[Federal Register: March 24, 2005 (Volume 70, Number 56)]
[Proposed Rules]
[Page 15048-15051]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24mr05-25]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MB Docket No. 05-89; FCC 05-49]
Implementation of Section 207 of the Satellite Home Viewer
Extension and Reauthorization Act of 2004, Reciprocal Bargaining
Obligations
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Commission seeks comment on the
implementation of Section 207 of the Satellite Home Viewer Extension
and Reauthorization Act of 2004 (``SHVERA''). Section 207 extends
section 325(b)(3)(C) of the Communications Act until 2010 and amends
that section to impose good faith retransmission consent bargaining
obligations on multichannel video programming distributors (``MVPDs'').
The Commission tentatively concludes that it should amend its existing
good faith retransmission consent bargaining rules to apply equally to
both broadcasters and MVPDs. The Commission also seeks comment on
appropriate good faith retransmission consent negotiating standards for
out-of-market significantly viewed television broadcast stations.
DATES: Comments for this proceeding are due on or before April 25,
2005; reply comments are due on or before May 9, 2005. Written comments
on the proposed information collection requirements contained in the
NPRM must be submitted by the public, the Office of Management and
Budget (OMB), and other interested parties on or before May 23, 2005.
ADDRESSES: You may submit comments, identified by [docket number and/or
rulemaking number], by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/.
Follow the instructions for submitting comments.
People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format
[[Page 15049]]
documents, sign language interpreters, CART, etc.) by e-mail:
FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432.
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Steven Broeckaert, Steven.Broeckaert@fcc.gov of the
Media Bureau, Policy Division, (202) 418-2120. For additional
information concerning the Paperwork Reduction Act information
collection requirements contained in the NPRM, contact Cathy Williams,
Federal Communications Commission, 445 12th St, SW., Room 1-C823,
Washington, DC 20554, or via the Internet to Cathy.Williams@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), FCC 05-49, adopted on March 2, 2005, and
released on March 7, 2005. The full text of this document is available
for public inspection and copying during regular business hours in the
FCC Reference Center, Federal Communications Commission, 445 12th
Street, SW., CY-A257, Washington, DC 20554. These documents will also
be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will
be available electronically in ASCII, Word 97, and/or Adobe Acrobat.)
The complete text may be purchased from the Commission's copy
contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554.
To request this document in accessible formats (computer diskettes,
large print, audio recording, and Braille), send an e-mail to
fcc504@fcc.gov or call the Commission's Consumer and Governmental
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).
Initial Paperwork Reduction Act of 1995 Analysis
This document does not contain proposed information collection
requirements subject to the Paperwork Reduction Act of 1995, Public Law
104-13. In addition, therefore, it does not contain any proposed
information collection burden ``for small business concerns with fewer
than 25 employees,'' pursuant to the Small Business Paperwork Relief
Act of 2002, Public Law 107-198; see 44 U.S.C. 3506(c)(4).
Summary of the Notice of Proposed Rulemaking
1. In the NPRM we seek comment on the implementation of Section 207
of the Satellite Home Viewer Extension and Reauthorization Act of 2004
(``SHVERA''). Section 207 extends section 325(b)(3)(C) of the
Communications Act until 2010 and amends that section to impose
reciprocal good faith retransmission consent bargaining obligations on
multichannel video programming distributors (``MVPDs''). This section
alters the bargaining obligations created by the Satellite Home Viewer
Improvement Act of 1999 (``SHVIA'') which imposed a good faith
bargaining obligation only on broadcasters. As discussed below, because
the Commission has in place existing rules governing good faith
retransmission consent negotiations and because Congress did not
instruct us through the SHVERA to modify those rules in any substantive
way, we tentatively conclude that the most faithful and expeditious
implementation of the amendments contemplated in section 207 of the
SHVERA is to extend to MVPDs the existing good faith bargaining
obligation imposed on broadcasters under our rules.
Discussion
The Good Faith Provisions of SHVIA
2. Section 325(b)(3)(C) of the Communications Act, as enacted by
the SHVIA, instructed the Commission to commence a rulemaking
proceeding to revise the regulations by which television broadcast
stations exercise their right to grant retransmission consent; see 47
U.S.C. 325(b)(3)(C). Specifically, that section required that the
Commission, until January 1, 2006:
Prohibit a television broadcast station that provides
retransmission consent from engaging in exclusive contracts for
carriage or failing to negotiate in good faith, and it shall not be
a failure to negotiate in good faith if the television broadcast
station enters into retransmission consent agreements containing
different terms and conditions, including price terms, with
different multichannel video programming distributors if such
different terms and conditions are based on competitive marketplace
considerations; see 47 U.S.C. 325(b)(3)(C)(ii).
The Commission issued a Notice of Proposed Rulemaking seeking comment
on how best to implement the good faith and exclusivity provisions of
the SHVIA; see 14 FCC Rcd 21736 (1999). After considering the comments
received in response to the notice, the Commission adopted rules
implementing the good faith provisions and complaint procedures for
alleged rule violations; see 15 FCC Rcd 5445 (2000), 16 FCC Rcd 15599
(2001).
3. The Good Faith Order determined that Congress did not intend to
subject retransmission consent negotiation to detailed substantive
oversight by the Commission; see 15 FCC Rcd at 5450. Instead, the order
found that Congress intended that the Commission follow established
precedent, particularly in the field of labor law, in implementing the
good faith retransmission consent negotiation requirement; see 15 FCC
Rcd at 5453-54. Consistent with this conclusion, the Good Faith Order
adopted a two-part test for good faith. The first part of the test
consists of a brief, objective list of negotiation standards; see 15
FCC Rcd at 5457-58. First, a broadcaster may not refuse to negotiate
with an MVPD regarding retransmission consent. Second, a broadcaster
must appoint a negotiating representative with authority to bargain on
retransmission consent issues. Third, a broadcaster must agree to meet
at reasonable times and locations and cannot act in a manner that would
unduly delay the course of negotiations. Fourth, a broadcaster may not
put forth a single, unilateral proposal. Fifth, a broadcaster, in
responding to an offer proposed by an MVPD, must provide considered
reasons for rejecting any aspects of the MVPD's offer. Sixth, a
broadcaster is prohibited from entering into an agreement with any
party conditioned upon denying retransmission consent to any MVPD.
Finally, a broadcaster must agree to execute a written retransmission
consent agreement that sets forth the full agreement between the
broadcaster and the MVPD; see 47 CFR 76.65(b)(1)(i) through (vii).
4. The second part of the good faith test is based on a totality of
the circumstances standard. Under this standard, an MVPD may present
facts to the Commission which, even though they do not allege a
violation of the specific standards enumerated above, given the
totality of the circumstances constitute a failure to negotiate in good
faith; see 47 CFR 76.65(b)(2).
5. The Good Faith Order provided examples of negotiation proposals
that presumptively are consistent and inconsistent with ``competitive
marketplace considerations;'' see 15 FCC Rcd at 5469-70. The Good Faith
Order found that it is implicit in section 325(b)(3)(C) that any effort
to further anti-competitive ends through the negotiation process would
not meet the good faith negotiation requirement; see 15 FCC Rcd at
5470. The order stated
[[Page 15050]]
that considerations that are designed to frustrate the functioning of a
competitive market are not ``competitive marketplace considerations.''
Further, conduct that is violative of national policies favoring
competition--that, for example, is intended to gain or sustain a
monopoly, an agreement not to compete or to fix prices, or involves the
exercise of market power in one market in order to foreclose
competitors from participation in another market--is not within the
competitive marketplace considerations standard included in the
statute; see 15 FCC Rcd at 5470.
6. Finally, the Good Faith Order established procedural rules for
the filing of good faith complaints pursuant to section 76.7 of the
Commission's rules; see 47 CFR 76.65(c), 47 CFR 76.7. The burden of
proof is on the complainant to establish a good faith violation and
complaints are subject to a one year limitations period; see 47 CFR
76.65(d) and (e).
The Reciprocal Bargaining Obligations of SHVERA
7. In enacting the SHVERA good faith negotiation obligation for
MVPDs, Congress used language identical to that of the SHVIA imposing a
good faith obligation on broadcasters, requiring the Commission, until
January 1, 2010, to:
Prohibit a multichannel video programming distributor from
failing to negotiate in good faith for retransmission consent under
this section, and it shall not be a failure to negotiate in good
faith if the distributor enters into retransmission consent
agreements containing different terms and conditions, including
price terms, with different broadcast stations if such different
terms and conditions are based on competitive marketplace
considerations; see 47 U.S.C. 325(b)(3)(C)(iii).
Congress did not instruct the Commission to amend its existing good
faith rules in any way other than to implement the statutory extension
and impose the good faith obligation on MVPDs. Accordingly, we believe
that Congress did not intend that the Commission revisit the findings
and conclusions that were reached in the SHVIA rulemaking. The little
legislative history directly applicable to Section 207 supports this
approach and, in pertinent part, provides:
In light of evidence that retransmission negotiations continue
to be contentious, the Committee chose to extend these obligations,
and also to begin applying the good-faith obligations to MVPDs. The
Committee intends the MVPD good-faith obligations to be analogous to
those that apply to broadcasters, and not to affect the ultimate
ability of an MVPD to decide not to enter into retransmission
consent with a broadcaster.
We believe that the implementation of section 207 most consistent with
the apparent intent of Congress is to amend our existing rules to apply
equally to both broadcasters and MVPDs. We tentatively conclude that we
should amend sections 76.64(l) and 76.65 as set forth on Appendix A of
the NPRM. We seek comment on this proposal and any other reasonable
implementation of Section 207.
8. We note that the original SHVIA good faith provision by its
terms applied to ``television broadcast stations.'' Similarly, the
SHVERA good faith provision applies to ``multichannel video programming
distributors.'' We seek comment whether, under the statute, the good
faith negotiating standards may be any different for carriage of
significantly viewed television broadcast stations outside of their
designated market area (``DMA'') (A DMA is a geographic market
designation created by Nielsen Media Research that defines each
television market exclusive of others, based on measured viewing
patterns. Essentially, each county in the United States is allocated to
a market based on which home-market stations receive a preponderance of
total viewing hours in the county. For purposes of this calculation,
both over-the-air and cable television viewing are included.)
Significantly viewed television broadcast stations do not have carriage
rights outside of their DMA and carriage of their signals by out-of-
market MVPDs is permissive. We seek comment as to whether the
Commission has discretion under section 325(b)(3)(C) to distinguish
this situation. For example, if a television broadcast station from DMA
X is significantly viewed in DMA Y and seeks carriage on an MVPD
located in DMA Y, must the MVPD in DMA Y negotiate retransmission
consent in good faith with the broadcaster from DMA X in exactly the
same way that it negotiates with broadcasters that are located in DMA
Y? Should the same good faith negotiation standard apply to
broadcasters and MVPDs regardless of the DMA in which they reside?
Should a different standard apply, and if so what standard? Should the
good faith retransmission consent negotiation obligation apply only to
MVPDs and broadcasters located in the same DMA? We seek comment on this
issue.
Procedural Matters
Ex Parte Rules
9. Permit-But-Disclose. This proceeding will be treated as a
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's
rules; see 47 CFR 1.1206(b), 47 CFR 1.1202, 1.1203. Ex parte
presentations are permissible if disclosed in accordance with
Commission rules, except during the Sunshine Agenda period when
presentations, ex parte or otherwise, are generally prohibited. Persons
making oral ex parte presentations are reminded that a memorandum
summarizing a presentation must contain a summary of the substance of
the presentation and not merely a listing of the subjects discussed.
More than a one- or two-sentence description of the views and arguments
presented is generally required; see 47 CFR 1.1206(b)(2). Additional
rules pertaining to oral and written presentations are set forth in
section 1.1206(b).
10. Comments may be filed electronically using the Internet by
accessing the the Commission's Electronic Comment Filing System
(``ECFS''): http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: http://www.regulations.gov. Filers should follow the
instructions provided on the Web site for submitting comments. Parties
may also submit an electronic comment by Internet e-mail. To get filing
instructions, filers should send an e-mail to ecfs@fcc.gov, and include
the following words in the body of the message, ``get form.'' A sample
form and directions will be sent in response. Parties who choose to
file by paper must file an original and four copies of each filing. All
filings must be addressed to the Commission's Secretary, Office of the
Secretary, Federal Communications Commission, 445 12th Street, SW.,
Room TW-A325, Washington, DC 20554. In addition to filing comments with
the Secretary, a copy of any comments on the Paperwork Reduction Act
information collection requirements contained herein should be
submitted to Judith B. Herman, Federal Communications Commission, Room
1-C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet
to Judith-B.Herman@fcc.gov, and to Kristy L. LaLonde, OMB Desk Officer,
Room 10234 NEOB, 725 17th Street, NW., Washington, DC 20503, via the
Internet to Kristy--L. LaLonde@omb.eop.gov, or via fax at 202-395-5167.
Ordering Clauses
11. Accordingly, it is ordered that pursuant to section 207 of the
Satellite Home Viewer Extension and Reauthorization Act of 2004, and
sections 1, 4(i) and (j), and 325 of the Communications Act of 1934, as
amended, 47 U.S.C. 151, 154(i) and (j),
[[Page 15051]]
and 325, notice is hereby given of the proposals and tentative
conclusions described in this Notice of Proposed Rulemaking.
12. It is further ordered that the Reference Information Center,
Consumer and Governmental Affairs Bureau, shall send a copy of this
Notice of Proposed Rulemaking, including the Initial Regulatory
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
Proposed Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission proposes to amend 47 CFR part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
1. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556,
558, 560, 561, 571, 572, 573.
2. Section 76.64 is amended by revising paragraph (l) to read as
follows:
Sec. 76.64 Retransmission consent.
* * * * *
(l) Exclusive retransmission consent agreements are prohibited. No
television broadcast station shall make or negotiate any agreement with
one multichannel video programming distributor for carriage to the
exclusion of other multichannel video programming distributors. This
paragraph shall terminate at midnight on December 31, 2009.
* * * * *
3. Section 76.65 is revised to read as follows:
Sec. 76.65 Good faith and exclusive retransmission consent
complaints.
(a) Duty to negotiate in good faith. Television broadcast stations
and multichannel video programming distributors shall negotiate in good
faith the terms and conditions of retransmission consent agreements to
fulfill the duties established by section 325(b)(3)(C) of the Act;
provided, however, that it shall not be a failure to negotiate in good
faith if:
(1) The television broadcast station proposes or enters into
retransmission consent agreements containing different terms and
conditions, including price terms, with different multichannel video
programming distributors if such different terms and conditions are
based on competitive marketplace considerations; or
(2) The multichannel video programming distributor enters into
retransmission consent agreements containing different terms and
conditions, including price terms, with different broadcast stations if
such different terms and conditions are based on competitive
marketplace considerations. If a television broadcast station or
multichannel video programming distributor negotiates in accordance
with the rules and procedures set forth in this section, failure to
reach an agreement is not an indication of a failure to negotiate in
good faith.
(b) Good faith negotiation. (1) Standards. The following actions or
practices violate a broadcast television station's or multichannel
video programming distributor's (the ``negotiating entity'') duty to
negotiate retransmission consent agreements in good faith:
(i) Refusal by a negotiating entity to negotiate retransmission
consent;
(ii) Refusal by a negotiating entity to designate a representative
with authority to make binding representations on retransmission
consent;
(iii) Refusal by a negotiating entity to meet and negotiate
retransmission consent at reasonable times and locations, or acting in
a manner that unreasonably delays retransmission consent negotiations;
(iv) Refusal by a negotiating entity to put forth more than a
single, unilateral proposal.
(v) Failure of a negotiating entity to respond to a retransmission
consent proposal of the other party, including the reasons for the
rejection of any such proposal;
(vi) Execution by a negotiating entity of an agreement with any
party, a term or condition of which requires that such negotiating
entity not enter into a retransmission consent agreement with any other
television broadcast station or multichannel video programming
distributor; and
(vii) Refusal by a negotiating entity to execute a written
retransmission consent agreement that sets forth the full understanding
of the television broadcast station and the multichannel video
programming distributor.
(2) Totality of the circumstances. In addition to the standards set
forth in paragraph (b)(1) of this section, a Negotiating Entity may
demonstrate, based on the totality of the circumstances of a particular
retransmission consent negotiation, that a television broadcast station
or multichannel video programming distributor breached its duty to
negotiate in good faith as set forth in paragraph (a) of the section.
(c) Good faith negotiation and exclusivity complaints. Any
television broadcast station or multichannel video programming
distributor aggrieved by conduct that it believes constitutes a
violation of the regulations set forth in this section or paragraph (l)
of Sec. 76.64 may commence an adjudicatory proceeding at the
Commission to obtain enforcement of the rules through the filing of a
complaint. The complaint shall be filed and responded to in accordance
with the procedures specified in Sec. 76.7.
(d) Burden of proof. In any complaint proceeding brought under this
section, the burden of proof as to the existence of a violation shall
be on the complainant.
(e) Time limit on filing of complaints. Any complaint filed
pursuant to this paragraph must be filed within one year of the date on
which one of the following events occurs:
(1) A complainant enters into a retransmission consent agreement
with a television broadcast station or multichannel video programming
distributor that the complainant alleges to violate one or more of the
rules contained in this paragraph; or
(2) A television broadcast station or multichannel video
programming distributor engages in retransmission consent negotiations
with a complainant that the complainant alleges to violate one or more
of the rules contained in this subpart, and such negotiation is
unrelated to any existing contract between the complainant and the
television broadcast station or multichannel video programming
distributor; or
(3) The complainant has notified the television broadcast station
or multichannel video programming distributor that it intends to file a
complaint with the Commission based on a request to negotiate
retransmission consent that has been denied, unreasonably delayed, or
unacknowledged in violation of one or more of the rules contained in
this paragraph.
(f) Termination of rules. This section shall terminate at midnight
on December 31, 2009.
[FR Doc. 05-5851 Filed 3-23-05; 8:45 am]
BILLING CODE 6712-01-P