**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

Rainbow Programming Holdings, Inc., )

)

Complainant, )

)

v\. ) File No. E-97-15

)

Bell Atlantic-New Jersey, Inc., and )

Bell Atlantic Network Services, Inc., )

)

Defendants. )

# MEMORANDUM OPINION AND ORDER

# Adopted: July 5, 2000 Released: July 6, 2000

# By the Chief, Enforcement Bureau:

## I. INTRODUCTION

1.  In this Memorandum Opinion and Order, we grant the formal complaint
    filed by Rainbow Programming Holdings, Inc. ("Rainbow") against Bell
    Atlantic-New Jersey, Inc. and Bell Atlantic Network Services, Inc.
    (collectively referred to as "Bell Atlantic") pursuant to section
    208 of the Communications Act of 1934, as amended ("the Act").[^1]
    Rainbow seeks the return of deposit money it paid to reserve
    channels on Bell Atlantic's video dialtone system in Dover Township,
    New Jersey.

2.  For the reasons set forth below, we conclude that Bell Atlantic
    violated section 201(b) of the Act by engaging in unjust and
    unreasonable practices that wrongfully denied Rainbow the ability to
    provide video programming to end-users on Bell Atlantic's video
    dialtone system in Dover Township.[^2] We further conclude that
    these unjust and unreasonable practices by Bell Atlantic damaged
    Rainbow within the meaning of section 206 of the Act in the amount
    of the deposit Rainbow paid to Bell Atlantic.[^3] We therefore
    require Bell Atlantic to return the \$345,600 channel reservation
    deposit to Rainbow with appropriate interest.

**II. BACKGROUND**

3.  Bell Atlantic-New Jersey, Inc. is a New Jersey corporation and
    wholly-owned subsidiary of Bell Atlantic Corporation, whose
    principal business is the provision of telecommunications
    services.[^4] Bell Atlantic Network Services, Inc. is a Delaware
    corporation that provides marketing, planning, procurement,
    financial, legal, accounting, technical support and other management
    services for various Bell Atlantic Corporation subsidiaries,
    including Bell Atlantic-New Jersey.[^5] At the time of the filing of
    the formal complaint in this matter, Rainbow was a New York
    corporation and managing partner of several partnerships that
    provided national and regional video programming to cable and other
    types of multichannel video delivery systems.[^6]

4.  On August 14, 1992, the Commission authorized incumbent local
    exchange carriers to participate in the video marketplace by
    provisioning video dialtone service to video programmers.[^7] Video
    dialtone, as conceived by the Commission, was designed to foster
    competition in the video programming delivery market by making
    available to video programmers a basic platform, provided by the
    local telephone company, for the distribution of programming to
    end-users. In order to guarantee space on each system for multiple
    programmers, the Commission required video dialtone providers to
    operate as common carriers.[^8]

5.  Soon after the release of the *Second Report and* *Order*,[^9] Bell
    Atlantic filed an application with the Commission to operate a video
    dialtone system in Dover Township, New Jersey. The Commission
    granted Bell Atlantic's application on July 18, 1994.[^10]

6.  Following the *Second Report and Order*, Bell Atlantic entered into
    an agreement with Futurevision of America Corporation
    ("Futurevision"), a video programmer competing with Rainbow, that
    would allow Futurevision to provide video programming over the Dover
    Township system, once activated.[^11] In connection with this
    agreement, Bell Atlantic agreed to pay half of the development costs
    for interface software for the Dover Township system. This software
    was to be developed by, and the payment made to, Broadband
    Applications Development Corporation ("Broadband"), an affiliate of
    Futurevision. In exchange, Bell Atlantic received the right to use
    the software to perform tests on its system and the right to license
    the software to other video programmers.[^12]

7.  In January 1995, Bell Atlantic filed Tariff Transmittal No. 741,
    which proposed to extend its FCC Tariff No. 10 ("Tariff") to govern
    the terms of the video dialtone service in Dover Township.[^13]
    Section 2.10(A) of the Tariff required prospective programmers to
    submit a pre-paid deposit based on the number of channels they
    sought to reserve on the system. Section 2.10(A) further provided
    that, once the programmer ordered service and began providing
    programming to its end-users, Bell Atlantic would credit all charges
    against the balance of the deposit until the deposit amount reached
    zero.

8.  When the enrollment period began on March 13, 1995, Futurevision
    immediately submitted a deposit to reserve 36 channels on the Dover
    Township system.[^14] Shortly thereafter, Rainbow gave Bell Atlantic
    \$345,600 to reserve 192 channels.[^15] On April 10, 1995, Bell
    Atlantic allocated 192 channels to Rainbow and 96 channels to
    Futurevision.[^16] Bell Atlantic and Rainbow then entered into an
    agreement,[^17] as required by the Tariff,[^18] in which Rainbow
    agreed to take the 192 channels for a minimum period of three months
    after the system began operations.

9.  Before the video dialtone system became operational, Bell Atlantic
    told all potential programmers they would need to have interface
    software to access the system.[^19] The Futurevision affiliate
    Broadband, pursuant to the agreement between Futurevision and Bell
    Atlantic, developed the Enhanced Provisioning Interactive
    Communication (EPIC) interface software that permitted programmers
    to access the video dialtone system.[^20] Bell Atlantic informed all
    potential programmers that, in order to access the system, the
    potential programmers could: (i) develop their own interface
    software using the generic specifications Bell Atlantic
    supplied; (ii) license the EPIC software from Futurevision; or (iii)
    license the EPIC software from Bell Atlantic itself.[^21]

10. As discussed in more detail below, Bell Atlantic specifically
    represented to Rainbow that it would make available to Rainbow the
    EPIC software. However, Bell Atlantic neither provided Rainbow with
    any licensing proposal for the EPIC software in response to
    Rainbow's request nor allowed Rainbow to use the EPIC software
    without a license. As a result, Rainbow asserts that it was unable
    to provide video programming to end-users in Dover Township on the
    date the system began operations.

11. The Dover Township system began operations on January 29, 1996 with
    the EPIC software as the only software capable of interfacing with
    the system. Moreover, Futurevision was the only programmer providing
    video programming to end-users.[^22]

12. By letters dated September 25 and October 22, 1996, Rainbow informed
    Bell Atlantic that it was terminating its agreement to order
    service.[^23] In the letters, Rainbow demanded that Bell Atlantic
    return its entire channel reservation deposit with interest because,
    among other things, Bell Atlantic had refused to negotiate with
    Rainbow for or provide access to the "necessary componentry and
    functionality" needed to interface with the Dover Township
    system.[^24] In response, by letters dated October 4 and December
    16, 1996, Bell Atlantic refused Rainbow's demand, claiming that it
    had made the necessary specifications available to Rainbow, and that
    Rainbow could have developed its own interface software.[^25]
    Rainbow then filed the instant formal complaint.

**III. DISCUSSION**

13. Rainbow alleges that Bell Atlantic failed to furnish the requested
    video dialtone service in a nondiscriminatory manner, in violation
    of sections 201(a) and 202(a) of the Act.[^26] Rainbow also asserts
    that Bell Atlantic's refusal to return Rainbow's deposit was an
    unjust and unreasonable practice, in violation of section 201(b) of
    the Act.[^27] In addition, Rainbow contends: (i) that Bell Atlantic
    failed to substantially perform or reasonably discharge its duty
    under the tariff, in violation of section 203(a) of the Act; (ii)
    that the tariff was ambiguous and should be construed to require the
    return of the deposit to Rainbow under section 61.2 of the
    Commission's rules; and (iii) that the tariff was void and should
    have been rescinded.[^28] Finally, Rainbow alleges that Bell
    Atlantic's failure to provide access to the video dialtone platform
    by denying it the necessary EPIC interface software was an unjust
    and unreasonable practice in violation of section 201(b) of the
    Act.[^29] Rainbow seeks the return of its \$345,600 channel
    reservation deposit plus accumulated interest.

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A.  Bell Atlantic's Conduct Was Unjust and Unreasonable in Violation of
    Section 201(b) of the Act.

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14. We find that Bell Atlantic violated section 201(b) of the Act by
    engaging in unjust and unreasonable practices that denied Rainbow
    access to the video dialtone platform. As explained in more detail
    below, we so find because: (i) Bell Atlantic made various
    representations to Rainbow that it would make available to Rainbow
    the EPIC software; (ii) Bell Atlantic subsequently failed to make
    the EPIC software available; and (iii) Rainbow refrained from
    developing its own interface software after reasonably and
    detrimentally relying on Bell Atlantic's representations.[^30]

15. First, we determine that Bell Atlantic's refusal to provide the EPIC
    software to Rainbow constitutes a practice "in connection with . . .
    communication service" within the meaning of section 201(b) of the
    Act.[^31] In the *First Report and Order* permitting incumbent local
    exchange carriers to offer video dialtone, the Commission concluded
    that the video dialtone platform should include "limited computer
    processing applications directly related to the facilitation of the
    connection between the subscriber and the service provider" and that
    such applications would be adjunct to basic services provided.[^32]
    Moreover, the Commission, in the *New Jersey Bell Order*, found that
    interface software was "necessary to facilitate video programmer
    interconnection to \[Bell Atlantic's\] basic platform."[^33] Bell
    Atlantic admits that Rainbow could not have provided delivery of its
    programming without some interface software.[^34] On the Dover
    Township system, video programmers could not provide programming
    without accessing the Video Administration Module ("VAM") component
    of the system. The VAM provisioned and maintained information about
    the system for the programmer, allowed programmers to schedule and
    modify end-user video service, and performed billing functions.[^35]
    Therefore, a video programmer that could not interface with the VAM
    could not access the video dialtone system and could not provide
    programming. We therefore conclude that Bell Atlantic's actions in
    providing (or failing to provide) the interface software was a
    "practice" conducted "in connection with" the video dialtone service
    within the meaning of section 201(b) of the Act.

16. We next conclude that Bell Atlantic failed to make available to
    Rainbow the EPIC interface software after it made representations
    that it would do so and after Rainbow reasonably relied upon these
    representations in deciding not to develop its own interface
    software. Prior to the activation of the Dover Township system, Bell
    Atlantic made several representations concerning the availability of
    the EPIC software. In May 1994, the New Jersey Cable Television
    Association ("NJCTA") petitioned the Commission to deny Bell
    Atlantic's video dialtone application. Among other points, the NJCTA
    alleged that the software development agreement between Futurevision
    and Bell Atlantic possibly violated the Commission's telephone
    company-cable television cross-ownership rules.[^36] On May 20,
    1994, Bell Atlantic responded to NJCTA's concerns by informing the
    Commission, as well as all potential programmers, that programmers
    would be able to license from Bell Atlantic the EPIC software.[^37]
    Bell Atlantic does not deny that it made this representation.

17. The next year, on April 26, 1995, one month after Rainbow had given
    Bell Atlantic its \$345,600 channel reservation deposit, Rainbow
    representatives met with Bell Atlantic representatives to discuss a
    number of issues related to the provision of the video dialtone
    service in Dover Township. The parties discussed the appropriate
    activation date for the Dover Township system, marketing
    arrangements, channel assignments for the different video
    programmers, and the necessary interface software. Rainbow asserts
    that during these discussions, Bell Atlantic assured Rainbow that
    Bell Atlantic "had available and would be willing to lease Rainbow"
    the EPIC software.[^38] Bell Atlantic does not deny making this
    statement to the Rainbow representatives.

18. Bell Atlantic continued throughout 1995 to represent to Rainbow that
    it could and would license the EPIC software. According to Rainbow,
    during the week of October 23, 1995, Bell Atlantic told Rainbow that
    the EPIC interface software was the only software available that
    would allow programmers to access the system.[^39] In addition, Bell
    Atlantic's own representative stated in an affidavit that he told
    Rainbow that, if Rainbow wanted to use the EPIC software, Rainbow
    could negotiate a license for the software with Bell Atlantic.[^40]
    Shortly thereafter, on November 13, 1995, Rainbow attempted to
    negotiate with both Bell Atlantic and Futurevision for a license to
    use the EPIC software.[^41] During these discussions, Futurevision
    told Rainbow that it would not allow Rainbow to use the EPIC
    software until Rainbow licensed Futurevision to carry Rainbow's
    video programming. At the same time, Bell Atlantic told Rainbow it
    would lease to Rainbow the EPIC software at rates, terms and
    conditions to be negotiated in the future.[^42] Rainbow then
    requested that Bell Atlantic submit a licensing proposal, which Bell
    Atlantic failed to do.[^43] Once again, Bell Atlantic does not deny
    that it made these representations.

19. Finally, as late as December 1995, Bell Atlantic represented that it
    would license the EPIC software to Rainbow. As part of a Common
    Carrier Bureau tariff investigation, Rainbow filed comments
    complaining that, because the EPIC software was the only software
    that allowed access to the Dover Township system, and because only
    Bell Atlantic and Futurevision could license the EPIC software,
    Rainbow might not be able to gain access to the system.[^44] Rainbow
    asked the Commission to require Bell Atlantic to offer access to the
    EPIC software. In response, on December 20, 1995, Bell Atlantic
    informed the Commission in a written filing that it had offered to
    license the EPIC software to Rainbow.[^45] Bell Atlantic conceded in
    the filing that Rainbow had requested a proposal to license the EPIC
    software from Bell Atlantic in November 1995, but claimed that it
    had not yet completed the "internal work" needed to submit such a
    proposal.[^46] Despite these representations, Bell Atlantic never
    provided Rainbow with any EPIC software licensing proposal.[^47]

20. We also find that Rainbow reasonably relied upon these statements in
    deciding not to pursue development of its own interface software
    until it was too late to pursue such an alternative route. As
    detailed above, over a period of more than a year and a half prior
    to the January 1996 launch of service on the Dover Township system,
    Bell Atlantic repeatedly represented to Rainbow and the Commission
    that it would make the EPIC software available for licensing. In
    reliance on these representations, Rainbow refrained from developing
    its own interface software and instead requested a license to use
    the EPIC software from Bell Atlantic.[^48] Under these
    circumstances, Rainbow's reliance on Bell Atlantic's representations
    and decision not to develop its own interface software were entirely
    reasonable.

21. Bell Atlantic concedes that Rainbow needed to have some software
    capable of interfacing with the system, but claims that Rainbow
    could have developed its own interface software from the available
    generic technical specifications.[^49] Additionally, Bell Atlantic
    contends that Rainbow knew it would have to develop its own
    interface software because Bell Atlantic allegedly informed all
    programmers that they, and not Bell Atlantic, were responsible for
    the interface software.[^50]

22. As explained above, however, Bell Atlantic made specific
    representations both to Rainbow and the Commission that it would
    license the EPIC software to Rainbow. By the time Rainbow realized
    that Bell Atlantic would not live up to its promises, it was too
    late (and too expensive) for Rainbow to develop its own interface
    software before the Dover Township system began operations.
    According to Bell Atlantic, Futurevision took more than two years
    and spent approximately \$300,000 to develop the EPIC software.[^51]
    In early 1996, Rainbow estimated that it could develop its own
    software with "2½ to 3½ man-years effort" at a cost of \$350,000 to
    \$400,000.[^52] Bell Atlantic told Rainbow as recently as December
    20, 1995 that it would provide the EPIC software for Rainbow's use.
    Even if Bell Atlantic had informed Rainbow the very next day that
    the EPIC software was no longer available, Rainbow could not
    reasonably have developed its own interface software by the time
    Bell Atlantic activated service at the end of January 1996. We are
    thus not persuaded that Rainbow could have developed its own
    interface software in a timely manner and at a reasonable cost.

23. Bell Atlantic next insists that Rainbow could have licensed the EPIC
    software from Futurevision. Rainbow did attempt to negotiate an
    agreement with Futurevision, but Futurevision refused to license the
    EPIC software unless Rainbow agreed to let Futurevision carry
    Rainbow's video programming.[^53] In essence, Futurevision leveraged
    its right to license the EPIC software to try to force Rainbow to
    give up the exclusive rights to its own video programming. Under
    these circumstances, particularly considering Futurevision's close
    relationship with Bell Atlantic, we do not consider this to be a
    reasonable alternative for Rainbow. In any event, Bell Atlantic's
    representations significantly affected Rainbow's ability to exercise
    this option since Rainbow had no reason to pursue such negotiations
    with Rainbow until it became clear that Bell Atlantic was refusing
    to provide the EPIC software.

24. Bell Atlantic asserts two additional arguments, each of which is
    undermined by its representations to Rainbow. Bell Atlantic first
    asserts that Futurevision prohibited it from licensing the EPIC
    software to Rainbow because Bell Atlantic could not provide the
    required technical support and was unwilling to pay Futurevision's
    proposed technical support fee.[^54] Second, Bell Atlantic argues
    that it had no obligation to provide the EPIC software because the
    Tariff only obligated it to provide "delivery of . . .video signals
    between the Programmer-Customer and its End-User Subscribers."[^55]
    We find these arguments are without merit. Beginning in May 1994 and
    continuing through December 1995, Bell Atlantic held itself out to
    Rainbow and the Commission as able and willing to license the EPIC
    software. Rainbow reasonably relied upon these representations. As a
    result, Bell Atlantic could not lawfully refuse to supply the
    license on the grounds that it would be too expensive or was not
    legally required.

25. In light of these facts, we conclude that Bell Atlantic's refusal to
    make the EPIC software available to Rainbow was an unjust and
    unreasonable practice under section 201(b) of the Act.[^56]

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B.  Rainbow is Entitled to Damages.

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26. Rainbow requests damages in the amount of its \$345,600 channel
    reservation deposit plus interest. We find this relief, including
    prejudgment interest, is appropriate and reasonable under sections
    206 and 209 of the Act.[^57] From October 4, 1996 (the date on which
    Bell Atlantic first refused to return Rainbow's channel reservation
    deposit), until the present day, Bell Atlantic has wrongfully
    retained the channel reservation deposit and has deprived Rainbow of
    the beneficial use of these funds. We conclude that an award of
    interest in this proceeding will make Rainbow whole and avoid any
    unjust enrichment to Bell Atlantic stemming from behavior we find to
    be in violation of section 201(b) of the Act. The parties shall
    compute the interest using the IRS rate for tax refunds based on the
    total amount of \$345,600 and covering the time period beginning
    October 4, 1996 and concluding on the date Bell Atlantic provides
    full payment to Rainbow.[^58]

**IV. CONCLUSION**

27. For the foregoing reasons, we grant Rainbow's complaint and conclude
    that Bell Atlantic violated section 201(b) of the Communications Act
    of 1934, as amended, 47 U.S.C. § 201(b). As damages for this
    violation, Bell Atlantic must pay Rainbow \$345,600, including
    interest computed as set forth above.

**V. ORDERING CLAUSES**

28. Accordingly, IT IS ORDERED, pursuant to sections 4(i), 4(j), 201(b),
    and 208 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 154(j), 201(b), and 208, and authority delegated pursuant to
    sections 0.111 and 0.333 of the Commission's rules, 47 C.F.R. §§
    0.111, 0.333, that the formal complaint filed in this matter by
    Rainbow Programming Holdings is hereby GRANTED in part as indicated
    herein.

29. IT IS FURTHER ORDERED, pursuant to sections 4(i), 4(j), 206, 208 and
    209 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 154(j), 206, 208 and 209, and authority delegated pursuant
    to sections 0.111 and 0.333 of the Commission's rules, 47 C.F.R. §§
    0.111, 0.333, that Defendants Bell Atlantic-New Jersey, Inc., and
    Bell Atlantic Network Services, Inc. shall pay Complainant Rainbow
    Programming Holdings, Inc. three hundred forty-five thousand, six
    hundred dollars (\$345,600) not later than thirty (30) days from the
    release date of this Memorandum Opinion and Order, along with
    prejudgment and post-judgment interest. The parties shall compute
    the interest payment using the 1996 IRS rate for tax refunds. The
    interest payment shall be calculated beginning on October 4, 1996
    and ending on the date that Bell Atlantic makes full payment to
    Rainbow of the damages owed.

30. IT IS FURTHER ORDER that Rainbow's Motion to Compel, filed August
    26, 1997, is DENIED as moot.

> FEDERAL COMMUNICATIONS COMMISSION
>
> David H. Solomon

######### Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 208. *See* Formal Complaint of Rainbow Programming
    Holdings, Inc., File No. E-97-15 (filed March 28, 1997)
    ("Complaint").

[^2]: 47 U.S.C. § 201(b). Section 201(b) of the Act, in relevant part,
    provides that "all charges, practices, classifications, and
    regulations for and in connection with such communication service
    \[interstate or foreign communication by wire or radio\], shall be
    just and reasonable. . . ." *Id.*

[^3]: 47 U.S.C. § 206.

[^4]: Complaint ¶ 2; Answer, File No. E-97-15 (filed May 27, 1997)
    ("Answer"), at 18.

[^5]: Complaint ¶ 3; Answer, at 18.

[^6]: Complaint ¶ 1.

[^7]: *Telephone Company-Cable Television Cross-Ownership Rules,
    Sections 63.54-63.58*, Second Report and Order, Recommendation to
    Congress, and Second Further Notice of Proposed Rulemaking, 7 FCC
    Rcd 5781 (1992) ("*Second Report and Order*").

[^8]: The Commission defined the "basic platform" as a common carriage
    transmission service with the means by which an end-user could
    access any or all video programming. *Application of New Jersey Bell
    Telephone Company*, Order and Authorization, 9 FCC Rcd 3677, 3677-78
    (1994) ("*New Jersey Bell Order*"). *See* Brief of Rainbow
    Programming Holdings, Inc., File No. E-97-15 (filed January 14,
    1998) ("Rainbow Brief"), at 5 (*citing Second Report and Order*, 7
    FCC Rcd at 5787, 5797).

[^9]: *See* note 7, *supra*.

[^10]: *See* *New Jersey Bell Order*, 9 FCC Rcd at 3677 ¶ 1.

[^11]: Brief of Bell Atlantic-New Jersey, File No. E-97-15 (filed
    January 14, 1998) ("Bell Atlantic Brief"), at 3.

[^12]: Bell Atlantic Brief at 26. *See* Defendants' Responses and
    Objections to Plaintiff's First Set of Interrogatories, File No.
    E-97-15 (filed July 28, 1997) ("Bell Atlantic Response to
    Interrogatories"), at 9 (attached as Exhibit A to Bell Atlantic
    Brief).

[^13]: Bell Atlantic Brief at 3; *Bell Atlantic Telephone Companies*,
    Tariff No. 10, Transmittal No. 741 (filed Jan. 27, 1995) (attached
    as Exhibit 2 to Complaint); *Bell Atlantic Telephone Companies*,
    Tariff No. 10, Transmittal No. 756 (filed March 10, 1995) (attached
    as Exhibit 7 to Complaint).

[^14]: Bell Atlantic Brief at 6. Futurevision had already entered into
    an agreement with Bell Atlantic to reserve 60 channels on the Dover
    Township system. Bell Atlantic and Futurevision agreed that
    Futurevision should submit an additional deposit to cover those
    initial 60 channels in addition to its deposit for the 36 channels.
    Futurevision submitted this additional deposit on August 3, 1995.
    *See* Bell Atlantic Response to Interrogatories, at 13.

[^15]: *See* Bell Atlantic Brief at 6; Rainbow Brief at 8. *See also*
    Affidavit of Andrea Greenberg at 1, ¶ 3 (attached as Exhibit 11 to
    Complaint).

[^16]: *See* Letter from Hardy F. Moebius, Executive Director, Video
    Dialtone Sales and Marketing, Bell Atlantic Network Services, Inc.,
    to Andrea Greenberg, Senior Vice President, Business and Regulatory
    Affairs, Rainbow Programming Holdings, Inc., dated April 12, 1995
    (attached as Exhibit 4 to Complaint); Bell Atlantic Response to
    Interrogatories at 14.

[^17]: "Application for Video Dialtone Service" dated May 17, 1995
    (attached as Exhibit 6 to Complaint).

[^18]: *See* Tariff § 3.2(A) ("The service for which Video Dialtone
    Service is provided is either month-to-month or sixty (60) months,
    depending upon the rate schedule chosen by the Programmer-Customer.
    Programmer-Customers must purchase Video Dialtone Service for a
    minimum of three months.")

[^19]: *See* Bell Atlantic Brief at 25; Bell Atlantic Reply Brief at 10;
    December 20, 1995 Declaration of John C. Phillips at 3, ¶ 8-9
    (attached as an exhibit to Answer) ("Phillips Dec. 20 Decl."). John
    C. Phillips served as the manager of Video Dialtone Marketing and
    Sales for Bell Atlantic Network Services, Inc. and was responsible
    for representing Bell Atlantic's video dialtone products to
    programmers, including Rainbow. Phillips Dec. 20 Decl. at 1, ¶ 1.

[^20]: Bell Atlantic Response to Interrogatories, at 5.

[^21]: *Id.* *See also* Bell Atlantic Brief at 6, 7-8, 26; Bell Atlantic
    Reply Brief at 9-10.

[^22]: Rainbow Brief at 10; Bell Atlantic Brief at 10. On February 8,
    1996, the Telecommunications Act of 1996 ("the 1996 Act") became
    law. (*See* Telecommunications Act of 1996, Pub. L. No. 104-104, 110
    Stat. 56 (1996)). Section 302(b)(3) of the 1996 Act required the
    termination of the video dialtone regulations and policies
    previously adopted by the Commission, but stated that it should "not
    be construed to require the termination of any video-dialtone system
    that the Commission has approved before the date of enactment of
    this Act." Pursuant to section 302(b)(3), the Commission eliminated
    the video dialtone rules and policies on March 11, 1996, but did not
    require existing video dialtone providers to cease operations. *See
    Implementation of Section 302 of the Telecommunications Act of 1996,
    Open Video Systems*, Report and Order and Notice of Proposed
    Rulemaking, 11 FCC Rcd 14639, 14668 ¶¶ 75-76 (1996); *Implementation
    of Section 302 of the Telecommunications Act of 1996, Open Video
    Systems*, First Order on Reconsideration, 11 FCC Rcd 19081, 19085 ¶
    9 (1996) ("*First Order on Reconsideration*"). Rather, on July 23,
    1996, in the *First Order on Reconsideration*, the Commission
    required video dialtone providers to select by November 1996 one of
    four programming delivery options to supplant that provider's
    existing video dialtone system. *See First Order on
    Reconsideration*, 11 FCC Rcd at 19085 ¶¶ 7-9.

[^23]: *See* Letters from Andrea Greenberg, Senior Vice President,
    Business and Regulatory Affairs, Rainbow Programming Holdings, Inc.,
    to Hardy F. Moebius, Executive Director, Video Dialtone Sales and
    Marketing, Bell Atlantic Network Services, Inc., dated September 25,
    1996 and October 22, 1996 (attached as Exhibit 13 to Complaint)
    ("Greenberg Letters").

[^24]: *See* Greenberg Letters.

[^25]: *See* Letters from Hardy F. Moebius, Executive Director, Video
    Dialtone Sales and Marketing, Bell Atlantic Network Services, Inc.,
    to Andrea Greenberg, Senior Vice President, Business and Regulatory
    Affairs, Rainbow Programming Holdings, Inc. dated October 4, 1996
    and December 16, 1996, attached as Exhibit 14 to Complaint.

[^26]: Complaint ¶¶ 53, 67. Section 201(a) of the Act, in relevant part,
    requires every common carrier offering an interstate communications
    service to furnish such service "upon reasonable request." 47 U.S.C.
    § 201(a). Section 202(a) of the Act, in relevant part, precludes
    "unjust or unreasonable discrimination" in the charges, practices,
    or services of a regulated common carrier and prohibits a carrier
    from exercising any "undue or unreasonable prejudice or
    disadvantage" against any person or class of persons. 47 U.S.C. §
    202(a).

[^27]: Complaint ¶ 80.

[^28]: Complaint ¶¶ 82, 90, 91-96, 103. Section 61.2(a) of the
    Commission's rules provides that, "in order to remove all doubt as
    to their proper application, all tariff publications must contain
    clear and explicit explanatory statements regarding the rates and
    regulations." 47 C.F.R. § 61.2(a). Section 203(a) of the Act, in
    relevant part, requires carriers to file tariffs showing all charges
    for service and "the classification, practices, and regulations
    affecting such charges." 47 U.S.C. § 203(a).

[^29]: Complaint ¶ 74.

[^30]: Complaint ¶¶ 53.

[^31]: 47 U.S.C. § 201(b).

[^32]: *Telephone Company-Cable Television Cross-Ownership Rules,
    Sections 63.54-63.58*, CC Docket No. 87-266, Further Notice of
    Proposed Rulemaking, First Report and Order and Second Further
    Notice of Inquiry, 7 FCC Rcd 300, 316, at ¶ 30 (1991).

[^33]: *Application of New Jersey Bell*, 9 FCC Rcd at 3689 ¶ 67.

[^34]: *See* Bell Atlantic Reply Brief at 10.

[^35]: Bell Atlantic Response to Interrogatories at 4; Rainbow Brief at
    25-26.

[^36]: *New Jersey Bell Order*, 9 FCC Rcd at 3689 ¶ 65.

[^37]: *Id.* ¶ 66. Bell Atlantic also notified programmers that they
    could license the EPIC software from Futurevision or develop their
    own software. *Id.*

[^38]: *See* Rainbow Answers and Objections to Interrogatories, File No.
    E-97-15 (filed July 28, 1997) ("Rainbow Response to
    Interrogatories"), at 11 (attached as Exhibit 8 to Rainbow Brief).

[^39]: *See* Rainbow Response to Interrogatories at 13; Affidavit of
    Frank P. DeJoy at 5, ¶ 19 ("DeJoy Aff.") (attached as Exhibit 10 to
    Complaint). Frank DeJoy served as Senior Vice President of Video
    Services at Rainbow and had "overall responsibility for the
    provision of the video programming service in Dover Township." DeJoy
    Aff. at 1, ¶ 1. DeJoy also claimed that Bell Atlantic told him
    Rainbow would need to use the specific proprietary EPIC software to
    access the system. DeJoy Aff. at 5, ¶ 19. However, this claim is
    contradicted by Bell Atlantic's John Phillips, who "did not tell him
    \[DeJoy\] that Rainbow would be unable to offer its video
    programming service unless it acquired specific proprietary
    interface software." Phillips Dec. 20 Decl. at 3, ¶ 8.

[^40]: Phillips Dec. 20 Decl. at 4-5, ¶ 13.

[^41]: Phillips Dec. 20 Decl. at 4, ¶ 12. *See* Rainbow Response to
    Interrogatories at 13.

[^42]: *Id.*

[^43]: Phillips Dec. 20 Decl. at 4-5, ¶¶ 13.

[^44]: *Bell Atlantic Telephone Companies Revisions to Tariff FCC No.
    10*, CC Docket No. 95-145, Opposition of Rainbow Programming
    Holdings, Inc. to Bell Atlantic Direct Case (filed Nov. 30, 1995) at
    15.

[^45]: *Bell Atlantic Telephone Companies Revisions to Tariff FCC No.
    10*, CC Docket No. 95-145, Comments of Bell Atlantic (filed January
    11, 1996), at 25.

[^46]: *Id.*

[^47]: Bell Atlantic Brief at 27; Rainbow Brief at 27.

[^48]: *See* Phillips Dec. 20 Decl. at 4-5, ¶¶ 12-13. *See also* Rainbow
    Response to Interrogatories at 13.

[^49]: Bell Atlantic Brief at 25; Bell Atlantic Reply Brief at 10.

[^50]: Bell Atlantic Brief at 6, 7-8, 26; Bell Atlantic Reply Brief at
    9-10

[^51]: Bell Atlantic's Response to Interrogatories, at 5. Rainbow Brief
    at 27.

[^52]: Rainbow Response to Interrogatory 6 at 13.

[^53]: DeJoy Aff. at 5, ¶ 23.

[^54]: *See* May 27, 1997 Declaration of John C. Phillips, attached as
    Exhibit B to Answer, at 2 ("Phillips May 27 Decl."); *see also* Bell
    Atlantic Response to Interrogatories at 5.

[^55]: *See* Bell Atlantic Brief at 18; Tariff § 2.2.1.

[^56]: Because we conclude that Bell Atlantic violated section 201(b) of
    the Act by denying Rainbow the necessary EPIC interface software and
    failing to provide access to the Dover Township system, we need not
    and do not address the other claims in the complaint.

[^57]: 47 U.S.C. §§ 206, 209. Bell Atlantic does not address the
    applicability of pre-judgement interest in this case other than to
    deny the allegation in Rainbow's complaint. *See* Answer, at 28. The
    Commission's authority to award prejudgment interest in a section
    208 complaint proceeding is well established under the Act. *MCI
    Telecommunications Corp. v. Pacific Bell Telephone Co. et al.*,
    Memorandum Opinion and Order, 8 FCC Rcd 1517, 1529-30 (1993); *US
    Sprint Communications Limited Partnership v. Pacific Northwest Bell
    Telephone Company et al.*, Memorandum Opinion and Order, 8 FCC Rcd
    1288, 1298 (1993). In deciding whether to award prejudgment
    interest, the Commission is guided by the law applied by federal
    courts, which provides that a prejudgment interest award is "a
    matter left to the sound discretion of the court" and is therefore
    guided by considerations of fairness. *Id.*

[^58]: The IRS rate of interest for refunds and additional tax payments
    is the appropriate interest rate for this type of a proceeding,
    because the rate is easily obtainable and revised on a regular
    basis. *See Sprint v. PNBTC*, 1288 FCC Rcd at 1298 ¶ 51, n.109
    (*citing Teleprompter of Fairmont v. C&P of West Virginia*, 79 FCC
    2d 232 (1980)).