[Federal Register Volume 65, Number 3 (Wednesday, January 5, 2000)]
[Rules and Regulations]
[Pages 375-377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-110]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 96-46; FCC 99-341]
Implementation of Section 302 of the Telecommunications Act of
1996: Open Video Systems
AGENCY: Federal Communications Commission.
ACTION: Final rule; order on remand.
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SUMMARY: This document amends various Commission rules in connection
with the open video system proceeding as a result of rulings in the
United States Court of Appeals Fifth Circuit case, City of Dallas,
Texas v. FCC. The Fifth Circuit considered consolidated appeals of the
Commission's open video system rules, affirming in part, reversing in
part, and remanding in part, those rules to meet the needs of consumers
and competitive entities.
DATES: Effective January 5, 2000.
FOR FURTHER INFORMATION CONTACT: Steve Broeckaert at (202) 418-7200 or
via internet at [email protected].
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Order
on Remand, CS Docket No. 96-46, FCC 99-341, adopted November 9, 1999
and released November 19, 1999. The Commission adopted proposed rules
on Open Video Systems in Notice of Proposed Rule Making, 61 FR 10496
(1996). The complete text of this Order on Remand is available for
inspection and copying during normal business hours in the FCC
Reference Center (Room CY-A257) at its headquarters, 445 12th Street,
SW Washington, D.C. 20554, or may be purchased from the Commission's
copy contractor, International Transcription Service, Inc., (202) 857-
3800, 1231 20th Street, NW, Washington, D.C. 20036, or may be reviewed
via internet at http://www.fcc.gov/csb/.
Synopsis of Order on Remand
I. Introduction and Background
1. In this Order on Remand, the Commission amends its rules in
accordance with the Fifth Circuit's decision in City of Dallas, Texas
v. FCC which reviewed consolidated appeals of the Commission's open
video system rules. The Telecommunications Act of 1996 (``1996 Act'')
added section 653 to the Communications Act of 1934, establishing open
video systems as a framework for entry into the video programming
marketplace. The Commission adopted a series of orders prescribing
rules and policies governing the establishment and operation of open
video systems. Among the decisions reached in rulemakings implementing
the open video system provision of the 1996 Act, the Commission
concluded that Congress did not intend to restrict open video system
service to telephone companies alone, and permitted non-local exchange
carriers and cable operators to operate, and to obtain carriage on open
video systems where consistent with the public interest, convenience,
and necessity.
2. Five petitions were filed with the Fifth Circuit and the
challenges fell into three separate categories: (i) National
Association of Telecommunications Advisors and Officers, the City of
Dallas, and the U.S. Conference of Mayors challenged the impact of the
Commission's open video system rules on local governments; (ii)
National Cable Television Association challenged the treatment of cable
operators under the video system rules; and (iii) BellSouth challenged
the requirement that open video system operators obtain Commission
certification before commencing construction related to open video
systems.
3. The Fifth Circuit affirmed the Commission's rules: (i) limiting
the fees that localities may charge to open video system operators
pursuant to section 653(c)(2)(B) of the Communications Act; (ii)
prohibiting localities from requiring open video systems to provide
institutional networks; and (iii) prohibiting non-local exchange
carrier cable operators and cable operators whose franchises have
expired from becoming open video system operators
[[Page 376]]
unless they face effective competition. Key provisions of the
Commission's open video system rules, however, were reversed and
remanded by the Fifth Circuit, requiring amendment of those rule
provisions by the Commission. The following outlines the changes.
II. Key Changes
4. Preemption of Open Video System Franchises. Section 653(c)(1)(C)
of the Communications Act provides that Parts III and IV of Title VI
shall not apply to open video system operators. Included in Title VI is
section 621(b)(1), which provides that a cable operator may not provide
cable service without a franchise. The Commission concluded, in
Implementation of Section 302 of the Telecommunications Act of 1996:
Open Video Systems, (``Second Report and Order''), FCC-96-249, 11 FCC
Rcd 18223 (1996) that localities are prohibited from requiring that
open video system operators obtain a franchise prior to construction
and operation of its system.
5. The Fifth Circuit concluded that the Commission's preemption of
local franchising requirements is at odds with the 1996 Act's
preservation of state and local authority. However, the Court ruled
that simply saying that section 621 shall not apply to open video
system operators does not expressly preempt local franchising
authority, as section 601(c)(1) of the 1996 Act directs that amendments
shall not be construed to modify, impair, or supercede Federal, State
or local law unless expressly so provided in such Act or amendments.
6. While discussed in detail by the Court, the franchise
prohibition had not been codified and the Commission had implemented no
rules. Consequently, in this Order on Remand the Commission need not
amend its rules to effectuate the Fifth Circuit's decision on this
matter. The decision to impose a franchise requirement on an open video
system operator is left to the discretion of a locality.
7. Commission Certification Prior to Construction of New
Facilities. In the Second Report and Order, the Commission stated that
open video system operators may apply for certification at any time
before commencement of service. If construction of a new plant is
required, however, the applicant must obtain Commission approval of its
certification prior to commencement of construction. Bell South argued
to the Fifth Circuit that the Commission's pre-construction
certification requirement was contrary to language of sections 651 and
653 of the Communications Act. The Fifth Circuit agreed, finding that
the Commission erred in adopting a pre-construction certification rule.
8. The Commission codified the pre-construction requirement at
Sec. 76.1502(a) of its rules. As a result of the Fifth Circuit's
decision, the Commission deletes the pre-construction certification
requirement from Sec. 76.1502(a) of the Commission's Rules.
9. Local Exchange Carriers as Cable Operators. Section 653(a)(1)
states that a local exchange carrier (``LEC'') may provide cable
service to subscribers in its telephone service area through an open
video system. In adopting rules to effectuate this provision the
Commission determined that it would not permit a cable operator to
become an open video system operator in its cable franchise area if
effective competition is not present for video programming delivery,
even if it also becomes certified as a local exchange carrier within
the franchise area. The Commission concluded that although section
653(a) allows LECs, without qualification, to operate open video
systems within their telephone service area, it does not apply to cable
operators that are also LECs. The Commission codified this provision at
Sec. 76.1501 of its rules.
10. The Fifth Circuit disagreed with the Commission's
determination, as it applied to LEC cable operators, holding that a
local exchange carrier, without qualification, may provide cable
service in its telephone area through an open video system. In
accordance with the Fifth Circuit's decision, the Commission amends
Sec. 76.1501 to provide that the effective competition requirement does
not apply to a LEC cable operator that seeks open video system
certification within its cable service area.
11. Open Video System Operator Discretion. In the Second Report and
Order, the Commission granted open video system operators discretion to
permit carriage of competing, in-region cable operators or their
affiliates' programming. This provision was codified in
Sec. 76.1503(c)(2)(v)(A) of the Commission's rules. The Fifth Circuit
invalidated the Commission's rules permitting an open video system
operator discretion to permit carriage of a competing, in-region cable
operator's programming, finding that section 653(b)(1)(A) requires the
Commission to prohibit an operator of an open video system from
discriminating among video programming providers with regard to
carriage on its open video system. The Fifth Circuit instructed the
Commission, on remand, to forbid discrimination among video programming
providers, as section 653(b)(1)(A) requires. In this Order on Remand,
the Commission concludes that the most efficient and expeditious method
of discharging the Fifth Circuit's remand is to delete
Sec. 76.1503(c)(2)(v)(A) of the Commission's rules which grants
discretion to open video system operators with regard to carriage of
the programming of competing, in-region cable operators and their
affiliates.
III. Ordering Clauses
12. Pursuant to sections 4(i), 303(r) and 653 of the Communications
Act of 1934, as amended, 47 U.S.C. 154(i), 303(r), and 573, the
Commission's rules are hereby amended.
13. The Commission's Office of Public Affairs, Reference Operation
Division, shall send a copy of this Order on Remand including the
Supplemental Final Regulatory Flexibility Analysis, to the Chief
Counsel for Advocacy of Small Business Administration, in accordance
with paragraph section 603(a) of this Regulatory Flexibility Act.
Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).
List of Subjects in 47 CFR Part 76
Open video system.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
For the reasons discussed in the preamble, The Federal
Communications Commission amends 47 CFR Part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
1. The authority citation for Part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556,
558, 560, 561, 571, 572, 573.
2. Section 76.1501 is revised to read as follows:
Sec. 76.1501 Qualifications to be an open video system operator.
Any person may obtain a certification to operate an open video
system pursuant to Section 653(a)(1) of the Communications Act, 47
U.S.C. 573(a)(1), except that an operator of a cable system may not
obtain such certification within its cable service area unless it is
subject to ``effective competition'' as defined in Section 623(l)(1) of
the Communications Act, 47 U.S.C. 543(l)(1). The effective competition
requirement of the preceding sentence does not apply to a local
exchange carrier that is also a cable operator that seeks open video
system certification within its cable
[[Page 377]]
service area. A cable operator that is not subject to effective
competition within its cable service area may file a petition with the
Commission, seeking a finding that particular circumstances exist that
make it consistent with the public interest, convenience, and necessity
to allow the operator to convert its cable system to an open video
system. Nothing herein shall be construed to affect the terms of any
franchising agreement or other contractual agreement.
3. Section 76.1502 is amended by revising paragraph (a) to read as
follows:
Sec. 76.1502 Certification.
(a) An operator of an open video system must certify to the
Commission that it will comply with the Commission's regulations in 47
CFR 76.1503, 76.1504, 76.1506(m), 76.1508, 76.1509, and 76.1513. The
Commission must approve such certification prior to the commencement of
service at such a point in time that would allow the applicant
sufficient time to comply with the Commission's notification
requirements.
* * * * *
4. Section 76.1503 is amended by revising paragraph (c)(2)(v) to
read as follows:
Sec. 76.1503 Carriage of video programming providers on open video
systems.
* * * * *
(c) * * *
(2) * * *
(v) Notwithstanding the general prohibition on an open video system
operator's discrimination among video programming providers contained
in paragraph (a) of this section, a competing, in-region cable operator
or its affiliate(s) that offer cable service to subscribers located in
the service area of an open video system shall not be entitled to
obtain capacity on such open video system, except where a showing is
made that facilities-based competition will not be significantly
impeded.
* * * * *
[FR Doc. 00-110 Filed 1-4-00; 8:45 am]
BILLING CODE 6712-01-P