[Federal Register Volume 75, Number 41 (Wednesday, March 3, 2010)]
[Rules and Regulations]
[Pages 9692-9724]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4139]



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Part III





Federal Communications Commission





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47 CFR Part 76



 Review of the Commission's Program Access Rules and Examination of 
Programming Tying Arrangements; Final Rule

  Federal Register / Vol. 75 , No. 41 / Wednesday, March 3, 2010 / 
Rules and Regulations  

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 76

[MB Docket No. 07-198; FCC 10-17]


Review of the Commission's Program Access Rules and Examination 
of Programming Tying Arrangements

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The FCC establishes rules, policies, and procedures for the 
consideration of complaints alleging unfair acts involving 
terrestrially delivered, cable-affiliated programming in violation of 
Section 628(b) of the Communications Act of 1934, as amended. This 
action will provide competitors to incumbent cable operators with an 
opportunity to obtain access to certain cable-affiliated programming 
that they are currently unable to offer their subscribers, thereby 
promoting competition in the delivery of video to consumers.

DATES: Effective April 2, 2010, except for Sec. Sec.  76.1001(b)(2) and 
76.1003(l), and the amendment to Sec.  76.1003(c)(3), which contain 
information collection requirements that are not effective until 
approved by the Office of Management and Budget. The FCC will publish a 
document in the Federal Register announcing the effective date for 
those sections.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact David Konczal, [email protected]; or Diana 
Sokolow, [email protected]; of the Media Bureau, Policy Division, 
(202) 418-2120. For additional information concerning the Paperwork 
Reduction Act information collection requirements contained in this 
document, contact Cathy Williams at 202-418-2918, or via the Internet 
at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's First 
Report and Order (``Order''), FCC 10-17, adopted and released on 
January 20, 2010, and the Erratum thereto, FCC 10-30, adopted on 
February 5, 2010 and released on February 16, 2010. 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. This document 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).

Paperwork Reduction Act of 1995 Analysis

    This document adopts new or revised information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13 (44 U.S.C. 3501-3520). The requirements will be 
submitted to the Office of Management and Budget (OMB) for review under 
Section 3507 of the PRA. The Commission will publish a separate notice 
in the Federal Register inviting comment on the new or revised 
information collection requirements adopted in this document. The 
requirements will not go into effect until OMB has approved it and the 
Commission has published a notice announcing the effective date of the 
information collection requirements. In addition, we note that pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how 
the Commission might ``further reduce the information collection burden 
for small business concerns with fewer than 25 employees.'' In this 
present document, we have assessed the potential effects of the various 
policy changes with regard to information collection burdens on small 
business concerns, and find that these requirements will benefit many 
companies with fewer than 25 employees by promoting the fair and 
expeditious resolution of program access complaints. In addition, we 
have described impacts that might affect small businesses, which 
includes most businesses with fewer than 25 employees, in the Final 
Regulatory Flexibility Analysis (``FRFA'') below.

Summary of the Report and Order

I. Introduction

    1. In this Order, we take an important step to further promote 
competition in the video distribution market. We establish rules to 
address unfair acts, including exclusive contracts, involving 
terrestrially delivered, cable-affiliated programming. Throughout this 
Order, we use the terms ``cable-affiliated programming'' and ``cable-
affiliated programmer'' to refer to a cable programming vendor in which 
a cable operator has an attributable interest, as defined by the 
Commission's cable attribution rules. See 47 CFR 76.1000(b); see also 
47 CFR 76.501, Notes 1-5.
    2. The rules established herein will provide competitors to 
incumbent cable operators with an opportunity to obtain access to 
certain cable-affiliated programming that they are currently unable to 
offer to their subscribers, thereby promoting competition in the 
delivery of video to consumers. Our existing program access rules have 
been a boon to such competition, and we anticipate that the rules we 
adopt today will have similar procompetitive effects. Our efforts to 
spur competition in the marketplace for video programming are also 
aimed at increasing consumer benefits, including better services, 
innovations in technology, and lower prices. Moreover, we believe 
broadband adoption to be a further benefit from increased competition 
and diversity in video programming distribution. Specifically, today we 
adopt rules permitting complainants to pursue program access claims 
involving terrestrially delivered, cable-affiliated programming similar 
to the claims that they may pursue with respect to satellite-delivered, 
cable-affiliated programming, where the purpose or effect of the 
challenged act is to significantly hinder or prevent the complainant 
from providing satellite cable programming or satellite broadcast 
programming. The types of claims potentially involved include 
challenges to: (i) Exclusive contracts between a cable operator and a 
cable-affiliated programmer that provides terrestrially delivered 
programming; (ii) discrimination in the prices, terms, and conditions 
for the sale of programming among multichannel video programming 
distributors (``MVPDs'') by a provider of terrestrially delivered 
programming that is wholly owned by, controlled by, or under common 
control with one or more of the following: a cable operator or 
operators, a satellite cable programming vendor or vendors in which a 
cable operator has an attributable interest, or a satellite broadcast 
programming vendor or vendors; and (iii) efforts by a cable operator to 
unduly influence the decision of its affiliated provider of 
terrestrially delivered programming to sell its programming to a 
competitor.
    3. The Commission has previously established goals of resolving 
program access complaints within five months from the submission of a 
complaint for denial of programming cases, and

[[Page 9693]]

within nine months for all other program access complaints, such as 
price discrimination cases. See 2007 Program Access Order, 72 FR 56645, 
October 4, 2007, appeal pending sub nom. Cablevision Systems Corp. et 
al v. FCC, No. 07-1425 et al (D.C. Cir). These goals will also apply to 
complaints filed pursuant to the rules established in this Order.
    4. MVPDs seeking to compete with incumbent cable operators have 
provided the Commission with examples of actions by cable operators 
involving terrestrially delivered, cable-affiliated programming that 
they allege have harmed competition in the video distribution market. 
In light of these claims, the Commission adopted a Notice of Proposed 
Rulemaking (the ``NPRM'') in September 2007 seeking comment on, among 
other things, whether to extend the program access rules to 
terrestrially delivered, cable-affiliated programming. See 72 FR 61590, 
October 31, 2007. In the NPRM, the Commission stated its belief that 
unfair acts involving terrestrially delivered, cable-affiliated 
programming are a significant concern because they can adversely impact 
competition. Since adoption of the NPRM in September 2007, MVPDs have 
filed three program access complaints involving terrestrially 
delivered, cable-affiliated programming. This Order addresses only the 
issues of terrestrially delivered, cable-affiliated programming and a 
temporary standstill of an existing contract pending resolution of a 
program access complaint. This Order does not address the other issues 
raised in the NPRM.
    5. We find below that Section 628 of the Communications Act of 
1934, as amended (the ``Act''), grants the Commission authority to 
address unfair acts involving terrestrially delivered, cable-affiliated 
programming. Section 628 was passed as part of the Cable Television 
Consumer Protection and Competition Act of 1992 (``1992 Cable Act''). 
See Cable Television Consumer Protection and Competition Act of 1992, 
Public Law 102-385, 106 Stat. 1460 (1992); see also H.R. Rep. No. 102-
628 (1992); S. Rep. No. 102-92 (1991), reprinted in 1992 U.S.C.C.A.N. 
1133; H.R. Rep. No. 102-862 (1992) (Conf. Rep.), reprinted in 1992 
U.S.C.C.A.N. 1231. Congress expressly declared that a purpose of 
Section 628 was ``to promote the public interest, convenience, and 
necessity by increasing competition and diversity in the multichannel 
video programming market. * * *'' See 47 U.S.C. 548(a). Congress found 
that the ``cable industry has become vertically integrated'' and that 
``[v]ertically integrated program suppliers * * * have the incentive 
and ability to favor their affiliated cable operators over 
nonaffiliated cable operators and programming distributors using other 
technologies.'' See H.R. Rep. No. 102-862 (1992) (Conf. Rep.), at 2, 
reprinted in 1992 U.S.C.C.A.N. 1231. Congress ``expect[s] the 
Commission to address and resolve the problems of unreasonable cable 
industry practices, including restricting the availability of 
programming and charging discriminatory prices to non-cable 
technologies.'' See id. at 93, reprinted in 1992 U.S.C.C.A.N. at 1275. 
To arm the Commission for that effort, Congress granted the Commission 
broad authority in Sections 628(b) and 628(c)(1) of the Act to prohibit 
unfair acts of cable operators that significantly hinder or prevent 
their competitors from providing video programming to consumers.
    6. Section 628(b) provides that it shall be unlawful for a cable 
operator to ``engage in unfair methods of competition or unfair or 
deceptive acts or practices, the purpose or effect of which is to 
hinder significantly or to prevent any multichannel video programming 
distributor from providing satellite cable programming or satellite 
broadcast programming to subscribers or consumers.'' See 47 U.S.C. 
548(b). Section 628(c)(1) authorizes the Commission to prescribe 
regulations to specify the particular conduct prohibited by Section 
628(b). See 47 U.S.C. 548(c)(1). Throughout this Order, we use the term 
``unfair act'' as shorthand for the phrase ``unfair methods of 
competition or unfair or deceptive acts or practices.''
    7. In addition to the broad grant of authority, Congress in Section 
628(c)(2) required the Commission to adopt specific regulations partly 
implementing Section 628(b) by prohibiting cable operators or 
affiliates from engaging in unfair acts involving cable-affiliated 
programming that is delivered to cable operators via satellite 
(``satellite-delivered programming''). See 47 U.S.C. 548(c)(2). Section 
628(c)(2) pertains only to ``satellite cable programming'' and 
``satellite broadcast programming.'' See 47 U.S.C. 548(c)(2)(A)-(D). 
Both terms are defined to include only programming transmitted or 
retransmitted by satellite for reception by cable operators. See 47 
U.S.C. 548(i)(1) (incorporating the definition of ``satellite cable 
programming'' as used in 47 U.S.C. 605); id. 548(i)(3).
    8. The three unfair acts Congress required the Commission to 
address were: (i) Exclusive contracts between a cable operator and a 
cable-affiliated programmer; (ii) discrimination by a cable-affiliated 
programmer in the prices, terms, and conditions for sale of programming 
among MVPDs; and (iii) efforts by a cable operator to unduly influence 
the decision of its affiliated programmer to sell programming to 
competitors. See 47 U.S.C. 548(c)(2)(A)-(D). The Commission has adopted 
rules to carry out that congressional command (the ``program access 
rules''). See 47 CFR 76.1000-1004. Those rules are a success. While 
competitors to incumbent cable operators served less than five percent 
of video subscribers nationwide when the program access provision of 
the 1992 Cable Act was passed (see Implementation of Section 11 of the 
Cable Television Consumer Protection and Competition Act of 1992, 
Further Notice of Proposed Rulemaking, 16 FCC Rcd 17312, 17326 (2001)), 
that percentage has increased to over 30 percent today. Competitors to 
incumbent cable operators widely credit the program access rules for 
this increase in competition.
    9. An outgrowth of this increase in competition is an increase in 
employment in the video programming sector of the economy. The 
relationship between competition and employment in an industry is an 
obvious one. Firms maximize profits in a concentrated industry by 
reducing output in order to increase prices. This exertion of market 
power has, as a natural outcome, a negative effect on industry 
employment. Increasing the level of competition in an industry 
increases output, reduces prices, and increases employment. This 
intuitive result has been shown to hold in practice. Christoph Weiss 
found a negative relationship between the long-run equilibrium level of 
employment and the level of concentration in U.S. industries. See 
Christoph Weiss, ``Is Imperfect Competition in the Product Market 
Relevant for Labour Markets?'' Labour, Vol. 12 No. 3, at 451-71 (1998).
    10. Congress did not require the Commission to adopt program access 
rules for cable-affiliated programming that is delivered to cable 
operators via terrestrial means, such as programming transmitted to 
cable operators by fiber (``terrestrially delivered programming''). 
While an earlier version of the legislation that became Section 
628(c)(2) would have encompassed terrestrially delivered programming, 
Congress did not explain why the final version of its bill removed this 
provision. This gap in the coverage of Section 628(c)(2) is commonly 
referred to as the ``terrestrial loophole.'' See, e.g., 2002 Program 
Access Order, 67 FR 49247, July 30, 2002. Under Sections 628(b) and 
628(c)(1), however, Congress granted the Commission broad authority to 
address

[[Page 9694]]

this ``loophole'' by adopting additional regulations beyond those 
listed in Section 628(c)(2) to address unfair acts of cable operators.
    11. As discussed below, we take action pursuant to Sections 628(b) 
and 628(c)(1) of the Act to facilitate competition in the video 
distribution market by establishing rules for the consideration of 
complaints alleging that a cable operator, a satellite cable 
programming vendor in which a cable operator has an attributable 
interest, or a satellite broadcast programming vendor, has engaged in 
unfair acts involving terrestrially delivered, cable-affiliated 
programming. Our action today attempts to chart a middle course between 
two extremes proposed by commenters. On one hand, vertically integrated 
cable operators argue that there is no need and no statutory authority 
for the Commission to address unfair acts involving terrestrially 
delivered, cable-affiliated programming. In their view, exclusive 
arrangements for terrestrially delivered, cable-affiliated programming 
should be permitted because they enhance innovation, programming 
diversity, and competition. On the other hand, competing MVPDs urge the 
Commission to adopt a per se prohibition on exclusive arrangements 
involving most, if not all, terrestrially delivered, cable-affiliated 
programming. In their view, all such exclusive arrangements should be 
prohibited because they hamper competition. The case-by-case approach 
we adopt today establishes a fair process to address those situations 
in which MVPDs may be significantly hindered from competing, while at 
the same time allowing cable operators to use exclusive arrangements in 
cases where competition is not significantly harmed.
    12. We begin by analyzing the statutory language and legislative 
history of Section 628 as well as the Commission's program access 
rules. We discuss our statutory authority under that section to 
consider complaints alleging unfair acts involving terrestrially 
delivered, cable-affiliated programming. We then discuss the bases for 
our conclusion that there is a need for Commission action to address 
such complaints: Cable operators have an incentive and ability to 
engage in unfair acts involving their affiliated programming; record 
evidence indicates that cable operators have engaged in unfair acts 
involving certain terrestrially delivered, cable-affiliated 
programming; and these unfair acts have impacted competition in the 
video distribution market in certain cases. We conclude, however, that 
there is insufficient record evidence to conclude that unfair acts 
involving terrestrially delivered, cable-affiliated programming will 
have the purpose or effect set forth in Section 628(b) in every case. 
Accordingly, we adopt a case-by-case approach rather than a per se rule 
for addressing these unfair acts. We then explain how addressing unfair 
acts involving terrestrially delivered, cable-affiliated programming on 
a case-by-case basis comports with the First Amendment.
    13. We next set forth the requirements for complaints alleging 
unfair acts involving terrestrially delivered, cable-affiliated 
programming. A complainant alleging such an unfair act will have the 
burden of proof that the defendant's activities have the purpose or 
effect set forth in Section 628(b). We conclude that a complainant is 
unlikely to satisfy this burden when seeking access to readily 
replicable programming, such as local news and local community or 
educational programming. We also explain, however, that some 
programming may be non-replicable and sufficiently valuable to 
consumers that an unfair act regarding this programming presumptively--
but not conclusively--has the purpose or effect set forth in Section 
628(b). Based on Commission precedent in which the Commission has 
considered certain Regional Sports Networks (``RSNs'') and the record 
in this proceeding, we find that such networks fall within this 
category. In program access cases alleging an unfair act involving such 
programming, the defendant will be required to overcome the presumption 
that arises from our precedent and the record evidence here. In all 
program access cases involving terrestrially delivered, cable-
affiliated programming, we provide the defendant with 45 days--rather 
than the usual 20 days--from the date of service of the complaint to 
file an Answer to ensure that the defendant has adequate time to 
develop a full, case-specific response.
    14. This distinction between replicable and non-replicable 
programming will promote innovation and continued investment in 
programming. If particular programming is replicable, our policies 
should encourage MVPDs or others to create competing programming, 
rather than relying on the efforts of others, thereby encouraging 
investment and innovation in programming and adding to the diversity of 
programming in the marketplace. Conversely, when programming is non-
replicable and valuable to consumers, such as regional sports 
programming, no amount of investment can duplicate the unique 
attributes of such programming, and denial of access to such 
programming can significantly hinder an MVPD from competing in the 
marketplace. In addition, in light of the growing importance of high 
definition (``HD'') programming in the marketplace today and its 
distinctive characteristics, we will analyze the HD version of a 
network separately from the standard definition (``SD'') version with 
similar content for purposes of the statutory analysis. Thus, the fact 
that a complainant offers the SD version of a network to subscribers 
will not alone be sufficient to refute the complainant's showing that 
lack of access to the HD version has the purpose or effect set forth in 
Section 628(b). Similarly, in cases involving the category of RSN 
programming addressed by our precedent and the evidence here, 
withholding the HD feed will be rebuttably presumed to cause 
significant hindrance even if an SD version of the network is made 
available to competitors.
    15. We next describe how the rules applicable to terrestrially 
delivered, cable-affiliated programming will differ from the rules 
applicable to satellite-delivered, cable-affiliated programming. We 
also discuss how these rules will be applied to common carriers and 
terrestrially delivered programming that is subject to the program 
access rules as a result of merger conditions. In addition, we explain 
that the new rules will apply to existing contracts, but not to the 
unfair acts of cable operators involving terrestrially delivered, 
cable-affiliated programming that preceded the effective date of these 
rules. With respect to pending complaints alleging unfair acts 
involving terrestrially delivered, cable-affiliated programming, 
complainants may continue to prosecute these complaints pursuant to 
Section 628(d) of the Communications Act. In addition, a complainant 
that wants a currently pending complaint considered under the new rules 
can submit a supplemental filing alleging that the defendant has 
engaged in an unfair act after the effective date of the rules. 
Finally, we establish procedures for the Commission's consideration of 
requests for a temporary standstill of the price, terms, and other 
conditions of an existing programming contract by a program access 
complainant seeking renewal of such a contract.

II. Background

A. Section 628

    16. Congress enacted Section 628 as part of the 1992 Cable Act to 
``promote the public interest, convenience, and necessity by increasing 
competition and diversity in the multichannel video

[[Page 9695]]

programming market, to increase the availability of satellite cable 
programming and satellite broadcast programming to persons in rural and 
other areas not currently able to receive such programming, and to spur 
the development of communications technologies.'' 47 U.S.C. 548(a). The 
term ``satellite cable programming'' means ``video programming which is 
transmitted via satellite and which is primarily intended for direct 
receipt by cable operators for their retransmission to cable 
subscribers,'' except that such term does not include satellite 
broadcast programming. 47 U.S.C. 548(i)(1) (incorporating the 
definition of ``satellite cable programming'' as used in 47 U.S.C. 
605). The term ``satellite broadcast programming'' means ``broadcast 
video programming when such programming is retransmitted by satellite 
and the entity retransmitting such programming is not the broadcaster 
or an entity performing such retransmission on behalf of and with the 
specific consent of the broadcaster.'' 47 U.S.C. 548(i)(3).
    17. To advance Congress' goals, Sections 628(b) and 628(c)(1) grant 
the Commission broad authority to adopt rules to prohibit unfair acts 
of cable operators that have the purpose or effect of preventing or 
hindering significantly an MVPD from providing satellite cable 
programming or satellite broadcast programming to subscribers or 
consumers. See 47 U.S.C. 548(b), (c)(1). Section 628(b) provides that:

[I]t shall be unlawful for a cable operator, a satellite cable 
programming vendor in which a cable operator has an attributable 
interest, or a satellite broadcast programming vendor to engage in 
unfair methods of competition or unfair or deceptive acts or 
practices, the purpose or effect of which is to hinder significantly 
or to prevent any multichannel video programming distributor from 
providing satellite cable programming or satellite broadcast 
programming to subscribers or consumers.

47 U.S.C. 548(b). Section 628(c)(1) provides that ``the Commission 
shall, in order to promote the public interest, convenience, and 
necessity by increasing competition and diversity in the multichannel 
video programming market and the continuing development of 
communications technologies, prescribe regulations to specify 
particular conduct that is prohibited by'' Section 628(b). 47 U.S.C. 
548(c)(1). A federal court of appeals recently held that Section 628(b) 
is written in ``broad and sweeping terms'' and therefore ``should be 
given broad, sweeping application.'' Nat'l Cable & Telecomm. Ass'n v. 
FCC, 567 F.3d 659, 664 (D.C. Cir. 2009) (quoting Consumer Elecs. Ass'n 
v. FCC, 347 F.3d 291, 298 (D.C. Cir. 2003)).

    18. We find no merit in Cablevision's argument that the Commission 
cannot rely on Section 628(c)(1) because that provision ``limits'' 
rulemaking authority to the 180 days after the date of enactment of 
Section 628(c)(1). The Commission has an obligation to consider, on an 
on-going basis, whether its rules should be modified in response to 
changed circumstances. As the Supreme Court has observed: `` `An 
initial agency interpretation is not instantly carved in stone. On the 
contrary, the agency * * * must consider varying interpretations and 
the wisdom of its policy on a continuing basis,' Chevron, supra, at 
863-864, 104 S.Ct. 2778, for example, in response to changed factual 
circumstances, or a change in administrations. * * *'' National Cable & 
Telecomm. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) 
(quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, 
Inc., 467 U.S. 837, 863-64 (1984)). That is precisely what the 
Commission is doing in this Order. Cablevision's interpretation would 
prevent the Commission from fulfilling its obligation to consider 
whether its rules should be revised based on new evidence that has come 
to light. There is no evidence that Congress intended to tie the 
Commission's hands in this manner by carving its initial regulations, 
which were adopted back in 1993, ``in stone.'' See 1993 Program Access 
Order, 8 FCC Rcd 3359 (1993), recon., 10 FCC Rcd 1902 (1994), further 
recon., 10 FCC Rcd 3105 (1994). Nor is there any indication Congress 
intended to strip the Commission of its rulemaking power under Sections 
4(i) and 303(r) after 180 days. See 47 U.S.C. 154(i), 303(r).
    19. Moreover, Cablevision's interpretation is at odds with judicial 
precedent regarding statutory deadlines. Statutory deadlines are 
generally considered directory, rather than mandatory, and even where 
an agency has failed to meet such a deadline--which is not the case 
here--it has not been found to remove an agency's authority to act or 
impose any other penalty, unless the statute delineates a specific 
remedy for agency inaction. See Thomas v. Barry, 729 F.2d 1469, 1470 
n.5 (D.C. Cir. 1984) (quoting Fort Worth Nat'l Corp. v. Fed. Savings & 
Loan Ins. Corp., 469 F.2d 47, 58 (5th Cir. 1972)); see also Brock v. 
Pierce County, 476 U.S. 253, 260, 262 (1986) (mere use of the word 
``shall'' not enough to remove Secretary of Labor's power to act after 
lapse of a deadline, and ``[w]hen * * * there are less drastic remedies 
available for failure to meet a statutory deadline, courts should not 
assume that Congress intended the agency to lose its power to act''); 
Gottlieb v. Pe[ntilde]a, 41 F.3d 730 (D.C. Cir. 1994) (statute 
mandating Secretary of Transportation to act by certain deadline was 
directory, not mandatory); Ralpho v. Bell, 569 F.2d 607, 627 (D.C. Cir. 
1977) (``Statutes that, for guidance of a government official's 
discharge of duties, propose `to secure order, system, and dispatch in 
proceedings' are usually construed as directory, whether or not worded 
in the imperative, especially when the alternative is harshness or 
absurdity.'' (citations omitted)). Here, there is no indication in the 
statute that Congress intended the Commission's rulemaking authority to 
lapse after the 180-day deadline.
    20. In addition to the broad grant of authority, Congress in 
Section 628(c)(2) directed the Commission to include ``minimum 
contents'' in its regulations specifying certain unfair acts, relating 
to satellite-delivered programming, that are among those prohibited by 
Section 628(b). See 47 U.S.C. 548(c)(2). First, Congress required the 
Commission to prohibit efforts by cable operators to unduly influence 
the decision of cable-affiliated programming vendors that provide 
satellite-delivered programming to sell their programming to 
competitors (``undue or improper influence''). See 47 U.S.C. 
548(c)(2)(A).
    21. Second, Congress required the Commission to address 
discrimination by cable-affiliated programming vendors that provide 
satellite-delivered programming in the prices, terms, and conditions 
for sale of programming among MVPDs (``discrimination''). See 47 U.S.C. 
548(c)(2)(B).
    22. Third, Congress required the Commission to prohibit exclusive 
contracts between cable operators and cable-affiliated programming 
vendors that provide satellite-delivered programming subject to certain 
exceptions in areas served by a cable operator as of October 5, 1992 
(the ``exclusive contract prohibition''). See 47 U.S.C. 548(c)(2)(D). 
These exceptions are: (i) Exclusive contracts entered into prior to 
June 1, 1990 are not subject to the exclusive contract prohibition (see 
47 U.S.C. 548(h)(1); see also 47 CFR 76.1002(e)(1)); (ii) exclusive 
contracts that the Commission deems to be in the public interest based 
on the factors set forth in the statute are not subject to the 
exclusive contract prohibition (see 47 U.S.C. 548(c)(4); see also 47 
CFR 76.1002(c)(4)); and (iii) the exclusive contract prohibition will 
cease to be effective after October 5, 2002 unless the Commission finds 
that it ``continues to be necessary to preserve and protect

[[Page 9696]]

competition and diversity in the distribution of video programming'' 
(see 47 U.S.C. 548(c)(5); see also 47 CFR 76.1002(c)(6)). The public 
interest factors are: (i) The effect of such exclusive contract on the 
development of competition in local and national multichannel video 
programming distribution markets; (ii) the effect of such exclusive 
contract on competition from multichannel video programming 
distribution technologies other than cable; (iii) the effect of such 
exclusive contract on the attraction of capital investment in the 
production and distribution of new satellite cable programming; (iv) 
the effect of such exclusive contract on diversity of programming in 
the multichannel video programming distribution market; and (v) the 
duration of the exclusive contract. See 47 U.S.C. 548(c)(4); see also 
47 CFR 76.1002(c)(4). In areas that were not served by a cable operator 
as of October 5, 1992, the exclusive contract prohibition is absolute 
and is not subject to exceptions. See 47 U.S.C. 548(c)(2)(C).
    23. Section 628 was intended to address Congress' concern that 
cable operators or their affiliates would engage in unfair acts, 
including acts involving programming they own, that impede competition 
in the video distribution market. See H.R. Rep. No. 102-862 (1992) 
(Conf. Rep.), at 93, reprinted in 1992 U.S.C.C.A.N. 1231, 1275; S. Rep. 
No. 102-92 (1991), at 26, reprinted in 1992 U.S.C.C.A.N. 1133, 1159.
    24. The 1992 Cable Act and its legislative history reflect 
Congressional findings that increased horizontal concentration of cable 
operators, combined with extensive vertical integration of cable 
operators and program suppliers, created an imbalance of power between 
incumbent cable operators and their multichannel competitors. See 1992 
Cable Act Sec.  2(a)(4); id. section 2(a)(5); S. Rep. No. 102-92 
(1991), at 24-29, reprinted in 1992 U.S.C.C.A.N. 1133, 1157-62; H.R. 
Rep. No. 102-628 (1992), at 41-43. Congress concluded that vertically 
integrated program suppliers had the incentive and ability to favor 
their affiliated cable operators over other MVPDs, including direct 
broadcast satellite (``DBS'') providers. See 1992 Cable Act section 
2(a)(5); S. Rep. No. 102-92 (1991), at 26, reprinted in 1992 
U.S.C.C.A.N. 1133, 1159; 1993 Program Access Order, 8 FCC Rcd at 3365-
67, ] 21.
    25. Through Section 628, Congress intended to encourage entry and 
facilitate competition in the video distribution market by existing or 
potential competitors to traditional cable systems by, among other 
things, making available to those entities the programming they need to 
compete in the video distribution market. See H.R. Rep. No. 102-862 
(1992) (Conf. Rep.), at 93, reprinted in 1992 U.S.C.C.A.N. 1231, 1275; 
S. Rep. No. 102-92 (1991), at 28, reprinted in 1992 U.S.C.C.A.N. 1133, 
1161. As discussed above, competitors to incumbent cable operators 
credit the program access rules promulgated under Sections 628(b) and 
(c) for the increased competition to incumbent cable operators that has 
emerged since passage of the 1992 Cable Act.

B. Program Access Rules Applicable to Satellite-Delivered, Cable-
Affiliated Programming

    26. As required by Section 628(c)(2), the Commission has adopted 
program access rules which specifically prohibit undue or improper 
influence (see 47 CFR 76.1002(a)), discrimination (see 47 CFR 
76.1002(b)), and exclusive contracts (see 47 CFR 76.1002(c)-(e)) 
involving cable operators and cable-affiliated programmers that provide 
satellite-delivered programming. The Commission has also established a 
complaint process to address claims that a cable operator or a cable-
affiliated programmer that provides satellite-delivered programming has 
violated the program access rules. See 47 CFR 76.7, 76.1003. Consistent 
with the definitions in the 1992 Cable Act, the Commission's rules 
define the ``satellite cable programming'' and ``satellite broadcast 
programming'' to which the rules apply to include only programming 
transmitted or retransmitted by satellite for reception by cable 
operators. See 47 CFR 76.1000(f), (h). The Commission has previously 
concluded that terrestrially delivered programming is outside of the 
direct coverage of Section 628(c)(2) and the Commission's program 
access rules under Section 628(c)(2). See DIRECTV, Inc. and EchoStar 
Commc'ns Corp. v. Comcast Corp. et al., 15 FCC Rcd 22802, 22807 (2000), 
aff'd sub nom. EchoStar Commc'ns Corp. v. FCC, 292 F.3d 749 (D.C. Cir. 
2002); see also 2007 Program Access Order; 2002 Program Access Order.

C. NPRM

    27. In September 2007, the Commission adopted an NPRM seeking 
comment on, among other things, whether to extend the program access 
rules to terrestrially delivered, cable-affiliated programming. The 
Commission noted examples of withholding of terrestrially delivered, 
cable-affiliated RSNs in San Diego and Philadelphia. The Commission 
stated its belief that ``withholding of terrestrially delivered cable-
affiliated programming is a significant concern that can adversely 
impact competition in the video distribution market.'' To address this 
concern, the NPRM sought comment on whether it would be appropriate to 
address the terrestrial loophole in the current program access rules 
pursuant to provisions other than Section 628(c)(2) of the Act, such as 
Section 628(b) of the Act. The NPRM also sought comment on whether 
extension of program access requirements to terrestrially delivered, 
cable-affiliated programming by way of a general statutory provision 
such as Section 628(b) would be barred by the more specific provision 
in Section 628(c)(2) that requires the promulgating of rules relating 
only to conduct involving satellite-delivered programming.
    28. In their comments filed in response to the NPRM, non-incumbent 
MVPDs contend that the Commission has statutory authority to address 
the terrestrial loophole in the current rules. They also argue that 
applying the program access rules to terrestrially delivered, cable-
affiliated programming would promote competition in the video 
distribution market and broadband deployment. Conversely, vertically 
integrated cable operators contend that the Commission does not have 
the statutory authority to address the terrestrial loophole. Moreover, 
they argue that the market for video distribution is competitive and 
that additional regulations are not justified.

D. Pending Program Access Complaints

    29. Since adoption of the NPRM in September 2007, MVPDs have filed 
three program access complaints involving terrestrially delivered, 
cable-affiliated programming. First, in September 2008, AT&T filed a 
program access complaint alleging that Cox is withholding a 
terrestrially delivered RSN (Cox-4) from AT&T in San Diego. In March 
2009, the Media Bureau issued a decision denying this complaint without 
prejudice because (i) there was no precedent finding that withholding 
of terrestrially delivered programming is a violation of Section 
628(b); and (ii) the pending NPRM, rather than an adjudicatory 
proceeding, is the correct forum for addressing this issue. See AT&T 
Services Inc. et al v. Coxcom, Inc., Memorandum Opinion and Order, 24 
FCC Rcd 2859, 2864 (MB, 2009), application for review pending. AT&T has 
filed an Application for Review of this decision, which is pending. In 
July 2009, Verizon filed a program access complaint alleging that 
Cablevision is

[[Page 9697]]

withholding the terrestrially delivered HD feeds of its RSNs (MSG and 
MSG+) from Verizon in New York. In August 2009, AT&T filed a program 
access complaint against Cablevision making a similar claim regarding 
the withholding of the terrestrially delivered HD feeds of MSG and MSG+ 
from AT&T in Connecticut. The latter two complaints are pending.
    30. We note that redacted versions of both of AT&T's complaints, 
the defendants' answers, AT&T's replies, and Cox's response to a 
declaration and survey included in AT&T's reply were filed in the 
record of this proceeding. We do not reach a decision in this Order on 
the merits of these complaints, including whether AT&T has demonstrated 
that the defendants' conduct violated Section 628(b).

III. Discussion

    31. In Section A below, we begin with a discussion of our statutory 
authority under Section 628(b) to consider complaints alleging unfair 
acts involving terrestrially delivered, cable-affiliated programming. 
In Section B, we explain the bases for our conclusion that there is a 
need for Commission action to address such complaints. In Section C, we 
explain how addressing unfair acts involving terrestrially delivered, 
cable-affiliated programming on a case-by-case basis comports with the 
First Amendment. In Section D, we set forth the requirements for 
complaints alleging such unfair acts. In Section E, we discuss how 
these rules will be applied to common carriers, existing contracts, and 
terrestrially delivered programming that is subject to the program 
access rules applicable to satellite-delivered programming as a result 
of merger conditions. In Section F, we establish procedures for the 
Commission's consideration of requests for a temporary standstill of 
the price, terms, and other conditions of an existing programming 
contract by a program access complainant seeking renewal of such a 
contract.

A. The Commission's Statutory Authority To Address Unfair Acts 
Involving Terrestrially Delivered, Cable-Affiliated Programming

    32. In this Section, we discuss our statutory authority under 
Section 628(b) to consider complaints alleging unfair acts involving 
terrestrially delivered, cable-affiliated programming in the 
circumstances described in that provision. Section 628(b) gives the 
Commission authority to promulgate rules applicable to unfair acts of 
cable operators (and certain other entities), including acts involving 
terrestrially delivered programming that have the purpose or effect of 
hindering significantly or preventing an MVPD from providing satellite 
cable programming or satellite broadcast programming to subscribers or 
consumers. See 47 U.S.C. 548(b). Section 628(c)(1) authorizes the 
Commission to prescribe regulations to specify particular conduct 
prohibited by Section 628(b). See 47 U.S.C. 548(c)(1). Our analysis 
reflects the Commission's interpretation of Section 628(b) in the MDU 
Order, where the Commission held that it has authority pursuant to 
Section 628(b) to adopt rules prohibiting exclusive contracts between 
cable operators and owners of multiple dwelling units (``MDUs'') 
because those contracts prevent or significantly hinder the ability of 
competing MVPDs to provide all programming, including ``satellite cable 
programming'' and ``satellite broadcast programming,'' in those 
markets. See MDU Order, 73 FR 1080, January 7, 2008, aff'd sub nom. 
Nat'l Cable & Telecomm. Ass'n v. FCC, 567 F.3d 659 (D.C. Cir. 2009). 
This interpretation was recently upheld by a federal court of appeals. 
See NCTA, 567 F.3d 659. Several commenters argue that applying the 
program access rules to terrestrially delivered, cable-affiliated 
programming pursuant to Section 628(b) is consistent with the 
Commission's analysis in the MDU Order.
    33. Vertically integrated cable operators note that Section 
628(c)(2) requires the Commission to prohibit unfair acts involving 
only satellite-delivered programming and assert that this specific 
mandate precludes the Commission from addressing terrestrially 
delivered programming pursuant to the general authority provided in 
Section 628(b). While Section 628(c)(2) lists specific unfair acts that 
the Commission is required to address as ``minimum contents'' in its 
regulations, the United States Court of Appeals for the District of 
Columbia Circuit has explained that this list does not preclude the 
Commission from adopting rules to address additional conduct that also 
is prohibited under Section 628(b). See NCTA, 567 F.3d at 664-65. As 
the court stated, ``Congress had a particular manifestation of a 
problem in mind, but in no way expressed an unambiguous intent to limit 
the Commission's power solely to that version of the problem.'' Id. at 
665; see also MDU Order (``nothing in these provisions indicate that 
they were intended to establish the outer limits of the Commission's 
authority under Section 628(b)''). The court also held that (i) the 
title of Section 628(c)(2), ``Minimum Contents of Regulations,'' 
demonstrates that the Commission's rules must at least address the 
unfair acts listed in Section 628(c)(2), but are not limited to 
addressing those acts (47 U.S.C. 548(c)(2); see NCTA, 567 F.3d at 665; 
see also MDU Order) and (ii) this interpretation of Section 628(b) is 
confirmed by Section 628(c)(1), which grants the Commission wide 
latitude to ``specify particular conduct that is prohibited by [Section 
628(b)]'' (see NCTA, 567 F.3d at 665 (quoting 47 U.S.C. 548(c)(1)); see 
also MDU Order). The Commission too has explained previously that it is 
not limited to addressing only the specific unfair acts listed in 
Section 628(c)(2); rather, ``Section 628(b) is a clear repository of 
Commission jurisdiction to adopt additional rules or to take additional 
action * * * should additional types of conduct emerge as barriers to 
competition.'' See 1993 Program Access Order, 8 FCC Rcd at 3374.
    34. Here, the record reflects evidence that unfair acts involving 
terrestrially delivered, cable-affiliated programming have occurred; 
such conduct is likely to persist absent Commission action; and this 
conduct can have the effect in some cases of hindering significantly an 
MVPD from providing satellite cable programming or satellite broadcast 
programming to subscribers and consumers. Thus, the plain language of 
Section 628(b), along with the authority provided by Section 628(c)(1) 
to adopt rules addressing conduct prohibited by Section 628(b), provide 
us with authority to adopt rules for the consideration of complaints 
alleging unfair acts with respect to terrestrially delivered, cable-
affiliated programming.
    35. Moreover, despite the principle of statutory interpretation 
that, by mentioning one thing, Congress may have implied the exclusion 
of another, an explicit congressional directive to ban certain 
activities does not prevent the agency ``from taking similar action 
with respect to activities that pose a similar danger.'' See Texas 
Rural Legal Aid, Inc. v. Legal Servs. Corp., 940 F.2d 685, 694 (D.C. 
Circ. 1991)); see also Oncale v. Sundowner Offshore Servs., Inc., 523 
U.S. 75, 79 (1998) (``[S]tatutory prohibitions often go beyond the 
principal evil to cover reasonably comparable evils, and it is 
ultimately the provisions of our laws rather than the principal 
concerns of our legislators by which we are governed.''). The fact that 
Congress singled out a subset of practices with which it was 
particularly concerned in Section 628(c)(2) and required the Commission 
to focus on those practices expeditiously does not limit the broader 
rulemaking authority

[[Page 9698]]

expressly granted to the Commission through Sections 628(b) and 
628(c)(1). Here, we find that unfair acts involving cable-affiliated 
programming, regardless of whether that programming is satellite-
delivered or terrestrially delivered, pose the danger of significantly 
hindering MVPDs from providing satellite cable programming or satellite 
broadcast programming, thereby harming competition in the video 
distribution market and limiting broadband deployment. As the 
Commission recognized in the Adelphia Order, competitive harm from 
withholding of programming can occur regardless of how that programming 
is delivered to MVPDs. See 21 FCC Rcd 8203, 8276 (2006). Thus, we 
conclude that Congress' decision to require the Commission to adopt 
within 180 days program access rules to address unfair acts involving 
satellite-delivered, cable-affiliated programming does not preclude us 
from exercising our authority under Section 628(b) to take similar 
action where appropriate to address unfair acts involving terrestrially 
delivered, cable-affiliated programming.
    36. Section 628(c)(2)(B)(iv) does not conflict with this 
interpretation. This provision provides that a cable-affiliated 
programmer that provides satellite-delivered programming does not 
violate the program access discrimination prohibition by entering into 
``an exclusive contract that is permitted under [Section 
628(c)(2)(D)].'' See 47 U.S.C. 548(c)(2)(B)(iv). The Commission has 
interpreted the phrase ``an exclusive contract that is permitted under 
[Section 628(c)(2)(D)]'' to mean an exclusive contract for which the 
Commission has granted an exception pursuant to the public interest 
factors listed in Section 628(c)(4). See 1996 OVS Order, 11 FCC Rcd 
18223, 18319 (1996); see also 47 U.S.C. 548(c)(4); 47 CFR 
76.1002(c)(4). The Commission has declined to interpret this phrase 
more broadly to mean any exclusive contract that is not expressly 
prohibited by Section 628(c)(2)(D). See 1996 OVS Order, 11 FCC Rcd at 
18319.
    37. We are aware that the former Cable Services Bureau stated that 
Section 628(b) may not be used categorically to preclude programming 
practices that are related to practices prohibited under Section 
628(c)(2), but not themselves reached by Section 628(c)(2). See Everest 
Midwest Licensee v. Kansas City Cable Partners, 18 FCC Rcd 26679, 
26683-84 (CSB, 2003); RCN Telecom Servs. v. Cablevision Sys. Corp., 14 
FCC Rcd 17093, 17105-06 (CSB, 1999); EchoStar Commc'ns Corp. v. Comcast 
Corp., 14 FCC Rcd 2089, 2102 (CSB, 1999); Dakota Telecom, Inc. v. CBS 
Broad., Inc., 14 FCC Rcd 10500, 10507-08 (CSB, 1999); DIRECTV, Inc. v. 
Comcast Corp., 13 FCC Rcd 21822, 21837 (CSB, 1998). The Cable Services 
Bureau qualified these statements, however, by explaining that Section 
628(b) may not be used ``without more,'' ``standing alone,'' or ``on a 
per se basis'' against conduct that is permitted under Section 628(c). 
See Everest Midwest Licensee, 18 FCC Rcd at 26683-84; RCN, 14 FCC Rcd 
at 17105-06; EchoStar, 14 FCC Rcd at 2103; Dakota Telecom, 14 FCC Rcd 
at 10507-08; DIRECTV, 13 FCC Rcd at 21838; see also American Cable Co. 
v. TeleCable of Columbus, Inc., 11 FCC Rcd 10090, 10117 (CSB, 1996). In 
other words, complainants under Section 628(b) are required to show 
that a covered entity has engaged in unfair methods of competition or 
unfair or deceptive acts or practices, the purpose or effect of which 
is to hinder significantly or prevent an MVPD from providing satellite 
programming to consumers. Our holding today is consistent with that 
understanding.
    38. Moreover, staff-level decisions are not binding on the 
Commission. See Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 
2008). The Commission itself has specifically held that unfair acts 
involving terrestrially delivered, cable-affiliated programming can be 
cognizable under Section 628(b). See RCN Telecom Servs. v. Cablevision 
Sys. Corp., 16 FCC Rcd 12048, 12053 (2001) (``[T]here may be 
circumstances where moving programming from satellite to terrestrial 
delivery could be cognizable under Section 628(b) as an unfair method 
of competition or deceptive practice if it precluded competitive MVPDs 
from providing satellite cable programming. However, we agree with the 
Bureau that the facts alleged are not sufficient to constitute such a 
violation here.''); DIRECTV, Inc. and EchoStar Commc'ns Corp. v. 
Comcast Corp. et al., 15 FCC Rcd 22802, 22807 (2000) (same), aff'd sub 
nom. EchoStar Commc'ns Corp. v. FCC, 292 F.3d 749 (D.C. Cir. 2002); 
1996 OVS Order, 11 FCC Rcd at 18325 (``[W]e do not foreclose a 
challenge under Section 628(b) to conduct that involves moving 
satellite delivered programming to terrestrial distribution in order to 
evade application of the program access rules and having to deal with 
competing MVPDs.''). In any event, to the extent prior decisions could 
be read as precluding the consideration of program access complaints 
involving terrestrially delivered, cable-affiliated programming under 
Section 628(b), we reject that view. Section 628(b), by its plain 
language, allows the Commission to address unfair acts involving 
terrestrially delivered, cable-affiliated programming on a case-by-case 
basis where the other elements of Section 628(b) are satisfied.
    39. The legislative history of the 1992 Cable Act also is 
consistent with our decision to adopt rules addressing unfair acts 
involving terrestrially delivered, cable-affiliated programming. For 
example, the Conference Report on Section 628 specifically states an 
expectation that the Commission will ``address and resolve the problems 
of unreasonable cable industry practices, including restricting the 
availability of programming and charging discriminatory prices to non-
cable technologies.'' H.R. Rep. No. 102-862 (1992) (Conf. Rep.), at 91, 
reprinted in 1992 U.S.C.C.A.N. 1231, 1273; see also MDU Order. The 
Conference Report further indicates ``that the Commission shall 
encourage arrangements which promote the development of new 
technologies providing facilities-based competition to cable and 
extending programming to areas not served by cable.'' H.R. Rep. No. 
102-862 (1992) (Conf. Rep.), at 91, reprinted in 1992 U.S.C.C.A.N. 
1231, 1273. The action we take today fulfills this Congressional 
mandate by providing a process by which unfair acts involving 
terrestrially delivered, cable-affiliated programming may be addressed, 
thereby fostering competition in the video distribution market.
    40. We recognize that the Senate version of what became Section 
628(c)(2) would have pertained to all programmers, including those that 
provide terrestrially delivered programming, but that language was, 
without explanation, removed in the final version of the bill. The 
Senate version of the legislation that became Section 628(c)(2) would 
have applied the program access provisions to all ``national and 
regional cable programmers who are affiliated with cable operators.'' 
H.R. Rep. No. 102-862 (1992) (Conf. Rep.), at 91-93, reprinted in 1992 
U.S.C.C.A.N. at 1273-75; see also S. Rep. No. 102-92 (1991), at 64, 77-
78, 121-22, reprinted in 1992 U.S.C.C.A.N. 1133, 1197, 1210-11. The 
House amendment, by contrast, expressly limited the provisions to 
``satellite cable programming vendor[s] affiliated with a cable 
operator.'' See H.R. Rep. No. 102-862 (1992) (Conf. Rep.), at 91-93, 
reprinted in 1992 U.S.C.C.A.N. at 1273-75. The Conference agreement 
adopted the House version with amendments. See id.

[[Page 9699]]

    41. Contrary to the claims of cable operators, however, we do not 
find this unexplained change in Section 628(c)(2) relevant in 
determining Congress' intent with respect to Section 628(b)'s broadly 
worded prohibition. See, e.g., Drummond Coal Co. v. Watt, 735 F.2d 469, 
474 (11th Cir. 1984) (``Unexplained changes made in committee are not 
reliable indicators of congressional intent.''), quoted in Save Our 
Cumberland Mountains, Inc. v. Lujan, 963 F.2d 1541, 1548 (D.C. Cir. 
1992), cert. denied, 507 U.S. 911 (1993); Trailmobile Co. v. Whirls, 
331 U.S. 40, 61 (1947) (``The interpretation of statutes cannot safely 
be made to rest upon mute intermediate legislative maneuvers.'' 
(citation omitted)); see also Mead Corp. v. Tilley, 490 U.S. 714, 723 
(1989).
    42. The change related specifically to the minimum contents of the 
program access rules that were required to be issued under Section 
628(c)(2). Congress did not make any similar limiting amendment to 
Section 628(b) during its deliberations in 1992, and the inclusive 
language of Section 628(b) therefore is controlling here, just as it 
was in the MDU Order. Removal of the references to all ``national and 
regional cable programmers'' in the final version of the bill relate to 
Section 628(c)(2), which is thus expressly limited to satellite-
delivered programming. We do not believe that this change to Section 
628(c)(2) indicates a Congressional intent to limit the broad statutory 
language of Section 628(b), which contains no such limitation. We find 
no significance in earlier characterizations of the legislative 
history, such as that presented in the 2002 Program Access Order, which 
viewed the removal of terrestrially delivered programming from the 
final version of the bill as an ``express decision by Congress to limit 
the scope of the program access provisions to satellite delivered 
programming.'' Those discussions were considering the scope of Section 
628(c)(2), not Section 628(b), and thus did not address the issue we 
address here.
    43. AT&T contends that Congress chose the term ``satellite cable 
programming'' because Congress was unaware of, and thus had no reason 
to consider, unfair acts involving terrestrially delivered programming. 
While Comcast notes some examples of terrestrially delivered 
programming that existed at the time the 1992 Cable Act was drafted, we 
agree with AT&T's broader point that ``there is nothing to suggest that 
the phrase `satellite cable programming' was anything other than a 
statement of the nature of the specific problem to be addressed at that 
time,'' and that Congress could not be expected to predict future 
trends in programming delivery.

B. The Need for Commission Action to Address Unfair Acts Involving 
Terrestrially Delivered, Cable-Affiliated Programming

    44. Having established that we possess authority to address unfair 
acts involving terrestrially delivered, cable-affiliated programming, 
in this Section we discuss whether there is a need for such action. As 
discussed below, we find three reasons for taking action in this area: 
(i) Cable operators continue to have an incentive and ability to engage 
in unfair acts or practices involving their affiliated programming, 
regardless of whether this programming is satellite-delivered or 
terrestrially delivered; (ii) our judgment regarding this incentive and 
ability is supported by real-world evidence that vertically integrated 
cable operators have withheld certain terrestrially delivered, cable-
affiliated programming from their MVPD competitors; and (iii) there is 
evidence that, in some cases, this withholding may significantly hinder 
MVPDs from providing satellite cable programming and satellite 
broadcast programming to subscribers.
1. Incentive and Ability to Engage in Unfair Acts
    45. Cable operators continue to have the incentive and ability to 
withhold or take other unfair acts with their affiliated programming in 
order to hinder competition in the video distribution market. See 2007 
Program Access Order (concluding that vertically integrated cable 
operators continue to have the ability to withhold affiliated 
programming from competitive MVPDs such that competition and diversity 
in the distribution of video programming would not be preserved and 
protected absent extension of the ban on exclusive contracts); see also 
id. (concluding that vertically integrated cable operators continue to 
have the incentive to withhold affiliated programming from competitive 
MVPDs); Adelphia Order, 21 FCC Rcd at 8271; 2002 Program Access Order. 
This incentive and ability do not vary based on whether the cable-
affiliated programming is delivered to cable operators by satellite or 
by terrestrial means. A vertically integrated cable operator may raise 
the costs of its MVPD competitors by increasing the price of its 
affiliated programming or may choose not to sell its affiliated 
programming to rival MVPDs. This strategy is commonly referred to as 
the ``raising rivals' costs'' theory. See Adelphia Order, 21 FCC Rcd at 
8256 (citing Michael H. Riordan and Steven Salop, Evaluating Vertical 
Mergers: A Post-Chicago Approach, 63 Antitrust L.J. 513, 523-27 
(1995)); see also Thomas G. Krattenmaker & Steven C. Salop, 
Anticompetitive Exclusion: Raising Rivals' Costs to Achieve Power Over 
Price, 96 Yale L.J. 209, 234-38 (1986). As the Commission noted in the 
Adelphia Order, ``the integrated firm may be able to harm its rivals' 
competitive positions, enabling it to raise prices and increase its 
market share in the downstream market, thereby increasing its profits 
while retaining lower prices for itself or for firms with which it does 
not compete.'' 21 FCC Rcd at 8256.
    46. Unfair acts involving cable-affiliated programming may harm the 
ability of MVPDs to compete with incumbent cable operators, thereby 
resulting in less competition in the marketplace to the detriment of 
consumers. For example, the Commission has noted previously that, 
although competitors have entered the video distribution market, there 
is evidence that cable prices have risen in excess of inflation. See 
2007 Program Access Order (citing Implementation of Section 3 of the 
Cable Television Consumer Protection and Competition Act of 1992: 
Statistical Report on Average Rates for Basic Service, Cable 
Programming Service, and Equipment, Report on Cable Industry Prices, 21 
FCC Rcd 15087, 15087-88 (2006)); see also Cable Price Report, 24 FCC 
Rcd 259, 260 (MB, 2009) (concluding that from 1995 to 2008, the price 
of expanded basic service has grown from $22.35 to $49.65, an increase 
of 122.1 percent, compared with an increase in the Consumer Price Index 
of 38.4 percent over the same period).
    47. In the 2007 Program Access Order, the Commission analyzed the 
incentive and ability of cable operators and their affiliates to engage 
in one type of unfair act--withholding of affiliated programming from 
rival MVPDs. If the vertically integrated cable operator engages in 
withholding, it can recoup profits lost at the upstream level (i.e., by 
licensing programming) by increasing the number of subscribers of its 
downstream MVPD division. See Adelphia Order, 21 FCC Rcd at 8256; see 
also 2007 Program Access Order; 2002 Program Access Order. The 
Commission explained that, particularly ``where competitive MVPDs are 
limited in their market share, a cable-affiliated programmer will be 
able to recoup a substantial amount, if not all, of the revenues 
foregone by pursuing a withholding strategy.'' 2007 Program Access 
Order. Although the cable

[[Page 9700]]

industry's share of MVPD subscribers nationwide has decreased since the 
1992 Cable Act was passed, the Commission in the 2007 Program Access 
Order concluded that the cable industry's 67 percent share of MVPD 
subscribers nationwide remained sufficient to enable vertically 
integrated cable firms to make withholding a profitable strategy. There 
is no evidence in this proceeding that market shares have changed 
materially since that time. To the contrary, the cable industry has 
elsewhere stated that its share of MVPD subscribers nationwide has 
declined only slightly since the 2007 Program Access Order, to 
approximately 63.5 percent at the end of 2008. Moreover, the Commission 
observed that the regional market shares of cable operators sometimes 
exceed the national average. This makes withholding of local and 
regional programming, which is often terrestrially delivered and 
therefore beyond the reach of the program access rules, potentially an 
even more profitable strategy. See 2007 Program Access Order (``the 
cost to a cable-affiliated programmer of withholding regional 
programming is lower in many cases than the cost of withholding 
national programming'').
    48. NCTA and Comcast state that cable operators are losing 
subscribers to competitors. CA2C disagrees, noting that ``major cable 
operators dominate'' the MVPD market, with regional market shares of 65 
percent to 90 percent. Based on data from Nielsen Media Research, as of 
July 2009, the share of MVPD subscribers held by wired cable operators 
exceeds 70 percent in 78 out of 210 DMAs. See DMA Household Universe 
Estimates July 2009: Cable And/Or ADS (Alternate Delivery Systems), 
http://www.tvb.org/nav/build_frameset.asp (follow ``Research Central'' 
hyperlink; then follow ``Market Track'' hyperlink; then follow ``Cable 
and ADS Penetration by DMA'' hyperlink). These include 27 of the Top 50 
most-populated DMAs and the following 13 of the Top 20 most-populated 
DMAs: New York (No. 1; 88.5 percent cable market share); Chicago (No. 
3; 77.1 percent cable market share); Philadelphia (No. 4; 83 percent 
cable market share); San Francisco-Oakland-San Jose (No. 6; 72.9 
percent cable market share); Boston (No. 7; 87.5 percent cable market 
share); Washington, DC (No. 9; 72.2 percent cable market share); 
Detroit (No. 11; 76.3 percent cable market share); Tampa-St. Pete (No. 
13; 84.2 percent cable market share); Seattle (No. 14; 78.9 percent 
cable market share); Minneapolis-St. Paul (No. 15; 70.3 percent cable 
market share); Miami-Ft. Lauderdale (No. 16; 70.4 percent cable market 
share); Cleveland-Akron (No. 17; 77.1 percent cable market share); 
Orlando (No. 19; 76.7 percent cable market share). We note that the 
data refer to the market share held by ``wired cable operators,'' and 
thus reflect market share data for incumbent cable operators as well as 
cable overbuilders. Given the minimal market share held by 
overbuilders, however, we believe the data provide a useful estimate of 
the market share held by incumbent cable operators. See 13th Annual 
Report, 24 FCC Rcd 542, 591 and 684, Table B-1 (2009) (concluding that 
broadband service providers, most of which are overbuilders that 
compete with incumbent cable operators, serve only 1.46 percent of MVPD 
subscribers). While Cox notes that it has met the ``effective 
competition'' test in certain markets, that test is not relevant here. 
The Media Bureau's review of data from Cox's effective competition 
petitions indicated that the DBS penetration rates in nine out of 54 
San Diego franchise areas served by Cox exceeded 15 percent, and that a 
local exchange carrier (``LEC'') offered service in other franchise 
areas. See Cox Communications San Diego: Petition for Determination of 
Effective Competition in 27 Communities in California, 23 FCC Rcd 7106, 
7110-11, App. A, B (MB, 2008). These numbers do not demonstrate that 
the entire San Diego DMA is competitive nor that this level of 
competition deprives cable operators of the incentive to withhold or to 
take other anticompetitive actions with their affiliated programming.
    49. The Commission has also found that the grouping of commonly 
owned cable systems into regional clusters enhances the ability and 
incentive of vertically integrated cable firms to engage in unfair acts 
with their affiliated programming. See 2007 Program Access Order. 
Recent data indicates that over 77 percent of cable subscribers are 
served by systems that are part of regional clusters. See 13th Annual 
Report, 24 FCC Rcd at 684 (Table B-1) and 686 (Table B-2). In the 2007 
Program Access Order, the Commission relied on data indicating that the 
percentage of cable subscribers that are served by systems that are 
part of regional clusters was between 85 and 90 percent. Commenters 
explain that clustering of a cable operator's systems makes terrestrial 
delivery of affiliated regional programming more feasible. And the 
Commission has previously demonstrated through empirical analyses that 
clustering enhances the potential profitability of withholding regional 
programming from rival distributors. See 2007 Program Access Order 
(``[I]n many cities where cable [multiple system operators (``MSOs'')] 
have clusters, the market penetration of competitive MVPDs is much 
lower and cable market penetration is much higher than their nationwide 
penetration rates. . . . As a result, the cost to a cable-affiliated 
programmer of withholding regional programming is lower in many cases 
than the cost of withholding national programming. Moreover, the 
affiliated cable operator will obtain a substantial share of the 
benefits of a withholding strategy because its share of subscribers 
within the cluster is likely to be inordinately high.''); see id. 
(concluding that withholding of an RSN would be profitable in a 
significant range of cases).
    50. The Commission has also concluded that the recent emergence of 
new wireline entrants in the video distribution market enhances the 
incentive of incumbent cable operators to engage in unfair acts with 
their affiliated programming. See id. Data indicate that DBS operators 
do not constrain the price of cable service to the extent that wireline 
MVPDs do, thereby implying that incumbent cable operators perceive 
wireline MVPDs as a more significant competitive threat. See Cable 
Price Report, 24 FCC Rcd at 261. In addition, unlike DBS operators, 
wireline MVPDs can offer combinations of video, voice, and data 
services similar to those that incumbent cable operators offer to 
customers (the ``triple play''), thus posing a greater competitive 
threat than DBS to cable operators. (The Commission has noted a ``shift 
from competition between stand-alone services to that between service 
bundles.'' See Promotion of Competitive Networks in Local 
Telecommunications Markets, Report and Order, 23 FCC Rcd 5385, 5388-89 
(2008). Although DBS operators offer triple play packages to their 
customers, they partner with outside vendors to do so.) Moreover, 
because recent wireline entrants have relatively small subscriber bases 
in most areas at this time, withholding affiliated programming from 
these new entrants would not cause programmers to lose a significant 
current source of revenue. See 2007 Program Access Order (``Because 
recent entrants have minimal subscriber bases at this time, the costs 
that a cable-affiliated programmer would incur from withholding 
programming from recent entrants are negligible.''); see also 13th 
Annual Report, 24 FCC Rcd at 591 and 684, Table B-1 (concluding that 
broadband

[[Page 9701]]

service providers, most of which are overbuilders that compete with 
incumbent cable operators, serve only 1.46 percent of MVPD 
subscribers).
    51. In the 2007 Program Access Order, the Commission noted the 
argument that, because of the non-discrimination provision of the 
program access rules, a vertically integrated programmer that withholds 
programming from one competitive MVPD in a market (such as a new 
entrant with a minimal subscriber base) would generally need to 
withhold the programming from all other competitive MVPDs in the market 
(such as an established competitor with a significant number of 
subscribers), thereby increasing the foregone revenues resulting from a 
withholding strategy. This condition does not apply in the case of 
terrestrially delivered, cable-affiliated programming, however, because 
the program access rules do not currently apply to this programming. 
Thus, the non-discrimination provision of the program access rules 
applicable to satellite-delivered, cable-affiliated programming does 
not preclude a vertically integrated programmer from withholding its 
terrestrially delivered programming from a new entrant in a market but 
providing the same programming to established competitors in the 
market. Moreover, even if the non-discrimination rule applied to 
terrestrially delivered, cable-affiliated programming, the Commission 
nonetheless found in the 2007 Program Access Order that this rule would 
not deter withholding because the long-term benefits to the vertically 
integrated cable operator would outweigh any short-term costs.
2. Evidence of Unfair Acts
    52. Our judgment that cable operators continue to have the 
incentive and ability to withhold or take other unfair acts with their 
affiliated programming, including terrestrially delivered programming, 
is supported by real-world evidence. Because the program access rules 
currently apply only to satellite-delivered programming, terrestrial 
distribution allows a cable-affiliated programmer to bypass the program 
access rules. The record here, as well as our discussion in the 2007 
Program Access Order, reflects substantial evidence that cable firms 
withhold affiliated programming from competitors when not barred from 
doing so. Moreover, the record reflects that terrestrial distribution 
is becoming more cost effective, and that its use is likely to continue 
and possibly increase in the future. Below, we provide several examples 
of withholding of terrestrially delivered, cable-affiliated 
programming. Although we provide examples of terrestrially delivered, 
cable-affiliated programming networks that have been withheld from 
competitive MVPDs, we do not conclude in this Order that the 
withholding of any of these networks is currently significantly 
hindering or preventing any MVPD from providing satellite cable 
programming or satellite broadcast programming in violation of Section 
628(b). Rather, that would be a point of fact to be proven or rebutted 
in each case. As discussed below, we will consider on a case-by-case 
basis whether an unfair act involving terrestrially delivered, cable-
affiliated programming is significantly hindering or preventing an MVPD 
from providing satellite cable programming or satellite broadcast 
programming.
    53. HD Feeds of MSG and MSG+. Cablevision has withheld the 
terrestrially delivered HD feeds of its affiliated MSG and MSG+ RSNs 
from certain competitors in New York City, Buffalo, and Connecticut. 
See 2007 Program Access Order. Consumers Union states that, even though 
Cablevision does not provide cable service in Buffalo, Cablevision has 
``chosen to make this content available only to select MVPDs and has 
denied access to Verizon.''
    54. Cox-4 San Diego. Cox has withheld the terrestrially delivered 
Cox-4 channel, which has exclusive rights to the San Diego Padres 
baseball games, from DIRECTV, EchoStar, and AT&T. See 2007 Program 
Access Order. As discussed above, the Media Bureau has denied without 
prejudice a program access complaint regarding access to this 
programming because (i) there is no precedent finding that withholding 
of terrestrially delivered programming is a violation of Section 
628(b); and (ii) the pending rulemaking, rather than an adjudicatory 
proceeding, is the correct forum for addressing this issue. See AT&T v. 
Coxcom, 24 FCC Rcd at 2864.
    55. Comcast SportsNet Philadelphia. Comcast has withheld this 
terrestrially delivered RSN, which carries regional professional sports 
programming in Philadelphia, from DBS firms. See Adelphia Order, 21 FCC 
Rcd at 8276; see also 2007 Program Access Order. This RSN was the 
subject of previous program access complaints, which were denied 
because (i) the programming was terrestrially delivered and thus beyond 
the scope of the program access rules established pursuant to Section 
628(c)(2) and (ii) there were not sufficient facts alleged to find that 
Comcast delivered the programming terrestrially to evade the program 
access rules. See DIRECTV, Inc. v. Comcast Corp., 13 FCC Rcd 21822 
(CSB, 1998) and EchoStar Commc'ns Corp. v. Comcast Corp., 14 FCC Rcd 
2089 (CSB, 1999), aff'd., DIRECTV, Inc. and EchoStar Commc'ns Corp. v. 
Comcast Corp. et al., 15 FCC Rcd 22802 (2000), aff'd EchoStar Commc'ns 
Corp. v. FCC, 292 F.3d 749 (D.C. Cir. 2002). As a result of merger 
conditions adopted in the Adelphia Order, Comcast SportsNet 
Philadelphia is currently subject to the program access rules 
applicable to satellite-delivered programming with respect to some but 
not all of the competing MVPDs in Philadelphia. See Adelphia Order, 21 
FCC Rcd at 8276 (``[W]e do not require that Comcast SportsNet 
Philadelphia be subject to [the program access] conditions to the 
extent it is not currently available to MVPDs. With regard to MVPDs 
that currently have contracts for SportsNet Philadelphia, both the 
program access and arbitration conditions will apply as set forth 
above.'').
    56. Sports Programming in New York City. The Commission previously 
noted evidence that Cablevision withheld certain sports programming 
from RCN after Cablevision revised its distribution system from 
satellite to terrestrial delivery. See 2007 Program Access Order. RCN's 
program access complaint regarding this dispute was denied because (i) 
the programming was terrestrially delivered and thus beyond the scope 
of the program access rules established pursuant to Section 628(c)(2) 
and (ii) Cablevision did not change its distribution system from 
satellite to terrestrial delivery to evade the Commission's rules. See 
RCN Telecom Servs. v. Cablevision Sys. Corp., 14 FCC Rcd 17093 (CSB, 
1999), aff'd RCN Telecom Servs. v. Cablevision Sys. Corp., 16 FCC Rcd 
12048 (2001).
    57. New England Cable News. The Commission previously noted claims 
that this terrestrially delivered, Comcast-affiliated regional news 
network had been withheld temporarily from RCN. See 2007 Program Access 
Order.
    58. CN8--The Comcast Network. The Commission previously noted 
claims that this terrestrially delivered, Comcast-affiliated local news 
and information channel is available only to Comcast and Cablevision 
subscribers and is withheld from competitors to incumbent cable 
operators. See id.
    59. iN DEMAND. The Commission previously noted claims that this 
terrestrially delivered, cable-affiliated network has been withheld 
from certain MVPD competitors. See id.
3. Evidence of the Impact of Unfair Acts
    60. As discussed below, Commission action to address unfair acts 
involving

[[Page 9702]]

terrestrially delivered, cable-affiliated programming is also needed 
because (i) there is evidence suggesting that such conduct has 
significantly hindered MVPDs from providing satellite cable programming 
and satellite broadcast programming in some cases and (ii) by 
significantly hindering MVPDs from providing video programming to 
subscribers, such conduct may significantly hinder the ability of 
competitive MVPDs to provide broadband services, particularly in rural 
areas.

a. Impact on Competition in the Video Distribution Market

    61. Our previous decisions, as well as the record here, demonstrate 
that unfair acts involving terrestrially delivered, cable-affiliated 
programming may ``hinder significantly'' MVPDs from providing satellite 
cable programming and satellite broadcast programming in some cases, 
thereby harming competition in the video distribution market. See 2007 
Program Access Order; Adelphia Order, 21 FCC Rcd at 8271. We note that 
AT&T and Verizon have submitted studies (some of which contain redacted 
information) and other evidence in the record of this proceeding to 
support their view that withholding of the MSG HD and Cox-4 networks 
has had the purpose or effect that triggers Section 628(b). These 
studies and other evidence were submitted previously in pending 
complaint proceedings. We will assess the merits of those studies and 
other evidence in addressing the relevant complaints.
    62. In 2006, the Commission performed a regression analysis which 
concluded that Comcast's withholding of the terrestrially delivered 
Comcast SportsNet Philadelphia RSN from DBS operators caused the 
percentage of television households subscribing to DBS in Philadelphia 
to be 40 percent lower than what it otherwise would have been. See 
Adelphia Order, 21 FCC Rcd at 8271; see also 2007 Program Access Order. 
The regression analysis also concluded that Cox's withholding of the 
terrestrially delivered Cox-4 RSN from DBS operators in San Diego 
caused the percentage of television households subscribing to DBS in 
that city to be 33 percent lower than it otherwise would have been. See 
Adelphia Order, 21 FCC Rcd at 8271; 2007 Program Access Order. This 
provides evidence that unfair acts involving terrestrially delivered, 
cable-affiliated programming can have the effect in some cases of 
significantly hindering MVPDs from providing satellite cable 
programming and satellite broadcast programming.
    63. The empirical model was based on the Wise and Duwadi model, 
which examines DBS penetration and the variables that affect it. See 
Andrew S. Wise and Kiran Duwadi, Competition between Cable Television 
and Direct Broadcast Satellite: The Importance of Switching Costs and 
Regional Sports Networks, 1 J. COMPETITION L. & ECON. 679 (2005). The 
data used in the analysis came from the Commission's 2005 Cable Price 
Survey, Nielsen Media Research, and Comcast and Time Warner filings. 
See Adelphia Order, 21 FCC Rcd at 8344-47, App. D. In the 2007 Program 
Access Order, the Commission responded to and refuted criticisms of the 
Commission's regression analysis.
    64. We note that more than three years have passed since the 
Commission performed its regression analysis in the Adelphia Order 
regarding the impact of withholding of Comcast SportsNet Philadelphia 
and Cox-4 on the market shares of DBS operators in Philadelphia and San 
Diego, respectively. Commenters claim that there have been important 
developments in the video distribution markets in Philadelphia and San 
Diego since this time. Our reliance here on the Commission's analysis 
in the Adelphia Order to conclude that unfair acts involving 
terrestrially delivered, cable-affiliated programming can significantly 
hinder MVPDs from providing video service in some cases should not be 
read to imply that withholding of Comcast SportsNet Philadelphia or 
Cox-4 is currently significantly hindering or preventing an MVPD from 
providing satellite cable programming or satellite broadcast 
programming in Philadelphia or San Diego, respectively. Rather, as 
discussed below, we establish a rebuttable presumption that an unfair 
act involving certain terrestrially delivered, cable-affiliated RSNs 
has the purpose or effect of significantly hindering or preventing an 
MVPD from providing satellite cable programming or satellite broadcast 
programming. A defendant to a program access complaint alleging an 
unfair act involving an RSN will have the opportunity to rebut this 
presumption.
    65. While the Commission concluded in the 1998 Program Access Order 
(63 FR 45740, August 27, 1998) that the record developed in that 
proceeding did not demonstrate that unfair acts involving terrestrially 
delivered, cable-affiliated programming were having a ``significant 
anticompetitive effect,'' that conclusion was based on the limited data 
that were available more than ten years ago. (In that decision, the 
Commission also noted that Congress was considering legislation at the 
time which, if enacted, would ``introduce important changes to the 
program access provisions, including clarification of the Commission's 
jurisdiction over terrestrially-delivered programming.'' The 
Commission, however, never stated or implied that it did not have 
jurisdiction over such programming absent such clarification.) We now 
have evidence that unfair acts involving terrestrially delivered, 
cable-affiliated programming may well have the effect in some cases of 
significantly hindering MVPDs from providing all programming to 
subscribers and consumers. Moreover, while the Commission concluded in 
the 1998 Program Access Order that the record developed in that 
proceeding did not demonstrate that programming was being shifted from 
satellite to terrestrial delivery, the record here demonstrates that 
the MVPD marketplace has evolved, such that terrestrial distribution is 
becoming more cost effective and its use is likely to increase for new 
as well as established programming networks. Indeed, the record 
reflects that competitively significant networks, such as RSNs, are 
being delivered terrestrially today.
    66. Comcast argues that the percentage of vertically integrated 
programming networks affiliated with a cable operator has dropped from 
57 percent in 1992 to less than 15 percent today and contends that no 
program owner has market power. Moreover, cable operators contend that 
the digital transition will likely foster the development of more 
programming and that Internet programming is starting to develop as a 
competitive alternative. In addition, NCTA notes that competitors to 
incumbent cable operators market themselves as offering superior 
programming, and contends that such marketing undermines any 
justification for ``retention of the existing regulation of cable-
affiliated programming, let alone expansion of those regulations.''
    67. Accordingly, vertically integrated cable operators argue that 
MVPDs are not dependent on vertically integrated cable programming 
because multiple programming options exist. But that is not always the 
case. As the Commission concluded in the 2007 Program Access Order, 
cable operators own programming for which there may be no good 
substitutes, and this ``must-have'' programming is necessary for viable 
competition in the video distribution market. The Commission explained 
that this includes both satellite-delivered and terrestrially delivered 
programming. See 2007 Program Access Order (discussing withholding of 
terrestrially delivered, cable-affiliated RSNs in Philadelphia and San 
Diego). As the

[[Page 9703]]

Commission stated in the 2002 Program Access Order, ``cable 
programming--be it news, drama, sports, music, or children's 
programming--is not akin to so many widgets.'' The salient point for 
purposes of Section 628(b) is not the total number of programming 
networks available or the percentage of these networks that are 
vertically integrated with cable operators, but rather the popularity 
of the particular programming that is withheld and how the inability of 
competitive MVPDs to access that programming in a particular local 
market may impact their ability to provide a commercially attractive 
MVPD service. See 2007 Program Access Order.
    68. Cable operators claim that unfair acts involving terrestrially 
delivered, cable-affiliated programming have not significantly hindered 
their competitors from providing satellite cable programming or 
satellite broadcast programming. For example, some commenters note that 
DBS operators continue to attract subscribers in San Diego and 
Philadelphia, despite the fact that cable operators in those markets 
have withheld the local RSN from the DBS operators. Cox and Cablevision 
also note that competitors to incumbent cable operators have entered 
the video distribution market despite the terrestrial loophole. Other 
commenters contend that withholding of certain terrestrially delivered, 
cable-affiliated programming, such as local news and community 
programming, does not raise competitive concerns. One new entrant MVPD, 
Verizon, urged the Commission to extend the program access rules only 
to (i) terrestrially delivered RSNs; and (ii) terrestrially delivered 
HD feeds of programming that is otherwise satellite-delivered.
    69. We believe that the cable operators' general, sweeping claims 
are refuted by the Commission's conclusion in the Adelphia Order that 
DBS market penetration was significantly reduced as a result of the 
denial of access to certain terrestrially delivered, cable-affiliated 
programming. See 2007 Program Access Order; Adelphia Order, 21 FCC Rcd 
at 8271. We do not believe, however, that significant hindrance will 
result in every case. The Commission concluded in the Adelphia Order, 
based on the record evidence in that case, that lack of access to 
certain terrestrially delivered RSNs had a significant competitive 
impact. See 21 FCC Rcd at 8271 (concluding that Comcast's withholding 
of the terrestrially delivered Comcast SportsNet Philadelphia RSN from 
DBS operators caused the percentage of television households 
subscribing to DBS in Philadelphia to be 40 percent lower than what it 
otherwise would have been; concluding that Cox's withholding of the 
terrestrially delivered Cox-4 RSN from DBS operators in San Diego 
caused the percentage of television households subscribing to DBS in 
that city to be 33 percent lower than what it otherwise would have 
been); see also 2007 Program Access Order. Lack of access to certain 
other programming, however, did not have a significant hindering 
effect. See Adelphia Order, 21 FCC Rcd at 8271-72 (concluding that 
withholding of a terrestrially delivered RSN in Charlotte did not show 
a statistically significant effect on predicted market share, and 
noting that the RSN showed the games of the Charlotte Bobcats, a 
relatively new team that did not yet have a strong enough following to 
induce large numbers of subscribers to switch MVPDs); id. at 8279 
(concluding that the record did not indicate that an MVPD's lack of 
access to terrestrially delivered non-sports regional programming would 
harm competition or consumers).
    70. Thus, we believe that the potential impact on competition in 
some cases justifies a case-by-case consideration of the competitive 
impact of unfair acts involving specific terrestrially delivered, 
cable-affiliated programming. Rather than adopting a general conclusion 
about the effect of these unfair acts, we believe that case-by-case 
consideration of the impact on competition in the video distribution 
market is necessary to address whether unfair practices significantly 
hinder competition in particular cases.
    71. We note that the Commission adopted a different approach in the 
MDU Order, where it concluded that it would be unnecessarily burdensome 
for the Commission and parties to assess exclusive contracts between 
cable operators and MDU owners on a case-by-case basis. In that case, 
however, the Commission explained that ``exclusivity clauses protect 
cable operators from competition in MDUs from new entrants into the 
MVPD business.'' By definition, exclusive agreements in the MDU context 
prevent competitors from providing service. See also NCTA, 567 F.3d at 
664 (``cable operators execute them precisely so that they can be the 
sole company serving a building. . .''). Thus, the Commission 
categorically proscribes such agreements. In contrast, while some 
unfair acts involving terrestrially delivered, cable-affiliated 
programming can and historically have significantly hindered MVPDs from 
providing satellite cable programming and satellite broadcast 
programming, the record here indicates that others may not. 
Accordingly, a case-by-case approach to implementing Section 628(b) is 
necessary in the present context based on the current record, whereas 
it was not necessary in the MDU Order. We note, however, that on an 
appropriate record the Commission would have authority to adopt a per 
se ban on particular unfair acts prohibited by Section 628(b). See 47 
U.S.C. 548(b), (c)(1); NTCA, 567 F.3d 659. Nothing in this Order 
forecloses the Commission from adopting such a per se ban on unfair 
acts involving terrestrially delivered, cable-affiliated programming in 
the future. We will continue to monitor marketplace developments 
regarding terrestrially delivered, cable-affiliated programming, as 
well as the impact of the rules adopted in this Order on potential 
complainants. Based on these developments, we may initiate a new 
proceeding in the future that explores the adoption of a per se ban on 
unfair acts involving terrestrially delivered, cable-affiliated 
programming or certain classes of such programming.
b. Impact on Ability To Provide Broadband Services
    72. Commission action to address unfair acts involving 
terrestrially delivered, cable-affiliated programming will have 
additional benefits, not specifically envisioned by Congress in 1992, 
because such acts have the potential to limit the ability of MVPDs to 
provide broadband services, particularly in rural areas. The Commission 
has previously concluded that a wireline firm's decision to deploy 
broadband is linked to its ability to offer video. See Implementation 
of Section 621(A)(1) of the Cable Communications Policy Act of 1984 as 
Amended by the Cable Television Consumer Protection and Competition Act 
of 1992, Report and Order and Further Notice of Proposed Rulemaking, 22 
FCC Rcd 5101, 5132-33 (2006), aff'd., Alliance for Community Media v. 
FCC, 529 F.3d 763 (6th Cir. 2008). Thus, by impeding the ability of 
MVPDs to provide video service, unfair acts involving terrestrially 
delivered, cable-affiliated programming can also impede the ability of 
MVPDs to provide broadband services. Allowing unfair acts involving 
terrestrially delivered, cable-affiliated programming to continue where 
they have this effect would undermine the goal of promoting the 
deployment of advanced services that Congress established as a priority 
for the Commission. See Telecommunications Act of 1996, Public Law 104-
104, section 706, 110 Stat. 56, 153 (codified at 47 U.S.C. 157 note). 
This secondary

[[Page 9704]]

effect heightens the urgency for Commission action.
    73. We disagree with Cablevision's contention that addressing the 
terrestrial loophole will not impact broadband deployment because AT&T 
and Verizon have already invested in broadband infrastructure. The 
record here contains no evidence that AT&T and Verizon have already 
deployed broadband networks throughout their service territories or 
that these providers will not face decisions regarding whether to 
upgrade existing networks. Moreover, Congress directed the Commission 
to promote the deployment of broadband throughout the nation, including 
in markets outside of the service areas of AT&T and Verizon. See 
American Recovery and Reinvestment Act of 2009, Public Law 111-5, 123 
Stat. 115 (2009) (authorizing the Commission to create the National 
Broadband Plan that ``shall seek to ensure that all people of the 
United States have access to broadband capability''); 
Telecommunications Act of 1996, Public Law 104-104, section 706, 110 
Stat. 56, 153 (codified at 47 U.S.C. 157 nt. (2008)) (directing the 
Commission to ``encourage the deployment on a reasonable and timely 
basis of advanced telecommunications capability to all Americans'').
c. Impact on Investment in Programming and Product Differentiation
    74. Vertically integrated cable operators argue that the Commission 
should refrain from addressing denials of terrestrially delivered, 
cable-affiliated programming because exclusive distribution contracts 
for this programming can promote investment in programming and product 
differentiation. Advance/Newhouse notes that it has developed regional 
non-sports programming that is terrestrially delivered and therefore 
not subject to the program access rules applicable to satellite-
delivered programming. Advance/Newhouse states that its affiliated 
cable operators offer this programming exclusively, thereby 
differentiating their service offerings from MVPD competitors. Advance/
Newhouse contends that applying program access requirements to this 
programming would force its affiliated cable operators to share this 
programming with their competitors, thereby eliminating any economic 
incentive to create this programming. Advance/Newhouse states that it 
is unlikely to continue investing in such programming unless its 
affiliated cable operators can offer the programming on an exclusive 
basis.
    75. We note that the Commission in the 2007 Program Access Order 
found unpersuasive arguments that the program access rules, including 
the exclusive contract prohibition, have reduced the incentives for 
cable operators and competitive MVPDs to create and invest in 
programming. While cable operators claim without empirical support that 
regional networks are less likely to be created if they are subject to 
the complaint procedure established in this Order, we find no basis for 
assuming that the impact of the case-by-case approach adopted here on 
the incentives to create programming will be different than the impact 
of the per se rule applicable to satellite-delivered programming. The 
Commission noted that the number of vertically integrated satellite-
delivered national programming networks has in fact more than doubled 
since 1994 when the rule implementing the exclusive contract 
prohibition took effect. See 2007 Program Access Order. While evidence 
was submitted in that proceeding that the percentage of vertically 
integrated satellite-delivered national programming networks had 
decreased over time, competitive MVPDs characterized the decrease as 
``meaningless because it is attributable to an increase in the number 
of total programming networks available, most of which they contend 
have minimal subscriber bases and are targeted towards niche markets.'' 
See id. Competitive MVPDs argued that the more relevant fact was the 
control of cable MSOs over ``must have'' programming, access to which 
is necessary to compete in the video distribution market. See id. The 
Commission agreed: ``What is most significant to our analysis is not 
the percentage of total available programming that is vertically 
integrated with cable operators, but rather the popularity of 
programming that is vertically integrated and how the inability of 
competitive MVPDs to access this programming will affect the 
preservation and protection of competition in the video distribution 
marketplace.'' See id. A similar analysis applies to the present 
matter, given our goal of increasing competition and diversity in the 
video distribution market. In addition, while vertically integrated 
cable operators claim that exclusive deals and other unfair acts are 
justified because they allow a cable operator to differentiate its 
services from other MVPDs, Section 628(b) specifically precludes such 
acts where they have the purpose or effect set forth in Section 628(b).
    76. In sum, Sections 628(b) and 628(c)(1) of the Act give the 
Commission authority to address unfair acts of cable operators that 
have the purpose or effect of hindering significantly or preventing any 
MVPD from providing ``satellite cable programming or satellite 
broadcast programming to subscribers or consumers.'' 47 U.S.C. 548(b); 
see 47 U.S.C. 548(c)(1). The focus of the statute is not on the ability 
of an MVPD to provide a particular terrestrially delivered programming 
network, but on the ability of the MVPD to compete in the video 
distribution market by selling satellite cable and satellite broadcast 
programming to subscribers and consumers. To be sure, unfair acts 
involving terrestrially delivered, cable-affiliated programming 
generally do not absolutely bar an MVPD from providing satellite cable 
programming or satellite broadcast programming to subscribers or 
consumers. For example, an incumbent cable operator's exclusive 
contract with a terrestrially delivered, cable-affiliated RSN does not 
totally preclude a rival MVPD from providing other programming, 
including satellite cable programming and satellite broadcast 
programming, to subscribers or consumers.
    77. As discussed above, however, in some cases the effect of 
denying an MVPD the ability to provide certain terrestrially delivered, 
cable-affiliated programming may be to significantly hinder the MVPD 
from providing video programming in general, including satellite cable 
programming and satellite broadcast programming, as well as 
terrestrially delivered programming. See 2007 Program Access Order; 
Adelphia Order, 21 FCC Rcd at 8271. The result of this conduct may be 
to discourage MVPDs from entering new markets or to limit the ability 
of MVPDs to provide a competitive alternative to the incumbent cable 
operator. The reduction in robust competition in the video distribution 
market that results may allow cable operators to raise rates and to 
refrain from innovating, thereby adversely impacting consumers. 
Consumers Union, for instance, asserts that large cable operators use 
the terrestrial loophole ``to hold consumers hostage * * *.'' This is 
consistent with the Commission's analysis in the MDU Order. In that 
decision, the Commission found that exclusivity clauses significantly 
hinder MVPDs from providing satellite cable programming and satellite 
broadcast programming throughout a market, including to subscribers who 
do not reside in MDUs, because exclusivity clauses ``deter[ ]

[[Page 9705]]

new entry into the MVPD market in many areas because they put a 
significant number of new customers off limits to new entrants.'' MDU 
Order (``Even if exclusivity clauses do not completely bar new entrants 
from the MVPD market everywhere, they foreclose new entrants from many 
millions of households, a significant part of the national marketplace. 
Such clauses could therefore deter new entrants from attempting to 
enter the market in many areas.'').
    78. In addition to satisfying the plain language of Section 628(b), 
our action here will also further the goals established by Congress in 
Sections 628(a) and 628(c)(1) of the Act. See 47 U.S.C. 548(a), (c)(1); 
1993 Program Access Order, 8 FCC Rcd at 3360. First, our action will 
increase competition and diversity in the video distribution market by 
providing MVPDs with an opportunity to obtain access to certain cable-
affiliated programming that they are currently unable to offer. See 47 
U.S.C. 548(a), (c)(1). Second, our action will increase the 
availability of satellite cable programming and satellite broadcast 
programming to persons in rural and unserved areas by eliminating a 
barrier to entry in the video distribution market. See 47 U.S.C. 
548(a). Third, our action will spur the development of communications 
technologies by promoting the provision of broadband services by MVPDs. 
See 47 U.S.C. 548(a), (c)(1).

C. Constitutional Issues

    79. We conclude that addressing unfair acts involving terrestrially 
delivered, cable-affiliated programming on a case-by-case basis 
comports with the First Amendment. As the D.C. Circuit explained in 
rejecting a facial challenge to the constitutionality of the program 
access provisions dictated by Section 628(c)(2) and applicable to 
satellite-delivered, cable-affiliated programming, these provisions 
will survive intermediate scrutiny if they ``further[ ] an important or 
substantial governmental interest; if the governmental interest is 
unrelated to the suppression of free expression; and if the incidental 
restriction on alleged First Amendment freedoms is no greater than is 
essential to the furtherance of that interest.'' Time Warner 
Entertainment Co. L.P. v. FCC, 93 F.3d 957, 978 (D.C. Cir. 1996) 
(quoting Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 662 
(1994) (quoting United States v. O'Brien, 391 U.S. 367, 377 (1968))). 
We conclude that the rules we adopt today with respect to terrestrially 
delivered, cable-affiliated programming comport with the First 
Amendment.
    80. First, in Time Warner, the court found that the governmental 
interest Congress intended to serve in enacting the program access 
provisions was ``the promotion of fair competition in the video 
marketplace,'' and that this interest was substantial. Id. Moreover, 
one of Congress' express findings in enacting the 1992 Cable Act was 
that ``[t]here is a substantial governmental and First Amendment 
interest in promoting a diversity of views provided through multiple 
technology media.'' 1992 Cable Act, Sec.  2(a)(6). Additionally, the 
court noted Congress' conclusion that ``the benefits of these 
provisions--the increased speech that would result from fairer 
competition in the video programming marketplace--outweighed the 
disadvantages [resulting in] the possibility of reduced economic 
incentives to develop new programming.'' Time Warner, 93 F.3d at 979 
(citing S. Rep. No. 102-92 (1991), at 26-28, reprinted in 1992 
U.S.C.C.A.N. 1133, 1159-61). We find that this governmental interest 
remains substantial today. As the Commission concluded in the 2007 
Program Access Order, cable operators still have a dominant share of 
MVPD subscribers, there is evidence that cable prices have risen in 
excess of inflation, and cable operators still own significant 
programming. These factors lead us to believe that regulations intended 
to promote competition in the video distribution market in accordance 
with the objectives of Congress are still warranted. Our decision here 
furthers this substantial governmental interest by providing 
competitive MVPDs with an opportunity to obtain access to certain 
cable-affiliated programming that they are currently unable to offer, 
thereby promoting competition in the video distribution market for the 
benefit of consumers.
    81. We note that a federal court of appeals in recently vacating 
the Commission's horizontal cable ownership cap stated that competition 
has increased in the video distribution market since the 1992 Cable Act 
was passed. See Comcast Corp. v. FCC, 579 F.3d 1, 8 (D.C. Cir. 2009). 
While competition has increased since the 1992 Cable Act was passed, 
cable operators still control close to two-thirds of all pay television 
subscribers, and their market share exceeds 70 percent in many markets. 
Accordingly, we believe that promoting competition in the video 
marketplace remains a substantial governmental interest. See 2007 
Program Access Order.
    82. Second, in Time Warner, the court held that the governmental 
objective served by the statutory program access provisions was 
unrelated to the suppression of free expression. See 93 F.3d at 978 
(``[T]he vertically integrated programming provisions apply to only a 
limited number of companies for a perfectly legitimate reason: The 
antitrust concerns underlying the statute arise precisely because the 
number of vertically integrated companies is small. The vertically 
integrated programmer provisions are thus not `structured in a manner 
that raise[s] suspicions that their objective was, in fact, the 
suppression of certain ideas.' '' (quoting Turner, 512 U.S. at 660)). 
Similarly, our decision to address unfair acts involving terrestrially 
delivered, cable-affiliated programming on a case-by-case basis is not 
based on programming content but is instead intended to address 
significant hindrances to competition in the video distribution market. 
It responds to concerns about competition, not content. Thus, the 
regulations are content-neutral and unrelated to the suppression of 
free speech.
    83. Third, any alleged restriction on speech resulting from our 
decision ``is no greater than is essential to the furtherance'' of 
Congress' interest in promoting competition in the video distribution 
market. Id. The analysis in Time Warner applies here as well. Indeed, 
Time Warner upheld as narrowly tailored the categorical, prophylactic 
program access rules, whereas here we adopt a tailored case-by-case 
approach that examines actual competitive harms in each instance. 
Noting the Commission's decision in the 2007 Program Access Order, 
Comcast contends that applying an exclusive contract prohibition to all 
cable-affiliated programming is overinclusive because it regulates at 
least some programming that is not competitively significant. But that 
argument misconceives the action we take today. In the 2007 Program 
Access Order, the Commission was implementing Section 628(c)(2)(D), 
which establishes a broad prophylactic rule that subjects all 
satellite-delivered, cable-affiliated programming to an exclusive 
contract prohibition, subject to a procedure whereby individual 
programmers can seek Commission approval to enter into exclusive 
arrangements. See 47 U.S.C. 548(c)(2)(D), 548(c)(4). Here, we are not 
implementing the statutory scheme set forth in Section 628(c)(2)(D). 
Rather, we act pursuant to Sections 628(b) and 628(c)(1), which give 
the Commission broad authority to adopt rules to address unfair acts of 
cable operators that have

[[Page 9706]]

the purpose or effect of hindering significantly any MVPD from 
providing satellite cable programming or satellite broadcast 
programming. See 47 U.S.C. 548(b), (c)(1). We decline to adopt a broad 
prophylactic rule that subjects all terrestrially delivered, cable-
affiliated programming to the program access rules because we lack 
sufficient record evidence to reach general conclusions that unfair 
acts involving terrestrially delivered, cable-affiliated programming 
will always prevent or significantly hinder an MVPD from providing 
video services. Rather, we adopt rules whereby the Commission will 
consider on a case-by-case basis whether an unfair act involving 
terrestrially delivered, cable-affiliated programming has the purpose 
or effect of preventing or significantly hindering an MVPD from 
providing satellite cable programming or satellite broadcast 
programming to subscribers or consumers, as required by Section 628(b). 
The complaint process we establish today requires showings over and 
above those required by the program access rules applicable to 
satellite-delivered programming, and these additional showings 
(including a purpose or effect of preventing or significantly hindering 
an MVPD from providing satellite cable or satellite broadcast 
programming) prevent overinclusiveness. In short, our action today 
addresses any legitimate concerns about tailoring by adopting a case-
by-case evaluation rather than a broad prophylactic rule.
    84. Again noting the Commission's decision in the 2007 Program 
Access Order, Comcast contends that an exclusive contract prohibition 
that covers only cable-affiliated programming is underinclusive because 
it exempts programmers affiliated with non-cable MVPDs and unaffiliated 
programmers that may offer ``must have'' programming. We are in fact 
considering in this proceeding whether to expand the exclusive contract 
prohibition to apply to programmers affiliated with non-cable MVPDs. 
See NPRM. We do not resolve this issue in this Order. We also note that 
program-access-type conditions already apply to DIRECTV by virtue of 
its merger with Liberty Media. See Liberty/DIRECTV Order, 23 FCC Rcd 
3265, 3340-41, Appendix B, section III (2008). Finally, with respect to 
unaffiliated programmers, the Commission in the 2007 Program Access 
Order found no record evidence to conclude that exclusive arrangements 
involving unaffiliated programmers have harmed competition in the video 
distribution market. Commenters offer no evidence in the record of this 
proceeding that would cause us to revisit this conclusion. While some 
commenters express concern with DIRECTV's exclusive arrangements for 
certain out-of-market, non-regional sports programming, they fail to 
provide evidence in the record of this proceeding of any harm to 
competition resulting from these arrangements.

D. Complaint Filing Requirements

    85. In this Section, we review the types of complaints that MVPDs 
may file regarding unfair acts involving terrestrially delivered, 
cable-affiliated programming pursuant to the rules we establish in this 
Order. The rules we adopt herein do not limit the right of aggrieved 
parties to file complaints pursuant to Section 628(d) alleging other 
violations of Section 628(b). See 47 U.S.C. 548(d). We also discuss 
below four related ways in which the rules we adopt to address unfair 
acts involving terrestrially delivered, cable-affiliated programming 
differ from the program access rules applied to satellite-delivered, 
cable-affiliated programming: (i) There is no per se prohibition on 
exclusive contracts between a cable operator and a cable-affiliated 
programmer that provides terrestrially delivered programming; rather, 
the Commission will assess such contracts on a case-by-case basis in 
response to a program access complaint; (ii) a complainant alleging an 
unfair act involving terrestrially delivered, cable-affiliated 
programming will have the burden of proof (sometimes with the aid of a 
presumption, as explained below) that the defendant's activities have 
the purpose or effect of hindering significantly or preventing the 
complainant from providing satellite cable programming or satellite 
broadcast programming to subscribers or consumers; (iii) in program 
access complaints alleging discrimination by a cable-affiliated 
programmer that provides terrestrially delivered programming (rather 
than an entity specifically listed in Section 628(b)), the complainant 
shall have the additional burden of proof that the programmer that is 
alleged to have engaged in discrimination is wholly owned by, 
controlled by, or under common control with the defendant cable 
operator or cable operators, satellite cable programming vendor or 
vendors in which a cable operator has an attributable interest, or 
satellite broadcast programming vendor or vendors; and (iv) defendants 
will have 45 days--rather than the usual 20 days--from the date of 
service of a program access complaint involving terrestrially 
delivered, cable-affiliated programming to file an Answer to the 
complaint.
1. Types of Claims
    86. Section 628(c)(1) gives the Commission authority to adopt 
regulations defining ``particular conduct'' that is within the scope of 
the ``unfair methods of competition or unfair or deceptive acts or 
practices'' prohibited by Section 628(b). 47 U.S.C. 548(b), (c)(1). In 
Section 628(c)(2), Congress itself defined certain conduct that must be 
included in the Commission's implementing regulations. Congress thereby 
made a conclusive legislative judgment that the categories of conduct 
involving satellite-delivered programming that are enumerated in 
Section 628(c)(2) satisfy the requirements of Section 628(b), including 
the requirement of constituting an ``unfair method[] of competition or 
unfair or deceptive act[] or practice[].'' 47 U.S.C. 548(b). The unfair 
or deceptive conduct that Congress specifically identified in Section 
628(c)(2) is: (i) An exclusive contract between a cable operator and a 
cable-affiliated programmer (see 47 U.S.C. 548(c)(2)(C)-(D)); (ii) 
discrimination by a cable-affiliated programmer in the prices, terms, 
and conditions for sale of programming among MVPDs (see 47 U.S.C. 
548(c)(2)(B)); and (iii) efforts by a cable operator to unduly 
influence the decision of its affiliated programmer to sell programming 
to a competitor (see 47 U.S.C. 548(c)(2)(A)). In the 1993 Program 
Access Order, the Commission explained that the undue or improper 
influence provision of the program access rules ``can play a supporting 
role where information is available (such as might come from an 
internal `whistleblower') that evidences `undue influence' between 
affiliated firms to initiate or maintain anticompetitive discriminatory 
pricing, contracting, or product withholding. Although such conduct may 
be difficult for the Commission or complainants to establish, its 
regulation provides a useful support for direct discrimination and 
contracting regulation.'' See 8 FCC Rcd at 3424.
    87. In this Order, we adopt rules specifically permitting 
complainants to pursue case-by-case claims involving conduct with 
respect to terrestrially delivered, cable-affiliated programming that 
is similar to the categorically prohibited conduct concerning 
satellite-delivered, cable-affiliated programming. We determine that 
this conduct constitutes ``unfair methods of

[[Page 9707]]

competition or unfair or deceptive acts or practices'' under Section 
628(b). Congress has already established that these can be unfair acts 
for purposes of Section 628(b) by including them in Section 628(c)(2). 
The record here, moreover, indicates that these acts involving 
terrestrially delivered programming--like comparable acts involving 
satellite-delivered programming--have the potential to impede entry 
into the video distribution market and to hinder existing competition 
in the market. See MDU Order. We note that our determination here is 
consistent with the MDU Order, in which the Commission generally 
defined an ``unfair method of competition or unfair act or practice'' 
to include an act that ``can be used to impede the entry of competitors 
into the market and foreclose competition based on the quality and 
price of competing service offerings.'' Id. (``[A]lthough we have never 
specifically defined what constitutes an `unfair method of competition' 
or `unfair * * * act or practice' beyond that conduct specifically 
proscribed in Section 628(c)(2), we have recognized that there is 
additional conduct that could be proscribed under Section 628(b). * * * 
[T]he use of an exclusivity clause by a cable operator to `lock up' a 
MDU owner is an unfair method of competition or unfair act or practice 
because it can be used to impede the entry of competitors into the 
market and foreclose competition based on the quality and price of 
competing service offerings.'' (citations omitted)).
    88. Cablevision asks the Commission to add an additional element to 
the definition of an ``unfair act,'' specifically that the ``conduct 
complained of was undertaken other than in pursuit of legitimate 
business or competitive purposes.'' The Commission did not include this 
additional element in the MDU Order when it previously defined the term 
``unfair act'' for purposes of Section 628(b). In that decision, 
despite acknowledging that contracts granting cable operators exclusive 
access to MDUs may have legitimate business purposes, such as helping 
to obtain financing to wire an entire building, the Commission 
nonetheless concluded that such contracts are ``unfair acts'' because 
they ``can be used to impede the entry of competitors into the market 
and foreclose competition based on the quality and price of competing 
service offerings.'' See id.
    89. We thus conclude that actions by cable operators, satellite 
cable programming vendors in which a cable operator has an attributable 
interest, or satellite broadcast programming vendors involving 
terrestrially delivered, cable-affiliated programming that would be 
prohibited by the program access rules under Section 628(c)(2) but for 
the terrestrial loophole (i.e., exclusive contracts, discrimination, 
and undue or improper influence) are ``unfair methods of competition or 
unfair or deceptive acts or practices'' within the meaning of Section 
628(b). We note that there may be other acts or practices that are 
``unfair methods of competition or unfair acts or practices'' under 
Section 628(b). See, e.g., MDU Order (holding that the use of an 
exclusivity clause by a cable operator to ``lock up'' an MDU owner is 
an unfair method of competition). This Order pertains only to exclusive 
contracts, discrimination, and undue or improper influence involving 
programming that is both terrestrially delivered and, consistent with 
Section 628(c)(2), cable-affiliated. We do not reach any conclusions in 
this Order, nor do we foreclose potential complaints, regarding other 
acts that may be ``unfair methods of competition or unfair acts or 
practices'' under Section 628(b). For example, the rules established by 
this Order do not address exclusive contracts between a cable operator 
and a non-cable-affiliated programmer.
    90. Accordingly, an MVPD may initiate a complaint proceeding 
alleging that a cable operator, a satellite cable programming vendor in 
which a cable operator has an attributable interest, or a satellite 
broadcast programming vendor has engaged in one or more of these three 
unfair acts involving terrestrially delivered, cable-affiliated 
programming, with the purpose or effect of preventing or significantly 
hindering an MVPD from providing satellite cable programming or 
satellite broadcast programming to subscribers or consumers. Cable 
operators argue that a ``cable operator'' and a ``satellite cable 
programming vendor'' cannot violate Section 628(b) by withholding 
terrestrial programming. They claim that these entities are 
``captured'' by Section 628(b) only to the extent that they are engaged 
in activities that meet the statutory definition of ``cable operator'' 
and ``satellite cable programming vendor'' (which do not include 
distribution of terrestrial programming). See 47 U.S.C. 522(5) (``the 
term `cable operator' means any person or group of persons (A) who 
provides cable service over a cable system and directly or through one 
or more affiliates owns a significant interest in such cable system, or 
(B) who otherwise controls or is responsible for, through any 
arrangement, the management and operation of such a cable system''); 
548(i)(2) (the ``term `satellite broadcast programming vendor' means a 
person engaged in the production, creation, or wholesale distribution 
for sale of satellite cable programming, but does not include a 
satellite broadcast programming vendor''); see also 47 U.S.C. 522(6) 
(defining ``cable service''); 522(7) (defining ``cable system''); 
548(i)(1) (defining ``satellite broadcast programming''). They claim 
that to the extent they are engaged in other activities, such as the 
distribution of terrestrial programming, they are not covered under 
that section. This argument effectively reads into the statute an 
additional condition that is not there. Nothing in the statute excludes 
an otherwise covered entity from the reach of Section 628(b) simply 
because the conduct at issue is not covered by the statutorily defined 
activities of a ``cable operator'' or ``satellite cable programming 
vendor.'' To the contrary, under Section 628(b), so long as the 
provider itself meets the statutory definition of a covered entity, it 
is prohibited from engaging in any unfair or deceptive acts or 
practices that hinder significantly or prevent any MVPD from providing 
satellite cable or satellite broadcast programming to consumers. In 
contrast, when Congress intends to restrict the circumstances under 
which an entity is covered under a category of providers, it has done 
so expressly. See 47 U.S.C. 153(44) (``A telecommunications carrier 
shall be treated as a common carrier under this Act only to the extent 
that it is engaged in providing telecommunications services''). There 
is no such restriction contained in Section 628(b). For this reason, we 
reject this argument.
    91. While our program access procedural rules provide a defendant 
with 20 days after service to file an Answer to a complaint (see 47 CFR 
76.1003(e)), we will provide the defendant with 45 days from the date 
of service of the complaint to file an Answer to a complaint involving 
terrestrially delivered programming to ensure that the defendant has 
adequate time to develop a response. We believe that additional time is 
appropriate because program access complaints involving terrestrially 
delivered programming, unlike complaints involving satellite-delivered 
programming, entail an additional factual inquiry regarding whether the 
unfair act has the purpose or effect set forth in Section 628(b). With 
the exception of the additional burdens described below and the 
additional time for defendants to file an Answer, these proceedings 
will be subject to the same

[[Page 9708]]

procedures set forth in Sections 76.7 and 76.1003 of the Commission's 
rules that apply to program access complaints involving satellite-
delivered, cable-affiliated programming. 47 CFR 76.7, 76.1003. Among 
other things, these rules provide for pre-filing notices, discovery, 
remedies, potential defenses, and the required contents of and 
deadlines for filing the complaint, answer, and reply. See id.; see 
generally 1993 Program Access Order, 8 FCC Rcd 3359. We remind 
potential complainants that filing a frivolous program access complaint 
is unlawful and an abuse of process subject to sanctions. See 47 CFR 
76.6(c); see also 47 U.S.C. 548(f)(3); 1993 Program Access Order, 8 FCC 
Rcd at 3426-28; 1998 Biennial Regulatory Review, Report and Order, 1999 
WL 4984 (1999) (adopting 47 CFR 76.6(c)).
2. Additional Burdens in Program Access Complaint Proceedings Alleging 
Unfair Acts Involving Terrestrially Delivered, Cable-Affiliated 
Programming
    92. We are adopting rules to address unfair acts involving 
terrestrially delivered, cable-affiliated programming pursuant to the 
authority Congress provided the Commission in Sections 628(b) and 
628(c)(1) of the Act. Unlike the program access rules for satellite-
delivered programming, which the Commission adopted pursuant to Section 
628(c)(2), Section 628(b) requires that the ``purpose or effect'' of 
the unfair act is ``to hinder significantly or to prevent any 
multichannel video programming distributor from providing satellite 
cable programming or satellite broadcast programming to subscribers or 
consumers.'' 47 U.S.C. 548(b); see 2002 Program Access Order (``Section 
628(b) addresses `unfair or deceptive acts or practices' generally and 
carries with it an added burden `to demonstrate that the purpose or 
effect of the conduct complained of was to `hinder significantly or to 
prevent' an MVPD from providing programming to subscribers or 
customers.' '' (quoting 1993 Program Access Order, 8 FCC Rcd at 3377-
78)). The unfair acts listed in Section 628(c)(2) pertaining to 
satellite-delivered programming are presumed to harm competition, and 
complainants alleging such unfair acts are not required to demonstrate 
harm. See 1993 Program Access Order, 8 FCC Rcd at 3377-78; see also 
Implementation of Sections 12 and 19 of the Cable Television Consumer 
Protection and Competition Act of 1992: Development of Competition and 
Diversity in Video Programming Distribution and Carriage, Memorandum 
Opinion and Order on Reconsideration of the First Report and Order, 10 
FCC Rcd 1902, 1930 (1994).
    93. Accordingly, to run afoul of Section 628(b), an unfair act 
involving terrestrially delivered, cable-affiliated programming (which, 
as defined in this Order, includes an exclusive contract, 
discrimination, or undue or improper influence) must have the purpose 
or effect of hindering significantly or preventing the complainant from 
providing satellite cable programming or satellite broadcast 
programming to subscribers or consumers. The prohibition in Section 
628(b) makes unlawful any unfair or deceptive act or practice that has 
the ``purpose or effect'' of hindering significantly or preventing 
competitors from providing service. 47 U.S.C. 548(b). Under the broad 
language of the statute, a case involving only a prohibited purpose, 
even without a likelihood of material effects, may nonetheless support 
a finding of a violation of Section 628(b). In the antitrust context, 
however, courts have found that a ``desire to crush a competitor, 
standing alone, is insufficient to make out a violation of the 
antitrust laws.'' Ocean State Physicians Health Plan v. Blue Cross & 
Blue Shield, 883 F.2d 1101, 1113 (1st Cir. 1989), cert. denied, 494 
U.S. 1027 (1990); see also Wisconsin Music Network v. Muzak Ltd. 
P'ship, 5 F.3d 218, 222 (7th Cir. 1993) (under rule of reason standard 
in antitrust context, ``the factfinder must determine from all of the 
circumstances of a case whether a practice unreasonably restrains 
competition''); Alliance Shippers v. Southern Pac. Transp. Co., 858 
F.2d 567, 570 (9th Cir. 1988) (essential element in antitrust context 
is injury to competition); United States Football League v. NFL, 842 
F.2d 1335, 1359 (2d Cir. 1988) (``hopes and dreams alone cannot support 
a Section 2 claim of monopolization''). We leave for another day the 
question whether some additional showing analogous to that required 
under the antitrust standard should be required when a complainant 
under Section 628(b) alleges only a prohibited purpose to hinder or 
prevent competition, and not a prohibited effect.
    94. For most terrestrially delivered, cable-affiliated programming, 
the record contains no evidence that unfair acts involving such 
programming generally have the purpose or effect of significantly 
hindering or preventing MVPDs from providing satellite cable 
programming or satellite broadcast programming. Nonetheless, such an 
act may have the purpose or effect set forth in Section 628(b) in a 
particular case, especially given predictions that programming will 
increasingly shift to terrestrial delivery. Accordingly, in a program 
access complaint alleging an unfair act involving terrestrially 
delivered, cable-affiliated programming, the complainant will have the 
burden of proving that the unfair act has the purpose or effect of 
significantly hindering or preventing the MVPD from providing satellite 
cable programming or satellite broadcast programming. This burden under 
Section 628(b) is in addition to any other burdens imposed by the 
Commission's rules on a complainant pursuing a program access complaint 
regarding an exclusive contract, discrimination, or undue or improper 
influence. See 47 CFR 76.1003; see also 1993 Program Access Order, 8 
FCC Rcd at 3390 (discussing complainant's burden in a program access 
complaint alleging an exclusive contract); id. at 3416-17 (discussing 
complainant's burden in a program access complaint alleging 
discrimination); id. at 3425 (discussing complainant's burden in a 
program access complaint alleging undue or improper influence).
    95. We note that to satisfy its burden, a complainant cannot, 
consistent with the statute, simply rely on the fact that some 
impairment to providing service may have occurred because of its lack 
of access to cable-affiliated, terrestrially delivered programming. Cf. 
AT&T Corp. v. Iowa Utilities Bd., 525 U.S. 366, 389 (1999). Rather, the 
statute requires a complainant to show that it was ``hindered 
significantly'' or ``prevented'' from providing service. We will thus 
review individual complaints in light of the higher standard imposed 
under Section 628(b). It is not our intent, moreover, to remove 
incentives for MVPDs to improve their program offerings in order to 
differentiate themselves in the marketplace as long as such efforts do 
not have the purpose or effect of significantly hindering or preventing 
an MVPD from providing satellite cable programming or satellite 
broadcast programming. For example, we believe it highly unlikely that 
an unfair act involving local news and local community or educational 
programming will have the prescribed purpose or effect under Section 
628(b). Unlike RSN programming, local news and local community or 
educational programming is readily replicable by competitive MVPDs. 
Indeed, the record indicates that at least one competitive MVPD, 
Verizon, has created its own local news channels. Moreover, the 
Commission previously found that exclusivity plays an important role in 
the growth and viability of local cable news networks and that 
permitting such

[[Page 9709]]

exclusivity ``should not * * * dissuade new MVPDs from developing their 
own competing regional programming services.'' See New England Cable 
News Channel, Memorandum Opinion and Order, 9 FCC Rcd 3231, 3236 and 
3237 (1994).
    96. We do identify one class of programming that, as shown by both 
Commission precedent and record evidence in this proceeding, is very 
likely to be both non-replicable and highly valued by consumers. In the 
Adelphia Order, the Commission analyzed the impact of the withholding 
of three terrestrially delivered, cable-affiliated RSNs on the market 
shares of DBS operators. In two cases, the Commission found a 
significant impact on predicted market share. See Adelphia Order, 21 
FCC Rcd at 8271 (concluding that Comcast's withholding of the 
terrestrially delivered Comcast SportsNet Philadelphia RSN from DBS 
operators caused the percentage of television households subscribing to 
DBS in Philadelphia to be 40 percent lower than what it otherwise would 
have been; concluding that Cox's withholding of the terrestrially 
delivered Cox-4 RSN from DBS operators in San Diego caused the 
percentage of television households subscribing to DBS in that city to 
be 33 percent lower than what it otherwise would have been); see also 
2007 Program Access Order (addressing comments concerning the Adelphia 
Order study). In the third case, the Commission found no statistically 
significant impact where the RSN showed the games of a relatively new 
team ``that did not yet have a strong enough following to induce large 
numbers of subscribers to switch MVPDs.'' See Adelphia Order, 21 FCC 
Rcd at 8271-72 (concluding that withholding of a terrestrially 
delivered RSN in Charlotte did not show a statistically significant 
effect on predicted market share). Other evidence supports the 
conclusion that RSNs typically offer non-replicable content and are 
considered ``must have'' programming by MVPDs. See 2007 Program Access 
Order; Liberty/DIRECTV Order, 23 FCC Rcd at 3305 and 3306-07; Adelphia 
Order, 21 FCC Rcd at 8258-59; News/Hughes Order, 19 FCC Rcd 473, 535 
(2004). Both the Commission and commenters have noted that RSN 
programming is unique and cannot be duplicated. See Adelphia Order, 21 
FCC Rcd at 8287; News/Hughes Order, 19 FCC Rcd at 535. The Commission 
on two prior occasions has extended the sunset date of the per se ban 
established by Congress on exclusive contracts involving satellite-
delivered, cable-affiliated programming. See generally 2002 Program 
Access Order (extending the exclusive contract prohibition until 
October 5, 2007); 2007 Program Access Order (extending the exclusive 
contract prohibition until October 5, 2012). In the most recent 
decision, the Commission stated that ``the record reflects that 
numerous national programming networks, RSNs, premium programming 
networks, and VOD networks are cable-affiliated programming networks 
that are demanded by MVPD subscribers and for which there are no 
adequate substitutes.'' See 2007 Program Access Order. In that 
decision, the Commission was implementing Section 628(c)(5), which 
requires the Commission to assess the marketplace and extend the per se 
ban if it finds it ``necessary to preserve and protect competition and 
diversity in the distribution of video programming.'' 47 U.S.C. 
548(c)(5). The Commission did not consider the question at issue here: 
Whether there are specific categories of programming that are non-
replicable and sufficiently valuable to consumers such that an unfair 
act involving such programming has the ``purpose or effect of 
significantly hindering or preventing the MVPD from providing satellite 
cable programming or satellite broadcast programming.'' 47 U.S.C. 
548(b).
    97. Although we reject the argument that the empirical evidence 
concerning RSNs is so uniform that it supports a per se rule that an 
unfair act involving a terrestrially delivered, cable-affiliated RSN 
always significantly hinders or prevents the MVPD from providing 
satellite cable programming or satellite broadcast programming, we will 
not require litigants and the Commission staff to undertake repetitive 
examinations of our RSN precedent and the relevant historical evidence. 
Instead, we recognize the weight of the existing precedent and 
categorical evidence concerning RSNs by allowing complainants to invoke 
a rebuttable presumption that an unfair act involving a terrestrially 
delivered, cable-affiliated RSN has the purpose or effect set forth in 
Section 628(b). Cablevision maintains that adopting special rules for 
implementing Section 628(b) in the context of RSNs, based on the 
content of the programming, would violate the First Amendment. Here, 
however, we place no content-related burden on a defendant in a case 
brought under Section 628(b) that involves RSN programming. We only 
recognize the import of existing precedent and record evidence before 
us in this matter.
    98. In a program access complaint alleging an unfair act involving 
a terrestrially delivered, cable-affiliated RSN, the defendant may 
overcome the presumption by establishing that the unfair act does not 
have the purpose or effect of significantly hindering or preventing the 
MVPD from providing satellite cable programming or satellite broadcast 
programming, as required by the language of Section 628(b). Except in 
the situation of a temporary standstill order, a terrestrially 
delivered, cable-affiliated RSN is not required to provide its 
programming to an MVPD under the rules we establish in this Order 
unless and until the Commission (or Bureau on delegated authority) 
concludes that the complainant is entitled to relief that includes 
access to the programming. We reiterate that we are adopting a case-by-
case approach that allows us to consider the facts and circumstances of 
each case. Moreover, as discussed above, while our program access 
procedural rules provide a defendant with 20 days after service to file 
an Answer to a complaint (see 47 CFR 76.1003(e)), we will provide the 
defendant with 45 days from the date of service of the complaint to 
file an Answer in all cases involving terrestrially delivered, cable-
affiliated programming, to ensure that the defendant has adequate time 
to develop a full, case-specific response.
    99. For purposes of the foregoing paragraphs, we define ``RSN'' in 
the same way the Commission has defined that term in previous merger 
proceedings for purposes of adopting program access conditions: ``Any 
non-broadcast video programming service that (1) provides live or same-
day distribution within a limited geographic region of sporting events 
of a sports team that is a member of Major League Baseball, the 
National Basketball Association, the National Football League, the 
National Hockey League, NASCAR, NCAA Division I Football, NCAA Division 
I Basketball, Liga de B[eacute]isbol Profesional de Puerto Rico, 
Baloncesto Superior Nacional de Puerto Rico, Liga Mayor de 
F[uacute]tbol Nacional de Puerto Rico, and the Puerto Rico Islanders of 
the United Soccer League's First Division and (2) in any year, carries 
a minimum of either 100 hours of programming that meets the criteria of 
subheading 1, or 10% of the regular season games of at least one sports 
team that meets the criteria of subheading 1.'' (In the Liberty/DIRECTV 
Order, the Commission expanded the definition of an RSN originally 
adopted in the Adelphia Order to include sports programming likely to 
be valued highly by residents of Puerto Rico. See 23 FCC

[[Page 9710]]

Rcd at 3308-09; see also Adelphia Order, 21 FCC Rcd at 8275.) The 
Commission has recently reaffirmed the appropriateness of the RSN 
definition for purposes of program access merger conditions. See TAC 
Order, 22 FCC Rcd 17938, 17946-47 (2007); Liberty/DIRECTV Order, 23 FCC 
Rcd at 3308-09. (The Commission suspended the program carriage merger 
condition for reasons that are not at issue here. See TAC Order, 22 FCC 
Rcd at 17946-47.) A complainant would have the burden of showing that 
the network at issue satisfies this definition.
    100. One commenter has further urged a per se ban on unfair acts 
and practices involving terrestrially delivered HD ``feeds'' of 
programming. According to Verizon, vertically integrated programmers 
are seeking to compete unfairly by withholding from competitive 
providers the HD version of programming subject to the program access 
rules by transporting the ``HD feed'' terrestrially, thus allowing the 
affiliated cable operator to offer a more robust line-up of HD 
programming. There is substantial evidence regarding consumers' 
preference for HD programming in the context of MVPD services, and the 
record shows that MVPD subscribers do not consider SD programming to be 
an acceptable substitute for HD programming. The SD and HD versions of 
the same network have different technical characteristics and sometimes 
even different content. HD programming has thus become an important 
part of a competitive MVPD offering.
    101. Based on the record evidence described above, in particular 
the fact that SD and HD versions of the same network have different 
technical characteristics and sometimes even different content, we 
conclude that the HD version of a particular programming channel should 
be treated as a distinct service from the SD version of the same 
network. Thus, in considering a complaint regarding an unfair act 
involving terrestrially delivered HD programming, the mere fact that 
the complainant offers the SD version of the same network to 
subscribers will not alone be sufficient to refute a claim under 
Section 628(b); and, in the case of a covered RSN, it will not 
establish that the unfair act lacks the purpose or effect set forth in 
Section 628(b). In that regard, nothing in the statute requires a 
competitive provider to show complete foreclosure from particular 
programming to make a claim under Section 628(b). Rather, the 
competitive provider must show that a covered entity was engaged in an 
unfair act or practice that has the purpose or effect of hindering 
significantly or preventing a competitor from providing service. We 
note that in two pending complaints, the complainant is seeking access 
to the HD feed of a cable-affiliated RSN; at this time, only the 
satellite-delivered SD version of the programming is being made 
available to the competitive provider. See Verizon Telephone Companies 
et al, Program Access Complaint, File No. CSR-8185-P (filed July 7, 
2009); AT&T Services, Inc. et al, Program Access and Section 628(b) 
Complaint, File No. CSR-8196-P (filed Aug. 13, 2009). As explained 
below, to the extent the complainants do not supplement their pleadings 
in the pending adjudicatory matter, their claims fall outside the 
framework established in this rulemaking, and we do not prejudge 
whether the records in those cases are sufficient to state a case under 
Section 628(b) based on the facts alleged.
    102. We will also treat other terrestrially delivered formats of 
programming, such as VOD, 3D, and other new formats, as distinct 
services subject to the rules established in this Order. We do not have 
precedents or record evidence at this point with respect to such new 
formats on which to base a conclusion whether any presumption should 
apply to complaints involving them, thus no presumptions will apply to 
them at this time.
    103. We decline to adopt specific evidentiary requirements with 
respect to proof, in a complaint brought under Section 628(b), that the 
defendant's alleged activities have the purpose or effect of hindering 
significantly or preventing the complainant from providing satellite 
cable programming or satellite broadcast programming. The evidence 
required to satisfy this burden will vary based on the facts and 
circumstances of each case and may depend on, among other things, 
whether the complainant is a new entrant or an established competitor 
and whether the programming the complainant seeks to access is new or 
existing programming. In order to provide some guidance to potential 
litigants, however, we provide the following illustrative examples of 
evidence that they might consider providing. A litigant might rely on 
an appropriately crafted regression analysis that estimates what the 
complainant's market share in the MVPD market would be if it had access 
to the programming and how that compares to its actual market share. 
See, e.g., Adelphia Order, 21 FCC Rcd at 8343-50, Appendix D; 2007 
Program Access Order. A regression analysis might be particularly 
appropriate for an MVPD that is an established competitor operating in 
a large number of geographic areas that seeks access to an established 
programming network. Operation in a large number of geographic areas 
allows for an assessment in the variation in the MVPD's penetration 
levels between areas where programming is withheld and where it is 
available to estimate the effect of withholding. Moreover, a regression 
analysis might be particularly appropriate for an established 
competitor, where it can be assumed that its market penetration may be 
approaching an equilibrium level, rather than a recent entrant, where 
it can be assumed that its market penetration will increase as 
consumers become more familiar with its service. A litigant might also 
rely on statistically reliable survey data indicating the likelihood 
that customers would choose not to subscribe to or switch to an MVPD 
that did not carry the withheld programming.
    104. We recognize that not all potential complainants will have the 
resources to perform a regression analysis or market survey, thus, we 
reiterate that these examples should be considered illustrative only. 
We will assess the reliability of the regression analysis, survey data, 
or other empirical data on a case-by-case basis. In that regard, we 
note that defendants, as well as complainants, are likely to have 
unique access to certain relevant evidence. For instance, although a 
competing MVPD seeking access to a cable-affiliated RSN has unique 
access to information about its own subscribership and the reasons 
consumers give for declining or terminating the MVPD's service, a 
defendant cable operator or cable-affiliated programmer is likely to 
have the best information about the competitive significance of its RSN 
(e.g., value of subscribers and local demand for the RSN). Moreover, 
both complainants and defendants are capable of compiling survey data 
to assess the likelihood that customers would choose not to subscribe 
to or switch to an MVPD that did not carry the withheld programming. 
The discovery process enables parties to obtain additional evidence 
needed to satisfy their burdens. See 47 CFR 76.1003(j).
    105. We note that the language of Section 628(b) requires the 
Commission to address the unfair acts of cable operators, satellite 
cable programming vendors in which a cable operator has an attributable 
interest, and satellite broadcast programming vendors, but not the 
unfair acts of other programmers

[[Page 9711]]

delivering programming only by terrestrial means. See 47 U.S.C. 548(b). 
We conclude that Section 628(b) allows complaints against the entities 
listed in Section 628(b) based on the unfair acts of their affiliated 
programmers delivering programming by terrestrial means, where the 
facts establish that the programmer is wholly owned by, controlled by, 
or under common control with one or more of these entities. (If two or 
more cable operators each have a minority interest in a terrestrial 
programmer but those interests exceed 50 percent in the aggregate, we 
will consider the programmer to be cable-controlled. For example, if 
three cable operators each have a 20 percent ownership interest in a 
terrestrial programmer, we would consider the programmer to be cable-
controlled, despite the fact that no individual cable operator has a 
controlling interest, because the aggregate interests held by the cable 
operators exceed 50 percent.) Under these circumstances, the cable 
operator, satellite cable programming vendor in which a cable operator 
has an attributable interest, or satellite broadcast programming vendor 
can appropriately be held responsible for the discriminatory acts of 
its program supplier affiliate because it controls the supplier and the 
supplier's unfair actions are designed to benefit these entities.
    106. This coverage is necessary to give Section 628(b) practical 
effect. For example, absent a Commission rule to address such 
discrimination, a cable-controlled terrestrial program supplier could 
insist that a competitive MVPD pay an exorbitant rate for carriage that 
far exceeds the rate charged to the incumbent cable system, thereby 
precluding the MVPD from obtaining the programming on reasonable terms 
and achieving the same result as an exclusive contract. We believe that 
we have authority under Section 628(b) to prevent this and similar 
situations in which a terrestrial programmer that is wholly owned by, 
controlled by, or under common control with an entity covered by 
Section 628(b) acts presumptively to further the interests of such an 
entity. Accordingly, in program access complaints alleging that a 
cable-affiliated programmer that provides only terrestrially delivered 
programming has discriminated against an MVPD, the complainant will 
have the additional burden of proof that the programmer that is alleged 
to have engaged in discrimination is wholly owned by, controlled by, or 
under common control with the defendant cable operator or cable 
operators, satellite cable programming vendor or vendors in which a 
cable operator has an attributable interest, or satellite broadcast 
programming vendor or vendors.
    107. If it appears that a regulated entity has been organized in a 
manner to shield its terrestrial programming activities from the reach 
of Section 628(b) and the Commission's regulations, we may look beyond 
the corporate structural formalities to ensure that the goals of the 
statute and rules are not frustrated. Moreover, in cases where one or 
more of the entities listed in Section 628(b) does not have de jure 
control of a terrestrial programmer, we do not foreclose complaints 
alleging that one or more of the entities listed in Section 628(b) has 
nonetheless influenced the programmer to engage in discrimination. We 
will assess such claims of alleged influence on a case-by-case basis. 
In addition, as noted above, there may be acts or practices other than 
those specified in this Order that are ``unfair methods of competition 
or unfair acts or practices'' under Section 628(b). For example, 
nothing in this Order forecloses a complaint alleging that the 
execution or enforcement of a discriminatory contract by one of the 
entities listed in Section 628(b) violates this section.
3. Exclusive Contracts
    108. The rules we adopt here pursuant to Section 628(b) to address 
exclusive contracts between cable operators and cable-affiliated 
programmers that provide terrestrially delivered programming differ 
from the rules applicable to satellite-delivered, cable-affiliated 
programming pursuant to Section 628(c)(2)(C)-(D). The program access 
rules applicable to cable-affiliated programmers that provide 
satellite-delivered programming generally prohibit exclusive contracts 
with a cable operator subject to certain exceptions. Because we are 
adopting rules for terrestrially delivered, cable-affiliated 
programming pursuant to the authority provided in Sections 628(b) and 
628(c)(1), we do not apply here the statutory scheme set forth in 
Section 628(c)(2)(C)-(D) for satellite-delivered, cable-affiliated 
programming. Our approach to exclusive contracts for terrestrially 
delivered, cable-affiliated programming will differ from the exclusive 
contract prohibition applicable to satellite-delivered, cable-
affiliated programming in the following ways.
    109. First, the Commission's program access rules applicable to 
satellite-delivered, cable-affiliated programming generally prohibit 
exclusive contracts unless the cable operator or cable-affiliated 
programmer demonstrates that an exclusive contract serves the public 
interest based on the factors set forth in Section 76.1002(c)(4). 47 
CFR 76.1002(c)(4); see 2002 Program Access Order. The rules we adopt in 
this Order, however, assign the burden of proof to the complainant to 
demonstrate (sometimes with the benefit of a presumption) that the 
exclusive contract has the purpose or effect set forth in Section 
628(b).
    110. Second, while the Commission's rules applicable to satellite-
delivered, cable-affiliated programming draw distinctions between 
exclusive contracts in served areas and unserved areas (see 47 CFR 
76.1002(c)(1)-(2); see also 47 U.S.C. 548(c)(2)(C)-(D)), the rules we 
adopt in this Order for terrestrially delivered, cable-affiliated 
programming do not. Section 628(b) does not draw such a distinction, 
and our case-by-case approach will enable us to take into account 
relevant factual circumstances of a particular case.
    111. Third, while the exclusive contract prohibition generally 
applicable to satellite-delivered, cable-affiliated programming will 
sunset on a Commission determination that the categorical prohibition 
is no longer necessary to preserve and protect competition (see 47 CFR 
76.1002(c)(6); see also 47 U.S.C. 548(c)(5)), the rules we adopt in 
this Order for terrestrially delivered, cable-affiliated programming do 
not contain a sunset provision because Section 628(b) does not contain 
such a provision. If the exclusive contract prohibition applicable to 
satellite-delivered, cable-affiliated programming sunsets, we will 
still consider complaints alleging unfair acts involving terrestrially 
delivered, cable-affiliated programming on a case-by-case basis unless 
and until we repeal the rule with respect to terrestrially delivered 
programming. Of course, the facts supporting a sunset of the exclusive 
contract prohibition under Section 628(c)(2) may bear on a particular 
complaint brought under Section 628(b).
    112. By contrast, with the exception of the additional burdens and 
the additional response time for defendants to file an Answer described 
above, we will apply the same rules, policies, and procedures to 
address claims of discrimination and undue or improper influence 
involving terrestrially delivered, cable-affiliated programming that 
currently apply to such claims involving satellite-delivered, cable-
affiliated programming. See 47 CFR 76.1002(b)(1)-(3) (listing actions 
that a cable-affiliated programmer is not

[[Page 9712]]

precluded from taking under the discrimination provision of the program 
access rules); id. Sec.  76.1003(c)(4)-(5) (listing specific 
requirements for a program access complaint alleging discrimination); 
id. Sec.  76.1003(e)(3)-(4) (listing specific requirements for an 
answer to a program access complaint alleging discrimination); see also 
1993 Program Access Order, 8 FCC Rcd at 3400-23 (adopting rules, 
policies, and procedures for complaints alleging program access 
discrimination); see id. at 3423-26 (adopting rules, policies, and 
procedures for complaints alleging undue or improper influence).

E. Application of the Rules

    113. In this Section, we discuss how the rules adopted here apply 
to common carriers, existing contracts, and terrestrially delivered 
programming that is subject to the program access rules applicable to 
satellite-delivered programming as a result of merger conditions.
1. Common Carriers
    114. The rules we adopt in this Order will apply to common carriers 
and open video systems as well as cable operators because the Act so 
requires. Although Section 628(b) requires the Commission to address 
the unfair acts of cable operators, satellite cable programming vendors 
in which a cable operator has an attributable interest, and satellite 
broadcast programming vendors, Section 628(j) states that ``[a]ny 
provision that applies to a cable operator under this section shall 
apply to a common carrier or its affiliate that provides video 
programming by any means directly to subscribers.'' 47 U.S.C. 548(j). 
Similarly, Section 653(c)(1)(A) provides that ``[a]ny provision that 
applies to a cable operator under [Section 628] of this title shall 
apply * * * to any operator of an open video system [OVS].'' 47 U.S.C. 
573(c)(1)(A). Thus, pursuant to Sections 628(j) and 653(c)(1)(A), the 
rules we adopt to address unfair acts involving terrestrially 
delivered, cable-affiliated programming must also apply to common 
carriers and OVS operators, and their affiliated programmers, to the 
extent that these entities provide video programming to subscribers or 
consumers. Accordingly, we are amending Section 76.1004(a) of our 
rules, which contains a limitation on what constitutes an attributable 
interest held by a common carrier in a satellite cable programming 
vendor, to also apply to an attributable interest held by a common 
carrier in a terrestrial cable programming vendor. See 47 CFR 
76.1004(a); see also 47 U.S.C. 628(j); Implementation of Cable Act 
Reform Provisions of the Telecommunications Act of 1996, Order and 
Notice of Proposed Rulemaking, 11 FCC Rcd 5937, 5956-57 (1996).
2. Existing Contracts
    115. Given the potential harms to video competition and broadband 
deployment that arise from unfair acts involving terrestrially 
delivered, cable-affiliated programming, we conclude that the public 
interest requires us to apply the rules adopted in this Order to 
existing contracts or other arrangements for terrestrially delivered, 
cable-affiliated programming, to the extent a cable operator's reliance 
on or enforcement of those contracts or arrangements following the 
effective date of the rules is found to violate Section 628(b). 
Accordingly, although a cable operator may have entered into an 
exclusive contract prior to the effective date of the rules adopted in 
this Order, an MVPD may file a program access complaint after the 
effective date of the rules alleging that the cable operator's 
continued reliance on or enforcement of this contract violates these 
rules. We decline, however, to apply the rules adopted in this Order to 
the unfair acts of cable operators involving terrestrially delivered, 
cable-affiliated programming that preceded the effective date of these 
rules. Thus, to the extent a terrestrially delivered, cable-affiliated 
programmer refused to deal with an MVPD prior to (and not after) the 
effective date of these rules, we would not entertain a program access 
complaint alleging that such conduct is unlawful under the rules 
adopted in this Order. Rather, an MVPD filing a program access 
complaint pursuant to the rules adopted in this Order regarding the 
allegedly unlawful conduct would need to demonstrate that the unfair 
act occurred after the effective date of the rules.
    116. Applying the rules to existing contracts in this manner is not 
impermissibly retroactive. See, e.g., Celtronix Telemetry, Inc. v. FCC, 
272 F.3d 585, 588 (D.C. Cir. 2001) (changing the grace period on 
auction debt was not impermissibly retroactive where new rule applied 
to payment delays occurring after the rule's adoption; although it 
altered the future effect of the initial license issuance, it did not 
alter past legal consequences); Bell Atl. Tel. Cos. v. FCC, 79 F.3d 
1195, 1207 (D.C. Cir. 1996) (a regulation that governs future rates 
``is not made retroactive merely because it draws upon antecedent facts 
for its operation'') (quotations and citations omitted); see also 
Landgraf v. USI Film Prods., 511 U.S. 244, 269-70 and n. 24 (1994) (a 
law does not act retrospectively merely because it is applied in a case 
arising from conduct antedating its enactment or upsets expectations 
based in prior law; rather, the issue is whether the new provision 
attaches new legal consequences to events completed before its 
enactment); Chemical Waste Mgmt., Inc. v. EPA, 869 F.2d 1526, 1536 
(D.C. Cir. 1989) (``[i]t is often the case that a business will 
undertake a certain course of conduct based on the current law, and 
will then find its expectations frustrated when the law changes. This 
has never been thought to constitute retroactive lawmaking'').
    117. As discussed above, program access complaints filed pursuant 
to Section 628(d) are pending before the Commission that allege unfair 
acts involving terrestrially delivered, cable-affiliated programming 
that have the purpose or effect set forth in Section 628(b). See 
Verizon Telephone Companies et al, Program Access Complaint, File No. 
CSR-8185-P (filed July 7, 2009); AT&T Services, Inc. et al., Program 
Access and Section 628(b) Complaint, File No. CSR-8196-P (filed Aug. 
13, 2009). Complainants may continue to prosecute these complaints 
pursuant to Section 628(d). Because these complaints allege unfair acts 
that occurred before the effective date of the rules adopted in this 
Order, they will not be considered pursuant to these rules, unless 
supplemented as described below. A complainant that wants a currently 
pending complaint considered under these rules must submit a 
supplemental filing alleging that the defendant has engaged in an 
unfair act (such as a further refusal to provide programming) after the 
effective date of the rules. In such case, the complaint and supplement 
will be considered pursuant to the rules adopted in this Order, 
including the rebuttable presumption for RSNs. The defendant will have 
an opportunity to answer the supplemental filing within 45 days of 
service, and the complainant will have an opportunity to reply, as set 
forth in the rules. See 47 CFR 76.1003(f).
    118. Additionally, application of the rules to existing contracts 
will not pose economic hardship on cable operators or their affiliated 
programmers or constitute a ``regulatory taking'' under the Fifth 
Amendment. The Supreme Court has outlined the following framework to 
evaluate regulatory takings claims: ```In all of these cases, we have 
eschewed the development of any set formula for identifying a `taking' 
forbidden by the Fifth Amendment, and have relied instead on ad hoc, 
factual inquiries into the circumstances of each particular case. To 
aid in this

[[Page 9713]]

determination, however, we have identified three factors which have 
particular significance: (1) The economic impact of the regulation on 
the claimant; (2) the extent to which the regulation has interfered 
with distinct investment-backed expectations; and (3) the character of 
the governmental action.''' MDU Order (quoting Connolly v. Pension Ben. 
Guaranty Corp., 475 U.S. 211, 224-25 (1986) (citations and internal 
quotation marks omitted)). None of these factors counsels in favor of 
finding a regulatory taking here. Moreover, because our decision does 
not involve the permanent condemnation of physical property, it does 
not constitute a per se taking. Cf. Loretto v. Teleprompter Manhattan 
City Corp., 458 U.S. 419, 427 (1982) (``when faced with a 
constitutional challenge to a permanent physical occupation of real 
property, this court has invariably found a taking''); Tahoe-Sierra 
Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S. 
302, 322 (2002) (``When the government physically takes possession of 
an interest in property for some public purpose, it has a categorical 
duty to compensate the former owner.'').
    119. Under the first prong of the regulatory takings test, applying 
these rules to existing contracts for terrestrially delivered, cable-
affiliated programming to the extent described above would not have a 
material adverse economic impact on cable operators or their affiliated 
programmers. Specifically, these rules would not interfere with the 
ability of cable operators to provide this programming to their 
subscribers or potential subscribers or the ability of cable-affiliated 
programmers to sell programming to MVPDs. Our decision may in fact 
expand the number of customers (i.e., MVPDs) to whom terrestrially 
delivered, cable-affiliated programmers sell their programming. This 
will result in increased revenues for the cable-affiliated programmer, 
which can be used to partially offset the decreased revenues its 
affiliated cable operator will experience as some subscribers switch to 
competitive MVPDs that now have access to the formerly withheld 
programming. Moreover, as the record demonstrates, unfair acts 
involving terrestrially delivered, cable-affiliated programming have in 
some cases enabled cable firms to significantly hinder competition in 
the video distribution market. Thus, under the first prong of the 
takings analysis, any economic impact on cable operators and 
terrestrially delivered, cable-affiliated programmers arising from 
compliance with these rules stems from correcting current market 
failures, and is outweighed by our public interest objective of 
promoting competition in the video distribution market.
    120. Under the second prong of the Supreme Court's test, applying 
these rules to existing contracts for terrestrially delivered, cable-
affiliated programming to the extent described above would not 
interfere with distinct investment-backed expectations. Several of the 
Commission's prior decisions have reflected a concern about unfair acts 
involving terrestrially delivered, cable-affiliated programming, and 
our desire to craft appropriate remedies. The Commission has stated in 
previous program access complaint proceedings that vertically 
integrated cable operators that migrate their programming to 
terrestrial delivery could violate Section 628(b) in some instances. 
See RCN, 16 FCC Rcd at 12053; DIRECTV, 15 FCC Rcd at 22807; EchoStar, 
14 FCC Rcd at 2102-03; RCN, 14 FCC Rcd at 17104-06; DIRECTV, 13 FCC Rcd 
at 21837; see also 1996 OVS Order, 11 FCC Rcd at 18325.
    121. Moreover, past Commission Orders in program access rulemaking 
proceedings have demonstrated continued concern with the harms 
associated with the terrestrial loophole. See 2002 Program Access Order 
(noting that withholding of terrestrially delivered, cable-affiliated 
programming ``could have a substantial impact on the ability of 
competitive MVPDs to compete in the MVPD market'' but finding that the 
specific language of Section 628(c) applies only to satellite-delivered 
programming); 1998 Program Access Order (concluding that the record 
developed in this proceeding did not demonstrate that unfair acts 
involving terrestrially delivered, cable-affiliated programming were 
having a significant anticompetitive effect, but stating that ``we 
believe that the issue of terrestrial distribution of programming could 
eventually have substantial impact on the ability of alternative MVPDs 
to compete in the video marketplace'' and that ``the Commission will 
continue to monitor this issue and its impact on competition in the 
video marketplace''); see also 2007 Program Access Order. Moreover, the 
Commission noted in the 1993 Program Access Order that the objectives 
of Section 628(b) were to proscribe conduct ``beyond those more 
specifically referenced in 628(c). The objectives of the provision, 
however, are clearly to provide a mechanism for addressing those types 
of conduct, primarily associated with horizontal and vertical 
concentration within the cable and satellite cable programming field, 
that inhibit the development of multichannel video distribution 
competition * * *. Section 628(b) is a clear repository of Commission 
jurisdiction to adopt additional rules or to take additional actions to 
accomplish the statutory objectives should additional types of conduct 
emerge as barriers to competition and obstacles to the broader 
distribution of satellite cable and broadcast programming.'' 8 FCC Rcd 
at 3373-73.
    122. The Commission has also stated in Annual Reports to Congress 
on the status of competition in the video distribution market that 
unfair acts involving terrestrially delivered, cable-affiliated 
programming could have a substantial impact on the ability of 
competitive MVPDs to compete and that the Commission will ``continue to 
monitor this issue and its impact on the competitive marketplace.'' 6th 
Annual Report, 15 FCC Rcd 978 (2000); see 3rd Annual Report, 12 FCC Rcd 
4358 (1997); see also 7th Annual Report, 16 FCC Rcd 6005 (2001); 8th 
Annual Report, 17 FCC Rcd 1244 (2002); 9th Annual Report, 17 FCC Rcd 
26901 (2002); 10th Annual Report, 19 FCC Rcd 1606 (2004); 11th Annual 
Report, 20 FCC Rcd 2755 (2005); 12th Annual Report, 21 FCC Rcd 2503 
(2006).
    123. In the Adelphia Order, the Commission demonstrated that it 
would act to mitigate the harm to competition resulting from 
withholding of terrestrially delivered, cable-affiliated programming. 
In the Adelphia Order, the Commission applied the program access rules, 
as well as arbitration conditions, to terrestrially delivered RSNs 
affiliated with the merger applicants based on record evidence 
demonstrating that withholding of terrestrially delivered, cable-
affiliated programming had an adverse impact on competition in the 
video distribution market. See 21 FCC Rcd at 8275. Moreover, in the 
News/Hughes Order, the Commission noted that it has ``long recognized 
that the terrestrial distribution of programming--particularly RSN 
programming--by vertically integrated cable operators could 
competitively disadvantage competing MVPDs if they were denied access 
to the terrestrially delivered programming.'' 19 FCC Rcd at 535 
(citations omitted). In addition, in September 2007, the Commission 
adopted the NPRM in this proceeding, seeking comment on, among other 
things, whether to extend the program access rules to terrestrially 
delivered, cable-affiliated programming. Thus, for many years now, 
cable operators and their affiliated programmers have been on notice 
that withholding of

[[Page 9714]]

terrestrially delivered, cable-affiliated programming is a source of 
concern for the Commission, and that any programming investments had 
the potential to be impacted by the rules we adopt in this Order. 
Moreover, as the Commission explained in the MDU Order, a cable 
operator does not have a legitimate investment-backed expectation in 
profits obtained through anticompetitive behavior. See MDU Order 
(citing Otter Tail Power Co. v. United States, 410 U.S. 366, 380 (1973) 
(antitrust law proscribing monopolies ``assumes that an enterprise will 
protect itself against loss by operating with superior service, lower 
costs, and improved efficiency,'' and a monopolist may not ``substitute 
for competition anticompetitive uses of its dominant power''); Delaware 
& Hudson Ry. Co. v. Consolidated Rail Corp., 902 F.2d 174, 178 (2d Cir. 
1990) (``A monopolist cannot escape liability for conduct that is 
otherwise actionable simply because that conduct also provides short-
term profits.'')).
    124. Under the third prong of the regulatory takings test, we find 
that applying these rules to existing contracts for terrestrially 
delivered, cable-affiliated programming to the extent described above 
substantially advances the legitimate governmental interest in 
protecting consumers from `` `unfair methods of competition or unfair 
acts or practices'--an interest Congress has explicitly recognized and 
protected by statute * * * and commanded the Commission to vindicate by 
adopting appropriate regulations.'' See MDU Order (quoting 47 U.S.C. 
548(b)). It also comports with Congress' directive to spur the 
development of communications technologies and to encourage the 
deployment of advanced telecommunications capabilities. See 47 U.S.C. 
157 nt. (2008); 47 U.S.C. 548(a). The rules we adopt here will further 
these governmental interests by promoting competition in the video 
distribution market and facilitating efforts to deploy broadband.
3. Adelphia Order Merger Conditions
    125. Pursuant to merger conditions adopted in the Adelphia Order, 
certain terrestrially delivered RSNs (``Covered RSNs'') affiliated with 
Comcast or Time Warner Cable are currently required to comply with the 
program access rules applicable to satellite-delivered, cable-
affiliated programming. See Adelphia Order, 21 FCC Rcd at 8274 
(requiring terrestrially delivered RSNs in which Comcast or Time Warner 
has or acquires an attributable interest to comply with the program 
access rules applicable to satellite-delivered cable-affiliated 
programming, citing 47 CFR 76.1002), 8276 and 8336, Appendix B, Sec.  
B(1) (citing 47 CFR 76.1002); see also Applications for Consent to the 
Assignment and/or Transfer Control, Time Warner Inc., Assignor/
Transferor, and Time Warner Cable Inc., Assignee/Transferee, Memorandum 
Opinion and Order, 24 FCC Rcd 879, 893 (MB, WCB, WTB, IB, 2009) 
(approving transaction separating Time Warner from Time Warner Cable 
and explaining that the Adelphia Order program access conditions will 
continue to apply to Time Warner Cable post-restructuring but will no 
longer apply to Time Warner). A Covered RSN as defined in the Adelphia 
Order is ``any non-broadcast video programming service that (1) 
provides live or same-day distribution within a limited geographic 
region of sporting events of a sports team that is a member of Major 
League Baseball, the National Basketball Association, the National 
Football League, the National Hockey League, NASCAR, NCAA Division I 
Football, NCAA Division I Basketball and (2) in any year, carries a 
minimum of either 100 hours of programming that meets the criteria of 
subheading 1, or 10% of the regular season games of at least one sports 
team that meets the criteria of subheading 1.'' See Adelphia Order, 21 
FCC Rcd at 8336, Appendix B, section A.
    126. These Covered RSNs continue to be subject to these conditions 
until they expire or the program access rules applicable to satellite-
delivered, cable-affiliated programming are modified. See Adelphia 
Order, 21 FCC Rcd at 8336, Appendix B, section B(1)(d) (``These 
exclusive contracts and practices, non-discrimination, and undue or 
improper influence requirements of the program access rules will apply 
to Comcast, Time Warner, and their Covered RSNs for six years, provided 
that if the program access rules are modified this condition shall be 
modified to conform to any revised rules adopted by the Commission.''); 
see also id. at 8274 (noting that the merger conditions could be 
modified if the exclusive contract prohibition applicable to satellite-
delivered, cable-affiliated programming sunsets). The rules we adopt in 
this Order do not trigger modification of these conditions. The Covered 
RSNs subject to the Adelphia Order merger conditions are required to 
comply with the program access rules applicable to satellite-delivered, 
cable-affiliated programming. With the exception of the procedure for 
requesting a standstill discussed below, this Order does not modify the 
program access rules applicable to satellite-delivered, cable-
affiliated programming; rather, we adopt new rules that address unfair 
acts of cable operators involving a class of programmers that are not 
currently subject to the rules: Cable-affiliated programmers that 
provide terrestrially delivered programming. Accordingly, the rules 
adopted in this Order do not trigger modification of the merger 
conditions adopted in the Adelphia Order. The program access conditions 
adopted in the Liberty/DIRECTV Order contain a similar modification 
clause. See Liberty/DIRECTV Order, 23 FCC Rcd at 3341, Appendix B, 
section III(6) (``if the program access rules are modified these 
commitments shall be modified, as the Commission deems appropriate, to 
conform to any revised rules adopted by the Commission''). For the 
reasons stated above, because the program access rules are not modified 
by this Order, this modification clause is not triggered.
    127. Accordingly, exclusive contracts, discrimination, and undue 
influence involving these Covered RSNs continue to be prohibited 
without the need for any showing as to whether the purpose or effect of 
the unfair act is to significantly hinder or prevent the complainant 
from providing satellite cable programming or satellite broadcast 
programming. If the conditions expire or the exclusive contract 
prohibition applicable to satellite-delivered, cable-affiliated 
programming sunsets, then exclusive contracts for these Covered RSNs 
will not be precluded. Rather, in accordance with the rules we adopt in 
this Order, we will consider exclusive contracts for these RSNs on a 
case-by-case basis in response to a program access complaint, where we 
will assess whether the defendant has rebutted the presumption that an 
exclusive contract for the RSN has the purpose or effect of 
significantly hindering an MVPD from providing satellite cable 
programming or satellite broadcast programming.
    128. Moreover, any terrestrially delivered network affiliated with 
Comcast or Time Warner Cable that is not a Covered RSN may be the 
subject of a complaint pursuant to the rules we adopt in this Order 
upon the effectiveness of these rules.
    129. We also note that the Commission in the Adelphia Order 
exempted Comcast SportsNet Philadelphia from these conditions to the 
extent that it was not available to an MVPD at the time of the Adelphia 
Order. See 21 FCC Rcd at 8276 (``we do not require that Comcast 
SportsNet Philadelphia be subject to those

[[Page 9715]]

conditions to the extent it is not currently available to MVPDs''). 
With regard to MVPDs that had contracts for Comcast SportsNet 
Philadelphia at the time of the Adelphia Order, the program access 
conditions adopted in the Adelphia Order apply. See id. Because Comcast 
SportsNet Philadelphia was delivered terrestrially before it was 
acquired by Comcast, the Commission found no anticompetitive 
``purpose'' in Comcast's decision to deliver this network 
terrestrially. See id. Section 628(b), however, requires the Commission 
to prohibit unfair acts of cable operators that have the ``purpose or 
effect'' of significantly hindering an MVPD from providing satellite 
cable programming or satellite broadcast programming. 47 U.S.C. 548(b). 
Accordingly, although Comcast SportsNet Philadelphia was not available 
to certain MVPDs at the time of the Adelphia Order and the program 
access conditions adopted in the Adelphia Order accordingly do not 
apply to its dealings with those MVPDs, it may be the subject of a 
complaint pursuant to the rules we adopt in this Order upon the 
effectiveness of these rules. Thus, an MVPD that did not have access to 
Comcast SportsNet Philadelphia at time of the Adelphia Order may file a 
program access complaint alleging an unfair act in accordance with the 
rules adopted in this Order. As discussed above, the complainant would 
need to demonstrate that the defendant engaged in an unfair act after 
the effective date of the rules. Comcast argues that the doctrine of 
res judicata precludes DIRECTV and DISH Network from bringing program 
access complaints alleging an unfair act involving Comcast SportsNet 
Philadelphia under Section 628(b) because they have previously brought 
such claims and were denied. Comcast would have an opportunity to 
present such claim-specific arguments in the context of a specific 
complaint proceeding involving Comcast SportsNet Philadelphia, should 
such a complaint be filed.

F. Temporary Standstill of Existing Contract Pending Resolution of a 
Program Access Complaint

    130. We establish specific procedures for the Commission's 
consideration of requests for a temporary standstill of the price, 
terms, and other conditions of an existing programming contract by a 
program access complainant seeking renewal of such a contract. See 
NPRM. The specific procedures adopted herein only apply to requests for 
a standstill involving program access complaints filed pursuant to 
Sections 76.1001 or 76.1003 of the Commission's rules. Thus, a 
complainant may use these procedures to seek a temporary standstill in 
program access complaint proceedings involving terrestrially, cable-
affiliated delivered programming as well as satellite-delivered, cable-
affiliated programming. We note that of particular concern would be a 
situation where a cable-affiliated network that is satellite-delivered, 
and therefore subject to the per se prohibitions in Section 76.1002, 
moves to terrestrial delivery and threatens to withhold the programming 
from an MVPD that formerly had access to the network. In such a case, 
absent a standstill, the MVPD's subscribers would be deprived of the 
programming unless and until the Commission resolves a program access 
complaint in favor of the MVPD and grants relief to the MVPD, including 
carriage of the network.
    131. As competitive MVPDs note, such a process will have several 
benefits, such as minimizing the impact on subscribers who may 
otherwise lose valued programming pending resolution of a complaint; 
limiting the ability of vertically integrated programmers to use 
temporary foreclosure strategies (i.e., withholding programming to 
extract concessions from an MVPD during renewal negotiations); 
encouraging settlement; and increasing the usefulness of the program 
access complaint process. Regarding temporary foreclosure strategies, 
the Commission explained in the Adelphia Order that ``by temporarily 
foreclosing supply of the programming to an MVPD competitor or by 
threatening to engage in temporary foreclosure, the integrated firm may 
improve its bargaining position so as to be able to extract a higher 
price from the MVPD competitor than it could have negotiated if it were 
a non-integrated programming supplier. In order for a vertically 
integrated firm successfully to employ temporary foreclosure or the 
threat of temporary foreclosure as a strategy to increase its 
bargaining position, there must be a credible risk that subscribers 
would switch MVPDs to obtain the programming for a long enough period 
to make the strategy profitable.'' See 21 FCC Rcd at 8262.
    132. The Commission has statutory authority to impose a temporary 
standstill of an existing contract in appropriate cases pending 
resolution of a program access complaint. The Commission is authorized 
to ``make such rules and regulations * * * as may be necessary in the 
execution of its functions,'' and to ``[m]ake such rules and 
regulations * * * not inconsistent with law, as may be necessary to 
carry out the provisions of this Act.'' 47 U.S.C. 154(i), 303(r). The 
Supreme Court has affirmed the Commission's authority to impose interim 
injunctive relief, in the form of a standstill order, pursuant to 
Section 4(i). United States v. Southwestern Cable Co., 392 U.S. 157, 
181 (1968); see also AT&T Corp. v. Ameritech Corp., Memorandum Opinion 
and Order, 13 FCC Rcd 14508 (1998) (standstill order issued pursuant to 
47 U.S.C. 154(i) temporarily preventing Ameritech from enrolling 
additional customers in, and marketing and promoting, a ``teaming'' 
arrangement with Qwest Corporation pending a decision concerning the 
lawfulness of the program); Amendment of Rules Governing Procedures to 
be Followed When Formal Complaints Are Filed Against Common Carriers, 
Report and Order, 12 FCC Rcd 22497, 22566 (1997) (stating that the 
Commission has authority under section 4(i) of the Act to award 
injunctive relief); Time Warner Cable, Order on Reconsideration, 21 FCC 
Rcd 9016 (MB, 2006) (standstill order issued pursuant to section 4(i) 
denying a stay and reconsideration of the Media Bureau's order 
requiring Time Warner temporarily to reinstate carriage of the NFL 
Network on systems that it recently acquired from Adelphia 
Communications and Comcast Corporation until the Commission could 
resolve on the merits the Emergency Petition for Declaratory Ruling 
filed by the NFL).
    133. Pursuant to the rules we adopt herein, a complainant may 
submit along with its program access complaint a petition for a 
temporary standstill of its existing programming contract pending 
resolution of the complaint. We encourage complainants to file the 
petition and complaint sufficiently in advance of the expiration of the 
existing contract to provide the Commission with sufficient time to act 
prior to expiration. In its petition, the complainant must demonstrate 
how grant of the standstill will meet the following four criteria: (i) 
The complainant is likely to prevail on the merits of its complaint; 
(ii) the complainant will suffer irreparable harm absent a stay; (iii) 
grant of a stay will not substantially harm other interested parties; 
and (iv) the public interest favors grant of a stay. See, e.g., 
Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921, 925 (D.C. Cir. 
1958); see also Washington Metropolitan Area Transit Comm'n v. Holiday 
Tours, 559 F.2d 841 (D.C. Cir. 1977) (clarifying the standard set forth 
in Virginia Petroleum Jobbers Ass'n v. FPC); Hispanic Information and 
Telecomm. Network,

[[Page 9716]]

Inc., 20 FCC Rcd 5471, 5480 (2005) (affirming Bureau's denial of 
request for stay on grounds applicant failed to establish four criteria 
demonstrating stay is warranted). As part of a showing of irreparable 
harm, a complainant may discuss, among other things, the impact on 
subscribers and the likelihood that subscribers will switch MVPDs to 
obtain the programming in dispute. In order to ensure an expedited 
decision, the defendant will have ten days after service to file an 
answer to the petition for a standstill order. In acting on the 
petition, the Commission may limit the length of the standstill to a 
defined period or may specify that the standstill will continue until 
the Commission resolves the program access complaint. In any event, the 
Commission may lift the temporary standstill to the extent that it 
finds that the stay is having a negative effect on settlement 
negotiations or is otherwise no longer in the public interest.
    134. If the Commission grants the temporary standstill, its 
decision acting on the complaint will make the terms of the new 
agreement between the parties, if any, retroactive to the expiration 
date of the previous agreement. See Liberty/DIRECTV Order, 23 FCC Rcd 
at 3347-48, Appendix B, section IV(B)(8); Adelphia Order, 21 FCC Rcd at 
8338, Appendix B, section 3(h); News/Hughes Order, 19 FCC Rcd at 554. 
For example, if carriage of the programming has continued uninterrupted 
during resolution of the complaint, and if the Commission's decision 
requires a higher amount to be paid than was required under the terms 
of the expired contract, the MVPD will make an additional payment to 
the programmer in an amount representing the difference between the 
amount that is required to be paid pursuant to the decision and the 
amount actually paid under the terms of the expired contract during 
resolution of the complaint. See Liberty/DIRECTV Order, 23 FCC Rcd at 
3347-48, Appendix B, Sec.  IV(B)(8); Adelphia Order, 21 FCC Rcd at 
8338, Appendix B, section 3(h); News/Hughes Order, 19 FCC Rcd at 554. 
Conversely, if carriage of the programming has continued uninterrupted 
during resolution of the complaint, and if the Commission's decision 
requires a lesser amount to be paid than was required under the terms 
of the expired contract, the programmer will credit the MVPD with an 
amount representing the difference between the amount actually paid 
under the terms of the expired contract during resolution of the 
complaint and the amount that is required to be paid pursuant to the 
Commission's decision. See Liberty/DIRECTV Order, 23 FCC Rcd at 3347-
48, Appendix B, section IV(B)(8); Adelphia Order, 21 FCC Rcd at 8338, 
Appendix B, section 3(h).
    135. Vertically integrated cable operators contend that the 
Commission should not adopt a temporary standstill process, claiming 
that such an option will tilt the balance of negotiating leverage in 
favor of MVPDs; encourage MVPDs to file program access complaints to 
guarantee continued access to programming; and impede parties from 
settling disputes by removing any incentive for the MVPD to negotiate. 
On balance, we conclude that the benefits of establishing a temporary 
stay process outweigh these purported harms. We expect parties to deal 
and negotiate with one another in good faith to come to settlement 
while the program access complaint is pending at the Commission. 
Moreover, there is no reason to assume that carriage negotiations and 
attempts at a settlement during a temporary stay will necessarily be 
protracted. In this regard, we note that in three previous merger 
orders, the Commission adopted a standstill requirement in connection 
with arbitration of program access disputes. See Liberty/DIRECTV Order, 
23 FCC Rcd at 3346, Appendix B, Sec.  IV(A)(3); Adelphia Order, 21 FCC 
Rcd at 8337, Appendix B, Sec.  2(c); News/Hughes Order, 19 FCC Rcd at 
554. Commenters, however, provide no evidence that any of the purported 
harms actually resulted from the standstill in those cases. Moreover, 
the standstill requirement imposed in connection with those merger 
conditions is automatic upon notice of the MVPD's intent to arbitrate 
(see Liberty/DIRECTV Order, 23 FCC Rcd at 3346, Appendix B, Sec.  
IV(A)(3); Adelphia Order, 21 FCC Rcd at 8337, Appendix B, Sec.  2(c); 
News/Hughes Order, 19 FCC Rcd at 554, whereas the process we adopt here 
requires a complainant to seek Commission approval based on the four-
criteria test described above. Thus, the Commission will be able to 
take into account all relevant facts in each case. Moreover, because 
the new carriage terms will be applied retroactively to the expiration 
of the previous contract, we believe that complainants will not have an 
incentive to seek a temporary standstill solely to continue the status 
quo or to gain leverage.
    136. Time Warner claims that, depending on the terms of the 
contract, it may be impractical to apply those terms beyond the 
expiration date of the contract. In addition, Time Warner notes unique 
concerns regarding a standstill imposed on a contract for a premium 
network. DISH Network states that Time Warner has overstated the 
complexity of a standstill, because the existing contract terms--
including rate, carriage terms, as well as marketing and promotion 
provisions--would apply during the pendency of the complaint 
proceeding. To the extent difficulties arise, we believe we will be 
able to resolve such issues on a case-by-case basis when acting on a 
petition for a standstill.

IV. Procedural Matters

A. Final Paperwork Reduction Act Analysis

    137. This document adopts new or revised information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13 (44 U.S.C. 3501-3520). The requirements will be 
submitted to the Office of Management and Budget (OMB) for review under 
Section 3507 of the PRA. The Commission will publish a separate notice 
in the Federal Register inviting comment on the new or revised 
information collection requirements adopted in this document. The 
requirements will not go into effect until OMB has approved it and the 
Commission has published a notice announcing the effective date of the 
information collection requirements. In addition, we note that pursuant 
to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how 
the Commission might ``further reduce the information collection burden 
for small business concerns with fewer than 25 employees.'' In this 
present document, we have assessed the potential effects of the various 
policy changes with regard to information collection burdens on small 
business concerns, and find that these requirements will benefit many 
companies with fewer than 25 employees by promoting the fair and 
expeditious resolution of program access complaints. In addition, we 
have described impacts that might affect small businesses, which 
includes most businesses with fewer than 25 employees, in the FRFA 
below.

B. Congressional Review Act

    138. The Commission will send a copy of this Order in a report to 
be sent to Congress and the Government Accountability Office pursuant 
to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

C. Final Regulatory Flexibility Analysis

    139. As required by the Regulatory Flexibility Act of 1980, as 
amended (``RFA''), 5 U.S.C. 604, the Commission

[[Page 9717]]

has prepared the following FRFA relating to the Order. An Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the NPRM 
in MB Docket No. 07-198 (72 FR 61590, October 31, 2007). The Commission 
sought written public comment on the proposals in the NPRM, including 
comment on the IRFA. The comments received are discussed below. This 
present Final Regulatory Flexibility Analysis (``FRFA'') conforms to 
the RFA. See 5 U.S.C. 604.
Need for, and Objectives of, the Rules Adopted
    140. Section 628(a) of the Communications Act establishes that the 
goals of Section 628 are to increase competition and diversity in the 
video distribution market, to increase the availability of satellite 
cable programming and satellite broadcast programming to persons in 
rural and other areas not currently able to receive such programming, 
and to spur the development of communications technologies. 47 U.S.C. 
548(a). Section 628(b) of the Act prohibits unfair acts and practices 
of cable operators that have the purpose or effect of hindering 
significantly any multichannel video programming distributor (``MVPD'') 
from providing satellite cable programming or satellite broadcast 
programming to consumers. 47 U.S.C. 548(b) (``it shall be unlawful for 
a cable operator * * * to engage in unfair methods of competition or 
unfair or deceptive acts or practices, the purpose or effect of which 
is to hinder significantly or to prevent any multichannel video 
programming distributor from providing satellite cable programming or 
satellite broadcast programming to subscribers or consumers''). Section 
628(c)(1) provides the Commission with authority to adopt rules to 
specify the conduct prohibited by Section 628(b). 47 U.S.C. 548(c)(1). 
As required by Section 628(c)(2) of the Act (47 U.S.C. 548(c)(2)), the 
Commission adopted rules in 1993 (the ``program access rules'') which 
specifically prohibit: (i) A cable operator from unduly or improperly 
influencing the decision of its affiliated satellite cable programming 
vendor to sell, or unduly or improperly influencing the vendor's 
prices, terms, and conditions for the sale of, satellite cable 
programming to any unaffiliated MVPD (the ``undue or improper 
influence'' rule) (see 47 CFR 76.1002(a)); (ii) a cable-affiliated 
satellite cable programming vendor from discriminating in the prices, 
terms, and conditions of sale or delivery of satellite cable 
programming among or between competing MVPDs (the ``non-
discrimination'' rule) (see 47 CFR 76.1002(b)); and (iii) a cable 
operator from entering into an exclusive contract for satellite cable 
programming with a cable-affiliated satellite cable programming vendor, 
subject to certain exceptions (the ``exclusive contract prohibition'') 
(see 47 CFR 76.1002(c)-(e)). The Commission has also adopted procedures 
for resolving complaints alleging a violation of these program access 
rules. See 47 CFR 76.1003.
    141. Consistent with the text of Section 628(c)(2), the 
Commission's program access rules currently apply to ``satellite cable 
programming'' and ``satellite broadcast programming.'' 47 U.S.C. 
548(c)(2). The Act and the Commission's rules define both terms to 
apply only to programming transmitted or retransmitted by satellite for 
reception by cable operators. The term ``satellite cable programming'' 
means ``video programming which is transmitted via satellite and which 
is primarily intended for direct receipt by cable operators for their 
retransmission to cable subscribers,'' except that such term does not 
include satellite broadcast programming. 47 U.S.C. 548(i)(1); 47 U.S.C. 
605(d)(1); see also 47 CFR 76.1000(h). The term ``satellite broadcast 
programming'' means ``broadcast video programming when such programming 
is retransmitted by satellite and the entity retransmitting such 
programming is not the broadcaster or an entity performing such 
retransmission on behalf of and with the specific consent of the 
broadcaster.'' 47 U.S.C. 548(i)(3); see also 47 CFR 76.1000(f).
    142. The Commission has previously concluded that terrestrially 
delivered, cable-affiliated programming (such as programming 
transmitted to cable operators by fiber) is outside of the direct 
coverage of Section 628(c)(2) and the Commission's program access rules 
under Section 628(c)(2). See DIRECTV, Inc. and EchoStar Commc'ns Corp. 
v. Comcast Corp. et al., 15 FCC Rcd 22802, 22807 (2000), aff'd sub nom. 
EchoStar Commc'ns Corp. v. FCC, 292 F.3d 749 (D.C. Cir. 2002); see also 
2007 Program Access Order, 72 FR 56645, October 4, 2007, appeal pending 
sub nom. Cablevision Systems Corp. et al v. FCC, No. 07-1425 (D.C. 
Cir); 2002 Program Access Order, 67 FR 49247, July 30, 2002. This is 
commonly referred to as the ``terrestrial loophole,'' because it allows 
cable-affiliated programmers to transmit their programming to cable 
operators via terrestrial means and thereby avoid application of the 
program access rules. See 2002 Program Access Order.
    143. In the Order adopted herein, the Commission establishes rules 
for the consideration of complaints on a case-by-case basis alleging 
that a cable operator, a satellite cable programming vendor in which a 
cable operator has an attributable interest, or a satellite broadcast 
programming vendor, has engaged in unfair acts involving terrestrially 
delivered, cable-affiliated programming (which, as defined in this 
Order, includes exclusive contracts, discrimination, and undue or 
improper influence). The Order notes that there may be other acts or 
practices that are ``unfair'' under Section 628(b). The Order, however, 
pertains only to exclusive contracts, discrimination, and undue or 
improper influence involving programming that is both terrestrially 
delivered and, consistent with Section 628(c)(2), cable-affiliated. The 
Order does not reach any conclusions regarding other acts that may be 
``unfair'' under Section 628(b), nor does it foreclose potential 
complaints. The Order discusses the Commission's statutory authority 
for adopting rules to consider complaints alleging unfair acts 
involving terrestrially delivered, cable-affiliated programming. The 
Commission concludes that Section 628(b) grants the Commission 
authority to address unfair acts involving terrestrially delivered, 
cable-affiliated programming.
    144. The Order next establishes the following reasons for 
Commission action to address unfair acts involving terrestrially 
delivered, cable-affiliated programming: (i) Cable operators continue 
to have an incentive and ability to engage in unfair acts involving 
their affiliated programming, regardless of whether this programming is 
satellite-delivered or terrestrially delivered; (ii) the Commission's 
judgment regarding this incentive and ability is supported by real-
world evidence that cable operators have withheld certain terrestrially 
delivered, cable-affiliated programming from their MVPD competitors; 
and (iii) there is evidence that this withholding may significantly 
hinder MVPDs from providing video service in some cases. The Order 
concludes that Commission action to address unfair acts involving 
terrestrially delivered, cable-affiliated programming will facilitate 
broadband deployment and promote the goals of Section 628 to increase 
competition and diversity in the video distribution market. The Order 
also concludes that addressing unfair acts involving terrestrially 
delivered, cable-affiliated programming on a case-by-case basis 
comports with the First Amendment.
    145. The Order next explains that complainants may pursue similar 
claims involving terrestrially delivered, cable-affiliated programming 
that they may

[[Page 9718]]

pursue with respect to satellite-delivered, cable-affiliated 
programming under the program access rules: exclusive contracts, 
discrimination, and undue or improper influence. The Order also 
describes four ways in which the rules adopted to address unfair acts 
involving terrestrially delivered, cable-affiliated programming differ 
from the program access rules applied to satellite-delivered, cable-
affiliated programming: (i) A complainant alleging an unfair act 
involving terrestrially delivered, cable-affiliated programming will 
have the burden of proof (sometimes with the aid of a presumption when 
the unfair act involves a terrestrially delivered, cable-affiliated 
regional sports network) that the defendant's activities have the 
purpose or effect of hindering significantly or preventing the 
complainant from providing satellite cable programming or satellite 
broadcast programming to subscribers or consumers; (ii) in program 
access complaints alleging discrimination by a cable-affiliated 
programmer that provides only terrestrially delivered programming, the 
complainant shall have the additional burden of proof that the 
programmer that is alleged to have engaged in discrimination is wholly 
owned by, controlled by, or under common control with the defendant 
cable operator or cable operators, satellite cable programming vendor 
or vendors in which a cable operator has an attributable interest, or 
satellite broadcast programming vendor or vendors; (iii) there is no 
per se prohibition on exclusive contracts between a cable operator and 
a cable-affiliated programmer that provides terrestrially delivered 
programming; rather, the Commission will assess such contracts on a 
case-by-case basis in response to a program access complaint; and 
(iv)defendants will have 45 days--rather than the usual 20 days--from 
the date of service of a program access complaint involving 
terrestrially delivered, cable-affiliated programming to file an Answer 
to the complaint. The Order then discusses how these rules will be 
applied to common carriers, existing contracts, and terrestrially 
delivered programming that is subject to the program access rules 
applicable to satellite-delivered programming as a result of merger 
conditions. Finally, the Order establishes procedures for the 
Commission's consideration of requests for a temporary standstill of 
the price, terms, and other conditions of an existing programming 
contract by a program access complainant seeking renewal of such a 
contract.
Summary of Significant Issues Raised by Public Comments in Response to 
the IRFA
    146. In its Comments on the NPRM, the National Telecommunications 
Cooperative Association (``NTCA'') stated that program access rules may 
have a significant economic impact on a substantial number of small 
entities, such as small rural MVPDs. NTCA stated further that its 
proposed amendments to the Commission's program access rules, which 
would include extending the program access rules to terrestrially 
delivered, cable-affiliated programming, would reduce the impact on 
small rural MVPDs. NTCA also stated that its proposed amendments will 
``promote the public interest, convenience, and necessity by increasing 
competition and diversity in the multi-channel video programming market 
and spur development of new communications technologies.'' We conclude 
that allowing MVPDs to pursue program access claims involving 
terrestrially delivered, cable-affiliated programming will reduce the 
impact on small rural MVPDs by promoting competition and diversity in 
the MVPD market.
Description and Estimate of the Number of Small Entities to Which the 
Proposed Rules Will Apply
    147. The RFA directs agencies to provide a description of, and 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' 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'').
    148. Wired Telecommunications Carriers. The 2007 North American 
Industry Classification System (``NAICS'') defines ``Wired 
Telecommunications Carriers'' as follows: ``This industry comprises 
establishments primarily engaged in operating and/or providing access 
to transmission facilities and infrastructure that they own and/or 
lease for the transmission of voice, data, text, sound, and video using 
wired telecommunications networks. Transmission facilities may be based 
on a single technology or a combination of technologies. Establishments 
in this industry use the wired telecommunications network facilities 
that they operate to provide a variety of services, such as wired 
telephony services, including VoIP services; wired (cable) audio and 
video programming distribution; and wired broadband Internet services. 
By exception, establishments providing satellite television 
distribution services using facilities and infrastructure that they 
operate are included in this industry.'' The SBA has developed a small 
business size standard for wireline firms within the broad economic 
census category, ``Wired Telecommunications Carriers.'' Under this 
category, the SBA deems a wireline business to be small if it has 1,500 
or fewer employees. Census Bureau data for 2002 show that there were 
2,432 firms in this category that operated for the entire year. Of this 
total, 2,395 firms had employment of 999 or fewer employees, and 37 
firms had employment of 1,000 employees or more. Thus, under this 
category and associated small business size standard, the majority of 
firms can be considered small.
    149. Wired Telecommunications Carriers--Cable and Other Program 
Distribution. This category includes, among others, cable operators, 
direct broadcast satellite (``DBS'') services, home satellite dish 
(``HSD'') services, satellite master antenna television (``SMATV'') 
systems, and open video systems (``OVS''). The data we have available 
as a basis for estimating the number of such entities were gathered 
under a superseded SBA small business size standard formerly titled 
Cable and Other Program Distribution. The former Cable and Other 
Program Distribution category is now included in the category of Wired 
Telecommunications Carriers, the majority of which, as discussed above, 
can be considered small. Under the superseded SBA size standard, which 
had the same NAICS code, 517110, a small entity was defined as one with 
$13.5 million or less in annual receipts. According to Census Bureau 
data for 2002, there were a total of 1,191 firms in this previous 
category that operated for the entire year. Of this total, 1,087 firms 
had annual receipts of under $10 million, and 43 firms had receipts of 
$10 million or more but less than $25 million. Thus, we believe that a 
substantial number of entities included in the former Cable and Other 
Program Distribution category may have been categorized as small 
entities under the now superseded SBA small business size standard for 
Cable and Other

[[Page 9719]]

Program Distribution. With respect to OVS, the Commission has approved 
approximately 120 OVS certifications with some OVS operators now 
providing service. Broadband service providers (BSPs) are currently the 
only significant holders of OVS certifications or local OVS franchises, 
even though OVS is one of four statutorily-recognized options for local 
exchange carriers (LECs) to offer video programming services. As of 
June 2006, BSPs served approximately 1.4 million subscribers, 
representing 1.46 percent of all MVPD households. See 13th Annual 
Report, 24 FCC Rcd 542, 684, Table B-1 (2009). Among BSPs, however, 
those operating under the OVS framework are in the minority. OPASTCO 
reports that fewer than 3 percent of its members provide service under 
OVS certification. See id. at 607. The Commission does not have 
financial information regarding the entities authorized to provide OVS, 
some of which may not yet be operational. We thus believe that at least 
some of the OVS operators may qualify as small entities.
    150. Cable System Operators (Rate Regulation Standard). The 
Commission has also developed its own small business size standards for 
the purpose of cable rate regulation. Under the Commission's rules, a 
``small cable company'' is one serving 400,000 or fewer subscribers 
nationwide. As of 2006, 7,916 cable operators qualify as small cable 
companies under this standard. In addition, under the Commission's 
rules, a ``small system'' is a cable system serving 15,000 or fewer 
subscribers. Industry data indicate that 6,139 systems have under 
10,000 subscribers, and an additional 379 systems have 10,000-19,999 
subscribers. Thus, under this standard, most cable systems are small.
    151. Cable System Operators (Telecom Act Standard). The 
Communications Act of 1934, as amended, also contains a size standard 
for small cable system operators, which is ``a cable operator that, 
directly or through an affiliate, serves in the aggregate fewer than 1 
percent 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.'' There are approximately 65.3 million 
cable subscribers in the United States today. Accordingly, an operator 
serving fewer than 654,000 subscribers shall be deemed a small 
operator, if its annual revenues, when combined with the total annual 
revenues of all its affiliates, do not exceed $250 million in the 
aggregate. Based on available data, we find that the number of cable 
operators serving 654,000 subscribers or less totals approximately 
7,916. We note that the Commission neither requests nor collects 
information on whether cable system operators are affiliated with 
entities whose gross annual revenues exceed $250 million. 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.
    152. Wired Telecommunications Carriers--Direct Broadcast Satellite 
(``DBS'') Service. DBS service is a nationally distributed subscription 
service that delivers video and audio programming via satellite to a 
small parabolic ``dish'' antenna at the subscriber's location. DBS is 
now included in the category of Wired Telecommunications Carriers. The 
size standard for that definition is 1,500 employees. The majority of 
services in this category can be considered small under both the 
current SBA size standard definition and the superseded size standard 
definition, i.e., Cable and Other Program Distribution. Under the 
superseded SBA size standard, which had the same NAICS code, 517110, a 
small entity was defined as one with $13.5 million or less in annual 
receipts. Currently, three operators provide DBS service, which 
requires a great investment of capital for operation: DIRECTV, EchoStar 
(marketed as the DISH Network), and Dominion Video Satellite, Inc. 
(``Dominion'') (marketed as Sky Angel). See 13th Annual Report, 24 FCC 
Rcd at 580. All three currently offer subscription services. Two of 
these three DBS operators, DIRECTV and EchoStar Communications 
Corporation (``EchoStar''), report annual revenues that are in excess 
of the threshold for a small business. The third DBS operator, 
Dominion's Sky Angel service, serves fewer than 500,000 subscribers. 
See id. at 581. Dominion does not report its annual revenues. The 
Commission does not know of any source which provides this information 
and, thus, we have no way of confirming whether Dominion qualifies as a 
small business. Because DBS service requires significant capital, we 
believe it is unlikely that a small entity as defined by the SBA would 
have the financial wherewithal to become a DBS licensee.
    153. Wired Telecommunications Carriers--Private Cable Operators 
(PCOs) also known as Satellite Master Antenna Television (SMATV) 
Systems. PCOs, also known as SMATV systems or private communication 
operators, are video distribution facilities that use closed 
transmission paths without using any public right-of-way. PCOs acquire 
video programming and distribute it via terrestrial wiring in urban and 
suburban multiple dwelling units such as apartments and condominiums, 
and commercial multiple tenant units such as hotels and office 
buildings. PCOs are now included in the category of Wired 
Telecommunications Carriers. The size standard for that definition is 
1,500 employees. The majority of services in this category can be 
considered small under both the current SBA size standard definition 
and the superseded size standard definition, i.e., Cable and Other 
Program Distribution. Under the superseded SBA size standard, which had 
the same NAICS code, 517110, a small entity was defined as one with 
$13.5 million or less in annual receipts. The Independent Multi-Family 
Communications Council (``IMCC''), the trade association that 
represents PCOs, indicates that PCOs serve about 1 to 2 percent of the 
MVPD marketplace. See id. at 609. Individual PCOs often serve 
approximately 3,000-4,000 subscribers, but the larger operations serve 
as many as 15,000-55,000 subscribers. In total, PCOs currently serve 
approximately 900,000 subscribers. See id. at 684. 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 information regarding these 
operators. Based on the estimated number of operators and the estimated 
number of units served by the largest ten PCOs, we believe that a 
substantial number of PCOs may have been categorized as small entities 
under the now superseded SBA small business size standard for Cable and 
Other Program Distribution.
    154. Wired Telecommunications Carriers--Home Satellite Dish 
(``HSD'') Service. HSD is now included in the category of Wired 
Telecommunications Carriers, the majority of which, as discussed above, 
can be considered small. The data we use herein to estimate the number 
of HSD services is based on a superseded SBA-recognized definition. 
Because HSD provides subscription services, HSD fell within the SBA-
recognized definition of Cable and Other Program Distribution, which 
has been superseded by the category of Wired Telecommunications 
Carriers. The definition of Cable and Other Program Distribution 
provided that a small entity was one with $13.5 million or less in 
annual receipts. HSD or the large dish segment of the satellite

[[Page 9720]]

industry is the original satellite-to-home service offered to 
consumers, and involves the home reception of signals transmitted by 
satellites operating generally in the C-band frequency. Unlike DBS, 
which uses small dishes, HSD antennas are between four and eight feet 
in diameter and can receive a wide range of unscrambled (free) 
programming and scrambled programming purchased from program packagers 
that are licensed to facilitate subscribers' receipt of video 
programming. There are approximately 30 satellites operating in the C-
band, which carry over 500 channels of programming combined; 
approximately 350 channels are available free of charge and 150 are 
scrambled and require a subscription. HSD is difficult to quantify in 
terms of annual revenue. HSD owners have access to program channels 
placed on C-band satellites by programmers for receipt and distribution 
by MVPDs. Commission data shows that, between June 2005 and June 2006, 
HSD subscribership fell from 206,538 subscribers to 111,478 
subscribers. See id. at 684, Table B-1. The Commission has no 
information regarding the annual revenue of the four C-Band 
distributors.
    155. Wireless Telecommunications Carriers (except Satellite)--
Broadband Radio Service and Educational Broadband Service. Since 2007, 
the Census Bureau has placed wireless firms, including those providing 
wireless video service, within the new category of Wireless 
Telecommunications Carriers (except Satellite). Under the present and 
prior categories, the SBA has deemed a wireless business to be small if 
it has 1,500 or fewer employees. The Broadband Radio Service (BRS) is 
composed of Multichannel Multipoint Distribution Service (MMDS) systems 
and Multipoint Distribution Service (MDS). MMDS systems, often referred 
to as ``wireless cable,'' transmit video programming to subscribers 
using the microwave frequencies of MDS and Educational Broadband 
Service (EBS) (formerly known as Instructional Television Fixed Service 
(ITFS)). We estimate that the number of wireless cable subscribers is 
approximately 100,000, as of March 2005. Previously, wireless cable 
fell within the SBA-recognized definition of Cable and Other Program 
Distribution. The definition of Cable and Other Program Distribution 
provided that a small entity is one with $13.5 million or less in 
annual receipts.
    156. Broadband Radio Service and Educational Broadband Service--
Auction Data. The Commission has also defined small MDS (now BRS) 
entities in the context of Commission license auctions. For purposes of 
the 1996 MDS auction, the Commission defined a small business as an 
entity that had annual average gross revenues of less than $40 million 
in the previous three calendar years. This definition of a small entity 
in the context of MDS auctions has been approved by the SBA. In the MDS 
auction, 67 bidders won 493 licenses. Of the 67 auction winners, 61 
claimed status as a small business. At this time, the Commission 
estimates that of the 61 small business MDS auction winners, 48 remain 
small business licensees. In addition to the 48 small businesses that 
hold BTA authorizations, there are approximately 392 incumbent MDS 
licensees that have gross revenues that are not more than $40 million 
and are thus considered small entities. Hundreds of stations were 
licensed to incumbent MDS licensees prior to implementation of Section 
309(j) of the Communications Act of 1934. 47 U.S.C. 309(j). For these 
pre-auction licenses, the applicable standard is SBA's small business 
size standards for ``other telecommunications'' (annual receipts of 
$13.5 million or less).
    157. Broadband Radio Service and Educational Broadband Service--
Licenses Not Received Via Auction. MDS (now BRS) licensees and wireless 
cable operators that did not receive their licenses as a result of the 
MDS auction fall within the new category of Wireless Telecommunications 
Carriers (except Satellite). Under the present and prior categories, 
the SBA has deemed a wireless business to be small if it has 1,500 or 
fewer employees. Previously, wireless cable fell within the SBA-
recognized definition of Cable and Other Program Distribution. The 
definition of Cable and Other Program Distribution provided that a 
small entity is one with $13.5 million or less in annual receipts. 
Information available to us indicates that there are approximately 850 
of these licensees and operators that do not generate revenue in excess 
of $13.5 million annually. Therefore, we estimate that there are 
approximately 850 small entity MDS (or BRS) providers under the now 
superseded SBA small business size standard for Cable and Other Program 
Distribution.
    158. Educational Broadband Service. Educational institutions are 
included in the analysis above as small entities; however, the 
Commission has not created a specific small business size standard for 
ITFS (now EBS). We estimate that there are currently 2,032 ITFS (or 
EBS) licensees, and all but 100 of the licenses are held by educational 
institutions. Thus, we estimate that at least 1,932 ITFS licensees are 
small entities.
    159. Wireless Telecommunications Carriers (except Satellite)--Local 
Multipoint Distribution Service. Local Multipoint Distribution Service 
(LMDS) is a fixed broadband point-to-multipoint microwave service that 
provides for two-way video telecommunications. Since 2007, the Census 
Bureau has placed wireless firms, including those providing wireless 
video service, within the new category of Wireless Telecommunications 
Carriers (except Satellite). Under the present and prior categories, 
the SBA has deemed a wireless business to be small if it has 1,500 or 
fewer employees. Previously, LMDS providing wireless cable fell within 
the SBA-recognized definition of Cable and Other Program Distribution. 
The definition of Cable and Other Program Distribution provided that a 
small entity is one with $13.5 million or less in annual receipts.
    160. Wireless Telecommunications Carriers (except Satellite)--Local 
Multipoint Distribution Service (Auctions). The Commission has also 
defined small LMDS entities in the context of Commission license 
auctions. In the 1998 and 1999 LMDS auctions, the Commission defined a 
small business as an entity that had annual average gross revenues of 
less than $40 million in the previous three calendar years. Moreover, 
the Commission added an additional classification for a ``very small 
business,'' which was defined as an entity that had annual average 
gross revenues of less than $15 million in the previous three calendar 
years. These definitions of ``small business'' and ``very small 
business'' in the context of the LMDS auctions have been approved by 
the SBA. In the first LMDS auction, 104 bidders won 864 licenses. Of 
the 104 auction winners, 93 claimed status as small or very small 
businesses. In the LMDS re-auction, 40 bidders won 161 licenses. Based 
on this information, we believe that the number of small LMDS licenses 
will include the 93 winning bidders in the first auction and the 40 
winning bidders in the re-auction, for a total of 133 small entity LMDS 
providers as defined by the Commission's auction rules and the now 
superseded SBA small business size standard for Cable and Other Program 
Distribution.
    161. Cable and Other Subscription Programming. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in operating studios and facilities 
for the broadcasting of

[[Page 9721]]

programs on a subscription or fee basis. * * * These establishments 
produce programming in their own facilities or acquire programming from 
external sources. The programming material is usually delivered to a 
third party, such as cable systems or direct-to-home satellite systems, 
for transmission to viewers.'' The SBA has developed a small business 
size standard for firms within this category, which is all firms with 
$15 million or less in annual receipts. According to Census Bureau data 
for 2002, there were 270 firms in this category that operated for the 
entire year. Of this total, 217 firms had annual receipts of under $10 
million and 13 firms had annual receipts of $10 million to $24,999,999. 
Thus, under this category and associated small business size standard, 
the majority of firms can be considered small.
    162. Motion Picture and Video Production. The Census Bureau defines 
this category as follows: ``This industry comprises establishments 
primarily engaged in producing, or producing and distributing motion 
pictures, videos, television programs, or television commercials.'' The 
SBA has developed a small business size standard for firms within this 
category, which is all firms with $29.5 million or less in annual 
receipts. According to Census Bureau data for 2002, there were 7,772 
firms in this category that operated for the entire year. Of this 
total, 7,685 firms had annual receipts of under $24,999,999 and 45 
firms had annual receipts of between $25,000,000 and $49,999,999. Thus, 
under this category and associated small business size standard, the 
majority of firms can be considered small. Each of these NAICS 
categories is very broad and includes firms that may be engaged in 
various industries, including cable programming. Specific figures are 
not available regarding how many of these firms exclusively produce 
and/or distribute programming for cable television or how many are 
independently owned and operated.
    163. Motion Picture and Video Distribution. The Census Bureau 
defines this category as follows: ``This industry comprises 
establishments primarily engaged in acquiring distribution rights and 
distributing film and video productions to motion picture theaters, 
television networks and stations, and exhibitors.'' The SBA has 
developed a small business size standard for firms within this 
category, which is all firms with $29.5 million or less in annual 
receipts. According to Census Bureau data for 2002, there were 377 
firms in this category that operated for the entire year. Of this 
total, 365 firms had annual receipts of under $24,999,999 and 7 firms 
had annual receipts of between $25,000,000 and $49,999,999. Thus, under 
this category and associated small business size standard, the majority 
of firms can be considered small. Each of these NAICS categories is 
very broad and includes firms that may be engaged in various 
industries, including cable programming. Specific figures are not 
available regarding how many of these firms exclusively produce and/or 
distribute programming for cable television or how many are 
independently owned and operated.
    164. Small Incumbent Local Exchange Carriers. We have included 
small incumbent local exchange carriers in this present RFA analysis. A 
``small business'' under the RFA is one that, inter alia, meets the 
pertinent small business size standard (e.g., a telephone 
communications business having 1,500 or fewer employees), and ``is not 
dominant in its field of operation.'' The SBA's Office of Advocacy 
contends that, for RFA purposes, small incumbent local exchange 
carriers are not dominant in their field of operation because any such 
dominance is not ``national'' in scope. We have therefore included 
small incumbent local exchange carriers in this RFA, although we 
emphasize that this RFA action has no effect on Commission analyses and 
determinations in other, non-RFA contexts.
    165. Incumbent Local Exchange Carriers (``LECs''). Neither the 
Commission nor the SBA has developed a small business size standard 
specifically for incumbent local exchange services. The appropriate 
size standard under SBA rules is for the category Wired 
Telecommunications Carriers. Under that size standard, such a business 
is small if it has 1,500 or fewer employees. According to Commission 
data, 1,307 carriers have reported that they are engaged in the 
provision of incumbent local exchange services. Of these 1,307 
carriers, an estimated 1,019 have 1,500 or fewer employees and 288 have 
more than 1,500 employees. Consequently, the Commission estimates that 
most providers of incumbent local exchange service are small 
businesses.
    166. Competitive Local Exchange Carriers, Competitive Access 
Providers (CAPs), ``Shared-Tenant Service Providers,'' and ``Other 
Local Service Providers.'' Neither the Commission nor the SBA has 
developed a small business size standard specifically for these service 
providers. The appropriate size standard under SBA rules is for the 
category Wired Telecommunications Carriers. Under that size standard, 
such a business is small if it has 1,500 or fewer employees. According 
to Commission data, 859 carriers have reported that they are engaged in 
the provision of either competitive access provider services or 
competitive local exchange carrier services. Of these 859 carriers, an 
estimated 741 have 1,500 or fewer employees and 118 have more than 
1,500 employees. In addition, 16 carriers have reported that they are 
``Shared-Tenant Service Providers,'' and all 16 are estimated to have 
1,500 or fewer employees. In addition, 44 carriers have reported that 
they are ``Other Local Service Providers.'' Of the 44, an estimated 43 
have 1,500 or fewer employees and one has more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive local exchange service, competitive access providers, 
``Shared-Tenant Service Providers,'' and ``Other Local Service 
Providers'' are small entities.
    167. Electric Power Generation, Transmission and Distribution. The 
Census Bureau defines this category as follows: ``This industry group 
comprises establishments primarily engaged in generating, transmitting, 
and/or distributing electric power. Establishments in this industry 
group may perform one or more of the following activities: (1) Operate 
generation facilities that produce electric energy; (2) operate 
transmission systems that convey the electricity from the generation 
facility to the distribution system; and (3) operate distribution 
systems that convey electric power received from the generation 
facility or the transmission system to the final consumer.'' The SBA 
has developed a small business size standard for firms in this 
category: ``A firm is small if, including its affiliates, it is 
primarily engaged in the generation, transmission, and/or distribution 
of electric energy for sale and its total electric output for the 
preceding fiscal year did not exceed 4 million megawatt hours.'' 
According to Census Bureau data for 2002, there were 1,644 firms in 
this category that operated for the entire year. Census data do not 
track electric output and we have not determined how many of these 
firms fit the SBA size standard for small, with no more than 4 million 
megawatt hours of electric output. Consequently, we estimate that 1,644 
or fewer firms may be considered small under the SBA small business 
size standard.
Description of Reporting, Recordkeeping and Other Compliance 
Requirements
    168. The rules adopted in the Order will impose additional 
reporting, recordkeeping, and compliance requirements on MVPDs, cable

[[Page 9722]]

operators, satellite cable programming vendors in which a cable 
operator has an attributable interest, and satellite broadcast 
programming vendors. The Order allows MVPDs to file complaints with the 
Commission alleging that a cable operator, a satellite cable 
programming vendor in which a cable operator has an attributable 
interest, or a satellite broadcast programming vendor, has engaged in 
an unfair act involving terrestrially delivered, cable-affiliated 
programming (which, as defined in this Order, includes exclusive 
contracts, discrimination, and undue or improper influence). The 
complaint proceeding will be subject to the same procedures set forth 
in Sections 76.7 and 76.1003 of the Commission's rules that apply to 
program access complaints involving satellite-delivered, cable-
affiliated programming (see 47 CFR 76.7, 76.1003), except that (i) a 
complainant alleging an unfair act involving terrestrially delivered, 
cable-affiliated programming will have the burden of proof (sometimes 
with the aid of a presumption when the unfair act involves a 
terrestrially delivered, cable-affiliated regional sports network) that 
the defendant's activities have the purpose or effect of hindering 
significantly or preventing the complainant from providing satellite 
cable programming or satellite broadcast programming to subscribers or 
consumers; (ii) in program access complaints alleging discrimination by 
a cable-affiliated programmer that provides only terrestrially 
delivered programming, the complainant shall have the additional burden 
of proof that the programmer that is alleged to have engaged in 
discrimination is wholly owned by, controlled by, or under common 
control with the defendant cable operator or cable operators, satellite 
cable programming vendor or vendors in which a cable operator has an 
attributable interest, or satellite broadcast programming vendor or 
vendors; and (iii) defendants will have 45 days--rather than the usual 
20 days--from the date of service of a program access complaint 
involving terrestrially delivered, cable-affiliated programming to file 
an Answer to the complaint. In addition, these rules provide for pre-
filing notices, discovery, remedies, potential defenses, and the 
required contents of and deadlines for filing the complaint, answer, 
and reply. See 47 CFR 76.7, 76.1003. The Order also establishes 
procedures for the Commission's consideration of requests for a 
temporary standstill of the price, terms, and other conditions of an 
existing programming contract by a program access complainant seeking 
renewal of such a contract.
Steps Taken To Minimize Significant Impact on Small Entities and 
Significant Alternatives Considered
    169. The RFA requires an agency to describe any significant 
alternatives that it has considered in proposing regulatory approaches, 
which may include the following four alternatives (among others): (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. The NPRM invited comment on issues that had the potential to 
have significant economic impact on some small entities.
    170. As discussed above, the decision to establish rules to address 
unfair acts involving terrestrially delivered, cable-affiliated 
programming on a case-by-case basis, and to establish procedures for 
the Commission's consideration of requests for a temporary standstill, 
will facilitate competition in the video distribution market and 
promote broadband deployment. The decision therefore confers benefits 
upon various MVPDs, including those that are smaller entities. Thus, 
the decision benefits smaller entities as well as larger entities. In 
general, because the decision confers these benefits on smaller 
entities, a discussion of alternatives to the adopted rules is of 
secondary importance. We note that in the Order, the Commission found a 
lack of record evidence to reach a general conclusion that unfair acts 
involving this programming will significantly hinder an MVPD from 
providing video services in every case. A case-by-case approach is less 
burdensome than declining to consider complaints alleging that a cable 
operator has engaged in unfair acts involving terrestrially delivered, 
cable-affiliated programming, because small MVPDs would lack relief in 
such situations. Moreover, while the Order provides illustrative 
examples of evidence a complainant may provide, such as a regression 
analysis or market survey, it also recognizes that not all potential 
complainants will have the resources to provide this type of evidence. 
In addition, a case-by-case approach is consistent with the First 
Amendment.
Report to Congress
    171. The Commission will send a copy of the First Report and Order 
in MB Docket No. 07-198, including this FRFA, in a report to be sent to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of the First Report and Order in MB Docket No. 07-198, including this 
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the First 
Report and Order in MB Docket No. 07-198 and FRFA (or summaries 
thereof) will also be published in the Federal Register.

V. Ordering Clauses

    172. It is ordered that, pursuant to the authority found in 
Sections 4(i), 303(r), and 628 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 548, this First Report and Order 
Is Adopted.
    173. It is ordered that, pursuant to the authority found in 
Sections 4(i), 303(r), and 628 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303(r), and 548, the Commission's rules Are 
Hereby Amended as set forth in the Rules Changes below.
    174. It is ordered that the rules adopted herein are effective 
April 2, 2010, except for Sections 76.1001(b)(2), 76.1003(c)(3), and 
76.1003(l) which contain new or modified information collection 
requirements that require approval by the Office of Management and 
Budget (``OMB'') under the Paperwork Reduction Act (PRA) and will 
become effective after the Commission publishes a notice in the Federal 
Register announcing such approval and the relevant effective date.
    175. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this First Report and Order in MB Docket No. 07-198, including 
the Final Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.
    176. It is further ordered that the Commission shall send a copy of 
this First Report and Order in MB Docket No. 07-198 in a report to be 
sent to Congress and the Government Accountability Office pursuant to 
the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 76

    Administrative practice and procedure, Cable television, Equal 
employment opportunity, Political candidates, and Reporting and 
recordkeeping requirements.


[[Page 9723]]


Federal Communications Commission.

Marlene H. Dortch,
Secretary.

Rule Changes

0
For the reasons stated in the preamble, the Federal Communications 
Commission amends 47 CFR part 76 as follows:

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

0
1. The authority citation for part 76 continues to read as follows:

    Authority:  47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303, 
303a, 307, 308, 309, 312, 315, 317, 325, 339, 340, 341, 503, 521, 
522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 
552, 554, 556, 558, 560, 561, 571, 572, 573.



0
2. Section 76.1000 is amended by revising the first sentence of 
paragraph (b), (c)(1), the first sentence of paragraph (j), and adding 
paragraphs (l) and (m) to read as follows:


Sec.  76.1000  Definitions.

* * * * *
    (b) Cognizable interests. In applying the provisions of this 
subpart, ownership and other interests in cable operators, satellite 
cable programming vendors, satellite broadcast programming vendors, or 
terrestrial cable programming vendors will be attributed to their 
holders and may subject the interest holders to the rules of this 
subpart. * * *
* * * * *
    (c) * * *
    (1) Agrees to be financially liable for any fees due pursuant to a 
satellite cable programming, satellite broadcast programming, or 
terrestrial cable programming contract which it signs as a contracting 
party as a representative of its members or whose members, as 
contracting parties, agree to joint and several liability; and
* * * * *
    (j) Similarly situated. The term ``similarly situated'' means, for 
the purposes of evaluating alternative programming contracts offered by 
a defendant programming vendor or by a terrestrial cable programming 
vendor alleged to have engaged in conduct described in Sec.  
76.1001(b)(1)(ii), that an alternative multichannel video programming 
distributor has been identified by the defendant as being more properly 
compared to the complainant in order to determine whether a violation 
of Sec.  76.1001(a) or Sec.  76.1002(b) has occurred. * * *
* * * * *
    (l) Terrestrial cable programming. The term ``terrestrial cable 
programming'' means video programming which is transmitted 
terrestrially or by any means other than satellite and which is 
primarily intended for direct receipt by cable operators for their 
retransmission to cable subscribers, except that such term does not 
include satellite broadcast programming or satellite cable programming.
    (m) Terrestrial cable programming vendor. The term ``terrestrial 
cable programming vendor'' means a person engaged in the production, 
creation, or wholesale distribution for sale of terrestrial cable 
programming, but does not include a satellite broadcast programming 
vendor or a satellite cable programming vendor.

0
3. Section 76.1001 is revised to read as follows:


Sec.  76.1001  Unfair practices generally.

    (a) Unfair practices generally. No cable operator, satellite cable 
programming vendor in which a cable operator has an attributable 
interest, or satellite broadcast programming vendor shall engage in 
unfair methods of competition or unfair or deceptive acts or practices, 
the purpose or effect of which is to hinder significantly or prevent 
any multichannel video programming distributor from providing satellite 
cable programming or satellite broadcast programming to subscribers or 
consumers.
    (b) Unfair practices involving terrestrial cable programming and 
terrestrial cable programming vendors. (1) The phrase ``unfair methods 
of competition or unfair or deceptive acts or practices'' as used in 
paragraph (a) of this section includes, but is not limited to, the 
following:
    (i) Any effort or action by a cable operator that has an 
attributable interest in a terrestrial cable programming vendor to 
unduly or improperly influence the decision of such vendor to sell, or 
unduly or improperly influence such vendor's prices, terms, and 
conditions for the sale of, terrestrial cable programming to any 
unaffiliated multichannel video programming distributor.
    (ii) Discrimination in the prices, terms, or conditions of sale or 
delivery of terrestrial cable programming among or between competing 
cable systems, competing cable operators, or any competing multichannel 
video programming distributors, or their agents or buying groups, by a 
terrestrial cable programming vendor that is wholly owned by, 
controlled by, or under common control with a cable operator or cable 
operators, satellite cable programming vendor or vendors in which a 
cable operator has an attributable interest, or satellite broadcast 
programming vendor or vendors; except that the phrase does not include 
the practices set forth in Sec.  76.1002(b)(1) through (3). The cable 
operator or cable operators, satellite cable programming vendor or 
vendors in which a cable operator has an attributable interest, or 
satellite broadcast programming vendor or vendors that wholly own or 
control, or are under common control with, such terrestrial cable 
programming vendor shall be deemed responsible for such discrimination 
and any complaint based on such discrimination shall be filed against 
such cable operator, satellite cable programming vendor, or satellite 
broadcast programming vendor.
    (iii) Exclusive contracts, or any practice, activity, or 
arrangement tantamount to an exclusive contract, for terrestrial cable 
programming between a cable operator and a terrestrial cable 
programming vendor in which a cable operator has an attributable 
interest.
    (2) Any multichannel video programming distributor aggrieved by 
conduct described in paragraph (b)(1) of this section that it believes 
constitutes a violation of paragraph (a) of this section 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, as modified by Sec.  76.1003, with the following additions 
or changes:
    (i) The defendant shall answer the complaint within forty-five (45) 
days of service of the complaint, unless otherwise directed by the 
Commission.
    (ii) The complainant shall have the burden of proof that the 
defendant's alleged conduct described in paragraph (b)(1) of this 
section has the purpose or effect of hindering significantly or 
preventing the complainant from providing satellite cable programming 
or satellite broadcast programming to subscribers or consumers. An 
answer to such a complaint shall set forth the defendant's reasons to 
support a finding that the complainant has not carried this burden.
    (iii) A complainant alleging that a terrestrial cable programming 
vendor has engaged in conduct described in paragraph (b)(1)(ii) of this 
section shall have the burden of proof that the terrestrial cable 
programming vendor is wholly owned by, controlled by, or under common 
control with a cable operator or cable operators, satellite cable 
programming vendor or vendors

[[Page 9724]]

in which a cable operator has an attributable interest, or satellite 
broadcast programming vendor or vendors. An answer to such a complaint 
shall set forth the defendant's reasons to support a finding that the 
complainant has not carried this burden.

0
4. Section 76.1002 is amended by revising paragraph (b)(2) introductory 
text (the note remains unchanged) to read as follows:


Sec.  76.1002  Specific unfair practices prohibited.

* * * * *
    (b) * * *
    (2) The establishment of different prices, terms, and conditions to 
take into account actual and reasonable differences in the cost of 
creation, sale, delivery, or transmission of satellite cable 
programming, satellite broadcast programming, or terrestrial cable 
programming; * * *
* * * * *

0
5. Section 76.1003 is amended by revising paragraph (c)(3), the first 
sentence of paragraph (e)(1), paragraphs (g)(1) through (3), and by 
adding paragraph (l) to read as follows:


Sec.  76.1003  Program access proceedings.

* * * * *
    (c) * * *
    (3) Evidence that the complainant competes with the defendant cable 
operator, or with a multichannel video programming distributor that is 
a customer of the defendant satellite cable programming or satellite 
broadcast programming vendor or a terrestrial cable programming vendor 
alleged to have engaged in conduct described in Sec.  76.1001(b)(1);
* * * * *
    (e) * * *
    (1) Except as otherwise provided or directed by the Commission, any 
cable operator, satellite cable programming vendor or satellite 
broadcast programming vendor upon which a program access complaint is 
served under this section shall answer within twenty (20) days of 
service of the complaint. * * *
* * * * *
    (g) * * *
    (1) The satellite cable programming vendor, satellite broadcast 
programming vendor, or terrestrial cable programming vendor enters into 
a contract with the complainant that the complainant alleges to violate 
one or more of the rules contained in this subpart; or
    (2) The satellite cable programming vendor, satellite broadcast 
programming vendor, or terrestrial cable programming vendor offers to 
sell programming to the complainant pursuant to terms that the 
complainant alleges to violate one or more of the rules contained in 
this subpart, and such offer to sell programming is unrelated to any 
existing contract between the complainant and the satellite cable 
programming vendor, satellite broadcast programming vendor, or 
terrestrial cable programming vendor; or
    (3) The complainant has notified a cable operator, or a satellite 
cable programming vendor or a satellite broadcast programming vendor 
that it intends to file a complaint with the Commission based on a 
request to purchase or negotiate to purchase satellite cable 
programming, satellite broadcast programming, or terrestrial cable 
programming, or has made a request to amend an existing contract 
pertaining to such programming pursuant to Sec.  76.1002(f) of this 
part that has been denied or unacknowledged, allegedly in violation of 
one or more of the rules contained in this subpart.
* * * * *
    (l) Petitions for temporary standstill. (1) A program access 
complainant seeking renewal of an existing programming contract may 
file a petition along with its complaint requesting a temporary 
standstill of the price, terms, and other conditions of the existing 
programming contract pending resolution of the complaint. In addition 
to the requirements of Sec.  76.7, the complainant shall have the 
burden of proof to demonstrate the following in its petition:
    (i) The complainant is likely to prevail on the merits of its 
complaint;
    (ii) The complainant will suffer irreparable harm absent a stay;
    (iii) Grant of a stay will not substantially harm other interested 
parties; and
    (iv) The public interest favors grant of a stay.
    (2) The defendant cable operator, satellite cable programming 
vendor or satellite broadcast programming vendor upon which a petition 
for temporary standstill is served shall answer within ten (10) days of 
service of the petition, unless otherwise directed by the Commission.
    (3) If the Commission grants the temporary standstill, the 
Commission's decision acting on the complaint will provide for remedies 
that make the terms of the new agreement between the parties 
retroactive to the expiration date of the previous programming 
contract.

0
6. Section 76.1004 is amended by revising the last sentence of 
paragraph (a) to read as follows:


Sec.  76.1004  Applicability of program access rules to common carriers 
and affiliates.

    (a) * * * For the purposes of this section, two or fewer common 
officers or directors shall not by itself establish an attributable 
interest by a common carrier in a satellite cable programming vendor 
(or its parent company) or a terrestrial cable programming vendor (or 
its parent company).
* * * * *
[FR Doc. 2010-4139 Filed 3-2-10; 8:45 am]
BILLING CODE 6712-01-P