Commission establishes pursuant to Section 222.
Similarly, any provider of cable or open video service will be subject
to the cable privacy restrictions set forth in Section 631.
b. Bundling
65. Section 653 also does not address the issue of ``bundling,''
which we define in this context to mean the offering of video service
and local exchange service in a single package at a single price. We
would also treat as bundling the situation in which an entity offers
one service at a discount if the customer purchases another service. We
disagree that the bundling of telephone and video services will be
anti-competitive, and increase the risk of cross-subsidization of the
competitive service by the monopoly service. We believe that the
Commission's Part 64 cost allocation rules and any amendments thereto
will protect adequately regulated telephone ratepayers from a
misallocation of costs that could lead to excessive telephony rates.
However, we will impose certain safeguards to protect consumers in
these circumstances. First, the open video system operator, where it is
the incumbent LEC, may not require that a subscriber purchase its video
service in order to receive local exchange service. Second, while the
open video system operator may offer subscribers a discount for
purchasing the bundled package, the LEC must impute the unbundled
tariff rate for the regulated service.
[[Page 28707]]
c. Structural Separation
66. We disagree with those commenters that argue that a separate
affiliate requirement nevertheless should be imposed pursuant to
Section 272. We believe that Congress did not intend to impose a
separate affiliate requirement on LECs providing open video service.
First, Section 653 is silent on whether LECs and others must provide
open video service through a separate affiliate. In fact, Congress
expressly directed that Title II requirements not be applied to ``the
establishment and operation of an open video system'' under Section
653. In addition, Section 272 exempts ``incidental interLATA services''
from the separate affiliate requirement, and includes certain video
programming services within the definition of ``incidental interLATA
services'' described in Section 271(g). Since we conclude that Congress
did not intend to apply a separate affiliate requirement in this
context, we need not address whether the provision of video programming
would qualify as an ``information service'' under Section 272(a)(2)(C),
or exercise our authority under Section 272(f)(3). Rather, we will
adhere to Congress' intent and decline to impose a separate affiliate
requirement here.
I. Advanced Telecommunications Incentives
67. In order to promote the development of advanced
telecommunications to consumers, the Commission will consider proposals
for actions to encourage open video system deployment of advanced
telecommunications services as defined in Section 706 of the 1996 Act.
This approach will be available on a case-by-case basis for open video
system operators that can demonstrate a need for additional
deregulatory measures to successfully deploy advanced
telecommunications to all consumers.
Final Regulatory Flexibility Analysis
68. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.
Secs. 601-12, the Commission's final analysis with respect to the
Second Report and Order is as follows:
69. Need and purpose of this action: The Commission, in compliance
with Section 302(a) of the Telecommunications Act of 1996 pertaining to
open video systems, is required to adopt rules and procedures necessary
to implement this section of the Telecommunications Act of 1996.
70. Summary of issues raised by the public in response to the
Initial Regulatory Flexibility Analysis: Collectively, the National
League of Cities; the United States Conference of Mayors; the National
Association of Counties; the National Association of Telecommunications
Officers and Advisors; Montgomery County, Maryland; the City of Los
Angeles, CA; the City of Chillicothe, OH; the City of Dearborn,
Michigan; the City of Dubuque, Iowa; the City of St. Louis, MO; the
City of Santa Clara, CA; and the City of Tallahassee, FL filed reply
comments in response to the Initial Regulatory Flexibility Analysis.
These reply comments assert that a significant number of small
governmental entities will be burdened by the proposals of the
Commission and commenters. The Commission has considered these reply
comments and has attempted to structure the open video system rules set
forth in this Second Report and Order so as to minimize the
administrative burden upon small governmental entities.
71. Significant alternatives considered: Petitioners representing
cable interests, telephone interests, programming interests, consumer
interests and local government interests submitted several alternatives
aimed at minimizing administrative burdens. In this proceeding, the
Commission has considered these alternatives and has attempted both to
accommodate the concerns raised by the parties and to minimize the
administrative burdens upon the parties in accordance with Congress'
desire for the Commission to develop a streamlined regulatory model for
open video service operators.
Paperwork Reduction Act of 1995 Analysis
72. The requirements adopted in the Second Report and Order have
been analyzed with respect to the Paperwork Reduction Act of 1995 (the
``1995 Act'') and found to impose new or modified information
collection requirements on the public. Implementation of any new or
modified requirement will be subject to approval by the Office of
Management and Budget (``OMB'') as prescribed by the 1995 Act. The
Commission, as part of its continuing effort to reduce paperwork
burdens, invites the general public and OMB to comment on the
information collections contained in this Second Report and Order as
required by the 1995 Act, Public Law No. 104-13. OMB comments are due
on or before August 5, 1996. Comments should address: (1) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the Commission, including whether the
information shall have practical utility; (2) the accuracy of the
Commission's burden estimates; (3) ways to enhance the quality,
utility, and clarity of the information collected; and (4) ways to
minimize the burden of the collection of information on the
respondents, including the use of automated collection techniques or
other forms of information technology.
73. Written comments by the public on the modified information
collections are due on or before June 20, 1996, and reply comments are
due on or before July 1, 1996. Written comments must be submitted by
OMB on modified information collections on or before August 5, 1996. A
copy of any comments on the information collections contained herein
should be submitted to Dorothy Conway, Federal Communications
Commission, Room 234, 1919 M Street, N.W., Washington, DC 20554, or via
the Internet to dconway@fcc.gov and to Timothy Fain, OMB Desk Officer,
10236, NEOB, 725--17th Street, N.W., Washington, DC 20503 or via the
Internet to fain__t@al.eop.gov. For additional information concerning
the information collections contained herein contact Dorothy Conway at
202-418-0217, or via the Internet at dconway@fcc.gov.
Ordering Clauses
74. Accordingly, it is ordered that, pursuant to Sections 4(i),
4(j), 303(r), and 653 of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 154(j), 303(r), and 573, the rules, requirements and
policies discussed in this Second Report and Order ARE adopted and
Sections 76.1000 and 76.1500 through 76.1515 of the Commission's rules,
47 CFR Secs. 1000, 76.1000 and 76.1500 through 76.1515 ARE AMENDED as
set forth below.
75. It is further ordered that the requirements and regulations
established in this decision shall become effective upon approval by
OMB of the new information collection requirements adopted herein, but
no sooner than July 5, 1996.
76. It is further ordered that the Secretary shall send a copy of
this Second Report and Order including the Final Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration in accordance with paragraph 603(a) of the Regulatory
Flexibility Act, Public Law No. 96-354, 94 Stat. 1164, 5 U.S.C.
Secs. 601 through 699 (1981).
[[Page 28708]]
Federal Communications Commission.
LaVera F. Marshall,
Acting Secretary.
List of Subjects in 47 CFR Part 76
Cable television.
Appendix B
Rule Changes
Part 76 of Title 47 of the Code of Federal Regulations is amended
as follows:
PART 76--CABLE TELEVISION SERVICE
1. The authority citation for Part 76 is revised to read as
follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558,
560, 561, 571, 572, 573.
2. Section 76.1000 is amended by adding notes to paragraphs (e) and
(h) to read as follows:
Sec. 76.1000 Definitions.
* * * * *
(e) * * *
Note to paragraph (e): A video programming provider that
provides more than one channel of video programming on an open video
system is a multichannel video programming distributor for purposes
of this subpart O and Section 76.1507.
* * * * *
(h) * * *
Note to paragraph (h): Satellite programming which is primarily
intended for the direct receipt by open video system operators for
their retransmission to open video system subscribers shall be
included within the definition of satellite cable programming.
* * * * *
3. Section 76.1004 is amended by designating the existing text as
paragraph (a), and adding paragraph (b) to read as follows:
Sec. 76.1004 Applicability of program access rules to common carriers
and affiliates.
* * * * *
(b) Sections 76.1002(c)(1) through (3) shall be applied to a common
carrier or its affiliate that provides video programming by any means
directly to subscribers in such a way that such common carrier or its
affiliate shall be generally restricted from entering into an exclusive
arrangement for satellite cable programming or satellite broadcast
programming with a satellite cable programming vendor in which a common
carrier or its affiliate has an attributable interest or a satellite
broadcast programming vendor in which a common carrier or its affiliate
has an attributable interest, unless the arrangement pertains to an
area served by a cable system as of October 5, 1992, and the Commission
determines in accordance with Section Sec. 76.1002(c)(4) that such
arrangment is in the public interest.
4. A new Subpart S is added to Part 76 to read as follows:
Subpart S--Open Video Systems
Sec.
76.1500 Definitions.
76.1501 Qualifications to be an open video system operator.
76.1502 Certification.
76.1503 Carriage of video programming providers on open video
systems.
76.1504 Rates, terms and conditions for carriage on open video
systems.
76.1505 Public, educational and governmental access.
76.1506 Carriage of television broadcast signals.
76.1507 Competitive access to satellite cable programming.
76.1508 Network non-duplication.
76.1509 Syndicated program exclusivity.
76.1510 Application of certain Title VI provisions.
76.1511 Fees.
76.1512 Programming information.
76.1513 Dispute resolution.
76.1514 Bundling of video and local exchange services.
Subpart S--Open Video Systems
Sec. 76.1500 Definitions.
(a) Open video system. A facility consisting of a set of
transmission paths and associated signal generation, reception, and
control equipment that is designed to provide cable service which
includes video programming and which is provided to multiple
subscribers within a community, provided that the Commission has
certified that such system complies with this part.
(b) Open video system operator (``operator''). Any person or group
of persons who provides cable service over an open video system and
directly or through one or more affiliates owns a significant interest
in such open video system, or otherwise controls or is responsible for
the management and operation of such an open video system.
(c) Video programming provider. Any person or group of persons who
has the right under the copyright laws to select and contract for
carriage of specific video programming on an open video system.
(d) Activated channels. This term shall have the same meaning as
provided in the cable television rules, 47 CFR 76.5(nn).
(e) Shared channel. Any channel that carries video programming that
is selected by more than one video programming provider and offered to
subscribers.
(f) Cable service. This term shall have the same meaning as
provided in the cable television rules, 47 CFR 76.5(ff).
(g) Other terms. Unless otherwise expressly stated, words not
defined in this part shall be given their meaning as used in Title 47
of the United States Code, as amended, and, if not defined therein,
their meaning as used in Part 47 of the Code of Federal Regulations.
Sec. 76.1501 Qualifications to be an open video system operator.
Any person may obtain a certification to operate an open video
system pursuant to Section 653(a)(1) of the Communications Act, 47
U.S.C. 573(a)(1), except that an operator of a cable system, regardless
of any other service that the cable operator may provide, may not
obtain such a certification within its cable service area unless it is
subject to ``effective competition,'' as defined in Section 623(l)(1)
of the Communications Act, 47 U.S.C. 543(l)(1). A cable operator that
is not subject to effective competition within its cable service area
may file a petition with the Commission, seeking a finding that
particular circumstances exist that make it consistent with the public
interest, convenience, and necessity to allow the operator to convert
its cable system to an open video system. Nothing herein shall be
construed to affect the terms of any franchising agreement or other
contractual agreement.
Note to Sec. 76.1501: An example of a circumstance in which the
public interest, convenience and necessity would be served by
permitting a cable operator not subject to effective competition to
become an open video system operator within its cable service area
is where the entry of a facilities-based competitor into its cable
service area would likely be infeasible.
Sec. 76.1502 Certification.
(a) An operator of an open video system must certify to the
Commission that it will comply with the Commission's regulations in 47
CFR 76.1503, 76.1504, 76.1506(m), 76.1508, 76.1509, and 76.1513. If
construction of new physical plant is required, the Commission must
approve such certification prior to the commencement of construction.
If no new construction is required, the Commission must approve such
certification prior to the commencement of service at such a point in
time that would allow the applicant sufficient time to comply with the
Commission's notification requirements.
(b) Certifications must be verified by an officer or director of
the applicant, stating that, to the best of his or her information and
belief, the
[[Page 28709]]
representations made therein are accurate.
(c) Certifications must be filed on FCC Form 1275 and must include:
(1) The applicant's name, address and telephone number;
(2) A statement of ownership, including all affiliated entities;
(3) If the applicant is a cable operator applying for certification
in its cable franchise area, a statement that the applicant is
qualified to operate an open video system under Section 76.1501.
(4) A statement that the applicant agrees to comply and to remain
in compliance with each of the Commission's regulations in
Secs. 76.1503, 76.1504, 76.1506(m), 76.1508, 76.1509, and 76.1513;
(5) If the applicant is required under 47 CFR 64.903(a) of this
chapter to file a cost allocation manual, a statement that the
applicant will file changes to its manual at least 60 days before the
commencement of service;
(6) A general description of the anticipated communities or areas
to be served upon completion of the system;
(7) The anticipated amount and type (i.e., analog or digital) of
capacity (for switched digital systems, the anticipated number of
available channel input ports); and
(8) A statement that the applicant will comply with the
Commission's notice and enrollment requirements for unaffiliated video
programming providers.
(d) Comments or oppositions to a certification must be filed within
five days of the Commission's receipt of the certification and must be
served on the party that filed the certification. If the Commission
does not disapprove certification within ten days after receipt of an
applicant's request, the certification will be deemed approved. If
disapproved, the applicant may file a revised certification or refile
its original submission with a statement addressing the issues in
dispute. Such refilings must be served on any objecting party or
parties.
Sec. 76.1503 Carriage of video programming providers on open video
systems.
(a) Non-discrimination principle. Except as otherwise permitted in
applicable law or in this part, an operator of an open video system
shall not discriminate among video programming providers with regard to
carriage on its open video system, and its rates, terms and conditions
for such carriage shall be just and reasonable and not unjustly or
unreasonably discriminatory.
(b) Demand for carriage. An operator of an open video system shall
solicit and determine the level of demand for carriage on the system
among potential video programming providers in a non-discriminatory
manner.
(1) Notification. An open video system operator shall file with the
Secretary of the Federal Communications Commission a ``Notice of
Intent'' to establish an open video system, which the Commission will
release in a Public Notice. The Notice of Intent shall include the
following information:
(i) A heading clearly indicating that the document is a Notice of
Intent to establish an open video system;
(ii) The name, address and telephone number of the open video
system operator;
(iii) A description of the system's projected service area;
(iv) A description of the system's projected channel capacity, in
terms of analog, digital and other type(s) of capacity upon activation
of the system;
(v) A description of the steps a potential video programming
provider must follow to seek carriage on the open video system,
including the name, address and telephone number of a person to contact
for further information;
(vi) The starting and ending dates of the initial enrollment period
for video programming providers;
(vii) The process for allocating the system's channel capacity, in
the event that demand for carriage on the system exceeds the system's
capacity; and
(viii) A certification that the operator has complied with all
relevant notification requirements under the Commission's open video
system regulations concerning must-carry and retransmission consent
(Sec. 76.1506), including a list of all local commercial and non-
commercial television stations served, and a certificate of service
showing that the Notice of Intent has been served on all local cable
franchising authorities entitled to establish requirements concerning
the designation of channels for public, educational and governmental
use.
(2) Information. An open video system operator shall provide the
following information to a video programming provider within five
business days of receiving a written request from the provider, unless
otherwise included in the Notice of Intent:
(i) The projected activation date of the open video system. If a
system is to be activated in stages, the operator should describe the
respective stages and the projected dates on which each stage will be
activated;
(ii) A preliminary carriage rate estimate;
(iii) The information a video programming provider will be required
to provide to qualify as a video programming provider, e.g.,
creditworthiness;
(iv) Technical information that is reasonably necessary for
potential video programming providers to assess whether to seek
capacity on the open video system, including what type of customer
premises equipment subscribers will need to receive service;
(v) Any transmission or reception equipment needed by a video
programming provider to interface successfully with the open video
system; and
(vi) The equipment available to facilitate the carriage of
unaffiliated video programming and the electronic form(s) that will be
accepted for processing and subsequent transmission through the system.
(3) Qualifications of video programming providers. An open video
system operator may impose reasonable, non-discriminatory requirements
to assure that a potential video programming provider is qualified to
obtain capacity on the open video system.
(c) One-third limit. If carriage demand by video programming
providers exceeds the activated channel capacity of the open video
system, the operator of the open video system and its affiliated video
programming providers may not select the video programming services for
carriage on more than one-third of the activated channel capacity on
such system.
(1) Measuring capacity. For purposes of this section:
(i) If an open video system carries both analog and digital
signals, an open video system operator shall measure analog and digital
activated channel capacity independently;
(ii) Channels that an open video system is required to carry
pursuant to the Commission's regulations concerning public, educational
and governmental channels and must-carry channels shall be included in
``activated channel capacity'' for purposes of calculating the one-
third of such capacity on which the open video system operator and its
affiliates are allowed to select the video programming for carriage.
Such channels shall not be included in the one-third of capacity on
which the open video system operator is permitted to select programming
where demand for carriage exceeds system capacity;
(iii) Channels that an open video system operator carries pursuant
to the
[[Page 28710]]
Commission's regulations concerning retransmission consent shall be
included in ``activated channel capacity'' for purposes of calculating
the one-third of such capacity on which the open video system operator
and its affiliates are allowed to select the video programming for
carriage. Such channels shall be included in the one-third of capacity
on which the open video system operator is permitted to select
programming, where demand for carriage exceeds system capacity, to the
extent that the channels are carried as part of the programming service
of the operator or its affiliate, subject to paragraph (c)(1)(iv); and
(iv) Any channel on which shared programming is carried shall be
included in ``activated channel capacity'' for purposes of calculating
the one-third of such capacity on which the open video system operator
and its affiliates are allowed to select the video programming for
carriage. Such channels shall be included in the one-third of capacity
on which the open video system operator is permitted to select
programming, where demand for carriage exceeds system capacity, to the
extent the open video system operator or its affiliate is one of the
video programming providers sharing such channel.
Note to paragraph (c)(1)(iv): For example, if the open video
system operator and two unaffiliated video programming providers
each carry a programming service that is placed on a shared channel,
the shared channel shall count as 0.33 channels against the one-
third amount of capacity allocable to the open video system
operator, where demand for carriage exceeds system capacity.
(2) Allocating capacity. An operator of an open video system shall
allocate activated channel capacity through a fair, open and non-
discriminatory process; the process must be insulated from any bias of
the open video system operator and verifiable.
(i) If an open video system carries both analog and digital
signals, an open video system operator shall treat analog and digital
capacity separately in allocating system capacity.
(ii) Subsequent changes in capacity or demand. An open video system
operator must allocate open capacity, if any, at least once every three
years, beginning three years from the date of service commencement.
Open capacity shall be allocated in accordance with this section. Open
capacity shall include all capacity that becomes available during the
course of the three-year period, as well as capacity in excess of one-
third of the system's activated channel capacity on which the operator
of the open video system or its affiliate selects programming. An
operator shall maintain a file of qualified video programming providers
who have requested carriage or additional carriage since the previous
allocation of capacity. Information regarding how a video programming
provider should apply for carriage must be made available upon request.
Note 1 to paragraph (c)(2)(ii): An open video system operator
will not be required to comply with the regulations contained in
this section if there is no open capacity to be allocated at the end
of the three year period.
Note 2 to paragraph (c)(2)(ii): An open video system operator
shall be required to accommodate changes in obligations concerning
public, educational or governmental channels or must-carry channels
in accordance with Sections 611, 614 and 615 of the Communications
Act and the regulations contained in this part.
(iii) Channel sharing. An open video system operator may carry on
only one channel any video programming service that is offered by more
than one video programming provider (including the operator's video
programming affiliate), provided that subscribers have ready and
immediate access to any such programming service. Nothing in this
section shall be construed to impair the rights of programming
services.
Note 1 to paragraph (c)(2)(iii): An open video system operator
may implement channel sharing only after it becomes apparent that
one or more video programming services will be offered by multiple
video programming providers. An open video system operator may not
select, in advance of any duplication among video programming
providers, which programming services shall be placed on shared
channels.
Note 2 to paragraph (c)(2)(iii): Each video programming provider
offering a programming service that is carried on a shared channel
must have the contractual permission of the video programming
service to offer the service to subscribers. The placement of a
programming service on a shared channel, however, is not subject to
the approval of the video programming service or vendor.
Note 3 to paragraph (c)(2)(iii): Ready and immediate access in
this context means that the channel sharing is ``transparent'' to
subscribers.
(iv) Open video system operator discretion. Notwithstanding the
foregoing, an operator of an open video system may:
(A) Require video programming providers to request and obtain
system capacity in increments of no less than one full-time channel;
however, an operator of an open video system may not require video
programming providers to obtain capacity in increments of more than one
full-time channel;
(B) Limit video programming providers from selecting the
programming on more capacity than the amount of capacity on which the
system operator and its affiliates are selecting the programming for
carriage; and
(C) Refuse carriage on its open video system to a competing, in-
region cable operator or its affiliates that offers cable service to
subscribers located in the service area of the open video system,
except where the allocation of open video system capacity to a
competing cable operator is consistent with the public interest,
convenience, and necessity.
Note to paragraph (c)(2)(iv)(C): The Commission will except
situations where it is determined that facilities-based competition
will not be significantly impeded. We will provide a specific
exception in a situation in which: the competing, in-region cable
operator and affiliated systems offer service to less than 20% of
the households passed by the open video system; and the competing,
in-region cable operator and affiliated systems provide cable
service to a total of less than 17,000 subscribers within the open
video system's service area.
(3) Nothing in this paragraph shall be construed to limit the
number of channels that the open video system operator and its
affiliates, or another video programming provider, may offer to provide
directly to subscribers. Co-packaging is permissible among video
programming providers, but may not be a condition of carriage. Video
programming providers may freely elect whether to enter into co-
packaging arrangements.
Note to paragraph (c)(3): Any video programming provider on an
open video system may co-package video programming that is selected
by itself, an affiliated video programming provider and/or
unaffiliated video programming providers on the system.
Sec. 76.1504 Rates, terms and conditions for carriage on open video
systems.
(a) Reasonable rate principle. An open video system operator shall
set rates, terms, and conditions for carriage that are just and
reasonable, and are not unjustly or unreasonably discriminatory.
(b) Differences in rates.
(1) An open video system operator may charge different rates to
different classes of video programming providers, provided that the
bases for such differences are not unjust or unreasonably
discriminatory.
(2) An open video system operator shall not impose different rates,
terms, or conditions based on the content of the programming to be
offered by any unaffiliated video programming provider.
[[Page 28711]]
(c) Just and reasonable rate presumption. A strong presumption will
apply that carriage rates are just and reasonable for open video system
operators where at least one unaffiliated video programming provider,
or unaffiliated programming providers as a group, occupy capacity equal
to the lesser of one-third of the system capacity or that occupied by
the open video system operator and its affiliates, and where any rate
complained of is no higher than the average of the rates paid by
unaffiliated programmers receiving carriage from the open video system
operator.
(d) Examination of rates. Complaints regarding rates shall be
limited to video programming providers that have sought carriage on the
open video system. If a video programming provider files a complaint
against an open video system operator meeting the above just and
reasonable rate presumption, the burden of proof will rest with the
complainant. If a complaint is filed against an open video system
operator that does not meet the just and reasonable rate presumption,
the open video system operator will bear the burden of proof to
demonstrate, using the principles set forth below, that the carriage
rates subject to the complaint are just and reasonable.
(e) Determining just and reasonable rates subject to complaints.
Carriage rates subject to complaint shall be presumed just and
reasonable if they are no greater than an imputed carriage rate based
on the following. The imputed rate will reflect what the open video
system operator, or its affiliate, ``pays'' for carriage of its own
programming. Use of this approach is appropriate in circumstances where
the pricing is applicable to a new market entrant (the open video
system operator) that will face competition from an existing incumbent
provider (the incumbent cable operator), as opposed to circumstances
where the pricing is used to establish a rate for an essential input
service that is charged to a competing new entrant by an incumbent
provider. With respect to new market entrants, an efficient component
pricing model will produce rates that encourage market entry. If the
carriage rate to an unaffiliated program provider surpasses what an
operator earns from carrying its own programming, the rate can be
presumed to exceed a just and reasonable level. An open video system
operator's price to its subscribers will be determined by several
separate costs components. One general category are those costs related
to the creative development and production of programming. A second
category are costs associated with packaging various programs for the
open video system operator's offering. A third category related to the
infrastructure or engineering costs identified with building and
maintaining the open video system. Contained in each is a profit
allowance attributed to the economic value of each component. When an
open video system operator provides only carriage through its
infrastructure, however, the programming and packaging flows from the
independent program provider, who bears the cost. The open video system
operator avoids programming and packaging costs, including profits.
These avoided costs should not be reflected in the price charged an
independent program provider for carriage. The imputed rate also seeks
to recognize the loss of subscribers to the open video system
operator's programming package resulting from carrying competing
programming.
Sec. 76.1505 Public, educational and governmental access.
(a) An open video system operator shall be subject to public,
educational and governmental access requirements for every cable
franchise area with which its system overlaps.
(b) An open video system operator must ensure that all subscribers
receive any public, educational and governmental access channels within
the subscribers' franchise area.
(c) An open video system operator may negotiate with the local
cable franchising authority of the jurisdiction(s) which the open video
system serves to establish the open video system operator's obligations
with respect to public, educational and governmental access channel
capacity, services, facilities and equipment. These negotiations may
include the local cable operator if the local franchising authority,
the open video system operator and the cable operator so desire.
(d) If an open video system operator and a local franchising
authority are unable to reach an agreement regarding the open video
system operator's obligations with respect to public, educational and
governmental access channel capacity, services, facilities and
equipment within the local franchising authority's jurisdiction:
(1) The open video system operator must satisfy the same public,
educational and governmental access obligations as the local cable
operator by connecting with the cable operator's public, educational
and governmental access channel feeds and by sharing the costs directly
related to supporting public, educational and governmental access,
including costs of public, educational and governmental access
services, facilities and equipment, and equipment necessary to achieve
the connection. The open video system operator must provide the same
amount of public, educational and governmental access as the local
cable operator is required to carry.
(2) The local franchising authority shall impose the same rules and
procedures on an open video system operator as it imposes on the local
cable operator with regard to the open video system operator's use of
channel capacity designated for public, educational and governmental
access use when such capacity is not being used for such purposes.
(3) The local cable operator is required to permit the open video
system operator to connect with its public, educational and
governmental access channel feeds. The open video system operator and
the cable operator may decide how to accomplish this connection, taking
into consideration the exact physical and technical circumstances of
the cable and open video systems involved. If the cable and open video
system operator cannot agree on how to accomplish the connection, the
local franchising authority may decide. The local franchising authority
may require that the connection occur on government property or on
public rights of way.
(4) The costs of connection and maintaining public, educational and
governmental access channel capacity, services, facilities and
equipment shall be divided equitably between the cable operator and the
open video system operator. Shared costs shall include capital
contributions and any other costs or investments directly relating to
or supporting public, educational and governmental access and required
by the cable operator's franchise agreement. Capital expenses incurred
prior to the open video system operator's connection shall be subject
to cost sharing on a pro-rata basis to the extent such investments have
not been fully amortized by the cable operator.
(5) The local franchising authority may not impose public,
educational and governmental access obligations on the open video
system operator that would exceed those imposed on the local cable
operator.
(6) Where there is no existing local cable operator, the open video
system operator must make a reasonable amount of channel capacity
available for public, educational and governmental use, as well as
provide reasonable support for services, facilities and
[[Page 28712]]
equipment relating to such public, educational and governmental use. If
a franchise agreement previously existed in that franchise area, the
open video system operator shall be required to maintain the previously
existing public, educational and governmental access terms of that
franchise agreement. Absent a previous cable franchise agreement, the
open video system operator shall be required to provide channel
capacity, services, facilities and equipment relating to public,
educational and governmental access equivalent to that prescribed in
the franchise agreement(s) for the nearest operating cable system with
a commitment to provide public, educational and governmental access.
Note to paragraph (d)(6): If a cable system converts to an open
video system, the operator will be required to maintain the
previously existing terms of its public, educational and
governmental access obligations.
(7) The open video system operator must adjust its system(s) to
comply with new public, educational and governmental access obligations
imposed by a cable franchise renewal; provided, however, that an open
video system operator will not be required to displace other
programmers using its open video system to accommodate public,
educational and governmental access channels. The open video system
operator shall comply with such public, educational and governmental
access obligations whenever additional capacity is or becomes
available, whether it is due to increased channel capacity or decreased
demand for channel capacity.
(8) The open video system operator and/or the local franchising
authority may file a complaint with the Commission, pursuant to our
dispute resolution procedures set forth in Sec. 76.1514, if the open
video system operator and the local franchising authority cannot agree
as to the application of the Commission's rules regarding the open
video system operator's connection and/or cost sharing obligations
under this section.
(e) If an open video system operator maintains an institutional
network, as defined in Section 611(f) of the Communications Act, the
local franchising authority may require that educational and
governmental access channels be designated on that institutional
network to the extent such channels are designated on the institutional
network of the local cable operator.
(f) An open video system operator shall not exercise any editorial
control over any public, educational, or governmental use of channel
capacity provided pursuant to this subsection, provided, however, that
any open video system operator may prohibit the use on its system of
any channel capacity of any public, educational, or governmental
facility for any programming which contains nudity, obscene material,
indecent material as defined in Sec. 76.701(g), or material soliciting
or promoting unlawful conduct. For purposes of this section, ``material
soliciting or promoting unlawful conduct'' shall mean material that is
otherwise proscribed by law. An open video system operator may require
any access user, or access manager or administrator agreeing to assume
the responsibility of certifying, to certify that its programming does
not contain any of the materials described above and that reasonable
efforts will be used to ensure that live programming does not contain
such material.
Sec. 76.1506 Carriage of television broadcast signals.
(a) The provisions of Subpart D shall apply to open video systems
in accordance with the provisions contained in this subpart.
(b) For the purposes of this Subpart S, television stations are
significantly viewed when they are viewed in households that do not
receive television signals from multichannel video programming
distributors as follows:
(1) For a full or partial network station--a share of viewing hours
of at least 3 percent (total week hours), and a net weekly circulation
of at least 25 percent; and
(2) For an independent station--a share of viewing hours of at
least 2 percent (total week hours), and a net weekly circulation of at
least 5 percent. See Sec. 76.1506(c).
Note to paragraph (b): As used in this paragraph, ``share of
viewing hours'' means the total hours that households that do not
receive television signals from multichannel video programming
distributors viewed the subject station during the week, expressed
as a percentage of the total hours these households viewed all
stations during the period, and ``net weekly circulation'' means the
number of households that do not receive television signals from
multichannel video programming distributors that viewed the station
for 5 minutes or more during the entire week, expressed as a
percentage of the total households that do not receive television
signals from multichannel video programming distributors in the
survey area.
(c) Significantly viewed signals; method to be followed for special
showings. Any provision of Sec. 76.54 that refers to a ``cable
television community'' or ``cable community or communities'' shall
apply to an open video system community or communities. Any provision
of Sec. 76.54 that refers to ``non-cable television homes'' shall apply
to households that do not receive television signals from multichannel
video programming distributors. Any provision of Sec. 76.54 that refers
to a ``cable television system'' shall apply to an open video system.
(d) Definitions applicable to the must-carry rules. Section 76.55
shall apply to all open video systems in accordance with the provisions
contained in this section. Any provision of Sec. 76.55 that refers to a
``cable system'' shall apply to an open video system. Any provision of
Sec. 76.55 that refers to a ``cable operator'' shall apply to an open
video system operator. Any provision of Sec. 76.55 that refers to the
``principal headend'' of a cable system as defined in Sec. 76.5(pp)
shall apply to the equivalent of the principal headend of an open video
system. Any provision of Sec. 76.55 that refers to a ``franchise area''
shall apply to the service area of an open video system.
(e) Signal carriage obligations. Any provision of Sec. 76.56 that
refers to a ``cable television system'' or ``cable system'' shall apply
to an open video system. Any provision of Sec. 76.56 that refers to a
``cable operator'' shall apply to an open video system operator.
Section 76.56(d)(2) shall apply to open video systems as follows: An
open video system operator shall make available to every subscriber of
the open video system all qualified local commercial television
stations and all qualified non-commercial educational television
stations carried in fulfillment of its carriage obligations under this
section.
(f) Channel positioning. Open video system operators shall comply
with the provisions of Sec. 76.57 to the closest extent possible. Any
provision of Sec. 76.57 that refers to a ``cable operator'' shall apply
to an open video system operator. Any provision of Sec. 76.57 that
refers to a ``cable system'' shall apply to an open video system,
except the references to ``cable system'' in Sec. 76.57(d) which shall
apply to an open video system operator.
(g) Notification. Any provision of Sec. 76.58 that refers to a
``cable operator'' shall apply to an open video system operator. Any
provision of Sec. 76.58 that refers to a ``cable system'' shall apply
to an open video system. Any provision of Sec. 76.58 that refers to a
``principal headend'' shall apply to the equivalent of the principal
headend for an open video system.
(h) Modification of television markets. Any provision of Sec. 76.59
that refers to a
[[Page 28713]]
``cable system'' shall apply to an open video system. Any provision of
Sec. 76.59 that refers to a ``cable operator'' shall apply to an open
video system operator.
(i) Compensation for carriage. Any provision of Sec. 76.60 that
refers to a ``cable operator'' shall apply to an open video system
operator. Any provision of Sec. 76.60 that refers to a ``cable system''
shall apply to an open video system. Any provision of Sec. 76.60 that
refers to a ``principal headend'' shall apply to the equivalent of the
principal headend for an open video system.
(j) Disputes concerning carriage. Any provision of Sec. 76.61 that
refers to a ``cable operator'' shall apply to an open video system
operator. Any provision of Sec. 76.61 that refers to a ``cable system''
shall apply to an open video system. Any provision of Sec. 76.61 that
refers to a ``principal headend'' shall apply to the equivalent of the
principal headend for an open video system.
(k) Manner of carriage. Any provision of Sec. 76.62 that refers to
a ``cable operator'' shall apply to an open video system operator.
(l) Retransmission consent. Section 76.64 shall apply to open video
systems in accordance with the provisions contained in this paragraph.
(1) Any provision of Sec. 76.64 that refers to a ``cable system''
shall apply to an open video system. Any provision of Sec. 76.64 that
refers to a ``cable operator'' shall apply to an open video system
operator.
(2) Must-carry/retransmission consent election notifications shall
be sent to the open video system operator. An open video system
operator shall make all must-carry/retransmission consent election
notifications received available to the appropriate programming
providers on its system.
(3) Television broadcast stations are not required to make the same
election for open video systems and cable systems in the same
geographic area.
(4) An open video system commencing new operations shall notify all
local commercial and noncommercial broadcast stations as required under
paragraph (l) of this section on or before the date on which it files
with the Commission its Notice of Intent to establish an open video
system.
(m) Sports broadcast. Section 76.67 shall apply to open video
systems in accordance with the provisions contained in this paragraph.
(1) Any provisions of Sec. 76.67 that refers to a ``community
unit'' shall apply to an open video system or that portion of an open
video system that operates or will operate within a separate and
distinct community or municipal entity (including unincorporated
communities within unincorporated areas and including single, discrete
unincorporated areas).
(2) Notification of programming to be deleted pursuant to this
section shall be served on the open video system operator. The open
video system operator shall make all notifications immediately
available to the appropriate video programming providers on its open
video system. An open video system operator shall not be subject to
sanctions for any violation of these rules by an unaffiliated program
supplier if the operator provided proper notices to the program
supplier and subsequently took prompt steps to stop the distribution of
the infringing program once it was notified of a violation.
(n) Exemption from input selector switch rules. Any provision of
Sec. 76.70 that refers to a ``cable system'' or ``cable systems'' shall
apply to an open video system or open video systems.
(o) Special relief and must-carry complaint procedures. The
procedures set forth in Sec. 76.7 shall apply to special relief and
must-carry complaints relating to open video systems, and not the
procedures set forth in Sec. 76.1514 (Dispute resolution). Any
provision of Sec. 76.7 that refers to a ``cable television system
operator'' or ``cable operator'' shall apply to an open video system
operator. Any provision of Sec. 76.7 that refers to a ``cable
television system'' shall apply to an open video system. Any provision
of Sec. 76.7 that refers to a ``system community unit'' shall apply to
an open video system or that portion of an open video system that
operates or will operate within a separate and distinct community or
municipal entity (including unincorporated communities within
unincorporated areas and including single, discrete unincorporated
areas).
Sec. 76.1507 Competitive access to satellite cable programming.
(a) Any provision that applies to a cable operator under
Secs. 76.1000 through 76.1003 shall also apply to an operator of an
open video system and its affiliate which provides video programming on
its open video system, except as limited by paragraph (a) (1)-(3) of
this section. Any such provision that applies to a satellite cable
programming vendor in which a cable operator has an attributable
interest shall also apply to any satellite cable programming vendor in
which an open video system operator has an attributable interest,
except as limited by paragraph (a) (1)-(3) of this section.
(1) Section 76.1002(c)(1) shall only restrict the conduct of an
open video system operator, its affiliate that provides video
programming on its open video system and a satellite cable programming
vendor in which an open video system operator has an attributable
interest, as follows: No open video system operator or its affiliate
that provides video programming on its open video system shall engage
in any practice or activity or enter into any understanding or
arrangement, including exclusive contracts, with a satellite cable
programming vendor or satellite broadcast programming vendor for
satellite cable programming or satellite broadcast programming that
prevents a multichannel video programming distributor from obtaining
such programming from any satellite cable programming vendor in which
an open video system operator has an attributable interest, or any
satellite broadcasting vendor in which an open video system operator
has an attributable interest for distribution to person in areas not
served by a cable operator as of October 5, 1992.
(2) Section 76.1002(c)(2) shall only restrict the conduct of an
open video system operator, its affiliate that provides video
programming on its open video system and a satellite cable programming
vendor in which an open video system operator has an attributable
interest, as follows: No open video system operator or its affiliate
that provides video programming on its open video system shall enter
into any exclusive contracts, or engage in any practice, activity or
arrangement tantamount to an exclusive contract, for satellite cable
programming or satellite broadcast programming with a satellite cable
programming vendor in which an open video system operator has an
attributable interest or a satellite broadcast programming vendor,
unless the Commission determines in accordance with Sec. 76.1002(c)(4)
that such a contract, practice, activity or arrangement is in the
public interest.
(3) Section 76.1002(c)(3) (i) through (ii) shall only restrict the
conduct of an open video system operator, its affiliate that provides
video programming on its open video system and a satellite cable
programming vendor in which an open video system operator has an
attributable interest, as follows:
(i) Unserved areas. No open video system operator shall enter into
any subdistribution agreement or arrangement for satellite cable
programming or satellite broadcast programming with a satellite cable
programming vendor in which an open video system operator has an
attributable interest or a satellite broadcast programming vendor in
[[Page 28714]]
which an open video system operator has an attributable interest for
distribution to persons in areas not served by a cable operator as of
October 5, 1992.
(ii) Served areas. No open video system operator shall enter into
any subdistribution agreement or arrangement for satellite cable
programming or satellite broadcast programming with a satellite cable
programming vendor in which an open video system operator has an
attributable interest or a satellite broadcast programming vendor in
which an open video system operator has an attributable interest, with
respect to areas served by a cable operator, unless such agreement or
arrangement complies with the limitations set forth in
Sec. 76.1002(c)(3)(iii).
(b) No open video system programming provider in which a cable
operator has an attributable interest shall:
(1) engage in any practice or activity or enter into any
understanding or arrangement, including exclusive contracts, with a
satellite cable programming vendor or satellite broadcast programming
vendor for satellite cable programming or satellite broadcast
programming that prevents a multichannel video programming distributor
from obtaining such programming from any satellite cable programming
vendor in which a cable operator has an attributable interest, or any
satellite broadcasting vendor in which a cable operator has an
attributable interest for distribution to person in areas not served by
a cable operator as of October 5, 1992.
(2) enter into any exclusive contracts, or engage in any practice,
activity or arrangement tantamount to an exclusive contract, for
satellite cable programming or satellite broadcast programming with a
satellite cable programming vendor in which a cable operator has an
attributable interest or a satellite broadcast programming vendor,
unless the Commission determines in accordance with Section
76.1002(c)(4) that such a contract, practice, activity or arrangement
is in the public interest.
Sec. 76.1508 Network non-duplication.
(a) Sections 76.92 through 76.97 shall apply to open video systems
in accordance with the provisions contained in this section.
(b) Any provision of Sec. 76.92 that refers to a ``cable community
unit'' or ``community unit'' shall apply to an open video system or
that portion of an open video system that operates or will operate
within a separate and distinct community or municipal entity (including
unincorporated communities within unincorporated areas and including
single, discrete unincorporated areas). Any provision of Sec. 76.92
that refers to a ``cable television community'' shall apply to an open
video system community. Any provision of Sec. 76.92 that refers to a
``cable television system's mandatory signal carriage obligations''
shall apply to an open video system's mandatory signal carriage
obligations.
(c) Any provision of Sec. 76.94 that refers to a ``cable system
operator'' or ``cable television system operator'' shall apply to an
open video system operator. Any provision of Sec. 76.94 that refers to
a ``cable system'' or ``cable television system'' shall apply to an
open video system except Sec. 76.94 (e) and (f) which shall apply to an
open video system operator. Open video system operators shall make all
notifications and information regarding the exercise of network non-
duplication rights immediately available to all appropriate video
programming provider on the system. An open video system operator shall
not be subject to sanctions for any violation of these rules by an
unaffiliated program supplier if the operator provided proper notices
to the program supplier and subsequently took prompt steps to stop the
distribution of the infringing program once it was notified of a
violation.
(d) Any provision of Sec. 76.95 that refers to a ``cable system''
or a ``cable community unit'' shall apply to an open video system or
that portion of an open video system that operates or will operate
within a separate and distinct community or municipal entity (including
unincorporated communities within unincorporated areas and including
single, discrete unincorporated areas).
Sec. 76.1509 Syndicated program exclusivity.
(a) Sections 76.151 through 76.163 shall apply to open video
systems in accordance with the provisions contained in this section.
(b) Any provision of Sec. 76.151 that refers to a ``cable community
unit'' shall apply to an open video system.
(c) Any provision of Sec. 76.155 that refers to a ``cable system
operator'' or ``cable television system operator'' shall apply to an
open video system operator. Any provision of Sec. 76.155 that refers to
a ``cable system'' or ``cable television system'' shall apply to an
open video system except Sec. 76.155(c) which shall apply to an open
video system operator. Open video system operators shall make all
notifications and information regarding exercise of syndicated program
exclusivity rights immediately available to all appropriate video
programming provider on the system. An open video system operator shall
not be subject to sanctions for any violation of these rules by an
unaffiliated program supplier if the operator provided proper notices
to the program supplier and subsequently took prompt steps to stop the
distribution of the infringing program once it was notified of a
violation.
(d) Any provision of Sec. 76.156 that refers to a ``cable
community'' shall apply to an open video system community. Any
provision of Sec. 76.156 that refers to a ``cable community unit'' or
``community unit'' shall apply to an open video system or that portion
of an open video system that operates or will operate within a separate
and distinct community or municipal entity (including unincorporated
communities within unincorporated areas and including single, discrete
unincorporated areas). Any provision of Secs. 76.156 through 76.158,
and 76.163 that refers to a ``cable system'' shall apply to an open
video system.
(e) Any provision of Sec. 76.159 that refers to ``cable
television'' or a ``cable system'' shall apply to an open video system.
(f) Any provision of Sec. 76.161 that refers to a ``community
unit'' shall apply to an open video system or that portion of an open
video system that is affected by this rule.
Sec. 76.1510 Application of certain Title VI provisions.
The following sections within Part 76 shall also apply to open
video systems: Secs. 76.71, 76.73, 76.75, 76.77 and 76.79 (Equal
Employment Opportunity Requirements); Secs. 76.503 and 76.504
(ownership restrictions); Sec. 76.981 (negative option billing); and
Secs. 76,1300, 76.1301 and 76.1302 (regulation of carriage agreements);
provided, however, that these sections shall apply to open video
systems only to the extent that they do not conflict with this subpart
S. Section 631 of the Communications Act (subscriber privacy) shall
also apply to open video systems.
Sec. 76.1511 Fees.
An open video system operator may be subject to the payment of fees
on the gross revenues of the operator for the provision of cable
service imposed by a local franchising authority or other governmental
entity, in lieu of the franchise fees permitted under Section 622 of
the Communications Act. Gross revenues under this paragraph means all
gross revenues received by an open video system operator or its
affiliates,
[[Page 28715]]
including all revenues received from subscribers and all carriage
revenues received from unaffiliated video programming providers. Gross
revenues does not include revenues collected by unaffiliated video
programming providers from their subscribers. Any gross revenues fee
that the open video system operator or its affiliate collects from
subscribers shall be excluded from gross revenues. An operator of an
open video system may designate that portion of a subscriber's bill
attributable to the fee as a separate item on the bill.
Sec. 76.1512 Programming information.
(a) An open video system operator shall not unreasonably
discriminate in favor of itself or its affiliates with regard to
material or information (including advertising) provided by the
operator to subscribers for the purpose of selecting programming on the
open video system, or in the way such material or information is
provided to subscribers.
Note to paragraph (a): ``Material or information'' as used in
paragraph (a) of this section means material or information that a
subscriber uses to actively select programming at the point of
program selection.
(b) In accordance with paragraph (a) of this section:
(1) An open video system operator shall not discriminate in favor
of itself or its affiliate on any navigational device, guide or menu;
(2) An open video system operator shall not omit television
broadcast stations or other unaffiliated video programming services
carried on the open video system from any navigational device, guide
(electronic or paper) or menu. For programming services that an open
video system subscriber has not ordered, menus provided by an open
video system operator shall, at a minimum, inform the subscriber how to
access an additional screen that lists the unordered programming
services.
(c) An open video system operator shall ensure that video
programming providers or copyright holders (or both) are able to
suitably and uniquely identify their programming services to
subscribers.
(d) An open video system operator shall transmit programming
identification without change or alteration if such identification is
transmitted as part of the programming signal.
Sec. 76.1513 Dispute resolution.
(a) Complaints. Any party aggrieved by conduct that it alleges to
constitute a violation of the regulations set forth in this part or in
Section 653 of the Communications Act (47 U.S.C. 573) may commence an
adjudicatory proceeding at the Commission. The Commission shall resolve
any such dispute within 180 days after the filing of a complaint.
(b) Alternate dispute resolution. An open video system operator may
not provide in its carriage contracts with programming providers that
any dispute must be submitted to arbitration, mediation, or any other
alternative method for dispute resolution prior to submission of a
complaint to the Commission.
(c) Notice required prior to filing of complaint. Any aggrieved
party intending to file a complaint under this section must first
notify the potential defendant open video system operator that it
intends to file a complaint with the Commission based on actions
alleged to violate one or more of the provisions contained in this part
or in Section 653 of the Communications Act. The notice must be in
writing and must be sufficiently detailed so that its recipient(s) can
determine the specific nature of the potential complaint. The potential
complainant must allow a minimum of ten (10) days for the potential
defendant(s) to respond before filing a complaint with the Commission.
(d) General pleading requirements. Complaint proceedings under this
part are generally resolved on a written record consisting of a
complaint, answer, and reply, but may also include other written
submissions such as briefs and written interrogatories. All written
submissions, both substantive and procedural, must conform to the
following standard:
(1) Pleadings must be clear, concise, and explicit. All matters
concerning a claim, defense or requested remedy, should be pleaded
fully and with specificity;
(2) Pleadings must contain facts which, if true, are sufficient to
constitute a violation of the Communications Act or of a Commission
regulation or order, or a defense to such alleged violation;
(3) Facts must be supported by relevant documentation or affidavit;
(4) Legal arguments must be supported by appropriate judicial,
Commission, or statutory authority;
(5) Opposing authorities must be distinguished;
(6) Copies must be provided of all non-Commission authorities
relied upon which are not routinely available in national reporting
systems, such as unpublished decisions or slip opinions of courts or
administrative agencies; and
(7) Parties are responsible for the continuing accuracy and
completeness of all information and supporting authority furnished in a
pending complaint proceeding. Information submitted, as well as
relevant legal authorities, must be current and updated as necessary
and in a timely manner at any time before a decision is rendered on the
merits of the complaint.
(e) Complaint.
(1) A complaint filed under this part shall contain:
(i) The name of the complainant and each defendant;
(ii) The type of entity that describes complainant (e.g.,
individual, private association, partnership, or corporation), the
address and telephone number of the complainant, and the address and
telephone number of each defendant;
(iii) The name, address and telephone number of complainant's
attorney, if complainant is represented by counsel;
(iv) Citation to the section of the Communications Act and/or the
Commission regulation or order alleged to have been violated;
(v) A complete statement of facts, which, if proven true, would
constitute such a violation;
(vi) Any evidence that supports the truth or accuracy of the
alleged facts;
(vii) Evidence that the open video system operator's conduct at
issue violated a section of the Communications Act and/or Commission
regulation or order.
(viii) If discrimination in rates, terms, and conditions of
carriage is alleged, documentary evidence shall be submitted such as a
preliminary carriage rate estimate or a programming contract that
demonstrates a differential in price, terms or conditions between
complainant and a competing video programming provider or, if no
programming contract or preliminary carriage rate estimate is submitted
with the complaint, an affidavit signed by an officer of complainant
alleging that a differential in price, terms or conditions exists, a
description of the nature and extent (if known or reasonably estimated
by the complainant) of the differential, together with a statement that
defendant refused to provide any further specific comparative
information;
(ix) If a programming contract or a preliminary carriage rate
estimate is submitted with the complaint in support of the alleged
violation, specific references to the relevant provisions therein; and
(x) The specific relief sought.
(2) Every complaint alleging a violation of the open video system
requirements shall be accompanied by a sworn affidavit signed by an
authorized
[[Page 28716]]
officer or agent of the complainant. This affidavit shall contain a
statement that the affiant has read the complaint and that to the best
of the affiant's knowledge, information, and belief formed after
reasonable inquiry, it is well grounded in fact and is warranted under
Commission regulations and policies, or is a good faith argument for
the extension, modification or reversal of such regulations or
policies, and it is not interposed for any improper purpose. If the
complaint is signed in violation of this rule, the Commission upon
motion or its own initiative, shall impose upon the complainant an
appropriate sanction.
(3) The following format may be used in cases to which it is
applicable, with such modifications as the circumstances may render
necessary:
Before The Federal Communications Commission, Washington, D.C.
20554
In the Matter of Complainant
File No. (To be inserted by the Commission) v. Defendant.
[Insert Subject or Nature of Issue: Unjust or Unreasonable
Discrimination in Rates, Terms, and Conditions; Discriminatory
Denial of Carriage]
Open Video System Complaint
To: The Commission.
The complainant (here insert full name of complainant and type
of entity of such complainant):
1. (Here state the complainant's post office address and
telephone number).
2. (Here insert the name, address and telephone number of each
defendant).
3. (Here insert fully and clearly the specific act or thing
complained of, together with such facts as are necessary to give
full understanding of the matter, including relevant legal and
documentary support).
Wherefore, complainant asks (here state specifically the relief
desired).
(Date)-----------------------------------------------------------------
(Name of complainant)--------------------------------------------------
----------------------------------------------------------------------
(Name, address, and telephone number of attorney, if any)
(4) The complaint must be accompanied by appropriate evidence
demonstrating that the required notification pursuant to paragraph (c)
of this section has been made.
(f) Answer.
(1) Any open video system operator upon which a complaint is served
under this section shall answer within thirty (30) days of service of
the complaint, unless otherwise directed by the Commission.
(2) The answer shall advise the parties and the Commission fully
and completely of the nature of any and all defenses, and shall respond
specifically to all material allegations of the complaint. Collateral
or immaterial issues shall be avoided in answers and every effort
should be made to narrow the issues. Any defendant failing to file and
serve an answer within the time and in the manner prescribed by these
rules may be deemed in default and an order may be entered against
defendant in accordance with the allegations contained in the
complaint.
(3) The answer shall state concisely any and all defenses to each
claim asserted and shall admit or deny the averments on which the
adverse party relies. If the defendant is without knowledge or
information sufficient to form a belief as to the truth of an averment,
the defendant shall so state and this has the effect of a denial. When
a defendant intends in good faith to deny only part of an averment, the
answer shall specify so much of it as is true and shall deny only the
remainder. The defendant may make its denials as specific denials of
designated averments or paragraphs, or may generally deny all the
averments except such designated averments or paragraphs as the
defendant expressly admits. When the defendant intends to controvert
all averments, the defendant may do so by general denial.
(4) Averments in a complaint are deemed to be admitted when not
denied in the answer.
(5) An answer to a discrimination complaint shall state the reasons
for any differential in prices, terms or conditions between the
complainant and its competitor, and shall specify the particular
justification relied upon in support of the differential. Any documents
or contracts submitted pursuant to this paragraph (f)(5) may be
protected as proprietary pursuant to paragraph (j) of this section.
(g) Reply. Within twenty (20) days after service of an answer, the
complainant may file and serve a reply which shall be responsive to
matters contained in the answer and shall not contain new matters.
Failure to reply will not be deemed an admission of any allegations
contained in the answer, except with respect to any affirmative defense
set forth therein. Replies containing information claimed by defendant
to be proprietary under paragraph (j) of this section shall be
submitted to the Commission in confidence pursuant to the requirements
of Sec. 0.459 of this chapter and clearly marked ``Not for Public
Inspection.'' An edited version removing all proprietary data shall be
filed with the Commission for inclusion in the public file within five
(5) days from the date the unedited reply is submitted, and shall be
served on the defendant.
(h) Motions. Except as provided in this section, or upon a showing
of extraordinary circumstances, additional motions or pleadings by any
party will not be accepted.
(i) Discovery.
(1) The Commission staff may in its discretion order discovery
limited to the issues specified by the Commission. Such discovery may
include answers to written interrogatories or document production.
(2) The Commission staff may in its discretion direct the parties
to submit discovery proposals, together with a memorandum in support of
the discovery requested. Such discovery requests may include answers to
written interrogatories, document production or depositions. The
Commission staff will then hold a status conference with the parties,
pursuant to paragraph (l) of this section, to determine the scope of
discovery. If the Commission staff determines that extensive discovery
is required or that depositions are warranted, the staff will advise
the parties that the proceeding will be referred to an administrative
law judge in accordance with paragraph (o) of this section.
(j) Confidentiality of proprietary information.
(1) Any materials generated or provided by a party in connection
with the pre-complaint notification procedure required under paragraph
(c) of this section and in the course of adjudicating a complaint under
this provision may be designated as proprietary by that party if the
party believes in good faith that the materials fall within an
exemption to disclosure contained in the Freedom of Information Act
(FOIA), 5 U.S.C. 552(b). Any party asserting confidentiality for such
materials shall so indicate by clearly marking each page, or portion
thereof, for which a proprietary designation is claimed. If a
proprietary designation is challenged, the party claiming
confidentiality will have the burden of demonstrating, by a
preponderance of the evidence, that the material designated as
proprietary falls under the standards for nondisclosure enunciated in
the FOIA.
(2) Materials marked as proprietary may be disclosed solely to the
following persons, only for use in prosecuting or defending a party to
the complaint action, and only to the extent necessary to assist in the
prosecution or defense of the case:
(i) Counsel of record representing the parties in the complaint
action and any support personnel employed by such attorneys;
(ii) Officers or employees of the opposing party who are named by
the opposing party as being directly
[[Page 28717]]
involved in the prosecution or defense of the case;
(iii) Consultants or expert witnesses retained by the parties;
(iv) The Commission and its staff; and
(v) Court reporters and stenographers in accordance with the terms
and conditions of this section.
(3) The persons designated in paragraph (j)(2) of this section
shall not disclose information designated as proprietary to any person
who is not authorized under this section to receive such information,
and shall not use the information in any activity or function other
than the prosecution or defense in the case before the Commission. Each
individual who is provided access to the information by the opposing
party shall sign a notarized statement affirmatively stating, or shall
certify under penalty of perjury, that the individual has personally
reviewed the Commission's rules and understands the limitations they
impose on the signing party.
(4) No copies of materials marked proprietary may be made except
copies to be used by persons designated in paragraph (j)(2) of this
section. Each party shall maintain a log recording the number of copies
made of all proprietary material and the persons to whom the copies
have been provided.
(5) Upon termination of the complaint proceeding, including all
appeals and petitions, all originals and reproductions of any
proprietary materials, along with the log recording persons who
received copies of such materials, shall be provided to the producing
party. In addition, upon final termination of the complaint proceeding,
any notes or other work product derived in whole or in part from the
proprietary materials of an opposing or third party shall be destroyed.
(k) Other required written submissions.
(1) The Commission may, in its discretion, require the parties to
file briefs summarizing the facts and issues presented in the pleadings
and other record evidence. These briefs shall contain the findings of
fact and conclusions of law which that party is urging the Commission
to adopt, with specific citations to the record, and supported by
relevant authority and analysis.
(2) The Commission may require the parties to submit any additional
information it deems appropriate for a full, fair, and expeditious
resolution of the proceeding, including copies of all contracts and
documents reflecting arrangements and understandings alleged to violate
the requirements set forth in the Communications Act and in this part,
as well as affidavits and exhibits.
(3) Any briefs submitted shall be filed concurrently by both the
complainant and defendant at such time as is designated by the staff.
Such briefs shall not exceed fifty (50) pages.
(4) Reply briefs may be submitted by either party within twenty
(20) days from the date initial briefs are due. Reply briefs shall not
exceed thirty (30) pages.
(5) Briefs containing information which is claimed by an opposing
or third party to be proprietary under paragraph (j) of this section
shall be submitted to the Commission in confidence pursuant to the
requirements of Sec. 0.459 of this chapter, and shall be clearly marked
``Not for Public Inspection.'' An edited version removing all
proprietary data shall be filed with the Commission for inclusion in
the public file within five (5) days from the date the unedited version
is submitted and served on opposing parties.
(l) Status conference.
(1) In any complaint proceeding under this part, the Commission
staff may in its discretion direct the attorneys and/or the parties to
appear for a conference to consider:
(i) Simplification or narrowing of the issues;
(ii) The necessity for or desirability of amendments to the
pleadings, additional pleadings, or other evidentiary submissions;
(iii) Obtaining admissions of fact or stipulations between the
parties as to any or all of the matters in controversy;
(iv) Settlement of the matters in controversy by agreement of the
parties;
(v) The necessity for and extent of discovery, including objections
to interrogatories or requests for written documents;
(vi) The need and schedule for filing briefs, and the date for any
further conferences; and
(vii) Such other matters that may aid in the disposition of the
complaint.
(2) Any party may request that a conference be held at any time
after the complaint has been filed.
(3) Conferences will be scheduled by the Commission at such time
and place as it may designate, to be conducted in person or by
telephone conference call.
(4) The failure of any attorney or party, following reasonable
notice, to appear at a scheduled conference will be deemed a waiver and
will not preclude the Commission from conferring with those parties or
counsel present.
(5) During a status conference, the Commission staff may issue oral
rulings pertaining to a variety of interlocutory matters relevant to
the conduct of the complaint proceeding including, inter alia,
procedural matters, discovery, and the submission of briefs or other
evidentiary materials. These rulings will be promptly memorialized in
writing and served on the parties. When such rulings require a party to
take affirmative action not subject to deadlines established by another
provision of this part, such action will be required within ten (10)
days from the date of the written memorialization unless otherwise
directed by the staff.
(m) Specifications as to pleadings, briefs, and other documents;
subscriptions.
(1) All papers filed in a complaint proceeding under this part must
be drawn in conformity with the requirements of Sections 1.49 and 1.50
of this chapter.
(2) All averments of claims or defenses in complaints and answers
shall be made in numbered paragraphs. The contents of each paragraph
shall be limited as far as practicable to a statement of a single set
of circumstances. Each claim founded on a separate transaction or
occurrence and each affirmative defense shall be separately stated to
facilitate the clear presentation of the matters set forth.
(3) The original of all pleadings and submissions by any party
shall be signed by that party, or by the party's attorney. Complaints
must be signed by the complainant. The signing party shall state his or
her address and telephone number and the date on which the document was
signed. Copies should be conformed to the original. Except when
otherwise specifically provided by rule or statute, pleadings need not
be verified. The signature of an attorney or party shall be a
certificate that the attorney or party has read the pleading, motion,
or other paper; that to the best of his or her knowledge, information
and belief formed after reasonable inquiry, it is well grounded in fact
and is warranted by existing law or a good faith argument for the
extension, modification or reversal of existing law; and that it is not
interposed for any improper purpose. If any pleading or other
submission is signed in violation of this provision, the Commission
shall upon motion or upon its own initiative impose upon the party an
appropriate sanction. Where the pleading or submission is signed by
counsel, the provisions of Sections 1.52 and 1.24 of this chapter shall
also apply.
(n) Copies; service.
(1) The complainant shall file an original plus three copies of the
complaint with the Commission.
[[Page 28718]]
However, if the complaint is addressed against multiple defendants,
complainant shall provide three additional copies of the complaint for
each additional defendant.
(2) An original plus two copies shall be filed of all pleadings and
documents other than the complaint.
(3) The complainant shall serve the complaint on each defendant at
the same time that it is filed at the Commission.
(4) All subsequent pleadings and briefs, as well as all letters,
documents or other written submissions, shall be served by the filing
party on all other parties to the proceeding, together with proof of
such service in accordance with the requirements of Sec. 1.47 of this
chapter.
(5) The parties to any complaint proceeding brought pursuant to
this section may be required to file additional copies of any or all
papers filed in the proceeding.
(o) Referral to administrative law judge.
(1) After reviewing the complaint, answer and reply, and at any
stage of the proceeding thereafter, the Commission staff may, in its
discretion, designate any complaint proceeding for an adjudicatory
hearing before an administrative law judge.
(2) Before designation for hearing, the staff shall notify, either
orally or in writing, the parties to the proceeding of its intent to so
designate, and the parties shall be given a period of ten (10) days to
elect to resolve the dispute through alternative dispute resolution
procedures, or to proceed with an adjudicatory hearing. Such election
shall be submitted in writing to the Commission.
(3) Unless otherwise directed by the Commission, or upon motion by
the Cable Services Bureau Chief, the Cable Services Bureau Chief shall
not be deemed to be a party to a complaint proceeding designated for a
hearing before an administrative law judge pursuant to this paragraph.
(p) Petitions for reconsideration. Petitions for reconsideration of
interlocutory actions by the Commission's staff or by an administrative
law judge will not be entertained. Petitions for reconsideration of a
decision on the merits made by the Commission's staff should be filed
in accordance with Secs. 1.104 through 1.106 of this chapter.
(q) Interlocutory review.
(1) Except as provided below, no party may seek review of
interlocutory rulings until a decision on the merits has been issued by
the staff or administrative law judge.
(2) Rulings listed in this paragraph are reviewable as a matter of
right. An application for review of such ruling may not be deferred and
raised as an exception to a decision on the merits:
(i) If the staff's ruling denies or terminates the right of any
person to participate as a party to the proceeding, such person, as a
matter of right, may file an application for review of that ruling:
(ii) If the staff's ruling requires production of documents or
other written evidence, over objection based on a claim of privilege,
the ruling on the claim of privilege is reviewable as a matter of
right; and/or
(iii) If the staff's ruling denies a motion to disqualify a staff
person from participating in the proceeding, the ruling is reviewable
as a matter of right.
(r) Expedited review.
(1) Any party to a complaint proceeding under this part aggrieved
by any decision on the merits issued by the staff pursuant to delegated
authority may file an application for review by the Commission in
accordance with Section 1.115 of this chapter.
(2) Any party to a complaint proceeding aggrieved by any decision
on the merits by an administrative law judge may file an appeal of the
decision directly with the Commission, in accordance with Sec. 1.276(a)
and Secs. 1.277 (a) through (c) of this chapter, except that unless a
stay is granted by the Commission, the decision by the administrative
law judge will become effective upon release and will remain in effect
pending appeal.
(s) Frivolous complaints. It shall be unlawful for any party to
file a frivolous complaint with the Commission alleging any violation
of this part. Any violation of this paragraph shall constitute an abuse
of process subject to appropriate sanctions.
(t) Statute of limitations. Any complaint filed pursuant to this
subsection must be filed within one year of the date on which the
following acts or conduct occur which form the basis of the complaint:
(1) The open video system operator enters into a contract with the
complainant that the complainant alleges to violate one or more of the
rules contained in this part; or
(2) The open video system operator offers to carry programming for
the complainant pursuant to terms that the complainant alleges to
violate one or more of the rules contained in this part; or
(3) The complainant has notified an open video system operator that
it intends to file a complaint with the Commission based on a request
for such operator to carry the complainant's programming on its open
video system that has been denied or unacknowledged, allegedly in
violation of one or more of the rules contained in this part.
(u) Remedies for violations.
(1) Remedies authorized. Upon completion of such adjudicatory
proceeding, the Commission shall order appropriate remedies, including,
if necessary, the requiring carriage, awarding damages to any person
denied carriage, or any combination of such sanctions. Such order shall
set forth a timetable for compliance, and shall become effective upon
release.
(2) Additional sanctions. The remedies provided in paragraph (u)(1)
of this section are in addition to and not in lieu of the sanctions
available under Title VI or any other provision of the Communications
Act.
Sec. 76.1514 Bundling of video and local exchange services.
An open video system operator may offer video and local exchange
services for sale in a single package at a single price, provided that:
(a) the open video system operator, where it is the incumbent local
exchange carrier, may not require that a subscriber purchase its video
service in order to receive local exchange service; and
(b) Any local exchange carrier offering such a package must impute
the unbundled tariff rate for the unregulated service.
[FR Doc. 96-14238 Filed 6-4-96; 8:45 am]
BILLING CODE 6712-01-P
