[Federal Register Volume 59, Number 164 (Thursday, August 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20915]


[[Page Unknown]]

[Federal Register: August 25, 1994]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MM Docket No. 92-265; FCC 94-203]

 

Cable TV Act of 1992--Development of Competition and Diversity in 
Video Programming; Distribution and Carriage

agency: Federal Communications Commission.

action: Final rule; petition for reconsideration.

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summary: By this Memorandum Opinion and Order (``MO&O'') the Commission 
amends one of its rules implementing the Cable Television Consumer 
Protection and Competition Act of 1992 (``1992 Cable Act''). The MO&O 
amends the Commission's rule on adjudicatory carriage agreement 
complaints to specifically afford standing to any multichannel video 
programming distributor (``MVPD'') aggrieved by a violation of Section 
616 of the 1992 Cable Act. The intent of this action is to prevent 
anticompetitive behavior by cable operators and multichannel video 
programming distributors.

effective date: September 26, 1994.

for further information contact: Nancy Markowitz or Diane Hofbauer, 
Cable Services Bureau, (202) 416-0800.

supplementary information: This is a synopsis of the Commission's MO&O, 
adopted August 2, 1994, and released August 5, 1994. The full text of 
the MO&O is available for inspection and copying during regular 
business hours in the FCC Reference Center (Room 239), 1919 M Street, 
NW., Washington, DC. The complete text of this decision also may be 
purchased from the Commission's duplication contractor, International 
Transcription Service, Inc., (202) 857-3800, 2100 M Street NW., Suite 
140, Washington, DC 20037.

Synopsis of Memorandum Opinion and Order

    1. In furtherance of the Commission's implementation of the 
carriage agreement provisions of the Cable Television Consumer 
Protection and Competition Act of 1992 (``1992 Cable Act''), the 
Commission adopted a Memorandum Opinion and Order reconsidering one of 
its regulations adopted in Implementation of Sections 12 and 19 of the 
Cable Television Consumer Protection and Competition Act of 1992--
Development of Competition and Diversity in Video Programming 
Distribution and Carriage, MM Docket No. 92-265 (Oct. 22, 1993), 58 FR 
60390 (Nov. 16, 1993), 9 FCC Rcd 2624 (1993); 47 CFR 76.1302. The 
action disposes of a petition for reconsideration filed by the Wireless 
Cable Association (``WCA'') requesting that the Commission amend its 
rules, to afford standing specifically to any multichannel video 
programming distributor (``MVPD'') aggrieved by an alleged violation of 
Section 616 of the 1992 Cable Act to file a complaint pursuant to 47 
CFR 76.1302(a). WCA's petition was supported by Liberty Cable Company 
and GTE Service Corporation and was opposed by Tele-Communications, 
Inc. and Liberty Media Corporation.
    2. Section 616 of the 1992 Cable Act, 47 U.S.C. 536, governs 
agreements between cable operators--or other MVPDs--and the programming 
services they distribute, and directs the Commission to establish 
regulations that prevent cable operators or other MVPDs from entering 
into carriage agreements that condition carriage of a vendor's 
programming on particular concessions.
    3. Section 616(a) (1), (2) and (3), 47 U.S.C. 536(a) (1), (2), (3) 
specifically directed the Commission to establish regulations 
prohibiting MVPDs from: (1) Requiring a financial interest in the 
programming services as a condition of carriage; (2) coercing a 
programming vendor to provide exclusive rights as a condition of 
carriage, or retaliating against such vendor for failure to grant 
exclusivity; and (3) discriminating in carriage terms between 
affiliated and nonaffiliated programming vendors.
    4. WCA claimed that Sec. 76.1302 of the Commission's rules is too 
narrowly drafted and could be interpreted to limit standing solely to 
programming vendors aggrieved by violations of the carriage agreement 
provisions, thus precluding a complaint from an MVPD aggrieved by the 
same anticompetitive behavior. WCA contended that if the rule was so 
interpreted, the purpose of Section 616 would be frustrated because a 
multiple system operator with sufficient market power over a 
programming vendor to coerce exclusivity would be able to employ the 
same market power to secure the programming vendor's silence. Opponents 
of the petition for reconsideration contended, inter alia, that Section 
616 was intended solely to benefit unaffiliated programming vendors and 
that Section 628 of the 1992 Cable Act (47 U.S.C. 548), and the 
Commission's program access rules, provide the appropriate avenue of 
redress for MVPDs.
    4. The 1992 Cable Act and its legislative history\1\ indicate that 
Congress found that the cable television industry is highly 
concentrated with a high degree of vertical integration of cable 
systems and programmers.\2\ When drafting the 1992 Cable Act, Congress 
was concerned that increased horizontal concentration and vertical 
integration in the cable industry had created an imbalance of power 
between cable operators and program vendors. Congress concluded that 
vertically integrated cable operators have the incentive and ability to 
favor affiliated programming vendors over unaffiliated programming 
vendors with respect to granting carriage on their system.\3\ Congress 
also found that, in return for carriage on the cable system, some cable 
operators have required certain non-affiliated programming vendors to 
grant them certain concessions.\4\
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    \1\House Committee on Energy and Commerce, H.R. Rep. No. 102-
628, 102d Cong., 2d Sess. (1992) (``House Report''); Senate 
Committee on Commerce, Science, and Transportation, S. Rep. No. 102-
92, 102d Cong., 1st. Sess. (1991) (``Senate Report''); House 
Committee on Energy and Commerce, H.R. Rep. No. 102-862, 102d Cong., 
2d Sess. (1992), reprinted in Cong. Rec. H8308 (Sept. 14, 1992) 
(``Conference Report'').
    \2\Senate Report at 25.
    \3\Senate Report at 24; House Report at 41-45.
    \4\Senate Report at 24; House Report at 42.
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    5. Congress sought to address these concerns by including Sections 
19 and 12 in the 1992 Cable Act, which added Sections 628 and 616, 
respectively, to the Communications Act of 1934, as amended. Section 
628 (47 U.S.C. 548), which contains the program access provisions, 
primarily restricts the activities of vertically integrated programming 
vendors and cable operators with respect to other, unaffiliated MVPDs. 
Section 616 (47 U.S.C. 536), in contrast, contains the carriage 
agreement provisions that were designed to restrict the activities of 
cable operators and other MVPDs when dealing with unaffiliated 
programming vendors.
    6. The underlying premise of both the program access and carriage 
provisions of the 1992 Cable Act was to increase competition to 
franchised cable operators from other MVPDs, reducing the undue market 
power held in noncompetitive markets by cable operators as compared to 
that of consumers and video programming vendors.\5\ The legislative 
history shows that Congress routinely treated Sections 616 and 628 in 
concert, thereby confirming its concern for the impact of 
anticompetitive conduct on programming vendors and on emerging MVPDs' 
access to programming.
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    \5\See, e.g., 1992 Cable Act section 2(a)(2).
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    6. The Commission has determined that it is in the public interest 
to grant WCA's petition and to amend Sec. 76.1302 of the Commission's 
rules to specifically afford standing to aggrieved MVPDs to file 
complaints under Section 616 of the 1992 Cable Act. Based on the 
record, the criteria set forth in the 1992 Cable Act and its 
legislative history, the Commission believes that it serves the public 
interest if all potential violations of Section 616 are brought to the 
Commission's attention. Moreover, the Commission believes that the 
statutory purpose of Section 616 is further served if the Commission is 
made aware of such violations through complaints by both programming 
vendors and MVPDs alike. The mere threat of potential complaints by 
allegedly aggrieved competing distributors is an added check on 
potential anticompetitive behavior by MVPDs with respect to carriage 
agreements. While the Commission believes that this approach is 
entirely consistent with the purpose and intent of the 1992 Cable Act, 
it also is well within the Commission's general authority in Sections 4 
(i) and (j) of the Communications Act to amend the rules in this 
manner.\6\
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    \6\Section 4(i) provides, in part, that the Commission ``may 
perform any and all acts, make such rules and regulations, and issue 
such orders, not inconsistent with this Act, as may be necessary in 
the execution of its functions.'' Section 4(j) provides, in part, 
that the ``Commission may conduct its proceedings in such manner as 
will best conduce to the proper dispatch of business and to the ends 
of justice.'' 47 U.S.C. 154(i), (j).
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    7. The Commission emphasized, however, that all complaints filed 
pursuant to Section 616 must be based on documentary evidence or 
testimony in the form of affidavits, (signed by an authorized 
representative or agent of the complaining party), and may not merely 
reflect conjecture or allegations based only on information and belief.
    8. The Commission stated that it intends to strictly enforce the 
prohibition in Sec. 76.1302(q) of the Commission's rules (47 CFR 
76.1302(a)) against the filing of frivolous complaints. Thus, the 
Commission believes that this rule affords adequate protection against 
any potential frivolous complaints filed as a result of its decision to 
expand the scope of parties with standing to file carriage agreement 
complaints pursuant to Section 616.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
LaVera F. Marshall,
Acting Secretary.

Rule Changes

    Part 76 of Title 47 of the Code of Federal Regulations is amended 
as follows:

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation for Part 76 continues to read as follows:

    Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as 
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 
U.S.C. Secs. 152, 153, 154, 301, 303, 307, 308, 309, 532, 533, 535, 
542, 543, 552 as amended, 106 Stat. 1460.

    2. Section 76.1302 is amended by revising the introductory 
paragraph and paragraphs (a), (r) and (s) to read as follows:


Sec. 76.1302  Adjudicatory Proceedings

    Any video programming vendor or multichannel video programming 
distributor aggrieved by conduct that it alleges to constitute a 
violation of the regulations set forth in this subpart may commence an 
adjudicatory proceeding at the Commission.
    (a) Notice required. Any aggrieved video programming vendor or 
multichannel video programming distributor intending to file a 
complaint under this section must first notify the defendant 
multichannel video programming distributor that it intends to file a 
complaint with the Commission based on actions alleged to violate one 
or more of the provisions contained in Sec. 76.1301. The notice must be 
sufficiently detailed so that its recipient(s) can determine the 
specific nature of the potential complaint. The potential complainant 
must allow a minimum of ten (10) days for the potential defendant(s) to 
respond before filing a complaint with the Commission.
    (r) Statute of limitations. Any complaint filed pursuant to this 
paragraph must be filed within one year of the date on which one of the 
following events occurs:
    (1) The multichannel video programming distributor enters into a 
contract with a video programming vendor that a party alleges to 
violate one or more of the rules contained in this section; or
    (2) The multichannel video programming distributor offers to carry 
the video programming vendor's programming pursuant to terms that a 
party alleges to violate one or more of the rules contained in this 
section; or
    (3) A party has notified a multichannel video programming 
distributor that it intends to file a complaint with the Commission 
based on violations of one or more of the rules contained in this 
section.
    (s) Remedies for violations.
    (1) Remedies authorized. Upon completion of such adjudicatory 
proceeding, the Commission shall order appropriate remedies, including, 
if necessary, mandatory carriage of a video programming vendor's 
programming on defendant's video distribution system, or the 
establishment of prices, terms, and conditions for the carriage of a 
video programming vendor's programming. Such order shall set forth a 
timetable for compliance, and shall become effective upon release, 
unless any order of mandatory carriage would require the defendant 
multichannel video programming distributor to delete existing 
programming from its system to accommodate carriage of a video 
programming vendor's programming. In such instances, if the defendant 
seeks review of the staff or administrative law judge decision, the 
order for carriage of a video programming vendor's programming will not 
become effective unless and until the decision of the staff or 
administrative law judge is upheld by the Commission. If the Commission 
upholds the remedy ordered by the staff or administrative law judge in 
its entirety, the defendant will be required to carry the video 
programming vendor's programming for an additional period of time equal 
to the time elapsed between the staff or administrative law judge 
decision and the Commission's ruling, on the terms and conditions 
approved by the Commission.
    (2) Additional sanctions. The remedies provided in paragraph (s)(1) 
of this section are in addition to and not in lieu of the sanctions 
available under title V or any other provision of the Communications 
Act.

[FR Doc. 94-20915 Filed 8-24-94; 8:45 am]
BILLING CODE 6712-01-M