## FOR IMMEDIATE RELEASE News Media Contact:

March 15, 2000 Michelle Russo at (202) 418-2358

FCC ADOPTS RULES FOR RETRANSMISSION CONSENT

NINE MONTHS AHEAD OF DEADLINE

# Establishes a Two-Part Test for "Good Faith" Negotiations and Prohibits Exclusivity

Washington, DC -- The Federal Communications Commission (FCC) today
announced rules for good faith negotiations and exclusive agreements for
retransmission consent involving TV stations and cable or satellite
companies. The FCC established a two-part test for good faith
negotiations and prohibited exclusive retransmission agreements that are
negotiated before January 1, 2006.

Recognizing the impact these rules have on multichannel video
competition and the growth of satellite service, the FCC completed these
portions of the retransmission consent rulemaking almost nine months
ahead of the statutory deadline. The Satellite Home Viewer Improvement
Act (SHVIA), enacted late last year, seeks to place satellite carriers
on an equal footing with local cable operators in order to spur
competition in the video marketplace and give consumers more and better
choices.

SHVIA required the FCC to revise the rules surrounding retransmission
consent agreements between television broadcast stations and
multichannel video programming distributors (MVPDs), such as cable and
satellite companies. The law prohibits a TV station that "provides
retransmission consent from engaging in exclusive contracts for carriage
or failing to negotiate in good faith" until January 1, 2006. The FCC
released a *Notice of Proposed Rulemaking* on December 22, 1999 to
address these issues. The notice also sought comment on the regulations
relating to the retransmission consent election cycle for satellite
carriers. The FCC will adopt election rules in a separate order within
the time limit established by Congress.

The first part of the two-part good faith test consists of a brief,
objective list of procedural standards applicable to broadcast stations
negotiating retransmission consent agreements:

1)  a broadcaster may not refuse to negotiate with an MVPD;

2)  a broadcaster must appoint a negotiating representative with the
    authority to bargain;

-more-

3)  a broadcaster must agree to meet at reasonable times and locations
    and cannot delay the course of negotiations;

4)  a broadcaster may not offer a single, unilateral proposal;

5)  in responding to an offer proposed by an MVPD, a broadcaster must
    provide reasons for rejecting any aspects of the offer;

6)  a broadcaster is prohibited from entering into an agreement with any
    party conditioned upon denying retransmission consent to any MVPD;
    and

7)  a broadcaster must agree to execute a written retransmission consent
    agreement that sets forth the full agreement between the broadcaster
    and the MVPD.

Under the second part of the good faith test, an MVPD may present facts
to the FCC which, even though they are not a specific violation listed
above, given the totality of the circumstances constitute a failure to
negotiate in good faith.

The SHVIA notes that "it shall not be a failure to negotiate in good
faith if the television broadcast station enters into retransmission
agreements containing different terms and conditions...\[if the
agreements are\] based on competitive marketplace considerations." The
FCC concluded that it is not possible to identify objective competitive
marketplace factors that broadcasters must use in negotiating. To
provide guidance, the FCC listed some conditions that are potential
competitive marketplace considerations and some that are not. For
instance, the order notes that any effort to stifle competition through
the negotiation process would not meet the good faith negotiation
requirement.

Today's rules also prohibit TV stations from entering exclusive
retransmission consent agreements and from negotiating exclusive
contracts that would take effect after the sunset of the prohibition,
January 1, 2006.

The order directs the Commission staff to expedite resolution of good
faith and exclusivity complaints and notes that the burden of proof is
on the MVPD complainant. The order also allows parties to pursue
voluntary mediation and the FCC will consider favorably a broadcaster's
willingness to participate, but non-participation will not constitute a
violation of good faith.

Action by the Commission, March 14, 2000, by First Report and Order (FCC
00-99). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell
and Tristani.

Cable Services Bureau Contacts: Steve Broeckaert and Jay Heimbach at
(202) 418-7200.

### CS Docket No. 99-363

-FCC-