Direct Broadcast Satellite Public Interest Obligations

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 100

[MM Docket 93-25; FCC 98-307]

Direct Broadcast Satellite Public Interest Obligations

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission imposes requirements on

Direct Broadcast Satellite Service (DBS) providers to comply with the

political broadcast rules of the Communications Act of 1934, as

amended, and mandates that DBS providers reserve between 4 percent and

7 percent of their channel capacity exclusively for ``noncommercial

programming of an educational or informational nature.'' These rules

will provide for the carriage on DBS systems of qualified political

candidates for national office and will make DBS channel capacity

available to ``national educational programming suppliers,'' upon

reasonable prices, terms, and conditions.

DATES: Effective June 15, 1999 except for Sec. 100.5(c)(6) which

contains information collection requirements that are not effective

until approved by the Office of Management and Budget. The FCC will

publish a document in the Federal Register announcing the effective

date for that section. Written Comments regarding the Paperwork

Reduction Act requirements in Sec. 100.5(c)(6) should be submitted on

or before April 9, 1999.

ADDRESSES: Comments regarding the paperwork reduction act requirements

in Sec. 100.5(c)(6) should be submitted to Les Smith at 445 12th Street

S.W., Rm. 1-A804, Washington D.C. 20554 or via internet at

[email protected]; phone 202-418-0217.

FOR FURTHER INFORMATION CONTACT: For more information regarding the

Report and Order contact Rosalee Chiara (202) 418-0754 or James Taylor

(202) 418-2113 of the International Bureau. For more information

regarding the information collections and to submit comments, contact

Les Smith at 202-418-0217; 445 12th Street S.W., Rm. 1-A804, Washington

D.C. 20554 or via internet at [email protected], and Timothy Fain, OMB

Desk Officer, Rm. 10236 NEOB, 725 17th Street, N.W., Washington, D.C.

20503 or [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report

and Order in MM Docket No. 93-25; FCC 98-307, adopted November 19, 1998

and released on November 25, 1998. The complete text of this Report and

Order is available for inspection and copying during normal business

hours in the FCC Reference Center (Room), 445 12th Street, S.W.

Washington, D.C. 20554, and also may be purchased from the Commission's

copy contractor, International Transcription Service, Inc., 1231 20th

Street, N.W., Washington, DC 20036, telephone: 202-857-3800, facsimile:

202-857-3805.

Summary of Report and Order

1. On March 2, 1993 the Commission released a Notice of Proposed

Rulemaking to implement Section 25 of the 1992 Cable Television

Consumer Protection and Competition Act of 1992

[[Page 5952]]

(``1992 Cable Act'').1 Specifically, Section 25 of the 1992

Cable Act, which added new Section 335 to the Communications Act of

1934, as amended, (the Act) required the Commission to impose on

providers of Direct Broadcast Satellite Service (DBS), the political

programming requirements of Sections 312(a)(7) and 315 of the Act and

adopt rules requiring the set aside of channels for noncommercial

educational and informational programming. In addition, Section 25 also

directed the Commission to examine the opportunities for localism.

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\1\ In the Matter of Implementation of Section 25 of the Cable

Television Consumer Protection and Competition Act of 1992, Direct

Broadcast Satellite Public Service Obligations, 8 FCC Rcd. 1589

(1993).

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2. On September 16, 1993 the United States District Court for the

District of Columbia held that Section 25 of the 1992 Cable Act was

unconstitutional.2 On August 30, 1996, the United States

Court of Appeals for the District of Columbia Circuit reversed the

District Court.3 In light of the interval between the

original Notice of Proposed Rulemaking and the appellate court

decision, the Commission released a Public Notice on January 31, 1997

seeking to update and refresh the record.4 Following review

of the comments provided, the Commission released the Report and Order

summarized here.

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\2\ Daniels Cablevision, Inc. v. United States, 835 F. Supp. 1

(D.D.C. 1993).

\3\ Time Warner Entertainment Co., L.P. v. FCC, 93 F.3d 957

(D.C. Cir. 1996).

\4\ Public Notice (No. 72078, rel. January 31, 1997).

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3. Entities responsible for complying with DBS public interest

obligations. The Commission will hold part 100 and part 25 DBS

licensees ultimately responsible for compliance with these rules.

Licensees will, however, be able to demonstrate compliance with the

public service obligations by relying on certifications from

distributors that expressly state that they have complied with the

public service obligations. Satellites licensed under Part 25, but

operating in the C-band, are not covered by these rules because the

statute specifies only Ku-band licensees. In the case of Part 25

licensees, the Commission has imposed a threshold for inclusion under

the rules that requires an entity control at least enough programming

channels so that 4 percent of the total programming channels available

for video yields a set-aside of at least one noncommercial, educational

or informational programming channel.

4. Application of public service obligations to foreign satellites

entering the U.S. Market. Section 25.137 of the Commission's rules

requires that earth stations operating with non-U.S. licensed

satellites be licensed by the Commission. As a condition of its

license, the Commission will require the earth station licensee

communicating with a non-U.S. licensed satellite to comply with Section

335 public interest rules.

5. Application of the political broadcasting provisions of Section

335(a). Section 335(a) of the Act states, among other things, that any

regulations shall, at a minimum, impose the political broadcast rules

of Sections 312 and 315 of the Act.

6. Access for Federal Candidates. Section 312(a)(7) of the Act

requires broadcasters to allow legally qualified candidates for federal

office reasonable access to their facilities. Access can be provided on

a free or paid basis. Since the passage of Section 312(a)(7), the

Commission's policy has generally been to defer to the reasonable, good

faith judgment of licensees as to what constitutes ``reasonable

access'' under the circumstances present in a particular case. Factors

the Commission would consider in reviewing such a case include the

number of candidates requesting time, the technical difficulties in

satisfying the request, and the availability of reasonable

alternatives.

7. The Commission will monitor DBS providers' performance in this

area so that it can modify the Commission's rules if necessary and as

experience dictates. The Commission will require DBS providers to

maintain a file available to the public at the providers' headquarters

containing requests for political advertising time and disposition of

those requests. Where DBS providers carry the programming of a

terrestrial broadcast television station, it is the responsibility of

the terrestrial broadcaster and not the DBS provider to satisfy the

political broadcasting requirements of Sections 312(a)(7).

8. Equal Opportunities. In conformance with statutory mandate, the

Commission will apply the equal opportunities provisions of Section

315(a) of the Act, Section 73.1940 of the Commission's rules, and the

policies delineated in prior Commission orders to DBS providers. DBS

providers will be required to ensure, by contractual means or

otherwise, that these rules are followed. If one legally qualified

candidate is afforded access to a DBS system, all other candidates for

the same office who make timely requests must be afforded that same

opportunity.5 To ensure that competing candidates will be

able to ascertain what equal opportunities they are entitled to, we

will require the DBS provider to maintain a political file similar to

the one maintained by broadcasters.6 The Report and Order

retains the definitions of ``use'' and ``legally qualified candidate''

in current rules and policies. The Commission will resolve issues

involving DBS providers' equal opportunities obligations in the context

of particular cases.

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\5\ 47 CFR 73.1941(c) (a request must be made within one week of

the day on which the first prior use giving rise to the right of

equal opportunities occurred).

\6\ See 47 CFR 73.1943 (requiring the licensee to keep and

permit public inspection of a complete record of all requests for

broadcast time made and a notation showing the disposition, charges,

etc.).

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9. Lowest Unit Charge. If advertising is sold on DBS systems,

legally qualified candidates must be afforded the benefit of the lowest

unit charge (LUC) during the pre-election periods prescribed by Section

315 of the Act. Section 315(b) of the Act and Section 73.1942 of the

Commission's rules provide that broadcasters may not charge any legally

qualified candidate more than the LUC for advertising on the station

during certain periods preceding the election. Although DBS providers

do not currently have commercial rates on which to base a LUC

determination, they can set a reasonable rate, based on consideration

of marketplace factors such as what other media charge to reach a

similar audience if they sell time to candidates pursuant to Sections

312 or 315 of the Act or otherwise choose to do so. DBS providers, like

broadcasters and cable operators, must disclose to candidates

information about rates and discount privileges and give any discount

privileges to candidates. A DBS provider may make time available

without charge on a nondiscriminatory basis.

10. Opportunities for Localism. Section 335(a) also requires the

Commission ``to examine the opportunities that the establishment of

direct broadcast satellite service provides for the principle of

localism under [the] Act, and the methods by which such principle may

be served through technological and other developments in, or

regulation of, such service.'' Although there have been significant

technological developments in the DBS industry since the Commission

first developed rules for DBS, and some DBS providers are providing

limited local service, no DBS provider has the technical capability to

provide local service to all markets in the country. If legal and

technical issues regarding localized programming are resolved, the

Commission may consider

[[Page 5953]]

requiring DBS providers to offer some amount of locally-oriented

programming.

11. Public Interest or Other Obligations. The Report and Order does

not impose upon the DBS industry additional programming requirements.

The Commission found that DBS is a relatively new entrant attempting to

compete with an established, financially stable cable industry.

Although the DBS industry has grown significantly since 1992, it still

claims just under eight million subscribers in contrast to cable's 64

million customers. Additional obligations on DBS providers might hinder

the development of DBS as a viable competitor to cable. The Commission

concluded that, although Section 335(a) provides ample authority to

impose other public interest programming requirements upon DBS

providers, it would not exercise its authority at this time. If it

becomes evident that there is a need, the Commission will reconsider

this conclusion.

12. Carriage Obligations for Educational and Informational

Programming. The 1992 Cable Act requires the Commission to adopt rules

requiring DBS providers to make available channel capacity for

programming of an educational or informational nature. The Commission

concluded that discrete channels should be reserved to fulfill the

noncommercial reservation requirements of Section 335(b) to assure

continuity, predictability and easier monitoring and enforcement.

Requiring the set aside of discrete channels will make it easier for

consumers to locate such programming on one or more particular

channels.

13. Determination of Total Channel Capacity. For the purpose of

applying Section 335(b), channel capacity should be based on the total

channel capacity that is being, or could be, used to provide video

programming. Barker and other informational guide channels will be

included as available channels for determining the required set aside,

as they are video channels supplied to the customers. In addition,

unused channels that could be used to provide DBS service will be

included in the set aside calculation. Channels used for audio or other

non-video services will not be included.

14. Because advances in digital compression technology will

continue to expand the number of programming channels that can be

offered to customers in a given amount of spectrum and the number of

available channels will change depending on the complexity of the type

of programming transmitted, the total number of programming channels

offered by a DBS licensee on all its satellites can vary on a weekly or

even a daily basis. To address these fluctuations, each DBS licensee

will have to calculate on a quarterly basis the number of channels

available for video programming on all its satellites. Each DBS

licensee will then use the average of these quarterly measurements

during the year to ascertain the total number of channels for purposes

of determining the number of reserved channels. DBS providers will be

required to record these quarterly channel measurements and average

calculations as well as their response to any capacity changes in logs

kept at their main offices and available to the Commission and to the

public.

15. Reservation Percentage. The Commission concluded that DBS

providers will be required to reserve four percent of their channel

capacity exclusively for noncommercial educational and informational

programming. In the event that the four percent calculation creates any

fraction of a channel, the DBS provider will round the calculation

upward.7 The public interest programming provided for in

this order must be made available to all of a DBS provider's

subscribers without additional charge.

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\7\ For example, if a DBS provider supplies 120 video channels

to customers, the provider will have to reserve initially five

channels for noncommercial programming of an educational or

informational nature. Four percent of 120 channels amounts to 4.8

channels. Under the rule this figure would be rounded up to 5

channels.

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16. Impact on Existing Programming Contracts. The Commission

concluded that the reservation requirement applies notwithstanding

existing programming contracts and DBS providers will have to make

available sufficient channel capacity to fulfill the reservation

requirement, regardless of existing programming contracts.

17. National Educational Programming Supplier. Pursuant to Section

335(b)(3), DBS providers must make the reserved channels available to

``national educational programming suppliers'' upon certain terms.

Section 335(b)(5)(B) provides that the term national educational

programming supplier ``includes any qualified noncommercial educational

television station, other public telecommunications entities, and

public or private educational institutions.'' Neither this section of

the statute nor the legislative history define ``noncommercial

educational broadcast station,'' ``public broadcasting entity'' or

``public telecommunications entity.'' In the absence of any other

Congressional guidance the Commission looked to other provisions of the

Act in which those terms are defined such as Section 397 of the Act.

18. Section 397(6) of the Act defines a ``noncommercial educational

broadcast station'' as a television or radio broadcast station that (i)

``is eligible to be licensed by the Commission as a noncommercial

educational radio or television broadcast station and which is owned

and operated by a public agency or nonprofit private foundation,

corporation, or association,'' or (ii) ``is owned and operated by a

municipality and which transmits only noncommercial programs for

educational purposes.'' The Commission found it appropriate to use the

definition of noncommercial educational television station and public

telecommunication entity used in the noncommercial broadcast context

and noted that Section 615(1) of the Act further defines such a station

to include any television broadcast station that has as its licensee an

entity eligible to receive a community service grant from the

Corporation for Public Broadcasting.

19. Section 397(12) of the Act defines ``public telecommunications

entity'' as any enterprise which (i) ``is a public broadcast station or

a noncommercial telecommunications entity'' and (ii) ``disseminates

public telecommunications services to the public.'' A ``noncommercial

telecommunications entity'' is defined as ``any enterprise which is

owned and operated by a state, a political or special purpose

subdivision of a state, a public agency, or a nonprofit private

foundation, corporation or association, and has been organized

primarily for the purpose of disseminating audio or video noncommercial

educational and cultural programs to the public by means other than a

primary television or radio broadcast station.'' 8 These

entities are required to disseminate ``public telecommunications

services,'' which are defined as noncommercial educational and cultural

radio and television programs, and related noncommercial instructional

or informational material.9

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\8\ 47 U.S.C. 397(7). The means of dissemination include, but

are not limited to, coaxial cable, optical fiber, broadcast

translators, cassettes, discs, microwave, or laser transmission

through the atmosphere.

\9\ 47 U.S.C. 397(14).

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20. Section 397 of the Act does not define the term ``public or

private educational institutions.'' The Commission looked elsewhere for

guidance in defining that term including incorporating the eligibility

criteria established by the rules for instructional

[[Page 5954]]

television fixed stations (``ITFS'') contained in Section 74.932 of the

Commission's rules because the types of services provided by

educational institutions and ITFS are analogous.10 Section

74.932(a) provides that a license for an ITFS will be issued only to an

accredited institution or to a governmental organization engaged in the

formal education of enrolled students or to a nonprofit organization

whose purposes are educational and include providing educational and

instructional television material to such accredited institutions and

governmental organizations. The Commission adopted the ITFS criteria in

interpreting ``public and private educational institutions.''

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\10\ 47 CFR 74.932(a). ITFS are intended primarily to provide

formal educational or cultural development to students enrolled in

accredited public or private institutions or colleges or

universities.

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21. Additional Entities. The Commission determined that the list of

entities in Section 335(b)(5)(B) was not intended to be an exclusive

list of entities that can qualify as national educational programming

suppliers but a nonexclusive list that may be enlarged upon. Although

the Commission did not interpret Section 335(b)(5)(B) as an exclusive

list of eligible program suppliers, the Commission found that Congress

intended to limit eligibility to entities that share the same essential

characteristics as those listed.

22. The Report and Order states that the term ``national

educational programming supplier'' in Section 335(b)(5)(B) includes

only noncommercial entities with an educational mission. The term

should not be interpreted as including ``commercial'' entities

organized for profit-making purposes. The Commission found that the

eligibility of a programming supplier under the statute should

depend on its noncommercial character, not merely whether its

programming contains commercials.

23. The Commission also found that the tax code definition of non-

profit will apply to qualify an entity as an eligible national

educational programming supplier.11 Thus, an entity with an

educational mission that is organized under the tax code as a nonprofit

corporation will be eligible as a national educational programming

supplier. An entity that is not organized as a nonprofit corporation

may also qualify if it shows to the Commission's satisfaction that it

is organized for a noncommercial purpose and has an educational

mission. The Report and Order permits joint ventures as long as

participants demonstrate that the joint venture is noncommercial within

the meaning of Section 335 and that the venture's mission is

educational.

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\11\ 26 U.S.C. 501(c)(3).

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24. Definition of the Term ``National''. The Commission interpreted

the term ``national'' broadly so as to include local, regional, or

national domestic nonprofit entities that qualify under the definitions

listed above and produce noncommercial programming designed for a

national audience. The Commission also found that the definition should

include international nonprofit programmers that satisfy the terms of

the definitions in Section 397 of the Act and the Commission's ITFS

rules.

25. Noncommercial Programming of an Educational or Informational

Nature. Section 335(b)(1) requires that the reserved channels be used

``exclusively for noncommercial programming of an educational or

informational nature.'' The Commission concluded that the rules need

not elaborate on the term ``educational and informational'' programming

and that a DBS provider can comply with the reservation requirement by

affording access to programming supplied by specific categories of

noncommercial entities. The Commission will reconsider this conclusion,

however, if it appears that more specific guidance on the definition of

this term is necessary.

26. Implementation of Section 335(b)(3); Editorial Control. Section

335(b)(3) requires DBS providers to make channel capacity available to

national educational programming suppliers but prohibits the DBS

provider from exercising any editorial control over any video

programming provided on the reserved channels. The Commission concluded

that the best reading of the editorial control language is that it

prohibits DBS providers from controlling the selection of, or in any

way editing or censoring, individual programs that will be carried on

the reserved channels. The Report and Order does not, however, prohibit

DBS operators from selecting among national educational programming

suppliers so long as the DBS provider does not refuse to make unused

reserved capacity available to qualified suppliers. Nor does it

prohibit DBS providers from refusing to carry non-qualifying

programming or ineligible programmers.

27. The Commission rejected arguments that the interpretation of

Section 335 is constrained by similar language in the cable leased

access provision. Section 335 only prohibits DBS providers from

exercising ``editorial control over programming,'' while the cable

leased access provision, Section 612, also prohibits cable operators

from ``in any other way consider[ing] the content of such

programming.'' The Commission found that omission of this last clause

from the DBS provision suggests that DBS providers are not necessarily

barred from considering certain factors relating to programming in

selecting programmers, but are prohibited from exercising control over

such programming. Thus, DBS providers might consider a variety of

factors in deciding which programmers to select, including the broad

genres of programming they plan to provide (e.g., cultural,

documentary, children's educational), the programmers' experience,

reliability, and reputation for quality programming, and the quality of

programming they may have produced in the past. They may not, however,

require the programmers they select to include particular series or

programs on their channels as a condition of carriage. If in the

future, it appears that DBS operators seek to use the selection process

as a means of improperly influencing programming provided on the

reserved channels, the Commission will take appropriate action.

28. The Report and Order does not prohibit the operators from

electing to use a consortium or clearinghouse of educators and public

interest specialists to choose among qualifying programs that would be

aired on the set-aside capacity. With regard to qualifications, the

Report and Order recognizes that someone must make the determination

that programmers who wish to use the reserved channels are eligible

under the statute to do so and that the programming carried on the

reserved channels qualifies under the statute as noncommercial

programming of an educational or informational nature. The Commission

found that DBS providers should be responsible for ensuring that the

obligations imposed by the statute are fulfilled. In order to avoid

undue intrusion into the programming decisions of qualified

programmers, however, the Commission does not believe that it would be

appropriate for DBS providers to pre-screen all programming carried on

the reserved channels. Rather, if an abuse of the reserved channels by

a particular programmer comes to the DBS provider's attention, it can

then take action to ensure that only qualified programs are carried on

the reserved channels by that programmer in the future.

29. DBS providers may not alter or censor the content of the

programming or otherwise exercise any control over the programming. To

aid in monitoring and enforcing the obligations of DBS

[[Page 5955]]

providers, we will require them to maintain files available for public

inspection concerning use of the reserved capacity. These files should

identify the entities that request access, the entities to whom

noncommercial capacity is being provided, the amount of capacity being

provided to each entity, the conditions under which it is being

provided and the rates, if any, being paid by the entity, and, when

access is denied, a brief description of the reason or reasons why

access was denied.

30. Non-commercial channel limitation. In order to ensure that

access to non-commercial channels is not dominated by a few national

educational program suppliers, the Report and Order limits to one the

number of channels that can be initially allocated to a single

qualified program provider on each DBS system. The Commission found

this will make a greater variety of educational and informational

programs available to the U.S. viewing public and will provide an

opportunity for carriage of programming that might not otherwise be

shown.

31. In order to ensure that a particular programmer will be allowed

access to only one channel, the Commission will require that individual

programmers be separate entities. If two national educational

programming suppliers are directly or indirectly under common control

or ownership, the will be treated as one entity for purposes of

obtaining access to the reserved channels. In applying this provision,

the Commission will define cognizable ownership and other interests

according to the Commission's broadcast attribution rules.12

Those rules seek to identify those interests in, or relationships with,

an entity that confer on their holders a degree of influence or control

such that the holders have a realistic potential to affect the

programming decisions of the entity or other core operating functions.

If, after all qualified entities that have sought access have been

offered access on at least one channel, a provider may allocate an

additional channel to a qualified programmer without having to make

additional efforts to secure other qualified programmers.

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\12\ 47 CFR 73.3555 note 1 & 2.

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32. Liability for Violations. Because Section 335 prohibits DBS

providers from exercising any editorial control over programming

utilizing the reserved channels, the Commission interpreted the statute

in accordance with the Supreme Court's holding in Farmers Educational

and Cooperative Union of America v. WDAY, 13 as immunizing

the DBS providers from liability under state and local laws as a result

of the content of the programming. Section 335(b) prohibits DBS

providers from exercising ``any editorial control'' over noncommercial

programming using the set-aside capacity, and thus implicitly grants

them immunity from liability under state and local law for distributing

such programming. By the same token, the Commission will enforce any

requirements imposed by the Act or our rules, other than these public

interest obligations, against the programmers who supply such

programming, rather than the DBS providers who carry it under Section

335.

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\13\ 360 US 525 (1959) (Farmers Union).

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33. Applicability of Political Broadcasting Rules to the

Noncommercial Set Aside Capacity. The statutory language makes clear

that noncommercial programming suppliers are not considered DBS

providers for purpose of either Section 335(a) or Section 335(b) and

are not subject to those requirements.

34. Refusal to Carry Programming Supplier. Section 335 does not

appear to allow DBS operators to refuse to carry any particular

program. This does not, however, mean that a DBS provider is prevented

from making an initial threshold determination as to whether a

programmer is qualified for carriage or whether the programming

proposed is noncommercial, educational, or informational. The

Commission found this approach consistent with judicial interpretation

of the editorial control prohibition for public, educational, and

governmental set-aside channels provided by cable operators. In

addition, a DBS provider can set technical quality standards for

programming carried on its satellite system and these standards can be

applied to programming on the set-aside channels.

35. Unused Channel Capacity. Section 335(b)(2) of the

Communications Act permits a DBS provider to utilize for any purpose

any unused channel capacity required to be reserved under this

subsection pending the actual use of such channel capacity for

noncommercial programming of an educational or informational nature. A

DBS provider will however, be required to vacate reserved capacity,

regardless of contractual obligations, within a reasonable time after a

qualified programmer's request for access has been received.

36. Reasonable Prices, Terms, and Conditions. The Commission

concluded that costs that can be specifically allocated to

noncommercial programmers are those that are directly related to making

the capacity available to noncommercial programmers. These include,

incremental labor required for traffic management at the uplink

facility, incremental compression equipment, incremental labor required

to authorize viewers to receive particular programming, and any

backhaul costs actually incurred by the DBS provider in order to

transmit the noncommercial educational or informational programming. If

a DBS provider has an authorization center or procedure used solely for

the provision of noncommercial channels, such costs may be allocated to

noncommercial programmers as well.

37. With regard to rates that are appropriate for the set aside

channels under Section 335(b), the statute gives certain guidelines for

the Commission to apply. First, Section 335(b)(4) says the Commission

should take into account the nonprofit character of the programmer and

any federal funds used to support programming. Second, the statute

provides that the Commission shall not allow rates to exceed 50 percent

of the direct costs, which we have discussed above.

38. The Commission thinks that it should not be involved in setting

rates for noncommercial programmers because the Commission does not set

rates for satellite capacity in any other context. The Commission will

address any disputes with respect to rates in the context of a

complaint proceeding. Because the statute does not give the Commission

any basis upon which to differentiate among noncommercial educational

and informational programming based on the availability of outside

financing, the Commission concluded that the 50 percent cap applies to

all qualified programmers and not just those who receive no outside

funding for their programs.

39. Effective Date. The Commission concluded that a long phase-in

period is unnecessary. The Commission recognized, however, that DBS

providers and programmers need some amount of time in which to solidify

plans and execute contracts. The Commission will require each DBS

provider make available the channel capacity for educational and

informational programming of a noncommercial nature as soon as the

rules become effective. DBS providers must open a window at that time

to allow interested programming suppliers to enter into discussions

with the DBS providers regarding program carriage. Programming intended

to fulfill the

[[Page 5956]]

provisions of this section must be made available to the public no

later than six months after these rules are effective. Until the four

percent of capacity is filled with qualified programming, DBS providers

may not assert that capacity is unavailable if there are qualified

entities seeking carriage who are ready to meet the prices, terms and

conditions established by the DBS provider.

Ordering Clauses

40. Accordingly, it is ordered that Part 100 of the Commission's

rules is hereby amended as set out.

41. It is further ordered that the Commission's Office of Managing

Director shall send a copy of this Report and Order, including the

Final Regulatory Flexibility Analysis, to the Chief Counsel for

Advocacy of the Small Business Administration.

42. It is further ordered that the amendments to part 100 of the

Commission's rules, 47 CFR part 100, and the Commission's policies,

rules and requirements established in this Report and Order shall take

effect 60 days after publication of the amendments in the Federal

Register, or in accordance with the requirements of 5 U.S.C. 801(a)(3)

and 44 U.S.C. 3507, whichever occurs later. The Commission will publish

a notice announcing the effective date of this Report and Order.

43. It is further ordered that the Commission shall send a copy of

this Report and Order, including the Final Regulatory Flexibility

Analysis, to the Chief Counsel for Advocacy of the Small Business

Administration.

44. This Report and Order is issued under Sec. 0.261 of the

Commission's rules, 47 CFR 0.261 (1996). Petitions for reconsideration

under Sec. 1.429 of the Commission's rules, 47 CFR 1.429 (1996), or

applications for review under Section 1.115 of the Commission's rules,

47 CFR 1.115 (1996), may be filed within 30 days of the date of this

Report and Order in the Federal Register (See 47 CFR 1.4(b)(1)).

Paperwork Reduction Act

The Federal Communications Commission, as part of its continuing

effort to reduce paperwork burden invites the general public and other

Federal agencies to take this opportunity to comment on the following

information collection, as required by the Paperwork Reduction Act of

1995, Public Law 104-13. An agency may not conduct or sponsor a

collection of information unless it displays a currently valid control

number. No person shall be subject to any penalty for failing to comply

with a collection of information subject to the Paperwork Reduction Act

(PRA) that does not display a valid control number. Comments are

requested concerning (a) whether the proposed collection of information

is necessary for the proper performance of the functions of the

Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimate; (c) ways

to enhance the quality, utility, and clarify of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

OMB Approval Number: New.

Title: Implementation of Section 25 of the Cable Television

Consumer Protection and Competition Act of 1992, Direct Broadcast

Satellite Public Interest Obligations.

Form No.: NA.

Type of Collection: New Collection.

Respondents: Business or other for-profit.

Number of Respondents: 8.

Estimated Time for Response: 12 hours.

Total Annual Burden: 96 hours.

Needs and Uses: The information will be used by the Federal

Communications Commission (FCC) and interested members of the public to

monitor DBS providers' compliance with public interest obligations.

Without such information, the FCC could not determine whether DBS

providers have complied with their obligations.

List of Subjects in 47 CFR Part 100

Satellite.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Rule Changes

For the reasons discussed in the preamble, the Federal

Communications Commission amends 47 CFR part 100 as follows:

PART 100--DIRECT BROADCAST SATELLITE SERVICE

1. The authority citation for part 100 is amended to read as

follows:

Authority: 47 U.S.C. 154, 303, 335, 309 and 554.

2. Add Sec. 100.5 to read as follows:

Subpart A--General Information

Sec. 100.5 Public interest obligations.

(a) DBS providers are subject to the public interest obligations

set forth in paragraphs (b) and (c) of this section. For purposes of

this rule, DBS providers are any of the following:

(1) Entities licensed pursuant to 47 CFR part 100; or

(2) Entities licensed pursuant to part 25 of this chapter that

operate satellites in the Ku-band fixed satellite service and that sell

or lease capacity to a video programming distributor that offers

service directly to consumers providing a sufficient number of channels

so that four percent of the total applicable programming channels

yields a set-aside of at least one channel of non-commercial

programming pursuant to paragraph (c) of this section, or

(3) Non-U.S. licensed satellite operators in the Ku-band that offer

video programming directly to consumers in the United States pursuant

to an earth station license issued under part 25 of this title and that

offer in a sufficient number of channels to consumers so that four

percent of the total applicable programming channels yields a set-aside

of one channel of non-commercial programming pursuant to paragraph (c)

of this section,

(b) Political broadcasting requirements--(1) Reasonable access. DBS

providers must comply with Sec. 312(a)(7) of the Communications Act of

1934, as amended, by allowing reasonable access to, or permitting

purchase of reasonable amounts of time for, the use of their facilities

by a legally qualified candidate for federal elective office on behalf

of his or her candidacy.

(2) Use of facilities. DBS providers must comply with Sec. 315 of

the Communications Act of 1934, as amended, by providing equal

opportunities to legally qualified candidates.

(c) Carriage obligation for noncommercial programming--(1)

Reservation requirement. DBS providers shall reserve four percent of

their channel capacity exclusively for use by qualified programmers for

noncommercial programming of an educational or informational nature.

Channel capacity shall be determined annually by calculating, based on

measurements taken on a quarterly basis, the average number of channels

available for video programming on all satellites licensed to the

provider during the previous year. DBS providers may use this reserved

capacity for any purpose until such time as it is used for

noncommercial educational or informational programming.

(2) Qualified programmer. For purposes of these rules, a qualified

programmer is:

(i) A noncommercial educational broadcast station as defined in

Sec. 397(6)

[[Page 5957]]

of the Communications Act of 1934, as amended,

(ii) A public telecommunications entity as defined in Sec. 397(12)

of the Communications Act of 1934, as amended,

(iii) An accredited nonprofit educational institution or a

governmental organization engaged in the formal education of enrolled

students (A publicly supported educational institution must be

accredited by the appropriate state department of education; a

privately controlled educational institution must be accredited by the

appropriate state department of education or the recognized regional

and national accrediting organizations.), or

(iv) A nonprofit organization whose purposes are educational and

include providing educational and instructional television material to

such accredited institutions and governmental organizations.

(v) Other noncommercial entities with an educational mission.

(3) Editorial control.

(i) A DBS operator will be required to make capacity available only

to qualified programmers and may select among such programmers when

demand exceeds the capacity of their reserved channels.

(ii) A DBS operator may not require the programmers it selects to

include particular programming on its channels.

(iii) A DBS operator may not alter or censor the content of the

programming provided by the qualified programmer using the channels

reserved pursuant to this section.

(4) Non-commercial channel limitation. A DBS operator cannot

initially select a qualified programmer to fill more than one of its

reserved channels except that, after all qualified entities that have

sought access have been offered access on at least one channel, a

provider may allocate additional channels to qualified programmers

without having to make additional efforts to secure other qualified

programmers.

(5) Rates, terms and conditions. (i) In making the required

reserved capacity available, DBS providers cannot charge rates that

exceed costs that are directly related to making the capacity available

to qualified programmers. Direct costs include only the cost of

transmitting the signal to the uplink facility and uplinking the signal

to the satellite.

(ii) Rates for capacity reserved under paragraph (c)(1) of this

section shall not exceed 50 percent of the direct costs as defined in

this section.

(iii) Nothing in this section shall be construed to prohibit DBS

providers from negotiating rates with qualified programmers that are

less than 50 percent of direct costs or from paying qualified

programmers for the use of their programming.

(iv) DBS providers shall reserve discrete channels and offer these

to qualifying programmers at consistent times to fulfill the

reservation requirement described in these rules.

(6) Public file. (i) Each DBS provider shall keep and permit public

inspection of a complete and orderly record of:

(A) Quarterly measurements of channel capacity and yearly average

calculations on which it bases its four percent reservation, as well as

its response to any capacity changes;

(B) A record of entities to whom noncommercial capacity is being

provided, the amount of capacity being provided to each entity, the

conditions under which it is being provided and the rates, if any,

being paid by the entity;

(C) A record of entities that have requested capacity, disposition

of those requests and reasons for the disposition; and

(D) A record of all requests for political advertising time and the

disposition of those requests.

(ii) All records required by this paragraph shall be placed in a

file available to the public as soon as possible and shall be retained

for a period of two years.

(7) Effective date. DBS providers are required to make channel

capacity available pursuant to paragraph (c) of this section upon the

effective date. Programming provided pursuant to this rule must be

available to the public no later than six months after the effective

date.

* * * * * *

[FR Doc. 99-1346 Filed 2-5-99; 8:45 am]

BILLING CODE 6712-01-P