[Federal Register Volume 60, Number 32 (Thursday, February 16, 1995)]
[Proposed Rules]
[Pages 8996-9001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3831]



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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 63

[CC Docket No. 87-266; FCC 95-20]


Telephone Company-Cable Television Cross-Ownership Rules

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission adopted a Fourth Further Notice of Proposed 
Rulemaking in Common Carrier Docket 87-266, with the intent of 
soliciting information and comment on the extent to which Title II of 
the Communications Act, Title VI, or both, apply to a telephone 
company's provision of video programming directly to subscribers within 
its telephone service area. The Commission also requested comment on 
what changes, if any, need to be made to the video dialtone regulatory 
framework if a telephone company decides to become a video programmer 
on its own video dialtone platform in its telephone service area, and 
in particular, whether telephone company provision of video programming 
raises new concerns about anticompetitive behavior or cross-subsidy 
that the Commission's existing regulatory framework may not 
sufficiently address.

DATES: Comments must be submitted on or before March 6, 1995. Reply 
comments are due on March 27, 1995.

ADDRESSES: Comments and Reply Comments may be mailed to the Office of 
the Secretary, Federal Communications Commission, 1919 M Street NW., 
Washington, DC 20554. A copy of each filing should also be filed with 
Peggy Reitzel of the Common Carrier Bureau, and James Yancey of the 
Cable Services Bureau.

FOR FURTHER INFORMATION CONTACT:
Jane Jackson (202) 418-1593, Common Carrier Bureau, Policy and Program 
Planning Division, and Larry Walke (202) 416-0847, Cable Services 
Bureau.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Fourth Further 
Notice of Proposed Rulemaking in Common Carrier Docket 87-266: 
Telephone Company-Cable Television Cross-Ownership Rules, Sections 
63.54-63.58, adopted January 12, 1995, and released January 20. 1995. 
The complete text of this Fourth Further Notice of Proposed Rulemaking 
is available for inspection and copying, Monday through Friday, 9:00 
a.m.-4:30 p.m., in the FCC Reference Room (Room 239), 1919 M Street, 
NW., Washington, DC 20554. The complete text of the Fourth Further 
Notice of Proposed Rulemaking may also be purchased from the 
Commission's copy contractor, International Transcription Services, 
2100 M Street, NW., Suite 140, Washington, DC 20037, (202) 857-3800.

Synopsis of Fourth Further Notice of Proposed Rulemaking

A. Governing Statutory Provisions.

    1. Local exchange carrier (LEC) provision of video programming 
raises questions about whether Title II of the Communications Act, 
Title VI of the Communications Act, or both, would govern particular 
LEC video offerings, and how these provisions might apply to a LEC's 
provision of video [[Page 8997]] programming directly to subscribers 
within its telephone service area and over facilities used to provide 
both voice and video services. We now seek comment on these issues and 
on the analysis we offer below.
1. Application of Title II to LEC Video Programming Offerings
    2. We first tentatively conclude that telephone companies should be 
permitted to provide video programming over Title II video dialtone 
platforms. We recently reaffirmed our conclusion that the construction 
of video dialtone systems would serve the public interest goals of 
facilitating competition in the provision of video programming 
services, encouraging efficient investment in our national information 
infrastructure, and fostering the availability to the American public 
of new and diverse sources of video programming. Two U.S. Courts of 
Appeals have now held unconstitutional the specific statutory basis for 
prohibiting a telephone company from providing, directly or indirectly, 
programming over its own video dialtone platform. In light of the 
public interest benefits of a video dialtone platform, which provides 
multiple video programmers with common carrier-based access to end 
users, we tentatively conclude, in the absence of Section 533(b), that 
we should not ban telephone companies from providing their own video 
programming over their video dialtone platforms. We note that we allow 
telephone companies to use their networks to provide their own enhanced 
services today, subject to safeguards. Thus, in the absence of a 
demonstration of a significant governmental interest to the contrary, 
we propose to allow telephone companies to provide video programming 
over their own video dialtone platforms, subject to appropriate 
safeguards. We seek comment on this proposal, and on whether any such 
significant governmental interest to support a ban exists and, if it 
does, whether a ban would be a narrowly tailored restriction on the 
telephone companies' First Amendment rights.
    3. A second Title II issue is whether we can, and should, require 
telephone companies to provide video programming only over video 
dialtone platforms. Even before the recent court decisions invalidating 
the telco-cable cross-ownership ban, there were three circumstances in 
which LECs could provide video programming directly to subscribers. In 
these circumstances, however, LECs have not been authorized to use 
their local exchange facilities to provide cable service, but, rather, 
to construct or purchase interests in separate cable facilities. 
Indeed, as noted by the court in NCTA v. FCC (1994), it was not until 
after the 1984 Cable Act that technological advances have made it 
practical to deliver video signals over the same common carrier 
networks that are used to provide telephone service. Previously, as the 
court noted, ``[a] telephone company that wanted to provide cable 
service would have had to construct a coaxial cable distribution system 
parallel to its telephone system.''
    4. We seek comment on whether we have authority under Section 214 
to require LECs that seek to provide video programming directly to 
subscribers in their telephone service areas to do so on a video 
dialtone common carrier platform and not on a non-common carrier cable 
television facility. We seek comment on what circumstance would warrant 
such a requirement, and specifically on whether we should require use 
of a video dialtone platform whenever a LEC provides video services 
over facilities that are also used in the provision of telephone 
services. We seek comment on our authority generally to require LECs 
seeking Section 214 authority to acquire or construct video facilities 
to comply with our video dialtone framework.
2. Application of Title VI to LEC Provision of Video Programming
    5. We now seek comment on the circumstances, if any, in which a LEC 
that, by court decision, is not subject to the 1984 Cable Act telco-
cable cross-ownership ban may offer a cable service subject to Title VI 
in lieu of a Title II video dialtone offering. We also seek comment on 
the extent to which Title VI should apply to video programming provided 
by LECs on a Title II video dialtone system. We have previously held 
that LEC provision of a common carrier video dialtone platform is not 
subject to Title VI of the Act. In particular, we found that such LECs 
are not offering ``cable service,'' and are not operating a ``cable 
system'' within the meaning of Title VI. We reasoned that LECs did not 
actively participate in the selection and distribution of video 
programming because they were precluded from providing video 
programming directly to subscribers in their telephone service areas. 
We also concluded that video dialtone facilities are not cable systems 
because they are common carrier facilities subject to title II of the 
Act which, under Commission rules, could not be used for LEC provision 
of video programming directly to subscribers in the LEC's telephone 
service area. We now seek comment on whether, if a LEC, or its 
affiliate, does provide video programming over its video dialtone 
system and actively engages in the selection and distribution of such 
programming, that LEC, or its affiliate, is subject to Title VI. We 
seek comment on the Commission's legal authority to determine whether 
some, but not all, provisions of Title VI relating to cable operators 
would apply to a LEC that provides video programming over its video 
dialtone platform. We also seek comment on whether the application of 
some or all provisions of Title VI would result in a regulatory 
framework that is duplicative of, or inconsistent with, federal or 
state regulation of communications common carriage. For example, the 
goals of the leased access provision of Title VI could be met through 
obligations Title II imposes on a LEC as the provider of the video 
dialtone platform whether or not the LEC as a video service provider 
provides its own leased access channels. We seek comment on the 
potential impact of our determinations in this proceeding on existing 
grants by state and local authorities of public rights-of-way. We also 
invite parties to discuss both the legal and practical implications of 
requiring, or not requiring, telephone companies providing video 
programming over their own video dialtone systems to comply with each 
of the various provisions of Title VI. In the event that Title VI cable 
rate regulation rules apply, we seek comment on how such rules would 
apply to a LEC providing video programming directly to subscribers over 
its own video dialtone platform.
    6. In addition, we seek comment on whether, if Title VI does not 
apply to telephone companies' provision of video programming on video 
dialtone facilities, the Commission should adopt, under Title II, 
provisions that are analogous to certain aspects of Title VI. For 
example, we seek comment on whether we should adopt rules governing 
program access by competing distributors, carriage agreements between 
video service providers and unaffiliated programmers, and vertical 
ownership restrictions.
    7. Finally, we note that the court's opinion in NCTA v. FCC (1994) 
is consistent with the Commission's reasoning in the First Report and 
Order, 56 FR 65464-01 (December 17, 1991), that a LEC providing video 
dialtone service does not require a local franchise because the LEC 
does not provide the video programming. We seek comment on whether this 
view would require a LEC offering video dialtone service to secure a 
local [[Page 8998]] franchise if that LEC also engages in the provision 
of video programming carried on its platform.

B. Regulatory Safeguards Governing a Local Exchange Carrier's Provision 
of Video Programming on its Video Dialtone Platform

1. Introduction and Scope
    8. In this section we consider what changes, if any, need to be 
made to our video dialtone regulatory framework if a telephone company, 
pursuant to an applicable court decision, decides to become a video 
programmer on its own video dialtone platform in its telephone service 
area. In addressing the issues identified below, parties should address 
whether we should apply different safeguards for technical and market 
trials than for commercial offerings of video dialtone.
2. Ownership Affiliation Standards
    9. Under our current rules, LECs are prohibited from providing 
video programming directly to subscribers, and from having a cognizable 
(i.e., 5 percent or more) financial interest in, or exercising direct 
or indirect control over, any entity that is deemed to provide video 
programming in its telephone service area. We propose to retain these 
ownership affiliation standards to identify those video dialtone 
programmers that we will consider to be affiliated with LECs providing 
the underlying common carriage. Under this proposal, if the Commission 
determines that LEC ownership of video programming requires additional 
safeguards, those safeguards would apply if the LEC owned five percent 
or more of a video programmer. We seek comment on this proposal.
3. Safeguards Against Anticompetitive Conduct
a. Sufficient Capacity To Serve Multiple Service Providers
    10. Under the video dialtone regulatory framework, a LEC is 
required to provide sufficient capacity to serve multiple service 
providers on a nondiscriminatory basis. In the Video Dialtone 
Reconsideration Order, 59 FR 63909-01 (December 12, 1994), we rejected 
use of an ``anchor programmer,'' that is, allocation of all or 
substantially all of the analog capacity of the video dialtone platform 
to a single programmer. We seek comment on whether there are other 
across-the-board rules that we should adopt to ensure that video 
dialtone retains its essential Title II character when a LEC becomes a 
video programmer on its platform.
    11. We seek comment, for instance, on whether we should limit the 
percentage of its own video dialtone platform capacity that a LEC, or 
its affiliate, may use. Such a limit could help ensure other 
programmers access, but may create a risk that some capacity might go 
unused. We seek comment on what an appropriate limit would be; whether 
any percentage limit should vary with the platform's capacity; and 
whether different rules should apply to analog and digital channels. 
Video dialtone capacity constraints appear likely to be most severe in 
the short-term, with respect to analog channels, and may be of less 
concern on future all-digital systems. Commenters should address 
whether LEC use of video dialtone capacity raises short-term or long-
term concerns, and how the probable duration of the problem should 
affect our regulatory approach. Alternatively, we seek comment on 
whether LECs that deny capacity to independent programmers should be 
subject to procedural requirements more detailed than those imposed 
inthe Video Dialtone Reconsideration Order.
    12. In the Third Further Notice of Proposed Rulemaking, 59 FR 
63971-01 (December 12, 1994), the Commission sought comment and 
information regarding channel sharing mechanisms that LECs have 
proposed as means of making analog capacity available to more customer-
programmers than might otherwise be accommodated. Parties addressing 
limits on LEC use of the video dialtone platforms should comment in 
this proceeding on the relationship between such channel sharing 
mechanisms and any proposal to limit LEC use of analog channels. The 
Third Further Notice of Proposed Rulemaking also sought comment on two 
other signal carriage issues: (1) Whether the Commission should mandate 
preferential video dialtone access or rates for commercial 
broadcasters, public, educational and governmental (``PEG'') channnels, 
or other not-for-profit programmers; and (2) whether the Commission 
should permit LECs to offer preferential treatment to certain 
programmers on a voluntary (``will carry'') basis. Parties should 
comment in this proceeding on the relationships among mandatory 
preferential treatment, ``will carry,'' and any proposed limits on a 
LEC's use of its video dialtone capacity to provide programming 
directly to subscribers.
    13. Another example of potentially anticompetitive conduct that has 
been cited in the context of cable television service under Title VI 
involves channel positioning. Programmers assert that cable operators 
can and do deliberately assign unaffiliated program services to 
undesirable channel locations. Under Title II, such discriminatory 
conduct is prohibited. We seek comment on whether LECs that are also 
video program providers have an increased incentive to use their 
control over the video dialtone platform to engage in such activities 
and what, if any, specific safeguards we should implement to prevent 
such conduct. In particular, we seek comment on whether the channel 
positioning rules that apply to cable operators in the context of the 
``must-carry'' requirement of Title VI should also apply to video 
dialtone platform operators providing programming directly to 
subscribers in their local exchange service areas.
b. Non-Ownership Relationships and Activities Between Telephone 
Companies and Video Programmers
    14. In the Video Dialtone Reconsideration Order, the Commission 
affirmed, with certain modifications, its decision to permit LECs to 
enter into non-ownership relationships with video programmers that 
exceed a carrier-user relationship. We propose at a minimum, to retain 
these restrictions as safeguards against LEC anticompetitive conduct 
and to promote further LEC deployment of broadband services. We believe 
that the restrictions on non-ownership affiliations between LECs and 
cable operators are important to the Commission's goal of promoting 
competition in the video services marketplace, and are not overbroad 
infrigements on LEC First Amendment rights. Parties should comment on 
the proposal to retain these safeguards and should describe any 
specific additional measures they believe necessary to safeguard 
against anticompetitive conduct by LECs that offer programming on their 
own video dialtone system.
c. Acquisition of Cable Facilities
    15. In the Video Dialtone Reconsideration Order, the Commission 
substantially affirmed its decision to prohibit telephone companies 
from acquiring cable facilities in their telephone service areas for 
the provision of video dialtone. We continue to believe that this ban 
will benefit the public interest by promoting greater competition in 
the delivery of video services, increasing the diversity of video 
programming available to consumers, and advancing the deployment of the 
national communications infrastructure. We tentatively conclude that 
the ban on LEC acquisition of cable facilities for the provision of 
video dialtone does not impermissibly restrict LEC speech 
[[Page 8999]] under C&P Tel. Co. v. U.S. and U S West v. U.S., and seek 
comment on this conclusion.
    16. In the Third Further Notice of Proposed Rulemaking, the 
Commission recognized that some markets may be incapable of supporting 
two video delivery systems. The Commission was concerned that, in such 
markets, the prohibition could preclude establishment of video dialtone 
service, thereby denying consumers the benefits of competition and 
diversity of programming sources that our video dialtone regulatory 
framework is designed to promote. As a result, the Commission requested 
parties to suggest criteria that would permit us to identify those 
markets in which two wire-based multi-channel video delivery systems 
would not be viable. We seek comment on how, if at all, the decisions 
in C&P Tel. Co. v. U.S. and U S West v. U.S. should affect our 
consideration of criteria for allowing exceptions to our two-wire 
policy. We also seek comment on whether we should ban telephone company 
acquisition of cable facilities, with or without exceptions, if (a) 
Title VI applies to telephone companies providing programming on their 
own video dialtone platforms; or (b) telephone companies are permitted 
to become traditional cable operators in their own service areas 
instead of constructing video dialtone platforms.
d. Joint Marketing and Customer Proprietary Network Information
    17. In the Video Dialtone Reconsideration Order, the Commission 
also affirmed its decision to permit LECs to engage in joint marketing 
of basic and enhanced video services, and of basic video and non-video 
services. We found that significant public interest benefits can accrue 
from the efficiencies and innovations that may be obtained by 
permitting LECs to engage in joint marketing of basic and enhanced 
video services, and of basic video and non-video services. We also 
found that the record on reconsideration did not support a finding that 
joint marketing of common carrier video and telephony services would 
have an anticompetitive impact on the provision of video programming to 
end users. We now seek comment on whether LEC provision of video 
programming directly to end users requires that we revisit our analysis 
of joint marketing issues.
    18. In the Bell Atlantic Market Trial Order, released on January 
20, 1995, the Commission authorized Bell Atlantic to conduct a six-
month video dialtone market trial that will include provision of video 
programming directly to subscribers by a Bell Atlantic affiliate as 
well as by independent video programmers.
    Pending resolution of the instant rulemaking proceeding, we 
conditioned Bell Atlantic's authorization on its compliance with 
existing safeguards for the provision of nonregulated services, 
including enhanced services, and with several additional, interim 
safeguards against discrimination. We seek comment on whether any or 
all of these interim safeguards should be adopted as permanent 
requirements for LECs that provide video programming over their own 
video dialtone platforms.
    19. Under the Commission's customer proprietary network information 
(CPNI) requirements, the Commission limits the Bell Operating 
Companies' (BOCs') and GTE Service Corporation's (GTE's) use of CPNI; 
requires them to make CPNI available to competitive enhanced service 
providers (ESPs) designated by a customer; and requires that they make 
available to ESPs non-proprietary aggregated CPNI on the same terms and 
conditions on which they make such CPNI available to their own enhanced 
service personnel. In the Video Dialtone Reconsideration Order, the 
Commission determined that there was insufficient evidence to conclude 
that our existing CPNI rules do not properly balance our CPNI goals 
relating to privacy, efficiency, and competitive equity in the context 
of video dialtone. The Commission also required the BOCs and GTE to 
provide additional information regarding the kinds of CPNI to which 
they will have access as a result of providing video dialtone service 
and indicated its intent to seek further comment on such information. 
We now seek additional comment and information on whether LEC provision 
of video programming impacts the balancing of our goals for CPNI.
    20. In addition to concerns over possible anticompetitive use of 
CPNI, parties should discuss whether LEC provision of video programming 
raises new concerns regarding consumer privacy. Parties that perceive a 
greater threat to consumer privacy should describe with specificity 
their concerns, and suggest specific safeguards for protecting consumer 
privacy, and explain how these suggestions benefit the public interest.
    21. We also seek comments on safeguards to ensure nondiscriminatory 
access to network technical information. In the Bell Atlantic Market 
Trial Order, the Commission required Bell Atlantic to provide all video 
programmers with nondiscriminatory access to technical information 
concerning the basic video dialtone platform and related equipment. The 
Commission also noted that, in the circumstances of the market trial, 
Bell Atlantic would also be subject to the more specific Computer III 
network disclosure rules. We seek comment on whether the Bell Atlantic 
condition should be adopted as a permanent safeguard. We also seek 
parties to address whether the Computer III network disclosure rules 
should be modified in any way for application in the video dialtone 
context.
4. Safeguards Against Cross-Subsidization of Video Programming 
Activities
    22. In the Video Dialtone Reconsideration Order, the Commission 
determined that price cap regulation and accounting safeguards would be 
effective to prevent cross-subsidization of video dialtone-related 
nonregulated activities. We tentatively conclude that these safeguards 
against cross-subsidization apply to LEC provision of video programming 
just as they would to any other activity not regulated as Title II 
common carrier service, and that the existing rules are adequate to 
forestall cross-subsidy of the video programming activity. We seek 
comment on these tentative conclusions.
    23. Assuming we do not require structural separation, LECs will 
have the flexibility to conduct video programming activities both 
within the telephone operating company and through affiliates. For 
those video programming activities conducted in the operating company, 
the LEC will be required to record costs and revenues in accordance 
with Part 32 of the Commission's Rules, the Uniform System of Accounts 
(USOA), and to separate the costs of video programming activity from 
the costs of regulated telephone service in accordance with the part 64 
joint cost rules. We tentatively conclude that these rules are adequate 
to prevent cross-subsidization of video programming activities. We also 
tentatively conclude that we will apply to video programming activities 
the rule adopted in the Video Dialtone Reconsideration Order requiring 
LECs to amend their cost allocation manuals to reflect video dialtone-
related nonregulated activities within 30 days of receiving video 
dialtone facilities authorization. We seek comment on these tentative 
conclusions.
    24. H a LEC chooses for business reasons to provide video 
programming through an affiliate, the accounting treatment of operating 
company transactions with that affiliate will be governed by the 
affiliate transactions rules. We seek comment on whether amendments to 
those rules are needed [[Page 9000]] to safeguard against abuses in 
transactions between LECs and affiliated video program providers. 
Specifically, we seek comment on whether we should amend Section 32.27 
to clarify that any video program provider that is considered, because 
of a LEC's five percent ownership interest, to be a LEC affiliate for 
purposes of applying video dialtone safeguards will also be considered 
an ``affiliate'' for purposes of the affiliate transactions rule.
5. Structural Separation
    25. In the Computer III proceeding, the Commission replaced its 
requirement that BOCs offer enhanced services through separate 
subsidiaries with a set of nonstructural safeguards. Those 
nonstructural safeguards were intended to protect against 
discrimination and cross-subsidization while avoiding the 
inefficiencies associated with structural separation. We seek comment 
on whether our approach to these questions should differ when BOCs 
provide video programming. Specifically, we seek comment as to whether 
there are aspects of the video programming business that warrant our 
treating BOC provision of video programming differently from the way we 
treat BOC provision of customer premises equipment (CPE) and enhanced 
services generally. We also seek comment on whether any structural 
separation requirement should apply to LECs other than the BOCs. 
Commenting parties should specifically identify what aspects warrant 
different treatment, and what form of separation would be appropriate. 
Parties should also offer information concerning the relative costs and 
benefits of structural separation.
6. Pole Attachments
    26. Section 63.57 of our rules requires LECs seeking to provide 
channel service to show in their Section 214 applications that the 
cable system for which they would be providing channel service had pole 
attachment rights or conduit space available ``at reasonable charges 
and without undue restrictions on the uses that may be made of the 
channel by the operator.'' In the Third Further Notice of Proposed 
Rulemaking, the Commission sought comment on whether a similar rule 
should apply to LECs providing video dialtone service. We now seek 
additional comment on that proposal in light of C&P Tel. Co. v. U.S. 
and U S West v. U.S. Parties should address whether incentives to abuse 
control over pole and conduit space are increased if a LEC decides to 
offer video programming within its telephone service area. In addition, 
as requested in the Third Further Notice of Proposed Rulemaking, 
advocates of such a rule should propose specific language, and should 
explain how the rule would prevent anticompetitive conduct.
7. Legal and Constitutional Issues
a. Waiver of the Cross-Ownership Ban
    27. Section 533(b)(4) of the Communications Act provides that, upon 
a ``showing of good cause,'' the Commission may waive the 1984 Cable 
Act's cross-ownership ban. Under Section 533(b)(4), a waiver ``shall be 
granted by the Commission upon a finding that the issuance of such 
waiver is justified by the particular circumstances demonstrated by the 
petitioner, taking into account the policy of this subsection.'' In GTE 
California v. FCC, the United States Court of Appeals for the Ninth 
Circuit raises the question whether the Commission may establish 
conditions under which it will waive the telco-cable cross-ownership 
ban in order to obviate potential constitutional difficulties. We 
tentatively conclude that such a reading of Section 533(b)(4) is 
consistent with the terms of the statute. ``Good cause'' is commonly 
interpreted to include changed circumstances, and the circumstances 
that led us to institute the cross-ownership rule in 1970 have changed 
dramatically. The cable industry is no longer a fledgling industry. 
Instead, as the Supreme Court recently recognized, ``Congress found 
that over 60 percent of the households with television sets subscribe 
to cable * * * and for those households cable has replaced over-the-air 
broadcast television as the primary provider of video programming.''
    28. We also tentatively conclude that the safeguards we will 
establish will constitute ``particular circumstances * * *, taking into 
account the policy'' of Section 533(b), under which waivers are 
warranted. We do not intend to waive the telco-cable cross-ownership 
rule altogether, so that telephone companies may purchase cable 
companies that do not face competition and offer their own programming 
via a monopoly cable system. Rather, and in fulfillment of the policy 
underlying Section 533(b), we intend to promote competition in the 
multi-channel video programming market by establishing particular 
conditions under which telephone companies may establish video dialtone 
systems that will compete with existing cable operators, thus providing 
consumers with a choice of multi-channel video systems.
    29. The United States Court of Appeals for the District of Columbia 
Circuit recognized, in NCTA v. FCC (1990), that ``the policy of this 
subsection is to promote competition.'' However, in that decision the 
D.C. Circuit also appeared to give a narrow reading to the scope of the 
waiver provision. Specifically, the court of appeals remanded a 
decision in which the Commission had granted a waiver because the court 
concluded that the Commission had not shown that the participation of 
an affiliate of a telephone company in constructing transmission 
facilities was ``essential to the success'' of an experimental video 
programming project. But at that time no court had declared Section 
533(b) unconstitutional, and the D.C. Circuit did not consider whether 
a broader reading of Section 533(b)(4) was appropriate to render the 
provision constitutional. The Supreme Court has recently reiterated 
that ``a statute is to be construed where fairly possible so as to 
avoid substantial constitutional questions.'' A reading of the waiver 
provision that authorizes telephone companies that comply with the 
safeguards we will establish to provide video programming should render 
Section 533(b) constitutional, because in those circumstances any 
burden on speech by telephone companies will be minimal. Hence, under 
U.S. v. X-Citement Video, a broad interpretation of Section 533(b)(4) 
seems warranted. We seek comment on these tentative conclusions.
b. Constitutionality of Proposed Safeguards
    30. As the Court of Appeals for the Fourth Circuit stated in C&P 
Tel. Co. v. U.S., in order for a content-neutral government regulation 
of speech, such as the cross-ownership ban, to be constitutional, that 
regulation must be ``narrowly tailored to serve a significant 
governmental interest, and * * * leave open ample alternative channels 
for communication of the information.'' With respect to all proposals 
set forth above for safeguards on LEC provision of video programming, 
we seek comment on whether such safeguards, whether individually, or in 
any combination, would be consistent with the First Amendment, the 
Fourth Circuit's decision in C&P Tel. Co. v. U.S., and the Ninth 
Circuit's decision in U.S. West v. U.S. 

Ex Parte Presentations

    31. This Fourth Further Notice of Proposed Rulemaking is a non-
restricted notice-and-comment rulemaking proceeding. Ex parte 
presentations are [[Page 9001]] permitted, except during the Sunshine 
Agenda period, provided that they are disclosed as provided in the 
Commission's rules. See generally 47 CFR 1.1202, 1.1203, 1.1206.

Comment Filing Dates

    32. Pursuant to applicable procedures set forth in Sections 1.415 
and 1.419 of the Commission's rules, 47 C.F.R. 1.415, 1.419, interested 
parties may file comments on or before March 6, 1995, and reply 
comments on or before March 27, 1995. To file formally in this 
proceeding, you must file an original and four copies of all comments, 
reply comments, and supporting comments. If you want each Commissioner 
to receive a personal copy of your comments, you must file an original 
and nine copies. Comments and reply comments should be sent to Office 
of the Secretary, Federal Communications Commission, Washington, DC 
20554, with a copy to Peggy Reitzel of the Common Carrier Bureau, Room 
544, and James Yancey of the Cable Services Bureau, Room 408C. Parties 
should also file one copy of any documents filed in this docket with 
the Commission's copy contractor, International Transcription Services, 
Inc., 2100 M Street, NW., Suite 140, Washington, DC 20037. Comments and 
reply comments will be available for public inspection during regular 
business hours in the FCC Reference Center (Room 239), 1919 M Street 
NW., Washington, DC.

Initial Regulatory Flexibility Analysis Statement

    33. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C. 
601-612, the Fourth Further Notice of Proposed Rulemaking, seeking 
comment and information regarding whether additional or modified 
safeguards and rule changes may be necessary or appropriate in the 
context of the Commission's video dialtone regulatory framework, when a 
telephone company provides video programming directly to subscribers in 
its telephone service area may directly impact entities that are small 
business entities, as defined in Section 601(3) of the Regulatory 
Flexibility Act.
    34. The Secretary shall send a copy of this Fourth Further Notice 
of Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with Section 603(a) of the Regulatory 
Flexibility Act, Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601, et seq.

Ordering Clauses

    35. It is ordered that, pursuant to Sections 1, 4, 201-205, 215, 
and 218 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154, 201-205, 215, and 218, a Fourth Further Notice of Proposed 
Rulemaking is hereby adopted.
    36. It is further ordered that, the Secretary shall send a copy of 
the Fourth Further Notice of Proposed Rulemaking, including the 
regulatory flexibility certification, to the Chief Counsel for Advocacy 
of the Small Business Administration, in accordance with paragraph 
603(a) of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (1981).

List of Subjects in 47 CFR Part 63

    Cable television, Communications common carriers, Reporting and 
recordkeeping requirements, Telephone, Video dialtone.

Federal Communications Commission
William F. Caton,
Secretary.
[FR Doc. 95-3831 Filed 2-15-95; 8:45 am]
BILLING CODE 6712-01-M