[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29443]


[[Page Unknown]]

[Federal Register: December 5, 1994]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[MM Docket No. 92-259; FCC 94-251]

 

Cable Act of 1992--Must-Carry and Retransmission Consent 
Provisions

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In response to petitions for reconsideration, and in order to 
complete the implementation of the must-carry and retransmission 
consent provisions of the Cable Television Consumer Protection and 
Competition Act of 1992 and to clarify the obligations of cable 
operators and broadcasters, this Memorandum Opinion and Order amends 
the Commission's rules regarding must-carry and retransmission consent.

EFFECTIVE DATE: The stay of Sec. 76.62(a) and Sec. 76.64(e) is lifted 
and the revisions of those paragraphs is effective January 4, 1995. 
Other rule provisions of Part 76 are effective January 4, 1995. Rule 
provisions of Part 73 shall be effective upon approval from OMB. We 
will issue a notice at a later date stating that such approval has been 
granted.

FOR FURTHER INFORMATION CONTACT:
Elizabeth W. Beaty or Meryl S. Icove, Cable Services Bureau, (202) 416-
0800.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Memorandum Opinion and Order in MM Docket 92-259, FCC 94-251, adopted 
September 28, 1994, and released November 4, 1994. The complete text of 
this document is available for inspection and copying during normal 
business hours in the FCC Reference Center, 1919 M St., N.W., 
Washington, D.C., and also may be purchased from the Commission's copy 
contractor, International Transcription Service, (ITS), at 2100 M St., 
N.W., Washington, D.C. 20037, (202) 857-3800.

Synopsis of the Memorandum Opinion and Order

I. Introduction

    1. This Memorandum Opinion and Order addresses issues raised in 
petitions for reconsideration of our Report and Order adopted March 11, 
1993, 58 FR 17350 (4/2/93) which established rules to implement the 
mandatory television broadcast signal carriage (``must-carry'') and 
retransmission consent provisions of the Cable Television Consumer 
Protection and Competition Act of 1992 (``1992 Cable Act''). In a 
Clarification Order adopted on May 28, 1993, 58 FR 32449 (6/10/93), we 
addressed specific concerns raised in these petitions relating to 
signal quality, copyright indemnification and translator ownership. In 
an Order adopted on July 15, 1993, 58 FR 40366 (7/28/93), we addressed 
additional concerns relating to carriage rights, to the failure of 
broadcast stations to elect either must-carry or retransmission consent 
status, and to the channel position for such stations. On October 5, 
1993, we adopted a Stay Order, 58 FR 53429 (10/15/93), which stayed two 
provisions of the retransmission consent rules, with respect to VHF/UHF 
antenna ownership and carriage in the entirety of broadcast signals, 
pending our resolution of those issues in this proceeding. In this 
Memorandum Opinion and Order we will address all remaining issues 
raised in the petitions for reconsideration, as well as the outstanding 
issues from the Stay Order. We will also take this opportunity, on our 
own motion, to clarify certain other issues raised in the Report and 
Order.
    2. We note that the constitutionality of the must-carry provisions 
of the 1992 Cable Act were challenged before the Supreme Court. In 
Turner Broadcasting Systems, Inc. v. FCC, a special three-judge panel 
of the District Court found the must-carry provisions constitutional. 
On appeal, the Supreme Court vacated the decision and remanded the case 
back to the three-judge panel for further proceedings. While the case 
is pending, the must-carry provisions of the 1992 Cable Act remain in 
effect, as do the Commission's must-carry rules.

II. Must-Carry Regulations

A. Carriage of Local Noncommercial Educational Television Stations
    1. Definition of a Qualified Noncommercial Station.
    3. Section 615(l)(1) provides that a local noncommercial 
educational television (``NCE'') station qualifies for must-carry 
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.\1\ An NCE 
station is also considered qualified if it is owned and operated by a 
municipality and transmits predominantly noncommercial programs for 
educational purposes.\2\ For purposes of must-carry rights, an NCE 
station is considered local if its community of license is within 50 
miles of, or its signal places a Grade B contour over, the principal 
headend of the cable system. This definition includes the translator of 
any NCE station with five watts or higher power serving the franchise 
area, a full-service station or translator licensed to a channel 
reserved for noncommercial educational use, and such stations and 
translators operating on channels not so reserved as the Commission 
determines are qualified NCE stations.
---------------------------------------------------------------------------

    \1\All references to Section 614, Section 615 and Section 325 
are references to those sections of the Communications Act of 1934, 
as amended by the 1992 Cable Act, Sections 4, 5 and 6.
    \2\In defining a qualified noncommercial educational television 
station, Sec. 76.55(a)(2) incorrectly refers to Sec. 73.612 rather 
than Sec. 73.621. We are revising Sec. 76.55(a)(2) to refer to 
Sec. 73.621.
---------------------------------------------------------------------------

    4. The staff has received informal inquiries requesting 
clarification as to when a translator is ``serving the franchise area'' 
of the cable system. Because the service area of a translator differs 
from that of a full power broadcast station, we believe that guidance 
should be provided to assist interested parties in determining whether 
a translator serves the franchise area of the cable system. We believe 
it appropriate to adopt a standard based on coverage and contour, which 
has been used in the past and which should be easily identifiable. 
Therefore, for purposes of a translator serving the cable system's 
franchise area, the coverage area of such translator shall be its 
predicted protected contour as specified in Sec. 74.707 of our rules.
    2. Signal Carriage Obligations.
    5. In the Report and Order, we indicated that Section 615(b) 
requires cable systems to carry any qualified local NCE television 
station requesting carriage. Systems with 12 or fewer activated 
channels must carry the signal of one qualified local NCE station. 
Systems with 13 to 36 activated channels must carry at least one 
qualified local NCE station, but need not carry more than three such 
stations. Cable systems with more than 36 activated channels are 
generally required to carry all NCE stations requesting carriage. If a 
system with fewer than 36 activated channels operates beyond the 
presence of a qualified local NCE station, it is required to import and 
carry a qualified NCE station. In addition, cable systems must continue 
to provide carriage to all qualified local NCE television stations 
whose signals were carried on their systems as of March 29, 1990, 
regardless of the proximity of those stations to the system's principal 
headend.
    6. First, on our own motion, we clarify the carriage requirements 
of a system with more than 36 activated channels. The 1992 Cable Act 
states that systems with more than 36 channels must carry the signal of 
all NCE stations requesting carriage, with one exception: systems with 
more than 36 channels are not required to carry an additional local NCE 
station if the programming of such station substantially duplicates the 
programming of a qualified local NCE station already being carried. It 
has come to our attention that Sec. 76.56(a)(1)(iii) of the 
Commission's rules as adopted in the Report and Order has been 
interpreted by some cable operators to require that only three stations 
need be carried. However, with respect to systems with more than 36 
channels, we clarify that the reference to the number three is a 
minimum, not a maximum number. A system with more than 36 channels must 
carry all NCE stations requesting carriage, but is not required to 
carry more than three NCE stations if the additional station 
substantially duplicates the signal of NCE stations already carried by 
the system. Section 76.56(a)(1)(iii) is being revised accordingly.
    7. Second, we emphasize that the requirement in Section 615(c) to 
continue carriage of stations carried as of March 29, 1990 applies only 
to qualified local NCE television stations and does not apply to a non-
local NCE television station which was being imported as of that date. 
A cable system which was carrying a non-local NCE station in excess of 
its mandatory carriage requirements is permitted to drop that station, 
subject to giving appropriate notice. However, if a cable system which 
would be required to import a NCE signal pursuant to Section 615 
(b)(3)(B) or (b)(2)(B) was importing a non-local qualified NCE station 
on March 29, 1990, the system is required to continue carriage of such 
station. Prior carriage of the non-local NCE station generally 
indicates that a good quality signal is received at the cable system's 
headend. In addition, where the cable system voluntarily had been 
importing such signal prior to March 29, 1990, the continued carriage 
of such station will not result in additional copyright liability for 
the cable system. In the event a local NCE station subsequently becomes 
qualified, the cable operator may drop the distant signal (subject to 
notification requirements) and substitute the qualified local NCE 
station. Section 76.56(a)(5) is being revised accordingly.
    8. Although the Act generally does not require copyright liability 
to be paid by a cable operator for the carriage of local NCE station 
signal added after March 29, 1990, in the case of importation, the non-
local NCE station has neither must-carry nor retransmission rights. We 
do not believe it appropriate for a non-local NCE station which is 
being imported to be required to reimburse the cable operator for 
copyright costs. The 1992 Cable Act specifically provides that a cable 
system can recover such costs as part of the basic service tier rate, 
and we believe that this is the appropriate manner for dealing with 
such costs.
B. Carriage of Local Commercial Television Stations
    1. General Signal Carriage Requirements.
    9. Small System Exception. Section 614(a) requires carriage of 
local commercial television stations and qualified low power television 
stations. Section 614(b) establishes the number of signals which must 
be carried by cable systems based on their channel capacity. In 
particular, it provides that a cable system with 12 or fewer usable 
activated channels must carry the signals of at least three local 
commercial television stations. Such a system is exempt from any 
requirements of Section 614, however, if it serves 300 or fewer 
subscribers, as long as it does not delete from carriage the signal of 
any broadcast television station. In the Report and Order, the 
Commission concluded that, under this exception, a system must not 
delete any station it carried on October 5, 1992.
    10. Although the language of the text accurately reflects this 
intention, the Community Antenna Television Association (``CATA'') 
points out that the related rule is misleading because it implies that 
the system must have 300 or fewer subscribers as of October 5, 1992. We 
are revising Sec. 76.56(b)(1) of our rules to reflect that, at any time 
that a cable system with 12 or fewer activated channels serves 300 or 
fewer subscribers, it is exempt from the mandatory carriage 
requirements under Section 614, as long as it does not delete any 
signal of a broadcast television station which was carried on that 
system on October 5, 1992.
    11. Definition of Local Commercial Television Station. Section 
614(h)(1)(A) defines a local commercial television station for the 
purpose of the must-carry rules as ``any full power television 
broadcast station, other than a qualified noncommercial television 
station within the meaning of Section 615(l)(1), licensed and operating 
on a channel regularly assigned to its community by the Commission 
that, with respect to a particular cable system, is within the same 
television market as the cable system.'' In the Report and Order, we 
inadvertently defined local commercial television station as ``any full 
power commercial television station * * *'', which had the unintended 
effect of excluding non-qualified noncommercial stations from the 
definition. A non-qualified NCE station is any NCE station which does 
not meet the qualification criteria established in Section 615(g). Such 
a station is not entitled to must-carry rights under that section. We 
believe that the definition of local commercial television station 
contained in the 1992 Cable Act clearly includes non-qualified NCE 
stations; the definition includes all stations other than ``qualified 
NCE stations.'' Consistent with the language of the 1992 Cable Act, we 
determine that NCE stations which are not ``qualified'' NCE stations 
for must-carry purposes may assert must-carry rights under Section 614 
within their local market, just like any other broadcast station.\3\
---------------------------------------------------------------------------

    \3\We interpret local commercial television station to include 
stations operating under a valid construction permit.
---------------------------------------------------------------------------

    12. Availability and Identification of Must-Carry Signals. Section 
614(b)(7) provides that all must-carry signals shall be provided to 
every subscriber of a cable system and shall be viewable via cable on 
all television receivers of a subscriber which are connected to a cable 
system by a cable operator or for which the cable operator provides a 
connection. In the Report and Order we declined to grant a request to 
provide a special exception for commercial subscribers (e.g., hotels, 
hospitals) that receive specially designed channel line-ups. We stated 
our belief that the 1992 Cable Act is clear in its application of 
Section 614(b)(7) to every subscriber of a cable system, that it grants 
no authority to exempt a specific class of cable subscribers from the 
carriage requirements, and that there is no reason to believe that such 
commercial subscribers are not interested in receiving local broadcast 
signals.
    13. On reconsideration, we note that the must-carry provisions do 
not distinguish between commercial and residential viewers. Congress 
made clear its intent that all subscribers have access to local 
commercial broadcast signals. We do not believe that petitioners have 
presented sufficient cause to change our earlier interpretation of the 
1992 Cable Act. Therefore, we affirm that all subscribers must have 
access to these signals on all television sets connected by the cable 
operator or for which the cable operator provides a connection.
    14. It is our understanding that the on-channel carriage of some 
UHF signals has resulted in situations where a converter box supplied 
by a cable operator does not contain the necessary channel capacity to 
permit a subscriber to access a UHF must-carry signal through the 
converter. For example, a converter may supply channels 2-36 while the 
must-carry station is on channel 55. Where a cable operator chooses to 
provide subscribers with signals of must-carry stations through the use 
of converter boxes supplied by the cable operator, the converter boxes 
must be capable of passing through all of the signals entitled to 
carriage on the basic service tier of the cable system, not just some 
of them. In addition, any converter boxes provided for this purpose 
must be provided at rates in accordance with Section 623(b)(3). 
Therefore, in a situation where the subscriber's converter is supplied 
by the cable operator, and is incapable of receiving all signals as 
required by Section 614(b)(7), the cable operator must make provision 
for a converter which is capable of providing these signals.\4\ If it 
is necessary to replace the converter, the subscriber must not be 
required to pay additional sums nor to pay for the installation.\5\ As 
discussed below, we have provided a mechanism for relief for cable 
systems which cannot meet the on-channel requests of must-carry 
stations. A decision not to seek such relief may not be used to 
contravene the directives of the 1992 Cable Act.
---------------------------------------------------------------------------

    \4\See Memorandum Opinion and Order (CSR-3903-M) (Complaint of 
WLIG-TV, Inc. against Cablevision Systems Corporation), DA-93-1365 
(released November 10, 1993), in which the Mass Media Bureau noted 
that converter boxes provided by the cable system must be capable of 
transmitting all the signals entitled to mandatory carriage on the 
basic tier, and required Cablevision, because it was in the midst of 
an upgrade of its system, to switch station WLIG to a channel 
receivable by all subscribers, without the necessity of an 
additional converter box, during the rebuilding of its system.
    \5\We note that where the cable operator authorizes subscribers 
to install additional receiver connections, but does not provide the 
subscriber with such connections, or with the equipment and 
materials for such connections, the operator must notify such 
subscribers of all broadcast stations carried on the cable system 
which cannot be viewed via cable without a converter box and the 
operator must offer to sell or lease such a converter box to such 
subscribers at rates in accordance with section 623(b)(3).
---------------------------------------------------------------------------

    2. Definition of a Television Market.
    15. Use of ADI Markets and the Home County Exception. Under the 
1992 Cable Act, a local commercial television station is entitled to 
must-carry status on all cable systems located in the same television 
market as the cable system. The 1992 Cable Act states that the 
television market shall be determined pursuant to Sec. 73.3555(d)(3)(i) 
of our rules, which in turn defines a television market in terms of the 
Area of Dominant Influence (``ADI''), as defined by Arbitron.\6\ In the 
Report and Order, the Commission noted that each county in the 
contiguous United States is assigned by Arbitron exclusively to one 
ADI, and that each broadcast station licensed to a community located in 
an ADI is considered local throughout that ADI. The Commission 
established one exception to that rule, determining that each broadcast 
station will also be considered a must-carry station in its home 
county, even if that station is assigned to a different ADI from that 
of its home county (the ``home county exception'').
---------------------------------------------------------------------------

    \6\We note that Arbitron has cancelled its television ratings 
service. However, the decision will not have an impact on the use of 
Arbitron-designated ADIs until the next must-carry/retransmission 
consent election which must take place by October 1, 1996. We will 
address this issue sufficiently before that date.
---------------------------------------------------------------------------

    16. The Administrative Procedure Act (``APA'') requires an agency, 
when issuing a general notice of proposed rule making, to provide the 
public with ``either the terms or the substance of a proposed rule or a 
description of the subject and issues involved.'' The APA, however, 
``does not require an agency to publish in advance every precise 
proposal which it may ultimately adopt as a rule.''
    17. The Notice, 57 FR 56298 (11/27/92), set forth the 1992 Cable 
Act's direction that such markets would be determined primarily in the 
manner provided in Sec. 73.3555(d)(3)(i) of the Commission's rules, 
(which section uses Arbitron-defined ADIs), and specifically sought 
comment from the public concerning the Congressionally recognized need 
for adjustments to or modifications of television markets.\7\ The 
Commission specifically stated that ``it may determine that particular 
communities are part of more than one television market,'' and further 
explained that it would act upon written requests to add or delete 
communities to a station's market ``to better reflect market realities 
and effectuate the purposes of this Act.'' We believe that it was 
apparent that the Commission was likely to receive comments and 
suggestions regarding methods to assure that television stations' must-
carry markets, both generally and in individual cases, best reflect 
market realities and the objective of localism underlying broadcast 
signal carriage obligations. While the Notice did not specifically seek 
comment on the home county exception, we believe that the home county 
exception is a ``logical outgrowth'' of the Notice.
---------------------------------------------------------------------------

    \7\Section 614(h)(1)(C)(i) states that a broadcasting station's 
market shall be determined in the manner provided in 
Sec. 73.3555(d)(3)(i) of the Commission's rules, except that the 
Commission may include or exclude additional communities to better 
effectuate the purposes of Section 614. 47 U.S.C. 534(h)(1)(C)(i).
---------------------------------------------------------------------------

    18. The home county exception does not violate either the spirit or 
letter of the 1992 Cable Act. Specifically, we disagree with the 
proposition that although a television station's must-carry rights are 
defined primarily by Arbitron ADIs, there can be no must-carry rights 
beyond the ADI to which a station is assigned by Arbitron. Section 
614(h)(1)(C)(i) recognizes a potential, but easily corrected, 
deficiency in the use of Arbitron ADIs to define a station's must-carry 
market. We find no basis to presume that the Commission may not adjust 
ADIs generally to ensure that stations have must-carry rights in those 
areas where their service is appropriately ``local.'' We agree with 
Granite that adoption of the home county exception is separate and 
apart from the procedure established to make individual station market 
adjustments based on particular situations.
    19. Modification of ADI Markets. As noted in the Report and Order, 
the 1992 Cable Act permits the Commission to add or subtract 
communities from a television station's market to better reflect 
marketplace conditions or to promote the goal of localism underlying 
the signal carriage provisions. In its petition, INTV requests that the 
Commission add or subtract a community for all stations in the market, 
not for an individual station. INTV suggests that upon the addition of 
a community to a market, every station in the community would attain 
must-carry rights in that market.
    20. The Commission has already addressed this subject in the Report 
and Order in response to parties' contentions that ADI modification 
should be made on a community, rather than on a station, basis. Both 
the 1992 Cable Act and our rules require, for each broadcast station, 
an evidentiary showing from an interested party, with opportunity for 
comment. INTV's request would not meet this requirement and therefore 
must be rejected. We reiterate our statement in the Report and Order 
that we will accept joint filings by a group of stations or a single 
request from a cable operator for changes for more than one station 
licensed to the same community, so long as the submitted information 
demonstrates that each station is entitled to have its market modified. 
The relief procedures will ensure that the 1992 Cable Act's objectives 
of promoting localism and reflecting market realities are achieved.\8\
---------------------------------------------------------------------------

    \8\The same logic applies to a single station requesting the 
addition of multiple communities.
---------------------------------------------------------------------------

    21. As noted above, Section 614(h)(1)(C) directs the Commission, 
when considering ADI modification requests, to promote localism by 
taking into account the four factors listed in that section. Press 
Broadcasting Company, Inc. (``Press''), the licensee of WKCF (TV), 
Clermont, Florida, seeks clarification or partial reconsideration of 
the types of evidence the Commission has indicated that it will 
consider in assessing proposed changes in a station's must-carry 
market.
    22. We clarify that the two factors mentioned in the Report and 
Order are merely examples of the types of evidence that might be 
considered in a request to modify an ADI. The Commission purposely did 
not restrict the types of evidence that may be used to demonstrate that 
a station's must-carry market should be modified. The Commission 
declined to prejudge the importance of any of the factors set forth in 
the statute, noting that each case will be unique. Accordingly, we note 
that the factors suggested by Press may be employed by parties to show 
the appropriateness of altering a station's must-carry market, although 
the importance of such factors may differ from one situation to the 
next.\9\
---------------------------------------------------------------------------

    \9\We note that, in stating that a station may demonstrate that 
it is located close to the community in terms of mileage, a station 
may present evidence, as suggested by Press, regarding the distance 
between the cable community and the station's community of license, 
transmitter, or other aspect of the station's operation.
---------------------------------------------------------------------------

    23. Section 76.51 Top 100 Market List. Section 614(f) of the 1992 
Cable Act directs the Commission to issue regulations that include 
revisions needed to update the list of top 100 television markets and 
their designated communities contained in Sec. 76.51. Although the 
Notice sought guidance on how to fulfill this requirement, the comments 
were general in nature and did not offer a mechanism for revising the 
top 100 market list, including criteria for determining when a city of 
license should become a designated community in a television market. 
Accordingly, the Commission concluded in the Report and Order that a 
wholesale revision of Sec. 76.51 was unnecessary and stated that it 
would only update the existing list by adding those designated 
communities requested by parties providing specific evidence that a 
particular market change is warranted. The Commission made three 
specific market modifications, and stated that further revisions to 
this list would be made on a case-by-case basis. The Commission stated 
that requests for modification should demonstrate ``commonality'' 
between the proposed community to be added to a market designation and 
the market as a whole, and that such requests would be made in 
accordance with the factors in Section 614(h)(1)(C) and the related 
rules.
    24. A number of broadcast television licensees in Columbus, Ohio 
filed petitions for reconsideration respecting the addition of 
Chillicothe to the Columbus, Ohio television market. These petitioners 
allege that the Commission's action was taken without sufficient notice 
to interested parties and was therefore based on an inadequate factual 
record.
    25. As noted above, the APA requires an agency, when issuing a 
general notice of proposed rule making, to provide the public with 
``either the terms or the substance of a proposed rule or a description 
of the subject and issues involved,'' but ``does not require an agency 
to publish in advance every precise proposal which it may ultimately 
adopt as a rule.'' In the Notice, the Commission specifically requested 
that interested parties ``comment on what modifications to the 
television markets specified in Sec. 76.51 of our rules is needed to 
ensure that it reflects current market realities.'' In so doing, the 
Commission observed that this proceeding necessarily overlaps with an 
ongoing proceeding involving, inter alia, the makeup of the Sec. 76.51 
market list in relation to the Commission's program exclusivity 
rules.\10\ Therefore, the Commission explicitly stated that Docket 87-
24 would be reopened for further comment in the context of this 
rulemaking in order to facilitate coordination of the overlapping 
aspects of the two proceedings.\11\
---------------------------------------------------------------------------

    \10\Further, the pendency of Triplett's request to modify the 
Columbus, Ohio television market is referenced in Docket No. 87-24, 
3 FCC 2d at 6176 n. 15, which was incorporated into the instant 
proceeding.
    \11\In response to the Notice in this proceeding, the proponents 
of three previously-filed market change petitions for rulemaking 
filed comments which incorporated by reference their rulemaking 
petitions and urged the adoption of their Sec. 76.51 market 
amendment proposals. One of these proponents, Star Cable Associates 
(``Star''), operator of a cable television system serving the 
community of Brazoria, Texas, and portions of Brazoria County, 
Texas, filed a petition for reconsideration based on the concept 
that although the Commission granted other requests to modify 
existing television markets, the Commission did not act on Star's 
request to amend Sec. 76.51 to add the community of Alvin to the 
Houston, Texas market. Star states that it has had such a request 
pending before the Commission since January 1991. Star's comments to 
the Notice in this proceeding were incorporated into and filed with 
Adelphia, et al. and included numerous other cable operators. These 
parties were arguing that the Commission need not revise the 
Sec. 76.51 market list, stating that ``[n]o revision to this list is 
needed to implement the must-carry rules since the current ADI 
markets are to be used for determining must-carry rights.'' It was 
suggested in those comments that the Commission ``might wish to 
update the list * * * to add new communities to existing markets for 
stations which have gone on the air since the list was last 
revised'' and, in that context noted the copyright consequences 
explained in the pending petition regarding the Houston market. 
However, neither Adelphia nor Star specifically requested action in 
the must-carry context on Star's pending petition for rulemaking. 
Under these circumstances, we do not believe that it was erroneous 
to defer action on the Star petition.
---------------------------------------------------------------------------

    26. In light of the nature of this proceeding, the statutory 
instruction to amend, as necessary, Sec. 76.51, and the incorporation 
by reference of the issues in Docket 87-24, we conclude that the Notice 
amply alerted the public that potential amendments to that rule section 
could be made in the context of this specific proceeding.\12\ The 
Commission explicitly sought public comment on what modifications to 
Sec. 76.51 would be necessary to fulfill the directive of Section 
614(f), and we believe that specific market change proposals are a 
natural and logical outgrowth of the range of issues presented in the 
Notice and discussed in the comments filed in this proceeding. 
Accordingly, we are not persuaded by the petitioners that the Notice 
did not provide adequate notice to interested parties that specific 
amendments to Sec. 76.51 were likely to be considered in this 
proceeding.
---------------------------------------------------------------------------

    \12\Neither the APA nor the Commission's rules specifically 
required that the petitioners receive personal service of the 
particular market change proposals tendered in comments filed in 
this proceeding. Moreover, we observe that at least one petitioner, 
Outlet, notes that the filing of Triplett's submission was 
referenced in a public notice of comments received in this docket. 
However, we do not agree that the Commission was somehow obligated 
to indicate the nature of Triplett's comments, and the petitioners 
offer no support for that particular proposition. To the extent that 
Triplett incorporated by reference its previous request regarding 
Chillicothe, which was also noted in Docket 87-24, we do not believe 
that obviated the responsibility of interested parties to assess the 
nature of comments received in response to the general rulemaking 
issues specifically raised in the Notice.
---------------------------------------------------------------------------

    27. We disagree with the petitioners' contentions that amendment of 
the Columbus market first required the issuance of an independent 
notice of proposed rulemaking. The fact that we said in the Notice that 
we may consider further revisions to Sec. 76.51 on an ad hoc basis did 
not preclude the Commission's taking specific action on particular 
modifications consistent with the guidance provided by the 1992 Cable 
Act where the record indicated that such changes were warranted.\13\
---------------------------------------------------------------------------

    \13\We do not agree that the action taken with respect to a 
proposal to include Athens in the Atlanta market indicates that the 
Commission could only act in independent and separate rulemaking 
proceedings. The Georgia Public Television Commission (``GPTC''), 
licensee of noncommercial educational television station WGTV(TV), 
Athens, Georgia, sought to include Athens as a designated community 
in the Atlanta market essentially to increase the station's 
visibility and fund raising in the market. GPTC's proposal was not 
submitted in the instant proceeding directly or incorporated by 
reference, but rather in comments supporting the requested action in 
MM Docket 92-295, which specifically addressed the Rome proposal. 
Parties commenting on MM Docket 92-295 had no opportunity to comment 
upon the Athens proposal in the context of that proceeding. 
Moreover, GPTC's proposal differs significantly from the competition 
and carriage issues vis-a-vis commercial stations raised in either 
the instant proceeding or in MM Docket 92-295 (relating specifically 
to Rome). In light of the action taken in the Report and Order, the 
Commission appropriately terminated MM Docket 92-295, and invited 
GPTC to refile its proposal for consideration in an independent 
proceeding.
---------------------------------------------------------------------------

    3. Selection of Signals.
    28. Definition of Substantial Duplication. 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 the signals of more than one 
local commercial television station affiliated with a particular 
broadcast network.\14\ In the Report and Order, based on the 
legislative history of this section of the 1992 Cable Act, we decided 
that 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.\15\
---------------------------------------------------------------------------

    \14\Western Broadcasting Corporation of Puerto Rico, licensee of 
Station WOLE, Aguadilla, requests that the Commission reconsider its 
rules with respect to their application to WOLE, ``given the unique 
situation in Puerto Rico.'' We note that such a request is more 
appropriately made as a petition for special relief rather than as 
part of a general rulemaking proceeding.
    \15\We also consider programming to be duplicative where the 
stations involved are located in contiguous time zones and the hour 
of broadcast differs by one hour.
---------------------------------------------------------------------------

    29. We continue to believe that our definition of substantial 
duplication is appropriate for determining signal carriage obligations. 
We note that it is consistent with the legislative history that 
indicates that this term refers to the ``simultaneous transmission of 
identical programming on two stations'' and which ``constitutes a 
majority of the programming on each station.'' While we agree with NCTA 
that Congress gave the Commission discretion to define substantial 
duplication, we continue to believe that the most appropriate approach 
here is to act consistently with the legislative history. Congress did 
not intend for a single duplicative program, whether subject to 
blackout or not, to be the determining factor. Finally, we observe that 
our rules often use different definitions for similar terms based on 
the purpose of the policy involved. The Commission's exclusivity rules 
are intended to protect the rights that a broadcaster has bargained for 
with the supplier of a particular program. The must-carry rules, 
however, are intended to ensure that local stations are available to 
cable subscribers. Thus, we reject the proposed modification to our 
definition of substantial duplication.
    4. Low Power Television Stations.
    30. Qualified Low Power Television Station. Section 614(h)(2) 
contains the statutory requirements a low power television station 
(LPTV) must meet before it will be considered ``qualified'' for must-
carry purposes. Section 614(h)(2) provides that an LPTV station must 
broadcast for at least the minimum number of hours the Commission 
requires of commercial broadcast stations. The station must adhere to 
certain Commission requirements regarding non-entertainment programming 
and employment. The station must address local news and informational 
needs that full power stations are not adequately serving because the 
full power stations are distant from the LPTV station's community of 
license. The station must comply with the Commission's LPTV 
interference regulations. The station must be within 35 miles of the 
cable headend and deliver a good quality over-the-air signal to the 
headend. The station's community of license and the cable system's 
franchise area both must have been located outside of the largest 160 
Metropolitan Statistical Areas (MSA's) on June 30, 1990, and the 
population of the LPTV station's community of license must not have 
exceeded 35,000 on that date. Lastly, there cannot be any full power 
television station licensed to any community within the county or other 
political subdivision served by the cable system. As we stated in the 
Report and Order, a low power television station must meet all of the 
statutory requirements to be ``qualified'' for must-carry status. Cable 
systems are required to carry a qualified LPTV station only if there 
are not sufficient full power local commercial television stations to 
fulfill the cable operator's must-carry obligations under Section 
614(b).
    31. Moran Communications (``Moran'') and the Community Broadcaster 
Association (``CBA'') request a revision to the requirement in Section 
614(h)(2)(F) that, in order for an LPTV station to be qualified, there 
cannot be any full power station licensed to any community within the 
county or political subdivision served by the cable system. Under this 
exception, Moran and CBA explain, an LPTV station would qualify for 
must-carry rights if it meets all the requirements of subsections 
614(h)(2), except for subsection F, and if none of the full power 
stations in the county or political subdivision served by the cable 
system offers local news or informational programming. They contend 
that when a satellite station is repeating another station's signal and 
not broadcasting any local news or informational programming to meet 
the needs of the local community, the satellite station should not be 
considered a full power station for the purposes of Section 
614(h)(2)(F). CBA also argues that a satellite station is a ``passive 
repeater,'' and because Section 614(h)(1)(b)(1) specifically excludes 
passive repeaters from the definition of a local commercial television 
station, it follows that Congress intentionally gave less to repeaters 
than to originating stations in terms of must-carry rights. Therefore, 
argues CBA, ``[t]he Congressional recognition of the lesser value of 
the repeaters must be incorporated into the must-carry rule * * *.'' In 
opposition, NCTA argues that the Commission cannot rewrite the statute, 
which defines qualified LPTV stations and governs the must-carry rights 
of LPTV stations.
    32. We agree with NCTA that the provisions of the 1992 Cable Act 
may not be amended by the Commission through the rule making process. 
Further, contrary to CBA's interpretation of Section 614(h), satellite 
stations meet the definition of a local commercial television station, 
are full power stations pursuant to Section 614(h)(2)(F), and are 
generally not simply passive repeaters. We disagree with CBA's 
contention that Congress intended satellite stations to be treated 
differently from other full power stations when reviewing the statutory 
requirements an LPTV station must meet to gain must-carry status. Moran 
and CBA request that we codify the exception in footnote 217 to the 
qualification requirements of an LPTV station. While the Report and 
Order had suggested the possibility of additional circumstances in 
which LPTV carriage might be warranted, it now appears that this is an 
area where the specific statutory provisions and the balancing 
incorporated therein must necessarily guide our enforcement of the 
mandatory carriage provisions for LPTV stations.
C. Manner of Carriage Provisions Applicable to Commercial and 
Noncommercial Stations
    1. Content To Be Carried.
    33. Section 614(b)(3)(A) and Section 615(g)(1) require cable 
operators to carry the primary video, accompanying audio, and line 21 
closed caption transmission, in its entirety, of both qualified local 
commercial and NCE stations when fulfilling their must-carry 
obligations. With respect to qualified local commercial stations, cable 
operators also are required, to the extent technically feasible, to 
retransmit program-related material carried in the vertical blanking 
interval (VBI) or on subcarriers. Retransmission of other material in 
the VBI or other non-program-related material (including teletext and 
other subscription and advertiser-supported information services) is at 
the discretion of the operator. With respect to local qualified NCE 
stations, cable operators are required to transmit, to the extent 
technically feasible, program-related material carried in the VBI, or 
on subcarriers, that may be necessary for receipt of programming by 
handicapped persons or for educational or language purposes. 
Retransmission of other material in the VBI or on subcarriers is at the 
discretion of the operator. Cable operators may, where technically 
feasible and appropriate, remove ghost-cancelling information carried 
in a station's VBI if the cable operator applies an adequate 
alternative methodology at the headend.
    34. In the Report and Order, we decided that the factors enumerated 
in WGN Continental Broadcasting, Co. vs. United Video Inc. (``WGN''), 
provide useful guidance for what constitutes program-related 
material.\16\ We declined to further define ``program-related,'' noting 
that carriage of information in the VBI is rapidly evolving. As a 
result of our reliance on the approach followed in WGN for guidance, we 
rejected a proposal by A.C. Nielsen Company (``Nielsen'') to require 
program identification codes to be carried by a cable system.
---------------------------------------------------------------------------

    \16\In the Report and Order, we used a cite of 685 F.2d 218 (7th 
Cir. 1982), which was the original citation for the case, prior to 
rehearing. Upon rehearing, the court affirmed the factors on which 
we are relying.
---------------------------------------------------------------------------

    35. The WGN case addressed the extent to which the copyright on a 
television program also included program material in the VBI of the 
signal. The WGN court set out three factors for making a copyright 
determination. First, the broadcaster must intend for the information 
in the VBI to be seen by the same viewers who are watching the video 
signal. Second, the VBI information must be available during the same 
interval of time as the video signal. Third, the VBI information must 
be an integral part of the program. The court accepted WGN's future 
programming schedules as an ``integral part of the program.'' The court 
in WGN held that if the information in the VBI is intended to be seen 
by the viewers who are watching the video signal, during the same 
interval of time as the video signal, and as an integral part of the 
program on the video signal, then the VBI and the video signal are one 
copyrighted expression and must both be carried if one is to be 
carried. While the court did not define an ``integral part of the 
program,'' the WGN VBI information not only included local news, but 
also contained future programming schedules for WGN, and the court 
upheld the VBI as one copyrightable expression with the video 
signal.\17\
---------------------------------------------------------------------------

    \17\In an ex parte presentation, StarSight requested that the 
Commission determine that its product, which is transmitted in the 
VBI, meets the WGN test. We believe that such a request should not 
be resolved in the context of a rulemaking proceeding, but rather 
should be dealt with separately through the special relief process.
---------------------------------------------------------------------------

    36. We continue to believe that the factors articulated in WGN 
provide the best guidance for determining whether material in the VBI 
is program-related and, therefore, must be carried by the cable system. 
Accordingly, material that is intended to be seen by the viewers of the 
main program, during the same time interval as the main program, and 
which is an integral part of the main program will be entitled to 
carriage along with the main signal of the must-carry station. However, 
on reconsideration, we clarify that the factors set forth in WGN do not 
necessarily form the exclusive basis for determining program-
relatedness. We believe there will be instances where material which 
does not fit squarely within the factors listed in WGN will be program-
related under the statute. For example, on reconsideration, although 
SID codes may not precisely meet each factor in WGN, we find that they 
are program-related under the statute because they constitute 
information intrinsically related to the particular program received by 
the viewer. Further, SID codes provide important information that is 
useful to both broadcasters and cable operators. We note that the 1992 
Cable Act recognized the importance of the national ratings period and 
prohibited cable operators from repositioning or deleting stations 
during that time. This interpretation is consistent with previous 
Commission decisions in which SID codes were found to be program-
related in other contexts. Finally, we reiterate that, in order to be 
program-related, it is not necessary that the copyright holder in the 
main program and in the material in the VBI be the same.
    2. Channel Positioning.
    37. The 1992 Cable Act provides both commercial and NCE television 
stations which elect must-carry status the additional right to select 
the channel position on which they will be carried by the cable system, 
within certain specified options. Section 614(b)(6) provides that the 
signals of a local commercial television station carried pursuant to 
the must-carry rules must be carried on either (1) the same channel on 
which the station is broadcast over-the-air, (2) the cable channel on 
which it was carried on July 19, 1985, or (3) the cable channel on 
which it was carried on January 1, 1992. The election, in the absence 
of conflicts, is left up to the station involved. See 47 U.S.C. 
534(b)(6). Similarly, Section 615(g)(5) requires that NCE signals 
carried pursuant to must-carry requirements must appear on the cable 
system channel number on which the qualified local NCE station is 
broadcast over-the-air, or on the channel on which it was carried on 
July 19, 1985, at the election of the station. In either case, another 
channel number that is mutually agreed upon by the station and the 
cable operator may be selected. Alternatively, the broadcast station 
and cable operator may agree on a mutually acceptable alternative 
channel position. We note that, with respect to channel position, a 
qualified LPTV station enjoys the channel positioning rights of a 
commercial television station. Section 76.57 is being revised 
accordingly.
    38. Based on comments received in response to the Notice, we 
declined in the Report and Order to adopt a formal priority structure 
for resolving conflicting channel positioning claims. We stated that we 
expected compliance with the channel positioning requests of 
broadcasters ``absent a compelling technical reason for not being able 
to accommodate such requests,'' and that ``inconvenience, marketing 
problems, the need to reconfigure the basic tier or the need to employ 
additional traps or make technical changes'' would not be sufficient 
reasons to deny a channel positioning request. In addition, we 
determined that ``only where placement of a signal on a chosen channel 
results in interference or degraded signal quality to the must-carry 
station or an adjacent channel, or causes a substantial technical or 
signal security problem, will we permit cable operators to carry a 
broadcast signal on a channel not chosen by the station.'' We noted 
that most systems would be able to configure their service to meet this 
statutory requirement and that a cable system claiming that it cannot 
meet a channel positioning request for technical reasons will have to 
provide evidence that clearly demonstrates that inability.
    39. In the Order adopted July 15, 1993, we addressed certain issues 
relating to continued carriage of retransmission consent stations and 
the channel position for ``default'' must-carry stations. In that 
Order, we stated that cable systems which are required to carry the 
signal of a default station ``shall place that signal on one of the 
statutorily defined positions, at the system's discretion.'' Although 
the footnote to that sentence correctly stated that the station 
licensee makes the election, the text incorrectly stated ``at the 
system's discretion.'' We clarify that, as required by the 1992 Cable 
Act, the choice of statutorily defined channel position is made by the 
station, not the cable system. The Order also determined that, in the 
event of a conflict, the station making an affirmative election has 
priority over the default station. Finally, we stated that, where the 
station making an affirmative election has selected the only statutory 
channel position available to the default station, the cable system may 
place the default station on a channel of the cable system's choice, so 
long as that channel is included on the basic tier. Section 76.57 of 
our rules was amended to reflect the channel positioning options 
discussed and adopted in the Order.
    40. The 1992 Cable Act provides that the channel position of a 
station which has elected must-carry rights is a decision to be made by 
the broadcaster from among the listed statutory alternatives. The Act 
does not distinguish between VHF and UHF stations. We emphasize that 
our statements in the Report and Order regarding channel positioning 
apply to UHF, in addition to VHF, stations. As noted there, cable 
operators must comply with the channel positioning requirements absent 
a compelling technical reason.\18\ Further, in response to a 
broadcaster's complaint regarding denial of a channel positioning 
request, a cable system will be required to provide evidence to the 
Commission clearly demonstrating that the operator cannot meet the 
request for technical reasons. As part of such a showing, a cable 
operator may present evidence as to the costs involved in remedying the 
technical problem.
---------------------------------------------------------------------------

    \18\As noted above, inconvenience, marketing problems, the need 
to reconfigure the basic tier or to employ additional traps or make 
technical changes are not sufficient reasons for denying the channel 
positioning request of a must-carry signal. Only where placement of 
a signal on a chosen channel results in interference or degraded 
signal quality to the must-carry station or an adjacent channel, or 
causes a substantial technical or signal security problem will we 
permit cable operators to carry a broadcast station on a channel not 
chosen by the station.
---------------------------------------------------------------------------

    3. Signal Quality
    41. In the Report and Order and the Clarification Order we 
addressed issues relating to the signal quality of a broadcast station 
asserting must-carry rights. We noted that Section 614(h) established 
specific minimum signal levels for a good quality signal of a 
commercial television station (i.e.,-45 dBm for UHF signals and -49 dBm 
for VHF signals). Neither the 1992 Cable Act nor the Commission's 
Orders specifically stated what would be considered a ``good quality 
signal'' for must-carry purposes with respect to noncommercial 
stations, educational translator stations, and low power television 
stations, but Section 615(g)(4) states that the Commission may define a 
``signal of good quality'' for noncommercial stations. We do so now, on 
our own motion.
    42. We note that in a Memorandum Opinion and Order (Independence 
Public Media of Philadelphia, Inc. against Suburban Cable TV Co., Inc.) 
CSR-3806-M), 8 FCC Rcd 6319 (1993), the Mass Media Bureau decided to 
utilize the standards for commercial television stations as prima facie 
tests to initially determine, absent other evidence, whether 
noncommercial stations place adquate signal levels over a cable 
system's principal headend. The Mass Media Bureau has relied on this 
test in processing must-carry complaint cases and we believe that is 
appropriate. With respect to low power and NCE translator stations, we 
are adopting the same signal quality standard of -49 dBm for VHF and 
-45 dBm for UHF signals.
    43. With respect to the manner of testing for a good quality 
signal, we find that the Mass Media Bureau has adopted an appropriate 
method for measuring signal strength in the Memorandum Opinion and 
Order. 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, we believe that 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.
    44. Cable operators are further expected to employ sound 
engineering measurement practices. Therefore, signal strength surveys 
should, at a minimum, include the following: (1) Specific make and 
model numbers of the equipment used, as well as its age and most recent 
date(s) of calibration; (2) description(s) of the characteristics of 
the equipment used, such as antenna ranges and radiation patterns; (3) 
height of the antenna above ground level and whether the antenna was 
properly oriented; and (4) weather conditions and time of day when the 
tests were done. We believe that adherence to these procedures and 
requirements will result in fewer disputes over the signal quality of 
broadcasting stations.
D. Procedural Requirements
    1. Compensation for Carriage.
    45. Copyright Liability.\19\ Under the 1992 Cable Act, a cable 
operator is generally not required to carry a station that would 
otherwise qualify for must-carry status if the station would be 
considered distant for copyright purposes, unless the station 
indemnifies the cable operator for its copyright liability.\20\ The 
Commission required cable operators to notify local commercial and 
noncommercial stations by May 3, 1993 that they may not be entitled to 
must-carry status because their carriage may cause an increased 
copyright liability. In the Report and Order, the Commission stated 
that it expected cable operators and broadcasters to cooperate with 
each other to ensure that operators are compensated for the cost of 
carriage of ``distant'' must-carry signals and that broadcast licensees 
pay only their fair share.\21\ The Commission stated that each licensee 
should be responsible for the increased copyright costs specifically 
associated with carriage of its station as a must-carry signal and that 
stations should be counted in the order they satisfy all the necessary 
conditions for attaining must-carry status. The Commission also 
determined that it would be reasonable for a cable operator to receive 
a written commitment for such payments from a broadcaster in return for 
an estimate of the broadcaster's expected copyright liability, based on 
previous payments and financial information.
---------------------------------------------------------------------------

    \19\We note that the Satellite Home Viewer Act of 1994, P.L. 
103-369, 108 Stat. 3477, which was signed into law on October 18, 
1994, includes a provision to amend Section 111(f) of title 17, 
United States Code, specifically with reference to the definition of 
``local service area of a primary transmitter'' by inserting after 
``April 15, 1976,'' the following: ``or such station's television 
market as defined in Sec. 76.55(e) of title 47, Code of Federal 
Regulations (as in effect on September 18, 1993), or any 
modifications to such television market made, on or after September 
18, 1993, pursuant to Sec.  76.55(e) or Sec. 76.59 of title 47 of 
the Code of Federal Regulations,''. We acknowledge that there may be 
some effect on pending petitions and on our current rules. We will 
revisit, to the extent necessary, those rules and policies which may 
be affected.
    \20\However, a qualified local noncommercial station that has 
been carried continuously since March 29, 1990 is not required to 
reimburse a cable operator for its copyright liability to retain its 
must-carry status. In addition, a distant noncommercial station that 
has been imported prior to March 29, 1992, and which continues to be 
imported to meet the statutory requirements of Section 615, shall 
not be required to reimburse for copyright liability.
    \21\We clarify that, in situations where copyright liability is 
incurred for carriage in some of the communities served by a single 
cable system, the broadcaster must indemnify the operator for that 
copyright liability for carriage in any community served by the 
system, unless the operator is able to provide different channel 
line-ups to the different communities.
---------------------------------------------------------------------------

    46. On May 28, 1993, the Commission adopted a Clarification Order 
(``Clarification'') that, among other things, addressed certain 
copyright issues. We stated that we would require a cable operator to 
provide a broadcast station with a good faith estimate of the potential 
copyright liability for carriage of the station during the next 
copyright accounting period, as well as a copy of the most recent form 
filed with the Copyright Office for existing distant signal carriage 
that details the payments made for carriage of distant signals. The 
cable operator, however, is not required to make legal judgments 
pertaining to the amount of indemnity involved. In addition, a cable 
operator is required to provide such information within three business 
days of receipt of a written request from a broadcaster.\22\ Any cable 
operator not providing sufficient information to a broadcast station 
regarding potential copyright liability in the required timely fashion 
may be subject to Commission sanctions.
---------------------------------------------------------------------------

    \22\In its opposition, Time Warner argues that cable operators 
should be given at least seven days, not three, to respond to any 
requests for information regarding copyright liability. We reject 
Time Warner's proposal and note that in the Clarification we 
observed that the information that must be provided to broadcasters 
should be readily available to the cable operator.
---------------------------------------------------------------------------

    47. We concur with INTV and NAB that stations should be able to 
commit to copyright indemnification for periods shorter than the three 
years specified in the 1992 Cable Act. In light of the numerous factors 
that affect the liability payments, we believe that commitments can be 
for periods as short as one year (two six-month accounting periods). 
Otherwise, a station may be required to make a commitment that cannot 
be fulfilled, thereby leading to protracted litigation. However, in 
fairness to cable operators, we support NAB's proposal that 
broadcasters notify cable operators 60 days prior to termination of any 
agreements to indemnify them for copyright liability. In particular, 
this will provide sufficient time for cable operators to notify 
subscribers regarding the deletion of the station.\23\ Further, we 
disagree with NCTA that to permit agreements for periods of less than 
three years essentially allows stations to revert to retransmission 
consent. A station electing must-carry status remains a must-carry 
station for the entire three-year period, but, in situations where the 
station is considered distant for copyright purposes, a cable operator 
is not obligated to honor that election unless it receives a commitment 
for copyright reimbursement. Further, we note that where a station does 
not initially meet the criteria for must-carry status, it subsequently 
may assert its rights once it satisfies the conditions for must-carry 
status.
---------------------------------------------------------------------------

    \23\We note that this rule also requires notification of the 
affected broadcast station, although in such instances the deletion 
will be at the request of the broadcaster.
---------------------------------------------------------------------------

    48. In a related matter, we find it appropriate to require cable 
operators to notify a broadcaster of any change in service that will 
have an unexpected change on the amount of copyright reimbursement that 
will be required to maintain its must-carry status. For example, as 
petitioners point out, there are some circumstances where a permitted 
signal subject to a .563% royalty rate may become a penalty station and 
require a payment of 3.75% of the system's gross revenues. We believe 
it is reasonable to expect a cable operator to inform a must-carry 
station when the estimated cost of continued carriage may change. We 
also agree with NAB that it is inappropriate for broadcasters whose 
stations do not cause a copyright liability for the cable system to be 
required to commit to indemnification before such liability is actually 
incurred. In both cases, a change in a station's potential copyright 
liability may affect its decision whether to retain its must-carry 
status by indemnifying the cable operator or to cede its must-carry 
rights. Accordingly, we will require cable operators to notify 
broadcast stations at least 60 days prior to any unexpected change on 
their copyright status. This will allow sufficient time for the station 
to determine whether it wishes to continue carriage and, if not, it 
will give the cable operator enough time to send out the required 
notice of deletion of a signal. However, the broadcast station must 
indemnify the cable operator for costs incurred during that copyright 
accounting period, but not for additional costs once the broadcaster 
has notified the cable operator that it will discontinue must-carry 
status in light of changes proposed, but not yet effectuated, by the 
cable operator.
    49. Calculation of station liability. INTV and NAB request 
clarification regarding the method for determining the incremental 
copyright liability attributable to a particular station. We indicated 
in the Report and Order that increased copyright liability should be 
specifically associated with the carriage of each station and further 
that ``stations should be counted in the order they satisfy all the 
necessary conditions for attaining must-carry status.'' However, this 
statement does not accurately reflect the reality of copyright 
liability, nor does it adequately address the concern that cable 
operators may have the ability to manipulate the liability of stations 
which have been historically carried on the system, or which are added 
pursuant to must-carry. We note that NAB is correct in stating that the 
copyright liability is determined according to the sequence by which 
the signal is added to the system. Section 111(d) of Title 17 provides 
the method for calculating copyright royalties to be paid by a cable 
system. In addition, the copyright rules provide specific information 
regarding statements of account and methods of computation for the 
payment of copyright royalties. We agree with NCTA that the copyright 
rules determine the manner in which the cable operator will have to pay 
royalties for each station carried.
    50. In an effort to eliminate confusion in making the determination 
of increased liability associated with each station, we believe that 
stations which were carried prior to the implementation of must-carry 
should continue to be accounted in the same manner with respect to the 
sequence of signal carriage. Stations which were or are added by the 
system should have their copyright liability based on the sequence by 
which the signal was or is added to the system. In the event multiple 
signals are added on the same day, the sequence of incremental increase 
in liability should be based on the order in which the stations met all 
necessary conditions for attaining must-carry status. We anticipate 
that providing the station with the statement of account filed with the 
Copyright Office will ensure the station the opportunity to review how 
this process is achieved. Therefore, we decline to adopt an alternative 
system for determining the copyright liability of individual stations' 
carriage on a cable system.
    51. The Commission's must-carry requirements became effective on 
June 2, 1993, during a Copyright Office accounting period.\24\ Prior to 
the implementation of the must-carry rules, carriage of any station was 
at the discretion of the cable operator. In such cases, the cable 
operator carried such a signal even though it incurred a copyright 
liability for the period ending June 30, 1993. That liability did not 
increase due to a change in our regulations for stations which had 
previously been carried, and therefore the liability had already been 
assumed. We do not believe it appropriate to require the broadcast 
station to reimburse for that liability, even if carriage became 
mandatory on June 2, 1993. However, with respect to a broadcast station 
which was not previously carried by the cable system and which 
immediately asserted its must-carry rights on June 2, 1993, we believe 
that such station should reimburse the cable operator for any increased 
copyright liability incurred as a result of adding that signal between 
June 2, 1993 and June 30, 1993. Therefore, in the case of a station 
that agreed to be added on June 2 and committed to indemnification, the 
station is responsible for the whole semiannual fee. In particular, the 
station had the opportunity to postpone satisfying the conditions of 
must-carry status until the first day of the next Copyright Office 
accounting period.
---------------------------------------------------------------------------

    \24\The Copyright Office divides the year into two accounting 
periods--January 1 to June 30 and July 1 to December 31.
---------------------------------------------------------------------------

    52. INTV seeks to establish a rebuttable presumption that all 
stations are significantly viewed throughout their ADIs. We recognize 
that there may be some merit in considering alternative procedures for 
addressing significant viewing showings and that there may be both 
policy and efficiency reasons for attempting to parallel ADI and 
significant viewing service area decisions. The INTV proposal, however, 
is in our view sufficiently novel that it is not appropriately 
considered in the context of this proceeding. This is particularly the 
case since the significant viewing process has ramifications in terms 
of other rules, such as the network nonduplication rules, that are not 
the subject of this proceeding.
    2. Remedies
    53. Section 615(d)(1) and Section 615(j) provide for the resolution 
of carriage and channel positioning disputes between a broadcast 
station and a cable operator. With respect to commercial stations, the 
1992 Cable Act requires a local commercial station to notify the cable 
operator of an alleged violation, and requires the cable operator to 
respond to such a notice, prior to the station's filing a complaint 
with the Commission. However, with respect to NCE stations, the 1992 
Cable Act permits a NCE station to file a complaint with the Commission 
prior to notifying the cable operator. In the Report and Order we 
discussed these provisions and adopted rules for their implementation. 
Upon review of those rules, we find it necessary to make some 
adjustments on our own motion, as they relate to the filing of a 
complaint by a NCE station.
    54. As indicated above, a NCE station is not required to notify a 
cable operator prior to filing a complaint with the Commission. In the 
Report and Order, we stated that ``it is anticipated, though not 
required, that if there is any question relating to the carriage 
obligations of the cable system, the NCE station will make inquiries of 
the cable system prior to filing a complaint.'' We also stated that if 
a NCE station wanted to follow the procedures outlined for complaints 
filed by a commercial broadcasting station, it could do so as long as 
it notified the cable system of such intent. In establishing the time 
frames by which any broadcaster (commercial, noncommercial or LPTV) 
should file a complaint, we stated that such complaint should be filed 
within 60 days of an ``affirmative action'' by a cable operator which 
directly affects the carriage rights of a broadcast station. We then 
proceeded to define ``affirmative action'' as the denial by a cable 
operator of a request for either carriage or channel position, or the 
failure of a cable system to respond to such a demand within the 
required 30-day time frame. It appears that by establishing such a 60-
day requirement based upon an ``affirmative action,'' we have made the 
complaint procedure for NCE stations more rigorous than was intended, 
either by our rule or the intent of the 1992 Cable Act. Therefore, for 
the purposes of a NCE station complaint, we are revising Sec. 76.7 to 
allow a NCE station to file a complaint at any time it determines that 
its carriage rights have been violated. We believe this better reflects 
the language of the 1992 Cable Act and will eliminate the possibility 
that a NCE complaint would be dismissed based solely on a failure to 
meet the 60-day time frame, prior to having the merits of the complaint 
considered.

III. Retransmission Consent

A. Definition Issues

1. Multichannel Video Programming Distributors
    55. Section 325(b)(1) provides that ``no cable system or other 
multichannel video programming distributor shall retransmit the signal 
of a broadcasting station, or any part thereof, * * * ``except with 
express authorization of the station or if carried pursuant to must-
carry. Section 602(12) of the Communications Act defines a multichannel 
video programming distributor as ``a person such as, but not limited 
to, a cable operator, a multichannel multipoint distribution service 
(MMDS), a direct broadcast satellite service, or a television receive-
only satellite program distributor, who makes available for purchase, 
by subscribers or customers, multiple channels of video programming.''
    56. In the Report and Order we found that ``local broadcast signals 
provided by MATV facilities or by VHF/UHF antennas on individual 
dwellings situated within the station's broadcast service area are not 
subject to retransmission consent, provided that these signals are 
available without charge at the resident's option.'' We further stated 
that this exemption applies to MATV-SMATV, MMDS-SMATV and MMDS-
individual antenna combinations, so long as there is no charge. The 
analogy used was that of an individual purchasing and installing a roof 
top antenna to receive broadcast signals. This exception to 
retransmission consent was added to the Commission's rules as 
Sec. 76.64(e). That section states that ``[p]rovision of local 
broadcast signals my master antenna television (MATV) facilities or by 
VHF/UHF antennas on individual dwellings is not subject to 
retransmission consent, provided that these signals are available 
without charge at the resident' option. That is, the antenna facilities 
must be owned by the individual subscriber or building owner and not 
under the control of the multichannel video programming distributor.'' 
On October 5, 1993, at the request of the Wireless Cable Association 
(``WCA'') and the National Private Cable Association (``NPCA''), we 
adopted a Stay Order with respect to Sec. 76.64(e), pending our 
resolution of this issue. The determining factor used in the rule 
relates to antenna ownership, not the provision of the service free-of-
charge.
    57. We note that a wireless operator meets the definition of a 
multichannel video programming distributor (``MVPD'') and generally 
would be responsible for obtaining retransmission consent for all 
broadcast signals retransmitted over their system. We are cognizant of 
Congress' desire not to affect a viewer who receives these broadcast 
signals over an antenna not owned by a MVPD. The application of the 
retransmission consent requirement to MMDS and SMATV facilities was an 
effort to create regulatory parity between these types of operations 
and cable systems. In the Report and Order, the Commission expressed 
its belief that to the extent the signal reception involved was under 
the control of the individual subscriber and the signals involved were 
not being ``sold'' by the MMDS and SMATV operators, the consent 
requirement should not apply. In addition, and in recognition of the 
concerns raised by WCA, we find that retransmission consent is not 
required if the broadcast signal reception service is received without 
a separate subscription charge and the antenna is either (1) owned by 
the subscriber or the building owner; or (2) under the control and 
available for purchase by the subscriber or building owner upon 
termination of service. We believe that this interpretation upholds 
Congressional intent without causing undue disruption to subscribers. 
We will amend Sec. 76.64(e) of our rules to reflect this change.
B. The Scope of Retransmission Consent
    1. Radio
    58. In the Report and Order we concluded that Congress intended to 
provide retransmission consent to all broadcast signals, including 
those retransmitted by radio. Petitions for reconsideration argue that 
the retransmission consent provisions of Section 325 and the must-carry 
provisions of Sections 614 and 615 were intended to work in concert 
and, therefore, because the must-carry provisions apply only to 
broadcast television signals, Congress intended retransmission consent 
to apply only to broadcast television signals. Cable operators argue 
that most cable systems carry radio stations as an all-band offering, 
meaning that as with any standard radio receiver, all stations which 
deliver a signal to the antenna are carried on the system. They contend 
that the refusal of one radio station to grant consent would preclude 
all other radio stations from being carried in the all-band method. 
Several commenters assert that cable operators are more likely to drop 
the all-band radio offering, rather than attempt to bargain for 
retransmission consent from all stations carried.
    59. We continue to believe that Section 325, as amended by the 1992 
Cable Act, applies to radio signals as well as television signals. The 
statutory language and the legislative history support this conclusion 
and we have not been presented with a credible argument for reading the 
statute otherwise. Section 325(b)(2) expressly exempts certain 
broadcast stations from the consent provision, and radio stations are 
not included in these exceptions. However, with respect to the 
difficulty of obtaining consent for all stations carried in an all-band 
method, we believe that cable system have a legitimate concern. In 
order to make possible the offering of an ``all-band'' FM radio 
service, cable operators need only seek the consent of stations within 
the usual reception area of a high power FM station. Therefore, cable 
systems must obtain consent from all stations which are located within 
92 km (57 miles) of the cable system's receiving antenna(s). The 
distance of 92 km was selected as a result of the Commission's 
allotment policies relating to FM radio stations. Because the predicted 
service contour of a Class C FM radio station is 92 kilometers, the use 
of such a distance will ensure that retransmission consent is obtained 
from FM radio stations received by the cable system's receiving 
antenna(s). Other stations, in the absence of specific notice to the 
contrary, will be presumed to be insufficiently present to be 
considered carried in the all-band reception mode. This should 
eliminate concern over obtaining consent from signals which fade in and 
out of an all-band offering due to atmospheric conditions. We note that 
although the cable operator is not required to obtain retransmission 
consent from stations outside the 92 km zone, any such station that is 
received and retransmitted by the cable system may affirmatively refuse 
to grant, or negotiate for compensation in return for granting, 
retransmission consent to the cable operator. Alternatively, a cable 
system may choose to use a filtering device to eliminate those radio 
stations from an all-band offering for which the cable operator is 
unable or unwilling to obtain consent. This change will be reflected in 
Section 76.64 of our rules, under a new subpart (n).
    2. Low Power Television Stations
    60. In concluding in the Report and Order that low power television 
stations are entitled to retransmission consent, we stated that low 
power television stations are ``television broadcast stations.'' We 
incorrectly stated, however, that a low power station meets the 
definition of television broadcast station in Sec. 76.5 of our rules. 
Section 76.5(b) defines television broadcast station as ``any 
television broadcast station operating on a channel regularly assigned 
to its community by Sec. 73.606 of this chapter * * *.'' A low power 
television station, defined in Section 74.701(f), however, is 
authorized under subpart G of Part 74 of our rules. However, we 
continue to believe that the statute was clear that low power 
television stations are entitled to assert retransmission consent over 
their signals.
    3. Exceptions to the Retransmission Consent Requirement
    61. Section 325, as amended by the 1992 Cable Act, provides four 
exceptions to retransmission consent. Section 325(b)(2) states that 
retransmission consent shall not apply to the retransmission of NCE 
stations, retransmission directly to a home satellite antenna, the 
retransmission of the broadcast signal of a network directly to a home 
satellite antenna of an unserved household, or the retransmission of 
the signal of a superstation if such signal was obtained from a 
satellite carrier and the originating station was a superstation on May 
1, 1991. Petitions for reconsideration have been filed regarding the 
interpretation of the fourth exception.
    62. On May 26, 1993, the Commission adopted an Order, 58 FR 32452 
(6/10/93), denying a Request for Stay submitted by Yankee Microwave, 
Inc. (``Yankee''). In subsequent pleadings Yankee requested 
reconsideration of that Order, or alternatively, the immediate grant of 
its petition for reconsideration. Yankee sought relief, on behalf of 
its cable system customers, from the provisions of Sec. 76.64(b)(2) 
regarding the superstation exception. Alternatively, Yankee requested 
revision of that section of our rules so it would apply to microwave 
carriers of a superstation signal, as well as to satellite carriers of 
such a signal. By Order of the Chief, Mass Media Bureau, a temporary 
waiver was granted to Yankee upon a finding by the Bureau that Yankee 
would suffer irreparable harm if the provisions of the rule were 
enforced prior to our decision on the pending petitions for 
reconsideration. On October 5, 1993, the Mass Media Bureau adopted an 
Order which denied a similar request filed by EMI, Inc. (``EMI'') 
primarily based on that party's lack of a showing of imminent harm. We 
now address the requests and oppositions raised by parties to this 
proceeding.
    63. In the Report and Order we rejected arguments that the 
retransmission consent requirement should not apply to superstation 
signals delivered via terrestrial means such as microwave. Petitions 
for reconsideration argue that the effect of the rule is to unfairly 
discriminate in favor of satellite carriers to the detriment of 
alternative delivery methods such as microwave. We are persuaded by 
commenters that the unintended effect of the rule is to unfairly 
discriminate against alternative methods of delivery of a superstation 
signal. We believe, consistent with the stated purpose and intent of 
the 1992 Cable Act, that it is the delivery of satellite signals, not 
the manner of delivery which should be excepted from the retransmission 
consent requirement. In other words, if a superstation meets the 
definition of ``superstation'' contained in the Copyright Act, then the 
manner of delivery of such a signal shall not control. However, as 
discussed more fully below, the exception will only apply to delivery 
of such a superstation signal outside the local market of the station.
    64. Rights of superstations within the local market. Section 614 
defines a local commercial broadcast station as any full power 
commercial television broadcast station licensed by the Commission that 
is located in the same television market as the cable system. As long 
as the local commercial broadcast station delivers a good quality 
signal and agrees to indemnify the cable system for any additional 
copyright liability, the station is entitled to must-carry rights 
within the local market. Otherwise, that station has the right, 
pursuant to Section 325(b) (4)-(5), to elect retransmission consent. 
Section 325 states that the term ``superstation'' shall be defined 
according to Section 119(d) of Title 17 of the United States Code. 
Section 119(d) of Title 17 defines a superstation as ``a television 
broadcast station other than a network station, licensed by the Federal 
Communications Commission that is secondarily transmitted by a 
satellite carrier.''
    65. We believe that Congress intended for all local commercial 
broadcast stations to have the option to assert either must-carry or 
retransmission consent within their individual market. These local 
commercial broadcast stations do not become superstations until such 
time as they are retransmitted via satellite outside their market, an 
activity unrelated to their status as local commercial broadcast 
stations within their market. Therefore, such local commercial stations 
retain the right to elect between must-carry and retransmission consent 
within their market.
C. Must-Carry/Retransmission Consent Election and Implementation
    66. Section 325(b)(3)(B) provides that television stations must 
make an election between must-carry and retransmission consent ``within 
one year after the date of enactment'' and every three years 
thereafter. In the Report and Order we established the implementation 
of these provisions indicating that the initial election for must-carry 
or retransmission consent must be made by June 17, 1993. We also 
provided that subsequent elections must be made by October 1, 1996, 
October 1, 1999, etc., and would become effective on January 1, 1997, 
January 1, 2000, etc. We determined that broadcasters were to send 
copies of their election to the cable operator and were to retain 
copies of such elections in their public files. We failed, however, to 
instruct television broadcast stations on the term of retention. 
Consistent with the requirements of the 1992 Cable Act and other 
recordkeeping provisions of Secs. 73.3526 and 73.3527 of our rules, we 
will require television broadcast stations to retain election 
statements in their public files for the term of the three year-
election period applicable to such election statements. We will amend 
Secs. 73.3526 and 73.3527 to indicate not only the need to include such 
information in the station's public file, but also the three-year 
retention period for such election statement.
    67. In the Report and Order we noted that no party had commented on 
our proposal to require a new television station to make an initial 
must-carry/retransmission consent election within 30 days from the date 
that it commences regular broadcasts. We adopted that proposal, as well 
as an effective date of ninety (90) days following the election. In 
considering this provision further, we believe that such an election 
schedule could have a detrimental effect on a new television station 
which is entering the market. The Commission's rules provide that a 
television station which has completed construction may commence 
program tests prior to filing for a license with the Commission. These 
stations generally know in advance the date they plan to commence 
broadcasting. On our own motion, we therefore alter the initial 
election and effective date with respect to new television broadcast 
stations. A new television station shall elect between must-carry and 
retransmission consent sixty (60) days prior to commencing program 
tests, and shall notify the cable operator of that election. In the 
event that must-carry status is elected, the new station shall also 
include its channel position in the election statement to the cable 
operator. The election statement should be sent to the cable operator 
by certified mail, return receipt requested. The initial election of 
the broadcast station shall take effect ninety (90) days after it is 
made. This will provide the cable operator with sufficient time to 
notify subscribers of any change which may be required in the channel 
line-up of the system. The result will be that a new television 
broadcast station will have the opportunity to be carried on a cable 
system 30 days after it commences broadcasts over-the-air. We believe 
that such a result serves the public interest and provides new 
broadcast stations with appropriate access to enable them to 
effectively enter a market. Section 76.64(f)(4) of our rules is being 
revised to reflect this change.
    68. In the Report and Order we failed to provide for the 
introduction of a new cable system in a market. Consistent with the 
purpose of the 1992 Cable Act, a new cable system will be required to 
notify all local commercial and noncommercial broadcast stations of its 
intent to commence service. The cable operator must send such 
notification, by certified mail, at least 60 days prior to commencing 
cable service. Commercial broadcast stations must notify the cable 
system within 30 days of the receipt of such notice of their election 
of either must-carry or retransmission consent with respect to such new 
cable system. If the commercial broadcast station elects must-carry, it 
must also indicate its channel position in its election statement to 
the cable system. Such election shall remain valid for the remainder of 
any three-year election interval, as established in Sec. 76.64(f)(2). 
Noncommercial educational broadcast stations should notify the cable 
operator of their request for carriage and their channel position. The 
cable system must determine, in advance of commencing service on the 
system, whether a station is delivering a good quality signal and/or if 
a station will be required to indemnify for copyright purposes. The 
cable system must notify the broadcaster of any signal quality problems 
or copyright liability and must receive the station's response to such 
information prior to commencing carriage of the station's signal. These 
provisions are being added to our rules as Sec. 76.64(l).
D. Retransmission Consent and Section 614
    69. In the Report and Order we rejected the tentative conclusion of 
the Notice that cable operators could negotiate with broadcasters to 
carry less than the entire program schedule of a retransmission consent 
station. We interpreted Section 614(b)(3)(B) and the legislative 
history as not permitting negotiation for carriage or partial broadcast 
signals. On October 5, 1993, at the request of various parties to this 
proceeding, we stayed the rule requiring carriage in the entirety for 
retransmission consent signals. Section 76.62(a) of the rules requires 
the carriage of the entire program schedule of any television station 
carried by a cable system. The rule applies to stations carried 
pursuant to Sections 614, 615 or 325. The only exception to this 
``carriage in its entirety'' requirement is specific programming that 
is prohibited under Sec. 76.67 (sports blackout rule) or subpart F of 
Part 76 of our rules (network nonduplication and syndicated 
exclusivity). In the Stay Order we granted a stay, with respect to 
stations carried pursuant to Section 325 (retransmission consent 
stations), of the new Sec. 76.62(a). The stay was issued in response to 
a request by Media-Com, the licensee of a low power television station 
located in Akron, Ohio. Media-Com requested a waiver of the provision 
to permit it to continue part-time carriage on a Warner Cable system 
under a private agreement. We granted the stay in an effort to avoid an 
interim loss to the public of its present cable access while we 
considered petitions for reconsideration with respect to the carriage 
in the entirety issue. We stated in the Stay Order that we would 
resolve this issue in this Memorandum Opinion and Order. Petitioners 
request reconsideration of the requirement for carriage in the entirety 
with respect to retransmission consent signals.
    70. First, we continue to believe that, with respect to stations 
which have elected must-carry status, Section 614(b)(3) requires cable 
operators to ``carry the entirety of the program schedule of any 
television station carried on the cable system * * *.'' As discussed in 
the Report and Order, the legislative history indicates that carriage 
in the entirety was intended for those local commercial broadcast 
signals entitled to must-carry status under Section 614. Indeed, the 
legislative history is replete with discussions relating to the must-
carry provisions, the need for adequate carriage of local broadcast 
stations on cable systems and the controlling market power of cable 
systems. Congress was concerned that such market power not overwhelm 
the ability of local broadcast stations to obtain carriage, and that 
the terms of carriage not be unreasonable.\25\ Congress indicated its 
strong belief that absent the must-carry provisions, local broadcast 
stations would not be readily available to cable subscribers. In the 
Senate Report, Congress stated that ``it is for this reason that the 
legislation incorporates a special provision focusing just on the 
carriage of local broadcast signals. Moreover, this provision addresses 
both the primary concern of carriage and the secondary concerns of the 
terms of carriage. Based on these concerns, we believe that all 
qualified local commercial broadcast stations should have the minimal 
protection afforded by Section 614. Further, we also continue to 
believe that any broadcast station that is eligible for must-carry 
status, although it may be carried pursuant to a retransmission consent 
agreement must, therefore, be carried in the entirety, unless carriage 
of specific programming is prohibited, pursuant to our rules relating 
to network nonduplication, syndicated exclusivity, sports programming 
or similar regulations.
---------------------------------------------------------------------------

    \25\The Conference Report states that ``the must-carry and 
channel positioning provisions in the bill are the only means to 
protect the federal system of television allocations, and to promote 
competition in local markets * * *. Given the current economic 
condition of free, local over-the-air broadcasting, an affirmative 
must-carry requirement is the only effective mechanism to promote 
the overall public interest.''
---------------------------------------------------------------------------

    71. The Report and Order concluded that Section 614(b)(3) requires 
carriage in the entirety of any broadcast station carried on the cable 
system. However, upon reconsideration, we believe that the ability of a 
broadcaster and cable system to negotiate and agree to carriage of less 
than the entire signal is permitted only where Section 614 is 
inapplicable. Specifically, as pointed out by NCTA, Section 614 applies 
only to qualified local commercial television signals (including 
qualified LPTV stations), and does not apply to either non-local or 
non-qualified local commercial broadcast signals. Therefore, where the 
broadcaster's signal is not eligible for must-carry rights, either by 
failure to meet the requisite definitions or because the broadcast 
station is outside the local market (ADI), and where, therefore Section 
614 is inapplicable, the broadcaster's rights to freely negotiate for 
the carriage of that signal pursuant to retransmission consent includes 
the right to negotiate for partial carriage of the signal.
    72. Section 325 states that no cable system or other multichannel 
video programming distributor shall without consent retransmit ``the 
signal of a broadcasting station, or any part thereof, * * *'' In 
contrast, Section 614(b)(3)(B), the must-carry provision, states that 
the cable operator shall carry ``the entirety of the program schedule * 
* *.'' Further, Section 325(b)(4) states that if a station elects 
retransmission consent, ``the provisions of section 614 shall not apply 
to the carriage of the signal of such station by such cable system.'' 
While, at first blush, the statutory language appears to permit 
broadcasters to negotiate with cable operators for retransmission 
consent for any part of their signal (i.e., any programs), we now 
believe that a more correct and harmonious reading of Section 614 and 
325 together leads to an interpretation that Congress intended cable 
systems to carry all the programming of must-carry eligible stations 
regardless of whether the broadcast station opts for must-carry status 
or not. While it is clear under Section 325 that some negotiated 
partial carriage is permitted, Section 325 does not mandate the 
availability of partial carriage in all negotiations. Given this fact, 
and the congressional emphasis on full carriage for must-carry 
qualified stations (discussed above), we believe the statutory 
provisions read in concert suggest that qualified must-carry stations 
should, as a matter of policy, be carried in their entirety even if 
they are carried pursuant to retransmission consent.
    73. This interpretation is bolstered by Congress' direction to the 
Commission in Section 325(b)(3)(A) to fashion ``regulations to govern 
the exercise by television broadcast stations of the right to grant 
retransmission consent under this subsection and of the right to signal 
carriage under section 614.'' By including this provision in Section 
325, we believe that Congress recognized the interplay between the two 
sections and gave the Commission authority to fill in regulatory gaps. 
Thus, at the very least, the Commission has the flexibility to require 
carriage in the entirety for qualified must carry stations carried 
pursuant to retransmission consent to ensure that the basic underlying 
objectives of the 1992 Cable Act relating to local broadcast service 
would be fulfilled. Otherwise, the statutory goals at the heart of 
Sections 614 and 325--to place local broadcasters on a more even 
competitive level and thus help preserve local broadcast service to the 
public--could easily be undermined.
    74. The Senate Report confirms this interpretation by stating that 
the ``rights granted to stations under section 325 and under section 
614 and 615 can be exercised harmoniously, and it anticipates that the 
FCC will undertake to promulgate regulations which will permit the 
fullest applications of whichever rights each television station elects 
to exercise.'' We believe that our rules should provide the wildest 
possible range of opportunity for both broadcast stations and cable 
operators, where the must-carry provisions are not applicable. Thus, 
any station which is eligible for must-carry status must be carried, if 
at all, in its entirety regardless of whether the station elects must-
carry or retransmission consent. Similarly, any station which is not 
eligible for must-carry status under Section 614, because it is not a 
local commercial broadcast station, or does not qualify under the 
definitions of Section 614, may negotiate for partial carriage. Thus, 
we conclude, based upon a reading of both Sections 614 and 325, that 
broadcast stations whose signals are entitled to must-carry but are 
instead carried pursuant to retransmission consent are not permitted to 
negotiate for carriage of less than their entire signal. We note that 
this interpretation of the statute is supported by the legislative 
history which notes that the retransmission consent provision was 
drafted in such a way as to promote the ``established relationships 
between broadcasters and cable systems,'' and to ``minimize unnecessary 
disruption to broadcasters and cable operators.''
    75. The 1992 Cable Act was specific in stating that ``[c]able 
systems carrying the signals of broadcast stations, whether pursuant to 
an agreement with the station or pursuant to the provisions of [must-
carry], will continue to have the authority to retransmit the programs 
carried on those signals under the section 111 compulsory license.'' 
The Committee emphasized that nothing in the 1992 Cable Act was 
``intended to abrogate or alter existing program licensing agreements 
between broadcaster and program suppliers, or to limit the terms of 
existing or future licensing agreements.''
    76. We continue to intepret retransmission consent as a new right 
given to the broadcaster under the terms of the 1992 Cable Act and as a 
right separate from the right of the underlying copyright holder and do 
not believe that our reconsideration decision in any way undermines the 
separate nature of these rights or creates a conflict between 
communications and copyright based policies. Congress indicated that it 
intended ``to establish a marketplace for the disposition of the rights 
to retransmit broadcast signals.'' As stated in the Report and Order, 
the right involved is one which may be freely bargained away in future 
programming contracts. Although NAB and INTV argue that carriage in the 
entirety is required to ensure the continued validity of both the 
retransmission consent right and the current compulsory copyright, we 
do not see how providing broadcasters and cable operators with 
additional flexibility to negotiate retransmission agreements for 
signals not eligible for must-carry status algers the nature of the 
rights granted under Sections 325 and 614 in any way. Indeed, according 
this additional flexibility is consistent with interpreting the right 
in question as a new right subject to the control of the station 
licensee. To the extent these rights have been bargained away, the 
remaining rights that have not been disposed of still remain under the 
control of the station involved. As noted in paragraph 99, a contrary 
interpretation would not only deprive broadcasters and cable operators 
of the ability to negotiate mutually advantageous arrangements for the 
carriage of portions of distant signals but would negate the 
functioning of various portions of Section 111 of the Copyright Act and 
of the Commission's rules which specifically contemplate the 
possibility that portions of distant signals may be carried. 
Accordingly, we interpret Section 325 to provide that broadcasters may 
bargain with cable operators for the right to carriage of any part of 
the broadcast signal provided that such station is not eligible under 
the provisions of Section 614, either because it is not a local 
commercial broadcast signal or it does not qualify for mandatory 
carriage. ``Carriage in the entirety'' remains a requirement with 
respect to signals eligible for mandatory carriage under the provisions 
of Section 614. Sections 76.62(a) and 76.64(k) are being revised to 
reflect this change.
E. Retransmission Consent Contracts
    77. In the Report and Order we specifically prohibited exclusive 
retransmission consent agreements between television broadcast stations 
and cable operators. This provision forbids a television station from 
making an agreement with one MVPD for carriage, exclusive of other 
MVPDs. After reviewing the comments filed in response to the Notice, we 
concluded that this prohibition is necessary in light of the concerns 
that led Congress to regulate program access and cable signal carriage 
agreements. We then stated that we would revisit the issue in three 
years. We reject petitioners arguments that prohibiting exclusive 
retransmission consent agreements is not warranted and is not supported 
by the 1992 Cable Act. We are adding a new paragraph (m) to Sec. 76.64 
of our rules to reflect this decision. As we indicated in the Report 
and Order, we will consider the need for such a prohibition against 
exclusive retransmission consent agreements in three years.
F. Other Matters
    78. Retransmission Consent and Network Nonduplication Protection. 
In the Report and Order, we concluded that local television stations 
electing retransmission consent should continue to be entitled to 
invoke network nonduplication or syndicated exclusivity protection, 
whether or not they are carried by the cable system. Commenters had 
sought to eliminate exclusivity rights for stations choosing 
retransmission consent. We found, however, that the legislative history 
addressed this matter and that Congress intended for exclusivity 
protection to apply under its regulatory framework.
    79. We affirm our decision to allow stations electing 
retransmission consent to assert network nonduplication or syndicated 
exclusivity protection as provided in the rules.\26\ We observe that 
this issue was considered earlier in this proceeding in response to a 
petition from NCTA, which we denied in the Report and Order. Parties 
have provided no new arguments nor additional evidence to convince us 
that our decision conflicts with the intent of Congress. We also do not 
find that there is a conflict between retransmission consent rights and 
exclusivity rights. Network nonduplication and syndicated exclusivity 
rights protect the exclusivity that broadcasters have acquired from 
their program suppliers, including their network partners, while 
retransmission consent allows broadcasters to control the 
redistribution of their signals. Both policies promote the continued 
availability of the over-the-air television system, a substantial 
government interest in Congress' view.
---------------------------------------------------------------------------

    \26\We note that we also considered whether to modify the 
geographic zone applicable to exclusivity protection to make it 
consistent with the definition of a local television market as the 
ADI, as specified in the 1992 Cable Act. We declined to make such a 
change.
---------------------------------------------------------------------------

    80. We also note that cable operators believe that broadcasters 
have an advantage in the negotiations for retransmission agreements due 
to their ability to assert their exclusivity rights, while broadcasters 
believe the reverse. Local broadcast stations are an important part of 
the service that cable operators offer and broadcasters rely on cable 
as a means to distribute their signals. Thus, we believe that there are 
incentives for both parties to come to mutually beneficial 
arrangements. Moreover, the allegations that local stations electing 
retransmission consent would not be carried due to their inability to 
successfully negotiate agreements with cable operators and then assert 
their exclusivity rights and deprive subscribers of programming was 
speculative at the time the reconsideration petitions were filed. Now 
that the retransmission consent provisions are in effect, there is no 
evidence that subscribers are being deprived of network programming. We 
note that there are only limited situations where local stations are 
not carried. Therefore, the dire consequences predicted do not exist 
and we continue to believe that stations should receive the exclusivity 
protection to which they are entitled.

IV. Administrative Matters

Regulatory Flexibility Analysis

    81. Pursuant to the Regulatory Flexibility Act of 1980, the 
Commission included a final analysis in the Report and Order detailing 
(i) the need for and purpose of the rules, (ii) the summary of issues 
raised by public comment in response to the initial regulatory 
flexibility analysis, Commission assessment, and changes made as a 
result, and (iii) significant alternatives considered and rejected. No 
substantive changes have occurred pertaining to the final analysis as a 
result of the petitions for reconsideration.

Paperwork Reduction Act

    82. The proposal contained herein has been analyzed with respect to 
the Paperwork Reduction Act of 1980 and found to impose a new or 
modified information collection requirement on the public. 
Implementation of any new or modified requirement will be subject to 
approval by the Office of Management and Budget as prescribed by the 
Act.

Ordering Clauses

    83. Accordingly, it is ordered, That pursuant to the authority 
contained in Sections 4 (i) and (j), and 303 of the Communications Act 
of 1934, as amended, and the Cable Television Consumer Protection and 
Competition Act of 1992, Pub. L. 102-385, Parts 73 and 76 of the 
Commission Rules, 47 CFR Parts 73 and 76 are amended as set forth 
below.
    84. It is further ordered, That rule provisions of Part 76 of the 
rules set forth below shall be effective 30 days after publication in 
the Federal Register. Rule provisions of Part 73 of the rules set forth 
below shall be effective upon approval from OMB.
    85. It is further ordered, That Secs. 76.62 and 76.64 of the 
Commission's rules which were stayed by Order of the Commission on 
October 5, 1993 are revised as indicated below and the Stay Order is 
lifted as of the effective date of these rules.
    86. It is further ordered, That the petitions for reconsideration 
are granted in part and denied in part only to the extent indicated in 
this Memorandum Opinion and Order, except that the Petition for 
Reconsideration filed by Western Broadcasting of Puerto Rico is 
dismissed without prejudice.

List of Subjects

47 CFR Part 73

    Radio broadcasting.

47 CFR Part 76

    Cable television.

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

Amendatory Text

    Part 73 of Chapter I of Title 47 of the Code of Federal Regulation 
is amended as follows:

PART 73--BROADCAST RADIO SERVICES

    1. The authority citation for part 73 is revised to read as 
follows:

    Authority: Secs. 303, 48 Stat., as amended, 1082; 47 U.S.C. 154, 
as amended.

    2. Section 73.3526 is amended by adding paragraph (g) to read as 
follows:


Sec. 73.3526  Local public inspection file of commercial stations.

* * * * *
    (g) Statements of a commercial television station's election with 
respect to either must-carry or retransmission consent as defined in 
Sec. 76.64 of this chapter shall be retained in the public file of the 
television station for the duration of the three year election period 
to which the statement applies.
    3. Section 73.3527 is amended by adding paragraph (g) to read as 
follows:


Sec. 73.3527  Local public inspection file of noncommercial educational 
stations.

* * * * *
    (g) Noncommercial television stations requesting mandatory carriage 
on any cable system pursuant to Sec. 76.56 of this chapter shall place 
a copy of such request in its public file and shall retain both the 
request and relevant correspondence for the duration of any period to 
which the statement applies.
    Part 76 of Chapter I of Title 47 of the Code of Federal Regulations 
is amended as follows:

PART 76--CABLE TELEVISION SERVICE

    1. The authority citation of part 76 is revised to read as follows:

    Authority: Secs. 2, 3, 4, 301, 303, 307, 308, 309, 48 Stat., as 
amended, 1064, 1065, 1066, 1081, 1082, 1083, 1084, 1085, 1101; 47 
U.S.C. Sec. 152, 153, 154, 301, 303, 307, 308, 309; Secs. 612, 614-
615, 623, 632 as amended, 106 Stat. 1460, 47 U.S.C. 532; Sec. 623, 
as amended, 106 Stat. 1460; 47 U.S.C. 532, 533, 535, 543, 552.

    2. Section 76.7(c)(4) (i), (ii), and (iii) are revised and a new 
paragraph (c)(4)(iv) is added to read as follows:


Sec. 76.7  Special relief and must-carry complaint procedures.

* * * * *
    (c) * * *
    (4)(i) Must-carry complaints filed pursuant to Sec. 76.61(a) 
(Complaints regarding carriage of local commercial television stations) 
shall be accompanied by the notice from the complainant to the cable 
television system operator (Sec. 76.61(a)(1)), and the cable television 
system operator's response (Sec. 76.61(a)(2)), if any. If no timely 
response was received, the complaint should so state.
    (ii) Must-carry complaints filed pursuant to Sec. 76.61(b) 
(Complaints regarding carriage of qualified local NCE television 
stations) should be accompanied by any relevant correspondence between 
the complainant and the cable television system operator.
    (iii) No must-carry complaint filed pursuant to Sec. 76.61(a) 
(complaints regarding local commercial television stations) will be 
accepted by the Commission if filed more than sixty (60) days after the 
date of the specific event described in this paragraph. Must-carry 
complaints filed pursuant to Sec. 76.61(a) should affirmatively state 
the specific event upon which the complaint is based, and shall 
establish that the complaint is being filed within sixty (60) days of 
such specific event. With respect to such must-carry complaints, the 
specific event shall be
    (A) The denial by a cable television system operator of request for 
carriage or channel position contained in the notice required by 
Sec. 76.61(a)(1), or
    (B) The failure to respond to such notice within the time period 
allowed by Sec. 76.61(a)(2).
    (iv) With respect to must-carry complaints filed pursuant to 
Sec. 76.61(b), such complaints may be filed at any time the complainant 
believes that the cable television system operator has failed to comply 
with the applicable provisions of subpart D of this part.
* * * * *
    3. Section 76.55 is amended by revising paragraph (a)(2), adding a 
note after paragraph (a)(3)(iii), adding new paragraph (b)(3), a note 
following paragraph (d)(6), and revising the note following paragraph 
(e)(3), to read as follows:


Sec. 76.55  Definitions applicable to the must-carry rules.

* * * * *
    (a) * * *
    (2) Is owned and operated by a municipality and transmits 
noncommercial programs for educational programs for educational 
purposes, as defined in Sec. 73.621 of this chapter, for at least 50 
percent of its broadcast week.
    (3) * * *
    (iii) * * *

    Note to paragraph (a): For the purposes of Sec. 76.55(a), 
``serving the franchise area'' will be based on the predicted 
protected contour of the NCE translator.

    (b) * * *
    (3) Notwithstanding the provisions of this section, a cable 
operator shall not be required to add the signal of a qualified local 
noncommercial educational television station not already carried under 
the provision of Sec. 76.56(a)(5), where such signal would be 
considered a distant signal for copyright purposes unless such station 
agrees to indemnify the cable operator for any increased copyright 
liability resulting from carriage of such signal on the cable system.
* * * * *
    (d) * * *
    (6) * * *

    Note to paragraph (d): For the purposes of this section, a good 
quality signal shall mean a signal level of either -45 dBm for UHF 
signals or -49 dBm for VHF signals at the input terminals of the 
signal processing equipment, or a baseband video signal.

    (e) * * *
    (3) * * *

    Note to paragraph (e): For the 1993 must-carry/retransmission 
consent election, the ADI assignments specified in the 1991-1992 
Television Market Guide will apply.
* * * * *
    4. Section 76.56 is amended by revising paragraphs (a)(1)(iii), 
(a)(5) and (b)(1) to read as follows:


Sec. 76.56  Signal carriage obligations.

    (a) * * *
    (1) * * *
    (iii) Systems with more than 36 usable activated channels shall be 
required to carry the signals of all qualified local NCE television 
stations requesting carriage, but in any event at least three such 
signals; however a cable system with more than 36 channels shall not be 
required to carry an additional qualified local NCE station whose 
programming substantially duplicates the programming of another 
qualified local NCE station being carried on the system.
* * * * *
    (5) Notwithstanding the requirements of paragraph (a)(1) of this 
section, all cable operators shall continue to provide carriage to all 
qualified local NCE television stations whose signals were carried on 
their systems as of March 29, 1990. In the case of a cable system that 
is required to import a distance qualified NCE signal, and such system 
imported the signal of a qualified NCE station as of March 29, 1990, 
such cable system shall continue to import such signal until such time 
as a qualified local NCE signal is available to the cable system. This 
requirements may be waived with respect to a particular cable operator 
and a particular NCE station, upon the written consent of the cable 
operator and the station.
    (b) * * *
    (1) A cable system with 12 or fewer usable activated channels, as 
defined in Sec. 76.5(oo), shall carry the signals of at least three 
qualified local commercial television stations, except that if such 
system serves 300 or fewer subscribers it shall not be subject to these 
requirements as long as it does not delete from carriage the signal of 
a broadcast television station which was carried on that system on 
October 5, 1992.
* * * * *
    5. Section 76.57(a) is revised to read as follows:


Sec. 76.57  Channel positioning.

    (a) At the election of the licensee of a local commercial broadcast 
television station, and for the purpose of this section, a qualified 
low power television station, carried in fulfillment of the must-carry 
obligations, a cable operator shall carry such signal on the cable 
system channel number on which the local commercial television station 
is broadcast over the air, or on the channel on which it was carried on 
July 19, 1985, or on the channel on which it was carried on January 1, 
1992.
* * * * *
    6. Section 76.60 is amended by adding a new paragraph (c) to read 
as follows:


Sec. 76.60  Compensation for carriage.

* * * * *
    (c) A cable operator may accept payments from stations pursuant to 
a retransmission consent agreement, even if such station will be 
counted towards the must-carry complement, as long as all other 
applicable rules are adhered to.
    7. Section 76.62(a) is revised to read as follows:


Sec. 76.62  Manner of carriage.

    (a) Cable operators shall carry the entirety of the program 
schedule of any television station (including low power television 
stations) carried by the system unless carriage of specific programming 
is prohibited, and other programming authorized to be substituted, 
under Sec. 76.67 or subpart F of part 76, or unless carriage is 
pursuant to a valid retransmission consent agreement for the entire 
signal or any portion thereof as provided in Sec. 76.64.
* * * * *
    8. Section 76.64 is amended by revising paragraphs (b)(2) (e), 
(f)(4) and (k) and by adding paragraphs (l), (m) and (n) to read as 
follows:


Sec. 76.64  Retransmission consent.

* * * * *
    (b) * * *
    (2) The multichannel video programming distributor obtains the 
signal of a superstation that is distributed by a satellite carrier and 
the originating station was a superstation on May 1, 1991, and the 
distribution is made only to areas outside the local market of the 
originating station; or
* * * * *
    (e) The retransmission consent requirements of this section are not 
applicable to broadcast signals received by master antenna television 
facilities or by direct over-the-air reception in conjunction with the 
provision of service by a multichannel video program distributor 
provided that the multichannel video program distributor makes 
reception of such signals available without charge and at the 
subscribers option and provided further that the antenna facility used 
for the reception of such signals is either owned by the subscriber or 
the building owner; or under the control and available for purchase by 
the subscriber or the building owner upon termination of service.
    (f) * * *
    (4) New television stations shall make their initial election any 
time between 60 days prior to commencing broadcast and 30 days after 
commencing broadcast; such initial election shall take effect 90 days 
after they are made.
* * * * *
    (k) Retransmission consent agreements between a broadcast station 
and a multichannel video programming distributor shall be in writing 
and shall specify the extent of the consent being granted, whether for 
the entire signal or any portion of the signal.
    (l) A cable system commencing new operation is required to notify 
all local commercial and noncommercial broadcast stations of its intent 
to commence service. The cable operator must send such notification, by 
certified mail, at least 60 days prior to commencing cable service. 
Commercial broadcast stations must notify the cable system within 30 
days of the receipt of such notice of their election for either must-
carry or retransmission consent with respect to such new cable system. 
If the commercial broadcast station elects must-carry, it must also 
indicate its channel position in its election statement to the cable 
system. Such election shall remain valid for the remainder of any 
three-year election interval, as established in Sec. 76.64(f)(2). 
Noncommercial educational broadcast stations should notify the cable 
operator of their request for carriage and their channel position. The 
new cable system must notify each station if its signal quality does 
not meet the standards for carriage and if any copyright liability 
would be incurred for the carriage of such signal. Pursuant to 
Sec. 76.57(e), a commercial broadcast station which fails to respond to 
such a notice shall be deemed to be a must-carry station for the 
remainder of the current three-year election period.
    (m) Exclusive retransmission consent agreements are prohibited. No 
television broadcast station shall make an agreement with one 
multichannel distributor for carriage, to the exclusion of other 
multichannel distributors.
    (n) A multichannel video programming distributor providing an all-
band FM radio broadcast service (a service that does not involve the 
individual processing of specific broadcast signals) shall obtain 
retransmission consents from all FM radio broadcast stations that are 
included on the service that have transmitters located within 92 
kilometers (57 miles) of the receiving antenna for such service. 
Stations outside of this 92 kilometer (57 miles) radius shall be 
presumed not to be carried in an all-band reception mode but may 
affirmatively assert retransmission consent rights by providing 30 days 
advance notice to the distributor.

[FR Doc. 94-29443 Filed 12-2-94; 8:45 am]
BILLING CODE 6712-01-M