[Federal Register Volume 65, Number 57 (Thursday, March 23, 2000)]
[Rules and Regulations]
[Pages 15559-15576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7163]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 99-363; FCC 00-99]


Implementation of the Satellite Home Viewer Improvement Act of 
1999, Retransmission Consent Issues: Good Faith Negotiation and 
Exclusivity

AGENCY: Federal Communications Commission.

ACTION: Final rule; procedures.

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SUMMARY: This document implements aspects of the Satellite Home Viewer 
Improvement Act of 1999, enacted on November 29, 1999, and adopts 
regulations and procedures governing the negotiation of agreements in 
connection with the retransmission of television broadcast station 
signals by multichannel video programming distributors (``MVPDs''), 
including satellite carriers and cable systems. It establishes the 
standards for implementing a good faith negotiation requirement of 
broadcasters to MVPDs to ensure that negotiations are conducted in an 
atmosphere of honesty, purpose and clarity of process. This proceeding 
also adopts implementing rules and provides clarification regarding the 
prohibition against exclusive retransmission consent agreements. In 
addition, this document provides that voluntary mediation is an option 
that can be utilized by parties in protracted negotiations to aid in 
facilitating retransmission consent. We also establish that existing 
Commission complaint procedures provide an appropriate framework for 
parties alleging violations of the good faith negotiation requirement 
and the prohibition against exclusive agreements. Pursuant to the 
provisions of section 325(b)(3)(C) of the Communications Act, this 
document also concludes that the prohibitions on exclusive 
retransmission consent agreements and the good faith negotiation 
requirement terminate on January 1, 2006.

DATES: Effective March 23, 2000.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW,

[[Page 15560]]

Washington, DC 20554. In addition to filing comments with the 
Secretary, a copy of any comments on the information collections 
contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 1-C804, 12th Street, SW, Washington DC 
20554, or via the Internet at [email protected].

FOR FURTHER INFORMATION CONTACT: Steve Broeckaert at (202) 418-7200 or 
via internet at [email protected]. For additional information concerning 
the information collection(s) contained in this document, contact Judy 
Boley at (202) 418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's First 
Report and Order, FCC 00-99, adopted March 14, 2000; released March 16, 
2000. The full text of the Commission's First Report and Order 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 DC 20554, or may be purchased from the 
Commission's copy contractor, International Transcription Service, 
Inc., (202) 857-3800, 1231 20th Street, NW, Washington, DC 20036, or 
may be reviewed via Internet at http://www.fcc.gov/csb/.

Synopsis of the First Report and Order

I. Introduction

    1. In this First Report and Order (``Order''), we adopt rules 
implementing certain aspects of the Satellite Home Viewer Improvement 
Act of 1999 (``SHVIA''). SHVIA authorizes satellite carriers to add 
more local and national broadcast programming to their offerings, and 
to make that programming available to subscribers who previously have 
been prohibited from receiving broadcast fare via satellite under 
compulsory licensing provisions of the copyright law. The legislation 
generally seeks to place satellite carriers on an equal footing with 
local cable operators when it comes to the availability of broadcast 
programming, and thus give consumers more and better choices in 
selecting a multichannel video program distributor (``MVPD'').
    2. Among other things, section 325(b)(3)(C) of the Communications 
Act requires satellite carriers to obtain retransmission consent for 
the local broadcast signals they carry, requires broadcasters, until 
2006, to negotiate in good faith with satellite carriers and other 
MVPDs with respect to their retransmission of the broadcasters' 
signals, and prohibits broadcasters from entering into exclusive 
retransmission consent agreements. Section 325(b)(3)(C) required the 
Commission to commence a rulemaking within 45 days of the enactment of 
SHVIA and to complete all actions necessary to prescribe regulations 
within 1 year after such date of enactment. The Commission issued a 
Notice of Proposed Rulemaking (``Notice'') on December 22, 1999 (64 FR 
72985). The Commission received numerous comments and reply comments to 
the Notice. We conclude the good faith negotiation and exclusivity 
portion of this rulemaking well ahead of our statutory deadlines for 
doing so because of the importance of implementing these provisions to 
MVPD competition and the growth of satellite service.

II. Background

    3. In 1988, Congress passed the Satellite Home Viewer Act (``1988 
SHVA'') in order to provide people in unserved areas of the country 
with access to broadcast programming via satellite. The 1988 SHVA 
enabled satellite carriers to provide broadcast programming to those 
satellite subscribers who were unable to obtain broadcast network 
programming over-the-air. As a general matter, however, the 1988 SHVA 
did not permit satellite carriers to retransmit local broadcast 
television signals directly to consumers.
    4. The Cable Television Consumer Protection and Competition Act of 
1992 (``1992 Cable Act'') amended the Communications Act, inter alia, 
to include section 325, which provides television stations with certain 
carriage rights on local market cable television systems. Within local 
market areas, commercial television stations may elect cable carriage 
under either the retransmission consent or mandatory carriage 
requirements. Section 325 as initially enacted contained no standards 
pursuant to which broadcasters were required to negotiate with MVPDs. 
The Commission established rules related to the retransmission/
mandatory carriage election cycle, but did not adopt rules governing 
the negotiation process of retransmission consent.
    5. SHVIA revises the 1988 SHVA and reflects changes not only 
involving the satellite industry and subscribers, but television 
broadcast stations and terrestrial MVPDs. SHVIA adopts changes in 
several areas, including retransmission consent, must-carry, and 
retransmission of local broadcast signals. In particular, SHVIA 
addresses several limitations previously placed on satellite carriers, 
including the issue of satellite carrier retransmission of local 
broadcast programming.

III. Summary of Decision

    6. The Order determines that the statute does not intend to subject 
retransmission consent negotiation to detailed substantive oversight by 
the Commission. Instead, the order concludes that Congress intended 
that the Commission follow established precedent, particularly in the 
field of labor law, in implementing the good faith retransmission 
consent negotiation requirement. Consistent with this conclusion, the 
Order adopts a two-part test for good faith. The first part of the test 
consists of a brief, objective list of negotiation standards. First, a 
broadcaster may not refuse to negotiate with an MVPD regarding 
retransmission consent. Second, a broadcaster must appoint a 
negotiating representative with authority to bargain on retransmission 
consent issues. Third, a broadcaster must agree to meet at reasonable 
times and locations and cannot act in a manner that would unduly delay 
the course of negotiations. Fourth, a broadcaster may not put forth a 
single, unilateral proposal. Fifth, a broadcaster, in responding to an 
offer proposed by an MVPD, must provide considered reasons for 
rejecting any aspects of the MVPD's offer. Sixth, a broadcaster is 
prohibited from entering into an agreement with any party conditioned 
upon denying retransmission consent to any MVPD. Finally, a broadcaster 
must agree to execute a written retransmission consent agreement that 
sets forth the full agreement between the broadcaster and the MVPD.
    7. The second part of the good faith test is based on a totality of 
the circumstances standard. Under this standard, an MVPD may present 
facts to the Commission which, even though they do not allege a 
violation of the specific standards enumerated above, given the 
totality of the circumstances constitute a failure to negotiate in good 
faith.
    8. The Order concludes that it is not practicably possible to 
discern objective competitive marketplace factors that broadcasters 
must discover and base any negotiations and offers on, and that it is 
the retransmission consent negotiations that take place that are the 
market through which the relative benefits and costs to the broadcaster 
and MVPD are established. The Order provides examples of negotiation 
proposals that presumptively are consistent and inconsistent with 
``competitive marketplace considerations.'' At the same time, the Order 
provides that it is implicit in section 325(b)(3)(C) that any effort to 
further anti-competitive ends

[[Page 15561]]

through the negotiation process would not meet the good faith 
negotiation requirement. Considerations that are designed to frustrate 
the functioning of a competitive market are not ``competitive 
marketplace considerations.'' Conduct that is violative of national 
policies favoring competition--that is, for example, intended to gain 
or sustain a monopoly, is an agreement not to compete or to fix prices, 
or involves the exercise of market power in one market in order to 
foreclose competitors from participation in another market--is not 
within the competitive marketplace considerations standard included in 
the statute. The Commission's rules regarding the good faith 
negotiation requirement sunset on January 1, 2006.
    9. As for the prohibition on exclusivity, the Order interprets the 
phrase ``engaging in'' broadly. Thus, the Order would prohibit not only 
entering into exclusive retransmission consent agreements, but also 
negotiating exclusive agreements that would take effect after the 
sunset of the prohibition. The Commission's rules regarding exclusive 
retransmission consent agreements sunset on January 1, 2006.
    10. An MVPD believing itself to be aggrieved under section 
325(b)(3)(C) may file a complaint with the Commission. The Order 
provides that the procedural provisions of 47 CFR 76.7 will govern good 
faith and exclusivity complaints. The Order directs Commission staff to 
expedite resolution of good faith and exclusivity complaints. The Order 
provides that the burden of proof with regard to such complaints is on 
the MVPD complainant.

IV. Good Faith Negotiation Requirement

A. Congressional Intent in Amending Section 325 of the Communications 
Act

    11. In SHVIA, Congress amended section 325(b) of the Communications 
Act, requiring the Commission to revise its regulations so that they 
shall:

    * * * until January 1, 2006, prohibit a television broadcast 
station that provides retransmission consent from * * * failing to 
negotiate in good faith, and it shall not be a failure to negotiate in 
good faith if the television broadcast station enters into 
retransmission consent agreements containing different terms and 
conditions, including price terms, with different multichannel video 
programming distributors if such different terms and conditions are 
based on competitive marketplace considerations.

The Joint Explanatory Statement of the Committee of Conference 
(``Conference Report'') does not explain or clarify the statutory 
language, merely stating that:

    The regulations would, until January 1, 2006, prohibit a 
television broadcast station from * * * refusing to negotiate in 
good faith regarding retransmission consent agreements. A television 
station may generally offer different retransmission consent terms 
or conditions, including price terms, to different distributors. The 
[Commission] may determine that such different terms represent a 
failure to negotiate in good faith only if they are not based on 
competitive marketplace considerations.

The Notice sought comment on the correct interpretation of the good 
faith negotiation requirement of section 325(b)(3)(C).
    12. At the outset of our discussion, we note that section 
325(b)(2)(E) of the Communications Act grants satellite carriers a six-
month period during which they may retransmit the signals of local 
broadcasters without a broadcaster's express retransmission consent. As 
discussed in further detail below, section 325 also requires strict 
enforcement of, and severe penalties for, satellite carrier 
retransmission of local broadcast signals without consent after this 
six-month period expires. We have adopted these rules before the end of 
the six-month period provided by section 325(b)(2)(E) so that MVPDs, 
particularly satellite carriers, and broadcasters understand their 
rights and obligations under section 325(b)(3)(C) before that period 
expires. These rules will provide a framework under which broadcasters 
and satellite carriers can achieve retransmission consent before the 
expiration of the six-month period set forth in section 325(b)(2)(E) so 
as to avoid the highly undesirable interruption of local broadcast 
signals that satellite carriers have begun to provide to their 
subscribers in many cities across the nation. On an ongoing basis, we 
intend these rules to govern the negotiation of retransmission consent 
between broadcasters and all MVPDs.
    13. The statute does not appear to contemplate an intrusive role 
for the Commission with regard to retransmission consent. Section 
325(b)(3)(C) instructs the Commission to ``revise the regulations 
governing the exercise by television broadcast stations of the right to 
grant retransmission consent under this subsection. . . .'' The fact 
that Congress instructed the Commission to ``revise'' its existing 
retransmission consent regulations, coupled with the determinedly brief 
discussion of section 325(b)(3)(C) in the Conference Report, leads us 
to conclude that, in addition to the guidance that can be gleaned from 
SHVIA, we should also look for guidance in the legislative history of 
the retransmission consent provisions of the 1992 Cable Act. When 
Congress first applied retransmission consent to MVPDs in 1992, it 
stated that ``it is the Committee's intention to establish a 
marketplace for the disposition of the rights to retransmit broadcast 
signals; it is not the Committee's intention in this bill to dictate 
the outcome of the ensuing marketplace negotiations.''
    14. Based on this language, the Commission concluded in the 
Broadcast Signal Carriage Order that Congress did not intend that the 
Commission should intrude in the negotiation of retransmission consent. 
We do not interpret the good faith requirement of SHVIA to alter this 
settled course and require that the Commission assume a substantive 
role in the negotiation of the terms and conditions of retransmission 
consent. We note that Congress considered and explicitly rejected a 
comprehensive regime that required the Commission to:

    prohibit television broadcast stations that provide 
retransmission consent from engaging in discriminatory practices, 
understandings, arrangements, and activities, including exclusive 
contracts for carriage, that prevent a multichannel video 
programming distributor from obtaining retransmission consent from 
such stations.

Where Congress expressly considers and rejects such an approach, the 
rules of statutory construction do not favor interpreting a subsequent 
statutory provision to require the rejected alternative. Given the 
express congressional rejection of this anti-discrimination provision, 
we will not adopt rules to recreate this provision by regulation.
    15. In support of the position that intrusive Commission action is 
unnecessary to implement the good faith negotiation requirement, 
commenters point to the fact that thousands of retransmission consent 
agreements have been successfully concluded between local broadcasters 
and MVPDs since adoption of the 1992 Cable Act. In addition, commenters 
note that within days after enactment of SHVIA, DIRECTV and EchoStar 
announced that they had entered into retransmission consent agreements 
with the owned-and-operated affiliates of several of the major 
television networks. As a result, these commenters argue that it would 
be wholly inappropriate to impose ``shotgun wedding'' style regulations 
on a marketplace that is already functioning. DIRECTV, however, argues 
that the existence of

[[Page 15562]]

these agreements does not ensure that agreements that have yet to be 
completed will progress as smoothly.
    16. One commenter maintains that the purpose of the good faith 
requirement is merely to bring the parties to the bargaining table, 
stating that ``Congress signaled its desire only that broadcasters, 
having once made the decision to provide retransmission consent, should 
be required to negotiate with all interested MVPDs and not engage in an 
outright refusal to deal.'' Several broadcast commenters assert that 
Congress merely intended the Commission to revise its existing 
regulations to account for retransmission consent agreements between 
broadcasters and satellite carriers that now qualify for compulsory 
copyright license to provide local television stations to satellite 
subscribers.
    17. ALTV advises the Commission to focus on Congress' overarching 
purpose in enacting section 325 in the 1992 Cable Act--assuring 
broadcasters the opportunity to secure compensation for the value of 
the retransmission of their signals by MVPDs. Conversely, other 
commenters assert that Congress intended the Commission to begin with 
the premise that television broadcast programming is an indispensable 
component of any MVPD's service package and that alternative MVPDs 
cannot compete effectively with incumbent cable operators if they are 
denied full and fair access to that programming in local markets.
    18. We find instructive the legislative history of a previous 
version of SHVIA that was considered, but not enacted, by Congress. 
During the consideration of the House version of SHVIA, Representative 
Tauzin explained to Representative Dingell that the House bill, which 
included a detailed, anti-discrimination provision, would permit:

    [A] broadcast station * * * for example, [to] negotiate a cash 
payment from one video distributor for retransmission consent and 
reach an agreement with other distributors operating in the same 
market that contains different prices or other terms * * * [Indeed], 
as long as a station does not refuse to deal with any particular 
distributor, a station's insistence on different terms and 
conditions in retransmission agreements based on marketplace 
considerations is not intended to be prohibited by this bill * * * 
if a station negotiates in good faith with a distributor, the 
failure to reach an agreement with that distributor would not 
constitute a discriminatory act that is intended to be barred by 
this section.

In discussing this same previous version of SHVIA, Representative 
Berman echoed a similar sentiment stating ``[W]hile it is important 
that MVPDs have the opportunity to negotiate for retransmission 
consent, we do not in this bill subject the prices or other terms and 
conditions of nonexclusive retransmission consent agreements to 
[Commission] scrutiny.'' Again, these statements reflect consideration 
of the more onerous House version of SHVIA and its anti-discrimination 
requirement. We find it difficult to reconcile commenters arguments 
that SHVIA as enacted contains a broad grant of Commission authority to 
analyze and prohibit the substantive terms of retransmission consent 
with these statements.
    19. Commenters argue that the statutory imposition of a good faith 
negotiation requirement is in derogation of the long-standing common 
law right to contract and therefore the duty, though statutorily 
imposed, must be narrowly construed. Commenters assert that even a 
statutory duty to negotiate in good faith does not require parties to 
do anything contrary to their own self-interest or make any particular 
concessions. Accordingly, argues Disney, the Commission is not 
empowered to become involved in the substance of retransmission consent 
negotiations.
    20. We agree with those commenters that assert that section 
325(b)(3)(C) should be narrowly construed. As commenters indicate, 
congressional language in derogation of the common law should be 
interpreted to implement the express directives of Congress and no 
further. The United States Supreme Court has reiterated this rule of 
statutory construction on several occasions, holding that [s]tatutes 
which invade the common law* * * are to be read with a presumption 
favoring the retention of long-established and familiar principles, 
except when a statutory purpose to the contrary is evident.'' In 
addition, the Court has stated that, when a statutory provision does 
derogate from the common law, it ``must be strictly construed for no 
statute is to be construed as altering the common law, farther [sic] 
than its words import.''
    21. Commenters state that, in other contexts, the good faith 
standard has a well understood meaning that Congress must be presumed 
to have intended, particularly, where, as here, nothing in the statute 
or the legislative history suggests that Congress intended the 
Commission to develop its own definition of good faith. These 
commenters argue that SHVIA cannot be read to grant the Commission new, 
wholesale authority to define good faith or engage in a detailed case-
by-case review of the retransmission terms offered to one MVPD as 
compared to another. These commenters assert that the most appropriate 
statutory example to follow is that of the good faith requirement of 
section 8(d) of the Taft-Hartley Act.
    22. Given the dearth of guidance in the statute and legislative 
history, we believe that Congress signaled that the good faith 
negotiation requirement adopted in section 325(b)(3)(C) was 
sufficiently well understood that further explication was unnecessary. 
In such situations, we believe that Congress intends the Commission 
look to analogous statutory standards from which to draw guidance. 
While commenters offer various sources on which to rely, we agree with 
those commenters suggesting that the good faith bargaining requirement 
of section 8(d) of the Taft-Hartley Act is the most appropriate source 
of guidance. Section 8(d) of the Taft-Hartley Act details the 
collective bargaining duty of both employers and labor representatives, 
providing that:

    To bargain collectively is the performance of the mutual 
obligation of the employer and the representative of the employees 
to meet at reasonable times and confer in good faith with respect to 
wages, hours, and other terms and conditions of employment* * * but 
such obligation does not compel either party to agree to a proposal 
or require the making of a concession.

    There are significant parallels between the congressional policy 
goal of good faith negotiation underlying both section 325(b)(3)(C) and 
section 8(d) of the Taft-Hartley Act. In this regard, there is 
substantial National Labor Relations Board (``NLRB'') precedent that 
the good faith negotiation requirement applies solely to the process of 
the negotiations and does not permit the NLRB to require agreement or 
impose terms or conditions on collective bargaining agreements. The 
Supreme Court has made this determination with force and clarity, 
stating that:

    It was recognized from the beginning that agreement might be 
impossible, and it was never intended that the Government would in 
such cases step in, become a party to the negotiations and impose 
its own views of a desirable settlement.

    23. Congress clearly did not intend the Commission to sit in 
judgement of the terms of every retransmission consent agreement 
executed between a broadcaster and an MVPD. Even if the Commission had 
the resources to accomplish such a delegation, we can divine no intent 
in either the statute or its legislative history to achieve such a 
result. As commenters indicated, when Congress intends the Commission 
to

[[Page 15563]]

directly insert itself in the marketplace for video programming, it 
does so with specificity. Despite the arguments of the satellite 
industry and other MVPDs, we find nothing supporting a construction of 
section 325(b)(3)(C) that would grant the Commission authority to 
impose a complex and intrusive regulatory regime similar to the program 
access provisions or the interconnection requirements of section 251 of 
the Communications Act. While the Commission generally will not intrude 
into the substance of particular retransmission consent negotiations 
and agreements, we note that section 325(b)(3)(C) sanctions only those 
retransmission consent agreements containing different terms and 
conditions, including price terms, with different MVPDs if such 
different terms and conditions are based upon competitive marketplace 
considerations.
    24. Having reached this conclusion, we do not interpret section 
325(b)(3)(C) as ``largely hortatory'' as suggested by some commenters. 
As we stated in the Notice, ``Congress has signaled its intention to 
impose some heightened duty of negotiation on broadcasters in the 
retransmission consent process.'' In other words, Congress intended 
that the parties to retransmission consent have negotiation obligations 
greater than those under common law. Absent fraudulent intent, common 
law imposes no obligation on parties to negotiate in good faith prior 
to the formation of a contract. We believe that, by imposing the good 
faith obligation, Congress intended that the Commission develop and 
enforce a process that ensures that broadcasters and MVPDs meet to 
negotiate retransmission consent and that such negotiations are 
conducted in an atmosphere of honesty, purpose and clarity of process.

B. Mutual Good Faith Negotiation Requirement

    25. As a preliminary matter, we must determine to whom the ``good 
faith'' negotiation obligation applies. The Notice requested comment on 
whether the duty of good faith negotiation applies equally to the 
broadcaster and MVPD negotiating a retransmission consent agreement. 
Several commenters assert that the good faith negotiation requirement 
is a mutual obligation and that the Commission must consider and weigh 
the conduct of the MVPD in assessing whether the broadcaster has failed 
to satisfy the good faith negotiation requirement. Only DIRECTV asserts 
that the good faith negotiation requirement applies solely to 
broadcasters. DIRECTV argues that the language of section 325(b)(3)(C) 
applies solely to ``broadcast television stations'' and in no way, 
express or implied, is imposed on MVPDs.
    26. We agree with DIRECTV that the language of section 325(b)(3)(C) 
on its face applies only to ``television broadcast station[s].'' To 
read the provision as a mutual obligation would contradict the express 
language of the statute and controvert Congress' intent. Moreover, 
Congress has demonstrated its ability to expressly impose a good faith 
negotiation obligation on both parties in other provisions of the 
Communications Act. Accordingly, we conclude that the good faith 
negotiation requirement in section 325(b)(3)(C) was intended to apply 
only to broadcasters. However, we caution MVPDs that seek 
retransmission consent that their conduct is relevant in determining 
whether a broadcaster has complied with its obligation to negotiate 
retransmission consent in good faith. Insistence by an MVPD on 
unreasonable terms and conditions or negotiating procedures will be 
taken into account by the Commission in assessing a broadcaster's 
observance of its good faith negotiation obligations.

C. Definition of Good Faith

    27. The Notice sought comment on the criteria that should be 
employed to define ``good faith'' and sought comment on whether the 
Commission should explicitly define what constitutes good faith under 
section 325(b)(3)(C). The Notice requested comment on whether to adopt 
a two-part test for good faith similar to that embraced by the NLRB and 
by the Commission pursuant to section 251 of the Communications Act. 
The Commission also sought comment on any other specific legal 
precedent upon which we should rely and any other regulatory approach 
that might appropriately implement the good faith negotiation 
requirement of section 325(b)(3)(C) of the Communications Act.
    28. Several commenters argue that both the NLRB and the section 251 
good faith negotiation regimes are based upon the premise that one 
party to the negotiation may not have an interest in reaching an 
agreement. These commenters argue that, because broadcasters want their 
programming transmitted to the widest possible audience to increase 
advertising revenue and MVPDs desire valuable broadcast programming, 
both broadcasters and MVPDs have strong incentives for reaching 
retransmission consent. Several commenters support a two-part test to 
determine good faith similar to that suggested in the Notice. Fox 
asserts that, if the Commission adopts a two-part test for determining 
good faith, the specific actions that would constitute lack of good 
faith should be ``narrowly drawn to encompass only the most obvious and 
egregious breaches of good faith negotiating practices, and the 
Commission should always examine the factual context in which each 
alleged prohibition occurred.''
    29. Time Warner proposes that the Commission adopt a ``zone of 
reasonableness'' standard for good faith in which, even if the 
broadcaster satisfies all of the procedural indicia of good faith, the 
Commission could determine that it violated its duty to negotiate in 
good faith ``if it insists [on] a level of consideration that is so 
plainly uneconomic that an MVPD would suffer greater financial harm 
from accepting the broadcaster's terms than from refusing to carry the 
station.'' NBC maintains that the Commission should contrive no 
standards before the fact. Instead, to the extent standards are 
appropriate, they should be developed out of actual experience in 
adjudicated controversies. Several commenters argue that the Commission 
should judge the conduct of the parties only by examining the totality 
of the circumstances.
    30. We will adopt a two part test for good faith negotiation as 
proposed in the Notice. We believe that this test best implements 
Congress' intent in adopting the good faith negotiation requirement. A 
two-part test follows well established precedent in the field of labor 
law. In addition, the Commission has used a similar test in 
implementing its statutory obligations under section 251 of the 
Communications Act. Through the objective standards, this approach 
gives immediate guidance to the parties to retransmission consent 
negotiations that certain conduct will not be tolerated. Through the 
broader, totality of the circumstances test, the Commission will have 
the ability to prohibit conduct that, while not constituting a failure 
of good faith in all circumstances, does violate the good faith 
negotiation requirement in the context of a given negotiation. The 
totality of the circumstances test will also enable the Commission to 
continue refining and clarifying the responsibilities of parties to 
retransmission consent negotiations.
    31. The first part of the test will consist of a brief, objective 
list of negotiation standards. Because the list consists of per se 
standards, of necessity, the standards must be concise, clear and 
constitute a violation of the good faith standard in all possible 
instances. Should an MVPD demonstrate to the Commission that a

[[Page 15564]]

broadcaster, in the conduct of a retransmission consent negotiation, 
has engaged in actions violative of an objective negotiation standard, 
the Commission would find that the broadcaster has breached its duty to 
negotiate in good faith. We disagree with those commenters who assert 
that the Commission should only define violations on a prospective 
adjudicatory basis. Given the short, six-month, period in which 
satellite carriers have to negotiate retransmission consent before 
expiration of the compulsory license of section 325(b)(2)(E), we 
believe it incumbent upon us to provide as much initial guidance as 
possible through which the parties may pursue negotiations.
    32. The second part of the test is a totality of the circumstances 
standard. Under this standard, an MVPD may present facts to the 
Commission which, even though they do not allege a violation of the 
objective standards, given the totality of the circumstances reflect an 
absence of a sincere desire to reach an agreement that is acceptable to 
both parties and thus constitute a failure to negotiate in good faith. 
We do not intend the totality of the circumstances test to serve as a 
``back door'' inquiry into the substantive terms negotiated between the 
parties. While the Commission will not ordinarily address the substance 
of proposed terms and conditions or the terms of actual retransmission 
consent agreements, we will entertain complaints under the totality of 
the circumstances test alleging that specific retransmission consent 
proposals are sufficiently outrageous, or evidence that differences 
among MVPD agreements are not based on competitive marketplace 
considerations, as to breach a broadcaster's good faith negotiation 
obligation. However, complaints which merely reflect commonplace 
disagreements encountered by negotiating parties in the everyday 
business world will be promptly dismissed by the Commission.
    33. The Commission sought comment on specific actions or practices 
that would constitute per se violations of the duty to negotiate in 
good faith in accordance with section 325(b)(3)(C). In addition to any 
other actions or practices, the Commission asked commenters to address 
whether it would be appropriate to include in any such list provisions 
similar to the violations of the obligation to negotiate 
interconnection agreements in good faith set forth in 47 CFR 51.301. 
The Commission acknowledged, however, that the good faith standard of 
SHVIA is different in significant respects to that contained in 47 CFR 
51.301.
    34. Commenters proposed numerous standards that the Commission 
should consider in adopting rules to enforce the good faith negotiation 
requirement. Broadcasters generally argue that, to the extent it does 
anything, the Commission should adopt streamlined rules that apply only 
to the process of the negotiations between broadcasters and MVPDs. The 
other group, consisting of satellite carriers, small cable operators 
and alternative MVPDs, argues that the only way the Commission can 
effectively enforce the good faith negotiation requirement is to 
involve itself in the substantive terms of retransmission consent 
agreements as well as the process of negotiations. These commenters 
propose that the Commission adopt an extensive list of substantive 
terms and conditions that should be prohibited as violations of the 
obligation to negotiate retransmission consent agreements in good 
faith.
    35. Broadcast commenters propose several standards based on 
experience gathered in the NLRB field, the absence of which indicates a 
lack of good faith, including: (1) a party must have a sincere desire 
to reach agreement, (2) a party's negotiator must have authority to 
conclude a deal, (3) a party must offer to meet at reasonable times and 
convenient places, and (4) a party must agree to execute a written 
agreement once all terms have been agreed on. NBC proposes that 
extrinsic evidence that a party never intended to reach agreement, or 
extrinsic evidence of an understanding with a third party that the 
negotiating party will not enter into a retransmission consent 
agreement, should also evidence violations of the good faith 
negotiation requirement. Other commenters would prohibit a broadcaster 
from insisting on terms so unreasonable that they are tantamount to a 
refusal to deal. EchoStar argues that such procedural violations are 
meaningless because ``no bad faith actor would be so inept or so 
artless as to display its bad faith by not agreeing to a convenient 
time and place to meet, not appointing a representative to negotiate, 
and not committing to writing a retransmission agreement once a deal 
has been reached.''
    36. DIRECTV proposes the following list of good faith negotiation 
standards based upon examples from labor law precedent, the 
Commission's program access rules, the interconnection provisions of 
the 1996 Act, and recognized marketplace dynamics. DIRECTV, supported 
by other commenters, proposes that, during the negotiation of a 
retransmission consent agreement, a broadcaster may not:
    (a) Intentionally seek to mislead or coerce the MVPD into reaching 
an agreement it would not otherwise have made;
    (b) Unreasonably obstruct or delay negotiations or resolutions of 
disputes;
    (c) Refuse to designate a representative with authority to make 
binding representations if such refusal significantly delays resolution 
of issues;
    (d) Refuse to negotiate in fact;
    (e) Refuse to provide the satellite carrier with a high quality, 
direct feed of the broadcast signal;
    (f) Engage in discrimination in the price, terms or conditions of 
retransmission consent afforded an MVPD relative to any other MVPD, 
unless such discrimination is related to ``competitive marketplace 
conditions'' as defined by the Commission * * *;
    (g) Offer unreasonable positions, including, but not limited to:
    1. a unilateral requirement that retransmission consent for a given 
broadcast station be conditioned on carriage under retransmission 
consent of another broadcast station, either in the same or a different 
geographic market;
    2. A unilateral requirement that retransmission consent be 
conditioned on the exclusion of carriage under retransmission consent 
of other broadcast channels in a given market;
    3. A unilateral requirement that retransmission consent be 
conditioned on a broadcaster obtaining channel positioning rights on 
the satellite carrier's system;
    4. A unilateral requirement that the satellite carrier (i) commit 
to purchase advertising on the broadcast station or broadcaster 
affiliated media, or (ii) that a specified share of advertising dollars 
spent in a broadcaster's market be spent on that broadcaster;
    5. A unilateral requirement that retransmission consent be 
conditioned on a satellite carrier not retransmitting distant network 
signals to qualified subscribers in the market, or a satellite carrier 
``capping'' the number of qualified subscribers in the market who may 
receive distant network signals, thus depriving eligible subscribers of 
their statutory right to subscribe to distant network signals;
    6. A unilateral requirement that retransmission consent be 
conditioned on the satellite carrier's carriage of digital signals.
    To this list EchoStar, would add: (i) Insisting on an unreasonably 
short contract duration; (ii) threatening to run anti-satellite 
advertising; and (iii) refusal to deal, whether explicit or disguised 
under requests for

[[Page 15565]]

extortionate terms. Several commenters would include the imposition of 
non-optional tying arrangements requiring an MVPD to carry the 
affiliated programming of the broadcaster in exchange for 
retransmission consent. Other commenters suggest a standard requiring 
parties to provide information necessary to reach agreement.
    37. Several commenters propose a standard prohibiting instances in 
which a broadcaster seeks higher consideration from an MVPD for any 
affiliated cable network programming in exchange for retransmission 
consent than it obtains from the incumbent cable operator, unless the 
broadcaster justifies that such higher consideration is cost-based or 
does not produce anti-competitive market conditions. In addition, 
BellSouth urges the Commission to find a violation when a broadcaster 
ties retransmission consent to minimum subscriber penetration levels. 
Another commenter would also brand as a good faith violation a demand 
of a nondisclosure agreement, a demand that the MVPD attest that the 
agreement complies with all applicable laws, or the refusal to include 
a provision permitting the agreement to be amended to reflect 
subsequent changes in the law.
    38. Several broadcast commenters assert that the list of violations 
proposed by DIRECTV, EchoStar and others is so extensive and one-sided 
as to render any notion of equality at the bargaining table 
meaningless. Other commenters assert that, since the adoption of the 
1992 Cable Act, carriage of additional programming as compensation for 
retransmission consent is most often the compensation agreed upon by 
broadcasters and MVPDs in their retransmission consent agreements. 
Disney argues that the legislative history of the 1992 Cable Act 
expressly endorsed such compensation and that, had Congress wished to 
prohibit the practice, it would have done so expressly. Disney further 
argues that no commenter offers a sustainable legal basis for presuming 
on a blanket basis that a request for additional programming carriage 
as consideration for retransmission consent would be illegal under 
current law or anti-competitive.
    39. Consistent with our determination that Congress intended that 
the Commission should enforce the process of good faith negotiation and 
that the substance of the agreements generally should be left to the 
market, we will not adopt the suggestions of certain commenters that we 
prohibit proposals of certain substantive terms, such as offering 
retransmission consent in exchange for the carriage of other 
programming such as a cable channel, another broadcast signal, or a 
broadcaster's digital signal. Instead, we believe that the good faith 
negotiation requirement of SHVIA is best implemented through the 
following standards derived from NLRB precedent, commenter's proposals 
and the section 251 interconnection requirements. These standards are 
intended to identify those situations in which a broadcaster did not 
enter into negotiations with the sincere intent of trying to reach an 
agreement acceptable to both parties.
    40. First, a broadcaster may not refuse to negotiate with an MVPD 
regarding retransmission consent. Section 325(b)(3)(C) affirmatively 
requires that broadcasters negotiate retransmission consent in good 
faith. This requirement goes to the very heart of Congress' purpose in 
enacting the good faith negotiation requirement. Outright refusal to 
negotiate clearly violates the requirement of section 325(b)(3)(C). 
Broadcasters must participate in retransmission consent negotiations 
with the intent of reaching agreement. Provided that the parties 
negotiate in good faith in accordance with the Commission's standards, 
failure to reach agreement does not violate section 325(b)(3)(C). Given 
the economic incentive for each side to reach agreement, we are hopeful 
that such impasses will be rare and short-lived.
    41. Second, a broadcaster must appoint a negotiating representative 
with authority to bargain on retransmission consent issues. Failure to 
appoint a negotiating representative vested with authority to bargain 
on retransmission consent issues indicates that a broadcaster is not 
interested in reaching an agreement. This standard is the norm in NLRB 
precedent as well as our interconnection rules implementing section 
251. This requirement does not empower MVPDs to demand that specific 
officers or directors of a broadcaster attend negotiation sessions. 
Provided that a negotiating representative is vested with the authority 
to make offers on behalf of the broadcaster and respond to 
counteroffers made by MVPDs to the broadcaster, this standard is 
satisfied.
    42. Third, a broadcaster must agree to meet at reasonable times and 
locations and cannot act in a manner that would unduly delay the course 
of negotiations. Refusal to meet at reasonable times and locations 
belies a good faith intent to negotiate. This requirement does not 
preclude negotiations conducted via telephone, facsimile, or by letter. 
Reasonable response times and unreasonable delays will be gauged by the 
breadth and complexity of the issues contained in an offer. The 
Commission is aware that, in many cases, time will be of the essence in 
retransmission consent negotiations, particularly as we approach the 
end of the six-month period provided for in section 325(b)(2)(E)--May 
29, 2000. We advise broadcasters that, in examining violations of this 
standard, we will consider the proximity of the termination of 
retransmission consent and the consequent service disruptions to 
consumers. At the same time, we caution MVPDs that waiting until the 
eleventh hour to initiate negotiations will also be taken into account 
in enforcing this standard.
    43. Fourth, a broadcaster may not put forth a single, unilateral 
proposal and refuse to discuss alternate terms or counter-proposals. 
``Take it, or leave it'' bargaining is not consistent with an 
affirmative obligation to negotiate in good faith. For example, a 
broadcaster might initially propose that, in exchange for carriage of 
its signal, an MVPD carry a cable channel owned by, or affiliated with, 
the broadcaster. The MVPD might reject such offer on the reasonable 
grounds that it has no vacant channel capacity and request to 
compensate the broadcaster in some other way. Good faith negotiation 
requires that the broadcaster at least consider some form of 
consideration other than carriage of affiliated programming. This 
standard does not, in any way, require a broadcaster to reduce the 
amount of consideration it desires for carriage of its signal. This 
standard only requires that broadcasters be open to discussing more 
than one form of consideration in seeking compensation for 
retransmission of its signal by MVPDs.
    44. Fifth, a broadcaster, in responding to an offer proposed by an 
MVPD, must provide reasons for rejecting any aspects of the MVPD's 
offer. Blanket rejection of an offer without explaining the reasons for 
such rejection does not constitute good faith negotiation. This 
provision merely ensures that MVPDs are not negotiating in a vacuum and 
understand why certain terms are unacceptable to the broadcaster so 
that the MVPD can respond to the broadcaster's concerns. We reiterate 
that good faith negotiation requires a broadcaster's affirmative 
participation. However, this standard is not intended as an information 
sharing or discovery mechanism. Broadcasters are not required to 
justify their explanations by document or evidence.
    45. Sixth, a broadcaster is prohibited from entering into an 
agreement with any party a condition of which is to deny retransmission 
consent to any MVPD. For example, Broadcaster A is

[[Page 15566]]

prohibited from agreeing with MVPD B that it will not reach 
retransmission consent with MVPD C. It is impossible for a broadcaster 
to engage in good faith negotiation with an MVPD regarding 
retransmission consent when it has a contractual obligation not to 
reach agreement with that MVPD.
    46. Finally, once the parties reach agreement on the terms of 
retransmission consent, the broadcaster must agree to execute a written 
retransmission consent agreement that sets forth the full agreement. 
Because the Commission may be called upon in certain instances to 
determine whether the totality of the circumstances involved in the 
negotiation of a particular retransmission consent agreement complies 
with section 325(b)(3)(C), it is vital that the parties reduce their 
entire agreement to writing. In addition, this requirement also 
minimizes subsequent misunderstandings between the parties related to 
their respective obligations.
    47. We do not believe that we should at this time adopt further 
objective standards as proposed by the commenters. In appropriate 
instances, we will consider the conduct at the heart of such proposed 
standards when we examine a particular retransmission consent 
negotiation under the totality of the circumstances test.
    48. The Notice further observed that section 325(b)(3)(C) provides 
that: it shall not be a failure to negotiate in good faith if the 
television broadcast station enters into retransmission consent 
agreements containing different terms and conditions, including price 
terms, with different multichannel video programming distributors if 
such different terms and conditions are based on competitive 
marketplace considerations.
    The Notice sought comment on what constitutes a competitive 
marketplace consideration. The Notice also observed that the Commission 
has adopted non-discrimination standards in both the program access and 
open video system contexts and sought comment on the relevance, if any, 
of these standards to what constitutes a ``competitive market 
consideration.'' In addition, the Notice sought comment on any other 
factors or approaches to determining what constitutes competitive 
marketplace considerations under section 325(b)(3)(C).
    49. A number of commenting parties urge that the competitive 
marketplace considerations language be interpreted as a requirement 
that the Commission judge the good faith of all retransmission consent 
offers based on whether they are based on ``competitive marketplace 
considerations.'' DIRECTV and EchoStar, for example, claim that 
competitive marketplace considerations would permit a broadcaster to 
discriminate between providers only in scenarios where Congress and the 
Commission have recognized that certain variance in price, terms or 
conditions correspond to legitimate behavior that may occur in the 
marketplace for video programming.
    50. EchoStar asserts that, generally where a broadcaster has 
received any consideration for retransmission consent, it has been non-
monetary, carriage of cable networks affiliated with the broadcaster, 
and argues that:

    The general rule, therefore, should be that broadcaster demands 
deviating from that formula, such as demands for money, demands for 
carriage of additional cable networks beyond those involved in the 
retransmission-for-carriage agreements with cable operators, or 
demands for retransmission of additional broadcast stations (beyond 
those owned and operated by the same network), should be 
presumptively viewed as not based on competitive marketplace 
considerations.

    51. NAB argues that satellite carriers are not nascent businesses 
that need government protection, but instead are well-financed, 
powerfully-backed competitors in the multichannel marketplace. 
Commenters argue that satellite companies not only use local stations 
to increase the attractiveness of their overall product, but also sell 
the stations to viewers at substantial prices. One commenter notes that 
the fact that satellite carriers are able to charge a fee for 
retransmitted local signals demonstrates that these signals have value 
for which broadcasters must be compensated. EchoStar counters that 
``the only reason * * * consumers purchase a satellite carrier's local 
signal offering is for value that the satellite carrier provides, 
including increased quality, convenience, and aesthetics (i.e., lack of 
off-air antenna).''
    52. Commenters assert that, in the early 1990s, when the 
retransmission consent provisions of the 1992 Cable Act first became 
effective, cable systems were effectively the only distributors from 
whom broadcasters could seek consideration through retransmission 
consent. Broadcasters assert that they were at a tremendous 
disadvantage because only a single buyer was prepared to bid for their 
product. Broadcast commenters state that, today, the existence of 
multiple MVPDs in at least some markets creates a more competitive 
marketplace for the sale of retransmission rights, and one that 
provides more opportunity for stations seeking to obtain compensation 
for granting these valuable rights. NAB states that the existence of 
multiple buyers is obviously a very important competitive marketplace 
consideration in this market, as in any market. EchoStar counters that 
multiple competitors in a market only serve to increase a broadcaster's 
ability to play one MVPD distributor against another in retransmission 
negotiations, an ability Congress sought to restrain by imposing the 
good faith and competitive marketplace considerations requirements on 
retransmission consent.
    53. As discussed above, we do not believe, as a general matter, 
that section 325(b)(3)(C) was intended to subject retransmission 
consent negotiation to detailed substantive oversight by the Commission 
or indeed that there exist objective competitive marketplace factors 
that broadcasters must ascertain and base any negotiations and offers 
on. Indeed, in the aggregate, retransmission consent negotiations are 
the market through which the relative benefits and costs to the 
broadcaster and MVPD are established. Although some parties earnestly 
suggest, for example, that broadcasters should be entitled to zero 
compensation in return for retransmission consent or that the forms of 
compensation for carriage should be otherwise limited, this seems to us 
precisely the judgment that Congress generally intended the parties to 
resolve through their own interactions and through the efforts of each 
to advance its own economic self interest.
    54. EchoStar suggests an economic paradigm against which 
retransmission terms might be compared to determine if they are based 
on ``competitive marketplace considerations.'' It suggests that in the 
ideal competitive market setting, revenues will be just sufficient to 
compensate providers for the costs of program creation, duplication, 
and distribution so that all participants are earning a fair rate of 
return. Further, having already noted that the marketplace may be 
distorted through the exercise of market power by cable operators, 
EchoStar urges that retransmission consent term outcomes for the cable 
industry provide a benchmark or threshold that should not be exceeded 
in the case of satellite carriage of broadcast signals. Further, it 
asserts that considerations extracted from certain cable operators (for 
example carriage of digital signals) would be inappropriate and not 
based on competitive marketplace consideration if they were 
significantly costlier to accede to for satellite carriers.
    55. In our view this type of regulatory analysis and comparison is 
not what was intended through the enactment of

[[Page 15567]]

section 325(b)(3)(C). It is both internally inconsistent and not 
capable of administration in any reasonably timely fashion. The 
proposal is internally inconsistent in that it acknowledges that among 
the market participants, cable operators might be the most likely to 
have market power. If this were the case, using their negotiations as a 
proxy for a competitive market setting would not be logical. Under this 
analysis, broadcasters, already the hypothesized victims of an exercise 
of market power, would be obligated to continue in that role with other 
participants in the market. Further, EchoStar finds one of the most 
common features of these agreements--payment for carriage through the 
devotion of channel capacity to other affiliated services--
presumptively a measure of bad faith. Acceptance of the cash rate but 
not the other currency of the negotiation could hardly be a replication 
of a competitive market. Even if these problems could be overcome, 
however, it seems unlikely that the data needed to measure a 
transaction against the economic model proposed would be available 
either to the parties in the course of their negotiations or to the 
Commission in the course of trying to judge their compliance with the 
standard of review proposed.
    56. We also believe that to arbitrarily limit the range or type of 
proposals that the parties may raise in the context of retransmission 
consent will make it more difficult for broadcasters and MVPDs to reach 
agreement. By allowing the greatest number of avenues to agreement, we 
give the parties latitude to craft solutions to the problem of reaching 
retransmission consent. The comments filed in this proceeding have 
called into question the legitimacy of a number of bargaining proposals 
as reflecting a failure of good faith or as presumptively not based on 
competitive marketplace considerations. As discussed, it is important 
that we provide the parties with as much initial guidance as possible. 
We believe that the following examples of bargaining proposals 
presumptively are consistent with competitive marketplace 
considerations and the good faith negotiation requirement:
    1. Proposals for compensation above that agreed to with other MVPDs 
in the same market;
    2. Proposals for compensation that are different from the 
compensation offered by other broadcasters in the same market;
    3. Proposals for carriage conditioned on carriage of any other 
programming, such as a broadcaster's digital signals, an affiliated 
cable programming service, or another broadcast station either in the 
same or a different market;
    4. Proposals for carriage conditioned on a broadcaster obtaining 
channel positioning or tier placement rights;
    5. Proposals for compensation in the form of commitments to 
purchase advertising on the broadcast station or broadcast-affiliated 
media; and 6. Proposals that allow termination of retransmission 
consent agreement based on the occurrence of a specific event, such as 
implementation of SHVIA's satellite must carry requirements.
    Each of the proposals reflect presumptively legitimate terms and 
conditions or forms of consideration that broadcasters may find impart 
value in exchange for the grant of retransmission consent to an MVPD. 
We do not find anything to suggest that, for example, requesting an 
MVPD to carry an affiliated channel, another broadcast signal in the 
same or another market, or digital broadcast signals is impermissible 
or other than a competitive marketplace consideration. Prior to passage 
of the 1992 Cable Act, the compensation paid by MVPDs for broadcast 
signal programming carriage was established under the copyright laws 
through a governmental adjudicatory process. After passage of the 1992 
Cable Act, Congress left the negotiation of retransmission consent to 
the give and take of the competitive marketplace. In SHVIA, absent 
conduct that is violative of national policies favoring competition, we 
believe Congress intended this same give and take to govern 
retransmission consent. In addition, we point out that these are 
bargaining proposals which an MVPD is free to accept, reject or counter 
with a proposal of its own.
    57. We find it more difficult to develop a similar list of 
proposals that indicate an automatic absence of competitive marketplace 
considerations. Because the size and relative bargaining power of 
broadcasters and MVPDs range from satellite master antenna television 
(``SMATV'') operators and low power television broadcast stations to 
national cable entities and major-market, network affiliate broadcast 
television stations, the dynamics of specific retransmission consent 
negotiations will span a considerable spectrum. In these instances, we 
will generally rely on the totality of the circumstances test to 
determine compliance with section 325(b)(3)(C).
    58. At the same time, it is implicit in section 325(b)(3)(C) that 
any effort to stifle competition through the negotiation process would 
not meet the good faith negotiation requirement. Considerations that 
are designed to frustrate the functioning of a competitive market are 
not ``competitive marketplace considerations.'' Conduct that is 
violative of national policies favoring competition--that is, for 
example, intended to gain or sustain a monopoly, is an agreement not to 
compete or to fix prices, or involves the exercise of market power in 
one market in order to foreclose competitors from participation in 
another market--is not within the competitive marketplace 
considerations standard included in the statute. Following this 
reasoning, we believe that the following examples of bargaining 
proposals presumptively are not consistent with competitive marketplace 
considerations and the good faith negotiation requirement:
    1. Proposals that specifically foreclose carriage of other 
programming services by the MVPD that do not substantially duplicate 
the proposing broadcaster's programming;
    2. Proposals involving compensation or carriage terms that result 
from an exercise of market power by a broadcast station or that result 
from an exercise of market power by other participants in the market 
(e.g., other MVPDs) the effect of which is to hinder significantly or 
foreclose MVPD competition;
    3. Proposals that result from agreements not to compete or to fix 
prices; and
    4. Proposals for contract terms that would foreclose the filing of 
complaints with the Commission.

D. Carriage While a Complaint is Pending

    59. Several MVPD commenters argue that where a MVPD shows a 
willingness to negotiate for continued carriage of a local broadcast 
station, the station should have an affirmative duty to negotiate terms 
for such carriage and should not be permitted to withhold 
retransmission consent while such negotiations are pending. Other 
commenters assert that the Commission should prohibit a broadcaster 
from withdrawing existing retransmission consent given to an MVPD until 
an exclusivity or good faith complaint is denied by the Cable Services 
Bureau and, if reconsideration is requested, the full Commission. These 
commenters note that local television stations enjoy similar protection 
when a cable operator seeks to drop the broadcaster via the 
Commission's market modification process. NAB and Network Affiliates 
assert that Congress expressly rejected this approach in SHVIA by 
requiring that upon the expiration of the six-month grace period 
outlined in section 325(b)(2)(E), satellite carriers must obtain 
consent prior to retransmitting

[[Page 15568]]

any programming or face stiff penalties, including mandatory civil 
liability of $25,000 per station, per day.
    60. Two equally unambiguous provisions of SHVIA foreclose the 
approach advanced by MVPD commenters. First, section 325(b)(1) of the 
Communications Act provides that ``No cable system or other 
multichannel video programming distributor shall retransmit the signal 
of the broadcasting station, or any part thereof, except * * * with the 
express authority of the originating station * * * .'' This language 
clearly prohibits an MVPD, except during the six-month period allowed 
under section 325(b)(2)(E), from retransmitting a broadcasters signal 
if it has not obtained express retransmission consent. Second, section 
325(e) of the Communications Act establishes a streamlined complaint 
procedure through which broadcasters may seek redress for allegedly 
illegal retransmission of local broadcast signals by satellite 
carriers. The procedures established by section 325(e) provide only 
four defenses that a satellite carrier may raise: (1) the satellite 
carrier did not retransmit the broadcaster's signal to any person in 
the local market of the broadcaster during the time period specified in 
the complaint; (2) the broadcaster had in writing expressly allowed the 
satellite carrier to retransmit the broadcaster's signal to the 
broadcaster's local market for the entire period specified in the 
complaint; (3) the retransmission was made after January 1, 2002 and 
the broadcaster elected to assert the right to must carry against the 
satellite carrier under section 338 for the entire period specified in 
the complaint; and (4) the station being retransmitted is a 
noncommercial television broadcast station. Against the backdrop of the 
express language of these provisions, we see no latitude for the 
Commission to adopt regulations permitting retransmission during good 
faith negotiation or while a good faith or exclusivity complaint is 
pending before the Commission where the broadcaster has not consented 
to such retransmission.
    61. Having reached this conclusion, we must also express our 
concern regarding the service disruptions and consumer outrage that 
will inevitably result should MVPDs that are entitled to retransmit 
local signals subsequently lose such authorization. Because the market 
has functioned adequately since the advent of retransmission consent in 
the early 1990's, we expect such instances to be the exception, rather 
than the norm. We are encouraged by the retransmission consent 
agreements that have been reached between broadcasters and satellite 
carriers prior to the enactment of our rules. In addition, we strongly 
encourage that broadcasters and MVPDs that are engaged in protracted 
retransmission consent negotiations agree to short-term retransmission 
consent extensions so that consumers' access to broadcast stations will 
not be interrupted while the parties continue their negotiations.

E. Existing and Subsequent Retransmission Consent Agreements

    62. In the Notice, the Commission acknowledged the existence of 
retransmission consent agreements between satellite carriers and 
television broadcast stations that predate enactment of section 
325(b)(3)(C). In addition, the Notice acknowledged that agreements have 
been executed since the enactment of SHVIA. The Notice sought comment 
on the impact of these agreements on the duty to negotiate in good 
faith.
    63. Network Affiliates state that the fact that broadcasters and 
satellite carriers have already reached arms length retransmission 
consent agreements is an indication that they were negotiated in good 
faith. Otherwise, in the face of impending legislation and Commission 
action, they assert the parties would not have finalized such 
agreements. Another commenter argues that the rules adopted by the 
Commission should have prospective effect applying only to 
retransmission consent negotiations that occur after the effective date 
of the Commission's rules. One commenter urges the Commission to give 
its rules retroactive application to preexisting retransmission consent 
agreements.
    64. We will not apply the rules adopted herein to retransmission 
consent agreements that predate the effective date of this Order. 
Section 325(b)(3)(C) provides that:

    Within 45 days after the date of the enactment of [SHVIA], the 
Commission shall commence a rulemaking proceeding to revise the 
regulations governing the exercise by television broadcast stations 
of the right to grant retransmission consent under this subsection, 
and such other regulations as are necessary to administer the 
limitations contained in paragraph (2) * * * Such regulations shall 
* * * until January 1, 2006, prohibit a television broadcast station 
that provides retransmission consent from engaging in exclusive 
contracts for carriage or failing to negotiate in good faith * * * .

    As the quoted language indicates, section 325 is not a self-
effectuating provision. It has substance and structure only after the 
Commission has concluded its rulemaking to implement the good faith and 
exclusivity limitations of section 325(b)(3)(C). Moreover, we need not 
apply SHVIA retroactively to ensure that such preexisting agreements do 
not contain impermissible exclusivity provisions. 47 CFR 76.64(m) has 
been in effect since 1993 and expressly prohibits exclusive 
retransmission consent agreements. If any MVPD believes that a 
broadcaster and an MVPD entered into a prohibited exclusive 
retransmission consent agreement prior to adoption of SHVIA, that party 
may file a petition for special relief alleging that a broadcaster and 
MVPD have violated 47 CFR 76.64(m). Accordingly, the rules applicable 
to good faith and exclusivity adopted herein will apply only to 
retransmission consent agreements adopted after the effective date of 
this Order.

V. Exclusive Retransmission Consent Agreements

    65. SHVIA amends section 325(b) of the Communications Act by 
directing the Commission to promulgate rules that would

    until January 1, 2006, prohibit a television broadcast station 
that provides retransmission consent from engaging in exclusive 
contracts * * * .

The accompanying Joint Explanatory Statement of the Committee of 
Conference contains no language to clarify or explain the prohibition, 
stating only that:

    The regulations would, until January 1, 2006, prohibit a 
television broadcast station from entering into an exclusive 
retransmission consent agreement with a multichannel video 
programming distributor * * *

The Commission, by rule, established a similar prohibition following 
passage of the 1992 Cable Act. There, the Commission was directed by 
Congress to establish regulations governing the right of television 
broadcast stations to grant retransmission consent. The Commission 
found that exclusive retransmission consent arrangements between a 
television broadcast station and any multichannel video programming 
distributor were contrary to the intent of the 1992 Cable Act.
    66. In the Notice, we sought to determine what activities would 
constitute ``engaging in exclusive contracts.'' We also sought to 
determine whether there was significance to the difference between the 
language in the statute (prohibiting ``engaging in'') and the language 
in the Conference Report (prohibiting ``entering into''). We sought to 
determine whether parties were prohibited from negotiating exclusive 
contracts that would take effect after the date of January 1, 2006. We 
also sought

[[Page 15569]]

comment on whether any such contracts already existed, and if so, what 
effect the statute would have on such contracts. Finally, we sought 
comment on how to effectively enforce such a prohibition, and how to 
determine whether such agreements existed.
    67. SHVIA prohibits a television broadcast station that provides 
retransmission consent from ``engaging in'' exclusive contracts until 
January 1, 2006. The Conference Report refers to a prohibition on 
``entering into'' exclusive retransmission consent agreements. Several 
commentators argue that the phrases ``entering into'' and ``engaging 
in'' are synonymous. Representatives of the satellite industry argue 
that the Commission should rely on the broader language of the statute 
(``engaging in'') rather than the arguably narrower Conference Report 
language. Commenters supporting this interpretation posit that the use 
of the language ``engaging in'' demonstrates an intent to prohibit a 
broad range of practices. SBCA believes that the use of the phrase 
``engaging in'' prohibits ``both express and implied, de jure and de 
facto, exclusionary conduct, including literal or effective refusals to 
deal with a particular MVPD distributor.'' Two other commenters argue 
that broadcasters can impose unaffordable demands on smaller MVPDs, and 
that these demands can result in prohibited de facto exclusivity. Thus, 
according to this argument, the Commission should expand its 
prohibition to explicitly forbid these types of arrangements. LTVS 
supports an expansive definition of exclusive practices and argues that 
a broad range of actions should be prohibited.
    68. While the satellite industry supports a broad reading of the 
statute, broadcast commenters argue that Congress intended to prohibit 
exclusive contracts, not ``undefined exclusive `exercise practices' nor 
. . . of any de facto exclusivity.'' Network Affiliates assert that the 
use of the phrase ``engaging in'' does not demonstrate Congressional 
intent to ``increase the number of prohibited activities.'' Indeed, 
these commenters argue that by using the phrase ``engaging in'' as 
opposed to the phrase ``entering in,'' Congress ``intended to allow 
parties to negotiate and enter into exclusive retransmission consent 
agreements as long as those agreements are not effective until after 
the sunset of this prohibition on January 1, 2006.'' Under this theory, 
the statute only prohibits ``engaging in exclusive contracts.'' Thus, 
according to broadcasting representatives, SHVIA does not prohibit 
undefined exclusive practices or the exercise of de facto exclusivity.
    69. In determining the intended scope of the prohibition on 
exclusive retransmission consent agreements, we believe that Congress 
intended that all activity associated with exclusive retransmission 
consent agreements be prohibited until January 1, 2006. Absent such a 
comprehensive prohibition, marketplace distortions could occur that 
would adversely influence the continuing development of a competitive 
marketplace for multichannel video programming services. For example, 
if an MVPD negotiates an exclusive retransmission consent agreement 
with a television broadcaster that will take effect after January 1, 
2006, such MVPD undoubtedly would use that agreement in advertising or 
marketing strategies during the prohibition on exclusive retransmission 
consent agreements. The MVPD could market its services by stating that 
it will be the only MVPD providing a particular television broadcast 
station or stations after January 1, 2006. Given the overall pro-
competitive mandate of SHVIA, we believe that Congress did not intend 
that we permit this type of market distortion while the section 
325(b)(3)(C) prohibitions are in effect. As such, we interpret the 
phrase ``engaging in'' to proscribe not only entering into exclusive 
agreements, but also negotiation and execution of agreements granting 
exclusive retransmission consent after the prohibition expires.
    70. As for the exercise of de facto exclusivity, we believe that 
the statute's good faith requirement sufficiently addresses concerns 
voiced by commenters. The good faith requirements of the statute and 
the Commission's rules adopted in this Order should adequately address 
behavior that would lead to de facto exclusivity.
    71. On its face, the prohibition on exclusive retransmission 
consent agreements appears to have immediate effect. The Commission 
sought comment on the existence of exclusive satellite carrier 
retransmission consent agreements that either predate the enactment of 
SHVIA or under the Commission's rules implementing section 
325(b)(3)(C)(ii). One commenter argues that the Commission should 
nullify any exclusive retransmission consent agreements that existed 
prior to SHVIA. The commenter suggests that the Commission's authority 
to nullify any such agreements stems from the requirements of the 
Commission's rules. Another commenter argues that the Commission should 
apply rules implementing the SHVIA prohibition on exclusive 
retransmission consent agreements retroactively. Some commenters from 
the broadcasting industry argue that any such agreements that were in 
existence prior to the enactment of SHVIA should be grandfathered.
    72. Prior to the enactment of SHVIA, 47 CFR 76.64(m) prohibited all 
exclusive retransmission consent agreements. After its enactment, SHVIA 
prohibits all exclusive retransmission consent agreements prior to 
January 1, 2006. Thus, to the extent that any prohibited exclusive 
retransmission consent agreements exist between television broadcast 
stations and MVPDs, such agreements are prohibited either by Commission 
rule prior to SHVIA, or by SHVIA's express terms thereafter.

VI. Retransmission Consent and Exclusivity Complaint Procedures

A. Voluntary Mediation

    73. The Notice sought comment on whether there are circumstances in 
which the use of alternative dispute resolution (``ADR'') services 
would assist in determining whether a television broadcast station 
negotiated in good faith as defined by section 325(b)(3)(C) and the 
Commission's rules adopted thereunder. Several commenters argue that a 
dispute resolution mechanism is not necessary and contrary to the goal 
of swift resolution of such complaints. By contrast, Time Warner 
supports a mediation requirement that must be satisfied prior to the 
filing of a complaint with the Commission. Under Time Warner's 
proposal, the parties would have 60 days to negotiate in good faith. If 
an agreement has not been reached 30 days or less prior to the 
termination of retransmission consent, either party can require that 
the matter be submitted to mediation.
    74. We will not, at this time, adopt Time Warner's mandatory 
mediation proposal. There has not been a sufficient demonstration that 
such a measure is necessary to implement the good faith provision of 
section 325(b)(3)(C). We believe, however, that voluntary mediation can 
play an important part in the facilitation of retransmission consent 
and encourage parties involved in protracted retransmission consent 
negotiations to pursue mediation on a voluntary basis. The Commission 
would favorably consider a broadcaster's willingness to participate in 
a mediation procedure in determining whether such broadcaster complied 
with its good faith negotiation obligations. We emphasize,

[[Page 15570]]

however, that refusal to engage in voluntary mediation will not be 
considered probative of a failure to negotiate in good faith. We will 
revisit the issue of mandatory retransmission consent mediation if our 
experience in enforcing the good faith provision indicates that such a 
measure is necessary.

B. Commission Procedures

    75. The Notice sought comment on what procedures the Commission 
should employ to enforce the provisions adopted pursuant to section 
325(b)(3)(C). We asked commenters to state whether the same set of 
enforcement procedures should apply to both the exclusivity prohibition 
and the good faith negotiation requirement, or whether the Commission 
should adopt different procedures tailored to each prohibition. 
Specifically, we sought comment regarding whether special relief 
procedures of the type found in 47 CFR 76.7 provide an appropriate 
framework for addressing issues arising under section 325(b)(3)(C).
    76. There is general consensus among the commenters that the 
general pleading provisions of 47 CFR 76.7 provide appropriate 
procedural rules for good faith and exclusivity complaints. No 
commenters justified a departure from the Commission's general pleading 
rules for matters filed with the Cable Services Bureau. We agree with 
these commenters urging the use of the 47 CFR 76.7 provisions and 
direct complainants to follow these provisions in filing retransmission 
consent complaints. Consistent with the requirements of 47 CFR 76.7, 
complaints alleging violations of the prohibition on exclusive 
retransmission consent agreements should: (1) identify the broadcaster 
and MVPD alleged to be parties to the prohibited exclusive agreement; 
(2) provide evidence that the complainant can or does serve the area of 
availability, or portions thereof, of the signal of the broadcaster 
named in the complaint; and (3) provide evidence that the complainant 
has requested retransmission consent to which the broadcaster has 
refused or failed to respond. Following the filing of a complaint, the 
defendant broadcaster must file an answer that specifically admits or 
denies the complainants allegation of the existence of an exclusive 
retransmission consent agreement.
    77. We agree with those commenters who argue that some aspects of 
the program access procedural rules would assist the Commission in 
effectively processing and resolving retransmission consent complaints. 
We believe that it is necessary to impose a limitations period on the 
filing of retransmission consent complaints. In the program access, 
program carriage and open video system contexts, the Commission has 
established a one-year limitations period within which an aggrieved 
party must file a complaint with the Commission. Given that 
retransmission consent complaints are likely to be highly fact-specific 
and dependent on individual recollection, a similar limitations period 
is fair and appropriate with regard to retransmission consent 
complaints. Moreover, a limitations period lends finality and certainty 
to retransmission consent agreements after affording MVPDs an 
appropriate interval to challenge alleged violations of section 
325(b)(3)(C). Accordingly, a complaint filed pursuant to section 
325(b)(3)(C) must be filed within one year of the date any of the 
following occur: (a) a complainant MVPD enters into a retransmission 
consent agreement with a broadcaster that the complainant MVPD alleges 
violate one or more of the rules adopted herein; or (b) a broadcaster 
engages in retransmission consent negotiations with a complainant MVPD 
that the complainant MVPD alleges violate one or more of the rules 
adopted herein, and such negotiation is unrelated to any existing 
contract between the complainant MVPD and the broadcaster; or (c) the 
complainant MVPD has notified the broadcaster that it intends to file a 
complaint with the Commission based on a request to negotiate 
retransmission consent that has been denied, unreasonably delayed, or 
unacknowledged in violation of one or more of the rules adopted herein.

C. Discovery

    78. Several commenters urge the Commission to provide discovery as-
of-right in retransmission consent complaint proceedings. Disney 
observes that since there is no automatic right to discovery in the 
more procedurally complex program access regime--a fortiori there 
should be no discovery in the context of retransmission consent 
proceedings. One commenter asserts that retransmission consent 
agreements and the negotiations surrounding them constitute 
confidential business information that must be protected by strong 
nondisclosure agreements if subject to Commission-directed discovery 
procedures. This commenter offers three limitations on Commission-
directed discovery: (1) the complainant must have made a prima facie 
showing of evidence supporting its claim that a violation has taken 
place; (2) the Commission's discovery order must be narrowly-tailored 
to avoid fishing expeditions; and (3) the Commission must permit mutual 
discovery.
    79. We decline the invitation of several commenters to apply 
discovery as-of-right to the retransmission complaint procedures. 
Interested parties should not interpret our decision as meaning that 
discovery will play no part in the section 325 complaint process. 
Because MVPDs will be present at negotiations, we generally anticipate 
that evidence of a violation of the good faith standard will be 
accessible by the MVPD complainant. Where complainants can demonstrate 
that such information is not available (e.g., agreements entered into 
with other MVPDs) and that discovery is necessary to the proper conduct 
and resolution of a proceeding, the Commission will consider, where 
necessary, the imposition of discovery to develop a more complete 
record and resolve complaints. In this regard, parties are free to 
raise appropriate discovery requests in their pleadings. We will 
protect proprietary information, where necessary, pursuant to 47 CFR 
76.9. Accordingly, we will employ Commission-controlled discovery as 
contemplated in the 47 CFR 76.7 procedures.

D. Remedies

    80. With regard to the appropriate measures for the Commission to 
take after a finding that a broadcaster has violated the good faith 
negotiation requirement, several commenters argue that the sole remedy 
is a Commission directive to engage in further negotiation consistent 
with the Commission's decision. In this regard, other commenters note 
that, in the labor law context, the Supreme Court has determined that 
the NLRB has no power to order parties to enter into a particular 
agreement, or even agree to individual terms. EchoStar argues that this 
is not the limit of the Commission's remedial authority and that the 
Commission should order a broadcaster that has been found to violate 
the Commission's prohibitions to conclude a retransmission consent 
agreement that ``does not include any discriminatory terms not based on 
competitive marketplace considerations.'' Other commenters argue that 
the Commission should adopt a liberal policy of allowing damages, both 
as a deterrent to unlawful conduct and as compensation to injured 
parties. Commenters opposing the imposition of damages note that, while 
Congress granted the Commission express authority to order appropriate 
remedies in the program access context, Congress did not grant such 
express

[[Page 15571]]

authority in the context of the good faith negotiation requirement.
    81. Congress did not empower the Commission to sit in judgement of 
the substantive terms and conditions of retransmission consent 
agreements. Therefore, in situations in which a broadcaster is 
determined to have failed to negotiate in good faith, the Commission 
will instruct the parties to renegotiate the agreement in accordance 
with the Commission's rules and section 325(b)(3)(C). We reiterate, 
however, that the Commission will not require any party to a 
retransmission consent agreement to offer or accept a specific term or 
condition or even to reach agreement as part of such renegotiation.
    82. Although several commenters strongly favor the imposition of 
damages for adjudicated violations of section 325(b)(3)(C), we can 
divine no statutory grant of authority to take such action. Congress 
instructed the Commission to revise its regulations governing 
retransmission consent to prohibit exclusive agreements and require 
good faith negotiation. We can divine no intent in section 325(b)(3)(C) 
to impose damages for violations thereof. This is especially true where 
later in the same statutory provision, Congress expressly granted the 
District Courts of the United States the authority to impose statutory 
damages of up to $25,000 per violation, per day following a Commission 
determination of a retransmission consent violation by a satellite 
carrier. Commenters' reliance on the program access provisions as 
support for a damages remedy in this context is misplaced. The 
Commission's authority to impose damages for program access violations 
is based upon a statutory grant of authority. We note, however, that, 
as with all violations of the Communications Act or the Commission's 
rules, the Commission has the authority to impose forfeitures for 
violations of section 325(b)(3)(C).

E. Expedited Resolution

    83. The Notice requested comment on whether expedited procedures 
are necessary to the appropriate resolution of either exclusivity or 
good faith proceedings. Several commenters argue that, in section 
325(e) of the Communications Act, Congress expressly required expedited 
processing of broadcasters' complaints that satellite carriers have 
illegally retransmitted local broadcaster signals without consent. 
Given this express directive by Congress, these commenters argue that 
the lack of an express directive to expedite good faith negotiation 
complaints indicates Congress' decision that such complaints should not 
receive expedited treatment. U S West, however, notes that the 
Commission has wide discretion to manage its procedures ``as will best 
conduce to the proper dispatch of business and to the ends of 
justice.'' Disney asserts that the Commission must ensure that good 
faith negotiation complaints are resolved expeditiously. In this 
regard, several commenters suggest various time limits within which the 
Commission should resolve complaints related to the good faith 
negotiation requirement and the exclusivity prohibition.
    84. Commenters generally favor expedited action by the Commission 
regarding complaints filed pursuant to section 325(b)(3)(C). Because we 
conclude that, upon expiration of an MVPD's carriage rights under the 
section 325(b)(2)(E) six-month compulsory license period or an existing 
retransmission consent agreement, an MVPD may not continue carriage of 
a broadcaster's signal while a retransmission consent complaint is 
pending at the Commission, it is incumbent upon the Commission to 
expedite the resolution of these claims. We are mindful that Congress 
has imposed no express time limits for Commission resolution of 
retransmission consent complaints, whereas it has done so in other 
provisions of SHVIA and the Communications Act. We believe, however, 
that expeditious resolution of section 325(b)(3)(C) complaints is 
entirely consistent with Congress' statutory scheme. We believe that, 
to ensure efficient functioning of the retransmission consent process, 
and to avoid protracted loss of service to subscribers, expedited 
action on these claims is necessary.
    85. While commenters propose various time periods within which the 
Commission should resolve retransmission consent complaints, we believe 
the spectrum of issues that may be involved in these proceedings does 
not lend itself to selecting one time period by which the Commission 
should resolve all complaints brought under section 325(b)(3)(C). For 
example, it would be inefficient and arbitrary to apply the same time 
period to a clear violation, such as outright refusal to negotiate, and 
a violation of the test involving analysis of the totality of the 
circumstances. Bearing in mind that the Commission must give maximum 
priority to matters involving statutory time limits, we instruct 
Commission staff to give priority to section 325(b)(3)(C) complaints 
and resolve them in an expeditious manner, considering the complexity 
of the issues raised. We will monitor the resolution times of 
individual retransmission consent complaints and, if necessary, we will 
revisit this issue in the future.

F. Burden of Proof

    86. The Notice sought comment on how the burden of proof should be 
allocated. In this regard, we asked for comment on whether the burden 
should rest with the complaining party until it has made a prima facie 
showing and then shift to the defending party and what would constitute 
a prima facie showing sufficient to shift the burden to the defending 
party.
    87. Arguing that, consistent with NLRB cases in which the party 
claiming bad faith bears the burden of proof, several commenters 
counsel the Commission to provide that the burden of proof should 
always be on the MVPD complainant. Indeed, several commenters assert 
that the Commission should adopt procedural rules that permit it to 
dismiss retransmission consent complaints summarily if the MVPD fails 
to satisfy a specified threshold standard.
    88. Other commenters support a shifting of the burden of proof 
after a prima facie demonstration. Commenters assert that such a 
shifting is appropriate because of the difficulty of conclusively 
establishing the existence of an exclusive agreement or lack of good 
faith. For exclusivity complaints, DIRECTV and EchoStar suggest that a 
complaining party only provide affidavits or other documentary evidence 
to support its belief that a prohibited exclusive contract exists, and 
the burden of proof then shifts to the defendant to refute the 
existence of such agreement. For good faith complaints, DIRECTV and 
EchoStar suggest that the complaining party should provide a 
description of the conduct complained of, including conduct alleged to 
violate any of the good faith negotiation standards supported by any 
documentary evidence or an affidavit signed by an officer of the 
complaining MVPD setting forth the basis for the complainant's 
allegations. After the burden has shifted to the broadcaster, 
commenters urge the Commission to require the broadcaster to include 
with its answer a copy of any retransmission consent agreement the 
complainant alleges to contain unlawfully different terms and 
conditions, subject to Commission confidentiality protections. Several 
commenters maintain that the Commission should impose sanctions against 
filers of frivolous complaints. Network Affiliates argue that the 
adoption of a shifting burden mechanism will encourage the filing of 
frivolous complaints during the

[[Page 15572]]

negotiation period in order to intimidate broadcasters.
    89. Commenters advance cogent arguments both for and against 
shifting the burden to the broadcaster after a prima facie showing by a 
complaining MVPD. However, as in labor law context, we believe the 
burden should rest with the MVPD complainant to establish a violation 
of section 325(b)(3)(C). This conclusion is also consistent with our 
belief that generally the evidence of a violation of the good faith 
standard will be accessible by the complainant. This should not be 
interpreted as permitting a broadcaster to remain mute in the face of 
allegations of a section 325(b)(3)(C) violation. After service of a 
complaint, a broadcaster must file an answer as required by 47 CFR 
76.7, which advises the parties and the Commission fully and completely 
of any and all defenses, responds specifically to all material 
allegations of the complaint, and admits or denies the averments on 
which the party relies. In addition, where necessary, the Commission 
has discretion to impose discovery requests on a defendant to a section 
325(b)(3)(C) complaint. However, in the end, the complainant must bear 
the burden of proving that a violation occurred.

G. Sunset of Rules

    90. Section 325(b)(3)(C) directs that the regulations adopted by 
the Commission prohibit exclusive carriage agreements and require good 
faith negotiation of retransmission consent agreements ``until January 
1, 2006.'' The Commission sought comment on whether the Commission's 
rules regarding exclusive carriage agreements and good faith 
negotiation should automatically sunset on this date. On its face, this 
provision would seem to sunset the prohibition on exclusive 
retransmission consent agreements and good faith negotiation for all 
MVPDs. Under this reading of the statute, the Commission's rule 
prohibiting exclusive retransmission consent agreements for cable 
operators would be deemed abrogated as of January 1, 2006.
    91. The broadcast industry argues that this is the correct 
interpretation of SHVIA. One commenter states that ``[b]ecause the 
statutory language is plain on its face, and because Congress acted 
with knowledge of the existing regulatory prohibition, it is clear that 
Congress intended to abrogate the Commission's existing rule 
prohibiting exclusive retransmission consent agreements with cable 
operators.'' This commenter additionally argues that the prohibition on 
exclusive retransmission consent agreements was meant to correct 
imbalances in the marketplace, and thus was established as a temporary 
solution.
    92. The satellite industry and other MVPD representatives disagree 
with this interpretation of the statute. Two commenters argue that the 
date set out in the statute establishes a minimum time frame on the 
prohibition of exclusive retransmission consent agreements and the good 
faith negotiation requirement. Others state that interpreting the 
statute as sunsetting the Commission's prohibitions on exclusive 
retransmission consent agreements runs contrary to the intent of 
Congress. Specifically, they argue that nothing in the legislative 
history demonstrates an intent to sunset section 325(b)(3)(C), and 
without an affirmative statement of intent, no such intent may be 
inferred. Commenters argue that to sunset the prohibition would result 
in anti-competitive behavior, and would thus undermine the goals of 
SHVIA. Finally, many commenters from the satellite industry and the 
MVPD industry argue that the Commission has authority to extend the 
prohibition on exclusive retransmission consent agreements beyond 
January 1, 2006, if the Commission determines that such an extension 
would be in the public interest.
    93. A third approach to this issue is advanced by some 
representatives of the satellite industry and the cable industry. Time 
Warner argues that the Commission should make no determination at this 
point over whether to sunset the prohibition, but rather should make a 
decision closer to the expiration date set out in the statute.
    94. We believe that the statute is clear on its face, and that the 
correct interpretation of the language ``until January 1, 2006'' is 
that the prohibitions on exclusive retransmission consent agreements 
and the good faith negotiation requirement terminate on that date. We 
agree with commentators who argue that the provisions of section 
325(b)(3)(C) are meant to foster competition. However, in the absence 
of guidance from Congress as to the Commission's authority after this 
date, we can not assume that Congress was establishing a minimum time 
frame and that the Commission has authority to promulgate rules 
prohibiting exclusive retransmission consent agreements and requiring 
good faith negotiation beyond January 1, 2006. Congress has 
demonstrated its ability to craft legislation that established a sunset 
date which the Commission has express authority to extend. Such 
language is not contained in SHVIA. The statute clearly states that the 
provisions would last ``until January 1, 2006.'' The legislative 
history does not express any intent to extend such provisions. Thus, we 
must interpret section 325(b)(3)(C) as written and that January 1, 2006 
is meant to be the sunset date for the prohibition of exclusive 
retransmission consent agreements and the rules on good faith 
retransmission consent negotiations.

VII. Administrative Matters

    95. Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act (``RFA''), see 5 U.S.C. 603, an Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the 
Notice. The Commission sought written public comments on the possible 
significant economic impact of the proposed policies and rules on small 
entities in the Notice, including comments on the IRFA. Pursuant to the 
RFA, see 5 U.S.C. 604, a Final Regulatory Flexibility Analysis is 
contained in this document.
    96. Paperwork Reduction Act of 1995 Analysis. The actions herein 
have been analyzed with respect to the Paperwork Reduction Act of 1995 
and found to impose no new or modified reporting and recordkeeping 
requirements or burdens on the public.
    97. Effective Date. As discussed, section 325(b)(2)(E) of the 
Communications Act grants satellite carriers a six-month period during 
which they may retransmit the signals of local broadcasters without a 
broadcaster's express retransmission consent. We have adopted these 
rules before the end of the six-month period provided by section 
325(b)(2)(E) so that MVPDs, particularly satellite carriers, and 
broadcasters understand their rights and obligations under section 
325(b)(3)(C) before that period expires. To afford parties the maximum 
amount of time to negotiate retransmission consent in good faith and to 
file complaints pursuant to section 325(b)(3)(C) before the expiration 
of the six-month period, this First Report and Order will be effective 
upon publication in the Federal Register. We find good cause exists 
under the Administrative Procedure Act (``APA'') to have the rules 
adopted in this First Report and Order be effective March 23, 2000 
pursuant to section 553(d)(3) of the APA. Prompt effectiveness of these 
rules will provide a framework under which broadcasters and satellite 
carriers can achieve retransmission consent before the expiration of 
the six-month period set forth in section 325(b)(2)(E).

[[Page 15573]]

Final Regulatory Flexibility Analysis

    a. As required by the Regulatory Flexibility Act (``RFA''), an 
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in 
the Notice of Proposed Rulemaking (``Notice'') in CS Docket No. 99-363, 
FCC 99-406. The Commission sought written public comments on the 
proposals in the Notice, including comment on the IRFA. This Final 
Regulatory Flexibility Analysis (``FRFA'') conforms to the RFA.
    b. Need for, and Objectives of, this Report and Order. Section 1009 
of the Satellite Home Viewer Improvement Act (``SHVIA''), codified as 
section 325 of the Communications Act of 1934, as amended (``Act''), 47 
U.S.C. 325, instructs the Commission to revise the regulations 
governing the exercise by television broadcast stations of the right to 
grant retransmission consent. Congress directed the Commission to 
devise regulations, procedures, and standards implementing a good faith 
requirement in the negotiation of agreements in connection with the 
transmission of television broadcast station signals by multichannel 
video programming distributors (``MVPDs''). This Report and Order 
adopts rules governing negotiation of retransmission consent between 
broadcasters and all MVPDs which will help to ensure that negotiations 
are conducted in an atmosphere of honesty, clarity of process and good 
faith. In particular, this proceeding provides a clear framework under 
which broadcasters and satellite carriers can achieve retransmission 
consent before expiration and interruption of local broadcast signals 
that satellite carriers have begun to provide their subscribers in many 
cities across the nation since the enactment of the SHVIA. Further, 
pursuant to the SHVIA, this proceeding also addresses implementing 
rules prohibiting exclusive retransmission consent agreements. Finally, 
the Report and Order adopts a complaint process to assist the 
Commission in enforcing the statutory obligations related to section 
325(b)(3)(C).
    c. Summary of Significant Issues Raised by Public Comments in 
Response to the IRFA. We received one comment in direct response to the 
IRFA. The American Cable Association (``ACA'') argues that smaller 
cable systems play an important role in the distribution of local 
signals in rural America and smaller communities and that competitive 
imbalances from broadcaster abuses relating to retransmission consent 
threatens this role. In particular, ACA states that the ``IFRA remains 
devoid of any meaningful analysis of how any retransmission consent 
rules that may result would impact smaller cable businesses and their 
systems, nor does it propose alternative relief to accommodate the 
unique needs of those businesses. Instead, the Commission generally 
believes that entity size has no bearing on the issues raised in the 
Notice.'' We note, however, that in the IFRA we discussed the 
retransmission consent election process and the possibility that 
differences among MVPDs might justify different election schemes. We 
stated that we had not proposed to treat small entities differently in 
this regard, but sought comment on the possibility. We also sought 
comment on four specific alternatives that might lessen the compliance 
burden on small entities: (1) the establishment of differing compliance 
or reporting requirements or timetables that take into account the 
resources available to small entities; (2) the clarification, 
consolidation, or simplification of compliance or reporting 
requirements under the rule for small entities; (3) the use of 
performance, rather than design standards: and (4) an exemption from 
coverage of the rule, or any part thereof, for small entities. None of 
the other parties in this proceeding filed comments on how issues 
raised in the Notice would impact small entities. Below, in the section 
of the FRFA titled, ``Steps Taken to Minimize Significant Impact on 
Small Entities, and Significant Alternatives Considered,'' we discuss 
further ACA's comment concerning the possible impact on small entities.
    d. Description and Estimate of the Number of Small Entities To 
Which the Rules Will Apply. The RFA directs the Commission to provide a 
description of and, where feasible, an estimate of the number of small 
entities that will be affected by the proposed rules. The RFA defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small business 
concern'' under Section 3 of the Small Business Act. Under the Small 
Business Act, a small business concern is one which: (1) is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
Small Business Administration (``SBA''). The rules we adopt as a result 
of the Report and Order will affect television station licensees, cable 
operators, and other MVPDs.
    e. Television Stations. The Small Business Administration defines a 
television broadcasting station that has no more than $10.5 million in 
annual receipts as a small business. Television broadcasting stations 
consist of establishments primarily engaged in broadcasting visual 
programs by television to the public, except cable and other pay 
television services. Included in this industry are commercial, 
religious, educational, and other television stations. Also included 
are establishments primarily engaged in television broadcasting and 
which produce taped television program materials. Separate 
establishments primarily engaged in producing taped television program 
materials are classified under another SIC number. There were 1,509 
television stations operating in the nation in 1992. That number has 
remained fairly constant as indicated by the approximately 1,579 
operating full power television broadcasting stations in the nation as 
of May 31, 1998.
    f. Thus, the rules will affect many of the approximately 1,579 
television stations; approximately 1,200 of those stations are 
considered small businesses. These estimates may overstate the number 
of small entities since the revenue figures on which they are based do 
not include or aggregate revenues from non-television affiliated 
companies.
    g. In addition to owners of operating television stations, any 
entity that seeks or desires to obtain a television broadcast license 
may be affected by the rules contained in this item. The number of 
entities that may seek to obtain a television broadcast license is 
unknown.
    h. Small MVPDs: SBA has developed a definition of small entities 
for cable and other pay television services, which includes all such 
companies generating $11 million or less in annual receipts. This 
definition includes cable system operators, direct broadcast satellite 
services, multipoint distribution systems, satellite master antenna 
systems and subscription television services. According to the Census 
Bureau data from 1992, there were 1,758 total cable and other pay 
television services and 1,423 had less than $11 million in revenue. We 
address below services individually to provide a more precise estimate 
of small entities.
    i. Cable Systems: The SBA has developed a definition of small 
entities for cable and other pay television services under Standard 
Industrial Classification 4841 (SIC 4841), which covers subscription 
television services, which includes all such companies with annual 
gross revenues of $11 million or less. This definition includes cable 
systems operators, closed circuit

[[Page 15574]]

television services, direct broadcast satellite services, multipoint 
distribution systems, satellite master antenna systems and subscription 
television services. According to the Census Bureau, there were 1,323 
such cable and other pay television services generating less than $11 
million in revenue that were in operation for at least one year at the 
end of 1992.
    j. The Commission has developed, with SBA's approval, its own 
definition of a small cable system operator for the purposes of rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving fewer than 400,000 subscribers nationwide. Based on our 
most recent information, we estimate that there were 1439 cable 
operators that qualified as small cable companies at the end of 1995. 
Since then, some of those companies may have grown to serve over 
400,000 subscribers, and others may have been involved in transactions 
that caused them to be combined with other cable operators. The 
Commission's rules also define a ``small system,'' for the purposes of 
cable rate regulation, as a cable system with 15,000 or fewer 
subscribers. We do not request nor do we collect information concerning 
cable systems serving 15,000 or fewer subscribers and thus are unable 
to estimate at this time the number of small cable systems nationwide.
    k. The Communications Act also contains a definition of a small 
cable system operator, which is ``a cable operator that, directly or 
through an affiliate, serves in the aggregate fewer than 1% of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that there are 61,700,000 
subscribers in the United States. Therefore, an operator serving fewer 
than 617,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all of 
its affiliates, do not exceed $250 million in the aggregate. Based on 
available data, we find that the number of cable operators serving 
617,000 subscribers or less totals approximately 1450. Although it 
seems certain that some of these cable system operators are affiliated 
with entities whose gross annual revenues exceed $250,000,000, we are 
unable at this time to estimate with greater precision the number of 
cable system operators that would qualify as small cable operators 
under the definition in the Communications Act. It should be further 
noted that recent industry estimates project that there will be a total 
64,000,000 subscribers and we have based our fee revenue estimates on 
that figure.
    l. Open Video System (``OVS''): The Commission has certified eleven 
OVS operators. Of these eleven, only two are providing service. 
Affiliates of Residential Communications Network, Inc. (``RCN'') 
received approval to operate OVS systems in New York City, Boston, 
Washington, D.C. and other areas. RCN has sufficient revenues to assure 
us that they do not qualify as small business entities. Little 
financial information is available for the other entities authorized to 
provide OVS that are not yet operational. Given that other entities 
have been authorized to provide OVS service but have not yet begun to 
generate revenues, we conclude that at least some of the OVS operators 
qualify as small entities.
    m. Multichannel Multipoint Distribution Service (``MMDS''): The 
Commission refined the definition of ``small entity'' for the auction 
of MMDS as an entity that together with its affiliates has average 
gross annual revenues that are not more than $40 million for the 
proceeding three calendar years. This definition of a small entity in 
the context of the Commission's Report and Order concerning MMDS 
auctions that has been approved by the SBA.
    n. The Commission completed its MMDS auction in March, 1996 for 
authorizations in 493 basic trading areas (``BTAs''). Of 67 winning 
bidders, 61 qualified as small entities. Five bidders indicated that 
they were minority-owned and four winners indicated that they were 
women-owned businesses. MMDS is an especially competitive service, with 
approximately 1,573 previously authorized and proposed MMDS facilities. 
Information available to us indicates that no MDS facility generates 
revenue in excess of $11 million annually. We conclude that there are 
approximately 1,634 small MMDS providers as defined by the SBA and the 
Commission's auction rules.
    o. DBS: There are four licenses of DBS services under part 100 of 
the Commission's Rules. Three of those licensees are currently 
operational. Two of the licensees which are operational have annual 
revenues which may be in excess of the threshold for a small business. 
The Commission, however, does not collect annual revenue data for DBS 
and, therefore, is unable to ascertain the number of small DBS 
licensees that could be impacted by these proposed rules. DBS service 
requires a great investment of capital for operation, and we 
acknowledge that there are entrants in this field that may not yet have 
generated $11 million in annual receipts, and therefore may be 
categorized as a small business, if independently owned and operated.
    p. HSD: The market for HSD service is difficult to quantify. 
Indeed, the service itself bears little resemblance to other MVPDs. HSD 
owners have access to more than 265 channels of programming placed on 
C-band satellites by programmers for receipt and distribution by MVPDs, 
of which 115 channels are scrambled and approximately 150 are 
unscrambled. HSD owners can watch unscrambled channels without paying a 
subscription fee. To receive scrambled channels, however, an HSD owner 
must purchase an integrated receiver-decoder from an equipment dealer 
and pay a subscription fee to an HSD programming package. Thus, HSD 
users include: (1) viewers who subscribe to a packaged programming 
service, which affords them access to most of the same programming 
provided to subscribers of other MVPDs; (2) viewers who receive only 
non-subscription programming; and (3) viewers who receive satellite 
programming services illegally without subscribing. Because scrambled 
packages of programming are most specifically intended for retail 
consumers, these are the services most relevant to this discussion.
    q. According to the most recently available information, there are 
approximately 30 program packages nationwide offering packages of 
scrambled programming to retail consumers. These program packages 
provide subscriptions to approximately 2,314,900 subscribers 
nationwide. This is an average of about 77,163 subscribers per program 
package. This is substantially smaller than the 400,000 subscribers 
used in the commission's definition of a small MSO. Furthermore, 
because this is an average, it is likely that some program packages may 
be substantially smaller.
    r. SMATVs: Industry sources estimate that approximately 5,200 SMATV 
operators were providing service as of December, 1995. Other estimates 
indicate that SMATV operators serve approximately 1.05 million 
residential subscribers as of September, 1996. The ten largest SMATV 
operators together pass 815,740 units. If we assume that these SMATV 
operators serve 50% of the units passed, the ten largest SMATV 
operators serve approximately 40% of the total number of SMATV 
subscribers. Because these operators are not rate regulated, they are 
not required to file financial data with the Commission. Furthermore, 
we are not aware of any privately published financial

[[Page 15575]]

information regarding these operators. Based on the estimated number of 
operators and the estimated number of units served by the largest ten 
SMATVs, we tentatively conclude that a substantial number of SMATV 
operators qualify as small entities.
    s. Description of Projected Reporting, Recordkeeping and other 
Compliance Requirements. This Report and Order establishes a series of 
rules implementing good faith guidelines in connection with 
retransmission consent agreements between television broadcast stations 
and all MVPDs. The good faith negotiation requirement applies only to 
broadcasters, however the conduct of MVPDs that seek retransmission 
consent is not irrelevant to the Commission in determining whether a 
broadcaster has complied with its obligation to negotiate 
retransmission consent in good faith. During the process of developing 
and negotiating retransmission consent, parties will be guided by the 
principles and provisions established in this Report and Order. While 
the substance of the agreements should be left to the market, the 
Commission is responsible for enforcing the process of good faith 
negotiation. We have established standards, practices, and conduct, 
derived principally from NLRB precedent, that will be applicable to all 
retransmission consent negotiations. First among the negotiation 
standards is that a broadcaster may not refuse to negotiate with an 
MVPD regarding retransmission consent. Additional standards outline 
broadcaster conduct required to meet the good faith standard in 
retransmission consent negotiation.
    t. Pursuant to the directive by Congress, this proceeding also 
describes and explains the limits relating to exclusivity agreements 
and implements rules in that regard. Specifically, the SHVIA prohibits 
all exclusive retransmission agreements for television broadcast 
stations and MVPDs prior to January 1, 2006. We interpret the phrase 
``engaging in'' to proscribe not only entering into exclusive 
agreements, but also negotiation and execution of agreements granting 
exclusive retransmission consent. The Commission also establishes 
complaint procedures and sets forth the requirements of complainants to 
address situations where there is evidence of exclusive retransmission 
consent agreements.
    u. In the event that the good faith negotiation obligation 
provisions are not adhered to, enforcement procedures also have been 
established to report concerns and complaints and address disputes 
between parties. An MVPD believing itself aggrieved, may file a 
complaint with the Commission. Based upon pleadings filed, a 
determination will be made by the Commission on the issue of good 
faith.
    v. Steps Taken to Minimize Significant Impact on Small Entities, 
and Significant Alternatives Considered. In this Report and Order, of 
major importance is the principle of sustaining an environment where 
there will be fairness, fair dealings, and true competition between 
parties in the process of developing agreements on retransmission 
consent. This proceeding develops a definite framework for 
retransmission consent agreements so that television broadcast stations 
and MVPDs are aware of their rights and obligations under section 
325(b)(3)(C).
    w. As noted, American Cable Association (``ACA'') asserts that 
because retransmission consent agreements have been largely 
unrestricted, broadcasters have tried to extract unreasonable 
concessions in return for retransmission consent from smaller cable 
systems and will continue to do so. It states that the Commission must 
establish sufficient safeguards to protect individual smaller cable 
businesses. ACA suggests that the Commission should articulate its 
expectations regarding good faith negotiations and extend those 
obligations to all retransmission consent negotiations, including 
cable. We do not believe it necessary to develop specific rules for 
particular subsets of the MVPD market. The good faith negotiation 
requirement applies to a broadcaster's negotiations with all MVPDs, 
including small cable operators. The Report and Order adopts rules to 
implement this obligation with regard to all broadcaster negotiations 
with all MVPDs. For example, we set forth good faith negotiations 
standards, which proscribe the actions or practices that would violate 
a broadcast television station's duty to negotiate retransmission 
consent agreements in good faith. Further, procedures to address 
exclusivity complaints are also established. Small businesses are 
subject to these provisions and will benefit from the protection 
provided. We believe this sufficiently ameliorates ACA's concerns.
    x. Report to Congress: The Commission will send a copy of this 
Report and Order, including this FRFA, in a report to Congress pursuant 
to the Small Business Regulatory Enforcement Fairness Act of 1996, 5 
U.S.C. 801(a)(1)(A). A copy of this Report and Order and FRFA (or 
summary thereof) will also be published in the Federal Register, 
pursuant to 5 U.S.C. 604(b), and will be sent to the Chief Counsel for 
Advocacy of the Small Business Administration.

VIII. Ordering Clauses

    98. Pursuant to authority found in sections 4(i) 4(j), 303(r) and 
325 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 
154(j), 303(r) and 325, the Commission's rules are hereby amended as 
set forth.
    99. The rule amendments set forth will become effective March 23, 
2000.
    100. The Consumer Information Bureau, Reference Information Center 
shall send this First Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 76 Cable Television Service.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Rule Changes

    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. In Sec. 76.64 paragraph (m) is revised to read as follows:


Sec. 76.64  Retransmission Consent.

* * * * *
    (m) Exclusive retransmission consent agreements are prohibited. No 
television broadcast station shall make or negotiate and agreement with 
one multichannel video programming distributor for carriage to the 
exclusion of other multichannel video programming distributors. This 
paragraph shall terminate at midnight on December 31, 2005.
* * * * *

    3. Section 76.65 is added to Subpart D to read as follows:


Sec. 76.65  Good faith and exclusive retransmission consent complaints.

    (a) Duty to negotiate in good faith. Television broadcast stations 
that provide retransmission consent shall negotiate in good faith the 
terms and conditions of such agreements to fulfill the duties 
established by section

[[Page 15576]]

325(b)(3)(C) of the Communciations Act 47 U.S.C. 325; provided, 
however, that it shall not be a failure to negotiate in good faith if 
the television broadcast station proposes or enters into retransmission 
consent agreements containing different terms and conditions, including 
price terms, with different multichannel video programming distributors 
if such different terms and conditions are based on competitive 
marketplace considerations. If a television broadcast station 
negotiates with multichannel video programming distributors in 
accordance with the rules and procedures set forth in this section, 
failure to reach an agreement is not an indication of a failure to 
negotiate in good faith.
    (b) Good faith negotiation.--(1) Standards. The following actions 
or practices violate a broadcast television station's duty to negotiate 
retransmission consent agreements in good faith:
    (i) Refusal by a television broadcast station to negotiate 
retransmission consent with any multichannel video programming 
distributor;
    (ii) Refusal by a television broadcast station to designate a 
representative with authority make binding representations on 
retransmission consent;
    (iii) Refusal by a television broadcast station to meet and 
negotiate retransmission consent at reasonable times and locations, or 
acting in a manner that unreasonably delays retransmission consent 
negotiations;
    (iv) Refusal by a television broadcast station to put forth more 
than a single, unilateral proposal.
    (v) Failure of a television broadcast station to respond to a 
retransmission consent proposal of a multichannel video programming 
distributor, including the reasons for the rejection of any such 
proposal;
    (vi) Execution by a television broadcast station of an agreement 
with any party, a term or condition of which, requires that such 
television broadcast station not enter into a retransmission consent 
agreement with any multichannel video programming distributor; and
    (vii) Refusal by a television broadcast station to execute a 
written retransmission consent agreement that sets forth the full 
understanding of the television broadcast station and the multichannel 
video programming distributor.
    (2) Totality of the circumstances. In addition to the standards set 
forth in section 76.65(b)(1), a multichannel video programming 
distributor may demonstrate, based on the totality of the circumstances 
of a particular retransmission consent negotiation, that a television 
broadcast station breached its duty to negotiate in good faith as set 
forth in section 76.65(a).
    (c) Good faith negotiation and exclusivity complaints. Any 
multichannel video programming distributor aggrieved by conduct that it 
believes constitutes a violation of the regulations set forth in this 
Sec. 76.64(m) may commence an adjudicatory proceeding at the Commission 
to obtain enforcement of the rules through the filing of a complaint. 
The complaint shall be filed and responded to in accordance with the 
procedures specified in Sec. 76.7.
    (d) Burden of proof. In any complaint proceeding brought under this 
section, the burden of proof as to the existence of a violation shall 
be on the complainant.
    (e) Time limit on filing of complaints. Any complaint filed 
pursuant to this subsection must be filed within one year of the date 
on which one of the following events occurs:
    (1) A complainant multichannel video programming provider enters 
into a retransmission consent agreement with a television broadcast 
station that the complainant alleges to violate one or more of the 
rules contained in this subpart; or
    (2) A television broadcast station engages in retransmission 
consent negotiations with a complainant that the complainant alleges to 
violate one or more of the rules contained in this subpart, and such 
negotiation is unrelated to any existing contract between the 
complainant and the television broadcast station; or
    (3) The complainant has notified the television broadcast station 
that it intends to file a complaint with the Commission based on a 
request to negotiate retransmission consent that has been denied, 
unreasonably delayed, or unacknowledged in violation of one or more of 
the rules contained in this subpart.
    (f) Termination of rules. This section shall terminate at midnight 
on December 31, 2005.

[FR Doc. 00-7163 Filed 3-22-00; 8:45 am]
BILLING CODE 6712-01-P