[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3457 Introduced in Senate (IS)]


109th CONGRESS
  2d Session
                                S. 3457

 To provide a national franchise and other regulatory relief to video 
     service providers who offer a-la-carte programming for cable 
                  television, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              June 7, 2006

  Mr. McCain introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
 To provide a national franchise and other regulatory relief to video 
     service providers who offer a-la-carte programming for cable 
                  television, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumers Having Options in Cable 
Entertainment Act'' or the ``CHOICE Act''.

SEC. 2. DEFINITIONS.

    (a) In General.--In this Act:
            (1) A-la-carte.--The term ``a-la-carte'' means offering a 
        channel on an individual per-channel basis rather than solely 
        as part of a package or tier of programming.
            (2) Digital video service.--The term ``digital video 
        service'' means--
                    (A) the two-way transmission of video service using 
                digital video compression; and
                    (B) subscriber interaction, if any, required for 
                the selection or use of such service.
            (3) Eligible video service provider.--The term ``eligible 
        video service provider'' means a video service provider that--
                    (A)(i) has an attributable interest in a cable 
                channel (as defined in section 602(4) of the 
                Communications Act of 1934 (47 U.S.C. 522(24))) that is 
                currently offered on the expanded basic tier (within 
                the meaning of section 623(b)(7) of that Act (47 U.S.C. 
                543(b)(7)));
                    (ii) offers that cable channel on an a-la-carte 
                basis to its subscribers of digital video service in 
                addition to any other channel bundles it offers as of 
                the date of enactment of this Act;
                    (iii) does not prohibit any other multichannel 
                video programming distributor (as defined in section 
                602(13) of the Communications Act of 1934 (47 U.S.C. 
                522(24))) from offering that channel on an a-la-carte 
                basis to its subscribers; and
                    (iv) files with the Commission a declaration of 
                intention to offer to its digital video service 
                subscribers on an a-la-carte basis any cable channels 
                it carries that are offered to it on an a-la-carte 
                basis; or
                    (B) does not have an attributable interest in a 
                cable channels but files with the Commission a 
                declaration of intention to offer to its digital video 
                service subscribers on an a-la-carte basis any cable 
                channels it carries that are offered to it on an a-la-
                carte basis.
            (4) Video service.--The term ``video service'' means--
                    (A) video programming;
                    (B) interactive on demand services; and
                    (C) other programming services.
            (5) Video service provider.--The term ``video service 
        provider''--
                    (A) means a provider of video service that utilizes 
                a public right-of-way in the provision of such service; 
                and
                    (B) does not include--
                            (i) a provider of direct broadcast 
                        satellite service;
                            (ii) any person providing video programming 
                        to end users using radio communication;
                            (iii) any other provider of video service 
                        that does not use a public right-of-way in the 
                        provision of its service; or
                            (iv) any person providing video service by 
                        means of a commercial mobile service, unless 
                        such person has substantially replaced an 
                        eligible video service provider described in 
                        subparagraph (A) by occupying a position in the 
                        video service market comparable to that 
                        occupied by such provider.
    (b) Common Terminology.--Except as otherwise provided in subsection 
(a), terms used in this Act shall have the same meaning given to such 
terms under sections 3, 332(d), and 602 of the Communications Act of 
1934 (47 U.S.C. 153, 332(d), and 522).

SEC. 3. REGULATORY RELIEF FOR ELIGIBLE VIDEO SERVICE PROVIDERS.

    (a) Eligible Video Service Providers.--
            (1) Regulatory relief.--An eligible video service provider 
        may not be required--
                    (A) to obtain a State or local video franchise;
                    (B) to build out its video distribution system in 
                any particular manner; or
                    (C) to provide leased or common carrier access to 
                its video distribution facilities and equipment to any 
                other video service provider.
            (2) Build-out encouraged; discrimination not permitted.--It 
        is the policy of the United States that an eligible video 
        service provider--
                    (A) should build out to provide service to the 
                greatest number of communities practicable; and
                    (B) should comply fully with the requirements of 
                sections 202 and 621(a)(3) of the Communications Act of 
                1934 (47 U.S.C. 202 and 541(a)(3)) prohibiting the 
                denial of access to service of any group of residential 
                subscribers because of the income of residents of the 
                area in which the group resides.
    (b) Local Government Authority to Regulate.--
            (1) Fee for managing local government's public rights-of-
        way.--
                    (A) Compensating local governments.--
                            (i) In general.--A local government may 
                        require an eligible video service provider to 
                        pay a reasonable fee on an annual basis to the 
                        units of local government in which the video 
                        service provider provides video service for the 
                        purpose of compensating such local government 
                        for the costs that it incurs in managing the 
                        public rights-of-way used by such provider.
                            (ii) Amount of fee.--The fee imposed under 
                        clause (i) shall not exceed 3.7 percent of 
                        gross video revenues. Notwithstanding the 
                        preceding sentence, a local government may 
                        petition the Commission for, and the Commission 
                        may grant, a fee that exceeds 3.7 percent of 
                        gross video revenues to the extent that the 
                        local government demonstrates that the higher 
                        fee is necessary to cover its costs of managing 
                        the public rights-of-way used by the provider.
                            (iii) In-kind contributions provided to 
                        state and local governments.--A local 
                        government may not solicit in-kind 
                        contributions from an eligible video service 
                        provider unless the value of the in-kind 
                        contribution is credited to the provider as 
                        part of that fee described in clause (i).
                            (iv) Institutional networks provided to 
                        state and local governments.--A local 
                        government may not solicit the provision of 
                        institutional network services (as defined by 
                        the Federal Communications Commission) from an 
                        eligible video service provider on a free or 
                        reduced fee basis unless the value of the 
                        services provided for free, or the amount of 
                        the reduction in the fee, is credited to the 
                        provider as part of the fee described in clause 
                        (i).
                    (B) Definition.--For purposes of this paragraph, 
                the term ``gross video revenues''--
                            (i) means all consideration of any kind or 
                        nature received by an eligible video service 
                        provider from its subscribers for the provision 
                        of video service within a municipality, 
                        including--
                                    (I) cash;
                                    (II) credits;
                                    (III) property;
                                    (IV) institutional networks; and
                                    (IV) in-kind contributions 
                                (services or goods); but
                            (ii) does not include--
                                    (I) revenue not actually received, 
                                even if billed, including bad debt;
                                    (II) revenue received by any 
                                affiliate or any other person in 
                                exchange for supplying goods or 
                                services used by an eligible video 
                                service provider to provide video 
                                service;
                                    (III) refunds, rebates, or 
                                discounts provided to--
                                            (aa) subscribers;
                                            (bb) leased access 
                                        providers;
                                            (cc) advertisers; or
                                            (dd) the municipality;
                                    (IV) revenue from services not 
                                classified as video service, 
                                including--
                                            (aa) revenue received from 
                                        telecommunications services;
                                            (bb) revenue received from 
                                        information services, including 
                                        Internet access;
                                            (cc) revenue received in 
                                        connection with advertising;
                                            (dd) revenue received in 
                                        connection with home shopping 
                                        services; or
                                            (ee) any other revenue 
                                        attributed by an eligible video 
                                        service provider to non-video 
                                        service in accordance with any 
                                        applicable rules, regulations, 
                                        standards, or orders;
                                    (V) revenue paid by subscribers to 
                                home shopping programmers directly from 
                                the sale of merchandise through any 
                                home shopping channel offered as part 
                                of the video service;
                                    (VI) any tax of general 
                                applicability--
                                            (aa) imposed upon an 
                                        eligible video service provider 
                                        or upon subscribers by a 
                                        Federal, State, city, or any 
                                        other governmental entity; and
                                            (bb) required to be 
                                        collected by a eligible video 
                                        service provider and remitted 
                                        to the taxing entity, 
                                        including--

                                                    (AA) sales or use 
                                                taxes;

                                                    (BB) gross receipts 
                                                taxes;

                                                    (CC) excise taxes;

                                                    (DD) utility users 
                                                taxes;

                                                    (EE) public service 
                                                taxes;

                                                    (FF) communication 
                                                taxes; and

                                                    (GG) the fee 
                                                described in subclause 
                                                (VI);

                                    (VII) the provision of video 
                                service to public institutions, public 
                                schools, or governmental entities at no 
                                charge;
                                    (VIII) any foregone revenue from 
                                the provision of free or reduced-cost 
                                video service by an eligible video 
                                service provider to any person, 
                                including--
                                            (aa) the municipality;
                                            (bb) other public 
                                        institutions; and
                                            (cc) other institutions;
                                    (IX) sales of capital assets or 
                                sales of surplus equipment;
                                    (X) reimbursement by programmers of 
                                marketing costs incurred by an eligible 
                                video service provider for the 
                                introduction or promotion of 
                                programming;
                                    (XI) directory or Internet 
                                advertising revenue, including revenue 
                                from--
                                            (aa) yellow page sales;
                                            (bb) white page sales;
                                            (cc) banner advertisement; 
                                        and
                                            (dd) electronic publishing; 
                                        and
                                    (XII) copyright fees paid to the 
                                United States Copyright Office.
            (2) Rights-of-way disputes to be resolved by the commission 
        or federal courts.--Any dispute regarding the application or 
        amount of fees charged under paragraph (1) shall, upon request 
        of a local unit of government or affected video service 
        provider, be resolved--
                    (A) by the Commission; or
                    (B) by filing a claim in the district court of the 
                United States that meets applicable requirements 
                relating to venue under section 1931 of title 28, 
                United States Code.
            (3) Fee appearance on subscriber's bill.--A video service 
        provider may designate that portion of a subscriber's bill 
        attributable to the fee imposed under paragraph (1) as a 
        separate item on the subscriber's bill.
    (c) Applicability of Communications Act of 1934.--
            (1) In general.--Except as provided in this subsection, the 
        Communications Act of 1934 (47 U.S.C. 151 et seq.) shall not 
        apply to the provision of video service by an eligible video 
        service provider.
            (2) Retransmission consent obligations.--An eligible video 
        service provider shall be subject to the retransmission consent 
        obligations of section 325(b) of the Communications Act of 1934 
        (47 U.S.C. 325(b)).
            (3) Title vi provisions.--An eligible video service 
        provider shall--
                    (A) not be subject to any provision of title VI of 
                the Communications Act of 1934 (47 U.S.C. 521 et seq.), 
                except as otherwise provided in this paragraph;
                    (B) except as provided in paragraph (4), carry and 
                determine the appropriate channel positioning and 
                grouping, for the area in which it is providing video 
                service, of up to 3 public, educational, or 
                governmental use channels as required under section 611 
                of that Act (47 U.S.C. 531);
                    (C) carry the signals of local commercial 
                television stations as required under section 614 of 
                that Act (47 U.S.C. 534);
                    (D) carry the signals of local noncommercial 
                educational television stations as required under 
                section 615 of that Act (47 U.S.C. 535);
                    (E) be subject to the regulation of carriage 
                agreements under section 616 of that Act (47 U.S.C. 
                536);
                    (F) be subject to the antidiscrimination provisions 
                of section 621(a)(3) of that Act (47 U.S.C. 541(a)(3));
                    (G) be subject to the requirements regarding 
                obscene or indecent programming under section 624(d)(2) 
                of that Act (47 U.S.C. 544(d)(2));
                    (H) be entitled to the benefits and protections 
                under section 624(f)(1) of that Act (47 U.S.C. 
                544(f)(1)) regarding the content of video service;
                    (I) be subject to the emergency information 
                requirements under section 624(g) of that Act (47 
                U.S.C. 544(g));
                    (J) be subject to the consumer electronics 
                equipment capability requirements under section 624A of 
                that Act (47 U.S.C. 545);
                    (K) be entitled to the benefits and protections 
                under section 628 of that Act (47 U.S.C. 548);
                    (L) be subject to the requirements under section 
                629 of that Act (47 U.S.C. 549);
                    (M) protect the personally identifiable information 
                of its subscribers in the same manner as is required of 
                cable operators with respect to subscribers to cable 
                services under section 631 of that Act (47 U.S.C. 551);
                    (N) be entitled to the benefits and protections 
                under section 633 of that Act (47 U.S.C. 553);
                    (O) be subject to the equal employment provisions 
                as required under subsections (a) through (h) of 
                section 634 of that Act (47 U.S.C. 554);
                    (P) be subject to criminal or civil liability under 
                section 638 of that Act (47 U.S.C. 558);
                    (Q) be subject to the penalties prescribed for the 
                transmission of obscene programming under section 639 
                of that Act (47 U.S.C. 559); and
                    (R) be required to comply with the scrambling 
                requirements under section 640 of that Act (47 U.S.C. 
                560).
            (4) Utilization and other requirements for public, 
        educational, or governmental channels.--
                    (A) Withdrawal for insufficient use.--
                Notwithstanding paragraph (1)(C), an eligible video 
                service provider--
                            (i) is not required to carry a public, 
                        educational, or governmental channel that has 
                        less than 8 hours programming per day; and
                            (ii) may terminate carriage of any such 
                        channel and reprogram it not less than 30 days 
                        after notifying the franchising authority of 
                        its intended action.
                    (B) Reinstatement.--An eligible video service 
                provider shall restore carriage of a public, 
                educational, or governmental channel the carriage of 
                which was terminated under subparagraph (A) when the 
                entity responsible for the channel certifies that it is 
                ready, willing, and able to provide at least 8 hours of 
                daily programming for the channel.
                    (C) Nonrepeat programming requirement.--At least 4 
                hours of the programming required to meet the 8 hours 
                of daily programming for a public, educational, or 
                governmental channel shall be nonrepeat programming.
                    (D) Operational responsibility.--The operation of a 
                public, educational, or governmental channel shall be 
                the responsibility of the entity operating the channel 
                and not the responsibility of the eligible video 
                service provider. The responsibility of the eligible 
                video service provider is limited to carriage of the 
                channel.
            (5) Determinations of local signals.--For purposes of 
        complying with subparagraphs (C) and (D) of paragraph (1), an 
        eligible video service provider shall treat as local stations, 
        with respect to a customer located within the jurisdiction of 
        any franchising authority, the same stations that are treated 
        as local television stations for a cable system located within 
        such jurisdiction as of the date of enactment of this Act.
            (6) Implementation.--
                    (A) Regulations required.--Not later than 90 days 
                after the date of enactment of this Act, the Commission 
                shall prescribe regulations to implement the 
                requirements of paragraph (1) that are no greater or 
                lesser than the obligations required by the 
                specifically referenced provisions of the 
                Communications Act of 1934 (47 U.S.C. 151 et seq.).
                    (B) Effective date of regulations.--The regulations 
                required under subparagraph (A) shall take effect 6 
                months after the date of enactment of this Act.
            (7) Preemption of inconsistent franchise terms and State 
        and local laws for eligible video service providers.--
                    (A) In general.--Any provision in any franchise 
                granted by a franchising authority to an eligible video 
                service provider, and any provision of State or local 
                laws, regulations, or rules, that is inconsistent with 
                the provisions of this Act is preempted and superseded.
                    (B) Treatment as an eligible video service 
                provider.--Subparagraph (A) does not apply to a 
                franchise agreement--
                            (i) that is in effect on the date of 
                        enactment of this Act; and
                            (ii) pursuant to which a cable operator 
                        that is not an eligible video service provider 
                        is operating.
            (8) Cable channels for public, educational, and 
        governmental use.--The governmental entity that was the 
        franchising authority for a State or a political subdivision of 
        a State on the date of enactment of this Act, and any successor 
        entity, shall for that State or political subdivision determine 
        which public, educational, or governmental entities shall be 
        authorized to designate the channels required under paragraph 
        (1)(C).
            (9) Consumer protection and customer service.--
                    (A) Regulations required.--Not later than 90 days 
                after the date of enactment of this Act, the Commission 
                shall promulgate regulations with respect to customer 
                service and consumer protection requirements of the 
                eligible video service provider.
                    (B) Effective date of regulations.--The regulations 
                required under subparagraph (A) shall take effect 6 
                months after the date of enactment of this Act.
                    (C) Preemption.--The regulations promulgated under 
                subparagraph (A) preempt any statute, regulation, or 
                rule of any State or political subdivision thereof 
                under which liability would be imposed on an eligible 
                video service provider for failure to comply with any 
                statute, regulation, or rule in pari materia with those 
                regulations, other than State laws that are not 
                specific to customer service and consumer protection 
                requirements of the video service provider.
            (10) State and local government authority.--
                    (A) In general.--Notwithstanding any other 
                provision of this Act, a State or local government 
                shall have the authority to enforce the requirements of 
                paragraph (9)(A).
                    (B) Local point of contact.--Each State or local 
                government shall designate a local point of contact, 
                which residents of such geographic area may contact to 
                alert such State or local government of any potential 
                violations of the requirements and obligations 
                established under paragraph (9)(A).
                    (C) Limitation on class actions.--No class action 
                alleging a violation of the obligations set forth in 
                the regulations promulgated by the Commission under 
                paragraph (9)(A) shall be maintained under this 
                subsection by an individual or any private party in 
                Federal or State court.
                    (D) Parens patriae authority.--In any case in which 
                a State or local government has reason to believe that 
                an act or practice violates the obligations set forth 
                in the regulations promulgated by the Commission under 
                paragraph (9)(A), the State or local government may 
                bring a civil action on behalf of the residents within 
                its jurisdiction in a district court of the United 
                States of appropriate jurisdiction, or any other court 
                of competent jurisdiction, to--
                            (i) enjoin the act or practice;
                            (ii) obtain--
                                    (I) damages in the sum of actual 
                                damages, restitution, or other 
                                compensation on behalf of affected 
                                residents of the State or locality; and
                                    (II) punitive damages, if the 
                                violation is willful or intentional; or
                            (iii) obtain such other legal and equitable 
                        relief as the court may consider to be 
                        appropriate.
                    (E) Limitation.--In enforcing the requirements of 
                paragraph (6), a State or local government may not 
                impose additional obligations beyond those established 
                by the Commission in paragraph (9)(A).
    (d) Commission to Act if State Commission Will Not Act.--If a State 
or local government fails to carry out its enforcement responsibilities 
under subsection (c)(7), the Commission shall--
            (1) issue an order preempting the jurisdiction of the State 
        commission; and
            (2) assume exclusive enforcement authority.
    (e) Ability to Manage Public Rights-of-Way.--
            (1) In general.--Except as provided in this section, 
        nothing in this Act shall affect the authority of a State or 
        local government to manage the public right-of-way in a manner 
        that is--
                    (A) non-discriminatory;
                    (B) competitively neutral;
                    (C) consistent with applicable State law; and
                    (D) not inconsistent with this Act.
            (2) Construction permits.--
                    (A) In general.--In managing the public rights-of-
                way a State or local government may require the 
                issuance of a construction permit, without cost, to an 
                eligible video service provider that is locating 
                facilities in such public right-of-way.
                    (B) Response work or repair.--If there is an 
                emergency necessitating response work or repair in the 
                public right-of-way, an eligible video service provider 
                may begin such work or repair upon obtaining any 
                required permit or authorization without prior approval 
                from a State or local government, if such provider 
                notifies the State or local government as promptly as 
                possible after beginning such work or repair.
            (3) Timely action required.--In managing the public rights-
        of-way a State or local government that is required to issue 
        permits or licenses for such use shall be required to act upon 
        any such request for use in a timely manner.
            (4) New roads.--Nothing in this section shall effect the 
        ability of a State or local government to impose reasonable 
        limits on access to public rights-of-way associated with newly 
        constructed roads.
    (f) Conforming Amendments to the Communications Act of 1934.--
            (1) Pole attachments.--Section 224 of the Communications 
        Act of 1934 (47 U.S.C. 224) is amended--
                    (A) in subsection (a)(1), by striking ``local 
                exchange carrier'' and inserting ``telecommunications 
                carrier'';
                    (B) by striking subsections (a)(5) and (d)(3);
                    (C) in subsection (d)(3), in the first sentence by 
                striking all after ``cable television system'' through 
                the period at the end and inserting ``and facilities of 
                other video service providers, regardless of the nature 
                of the services provided.''; and
                    (D) by adding at the end the following:
    ``(j) Wireless Service Facility Exemption.--Nothing in this section 
applies to a wireless service facility, including to towers of a 
provider of mobile services.''.
            (2) Carriage of local commercial television signals.--
        Section 614(b)(4) of the Communications Act of 1934 (47 U.S.C. 
        534(b)(4)) is amended to read as follows:
            ``(4) Signal quality.--
                    ``(A) Non-degradation.--The signals of local 
                commercial television stations that a cable operator 
                carries shall be carried without material degradation.
                    ``(B) Carriage standards.--The Commission shall 
                adopt carriage standards to ensure that, to the extent 
                technically feasible, the quality of signal processing 
                and carriage provided by a cable system for the 
                carriage of local commercial television stations will 
                be no less than that provided by the system for 
                carriage of any other type of broadcast local 
                commercial television signal when using the same 
                transmission technology.''.
            (3) Carriage of noncommercial educational television.--
        Section 615(g)(2) of the Communications Act of 1934 (47 U.S.C. 
        535(g)(2)) is amended to read as follows--
            ``(2) Bandwith and technical quality.--A cable operator 
        shall--
                    ``(A) provide each qualified local non-commercial 
                television station whose signal is carried in 
                accordance with this section with bandwith and 
                technical capacity equivalent to that provided to 
                commercial television stations carried on the cable 
                system when using the same transmission technology; and
                    ``(B) carry the signal of each qualified local non-
                commercial educated television station without material 
                degradation.''.
            (4) Regulations required.--Not later than 90 days after the 
        date of enactment of this Act, the Commission shall prescribe 
        such regulations as may be necessary to implement the 
        amendments made by this section.
    (g) Rulemaking on Section 629.--Not later than January 1, 2008, the 
Commission shall conduct a proceeding to determine the appropriateness 
of the requirements under subsection (c)(1)(L) taking into account 
changes and advancements in technology.

SEC. 4. BENEFIT OF NETWORK NON-DUPLICATION RULES TO BROADCASTERS.

    (a) In General.--Notwithstanding any other provision of law, or any 
regulation promulgated by the Federal Communications Commission, if a 
local commercial television station is under common control with a 
cable channel the station may not have the benefit of the Commission's 
network program non-duplication rules in subpart F of part 76.92 of 
title 47, Code of Federal Regulations, unless the cable channel is made 
available to multichannel video programming distributors on an a-la-
carte basis in addition to any other channel bundles it offers to 
subscribers.
    (b) Definitions.--In this section:
            (1) Common control.--A local commercial television station 
        is considered to be under common control with a cable channel 
        if--
                    (A) it is owned by a person that has an 
                attributable interest in a cable channel; or
                    (B) is owned or controlled by a coorporation or 
                other legal entity the chairman or controlling 
                shareholder of which--
                            (i) has an attributable interest in a cable 
                        channel; or
                            (ii) owns or controls a cable channel.
            (2) Local commercial television station.--The term ``local 
        commercial television station'' has the meaning given that term 
        in section 614(h)(1) of the Communications Act of 1934 (47 
        U.S.C. 534(h)(1))).

SEC. 5. ALTERNATIVE DISTRIBUTION OUTLETS.

    Section 616(a)(2) of the Communications Act of 1934 (47 U.S.C. 
536(a)) is amended by striking ``distributors'' and inserting 
``distributors, or against other video programming distributors using 
any medium or platform for such programming distribution (including the 
Internet),''.

SEC. 6. FEDERAL COMMUNICATIONS COMMISSION TO ADMINISTER.

    The Federal Communications Commission may prescribe such rules and 
regulations as may be necessary in the public interest to carry out 
this Act.

SEC. 7. SEVERABILITY.

    If any provision of this Act, an amendment made by this Act, or the 
application of such provision or amendment to any person or 
circumstance is held to be unconstitutional, the remainder of this Act, 
the amendments made by this Act, and the application of such provisions 
to any person or circumstance shall not be affected thereby.
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