[Federal Register Volume 73, Number 4 (Monday, January 7, 2008)]
[Proposed Rules]
[Pages 1195-1197]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-25214]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 07-51; FCC 07-189]


Exclusive Service Contracts for Provision of Video Services in 
Multiple Dwelling Units and Other Real Estate Developments

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: The Further Notice of Proposed Rulemaking (``Notice'') 
solicits comment on whether providers of Direct Broadcast Satellite 
(``DBS'') service and Private Cable Operators (``PCOs'') should be 
allowed to have exclusive access to so-called Multiple Dwelling Units 
(``MDUs,'' such as apartment and condominium buildings). Also, the 
Notice considers prohibiting all providers of video programming service 
from using exclusive marketing arrangements (which allow one MVPD to be 
the preferred video provider in an MDU) and bulk billing arrangements 
(which require MDU dwellers to pay for a video provider in their rental 
or condominium fees). The intended effect of the Notice is to determine 
whether each of these practices benefits or harms video consumers in 
MDUs on the whole.

DATES: Comments for this proceeding are due on or before February 6, 
2008; reply comments are due on or before March 7, 2008.

ADDRESSES: You may submit comments, identified by MB Docket No. 07-51, 
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 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, please contact John W. Berresford, (202) 418-1886, or Holly 
Saurer, (202) 418-7283, both of the Policy Division, Media Bureau.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Further Notice of Proposed Rulemaking in MB 
Docket No. 07-51, FCC 07-189, adopted October 31, 2007, and released 
November 13, 2007. 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).

[[Page 1196]]

Summary of the Further Notice of Proposed Rulemaking

I. Further Notice of Proposed Rulemaking

    1. The Report and Order released simultaneously with this Notice 
addresses primarily those providers of multichannel video programming 
distribution (``MVPDs'') covered by section 628 of the Communications 
Act of 1934, as amended, in part because the record before us 
predominantly addressed building exclusivity clauses involving cable 
operators. Therefore, in order to assess whether we should take action 
to address such clauses entered into by DBS providers, PCOs, and other 
MVPDs who are not subject to section 628, the Notice asks for comment 
on several matters. Do DBS service providers, PCOs, and other MVPD 
providers not subject to section 628 use any or all forms of 
exclusivity clauses (e.g., building, marketing)? If they do, what kinds 
of exclusivity do those clauses provide? Is it likely that an MVPD 
provider subject to section 628, in reaction to the foregoing Report 
and Order and seeking to avoid its effects, would partner with a DBS 
provider or PCO? What are the effects of the use of exclusivity clauses 
by MVPD providers not subject to section 628 on consumer choice, 
competition for multi-channel video and other services, and on the 
deployment of broadband and other advanced communications facilities? 
Are those effects and the balance of benefits and harms the same as we 
have found in the Report and Order with respect to the use of 
exclusivity clauses by providers that are subject to Section 628?
    2. If the net effect of the use of exclusivity clauses by MVPD 
providers not subject to section 628 is harmful to consumers, what 
remedy should we impose--the same kind of prohibition we adopt in the 
Report and Order, or something different? We also ask for comment about 
two legal matters. First, do our Over-the-Air Reception Devices rules 
(47 CFR 1.4000) affect the remedy we should impose on DBS providers? 
Second, we ask for comment about our legal authority. Does the 
Commission have the authority to regulate the use of exclusivity 
clauses by MVPD providers not subject to section 628? Does the 
Commission have authority over DBS providers under section 335 of the 
Act? Does the Commission have authority over DBS and other providers 
under Title III generally, Title VI, its ancillary authority, or some 
other source? We ask for comment on all the foregoing factual, 
analytical, and legal issues.
    3. We also seek comment on whether the Commission should prohibit 
exclusive marketing and bulk billing arrangements. For example, we are 
aware that certain clauses in contracts allow one MVPD into a MDU or 
real estate development but constrain the ability of competitive MVPDs 
to market their services directly to MDU residents. These arrangements 
provide for what is called ``marketing exclusivity,'' and may be 
anticompetitive. Some argue that in order for MDU residents to exercise 
freely their choice, they must know about their MVPD options.
    4. In particular, we seek comment on a number of questions. How 
pervasive are these exclusive marketing arrangements? What is the 
typical scope of such arrangements? In other words, we seek comment on 
how the Commission should define them for regulatory purposes. Have 
they been used to impede competition in the video marketplace? Can 
other MVPDs effectively communicate with MDU residents in those MDUs 
that have signed exclusive marketing agreements? Do the costs of 
marketing, promotions and sales substantially increase when a 
competitive video provider confronts exclusive marketing arrangements? 
Do these arrangements constitute an unfair method of competition or an 
unfair act or practice in violation of section 628(b) of the Act? If 
so, how should the Commission act to address this problem? Should we 
prohibit the enforcement of all existing exclusive marketing 
arrangements as well as the execution of new ones? That is, should we 
treat them in the same manner as we treat exclusive building access 
arrangements in the Report and Order? Is our legal authority to address 
such agreements the same as our legal authority for addressing 
exclusive building access arrangements?
    5. We also seek comment on these same questions with respect to 
``bulk billing'' arrangements. Some have argued that bulk contracts are 
anti-competitive. As we understand them, bulk billing arrangements may 
be exclusive contracts because MDU owners agree to these arrangements 
with only one MVPD, barring others from a similar arrangement. Such 
arrangements may not prohibit MDU residents from selecting a 
competitive video provider. However, because of the ``bulk billing'' 
nature of the contract, residents would have to continue paying a fee 
to the provider with the bulk billing contract as well as pay a 
subscription fee to the new service provider. We seek comment on 
whether these ``bulk billing'' arrangements are typically formalized as 
agreements between cable operators and MDUs or between MDUs and 
residents (or both)? Do these arrangements have the same practical 
effect as exclusive access arrangements in that most customers would be 
dissuaded from switching video providers?
    6. The Commission will conclude this rulemaking and release an 
order within six months of publication of this Order.

II. Procedural Matters

A. Filing Requirements
    7. Ex Parte Rules. The Further Notice of Proposed Rulemaking in 
this proceeding will be treated as a ``permit-but-disclose'' subject to 
the ``permit-but-disclose'' requirements under Sec.  1.1206(b) of the 
Commission's rules. 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. Additional rules 
pertaining to oral and written presentations are set forth in Sec.  
1.1206(b).
    8. Comments and Reply Comments. Pursuant to Sec. Sec.  1.415 and 
1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested 
parties may file comments and reply comments on or before the dates 
indicated on the first page of this document. Comments may be filed 
using: (1) The Commission's Electronic Comment Filing System (ECFS), 
(2) the Federal Government's eRulemaking Portal, or (3) by filing paper 
copies.
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the 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.
     For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing

[[Page 1197]]

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.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
     The Commission's contractor will receive hand-delivered or 
messenger-delivered paper filings for the Commission's Secretary at 236 
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing 
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be 
held together with rubber bands or fasteners. Any envelopes must be 
disposed of before entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington, DC 20554.
    People With Disabilities: To request materials in accessible 
formats for people with disabilities (braille, large print, electronic 
files, audio format), send an e-mail to [email protected] or call the 
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
    9. Availability of Documents. Comments, reply comments, and ex 
parte submissions will be available for public inspection during 
regular business hours in the FCC Reference Center, Federal 
Communications Commission, 445 12th Street, SW., CY-A257, Washington, 
DC 20554. Persons with disabilities who need assistance in the FCC 
Reference Center may contact Bill Cline at (202) 418-0267 (voice), 
(202) 418-7365 (TTY), or [email protected]. These documents also will 
be available from the Commission's Electronic Comment Filing System. 
Documents are available electronically in ASCII, Word 97, and Adobe 
Acrobat. Copies of filings in this proceeding may be obtained from Best 
Copy and Printing, Inc., Portals II, 445 12th Street, SW., Room CY-
B402, Washington, DC 20554; they can also be reached by telephone, at 
(202) 488-5300 or (800) 378-3160; by e-mail at [email protected]; or via 
their Web site at http://www.bcpiweb.com. To request materials in 
accessible formats for people with disabilities (Braille, large print, 
electronic files, audio format), send an e-mail to [email protected] or 
call the Consumer and Governmental Affairs Bureau at (202) 418-0531 
(voice), (202) 418-7365 (TTY).
B. Initial Regulatory Flexibility Analysis
     As required by the Regulatory Flexibility Act of 1980, as 
amended (the ``RFA''), the Commission has prepared this Initial 
Regulatory Flexibility Analysis (``IRFA'') of the possible significant 
economic impact of the policies and rules proposed in the Further 
Notice of Proposed Rulemaking (``FNPRM'') on a substantial number of 
small entities.
C. Paperwork Reduction Act Analysis
    10. This document does not contain new or modified information 
collection requirements subject to the paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified ``information collection burdens 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).
D. Additional Information
    11. For additional information on this proceeding, please contact 
John W. Berresford, (202) 418-1886, or Holly Saurer, (202) 418-7283, 
both of the Policy Division, Media Bureau.

III. Ordering Clauses

    12. It is ordered that, pursuant to sections 1, 4(i), 303(r), 335, 
623 and 628(b, c) of the Communications Act of 1934, as amended, and 
section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 
154(i), 303(r), 335, 543, and 548(b, c), this Further Notice of 
Proposed Rulemaking is hereby adopted.
    13. It is further ordered that the Consumer and Governmental 
Affairs Bureau, Reference Information Center, shall send a copy of this 
Further Notice of Proposed Rulemaking, including the Initial Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. E7-25214 Filed 1-4-08; 8:45 am]
BILLING CODE 6712-01-P