[Federal Register: January 23, 2001 (Volume 66, Number 15)]
[Rules and Regulations]
[Page 7410-7432]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23ja01-4]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 00-96; FCC 00-417]
Implementation of the Satellite Home Viewer Improvement Act of
1999: Broadcast Signal Carriage Issues/Retransmission Consent Issues
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: This document implements certain aspects of the Satellite Home
Viewer Improvement Act of 1999, which was enacted on November 29, 1999.
Among other things, the act authorizes satellite carriers to add more
local and national broadcast programming to their offerings and seeks
to place satellite carriers on an equal footing with cable operators
with respect to availability of broadcast programming. This document
implements regulations regarding the carriage of local television
stations in markets where satellite carriers offer local television
service to their subscribers.
DATES: Effective January 23, 2001. Written comments by the public on
the new and/or modified information collections are due March 26, 2001.
ADDRESSES: Federal Communications Commission, 445 12th Street, SW.,
Washington, DC 20554. In addition to filing comments with the
Secretary, a copy of any comments on the information collections
contained herein should be submitted to Judy Boley, Federal
Communications Commission, 445 12th Street, SW, Washington, DC 20554,
or via the Internet to jboley@fcc.gov, and to Edward Springer, OMB Desk
Officer, 10236 NEOB, 725--17th Street, NW., Washington, DC 20503 or via
the Internet to Edward.Springer@omb.eop.gov.
FOR FURTHER INFORMATION CONTACT: Ben Golant at (202) 418-7111 or via
internet at via internet at bgolant@fcc.gov. For additional information
concerning the information collection(s) contained in this document,
contact Judy Boley at 202-418-0214, or via the Internet at
jboley@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (``Order''), FCC 00-417, adopted November 29, 2000; released
November 30, 2000. The full text of the Commission's Order is available
for inspection and copying during normal business hours in the FCC
Reference Center (Room CY-A257) at its headquarters, 445 12th Street,
SW., Washington, DC 20554, or may be purchased from the Commission's
copy contractor, International Transcription Service, Inc., (202) 857-
3800, 1231 20th Street, NW., Washington, DC 20036, or may be reviewed
via internet at http://frwebgate.access.gpo.gov/cgi-bin/leaving.cgi?from=leavingFR.html&log=linklog&to=http://www.fcc.gov/csb/. This Report and Order contains
new or modified information collections(s) subject to the Paperwork
Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to
the Office of Management and Budget (OMB) for review under section
3507(d) of the PRA. OMB, the general public, and other Federal agencies
are invited to comment on the new or modified information collection(s)
contained in this proceeding.
Synopsis of the Report and Order
I. Introduction
1. Section 338 of the Communications Act of 1934 (``Act''), adopted
as part of the Satellite Home Viewer Improvement Act of 1999
(``SHVIA'') requires satellite carriers, by January 1, 2002, ``to carry
upon request all local television broadcast stations'' signals in local
markets in which the satellite carriers carry at least one television
broadcast station signal,'' subject to the other carriage provisions
contained in the Act. Until January 1, 2002, satellite carriers are
granted a royalty-free copyright license to retransmit television
broadcast signals on a station-by-station basis, subject to obtaining a
broadcaster's retransmission consent. This transition period is
intended to provide the satellite industry with time to begin providing
local television signals into local markets, otherwise known as
``local-into-local'' satellite service. In this Report and Order, we
adopt rules to implement the provisions contained in section 338.
2. In a separate proceeding, the Commission has implemented new
amendments to section 325 of the Act per the instructions set forth in
the SHVIA. Good faith negotiation regulations and the prohibition on
retransmission consent exclusivity are among the requirements the
Commission has already adopted. However, the Commission deferred
adopting rules concerning the satellite retransmission consent/
mandatory carriage election cycle until we considered all of the rules
necessary for a local broadcast station to gain carriage on a satellite
carrier under both sections 325 and 338 of the Act. Thus, we adopt
herein, election cycle rules and related policies for satellite
broadcast signal carriage.
II. Satellite Broadcast Signal Carriage
A. Commencing Satellite Broadcast Signal Carriage
3. Satellite carriers have had the right to retransmit local
television stations without first obtaining retransmission consent, and
without a mandatory carriage obligation, for a six month period from
November 29, 1999 to May 28, 2000. Beginning on May 29, 2000 and
continuing until December 31, 2001, satellite carriers may carry local
television stations on a station-by-station basis if a retransmission
consent agreement has been reached. As of January 1, 2002, satellite
carriers will have an obligation to carry all local television stations
seeking carriage in any market in which they provide local-into-local
service. This requirement is not absolute as satellite carriers
generally need not carry duplicative television stations in the same
market. In addition, a television station in a market where local-into-
local service is provided must submit a request to the satellite
carrier to gain carriage. Commercial television stations must make an
election between retransmission consent and mandatory carriage when
requesting carriage. Noncommercial television stations do not have to
make an election because they do not have retransmission consent
rights. However, a noncommercial television station and a satellite
carrier may enter into a voluntary carriage agreement apart from the
requirements contained in the Act.
4. We find that section 338 provides a satellite carrier with two
options for carrying local television broadcast signals. If a satellite
carrier provides its subscribers with the signals of local television
stations through reliance on the statutory copyright license, they will
have the obligation to carry all of the commercial television signals
in that particular market that request carriage. If a satellite carrier
provides local television signals pursuant to private copyright
arrangements, the section 338 carriage obligations do not apply. In
this context, we note that a retransmission consent agreement, in most
instances, is not analogous to a private copyright arrangement.
Retransmission consent permits an MVPD to retransmit a station's
signal, but it does not generally grant copyright clearance for the
program content carried by that station. To obtain private clearances
for material carried by a particular station, the copyright holders of
each of the programs, advertisements, and music
[[Page 7411]]
aired by that station must consent to the retransmission. In some
cases, however, a television station may have permission from the
copyright holders to provide clearances on their behalf. We therefore
conclude that unless the retransmission contract clearly provides for
all copyright clearances, a carrier retransmitting television stations
electing retransmission consent would be subject to the compulsory
license and be required to carry all other local market television
stations under the provisions set forth in section 338.
1. Election Cycle
5. In Implementation of the Satellite Home Viewer Improvement Act
of 1999--Retransmission Consent Issues, Report and Order, the
Commission promulgated good faith and anti-exclusivity requirements per
the provisions amending section 325 of the Act. Retransmission consent
and mandatory carriage election cycle requirements for satellite
carriers were discussed in the Notice in that docket. The
Retransmission Consent Notice requested comment on whether the
Commission should employ the same rules and procedures the Commission
adopted in response to the 1992 Cable Act or adopt a different election
cycle with different procedures to implement section 325(b)(3)(C)(i).
The Notice in this proceeding sought comment on how the carriage
provisions of section 338 would work with the revised section 325
provisions regarding retransmission consent. Because the issues of
retransmission consent and mandatory carriage are intertwined, we
believe that a coherent election regime is best effectuated by
consolidating the election cycle record from that proceeding with the
instant proceeding and determining the unresolved issues here.
6. The SHVIA amended section 325 to provide that no cable system or
other multichannel video program distributor shall transmit the signal
of a broadcasting station, or any part thereof, except: (A) With the
express authority of the originating station; (B) pursuant to section
614, in the case of a station electing to assert the right to carriage
by a cable operator; or (C) pursuant to section 338, in the case of a
station electing to assert the right to carriage by a satellite
carrier. The SHVIA also amended section 325(b) by adding new paragraph
(3)(C)(i), which directs the Commission to adopt regulations which
shall ``establish election time periods that correspond with those
regulations adopted under subparagraph (B) of this paragraph * * *''
7. Section 325(b)(3)(C)(i) instructs the Commission to establish
regulations and procedures governing the election process for
retransmission consent and mandatory carriage that correspond, as much
as possible, with existing section 325(b)(3)(B) of the Act. We find
that the length of the first election cycle shall be for a four-year
period commencing on January 1, 2002 and ending December 31, 2005. We
believe that a four-year timeframe is necessary to align the election
cycles among satellite carriers and cable operators so that local
television stations would be making retransmission consent/mandatory
carriage elections for cable and for satellite on the same cycle. This
conclusion is also consistent with many commenters that advocated a
synchronized cycle.
8. ALTV, for example, proposed an alternative that would ultimately
synchronize the cable and satellite cycles, but by beginning with a
one-year cycle, followed by a three year cycle. We find that a four-
year cycle is less burdensome for both broadcasters and satellite
carriers. We note that certain broadcast interests argue against
parallel election cycles because it would be overly burdensome to
simultaneously negotiate carriage among cable operators and satellite
carriers. We do not believe that the need to negotiate with the limited
number of satellite carriers will place an undue burden on
broadcasters. We also believe that simultaneous election cycles most
effectively equalizes the obligation for satellite carriers and cable
operators negotiating retransmission consent.
9. Echostar and DirecTV also favor synchronizing the cable and
satellite cycles but note that regulations developed for the cable
industry would not sufficiently take into account the distinctive
aspects of retransmission consent/mandatory carriage elections for the
satellite industry. EchoStar urges the Commission to give satellite
carriers at least six months between new retransmission consent/
carriage election dates and their respective effective dates. We agree
that a satellite carrier needs ample time to commence carriage prior to
the first election cycle because of the logistics of adding hundreds of
local television stations to its channel line-up. We therefore provide
satellite carriers with six months, from July 1, 2001 to December 31,
2001, to complete the carriage process. The election cycle and
notification timeframes established for the first cycle, as described
are designed to accommodate the initial implementation of section 338.
After satellite carriers commence carriage on January 1, 2002, the
rationales for extended timeframes no longer apply. Thus, the second
election cycle, and all cycles thereafter, shall be for a period of
three years (e.g. January 1, 2006 through December 31, 2008).
10. In terms of procedure and timing for the second election cycle
and all subsequent cycles, commercial television broadcast stations
should make their election by October 1st for the election cycle
beginning the following January 1st. Satellite carriers shall have 90
days prior to the new election cycle, beginning October 1st and ending
December 31st, to negotiate retransmission consent agreements. These
are the same timeframes as those established under the cable election
rules. If a satellite carrier begins providing local-into-local service
in a new market during an election cycle, the carrier and the
commercial television stations in that market have 90 days to complete
their retransmission consent discussions. In this situation, the
election cycle starts at the date a satellite carrier begins local-
into-local service and ends on the date the cycle ends under our rules.
11. Under the SHVIA, satellite carriers taking advantage of the
compulsory copyright license for local signals are required to carry
television broadcast stations ``upon request.'' We note that cable
carriage under the Act is an immediate right that vests without
request. That is why we initially adopted a default rule in the cable
context. We find, however, that there can be no default mandatory
carriage requirement under section 338 because a commercial television
station must expressly request carriage. Rather, if a commercial
television station does not make an election, it defaults to
retransmission consent. In this context, we also recognize that
carriers need some measure of control in configuring their satellite
systems to meet their statutory obligations. Therefore, if an existing
television station fails to request carriage by the established
deadlines, it is not entitled to mandatory carriage under 338 for the
duration of the election cycle. This policy does not apply to new
television stations to which different substantive and procedural rules
apply.
12. Consistent Retransmission Consent/Carriage Elections. Section
76.64(g) requires that broadcasters make consistent retransmission
consent/must carry elections between cable operators where franchise
areas of cable systems overlap. While the SHVIA does not expressly
require such action in the satellite context, in the Retransmission
Consent Notice we requested comments on whether broadcasters should be
[[Page 7412]]
subject to a consistent election requirement between satellite carrier
and cable operators. Broadcast industry commenters argue that the SHVIA
does not require Commission expansion of the consistent election
requirements to satellite carriers as well as cable systems. DirecTV,
on the other hand, argues that a consistent election rule should be
adopted to prevent broadcasters from unfairly disadvantaging one MVPD
competitor over another. We find that section 325, amended by the
SHVIA, makes no reference to expanding the consistent election
requirement to the satellite context, notwithstanding the fact that the
obligation was imposed in the cable context. Absent express statutory
language to the contrary, we believe that a consistent election
requirement between a cable operator and a satellite carrier should not
be imposed.
13. While the absence of statutory language guides our
determination, we also note that the service area differences between
satellite carriers and cable operators also counsels against
implementing such a rule. Television broadcast stations elect
retransmission consent or mandatory carriage on a system-by-system
basis under the cable carriage requirements. There are many cable
systems in a television market. Sometimes, a television broadcast
station may choose retransmission consent on one cable system, but
select mandatory carriage for a system in an adjacent area. A satellite
carrier's service area for local-into-local purposes, on the other
hand, encompasses television market areas that are substantially
broader in scope. When a television station is carried by a satellite
carrier, it is either a retransmission consent station or a mandatory
carriage station in the local market area. Given these facts, it is
difficult to require consistency between the two MVPDs without also
requiring a station to make a uniform election for all local market
cable systems in order to match the election choice the station made
with regard to the satellite carrier.
2. Initiating Carriage
14. In the Notice, we discussed the framework and procedural rules
that should be established for implementing section 338. We sought
comment regarding the meaning of the phrase ``carry upon request'' and
noted that in the cable context, the Commission initially required the
cable operator to contact all local broadcast television stations, in
writing, on matters relating to their carriage rights. We asked
commenters whether we should adopt a similar rule requiring satellite
carriers to notify all local broadcasters, in writing, of their
carriage rights once any local station in a particular market is being
carried. The Notice also pointed out that broadcast television stations
requesting mandatory carriage as part of the election process must make
such carriage requests in writing. The Commission sought comment on
whether similar provisions should be adopted in the satellite carriage
context.
15. ALTV and others assert that a local television station that
elects mandatory carriage under section 338 should be considered to
have requested carriage as well. ALTV argues that the additional
requirement of a formal carriage request is unnecessary where a local
television station already has notified a satellite carrier of its
choice between retransmission consent and mandatory carriage. We agree
with ALTV. An election made by the television broadcast station shall
be treated as the request for carriage. The procedural policy we adopt
here is necessary to reduce the paperwork lag time that would impede
satellite carriers from complying with its section 338 obligations by
January 1, 2002.
16. Commenters propose different approaches to the carriage
obligations of satellite carriers and the responsibilities of
television broadcast stations when local-into-local service is provided
in a television market. Broadcasters generally argue that because a
satellite carrier's carriage obligations are triggered only when the
carrier decides to avail itself of the local-into-local statutory
copyright license, it is appropriate for the carrier to notify local
stations, in writing, if it decides to rely on such a license. NAB
asserts that imposing an affirmative notification requirement on
satellite carriers will help prevent disputes about whether parties
understood the other's intentions. Conversely, DirecTV asserts that
section 338 places an affirmative burden on television broadcast
stations to ``request'' carriage on the satellite carrier's system.
EchoStar similarly contends that broadcasters should be required to
contact satellite carriers in the first instance, in writing, to
request mandatory carriage because broadcasters have actual notice of
the satellite carriers providing local-into-local service in their
market.
17. We find that television stations have the burden of initiating
satellite carriage. DirecTV and Echostar are the only satellite
carriers currently operating and providing local-into-local service. It
is reasonable to conclude that a television station has actual notice
of the local presence of these carriers since satellite subscribers
already have access to certain local television stations and a
satellite carrier's programming activities are well publicized.
18. We also find that a television broadcast station must notify a
satellite carrier, by July 1, 2001, of its carriage intentions if it is
located in a market where local-into-local service is provided.
Commercial television stations are required to choose between
retransmission consent and mandatory carriage on this date. NCE
stations must simply request carriage. We believe that a six month
timeframe provides satellite carriers with sufficient time to plan for
receive facility accommodations and channel line-up changes before
January 1, 2002. To facilitate the carriage process, we also find that
a satellite carrier must respond to a television station's carriage
request by August 1, 2001, and state whether it accepts or denies the
carriage request. If the satellite carrier denies the request, it must
state the reasons why. In this context, some valid reasons for not
commencing carriage of a television station are: (i) Poor quality
television signal; (ii) substantial duplication; (iii) non-local
station requesting carriage; and (iv) the satellite carrier is offering
local-into-local service via private copyright agreements. If the
television station's request for carriage is rejected, it may file a
complaint pursuant to the rules established in the Remedies section.
19. With regard to the notification procedure, the request made by
the television station must be in writing and sent to the satellite
carrier's principal place of business, as listed on the carriers'
website or official correspondence. The notification must be sent by
certified mail, return receipt requested. A station's written
notification should include the name of the appropriate station contact
person as well as the station's: (i) Call sign; (ii) address for
purposes of receiving official correspondence; (iii) community of
license; (iv) DMA assignment; and (v) affirmative carriage election.
These notification elements are necessary to ensure that a satellite
carrier has the base information it needs to commence the carriage of
local television stations.
20. New Local-Into-Local Service. In the Notice, we requested
comment on whether separate procedures should be established for new
satellite carriers and whether such rules should be similar to those
established for cable carriage. Broadcast commenters favor notification
requirements for new market entrants. While generally objecting to a
notification burden being placed on satellite carriers, DirecTV submits
that if one is adopted, the requirement should
[[Page 7413]]
only apply to markets in which a satellite carrier commences service
after January 1, 2002. We find that a new satellite carrier must notify
all local television stations in a given market when it plans to
provide local service. Similarly, an existing satellite carrier must
provide notice when it provides local-into-local service in a new
market. We note that requiring carriers to provide notice in these
circumstances is less burdensome because there are far fewer television
stations to contend with, at the same time, than in markets with
existing local-into-local service. We also believe that advance notice
in these situations ensures a level competitive playing field in two
respects: (i) all local television stations will know, at the same
time, when local-into-local service will be provided in a market and
(ii) all local television stations will be able to exercise their
carriage rights at the same time.
21. We therefore adopt procedural provisions that substantially
replicate the existing requirements for new cable systems under
Sec. 76.64. However, we craft the rules in a slightly different manner
recognizing that satellite carriers provide a national service. The
carriage procedures also provide carriers with adequate preparation
time while not unduly delaying the provision of full local-into-local
service in a market. We adopt the following guidelines for both new
satellite carriers and carriers that offer new local-into-local service
for the first time on or after July 1, 2001. First, satellite carriers
shall notify local television stations, in writing, at least 60 days
before the date it intends to provide new satellite service or intends
to enter into a new market. At the same time, the satellite carrier
should provide the location of the local receive facility in that
particular market. A local television station then must provide its
election, in writing, no more than 30 days after receipt of the
satellite carrier's notice. If a satellite carrier finds that the
television station meets the criteria for carriage under section 338
and our rules, it shall then have 90 days after the election letter was
received to negotiate carriage, resolve local receive facility issues,
reconfigure its system and channel line-up, notify subscribers of the
change in service, and commence carriage of the local television
station. If the satellite carrier finds that the station is not
qualified for carriage for any of the reasons stated, it shall notify
the local station in writing of the reason for such refusal within 30
days of the receipt of the station's election. The television station
may either accept the satellite carrier's conclusion or file a carriage
complaint.
22. New Television Stations. Section 338 requires carriage of cal
stations in local markets regardless of when such stations begin
broadcasting. Given this statutory directive, we find that new
television broadcast stations licensed and providing over-the-air
service have carriage rights under the SHVIA. Those stations licensed
to provide over-the-air service for the first time on or after July 1,
2001 will be considered new television broadcast stations for satellite
carriage purposes. We believe it appropriate to require a new
television station to make its initial election between 60 days before
commencing broadcast and 30 days after commencing broadcast. This
requirement is similar to the cable rules regarding new television
stations. If the station meets all of the requirements under section
338 and our rules, the satellite carriers shall commence carriage
within 90 days of receiving a carriage request from the television
broadcast station or whenever the new television station provides over-
the-air service. If the satellite carrier believes that the station is
not qualified, it must notify the station of such a determination with
30 days of receiving the election notice. An aggrieved television
station may then file a complaint for non-carriage in the appropriate
forum under the guidelines established in section 338.
B. Market Definitions
23. Section 338(h)(3) defines the term, ``local market,'' as having
the meaning it has under section 122(j) of title 17, United States
Code. Section 122(j)(2)(A) defines the term, ``local market,'' in the
case of both commercial and noncommercial television broadcast
stations, to mean the designated market area in which a station is
located, and--(i) in the case of a commercial television broadcast
station, all commercial television broadcast stations licensed to a
community within the same designated market area are within the same
local market; and (ii) in the case of a noncommercial educational
television broadcast station, the market includes any station that is
licensed to a community within the same designated market area as the
noncommercial educational television broadcast station.'' In addition
to the area described in paragraph (A), a station's local market
includes the county in which the station's community of license is
located. Section 122(j)(2)(C) defines the term, designated market area
to mean the market area, as determined by Nielsen Media Research and
published in the 1999-2000 Nielsen Station Index Directory and Nielsen
Station Index United States Television Household Estimates or any
successor publication.''
24. We did not receive comments interpreting these provisions.
DirecTV, however, did suggest that the Commission adopt a rule
expressly allowing satellite carriers, at their discretion, to limit a
television station's carriage coverage area to its predicted Grade B
service contour within its DMA. ALTV and NAB respond that DirecTV's
proposal is antithetical to the language and purpose of the SHVIA. NAB
asserts that the geographic scope of the mandatory carriage obligation
is precisely the same as the scope of the compulsory license granted by
Congress--namely, the ``local market,'' which generally means the DMA.
25. We find that the term ``local market,'' as it is used for
satellite carriage purposes, includes all counties within a market, as
well as the home county of the television station if that county is not
physically located in the DMA. We believe that the satellite compulsory
license includes not only television stations licensed to a local
market, but also extends to stations licensed in one market but
assigned by Nielsen to another market. For example, a television
station licensed to a community in Jefferson County, Missouri, which is
in the Paducah DMA, but assigned by Nielsen to the St. Louis DMA, would
be considered within the St. Louis market under section 338. In this
case, Jefferson County is the home county, and such a county should be
treated as part of the St. Louis DMA for satellite carriage purposes.
Moreover, since this station is licensed to a community in the Paducah
market, it may assert its carriage rights in that market as well, if
satellite carriers decide to provide local-into-local service there. If
there happens to be another television station licensed to a community
in Jefferson County, that station will also be considered in the St.
Louis DMA and eligible to assert its right to carriage against a
satellite carrier. In addition, if a station is licensed to a community
that is inside one DMA, but is assigned to another DMA by Nielsen, the
station could assert its right to carriage in the market where its
community of license is located. For example, KNTV is licensed to San
Jose, CA, which is in the San Francisco DMA, but is assigned by Nielsen
to the Salinas-Monterey DMA. In this case, KNTV can assert its carriage
rights in the San Francisco DMA because that is where its community of
license is located. These interpretations are consistent with the
SHVIA's goals of
[[Page 7414]]
preserving over-the-air broadcasting and providing satellite
subscribers with a full complement of local station signals.
26. Timing of Revisions to Market Definitions. We sought comment on
when to change the reference to the 1999-2000 Nielsen publications to
reflect changes in market structure and market conditions. We noted, in
the cable context, that the rules account for a market update every
three years. We asked whether the rules we implement under this section
should be updated on a triennial basis or at another interval. We also
noted that cable operators are required to use the 1997-98 Nielsen
publications to determine local markets for broadcast signal carriage
purposes up until January 1, 2003, yet satellite carriers are obliged
to use the 1999-2000 Nielsen publications for carriage purposes. We
asked whether satellite carriers and cable operators should be required
to use the same annual Nielsen market publications so that both may
rely on the same market definition.
27. Our goals here are threefold. We intend to: (i) Implement the
language of section 338; (ii) establish comparable timelines and
requirements for satellite carriers and cable operators; and (iii)
reduce procedural and administrative burdens. BellSouth argues for an
extended period between updates to allow for satellite carriers'
difficulties in accessing and tuning the satellite equipment used to
transport television signals. ALTV and NCTA argue that the Commission
should adopt rules allowing for the use of the same Nielsen data by
cable systems and satellite carriers as quickly as practicable. NAB
asserts that the 1999-2000 lists are the correct ones for the
Commission to use to determine markets for the first election cycle
commencing in January 1, 2002.
28. We will require satellite carriers to use Nielsen's 1999-2000
DMA market assignments to initially determine their carriage
obligations. Satellite carriers and television broadcast stations have
been on notice since November 29, 1999, that the 1999-2000 Nielsen
publications will be used for section 338 purposes. To avoid
overburdening satellite carriers, we will not require market boundaries
to be updated on an annual basis. However, we do believe that
television markets should be updated triennially, for each election
cycle, to better reflect new market conditions and viewership patterns.
Satellite carriers may, nevertheless, voluntarily adjust markets based
upon county additions found in annual editions of Nielsen DMA market
assignment publications. On this point, we agree with DirecTV when it
states that section 122(j)(2) allows a local market originally defined
in the 1999-2000 Nielsen market assignment to be expanded in accordance
with later issues of the relevant Nielsen publications. Satellite
carriers may add counties to the markets in which they now provide
local-into-local service by referring to the Nielsen 2000-2001 DMA
market assignments and future assignments. By adopting this approach, a
satellite carrier is able to serve new communities on the basis of each
yearly Nielsen DMA market change, if that is what is desirable.
Counties that are removed from a market in subsequent Nielsen
publications should remain in the market for satellite carriage
purposes so that satellite subscribers will not lose local-into-local
service. This policy fulfills the SHVIA's goal of furthering the
availability of local-into-local service and providing effective
competition to incumbent cable systems.
29. Market Modifications. In the Notice, we pointed out that a
statutory device exists to expand or contract the size of a local
television market for cable carriage purposes and sought opinion on
whether the Commission has the authority to implement a market
modification mechanism for satellite carriage purposes. Certain
broadcast commenters assert that implementing a market modification
mechanism is necessary to promote Congress' goal of protecting free
television service, placing satellite and cable on equal terms, and
preserve localism by ensuring that satellite carriage markets actually
reflect what is truly local. However, BellSouth and DirecTV state that
the Commission has no authority to add communities to a broadcaster's
television market. They believe that section 122(j) limits a station's
satellite carriage rights to the DMA that includes its community of
license. DirecTV argues, however, that the Commission can and should
adopt market modification procedures that allow a satellite carrier to
remove a station from the market if it can demonstrate that the station
does not serve the relevant market. Paxson, in contrast, argues that
had Congress intended to grant the Commission market modification
authority, it would have explicitly done so in the statute just as it
did in the cable context.
30. We find that the Act does not permit the Commission to change
the shape of a television market. While we recognize the concerns
raised, we note that the satellite compulsory license is coterminous
with the market in which the satellite carrier provides local-into-
local service. Without express language in the Copyright Act or the
Communications Act, any attempt to establish a market addition policy
under our public interest authority would be moot because a satellite
carrier cannot retransmit a local television station under section 338
into another market without subjecting itself to copyright liability
under section 122 of the Copyright Act. In addition, there is no
explicit provision providing the Commission with the authority to
modify markets in the manner permitted under section 614(h). Therefore,
we cannot establish a market modification policy on our own motion. We
note that the Senate version of the SHVIA had, at one point in time, a
market modification provision. This subsection was not adopted by
Congress. Thus, any attempt by the Commission to implement a market
modification regime would run counter to the express intent of
Congress.
31. Coverage. Satellite carriers are currently developing spot beam
technology where programming can be delivered to a discrete
geographical location using a specialized satellite. Spot beam
satellites have the potential to increase satellite system channel
capacity through the re-use of transponders. DirecTV argues that
satellite carriers should be permitted to use spot beams, when they are
in operation, for local-into-local service even if the beam does not
cover the entire market. We will permit carriers to use spot beam
satellites in such a manner. We first observe that section 338 does not
require a satellite carrier to serve each and every county in a
television market. Rather, it requires that in the areas it does
provide local-into-local service, it must carry all local television
stations subject to carriage under the statute. In this context, we
recognize that there are some markets, such as the Denver DMA
encompassing counties in four states, that are geographically
expansive. A spot beam may not be able to cover the entire DMA in these
instances, and to make the satellite carrier reconfigure its spot beam
may deprive it of capacity to serve additional markets with local-into-
local coverage.
C. Receive Facilities
32. Section 338(b)(1) states that, ``A television broadcast station
asserting its right to carriage under subsection (a) shall be required
to bear the costs associated with delivering a good quality signal to
the designated local receive facility of the satellite carrier or to
another facility that is acceptable to at least one-half the stations
asserting the right to carriage in the local market.''
[[Page 7415]]
Section 338(h)(2), in turn, defines the term ``local receive facility''
as ``the reception point in each local market which a satellite carrier
designates for delivery of the signal of the station for purposes of
retransmission.'' The Notice sought comment on the term ``local receive
facility'' and on the parameters under which a satellite carrier may
construct and designate a local receive facility. We noted that the
statutory language could be read to permit the satellite carrier to
establish a regional receive facility that would receive broadcast
signals from other markets provided 50% of the relevant broadcasters
agreed to the location. We also asked questions concerning the
procedures by which a satellite carrier must inform local market
television stations of the location of the receive facility, and
whether there should be Commission procedures to resolve a
broadcaster's complaint if it disputes the receive location selected by
the majority of broadcasters.
33. DirecTV agreed with the preliminary statement in the Notice
that ``the most economically feasible means [of delivery of multiple
local broadcast signals] is to aggregate signals in each local market
at one point and deliver them over the facilities of an interstate
telecommunications carrier to the uplink site(s)'' and co-locate at
such a carrier's switching center. DirecTV provided comments detailing
the process needed to establish a local receive facility, a process
they have used to create 27 local receive sites to provide service to
27 local-into-local markets served since the SHVIA was enacted at the
end of November, 1999. According to DirecTV, the parameters for
construction and designation of a local receive facility include: (i)
Access to multiple long distance common carriers for DS-3 or other
high-speed digital fiber circuits; (ii) access to at least one local
common carrier that can provide TV1 quality digital fiber circuits to
most, if not all, television broadcast stations [in the DMA], and/or
local DS-3 circuits, microwave, and broadband analog service as local
conditions may require; (iii) access to multiple long distance carriers
that can provide a wide area data network up to 256kb/s as well as dial
up voice service must also be available; (iv) access to building
rooftop with connecting conduits to support, where needed, good quality
over-the-air television reception, microwave links, and satellite
reception; (v) access to a suitable area with connecting conduits to
support a satellite downlink antenna; and (vi) access to a suitable
area to install equipment to support all local collection, compression,
monitoring, and transmission equipment. This area must be securable
against unauthorized access and have stable power source and HVAC.
DirecTV also states that local receive facilities must be planned
twelve months in advance.
1. Local Receive Facilities
34. In the definition of ``local receive facility'' in section
338(h)(2), the satellite carrier is the entity authorized to designate
the placement of a local receive facility. If the satellite carrier
designates a local receive facility, the television broadcast stations
are required by the statute to bear the costs of delivering a good
quality signal to ``the designated local receive facility of the
satellite carrier.'' We find that the statute expressly provides that
the satellite carrier has the right to determine the location of the
local receive facility. We disagree with the proposals offered by AAPTS
and Network Affiliates to require a satellite carrier to locate a
receive facility either within the Grade B contour or not more than 50
miles from the community of license of each of the local stations in a
market. We recognize that in some of the larger DMAs in the western
United States, some broadcast stations may be required to provide their
signals over hundreds of miles if the receive facility is located
beyond a local commercial or non-commercial television station's Grade
B signal. We believe this is the reason Congress provided for an
alternative receive facility. But, we do not believe it would be
consistent with statutory language, which requires the broadcast
station to bear the cost of delivering a good quality signal, to
require satellite carriers to bear the cost of erecting additional
facilities to receive signals from stations that are more than 50 miles
away from a designated receive point.
35. With respect to the costs of erecting and maintaining the
receive facility itself, we note that in the cable context, the cable
operator pays the costs for signal processing at its principal headend.
Given that the satellite carrier's local receive facility functions
like a headend, and is under the carrier's control, we believe that the
satellite carrier has the sole responsibility to pay for the costs of
building and maintaining such a facility. We also find that the
satellite carrier should pay for the costs of constructing and
maintaining an alternative receive facility. This is appropriate
particularly if the alternative facility is regional, and the satellite
carrier benefits from having fewer facilities to build and maintain.
36. We note that DirecTV and Echostar have already built facilities
in a number of television markets where they now provide local-into-
local service. While DirecTV states that twelve months is the minimum
amount of time necessary to establish a receive facility, we believe
that the satellite carriers that are currently providing local-into-
local service should not experience any difficulties in carrying local
television stations by January 1, 2002 due to buildout issues. In the
future, satellite carriers that enter new markets with local-into-local
service should be able to fulfill their carriage obligations because
section 338 does not impose carriage obligations until the satellite
carrier retransmits at least one local television station, which would
necessitate that the carrier have a receive facility in place or under
development before the carriage requirement is triggered.
37. We also find, as AAPTS and others suggest, that a satellite
carrier should designate the same receive facility for both
retransmission consent and mandatory carriage television stations so as
to avoid any opportunity to assign less convenient facilities to those
stations seeking mandatory carriage.
2. Alternative Receive Facility
38. The definition of local receive facility in section 338(h)(2)
strongly suggests that Congress intended to permit carriers to
designate a single point for all local-into-local stations to be
received, processed and retransmitted. However, the second clause of
section 338(b)(1) provides that, with respect to the costs of
delivering a good quality signal, there may be ``another facility that
is acceptable to at least one-half the stations'' to which the
television broadcast station delivers a good quality signal. The Notice
considered this other facility as a facility outside the local DMA,
perhaps a facility serving a regional area. Some commenters agreed that
this is the likely meaning of this clause. We note, however, that this
is not the only possible meaning of ``another facility.'' As DirecTV
suggests, the other facility could be an alternative facility, not
necessarily a non-local or regional facility. Most of the comments on
this subject assumed that the other facility would be a non-local,
regional facility established by a satellite carrier and that is
acceptable to at least one-half of the stations asserting the right to
carriage. We focus here on this interpretation and the necessary rules
to implement it, but we do not foreclose the possibility that the
creation of an alternative site,
[[Page 7416]]
whether local or non-local, can also be consistent with the statutory
language. An alternative local receive facility would be one selected
after the satellite carrier has chosen its first designated local
receive facility.
39. AAPTS states that the consent of at least one local NCE station
eligible for carriage in the market should be required before an
alternate facility is chosen. Broadcast groups generally assert that
non-local receive sites should not be selected unless the majority of
stations in each affected market agree to the location of the facility.
Echostar argues that it is significantly more burdensome for satellite
carriers to seek the agreement of a majority of stations in each
locality than the majority of stations in a particular region. ALTV
states that a non-local receive facility may be established if half the
local stations electing mandatory carriage, rather than retransmission
consent, agree to the alternate site.
40. Under our reading of the phrase ``that is acceptable to at
least one-half the stations asserting the right to carriage in the
local market,'' we find that an alternative receive facility may be
established if 50% or more of those stations in a particular market
consent to such a site. As the statute uses the term ``local,'' we find
that the calculation should be based on the majority of stations
entitled to carriage in each affected market, not the aggregate number
of stations in all affected markets. Since the ``right to carriage''
under section 338 extends, at least initially, to all local television
broadcasters, the calculation includes all stations, whether they elect
mandatory carriage or retransmission consent. We disagree, in part,
with ALTV, which asserts that a non-local receive facility may be
established if half the local stations electing mandatory carriage,
rather than retransmission consent, agree to the alternate site. Just
as we decide that a satellite carrier should include both
retransmission consent and mandatory carriage local stations on the
same designated local receive facility, we do not distinguish between
retransmission consent and mandatory carriage in the determination of
an acceptable alternative receive facility. We note, however, that if a
satellite carrier has both a designated local receive facility and a
non-local or regional receive facility and can accommodate local
stations for retransmission into their local markets at either one, the
television station may choose whether to deliver its good quality
signal to one or the other, and must notify the satellite carrier to
which one of the facilities it will deliver its signal. Each local
television broadcast station requesting carriage must bear the cost of
delivering its good quality signal to the receive facility.
41. All stations ``asserting a right to carriage,'' either through
retransmission consent or mandatory carriage, may participate in the
consideration of whether an alternative receive facility is acceptable.
We note that television stations that substantially duplicate other
local television stations may not ultimately be carried, but should,
nevertheless, be counted in the 50% of stations that must find the
alternative facility acceptable. For example, if there are 20 stations
in a local market that may request carriage, but only 16 that must
ultimately be carried, the satellite carrier must notify all 20
stations of a proposed alternative receive site, and at least 10 must
find the alternative site acceptable.
42. As several commenters observed, a satellite carrier's local
receive facility is the equivalent of a cable system's headend. We do
not believe that the statute requires, nor that any party contemplates,
that television stations can unilaterally select a site and force a
satellite carrier to construct a facility or move its receive facility
there. NAB asserts that the Act contemplates negotiations in which a
carrier attempts to persuade more than half of the stations eligible
for carriage to agree to deliver a good quality signal to a particular
location outside the local market. We agree with NAB on this point. If
the satellite carrier designates one local receive facility, 50% or
more of the local stations may not demand or require that the satellite
carrier provide an alternative receive facility. We find that Congress
intended that the satellite carrier be part of the negotiation process
concerning the establishment of an alternative receive facility. Given
the costs and steps involved in creating a receive facility, the
satellite carrier is to play a central role in such discussions.
Indeed, we expect that in most cases, the satellite carrier will be the
initiating party seeking to use a non-local or regional receive
facility other than its designated local receive facility and to obtain
the consent of at least 50% of the stations asserting the right to
carriage.
43. As noted, the statute assigns costs to the broadcaster when
providing the satellite carrier with a good quality signal to either a
local or alternative facility. We agree, therefore, with BellSouth that
a satellite carrier is not obligated to carry a television broadcast
station that refuses to pay for the costs of providing a good quality
signal. For similar reasons, we disagree with Network Affiliates'
proposal that if the carrier uses an alternative facility, which at
least half of the local stations find acceptable, then the satellite
carrier should pay the incremental costs of delivering each
broadcaster's signal if the alternative facility is more than 50 miles
from the reference point of the station's community of license.
3. Notification
44. We conclude that a satellite carrier should provide local
television stations with information on the location of an existing
local receive facility, or where it plans to build a local or
alternative receive facility, before the station makes its election.
Advance notice of the receive point location is necessary because
television stations must make arrangements for delivering good quality
signals to the receive site. Advance notice is also desirable to enable
the satellite carrier to negotiate with all the local television
stations concerning alternative receive facilities. In the event a
satellite carrier must select which duplicating station or NCE station
to carry from among several that request carriage, nothing in the
statute or our rules prevents the satellite carrier from taking into
consideration which stations that find the satellite carrier's proposed
alternative receive facility acceptable. As described, we consider this
to be a fair subject for negotiation amongst the affected parties.
45. We disagree with DirecTV's argument that satellite carriers not
be required to inform local broadcast television stations of the
location of the receive facility until after such stations have
notified the carrier, in writing, that they wish to be carried pursuant
to section 338, and it has been established that they are otherwise
eligible for such carriage. We see no reason to keep the location of
existing designated local receive facilities or planned sites a secret.
We agree with the suggestion of other commenters that the satellite
carrier should designate the local receive facility in its carriage
agreements with local television stations or, in the mandatory carriage
situation, provide notice to the affected stations as to the location
of the local receive facility.
46. Satellite carriers must be afforded a reasonable period of time
to finalize arrangements for the location of the local receive facility
in order to meet the January 1, 2002 deadline. Any delays by local
television stations will work against a satellite carrier meeting its
carriage obligations in a timely manner, which ultimately works against
the television stations and viewers, as well. Therefore, when a
satellite carrier has a
[[Page 7417]]
designated local receive facility to which local stations seeking
carriage must deliver a good quality signal, the carrier must make the
location of this facility known by June 1, 2001 for the first election
cycle, and at least 120 days prior to the commencement of all election
cycles thereafter. The means by which television stations are notified
is left to the discretion of the satellite carrier.
47. BellSouth suggests that a carrier should give local television
stations 90 days notice before it moves a local receive facility in
order to protect the legitimate interests of television stations and to
avoid service disruption to subscribers. We agree, in principal, with
BellSouth's proposal. Generally, a satellite carrier may relocate the
designated local receive facility every three years coinciding with the
election cycle. We believe that satellite carriers should have the
flexibility to change their designated local receive facility or
alternative facility, and will require 60 days advance notice to all
local stations. We are concerned, however, that the relocation of a
local receive facility may make it more difficult for some television
stations to pay the costs of delivering a good quality signal.
Therefore, if a satellite carrier decides to relocate the designated
local receive facility during an election cycle, it should pay the
television stations' costs to deliver a good quality signal to the new
location. With respect to moving the alternative facility, the new
location must be acceptable to at least half of the local stations
entitled to carriage in the local market. Obtaining such agreement may
require more than 60 days notice, and the satellite carrier may find it
necessary to plan for a new alternative facility with additional
advance notice. A satellite carrier may not require local stations to
deliver their signals to a new alternative facility unless and until at
least 50% of the stations agree to the new facility.
4. Process
48. The Notice requested comment on the process by which broadcast
television stations agree to the establishment and location of an
alternative receive facility. NAB urges the Commission to establish a
complaint process whereby stations in the minority of a determination
of an acceptable alternative receive facility can protest if they
believe the designation of a non-local receive facility site would
undermine or evade the mandatory carriage requirements. BellSouth
disagrees with this suggestion because under section 338(b)(1), the
stations' vote decides the issue, and there is no statutory basis for
Commission action to review or reverse this process. AAPTS responds by
stating the Commission has the authority to create remedial processes
that are not expressly mandated by statute.
49. We decline to establish a special complaint standard or process
for disputes concerning alternative receive facility disputes. To the
extent a television broadcast station believes its right to carriage
has been denied because fewer than 50% of the relevant stations agreed
to an alternative site, such claims may be raised in a mandatory
carriage complaint. If there is no dispute that 50% or more of the
local stations that could assert mandatory carriage have agreed to an
alternative site, then we see no issue that would require our
intervention.
50. We find that the negotiations and arrangements among local
television broadcast stations and satellite carriers with respect to
agreeing upon an alternative local receive facility are generally
intended to be a voluntary process. We also decline to adopt a good
faith test to be used in the context of receive point negotiations.
5. Good Quality Signal
51. Standard. In the Notice, we inquired about the ``good quality
signal'' mandate in section 338. Under the current cable carriage
regime, television broadcast stations must deliver either a signal
level of -45dBm for UHF signals or -49dBm for VHF signals at the input
terminals of the signal processing equipment, to be considered eligible
for carriage. We sought comment on whether the signal quality
parameters under section 614 and the Commission's cable regulations are
appropriate in the satellite carriage context.
52. DirecTV states that the Commission should define ``good quality
signal'' as one that will facilitate efficient MPEG compression of all
channels. DirecTV proposes that the signal must meet the requirements
of GR-338 CORE, TV1 for 20 route miles. It states that the ``20 route
miles'' specification contains essential elements that are necessary
for the digital video compression equipment used in DBS systems.
DirecTV also argues that the Commission should require a television
broadcast station to contract with a local telecommunications common
carrier to lease a dedicated TV1-quality fiber circuit from the
broadcast station to the satellite carrier's local receive facility. We
decline to adopt DirecTV's good quality signal proposals for several
reasons. First, we believe that the TV1 standard is too rigid a
construct. Specifically, a signal-to-noise ratio of +67 dB cannot be
easily implemented by most television broadcast stations. Broadcasters
do not have to meet such exacting ratios and levels when delivering
signals to a cable operator's headend to qualify for carriage.
Moreover, as NAB points out, satellite carriers, such as Echostar, have
been retransmitting local television signals that they have received
over-the-air without much concern about signal quality. We also note
that it would be prohibitively expensive for a small television station
to lease a dedicated TV1 circuit from a telecommunications carrier. It
is not our intention to impose inordinate costs on small television
stations that would prevent them from being carried by a satellite
carrier.
53. We decide to apply the current good quality signal standards
applicable in the cable context to satellite carriers, as suggested by
ALTV. The standards that have been applied to cable operators have
functioned well since the inception of the statutory cable carriage
requirements seven years ago. No evidence has been presented suggesting
the cable signal quality standard will not prove equally satisfactory
in the satellite context. We believe that the application of the
current good quality signal standards will provide parties with a
workable, tested standard.
54. Christian Television Network (``CTN'') argues that the good
quality signal standard should not be premised on off-air signal
strength, but should turn on the quality of the picture delivered by
any means. AAPTS also states local stations that cannot provide a good
quality signal to the local receive facility over-the-air should be
permitted to deliver the signal in another way. We agree with these
commenters that television stations may use any delivery method to
improve the quality of their signals to the satellite carrier. A
television station may use microwave transmissions, fiber optic cable,
or telephone lines as long as they pay for the costs of such delivery
mechanisms. Such alternative delivery methods are sanctioned under the
cable carriage rules and should be applicable in the satellite carriage
context.
55. Carriage of Television Stations With Disputed Signal Quality.
In the Notice, we recognized that a broadcaster not providing a good
quality signal to a cable system headend is not qualified for carriage.
In this situation, a cable system is under no obligation to carry such
a signal, but the broadcaster has an opportunity to provide equipment
necessary to improve its signal to the requisite level and gain
carriage rights. We sought comment on whether
[[Page 7418]]
Congress intended the same result for broadcasters that do not provide
a good quality signal to the local satellite receive facility.
56. ALTV, AAPTS, and Network Affiliates agree that a satellite
carrier may insist that a station cover the costs of delivering a good
quality signal; they argue, however, that a satellite carrier cannot
refuse to carry a television station just because its signal is less
than adequate. NAB comments that satellite carriers operating under
section 338, unlike cable systems operating under sections 614 and 615,
do not have the option of holding a station's carriage ``hostage''
during a dispute about a good quality signal. It posits that even if
the Commission had the power to allow carriers to do so, it should
decline that invitation, since a litigious satellite carrier could, as
a practical matter, unilaterally postpone the effective date of the
section 338 requirements for long periods by dragging out Commission
and court enforcement proceedings. Conversely, DirecTV and LTVS assert
that a satellite carrier may refuse to carry a station that fails to
provide a good quality signal to the local receive facility. LTVS adds
that the satellite carrier should first notify the broadcast station of
the deficient signal, including measurements and relevant data, and
then discontinue carriage if the broadcaster fails to improve the
signal quality.
57. We disagree with the broadcast groups on this issue. We first
observe that the statute does not affirmatively instruct satellite
carriers to carry television stations that do not provide a good
quality signal. Rather, section 338 only provides that a television
station is responsible for the costs of delivering a good quality
signal. Given the absence of a statutory directive, we must interpret
section 338 in a manner that is both reasonable and consistent with
current law. We also find that it would be contrary to the public
interest to require satellite carriers to carry television stations
that provide a poor quality signal. The principle reason underlying
this decision is that satellite subscribers would not benefit from
receiving a television signal that is of poor quality. In this
instance, we believe that satellite subscribers would rather subscribe
to cable or receive the signals over-the-air rather than pay for
inadequate television signals retransmitted by a satellite carrier.
Moreover, cable operators are not required to carry poor quality
signals under sections 614 and 615 of the Act. Noting the SHVIA's
directive in establishing comparable carriage requirements between
satellite carriers and cable operators, we should not require the
carriage of poor quality signals under section 338. We note that our
findings here do not relieve the satellite carrier of its obligations
to carry television signals where it provides local-into-local service.
Rather, the satellite carrier does not have an obligation to carry
television stations until they voluntarily pay and provide a good
quality signal.
58. Good Signal Quality Measurement and Testing. With respect to
the manner of testing for a good quality signal, we note that the
Commission has adopted a method for measuring signal strength in the
cable carriage context. Generally, if a test measuring signal strength
results in an initial reading of less than -51 dBm for a UHF station,
at least four readings must be taken over a two-hour period. If the
initial readings are between -51 dBm and -45 dBm, inclusive, readings
must be taken over a 24-hour period with measurements not more than
four hours apart to establish reliable test results. For a VHF station,
if the initial readings are less than -55 dBm, at least four readings
must be taken over a two-hour period. Where the initial readings are
between -55 dBm and -49 dBm, inclusive, readings should be taken over a
24-hour period, with measurements no more than four hours apart to
establish reliable test results. The Commission stated that cable
operators are further expected to employ sound engineering measurement
practices when testing signal strength. We sought comment on whether we
should require the same signal testing practices for measuring a
broadcaster's signal strength in the satellite context.
59. LTVS states that the signal testing practices used in the cable
context should apply in the satellite context. NAB proposes adding
``additional safeguards'' to the signal testing process, such as
permitting local stations to observe measurement procedures and
requiring use of independent engineers to conduct tests. NAB also
advocates that the good quality signal requirements for satellite
carriers should incorporate the various findings in Commission rulings
in the cable context, such as the requirement that an operator use
actual field measurements, rather than computer predictions, to measure
a television station's signal. BellSouth argues that NAB provides no
support for imposing more stringent requirements on satellite carriers
than on cable systems. BellSouth also argues that like cable systems,
satellite carriers should cooperate in testing the signal quality
delivered by television stations to the satellite carrier's local
receive facility.
60. We believe that the signal testing practices in the cable
carriage context should be generally applied in the satellite carriage
context. The Commission developed its engineering standards through
experience in adjudicating signal quality disputes between cable
operators and television broadcast stations. In this instance,
commenters have not provided any arguments or data suggesting that the
cable practices and engineering standards would be unsuited for
satellite carriers. As for NAB's call for additional safeguards, we
find that such engineering and procedural processes should not be
implemented as regulatory requirements. Instead, the parties should
look to precedent as useful guidance. With regard to testing fees, we
believe that the television broadcast station should pay for signal
tests.
61. At the same time, however, we note that the satellite carrier's
local receive facility may not have a tower with broadcast station
reception equipment mounted onto it like that is found at a cable
system's principal headend. It has been standard practice among cable
operators and broadcasters to test a television station's signal
strength at the tower site. To remedy this situation, we strongly
recommend that satellite carriers and broadcasters follow the testing
procedures for field strength measurements found in Sec. 73.686(b)(2)
of the Commission's rules, in addition to following the good
engineering practices established in the cable context. These rules, we
believe, will serve as an adequate proxy for conducting signal
measurements in lieu of an actual tower.
D. Duplicating Signals
62. Definition. Section 338(c)(1) states that:
Notwithstanding subsection (a), a satellite carrier shall not be
required to carry upon request the signal of any local commercial
television broadcast station that substantially duplicates the
signal of another local commercial television broadcast station
which is secondarily transmitted by the satellite carrier within the
same local market. * * *
In the Notice, we asked several definitional questions concerning this
phrase.
63. Section 614(b)(5) provides that a cable operator is not
required to carry the signal of any local commercial television station
that substantially duplicates the signal of another local commercial
television station which is carried on its cable system, or to carry
[[Page 7419]]
the signals of more than one local commercial television station
affiliated with a particular broadcast network. The Commission decided
that, based on the legislative history of this section, two stations
``substantially duplicate'' each other ``if they simultaneously
broadcast identical programming for more than 50 percent of the
broadcast week.'' For purposes of this definition, identical
programming means the identical episode of the same program series.
Section 615(e) provides that cable operator with cable system capacity
of more than 36 usable activated channels, and carrying the signals of
three qualified NCE stations, is not required to carry the signals of
additional stations the programming of which substantially duplicates
the programming broadcast by another qualified NCE station requesting
carriage. The 1992 Cable Act states that substantial duplication was to
be defined by the Commission in a manner that promotes access to
distinctive noncommercial educational television services. The
Commission concluded that an NCE station does not substantially
duplicate the programming of another NCE station if at least 50 percent
of its typical weekly programming is distinct from programming on the
other station either during prime time or during hours other than prime
time. We sought comment on whether the Commission should apply the
cable carriage duplication definitions to satellite carriers under
section 338.
64. DirecTV proposes that the definition of ``substantial
duplication,'' as employed in section 338(c), should include identical
programming, whether broadcast simultaneously or not, of either 50
percent or more of a television broadcast station's total weekly
programming, or 50 percent or more of its prime-time programming.
Network Affiliates argue that substantial duplication should be found
only where there is an overlap in the Grade B contours of the stations
in question. According to Network Affiliates, where there is no Grade B
overlap between the stations, the stations' signals should not be
deemed to substantially duplicate each other and should be entitled to
carriage. We do not find that these commenters have presented
persuasive evidence as to why the cable standard is not suited for
satellite carriers. Their proposals are also contrary to the purpose of
the Act. DirecTV's proposal would winnow away a television station's
right to carriage and would unduly expand the substantial duplication
exception beyond what was intended by Congress. If the Network
Affiliates' suggestion were adopted, we believe that the statutory
duplication provision would be eviscerated, as there would be no
station in a particular market that would duplicate another.
65. Accordingly, we will apply the duplication standards for
commercial television stations, set forth in the cable operator
context, to satellite broadcast signal carriage as suggested by ALTV,
NCTA, and LTVS. That is, two commercial television stations
substantially duplicate each other if they simultaneously broadcast
identical programming for more than 50 percent of the broadcast week.
The cable duplication provisions for commercial television stations
have been in effect for the last seven years, without much controversy,
and there is no reason to believe that they will be difficult to
implement in the satellite carriage context.
66. We note, however, that due to the fundamental operational
differences between cable systems and satellite service, a satellite
carrier may choose which duplicating signal it is not required to
carry. This policy differs from the cable duplication rules where an
operator must carry the station that is closest to its principal
headend. Since there are no ``headends'' in the satellite carriage
context, that are relevant to the question of which stations in a
particular market to carry, comparable rules in this specific instance
should not be implemented. Absent an analogous headend standard or
statutory guidance, we believe the public interest is best served by
permitting satellite carriers to determine which stations to offer
their subscribers.
67. DirecTV argues that, in addition to its ability to deny
carriage of duplicative stations in the first instance, a satellite
carrier should be permitted to remove a television broadcast station
from its line-up if it begins to substantially duplicate its
programming after carriage of the station has commenced. We agree with
DirecTV on this point. If the substantial duplication criteria are
satisfied, a satellite carrier is permitted to drop that television
station from its channel line-up. If this situation arises, however, we
require the satellite carrier to notify the station, and its
subscribers, in a timely manner prior to its removal from the relevant
local-into-local channel line-up. By the same token, we also find that
a satellite carrier must begin carrying a television station that stops
duplicating another local television station. When this circumstance
presents itself, the station shall use the same procedures to establish
carriage as permitted for new television stations under Sec. 76.66.
68. We sought comment on the phrase, ``affiliated with a particular
television network.'' In this situation, we asked what definition of
``television network'' applies because that term is not specifically
defined in section 338. We asked whether we should implement the
definition of television network found in section 339 of the Act, the
SHVIA's distant signal carriage provision, for the purposes of
administering the section 338 duplication provision. BellSouth, NCTA,
and LTVS all agree that the definition in section 339(d) is acceptable.
Given the parties assent to the inclusion of the section 339
definition, and the lack of opposition, we adopt this definition for
the purpose of the substantial duplication analysis.
69. We now turn to the second part of section 338(c)(1):
``Notwithstanding subsection (a), a satellite carrier shall not be
required to carry upon request the signal of any local commercial
television broadcast station that substantially duplicates the signal
of another local commercial television broadcast station which is
secondarily transmitted by the satellite carrier within the same local
market or to carry upon request the signals of more than one local
commercial television broadcast station in a single local market that
is affiliated with a particular television network unless such stations
are licensed to communities in different states.'' We find that this
part of the provision dictates three results. First, satellite carriers
are not obligated to carry more than one network affiliate in a
television market when both affiliates are licensed to communities in
the same state, even if the affiliates do not substantially duplicate
their programming. This is analogous to the cable rule stating that a
cable system need only carry the network affiliate closest to the
principal headend. In this context, a satellite carrier may select
which network affiliate it wants to carry. Second, a satellite carrier
must carry network affiliated television stations licensed to different
states, but located in the same market, even if they meet the
definition of substantial duplication under the Commission's rules. An
example of this situation is WMUR and WCVB. Both are ABC network
affiliates, but the former is licensed to Manchester, New Hampshire,
while the latter is licensed to Boston, Massachusetts. Under section
338(c)(1), the satellite carrier would be obligated to carry both.
Third, if two television stations located in different states (but
within the same ``local
[[Page 7420]]
market'') duplicate each other, but are not network affiliates, the
satellite carrier only has to carry one. For example, if there are two
Home Shopping Network station affiliates in the same market, but
located in different states, the satellite carrier need not carry both
because the Home Shopping Network is not a television network under our
definitional rule.
70. Different States Examples. In the Notice, we inquired about the
application of the statutory phrase, ``communities in different
states.'' Congress stated that this phrase addresses unique and limited
cases, including such station pairs as WMUR (Manchester, New Hampshire)
and WCVB (Boston, Massachusetts) in the Boston DMA (both ABC
affiliates), as well as WPTZ (Plattsburg, New York) and WNNE (White
River Junction, Vermont) in the Burlington-Plattsburg DMA (both NBC
affiliates), in which mandatory carriage of both duplicating local
stations upon request assures that satellite subscribers will not be
precluded from receiving the network affiliate that is licensed to a
community in the state in which they reside. We asked whether there
were other similar situations that must be addressed and accounted for.
71. According to DirecTV, Congress sought to create only a very
narrow exception to the general rule that satellite carriers shall not
be required to carry duplicative signals--one that applies in ``unique
and limited cases.'' DirecTV argues that the Commission must implement
this provision in the limited manner that Congress intended--in no case
should the Commission infer additional authority to address ``similar
situations.'' We infer no such additional authority. NAB asserts that
there is no conflict between the Act and the Conference Report on this
issue: the Act reaches any instance in which two affiliates of the same
network are licensed to different states but within the same local
market. According to NAB, while these instances are no doubt ``unique
and limited,'' as the Conference Report indicates, the Act is not
restricted to the particular examples mentioned in the Conference
Report. We agree with NAB. The reference in the legislative history
merely states known examples. It cannot be read to limit the phrase's
application to only the noted examples.
72. National Programming. DirecTV argues that it would make no
sense for the Commission to mandate carriage of local affiliates if
they substantially duplicate the programming provided by the same
channel that is carried nationally. NAB argues that the term ``another
local commercial television broadcast station'' in section 338's
duplication provision cannot be read to mean a non-local TV station or
non-broadcast satellite channel. We disagree with DirecTV's position
here. The relevant statutory provision is specifically an intra-market
exemption, directly referring to situations where ``local'' television
stations duplicate each other. Congress did not intend for national
programming to be considered in the duplication analysis, otherwise it
would have so stated. If we were to adopt DirecTV's position, local
television stations that carry Univision or Telemundo Spanish language
programming, for example, would not have to be carried by satellite
carriers because their national feeds are already carried. In so doing,
we would obviate the statute's focus on localism.
E. Noncommercial Educational Television Station Carriage Issues
73. Section 338(c)(2) states that: ``The Commission shall prescribe
regulations limiting the carriage requirements under subsection (a) of
satellite carriers with respect to the carriage of multiple local
noncommercial television broadcast stations. To the extent possible,
such regulation shall provide the same degree of carriage by satellite
carriers of such multiple stations as is provided by cable systems
under section 615.'' Section 615(l)(1), in turn, provides that a local
noncommercial educational television (``NCE'') station qualifies for
cable carriage rights if it is licensed by the Commission as an NCE
station and if it is owned and operated by a public agency, nonprofit
foundation, or corporation or association that is eligible to receive a
community service grant from the Corporation for Public Broadcasting.
For purposes of cable carriage, an NCE station is considered local if
its community of license is within 50 miles of, or the station places a
Grade B contour over, the principal headend of the cable system. Cable
systems are required to carry local noncommercial educational
television stations under a statutory provision based on a cable
system's number of usable activated channels. As part of our inquiry
regarding section 338's duplication provision, we sought comment on the
scope of a satellite carrier's obligations with regard to noncommercial
educational television stations. We also asked whether we should adopt
procedural rules for the carriage of NCE television stations to mirror
the cable carriage requirements.
74. AAPTS argues that the duplication provision is the only
limitation on local NCE station carriage contemplated by SHVIA. AAPTS
argues that Congress intended for eligible local NCE stations to be
carried whenever a satellite carrier system is providing local-into-
local service in a particular market. On the opposite side, DirecTV and
Echostar assert that the Commission should limit satellite carriage of
NCE stations in a manner consistent with a carrier's technical
limitations and other factors that differentiate the satellite industry
from the cable industry. For example, EchoStar argues that no more than
2% of a satellite carrier's total channel capacity (i.e., 6 channels
nationwide for a system of 300 channels) should be devoted to local
noncommercial station carriage. DirecTV submits that satellite carriers
should only be required to carry a number of NCE stations that would
bring the total number of NCE channels (defined to include national
educational channels) available in a local market to a maximum of four
percent of the local required channels offered by the satellite carrier
in the market. According to DirecTV, none of these channels should
substantially duplicate programming that is offered on another channel
already carried in the market.
75. We find that the NCE carriage formulations proposed by DirecTV
and Echostar would deprive satellite subscribers of access to local
noncommercial television stations in those markets where local-into-
local service is offered. While we recognize that satellite carriers
provide a national service, their proposals would vitiate the intent of
Congress in promoting carriage of local NCE stations. Instead, we agree
with AAPTS that the duplication provision is the only limitation on NCE
carriage contemplated by Congress when it promulgated section 338.
Therefore, a satellite carrier must carry all non-duplicative NCE
stations in markets where they provide local-into-service. Section 338
instructs the Commission to implement NCE station carriage requirements
providing the same degree of carriage by satellite carriers as is
required by cable systems under section 615 of the Act. Cable systems
with more than 36 channels are required to carry all non-duplicative
NCE stations. Given that satellite carriers have more than 36 channels,
we hold that satellite carriers' NCE station carriage obligations
should be comparable to the requirements imposed on cable operators.
76. At the same time, we recognize that section 338 requires the
Commission to limit the carriage of multiple NCE stations in markets
where local-into-local service is provided. It is important to note
that this instruction
[[Page 7421]]
was embedded in the NCE duplication provision of section 338. Against
this backdrop, we adopt a limitation principle based upon duplicative
programming. Using the NCE station duplication definition found in the
cable context as a general model, we have developed a two step approach
in defining substantial duplication in this context. First, a
noncommercial television station substantially duplicates the
programming of another noncommercial station if it simultaneously
broadcasts the same programming as another noncommercial station for
more than for more than 50 percent of prime time, as defined by
Sec. 76.5(n), and more than 50 percent outside of prime time over a
three month period. After three noncommercial television stations are
carried, the test of duplication shall be whether more than 50 percent
of prime time programming and more than 50 percent outside of prime
time programming is duplicative on a non-simultaneous basis. As for the
timeframe of when to measure duplication, we find that the amount of
duplicative prime-time weekly programming broadcast should be examined
over the course of three-month period. The end of the three-month
period must fall within 30 days prior to the date the satellite carrier
notifies the NCE station that it is denying or discontinuing carriage
based on substantial duplication. The amount of duplicative weekly
programming broadcast outside of prime time will be measured over the
same period. Only if the station duplicates more than 50 percent of the
other station's weekly programming in both of these respects can it be
denied carriage. We believe this approach is a reasonable means of
achieving the statutory goal of implementing an NCE carriage obligation
for satellite carriers that parallels the existing cable carriage
requirement, and takes into account, ``to the extent possible,'' the
other relevant technical and legal constraints. In reaching this
balance, we note in particular that, unlike satellite carriers, cable
operators are generally required to carry up to three local
noncommercial educational stations regardless of the duplication
involved. However, unlike satellite carriers, cable operators need not
carry all NCE stations licensed to communities in an expansive DMA, but
need only carry those NCE stations within 50 miles of the cable system
principal headend or which place a Grade B service contour over the
principal headend. The rule adopted attempts to balance these
differences in a practical way using the avoidance of duplication
mechanism identified in section 338(c) of the SHVIA.
77. Public Interest Set-Aside. DirecTV and BellSouth have suggested
that local NCE station carriage should be capped by the 4 per cent set-
aside requirement pursuant to section 335 of the 1992 Cable Act and the
Commission's rules. AAPTS urges the Commission to reject the DBS
industry's attempt to use the national public interest set-aside
requirement to limit NCE carriage obligations. According to AAPTS, the
satellite carriers' attempt to cap their carriage requirements through
their public interest obligations confuses two separate statutory
schemes: (i) The DBS set-aside for national, noncommercial educational
programming, designed primarily to satisfy DBS public interest
obligations; and (ii) the satellite carriage obligations, triggered
only when a satellite carrier offers local channels to its subscriber's
pursuant to the compulsory license.
78. We will not permit satellite carriers to include NCE stations,
carried under section 338, in the calculation of the 4 per cent set-
aside. We agree with AAPTS that the carriage requirements of the SHVIA
have different purposes from the set-aside requirements contained in
the satellite public interest provisions. The section 338 provisions
further the goals of localism and nondiscriminatory treatment of local
television stations while section 335 furthers the goal of program
diversity. In this regard, we are concerned that if a satellite carrier
were permitted to satisfy the public interest set-aside with NCE
stations, programming diversity would be diminished because all
programming currently carried to satisfy the set-aside will likely be
dropped in lieu of NCE station carriage. Section 335 would also be
rendered a nullity if NCE stations, carried under a different statutory
section, were allowed to satisfy the set-aside obligations. Moreover,
public interest set-aside programming must be made available to all
subscribers of a satellite carrier without additional charge. This is a
condition that cannot be met through the carriage of NCE stations under
the SHVIA because the compulsory license prohibits satellite carriers
from offering a local NCE station signal to subscribers in a non-local
market. In this context, it is also important to note that cable
operators have carriage obligations under Title VI that are mutually
exclusive. For example, cable operators have an obligation to establish
public, educational, and government access (``PEG'') channels under
section 611 of the Act and pursuant to a local franchising agreement.
We note that in this context, a cable operator cannot unilaterally
satisfy its PEG requirements by carrying NCE stations under section
615.
79. PBS Feed. KQED requests the Commission to clarify that
satellite carriers may not avoid their local NCE station carriage
obligations simply by carrying the national PBS satellite feed.
According to KQED, the national PBS feed was intended as an interim
measure to facilitate the satellite industry's ability to offer public
television service to their subscribers while the industry organized to
comply with section 338. On this point, we note that the statutory
copyright license for the PBS feed expires on January 1, 2002. This
expiration date coincides with the onset of the section 338 obligations
for satellite carriers. The SHVIA purposefully instituted a phase-out
and phase-in with regard to the two compulsory license provisions so
that satellite subscribers, in markets with local-into-local service,
would have continuous access to public broadcasting programming.
F. Channel Positioning
80. Placement. Section 338(d) of the Communications Act states
that:
No satellite carrier shall be required to provide the signal of
a local television broadcast station to subscribers in that
station's local market on any particular channel number or to
provide the signals in any particular order, except that the
satellite carrier shall retransmit the signal of the local
television broadcast stations to subscribers in the stations' local
market on contiguous channels and provide access to such station's
signals at a nondiscriminatory price and in a nondiscriminatory
manner on any navigational device, on-screen program guide, or menu.
The Conference Report notes that the obligation to carry local stations
on contiguous channels is to ensure that satellite carriers position
local stations in a way that is convenient and practically accessible
for consumers. We stated in the Notice that the statutory directive for
channel positioning confirms that satellite carriers are required to
present local broadcast channels to satellite subscribers in an
uninterrupted series. We sought comment, however, on whether broadcast
signals carried under retransmission consent must be contiguous with
the television stations carried under section 338 or whether they may
be presented to satellite subscribers in a non-contiguous manner.
81. ALTV submits that the signals of all local television stations,
including retransmission consent stations, must be
[[Page 7422]]
provided on contiguous channels. AAPTS argues that local broadcast
signals are to be grouped together regardless of their regulatory
status because such grouping makes all local signals more easily
accessible to viewers. NAB suggests that all stations should appear on
channel numbers that are in the order in which the stations appear to
the over-the-air receiver. BellSouth argues against requiring
contiguous channel location for retransmission consent stations. It
also asserts that section 338(d) is explicit that a satellite carrier
cannot be required to provide carry mandatory carriage stations in any
particular order.
82. DirecTV urges the Commission to interpret the term
``contiguous'' as allowing satellite carriers to form channel
``neighborhoods'' of local television broadcast stations which consist
of contiguous channels, but some of which remain vacant. ALTV believes
that this proposal is consistent with the contiguous channel
requirement provided that all local stations' signals are carried in an
uninterrupted series with no intervening channels of programming. NAB
does not object to DirecTV's ``neighborhood'' proposal, provided that:
(i) The neighborhood includes all the local television stations,
including retransmission consent television stations; (ii) the
television stations are listed in the same order as their over-the-air
channel numbers, and (iii) the neighborhood includes only local TV
stations.
83. Based on the language of the statute, we find that the channel
placement provision encompasses all local television stations.
Therefore, a satellite carrier is obligated to carry both
retransmission consent stations and mandatory carriage stations in a
block on the satellite carrier's channel line-up. We find that
DirecTV's neighborhood proposal is consistent with the statutory
language as long as the local channel block is not interrupted by non-
local programming. We do not believe, however, that the statute
requires a satellite carrier to place local television stations in any
particular order. Such restrictive language is not found in section
338(d).
84. Nondiscriminatory Program Guide Treatment. In the Notice, we
sought comment on the phrase, ``provide access to such station's
signals * * * in a nondiscriminatory manner on any navigational device,
on-screen program guide, or menu.'' We specifically sought comment on
what rules the Commission should develop to ensure that television
stations are accessible to satellite subscribers on nondiscriminatory
terms. We asked whether there were any existing Commission rules that
we may use as a model to develop regulations for this particular
situation. We also sought comment on whether Congress meant that
electronic program guide information concerning required television
station signals should be presented to subscribers in the same fashion
as other programming services provided by the satellite carrier.
85. AAPTS urges the Commission to adopt nondiscrimination rules
that parallel the open video system (``OVS'') requirements. It argues
that such rules should ensure that all television broadcast stations,
including NCE stations, are represented in a nondiscriminatory fashion
on the electronic program guide, menu, and/or navigation device
provided by the satellite carrier. NAB provides a list of suggestions
regarding how satellite carriers should treat television stations to
achieve the statute's objectives. One of those examples is to ``bar
satellite carriers from requiring viewers to take extra steps (e.g.,
mouse or remote control clicks) to obtain access to particular local
stations, or from placing `carry one, carry all' stations on different
screens.'' We find that the broadcasters' suggestions are too
restrictive to be implemented. The open video system model, as
BellSouth points out, is a statutory creation with unique requirements
and characteristics not meant to be transferred to other contexts. The
open video system requirements address access to a video delivery
platform where two-thirds of system capacity must be made available at
a nondiscriminatory price to outside programmers. The OVS provisions do
not directly address concerns involved here, such as nondiscriminatory
treatment on an electronic program guide. We also find that NAB's
proposals involve too much detail to be implemented as rules. We do not
believe that Congress meant to bar satellite carriers from requiring
viewers to take extra steps to reach a local television station on an
electronic program guide, when it promulgated the SHVIA.
86. In this context, we hold that a satellite carrier should treat
all local television stations on EPGs in the same manner. Program guide
presentation and information about a local independent television
station, or an NCE station, should be similar to that given to a local
network affiliate carried under retransmission consent. This
requirement is similar to the statute's treatment of television station
picture quality under the material degradation provisions.
87. Nondiscriminatory Price. In the Notice, we inquired about the
statutory phrase, ``provide access to such station's signals at a
nondiscriminatory price,'' and asked whether Congress meant that
television station signals carried pursuant to mandatory carriage
requests may cost no more per channel to subscribers than packages of
retransmission consent television station signals or other satellite
service packages. In response to this inquiry, ALTV and NAB assert that
all local signals should be included in a single package. AAPTS asserts
that NCE mandatory carriage television stations should be offered as
part of the existing local broadcast signal package without any
additional cost to the subscriber. BellSouth argues that a satellite
carrier has the right to place local television signals on a pay tier,
an enhanced service tier, or any other tier of service, as long as all
local television stations are on this tier and the viewing of no one
station costs the viewer more than the viewing of any other station in
the DMA. Echostar comments that one of the crucial differences between
cable and satellite carriers is that the latter do not have obligations
as to the tier in which local signals are to be offered. It states that
channel placement requirements of section 338 cannot be used as a lever
to impose such obligations on satellite carriers.
88. We do not believe that the statute requires satellite carriers
to sell all local television stations as one package to subscribers. As
Echostar points out, Congress did not intend to establish a basic
service tier-type requirement for satellite carriers when it
implemented section 338. Nor did Congress explicitly prohibit the sale
of local television station signals on an a la carte basis. Rather,
section 338's anti-discrimination language prohibits satellite carriers
from implementing pricing schemes that effectively deter subscribers
from purchasing some, but not all, local television station signals.
Thus, we find that a satellite carrier must offer local television
signals, as a package or a la carte, at comparable rates.
89. ALTV and NAB asks the Commission to rule that no new equipment
should be required to access some, but not all of the local signals in
a market. According to ALTV, such a pronouncement is necessary to
prevent discriminatory treatment of mandatory carriage television
stations. NAB also suggests that satellite carriers should be barred
from placing mandatory carriage television stations on any satellite
that would require a subscriber to purchase another dish to receive
such signals. BellSouth agrees in principle noting that
[[Page 7423]]
the channel placement provisions of section 338 were designed to ensure
that dominant stations in a DMA receive no better carriage treatment
than other stations. On the other hand, Echostar comments that one of
the obligations advocated by the NAB--that the local stations be
available from the same orbital location--is tantamount to a provision
that had been included in draft legislation prior to the passage of
SHVIA. Echostar states that such provision, which was dropped from the
final version of section 338, would have barred satellite carriers from
transmitting local stations in a manner that would require additional
reception equipment. Echostar argues that the Commission cannot
implement a rule similar to this provision when Congress decided not to
include such a requirement in the SHVIA.
90. We find that the language of section 338(d) covers the
additional equipment concerns raised by the parties and bars satellite
carriers from requiring subscribers to purchase additional equipment
when television stations from one market are segregated and carried on
separate satellites. However, we are not prohibiting a satellite
carrier from requiring a subscriber to pay for an additional dish in
order to receive all television stations from a single market. For
example, DirecTV may require an additional dish to receive all
television stations from the Baltimore market, but it may not require
subscribers to purchase the same to receive some Baltimore stations
where the others are available using existing equipment.
G. Content To Be Carried
91. Programming in the Vertical Blanking Interval. Section 338(g)
states that, ``The regulations prescribed [under section 338] shall
include requirements on satellite carriers that are comparable to the
requirements on cable operators under sections 614(b)(3) * * * and
615(g)(1).'' Section 614(b)(3) states that:
A cable operator shall carry in its entirety, on the cable
system of that operator, the primary video, accompanying audio, and
line 21 closed caption transmission of each of the local commercial
television stations carried on the cable system and, to the extent
technically feasible, program-related material carried in the
vertical blanking interval [``VBI''] or on subcarriers.
Retransmission of other nonprogram-related material (including
teletext and other subscription and advertiser supported information
services) shall be at the discretion of the cable operator. Where
appropriate and feasible, operators may delete signal enhancements,
such as ghost canceling, from the broadcast signal and employ such
enhancements at the system headend or headends.
Section 615(g)(1), which is the noncommercial equivalent of the
commercial television station provision in section 614(b)(3), states
that:
A cable operator shall retransmit in its entirety the primary
video, accompanying audio, and line 21 closed caption transmission
of each qualified local noncommercial educational television station
whose signal is carried on the cable system, and, to the extent
technically feasible, program-related material carried in the
vertical blanking interval, or on subcarriers, that may be necessary
for receipt of programming by handicapped persons or educational or
language purposes. Retransmission of other material in the vertical
blanking interval or on subcarriers shall be within the discretion
of the cable operator.
We sought comment on the applicability of these two similar cable
requirements in the satellite carriage context, especially in light of
the term ``comparable'' contained in section 338(g). We note that the
VBI contained in a television broadcast's signal is composed of many
lines of information. Our concern here is with those lines of the VBI
where certain types of data, such as closed captioning information, are
found. We also note that a satellite carrier does not retransmit VBI
information as it is received. Rather, it converts the data from an
analog to a digital form and carries such data as a digital stream to
the subscriber's home. The set-top box then converts the digital stream
and makes the data available for subscriber use.
92. Several commenters argue that the Commission should apply the
applicable cable provisions to satellite carriers. NAB comments that
satellite carriers should carry whatever information the broadcaster
may have embedded in its analog VBI. BellSouth, however, seeks to limit
the content-to-be-carried requirements for satellite carriers to only
closed captioning information until the technical feasibility of other
applications can be tested and agreed to on a case-by-case basis. We
will apply the current cable content-to-be-carried requirements to
satellite carriers. We are not persuaded that satellite carriers are
unable to carry the relevant data currently contained in the VBI. Nor
has any satellite carrier proffered a credible argument as to why we
should treat them differently from cable operators in this context. We
therefore require satellite carriers to carry the same program-related
vertical blanking information as cable operators, including but not
limited to, closed captioning, Nielsen rating codes, V-chip information
and for NCE stations, material necessary for the receipt of programs by
people with disabilities as well as education and language-related
material. We believe our decisions here will further the goals of the
SHVIA and are consistent with the cable television requirements.
93. Program-Related. In the Broadcast Signal Carriage Order, the
Commission decided that the factors enumerated in WGN Continental
Broadcasting, Co. v. United Video Inc. (``WGN'') provide useful
guidance for what constitutes program-related material. The WGN case
addressed the extent to which the copyright on a television program
also included program material in the VBI of the signal. Under the
cable carriage rules, all program-related broadcast material must be
carried. We sought comment on whether the WGN program-related analysis
applies in the context of satellite broadcast signal carriage. Very few
parties provided comments on this issue. Of those who did, there were
no negative arguments made. BellSouth, for example, has no objection to
use of the WGN criteria to determine what content is program related
and must be carried. Given the dearth of opposition to the WGN factors
and our cable program-related decisions, we hereby incorporate all
Commission policies and references regarding the term ``program-
related'' into the satellite carriage context. This measure, again,
serves to align the carriage requirements imposed both on cable
operators and satellite carriers. Moreover, since the WGN case centered
on copyright law, and the SHVIA and section 338 are also copyright-
based, we believe that adopting such a policy for satellite carriers is
reasonable and appropriate.
94. In the Notice, we recognized that the Commission has not
specifically defined ``primary video'' in the rules and has instead
relied on the language of section 614(b)(3)(B) to clarify the scope of
the term for purposes of cable broadcast signal carriage. In view of
this history, we sought comment on whether a specific definition of
primary video is required for satellite carriers to fulfill the
requirements contained in section 338. Network Affiliates state that a
specific definition of primary video need not be adopted for the
satellite carriage rules. Network Affiliates assert that the term has
proved self-explanatory and non-controversial as applied to cable
carriage of analog signals and should be equally so in the satellite
context. AAPTS asserts that the Commission has not further defined
primary video for the cable carriage rules, and in the seven years that
the rules have been in effect, this lack of definition has not been a
problem. We
[[Page 7424]]
agree that the primary video concept has worked in the cable carriage
context. We therefore incorporate the cable version of primary video
into the satellite broadcast signal carriage rules. Given these
indicia, and the fact that implementing the cable definition will
further the Congressional goal of comparability, we believe our finding
serves the public interest. We note that the Act also mandates that, in
addition to primary video, accompanying audio must be carried.
Therefore, satellite carriers are required to carry the secondary audio
programming (``SAP'') material that accompanies many broadcast
television programs.
95. Technical Feasibility. With regard to the ``technical
feasibility'' of the carriage of program-related material in the VBI or
on subcarriers, the Commission stated in the Broadcast Signal Carriage
Order that such carriage should be considered ``technically feasible''
if it does not require the cable operator to incur additional expenses
and to change or add equipment in order to carry such material. The
Commission noted that it would consider signal carriage to be
``technically feasible'' if only nominal costs, additions or changes of
equipment are necessary. We sought comment on whether the consideration
of technical feasibility should be different in the context of
satellite broadcast signal carriage.
96. AAPTS states that there is no technical impediment to the
carriage of VBI material over satellite; it is simply a question of
capacity. LTVS asserts that it is technically possible for a satellite
carrier to carry closed captioning information, audience measurement
and/or ratings data, and SAP audio. While BellSouth does not dispute
that satellite carriers can and do carry, without significant expense,
the program-related material which television stations currently
deliver through the VBI, it argues that requiring carriage of
different, additional or future VBI-carried information may be
expensive and may impose significant spectrum capacity burdens. DirecTV
asserts that ``billions of dollars'' of additional investment would be
required to retrofit its satellite system so that it could carry
additional material on the VBI and allow consumers to view the
additional material. AAPTS asserts that, given the widely divergent
viewpoints on this issue within the satellite industry, the Commission
cannot accept DirecTV's contention that it is not technically feasible
for carriers to retransmit program-related material in the VBI. AAPTS
further asserts that DirecTV's satellite systems are already being
designed to deliver data and that even the first DBS receivers had both
a wide-band and a low-speed data port.
97. Based on the arguments presented, we find that it is
technically feasible for satellite carriers to carry the current
program-related material contained in a television station's VBI.
DirecTV has not provided detailed evidence to support its claim that it
will incur financial hardship if it were required to carry such program
content. We also find it significant that LTVS, a future satellite
carrier, admits that it would have no difficulty in carrying VBI
information. With regard to BellSouth's argument, there could be new
kinds of program-related data in the VBI that would cause the satellite
carrier to incur inordinate expenses and to change or add a substantial
amount of equipment. We will address such issues on a case-by-case
basis in the future.
98. In this context, DirecTV and LTVS also urge the Commission to
recognize that satellite systems must be designed and constructed far
in advance of the date for commencement of service. They state that
once the systems are deployed in orbit, few changes can be made without
necessitating the complete replacement of the satellite systems at
issue. While we understand the challenges involved in constructing,
designing, and launching new satellites, the arguments expressed by the
satellite carriers' are unrelated to our discussion here. The
underlying concern of the carriers is that the carriage of VBI
information requires channel capacity. On this point, Congress was
cognizant of channel capacity concerns when the SHVIA was being
drafted, yet it still instructed the Commission to apply the cable
content-to-be carried requirements to satellite carriers. We cannot
relieve satellite carriers of the carriage obligations Congress imposed
in the SHVIA in this instance.
H. Material Degradation
99. Picture Quality. Section 338(g) states that, ``The regulations
prescribed [by the Commission under section 338] shall include
requirements on satellite carriers that are comparable to the
requirements on cable operators under sections 614(b)(4) * * * and
615(g)(2).'' Section 614(b)(4)(A) states that:
The signals of local commercial television stations that a cable
operator carries shall be carried without material degradation. The
Commission shall adopt carriage standards to ensure that, to the
extent technically feasible, the quality of signal processing and
carriage provided by a cable system for the carriage of local
commercial television stations will be no less than that provided by
the system for carriage of any other type of signal.
Section 615(g)(2), which is the noncommercial equivalent of the
commercial television station provision in section 614(b)(4), states
that:
A cable operator shall provide each qualified local
noncommercial educational television station whose signal is carried
in accordance with this section with bandwidth and technical
capacity equivalent to that provided to commercial television
broadcast stations carried on the cable system and shall carry the
signal of each qualified local noncommercial educational television
station without material degradation.
100. When implementing the material degradation provision for cable
carriage, the Commission relied on the technical standards as updated
in the Cable Television Technical and Operational Requirements Report
and Order, in defining the scope of the requirement. The Cable
Technical Report and Order specifically addressed the issue of
preventing material degradation of local television signals carried on
cable systems by adopting a number of technical standards and providing
that cable operators must make reasonable efforts and use good
engineering practices and proper equipment to guard against unnecessary
degradation in the signal received and delivered to the cable
subscriber. The Commission stated that the standards adopted in the
Cable Technical Report and Order were sufficient to satisfy the
material degradation requirements contained in the 1992 Cable Act. In
declining to adopt regulations in addition to those found in the Cable
Technical Report and Order, the Commission stated that further rules
may have the unwarranted effect of impeding technological advances and
experimentation in the cable industry. Standards specific to digital
transmission were not adopted. We sought comment on whether reliance on
Commission precedent in the cable carriage context regarding material
degradation was appropriate and whether technical standards mirroring
those in the cable television field would be warranted. We also asked
whether there were certain compression ratios or encoding techniques
that should be prohibited because their use would result in material
degradation.
101. Commenters have proposed a variety of ways to determine
picture quality standards. LTVS argues that the definition of material
degradation should include any instance where a television broadcast
station freezes, tiles, or looks ``dirty'' due to a satellite carrier's
choice of encoding and compression techniques. AAPTS advocates a rule
requiring satellite carriers to maintain local television stations at a
TASO Grade 2 level to
[[Page 7425]]
avoid material degradation of these signals. DirecTV urges the
Commission to refrain from setting standards for material degradation
until two industry committees devoted to video picture quality, IEEE G-
2.1.6 and ITU VQEG, complete their work. HBO argues that because of the
rapid changes in digital technology, there is significant danger that
any standards adopted today would quickly be obsolete, or worse, would
prevent beneficial changes in transmission parameters as technology
improves. We decline to adopt specific picture quality standards at
this time. As we stated in the Notice, analog degradation standards for
the cable industry were developed over the course of several years and
evolved as technology changed and improved. The Commission has not had
a significant opportunity to evaluate satellite delivery of broadcast
signals. We agree with DirecTV that it would be premature for the
Commission to adopt specific picture quality standards at this time.
102. The Conference Report noted that because of constraints on the
use of satellite spectrum, satellite carriers may initially be limited
in their ability to deliver must carry signals into multiple markets.
According to the Conference Report: ``New compression technologies,
such as video streaming, may help overcome these barriers, and if
deployed, could enable satellite carriers to deliver must carry signals
into many more markets than they could otherwise.'' The Commission was
urged, pursuant to its obligations under section 338, or in any other
related proceedings, ``to not prohibit satellite carriers from using
reasonable compression, reformatting, or similar technologies to meet
their carriage obligations, consistent with existing authority.''
103. ALTV argues that those technical means of enhancing capacity,
but degrading picture quality, should be prohibited. ALTV argues that
the Conference Report language on signal processing techniques should
not be read to eviscerate the material degradation prohibition. AAPTS
argues that the compression techniques a satellite carrier employs
should not degrade a local broadcast signal such that, to the average
viewer, the signal appears materially inferior to what the viewer might
receive over the air. BellSouth argues that the Commission should
decline to adopt signal quality standards that would contravene
Congress's mandate to not prohibit satellite carriers from using
reasonable compression, reformatting, or similar technologies to meet
their carriage obligations. DirecTV argues against prohibiting any
encoding techniques, compression ratios or the use of similar
technologies that would impede technical innovation that Congress
specifically sought to foster.
104. At the outset, we note that our concerns here revolve around
the satellite carrier's treatment of the broadcast signal on the
equipment it controls or authorizes. Thus, our focus does not involve
picture quality issues that may arise because of the type of television
receiver used since the satellite carrier has little control over the
use of these devices. We also note that the satellite carrier should
not be responsible for a poor quality picture delivered to the local
receive facility. Rather, the broadcast station is responsible for
ensuring that its signal is delivered in good quality. Moreover, our
analysis of material degradation recognizes that dish placement on or
near the subscriber's premises can affect the quality of the picture
received, but that the satellite carrier cannot control how and where
dishes are installed.
105. It is important to note the technical steps in the digital
conversion process affecting the material degradation analysis. In
satellite digital television systems, such as those implemented by
DirecTV and Echostar, there are four layers of the system where video
quality may be affected. The first layer, known as the picture layer,
is where decisions are made regarding the use of progressive or
interlace scanning techniques as well as whether the picture will be
produced in a standard definition or high definition format. The
choices made in this layer will not likely affect the quality of
retransmitted analog broadcasts. In the second layer, the compression
layer, decisions are made regarding the types of compression techniques
used. The relevant digital standard, MPEG-2, supports a wide range of
compression ratios and data rates. At this layer, the satellite carrier
attempts to maximize the number of channels carried on each transponder
and there is an effort to place a limit on the maximum data rate of
each channel. Limiting the data rate may cause the picture quality to
degrade, especially when certain video scenes involve rapid motion
images or there is a greater degree of camera panning and zooming. The
third layer is known as the transport layer and this is where the data
are structured and organized into data packets. Since most digital
video systems use the MPEG packet structure, there is little likelihood
that any type of degradation would occur at this level. The final layer
is the transmission layer and this is where data are modulated on to a
carrier for transmission. Satellite carriers use quadrature phase-shift
keying or ``QPSK''--as the principal format when transmitting video
programming. The use of high efficiency modulation techniques, such as
the cable industry's QAM standard, permit greater data rate throughput.
QPSK, however, is a lower order modulation and requires satellite
carriers to limit the data rate or increase channel bandwidth. The
chances for degradation to occur at this level are tied to the limiting
data rate technique in the compression layer.
106. We specifically note that degradation may result when the
satellite carrier encodes an analog broadcast signal and readies it for
digital retransmission. During the encoding process, certain artifacts
may be introduced into the original material that would have an effect
on picture quality. The most dominant artifact is quantization noise in
the picture. This effect is often visible on edges of subjects and
textured areas of the image. It is caused when there is a high amount
of picture detail along with a high degree of picture activity and
levels of quantization are restricted due to data rate reduction.
Random noise can also be introduced into the source video. This can
result in activity or ``busyness'' in detail areas of the picture and
tiling or flicker in other areas of the picture. Such effects are
caused by the encoder attempting to encode random noise. During the
encoding process of rapidly moving images, certain data reduction
techniques can result in another artifact known as ``dirty window,''
where noise appears stationary while images behind it are moving.
107. To satisfy the material degradation principles in the Act, we
will adopt a simple comparability rule. That is, a satellite carrier
should treat all local television stations in the same manner with
regard to picture quality. The signal processing, compression and
encoding techniques a satellite carrier uses to carry retransmission
consent stations should also be used for mandatory carriage stations.
This rule comports with the non-discriminatory thrust of section 338
and the SHVIA. As long as all local television stations are treated
equally, and the degradation resulting from processing these stations
does not exceed the level for the lowest quality non-broadcast video
service provided by the carrier, we will refrain from prohibiting
compression methods. We recognize that compression technology is
rapidly evolving and we do not want to impede innovation by proscribing
certain techniques. We also believe that new compression methods may
benefit subscribers as satellite
[[Page 7426]]
carriers could offer more services, particularly those involving
broadband applications.
108. Measurement. In the Notice, we sought suggestions for
measurement standards that may be used to address broadcast signal
degradation by satellite carriers. We found it necessary to request
such information because the Commission has had relatively little
experience in evaluating quality in the context of the analog to
digital to analog conversion of the type involved in satellite
broadcast signal carriage. LTVS states that subjective criteria should
be used to measure broadcast signal degradation and suggests that the
Commission consider the International Telecommunications Union's
recommendations for broadcast video evaluation. NAB, however, proposes
the use of three objective criteria--(i) carrier-to-noise (C/N) ratio,
(ii) bit error rates (BER), and (iii) bit rate allocation for each
channel--that collectively provide a method for checking whether a
satellite carrier is ``materially degrading'' a local station's signal
in comparison to other channels. We decline to adopt, as a rule, any
one specific technique for measuring degradation. Both LTVS and NAB
present worthy proposals, but they are untested in the field of
satellite broadcast signal carriage. The more reasonable approach here
is to develop a uniform measurement technique over time. After some
experience with satellite broadcast signal carriage, broadcasters and
satellite carriers will be able to apply such a technique for analog-
to-digital degradation measurements. At some future point, the
Commission will be in a better position to scrutinize the techniques
used and establish standards, if necessary.
I. Compensation for Carriage
109. Section 338(e) states:
A satellite carrier shall not accept or request monetary payment
or other valuable consideration in exchange either for carriage of
local television broadcast stations in fulfillment of the
requirements of this section or for channel positioning rights
provided to such stations under this section, except that any such
station may be required to bear the costs associated with delivering
a good quality signal to the local receive facility of the satellite
carrier.
We noted that this provision largely parallels provisions applicable to
cable operators that are found in sections 614(b)(10) and 615(i) of the
Act that are implemented in Sec. 76.60 of the Commission's rules. In
the cable context, commercial broadcasters elect either must carry or
retransmission consent to obtain carriage of their signals. If
mandatory carriage is selected, there are no specific terms for
carriage that must be requested, other than choosing the relevant
channel positioning options available to broadcasters under the Act. If
retransmission consent is selected, the operator may receive
compensation from the broadcaster in exchange for carriage. We assumed
the same general policy was intended for satellite carriers and that a
broadcaster seeking carriage rather than requesting carriage ``in
fulfillment of the requirements of [section 338]'' would simply
negotiate carriage provisions, including payment terms, in the context
of a retransmission consent negotiation. We sought comment on this
interpretation. We also sought comment on the policy underlying this
provision and its purpose in the statutory scheme.
110. Network Affiliates agree that the compensation rules
applicable to satellite carriers pursuant to section 338(e) of the Act
should parallel the provisions applicable to cable operators. LTVS
comments that there is no reason why the parties cannot themselves
reach agreement on reasonable compensation for carriage in a
retransmission consent agreement. In the context of mandatory carriage,
LTVS asserts that satellite carriers cannot charge local television
stations for carriage of their signals. We find that the current
compensation rules applicable to cable operators should likewise apply
to satellite carriers. That is, a station must bear the costs
associated with delivering a good quality signal and a satellite
carrier may accept payments from stations pursuant to a retransmission
consent agreement. No one commented that there should be different
rules between the industries nor can we find any valid reason to impose
different rules. We therefore implement the language of section 338 as
presented in the statute.
J. Remedies
111. Section 338(a)(2) states that the remedies for any failure to
meet the obligations under subsection (a) (carriage obligations) shall
be available exclusively under section 501(f) of title 17, United
States Code. New section 501(f)(1) states:
With respect to any secondary transmission that is made by a
satellite carrier of a performance or display of a work embodied in
a primary transmission and is actionable as an act of infringement
under section 122, a television broadcast station holding a
copyright or other license to transmit or perform the same version
of that work shall, for purposes of subsection (b) of this section,
be treated as a legal or beneficial owner if such secondary
transmission occurs within the local market of that station.
New section 501(f)(2) further provides that: ``A television broadcast
station may file a civil action against any satellite carrier that has
refused to carry television broadcast signals, as required under
section 122(a)(2), to enforce that television broadcast station's
rights under section 338(a) of the Communications Act of 1934.''
112. Section 338(f)(1) states:
Whenever a local television broadcast station believes that a
satellite carrier has failed to meet its obligations under
subsections (b) through (e) of this section [(b) good signal
required, (c) duplication not required, (d) channel positioning, and
(e) compensation for carriage], such station shall notify the
carrier, in writing, of the alleged failure and identify its reasons
for believing that the satellite carrier failed to comply with such
obligations. The satellite carrier shall, within 30 days after such
written notification, respond in writing to such notification and
comply with such obligations or state its reasons for believing that
it is in compliance with such obligations. A local television
broadcast station that disputes a response by a satellite carrier
that it is in compliance with such obligations may obtain review of
such denial or response by filing a complaint with the Commission.
Such complaint shall allege the manner in which such satellite
carrier has failed to meet its obligations and the basis for such
allegations.
In addition, section 338(f)(2) states:
``The Commission shall afford the satellite carrier against
which a complaint is filed under paragraph (1) an opportunity to
present data and arguments to establish that there has been no
failure to meet its obligations under this section. Section
338(f)(3) then states that: ``Within 120 days after the date a
complaint is filed under paragraph (1), the Commission shall
determine whether the satellite carrier has met its obligations
under subsections (b) through (e). If the Commission determines that
the satellite carrier has failed to meet such obligations, the
Commission shall order the satellite carrier to take appropriate
remedial action. If the Commission determines that the satellite
carrier has fully met the requirements of such subsections, the
Commission shall dismiss the complaint.'' At the outset, we find
that the procedural provisions contained in section 338(f)(1-3),
concerning the steps required to file a carriage complaint, are
plain on their face. We adopt the statutory procedures without
change. With regard to the substantive issues raised in the Notice,
we address each one in turn.
113. In the Notice, the Commission discussed the parameters of its
enforcement authority regarding the carriage obligation rules under
SHVIA. We sought to reconcile forum disputes that may arise if a
satellite carrier fails to carry a local television station that
[[Page 7427]]
has requested carriage in a market in which it provides local-into-
local service. In addition, we sought to determine whether disputes
concerning the non-carriage of broadcast station signals by satellite
carriers because of signal quality problems should be within the domain
of the courts, the Commission, or shared by the different
jurisdictions. ALTV states that the outright failure to carry a station
entitled to carriage under section 338 should be grounds for an
infringement of copyright suit in federal court. DirecTV asserts that
the remedy available to a broadcaster in the event of a compulsory
carriage dispute is to file a civil action against the satellite
carrier that has refused carriage and that the Commission does not have
jurisdiction to remedy non-carriage of broadcast station signals by
satellite carriers. On the one hand, the statute provides that the
remedies for any failure to meet the carriage obligations of section
338(a) shall be available exclusively under section 501(f) of the
Copyright Act, which directs complainants to an appropriate United
States District Court. On the other hand, sections 338(b)-(e) clearly
contemplate the Commission making determinations that, in appropriate
circumstances, require carriage. We find that if a television station
is not being carried and seeks damages and other specific forms of
monetary or injunctive relief under either section 338(a) of the Act or
section 501(f) of the Copyright Act, then the United States District
Court is the exclusive forum for adjudicating the complaint. If the
television station seeks a finding on the facts and a resulting
determination of whether it is entitled to carriage pursuant to
Sec. 76.66 of our rules, then it may file a complaint with the
Commission. In arriving at this determination, we do not believe that
Congress intended to deprive the Commission of the right to enforce the
regulations the statute specifically directs us to adopt under section
338.
114. We find that the Commission should have primary jurisdiction
over issues concerning: (1) Good quality signal; (2) substantial
duplication; (3) channel positioning; and (4) compensation matters. We
adopt this position to ensure the rapid and timely implementation of
section 338. The Commission has the technical expertise to review and
address such matters. The institutional knowledge the Commission has
developed in adjudicating cable-broadcast disputes will be helpful in
processing satellite carriage cases in an efficient manner.
115. In response to questions we raised in the Notice, several
commenters addressed the issue of whether broadcasters should be
permitted to file complaints with the Commission against a satellite
carrier for non-compliance with the content-to-be-carried and material
degradation provisions of the SHVIA, specifically referenced in section
338(g). A number of broadcast commenting parties assert that the
Commission's jurisdiction should be extended to allow consideration and
resolution of complaints relating to content-to-be-carried and material
degradation issues. Network Affiliates and LTVS, for example, state
that such disputes rest squarely within the Commission's expertise and
excluding such disputes from the complaint procedures would be
inconsistent with section 338(g), which requires the Commission to
implement regulations regarding material degradation and content-to-be-
carried in the satellite context that mirror those in the cable
context. DirecTV however, argues that section 338(f) does not provide
for broadcaster complaints against a satellite carrier for non-
compliance with provisions concerning content-to-be-carried or material
degradation. Consistent with the general authority invested in the
Commission to implement section 338, we will adjudicate complaints
concerning the material degradation and content-to-be-carried
provisions under the same procedural framework established for the
other satellite carriage provisions of the Act. For the reasons
outlined, we will also assert primary jurisdiction over these matters.
116. We adopt a date certain for when a complaint must be filed
with the Commission. Consistent with the procedural rule for cable
carriage complaints, we will not consider a complaint brought by a
television station if it is filed later than 60 days after a satellite
carrier denies the station's carriage request. In this context, the
denial can be in the affirmative, as in a rejection letter, or by
silence, where a carrier does not respond to a carriage request within
30 days of its receipt. We implement this requirement, pursuant to
section 338(f) of the Act, to facilitate the carriage process and
ensure that television broadcast stations do not delay in enforcing
their rights to the detriment of the satellite carrier.
117. Other Actions. In the Notice, we requested comment on
additional enforcement actions the Commission may impose. Some
broadcasters have stated that the Commission should take into account
any failure to comply with the local carriage requirements when
considering license renewals for satellite carriers. We find that this
issue is a matter better suited for discussion in the context of a
satellite licensing proceeding, not within the confines of a rulemaking
implementing the SHVIA's carriage requirements. We therefore decline to
rule on the merits of the broadcasters' suggestion at this time.
118. ALTV proposes that the Commission require satellite carriers
to file semi-annual reports detailing their efforts to achieve
compliance with section 338 by January 1, 2002. We find that the
statute does not mandate such a requirement. Nevertheless, carriage
compliance information will be useful in updating Congress on the
implementation of the SHVIA. We therefore plan to ask questions
concerning the implementation of section 338 in the Commission's Notice
of Inquiry, preceding the Annual Competition Report to be issued in
2002.
I. Procedural Matters
119. Final Regulatory Flexibility Analysis. As required by the
Regulatory Flexibility Act (``RFA''), see 5 U.S.C. 603, an Initial
Regulatory Flexibility Analysis (``IRFA'') was incorporated into both
the Notice and the Retransmission Consent Notice. The Commission sought
written public comments on the possible significant economic impact of
the proposed policies and rules on small entities in the Notice and the
Retransmission Consent Notice, including comments on the IRFAs.
Pursuant to the RFA, see 5 U.S.C. 604, a Final Regulatory Flexibility
Analysis is contained in this document.
120. Paperwork Reduction Act of 1995 Analysis. This Report and
Order contains new or modified information collection(s) subject to the
Paperwork Reduction Act of 1995 (``PRA''), Public Law 104-13. It will
be submitted to the Office of Management and Budget (``OMB'') for
review under section 3507(d) of the PRA. OMB, the general public, and
other Federal agencies are invited to comment on the new or modified
information collection(s) contained in this proceeding.
Final Regulatory Flexibility Analysis
a. As required by the Regulatory Flexibility Act (``RFA''), an
Initial Regulatory Flexibility Analysis (``IRFA'') was incorporated in
the Notice of Proposed Rulemaking in CS Docket No. 00-96, FCC 00-195
(``Notice'') and in the Notice of Proposed Rulemaking in CS Docket No.
99-363, FCC 99-406 (``Retransmission Consent Notice''). The Commission
sought written public comments on the proposals in both
[[Page 7428]]
Notices, including comment on the IRFAs. No specific comments were
received on the IRFAs. This Final Regulatory Flexibility Analysis
(``FRFA'') conforms to the RFA.
b. Need for, and Objectives of, this Report and Order. Section
338(g) of the Communications Act of 1934, as amended (``Act''), 47
U.S.C. 338(g), directed the Commission, within one year of enactment of
the Satellite Home Viewer Improvement Act of 1999, to ``issue
regulations implementing this section following a rulemaking
proceeding.'' The relevant provisions concern the carriage of all local
television broadcast station signals by satellite carriers commencing
on January 1, 2002. Section 325(b)(3)(C) of the Act, 47 U.S.C.
325(b)(3)(C), also directs the Commission to complete all actions
necessary to prescribe election cycle regulations within one year of
enactment of the Satellite Home Viewer Improvement Act of 1999.
c. Summary of Significant Issues Raised by Public Comments in
Response to the IRFAs. We did not receive any comments in direct
response to the IRFA in CS Docket 00-96. The American Cable Association
commented on the IRFA in CS Docket No. 99-363, but those comments were
directed at the SHVIA's good faith and exclusivity provisions, and did
not concern the election cycle addressed herein.
d. Description and Estimate of the Number of Small Entities to
Which the Rules Will Apply. 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. The RFA 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 Section 3 of the
Small Business Act. Under the Small Business Act, a small business
concern is one which: (1) Is independently owned and operated; (2) is
not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(``SBA''). The rules we adopt affect television station licensees and
satellite carriers.
e. Television Stations: The rules and policies will apply to
television broadcasting licensees, and potential licensees of
television service. The SBA defines a television broadcasting station
that has no more than $10.5 million in annual receipts as a small
business. Television broadcasting stations consist of establishments
primarily engaged in broadcasting visual programs by television to the
public, except cable and other pay television services. Included in
this industry are commercial, religious, educational, and other
television stations. Also included are establishments primarily engaged
in television broadcasting and which produce taped television program
materials. Separate establishments primarily engaged in producing taped
television program materials are classified under another SIC number.
f. Pursuant to 5 U.S.C. 601(3), the statutory definition of a small
business applies ``unless an agency after consultation with the Office
of Advocacy of the SBA and after opportunity for public comment,
establishes one or more definitions of such term which are appropriate
to the activities of the agency and publishes such definition(s) in the
Federal Register.''
g. An element of the definition of ``small business'' is that the
entity not be dominant in its field of operation. We are unable at this
time to define or quantify the criteria that would establish whether a
specific television station is dominant in its field of operation.
Accordingly, the estimates that follow of small businesses to which
rules may apply do not exclude any television station from the
definition of a small business on this basis and are therefore over-
inclusive to that extent. An additional element of the definition of
``small business'' is that the entity must be independently owned and
operated. As discussed further, we could not fully apply this
criterion, and our estimates of small businesses to which rules may
apply may be over-inclusive to this extent. The SBA's general size
standards are developed taking into account these two statutory
criteria. This does not preclude us from taking these factors into
account in making our estimates of the numbers of small entities.
h. There were 1,509 television stations operating in the nation in
1992. That number has remained fairly constant as indicated by the
approximately 1,616 operating television broadcasting stations in the
nation as of September 1999. For 1992, the number of television
stations that produced less than $10.0 million in revenue was 1,155
establishments. Thus, the new rules will affect approximately 1,616
television stations; approximately 77%, or 1,230 of those stations are
considered small businesses. These estimates may overstate the number
of small entities since the revenue figures on which they are based do
not include or aggregate revenues from non-television affiliated
companies.
i. Small Multichannel Video Program Distributors (MVPDs): SBA has
developed a definition of small entities for cable and other pay
television services, which includes all such companies generating $11
million or less in annual receipts. This definition includes cable
system operators, direct broadcast satellite services, multipoint
distribution systems, satellite master antenna systems and subscription
television services. According to the Census Bureau data from 1992,
there were 1,758 total cable and other pay television services and
1,423 had less than $11 million in revenue. We address services
individually to provide a more precise estimate of small entities.
j. DBS: There are four licensees of DBS services under Part 100 of
the Commission's Rules. Three of those licensees are currently
operational. Two of the licensees that are operational have annual
revenues which may be in excess of the threshold for a small business.
The Commission, however, does not collect annual revenue data for DBS
and, therefore, is unable to ascertain the number of small DBS
licensees that could be impacted by these proposed rules. DBS service
requires a great investment of capital for operation, and we
acknowledge that there are entrants in this field that may not yet have
generated $11 million in annual receipts, and therefore may be
categorized as a small business, if independently owned and operated.
k. Home Satellite Delivery (``HSD''): The market for HSD service is
difficult to quantify. Indeed, the service itself bears little
resemblance to other MVPDs. HSD owners have access to more than 265
channels of programming placed on C-band satellites by programmers for
receipt and distribution by MVPDs, of which 115 channels are scrambled
and approximately 150 are unscrambled. HSD owners can watch unscrambled
channels without paying a subscription fee. To receive scrambled
channels, however, an HSD owner must purchase an integrated receiver-
decoder from an equipment dealer and pay a subscription fee to an HSD
programming package. Thus, HSD users include: (1) Viewers who subscribe
to a packaged programming service, which affords them access to most of
the same programming provided to subscribers of other MVPDs; (2)
viewers who receive only non-subscription programming; and (3) viewers
who receive satellite programming services illegally without
subscribing. Because scrambled packages of programming are most
specifically intended for retail
[[Page 7429]]
consumers, these are the services most relevant to this discussion.
l. According to the most recently available information, there are
approximately 30 program packagers nationwide offering packages of
scrambled programming to retail consumers. These program packagers
provide subscriptions to approximately 2,314,900 subscribers
nationwide. This is an average of about 77,163 subscribers per program
package. This is substantially smaller than the 400,000 subscribers
used in the commission's definition of a small MSO. Furthermore,
because this is an average, it is possible that some program packagers
may be smaller.
m. Description of Projected Reporting, Recordkeeping and other
Compliance Requirements. In order to implement the Satellite Home
Viewer Improvement Act of 1999, the Commission will add new rules. We
have adopted a regulatory framework for substantive rules and
procedures concerning satellite broadcast signal carriage similar to,
but separate from, the broadcast signal carriage rules for cable
operators. There are certain compliance requirements involving the
satellite broadcast signal carriage process. Foremost is that satellite
carriers will have to carry all local television stations in a given
market, subject to certain limited exceptions, if it decides to carry
at least one signal in a market. There will be costs relating to the
time and effort involved in carrying these local broadcast signals.
n. In terms of recordkeeping, entities will likely have to keep a
record of their election status and entities may be required to
maintain such information within their business environment and may
also have to file such information with the Commission. These records
are uncomplicated and are inexpensive to produce and maintain.
o. Steps Taken to Minimize Significant Impact on Small Entities,
and Significant Alternatives Considered. The RFA requires an agency to
describe any significant alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives, among others: (i) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (ii) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (iii) the use
of performance, rather than design, standards; and (iv) an exemption
from coverage of the rule, or any part thereof, for small entities.
p. As indicated, the Report and Order implements certain aspects of
the Satellite Home Viewer Improvement Act of 1999. Among other things,
the new legislation requires satellite carriers to carry all local
television broadcast stations in a market, if it carries any local
market television stations, by January 1, 2002. This document also
discusses implementing regulations relating to the scope and substance
of local broadcast signal carriage by satellite carriers, including the
establishment of an election cycle process for broadcasters vis-a-vis
satellite carriers. The rules adopted were required by Congress. Where
there was discretion to consider alternatives, as in the case of
notification requirements to commence carriage, the Commission chose to
place the notice burden on broadcast stations rather than satellite
carriers. In making this decision, the Commission recognized that there
are only two affected satellite carriers while there are almost 500
television stations at issue. This legislation applies to small
entities and large entities equally.
q. Report to Congress: The Commission will send a copy of the
Report and Order, including this FRFA, in a report to be sent to
Congress pursuant to the Congressional Review Act. In addition, the
Commission will send a copy of the Report and Order, including the
FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the
Report and Order and FRFA (or summaries thereof) will be published in
the Federal Register.
Paperwork Reduction Act
This Report and Order contains a new or modified information
collection. The Commission, as part of its continuing effort to reduce
paperwork burdens, invites the general public to comment on the
information collection(s) contained in this Report and Order as
required by the Paperwork Reduction Act of 1995, Public Law 104-13.
Public and agency comments are due March 26, 2001. Comments should
address: (a) Whether the new or modified collection of information is
necessary for the proper performance of the functions of the
Commission, including whether the information shall have practical
utility; (b) the accuracy of the Commission's burden estimates; (c)
ways to enhance the quality, utility, and clarity of the information
collected; and (d) ways to minimize the burden of the collection of
information on the respondents, including the use of automated
collection techniques or other forms of information technology.
OMB Control Number: 3060-xxxx.
Title: Implementation of the Satellite Home Viewer Improvement Act
of 1999: Broadcast Signal Carriage Issues/Retransmission Consent
Issues.
Type of Review: New collection or revision of existing collection.
Respondents: Business or other for-profit entities.
Number of Respondents: Satellite carriers and television broadcast
licensees: 900.
Estimated Time Per Response: 1 hour.
Total Annual Burden: 2700 hours.
Cost to Respondents: $14,400.00.
Needs and Uses: Congress directed the Commission to adopt
regulations that apply broadcast signal carriage requirements to
satellite carriers pursuant to the changes outlined in the Satellite
Home Viewer Improvement Act of 1999. The availability of such
information will serve the purpose of informing the public of the
method of broadcast signal carriage. In addition, the information is
needed so that local broadcast stations can assert their carriage
rights within their local markets.
IV. Ordering Clauses
121. Pursuant to sections 4(i) 4(j), 303(r), 325, 338, 614, and 615
of the Communications Act of 1934, as amended, 47 U.S.C. 154(i),
154(j), 303(r), 325, 338, 534, and 535, the Commission's rules are
hereby amended as set forth in this document.
122. The Consumer Information Bureau, Reference Information Center
shall send a copy of this Report and Order, including the Final
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of
the Small Business Administration.
123. The rules adopted in this Report and Order shall take effect
January 23, 2001.
List of Subject in 47 CFR Part 76
Cable television, Multichannel video and cable television service.
Federal Communications Commission.
Shirley Suggs,
Chief, Publications Group.
Rule Changes
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 76 as follows:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
1. The authority citation for part 76 is revised to read as
follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 338, 339, 503, 521, 522, 531,
532,
[[Page 7430]]
533, 534, 535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554,
556, 558, 560, 561, 571, 572, 573.
2. Section 76.66 is added to Subpart D to read as follows:
Sec. 76.66 Satellite Broadcast Signal Carriage.
(a) Definitions.--(1) Satellite carrier. A satellite carrier is an
entity that uses the facilities of a satellite or satellite service
licensed by the Federal Communications Commission, and operates in the
Fixed-Satellite Service under part 25 of title 47 of the Code of
Federal Regulations or the Direct Broadcast Satellite Service under
part 100 of title 47 of the Code of Federal Regulations, to establish
and operate a channel of communications for point-to-multipoint
distribution of television station signals, and that owns or leases a
capacity or a service on a satellite in order to provide such point-to-
multipoint distribution, except to the extent that such entity provides
such distribution pursuant to tariff under the Communications Act of
1934, other than for private home viewing.
(2) Secondary transmission. A secondary transmission is the further
transmitting of a primary transmission simultaneously with the primary
transmission.
(3) Subscriber. A subscriber is a person who receives a secondary
transmission service from a satellite carrier and pays a fee for the
service, directly or indirectly, to the satellite carrier or to a
distributor.
(4) Television broadcast station. A television broadcast station is
an over-the-air commercial or noncommercial television broadcast
station licensed by the Commission under subpart E of part 73 of title
47, Code of Federal Regulations, except that such term does not include
a low-power or translator television station.
(5) Television network. For purposes of this section, a television
network is an entity which offers an interconnected program service on
a regular basis for 15 or more hours per week to at least 25 affiliated
broadcast stations in 10 or more States.
(6) Local-into-local television service. A satellite carrier is
providing local-into-local service when it retransmits a local
television station signal back into the local market of that television
station for reception by subscribers.
(b) Signal carriage obligations. (1) Each satellite carrier
providing, under section 122 of title 17, United States Code, secondary
transmissions to subscribers located within the local market of a
television broadcast station of a primary transmission made by that
station, shall carry upon request the signals of all television
broadcast stations located within that local market, subject to section
325(b) of title 47, United States Code, and other paragraphs in this
section.
(2) No satellite carrier shall be required to carry local
television broadcast stations, pursuant to this section, until January
1, 2002.
(c) Election cycle. In television markets where a satellite carrier
is providing local-into-local service, a commercial television
broadcast station may elect either retransmission consent, pursuant to
section 325 of title 47 United States Code, or mandatory carriage,
pursuant to section 338, title 47 United States Code.
(1) The first retransmission consent-mandatory carriage election
cycle shall be for a four-year period commencing on January 1, 2002 and
ending December 31, 2005.
(2) The second retransmission consent-mandatory carriage election
cycle, and all cycles thereafter, shall be for a period of three years
(e.g. the second election cycle commences on January 1, 2006 and ends
at midnight on December 31, 2008).
(3) A commercial television station must notify a satellite
carrier, by July 1, 2001, of its retransmission consent-mandatory
carriage election for the first election cycle commencing January 1,
2002.
(4) Except as provided in paragraphs (d)(2) and (d)(3) of this
section, local commercial television broadcast stations shall make
their retransmission consent-mandatory carriage election by October 1st
of the year preceding the new cycle for all election cycles after the
first election cycle.
(5) A noncommercial television station must request carriage by
July 1, 2001 for the first election cycle and must renew its carriage
request at the same time a commercial television station must make its
retransmission consent-mandatory carriage election for all subsequent
cycles.
(d) Carriage procedures. (1) Carriage requests. (i) A
retransmission consent-mandatory carriage election made by a television
broadcast station shall be treated as a request for carriage for
purposes of this section.
(ii) A carriage request made by a television station must be in
writing and sent to the satellite carrier's principal place of
business, by certified mail, return receipt requested.
(iii) A television station's written notification shall include
the:
(A) Station's call sign;
(B) Name of the appropriate station contact person;
(C) Station's address for purposes of receiving official
correspondence;
(D) Station's community of license;
(E) Station's DMA assignment; and
(F) For commercial television stations, its election of mandatory
carriage or retransmission consent.
(iv) Within 30 days of receiving a television station's carriage
request, a satellite carrier shall notify in writing:
(A) those local television stations it will not carry, along with
the reasons for such a decision; and
(B) those local television stations it intends to carry.
(v) A satellite carrier is not required to carry a television
station, for the duration of the election cycle, if the station fails
to assert its carriage rights by the deadlines established in this
section.
(2) New local-into-local service. (i) A new satellite carrier or a
satellite carrier providing local service in a market for the first
time on or after July 1, 2001, must notify local television stations of
its intent to provide local-into-local service at least 60 days before
it intends to provide service or decides to enter into a new television
market. This notification shall include information on the location of
the satellite carrier's designated local receive facility in that
particular market.
(ii) A local television station shall make its request for
carriage, in writing, no more than 30 days after receipt of the
satellite carrier's notice.
(iii) A satellite carrier shall have 90 days, from the receipt of a
request for carriage, to commence carriage of a local television
station.
(iv) A satellite carrier shall notify a local television station in
writing of its reasons for refusing carriage within 30 days of the
station's carriage request.
(3) New television stations. (i) A television station providing
over-the-air service in a market for the first time on or after July 1,
2001, shall be considered a new television station for satellite
carriage purposes.
(ii) A new television station shall make its request for carriage
between 60 days prior to commencing broadcasting and 30 days after
commencing broadcasting.
(iii) A satellite carrier shall commence carriage within 90 days of
receiving the request for carriage from the television broadcast
station or whenever the new television station provides over-the-air
service.
(iv) A satellite carrier shall notify a new television station in
writing of its reasons for refusing carriage within 30 days of the
station's carriage request.
(e) Market definitions. (1) A local market, in the case of both
commercial
[[Page 7431]]
and noncommercial television broadcast stations, is the designated
market area in which a station is located, and (i) in the case of a
commercial television broadcast station, all commercial television
broadcast stations licensed to a community within the same designated
market area within the same local market; and
(ii) in the case of a noncommercial educational television
broadcast station, the market includes any station that is licensed to
a community within the same designated market area as the noncommercial
educational television broadcast station.
(2) A designated market area is the market area, as determined by
Nielsen Media Research and published in the 1999-2000 Nielsen Station
Index Directory and Nielsen Station Index United States Television
Household Estimates or any successor publication.
(3) A satellite carrier shall use the 1999-2000 Nielsen Station
Index Directory and Nielsen Station Index United States Television
Household Estimates to define television markets for the first
retransmission consent-mandatory carriage election cycle commencing on
January 1, 2002 and ending on December 31, 2005. The 2003-2004 Nielsen
Station Index Directory and Nielsen Station Index United States
Television Household Estimates shall be used for the second
retransmission consent-mandatory carriage election cycle commencing
January 1, 2006 and ending December 31, 2008, and so forth for each
triennial election pursuant to this section. Provided, however, that a
county deleted from a market by Nielsen need not be subtracted from a
market in which a satellite carrier provides local-into-local service,
if that county is assigned to that market in the 1999-2000 Nielsen
Station Index Directory or any subsequent issue of that publication.
(4) A local market includes all counties to which stations assigned
to that market are licensed.
(f) Receive facilities. (1) A local receive facility is the
reception point in each local market which a satellite carrier
designates for delivery of the signal of the station for purposes of
retransmission.
(2) A satellite carrier may establish another receive facility to
serve a market if the location of such a facility is acceptable to at
least one-half the stations with carriage rights in that market.
(3) Except as provided in 76.66(d)(2), a satellite carrier
providing local-into-local service must notify local television
stations of the location of the receive facility by June 1, 2001 for
the first election cycle and at least 120 days prior to the
commencement of all election cycles thereafter.
(4) A satellite carrier may relocate its local receive facility at
the commencement of each election cycle. A satellite carrier is also
permitted to relocate its local receive facility during the course of
an election cycle, if it bears the signal delivery costs of the
television stations affected by such a move. A satellite carrier
relocating its local receive facility must provide 60 days notice to
all local television stations carried in the affected television
market.
(g) Good quality signal. (1) A television station asserting its
right to carriage shall be required to bear the costs associated with
delivering a good quality signal to the designated local receive
facility of the satellite carrier or to another facility that is
acceptable to at least one-half the stations asserting the right to
carriage in the local market.
(2) To be considered a good quality signal for satellite carriage
purposes, a television station shall deliver to the local receive
facility of a satellite carrier either a signal level of -45dBm for UHF
signals or -49dBm for VHF signals at the input terminals of the signal
processing equipment.
(3) A satellite carrier is not required to carry a television
station that does not agree to be responsible for the costs of
delivering a good quality signal to the receive facility.
(h) Duplicating signals. (1) A satellite carrier shall not be
required to carry upon request the signal of any local television
broadcast station that substantially duplicates the signal of another
local television broadcast station which is secondarily transmitted by
the satellite carrier within the same local market, or the signals of
more than one local commercial television broadcast station in a single
local market that is affiliated with a particular television network
unless such stations are licensed to communities in different States.
(2) A satellite carrier may select which duplicating signal in a
market it shall carry.
(3) A satellite carrier may select which network affiliate in a
market it shall carry.
(4) A satellite carrier is permitted to drop a local television
station whenever that station meets the substantial duplication
criteria set forth in this paragraph. A satellite carrier must add a
television station to its channel line-up if such station no longer
duplicates the programming of another local television station.
(5) A satellite carrier shall provide notice to its subscribers,
and to the affected television station, whenever it adds or deletes a
station's signal in a particular local market pursuant to this
paragraph.
(6) A commercial television station substantially duplicates the
programming of another commercial television station if it
simultaneously broadcasts the identical programming of another station
for more than 50 percent of the broadcast week.
(7) A noncommercial television station substantially duplicates the
programming of another noncommercial station if it simultaneously
broadcasts the same programming as another noncommercial station for
more than 50 percent of prime time, as defined by Sec. 76.5(n), and
more than 50 percent outside of prime time over a three month period,
Provided, however, that after three noncommercial television stations
are carried, the test of duplication shall be whether more than 50
percent of prime time programming and more than 50 percent outside of
prime time programming is duplicative on a non-simultaneous basis.
(i) Channel positioning. (1) No satellite carrier shall be required
to provide the signal of a local television broadcast station to
subscribers in that station's local market on any particular channel
number or to provide the signals in any particular order, except that
the satellite carrier shall retransmit the signal of the local
television broadcast stations to subscribers in the stations' local
market on contiguous channels.
(2) The television stations subject to this paragraph include those
carried under retransmission consent.
(3) All local television stations carried under mandatory carriage
in a particular television market must be offered to subscribers at
rates comparable to local television stations carried under
retransmission consent in that same market.
(4) Within a market, no satellite carrier shall provide local-into-
local service in a manner that requires subscribers to obtain
additional equipment at their own expense or for an additional carrier
charge in order to obtain one or more local television broadcast
signals if such equipment is not required for the receipt of other
local television broadcast signals.
(5) All television stations carried under mandatory carriage, in a
particular market, shall be presented to subscribers in the same manner
as television stations that elected retransmission consent, in that
same market, on any navigational device, on-
[[Page 7432]]
screen program guide, or menu provided by the satellite carrier.
(j) Manner of carriage. (1) Each television station carried by a
satellite carrier, pursuant to this section, shall include in its
entirety the primary video, accompanying audio, and closed captioning
data contained in line 21 of the vertical blanking interval and, to the
extent technically feasible, program-related material carried in the
vertical blanking interval or on subcarriers. For noncommercial
educational television stations, a satellite carrier must also carry
any program-related material that may be necessary for receipt of
programming by persons with disabilities or for educational or language
purposes. Secondary audio programming must also be carried. Where
appropriate and feasible, satellite carriers may delete signal
enhancements, such as ghost-canceling, from the broadcast signal and
employ such enhancements at the local receive facility.
(2) A satellite carrier, at its discretion, may carry any ancillary
service transmission on the vertical blanking interval or the aural
baseband of any television broadcast signal, including, but not limited
to, multichannel television sound and teletext.
(k) Material degradation. Each local television station whose
signal is carried under mandatory carriage shall, to the extent
technically feasible and consistent with good engineering practice, be
provided with the same quality of signal processing provided to
television stations electing retransmission consent. A satellite
carrier is permitted to use reasonable digital compression techniques
in the carriage of local television stations.
(l) Compensation for carriage. (1) A satellite carrier shall not
accept or request monetary payment or other valuable consideration in
exchange either for carriage of local television broadcast stations in
fulfillment of the mandatory carriage requirements of this section or
for channel positioning rights provided to such stations under this
section, except that any such station may be required to bear the costs
associated with delivering a good quality signal to the receive
facility of the satellite carrier.
(2) A satellite carrier may accept payments from a station pursuant
to a retransmission consent agreement.
(m) Remedies. (1) Whenever a local television broadcast station
believes that a satellite carrier has failed to meet its obligations
under this section, such station shall notify the carrier, in writing,
of the alleged failure and identify its reasons for believing that the
satellite carrier failed to comply with such obligations.
(2) The satellite carrier shall, within 30 days after such written
notification, respond in writing to such notification and comply with
such obligations or state its reasons for believing that it is in
compliance with such obligations.
(3) A local television broadcast station that disputes a response
by a satellite carrier that it is in compliance with such obligations
may obtain review of such denial or response by filing a complaint with
the Commission, in accordance with Sec. 76.7 of title 47, Code of
Federal Regulations. Such complaint shall allege the manner in which
such satellite carrier has failed to meet its obligations and the basis
for such allegations.
(4) The satellite carrier against which a complaint is filed is
permitted to present data and arguments to establish that there has
been no failure to meet its obligations under this section.
(5) The Commission shall determine whether the satellite carrier
has met its obligations under this section. If the Commission
determines that the satellite carrier has failed to meet such
obligations, the Commission shall order the satellite carrier to take
appropriate remedial action. If the Commission determines that the
satellite carrier has fully met the requirements of this section, it
shall dismiss the complaint.
(6) The Commission will not accept any complaint filed later than
60 days after a satellite carrier, either implicitly or explicitly,
denies a television station's carriage request.
[FR Doc. 01-1186 Filed 1-22-01; 8:45 am]
BILLING CODE 6712-01-U