[Federal Register Volume 76, Number 59 (Monday, March 28, 2011)]
[Proposed Rules]
[Pages 17071-17088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-7250]
[[Page 17071]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MB Docket No. 10-71; FCC 11-31]
Amendment of the Commission's Rules Related to Retransmission
Consent
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Federal Communications Commission (FCC)
seeks comment on a series of proposals to streamline and clarify the
Commission's rules concerning or affecting retransmission consent
negotiations. The Commission believes that these rule changes could
allow the market-based negotiations contemplated by the statute to
proceed more smoothly, provide greater certainty to the negotiating
parties, and help protect consumers.
DATES: Submit comments on or before May 27, 2011, and submit reply
comments on or before June 27, 2011. See SUPPLEMENTARY INFORMATION
section for additional comment dates.
ADDRESSES: You may submit comments, identified by MB Docket No. 10-71,
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.
Mail: Filings can be sent by hand or messenger delivery,
by commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although the Commission continues to experience
delays in receiving U.S. Postal Service mail). All filings must be
addressed to the Commission's Secretary, Office of the Secretary,
Federal Communications Commission.
People With Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by e-mail: [email protected] or phone: 202-418-
0530 or TTY: 202-418-0432.
In addition to filing comments with the Secretary, a copy of any
comments on the Paperwork Reduction Act proposed information collection
requirements contained herein should be submitted to the Federal
Communications Commission via e-mail to [email protected] and to Nicholas A.
Fraser, Office of Management and Budget, via e-mail to
[email protected] or via fax at 202-395-5167. 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 Diana Sokolow, [email protected], of the Media
Bureau, Policy Division, 202-418-2120. For additional information
concerning the Paperwork Reduction Act information collection
requirements contained in this document, send an e-mail to [email protected]
or contact Cathy Williams at 202-418-2918. To view or obtain a copy of
this information collection request (ICR) submitted to OMB: (1) Go to
this OMB/GSA Web page: http://www.reginfo.gov/public/do/PRAMain, (2)
look for the section of the Web page called ``Currently Under Review,''
(3) click on the downward-pointing arrow in the ``Select Agency'' box
below the ``Currently Under Review'' heading, (4) select ``Federal
Communications Commission'' from the list of agencies presented in the
``Select Agency'' box, (5) click the ``Submit'' button to the right of
the ``Select Agency'' box, and (6) when the list of FCC ICRs currently
under review appears, look for the OMB control number of the ICR as
show in the Supplementary Information section below (3060-0649) and
then click on the ICR Reference Number. A copy of the FCC submission to
OMB will be displayed.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice
of Proposed Rulemaking (NPRM), MB Docket No. 10-71, FCC No. 11-31,
adopted and released March 3, 2011. The full text of the NPRM is
available for public inspection and copying during regular business
hours in the FCC Reference Information Center, Portals II, 445 12th
Street, SW., Room CY-A257, Washington, DC 20554. It also may be
purchased from the Commission's duplicating contractor at Portals II,
445 12th Street, SW., Room CY-B402, Washington, DC 20554; the
contractor's Web site, http://www.bcpiweb.com; or by calling 800-378-
3160, facsimile 202-488-5563, or e-mail [email protected]. Copies of the
NPRM also may be obtained via the Commission's Electronic Comment
Filing System (ECFS) by entering the docket number, MB Docket No. 10-
71. Additionally, the complete item is available on the Federal
Communications Commission's Web site at http://www.fcc.gov.
This document contains proposed information collection
requirements. The Commission, as part of its continuing effort to
reduce paperwork burdens, invites the general public and the Office of
Management and Budget (OMB) to comment on the information collection
requirements contained in this document, as required by the Paperwork
Reduction Act of 1995, Public Law 104-13. Written comments on the
Paperwork Reduction Act proposed information collection requirements
must be submitted by the public, Office of Management and Budget (OMB),
and other interested parties on or before May 27, 2011.
Comments should address: (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 estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; (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; and (e)
ways to further reduce the information collection burden on small
business concerns with fewer than 25 employees. In addition, pursuant
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,
see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might
further reduce the information collection burden for small business
concerns with fewer than 25 employees.
OMB Control Number: 3060-0649.
Title: Sections 76.1601, Deletion or Repositioning of Broadcast
Signals, 76.1617 Initial Must-Carry Notice, 76.1607 and 76.1708
Principal Headend.
Form Number: Not applicable.
Type of Review: Revision of a currently approved collection.
Respondents: Businesses or other for-profit entities; Not-for-
profit institutions.
Number of Respondents and Responses: 3,380 respondents and 4,200
responses.
Estimated Time per Response: 0.5 to 2 hours.
Frequency of Response: On occasion reporting requirement; Third
party disclosure requirement; Recordkeeping requirement.
Total Annual Burden: 2,400 hours.
Total Annual Costs: None.
Obligation to Respond: Required to obtain or retain benefits. The
statutory authority for this information collection is contained in
Section 4(i) of the
[[Page 17072]]
Communications Act of 1934, as amended.
Nature and Extent of Confidentiality: No need for confidentiality
required with this collection of information.
Privacy Impact Assessment: No impact(s).
Needs and Uses: 47 CFR 76.1601 requires that effective April 2,
1993, a cable operator shall provide written notice to any broadcast
television station at least 30 days prior to either deleting from
carriage or repositioning that station. Such notification shall also be
provided to subscribers of the cable system.
47 CFR 76.1607 states that a cable operator shall provide written
notice by certified mail to all stations carried on its system pursuant
to the must-carry rules at least 60 days prior to any change in the
designation of its principal headend.
47 CFR 76.1617(a) states within 60 days of activation of a cable
system, a cable operator must notify all qualified NCE stations of its
designated principal headend by certified mail.
47 CFR 76.1617(b) states within 60 days of activation of a cable
system, a cable operator must notify all local commercial and NCE
stations that may not be entitled to carriage because they either:
(1) Fail to meet the standards for delivery of a good quality
signal to the cable system's principal headend, or
(2) May cause an increased copyright liability to the cable system.
47 CFR 76.1617(c) states within 60 days of activation of a cable
system, a cable operator must send by certified mail a copy of a list
of all broadcast television stations carried by its system and their
channel positions to all local commercial and noncommercial television
stations, including those not designated as must-carry stations and
those not carried on the system.
47 CFR 76.1708(a) states that the operator of every cable
television system shall maintain for public inspection the designation
and location of its principal headend. If an operator changes the
designation of its principal headend, that new designation must be
included in its public file.
The NPRM proposes to redesignate 47 CFR 76.1601 as 47 CFR
76.1601(a), and to add a new 47 CFR 76.1601(b). If adopted, new 47 CFR
76.1601(b) would require broadcast television stations and multichannel
video programming distributors (MVPDs) to notify affected subscribers
of the potential deletion of a broadcaster's signal a minimum of 30
days in advance of a retransmission consent agreement's expiration,
unless a renewal or extension agreement has been executed, and
regardless of whether the signal is ultimately deleted. All other
remaining existing information collection requirements would stay as
they are, and the various burden estimates would be revised to reflect
new 47 CFR 76.1601(b).
Synopsis of the Notice of Proposed Rulemaking
I. Introduction
1. In this Notice of Proposed Rulemaking (NPRM), we seek comment on
a series of proposals to streamline and clarify our rules concerning or
affecting retransmission consent negotiations. Our primary objective is
to assess whether and how the Commission rules in this arena are
ensuring that the market-based mechanisms Congress designed to govern
retransmission consent negotiations are working effectively and, to the
extent possible, minimize video programming service disruptions to
consumers.
2. The Communications Act of 1934, as amended (the Act), prohibits
cable systems and other multichannel video programming distributors
(MVPDs) from retransmitting a broadcast station's signal without the
station's consent. 47 U.S.C. 325(b)(1)(A). This consent is what is
known as ``retransmission consent.'' The law requires broadcasters and
MVPDs to negotiate for retransmission consent in good faith. See 47
U.S.C. 325(b)(3)(C)(ii) and (iii); 47 CFR 76.65. Since Congress enacted
the retransmission consent regime in 1992, there have been significant
changes in the video programming marketplace. One such change is the
form of compensation sought by broadcasters. Historically, cable
operators typically compensated broadcasters for consent to retransmit
the broadcasters' signals through in-kind compensation, which might
include, for example, carriage of additional channels of the
broadcaster's programming on the cable system or advertising time. See,
e.g., General Motors Corp. and Hughes Electronics Corp., Transferors,
and The News Corp. Ltd., Transferee, Memorandum Opinion and Order, 19
FCC Rcd 473, 503, para. 56 (2004). Today, however, broadcasters are
increasingly seeking and receiving monetary compensation from MVPDs in
exchange for consent to the retransmission of their signals. Another
important change concerns the rise of competitive video programming
providers. In 1992, the only option for many local broadcast television
stations seeking to reach MVPD customers in a particular Designated
Market Area (DMA) was a single local cable provider. Today, in
contrast, many consumers have additional options for receiving
programming, including two national direct broadcast satellite (DBS)
providers, telephone providers that offer video programming in some
areas, and, to a degree, the Internet. One result of such changes in
the marketplace is that disputes over retransmission consent have
become more contentious and more public, and we recently have seen a
rise in negotiation impasses that have affected millions of consumers.
3. Accordingly, we have concluded that it is appropriate for us to
reexamine our rules relating to retransmission consent. We consider
below revisions to the retransmission consent and related rules that we
believe could allow the market-based negotiations contemplated by the
statute to proceed more smoothly, provide greater certainty to the
negotiating parties, and help protect consumers. Accordingly, as
discussed below, we seek comment on rule changes that would:
Provide more guidance under the good faith negotiation
requirements to the negotiating parties by:
[cir] Specifying additional examples of per se violations in Sec.
76.65(b)(1) of the Commission's rules; and
[cir] Further clarifying the totality of the circumstances standard
of Sec. 76.65(b)(2) of the Commission's rules;
Improve notice to consumers in advance of possible service
disruptions by extending the coverage of our notice rules to non-cable
MVPDs and broadcasters as well as cable operators, and specifying that,
if a renewal or extension agreement has not been executed 30 days in
advance of a retransmission consent agreement's expiration, notice of
potential deletion of a broadcaster's signal must be given to consumers
regardless of whether the signal is ultimately deleted;
Extend to non-cable MVPDs the prohibition now applicable
to cable operators on deleting or repositioning a local commercial
television station during ratings ``sweeps'' periods; and
Allow MVPDs to negotiate for alternative access to network
programming by eliminating the Commission's network non-duplication and
syndicated exclusivity rules.
We also seek comment on any other revisions or additions to our rules
within the scope of our authority that would improve the retransmission
consent negotiation process and help protect consumers from programming
disruptions. The Commission does not have the power to force
broadcasters to consent to MVPD carriage of their
[[Page 17073]]
signals nor can the Commission order binding arbitration. See infra
para. 18. See also Letter from Chairman Julius Genachowski, FCC, to The
Honorable John F. Kerry, Chairman, Subcommittee on Communications,
Technology, and the Internet, Committee on Commerce, Science, and
Transportation, U.S. Senate, at 1 (Oct. 29, 2010) (``[C]urrent law does
not give the agency the tools necessary to prevent service
disruptions.'').
II. Background
A. Retransmission Consent
4. The current regulatory scheme for carriage of broadcast
television stations was established by the Cable Television Consumer
Protection and Competition Act of 1992 (1992 Cable Act), Public Law
102-385, 106 Stat. 1460 (1992). In 1992, unlike today, local broadcast
television stations seeking to reach viewers in a particular DMA
through an MVPD service often had only one option--namely, a single
local cable provider. While broadcasters benefited from cable carriage,
Congress recognized that broadcast programming ``remains the most
popular programming on cable systems, and a substantial portion of the
benefits for which consumers pay cable systems is derived from carriage
of the signals of network affiliates, independent television stations,
and public television stations.'' See 1992 Cable Act sec. 2(a)(19). In
adopting the retransmission consent provisions of the 1992 Cable Act,
Congress found that cable operators obtained great benefit from the
local broadcast signals that they were able to carry without
broadcaster consent or copyright liability, and that this benefit
resulted in an effective subsidy to cable operators. See id.
Accordingly, Congress adopted its retransmission consent provisions to
allow broadcasters to negotiate to receive compensation for the value
of their signals. Through the 1992 Cable Act, Congress modified the
Communications Act, inter alia, to provide television stations with
certain carriage rights on cable television systems in their local
market. See 47 U.S.C. 325, 534.
5. Pursuant to the statutory provisions enacted in 1992, television
broadcasters elect every three years whether to proceed under the
retransmission consent requirements of section 325 of the Act, or the
mandatory carriage (must carry) requirements of sections 338 and 614 of
the Act. See 47 U.S.C. 325(b), 338, 534. Section 338 governs mandatory
carriage on satellite, and Section 614 (codified at 47 U.S.C. 534)
governs mandatory carriage of commercial television stations on cable.
There are important differences between the retransmission consent and
must carry regimes. Specifically, a broadcaster electing must carry
status is guaranteed carriage on cable systems in its market, and the
cable operator is generally prohibited from accepting or requesting
compensation for carriage, whereas a broadcaster who elects carriage
under the retransmission consent rules may insist on compensation. In
order to reach MVPD customers, most broadcasters elected carriage under
the must carry rules in the early years following enactment of the new
regime. By 2009, only 37 percent of stations relied on must carry. See
Omnibus Broadband Initiative, Spectrum Analysis: Options for Broadcast
Spectrum, OBI Technical Paper No. 3, at 8 (June 2010); see also id. at
Exhibit C (showing decrease in must carry elections and increase in
retransmission consent elections since 2003); id. at n. 23.
6. Since 2001, broadcasters have also had mandatory carriage rights
on DBS systems. The Satellite Home Viewer Improvement Act of 1999
(SHVIA) gives satellite carriers a statutory copyright license to
retransmit local broadcast stations to subscribers in the station's
market, also known as ``local-into-local'' service. SHVIA was enacted
as Title I of the Intellectual Property and Communications Omnibus
Reform Act of 1999 (IPACORA) (relating to copyright licensing and
carriage of broadcast signals by satellite carriers, codified in
scattered sections of 17 and 47 U.S.C.), Public Law 106-113, 113 Stat.
1501, Appendix I (1999). Generally, when a satellite carrier provides
local-into-local service pursuant to the statutory copyright license,
the satellite carrier is obligated to carry any qualified local
television station in the particular DMA that has made a timely
election for mandatory carriage, unless the station's programming is
duplicative of the programming of another station carried by the
carrier in the DMA or the station does not provide a good quality
signal to the carrier's local receive facility. See 47 U.S.C. 338.
7. As an alternative to seeking mandatory carriage, a broadcaster
may elect carriage under the retransmission consent rules, which allow
for negotiations with cable operators and other MVPDs for carriage. A
broadcaster electing retransmission consent may accept or request
compensation for carriage in retransmission consent negotiations. The
legislative history of section 325 indicates that Congress intended
``to establish a marketplace for the disposition of the rights to
retransmit broadcast signals; it is not the Committee's intention in
this bill to dictate the outcome of the ensuing marketplace
negotiations.'' S. Rep. No. 92, 102nd Cong., 1st Sess. 1991, reprinted
in 1992 U.S.C.C.A.N. 1133, 1169. Under section 325(b)(1)(A) of the Act,
if a broadcaster electing retransmission consent and an MVPD are unable
to reach an agreement, or do not agree to the extension of an existing
agreement prior to its expiration, then the MVPD may not retransmit the
broadcasting station's signal because the signal cannot be carried
without the broadcast station's consent. Section 325(b)(1)(A) of the
Act states, ``No cable system or other multichannel video programming
distributor shall retransmit the signal of a broadcasting station, or
any part thereof, except--(A) with the express authority of the
originating station. * * *'' 47 U.S.C. 325(b)(1). Pursuant to section
325(b)(2), there are five circumstances in which the retransmission
restrictions do not apply.
B. Good Faith Negotiations
8. Initially, section 325 of the Act did not include any standards
governing retransmission consent negotiations between broadcasters and
MVPDs. That changed in 1999 when Congress adopted SHVIA, which
contained provisions concerning the satellite industry, as well as
television broadcast stations and terrestrial MVPDs. Specifically,
Congress required broadcast television stations engaging in
retransmission consent negotiations with any MVPD to negotiate in good
faith. See 47 U.S.C. 325(b)(3)(C). SHVIA also prohibited broadcasters
from entering into exclusive retransmission consent agreements. See 47
U.S.C. 325(b)(3)(C). Congress required the Commission to revise its
regulations so that they:
* * * prohibit a television broadcast station that provides
retransmission consent from * * * 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.
47 U.S.C. 325(b)(3)(C)(ii). The Joint Explanatory Statement of the
Committee of Conference (Conference Report) did not explain or clarify
the statutory language, instead merely stating that the regulations
would:
[[Page 17074]]
* * * prohibit a television broadcast station from * * *
refusing to negotiate in good faith regarding retransmission consent
agreements. A television station may generally offer different
retransmission consent terms or conditions, including price terms,
to different distributors. The [Commission] may determine that such
different terms represent a failure to negotiate in good faith only
if they are not based on competitive marketplace considerations.
Conference Report at 13. This good faith negotiation obligation was
later made reciprocal to MVPDs as well as broadcasters by the Satellite
Home Viewer Extension and Reauthorization Act of 2004 (SHVERA), Public
Law 108-447, 118 Stat. 2809 (2004).
9. In implementing the good faith negotiation requirement, the
Commission concluded ``that the statute does not intend to subject
retransmission consent negotiation to detailed substantive oversight by
the Commission. Instead, the order concludes 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.'' Implementation of the Satellite Home
Viewer Improvement Act of 1999; Retransmission Consent Issues: Good
Faith Negotiation and Exclusivity, 65 FR 15559, March 23, 2000 (Good
Faith Order). Given the dearth of guidance in section 325 and its
legislative history, the Commission drew guidance from analogous
statutory standards, such as the good faith bargaining requirement of
section 8(d) of the Taft-Hartley Act. Id. The Commission also looked to
its own rules implementing the good faith negotiation requirement of
section 251 of the Act, which largely relies on labor law precedent.
Id.
10. The Commission adopted a two-part framework to determine
whether broadcasters and MVPDs negotiate retransmission consent in good
faith. First, the Commission established a list of seven objective good
faith negotiation standards, the violation of which is considered a per
se breach of the good faith negotiation obligation. See 47 CFR
76.65(b)(1). Second, even if the seven specific standards are met, the
Commission may consider whether, based on the totality of the
circumstances, a party failed to negotiate retransmission consent in
good faith. See 47 CFR 76.65(b)(2). The Commission has stated that,
where ``a broadcaster is determined to have failed to negotiate in good
faith, the Commission will instruct the parties to renegotiate the
agreement in accordance with the Commission's rules and section
325(b)(3)(C).'' Good Faith Order. While the Commission did not find any
statutory authority to impose damages, it noted ``that, as with all
violations of the Communications Act or the Commission's rules, the
Commission has the authority to impose forfeitures for violations of
section 325(b)(3)(C).'' Id. In discussing remedies for a violation of
the good faith negotiation requirement, the Commission did not
reference continued carriage as a potential remedy, and stated that it
could not adopt regulations permitting retransmission during good faith
negotiation or while a good faith complaint is pending before the
Commission, absent broadcaster consent to such retransmission. Id.
11. The Commission concluded that Congress did not intend for it to
sit in judgment of the terms of every executed retransmission consent
agreement. Id. Rather, the Commission said, ``[w]e believe that, by
imposing the good faith obligation, Congress intended that the
Commission develop and enforce a process that ensures that broadcasters
and MVPDs meet to negotiate retransmission consent and that such
negotiations are conducted in an atmosphere of honesty, purpose and
clarity of process.'' Id. In adopting the good faith negotiation rules,
the Commission pointed to commenters' arguments that intrusive
Commission action was unnecessary because of the thousands of
retransmission consent agreements that had been concluded successfully
since the adoption of the 1992 Cable Act. Id.
12. There have been very few complaints filed alleging violations
of the Commission's good faith rules. For example, in 2001, the former
Cable Services Bureau issued an order denying EchoStar Satellite
Corporation's retransmission consent complaint alleging that Young
Broadcasting, Inc. et al. failed to negotiate in good faith. See
EchoStar Satellite Corp. v. Young Broadcasting, Inc. et al., Memorandum
Opinion and Order, 16 FCC Rcd 15070 (CSB 2001). More recently, in 2007,
the Media Bureau issued an order denying Mediacom Communications
Corporation's (Mediacom) retransmission consent complaint alleging that
Sinclair Broadcast Group, Inc. (Sinclair) failed to negotiate in good
faith. See Mediacom Communications Corp. v. Sinclair Broadcast Group,
Inc., Memorandum Opinion and Order, 22 FCC Rcd 47 (MB 2007). Although
Mediacom filed an application for review of the Media Bureau's order,
Mediacom and Sinclair subsequently announced the completion of a
retransmission consent agreement, and the Media Bureau thus granted
Mediacom's motion to dismiss the case with prejudice. See Mediacom
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 22 FCC
Rcd 11093 (MB 2007). Also in 2007, the Media Bureau ruled that a cable
operator failed to negotiate in good faith under the totality of the
circumstances, and ordered resumption of negotiations within 10 days
and status updates every 30 days. See Letter to Jorge L. Bauermeister,
22 FCC Rcd 4933 (MB 2007); see also infra para. 33. Further, in 2009,
the Media Bureau issued an order denying ATC Broadband LLC and Dixie
Cable TV, Inc.'s retransmission consent complaint alleging that Gray
Television Licensee, Inc. failed to negotiate in good faith. See ATC
Broadband LLC and Dixie Cable TV, Inc. v. Gray Television Licensee,
Inc., Memorandum Opinion and Order, 24 FCC Rcd 1645 (MB 2009). Also in
2009, Mediacom filed another retransmission consent complaint alleging
that Sinclair failed to negotiate in good faith, but, following an
agreed-upon extension, the parties announced the completion of a
retransmission consent agreement and the Media Bureau granted
Mediacom's motion to dismiss the case with prejudice. See Mediacom
Communications Corp. v. Sinclair Broadcast Group, Inc., Order, 25 FCC
Rcd 257 (MB 2010). Accordingly, there is little Commission precedent
regarding the good faith rules, and there has only been one finding
that a party to a retransmission consent agreement negotiated in bad
faith.
C. Petition for Rulemaking
13. In March 2010, 14 MVPDs and public interest groups filed a
rulemaking petition arguing that the Commission's retransmission
consent regulations are outdated and are harming consumers. Time Warner
Cable Inc. et al. Petition for Rulemaking to Amend the Commission's
Rules Governing Retransmission Consent, MB Docket No. 10-71, at 1
(filed Mar. 9, 2010) (the Petition). The petitioners argued that
changes in the marketplace, and the increasingly contentious nature of
retransmission consent negotiations, justify revisions to the
Commission's rules governing retransmission consent. Specifically, the
Petition stated that, in 1992, Congress acted out of ``concern that
cable operators were functioning as monopolies and in turn threatened
to undercut the public interest benefits associated with over-the-air
broadcasting.'' Petition at 2-3 (footnote omitted). The petitioners
argued that broadcasters today ``enjoy distribution options beyond the
cable incumbent in
[[Page 17075]]
nearly every [DMA].'' Id. at 4. The Petition also contended that
Congress expected broadcaster demands for compensation, if any, to be
modest, because of the benefits that broadcasters derive from carriage.
Id. The Petition argued that the recent shift of bargaining power to
broadcasters has resulted in retransmission consent negotiations in
which MVPDs must either agree to the significantly higher fees
requested by broadcasters or lose access to programming. Id. at 5.
14. On March 19, 2010, the Media Bureau released a Public Notice
inviting public comment on the Petition. See Public Notice, Media
Bureau Seeks Comment on a Petition for Rulemaking to Amend the
Commission's Rules Governing Retransmission Consent, DA 10-474 (MB
2010) (the Public Notice). Following the grant of an extension,
comments were due May 18, 2010, and reply comments were due June 3,
2010. See Petition for Rulemaking to Amend the Commission's Rules
Governing Retransmission Consent, Order, 25 FCC Rcd 3334 (MB 2010).
While some commenters agree with the petitioners that the
retransmission consent regime is in need of reform, others argue that
the retransmission consent process is working as intended and that the
shift in retransmission consent pricing represents a market correction
reflecting the increased competition faced by incumbent cable
operators.
D. Consumer Impact
15. In the past year, we have seen high profile retransmission
consent disputes result in carriage impasses. When Cablevision Systems
Corp. (Cablevision) and News Corp.'s agreement for two Fox-affiliated
television stations and one MyNetwork TV-affiliated television station
expired on October 15, 2010 and the parties did not reach an extension
or renewal agreement, Cablevision was forced to discontinue carriage of
the three stations until agreement was reached on October 30, 2010. The
carriage impasse resulted in affected Cablevision subscribers being
unable to view on cable the baseball National League Championship
Series, the first two games of the World Series, a number of NFL
regular season games, and other regularly scheduled programs.
Previously, on March 7, 2010, Walt Disney Co. (Disney) and Cablevision
were unable to reach agreement on carriage of Disney's ABC signal for
nearly 21 hours after a previous agreement expired. As a result, the
approximately 3.1 million households served by Cablevision were unable
to view the first 14 minutes of the Academy Awards through their cable
provider. Most recently, we are aware of losses of programming
resulting from retransmission consent carriage impasses involving DISH
Network and Chambers Communications Corp., Time Warner Cable and Smith
Media LLC, DISH Network and Frontier Radio Management, DirecTV and
Northwest Broadcasting, Mediacom and KOMU-TV, and Full Channel TV and
Entravision.
16. In addition, consumers have been concerned about other high
profile retransmission consent negotiations that seemed close to an
impasse. For example, a retransmission consent agreement with Time
Warner Cable for News Corp.'s Fox television stations expired at
midnight on December 31, 2009. A statement from FCC Chairman Julius
Genachowski at the time acknowledged that a failure to conclude a new
agreement could harm consumers, noting that ``[c]ompanies shouldn't
force cable-watching football fans to scramble for other means of TV
delivery on New Year's weekend.'' See News Release, FCC Chairman Julius
Genachowski Statement on Retransmission Disputes, (rel. Dec. 31, 2009).
Ultimately, Fox and Time Warner reached agreement without any carriage
interruption, but consumers who were aware of the dispute were unsure
if they would have continued access to Fox programming through their
Time Warner subscription. We are concerned about the uncertainty that
consumers have faced regarding their ability to continue receiving
certain broadcast television stations during recent contentious
retransmission consent negotiations. The early termination fees imposed
by some MVPDs may cause consumers faced with a potential retransmission
consent negotiating impasse to be unwilling or unable to consider
switching to another MVPD to maintain access to a particular broadcast
station. See infra para. 30. Accordingly, recognizing the consumer harm
caused by retransmission consent negotiation impasses and near
impasses, the Commission seeks comment on certain proposals to modify
the rules governing retransmission consent.
III. Discussion
17. Our goal in this proceeding is to take appropriate action,
within our existing authority, to protect consumers from the disruptive
impact of the loss of broadcast programming carried on MVPD video
services. Subscribers are the innocent bystanders adversely affected
when broadcasters and MVPDs fail to reach an agreement to extend or
renew their retransmission consent contracts. In light of the changing
marketplace, our proposals in this NPRM are intended to update the good
faith rules and remedies in order to better utilize the good faith
requirement as a consumer protection tool. While one way to protect
consumers' interests might be for the Commission to order that a
station continue to be carried notwithstanding the parties' failure to
reach an agreement, the statute does not authorize carriage without the
station's consent, as discussed below. Therefore, we have identified
other measures that we could take to improve the process and decrease
the occurrence of these disruptions. As detailed in this NPRM, we seek
comment on these measures and on others that could be beneficial and
constructive. Is there an impact on the basic service rate that
consumers pay as a result of the retransmission consent fees or
disputes?
18. As a threshold matter, we note that the Petition proposed,
among other suggestions, that the Commission adopt a mandatory
arbitration mechanism for retransmission consent disputes, and provide
for mandatory interim carriage while an MVPD negotiates in good faith
or while dispute resolution proceedings are pending. Petition at 31-40.
In response to the Public Notice seeking comment on the Petition, some
commenters have agreed that the Commission should adopt mandatory
dispute resolution procedures and/or interim carriage mechanisms. In
contrast, other commenters have argued that the Commission should not,
as a matter of policy, adopt mandatory dispute resolution procedures or
interim carriage mechanisms, and/or that in any event the Commission
lacks authority to adopt such procedures and mechanisms. We do not
believe that the Commission has authority to adopt either interim
carriage mechanisms or mandatory binding dispute resolution procedures
applicable to retransmission consent negotiations. First, regarding
interim carriage, examination of the Act and its legislative history
has convinced us that the Commission lacks authority to order carriage
in the absence of a broadcaster's consent due to a retransmission
consent dispute. Rather, section 325(b) of the Act expressly prohibits
the retransmission of a broadcast signal without the broadcaster's
consent. 47 U.S.C. 325(b)(1)(A) (``No cable system or other
multichannel video programming distributor shall retransmit the signal
of a broadcasting station, or any part thereof, except--(A) with the
express authority of the originating station''). Furthermore,
consistent with the
[[Page 17076]]
statutory language, the legislative history of section 325(b) states
that the retransmission consent provisions were not intended ``to
dictate the outcome of the ensuing marketplace negotiations'' and that
broadcasters would retain the ``right to control retransmission and to
be compensated for others' use of their signals.'' S.Rep.No. 92, 102nd
Cong., 1st Sess. 1991, reprinted in 1992 U.S.C.C.A.N. 1133, 1169. We
thus interpret section 325(b) to prevent the Commission from ordering
carriage over the objection of the broadcaster, even upon a finding of
a violation of the good faith negotiation requirement. Consistent with
this interpretation, the Commission previously found that it has ``no
latitude * * * to adopt regulations permitting retransmission during
good faith negotiation or while a good faith or exclusivity complaint
is pending before the Commission where the broadcaster has not
consented to such retransmission.'' Good Faith Order. Contrary to the
suggestion of some commenters, section 4(i) of the Act does not
authorize the Commission to act in a manner that is inconsistent with
other provisions of the Act, and thus does not support Commission-
ordered carriage in this context. Second, we believe that mandatory
binding dispute resolution procedures would be inconsistent with both
section 325 of the Act, in which Congress opted for retransmission
consent negotiations to be handled by private parties subject to
certain requirements, and with the Administrative Dispute Resolution
Act (ADRA), which authorizes an agency to use arbitration ``whenever
all parties consent.'' 5 U.S.C. 575(a)(1).
19. In light of the statutory mandate in section 325 and the
restrictions imposed by the ADRA, we do not believe that we have
authority to require either interim carriage requirements or mandatory
binding dispute resolution procedures. Parties may comment on that
conclusion. We seek comment below on other ways the Commission can
protect the public from, and decrease the frequency of, retransmission
consent negotiation impasses within our existing statutory authority.
A. Strengthening the Good Faith Negotiation Standards of Sec.
76.65(b)(1) of the Commission's Rules
20. When the Commission originally adopted the good faith standards
in 2000, the circumstances were different from the conditions industry
and consumers face today. At that time programming disruptions due to
retransmission consent disputes were rare. The Commission's approach
then was to provide broad standards of what constitutes good faith
negotiation but generally leave the negotiations to the parties. See,
e.g., Good Faith Order (``[T]he Commission concluded in the Broadcast
Signal Carriage Order that Congress did not intend that the Commission
should intrude in the negotiation of retransmission consent. We do not
interpret the good faith requirement of SHVIA to alter this settled
course and require that the Commission assume a substantive role in the
negotiation of the terms and conditions of retransmission consent.'').
As the Commission stated, ``The statute does not appear to contemplate
an intrusive role for the Commission with regard to retransmission
consent.'' See id. Instead, the Commission stated that ``[w]e believe
that, by imposing the good faith obligation, Congress intended that the
Commission develop and enforce a process that ensures that broadcasters
and MVPDs meet to negotiate retransmission consent and that such
negotiations are conducted in an atmosphere of honesty, purpose and
clarity of process.'' See id. The good faith provision of SHVIA was
specifically targeted at constraining unacceptable negotiating conduct
on the part of broadcasters, but Congress subsequently recognized that
it is necessary to constrain unacceptable retransmission consent
negotiating conduct of MVPDs as well as broadcasters, and thus imposed
a reciprocal bargaining obligation in SHVERA. See, e.g., Implementation
of Section 207 of the Satellite Home Viewer Extension and
Reauthorization Act of 2004; Reciprocal Bargaining Obligation, 70 FR
40216, July 13, 2005 (SHVERA Reciprocal Bargaining Order) (``Section
207 [of SHVERA] * * * amends [section 325(b)(3)(C) of the Act] to
impose a reciprocal good faith retransmission consent bargaining
obligation on [MVPDs]. This section alters the bargaining obligations
created by [SHVIA] which imposed a good faith bargaining obligation
only on broadcasters.'') (footnote omitted). In recent times, the
actual and threatened service disruptions resulting from increasingly
contentious retransmission consent disputes present a growing
inconvenience and source of confusion for consumers. We believe that
these changes in circumstances support reevaluation of the good faith
rules, particularly to ameliorate the impact of retransmission consent
negotiations on innocent consumers. We note that recent letters from
members of Congress have emphasized the effect of retransmission
consent negotiations on consumers.
21. As discussed above, in implementing the reciprocal good faith
negotiation requirement of section 325 of the Act, the Commission
established a list of seven objective good faith negotiation standards.
Violation of any of these standards by a broadcast station or MVPD is
considered a per se breach of its obligation to negotiate in good
faith. The record indicates that there is some uncertainty in the
marketplace about whether certain conduct constitutes a failure to
negotiate in good faith. Accordingly, we seek comment on augmenting our
rules to include additional objective good faith negotiation standards,
the violation of which would be considered a per se breach of Sec.
76.65 of the Commission's rules. We believe that additional per se good
faith negotiation standards could increase certainty in the
marketplace, thereby promoting the successful completion of
retransmission consent negotiations and protecting consumers from
impasses or near impasses. In addition, we seek comment on clarifying
various aspects of our existing good faith rules.
22. First, we seek comment on whether it should be a per se
violation for a station to agree to give a network with which it is
affiliated the right to approve a retransmission consent agreement with
an MVPD or to comply with such an approval provision. In response to
the Public Notice seeking comment on the Petition, certain commenters
discussed network involvement in the retransmission consent process.
Some commenters have argued that the Commission should consider
preventing networks from dictating whether and by what terms an
affiliated station may grant retransmission consent. Others have argued
that provisions in network-affiliate agreements do not interfere with
the requirement that broadcasters negotiate retransmission consent in
good faith. Interested parties have argued that, in recent
retransmission consent negotiations, a network's exercise of its
contractual approval right has hindered the progress of the
negotiations. The good faith rules currently require the Negotiating
Entity to designate a representative with authority to make binding
representations on retransmission consent and not unreasonably delay
negotiations. 47 CFR 76.65(b)(1)(ii) and (iii). If a station has
granted a network a veto power over any retransmission consent
agreement with an MVPD, then it has arguably impaired its own ability
to designate a representative who can
[[Page 17077]]
bind the station in negotiations, contrary to our rules. Do provisions
in network affiliation agreements giving the network approval rights
over the grant of retransmission consent by its affiliate represent a
reasonable exercise by a network of its distribution rights in network
programming? If so, in considering revisions to the good faith rules,
how should the Commission balance the networks' rights against the
stations' obligation to negotiate in good faith and the regulatory goal
of protecting consumers from service disruptions? We seek comment on
the appropriate parameters of network involvement in retransmission
consent negotiations. We would also welcome comment and data regarding
how frequently a network's assertion of the right to review or approve
an agreement affects negotiations. In our consideration of the role of
the network in its affiliates' retransmission consent negotiations, we
do not intend to interfere with the flow of revenue between networks
and their affiliates. We recognize the special value of broadcast
network programming to local broadcast television stations and to
MVPDs. Accordingly, we do not propose to prevent a network from
contracting to receive a portion of its affiliates' retransmission
consent fees. Rather, we seek comment on the permissible scope of a
network's involvement in the negotiations or right to approve an
agreement. If the Commission decides to prohibit stations from granting
networks the right to approve their affiliates' retransmission consent
agreements, should we, on a going-forward basis, abrogate any
provisions restricting an affiliate's power to grant retransmission
consent without network approval that appear in existing agreements?
23. Second, we seek comment on whether it should be a per se
violation for a station to grant another station or station group the
right to negotiate or the power to approve its retransmission consent
agreement when the stations are not commonly owned. Such consent might
be reflected in local marketing agreements (LMAs), Joint Sales
Agreements (JSAs), shared services agreements, or other similar
agreements. Some commenters have noted problems that occur when one
station or station group negotiates retransmission consent on behalf of
a station or station group that is not commonly owned. The Commission
believes that, when a station relinquishes its responsibility to
negotiate retransmission consent, there may be delays to the
negotiation process, and negotiations may become unnecessarily
complicated if an MVPD is forced to negotiate with multiple parties
with divergent interests, potentially including interests that extend
beyond a single local market. The proposal on which we seek comment
would effectively prohibit joint retransmission consent negotiations by
stations that are not commonly owned. Should the Commission, on a
going-forward basis, abrogate any such terms that appear in existing
agreements? One commenter has argued that the negotiating arrangements
about which others complain are rare, and that they are largely in
small markets ``where such sharing agreements may well be necessary for
the stations to survive economically.'' Accordingly, we seek comment on
the prevalence of agreements that grant one station or station group
the right to negotiate or approve the retransmission consent agreement
of a station or station group that is not commonly owned; the impact of
such arrangements on the negotiation process; and the potential harms
and benefits of prohibiting such agreements. How should the Commission
balance any asserted benefits of such sharing agreements against the
goal of protecting consumers from service disruptions?
24. Third, we seek comment on whether it should be a per se
violation for a Negotiating Entity to refuse to put forth bona fide
proposals on important issues. One commenter has stated that a refusal
to make proposals as to key issues is a bad faith tactic in
retransmission consent negotiations. How should we identify the
category of issues about which a Negotiating Entity is required to put
forth a bona fide proposal? How should we determine what constitutes a
bona fide proposal, or whether a proposal is sufficiently unreasonable
as to constitute bad faith? We note that the Commission has defined a
bona fide request in the context of a programmer's request for leased
access on a system of a small cable operator. See 47 CFR 76.970(i)(3).
25. Fourth, we seek comment on whether it should be a per se
violation for a Negotiating Entity to refuse to agree to non-binding
mediation when the parties reach an impasse within 30 days of the
expiration of their retransmission consent agreement. We seek comment
on whether 30 days from the expiration of the retransmission consent
agreement is the appropriate time frame within which to require non-
binding mediation. In previous retransmission consent disputes, the
Commission has encouraged parties to engage in voluntary dispute
resolution mechanisms as a means to reach agreement because a neutral
third party may be able to facilitate agreement where the parties have
otherwise failed. The Commission previously stated its belief ``that
voluntary mediation can play an important part in the facilitation of
retransmission consent and [we] encourage parties involved in
protracted retransmission consent negotiations to pursue mediation on a
voluntary basis.'' See Good Faith Order (also stating that the
Commission would revisit the issue of mandatory retransmission consent
mediation if its experience in enforcing the good faith provision
indicates that it is necessary). If parties are unable to reach
agreement on their own and the expiration of their existing agreement
is imminent, should we consider it bad faith for them to refuse to
participate in non-binding mediation? Would mediation advance the
successful completion of retransmission consent negotiations, even if
it is not binding on the parties? Although as noted above we do not
believe we have authority to mandate binding arbitration, we believe
that we have authority to require non-binding mediation. Because the
mediation would be non-binding, we believe that it would be consistent
with the statutory prohibition on retransmission without the
originating station's express authority. Non-binding mediation would
also be consistent with the ADRA, which prohibits compelled binding
arbitration. See 5 U.S.C. 571 through 584. We seek comment on our
proposal to require non-binding mediation. If we require mediation, how
should a mediator be selected, and how should the parties determine who
is responsible for the costs of mediation? How would the ground rules
of the mediation be determined?
26. Fifth, we seek comment on what it means to ``unreasonably''
delay retransmission consent negotiations. Section 76.65(b)(1)(iii) of
the Commission's rules currently provides that ``[r]efusal 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,'' constitutes a violation
of the Negotiating Entity's duty to negotiate retransmission consent in
good faith. 47 CFR 76.65(b)(1)(iii). Commenters report that
negotiations have been adversely affected by a party--either a
broadcaster or an MVPD--delaying the commencement or progress of a
negotiation as a tactic to gain advantage rather than out of necessity.
We believe that delaying retransmission consent negotiations could
predictably and intentionally lead
[[Page 17078]]
to the type of impasse and threat of disruption that inconveniences
consumers. Accordingly, we seek comment on what standards we should
consider in determining whether a Negotiating Entity has acted in a
manner that ``unreasonably'' delays retransmission consent negotiations
and thus violates the duty to negotiate in good faith.
27. Sixth, we seek comment on whether a broadcaster's request or
requirement, as a condition of retransmission consent, that an MVPD not
carry an out-of-market ``significantly viewed'' (SV) station violates
Sec. 76.65(b)(1)(vi) of the Commission's rules. Section
76.65(b)(1)(vi) of the Commission's rules provides that ``[e]xecution
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'' is a
violation of the Negotiating Entity's duty to negotiate in good faith.
See 47 CFR 76.65(b)(1)(vi). Despite the existence of this rule, in the
Commission's proceeding implementing section 203 of the Satellite
Television Extension and Localism Act of 2010 (STELA), DISH Network
L.L.C. requested that the Commission adopt a rule to ``clarify that
tying retransmission consent to restrictions on SV station carriage''
violates the requirement that parties negotiate retransmission consent
in good faith. See Comments and Petition for Further Rulemaking of DISH
Network L.L.C., MB Docket No. 10-148, at 9 (filed Aug. 17, 2010). DISH
Network stated that some ``local stations have tied the grant of their
retransmission consent for local-into-local service to concessions from
satellite carriers that the carriers will not introduce any SV stations
of the same network.'' Id. (footnote omitted). We note that the
Commission previously interpreted Sec. 76.65(b)(1)(vi) of the
Commission's rules narrowly, as involving collusion between a
broadcaster and an MVPD. See, e.g., Good Faith Order (``For example,
Broadcaster A is prohibited from agreeing with MVPD B that it will not
reach retransmission consent with MVPD C.''); SHVERA Reciprocal
Bargaining Order (``As is evidenced by the discussion in the Good Faith
Order, that provision is intended to cover collusion between a
broadcaster and an MVPD requiring non-carriage by another MVPD * *
*.''); see also ATC Broadband LLC and Dixie Cable TV, Inc. v. Gray
Television Licensee, Inc., 24 FCC Rcd at 1649, para. 7. We seek comment
on whether to interpret this rule more expansively to preclude a
broadcast station from executing an agreement prohibiting an MVPD from
carrying an out-of-market SV station that might otherwise be available
to consumers as a partial substitute for the in-market station's
programming, in the event of a retransmission consent negotiation
impasse. Should we expand our prior interpretation of this rule to
cover any additional scenarios? Have there been instances in which an
MVPD would have carried an out-of-market SV station, but for a local
broadcaster's request or requirement to the contrary? Do the holders of
the rights to certain programming, including but not limited to
broadcast networks, impose geographic restrictions on the stations to
which they license programming, such that an out-of-market SV station
may be prohibited from consenting to carriage, in any event? We also
invite comment on whether stations have threatened to delay or refuse
to reach a retransmission agreement unless the MVPD commits to forego
carriage of out-of-market SV stations without including such commitment
in the executed agreement. Do such threats circumvent the rule as
written by keeping the commitment out of the executed document? Should
we revise the rule to prevent such circumvention?
28. Finally, we seek comment on whether there are any additional
actions or practices that should be deemed to constitute per se
violations of a Negotiating Entity's duty to negotiate retransmission
consent agreements in good faith under Sec. 76.65 of the Commission's
rules, or that we should otherwise prohibit in order to protect
consumers. For example, if a broadcaster or MVPD repeatedly insists on
month-to-month retransmission consent agreements or a new agreement
term of less than one year, should that constitute a per se violation
of the Negotiating Entity's duty to negotiate retransmission consent in
good faith? Month-to-month retransmission consent agreements are
different from short-term extensions to existing retransmission consent
agreements for the purpose of negotiating a mutually satisfactory long-
term retransmission consent agreement, which the Commission encourages
as a means of avoiding a loss of programming. In addition, how should
the Commission view the required inclusion of a ``most favored nation''
(MFN) clause in a retransmission consent agreement? An MFN clause
refers to an agreement that if Party A awards terms or conditions to a
third party that are more favorable than those currently in place with
Party B, then Party A must offer the more favorable terms or conditions
to Party B. How often are MFN clauses included in retransmission
consent agreements, what is their intended purpose, and what is their
effect on retransmission consent negotiations?
29. With respect to other practices the Commission should consider,
one commenter stated, ``Small and mid-size MVPDs could greatly enhance
their ability to negotiate with broadcasters if they were permitted to
pool their resources, appoint an agent, and negotiate as a group.'' We
seek comment on this proposal, including how to reconcile it with the
proposal described above that would prevent a broadcast station from
granting to another station or station group the right to negotiate or
the power to approve its retransmission consent agreement when the
stations are not commonly owned. In addition, we ask parties to comment
on whether small and new entrant MVPDs are typically forced to accept
retransmission consent terms that are less favorable than larger or
more established MVPDs, and if so, whether this is fair. And, several
commenters have suggested that the Commission should address the
ability of broadcasters to condition retransmission consent on the
purchase of other programming services, such as the programming of
affiliated non-broadcast networks. We note that a number of commenters
see problems with such broadcaster requirements. Is this something that
the Commission should consider in evaluating whether broadcasters have
negotiated in good faith?
30. Are there additional actions that should be listed as
presumptive breaches of good faith but subject to arguments rebutting
the presumption in special circumstances? Would the approach of
rebuttable presumptions rather than per se violations offer beneficial
flexibility or diminish the benefits of greater specificity in the good
faith rule? We also invite comment on ways the Commission can
strengthen the remedies available upon finding a violation of the good
faith standards to encourage compliance with the rules. Are there
additional penalties that the Commission can impose for failure to
negotiate in good faith that would provide a meaningful incentive for
compliance with the good faith standard, such as considering such
failure in the context of license renewals, including, e.g., satellite
and CARS licenses? See, e.g., 47 CFR 25.102, 25.156, 25.160, 78.11 et
seq.; 47 U.S.C. 301, 308(b), 309. Finally, to what extent do MVPDs
impose early termination
[[Page 17079]]
fees (ETFs) on their subscribers, and what effect, if any, do ETFs have
on retransmission consent negotiations and on consumers' ability to
switch MVPDs in the event of a negotiation impasse? What actions, if
any, could the Commission take to address any problems involving ETFs?
B. Specification of the Totality of the Circumstances Standard of Sec.
76.65(b)(2) of the Commission's Rules
31. We seek comment on revising the ``totality of the
circumstances'' standard for determining whether actions in the
negotiating process are taken in good faith, in an effort to improve
the standard's utility and to better serve innocent consumers. As
described in greater detail below, we invite comment on how the
Commission can more effectively evaluate complaints that do not allege
per se violations but involve behavior calculated to threaten
disruption of consumer access as a negotiating tactic. We seek comment
on particular behavior that the Commission should evaluate in the
context of the ``totality of the circumstances'' standard.
32. Pursuant to Sec. 76.65(b)(2) of the Commission's rules, ``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 * * *.'' 47
CFR 76.65(b)(2). The Commission has stated, ``[w]e do not intend the
totality of the circumstances test to serve as a `back door' inquiry
into the substantive terms negotiated between the parties.'' Good Faith
Order. Rather, the totality of the circumstances test enables the
Commission to consider a complaint alleging that, while a Negotiating
Entity did not violate the per se objective standards, its proposals or
actions were ``sufficiently outrageous,'' or included terms or
conditions not based on competitive marketplace considerations, so as
to violate the good faith negotiation requirement. See id.
33. Some commenters have argued that the Commission should clarify
or expand on the totality of the circumstances standard, including the
related concept of competitive marketplace considerations, while others
do not support changes to our rules governing retransmission consent.
We seek comment on whether to provide more specificity for the meaning
and scope of the ``totality of the circumstances'' standard of Sec.
76.65(b)(2) of the Commission's rules, in order to define more clearly
the instances in which a Negotiating Entity may violate this standard.
For example, the Media Bureau previously found a violation of the
totality of the circumstances standard, in response to a petition filed
by WLII/WSUR Licensee Partnership, G.P. against Choice Cable T.V.
(Choice), regarding the parties' negotiations for carriage of WLII-TV
and its booster stations WSUR-TV and WORA-TV. See Letter to Jorge L.
Bauermeister, 22 FCC Rcd 4933. While Choice stated that it halted
negotiations because it began carrying WLII's programming through
arrangements with WORA, Choice failed to provide evidence of a valid
retransmission consent agreement with WORA, and thus the Media Bureau
found that Choice breached its duty to negotiate in good faith. See id.
at 4933-34. Are there additional circumstances that the Commission
should consider in evaluating the totality of the circumstances, or is
the ``totality of the circumstances'' best left as a general provision
to capture those actions and behaviors that we do not now foresee but
that may impede productive and fair negotiations? We note that the
Commission previously provided examples of bargaining proposals that
are presumptively consistent and presumptively inconsistent with
competitive marketplace considerations and the good faith negotiation
requirement. See Good Faith Order. Should any of the potential
additional per se violations proposed in Section III.A., above, instead
be considered as part of the totality of the circumstances of a
particular negotiation? Is it sufficient to retain the existing
flexible standard, and look to precedent to provide specificity as
warranted? We seek comment on particular ways in which we could provide
more specificity in defining when conduct would breach the duty of good
faith negotiation under the ``totality of the circumstances.''
C. Revision of the Notice Requirements
34. Adequate advance notice of retransmission consent disputes for
consumers can enable them to prepare for disruptions in their video
service. However, such notice can be unnecessarily costly and
disruptive when it creates a false alarm, i.e., concern about
disruption that does not come to pass, and induces subscribers to
switch MVPD providers in anticipation of a service disruption that
never takes place. We seek comment on how best to balance useful
advance notice against the potential for causing unnecessary anxiety to
consumers. We invite comment on how best to revise our notice rules in
light of these considerations, as well as the economic impact of notice
requirements on both broadcasters and MVPDs.
35. Our current notice requirements apply to cable operators only
and are not violated by a failure to provide notice unless service is
actually disrupted. Specifically, section 614(b)(9) of the Act requires
a cable operator to notify a local commercial television station in
writing at least 30 days before either deleting or repositioning that
station. 47 U.S.C. 534(b)(9). Section 76.1601 of the Commission's rules
further specifies that a cable operator must ``provide written notice
to any broadcast television station at least 30 days prior to either
deleting from carriage or repositioning that station. Such notification
shall also be provided to subscribers of the cable system.'' 47 CFR
76.1601. (Sec. Sec. 76.1602 and 76.1603 of the Commission's rules
contain additional requirements for notifying subscribers and cable
franchise authorities. 47 CFR 76.1602, 76.1603.) Accordingly, under the
current rule, if a cable operator fails to give notice 30 days before
the retransmission consent agreement's expiration, and the agreement is
ultimately renewed without the station being deleted, then the cable
operator has not violated the rule. If, however, the station is
ultimately deleted, and the cable operator has not given the required
30 day notice, then the cable operator is in violation of Sec. 76.1601
of the Commission's rules. Of course, the cable operator does not know
whether the negotiations will ultimately fail and it will be required
to delete the broadcast signal until the agreement actually expires. We
note that, notwithstanding the fact that the Commission may not have
enforced the current notice requirements in all instances in which a
station is deleted without notice, it reserves the right to do so in
its discretion. See Heckler v. Chaney, 470 U.S. 821, 831 (1985) (``an
agency's decision not to prosecute or enforce, whether through civil or
criminal process, is a decision generally committed to an agency's
absolute discretion'').
36. Some commenters have proposed that we not only clarify but also
expand our existing notice requirements so that consumers will have
sufficient time to determine their options and take appropriate action
in the event that a broadcast signal is deleted from an MVPD's service.
Asserted benefits of enhanced notice include providing consumers with
sufficient time to obtain access to particular broadcast signals by
alternative means, and encouraging the successful completion of renewal
[[Page 17080]]
retransmission consent agreements more than 30 days before an existing
agreement expires. In contrast, other commenters have argued that
enhanced notice would have negative results such as unnecessarily
alarming consumers and public officials, making negotiations
increasingly contentious, providing broadcasters and rival MVPDs with
more time to encourage customers to switch MVPDs, and causing customers
who do switch to bear the associated costs unnecessarily if the
negotiations are resolved without service disruption. We note that some
cable operators have expressed their view that the existing notice
requirements are not triggered by failed retransmission consent
negotiations because the loss of the signal is not within the cable
operators' ``control.'' See 47 CFR 76.1603(b) (``Notice must be given
to subscribers a minimum of thirty (30) days in advance of such changes
if the change is within the control of the cable operator.''). We
clarify that the notice requirements of Sec. 76.1601 of the
Commission's rules do not vary based on whether a change is within the
cable operator's control. Our focus in this NPRM is on Sec. 76.1601 of
the Commission's rules, which requires notice when a cable operator
deletes or repositions broadcast signals, rather than Sec. 76.1603 of
the Commission's rules, which addresses customer service rules
applicable to cable operators. Additionally, even if we were concerned
with Sec. 76.1603 of the Commission's rules, we would consider
retransmission consent negotiations to be within the control of both
parties to the negotiations, and thus, failure to reach retransmission
consent agreement would not be an excuse for failing to provide notice.
37. We seek comment on whether we should revise our notice rules to
require that notice of potential deletion of a broadcaster's signal be
given to consumers once a retransmission consent agreement is within 30
days of expiration, unless a renewal or extension has been executed,
and regardless of whether the station's signal is ultimately deleted.
Under this approach, if parties have not reached a new agreement prior
to 30 days from the agreement's expiration, notice must be given to
consumers. Would the requirement to provide such notice encourage the
parties to conclude their negotiations more than 30 days before the
expiration of the existing agreement, and thus help avoid the station
deletions that deprive MVPD customers of local broadcast stations?
Should we require notice to be given by any particular means? How
should the Commission avoid imposing notice requirements that become so
frequent that MVPD customers discount the notices? We have observed
that the notices of impending impasses that generally have been
provided by broadcasters and MVPDs alike are often little more than ad
hominem attacks on the other party. We seek comment on what steps the
Commission could take to ensure, to the extent possible, that required
notifications provide useful information to consumers instead of merely
serving as a further front in the retransmission consent war. For
example, LIN objects to notices in which MVPDs ``discount the
possibility of a carriage interruption.'' If the parties to a
retransmission consent agreement begin giving notice, and subsequently
agree to an extension pending further negotiations, should new notice
be required of the extension agreement, and when should that notice be
given? Where the parties enter into multiple extensions of their
existing agreement, should notice be given of each extension? Would
multiple notices be confusing to consumers? We also seek comment on
extending the notice requirements with respect to deletions associated
with retransmission consent disputes to non-cable MVPDs and
broadcasters. What sources of authority does the Commission possess to
support imposing notice requirements on non-cable MVPDs and
broadcasters? See, e.g., 47 U.S.C. 154(i), 301, 303(r), 303(v), 307,
309, 335(a). Would the benefits of advance notice to subscribers,
particularly in allowing customers to switch providers in order to
avoid service disruptions and possibly reducing their likelihood,
exceed the costs to subscribers, particularly in encouraging
unnecessary switching of MVPDs when service disruptions do not occur?
D. Application of the ``Sweeps'' Prohibition to Retransmission Consent
Disputes
38. We seek comment on whether we should extend the Commission's
``sweeps'' prohibition to non-cable MVPDs. Section 614(b)(9) of the Act
states:
A cable operator shall provide written notice to a local
commercial television station at least 30 days prior to either
deleting from carriage or repositioning that station. No deletion or
repositioning of a local commercial television station shall occur
during a period in which major television ratings services measure
the size of audiences of local television stations. The notification
provisions of this paragraph shall not be used to undermine or evade
the channel positioning or carriage requirements imposed upon cable
operators under this section.
47 U.S.C. 534(b)(9). Note 1 to Sec. 76.1601 of the Commission's rules
states:
No deletion or repositioning of a local commercial television
station shall occur during a period in which major television
ratings services measure the size of audiences of local television
stations. For this purpose, such periods are the four national four-
week ratings periods--generally including February, May, July and
November--commonly known as audience sweeps.
47 CFR 76.1601, Note 1. Commenters have expressed differing views about
the scope of this provision.
39. We note that the record evidences some confusion about whether,
despite the prohibition on deletion during the sweeps period, a
broadcaster may require a cable operator to delete the broadcaster's
signal when the retransmission consent agreement expires during sweeps
and the parties do not reach an extension or renewal agreement. The
sweeps prohibition, found in section 614(b)(9) of the Act, states that
``No deletion or repositioning of a local commercial television station
shall occur during a period in which major television ratings services
measure the size of audiences of local television stations.'' 47 U.S.C.
534(b)(9). The provision is contained within Section 614 which imposes
carriage obligations on cable operators. 47 U.S.C. 534(a). Although the
language of the statute is broadly worded, there is nothing in section
614(b)(9) to suggest that Congress intended to impose a reciprocal
obligation on broadcasters during sweeps. To the contrary, the
legislative history explains that ``A cable operator may not drop or
reposition any such station during a `sweeps' period when ratings
services measure local television audiences.'' See S. Rep. No. 92,
102nd Cong., 1st Sess. 1991, at 86, reprinted in 1992 U.S.C.C.A.N.
1133, 1219. Moreover, this reading of the statute would eliminate any
tension with the retransmission consent provisions, which provide that
``No cable system or other multichannel video programming distributor
shall retransmit the signal of a broadcasting station, or any part
thereof, except with the express authority of the originating
station.'' 47 U.S.C. 325(b)(1)(A). Interpreting section 614(b)(9) to
prohibit broadcasters from withholding retransmission consent during
sweeps would run counter to section 325(b)(1)(A)'s express limitation
on broadcast carriage without a broadcaster's consent. 47 U.S.C.
534(b)(9), 325(b)(1)(A). While DirecTV
[[Page 17081]]
and DISH have stated that permitting broadcasters to withhold
programming during sweeps would be contrary to precedent (citing
Northland Cable TV, Inc., 23 FCC Rcd 7865 (MB 2008), which cites Time
Warner Cable, 15 FCC Rcd 7882 (CSB 2006)), we note that neither of
those bureau-level decisions involved a retransmission consent
agreement expiring during sweeps and the broadcaster requesting
deletion of its own signal. In any event, to the extent that language
in any prior cases could be read as precluding a broadcaster from
requiring a cable operator to delete its signal during sweeps, staff-
level decisions are not binding on the Commission. See Comcast Corp. v.
FCC, 526 F.3d 763, 769 (D.C. Cir. 2008). We seek comment on the above
analysis.
40. Likewise, it does not appear that section 335(a) grants the
Commission authority to impose a sweeps limitation on broadcasters.
Section 335(a) directs the Commission to ``initiate a rulemaking
proceeding to impose, on providers of direct broadcast satellite
service, public interest or other requirements for providing video
programming.'' 47 U.S.C. 335(a). Thus, while section 335 would arguably
grant the Commission authority to extend the sweeps rule to DBS
providers, it does not appear to confer authority to extend the sweeps
rule to broadcasters. We invite comment on this view.
41. The sweeps prohibition generally prevents a cable operator from
deleting a station during the sweeps period if the retransmission
consent agreement expires during sweeps. We do not believe that the
existing prohibition on deleting or repositioning a local commercial
television station during sweeps periods applies to non-cable MVPDs,
such as DBS, given that the provision appears within section 614, a
section that focuses on the carriage obligations of cable operators.
See 47 U.S.C. 534(b)(9). We further note that the prohibition on
deleting a local station during sweeps periods appears inextricably
intertwined with the prior sentence expressly requiring a ``cable
operator'' to provide at least 30 days notice to a local station prior
to deletion of that station. Id. We see nothing in the legislative
history of the statute to suggest that Congress intended section
614(b)(9) to apply to non-cable MVPDs. Consistent with the statute,
Sec. 76.1601 of the Commission's rules expressly applies to cable
operators only. See 47 CFR 76.1601. A different provision of the Act,
section 338, governs satellite carriage of local broadcast stations,
and it does not include a prohibition on deletion or repositioning
during sweeps. See 47 U.S.C. 338. Accordingly, to achieve regulatory
parity between cable systems and other MVPDs, we seek comment on
whether we should extend the Commission's ``sweeps rule'' to non-cable
MVPDs. Does the Commission have authority to extend the prohibition to
DBS and other non-cable MVPDs, such as through sections 154(i), 303(r),
303(v), and 335(a) of the Act? 47 U.S.C. 154(i), 303(r), 303(v),
335(a).
E. Elimination of the Network Non-Duplication and Syndicated
Exclusivity Rules
42. We seek comment on the potential benefits and harms of
eliminating the Commission's rules concerning network non-duplication
and syndicated programming exclusivity. See 47 CFR 76.92 et seq.,
76.101 et seq., 76.122, 76.123. The network non-duplication rules
permit a station with exclusive rights to network programming, as
granted by the network, to assert those rights by using notification
procedures in the Commission's rules. See 47 CFR 76.92 through 76.94.
The rules, in turn, prohibit the cable system from carrying the network
programming as broadcast by any other station within the ``geographic
zone'' to which the contractual rights and rules apply. See 47 CFR
76.92. (The size of the geographic zone depends upon the size of the
market in which the station is located. See 47 CFR 76.92(b).) Thus, a
cable system negotiating retransmission consent with a local network
affiliate may face greater pressure to reach agreement by virtue of the
cable system's inability to carry another affiliate of the same network
if the retransmission consent negotiations fail. Similarly, under the
syndicated exclusivity rules, a station may assert its contractual
rights to exclusivity within a specified geographic zone to prevent a
cable system from carrying the same syndicated programming aired by
another station. See 47 CFR 76.101 et seq. These rules are collectively
referred to as the ``exclusivity rules.'' They are grounded in the
private contractual arrangements that exist between a station and the
provider of network or syndicated programming. The Commission's rules
do not create these rights but rather provide a means for the parties
to the exclusive contracts to enforce them through the Commission
rather than through the courts. In fact, the Commission's rules limit
the circumstances in which the private contracts can be enforced by,
for example, limiting the geographic area in which the exclusivity
applies or exempting small cable systems and significantly viewed
stations. See, e.g., 47 CFR 76.92(b) and (f), 76.95(a); see also 47 CFR
76.93 (``Television broadcast station licensees shall be entitled to
exercise non-duplication rights * * * in accordance with the
contractual provisions of the network-affiliate agreement.'').
43. The Petition argued that the Commission's rules provide
broadcasters with a ``one-sided level of protection'' that is no longer
justified, including through the network non-duplication and syndicated
exclusivity rules. Petition at 12-15. Commenters also argued that the
exclusivity rules provide broadcasters with artificially inflated
bargaining leverage in retransmission consent negotiations. In
addition, ACA filed a Petition for Rulemaking to Amend 47 CFR 76.64,
76.93 and 76.103 on March 2, 2005 (ACA's 2005 Petition), asserting that
competition and consumers are harmed when broadcasters use exclusivity
and network affiliation agreements to extract ``supracompetitive
prices'' for retransmission consent from small cable companies. See
Public Notice, Report No. 2696, RM-11203 (Mar. 17, 2005). We hereby
incorporate in this proceeding by reference ACA's 2005 Petition, as
well as the comments filed in response thereto. In contrast, other
commenters have asserted that network non-duplication and syndicated
exclusivity provisions are important to foster localism. Some
commenters have also suggested that eliminating the Commission's
exclusivity rules may have little effect on retransmission consent
negotiations, because private exclusive contracts between broadcasters
and programming suppliers would remain in place.
44. We seek comment on whether eliminating the Commission's network
non-duplication and syndicated exclusivity rules, without abrogating
any private contractual provisions, would have a beneficial impact on
retransmission consent negotiations. Would eliminating these rules help
to minimize regulatory intrusion in the market, thus better enabling
free market negotiations to set the terms for retransmission consent?
The Commission previously stated in discussing its exclusivity rules,
``By requiring MVPDs to black out duplicative programming carried on
any distant signals they may import into a local market, the
Commission's network non-duplication and syndicated exclusivity rules
provide a regulatory means for broadcasters to prevent MVPDs from
undermining their contractually negotiated exclusivity rights.'' See
Retransmission Consent and Exclusivity Rules: Report to Congress
Pursuant to Section 208 of the Satellite
[[Page 17082]]
Home Viewer Extension and Reauthorization Act of 2004, para. 17 (Sept.
8, 2005), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-260936A1.pdf. Are these rules still necessary, or is
any benefit of these rules outweighed by a negative impact on
retransmission consent negotiations? Do these rules serve a useful
purpose in today's marketplace? Should exclusivity in this area be left
entirely to the private marketplace, without providing any means of
enforcement through the Commission? Would there be a beneficial impact
to removing these rules if the contractual provisions that the rules
enforce stay in place? Would the elimination of the network non-
duplication and syndicated exclusivity rules have a negative impact on
localism? We seek comment on the impact of our network non-duplication
and syndicated exclusivity rules on the distribution of programming by
television stations. Do these rules provide stations and networks with
any rights that cannot be secured through a combination of network-
affiliate contracts and retransmission consent? Under the existing
exclusivity rules, the in-market television station has the right to
assert network non-duplication and syndicated exclusivity protection
based on its contractual relationship with the network, regardless of
whether it is actually carried by the cable system. See Amendment of
Parts 73 and 76 of the Commission's Rules relating to program
exclusivity in the cable and broadcast industries, Report and Order, 3
FCC Rcd 5299, 5313-14, 5320, para. 92, 95, 122 (1988). As an
alternative to eliminating the network non-duplication rule completely
as discussed above, we seek comment on revising the network non-
duplication rule so that it does not apply to a television station that
has not granted retransmission consent. Thus, a television station
would only be permitted to assert network non-duplication protection if
it is actually carried on the cable system. We seek comment on this
proposal.
45. We note that in SHVIA Congress extended the network non-
duplication and syndicated exclusivity rules to DBS but only in
extremely limited situations that are not equivalent to their
application to cable systems. See 47 U.S.C. 339(b)(1) (applying network
non-duplication protection and syndicated exclusivity protection only
to ``nationally distributed superstations,'' which are defined so that
they are limited to six stations); 47 U.S.C. 339(d)(2). See also
Implementation of the Satellite Home Viewer Improvement Act of 1999:
Application of Network Nonduplication, Syndicated Exclusivity, and
Sports Blackout Rules to Satellite Retransmissions of Broadcast
Signals, 65 FR 68082, November 14, 2000 (SHVIA Exclusivity Rules
Order). In contrast, the cable network non-duplication rules may apply
to any station broadcasting network programming. See 47 CFR 76.92(a)
and 76.93 (subject to geographic limitations and exemptions based on
the cable system's size or a station's ``significantly viewed'' status,
Sec. Sec. 76.92(f) and 76.95(a) of the Commission's rules). See also
47 CFR 76.101 and 76.106 (governing syndicated exclusivity). As
specified in SHVIA, the Commission's rules apply the exclusivity
requirements only to ``nationally distributed superstations.'' See
SHVIA Exclusivity Rules Order. We do not propose to eliminate or revise
these statutorily mandated rules. In SHVERA, Congress permitted DBS to
carry out-of-market significantly viewed stations (currently, 17 U.S.C.
122(a)(2) and 47 U.S.C. 340) and applied the exclusivity rules insofar
as local stations could challenge the significantly viewed status of
the out-of-market station and thus prevent its carriage, just as in the
cable context. See Implementation of the Satellite Home Viewer
Extension and Reauthorization Act of 2004, Implementation of Section
340 of the Communications Act, 70 FR 76504, December 27, 2005 (SHVERA
Significantly Viewed Report and Order). (SV status is an exception to
the network non-duplication rules. 47 CFR 76.92(f). SHVERA provided
that if a station was to be carried out-of-market as a SV station, it
would be subject to the rules allowing an in-market station to assert
network non-duplication to prevent carriage of the SV station if it
demonstrated that the SV status was no longer valid. See SHVERA
Significantly Viewed Report and Order. Thus, for DBS, if a station is
demonstrated to no longer be significantly viewed, it is not eligible
for carriage as an out-of-market SV station. We do not propose to
change this result.) We seek comment on whether and, if so, how, this
limited application of the exclusivity rules would apply to DBS if we
eliminate the rules as they apply to cable and whether eliminating
rules as to cable systems would create undue disparities or unintended
consequences for DBS. We also seek comment on whether new rules would
be needed to permit local stations to challenge the significantly
viewed status of an out-of-market station if the network non-
duplication rules are revised or eliminated.
F. Other Proposals
46. We seek comment on whether there are other actions the
Commission should take either to revise its existing rules or adopt new
rules in order to protect consumers from harm as a result of impasses
or threatened impasses in retransmission consent negotiations.
Commenters advocating rule revisions or additions should address the
Commission's authority to adopt their proposals.
IV. Conclusion
47. In conclusion, in this NPRM, we seek comment on proposed
changes to our rules to provide greater certainty to parties engaged in
retransmission consent negotiations and to better protect consumers
from the uncertainty and disruption that they may experience when such
negotiations fail to yield an agreement.
V. Procedural Matters
A. Initial Regulatory Flexibility Act Analysis
48. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA) the Commission has prepared this present Initial
Regulatory Flexibility Analysis (IRFA) concerning the possible
significant economic impact on small entities by the policies and rules
proposed in this Notice of Proposed Rulemaking (NPRM). See 5 U.S.C.
603. The RFA, see 5 U.S.C. 601-612, has been amended by the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), Public
Law 104-121, Title II, 110 Stat. 857 (1996). Written public comments
are requested on this IRFA. Comments must be identified as responses to
the IRFA and must be filed in accordance with the same filing deadlines
for comments on the NPRM. The Commission will send a copy of the NPRM,
including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration (SBA). See 5 U.S.C. 603(a). In addition, the
NPRM and IRFA (or summaries thereof) will be published in the Federal
Register. See id.
Need for, and Objectives of, the Proposed Rule Changes
49. The NPRM seeks comment on a series of proposals to streamline
and clarify the Commission's rules concerning or affecting
retransmission consent negotiations. The Commission's primary objective
is to assess whether and how the Commission rules in this arena are
ensuring that the market-based mechanisms Congress designed to govern
retransmission consent negotiations are working effectively and,
[[Page 17083]]
to the extent possible, minimize video programming service disruptions
to consumers.
50. Since Congress enacted the retransmission consent regime in
1992, there have been significant changes in the video programming
marketplace. One such change is the form of compensation sought by
broadcasters. Historically, cable operators typically compensated
broadcasters for consent to retransmit the broadcasters' signals
through in-kind compensation, which might include, for example,
carriage of additional channels of the broadcaster's programming on the
cable system or advertising time. See, e.g., General Motors Corp. and
Hughes Electronics Corp., Transferors, and The News Corp. Ltd.,
Transferee, Memorandum Opinion and Order, 19 FCC Rcd 473, 503, para. 56
(2004). Today, however, broadcasters are increasingly seeking and
receiving monetary compensation from multichannel video programming
distributors (MVPDs) in exchange for consent to the retransmission of
their signals. Another important change concerns the rise of
competitive video programming providers. In 1992, the only option for
many local broadcast television stations seeking to reach MVPD
customers in a particular Designated Market Area (DMA) was a single
local cable provider. Today, in contrast, many consumers have
additional options for receiving programming, including two national
direct broadcast satellite (DBS) providers, telephone providers that
offer video programming in some areas, and, to a degree, the Internet.
One result of such changes in the marketplace is that disputes over
retransmission consent have become more contentious and more public,
and we recently have seen a rise in negotiation impasses that have
affected millions of consumers.
51. Accordingly, we have concluded that it is appropriate for us to
reexamine our rules relating to retransmission consent. In the NPRM, we
consider revisions to the retransmission consent and related rules that
we believe could allow the market-based negotiations contemplated by
the statute to proceed more smoothly, provide greater certainty to the
negotiating parties, and help protect consumers. Accordingly, the NPRM
seeks comment on rule changes that would:
Provide more guidance under the good faith negotiation
requirements to the negotiating parties by:
[cir] Specifying additional examples of per se violations in Sec.
76.65(b)(1) of the Commission's rules; and
[cir] Further clarifying the totality of the circumstances standard
of Sec. 76.65(b)(2) of the Commission's rules;
Improve notice to consumers in advance of possible service
disruptions by extending the coverage of our notice rules to non-cable
MVPDs and broadcasters as well as cable operators, and specifying that,
if a renewal or extension agreement has not been executed 30 days in
advance of a retransmission consent agreement's expiration, notice of
potential deletion of a broadcaster's signal must be given to consumers
regardless of whether the signal is ultimately deleted;
Extend to non-cable MVPDs the prohibition now applicable
to cable operators on deleting or repositioning a local commercial
television station during ratings ``sweeps'' periods; and
Allow MVPDs to negotiate for alternative access to network
programming by eliminating the Commission's network non-duplication and
syndicated exclusivity rules.
We also seek comment on any other revisions or additions to our rules
within the scope of our authority that would improve the retransmission
consent negotiation process and help protect consumers from programming
disruptions.
Legal Basis
52. The proposed action is authorized pursuant to sections 4(i),
4(j), 301, 303(r), 303(v), 307, 309, 325, 335, and 614 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 301,
303(r), 303(v), 307, 309, 325, 335, and 534.
Description and Estimate of the Number of Small Entities to Which the
Proposed Rules Will Apply
53. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA
generally defines the term ``small entity'' as having the same meaning
as the terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' 5 U.S.C. 601(6). In addition, the term
``small business'' has the same meaning as the term ``small business
concern'' under the Small Business Act. 5 U.S.C. 601(3) (incorporating
by reference the definition of ``small business concern'' in 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a small
business applies ``unless an agency, after consultation with the Office
of Advocacy of the Small Business Administration and after opportunity
for public comment, establishes one or more definitions of such term
which are appropriate to the activities of the agency and publishes
such definition(s) in the Federal Register.'' 5 U.S.C. 601(3). A small
business concern is one which: (1) Is independently owned and operated;
(2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the SBA. 15 U.S.C. 632. Application
of the statutory criteria of dominance in its field of operation and
independence are sometimes difficult to apply in the context of
broadcast television. Accordingly, the Commission's statistical account
of television stations may be over-inclusive. Below, we provide a
description of such small entities, as well as an estimate of the
number of such small entities, where feasible.
54. Wired Telecommunications Carriers. The 2007 North American
Industry Classification System (NAICS) defines ``Wired
Telecommunications Carriers'' as follows: ``This industry comprises
establishments primarily engaged in operating and/or providing access
to transmission facilities and infrastructure that they own and/or
lease for the transmission of voice, data, text, sound, and video using
wired telecommunications networks. Transmission facilities may be based
on a single technology or a combination of technologies. Establishments
in this industry use the wired telecommunications network facilities
that they operate to provide a variety of services, such as wired
telephony services, including VoIP services; wired (cable) audio and
video programming distribution; and wired broadband Internet services.
By exception, establishments providing satellite television
distribution services using facilities and infrastructure that they
operate are included in this industry.'' U.S. Census Bureau, 2007 NAICS
Definitions, ``517110 Wired Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has
developed a small business size standard for wireline firms within the
broad economic census category, ``Wired Telecommunications Carriers.''
13 CFR 121.201 (NAICS code 517110). Under this category, the SBA deems
a wireline business to be small if it has 1,500 or fewer employees.
Census Bureau data for 2007, which now supersede data from the 2002
Census, show that there were 3,188 firms in this category that operated
for the entire year. Of this total, 3,144 had employment of 999 or
fewer, and 44 firms had had employment of 1,000 employees or
[[Page 17084]]
more. Thus under this category and the associated small business size
standard, the majority of these firms can be considered small. See
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
55. Cable Television Distribution Services. Since 2007, these
services have been defined within the broad economic census category of
Wired Telecommunications Carriers; that category is defined above. The
SBA has developed a small business size standard for this category,
which is: All such firms having 1,500 or fewer employees. Census Bureau
data for 2007, which now supersede data from the 2002 Census, show that
there were 3,188 firms in this category that operated for the entire
year. Of this total, 3,144 had employment of 999 or fewer, and 44 firms
had had employment of 1,000 employees or more. Thus under this category
and the associated small business size standard, the majority of these
firms can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
56. Cable Companies and Systems. The Commission has also developed
its own small business size standards, for the purpose of cable rate
regulation. Under the Commission's rules, a ``small cable company'' is
one serving 400,000 or fewer subscribers, nationwide. 47 CFR 76.901(e).
Industry data indicate that, of 1,076 cable operators nationwide, all
but eleven are small under this size standard. In addition, under the
Commission's rules, a ``small system'' is a cable system serving 15,000
or fewer subscribers. 47 CFR 76.901(c). Industry data indicate that, of
7,208 systems nationwide, 6,139 systems have under 10,000 subscribers,
and an additional 379 systems have 10,000-19,999 subscribers. Thus,
under this standard, most cable systems are small.
57. Cable System Operators. The Communications Act of 1934, as
amended, also contains a size standard for small cable system
operators, which is ``a cable operator that, directly or through an
affiliate, serves in the aggregate fewer than 1 percent of all
subscribers in the United States and is not affiliated with any entity
or entities whose gross annual revenues in the aggregate exceed
$250,000,000.'' 47 U.S.C. 543(m)(2); see 47 CFR 76.901(f) & nn. 1-3.
The Commission has determined that an operator serving fewer than
677,000 subscribers shall be deemed a small operator, if its annual
revenues, when combined with the total annual revenues of all its
affiliates, do not exceed $250 million in the aggregate. 47 CFR
76.901(f); see FCC Announces New Subscriber Count for the Definition of
Small Cable Operator, Public Notice, 16 FCC Rcd 2225 (Cable Services
Bureau 2001). Industry data indicate that, of 1,076 cable operators
nationwide, all but ten are small under this size standard. We note
that the Commission neither requests nor collects information on
whether cable system operators are affiliated with entities whose gross
annual revenues exceed $250 million, and therefore we are unable to
estimate more accurately the number of cable system operators that
would qualify as small under this size standard.
58. Direct Broadcast Satellite (DBS) Service. DBS service is a
nationally distributed subscription service that delivers video and
audio programming via satellite to a small parabolic ``dish'' antenna
at the subscriber's location. DBS, by exception, is now included in the
SBA's broad economic census category, ``Wired Telecommunications
Carriers'' (see 13 CFR 121.201, NAICS code 517110 (2007)), which was
developed for small wireline firms. Under this category, the SBA deems
a wireline business to be small if it has 1,500 or fewer employees. 13
CFR 121.201, NAICS code 517110 (2007). Census Bureau data for 2007,
which now supersede data from the 2002 Census, show that there were
3,188 firms in this category that operated for the entire year. Of this
total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these firms
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en. Currently, only two entities provide DBS
service, which requires a great investment of capital for operation:
DIRECTV and EchoStar Communications Corporation (EchoStar) (marketed as
the DISH Network). Each currently offers subscription services. DIRECTV
and EchoStar each report annual revenues that are in excess of the
threshold for a small business. Because DBS service requires
significant capital, we believe it is unlikely that a small entity as
defined by the SBA would have the financial wherewithal to become a DBS
service provider.
59. Satellite Master Antenna Television (SMATV) Systems, also known
as Private Cable Operators (PCOs). SMATV systems or PCOs are video
distribution facilities that use closed transmission paths without
using any public right-of-way. They acquire video programming and
distribute it via terrestrial wiring in urban and suburban multiple
dwelling units such as apartments and condominiums, and commercial
multiple tenant units such as hotels and office buildings. SMATV
systems or PCOs are now included in the SBA's broad economic census
category, ``Wired Telecommunications Carriers,'' (see 13 CFR 121.201,
NAICS code 517110 (2007)) which was developed for small wireline firms.
Under this category, the SBA deems a wireline business to be small if
it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 517110
(2007). Census Bureau data for 2007, which now supersede data from the
2002 Census, show that there were 3,188 firms in this category that
operated for the entire year. Of this total, 3,144 had employment of
999 or fewer, and 44 firms had had employment of 1,000 employees or
more. Thus under this category and the associated small business size
standard, the majority of these firms can be considered small. See
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
60. Home Satellite Dish (HSD) Service. HSD or the large dish
segment of the satellite industry is the original satellite-to-home
service offered to consumers, and involves the home reception of
signals transmitted by satellites operating generally in the C-band
frequency. Unlike DBS, which uses small dishes, HSD antennas are
between four and eight feet in diameter and can receive a wide range of
unscrambled (free) programming and scrambled programming purchased from
program packagers that are licensed to facilitate subscribers' receipt
of video programming. Because HSD provides subscription services, HSD
falls within the SBA-recognized definition of Wired Telecommunications
Carriers. 13 CFR 121.201, NAICS code 517110 (2007). The SBA has
developed a small business size standard for this category, which is:
all such firms having 1,500 or fewer employees. Census Bureau data for
2007, which now supersede data from the 2002 Census, show that there
were 3,188 firms in this category that operated for the entire year. Of
this total, 3,144 had employment of 999 or
[[Page 17085]]
fewer, and 44 firms had had employment of 1,000 employees or more. Thus
under this category and the associated small business size standard,
the majority of these firms can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
61. Broadband Radio Service and Educational Broadband Service.
Broadband Radio Service systems, previously referred to as Multipoint
Distribution Service (MDS) and Multichannel Multipoint Distribution
Service (MMDS) systems, and ``wireless cable,'' transmit video
programming to subscribers and provide two-way high speed data
operations using the microwave frequencies of the Broadband Radio
Service (BRS) and Educational Broadband Service (EBS) (previously
referred to as the Instructional Television Fixed Service (ITFS)). In
connection with the 1996 BRS auction, the Commission established a
small business size standard as an entity that had annual average gross
revenues of no more than $40 million in the previous three calendar
years. 47 CFR 21.961(b)(1). The BRS auctions resulted in 67 successful
bidders obtaining licensing opportunities for 493 Basic Trading Areas
(BTAs). Of the 67 auction winners, 61 met the definition of a small
business. BRS also includes licensees of stations authorized prior to
the auction. At this time, we estimate that of the 61 small business
BRS auction winners, 48 remain small business licensees. In addition to
the 48 small businesses that hold BTA authorizations, there are
approximately 392 incumbent BRS licensees that are considered small
entities. 47 U.S.C. 309(j). Hundreds of stations were licensed to
incumbent MDS licensees prior to implementation of section 309(j) of
the Communications Act of 1934, 47 U.S.C. 309(j). For these pre-auction
licenses, the applicable standard is SBA's small business size standard
of 1500 or fewer employees. After adding the number of small business
auction licensees to the number of incumbent licensees not already
counted, we find that there are currently approximately 440 BRS
licensees that are defined as small businesses under either the SBA or
the Commission's rules. In 2009, the Commission conducted Auction 86,
the sale of 78 licenses in the BRS areas. The Commission offered three
levels of bidding credits: (i) A bidder with attributed average annual
gross revenues that exceed $15 million and do not exceed $40 million
for the preceding three years (small business) will receive a 15
percent discount on its winning bid; (ii) a bidder with attributed
average annual gross revenues that exceed $3 million and do not exceed
$15 million for the preceding three years (very small business) will
receive a 25 percent discount on its winning bid; and (iii) a bidder
with attributed average annual gross revenues that do not exceed $3
million for the preceding three years (entrepreneur) will receive a 35
percent discount on its winning bid. Auction 86 concluded in 2009 with
the sale of 61 licenses. Of the ten winning bidders, two bidders that
claimed small business status won 4 licenses; one bidder that claimed
very small business status won three licenses; and two bidders that
claimed entrepreneur status won six licenses.
62. In addition, the SBA's Cable Television Distribution Services
small business size standard is applicable to EBS. There are presently
2,032 EBS licensees. All but 100 of these licenses are held by
educational institutions. Educational institutions are included in this
analysis as small entities. The term ``small entity'' within SBREFA
applies to small organizations (nonprofits) and to small governmental
jurisdictions (cities, counties, towns, townships, villages, school
districts, and special districts with populations of less than 50,000).
5 U.S.C. 601(4) through (6). We do not collect annual revenue data on
EBS licensees. Thus, we estimate that at least 1,932 licensees are
small businesses. Since 2007, Cable Television Distribution Services
have been defined within the broad economic census category of Wired
Telecommunications Carriers; that category is defined as follows:
``This industry comprises establishments primarily engaged in operating
and/or providing access to transmission facilities and infrastructure
that they own and/or lease for the transmission of voice, data, text,
sound, and video using wired telecommunications networks. Transmission
facilities may be based on a single technology or a combination of
technologies.'' U.S. Census Bureau, 2007 NAICS Definitions, ``517110
Wired Telecommunications Carriers,'' (partial definition), http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has
developed a small business size standard for this category, which is:
All such firms having 1,500 or fewer employees. Census Bureau data for
2007, which now supersede data from the 2002 Census, show that there
were 3,188 firms in this category that operated for the entire year. Of
this total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these firms
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
63. Fixed Microwave Services. Microwave services include common
carrier, private-operational fixed, and broadcast auxiliary radio
services. They also include the Local Multipoint Distribution Service
(LMDS), the Digital Electronic Message Service (DEMS), and the 24 GHz
Service, where licensees can choose between common carrier and non-
common carrier status. See 47 CFR 101.533 and 101.1017. At present,
there are approximately 31,428 common carrier fixed licensees and
79,732 private operational-fixed licensees and broadcast auxiliary
radio licensees in the microwave services. There are approximately 120
LMDS licensees, three DEMS licensees, and three 24 GHz licensees. The
Commission has not yet defined a small business with respect to
microwave services. For purposes of the IRFA, we will use the SBA's
definition applicable to Wireless Telecommunications Carriers (except
satellite)--i.e., an entity with no more than 1,500 persons. 13 CFR
121.201, NAICS code 517210. Under the present and prior categories, the
SBA has deemed a wireless business to be small if it has 1,500 or fewer
employees. 13 CFR 121.201, NAICS code 517210 (2007 NAICS). The now-
superseded, pre-2007 CFR citations were 13 CFR 121.201, NAICS codes
517211 and 517212 (referring to the 2002 NAICS). For the category of
Wireless Telecommunications Carriers (except Satellite), Census data
for 2007, which supersede data contained in the 2002 Census, show that
there were 1,383 firms that operated that year. U.S. Census Bureau,
2007 Economic Census, Sector 51, 2007 NAICS code 517210 (rel. Oct. 20,
2009), http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=700&-ds_name=EC0751SSSZ5&-_lang=en. Of
those 1,383, 1,368 had fewer than 100 employees, and 15 firms had more
than 100 employees. Thus under this category and the associated small
business size standard, the majority of firms can be considered small.
We note
[[Page 17086]]
that the number of firms does not necessarily track the number of
licensees. We estimate that virtually all of the Fixed Microwave
licensees (excluding broadcast auxiliary licensees) would qualify as
small entities under the SBA definition.
64. Open Video Systems. The open video system (OVS) framework was
established in 1996, and is one of four statutorily recognized options
for the provision of video programming services by local exchange
carriers. 47 U.S.C. 571(a)(3) through (4). The OVS framework provides
opportunities for the distribution of video programming other than
through cable systems. Because OVS operators provide subscription
services, OVS falls within the SBA small business size standard
covering cable services, which is ``Wired Telecommunications
Carriers.'' U.S. Census Bureau, 2007 NAICS Definitions, ``517110 Wired
Telecommunications Carriers''; http://www.census.gov/naics/2007/def/ND517110.HTM#N517110. The SBA has developed a small business size
standard for this category, which is: All such firms having 1,500 or
fewer employees. Census Bureau data for 2007, which now supersede data
from the 2002 Census, show that there were 3,188 firms in this category
that operated for the entire year. Of this total, 3,144 had employment
of 999 or fewer, and 44 firms had had employment of 1,000 employees or
more. Thus under this category and the associated small business size
standard, the majority of these firms can be considered small. See
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
In addition, we note that the Commission has certified some OVS
operators, with some now providing service. A list of OVS
certifications may be found at http://www.fcc.gov/mb/ovs/csovscer.html.
Broadband service providers (BSPs) are currently the only significant
holders of OVS certifications or local OVS franchises. The Commission
does not have financial or employment information regarding the
entities authorized to provide OVS, some of which may not yet be
operational. Thus, at least some of the OVS operators may qualify as
small entities.
65. Cable and Other Subscription Programming. The Census Bureau
defines this category as follows: ``This industry comprises
establishments primarily engaged in operating studios and facilities
for the broadcasting of programs on a subscription or fee basis. * * *
These establishments produce programming in their own facilities or
acquire programming from external sources. The programming material is
usually delivered to a third party, such as cable systems or direct-to-
home satellite systems, for transmission to viewers.'' U.S. Census
Bureau, 2007 NAICS Definitions, ``515210 Cable and Other Subscription
Programming''; http://www.census.gov/naics/2007/def/ND515210.HTM#N515210. To gauge small business prevalence in the Cable
and Other Subscription Programming industries, the Commission relies on
data currently available from the U.S. Census for the year 2007.
According to that source, which supersedes data from the 2002 Census,
there were 396 firms that in 2007 were engaged in production of Cable
and Other Subscription Programming. Of these, 386 operated with less
than 1,000 employees, and 10 operated with more than 1,000 employees.
However, as to the latter 10 there is no data available that shows how
many operated with more than 1,500 employees. Thus, under this category
and associated small business size standard, the majority of firms can
be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
66. Small Incumbent Local Exchange Carriers. We have included small
incumbent local exchange carriers in this present RFA analysis. A
``small business'' under the RFA is one that, inter alia, meets the
pertinent small business size standard (e.g., a telephone
communications business having 1,500 or fewer employees), and ``is not
dominant in its field of operation.'' 15 U.S.C. 632. The SBA's Office
of Advocacy contends that, for RFA purposes, small incumbent local
exchange carriers are not dominant in their field of operation because
any such dominance is not ``national'' in scope. We have therefore
included small incumbent local exchange carriers in this RFA analysis,
although we emphasize that this RFA action has no effect on Commission
analyses and determinations in other, non-RFA contexts.
67. Incumbent Local Exchange Carriers (LECs). Neither the
Commission nor the SBA has developed a small business size standard
specifically for incumbent local exchange services. The appropriate
size standard under SBA rules is for the category Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. 13 CFR 121.201 (2007 NAICS
code 517110). Census Bureau data for 2007, which now supersede data
from the 2002 Census, show that there were 3,188 firms in this category
that operated for the entire year. Of this total, 3,144 had employment
of 999 or fewer, and 44 firms had had employment of 1,000 employees or
more. Thus under this category and the associated small business size
standard, the majority of these firms can be considered small. See
http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en.
68. Competitive Local Exchange Carriers, Competitive Access
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other
Local Service Providers.'' Neither the Commission nor the SBA has
developed a small business size standard specifically for these service
providers. The appropriate size standard under SBA rules is for the
category Wired Telecommunications Carriers. Under that size standard,
such a business is small if it has 1,500 or fewer employees. 13 CFR
121.201 (2007 NAICS code 517110). Census Bureau data for 2007, which
now supersede data from the 2002 Census, show that there were 3,188
firms in this category that operated for the entire year. Of this
total, 3,144 had employment of 999 or fewer, and 44 firms had had
employment of 1,000 employees or more. Thus under this category and the
associated small business size standard, the majority of these firms
can be considered small. See http://factfinder.census.gov/servlet/IBQTable?_bm=y&-fds_name=EC0700A1&-geo_id=&-_skip=600&-ds_name=EC0751SSSZ5&-_lang=en. Consequently, the Commission estimates
that most providers of competitive local exchange service, competitive
access providers, ``Shared-Tenant Service Providers,'' and ``Other
Local Service Providers'' are small entities.
69. Television Broadcasting. The SBA defines a television
broadcasting station as a small business if such station has no more
than $14.0 million in annual receipts. See 13 CFR 121.201, NAICS Code
515120 (2007). Business concerns included in this industry are those
``primarily engaged in broadcasting images together with sound.'' Id.
The Commission has estimated the number of licensed commercial
television stations to be 1,392. See News Release, ``Broadcast Station
Totals as of December 31, 2009,'' 2010 WL 676084 (F.C.C.) (dated Feb.
26, 2010) (Broadcast
[[Page 17087]]
Station Totals); also available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296538A1.pdf. According to Commission staff
review of the BIA/Kelsey, MAPro Television Database (BIA) as of April
7, 2010, about 1,015 of an estimated 1,380 commercial television
stations (or about 74 percent) have revenues of $14 million or less
and, thus, qualify as small entities under the SBA definition. The
Commission has estimated the number of licensed noncommercial
educational (NCE) television stations to be 390. See Broadcast Station
Totals, supra. We note, however, that, in assessing whether a business
concern qualifies as small under the above definition, business
(control) affiliations must be included. Our estimate, therefore,
likely overstates the number of small entities that might be affected
by our action, because the revenue figure on which it is based does not
include or aggregate revenues from affiliated companies. The Commission
does not compile and otherwise does not have access to information on
the revenue of NCE stations that would permit it to determine how many
such stations would qualify as small entities.
70. In addition, an element of the definition of ``small business''
is that the entity not be dominant in its field of operation. We are
unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its
field of operation. Accordingly, the estimate of small businesses to
which rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. Also, as noted, an additional element of the
definition of ``small business'' is that the entity must be
independently owned and operated. We note that it is difficult at times
to assess these criteria in the context of media entities and our
estimates of small businesses to which they apply may be over-inclusive
to this extent.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
71. Certain proposed rule changes discussed in the NPRM would
affect reporting, recordkeeping or other compliance requirements.
Specifically, a potential rule change would (1) revise the Commission's
notice rules to specify that, if a renewal or extension agreement has
not been executed 30 days in advance of a retransmission consent
agreement's expiration, notice of potential deletion of a broadcaster's
signal must be given to consumers regardless of whether the signal is
ultimately deleted; and (2) extend the coverage of this notice rule to
non-cable MVPDs and broadcasters.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
72. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities. 5 U.S.C. 603(c)(1) through (c)(4).
73. As discussed in the NPRM, our goal in this proceeding is to
take appropriate action, within our existing authority, to protect
consumers from the disruptive impact of the loss of broadcast
programming carried on MVPD video services. The specific changes on
which we seek comment are intended to allow the market-based
negotiations contemplated by the statute to proceed more smoothly,
provide greater certainty to the negotiating parties, and help protect
consumers. The improved successful completion of retransmission consent
negotiations would benefit both broadcasters and MVPDs, including those
that are smaller entities, as well as MVPD subscribers. Thus, the
proposed rules would benefit smaller entities as well as larger
entities. For this reason, an analysis of alternatives to the proposed
rules is unnecessary. Further, we note that in its discussion of
whether there are any additional actions or practices that should be
deemed to constitute per se violations of a negotiating entity's duty
to negotiate retransmission consent agreements in good faith, the
Commission specifically references a proposal to permit small and mid-
size MVPDs to ``pool their resources, appoint an agent, and negotiate
as a group.'' Such a proposal would provide particular benefit to small
entities. The NPRM further considers the impact of retransmission
consent on small entities by asking whether small and new entrant MVPDs
are typically forced to accept retransmission consent terms that are
less favorable than larger or more established MVPDs, and if so,
whether this is fair.
74. We invite comment on whether there are any alternatives we
should consider to our proposed modifications to rules that apply to or
affect retransmission consent negotiations that would minimize any
adverse impact on small businesses, but which maintain the benefits of
our proposals.
Federal Rules That May Duplicate, Overlap, or Conflict With the
Proposed Rule
75. None.
B. Ex Parte Rules
76. Permit-But-Disclose. This proceeding will be treated as a
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under Sec. 1.1206(b) of the Commission's
rules. See 47 CFR 1.1206(b); see also id. Sec. Sec. 1.1202 and 1.1203
of the Commission's rules. 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 id.
Sec. 1.1206(b)(2) of the Commission's rules. Additional rules
pertaining to oral and written presentations are set forth in Sec.
1.1206(b) of the Commission's rules.
C. Filing Requirements
77. Comments and Replies. Pursuant to Sec. Sec. 1.415 and 1.419 of
the Commission's rules, 47 CFR 1.415 and 1.419, interested parties may
file comments and reply comments on or before the dates indicated in
the DATES section of this document. To the extent any filings in
response to this NPRM relate to issues pending in MB Docket No. 07-198,
where the Commission sought comment on the issue of tying of an MVPD's
rights to carry broadcast stations with carriage of other owned or
affiliated broadcast stations in the same or a distant market or one or
more affiliated non-broadcast networks, they must also be filed in MB
Docket No. 07-198. Comments may be filed using: (1) The Commission's
Electronic Comment Filing System (ECFS), (2) the Federal Government's
eRulemaking Portal, or (3) by filing paper copies. See Electronic
Filing of Documents in Rulemaking Proceedings, 63 FR 24121, May 1,
1998.
[[Page 17088]]
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://www.fcc.gov/cgb/ecfs/
or the Federal eRulemaking Portal: http://www.regulations.gov.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
[cir] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St., SW., Room TW-A325, Washington, DC 20554. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes
must be disposed of before entering the building. The filing hours are
8 a.m. to 7 p.m.
[cir] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[cir] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street, SW., Washington, DC 20554.
78. Availability of Documents. Comments, reply comments, and ex
parte submissions will be available for public inspection 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. Documents
will be available electronically in ASCII, Microsoft Word, and/or Adobe
Acrobat.
79. Accessibility Information. To request information in accessible
formats (computer diskettes, large print, audio recording, and
Braille), send an e-mail to [email protected] or call the FCC's Consumer
and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-
0432 (TTY). This document can also be downloaded in Word and Portable
Document Format (PDF) at: http://www.fcc.gov.
80. Additional Information. For additional information on this
proceeding, contact Diana Sokolow, [email protected], of the Media
Bureau, Policy Division, (202) 418-2120.
VI. Ordering Clauses
81. Accordingly, it is ordered that pursuant to the authority
contained in sections 4(i), 4(j), 301, 303(r), 303(v), 307, 309, 325,
335, and 614 of the Communications Act of 1934, as amended, 47 U.S.C.
154(i), 154(j), 301, 303(r), 303(v), 307, 309, 325, 335, and 534, this
Notice of Proposed Rulemaking is adopted.
82. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, 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.
List of Subjects in 47 CFR Part 76
Administrative practice and procedure, Cable television, Equal
employment opportunity, Political candidates, and Reporting and
recordkeeping requirements.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Proposed Rules
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, 302a, 303,
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521,
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549,
552, 554, 556, 558, 560, 561, 571, 572, 573.
2. Amend Sec. 76.65 by revising paragraph (b)(1)(iv) and by adding
paragraphs (b)(1)(viii) through (x) to read as follows:
Sec. 76.65 Good faith and exclusive retransmission consent
complaints.
* * * * *
(b) * * *
(1) * * *
(iv) Refusal by a Negotiating Entity to put forth more than a
single, unilateral proposal, or to provide a bona fide proposal on an
important issue;
* * * * *
(viii) Agreement by a broadcast television station Negotiating
Entity to provide a network with which it is affiliated the right to
approve the station's retransmission consent agreement with an MVPD;
(ix) Agreement by a broadcast television station Negotiating Entity
to grant another station or station group the right to negotiate or the
power to approve its retransmission consent agreement when the stations
are not commonly owned; and
(x) Refusal by a Negotiating Entity to agree to non-binding
mediation when the parties reach an impasse within 30 days of the
expiration of their retransmission consent agreement.
* * * * *
3. Revise Sec. 76.1601 to read as follows:
Sec. 76.1601 Deletion or repositioning of broadcast signals.
(a) Effective April 2, 1993, a cable operator shall provide written
notice to any broadcast television station at least 30 days prior to
either deleting from carriage or repositioning that station. Such
notification shall also be provided to subscribers of the cable system.
Note 1 to Sec. 76.1601(a): No deletion or repositioning of a
local commercial television station shall occur during a period in
which major television ratings services measure the size of
audiences of local television stations. For this purpose, such
periods are the four national four-week ratings periods--generally
including February, May, July and November--commonly known as
audience sweeps.
(b) Broadcast television stations and multichannel video
programming distributors shall notify affected subscribers of the
potential deletion of a broadcaster's signal a minimum of 30 days in
advance of a retransmission consent agreement's expiration, unless a
renewal or extension agreement has been executed.
[FR Doc. 2011-7250 Filed 3-25-11; 8:45 am]
BILLING CODE 6712-01-P