[Federal Register Volume 60, Number 9 (Friday, January 13, 1995)]
[Rules and Regulations]
[Pages 3099-3102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-894]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MM Docket No. 92-265; FCC 94-326]


Cable Television Act of 1992--Program Distribution and Carriage 
Agreements

AGENCY: Federal Communications Commission.

ACTION: Final rule; Petition for reconsideration; denial.

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SUMMARY: In this Memorandum Opinion and Order (MO&O) the Commission 
denies a petition for reconsideration of its rule that prohibits 
exclusive programming contracts between cable operators and satellite 
cable or satellite broadcast programming vendors in which a cable 
operator has an attributable interest, in areas unserved by cable. The 
rule was promulgated to implement section 19 of the Cable Television 
Consumer Protection and Competition Act of 1992 (1992 Cable Act). The 
Commission held that the rule is a reasonable interpretation of the 
1992 Cable Act and that there are other provisions in the Act under 
which a distributor can challenge a non-cable distributor's exclusive 
contract.

EFFECTIVE DATE: February 13, 1995.

FOR FURTHER INFORMATION CONTACT:
Nancy Markowitz or Maura Cantrill, Cable Services Bureau, (202) 416-
0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commissions 
Memorandum Opinion and Order adopted December 15, 1994 and released 
December 23, 1994. A synopsis of the First Report and Order (First R&O) 
that was reconsidered in the MO&O may be found at 58 FR 27658 (May 11, 
1993). This action will not add or decrease the public reporting 
burden. The full text of this Commission decision 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, (202) 857-3800, 2100 M Street NW., Washington, DC 20037.

Synopsis of Memorandum Opinion and Order

I. Introduction

    1. By this action, the Commission denies National Rural 
Telecommunications Cooperative's (NRTC) petition for reconsideration of 
the Commission's rule implementing section 628(c)(2)(C) of the Cable 
Television Consumer Protection and Competition Act of 1992 (1992 Cable 
Act).\1\ The rule was adopted in the First Report and Order in MM 
Docket 92-265 (First R&O), 8 FCC Rcd 3359 (1993); 58 FR 27658 (May 11, 
1993).

    \1\Pub. L. No. 102-385, 106 Stat. 1460 section 19 (1992), 
amending Communications Act of 1934, section 628.
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    2. The 1992 Cable Act amended the Communications Act of 1934, in 
part, by adding a new section 628. Section 628 is intended to foster 
the development of competition to traditional cable systems by 
providing greater access by competing multichannel systems to cable 
programming services. Section 628(b) of the 1992 Cable Act generally 
prohibits ``unfair'' or ``deceptive'' practices the purpose or effect 
of which is to prevent a distributor from providing programming to 
subscribers or consumers and section 628(c) proscribes specific conduct 
that the Commission shall prohibit in its rules. The Act provides that 
the regulations promulgated to implement section 628(c)(2)(C) must:

    Prohibit practices, understandings, arrangements, and 
activities, including exclusive contracts for satellite cable 
programming or satellite broadcast programming between a cable 
operator and a satellite cable programming vendor or satellite 
broadcast programming vendor, that prevent a multichannel video 
programming distributor from obtaining such programming from any 
satellite cable programming vendor in which a cable operator has an 
attributable interest or any satellite broadcast programming vendor 
in which a cable operator has an attributable interest for 
distribution to persons in areas not served by a cable operator as 
of the date of enactment of this section.

    Section 76.1002(c)(1) of the Commission's rules adopted in the 
First R&O to implement this section of the 1992 Cable Act prohibits 
exclusive contracts between cable operators and vertically integrated 
programmers in areas that are not served by cable operators. NRTC filed 
a petition for reconsideration of the First R&O, requesting the 
Commission to amend its implementing rule to include any behavior of a 
vertically integrated programmer that prevents any distributor from 
obtaining programming in areas not served by cable, and specifically 
exclusive contracts for the distribution of programming between direct 
broadcast satellite (``DBS'') distributors and vertically integrated 
satellite cable programming vendors.

II. Background

    3. The 1992 Cable Act and its legislative history indicate that 
Congress [[Page 3100]] was concerned with expanding the availability of 
programming and eliminating unjustified discrimination in the price 
charged to non-cable technologies.\2\ Congress noted that vertically 
integrated program suppliers have the incentive and ability to favor 
their affiliated cable operators over other multichannel video 
programming distributors (``MVPDs'').\3\ Thus, Congress concluded that 
program access provisions targeted at breaking the ``stranglehold'' 
over programming created by those vertical relationships in the cable 
industry would lead to a more balanced competitive environment in the 
multichannel video programming marketplace.\4\ Direct broadcast 
satellites were among the technologies that were to be fostered through 
the program access provisions of the 1992 Cable Act.\5\

    \2\1992 Cable Act, sections 2, 19, Communications Act section 
628, 47 U.S.C. 548; House Comm. on Energy and Commerce, H.R. Rep. 
No. 102-862, (``Conference Report'') 102d Cong., 2d Sess. at 93 
(1992); Senate Comm. on Commerce, Science and Transportation, S. 
Conf. Rep. No. 102-92, (``Senate Report''), 102d Cong., 1st Sess. at 
23-29 (1991); House Comm. on Energy and Commerce, H.R. Rep. No. 102-
628, (``House Report'') 102d Cong., 2d Sess. at 165-68 (1992); 138 
Cong. Rec. H6487-6571 (daily ed. July 23, 1992).
    \3\1992 Cable Act, section 2(a)(5).
    \4\See 138 Cong. Rec. H6540 (daily ed. July 23, 1992) (statement 
of Rep. Eckart in support of the Tauzin amendment).
    \5\House Report at 165-66 (additional views of Messrs. Tauzin, 
Harris, Cooper, Synar, Eckart, Bruce, Slattery, Boucher, Hall, 
Holloway, Upton and Hastert).
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    4. As background on the DBS industry, the first DBS satellite 
(``DBS-1'') was launched in December 1993; it is co-owned and jointly 
operated by Hughes Communications Galaxy, Inc., (whose affiliated 
company, DirecTV, is the DBS provider) and United States Satellite 
Broadcasting, Inc. (``USSB''), which is owned by Hubbard Broadcasting, 
Inc. The satellite is situated at the 101 deg. West Longitude orbital 
position. DirecTV owns eleven of the sixteen transponders on DBS-1 and 
USSB owns the remaining five. On June 17, 1994, DirecTV and USSB began 
providing DBS service to the entire continental United States. 
Currently, DirecTV offers 150 channels and USSB offers 20 channels. At 
present, DirecTV and USSB are the only entities offering high-power Ku-
band (small dish) DBS service in the United States, although several 
other parties hold construction permits for other orbital locations.
    5. NRTC is the exclusive marketer and distributor of DirecTV 
programming in certain specified rural areas. The DBS distribution 
agreement between DirecTV and NRTC requires DirecTV to obtain certain 
programming on behalf of NRTC. USSB entered into exclusive distribution 
agreements with Viacom and Time Warner, two vertically integrated 
satellite cable programming vendors, to carry HBO and Showtime, 
respectively, granting distribution rights at the 101 deg. West 
Longitude orbital location.\6\ The agreements do not restrict access to 
the programming by multichannel multipoint distribution services 
(``MMDS''), satellite master antenna television (``SMATV''), or C-band 
satellite distributors; and the agreements do not restrict access by 
any DBS distributor at any other orbital location.

    \6\The DBS-1 satellite at the 101 deg. West Longitude location 
can deliver a signal to the entire continental United States 
(``full-CONUS''). Under international treaties and agreements, the 
United States is assigned eight orbital locations for high-power DBS 
satellites. These eighth orbital locations are divided between 
eastern locations which provide signals to the eastern half of the 
continental United States (``half-CONUS'') and western locations 
which provide signals to the western half-CONUS. Three of the four 
eastern orbital locations (101 deg. West Longitude, 110 deg. West 
Longitude, and 119 deg. West Longitude) can also deliver a full-
CONUS signal. The fourth eastern orbital location, 61.5 deg. West 
Longitude, may not be able to deliver an adequate full-CONUS signal.
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III. Discussion

    6. Because there are several possible interpretations of the 
statutory provisions involved here (sections 628(b) and (c)), to 
resolve this matter it is appropriate to rely not just on the language 
of the Act but also on a careful analysis of the structure, legislative 
history, and the underlying policy objectives of section 628 of the 
1992 Cable Act. This is the process that previously has been followed 
in implementing the provisions of the 1992 Cable Act and in developing 
a coherent set of rules for their enforcement. Having made careful use 
of that process to assure that the various program access provisions of 
the 1992 Cable Act fit together in a coordinated fashion, failure to 
follow that course now could lead to anomalous results.
    7. Based on a thorough review of these factors, we believe our 
initial interpretation of section 628(c)(2)(C) of the 1992 Cable Act, 
as reflected in implementing rule Sec. 76.1002(c)(1), is reasonable and 
should stand. We believe that this interpretation is supported by the 
findings and policy set forth in the 1992 Cable Act and its legislative 
history and best fulfills the underlying purposes of the 1992 Cable 
Act--to foster competition to traditional cable systems. We note, 
however, that in declining to broaden the scope of Sec. 76.1002(c)(1)--
to prohibit per se the exclusive DBS contracts at issue--we do not 
preclude the petitioner or any other aggrieved party from seeking 
relief from such contracts through other appropriate provisions of the 
1992 Cable Act. We further find that contrary to all parties' 
assertions, the final judgments issued in the federal antitrust actions 
against Primestar Partners, that involved allegations of 
anticompetitive restrictions on access to cable programming, have no 
relevance to the disposition of the issue before us. The Primestar 
Final Judgment specifically provides that the decrees do not preempt 
the 1992 Cable Act or the Commission's rules.\7\

    \7\United States v. Primestar Partners, 1994-1 Trade Cas. (CCH) 
70,562 (S.D.N.Y. 1994); State of New York ex rel. Abrams v. 
Primestar Partners, 1993-2 Trade Cas. (CCH) 70,403, 404 (S.D.N.Y. 
1993). See also, Transcript of Hearing on Proposed Consent Decree, 
State of New York ex rel. Abrams v. Primestar Partners, No. 93-3868, 
at 22-23 (S.D.N.Y. Sept. 3, 1993) (presiding judge stating ``there 
is nothing in this decree that binds the FCC in any way * * * nor 
should any finding I make in approving this decree be taken * * * as 
any imprimatur of approval or suggestion that the particular 
exclusive contracts are lawful or unlawful. That is a matter for the 
FCC and a matter as to which I would have to defer to the FCC''). 
Further, in its Amicus Curiae Memorandum of Law, the Commission 
specifically recommended against approval of the various decrees 
warning, inter alia, that the court's apparent blessing of 
exclusivity would encourage arguments by proponents of exclusivity 
that the Commission should find no need to prohibit exclusivity in 
light of the court's apparent willingness not to prohibit it. 
Memorandum of Law of the Federal Communications Commission as Amicus 
Curiae  at 14, filed August 23, 1993, State of New York ex rel. 
Abrams v. Primestar Partners, No. 93-3868 (S.D.N.Y)(``Memorandum''). 
Indeed, in support of its position the Commission noted the 
reconsideration pending in this proceeding and referenced USSB's 
argument in this proceeding that the Primestar decrees essentially 
sanction exclusivity in the DBS context. Memorandum  at n. 24.
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    8. We are not persuaded that section 628(c)(2)(C) is clear and 
unambiguous. Indeed, ambiguity exists when a statute is capable of 
being construed ``by reasonably well-informed persons in two or more 
different senses.''\8\ NRTC [[Page 3101]] suggests that the meaning of 
Section 628(c)(2)(C) can best be revealed by a literal reading, without 
the parenthetical phrase beginning with ``including.'' NRTC regards 
this phrase as merely illustrative. While the use of the word 
``including'' does support NRTC's interpretation that the reference to 
cable operators is simply an example,\9\ NRTC's reading would eliminate 
the defining reference for the words ``such programming'' that 
immediately follow. An alternate interpretation of the section is that 
the ``including'' phrase supplies the definition for the whole section 
through the words ``such programming,'' i.e., programming that is the 
subject of an exclusive contract with a cable operator. Neither 
interpretation is perfect. NRTC's interpretation would negate the 
predicate for use of the phrase ``such programming.'' The alternative 
interpretation would negate the illustrative implication of the term 
``including.'' The ``including'' and the ``such programming'' language 
cannot be reconciled simply from the statutory language. Although the 
language of section 628(c)(2)(C) is capable of being read to suggest 
that the Commission is required to consider practices other than 
exclusive contracts between cable operators and their affiliated 
programmers within the prohibition, because the legislative history is 
silent as to conduct that should be prohibited per se, other than cable 
operators' practices, the Commission believes that its current 
implementing rule is the most reasonable interpretation of Section 
628(c)(2)(C).\10\

    \8\United States v. Iron Mountain Mines, Inc. 812 F. Supp. 1528, 
1557 (E.D.Cal 1992) (citing Sutherland Stat. Const. Sec. 46.04 at 99 
(5th ed. 1992)). In this regard, we note that the Commission has 
received letters from members of Congress involved in legislative 
debates on the 1992 Cable Act that support conflicting 
interpretations of that provision. For example, compare Ex Parte 
Letter from Representatives Rick Boucher, Ron Wyden, Jim Slattery, 
Ralph Hall, Billy Tauzin, Jim Cooper, Blanche Lambert and Mike Synar 
to Chairman Hundt, June 15, 1994, with Ex Parte Letter from Senator 
Jeff Bingaman to Chairman Hundt, July 6, 1994; Ex Parte Letter from 
Rep. Al Swift to Chairman Hundt, July 8 1994; Ex Parte Letter from 
Rep. Henry A. Waxman to Chairman Hundt, Aug. 16, 1994; Ex Parte 
Letter from Senators Bob Packwood and Dan Coats to Chairman Hundt, 
Aug. 24, 1994; Ex Parte Letter from Rep. Thomas Manton to Chairman 
Hundt, Aug. 30, 1994; Ex Parte Letter from Representatives Harris W. 
Fawell, Philip M. Crane, Steven H. Schiff, Carlos J. Moorhead, Scott 
L. Klug, Cardiss Collins, Jack Fields and J. Dennis Hastert to 
Chairman Hundt, Aug. 24, 1994.
    \9\Puerto Rico Maritime Shipping Authority v. Interstate 
Commerce Commission, 645 F.2d 1102, 1112 n. 26 (D.C. Cir. 1981) 
(``It is hornbook law that the use of the word `including' indicates 
that the specified list [] that follows is illustrative, not 
exclusive.'')
    \10\Indeed, if NRTC's interpretation were adopted, it could be 
argued that NRTC's exclusive marketing agreements, supra  5, could 
themselves violate this provision of the 1992 Cable Act. Although 
DirecTV is not a satellite cable programming vendor in which a cable 
operator has an attributable interest, its exclusive agreement with 
NRTC precludes competitors of NRTC from accessing certain vertically 
integrated services that are distributed over DBS only by DirecTV.
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    9. The legislative history of Section 628 specifically, and of the 
1992 Cable Act in general, reveals that Congress was concerned with 
market power abuses exercised by cable operators and their affiliated 
programming suppliers that would deny programming to non-cable 
technologies, and did not address any such abuses exercised by non-
cable technologies, such as DBS.
    10. The legislative history of section 628(c)(2)(C) more 
particularly illustrates congressional concern over cable operators' 
use of exclusivity to stifle competition from other technologies. The 
Conference Report describes the House provisions on unserved areas 
(which ultimately were adopted in section 628(c)(2)(C) with 
modifications) as prohibiting ``exclusive contracts and other 
arrangements between a cable operator and a vendor.''\11\ During the 
House floor debates on the amendment, which ultimately was adopted in 
the House bill, the sponsor and supporters of the amendment emphasized 
its importance in lifting barriers to entry into the video distribution 
market by competing technologies imposed by the cable industry's 
``stranglehold'' over programming through exclusivity.\12\ In contrast, 
the legislative history is silent with respect to the use of exclusive 
programming contracts by non-cable competing technologies. While we 
recognize that silence as to non-cable technologies is not inherently 
dispositive in light of the ambiguous statutory language, we give great 
weight to the legislative history's emphasis on cable operators.

    \11\Conference Report at 92 (emphasis added).
    \12\See 138 Cong. Rec. H6534 (daily ed. July 23, 1992) 
(statement of Rep. Tauzin); 138 Cong. Rec. H6537 (daily ed. July 23, 
1992) (statement of Rep. Houghton); 138 Cong. Rec. H6539 (daily ed. 
July 23, 1992) (statement of Rep. Lancaster); 138 Cong. Rec. H6540 
(daily ed. July 23, 1992) (statement of Rep. Eckart); 138 Cong. Rec. 
H6541 (daily ed. July 23, 1992) (statement of Rep. Harris).
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    11. Our interpretation is bolstered by the fact that, given the 
statute's distinction between cable operators' exclusive contracts in 
areas served and unserved by cable, the Commission's inclusion of DBS 
exclusive contracts within the per se prohibition of section 
628(c)(2)(C) could have an unintended effect on the DBS industry. While 
section 628(c)(2)(C) prohibits exclusive contracts between cable 
operators and programming vendors with cable affiliation in areas that 
are not served by cable, section 628(c)(2)(D) allows such contracts in 
areas that are served and where the Commission determines the contracts 
are in the public interest. Moreover, DBS distributors, unlike cable 
operators, would not be required to seek a public interest 
determination for areas served by cable because section 628(c)(2)(D) 
specifically applies only to cable operators' exclusive contracts. If 
section 628(c)(2)(C) is read to prohibit per se DBS exclusive 
contracts, such contracts would be completely permissible in served 
areas but prohibited in unserved areas. As a result, the DBS operators 
who do not possess the exclusive rights would have to identify and 
``block out'' the served areas (where such exclusive contracts would be 
valid), while their distribution in the unserved areas could continue. 
There is no indication in the legislative history that Congress 
intended the DBS industry to engage in such an odd and potentially 
burdensome exercise. Nor is it clear why the DBS exclusive contracts, 
as opposed to cable exclusive contracts, would turn on whether the area 
is served by cable.
    12. Our decision is supported by the rules of statutory 
construction that require us to examine the whole statute when 
interpreting a part.\13\ While NRTC's interpretation of the 
``including'' phrase, contained in section 628(c)(2)(C), is a plausible 
reading taken in isolation, we believe that the more compelling rule of 
statutory construction is to construe the language in section 
628(c)(2)(C) in a manner most harmonious with the policies and the 
other provisions of the 1992 Cable Act. We agree with Opponents that 
section 628(c)(2)(C), read in conjunction with section 628(c)(2)(D), 
supports the common understanding of Congress' intent in this section 
to restrict cable operators' use of exclusive contracts in served and 
unserved areas.\14\ The stated purpose of the program access provisions 
is to increase competition from non-cable technologies, to increase the 
availability of satellite programming to persons in rural areas and 
``to spur the development of communications technology,''\15\ such as 
DBS. We believe that an outright ban on any MVPD exclusive contracts in 
areas unserved by cable, without any determination of the effect of 
such exclusivity on competition, defeats the very purpose of the 1992 
Cable Act to foster competition from other non-cable technologies.

    \13\Sutherland Stat. Const. Secs. 46.05, 4702 at 103, 139 (5th 
ed. 1992); See Kokoszka v. Belford, 417 U.S. 642, 650 (1974) (``When 
interpreting a statute, the court will not look merely to a 
particular clause in which general words may be used, but will take 
in connection with it the whole statute * * * and the objects and 
policy of the law, as indicated by its various provisions, and give 
to it such construction as will carry into execution the will of the 
legislature.''); see also Richards v. United States, 369 U.S. 1, 11 
(1962); Philbrook v. Glodgett, 421 U.S. 707, 713 (1975).
    \14\Indeed, the contemporaneous understanding of sections 
628(c)(2) (C) and (D), that these sections only restricted cable 
operators' exclusive contracts, was articulated by most parties 
involved in the original rule making, including DirecTV. See Reply 
Comments of DirecTV in MM Docket 92-265, filed Feb. 16, 1993, at 12 
n.11 and Appendix (summary of Tauzin amendment) (``The Commission is 
directed to prohibit any arrangement between a cable operator and a 
programming vendor, including exclusive contracts, which would 
prevent a distribution competitor from providing programming to 
persons unserved by a cable operator.'').
    \15\47 U.S.C. 548(a).
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    13. In addition to our interpretation of the statute, we find no 
evidence in the [[Page 3102]] pleadings submitted in this proceeding 
that non-cable exclusive contracts of the type involved here are either 
harmful to the development of competition, ``unfair'' or ``deceptive,'' 
or have negative effects on consumers. The record does not demonstrate 
that such contracts will hinder the development of DBS as an effective 
competitor to cable; that USSB's contracts with Viacom and Time Warner 
have impeded the entry either of DirecTV or NRTC into the DBS 
marketplace; or that the contracts generally have harmed the entry of 
DBS service into the multichannel video programming marketplace. 
Indeed, the evidence presented suggests that a DBS distributor's 
exclusive contract for programming covering one orbital location may 
foster DBS as a significant competitor to cable. Such contracts may 
allow a distributor to distinguish its service from that of another, 
avoid duplication of programming, and eventually lead to more diversity 
in programming for the consumer. To the extent such contracts allow a 
greater number of DBS distributors to establish distinctive competing 
services, we believe they further congressional policy to ``rely on the 
marketplace, to the maximum extent feasible, to achieve greater 
availability of the relevant programming.''\16\ In contrast to cable 
exclusivity in areas unserved by cable, which would foreclose services 
from non-cable multichannel video programming distributors, consumers 
will be able to receive all DBS programming from one DBS provider or 
another by being able to select specific programming services without 
having to purchase entire programming packages. We agree with Opponents 
that prohibiting a DBS distributor's exclusive contract for programming 
covering one orbital location may in fact create unnecessary 
inefficiencies because the same programming could then occupy multiple 
transponders on the same satellite and decrease the diverse mix of 
programming available. Without prejudging any future complaints, we 
currently believe that the record before us provides no basis to 
conclude that the market power abuses, about which Congress was 
concerned, are present in the exclusive contracts at issue here.

    \16\First R&O, 8 FCC Rcd at 3369 (citing 1992 Cable Act section 
(2)(b)(2)).
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    14. Our reaffirmation of our interpretation of section 628(c)(2)(C) 
does not foreclose all remedies to an MVPD who claims to be aggrieved 
by an exclusive contract between a non-cable MVPD and a vertically 
integrated satellite cable programming vendor. In the First R&O, we 
previously determined that while section 628(b) does not specify types 
of ``unfair'' practices that are prohibited, it ``is a clear repository 
of Commission jurisdiction to adopt additional rules or to take 
additional action to accomplish statutory objectives should additional 
types of conduct emerge as barriers to competition and obstacles to the 
broader distribution of satellite cable and broadcast 
programming.''\17\ The Commission did not sanction exclusive contracts 
between non-cable MVPDs and vertically integrated cable programming 
vendors, thus leaving open the possibility that such contracts could be 
challenged on the basis that they involve non-price discrimination or 
``unfair practices.'' Section 628(b) of the 1992 Cable Act and the 
Commission's implementing rule, Sec. 76.1001, provide a broad 
prohibition against ``unfair methods of competition or unfair or 
deceptive acts or practices, the purpose or effect of which is to 
hinder significantly or to prevent any multichannel video programming 
distributor from providing satellite cable programming or satellite 
broadcast programming to subscribers or consumers.''\18\ Also in the 
First R&O, the Commission stated that section 628(b) does not prescribe 
specific practices (in contract to section 628(c)), but does require a 
showing of anti-competitive harm, i.e., that the purpose or effect of 
the complained of conduct is to ``hinder significantly or to prevent an 
MVPD from providing programming to subscribers or customers.''\19\ The 
Commission has stated that the objectives of the ``unfair practices'' 
provision are to provide a mechanism for addressing conduct, primarily 
associated with horizontal and vertical concentration within the cable 
and satellite cable programming fields, that inhibits the development 
of multichannel video programming distribution competition.\20\ 
Therefore, where future contracts cause a restriction in the 
availability of programming to alternative distributors and their 
subscribers, an aggrieved MVPD could seek redress by filing an ``unfair 
practices'' complaint under Sec. 76.1001 of the Commission's rules.

    \17\Id. at 3374.
    \18\47 U.S.C. 548(b); 47 CFR 76.1001.
    \19\First R&O, 8 FCC Rcd at 3377.
    \20\Id. at 3373.
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    15. Finally, we believe that using Sec. 76.1001 as an avenue to 
address non-cable exclusive contracts, such as those at issue here, 
will afford the Commission the opportunity to consider all the 
ramifications of such contracts, including the effect on competition, 
based upon the particular facts of each case. This case-by-case review 
will avoid amending a Commission rule to create an overly broad per se 
prohibition appears to be contrary to Congress' intent.
    16. For the reasons discussed above, we reaffirm our interpretation 
of section 628(c)(2)(C) as reflected in our implementing rule. We 
believe that this is the most reasonable interpretation based on the 
fact that Congress specifically directed the Commission to prohibit 
exclusive contracts between cable operators and vertically integrated 
programming vendors in unserved areas, but did not specifically address 
the inclusion of exclusive contracts between non-cable MVPDs and 
vertically integrated programming vendors within section 628(c)(2)(C)'s 
prohibition. We believe that any complaints regarding exclusive 
agreements are more appropriately addressed through other provisions of 
the statute. Thus, the Commission denies NRTC's request.

IV. Ordering Clause

    17. Accordingly, it is ordered, that the Petition for 
Reconsideration of the National Rural Telecommunications Cooperative is 
denied.

List of Subjects in 47 CFR Part 76

    Cable television.


Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-894 Filed 1-12-95; 8:45 am]
BILLING CODE 6712-01-M