[Federal Register Volume 59, Number 164 (Thursday, August 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20915]
[[Page Unknown]]
[Federal Register: August 25, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MM Docket No. 92-265; FCC 94-203]
Cable TV Act of 1992--Development of Competition and Diversity in
Video Programming; Distribution and Carriage
agency: Federal Communications Commission.
action: Final rule; petition for reconsideration.
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summary: By this Memorandum Opinion and Order (``MO&O'') the Commission
amends one of its rules implementing the Cable Television Consumer
Protection and Competition Act of 1992 (``1992 Cable Act''). The MO&O
amends the Commission's rule on adjudicatory carriage agreement
complaints to specifically afford standing to any multichannel video
programming distributor (``MVPD'') aggrieved by a violation of Section
616 of the 1992 Cable Act. The intent of this action is to prevent
anticompetitive behavior by cable operators and multichannel video
programming distributors.
effective date: September 26, 1994.
for further information contact: Nancy Markowitz or Diane Hofbauer,
Cable Services Bureau, (202) 416-0800.
supplementary information: This is a synopsis of the Commission's MO&O,
adopted August 2, 1994, and released August 5, 1994. The full text of
the MO&O is available for inspection and copying during regular
business hours in the FCC Reference Center (Room 239), 1919 M Street,
NW., Washington, DC. The complete text of this decision also may be
purchased from the Commission's duplication contractor, International
Transcription Service, Inc., (202) 857-3800, 2100 M Street NW., Suite
140, Washington, DC 20037.
Synopsis of Memorandum Opinion and Order
1. In furtherance of the Commission's implementation of the
carriage agreement provisions of the Cable Television Consumer
Protection and Competition Act of 1992 (``1992 Cable Act''), the
Commission adopted a Memorandum Opinion and Order reconsidering one of
its regulations adopted in Implementation of Sections 12 and 19 of the
Cable Television Consumer Protection and Competition Act of 1992--
Development of Competition and Diversity in Video Programming
Distribution and Carriage, MM Docket No. 92-265 (Oct. 22, 1993), 58 FR
60390 (Nov. 16, 1993), 9 FCC Rcd 2624 (1993); 47 CFR 76.1302. The
action disposes of a petition for reconsideration filed by the Wireless
Cable Association (``WCA'') requesting that the Commission amend its
rules, to afford standing specifically to any multichannel video
programming distributor (``MVPD'') aggrieved by an alleged violation of
Section 616 of the 1992 Cable Act to file a complaint pursuant to 47
CFR 76.1302(a). WCA's petition was supported by Liberty Cable Company
and GTE Service Corporation and was opposed by Tele-Communications,
Inc. and Liberty Media Corporation.
2. Section 616 of the 1992 Cable Act, 47 U.S.C. 536, governs
agreements between cable operators--or other MVPDs--and the programming
services they distribute, and directs the Commission to establish
regulations that prevent cable operators or other MVPDs from entering
into carriage agreements that condition carriage of a vendor's
programming on particular concessions.
3. Section 616(a) (1), (2) and (3), 47 U.S.C. 536(a) (1), (2), (3)
specifically directed the Commission to establish regulations
prohibiting MVPDs from: (1) Requiring a financial interest in the
programming services as a condition of carriage; (2) coercing a
programming vendor to provide exclusive rights as a condition of
carriage, or retaliating against such vendor for failure to grant
exclusivity; and (3) discriminating in carriage terms between
affiliated and nonaffiliated programming vendors.
4. WCA claimed that Sec. 76.1302 of the Commission's rules is too
narrowly drafted and could be interpreted to limit standing solely to
programming vendors aggrieved by violations of the carriage agreement
provisions, thus precluding a complaint from an MVPD aggrieved by the
same anticompetitive behavior. WCA contended that if the rule was so
interpreted, the purpose of Section 616 would be frustrated because a
multiple system operator with sufficient market power over a
programming vendor to coerce exclusivity would be able to employ the
same market power to secure the programming vendor's silence. Opponents
of the petition for reconsideration contended, inter alia, that Section
616 was intended solely to benefit unaffiliated programming vendors and
that Section 628 of the 1992 Cable Act (47 U.S.C. 548), and the
Commission's program access rules, provide the appropriate avenue of
redress for MVPDs.
4. The 1992 Cable Act and its legislative history\1\ indicate that
Congress found that the cable television industry is highly
concentrated with a high degree of vertical integration of cable
systems and programmers.\2\ When drafting the 1992 Cable Act, Congress
was concerned that increased horizontal concentration and vertical
integration in the cable industry had created an imbalance of power
between cable operators and program vendors. Congress concluded that
vertically integrated cable operators have the incentive and ability to
favor affiliated programming vendors over unaffiliated programming
vendors with respect to granting carriage on their system.\3\ Congress
also found that, in return for carriage on the cable system, some cable
operators have required certain non-affiliated programming vendors to
grant them certain concessions.\4\
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\1\House Committee on Energy and Commerce, H.R. Rep. No. 102-
628, 102d Cong., 2d Sess. (1992) (``House Report''); Senate
Committee on Commerce, Science, and Transportation, S. Rep. No. 102-
92, 102d Cong., 1st. Sess. (1991) (``Senate Report''); House
Committee on Energy and Commerce, H.R. Rep. No. 102-862, 102d Cong.,
2d Sess. (1992), reprinted in Cong. Rec. H8308 (Sept. 14, 1992)
(``Conference Report'').
\2\Senate Report at 25.
\3\Senate Report at 24; House Report at 41-45.
\4\Senate Report at 24; House Report at 42.
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5. Congress sought to address these concerns by including Sections
19 and 12 in the 1992 Cable Act, which added Sections 628 and 616,
respectively, to the Communications Act of 1934, as amended. Section
628 (47 U.S.C. 548), which contains the program access provisions,
primarily restricts the activities of vertically integrated programming
vendors and cable operators with respect to other, unaffiliated MVPDs.
Section 616 (47 U.S.C. 536), in contrast, contains the carriage
agreement provisions that were designed to restrict the activities of
cable operators and other MVPDs when dealing with unaffiliated
programming vendors.
6. The underlying premise of both the program access and carriage
provisions of the 1992 Cable Act was to increase competition to
franchised cable operators from other MVPDs, reducing the undue market
power held in noncompetitive markets by cable operators as compared to
that of consumers and video programming vendors.\5\ The legislative
history shows that Congress routinely treated Sections 616 and 628 in
concert, thereby confirming its concern for the impact of
anticompetitive conduct on programming vendors and on emerging MVPDs'
access to programming.
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\5\See, e.g., 1992 Cable Act section 2(a)(2).
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6. The Commission has determined that it is in the public interest
to grant WCA's petition and to amend Sec. 76.1302 of the Commission's
rules to specifically afford standing to aggrieved MVPDs to file
complaints under Section 616 of the 1992 Cable Act. Based on the
record, the criteria set forth in the 1992 Cable Act and its
legislative history, the Commission believes that it serves the public
interest if all potential violations of Section 616 are brought to the
Commission's attention. Moreover, the Commission believes that the
statutory purpose of Section 616 is further served if the Commission is
made aware of such violations through complaints by both programming
vendors and MVPDs alike. The mere threat of potential complaints by
allegedly aggrieved competing distributors is an added check on
potential anticompetitive behavior by MVPDs with respect to carriage
agreements. While the Commission believes that this approach is
entirely consistent with the purpose and intent of the 1992 Cable Act,
it also is well within the Commission's general authority in Sections 4
(i) and (j) of the Communications Act to amend the rules in this
manner.\6\
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\6\Section 4(i) provides, in part, that the Commission ``may
perform any and all acts, make such rules and regulations, and issue
such orders, not inconsistent with this Act, as may be necessary in
the execution of its functions.'' Section 4(j) provides, in part,
that the ``Commission may conduct its proceedings in such manner as
will best conduce to the proper dispatch of business and to the ends
of justice.'' 47 U.S.C. 154(i), (j).
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7. The Commission emphasized, however, that all complaints filed
pursuant to Section 616 must be based on documentary evidence or
testimony in the form of affidavits, (signed by an authorized
representative or agent of the complaining party), and may not merely
reflect conjecture or allegations based only on information and belief.
8. The Commission stated that it intends to strictly enforce the
prohibition in Sec. 76.1302(q) of the Commission's rules (47 CFR
76.1302(a)) against the filing of frivolous complaints. Thus, the
Commission believes that this rule affords adequate protection against
any potential frivolous complaints filed as a result of its decision to
expand the scope of parties with standing to file carriage agreement
complaints pursuant to Section 616.
List of Subjects in 47 CFR Part 76
Cable television.
Federal Communications Commission.
LaVera F. Marshall,
Acting Secretary.
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 continues to read as follows:
Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47
U.S.C. Secs. 152, 153, 154, 301, 303, 307, 308, 309, 532, 533, 535,
542, 543, 552 as amended, 106 Stat. 1460.
2. Section 76.1302 is amended by revising the introductory
paragraph and paragraphs (a), (r) and (s) to read as follows:
Sec. 76.1302 Adjudicatory Proceedings
Any video programming vendor or multichannel video programming
distributor aggrieved by conduct that it alleges to constitute a
violation of the regulations set forth in this subpart may commence an
adjudicatory proceeding at the Commission.
(a) Notice required. Any aggrieved video programming vendor or
multichannel video programming distributor intending to file a
complaint under this section must first notify the defendant
multichannel video programming distributor that it intends to file a
complaint with the Commission based on actions alleged to violate one
or more of the provisions contained in Sec. 76.1301. The notice 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.
(r) Statute of limitations. Any complaint filed pursuant to this
paragraph must be filed within one year of the date on which one of the
following events occurs:
(1) The multichannel video programming distributor enters into a
contract with a video programming vendor that a party alleges to
violate one or more of the rules contained in this section; or
(2) The multichannel video programming distributor offers to carry
the video programming vendor's programming pursuant to terms that a
party alleges to violate one or more of the rules contained in this
section; or
(3) A party has notified a multichannel video programming
distributor that it intends to file a complaint with the Commission
based on violations of one or more of the rules contained in this
section.
(s) Remedies for violations.
(1) Remedies authorized. Upon completion of such adjudicatory
proceeding, the Commission shall order appropriate remedies, including,
if necessary, mandatory carriage of a video programming vendor's
programming on defendant's video distribution system, or the
establishment of prices, terms, and conditions for the carriage of a
video programming vendor's programming. Such order shall set forth a
timetable for compliance, and shall become effective upon release,
unless any order of mandatory carriage would require the defendant
multichannel video programming distributor to delete existing
programming from its system to accommodate carriage of a video
programming vendor's programming. In such instances, if the defendant
seeks review of the staff or administrative law judge decision, the
order for carriage of a video programming vendor's programming will not
become effective unless and until the decision of the staff or
administrative law judge is upheld by the Commission. If the Commission
upholds the remedy ordered by the staff or administrative law judge in
its entirety, the defendant will be required to carry the video
programming vendor's programming for an additional period of time equal
to the time elapsed between the staff or administrative law judge
decision and the Commission's ruling, on the terms and conditions
approved by the Commission.
(2) Additional sanctions. The remedies provided in paragraph (s)(1)
of this section are in addition to and not in lieu of the sanctions
available under title V or any other provision of the Communications
Act.
[FR Doc. 94-20915 Filed 8-24-94; 8:45 am]
BILLING CODE 6712-01-M
