**DA 04-1454**

**May 25, 2004**

**MB Docket No. 04-207**

**COMMENT REQUESTED ON A LA CARTE AND THEMED TIER PROGRAMMING AND
PRICING OPTIONS FOR PROGRAMMING DISTRIBUTION ON CABLE TELEVISION AND
DIRECT BROADCAST SATELLITE SYSTEMS**

**Comment Date: July 8, 2004**

**Reply Comment Date: July 23, 2004**

Through this public notice, comment is sought on factual questions
regarding the provision of *a la* *carte* and "themed-tier" services on
cable television and direct broadcast satellite systems. The responses
to the questions listed below will be used in the preparation of a
Report that will address questions relating to the ability of
multichannel video programming distributors ("MVPDs") to provide such
services to customers on a voluntary basis.

This request for comment is intended to assist in gathering information
necessary to respond to specific requests from members of Congress for a
Report on these issues. *See* May 18, 2004, letter from Congressmen
Barton, Dingell, Upton, Markey, and Deal of the Committee on Energy and
Commerce to Chairman Powell and May 19, 2004, letter from Senator John
McCain, Chairman, Committee on Commerce, Science and Transportation to
Chairman Powell. \[Copies included in the file of this Docket.\]

The Report will address, at a minimum, the following topics:

**I. HISTORICAL**

Do MVPDs currently have the option to purchase channels from programmers
on a stand-alone

basis, such that they could, if they chose, offer programming to
consumers on an *a la carte* or

themed-tier basis? What are the limitations, if any, on their
flexibility to do so? What statutory or

regulatory action would be needed to remove any such limitations?

**II. RATES**

What would the impact be on retail rates to consumers if programmers
were required to offer their programming to MVPDs exclusively on a
stand-alone basis, and could not also offer programming on a bundled
basis for free or at a discounted rate?

What would the impact be on retail rates to consumers if programmers, in
addition to the currently offered packages, were required to allow MVPDs
to offer their programming on an *a la* *carte* or themed-tier basis if
the MVPD chose to do so?

Can MVPDs currently offer *a la* *carte* and themed-tier service in
addition to the packages currently offered, such as basic and expanded
basic? Can the same universe of channels be offered both on an expanded
basic basis, as well as an *a la carte* or themed-tier basis? How would
an *a la carte* or theme-tiered approach affect a network's ability to
attract advertising revenue? Would the impact change depending upon
whether an MVPD subscriber had to purchase a basic/expanded basic tier
before purchasing additional channels on an *a la* *carte* basis? How
would an *a la* *carte* or themed-tier option, in addition to packages
currently offered, affect a network's ability to attract advertising
revenue?

What effect would *a* *la carte* or themed-tier have on a network's
per-subscriber license fees?

Are there networks that have migrated from being offered on a tiered
basis to an *a la carte* basis, or vice versa? What was the effect of
this migration on the network's economic viability and cost to
consumers?

**III. RETRANSMlSSION CONSENT**

How have broadcast networks and affiliate groups used the retransmission
consent process to expand carriage of affiliated programming? How has
this affected rates for MVPD offerings for consumers?

Do the rules governing retransmission consent and must-carry limit
consumers' ability to select their own programming? If so, how?

**IV. DIVERSITY OF PROGRAMMING**

What effect, if any, would the voluntary offering of *a la carte* or
themed-tier service have on the ability of independent, niche,
religious, and ethnic programming to continue to be carried or launched?

**V. RURAL AND SMALLER MARKETS**

Describe the programming cost differential for the largest cable and
satellite companies and the smallest independent MVPDs in smaller
markets and rural areas. What is the "volume discount" to the larger
companies?

What percent of total expenses do smaller MVPDs in smaller markets and
rural areas attribute to programming, and how does this compare to the
largest cable and satellite companies?

What would be the impact on the programming costs of smaller MVPDs if
they were to purchase programming on a stand-alone basis rather than in
bundles?

What would be the impact on the programming costs of smaller MVPDs if
they were allowed to offer *a la carte* or themed-tier service in
addition to bundled packages?

**VI. SET-TOP BOXES**

Is an addressable converter box required for every television set on
which a consumer might wish to view programming offered on an *a* *la
carte* or themed-tier basis? What is the number of television sets that
are not currently connected to addressable converter boxes? What are the
costs to consumers of buying or leasing these boxes?

Is an addressable converter box required for every television set: on
which a consumer might wish to view digital programming? Is it true that
*a la* *carte* or themed-tier services can only be offered on a digital
basis? What percent of cable and satellite distributors offer digital
programming to their subscribers? What percent of consumers currently
subscribe to digital programming packages?

What impact would an *a la carte* and themed-tier service have on the
uni-directional plug-and-play regulations, and on the ongoing
discussions regarding potential bi-directional plug-and-play

regulations?

**VII. LEGAL AND REGULATORY QUESTIONS**

Is there any reason to treat cable and satellite operators differently
with regard to the *a la carte*

and themed-tier service?

Would MVPDs be in compliance with the must carry rules so long as they
offered all local broadcast stations on an *a la carte* or themed-tier
basis, or would the must-carry rules prohibit MVPDs from offering local
broadcast stations on an *a la carte* or themed-tier basis?

What, if any, Constitutional or other legal questions are raised by
programmers\' ability to bundle services through retransmission consent,
regional sports contracts, and national programming contracts for
marquee programming?

What, if any*,* Constitutional or other legal questions would be raised
if Congress required programmers to offer their channels to MVPDs on a
stand-alone basis and prohibited them from requiring carriage of their
programming on particular tiers?

What, if any, Constitutional or other legal questions would be raised
if, in addition to currently offered packages, Congress required
programmers to allow MVPDs to voluntarily offer their channels on an *a*
*la carte* or themed-tier basis?

We seek comment on these issues and any other issues that will inform
the Report on the provision of *a la carte* or themed-tier programming
by MVPDs.

**VIII. PROCEDURAL MATTERS**

Comments should be filed on or before July 8, 2004 and reply comments
should be filed by July 23, 2004. Comments and reply comments may be
filed using the Commission's Electronic Filing System ("ECFS") or by
filing paper copies. *See* *Electronic Filing of Documents in Rulemaking
Proceedings*, 63 Fed. Reg 24121 (1998). All comments should reference MB
Docket No. 04-207.

Comments filed through the ECFS can be sent as an electronic file via
the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only
one copy of an electronic submission must be filed. In completing the
transmittal screen, commenters should include their full name, U.S.
Postal Service mailing address, and the applicable docket or rulemaking
number. Parties may also submit an electronic comment by Internet
e-mail. To get filing instructions for e-mail comments, commenters
should send an e-mail to ecfs@fcc.gov, and should include the following
words in the body of the message, "get form." Parties who choose to file
by paper must file an original and four copies of each filing. Filings
can be sent by hand or messenger delivery, by commercial overnight
courier, or by first-class or overnight U.S. Postal Service mail. The
Commission's contractor, Natek, Inc., will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, N.E., Suite 110, Washington, D.C. 20002. The
filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building. Commercial
overnight mail (other than U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD
20743. U.S. Postal Service first-class mail, Express Mail, and Priority
Mail should be addressed to 445 12th Street, SW, Washington, D.C. 20554.
All filings must be addressed to the Commission's Secretary, Office of
the Secretary, Federal Communications Commission. In addition parties
should serve a copy of each filing via e-mail or one paper copy to Ben
Golant, Suite 4A-803, Media Bureau, FCC, 445 12^th^ St., S.W.,
Washington, D.C. 20554.

Comments, reply comments, and other submissions will be available for
public inspection during regular business hours in the FCC Reference
Center, Federal Communications Commission, 445 12th Street, S.W.,
CY-A257, Washington, D.C. 20554. These documents also will be available
electronically from the Commission's Electronic Comment Filing System.
Documents are available electronically in ASCII text, Word 97, and Adobe
Acrobat. Copies of filings in this proceeding may be obtained from
Qualex International, Portals II, 445 12^th^ Street, S.W., Room,
CY-B402, Washington, D.C., 20554, telephone (202) 863-2893, facsimile
(202) 863-2898, or via e-mail at qualexint@aol.com. To request materials
in accessible formats for people with disabilities (Braille, large
print, electronic files, audio format), send an e-mail to fcc504@fcc.gov
or call the Consumer and Governmental Affairs Bureau at 202-418-0531
(voice), 202-418-7365 (TTY).

For further information contact Ben Golant, Media Bureau at (202)
418-7111.

> By the Chief, Media Bureau

**- FCC -**