[Federal Register Volume 70, Number 56 (Thursday, March 24, 2005)]
[Proposed Rules]
[Pages 15048-15051]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5851]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 05-89; FCC 05-49]


Implementation of Section 207 of the Satellite Home Viewer 
Extension and Reauthorization Act of 2004, Reciprocal Bargaining 
Obligations

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: In this document, the Commission seeks comment on the 
implementation of Section 207 of the Satellite Home Viewer Extension 
and Reauthorization Act of 2004 (``SHVERA''). Section 207 extends 
section 325(b)(3)(C) of the Communications Act until 2010 and amends 
that section to impose good faith retransmission consent bargaining 
obligations on multichannel video programming distributors (``MVPDs''). 
The Commission tentatively concludes that it should amend its existing 
good faith retransmission consent bargaining rules to apply equally to 
both broadcasters and MVPDs. The Commission also seeks comment on 
appropriate good faith retransmission consent negotiating standards for 
out-of-market significantly viewed television broadcast stations.

DATES: Comments for this proceeding are due on or before April 25, 
2005; reply comments are due on or before May 9, 2005. Written comments 
on the proposed information collection requirements contained in the 
NPRM must be submitted by the public, the Office of Management and 
Budget (OMB), and other interested parties on or before May 23, 2005.

ADDRESSES: You may submit comments, identified by [docket number and/or 
rulemaking number], by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Federal Communications Commission's Web site: http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.
     People with Disabilities: Contact the FCC to request 
reasonable accommodations (accessible format

[[Page 15049]]

documents, sign language interpreters, CART, etc.) by e-mail: 
[email protected] or phone: 202-418-0530 or TTY: 202-418-0432.
    For detailed instructions for submitting comments and additional 
information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Steven Broeckaert, [email protected] of the 
Media Bureau, Policy Division, (202) 418-2120. For additional 
information concerning the Paperwork Reduction Act information 
collection requirements contained in the NPRM, contact Cathy Williams, 
Federal Communications Commission, 445 12th St, SW., Room 1-C823, 
Washington, DC 20554, or via the Internet to [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Notice 
of Proposed Rulemaking (NPRM), FCC 05-49, adopted on March 2, 2005, and 
released on March 7, 2005. The full text of this document is available 
for public inspection and copying during regular business hours in the 
FCC Reference Center, Federal Communications Commission, 445 12th 
Street, SW., CY-A257, Washington, DC 20554. These documents will also 
be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents will 
be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) 
The complete text may be purchased from the Commission's copy 
contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. 
To request this document in accessible formats (computer diskettes, 
large print, audio recording, and Braille), send an e-mail to 
[email protected] or call the Commission's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Initial Paperwork Reduction Act of 1995 Analysis

    This document does not contain proposed information collection 
requirements subject to the Paperwork Reduction Act of 1995, Public Law 
104-13. In addition, therefore, it does not contain any proposed 
information collection burden ``for small business concerns with fewer 
than 25 employees,'' pursuant to the Small Business Paperwork Relief 
Act of 2002, Public Law 107-198; see 44 U.S.C. 3506(c)(4).

Summary of the Notice of Proposed Rulemaking

    1. In the NPRM we seek comment on the implementation of Section 207 
of the Satellite Home Viewer Extension and Reauthorization Act of 2004 
(``SHVERA''). Section 207 extends section 325(b)(3)(C) of the 
Communications Act until 2010 and amends that section to impose 
reciprocal good faith retransmission consent bargaining obligations on 
multichannel video programming distributors (``MVPDs''). This section 
alters the bargaining obligations created by the Satellite Home Viewer 
Improvement Act of 1999 (``SHVIA'') which imposed a good faith 
bargaining obligation only on broadcasters. As discussed below, because 
the Commission has in place existing rules governing good faith 
retransmission consent negotiations and because Congress did not 
instruct us through the SHVERA to modify those rules in any substantive 
way, we tentatively conclude that the most faithful and expeditious 
implementation of the amendments contemplated in section 207 of the 
SHVERA is to extend to MVPDs the existing good faith bargaining 
obligation imposed on broadcasters under our rules.

Discussion

The Good Faith Provisions of SHVIA

    2. Section 325(b)(3)(C) of the Communications Act, as enacted by 
the SHVIA, instructed the Commission to commence a rulemaking 
proceeding to revise the regulations by which television broadcast 
stations exercise their right to grant retransmission consent; see 47 
U.S.C. 325(b)(3)(C). Specifically, that section required that the 
Commission, 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, 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; see 47 U.S.C. 325(b)(3)(C)(ii).

The Commission issued a Notice of Proposed Rulemaking seeking comment 
on how best to implement the good faith and exclusivity provisions of 
the SHVIA; see 14 FCC Rcd 21736 (1999). After considering the comments 
received in response to the notice, the Commission adopted rules 
implementing the good faith provisions and complaint procedures for 
alleged rule violations; see 15 FCC Rcd 5445 (2000), 16 FCC Rcd 15599 
(2001).
    3. The Good Faith Order determined that Congress did not intend to 
subject retransmission consent negotiation to detailed substantive 
oversight by the Commission; see 15 FCC Rcd at 5450. Instead, the order 
found 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; see 15 FCC 
Rcd at 5453-54. Consistent with this conclusion, the Good Faith Order 
adopted a two-part test for good faith. The first part of the test 
consists of a brief, objective list of negotiation standards; see 15 
FCC Rcd at 5457-58. 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; see 47 CFR 76.65(b)(1)(i) through (vii).
    4. 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; see 47 CFR 76.65(b)(2).
    5. The Good Faith Order provided examples of negotiation proposals 
that presumptively are consistent and inconsistent with ``competitive 
marketplace considerations;'' see 15 FCC Rcd at 5469-70. The Good Faith 
Order found that it is implicit in section 325(b)(3)(C) that any effort 
to further anti-competitive ends through the negotiation process would 
not meet the good faith negotiation requirement; see 15 FCC Rcd at 
5470. The order stated

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that considerations that are designed to frustrate the functioning of a 
competitive market are not ``competitive marketplace considerations.'' 
Further, conduct that is violative of national policies favoring 
competition--that, for example, is intended to gain or sustain a 
monopoly, 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; see 15 FCC Rcd at 5470.
    6. Finally, the Good Faith Order established procedural rules for 
the filing of good faith complaints pursuant to section 76.7 of the 
Commission's rules; see 47 CFR 76.65(c), 47 CFR 76.7. The burden of 
proof is on the complainant to establish a good faith violation and 
complaints are subject to a one year limitations period; see 47 CFR 
76.65(d) and (e).

The Reciprocal Bargaining Obligations of SHVERA

    7. In enacting the SHVERA good faith negotiation obligation for 
MVPDs, Congress used language identical to that of the SHVIA imposing a 
good faith obligation on broadcasters, requiring the Commission, until 
January 1, 2010, to:

    Prohibit a multichannel video programming distributor from 
failing to negotiate in good faith for retransmission consent under 
this section, and it shall not be a failure to negotiate in good 
faith if the distributor enters into retransmission consent 
agreements containing different terms and conditions, including 
price terms, with different broadcast stations if such different 
terms and conditions are based on competitive marketplace 
considerations; see 47 U.S.C. 325(b)(3)(C)(iii).

Congress did not instruct the Commission to amend its existing good 
faith rules in any way other than to implement the statutory extension 
and impose the good faith obligation on MVPDs. Accordingly, we believe 
that Congress did not intend that the Commission revisit the findings 
and conclusions that were reached in the SHVIA rulemaking. The little 
legislative history directly applicable to Section 207 supports this 
approach and, in pertinent part, provides:

    In light of evidence that retransmission negotiations continue 
to be contentious, the Committee chose to extend these obligations, 
and also to begin applying the good-faith obligations to MVPDs. The 
Committee intends the MVPD good-faith obligations to be analogous to 
those that apply to broadcasters, and not to affect the ultimate 
ability of an MVPD to decide not to enter into retransmission 
consent with a broadcaster.

We believe that the implementation of section 207 most consistent with 
the apparent intent of Congress is to amend our existing rules to apply 
equally to both broadcasters and MVPDs. We tentatively conclude that we 
should amend sections 76.64(l) and 76.65 as set forth on Appendix A of 
the NPRM. We seek comment on this proposal and any other reasonable 
implementation of Section 207.
    8. We note that the original SHVIA good faith provision by its 
terms applied to ``television broadcast stations.'' Similarly, the 
SHVERA good faith provision applies to ``multichannel video programming 
distributors.'' We seek comment whether, under the statute, the good 
faith negotiating standards may be any different for carriage of 
significantly viewed television broadcast stations outside of their 
designated market area (``DMA'') (A DMA is a geographic market 
designation created by Nielsen Media Research that defines each 
television market exclusive of others, based on measured viewing 
patterns. Essentially, each county in the United States is allocated to 
a market based on which home-market stations receive a preponderance of 
total viewing hours in the county. For purposes of this calculation, 
both over-the-air and cable television viewing are included.) 
Significantly viewed television broadcast stations do not have carriage 
rights outside of their DMA and carriage of their signals by out-of-
market MVPDs is permissive. We seek comment as to whether the 
Commission has discretion under section 325(b)(3)(C) to distinguish 
this situation. For example, if a television broadcast station from DMA 
X is significantly viewed in DMA Y and seeks carriage on an MVPD 
located in DMA Y, must the MVPD in DMA Y negotiate retransmission 
consent in good faith with the broadcaster from DMA X in exactly the 
same way that it negotiates with broadcasters that are located in DMA 
Y? Should the same good faith negotiation standard apply to 
broadcasters and MVPDs regardless of the DMA in which they reside? 
Should a different standard apply, and if so what standard? Should the 
good faith retransmission consent negotiation obligation apply only to 
MVPDs and broadcasters located in the same DMA? We seek comment on this 
issue.

Procedural Matters

Ex Parte Rules

    9. Permit-But-Disclose. This proceeding will be treated as a 
``permit-but-disclose'' proceeding subject to the ``permit-but-
disclose'' requirements under section 1.1206(b) of the Commission's 
rules; see 47 CFR 1.1206(b), 47 CFR 1.1202, 1.1203. Ex parte 
presentations are permissible if disclosed in accordance with 
Commission rules, except during the Sunshine Agenda period when 
presentations, ex parte or otherwise, are generally prohibited. Persons 
making oral ex parte presentations are reminded that a memorandum 
summarizing a presentation must contain a summary of the substance of 
the presentation and not merely a listing of the subjects discussed. 
More than a one- or two-sentence description of the views and arguments 
presented is generally required; see 47 CFR 1.1206(b)(2). Additional 
rules pertaining to oral and written presentations are set forth in 
section 1.1206(b).
    10. Comments may be filed electronically using the Internet by 
accessing the the Commission's Electronic Comment Filing System 
(``ECFS''): http://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking 
Portal: http://www.regulations.gov. Filers should follow the 
instructions provided on the Web site for submitting comments. Parties 
may also submit an electronic comment by Internet e-mail. To get filing 
instructions, filers should send an e-mail to [email protected], and include 
the following words in the body of the message, ``get form.'' A sample 
form and directions will be sent in response. Parties who choose to 
file by paper must file an original and four copies of each filing. All 
filings must be addressed to the Commission's Secretary, Office of the 
Secretary, Federal Communications Commission, 445 12th Street, SW., 
Room TW-A325, Washington, DC 20554. In addition to filing comments with 
the Secretary, a copy of any comments on the Paperwork Reduction Act 
information collection requirements contained herein should be 
submitted to Judith B. Herman, Federal Communications Commission, Room 
1-C804, 445 12th Street, SW., Washington, DC 20554, or via the Internet 
to [email protected], and to Kristy L. LaLonde, OMB Desk Officer, 
Room 10234 NEOB, 725 17th Street, NW., Washington, DC 20503, via the 
Internet to Kristy--L. [email protected], or via fax at 202-395-5167.

Ordering Clauses

    11. Accordingly, it is ordered that pursuant to section 207 of the 
Satellite Home Viewer Extension and Reauthorization Act of 2004, and 
sections 1, 4(i) and (j), and 325 of the Communications Act of 1934, as 
amended, 47 U.S.C. 151, 154(i) and (j),

[[Page 15051]]

and 325, notice is hereby given of the proposals and tentative 
conclusions described in this Notice of Proposed Rulemaking.
    12. It is further ordered that the Reference Information Center, 
Consumer and Governmental Affairs Bureau, shall send a copy of this 
Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.

Proposed Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

    1. The authority citation for part 76 continues to read as follows:

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 
534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 
558, 560, 561, 571, 572, 573.

    2. Section 76.64 is amended by revising paragraph (l) to read as 
follows:


Sec.  76.64  Retransmission consent.

* * * * *
    (l) Exclusive retransmission consent agreements are prohibited. No 
television broadcast station shall make or negotiate any 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, 2009.
* * * * *
    3. Section 76.65 is revised to read as follows:


Sec.  76.65  Good faith and exclusive retransmission consent 
complaints.

    (a) Duty to negotiate in good faith. Television broadcast stations 
and multichannel video programming distributors shall negotiate in good 
faith the terms and conditions of retransmission consent agreements to 
fulfill the duties established by section 325(b)(3)(C) of the Act; 
provided, however, that it shall not be a failure to negotiate in good 
faith if:
    (1) 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; or
    (2) The multichannel video programming distributor enters into 
retransmission consent agreements containing different terms and 
conditions, including price terms, with different broadcast stations if 
such different terms and conditions are based on competitive 
marketplace considerations. If a television broadcast station or 
multichannel video programming distributor negotiates 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 or multichannel 
video programming distributor's (the ``negotiating entity'') duty to 
negotiate retransmission consent agreements in good faith:
    (i) Refusal by a negotiating entity to negotiate retransmission 
consent;
    (ii) Refusal by a negotiating entity to designate a representative 
with authority to make binding representations on retransmission 
consent;
    (iii) Refusal by a negotiating entity 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 negotiating entity to put forth more than a 
single, unilateral proposal.
    (v) Failure of a negotiating entity to respond to a retransmission 
consent proposal of the other party, including the reasons for the 
rejection of any such proposal;
    (vi) Execution by a negotiating entity of an agreement with any 
party, a term or condition of which requires that such negotiating 
entity not enter into a retransmission consent agreement with any other 
television broadcast station or multichannel video programming 
distributor; and
    (vii) Refusal by a negotiating entity 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 paragraph (b)(1) of this section, a Negotiating Entity may 
demonstrate, based on the totality of the circumstances of a particular 
retransmission consent negotiation, that a television broadcast station 
or multichannel video programming distributor breached its duty to 
negotiate in good faith as set forth in paragraph (a) of the section.
    (c) Good faith negotiation and exclusivity complaints. Any 
television broadcast station or multichannel video programming 
distributor aggrieved by conduct that it believes constitutes a 
violation of the regulations set forth in this section or paragraph (l) 
of Sec.  76.64 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 paragraph must be filed within one year of the date on 
which one of the following events occurs:
    (1) A complainant enters into a retransmission consent agreement 
with a television broadcast station or multichannel video programming 
distributor that the complainant alleges to violate one or more of the 
rules contained in this paragraph; or
    (2) A television broadcast station or multichannel video 
programming distributor 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 multichannel video programming 
distributor; or
    (3) The complainant has notified the television broadcast station 
or multichannel video programming distributor 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 paragraph.
    (f) Termination of rules. This section shall terminate at midnight 
on December 31, 2009.

[FR Doc. 05-5851 Filed 3-23-05; 8:45 am]
BILLING CODE 6712-01-P