United States: Recent FCC Actions Affecting Cable Television Systems, Programmers, And Broadcast Stations

Last Updated: January 4 2008

In this client advisory, Thelen reviews several recent FCC actions affecting cable television systems, cable programmers, and broadcast stations:

  1. Cable systems are required to provide subscribership information under the 70/70 rule to determine whether the FCC has authority to impose additional programming regulations such as a la carte.
  2. The leased access rules are amended to expand programmers' rights, and comments are sought regarding further changes to the leased access rules.
  3. The FCC, in a split decision, requires Cablevision to carry WRNN in new communities reached by the expanded WRNN DTV signal, and sets a precedent for how the FCC will apply the must-carry rules to expanded DTV coverage areas.
  4. Carriage of television signals without material degradation and availability of television signals after the DTV transition are defined, and comments are sought on application of the rules to retransmission agreements, channel placement, and reformatting.
  5. Exclusive service contracts with MDUs and other real estate developments are prohibited, and comments are sought on prohibiting exclusive marketing and bulk billing contracts.
  6. Pole attachment regulations are proposed to be amended to establish a higher rate for attachments used to provide cable modem service, conform the cable and telephone attachment rates, set rates for wireless attachments, and revise the access and complaint rules.

1. Cable systems are required to provide subscribership information under the 70/70 rule to determine whether the FCC has authority to impose additional programming regulations such as a la carte.

As part of the FCC's 13th Annual Report to Congress on Video Competition, the FCC decided to require cable television systems to file subscribership information that will determine whether the 70/70 test has been met. Meeting the 70/70 test would allow the FCC to impose additional program regulations on cable television operators. Rule changes may encourage or require a la carte program offerings. A la carte programming, if required, would significantly affect the economics of program carriage for both cable television systems and cable programmers.

The 70/70 rule provides, "At such time as cable systems with 36 or more activated channels are available to 70 percent of households within the United States and are subscribed to by 70 percent of the households to which such systems are available," the FCC may impose additional rules, "necessary to provide diversity of information sources." The FCC considered whether the 13th Annual Report should include a finding that the 70/70 test has been met based upon information from one source. The FCC was prepared to find that cable systems cover 70 percent of households but not that 70 percent of the homes passed subscribe to cable.

In order to determine whether the second prong of the 70/70 test has been met, the 13th Annual Report will require each cable operator to submit the following information for 2006 under penalty of perjury: 1) the total number of homes the cable operator currently passes; 2) the total number of homes the cable operator currently passes with 36 or more activated channels; 3) the total number of subscribers; and 4) the total number of subscribers with 36 or more activated channels. Although the FCC issued a News Release on November 27 stating that the information must be filed within 60 days, cable operators will not be expected to file the information until the 13th Annual Report is released by the FCC and a form for filing the subscribership information is approved by OMB.

The FCC also voted to adopt a Notice of Inquiry (NOI) for its 14th Annual Report on Video Competition. The text of the NOI has not been released. The NOI may invite comment on proposals to increase program diversity in the event that the 70/70 test is met.

2. The leased access rules are amended to expand programmers' rights, and comments are sought regarding further changes to the leased access rules.

The FCC voted to adopt an Order (FCC 07-208) that will amend the rules on leased access to cable television system channels to make it easier for cable programmers to lease channels. The order will include a Further Notice of Proposed Rule Making (FNPRM) requesting comment on application of the revised rules to program length commercials and sales presentations.

The text of the Order and FNPRM has not been released. According to an FCC News Release, the leased access rule amendments were adopted by the FCC, "in response to comments from leased access programmers regarding slow response times to information requests and excessive rates and fees." The FCC states that the leased access rule amendents will include, "more appropriate leased access rates" as well as, "more specific leased access customer service standards" with "faster cable operator response times" and "increased enforcement." The FCC said its Order also "expedites the leased access complaint process and improves the discovery process related to leased access disputes." The FCC relies upon its existing authority to regulate leased access, and the order is not subject to the outcome of the 70/70 subscribership test.

3. The FCC, in a split decision, requires Cablevision to carry WRNN in new communities reached by the expanded WRNN DTV signal, and sets a precedent for how the FCC will apply the must-carry rules to expanded DTV coverage areas.

The FCC issued a Memorandum Opinion and Order (FCC 07-151) that directs Cablevision Systems Corporation (Cablevision) to commence carriage of WRNN television on cable television systems operated by Cablevision on Long Island, New York. The decision indicates that the FCC is likely to require must-carry of television stations in additional cable television communities where television stations gain increased coverage as a result of the conversion to digital television (DTV).

WRNN is licensed to Kingston, New York, a community located over 50 miles north of New York City. WRNN is a full power television station that runs news programming and identifies itself as "RNN." As part of the conversion to digital television, WRNN relocated its transmitter site south, towards New York City and Long Island. From its new transmitter site, WRNN began placing an improved signal over cable television communities served by Cablevision in Nassau and Suffolk Counties on Long Island. When WRNN requested must-carry on Cablevision systems on Long Island, Cablevision refused. WRNN filed a must-carry complaint with the FCC; the complaint was granted by the Media Bureau and affirmed on reconsideration by the full Commission. WRNN operates its DTV station on UHF channel 48. The Order requires WRNN to provide specialized equipment to Cablevision at WRNN's expense to enable Cablevision to receive a good quality signal at the headend.

The FCC split 3/2 in reaching its decision with the majority voting to require carriage and with the minority writing a joint dissent. At issue was the application of the statutory test in the Communications Act for determining a broadcasting station's market for purposes of the must-carry requirement. The majority based its decision on the new coverage contour of WRNN-DT and that Verizon had commenced carriage of WRNN on its FIOS systems in the area. The minority stressed that WRNN historically has not been carried on the Cablevision systems. The majority also rejected the constitutional arguments of Cablevision based on the First Amendment and the Takings Clause, finding that the must-carry rules previously have been upheld by the U.S. Supreme Court.

4. Carriage of television signals without material degradation and availability of television signals after the DTV transition are defined, and comments are sought on application of the rules to retransmission agreements, channel placement, and reformatting.

The FCC released its Third Report and Order and Third Further Notice of Proposed Rule Making on cable television system carriage of digital television broadcast signals (FCC 07-170). The Order adopts rule amendments to define the requirement that broadcast television signals be carried without material degradation. The Order also imposes signal carriage obligations to enable cable subscribers with analog television sets to continue to be able to use those sets for three years after the DTV transition on January 17, 2009.

With regard to the material degradation standard, the FCC determined to continue imposing a comparative standard with two requirements; first, that the broadcast signals not be carried in a lesser format or lower resolution than any other signal on the system; and, second, that the cable signal when compared to the broadcast signal not be perceptibly different to the viewer. The FCC also continued the requirement that HD signals be carried in HD. The FCC decided not to adopt its proposals to require carriage of all bits contained in the primary video stream and program related content, and decided not to impose a mandatory negotiation process for cable television systems that do not wish to carry all such bits. The Further Notice of Proposed Rule Making seeks comment on whether the material degradation standard should apply only to must-carry stations or also to stations, carried under retransmission consent agreements.

With regard to carriage of broadcast signals after the DTV transition, the FCC requires cable television systems with analog channel service to convert broadcast digital television signals to analog for delivery to analog subscribers. For all-digital cable systems, the FCC requires cable television operators to provide subscribes who have analog television sets with a converter box that enables the subscriber to view digital broadcast signals on their analog television sets. These requirements will be in effect for three years, until January 17, 2012. While the requirements are in effect, both the analog and digital versions of television broadcast signals can be counted toward the 1/3 cap on must-carry obligations. The Further Notice of Proposed Rule Making seeks comment on how the channel placement rules should apply to the analog versions of digital television signals, and how digital signals with a 16:9 aspect ratio should be re-formatted for viewing on analog sets with a 4:3 aspect ratio.

5. Exclusive service contracts with MDUs and other real estate developments are prohibited, and comments are sought on prohibiting exclusive marketing and bulk billing contracts.

The FCC released an Order (FCC 07-189) that prohibits exclusive service contracts between cable television system operators and owners of multiple dwelling units (MDUs). The Order includes a Further Notice of Proposed Rulemaking (FNPRM) that requests comment on additional rule changes to prohibit exclusive marketing and bulk billing contracts. The Order will become effective and comments in response to the FNPRM will be due 30 days after Federal Register publication.

The Order prohibits the enforcement of existing exclusivity clauses and prohibits signing new exclusivity clauses. In adopting the Order, the FCC relied upon its statutory authority to adopt regulations to prohibit "unfair or deceptive acts or practices" by cable operators that "hinder significantly or prevent" other multichannel video program distributors from providing cable programming to subscribers. The FCC found that exclusivity clauses are used primarily by cable television system operators, and that these clauses have inhibited the roll-out of competitive services by "fiber-deploying LECs."

For purposes of the FCC rules, MDUs include not only apartment, cooperative, and condominium buildings, but also gated communities, mobile home parks, garden apartments, and other "centrally managed residential real estate developments." The FCC estimates that, "30 percent of Americans live in MDUs, and their numbers are growing." Thus, the order has the potential to impact a significant portion of cable television subscribers.

The FNPRM seeks comment on whether the FCC also should prohibit cable operators from enforcing existing or entering into new exclusive marketing clauses and bulk billing arrangements, particularly bulk billing arrangements where residents must continue to pay the bulk fee when they select an alternative provider. The FCC also requests comment on whether the FCC has authority to prohibit DBS providers from using exclusivity clauses.

6. Pole attachment regulations are proposed to be amended to establish a higher rate for attachments used to provide cable modem service, conform the cable and telephone attachment rates, set rates for wireless attachments, and revise the access and complaint rules.

The FCC adopted a wide-ranging Notice of Proposed Rulemaking (NPRM) (FCC 07-187) with regard to its pole attachment regulations. The FCC pole attachment regulations also apply to conduits and rights-of-way. While the FCC rules do not apply in states that have chosen to regulate pole attachments at the state level, the FCC rules often influence state pole attachment rules and proceedings. The FCC adopted the NPRM in response to petitions filed in 2005 by the United States Telephone Association (USTA) and Fibertech Networks, LLC.

The FCC "tentatively concludes" that the rate for attachments used to provide cable modem service should be increased from the cable television attachment rate to a rate not more than the telephone attachment rate. The FCC expresses the view that all providers of broadband Internet access should pay the same rate for attachments in order to level the competitive playing fields and requests comment on its tentative conclusions. The FCC also expresses concern about the disparity between the cable television and telephone attachment rates, and requests comment on FCC authority to revise the existing cable and telephone rates to conform the two rates due to the convergence of cable television and telephone services.

The NPRM also contains a wide-ranging request for comments on other aspects of the pole attachment regulations, such as how to determine when poles are at capacity, make ready, and complaint procedures. Comments will be due 30 days after publication of the NPRM in the Federal Register.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
In association with
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
Accounting and Audit
Anti-trust/Competition Law
Consumer Protection
Corporate/Commercial Law
Criminal Law
Employment and HR
Energy and Natural Resources
Environment
Family and Matrimonial
Finance and Banking
Food, Drugs, Healthcare, Life Sciences
Government, Public Sector
Immigration
Insolvency/Bankruptcy, Re-structuring
Insurance
Intellectual Property
International Law
Litigation, Mediation & Arbitration
Media, Telecoms, IT, Entertainment
Privacy
Real Estate and Construction
Strategy
Tax
Transport
Wealth Management
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.