[Federal Register Volume 66, Number 182 (Wednesday, September 19, 2001)]
[Rules and Regulations]
[Pages 48219-48220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23267]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[CS Docket No. 99-363; FCC 01-229]


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; order on reconsideration.

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SUMMARY: This document resolves petitions for reconsideration filed by 
US WEST, Inc. (``US WEST'') and the Wireless Communications Association 
International, Inc. (``WCA'') of the Commission's First Report and 
Order in Implementation of the Satellite Home Viewer Improvement Act of 
1999, Retransmission Consent Issues: Good Faith Negotiation and 
Exclusivity, which adopted 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.

DATES: Effective September 19, 2001.

FOR FURTHER INFORMATION CONTACT: Steve Broeckaert at (202) 418-7200 or 
via internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
on Reconsideration, FCC 01-229, adopted August 10, 2001; released 
August 15, 2001. The full text of the Commission's Order on 
Reconsideration 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 Order on Reconsideration

Burden of Proof

    In the First Report and Order, 65 FR 15559 (March 23, 2000), the 
Commission placed the burden of proof on the MVPD complainant to 
establish that a broadcaster violated its duty to negotiate 
retransmission consent in good faith. The Commission found this 
conclusion to be consistent with labor law precedent, which also places 
the burden on the complainant. The Commission also found that placing 
the burden of proof on the MVPD complainant to be consistent with its 
belief that generally the evidence of a violation of the good faith 
standard will be accessible by the complainant.
    WCA and US WEST assert that the Commission should reconsider its 
decision to impose the burden of proof exclusively on the MVPD 
complainant, especially in cases in which the Commission presumes that 
the defendant broadcaster has not acted in good faith. Specifically, 
petitioners request that the Commission amend its rule to provide that 
when an MVPD's complaint alleges facts that, if true, would establish a 
prima facie case that a Commission presumption against a broadcaster 
should apply, the burden of proof will shift to the broadcaster.
    We decline to establish the burden-shifting procedure suggested by 
US WEST and WCA. While we agree with petitioners that the Commission 
``enjoys express statutory authority to conduct its proceedings in such 
a manner as will best conduce to the proper dispatch of business and to 
the ends of justice,'' US WEST and WCA have not persuaded us that 
reconsideration in this instance is warranted or appropriate. US WEST 
and WCA correctly state that the Commission, in the First Report and 
Order, determined that certain bargaining proposals, including 
proposals based on the exercise of market power by a broadcast station 
or other MVPDs in the market or proposals that result from agreements 
not to compete or to fix prices, are presumptively not consistent with 
the good faith negotiation requirement. We fail to see, however, how 
the establishment of such presumptions would lead to the shifting of 
the burden of proof for merely alleging facts that, if

[[Page 48220]]

true, would establish a prima facie case of such presumption. Under 
such a framework, any complainant would be able to shift the burden of 
proof merely by alleging that a retransmission consent proposal 
demonstrates the exercise of market power by the broadcaster or another 
MVPD in the market. We do not see such a result intended in either the 
language or the legislative history of the statute, and despite 
petitioner's argument to the contrary, we fail to perceive a sensible 
way to interpret Congress' silence on this issue as a reason to shift 
the burden of proof to the broadcaster in such cases. Nor do we believe 
that our procedures will allow a broadcaster to be other than vigorous 
in its defense. As the Commission noted in the First Report and Order, 
placing the burden of proof on the complainant:

* * * should not be interpreted as permitting a broadcaster to 
remain mute in the face of allegations of a [good faith] violation. 
After service of a complaint, a broadcaster must file an answer as 
required by Section 76.7 [of the Commission's rules], 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 [good faith] 
complaint. However, in the end, the complainant must bear the burden 
of proving that a violation occurred.

Petitioners have failed to demonstrate that the burden of proof of 
establishing a good faith violation should rest elsewhere. Accordingly, 
US WEST and WCA's request for reconsideration on this issue is denied.

Limitations Period

    In the First Report and Order, the Commission established a one 
year limitations period within which a complainant must bring any 
complaint related to a violation of the good faith retransmission 
consent negotiation requirement, holding, in part, that a good faith:

complaint filed pursuant to section 325(b)(3)(C) must be filed 
within one year of the date any of the following occur * * * (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 * * *.

US WEST and WCA are concerned that, in certain circumstances, this 
provision of the limitations period could be applied to retransmission 
consent renewal negotiations thereby barring claims for good faith 
violations occurring during any renewal negotiations. Petitioners 
request that the Commission clarify that negotiations between an MVPD 
and a broadcaster to renew an existing retransmission consent agreement 
are not related to the parties' existing contract for purposes of the 
one-year limitations period, and that such negotiations trigger a new 
one-year filing period.
    We grant US WEST and WCA's request for clarification. Section 
325(b)(3)(C) imposes an affirmative duty on broadcasters to negotiate 
retransmission consent in good faith until 2006. This duty applies to 
all retransmission consent negotiations during this period, including 
renewal negotiations. The intent in adopting Sec. 76.65(e)(2) of the 
Commission's rules was to ensure that complainants do not sit on 
grievances and that they bring good faith complaints in a timely 
manner. For example, if a broadcaster and MVPD negotiate a five-year 
retransmission consent agreement in Year 1 and subsequently encounter a 
dispute regarding the proper interpretation of a provision of such 
agreement in Year 3, Sec. 76.65(e)(2) would bar a good faith complaint 
based upon the negotiations and contract executed in Year 1. On the 
other hand, if a broadcaster and MVPD negotiate and execute a five-year 
retransmission consent agreement in Year 1 and subsequently commence 
negotiations to renew or extend such consent in Year 4, any alleged 
violations of the good faith requirement stemming from such Year 4 
negotiations are subject to complaint for a one-year period. An MVPD 
may not, however, use the commencement of such renewal or extension 
negotiations to raise good faith allegations solely related to the 
negotiations and contract executed in Year 1.

Effect of the Good Faith Rules on Pre-Existing Negotiations

    US WEST asks the Commission to clarify that a broadcaster's 
obligation to negotiate after the effective date of the rules 
established in the First Report and Order attaches regardless of any 
negotiations that took place between the broadcaster and MVPD prior 
thereto. We grant US WEST's request for clarification. A broadcaster's 
duty to negotiate retransmission consent in good faith commenced upon 
the effective date of our good faith rules regardless of any prior 
course of negotiations.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 01-23267 Filed 9-18-01; 8:45 am]
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