Cable Act of 1992Must-Carry and Retransmission Consent Provisions

Federal RegisterDec 5, 1994

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[MM Docket No. 92-259; FCC 94-251]

Cable Act of 1992--Must-Carry and Retransmission Consent

Provisions

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In response to petitions for reconsideration, and in order to

complete the implementation of the must-carry and retransmission

consent provisions of the Cable Television Consumer Protection and

Competition Act of 1992 and to clarify the obligations of cable

operators and broadcasters, this Memorandum Opinion and Order amends

the Commission's rules regarding must-carry and retransmission consent.

EFFECTIVE DATE: The stay of Sec. 76.62(a) and Sec. 76.64(e) is lifted

and the revisions of those paragraphs is effective January 4, 1995.

Other rule provisions of Part 76 are effective January 4, 1995. Rule

provisions of Part 73 shall be effective upon approval from OMB. We

will issue a notice at a later date stating that such approval has been

granted.

FOR FURTHER INFORMATION CONTACT:

Elizabeth W. Beaty or Meryl S. Icove, Cable Services Bureau, (202) 416-

0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's

Memorandum Opinion and Order in MM Docket 92-259, FCC 94-251, adopted

September 28, 1994, and released November 4, 1994. The complete text of

this document is available for inspection and copying during normal

business hours in the FCC Reference Center, 1919 M St., N.W.,

Washington, D.C., and also may be purchased from the Commission's copy

contractor, International Transcription Service, (ITS), at 2100 M St.,

N.W., Washington, D.C. 20037, (202) 857-3800.

Synopsis of the Memorandum Opinion and Order

I. Introduction

1. This Memorandum Opinion and Order addresses issues raised in

petitions for reconsideration of our Report and Order adopted March 11,

1993, 58 FR 17350 (4/2/93) which established rules to implement the

mandatory television broadcast signal carriage (``must-carry'') and

retransmission consent provisions of the Cable Television Consumer

Protection and Competition Act of 1992 (``1992 Cable Act''). In a

Clarification Order adopted on May 28, 1993, 58 FR 32449 (6/10/93), we

addressed specific concerns raised in these petitions relating to

signal quality, copyright indemnification and translator ownership. In

an Order adopted on July 15, 1993, 58 FR 40366 (7/28/93), we addressed

additional concerns relating to carriage rights, to the failure of

broadcast stations to elect either must-carry or retransmission consent

status, and to the channel position for such stations. On October 5,

1993, we adopted a Stay Order, 58 FR 53429 (10/15/93), which stayed two

provisions of the retransmission consent rules, with respect to VHF/UHF

antenna ownership and carriage in the entirety of broadcast signals,

pending our resolution of those issues in this proceeding. In this

Memorandum Opinion and Order we will address all remaining issues

raised in the petitions for reconsideration, as well as the outstanding

issues from the Stay Order. We will also take this opportunity, on our

own motion, to clarify certain other issues raised in the Report and

Order.

2. We note that the constitutionality of the must-carry provisions

of the 1992 Cable Act were challenged before the Supreme Court. In

Turner Broadcasting Systems, Inc. v. FCC, a special three-judge panel

of the District Court found the must-carry provisions constitutional.

On appeal, the Supreme Court vacated the decision and remanded the case

back to the three-judge panel for further proceedings. While the case

is pending, the must-carry provisions of the 1992 Cable Act remain in

effect, as do the Commission's must-carry rules.

II. Must-Carry Regulations

A. Carriage of Local Noncommercial Educational Television Stations

1. Definition of a Qualified Noncommercial Station.

3. Section 615(l)(1) provides that a local noncommercial

educational television (``NCE'') station qualifies for must-carry

rights if it is licensed by the Commission as an NCE station and if it

is owned and operated by a public agency, nonprofit foundation, or

corporation or association that is eligible to receive a community

service grant from the Corporation for Public Broadcasting.\1\ An NCE

station is also considered qualified if it is owned and operated by a

municipality and transmits predominantly noncommercial programs for

educational purposes.\2\ For purposes of must-carry rights, an NCE

station is considered local if its community of license is within 50

miles of, or its signal places a Grade B contour over, the principal

headend of the cable system. This definition includes the translator of

any NCE station with five watts or higher power serving the franchise

area, a full-service station or translator licensed to a channel

reserved for noncommercial educational use, and such stations and

translators operating on channels not so reserved as the Commission

determines are qualified NCE stations.

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\1\All references to Section 614, Section 615 and Section 325

are references to those sections of the Communications Act of 1934,

as amended by the 1992 Cable Act, Sections 4, 5 and 6.

\2\In defining a qualified noncommercial educational television

station, Sec. 76.55(a)(2) incorrectly refers to Sec. 73.612 rather

than Sec. 73.621. We are revising Sec. 76.55(a)(2) to refer to

Sec. 73.621.

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4. The staff has received informal inquiries requesting

clarification as to when a translator is ``serving the franchise area''

of the cable system. Because the service area of a translator differs

from that of a full power broadcast station, we believe that guidance

should be provided to assist interested parties in determining whether

a translator serves the franchise area of the cable system. We believe

it appropriate to adopt a standard based on coverage and contour, which

has been used in the past and which should be easily identifiable.

Therefore, for purposes of a translator serving the cable system's

franchise area, the coverage area of such translator shall be its

predicted protected contour as specified in Sec. 74.707 of our rules.

2. Signal Carriage Obligations.

5. In the Report and Order, we indicated that Section 615(b)

requires cable systems to carry any qualified local NCE television

station requesting carriage. Systems with 12 or fewer activated

channels must carry the signal of one qualified local NCE station.

Systems with 13 to 36 activated channels must carry at least one

qualified local NCE station, but need not carry more than three such

stations. Cable systems with more than 36 activated channels are

generally required to carry all NCE stations requesting carriage. If a

system with fewer than 36 activated channels operates beyond the

presence of a qualified local NCE station, it is required to import and

carry a qualified NCE station. In addition, cable systems must continue

to provide carriage to all qualified local NCE television stations

whose signals were carried on their systems as of March 29, 1990,

regardless of the proximity of those stations to the system's principal

headend.

6. First, on our own motion, we clarify the carriage requirements

of a system with more than 36 activated channels. The 1992 Cable Act

states that systems with more than 36 channels must carry the signal of

all NCE stations requesting carriage, with one exception: systems with

more than 36 channels are not required to carry an additional local NCE

station if the programming of such station substantially duplicates the

programming of a qualified local NCE station already being carried. It

has come to our attention that Sec. 76.56(a)(1)(iii) of the

Commission's rules as adopted in the Report and Order has been

interpreted by some cable operators to require that only three stations

need be carried. However, with respect to systems with more than 36

channels, we clarify that the reference to the number three is a

minimum, not a maximum number. A system with more than 36 channels must

carry all NCE stations requesting carriage, but is not required to

carry more than three NCE stations if the additional station

substantially duplicates the signal of NCE stations already carried by

the system. Section 76.56(a)(1)(iii) is being revised accordingly.

7. Second, we emphasize that the requirement in Section 615(c) to

continue carriage of stations carried as of March 29, 1990 applies only

to qualified local NCE television stations and does not apply to a non-

local NCE television station which was being imported as of that date.

A cable system which was carrying a non-local NCE station in excess of

its mandatory carriage requirements is permitted to drop that station,

subject to giving appropriate notice. However, if a cable system which

would be required to import a NCE signal pursuant to Section 615

(b)(3)(B) or (b)(2)(B) was importing a non-local qualified NCE station

on March 29, 1990, the system is required to continue carriage of such

station. Prior carriage of the non-local NCE station generally

indicates that a good quality signal is received at the cable system's

headend. In addition, where the cable system voluntarily had been

importing such signal prior to March 29, 1990, the continued carriage

of such station will not result in additional copyright liability for

the cable system. In the event a local NCE station subsequently becomes

qualified, the cable operator may drop the distant signal (subject to

notification requirements) and substitute the qualified local NCE

station. Section 76.56(a)(5) is being revised accordingly.

8. Although the Act generally does not require copyright liability

to be paid by a cable operator for the carriage of local NCE station

signal added after March 29, 1990, in the case of importation, the non-

local NCE station has neither must-carry nor retransmission rights. We

do not believe it appropriate for a non-local NCE station which is

being imported to be required to reimburse the cable operator for

system can recover such costs as part of the basic service tier rate,

and we believe that this is the appropriate manner for dealing with

such costs.

B. Carriage of Local Commercial Television Stations

1. General Signal Carriage Requirements.

9. Small System Exception. Section 614(a) requires carriage of

local commercial television stations and qualified low power television

stations. Section 614(b) establishes the number of signals which must

be carried by cable systems based on their channel capacity. In

particular, it provides that a cable system with 12 or fewer usable

activated channels must carry the signals of at least three local

commercial television stations. Such a system is exempt from any

requirements of Section 614, however, if it serves 300 or fewer

subscribers, as long as it does not delete from carriage the signal of

any broadcast television station. In the Report and Order, the

Commission concluded that, under this exception, a system must not

delete any station it carried on October 5, 1992.

10. Although the language of the text accurately reflects this

intention, the Community Antenna Television Association (``CATA'')

points out that the related rule is misleading because it implies that

the system must have 300 or fewer subscribers as of October 5, 1992. We

are revising Sec. 76.56(b)(1) of our rules to reflect that, at any time

that a cable system with 12 or fewer activated channels serves 300 or

fewer subscribers, it is exempt from the mandatory carriage

requirements under Section 614, as long as it does not delete any

signal of a broadcast television station which was carried on that

system on October 5, 1992.

11. Definition of Local Commercial Television Station. Section

614(h)(1)(A) defines a local commercial television station for the

purpose of the must-carry rules as ``any full power television

broadcast station, other than a qualified noncommercial television

station within the meaning of Section 615(l)(1), licensed and operating

on a channel regularly assigned to its community by the Commission

that, with respect to a particular cable system, is within the same

television market as the cable system.'' In the Report and Order, we

inadvertently defined local commercial television station as ``any full

power commercial television station * * *'', which had the unintended

effect of excluding non-qualified noncommercial stations from the

definition. A non-qualified NCE station is any NCE station which does

not meet the qualification criteria established in Section 615(g). Such

a station is not entitled to must-carry rights under that section. We

believe that the definition of local commercial television station

contained in the 1992 Cable Act clearly includes non-qualified NCE

stations; the definition includes all stations other than ``qualified

NCE stations.'' Consistent with the language of the 1992 Cable Act, we

determine that NCE stations which are not ``qualified'' NCE stations

for must-carry purposes may assert must-carry rights under Section 614

within their local market, just like any other broadcast station.\3\

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\3\We interpret local commercial television station to include

stations operating under a valid construction permit.

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12. Availability and Identification of Must-Carry Signals. Section

614(b)(7) provides that all must-carry signals shall be provided to

every subscriber of a cable system and shall be viewable via cable on

all television receivers of a subscriber which are connected to a cable

system by a cable operator or for which the cable operator provides a

connection. In the Report and Order we declined to grant a request to

provide a special exception for commercial subscribers (e.g., hotels,

hospitals) that receive specially designed channel line-ups. We stated

our belief that the 1992 Cable Act is clear in its application of

Section 614(b)(7) to every subscriber of a cable system, that it grants

no authority to exempt a specific class of cable subscribers from the

carriage requirements, and that there is no reason to believe that such

commercial subscribers are not interested in receiving local broadcast

signals.

13. On reconsideration, we note that the must-carry provisions do

not distinguish between commercial and residential viewers. Congress

made clear its intent that all subscribers have access to local

commercial broadcast signals. We do not believe that petitioners have

presented sufficient cause to change our earlier interpretation of the

1992 Cable Act. Therefore, we affirm that all subscribers must have

access to these signals on all television sets connected by the cable

operator or for which the cable operator provides a connection.

14. It is our understanding that the on-channel carriage of some

UHF signals has resulted in situations where a converter box supplied

by a cable operator does not contain the necessary channel capacity to

permit a subscriber to access a UHF must-carry signal through the

converter. For example, a converter may supply channels 2-36 while the

must-carry station is on channel 55. Where a cable operator chooses to

provide subscribers with signals of must-carry stations through the use

of converter boxes supplied by the cable operator, the converter boxes

must be capable of passing through all of the signals entitled to

carriage on the basic service tier of the cable system, not just some

of them. In addition, any converter boxes provided for this purpose

must be provided at rates in accordance with Section 623(b)(3).

Therefore, in a situation where the subscriber's converter is supplied

by the cable operator, and is incapable of receiving all signals as

required by Section 614(b)(7), the cable operator must make provision

for a converter which is capable of providing these signals.\4\ If it

is necessary to replace the converter, the subscriber must not be

required to pay additional sums nor to pay for the installation.\5\ As

discussed below, we have provided a mechanism for relief for cable

systems which cannot meet the on-channel requests of must-carry

stations. A decision not to seek such relief may not be used to

contravene the directives of the 1992 Cable Act.

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\4\See Memorandum Opinion and Order (CSR-3903-M) (Complaint of

WLIG-TV, Inc. against Cablevision Systems Corporation), DA-93-1365

(released November 10, 1993), in which the Mass Media Bureau noted

that converter boxes provided by the cable system must be capable of

transmitting all the signals entitled to mandatory carriage on the

basic tier, and required Cablevision, because it was in the midst of

an upgrade of its system, to switch station WLIG to a channel

receivable by all subscribers, without the necessity of an

additional converter box, during the rebuilding of its system.

\5\We note that where the cable operator authorizes subscribers

to install additional receiver connections, but does not provide the

subscriber with such connections, or with the equipment and

materials for such connections, the operator must notify such

subscribers of all broadcast stations carried on the cable system

which cannot be viewed via cable without a converter box and the

operator must offer to sell or lease such a converter box to such

subscribers at rates in accordance with section 623(b)(3).

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2. Definition of a Television Market.

15. Use of ADI Markets and the Home County Exception. Under the

1992 Cable Act, a local commercial television station is entitled to

must-carry status on all cable systems located in the same television

market as the cable system. The 1992 Cable Act states that the

television market shall be determined pursuant to Sec. 73.3555(d)(3)(i)

of our rules, which in turn defines a television market in terms of the

Area of Dominant Influence (``ADI''), as defined by Arbitron.\6\ In the

Report and Order, the Commission noted that each county in the

contiguous United States is assigned by Arbitron exclusively to one

ADI, and that each broadcast station licensed to a community located in

an ADI is considered local throughout that ADI. The Commission

established one exception to that rule, determining that each broadcast

station will also be considered a must-carry station in its home

county, even if that station is assigned to a different ADI from that

of its home county (the ``home county exception'').

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\6\We note that Arbitron has cancelled its television ratings

service. However, the decision will not have an impact on the use of

Arbitron-designated ADIs until the next must-carry/retransmission

consent election which must take place by October 1, 1996. We will

address this issue sufficiently before that date.

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16. The Administrative Procedure Act (``APA'') requires an agency,

when issuing a general notice of proposed rule making, to provide the

public with ``either the terms or the substance of a proposed rule or a

description of the subject and issues involved.'' The APA, however,

``does not require an agency to publish in advance every precise

proposal which it may ultimately adopt as a rule.''

17. The Notice, 57 FR 56298 (11/27/92), set forth the 1992 Cable

Act's direction that such markets would be determined primarily in the

manner provided in Sec. 73.3555(d)(3)(i) of the Commission's rules,

(which section uses Arbitron-defined ADIs), and specifically sought

comment from the public concerning the Congressionally recognized need

for adjustments to or modifications of television markets.\7\ The

Commission specifically stated that ``it may determine that particular

communities are part of more than one television market,'' and further

explained that it would act upon written requests to add or delete

communities to a station's market ``to better reflect market realities

and effectuate the purposes of this Act.'' We believe that it was

apparent that the Commission was likely to receive comments and

suggestions regarding methods to assure that television stations' must-

carry markets, both generally and in individual cases, best reflect

market realities and the objective of localism underlying broadcast

signal carriage obligations. While the Notice did not specifically seek

comment on the home county exception, we believe that the home county

exception is a ``logical outgrowth'' of the Notice.

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\7\Section 614(h)(1)(C)(i) states that a broadcasting station's

market shall be determined in the manner provided in

Sec. 73.3555(d)(3)(i) of the Commission's rules, except that the

Commission may include or exclude additional communities to better

effectuate the purposes of Section 614. 47 U.S.C. 534(h)(1)(C)(i).

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18. The home county exception does not violate either the spirit or

letter of the 1992 Cable Act. Specifically, we disagree with the

proposition that although a television station's must-carry rights are

defined primarily by Arbitron ADIs, there can be no must-carry rights

beyond the ADI to which a station is assigned by Arbitron. Section

614(h)(1)(C)(i) recognizes a potential, but easily corrected,

deficiency in the use of Arbitron ADIs to define a station's must-carry

market. We find no basis to presume that the Commission may not adjust

ADIs generally to ensure that stations have must-carry rights in those

areas where their service is appropriately ``local.'' We agree with

Granite that adoption of the home county exception is separate and

apart from the procedure established to make individual station market

adjustments based on particular situations.

19. Modification of ADI Markets. As noted in the Report and Order,

the 1992 Cable Act permits the Commission to add or subtract

communities from a television station's market to better reflect

marketplace conditions or to promote the goal of localism underlying

the signal carriage provisions. In its petition, INTV requests that the

Commission add or subtract a community for all stations in the market,

not for an individual station. INTV suggests that upon the addition of

a community to a market, every station in the community would attain

must-carry rights in that market.

20. The Commission has already addressed this subject in the Report

and Order in response to parties' contentions that ADI modification

should be made on a community, rather than on a station, basis. Both

the 1992 Cable Act and our rules require, for each broadcast station,

an evidentiary showing from an interested party, with opportunity for

comment. INTV's request would not meet this requirement and therefore

must be rejected. We reiterate our statement in the Report and Order

that we will accept joint filings by a group of stations or a single

request from a cable operator for changes for more than one station

licensed to the same community, so long as the submitted information

demonstrates that each station is entitled to have its market modified.

The relief procedures will ensure that the 1992 Cable Act's objectives

of promoting localism and reflecting market realities are achieved.\8\

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\8\The same logic applies to a single station requesting the

addition of multiple communities.

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21. As noted above, Section 614(h)(1)(C) directs the Commission,

when considering ADI modification requests, to promote localism by

taking into account the four factors listed in that section. Press

Broadcasting Company, Inc. (``Press''), the licensee of WKCF (TV),

Clermont, Florida, seeks clarification or partial reconsideration of

the types of evidence the Commission has indicated that it will

consider in assessing proposed changes in a station's must-carry

market.

22. We clarify that the two factors mentioned in the Report and

Order are merely examples of the types of evidence that might be

considered in a request to modify an ADI. The Commission purposely did

not restrict the types of evidence that may be used to demonstrate that

a station's must-carry market should be modified. The Commission

declined to prejudge the importance of any of the factors set forth in

the statute, noting that each case will be unique. Accordingly, we note

that the factors suggested by Press may be employed by parties to show

the appropriateness of altering a station's must-carry market, although

the importance of such factors may differ from one situation to the

next.\9\

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\9\We note that, in stating that a station may demonstrate that

it is located close to the community in terms of mileage, a station

may present evidence, as suggested by Press, regarding the distance

between the cable community and the station's community of license,

transmitter, or other aspect of the station's operation.

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23. Section 76.51 Top 100 Market List. Section 614(f) of the 1992

Cable Act directs the Commission to issue regulations that include

revisions needed to update the list of top 100 television markets and

their designated communities contained in Sec. 76.51. Although the

Notice sought guidance on how to fulfill this requirement, the comments

were general in nature and did not offer a mechanism for revising the

top 100 market list, including criteria for determining when a city of

license should become a designated community in a television market.

Accordingly, the Commission concluded in the Report and Order that a

wholesale revision of Sec. 76.51 was unnecessary and stated that it

would only update the existing list by adding those designated

communities requested by parties providing specific evidence that a

particular market change is warranted. The Commission made three

specific market modifications, and stated that further revisions to

this list would be made on a case-by-case basis. The Commission stated

that requests for modification should demonstrate ``commonality''

between the proposed community to be added to a market designation and

the market as a whole, and that such requests would be made in

accordance with the factors in Section 614(h)(1)(C) and the related

rules.

24. A number of broadcast television licensees in Columbus, Ohio

filed petitions for reconsideration respecting the addition of

Chillicothe to the Columbus, Ohio television market. These petitioners

allege that the Commission's action was taken without sufficient notice

to interested parties and was therefore based on an inadequate factual

record.

25. As noted above, the APA requires an agency, when issuing a

general notice of proposed rule making, to provide the public with

``either the terms or the substance of a proposed rule or a description

of the subject and issues involved,'' but ``does not require an agency

to publish in advance every precise proposal which it may ultimately

adopt as a rule.'' In the Notice, the Commission specifically requested

that interested parties ``comment on what modifications to the

television markets specified in Sec. 76.51 of our rules is needed to

ensure that it reflects current market realities.'' In so doing, the

Commission observed that this proceeding necessarily overlaps with an

ongoing proceeding involving, inter alia, the makeup of the Sec. 76.51

market list in relation to the Commission's program exclusivity

rules.\10\ Therefore, the Commission explicitly stated that Docket 87-

24 would be reopened for further comment in the context of this

rulemaking in order to facilitate coordination of the overlapping

aspects of the two proceedings.\11\

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\10\Further, the pendency of Triplett's request to modify the

Columbus, Ohio television market is referenced in Docket No. 87-24,

3 FCC 2d at 6176 n. 15, which was incorporated into the instant

proceeding.

\11\In response to the Notice in this proceeding, the proponents

of three previously-filed market change petitions for rulemaking

filed comments which incorporated by reference their rulemaking

petitions and urged the adoption of their Sec. 76.51 market

amendment proposals. One of these proponents, Star Cable Associates

(``Star''), operator of a cable television system serving the

community of Brazoria, Texas, and portions of Brazoria County,

Texas, filed a petition for reconsideration based on the concept

that although the Commission granted other requests to modify

existing television markets, the Commission did not act on Star's

request to amend Sec. 76.51 to add the community of Alvin to the

Houston, Texas market. Star states that it has had such a request

pending before the Commission since January 1991. Star's comments to

the Notice in this proceeding were incorporated into and filed with

Adelphia, et al. and included numerous other cable operators. These

parties were arguing that the Commission need not revise the

Sec. 76.51 market list, stating that ``[n]o revision to this list is

needed to implement the must-carry rules since the current ADI

markets are to be used for determining must-carry rights.'' It was

suggested in those comments that the Commission ``might wish to

update the list * * * to add new communities to existing markets for

stations which have gone on the air since the list was last

revised'' and, in that context noted the copyright consequences

explained in the pending petition regarding the Houston market.

However, neither Adelphia nor Star specifically requested action in

the must-carry context on Star's pending petition for rulemaking.

Under these circumstances, we do not believe that it was erroneous

to defer action on the Star petition.

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26. In light of the nature of this proceeding, the statutory

instruction to amend, as necessary, Sec. 76.51, and the incorporation

by reference of the issues in Docket 87-24, we conclude that the Notice

amply alerted the public that potential amendments to that rule section

could be made in the context of this specific proceeding.\12\ The

Commission explicitly sought public comment on what modifications to

Sec. 76.51 would be necessary to fulfill the directive of Section

614(f), and we believe that specific market change proposals are a

natural and logical outgrowth of the range of issues presented in the

Notice and discussed in the comments filed in this proceeding.

Accordingly, we are not persuaded by the petitioners that the Notice

did not provide adequate notice to interested parties that specific

amendments to Sec. 76.51 were likely to be considered in this

proceeding.

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\12\Neither the APA nor the Commission's rules specifically

required that the petitioners receive personal service of the

particular market change proposals tendered in comments filed in

this proceeding. Moreover, we observe that at least one petitioner,

Outlet, notes that the filing of Triplett's submission was

referenced in a public notice of comments received in this docket.

However, we do not agree that the Commission was somehow obligated

to indicate the nature of Triplett's comments, and the petitioners

offer no support for that particular proposition. To the extent that

Triplett incorporated by reference its previous request regarding

Chillicothe, which was also noted in Docket 87-24, we do not believe

that obviated the responsibility of interested parties to assess the

nature of comments received in response to the general rulemaking

issues specifically raised in the Notice.

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27. We disagree with the petitioners' contentions that amendment of

the Columbus market first required the issuance of an independent

notice of proposed rulemaking. The fact that we said in the Notice that

we may consider further revisions to Sec. 76.51 on an ad hoc basis did

not preclude the Commission's taking specific action on particular

modifications consistent with the guidance provided by the 1992 Cable

Act where the record indicated that such changes were warranted.\13\

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\13\We do not agree that the action taken with respect to a

proposal to include Athens in the Atlanta market indicates that the

Commission could only act in independent and separate rulemaking

proceedings. The Georgia Public Television Commission (``GPTC''),

licensee of noncommercial educational television station WGTV(TV),

Athens, Georgia, sought to include Athens as a designated community

in the Atlanta market essentially to increase the station's

visibility and fund raising in the market. GPTC's proposal was not

submitted in the instant proceeding directly or incorporated by

reference, but rather in comments supporting the requested action in

MM Docket 92-295, which specifically addressed the Rome proposal.

Parties commenting on MM Docket 92-295 had no opportunity to comment

upon the Athens proposal in the context of that proceeding.

Moreover, GPTC's proposal differs significantly from the competition

and carriage issues vis-a-vis commercial stations raised in either

the instant proceeding or in MM Docket 92-295 (relating specifically

to Rome). In light of the action taken in the Report and Order, the

Commission appropriately terminated MM Docket 92-295, and invited

GPTC to refile its proposal for consideration in an independent

proceeding.

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3. Selection of Signals.

28. Definition of Substantial Duplication. Section 614(b)(5)

provides that a cable operator is not required to carry the signal of

any local commercial television station that substantially duplicates

the signal of another local commercial television station which is

carried on its cable system, or to carry the signals of more than one

local commercial television station affiliated with a particular

broadcast network.\14\ In the Report and Order, based on the

legislative history of this section of the 1992 Cable Act, we decided

that two stations ``substantially duplicate'' each other ``if they

simultaneously broadcast identical programming for more than 50 percent

of the broadcast week.'' For purposes of this definition, identical

programming means the identical episode of the same program series.\15\

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\14\Western Broadcasting Corporation of Puerto Rico, licensee of

Station WOLE, Aguadilla, requests that the Commission reconsider its

rules with respect to their application to WOLE, ``given the unique

situation in Puerto Rico.'' We note that such a request is more

appropriately made as a petition for special relief rather than as

part of a general rulemaking proceeding.

\15\We also consider programming to be duplicative where the

stations involved are located in contiguous time zones and the hour

of broadcast differs by one hour.

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29. We continue to believe that our definition of substantial

duplication is appropriate for determining signal carriage obligations.

We note that it is consistent with the legislative history that

indicates that this term refers to the ``simultaneous transmission of

identical programming on two stations'' and which ``constitutes a

majority of the programming on each station.'' While we agree with NCTA

that Congress gave the Commission discretion to define substantial

duplication, we continue to believe that the most appropriate approach

here is to act consistently with the legislative history. Congress did

not intend for a single duplicative program, whether subject to

blackout or not, to be the determining factor. Finally, we observe that

our rules often use different definitions for similar terms based on

the purpose of the policy involved. The Commission's exclusivity rules

are intended to protect the rights that a broadcaster has bargained for

with the supplier of a particular program. The must-carry rules,

however, are intended to ensure that local stations are available to

cable subscribers. Thus, we reject the proposed modification to our

definition of substantial duplication.

4. Low Power Television Stations.

30. Qualified Low Power Television Station. Section 614(h)(2)

contains the statutory requirements a low power television station

(LPTV) must meet before it will be considered ``qualified'' for must-

carry purposes. Section 614(h)(2) provides that an LPTV station must

broadcast for at least the minimum number of hours the Commission

requires of commercial broadcast stations. The station must adhere to

certain Commission requirements regarding non-entertainment programming

and employment. The station must address local news and informational

needs that full power stations are not adequately serving because the

full power stations are distant from the LPTV station's community of

license. The station must comply with the Commission's LPTV

interference regulations. The station must be within 35 miles of the

cable headend and deliver a good quality over-the-air signal to the

headend. The station's community of license and the cable system's

franchise area both must have been located outside of the largest 160

Metropolitan Statistical Areas (MSA's) on June 30, 1990, and the

population of the LPTV station's community of license must not have

exceeded 35,000 on that date. Lastly, there cannot be any full power

television station licensed to any community within the county or other

political subdivision served by the cable system. As we stated in the

Report and Order, a low power television station must meet all of the

statutory requirements to be ``qualified'' for must-carry status. Cable

systems are required to carry a qualified LPTV station only if there

are not sufficient full power local commercial television stations to

fulfill the cable operator's must-carry obligations under Section

614(b).

31. Moran Communications (``Moran'') and the Community Broadcaster

Association (``CBA'') request a revision to the requirement in Section

614(h)(2)(F) that, in order for an LPTV station to be qualified, there

cannot be any full power station licensed to any community within the

county or political subdivision served by the cable system. Under this

exception, Moran and CBA explain, an LPTV station would qualify for

must-carry rights if it meets all the requirements of subsections

614(h)(2), except for subsection F, and if none of the full power

stations in the county or political subdivision served by the cable

system offers local news or informational programming. They contend

that when a satellite station is repeating another station's signal and

not broadcasting any local news or informational programming to meet

the needs of the local community, the satellite station should not be

considered a full power station for the purposes of Section

614(h)(2)(F). CBA also argues that a satellite station is a ``passive

repeater,'' and because Section 614(h)(1)(b)(1) specifically excludes

passive repeaters from the definition of a local commercial television

station, it follows that Congress intentionally gave less to repeaters

than to originating stations in terms of must-carry rights. Therefore,

argues CBA, ``[t]he Congressional recognition of the lesser value of

the repeaters must be incorporated into the must-carry rule * * *.'' In

opposition, NCTA argues that the Commission cannot rewrite the statute,

which defines qualified LPTV stations and governs the must-carry rights

of LPTV stations.

32. We agree with NCTA that the provisions of the 1992 Cable Act

may not be amended by the Commission through the rule making process.

Further, contrary to CBA's interpretation of Section 614(h), satellite

stations meet the definition of a local commercial television station,

are full power stations pursuant to Section 614(h)(2)(F), and are

generally not simply passive repeaters. We disagree with CBA's

contention that Congress intended satellite stations to be treated

differently from other full power stations when reviewing the statutory

requirements an LPTV station must meet to gain must-carry status. Moran

and CBA request that we codify the exception in footnote 217 to the

qualification requirements of an LPTV station. While the Report and

Order had suggested the possibility of additional circumstances in

which LPTV carriage might be warranted, it now appears that this is an

area where the specific statutory provisions and the balancing

incorporated therein must necessarily guide our enforcement of the

mandatory carriage provisions for LPTV stations.

C. Manner of Carriage Provisions Applicable to Commercial and

Noncommercial Stations

1. Content To Be Carried.

33. Section 614(b)(3)(A) and Section 615(g)(1) require cable

operators to carry the primary video, accompanying audio, and line 21

closed caption transmission, in its entirety, of both qualified local

commercial and NCE stations when fulfilling their must-carry

obligations. With respect to qualified local commercial stations, cable

operators also are required, to the extent technically feasible, to

retransmit program-related material carried in the vertical blanking

interval (VBI) or on subcarriers. Retransmission of other material in

the VBI or other non-program-related material (including teletext and

other subscription and advertiser-supported information services) is at

the discretion of the operator. With respect to local qualified NCE

stations, cable operators are required to transmit, to the extent

technically feasible, program-related material carried in the VBI, or

on subcarriers, that may be necessary for receipt of programming by

handicapped persons or for educational or language purposes.

Retransmission of other material in the VBI or on subcarriers is at the

discretion of the operator. Cable operators may, where technically

feasible and appropriate, remove ghost-cancelling information carried

in a station's VBI if the cable operator applies an adequate

alternative methodology at the headend.

34. In the Report and Order, we decided that the factors enumerated

in WGN Continental Broadcasting, Co. vs. United Video Inc. (``WGN''),

provide useful guidance for what constitutes program-related

material.\16\ We declined to further define ``program-related,'' noting

that carriage of information in the VBI is rapidly evolving. As a

result of our reliance on the approach followed in WGN for guidance, we

rejected a proposal by A.C. Nielsen Company (``Nielsen'') to require

program identification codes to be carried by a cable system.

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\16\In the Report and Order, we used a cite of 685 F.2d 218 (7th

Cir. 1982), which was the original citation for the case, prior to

rehearing. Upon rehearing, the court affirmed the factors on which

we are relying.

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35. The WGN case addressed the extent to which the copyright on a

television program also included program material in the VBI of the

signal. The WGN court set out three factors for making a copyright

determination. First, the broadcaster must intend for the information

in the VBI to be seen by the same viewers who are watching the video

signal. Second, the VBI information must be available during the same

interval of time as the video signal. Third, the VBI information must

be an integral part of the program. The court accepted WGN's future

programming schedules as an ``integral part of the program.'' The court

in WGN held that if the information in the VBI is intended to be seen

by the viewers who are watching the video signal, during the same

interval of time as the video signal, and as an integral part of the

program on the video signal, then the VBI and the video signal are one

copyrighted expression and must both be carried if one is to be

carried. While the court did not define an ``integral part of the

program,'' the WGN VBI information not only included local news, but

also contained future programming schedules for WGN, and the court

upheld the VBI as one copyrightable expression with the video

signal.\17\

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\17\In an ex parte presentation, StarSight requested that the

Commission determine that its product, which is transmitted in the

VBI, meets the WGN test. We believe that such a request should not

be resolved in the context of a rulemaking proceeding, but rather

should be dealt with separately through the special relief process.

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36. We continue to believe that the factors articulated in WGN

provide the best guidance for determining whether material in the VBI

is program-related and, therefore, must be carried by the cable system.

Accordingly, material that is intended to be seen by the viewers of the

main program, during the same time interval as the main program, and

which is an integral part of the main program will be entitled to

carriage along with the main signal of the must-carry station. However,

on reconsideration, we clarify that the factors set forth in WGN do not

necessarily form the exclusive basis for determining program-

relatedness. We believe there will be instances where material which

does not fit squarely within the factors listed in WGN will be program-

related under the statute. For example, on reconsideration, although

SID codes may not precisely meet each factor in WGN, we find that they

are program-related under the statute because they constitute

information intrinsically related to the particular program received by

the viewer. Further, SID codes provide important information that is

useful to both broadcasters and cable operators. We note that the 1992

Cable Act recognized the importance of the national ratings period and

prohibited cable operators from repositioning or deleting stations

during that time. This interpretation is consistent with previous

Commission decisions in which SID codes were found to be program-

related in other contexts. Finally, we reiterate that, in order to be

program-related, it is not necessary that the copyright holder in the

main program and in the material in the VBI be the same.

2. Channel Positioning.

37. The 1992 Cable Act provides both commercial and NCE television

stations which elect must-carry status the additional right to select

the channel position on which they will be carried by the cable system,

within certain specified options. Section 614(b)(6) provides that the

signals of a local commercial television station carried pursuant to

the must-carry rules must be carried on either (1) the same channel on

which the station is broadcast over-the-air, (2) the cable channel on

which it was carried on July 19, 1985, or (3) the cable channel on

which it was carried on January 1, 1992. The election, in the absence

of conflicts, is left up to the station involved. See 47 U.S.C.

534(b)(6). Similarly, Section 615(g)(5) requires that NCE signals

carried pursuant to must-carry requirements must appear on the cable

system channel number on which the qualified local NCE station is

broadcast over-the-air, or on the channel on which it was carried on

July 19, 1985, at the election of the station. In either case, another

channel number that is mutually agreed upon by the station and the

cable operator may be selected. Alternatively, the broadcast station

and cable operator may agree on a mutually acceptable alternative

channel position. We note that, with respect to channel position, a

qualified LPTV station enjoys the channel positioning rights of a

commercial television station. Section 76.57 is being revised

accordingly.

38. Based on comments received in response to the Notice, we

declined in the Report and Order to adopt a formal priority structure

for resolving conflicting channel positioning claims. We stated that we

expected compliance with the channel positioning requests of

broadcasters ``absent a compelling technical reason for not being able

to accommodate such requests,'' and that ``inconvenience, marketing

problems, the need to reconfigure the basic tier or the need to employ

additional traps or make technical changes'' would not be sufficient

reasons to deny a channel positioning request. In addition, we

determined that ``only where placement of a signal on a chosen channel

results in interference or degraded signal quality to the must-carry

station or an adjacent channel, or causes a substantial technical or

signal security problem, will we permit cable operators to carry a

broadcast signal on a channel not chosen by the station.'' We noted

that most systems would be able to configure their service to meet this

statutory requirement and that a cable system claiming that it cannot

meet a channel positioning request for technical reasons will have to

provide evidence that clearly demonstrates that inability.

39. In the Order adopted July 15, 1993, we addressed certain issues

relating to continued carriage of retransmission consent stations and

the channel position for ``default'' must-carry stations. In that

Order, we stated that cable systems which are required to carry the

signal of a default station ``shall place that signal on one of the

statutorily defined positions, at the system's discretion.'' Although

the footnote to that sentence correctly stated that the station

licensee makes the election, the text incorrectly stated ``at the

system's discretion.'' We clarify that, as required by the 1992 Cable

Act, the choice of statutorily defined channel position is made by the

station, not the cable system. The Order also determined that, in the

event of a conflict, the station making an affirmative election has

priority over the default station. Finally, we stated that, where the

station making an affirmative election has selected the only statutory

channel position available to the default station, the cable system may

place the default station on a channel of the cable system's choice, so

long as that channel is included on the basic tier. Section 76.57 of

our rules was amended to reflect the channel positioning options

discussed and adopted in the Order.

40. The 1992 Cable Act provides that the channel position of a

station which has elected must-carry rights is a decision to be made by

the broadcaster from among the listed statutory alternatives. The Act

does not distinguish between VHF and UHF stations. We emphasize that

our statements in the Report and Order regarding channel positioning

apply to UHF, in addition to VHF, stations. As noted there, cable

operators must comply with the channel positioning requirements absent

a compelling technical reason.\18\ Further, in response to a

broadcaster's complaint regarding denial of a channel positioning

request, a cable system will be required to provide evidence to the

Commission clearly demonstrating that the operator cannot meet the

request for technical reasons. As part of such a showing, a cable

operator may present evidence as to the costs involved in remedying the

technical problem.

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\18\As noted above, inconvenience, marketing problems, the need

to reconfigure the basic tier or to employ additional traps or make

technical changes are not sufficient reasons for denying the channel

positioning request of a must-carry signal. Only where placement of

a signal on a chosen channel results in interference or degraded

signal quality to the must-carry station or an adjacent channel, or

causes a substantial technical or signal security problem will we

permit cable operators to carry a broadcast station on a channel not

chosen by the station.

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3. Signal Quality

41. In the Report and Order and the Clarification Order we

addressed issues relating to the signal quality of a broadcast station

asserting must-carry rights. We noted that Section 614(h) established

specific minimum signal levels for a good quality signal of a

commercial television station (i.e.,-45 dBm for UHF signals and -49 dBm

for VHF signals). Neither the 1992 Cable Act nor the Commission's

Orders specifically stated what would be considered a ``good quality

signal'' for must-carry purposes with respect to noncommercial

stations, educational translator stations, and low power television

stations, but Section 615(g)(4) states that the Commission may define a

``signal of good quality'' for noncommercial stations. We do so now, on

our own motion.

42. We note that in a Memorandum Opinion and Order (Independence

Public Media of Philadelphia, Inc. against Suburban Cable TV Co., Inc.)

CSR-3806-M), 8 FCC Rcd 6319 (1993), the Mass Media Bureau decided to

utilize the standards for commercial television stations as prima facie

tests to initially determine, absent other evidence, whether

noncommercial stations place adquate signal levels over a cable

system's principal headend. The Mass Media Bureau has relied on this

test in processing must-carry complaint cases and we believe that is

appropriate. With respect to low power and NCE translator stations, we

are adopting the same signal quality standard of -49 dBm for VHF and

-45 dBm for UHF signals.

43. With respect to the manner of testing for a good quality

signal, we find that the Mass Media Bureau has adopted an appropriate

method for measuring signal strength in the Memorandum Opinion and

Order. Generally, if a test measuring signal strength results in an

initial reading of less than -51 dBm for a UHF station, at least four

readings must be taken over a two-hour period. If the initial readings

are between -51 dBm and -45 dBm, inclusive, readings must be taken over

a 24-hour period with measurements not more than four hours apart to

establish reliable test results. For a VHF station, if the initial

readings are less than -55 dBm, we believe that at least four readings

must be taken over a two-hour period. Where the initial readings are

between -55 dBm and -49 dBm, inclusive, readings should be taken over a

24-hour period, with measurements no more than four hours apart to

establish reliable test results.

44. Cable operators are further expected to employ sound

engineering measurement practices. Therefore, signal strength surveys

should, at a minimum, include the following: (1) Specific make and

model numbers of the equipment used, as well as its age and most recent

date(s) of calibration; (2) description(s) of the characteristics of

the equipment used, such as antenna ranges and radiation patterns; (3)

height of the antenna above ground level and whether the antenna was

properly oriented; and (4) weather conditions and time of day when the

tests were done. We believe that adherence to these procedures and

requirements will result in fewer disputes over the signal quality of

broadcasting stations.

D. Procedural Requirements

1. Compensation for Carriage.

45. Copyright Liability.\19\ Under the 1992 Cable Act, a cable

operator is generally not required to carry a station that would

otherwise qualify for must-carry status if the station would be

considered distant for copyright purposes, unless the station

indemnifies the cable operator for its copyright liability.\20\ The

Commission required cable operators to notify local commercial and

noncommercial stations by May 3, 1993 that they may not be entitled to

must-carry status because their carriage may cause an increased

that it expected cable operators and broadcasters to cooperate with

each other to ensure that operators are compensated for the cost of

carriage of ``distant'' must-carry signals and that broadcast licensees

pay only their fair share.\21\ The Commission stated that each licensee

should be responsible for the increased copyright costs specifically

associated with carriage of its station as a must-carry signal and that

stations should be counted in the order they satisfy all the necessary

conditions for attaining must-carry status. The Commission also

determined that it would be reasonable for a cable operator to receive

a written commitment for such payments from a broadcaster in return for

an estimate of the broadcaster's expected copyright liability, based on

previous payments and financial information.

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\19\We note that the Satellite Home Viewer Act of 1994, P.L.

103-369, 108 Stat. 3477, which was signed into law on October 18,

1994, includes a provision to amend Section 111(f) of title 17,

United States Code, specifically with reference to the definition of

``local service area of a primary transmitter'' by inserting after

``April 15, 1976,'' the following: ``or such station's television

market as defined in Sec. 76.55(e) of title 47, Code of Federal

Regulations (as in effect on September 18, 1993), or any

modifications to such television market made, on or after September

18, 1993, pursuant to Sec. 76.55(e) or Sec. 76.59 of title 47 of

the Code of Federal Regulations,''. We acknowledge that there may be

some effect on pending petitions and on our current rules. We will

revisit, to the extent necessary, those rules and policies which may

be affected.

\20\However, a qualified local noncommercial station that has

been carried continuously since March 29, 1990 is not required to

reimburse a cable operator for its copyright liability to retain its

must-carry status. In addition, a distant noncommercial station that

has been imported prior to March 29, 1992, and which continues to be

imported to meet the statutory requirements of Section 615, shall

not be required to reimburse for copyright liability.

\21\We clarify that, in situations where copyright liability is

incurred for carriage in some of the communities served by a single

cable system, the broadcaster must indemnify the operator for that

system, unless the operator is able to provide different channel

line-ups to the different communities.

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46. On May 28, 1993, the Commission adopted a Clarification Order

(``Clarification'') that, among other things, addressed certain

provide a broadcast station with a good faith estimate of the potential

filed with the Copyright Office for existing distant signal carriage

that details the payments made for carriage of distant signals. The

cable operator, however, is not required to make legal judgments

pertaining to the amount of indemnity involved. In addition, a cable

operator is required to provide such information within three business

days of receipt of a written request from a broadcaster.\22\ Any cable

operator not providing sufficient information to a broadcast station

regarding potential copyright liability in the required timely fashion

may be subject to Commission sanctions.

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\22\In its opposition, Time Warner argues that cable operators

should be given at least seven days, not three, to respond to any

requests for information regarding copyright liability. We reject

Time Warner's proposal and note that in the Clarification we

observed that the information that must be provided to broadcasters

should be readily available to the cable operator.

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47. We concur with INTV and NAB that stations should be able to

commit to copyright indemnification for periods shorter than the three

years specified in the 1992 Cable Act. In light of the numerous factors

that affect the liability payments, we believe that commitments can be

for periods as short as one year (two six-month accounting periods).

Otherwise, a station may be required to make a commitment that cannot

be fulfilled, thereby leading to protracted litigation. However, in

fairness to cable operators, we support NAB's proposal that

broadcasters notify cable operators 60 days prior to termination of any

agreements to indemnify them for copyright liability. In particular,

this will provide sufficient time for cable operators to notify

subscribers regarding the deletion of the station.\23\ Further, we

disagree with NCTA that to permit agreements for periods of less than

three years essentially allows stations to revert to retransmission

consent. A station electing must-carry status remains a must-carry

station for the entire three-year period, but, in situations where the

station is considered distant for copyright purposes, a cable operator

is not obligated to honor that election unless it receives a commitment

for copyright reimbursement. Further, we note that where a station does

not initially meet the criteria for must-carry status, it subsequently

may assert its rights once it satisfies the conditions for must-carry

status.

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\23\We note that this rule also requires notification of the

affected broadcast station, although in such instances the deletion

will be at the request of the broadcaster.

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48. In a related matter, we find it appropriate to require cable

operators to notify a broadcaster of any change in service that will

have an unexpected change on the amount of copyright reimbursement that

will be required to maintain its must-carry status. For example, as

petitioners point out, there are some circumstances where a permitted

signal subject to a .563% royalty rate may become a penalty station and

require a payment of 3.75% of the system's gross revenues. We believe

it is reasonable to expect a cable operator to inform a must-carry

station when the estimated cost of continued carriage may change. We

also agree with NAB that it is inappropriate for broadcasters whose

stations do not cause a copyright liability for the cable system to be

required to commit to indemnification before such liability is actually

incurred. In both cases, a change in a station's potential copyright

liability may affect its decision whether to retain its must-carry

status by indemnifying the cable operator or to cede its must-carry

rights. Accordingly, we will require cable operators to notify

broadcast stations at least 60 days prior to any unexpected change on

their copyright status. This will allow sufficient time for the station

to determine whether it wishes to continue carriage and, if not, it

will give the cable operator enough time to send out the required

notice of deletion of a signal. However, the broadcast station must

indemnify the cable operator for costs incurred during that copyright

accounting period, but not for additional costs once the broadcaster

has notified the cable operator that it will discontinue must-carry

status in light of changes proposed, but not yet effectuated, by the

cable operator.

49. Calculation of station liability. INTV and NAB request

clarification regarding the method for determining the incremental

in the Report and Order that increased copyright liability should be

specifically associated with the carriage of each station and further

that ``stations should be counted in the order they satisfy all the

necessary conditions for attaining must-carry status.'' However, this

statement does not accurately reflect the reality of copyright

liability, nor does it adequately address the concern that cable

operators may have the ability to manipulate the liability of stations

which have been historically carried on the system, or which are added

pursuant to must-carry. We note that NAB is correct in stating that the

the signal is added to the system. Section 111(d) of Title 17 provides

the method for calculating copyright royalties to be paid by a cable

system. In addition, the copyright rules provide specific information

regarding statements of account and methods of computation for the

payment of copyright royalties. We agree with NCTA that the copyright

rules determine the manner in which the cable operator will have to pay

royalties for each station carried.

50. In an effort to eliminate confusion in making the determination

of increased liability associated with each station, we believe that

stations which were carried prior to the implementation of must-carry

should continue to be accounted in the same manner with respect to the

sequence of signal carriage. Stations which were or are added by the

system should have their copyright liability based on the sequence by

which the signal was or is added to the system. In the event multiple

signals are added on the same day, the sequence of incremental increase

in liability should be based on the order in which the stations met all

necessary conditions for attaining must-carry status. We anticipate

that providing the station with the statement of account filed with the

this process is achieved. Therefore, we decline to adopt an alternative

system for determining the copyright liability of individual stations'

carriage on a cable system.

51. The Commission's must-carry requirements became effective on

June 2, 1993, during a Copyright Office accounting period.\24\ Prior to

the implementation of the must-carry rules, carriage of any station was

at the discretion of the cable operator. In such cases, the cable

operator carried such a signal even though it incurred a copyright

liability for the period ending June 30, 1993. That liability did not

increase due to a change in our regulations for stations which had

previously been carried, and therefore the liability had already been

assumed. We do not believe it appropriate to require the broadcast

station to reimburse for that liability, even if carriage became

mandatory on June 2, 1993. However, with respect to a broadcast station

which was not previously carried by the cable system and which

immediately asserted its must-carry rights on June 2, 1993, we believe

that such station should reimburse the cable operator for any increased

June 2, 1993 and June 30, 1993. Therefore, in the case of a station

that agreed to be added on June 2 and committed to indemnification, the

station is responsible for the whole semiannual fee. In particular, the

station had the opportunity to postpone satisfying the conditions of

must-carry status until the first day of the next Copyright Office

accounting period.

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\24\The Copyright Office divides the year into two accounting

periods--January 1 to June 30 and July 1 to December 31.

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52. INTV seeks to establish a rebuttable presumption that all

stations are significantly viewed throughout their ADIs. We recognize

that there may be some merit in considering alternative procedures for

addressing significant viewing showings and that there may be both

policy and efficiency reasons for attempting to parallel ADI and

significant viewing service area decisions. The INTV proposal, however,

is in our view sufficiently novel that it is not appropriately

considered in the context of this proceeding. This is particularly the

case since the significant viewing process has ramifications in terms

of other rules, such as the network nonduplication rules, that are not

the subject of this proceeding.

2. Remedies

53. Section 615(d)(1) and Section 615(j) provide for the resolution

of carriage and channel positioning disputes between a broadcast

station and a cable operator. With respect to commercial stations, the

1992 Cable Act requires a local commercial station to notify the cable

operator of an alleged violation, and requires the cable operator to

respond to such a notice, prior to the station's filing a complaint

with the Commission. However, with respect to NCE stations, the 1992

Cable Act permits a NCE station to file a complaint with the Commission

prior to notifying the cable operator. In the Report and Order we

discussed these provisions and adopted rules for their implementation.

Upon review of those rules, we find it necessary to make some

adjustments on our own motion, as they relate to the filing of a

complaint by a NCE station.

54. As indicated above, a NCE station is not required to notify a

cable operator prior to filing a complaint with the Commission. In the

Report and Order, we stated that ``it is anticipated, though not

required, that if there is any question relating to the carriage

obligations of the cable system, the NCE station will make inquiries of

the cable system prior to filing a complaint.'' We also stated that if

a NCE station wanted to follow the procedures outlined for complaints

filed by a commercial broadcasting station, it could do so as long as

it notified the cable system of such intent. In establishing the time

frames by which any broadcaster (commercial, noncommercial or LPTV)

should file a complaint, we stated that such complaint should be filed

within 60 days of an ``affirmative action'' by a cable operator which

directly affects the carriage rights of a broadcast station. We then

proceeded to define ``affirmative action'' as the denial by a cable

operator of a request for either carriage or channel position, or the

failure of a cable system to respond to such a demand within the

required 30-day time frame. It appears that by establishing such a 60-

day requirement based upon an ``affirmative action,'' we have made the

complaint procedure for NCE stations more rigorous than was intended,

either by our rule or the intent of the 1992 Cable Act. Therefore, for

the purposes of a NCE station complaint, we are revising Sec. 76.7 to

allow a NCE station to file a complaint at any time it determines that

its carriage rights have been violated. We believe this better reflects

the language of the 1992 Cable Act and will eliminate the possibility

that a NCE complaint would be dismissed based solely on a failure to

meet the 60-day time frame, prior to having the merits of the complaint

considered.

III. Retransmission Consent

A. Definition Issues

1. Multichannel Video Programming Distributors

55. Section 325(b)(1) provides that ``no cable system or other

multichannel video programming distributor shall retransmit the signal

of a broadcasting station, or any part thereof, * * * ``except with

express authorization of the station or if carried pursuant to must-

carry. Section 602(12) of the Communications Act defines a multichannel

video programming distributor as ``a person such as, but not limited

to, a cable operator, a multichannel multipoint distribution service

(MMDS), a direct broadcast satellite service, or a television receive-

only satellite program distributor, who makes available for purchase,

by subscribers or customers, multiple channels of video programming.''

56. In the Report and Order we found that ``local broadcast signals

provided by MATV facilities or by VHF/UHF antennas on individual

dwellings situated within the station's broadcast service area are not

subject to retransmission consent, provided that these signals are

available without charge at the resident's option.'' We further stated

that this exemption applies to MATV-SMATV, MMDS-SMATV and MMDS-

individual antenna combinations, so long as there is no charge. The

analogy used was that of an individual purchasing and installing a roof

top antenna to receive broadcast signals. This exception to

retransmission consent was added to the Commission's rules as

Sec. 76.64(e). That section states that ``[p]rovision of local

broadcast signals my master antenna television (MATV) facilities or by

VHF/UHF antennas on individual dwellings is not subject to

retransmission consent, provided that these signals are available

without charge at the resident' option. That is, the antenna facilities

must be owned by the individual subscriber or building owner and not

under the control of the multichannel video programming distributor.''

On October 5, 1993, at the request of the Wireless Cable Association

(``WCA'') and the National Private Cable Association (``NPCA''), we

adopted a Stay Order with respect to Sec. 76.64(e), pending our

resolution of this issue. The determining factor used in the rule

relates to antenna ownership, not the provision of the service free-of-

charge.

57. We note that a wireless operator meets the definition of a

multichannel video programming distributor (``MVPD'') and generally

would be responsible for obtaining retransmission consent for all

broadcast signals retransmitted over their system. We are cognizant of

Congress' desire not to affect a viewer who receives these broadcast

signals over an antenna not owned by a MVPD. The application of the

retransmission consent requirement to MMDS and SMATV facilities was an

effort to create regulatory parity between these types of operations

and cable systems. In the Report and Order, the Commission expressed

its belief that to the extent the signal reception involved was under

the control of the individual subscriber and the signals involved were

not being ``sold'' by the MMDS and SMATV operators, the consent

requirement should not apply. In addition, and in recognition of the

concerns raised by WCA, we find that retransmission consent is not

required if the broadcast signal reception service is received without

a separate subscription charge and the antenna is either (1) owned by

the subscriber or the building owner; or (2) under the control and

available for purchase by the subscriber or building owner upon

termination of service. We believe that this interpretation upholds

Congressional intent without causing undue disruption to subscribers.

We will amend Sec. 76.64(e) of our rules to reflect this change.

B. The Scope of Retransmission Consent

1. Radio

58. In the Report and Order we concluded that Congress intended to

provide retransmission consent to all broadcast signals, including

those retransmitted by radio. Petitions for reconsideration argue that

the retransmission consent provisions of Section 325 and the must-carry

provisions of Sections 614 and 615 were intended to work in concert

and, therefore, because the must-carry provisions apply only to

broadcast television signals, Congress intended retransmission consent

to apply only to broadcast television signals. Cable operators argue

that most cable systems carry radio stations as an all-band offering,

meaning that as with any standard radio receiver, all stations which

deliver a signal to the antenna are carried on the system. They contend

that the refusal of one radio station to grant consent would preclude

all other radio stations from being carried in the all-band method.

Several commenters assert that cable operators are more likely to drop

the all-band radio offering, rather than attempt to bargain for

retransmission consent from all stations carried.

59. We continue to believe that Section 325, as amended by the 1992

Cable Act, applies to radio signals as well as television signals. The

statutory language and the legislative history support this conclusion

and we have not been presented with a credible argument for reading the

statute otherwise. Section 325(b)(2) expressly exempts certain

broadcast stations from the consent provision, and radio stations are

not included in these exceptions. However, with respect to the

difficulty of obtaining consent for all stations carried in an all-band

method, we believe that cable system have a legitimate concern. In

order to make possible the offering of an ``all-band'' FM radio

service, cable operators need only seek the consent of stations within

the usual reception area of a high power FM station. Therefore, cable

systems must obtain consent from all stations which are located within

92 km (57 miles) of the cable system's receiving antenna(s). The

distance of 92 km was selected as a result of the Commission's

allotment policies relating to FM radio stations. Because the predicted

service contour of a Class C FM radio station is 92 kilometers, the use

of such a distance will ensure that retransmission consent is obtained

from FM radio stations received by the cable system's receiving

antenna(s). Other stations, in the absence of specific notice to the

contrary, will be presumed to be insufficiently present to be

considered carried in the all-band reception mode. This should

eliminate concern over obtaining consent from signals which fade in and

out of an all-band offering due to atmospheric conditions. We note that

although the cable operator is not required to obtain retransmission

consent from stations outside the 92 km zone, any such station that is

received and retransmitted by the cable system may affirmatively refuse

to grant, or negotiate for compensation in return for granting,

retransmission consent to the cable operator. Alternatively, a cable

system may choose to use a filtering device to eliminate those radio

stations from an all-band offering for which the cable operator is

unable or unwilling to obtain consent. This change will be reflected in

Section 76.64 of our rules, under a new subpart (n).

2. Low Power Television Stations

60. In concluding in the Report and Order that low power television

stations are entitled to retransmission consent, we stated that low

power television stations are ``television broadcast stations.'' We

incorrectly stated, however, that a low power station meets the

definition of television broadcast station in Sec. 76.5 of our rules.

Section 76.5(b) defines television broadcast station as ``any

television broadcast station operating on a channel regularly assigned

to its community by Sec. 73.606 of this chapter * * *.'' A low power

television station, defined in Section 74.701(f), however, is

authorized under subpart G of Part 74 of our rules. However, we

continue to believe that the statute was clear that low power

television stations are entitled to assert retransmission consent over

their signals.

3. Exceptions to the Retransmission Consent Requirement

61. Section 325, as amended by the 1992 Cable Act, provides four

exceptions to retransmission consent. Section 325(b)(2) states that

retransmission consent shall not apply to the retransmission of NCE

stations, retransmission directly to a home satellite antenna, the

retransmission of the broadcast signal of a network directly to a home

satellite antenna of an unserved household, or the retransmission of

the signal of a superstation if such signal was obtained from a

satellite carrier and the originating station was a superstation on May

1, 1991. Petitions for reconsideration have been filed regarding the

interpretation of the fourth exception.

62. On May 26, 1993, the Commission adopted an Order, 58 FR 32452

(6/10/93), denying a Request for Stay submitted by Yankee Microwave,

Inc. (``Yankee''). In subsequent pleadings Yankee requested

reconsideration of that Order, or alternatively, the immediate grant of

its petition for reconsideration. Yankee sought relief, on behalf of

its cable system customers, from the provisions of Sec. 76.64(b)(2)

regarding the superstation exception. Alternatively, Yankee requested

revision of that section of our rules so it would apply to microwave

carriers of a superstation signal, as well as to satellite carriers of

such a signal. By Order of the Chief, Mass Media Bureau, a temporary

waiver was granted to Yankee upon a finding by the Bureau that Yankee

would suffer irreparable harm if the provisions of the rule were

enforced prior to our decision on the pending petitions for

reconsideration. On October 5, 1993, the Mass Media Bureau adopted an

Order which denied a similar request filed by EMI, Inc. (``EMI'')

primarily based on that party's lack of a showing of imminent harm. We

now address the requests and oppositions raised by parties to this

proceeding.

63. In the Report and Order we rejected arguments that the

retransmission consent requirement should not apply to superstation

signals delivered via terrestrial means such as microwave. Petitions

for reconsideration argue that the effect of the rule is to unfairly

discriminate in favor of satellite carriers to the detriment of

alternative delivery methods such as microwave. We are persuaded by

commenters that the unintended effect of the rule is to unfairly

discriminate against alternative methods of delivery of a superstation

signal. We believe, consistent with the stated purpose and intent of

the 1992 Cable Act, that it is the delivery of satellite signals, not

the manner of delivery which should be excepted from the retransmission

consent requirement. In other words, if a superstation meets the

definition of ``superstation'' contained in the Copyright Act, then the

manner of delivery of such a signal shall not control. However, as

discussed more fully below, the exception will only apply to delivery

of such a superstation signal outside the local market of the station.

64. Rights of superstations within the local market. Section 614

defines a local commercial broadcast station as any full power

commercial television broadcast station licensed by the Commission that

is located in the same television market as the cable system. As long

as the local commercial broadcast station delivers a good quality

signal and agrees to indemnify the cable system for any additional

within the local market. Otherwise, that station has the right,

pursuant to Section 325(b) (4)-(5), to elect retransmission consent.

Section 325 states that the term ``superstation'' shall be defined

according to Section 119(d) of Title 17 of the United States Code.

Section 119(d) of Title 17 defines a superstation as ``a television

broadcast station other than a network station, licensed by the Federal

Communications Commission that is secondarily transmitted by a

satellite carrier.''

65. We believe that Congress intended for all local commercial

broadcast stations to have the option to assert either must-carry or

retransmission consent within their individual market. These local

commercial broadcast stations do not become superstations until such

time as they are retransmitted via satellite outside their market, an

activity unrelated to their status as local commercial broadcast

stations within their market. Therefore, such local commercial stations

retain the right to elect between must-carry and retransmission consent

within their market.

C. Must-Carry/Retransmission Consent Election and Implementation

66. Section 325(b)(3)(B) provides that television stations must

make an election between must-carry and retransmission consent ``within

one year after the date of enactment'' and every three years

thereafter. In the Report and Order we established the implementation

of these provisions indicating that the initial election for must-carry

or retransmission consent must be made by June 17, 1993. We also

provided that subsequent elections must be made by October 1, 1996,

October 1, 1999, etc., and would become effective on January 1, 1997,

January 1, 2000, etc. We determined that broadcasters were to send

copies of their election to the cable operator and were to retain

copies of such elections in their public files. We failed, however, to

instruct television broadcast stations on the term of retention.

Consistent with the requirements of the 1992 Cable Act and other

recordkeeping provisions of Secs. 73.3526 and 73.3527 of our rules, we

will require television broadcast stations to retain election

statements in their public files for the term of the three year-

election period applicable to such election statements. We will amend

Secs. 73.3526 and 73.3527 to indicate not only the need to include such

information in the station's public file, but also the three-year

retention period for such election statement.

67. In the Report and Order we noted that no party had commented on

our proposal to require a new television station to make an initial

must-carry/retransmission consent election within 30 days from the date

that it commences regular broadcasts. We adopted that proposal, as well

as an effective date of ninety (90) days following the election. In

considering this provision further, we believe that such an election

schedule could have a detrimental effect on a new television station

which is entering the market. The Commission's rules provide that a

television station which has completed construction may commence

program tests prior to filing for a license with the Commission. These

stations generally know in advance the date they plan to commence

broadcasting. On our own motion, we therefore alter the initial

election and effective date with respect to new television broadcast

stations. A new television station shall elect between must-carry and

retransmission consent sixty (60) days prior to commencing program

tests, and shall notify the cable operator of that election. In the

event that must-carry status is elected, the new station shall also

include its channel position in the election statement to the cable

operator. The election statement should be sent to the cable operator

by certified mail, return receipt requested. The initial election of

the broadcast station shall take effect ninety (90) days after it is

made. This will provide the cable operator with sufficient time to

notify subscribers of any change which may be required in the channel

line-up of the system. The result will be that a new television

broadcast station will have the opportunity to be carried on a cable

system 30 days after it commences broadcasts over-the-air. We believe

that such a result serves the public interest and provides new

broadcast stations with appropriate access to enable them to

effectively enter a market. Section 76.64(f)(4) of our rules is being

revised to reflect this change.

68. In the Report and Order we failed to provide for the

introduction of a new cable system in a market. Consistent with the

purpose of the 1992 Cable Act, a new cable system will be required to

notify all local commercial and noncommercial broadcast stations of its

intent to commence service. The cable operator must send such

notification, by certified mail, at least 60 days prior to commencing

cable service. Commercial broadcast stations must notify the cable

system within 30 days of the receipt of such notice of their election

of either must-carry or retransmission consent with respect to such new

cable system. If the commercial broadcast station elects must-carry, it

must also indicate its channel position in its election statement to

the cable system. Such election shall remain valid for the remainder of

any three-year election interval, as established in Sec. 76.64(f)(2).

Noncommercial educational broadcast stations should notify the cable

operator of their request for carriage and their channel position. The

cable system must determine, in advance of commencing service on the

system, whether a station is delivering a good quality signal and/or if

a station will be required to indemnify for copyright purposes. The

cable system must notify the broadcaster of any signal quality problems

or copyright liability and must receive the station's response to such

information prior to commencing carriage of the station's signal. These

provisions are being added to our rules as Sec. 76.64(l).

D. Retransmission Consent and Section 614

69. In the Report and Order we rejected the tentative conclusion of

the Notice that cable operators could negotiate with broadcasters to

carry less than the entire program schedule of a retransmission consent

station. We interpreted Section 614(b)(3)(B) and the legislative

history as not permitting negotiation for carriage or partial broadcast

signals. On October 5, 1993, at the request of various parties to this

proceeding, we stayed the rule requiring carriage in the entirety for

retransmission consent signals. Section 76.62(a) of the rules requires

the carriage of the entire program schedule of any television station

carried by a cable system. The rule applies to stations carried

pursuant to Sections 614, 615 or 325. The only exception to this

``carriage in its entirety'' requirement is specific programming that

is prohibited under Sec. 76.67 (sports blackout rule) or subpart F of

Part 76 of our rules (network nonduplication and syndicated

exclusivity). In the Stay Order we granted a stay, with respect to

stations carried pursuant to Section 325 (retransmission consent

stations), of the new Sec. 76.62(a). The stay was issued in response to

a request by Media-Com, the licensee of a low power television station

located in Akron, Ohio. Media-Com requested a waiver of the provision

to permit it to continue part-time carriage on a Warner Cable system

under a private agreement. We granted the stay in an effort to avoid an

interim loss to the public of its present cable access while we

considered petitions for reconsideration with respect to the carriage

in the entirety issue. We stated in the Stay Order that we would

resolve this issue in this Memorandum Opinion and Order. Petitioners

request reconsideration of the requirement for carriage in the entirety

with respect to retransmission consent signals.

70. First, we continue to believe that, with respect to stations

which have elected must-carry status, Section 614(b)(3) requires cable

operators to ``carry the entirety of the program schedule of any

television station carried on the cable system * * *.'' As discussed in

the Report and Order, the legislative history indicates that carriage

in the entirety was intended for those local commercial broadcast

signals entitled to must-carry status under Section 614. Indeed, the

legislative history is replete with discussions relating to the must-

carry provisions, the need for adequate carriage of local broadcast

stations on cable systems and the controlling market power of cable

systems. Congress was concerned that such market power not overwhelm

the ability of local broadcast stations to obtain carriage, and that

the terms of carriage not be unreasonable.\25\ Congress indicated its

strong belief that absent the must-carry provisions, local broadcast

stations would not be readily available to cable subscribers. In the

Senate Report, Congress stated that ``it is for this reason that the

legislation incorporates a special provision focusing just on the

carriage of local broadcast signals. Moreover, this provision addresses

both the primary concern of carriage and the secondary concerns of the

terms of carriage. Based on these concerns, we believe that all

qualified local commercial broadcast stations should have the minimal

protection afforded by Section 614. Further, we also continue to

believe that any broadcast station that is eligible for must-carry

status, although it may be carried pursuant to a retransmission consent

agreement must, therefore, be carried in the entirety, unless carriage

of specific programming is prohibited, pursuant to our rules relating

to network nonduplication, syndicated exclusivity, sports programming

or similar regulations.

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\25\The Conference Report states that ``the must-carry and

channel positioning provisions in the bill are the only means to

protect the federal system of television allocations, and to promote

competition in local markets * * *. Given the current economic

condition of free, local over-the-air broadcasting, an affirmative

must-carry requirement is the only effective mechanism to promote

the overall public interest.''

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71. The Report and Order concluded that Section 614(b)(3) requires

carriage in the entirety of any broadcast station carried on the cable

system. However, upon reconsideration, we believe that the ability of a

broadcaster and cable system to negotiate and agree to carriage of less

than the entire signal is permitted only where Section 614 is

inapplicable. Specifically, as pointed out by NCTA, Section 614 applies

only to qualified local commercial television signals (including

qualified LPTV stations), and does not apply to either non-local or

non-qualified local commercial broadcast signals. Therefore, where the

broadcaster's signal is not eligible for must-carry rights, either by

failure to meet the requisite definitions or because the broadcast

station is outside the local market (ADI), and where, therefore Section

614 is inapplicable, the broadcaster's rights to freely negotiate for

the carriage of that signal pursuant to retransmission consent includes

the right to negotiate for partial carriage of the signal.

72. Section 325 states that no cable system or other multichannel

video programming distributor shall without consent retransmit ``the

signal of a broadcasting station, or any part thereof, * * *'' In

contrast, Section 614(b)(3)(B), the must-carry provision, states that

the cable operator shall carry ``the entirety of the program schedule *

* *.'' Further, Section 325(b)(4) states that if a station elects

retransmission consent, ``the provisions of section 614 shall not apply

to the carriage of the signal of such station by such cable system.''

While, at first blush, the statutory language appears to permit

broadcasters to negotiate with cable operators for retransmission

consent for any part of their signal (i.e., any programs), we now

believe that a more correct and harmonious reading of Section 614 and

325 together leads to an interpretation that Congress intended cable

systems to carry all the programming of must-carry eligible stations

regardless of whether the broadcast station opts for must-carry status

or not. While it is clear under Section 325 that some negotiated

partial carriage is permitted, Section 325 does not mandate the

availability of partial carriage in all negotiations. Given this fact,

and the congressional emphasis on full carriage for must-carry

qualified stations (discussed above), we believe the statutory

provisions read in concert suggest that qualified must-carry stations

should, as a matter of policy, be carried in their entirety even if

they are carried pursuant to retransmission consent.

73. This interpretation is bolstered by Congress' direction to the

Commission in Section 325(b)(3)(A) to fashion ``regulations to govern

the exercise by television broadcast stations of the right to grant

retransmission consent under this subsection and of the right to signal

carriage under section 614.'' By including this provision in Section

325, we believe that Congress recognized the interplay between the two

sections and gave the Commission authority to fill in regulatory gaps.

Thus, at the very least, the Commission has the flexibility to require

carriage in the entirety for qualified must carry stations carried

pursuant to retransmission consent to ensure that the basic underlying

objectives of the 1992 Cable Act relating to local broadcast service

would be fulfilled. Otherwise, the statutory goals at the heart of

Sections 614 and 325--to place local broadcasters on a more even

competitive level and thus help preserve local broadcast service to the

public--could easily be undermined.

74. The Senate Report confirms this interpretation by stating that

the ``rights granted to stations under section 325 and under section

614 and 615 can be exercised harmoniously, and it anticipates that the

FCC will undertake to promulgate regulations which will permit the

fullest applications of whichever rights each television station elects

to exercise.'' We believe that our rules should provide the wildest

possible range of opportunity for both broadcast stations and cable

operators, where the must-carry provisions are not applicable. Thus,

any station which is eligible for must-carry status must be carried, if

at all, in its entirety regardless of whether the station elects must-

carry or retransmission consent. Similarly, any station which is not

eligible for must-carry status under Section 614, because it is not a

local commercial broadcast station, or does not qualify under the

definitions of Section 614, may negotiate for partial carriage. Thus,

we conclude, based upon a reading of both Sections 614 and 325, that

broadcast stations whose signals are entitled to must-carry but are

instead carried pursuant to retransmission consent are not permitted to

negotiate for carriage of less than their entire signal. We note that

this interpretation of the statute is supported by the legislative

history which notes that the retransmission consent provision was

drafted in such a way as to promote the ``established relationships

between broadcasters and cable systems,'' and to ``minimize unnecessary

disruption to broadcasters and cable operators.''

75. The 1992 Cable Act was specific in stating that ``[c]able

systems carrying the signals of broadcast stations, whether pursuant to

an agreement with the station or pursuant to the provisions of [must-

carry], will continue to have the authority to retransmit the programs

carried on those signals under the section 111 compulsory license.''

The Committee emphasized that nothing in the 1992 Cable Act was

``intended to abrogate or alter existing program licensing agreements

between broadcaster and program suppliers, or to limit the terms of

existing or future licensing agreements.''

76. We continue to intepret retransmission consent as a new right

given to the broadcaster under the terms of the 1992 Cable Act and as a

right separate from the right of the underlying copyright holder and do

not believe that our reconsideration decision in any way undermines the

separate nature of these rights or creates a conflict between

communications and copyright based policies. Congress indicated that it

intended ``to establish a marketplace for the disposition of the rights

to retransmit broadcast signals.'' As stated in the Report and Order,

the right involved is one which may be freely bargained away in future

programming contracts. Although NAB and INTV argue that carriage in the

entirety is required to ensure the continued validity of both the

retransmission consent right and the current compulsory copyright, we

do not see how providing broadcasters and cable operators with

additional flexibility to negotiate retransmission agreements for

signals not eligible for must-carry status algers the nature of the

rights granted under Sections 325 and 614 in any way. Indeed, according

this additional flexibility is consistent with interpreting the right

in question as a new right subject to the control of the station

licensee. To the extent these rights have been bargained away, the

remaining rights that have not been disposed of still remain under the

control of the station involved. As noted in paragraph 99, a contrary

interpretation would not only deprive broadcasters and cable operators

of the ability to negotiate mutually advantageous arrangements for the

carriage of portions of distant signals but would negate the

functioning of various portions of Section 111 of the Copyright Act and

of the Commission's rules which specifically contemplate the

possibility that portions of distant signals may be carried.

Accordingly, we interpret Section 325 to provide that broadcasters may

bargain with cable operators for the right to carriage of any part of

the broadcast signal provided that such station is not eligible under

the provisions of Section 614, either because it is not a local

commercial broadcast signal or it does not qualify for mandatory

carriage. ``Carriage in the entirety'' remains a requirement with

respect to signals eligible for mandatory carriage under the provisions

of Section 614. Sections 76.62(a) and 76.64(k) are being revised to

reflect this change.

E. Retransmission Consent Contracts

77. In the Report and Order we specifically prohibited exclusive

retransmission consent agreements between television broadcast stations

and cable operators. This provision forbids a television station from

making an agreement with one MVPD for carriage, exclusive of other

MVPDs. After reviewing the comments filed in response to the Notice, we

concluded that this prohibition is necessary in light of the concerns

that led Congress to regulate program access and cable signal carriage

agreements. We then stated that we would revisit the issue in three

years. We reject petitioners arguments that prohibiting exclusive

retransmission consent agreements is not warranted and is not supported

by the 1992 Cable Act. We are adding a new paragraph (m) to Sec. 76.64

of our rules to reflect this decision. As we indicated in the Report

and Order, we will consider the need for such a prohibition against

exclusive retransmission consent agreements in three years.

F. Other Matters

78. Retransmission Consent and Network Nonduplication Protection.

In the Report and Order, we concluded that local television stations

electing retransmission consent should continue to be entitled to

invoke network nonduplication or syndicated exclusivity protection,

whether or not they are carried by the cable system. Commenters had

sought to eliminate exclusivity rights for stations choosing

retransmission consent. We found, however, that the legislative history

addressed this matter and that Congress intended for exclusivity

protection to apply under its regulatory framework.

79. We affirm our decision to allow stations electing

retransmission consent to assert network nonduplication or syndicated

exclusivity protection as provided in the rules.\26\ We observe that

this issue was considered earlier in this proceeding in response to a

petition from NCTA, which we denied in the Report and Order. Parties

have provided no new arguments nor additional evidence to convince us

that our decision conflicts with the intent of Congress. We also do not

find that there is a conflict between retransmission consent rights and

exclusivity rights. Network nonduplication and syndicated exclusivity

rights protect the exclusivity that broadcasters have acquired from

their program suppliers, including their network partners, while

retransmission consent allows broadcasters to control the

redistribution of their signals. Both policies promote the continued

availability of the over-the-air television system, a substantial

government interest in Congress' view.

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\26\We note that we also considered whether to modify the

geographic zone applicable to exclusivity protection to make it

consistent with the definition of a local television market as the

ADI, as specified in the 1992 Cable Act. We declined to make such a

change.

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80. We also note that cable operators believe that broadcasters

have an advantage in the negotiations for retransmission agreements due

to their ability to assert their exclusivity rights, while broadcasters

believe the reverse. Local broadcast stations are an important part of

the service that cable operators offer and broadcasters rely on cable

as a means to distribute their signals. Thus, we believe that there are

incentives for both parties to come to mutually beneficial

arrangements. Moreover, the allegations that local stations electing

retransmission consent would not be carried due to their inability to

successfully negotiate agreements with cable operators and then assert

their exclusivity rights and deprive subscribers of programming was

speculative at the time the reconsideration petitions were filed. Now

that the retransmission consent provisions are in effect, there is no

evidence that subscribers are being deprived of network programming. We

note that there are only limited situations where local stations are

not carried. Therefore, the dire consequences predicted do not exist

and we continue to believe that stations should receive the exclusivity

protection to which they are entitled.

IV. Administrative Matters

Regulatory Flexibility Analysis

81. Pursuant to the Regulatory Flexibility Act of 1980, the

Commission included a final analysis in the Report and Order detailing

(i) the need for and purpose of the rules, (ii) the summary of issues

raised by public comment in response to the initial regulatory

flexibility analysis, Commission assessment, and changes made as a

result, and (iii) significant alternatives considered and rejected. No

substantive changes have occurred pertaining to the final analysis as a

result of the petitions for reconsideration.

Paperwork Reduction Act

82. The proposal contained herein has been analyzed with respect to

the Paperwork Reduction Act of 1980 and found to impose a new or

modified information collection requirement on the public.

Implementation of any new or modified requirement will be subject to

approval by the Office of Management and Budget as prescribed by the

Act.

Ordering Clauses

83. Accordingly, it is ordered, That pursuant to the authority

contained in Sections 4 (i) and (j), and 303 of the Communications Act

of 1934, as amended, and the Cable Television Consumer Protection and

Competition Act of 1992, Pub. L. 102-385, Parts 73 and 76 of the

Commission Rules, 47 CFR Parts 73 and 76 are amended as set forth

below.

84. It is further ordered, That rule provisions of Part 76 of the

rules set forth below shall be effective 30 days after publication in

the Federal Register. Rule provisions of Part 73 of the rules set forth

below shall be effective upon approval from OMB.

85. It is further ordered, That Secs. 76.62 and 76.64 of the

Commission's rules which were stayed by Order of the Commission on

October 5, 1993 are revised as indicated below and the Stay Order is

lifted as of the effective date of these rules.

86. It is further ordered, That the petitions for reconsideration

are granted in part and denied in part only to the extent indicated in

this Memorandum Opinion and Order, except that the Petition for

Reconsideration filed by Western Broadcasting of Puerto Rico is

dismissed without prejudice.

List of Subjects

47 CFR Part 73

Radio broadcasting.

47 CFR Part 76

Cable television.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Amendatory Text

Part 73 of Chapter I of Title 47 of the Code of Federal Regulation

is amended as follows:

PART 73--BROADCAST RADIO SERVICES

1. The authority citation for part 73 is revised to read as

follows:

Authority: Secs. 303, 48 Stat., as amended, 1082; 47 U.S.C. 154,

as amended.

2. Section 73.3526 is amended by adding paragraph (g) to read as

follows:

Sec. 73.3526 Local public inspection file of commercial stations.

* * * * *

(g) Statements of a commercial television station's election with

respect to either must-carry or retransmission consent as defined in

Sec. 76.64 of this chapter shall be retained in the public file of the

television station for the duration of the three year election period

to which the statement applies.

3. Section 73.3527 is amended by adding paragraph (g) to read as

follows:

Sec. 73.3527 Local public inspection file of noncommercial educational

stations.

* * * * *

(g) Noncommercial television stations requesting mandatory carriage

on any cable system pursuant to Sec. 76.56 of this chapter shall place

a copy of such request in its public file and shall retain both the

request and relevant correspondence for the duration of any period to

which the statement applies.

Part 76 of Chapter I of Title 47 of the Code of Federal Regulations

is amended as follows:

PART 76--CABLE TELEVISION SERVICE

1. The authority citation of part 76 is revised 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. Sec. 152, 153, 154, 301, 303, 307, 308, 309; Secs. 612, 614-

615, 623, 632 as amended, 106 Stat. 1460, 47 U.S.C. 532; Sec. 623,

as amended, 106 Stat. 1460; 47 U.S.C. 532, 533, 535, 543, 552.

2. Section 76.7(c)(4) (i), (ii), and (iii) are revised and a new

paragraph (c)(4)(iv) is added to read as follows:

Sec. 76.7 Special relief and must-carry complaint procedures.

* * * * *

(4)(i) Must-carry complaints filed pursuant to Sec. 76.61(a)

(Complaints regarding carriage of local commercial television stations)

shall be accompanied by the notice from the complainant to the cable

television system operator (Sec. 76.61(a)(1)), and the cable television

system operator's response (Sec. 76.61(a)(2)), if any. If no timely

response was received, the complaint should so state.

(ii) Must-carry complaints filed pursuant to Sec. 76.61(b)

(Complaints regarding carriage of qualified local NCE television

stations) should be accompanied by any relevant correspondence between

the complainant and the cable television system operator.

(iii) No must-carry complaint filed pursuant to Sec. 76.61(a)

(complaints regarding local commercial television stations) will be

accepted by the Commission if filed more than sixty (60) days after the

date of the specific event described in this paragraph. Must-carry

complaints filed pursuant to Sec. 76.61(a) should affirmatively state

the specific event upon which the complaint is based, and shall

establish that the complaint is being filed within sixty (60) days of

such specific event. With respect to such must-carry complaints, the

specific event shall be

(A) The denial by a cable television system operator of request for

carriage or channel position contained in the notice required by

Sec. 76.61(a)(1), or

(B) The failure to respond to such notice within the time period

allowed by Sec. 76.61(a)(2).

(iv) With respect to must-carry complaints filed pursuant to

Sec. 76.61(b), such complaints may be filed at any time the complainant

believes that the cable television system operator has failed to comply

with the applicable provisions of subpart D of this part.

* * * * *

3. Section 76.55 is amended by revising paragraph (a)(2), adding a

note after paragraph (a)(3)(iii), adding new paragraph (b)(3), a note

following paragraph (d)(6), and revising the note following paragraph

(e)(3), to read as follows:

Sec. 76.55 Definitions applicable to the must-carry rules.

* * * * *

(a) * * *

(2) Is owned and operated by a municipality and transmits

noncommercial programs for educational programs for educational

purposes, as defined in Sec. 73.621 of this chapter, for at least 50

percent of its broadcast week.

(3) * * *

(iii) * * *

Note to paragraph (a): For the purposes of Sec. 76.55(a),

``serving the franchise area'' will be based on the predicted

protected contour of the NCE translator.

(b) * * *

(3) Notwithstanding the provisions of this section, a cable

operator shall not be required to add the signal of a qualified local

noncommercial educational television station not already carried under

the provision of Sec. 76.56(a)(5), where such signal would be

considered a distant signal for copyright purposes unless such station

agrees to indemnify the cable operator for any increased copyright

liability resulting from carriage of such signal on the cable system.

* * * * *

(d) * * *

(6) * * *

Note to paragraph (d): For the purposes of this section, a good

quality signal shall mean a signal level of either -45 dBm for UHF

signals or -49 dBm for VHF signals at the input terminals of the

signal processing equipment, or a baseband video signal.

(e) * * *

(3) * * *

Note to paragraph (e): For the 1993 must-carry/retransmission

consent election, the ADI assignments specified in the 1991-1992

Television Market Guide will apply.

* * * * *

4. Section 76.56 is amended by revising paragraphs (a)(1)(iii),

(a)(5) and (b)(1) to read as follows:

Sec. 76.56 Signal carriage obligations.

(a) * * *

(1) * * *

(iii) Systems with more than 36 usable activated channels shall be

required to carry the signals of all qualified local NCE television

stations requesting carriage, but in any event at least three such

signals; however a cable system with more than 36 channels shall not be

required to carry an additional qualified local NCE station whose

programming substantially duplicates the programming of another

qualified local NCE station being carried on the system.

* * * * *

(5) Notwithstanding the requirements of paragraph (a)(1) of this

section, all cable operators shall continue to provide carriage to all

qualified local NCE television stations whose signals were carried on

their systems as of March 29, 1990. In the case of a cable system that

is required to import a distance qualified NCE signal, and such system

imported the signal of a qualified NCE station as of March 29, 1990,

such cable system shall continue to import such signal until such time

as a qualified local NCE signal is available to the cable system. This

requirements may be waived with respect to a particular cable operator

and a particular NCE station, upon the written consent of the cable

operator and the station.

(b) * * *

(1) A cable system with 12 or fewer usable activated channels, as

defined in Sec. 76.5(oo), shall carry the signals of at least three

qualified local commercial television stations, except that if such

system serves 300 or fewer subscribers it shall not be subject to these

requirements as long as it does not delete from carriage the signal of

a broadcast television station which was carried on that system on

October 5, 1992.

* * * * *

5. Section 76.57(a) is revised to read as follows:

Sec. 76.57 Channel positioning.

(a) At the election of the licensee of a local commercial broadcast

television station, and for the purpose of this section, a qualified

low power television station, carried in fulfillment of the must-carry

obligations, a cable operator shall carry such signal on the cable

system channel number on which the local commercial television station

is broadcast over the air, or on the channel on which it was carried on

July 19, 1985, or on the channel on which it was carried on January 1,

1992.

* * * * *

6. Section 76.60 is amended by adding a new paragraph (c) to read

as follows:

Sec. 76.60 Compensation for carriage.

* * * * *

a retransmission consent agreement, even if such station will be

counted towards the must-carry complement, as long as all other

applicable rules are adhered to.

7. Section 76.62(a) is revised to read as follows:

Sec. 76.62 Manner of carriage.

(a) Cable operators shall carry the entirety of the program

schedule of any television station (including low power television

stations) carried by the system unless carriage of specific programming

is prohibited, and other programming authorized to be substituted,

under Sec. 76.67 or subpart F of part 76, or unless carriage is

pursuant to a valid retransmission consent agreement for the entire

signal or any portion thereof as provided in Sec. 76.64.

* * * * *

8. Section 76.64 is amended by revising paragraphs (b)(2) (e),

(f)(4) and (k) and by adding paragraphs (l), (m) and (n) to read as

follows:

Sec. 76.64 Retransmission consent.

* * * * *

(b) * * *

(2) The multichannel video programming distributor obtains the

signal of a superstation that is distributed by a satellite carrier and

the originating station was a superstation on May 1, 1991, and the

distribution is made only to areas outside the local market of the

originating station; or

* * * * *

(e) The retransmission consent requirements of this section are not

applicable to broadcast signals received by master antenna television

facilities or by direct over-the-air reception in conjunction with the

provision of service by a multichannel video program distributor

provided that the multichannel video program distributor makes

reception of such signals available without charge and at the

subscribers option and provided further that the antenna facility used

for the reception of such signals is either owned by the subscriber or

the building owner; or under the control and available for purchase by

the subscriber or the building owner upon termination of service.

(f) * * *

(4) New television stations shall make their initial election any

time between 60 days prior to commencing broadcast and 30 days after

commencing broadcast; such initial election shall take effect 90 days

after they are made.

* * * * *

(k) Retransmission consent agreements between a broadcast station

and a multichannel video programming distributor shall be in writing

and shall specify the extent of the consent being granted, whether for

the entire signal or any portion of the signal.

(l) A cable system commencing new operation is required to notify

all local commercial and noncommercial broadcast stations of its intent

to commence service. The cable operator must send such notification, by

certified mail, at least 60 days prior to commencing cable service.

Commercial broadcast stations must notify the cable system within 30

days of the receipt of such notice of their election for either must-

carry or retransmission consent with respect to such new cable system.

If the commercial broadcast station elects must-carry, it must also

indicate its channel position in its election statement to the cable

system. Such election shall remain valid for the remainder of any

three-year election interval, as established in Sec. 76.64(f)(2).

Noncommercial educational broadcast stations should notify the cable

operator of their request for carriage and their channel position. The

new cable system must notify each station if its signal quality does

not meet the standards for carriage and if any copyright liability

would be incurred for the carriage of such signal. Pursuant to

Sec. 76.57(e), a commercial broadcast station which fails to respond to

such a notice shall be deemed to be a must-carry station for the

remainder of the current three-year election period.

(m) Exclusive retransmission consent agreements are prohibited. No

television broadcast station shall make an agreement with one

multichannel distributor for carriage, to the exclusion of other

multichannel distributors.

(n) A multichannel video programming distributor providing an all-

band FM radio broadcast service (a service that does not involve the

individual processing of specific broadcast signals) shall obtain

retransmission consents from all FM radio broadcast stations that are

included on the service that have transmitters located within 92

kilometers (57 miles) of the receiving antenna for such service.

Stations outside of this 92 kilometer (57 miles) radius shall be

presumed not to be carried in an all-band reception mode but may

affirmatively assert retransmission consent rights by providing 30 days

advance notice to the distributor.

[FR Doc. 94-29443 Filed 12-2-94; 8:45 am]

BILLING CODE 6712-01-M

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.