[Federal Register Volume 61, Number 73 (Monday, April 15, 1996)]
[Rules and Regulations]
[Pages 16396-16401]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-9194]



=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 9660; FCC 96122]


Cable Television Leased Commercial Access

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Commission has adopted an Order on Reconsideration of the 
First Report and Order and Further Notice of Proposed Rulemaking 
regarding implementation of the leased commercial access provisions of 
the 1992 Cable Act. The Further Notice of Proposed Rulemaking segment 
of this decision may be found elsewhere in this issue of the Federal 
Register. The Order on Reconsideration (``Order'') segment addresses 
several issues regarding leased commercial access, including the 
highest implicit fee formula, the provision of rate information, part-
time rates, time increments, billing and collection services, security 
deposits, the calculation of statutory set-aside requirements, and 
reporting requirements. The Order is intended to respond to certain 
petitions for reconsideration of the Commission's current leased access 
rules.

DATES: Rule changes become effective May 15, 1996, except for 
Sec. 76.970(e) which contains information collection requirements which 
are not effective until approved by the Office of Management and Budget 
(``OMB''). When approval is received, the agency will publish a 
document announcing the effective date. Written comments by the public 
on the proposed and/or modified information collections are due May 15, 
1996. Written comments must be submitted by OMB on the proposed and/or 
modified information collections on or before June 14, 1996.

ADDRESSES: Office of the Secretary, Federal Communications Commission, 
1919 M Street, N.W., Washington, D.C. 20554. A copy of any comments on 
the information collections contained herein should be submitted to 
Dorothy Conway, Federal Communications Commission, Room 234, 1919 M 
Street, N.W., Washington, DC 20554, or via the Internet to 
[email protected], and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 
725--17th Street, N.W., Washington, DC 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: Lynn Crakes, Cable Services Bureau, 
(202) 416-0800. For additional information concerning the information 
collections contained in this Order, contact Dorothy Conway at (202) 
418-0217, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Order 
on Reconsideration of the First Report and Order, CS Docket 96-60 
(formerly MM Docket 92-266), adopted March 21, 1996 and released March 
29, 1996. The full text of this decision is available for inspection 
and copying during normal business hours in the FCC Reference Center 
(Room 239), 1919 M Street, N.W., Washington, D.C. 20554, and may be 
purchased from the Commission's copy contractor, International 
Transcription Services, Inc., (202) 857-3800, 1919 M Street, N.W., 
Washington, D.C. 20554.

Synopsis of the Order on Reconsideration

I. Introduction

    1. In the Order, the Commission addressed ten petitions for 
reconsideration of the cable television commercial leased access rules 
adopted in its Report and Order and Further Notice of Proposed Rule 
Making, MM Docket No. 92-266, FCC 93-177, 58 FR 29736 (May 21, 1993) 
(``Rate Order''),

[[Page 16397]]

pursuant to the provisions of the Cable Television Consumer Protection 
and Competition Act of 1992, Public Law No. 102-385, 106 Stat. 1460 
(1992), 47 U.S.C. 521, et seq. (1992) (``1992 Cable Act''). The Order 
was adopted in conjunction with a Further Notice of Proposed Rule 
Making (``Further Notice'') that sought comment on certain leased 
access issues not resolved by the Order.
    2. The statutory framework for commercial leased access was 
established by the Cable Communications Policy Act of 1984, Public Law 
No. 98-549, 98 Stat. 2779 (1984), 47 U.S.C. 521 et seq. (``1984 Cable 
Act'') and amended by the 1992 Cable Act. The 1984 Cable Act 
established commercial leased access to assure access to the channel 
capacity of cable systems by parties unaffiliated with the cable 
operator that wish to distribute video programming free of the 
editorial control of the cable operator. Channel set-aside requirements 
were established in proportion to a system's total activated channel 
capacity.
    3. In the Rate Order in this docket, the Commission established 
initial regulations to implement the leased access provisions of the 
1992 Cable Act. The Commission adopted the highest implicit fee formula 
as the method to set maximum reasonable rates, and adopted various 
standards governing access terms and conditions, tier placement, 
technical standards for use, technical support, security deposits, 
conditions based on program content, requirements for billing and 
collection service, and procedures for the expedited resolution of 
disputes. The Order further addresses several of these issues.

II. Maximum Rate Formula

    4. Background: Section 612 of the Communications Act of 1934, as 
amended, (``Communications Act'') section 612, 47 U.S.C. section 532, 
directs the Commission to determine the maximum reasonable rates that a 
cable operator may impose for leased commercial access. Previously, the 
Commission adopted rules that base the maximum rate on an ``implicit'' 
fee paid by non-leased access program services that are being 
distributed. In the non-leased access context, cable system operators 
generally receive a payment from subscribers and pay contractual 
license fees to programmers for the channels the operators distribute. 
The differences between these dollar amounts may be thought of as the 
implicit fees that the programmers pay to have their services 
distributed to subscribers. The Commission determined that the implicit 
fee is the price per channel each subscriber pays the operator minus 
the amount per subscriber the operator pays the programmer. Section 
76.970(c) of the Commission's rules provides that this difference is 
multiplied by the percentage of subscribers able to receive the 
unaffiliated programmer's service. The implicit fee for a contracted 
service may not include fees, stated or implied, for services other 
than the provision of channel capacity (e.g., billing and collection, 
marketing, or studio services). Section 76.970(d) of the rules states 
that maximum rates for shorter periods of time can be calculated by 
prorating the monthly maximum rate.
    5. Under our current rules, the maximum rate is the highest of the 
implicit fees charged any unaffiliated programmer within the same 
programmer category. Cable operators are required to calculate the 
highest implicit fee for each of the following programmer categories: 
(a) Those charging subscribers directly on a per-event or per-channel 
basis; (b) those using a channel for more than 50 percent of the time 
to sell products directly to customers (e.g., home shopping networks, 
infomercials, etc.); and (c) all others. Under the rules, cable 
operators are required to calculate annually the maximum rates for each 
programmer category based on the contracts with unaffiliated 
programmers in effect in the previous calendar year. Operators are 
further required to provide rate schedules to prospective programmers 
upon request.
    6. Clarifications for Calculating the Highest Implicit Fee: Through 
the Commission's complaint process as well as this reconsideration 
proceeding, it has come to the Commission's attention that the highest 
implicit fee formula may be unclear in some respects. Although the 
Further Notice proposes an alternative formula for determining maximum 
leased access rates, the highest implicit fee formula will continue to 
be in effect on an interim basis until any new rules become effective. 
The Order therefore clarified certain issues regarding the application 
of the highest implicit fee formula. We do not, however, believe that 
these clarifications will in any way solve the conceptual problems we 
perceive to be present with the highest implicit fee, as described in 
the Further Notice.
    7. As a preliminary matter, we modified Section 76.970(c) to 
correct certain errors contained therein so that the calculation of the 
implicit fee is clear and easy to follow. Specifically, the rule states 
that the subscriber revenue is deducted from the program license fee 
when, in fact, the program license fee is supposed to be deducted from 
the average subscriber revenue. We therefore corrected the language in 
the rule accordingly. We also corrected the title of Section 76.977 of 
the Commission's rules.
    8. In addition, we believe that the highest implicit fee 
calculation should not include the implicit fee for non-retransmission 
consent broadcast signal and PEG access channels in determining which 
channel has the highest implicit fee. For the carriage of local ``must 
carry'' broadcast signals, cable operators typically collect a fee from 
subscribers, but pay no direct charge for the programming. Because 
there is no sharing of subscriber revenues between the system operator 
and the programmer, the channel appears to be the most highly valued, 
i.e., the programmer is willing to permit the cable operator to retain 
the entire value of the channel and so these channels are often the 
basis for the highest implicit fee calculation. Because of the 
mandatory carriage rules and the compulsory copyright licensing system, 
this does not seem to be a calculation that reflects a marketplace 
decision as to the value of the channel. Similarly, where an operator 
is required by the local franchising authority to carry PEG channels, 
the cable operator has not made a marketplace decision to carry the 
channels. Accordingly, we concluded that the implicit fee for each must 
carry broadcast signal channel and PEG access channel should not be 
considered for purposes of determining which implicit fee is the 
highest. These channels should, however, be used to determine the 
monthly average subscriber revenue per channel for all the channels on 
the tier.
    9. Furthermore, we believe that operators should calculate the 
highest implicit fees on a tier-by-tier basis; that is, if the leased 
access channel is to be on the BST, the calculation of the highest 
implicit fee should be based on the BST channels, and, if the leased 
access channel is to be on a CPST, the implicit fees should be 
determined for the channels on that CPST.
    10. We also clarified that programming revenues received by the 
operator from an unaffiliated programmer, as opposed to programming 
costs paid by the operator to the unaffiliated programmer, should not 
be included in the highest implicit fee calculation. In certain 
circumstances, such as with direct sales or ``home shopping'' channels, 
the programmer pays the cable operator a percentage of its revenues, 
rather than the operator paying the programmer a license fee. We 
concluded that these

[[Page 16398]]

payments from the programmer to the operator should not be added into 
the implicit fee calculation.
    11. The Rate Order specifies that the difference between the rate 
per month that the cable operator pays the programmer and the rate that 
the subscriber pays per month for the programming should be multiplied 
by the percentage of subscribers able to receive that channel or 
programming. Neither the Rate Order nor our current rule explicitly 
states that this number must then be multiplied by the number of 
subscribers on the system. We modified our rule to clarify that, for 
leased access programming on either the BST or a CPST, the highest per-
subscriber implicit fee should be multiplied by the number of current 
subscribers who actually subscribe to the tier on which the leased 
access channel will be placed. However, for leased access programming 
in the per-channel/per-event program category, the highest per-
subscriber implicit fee should be multiplied by the average number of 
subscribers that subscribe to the operator's premium services. 
Requiring the highest per-subscriber implicit fee to be multiplied by 
the actual number of subscribers to a leased access premium service 
would unfairly penalize the operator for low subscribership to the 
leased access programming. Using the average number of subscribers that 
subscribe to the operator's premium services derives an approximation 
that is equally fair for both the operator and the leased access 
programmer.
    12. Provision of Rate Information: Section 76.970(e) of the 
Commission's rules provides that a schedule of commercial leased access 
rates shall be provided to prospective leased access programmers upon 
request. Our leased access complaint process has revealed that rate 
information is often not provided in a timely manner. We therefore 
modified our rule to require an operator to provide to a prospective 
leased access programmer within seven business days of such 
programmer's request: (a) A complete schedule of the operator's full 
and part time leased access rates; (b) how much of its set-aside 
capacity is available; (c) rates associated with technical and studio 
costs; and (d) if specifically requested, a sample leased access 
contract. Requests can be made by any reasonable means (in person, by 
telephone, by facsimile, or by mail), and the information will be 
deemed provided when the operator sends or gives the information to the 
programmer. Because this information must be provided within seven 
business days of the request, operators may not require that 
prospective programmers first provide any information (e.g., fill out 
an application) before the information listed above is provided. In 
this context, we affirmed that, as stated in the Rate Order, the 
Commission has the authority to, among other things, issue forfeitures 
for violations of the leased access statute and rules. Failure to 
provide the above information within the seven business day period will 
constitute a violation of our rules.

III. Part-Time Rates

    13. The Rate Order stated that maximum rates for leasing less than 
a full-time channel could be calculated by prorating the monthly 
maximum rate. The Rate Order did not, however, address whether 
operators would be permitted to charge higher rates for part-time use 
during more desirable ``prime time'' viewing hours. In TV-24 Sarasota, 
Inc. v. Comcast Cablevision of West Florida, Inc., 10 FCC Rcd 3512 
(Cable Serv. Bur. 1994), the Cable Services Bureau stated that such 
time of day pricing is permitted.
    14. The only restriction on cable operators' rates under the 
current rules is that they may not exceed the maximum monthly rate as 
calculated on a monthly basis from the highest implicit fee. We 
recognize, however, that the media industry places different values on 
the different hours of the day in recognition of the different values 
that different hours of the day have in the television marketplace 
(i.e., ``prime time'' and ``non-prime time''). We therefore affirmed 
the Cable Services Bureau's ruling in the TV-24 Sarasota case 
referenced above and did not construe our rule as requiring a cable 
operator to adhere to a rigid formula for determining its hourly leased 
access rate by prorating its maximum rate for a full-time channel into 
equal hourly amounts. We concluded that cable operators may charge 
different time-of-day rates, provided that the total of the rates for a 
day's schedule (i.e., a 24 hour block) does not exceed the maximum rate 
for one day of a full-time leased channel (prorated from the monthly 
rate) and provided that the overall pattern of time of day rates is 
otherwise reasonable and not intended to unreasonably limit leased 
access use. A reasonable time-of-day rate structure that is 
appropriately related to time-of-day pricing in the media industry and 
does not frustrate leased access channel use would not conflict with 
our rules.
    15. Accordingly, the rules we adopted on reconsideration provide 
that operators may establish reasonable time-of-day pricing schedules. 
In order to ensure that operators' part-time rates do not exceed the 
maximum rate, we required operators to establish a schedule of rates, 
or rate card, for different times of day, pursuant to which, if all 
times were used, the sum of the part-time charges for any single leased 
access channel within a 24-hour period would not exceed its maximum 
rate for the leased access channel if the daily rate were prorated 
evenly from the monthly maximum rate and were calculated in accordance 
with Section 76.970 of our rules.

IV. Time Increments

    16. In the Rate Order, we concluded that cable operators should be 
required to accommodate leases of any time increment (e.g., leasing an 
hour on a regular leased channel, leasing a whole channel, or leasing 
for use a subscription service) in a reasonable manner because neither 
Section 612, its legislative history nor the record indicated any 
reason to prevent part-time leased access. On reconsideration, we 
reaffirmed our conclusion that cable operators should be required to 
accommodate both full and part-time leases. We recognize the legitimate 
concern of cable operators that negotiating contracts for numerous 
small time intervals may be an administrative and financial burden. As 
a practical matter, however, the most common programming time increment 
is typically one half to one hour. Imposing a full-time only 
requirement could effectively preclude most leased access programmers 
from obtaining access. Thus, in order to balance these competing 
interests, we concluded that operators should not be required to accept 
leases which are for less than a one-half hour interval. This decision 
will allow programmers to lease time in relatively small increments, 
but will avoid the administrative burden of providing leased access in 
very small increments, such as one or two minutes. Although not 
required to do so, operators may accept requests for less than one-half 
hour.

V. Billing and Collection Services

    17. Section 612(c)(4)(A)(ii) of the Communications Act requires the 
Commission to establish reasonable terms and conditions for billing of 
rates to subscribers and for the collection of revenue from subscribers 
for leased access channels (not including subscriber revenue generated 
from the sale of products promoted on leased access programs such as 
home shopping programs or infomercials). In the Rate Order, we required 
cable operators to provide billing and collection services

[[Page 16399]]

to leased access programmers unless operators could demonstrate the 
existence of third party billing and collection services which, in 
terms of cost and accessibility, offer leased access programmers an 
alternative substantially equivalent to that offered to comparable non-
leased access programmers. We noted in the Order that the mere 
existence of third party billing and collection providers does not 
relieve the operator of its obligation to provide these services. 
Rather, the critical issue is whether, in terms of cost and 
accessibility, these alternatives are substantially equivalent, to what 
the operator offers non-leased access programmers. Operators have not 
demonstrated to us that such alternatives exist to such an extent that 
we should change our requirements adopted in the Rate Order. We remain 
convinced, therefore, that pursuant to Section 612(c)(4)(A)(ii), we 
have the authority to require cable operators to provide billing and 
collection services for leased access cable programmers and that there 
is a need for cable operators to provide such services.
    18. In the Rate Order, we did not adopt specific rules relating to 
the rates that might be charged for billing and/or collection services. 
We stated that competition, where it exists, in the provision of 
services of this type will set an upper limit on charges by cable 
operators. On reconsideration, we did not believe that the adoption of 
specific rate rules at this time is warranted. Cable operators should 
have the incentive to quote reasonable and competitive rates in order 
to obtain the additional revenues that billing and collection services 
could generate for them. As we stated in the Rate Order, if a dispute 
arises, we will address what constitutes a maximum rate for billing and 
collection services on a case-by-case basis.

VI. Security Deposits

    19. In the Rate Order, we agreed with cable operators that they 
should have discretion to require reasonable security deposits or other 
assurances from programmers that are unable to prepay in full for 
leased access channel capacity. On reconsideration, we declined to set 
specific monetary guidelines in this area and concluded that it is 
sufficient to state that the term ``reasonable'' should be interpreted 
in relation to the objective of such a deposit. That is, it should be 
sufficient to insure the payment of lease rates, without discouraging 
leased access. We clarified that operators may not demand a security 
deposit for channel time from a programmer that pays the full rate in 
advance. If carriage is not purchased for discreet or individual time 
spots, but is leased on a full-time or periodic basis, the full rate 
will be considered the full monthly rate (or whatever period of time is 
relevant if the programming is periodic). Determinations of what is a 
``reasonable'' security deposit will be made on a case-by-case basis, 
taking into consideration the past relationship between the operator 
and the programmer, the amount of time to be leased, the credit history 
of the leased access programmer, the operator's practices with respect 
to security deposits in other, similar contexts, and any other relevant 
factors.

VII. Calculation of Statutory Set-Aside Requirements

    20. Section 612 of the Communications Act requires a cable system 
to set aside up to 15 percent of its activated channels for leased 
commercial access. The statutory set-aside requirements for leased 
commercial access channels are expressed as a percentage of ``channels 
not otherwise required for use by federal law or regulation.'' 47 
U.S.C. 532(b)(1). The Rate Order did not specify what channels are 
considered as required for use by federal law or regulation.
    21. We clarified that, for purposes of calculating the set-aside 
requirements, only must-carry channels are excluded, as these channels 
are required for use by federal law. Retransmission consent and PEG 
channels, on the other hand, are not required by federal law, although 
federal statutory provisions permit local authorities to require 
operators to provide PEG channels and also require operators to obtain 
retransmission consent in some cases. Therefore, we determined that 
retransmission consent and PEG channels will be included among 
activated channels for purposes of determining a systems' leased access 
set-aside requirements.

VIII. Reporting Requirements

    22. We did not require cable operators to make the contracts 
underlying their leased access rates public. We believe that this could 
be unnecessarily intrusive on business relationships between operators 
and non-leased access programmers. However, we noted that upon request 
from the Commission in the context of a leased access complaint, 
operators are required to justify fully their leased access rates, 
including by presentation of underlying contracts if necessary, subject 
to the operators' right under our rules to request confidentiality of 
this information.

IX. Regulatory Flexibility Analysis

    23. Pursuant to the Regulatory Flexibility Act of 1980, Public Law 
96-354, 94 Stat. 1164, 5 U.S.C. 601-612 (``Regulatory Flexibility 
Act''), the Commission's final analysis with respect to this Order on 
Reconsideration is as follows:
    24. Need and purpose of this action. The Commission, in compliance 
with Section 9 of the Cable Television Consumer Protection and 
Competition Act of 1992, 47 U.S.C. 532 (1992), pertaining to leased 
commercial access, is required to adopt rules and procedures intended 
to ensure the availability of and accessibility to leased commercial 
access on cable systems.
    25. Summary of issues raised by the public in response to the 
Initial Regulatory Flexibility Analysis. There were no comments 
submitted in response to the Initial Regulatory Flexibility Analysis.
    26. Significant alternatives considered and rejected. Petitioners 
for reconsideration did not submit comments analyzing the 
administrative burden of the leased access rules pursuant to the 
Regulatory Flexibility Act. The Commission nonetheless has attempted to 
minimize such burdens.

X. Procedural Provisions

    27. Redesignation of Docket. We believe that it would facilitate 
consideration of leased commercial access issues by the Commission if 
they were separated from MM Docket 92-266 and redesignated as a 
separate docket. Accordingly, we are redesignating the Commission's 
consideration of leased commercial access issues as CS Docket No. 96-
60. Parties are required to caption filings in response to this Order 
under this new docket number.

XI. Ordering Clauses

    28. Accordingly, It is ordered that the Petitions for 
Reconsideration in MM Docket No. 92-266 which pertain to commercial 
leased access are granted in part and denied in part.
    29. It is further ordered that Part 76 of the Commission's rules is 
hereby amended as indicated below. The amendments to 47 CFR 76.970 (a), 
(b), (c), (d), 76.971(g) and 76.977 shall go into effect 30 days 
following publication of this Order on Reconsideration in the Federal 
Register. The amendments to 47 CFR 76.970(e) impose information 
collections, and will therefore not go into effect until approved by 
OMB.

Paperwork Reduction Act

    This Order contains either a proposed or modified information 
collection. The Commission, as part of its continuing

[[Page 16400]]

effort to reduce paperwork burdens, invites the general public and OMB 
to comment on the information collections contained in this Order, as 
required by the Paperwork Reduction Act of 1995, Public Law 104-13. 
Public and agency comments are due May 15, 1996; OMB notification of 
action is due 60 days from date of publication of this Order in the 
Federal Register. Comments should address: (a) whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
burden estimates; (c) ways to enhance the quality, utility, and clarity 
of the information collected; and (d) ways to minimize the burden of 
the collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.
    OMB Approval Number: 3060-0568.
    Title: Section 76.970 Commercial leaesed access rates; 76.971 
Commercial leased access terms and conditions.
    Type of Review: Revision of existing collection.
    Respondents: Business and other for profit.
    Number of Respondents: 6,270 cable systems.
    Estimated Time Per Response: 1 hour per respondent for 
recordkeeping and sending the leased access schedule and other 
information to prospective leased access programmers. 1 hour per 
respondent to implement 76.971 third party disclosure requirements. 12 
hours per respondent for completing the proposed ``cost schedule'', 
instead of the existing ``maximum rate schedule''. If the proposed 
``cost schedule'' is not adopted by the Commission, the burden for 
completing the ``maximum rate schedule'' is 4 hours per respondent.
    Total Annual Burden: 87,780 hours. If the proposed ``cost 
schedule'' is not adopted, the Commission will further adjust the 
burden for this collection from 12 hours per respondent in completing 
the ``cost schedule'' to 4 hours per respondent to continue to use the 
existing ``maximum rate schedule''. This would result in an adjustment 
reduction of 50,160 hours (6,270 x 8 hours), leaving a total burden of 
87,780-50,160=37,620 hours.
    Estimated costs per respondent: We estimate the postage and 
stationery costs incurred by cable operators for record keeping 
activities and for sending out leased access information to prospective 
programmers, as required, to be roughly $4.00 per respondent. We 
therefore report a total annual cost of $25,000 for all respondents.
    Needs and Uses: The information collected is used by the 
prospective leased access programmers and the Commission to verify rate 
calculations for leased access channels. The Commission's leased access 
requirements were designed to promote diversity of programming sources 
and competition in programming delivery as required by Section 612 of 
the Communications Act, and serve to eliminate uncertainty in 
negotiations for leased commercial access.

List of Subjects in 47 CFR Part 76

    Cable television.

Federal Communications Commission.
William F. Caton,
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, 535, 542, 
543, 552, as amended, 106 Stat. 1460.

    2. Section 76.970 is amended by revising paragraphs (a), (b), (c), 
(d), and (e) to read as follows:


Sec. 76.970  Commercial leased access rates.

    (a) Cable operators shall designate channel capacity for commercial 
use by persons unaffiliated with the operator in accordance with the 
requirement of 47 U.S.C. 532. For purposes of 47 U.S.C. 532(b)(1)(A) 
and (B), only those channels that must be carried pursuant to 47 U.S.C. 
534 and 535 qualify as channels that are required for use by Federal 
law or regulation.
    (b) The maximum commercial leased access rate that a cable operator 
may charge is the highest implicit fee charged any unaffiliated 
programmer (excluding leased access programmers, non-retransmission 
consent broadcasters and public, educational and governmental access 
programmers) within the same programming category.
    (c) The per subscriber implicit fee charged an unaffiliated 
programmer shall be calculated by determining the monthly price a 
subscriber pays to view the programming of the unaffiliated programmer 
and subtracting the monthly price per subscriber that the operator pays 
to carry the programming of the unaffiliated programmer. The implicit 
fee is determined by multiplying the per subscriber implicit fee by:
    (1) If the leased access programming is carried on a programming 
tier, the number of subscribers that subscribe to the programming tier 
on which the leased access programming is carried; or
    (2) If the leased access programming is carried as a premium 
service, the average number of subscribers that subscribe to 
unaffiliated non-leased access programming services that are carried as 
premium services. The implicit fee for a contracted service may not 
include fees, stated or implied, for services other than the provision 
of channel capacity (e.g., billing and collection, marketing, or studio 
services).
    (d) For each of the three programming categories as defined in 
paragraph (f) of this section, the highest implicit fee charged any 
unaffiliated programmer (excluding leased access programmers, non-
retransmission consent broadcasters and public, educational and 
governmental access programmers) in each category shall be the maximum 
monthly leased access rate per subscriber that the operator could 
charge a commercial leased access programmer in the same category. The 
highest implicit fee shall be based on contracts in effect in the 
previous calendar year. Maximum rates for shorter periods can be 
calculated either by prorating the monthly maximum rate uniformly, or 
by developing a schedule of and applying different rates for different 
times of day, provided that the total of the rates for a 24-hour period 
does not exceed the maximum rate for one day of a full-time leased 
access channel (prorated evenly from the monthly rate derived in 
accordance with paragraphs (b), (c), and (d) of this section).
    (e) Within seven business days of a prospective leased access 
programmer's request, a cable system operator must provide such 
programmer with the following information:
    (1) A complete schedule of the operator's full-time and part-time 
leased access rates;
    (2) How much of the operator's leased access set-aside capacity is 
available;
    (3) Rates associated with technical and studio costs; and
    (4) If specifically requested, a sample leased access contract. 
Requests under this paragraph (e) may be made by any reasonable means 
(e.g., in person, by telephone, by facsimile or by mail), and the 
information shall be deemed provided when the operator sends or gives 
the information to the programmer. Operators shall maintain,

[[Page 16401]]

for Commission inspections, sufficient supporting documentation to 
justify the scheduled rates, including supporting contracts, 
calculations of the implicit fees, and justifications for all 
adjustments.
* * * * *
    3. Section 76.971 is amended by adding new paragraph (g) to read as 
follows:


Sec. 76.971  Commercial leased access terms and conditions.

* * * * *
    (g) Operators are not required to accept leases which are for less 
than a one-half hour interval.
    4. Section 76.977 is amended by revising the heading to read as 
follows:


Sec. 76.977  Minority and educational programming used in lieu of 
designated commercial leased access capacity.

* * * * *
[FR Doc. 96-9194 Filed 4-12-96; 8:45 am]
BILLING CODE 6712-01-P